<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 14, 2000
FILE NO. 333-70013
FILE NO. 811-09183
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM N-1A
<TABLE>
<S> <C> <C>
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 /X/
POST-EFFECTIVE AMENDMENT NO. 2
AND
REGISTRATION STATEMENT UNDER
INVESTMENT COMPANY ACT OF 1940 /X/
AMENDMENT NO. 3
</TABLE>
------------------------
SEI INSURANCE PRODUCTS TRUST
(Exact Name of Registrant as Specified in Charter)
C/O CT CORPORATION
2 Oliver Street
Boston, Massachusetts 02109
(Address of Principal Executive Offices, Zip Code)
EDWARD D. LOUGHLIN
c/o SEI Investments Company
Oaks, Pennsylvania 19456
COPIES TO:
<TABLE>
<S> <C>
Richard W. Grant, Esquire John H. Grady, Jr., Esquire
Morgan, Lewis & Bockius LLP Morgan, Lewis & Bockius LLP
1701 Market Street 1701 Market Street
Philadelphia, Pennsylvania 19103 Philadelphia, Pennsylvania 19103
</TABLE>
------------------------
Title of Securities Being Registered...Units of Beneficial Interest
------------------------
It is proposed that this filing become effective (check appropriate box)
<TABLE>
<C> <S>
/ / immediately upon filing pursuant to paragraph (b)
/X/ on April 29, 2000 pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/ / on [date] pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2)
</TABLE>
If appropriate check the following box:
<TABLE>
<C> <S>
/ / This post-effective Amendment designates a
new effective date for a previously filed
post- effective Amendment.
</TABLE>
------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
SEI
INSURANCE
PRODUCTS
TRUST
-----------------------
PROSPECTUS
CLASS A SHARES
APRIL 30, 2000
EQUITY FUNDS
SEI VP LARGE CAP VALUE FUND
SEI VP LARGE CAP GROWTH FUND
SEI VP S&P 500 INDEX FUND
SEI VP SMALL CAP VALUE FUND
SEI VP SMALL CAP GROWTH FUND
SEI VP INTERNATIONAL EQUITY FUND
SEI VP EMERGING MARKETS EQUITY FUND
FIXED INCOME FUNDS
SEI VP CORE FIXED INCOME FUND
SEI VP BOND INDEX FUND
SEI VP HIGH YIELD BOND FUND
SEI VP INTERNATIONAL FIXED INCOME FUND
SEI VP EMERGING MARKETS DEBT FUND
MONEY MARKET FUND
SEI VP PRIME OBLIGATION FUND
INVESTMENT ADVISER
SEI INVESTMENTS MANAGEMENT CORPORATION
SUB-ADVISERS
ACADIAN ASSET MANAGEMENT, INC.
ALLIANCE CAPITAL MANAGEMENT L.P.
ARTISAN PARTNERS LIMITED PARTNERSHIP
BLACKROCK FINANCIAL MANAGEMENT, INC.
BLACKROCK INTERNATIONAL, LTD.
CAPITAL GUARDIAN TRUST COMPANY
CORONATION ASSET MANAGEMENT (PROPRIETARY) LIMITED
CREDIT SUISSE ASSET MANAGEMENT, LIMITED
CREDIT SUISSE ASSET MANAGEMENT, LLC
LSV ASSET MANAGEMENT, L.P.
MAZAMA CAPITAL MANAGEMENT, LLC
MELLON BOND ASSOCIATES, LLP
MELLON EQUITY ASSOCIATES, LLP
MORGAN STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC.
NICHOLAS-APPLEGATE CAPITAL MANAGEMENT
NOMURA CORPORATE RESEARCH AND ASSET MANAGEMENT, INC.
OECHSLE INTERNATIONAL ADVISORS, LLC
PROVIDENT INVESTMENT COUNSEL, INC.
RS INVESTMENT MANAGEMENT, L.P.
ROBERT W. BAIRD & CO., INCORPORATED
SALOMON BROTHERS ASSET MANAGEMENT INC
SANFORD C. BERNSTEIN & CO., INC.
SAWGRASS ASSET MANAGEMENT, LLC
SCHRODER INVESTMENT MANAGEMENT NORTH AMERICA INC.
SECURITY CAPITAL GLOBAL CAPITAL MANAGEMENT GROUP INCORPORATED
SG PACIFIC ASSET MANAGEMENT, INC.
SGY ASSET MANAGEMENT (SINGAPORE) LIMITED
SG YAMAICHI ASSET MANAGEMENT CO., LTD.
STRATEGIC FIXED INCOME, L.L.C.
TCW INVESTMENT MANAGEMENT COMPANY
WALL STREET ASSOCIATES
WELLINGTON MANAGEMENT COMPANY, LLP
WESTERN ASSET MANAGEMENT COMPANY
WORLD ASSET MANAGEMENT, LLC
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED ANY FUND SHARES OR
DETERMINED WHETHER THIS PROSPECTUS IS ACCURATE OR COMPLETE.
IT IS A CRIME FOR ANYONE TO TELL YOU OTHERWISE.
<PAGE>
SEI Insurance
Products Trust
ABOUT THIS PROSPECTUS
- ------------------------------------------------------------------------
SEI Insurance Products Trust is a mutual fund family that offers shares in
separate investment portfolios (Funds). The Funds have individual investment
goals and strategies and are designed exclusively as funding vehicles for
variable life insurance and variable annuity contracts. This prospectus gives
contract owners important information about the Class A Shares of the Funds that
they should know before investing. Please read this prospectus and keep it for
future reference. Variable life insurance and variable annuity account investors
should also review the separate account prospectus prepared by their insurance
company.
THIS PROSPECTUS HAS BEEN ARRANGED INTO DIFFERENT SECTIONS SO THAT YOU CAN EASILY
REVIEW THIS IMPORTANT INFORMATION. ON THE NEXT PAGE, THERE IS SOME GENERAL
INFORMATION YOU SHOULD KNOW ABOUT RISK AND RETURN THAT IS COMMON TO EACH OF THE
FUNDS. FOR MORE DETAILED INFORMATION ABOUT THE FUNDS PLEASE SEE:
SEI VP LARGE CAP VALUE FUND..........................................2
SEI VP LARGE CAP GROWTH FUND.........................................4
SEI VP S&P 500 INDEX FUND............................................6
SEI VP SMALL CAP VALUE FUND..........................................8
SEI VP SMALL CAP GROWTH FUND........................................10
SEI VP INTERNATIONAL EQUITY FUND....................................12
SEI VP EMERGING MARKETS EQUITY FUND.................................14
SEI VP CORE FIXED INCOME FUND.......................................16
SEI VP BOND INDEX FUND..............................................18
SEI VP HIGH YIELD BOND FUND.........................................20
SEI VP INTERNATIONAL FIXED INCOME FUND..............................22
SEI VP EMERGING MARKETS DEBT FUND...................................24
SEI VP PRIME OBLIGATION FUND........................................26
MORE INFORMATION ABOUT FUND INVESTMENTS.............................28
INVESTMENT ADVISER, SUB-ADVISERS AND PORTFOLIO MANAGERS.............29
PRIOR PERFORMANCE
INFORMATION... 34
PURCHASING AND SELLING FUND SHARES..................................36
DIVIDENDS AND DISTRIBUTIONS.........................................37
TAXES...............................................................37
HOW TO OBTAIN MORE INFORMATION ABOUT SEI INSURANCE PRODUCTS
TRUST.......................................................Back Cover
- --------------------------------------------------------------------------------
THE FUNDS AND GLOBAL ASSET ALLOCATION
Each Fund has its own distinct risk and reward characteristics, investment
objectives, policies and strategies. SEI Investments Management Corporation
("SIMC") constructs and maintains global asset allocation strategies, and the
Funds are designed in part to implement those strategies. The degree to which an
investor's portfolio is invested in the particular market segments and/or asset
classes represented by these Funds varies, as does the investment risk/return
potential represented by each Fund. Some Funds, especially the SEI VP High Yield
Bond, SEI VP Emerging Markets Equity and SEI VP Emerging Markets Debt Funds, may
have extremely volatile returns. Because of the historical lack of correlation
among various asset classes, an investment in a mix of Funds representing a
range of asset classes as part of an asset allocation strategy may reduce the
strategy's overall level of volatility. As a result, a global asset allocation
strategy may reduce risk.
In managing the Funds, SIMC focuses on four key principles: asset allocation,
portfolio structure, the use of specialist managers, and continuous portfolio
management. Asset allocation across appropriate asset classes (represented by
the Funds) is the central theme of SIMC's investment philosophy. SIMC seeks to
reduce risk further by creating a portfolio that is diversified within each
asset class. SIMC then oversees a network of specialist managers who invest the
assets of these Funds in distinct segments of the market or class represented by
each Fund. These specialist managers adhere to distinct investment disciplines,
with the goal of providing greater consistency and predictability of results, as
well as broader diversification across and within asset classes. Finally, SIMC
regularly rebalances to ensure that the appropriate mix of assets is constantly
in place, and constantly monitors and evaluates specialist managers for these
Funds to ensure that they do not deviate from their stated investment philosophy
or process.
<PAGE>
PROSPECTUS 1
RISK/RETURN INFORMATION COMMON TO THE FUNDS
Each Fund is a mutual fund that is available solely as a funding vehicle for
variable annuity and variable life insurance contracts sold by various insurance
companies. A mutual fund pools investors' money and, using professional
investment managers, invests it in securities.
Each Fund has its own investment goal and strategies for reaching that goal.
Each Fund's assets are managed under the direction of SIMC, and one or more
Sub-Advisers who manage portions of the Funds' assets in a way that they believe
will help the Funds achieve their goals. SIMC acts as "manager of managers" for
the Funds, and attempts to ensure that the Sub-Adviser(s) comply with the Funds'
investment policies and guidelines. SIMC also recommends the appointment of
additional or replacement Sub-Advisers to the Funds' Board. Still, investing in
the Funds involves risks, and there is no guarantee that a Fund will achieve its
goal. SIMC and the Sub-Advisers make judgments about the securities markets, the
economy, and companies, but these judgments may not anticipate actual market
movements or the impact of economic conditions on company performance. In fact,
no matter how good a job the Advisers do, you could lose money on your
investment in a Fund, just as you could with other investments. A Fund share is
not a bank deposit, and it is not insured or guaranteed by the FDIC or any
government agency.
The value of your investment in a Fund (other than the SEI VP Prime Obligation
Fund) is based on the market prices of the securities the Fund holds. These
prices change daily due to economic and other events that affect securities
markets generally, as well as those that affect particular companies or
governments. These price movements, sometimes called volatility, will vary
depending on the types of securities the Fund owns and the markets in which they
trade. The estimated level of volatility for each Fund is set forth in the Fund
Summaries that follow. The effect on a Fund's share price of a change in the
value of a single security holding will depend on how widely the Fund
diversifies its holdings.
THE INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS MAY BE SIMILAR TO THOSE OF
OTHER RETAIL MUTUAL FUNDS WHICH CAN BE PURCHASED OUTSIDE OF A VARIABLE INSURANCE
PRODUCT, AND THAT ARE MANAGED BY THE SAME INVESTMENT ADVISER OR SUB-ADVISERS.
THE INVESTMENT RESULTS OF THE FUNDS, HOWEVER, MAY BE HIGHER OR LOWER THAN THE
RESULTS OF SUCH OTHER RETAIL MUTUAL FUNDS. THERE CAN BE NO ASSURANCE, AND NO
REPRESENTATION IS MADE, THAT THE INVESTMENT RESULTS OF ANY OF THE FUNDS WILL BE
COMPARABLE TO THE INVESTMENT RESULTS OF ANY OTHER RETAIL MUTUAL FUND, EVEN IF
THE OTHER RETAIL MUTUAL FUND HAS THE SAME INVESTMENT ADVISER OR SUB-ADVISERS.
<PAGE>
2 PROSPECTUS
SEI VP LARGE CAP VALUE FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Long-term growth of capital and income
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY Medium to high
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing multiple specialist sub-advisers that manage in a
value style, the Fund invests in large cap income-producing
U.S. common stocks
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP Large Cap Value Fund invests primarily in common stocks of U.S.
companies with market capitalizations of more than $1 billion. The Fund uses a
multi-manager approach, relying on a number of Sub-Advisers with differing
investment philosophies to manage portions of the Fund's portfolio under the
general supervision of SIMC. Each Sub-Adviser, in managing its portion of the
Fund's assets, selects stocks it believes are undervalued in light of such
fundamental characteristics as earnings, book value or return on equity. The
Fund's portfolio is diversified as to issuers and industries.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's securities may
fluctuate drastically from day to day. Individual companies may report poor
results or be negatively affected by industry and/or economic trends and
developments. The prices of securities issued by such companies may suffer a
decline in response. These factors contribute to price volatility, which is the
principal risk of investing in the Fund.
The Fund is also subject to the risk that large capitalization value stocks may
underperform other segments of the equity market or the equity markets as a
whole.
<PAGE>
PROSPECTUS 3
SEI VP LARGE CAP VALUE FUND
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP Large Cap Value Fund had not commenced
operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Investment Advisory Fees 0.35%
Distribution (12b-1) Fees None
Other Expenses 0.82%*
-------
Total Annual Fund Operating Expenses 1.17%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP LARGE CAP VALUE FUND -- CLASS A SHARES 0.85%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP Large Cap Value Fund -- Class A Shares $119 $372
</TABLE>
<PAGE>
4 PROSPECTUS
SEI VP LARGE CAP GROWTH FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Capital appreciation
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY Medium to high
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing multiple specialist sub-advisers that manage in a
growth style, the Fund invests in large cap U.S. common
stocks
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP Large Cap Growth Fund invests primarily in common stocks of U.S.
companies with market capitalizations of more than $1 billion. The Fund uses a
multi-manager approach, relying on a number of Sub-Advisers with differing
investment philosophies to manage portions of the Fund's portfolio under the
general supervision of SIMC. Each Sub-Adviser, in managing its portion of the
Fund's assets, selects stocks it believes have significant growth potential in
light of such characteristics as revenue and earnings growth and positive
earnings surprises. The Fund's portfolio is diversified as to issuers and
industries.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's securities may
fluctuate drastically from day to day. Individual companies may report poor
results or be negatively affected by industry and/or economic trends and
developments. The prices of securities issued by such companies may suffer a
decline in response. These factors contribute to price volatility, which is the
principal risk of investing in the Fund.
The Fund is subject to the risk that large capitalization growth stocks may
underperform other segments of the equity market or the equity markets as a
whole.
<PAGE>
PROSPECTUS 5
SEI VP LARGE CAP GROWTH FUND
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP Large Cap Growth Fund had not commenced
operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Investment Advisory Fees 0.40%
Distribution (12b-1) Fees None
Other Expenses 0.82%*
-------
Total Annual Fund Operating Expenses 1.22%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP LARGE CAP GROWTH FUND -- CLASS A SHARES 0.85%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP Large Cap Growth Fund -- Class A Shares $124 $387
</TABLE>
<PAGE>
6 PROSPECTUS
SEI VP S&P 500 INDEX FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Investment results that correspond to the Standard & Poor's
500 Composite Index (S&P 500 Index)
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY Medium to high
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing a specialist sub-adviser, the Fund invests in the
common stocks and other equity securities included in the
S&P 500 Index.
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP S&P 500 Index Fund invests substantially all of its assets in
securities included in the S&P 500 Index, which is comprised of 500 selected
securities (mostly common stocks). The Fund's ability to replicate the
performance of the S&P 500 Index will depend to some extent on the size and
timing of cash flows into and out of the Fund, as well as on the level of the
Fund's expenses.
The Sub-Adviser selects securities under the general supervision of SIMC, but
the Sub-Adviser makes no attempt to "manage" the Fund in the traditional sense
(i.e., by using economic, market or financial analyses). Instead, the
Sub-Adviser purchases a basket of securities that includes most of the companies
in the Index. However, the Fund's Sub-Adviser may sell an investment if the
merit of the investment has been substantially impaired by extraordinary events
or adverse financial conditions.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's securities may
fluctuate drastically from day to day. Individual companies may report poor
results or be negatively affected by industry and/or economic trends and
developments. The prices of securities issued by such companies may suffer a
decline in response. These factors contribute to price volatility, which is the
principal risk of investing in the Fund.
The Fund is also subject to the risk that the performance of the Fund may not
correlate to that of the S&P 500 Index. In addition, the Fund is subject to the
risk that its investment approach, which attempts to replicate the performance
of the S&P 500 Index, may perform differently from other mutual funds which
focus on particular equity market segments or invest in other asset classes.
<PAGE>
PROSPECTUS 7
SEI VP S&P 500 INDEX FUND
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP S&P 500 Index Fund had not commenced
operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Investment Advisory Fees 0.03%
Distribution (12b-1) Fees None
Other Expenses 0.69%*
-------
Total Annual Fund Operating Expenses 0.72%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE MOST RECENT
FISCAL YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE
ADVISER AND ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEES IN
ORDER TO KEEP TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR
ADMINISTRATOR MAY DISCONTINUE ALL OR PART OF THESE WAIVERS AT ANY TIME. WITH
THESE FEE WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE AS FOLLOWS:
<TABLE>
<S> <C>
SEI VP S&P 500 INDEX FUND -- CLASS A SHARES 0.40%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund expenses remain the same, and you reinvest all
dividends and distributions. Although your actual costs and returns might be
different, your approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP S&P 500 Index Fund -- Class A Shares $74 $230
</TABLE>
<PAGE>
8 PROSPECTUS
SEI VP SMALL CAP VALUE FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Capital appreciation
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY High
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing multiple specialist sub-advisers that manage in a
value style, the Fund invests in common stocks of smaller
U.S. companies
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP Small Cap Value Fund invests primarily in common stocks of U.S.
companies with market capitalizations of less than $2 billion. The Fund uses a
multi-manager approach, relying upon a number of Sub-Advisers to manage portions
of the Fund's portfolio under the general supervision of SIMC. Each Sub-Adviser,
in managing its portion of the Fund's assets, selects stocks it believes are
undervalued in light of such fundamental characteristics as earnings, book value
or return on equity. The Fund's portfolio is diversified as to issuers and
industries.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's securities may
fluctuate drastically from day to day. Individual companies may report poor
results or be negatively affected by industry and/or economic trends and
developments. The prices of securities issued by such companies may suffer a
decline in response. These factors contribute to price volatility, which is the
principal risk of investing in the Fund.
The smaller capitalization companies the Fund invests in may be more vulnerable
to adverse business or economic events than larger, more established companies.
In particular, these small companies may have limited product lines, markets and
financial resources, and may depend upon a relatively small management group.
Therefore, small cap stocks may be more volatile than those of larger companies.
These securities may be traded over the counter or listed on an exchange.
The Fund is also subject to the risk that small capitalization value stocks may
underperform other segments of the equity market or the equity markets as a
whole.
<PAGE>
PROSPECTUS 9
SEI VP SMALL CAP VALUE FUND
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP Small Cap Value Fund had not commenced
operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Investment Advisory Fees 0.65%
Distribution (12b-1) Fees None
Other Expenses 0.82%*
-------
Total Annual Fund Operating Expenses 1.47%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP SMALL CAP VALUE FUND -- CLASS A SHARES 1.10%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP Small Cap Value Fund -- Class A Shares $150 $465
</TABLE>
<PAGE>
10 PROSPECTUS
SEI VP SMALL CAP GROWTH FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Long-term capital appreciation
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY High
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing multiple specialist sub-advisers that manage in a
growth style, the Fund invests in common stocks of smaller
U.S. companies
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP Small Cap Growth Fund invests primarily in common stocks of U.S.
companies with market capitalizations of less than $2 billion. The Fund uses a
multi-manager approach, relying upon a number of Sub-Advisers to manage portions
of the Fund's portfolio under the general supervision of SIMC. Each Sub-Adviser,
in managing its portion of the Fund's assets, selects stocks it believes have
significant growth potential in light of such characteristics as revenue and
earnings growth and positive earnings surprises. The Fund's portfolio is
diversified as to issuers and industries.
Due to its investment strategy, the Fund may buy and sell securities frequently.
This may result in higher transaction costs and additional capital gains tax
liabilities.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's securities may
fluctuate drastically from day to day. Individual companies may report poor
results or be negatively affected by industry and/or economic trends and
developments. The prices of securities issued by such companies may suffer a
decline in response. These factors contribute to price volatility, which is the
principal risk of investing in the Fund.
The smaller capitalization companies the Fund invests in may be more vulnerable
to adverse business or economic events than larger, more established companies.
In particular, these small companies may have limited product lines, markets and
financial resources, and may depend upon a relatively small management group.
Therefore, small cap stocks may be more volatile than those of larger companies.
These securities may be traded over the counter or listed on an exchange.
The Fund is also subject to the risk that small capitalization growth stocks may
underperform other segments of the equity market or the equity markets as a
whole.
<PAGE>
PROSPECTUS 11
SEI VP SMALL CAP GROWTH FUND
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP Small Cap Growth Fund had not commenced
operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Investment Advisory Fees 0.65%
Distribution (12b-1) Fees None
Other Expenses 0.82%*
-------
Total Annual Fund Operating Expenses 1.47%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP SMALL CAP GROWTH FUND -- CLASS A SHARES 1.10%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP Small Cap Growth Fund -- Class A Shares $150 $465
</TABLE>
<PAGE>
12 PROSPECTUS
SEI VP INTERNATIONAL EQUITY FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Capital appreciation
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY Medium to high
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing multiple specialist sub-advisers, the Fund invests
in equity securities of foreign companies
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP International Equity Fund invests primarily in common stocks and
other equity securities of foreign companies. The Fund primarily invests in
companies located in developed countries, but may also invest in companies
located in emerging markets. The Fund uses a multi-manager approach, relying
upon a number of Sub-Advisers to manage portions of the Fund's portfolio under
the general supervision of SIMC. The Fund is diversified as to issuers, market
capitalization, industry and country.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's securities may
fluctuate drastically from day to day. Individual companies may report poor
results or be negatively affected by industry and/or economic trends and
developments. The prices of securities issued by such companies may suffer a
decline in response. In the case of foreign stocks, these fluctuations will
reflect international economic and political events, as well as changes in
currency valuations relative to the U.S. dollar. These factors contribute to
price volatility, which is the principal risk of investing in the Fund.
Investing in issuers located in foreign countries poses distinct risks since
political and economic events unique to a country or region will affect those
markets and their issuers. These events will not necessarily affect the U.S.
economy or similar issuers located in the United States. In addition,
investments in foreign countries are generally denominated in a foreign
currency. As a result, changes in the value of those currencies compared to the
U.S. dollar may affect (positively or negatively) the value of a Fund's
investments. These currency movements may happen separately from and in response
to events that do not otherwise affect the value of the security in the issuer's
home country. These various risks will be even greater for investments in
emerging market countries since political turmoil and rapid changes in economic
conditions are more likely to occur in these countries.
The Fund is also subject to the risk that developed international equity
securities may underperform other segments of the equity market or the equity
markets as a whole.
<PAGE>
PROSPECTUS 13
SEI VP INTERNATIONAL EQUITY FUND
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP International Equity Fund had not commenced
operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Investment Advisory Fees 0.51%
Distribution (12b-1) Fees None
Other Expenses 1.06%*
-------
Total Annual Fund Operating Expenses 1.57%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP INTERNATIONAL EQUITY FUND -- CLASS A SHARES 1.28%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP International Equity Fund -- Class A
Shares $160 $496
</TABLE>
<PAGE>
14 PROSPECTUS
SEI VP EMERGING MARKETS EQUITY FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Capital appreciation
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY Very high
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing multiple specialist sub-advisers, the Fund invests
in equity securities of emerging markets companies
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP Emerging Markets Equity Fund invests primarily in common stocks and
other equity securities of foreign companies located in emerging market
countries. Emerging market countries are countries that the World Bank or the
United Nations considers to be emerging or developing. The Fund uses a
multi-manager approach, relying upon a number of Sub-Advisers to manage portions
of the Fund's portfolio under the general supervision of SIMC. The Fund's
portfolio is diversified as to issuers, market capitalization, industry and
country.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's securities may
fluctuate drastically from day to day. Individual companies may report poor
results or be negatively affected by industry and/or economic trends and
developments. The prices of securities issued by such companies may suffer a
decline in response. In the case of foreign stocks, these fluctuations will
reflect international economic and political events, as well as changes in
currency valuations relative to the U.S. dollar. These factors contribute to
price volatility, which is one principal risk of investing in the Fund.
Investing in issuers located in foreign countries poses distinct risks since
political and economic events unique to a country or region will affect those
markets and their issuers. These events will not necessarily affect the U.S.
economy or similar issuers located in the United States. In addition,
investments in foreign countries are generally denominated in a foreign
currency. As a result, changes in the value of those currencies compared to the
U.S. dollar may affect (positively or negatively) the value of a Fund's
investments. These currency movements may happen separately from and in response
to events that do not otherwise affect the value of the security in the issuer's
home country. These various risks will be even greater for investments in
emerging market countries.
Emerging market countries are countries that the World Bank or the United
Nations considers to be emerging or developing. Emerging markets may be more
likely to experience political turmoil or rapid changes in market or economic
conditions than more developed countries. In addition, the financial stability
of issuers (including governments) in emerging market countries may be more
precarious than in other countries. As a result, there will tend to be an
increased risk of price volatility associated with the Fund's investment in
emerging market countries, which may be magnified by currency fluctuation
relative to the U.S. dollar.
Emerging markets may be more likely to experience political turmoil or rapid
changes in market or economic conditions than more developed countries. In
addition, the financial stability of issuers (including governments) in emerging
market countries may be more precarious than in other countries. As a result,
there will tend to be an increased risk of price volatility associated with the
Fund's investments in emerging market countries, which may be magnified by
currency fluctuations relative to the U.S. dollar.
The Fund is also subject to the risk that emerging market equity securities may
underperform other segments of the equity market or the equity markets as a
whole.
<PAGE>
PROSPECTUS 15
SEI VP EMERGING MARKETS EQUITY FUND
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP Emerging Markets Equity Fund had not
commenced operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Investment Advisory Fees 1.05%
Distribution (12b-1) Fees None
Other Expenses 1.33%*
-------
Total Annual Fund Operating Expenses 2.38%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP EMERGING MARKETS EQUITY FUND -- CLASS A SHARES 1.95%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP Emerging Markets Equity Fund -- Class A Shares $241 $742
</TABLE>
<PAGE>
16 PROSPECTUS
SEI VP CORE FIXED INCOME FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Current income and preservation of capital
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY Medium
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing multiple specialist sub-advisers that have fixed
income investment expertise, the Fund invests in investment
grade U.S. fixed income securities
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP Core Fixed Income Fund invests primarily in investment grade U.S.
corporate and government fixed income securities, including mortgage-backed
securities. The Fund uses a multi-manager approach, relying upon a number of
Sub-Advisers to manage portions of the Fund's portfolio under the general
supervision of SIMC. Sub-Advisers are selected for their expertise in managing
various kinds of fixed income securities, and each Sub-Adviser makes investment
decisions based on an analysis of yield trends, credit ratings and other factors
in accordance with its particular discipline. While each Sub-Adviser chooses
securities of different types and maturities, the Fund in the aggregate
generally will have a dollar-weighted average duration that is consistent with
that of the broad U.S. fixed income market (currently 4.9 years).
Due to its investment strategy, the Fund may buy and sell securities frequently.
This may result in higher transaction costs and additional capital gains tax
liabilities.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
The prices of the Fund's fixed income securities respond to economic
developments, particularly interest rate changes, as well as to perceptions
about the creditworthiness of individual issuers, including governments.
Generally, the Fund's fixed income securities will decrease in value if interest
rates rise and vice versa, and the volatility of lower rated securities is even
greater than that of higher rated securities. Also, longer-term securities are
generally more volatile, so the average maturity or duration of these securities
affects risk.
Although the Fund's U.S. government securities are considered to be among the
safest investments, they are not guaranteed against price movements due to
changing interest rates. Obligations issued by some U.S. government agencies are
backed by the U.S. Treasury, while others are backed solely by the ability of
the agency to borrow from the U.S. Treasury or by the agency's own resources.
Mortgage-backed securities are fixed income securities representing an interest
in a pool of underlying mortgage loans. Mortgage-backed securities are sensitive
to changes in interest rates, but may respond to these changes differently from
other fixed income securities due to the possibility of prepayment of the
underlying mortgage loans. As a result, it may not be possible to determine in
advance the actual maturity date or average life of a mortgage-backed security.
Rising interest rates tend to discourage refinancings, with the result that the
average life and volatility of the security will increase, exacerbating its
decrease in market price. When interest rates fall, however, mortgage-backed
securities may not gain as much in market value because of the expectation of
additional mortgage prepayments, that must be reinvested at lower interest
rates. Prepayment risk may make it difficult to calculate the average maturity
of the Fund's mortgage-backed securities and, therefore, to assess the
volatility risk of the Fund.
The privately issued mortgage-backed securities that the Fund invests in are not
issued or guaranteed by the U.S. Government or its agencies or instrumentalities
and may bear a greater risk of nonpayment than securities that are backed by the
U.S. Treasury. However, the timely payment of principal and interest normally is
supported, at least partially, by various credit enhancements by banks and other
financial institutions. There can be no assurance, however, that such credit
enhancements will support full payment of the principal and interest on such
obligations. In addition, changes in the credit quality of the entity which
provides credit enhancement could cause losses to the Fund and affect its share
price.
The Fund is also subject to the risk that U.S. fixed income securities may
underperform other segments of the fixed income market or the fixed income
markets as a whole.
<PAGE>
PROSPECTUS 17
SEI VP CORE FIXED INCOME FUND
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP Core Fixed Income Fund had not commenced
operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Investment Advisory Fees 0.28%
Distribution (12b-1) Fees None
Other Expenses 0.75%*
-------
Total Annual Fund Operating Expenses 1.03%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP CORE FIXED INCOME FUND -- CLASS A SHARES 0.60%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP Core Fixed Income Fund -- Class A Shares $105 $328
</TABLE>
<PAGE>
18 PROSPECTUS
SEI VP BOND INDEX FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Investment results that correspond to the performance of the
Lehman Aggregate Bond Index (Lehman Index)
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY Medium
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing a specialist sub-adviser, the Fund invests in
investment grade fixed income securities included in the
Lehman Index.
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP Bond Index Fund invests substantially all of its assets in investment
grade (I.E., BBB/Baa or better at the time or purchase) corporate and government
fixed income securities, including mortgage-backed securities, of U.S. and
foreign issuers included in the Lehman Index. The Fund's ability to replicate
the performance of the Lehman Index will depend to some extent on the size and
timing of cash flows into and out of the Fund, as well as on the level of the
Fund's expenses. The Sub-Adviser makes no attempt to "manage" the Fund in the
traditional sense (I.E., by using economic, market or financial analyses).
Instead, the Sub-Adviser will hold a representative sample of the securities in
the Lehman Index, selecting a limited number of issues to represent entire
"classes" of securities, and dividing those classes into sectors based on
issuer, quality and maturity. The Sub-Adviser will purchase various types of
securities in an attempt to approximate the class and sector weightings of the
Lehman Index. The Fund's Sub-Adviser may sell a security that has been
downgraded or whose value has otherwise been impaired. The Fund in the aggregate
generally will have a dollar-weighted average duration that is consistent with
that of the Lehman Index (currently 4.9 years).
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
The prices of the Fund's fixed income securities respond to economic
developments, particularly interest rate changes, as well as to perceptions
about the creditworthiness of individual issuers, including governments.
Generally, the Fund's fixed income securities will decrease in value if interest
rates rise and vice versa, and the volatility of lower rated securities is even
greater than that of higher rated securities. Also, longer-term securities are
generally more volatile, so the average maturity or duration of these securities
affects risk.
Although the Fund's U.S. government securities are considered to be among the
safest investments, they are not guaranteed against price movements due to
changing interest rates. Obligations issued by some U.S. government agencies are
backed by the U.S. Treasury, while others are backed solely by the ability of
the agency to borrow from the U.S. Treasury or by the agency's own resources.
Mortgage-backed securities are fixed income securities representing an interest
in a pool of underlying mortgage loans. Mortgage-backed securities are sensitive
to changes in interest rates, but may respond to these changes differently from
other fixed income securities due to the possibility of prepayment of the
underlying mortgage loans. As a result, it may not be possible to determine in
advance the actual maturity date or average life of a mortgage-backed security.
Rising interest rates tend to discourage refinancings, with the result that the
average life and volatility of the security will increase, exacerbating its
decrease in market price. When interest rates fall, however, mortgage-backed
securities may not gain as much in market value because of the expectation of
additional mortgage prepayments that must be reinvested at lower interest rates.
Prepayment risk may make it difficult to calculate the average maturity of the
Fund's mortgage-backed securities and, therefore, to assess the volatility risk
of the Fund.
The privately issued mortgage-backed securities that the Fund invests in are not
issued or guaranteed by the U.S. Government or its agencies or instrumentalities
and may bear a greater risk of nonpayment than securities that are backed by the
U.S. Treasury. However, the timely payment of principal and interest normally is
supported, at least partially, by various credit enhancements by banks and other
financial institutions. There can be no assurance, however, that such credit
enhancements will support full payment of the principal and interest on such
obligations. In addition, changes in the credit quality of the entity which
provides credit enhancement could cause losses to the Fund and affect its share
price.
The Fund is also subject to the risk that the performance of the Fund may not
correlate to that of the Lehman Index. Since it purchases only a small sample of
the securities in the Lehman Index, the Fund's performance may not be similar to
that of the Lehman Index. In addition, the Fund is subject to the risk that its
investment approach, which attempts to replicate the performance of the Lehman
Index, may perform differently than other mutual funds which focus on particular
fixed income market segments or invest in other asset classes.
<PAGE>
PROSPECTUS 19
SEI VP BOND INDEX FUND
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP Bond Index Fund had not commenced
operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Investment Advisory Fees 0.07%
Distribution (12b-1) Fees None
Other Expenses 0.82%*
-------
Total Annual Fund Operating Expenses 0.89%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP BOND INDEX FUND -- CLASS A SHARES 0.38%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP Bond Index Fund -- Class A Shares $91 $284
</TABLE>
<PAGE>
20 PROSPECTUS
SEI VP HIGH YIELD BOND FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Total return
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY High
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing multiple specialist sub-advisers that have high
yield investment expertise, the Fund invests in high yield,
high risk securities
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP High Yield Bond Fund invests primarily in fixed income securities
rated below investment grade ("junk bonds"), including corporate bonds and
debentures, convertible and preferred securities, and zero coupon obligations.
The Fund uses a multi-manager approach, relying on a number of Sub-Advisers to
manage portions of the Fund's portfolio under the general supervision of SIMC.
In managing the Fund's assets, the Sub-Advisers select securities that offer a
high current yield as well as total return potential. The Fund's securities are
diversified as to issuers and industries. The Fund's average weighted maturity
may vary, and will generally not exceed ten years. There is no limit on the
maturity or on the credit quality of any security.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
The prices of the Fund's fixed income securities respond to economic
developments, particularly interest rate changes, as well as to perceptions
about the creditworthiness of individual issuers, including governments.
Generally, the Fund's fixed income securities will decrease in value if interest
rates rise and vice versa, and the volatility of lower rated securities is even
greater than that of higher rated securities. Also, longer-term securities are
generally more volatile, so the average maturity or duration of these securities
affects risk.
Junk bonds involve greater risks of default or downgrade and are more volatile
than investment grade securities. Junk bonds involve a greater risk of price
declines than investment grade securities due to actual or perceived changes in
an issuer's creditworthiness. In addition, issuers of junk bonds may be more
susceptible than other issuers to economic downturns. Junk bonds are subject to
the risk that the issuer may not be able to pay interest or dividends and
ultimately to repay principal upon maturity. Discontinuation of these payments
could substantially adversely affect the market value of the security.
The Fund is also subject to the risk that high yield securities may underperform
other segments of the fixed income market or the fixed income markets as a
whole.
<PAGE>
PROSPECTUS 21
SEI VP HIGH YIELD BOND FUND
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP High Yield Bond Fund had not commenced
operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Investment Advisory Fees 0.49%
Distribution (12b-1) Fees None
Other Expenses 0.82%*
-------
Total Annual Fund Operating Expenses 1.31%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP HIGH YIELD BOND FUND -- CLASS A SHARES 0.85%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP High Yield Bond Fund -- Class A Shares $133 $415
</TABLE>
<PAGE>
22 PROSPECTUS
SEI VP INTERNATIONAL FIXED INCOME FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Capital appreciation and current income
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY High
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing a specialist sub-adviser, the Fund invests in
investment grade fixed income securities of foreign
government and corporate issuers
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP International Fixed Income Fund invests primarily in foreign
government, corporate, and mortgage-backed securities. In selecting investments
for the Fund, the Sub-Adviser chooses investment grade securities issued by
corporations and governments located in various developed foreign countries,
looking for opportunities for capital appreciation and gain, as well as current
income. The Fund's portfolio is not hedged against currency fluctuations
relative to the U.S. dollar. There are no restrictions on the Fund's average
portfolio maturity or on the maturity of any specific security.
Due to its investment strategy, the Fund may buy and sell securities frequently.
This may result in higher transaction costs and additional capital gains tax
liabilities.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
The prices of the Fund's fixed income securities respond to economic
developments, particularly interest rate changes, as well as to perceptions
about the creditworthiness of individual issuers, including governments.
Generally, the Fund's fixed income securities will decrease in value if interest
rates rise and vice versa, and the volatility of lower rated securities is even
greater than that of higher rated securities. Also, longer-term securities are
generally more volatile, so the average maturity or duration of these securities
affects risk. In the case of foreign securities, price fluctuations will reflect
international economic and political events, as well as changes in currency
valuations relative to the U.S. dollar.
Investing in issuers located in foreign countries poses distinct risks since
political and economic events unique to a country or region will affect those
markets and their issuers. These events will not necessarily affect the U.S.
economy or similar issuers located in the United States. In addition,
investments in foreign countries are generally denominated in a foreign
currency. As a result, changes in the value of those currencies compared to the
U.S. dollar may affect (positively or negatively) the value of a Fund's
investments. These currency movements may happen separately from and in response
to events that do not otherwise affect the value of the security in the issuer's
home country. These various risks will be even greater for investments in
emerging market countries since political turmoil and rapid changes in economic
conditions are more likely to occur in these countries.
The Fund is non-diversified, which means that it may invest in the securities of
relatively few issuers. As a result, the Fund may be more susceptible to a
single adverse economic or political occurrence affecting one or more of these
issuers, and may experience increased volatility due to its investments in those
securities.
The Fund is also subject to the risk that developed international fixed income
securities, may underperform other segments of the fixed income market or the
fixed income markets as a whole.
<PAGE>
PROSPECTUS 23
SEI VP INTERNATIONAL FIXED INCOME FUND
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP International Fixed Income Fund had not
commenced operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Investment Advisory Fees 0.30%
Distribution (12b-1) Fees None
Other Expenses 1.41%*
-------
Total Annual Fund Operating Expenses 1.71%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP INTERNATIONAL FIXED INCOME FUND -- CLASS A SHARES 1.00%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP International Fixed Income Fund -- Class A
Shares $174 $539
</TABLE>
<PAGE>
24 PROSPECTUS
SEI VP EMERGING MARKETS DEBT FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Total return
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY High to very high
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing a specialist sub-adviser, the Fund invests U.S.
dollar denominated debt in securities of emerging market
issuers
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP Emerging Markets Debt Fund invests primarily in U.S. dollar
denominated debt securities of government, government-related and corporate
issuers in emerging markets countries, as well as entities organized to
restructure the outstanding debt of such issuers. Emerging market countries are
countries that the World Bank or the United Nations considers to be emerging or
developing. Emerging markets may be more likely to experience political turmoil
or rapid changes in market or economic conditions than more developed countries.
In addition, the financial stability of issuers (including governments) in
emerging market countries may be more precarious than in other countries. As a
result, there will tend to be an increased risk of price volatility associated
with the Fund's investments in emerging market countries, which may be magnified
by currency fluctuations relative to the U.S. dollar.
The Sub-Adviser will spread the Fund's holdings across a number of countries and
industries to limit its exposure to a single emerging market economy. There are
no restrictions on the Fund's average portfolio maturity, or on the maturity of
any specific security. There is no minimum rating standard for the Fund's
securities, and the Fund's securities will generally be in the lower or lowest
rating categories.
Due to its investment strategy, the Fund may buy and sell securities frequently.
This may result in higher transaction costs and additional capital gains tax
liabilities.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
The prices of the Fund's fixed income securities respond to economic
developments, particularly interest rate changes, as well as to perceptions
about the creditworthiness of individual issuers, including governments.
Generally, the Fund's fixed income securities will decrease in value if interest
rates rise and vice versa, and the volatility of lower rated securities is even
greater than that of higher rated securities. Also, longer-term securities are
generally more volatile, so the average maturity or duration of these securities
affects risk.
Investing in issuers located in foreign countries poses distinct risks since
political and economic events unique to a country or region will affect those
markets and their issuers. These events will not necessarily affect the U.S.
economy or similar issuers located in the United States. In addition,
investments in foreign countries may be denominated in a foreign currency. As a
result, changes in the value of those currencies compared to the U.S. dollar may
affect (positively or negatively) the value of a Fund's investments. These
currency movements may happen separately from and in response to events that do
not otherwise affect the value of the security in the issuer's home country.
These various risks will be even greater for investments in emerging market
countries since political turmoil and rapid changes in economic conditions are
more likely to occur in these countries.
"Junk" bonds involve greater risks of default or downgrade, and involve greater
risk of price declines than investment grade securities due to actual or
perceived changes in an issuer's creditworthiness. In addition, issuers of junk
bonds may be more susceptible than other issuers to economic downturns. Junk
bonds are subject to the risk that the issuer may not be able to pay interest or
dividends and ultimately to repay principal upon maturity. Discontinuation of
these payments could substantially adversely affect the market value of the
security. The volatility of junk bonds and certain foreign sovereign debt
securities is even greater since the prospects for repayment of principal and
interest of many of these securities is speculative. Some may even be in
default. As an incentive to invest in these risky securities, they tend to offer
higher returns.
Emerging market countries are countries that the World Bank or the United
Nations considers to be emerging or developing. Emerging markets may be more
likely to experience political turmoil or rapid changes in market or economic
conditions than
<PAGE>
PROSPECTUS 25
SEI VP EMERGING MARKETS DEBT FUND
more developed countries. In addition, the financial stability of issuers
(including governments) in emerging market countries may be more precarious than
in other countries. As a result, there will tend to be an increased risk of
price volatility associated with the Fund's investment in emerging market
countries.
The foreign sovereign debt securities and "Brady Bonds" the Fund purchases
involve specific risks, including the risk that: (i) the governmental entity
that controls the repayment of sovereign debt may not be willing or able to
repay the principal and/or interest when it becomes due, due to factors such as
debt service burden, political constraints, cash flow problems and other
national economic factors; (ii) governments may default on their sovereign debt,
which may require holders of such sovereign debt to participate in debt
rescheduling or additional lending to defaulting governments; and (iii) there
may be no bankruptcy proceeding by which defaulted sovereign debt may be
collected in whole or in part.
The Fund is non-diversified, which means that it may invest in the securities of
relatively few issuers. As a result, the Fund may be more susceptible to a
single adverse economic or political occurrence affecting one or more of these
issuers, and may experience increased volatility due to its investments in those
securities.
The Fund is also subject to the risk that emerging markets debt securities may
underperform other segments of the fixed income market or the fixed income
markets as a whole.
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP Emerging Markets Debt Fund had not commenced
operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Investment Advisory Fees 0.85%
Distribution (12b-1) Fees None
Other Expenses 1.44%*
-------
Total Annual Fund Operating Expenses 2.29%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP EMERGING MARKETS DEBT FUND -- CLASS A SHARES 1.35%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP Emerging Markets Debt Fund -- Class A Shares $232 $715
</TABLE>
<PAGE>
26 PROSPECTUS
SEI VP PRIME OBLIGATION FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Preserving principal and maintaining liquidity while
providing current income
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY Very low
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY The Fund is professionally managed to provide liquidity,
diversification and a competitive yield by investing in high
quality, short-term money market instruments
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP Prime Obligation Fund is comprised of short-term debt obligations of
U.S. issuers that are rated in one of the two highest rating categories by
nationally recognized statistical rating organizations or securities that the
Sub-Adviser determines are of comparable quality. The Fund invests in: (i)
commercial paper and other short-term corporate obligations (including
asset-backed securities) rated in the highest rating category; (ii) certificates
of deposit, time deposits, bankers' acceptances, bank notes and other
obligations of U.S. commercial banks or savings and loan institutions that meet
certain asset requirements; (iii) short-term obligations issued by state and
local governments; and (iv) U.S. Treasury obligations and obligations issued or
guaranteed as to principal and interest by agencies or instrumentalities of the
U.S. government. The Fund may also enter into fully-collateralized repurchase
agreements.
Using a top-down strategy and bottom-up security selection, the Sub-Adviser
seeks securities with an acceptable maturity, that are marketable and liquid,
offer competitive yields, and are issued by issuers that are on a sound
financial footing. The Sub-Adviser also considers factors such as the
anticipated level of interest rates and the maturity of individual securities
relative to the maturity of the Fund as a whole. The Fund follows strict
Investment Company Act rules about the credit quality, maturity and
diversification of its investments.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
An investment in the Fund is subject to income risk, which is the possibility
that the Fund's yield will decline due to falling interest rates.
Although the Fund's U.S. government securities are considered to be among the
safest investments, they are not guaranteed against price movements due to
changing interest rates. Obligations issued by some U.S. government agencies are
backed by the U.S. Treasury, while others are backed solely by the ability of
the agency to borrow from the U.S. Treasury or by the agency's own resources.
AN INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT. ALTHOUGH THE FUND SEEKS TO
MAINTAIN A CONSTANT PRICE PER SHARE OF $1.00, YOU MAY LOSE MONEY BY INVESTING IN
THE FUND.
<PAGE>
PROSPECTUS 27
SEI VP PRIME OBLIGATION FUND
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP Prime Obligation Fund had not commenced
operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS) CLASS A SHARES
<S> <C>
Investment Advisory Fees 0.08%
Distribution (12b-1) Fees None
Other Expenses 0.86%*
-------
Total Annual Fund Operating Expenses 0.94%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP PRIME OBLIGATION FUND -- CLASS A SHARES 0.44%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP Prime Obligation Fund -- Class A Shares $96 $300
</TABLE>
<PAGE>
28 PROSPECTUS
MORE INFORMATION ABOUT FUND INVESTMENTS
This prospectus describes the Funds' primary strategies, and the Funds will
normally invest at least 65% of their assets in the types of securities
described in this prospectus. However, each Fund also may invest in other
securities, use other strategies and engage in other investment practices. These
investments and strategies, as well as those described in this prospectus, are
described in detail in the Funds' Statement of Additional Information ("SAI").
The investments and strategies described throughout this prospectus are those
that the Sub-Advisers use under normal conditions. During unusual economic or
market conditions or for temporary defensive or liquidity purposes, each Fund
may invest up to 100% of its assets in cash, money market instruments,
repurchase agreements and short-term obligations that would not ordinarily be
consistent with the Funds' objectives. A Fund will do so only if the Adviser or
Sub-Advisers believe that the risk of loss outweighs the opportunity for capital
gains and higher income. Of course, there is no guarantee that any Fund will
achieve its investment goal.
INVESTMENT ADVISER AND SUB-ADVISERS
SEI INVESTMENTS MANAGEMENT CORPORATION ("SIMC") ACTS AS THE MANAGER OF MANAGERS
OF THE FUNDS, AND IS RESPONSIBLE FOR THE INVESTMENT PERFORMANCE OF THE FUNDS
SINCE IT ALLOCATES EACH FUND'S ASSETS TO ONE OR MORE SUB-ADVISERS AND RECOMMENDS
HIRING OR CHANGING SUB-ADVISERS TO THE BOARD OF TRUSTEES.
Each Sub-Adviser makes investment decisions for the assets it manages and
continuously reviews, supervises and administers its investment program. SIMC
oversees the Sub-Advisers to ensure compliance with the Funds' investment
policies and guidelines, and monitors each Sub-Adviser's adherence to its
investment style. The Board of Trustees supervises SIMC and the Sub-Advisers;
establishes policies that they must follow in their management activities; and
oversees the hiring and termination of Sub-Advisers recommended by SIMC. SIMC
pays the Sub-Advisers out of the investment advisory fees it receives.
SIMC, an SEC-registered adviser, serves as the Adviser to the Funds. As of
December 31, 1999, SIMC had approximately $61.8 billion in assets under
management. SIMC is entitled to investment advisory fees as follows:
<TABLE>
<S> <C>
SEI VP Large Cap Value Fund 0.35%
SEI VP Large Cap Growth Fund 0.40%
SEI VP S&P 500 Index Fund 0.03%
SEI VP Small Cap Value Fund 0.65%
SEI VP Small Cap Growth Fund 0.65%
SEI VP International Equity Fund 0.51%
SEI VP Emerging Markets Equity Fund 1.05%
SEI VP Core Fixed Income Fund 0.28%
SEI VP Bond Index Fund 0.07%
SEI VP High Yield Bond Fund 0.49%
SEI VP International Fixed Income Fund 0.30%
SEI VP Emerging Markets Debt Fund 0.85%
SEI VP Prime Obligation Fund 0.08%
</TABLE>
<PAGE>
PROSPECTUS 29
INVESTMENT ADVISER, SUB-ADVISERS AND PORTFOLIO MANAGERS
SUB-ADVISERS AND PORTFOLIO MANAGERS
SEI VP LARGE CAP VALUE FUND:
LSV Asset Management, L.P.: Josef Lakonishok, Andrei Shleifer and Robert Vishny
of LSV Asset Management, L.P. ("LSV"), serve as portfolio managers of a portion
of the assets of the SEI VP Large Cap Value Fund. Mr. Lakonishok, Mr. Shleifer
and Mr. Vishny are officers and partners of LSV. An affiliate of SIMC owns an
interest in LSV. SIMC pays LSV a fee, which is calculated and paid monthly,
based on an annual rate of .20% of the average monthly market value of the
assets of the Fund managed by LSV.
Mellon Equity Associates, LLP: William P. Rydell and Robert A. Wilk of Mellon
Equity Associates, LLP ("Mellon Equity"), serve as portfolio managers of a
portion of the assets of the SEI VP Large Cap Value Fund. Mr. Rydell is the
President and Chief Executive Officer of Mellon Equity, and has been managing
individual and collective portfolios at Mellon Equity since 1982. Mr. Wilk is a
Senior Vice President and Portfolio Manager of Mellon Equity, and has been
involved with securities analysis, quantitative research, asset allocation,
trading, and client services at Mellon Equity since April 1990.
Sanford C. Bernstein & Co., Inc.: Lewis A. Sanders and Marilyn Goldstein Fedak
of Sanford C. Bernstein & Co., Inc. ("Bernstein"), serve as portfolio managers
of a portion of the assets of the SEI VP Large Cap Value Fund. Mr. Sanders has
been employed by Bernstein since 1969, and is currently Chairman of the Board,
Chief Executive Officer, and a Director of Bernstein. Ms. Fedak, Chief
Investment Officer -- Large Capitalization Domestic Equities and a Director of
Bernstein, has been employed by Bernstein since 1984.
SEI VP LARGE CAP GROWTH FUND:
Alliance Capital Management L.P.: A committee of investment professionals at
Alliance Capital Management L.P. manages a portion of the assets of the SEI VP
Large Cap Growth Fund.
Provident Investment Counsel, Inc.: George E. Handtmann III and Jeffrey J.
Miller of Provident Investment Counsel, Inc. ("Provident"), serve as portfolio
managers of a portion of the assets of the SEI VP Large Cap Growth Fund. Mr.
Handtmann has been with Provident since 1982, and Mr. Miller has been with
Provident since 1972.
TCW Investment Management Company: Glen E. Bickerstaff of TCW Investment
Management Company ("TCW") serves as portfolio manager of a portion of the
assets of the SEI VP Large Cap Growth Fund. Mr. Bickerstaff is a Managing
Director of TCW, and has over 18 years of investment experience dedicated to
investing large cap growth securities. Mr. Bickerstaff joined TCW in May, 1998
after 10 years at Transamerica Investment Services, where he served as Vice
President and Senior Portfolio Manager.
SEI VP S&P 500 INDEX FUND:
World Asset Management, L.P.: A committee of investment professionals at World
Asset Management, L.P., selects securities for the SEI VP S&P 500 Index Fund
based upon a computer model.
SEI VP SMALL CAP VALUE FUND:
Artisan Partners Limited Partnership: Scott Satterwhite of Artisan Partners
Limited Partnership ("Artisan") serves as portfolio manager of a portion of the
assets of the SEI VP Small Cap Value Fund. Mr. Satterwhite, a managing director
of Artisan, has been with Artisan since 1996. Prior to joining Artisan, Mr.
Satterwhite was a portfolio manager at Wachovia Bank, N.A.
<PAGE>
30 PROSPECTUS
INVESTMENT ADVISER, SUB-ADVISERS AND PORTFOLIO MANAGERS
LSV Asset Management, L.P.: Josef Lakonishok, Andrei Shleifer, and Robert Vishny
of LSV Asset Management, L.P. ("LSV"), serve as portfolio managers of a portion
of the assets of the SEI VP Small Cap Value Fund. Mr. Lakonishok, Mr. Shleifer
and Mr. Vishny are officers and partners of LSV. An affiliate of SIMC owns an
interest in LSV. SIMC pays LSV a fee, which is calculated and paid monthly,
based on an annual rate of 0.50% of the average monthly market value of the
assets of the Fund managed by LSV.
Mellon Equity Associates, LLP: William P. Rydell and Robert A. Wilk of Mellon
Equity Associates, LLP ("Mellon Equity"), serve as portfolio managers of a
portion of the assets of the SEI VP Small Cap Value Fund. Mr. Rydell is the
President and Chief Executive Officer of Mellon Equity, and has been managing
individual and collective portfolios at Mellon Equity since 1982. Mr. Wilk is a
Senior Vice President and Portfolio Manager of Mellon Equity, and has been
involved with securities analysis, quantitative research, asset allocation,
trading, and client services at Mellon Equity since April 1990.
Security Capital Global Capital Management Incorporated: Anthony R. Manno Jr.,
Kenneth D. Statz, and Kevin W. Bedell comprise the Portfolio Management
Committee of Security Capital Global Capital Management Incorporated ("Security
Capital"). The Portfolio Management Committee is responsible for determining the
portfolio composition for the Fund's assets allocated to Security Capital. The
members of the Portfolio Management Committee have an average of 18 years of
investment experience.
SEI VP SMALL CAP GROWTH FUND:
Mazama Capital Management, LLC: Ron Sauer and Stephen Brink, CFA, of Mazama
Capital Management, LLC ("Mazama") serve as the portfolio managers to a portion
of the assets of the SEI V.P. Small Cap Growth Fund. Prior to founding Mazama,
Mr. Sauer served as President and Director of Research at Black & Company and
Mr. Brink served as Chief Investment Officer for the Pacific Northwest office of
U.S. Trust. Mr. Sauer and Mr. Brink have over 19 and 22 years of investment
experience, respectively.
Nicholas-Applegate Capital Management ("Nicholas-Applegate") serves as
Sub-Advisor of a portion of the assets of the SEI VP Small Cap Growth Fund under
the general supervision of Arthur E. Nicholas, founder and Chief Investment
Officer of the firm, and Catherine Somehegyi, Chief Investment Officer of the
firm's gloabl equities and trading since 1987. Nicholas-Applegate uses a team
approach for the day-to-day management of the Fund's assets. John Kane is the
lead portfolio manager of Nicholas-Applegate's U.S. Systematic team. Mr. Kane
has been a fund manager and investment team leader since June 1994. Prior to
joining Nicholas-Applegate, he had 25 years of investment/economics experience
with ARCO Investment Management Company and General Electric Company.
RS Investment Management, L.P.: Jim Callinan of Robertson, Stephens Investment
Management, L.P. ("RSIM"), serves as portfolio manager of a portion of the
assets of the SEI VP Small Cap Growth Fund. Mr. Callinan is a managing director
of RSIM. He joined RSIM in June 1996 after nine years at Putnam Investments
("Putnam") in Boston, where he served as a portfolio manager of the Putnam OTC
Emerging Growth Fund. Mr. Callinan also served as a specialty growth research
analyst and portfolio manager of both the Putnam Emerging Information Science
Trust Fund and the Putnam Emerging Health Sciences Trust Fund while at Putnam.
Sawgrass Asset Management, LLC: Dean McQuiddy of Sawgrass Asset Management, LLC
("Sawgrass"), serves as portfolio manager of a portion of the assets of the SEI
VP Small Cap Growth Fund. Mr. McQuiddy, a founding Principal of Sawgrass, has 12
years of investment experience. Prior to joining Sawgrass, he was a portfolio
manager at Barnett Capital Advisors.
Wall Street Associates: William Jeffery III and Kenneth F. McCain of Wall Street
Associates ("WSA") serve as portfolio managers of a portion of the assets of the
SEI VP Small Cap Growth Fund. Each is a controlling principal of WSA. They each
have over 27 years of investment management experience. David Baratta, who
joined WSA in 1999, also serves as a portfolio
<PAGE>
PROSPECTUS 31
INVESTMENT ADVISER, SUB-ADVISERS AND PORTFOLIO MANAGERS
manager of a portion of the assets of the SEI VP Small Cap Growth Fund. Prior to
joining WSA, Mr. Baratta was a portfolio manager of Morgan Grenfell, Inc. for 5
years. He has over 19 years of investment experience.
SEI VP INTERNATIONAL EQUITY FUND:
Acadian Asset Management, Inc.: A committee of investment professionals at
Acadian Asset Management, Inc. manages a portion of the assets of the SEI VP
International Equity Fund.
BlackRock International, Ltd.: Albert B. Morillo heads an investment committee
at BlackRock International, Ltd. ("BlackRock"), that serves as portfolio manager
of a portion of the assets of the SEI VP International Equity Fund. Prior to
joining BlackRock in January 2000, Mr. Morillo was the head of the European Team
of Scottish Widows Investment Management since 1991.
Capital Guardian Trust Company: A group of investment professionals at Capital
Guardian Trust Company each individually manage a portion of the assets of the
SEI VP International Equity Fund.
Oechsle International Advisors, LLC: S. Dewey Keesler, Jr. and Kathleen Harris
of Oechsle International Advisors, LLC ("Oechsle"), serve as Portfolio Managers
of a portion of the assets of the SEI VP International Equity Fund. Mr. Keesler
is a Principal and Chief Investment Officer at Oechsle. Prior to joining
Oechsle, Mr. Keesler was a Portfolio Manager at Putman International Advisors.
Ms. Harris is a Principal at Oechsle. Prior to joining Oechsle, she was a
Portfolio Manager and Investment Director for the State of Wisconsin Investment
Board.
SG Yamaichi Asset Management Company, Ltd., SG Pacific Asset Management, Inc.,
and SGY Asset Management (Singapore) Ltd.: Marco Wong and Hiroyoshi Nakagawa of
SG Yamaichi Asset Management Co., Ltd. ("SG Yamaichi"), SG Pacific Asset
Management, Inc. ("SG Pacific"), and SGY Asset Management (Singapore) Ltd.
("SGY"), serve as portfolio managers of a portion of the assets of the SEI VP
International Equity Fund. Mr. Wong leads the management team for the assets of
the Fund allocated to SG Pacific, SGY and SG Yamaichi. Mr. Wong has been with SG
Yamaichi since 1986. Mr. Nakagawa oversees the Japan investment team in Tokyo,
and also serves as portfolio manager for the International Equity Fund. Mr.
Nakagawa joined SG Yamaichi in 1977.
SEI VP EMERGING MARKETS EQUITY FUND:
Coronation Asset Management (Proprietary) Limited: Anthony Gibson and Louis
Stassen of Coronation Asset Management (Proprietary) Limited ("Coronation")
serve as portfolio managers of a portion of the assets of the SEI VP Emerging
Markets Equity Fund. Prior to joining Coronation in 1993, Mr. Gibson, the head
of Coronation's Investment Committee, and Mr. Stassen, the head of Coronation's
research department, worked at Syfrets Managed Assets for seven years and one
year, respectively. Prior to joining Syfrets Managed Assets, Mr. Stassen worked
as an Investment Analyst for Allan Gray Investment Counsel. Prior to joining
Coronation, Mr. Aylett worked at Syfrets Managed Assets as Fund Manager and Head
of Research.
Credit Suisse Asset Management Limited: Glenn Wellman and Isabel Knight of
Credit Suisse Asset Management Limited ("Credit Suisse") serve as portfolio
managers of a portion of the assets of the SEI VP Emerging Markets Equity Fund.
Mr. Wellman is a Managing Director of Credit Suisse. Prior to joining Credit
Suisse in 1993, he was a Director and Senior Vice President at Alliance Capital
Limited. Ms. Knight is a Director of Credit Suisse. Prior to joining Credit
Suisse in 1997, she was Senior Fund Manager at Foreign and Colonial from 1995 to
1997. From 1992 to 1995, Ms. Knight was a Portfolio Manager for Morgan Stanley
Asset Management.
Morgan Stanley Dean Witter Investment Management Inc.: Robert L. Meyer, Michael
Perl and Andy Skov of Morgan Stanley Dean Witter Investment Management Inc.
("MSDW Investment Management") serve as portfolio managers of a portion of the
assets of the SEI VP Emerging Markets Equity Fund. Mr. Meyer is a Managing
Director and joined MSDW Investment Management in 1989 after working for the law
firm of Irell & Manella. Mr. Perl is a Vice President and joined MSDW
<PAGE>
32 PROSPECTUS
INVESTMENT ADVISER, SUB-ADVISERS AND PORTFOLIO MANAGERS
Investment Management after 6 years at Bankers Trust Australia, where he served
as a Portfolio Manager. Mr. Skov is a Principal and joined MSDW Investment
Management after 4 years as an Associate at Bankers Trust.
Nicholas-Applegate Capital Management ("Nicholas-Applegate") serves as
Sub-Advisor of a portion of the assets of the SEI VP Emerging Markets Equity
Fund under the general supervision of Arthur E. Nicholas, founder and Chief
Investment Officer of the firm, and Catherine Somehegyi, Chief Investment
Officer of the firm's gloabl equities and trading since 1987. Nicholas-
Applegate uses a team approach for the day-to-day management of the Fund's
assets. Pedro Marcal and Ernesto Ramos are the Emerging Countries investment
team leaders. Mr. Marcal joined the firm in 1994. Prior to joining
Nicholas-Applegate, he was an economist with A.B. Laffer, V.A. Canto &
Associates. Mr. Ramos joined the firm in 1994. Prior to joining Nicholas-
Applegate, he specialized in investment and quantitative research with
Batterymarch Financial Management; Bolt Beranck & Newman Inc. and Harvard
University.
Schroder Investment Management North America Inc.: Schroder Investment
Management North America Inc. ("Schroders"), acts as a Sub-Adviser for a portion
of the assets of the SEI VP Emerging Markets Equity Fund. A team of investment
professionals at Schroders manages a portion of the assets of the SEI VP
Emerging Markets Equity Fund. Giles Neville heads the Emerging Markets Committee
at Schroders. Mr. Neville has over 12 years of investment experience.
SG Pacific Asset Management, Inc. and SGY Asset Management (Singapore) Ltd.:
Marco Wong of SG Pacific Asset Management, Inc. ("SG Pacific") and SGY Asset
Management (Singapore) Ltd. ("SGY"), serves as portfolio manager of a portion of
the assets of the SEI VP Emerging Markets Equity Fund. Mr. Wong leads the
management team for the assets of the Fund allocated to SG Pacific and SGY.
Mr. Wong has been with SG Yamaichi Asset Management Co., Ltd., the parent of SGY
and SG Pacific, since 1986.
SEI VP CORE FIXED INCOME FUND:
BlackRock Financial Management, Inc.: Keith Anderson and Andrew Phillips of
BlackRock Financial Management, Inc. ("BlackRock"), serve as portfolio managers
of a portion of the assets of the SEI VP Core Fixed Income Fund. Mr. Anderson is
a Managing Director and Co-Head of Portfolio Management at BlackRock, and has 14
years' experience investing in fixed income securities. Mr. Phillips is a
Principal and portfolio manager with primary responsibility for the management
of the firm's investment activities in fixed-rate mortgage securities.
Robert W. Baird & Co., Incorporated: Charles B. Groeschell of Robert W. Baird &
Co., Incorporated ("Baird"), serves as a portfolio manager of the portion of the
assets of the SEI VP Core Fixed Income Fund managed by Baird. Prior to joining
Baird in March 2000, Mr. Groeschell was a Senior Vice President and portfolio
manager for Firstar Investment Management & Resource Company, LLC.
Mr. Groeschell has over 17 years of investment experience.
Western Asset Management Company: A committee of investment professionals at
Western Asset Management Company manages a portion of the assets of the SEI VP
Core Fixed Income Fund.
SEI VP BOND INDEX FUND:
Mellon Bond Associates, LLP: Mellon Bond Associates, LLP ("MBA") serves as the
Adviser to the Bond Index Fund. A committee of investment professionals at
Mellon Bond Associates, LLP selects securities for the SEI VP Bond Index Fund
based upon a computer model.
SEI VP HIGH YIELD BOND FUND:
Credit Suisse Asset Management, LLC: Richard J. Lindquist, C.F.A., of Credit
Suisse Asset Management, LLC ("CSAM") serves as portfolio manager of the SEI VP
High Yield Bond Fund. Mr. Lindquist joined CSAM in 1995 as a result of CSAM's
acquisition of CS First Boston Investment Management, and has had 15 years of
investment management experience, all of
<PAGE>
PROSPECTUS 33
INVESTMENT ADVISER, SUB-ADVISERS AND PORTFOLIO MANAGERS
which were with high yield bonds. Prior to joining CS First Boston,
Mr. Lindquist was with Prudential Insurance Company of America where he managed
high yield funds totaling approximately $1.3 billion.
Nomura Corporate Research and Asset Management Inc.: Robert Levine, CFA,
President and Chief Executive Officer of Nomura Corporate Research and Asset
Management Inc. ("Nomura") and Richard A. Buch, Managing Director and Senior
Portfolio Manager of Nomura, are responsible for the management of Nomura's high
yield bond portfolios and research analysis. Prior to joining Nomura,
Mr. Levine was President of Kidder, Peabody High Yield Asset Management, Inc.
and Managing Director of Kidder, Peabody & Co., where he created their first
high yield bond mutual fund. Prior to joining Nomura, Mr. Buch was with Kidder,
Peabody & Co. where he served as Senior Vice President of the Kidder, Peabody
Asset Management, Inc. Mr. Levine and Mr. Buch each have over 20 years of
investment experience.
SEI VP INTERNATIONAL FIXED INCOME FUND:
Strategic Fixed Income, L.L.C.: Kenneth Windheim, Gregory Barnett and David
Jallits of Strategic Fixed Income, L.L.C. ("Strategic"), serve as portfolio
managers of the SEI VP International Fixed Income Fund. Mr. Windheim is the
President of Strategic. Prior to joining Strategic, Mr. Windheim was the Chief
Investment Officer and Managing Director of the group which managed global fixed
income portfolios at Prudential Asset Management. Prior to joining Strategic,
Mr. Barnett was portfolio manager for the Pilgrim Multi-Market Income Fund.
Prior to that, he was vice president and senior fixed income portfolio manager
at Lexington Management. Prior to joining Strategic, Mr. Jallits was Senior
Portfolio Manager for a hedge fund at Teton Partners.
SEI VP EMERGING MARKETS DEBT FUND:
Salomon Brothers Asset Management Inc: Peter J. Wilby leads the team of
professionals from Salomon Brothers Asset Management Inc ("SBAM") that manages a
portion of the assets of the SEI VP Emerging Markets Debt Fund. Mr. Wilby, a
Managing Director of SBAM, joined SBAM in 1989.
SEI VP PRIME OBLIGATION FUND:
Wellington Management Company, LLP: Timothy E. Smith is the Portfolio Manager of
the SEI VP Prime Obligation Fund. Mr. Smith is a Vice President of Wellington
Management Company, LLP which he joined in 1992.
<PAGE>
34 PROSPECTUS
INVESTMENT ADVISER, SUB-ADVISERS AND PORTFOLIO MANAGERS
PRIOR PERFORMANCE INFORMATION
SIMC acts as manager of managers of a number of portfolios of SEI Institutional
Managed Trust ("SIMT") and SEI Institutional International Trust ("SIIT") which
served as the models for the Funds. The portfolios of SIMT and SIIT have
substantially the same investment objectives, policies and strategies as the
Funds. In addition, the Funds and the corresponding portfolios of SIMT and SIIT
will continue to have substantially similar investment strategies, techniques
and characteristics. In the future, the Funds may be managed by a group of
sub-advisers that is different than the group that managed the portfolios of
SIMT and SIIT, and the portfolios of SIMT and SIIT may have been managed by
different Sub-advisers than are currently managing the Funds.
The following table sets forth the name of each Fund and the name of the
corresponding SIMC-advised portfolio of SIMT or SIIT from which the Fund is
cloned.
<TABLE>
<CAPTION>
FUND CORRESPONDING PORTFOLIO
<S> <C>
SEI VP Large Cap Value Fund SIMT Large Cap Value Fund
SEI VP Large Cap Growth Fund SIMT Large Cap Growth Fund
SEI VP Small Cap Value Fund SIMT Small Cap Value Fund
SEI VP Small Cap Growth Fund SIMT Small Cap Growth Fund
SEI VP International Equity Fund SIIT International Equity Fund
SEI VP Emerging Markets Equity Fund SIIT Emerging Markets Equity Fund
SEI VP Core Fixed Income Fund SIMT Core Fixed Income Fund
SEI VP High Yield Bond Fund SIMT High Yield Bond Fund
SEI VP Emerging Markets Debt Fund SIIT Emerging Markets Bond Fund
</TABLE>
Similarly, certain advisers to portfolios of the other SEI Funds will serve as
Sub-Advisers to certain of the Funds. These portfolios, as set forth below, have
substantially the same investment objectives, policies and strategies as the
Funds. SIMC anticipates that the Funds and the corresponding portfolios of the
other SEI Funds will be managed by the same personnel and will have
substantially similar investment strategies, techniques and characteristics.
The following table sets forth the name of each Fund, the name of the
corresponding SEI Funds portfolio from which the Fund is cloned, and the adviser
for each Fund and its corresponding SEI Funds portfolio.
<TABLE>
<CAPTION>
FUND CORRESPONDING SEI FUNDS PORTFOLIO ADVISER
<S> <C> <C>
SEI VP S&P 500 Index Fund SEI Index Funds S&P 500 Index Fund World Asset Management, LLC
SEI VP Bond Index Fund SEI Index Funds Bond Index Fund Mellon Bond Associates, LLP
SEI VP International Fixed Income
Fund SIIT International Fixed Income Fund Strategic Fixed Income, LLC
SEI Liquid Asset Trust Prime Wellington Management Company,
SEI VP Prime Obligation Fund Obligation Fund LLP
</TABLE>
Past investment performance of the Class A Shares of the SEI Funds' portfolios
(except the SEI Index Funds S&P 500 Index Fund, for which the performance of
Class E Shares is shown), as shown in the table below, may be relevant to your
consideration of the Funds, and illustrates SIMC and the advisers' experience in
managing similar portfolios. The investment performance of the portfolios of the
SEI Funds is not indicative of future performance of the Funds. The operating
expenses of each Fund will be different from and may be higher than, the
operating expenses of the corresponding portfolio of the SEI Funds. The
performance information shown does not reflect separate account or other
insurance charges. As a result, the performance of the Funds will differ from
the performance of the corresponding portfolios of the SEI Funds.
<PAGE>
PROSPECTUS 35
INVESTMENT ADVISER, SUB-ADVISERS AND PORTFOLIO MANAGERS
<TABLE>
<CAPTION>
AVERAGE
YEAR-TO-DATE TOTAL RETURN TOTAL RETURN TOTAL RETURN TOTAL RETURN ANNUAL
RETURNS ONE YEAR THREE YEARS FIVE YEARS TEN YEARS TOTAL RETURN
INCEPTION (01/31/2000- ENDED ENDED ENDED ENDED SINCE
FUND NAME DATE 3/31/2000) 12/31/1999 12/31/1999 12/31/1999 12/31/98 INCEPTION
<S> <C> <C> <C> <C> <C> <C> <C>
SIMT Large Cap Value
Fund* 10/31/1994 (2.81)% 4.93% 16.90% 21.53% N/A 20.11%**
SIMT Large Cap Growth
Fund 12/20/1994 9.19% 34.20% 35.90% 33.07% N/A 33.01%
SEI Index Funds S&P
500 Index
Fund -- Class E 07/31/1985 2.29% 20.82% 27.31% 28.29% 17.94% 17.97%
SIMT Small Cap Value
Fund 12/20/1994 1.56% (6.99)% 6.88% 12.00% N/A 12.54%
SIMT Small Cap Growth
Fund 04/20/1992 16.67% 75.22% 26.10% 27.30% N/A 23.61%
SIIT International
Equity Fund 12/20/1989 0.49% 39.63% 17.80% 14.69% 8.59% 8.62%
SIIT Emerging Markets
Equity Fund 01/17/1995 2.92% 70.31% 1.75% N/A N/A 3.97%
SIMT Core Fixed
Income Fund 05/01/1987 2.94% (1.79)% 5.29% 7.76% 7.00% 7.33%
SIMT High Yield Bond
Fund 01/11/1995 (1.92)% 3.61% 6.37% N/A N/A 10.09%
SIIT Emerging Markets
Debt Fund 06/26/1997 7.55% 28.89% N/A N/A N/A 1.89%
SEI Index Funds Bond
Index Fund 05/19/1986 2.32% (1.51)% 5.45% 7.33% 7.09% 7.33%
SIIT International
Fixed Income Fund 09/01/1993 (2.06)% (6.69)% 2.17% 6.40% N/A 6.05%
SEI Liquid Asset
Trust
Prime Obligation
Fund 01/18/1982 1.40% 4.95% 5.19% 5.30% 5.11% 6.05%
</TABLE>
* Prior to October 31, 1994, the Large Cap Value Fund was advised by a
different investment adviser and performance for that period is not shown.
** Since synthetic inception.
<PAGE>
36 PROSPECTUS
PURCHASING AND SELLING FUND SHARES
Shares are offered on each day that the New York Stock Exchange ("NYSE") is open
for business (a "Business Day").
The Funds offer their Class A Shares only to insurance companies for separate
accounts they establish to fund variable life insurance and variable annuity
contracts. An insurance company purchases or redeems shares of the Funds based
on, among other things, the amount of net contract premiums or purchase payments
allocated to a separate account investment division, transfers to or from a
separate account investment division, contract loans and repayments, contract
withdrawals and surrenders, and benefit payments. The contract prospectus
describes how contract owners may allocate, transfer and withdraw amounts to,
and from, separate accounts.
The price per share will be the net asset value per share ("NAV") next
determined after the Funds receive the insurance companies' purchase orders. The
Funds calculate NAV once each Business Day at the regularly-scheduled close of
normal trading on the NYSE (normally, 4:00 p.m. Eastern time). To receive the
current Business Day's NAV, generally the Funds must receive an order before
4:00 p.m. Eastern time.
HOW THE FUNDS CALCULATE NAV
NAV for one Fund share is the value of that share's portion of the net assets of
the Fund.
In calculating NAV, the Funds generally value their portfolio securities at
their market price. If market prices are unavailable or the Funds think that
they are unreliable, fair value prices may be determined in good faith using
methods approved by the Board of Trustees. Some Funds hold portfolio securities
that are listed on foreign exchanges. These securities may trade on weekends or
other days when the Funds do not calculate NAV. As a result, the market value of
these Funds' investments may change on days when it is not possible to purchase
or sell Fund shares.
For the SEI VP Prime Obligation Fund, the Fund values securities utilizing the
amortized cost method (as described in the SAI). If the Fund thinks amortized
cost is unreliable, fair value prices may be determined in good faith using
methods approved by the Board of Trustees. The Fund expects its NAV to remain
constant at $1.00 per share, although there is no guarantee that the Fund can
accomplish this.
DISTRIBUTION OF FUND SHARES
SEI Investments Distribution Co. ("SIDCo.") is the distributor of the shares of
the Funds. SIDCo. receives no compensation for distributing the Funds' Class A
Shares.
<PAGE>
PROSPECTUS 37
DIVIDENDS, DISTRIBUTIONS AND TAXES
DIVIDENDS AND DISTRIBUTIONS
The Funds distribute their investment income as dividends, and make
distributions of capital gains, if any, at least annually.
TAXES
PLEASE CONSULT YOUR TAX ADVISOR REGARDING YOUR SPECIFIC QUESTIONS ABOUT FEDERAL,
STATE AND LOCAL INCOME TAXES. Below is summarized some important tax issues that
affect the Funds and their shareholders. This summary is based on current tax
laws, which may change.
The Funds have been advised that they will not have to pay income taxes if they
distribute all of their income and gains. Net income and realized capital gains
that the Funds distribute are not currently taxable when left to accumulate
within a variable annuity or variable life insurance contract.
For information on federal income taxation of a life insurance company with
respect to its receipt of distributions from the Funds and federal income
taxation of owners of variable annuity or variable life insurance contracts,
refer to your contract prospectus.
MORE INFORMATION ABOUT TAXES IS IN THE FUNDS' SAI.
<PAGE>
SEI Insurance
Products Trust
INVESTMENT ADVISER
SEI Investments Management Corporation
One Freedom Valley Drive
Oaks, PA 19456
DISTRIBUTOR
SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, PA 19456
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP
More information about the Funds is available without charge through the
following:
STATEMENT OF ADDITIONAL INFORMATION ("SAI")
- ------------------------------------------------
The SAI dated April 5, 2000, includes more detailed information about SEI
Insurance Products Trust. The SAI is on file with the SEC and is incorporated by
reference into this prospectus. This means that the SAI, for legal purposes, is
a part of this prospectus.
ANNUAL AND SEMI-ANNUAL REPORTS
- ------------------------------------------------
These reports will typically list the Funds' holdings and contain information
from the Funds' managers about strategies and market conditions and trends and
their impact on performance. The reports will also contain detailed financial
information about the Funds.
TO OBTAIN AN SAI, ANNUAL OR SEMI-ANNUAL REPORT, OR MORE INFORMATION:
- ------------------------------------------------
BY TELEPHONE: Call 1-800-DIAL-SEI
BY MAIL: Write to the Funds at:
One Freedom Valley Drive
Oaks, PA 19456
BY INTERNET: http://www.seic.com
FROM THE SEC: You can obtain the SAI or the Annual and Semi-Annual Reports, as
well as other information about SEI Insurance Products Trust, from the EDGAR
Database on the SEC's website ("http://www.sec.gov"). You may review and copy
documents at the SEC Public Reference Room in Washington, D.C. (for information
on the operation of the Public Reference Room, call 202-942-8090). You may
request documents by mail from the SEC, upon payment of a duplicating fee, by
writing to: Securities and Exchange Commission, Public Reference Section,
Washington, DC 20549-0102. You may also obtain this information, upon payment of
a duplicating fee, by e-mailing the SEC at the following address:
[email protected].
The Trust's Investment Company Act registration number is 811-9183.
<PAGE>
SEI
INSURANCE
PRODUCTS
TRUST
CLASS B SHARES
PROSPECTUS
APRIL 30, 2000
---------------------------------------------------------
MONEY MARKET FUND:
SEI VP PRIME OBLIGATION FUND
---------------------------------------------------------
INVESTMENT ADVISER
SEI INVESTMENTS MANAGEMENT CORPORATION
SUB-ADVISER
WELLINGTON MANAGEMENT COMPANY, LLP
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED ANY FUND SHARES OR
DETERMINED WHETHER THIS PROSPECTUS IS ACCURATE OR COMPLETE.
IT IS A CRIME FOR ANYONE TO TELL YOU OTHERWISE.
<PAGE>
SEI Insurance
Products Trust
ABOUT THIS PROSPECTUS
- ------------------------------------------------------------------------
SEI Insurance Products Trust is a mutual fund family that offers shares in
separate investment portfolios (Funds). The Funds have individual investment
goals and strategies and are designed exclusively as funding vehicles for
variable life insurance and variable annuity contracts. This prospectus gives
contract owners important information about the Class B Shares of the SEI VP
Prime Obligation Fund. Please read this prospectus and keep it for future
reference. Variable life insurance and variable annuity account investors should
also review the separate account prospectus prepared by their insurance company.
THIS PROSPECTUS HAS BEEN ARRANGED INTO DIFFERENT SECTIONS SO THAT YOU CAN EASILY
REVIEW THIS IMPORTANT INFORMATION. ON THE NEXT PAGE, THERE IS SOME GENERAL
INFORMATION YOU SHOULD KNOW ABOUT RISK AND RETURN APPLICABLE TO THE FUND. FOR
MORE DETAILED INFORMATION ABOUT THE FUND, PLEASE SEE:
PRINCIPAL INVESTMENT STRATEGIES AND RISKS............................2
PERFORMANCE INFORMATION AND EXPENSES.................................3
MORE INFORMATION ABOUT FUND INVESTMENTS..............................4
THE ADVISER AND SUB-ADVISER..........................................4
PURCHASING AND SELLING FUND SHARES...................................5
DIVIDENDS, DISTRIBUTIONS AND TAXES...................................6
HOW TO OBTAIN MORE INFORMATION ABOUT SEI INSURANCE PRODUCTS
TRUST.......................................................Back Cover
<PAGE>
2 PROSPECTUS
SEI VP PRIME OBLIGATION FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Preserving principal and maintaining liquidity while
providing current income
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY Very low
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY The Fund is professionally managed to provide liquidity,
diversification and a competitive yield by investing in high
quality, short-term money market instruments
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP Prime Obligation Fund is comprised of short-term debt obligations of
U.S. issuers that are rated in one of the two highest rating categories by
nationally recognized statistical rating organizations or securities that the
Sub-Adviser determines are of comparable quality. The Fund invests in: (i)
commercial paper and other short-term corporate obligations (including
asset-backed securities) rated in the highest rating category;
(ii) certificates of deposit, time deposits, bankers' acceptances, bank notes
and other obligations of U.S. commercial banks or savings and loan institutions
that meet certain asset requirements; (iii) short-term obligations issued by
state and local governments; and (iv) U.S. Treasury obligations and obligations
issued or guaranteed as to principal and interest by agencies or
instrumentalities of the U.S. government. The Fund may also enter into
fully-collateralized repurchase agreements.
Using a top-down strategy and bottom-up security selection, the Sub-Adviser
seeks securities with an acceptable maturity, that are marketable and liquid,
offer competitive yields, and are issued by issuers that are on a sound
financial footing. The Sub-Adviser also considers factors such as the
anticipated level of interest rates and the maturity of individual securities
relative to the maturity of the Fund as a whole. The Fund follows strict
Investment Company Act rules about the credit quality, maturity and
diversification of its investments.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
An investment in the Fund is subject to income risk, which is the possibility
that the Fund's yield will decline due to falling interest rates.
Although the Fund's U.S. government securities are considered to be among the
safest investments, they are not guaranteed against price movements due to
changing interest rates. Obligations issued by some U.S. government agencies are
backed by the U.S. Treasury, while others are backed solely by the ability of
the agency to borrow from the U.S. Treasury or by the agency's own resources.
AN INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT. ALTHOUGH THE FUND SEEKS TO
MAINTAIN A CONSTANT PRICE PER SHARE OF $1.00, YOU MAY LOSE MONEY BY INVESTING IN
THE FUND.
<PAGE>
PROSPECTUS 3
SEI VP PRIME OBLIGATION FUND
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP Prime Obligation Fund had not commenced
operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES CLASS B
(EXPENSES DEDUCTED FROM FUND ASSETS) SHARES
<S> <C>
Investment Advisory Fees 0.08%
Distribution (12b-1) Fees None
Other Expenses 1.11%*
--------
Total Annual Fund Operating Expenses 1.19%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP PRIME OBLIGATION FUND 0.69%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISER"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP Prime Obligation Fund -- Class B Shares $121 $378
</TABLE>
<PAGE>
4 PROSPECTUS
MORE INFORMATION ABOUT FUND INVESTMENTS
This prospectus describes the Fund's primary strategies, and the Fund will
normally invest at least 65% of its assets in the types of securities described
in this prospectus. However, the Fund also may invest in other securities, use
other strategies and engage in other investment practices. These investments and
strategies, as well as those described in this prospectus, are described in
detail in the Fund's Statement of Additional Information ("SAI").
The investments and strategies described throughout this prospectus are those
that the Sub-Adviser uses under normal conditions. During unusual economic or
market conditions or for temporary defensive or liquidity purposes, the Fund may
invest up to 100% of its assets in cash, money market instruments, repurchase
agreements and short-term obligations that may not be consistent with the Fund's
objectives. The Fund will do so only if the Adviser or Sub-Adviser believe that
the risk of loss outweighs the opportunity for capital gains and higher income.
Of course, there is no guarantee that the Fund will achieve its investment goal.
INVESTMENT ADVISER AND SUB-ADVISER
SEI INVESTMENTS MANAGEMENT CORPORATION ("SIMC") ACTS AS THE MANAGER OF MANAGERS
OF THE FUND, AND IS RESPONSIBLE FOR THE INVESTMENT PERFORMANCE OF THE FUND SINCE
IT ALLOCATES THE FUND'S ASSETS TO ONE OR MORE SUB-ADVISERS AND RECOMMENDS HIRING
OR CHANGING SUB-ADVISERS TO THE BOARD OF TRUSTEES.
The Sub-Adviser makes investment decisions for the assets it manages and
continuously reviews, supervises and administers its investment program. SIMC
oversees the Sub-Adviser to ensure compliance with the Fund's investment
policies and guidelines, and monitors the Sub-Adviser's adherence to its
investment style. The Board of Trustees supervises SIMC and the Sub-Adviser;
establishes policies that they must follow in their management activities; and
oversees the hiring and termination of Sub-Advisers recommended by SIMC. SIMC
pays the Sub-Adviser out of the investment advisory fees it receives.
SIMC, an SEC-registered adviser, serves as the Adviser to the Fund. As of
December 31, 1999, SIMC had approximately $61.8 billion in assets under
management. SIMC is entitled to investment advisory fees of 0.08% of the average
daily net assets of the Fund.
SUB-ADVISER AND PORTFOLIO MANAGER
Wellington Management Company, LLP: Timothy E. Smith is the Portfolio Manager of
SEI VP Prime Obligation Fund. Mr. Smith is a Vice President of Wellington
Management Comany, LLP which he joined in 1992.
<PAGE>
PROSPECTUS 5
PURCHASING AND SELLING FUND SHARES
Shares are offered on each day that the New York Stock Exchange ("NYSE") is open
for business (a "Business Day").
The Fund offers its Class B Shares only to insurance companies for separate
accounts they establish to fund variable life insurance and variable annuity
contracts. An insurance company purchases or redeems shares of the Fund based
on, among other things, the amount of net contract premiums or purchase payments
allocated to a separate account investment division, transfers to or from a
separate account investment division, contract loans and repayments, contract
withdrawals and surrenders, and benefit payments. The contract prospectus
describes how contract owners may allocate, transfer and withdraw amounts to,
and from, separate accounts.
The price per share will be the net asset value per share ("NAV") next
determined after the Fund receives the insurance companies' purchase orders. The
Fund calculates NAV once each Business Day at the regularly-scheduled close of
normal trading on the NYSE (normally, 4:00 p.m. Eastern time). To receive the
current Business Day's NAV, generally the Fund must receive an order before
4:00 p.m. Eastern time.
HOW THE FUND CALCULATES NAV
NAV for one Fund share is the value of that share's portion of the net assets of
the Fund.
The Fund values securities utilizing the amortized cost method (as described in
the SAI). If the Fund thinks amortized cost is unreliable, fair value prices may
be determined in good faith using methods approved by the Board of Trustees. The
Fund expects its NAV to remain constant at $1.00 per share, although there is no
guarantee that the Fund can accomplish this.
DISTRIBUTION OF FUND SHARES
SEI Investments Distribution Co. ("SIDCo.") is the distributor of the shares of
the Fund. SIDCo. receives no compensation for distributing the Fund's Class B
Shares.
For Class B Shares, shareholder servicing fees, as a percentage of average daily
net assets, may be up to 0.25%.
<PAGE>
6 PROSPECTUS
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund declares dividends daily and distributes its income monthly. The Fund
makes distributions of capital gains, if any, at least annually.
TAXES
PLEASE CONSULT YOUR TAX ADVISOR REGARDING YOUR SPECIFIC QUESTIONS ABOUT FEDERAL,
STATE AND LOCAL INCOME TAXES. Below is summarized some important tax issues that
affect the Fund and its shareholders. This summary is based on current tax laws,
which may change.
The Fund has been advised that it will not have to pay income taxes if it
distributes all of its income and gains. Net income and realized capital gains
that the Fund distributes are not currently taxable when left to accumulate
within a variable annuity or variable life insurance contract.
For information on federal income taxation of a life insurance company with
respect to its receipt of distributions from the Fund and federal income
taxation of owners of variable annuity or variable life insurance contracts,
refer to your contract prospectus.
MORE INFORMATION ABOUT TAXES IS IN THE FUND'S SAI.
<PAGE>
SEI Insurance
Products Trust
INVESTMENT ADVISER
SEI Investments Management Corporation
One Freedom Valley Drive
Oaks, PA 19456
DISTRIBUTOR
SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, PA 19456
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP
More information about the Fund is available without charge through the
following:
STATEMENT OF ADDITIONAL INFORMATION ("SAI")
- ------------------------------------------------
The SAI dated April 30, 2000, includes more detailed information about SEI
Insurance Products Trust. The SAI is on file with the SEC and is incorporated by
reference into this prospectus. This means that the SAI, for legal purposes, is
a part of this prospectus.
ANNUAL AND SEMI-ANNUAL REPORTS
- ------------------------------------------------
These reports will typically list the Fund's holdings and contain information
from the Fund's managers about strategies and market conditions and trends and
their impact on performance. The reports will also contain detailed financial
information about the Fund.
TO OBTAIN AN SAI, ANNUAL OR SEMI-ANNUAL REPORT, OR MORE INFORMATION:
- ------------------------------------------------
BY TELEPHONE: Call 1-800-DIAL-SEI
BY MAIL: Write to the Fund at:
One Freedom Valley Drive
Oaks, PA 19456
BY INTERNET: http://www.seic.com
FROM THE SEC: You can obtain the SAI or the Annual and Semi-Annual Reports,
as well as other information about SEI Insurance Products Trust, from the EDGAR
Database on the SEC's website ("http://www.sec.gov"). You may review and copy
documents at the SEC Public Reference Room in Washington, D.C. (for information
on the operation of the Public Reference Room, call 202-942-8090). You may
request documents by mail from the SEC, upon payment of a duplicating fee, by
writing to: Securities and Exchange Commission, Public Reference Section,
Washington, DC 20549-0102. You may also obtain this information, upon payment of
a duplicating fee, by e-mailing the SEC at the following address:
[email protected].
The Trust's Investment Company Act registration number is 811-9183.
<PAGE>
SEI INSURANCE PRODUCTS TRUST
Adviser:
SEI Investments Management Corporation
Administrator:
SEI Investments Fund Management
Distributor:
SEI Investments Distribution Co.
Sub-Advisers:
Acadian Asset Management, Inc.
Alliance Capital Management L.P.
Artisan Partners Limited Partnership
BlackRock Financial Management, Inc.
BlackRock International, Ltd.
Capital Guardian Trust Company
Coronation Asset Management (Proprietary)
Limited
Credit Suisse Asset Management, LLC
Credit Suisse Asset Management Limited
LSV Asset Management, L.P.
Mazama Asset Management, LLC
Mellon Bond Associates, LLP
Mellon Equity Associates, LLP
Morgan Stanley Dean Witter Investment
Management Inc.
Nicholas-Applegate Capital Management
Nomura Corporate Research and Asset
Management Inc.
Oechsle International Advisors, LLC
Provident Investment Counsel, Inc.
RS Investment Management, L.P.
Robert W. Baird & Co. Incorporated
Salomon Brothers Asset Management Inc
Sanford C. Bernstein & Co., Inc.
Sawgrass Asset Management, LLC
Schroder Investment Management North
America Inc.
Security Capital Global Capital Management
Incorporated
SG Pacific Asset Management, Inc.,
SGY Asset Management (Singapore)
Limited
SG Yamaichi Asset Management Co., Ltd.
Strategic Fixed Income, LLC
TCW Investment Management Company
Wall Street Associates
Wellington Management Company, LLP
Western Asset Management Company
World Asset Management, LLC
This STATEMENT OF ADDITIONAL INFORMATION is not a Prospectus. It is intended
to provide additional information regarding the activities and operations of SEI
Insurance Products Trust (the "Trust") and should be read in conjunction with
the Trust's Prospectuses dated April 30, 2000. Prospectuses may be obtained
through SEI Investments Distribution Co., Oaks, Pennsylvania 19456.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
The Trust................................................................. S-3
Investment Objectives and Policies........................................ S-3
Description of Permitted Investments and Risk Factors..................... S-12
Description of Ratings.................................................... S-34
Investment Limitations.................................................... S-41
The Administrator and Transfer Agent...................................... S-42
The Adviser and The Sub-Advisers.......................................... S-43
Distribution and Shareholder Servicing.................................... S-47
Code of Ethics............................................................ S-48
Trustees and Officers of the Trust........................................ S-48
Performance............................................................... S-50
Purchase and Redemption of Shares......................................... S-53
Taxes..................................................................... S-53
Portfolio Transactions.................................................... S-55
Description of Shares..................................................... S-56
Limitation of Trustees' Liability......................................... S-56
Voting.................................................................... S-56
Custodians................................................................ S-57
Shareholder Liability..................................................... S-57
Experts................................................................... S-57
Legal Counsel............................................................. S-57
</TABLE>
April 5, 2000
S-2
<PAGE>
THE TRUST
SEI Insurance Products Trust (the "Trust") is an open-end management
investment company that has diversified and non-diversified portfolios. The
Trust was organized as a Massachusetts business trust under a Declaration of
Trust dated December 14, 1998. The Declaration of Trust permits the Trust to
offer separate series ("portfolios") of units of beneficial interest ("shares")
and separate classes of portfolios. Except for differences between the Class A
shares and Class B shares pertaining to sales charges, distribution and
shareholder servicing, voting rights, dividend and transfer agent expenses, each
share of each portfolio represents an equal proportionate interest in that
portfolio with each other share of that portfolio. All consideration received by
the Trust for shares of any class of any portfolio and all assets of such
portfolio or class belong to that portfolio or class, respectively, and would be
subject to the liabilities related thereto.
The Trust pays its expenses, including fees of its service providers, audit
and legal expenses, expenses of preparing prospectuses, proxy solicitation
materials and reports to shareholders, costs of custodial services and
registering the shares under federal and state securities laws, pricing,
insurance expenses, litigation and other extraordinary expenses, brokerage
costs, interest charges, taxes and organization expenses.
Certain shareholders in one or more of the portfolios may obtain asset
allocation services from the Adviser and other financial intermediaries with
respect to their investments in such portfolios. If a sufficient amount of a
portfolio's assets are subject to such asset allocation services, a portfolio
may incur higher transaction costs and a higher portfolio turnover rate than
would otherwise be anticipated as a result of redemptions and purchases of
portfolio shares pursuant to such services. Further, to the extent that the
Adviser is providing asset allocation services and providing investment advice
to the portfolios, it may face conflicts of interest in fulfilling its
responsibilities because of the possible differences between the interests of
its allocation clients and the interest of the portfolios.
This Statement of Additional Information relates to the SEI VP Large Cap
Value, SEI VP Large Cap Growth, SEI VP S&P 500 Index, SEI VP Small Cap Value,
SEI VP Small Cap Growth, SEI VP International Equity, SEI VP Emerging Markets
Equity, SEI VP Core Fixed Income, SEI VP Bond Index, SEI VP High Yield Bond, SEI
VP International Fixed Income, SEI VP Emerging Markets Debt and SEI VP Prime
Obligation Funds (each a "Fund" and, together, the "Funds").
The investment adviser and investment sub-advisers to the Funds are referred
to collectively as "advisers."
INVESTMENT OBJECTIVES AND POLICIES
SEI VP LARGE CAP VALUE FUND--The investment objective of the SEI VP Large
Cap Value Fund is long-term growth of capital and income.
Under normal market conditions, the Fund will invest at least 65% of its
total assets in a diversified portfolio of high quality, income producing common
stocks of large companies (I.E., companies with market capitalizations of more
than $1 billion) which, in the opinion of the advisers, are undervalued in the
marketplace at the time of purchase. In general, the advisers characterize high
quality securities as those that have above-average reinvestment rates. The
advisers also consider other factors, such as earnings and dividend growth
prospects, as well as industry outlook and market share. Any remaining assets
may be invested in other equity securities and in investment grade fixed income
securities. Investment grade (I.E., rated in one of the four highest ratings
categories) fixed income securities are securities that are rated at least BBB
by Standard & Poor's Corporation ("S&P") or Baa by Moody's Investors Service,
Inc. ("Moody's"). The Fund may also borrow money, invest in illiquid securities,
when-issued and delayed-delivery securities, shares of real estate investment
trusts ("REITs"), and shares of other investment companies, and lend its
securities to qualified buyers.
S-3
<PAGE>
SEI VP LARGE CAP GROWTH FUND--The investment objective of the SEI VP Large
Cap Growth Fund is capital appreciation.
Under normal market conditions, the Fund will invest at least 65% of its
total assets in equity securities of large companies (I.E., companies with
market capitalizations of more than $1 billion) which, in the opinion of the
advisers, possess significant growth potential. Any remaining assets may be
invested in investment grade fixed income securities or in equity securities of
smaller companies that the Fund's advisers believe are appropriate in light of
the Fund's objective. The Fund may also borrow money, invest in illiquid
securities, when-issued and delayed-delivery securities, shares of REITs, and
shares of other investment companies, and lend its securities to qualified
buyers.
SEI VP S&P 500 INDEX FUND--The SEI VP S&P 500 Index Fund seeks to provide
investment results that correspond to the aggregate price and dividend
performance of the securities in the Standard & Poor's 500 Composite Stock Price
Index (the "S&P 500 Index"), which is comprised of 500 selected securities (most
of which are common stocks listed on the New York Stock Exchange).
The Fund's ability to duplicate the performance of the S&P 500 Index will
depend to some extent on the size and timing of cashflows into and out of the
Fund, as well as on the level of the Fund's expenses.
Adjustments made to accommodate cash flows will track the S&P 500 Index to
the maximum extent possible, and may result in brokerage expenses for the Fund.
Over time, the correlation between the performance of the Fund and the S&P 500
Index is expected to be over 0.95. A correlation of 1.00 would indicate perfect
correlation, which would be achieved when the net asset value of the Fund,
including the value of its dividend and capital gains distributions, increased
or decreased in exact proportion to changes in the S&P 500 Index.
The Fund will normally be invested in all of the stocks and other securities
which comprise the S&P 500 Index, except when changes are made to the S&P 500
Index itself. The Fund's policy is to be fully invested in common stocks and
other securities included in the Index, and it is expected that cash reserve
items would normally be less than 10% of net assets. Accordingly, an investment
in shares of the Fund involves risks similar to those of investing in a
portfolio consisting of the common stocks and other securities of some or all of
the companies included in the S&P 500 Index.
The weightings of securities in the S&P 500 Index are based on each
security's relative total market value, I.E., market price per share times the
number of shares outstanding. Because of this weighting, approximately 50% of
the S&P 500 Index is currently composed of stocks of the 50 largest companies in
the S&P 500 Index, and the S&P 500 Index currently represents over 65% of the
market value of all U.S. common stocks listed on the New York Stock Exchange.
World Asset Management, LLC ("World"), the Fund's Sub-Adviser, makes no
attempt to "manage" the Fund in the traditional sense (I.E., by using economic,
financial or market analyses). The adverse financial situation of a company
usually will not result in the elimination of a security from the Fund. However,
an investment may be removed from the Fund if, in the judgment of World, the
merit of the investment has been substantially impaired by extraordinary events
or adverse financial conditions. Furthermore, administrative adjustments may be
made in the Fund from time to time because of mergers, changes in the
composition of the S&P 500 Index and similar reasons. In certain circumstances,
World may exercise discretion in determining whether to exercise warrants or
rights issued in respect to fund securities or whether to tender fund securities
pursuant to a tender or exchange offer.
The equity securities in which the Fund invests are common stocks, preferred
stocks, securities convertible into common stock and American Depositary
Receipts ("ADRs"). The Fund may also purchase shares of REITs.
The Fund may enter into stock index futures contracts to maintain adequate
liquidity to meet its redemption demands while maximizing the level of the
Fund's assets which are tracking the performance of the S&P 500 Index, provided
that the value of these contracts does not exceed 20% of the Fund's total
S-4
<PAGE>
assets. The Fund may only purchase those stock index futures contracts--such as
futures contracts on the S&P 500 Index--that are likely to closely duplicate the
performance of the S&P 500 Index. The Fund also can sell such futures contracts
in order to close out a previously established position. The Fund will not enter
into any stock index futures contract for the purpose of speculation, and will
only enter into contracts traded on national securities exchanges with
standardized maturity dates.
The Fund may invest cash reserves in securities issued by the U.S.
Government, its agencies or instrumentalities, bankers' acceptances, commercial
paper rated at least A-1 by S&P and/or Prime-1 by Moody's, certificates of
deposit and repurchase agreements involving such obligations. Such investments
will not be used for defensive purposes.
The Fund is not sponsored, endorsed, sold or promoted by S&P. S&P makes no
representation or warranty, implied or express, to the purchasers of the Fund or
any member of the public regarding the advisability of investing in index funds
or the Fund or the ability of the Index to track general stock market
performance.
SEI VP SMALL CAP VALUE FUND--The investment objective of the SEI VP Small
Cap Value Fund is capital appreciation.
Under normal market conditions, the Fund will invest at least 65% of its
total assets in the equity securities of smaller companies (I.E., companies with
market capitalizations of less than $2 billion) which, in the opinion of the
advisers, have prices that appear low relative to certain fundamental
characteristics such as earnings, book value, or return on equity. Any remaining
assets may be invested in investment grade fixed income securities or equity
securities of larger, more established companies that the Fund's advisers
believe are appropriate in light of the Fund's objective. The Fund may also
borrow money, invest in illiquid securities, when-issued and delayed-delivery
securities, shares of REITs, and shares of other investment companies, and lend
its securities to qualified buyers.
SEI VP SMALL CAP GROWTH FUND--The investment objective of the SEI VP Small
Cap Growth Fund is long-term capital appreciation.
Under normal market conditions, the Fund will invest at least 65% of its
total assets in the equity securities of smaller growth companies (I.E.,
companies with market capitalizations less than $2 billion) which, in the
opinion of the advisers, are in an early stage or transitional point in their
development and have demonstrated or have the potential for above average
capital growth. Any remaining assets may be invested in the equity securities of
more established companies that the advisers believe may offer strong capital
appreciation potential due to their relative market position, anticipated
earnings growth, changes in management or other similar opportunities.
For temporary defensive purposes, the Fund may invest all or a portion of
its assets in common stocks or larger, more established companies and in
investment grade fixed income securities. The Fund may also borrow money, invest
in illiquid securities, when-issued and delayed-delivery securities, shares of
REITs, and shares of other investment companies, and lend its securities to
qualified buyers.
The Fund's annual turnover rate may exceed 100%. Such a turnover rate may
result in higher transaction costs and in additional taxes for shareholders.
SEI VP INTERNATIONAL EQUITY FUND--The SEI VP International Equity Fund seeks
to provide long-term capital appreciation by investing primarily in a
diversified portfolio of equity securities of non-U.S. issuers.
Under normal circumstances, at least 65% of the International Equity Fund's
assets will be invested in equity securities of non-U.S. issuers located in at
least three countries other than the United States.
Securities of non-U.S. issuers purchased by the Fund will typically be
listed on recognized foreign exchanges, but also may be purchased in
over-the-counter markets, on U.S. registered exchanges, or in the form of
sponsored or unsponsored ADRs traded on registered exchanges or NASDAQ, or
sponsored or
S-5
<PAGE>
unsponsored European Depositary Receipts ("EDRs"), Continental Depositary
Receipts ("CDRs") or Global Depositary Receipts ("GDRs"). The Fund expects its
investments to emphasize both large, intermediate and small capitalization
companies.
The Fund expects to be fully invested in the primary investments described
above, but may invest up to 35% of its total assets in U.S. or non-U.S. cash
reserves; money market instruments; swaps; options on securities and non-U.S.
indices; futures contracts, including stock index futures contracts; and options
on futures contracts. The Fund is permitted to acquire floating and variable
rate securities, purchase securities on a when-issued or delayed delivery basis,
and invest up to 15% of its total assets in illiquid securities. Although
permitted to do so, the Fund does not currently intend to invest in securities
issued by passive foreign investment companies or to engage in securities
lending.
For temporary defensive purposes, when the advisers determine that market
conditions warrant, the Fund may invest up to 100% of its assets in U.S.
dollar-denominated fixed income securities or debt obligations and the following
domestic and foreign money market instruments: government obligations,
certificates of deposit, bankers' acceptances, time deposits, commercial paper,
short-term corporate debt issues and repurchase agreements, and may hold a
portion of their assets in cash. In addition, the Fund may invest in the
foregoing instruments and hold cash for liquidity purposes.
For temporary defensive purposes when the advisers determine that market
conditions warrant, the Fund may invest up to 50% of its assets in U.S. and
non-U.S. money market instruments and in other U.S. and non-U.S. long- and
short-term debt instruments which are rated BBB or higher by S&P or Baa or
higher by Moody's at the time of purchase, or which are determined by the
advisers to be of comparable quality; maintain a portion of such assets in cash;
and invest such assets in obligations of supranational entities which are rated
A or higher by S&P or Moody's at the time of purchase or which are determined by
the advisers to be of comparable quality.
SEI VP EMERGING MARKETS EQUITY FUND--The SEI VP Emerging Markets Equity Fund
seeks to provide capital appreciation by investing primarily in a diversified
portfolio of equity securities of emerging market issuers.
Under normal circumstances, at least 65% of the Emerging Markets Equity
Fund's assets will be invested in equity securities of emerging market issuers.
Under normal conditions, the Fund maintains investments in at least six emerging
market countries and does not invest more than 35% of its total assets in any
one emerging market country. The Fund defines an emerging market country as any
country the economy and market of which the World Bank or the United Nations
considers to be emerging or developing. The Fund's advisers consider emerging
market issuers to include companies the securities of which are principally
traded in the capital markets of emerging market countries; that derive at least
50% of their total revenue from either goods produced or services rendered in
emerging market countries, regardless of where the securities of such companies
are principally traded; or that are organized under the laws of and have a
principal office in an emerging market country.
The Fund expects to be fully invested in the primary investments described
above, but may invest up to 35% of its total assets in debt securities,
including up to 5% of its total assets in debt securities rated below investment
grade. These debt securities will include debt securities of governmental and
private issuers in emerging market countries. Bonds rated below investment grade
are often referred to as "junk bonds." Such securities involve greater risk of
default or price volatility than investment grade securities. The Fund may
invest in certain debt securities issued by the governments of emerging market
countries that are or may be eligible for conversion into investments in
emerging market companies under debt conversion programs sponsored by such
governments.
The Fund may invest up to 15% of its total assets in illiquid securities.
The Fund's advisers believe that carefully selected investments in joint
ventures, cooperatives, partnerships, private placements, unlisted securities
and other similar situations (collectively, "special situations") could enhance
the Fund's capital appreciation potential. Investments in special situations may
be liquid, as determined by the Fund's
S-6
<PAGE>
advisers based on criteria approved by the Board of Trustees. To the extent
these investments are deemed illiquid, the Fund's investment in them will be
subject to its 15% restriction on investment in illiquid securities.
The Fund may invest up to 10% of its total assets in shares of other
investment companies. The Fund may invest in futures contracts and purchase
securities on a when-issued or delayed delivery basis. The Fund may also
purchase and write options to buy or sell futures contracts.
For temporary defensive purposes, when the advisers determine that market
conditions warrant, the Fund may invest up to 100% of its assets in U.S.
dollar-denominated fixed income securities or debt obligations and the following
domestic and foreign money market instruments: government obligations,
certificates of deposit, bankers' acceptances, time deposits, commercial paper,
short-term corporate debt issues and repurchase agreements, and may hold a
portion of their assets in cash. In addition, the Fund may invest in the
foregoing instruments and hold cash for liquidity purposes.
For temporary defensive purposes when the advisers determine that market
conditions warrant, the Fund may invest up to 20% of its total assets in the
equity securities of companies included in the Morgan Stanley Capital
International Europe, Australia, Far East Index (the "EAFE Index"). These
companies typically have larger average market capitalizations than the emerging
market companies in which the Fund generally invests.
SEI VP CORE FIXED INCOME FUND--The investment objective of the SEI VP Core
Fixed Income Fund is current income consistent with the preservation of capital.
Under normal market conditions, the Fund will invest at least 65% of its
total assets in fixed income securities that are rated investment grade or
better, I.E., rated in one of the four highest rating categories by a nationally
recognized statistical rating organization ("NRSRO") at the time of purchase,
or, if not rated, determined to be of comparable quality by the advisers. Fixed
income securities in which the Fund may invest consist of: (i) corporate bonds
and debentures, (ii) obligations issued by the United States Government, its
agencies and instrumentalities, (iii) municipal securities of issuers located in
all fifty states, the District of Columbia, Puerto Rico and other U.S.
territories and possessions, consisting of municipal bonds, municipal notes,
tax-exempt commercial paper and municipal lease obligations, (iv) receipts
involving U.S. Treasury obligations, (v) mortgage-backed securities,
(vi) asset-backed securities, and (vii) zero coupon, pay-in-kind or deferred
payment securities.
Any remaining assets may be invested in: (i) interest-only and
principal-only components of mortgage-backed securities, (ii) mortgage dollar
rolls, (iii) securities issued on a when-issued and delayed-delivery basis,
including TBA mortgage-backed securities, (iv) warrants, (v) money market
securities, (vi) Yankee obligations and (vii) construction loans. In addition,
the Fund may purchase or write options, futures (including futures on U.S.
Treasury obligations and Eurodollar instruments) and options on futures. The
Fund may also borrow money, invest in illiquid securities and shares of other
investment companies, and lend its securities to qualified buyers.
Duration is a measure of the expected life of a fixed income security on a
cash flow basis. Most debt obligations provide interest payments and a final
payment at maturity. Some also have put or call provisions that allow the
security to be redeemed at special dates prior to maturity. Duration
incorporates yield, coupon interest payments, final maturity and call features
into a single measure. The advisers therefore consider duration a more accurate
measure of a security's expected life and sensitivity to interest rate changes
than is the security's term to maturity.
The SEI VP Core Fixed Income Fund invests in a portfolio with a
dollar-weighted average duration that will, under normal market conditions, stay
within plus or minus 20% of what the advisers believe to be the average duration
of the domestic bond market as a whole. The advisers base their analysis of the
average duration of the domestic bond market on the bond market indices which
they believe to be representative. The advisers currently use the Lehman
Aggregate Bond Index for this purpose.
S-7
<PAGE>
The Fund's annual turnover rate may exceed 100%. Such a turnover rate may
lead to higher transaction costs and may result in higher taxes for
shareholders.
SEI VP BOND INDEX FUND--The SEI VP Bond Index Fund currently seeks to
provide investment results that correspond to the aggregate price and interest
performance of the Lehman Aggregate Bond Index (the "Lehman Index"), which
tracks the performance of debt securities. The Lehman Index is made up of the
Government/Corporate Index, the Mortgage-Backed Securities Index and the
Asset-Backed Securities Index. The Lehman Index includes fixed rate debt issues
rated investment grade or higher by one or more NRSROs. All issues have at least
one year to maturity and an outstanding par value of at least $100 million.
Lehman Brothers, Inc. is neither a sponsor of nor in any other way affiliated
with the Trust. Inclusion of a security in the Lehman Index in no way implies an
opinion of Lehman Brothers, Inc. as to its attractiveness or appropriateness as
an investment.
In seeking to generate results that correspond to the performance of the
Lehman Index, the Fund will invest in the following obligations: (i) debt
obligations issued or guaranteed by the United States Government or its agencies
or instrumentalities; (ii) investment-grade debt obligations issued by U.S.
corporations; (iii) debt obligations issued or guaranteed by foreign sovereign
governments, municipalities, governmental agencies or international agencies;
(iv) mortgage-backed securities, including conventional 15- and 30-year fixed
rate mortgages, graduated payment mortgages, balloon mortgages and adjustable
rate mortgages; (v) asset-backed securities; and (vi) any other issues that are
included in the Lehman Index.
Fixed income securities in which the Fund may invest must be rated BBB or
better by S&P or Baa or better by Moody's at the time of purchase. Debt
securities rated BBB or Baa lack outstanding investment characteristics and have
speculative characteristics as well. In the event that a security held by the
Fund is downgraded below investment grade, the adviser will promptly review the
situation and take appropriate action.
If an obligation which is included in the Lehman Index on the first day of
the month ceases to meet any of the qualifications for inclusion in the Lehman
Index during that month, the obligation remains in the Lehman Index through the
end of that month and then is eliminated from the Lehman Index. Mellon Bond
Associates, LLP ("MBA"), the Fund's sub-adviser, will monitor portfolio
securities in order to determine whether any of these obligations have ceased to
qualify for inclusion in the Lehman Index. If an obligation has ceased to
qualify for inclusion in the Lehman Index as a result of: (i) a lowered
investment rating, (ii) an aggregate outstanding principal amount of less than
$100 million, or (iii) a remaining maturity that no longer exceeds one year
(collectively, "Ineligible Obligations"), the investment adviser may either
undertake to sell such Ineligible Obligations as quickly as is financially
prudent, which may be prior to or later than the time that obligation is removed
from the Lehman Index, or may determine to retain the security. To the extent
that the investment adviser determines to retain Ineligible Obligations, such
Ineligible Obligations, together with cash and money market instruments, will
not exceed 20% of the Fund's net assets. Although the Fund retains the right to
invest up to 20% of its net assets in Ineligible Obligations, cash and money
market instruments, these items are expected to constitute less than 10% of the
net assets of the Fund. Obligations held by the Fund that became Ineligible
Obligations as a result of being rated below investment grade (which securities
are often referred to as "junk bonds") will not constitute more than 5% of the
Fund's net assets. In addition, cash holdings will not exceed 5% of the Fund's
net assets. In addition, obligations that become eligible for inclusion in the
Lehman Index during a particular month generally will not actually be included
in the Lehman Index until the next month. However, the Fund may elect to
purchase any such obligation and deem it to be included in the Lehman Index once
it becomes eligible.
The Fund generally will not hold all of the individual issues which comprise
the Lehman Index because of the large number of securities involved. Instead,
the Fund will hold a representative sample of the securities in the Index,
selecting issues to represent entire "classes" or types of securities in the
Lehman Index. Obligations included in the Lehman Index have been categorized by
MBA into sectors
S-8
<PAGE>
which have been organized on the basis of type of issuer, and then further
classified by quality and remaining maturities. The percentage of the Fund's
assets to be invested in the aggregate obligations included in a particular
sector of the Lehman Index will approximate, to the maximum extent feasible, the
percentage such sector represents in the Lehman Index. The Fund's ability to
duplicate the performance of the Lehman Index will depend to some extent on the
size and timing of cash flows into and out of the Portfolio, as well as on the
level of the Fund's expenses, and the capability of MBA to select a
representative sample of the securities included in the Lehman Index. To the
extent that the size of the Fund's assets limits the number of issues that the
Fund can purchase, there is more potential for deviation from the Lehman Index's
performance than at larger asset levels.
The Fund may invest in restricted securities, including Rule 144A
securities, included in the Lehman Index.
SEI VP HIGH YIELD BOND FUND--The investment objective of the SEI VP High
Yield Bond Fund is to maximize total return.
Under normal market conditions, the Fund will invest at least 65% of its
total assets in fixed income securities that are rated below investment grade,
I.E., rated below the top four rating categories by an NRSRO at the time of
purchase, or, if not rated, determined to be of comparable quality by the
advisers. Below investment grade securities are commonly referred to as "junk
bonds," and generally entail increased credit and market risk. Securities rated
in the lowest rating categories may have predominantly speculative
characteristics or may be in default.
The Fund may invest in all types of fixed income securities issued by
domestic and foreign issuers, including: (i) mortgage-backed securities;
(ii) asset-backed securities; (iii) zero coupon, pay-in-kind or deferred payment
securities; and (iv) variable and floating rate instruments.
Any assets of the Fund not invested in the fixed income securities described
above may be invested in: (i) convertible securities; (ii) preferred stocks;
(iii) equity securities; (iv) investment grade fixed income securities;
(v) money market securities; (vi) securities issued on a when-issued and
delayed-delivery basis, including TBA mortgage-backed securities; (vii) forward
foreign currency contracts; and (viii) Yankee obligations. In addition, the Fund
may purchase or write options, futures and options on futures. The Fund may also
borrow money, invest in illiquid securities and shares of other investment
companies, and lend its securities to qualified buyers.
The advisers may vary the average maturity of the securities in the Fund
without limit, and there is no restriction on the maturity of any individual
security.
This Statement of Additional Information sets forth a description of the
bond rating categories of several NRSROs. The ratings established by each NRSRO
represents its opinion of the safety of principal and interest payments (and not
the market risk) of bonds and other fixed income securities it undertakes to
rate at the time of issuance. Ratings are not absolute standards of quality, and
may not reflect changes in an issuer's creditworthiness. Accordingly, although
the advisers will consider ratings, they will perform their own analyses and
will not rely principally on ratings. The advisers will consider, among other
things, the price of the security and the financial history and condition, the
prospects and the management of an issuer in selecting securities for the Fund.
The achievement of the Fund's investment objective may be more dependent on
the adviser's own credit analysis than would be the case if the Fund invested in
higher rated securities. There is no bottom limit on the ratings of high yield
securities that may be purchased or held by the Fund.
SEI VP INTERNATIONAL FIXED INCOME FUND--The SEI VP International Fixed
Income Fund seeks to provide capital appreciation and current income through
investment primarily in investment grade, non-U.S. dollar denominated
government, corporate, mortgage-backed and asset-backed fixed income securities.
S-9
<PAGE>
Under normal circumstances, at least 65% of the International Fixed Income
Fund's assets will be invested in investment grade foreign government and
foreign corporate, mortgage, and/or asset-backed fixed income securities of
issuers located in at least three countries other than the United States.
The SEI VP International Fixed Income Fund will invest primarily in:
(i) fixed income securities issued or guaranteed by a foreign government or one
of its agencies, authorities, instrumentalities or political subdivisions;
(ii) fixed income securities issued or guaranteed by supranational entities;
(iii) fixed income securities issued by foreign or multinational corporations;
(iv) convertible securities issued by foreign or multinational corporations;
(v) fixed income securities issued by foreign banks or bank holding companies;
(vi) asset-backed securities; and (vii) mortgage-backed securities. All such
investments will be in investment grade securities denominated in various
currencies, including the Euro. Investment grade securities are rated in one of
the highest four rating categories by an NRSRO or determined by the adviser to
be of comparable quality at the time of purchase.
The Fund expects to be fully invested in the primary investments described
above, but may invest in obligations issued or guaranteed as to principal and
interest by the United States Government, its agencies or instrumentalities
("U.S. Government securities"), swaps, options and futures. The Fund may also
purchase and write options to buy or sell futures contracts, purchase securities
on a when-issued or delayed delivery basis and engage in short selling. The Fund
may invest up to 10% of its total assets in illiquid securities. Furthermore,
although the Fund will concentrate its investments in relatively developed
countries, the Fund may invest up to 20% of its assets in fixed income
securities of issuers in, or denominated in the currencies of, developing
countries and that are investment-grade securities or determined by the advisers
to be of comparable quality to such securities and debt obligations at the time
of purchase.
For temporary defensive purposes, when the advisers determine that market
conditions warrant, the Fund may invest up to 100% of its assets in U.S.
dollar-denominated fixed income securities or debt obligations and the following
domestic and foreign money market instruments: government obligations,
certificates of deposit, bankers' acceptances, time deposits, commercial paper,
short-term corporate debt issues and repurchase agreements, and may hold a
portion of their assets in cash. In addition, the Fund may invest in the
foregoing instruments and hold cash for liquidity purposes.
Under normal circumstances, the portfolio turnover rate for this Fund is
expected to exceed 200% per year. Higher portfolio turnover rates can result in
corresponding increases in portfolio transaction costs and taxes. The Fund will
not consider portfolio turnover a limiting factor in implementing investment
decisions which are consistent with the Fund's objectives and policies.
SEI VP EMERGING MARKETS DEBT FUND--The investment objective of the SEI VP
Emerging Markets Debt Fund is to maximize total return.
Under normal circumstances, at least 80% of the SEI VP Emerging Markets Debt
Fund's total assets will be invested in debt securities of government,
government-related and corporate issuers in emerging market countries and of
entities organized to restructure the outstanding debt of such issuers. The Fund
defines an emerging market country as any country the economy and market of
which the World Bank or the United Nations considers to be emerging or
developing. The Fund's advisers consider emerging market issuers to be companies
the securities of which are principally traded in the capital markets of
emerging market countries; that derive at least 50% of their total revenue from
either goods produced or services rendered in emerging market countries,
regardless of where the securities of such companies are principally traded;
that are organized under the laws of and have a principal office in an emerging
market country; or that are government issuers located in an emerging market
country.
Emerging market country fixed income securities in which the SEI VP Emerging
Markets Debt Fund may invest are U.S. dollar-denominated and non-U.S.
dollar-denominated corporate and government debt securities, including bonds,
notes, bills, debentures, convertible securities, warrants, bank debt
obligations, short-term paper, mortgage and other asset-backed securities,
preferred stock, loan participations and
S-10
<PAGE>
assignments and interests issued by entities organized and operated for the
purpose of restructuring the investment characteristics of instruments issued by
emerging market country issuers. The Fund may invest in Brady Bonds, which are
debt securities issued by debtor nations to restructure their outstanding
external indebtedness, and which comprise a significant portion of the emerging
debt market.
The Fund's investments in high yield government, government-related and
restructured debt securities will consist of: (i) debt securities or obligations
issued or guaranteed by governments, governmental agencies or instrumentalities
and political subdivisions located in emerging market countries (including
participations in loans between governments and financial institutions);
(ii) debt securities or obligations issued by government-owned, controlled or
sponsored entities located in emerging market countries (including
participations in loans between governments and financial institutions); and
(iii) interests in structured securities of issuers organized and operated for
the purpose of restructuring the investment characteristics of instruments
issued by any of the entities described above (collectively, "High Yield Foreign
Sovereign Debt Securities"). Even though many of these securities are issued by
governmental issuers, they may still be considered junk bonds on account of the
governmental issuer's poor credit rating. The Fund may also purchase investment
grade obligations of the foregoing governmental issuers.
The Fund's investments in debt securities of corporate issuers in emerging
market countries may include high yield or investment grade debt securities or
other obligations issued by: (i) banks located in emerging market countries or
by branches of emerging market country banks located in other emerging market
countries; or (ii) companies organized under the laws of an emerging market
country.
The Fund expects to be fully invested in the primary investments described
above, but may invest up to 10% of its total assets in common stock, convertible
securities, warrants or other equity securities when consistent with the Fund's
objective. The Fund will generally hold such equity investments as a result of
purchases of unit offerings of fixed-income securities which include such
securities or in connection with an actual or proposed conversion or exchange of
fixed income securities. The Fund may also enter into repurchase agreements and
reverse repurchase agreements, may purchase when-issued and delayed-delivery
securities, lend portfolio securities and invest in shares of other investment
companies. The Fund may purchase restricted securities and may invest up to 15%
of the value of its total assets in illiquid securities. The Fund may invest in
options and futures for hedging purposes, and may enter into swaps or related
transactions. The Fund may invest in receipts, zero coupon securities,
pay-in-kind bonds, Eurobonds, dollar rolls, and deferred payment securities.
The securities in which the Fund will invest will not be required to meet a
minimum rating standard and may not be rated for creditworthiness by any
internationally recognized credit rating organization. Generally, the Fund's
investments are expected to be in the lower and lowest rating categories
established by internationally recognized credit rating organizations or
determined to be of comparable quality. Such securities, commonly known as "junk
bonds," involve significantly greater risks, including price volatility and the
risk of default of payment of interest and principal, than higher rated
securities.
For temporary defensive purposes, when the advisers determine that market
conditions warrant, the Fund may invest up to 100% of its assets in U.S.
dollar-denominated fixed income securities or debt obligations and the following
domestic and foreign money market instruments: government obligations,
certificates of deposit, bankers' acceptances, time deposits, commercial paper,
short-term corporate debt issues and repurchase agreements, and may hold a
portion of their assets in cash. In addition, the Fund may invest in the
foregoing instruments and hold cash for liquidity purposes.
There is no limit on the percentage of the Fund's assets that may be
invested in non-U.S. dollar denominated securities. However, it is expected that
the majority of the Fund's assets will be denominated in U.S. dollars.
S-11
<PAGE>
SEI VP PRIME OBLIGATION FUND--The SEI VP Prime Obligation Fund seeks to
preserve principal value and maintain a high degree of liquidity while providing
current income.
Under normal market conditions, the Fund invests exclusively in obligations
of U.S. issuers (excluding foreign branches of U.S. banks or U.S. branches of
foreign banks) consisting of: (i) commercial paper rated, at the time of
investment, in the highest short-term rating category by two or more NRSROs or
one NRSRO if only one NRSRO has rated the security or, if not rated, determined
by the Adviser to be of comparable quality; (ii) obligations including
certificates of deposit (time deposits, bankers' acceptances and bank notes) of
U.S. commercial banks or savings and loan institutions having total assets of
$500 million or more as shown on their last published financial statements at
the time of investment and that are insured by the Federal Deposit Insurance
Corporation; (iii) corporate obligations with a remaining term of not more than
397 days of issuers that issue commercial paper of comparable priority and
security meeting the above ratings or, if not rated, determined by the Adviser
to be of comparable quality; (iv) short-term obligations issued by state and
local governmental issuers which are rated, at the time of investment, in the
highest municipal bond rating categories by at least two NRSROs, or, if not
rated, determined by the Adviser to be of comparable quality, and which carry
yields that are competitive with those of other types of money market
instruments of comparable quality; (v) U.S. Treasury obligations and obligations
issued or guaranteed as to principal and interest by the agencies or
instrumentalities of the U.S. Government; and (vi) repurchase agreements
involving any of the foregoing obligations.
There can be no assurance that any Fund will meet its objective.
DESCRIPTION OF PERMITTED INVESTMENTS AND RISK FACTORS
AMERICAN DEPOSITARY RECEIPTS, EUROPEAN DEPOSITARY RECEIPTS, CONTINENTAL
DEPOSITARY RECEIPTS AND GLOBAL DEPOSITARY RECEIPTS--ADRs are securities,
typically issued by a U.S. financial institution (a "depositary"), that evidence
ownership interests in a security or a pool of securities issued by a foreign
issuer and deposited with the depositary. ADRs include American Depositary
Shares and New York Shares. EDRs, which are sometimes referred to as Continental
Depositary Receipts ("CDRs"), are securities, typically issued by a non-U.S.
financial institution, that evidence ownership interests in a security or a pool
of securities issued by either a U.S. or foreign issuer. GDRs are issued
globally and evidence a similar ownership arrangement. Generally, ADRs are
designed for trading in the U.S. securities market, EDRs are designed for
trading in European securities market and GDRs are designed for trading in
non-U.S. securities markets. ADRs, EDRs, CDRs and GDRs may be available for
investment through "sponsored" or "unsponsored" facilities. A sponsored facility
is established jointly by the issuer of the security underlying the receipt and
a depositary, whereas an unsponsored facility may be established by a depositary
without participation by the issuer of the reciept's underlying security.
Holders of an unsponsored depositary receipt generally bear all the costs of the
unsponsored facility. The depositary of an unsponsored facility frequently is
under no obligation to distribute shareholder communications received from the
issuer of the deposited security or to pass through to the holders of the
receipts voting rights with respect to the deposited securities.
ASSET-BACKED SECURITIES--Asset-backed securities are secured by non-mortgage
assets such as company receivables, truck and auto loans, leases and credit card
receivables. Such securities are generally issued as pass-through certificates,
which represent undivided fractional ownership interests in the underlying pools
of assets. Such securities also may be debt instruments, which are also known as
collateralized obligations and are generally issued as the debt of a special
purpose entity, such as a trust, organized solely for the purpose of owning such
assets and issuing such debt. Credit support for asset-backed securities may be
based on the underlying assets and/or provided through credit enhancements by a
third party. Credit enhancement techniques include letters of credit, insurance
bonds, limited guarantees (which are generally provided by the issuer),
senior-subordinated structures and overcollateralization. The SEI VP Core Fixed
Income, SEI VP Bond Index, SEI VP High Yield Bond, SEI VP Prime Obligation Fund,
SEI VP International Fixed Income, and SEI VP Emerging Markets Debt Funds may
invest in asset-backed
S-12
<PAGE>
securities. A Fund may also invest in other asset-backed securities that may be
created in the future if the Sub-Advisers determine that they are suitable.
Asset-backed securities are not issued or guaranteed by the United States
Government or its agencies or instrumentalities; however, the payment of
principal and interest on such obligations may be guaranteed up to certain
amounts and for a certain period by a letter of credit issued by a financial
institution (such as a bank or insurance company) unaffiliated with the issuers
of such securities. The purchase of asset-backed securities raises risk
considerations peculiar to the financing instruments underlying such securities.
For example, there is a risk that another party could acquire an interest in the
obligations superior to that of the holders of the asset-backed securities.
There also is the possibility that recoveries on repossessed collateral may not,
in some cases, be available to support payments on those securities.
Asset-backed securities entail prepayment risk, which may vary depending on the
type of asset, but is generally less than the prepayment risk associated with
mortgage-backed securities. In addition, credit card receivables are unsecured
obligations of the card holder.
The market for asset-backed securities is at a relatively early stage of
development. Accordingly, there may be limited secondary market for such
securities.
BANKERS' ACCEPTANCES--a bill of exchange or time draft drawn on and accepted
by a commercial bank. It is used by corporations to finance the shipment and
storage of goods and to furnish dollar exchange. Maturities are generally six
months or less.
BRADY BONDS--Certain debt obligations, customarily referred to as "Brady
Bonds," are created through the exchange of existing commercial bank loans to
foreign entities for new obligations in connection with a debt restructuring.
Brady Bonds have only been issued since 1989, and, accordingly, do not have a
long payment history. In addition, they are issued by governments that may have
previously defaulted on the loans being restructured by the Brady Bonds, so are
subject to the risk of default by the issuer. They may be fully or partially
collateralized or uncollateralized and issued in various currencies (although
most are U.S. dollar denominated) and they are actively traded in the
over-the-counter secondary market. U.S. dollar-denominated, collateralized Brady
Bonds, which may be fixed rate par bonds or floating rate discount bonds, are
generally collateralized in full as to principal due at maturity by U.S.
Treasury zero coupon obligations which have the same maturity as the Brady
Bonds. Certain interest payments on these Brady Bonds may be collateralized by
cash or securities in an amount that, in the case of fixed rate bonds, is
typically equal to between 12 and 18 months of rolling interest payments or, in
the case of floating rate bonds, initially is typically equal to between 12 and
18 months rolling interest payments based on the applicable interest rate at
that time and is adjusted at regular intervals thereafter with the balance of
interest accruals in each case being uncollateralized. Payment of interest and
(except in the case of principal collateralized Brady Bonds) principal on Brady
Bonds with no or limited collateral depends on the willingness and ability of
the foreign government to make payment. In the event of a default on
collateralized Brady Bonds for which obligations are accelerated, the collateral
for the payment of principal will not be distributed to investors, nor will such
obligations be sold and the proceeds distributed. The collateral will be held by
the collateral agent to the scheduled maturity of the defaulted Brady Bonds,
which will continue to be outstanding, at which time the face amount of the
collateral will equal the principal payments which would have then been due on
the Brady Bonds in the normal course.
Based upon current market conditions, a Fund would not intend to purchase
Brady Bonds which, at the time of investment, are in default as to payment.
However, in light of the residual risk of Brady Bonds and, among other factors,
the history of default with respect to commercial bank loans by public and
private entities of countries issuing Brady Bonds, investments in Brady Bonds
are to be viewed as speculative. A substantial portion of the Brady Bonds and
other sovereign debt securities in which the SEI VP Emerging Markets Debt Fund
invests are likely to be acquired at a discount, which involves certain
additional considerations.
S-13
<PAGE>
Sovereign obligors in developing and emerging market countries are among the
world's largest debtors to commercial banks, other governments, international
financial organizations and other financial institutions. These obligors have in
the past experienced substantial difficulties in servicing their external debt
obligations, which led to defaults on certain obligations and the restructuring
of certain indebtedness. Restructuring arrangements have included, among other
things, reducing and rescheduling interest and principal payments by negotiating
new or amended credit agreements or converting outstanding principal and unpaid
interest to Brady Bonds, and obtaining new credit to finance interest payments.
Holders of certain foreign sovereign debt securities may be requested to
participate in the restructuring of such obligations and to extend further loans
to their issuers. There can be no assurance that the Brady Bonds and other
foreign sovereign debt securities in which the Fund may invest will not be
subject to similar restructuring arrangements or to requests for new credit
which may adversely affect a Fund's holdings. Furthermore, certain participants
in the secondary market for such debt may be directly involved in negotiating
the terms of these arrangements and may therefore have access to information not
available to other market participants.
CERTIFICATES OF DEPOSIT--negotiable interest bearing instruments with
specific maturities. Certificates of deposit are issued by banks and savings and
loan institutions in exchange for the deposit of funds and normally can be
traded in the secondary market, prior to maturity. Certificates of deposit have
penalties for early withdrawal.
COMMERCIAL PAPER--the term used to designate unsecured short-term promissory
notes issued by corporations and other entities. Maturities on these issues vary
from a few days to nine months. (See "Description of Ratings".)
CONSTRUCTION LOANS--in general, are mortgages on multifamily homes that are
insured by the Federal Housing Administration (FHA) under various federal
programs of the National Housing Act of 1934 and its amendments. Several FHA
programs have evolved to ensure the construction financing and permanent
mortgage financing on multifamily residences, nursing homes, elderly residential
facilities, and health care units. Project loans typically trade in two forms:
either as FHA- or Government National Mortgage Association ("GNMA")-insured
pass-through securities. In this case, a qualified issuer issues the
pass-through securities while holding the underlying mortgage loans as
collateral. Regardless of form, all projects are government-guaranteed by the
U.S. Department of Housing and Urban Development (HUD) through the FHA insurance
fund. The credit backing of all FHA and GNMA projects derives from the FHA
insurance fund, and so projects issued in either form enjoy the full faith and
credit backing of the U.S. Government.
Most project pools consist of one large mortgage loan rather than numerous
smaller mortgages, as is typically the case with agency single-family mortgage
securities. As such, prepayments on projects are driven by the incentives most
mortgagors have to refinance, and are very project-specific in nature. However,
to qualify for certain government programs, many project securities contain
specific prepayment restrictions and penalties.
Under multifamily insurance programs, the government insures the
construction financing of projects as well as the permanent mortgage financing
on the completed structures. This is unlike the single-family mortgage market,
in which the government only insures mortgages on completed homes. Investors
purchase new projects by committing to fund construction costs on a monthly
basis until the project is built. Upon project completion, an investors
construction loan commitments are converted into a proportionate share of the
final permanent project mortgage loan. The construction financing portion of a
project trades in the secondary market as an insured Construction Loan
Certificate (CLC). When the project is completed, the investor exchanges all the
monthly CLCs for an insured Permanent Loan Certificate (PLC). The PLC is an
insured pass-through security backed by the final mortgage on the completed
property. As such, PLCs typically have a thirty-five to forty year maturity,
depending on the type of final project. There are vastly more PLCs than CLCs in
the market, owing to the long economic lives of the project structures. While
neither CLCs or PLCs are as liquid as agency single-family mortgage securities,
both are traded on
S-14
<PAGE>
the secondary market and would generally not be considered illiquid. The benefit
to owning these securities is a relatively high yield combined with significant
prepayment protection, which generally makes these types of securities more
attractive when prepayments are expected to be high in the mortgage market. CLCs
typically offer a higher yield due to the fact that they are somewhat more
administratively burdensome to account for.
CONVERTIBLE SECURITIES--Convertible securities are corporate securities that
are exchangeable for a set number of another security at a prestated price.
Convertible securities typically have characteristics similar to both fixed
income and equity securities. Because of the conversion feature, the market
value of a convertible security tends to move with the market value of the
underlying stock. As a result, a Fund's selection of convertible securities is
based, to a great extent, on the potential for capital appreciation that may
exist in the underlying stock. The value of a convertible security is also
affected by prevailing interest rates, the credit quality of the issuer, and any
call provisions.
EQUITY SECURITIES--Equity securities represent ownership interests in a
company or corporation and consist of common stock, preferred stock, warrants
and other rights to acquire such instruments. Equity securities may be listed on
exchanges or traded in the over-the-counter market. Investments in common stocks
are subject to market risks which may cause their prices to fluctuate over time.
The value of convertible securities is also affected by prevailing interest
rates, the credit quality of the issuer and any call provisions. Changes in the
value of fund securities will not necessarily affect cash income derived from
these securities, but will affect a Fund's net asset value.
Investments in the equity securities of small capitalization companies
involves greater risk than is customarily associated with larger, more
established companies due to the greater business risks of small size, limited
markets and financial resources, narrow product lines and the frequent lack of
depth of management. The securities of small companies are often traded
over-the-counter and may not be traded in volumes typical on a national
securities exchange. Consequently, the securities of smaller companies may have
limited market stability and may be subject to more abrupt or erratic market
movements than securities of larger, more established growth companies or the
market averages in general.
THE EURO--On January 1, 1999, the European Monetary Union (EMU) implemented
a new currency unit, the Euro, which is reshaping financial markets, banking
systems and monetary policies in Europe and other parts of the world. The
countries that initially converted or tied their currencies to the Euro include
Austria, Belgium, France, Germany, Luxembourg, the Netherlands, Ireland,
Finland, Italy, Portugal and Spain. Implementation of this plan means that
financial transactions and market information, including share quotations and
company accounts, in participating countries will be denominated in euros. A
significant percentage of the stock exchange capitalization of the total
European market may be reflected in Euros, and participating governments will
issue their bonds in Euros. Monetary policy for participating countries will be
uniformly managed by a new central bank, the European Central Bank (ECB).
Although it is not possible to predict the eventual impact of the Euro
implementation plan on the Funds, the transition to the Euro has changed the
economic environment and behavior of investors, particularly in European
markets. For example, investors may begin to view those countries participating
in the EMU as a single entity, and the Adviser may need to adapt its investment
strategy accordingly. The process of implementing the Euro also may adversely
affect financial markets world-wide and may result in changes in the relative
strength and value of the U.S. dollar or other major currencies, as well as
possible adverse tax consequences. The ongoing transition to the Euro is likely
to have a significant impact on fiscal and monetary policy in the participating
countries and may produce unpredictable effects on trade and commerce generally.
These resulting uncertainties could create increased volatility in financial
markets world-wide.
FIXED INCOME SECURITIES--Fixed income securities consist primarily of debt
obligations issued by governments, corporations, municipalities and other
borrowers, but may also include structured securities that provide for
participation interests in debt obligations. The market value of fixed income
S-15
<PAGE>
investments will generally change in response to interest rate changes and other
factors. During periods of falling interest rates, the values of outstanding
fixed income securities generally rise. Conversely, during periods of rising
interest rates, the values of such securities generally decline. Moreover, while
securities with longer maturities tend to produce higher yields, the prices of
longer maturity securities are also subject to greater market fluctuations as a
result of changes in interest rates. Changes by recognized agencies in the
rating of any fixed income security and in the ability of an issuer to make
payments of interest and principal also affect the value of these investments.
Changes in the value of these securities will not affect cash income derived
from these securities, but will affect a Fund's net asset value.
Fixed income securities are considered investment grade if they are rated in
one of the four highest rating categories by an NRSRO, or, if not rated, are
determined to be of comparable quality by a Fund's Sub-Advisers. The "Appendix"
to this Prospectus sets forth a description of the bond rating categories of
several NRSROs. Ratings of each NRSRO represents its opinion of the safety of
principal and interest payments (and not the market risk) of bonds and other
fixed income securities it undertakes to rate at the time of issuance. Ratings
are not absolute standards of quality and may not reflect changes in an issuer's
creditworthiness. Fixed income securities rated BBB or Baa lack outstanding
investment characteristics, and have speculative characteristics as well. In the
event a security owned by a Fund is downgraded, the adviser will review the
situation and take appropriate action with regard to the security.
FOREIGN CURRENCY TRANSACTIONS--Certain of the Funds may enter into forward
foreign currency contracts to manage foreign currency exposure and as a hedge
against possible variations in foreign exchange rates. The Funds may enter into
forward foreign currency contracts to hedge a specific security transaction or
to hedge a portfolio position. These contracts may be bought or sold to protect
the Funds, to some degree, against possible losses resulting from an adverse
change in the relationship between foreign currencies and the U.S. dollar. The
Funds also may invest in foreign currency futures and in options on currencies.
FOREIGN AND EMERGING MARKET SECURITIES--may consist of obligations of
foreign branches of U.S. banks and foreign banks, including European
Certificates of Deposit, European Time Deposits, Canadian Time Deposits and
Yankee Certificates of Deposit and investments in Canadian Commercial Paper,
foreign securities and Europaper. In addition, a Fund may invest in ADRs traded
on registered exchanges or NASDAQ. While a Fund expects to invest primarily in
sponsored ADRs, a joint arrangement between the issuer and the depositary, some
ADRs may be unsponsored. These instruments may subject a Fund to investment
risks that differ in some respects from those related to investments in
obligations of U.S. domestic issuers. Such risks include future adverse
political and economic developments, the possible imposition of withholding
taxes on interest or other income, possible seizure, nationalization, or
expropriation of foreign deposits, the possible establishment of exchange
controls or taxation at the source, greater fluctuations in value due to changes
in the exchange rates, or the adoption of other foreign governmental
restrictions which might adversely affect the payment of principal and interest
on such obligations, less uniformity in accounting and reporting requirements,
the possibility that there will be less information on such securities and their
issuers available to the public, the difficulty of obtaining or enforcing court
judgments abroad, restrictions on foreign investments in other jurisdictions,
difficulties in effecting repatriation of capital invested abroad and
difficulties in transaction settlements and the effect of delay on shareholder
equity. Foreign securities may be subject to foreign taxes, and may be less
marketable than comparable U.S. securities. The value of a Fund's investments
denominated in foreign currencies will depend on the relative strengths of those
currencies and the U.S. dollar, and a Fund may be affected favorably or
unfavorably by changes in the exchange rates or exchange or currency control
regulations between foreign currencies and the U.S. dollar. Changes in foreign
currency exchange rates also may 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. Such
investments may also entail higher custodial fees and sales commissions than
domestic investments. Foreign issuers of securities or obligations are often
subject to accounting treatment and engage in business practices different from
those respecting domestic issuers of similar securities or obligations. Foreign
branches of
S-16
<PAGE>
U.S. banks and foreign banks may be subject to less stringent reserve
requirements than those applicable to domestic branches of U.S. banks.
A Fund's investments in emerging markets can be considered speculative, and
therefore may offer higher potential for gains and losses than investments in
developed markets of the world. With respect to any emerging country, there may
be a greater potential for nationalization, expropriation or confiscatory
taxation, political changes, government regulation, social instability or
diplomatic developments (including war) which could affect adversely the
economies of such countries or investments in such countries. The economies of
developing countries generally are heavily dependent upon international trade
and, accordingly, have been and may continue to be adversely affected by trade
barriers, exchange or currency controls, managed adjustments in relative
currency values and other protectionist measures imposed or negotiated by the
countries with which they trade.
In addition to the risks of investing in emerging market country debt
securities, a Fund's investment in government, government-related and
restructured debt instruments are subject to special risks, including the
inability or unwillingness to repay principal and interest, requests to
reschedule or restructure outstanding debt, and requests to extend additional
loan amounts. A Fund may have limited recourse in the event of default on such
debt instruments.
FORWARD FOREIGN CURRENCY CONTRACTS--involve an obligation to purchase or
sell a specified currency at a future date at a price set at the time of the
contract. A Fund may enter into a contract to sell, for a fixed amount of U.S.
dollars or other appropriate currency, the amount of foreign currency
approximating the value of some or all of the Fund's securities denominated in
such foreign currency. Forward currency contracts do not eliminate fluctuations
in the values of fund securities but rather allow a Fund to establish a rate of
exchange for a future point in time. At the maturity of a forward contract, the
Fund may either sell a fund security and make delivery of the foreign currency,
or it may retain the security and terminate its contractual obligation to
deliver the foreign currency by purchasing an "offsetting" contract with the
same currency trader, obligating it to purchase, on the same maturity date, the
same amount of the foreign currency. The Fund may realize a gain or loss from
currency transactions.
When entering into a contract for the purchase or sale of a security in a
foreign currency, a Fund may enter into a foreign forward currency contract for
the amount of the purchase or sale price to protect against variations, between
the date the security is purchased or sold and the date on which payment is made
or received, in the value of the foreign currency relative to the United States
Dollar or other foreign currency.
Also, when a Sub-Adviser anticipates that a particular foreign currency may
decline substantially relative to the United States dollar or other leading
currencies, in order to reduce risk, a Fund may enter into a forward contract to
sell, for a fixed amount, the amount of foreign currency approximating the value
of its securities denominated in such foreign currency. With respect to any such
forward foreign currency contract, it generally will not be possible to match
precisely the amount covered by that contract and the value of the securities
involved due to changes in the values of such securities resulting from market
movements between the date the forward contract is entered into and the date it
matures. In addition, while forward currency contracts may offer protection from
losses resulting from declines in value of a particular foreign currency, they
also limit potential gains which might result from increases in the value of
such currency. A Fund will also incur costs in connection with forward foreign
currency contracts and conversions of foreign currencies into United States
dollars. A Fund will place assets in a segregated account to assure that its
obligations under forward foreign currency contracts are covered.
FUTURES AND OPTIONS ON FUTURES--Futures contracts provide for the future
sale by one party and purchase by another party of a specified amount of a
specific security at a specified future time and at a specified price. An option
on a futures contract gives the purchaser the right, in exchange for a premium,
to assume a position in a futures contract at a specified exercise price during
the term of the option. A Fund may use futures contracts and related options for
BONA FIDE hedging purposes, to offset changes in
S-17
<PAGE>
the value of securities held or expected to be acquired or be disposed of, to
minimize fluctuations in foreign currencies, or to gain exposure to a particular
market or instrument. A Fund will minimize the risk that it will be unable to
close out a futures contract by only entering into futures contracts which are
traded on national futures exchanges.
An index futures contract is a bilateral agreement pursuant to which two
parties agree to take or make delivery of an amount of cash equal to a specified
dollar amount times the difference between the index value at the close of
trading of the contract and the price at which the futures contract is
originally struck. No physical delivery of the securities comprising the Index
is made; generally contracts are closed out prior to the expiration date of the
contract.
In order to avoid leveraging and related risks, when a Fund invests in
futures contracts, it will cover its position by depositing an amount of cash or
liquid securities, equal to the market value of the futures positions held, less
margin deposits, in a segregated account and that amount will be marked to
market on a daily basis.
There are risks associated with these activities, including the following:
(1) the success of a hedging strategy may depend on an ability to predict
movements in the prices of individual securities, fluctuations in markets and
movements in interest rates; (2) there may be an imperfect or no correlation
between the changes in market value of the securities held by the Fund and the
prices of futures and options on futures; (3) there may not be a liquid
secondary market for a futures contract or option; (4) trading restrictions or
limitations may be imposed by an exchange; and (5) government regulations may
restrict trading in futures contracts and futures options.
A Fund may enter into futures contracts and options on futures contracts
traded on an exchange regulated by the Commodities Futures Trading Commission
("CFTC"), as long as, to the extent that such transactions are not for "bona
fide hedging purposes," the aggregate initial margin and premiums on such
positions (excluding the amount by which such options are in the money) do not
exceed 5% of a Fund's net assets.
HIGH YIELD FOREIGN SOVEREIGN DEBT SECURITIES--Investing in fixed and
floating rate high yield foreign sovereign debt securities will expose the SEI
VP Emerging Markets Debt Fund to the direct or indirect consequences of
political, social or economic changes in the countries that issue the
securities. The ability of a foreign sovereign obligor to make timely payments
on its external debt obligations will also be strongly influenced by the
obligor's balance of payments, including export performance, its access to
international credits and investments, fluctuations in interest rates and the
extent of its foreign reserves. Countries such as those in which the Fund may
invest have historically experienced, and may continue to experience, high rates
of inflation, high interest rates, exchange rate or trade difficulties and
extreme poverty and unemployment. Many of these countries are also characterized
by political uncertainty or instability. Additional factors which may influence
the ability or willingness to service debt include, but are not limited to, a
country's cash flow situation, the availability of sufficient foreign exchange
on the date a payment is due, the relative size of its debt service burden to
the economy as a whole, and its government's policy towards the International
Monetary Fund, the World Bank and other international agencies. A country whose
exports are concentrated in a few commodities or whose economy depends on
certain strategic imports could be vulnerable to fluctuations in international
prices of these commodities or imports. To the extent that a country receives
payment for its exports in currencies other than dollars, its ability to make
debt payments denominated in dollars could be adversely affected. If a foreign
sovereign obligor cannot generate sufficient earnings from foreign trade to
service its external debt, it may need to depend on continuing loans and aid
from foreign governments, commercial banks and multilateral organizations, and
inflows of foreign investment. The commitment on the part of these foreign
governments, multilateral organizations and others to make such disbursements
may be conditioned on the government's implementation of economic reforms and/or
economic performance and the timely service of its obligations. Failure to
implement such reforms, achieve such levels of economic performance or repay
S-18
<PAGE>
principal or interest when due may result in the cancellation of such third
parties' commitments to lend funds, which may further impair the obligor's
ability or willingness to timely service its debts.
ILLIQUID SECURITIES--Illiquid securities are securities that cannot be
disposed of within seven business days at approximately the price at which they
are being carried on the Fund's books. Illiquid securities include demand
instruments with a demand notice period exceeding seven days, securities for
which there is no active secondary market, and repurchase agreements with
durations over 7 days in length.
The SEI VP Emerging Markets Equity Fund's Sub-Advisers believe that
carefully selected investments in joint ventures, cooperatives, partnerships,
private placements, unlisted securities and other similar situations
(collectively, "special situations") could enhance its capital appreciation
potential. Investments in special situations may be illiquid, as determined by
the SEI VP Emerging Markets Equity Fund's Sub-Advisers based on criteria
approved by the Board of Trustees. To the extent these investments are deemed
illiquid, the SEI VP Emerging Markets Equity Fund's investment in them will be
consistent with its 15% restriction on investment in illiquid securities.
INVESTMENT COMPANIES--Because of restrictions on direct investment by U.S.
entities in certain countries, investment in other investment companies may be
the most practical or only manner in which an international and global fund can
invest in the securities markets of those countries. A Fund does not intend to
invest in other investment companies unless, in the judgment of its
Sub-Advisers, the potential benefits of such investments exceed the associated
costs (which includes any investment advisory fees charged by the investment
companies) relative to the benefits and costs associated with direct investments
in the underlying securities.
Investments in closed-end investment companies may involve the payment of
substantial premiums above the net asset value of such issuers' fund securities,
and are subject to limitations under the 1940 Act. A Fund may incur tax
liability to the extent it invests in the stock of a foreign issuer that
constitutes a "passive foreign investment company."
LOAN PARTICIPATIONS AND ASSIGNMENTS--Loan participations are interests in
loans to corporations or governments which are administered by the lending bank
or agent for a syndicate of lending banks, and sold by the lending bank,
financial institution or syndicate member ("intermediary bank"). In a loan
participation, the borrower will be deemed to be the issuer of the participation
interest, except to the extent the Fund derives its rights from the intermediary
bank. Because the intermediary bank does not guarantee a loan participation in
any way, a loan participation is subject to the credit risks generally
associated with the underlying borrower. In the event of the bankruptcy or
insolvency of the borrower, a loan participation may be subject to certain
defenses that can be asserted by such borrower as a result of improper conduct
by the intermediary bank. In addition, in the event the underlying borrower
fails to pay principal and interest when due, the Fund may be subject to delays,
expenses and risks that are greater than those that would have been involved if
the Fund had purchased a direct obligation of such borrower. Under the terms of
a loan participation, the Fund may be regarded as a creditor of the intermediary
bank, (rather than of the underlying borrower), so that the Fund may also be
subject to the risk that the intermediary bank may become insolvent.
Loan assignments are investments in assignments of all or a portion of
certain loans from third parties. When a Fund purchases assignments from lenders
it will acquire direct rights against the borrower on the loan. Since
assignments are arranged through private negotiations between potential
assignees and assignors, however, the rights and obligations acquired by the
Fund may differ from, and be more limited than, those held by the assigning
lender. Loan participations and assignments may be considered liquid, as
determined by the Funds' advisers based on criteria approved by the Board of
Trustees.
LOWER RATED SECURITIES--lower-rated bonds are commonly referred to as "junk
bonds" or high yield/high risk securities. These securities are rated lower than
"Baa" or "BBB" by an NRSRO. Each Fund may invest in securities rated as low as
"C" by Moody's or "D" by S&P. These ratings indicate that the
S-19
<PAGE>
obligations are speculative and may be in default. The SEI VP High Yield Bond,
SEI VP Emerging Markets Debt, and SEI VP Emerging Markets Equity Funds may
invest in lower rated securities (which are also known as "junk bonds"). Fixed
income securities are subject to the risk of an issuer's ability to meet
principal and interest payments on the obligation (credit risk), and may also be
subject to price volatility due to such factors as interest rate sensitivity,
market perception of the creditworthiness of the issuer and general market
liquidity (market risk). Lower rated or unrated (I.E., high yield) securities
are more likely to react to developments affecting market and credit risk than
are more highly rated securities, which primarily react to movements in the
general level of interest rates. Yields and market values of high yield
securities will fluctuate over time, reflecting not only changing interest rates
but the market's perception of credit quality and the outlook for economic
growth. When economic conditions appear to be deteriorating, medium to lower
rated securities may decline in value due to heightened concern over credit
quality, regardless of prevailing interest rates. Investors should carefully
consider the relative risks of investing in high yield securities and understand
that such securities generally are not meant for short-term investing.
The high yield market is relatively new and its growth paralleled a long
period of economic expansion and an increase in merger, acquisition and
leveraged buyout activity. Adverse economic developments can disrupt the market
for high yield securities, and severely affect the ability of issuers,
especially highly leveraged issuers, to service their debt obligations or to
repay their obligations upon maturity which may lead to a higher incidence of
default on such securities. In addition, the secondary market for high yield
securities, which is concentrated in relatively few market makers, may not be as
liquid as the secondary market for more highly rated securities. As a result, a
Fund's Sub-Advisers could find it more difficult to sell these securities or may
be able to sell the securities only at prices lower than if such securities were
widely traded. Furthermore, a Fund may experience difficulty in valuing certain
securities at certain times. Prices realized upon the sale of such lower rated
or unrated securities, under these circumstances, may be less than the prices
used in calculating such Fund's net asset value. Prices for high yield
securities may also be affected by legislative and regulatory developments.
Lower rated or unrated fixed income obligations also present risks based on
payment expectations. If an issuer calls the obligations for redemption, a Fund
may have to replace the security with a lower yielding security, resulting in a
decreased return for investors. If a Fund experiences unexpected net
redemptions, it may be forced to sell its higher rated securities, resulting in
a decline in the overall credit quality of the Fund's investment portfolio and
increasing the exposure of the Fund to the risks of high yield securities.
GROWTH OF HIGH YIELD BOND, HIGH-RISK BOND MARKET. The widespread expansion
of government, consumer and corporate debt within the U.S. economy has made the
corporate sector more vulnerable to economic downturns or increased interest
rates. Further, an economic downturn could severely disrupt the market for lower
rated bonds and adversely affect the value of outstanding bonds and the ability
of the issuers to repay principal and interest.
SENSITIVITY TO INTEREST RATE AND ECONOMIC CHANGES. Lower rated bonds are
very sensitive to adverse economic changes and corporate developments. During an
economic down turn or substantial period of rising interest rates, highly
leveraged issuers may experience financial stress that would adversely affect
their ability to service their principal and interest payment obligations, to
meet projected business goals, and to obtain additional financing. If the issuer
of a bond defaulted on its obligations to pay interest or principal or entered
into bankruptcy proceedings, a Fund may incur losses or expenses in seeking
recovery of amounts owed to it. In addition, periods of economic uncertainty and
change can be expected to result in increased volatility of market prices of
high-yield, high-risk bonds and a Fund's net asset value.
PAYMENT EXPECTATIONS. High-yield, high-risk bonds may contain redemption or
call provisions. If an issuer exercised these provisions in a declining interest
rate market, a Fund would have to replace the security with a lower yielding
security, resulting in a decreased return for investors. Conversely, a high-
yield, high-risk bond's value will decrease in a rising interest rate market, as
will the value of a Fund's
S-20
<PAGE>
assets. If a Fund experiences significant unexpected net redemptions, this may
force it to sell high-yield, high-risk bonds without regard to their investment
merits, thereby decreasing the asset base upon which expenses can be spread and
possibly reducing the Fund's rate of return.
LIQUIDITY AND VALUATION. There may be little trading in the secondary
market for particular bonds, which may affect adversely a Fund's ability to
value accurately or dispose of such bonds. Adverse publicity and investor
perception, whether or not based on fundamental analysis, may decrease the value
and liquidity of high-yield, high-risk bonds, especially in a thin market.
TAXES. A Fund may purchase debt securities (such as zero-coupon or
pay-in-kind securities) that contain original issue discount. Original issue
discount that accretes in a taxable year is treated as earned by a Fund and
therefore is subject to the distribution requirements of the Internal Revenue
Code of 1986, as amended (the "Code"). Because the original issue discount
earned by a Fund in a taxable year may not be represented by cash income, the
Fund may have to dispose of other securities and use the proceeds to make
distributions to shareholders.
MONEY MARKET SECURITIES--Money market securities are dollar and
nondollar-denominated, short-term debt instruments. They consist of: (i)
bankers' acceptances, certificates of deposits, notes and time deposits of U.S.
and foreign banks; (ii) U.S. Treasury obligations and obligations issued or
guaranteed by the agencies and instrumentalities of the U.S. Government: (iii)
commercial paper issued by U.S. and foreign corporations; (iv) repurchase
agreements involving any of the foregoing obligations entered into with banks
and broker-dealers; and (v) foreign government obligations.
MORTGAGE-BACKED SECURITIES--Each of the Funds (except the SEI VP Prime
Obligation Fund) may invest in mortgage-backed securities issued by GNMA and
certain government-related organizations such as Fannie Mae and the Federal Home
Loan Mortgage Corporation ("FHLMC"). In addition, the SEI VP High Yield Bond
Fund may invest in pools of mortgage loans from nongovernmental issuers such as
commercial banks, savings and loan institutions, mortgage bankers, and private
mortgage insurance companies. Mortgage-backed securities are instruments that
entitle the holder to a share of all interest and principal payments from
mortgages underlying the security. The mortgages backing these securities
include conventional fifteen and thirty-year fixed-rate mortgages, graduated
payment mortgages, adjustable rate mortgages and balloon mortgages. During
periods of declining interest rates, prepayment of mortgages underlying
mortgage-backed securities can be expected to accelerate. Prepayment of
mortgages which underlie securities purchased at a premium often results in
capital losses, while prepayment of mortgages purchased at a discount often
results in capital gains. Because of these unpredictable prepayment
characteristics, it is often not possible to predict accurately the average life
or realized yield of a particular issue. Although certain mortgage-backed
securities are guaranteed by a third party or otherwise similarly secured, the
market value of the security, which may fluctuate, is not so secured. If a Fund
purchases a mortgage-backed security at a premium, that portion may be lost if
there is a decline in the market value of the security whether resulting from
changes in interest rates or prepayments in the underlying mortgage collateral.
As with other interest-bearing securities, the prices of such securities are
inversely affected by changes in interest rates. However, though the value of a
mortgage-backed security may decline when interest rates rise, the converse is
not necessarily true since in periods of declining interest rates the mortgages
underlying the securities are prone to prepayment. For this and other reasons, a
mortgage-backed security's stated maturity may be shortened by unscheduled
prepayments on the underlying mortgages and, therefore, it is not possible to
predict accurately the security's return to a Fund. In addition, regular
payments received in respect of mortgage-backed securities include both interest
and principal. No assurance can be given as to the return a Fund will receive
when these amounts are reinvested.
A Fund may also invest in mortgage-backed securities that are collateralized
mortgage obligations structured on pools of mortgage pass-through certificates
or mortgage loans. For purposes of determining the average maturity of a
mortgage-backed security in its investment portfolio, the SEI VP Core Fixed
S-21
<PAGE>
Income Fund will utilize the expected average life of the security, as estimated
in good faith by the Fund's advisers. Unlike most single family residential
mortgages, commercial real estate property loans often contain provisions which
substantially reduce the likelihood that such securities will be prepaid. The
provisions generally impose significant prepayment penalties on loans and, in
some cases there may be prohibitions on principal prepayments for several years
following origination.
GOVERNMENT PASS-THROUGH SECURITIES: These are securities that are issued or
guaranteed by a U.S. Government agency representing an interest in a pool of
mortgage loans. The primary issuers or guarantors of these mortgage-backed
securities are the Fannie Mae and the FHLMC. Fannie Mae and FHLMC obligations
are not backed by the full faith and credit of the U.S. Government as GNMA
certificates are, but Fannie Mae and FHLMC securities are supported by the
instrumentalities' right to borrow from the U.S. Treasury. GNMA, Fannie Mae and
FHLMC each guarantee timely distributions of interest to certificate holders.
GNMA and Fannie Mae also each guarantee timely distributions of scheduled
principal.
There are a number of important differences among the agencies and
instrumentalities of the U.S. Government that issue mortgage-backed securities
and among the securities that they issue. Mortgage-backed securities issued by
GNMA include GNMA Mortgage Pass-Through Certificates (also known as "Ginnie
Maes") which are guaranteed as to the timely payment of principal and interest
by GNMA and are backed by the full faith and credit of the United States. GNMA
certificates also are supported by the authority of GNMA to borrow funds from
the U.S. Treasury to make payments under its guarantee. Mortgage-backed
securities issued by Fannie Mae include Fannie Mae Guaranteed Mortgage Pass-
Through Certificates (also known as "Fannie Maes") which are solely the
obligations of Fannie Mae and are not backed by or entitled to the full faith
and credit of the United States. Fannie Mae is a government-sponsored
organization owned entirely by private stockholders. Fannie Maes are guaranteed
as to timely payment of the principal and interest by Fannie Mae.
Mortgage-backed securities issued by FHLMC include FHLMC Mortgage Participation
Certificates (also known as "Freddie Macs" or "PCs"). FHLMC is a corporate
instrumentality of the United States, created pursuant to an Act of Congress,
which is owned entirely by Federal Home Loan Banks. Freddie Macs are not
guaranteed by the United States or by any Federal Home Loan Banks and do not
constitute a debt or obligation of the United States or of any Federal Home Loan
Bank. Freddie Macs entitle the holder to timely payment of interest, which is
guaranteed by FHLMC. FHLMC guarantees either ultimate collection or timely
payment of all principal payments on the underlying mortgage loans. FHLMC has in
the past guaranteed only the ultimate collection of principal of the underlying
mortgage loan; however, FHLMC now issues mortgage-backed securities (FHLMC Gold
PCs) which also guarantee timely payment of monthly principal reductions.
Government and private guarantees do not extend to the securities' value, which
is likely to vary inversely with fluctuations in interest rates. When FHLMC does
not guarantee timely payment of principal, FHLMC may remit the amount due on
account of its guarantee of ultimate payment of principal at any time after
default on an underlying mortgage, but in no event later than one year after it
becomes payable.
PRIVATE PASS-THROUGH SECURITIES: These are mortgage-backed securities
issued by a non-governmental entity, such as a trust. While they are generally
structured with one or more types of credit enhancement, private pass-through
securities typically lack a guarantee by an entity having the credit status of a
governmental agency or instrumentality.
COMMERCIAL MORTGAGE-BACKED SECURITIES ("CMBS"): CMBS are generally
multi-class or pass-through securities backed by a mortgage loan or a pool of
mortgage loans secured by commercial property, such as industrial and warehouse
properties, office buildings, retail space and shopping malls, multifamily
properties and cooperative apartments. The commercial mortgage loans that
underlie CMBS have certain distinct characteristics. Commercial mortgage loans
are generally not amortizing or not fully amortizing. That is, at their maturity
date, repayment of the remaining principal balance or "balloon" is due and is
repaid through the attainment of an additional loan of sale of the property.
Unlike most single family residential mortgages, commercial real estate property
loans often contain provisions which substantially reduce the
S-22
<PAGE>
likelihood that such securities will be prepaid. The provisions generally impose
significant prepayment penalties on loans and, in some cases there may be
prohibitions on principal prepayments for several years following origination.
COLLATERALIZED MORTGAGE OBLIGATIONS ("CMOS"): CMOs are debt obligations of
multiclass pass-through certificates issued by agencies or instrumentalities of
the U.S. Government or by private originators or investors in mortgage loans. In
a CMO, series of bonds or certificates are usually issued in multiple classes.
Principal and interest paid on the underlying mortgage assets may be allocated
among the several classes of a series of a CMO in a variety of ways. Each class
of a CMO is issued with a specific fixed or floating coupon rate and has a
stated maturity or final distribution date.
REMICS: A REMIC is a CMO that qualifies for special tax treatment under the
Code and invests in certain mortgages principally secured by interests in real
property. Guaranteed REMIC pass-through certificates ("REMIC Certificates")
issued by Fannie Mae or FHLMC represent beneficial ownership interests in a
REMIC trust consisting principally of mortgage loans or Fannie Mae, FHLMC or
GNMA-guaranteed mortgage pass-through certificates.
STRIPPED MORTGAGE-BACKED SECURITIES ("SMBS"): SMBs are usually structured
with two classes that receive specified proportions of the monthly interest and
principal payments from a pool of mortgage securities. One class may receive all
of the interest payments while the other class may receive all of the principal
payments. SMBs are extremely sensitive to changes in interest rates because of
the impact thereon of prepayment of principal on the underlying mortgage
securities. The market for SMBs is not as fully developed as other markets; SMBs
therefore may be illiquid.
PARALLEL PAY SECURITIES; PAC BONDS: Parallel pay CMOs and REMICS are
structured to provide payments of principal on each payment date to more than
one class. These simultaneous payments are taken into account in calculating the
stated maturity date or final distribution date of each class, which must be
retired by its stated maturity date or final distribution date, but may be
retired earlier. It is possible that payments on one class of parallel pay
security may be deferred or subordinated to payments on other classes. Planned
Amortization Class CMOs ("PAC Bonds") generally require payments of a specified
amount of principal on each payment date. PAC Bonds are always parallel pay CMOs
with the required principal payment on such securities having the highest
priority after interest has been paid to all classes.
MORTGAGE DOLLAR ROLLS--Mortgage "dollar rolls" or "covered rolls," are
transactions in which a Fund sells securities (usually mortgage-backed
securities) and simultaneously contracts to repurchase typically in 30 or 60
days, substantially similar, but not identical, securities on a specified future
date. During the roll period, a Fund forgoes principal and interest paid on such
securities. A Fund is compensated by the difference between the current sales
price and the forward price for the future purchase (often referred to as the
"drop") as well as by the interest earned on the cash proceeds of the initial
sale. At the end of the roll commitment period, a Fund may or may not take
delivery of the securities it has contracted to purchase. Mortgage dollar rolls
may be renewed prior to cash settlement and initially may involve only a firm
commitment agreement by the Fund to buy a security. A "covered roll" is a
specific type of mortgage dollar roll for which there is an offsetting cash
position or cash equivalent securities position that matures on or before the
forward settlement date of the mortgage dollar roll transaction. As used herein
the term "mortgage dollar roll" refers to mortgage dollar rolls that are not
"covered rolls." If the broker-dealer to whom the Fund sells the security
becomes insolvent, the Fund's right to repurchase the security may be
restricted. Other risks involved in entering into mortgage dollar rolls include
the risk that the value of the security may change adversely over the term of
the mortgage dollar roll and that the security the Fund is required to
repurchase may be worth less than the security that the Fund originally held.
To avoid any leveraging concerns, the Fund will place liquid securities in a
segregated account in an amount sufficient to cover its repurchase obligation.
S-23
<PAGE>
MUNICIPAL SECURITIES--The SEI VP Core Fixed Income Fund, SEI VP Bond Index
Fund, SEI VP High Yield Bond Fund and SEI VP Prime Obligation Fund may invest in
municipal securities. Municipal securities consist of (i) debt obligations
issued by or on behalf of public authorities to obtain funds to be used for
various public facilities, for refunding outstanding obligations, for general
operating expenses, and for lending such funds to other public institutions and
facilities, and (ii) certain private activity and industrial development bonds
issued by or on behalf of public authorities to obtain funds to provide for the
construction, equipment, repair or improvement of privately operated facilities.
The two principal classifications of Municipal Securities are "general
obligation" and "revenue" issues. General obligation issues are issues involving
the credit of an issuer possessing taxing power and are payable from the
issuer's general unrestricted revenues, although the characteristics and method
of enforcement of general obligation issues may vary according to the law
applicable to the particular issuer. Revenue issues are payable only from the
revenues derived from a particular facility or class of facilities or other
specific revenue source. A Fund may also invest in "moral obligation" issues,
which are normally issued by special purpose authorities. Moral obligation
issues are not backed by the full faith and credit of the state and are
generally backed by the agreement of the issuing authority to request
appropriations from the state legislative body. Municipal Securities include
debt obligations issued by governmental entities to obtain funds for various
public purposes, such as the construction of a wide range of public facilities,
the refunding of outstanding obligations, the payment of general operating
expenses, and the extension of loans to other public institutions and
facilities. Certain private activity bonds that are issued by or on behalf of
public authorities to finance various privately-owned or operated facilities are
included within the term "Municipal Securities." Private activity bonds and
industrial development bonds are generally revenue bonds, the credit and quality
of which are directly related to the credit of the private user of the
facilities.
Municipal Securities may also include general obligation notes, tax
anticipation notes, bond anticipation notes, revenue anticipation notes, project
notes, certificates of indebtedness, demand notes, tax-exempt commercial paper,
construction loan notes and other forms of short-term, tax-exempt loans. Such
instruments are issued with a short-term maturity in anticipation of the receipt
of tax funds, the proceeds of bond placements or other revenues. Project notes
are issued by a state or local housing agency and are sold by the Department of
Housing and Urban Development. While the issuing agency has the primary
obligation with respect to its project notes, they are also secured by the full
faith and credit of the United States through agreements with the issuing
authority which provide that, if required, the federal government will lend the
issuer an amount equal to the principal of and interest on the project notes.
The quality of Municipal Securities, both within a particular classification
and between classifications, will vary, and the yields on Municipal Securities
depend upon a variety of factors, including general money market conditions, the
financial condition of the issuer (or other entity whose financial resources are
supporting the securities), general conditions of the municipal bond market, the
size of a particular offering, the maturity of the obligation and the rating(s)
of the issue. In this regard, it should be emphasized that the ratings of any
NRSRO are general and are not absolute standards of quality. Municipal
Securities with the same maturity, interest rate and rating(s) may have
different yields, while Municipal Securities of the same maturity and interest
rate with different rating(s) may have the same yield.
An issuer's obligations under its Municipal Securities are subject to the
provisions of bankruptcy, insolvency, and other laws affecting the rights and
remedies of creditors, such as the Federal Bankruptcy Code, and laws, if any,
which may be enacted by Congress or state legislatures extending the time for
payment of principal or interest, or both, or imposing other constraints upon
the enforcement of such obligations or upon the ability of municipalities to
levy taxes. The power or ability of an issuer to meet its obligations for the
payment of interest on and principal of its Municipal Securities may be
materially adversely affected by litigation or other conditions.
NON-DIVERSIFICATION--The SEI VP International Fixed Income and SEI VP
Emerging Markets Debt Funds are non-diversified investment companies, as defined
in the Investment Company Act of 1940,
S-24
<PAGE>
as amended (the "1940 Act"), which means that a relatively high percentage of
assets of the Funds may be invested in the obligations of a limited number of
issuers. Although the advisers generally do not intend to invest more than 5% of
each Fund's assets in any single issuer (with the exception of securities which
are issued or guaranteed by a national government), the value of shares of the
Funds may be more susceptible to any single economic, political or regulatory
occurrence than the shares of a diversified investment company would be. The
Funds intend to satisfy the diversification requirements necessary to qualify as
a regulated investment company under the Code, which requires that the Funds be
diversified (I.E., not invest more than 5% of their assets in the securities in
any one issuer) as to 50% of their assets.
OBLIGATIONS OF SUPRANATIONAL AGENCIES--Supranational entities are entities
established through the joint participation of several governments, and include
the Asian Development Bank, the Inter-American Development Bank, International
Bank for Reconstruction and Development (World Bank), African Development Bank,
European Economic Community, European Investment Bank and the Nordic Investment
Bank. The governmental members, or "stockholders," usually make initial capital
contributions to the supranational entity and, in many cases, are committed to
make additional capital contributions if the supranational entity is unable to
repay its borrowings. Obligations of supranational entities may be purchased by
the SEI VP Core Fixed Income, SEI VP International Fixed Income, SEI VP Emerging
Markets Equity and SEI VP International Equity Funds.
OPTIONS--Each of the Funds (except the SEI VP Prime Obligation Fund) may
purchase and write put and call options on indices or securities and enter into
related closing transactions. A put option on a security gives the purchaser of
the option the right to sell, and the writer of the option the obligation to
buy, the underlying security at any time during the option period. A call option
on a security gives the purchaser of the option the right to buy, and the writer
of the option the obligation to sell, the underlying security at any time during
the option period. The premium paid to the writer is the consideration for
undertaking the obligations under the option contract.
Options on an index give the holder the right to receive, upon exercise of
the option, an amount of cash if the closing level of the underlying index is
greater than (or less than, in the case of puts) the exercise price of the
option. Alternatively, a Fund may choose to terminate an option position by
entering into a closing transaction. All settlements are in cash, and gain or
loss depends on price movements in the particular market represented by the
index generally, rather than the price movements in individual securities.
All options written on indices or securities must be covered. When a Fund
writes an option or security on an index, it will establish a segregated account
containing cash or liquid securities in an amount at least equal to the market
value of the option and will maintain the account while the option is open, or
will otherwise cover the transaction. The initial purchase (sale) of an option
contract is an "opening transaction." In order to close out an option position,
a Fund may enter into a "closing transaction," which is simply the sale
(purchase) of an option contract on the same security with the same exercise
price and expiration date as the option contract originally opened. If a Fund is
unable to effect a closing purchase transaction with respect to an option it has
written, it will not be able to sell the underlying security until the option
expires or the Fund delivers the security upon exercise.
A Fund may purchase put and call options on securities to protect against a
decline in the market value of the securities in its portfolio or to anticipate
an increase in the market value of securities that the Fund may seek to purchase
in the future. A Fund purchasing put and call options pays a premium therefor.
If price movements in the underlying securities are such that exercise of the
options would not be profitable for the Fund, loss of the premium paid may be
offset by an increase in the value of the Fund's securities or by a decrease in
the cost of acquisition of securities by the Fund.
A Fund may write covered call options on securities as a means of increasing
the yield on its fund and as a means of providing limited protection against
decreases in its market value. When a Fund writes an option, if the underlying
securities do not increase or decrease to a price level that would make the
exercise
S-25
<PAGE>
of the option profitable to the holder thereof, the option generally will expire
without being exercised and the Fund will realize as profit the premium received
for such option. When a call option of which a Fund is the writer is exercised,
the Fund will be required to sell the underlying securities to the option holder
at the strike price, and will not participate in any increase in the price of
such securities above the strike price. When a put option of which a Fund is the
writer is exercised, the Fund will be required to purchase the underlying
securities at a price in excess of the market value of such securities.
A segregated account is maintained to cover the difference between the
closing price of the index and the exercise price of the index option, expressed
in dollars multiplied by a specified number. Thus, unlike options on individual
securities, the ability of a Fund to enter into closing transactions depends
upon the existence of a liquid secondary market for such transactions.
A Fund may purchase and write options on an exchange or over-the-counter.
Over-the-counter options ("OTC options") differ from exchange-traded options in
several respects. They are transacted directly with dealers and not with a
clearing corporation, and therefore entail the risk of non-performance by the
dealer. OTC options are available for a greater variety of securities and for a
wider range of expiration dates and exercise prices than are available for
exchange-traded options. Because OTC options are not traded on an exchange,
pricing is done normally by reference to information from a market maker. It is
the position of the SEC that OTC options are generally illiquid.
RISK FACTORS. Risks associated with options transactions include: (1) the
success of a hedging strategy may depend on an ability to predict movements in
the prices of individual securities, fluctuations in markets and movements in
interest rates; (2) there may be an imperfect correlation between the movement
in prices of options and the securities underlying them; (3) there may not be a
liquid secondary market for options; and (4) while a Fund will receive a premium
when it writes covered call options, it may not participate fully in a rise in
the market value of the underlying security.
PRIVATIZATIONS--Privatizations are foreign government programs for selling
all or part of the interests in government owned or controlled enterprises. The
ability of a U.S. entity to participate in privatizations in certain foreign
countries may be limited by local law, or the terms on which the Fund may be
permitted to participate may be less advantageous than those applicable for
local investors. There can be no assurance that foreign governments will
continue to sell their interests in companies currently owned or controlled by
them or that privatization programs will be successful.
PUT TRANSACTIONS--Each of the Funds (except the SEI VP Prime Obligation
Fund) may purchase securities at a price which would result in a yield to
maturity lower than generally offered by the seller at the time of purchase when
a Fund can simultaneously acquire the right to sell the securities back to the
seller, the issuer or a third party (the "writer") at an agreed-upon price at
any time during a stated period or on a certain date. Such a right is generally
denoted as a "standby commitment" or a "put." The purpose of engaging in
transactions involving puts is to maintain flexibility and liquidity to permit a
Fund to meet redemptions and remain as fully invested as possible in municipal
securities. A Fund reserves the right to engage in put transactions. The right
to put the securities depends on the writer's ability to pay for the securities
at the time the put is exercised. A Fund would limit its put transactions to
institutions which the Fund's Sub-Advisers believe present minimum credit risks,
and the Fund's Sub-Advisers would use their best efforts to initially determine
and continue to monitor the financial strength of the sellers of the options by
evaluating their financial statements and such other information as is available
in the marketplace. It may, however, be difficult to monitor the financial
strength of the writers because adequate current financial information may not
be available. In the event that any writer is unable to honor a put for
financial reasons, a Fund would be a general creditor (I.E., on a parity with
all other unsecured creditors) of the writer. Furthermore, particular provisions
of the contract between a Fund and the writer may excuse the writer from
repurchasing the securities; for example, a change in the published rating of
the underlying municipal securities or any similar event that has an adverse
effect on the issuer's credit or a provision in the contract that the put will
not be exercised except in certain special cases, for example, to maintain fund
S-26
<PAGE>
liquidity. A Fund could, however, at any time sell the underlying portfolio
security in the open market or wait until the portfolio security matures, at
which time it should realize the full par value of the security.
The securities purchased subject to a put may be sold to third persons at
any time, even though the put is outstanding, but the put itself, unless it is
an integral part of the security as originally issued, may not be marketable or
otherwise assignable. Therefore, the put would have value only to that
particular Fund. Sale of the securities to third parties or lapse of time with
the put unexercised may terminate the right to put the securities. Prior to the
expiration of any put option, a Fund could seek to negotiate terms for the
extension of such an option. If such a renewal cannot be negotiated on terms
satisfactory to the Fund, the Fund could, of course, sell the portfolio
security. The maturity of the underlying security will generally be different
from that of the put. There will be no limit to the percentage of fund
securities that a Fund may purchase subject to a put but the amount paid
directly or indirectly for puts which are not integral parts of the security as
originally issued will not exceed 1/2 of 1% of the value of the total assets of
such Fund calculated immediately after any such put is acquired. For the purpose
of determining the "maturity" of securities purchased subject to an option to
put, and for the purpose of determining the dollar-weighted average maturity of
a Fund including such securities, the Trust will consider "maturity" to be the
first date on which it has the right to demand payment from the writer of the
put although the final maturity of the security is later than such date.
RECEIPTS--interests in separately traded interest and principal component
parts of U.S. Government obligations that are issued by banks or brokerage firms
and are created by depositing U.S. Government obligations into a special account
at a custodian bank. The custodian holds the interest and principal payments for
the benefit of the registered owners of the certificates or receipts. The
custodian arranges for the issuance of the certificates or receipts evidencing
ownership and maintains the register. Receipts include "Treasury Receipts"
("TRs"), "Treasury Investment Growth Receipts" ("TIGRs"), and "Certificates of
Accrual on Treasury Securities" ("CATS"). TIGRs and CATS are interests in
private proprietary accounts while TRs and STRIPS (See "U.S. Treasury
Obligations") are interests in accounts sponsored by the U.S. Treasury. Receipts
are sold as zero coupon securities which means that they are sold at a
substantial discount and redeemed at face value at their maturity date without
interim cash payments of interest or principal. This discount is accreted over
the life of the security, and such accretion will constitute the income earned
on the security for both accounting and tax purposes. Because of these features,
such securities may be subject to greater interest rate volatility than interest
paying fixed income securities.
REITS--REITs are trusts that invest primarily in commercial real estate or
real estate-related loans. A REIT is not taxed on income distributed to its
shareholders or unitholders if it complies with regulatory requirements relating
to its organization, ownership, assets and income, and with a regulatory
requirement that it distribute to its shareholders or unitholders at least 95%
of its taxable income for each taxable year. Generally, REITs can be classified
as Equity REITs, Mortgage REITs and Hybrid REITs. Equity REITs invest the
majority of their assets directly in real property and derive their income
primarily from rents and capital gains from appreciation realized through
property sales. Mortgage REITs invest the majority of their assets in real
estate mortgages and derive their income primarily from interest payments.
Hybrid REITs combine the characteristics of both Equity and Mortgage REITs. By
investing in REITs indirectly through the Fund, shareholders will bear not only
the proportionate share of the expenses of the Fund, but also, indirectly,
similar expenses of underlying REITs.
A Fund may be subject to certain risks associated with the direct
investments of the REITs. REITs may be affected by changes in the value of their
underlying properties and by defaults by borrowers or tenants. Mortgage REITs
may be affected by the quality of the credit extended. Furthermore, REITs are
dependent on specialized management skills. Some REITs may have limited
diversification and may be subject to risks inherent in financing a limited
number of properties. REITs depend generally on their ability to generate cash
flow to make distributions to shareholders or unitholders, and may be subject to
defaults by borrowers and to self-liquidations. In addition, a REIT may be
affected by its failure to qualify
S-27
<PAGE>
for tax-free pass-through of income under the Code or its failure to maintain
exemption from registration under the 1940 Act.
REPURCHASE AGREEMENTS--agreements under which securities are acquired from a
securities dealer or bank subject to resale on an agreed upon date and at an
agreed upon price which includes principal and interest. A Fund involved bears a
risk of loss in the event that the other party to a repurchase agreement
defaults on its obligations and the Fund is delayed or prevented from exercising
its rights to dispose of the collateral securities. A Fund's Sub-Advisers enter
into repurchase agreements only with financial institutions that they deem to
present minimal risk of bankruptcy during the term of the agreement, based on
guidelines that are periodically reviewed by the Board of Trustees. These
guidelines currently permit each Fund to enter into repurchase agreements only
with approved banks and primary securities dealers, as recognized by the Federal
Reserve Bank of New York, which have minimum net capital of $100 million, or
with a member bank of the Federal Reserve System. Repurchase agreements are
considered to be loans collateralized by the underlying security. Repurchase
agreements entered into by a Fund will provide that the underlying security at
all times shall have a value at least equal to 102% of the price stated in the
agreement. This underlying security will be marked to market daily. A Fund's
Sub-Advisers will monitor compliance with this requirement. Under all repurchase
agreements entered into by a Fund, the Custodian or its agent must take
possession of the underlying collateral. However, if the seller defaults, a Fund
could realize a loss on the sale of the underlying security to the extent the
proceeds of the sale are less than the resale price. In addition, even though
the Bankruptcy Code provides protection for most repurchase agreements, if the
seller should be involved in bankruptcy or insolvency proceedings, a Fund may
incur delay and costs in selling the security and may suffer a loss of principal
and interest if the Fund is treated as an unsecured creditor.
SECURITIES LENDING--in order to generate additional income, each Fund may
lend its securities pursuant to agreements requiring that the loans be
continuously secured by cash, securities of the U.S. Government or its agencies,
or any combination of cash and such securities, as collateral equal to at least
the market value at all times of the loaned securities. A Fund will continue to
receive interest on the loaned securities while simultaneously earning interest
on the investment of the cash collateral in U.S. Government securities. However,
a Fund will normally pay lending fees to such broker-dealers and related
expenses from the interest earned on invested collateral. There may be risks of
delay in receiving additional collateral or risks of delay in recovery of the
securities or even loss of rights in the collateral should the borrower of the
securities fail financially. However, loans are made only to borrowers deemed by
the Fund's Sub-Advisers to be of good standing and when, in the judgment of the
Fund's Sub-Advisers, the consideration which can be earned currently from such
securities loans justifies the attendant risk. Any loan may be terminated by
either party upon reasonable notice to the other party. Each Fund may use the
Distributor as a broker in these transactions.
SHORT SALES--Selling securities short involves selling securities the Fund
does not own (but has borrowed) in anticipation of a decline in the market price
of such securities. To deliver the securities to the buyer, the seller must
arrange through a broker to borrow the securities and, in so doing, the seller
becomes obligated to replace the securities borrowed at their market price at
the time of replacement. In a short sale, the proceeds the seller receives from
the sale are retained by a broker until the seller replaces the borrowed
securities. The seller may have to pay a premium to borrow the securities and
must pay any dividends or interest payable on the securities until they are
replaced. A Fund may only sell securities short "against the box." A short sale
is "against the box" if, at all times during which the short position is open,
the Fund owns at least an equal amount of the securities or securities
convertible into, or exchangeable without further consideration for, securities
of the same issue as the securities that are sold short.
STOCK INDEX FUTURES--A stock index futures contract is a bilateral agreement
pursuant to which two parties agree to take or make delivery of an amount of
cash equal to a specified dollar amount times the difference between the stock
index value at the close of trading of the contract and the price at which
S-28
<PAGE>
the futures contract is originally struck. No physical delivery of the
securities comprising the index is made; generally contracts are closed out
prior to the expiration date of the contract.
In order to avoid leveraging and related risks, when a Fund purchases
futures contracts, it will collateralize its position by depositing an amount of
cash or liquid securities equal to the market value of the futures positions
held, less margin deposits, in a segregated account. Collateral equal to the
current market value of the futures position will be marked to market on a daily
basis.
There are risks associated with these activities, including the following:
(1) the success of a hedging strategy may depend on an ability to predict
movements in the prices of individual securities, fluctuations in markets and
movements in interest rates; (2) there may be an imperfect or no correlation
between the changes in market value of the securities held by the Fund and the
prices of futures and options on futures; (3) there may not be a liquid
secondary market for a futures contract or option; (4) trading restrictions or
limitations may be imposed by an exchange; and (5) government regulations may
restrict trading in futures contracts and options on futures.
The SEI VP S&P 500 Index Fund may invest in stock index futures. No price is
paid upon entering into futures contracts. Instead, a Fund is required to
deposit an amount of cash or U.S. Treasury securities known as "initial margin."
Subsequent payments, call "variation margin," to and from the broker, would be
made on a daily basis as the value of the futures position varies (a process
known as "marking to market"). The nature of initial and variation margin in
futures transactions is different from that of margin in security transactions
in that futures contract margin does not involve the borrowing of funds to
finance the transactions. Rather, the margin is in the nature of a performance
bond or good-faith deposit on the contract that is returned to the Fund upon
termination of the contract, assuming all contractual obligations have been
satisfied. Positions in futures contracts may be closed only on an exchange or
board of trade providing a secondary market for such futures contracts. The
value of the contract usually will vary in direct proportion to the total face
value. Market value of a stock index futures position is defined as the closing
value of the Index multiplied by 500 times the number of contracts held.
The Fund's ability to effectively utilize futures contracts depends on
several factors. First, it is possible that there will not be a perfect price
correlation between the futures contracts and their underlying stock index. In
addition, the purchase of a futures contract involves the risk that the Fund
could lose more than the original margin deposit required to initiate a futures
transaction.
In considering the proposed use of futures contracts, particular note should
be taken that futures contracts relate to the anticipated levels at some point
in the future not to the current level of the underlying instrument; thus, for
example, trading of stock index futures may not reflect the trading of the
securities which are used to formulate an index or even actual fluctuations in
the relevant index itself. There is, in addition, a risk that movements in the
price of futures contracts will not correlate with the movement in prices of the
stock index being tracked. There may be several reasons unrelated to the value
of the underlying securities which causes this situation to occur. First, all
participants in the futures market are subject to initial and variation margin
requirements. If, to avoid meeting additional margin deposit requirements or for
other reasons, investors choose to close a significant number of futures
contracts through offsetting transactions, distortions in the normal price
relationship between the securities markets and the futures markets may occur.
Second, because the deposit requirements in the futures market are less onerous
than margin requirements in the securities market, there may be increased
participation by speculators in the futures market which may also cause
temporary price distortions. The Fund will not engage in transactions in futures
contracts for speculative purposes.
STRUCTURED SECURITIES--The SEI VP Emerging Markets Debt Fund may invest a
portion of its assets in entities organized and operated solely for the purpose
of restructuring the investment characteristics of sovereign debt obligations of
emerging market issuers. This type of restructuring involves the deposit with,
or purchase by, an entity, such as a corporation or trust, of specified
instruments (such as commercial bank loans or Brady Bonds) and the issuance by
that entity of one or more classes of securities
S-29
<PAGE>
("Structured Securities") backed by, or representing interests in, the
underlying instruments. The cash flow on the underlying instruments may be
apportioned among the newly issued Structured Securities to create securities
with different investment characteristics, such as varying maturities, payment
priorities and interest rate provisions, and the extent of the payments made
with respect to Structured Securities is dependent on the extent of the cash
flow on the underlying instruments. Because Structured Securities of the type in
which the Fund anticipates it will invest typically involve no credit
enhancement, their credit risk generally will be equivalent to that of the
underlying instruments. The Fund is permitted to invest in a class of Structured
Securities that is either subordinated or unsubordinated to the right of payment
of another class. Subordinated Structured Securities typically have higher
yields and present greater risks than unsubordinated Structured Securities.
Structured Securities are typically sold in private placement transactions, and
there currently is no active trading market for Structured Securities. Certain
issuers of such structured securities may be deemed to be "investment companies"
as defined in the 1940 Act. As a result, the Fund's investment in such
securities may be limited by certain investment restrictions contained in the
1940 Act.
SWAPS, CAPS, FLOORS AND COLLARS--are sophisticated hedging instruments that
typically involve a small investment of cash relative to the magnitude of risk
assumed. As a result, swaps can be highly volatile and have a considerable
impact on a Fund's performance. Interest rate swaps, mortgage swaps, currency
swaps and other types of swap agreements such as caps, floors and collars are
designed to permit the purchaser to preserve a return or spread on a particular
investment or portion of its portfolio, and to protect against any increase in
the price of securities a Fund anticipates purchasing at a later date.
Swap agreements are subject to risks related to the counterparty's ability
to perform, and may decline in value if the counterparty's creditworthiness
deteriorates. A Fund may also suffer losses if it is unable to terminate
outstanding swap agreements or reduce its exposure through offsetting
transactions. Any obligation a Fund may have under these types of arrangements
will be covered by setting aside liquid, high grade securities in a segregated
account. A Fund will enter into swaps only with counterparties believed to be
creditworthy.
In a typical interest rate swap, one party agrees to make regular payments
equal to a floating interest rate times a "notional principal amount," in return
for payments equal to a fixed rate times the same amount, for a specific period
of time. Swaps may also depend on other prices or rates, such as the value of an
index or mortgage prepayment rates.
In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by the
other party.
The buyer of an interest rate cap obtains the right to receive payments to
the extent that a specific interest rate exceeds an agreed-upon level, while the
seller of an interest rate floor is obligated to make payments to the extent
that a specified interest rate falls below an agreed-upon level. An interest
rate collar combines elements of buying a cap and selling a floor.
Swap agreements will tend to shift a Fund's investment exposure from one
type of investment to another. Depending on how they are used, swap agreements
may increase or decrease the overall volatility of the Fund's investments and
their share price or yield.
TIME DEPOSITS--a non-negotiable receipt issued by a bank in exchange for the
deposit of funds. Like a certificate of deposit, it earns a specified rate of
interest over a definite period of time; however, it cannot be traded in the
secondary market.
Time deposits with a withdrawal penalty are considered to be illiquid
securities. The SEI VP High Yield Bond, SEI VP International Fixed Income, SEI
VP Prime Obligation, SEI VP Emerging Markets Equity and SEI VP International
Equity Funds may invest in time deposits.
S-30
<PAGE>
U.S. GOVERNMENT AGENCY OBLIGATIONS--Obligations issued or guaranteed by
agencies of the U.S. Government, including, among others, the Federal Farm
Credit Bank, the Federal Housing Administration and the Small Business
Administration, and obligations issued or guaranteed by instrumentalities of the
U.S. Government, including, among others, the FHLMC, the Federal Land Banks and
the U.S. Postal Service. Some of these securities are supported by the full
faith and credit of the U.S. Treasury (E.G., GNMA securities), others are
supported by the right of the issuer to borrow from the Treasury (E.G., Federal
Farm Credit Bank securities), while still others are supported only by the
credit of the instrumentality (E.G., Fannie Mae securities). Agencies of the
United States Government that issue obligations, including, among others, Export
Import Bank of the United States, Farmers Home Administration, Federal Farm
Credit System, Federal Housing Administration, Government National Mortgage
Association, Maritime Administration, Small Business Administration and The
Tennessee Valley Authority. A Fund may purchase securities issued or guaranteed
by the GNMA which represent participations in Veterans Administration and
Federal Housing Administration backed mortgage pools.
Guarantees of principal by agencies or instrumentalities of the U.S.
Government may be a guarantee of payment at the maturity of the obligation so
that in the event of a default prior to maturity there might not be a market and
thus no means of realizing on the obligation prior to maturity. Guarantees as to
the timely payment of principal and interest do not extend to the value or yield
of these securities or to the value of a Fund's shares.
U.S. TREASURY OBLIGATIONS--bills, notes and bonds issued by the U.S.
Treasury and separately traded interest and principal component parts of such
obligations that are transferable through the Federal book-entry system known as
Separately Traded Registered Interest and Principal Securities ("STRIPS"). No
Fund may actively trade STRIPS. STRIPS are sold as zero coupon securities; for
more information, see "Zero Coupon Securities."
U.S. TREASURY RECEIPTS--U.S. Treasury receipts are interests in separately
traded interest and principal component parts of U.S. Treasury obligations that
are issued by banks or brokerage firms and are created by depositing U.S.
Treasury notes and obligations into a special account at a custodian bank. The
custodian holds the interest and principal payments for the benefit of the
registered owners of the certificates of receipts. The custodian arranges for
the issuance of the certificates or receipts evidencing ownership and maintains
the register.
VARIABLE AND FLOATING RATE INSTRUMENTS--Certain obligations may carry
variable or floating rates of interest, and may involve a conditional or
unconditional demand feature. Such instruments bear interest at rates that are
not fixed, but which vary with changes in specified market rates or indices. The
interest rates on these securities may be reset daily, weekly, quarterly or some
other reset period, and may have a floor or ceiling on interest rate changes.
These instruments may involve a demand feature and may include variable amount
master demand notes available through the Custodian, or otherwise. Variable or
floating rate instruments bear interest at a rate which varies with changes in
market rates. The holder of an instrument with a demand feature may tender the
instrument back to the issuer at par prior to maturity. A variable amount master
demand note is issued pursuant to a written agreement between the issuer and the
holder, its amount may be increased by the holder or decreased by the holder or
issuer, it is payable on demand, and the rate of interest varies based upon an
agreed formula. The quality of the underlying credit must, in the opinion of the
Fund's managers, be equivalent to the long-term bond or commercial paper ratings
applicable to permitted investments for each Fund. Each Fund's Sub-Advisers will
monitor on an ongoing basis the earning power, cash flow, and liquidity ratios
of the issuers of such instruments and will similarly monitor the ability of an
issuer of a demand instrument to pay principal and interest on demand. There is
a risk that the current interest rate on such obligations may not accurately
reflect existing market interest rates. A demand instrument with a demand notice
exceeding seven days may be considered illiquid if there is no secondary market
for such security.
In case of obligations which include a put feature at the option of the debt
holder, the date of the put may be used as an effective maturity date for the
purpose of determining weighted average fund maturity.
S-31
<PAGE>
WARRANTS--Warrants are instruments giving holders the right, but not the
obligation, to buy equity or fixed income securities of a company at a given
price during a specified period.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES--involve the purchase of debt
obligations on a when-issued basis, in which case delivery and payment normally
take place within 45 days after the date of commitment to purchase. The payment
obligation and the interest rate that will be received on the securities are
each fixed at the time the purchaser enters into the commitment. These
securities are subject to market fluctuation due to changes in market interest
rates, and it is possible that the market value at the time of settlement could
be higher or lower than the purchase price if the general level of interest
rates has changed. Although a Fund generally purchases securities on a
when-issued or forward commitment basis with the intention of actually acquiring
securities, a Fund may dispose of a when-issued security or forward commitment
prior to settlement if it deems it appropriate to do so. When investing in
when-issued securities, a Fund will not accrue income until delivery of the
securities and will invest in such securities only for purposes of actually
acquiring the securities and not for purposes of leveraging.
One form of when-issued or delayed-delivery security that a Fund may
purchase is a "to be announced" ("TBA") mortgage-backed security. A TBA
mortgage-backed security transaction arises when a mortgage-backed security,
such as a GNMA pass-through security, is purchased or sold with specific pools
that will constitute that GNMA pass-through security to be announced on a future
settlement date.
Purchasing obligations on a when-issued basis is a form of leveraging and
can involve a risk that the yields available in the market when the delivery
takes place may actually be higher than those obtained in the transaction
itself. In that case there could be an unrealized loss at the time of delivery.
A Fund will establish a segregated account and maintain liquid assets in an
amount at least equal in value to that Fund's commitments to purchase
when-issued securities. If the value of these assets declines, the Fund involved
will place additional liquid assets in the account on a daily basis so that the
value of the assets in the account is equal to the amount of such commitments.
YANKEE OBLIGATIONS--Yankee obligations ("Yankees") are U.S.
dollar-denominated instruments of foreign issuers who either register with the
SEC or issue under Rule 144A under the Securities Act of 1933. These obligations
consist of debt securities (including preferred or preference stock of non-
governmental issuers), certificates of deposit, fixed time deposits and bankers'
acceptances issued by foreign banks, and debt obligations of foreign governments
or their subdivisions, agencies and instrumentalities, international agencies
and supranational entities. Some securities issued by foreign governments or
their subdivisions, agencies and instrumentalities may not be backed by the full
faith and credit of the foreign government.
The Yankee obligations selected for a Fund will adhere to the same quality
standards as those utilized for the selection of domestic debt obligations.
YEAR 2000 TRANSITION--The Funds and their service providers do not appear to
have been adversely affected by computer problems related to the transition to
the year 2000. However, there remains a risk that such problems could arise or
be discovered in the future. Year 2000 related problems also may negatively
affect issuers whose securities the Funds purchases, which could have an impact
on the value of your investment.
ZERO COUPON SECURITIES--Zero coupon securities are securities that are sold
at a discount to par value, and securities on which interest payments are not
made during the life of the security. Upon maturity, the holder is entitled to
receive the par value of the security. While interest payments are not made on
such securities, holders of such securities are deemed to have received "phantom
income" annually. Because a Fund will distribute its "phantom income" to
shareholders, to the extent that shareholders elect to receive dividends in cash
rather than reinvesting such dividends in additional shares, the Fund will have
fewer assets with which to purchase income producing securities. Pay-in-kind
securities pay interest in either cash or additional securities, at the issuer's
option, for a specified period. Pay-in-kind
S-32
<PAGE>
bonds, like zero coupon bonds, are designed to give an issuer flexibility in
managing cash flow. Pay-in-kind bonds are expected to reflect the market value
of the underlying debt plus an amount representing accrued interest since the
last payment. Pay-in-kind bonds are usually less volatile than zero coupon
bonds, but more volatile than cash pay securities. Pay-in-kind securities are
securities that have interest payable by delivery of additional securities. Upon
maturity, the holder is entitled to receive the aggregate par value of the
securities. Deferred payment securities are securities that remain zero coupon
securities until a predetermined date, at which time the stated coupon rate
becomes effective and interest becomes payable at regular intervals.
To avoid any leveraging concerns, the Fund will place cash or liquid
securities in a segregated account in an amount sufficient to cover its
repurchase obligation. Zero coupon, pay-in-kind and deferred payment securities
may be subject to greater fluctuation in value and lesser liquidity in the event
of adverse market conditions than comparably rated securities paying cash
interest at regular interest payment periods. STRIPS and receipts (TRs, TIGRs
and CATS) are sold as zero coupon securities, that is, fixed income securities
that have been stripped of their unmatured interest coupons. Zero coupon
securities are sold at a (usually substantial) discount and redeemed at face
value at their maturity date without interim cash payments of interest or
principal. The amount of this discount is accreted over the life of the
security, and the accretion constitutes the income earned on the security for
both accounting and tax purposes. Because of these features, the market prices
of zero coupon securities are generally more volatile than the market prices of
securities that have similar maturity but that pay interest periodically. Zero
coupon securities are likely to respond to a greater degree to interest rate
changes than are non-zero coupon securities with similar maturity and credit
qualities.
Corporate zero coupon securities are: (i) notes or debentures which do not
pay current interest and are issued at substantial discounts from par value, or
(ii) notes or debentures that pay no current interest until a stated dated one
or more years into the future, after which the issuer is obligated to pay
interest until maturity, usually at a higher rate than if interest were payable
from the date of issuance and may also make interest payments in kind (e.g.,
with identical zero coupon securities). Such corporate zero coupon securities,
in addition to the risks identified above, are subject to the risk of the
issuer's failure to pay interest and repay principal in accordance with the
terms of the obligation. A Fund must accrete the discount or interest on
high-yield bonds structured as zero coupon securities as income even though it
does not receive a corresponding cash interest payment until the security's
maturity or payment date. A Fund may have to dispose of its securities under
disadvantageous circumstances to generate cash, or may have to leverage itself
by borrowing cash to satisfy distribution requirements. A Fund accrues income
with respect to the securities prior to the receipt of cash payments.
S-33
<PAGE>
DESCRIPTION OF RATINGS
MOODY'S RATINGS DEFINITIONS
LONG TERM
<TABLE>
<S> <C>
Aaa Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk
and are generally referred to as "gilt edged." Interest
payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various
protective elements are protected by a large or by an
exceptionally stable margin and principal is secure. While
the various protective elements are likely to change, such
changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa Bonds which are rated Aa are judged to be of high quality by
all standards. Together with the Aaa group they comprise
what are generally known as high-grade bonds. They are rated
lower than the best bonds because margins of protection may
not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may
be other elements present which make the long-term risk
appear somewhat larger than the Aaa securities.
A Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper-medium grade
obligations. Factors giving security to principal and
interest are considered adequate, but elements may be
present which suggest a susceptibility to impairment some
time in the future.
Baa Bonds which are rated Baa are considered as medium-grade
obligations (i.e., they are neither highly protected nor
poorly secured). Interest payments and principal security
appear adequate for the present but certain protective
elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack
outstanding investment characteristics and in fact have
speculative characteristics as well.
Ba Bonds which are rated Ba are judged to have speculative
elements; their future cannot be considered as well-assured.
Often the protection of interest and principal payments may
be very moderate and thereby not well safeguarded during
both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B Bonds which are rated B generally lack characteristics of
the desirable investment. Assurance of interest and
principal payments or of maintenance of other terms of the
contract over any long period of time may be small.
Caa Bonds which are rated Caa are of poor standing. Such issues
may be in default or there may be present elements of danger
with respect to principal or interest.
Ca Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in
default or have other marked shortcomings.
C Bonds which are rated C are the lowest rated class of bonds,
and issues so rated can be regarded as having extremely poor
prospects of ever attaining any real investment standing.
</TABLE>
SHORT-TERM
PRIME-1 Issuers rated Prime-1 (or supporting institutions) have a superior
ability for repayment of senior short-term debt obligations. Prime-1 repayment
ability will often be evidenced by many of the following characteristics:
- Leading market positions in well-established industries.
- High rates of return on funds employed.
S-34
<PAGE>
- Conservative capitalization structure with moderate reliance on debt and
ample asset protection.
- Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.
- Well-established access to a range of financial markets and assured
sources of alternate liquidity.
PRIME-2 Issuers rated Prime-2 (or supporting institutions) have a strong
ability for repayment of senior short-term debt obligations. This will normally
be evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
PRIME-3 Issuers rated Prime-3 (or supporting institutions) have an
acceptable ability for repayment of senior short-term obligations. The effect of
industry characteristics and market compositions may be more pronounced.
Variability in earnings and profitability may result in changes in the level of
debt protection measurements and may require relatively high financial leverage.
Adequate alternate liquidity is maintained.
NOT PRIME Issuers rated Not Prime do not fall within any of the Prime rating
categories.
STANDARD & POOR'S RATINGS DEFINITIONS
A Standard & Poor's corporate or municipal debt rating is a current
assessment of creditworthiness of an obligor with respect to a specific
obligation. This assessment may take into consideration obligors such as
guarantors, insurers, or lessees.
The debt rating is not a recommendation to purchase, sell or hold a
security, as it does not comment on market price or suitability for a particular
investor.
The ratings are based, in varying degrees, on the following considerations:
(1) Likelihood of default. The rating assesses the obligor's capacity and
willingness as to timely payment of interest and repayment of principal
in accordance with the terms of the obligation.
(2) The obligation's nature and provisions.
(3) Protection afforded to, and relative position of, the obligation in the
event of bankruptcy, reorganization, or other arrangement under
bankruptcy laws and other laws affecting creditor's rights.
Likelihood of default is indicated by an issuer's senior debt rating. If
senior debt is not rated, an implied senior debt rating is determined.
Subordinated debt usually is rated lower than senior debt to better reflect
relative position of the obligation in bankruptcy. Unsecured debt, where
significant secured debt exists, is treated similarly to subordinated debt.
LONG-TERM
INVESTMENT GRADE
<TABLE>
<S> <C>
AAA Debt rated 'AAA' has the highest rating assigned by S&P.
Capacity to pay interest and repay principal is extremely
strong.
AA Debt rated 'AA' has a very strong capacity to pay interest
and repay principal and differs from the highest rated debt
only in small degree.
A Debt rated 'A' has a strong capacity to pay interest and
repay principal, although it is somewhat more susceptible to
adverse effects of changes in circumstances and economic
conditions than debt in higher-rated categories.
</TABLE>
S-35
<PAGE>
<TABLE>
<S> <C>
BBB Debt rated 'BBB' is regarded as having an adequate capacity
to pay interest and repay principal. Whereas it normally
exhibits adequate protection parameters, adverse economic
conditions or changing circumstances are more likely to lead
to a weakened capacity to pay interest and repay principal
for debt in this category than in higher rated categories.
</TABLE>
SPECULATIVE GRADE
Debt rated 'BB', 'B', 'CCC', 'CC', and 'C' is regarded as having
predominantly speculative characteristics with respect to capacity to pay
interest and repay principal. 'BB' indicates the least degree of speculation and
'C' the highest degree of speculation. While such debt will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposure to adverse conditions.
<TABLE>
<S> <C>
BB Debt rated 'BB' has less near-term vulnerability to default
than other speculative grade debt. However, it faces major
ongoing uncertainties or exposure to adverse business,
financial, or economic conditions that could lead to
inadequate capacity to meet timely interest and principal
payments. The 'BB' rating category is also used for debt
subordinated to senior debt that is assigned an actual or
implied 'BBB-' rating.
B Debt rate 'B' has greater vulnerability to default but
presently has the capacity to meet interest payments and
principal repayments. Adverse business, financial, or
economic conditions would likely impair capacity or
willingness to pay interest and repay principal. The 'B'
rating category also is used for debt subordinated to senior
debt that is assigned an actual or implied 'BB' or 'BB-'
rating.
CCC Debt rated 'CCC' has a current identifiable vulnerability to
default, and is dependent on favorable business, financial
and economic conditions to meet timely payment of interest
and repayment of principal. In the event of adverse
business, financial, or economic conditions, it is not
likely to have the capacity to pay interest and repay
principal. The 'CCC' rating category also is used for debt
subordinated to senior debt that is assigned an actual or
implied 'B' or 'B-' rating.
CC The rating 'CC' is typically applied to debt subordinated to
senior debt which is assigned an actual or implied 'CCC'
rating.
C The rating 'C' is typically applied to debt subordinated to
senior debt which is assigned an actual or implied 'CCC-'
debt rating. The 'C' rating may be used to cover a situation
where a bankruptcy petition has been filed, but debt service
payment are continued.
CI Debt rated 'CI' is reserved for income bonds on which no
interest is being paid.
D Debt is rated 'D' when the issue is in payment default, or
the obligor has filed for bankruptcy. The 'D' rating is used
when interest or principal payments are not made on the date
due, even if the applicable grace period has not expired,
unless S&P believes that such payments will be made during
such grace period.
</TABLE>
Plus (+) or minus (-): The ratings from 'AA' to 'CCC' may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
<TABLE>
<S> <C>
c The letter 'C' indicates that the holder's option to tender
the security for purchase may be canceled under certain
prestated conditions enumerated in the tender option
documents.
p The letter 'p' indicates that the rating is provisional. A
provisional rating assumes the successful completion of the
project financed by the debt being rated and indicates that
payment of the debt service requirements is largely or
entirely dependent upon the successful timely completion of
the project. This rating, however, while addressing credit
quality subsequent to completion of the project, makes no
comment on the likelihood of, or the risk of default upon
failure of such completion. The investor should exercise his
own judgement with respect to such likelihood and risk.
</TABLE>
S-36
<PAGE>
<TABLE>
<S> <C>
L The letter 'L' indicates that the rating pertains to the
principal amount of those bonds to the extent that the
underlying deposit collateral is federally insured, and
interest is adequately collateralized. In the case of
certificates of deposit, the letter 'L' indicates that the
deposit, combined with other deposits being held in the same
right and capacity, will be honored for principal and
pre-default interest up to federal insurance limits within
30 days after closing of the insured institution or, in the
event that the deposit is assumed by a successor insured
institution, upon maturity.
</TABLE>
- ------------------------
*Continuance of the rating is contingent upon S&P's receipt of an executed copy
of the escrow agreement or closing documentation confirming investments and
cash flows.
N.R. Not rated.
Debt obligations of issuers outside the United States and its territories
are rated on the same basis as domestic corporate and municipal issues. The
ratings measure the creditworthiness of the obligor but do not take into account
currency exchange and related uncertainties.
If an issuer's actual or implied senior debt rating is 'AAA', its
subordinated or junior debt is rated 'AAA' or 'AA+'. If an issuer's actual or
implied senior debt rating is lower than 'AAA' but higher than 'BB+', its junior
debt is typically rated one designation lower than the senior debt ratings. For
example, if the senior debt rating is 'A', subordinated debt normally would be
rated 'A-'. If an issuer's actual or implied senior debt rating is 'BB+' or
lower, its subordinated debt is typically rated two designations lower than the
senior debt rating.
NOTE: The term "investment grade" was originally used by various regulatory
bodies to connote obligations eligible for investment by institutions such as
banks, insurance companies, and savings and loan associations. Over time, this
term gained widespread usage throughout the investment community. Issues rated
in the four highest categories, 'AAA', 'AA', 'A', 'BBB', generally are
recognized as being investment grade. Debt 'BB' or below generally is referred
to as speculative grade. The term "junk bond" is merely a more irreverent
expression for this category of more risky debt. Neither term indicates which
securities S&P deems worthy of investment, as an investor with a particular risk
preference may appropriately invest in securities that are not investment grade.
SHORT-TERM
<TABLE>
<S> <C>
A-1 This highest category indicates that the degree of safety
regarding timely payment is strong. Debt determined to
possess extremely strong safety characteristics is denoted
with a plus sign (+) designation.
A-2 Capacity for timely payment on issues with this designation
is satisfactory. However, the relative degree of safety is
not as high as for issues designated "A-1".
A-3 Debt carrying this designation has an adequate capacity for
timely payment. It is, however, more vulnerable to the
adverse effects of changes in circumstances than obligations
carrying the higher designations.
B Debt rated "B" is regarded as having only speculative
capacity for timely payment.
C This rating is assigned to short-term debt obligations with
a doubtful capacity for payment.
D This rating indicates that the obligation is in payment
default.
</TABLE>
DUFF AND PHELPS, INC. RATINGS DEFINITIONS
<TABLE>
<S> <C>
AAA Highest credit quality. The risk factors are negligible,
being only slightly more than for risk-free U.S. Treasury
debt.
AA+ High credit quality. Protection factors are strong. Risk is
AA- modest but may vary slightly from time to time because of
economic conditions.
</TABLE>
S-37
<PAGE>
<TABLE>
<S> <C>
A+ Protection factors are average but adequate. However, risk
A- factors are more variable and greater in periods of economic
stress.
BBB+ Below average protection factors but still considered
BBB- sufficient for prudent investment. Considerable variability
in risk during economic cycles.
BB+ Below investment grade but deemed likely to meet obligations
BB when due. Present or prospective financial protection
BB- factors fluctuate according to industry conditions or
company fortunes. Overall quality may move up or down
frequently within this category.
B+ Below investment grade and possessing risk that obligations
B will not be met when due. Financial protection factors will
B- fluctuate widely according to economic cycles, industry
conditions and/or company fortunes. Potential exists for
frequent changes in the rating within this category or into
a higher or lower rating grade.
CCC Well below investment grade securities. Considerable
uncertainty exists as to timely payment of principal,
interest or preferred dividends. Protection factors are
narrow and risk can be substantial with unfavorable
economic/industry conditions, and/or with unfavorable
company developments.
DD Defaulted debt obligations. Issuer failed to meet scheduled
principal and/or interest payments.
DP Preferred stock with dividend arrearages.
</TABLE>
SHORT-TERM RATINGS
<TABLE>
<S> <C>
Duff 1+ Highest certainty of timely payment. Short-term liquidity,
including internal operating factors and/or access to
alternative sources of funds, is outstanding, and safety is
just below risk-free U.S. Treasury short-term obligations.
Duff 1 Very high certainty of timely payment. Liquidity factors are
excellent and supported by good fundamental protection
factors. Risk factors are minor.
Duff 1- High certainty of timely payment. Liquidity factors are
strong and supported by good fundamental protection factors.
Risk factors are very small.
GOOD GRADE
Duff 2 Good certainty of timely payment. Liquidity factors and
company fundamentals are sound. Although ongoing funding
needs may enlarge total financing requirements, access to
capital markets is good. Risk factors are small.
SATISFACTORY GRADE
Duff 3 Satisfactory liquidity and other protection factors qualify
issue as to investment grade. Risk factors are larger and
subject to more variation. Nevertheless, timely payment is
expected.
NON-INVESTMENT GRADE
Duff 4 Speculative investment characteristics. Liquidity is not
sufficient to insure against disruption in debt service.
Operating factors and market access may be subject to a high
degree of variation.
DEFAULT
Duff 5 Issuer failed to meet scheduled principal and/or interest
payments.
</TABLE>
FITCH IBCA RATINGS DEFINITIONS
LONG-TERM
<TABLE>
<S> <C>
INVESTMENT GRADE
AAA Highest credit quality. "AAA" ratings denote the lowest
expectation of credit risk. They are assigned only in case
of exceptionally strong capacity for timely payment of
financial commitments. This capacity is highly unlikely to
be adversely affected by foreseeable events.
</TABLE>
S-38
<PAGE>
<TABLE>
<S> <C>
AA Very high credit quality. "AA" ratings denote a very low
expectation of credit risk. They indicate very strong
capacity for timely payment of financial commitments. This
capacity is not significantly vulnerable to foreseeable
events.
A High credit quality. "A" ratings denote a low expectation of
credit risk. The capacity for timely payment of financial
commitments is considered strong. This capacity may,
nevertheless, be more vulnerable to changes in circumstances
or in economic conditions than is the case for higher
ratings.
BBB Good credit quality. "BBB" ratings indicate that there is
currently a low expectation of credit risk. The capacity for
timely payment of financial commitments is considered
adequate, but adverse changes in circumstances and in
economic conditions are more likely to impair this capacity.
This is the lowest investment-grade category.
SPECULATIVE GRADE
BB Speculative. "BB" ratings indicate that there is a
possibility of credit risk developing, particularly as the
result of adverse economic change over time; however,
business or financial alternatives may be available to allow
financial commitments to be met. Securities rated in this
category are not investment grade.
B Highly speculative. "B" ratings indicate that significant
credit risk is present, but a limited margin of safety
remains. Financial commitments are currently being met;
however, capacity for continued payment is contingent upon a
sustained, favorable business and economic environment.
CCC High default risk. Default is a real possibility. Capacity
CC for meeting financial commitments is solely reliant upon
C sustained, favorable business or economic developments. A
"CC" rating indicates that default of some kind appears
probable. "C" ratings signal imminent default.
DDD Default. The ratings of obligations in this category are
DD based on their prospects for achieving partial or full
D recovery in a reorganization or liquidation of the obligor.
While expected recovery values are highly speculative and
cannot be estimated with any precision, the following serve
as general guidelines. "DDD" obligations have the highest
potential for recovery, around 90%-100% of outstanding
amounts and accrued interest. "DD" indicates potential
recoveries in the range of 50%-90%, and "D" the lowest
recovery potential, i.e., below 50%.
Entities rated in this category have defaulted on some or
all of their obligations. Entities rated "DDD" have the
highest prospect for resumption of performance or continued
operation with or without a formal reorganization process.
Entities rated "DD" and "D" are generally undergoing a
formal reorganization or liquidation process; those rated
"DD" are likely to satisfy a higher portion of their
outstanding obligations, while entities rated "D" have a
poor prospect for repaying all obligations.
</TABLE>
SHORT-TERM
<TABLE>
<S> <C>
F1 Highest credit quality. Indicates the Best capacity for
timely payment of financial commitments; may have an added
"+" to denote any exceptionally strong credit feature.
F2 Good credit quality. A satisfactory capacity for timely
payment of financial commitments, but the margin of safety
is not as great as in the case of the higher ratings.
F3 Fair credit quality. The capacity for timely payment of
financial commitments is adequate; however, near-term
adverse changes could result in a reduction to
non-investment grade.
B Speculative. Minimal capacity for timely payment of
financial commitments, plus vulnerability to near-term
adverse changes in financial and economic conditions.
C High default risk. Default is a real possibility. Capacity
for meeting financial commitments is solely reliant upon a
sustained, favorable business and economic environment.
D Default. Denotes actual or imminent payment default.
</TABLE>
S-39
<PAGE>
NOTES TO LONG-TERM AND SHORT-TERM RATINGS: "+" or "-" may be appended to a
rating to denote relative status within major rating categories. Such suffixes
are not added to the "AAA" long-term rating category, to categories below "CCC,"
or to short-term ratings other than "F1".
"NR" indicates that Fitch IBCA does not rate the issuer or issue in
question.
"WITHDRAWN": A rating is withdrawn when Fitch IBCA deems the amount of
information available to be inadequate for rating purposes, or when an
obligation matures, is called, or refinanced.
RATINGALERT: Ratings are placed on RatingAlert to notify investors that
there is a reasonable probability of a rating change and the likely direction of
such change. These are designated as "Positive," indicating a potential upgrade,
"Negative," for a potential downgrade, or "Evolving", if ratings may be raised,
lowered or maintained. RatingAlert is typically resolved over a relatively short
period.
THOMSON BANKWATCH RATINGS DEFINITIONS
<TABLE>
<S> <C>
AAA Bonds rated AAA indicate that the ability to repay principal
and interest on a timely basis is very high.
AA Bonds rated AA indicate a superior ability to repay
principal and interest on a timely basis, with limited
incremental risk compared to issues rated in the highest
category.
A Bonds rated A indicate the ability to repay principal and
interest is strong. Issues rated A could be more vulnerable
to adverse developments (both internal and external) than
obligations with higher ratings.
BBB Bonds rated BBB indicate an acceptable capacity to repay
principal and interest. Issues rated BBB are, however, more
vulnerable to adverse developments (both internal and
external) than obligations with higher ratings.
BB While not investment grade, the BB rating suggests that the
likelihood of default is considerably less than for
lower-rated issues. However, there are significant
uncertainties that could affect the ability to adequately
service debt obligations.
B Issues rated B show a higher degree of uncertainty and
therefore greater likelihood of default than higher-rated
issues. Adverse developments could well negatively affect
the payment of interest and principal on a timely basis.
CCC Issues rated "CCC" clearly have a high likelihood of
default, with little capacity to address further adverse
changes in financial circumstances.
CC "CC" is applied to issues that are subordinate to other
obligations rated "CCC" and are afforded less protection in
the event of bankruptcy or reorganization.
D Default
</TABLE>
Ratings in the Long-Term Debt categories may include a plus (+) or minus (-)
designation, which indicates where within the respective category the issue is
placed.
SHORT-TERM RATINGS
<TABLE>
<S> <C>
TBW-1 The highest category; indicates a very high likelihood that
principal and interest will be paid on a timely basis.
TBW-2 The second-highest category; while the degree of safety
regarding timely repayment of principal and interest is
strong, the relative degree of safety is not as high as for
issues rated "TBW-1".
TBW-3 The lowest investment-grade category; indicates that while
the obligation is more susceptible to adverse developments
(both internal and external) than those with higher ratings,
the capacity to service principal and interest in a timely
fashion is considered adequate.
TBW-4 The lowest rating category; this rating is regarded as
non-investment grade and therefore speculative.
</TABLE>
S-40
<PAGE>
INVESTMENT LIMITATIONS
FUNDAMENTAL POLICIES
The following investment limitations are fundamental policies of the Trust
and may not be changed without shareholder approval.
A Fund may not:
1. With respect to 75% of its total assets, (i) purchase securities of any
issuer (except securities issued or guaranteed by the United States
Government, its agencies or instrumentalities) if, as a result, more than 5%
of its total assets would be invested in the securities of such issuer; or
(ii) acquire more than 10% of the outstanding voting securities of any one
issuer. This restriction does not apply to the SEI VP International Fixed
Income and SEI VP Emerging Markets Debt Funds. The SEI VP Prime Obligation
Fund may invest up to 25% of its total assets without regard to this
restriction as permitted by Rule 2a-7 under the 1940 Act.
2. Purchase any securities which could cause more than 25% of its total assets
to be invested in the securities of one or more issuers conducting their
principal business activities in the same industry, provided that this
limitation does not apply to investments in securities issued or guaranteed
by the United States Government, it agencies or instrumentalities (and, in
the case of the SEI VP Prime Obligation Fund, to securities issued or
guaranteed by domestic banks).
3. Borrow money in an amount exceeding 33 1/3% of the value of its total
assets, provided that, for purposes of this limitation, investment
strategies which either obligate a Fund to purchase securities or require a
Fund to segregate assets are not considered to be borrowings. To the extent
that its borrowings exceed 5% of its assets, (i) all borrowings will be
repaid before making additional investments and any interest paid on such
borrowings will reduce income; and (ii) asset coverage of at least 300% is
required.
4. Make loans if, as a result, more than 33 1/3% of its total assets would be
loaned to other parties, except that each Fund may: (i) purchase or hold
debt instruments in accordance with its investment objective and policies;
(ii) enter into repurchase agreements; and (iii) lend its securities.
5. Purchase or sell real estate, physical commodities, or commodities
contracts, except that each Fund may purchase (i) marketable securities
issued by companies which own or invest in real estate (including real
estate investment trusts), commodities, or commodities contracts, and
(ii) commodities contracts relating to financial instruments, such as
financial futures contracts and options on such contracts.
6. Act as an underwriter of securities of other issuers except as it may be
deemed an underwriter in selling a portfolio security.
7. Invest in interests in oil, gas or other mineral exploration or development
programs and oil, gas or mineral leases.
NON-FUNDAMENTAL POLICIES
The following investment limitations are non-fundamental policies of the
Trust and may be changed without shareholder approval.
A Fund may not:
1. Pledge, mortgage or hypothecate assets except to secure borrowings permitted
by the Fund's fundamental limitation on borrowing.
2. Invest in companies for the purpose of exercising control.
S-41
<PAGE>
3. Purchase securities on margin or effect short sales, except that each Fund
may (i) obtain short-term credits as necessary for the clearance of security
transactions, (ii) provide initial and variation margin payments in
connection with transactions involving futures contracts and options on such
contracts, and (iii) make short sales "against the box" or in compliance
with the SEC's position regarding the asset segregation requirements of
section 18 of the 1940 Act.
4. Invest its assets in securities of any investment company, except as
permitted by the 1940 Act or any rule or order thereunder.
5. Purchase or hold illiquid securities, I.E., securities that cannot be
disposed of for their approximate carrying value in seven days or less
(which includes repurchase agreements and time deposits maturing in more
than seven days) if, in the aggregate, more than 15% of its net assets would
be invested in illiquid securities (10% for the SEI VP Prime Obligation
Fund).
6. Purchase securities which are not readily marketable if, in the aggregate,
more than 15% of its total assets would be invested in such securities (10%
for the SEI VP Prime Obligation Fund).
THE ADMINISTRATOR AND TRANSFER AGENT
SEI Investments Fund Management ("SEI Management" or the "Administrator")
provides the Trust with overall administrative services, regulatory reporting,
all necessary office space, equipment, personnel and facilities, and acts as
dividend disbursing agent. SEI Management also serves as transfer agent (the
"Transfer Agent") for the Funds. For these administrative services, SEI
Management is entitled to a fee, which is calculated daily and paid monthly, as
a percentage of the average daily net assets of each Fund at the following
rates:
<TABLE>
<CAPTION>
FUND ADMINISTRATION FEE
- ------------------------------------------------------------ ------------------
<S> <C>
SEI VP Large Cap Value Fund................................. 0.35%
SEI VP Large Cap Growth Fund................................ 0.35%
SEI VP S&P 500 Index Fund................................... 0.22%
SEI VP Small Cap Value Fund................................. 0.35%
SEI VP Small Cap Growth Fund................................ 0.35%
SEI VP International Equity Fund............................ 0.45%
SEI VP Emerging Markets Equity Fund......................... 0.65%
SEI VP Bond Index Fund...................................... 0.35%
SEI VP Core Fixed Income Fund............................... 0.28%
SEI VP High Yield Bond...................................... 0.35%
SEI VP International Fixed Income Fund...................... 0.60%
SEI VP Emerging Markets Debt Fund........................... 0.65%
SEI VP Prime Obligation Fund................................ 0.42%
</TABLE>
SEI Investments Management Corporation ("SIMC") and SEI Management have
agreed, on a voluntary basis, to waive a portion of their
Management/Administration Fees and/or reimburse Other Expenses to the extent
necessary to keep Total Operating Expenses from exceeding certain levels. The
Total Operating Expenses reflect anticipated fee waivers.
The Administration Agreement provides that the Administrator shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Trust in connection with the matters to which the Administration Agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of SEI Management in the performance of its duties or
from reckless disregard of its duties and obligations thereunder.
After an initial term, the continuance of the Administration Agreement must
be specifically approved: (i) by the vote of a majority of the Trustees or by
the vote of a majority of the outstanding voting securities of the Fund; and
(ii) by the vote of a majority of the Trustees of the Trust who are not parties
to the
S-42
<PAGE>
Administration Agreement or an "interested person" (as that term is defined in
the 1940 Act) of any party thereto, cast in person at a meeting called for the
purpose of voting on such approval. The Administration Agreement is terminable
at any time as to any Fund without penalty by the Trustees of the Trust, by a
vote of a majority of the outstanding shares of the Fund or by SEI Management on
not less than 30 days' nor more than 60 days' written notice. This Agreement
shall not be assignable by either party without the written consent of the other
party.
The Administrator, a Delaware business trust, has its principal business
offices at Oaks, Pennsylvania. SIMC, a wholly-owned subsidiary of SEI
Investments Company ("SEI Investments"), is the owner of all beneficial interest
in the Administrator. SEI Investments and its subsidiaries and affiliates,
including the Administrator, are leading providers of funds evaluation services,
trust accounting systems, and brokerage and information services to financial
institutions, institutional investors, and money managers. The Administrator and
its affiliates also serve as administrator or sub-administrator to the following
of the mutual funds: The Achievement Funds Trust, The Advisors' Inner Circle
Fund, Alpha Select Funds, Amerindo Funds, Inc., The Arbor Fund, ARK Funds,
Armada Funds, Armada Advantage Fund, Bishop Street Funds, Boston 1784
Funds-Registered Trademark-, CNI Charter Funds, CUFUND, The Expedition Funds,
First American Funds, Inc., First American Investment Funds, Inc., First
American Strategy Funds, Inc., Friends Ivory Funds, HighMark Funds, Huntington
Funds, Huntington VA Fund, The Nevis Funds, Inc., Oak Associates Funds, The
Parkstone Group of Funds, The PBHG Funds, Inc., PBHG Insurance Series Fund,
Inc., The Pillar Funds, SEI Asset Allocation Trust, SEI Daily Income Trust, SEI
Index Funds, SEI Institutional International Trust, SEI Institutional
Investments Trust, SEI Institutional Managed Trust, SEI Liquid Asset Trust, SEI
Tax Exempt Trust, STI Classic Funds, STI Classic Variable Trust, TIP Funds, UAM
Funds Trust, UAM Funds, Inc. and UAM Funds, Inc. II.
If operating expenses of any Fund exceed applicable limitations, SEI
Management will pay such excess. SEI Management will not be required to bear
expenses of any Fund to an extent which would result in the Fund's inability to
qualify as a regulated investment company under provisions of the Code. The term
"expenses" is defined in such laws or regulations, and generally excludes
brokerage commissions, distribution expenses, taxes, interest and extraordinary
expenses.
THE ADVISER AND THE SUB-ADVISERS
SIMC (or the "Adviser") is a wholly-owned subsidiary of SEI Investments a
financial services company. The principal business address of SIMC and SEI
Investments is Oaks, Pennsylvania, 19456. SEI Investments was founded in 1968,
and is a leading provider of investment solutions to banks, institutional
investors, investment advisers and insurance companies. Affiliates of SIMC have
provided consulting advice to institutional investors for more than 20 years,
including advice regarding selection and evaluation of money managers. SIMC and
its affiliates currently serve as manager or administrator to more than 50
investment companies, including more than 460 funds, with more than
$225 billion in assets as of December 31, 1999.
SIMC is the investment Adviser for each of the Funds, and operates as a
"manager of managers." As Adviser, SIMC oversees the investment advisory
services provided to the Funds and may manage the cash portion of the Funds'
assets. Pursuant to separate sub-advisory agreements with SIMC, and under the
supervision of the Adviser and the Board of Trustees, a number of sub-advisers
(the "Sub-Advisers") are responsible for the day-to-day investment management of
all or a discrete portion of the assets of the Funds. Sub-Advisers are selected
for the Funds based primarily upon the research and recommendations of SIMC,
which evaluates quantitatively and qualitatively a Sub-Adviser's skills and
investment results in managing assets for specific asset classes, investment
styles and strategies.
Subject to Board review, SIMC allocates and, when appropriate, reallocates
the Funds' assets among Sub-Advisers, monitors and evaluates Sub-Adviser
performance, and oversees Sub-Adviser compliance with the Funds' investment
objectives, policies and restrictions. SIMC HAS ULTIMATE RESPONSIBILITY FOR THE
S-43
<PAGE>
INVESTMENT PERFORMANCE OF THE FUNDS DUE TO ITS RESPONSIBILITY TO OVERSEE
SUB-ADVISERS AND RECOMMEND THEIR HIRING, TERMINATION AND REPLACEMENT.
SIMC and the Trust have obtained an exemptive order from the Securities and
Exchange Commission (the "SEC") that permits SIMC, with the approval of the
Trust's Board of Trustees, to retain Sub-Advisers unaffiliated with SIMC for the
Funds without submitting the sub-advisory agreements to a vote of the Fund's
shareholders. The exemptive relief permits SIMC to disclose only the aggregate
amount payable by SIMC to the Sub-Advisers under all such sub-advisory
agreements for each Fund. The Funds will notify shareholders in the event of any
addition or change in the identity of its Sub-Advisers.
For its management services, SIMC is entitled to a fee, which is calculated
daily and paid monthly, at the following annual rates (shown as a percentage of
the average daily net assets of each Fund):
<TABLE>
<CAPTION>
FUND ADVISORY FEE
- ------------------------------------------------------------ ------------
<S> <C>
SEI VP Large Cap Value Fund................................. 0.35%
SEI VP Large Cap Growth Fund................................ 0.40%
SEI VP S&P 500 Index Fund................................... 0.03%
SEI VP Small Cap Value Fund................................. 0.65%
SEI VP Small Cap Growth Fund................................ 0.65%
SEI VP International Equity Fund............................ 0.51%
SEI VP Emerging Markets Equity Fund......................... 1.05%
SEI VP Core Fixed Income Fund............................... 0.28%
SEI VP Bond Index Fund...................................... 0.07%
SEI VP High Yield Bond Fund................................. 0.49%
SEI VP International Fixed Income Fund...................... 0.30%
SEI VP Emerging Markets Debt Fund........................... 0.85%
SEI VP Prime Obligation Fund................................ 0.08%
</TABLE>
SIMC pays the Sub-Advisers a fee out of its advisory fee, which fee is based
on a percentage of the average monthly market value of the assets managed by
each Sub-Adviser.
THE SUB-ADVISERS
ACADIAN ASSET MANAGEMENT, INC.--Acadian Asset Management, Inc. ("Acadian")
serves as a Sub-Adviser for a portion of the assets of the SEI VP International
Equity Fund. As of November 30, 1999, Acadian managed approximately
$5.3 billion in assets invested globally.
ALLIANCE CAPITAL MANAGEMENT L.P.--Alliance Capital Management L.P.
("Alliance") serves as a Sub-Adviser for a portion of the assets of the SEI VP
Large Cap Growth Fund. As of November 30, 1999, Alliance managed over
$344.3 billion in assets.
ARTISAN PARTNERS LIMITED PARTNERSHIP--Artisan Partners Limited Partnership
("Artisan") serves as a Sub-Adviser for a portion of the assets of the SEI VP
Small Cap Value Fund. As of November 30, 1999, Artisan had approximately
$5.1 billion in assets under management.
BLACKROCK FINANCIAL MANAGEMENT, INC.--BlackRock Financial Management, Inc.
("BlackRock") serves as a Sub-Adviser to a portion of the assets of the SEI VP
Core Fixed Income Fund. As of November 30, 1999, BlackRock had $160.4 billion in
assets under management.
BLACKROCK INTERNATIONAL, LTD.--BlackRock International, Ltd. ("BlackRock
International") serves as a sub-adviser to a potion of the assets of the SEI VP
International Equity Fund. As of November 30, 1999, BlackRock International has
approximately $2 billion in assets under management.
CAPITAL GUARDIAN TRUST COMPANY--Capital Guardian Trust Company ("CGTC")
serves as a Sub-Adviser to a portion of the assets of the SEI VP International
Equity Fund. CGTC has managed
S-44
<PAGE>
international portfolios since 1978, and as of November 30, 1999, managed a
total of over $108 billion primarily for institutional clients.
CORONATION ASSET MANAGEMENT (PROPRIETARY) LIMITED--Coronation Asset
Management (Proprietary) Limited ("Coronation") serves as a Sub-Adviser for a
portion of the assets of the SEI VP Emerging Markets Equity Fund. As of
November 30, 1999, Coronation had approximately $5.8 billion in assets under
management.
CREDIT SUISSE ASSET MANAGEMENT, LLC--Credit Suisse Asset Management, LLC
("CSAM") serves as the Sub-Adviser for the SEI VP High Yield Bond Fund. As of
November 30, 1999, CSAM managed approximately $196 billion in assets.
CREDIT SUISSE ASSET MANAGEMENT LIMITED--Credit Suisse Asset Management
Limited ("Credit Suisse") acts as a Sub-Adviser for a portion of the assets of
the SEI VP Emerging Markets Equity Fund. Credit Suisse managed approximately
$186 billion as of November 30, 1999.
LSV ASSET MANAGEMENT, L.P.--LSV Asset Management, L.P. ("LSV") serves as a
Sub-Adviser to a portion of the assets of the SEI VP Large Cap Value Fund. As of
November 30, 1999, LSV managed approximately $6 billion in client assets.
MAZAMA CAPITAL MANAGEMENT, LLC--Mazama Capital Management, LLC ("Mazama")
serves as Sub-Adviser for a portion of the assets of the SEI VP Small Cap Growth
Fund. As of November 30, 1999, Mazama had approximately $132.3 million in assets
under management.
MELLON BOND ASSOCIATES, LLP--Mellon Bond Associates, LLP ("MBA") serves as
Sub-Adviser to the SEI VP Bond Index Fund. As of November 30, 1999, MBA had
approximately $50 billion in assets under management.
MELLON EQUITY ASSOCIATES, LLP--Mellon Equity Associates, LLP ("Mellon
Equity") serves as a Sub-Adviser to a portion of the assets of each of the SEI
VP Large Cap Value Fund and the SEI VP Small Cap Value Fund. Mellon Equity had
discretionary management authority with respect to approximately $35.7 billion
of assets as of November 30, 1999.
MORGAN STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC.--Morgan Stanley Dean
Witter Investment Management Inc. ("MSDW") acts as a Sub-Adviser for a portion
of the assets of the SEI VP Emerging Markets Equity Fund. As of November 30,
1999, MSDW had approximately $166 billion in assets under management.
NICHOLAS-APPLEGATE CAPITAL MANAGEMENT--Nicholas-Applegate Capital Management
("Nicholas-Applegate") serves as a Sub-Adviser to a portion of the assets of the
SEI VP Small Cap Growth Fund. As of November 30, 1999, Nicholas-Applegate had
discretionary management authority with respect to approximately $32.8 billion
of assets.
NOMURA CORPORATE RESEARCH AND ASSET MANAGEMENT INC.--Nomura Corporate
Research and Asset Management Inc. ("Nomura") serves as an adviser for a portion
of the assets of the SEI VP High Yield Bond Fund. As of November 30, 1999,
Nomura had approximately $2.6 billion in assets under management.
OECHSLE INTERNATIONAL ADVISERS, LLC--Oechsle International Advisers LLC
("Oechsle") serves as a Sub-Adviser to a portion of the assets of the SEI VP
International Equity Fund. As of November 30, 1999, Oechsle had approximately
$16.8 million in assets under management.
PROVIDENT INVESTMENT COUNSEL, INC.--Provident Investment Counsel, Inc.
("Provident") serves as a Sub-Adviser for a portion of the assets of the SEI VP
Large Cap Growth Fund. As of November 30, 1999, Provident had over $18 billion
in client assets under management.
S-45
<PAGE>
RS INVESTMENT MANAGEMENT, L.P.--RS Investment Management, L.P. ("RSIM"),
acts as a Sub-Adviser for a portion of the assets of the SEI VP Small Cap Growth
Fund. RSIM is a registered investment adviser and as of November 30, 1999 had
approximately $6.5 billion in assets under management.
ROBERT W. BAIRD & CO., INCORPORATED--Robert W. Baird & Co., Incorporated
("Baird") serves as a Sub-Advisor for a portion of the assets of SEI VP Core
Fixed Income Fund. As of November 30, 1999, Baird had approximately $6.4 billion
in assets under management.
SALOMON BROTHERS ASSET MANAGEMENT INC--Salomon Brothers Asset Management Inc
("SBAM") serves as a Sub-Adviser for the assets of the SEI VP Emerging Markets
Debt Fund. SBAM is a registered investment adviser and as of November 30, 1999,
had approximately $24.4 billion in client assets under management.
SANFORD C. BERNSTEIN & CO., INC.--Sanford C. Bernstein & Co., Inc.
("Bernstein"), serves as a Sub-Adviser to a portion of the assets of the SEI VP
Large Cap Value Fund. Bernstein managed approximately $84.8 billion in assets as
of November 30, 1999.
SAWGRASS ASSET MANAGEMENT, LLC--Sawgrass Asset Management, LLC ("Sawgrass")
serves as a Sub-Adviser for a portion of the assets of the SEI VP Small Cap
Growth Fund. As of November 30, 1999, Sawgrass had approximately $563 million in
assets under management.
SCHRODER INVESTMENT MANAGEMENT NORTH AMERICA INC.--Schroder Investment
Management North America Inc. ("Schroders") serves as a Sub-Advisor for a
portion of the assets of the SEI VP Emerging Markets Equity Fund. As of November
30, 1999, Schroders had approximately $48 billion in assets under management.
SECURITY CAPITAL GLOBAL CAPITAL MANAGEMENT INCORPORATED--Security Capital
Global Capital Management Incorporated ("Security Capital") serves as
Sub-Adviser for a portion of the assets of the SEI V.P. Small Cap Value Fund. As
of November 30, 1999, Security Capital had approximately $1.3 billion in assets
under management.
SG PACIFIC ASSET MANAGEMENT, INC., AND SGY ASSET MANAGEMENT (SINGAPORE)
LIMITED AND SG YAMAICHI ASSET MANAGEMENT CO., LTD.--SG Pacific Asset Management,
Inc. ("SG Pacific") and SGY Asset Management (Singapore) Ltd. ("SGY") jointly
serve as Sub-Adviser for a portion of the assets of the SEI VP International
Equity and SEI VP Emerging Markets Equity Funds. SG Yamaichi and its affiliates
currently manage over $24.4 billion in assets worldwide.
STRATEGIC FIXED INCOME, L.L.C.--Strategic Fixed Income, L.L.C. ("Strategic")
serves as the Sub-Adviser for the SEI VP International Fixed Income Fund. As of
November 30, 1999, Strategic managed $3.8 billion of client assets. The
principal address of Strategic is 1001 Nineteenth Street North, Suite 1720,
Arlington, Virginia 22209.
TCW INVESTMENT MANAGEMENT COMPANY--TCW Investment Management Company ("TCW")
acts as a Sub-Adviser for a portion of the assets of the SEI VP Large Cap Growth
Fund. As of November 30, 1999, TCW had approximately $66.2 billion of assets
under management.
WALL STREET ASSOCIATES--Wall Street Associates ("Wall Street") serves as a
Sub-Adviser for a portion of the assets of the SEI VP Small Cap Growth Fund. As
of November 30, 1999, Wall Street had approximately $1.8 billion in assets under
management.
WELLINGTON MANAGEMENT COMPANY LLP--Wellington Management Company LLP
("Wellington Management"), serves as the investment Sub-Adviser for the SEI VP
Prime Obligation Fund. As of November 30, 1999, Wellington Management had
discretionary management authority with respect to approximately $227 billion in
assets.
S-46
<PAGE>
WESTERN ASSET MANAGEMENT COMPANY--Western Asset Management Company
("Western") serves as a Sub-Adviser for a portion of the assets of the SEI VP
Core Fixed Income Fund. As of November 30, 1999, Western managed approximately
$59.5 billion in client assets.
WORLD ASSET MANAGEMENT, LLC--World Asset Management, LLC ("World") serves as
a Sub-Adviser to the S&P 500 Index Fund. As of November 30, 1999, World had
approximately $20.4 billion in assets under management.
The Advisory Agreement and certain of the sub-advisory agreements provide
that SIMC (or any Sub-Adviser) shall not be protected against any liability to
the Trust or its shareholders by reason of willful misfeasance, bad faith or
gross negligence on its part in the performance of its duties or from reckless
disregard of its obligations or duties thereunder. In addition, certain of the
sub-advisory agreements provide that the Sub-Adviser shall not be protected
against any liability to the Trust or its shareholders by reason of willful
misfeasance, bad faith or negligence on its part in the performance of its
duties, or from reckless disregard of its obligations or duties thereunder.
The continuance of each advisory and sub-advisory agreement must be
specifically approved at least annually (i) by the vote of a majority of the
outstanding shares of that Fund or by the Trustees, and (ii) by the vote of a
majority of the Trustees who are not parties to such agreement or "interested
persons" of any party thereto, cast in person at a meeting called for the
purpose of voting on such approval. Each advisory or sub-advisory agreement will
terminate automatically in the event of its assignment, and is terminable at any
time without penalty by the Trustees of the Trust or, with respect to a Fund, by
a majority of the outstanding shares of that Fund, on not less than 30 days' nor
more than 60 days' written notice to the Adviser or Sub-Adviser, or by the
Adviser or Sub-Adviser on 90 days' written notice to the Trust.
DISTRIBUTION AND SHAREHOLDER SERVICING
SEI Investments Distribution Co. (the "Distributor") serves as each Fund's
distributor pursuant to a distribution agreement (the "Distribution Agreement")
with the Trust. No compensation is paid to the Distributor under the
Distribution Agreement for distribution services for the shares of any Fund.
The Fund may execute brokerage or other agency transactions through the
Distributor, for which the Distributor may receive compensation.
The Distributor may, from time to time and at its own expense, provide
promotional incentives, in the form of cash or other compensation, to certain
financial institutions whose representatives have sold or are expected to sell
significant amounts of the Funds' shares.
The Distributor, a wholly-owned subsidiary of SEI Investments, and the Trust
are parties to a distribution agreement ("Distribution Agreement"). The
Distribution Agreement shall be reviewed and ratified at least annually (i) by
the Trust's Trustees or by the vote of a majority of the outstanding shares of
the Trust, and (ii) by the vote of a majority of the Trustees of the Trust who
are not parties to the Distribution Agreement or interested persons (as defined
in the 1940 Act) of any party to the Distribution Agreement, cast in person at a
meeting called for the purpose of voting on such approval. The Distribution
Agreement will terminate in the event of any assignment, as defined in the 1940
Act, and is terminable with respect to a particular Fund on not less than sixty
days' notice by the Trust's Trustees, by vote of a majority of the outstanding
shares of such Fund or by the Distributor. The Distributor will receive no
compensation for the distribution of Fund shares.
The Prime Obligation Fund has adopted a shareholder servicing plan for its
Class B Shares (the "Service Plan"). Under the Service Plan, the Distributor may
perform, or may compensate other service providers for performing, the following
shareholder services: maintaining client accounts; arranging for bank wires;
responding to client inquiries concerning services provided on investments;
assisting clients in changing dividend options, account designations and
addresses; sub-accounting; providing information on share positions to clients;
forwarding shareholder communications to clients; processing purchase,
S-47
<PAGE>
exchange and redemption orders; and processing dividend payments. Under the
Service Plan, the Distributor may retain as a profit any difference between the
fee it receives and the amount it pays to third parties.
Although banking laws and regulations prohibit banks from distributing
shares of open-end investment companies such as the Trust, according to an
opinion issued to the staff of the SEC by the Office of the Comptroller of the
Currency, financial institutions are not prohibited from acting in other
capacities for investment companies, such as providing shareholder services.
Should future legislative, judicial or administrative action prohibit or
restrict the activities of financial institutions in connection with providing
shareholder services, the Trust may be required to alter materially or
discontinue its arrangements with such financial institutions.
CODE OF ETHICS
The Board of Trustees of SEI Insurance Products Trust has adopted a Code of
Ethics pursuant to Rule 17j-1 under the Investment Company Act of 1940. In
addition, the Investment Adviser, Sub-Adviser and Distributor have adopted Codes
of Ethics pursuant to Rule 17j-1: These Codes of Ethics apply to the personal
investing activities of trustees, officers and certain employees ("access
persons"). Rule 17j-1 and the Codes are designed to prevent unlawful practices
in connection with the purchase or sale of securities by access persons. Under
each Code of Ethics, access persons are permitted to engage in personal
securities transactions, but are required to report their personal securities
transactions for monitoring purposes. In addition, certain access persons are
required to obtain approval before investing in initial public offerings or
private placements. Copies of these Codes of Ethics are on file with the
Securities and Exchange Commission, and are available to the public.
TRUSTEES AND OFFICERS OF THE TRUST
The management and affairs of the Trust are supervised by the Trustees under
the laws of the Commonwealth of Massachusetts. The Trustees have approved
contracts under which, as described above, certain companies provide essential
management services to the Trust.
The Trustees and Executive Officers of the Trust, their respective dates of
birth, and their principal occupations for the last five years are set forth
below. Each may have held other positions with the named companies during that
period. Unless otherwise noted, the business address of each Trustee and each
Executive Officer is SEI Investments Company, Oaks, Pennsylvania 19456. Certain
officers of the Trust also serve as officers of some or all of the following:
The Achievement Funds Trust, The Advisors' Inner Circle Fund, Alpha Select
Funds, The Arbor Fund, ARK Funds, Armada Funds, Bishop Street Funds, Boston 1784
Funds-Registered Trademark-, CNI Charter Funds, CUFUND, The Expedition Funds,
First American Funds, Inc., First American Investment Funds, Inc., First
American Strategy Funds, Inc., Friends Ivory Funds, HighMark Funds, Huntington
Funds, Huntington VA Fund, The Nevis Fund, Inc., Oak Associates Funds, The
Parkstone Advantage Fund, The Parkstone Group of Funds, The PBHG Funds, Inc.,
PBHG Insurance Series Fund, Inc., The Pillar Funds, SEI Asset Allocation Trust,
SEI Daily Income Trust, SEI Index Funds, SEI Institutional International Trust,
SEI Institutional Investments Trust, SEI Institutional Managed Trust, SEI Liquid
Asset Trust, SEI Tax Exempt Trust, STI Classic Funds, STI Classic Variable Trust
and TIP Funds, each of which is an open-end management investment company
managed by SEI Management or its affiliates and distributed by SEI Investments
Distribution Co.
ROBERT A. NESHER (DOB 08/17/46)--Chairman of the Board of
Trustees*--Currently performs various services on behalf of SEI Investments for
which Mr. Nesher is compensated. Executive Vice President of SEI Investments,
1986-1994. Director and Executive Vice President of the Adviser, the
Administrator and the Distributor, 1981-1994. Trustee of The Advisors' Inner
Circle Fund, The Arbor Fund, Bishop Street Funds, Boston 1784
Funds-Registered Trademark-, The Expedition Funds, Oak Associates Funds, Pillar
Funds, SEI Asset Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI
Institutional Managed Trust, SEI Institutional International Trust, SEI
Institutional Investments Trust, SEI Liquid Asset Trust and SEI Tax Exempt
Trust.
S-48
<PAGE>
WILLIAM M. DORAN (DOB 05/26/40)--Trustee*--1701 Market Street, Philadelphia,
PA 19103. Partner, Morgan, Lewis & Bockius LLP (law firm) since 1976 counsel to
the Trust, SEI Investments, the Adviser, the Administrator and the Distributor.
Director and Secretary of SEI Investments. Trustee of The Advisors' Inner Circle
Fund. The Arbor Fund, The Expedition Funds, Oak Associates Funds, SEI Asset
Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI Institutional
Managed Trust, SEI Institutional International Trust, SEI Institutional
Investments Trust, SEI Liquid Asset Trust and SEI Tax Exempt Trust.
F. WENDELL GOOCH (DOB 12/03/32)--Trustee**--President, Orange County
Publishing Co., Inc.; Publisher, Paoli News and Paoli Republican; and Editor,
Paoli Republican, October 1981-January 1997. President, H&W Distribution, Inc.,
since July 1984. Executive Vice President, Trust Department, Harris Trust and
Savings Bank and Chairman of the Board of Directors of The Harris Trust Company
of Arizona before January 1981. Trustee of SEI Asset Allocation Trust, SEI Daily
Income Trust, SEI Index Funds, SEI Institutional Managed Trust, SEI
Institutional International Trust, SEI Institutional Investments Trust, SEI
Liquid Asset Trust, SEI Tax Exempt Trust, STI Classic Funds and STI Classic
Variable Trust.
ROSEMARIE B. GRECO (DOB 3/31/46)--Trustee--Principal, Grecoventures
(consulting firm) since August 1997; President, Corestates Financial Corp., from
1991-1997; Chief Executive Officer and President, Corestates Bank, N.A., from
1991-1997; Director, Sonoco, Inc.; Director, PECO Energy; Director, Radian,
Inc.; Trustee, Pennsylvania Real Estate Investment Trust; Director, Cardone
Industries, Inc.; Director, Genuardi Markets, Inc.; Director, PRWT Comserve,
Inc.
JAMES M. STOREY (DOB 04/12/31)--Trustee**--Partner, Dechert Price & Rhoads,
from September 1987-December 1993. Trustee of The Advisors' Inner Circle Fund,
The Arbor Fund, The Expedition Funds, Oak Associates Funds, SEI Asset Allocation
Trust, SEI Daily Income Trust, SEI Index Funds, SEI Institutional Managed Trust,
SEI Institutional International Trust, SEI Institutional Investments Trust, SEI
Liquid Asset Trust, and SEI Tax Exempt Trust.
GEORGE J. SULLIVAN, JR. (DOB 11/13/42)--Trustee**--Chief Executive Officer,
Newfound Consultants Inc. since April 1997. General Partner, Teton Partners,
L.P., June 1991-December 1996; Chief Financial Officer, Noble Partners, L.P.,
March 1991-December 1996; Treasurer and Clerk, Peak Asset Management, Inc.,
since 1991; Trustee, Navigator Securities Lending Trust, since 1995, Trustee of
The Advisors' Inner Circle Fund, The Arbor Fund, The Expedition Funds, Oak
Associate Funds, SEI Asset Allocation Trust, SEI Daily Income Trust, SEI Index
Funds, SEI Institutional Managed Trust, SEI Institutional International Trust,
SEI Institutional Investments Trust, SEI Liquid Asset Trust, and SEI Tax Exempt
Trust.
EDWARD D. LOUGHLIN (DOB 03/07/51)--President and Chief Executive
Officer--Executive Vice President and President--Asset Management Division of
SEI Investments, since 1993. Executive Vice President of the Adviser and the
Administrator since 1994. Senior Vice President, SEI Investments, 1986-1991;
Vice President of the Distributor 1981-1986.
TIMOTHY D. BARTO (DOB 03/28/68)--Vice President and Assistant
Secretary--Vice President and Assistant Secretary of the Adviser, the
Administrator and Distributor since December 1999. Associate at Dechert Price &
Rhoads (1997-1999). Associate at Richter, Miller & Finn (1994-1997).
TODD B. CIPPERMAN (DOB 02/14/66)--Vice President and Assistant
Secretary--General Counsel of SEI Investments, the Advisor, the Administrator
and the Distributor since 2000, Vice President, Assistant Secretary of SEI
Investments, the Adviser, the Administrator and the Distributor since 1995.
Associate, Dewey Ballantine (law firm), 1994-1995. Associate, Winston & Strawn
(law firm), 1991-1994.
JAMES R. FOGGO (DOB 06/30/64)--Vice President and Assistant Secretary--Vice
President and Assistant Secretary of SEI Investments since January 1998. Vice
President of the Administrator and Distributor since May 1999. Vice President
and Assistant Secretary of the Adviser Corporation since December 1999.
Associate, Paul Weiss, Rifkind, Wharton & Garrison (law firm), 1998, Associate,
Baker &
S-49
<PAGE>
McKenzie (law firm), 1995-1998. Associate, Battle Fowler L.L.P. (law firm),
1993-1995. Operations Manager, The Shareholder Services Group, Inc., 1986-1990.
LYDIA A. GAVALIS (DOB 06/05/64)--Vice President and Assistant
Secretary--Vice President and Assistant Secretary of SEI Investments, the
Adviser, the Administrator and the Distributor since 1998. Assistant General
Counsel and Director of Arbitration, Philadelphia Stock Exchange, 1989-1998.
CHRISTINE M. MCCULLOUGH (DOB 12/05/60)--Vice President and Assistant
Secretary--Employed by SEI Investments since November 1, 1999. Vice President
and Assistant Secretary of the Adviser, the Administrator and Distributor since
December 1999. Associate at White and Williams LLP, 1991-1999. Associate at
Montgomery, Walker and Rhoads, 1990-1991.
CYNTHIA M. PARRISH (DOB 10/23/59)--Vice President and Assistant
Secretary--Vice President and Assistant Secretary of the SEI Investments, the
Adviser, the Administrator and the Distributor since August 1997. Branch Chief,
Division of Enforcement, U.S. Securities and Exchange Commission, January
1995-August 1997. Senior Counsel--Division of Enforcement, U.S. Securities and
Exchange Commission, September 1992-January 1995. Staff Attorney--Division of
Enforcement, U.S. Securities and Exchange Commission, September 1990-September
1992.
RICHARD W. GRANT (DOB 10/25/45)--Secretary--1701 Market Street,
Philadelphia, PA 19103. Partner, Morgan, Lewis & Bockius LLP (law firm), since
1989, counsel to the Trust, SEI Investments, the Adviser, the Administrator and
the Distributor.
MARK E. NAGLE (DOB 10/20/59)--Controller and Chief Financial
Officer--President and Senior Vice President of Fund Accounting and
Administration of the Administrator since 1998. Vice President of Fund
Accounting and Administration of the Administrator, 1996-1998.Vice President of
the Distributor since December 1997. Vice President, Fund Accounting, BISYS Fund
Services September 1995 to November 1996. Senior Vice President and Site
Manager, Fidelity Investments 1981 to September 1995.
- ------------------------
*Messrs. Nesher and Doran are Trustees who may be deemed to be "interested
persons" of the Trust as the term is defined in the 1940 Act.
**Messrs. Gooch, Storey and Sullivan serve as members of the Audit Committee of
the Trust.
Compensation of officers and affiliated Trustees of the Trust is paid by SEI
Management. The Trust pays the fees for unaffiliated Trustees.
Mr. Edward W. Binshadler serves as a consultant to the Audit Committee and
receives as compensation $5,000 per Audit Committee meeting attended.
PERFORMANCE
From time to time, each Fund may advertise yield and/or total return. These
figures will be based on historical earnings and are not intended to indicate
future performance.
The current yield of the SEI VP Prime Obligation Fund is calculated daily
based upon the 7 days ending on the date of calculation ("base period"). The
yield is computed by determining the net change (exclusive of capital changes)
in the value of a hypothetical pre-existing shareholder account having a balance
of one share at the beginning of the period, subtracting a hypothetical charge
reflecting deductions from shareholder accounts and dividing such net change by
the value of the account at the beginning of the same period to obtain the base
period return and multiplying the result by (365/7). Realized and unrealized
gains and losses are not included in the calculation of the yield.
The SEI VP Prime Obligation Fund computes its effective compound yield by
determining the net changes, exclusive of capital changes, in the value of a
hypothetical pre-existing account having a balance of one share at the beginning
of the period, subtracting a hypothetical charge reflecting deductions from
shareholder accounts, and dividing the difference by the value of the account at
the beginning of the base
S-50
<PAGE>
period to obtain the base period return, and then compounding the base period
return by adding 1, raising the sum to a power equal to 365 divided by 7, and
subtracting 1 from the result, according to the following formula: Effective
Yield = [(Base Period Return + 1)TO THE POWER OF 365/7] - 1. The current and the
effective yields reflect the reinvestment of net income earned daily on
portfolio assets.
The yield of a non-money market Fund refers to the annualized income
generated by an investment in such Fund over a specified 30-day period ending on
the date of the most recent balance sheet. The yield is calculated by assuming
that the income generated by the investment during that period generated each
period over one year and is shown as a percentage of the investment. In
particular, yield will be calculated according to the following formula:
Yield = 2[(((a-b)/cd) + 1) to the power of 6 -1], where a =
dividends and interest earned during the period; b = expenses
accrued for the period (net of reimbursement); c = the current
daily number of shares outstanding during the period that were
entitled to receive dividends; and d = the maximum offering price
per share on the last day of the period.
Actual yield will depend on such variables as asset quality, average asset
maturity, the type of instruments a Fund invests in, changes in interest rates
on money market instruments, changes in the expenses of the Fund and other
factors.
The total return of a non-money market Fund refers to the average compounded
rate of return to a hypothetical investment for designated time periods
(including, but not limited to, the period from which the Fund commenced
operations through the specified date), assuming that the entire investment is
redeemed at the end of each period. In particular, total return will be
calculated according to the following formula:
P(1 + T)to the power of n = ERV, where P = a hypothetical initial
payment of $1,000; T = average annual total return; n = number of
years; and ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of the designated time period as of
the end of such period.
The Funds may, from time to time, compare their performance to other mutual
funds tracked by mutual fund rating services, to broad groups of comparable
mutual funds or to unmanaged indices which may assume investment of dividends
but generally do not reflect deductions for administrative and management costs.
From time to time the Trust may include the names of clients of the Adviser
in advertisements and/or sales literature for the Trust.
DETERMINATION OF NET ASSET VALUE
Each Fund's securities are valued by SEI Management. SEI Management values
securities pursuant to valuations provided by an independent pricing service
(generally the last quoted sale price) for each Fund except the SEI VP Prime
Obligation Fund. Fund's securities listed on a securities exchange for which
market quotations are available are valued at the last quoted sale price on each
Business Day (defined as days on which the New York Stock Exchange is open for
business ("Business Day")) or, if there is no such reported sale, at the most
recently quoted bid price. Unlisted securities for which market quotations are
readily available are valued at the most recently quoted bid price. The pricing
service may also use a matrix system to determine valuations. This system
considers such factors as security prices, yields, maturities, call features,
ratings and developments relating to specific securities in arriving at
valuations. The procedures of the pricing service and its valuations are
reviewed by the officers of the Trust under the general supervision of the
Trustees.
Information about the market value of each portfolio security may be
obtained by SEI Management from an independent pricing service. The pricing
service relies primarily on prices of actual market transactions as well as
trader quotations. However, the pricing service may use a matrix system to
S-51
<PAGE>
determine valuations of fixed income securities. This system considers such
factors as security prices, yields, maturities, call features, ratings and
developments relating to specific securities in arriving at valuations. The
procedures used by the pricing service and its valuations are reviewed by the
officers of the Trust under the general supervision of the Trustees.
Securities with remaining maturities of 60 days or less and all of the
securities of the SEI VP Prime Obligation Fund will be valued by the amortized
cost method, which involves valuing a security at its cost on the date of
purchase and thereafter (absent unusual circumstances) assuming a constant
amortization to maturity of any discount or premium, regardless of the impact of
fluctuations in general market rates of interest on the value of the instrument.
While this method provides certainty in valuation, it may result in periods
during which value, as determined by this method, is higher or lower than the
price the Trust would receive if it sold the instrument. During periods of
declining interest rates, the daily yield of a Fund may tend to be higher than a
like computation made by a company with identical investments utilizing a method
of valuation based upon market prices and estimates of market prices for all of
its portfolio securities. Thus, if the use of amortized cost by a Fund resulted
in a lower aggregate portfolio value on a particular day, a prospective investor
in a Fund would be able to obtain a somewhat higher yield that would result from
investment in a company utilizing solely market values, and existing
shareholders in the Fund would experience a lower yield. The converse would
apply during a period of rising interest rates.
The Trust's use of amortized cost valuation with respect to SEI VP Prime
Obligation Fund and the maintenance of the Fund net asset value at $1.00 are
permitted, provided certain conditions are met, by Rule 2a-7, promulgated by the
SEC under the 1940 Act. Under Rule 2a-7, as amended, a money market portfolio
must maintain a dollar-weighted average maturity of 90 days or less and not
purchase any instrument having a remaining maturity of more than 397 days. In
addition, money market funds may acquire only U.S. dollar denominated
obligations that present minimal credit risks and that are "eligible
securities." An "eligible security" is one that is (i) rated, at the time of
investment, by at least two NRSROs (one if it is the only organization rating
such obligation) in the highest short-term rating category or, if unrated,
determined to be of comparable quality (a "first tier security"), or (ii) rated
according to the foregoing criteria in the second highest short-term rating
category or, if unrated, determined to be of comparable quality ("second tier
security"). The Adviser will determine that an obligation presents minimal
credit risks or that unrated instruments are of comparable quality in accordance
with guidelines established by the Trustees. In addition, investments in second
tier securities are subject to the further constraints that (i) no more than 5%
of a money market portfolio's assets may be invested in such securities in the
aggregate, and (ii) any investment in such securities of one issuer is limited
to the greater of 1% of the Fund's total assets or $1 million. The regulations
also require the Trustees to establish procedures which are reasonably designed
to stabilize the net asset value per share at $1.00 for the Fund. However, there
is no assurance that the Trust will be able to meet this objective for the Fund.
The Trust's procedures include the determination of the extent of deviation, if
any, of the Fund's current net asset value per share calculated using available
market quotations from the Fund's amortized cost price per share at such
intervals as the Trustees deem appropriate and reasonable in light of market
conditions and periodic reviews of the amount of the deviation and the methods
used to calculate such deviation. In the event that such deviation exceeds 1/2
of 1%, the Trustees are required to consider promptly what action, if any,
should be initiated, and, if the Trustees believe that the extent of any
deviation may result in material dilution or other unfair results to
shareholders, the Trustees are required to take such corrective action as they
deem appropriate to eliminate or reduce such dilution or unfair results to the
extent reasonably practicable. In addition, if the Fund incurs a significant
loss or liability, the Trustees have the authority to reduce pro rata the number
of shares of the Fund in each shareholder's account and to offset each
shareholder's PRO RATA portion of such loss or liability from the shareholder's
accrued but unpaid dividends or from future dividends.
S-52
<PAGE>
PURCHASE AND REDEMPTION OF SHARES
It is currently the Trust's policy to pay all redemptions in cash. The Trust
retains the right, however, to alter this policy to provide for redemptions in
whole or in part by a distribution in kind of readily marketable securities held
by a Fund in lieu of cash. Shareholders may incur brokerage charges on the sale
of any such securities so received in payment of redemptions. However, a
shareholder will at all times be entitled to aggregate cash redemptions from all
Funds of the Trust during any 90-day period of up to the lesser of $250,000 or
1% of the Trust's net assets.
A gain or loss for federal income tax purposes may be realized by a taxable
shareholder upon an in-kind redemption depending upon the shareholder's basis in
the shares of the Trust redeemed.
The Trust reserves the right to suspend the right of redemption and/or to
postpone the date of payment upon redemption for any period during which trading
on the New York Stock Exchange is restricted, or during the existence of an
emergency (as determined by the SEC by rule or regulation) as a result of which
disposal or evaluation of the fund securities is not reasonably practicable, or
for such other periods as the SEC may by order permit. The Trust also reserves
the right to suspend sales of shares of the Funds for any period during which
the New York Stock Exchange, the Manager, the Administrator, the Distributor,
the Sub-Advisers and/or the Custodian are not open for business. Currently, the
following holidays are observed by the Trust: New Year's Day, Martin Luther
King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day.
The securities may be traded on foreign markets on days other than Business
Days or the net asset value of a Fund may be computed on days when such foreign
markets are closed. In addition, foreign markets may close at times other than
4:00 p.m. Eastern time. As a consequence, the net asset value of a share of a
Fund may not reflect all events that may affect the value of the Fund's foreign
securities unless the Sub-Advisers determine that such events materially affect
net asset value in which case net asset value will be determined by
consideration of other factors.
TAXES
The following is only a summary of certain additional federal tax
considerations generally affecting the Funds and their shareholders that are not
described in the Funds' Prospectus. No attempt is made to present a detailed
explanation of the federal, state or local tax treatment of the Funds or their
shareholders and the discussion here and in the Funds' Prospectus is not
intended as a substitute for careful tax planning.
This discussion of federal income tax consequences is based on the Code and
the regulations issued thereunder as in effect on the date of this Statement of
Additional Information. New legislation, as well as administrative changes or
court decisions, may significantly change the conclusions expressed herein, and
may have a retroactive effect with respect to the transactions contemplated
herein.
Each Fund is treated as a separate entity for federal income tax purposes
and is not combined with the Trust's other Funds. Each Fund intends to qualify
as a regulated investment company ("RIC") under Subchapter M of the Code so that
it will be relieved of federal income tax on that part of its income that is
distributed to shareholders. In order to qualify for treatment as a RIC, a Fund
must distribute annually to its shareholders at least 90% of its investment
company taxable income (generally, net investment income plus the excess, if
any, of net short-term capital gain over net long-term capital losses)
("Distribution Requirement") and also must meet several additional requirements.
Among these requirements are the following: (i) at least 90% of a Fund's gross
income each taxable year must be derived from dividends, interest, payments with
respect to securities loans, and gains from the sale or other disposition of
stock, securities or foreign currencies, or other income derived with respect to
its business of investing in such stock or securities or currencies; (ii) at the
close of each quarter of a Fund's taxable year, at least 50% of the value of its
total assets must be represented by cash and cash items, U.S. government
securities, securities of other RICs and other securities, with such other
securities limited, in respect of any one
S-53
<PAGE>
issuer, to an amount that does not exceed 5% of the value of a Fund's assets and
that does not represent more than 10% of the outstanding voting securities of
such issuer; and (iii) at the close of each quarter of a Fund's taxable year,
not more than 25% of the value of its assets may be invested in securities
(other than U.S. government securities or the securities of other RICs) of any
one issuer or of two or more issuers which the Fund controls and which are
engaged in the same, similar, or related trades or businesses.
Notwithstanding the Distribution Requirement described above, which only
requires a Fund to distribute at least 90% of its annual investment company
taxable income and does not require any minimum distribution of net capital
gain, a Fund will be subject to a nondeductible 4% federal excise tax to the
extent it fails to distribute by the end of any calendar year at least 98% of
its ordinary income for that year and 98% of its capital gain net income (the
excess of short- and long-term capital gain over short- and long-term capital
loss) for the one-year period ending on October 31 of that year, plus certain
other amounts. Each Fund intends to make sufficient distributions to avoid
liability for the federal excise tax. A Fund may in certain circumstances be
required to liquidate Fund investments in order to make sufficient distributions
to avoid federal excise tax liability at a time when the investment advisor
might not otherwise have chosen to do so, and liquidation of investments in such
circumstances may affect the ability of a Fund to satisfy the requirements for
qualification as a RIC.
Any gain or loss recognized on a sale, exchange or redemption of shares of a
Fund by a shareholder who is not a dealer in securities will generally, for
individual shareholders, be treated as a long-term capital gain or loss if the
shares have been held for more than twelve months and otherwise will be treated
as a short-term capital gain or loss. However, if shares on which a shareholder
has received a net capital gain distribution are subsequently sold, exchanged or
redeemed and such shares have been held for six months or less, any loss
recognized will be treated as a long-term capital loss to the extent of the net
capital gain distribution.
Long-term capital gains are currently taxed at a maximum rate of 20% and
short-term capital gains are currently taxed at ordinary income tax rates.
If a Fund fails to qualify as a RIC for any year, all of its income will be
subject to federal income tax at corporate rates, and its distributions
(including capital gain distributions) generally will be taxable as ordinary
income dividends to its shareholders, subject to the dividends received
deduction for eligible corporate shareholders.
A Fund will be required in certain cases to withhold and remit to the United
States Treasury 31% of amounts payable to any shareholder who (1) has provided
the Fund either an incorrect tax identification number or no number at all, (2)
who is subject to backup withholding by the Internal Revenue Service for failure
to properly report payments of interest or dividends, or (3) who has failed to
certify to the Fund that such shareholder is not subject to backup withholding.
Dividends and interest received by a Fund may be subject to income,
withholding or other taxes imposed by foreign countries and United States
possessions that would reduce the yield on a Fund's securities. Tax conventions
between certain countries and the United States may reduce or eliminate these
taxes. Foreign countries generally do not impose taxes on capital gains with
respect to investments by foreign investors. If more than 50% of the value of a
Fund's total assets at the close of its taxable year consists of securities of
foreign corporations, a Fund will be eligible to, and will, file an election
with the Internal Revenue Service that will enable shareholders, in effect, to
receive the benefit of the foreign tax credit with respect to any foreign and
United States possessions income taxes paid by a Fund. Pursuant to the election,
a Fund will treat those taxes as dividends paid to its shareholders. Each
shareholder will be required to include a proportionate share of those taxes in
gross income as income received from a foreign source and must treat the amount
so included as if the shareholder had paid the foreign tax directly. The
shareholder may then either deduct the taxes deemed paid by him or her in
computing his or her taxable income or, alternatively, use the foregoing
information in calculating the foreign tax credit (subject to significant
limitations) against the shareholder's federal income tax. If a Fund makes the
election, it will
S-54
<PAGE>
report annually to its shareholders the respective amounts per share of the
Fund's income from sources within, and taxes paid to, foreign countries and
United States possessions.
STATE TAXES
A Fund is not liable for any income or franchise tax in Massachusetts if it
qualifies as a RIC for federal income tax purposes. Distributions by a Fund to
shareholders and the ownership of shares may be subject to state and local
taxes. Shareholders should consult their own tax advisers regarding the affect
of federal, state and local taxes in their own individual circumstances.
PORTFOLIO TRANSACTIONS
The Trust has no obligation to deal with any dealer or group of dealers in
the execution of transactions in portfolio securities. Subject to policies
established by the Trustees, the Sub-Advisers are responsible for placing orders
to execute portfolio transactions. In placing orders, it is the Trust's policy
to seek to obtain the best net results taking into account such factors as price
(including the applicable dealer spread), size, type and difficulty of the
transaction involved, the firm's general execution and operational facilities,
and the firm's risk in positioning the securities involved. While the
Sub-Advisers generally seek reasonably competitive spreads or commissions, the
Trust will not necessarily be paying the lowest spread or commission available.
The Trust will not purchase portfolio securities from any affiliated person
acting as principal except in conformity with the regulations of the SEC.
The money market securities in which a Fund invests are traded primarily in
the over-the-counter market. Bonds and debentures are usually traded
over-the-counter, but may be traded on an exchange. Where possible, the
Sub-Advisers will deal directly with the dealers who make a market in the
securities involved except in those circumstances where better prices and
execution are available elsewhere. Such dealers usually are acting as principal
for their own account. On occasion, securities may be purchased directly from
the issuer. Money market securities are generally traded on a net basis and do
not normally involve either brokerage commissions or transfer taxes. The cost of
executing portfolio securities transactions of a Fund will primarily consist of
dealer spreads and underwriting commissions.
It is expected that the Funds may execute brokerage or other agency
transactions through the Distributor, a registered broker-dealer, for a
commission, in conformity with the 1940 Act, the Securities Exchange Act of
1934, as amended, and rules of the SEC. Under these provisions, the Distributor
is permitted to receive and retain compensation for effecting fund transactions
for a Fund on an exchange. These provisions further require that commissions
paid to the Distributor by the Trust for exchange transactions not exceed "usual
and customary" brokerage commissions. The rules define "usual and customary"
commissions to include amounts which are "reasonable and fair compared to the
commission, fee or other remuneration received or to be received by other
brokers in connection with comparable transactions involving similar securities
being purchased or sold on a securities exchange during a comparable period of
time." In addition, a Fund may direct commission business to one or more
designated broker-dealers, including the Distributor, in connection with such
broker-dealer's payment of certain of the Fund's expenses. The Trustees,
including those who are not "interested persons" of the Trust, have adopted
procedures for evaluating the reasonableness of commissions paid to the
Distributor and will review these procedures periodically.
Consistent with their duty to obtain best execution, Sub-Advisers may
allocate brokerage or principal business to certain broker-dealers in
recognition of the sale of Fund shares. In addition, a Fund's adviser or
sub-advisers may place Fund orders with qualified broker-dealers who recommend
the Trust to clients, and may, when a number of brokers and dealers can provide
best execution of a particular transaction, consider such recommendations by a
broker or dealer in selecting among broker-dealers.
The Trust does not expect to use one particular dealer, but a Fund's
Sub-Advisers may, consistent with the interests of the Fund, select brokers on
the basis of the research services they provide to the Fund's
S-55
<PAGE>
Sub-Advisers. Such services may include analysis of the business or prospects of
a company, industry or economic sector or statistical and pricing services.
Information so received by the Sub-Adviser will be in addition to and not in
lieu of the services required to be performed by a Fund's Sub-Advisers under the
Advisory and/or Sub-Advisory Agreements. If in the judgement of a Fund's
Sub-Advisers the Funds, or other accounts managed by the Fund's Sub-Advisers,
will be benefitted by supplemental research services, the Fund's Sub-Advisers
are authorized to pay brokerage commissions to a broker furnishing such services
which are in excess of commissions which another broker may have charged for
effecting the same transaction. The expenses of a Fund's Sub-Advisers will not
necessarily be reduced as a result of the receipt of such supplemental
information.
In connection with transactions effected for Funds operating within the
"Manager of Managers" structure, under this policy, the various firms that serve
as money managers to certain Funds of the Trust, in the exercise of investment
discretion over the assets of a Fund, may direct a portion of a Fund's brokerage
to the Distributor. All such transactions directed to the Distributor must be
accomplished in a manner that is consistent with the Trust's policy to achieve
best net results, and must comply with the Trust's procedures regarding the
execution of transactions through affiliated brokers.
DESCRIPTION OF SHARES
The Declaration of Trust authorizes the issuance of an unlimited number of
shares of each Fund, each of which represents an equal proportionate interest in
that Fund. Each share upon liquidation entitles a shareholder to a pro rata
share in the net assets of that Fund. Shareholders have no preemptive rights.
The Declaration of Trust provides that the Trustees of the Trust may create
additional series of shares or separate classes of funds. Share certificates
representing the shares will not be issued.
LIMITATION OF TRUSTEES' LIABILITY
The Declaration of Trust provides that a Trustee shall be liable only for
his or her own willful defaults and, if reasonable care has been exercised in
the selection of officers, agents, employees or administrators, shall not be
liable for any neglect or wrongdoing of any such person. The Declaration of
Trust also provides that the Trust will indemnify its Trustees and officers
against liabilities and expenses incurred in connection with actual or
threatened litigation in which they may be involved because of their offices
with the Trust unless it is determined in the manner provided in the Declaration
of Trust that they have not acted in good faith in the reasonable belief that
their actions were in the best interests of the Trust. However, nothing in the
Declaration of Trust shall protect or indemnify a Trustee against any liability
for his or her willful misfeasance, bad faith, gross negligence or reckless
disregard of his or her duties.
VOTING
Each share held entitles the shareholder of record to one vote. The
shareholders of each Fund or class will vote separately on matters pertaining
solely to that Fund or class, such as any distribution plan. As a Massachusetts
business trust, the Trust is not required to hold annual meetings of
shareholders, but approval will be sought for certain changes in the operation
of the Trust and for the election of Trustees under certain circumstances. In
addition, a Trustee may be removed by the remaining Trustees or by shareholders
at a special meeting called upon written request of shareholders owning at least
10% of the outstanding shares of the Trust. In the event that such a meeting is
requested, the Trust will provide appropriate assistance and information to the
shareholders requesting the meeting.
Where this Statement of Additional Information states that a Fund's
investment limitation or a fundamental policy may not be changed without
shareholder approval, such approval means the vote of (i) 67% or more of the
Fund's shares present at a meeting if the holders of more than 50% of the
outstanding shares of the Fund are present or represented by Proxy, or
(ii) more than 50% of the Fund's outstanding shares, whichever is less.
S-56
<PAGE>
CUSTODIANS
First Union National Bank, Broad and Chestnut Streets, P.O. Box 7618,
Philadelphia, Pennsylvania 19101 acts as custodian and wire agent for the assets
of SEI VP Large Cap Growth, SEI VP Large Cap Value, SEI VP S&P 500 Index, SEI VP
Small Cap Growth, SEI VP Small Cap Value, SEI VP Core Fixed Income, SEI VP Bond
Index, SEI VP High Yield Bond and SEI VP Prime Obligation Funds. State Street
Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts, 02110, acts
as custodian for the assets of SEI VP International Equity, SEI VP Emerging
Markets Equity, SEI VP International Fixed Income and SEI VP Emerging Markets
Debt Fund. First Union National Bank and State Street Bank and Trust Company
(each a "Custodian," and, together, the "Custodians") holds cash, securities and
other assets of the respective Funds for which they act as Custodians as
required by the 1940 Act.
SHAREHOLDER LIABILITY
The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of such a Trust could,
under certain circumstances, be held personally liable as partners for the
obligations of the Trust. Even if, however, the Trust were held to be a
partnership, the possibility of the shareholders' incurring financial loss for
that reason appears remote because the Trust's Declaration of Trust
(i) contains an express disclaimer of shareholder liability for obligations of
the Trust and requires that notice of such disclaimer be given in each
agreement, obligation or instrument entered into or executed by or on behalf of
the Trust or the Trustees, and (ii) provides for indemnification out of the
Trust property for any shareholders held personally liable for the obligations
of the Trust.
EXPERTS
The Financial Statements included in this Statement of Additional
Information have been so included in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP serves as counsel to the Trust.
S-57
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholder and Board of Directors
of The SEI Investment Products Trust, Inc.:
In our opinion, the accompanying statement of assets and liabilities
presents fairly, in all material respects, the financial position of The SEI
Insurance Products Trust, Inc., (comprising the SEI VP Large Cap Value Fund, SEI
VP Large Cap Growth Fund, SEI VP S&P 500 Index Fund, SEI VP Small Cap Value
Fund, SEI VP Small Cap Growth Fund, SEI VP International Equity Fund, SEI VP
Emerging Markets Equity Fund, SEI VP Core Fixed Income Fund, SEI VP Bond Index
Fund, SEI VP High Yield Bond Fund, SEI VP International Fixed Income Fund, SEI
VP Emerging Markets Debt Fund, and SEI VP Prime Obligation Fund), collectively,
(the "Trust"), at December 31, 1999, in conformity with generally accepted
accounting principles. This financial statement is the responsibility of the
Trusts' management; our responsibility is to express an opinion on this
financial statement based on our audit. We conducted our audit of this financial
statement in accordance with generally accepted auditing standards which require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statement is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statement, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for the opinion expressed above.
/s/ PricewaterhouseCoopers
February 28, 2000
S-58
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
SEI INSURANCE PRODUCTS TRUST--AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
VP LARGE VP LARGE VP VP SMALL
CAP CAP S & P 500 CAP
VALUE GROWTH INDEX VALUE
FUND FUND FUND FUND
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
ASSETS:
Cash............................................. $ 7,692 $ 7,692 $ 7,692 $ 7,692
Deferred Offering Costs.......................... $ 5,112 $ 5,112 $ 5,112 $ 5,112
------- ------- ------- -------
Total Assets................................... $12,804 $12,804 $12,804 $12,804
------- ------- ------- -------
LIABILITIES:
Due to Manager................................... $ 5,112 $ 5,112 $ 5,112 $ 5,112
------- ------- ------- -------
NET ASSETS:........................................ $ 7,692 $ 7,692 $ 7,692 $ 7,692
======= ======= ======= =======
Shares of beneficial interest issued and
outstanding (unlimited authorization--no par
value)........................................... 769 769 769 769
======= ======= ======= =======
Net asset value, offering price and redemption
price per share.................................. $ 10.00 $ 10.00 $ 10.00 $ 10.00
======= ======= ======= =======
</TABLE>
THE FUNDS HAVE NOT COMMENCED OPERATIONS AS OF DECEMBER 31, 1999
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
S-59
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
SEI INSURANCE PRODUCTS TRUST--AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
VP SMALL VP VP EMERGING
CAP INTERNATIONAL MARKETS
GROWTH EQUITY EQUITY
FUND FUND FUND
--------- -------------- ------------
<S> <C> <C> <C>
ASSETS:
Cash.............................................. $ 7,692 $ 7,692 $ 7,692
Deferred Offering Costs........................... $ 5,112 $ 5,112 $ 5,112
------- ------- -------
Total Assets.................................... $12,804 $12,804 $12,804
------- ------- -------
LIABILITIES:
Due to Manager.................................... $ 5,112 $ 5,112 $ 5,112
------- ------- -------
NET ASSETS:......................................... $ 7,692 $ 7,692 $ 7,692
======= ======= =======
Shares of beneficial interest issued and outstanding
(unlimited authorization--no par value)........... 769 769 769
======= ======= =======
Net asset value, offering price and redemption price
per share......................................... $ 10.00 $ 10.00 $ 10.00
======= ======= =======
</TABLE>
THE FUNDS HAVE NOT COMMENCED OPERATIONS AS OF DECEMBER 31, 1999
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
S-60
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
SEI INSURANCE PRODUCTS TRUST--AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
VP CORE VP HIGH
FIXED VP BOND YIELD
INCOME INDEX BOND
FUND FUND FUND
-------- -------- --------
<S> <C> <C> <C>
ASSETS:
Cash...................................................... $ 7,692 $ 7,692 $ 7,692
Deferred Offering Costs................................... $ 5,112 $ 5,112 $ 5,112
------- ------- -------
Total Assets............................................ $12,804 $12,804 $12,804
------- ------- -------
LIABILITIES:
Due to Manager............................................ $ 5,112 $ 5,112 $ 5,112
------- ------- -------
NET ASSETS:................................................. $ 7,692 $ 7,692 $ 7,692
======= ======= =======
Shares of beneficial interest issued and outstanding
(unlimited authorization--no par value)................... 769 769 769
======= ======= =======
Net asset value, offering price and redemption price per
share..................................................... $ 10.00 $ 10.00 $ 10.00
======= ======= =======
</TABLE>
THE FUNDS HAVE NOT COMMENCED OPERATIONS AS OF DECEMBER 31, 1999
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
S-61
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES (CONCLUDED)
SEI INSURANCE PRODUCTS TRUST--AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
VP INTERNATIONAL VP EMERGING
FIXED MARKETS VP PRIME
INCOME DEBT OBLIGATION
FUND FUND FUND
---------------- ------------ -----------
<S> <C> <C> <C>
ASSETS:
Cash......................................... $ 7,692 $ 7,692 $ 7,696
Deferred Offering Costs...................... $ 5,112 $ 5,112 $ 5,115
------- ------- -------
Total Assets............................... $12,804 $12,804 $12,811
------- ------- -------
LIABILITIES:
Due to Manager............................... $ 5,112 $ 5,112 $ 5,115
------- ------- -------
NET ASSETS:.................................... $ 7,692 $ 7,692 $ 7,696
======= ======= =======
Shares of beneficial interest issued and
outstanding (unlimited authorization--no par
value)....................................... 769 769 7,696
======= ======= =======
Net asset value, offering price and redemption
price per share.............................. $ 10.00 $ 10.00 $ 1.00
======= ======= =======
</TABLE>
THE FUNDS HAVE NOT COMMENCED OPERATIONS AS OF DECEMBER 31, 1999
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
S-62
<PAGE>
NOTES TO FINANCIAL STATEMENTS
SEI INSURANCE PRODUCTS TRUST--DECEMBER 31, 1999
1. ORGANIZATION
SEI Insurance Products Trust (the "Trust") was organized as a Massachusetts
business trust under a Declaration of Trust dated December 14, 1998. The Trust
is registered under the Investment Company Act of 1940, as amended, as an
open-end management investment company consisting of thirteen funds: SEI VP
Large Cap Value Fund, SEI VP Large Cap Growth Fund, SEI VP S&P 500 Index Fund,
SEI VP Small Cap Value Fund, SEI VP Small Cap Growth Fund, SEI VP International
Equity Fund, SEI VP Emerging Markets Equity Fund, SEI VP Core Fixed Income Fund,
SEI VP Bond Index Fund, SEI VP High Yield Bond Fund, SEI VP International Fixed
Income Fund, SEI VP Emerging Markets Debt Fund, and SEI VP Prime Obligation Fund
(collectively the "Funds", and each of these, a "Fund"). The Trust has
diversified and non-diversified funds. The Funds' prospectus provides a
description of each Fund's investment objectives, policies and strategies. The
assets of each fund are segregated, and a shareholder's interest is limited to
the fund in which shares are held. The Funds are authorized to offer an
unlimited number of shares of beneficial interest with no par value. The Trust
has not commenced operations except those related to organizational matters and
the sale of initial shares of beneficial interest to SEI Investments Fund
Management ("SIFM" or the "Manager") on July 16, 1999.
2. OFFERING COSTS
Offering costs related to the sale of initial shares will be deferred and
amortized on a straight line basis over a period of twelve months commencing
with operations. These costs of approximately $66,000 include legal fees of
approximately $32,000 for work performed by a law firm of which an officer of
the Trust is a Partner. The remainder of these costs included approximately
$11,000 for other legal costs and $23,000 for typesetting costs.
Certain officers and/or trustees of the Trust are also officers of the
Manager. The Trust pays each unaffiliated Trustee an annual fee for attendance
of quarterly, interim and committee meetings. Compensation of officers and
affiliated trustees of the Trust is paid by the Manager.
The Trust incurred other expenses of approximately $12,000 in legal and
audit fees. The full amount of these organizational expenses were assumed by SEI
Investments Management Corporation (SIMC) and the Funds are not required to
reimburse SIMC.
3. INVESTMENT ADVISORY, MANAGEMENT, DISTRIBUTION AND CUSTODY AGREEMENTS
The Trust has entered into the following service agreements:
Under an Investment Advisory Agreement with the Trust, SEI Investments
Management Corporation ("SIMC") will act as investment adviser to each Fund. For
its investment advisory services to the Trust, SIMC will receive an annual fee
which is calculated daily and paid monthly at the following annual rates (shown
as a percentage of the average daily net assets of each Fund): SEI VP Large Cap
Value Fund, 0.35%; SEI VP Large Cap Growth Fund, 0.40%; SEI VP S&P 500 Index
Fund, 0.03%; SEI VP Small Cap Value Fund, 0.65%; SEI VP Small Cap Growth Fund,
0.65%; SEI VP International Equity Fund, 0.51%; SEI VP Emerging Markets Equity
Fund, 1.05%; SEI VP Core Fixed Income Fund, 0.28%; SEI VP Bond Index Fund,
0.07%; SEI VP High Yield Bond Fund, 0.49%; SEI VP International Fixed Income
Fund, 0.40%; SEI VP Emerging Markets Debt Fund, 0.85%; and SEI VP Prime
Obligation Fund, 0.75%. SIMC has agreed, on a voluntary basis, to waive all or a
portion of its investment advisory fee. In addition, SIMC reserves the right to
terminate its waivers at any time in its full discretion.
S-63
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEI INSURANCE PRODUCTS TRUST--DECEMBER 31, 1999
3. INVESTMENT ADVISORY, MANAGEMENT, DISTRIBUTION AND CUSTODY AGREEMENTS
(CONTINUED)
Under an Administration Agreement with the Trust, the Manager will provide
the Trust with overall administrative and accounting services and act as
transfer agent and dividend disbursing agent. For its services, the Manager will
receive an annual fee which is calculated daily and paid monthly at the
following annual rates (shown as a percentage of the average daily net assets of
each Fund): SEI VP Large Cap Value Fund, 0.35%; SEI VP Large Cap Growth Fund,
0.35%; SEI VP S&P 500 Index Fund, 0.22%; SEI VP Small Cap Value Fund, 0.35%; SEI
VP Small Cap Growth Fund, 0.35%; SEI VP International Equity Fund, 0.45%; SEI VP
Emerging Markets Equity Fund, 0.65%; SEI VP Core Fixed Income Fund, 0.28%; SEI
VP Bond Index Fund, 0.35%; SEI VP High Yield Bond Fund, 0.35%; SEI VP
International Fixed Income Fund, 0.60%; SEI VP Emerging Markets Debt Fund,
0.65%; and SEI VP Prime Obligation Fund, 0.42%. The Manager has agreed, on a
voluntary basis, to waive all or a portion of its administration fee and/or
reimburse other expenses. In addition, the Manager reserves the right to
terminate its waivers and/ or reimbursements at any time in its full discretion.
Under a Distribution Agreement with the Trust, SEI Investments Distribution
Co. (the "Distributor") will provide the Trust with distribution services. The
Distributor will not be entitled to any fee for performing these services.
Under a Custodian Agreement with the Trust, First Union National Bank will
serve as custodian for the assets of SEI VP Large Cap Value Fund, SEI VP Large
Cap Growth Fund, SEI VP S&P 500 Index Fund, SEI VP Small Cap Value Fund, SEI VP
Small Cap Growth Fund, SEI VP Core Fixed Income Fund, SEI VP Bond Index Fund,
SEI VP High Yield Bond Fund, and SEI VP Prime Obligation Fund.
Under a Custodian Agreement with the Trust, State Street Bank and Trust
Company will serve as custodian for the assets of SEI VP International Equity
Fund, SEI VP Emerging Markets Equity Fund, SEI VP International Fixed Income
Fund and SEI VP Emerging Markets Debt Fund.
S-64
<PAGE>
SEI
INSURANCE
PRODUCTS
TRUST
PROSPECTUS
CLASS A SHARES
APRIL 30, 2000
EQUITY FUNDS
SEI VP LARGE CAP VALUE FUND
SEI VP LARGE CAP GROWTH FUND
SEI VP SMALL CAP VALUE FUND
SEI VP SMALL CAP GROWTH FUND
SEI VP INTERNATIONAL EQUITY FUND
SEI VP EMERGING MARKETS EQUITY FUND
FIXED INCOME FUNDS
SEI VP CORE FIXED INCOME FUND
SEI VP HIGH YIELD BOND FUND
SEI VP INTERNATIONAL FIXED INCOME FUND
SEI VP EMERGING MARKETS DEBT FUND
INVESTMENT ADVISER
SEI INVESTMENTS MANAGEMENT CORPORATION
SUB-ADVISERS
ACADIAN ASSET MANAGEMENT, INC.
ALLIANCE CAPITAL MANAGEMENT L.P.
ARTISAN PARTNERS LIMITED PARTNERSHIP
BLACKROCK FINANCIAL MANAGEMENT, INC.
BLACKROCK INTERNATIONAL, LTD.
CAPITAL GUARDIAN TRUST COMPANY
CORONATION ASSET MANAGEMENT (PROPRIETARY) LIMITED
CREDIT SUISSE ASSET MANAGEMENT, LIMITED
CREDIT SUISSE ASSET MANAGEMENT, LLC
LSV ASSET MANAGEMENT, L.P.
MAZAMA CAPITAL MANAGEMENT, LLC
MORGAN STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC.
NICHOLAS-APPLEGATE CAPITAL MANAGEMENT
NOMURA CORPORATE RESEARCH AND ASSET MANAGEMENT, INC.
OECHSLE INTERNATIONAL ADVISORS, LLC
PROVIDENT INVESTMENT COUNSEL, INC.
RS INVESTMENT MANAGEMENT, L.P.
ROBERT W. BAIRD & CO., INCORPORATED
SALOMON BROTHERS ASSET MANAGEMENT INC
SANFORD C. BERNSTEIN & CO., INC.
SAWGRASS ASSET MANAGEMENT, LLC
SCHRODER INVESTMENT MANAGEMENT NORTH AMERICA INC.
SECURITY CAPITAL GLOBAL CAPITAL MANAGEMENT GROUP INCORPORATED
SG PACIFIC ASSET MANAGEMENT, INC.
SGY ASSET MANAGEMENT (SINGAPORE) LIMITED
SG YAMAICHI ASSET MANAGEMENT CO., LTD.
STRATEGIC FIXED INCOME, L.L.C.
TCW INVESTMENT MANAGEMENT COMPANY
WALL STREET ASSOCIATES
WESTERN ASSET MANAGEMENT COMPANY
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED ANY FUND SHARES OR
DETERMINED WHETHER THIS PROSPECTUS IS ACCURATE OR COMPLETE.
IT IS A CRIME FOR ANYONE TO TELL YOU OTHERWISE.
<PAGE>
SEI Insurance
Products Trust
ABOUT THIS PROSPECTUS
- ------------------------------------------------------------------------
SEI Insurance Products Trust is a mutual fund family that offers shares in
separate investment portfolios (Funds). The Funds have individual investment
goals and strategies and are designed exclusively as funding vehicles for
variable life insurance and variable annuity contracts. This prospectus gives
contract owners important information about the Class A Shares of the Funds that
they should know before investing. Please read this prospectus and keep it for
future reference. Variable life insurance and variable annuity account investors
should also review the separate account prospectus prepared by their insurance
company.
THIS PROSPECTUS HAS BEEN ARRANGED INTO DIFFERENT SECTIONS SO THAT YOU CAN EASILY
REVIEW THIS IMPORTANT INFORMATION. ON THE NEXT PAGE, THERE IS SOME GENERAL
INFORMATION YOU SHOULD KNOW ABOUT RISK AND RETURN THAT IS COMMON TO EACH OF THE
FUNDS. FOR MORE DETAILED INFORMATION ABOUT THE FUNDS PLEASE SEE:
SEI VP LARGE CAP VALUE FUND..........................................2
SEI VP LARGE CAP GROWTH FUND.........................................4
SEI VP SMALL CAP VALUE FUND..........................................6
SEI VP SMALL CAP GROWTH FUND.........................................8
SEI VP INTERNATIONAL EQUITY FUND....................................10
SEI VP EMERGING MARKETS EQUITY FUND.................................12
SEI VP CORE FIXED INCOME FUND.......................................14
SEI VP HIGH YIELD BOND FUND.........................................16
SEI VP INTERNATIONAL FIXED INCOME FUND..............................18
SEI VP EMERGING MARKETS DEBT FUND...................................20
MORE INFORMATION ABOUT FUND INVESTMENTS.............................22
THE ADVISER AND SUB-ADVISERS........................................23
PRIOR PERFORMANCE INFORMATION.......................................28
PURCHASING AND SELLING FUND SHARES..................................30
DIVIDENDS AND DISTRIBUTIONS.........................................30
TAXES...............................................................30
HOW TO OBTAIN MORE INFORMATION ABOUT SEI INSURANCE PRODUCTS
TRUST.......................................................Back Cover
- --------------------------------------------------------------------------------
THE FUNDS AND GLOBAL ASSET ALLOCATION
Each Fund has its own distinct risk and reward characteristics, investment
objectives, policies and strategies. SEI Investments Management Corporation
("SIMC") constructs and maintains global asset allocation strategies, and the
Funds are designed in part to implement those strategies. The degree to which an
investor's portfolio is invested in the particular market segments and/or asset
classes represented by these Funds varies, as does the investment risk/return
potential represented by each Fund. Some Funds, especially the SEI VP High Yield
Bond, SEI VP Emerging Markets Equity and SEI VP Emerging Markets Debt Funds, may
have extremely volatile returns. Because of the historical lack of correlation
among various asset classes, an investment in a mix of Funds representing a
range of asset classes as part of an asset allocation strategy may reduce the
strategy's overall level of volatility. As a result, a global asset allocation
strategy may reduce risk.
In managing the Funds, SIMC focuses on four key principles: asset allocation,
portfolio structure, the use of specialist managers, and continuous portfolio
management. Asset allocation across appropriate asset classes (represented by
the Funds) is the central theme of SIMC's investment philosophy. SIMC seeks to
reduce risk further by creating a portfolio that is diversified within each
asset class. SIMC then oversees a network of specialist managers who invest the
assets of these Funds in distinct segments of the market or class represented by
each Fund. These specialist managers adhere to distinct investment disciplines,
with the goal of providing greater consistency and predictability of results, as
well as broader diversification across and within asset classes. Finally, SIMC
regularly rebalances to ensure that the appropriate mix of assets is constantly
in place, and constantly monitors and evaluates specialist managers for these
Funds to ensure that they do not deviate from their stated investment philosophy
or process.
<PAGE>
PROSPECTUS 1
RISK/RETURN INFORMATION COMMON TO THE FUNDS
Each Fund is a mutual fund that is available solely as a funding vehicle for
variable annuity and variable life insurance contracts sold by various insurance
companies. A mutual fund pools investors' money and, using professional
investment managers, invests it in securities.
Each Fund has its own investment goal and strategies for reaching that goal.
Each Fund's assets are managed under the direction of SIMC, and one or more
Sub-Advisers who manage portions of the Funds' assets in a way that they believe
will help the Funds achieve their goals. SIMC acts as "manager of managers" for
the Funds, and attempts to ensure that the Sub-Adviser(s) comply with the Funds'
investment policies and guidelines. SIMC also recommends the appointment of
additional or replacement Sub-Advisers to the Funds' Board. Still, investing in
the Funds involves risks, and there is no guarantee that a Fund will achieve its
goal. SIMC and the Sub-Advisers make judgments about the securities markets, the
economy, and companies, but these judgments may not anticipate actual market
movements or the impact of economic conditions on company performance. In fact,
no matter how good a job the Advisers do, you could lose money on your
investment in a Fund, just as you could with other investments. A Fund share is
not a bank deposit, and it is not insured or guaranteed by the FDIC or any
government agency.
The value of your investment in a Fund is based on the market prices of the
securities the Fund holds. These prices change daily due to economic and other
events that affect securities markets generally, as well as those that affect
particular companies or governments. These price movements, sometimes called
volatility, will vary depending on the types of securities the Fund owns and the
markets in which they trade. The estimated level of volatility for each Fund is
set forth in the Fund Summaries that follow. The effect on a Fund's share price
of a change in the value of a single security holding will depend on how widely
the Fund diversifies its holdings.
THE INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS MAY BE SIMILAR TO THOSE OF
OTHER RETAIL MUTUAL FUNDS WHICH CAN BE PURCHASED OUTSIDE OF A VARIABLE INSURANCE
PRODUCT, AND THAT ARE MANAGED BY THE SAME INVESTMENT ADVISER OR SUB-ADVISERS.
THE INVESTMENT RESULTS OF THE FUNDS, HOWEVER, MAY BE HIGHER OR LOWER THAN THE
RESULTS OF SUCH OTHER RETAIL MUTUAL FUNDS. THERE CAN BE NO ASSURANCE, AND NO
REPRESENTATION IS MADE, THAT THE INVESTMENT RESULTS OF ANY OF THE FUNDS WILL BE
COMPARABLE TO THE INVESTMENT RESULTS OF ANY OTHER RETAIL MUTUAL FUND, EVEN IF
THE OTHER RETAIL MUTUAL FUND HAS THE SAME INVESTMENT ADVISER OR SUB-ADVISERS.
<PAGE>
2 PROSPECTUS
SEI VP LARGE CAP VALUE FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Long-term growth of capital and income
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY Medium to high
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing multiple specialist sub-advisers that manage in a
value style, the Fund invests in large cap income-producing
U.S. common stocks
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP Large Cap Value Fund invests primarily in common stocks of U.S.
companies with market capitalizations of more than $1 billion. The Fund uses a
multi-manager approach, relying on a number of Sub-Advisers with differing
investment philosophies to manage portions of the Fund's portfolio under the
general supervision of SIMC. Each Sub-Adviser, in managing its portion of the
Fund's assets, selects stocks it believes are undervalued in light of such
fundamental characteristics as earnings, book value or return on equity. The
Fund's portfolio is diversified as to issuers and industries.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's securities may
fluctuate drastically from day to day. Individual companies may report poor
results or be negatively affected by industry and/or economic trends and
developments. The prices of securities issued by such companies may suffer a
decline in response. These factors contribute to price volatility, which is the
principal risk of investing in the Fund.
The Fund is also subject to the risk that large capitalization value stocks may
underperform other segments of the equity market or the equity markets as a
whole.
<PAGE>
PROSPECTUS 3
SEI VP LARGE CAP VALUE FUND
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP Large Cap Value Fund had not commenced
operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Investment Advisory Fees 0.35%
Distribution (12b-1) Fees None
Other Expenses 0.82%*
-------
Total Annual Fund Operating Expenses 1.17%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP LARGE CAP VALUE FUND -- CLASS A SHARES 0.85%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP Large Cap Value Fund -- Class A Shares $119 $372
</TABLE>
<PAGE>
4 PROSPECTUS
SEI VP LARGE CAP GROWTH FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Capital appreciation
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY Medium to high
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing multiple specialist sub-advisers that manage in a
growth style, the Fund invests in large cap U.S. common
stocks
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP Large Cap Growth Fund invests primarily in common stocks of U.S.
companies with market capitalizations of more than $1 billion. The Fund uses a
multi-manager approach, relying on a number of Sub-Advisers with differing
investment philosophies to manage portions of the Fund's portfolio under the
general supervision of SIMC. Each Sub-Adviser, in managing its portion of the
Fund's assets, selects stocks it believes have significant growth potential in
light of such characteristics as revenue and earnings growth and positive
earnings surprises. The Fund's portfolio is diversified as to issuers and
industries.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's securities may
fluctuate drastically from day to day. Individual companies may report poor
results or be negatively affected by industry and/or economic trends and
developments. The prices of securities issued by such companies may suffer a
decline in response. These factors contribute to price volatility, which is the
principal risk of investing in the Fund.
The Fund is subject to the risk that large capitalization growth stocks may
underperform other segments of the equity market or the equity markets as a
whole.
<PAGE>
PROSPECTUS 5
SEI VP LARGE CAP GROWTH FUND
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP Large Cap Growth Fund had not commenced
operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Investment Advisory Fees 0.40%
Distribution (12b-1) Fees None
Other Expenses 0.82%*
-------
Total Annual Fund Operating Expenses 1.22%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP LARGE CAP GROWTH FUND -- CLASS A SHARES 0.85%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP Large Cap Growth Fund -- Class A Shares $124 $387
</TABLE>
<PAGE>
6 PROSPECTUS
SEI VP SMALL CAP VALUE FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Capital appreciation
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY High
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing multiple specialist sub-advisers that manage in a
value style, the Fund invests in common stocks of smaller
U.S. companies
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP Small Cap Value Fund invests primarily in common stocks of U.S.
companies with market capitalizations of less than $2 billion. The Fund uses a
multi-manager approach, relying upon a number of Sub-Advisers to manage portions
of the Fund's portfolio under the general supervision of SIMC. Each Sub-Adviser,
in managing its portion of the Fund's assets, selects stocks it believes are
undervalued in light of such fundamental characteristics as earnings, book value
or return on equity. The Fund's portfolio is diversified as to issuers and
industries.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's securities may
fluctuate drastically from day to day. Individual companies may report poor
results or be negatively affected by industry and/or economic trends and
developments. The prices of securities issued by such companies may suffer a
decline in response. These factors contribute to price volatility, which is the
principal risk of investing in the Fund.
The smaller capitalization companies the Fund invests in may be more vulnerable
to adverse business or economic events than larger, more established companies.
In particular, these small companies may have limited product lines, markets and
financial resources, and may depend upon a relatively small management group.
Therefore, small cap stocks may be more volatile than those of larger companies.
These securities may be traded over the counter or listed on an exchange.
The Fund is also subject to the risk that small capitalization value stocks may
underperform other segments of the equity market or the equity markets as a
whole.
<PAGE>
PROSPECTUS 7
SEI VP SMALL CAP VALUE FUND
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP Small Cap Value Fund had not commenced
operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Investment Advisory Fees 0.65%
Distribution (12b-1) Fees None
Other Expenses 0.82%*
-------
Total Annual Fund Operating Expenses 1.47%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP SMALL CAP VALUE FUND -- CLASS A SHARES 1.10%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP Small Cap Value Fund -- Class A Shares $150 $465
</TABLE>
<PAGE>
8 PROSPECTUS
SEI VP SMALL CAP GROWTH FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Long-term capital appreciation
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY High
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing multiple specialist sub-advisers that manage in a
growth style, the Fund invests in common stocks of smaller
U.S. companies
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP Small Cap Growth Fund invests primarily in common stocks of U.S.
companies with market capitalizations of less than $2 billion. The Fund uses a
multi-manager approach, relying upon a number of Sub-Advisers to manage portions
of the Fund's portfolio under the general supervision of SIMC. Each Sub-Adviser,
in managing its portion of the Fund's assets, selects stocks it believes have
significant growth potential in light of such characteristics as revenue and
earnings growth and positive earnings surprises. The Fund's portfolio is
diversified as to issuers and industries.
Due to its investment strategy, the Fund may buy and sell securities frequently.
This may result in higher transaction costs and additional capital gains tax
liabilities.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's securities may
fluctuate drastically from day to day. Individual companies may report poor
results or be negatively affected by industry and/or economic trends and
developments. The prices of securities issued by such companies may suffer a
decline in response. These factors contribute to price volatility, which is the
principal risk of investing in the Fund.
The smaller capitalization companies the Fund invests in may be more vulnerable
to adverse business or economic events than larger, more established companies.
In particular, these small companies may have limited product lines, markets and
financial resources, and may depend upon a relatively small management group.
Therefore, small cap stocks may be more volatile than those of larger companies.
These securities may be traded over the counter or listed on an exchange.
The Fund is also subject to the risk that small capitalization growth stocks may
underperform other segments of the equity market or the equity markets as a
whole.
<PAGE>
PROSPECTUS 9
SEI VP SMALL CAP GROWTH FUND
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP Small Cap Growth Fund had not commenced
operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Investment Advisory Fees 0.65%
Distribution (12b-1) Fees None
Other Expenses 0.82%*
-------
Total Annual Fund Operating Expenses 1.47%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP SMALL CAP GROWTH FUND -- CLASS A SHARES 1.10%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP Small Cap Growth Fund -- Class A Shares $150 $465
</TABLE>
<PAGE>
10 PROSPECTUS
SEI VP INTERNATIONAL EQUITY FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Capital appreciation
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY Medium to high
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing multiple specialist sub-advisers, the Fund invests
in equity securities of foreign companies
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP International Equity Fund invests primarily in common stocks and
other equity securities of foreign companies. The Fund primarily invests in
companies located in developed countries, but may also invest in companies
located in emerging markets. The Fund uses a multi-manager approach, relying
upon a number of Sub-Advisers to manage portions of the Fund's portfolio under
the general supervision of SIMC. The Fund is diversified as to issuers, market
capitalization, industry and country.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's securities may
fluctuate drastically from day to day. Individual companies may report poor
results or be negatively affected by industry and/or economic trends and
developments. The prices of securities issued by such companies may suffer a
decline in response. In the case of foreign stocks, these fluctuations will
reflect international economic and political events, as well as changes in
currency valuations relative to the U.S. dollar. These factors contribute to
price volatility, which is the principal risk of investing in the Fund.
Investing in issuers located in foreign countries poses distinct risks since
political and economic events unique to a country or region will affect those
markets and their issuers. These events will not necessarily affect the U.S.
economy or similar issuers located in the United States. In addition,
investments in foreign countries are generally denominated in a foreign
currency. As a result, changes in the value of those currencies compared to the
U.S. dollar may affect (positively or negatively) the value of a Fund's
investments. These currency movements may happen separately from and in response
to events that do not otherwise affect the value of the security in the issuer's
home country. These various risks will be even greater for investments in
emerging market countries since political turmoil and rapid changes in economic
conditions are more likely to occur in these countries.
The Fund is also subject to the risk that developed international equity
securities may underperform other segments of the equity market or the equity
markets as a whole.
<PAGE>
PROSPECTUS 11
SEI VP INTERNATIONAL EQUITY FUND
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP International Equity Fund had not commenced
operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Investment Advisory Fees 0.51%
Distribution (12b-1) Fees None
Other Expenses 1.06%*
-------
Total Annual Fund Operating Expenses 1.57%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP INTERNATIONAL EQUITY FUND -- CLASS A SHARES 1.28%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP International Equity Fund -- Class A
Shares $160 $496
</TABLE>
<PAGE>
12 PROSPECTUS
SEI VP EMERGING MARKETS EQUITY FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Capital appreciation
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY Very high
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing multiple specialist sub-advisers, the Fund invests
in equity securities of emerging markets companies
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP Emerging Markets Equity Fund invests primarily in common stocks and
other equity securities of foreign companies located in emerging market
countries. Emerging market countries are countries that the World Bank or the
United Nations considers to be emerging or developing. The Fund uses a
multi-manager approach, relying upon a number of Sub-Advisers to manage portions
of the Fund's portfolio under the general supervision of SIMC. The Fund's
portfolio is diversified as to issuers, market capitalization, industry and
country.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's securities may
fluctuate drastically from day to day. Individual companies may report poor
results or be negatively affected by industry and/or economic trends and
developments. The prices of securities issued by such companies may suffer a
decline in response. In the case of foreign stocks, these fluctuations will
reflect international economic and political events, as well as changes in
currency valuations relative to the U.S. dollar. These factors contribute to
price volatility, which is one principal risk of investing in the Fund.
Investing in issuers located in foreign countries poses distinct risks since
political and economic events unique to a country or region will affect those
markets and their issuers. These events will not necessarily affect the U.S.
economy or similar issuers located in the United States. In addition,
investments in foreign countries are generally denominated in a foreign
currency. As a result, changes in the value of those currencies compared to the
U.S. dollar may affect (positively or negatively) the value of a Fund's
investments. These currency movements may happen separately from and in response
to events that do not otherwise affect the value of the security in the issuer's
home country. These various risks will be even greater for investments in
emerging market countries.
Emerging market countries are countries that the World Bank or the United
Nations considers to be emerging or developing. Emerging markets may be more
likely to experience political turmoil or rapid changes in market or economic
conditions than more developed countries. In addition, the financial stability
of issuers (including governments) in emerging market countries may be more
precarious than in other countries. As a result, there will tend to be an
increased risk of price volatility associated with the Fund's investment in
emerging market countries, which may be magnified by currency fluctuation
relative to the U.S. dollar.
Emerging markets may be more likely to experience political turmoil or rapid
changes in market or economic conditions than more developed countries. In
addition, the financial stability of issuers (including governments) in emerging
market countries may be more precarious than in other countries. As a result,
there will tend to be an increased risk of price volatility associated with the
Fund's investments in emerging market countries, which may be magnified by
currency fluctuations relative to the U.S. dollar.
The Fund is also subject to the risk that emerging market equity securities may
underperform other segments of the equity market or the equity markets as a
whole.
<PAGE>
PROSPECTUS 13
SEI VP EMERGING MARKETS EQUITY FUND
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP Emerging Markets Equity Fund had not
commenced operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Investment Advisory Fees 1.05%
Distribution (12b-1) Fees None
Other Expenses 1.33%*
-------
Total Annual Fund Operating Expenses 2.38%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP EMERGING MARKETS EQUITY FUND -- CLASS A SHARES 1.95%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP Emerging Markets Equity Fund -- Class A Shares $241 $742
</TABLE>
<PAGE>
14 PROSPECTUS
SEI VP CORE FIXED INCOME FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Current income and preservation of capital
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY Medium
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing multiple specialist sub-advisers that have fixed
income investment expertise, the Fund invests in investment
grade U.S. fixed income securities
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP Core Fixed Income Fund invests primarily in investment grade U.S.
corporate and government fixed income securities, including mortgage-backed
securities. The Fund uses a multi-manager approach, relying upon a number of
Sub-Advisers to manage portions of the Fund's portfolio under the general
supervision of SIMC. Sub-Advisers are selected for their expertise in managing
various kinds of fixed income securities, and each Sub-Adviser makes investment
decisions based on an analysis of yield trends, credit ratings and other factors
in accordance with its particular discipline. While each Sub-Adviser chooses
securities of different types and maturities, the Fund in the aggregate
generally will have a dollar-weighted average duration that is consistent with
that of the broad U.S. fixed income market (currently 4.9 years).
Due to its investment strategy, the Fund may buy and sell securities frequently.
This may result in higher transaction costs and additional capital gains tax
liabilities.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
The prices of the Fund's fixed income securities respond to economic
developments, particularly interest rate changes, as well as to perceptions
about the creditworthiness of individual issuers, including governments.
Generally, the Fund's fixed income securities will decrease in value if interest
rates rise and vice versa, and the volatility of lower rated securities is even
greater than that of higher rated securities. Also, longer-term securities are
generally more volatile, so the average maturity or duration of these securities
affects risk.
Although the Fund's U.S. government securities are considered to be among the
safest investments, they are not guaranteed against price movements due to
changing interest rates. Obligations issued by some U.S. government agencies are
backed by the U.S. Treasury, while others are backed solely by the ability of
the agency to borrow from the U.S. Treasury or by the agency's own resources.
Mortgage-backed securities are fixed income securities representing an interest
in a pool of underlying mortgage loans. Mortgage-backed securities are sensitive
to changes in interest rates, but may respond to these changes differently from
other fixed income securities due to the possibility of prepayment of the
underlying mortgage loans. As a result, it may not be possible to determine in
advance the actual maturity date or average life of a mortgage-backed security.
Rising interest rates tend to discourage refinancings, with the result that the
average life and volatility of the security will increase, exacerbating its
decrease in market price. When interest rates fall, however, mortgage-backed
securities may not gain as much in market value because of the expectation of
additional mortgage prepayments, that must be reinvested at lower interest
rates. Prepayment risk may make it difficult to calculate the average maturity
of the Fund's mortgage-backed securities and, therefore, to assess the
volatility risk of the Fund.
The privately issued mortgage-backed securities that the Fund invests in are not
issued or guaranteed by the U.S. Government or its agencies or instrumentalities
and may bear a greater risk of nonpayment than securities that are backed by the
U.S. Treasury. However, the timely payment of principal and interest normally is
supported, at least partially, by various credit enhancements by banks and other
financial institutions. There can be no assurance, however, that such credit
enhancements will support full payment of the principal and interest on such
obligations. In addition, changes in the credit quality of the entity which
provides credit enhancement could cause losses to the Fund and affect its share
price.
The Fund is also subject to the risk that U.S. fixed income securities may
underperform other segments of the fixed income market or the fixed income
markets as a whole.
<PAGE>
PROSPECTUS 15
SEI VP CORE FIXED INCOME FUND
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP Core Fixed Income Fund had not commenced
operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Investment Advisory Fees 0.28%
Distribution (12b-1) Fees None
Other Expenses 0.75%*
-------
Total Annual Fund Operating Expenses 1.03%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP CORE FIXED INCOME FUND -- CLASS A SHARES 0.60%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP Core Fixed Income Fund -- Class A Shares $105 $328
</TABLE>
<PAGE>
16 PROSPECTUS
SEI VP HIGH YIELD BOND FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Total return
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY High
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing multiple specialist sub-advisers that have high
yield investment expertise, the Fund invests in high yield,
high risk securities
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP High Yield Bond Fund invests primarily in fixed income securities
rated below investment grade ("junk bonds"), including corporate bonds and
debentures, convertible and preferred securities, and zero coupon obligations.
The Fund uses a multi-manager approach, relying on a number of Sub-Advisers to
manage portions of the Fund's portfolio under the general supervision of SIMC.
In managing the Fund's assets, the Sub-Advisers select securities that offer a
high current yield as well as total return potential. The Fund's securities are
diversified as to issuers and industries. The Fund's average weighted maturity
may vary, and will generally not exceed ten years. There is no limit on the
maturity or on the credit quality of any security.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
The prices of the Fund's fixed income securities respond to economic
developments, particularly interest rate changes, as well as to perceptions
about the creditworthiness of individual issuers, including governments.
Generally, the Fund's fixed income securities will decrease in value if interest
rates rise and vice versa, and the volatility of lower rated securities is even
greater than that of higher rated securities. Also, longer-term securities are
generally more volatile, so the average maturity or duration of these securities
affects risk.
Junk bonds involve greater risks of default or downgrade and are more volatile
than investment grade securities. Junk bonds involve a greater risk of price
declines than investment grade securities due to actual or perceived changes in
an issuer's creditworthiness. In addition, issuers of junk bonds may be more
susceptible than other issuers to economic downturns. Junk bonds are subject to
the risk that the issuer may not be able to pay interest or dividends and
ultimately to repay principal upon maturity. Discontinuation of these payments
could substantially adversely affect the market value of the security.
The Fund is also subject to the risk that high yield securities may underperform
other segments of the fixed income market or the fixed income markets as a
whole.
<PAGE>
PROSPECTUS 17
SEI VP HIGH YIELD BOND FUND
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP High Yield Bond Fund had not commenced
operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Investment Advisory Fees 0.49%
Distribution (12b-1) Fees None
Other Expenses 0.82%*
-------
Total Annual Fund Operating Expenses 1.31%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP HIGH YIELD BOND FUND -- CLASS A SHARES 0.85%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP High Yield Bond Fund -- Class A Shares $133 $415
</TABLE>
<PAGE>
18 PROSPECTUS
SEI VP INTERNATIONAL FIXED INCOME FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Capital appreciation and current income
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY High
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing a specialist sub-adviser, the Fund invests in
investment grade fixed income securities of foreign
government and corporate issuers
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP International Fixed Income Fund invests primarily in foreign
government, corporate, and mortgage-backed securities. In selecting investments
for the Fund, the Sub-Adviser chooses investment grade securities issued by
corporations and governments located in various developed foreign countries,
looking for opportunities for capital appreciation and gain, as well as current
income. The Fund's portfolio is not hedged against currency fluctuations
relative to the U.S. dollar. There are no restrictions on the Fund's average
portfolio maturity or on the maturity of any specific security.
Due to its investment strategy, the Fund may buy and sell securities frequently.
This may result in higher transaction costs and additional capital gains tax
liabilities.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
The prices of the Fund's fixed income securities respond to economic
developments, particularly interest rate changes, as well as to perceptions
about the creditworthiness of individual issuers, including governments.
Generally, the Fund's fixed income securities will decrease in value if interest
rates rise and vice versa, and the volatility of lower rated securities is even
greater than that of higher rated securities. Also, longer-term securities are
generally more volatile, so the average maturity or duration of these securities
affects risk. In the case of foreign securities, price fluctuations will reflect
international economic and political events, as well as changes in currency
valuations relative to the U.S. dollar.
Investing in issuers located in foreign countries poses distinct risks since
political and economic events unique to a country or region will affect those
markets and their issuers. These events will not necessarily affect the U.S.
economy or similar issuers located in the United States. In addition,
investments in foreign countries are generally denominated in a foreign
currency. As a result, changes in the value of those currencies compared to the
U.S. dollar may affect (positively or negatively) the value of a Fund's
investments. These currency movements may happen separately from and in response
to events that do not otherwise affect the value of the security in the issuer's
home country. These various risks will be even greater for investments in
emerging market countries since political turmoil and rapid changes in economic
conditions are more likely to occur in these countries.
The Fund is non-diversified, which means that it may invest in the securities of
relatively few issuers. As a result, the Fund may be more susceptible to a
single adverse economic or political occurrence affecting one or more of these
issuers, and may experience increased volatility due to its investments in those
securities.
The Fund is also subject to the risk that developed international fixed income
securities, may underperform other segments of the fixed income market or the
fixed income markets as a whole.
<PAGE>
PROSPECTUS 19
SEI VP INTERNATIONAL FIXED INCOME FUND
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP International Fixed Income Fund had not
commenced operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Investment Advisory Fees 0.30%
Distribution (12b-1) Fees None
Other Expenses 1.41%*
-------
Total Annual Fund Operating Expenses 1.71%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP INTERNATIONAL FIXED INCOME FUND -- CLASS A SHARES 1.00%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP International Fixed Income Fund -- Class A
Shares $174 $539
</TABLE>
<PAGE>
20 PROSPECTUS
SEI VP EMERGING MARKETS DEBT FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Total return
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY High to very high
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing a specialist sub-adviser, the Fund invests U.S.
dollar denominated debt in securities of emerging market
issuers
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP Emerging Markets Debt Fund invests primarily in U.S. dollar
denominated debt securities of government, government-related and corporate
issuers in emerging markets countries, as well as entities organized to
restructure the outstanding debt of such issuers. Emerging market countries are
countries that the World Bank or the United Nations considers to be emerging or
developing. Emerging markets may be more likely to experience political turmoil
or rapid changes in market or economic conditions than more developed countries.
In addition, the financial stability of issuers (including governments) in
emerging market countries may be more precarious than in other countries. As a
result, there will tend to be an increased risk of price volatility associated
with the Fund's investments in emerging market countries, which may be magnified
by currency fluctuations relative to the U.S. dollar.
The Sub-Adviser will spread the Fund's holdings across a number of countries and
industries to limit its exposure to a single emerging market economy. There are
no restrictions on the Fund's average portfolio maturity, or on the maturity of
any specific security. There is no minimum rating standard for the Fund's
securities, and the Fund's securities will generally be in the lower or lowest
rating categories.
Due to its investment strategy, the Fund may buy and sell securities frequently.
This may result in higher transaction costs and additional capital gains tax
liabilities.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
The prices of the Fund's fixed income securities respond to economic
developments, particularly interest rate changes, as well as to perceptions
about the creditworthiness of individual issuers, including governments.
Generally, the Fund's fixed income securities will decrease in value if interest
rates rise and vice versa, and the volatility of lower rated securities is even
greater than that of higher rated securities. Also, longer-term securities are
generally more volatile, so the average maturity or duration of these securities
affects risk.
Investing in issuers located in foreign countries poses distinct risks since
political and economic events unique to a country or region will affect those
markets and their issuers. These events will not necessarily affect the U.S.
economy or similar issuers located in the United States. In addition,
investments in foreign countries may be denominated in a foreign currency. As a
result, changes in the value of those currencies compared to the U.S. dollar may
affect (positively or negatively) the value of a Fund's investments. These
currency movements may happen separately from and in response to events that do
not otherwise affect the value of the security in the issuer's home country.
These various risks will be even greater for investments in emerging market
countries since political turmoil and rapid changes in economic conditions are
more likely to occur in these countries.
"Junk" bonds involve greater risks of default or downgrade, and involve greater
risk of price declines than investment grade securities due to actual or
perceived changes in an issuer's creditworthiness. In addition, issuers of junk
bonds may be more susceptible than other issuers to economic downturns. Junk
bonds are subject to the risk that the issuer may not be able to pay interest or
dividends and ultimately to repay principal upon maturity. Discontinuation of
these payments could substantially adversely affect the market value of the
security. The volatility of junk bonds and certain foreign sovereign debt
securities is even greater since the prospects for repayment of principal and
interest of many of these securities is speculative. Some may even be in
default. As an incentive to invest in these risky securities, they tend to offer
higher returns.
Emerging market countries are countries that the World Bank or the United
Nations considers to be emerging or developing. Emerging markets may be more
likely to experience political turmoil or rapid changes in market or economic
conditions than
<PAGE>
PROSPECTUS 21
SEI VP EMERGING MARKETS DEBT FUND
more developed countries. In addition, the financial stability of issuers
(including governments) in emerging market countries may be more precarious than
in other countries. As a result, there will tend to be an increased risk of
price volatility associated with the Fund's investment in emerging market
countries.
The foreign sovereign debt securities and "Brady Bonds" the Fund purchases
involve specific risks, including the risk that: (i) the governmental entity
that controls the repayment of sovereign debt may not be willing or able to
repay the principal and/or interest when it becomes due, due to factors such as
debt service burden, political constraints, cash flow problems and other
national economic factors; (ii) governments may default on their sovereign debt,
which may require holders of such sovereign debt to participate in debt
rescheduling or additional lending to defaulting governments; and (iii) there
may be no bankruptcy proceeding by which defaulted sovereign debt may be
collected in whole or in part.
The Fund is non-diversified, which means that it may invest in the securities of
relatively few issuers. As a result, the Fund may be more susceptible to a
single adverse economic or political occurrence affecting one or more of these
issuers, and may experience increased volatility due to its investments in those
securities.
The Fund is also subject to the risk that emerging markets debt securities may
underperform other segments of the fixed income market or the fixed income
markets as a whole.
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP Emerging Markets Debt Fund had not commenced
operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Investment Advisory Fees 0.85%
Distribution (12b-1) Fees None
Other Expenses 1.44%*
-------
Total Annual Fund Operating Expenses 2.29%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP EMERGING MARKETS DEBT FUND -- CLASS A SHARES 1.35%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP Emerging Markets Debt Fund -- Class A Shares $232 $715
</TABLE>
<PAGE>
22 PROSPECTUS
MORE INFORMATION ABOUT FUND INVESTMENTS
This prospectus describes the Funds' primary strategies, and the Funds will
normally invest at least 65% of their assets in the types of securities
described in this prospectus. However, each Fund also may invest in other
securities, use other strategies and engage in other investment practices. These
investments and strategies, as well as those described in this prospectus, are
described in detail in the Funds' Statement of Additional Information ("SAI").
The investments and strategies described throughout this prospectus are those
that the Sub-Advisers use under normal conditions. During unusual economic or
market conditions or for temporary defensive or liquidity purposes, each Fund
may invest up to 100% of its assets in cash, money market instruments,
repurchase agreements and short-term obligations that would not ordinarily be
consistent with the Funds' objectives. A Fund will do so only if the Adviser or
Sub-Advisers believe that the risk of loss outweighs the opportunity for capital
gains and higher income. Of course, there is no guarantee that any Fund will
achieve its investment goal.
INVESTMENT ADVISER AND SUB-ADVISERS
SEI INVESTMENTS MANAGEMENT CORPORATION ("SIMC") ACTS AS THE MANAGER OF MANAGERS
OF THE FUNDS, AND IS RESPONSIBLE FOR THE INVESTMENT PERFORMANCE OF THE FUNDS
SINCE IT ALLOCATES EACH FUND'S ASSETS TO ONE OR MORE SUB-ADVISERS AND RECOMMENDS
HIRING OR CHANGING SUB-ADVISERS TO THE BOARD OF TRUSTEES.
Each Sub-Adviser makes investment decisions for the assets it manages and
continuously reviews, supervises and administers its investment program. SIMC
oversees the Sub-Advisers to ensure compliance with the Funds' investment
policies and guidelines, and monitors each Sub-Adviser's adherence to its
investment style. The Board of Trustees supervises SIMC and the Sub-Advisers;
establishes policies that they must follow in their management activities; and
oversees the hiring and termination of Sub-Advisers recommended by SIMC. SIMC
pays the Sub-Advisers out of the investment advisory fees it receives.
SIMC, an SEC-registered adviser, serves as the Adviser to the Funds. As of
December 31, 1999, SIMC had approximately $61.8 billion in assets under
management. SIMC is entitled to investment advisory fees as follows:
<TABLE>
<S> <C>
SEI VP Large Cap Value Fund 0.35%
SEI VP Large Cap Growth Fund 0.40%
SEI VP Small Cap Value Fund 0.65%
SEI VP Small Cap Growth Fund 0.65%
SEI VP International Equity Fund 0.51%
SEI VP Emerging Markets Equity Fund 1.05%
SEI VP Core Fixed Income Fund 0.28%
SEI VP High Yield Bond Fund 0.49%
SEI VP International Fixed Income Fund 0.30%
SEI VP Emerging Markets Debt Fund 0.85%
</TABLE>
<PAGE>
PROSPECTUS 23
INVESTMENT ADVISER, SUB-ADVISERS AND PORTFOLIO MANAGERS
SUB-ADVISERS AND PORTFOLIO MANAGERS
SEI VP LARGE CAP VALUE FUND:
LSV Asset Management, L.P.: Josef Lakonishok, Andrei Shleifer and Robert Vishny
of LSV Asset Management, L.P. ("LSV"), serve as portfolio managers of a portion
of the assets of the SEI VP Large Cap Value Fund. Mr. Lakonishok, Mr. Shleifer
and Mr. Vishny are officers and partners of LSV. An affiliate of SIMC owns an
interest in LSV. SIMC pays LSV a fee, which is calculated and paid monthly,
based on an annual rate of .20% of the average monthly market value of the
assets of the Fund managed by LSV.
Mellon Equity Associates, LLP: William P. Rydell and Robert A. Wilk of Mellon
Equity Associates, LLP ("Mellon Equity"), serve as portfolio managers of a
portion of the assets of the SEI VP Large Cap Value Fund. Mr. Rydell is the
President and Chief Executive Officer of Mellon Equity, and has been managing
individual and collective portfolios at Mellon Equity since 1982. Mr. Wilk is a
Senior Vice President and Portfolio Manager of Mellon Equity, and has been
involved with securities analysis, quantitative research, asset allocation,
trading, and client services at Mellon Equity since April 1990.
Sanford C. Bernstein & Co., Inc.: Lewis A. Sanders and Marilyn Goldstein Fedak
of Sanford C. Bernstein & Co., Inc. ("Bernstein"), serve as portfolio managers
of a portion of the assets of the SEI VP Large Cap Value Fund. Mr. Sanders has
been employed by Bernstein since 1969, and is currently Chairman of the Board,
Chief Executive Officer, and a Director of Bernstein. Ms. Fedak, Chief
Investment Officer -- Large Capitalization Domestic Equities and a Director of
Bernstein, has been employed by Bernstein since 1984.
SEI VP LARGE CAP GROWTH FUND:
Alliance Capital Management L.P.: A committee of investment professionals at
Alliance Capital Management L.P. manages a portion of the assets of the SEI VP
Large Cap Growth Fund.
Provident Investment Counsel, Inc.: George E. Handtmann III and Jeffrey J.
Miller of Provident Investment Counsel, Inc. ("Provident"), serve as portfolio
managers of a portion of the assets of the SEI VP Large Cap Growth Fund. Mr.
Handtmann has been with Provident since 1982, and Mr. Miller has been with
Provident since 1972.
TCW Investment Management Company: Glen E. Bickerstaff of TCW Investment
Management Company ("TCW") serves as portfolio manager of a portion of the
assets of the SEI VP Large Cap Growth Fund. Mr. Bickerstaff is a Managing
Director of TCW, and has over 18 years of investment experience dedicated to
investing large cap growth securities. Mr. Bickerstaff joined TCW in May, 1998
after 10 years at Transamerica Investment Services, where he served as Vice
President and Senior Portfolio Manager.
SEI VP SMALL CAP VALUE FUND:
Artisan Partners Limited Partnership: Scott Satterwhite of Artisan Partners
Limited Partnership ("Artisan") serves as portfolio manager of a portion of the
assets of the SEI VP Small Cap Value Fund. Mr. Satterwhite, a managing director
of Artisan, has been with Artisan since 1996. Prior to joining Artisan, Mr.
Satterwhite was a portfolio manager at Wachovia Bank, N.A.
LSV Asset Management, L.P.: Josef Lakonishok, Andrei Shleifer, and Robert Vishny
of LSV Asset Management, L.P. ("LSV"), serve as portfolio managers of a portion
of the assets of the SEI VP Small Cap Value Fund. Mr. Lakonishok, Mr. Shleifer
and Mr. Vishny are officers and partners of LSV. An affiliate of SIMC owns an
interest in LSV. SIMC pays LSV a fee, which is calculated and paid monthly,
based on an annual rate of 0.50% of the average monthly market value of the
assets of the Fund managed by LSV.
<PAGE>
24 PROSPECTUS
INVESTMENT ADVISER, SUB-ADVISERS AND PORTFOLIO MANAGERS
Mellon Equity Associates, LLP: William P. Rydell and Robert A. Wilk of Mellon
Equity Associates, LLP ("Mellon Equity"), serve as portfolio managers of a
portion of the assets of the SEI VP Small Cap Value Fund. Mr. Rydell is the
President and Chief Executive Officer of Mellon Equity, and has been managing
individual and collective portfolios at Mellon Equity since 1982. Mr. Wilk is a
Senior Vice President and Portfolio Manager of Mellon Equity, and has been
involved with securities analysis, quantitative research, asset allocation,
trading, and client services at Mellon Equity since April 1990.
Security Capital Global Capital Management Incorporated: Anthony R. Manno Jr.,
Kenneth D. Statz, and Kevin W. Bedell comprise the Portfolio Management
Committee of Security Capital Global Capital Management Incorporated ("Security
Capital"). The Portfolio Management Committee is responsible for determining the
portfolio composition for the Fund's assets allocated to Security Capital. The
members of the Portfolio Management Committee have an average of 18 years of
investment experience.
SEI VP SMALL CAP GROWTH FUND:
Mazama Capital Management, LLC: Ron Sauer and Stephen Brink, CFA, of Mazama
Capital Management, LLC ("Mazama") serve as the portfolio managers to a portion
of the assets of the SEI V.P. Small Cap Growth Fund. Prior to founding Mazama,
Mr. Sauer served as President and Director of Research at Black & Company and
Mr. Brink served as Chief Investment Officer for the Pacific Northwest office of
U.S. Trust. Mr. Sauer and Mr. Brink have over 19 and 22 years of investment
experience, respectively.
Nicholas-Applegate Capital Management ("Nicholas-Applegate") serves as
Sub-Advisor of a portion of the assets of the SEI VP Small Cap Growth Fund under
the general supervision of Arthur E. Nicholas, founder and Chief Investment
Officer of the firm, and Catherine Somehegyi, Chief Investment Officer of the
firm's gloabl equities and trading since 1987. Nicholas-Applegate uses a team
approach for the day-to-day management of the Fund's assets. John Kane is the
lead portfolio manager of Nicholas-Applegate's U.S. Systematic team. Mr. Kane
has been a fund manager and investment team leader since June 1994. Prior to
joining Nicholas-Applegate, he had 25 years of investment/economics experience
with ARCO Investment Management Company and General Electric Company.
RS Investment Management, L.P.: Jim Callinan of Robertson, Stephens Investment
Management, L.P. ("RSIM"), serves as portfolio manager of a portion of the
assets of the SEI VP Small Cap Growth Fund. Mr. Callinan is a managing director
of RSIM. He joined RSIM in June 1996 after nine years at Putnam Investments
("Putnam") in Boston, where he served as a portfolio manager of the Putnam OTC
Emerging Growth Fund. Mr. Callinan also served as a specialty growth research
analyst and portfolio manager of both the Putnam Emerging Information Science
Trust Fund and the Putnam Emerging Health Sciences Trust Fund while at Putnam.
Sawgrass Asset Management, LLC: Dean McQuiddy of Sawgrass Asset Management, LLC
("Sawgrass"), serves as portfolio manager of a portion of the assets of the SEI
VP Small Cap Growth Fund. Mr. McQuiddy, a founding Principal of Sawgrass, has 12
years of investment experience. Prior to joining Sawgrass, he was a portfolio
manager at Barnett Capital Advisors.
Wall Street Associates: William Jeffery III and Kenneth F. McCain of Wall Street
Associates ("WSA") serve as portfolio managers of a portion of the assets of the
SEI VP Small Cap Growth Fund. Each is a controlling principal of WSA. They each
have over 27 years of investment management experience. David Baratta, who
joined WSA in 1999, also serves as a portfolio manager of a portion of the
assets of the SEI VP Small Cap Growth Fund. Prior to joining WSA, Mr. Baratta
was a portfolio manager of Morgan Grenfell, Inc. for 5 years. He has over 19
years of investment experience.
SEI VP INTERNATIONAL EQUITY FUND:
Acadian Asset Management, Inc.: A committee of investment professionals at
Acadian Asset Management, Inc. manages a portion of the assets of the SEI VP
International Equity Fund.
<PAGE>
PROSPECTUS 25
INVESTMENT ADVISER, SUB-ADVISERS AND PORTFOLIO MANAGERS
BlackRock International, Ltd.: Albert B. Morillo heads an investment committee
at BlackRock International, Ltd. ("BlackRock"), that serves as portfolio manager
of a portion of the assets of the SEI VP International Equity Fund. Prior to
joining BlackRock in January 2000, Mr. Morillo was the head of the European Team
of Scottish Widows Investment Management since 1991.
Capital Guardian Trust Company: A group of investment professionals at Capital
Guardian Trust Company each individually manage a portion of the assets of the
SEI VP International Equity Fund.
Oechsle International Advisors, LLC: S. Dewey Keesler, Jr. and Kathleen Harris
of Oechsle International Advisors, LLC ("Oechsle"), serve as Portfolio Managers
of a portion of the assets of the SEI VP International Equity Fund. Mr. Keesler
is a Principal and Chief Investment Officer at Oechsle. Prior to joining
Oechsle, Mr. Keesler was a Portfolio Manager at Putman International Advisors.
Ms. Harris is a Principal at Oechsle. Prior to joining Oechsle, she was a
Portfolio Manager and Investment Director for the State of Wisconsin Investment
Board.
SG Yamaichi Asset Management Company, Ltd., SG Pacific Asset Management, Inc.,
and SGY Asset Management (Singapore) Ltd.: Marco Wong and Hiroyoshi Nakagawa of
SG Yamaichi Asset Management Co., Ltd. ("SG Yamaichi"), SG Pacific Asset
Management, Inc. ("SG Pacific"), and SGY Asset Management (Singapore) Ltd.
("SGY"), serve as portfolio managers of a portion of the assets of the SEI VP
International Equity Fund. Mr. Wong leads the management team for the assets of
the Fund allocated to SG Pacific, SGY and SG Yamaichi. Mr. Wong has been with SG
Yamaichi since 1986. Mr. Nakagawa oversees the Japan investment team in Tokyo,
and also serves as portfolio manager for the International Equity Fund. Mr.
Nakagawa joined SG Yamaichi in 1977.
SEI VP EMERGING MARKETS EQUITY FUND:
Coronation Asset Management (Proprietary) Limited: Anthony Gibson and Louis
Stassen of Coronation Asset Management (Proprietary) Limited ("Coronation")
serve as portfolio managers of a portion of the assets of the SEI VP Emerging
Markets Equity Fund. Prior to joining Coronation in 1993, Mr. Gibson, the head
of Coronation's Investment Committee, and Mr. Stassen, the head of Coronation's
research department, worked at Syfrets Managed Assets for seven years and one
year, respectively. Prior to joining Syfrets Managed Assets, Mr. Stassen worked
as an Investment Analyst for Allan Gray Investment Counsel. Prior to joining
Coronation, Mr. Aylett worked at Syfrets Managed Assets as Fund Manager and Head
of Research.
Credit Suisse Asset Management Limited: Glenn Wellman and Isabel Knight of
Credit Suisse Asset Management Limited ("Credit Suisse") serve as portfolio
managers of a portion of the assets of the SEI VP Emerging Markets Equity Fund.
Mr. Wellman is a Managing Director of Credit Suisse. Prior to joining Credit
Suisse in 1993, he was a Director and Senior Vice President at Alliance Capital
Limited. Ms. Knight is a Director of Credit Suisse. Prior to joining Credit
Suisse in 1997, she was Senior Fund Manager at Foreign and Colonial from 1995 to
1997. From 1992 to 1995, Ms. Knight was a Portfolio Manager for Morgan Stanley
Asset Management.
Morgan Stanley Dean Witter Investment Management Inc.: Robert L. Meyer, Michael
Perl and Andy Skov of Morgan Stanley Dean Witter Investment Management Inc.
("MSDW Investment Management") serve as portfolio managers of a portion of the
assets of the SEI VP Emerging Markets Equity Fund. Mr. Meyer is a Managing
Director and joined MSDW Investment Management in 1989 after working for the law
firm of Irell & Manella. Mr. Perl is a Vice President and joined MSDW Investment
Management after 6 years at Bankers Trust Australia, where he served as a
Portfolio Manager. Mr. Skov is a Principal and joined MSDW Investment Management
after 4 years as an Associate at Bankers Trust.
Nicholas-Applegate Capital Management ("Nicholas-Applegate") serves as
Sub-Advisor of a portion of the assets of the SEI VP Emerging Markets Equity
Fund under the general supervision of Arthur E. Nicholas, founder and Chief
Investment Officer of the firm, and Catherine Somehegyi, Chief Investment
Officer of the firm's gloabl equities and trading since 1987. Nicholas-
Applegate uses a team approach for the day-to-day management of the Fund's
assets. Pedro Marcal and Ernesto Ramos are the Emerging Countries investment
team leaders. Mr. Marcal joined the firm in 1994. Prior to joining
Nicholas-Applegate, he
<PAGE>
26 PROSPECTUS
INVESTMENT ADVISER, SUB-ADVISERS AND PORTFOLIO MANAGERS
was an economist with A.B. Laffer, V.A. Canto & Associates. Mr. Ramos joined the
firm in 1994. Prior to joining Nicholas-Applegate, he specialized in investment
and quantitative research with Batterymarch Financial Management; Bolt Beranck &
Newman Inc. and Harvard University.
Schroder Investment Management North America Inc.: Schroder Investment
Management North America Inc. ("Schroders"), acts as a Sub-Adviser for a portion
of the assets of the SEI VP Emerging Markets Equity Fund. A team of investment
professionals at Schroders manages a portion of the assets of the SEI VP
Emerging Markets Equity Fund. Giles Neville heads the Emerging Markets Committee
at Schroders. Mr. Neville has over 12 years of investment experience.
SG Pacific Asset Management, Inc. and SGY Asset Management (Singapore) Ltd.:
Marco Wong of SG Pacific Asset Management, Inc. ("SG Pacific") and SGY Asset
Management (Singapore) Ltd. ("SGY"), serves as portfolio manager of a portion of
the assets of the SEI VP Emerging Markets Equity Fund. Mr. Wong leads the
management team for the assets of the Fund allocated to SG Pacific and SGY.
Mr. Wong has been with SG Yamaichi Asset Management Co., Ltd., the parent of SGY
and SG Pacific, since 1986.
SEI VP CORE FIXED INCOME FUND:
BlackRock Financial Management, Inc.: Keith Anderson and Andrew Phillips of
BlackRock Financial Management, Inc. ("BlackRock"), serve as portfolio managers
of a portion of the assets of the SEI VP Core Fixed Income Fund. Mr. Anderson is
a Managing Director and Co-Head of Portfolio Management at BlackRock, and has 14
years' experience investing in fixed income securities. Mr. Phillips is a
Principal and portfolio manager with primary responsibility for the management
of the firm's investment activities in fixed-rate mortgage securities.
Robert W. Baird & Co., Incorporated: Charles B. Groeschell of Robert W. Baird &
Co., Incorporated ("Baird"), serves as a portfolio manager of the portion of the
assets of the SEI VP Core Fixed Income Fund managed by Baird. Prior to joining
Baird in March 2000, Mr. Groeschell was a Senior Vice President and portfolio
manager for Firstar Investment Management & Resource Company, LLC.
Mr. Groeschell has over 17 years of investment experience.
Western Asset Management Company: A committee of investment professionals at
Western Asset Management Company manages a portion of the assets of the SEI VP
Core Fixed Income Fund.
SEI VP HIGH YIELD BOND FUND:
Credit Suisse Asset Management, LLC: Richard J. Lindquist, C.F.A., of Credit
Suisse Asset Management, LLC ("CSAM") serves as portfolio manager of the SEI VP
High Yield Bond Fund. Mr. Lindquist joined CSAM in 1995 as a result of CSAM's
acquisition of CS First Boston Investment Management, and has had 15 years of
investment management experience, all of which were with high yield bonds. Prior
to joining CS First Boston, Mr. Lindquist was with Prudential Insurance Company
of America where he managed high yield funds totaling approximately $1.3
billion.
Nomura Corporate Research and Asset Management Inc.: Robert Levine, CFA,
President and Chief Executive Officer of Nomura Corporate Research and Asset
Management Inc. ("Nomura") and Richard A. Buch, Managing Director and Senior
Portfolio Manager of Nomura, are responsible for the management of Nomura's high
yield bond portfolios and research analysis. Prior to joining Nomura,
Mr. Levine was President of Kidder, Peabody High Yield Asset Management, Inc.
and Managing Director of Kidder, Peabody & Co., where he created their first
high yield bond mutual fund. Prior to joining Nomura, Mr. Buch was with Kidder,
Peabody & Co. where he served as Senior Vice President of the Kidder, Peabody
Asset Management, Inc. Mr. Levine and Mr. Buch each have over 20 years of
investment experience.
<PAGE>
PROSPECTUS 27
INVESTMENT ADVISER, SUB-ADVISERS AND PORTFOLIO MANAGERS
SEI VP INTERNATIONAL FIXED INCOME FUND:
Strategic Fixed Income, L.L.C.: Kenneth Windheim, Gregory Barnett and David
Jallits of Strategic Fixed Income, L.L.C. ("Strategic"), serve as portfolio
managers of the SEI VP International Fixed Income Fund. Mr. Windheim is the
President of Strategic. Prior to joining Strategic, Mr. Windheim was the Chief
Investment Officer and Managing Director of the group which managed global fixed
income portfolios at Prudential Asset Management. Prior to joining Strategic,
Mr. Barnett was portfolio manager for the Pilgrim Multi-Market Income Fund.
Prior to that, he was vice president and senior fixed income portfolio manager
at Lexington Management. Prior to joining Strategic, Mr. Jallits was Senior
Portfolio Manager for a hedge fund at Teton Partners.
SEI VP EMERGING MARKETS DEBT FUND:
Salomon Brothers Asset Management Inc: Peter J. Wilby leads the team of
professionals from Salomon Brothers Asset Management Inc ("SBAM") that manages a
portion of the assets of the SEI VP Emerging Markets Debt Fund. Mr. Wilby, a
Managing Director of SBAM, joined SBAM in 1989.
<PAGE>
28 PROSPECTUS
INVESTMENT ADVISER, SUB-ADVISERS AND PORTFOLIO MANAGERS
PRIOR PERFORMANCE INFORMATION
SIMC acts as manager of managers of a number of portfolios of SEI Institutional
Managed Trust ("SIMT") and SEI Institutional International Trust ("SIIT") which
served as the models for the Funds. The portfolios of SIMT and SIIT have
substantially the same investment objectives, policies and strategies as the
Funds. In addition, the Funds and the corresponding portfolios of SIMT and SIIT
will continue to have substantially similar investment strategies, techniques
and characteristics. In the future, the Funds may be managed by a group of
sub-advisers that is different than the group that managed the portfolios of
SIMT and SIIT.
The following table sets forth the name of each Fund and the name of the
corresponding SIMC-advised portfolio of SIMT or SIIT from which the Fund is
cloned.
<TABLE>
<CAPTION>
FUND CORRESPONDING PORTFOLIO
<S> <C>
SEI VP Large Cap Value Fund SIMT Large Cap Value Fund
SEI VP Large Cap Growth Fund SIMT Large Cap Growth Fund
SEI VP Small Cap Value Fund SIMT Small Cap Value Fund
SEI VP Small Cap Growth Fund SIMT Small Cap Growth Fund
SEI VP International Equity Fund SIIT International Equity Fund
SEI VP Emerging Markets Equity Fund SIIT Emerging Markets Equity Fund
SEI VP Core Fixed Income Fund SIMT Core Fixed Income Fund
SEI VP High Yield Bond Fund SIMT High Yield Bond Fund
SEI VP Emerging Markets Debt Fund SIIT Emerging Markets Bond Fund
</TABLE>
Similarly, certain advisers to portfolios of the other SEI Funds will serve as
Sub-Advisers to certain of the Funds. The SIIT International Fixed Income Fund,
as set forth below, has substantially the same investment objective, policies
and strategies as the SEI VP International Fixed Income Fund. SIMC anticipates
that the Fund and the corresponding portfolio of SIIT will be managed by the
same personnel and will have substantially similar investment strategies,
techniques and characteristics.
<TABLE>
<CAPTION>
FUND CORRESPONDING SEI FUNDS PORTFOLIO ADVISER
<S> <C> <C>
SEI VP International Fixed Income
Fund SIIT International Fixed Income Fund Strategic Fixed Income, LLC
</TABLE>
Past investment performance of the Class A Shares of the SEI Funds' portfolios,
as shown in the table below, may be relevant to your consideration of the Funds,
and illustrates SIMC and the advisers' experience in managing similar
portfolios. The investment performance of the portfolios of the SEI Funds is not
indicative of future performance of the Funds, and the portfolios of SIMT and
SIIT may have been managed by different sub-advisers than are currently managing
the Funds. The operating expenses of each Fund will be different from and may be
higher than, the operating expenses of the corresponding portfolio of the SEI
Funds. The performance information shown does not reflect separate account or
other insurance charges. As a result, the performance of the Funds will differ
from the performance of the corresponding portfolios of the SEI Funds.
<PAGE>
PROSPECTUS 29
INVESTMENT ADVISER, SUB-ADVISERS AND PORTFOLIO MANAGERS
<TABLE>
<CAPTION>
AVERAGE
YEAR-TO-DATE TOTAL RETURN TOTAL RETURN TOTAL RETURN TOTAL RETURN ANNUAL
RETURNS ONE YEAR THREE YEARS FIVE YEARS TEN YEARS TOTAL RETURN
INCEPTION (01/31/2000- ENDED ENDED ENDED ENDED SINCE
FUND NAME DATE 3/31/2000) 12/31/1999 12/31/1999 12/31/1999 12/31/98 INCEPTION
<S> <C> <C> <C> <C> <C> <C> <C>
SIMT Large Cap Value
Fund* 10/31/1994 (2.81)% 4.93% 16.90% 21.53% N/A 20.11%**
SIMT Large Cap Growth
Fund 12/20/1994 9.19% 34.20% 35.90% 33.07% N/A 33.01%
SIMT Small Cap Value
Fund 12/20/1994 1.56% (6.99)% 6.88% 12.00% N/A 12.54%
SIMT Small Cap Growth
Fund 04/20/1992 16.67% 75.22% 26.10% 27.30% N/A 23.61%
SIIT International
Equity Fund 12/20/1989 0.49% 39.63% 17.80% 14.69% 8.59% 8.62%
SIIT Emerging Markets
Equity Fund 01/17/1995 2.92% 70.31% 1.75% N/A N/A 3.97%
SIMT Core Fixed
Income Fund 05/01/1987 2.94% (1.79)% 5.29% 7.76% 7.00% 7.33%
SIMT High Yield Bond
Fund 01/11/1995 (1.92)% 3.61% 6.37% N/A N/A 10.09%
SIIT Emerging Markets
Debt Fund 06/26/1997 7.55% 28.89% N/A N/A N/A 1.89%
SIIT International
Fixed Income Fund 09/01/1993 (2.06)% (6.69)% 2.17% 6.40% N/A 6.05%
</TABLE>
* Prior to October 31, 1994, the Large Cap Value Fund was advised by a
different investment adviser and performance for that period is not shown.
** Since synthetic inception.
<PAGE>
30 PROSPECTUS
PURCHASING AND SELLING FUND SHARES
Shares are offered on each day that the New York Stock Exchange ("NYSE") is open
for business (a "Business Day").
The Funds offer their Class A Shares only to insurance companies for separate
accounts they establish to fund variable life insurance and variable annuity
contracts. An insurance company purchases or redeems shares of the Funds based
on, among other things, the amount of net contract premiums or purchase payments
allocated to a separate account investment division, transfers to or from a
separate account investment division, contract loans and repayments, contract
withdrawals and surrenders, and benefit payments. The contract prospectus
describes how contract owners may allocate, transfer and withdraw amounts to,
and from, separate accounts.
The price per share will be the net asset value per share ("NAV") next
determined after the Funds receive the insurance companies' purchase orders. The
Funds calculate NAV once each Business Day at the regularly-scheduled close of
normal trading on the NYSE (normally, 4:00 p.m. Eastern time). To receive the
current Business Day's NAV, generally the Funds must receive an order before
4:00 p.m. Eastern time.
HOW THE FUNDS CALCULATE NAV
NAV for one Fund share is the value of that share's portion of the net assets of
the Fund.
In calculating NAV, the Funds generally value their portfolio securities at
their market price. If market prices are unavailable or the Funds think that
they are unreliable, fair value prices may be determined in good faith using
methods approved by the Board of Trustees. Some Funds hold portfolio securities
that are listed on foreign exchanges. These securities may trade on weekends or
other days when the Funds do not calculate NAV. As a result, the market value of
these Funds' investments may change on days when it is not possible to purchase
or sell Fund shares.
DISTRIBUTION OF FUND SHARES
SEI Investments Distribution Co. ("SIDCo.") is the distributor of the shares of
the Funds. SIDCo. receives no compensation for distributing the Funds' Class A
Shares.
DIVIDENDS AND DISTRIBUTIONS
The Funds distribute their investment income as dividends, and make
distributions of capital gains, if any, at least annually.
TAXES
PLEASE CONSULT YOUR TAX ADVISOR REGARDING YOUR SPECIFIC QUESTIONS ABOUT FEDERAL,
STATE AND LOCAL INCOME TAXES. Below is summarized some important tax issues that
affect the Funds and their shareholders. This summary is based on current tax
laws, which may change.
The Funds have been advised that they will not have to pay income taxes if they
distribute all of their income and gains. Net income and realized capital gains
that the Funds distribute are not currently taxable when left to accumulate
within a variable annuity or variable life insurance contract.
For information on federal income taxation of a life insurance company with
respect to its receipt of distributions from the Funds and federal income
taxation of owners of variable annuity or variable life insurance contracts,
refer to your contract prospectus.
MORE INFORMATION ABOUT TAXES IS IN THE FUNDS' SAI.
<PAGE>
SEI Insurance
Products Trust
INVESTMENT ADVISER
SEI Investments Management Corporation
One Freedom Valley Drive
Oaks, PA 19456
DISTRIBUTOR
SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, PA 19456
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP
More information about the Funds is available without charge through the
following:
STATEMENT OF ADDITIONAL INFORMATION ("SAI")
- ------------------------------------------------
The SAI dated April 5, 2000, includes more detailed information about SEI
Insurance Products Trust. The SAI is on file with the SEC and is incorporated by
reference into this prospectus. This means that the SAI, for legal purposes, is
a part of this prospectus.
ANNUAL AND SEMI-ANNUAL REPORTS
- ------------------------------------------------
These reports will typically list the Funds' holdings and contain information
from the Funds' managers about strategies and market conditions and trends and
their impact on performance. The reports will also contain detailed financial
information about the Funds.
TO OBTAIN AN SAI, ANNUAL OR SEMI-ANNUAL REPORT, OR MORE INFORMATION:
- ------------------------------------------------
BY TELEPHONE: Call 1-800-DIAL-SEI
BY MAIL: Write to the Funds at:
One Freedom Valley Drive
Oaks, PA 19456
BY INTERNET: http://www.seic.com
FROM THE SEC: You can obtain the SAI or the Annual and Semi-Annual Reports, as
well as other information about SEI Insurance Products Trust, from the EDGAR
Database on the SEC's website ("http://www.sec.gov"). You may review and copy
documents at the SEC Public Reference Room in Washington, D.C. (for information
on the operation of the Public Reference Room, call 202-942-8090). You may
request documents by mail from the SEC, upon payment of a duplicating fee, by
writing to: Securities and Exchange Commission, Public Reference Section,
Washington, DC 20549-0102. You may also obtain this information, upon payment of
a duplicating fee, by e-mailing the SEC at the following address:
[email protected].
The Trust's Investment Company Act registration number is 811-9183.
<PAGE>
SEI
INSURANCE
PRODUCTS
TRUST
-----------------------
PROSPECTUS
CLASS A SHARES
APRIL 30, 2000
EQUITY FUNDS
SEI VP LARGE CAP VALUE FUND
SEI VP LARGE CAP GROWTH FUND
SEI VP SMALL CAP VALUE FUND
SEI VP SMALL CAP GROWTH FUND
SEI VP INTERNATIONAL EQUITY FUND
SEI VP EMERGING MARKETS EQUITY FUND
FIXED INCOME FUNDS
SEI VP CORE FIXED INCOME FUND
SEI VP HIGH YIELD BOND FUND
SEI VP INTERNATIONAL FIXED INCOME FUND
SEI VP EMERGING MARKETS DEBT FUND
MONEY MARKET FUND
SEI VP PRIME OBLIGATION FUND
INVESTMENT ADVISER
SEI INVESTMENTS MANAGEMENT CORPORATION
SUB-ADVISERS
ACADIAN ASSET MANAGEMENT, INC.
ALLIANCE CAPITAL MANAGEMENT L.P.
ARTISAN PARTNERS LIMITED PARTNERSHIP
BLACKROCK FINANCIAL MANAGEMENT, INC.
BLACKROCK INTERNATIONAL, LTD.
CAPITAL GUARDIAN TRUST COMPANY
CORONATION ASSET MANAGEMENT (PROPRIETARY) LIMITED
CREDIT SUISSE ASSET MANAGEMENT, LIMITED
CREDIT SUISSE ASSET MANAGEMENT, LLC
LSV ASSET MANAGEMENT, L.P.
MAZAMA CAPITAL MANAGEMENT, LLC
MELLON EQUITY ASSOCIATES, LLP
MORGAN STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC.
NICHOLAS-APPLEGATE CAPITAL MANAGEMENT
NOMURA CORPORATE RESEARCH AND ASSET MANAGEMENT, INC.
OECHSLE INTERNATIONAL ADVISORS, LLC
PROVIDENT INVESTMENT COUNSEL, INC.
RS INVESTMENT MANAGEMENT, L.P.
ROBERT W. BAIRD & CO., INCORPORATED
SALOMON BROTHERS ASSET MANAGEMENT INC
SANFORD C. BERNSTEIN & CO., INC.
SAWGRASS ASSET MANAGEMENT, LLC
SCHRODER INVESTMENT MANAGEMENT NORTH AMERICA INC.
SECURITY CAPITAL GLOBAL CAPITAL MANAGEMENT GROUP INCORPORATED
SG PACIFIC ASSET MANAGEMENT, INC.
SGY ASSET MANAGEMENT (SINGAPORE) LIMITED
SG YAMAICHI ASSET MANAGEMENT CO., LTD.
STRATEGIC FIXED INCOME, L.L.C.
TCW INVESTMENT MANAGEMENT COMPANY
WALL STREET ASSOCIATES
WELLINGTON MANAGEMENT COMPANY, LLP
WESTERN ASSET MANAGEMENT COMPANY
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED ANY FUND SHARES OR
DETERMINED WHETHER THIS PROSPECTUS IS ACCURATE OR COMPLETE.
IT IS A CRIME FOR ANYONE TO TELL YOU OTHERWISE.
<PAGE>
SEI Insurance
Products Trust
ABOUT THIS PROSPECTUS
- ------------------------------------------------------------------------
SEI Insurance Products Trust is a mutual fund family that offers shares in
separate investment portfolios (Funds). The Funds have individual investment
goals and strategies and are designed exclusively as funding vehicles for
variable life insurance and variable annuity contracts. This prospectus gives
contract owners important information about the Class A Shares of the Funds that
they should know before investing. Please read this prospectus and keep it for
future reference. Variable life insurance and variable annuity account investors
should also review the separate account prospectus prepared by their insurance
company.
THIS PROSPECTUS HAS BEEN ARRANGED INTO DIFFERENT SECTIONS SO THAT YOU CAN EASILY
REVIEW THIS IMPORTANT INFORMATION. ON THE NEXT PAGE, THERE IS SOME GENERAL
INFORMATION YOU SHOULD KNOW ABOUT RISK AND RETURN THAT IS COMMON TO EACH OF THE
FUNDS. FOR MORE DETAILED INFORMATION ABOUT THE FUNDS PLEASE SEE:
SEI VP LARGE CAP VALUE FUND..........................................2
SEI VP LARGE CAP GROWTH FUND.........................................4
SEI VP SMALL CAP VALUE FUND..........................................6
SEI VP SMALL CAP GROWTH FUND.........................................8
SEI VP INTERNATIONAL EQUITY FUND....................................10
SEI VP EMERGING MARKETS EQUITY FUND.................................12
SEI VP CORE FIXED INCOME FUND.......................................14
SEI VP HIGH YIELD BOND FUND.........................................16
SEI VP INTERNATIONAL FIXED INCOME FUND..............................18
SEI VP EMERGING MARKETS DEBT FUND...................................20
SEI VP PRIME OBLIGATION FUND........................................22
MORE INFORMATION ABOUT FUND INVESTMENTS.............................24
THE ADVISER AND SUB-ADVISERS........................................25
PRIOR PERFORMANCE INFORMATION.......................................30
PURCHASING AND SELLING FUND SHARES..................................32
DIVIDENDS AND DISTRIBUTIONS.........................................33
TAXES...............................................................33
HOW TO OBTAIN MORE INFORMATION ABOUT SEI INSURANCE PRODUCTS
TRUST.......................................................Back Cover
- --------------------------------------------------------------------------------
THE FUNDS AND GLOBAL ASSET ALLOCATION
Each Fund has its own distinct risk and reward characteristics, investment
objectives, policies and strategies. SEI Investments Management Corporation
("SIMC") constructs and maintains global asset allocation strategies, and the
Funds are designed in part to implement those strategies. The degree to which an
investor's portfolio is invested in the particular market segments and/or asset
classes represented by these Funds varies, as does the investment risk/return
potential represented by each Fund. Some Funds, especially the SEI VP High Yield
Bond, SEI VP Emerging Markets Equity and SEI VP Emerging Markets Debt Funds, may
have extremely volatile returns. Because of the historical lack of correlation
among various asset classes, an investment in a mix of Funds representing a
range of asset classes as part of an asset allocation strategy may reduce the
strategy's overall level of volatility. As a result, a global asset allocation
strategy may reduce risk.
In managing the Funds, SIMC focuses on four key principles: asset allocation,
portfolio structure, the use of specialist managers, and continuous portfolio
management. Asset allocation across appropriate asset classes (represented by
the Funds) is the central theme of SIMC's investment philosophy. SIMC seeks to
reduce risk further by creating a portfolio that is diversified within each
asset class. SIMC then oversees a network of specialist managers who invest the
assets of these Funds in distinct segments of the market or class represented by
each Fund. These specialist managers adhere to distinct investment disciplines,
with the goal of providing greater consistency and predictability of results, as
well as broader diversification across and within asset classes. Finally, SIMC
regularly rebalances to ensure that the appropriate mix of assets is constantly
in place, and constantly monitors and evaluates specialist managers for these
Funds to ensure that they do not deviate from their stated investment philosophy
or process.
<PAGE>
PROSPECTUS 1
RISK/RETURN INFORMATION COMMON TO THE FUNDS
Each Fund is a mutual fund that is available solely as a funding vehicle for
variable annuity and variable life insurance contracts sold by various insurance
companies. A mutual fund pools investors' money and, using professional
investment managers, invests it in securities.
Each Fund has its own investment goal and strategies for reaching that goal.
Each Fund's assets are managed under the direction of SIMC, and one or more
Sub-Advisers who manage portions of the Funds' assets in a way that they believe
will help the Funds achieve their goals. SIMC acts as "manager of managers" for
the Funds, and attempts to ensure that the Sub-Adviser(s) comply with the Funds'
investment policies and guidelines. SIMC also recommends the appointment of
additional or replacement Sub-Advisers to the Funds' Board. Still, investing in
the Funds involves risks, and there is no guarantee that a Fund will achieve its
goal. SIMC and the Sub-Advisers make judgments about the securities markets, the
economy, and companies, but these judgments may not anticipate actual market
movements or the impact of economic conditions on company performance. In fact,
no matter how good a job the Advisers do, you could lose money on your
investment in a Fund, just as you could with other investments. A Fund share is
not a bank deposit, and it is not insured or guaranteed by the FDIC or any
government agency.
The value of your investment in a Fund (other than the SEI VP Prime Obligation
Fund) is based on the market prices of the securities the Fund holds. These
prices change daily due to economic and other events that affect securities
markets generally, as well as those that affect particular companies or
governments. These price movements, sometimes called volatility, will vary
depending on the types of securities the Fund owns and the markets in which they
trade. The estimated level of volatility for each Fund is set forth in the Fund
Summaries that follow. The effect on a Fund's share price of a change in the
value of a single security holding will depend on how widely the Fund
diversifies its holdings.
THE INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS MAY BE SIMILAR TO THOSE OF
OTHER RETAIL MUTUAL FUNDS WHICH CAN BE PURCHASED OUTSIDE OF A VARIABLE INSURANCE
PRODUCT, AND THAT ARE MANAGED BY THE SAME INVESTMENT ADVISER OR SUB-ADVISERS.
THE INVESTMENT RESULTS OF THE FUNDS, HOWEVER, MAY BE HIGHER OR LOWER THAN THE
RESULTS OF SUCH OTHER RETAIL MUTUAL FUNDS. THERE CAN BE NO ASSURANCE, AND NO
REPRESENTATION IS MADE, THAT THE INVESTMENT RESULTS OF ANY OF THE FUNDS WILL BE
COMPARABLE TO THE INVESTMENT RESULTS OF ANY OTHER RETAIL MUTUAL FUND, EVEN IF
THE OTHER RETAIL MUTUAL FUND HAS THE SAME INVESTMENT ADVISER OR SUB-ADVISERS.
<PAGE>
2 PROSPECTUS
SEI VP LARGE CAP VALUE FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Long-term growth of capital and income
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY Medium to high
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing multiple specialist sub-advisers that manage in a
value style, the Fund invests in large cap income-producing
U.S. common stocks
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP Large Cap Value Fund invests primarily in common stocks of U.S.
companies with market capitalizations of more than $1 billion. The Fund uses a
multi-manager approach, relying on a number of Sub-Advisers with differing
investment philosophies to manage portions of the Fund's portfolio under the
general supervision of SIMC. Each Sub-Adviser, in managing its portion of the
Fund's assets, selects stocks it believes are undervalued in light of such
fundamental characteristics as earnings, book value or return on equity. The
Fund's portfolio is diversified as to issuers and industries.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's securities may
fluctuate drastically from day to day. Individual companies may report poor
results or be negatively affected by industry and/or economic trends and
developments. The prices of securities issued by such companies may suffer a
decline in response. These factors contribute to price volatility, which is the
principal risk of investing in the Fund.
The Fund is also subject to the risk that large capitalization value stocks may
underperform other segments of the equity market or the equity markets as a
whole.
<PAGE>
PROSPECTUS 3
SEI VP LARGE CAP VALUE FUND
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP Large Cap Value Fund had not commenced
operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Investment Advisory Fees 0.35%
Distribution (12b-1) Fees None
Other Expenses 0.82%*
-------
Total Annual Fund Operating Expenses 1.17%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP LARGE CAP VALUE FUND -- CLASS A SHARES 0.85%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP Large Cap Value Fund -- Class A Shares $119 $372
</TABLE>
<PAGE>
4 PROSPECTUS
SEI VP LARGE CAP GROWTH FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Capital appreciation
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY Medium to high
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing multiple specialist sub-advisers that manage in a
growth style, the Fund invests in large cap U.S. common
stocks
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP Large Cap Growth Fund invests primarily in common stocks of U.S.
companies with market capitalizations of more than $1 billion. The Fund uses a
multi-manager approach, relying on a number of Sub-Advisers with differing
investment philosophies to manage portions of the Fund's portfolio under the
general supervision of SIMC. Each Sub-Adviser, in managing its portion of the
Fund's assets, selects stocks it believes have significant growth potential in
light of such characteristics as revenue and earnings growth and positive
earnings surprises. The Fund's portfolio is diversified as to issuers and
industries.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's securities may
fluctuate drastically from day to day. Individual companies may report poor
results or be negatively affected by industry and/or economic trends and
developments. The prices of securities issued by such companies may suffer a
decline in response. These factors contribute to price volatility, which is the
principal risk of investing in the Fund.
The Fund is subject to the risk that large capitalization growth stocks may
underperform other segments of the equity market or the equity markets as a
whole.
<PAGE>
PROSPECTUS 5
SEI VP LARGE CAP GROWTH FUND
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP Large Cap Growth Fund had not commenced
operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Investment Advisory Fees 0.40%
Distribution (12b-1) Fees None
Other Expenses 0.82%*
-------
Total Annual Fund Operating Expenses 1.22%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP LARGE CAP GROWTH FUND -- CLASS A SHARES 0.85%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP Large Cap Growth Fund -- Class A Shares $124 $387
</TABLE>
<PAGE>
6 PROSPECTUS
SEI VP SMALL CAP VALUE FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Capital appreciation
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY High
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing multiple specialist sub-advisers that manage in a
value style, the Fund invests in common stocks of smaller
U.S. companies
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP Small Cap Value Fund invests primarily in common stocks of U.S.
companies with market capitalizations of less than $2 billion. The Fund uses a
multi-manager approach, relying upon a number of Sub-Advisers to manage portions
of the Fund's portfolio under the general supervision of SIMC. Each Sub-Adviser,
in managing its portion of the Fund's assets, selects stocks it believes are
undervalued in light of such fundamental characteristics as earnings, book value
or return on equity. The Fund's portfolio is diversified as to issuers and
industries.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's securities may
fluctuate drastically from day to day. Individual companies may report poor
results or be negatively affected by industry and/or economic trends and
developments. The prices of securities issued by such companies may suffer a
decline in response. These factors contribute to price volatility, which is the
principal risk of investing in the Fund.
The smaller capitalization companies the Fund invests in may be more vulnerable
to adverse business or economic events than larger, more established companies.
In particular, these small companies may have limited product lines, markets and
financial resources, and may depend upon a relatively small management group.
Therefore, small cap stocks may be more volatile than those of larger companies.
These securities may be traded over the counter or listed on an exchange.
The Fund is also subject to the risk that small capitalization value stocks may
underperform other segments of the equity market or the equity markets as a
whole.
<PAGE>
PROSPECTUS 7
SEI VP SMALL CAP VALUE FUND
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP Small Cap Value Fund had not commenced
operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Investment Advisory Fees 0.65%
Distribution (12b-1) Fees None
Other Expenses 0.82%*
-------
Total Annual Fund Operating Expenses 1.47%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP SMALL CAP VALUE FUND -- CLASS A SHARES 1.10%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP Small Cap Value Fund -- Class A Shares $150 $465
</TABLE>
<PAGE>
8 PROSPECTUS
SEI VP SMALL CAP GROWTH FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Long-term capital appreciation
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY High
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing multiple specialist sub-advisers that manage in a
growth style, the Fund invests in common stocks of smaller
U.S. companies
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP Small Cap Growth Fund invests primarily in common stocks of U.S.
companies with market capitalizations of less than $2 billion. The Fund uses a
multi-manager approach, relying upon a number of Sub-Advisers to manage portions
of the Fund's portfolio under the general supervision of SIMC. Each Sub-Adviser,
in managing its portion of the Fund's assets, selects stocks it believes have
significant growth potential in light of such characteristics as revenue and
earnings growth and positive earnings surprises. The Fund's portfolio is
diversified as to issuers and industries.
Due to its investment strategy, the Fund may buy and sell securities frequently.
This may result in higher transaction costs and additional capital gains tax
liabilities.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's securities may
fluctuate drastically from day to day. Individual companies may report poor
results or be negatively affected by industry and/or economic trends and
developments. The prices of securities issued by such companies may suffer a
decline in response. These factors contribute to price volatility, which is the
principal risk of investing in the Fund.
The smaller capitalization companies the Fund invests in may be more vulnerable
to adverse business or economic events than larger, more established companies.
In particular, these small companies may have limited product lines, markets and
financial resources, and may depend upon a relatively small management group.
Therefore, small cap stocks may be more volatile than those of larger companies.
These securities may be traded over the counter or listed on an exchange.
The Fund is also subject to the risk that small capitalization growth stocks may
underperform other segments of the equity market or the equity markets as a
whole.
<PAGE>
PROSPECTUS 9
SEI VP SMALL CAP GROWTH FUND
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP Small Cap Growth Fund had not commenced
operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Investment Advisory Fees 0.65%
Distribution (12b-1) Fees None
Other Expenses 0.82%*
-------
Total Annual Fund Operating Expenses 1.47%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP SMALL CAP GROWTH FUND -- CLASS A SHARES 1.10%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP Small Cap Growth Fund -- Class A Shares $150 $465
</TABLE>
<PAGE>
10 PROSPECTUS
SEI VP INTERNATIONAL EQUITY FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Capital appreciation
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY Medium to high
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing multiple specialist sub-advisers, the Fund invests
in equity securities of foreign companies
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP International Equity Fund invests primarily in common stocks and
other equity securities of foreign companies. The Fund primarily invests in
companies located in developed countries, but may also invest in companies
located in emerging markets. The Fund uses a multi-manager approach, relying
upon a number of Sub-Advisers to manage portions of the Fund's portfolio under
the general supervision of SIMC. The Fund is diversified as to issuers, market
capitalization, industry and country.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's securities may
fluctuate drastically from day to day. Individual companies may report poor
results or be negatively affected by industry and/or economic trends and
developments. The prices of securities issued by such companies may suffer a
decline in response. In the case of foreign stocks, these fluctuations will
reflect international economic and political events, as well as changes in
currency valuations relative to the U.S. dollar. These factors contribute to
price volatility, which is the principal risk of investing in the Fund.
Investing in issuers located in foreign countries poses distinct risks since
political and economic events unique to a country or region will affect those
markets and their issuers. These events will not necessarily affect the U.S.
economy or similar issuers located in the United States. In addition,
investments in foreign countries are generally denominated in a foreign
currency. As a result, changes in the value of those currencies compared to the
U.S. dollar may affect (positively or negatively) the value of a Fund's
investments. These currency movements may happen separately from and in response
to events that do not otherwise affect the value of the security in the issuer's
home country. These various risks will be even greater for investments in
emerging market countries since political turmoil and rapid changes in economic
conditions are more likely to occur in these countries.
The Fund is also subject to the risk that developed international equity
securities may underperform other segments of the equity market or the equity
markets as a whole.
<PAGE>
PROSPECTUS 11
SEI VP INTERNATIONAL EQUITY FUND
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP International Equity Fund had not commenced
operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Investment Advisory Fees 0.51%
Distribution (12b-1) Fees None
Other Expenses 1.06%*
-------
Total Annual Fund Operating Expenses 1.57%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP INTERNATIONAL EQUITY FUND -- CLASS A SHARES 1.28%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP International Equity Fund -- Class A
Shares $160 $496
</TABLE>
<PAGE>
12 PROSPECTUS
SEI VP EMERGING MARKETS EQUITY FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Capital appreciation
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY Very high
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing multiple specialist sub-advisers, the Fund invests
in equity securities of emerging markets companies
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP Emerging Markets Equity Fund invests primarily in common stocks and
other equity securities of foreign companies located in emerging market
countries. Emerging market countries are countries that the World Bank or the
United Nations considers to be emerging or developing. The Fund uses a
multi-manager approach, relying upon a number of Sub-Advisers to manage portions
of the Fund's portfolio under the general supervision of SIMC. The Fund's
portfolio is diversified as to issuers, market capitalization, industry and
country.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's securities may
fluctuate drastically from day to day. Individual companies may report poor
results or be negatively affected by industry and/or economic trends and
developments. The prices of securities issued by such companies may suffer a
decline in response. In the case of foreign stocks, these fluctuations will
reflect international economic and political events, as well as changes in
currency valuations relative to the U.S. dollar. These factors contribute to
price volatility, which is one principal risk of investing in the Fund.
Investing in issuers located in foreign countries poses distinct risks since
political and economic events unique to a country or region will affect those
markets and their issuers. These events will not necessarily affect the U.S.
economy or similar issuers located in the United States. In addition,
investments in foreign countries are generally denominated in a foreign
currency. As a result, changes in the value of those currencies compared to the
U.S. dollar may affect (positively or negatively) the value of a Fund's
investments. These currency movements may happen separately from and in response
to events that do not otherwise affect the value of the security in the issuer's
home country. These various risks will be even greater for investments in
emerging market countries.
Emerging market countries are countries that the World Bank or the United
Nations considers to be emerging or developing. Emerging markets may be more
likely to experience political turmoil or rapid changes in market or economic
conditions than more developed countries. In addition, the financial stability
of issuers (including governments) in emerging market countries may be more
precarious than in other countries. As a result, there will tend to be an
increased risk of price volatility associated with the Fund's investment in
emerging market countries, which may be magnified by currency fluctuation
relative to the U.S. dollar.
Emerging markets may be more likely to experience political turmoil or rapid
changes in market or economic conditions than more developed countries. In
addition, the financial stability of issuers (including governments) in emerging
market countries may be more precarious than in other countries. As a result,
there will tend to be an increased risk of price volatility associated with the
Fund's investments in emerging market countries, which may be magnified by
currency fluctuations relative to the U.S. dollar.
The Fund is also subject to the risk that emerging market equity securities may
underperform other segments of the equity market or the equity markets as a
whole.
<PAGE>
PROSPECTUS 13
SEI VP EMERGING MARKETS EQUITY FUND
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP Emerging Markets Equity Fund had not
commenced operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Investment Advisory Fees 1.05%
Distribution (12b-1) Fees None
Other Expenses 1.33%*
-------
Total Annual Fund Operating Expenses 2.38%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP EMERGING MARKETS EQUITY FUND -- CLASS A SHARES 1.95%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP Emerging Markets Equity Fund -- Class A Shares $241 $742
</TABLE>
<PAGE>
14 PROSPECTUS
SEI VP CORE FIXED INCOME FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Current income and preservation of capital
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY Medium
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing multiple specialist sub-advisers that have fixed
income investment expertise, the Fund invests in investment
grade U.S. fixed income securities
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP Core Fixed Income Fund invests primarily in investment grade U.S.
corporate and government fixed income securities, including mortgage-backed
securities. The Fund uses a multi-manager approach, relying upon a number of
Sub-Advisers to manage portions of the Fund's portfolio under the general
supervision of SIMC. Sub-Advisers are selected for their expertise in managing
various kinds of fixed income securities, and each Sub-Adviser makes investment
decisions based on an analysis of yield trends, credit ratings and other factors
in accordance with its particular discipline. While each Sub-Adviser chooses
securities of different types and maturities, the Fund in the aggregate
generally will have a dollar-weighted average duration that is consistent with
that of the broad U.S. fixed income market (currently 4.9 years).
Due to its investment strategy, the Fund may buy and sell securities frequently.
This may result in higher transaction costs and additional capital gains tax
liabilities.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
The prices of the Fund's fixed income securities respond to economic
developments, particularly interest rate changes, as well as to perceptions
about the creditworthiness of individual issuers, including governments.
Generally, the Fund's fixed income securities will decrease in value if interest
rates rise and vice versa, and the volatility of lower rated securities is even
greater than that of higher rated securities. Also, longer-term securities are
generally more volatile, so the average maturity or duration of these securities
affects risk.
Although the Fund's U.S. government securities are considered to be among the
safest investments, they are not guaranteed against price movements due to
changing interest rates. Obligations issued by some U.S. government agencies are
backed by the U.S. Treasury, while others are backed solely by the ability of
the agency to borrow from the U.S. Treasury or by the agency's own resources.
Mortgage-backed securities are fixed income securities representing an interest
in a pool of underlying mortgage loans. Mortgage-backed securities are sensitive
to changes in interest rates, but may respond to these changes differently from
other fixed income securities due to the possibility of prepayment of the
underlying mortgage loans. As a result, it may not be possible to determine in
advance the actual maturity date or average life of a mortgage-backed security.
Rising interest rates tend to discourage refinancings, with the result that the
average life and volatility of the security will increase, exacerbating its
decrease in market price. When interest rates fall, however, mortgage-backed
securities may not gain as much in market value because of the expectation of
additional mortgage prepayments, that must be reinvested at lower interest
rates. Prepayment risk may make it difficult to calculate the average maturity
of the Fund's mortgage-backed securities and, therefore, to assess the
volatility risk of the Fund.
The privately issued mortgage-backed securities that the Fund invests in are not
issued or guaranteed by the U.S. Government or its agencies or instrumentalities
and may bear a greater risk of nonpayment than securities that are backed by the
U.S. Treasury. However, the timely payment of principal and interest normally is
supported, at least partially, by various credit enhancements by banks and other
financial institutions. There can be no assurance, however, that such credit
enhancements will support full payment of the principal and interest on such
obligations. In addition, changes in the credit quality of the entity which
provides credit enhancement could cause losses to the Fund and affect its share
price.
The Fund is also subject to the risk that U.S. fixed income securities may
underperform other segments of the fixed income market or the fixed income
markets as a whole.
<PAGE>
PROSPECTUS 15
SEI VP CORE FIXED INCOME FUND
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP Core Fixed Income Fund had not commenced
operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Investment Advisory Fees 0.28%
Distribution (12b-1) Fees None
Other Expenses 0.75%*
-------
Total Annual Fund Operating Expenses 1.03%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP CORE FIXED INCOME FUND -- CLASS A SHARES 0.60%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP Core Fixed Income Fund -- Class A Shares $105 $328
</TABLE>
<PAGE>
16 PROSPECTUS
SEI VP HIGH YIELD BOND FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Total return
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY High
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing multiple specialist sub-advisers that have high
yield investment expertise, the Fund invests in high yield,
high risk securities
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP High Yield Bond Fund invests primarily in fixed income securities
rated below investment grade ("junk bonds"), including corporate bonds and
debentures, convertible and preferred securities, and zero coupon obligations.
The Fund uses a multi-manager approach, relying on a number of Sub-Advisers to
manage portions of the Fund's portfolio under the general supervision of SIMC.
In managing the Fund's assets, the Sub-Advisers select securities that offer a
high current yield as well as total return potential. The Fund's securities are
diversified as to issuers and industries. The Fund's average weighted maturity
may vary, and will generally not exceed ten years. There is no limit on the
maturity or on the credit quality of any security.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
The prices of the Fund's fixed income securities respond to economic
developments, particularly interest rate changes, as well as to perceptions
about the creditworthiness of individual issuers, including governments.
Generally, the Fund's fixed income securities will decrease in value if interest
rates rise and vice versa, and the volatility of lower rated securities is even
greater than that of higher rated securities. Also, longer-term securities are
generally more volatile, so the average maturity or duration of these securities
affects risk.
Junk bonds involve greater risks of default or downgrade and are more volatile
than investment grade securities. Junk bonds involve a greater risk of price
declines than investment grade securities due to actual or perceived changes in
an issuer's creditworthiness. In addition, issuers of junk bonds may be more
susceptible than other issuers to economic downturns. Junk bonds are subject to
the risk that the issuer may not be able to pay interest or dividends and
ultimately to repay principal upon maturity. Discontinuation of these payments
could substantially adversely affect the market value of the security.
The Fund is also subject to the risk that high yield securities may underperform
other segments of the fixed income market or the fixed income markets as a
whole.
<PAGE>
PROSPECTUS 17
SEI VP HIGH YIELD BOND FUND
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP High Yield Bond Fund had not commenced
operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Investment Advisory Fees 0.49%
Distribution (12b-1) Fees None
Other Expenses 0.82%*
-------
Total Annual Fund Operating Expenses 1.31%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP HIGH YIELD BOND FUND -- CLASS A SHARES 0.85%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP High Yield Bond Fund -- Class A Shares $133 $415
</TABLE>
<PAGE>
18 PROSPECTUS
SEI VP INTERNATIONAL FIXED INCOME FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Capital appreciation and current income
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY High
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing a specialist sub-adviser, the Fund invests in
investment grade fixed income securities of foreign
government and corporate issuers
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP International Fixed Income Fund invests primarily in foreign
government, corporate, and mortgage-backed securities. In selecting investments
for the Fund, the Sub-Adviser chooses investment grade securities issued by
corporations and governments located in various developed foreign countries,
looking for opportunities for capital appreciation and gain, as well as current
income. The Fund's portfolio is not hedged against currency fluctuations
relative to the U.S. dollar. There are no restrictions on the Fund's average
portfolio maturity or on the maturity of any specific security.
Due to its investment strategy, the Fund may buy and sell securities frequently.
This may result in higher transaction costs and additional capital gains tax
liabilities.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
The prices of the Fund's fixed income securities respond to economic
developments, particularly interest rate changes, as well as to perceptions
about the creditworthiness of individual issuers, including governments.
Generally, the Fund's fixed income securities will decrease in value if interest
rates rise and vice versa, and the volatility of lower rated securities is even
greater than that of higher rated securities. Also, longer-term securities are
generally more volatile, so the average maturity or duration of these securities
affects risk. In the case of foreign securities, price fluctuations will reflect
international economic and political events, as well as changes in currency
valuations relative to the U.S. dollar.
Investing in issuers located in foreign countries poses distinct risks since
political and economic events unique to a country or region will affect those
markets and their issuers. These events will not necessarily affect the U.S.
economy or similar issuers located in the United States. In addition,
investments in foreign countries are generally denominated in a foreign
currency. As a result, changes in the value of those currencies compared to the
U.S. dollar may affect (positively or negatively) the value of a Fund's
investments. These currency movements may happen separately from and in response
to events that do not otherwise affect the value of the security in the issuer's
home country. These various risks will be even greater for investments in
emerging market countries since political turmoil and rapid changes in economic
conditions are more likely to occur in these countries.
The Fund is non-diversified, which means that it may invest in the securities of
relatively few issuers. As a result, the Fund may be more susceptible to a
single adverse economic or political occurrence affecting one or more of these
issuers, and may experience increased volatility due to its investments in those
securities.
The Fund is also subject to the risk that developed international fixed income
securities, may underperform other segments of the fixed income market or the
fixed income markets as a whole.
<PAGE>
PROSPECTUS 19
SEI VP INTERNATIONAL FIXED INCOME FUND
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP International Fixed Income Fund had not
commenced operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Investment Advisory Fees 0.30%
Distribution (12b-1) Fees None
Other Expenses 1.41%*
-------
Total Annual Fund Operating Expenses 1.71%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP INTERNATIONAL FIXED INCOME FUND -- CLASS A SHARES 1.00%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP International Fixed Income Fund -- Class A
Shares $174 $539
</TABLE>
<PAGE>
20 PROSPECTUS
SEI VP EMERGING MARKETS DEBT FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Total return
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY High to very high
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY Utilizing a specialist sub-adviser, the Fund invests U.S.
dollar denominated debt in securities of emerging market
issuers
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP Emerging Markets Debt Fund invests primarily in U.S. dollar
denominated debt securities of government, government-related and corporate
issuers in emerging markets countries, as well as entities organized to
restructure the outstanding debt of such issuers. Emerging market countries are
countries that the World Bank or the United Nations considers to be emerging or
developing. Emerging markets may be more likely to experience political turmoil
or rapid changes in market or economic conditions than more developed countries.
In addition, the financial stability of issuers (including governments) in
emerging market countries may be more precarious than in other countries. As a
result, there will tend to be an increased risk of price volatility associated
with the Fund's investments in emerging market countries, which may be magnified
by currency fluctuations relative to the U.S. dollar.
The Sub-Adviser will spread the Fund's holdings across a number of countries and
industries to limit its exposure to a single emerging market economy. There are
no restrictions on the Fund's average portfolio maturity, or on the maturity of
any specific security. There is no minimum rating standard for the Fund's
securities, and the Fund's securities will generally be in the lower or lowest
rating categories.
Due to its investment strategy, the Fund may buy and sell securities frequently.
This may result in higher transaction costs and additional capital gains tax
liabilities.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
The prices of the Fund's fixed income securities respond to economic
developments, particularly interest rate changes, as well as to perceptions
about the creditworthiness of individual issuers, including governments.
Generally, the Fund's fixed income securities will decrease in value if interest
rates rise and vice versa, and the volatility of lower rated securities is even
greater than that of higher rated securities. Also, longer-term securities are
generally more volatile, so the average maturity or duration of these securities
affects risk.
Investing in issuers located in foreign countries poses distinct risks since
political and economic events unique to a country or region will affect those
markets and their issuers. These events will not necessarily affect the U.S.
economy or similar issuers located in the United States. In addition,
investments in foreign countries may be denominated in a foreign currency. As a
result, changes in the value of those currencies compared to the U.S. dollar may
affect (positively or negatively) the value of a Fund's investments. These
currency movements may happen separately from and in response to events that do
not otherwise affect the value of the security in the issuer's home country.
These various risks will be even greater for investments in emerging market
countries since political turmoil and rapid changes in economic conditions are
more likely to occur in these countries.
"Junk" bonds involve greater risks of default or downgrade, and involve greater
risk of price declines than investment grade securities due to actual or
perceived changes in an issuer's creditworthiness. In addition, issuers of junk
bonds may be more susceptible than other issuers to economic downturns. Junk
bonds are subject to the risk that the issuer may not be able to pay interest or
dividends and ultimately to repay principal upon maturity. Discontinuation of
these payments could substantially adversely affect the market value of the
security. The volatility of junk bonds and certain foreign sovereign debt
securities is even greater since the prospects for repayment of principal and
interest of many of these securities is speculative. Some may even be in
default. As an incentive to invest in these risky securities, they tend to offer
higher returns.
Emerging market countries are countries that the World Bank or the United
Nations considers to be emerging or developing. Emerging markets may be more
likely to experience political turmoil or rapid changes in market or economic
conditions than more developed countries. In addition, the financial stability
of issuers (including governments) in emerging market countries
<PAGE>
PROSPECTUS 21
SEI VP EMERGING MARKETS DEBT FUND
may be more precarious than in other countries. As a result, there will tend to
be an increased risk of price volatility associated with the Fund's investment
in emerging market countries.
The foreign sovereign debt securities and "Brady Bonds" the Fund purchases
involve specific risks, including the risk that: (i) the governmental entity
that controls the repayment of sovereign debt may not be willing or able to
repay the principal and/or interest when it becomes due, due to factors such as
debt service burden, political constraints, cash flow problems and other
national economic factors; (ii) governments may default on their sovereign debt,
which may require holders of such sovereign debt to participate in debt
rescheduling or additional lending to defaulting governments; and (iii) there
may be no bankruptcy proceeding by which defaulted sovereign debt may be
collected in whole or in part.
The Fund is non-diversified, which means that it may invest in the securities of
relatively few issuers. As a result, the Fund may be more susceptible to a
single adverse economic or political occurrence affecting one or more of these
issuers, and may experience increased volatility due to its investments in those
securities.
The Fund is also subject to the risk that emerging markets debt securities may
underperform other segments of the fixed income market or the fixed income
markets as a whole.
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP Emerging Markets Debt Fund had not commenced
operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Investment Advisory Fees 0.85%
Distribution (12b-1) Fees None
Other Expenses 1.44%*
-------
Total Annual Fund Operating Expenses 2.29%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP EMERGING MARKETS DEBT FUND -- CLASS A SHARES 1.35%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP Emerging Markets Debt Fund -- Class A Shares $232 $715
</TABLE>
<PAGE>
22 PROSPECTUS
SEI VP PRIME OBLIGATION FUND
FUND SUMMARY
<TABLE>
<S> <C>
INVESTMENT GOAL Preserving principal and maintaining liquidity while
providing current income
- -----------------------------------------------------------------------------------------------
SHARE PRICE VOLATILITY Very low
- -----------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGY The Fund is professionally managed to provide liquidity,
diversification and a competitive yield by investing in high
quality, short-term money market instruments
</TABLE>
- ------------------------------------------------------------------------
INVESTMENT STRATEGY
The SEI VP Prime Obligation Fund is comprised of short-term debt obligations of
U.S. issuers that are rated in one of the two highest rating categories by
nationally recognized statistical rating organizations or securities that the
Sub-Adviser determines are of comparable quality. The Fund invests in: (i)
commercial paper and other short-term corporate obligations (including
asset-backed securities) rated in the highest rating category; (ii) certificates
of deposit, time deposits, bankers' acceptances, bank notes and other
obligations of U.S. commercial banks or savings and loan institutions that meet
certain asset requirements; (iii) short-term obligations issued by state and
local governments; and (iv) U.S. Treasury obligations and obligations issued or
guaranteed as to principal and interest by agencies or instrumentalities of the
U.S. government. The Fund may also enter into fully-collateralized repurchase
agreements.
Using a top-down strategy and bottom-up security selection, the Sub-Adviser
seeks securities with an acceptable maturity, that are marketable and liquid,
offer competitive yields, and are issued by issuers that are on a sound
financial footing. The Sub-Adviser also considers factors such as the
anticipated level of interest rates and the maturity of individual securities
relative to the maturity of the Fund as a whole. The Fund follows strict
Investment Company Act rules about the credit quality, maturity and
diversification of its investments.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
An investment in the Fund is subject to income risk, which is the possibility
that the Fund's yield will decline due to falling interest rates.
Although the Fund's U.S. government securities are considered to be among the
safest investments, they are not guaranteed against price movements due to
changing interest rates. Obligations issued by some U.S. government agencies are
backed by the U.S. Treasury, while others are backed solely by the ability of
the agency to borrow from the U.S. Treasury or by the agency's own resources.
AN INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT. ALTHOUGH THE FUND SEEKS TO
MAINTAIN A CONSTANT PRICE PER SHARE OF $1.00, YOU MAY LOSE MONEY BY INVESTING IN
THE FUND.
<PAGE>
PROSPECTUS 23
SEI VP PRIME OBLIGATION FUND
PERFORMANCE INFORMATION
As of December 31, 1999, the SEI VP Prime Obligation Fund had not commenced
operations, and did not have a performance history.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------
FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Fund shares.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS) CLASS A SHARES
<S> <C>
Investment Advisory Fees 0.08%
Distribution (12b-1) Fees None
Other Expenses 0.86%*
-------
Total Annual Fund Operating Expenses 0.94%**
</TABLE>
* OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
** THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE CURRENT FISCAL
YEAR ARE EXPECTED TO BE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER AND
ADMINISTRATOR WILL EACH VOLUNTARILY WAIVE A PORTION OF ITS FEE IN ORDER TO KEEP
TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER AND/OR ADMINISTRATOR
MAY DISCONTINUE ALL OR PART OF THEIR WAIVERS AT ANY TIME. WITH THESE FEE
WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE EXPECTED TO BE AS
FOLLOWS:
<TABLE>
<S> <C>
SEI VP PRIME OBLIGATION FUND -- CLASS A SHARES 0.44%
</TABLE>
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISERS"
AND "DISTRIBUTION OF FUND SHARES."
The amount set forth above does not reflect the fees and expenses of the
insurance contract that are charged by your insurance company.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with 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 that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same, and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
SEI VP Prime Obligation Fund -- Class A Shares $96 $300
</TABLE>
<PAGE>
24 PROSPECTUS
MORE INFORMATION ABOUT FUND INVESTMENTS
This prospectus describes the Funds' primary strategies, and the Funds will
normally invest at least 65% of their assets in the types of securities
described in this prospectus. However, each Fund also may invest in other
securities, use other strategies and engage in other investment practices. These
investments and strategies, as well as those described in this prospectus, are
described in detail in the Funds' Statement of Additional Information ("SAI").
The investments and strategies described throughout this prospectus are those
that the Sub-Advisers use under normal conditions. During unusual economic or
market conditions or for temporary defensive or liquidity purposes, each Fund
may invest up to 100% of its assets in cash, money market instruments,
repurchase agreements and short-term obligations that would not ordinarily be
consistent with the Funds' objectives. A Fund will do so only if the Adviser or
Sub-Advisers believe that the risk of loss outweighs the opportunity for capital
gains and higher income. Of course, there is no guarantee that any Fund will
achieve its investment goal.
INVESTMENT ADVISER AND SUB-ADVISERS
SEI INVESTMENTS MANAGEMENT CORPORATION ("SIMC") ACTS AS THE MANAGER OF MANAGERS
OF THE FUNDS, AND IS RESPONSIBLE FOR THE INVESTMENT PERFORMANCE OF THE FUNDS
SINCE IT ALLOCATES EACH FUND'S ASSETS TO ONE OR MORE SUB-ADVISERS AND RECOMMENDS
HIRING OR CHANGING SUB-ADVISERS TO THE BOARD OF TRUSTEES.
Each Sub-Adviser makes investment decisions for the assets it manages and
continuously reviews, supervises and administers its investment program. SIMC
oversees the Sub-Advisers to ensure compliance with the Funds' investment
policies and guidelines, and monitors each Sub-Adviser's adherence to its
investment style. The Board of Trustees supervises SIMC and the Sub-Advisers;
establishes policies that they must follow in their management activities; and
oversees the hiring and termination of Sub-Advisers recommended by SIMC. SIMC
pays the Sub-Advisers out of the investment advisory fees it receives.
SIMC, an SEC-registered adviser, serves as the Adviser to the Funds. As of
December 31, 1999, SIMC had approximately $61.8 billion in assets under
management. SIMC is entitled to investment advisory fees as follows:
<TABLE>
<S> <C>
SEI VP Large Cap Value Fund 0.35%
SEI VP Large Cap Growth Fund 0.40%
SEI VP Small Cap Value Fund 0.65%
SEI VP Small Cap Growth Fund 0.65%
SEI VP International Equity Fund 0.51%
SEI VP Emerging Markets Equity Fund 1.05%
SEI VP Core Fixed Income Fund 0.28%
SEI VP High Yield Bond Fund 0.49%
SEI VP International Fixed Income Fund 0.30%
SEI VP Emerging Markets Debt Fund 0.85%
SEI VP Prime Obligation Fund 0.08%
</TABLE>
<PAGE>
PROSPECTUS 25
INVESTMENT ADVISER, SUB-ADVISERS AND PORTFOLIO MANAGERS
SUB-ADVISERS AND PORTFOLIO MANAGERS
SEI VP LARGE CAP VALUE FUND:
LSV Asset Management, L.P.: Josef Lakonishok, Andrei Shleifer and Robert Vishny
of LSV Asset Management, L.P. ("LSV"), serve as portfolio managers of a portion
of the assets of the SEI VP Large Cap Value Fund. Mr. Lakonishok, Mr. Schleifer
and Mr. Vishny are officers and partners of LSV. An affiliate of SIMC owns an
interest in LSV. SIMC pays LSV a fee, which is calculated and paid monthly,
based on an annual rate of .20% of the average monthly market value of the
assets of the Fund managed by LSV.
Mellon Equity Associates, LLP: William P. Rydell and Robert A. Wilk of Mellon
Equity Associates, LLP ("Mellon Equity"), serve as portfolio managers of a
portion of the assets of the SEI VP Large Cap Value Fund. Mr. Rydell is the
President and Chief Executive Officer of Mellon Equity, and has been managing
individual and collective portfolios at Mellon Equity since 1982. Mr. Wilk is a
Senior Vice President and Portfolio Manager of Mellon Equity, and has been
involved with securities analysis, quantitative research, asset allocation,
trading, and client services at Mellon Equity since April 1990.
Sanford C. Bernstein & Co., Inc.: Lewis A. Sanders and Marilyn Goldstein Fedak
of Sanford C. Bernstein & Co., Inc. ("Bernstein"), serve as portfolio managers
of a portion of the assets of the SEI VP Large Cap Value Fund. Mr. Sanders has
been employed by Bernstein since 1969, and is currently Chairman of the Board,
Chief Executive Officer, and a Director of Bernstein. Ms. Fedak, Chief
Investment Officer -- Large Capitalization Domestic Equities and a Director of
Bernstein, has been employed by Bernstein since 1984.
SEI VP LARGE CAP GROWTH FUND:
Alliance Capital Management L.P.: A committee of investment professionals at
Alliance Capital Management L.P. manages a portion of the assets of the SEI VP
Large Cap Growth Fund.
Provident Investment Counsel, Inc.: George E. Handtmann III and Jeffrey J.
Miller of Provident Investment Counsel, Inc. ("Provident"), serve as portfolio
managers of a portion of the assets of the SEI VP Large Cap Growth Fund. Mr.
Handtmann has been with Provident since 1982, and Mr. Miller has been with
Provident since 1972.
TCW Investment Management Company: Glen E. Bickerstaff of TCW Investment
Management Company ("TCW") serves as portfolio manager of a portion of the
assets of the SEI VP Large Cap Growth Fund. Mr. Bickerstaff is a Managing
Director of TCW, and has over 18 years of investment experience dedicated to
investing large cap growth securities. Mr. Bickerstaff joined TCW in May, 1998
after 10 years at Transamerica Investment Services, where he served as Vice
President and Senior Portfolio Manager.
SEI VP SMALL CAP VALUE FUND:
Artisan Partners Limited Partnership: Scott Satterwhite of Artisan Partners
Limited Partnership ("Artisan") serves as portfolio manager of a portion of the
assets of the SEI VP Small Cap Value Fund. Mr. Satterwhite, a managing director
of Artisan, has been with Artisan since 1996. Prior to joining Artisan, Mr.
Satterwhite was a portfolio manager at Wachovia Bank, N.A.
LSV Asset Management, L.P.: Josef Lakonishok, Andrei Shleifer, and Robert Vishny
of LSV Asset Management, L.P. ("LSV"), serve as portfolio managers of a portion
of the assets of the SEI VP Small Cap Value Fund. Mr. Lakonishok, Mr. Schleifer
and Mr. Vishny are officers and partners of LSV. An affiliate of SIMC owns an
interest in LSV. SIMC pays LSV a fee, which is calculated and paid monthly,
based on an annual rate of 0.50% of the average monthly market value of the
assets of the Fund managed by LSV.
<PAGE>
26 PROSPECTUS
INVESTMENT ADVISER, SUB-ADVISERS AND PORTFOLIO MANAGERS
Mellon Equity Associates, LLP: William P. Rydell and Robert A. Wilk of Mellon
Equity Associates, LLP ("Mellon Equity"), serve as portfolio managers of a
portion of the assets of the SEI VP Small Cap Value Fund. Mr. Rydell is the
President and Chief Executive Officer of Mellon Equity, and has been managing
individual and collective portfolios at Mellon Equity since 1982. Mr. Wilk is a
Senior Vice President and Portfolio Manager of Mellon Equity, and has been
involved with securities analysis, quantitative research, asset allocation,
trading, and client services at Mellon Equity since April 1990.
Security Capital Global Capital Management Incorporated: Anthony R. Manno Jr.,
Kenneth D. Statz, and Kevin W. Bedell comprise the Portfolio Management
Committee of Security Capital Global Capital Management Incorporated ("Security
Capital"). The Portfolio Management Committee is responsible for determining the
portfolio composition for the Fund's assets allocated to Security Capital. The
members of the Portfolio Management Committee have an average of 18 years of
investment experience.
SEI VP SMALL CAP GROWTH FUND:
Mazama Capital Management, LLC: Ron Sauer and Stephen Brink, CFA, of Mazama
Capital Management, LLC ("Mazama") serve as the portfolio managers to a portion
of the assets of the SEI V.P. Small Cap Growth Fund. Prior to founding Mazama,
Mr. Sauer served as President and Director of Research at Black & Company and
Mr. Brink served as Chief Investment Officer for the Pacific Northwest office of
U.S. Trust. Mr. Sauer and Mr. Brink have over 19 and 22 years of investment
experience, respectively.
Nicholas-Applegate Capital Management ("Nicholas-Applegate") serves as
Sub-Advisor of a portion of the assets of the SEI VP Small Cap Growth Fund under
the general supervision of Arthur E. Nicholas, founder and Chief Investment
Officer of the firm, and Catherine Somehegyi, Chief Investment Officer of the
firm's gloabl equities and trading since 1987. Nicholas-Applegate uses a team
approach for the day-to-day management of the Fund's assets. John Kane is the
lead portfolio manager of Nicholas-Applegate's U.S. Systematic team. Mr. Kane
has been a fund manager and investment team leader since June 1994. Prior to
joining Nicholas-Applegate, he had 25 years of investment/economics experience
with ARCO Investment Management Company and General Electric Company.
RS Investment Management, L.P.: Jim Callinan of Robertson, Stephens Investment
Management, L.P. ("RSIM"), serves as portfolio manager of a portion of the
assets of the SEI VP Small Cap Growth Fund. Mr. Callinan is a managing director
of RSIM. He joined RSIM in June 1996 after nine years at Putnam Investments
("Putnam") in Boston, where he served as a portfolio manager of the Putnam OTC
Emerging Growth Fund. Mr. Callinan also served as a specialty growth research
analyst and portfolio manager of both the Putnam Emerging Information Science
Trust Fund and the Putnam Emerging Health Sciences Trust Fund while at Putnam.
Sawgrass Asset Management, LLC: Dean McQuiddy of Sawgrass Asset Management, LLC
("Sawgrass"), serves as portfolio manager of a portion of the assets of the SEI
VP Small Cap Growth Fund. Mr. McQuiddy, a founding Principal of Sawgrass, has 12
years of investment experience. Prior to joining Sawgrass, he was a portfolio
manager at Barnett Capital Advisors.
Wall Street Associates: William Jeffery III and Kenneth F. McCain of Wall Street
Associates ("WSA") serve as portfolio managers of a portion of the assets of the
SEI VP Small Cap Growth Fund. Each is a controlling principal of WSA. They each
have over 27 years of investment management experience. David Baratta, who
joined WSA in 1999, also serves as a portfolio manager of a portion of the
assets of the SEI VP Small Cap Growth Fund. Prior to joining WSA, Mr. Baratta
was a portfolio manager of Morgan Grenfell, Inc. for 5 years. He has over 19
years of investment experience.
SEI VP INTERNATIONAL EQUITY FUND:
Acadian Asset Management, Inc.: A committee of investment professionals at
Acadian Asset Management, Inc. manages a portion of the assets of the SEI VP
International Equity Fund.
<PAGE>
PROSPECTUS 27
INVESTMENT ADVISER, SUB-ADVISERS AND PORTFOLIO MANAGERS
BlackRock International, Ltd.: Albert B. Morillo heads an investment committee
at BlackRock International, Ltd. ("BlackRock"), that serves as portfolio manager
of a portion of the assets of the SEI VP International Equity Fund. Prior to
joining BlackRock in January 2000, Mr. Morillo was the head of the European Team
of Scottish Widows Investment Management since 1991.
Capital Guardian Trust Company: A group of investment professionals at Capital
Guardian Trust Company each individually manage a portion of the assets of the
SEI VP International Equity Fund.
Oechsle International Advisors, LLC: S. Dewey Keesler, Jr. and Kathleen Harris
of Oechsle International Advisors, LLC ("Oechsle"), serve as Portfolio Managers
of a portion of the assets of the SEI VP International Equity Fund. Mr. Keesler
is a Principal and Chief Investment Officer at Oechsle. Prior to joining
Oechsle, Mr. Keesler was a Portfolio Manager at Putman International Advisors.
Ms. Harris is a Principal at Oechsle. Prior to joining Oechsle, she was a
Portfolio Manager and Investment Director for the State of Wisconsin Investment
Board.
SG Yamaichi Asset Management Company, Ltd., SG Pacific Asset Management, Inc.,
and SGY Asset Management (Singapore) Ltd.: Marco Wong and Hiroyoshi Nakagawa of
SG Yamaichi Asset Management Co., Ltd. ("SG Yamaichi"), SG Pacific Asset
Management, Inc. ("SG Pacific"), and SGY Asset Management (Singapore) Ltd.
("SGY"), serve as portfolio managers of a portion of the assets of the SEI VP
International Equity Fund. Mr. Wong leads the management team for the assets of
the Fund allocated to SG Pacific, SGY and SG Yamaichi. Mr. Wong has been with SG
Yamaichi since 1986. Mr. Nakagawa oversees the Japan investment team in Tokyo,
and also serves as portfolio manager for the International Equity Fund. Mr.
Nakagawa joined SG Yamaichi in 1977.
SEI VP EMERGING MARKETS EQUITY FUND:
Coronation Asset Management (Proprietary) Limited: Anthony Gibson and Louis
Stassen of Coronation Asset Management (Proprietary) Limited ("Coronation")
serve as portfolio managers of a portion of the assets of the SEI VP Emerging
Markets Equity Fund. Prior to joining Coronation in 1993, Mr. Gibson, the head
of Coronation's Investment Committee, and Mr. Stassen, the head of Coronation's
research department, worked at Syfrets Managed Assets for seven years and one
year, respectively. Prior to joining Syfrets Managed Assets, Mr. Stassen worked
as an Investment Analyst for Allan Gray Investment Counsel. Prior to joining
Coronation, Mr. Aylett worked at Syfrets Managed Assets as Fund Manager and Head
of Research.
Credit Suisse Asset Management Limited: Glenn Wellman and Isabel Knight of
Credit Suisse Asset Management Limited ("Credit Suisse") serve as portfolio
managers of a portion of the assets of the SEI VP Emerging Markets Equity Fund.
Mr. Wellman is a Managing Director of Credit Suisse. Prior to joining Credit
Suisse in 1993, he was a Director and Senior Vice President at Alliance Capital
Limited. Ms. Knight is a Director of Credit Suisse. Prior to joining Credit
Suisse in 1997, she was Senior Fund Manager at Foreign and Colonial from 1995 to
1997. From 1992 to 1995, Ms. Knight was a Portfolio Manager for Morgan Stanley
Asset Management.
Morgan Stanley Dean Witter Investment Management Inc.: Robert L. Meyer, Michael
Perl and Andy Skov of Morgan Stanley Dean Witter Investment Management Inc.
("MSDW Investment Management") serve as portfolio managers of a portion of the
assets of the SEI VP Emerging Markets Equity Fund. Mr. Meyer is a Managing
Director and joined MSDW Investment Management in 1989 after working for the law
firm of Irell & Manella. Mr. Perl is a Vice President and joined MSDW Investment
Management after 6 years at Bankers Trust Australia, where he served as a
Portfolio Manager. Mr. Skov is a Principal and joined MSDW Investment Management
after 4 years as an Associate at Bankers Trust.
Nicholas-Applegate Capital Management ("Nicholas-Applegate") serves as
Sub-Advisor of a portion of the assets of the SEI VP Emerging Markets Equity
Fund under the general supervision of Arthur E. Nicholas, founder and Chief
Investment Officer of the firm, and Catherine Somehegyi, Chief Investment
Officer of the firm's gloabl equities and trading since 1987. Nicholas-
Applegate uses a team approach for the day-to-day management of the Fund's
assets. Pedro Marcal and Ernesto Ramos are
<PAGE>
28 PROSPECTUS
INVESTMENT ADVISER, SUB-ADVISERS AND PORTFOLIO MANAGERS
the Emerging Countries investment team leaders. Mr. Marcal joined the firm in
1994. Prior to joining Nicholas-Applegate, he was an economist with A.B. Laffer,
V.A. Canto & Associates. Mr. Ramos joined the firm in 1994. Prior to joining
Nicholas-Applegate, he specialized in investment and quantitative research with
Batterymarch Financial Management; Bolt Beranck & Newman Inc. and Harvard
University.
Schroder Investment Management North America Inc.: Schroder Investment
Management North America Inc. ("Schroders"), acts as a Sub-Adviser for a portion
of the assets of the SEI VP Emerging Markets Equity Fund. A team of investment
professionals at Schroders manages a portion of the assets of the SEI VP
Emerging Markets Equity Fund. Giles Neville heads the Emerging Markets Committee
at Schroders. Mr. Neville has over 12 years of investment experience.
SG Pacific Asset Management, Inc. and SGY Asset Management (Singapore) Ltd.:
Marco Wong of SG Pacific Asset Management, Inc. ("SG Pacific") and SGY Asset
Management (Singapore) Ltd. ("SGY"), serves as portfolio manager of a portion of
the assets of the SEI VP Emerging Markets Equity Fund. Mr. Wong leads the
management team for the assets of the Fund allocated to SG Pacific and SGY.
Mr. Wong has been with SG Yamaichi Asset Management Co., Ltd., the parent of SGY
and SG Pacific, since 1986.
SEI VP CORE FIXED INCOME FUND:
BlackRock Financial Management, Inc.: Keith Anderson and Andrew Phillips of
BlackRock Financial Management, Inc. ("BlackRock"), serve as portfolio managers
of a portion of the assets of the SEI VP Core Fixed Income Fund. Mr. Anderson is
a Managing Director and Co-Head of Portfolio Management at BlackRock, and has 14
years' experience investing in fixed income securities. Mr. Phillips is a
Principal and portfolio manager with primary responsibility for the management
of the firm's investment activities in fixed-rate mortgage securities.
Robert W. Baird & Co., Incorporated: Charles B. Groeschell of Robert W. Baird &
Co., Incorporated ("Baird"), serves as a portfolio manager of the portion of the
assets of the SEI VP Core Fixed Income Fund managed by Baird. Prior to joining
Baird in March 2000, Mr. Groeschell was a Senior Vice President and portfolio
manager for Firstar Investment Management & Resource Company, LLC.
Mr. Groeschell has over 17 years of investment experience.
Western Asset Management Company: A committee of investment professionals at
Western Asset Management Company manages a portion of the assets of the SEI VP
Core Fixed Income Fund.
SEI VP HIGH YIELD BOND FUND:
Credit Suisse Asset Management, LLC: Richard J. Lindquist, C.F.A., of Credit
Suisse Asset Management, LLC ("CSAM") serves as portfolio manager of the SEI VP
High Yield Bond Fund. Mr. Lindquist joined CSAM in 1995 as a result of CSAM's
acquisition of CS First Boston Investment Management, and has had 15 years of
investment management experience, all of which were with high yield bonds. Prior
to joining CS First Boston, Mr. Lindquist was with Prudential Insurance Company
of America where he managed high yield funds totaling approximately $1.3
billion.
Nomura Corporate Research and Asset Management Inc.: Robert Levine, CFA,
President and Chief Executive Officer of Nomura Corporate Research and Asset
Management Inc. ("Nomura") and Richard A. Buch, Managing Director and Senior
Portfolio Manager of Nomura, are responsible for the management of Nomura's high
yield bond portfolios and research analysis. Prior to joining Nomura,
Mr. Levine was President of Kidder, Peabody High Yield Asset Management, Inc.
and Managing Director of Kidder, Peabody & Co., where he created their first
high yield bond mutual fund. Prior to joining Nomura, Mr. Buch was with Kidder,
Peabody & Co. where he served as Senior Vice President of the Kidder, Peabody
Asset Management, Inc. Mr. Levine and Mr. Buch each have over 20 years of
investment experience.
<PAGE>
PROSPECTUS 29
INVESTMENT ADVISER, SUB-ADVISERS AND PORTFOLIO MANAGERS
SEI VP INTERNATIONAL FIXED INCOME FUND:
Strategic Fixed Income, L.L.C.: Kenneth Windheim, Gregory Barnett and David
Jallits of Strategic Fixed Income, L.L.C. ("Strategic"), serve as portfolio
managers of the SEI VP International Fixed Income Fund. Mr. Windheim is the
President of Strategic. Prior to joining Strategic, Mr. Windheim was the Chief
Investment Officer and Managing Director of the group which managed global fixed
income portfolios at Prudential Asset Management. Prior to joining Strategic,
Mr. Barnett was portfolio manager for the Pilgrim Multi-Market Income Fund.
Prior to that, he was vice president and senior fixed income portfolio manager
at Lexington Management. Prior to joining Strategic, Mr. Jallits was Senior
Portfolio Manager for a hedge fund at Teton Partners.
SEI VP EMERGING MARKETS DEBT FUND:
Salomon Brothers Asset Management Inc: Peter J. Wilby leads the team of
professionals from Salomon Brothers Asset Management Inc ("SBAM") that manages a
portion of the assets of the SEI VP Emerging Markets Debt Fund. Mr. Wilby, a
Managing Director of SBAM, joined SBAM in 1989.
SEI VP PRIME OBLIGATION FUND:
Wellington Management Company, LLP: Timothy E. Smith is the Portfolio Manager of
the SEI VP Prime Obligation Fund. Mr. Smith is a Vice President of Wellington
Management Company, LLP which he joined in 1992.
<PAGE>
30 PROSPECTUS
INVESTMENT ADVISER, SUB-ADVISERS AND PORTFOLIO MANAGERS
PRIOR PERFORMANCE INFORMATION
SIMC acts as manager of managers of a number of portfolios of SEI Institutional
Managed Trust ("SIMT") and SEI Institutional International Trust ("SIIT") which
served as the models for the Funds. The portfolios of SIMT and SIIT have
substantially the same investment objectives, policies and strategies as the
Funds. In addition, the Funds and the corresponding portfolios of SIMT and SIIT
will continue to have substantially similar investment strategies, techniques
and characteristics. In the future, the Funds may be managed by a group of
sub-advisers that is different than the group that managed the portfolios of
SIMT and SIIT.
The following table sets forth the name of each Fund and the name of the
corresponding SIMC-advised portfolio of SIMT or SIIT from which the Fund is
cloned.
<TABLE>
<CAPTION>
FUND CORRESPONDING PORTFOLIO
<S> <C>
SEI VP Large Cap Value Fund SIMT Large Cap Value Fund
SEI VP Large Cap Growth Fund SIMT Large Cap Growth Fund
SEI VP Small Cap Value Fund SIMT Small Cap Value Fund
SEI VP Small Cap Growth Fund SIMT Small Cap Growth Fund
SEI VP International Equity Fund SIIT International Equity Fund
SEI VP Emerging Markets Equity Fund SIIT Emerging Markets Equity Fund
SEI VP Core Fixed Income Fund SIMT Core Fixed Income Fund
SEI VP High Yield Bond Fund SIMT High Yield Bond Fund
SEI VP Emerging Markets Debt Fund SIIT Emerging Markets Bond Fund
</TABLE>
Similarly, certain advisers to portfolios of the other SEI Funds will serve as
Sub-Advisers to certain of the Funds. These portfolios, as set forth below, have
substantially the same investment objectives, policies and strategies as the
Funds. SIMC anticipates that the Funds and the corresponding portfolios of the
other SEI Funds will be managed by the same personnel and will have
substantially similar investment strategies, techniques and characteristics.
The following table sets forth the name of each Fund, the name of the
corresponding SEI Funds portfolio from which the Fund is cloned, and the adviser
for each Fund and its corresponding SEI Funds portfolio.
<TABLE>
<CAPTION>
FUND CORRESPONDING SEI FUNDS PORTFOLIO ADVISER
<S> <C> <C>
SEI VP International Fixed Income SIIT International Fixed Income Fund Strategic Fixed Income, LLC
Fund
SEI VP Prime Obligation Fund SEI Liquid Asset Trust Prime Wellington Management Company,
Obligation Fund LLP
</TABLE>
Past investment performance of the Class A Shares of the SEI Funds' portfolios,
as shown in the table below, may be relevant to your consideration of the Funds,
and illustrates SIMC and the advisers' experience in managing similar
portfolios. The investment performance of the portfolios of the SEI Funds is not
indicative of future performance of the Funds, and the portfolios of SIMT and
SIIT may have been managed by different Sub-advisers than are currently managing
the Funds. The operating expenses of each Fund will be different from and may be
higher than, the operating expenses of the corresponding portfolio of the SEI
Funds. The performance information shown does not reflect separate account or
other insurance charges. As a result, the performance of the Funds will differ
from the performance of the corresponding portfolios of the SEI Funds.
<PAGE>
PROSPECTUS 31
INVESTMENT ADVISER, SUB-ADVISERS AND PORTFOLIO MANAGERS
<TABLE>
<CAPTION>
AVERAGE
YEAR-TO-DATE TOTAL RETURN TOTAL RETURN TOTAL RETURN TOTAL RETURN ANNUAL
RETURNS ONE YEAR THREE YEARS FIVE YEARS TEN YEARS TOTAL RETURN
INCEPTION (01/31/2000- ENDED ENDED ENDED ENDED SINCE
FUND NAME DATE 3/31/2000) 12/31/1999 12/31/1999 12/31/1999 12/31/98 INCEPTION
<S> <C> <C> <C> <C> <C> <C> <C>
SIMT Large Cap Value
Fund* 10/31/1994 (2.81)% 4.93% 16.90% 21.53% N/A 20.11%**
SIMT Large Cap Growth
Fund 12/20/1994 9.19% 34.20% 35.90% 33.07% N/A 33.01%
SIMT Small Cap Value
Fund 12/20/1994 1.56% (6.99)% 6.88% 12.00% N/A 12.54%
SIMT Small Cap Growth
Fund 04/20/1992 16.67% 75.22% 26.10% 27.30% N/A 23.61%
SIIT International
Equity Fund 12/20/1989 0.49% 39.63% 17.80% 14.69% 8.59% 8.62%
SIIT Emerging Markets
Equity Fund 01/17/1995 2.92% 70.31% 1.75% N/A N/A 3.97%
SIMT Core Fixed
Income Fund 05/01/1987 2.94% (1.79)% 5.29% 7.76% 7.00% 7.33%
SIMT High Yield Bond
Fund 01/11/1995 (1.92)% 3.61% 6.37% N/A N/A 10.09%
SIIT Emerging Markets
Debt Fund 06/26/1997 7.55% 28.89% N/A N/A N/A 1.89%
SIIT International
Fixed Income Fund 09/01/1993 (2.06)% (6.69)% 2.17% 6.40% N/A 6.05%
SEI Liquid Asset
Trust
Prime Obligation
Fund 01/18/1982 1.40% 4.95% 5.19% 5.30% 5.11% 6.05%
</TABLE>
* Prior to October 31, 1994, the Large Cap Value Fund was advised by a
different investment adviser and performance for that period is not shown.
** Since synthetic inception.
<PAGE>
32 PROSPECTUS
PURCHASING AND SELLING FUND SHARES
Shares are offered on each day that the New York Stock Exchange ("NYSE") is open
for business (a "Business Day").
The Funds offer their Class A Shares only to insurance companies for separate
accounts they establish to fund variable life insurance and variable annuity
contracts. An insurance company purchases or redeems shares of the Funds based
on, among other things, the amount of net contract premiums or purchase payments
allocated to a separate account investment division, transfers to or from a
separate account investment division, contract loans and repayments, contract
withdrawals and surrenders, and benefit payments. The contract prospectus
describes how contract owners may allocate, transfer and withdraw amounts to,
and from, separate accounts.
The price per share will be the net asset value per share ("NAV") next
determined after the Funds receive the insurance companies' purchase orders. The
Funds calculate NAV once each Business Day at the regularly-scheduled close of
normal trading on the NYSE (normally, 4:00 p.m. Eastern time). To receive the
current Business Day's NAV, generally the Funds must receive an order before
4:00 p.m. Eastern time.
HOW THE FUNDS CALCULATE NAV
NAV for one Fund share is the value of that share's portion of the net assets of
the Fund.
In calculating NAV, the Funds generally value their portfolio securities at
their market price. If market prices are unavailable or the Funds think that
they are unreliable, fair value prices may be determined in good faith using
methods approved by the Board of Trustees. Some Funds hold portfolio securities
that are listed on foreign exchanges. These securities may trade on weekends or
other days when the Funds do not calculate NAV. As a result, the market value of
these Funds' investments may change on days when it is not possible to purchase
or sell Fund shares.
For the SEI VP Prime Obligation Fund, the Fund values securities utilizing the
amortized cost method (as described in the SAI). If the Fund thinks amortized
cost is unreliable, fair value prices may be determined in good faith using
methods approved by the Board of Trustees. The Fund expects its NAV to remain
constant at $1.00 per share, although there is no guarantee that the Fund can
accomplish this.
DISTRIBUTION OF FUND SHARES
SEI Investments Distribution Co. ("SIDCo.") is the distributor of the shares of
the Funds. SIDCo. receives no compensation for distributing the Funds' Class A
Shares.
<PAGE>
PROSPECTUS 33
DIVIDENDS, DISTRIBUTIONS AND TAXES
DIVIDENDS AND DISTRIBUTIONS
The Funds distribute their investment income as dividends, and make
distributions of capital gains, if any, at least annually.
TAXES
PLEASE CONSULT YOUR TAX ADVISOR REGARDING YOUR SPECIFIC QUESTIONS ABOUT FEDERAL,
STATE AND LOCAL INCOME TAXES. Below is summarized some important tax issues that
affect the Funds and their shareholders. This summary is based on current tax
laws, which may change.
The Funds have been advised that they will not have to pay income taxes if they
distribute all of their income and gains. Net income and realized capital gains
that the Funds distribute are not currently taxable when left to accumulate
within a variable annuity or variable life insurance contract.
For information on federal income taxation of a life insurance company with
respect to its receipt of distributions from the Funds and federal income
taxation of owners of variable annuity or variable life insurance contracts,
refer to your contract prospectus.
MORE INFORMATION ABOUT TAXES IS IN THE FUNDS' SAI.
<PAGE>
SEI Insurance
Products Trust
INVESTMENT ADVISER
SEI Investments Management Corporation
One Freedom Valley Drive
Oaks, PA 19456
DISTRIBUTOR
SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, PA 19456
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP
More information about the Funds is available without charge through the
following:
STATEMENT OF ADDITIONAL INFORMATION ("SAI")
- ------------------------------------------------
The SAI dated April 5, 2000, includes more detailed information about SEI
Insurance Products Trust. The SAI is on file with the SEC and is incorporated by
reference into this prospectus. This means that the SAI, for legal purposes, is
a part of this prospectus.
ANNUAL AND SEMI-ANNUAL REPORTS
- ------------------------------------------------
These reports will typically list the Funds' holdings and contain information
from the Funds' managers about strategies and market conditions and trends and
their impact on performance. The reports will also contain detailed financial
information about the Funds.
TO OBTAIN AN SAI, ANNUAL OR SEMI-ANNUAL REPORT, OR MORE INFORMATION:
- ------------------------------------------------
BY TELEPHONE: Call 1-800-DIAL-SEI
BY MAIL: Write to the Funds at:
One Freedom Valley Drive
Oaks, PA 19456
BY INTERNET: http://www.seic.com
FROM THE SEC:
You can obtain the SAI or the Annual and Semi-Annual Reports, as well as other
information about SEI Insurance Products Trust, from the EDGAR Database on the
SEC's website ("http://www.sec.gov"). You may review and copy documents at the
SEC Public Reference Room in Washington, D.C. (for information on the operation
of the Public Reference Room, call 202-942-8090). You may request documents by
mail from the SEC, upon payment of a duplicating fee, by writing to: Securities
and Exchange Commission, Public Reference Section, Washington, DC 20549-0102.
You may also obtain this information, upon payment of a duplicating fee, by e-
mailing the SEC at the following address: [email protected].
The Trust's Investment Company Act registration number is 811-9183.
<PAGE>
PART C: OTHER INFORMATION
ITEM 23. EXHIBITS:
(a) Agreement and Declaration of Trust dated December 14, 1998, is
incorporated by reference to Exhibit (a) of Registrant's Initial Registration
Statement, filed December 31, 1998.
(b) By-Laws are incorporated by reference to Exhibit (a) of Registrant's
Initial Registration Statement, filed December 31, 1998.
(c) Not Applicable.
(d)(1) Investment Advisory Agreement between the Registrant and SEI
Investments Management Corporation ("SIMC") is incorporated by reference to
exhibit (d)(1) of Pre-Effective Amendment No. 1 to Registrant's Registration
Statement on Form N-1A (File No. 333-70013) filed with the SEC on October 12,
1999.
(d)(2) Form of Investment Sub-Advisory Agreements between SIMC and
[Sub-Adviser] is incorporated by reference to exhibit (d)(2) of Pre-Effective
Amendment No. 1 to Registrant's Registration Statement on Form N-1A (File No.
333-70013) filed with the SEC on October 12, 1999.
(d)(3) Investment Sub-Advisory Agreement between SIMC and Alliance Capital
Management, L.P. with respect to the SEI VP Large Cap Growth Fund is filed
herewith.
(d)(4) Investment Sub-Advisory Agreement between SIMC and Capital Guardian
Trust Company with respect to the SEI VP International Equity Fund is filed
herewith.
(d)(5) Investment Sub-Advisory Agreement between SIMC and Credit Suisse
Asset Management, LLC with respect to the SEI VP High Yield Bond Fund is filed
herewith.
(d)(6) Investment Sub-Advisory Agreement between SIMC and LSV Asset
Management, L.P. with respect to the SEI VP Large Cap Value and SEI VP Small Cap
Value Funds is filed herewith.
(d)(7) Investment Sub-Advisory Agreement between SIMC and Mellon Equity
Associates, LLP with respect to the SEI VP Large Cap Value Fund is filed
herewith.
(d)(8) Investment Sub-Advisory Agreement between SIMC and Mellon Equity
Associates, LLP with respect to the SEI VP Small Cap Value Fund is filed
herewith.
(d)(9) Investment Sub-Advisory Agreement between SIMC and Nicholas-Applegate
Capital Management with respect to the SEI VP Emerging Markets Equity and SEI VP
Small Cap Value Funds is filed herewith.
(d)(10)Investment Sub-Advisory Agreement between SIMC and Oechsle
International Advisors, LLC with respect to the SEI VP International Equity Fund
is filed herewith.
(d)(11)Investment Sub-Advisory Agreement between SIMC and Provident
Investment Counsel, Inc. With respect to the SEI VP Large Cap Growth Fund is
filed herewith.
(d)(12)Investment Sub-Advisory Agreement between SIMC and Robert W. Baird &
Co., Incorporated with respect to the SEI VP Core Fixed Income Fund is filed
herewith.
(d)(13)Investment Sub-Advisory Agreement between SIMC and Sawgrass Asset
Management, L.L.C. with respect to the SEI VP Small Cap Growth Fund is filed
herewith.
(d)(14)Investment Sub-Advisory Agreement between SIMC and Schroder
Investment Management North America Inc. with respect to the SEI VP Emerging
Market Equity Fund is filed herewith.
(d)(15)Investment Sub-Advisory Agreement between SIMC and Strategic Fixed
Income, LLC with respect to the SEI VP International Fixed Income Fund is filed
herewith.
2
<PAGE>
(d)(16)Investment Sub-Advisory Agreement between SIMC and Wall Street
Associates with respect to the SEI VP Small Cap Growth Fund is filed herewith.
(d)(17)Investment Sub-Advisory Agreement between SIMC and Wellington
Management Company, LLP with respect to the SEI VP Prime Obligation Fund is
filed herewith.
(d)(18)Investment Sub-Advisory Agreement between SIMC and Western Asset
Management Company with respect to the SEI VP Core Fixed Income Fund is filed
herewith.
(d)(19)Investment Sub-Advisory Agreement between SIMC and Salomon Brothers
Asset Management Inc with respect to the SEI VP Emerging Markets Debt Fund is
filed herewith.
(e) Distribution Agreement between the Registrant and SEI Investments
Distribution Co. is incorporated by reference to exhibit (e) of Pre-Effective
Amendment No. 1 to Registrant's Registration Statement on Form N-1A (File No.
333-70013) filed with the SEC on October 12, 1999.
(f) Not Applicable.
(g)(1) Form of Custodian Agreement with between the Registrant and First
Union National Bank is incorporated by reference to exhibit (g)(1) of
Pre-Effective Amendment No. 1 to Registrant's Registration Statement on Form
N-1A (File No. 333-70013) filed with the SEC on October 12, 1999.
(g)(2) Custodian Agreement with between the Registrant and State Street Bank
and Trust Company is filed herewith.
(h)(1) Administration Agreement between the Registrant and SEI Investments
Fund Management is incorporated by reference to exhibit (h)(1) of Pre-Effective
Amendment No. 1 to Registrant's Registration Statement on Form N-1A (File No.
333-70013) filed with the SEC on October 12, 1999.
(i) Opinion and Consent of Counsel, Morgan, Lewis & Bockius LLP, is filed
herewith.
(j) Opinion and Consent of Independent Public Accountants, is filed
herewith.
(k) Not Applicable.
(n) Not Applicable.
(p)(1) The Code of Ethics for SEI Investments Company is incorporated by
reference to Exhibit (p)(1) of Post-Effective Amendment No. 41 to SEI Daily
Income Trust's Registration Statement on Form N-1A (File No. 2-77048) filed with
the SEC March 31, 2000.
(p)(2) The Code of Ethics for SEI Insurance Products Trust is filed
herewith.
(p)(3) The Code of Ethics for Alliance Capital Management L.P. is filed
herewith.
(p)(4) The Code of Ethics for Capital Guardian Trust Company is filed
herewith.
(p)(5) The Code of Ethics for Credit Suisse Asset Management, LLC is filed
herewith.
(p)(6) The Code of Ethics for LSV Asset Management, L.P. is filed herewith.
(p)(7) The Code of Ethics for Mellon Equity Associates, LLP is filed
herewith.
(p)(8) The Code of Ethics for Nicholas-Applegate Capital Management is filed
herewith.
(p)(9) The Code of Ethics for Oechsle International Advisors, LLC is filed
herewith.
(p)(10)The Code of Ethics for Provident Investment Counsel, Inc. to be filed
by later amendment.
(p)(11)The Code of Ethics for Robert W. Baird & Co., Incorporated is filed
herewith.
(p)(12)The Code of Ethics for RS Investment Management, L.P. is filed
herewith.
(p)(13)The Code of Ethics for Salomon Brothers Asset Management Inc is filed
herewith.
3
<PAGE>
(p)(14)The Code of Ethics for Sanford C. Bernstein & Co., Inc. is filed
herewith.
(p)(15)The Code of Ethics for Sawgrass Asset Management, LLC is filed
herewith.
(p)(16)The Code of Ethics for Schroder Investment Management North America
Inc. is filed herewith.
(p)(17)The Code of Ethics for Strategic Fixed Income, L.L.C. is filed
herewith.
(p)(18)The Code of Ethics for Wall Street Associates is filed herewith.
(p)(19)The Code of Ethics for Wellington Management Company, LLP is filed
herewith.
(p)(20)The Code of Ethics for Western Asset Management Company is filed
herewith.
(q) Powers of Attorney for Robert A. Nesher, William M. Doran, Mark E.
Nagle, George J. Sullivan, Jr., James M. Storey and Edward D. Loughlin are filed
herewith.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT:
See the Prospectus and the Statement of Additional Information regarding the
Registrant's control relationships. SEI Investments Management Corporation
(formerly, SEI Financial Management Corporation) is the owner of all beneficial
interest in the Administrator and is a subsidiary of SEI Investments Company,
which also controls the distributor of the Registrant, SEI Investments
Distribution Co. (formerly, SEI Financial Services Company), as well as to other
corporations engaged in providing various financial and record keeping services,
primarily to bank trust departments, pension plan sponsors, and investment
managers.
ITEM 25. INDEMNIFICATION:
Article VII of the Agreement and Declaration of Trust empowers the Trustees
of the Trust, to the full extent permitted by law, to purchase with Trust assets
insurance for indemnification from liability and to pay for all expenses
reasonably incurred or paid or expected to be paid by a Trustee or officer in
connection with any claim, action, suit or proceeding in which he or she becomes
involved by virtue of his or her capacity or former capacity with the Trust.
Article VI of the By-Laws of the Trust provides that the Trust shall
indemnify any person who was or is a party or is threatened to be made a party
to any proceeding by reason of the fact that such person is and other amounts or
was an agent of the Trust, against expenses, judgments, fines, settlement and
other amounts actually and reasonable incurred in connection with such
proceeding if that person acted in good faith and reasonably believed his or her
conduct to be in the best interests of the Trust. Indemnification will not be
provided in certain circumstances, however, including instances of willful
misfeasance, bad faith, gross negligence, and reckless disregard of the duties
involved in the conduct of the particular office involved.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to the Trustees, officers and controlling persons of
the Registrant pursuant to the foregoing provisions or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable in the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a Trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such Trustee, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
4
<PAGE>
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER:
Other business, profession, vocation, or employment of a substantial nature
in which each director or principal officer of the adviser and each sub-adviser
is or has been, at any time during the last two fiscal years, engaged for his
own account or in the capacity of director, officer, employee, partner or
trustee are as follows:
ACADIAN ASSET MANAGEMENT, INC.
Acadian Asset Management, Inc. ("Acadian") is a sub-adviser for the
Registrant's SEI VP International Equity Fund. The principal address of Acadian
is Two International Place, 26th Floor, Boston, Massachusetts 02110. Acadian is
an investment adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Gary Leonard Bergstrom -- --
Chairman, Treasurer, Director
John Robert Chisholm -- --
Executive Vice President, co-
CIO
Ronald Dickson Frashure -- --
President, co-CIO, Director
Churchill Gibson Franklin -- --
Executive Vice President,
Marketing Director
Barry Bennett White Foley, Hoag & Eliot Partner
Clerk
</TABLE>
ALLIANCE CAPITAL MANAGEMENT L.P.
Alliance Capital Management L.P. ("Alliance") is a sub-adviser for the
Registrant's SEI VP Large Cap Growth Fund. The principal business address of
Alliance is 1345 Avenue of the Americas, New York, New York 10105. Alliance is
an investment adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER OTHER COMPANY POSITION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Alliance Capital Management
Corporation
General Partner
Luis Javier Bastida Banco Bilbao Vizcaya CFO & Member of the Executive
Director of General Partner Committee
John L. Blundin -- --
Executive Vice President of
General Partner
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER OTHER COMPANY POSITION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
David Remson Brewer, Jr. -- --
Sr. Vice President, General
Counsel & Secretary of
General Partner
Donald Hood Brydon AXA Investment Managers S.A. Chairman & CEO
Director of General Partner
Bruce William Calvert -- --
Vice Chairman, CEO,
Director of General Partner
Henri de la Croix de Castries AXA SEVP-Financial Services &
Director of General Partner Life Division
John Donato Carifa -- --
President, COO, Director of
General Partner
Kathleen Ann Corbet -- --
Executive Vice President &
Chief of Investment
Operations of General
Partner
Kevin C. Dolan AXA Senior Vice President
Director of General Partner
Denis Duverne AXA Senior Vice President
Director of General Partner
Alfred Harrison -- --
Vice Chairman, Director of
General Partner
Herve Hatt AXA Senior Vice President
Director of General Partner
Michael Hegarty The Equitable Life Assurance President, COO & Director
Director of General Partner Society of the United
States
Robert Gene Hysterberg -- --
Senior Vice President of
General Partner
Jean-Pierre Hellebuyck AXA Chairman
Director of General Partner
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER OTHER COMPANY POSITION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Benjamin Duke Holloway -- --
Director of General Partner
Nelson Rudolph Jantzen -- --
Senior Vice President of
General Partner
Robert Henry Joseph, Jr. -- --
Sr. Vice Pres., CFO of
General Partner
Wayne D. Lyski -- --
Executive Vice President of
General Partner
Mark Randall Manley -- --
Senior Vice President,
Counsel, Compliance
Officer & Assistant
Secretary of General
Partner
Edward D. Miller The Equitable Companies Inc. President & CEO
Director of General Partner
The Equitable Life Assurance Chairman, President & CEO
Society of the United
States
Peter D. Noris The Equitable Life Assurance EVP & CIO
Director of General Partner Society of the United
States
Joseph Edward Potter -- --
Senior Vice President of
General Partner
Frank Savage -- --
Director of General Partner
Alden Merle Stewart -- --
Executive Vice President of
General Partner
Stanley B. Tulin The Equitable Life Insurance Vice Chairman & CFO
Director of General Partner Society of the United
States
Dave Harrel Williams The Equitable Companies Inc. Director
Chairman of the Board, CEO &
Director of General Partner
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER OTHER COMPANY POSITION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Reba White Williams -- --
Director of General Partner
Robert Bruce Zoellick Center for Strategic and President & CEO
Director of General Partner International Studies
Harry Lewis Carr, Jr. -- --
Chairman of Shields/Alliance
Division of General Partner
Michael Francis Deltino -- --
Chairman of Regent Division
of General Partner
</TABLE>
ARTISAN PARTNERS LIMITED PARTNERSHIP
Artisan Partners Limited Partnership ("Artisan") is a sub-adviser for the
SEI VP Small Cap Value Fund. The principal business address of Artisan is
1000 N. Water Street, Suite 1770, Milwaukee, Wisconsin 53202. Artisan is an
investment adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER OTHER COMPANY POSITION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Andrew A. Ziegler Artisan Distributors LLC Officer
Chief Executive Officer
Lawrence A. Totsky Artisan Distributors LLC Officer
Chief Financial Officer
Mark L. Yockey
Portfolio Manager
Carlene M. Ziegler Heidrick & Struggles Independent Director
Portfolio Manager
Scott C. Satterwhite
Portfolio Manager
Andrew C. Stephens
Portfolio Manager
Darren W. DeVore
Marketing & Client Service
Michael Steinrueck --
Marketing & Client Service
Marina T. Carlson
Portfolio Manager
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER OTHER COMPANY POSITION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Michael C. Roos Artisan Distributors LLC Officer
Managing Director
</TABLE>
BLACKROCK FINANCIAL MANAGEMENT, INC.
BlackRock Financial Management, Inc. ("BlackRock") is a sub-adviser for the
Registrant's SEI VP Core Fixed Income Fund. The principal business address of
BlackRock is 345 Park Avenue, 30th Floor, New York, New York 10154. BlackRock is
an investment adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Gordon Anderson CastleInternational Asset Director
Managing Director Management Inc.
BlackRock International, Ltd. Managing Director
Keith Thomas Anderson BlackRock Financial Managing Director
Managing Director Management, Inc.
BlackRock Advisors, Inc. Managing Director
BlackRock (Japan) Inc. Managing Director
BlackRock International, Ltd. Managing Director
BlackRock Institutional Managing Director
Management Corporation
Provident Advisers, Inc. Managing Director
Paul L. Audet BlackRock International, Ltd. Chief Financial Officer,
Chief Financial Officer, Managing Director
Managing Director
BlackRock Financial Chief Financial Officer,
Management, Inc. Managing Director
BlackRock Advisors, Inc. Chief Financial Officer,
Managing Director
BlackRock (Japan) Inc. Chief Financial Officer,
Managing Director
BlackRock Institutional Chief Financial Officer,
Management Corporation Managing Director
BlackRock, Inc. Chief Financial Officer,
Managing Director
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
NC Investment Holdings, LLC Chief Financial Officer,
Managing Director
PNC Asset Management, Inc. Chief Financial Officer,
Managing Director
PNC Investment Chief Financial Officer,
Holdings, Inc. Managing Director
Bartholomew Angelo Battista BlackRock Financial Vice President, Regulatory
Vice President, Regulatory Management, Inc. Compliance
Compliance
BlackRock Advisors, Inc. Vice President, Regulatory
Compliance
BlackRock (Japan) Inc. Vice President, Regulatory
Compliance
BlackRock International, Ltd. Vice President, Regulatory
Compliance
BlackRock Institutional Vice President, Regulatory
Management Corporation Compliance
Robert Peter Connolly BlackRock, Inc. General Counsel
Managing Director, General
Counsel, Secretary
BlackRock Financial Managing Director, Counsel,
Management, Inc. Secretary
BlackRock Advisors, Inc. Managing Director, Counsel,
Secretary
BlackRock (Japan) Inc. Managing Director, Counsel,
Secretary
BlackRock International, Ltd. Managing Director, Counsel,
Secretary
BlackRock Institutional Managing Director, Counsel,
Management Corporation Secretary
Provident Advisers, Inc. General Counsel, Assistant
Secretary
Laurence Douglas Fink BlackRock, Inc. Chairman, CEO, Director
Chairman, CEO & Director
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
BlackRock Financial Chairman, CEO, Director
Management, Inc.
BlackRock Advisors, Inc. Chairman, CEO, Director
BlackRock (Japan) Inc. Chairman, CEO, Director
BlackRock International, Ltd Chairman, CEO, Director
BlackRock Institutional Chairman, CEO, Director
Management
Provident Advisers, Inc. Chairman, CEO, Director
Hugh Robert Frater BlackRock, Inc. Managing Director
Managing Director
BlackRock Advisors, Inc. Managing Director
BlackRock (Japan) Inc. Managing Director
BlackRock International, Ltd. Managing Director
BlackRock Institutional Managing Director
Management Corporation
Provident Advisers, Inc. Managing Director
Henry Gabbay BlackRock Financial Managing Director, Portfolio
Managing Director, Portfolio Management, Inc. Compliance
Compliance
BlackRock, Inc. Managing Director, Portfolio
Compliance
BlackRock Advisors, Inc. Managing Director, Portfolio
Compliance
BlackRock (Japan) Inc. Managing Director, Portfolio
Compliance
BlackRock International, Ltd. Managing Director, Portfolio
Compliance
BlackRock Institutional Managing Director, Portfolio
Management Corporation Compliance
Provident Advisers, Inc. Chief Compliance Officer
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Bennett William Golub BlackRock, Inc. Managing Director
Managing Partner
BlackRock Advisors, Inc. Managing Director
BlackRock (Japan) Inc. Managing Director
BlackRock International, Ltd. Managing Director
BlackRock Institutional Managing Director
Management Corporation
Provident Advisers, Inc. Managing Director
Robert Steven Kapito BlackRock, Inc. Vice Chairman
Director, Vice Chairman
BlackRock Financial Vice Chairman, Director
Management, Inc.
BlackRock Advisors, Inc. Vice Chairman, Director
BlackRock (Japan) Inc. Vice Chairman, Director
BlackRock International, Ltd. Vice Chairman, Director
BlackRock Institutional Vice Chairman, Director
Management Corporation
Provident Advisers, Inc. Vice Chairman, Director
James Joseph Lillis BlackRock, Inc. Treasurer, Assistant
Treasurer, Assistant Secretary
Secretary
BlackRock Advisors, Inc. Treasurer, Assistant
Secretary
BlackRock (Japan) Inc. Treasurer, Assistant
Secretary
BlackRock International, Ltd. Treasurer, Assistant
Secretary
BlackRock Institutional Treasurer, Assistant
Management Corporation Secretary
Provident Advisers, Inc. Treasurer, Assistant
Secretary
Paul Phillip Matthews, II BlackRock Financial Managing Director
Managing Director Management, Inc.
BlackRock Advisors, Inc. Managing Director
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
BlackRock (Japan) Inc. Managing Director
BFM International, Ltd. Managing Director
BlackRock Institutional Managing Director
Management Corporation
Provident Advisers, Inc. Managing Director
Barbara Goldman Novick BlackRock, Inc. Managing Director
Managing Director
BlackRock Advisors, Inc. Managing Director
BlackRock (Japan) Inc. Managing Director
BlackRock International, Ltd. Managing Director
BlackRock Institutional Managing Director
Management Corporation
Provident Advisers, Inc. Managing Director
Karen Horwitz Sabath BlackRock, Inc. Managing Director
Managing Director
BlackRock Advisors, Inc. Managing Director
BlackRock (Japan) Inc. Managing Director
BlackRock International, Ltd. Managing Director
BlackRock Institutional Managing Director
Management Corporation
Provident Advisers, Inc. Managing Director
Ralph Lewis Schlosstein BlackRock, Inc. President, Director
President, Director
BlackRock Financial President, Director
Management, Inc.
BlackRock Advisors, Inc President, Director
BlackRock (Japan) Inc. President, Director
BlackRock International, Ltd. President, Director
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
BlackRock Institutional President, Director
Management
Provident Advisers, Inc. President, Director
Susan Lynne Wagner BlackRock, Inc. Chief Financial Officer,
Chief Financial Officer, Secretary
Secretary
BlackRock Advisors, Inc. Chief Financial Officer,
Secretary
BlackRock (Japan) Inc. Chief Financial Officer,
Secretary
BlackRock International, Ltd. Chief Financial Officer,
Secretary
BlackRock Institutional Chief Financial Officer,
Management Corporation Secretary
Provident Advisers, Inc. Chief Financial Officer,
Secretary
</TABLE>
BLACKROCK INTERNATIONAL, LTD.
BlackRock International, Ltd. ("BlackRock International") is a sub-adviser
for the Registrant's International Equity Fund. The principal address of
BlackRock is 7 Castle Street, Edinburgh, EH23AM Scotland, United Kingdom.
BlackRock International is an investment adviser registered under the Advisers
Act.
<TABLE>
<CAPTION>
NAME AND POSITION WITH
INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Gordon Anderson CastleInternational Asset Director
Managing Director Management Inc.
BlackRock International, Ltd. Managing Director
Keith Thomas Anderson BlackRock Financial Managing Director
Managing Director Management, Inc.
BlackRock Advisors, Inc. Managing Director
BlackRock (Japan) Inc. Managing Director
BlackRock International, Ltd. Managing Director
BlackRock Institutional Managing Director
Management Corporation
Provident Advisers, Inc. Managing Director
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION WITH
INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Paul L. Audet BlackRock International, Ltd. Chief Financial Officer,
Chief Financial Officer, Managing Director
Managing Director
BlackRock Financial Chief Financial Officer,
Management, Inc. Managing Director
BlackRock Advisors, Inc. Chief Financial Officer,
Managing Director
BlackRock (Japan) Inc. Chief Financial Officer,
Managing Director
BlackRock Institutional Chief Financial Officer,
Management Corporation Managing Director
BlackRock, Inc. Chief Financial Officer,
Managing Director
NC Investment Holdings, LLC Chief Financial Officer,
Managing Director
PNC Asset Management, Inc. Chief Financial Officer,
Managing Director
PNC Investment Chief Financial Officer,
Holdings, Inc. Managing Director
Bartholomew Angelo Battista BlackRock Financial Vice President, Regulatory
Vice President, Regulatory Management, Inc. Compliance
Compliance
BlackRock Advisors, Inc. Vice President, Regulatory
Compliance
BlackRock (Japan) Inc. Vice President, Regulatory
Compliance
BlackRock International, Ltd. Vice President, Regulatory
Compliance
BlackRock Institutional Vice President, Regulatory
Management Corporation Compliance
Robert Peter Connolly BlackRock, Inc. General Counsel
Managing Director, General
Counsel, Secretary
BlackRock Financial Managing Director, Counsel,
Management, Inc. Secretary
BlackRock Advisors, Inc. Managing Director, Counsel,
Secretary
BlackRock (Japan) Inc. Managing Director, Counsel,
Secretary
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION WITH
INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
BlackRock International, Ltd. Managing Director, Counsel,
Secretary
BlackRock Institutional Managing Director, Counsel,
Management Corporation Secretary
Provident Advisers, Inc. General Counsel, Assistant
Secretary
Laurence Douglas Fink BlackRock, Inc. Chairman, CEO, Director
Chairman, CEO & Director
BlackRock Financial Chairman, CEO, Director
Management, Inc.
BlackRock Advisors, Inc. Chairman, CEO, Director
BlackRock (Japan) Inc. Chairman, CEO, Director
BlackRock International, Ltd Chairman, CEO, Director
BlackRock Institutional Chairman, CEO, Director
Management
Provident Advisers, Inc. Chairman, CEO, Director
Hugh Robert Frater BlackRock, Inc. Managing Director
Managing Director
BlackRock Advisors, Inc. Managing Director
BlackRock (Japan) Inc. Managing Director
BlackRock International, Ltd. Managing Director
BlackRock Institutional Managing Director
Management Corporation
Provident Advisers, Inc. Managing Director
Henry Gabbay BlackRock Financial Managing Director, Portfolio
Managing Director, Portfolio Management, Inc. Compliance
Compliance
BlackRock, Inc. Managing Director, Portfolio
Compliance
BlackRock Advisors, Inc. Managing Director, Portfolio
Compliance
BlackRock (Japan) Inc. Managing Director, Portfolio
Compliance
BlackRock International, Ltd. Managing Director, Portfolio
Compliance
BlackRock Institutional Managing Director, Portfolio
Management Corporation Compliance
Provident Advisers, Inc. Chief Compliance Officer
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION WITH
INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Bennett William Golub BlackRock, Inc. Managing Director
Managing Partner
BlackRock Advisors, Inc. Managing Director
BlackRock (Japan) Inc. Managing Director
BlackRock International, Ltd. Managing Director
BlackRock Institutional Managing Director
Management Corporation
Provident Advisers, Inc. Managing Director
Robert Steven Kapito BlackRock, Inc. Vice Chairman
Director, Vice Chairman
BlackRock Financial Vice Chairman, Director
Management, Inc.
BlackRock Advisors, Inc. Vice Chairman, Director
BlackRock (Japan) Inc. Vice Chairman, Director
BlackRock International, Ltd. Vice Chairman, Director
BlackRock Institutional Vice Chairman, Director
Management Corporation
Provident Advisers, Inc. Vice Chairman, Director
James Joseph Lillis BlackRock, Inc. Treasurer, Assistant
Treasurer, Assistant Secretary
Secretary
BlackRock Advisors, Inc. Treasurer, Assistant
Secretary
BlackRock (Japan) Inc. Treasurer, Assistant
Secretary
BlackRock International, Ltd. Treasurer, Assistant
Secretary
BlackRock Institutional Treasurer, Assistant
Management Corporation Secretary
Provident Advisers, Inc. Treasurer, Assistant
Secretary
Paul Phillip Matthews, II BlackRock Financial Managing Director
Managing Director Management, Inc.
BlackRock Advisors, Inc. Managing Director
BlackRock (Japan) Inc. Managing Director
BFM International, Ltd. Managing Director
BlackRock Institutional Managing Director
Management Corporation
Provident Advisers, Inc. Managing Director
Barbara Goldman Novick BlackRock, Inc. Managing Director
Managing Director
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION WITH
INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
BlackRock Advisors, Inc. Managing Director
BlackRock (Japan) Inc. Managing Director
BlackRock International, Ltd. Managing Director
BlackRock Institutional Managing Director
Management Corporation
Provident Advisers, Inc. Managing Director
Karen Horwitz Sabath BlackRock, Inc. Managing Director
Managing Director
BlackRock Advisors, Inc. Managing Director
BlackRock (Japan) Inc. Managing Director
BlackRock International, Ltd. Managing Director
BlackRock Institutional Managing Director
Management Corporation
Provident Advisers, Inc. Managing Director
Ralph Lewis Schlosstein BlackRock, Inc. President, Director
President, Director
BlackRock Financial President, Director
Management, Inc.
BlackRock Advisors, Inc President, Director
BlackRock (Japan) Inc. President, Director
BlackRock International, Ltd. President, Director
BlackRock Institutional President, Director
Management
Provident Advisers, Inc. President, Director
Susan Lynne Wagner BlackRock, Inc. Chief Financial Officer,
Chief Financial Officer, Secretary
Secretary
BlackRock Advisors, Inc. Chief Financial Officer,
Secretary
BlackRock (Japan) Inc. Chief Financial Officer,
Secretary
BlackRock International, Ltd. Chief Financial Officer,
Secretary
BlackRock Institutional Chief Financial Officer,
Management Corporation Secretary
Provident Advisers, Inc. Chief Financial Officer,
Secretary
</TABLE>
18
<PAGE>
CAPITAL GUARDIAN TRUST COMPANY
Capital Guardian Trust Company ("Capital Guardian") is a sub-adviser for the
Registrant's SEI VP International Equity Fund. The principal business address of
Capital Guardian is 630 5th Avenue, 36th Floor, New York, New York 10111.
Capital Guardian is a California trust company and is exempt from registration
under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------- --------------------------------- --------------------------------
<S> <C> <C>
Richard C. Barker Capital Group International, Inc. Vice Chairman of the Board and
Director
Capital International Limited
Chairman of the Board
Michael D. Beckman Capital Guardian Research Company Treasurer
Senior Vice President, Capital Guardian Trust Company, a Director
Treasurer, and Nevada Corporation
Director
David I. Fisher The Capital Group Companies, Inc. Chairman of the Board
Chairman of the Board Capital Group International, Inc. President, Director
Capital International, Inc. Vice Chairman of the Board
Capital International S.A. Chairman of the Board
Capital International Limited Vice Chairman
Capital International K.K. Vice Chairman
Capital Group Research, Inc. Director
Capital Research Company Director
Capital Research International Director
William H. Hurt Capital Guardian Trust Company, a Chairman of the Board
Senior Vice President Nevada Corporation
and Director Capital Strategy Research, Inc. Chairman of the Board
Robert G. Kirby The Capital Group Partners L.P. Senior Partner
Director and portfolio
manager
Nancy J. Kyle -- --
Senior Vice President-
International,
Director of the
Executive Committee,
international equity
and emerging markets
portfolio manager
Karin L. Larson Capital Guardian Research Company President, Director of Research
Director and member of the Board
Capital Research International President, Director of Research
and member of the Board
The Capital Group Companies, Inc. Director
D. James Martin Capital Guardian Research Company Senior Vice President and
Director Director
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------- --------------------------------- --------------------------------
<S> <C> <C>
John McIlwralth Capital International Limited Senior Vice President and
Senior Vice President- Director
International and
Director
James R. Mulally Capital Guardian Research Company Director
Senior Vice President, Capital Research Company Vice President
Director and Chairman Capital International Limited Senior Vice President
of the Fixed Income
Subcommittee
Jason M. Pilalas Capital Guardian Research Company Senior Vice President and
Director Director
Robert Ronus Capital Research International Chairman of the Board
President and Director Capital International S.A. Senior Vice President
Capital International Limited Senior Vice President
Theodore R. Samuels Capital Guardian Research Company Director
Senior Vice President
and Director,
portfolio manager
John B. Seiter Capital Group International, Inc. Senior Vice President
Executive Vice The Capital Group Companies, Inc. Vice President
President and Director
Eugene P. Stein Capital Guardian Research Company Director
Executive Vice
President, Director,
portfolio manager and
Chairman of the
Investment Committee
Edus H. Warren The Capital Group Partners, L.P. Senior Partner
</TABLE>
CORONATION ASSET MANAGEMENT (PROPRIETARY) LIMITED
Coronation Asset Management (Proprietary) Limited ("Coronation") is a
sub-adviser for the Registrant's SEI VP Emerging Markets Equity Fund. The
principal business address of Coronation is Boundary Terraces, 1 Mariendahl
Lane, Newlands, South Africa 7700. Coronation is an investment adviser
registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Walter Arthur Aylett -- --
Alternate Director and Investment
Manager
David L. Barnes Coronation Holdings Limited Managing Director
Director
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Hugh Richard Broadhurst -- --
Director and Investment Manager
Philip Leon Campher -- --
Director
Michielse Matthys du Toit -- --
Managing Director (President)
Anthony John Gibson -- --
Director and Chief Investment
Officer
Bruce Meredith Ilsley Sage Life Managing Director
Director
Leon Kaplan Sage Life Limited Director
Director
Gavan Mark Ryan Coronation Holdings Limited Group Financial Director
Director and Chairman
Andrew Charles Salmon -- --
Director and Investment Manager
John Ashley Snalam -- --
Financial Director and Compliance
Officer
Louis Francois Stassen -- --
Director and Investment Manager
</TABLE>
CREDIT SUISSE ASSET MANAGEMENT, LLC
Credit Suisse Asset Management, LLC ("Credit Suisse") is the sub-adviser for
the Registrant's SEI VP High Yield Fund. The principal business address of
Credit Suisse is One Citicorp Center, 153 East 53rd Street, New York, New York
10022. Credit Suisse is an investment adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER OTHER COMPANY OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Credit Suisse Capital
Corporation
General Partner
CS Advisers Corporation
General Partner
Phillip Maxwell Colebatch Credit Suisse Asset President/head of CS Global
Member of Partnership Board Management Ltd. Asset Management
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER OTHER COMPANY OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Jeffrey Alan Geller -- --
Member of Partnership Board
Robert John Moore -- --
COO/Member of Partnership
Board
William Wallace Priest, Jr. Credit Suisse Asset Managing Director
CEO/Member of Partnership Management Ltd.
Board
Philip Keebler Ryan Credit Suisse Asset Chief Financial Officer
Member of Partnership Board Management Ltd.
William Paul Sterling Credit Suisse Asset Managing Director
Member of Partnership Board Management Ltd.
Timothy Torrey Taussig Credit Suisse Asset Managing Director
Member of Partnership Board Management Ltd.
</TABLE>
CREDIT SUISSE ASSET MANAGEMENT LIMITED
Credit Suisse Asset Management Limited ("Credit Suisse") is a sub-adviser
for the Registrant's SEI VP Emerging Markets Equity Fund. The principal business
address of Credit Suisse is Beaufort House, 15 St. Botolph Street, London, EC3A
7JJ. Credit Suisse is an investment adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Ian M. Chimes Credit Suisse Asset Managing Director
Managing Director Management Funds (UK) Ltd.
David Maxwell Collins -- --
Compliance Officer
Andrew Harmstone -- --
Managing Director
William Arthur Kendrick Edmonds -- --
Company Secretary
Heinz Hofmann Credis International Fund Chief Executive
Managing Director Holding Ltd.
Beatrice Hannah Millicent Hollond -- --
Managing Director
Patricia Jeanne Maxwell-Arnot -- --
Managing Director
Stephen John Maynard -- --
Finance Director
Lord Moore -- --
Non-Executive Chairman
Mark Julian Morris -- --
Director-Investment Management
William Charles Mott -- --
Managing Director
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Robert John Parker CS First Boston Investment Director
Chief Executive Management Corporation
Dilip Krishna Rasgotra -- --
Managing Director
Phillip K. Ryan -- --
Managing Director
Emanuele Stefano Ravano -- --
Director-Investment Management
Mark K. Silverstein -- --
Portfolio Manager
Steen Steinke -- --
Chief Executive Officer
Stephen Maxwell Swift -- --
Managing Director
Glenn Wellman -- --
Managing Director
</TABLE>
LSV ASSET MANAGEMENT, L.P.
LSV Asset Management, L.P. ("LSV") is a sub-adviser for the Registrant's SEI
VP Large Cap Value Fund. The principal business address of LSV is 200 West
Madison Ave, Chicago, Illinois 60606. LSV is an investment adviser registered
under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Lakonishok Corporation -- --
General Partner
SEI Funds, Inc. -- --
General Partner
Shleifer Corporation -- --
General Partner
</TABLE>
MAZAMA CAPITAL MANAGMENT, LLC
Mazama Capital Managment, LLC ("Mazama") is a sub-adviser for the
Registrant's SEI VP Small Cap Growth Fund. The principal business address of
Mazama is One SW Columbia Street, Suite 1860, Portland, Oregon 97258. Mazama is
an investment adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Ronald Adair Sauer -- --
Member, President
Jill Ronne Collins -- --
Member, VP Marketing
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Brian Paul Alfrey -- --
Member, VP-Administration/Ops
Stephen Charles Brink -- --
Member, VP-Research
</TABLE>
MELLON BOND ASSOCIATES, LLP
Mellon Bond Associates, LLP ("Mellon Bond") is a Sub-Adviser to the Fund's
SEI VP Bond Index Fund. The principal business address of Mellon Bond is Mellon
Bank Center, 1735 Market Street, Philadelphia, Pennsylvania 19101-7899. Mellon
Bond is an investment adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION WITH
INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------- -------------------------------- --------------------------------
<S> <C> <C>
William Keith Smith TBCAM Holdings, Inc. Director
Executive Committee
Franklin Portfolio Director
Holdings, Inc.
Boston Safe Advisors, Inc. Director
Buck Consultants Chairman
The Dreyfus Corporation Chairman
The Bridgewater Land Co., Inc. President, Director
Mellon Preferred Capital President, Director
Corporation
Wellington-Medford II President, Director
Properties, Inc.
TBC Securities Co., Inc. President, Director
The Boston Company, Inc. Chairman of The Board, CEO
Boston Safe Deposit and Trust Chairman of the Board, CEO,
Company Director, Chairman of Exec.
Committee
Boston Group Holdings, Inc. CEO, Director, Chairman
Mellon Europe Limited Director
Laurel Capital Advisors, LLP Executive Committee
Mellon Equity Associates, LLP Executive Committee
Mellon Global Investing Corp. Director
Mellon Financial Services Corp. Vice Chairman & Director
#18
Mellon Accounting Director
Services, Inc.
MGIC-UK Ltd. Director
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION WITH
INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------- -------------------------------- --------------------------------
<S> <C> <C>
Mellon Capital Management Corp. Director
Mellon Financial Company Director, Chairman
Mellon Bank, N.A. Senior Vice Chairman
Ronald Phillip O'Hanley, III Franklin Portfolio Director
Chairman, Executive Committee Holdings, Inc.
The Boston Company Asset Director
Management, Inc.
Boston Safe Advisors, Inc. Director
Mellon Capital Management Director
Corporation
Certus Asset Advisors Director
Corporation
Mellon Equity Associates, LLP Executive Committee Chairman
Mellon-France Corporation Director
Laurel Capital Advisors, LLP Executive Committee
CCF-Mellon Partners Partner Representative
Christopher Mark Condron The Boston Company Asset President, Chairman
Executive Committee Management, LLC
TBCAM Holdings, Inc. President, Director, Chairman
The Dreyfus Corporation President, CEO, COO, Director
Franklin Portfolio Director
Holdings, Inc.
Certus Asset Advisors Director
Corporation
Boston Safe Advisors, Inc. President, Director
Mellon Capital Management Director
Corporation
Mellon Equity Associates, LLP Executive Committee
Mellon Bank, N.A. President, COO
Mellon Bank Corporation Director
The Boston Company, Inc. Director
Laurel Capital Advisors, LLP Executive Committee
The Boston Company Financial President, Director
Strategies, Inc.
James Milton Gockley Mellon Securities Trust Company Vice President
Executive Committee
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION WITH
INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------- -------------------------------- --------------------------------
<S> <C> <C>
Dreyfus Investment Services Vice President
Corporation
Laurel Capital Advisors, LLP Vice President
Boston Safe Deposit and Trust General Counsel
Company
The Boston Company, Inc. General Counsel
Mellon Accounting Vice President
Services, Inc.
Mellon Capital Management Vice President
Corporation
Mellon Equity Associates, LLP Executive Committee
Mellon Financial Services Corp Vice President
#17
Mellon-France Corporation Vice President
Paul Roger McCaan The Dreyfus Corporation Portfolio Manager
President/CEO, Executive
Committee
William Folwell Adam Executive -- --
Vice President
David Burch Chittim Senior Vice -- --
President
Joan Antoniazzi Greene Mellon Equity Associates Treasurer
Treasurer
Mellon Capital Management Corp. Treasurer
Mellon Securities Trust Company Assistant Treasurer
Mellon Bank Treasurer
John Kenneth Milne Executive -- --
Vice President
Laurie Ann Carroll -- --
Senior Vice President
Gregory Daniel Curran -- --
Senior Vice President
Ailsa Taylor Keglar -- --
Vice President
Christopher Michael Pelligrino -- --
Vice President
Nancy Gail Rogers -- --
Vice President
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION WITH
INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------- -------------------------------- --------------------------------
<S> <C> <C>
Gerald Alan Thomas Senior Vice -- --
President
Deborah S. Wingerson -- --
Vice President
</TABLE>
MELLON EQUITY ASSOCIATES, LLP
Mellon Equity Associates ("Mellon Equity") is a sub-adviser for the
Registrant's SEI VP Large Cap Value and SEI VP Small Value Cap Funds. The
principal business address of Mellon Equity is 500 Grant Street, Suite 4200,
Pittsburgh, PA 15258. Mellon Equity is an investment adviser registered under
the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Christopher Mark Condron The Boston Company Asset Director
Executive Committee Member Management, LLC
Founders Asset Managment, LLC Chairman & Director
TBCAM Holdings, Inc. Director
The Dreyfus Corporation Chairman, CEO, & Director
Franklin Portfolio Director
Holdings, Inc.
Franklin Portfolio Director
Associates, LLC
Certus Asset Advisors Director
Corporation
Boston Safe Advisors, Inc. Director & President
Mellon Capital Management Director
Corporation
Mellon Bond Associates, LLP Exec. Comm. Member
Mellon Bank, N.A. Director, COO/President
Mellon Bank Corporation Director, COO
The Boston Company, Inc. Vice Chairman & Director
Boston Safe Deposit and Trust Director
Company
The Boston Copmany Financial President & Director
Strategies, Inc.
Ronald P. O'Hanley, III Franklin Portfolio Director
Executive Committee Member & Holdings, Inc.
Chairman
The Boston Company Asset Director
Managment, Inc.
</TABLE>
27
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Boston Safe Advisors, Inc. Director
Mellon Capital Managment Director
Corporation
Certus Asset Advisors Director
Corporation
Mellon Bond Associates, LLP Exec. Comm. Member &
Chairman
Mellon-France Corporation Director
Laurel Capital Advisors, LLP Executive Committee Member
William Paul Rydell The Dreyfus Corporation Group Manager
President/CEO
Executive Committee Member
James Milton Gockley Dreyfus Financial Services Vice President
Executive Committee Member Corp.
Dreyfus Investment Services Vice President
Corp.
Franklin Portfolio Associates Chief Legal Officer & Vice
Trust President
Mellon Securities Trust Vice President
Company
Laurel Capital Advisors, LLP Vice President
Boston Safe Deposit and Trust General Counsel
Company
The Boston Company, Inc. General Counsel
Patricia Kay Nichols
Executive VP/COO
Exec. Comm. Member
Mellon Bank, N.A.
Limited Partner (99%)
MMIP, Inc.
General Partner (1%)
Mellon Bank Corporation
Shareholder
Shareholders of Mellon Bank
Corporation
</TABLE>
MORGAN STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC.
Morgan Stanley Dean Witter Investment Management Inc. ("MSDW Investment
Management") is a sub-adviser for the Registrant's SEI VP Emerging Market Equity
Fund. The principal business address of
28
<PAGE>
MSDW Investment Management is 1221 Avenue of the Americas, New York, NY 10020.
MSDW Investment Management is an investment adviser registered under the Adviser
Act.
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Barton M. Biggs Morgan Stanley Dean Witter & Co. Managing Director
Chairman, Director and Managing Incorporated
Director
Dennis G. Sherva Morgan Stanley Dean Witter & Co. Managing Director
Director and Managing Director Incorporated
Harold J. Schaff, Jr. Morgan Stanley Dean Witter & Co. Principal
General Counsel, Secretary and Incorporated
Principal
Donald P. Ryan Morgan Stanley Dean Witter & Co. Principal
Compliance Officer and Principal Incorporated
John R. Alkire Morgan Stanley Dean Witter Asset & Managing Director
Managing Director Investment Trust Management Co.,
Limited
Morgan Stanley Dean Witter & Co. Managing Director
Incorporated
Peter D. Caldecott Morgan Stanley Dean Witter Managing Director
Managing Director and Member of Investment Management, Ltd.
Executive Committee
Morgan Stanley Dean Witter Vice President & Investment Manager
International
David Martin Darst Morgan Stanley Dean Witter & Co. Managing Director
Managing Director Incorporated
Robert L. Meyer -- Managing Director
Managing Director
Russell Christopher Platt Morgan Stanley Dean Witter & Co. Managing Director
Managing Director Incorporated
Vinod Sethi Morgan Stanley Dean Witter & Co. Managing Director
Managing Director Incorporated
Marna C. Whittington Miller Anderson & Sherrerd, LLP Exec. Committee Member
Chief Operating Officer, Managing
Director and Member of Executive
Committee
Richard B. Worley Miller Anderson & Sherrerd, LLP Portfolio Manager and Executive
President, Director, Portfolio Committee Member
Manager and Member of Executive
Committee
</TABLE>
29
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
MAS Fund Distribution, Inc. Registered Representative
Morgan Stanley & Co. Incorporated Managing Director
</TABLE>
NICHOLAS-APPLEGATE CAPITAL MANAGEMENT, INC.
Nicholas-Applegate Capital Management, Inc. ("Nicholas-Applegate") is a
sub-adviser for the Registrant's SEI VP Small Cap Growth Fund. The principal
business address of Nicholas-Applegate is 600 West Broadway, 29th Floor, San
Diego, California 92101. Nicholas-Applegate is an investment adviser registered
under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Thomas E. Bleakley -- --
Limited Partner of LP
William H. Chenoweth -- --
Limited Partner of LP
Laura Stanley DeMarco -- --
Limited Partner of LP
Andrew B. Gallagher Nicholas-Applegate Capital Partner, Portfolio Manager,
Limited Partner of LP Management Institutional Equity
Management
Richard E. Graf -- --
Limited Partner of LP
Peter J. Johnson -- --
Limited Partner of LP
Jill B. Jordon Nicholas-Applegate Capital Head of Global Sales and
Limited Partner of LP Management Marketing
Nicholas-Applegate Securities Senior Vice President and
Head of Institutional
Business
John J. Kane -- --
Limited Partner of LP
James E. Kellerman -- --
Limited Partner of LP
George C. Kenney -- --
Limited Partner of LP
Pedro V. Marcal -- --
Limited Partner of LP
James T. McComsey -- --
Limited Partner of LP
John J.P. McDonnell Nicholas-Applegate Capital COO
Limited Partner of LP Management
</TABLE>
30
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Edward B. Moore, Jr. -- --
Limited Partner of LP
Loretta J. Morris -- --
Limited Partner of LP
Arthur E. Nicholas Nicholas-Applegate Securites President, Chairman
Managing Partner
Nicholas-Applegate Capital Managing Partner, President
Managment of General Partner, CIO
John R. Pipkin -- --
Limited Partner of LP
Frederick S. Robertson Nicholas-Applegate Capital CIO/Fixed Income
Limited Partner of LP Management
Catherine C. Somhegyi Nicholas-Applegate Capital CIO, Global Equity
Limited Partner of LP Management Management, Partner, and
Portfolio Manager
Lawrence S. Speidell -- --
Limited Partner of LP
Todd L. Spillane -- --
Vice President, Director of
Compliance
James W. Szabo Nichoas-Applegate Capital General Partner of Global
Limited Partner of LP Management Holdings LP Holding and Nicholas-
Applegate Capital
Management
Nicholas-Applegate Capital General Partner of General
Management Holdings Inc. Partner
Nicholas-Applegate Capital Limited Partner of LP
Management Inc.
Nicholas-Applegate Global -- --
Holding Co. LP
Limited Partner
Nicholas-Applegare Capital -- --
Management, Inc.
Limited Partner of Limited
Partner
</TABLE>
NOMURA CORPORATE RESEARCH AND ASSET MANAGEMENT, INC.
Nomura Corporate Research and Asset Management, Inc. ("Nomura") is a
sub-adviser for the Registrant's SEI VP High Yield Bond Fund. The principal
business address of Nomura is Two World Financial Center, Building B, New York,
New York 10281-1198. Nomura is an investment adviser registered under the
Advisers Act.
31
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Nomura Holding America Inc. -- --
Shareholder
The Nomura Securities Co., -- --
Ltd.
Shareholder
Robert NMN Levine -- --
President, CEO and Board
Member
Richard Alan Buch -- --
Board Member, Managing
Director and Head Trader
Douglas Reed Metcalf -- --
Director
Shigeki NMN Fujitani Nomura Securities Managing Director
Board Member International, Inc.
Joseph Redmond Schmuckler Nomura Securities Global Co-Chairman of the Board
Co-Chairman of the Board Investments Advisors, Inc.
Nomura Holding America Inc. Executive Managing Director
Nomura Securities Co-Pres., Co-CEO & Board
International Member
</TABLE>
OECHSLE INTERNATIONAL ADVISORS, LLC
Oechsle International Advisors, LLC ("Oechsle") is a sub-adviser for the
Registrant's SEI VP International Equity Fund. The principal business address of
Oechsle is One International Place, 23rd Floor, Boston, Massachusetts 02110.
Oechsle is an investment adviser registered under the Advisers Act.
32
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
S. Dewey Keesler -- --
CIO and Principal
Stephen P. Langer -- --
Principal/Director of
Marketing
Sean Roche -- --
COO and Principal
Warren Walker -- --
Principal/Portfolio Manager
</TABLE>
PROVIDENT INVESTMENT COUNSEL, INC.
Provident Investment Counsel, Inc. ("Provident") is a sub-adviser for the
Registrant's SEI VP Large Cap Growth Fund. The principal business address of
Provident is 300 North Lake Avenue, Pasadena, CA 91101. Provident is an
investment adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Aaron Webster Lee Eubanks, -- --
Sr.
SVP, COO
Thomas John Condon -- --
Managing Director
Lauro F. Guerra -- --
Managing Director
George Edward Handtmann III -- --
Executive Managing Director
Robert Marvin Kommerstad -- --
President/Chairman
Jeffrey John Miller -- --
Managing Director
Larry Dee Tashjian -- --
Executive Managing Director
William Todd Warnick -- --
V.P., CFO
Jeffrey Dale Lovell Putnam, Lovell Managing Director & President
Director
Thomas Michael Mitchell -- --
Managing Director
Frederick Brown Windle -- --
Managing Director
</TABLE>
33
<PAGE>
ROBERT W. BAIRD & CO., INCORPORATED
Robert W. Baird & Co., Incorporated ("Baird") is a sub-adviser for the
Registrant's SEI VP Core Fixed Income Fund. The principal business address of
Baird is 777 E. Wisconsin Avenue, Milwaukee, WI 53202. Baird is an investment
adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
James Dick Bell -- --
Managing Director
Paul John Carbone -- --
Managing Director
Bryce Patrick Edwards -- --
Managing Director
Harold Charles Elliott -- --
Managing Director
Glen Fredrick Hackmann -- --
Secretary, General Counsel,
Managing Director
George Frederick Kasten, Jr. -- --
Chairman, Chief Executive
Officer
Keith Anthony Kolb -- --
Managing Director
Patrick Steven Lawton -- --
Managing Director
William Walter Mahler -- --
Managing Director
John Robert Merrell -- --
Managing Director, Marketing
Director
Terrance Patrick Maxwell -- --
Managing Director
Paul Edward Purcell -- --
President, Chief Operating
Officer
Michael John Schroeder -- --
Managing Director
Paul Stuart Shain -- --
Managing Director
John Earl Sundeen -- --
Senior Vice President,
Compliance Director
</TABLE>
34
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Russell Paul Schwei -- --
Chief Financial Officer,
Managing Director
Dominick Paul Zarcone -- --
Managing Director
</TABLE>
RS INVESTMENT MANAGEMENT, L.P.
RS Investment Management, L.P. ("RS") is a sub-adviser for the Registrant's
SEI VP Small Cap Growth Fund. The principal business address of Robertson is
555 California Street, Suite 2600, San Francisco, California 94104. RS is an
investment adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
RS Regulated 1 LLC (RSR1) -- --
Robertson Stephens Investment -- --
Member of RSR1
Bank America Corporation -- --
Indirect Parent
George Randall Hecht Robertson, Stephens & Co. Indirect Owner
Director and President Investment Management, L.P.
Roberston, Stephens President, CEO, Director &
Investment Indirect Owner
Management, Inc.
Robertson, Stephens Trustee
Investment Trust
Paul Harbor Stephens Roberston, Stephens Indirect Owner
Member of Group Investment
Management, Inc.
David James Evans, III -- --
Secretary, Sec. Analyst,
Portfolio Manager
</TABLE>
SALOMON BROTHERS ASSET MANAGEMENT INC.
Salomon Brothers Asset Management Inc. ("SBAM") is the sub-adviser for the
Registrant's SEI VP Emerging Markets Debt Portfolio. The principal address of
SBAM is 7 World Trade Center, New York, New York 10048. SBAM is an investment
adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Andrew W. Alter Salomon Brothers Inc. Counsel
Assistant Secretary
Howard M. Darmstadter Travelers Group, Inc. Assistant General Counsel
Assistant Secretary
Vilas V. Gadkari Salomon Brothers Asset Managing Director & Chief
Managing Director Management Limited Investment Officer
</TABLE>
35
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Salomon Brothers Inc. Managing Director
Salomon Brothers Managing Director
International Limited
Thomas W. Jasper Salomon Brothers Inc. Managing Director
Treasurer
Ross S. Margolies Salomon Brothers Inc. Managing Director
Managing Director
Heath B. McLendon Salomon Smith Barney Managing Director
Managing Director
Smith Barney Strategy Director, Chairman
Advisers Inc.
The Travelers Investment Director
Management Company
Mary L. McNiff Salomon Brothers Inc. Director
Director
Pamela P. Milunovich Salomon Brothers Inc. Director
Director
Nancy A. Noyes Salomon Brothers Inc. Director
Director
Maureen J. O'Callaghan Salomon Brothers Inc. Director
Director
Marcus A. Peckman Salomon Brothers, Inc. Director
Director-Chief Financial
Officer
Michael F. Rosenbaum Salomon Smith Barney Inc. Managing Director
Chief Legal Officer,
General Counsel
Salomon Brothers Asset Chief Legal Officer
Management Limited
Salomon Brothers Asset Chief Legal Officer
Management Asia Pacific
Limited
The Travelers Group Inc. General Counsel to Asset
Management
Mitchel J. Schulman Salomon Brothers Inc. Director, COO-Portfolios
Director, COO-Portfolios
Jeffrey S. Scott -- --
Chief Compliance Officer
Beth A. Simmel Salomon Brothers Inc. Director
Director
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
David A. Torchia Salomon Brothers Inc. Director
Director
Peter J. Wilby Salomon Brothers Inc. Managing Director
Managing Director
</TABLE>
SANFORD C. BERNSTEIN & CO., INC.
Sanford C. Bernstein & Co., Inc. ("Bernstein") is a sub-adviser for the
Registrant's SEI VP Large Cap Value Fund. The principal business address of
Bernstein is 767 Fifth Avenue, New York, New York 10153. Bernstein is an
investment adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Lewis A. Sanders -- --
Chairman of the Board, Chief
Executive Officer, Director
Roger Hertog -- --
President and Chief Operating
Officer
Andrew S. Adelson -- --
Senior Vice President, Chief
Investment Officer--
International Equities,
Director
Kevin R. Brine -- --
Senior Vice President--Global
Asset Management Services,
Director
Charles C. Cahn, Jr. -- --
Senior Vice President,
Director of Global Fixed
Income, Director
Marilyn Goldstein Fedak -- --
Senior Vice President, Chief
Investment Officer--U.S.
Equities, Director
Michael L. Goldstein -- --
Senior Vice President--Chief
Investment Strategist,
Director
Thomas S. Hexner -- --
Senior Vice
President--Private Client
Services
</TABLE>
37
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Gerald M. Lieberman -- --
Senior Vice
President--Finance and
Administration
Jean Margo Reid -- --
Senior Vice President,
General Counsel, Director
Francis H. Trainer, Jr. -- --
Senior Vice President, Chief
Investment Officer--Fixed
Income, Director
</TABLE>
SAWGRASS ASSET MANAGEMENT, LLC
Sawgrass Asset Management, LLC ("Sawgrass") is a sub-adviser for the
Registrant's SEI VP Small Cap Growth Fund. The principal business address of
Sawgrass is 4337 Pablo Oaks Court, Building 200, Jacksonville, Florida 32224.
Sawgrass is an investment adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Sawgrass Asset -- --
Management, Inc.
("S.A.M., Inc.")
Member, Shareholder of 50%
AmSouth Bank -- --
Member, Shareholder of 50%
AmSouth Bancorporation -- --
100% Shareholder of AmSouth
Bank
Andrew M. Cantor S.A.M., Inc. 1/3 Owner
Principal
Dean E. McQuiddy S.A.M., Inc. 1/3 Owner
Principal
Brian K. Monroe S.A.M., Inc. 1/3 Owner
Principal
</TABLE>
38
<PAGE>
SCHRODER INVESTMENT MANAGEMENT NORTH AMERICA INC.
Schroder Investment Management North America Inc. ("Schroders") is a
sub-adviser for the Registrant's SEI VP Emerging Markets Equity Fund. The
principal business address for Schroders is 787 Seventh Avenue, 34th Floor, New
York, NY 10019. Schroders is an investment adviser registered under the Advisers
Act.
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Andrew R. Barker Schroder Investment First Vice President
Director, Senior Vice Management North America
President Ltd.
William H. Barnes -- --
Director, Senior Vice
President
Stefan Bottcher Schroder Investment Director
Director Management North America
Ltd.
Donal Fergal Cassidy Schroder Capital Funds Treasurer
Comptroller, Vice (Delaware)
President/NY
Schroder Capital Funds II Treasurer
Schroder Series Trust II Treasurer
Schroder All Asia Fund Treasurer
Schroder Fund Advisors Inc. Treasurer, Chief Financial
Officer
Heather Frances Crighton Schroder Capital Management Vice President
Senior Vice President, International Inc.
Director
Schroder All Asia Fund Fund Manager
Schroder Capital Management First Vice President,
International Ltd. Director
Louise Croset Schroder All Asia Fund President, Director
Executive Vice President,
Director
Schroder Capital Management Director, First Vice
International Ltd. President
Nancy Curtin -- --
Managing Director, Director
Tappan Datta Schroder Capital Management Economist, First Vice
Senior Vice President, International Ltd. President
Director
</TABLE>
39
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Roberty Geoffrey Davy Schroder Investment Director
Executive Vice President, Management International
Director Ltd.
Schroder Mildesa Investment Director
Management S.A.
Schroder Capital Funds Vice President
Margaret Douglas-Hamilton Schroder US Holdings Inc. Senior Vice President,
Director, Secretary Secretary, General Counsel
Schroder Structured Secretary
Investments Inc.
Schroder All Asia Fund Secretary
Schroder Venture Managers, Secretary
Inc.
Boston Waterfront Corp. Secretary
Schroder Capital Funds Secretary
Donald H.M. Farquharson Schroder Capital Management Vice President
Senior Vice President, International Ltd.
Director
Richard Ralston Foulkes Schroder Investment Deputy Chairman
Deputy/Chairman, Director Management International
Ltd.
Schroder Investment Director
Management (Europe) Ltd.
Schroder Capital Management Executive Vice President,
International Ltd. Director, Deputy Chairman
Schroder Asseily & Company, Director
Ltd.
Roger Goodchild SIM International Ltd. Finance Officer
Vice President/Controller-
London
Schroder Investment Finance Officer, Vice
Management North America President
Ltd.
Philip Hardy Schroder Capital Management Director, Investment Manager
Director International Ltd.
</TABLE>
40
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Sharon Louise Haugh Schroder Investment Member of Management
Chairman, Director Management Ltd. Committee
Schroder Investment Chairman, Director
Management North America
Ltd.
Schroder Capital Funds Trustee
Schroder Fund Advisors Inc. Chairman, Director
Susan B. Kenneally Schroder Capital Management Director, First Vice
Senior Vice President, International Ltd. President
Director
Barbara Brooke Manning Schroder Fund Advisors Inc. First Vice President
First Vice President, Chief
Compliance Officer
Catherine A. Mazza Schroder Fund Advisors Inc. Executive Vice President,
Senior Vice President, Director
Director
Schroder Series Trust II Vice President
Schroder Series Trust Vice President
Schroder Capital Funds II Vice President
Schroder Capital Funds Vice President
(Delaware)
Schroder Capital Funds Vice President
Schroder All Asia Fund Vice President
Thomas Melendez Schroder Mildesa Investment First Vice President,
Senior Vice President, Management SA Assistant Director
Director
Robert C. Michele -- --
Director, Managing Director
Connie Moak Mazur -- --
Director, Senior Vice
President
Paul M. Morris Schroder Fund Advisors Inc. Registered Representative
Director, Managing Director
Michael Mark Perelstein Schroder Capital Management Director, Senior Vice
Senior Investment Officer International Ltd. President
Gavin Douglas Lewis Ralston Schroder Capital Management Director, Senior Vice
Managing Director, Director International Ltd. President
David J. Ridgway -- --
Senior Vice President,
Director
</TABLE>
41
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
David Murray Salisbury Schroder Investment Chairman, Director
Director Management Ltd.
Schroder Investment Director
Management North America
Ltd.
Schroder Investment Director
Management (Europe) Ltd.
Schroders plc. Director
Schroder Property Investments Director
Limited
Schroder US Holdings Inc. Director
Schroder Emerging Countries Director
Fund plc.
Schroder All Asia Fund Vice Chairman, Director
Schroder Investment Director
Management (UK) Ltd.
Schroder Mediterranean Fund Alternate Director
Ltd.
Frances P. Selby -- --
Director, Senior Vice
President
Mark Julian Smith Schroder Investment Group Operations Director,
Executive Vice President, Management Limited Director
Director
Schroder Capital Management Senior Vice President,
International Ltd. Director
Schroder Series Trust President/Trustee
SCMCT India (Mauritius) Ltd. Director
Schroder Fund Advisors Inc. Senior Vice President,
Director
SIM Nominees Ltd. Director
Schroder Nominees Ltd. Director
Schroder Capital Funds President, Trustee
(Delaware)
Schroder Capital Funds President, Trustee
Schroder Capital Funds II President, Trustee
Schroder All Asia Fund Vice President
Schroder Investment Director
Management (Guernsey) Ltd.
</TABLE>
42
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Ellen B. Sullivan -- --
Senior Vice President,
Director
Nancy B. Tooke -- --
Executive Vice President,
Director
John Alexander Troiano Schroder Capital Management Chief Executive Officer,
Chief Executive Officer, International Ltd. Senior Vice
Director President/Managing Director
Schroder Capital Management Director
Inc.
Schroder Capital Funds Vice President
Ira L. Unschuld Schroder Capital Funds Vice President
Senior Vice President,
Director
Jan Kees Van Heusde Schroder Capital Management Director, First Vice
Senior Vice President, International Ltd. President
Director
Guy Varney Schroder Capital Management Director, First Vice
Senior Vice President, International Ltd. President
Director
Reza Vishkai Schroder Investment Divisional Director
Senior Vice President, Management Ltd.
Director
Schroder Capital Management Director, First Vice
International Ltd. President
Ash C. Williams Schroder Series Trust President
Executive Vice President,
Director
Thomas Jeremy Willoughby Schroder Investment Compliance Officer
Compliance Officer Management International
Ltd.
Schroder Capital Management Compliance Officer
International Ltd.
Schroder Investment Head of Compliance
Management Ltd.
The Personal Investment Director
Authority, Ltd.
</TABLE>
SECURITY CAPITAL GLOBAL CAPITAL MANAGEMENT GROUP, INC.
Security Capital Global Capital Management Group, Inc. is a Sub-adviser for
the Registrant's SEI VP Small Cap Value Fund. The principal business address of
Security Capital Global Capital Management
43
<PAGE>
Group, Inc. is 11 South LaSalle St., Chicago, IL 60603. Security Capital Global
Capital Management Group, Inc. is an investment adviser registered under the
Adviser Act.
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Security Capital Investment -- --
Research Incorporated
("SCIR")
Owner
Security Capital Group -- --
Incorporated
100% Owner of SCIR
Kevin W. Bedell -- --
Senior Vice President
Jeff A. Jacobson -- --
Managing Director
Anthony R. Manno, Jr. -- --
President, Director, and
Managing Director
Daniel F. Miranda -- --
Managing Director
Jeffrey C. Nellessen -- --
Vice President, Secretary,
Treasurer, and Controller
Kenneth D. Statz -- --
Managing Director
</TABLE>
SEI INVESTMENTS MANAGEMENT CORPORATION
SEI Investments Management Corporation ("SIMC") is the adviser for the SEI
VP Large Cap Value, SEI VP Large Cap Growth, SEI VP Small Cap value, SEI VP
Small Cap Growth, SEI VP Index, SEI VP Emerging Markets Equity, SEI VP
International Equity, SEI VP Core Fixed Income, SEI VP High Yield Bond, SEI VP
Bond Index, SEI VP International Fixed Income SEI VP Emerging Markets Debt
Funds. The principal address of SIMC is Oaks, Pennsylvania 19456. SIMC is an
investment adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Alfred P. West, Jr. SEI Investments Company Chairman, CEO
Chairman, CEO, Director
SEI Investments Director, Chairman of the Board of
Distribution Co. Directors
SEI Inc. (Canada) Director
SEI Ventures, Inc. Director, Chairman, President
SEI Funds, Inc. CEO, Chairman of the Board of
Directors
</TABLE>
44
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Rembrandt Financial Services Company Chairman of the Board of Directors
SEI Global Investment Corp. Director, CEO, Chairman
SEI Investments Global Management Chairman, CEO
(Cayman), Limited
SEI Capital AG Director, Chairman of the Board
SEI Global Capital Director, CEO, Chairman
Investments, Inc.
CR Financial Services Company Director, Chairman of the Board
CR Capital Resources, Inc. Director, Chairman of the Board
SEI Investments Mutual Fund Services Chairman, CEO
SEI Investments Fund Management Chairman, CEO
SEI Global Holdings (Cayman) Inc. Chairman, CEO
SEI Investments De Mexico Director
SEI Asset Korea Director
Carmen V. Romeo SEI Investments Company Director, Executive Vice President,
Executive Vice President, Director President-Investment Advisory Group
SEI Investments Director
Distribution Co.
SEI Trust Company Director
SEI Investments, Inc. Director, President
SEI Investments Developments, Inc. Director, President
SEI Funds, Inc. Director, Executive Vice President
Rembrandt Financial Services Company Director, Executive Vice President
SEI Global Capital Executive Vice President
Investments, Inc.
SEI Primus Holding Corp. Director, President
CR Financial Services Company Director
</TABLE>
45
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
CR Capital Resources, Inc. Director
SEI Investments Mutual Fund Services Executive Vice President
SEI Investments Fund Management Executive Vice President
Richard B. Lieb SEI Investments Company Director, Executive Vice President,
Director, Executive Vice President President-Investment Systems &
Services Division
SEI Investments Director, Executive Vice President
Distribution Co.
SEI Trust Company Director, Chairman of the Board
SEI Investments-Global Fund Services Director
Limited
CR Capital Resources, Inc. Director
SEI Investments Mutual Fund Services Executive Vice President
SEI Investments Fund Management Executive Vice President
Edward Loughlin SEI Investments Company Executive Vice President,
Executive Vice President President-Asset Management Division
SEI Trust Company Director
SEI Insurance Group, Inc. Director, President, Secretary
SEI Funds, Inc. Executive Vice President
SEI Advanced Capital Director, President
Management, Inc.
SEI Investments Mutual Fund Services Executive Vice President
SEI Investments Fund Management Executive Vice President
Primus Capital Advisors Company Director
Dennis J. McGonigle SEI Investments Company Executive Vice President
Executive Vice President
SEI Investments Executive Vice President
Distribution Co.
SEI Investments Mutual Fund Services Senior Vice President
</TABLE>
46
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
SEI Investments Fund Management Senior Vice President
Michael Arizin -- --
Senior Vice President, Managing
Director
Ed Daly -- --
Senior Vice President, Managing
Director
Leo J. Dolan, Jr. SEI Distribution Co. Senior Vice President
Senior Vice President
Rembrandt Financial Services Company Senior Vice President
SEI Investments Mutual Fund Services Senior Vice President
SEI Investments Fund Management Senior Vice President
Mick Duncan SEI Investments Mutual Fund Services Vice President, Team Leader
Senior Vice President, Managing
Director
SEI Investments Fund Management Vice President, Team Leader
Carl A. Guarino SEI Investments Company Senior Vice President
Senior Vice President
SEI Investments Distribution Company Senior Vice President
Rembrandt Financial Services Company Director, Vice President
SEI Global Investments Corp. Senior Vice President
SEI Global Investments (Cayman) Director
Limited
SEI Investments Global, Limited Director
SEI Global Holdings (Cayman) Inc. Director
SEI Investments Argentina S.A. Director
SEI Investments De Mexico Director
SEI Investments (Europe) Ltd. Director
Larry Hutchison SEI Investments Senior Vice President
Senior Vice President Distribution Co.
</TABLE>
47
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Robert S. Ludwig SEI Funds, Inc. Vice President
Senior Vice President, CIO
SEI Investments Mutual Fund Services Vice President, Team Leader
SEI Investments Fund Management Vice President, Team Leader
Jack May SEI Investments Senior Vice President
Senior Vice President Distribution Co.
James V. Morris -- --
Senior Vice President, Managing
Director
Steve Onofrio -- --
Senior Vice President, Managing
Director
Kevin P. Robins SEI Investments Company Senior Vice President, General
Senior Vice President, General Counsel, Assistant Secretary
Counsel, Secretary
SEI Investments Senior Vice President, General
Distribution Co. Counsel, Secretary
SEI Inc. (Canada) Senior Vice President, General
Counsel, Secretary
SEI Trust Company Director, Senior Vice President,
General Counsel, Assistant Secretary
SEI Investments, Inc. Senior Vice President, General
Counsel, Secretary
SEI Ventures, Inc. Senior Vice President, General
Counsel, Secretary
SEI Investments Developments, Inc. Senior Vice President, General
Counsel, Secretary
SEI Insurance Group, Inc. Senior Vice President, General
Counsel
SEI Funds, Inc. Senior Vice President, General
Counsel, Secretary
Rembrandt Financial Services Company Vice President, Assistant Secretary
SEI Global Investments Corp. Senior Vice President, General
Counsel, Secretary
SEI Advanced Capital Senior Vice President, General
Management, Inc. Counsel, Secretary
</TABLE>
48
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
SEI Global Capital Senior Vice President, General
Investments Inc. Counsel, Secretary
SEI Primus Holding Corp. Senior Vice President, General
Counsel, Secretary
CR Financial Services Company Senior Vice President, General
Counsel, Secretary
CR Capital Resources, Inc. Senior Vice President
SEI Investments Mutual Fund Services Senior Vice President, General
Counsel, Secretary
SEI Global Holdings (Cayman) Inc. Director, General Counsel, Secretary
Kenneth Zimmer -- --
Senior Vice President, Managing
Director
Robert Aller SEI Investments Distribution Company Vice President
Vice President
Timothy D. Barto SEI Investments Company Vice President, Assistant Secretary
Vice President, Assistant Secretary
SEI Investments Distribution Company Vice President, Assistant Secretary
SEI Investments, Inc. Vice President, Assistant Secretary
SEI Ventures, Inc. Vice President, Assistant Secretary
SEI Investments Developments, Inc. Vice President, Assistant Secretary
SEI Funds, Inc. Vice President, Assistant Secretary
SEI Global Investments Corp. Vice President, Assistant Secretary
SEI Advanced Capital Vice President, Assistant Secretary
Management, Inc.
SEI Global Capital Vice President, Assistant Secretary
Investments, Inc.
SEI Primus Holding Corp. Vice President, Assistant Secretary
SEI Investments Mutual Fund Services Vice President, Assistant Secretary
</TABLE>
49
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
SEI Investments Fund Management Vice President, Assistant Secretary
Jay Brown -- --
Vice President
Todd Cipperman SEI Investments Company Vice President, Assistant Secretary
Vice President, Assistant Secretary
SEI Investments Vice President, Assistant Secretary
Distribution Co.
SEI Trust Company Vice President, Assistant Secretary
SEI Investments, Inc. Vice President, Assistant Secretary
SEI Ventures, Inc. Vice President, Assistant Secretary
SEI Developments, Inc. Vice President, Assistant Secretary
SEI Funds, Inc. Vice President, Assistant Secretary
Rembrandt Financial Services Company Vice President, Assistant Secretary
SEI Global Investments Corp. Vice President, Assistant Secretary
SEI Advanced Capital Director, Vice President, Assistant
Management, Inc. Secretary
SEI Investments Global (Cayman), Director, Vice President, Assistant
Limited Secretary
SEI Global Capital Vice President, Assistant Secretary
Investments, Inc.
SEI Investments Global, Limited Director
SEI Primus Holding Corp. Vice President, Assistant Secretary
SEI Investments Mutual Fund Services Vice President, Assistant Secretary
SEI Investments Fund Management Vice President, Assistant Secretary
SEI Global Holdings (Cayman) Inc. Director, Vice President, Assistant
Secretary
SEI Investments (Europe) Ltd. Director
</TABLE>
50
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
S. Courtney E. Collier SEI Investments Vice President, Assistant Secretary
Vice President, Assistant Secretary Distribution Co.
SEI Trust Company Vice President, Assistant Secretary
SEI Investments, Inc. Vice President, Assistant Secretary
SEI Ventures, Inc. Vice President, Assistant Secretary
SEI Investments Developments, Inc. Vice President, Assistant Secretary
SEI Funds, Inc. Vice President, Assistant Secretary
SEI Global Investments Corp. Vice President, Assistant Secretary
SEI Advanced Capital Vice President, Assistant Secretary
Management, Inc.
SEI Global Capital Vice President, Assistant Secretary
Investments, Inc.
SEI Primus Holding Corp. Vice President, Assistant Secretary
SEI Investments Mutual Fund Services Vice President, Assistant Secretary
SEI Investments Fund Management Vice President, Assistant Secretary
Robert Crudup SEI Investments Distribution Company Vice President, Managing Director
Vice President, Managing Director
SEI Investments Mutual Fund Services Vice President, Managing Director
SEI Investments Fund Management Vice President, Managing Director
Richard A. Deak SEI Investments Company Vice President, Assistant Secretary
Vice President, Assistant Secretary
SEI Investments Distribution Company Vice President, Assistant Secretary
SEI Trust Company Vice President, Assistant Secretary
</TABLE>
51
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
SEI Investments, Inc. Vice President, Assistant Secretary
SEI Ventures, Inc. Vice President, Assistant Secretary
SEI Investments Developments, Inc. Vice President, Assistant Secretary
SEI Funds, Inc. Vice President, Assistant Secretary
SEI Global Investments Corp. Vice President, Assistant Secretary
SEI Advanced Capital Vice President, Assistant Secretary
Management, Inc.
SEI Global Capital Vice President, Assistant Secretary
Investments, Inc.
SEI Primus Holding Corp. Vice President, Assistant Secretary
SEI Investments Mutual Fund Services Vice President, Assistant Secretary
SEI Investments Fund Management Vice President, Assistant Secretary
Melissa Doran Rayer -- --
Vice President
Michael Farrell -- --
Vice President
James R. Foggo SEI Investments Company Vice President, Assistant Secretary
Vice President, Assistant Secretary
SEI Investments Distribution Company Vice President, Assistant Secretary
SEI Trust Company Vice President, Assistant Secretary
SEI Investments, Inc. Vice President, Assistant Secretary
SEI Ventures, Inc. Vice President, Assistant Secretary
SEI Investments Developments, Inc. Vice President, Assistant Secretary
SEI Funds, Inc. Vice President, Assistant Secretary
</TABLE>
52
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
SEI Global Investments Corp. Vice President, Assistant Secretary
SEI Advanced Capital Management Inc. Vice President, Assistant Secretary
SEI Global Capital Vice President, Assistant Secretary
Investments, Inc.
SEI Primus Holding Corp. Vice President, Assistant Secretary
SEI Investments Mutual Fund Services Vice President, Assistant Secretary
SEI Investments Fund Management Vice President, Assistant Secretary
Vic Galef SEI Investments Distribution Company Vice President, Managing Director
Vice President, Managing Director
SEI Investments Mutual Fund Services Vice President, Managing Director
SEI Investments Fund Management Vice President, Managing Director
Lydia A. Gavalis SEI Investments Company Vice President, Assistant Secretary
Vice President, Assistant Secretary
SEI Investments Distribution Company Vice President, Assistant Secretary
SEI Trust Company Vice President, Assistant Secretary
SEI Investments, Inc. Vice President, Assistant Secretary
SEI Ventures, Inc. Vice President, Assistant Secretary
SEI Investments Developments, Inc. Vice President, Assistant Secretary
SEI Funds, Inc. Vice President, Assistant Secretary
SEI Global Investments Corp. Vice President, Assistant Secretary
SEI Advanced Capital Vice President, Assistant Secretary
Management, Inc.
SEI Global Capital Vice President, Assistant Secretary
Investments, Inc.
</TABLE>
53
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
SEI Primus Holding Corp. Vice President, Assistant Secretary
SEI Investments Mutual Fund Services Vice President, Assistant Secretary
SEI Investments Fund Management Vice President, Assistant Secretary
Greg Gettinger SEI Investments Company Vice President
Vice President
SEI Investments Distribution Company Vice President
SEI Trust Company Vice President
SEI Investments, Inc. Vice President
SEI Ventures, Inc. Vice President
SEI Investments Developments, Inc. Vice President
SEI Funds, Inc. Vice President
SEI Global Investments Corp. Vice President
SEI Advanced Capital Vice President
Management, Inc.
SEI Global Capital Vice President
Investments, Inc.
SEI Primus Holding Corp. Vice President
SEI Investments Mutual Fund Services Vice President
SEI Investments Fund Management Vice President
Susan R. Hartley -- --
Vice President
Kathy Heilig SEI Inc. (Canada) Vice President, Treasurer
Vice President, Treasurer
SEI Investments Company Vice President, Treasurer, Chief
Accounting Officer
SEI Investments Distribution Company Vice President
SEI Trust Company Vice President, Treasurer
SEI Ventures, Inc Vice President, Treasurer
SEI Insurance Group, Inc. Vice President, Treasurer
SEI Realty Capital Corporation Vice President, Treasurer
</TABLE>
54
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Rembrandt Financial Services Company Vice President, Treasurer
SEI Global Investments Corp. Director, Vice President, Treasurer
SEI Advanced Capital Director, Vice President, Treasurer
Management, Inc.
SEI Investments Global (Cayman), Vice President, Treasurer
Limited
CR Capital Resources, Inc. Vice President, Treasurer
SEI Investments Mutual Fund Services Vice President, Treasurer
SEI Investments Fund Management Vice President, Treasurer
SEI Global Holdings (Cayman) Inc. Vice President, Treasurer
Kim Kirk SEI Investments Distribution Company Vice President, Managing Director
Vice President, Managing Director
SEI Investments-Global Fund Services Director
Limited
SEI Investments Mutual Fund Services Vice President, Managing Director
SEI Investments Fund Management Vice President, Managing Director
John Krzeminski SEI Investments Distribution Company Vice President, Managing Director
Vice President, Managing Director
SEI Investments Mutual Fund Services Vice President, Managing Director
SEI Investments Fund Management Vice President, Managing Director
Vicki Malloy SEI Investments Mutual Fund Services Vice President, Team Leader
Vice President, Managing Director
SEI Investments Fund Management Vice President, Team Leader
Christine M. McCullough SEI Investments Company Vice President, Assistant Secretary
Vice President, Assistant Secretary
</TABLE>
55
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
SEI Investments Distribution Company Vice President, Assistant Secretary
SEI Investments, Inc. Vice President, Assistant Secretary
SEI Ventures, Inc. Vice President, Assistant Secretary
SEI Investments Developments, Inc. Vice President, Assistant Secretary
SEI Funds, Inc. Vice President, Assistant Secretary
SEI Global Investments Corp. Vice President, Assistant Secretary
SEI Advanced Capital Vice President, Assistant Secretary
Management, Inc.
SEI Global Capital Vice President, Assistant Secretary
Investments, Inc.
SEI Primus Holding Corp. Vice President, Assistant Secretary
SEI Investments Mutual Fund Services Vice President, Assistant Secretary
SEI Investments Fund Management Vice President, Assistant Secretary
Carolyn McLaurin SEI Investments Distribution Company Vice President, Managing Director
Vice President, Managing Director
SEI Investments Mutual Fund Services Vice President, Managing Director
SEI Investments Fund Management Vice President, Managing Director
Mary Jean Melair -- --
Vice President
Roger Messina -- --
Vice President
Cynthia M. Parish SEI Investments Company Vice President, Assistant Secretary
Vice President, Assistant Secretary
SEI Investments Distribution Company Vice President, Assistant Secretary
SEI Trust Company Vice President, Assistant Secretary
</TABLE>
56
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
SEI Investments, Inc. Vice President, Assistant Secretary
SEI Ventures, Inc. Vice President, Assistant Secretary
SEI Investments Developments, Inc. Vice President, Assistant Secretary
SEI Funds, Inc. Vice President, Assistant Secretary
Rembrandt Financial Services Company Vice President, Assistant Secretary
SEI Global Investments Corp. Vice President, Assistant Secretary
SEI Advanced Capital Vice President, Assistant Secretary
Management, Inc.
SEI Global Capital Vice President, Assistant Secretary
Investments, Inc.
SEI Primus Holding Corp. Vice President, Assistant Secretary
SEI Investments Mutual Fund Services Vice President, Assistant Secretary
SEI Investments Fund Management Vice President, Assistant Secretary
SEI Global Holdings (Cayman) Inc. Vice President, Assistant Secretary
SEI Investments (Europe) Ltd. Director
Robert Prucnal -- --
Vice President
Daniel Spaventa SEI Investments Distribution Company Vice President
Vice President
Kathryn L. Stanton SEI Investments Company Vice President
Vice President
SEI Investments Vice President
Distribution Co.
CR Financial Services Company Secretary, Treasurer
CR Capital Resource, Inc. Secretary
SEI Investments Mutual Fund Services Vice President
SEI Investments Fund Management Vice President
</TABLE>
57
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Lynda J. Striegel SEI Investments Company Vice President, Assistant Secretary
Vice President, Assistant Secretary
SEI Investments Distribution Company Vice President, Assistant Secretary
SEI Investments, Inc. Vice President, Assistant Secretary
SEI Trust Company Vice President, Assistant Secretary
SEI Ventures, Inc. Vice President, Assistant Secretary
SEI Investments Developments, Inc. Vice President, Assistant Secretary
SEI Funds, Inc. Vice President, Assistant Secretary
SEI Global Investments Corp. Vice President, Assistant Secretary
SEI Advanced Capital Vice President, Assistant Secretary
Management, Inc.
SEI Global Capital Vice President, Assistant Secretary
Investments, Inc.
SEI Primus Holding Corp. Vice President, Assistant Secretary
SEI Investments Mutual Fund Services Vice President, Assistant Secretary
SEI Investments Fund Management Vice President, Assistant Secretary
Mary Vogan -- --
Vice President
Raymond B. Webster -- --
Vice President
Susan R. West -- --
Vice President, Managing Director
Lori L. White SEI Investments Vice President, Assistant Secretary
Vice President, Assistant Secretary Distribution Co.
SEI Trust Company Vice President, Assistant Secretary
</TABLE>
58
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
SEI Investments, Inc. Vice President, Assistant Secretary
SEI Ventures, Inc. Vice President, Assistant Secretary
SEI Investments Developments, Inc. Vice President, Assistant Secretary
SEI Funds, Inc. Vice President, Assistant Secretary
SEI Global Investments Corp. Vice President, Assistant Secretary
SEI Advanced Capital Vice President, Assistant Secretary
Management, Inc.
SEI Global Capital Vice President, Assistant Secretary
Investments, Inc.
SEI Primus Holding Corp. Vice President, Assistant Secretary
SEI Investments Mutual Fund Services Vice President, Assistant Secretary
SEI Investments Fund Management Vice President, Assistant Secretary
Mark S. Wilson -- --
Vice President
Wayne M. Withrow SEI Investments Vice President, Managing Director
Vice President, Managing Director Distribution Co.
SEI Investments Mutual Fund Services Vice President, Managing Director
SEI Investments Fund Management Vice President, Managing Director
</TABLE>
SG PACIFIC ASSET MANAGEMENT, INC.
SG Pacific Asset Management, Inc. ("SG Pacific") is a sub-adviser for the
Registrant's SEI VP International Equity and SEI VP Emerging Markets Equity
Funds. The principal business address of SG Pacific is 30 Wall Street, 8th
Floor, New York, New York 10005. SG Pacific is an investment adviser registered
under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Masatada Honmura SG Yamaichi Asset Management President
Director
Yoichi Kataoka SG Yamaichi Asset Management Managing Director
President, Director
</TABLE>
59
<PAGE>
SGY ASSET MANAGEMENT (SINGAPORE) LIMITED
SGY Asset Management (Singapore) Limited ("SGY") is a sub-adviser for the
Registrant's SEI VP International Equity and SEI VP Emerging Markets Equity
Funds. The principal address of SGY is 138 Robinson Road #13-01/05, Hong Leong
Center, Singapore, 068906. SGY is an investment adviser registered under the
Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Marco Sau Kwan Wong -- --
Director, CIO
Winson Kwan Ming Fong -- --
Senior Portfolio Manager
Laurent Michel Bertiau Societe Generale Asset Management Director, CEO
Managing Director, CEO (Asia) Ltd., Singapore
Akio Mizuta -- --
Director, COO
Phillippe Collas -- --
Director
Tokuo Ukon -- --
Director
Christian D'allest
Director
</TABLE>
SG YAMAICHI ASSET MANAGEMENT CO., LTD.
SG Yamaichi Asset Management Co., Ltd. ("SG Yamaichi") is a sub-adviser for
the Registrant's SEI VP International Equity Fund. The principal business
address of SG Yamaichi is 5-1. Nihombashi Kabutocho, Chuo-ku, Tokyo 103, Japan.
SG Yamaichi is an investment adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Masatada Honmura SG Pacific Asset Management Director
President
Katsumi Deguchi -- --
Executive Vice President
Michel Fromaget -- --
Executive Vice President
Masami Fukuoka -- --
Auditor
Naoshi Saito -- --
Managing Director
Shigeharu Shiraishi -- --
Managing Director
</TABLE>
60
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Teijiro Yamada -- --
Auditor
Yoichi Kataoka SG Pacific Asset Management President, Director
Managing Director
Christian D'allest Societe Generale Asset Management Head of International Network
Director
SGY Asset Management (Singapore) Director
Limited
Tomoko Sasahara -- --
Auditor
Tukuo Ukon SGY Asset Management (Singapore) Director
Executive Vice President Limited
Takeo Igeta -- --
Compliance Officer
Bruno Leroy -- --
Executive Officer
Hisatoshi Okawa -- --
Executive Officer
Akifumi Ohsawa -- --
Executive Officer
Osamu Sadasue -- --
Executive Officer
Minoru Matsuno -- --
Executive Officer
Hiroyoshi Nakagawa -- --
Investment Officer
Kazuyuki Kawarazaki -- --
Investment Officer
</TABLE>
61
<PAGE>
STRATEGIC FIXED INCOME, LLC
Strategic Fixed Income, LLC ("SFI") is a sub-adviser for the Registrant's
SEI VP International Fixed Income Fund. The principal business address of SFI is
1001 Nineteenth Street North, 17th Floor, Arlington, Virginia 22209. SFI is an
investment adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Gobi Investment, Inc. -- --
Manager
Strategic Investment Management -- --
(SIM)
Member
Kenneth A. Windheim -- --
President, Treasurer, CIO, CEO
Patricia M. Arcoleo -- --
Vice President, Secretary, COO
</TABLE>
TCW INVESTMENTS MANAGEMENT COMPANY
TCW Investments Management Company ("TCW") is an investment sub-adviser for
the Registrant's SEI VP Large Cap Growth Fund. The principal address of TCW is
865 S. Figuero Street, Suite 1800, Los Angeles, CA 90017. TCW is an investment
adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Alvin Robert Albe, Jr. TCW/Latin America Partners, Managing Director
Director, President & CEO L.L.C.
TCW Advisors, Inc. Director, Chairman &
President
TCW Asia Limited Director
TCW London International, Managing Director, Chief
Limited Administrative Officer & VP
TCW Asset Management Company Director/Exec. VP--Finance &
Admin.
Trust Company of the West Director/Exec. VP--Finance &
Admin.
The TCW Group, Inc. Exec. VP--Finance & Admin.
Mark Louis Attanasio TCW/Crescent Director, Managing
Group MD & CIO-- Mezzanine, L.L.C. Director & Portfolio
Fixed Income, Below Manager
Investment Grade
TCW Asset Management Company Director & Group Managing
Director & CIO--Below
Investment Grade Fixed
Income
</TABLE>
62
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Trust Company of the West Group Managing Director &
CIO--Below Investment Grade
Fixed Income
Crescent MACH I G.P. Director
Corporation
Philip Alan Barach TCW Advisors, Inc. Group Managing director &
Grp. MD & CIO-- CIO--Investment Grade Fixed
Fixed Income Investment Income
Grade
TCW Asset Management Company Director & Group Managing
director & CIO--Investment
Grade Fixed Income
Trust Company of the West Group Managing director &
CIO--Investment Grade Fixed
Income
Javier Weichers Baz TCW/Latin America Partners Managing Director
Managing Director, CIO-- L.L.C.
International
TCW London International, Director, President & CEO
Limited
TCW Asia Limited CIO--International
TCW Asset Management Company Director & Managing Director,
CIO--International &
Chairman, International
Asset Allocation Committee
Trust Company of the West Managing Director, CIO--
International & Chairman,
International Asset
Allocation Committee
Michael Edward Cahill TCW/Latin America General Counsel and Assistant
General Counsel, Sec. & Partners, L.L.C. Secretary
Managing Director
TCW/Crescent Mezzanine, Managing Director, General
L.L.C. Counsel & Secretary
TCW Advisors, Inc. Managing Director, General
Counsel & Secretary
TCW Asia Limited Director
TCW London International, Director & Managing Director,
Limited General Counsel, VP &
Assistant Secretary
TCW Asset Management Company Director, Managing Director,
General Counsel & Secretary
</TABLE>
63
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Trust Company of the West Managing Director, General
Counsel & Secretary
The TCW Group, Inc. Managing Director, General
Counsel & Secretary
Ernest Odin Ellison TCW Asset Management Company Chairman, Investment Policy
Ch., Investment Policy Committee
Committee
TCW London International, Director--Vice Chairman
Limited
The TCW Group, Inc. Director--Vice Chairman
Trust Company of the West Director--Vice Chairman,
Chairman, Investment Policy
Committee
TCW Special Credits Investment Oversight & Review
Committee
Investments/Approval/Review
Committee
Douglas Stephen Foreman TCW Asset Management Company Group Managing Director,
Group MD & CIO U.S. Equities Chief Investment Officer--
U.S. Equities
Trust Company of the West Group Managing Director,
Chief Investment Officer--
U.S. Equities
Robert Maxwell Hanisee TCW Asset Management Company Group Managing Director,
MD & IO--Private Client Chief Investment Officer--
Services Private Client Services
Trust Company of the West Managing Director, Chief
Investment Officer--Private
Client Services
Thomas Ernest Larkin, Jr. TCW Advisors, Inc. Director--Vice Chairman
Chairman of the Board
TCW Asset Management Company Director--Vice Chairman
Trust Company of the West Director and President
The TCW Group, Inc. Director, Exec. VP & Managing
Director
Hillary Gillian Darcy Lord TCW Advisors, Inc. Managing Director, CCO &
Managing Director, CCO, & Asst. Secretary
Asst. Secretary
The TCW Group, Inc. Managing Director, CCO &
Asst. Secretary
</TABLE>
64
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
TCW Asset Management Company Managing Director, CCO
Trust Company of the West Managing Director, CCO
William Charles Sonneborn TCW Advisors, Inc. Managing Director, CFO &
CFO, Managing Director, & Asst. Secretary
Asst. Sec.
TCW Asset Management Company Director, Managing Director,
CFO & Asst. Secretary
TCW/Crescent CFO, Managing Director
Mezzanine, L.L.C.
TCW London International, Managing Director, CFO
Limited
Trust Company of the West Managing Director, CFO &
Asst. Secretary
The TCW Group, Inc. Managing Director, CFO &
Asst. Secretary
TCW/Latin American CFO & Treasurer
Partners, L.L.C.
Marc Irwin Stern TCW/Latin America Managing Director
Director, Chairman Partners, L.L.C.
TCW/Crescent Director
Mezzanine, L.L.C.
TCW Advisors, Inc. Director, Vice Chairman
TCW Special Credits Investment Oversight & Review
Committee Member
TCW Asia Limited Director, Chairman
TCW London International, Director, Chairman, Chairman
Limited of the Board
TCW Asset Management Company President & Vice Chairman
The TCW Group, Inc. Director & President
Trust Company of the West Director, Exec. VP & Group
Managing Director
[INSERT WALL STREET ASSOCIATES]
</TABLE>
WELLINGTON MANAGEMENT COMPANY, LLP
Wellington Management Company, LLP ("Wellington Management") serves as an
investment adviser for each of the SEI VP Prime Obligation Fund Fund. The
principal address of Wellington Management is
65
<PAGE>
75 State Street, Boston, Massachusetts 02109. Wellington Management is an
investment adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION WITH CONNECTION WITH OTHER
INVESTMENT ADVISER NAME OF OTHER COMPANY COMPANY
- --------------------------------- ------------------------- --------------------------------
<S> <C> <C>
Kenneth Lee Abrams -- --
General Partner
Nicholas Charles Adams -- --
General Partner
Rand Charles Alexander -- --
General Partner
Deborah Louise Allison -- --
General Partner
James Halsey Averill -- --
General Partner
Karl E. Bandtel -- --
General Partner
Marie-Claude Petit Bernal -- --
General Partner
William Nicholas Booth -- --
General Partner
Paul Braverman -- --
General Partner
Robert A. Bruno -- --
General Partner
Pamela Dippel -- --
General Partner
Robert Wren Doran Wellington Trust Company, Director & Chairman of the Board
General Partner NA and of the Executive Committee
Charles Townsend Freeman -- --
General Partner
Laurie Allen Gabriel -- --
General Partner
Frank Joseph Gilday, III -- --
General Partner
John Herrick Gooch Wellington Management Partner
General Partner International
Wellington Trust Company, Director & Vice President
NA
Nicholas Peter Greville Wellington Management Partner
General Partner International
Paul J. Hammel -- --
General Partner
</TABLE>
66
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION WITH CONNECTION WITH OTHER
INVESTMENT ADVISER NAME OF OTHER COMPANY COMPANY
- --------------------------------- ------------------------- --------------------------------
<S> <C> <C>
William Claude Sandifer Hicks -- --
General Partner
Paul David Kaplan -- --
General Partner
John Charles Keogh -- --
General Partner
George Cabot Lodge, Jr. -- --
General Partner
Nancy T. Lukitsh Wellington Trust Company, Director & Vice President
General Partner NA
Mark T. Lynch -- --
General Partner
Christine Smith Manfredi -- --
General Partner
Patrick John McCloskey -- --
General Partner
Earl Edward McEvoy -- --
General Partner
Duncan Mathieu McFarland Wellington Management Partner
General Partner International
Wellington Trust Company, Director & Vice Chairman
NA
Paul Mulford Mecray, III -- --
General Partner
Matthew Edward Megargel -- --
General Partner
James Nelson Mordy -- --
General Partner
Diane Carol Nordin -- --
General Partner
Stephen T. O'Brien -- --
General Partner
Edward Paul Owens -- --
General Partner
Saul Joseph Pannell -- --
General Partner
Thomas Louis Pappas -- --
General Partner
David Minter Parker -- --
General Partner
</TABLE>
67
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION WITH CONNECTION WITH OTHER
INVESTMENT ADVISER NAME OF OTHER COMPANY COMPANY
- --------------------------------- ------------------------- --------------------------------
<S> <C> <C>
Jonathan Martin Payson Wellington Trust Company, Director & President
General Partner NA
Stephen Michael Pazuk Wellington Management Partner
General Partner International
Robert Douglas Rands -- --
General Partner
Eugene Edward Record, Jr. -- --
General Partner
James Albert Rullo -- --
General Partner
John Robert Ryan -- --
General Partner
Joseph Harold Schwartz -- --
General Partner
Theodore Shasta -- --
General Partner
Binkley Calhoun Shorts -- --
General Partner
Trond Skramstad -- --
General Partner
Catherine Anne Smith -- --
General Partner
Stephen Albert Soderberg -- --
General Partner
Brendan James Swords -- --
General Partner
Harriett Tee Taggart -- --
General Partner
Perry Marques Traquina -- --
General Partner
Gene Roger Tremblay -- --
General Partner
Mary Ann Tynan -- --
General Partner
Clare Villari -- --
General Partner
Ernst Hans von Metzach -- --
General Partner
James Leland Walters Wellington Trust Company, Director, Senior Trust Officer &
General Partner NA Trust Counsel
</TABLE>
68
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION WITH CONNECTION WITH OTHER
INVESTMENT ADVISER NAME OF OTHER COMPANY COMPANY
- --------------------------------- ------------------------- --------------------------------
<S> <C> <C>
Kim Williams -- --
General Partner
Francis Vincent Wisneski, Jr. -- --
General Partner
</TABLE>
WESTERN ASSET MANAGEMENT COMPANY
Western Asset Management Company ("Western") is a sub-adviser for the
Registrant's SEI VP Core Fixed Income Fund. The principal business address of
Western is 117 East Colorado Boulevard, Pasadena, California 91105. Western is
an investment adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER OTHER COMPANY OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Carl L. Eichstaedt -- --
Portfolio Manager
Kent S. Engel -- --
Vice Chairman
Keith J. Gardner -- --
Portfolio Manager
Scott F. Grannis -- --
Director & Economist
Ilene S. Harker -- --
Director of Admin & Controls
James W. Hirschmann III -- --
Director of Marketing
Randolph L. Kohn -- --
Director of Client Services
S. Kenneth Leech -- --
Director & CIO
W. Curtis Livingston -- --
Director & CEO
Raymond A. Mason Legg Mason, Inc. Chairman, President & CEO
Non-Employee Director
Legg Mason Wood Walker, Inc. Chairman, President & CEO
Ronald D. Mass -- --
Portfolio Manager
Edward A. Moody -- --
Director & Sr. Portfolio
Manager
James V. Nelson -- --
Director of Invest. Research
</TABLE>
69
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER OTHER COMPANY OTHER COMPANY
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Elisabeth N. Spector Legg Mason, Inc. Senior Vice President
Non-Employee Director
Legg Mason Wood Walker, Inc. Senior Vice President
Edward A. Taber III Legg Mason, Inc. Sr. Exec VP & Investment
Non-Employee Director Management
Legg Mason Wood Walker, Inc. Director & Sr. Executive Vice
President
Jeffrey D. Van Schaick -- --
Director & Sr. Research
Analyst
Stephen A. Walsh -- --
Director of Portfolio
Management
</TABLE>
WORLD ASSET MANAGEMENT, LLC
World Asset Management, LLC ("World") is a Sub-Adviser to the Fund's SEI VP
S&P 500 Index Fund. The principal business address of World is 255 Brown Street,
Suite 250, Birmingham, Michigan 48009-6208. World is an investment adviser
registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION WITH
INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------- -------------------------------- --------------------------------
<S> <C> <C>
Steven Arthur Albrech Vice
President, COO
Terry Harley Gardner
Vice President, CFO
Tom Bruce Johnson
CIO
Robert Joseph Kay Director of
Client Services
Theodore Duncan Miller Sr.
Portfolio Manger
Lee Paul Munder
CEO
James Christopher Robinson
Portfolio Manager
Lisa Ann Rosen
General Counsel
Robert Joseph Samrah
Portfolio Manager
</TABLE>
70
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION WITH
INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------- -------------------------------- --------------------------------
<S> <C> <C>
Kenneth Arthur Schluchter, III
Portfolio Manager
</TABLE>
ITEM 27. PRINCIPAL UNDERWRITERS:
(a) Furnish the name of each investment company (other than the Registrant)
for which each principal underwriter currently distributing the securities of
the Registrant also acts as a principal underwriter, distributor or investment
adviser.
Registrant's distributor, SEI Investments Distribution Co. (the
"Distributor"), acts as distributor for:
<TABLE>
<S> <C>
SEI Daily Income Trust July 15, 1982
SEI Liquid Asset Trust November 29, 1982
SEI Tax Exempt Trust December 3, 1982
SEI Index Funds July 10, 1985
SEI Institutional Managed Trust January 22, 1987
SEI Institutional International Trust August 30, 1988
The Advisors' Inner Circle Fund November 14, 1991
The Pillar Funds February 28, 1992
CUFUND May 1, 1992
STI Classic Funds May 29, 1992
First American Funds, Inc. November 1, 1992
First American Investment Funds, Inc. November 1, 1992
The Arbor Fund January 28, 1993
Boston 1784 Funds-Registered Trademark- June 1, 1993
The PBHG Funds, Inc. July 16, 1993
The Achievement Funds Trust December 27, 1994
Bishop Street Funds January 27, 1995
STI Classic Variable Trust August 18, 1995
ARK Funds November 1, 1995
Huntington Funds January 11, 1996
SEI Asset Allocation Trust April 1, 1996
TIP Funds April 28, 1996
First American Strategy Funds, Inc. October 1, 1996
HighMark Funds February 15, 1997
Armada Funds March 8, 1997
PBHG Insurance Series Fund, Inc. April 1, 1997
The Expedition Funds June 9, 1997
Alpha Select January 1, 1998
Oak Associates Funds February 27, 1998
The Nevis Funds, Inc. June 29, 1998
The Parkstone Group of Funds September 14, 1998
CNI Charter Funds April 1, 1999
Armada Advantage Fund May 1, 1999
Amerindo Funds, Inc. July 13, 1999
Huntington VA Fund October 15, 1999
Friends Ivory Funds December 16, 1999
</TABLE>
The Distributor provides numerous financial services to investment managers,
pension plan sponsors, and bank trust departments. These services include
portfolio evaluation, performance measurement
71
<PAGE>
and consulting services ("Funds Evaluation") and automated execution,
clearing and settlement of securities transactions ("MarketLink").
(b) Furnish the Information required by the following table with respect to
each director, officer or partner of each principal underwriter named in the
answer to Item 21 of Part B. Unless otherwise noted, the business address of
each director or officer is Oaks, PA 19456.
<TABLE>
<CAPTION>
POSITION AND OFFICE POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- ------------------------ -------------------------------------------- ---------------------
<S> <C> <C>
Alfred P. West, Jr. Director, Chairman of the Board of Directors --
Carmen V. Romeo Director --
Mark J. Held President & Chief Operating Officer --
Gilbert L. Beebower Executive Vice President --
Richard B. Lieb Director, Executive Vice President --
Dennis J. McGonigle Executive Vice President --
Robert M. Silvestri Chief Financial Officer & Treasurer --
Leo J. Dolan, Jr. Senior Vice President --
Carl A. Guarino Senior Vice President --
Larry Hutchison Senior Vice President --
Jack May Senior Vice President --
Hartland J. McKeown Senior Vice President --
Kevin P. Robins Senior Vice President --
Wayne M. Withrow Senior Vice President --
Patrick K. Walsh Senior Vice President --
Robert Aller Vice President --
Timothy D. Barto Vice President & Assistant Secretary Vice President &
Assistant Secretary
Todd Cipperman Senior Vice President & General Counsel Vice President &
Assistant Secretary
S. Courtney E. Collier Vice President & Assistant Secretary --
Robert Crudup Vice President & Managing Director --
Richard A. Denk Vice President & Assistant Secretary
Barbara Doyne Vice President --
Jeff Drennen Vice President --
Vic Galef Vice President & Managing Director --
Lydia A. Gavalis Vice President & Assistant Secretary Vice President &
Assistant Secretary
Greg Gettinger Vice President & Assistant Secretary --
Kathy Heilig Vice President --
Jeff Jacobs Vice President --
Samuel King Vice President --
Kim Kirk Vice President & Managing Director --
John Krzeminski Vice President & Managing Director --
Carolyn McLaurin Vice President & Managing Director --
Christine M. McCullough Vice President & Assistant Secretary Vice President &
Assistant Secretary
W. Kelso Morrill Vice President --
Mark Nagle Vice President Controller & Chief
Financial Officer
Joanne Nelson Vice President --
</TABLE>
72
<PAGE>
<TABLE>
<CAPTION>
POSITION AND OFFICE POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- ------------------------ -------------------------------------------- ---------------------
<S> <C> <C>
Cynthia M. Parrish Vice President & Assistant Secretary Vice President &
Assistant Secretary
Kim Rainey Vice President --
Rob Redican Vice President --
Maria Rinehart Vice President --
Mark Samuels Vice President & Managing Director --
Steve Smith Vice President --
Daniel Spaventa Vice President --
James R. Foggo Vice President & Assistant Secretary Vice President &
Assistant Secretary
Lynda J. Striegel Vice President & Assistant Secretary Vice President &
Assistant Secretary
Lori L. White Vice President & Assistant Secretary --
Wayne M. Withrow Vice President & Managing Director --
</TABLE>
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
Books or other documents required to be maintained by Section 31(a) of the
Investment Company Act of 1940, and the rules promulgated thereunder, are
maintained as follows:
(a) With respect to Rules 31a-1(a); 31a-1(b)(1); (2)(a) and (b); (3);
(6); (8); (12); and 31a-1(d), the required books and records will be
maintained at the offices of Registrant's Custodian:
First Union National Bank
Broad & Chestnut Streets
P.O. Box 7618
Philadelphia, Pennsylvania 19101
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
(b)/(c) With respect to Rules 31a-1(a); 31a-1(b)(1),(4); (2)(C) and (D);
(4); (5); (6); (8); (9); (10); (11); and 31a-1(f), the required books and
records are maintained at the offices of Registrant's Administrator:
SEI Investments Fund Management
Oaks, Pennsylvania 19456
(c) With respect to Rules 31a-1(b)(5), (6), (9) and (10) and 31a-1(f),
the required books and records are maintained at the principal offices of
the Registrant's Advisers:
SEI Investments Management Corporation
Oaks, Pennsylvania 19456
Acadian Asset Management
Two International Place
Boston, Massachusetts 02110
Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, New York 10105
73
<PAGE>
Artisan Partners Limited Partnership
1000 N. Water Street
Milwaukee, Wisconsin 53202
BlackRock Financial Management, Inc.
345 Park Avenue
30th Floor
New York, New York 10154
BlackRock International, Ltd.
7 Castle Street
Edinburgh, EH23AM
Scotland, U.K.
Capital Guardian Trust Company
630 5th Avenue, 36th Floor
New York, New York 10111
Coronation Asset Management (Proprietary) Limited
Boundary Terraces
1 Mariendahl Lane
Newlands, South Africa 7700
Credit Suisse Asset Management, LLC
One Citicorp Center
153 East 53rd Street
New York, New York 10022
Credit Suisse Asset Management Limited
Beaufort House
15 St. Botolph Street
London, England EC3A 7JJ
LSV Asset Management, L.P.
200 W. Madison Ave.
Chicago, Illinois 60606
Mellon Bond Associates, LLP
Mellon Bank Center
1735 Market Street
Room 610
Philadelphia, PA 19101
Mellon Equity Associates, LLP
500 Grant Street
Suite 4200
Pittsburgh, PA 15258
Morgan Stanley Dean Witter Investment Management Inc.
1221 Avenue of the Americas
New York, New York 10020
Nicholas-Applegate Capital Management
600 West Broadway, 29th Floor
San Diego, California 92101
74
<PAGE>
Nomura Corporate
Research and Asset Management
2 World Financial Center
Building B, 25th Floor
New York, New York 10281-1198
Oechsle International Advisors, LLC
One International Place
23rd Floor
Boston, Massachusetts 02110
Provident Investment Counsel, Inc.
300 North Lake Avenue
Penthouse
Pasadena, CA 91101
Robert W. Baird & Co., Incorporated
777 E. Wisconsin Avenue
Milwaukee, Wisconsin 53202
RS Investment Management, L.P.
388 Market Street
Suite 200
San Francisco, California 94104
SEI Investments Management Corporation
One Freedom Valley Drive
Oaks, PA 19456
Salomon Brothers Asset Management Inc
7 World Trade Center, Floor 38
New York, New York 10048
Sanford C. Bernstein & Co., Inc.
767 Fifth Avenue
New York, NY 10153-0185
Sawgrass Asset Management, LLC
4337 Pablo Oaks Court, Building 200
Jacksonville, FL 3224
Schroder Investment Management North America Inc.
787 Seventh Avenue, 34th Floor
New York, NY 10019-6091
SG Pacific Asset Management, Inc.
/SGY Asset Management (Singapore) Ltd.
/SG Yamaichi Asset Management Co., Ltd.,
30 Wall Street, 8th Floor
New York, New York 10005
Strategic Fixed Income, LLC
1001 Nineteenth Street North
Suite 1720
Arlington, VA 22209
TCW Funds Management, Inc.
865 S. Figueroa Street
Los Angeles, California 90017
75
<PAGE>
Wellington Management Company, LLP
75 State Street
Boston, MA 02109
Western Asset Management Company
117 East Colorado Boulevard
Pasadena, CA 91105
World Asset Management, LLC
255 Brown Street, Suite 250
Birmingham, MI 48009-6208
ITEM 29. MANAGEMENT SERVICES:
None
ITEM 30. UNDERTAKINGS:
None
76
<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 certifies that it
meets all of the requirements for effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused
this Post-Effective Amendment No. 2 to Registration Statement No. 333-70013 to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Oaks, Commonwealth of Pennsylvania on the 14th day of April, 2000.
<TABLE>
<S> <C> <C>
SEI INSURANCE PRODUCTS TRUST
By: /s/ EDWARD D. LOUGHLIN
---------------------------------------
Edward D. Loughlin
PRESIDENT & CHIEF EXECUTIVE OFFICER
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacity on the date(s) indicated.
<TABLE>
<C> <S> <C>
*
------------------------------------------- Trustee April 14, 2000
William M. Doran
*
------------------------------------------- Trustee April 14, 2000
F. Wendell Gooch
*
------------------------------------------- Trustee April 14, 2000
George J. Sullivan, Jr.
*
------------------------------------------- Trustee April 14, 2000
James M. Storey
*
------------------------------------------- Trustee April 14, 2000
Robert A. Nesher
*
------------------------------------------- Trustee April 14, 2000
Rosemarie B. Greco
/s/ EDWARD D. LOUGHLIN
------------------------------------------- President & Chief April 14, 2000
Edward D. Loughlin Executive Officer
/s/ MARK E. NAGLE
------------------------------------------- Controller & Chief April 14, 2000
Mark E. Nagle Financial Officer
</TABLE>
<TABLE>
<S> <C> <C> <C>
*By: /s/ EDWARD D. LOUGHLIN
--------------------------------------
Edward D. Loughlin
ATTORNEY-IN-FACT
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
NAME EXHIBIT
------------------------------------------------------------ ------------
<S> <C>
Agreement and Declaration of Trust of the Registrant, dated Ex-99.a
December 14, 1998, is incorporated by reference to
Exhibit (a) of Registrant's Registration Statement, filed
December 31, 1998.
By-Laws of the Registrant, is incorporated by reference to Ex-99.b
Exhibit (b) of Registrant's Registration Statement, filed
December 31, 1998.
Not Applicable. Ex-99.(c)
Investment Advisory Agreement between the Registrant and SEI Ex-99.(d)(1)
Investments Management Corporation ("SIMC") is
incorporated by reference to exhibit (d)(1) of
Pre-Effective Amendment No. 1 to Registrant's Registration
Statement on Form N-1A (File No. 333-70013) filed with the
SEC on October 12, 1999.
Form of Investment Sub-Advisory Agreements between SIMC and Ex-99.(d)(2)
[Sub-Advisor] is incorporated by reference to exhibit
(d)(2) of Pre-Effective Amendment No. 1 to Registrant's
Registration Statement on Form N-1A (File No. 333-70013)
filed with the SEC on October 12, 1999.
Investment Sub-Advisory Agreement between SIMC and Alliance (d)(3)
Capital Management, L.P. with respect to the SEI VP Large
Cap Growth Fund is filed herewith.
Investment Sub-Advisory Agreement between SIMC and Capital (d)(4)
Guardian Trust Company with respect to the SEI VP
International Equity Fund is filed herewith.
Investment Sub-Advisory Agreement between SIMC and Credit (d)(5)
Suisse Asset Management, LLC with respect to the SEI VP
High Yield Bond Fund is filed herewith.
Investment Sub-Advisory Agreement between SIMC and LSV Asset (d)(6)
Management, L.P. with respect to the SEI VP Large Cap
Value and SEI VP Small Cap Value Funds is filed herewith.
Investment Sub-Advisory Agreement between SIMC and Mellon (d)(7)
Equity Associates, LLP with respect to the SEI VP Large
Cap Value Fund is filed herewith.
Investment Sub-Advisory Agreement between SIMC and Mellon (d)(8)
Equity Associates, LLP with respect to the SEI VP Small
Cap Value Fund is filed herewith.
Investment Sub-Advisory Agreement between SIMC and Nicholas- (d)(9)
Applegate Capital Management with respect to the SEI VP
Emerging Markets Equity and SEI VP Small Cap Value Funds
is filed herewith.
Investment Sub-Advisory Agreement between SIMC and Oechsle (d)(10)
International Advisors, LLC with respect to the SEI VP
International Equity Fund is filed herewith.
Investment Sub-Advisory Agreement between SIMC and Provident (d)(11)
Investment Counsel, Inc. With respect to the SEI VP Large
Cap Growth Fund is filed herewith.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NAME EXHIBIT
------------------------------------------------------------ ------------
<S> <C>
Investment Sub-Advisory Agreement between SIMC and Robert W. (d)(12)
Baird & Co., Incorporated with respect to the SEI VP Core
Fixed Income Fund is filed herewith.
Investment Sub-Advisory Agreement between SIMC and Sawgrass (d)(13)
Asset Management, L.L.C. with respect to the SEI VP Small
Cap Growth Fund is filed herewith.
Investment Sub-Advisory Agreement between SIMC and Schroder (d)(14)
Investment Management North America Inc. with respect to
the SEI VP Emerging Market Equity Fund is filed herewith.
Investment Sub-Advisory Agreement between SIMC and Strategic (d)(15)
Fixed Income, LLC with respect to the SEI VP International
Fixed Income Fund is filed herewith.
Investment Sub-Advisory Agreement between SIMC and Wall (d)(16)
Street Associates with respect to the SEI VP Small Cap
Growth Fund is filed herewith.
Investment Sub-Advisory Agreement between SIMC and (d)(17)
Wellington Management Company, LLP with respect to the SEI
VP Prime Obligation Fund is filed herewith.
Investment Sub-Advisory Agreement between SIMC and Western (d)(18)
Asset Management Company with respect to the SEI VP Core
Fixed Income Fund is filed herewith.
Investment Sub-Advisory Agreement between SIMC and Salomon (d)(19)
Brothers Asset Management Inc with respect to the SEI VP
Emerging Markets Debt Fund is filed herewith.
Distribution Agreement between the Registrant and SEI Ex-99.(e)
Investments Distribution Co. is incorporated by reference
to exhibit (e) of Pre-Effective Amendment No. 1 to
Registrant's Registration Statement on Form N-1A (File No.
333-70013) filed with the SEC on October 12, 1999.
Not Applicable. Ex-99.(f)
Form of Custodian Agreement between the Registrant and First Ex-99.(g)(1)
Union National Bank is incorporated by reference to
exhibit (g)(1) of Pre-Effective Amendment No. 1 to
Registrant's Registration Statement on Form N-1A (File No.
333-70013) filed with the SEC on October 12, 1999.
Custodian Agreement between the Registrant and State Street Ex-99.(g)(2)
Bank and Trust Company is filed herewith.
Administration Agreement between the Registrant and SEI Ex-99.(h)(1)
Investments Fund Management is incorporated by reference
to exhibit (h)(1) of Pre-Effective Amendment No. 1 to
Registrant's Registration Statement on Form N-1A (File No.
333-70013) filed with the SEC on October 12, 1999.
Opinion and Consent of counsel, Morgan, Lewis & Ex-99.(i)
Bockius LLP, is filed herewith.
Opinion and Consent of Independent Public Accountants, is Ex-99.(j)
filed herewith.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NAME EXHIBIT
------------------------------------------------------------ ------------
<S> <C>
Not Applicable. Ex-99.(k)
Not Applicable. Ex-99.(n)
The Code of Ethics for SEI Investments Company is (p)(1)
incorporated by reference to Exhibit (p)(1) of
Post-Effective Amendment No. 41 to SEI Daily Income
Trust's Registration Statement on Form N-1A (File No.
2-77048) filed with the SEC March 31, 2000.
The Code of Ethics for SEI Insurance Products Trust is filed (p)(2)
herewith.
The Code of Ethics for Alliance Capital Management L.P. is (p)(3)
filed herewith.
The Code of Ethics for Capital Guardian Trust Company is (p)(4)
filed herewith.
The Code of Ethics for Credit Suisse Asset Management, LLC (p)(5)
is filed herewith.
The Code of Ethics for LSV Asset Management, L.P. is filed (p)(6)
herewith.
The Code of Ethics for Mellon Equity Associates, LLP is (p)(7)
filed herewith.
The Code of Ethics for Nicholas-Applegate Capital Management (p)(8)
is filed herewith.
The Code of Ethics for Oechsle International Advisors, LLC (p)(9)
is filed herewith.
The Code of Ethics for Provident Investment Counsel, Inc. to (p)(10)
be filed by later amendment.
The Code of Ethics for Robert W. Baird & Co., Incorporated (p)(11)
is filed herewith.
The Code of Ethics for RS Investment Management, L.P. is (p)(12)
filed herewith.
The Code of Ethics for Salomon Brothers Asset Management Inc (p)(13)
is filed herewith.
The Code of Ethics for Sanford C. Bernstein & Co., Inc. is (p)(14)
filed herewith.
The Code of Ethics for Sawgrass Asset Management, LLC is (p)(15)
filed herewith.
The Code of Ethics for Schroder Investment Management North (p)(16)
America Inc. is filed herewith.
The Code of Ethics for Strategic Fixed Income, L.L.C. is (p)(17)
filed herewith.
The Code of Ethics for Wall Street Associates is filed (p)(18)
herewith.
The Code of Ethics for Wellington Management Company, LLP is (p)(19)
filed herewith.
The Code of Ethics for Western Asset Management Company is (p)(20)
filed herewith.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NAME EXHIBIT
------------------------------------------------------------ ------------
<S> <C>
Powers of Attorney for Robert A. Nesher, William M. Doran, Ex-99.q
Mark E. Nagle, George J. Sullivan, Jr., James M. Storey
and Edward D. Loughlin are filed herewith.
</TABLE>
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSURANCE PRODUCTS TRUST
AGREEMENT made this 25th day of February, 2000, between SEI Investments
Management Corporation, (the "Adviser") and Alliance Capital Management L.P.
(the "Sub-Adviser").
WHEREAS, SEI Insurance Products Trust, a Massachusetts business trust
(the "Trust") is registered as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated March 29, 1999 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the SEI VP Large Cap Growth
Fund (the "Portfolio"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain
the Sub-Adviser to provide investment advisory services to the Adviser in
connection with the management of the Portfolio, and the Sub-Adviser is willing
to render such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and
the Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Portfolio entrusted to it hereunder,
including the purchase, retention and disposition of the Assets, in
accordance with the Portfolio's investment objectives, policies and
restrictions as stated in the Portfolio's prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall provide supervision of the Portfolio's
investments and, in consultation with and subject to the direction of
the Adviser, determine from time to time what investments and
securities will be purchased, retained or sold by the Portfolio, and
what portion of the assets will be invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement,
the Sub-Adviser shall act in conformity with the Trust's Declaration
of Trust (as defined herein) and the Prospectus and with the
instructions and directions of the Adviser and of the Board of
Trustees of the Trust and will conform to and comply with the
requirements of the 1940 Act, the Internal Revenue Code of 1986, and
all other applicable federal and state laws and regulations, as each
is amended from time to time. The Adviser agrees promptly to deliver
any amendment or supplement to the Prospectus to the Sub-Adviser on an
on-going basis, and until the Adviser delivers any such amendment or
supplement to its Sub-Adviser, the Sub-Adviser shall be fully
protected in relying on the Prospectus as previously furnished.
(c) The Sub-Adviser shall determine the securities to be purchased or sold
by the Portfolio and will place orders with or through such persons,
brokers or dealers to carry out the policy with
<PAGE>
respect to brokerage set forth in the Portfolio's Registration
Statement and Prospectus or as the Board of Trustees or the Adviser may
direct from time to time, in conformity with federal securities laws.
In executing Portfolio transactions and selecting brokers or dealers,
the Sub-Adviser will use its best efforts to seek on behalf of the
Portfolio the best overall terms available. In assessing the best
overall terms available for any transaction, the Sub-Adviser shall
consider all factors that it deems relevant, including the breadth of
the market in the security, the price of the security, the financial
condition and execution capability of the broker or dealer, and the
reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis. In evaluating the best overall
terms available, and in selecting the broker-dealer to execute a
particular transaction, the Sub-Adviser may also consider the brokerage
and research services (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934) provided to the Portfolio and/or
other accounts over which the Sub-Adviser or an affiliate of the
Sub-Adviser may exercise investment discretion. The Sub-Adviser is
authorized, subject to the prior approval of the Trust's Board of
Trustees, to pay to a broker or dealer who provides such brokerage and
research services a commission for executing a portfolio transaction
for the Portfolio which is in excess of the amount of commission
another broker or dealer would have charged for effecting that
transaction if, but only if, the Sub-Adviser determines in good faith
that such commission was reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer --
viewed in terms of that particular transaction or terms of the overall
responsibilities of the Sub-Adviser to the Portfolio. In addition, the
Sub-Adviser if authorized to allocate purchase and sale orders for
portfolio securities to brokers or dealers (including brokers and
dealers that are affiliated with the Sub-Adviser or the Trust's
principal underwriter) to take into account the sale of shares of the
Trust if the Sub-Adviser believes that the quality of the transaction
and the commission are comparable to what they would be with other
qualified firms. In no instance, however, will any Portfolio's
securities be purchased from or sold to the Sub-Adviser, the Trust's
principal underwriter, or any affiliated person of either the Trust,
the Sub-Adviser or the principal underwriter, acting as principal in
the transaction, except to the extent permitted by the Securities and
Exchange Commission ("SEC") and the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5),
(6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the
1940 Act and shall render to the Adviser or the Board of Trustees such
periodic and special reports as the Adviser or Board of Trustees may
reasonably request.
The Sub-Adviser shall keep the books and records required to be
maintained by the Sub-Adviser by this Agreement and shall timely
furnish to the Adviser all information relating to the Sub-Adviser's
services under this Agreement needed by the Adviser to keep the other
books and records of the Portfolio required by Rule 31a-1 under the
1940 Act. The Sub-Adviser shall also furnish to the Adviser any other
information that is required to be filed by the Adviser or the Trust
with the SEC or sent to shareholders under the 1940 Act (including the
rules adopted thereunder) or any exemptive or other relief that the
Adviser or the Trust obtains from the SEC. The Sub-Adviser agrees that
all records that it maintains on behalf of the Portfolio are property
of the Portfolio and the Sub-Adviser will surrender promptly
- 2 -
<PAGE>
to the Portfolio any of such records upon the Portfolio's request;
provided, however, that the Sub-Adviser may retain a copy of such
records. In addition, for the duration of this Agreement, the
Sub-Adviser shall preserve for the periods prescribed by Rule 31a-2
under the 1940 Act any such records as are required to be maintained by
it pursuant to this Agreement, and shall transfer said records to any
successor Sub-Adviser upon the termination of this Agreement (or, if
there is no successor Sub-Adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Portfolio's custodian on each
business day with information relating to all transactions concerning
the Portfolio's assets and shall provide such information and such
periodic or special reports as the Adviser or Board of Trustees may
reasonably request.
(f) The Adviser understands that the Sub-Adviser now acts, will continue to
act and may act in the future as investment manager or adviser to
fiduciary and other managed accounts, and as investment manager or
adviser to other investment companies, including any offshore
entities, or accounts, and the Portfolio has no objection to the
Sub-Adviser's so acting, provided that whenever the Portfolio and one
or more other investment companies or accounts managed or advised by
the Sub-Adviser have available funds for investment, investments
suitable and appropriate for each will be allocated in accordance with
a formula believed to be equitable to each company and account. The
Adviser recognizes that in some cases this procedure may adversely
affect the size of the position obtainable for the Portfolio. In
addition, the Adviser understands that the persons employed by the
Sub-Adviser to assist in the performance of the Sub-Adviser's duties
under this Agreement will not devote their full time to such service
and nothing contained in this Agreement shall be deemed to limit or
restrict the right of the Sub-Adviser or any affiliate of the
Sub-Adviser to engage in and devote time and attention to other
businesses or to render services of whatever kind in nature.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill
its commitment under this Agreement.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners,
officers or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have
responsibility for all services to be provided to the Portfolio
pursuant to the Advisory Agreement and shall oversee and review the
Sub-Adviser's performance of its duties under this Agreement; provided,
however, nothing herein shall be construed to relieve the Sub-Adviser
of responsibility for compliance with the Portfolio's investment
objectives, policies and restrictions, as provided in Section 1
hereunder.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of the Commonwealth of Massachusetts (such Agreement
and Declaration of Trust, as in effect on
- 3 -
<PAGE>
the date of this Agreement and as amended from time to time, herein
called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Portfolio.
(d) The Trust's most recent Registration Statement as filed with the SEC.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in Schedule A which
is attached hereto and made part of this Agreement. The fee will be
calculated based on the average monthly market value of investments
under management and will be paid to the Sub-Adviser monthly. The
Sub-Adviser may, in its discretion and from time to time, waive a
portion of its fee.
5. LIMITATION OF LIABILITY OF THE SUB-ADVISER. The Sub-Adviser shall not
be liable for any error of judgment or for any loss suffered by the
Adviser in connection with the performance of its obligations under
this Agreement, except a loss resulting from: (i) willful misfeasance,
bad faith or negligence on the Sub-Adviser's part in the performance of
its duties, or (ii) reckless disregard of its obligations and duties
under this Agreement, or (iii) a violation of law or any duty imposed
by federal or state law.
6. REPORTS. During the term of this Agreement, the Adviser agrees to
furnish the Sub-Adviser at its principal office all prospectuses,
proxy statements, reports to stockholders, sales literature or other
materials prepared for distribution to stockholders of the Portfolios,
the Trust or the public that refer to the Sub-Adviser or its clients
in any way prior to use thereof and not to use material if the
Sub-Adviser reasonably objects in writing within five business days
(or such other period as may be mutually agreed) after receipt
thereof. The Sub- Adviser's right to object to such materials is
limited to the portions of such materials that expressly relate to the
Sub-Adviser, its services and its clients. The Adviser agrees to use
its reasonable best efforts to ensure that materials prepared by its
employees or agents or its affiliates that refer to the Sub-Adviser or
its clients in any way are consistent with those materials previously
approved by the Sub-Adviser as referenced in the first sentence of
this paragraph. Sales literature may be furnished to the Sub-Adviser
by first class or overnight mail, facsimile transmission equipment or
hand delivery.
7. CHANGE IN THE SUB-ADVISER'S MEMBERSHIP. The Sub-Adviser agrees that it
shall notify the Adviser of any change in the membership of the general
partners of the Sub-Adviser within a reasonable time after such change.
8. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or
damages (including reasonable attorney's fees
- 4 -
<PAGE>
and other related expenses) howsoever arising from or in connection
with this Agreement or the performance by the Sub-Adviser of its duties
hereunder; provided, however, that the Sub-Adviser shall not be
required to indemnify or otherwise hold the Adviser harmless under this
Section 8 where the claim against, or the loss, liability or damage
experienced by the Adviser, is caused by or is otherwise directly
related to the Adviser's own willful misfeasance, bad faith or
negligence, or to the reckless disregard of its duties under this
Agreement.
9. DURATION AND TERMINATION. This Agreement shall become effective upon
its approval by the Trust's Board of Trustees and by the vote of a
majority of the outstanding voting securities of the Portfolio;
provided, however, that at any time the Adviser shall have obtained
exemptive relief from the SEC permitting it to engage a Sub-Adviser
without first obtaining approval of the Agreement from a majority of
the outstanding voting securities of the Portfolio(s) involved, the
Agreement shall become effective upon its approval by the Trust's
Board of Trustees. Any Sub-Adviser so selected and approved shall be
without the protection accorded by shareholder approval of an
investment adviser's receipt of compensation under Section 36(b) of
the 1940 Act.
This Agreement shall continue in effect for a period of more than two
years from the date hereof only so long as continuance is specifically
approved at least annually in conformance with the 1940 Act; provided,
however, that this Agreement may be terminated with respect to the
Portfolio: (a) by the Portfolio at any time, without the payment of any
penalty, by the vote of a majority of Trustees of the Trust or by the
vote of a majority of the outstanding voting securities of the
Portfolio, (b) by the Adviser at any time, without the payment of any
penalty, on not more than 60 days' nor less than 30 days' written
notice to the other party, or (c) by the Sub-Adviser at any time,
without the payment of any penalty, on 90 days' written notice to the
other party. This Agreement shall terminate automatically and
immediately in the event of its assignment, or in the event of a
termination of the Adviser's agreement with the Trust. As used in this
Section 9, the terms "assignment" and "vote of a majority of the
outstanding voting securities" shall have the respective meanings set
forth in the 1940 Act and the rules and regulations thereunder, subject
to such exceptions as may be granted by the SEC under the 1940 Act.
10. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed
as being inconsistent with the 1940 Act.
11. SEVERABILITY. Should any part of this Agreement be held invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and
their respective successors.
12. NOTICE: Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by
registered, certified or overnight mail, postage prepaid
- 5 -
<PAGE>
addressed by the party giving notice to the other party at the last
address furnished by the other party:
To the Adviser at: SEI Investments Management Corporation
One Freedom Valley Drive
Oaks, PA 19456
Attention: Legal Department
To the Sub-Adviser at: Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, NY 10105
Attention: Corporate Legal and
Attention: Christopher Toub SVP
13. NAMES. The Trust may use the names "Alliance Capital Management L.P.,"
"Alliance Capital Management," "Alliance Capital," or "Alliance" only
for so long as this Agreement or any extension, renewal or amendment
hereof remains in effect. At such times as this Agreement shall no
longer be in effect, the Trust shall cease to use such names or any
other name indicating that it is advised by or otherwise connected with
the Sub-Adviser.
14. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject
matter. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
A copy of the Declaration of Trust is on file with the Secretary of
State of the Commonwealth of Massachusetts, and notice is hereby given that the
obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of the Portfolio or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
- 6 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI INVESTMENTS MANAGEMENT CORPORATION ALLIANCE CAPITAL MANAGEMENT L.P.
By: /s/ Todd Cipperman By: Alliance Capital Management
-------------------------- Corporation, its General Partner
Name: Todd Cipperman
------------------------ By: /s/ Mark B. Manley
Title: Vice President ---------------------------------
----------------------- Name: Mark B. Manley
-------------------------------
Title: Assistant Secretary
------------------------------
- 7 -
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
ALLIANCE CAPITAL MANAGEMENT L.P.
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at the
greater of an annual rate of .20% of the average monthly market value of assets
of the Large Cap Growth Fund under management (determined by averaging the
market value as of the first and last business days of the month) calculated and
paid monthly or an annual minimum fee of $125,000. The difference (if any)
between the annual asset based fee of .20% and $125,000 will be paid to the
Sub-Adviser on an annual basis.
The fee payable to the Sub-Adviser pursuant to this schedule begins to accrue
from the date of effectiveness. If this agreement begins or terminates before
the end of any month, the fee for the period from such effective date to the end
of such month or from the beginning of such month to the date of termination, as
the case may be, shall be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs. Upon
termination, the amount of the annual minimum fee shall be determined on a
prorated basis according to the proportion of the year during which services
were rendered.
- 8 -
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSURANCE PRODUCTS TRUST
AGREEMENT made this 22nd day of February, 2000, between SEI Investments
Management Corporation, (the "Adviser") and Capital Guardian Trust Company (the
"Sub-Adviser").
WHEREAS, SEI Insurance Products Trust, a Massachusetts business trust
(the "Trust"), is registered as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated March 29, 1999, (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the SEI VP International
Equity Fund (the "Fund"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain
the Sub-Adviser to provide investment advisory services to the Adviser in
connection with the management of the Fund, and the Sub-Adviser is willing to
render such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and
the Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Fund entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the
Assets, in accordance with the Fund's investment objectives, policies
and restrictions as stated in the Fund's prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, subject to the direction of the Adviser,
determine from time to time what Assets will be purchased, retained or
sold by the Fund, and what portion of the Assets will be invested or
held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement,
the Sub-Adviser shall act in conformity with the Trust's Declaration
of Trust (as defined herein) and the Prospectus and with the
instructions and directions of the Adviser and of the Board of
Trustees of the Trust and will conform to and comply with the specific
provisions of the 1940 Act, the Internal Revenue Code of 1986, and all
other applicable federal and state laws and regulations, as each is
amended from time to time as are identified as the Sub-Adviser's
responsibility in the Fund's Compliance Manual to be mutually agreed
upon by the Adviser and the Sub-Adviser.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by
the Fund as provided in subparagraph (a) and will place orders with or
through such persons, brokers or dealers to carry out the policy with
respect to brokerage set forth in the Fund's Registration
<PAGE>
Statement (as defined herein) and Prospectus or as the Board of
Trustees or the Adviser may direct from time to time, in conformity
with federal securities laws. In executing Fund transactions and
selecting brokers or dealers, the Sub-Adviser will use its best efforts
to seek on behalf of the Fund the best overall terms available. In
assessing the best overall terms available for any transaction, the
Sub-Adviser shall consider all factors that it deems relevant,
including the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the
broker or dealer, and the reasonableness of the commission, if any,
both for the specific transaction and on a continuing basis. In
evaluating the best overall terms available, and in selecting the
broker-dealer to execute a particular transaction, the Sub-Adviser may
also consider the brokerage and research services provided (as those
terms are defined in Section 28(e) of the Securities Exchange Act of
1934). Consistent with any guidelines established by the Board of
Trustees of the Trust, the Sub-Adviser is authorized to pay to a broker
or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for the Fund which is
in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction if, but only if, the
Sub-Adviser determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer - - viewed in terms of that
particular transaction or terms of the overall responsibilities of the
Sub-Adviser to the Fund. In addition, the Sub-Adviser is authorized to
allocate purchase and sale orders for securities to brokers or dealers
(including brokers and dealers that are affiliated with the Adviser,
Sub-Adviser or the Trust's principal underwriter) to take into account
the sale of shares of the Trust if the Sub-Adviser believes that the
quality of the transaction and the commission are comparable to what
they would be with other qualified firms. In no instance, however, will
the Fund's Assets be purchased from or sold to the Adviser,
Sub-Adviser, the Trust's principal underwriter, or any affiliated
person of either the Trust, Adviser, the Sub-Adviser or the principal
underwriter, acting as principal in the transaction, except to the
extent permitted by the Securities and Exchange Commission ("SEC") and
the 1940 Act. The Adviser will periodically provide the Sub-Adviser
with a current list of all such affiliated persons, which list will be
relied upon by the Sub-Adviser.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5),
(6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the
1940 Act. The Sub-Adviser shall provide to the Adviser or the Board of
Trustees such periodic and special reports, balance sheets or
financial information, and such other information with regard to its
affairs as the Adviser or Board of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and
shall timely furnish to the Adviser all information relating to the
Sub-Adviser's services under this Agreement needed by the Adviser to
keep the other books and records of the Fund required by Rule 31a-1
under the 1940 Act. The Sub-Adviser shall also furnish to the Adviser
any other information relating to the Assets that is required to be
filed by the Adviser or the Trust with the SEC or sent to shareholders
under the 1940 Act (including the rules adopted thereunder) or any
exemptive or other relief that the Adviser or the Trust obtains from
the SEC. The Sub-Adviser agrees
2
<PAGE>
that all records that it maintains on behalf of the Fund are property
of the Fund and the Sub-Adviser will surrender promptly to the Fund any
of such records upon the Fund's request; provided, however, that the
Sub-Adviser may retain a copy of such records. In addition, for the
duration of this Agreement, the Sub-Adviser shall preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act any such records as
are required to be maintained by it pursuant to this Agreement, and
shall transfer said records to any successor sub-adviser upon the
termination of this Agreement (or, if there is no successor
sub-adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Fund's custodian on each business
day with information relating to all transactions concerning the Fund's
Assets and shall provide the Adviser with such information upon request
of the Adviser.
(f) The investment management services provided by the Sub-Adviser under
this Agreement are not to be deemed exclusive and the Sub-Adviser shall
be free to render similar services to others, as long as such services
do not impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill
its commitment under this Agreement.
(h) Provided that the Custodian timely provides all proxy materials to the
Sub-Adviser, the Sub-Adviser shall review all proxy solicitation
materials and be responsible for voting and handling all proxies in
relation to the securities held in the Fund. The Adviser shall instruct
the custodian and other parties providing services to the Fund to
promptly forward misdirected proxies to the Sub-Adviser.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners,
officers or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have
responsibility for all services to be provided to the Fund pursuant to
the Advisory Agreement and shall oversee and review the Sub-Adviser's
performance of its duties under this Agreement; provided, however, that
in connection with its management of the Assets, nothing herein shall
be construed to relieve the Sub-Adviser of responsibility for
compliance with the Trust's Prospectus, the instructions and directions
of the Board of Trustees of the Trust, and the specific provisions of
the 1940 Act, the Internal Revenue Code of 1986, and all other
applicable federal and state laws and regulations, as each is amended
from time to time as are identified as the Sub-Adviser's responsibility
in the Fund's Compliance Manual to be mutually agreed upon by the
Adviser and the Sub-Adviser.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of the Commonwealth of Massachusetts (such Agreement
and Declaration of Trust, as in effect on
3
<PAGE>
the date of this Agreement and as amended from time to time, herein
called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Fund.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by
the Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s)
which is attached hereto and made part of this Agreement. The fee will
be calculated based on the average monthly market value of the Assets
under the Sub-Adviser's management and will be paid to the Sub-Adviser
monthly. Except as may otherwise be prohibited by law or regulation
(including any then current SEC staff interpretation), the Sub-Adviser
may, in its discretion and from time to time, waive a portion of its
fee.
5. INDEMNIFICATION. Notwithstanding anything to the contrary herein, in
the absence of willful misconduct, bad faith, negligence or reckless
disregard of obligations and duties under this Agreement, the
Sub-Adviser shall not be subject to liability to the Adviser for any
act or omission in the course of rendering services under this
Agreement.
The Sub-Adviser agrees to indemnify and hold harmless the Adviser, any
affiliated person within the meaning of Section 2(a)(3) of the 1940 Act
("affiliated person") of the Adviser (other than the Sub-Adviser) and
each person, if any, who, within the meaning of Section 15 of the
Securities Act of 1933 (the "1933 Act"), controls ("controlling
person") the Adviser (collectively, the "Indemnified Adviser Parties")
against any and all losses, claims, damages, liabilities or litigation
(including reasonable legal and other expenses) to which the Adviser,
or such affiliated person or controlling person may become subject
under the 1933 Act, 1940 Act, the Investment Advisers Act of 1940 (the
"Advisers Act"), or under any other statute, at common law or
otherwise, which (1) may be based upon the willful misconduct, bad
faith or negligence by the Sub-Adviser, any of its employees or
representatives or any affiliate of or any person acting on behalf of
the Sub-Adviser (it being understood that broker/dealers are not deemed
to be acting on behalf of the Sub-Adviser) or (2) may be based upon any
untrue statement or alleged untrue statement of a material fact
contained in a registration statement or prospectus covering the shares
of the Fund or any amendment thereof or any supplement thereto or the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, if such a statement or omission was made with reasonable
reliance upon written information furnished to the Adviser or the Fund,
or any affiliated person of the Adviser or the Fund, by the Sub-Adviser
or any affiliated person of the Sub-Adviser supplied for the express
purpose of inclusion in such registration statement or prospectus;
provided, however, that in no case is the Sub-Adviser's indemnity in
favor of the Adviser or any affiliated person or controlling person of
the Adviser deemed to protect such person against any liability to
which any such person would otherwise be subject by reason of willful
misconduct, bad faith or negligence
4
<PAGE>
in the performance of its duties or by reason of its reckless disregard
of obligations and duties under this Agreement or under any law
applicable to the Adviser.
The Adviser agrees to indemnify and hold harmless the Sub-Adviser, its
affiliates, and their respective directors, officers, employees and
affiliated persons and controlling persons (collectively, the
"Indemnified Sub-Adviser Parties") against any and all losses, claims,
damages, liabilities or litigation (including reasonable legal and
other expenses) to which any of the Indemnified Sub-Adviser Parties may
become subject under the 1933 Act, 1940 Act, the Advisers Act, or under
any other statute, at common law or otherwise which does not require
the Sub-Adviser to provide an indemnity under the previous paragraph,
provided that none of the Indemnified Sub-Adviser Party has acted in a
manner that involves willful misconduct, bad faith or negligence in the
performance of its duties or by reason of its reckless disregard of
obligations and duties under this Agreement or under any law applicable
to the Sub-Adviser.
In order to provide for just and equitable contribution in
circumstances in which the indemnities provided above are for any
reason unenforceable or unavailable to or otherwise insufficient to
hold harmless an indemnified party, the Indemnified Adviser Parties and
the Indemnified Sub-Adviser Parties shall contribute to the aggregate
losses, claims, damages, liabilities and legal and other expenses based
upon the relative fault of the Indemnified Adviser Parties and the
Indemnified Sub-Adviser Parties shall be determined by reference to
amongst other things, whether the untrue or alleged untrue statement of
a material fact or the omission or alleged omission to state a material
fact or the inaccurate or alleged inaccurate representation and or
warranty relates to information supplied by the Indemnified Adviser
Parties or the Indemnified Sub-Adviser Parties.
6. DURATION AND TERMINATION. This Agreement shall become effective upon
its approval by the Trust's Board of Trustees and by the vote of a
majority of the outstanding voting securities of the Fund; provided,
however, that at any time the Adviser shall have obtained exemptive
relief from the Securities and Exchange Commission permitting it to
engage a Sub-Adviser without first obtaining approval of the Agreement
from a majority of the outstanding voting securities of the Fund(s)
involved, the Agreement shall become effective upon its approval by the
Trust's Board of Trustees. Any Sub-Adviser so selected and approved
shall be without the protection accorded by shareholder approval of an
investment adviser's receipt of compensation under Section 36(b) of the
1940 Act.
This Agreement shall continue in effect for a period of more than two
years from the date hereof only so long as continuance is specifically
approved at least annually in conformance with the 1940 Act; provided,
however, that this Agreement may be terminated with respect to the Fund
(a) by the Fund at any time, without the payment of any penalty, by the
vote of a majority of Trustees of the Trust or by the vote of a
majority of the outstanding voting securities of the Fund, (b) by the
Adviser at any time, without the payment of any penalty, on not more
than 60 days' nor less than 30 days' written notice to the Sub-Adviser,
or (c) by the Sub-Adviser at any time, without the payment of any
penalty, on 90 days' written notice to the Adviser. This Agreement
shall terminate automatically and immediately in the event
5
<PAGE>
of its assignment, or in the event of a termination of the Adviser's
agreement with the Trust. As used in this Section 6, the terms
"assignment" and "vote of a majority of the outstanding voting
securities" shall have the respective meanings set forth in the 1940
Act and the rules and regulations thereunder, subject to such
exceptions as may be granted by the SEC under the 1940 Act.
7. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed
as being inconsistent with the 1940 Act.
8. SEVERABILITY. Should any part of this Agreement be held invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and
their respective successors.
9. NOTICE: Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by
registered, certified or overnight mail, postage prepaid addressed by
the party giving notice to the other party at the last address
furnished by the other party:
To the Adviser at: SEI Investments Management Corporation
One Freedom Valley Road
Oaks, PA 19456
Attention: Legal Department
To the Sub-Adviser at: Capital Guardian Trust Company
333 South Hope Street
Los Angeles, CA 90071
Attention: Treasurer
10. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject
matter. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
11. ADVISER'S REPRESENTATIONS. The Adviser hereby warrants and represents
to the Sub-Adviser that (a) it has obtained all applicable licenses,
permits, registrations and approvals that may be required in order to
serve in its designated capacities with respect to the Trust, and shall
continue to keep current such licenses, permits, registrations and
approvals for so long as this Agreement is in effect; (b) it is not
prohibited by the 1940 Act or other applicable laws and regulations
from performing the services contemplated by this Agreement; (c) it
will immediately notify the Sub-Adviser of the occurrence of any event
that would disqualify it from serving in its designated capacities with
respect to the Trust; and (d) this Agreement
6
<PAGE>
has been duly and validly authorized, executed and delivered on behalf
of the Adviser and is valid and binding Agreement of the Adviser
enforceable in accordance with its terms.
12. USE OF NAME. The parties agree that the name "Capital Guardian Trust
Company", the names of the Sub-Adviser's affiliates within The Capital
Group Companies, Inc., and any derivative or logo or trade or service
mark, are the valuable property of the Sub-Adviser and its affiliates.
The Trust and the Adviser shall have the right to use such name(s),
derivatives, logos, trade or service marks only with the prior written
approval of the Sub-Adviser, which approval shall not be unreasonably
withheld so long as this Agreement is in effect. Upon termination of
this Agreement, the Trust and the Adviser shall forthwith cease to use
such name(s), derivatives, logos, trade or service marks. The Trust and
the Adviser agree that they will review with the Sub-Adviser any
advertisement, sales literature or notice prior to its use that makes
reference to the Sub-Adviser so that the Sub-Adviser may review the
context in which it is referred to, it being agreed that the
Sub-Adviser shall have no responsibility to ensure the adequacy of the
form or content of such materials for purposes of the 1940 Act or other
applicable laws and regulations. If the Trust, or the Adviser makes any
unauthorized use of the Sub-Adviser's name(s), derivatives, logos,
trade or service marks, the parties acknowledge that the Sub-Adviser
shall suffer irreparable harm for which monetary damages are inadequate
and thus, the Sub-Adviser shall be entitled to injunctive relief.
A copy of the Declaration of Trust is on file with the Secretary of
State of the Commonwealth of Massachusetts, and notice is hereby given that the
obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of the Fund or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI INVESTMENTS MANAGEMENT CORPORATION CAPITAL GUARDIAN TRUST COMPANY
By: /s/ Todd Cipperman By: /s/ Stephen E. Embs
-------------------------- ---------------------------
Name: Todd Cipperman Name: Stephen E. Embs
------------------------ -------------------------
Title: Vice President Title: Vice President
----------------------- ------------------------
7
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
CAPITAL GUARDIAN TRUST COMPANY
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
<TABLE>
<S> <C>
SEI VP International Equity Fund .75 of 1% of the first $25 million
.60 of 1% of the next $25 million
.425 of 1% of the next $200 million
.375 of 1% on assets over $250 million
</TABLE>
8
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSURANCE PRODUCTS TRUST
AGREEMENT made this 25th day of February, 2000, between SEI Investments
Management Corporation, (the "Adviser") and Credit Suisse Asset Management, LLC
(the "Sub-Adviser").
WHEREAS, SEI Insurance Products Trust, a Massachusetts business trust
(the "Trust"), is registered as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated March 29, 1999 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the SEI VP High Yield Bond
Fund (the "Fund"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain
the Sub-Adviser to provide investment advisory services to the Adviser in
connection with the management of the Fund, and the Sub-Adviser is willing to
render such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and
the Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Fund entrusted to it hereunder (the
"Assets") including the purchase, retention and disposition of the
Assets, in accordance with the Fund's investment objectives, policies
and restrictions as stated in the Fund's prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, in consultation with and subject to the
direction of the Adviser, determine from time to time what Assets will
be purchased, retained or sold by the Fund, and what portion of the
Assets will be invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement,
the Sub-Adviser shall act in conformity with the investment objectives,
policies and limitations with respect to the Fund set forth in the
Trust's Declaration of Trust (as defined herein) and the Prospectus and
with applicable instructions and directions of the Adviser and of the
Board of Trustees of the Trust and will conform to and comply with the
requirements of the 1940 Act, the Internal Revenue Code of 1986, and
all other applicable federal and state laws and regulations, as each is
amended from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by
the Fund as provided in subparagraph (a) and will place orders with or
through such persons, brokers or dealers including the Sub-Adviser or
affiliates thereof, in accordance with the policy with respect to
brokerage set forth in the Fund's Registration Statement and Prospectus
or as the Trust's
1
<PAGE>
Board of Trustees or the Adviser may direct from time to time, in
conformity with federal securities laws. In executing Fund transactions
and selecting brokers or dealers, the Sub-Adviser will use its best
efforts to seek on behalf of the Fund the best overall terms available.
In assessing the best overall terms available for any transaction, the
Sub-Adviser shall consider all factors that it deems relevant,
including the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the
broker or dealer, and the reasonableness of the commission, if any,
both for the specific transaction and on a continuing basis. In
evaluating the best overall terms available, and in selecting the
broker-dealer to execute a particular transaction the Sub-Adviser may
also consider the brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934)
provided to the Fund and/or other accounts over which the Sub-Adviser
or an affiliate of the Sub-Adviser may exercise investment discretion.
The Sub-Adviser is authorized to pay to a broker or dealer who provides
such brokerage and research services a commission for executing a fund
transaction for the Fund which is in excess of the amount of commission
another broker or dealer would have charged for effecting that
transaction if, but only if, the Sub-Adviser determines in good faith
that such commission was reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer - -
viewed in terms of that particular transaction or in terms of the
overall responsibilities of the Sub-Adviser to the Fund and the
accounts as to which the Sub-Adviser exercises investment discretion.
It is recognized that the services provided by such brokers or dealers
may be useful to the Sub-Adviser in connection with the Sub-Adviser's
services to other clients. In no instance, however, will any of the
Fund's Assets be purchased from or sold to the Adviser, Sub-Adviser,
the Trust's principal underwriter, or any affiliated person of either
the Trust, the Sub-Adviser, or the principal underwriter, acting as
principal in the transaction, except to the extent permitted by the
Securities and Exchange Commission and the 1940 Act. On occasions when
the Sub-Adviser deems the purchase or sale of a security to be in the
best interest of the Fund as well as other customers, the Sub-Adviser
may, to the extent permitted by applicable laws and regulations, but
shall not be obligated to, aggregate the securities to be sold or
purchased in order to obtain the best execution and lower brokerage
commissions, if any. In such event, allocation of the securities so
purchased or sold, as well as expenses incurred in the transaction,
will be made by the Sub-Adviser in the manner it considers to be fair
and equitable and consistent with its fiduciary obligation to the Fund,
and, if applicable, to other customers.
The Adviser acknowledges that in order to comply with federal
securities laws and related regulatory requirements, there may be
periods when the Sub-Adviser will not be permitted to initiate or
recommend certain types of transactions in the securities or issuers
for which affiliates of the Sub-Adviser are performing investment
banking services, and neither the Trust nor the Adviser will be advised
of that fact. For example, during certain periods when affiliates of
the Sub-Adviser are engaged in an underwriting or other distribution of
a company's securities, the Sub-Adviser may be prohibited from
purchasing or recommending the purchase of certain securities of that
company for its clients. Similarly, the Sub-Adviser may on occasion be
prohibited from selling or recommending the sale of securities of a
company for which affiliates are providing investment banking services.
2
<PAGE>
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5),
(6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the
1940 Act and shall render to the Adviser or the Trust's Board of
Trustees such periodic and special reports as the Adviser or the
Trust's Board of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and
shall timely furnish to the Adviser all information relating to the
Sub-Adviser's services under this Agreement needed by the Adviser to
keep the other books and records of the Fund required by Rule 31a-1
under the 1940 Act. The Sub-Adviser shall also furnish to the Adviser
any other information relating to the Assets that is required to be
filed by the Adviser or the Trust with the Securities and Exchange
Commission ("SEC") or sent to shareholders under the 1940 Act
(including the rules adopted thereunder) or any exemptive or other
relief that the Adviser or the Trust obtains from the SEC. The
Sub-Adviser agrees that all records that it maintains on behalf of the
Fund are property of the Fund and the Sub-Adviser will surrender
promptly to the Fund any of such records upon the Fund's request;
provided, however, that the Sub-Adviser may retain a copy of such
records. In addition, for the duration of this Agreement, the
Sub-Adviser shall preserve for the periods prescribed by Rule 31a-2
under the 1940 Act any such records as are required to be maintained by
it pursuant to this Agreement, and shall transfer said records to any
successor sub-adviser upon the termination of this Agreement (or, if
there is no successor sub-adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Fund's custodian on each business day
with information relating to all transactions concerning the Fund's
Assets and shall provide the Adviser with such information upon request
of the Adviser.
(f) The investment management services provided by the Sub-Adviser under
this Agreement are not to be deemed exclusive and the Sub-Adviser shall
be free to render similar services to others, as long as such services
do not impair the services rendered to the Adviser or the Trust. The
Sub-Adviser may give advice, and take action, with respect to any of
its other clients that may differ from the advice given, or the time or
nature of action taken, with respect to the Fund. The Sub-Adviser shall
have no obligation to purchase or sell for the Fund or to recommend for
purchase or sale by the Portfolio, any securities that the Sub-Adviser,
its principals, affiliates or employees may purchase for themselves or
for any other clients.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill
its commitment under this Agreement.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's officers or
employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have
responsibility for all services to
3
<PAGE>
be provided to the Fund pursuant to the Advisory Agreement and shall
oversee and review the Sub-Adviser's performance of its duties under
this Agreement; provided, however, that in connection with its
management of the Assets, nothing herein shall be construed to relieve
the Sub-Adviser of responsibility for compliance, with respect to the
Fund, with the Trust's Declaration of Trust (as defined herein), the
Prospectus, the instructions and directions of the Board of Trustees of
the Trust, the requirements of the 1940 Act, the Internal Revenue Code
of 1986, and all other applicable federal and state laws and
regulations, as each is amended from time to time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of the Commonwealth of Massachusetts (such Agreement
and Declaration of Trust, as in effect on the date of this Agreement
and as amended from time to time, herein called the "Declaration of
Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Fund.
Copies of any amendments to the above documents will be furnished
promptly to the Sub-Adviser.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by
the Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule
which is attached hereto and made part of this Agreement. The fee will
be calculated based on the average monthly market value of the Assets
under the Sub-Adviser's management and will be paid to the Sub-Adviser
monthly. Except as may otherwise be prohibited by law or regulation
(including any then current SEC staff interpretation), the Sub-Adviser
may, in its discretion and from time to time, waive a portion of its
fee.
5. LIMITATION OF LIABILITY OF THE SUB-ADVISER. The Sub-Adviser shall not
be liable for any error of judgment or for any loss suffered by the
Adviser in connection with the performance of its obligations under
this Agreement, except a loss resulting from a breach of fiduciary duty
with respect to the receipt of compensation for services (in which case
any award of damages shall be limited to the period and the amount set
forth in Section 36(b)(3) of the 1940 Act), or a loss resulting from
willful misfeasance, bad faith or negligence on the Sub-Adviser's part
in the performance of its duties or from reckless disregard of its
obligations and duties under this Agreement, except as may otherwise be
provided under provisions of applicable state law which cannot be
waived or modified hereby.
The Sub-Adviser shall not be responsible for any loss incurred by
reason of any act or
4
<PAGE>
omission of any broker-dealer; provided, however, that the Sub-Adviser
shall use reasonable care in its selection and use of brokers in
effecting transactions for the Fund. The Sub-Adviser shall have no
obligation to seek to obtain any material non-public ("inside")
information about any issuer of securities, nor to purchase or sell, or
to recommend for purchase or sale, for the Fund the securities of any
issuer on the basis of any such information as may come into its
possession.
The Adviser acknowledges and agrees that the Sub-Adviser makes no
representation and warranty, express or implied, that any level of
performance or investment results will be achieved by the Fund or that
the Fund will perform comparably with any standard or index, including
other clients of the Sub-Adviser whether public or private.
6. REPORTS. During the term of this Agreement, the Adviser agrees to
furnish the Sub-Adviser at its principal office all prospectuses, proxy
statements, reports to stockholders, sales literature or other
materials prepared for distribution to stockholders of the Funds, the
Trust or the public that 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 within five business days (or
such other period as may be mutually agreed) after receipt thereof. The
Sub- Adviser's right to object to such materials is limited to the
portions of such materials that expressly relate to the Sub-Adviser;
its services and its clients. The Adviser agrees to use its reasonable
best efforts to ensure that materials prepared by its agents or its
affiliates that refer to the Sub-Adviser or its clients in any way are
consistent with those materials previously approved by the Sub-Adviser
as referenced in the first sentence of this paragraph. Sales literature
may be furnished to the Sub-Adviser by first class or overnight mail,
facsimile transmission equipment or hand delivery.
7. PORTFOLIO COMPOSITION. The Adviser shall provide (or cause the Trust's
custodian to provide) timely information to the Sub-Adviser regarding
such matters as the composition of the Assets and cash available for
investment in the Portfolio and cash requirements (with respect to the
redemption of Fund shares) and such other information as the parties
may reasonably agree upon.
8. EXPENSES. The Sub-Adviser shall bear expenses incurred by it in
connection with its duties hereunder, including payment of compensation
of and office space for its officers and employees engaged in providing
services hereunder, but shall not be responsible for any expenses of
the Trust.
9. CUSTODY. The cash and assets of the Fund shall be held by the Trust's
Custodian (the "Custodian"), which the Adviser hereby represents has
agreed to act as custodian for the Fund. The Sub-Adviser shall at no
time have custody or physical control of the Assets in the Fund. In
addition, the Sub-Advisor shall not be liable for any act or omission
of the Custodian. The Sub-Adviser shall give instructions to the
Custodian in writing or orally (at the discretion of the Custodian) and
confirmed in writing as soon as practicable thereafter. The Adviser
shall instruct the Custodian to provide the Sub-Adviser with such
periodic reports concerning the status of the Fund as the Sub-Adviser
and the Adviser may agree from
5
<PAGE>
time to time. The Adviser shall provide the Sub-Adviser with a copy of
the Fund's agreement with the Custodian and any modification thereto
and will notify the Sub-Adviser in advance of a change in the
Custodian.
10. REPRESENTATIONS AND WARRANTIES. The Adviser represents and warrants to
the Sub-Adviser that (a) the Adviser has the authority to act on behalf
of the Trust and has and will continue to convey to the Sub-Adviser all
relevant information regarding the Trust and the Fund including, but
not limited to, any relevant investment restrictions of the Trust and
the Fund; (b) this Agreement has been duly authorized, executed and
delivered by the Adviser and constitutes its valid and binding
obligation, enforceable in accordance with its terms; (c) no
governmental authorizations, approvals, consents or filings are
required in connection with the execution, delivery or performance of
this Agreement by the Adviser; (d) the execution, delivery and
performance of this Agreement by the Adviser will not violate or result
in any default under the Adviser's certificate of incorporation or
by-laws (or equivalent constituent documents), any contract or other
agreement to which the Adviser is a party or by which its assets may be
bound or any statute or any rule, regulation or order of any government
agency or body; (e) the Assets of the Fund do not and will not
constitute assets of any employee benefit plan within the meaning of
Section 3(3) of the Employee Retirement Security Act of 1974 or Section
4975(e) of the Internal Revenue Code of 1986 and this Agreement and the
transactions contemplated hereby will not constitute an investment by a
"benefit plan investor" within the meaning of DOL Reg. Section
2510.3-101; and (f) the Adviser has received a copy of Part II of the
Sub-Adviser's Form ADV as most recently filed with the SEC.
11. DIRECTIONS TO SUB-ADVISER. All directions by or on behalf of the
Adviser to the Sub-Adviser shall be in writing signed either (a) by a
director or officer of the Adviser, or (b) by a duly authorized agent
of the Adviser. The Sub-Adviser shall be fully protected in relying
upon any direction signed in the appropriate manner with respect to any
instruction, direction or approval of the Adviser. The Sub-Adviser
shall also be fully protected when acting upon any instrument,
certificate or paper the Sub-Adviser reasonably believes to be genuine
and to be signed or presented by the proper or persons. The Sub-Adviser
shall be under no duty to make any investigation or inquiry as to any
statement contained in any such writing and may accept the same as
conclusive evidence of the truth and accuracy of the statements therein
contained.
12. PROXIES, TENDER OFFERS, CLASS ACTIONS, ETC. Subject to any other
written instructions of the Adviser, the Sub-Adviser is hereby
appointed the Adviser's agent and attorney-in-fact on behalf of the
Fund in its discretion to vote, tender or convert any of the Assets; to
execute proxies, waivers, consents, account documentation, and to
participate in or consent to any class action, plan of reorganization,
merger, combination, consolidation, liquidation or similar plan with
reference to the Assets; and the Sub-Adviser shall not incur any
liability to the Adviser or the Fund by reason of any exercise of, or
failure to exercise, any such discretion. Notwithstanding the
provisions of this Section 12, if the Sub-Adviser determines that it,
or any of its affiliates, has an adverse or potentially adverse
interest with respect to the vote or other requested action, the
Sub-Adviser shall so inform the Adviser, which shall
6
<PAGE>
thereupon become responsible for the determination on such vote or
other action.
13. INDEMNIFICATION. (a) The Adviser shall indemnify and hold harmless the
Sub-Adviser, its officers, directors, employees, agents and each
person, if any, who controls the Adviser within the meaning of Section
15 of the 1933 Act (any and all such person shall be referred to as
"Sub-Adviser Indemnified Party") from and against any and all claims,
losses, liabilities or damages (including reasonable attorney's fees
and other related expenses) howsoever arising from or in connection
with this Agreement or the performance of the Adviser of its duties
hereunder; provided, however, that the Adviser shall not be required to
indemnify or otherwise hold any particular Sub-Adviser Indemnified
Party harmless under this Section 13 where the claim against, or the
loss, liability or damage experienced by the Sub-Adviser Indemnified
Party, is caused by or is otherwise directly related to Adviser
Indemnified Party's own willful misfeasance, bad faith or negligence,
or to the reckless disregard of its duties under this Agreement.
(b) The Sub-Adviser shall indemnify and hold harmless the Adviser, its
officers, directors, employees, agents and each person, if any, who
controls the Adviser within the meaning of Section 15 of the 1933 Act
(any and all such person shall be referred to as "Adviser Indemnified
Party") from and against any and all claims, losses, liabilities or
damages (including reasonable attorney's fees and other related
expenses) howsoever arising from or in connection with this Agreement
or the performance of the Sub-Adviser of its duties hereunder;
provided, however, that the Sub-Adviser shall not be required to
indemnify or otherwise hold any particular Adviser Indemnified Party
harmless under this Section 13 where the claim against, or the loss,
liability or damage experienced by the Adviser Indemnified Party, is
caused by or is otherwise directly related to Adviser Indemnified
Party's own willful misfeasance, bad faith or negligence, or to the
reckless disregard of its duties under this Agreement.
14. DURATION AND TERMINATION. This Agreement shall become effective as of
the date hereof.
This Agreement shall continue in effect until the earlier of (i) a
period of two years from the date hereof only so long as continuance is
specifically approved in conformance with the 1940 Act or (ii) the
approval by a majority of the outstanding voting securities of the Fund
of an Investment Sub-Advisory Agreement with substantially the same
terms and conditions except with respect to compensation to the
Sub-Adviser; provided, however, that this Agreement may be terminated
with respect to the Fund (a) by the Fund at any time, without the
payment of any penalty, by the vote of a majority of Trustees of the
Trust or by the vote of a majority of the outstanding voting securities
of such Fund, (b) by the Adviser at any time, without the payment of
any penalty, on not more than 60 days' nor less than 30 days' written
notice to the Sub-Adviser, or (c) by the Sub-Adviser at any time,
without the payment of any penalty, on 90 days' written notice to the
Adviser. This Agreement shall terminate automatically and immediately
in the event of its assignment, or in the event of a termination of the
Adviser's agreement with the Trust. As used in this Section 14, the
terms "assignment" and "vote of a majority of the outstanding voting
securities" shall have the respective meanings set forth in the 1940
Act and the rules and regulations thereunder, subject to such
7
<PAGE>
exceptions as may be granted by the SEC under the 1940 Act.
15. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed
as being inconsistent with the 1940 Act.
16. SEVERABILITY. Should any part of this Agreement be held invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and
their respective successors.
17. NOTICE: Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by
registered, certified or overnight mail, postage prepaid addressed by
the party giving notice to the other party at the last address
furnished by the other party:
To the Adviser at: SEI Investments Management Corporation
One Freedom Valley Road
Oaks, PA 19456
Attention: Legal Department
To the Sub-Adviser at: Credit Suisse Asset
Management, LLC
153 East 53rd Street
New York, NY 10022
Attention: President
18. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject
matter. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
8
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI INVESTMENTS MANAGEMENT CORPORATION CREDIT SUISSE ASSET MANAGEMENT, LLC
By: /s/ Todd Cipperman By: /s/ signature
------------------------------------ --------------------------------
Name: Todd Cipperman Name: Hal Liebes
---------------------------------- ------------------------------
Title: Vice President Title: [title]
--------------------------------- -----------------------------
9
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
CREDIT SUISSE ASSET MANAGEMENT, LLC
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate of up to:
<TABLE>
<S> <C>
SEI Insurance Products Trust
SEI VP High Yield Bond Fund 0.28%
</TABLE>
10
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSURANCE PRODUCTS TRUST
AGREEMENT made this 31st day of March, 2000, by and among SEI
Investments Management Corporation (the "Adviser") and LSV Asset Management,
L.P. (the "Sub-Adviser").
WHEREAS, SEI Insurance Products Trust, a Massachusetts business trust
(the "Trust") is registered as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated March 29, 1999 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the SEI VP Large Cap Value
and SEI VP Small Cap Value Funds (the "Funds"), each of which is a series of the
Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain
the Sub-Adviser to provide investment advisory services to the Adviser in
connection with the management of the Funds, and the Sub-Adviser is willing to
render such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and
the Trust's Board of Trustees, the Sub-Adviser shall manage the
investment operations of the Funds and the composition of the Funds,
including the purchase, retention and disposition of securities and other
assets, in accordance with each Fund's investment objectives, policies
and restrictions as stated in each Fund's prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall provide supervision of each Fund's investments and
determine from time to time what investments and securities will be
purchased, retained or sold by the Funds, and what portion of the assets
will be invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement,
the Sub-Adviser shall act in conformity with the Trust's Declaration of
Trust (as defined herein) and the Prospectus and with the instructions
and directions of the Adviser and of the Board of Trustees of the Trust
and will conform to and comply with the requirements of the 1940 Act, the
Internal Revenue Code of 1986, and all other applicable federal and state
laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the securities to be purchased or sold by
the Funds and will place orders with or through such persons, brokers or
dealers to carry out the policy with respect to brokerage set forth in
the Funds' Registration Statement (as defined herein) and Prospectus or
as the Board of Trustees or the Adviser may direct from time to time, in
conformity with federal securities laws. In executing Fund transactions
and selecting
<PAGE>
brokers or dealers, the Sub-Adviser will use its best efforts to seek on
behalf of the Funds the best overall terms available. In assessing the
best overall terms available for any transaction, the Sub-Adviser shall
consider all factors that it deems relevant, including the breadth of the
market in the security, the price of the security, the financial
condition and execution capability of the broker or dealer, and the
reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis. In evaluating the best overall
terms available, and in selecting the broker-dealer to execute a
particular transaction the Sub-Adviser may also consider the brokerage
and research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) provided to the Funds and/or other
accounts over which the Sub-Adviser or an affiliate of the Sub-Adviser
may exercise investment discretion. The Sub-Adviser is authorized,
subject to the prior approval of the Trust's Board of Trustees, to pay to
a broker or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for any of the Funds
which is in excess of the amount of commission another broker or dealer
would have charged for effecting that transaction if, but only if, the
Sub-Adviser determines in good faith that such commission was reasonable
in relation to the value of the brokerage and research services provided
by such broker or dealer viewed in terms of that particular transaction
or terms of the overall responsibilities of the Sub-Adviser to the Funds.
In addition, the Sub-Adviser if authorized to allocate purchase and sale
orders for portfolio securities to brokers or dealers (including brokers
and dealers that are affiliated with the Sub-Adviser or the Trust's
principal underwriter) to take into account the sale of shares of the
Trust if the Sub-Advisor believes that the quality of the transaction and
the commission are comparable to what they would be with other qualified
firms. In no instance, however, will any Fund's securities be purchased
from or sold to the Sub-Adviser, the Trust's principal underwriter, or
any affiliated person of either the Trust, the Sub-Adviser or the
principal underwriter, acting as principal in the transaction, except to
the extent permitted by the Securities and Exchange Commission and the
1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to the
Funds' portfolio transactions required by subparagraphs (b)(5), (6), (7),
(9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act and
shall render to the Adviser or Board of Trustees such periodic and
special reports as the Adviser or Board of Trustees may reasonably
request.
The Sub-Adviser shall keep the Funds' books and records required to be
maintained by the Sub-Adviser of this Agreement and shall timely furnish
to the Adviser all information relating to the Sub-Adviser's services
under this Agreement needed by the Adviser to keep the other books and
records of the Funds required by Rule 31a-1 under the 1940 Act. The
Sub-Adviser shall also furnish to the Adviser any other information that
is required to be filled by the Adviser or the Trust with the Securities
and Exchange Commission ("SEC") or sent to shareholders under the 1940
Act (including the rules adopted thereunder) or any exemptive or other
relief that the Adviser or the Trust obtains from the SEC. The
Sub-Adviser agrees that all records that it maintains on behalf of the
Funds are property of the Funds and the Sub-Adviser will surrender
promptly to the Funds any of such records upon the Funds' request;
provided, however, that the Sub-Adviser may retain a copy of such
records. In addition, for the duration of this Agreement, the Sub-Adviser
shall preserve for the periods prescribed by Rule 31a-2 under the 1940
Act any such records as are required
<PAGE>
to be maintained by it pursuant to this Agreement, and shall transfer
said records to any successor Sub-Adviser upon the termination of his
Agreement (or, if there is no successor Sub-Adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Funds' custodian on each business day
with information relating to all transactions concerning the Funds'
assets and shall provide the Adviser with such information upon request
of the Adviser.
(f) The investment management services provided by the Sub-Adviser under this
Agreement are not to be deemed exclusive and the Sub-Adviser shall be
free to render similar services to others, as long as such services do
not impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub- Adviser's ability to fulfill
its commitment under this Agreement.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners,
officers or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Funds pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's performance of
its duties under this Agreement; provided, however, that nothing herein
shall be construed to relieve the Sub-Adviser of responsibility for
compliance with the Funds' investment objectives, policies, and
restrictions, as provided in Section 1 hereunder.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of the Commonwealth of Massachusetts (such Agreement
and Declaration of Trust, as in effect on the date of this Agreement and
as amended from time to time, herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Funds.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s)
which is attached hereto and made part of this Agreement. The fee will be
calculated based on the average monthly market value of investments under
management and will be paid to the Sub-Adviser monthly. The Sub-Adviser
may, in its discretion and from time to time, waive a portion of its fee.
<PAGE>
5. LIMITATION OF LIABILITY OF THE SUB-ADVISER. The Sub-Adviser shall not be
liable for any error of judgment or for any loss suffered by the Adviser
in connection with performance of its obligations under this Agreement,
except a loss resulting from a breach of fiduciary duty with respect to
the receipt of compensation for services (in which case any award of
damages shall be limited to the period and the amount set forth in
Section 36(b)(3) of the 1940 Act), or a loss resulting from willful
misfeasance, bad faith or negligence on the Sub-Adviser's part in the
performance of its duties or from reckless disregard of its obligations
and duties under this Agreement, except as may otherwise be provided
under provisions of applicable state law which cannot be waived or
modified hereby.
6. REPORTS. During the term of this Agreement, the Adviser agrees to
furnish the Sub-Adviser at its principal office all prospectuses, proxy
statements, reports to stockholders, sales literature or other materials
prepared for distribution to stockholders of the Funds, the Trust or the
public that refer to the Sub-Adviser or its clients in any way prior to
use thereof and not to use material if the Sub-Adviser reasonably objects
in writing within five business days (or such other period as may be
mutually agreed) after receipt thereof. The Sub-Adviser's right to object
to such materials is limited to the portions of such materials that
expressly relate to the Sub-Adviser, its services and its clients. The
Adviser agrees to use its reasonable best efforts to ensure that
materials prepared by its employees or agents or its affiliates that
refer to the Sub-Adviser or its clients in any way are consistent with
those materials previously approved by the Sub-Adviser as referenced in
the first sentence of this paragraph. Sales literature may be furnished
to the Sub-Adviser by first class or overnight mail, facsimile
transmission equipment or hand delivery.
7. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses liabilities or
damages (including reasonable attorney's fees and other related expenses)
howsoever arising from or in connection with this Agreement or the
performance by the Sub-Adviser of its duties hereunder; provided,
however, that the Sub-Adviser shall not be required to indemnify or
otherwise hold the Adviser harmless under this Section 7 where the claim
against, or the loss, liability or damage experienced by the Adviser, is
caused by or is otherwise directly related to the Adviser's own willful
misfeasance, bad faith or negligence, or to the reckless disregard of its
duties under this Agreement.
8. DURATION AND TERMINATION. This Agreement shall become effective upon its
approval by the Trust's Board of Trustees and by the vote of a majority
of the outstanding voting securities of the Funds; provided, however,
that at any time the Adviser shall have obtained exemptive relief from
the SEC permitting it to engage a Sub-Adviser without first obtaining
approval of the Agreement from a majority of the outstanding voting
securities of the Fund(s) involved, the Agreement shall become effective
upon its approval by the Trust's Board of Trustees. Any Sub-Adviser so
selected and approved shall be without the protection accorded by
shareholder approval of an investment adviser's receipt of compensation
under Section 36(b) of the 1940 Act.
This Agreement shall continue in effect for a period of more than two
years from the date hereof only so long as continuance is specifically
approved at least annually in
<PAGE>
conformance with the 1940 Act; provided, however, that this Agreement may
be terminated with respect to the Funds (a) by the Funds at any time,
without the payment of any penalty, by the vote of a majority of Trustees
of the Trust or by the vote of a majority of the outstanding voting
securities of such Fund, (b) by the Adviser at any time, without the
payment of any penalty, on not more than 60 days' nor less than 30 days'
written notice to the other party, or (c) by the Sub- Adviser at any
time, without the payment of any penalty, on 90 days' written notice to
the other party. This Agreement shall terminate automatically and
immediately in the event of its assignment, or in the event of a
termination of the Adviser's agreement with the Trust. As used in this
Section 8, the terms "assignment" and "vote of a majority of the
outstanding voting securities" shall have the respective meanings set
forth in the 1940 Act and the rules and regulations thereunder, subject
to such exceptions as may be granted by the Commission under the 1940
Act.
9. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
10. SEVERABILITY. Should any part of this Agreement be held invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their
respective successors.
11. NOTICE: Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by
registered, certified or overnight mail, postage prepaid addressed by the
party giving notice to the other party at the last address furnished by
the other party:
To the Adviser at: SEI Investments Management Corporation
One Freedom Valley Drive
Oaks, PA 19456
Attention: Legal Department
To the Sub-Adviser at: LSV Asset Management, L.P.
200 W. Madison Avenue
Chicago, IL 60606
Attention: President
12. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject
matter. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of
the Commission, whether of special
<PAGE>
or general application, such provision shall be deemed to incorporate the
effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first
written above.
SEI Investments Management Corporation LSV Asset Management, L.P.
By: /s/ Todd Cipperman By: /s/ Tremaine Atkinson
------------------------------------ -----------------------------
Title: Senior Vice President Title: COO
--------------------------------- --------------------------
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
LSV ASSET MANAGEMENT, L.P.
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
<TABLE>
<S> <C>
SEI VP Large Cap Value Fund 0.20%
SEI VP Small Cap Value Fund 0.50%
</TABLE>
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSURANCE PRODUCTS TRUST
AGREEMENT made this 2nd day of February, 2000, by and among SEI
Investments Management Corporation, (the "Adviser") and Mellon Equity
Associates, LLP, (the "Sub-Adviser").
WHEREAS, SEI Insurance Products Trust, a Massachusetts business trust
(the "Trust"), is registered as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated March 29, 1999 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the SEI VP Large Cap Value
Fund (the "Portfolio"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain
the Sub-Adviser to provide investment advisory services to the Adviser in
connection with the management of the Portfolio, and the Sub-Adviser is willing
to render such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and
the Trust's Board of Trustees, the Sub-Adviser shall manage the
investment operations of the Portfolio and the composition of the
Portfolio, including the purchase, retention and disposition of
securities and other assets, in accordance with the Portfolio's
investment objectives, policies and restrictions as stated in the
Portfolio's prospectus and statement of additional information, as
currently in effect and as amended or supplemented from time to time
(referred to collectively as the "Prospectus"), and subject to the
following:
(a) The Sub-Adviser shall provide supervision of the Portfolio's
investments and determine from time to time what investments and
securities will be purchased, retained or sold by the Portfolio, and
what portion of the assets will be invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement,
the Sub-Adviser shall act in conformity with the Trust's Declaration of
Trust (as defined herein) and the Prospectus and with the instructions
and directions of the Adviser and of the Board of Trustees of the Trust
and will conform to and comply with the requirements of the 1940 Act,
the Internal Revenue Code of 1986, and all other applicable federal and
state laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the securities to be purchased or sold
by the Portfolio and will place orders with or through such persons,
brokers or dealers to carry out the policy with respect to brokerage
set forth in the Portfolio's Registration Statement and Prospectus or
as the Board of Trustees or the Adviser may direct from time to time,
in conformity with federal securities laws. In executing Portfolio
transactions and selecting
<PAGE>
brokers or dealers, the Sub-Adviser will use its best efforts to seek
on behalf of the Portfolio the best overall terms available. In
assessing the best overall terms available for any transaction, the
Sub-Adviser shall consider all factors that it deems relevant, which
may include the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the
broker or dealer, and the reasonableness of the commission, if any,
both for the specific transaction and on a continuing basis. In
evaluating the best overall terms available, and in selecting the
broker-dealer to execute a particular transaction, the Sub-Adviser may
also consider the brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934)
provided to the Portfolio and/or other accounts over which the
Sub-Adviser or an affiliate of the Sub-Adviser may exercise investment
discretion. The Sub-Adviser is authorized, subject to prior approval of
the Trust's Board of Trustees, to pay to a broker or dealer who
provides such brokerage and research services a commission for
executing a portfolio transaction for any of the Portfolios which is in
excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if, but only if, the Sub-Adviser
determines in good faith that such commission was reasonable in
relation to the value of the brokerage and research services provided
by such broker or dealer -- viewed in terms of that particular
transaction or terms of the overall responsibilities of the Sub-Adviser
to the Portfolio. In addition, the Sub-Adviser is authorized to
allocate purchase and sale orders for portfolio securities to brokers
or dealers (including brokers and dealers that are affiliated with the
Sub-Adviser or the Trust's principal underwriter) to take into account
the sale of shares of the Trust if the Sub-Adviser believes that the
quality of the transaction and the commission are comparable to what
they would be with other qualified firms. In no instance, however, will
the Portfolio's securities be purchased from or sold to the
Sub-Adviser, the Trust's principal underwriter, or any affiliated
person of either the Trust, the Sub-Adviser or the principal
underwriter, acting as principal in the transaction, except to the
extent permitted by the Securities and Exchange Commission ("SEC") and
the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
the Portfolio's portfolio transactions required by subparagraphs
(b)(5), (6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1
under the 1940 Act and shall render to the Adviser or the Board of
Trustees such periodic and special reports as the Adviser or Board of
Trustees may reasonably request.
The Sub-Adviser shall keep the Portfolio's books and records required
to be maintained by the Sub-Adviser of this Agreement and shall timely
furnish to the Adviser all information relating to the Sub-Adviser's
services under this Agreement needed by the Adviser to keep the other
books and records of the Portfolio required by Rule 31a-1 under the
1940 Act. The Sub-Adviser shall also furnish to the Adviser any other
information that is required to be filed by the Adviser or the Trust
with the SEC or sent to shareholders under the 1940 Act (including the
rules adopted thereunder) or any exemptive or other relief that the
Adviser or the Trust obtains from the SEC. The Sub-Adviser agrees that
all records that it maintains on behalf of the Portfolio are property
of
2
<PAGE>
the Portfolio and the Sub-Adviser will surrender promptly to the
Portfolio any of such records upon the Portfolio's request; provided,
however, that the Sub-Adviser may retain a copy of such records. In
addition, for the duration of this Agreement, the Sub-Adviser shall
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
any such records as are required to be maintained by it pursuant to
this Agreement, and shall transfer said records to any successor
Sub-Adviser upon the termination of this Agreement (or, if there is no
successor Sub-Adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Portfolio's custodian on each
business day with information relating to all transactions concerning
the Portfolio's assets and shall provide the Adviser with such
information upon request of the Adviser.
(f) The investment management services provided by the Sub-Adviser under
this Agreement are not to be deemed exclusive and the Sub-Adviser shall
be free to render similar services to others, as long as such services
do not impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill
its commitment under this Agreement.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners,
officers or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have
responsibility for all services to be provided to the Portfolio
pursuant to the Advisory Agreement and shall oversee and review the
Sub-Adviser's performance of its duties under this Agreement; provided,
however, that nothing herein shall be construed to relieve the
Sub-Adviser of responsibility for compliance with the Portfolio's
investment objectives, policies, and restrictions, as provided in
Section 1 hereunder. The Adviser hereby covenants to promptly provide
the Sub-Adviser with copies of any amendment or supplement to the
Portfolio's Registration Statement as well as all applicable trading
guidelines and procedures established for the Portfolio.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of the Commonwealth of Massachusetts (such Agreement
and Declaration of Trust, as in effect on the date of this Agreement
and as amended from time to time, herein called the "Declaration of
Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Fund.
3
<PAGE>
(d) The Adviser hereby covenants to promptly furnish the Sub-Adviser with
copies of any amendments or supplements to such documents.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in Schedule A which
is attached hereto and made part of this Agreement. The fee will be
calculated based on the average monthly market value of the investments
under management and will be paid to the Sub-Adviser monthly. The
Sub-Adviser may, in its discretion and from time to time, waive a
portion of its fee.
5. LIMITATION AND LIABILITY OF THE SUB-ADVISER. The Sub-Adviser shall not
be liable for any error of judgment or for any loss suffered by the
Adviser in connection with performance of its obligations under this
Agreement, except a loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services (in which case any
award of damages shall be limited to the period and the amount set
forth in Section 36(b)(3) of the 1940 Act), or a loss resulting from
willful misfeasance, bad faith or negligence on the Sub-Adviser's part
in the performance of its duties or from reckless disregard of its
obligations and duties under this Agreement, except as may otherwise be
provided under provisions of applicable state law which cannot be
waived or modified hereby.
6. REPORTS. During the term of this Agreement, the Adviser agrees to
furnish the Sub-Adviser at its principal office all prospectuses,
proxy statements, reports to stockholders, sales literature or other
materials prepared for distribution to stockholders of the Portfolios,
the Trust or the public that refer to the Sub-Adviser or its clients in
any way prior to use thereof and not to use material if the Sub-Adviser
reasonably objects in writing within five business days (or such other
period as may be mutually agreed) after receipt thereof. The
Sub-Adviser's right to object to such materials is limited to the
portions of such materials that expressly relate to the Sub-Adviser,
its services and its clients. The Adviser agrees to use its reasonable
best efforts to ensure that materials prepared by its employees or
agents or its affiliates that refer to the Sub-Adviser or its clients
in any way are consistent with those materials previously approved by
the Sub-Adviser as referenced in the first sentence of this paragraph.
Sales literature may be furnished to the Sub-Adviser by first class or
overnight mail, facsimile transmission equipment or hand delivery.
7. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or
damages (including reasonable attorney's fees and other related
expenses) howsoever arising from or in connection with the performance
by the Sub-Adviser of its duties under this Agreement; provided,
however, that the Sub-Adviser shall not be required to indemnify or
otherwise hold the Adviser harmless under this Section 7 where the
claim against, or the loss, liability or damage experienced by the
Adviser, is caused by or is otherwise directly related to the Adviser's
own willful misfeasance, bad faith or negligence, or to the reckless
disregard of
4
<PAGE>
its duties under this Agreement.
The Adviser shall indemnify and hold harmless the Sub-Adviser from and
against any and all claims, losses, liabilities or damages (including
reasonable attorney's fees and other related expenses) howsoever
arising from or in connection with the performance by the Adviser of
its duties under this Agreement; provided, however, that the Adviser
shall not be required to indemnify or otherwise hold the Sub-Adviser
harmless under this Section 7 where the claim against, or the loss,
liability or damage experienced by the Sub-Adviser, is caused by or is
otherwise related to the Sub-Adviser's own willful misfeasance, bad
faith or negligence, or to the reckless disregard of its duties under
this Agreement.
8. DURATION AND TERMINATION. This Agreement shall become effective upon
its approval by the Trust's Board of Trustees and by the vote of a
majority of the outstanding voting securities of the Portfolio;
provided, however, that at any time the Adviser shall have obtained
exemptive relief from the SEC permitting it to engage a Sub-Adviser
without first obtaining approval of the Agreement from a majority of
the outstanding voting securities of the Portfolio involved, the
Agreement shall become effective upon its approval by the Trust's Board
of Trustees. Any Sub-Adviser so selected and approved shall be without
the protection accorded by shareholder approval of an investment
adviser's receipt of compensation under Section 36(b) of the 1940 Act.
This Agreement shall continue in effect for a period of more than two
years from the date hereof only so long as continuance is specifically
approved at least annually in conformance with the 1940 Act; provided,
however, that this Agreement may be terminated with respect to the
Portfolio (a) by the Portfolio at any time, without the payment of any
penalty, by the vote of a majority of Trustees of the Trust or by the
vote of a majority of the outstanding voting securities of such
Portfolio, (b) by the Adviser at any time, without the payment of any
penalty, on not more than 60 days' nor less than 30 days' written
notice to the other party, or (c) by the Sub-Adviser at any time,
without the payment of any penalty, on 90 days' written notice to the
other party. This Agreement shall terminate automatically and
immediately in the event of its assignment, or in the event of a
termination of the Adviser's agreement with the Trust. As used in this
Section 8, the terms "assignment" and "vote of a majority of the
outstanding voting securities" shall have the respective meanings set
forth in the 1940 Act and the rules and regulations thereunder, subject
to such exceptions as may be granted by the SEC under the 1940 Act.
9. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed
as being inconsistent with the 1940 Act.
10. SEVERABILITY. Should any part of this Agreement be held invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and
their respective successors.
5
<PAGE>
11. NOTICE: Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by
registered, certified or overnight mail, postage prepaid addressed by
the party giving notice to the other party at the last address
furnished by the other party:
To the Adviser at: SEI Investments Management Corporation
One Freedom Valley Drive
Oaks, PA 19456
Attention: Legal Department
To the Sub-Adviser at: Mellon Equity Associates, LLP
500 Grant Street, Suite 4200
Pittsburgh, PA 15258
Attention: President
12. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject
matter. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order
of the SEC, whether of special or general application, such provision
shall be deemed to incorporate the effect of such rule, regulation or
order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year
first written above.
SEI INVESTMENTS MANAGEMENT CORPORATION MELLON EQUITY ASSOCIATES, LLP
By: /s/ Cynthia M. Parrish By: /s/ William P. Rydell
-------------------------------- -------------------------
Name: Cynthia m. Parrish Name: William P. Rydell
------------------------------ ------------------------
Title: Vice President Title: President and CEO
----------------------------- -----------------------
6
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
MELLON EQUITY ASSOCIATES, LLP
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
<TABLE>
<S> <C>
SEI Insurance Products Trust
SEI VP Large Cap Value Fund 0.15%
</TABLE>
7
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSURANCE PRODUCTS TRUST
AGREEMENT made this 2nd day of February, 2000, by and among SEI
Investments Management Corporation, (the "Adviser") and Mellon Equity
Associates, LLP, (the "Sub-Adviser").
WHEREAS, SEI Insurance Products Trust, a Massachusetts business trust
(the "Trust"), is registered as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated March 29, 1999 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the SEI VP Small Cap Value
Fund (the "Portfolio"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain
the Sub-Adviser to provide investment advisory services to the Adviser in
connection with the management of the Portfolio, and the Sub-Adviser is willing
to render such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and
the Trust's Board of Trustees, the Sub-Adviser shall manage the
investment operations of the Portfolio and the composition of the
Portfolio, including the purchase, retention and disposition of
securities and other assets, in accordance with the Portfolio's
investment objectives, policies and restrictions as stated in the
Portfolio's prospectus and statement of additional information, as
currently in effect and as amended or supplemented from time to time
(referred to collectively as the "Prospectus"), and subject to the
following:
(a) The Sub-Adviser shall provide supervision of the Portfolio's
investments and determine from time to time what investments and
securities will be purchased, retained or sold by the Portfolio, and
what portion of the assets will be invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement,
the Sub-Adviser shall act in conformity with the Trust's Declaration of
Trust (as defined herein) and the Prospectus and with the instructions
and directions of the Adviser and of the Board of Trustees of the Trust
and will conform to and comply with the requirements of the 1940 Act,
the Internal Revenue Code of 1986, and all other applicable federal and
state laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the securities to be purchased or sold
by the Portfolio and will place orders with or through such persons,
brokers or dealers to carry out the policy with respect to brokerage
set forth in the Portfolio's Registration Statement and Prospectus or
as the Board of Trustees or the Adviser may direct from time to time,
in conformity with federal securities laws. In executing Portfolio
transactions and selecting
<PAGE>
brokers or dealers, the Sub-Adviser will use its best efforts to seek
on behalf of the Portfolio the best overall terms available. In
assessing the best overall terms available for any transaction, the
Sub-Adviser shall consider all factors that it deems relevant, which
may include the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the
broker or dealer, and the reasonableness of the commission, if any,
both for the specific transaction and on a continuing basis. In
evaluating the best overall terms available, and in selecting the
broker-dealer to execute a particular transaction, the Sub-Adviser may
also consider the brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934)
provided to the Portfolio and/or other accounts over which the
Sub-Adviser or an affiliate of the Sub-Adviser may exercise investment
discretion. The Sub-Adviser is authorized, subject to prior approval of
the Trust's Board of Trustees, to pay to a broker or dealer who
provides such brokerage and research services a commission for
executing a portfolio transaction for any of the Portfolios which is in
excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if, but only if, the Sub-Adviser
determines in good faith that such commission was reasonable in
relation to the value of the brokerage and research services provided
by such broker or dealer -- viewed in terms of that particular
transaction or terms of the overall responsibilities of the Sub-Adviser
to the Portfolio. In addition, the Sub-Adviser is authorized to
allocate purchase and sale orders for portfolio securities to brokers
or dealers (including brokers and dealers that are affiliated with the
Sub-Adviser or the Trust's principal underwriter) to take into account
the sale of shares of the Trust if the Sub-Adviser believes that the
quality of the transaction and the commission are comparable to what
they would be with other qualified firms. In no instance, however, will
the Portfolio's securities be purchased from or sold to the
Sub-Adviser, the Trust's principal underwriter, or any affiliated
person of either the Trust, the Sub-Adviser or the principal
underwriter, acting as principal in the transaction, except to the
extent permitted by the Securities and Exchange Commission ("SEC") and
the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
the Portfolio's portfolio transactions required by subparagraphs
(b)(5), (6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1
under the 1940 Act and shall render to the Adviser or the Board of
Trustees such periodic and special reports as the Adviser or Board of
Trustees may reasonably request.
The Sub-Adviser shall keep the Portfolio's books and records required
to be maintained by the Sub-Adviser of this Agreement and shall timely
furnish to the Adviser all information relating to the Sub-Adviser's
services under this Agreement needed by the Adviser to keep the other
books and records of the Portfolio required by Rule 31a-1 under the
1940 Act. The Sub-Adviser shall also furnish to the Adviser any other
information that is required to be filed by the Adviser or the Trust
with the SEC or sent to shareholders under the 1940 Act (including the
rules adopted thereunder) or any exemptive or other relief that the
Adviser or the Trust obtains from the SEC. The Sub-Adviser agrees that
all records that it maintains on behalf of the Portfolio are property
of
2
<PAGE>
the Portfolio and the Sub-Adviser will surrender promptly to the
Portfolio any of such records upon the Portfolio's request; provided,
however, that the Sub-Adviser may retain a copy of such records. In
addition, for the duration of this Agreement, the Sub-Adviser shall
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
any such records as are required to be maintained by it pursuant to
this Agreement, and shall transfer said records to any successor
Sub-Adviser upon the termination of this Agreement (or, if there is no
successor Sub-Adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Portfolio's custodian on each
business day with information relating to all transactions concerning
the Portfolio's assets and shall provide the Adviser with such
information upon request of the Adviser.
(f) The investment management services provided by the Sub-Adviser under
this Agreement are not to be deemed exclusive and the Sub-Adviser shall
be free to render similar services to others, as long as such services
do not impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill
its commitment under this Agreement.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners,
officers or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have
responsibility for all services to be provided to the Portfolio
pursuant to the Advisory Agreement and shall oversee and review the
Sub-Adviser's performance of its duties under this Agreement; provided,
however, that nothing herein shall be construed to relieve the
Sub-Adviser of responsibility for compliance with the Portfolio's
investment objectives, policies, and restrictions, as provided in
Section 1 hereunder. The Adviser hereby covenants to promptly provide
the Sub-Adviser with copies of any amendment or supplement to the
Portfolio's Registration Statement as well as all applicable trading
guidelines and procedures established for the Portfolio.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of the Commonwealth of Massachusetts (such Agreement
and Declaration of Trust, as in effect on the date of this Agreement
and as amended from time to time, herein called the "Declaration of
Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Fund.
3
<PAGE>
(d) The Adviser hereby covenants to promptly furnish the Sub-Adviser with
copies of any amendments or supplements to such documents.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in Schedule A which
is attached hereto and made part of this Agreement. The fee will be
calculated based on the average monthly market value of the investments
under management and will be paid to the Sub-Adviser monthly. The
Sub-Adviser may, in its discretion and from time to time, waive a
portion of its fee.
5. LIMITATION AND LIABILITY OF THE SUB-ADVISER. The Sub-Adviser shall not
be liable for any error of judgment or for any loss suffered by the
Adviser in connection with performance of its obligations under this
Agreement, except a loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services (in which case any
award of damages shall be limited to the period and the amount set
forth in Section 36(b)(3) of the 1940 Act), or a loss resulting from
willful misfeasance, bad faith or negligence on the Sub-Adviser's part
in the performance of its duties or from reckless disregard of its
obligations and duties under this Agreement, except as may otherwise be
provided under provisions of applicable state law which cannot be
waived or modified hereby.
6. REPORTS. During the term of this Agreement, the Adviser agrees to
furnish the Sub- Adviser at its principal office all prospectuses,
proxy statements, reports to stockholders, sales literature or other
materials prepared for distribution to stockholders of the Portfolios,
the Trust or the public that refer to the Sub-Adviser or its clients in
any way prior to use thereof and not to use material if the Sub-Adviser
reasonably objects in writing within five business days (or such other
period as may be mutually agreed) after receipt thereof. The
Sub-Adviser's right to object to such materials is limited to the
portions of such materials that expressly relate to the Sub-Adviser,
its services and its clients. The Adviser agrees to use its reasonable
best efforts to ensure that materials prepared by its employees or
agents or its affiliates that refer to the Sub-Adviser or its clients
in any way are consistent with those materials previously approved by
the Sub- Adviser as referenced in the first sentence of this paragraph.
Sales literature may be furnished to the Sub-Adviser by first class or
overnight mail, facsimile transmission equipment or hand delivery.
7. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless
the Adviser from and against any and all claims, losses, liabilities or
damages (including reasonable attorney's fees and other related
expenses) howsoever arising from or in connection with the performance
by the Sub-Adviser of its duties under this Agreement; provided,
however, that the Sub-Adviser shall not be required to indemnify or
otherwise hold the Adviser harmless under this Section 7 where the
claim against, or the loss, liability or damage experienced by the
Adviser, is caused by or is otherwise directly related to the Adviser's
own willful misfeasance, bad faith or negligence, or to the reckless
disregard of
4
<PAGE>
its duties under this Agreement.
The Adviser shall indemnify and hold harmless the Sub-Adviser from and
against any and all claims, losses, liabilities or damages (including
reasonable attorney's fees and other related expenses) howsoever
arising from or in connection with the performance by the Adviser of
its duties under this Agreement; provided, however, that the Adviser
shall not be required to indemnify or otherwise hold the Sub-Adviser
harmless under this Section 7 where the claim against, or the loss,
liability or damage experienced by the Sub-Adviser, is caused by or is
otherwise related to the Sub-Adviser's own willful misfeasance, bad
faith or negligence, or to the reckless disregard of its duties under
this Agreement.
8. DURATION AND TERMINATION. This Agreement shall become effective upon
its approval by the Trust's Board of Trustees and by the vote of a
majority of the outstanding voting securities of the Portfolio;
provided, however, that at any time the Adviser shall have obtained
exemptive relief from the SEC permitting it to engage a Sub-Adviser
without first obtaining approval of the Agreement from a majority of
the outstanding voting securities of the Portfolio involved, the
Agreement shall become effective upon its approval by the Trust's Board
of Trustees. Any Sub-Adviser so selected and approved shall be without
the protection accorded by shareholder approval of an investment
adviser's receipt of compensation under Section 36(b) of the 1940 Act.
This Agreement shall continue in effect for a period of more than two
years from the date hereof only so long as continuance is specifically
approved at least annually in conformance with the 1940 Act; provided,
however, that this Agreement may be terminated with respect to the
Portfolio (a) by the Portfolio at any time, without the payment of any
penalty, by the vote of a majority of Trustees of the Trust or by the
vote of a majority of the outstanding voting securities of such
Portfolio, (b) by the Adviser at any time, without the payment of any
penalty, on not more than 60 days' nor less than 30 days' written
notice to the other party, or (c) by the Sub-Adviser at any time,
without the payment of any penalty, on 90 days' written notice to the
other party. This Agreement shall terminate automatically and
immediately in the event of its assignment, or in the event of a
termination of the Adviser's agreement with the Trust. As used in this
Section 8, the terms "assignment" and "vote of a majority of the
outstanding voting securities" shall have the respective meanings set
forth in the 1940 Act and the rules and regulations thereunder, subject
to such exceptions as may be granted by the SEC under the 1940 Act.
9. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed
as being inconsistent with the 1940 Act.
10. SEVERABILITY. Should any part of this Agreement be held invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and
their respective successors.
5
<PAGE>
11. NOTICE: Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by
registered, certified or overnight mail, postage prepaid addressed by
the party giving notice to the other party at the last address
furnished by the other party:
To the Adviser at: SEI Investments Management Corporation
One Freedom Valley Drive
Oaks, PA 19456
Attention: Legal Department
To the Sub-Adviser at: Mellon Equity Associates, LLP
500 Grant Street, Suite 4200
Pittsburgh, PA 15258
Attention: President
12. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject
matter. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order
of the SEC, whether of special or general application, such provision
shall be deemed to incorporate the effect of such rule, regulation or
order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year
first written above.
SEI INVESTMENTS MANAGEMENT CORPORATION MELLON EQUITY ASSOCIATES, LLP
By: /s/ Cynthia M. Parrish By: /s/ William P. Rydell
--------------------------- -------------------------
Name: Cynthia m. Parrish Name: William P. Rydell
------------------------- -----------------------
Title: Vice President Title: President and CEO
------------------------ ----------------------
6
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
MELLON EQUITY ASSOCIATES, LLP
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
<TABLE>
<S> <C>
SEI Insurance Products Trust
SEI VP Small Cap Value Fund 0.45%
</TABLE>
7
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSURANCE PRODUCTS TRUST
AGREEMENT made this 14th day of February, 2000, between SEI Investments
Management Corporation, (the "Adviser") and Nicholas-Applegate Capital
Management (the "Sub-Adviser").
WHEREAS, SEI Insurance Products Trust, a Massachusetts business trust
(the "Trust") is registered as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated March 29, 1999 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the SEI VP Emerging Markets
Equity Fund and the SEI VP Small Cap Growth Fund (the "Funds"), which are series
of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain
the Sub-Adviser to provide investment advisory services to the Adviser in
connection with the management of the Funds, and the Sub-Adviser is willing to
render such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and
the Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Funds entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the
Assets, in accordance with the Funds' investment objectives, policies
and restrictions as stated in the Funds' prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, in consultation with and subject to the
direction of the Adviser, determine from time to time what Assets will
be purchased, retained or sold by the Funds, and what portion of the
Assets will be invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement,
the Sub-Adviser shall act in conformity with the Trust's Declaration of
Trust (as defined herein) and the Prospectus and with the instructions
and directions of the Adviser and of the Board of Trustees of the Trust
and will conform to and comply with the requirements of the 1940 Act,
the Internal Revenue Code of 1986, and all other applicable federal and
state laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by
the Funds as provided in subparagraph (a) and will place orders with or
through such persons, brokers or dealers to carry out the policy with
respect to brokerage set forth in the Funds' Registration Statement (as
defined herein) and Prospectus or as the Board of Trustees or the
Adviser may direct from time
1
<PAGE>
to time, in conformity with federal securities laws. In executing Fund
transactions and selecting brokers or dealers, the Sub-Adviser will use
its best efforts to seek on behalf of the Funds the best overall terms
available. In assessing the best overall terms available for any
transaction, the Sub-Adviser shall consider all factors that it deems
relevant, including the breadth of the market in the security, the
price of the security, the financial condition and execution capability
of the broker or dealer, and the reasonableness of the commission, if
any, both for the specific transaction and on a continuing basis. In
evaluating the best overall terms available, and in selecting the
broker-dealer to execute a particular transaction, the Sub-Adviser may
also consider the brokerage and research services provided (as those
terms are defined in Section 28(e) of the Securities Exchange Act of
1934). Consistent with any guidelines established by the Board of
Trustees of the Trust, the Sub-Adviser is authorized to pay to a broker
or dealer who provides such brokerage and research services a
commission for executing a fund transaction for the Funds which is in
excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if, but only if, the Sub-Adviser
determines in good faith that such commission was reasonable in
relation to the value of the brokerage and research services provided
by such broker or dealer - - viewed in terms of that particular
transaction or terms of the overall responsibilities of the Sub-Adviser
to the Funds. In addition, the Sub-Adviser if authorized to allocate
purchase and sale orders for securities to brokers or dealers
(including brokers and dealers that are affiliated with the Adviser,
Sub-Adviser or the Trust's principal underwriter) to take into account
the sale of shares of the Trust if the Sub-Adviser believes that the
quality of the transaction and the commission are comparable to what
they would be with other qualified firms. In no instance, however, will
the Funds' Assets be purchased from or sold to the Adviser,
Sub-Adviser, the Trust's principal underwriter, or any affiliated
person of either the Trust, Adviser, the Sub-Adviser or the principal
underwriter, acting as principal in the transaction, except to the
extent permitted by the Securities and Exchange Commission ("SEC") and
the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5),
(6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the
1940 Act. The Sub-Adviser shall provide to the Adviser or the Board of
Trustees such periodic and special reports, balance sheets or financial
information, and such other information with regard to its affairs as
the Adviser or Board of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and
shall timely furnish to the Adviser all information relating to the
Sub-Adviser's services under this Agreement needed by the Adviser to
keep the other books and records of the Funds required by Rule 31a-1
under the 1940 Act. The Sub-Adviser shall also furnish to the Adviser
any other information relating to the Assets that is required to be
filed by the Adviser or the Trust with the SEC or sent to shareholders
under the 1940 Act (including the rules adopted thereunder) or any
exemptive or other relief that the Adviser or the Trust obtains from
the SEC. The Sub-Adviser agrees that all records that it maintains on
behalf of the Funds are property of the Funds and the Sub-Adviser will
surrender promptly to the Funds any of such records upon the Funds'
request; provided,
2
<PAGE>
however, that the Sub-Adviser may retain a copy of such records. In
addition, for the duration of this Agreement, the Sub-Adviser shall
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
any such records as are required to be maintained by it pursuant to
this Agreement, and shall transfer said records to any successor
Sub-Adviser upon the termination of his Agreement (or, if there is no
successor Sub-Adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Funds' custodian on each business day
with information relating to all transactions concerning the Funds'
Assets and shall provide the Adviser with such information upon request
of the Adviser.
(f) The investment management services provided by the Sub-Adviser under
this Agreement are not to be deemed exclusive and the Sub-Adviser shall
be free to render similar services to others, as long as such services
do not impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill
its commitment under this Agreement. The Sub-Adviser will notify the
Adviser of any change in its general partner within a reasonable time.
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held in the Funds. The Adviser shall instruct the custodian
and other parties providing services to the Funds to promptly forward
misdirected proxies to the Sub-Adviser.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners,
officers or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have
responsibility for all services to be provided to the Fund pursuant to
the Advisory Agreement and shall oversee and review the Sub-Adviser's
performance of its duties under this Agreement; provided, however, that
in connection with its management of the Assets, nothing herein shall
be construed to relieve the Sub-Adviser of responsibility for
compliance with the Trust's Declaration of Trust (as defined herein),
the Prospectus, the instructions and directions of the Board of
Trustees of the Trust, the requirements of the 1940 Act, the Internal
Revenue Code of 1986, and all other applicable federal and state laws
and regulations, as each is amended from time to time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of the Commonwealth of Massachusetts (such Agreement
and Declaration of Trust, as in effect on the date of this Agreement
and as amended from time to time, herein called the "Declaration of
Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the of this
Agreement and as amended
3
<PAGE>
from time to time, are herein called the "By-Laws");
(c) Prospectus(es) of the Funds.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by
the Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s)
which is attached hereto and made part of this Agreement. The fee will
be calculated based on the average monthly market value of the Assets
under the Sub-Adviser's management and will be paid to the Sub-Adviser
monthly. Except as may otherwise be prohibited by law or regulation
(including any then current SEC staff interpretation), the Sub-Adviser
may, in its discretion and from time to time, waive a portion of its
fee.
5. LIMITATION OF LIABILITY OF THE SUB-ADVISER. The Sub-Adviser shall not
be liable for any error of judgment or for any loss suffered by the
Adviser in connection with the performance of its obligations under
this Agreement, except a loss resulting from a breach of fiduciary duty
with respect to the receipt of compensation for services (in which case
any award of damages shall be limited to the period and the amount set
forth in Section 36(b)(3) of the 1940 Act), or a loss resulting from
willful misfeasance, bad faith or negligence on the Sub-Adviser's part
in the performance of its duties or from reckless disregard of its
obligations and duties under this Agreement, except as may otherwise be
provided under provisions of applicable state law which cannot be
waived or modified hereby.
6. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or
damages (including reasonable attorney's fees and other related
expenses) howsoever arising from or in connection with the performance
of the Sub-Adviser's obligations under this Agreement; provided,
however, that the Sub-Adviser's obligation under this Section 6 shall
be reduced to the extent that the claim against, or the loss, liability
or damage experienced by the Adviser, is caused by or is otherwise
directly related to the Adviser's own willful misfeasance, bad faith or
negligence, or to the reckless disregard of its duties under this
Agreement.
The Adviser shall indemnify and hold harmless the Sub-Adviser from and
against any and all claims, losses, liabilities or damages (including
reasonable attorney's fees and other related expenses) howsoever
arising from or in connection with the performance of the Adviser's
obligations under this Agreement; provided, however, that the Adviser's
obligation under this Section 6 shall be reduced to the extent that the
claim against, or the loss, liability or damage experienced by the
Sub-Adviser, is caused by or is otherwise directly related to the
Sub-Adviser's own willful misfeasance, bad faith or negligence, or to
the reckless disregard of its duties under this Agreement.
7. DURATION AND TERMINATION. This Agreement shall become effective upon
its approval by the Trust's Board of Trustees and by the vote of a
majority of the outstanding voting securities of the Funds; provided,
however, that at any time the Adviser shall have obtained exemptive
relief
4
<PAGE>
from the SEC permitting it to engage a Sub-Adviser without first
obtaining approval of the Agreement from a majority of the outstanding
voting securities of the Fund(s) involved, the Agreement shall become
effective upon its approval by the Trust's Board of Trustees. Any
Sub-Adviser so selected and approved shall be without the protection
accorded by shareholder approval of an investment adviser's receipt of
compensation under Section 36(b) of the 1940 Act. This Agreement shall
continue in effect for a period of more than two years from the date
hereof only so long as continuance is specifically approved at least
annually in conformance with the 1940 Act; provided, however, that this
Agreement may be terminated with respect to the Funds (a) by the Funds
at any time, without the payment of any penalty, by the vote of a
majority of Trustees of the Trust or by the vote of a majority of the
outstanding voting securities of the Funds, (b) by the Adviser at any
time, without the payment of any penalty, on not more than 60 days' nor
less than 30 days' written notice to the Sub-Adviser, or (c) by the
Sub-Adviser at any time, without the payment of any penalty, on 90
days' written notice to the Adviser. This Agreement shall terminate
automatically and immediately in the event of its assignment, or in the
event of a termination of the Adviser's agreement with the Trust. As
used in this Section 7, the terms "assignment" and "vote of a majority
of the outstanding voting securities" shall have the respective
meanings set forth in the 1940 Act and the rules and regulations
thereunder, subject to such exceptions as may be granted by the
Commission under the 1940 Act.
8. GOVERNING LAW. This Agreement shall be governed by the internal laws
of the Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed
as being inconsistent with the 1940 Act.
9. SEVERABILITY. Should any part of this Agreement be held invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and
their respective successors.
10. NOTICE: Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by
registered, certified or overnight mail, postage prepaid addressed by
the party giving notice to the other party at the last address
furnished by the other party:
To the Adviser at: SEI Investments Management Corporation
One Freedom Valley Road
Oaks, PA 19456
Attention: Legal Department
To the Sub-Adviser at: Nicholas-Applegate Capital Management
600 West Broadway, Suite 2900
San Diego, CA 92101
Attention: Director, Client Service/Marketing
Copy to: James T. McComsey
5
<PAGE>
11. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject
matter. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
12. MISCELLANEOUS. The name "Nicholas-Applegate" is a registered trademark
of the Sub-Adviser, and any use or continued use of the name by the
Adviser is subject to the Sub-Adviser's continuing, consent, in its
sole discretion, which consent will not be withheld during the term of
this Agreement.
A copy of the Declaration of Trust of the Trust is on file with the
Secretary of State of the Commonwealth of Massachusetts, and notice is hereby
given that the obligations of this instrument are not binding upon any of the
Trustees, officers or shareholders of the Fund or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
Commission, whether of special or general application, such provision shall be
deemed to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI INVESTMENTS MANAGEMENT CORPORATION NICHOLAS-APPLEGATE CAPITAL MANAGEMENT
By: /s/ Cynthia M. Parrish By: /s/ E. Blake Moore, Jr.
------------------------------- ----------------------------------
Name: Cynthia M. Parrish Name: E. Blake Moore, Jr.
----------------------------- --------------------------------
Title: Vice President Title: General Counsel
---------------------------- -------------------------------
6
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT DATED FEBRUARY 14, 2000
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
NICHOLAS-APPLEGATE CAPITAL MANAGEMENT
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
<TABLE>
<S> <C>
SEI VP Emerging Markets Equity Fund 0.65% while assets are less than
$200 million
0.60% once assets equal at least
$200 million
SEI VP Small Cap Growth Fund 0.50% on all assets
</TABLE>
For purposes of calculating fees, assets in all client accounts advised by the
Adviser and managed by the Sub-Adviser will be aggregated.
7
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSURANCE PRODUCTS TRUST
AGREEMENT made this 31st day of March, 2000, between SEI Investments
Management Corporation (the "Adviser") and Oechsle International Advisors, LLC
(the "Sub-Adviser").
WHEREAS, SEI Insurance Products Trust, a Massachusetts business trust
(the "Trust"), is registered as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated March 29, 1999 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the SEI VP International
Equity Fund (the "Fund"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain
the Sub-Adviser to provide investment advisory services to the Adviser in
connection with the management of the Fund, and the Sub-Adviser is willing to
render such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and
the Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Fund entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the
Assets, in accordance with the Fund's investment objectives, policies
and restrictions as stated in the Fund's prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall determine from time to time what Assets will be
purchased, retained or sold by the Fund, and what portion of the Assets
will be invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement,
the Sub-Adviser shall act in conformity with the Trust's Declaration of
Trust (as defined herein) and the Prospectus and with the instructions
and directions of the Adviser and of the Board of Trustees of the Trust
and will conform to and comply with the requirements of the 1940 Act,
the Internal Revenue Code of 1986, and all other applicable federal and
state laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by
the Fund as provided in subparagraph (a) and will place orders with or
through such persons, brokers or dealers to carry out the policy with
respect to brokerage set forth in the Fund's Registration Statement (as
defined herein) and Prospectus or as the Board of Trustees or the
Adviser may direct from time to time, in conformity with federal
securities laws. In executing Fund transactions and selecting brokers
or dealers, the Sub-Adviser will use its best efforts to seek
<PAGE>
on behalf of the Fund the best overall terms available. In assessing
the best overall terms available for any transaction, the Sub-Adviser
shall consider all factors that it deems relevant, including the
breadth of the market in the security, the price of the security, the
financial condition and execution capability of the broker or dealer,
and the reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis. In evaluating the best overall
terms available, and in selecting the broker-dealer to execute a
particular transaction, the Sub-Adviser may also consider the brokerage
and research services provided (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934). Consistent with any
guidelines established by the Board of Trustees of the Trust, the
Sub-Adviser is authorized to pay to a broker or dealer who provides
such brokerage and research services a commission for executing a
portfolio transaction for the Fund which is in excess of the amount of
commission another broker or dealer would have charged for effecting
that transaction if, but only if, the Sub-Adviser determines in good
faith that such commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer -
- viewed in terms of that particular transaction or terms of the
overall responsibilities of the Sub-Adviser to the Fund. In addition,
the Sub-Adviser is authorized to allocate purchase and sale orders for
securities to brokers or dealers (including brokers and dealers that
are affiliated with the Adviser, Sub-Adviser or the Trust's principal
underwriter) to take into account the sale of shares of the Trust if
the Sub-Adviser believes that the quality of the transaction and the
commission are comparable to what they would be with other qualified
firms. In no instance, however, will the Fund's Assets be purchased
from or sold to the Adviser, Sub-Adviser, the Trust's principal
underwriter, or any affiliated person of either the Trust, Adviser, the
Sub-Adviser or the principal underwriter, acting as principal in the
transaction, except to the extent permitted by the Securities and
Exchange Commission ("SEC") and the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5),
(6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the
1940 Act. The Sub-Adviser shall provide to the Adviser or the Board of
Trustees such periodic and special reports, balance sheets or financial
information, and such other information with regard to its affairs as
the Adviser or Board of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and
shall timely furnish to the Adviser all information relating to the
Sub-Adviser's services under this Agreement needed by the Adviser to
keep the other books and records of the Fund required by Rule 31a-1
under the 1940 Act. The Sub-Adviser shall also furnish to the Adviser
any other information relating to the Assets that is required to be
filed by the Adviser or the Trust with the SEC or sent to shareholders
under the 1940 Act (including the rules adopted thereunder) or any
exemptive or other relief that the Adviser or the Trust obtains from
the SEC. The Sub-Adviser agrees that all records that it maintains on
behalf of the Fund are property of the Fund and the Sub-Adviser will
surrender promptly to the Fund any of such records upon the Fund's
request; provided, however, that the Sub-Adviser may retain a copy of
such records. In addition, for the duration of this Agreement, the
Sub-Adviser shall preserve for the periods prescribed by
2
<PAGE>
Rule 31a-2 under the 1940 Act any such records as are required to be
maintained by it pursuant to this Agreement, and shall transfer said
records to any successor sub-adviser upon the termination of this
Agreement (or, if there is no successor sub-adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Fund's custodian on each business
day with information relating to all transactions concerning the Fund's
Assets and shall provide the Adviser with such information upon request
of the Adviser.
(f) The investment management services provided by the Sub-Adviser under
this Agreement are not to be deemed exclusive and the Sub-Adviser shall
be free to render similar services to others, as long as such services
do not impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill
its commitment under this Agreement.
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held in the Fund. The Adviser shall instruct the custodian
and other parties providing services to the Fund to promptly forward
misdirected proxies to the Sub-Adviser.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners,
officers or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have
responsibility for all services to be provided to the Fund pursuant to
the Advisory Agreement and shall oversee and review the Sub-Adviser's
performance of its duties under this Agreement; provided, however, that
in connection with its management of the Assets, nothing herein shall
be construed to relieve the Sub-Adviser of responsibility for
compliance with the Trust's Declaration of Trust (as defined herein),
the Prospectus, the instructions and directions of the Board of
Trustees of the Trust, the requirements of the 1940 Act, the Internal
Revenue Code of 1986, and all other applicable federal and state laws
and regulations, as each is amended from time to time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of the Commonwealth of Massachusetts (such Agreement
and Declaration of Trust, as in effect on the date of this Agreement
and as amended from time to time, herein called the "Declaration of
Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Fund.
3
<PAGE>
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by
the Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s)
which is attached hereto and made part of this Agreement. The fee will
be calculated based on the average monthly market value of the Assets
under the Sub-Adviser's management and will be paid to the Sub-Adviser
monthly. Except as may otherwise be prohibited by law or regulation
(including any then current SEC staff interpretation), the Sub-Adviser
may, in its discretion and from time to time, waive a portion of its
fee.
5. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or
damages (including reasonable attorney's fees and other related
reasonable out-of-pocket expenses) howsoever arising from or in
connection with the performance of the Sub-Adviser's obligations under
this Agreement; provided, however, that the Sub-Adviser's obligation
under this Section 5 shall be reduced to the extent that the claim
against, or the loss, liability or damage experienced by the Adviser,
is caused by or is otherwise directly related to the Adviser's own
willful misfeasance, bad faith or negligence, or to the reckless
disregard of its duties under this Agreement.
The Adviser shall indemnify and hold harmless the Sub-Adviser from and
against any and all claims, losses, liabilities or damages (including
reasonable attorney's fees and other related reasonable out-of-pocket
expenses) howsoever arising from or in connection with the performance
of the Adviser's obligations under this Agreement; provided, however,
that the Adviser's obligation under this Section 5 shall be reduced to
the extent that the claim against, or the loss, liability or damage
experienced by the Sub-Adviser, is caused by or is otherwise directly
related to the Sub-Adviser's own willful misfeasance, bad faith or
negligence, or to the reckless disregard of its duties under this
Agreement.
6. DURATION AND TERMINATION. This Agreement shall become effective upon
its approval by the Trust's Board of Trustees and by the vote of a
majority of the outstanding voting securities of the Fund; provided,
however, that at any time the Adviser shall have obtained exemptive
relief from the Securities and Exchange Commission permitting it to
engage a Sub-Adviser without first obtaining approval of the Agreement
from a majority of the outstanding voting securities of the Fund(s)
involved, the Agreement shall become effective upon its approval by the
Trust's Board of Trustees. Any Sub-Adviser so selected and approved
shall be without the protection accorded by shareholder approval of an
investment adviser's receipt of compensation under Section 36(b) of the
1940 Act.
This Agreement shall continue in effect for a period of more than two
years from the date hereof only so long as continuance is specifically
approved at least annually in conformance with the 1940 Act; provided,
however, that this Agreement may be terminated with respect to the Fund
(a) by the Fund at any time, without the payment of any penalty, by the
vote of a majority of Trustees of the Trust or by the vote of a
majority of the outstanding voting securities of the Fund, (b) by the
Adviser at any time, without the payment of any penalty,
4
<PAGE>
on not more than 60 days' nor less than 30 days' written notice to the
Sub-Adviser, or (c) by the Sub-Adviser at any time, without the payment
of any penalty, on 90 days' written notice to the Adviser. This
Agreement shall terminate automatically and immediately in the event of
its assignment, or in the event of a termination of the Adviser's
agreement with the Trust. As used in this Section 6, the terms
"assignment" and "vote of a majority of the outstanding voting
securities" shall have the respective meanings set forth in the 1940
Act and the rules and regulations thereunder, subject to such
exceptions as may be granted by the SEC under the 1940 Act.
7. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed
as being inconsistent with the 1940 Act.
8. SEVERABILITY. Should any part of this Agreement be held invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and
their respective successors.
9. NOTICE: Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by
registered, certified or overnight mail, postage prepaid addressed by
the party giving notice to the other party at the last address
furnished by the other party:
To the Adviser at: SEI Investments Management Corporation
One Freedom Valley Road
Oaks, PA 19456
Attention: Legal Department
To the Sub-Adviser at: Oechsle International Advisors, LLC
One International Place, 23rd Floor
Boston, MA 02110
Attention: Paula N. Drake
10. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject
matter. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
A copy of the Declaration of Trust is on file with the Secretary of
State of the Commonwealth of Massachusetts, and notice is hereby given that the
obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of the Fund or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
SEC, whether of special or general
5
<PAGE>
application, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI INVESTMENTS MANAGEMENT CORPORATION OECHSLE INTERNATIONAL ADVISORS, LLC
BY OECHSLE GROUP, LLC,
ITS MEMBER MANAGER
By: /s/ Todd B. Cipperman By: /s/ L. Sean Roche
---------------------------- ---------------------------------
Name: Todd B. Cipperman Name: L. Sean Roche
-------------------------- -------------------------------
Title: Senior Vice President Title: Managing Principal
------------------------- ------------------------------
6
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
OECHSLE INTERNATIONAL ADVISORS, LLC
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
<TABLE>
<S> <C>
SEI VP International Equity Fund 0.30%
</TABLE>
7
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSURANCE PRODUCTS TRUST
AGREEMENT made as of this 22nd day of March, 2000, between SEI
Investments Management Corporation (the "Adviser") and Provident Investment
Counsel, Inc. (the "Sub-Adviser").
WHEREAS, SEI Insurance Products Trust, a Massachusetts business trust
(the "Trust") is registered as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated March 29, 1999 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the SEI VP Large Cap Growth
Fund (the "Fund"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain
the Sub-Adviser to provide investment advisory services to the Adviser in
connection with the management of the Fund, and the Sub-Adviser is willing to
render such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and
the Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Fund entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the
Assets, in accordance with the Fund's investment objectives, policies
and restrictions as stated in the Fund's prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, in consultation with and subject to the
direction of the Adviser, determine from time to time what Assets will
be purchased, retained or sold by the Fund, and what portion of the
Assets will be invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement,
the Sub-Adviser shall act in conformity with the Trust's Declaration of
Trust (as defined herein) and the Prospectus and with the instructions
and directions of the Adviser and of the Board of Trustees of the Trust
and will conform to and comply with the requirements of the 1940 Act,
the Internal Revenue Code of 1986, and all other applicable federal and
state laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold
by the Fund as provided in subparagraph (a) and will place orders with
or through such persons, brokers or dealers to carry out the policy
with respect to brokerage set forth in the Fund's Registration
Statement (as defined herein) and Prospectus or as the Board of
Trustees or the Adviser may direct from time to time, in conformity
with federal securities laws. In executing Fund transactions and
selecting brokers or dealers, the Sub-Adviser will use its best efforts
to seek on behalf of the Fund the best overall terms available. In
assessing the best overall terms available for any transaction, the
Sub-Adviser shall consider all factors that it deems relevant,
including the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the
broker or dealer, and the reasonableness of the commission, if any,
both for the specific
<PAGE>
transaction and on a continuing basis. In evaluating the best overall
terms available, and in selecting the broker-dealer to execute a
particular transaction, the Sub-Adviser may also consider the brokerage
and research services provided (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934). Consistent with any
guidelines established by the Board of Trustees of the Trust, the
Sub-Adviser is authorized to pay to a broker or dealer who provides
such brokerage and research services a commission for executing a
portfolio transaction for the Fund which is in excess of the amount of
commission another broker or dealer would have charged for effecting
that transaction if, but only if, the Sub-Adviser determines in good
faith that such commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer
-- viewed in terms of that particular transaction or terms of the
overall responsibilities of the Sub-Adviser to the Fund. In addition,
the Sub-Adviser if authorized to allocate purchase and sale orders for
securities to brokers or dealers (including brokers and dealers that
are affiliated with the Adviser, Sub-Adviser or the Trust's principal
underwriter) to take into account the sale of shares of the Trust if
the Sub-Adviser believes that the quality of the transaction and the
commission are comparable to what they would be with other qualified
firms. In no instance, however, will the Fund's Assets be purchased
from or sold to the Adviser, Sub-Adviser, the Trust's principal
underwriter, or any affiliated person of either the Trust, Adviser, the
Sub-Adviser or the principal underwriter, acting as principal in the
transaction, except to the extent permitted by the Securities and
Exchange Commission ("SEC") and the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5),
(6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the
1940 Act. The Sub-Adviser shall provide to the Adviser or the Board of
Trustees such periodic and special reports, balance sheets or financial
information, and such other information with regard to its affairs as
the Adviser or Board of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and
shall timely furnish to the Adviser all information relating to the
Sub-Adviser's services under this Agreement needed by the Adviser to
keep the other books and records of the Fund required by Rule 31a-1
under the 1940 Act. The Sub-Adviser shall also furnish to the Adviser
any other information relating to the Assets that is required to be
filed by the Adviser or the Trust with the SEC or sent to shareholders
under the 1940 Act (including the rules adopted thereunder) or any
exemptive or other relief that the Adviser or the Trust obtains from
the SEC. The Sub-Adviser agrees that all records that it maintains on
behalf of the Fund are property of the Fund and the Sub-Adviser will
surrender promptly to the Fund any of such records upon the Fund's
request; provided, however, that the Sub-Adviser may retain a copy of
such records. In addition, for the duration of this Agreement, the
Sub-Adviser shall preserve for the periods prescribed by Rule 31a-2
under the 1940 Act any such records as are required to be maintained by
it pursuant to this Agreement, and shall transfer said records to any
successor sub-adviser upon the termination of this Agreement (or, if
there is no successor sub-adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Fund's custodian on each business day
with information relating to all transactions concerning the Fund's
Assets and shall provide the Adviser with such information upon request
of the Adviser.
- 2 -
<PAGE>
(f) The investment management services provided by the Sub-Adviser under
this Agreement are not to be deemed exclusive and the Sub-Adviser shall
be free to render similar services to others, as long as such services
do not impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill
its commitment under this Agreement.
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held in the Fund. The Adviser shall instruct the custodian
and other parties providing services to the Fund to promptly forward
misdirected proxies to the Sub-Adviser.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners,
officers or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have
responsibility for all services to be provided to the Fund pursuant to
the Advisory Agreement and shall oversee and review the Sub- Adviser's
performance of its duties under this Agreement; provided, however, that
in connection with its management of the Assets, nothing herein shall
be construed to relieve the Sub-Adviser of responsibility for
compliance with the Trust's Declaration of Trust (as defined herein),
the Prospectus, the instructions and directions of the Board of
Trustees of the Trust, the requirements of the 1940 Act, the Internal
Revenue Code of 1986, and all other applicable federal and state laws
and regulations, as each is amended from time to time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of the Commonwealth of Massachusetts (such Agreement
and Declaration of Trust, as in effect on the date of this Agreement
and as amended from time to time, herein called the "Declaration of
Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Fund.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by
the Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s)
which is attached hereto and made part of this Agreement. The fee will
be calculated based on the average monthly market value of the Assets
under the Sub-Adviser's management and will be paid to the Sub-Adviser
monthly. Except as may otherwise be prohibited by law or regulation
(including any then current SEC staff interpretation), the Sub-Adviser
may, in its discretion and from time to time, waive a portion of its
fee.
- 3 -
<PAGE>
5. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or
damages (including reasonable attorney's fees and other related
expenses) howsoever arising from or in connection with the performance
of the Sub-Adviser's obligations under this Agreement; provided,
however, that the Sub-Adviser's obligation under this Section 5 shall
be reduced to the extent that the claim against, or the loss, liability
or damage experienced by the Adviser, is caused by or is otherwise
directly related to the Adviser's own willful misfeasance, bad faith or
negligence, or to the reckless disregard of its duties under this
Agreement.
6. DURATION AND TERMINATION. This Agreement shall become effective upon
its approval by the Trust's Board of Trustees and by the vote of a
majority of the outstanding voting securities of the Fund. This
Agreement shall continue in effect for a period of more than two years
from the date hereof only so long as continuance is specifically
approved at least annually in conformance with the 1940 Act; provided,
however, that this Agreement may be terminated with respect to the Fund
(a) by the Fund at any time, without the payment of any penalty, by the
vote of a majority of Trustees of the Trust or by the vote of a
majority of the outstanding voting securities of the Fund, (b) by the
Adviser at any time, without the payment of any penalty, on not more
than 60 days' nor less than 30 days' written notice to the Sub-Adviser,
or (c) by the Sub-Adviser at any time, without the payment of any
penalty, on 90 days' written notice to the Adviser. This Agreement
shall terminate automatically and immediately in the event of its
assignment, or in the event of a termination of the Adviser's agreement
with the Trust. As used in this Section 6, the terms "assignment" and
"vote of a majority of the outstanding voting securities" shall have
the respective meanings set forth in the 1940 Act and the rules and
regulations thereunder, subject to such exceptions as may be granted by
the SEC under the 1940 Act.
7. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed
as being inconsistent with the 1940 Act.
8. SEVERABILITY. Should any part of this Agreement be held invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and
their respective successors.
9. NOTICE: Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by
registered, certified or overnight mail, postage prepaid addressed by
the party giving notice to the other party at the last address
furnished by the other party:
To the Adviser at: SEI Investments Management Corporation
One Freedom Valley Drive
Oaks, PA 19456
Attention: Legal Department
- 4 -
<PAGE>
To the Sub-Adviser at: Provident Investment Counsel, Inc.
300 North Lake Avenue, Penthouse
Pasadena, CA 91101
Attention: President
10. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject
matter. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
A copy of the Declaration of Trust is on file with the Secretary of
State of the Commonwealth of Massachusetts, and notice is hereby given that the
obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of the Fund or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI Investments Management Corporation Provident Investment Counsel, Inc.
By: /s/ Todd B. Cipperman By: /s/ George E. Handtmann III, CFA
----------------------------------- -----------------------------------
Name: Todd B. Cipperman Name: George E. Handtmann III, CFA
--------------------------------- ---------------------------------
Title: Senior Vice President Title: Executive Managing Director
-------------------------------- --------------------------------
- 5 -
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
PROVIDENT INVESTMENT COUNSEL, INC.
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
<TABLE>
<S> <C>
SEI VP Large Cap Growth Fund 0.20%
</TABLE>
- 6 -
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSURANCE PRODUCTS TRUST
AGREEMENT made as of this 31st day of March, 2000, between SEI
Investments Management Corporation (the "Adviser") and Robert W. Baird & Co.,
Incorporated, (the "Sub-Adviser").
WHEREAS, SEI Insurance Products Trust, a Massachusetts business trust
(the "Trust"), is registered as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated March 29, 1999 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the SEI VP Core Fixed Income
Fund (the "Fund"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain
the Sub-Adviser to provide investment advisory services to the Adviser in
connection with the management of the Fund, and the Sub-Adviser is willing to
render such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and
the Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Fund entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the
Assets, in accordance with the Fund's investment objectives, policies
and restrictions as stated in the Fund's prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, subject to the direction of the Adviser,
determine from time to time what Assets will be purchased, retained or
sold by the Fund, and what portion of the Assets will be invested or
held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement,
the Sub-Adviser shall act in conformity with the Trust's Declaration of
Trust (as defined herein) and the Prospectus and with the instructions
and directions of the Adviser and of the Board of Trustees of the Trust
and will conform to and comply with the requirements of the 1940 Act,
the Internal Revenue Code of 1986, and all other applicable federal and
state laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by
the Fund as provided in subparagraph (a) and will place orders with or
through such persons, brokers or dealers to carry out the policy with
respect to brokerage set forth in the Fund's Registration Statement (as
defined herein) and Prospectus or as the Board of Trustees or the
Adviser may direct from time to time, in conformity with federal
securities laws. In executing Fund
<PAGE>
transactions and selecting brokers or dealers, the Sub-Adviser will use
its best efforts to seek on behalf of the Fund the best overall terms
available. In assessing the best overall terms available for any
transaction, the Sub-Adviser shall consider all factors that it deems
relevant, including the breadth of the market in the security, the
price of the security, the financial condition and execution capability
of the broker or dealer, and the reasonableness of the commission, if
any, both for the specific transaction and on a continuing basis. In
evaluating the best overall terms available, and in selecting the
broker-dealer to execute a particular transaction, the Sub-Adviser may
also consider the brokerage and research services provided (as those
terms are defined in Section 28(e) of the Securities Exchange Act of
1934). Consistent with any guidelines established by the Board of
Trustees of the Trust, the Sub-Adviser is authorized to pay to a broker
or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for the Fund which is
in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction if, but only if, the
Sub-Adviser determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer --- viewed in terms of that
particular transaction or terms of the overall responsibilities of the
Sub-Adviser to the Fund. In addition, the Sub-Adviser is authorized to
allocate purchase and sale orders for securities to brokers or dealers
(including brokers and dealers that are affiliated with the Adviser,
Sub-Adviser or the Trust's principal underwriter) to take into account
the sale of shares of the Trust if the Sub-Adviser believes that the
quality of the transaction and the commission are comparable to what
they would be with other qualified firms. In no instance, however, will
the Fund's Assets be purchased from or sold to the Adviser,
Sub-Adviser, the Trust's principal underwriter, or any affiliated
person of either the Trust, Adviser, the Sub-Adviser or the principal
underwriter, acting as principal in the transaction, except to the
extent permitted by the Securities and Exchange Commission ("SEC") and
the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5),
(6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the
1940 Act. The Sub-Adviser shall provide to the Adviser or the Board of
Trustees such periodic and special reports, balance sheets or financial
information, and such other information with regard to its affairs as
the Adviser or Board of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and
shall timely furnish to the Adviser all information relating to the
Sub-Adviser's services under this Agreement needed by the Adviser to
keep the other books and records of the Fund required by Rule 31a-1
under the 1940 Act. The Sub-Adviser shall also furnish to the Adviser
any other information relating to the Assets that is required to be
filed by the Adviser or the Trust with the SEC or sent to shareholders
under the 1940 Act (including the rules adopted thereunder) or any
exemptive or other relief that the Adviser or the Trust obtains from
the SEC, and will make all necessary filings under Section 13 of the
Securities Act of 1933 and the related rules and forms. The Sub-Adviser
agrees that all records that it maintains on behalf of the Fund are
property of the Fund and the Sub-Adviser will surrender promptly to the
Fund any of such records upon the Fund's request; provided, however,
that the Sub-Adviser may retain a copy
<PAGE>
of such records. In addition, for the duration of this Agreement, the
Sub-Adviser shall preserve for the periods prescribed by Rule 31a-2
under the 1940 Act any such records as are required to be maintained by
it pursuant to this Agreement, and shall transfer said records to any
successor sub-adviser upon the termination of this Agreement (or, if
there is no successor sub-adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Fund's custodian on each business day
with information relating to all transactions concerning the Fund's
Assets and shall provide the Adviser with such information upon request
of the Adviser.
(f) The investment management services provided by the Sub-Adviser under
this Agreement are not to be deemed exclusive and the Sub-Adviser shall
be free to render similar services to others, as long as such services
do not impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill
its commitment under this Agreement.
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held in the Fund. The Adviser shall instruct the custodian
and other parties providing services to the Fund to promptly forward
misdirected proxies to the Sub-Adviser.
(i) Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners,
officers or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have
responsibility for all services to be provided to the Fund pursuant to
the Advisory Agreement and shall oversee and review the Sub-Adviser's
performance of its duties under this Agreement; provided, however, that
in connection with its management of the Assets, nothing herein shall
be construed to relieve the Sub-Adviser of responsibility for
compliance with the Trust's Declaration of Trust (as defined herein),
the Prospectus, the instructions and directions of the Board of
Trustees of the Trust, the requirements of the 1940 Act, the Internal
Revenue Code of 1986, and all other applicable federal and state laws
and regulations, as each is amended from time to time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents, and shall promptly furnish the Sub-Adviser with any
amendments thereto:
(a) The Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of the Commonwealth of Massachusetts (such Agreement
and Declaration of Trust, as in effect on the date of this Agreement
and as amended from time to time, herein called the "Declaration of
Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
<PAGE>
(c) Prospectus(es) and Statements of Additional Information of the Fund.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by
the Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s)
which is attached hereto and made part of this Agreement. The fee will
be calculated based on the average monthly market value of the Assets
under the Sub-Adviser's management and will be paid to the Sub-Adviser
monthly. Except as may otherwise be prohibited by law or regulation
(including any then current SEC staff interpretation), the Sub-Adviser
may, in its discretion and from time to time, waive a portion of its
fee.
5. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or
damages (including reasonable attorney's fees and other related
expenses) howsoever arising from or in connection with the performance
of the Sub-Adviser's obligations under this Agreement; provided,
however, that the Sub-Adviser's obligation under this Section 5 shall
be reduced to the extent that the claim against, or the loss, liability
or damage experienced by the Adviser, is caused by or is otherwise
directly related to the Adviser's own willful misfeasance, bad faith or
negligence, or to the reckless disregard of its duties under this
Agreement.
6. DURATION AND TERMINATION. This Agreement shall become effective upon
its approval by the Trust's Board of Trustees and by the vote of a
majority of the outstanding voting securities of the Fund; provided,
however, that at any time the Adviser shall have obtained exemptive
relief from the Securities and Exchange Commission permitting it to
engage a Sub-Adviser without first obtaining approval of the Agreement
from a majority of the outstanding voting securities of the Fund(s)
involved, the Agreement shall become effective upon its approval by the
Trust's Board of Trustees. Any Sub-Adviser so selected and approved
shall be without the protection accorded by shareholder approval of an
investment adviser's receipt of compensation under Section 36(b) of the
1940 Act.
This Agreement shall continue in effect for a period of more than two
years from the date hereof only so long as continuance is specifically
approved at least annually in conformance with the 1940 Act; provided,
however, that this Agreement may be terminated with respect to the Fund
(a) by the Fund at any time, without the payment of any penalty, by the
vote of a majority of Trustees of the Trust or by the vote of a
majority of the outstanding voting securities of the Fund, (b) by the
Adviser at any time, without the payment of any penalty, on not more
than 60 days' nor less than 30 days' written notice to the Sub-Adviser,
or (c) by the Sub-Adviser at any time, without the payment of any
penalty, on 90 days' written notice to the Adviser. This Agreement
shall terminate automatically and immediately in the event of its
assignment, or in the event of a termination of the Adviser's agreement
with the Trust. As used in this Section 6, the terms "assignment" and
"vote of a majority of the outstanding voting securities" shall have
the respective meanings set forth in the 1940 Act and the rules and
regulations thereunder, subject to such exceptions as may be granted by
the SEC under the 1940 Act.
<PAGE>
7. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed
as being inconsistent with the 1940 Act.
8. SEVERABILITY. Should any part of this Agreement be held invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and
their respective successors.
9. NOTICE. Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by
registered, certified or overnight mail, postage prepaid addressed by
the party giving notice to the other party at the last address
furnished by the other party:
To the Adviser at: SEI Investments Management Corporation
One Freedom Valley Road
Oaks, PA 19456
Attention: Legal Department
To the Sub-Adviser at: Robert W. Baird & Co., Incorporated
777 E. Wisconsin Avenue
Milwaukee, Wisconsin 53202.
Attention: Charles Groeschell
With a copy to: Robert W. Baird & Co., Incorporated
777 E. Wisconsin Avenue
Milwaukee, Wisconsin 53202.
Attention: General Counsel
10. SUB-ADVISER'S NAME AND LIKENESS. (a) The Sub-Adviser hereby consents
to, and authorizes, the Adviser, its subsidiaries, affiliates,
licensees, successors, and assigns ("SEI"), the right to use the name,
likeness, image, voice, appearance, and/or performance or any
variations of the foregoing of the Sub-Adviser and any of its employees
(the "Name and Likeness"), on videotape, film, slides, photographs,
audio tape, CD-ROM, DVD, or any other media now known or later
developed ("Media"), in connection with the presentation of information
to SEI's clients or institutional and high net worth prospects
concerning SEI's investment products for which the Sub-Adviser provides
investment management services.
(b) This consent and authorization includes, without limitation, the rights
to use, reproduce, sell, deliver, exhibit, broadcast, and distribute
over the Internet, on CD-ROM, or in any other commercial media for
private or commercial use, any Media containing the Name and Likeness
for the purpose of promoting, explaining, or performing the services
and products offered by SEI.
<PAGE>
(c) No later than two business days following the first use of the Name and
Likeness in a particular Media, SEI shall notify the Sub-Adviser of
such use. No later than three business days following the Sub-Adviser's
receipt of such notice (hereinafter, the "Objection Period"), the
Sub-Adviser may notify SEI of a reasonable objection to the use of the
Name and Likeness. In the event that the Sub-Adviser fails to notify
SEI of an objection during the Objection Period, the use of the Name
and Likeness by SEI shall be deemed authorized and approved by the
Sub-Adviser. In the event that the Sub-Adviser notifies SEI of an
objection during the Objection Period, it shall be SEI's option to
either terminate the use of the Name and Likeness in such Media or take
action, to the reasonable satisfaction of the Sub-Adviser, to remedy
the deficiency upon which the objection is based, at which time the use
by SEI shall be deemed authorized and approved by the Sub-Adviser.
(d) All communications containing the Name and Likeness shall be timely and
accurate and shall comply with all applicable laws and regulations,
including, without limitation, the rules of the Securities and Exchange
Commission and the National Association of Securities Dealers. SEI will
make all necessary filings of said communications with any applicable
regulatory authority. Any use of the Name and Likeness will include,
where applicable, proper attribution to the Sub-Adviser.
(e) The Sub-Adviser assigns and agrees to assign to SEI any and all rights
including the copyright in and to any Media made by or for SEI that
contains the Name and Likeness, provided, however, that such assignment
shall not transfer Sub-Adviser's intellectual property rights to any
materials included in the Media. The Sub-Adviser agrees to execute at a
future date any further documents that may be necessary to perfect
SEI's ownership of all rights in any works containing the same.
(f) The Sub-Adviser releases and discharges SEI from any liability by
virtue of any blurring, audio or video distortion, alteration, optical
illusion, or other use in any Media that contains the Name and
Likeness.
(g) The Sub-Adviser warrants and represents that this release does not in
any way conflict with any existing commitment made by it.
Notwithstanding the foregoing, in no event will SEI knowingly or
intentionally use the Name and Likeness in a manner that would
adversely affect the Sub-Adviser's goodwill or reputation.
11. NON-HIRE/NON-SOLICITATION. The parties hereby agree that so long as
the Sub-Adviser provides services to the Adviser or the Trust and for a
period of one year following the date on which the Sub-Adviser ceases
to provide services to the Adviser and the Trust, neither party shall
for any reason, directly or indirectly, on its own behalf or on behalf
of others, hire or solicit any person employed by the other party,
whether or not such person is a full-time employee or whether or not
any person's employment is pursuant to a written agreement or is
at-will. The parties further agree that, to the extent that a party
breaches the covenant described in this paragraph, the other party
shall be entitled to pursue all appropriate remedies in law or equity.
<PAGE>
12. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject
matter. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
A copy of the Declaration of Trust is on file with the Secretary of
State of the Commonwealth of Massachusetts, and notice is hereby given that the
obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of the Fund or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI INVESTMENTS MANAGEMENT CORPORATION ROBERT W. BAIRD & CO., INCORPORATED
By: /s/ Todd B. Cipperman By: /s/ Charles B. Groesschell
------------------------------- --------------------------------
Name: Todd B. Cipperman Name: Charles B. Groeschell
----------------------------- ------------------------------
Title: Senior Vice President Title: Managing Director
---------------------------- -----------------------------
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
ROBERT W. BAIRD & CO., INCORPORATED
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
<TABLE>
<S> <C>
SEI VP Core Fixed Income Fund 0.08%
</TABLE>
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSURANCE PRODUCTS TRUST
AGREEMENT made this 15th day of February, 2000, between SEI Investments
0Management Corporation, (the "Adviser") and Sawgrass Asset Management, L.L.C.
(the "Sub-Adviser").
WHEREAS, SEI Insurance Products Trust, a Massachusetts business trust
(the "Trust"), is registered as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated March 29, 1999 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the SEI VP Small Cap Growth
Fund (the "Fund"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain
the Sub-Adviser to provide investment advisory services to the Adviser in
connection with the management of the Fund, and the Sub-Adviser is willing to
render such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and
the Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Fund entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the
Assets, in accordance with the Fund's investment objectives, policies
and restrictions as stated in the Fund's prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, in consultation with and subject to the
direction of the Adviser, determine from time to time what Assets will
be purchased, retained or sold by the Fund, and what portion of the
Assets will be invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement,
the Sub-Adviser shall act in conformity with the Trust's Declaration of
Trust (as defined herein) and the Prospectus and with the instructions
and directions of the Adviser and of the Board of Trustees of the Trust
and will conform to and comply with the requirements of the 1940 Act,
the Internal Revenue Code of 1986, and all other applicable federal and
state laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by
the Fund as provided in subparagraph (a) and will place orders with or
through such persons, brokers or dealers to carry out the policy with
respect to brokerage set forth in the Fund's Registration Statement (as
defined herein) and Prospectus or as the Board of Trustees or the
Adviser may direct from time to time, in conformity with federal
securities laws. In executing Fund
<PAGE>
transactions and selecting brokers or dealers, the Sub-Adviser will use
its best efforts to seek on behalf of the Fund the best overall terms
available. In assessing the best overall terms available for any
transaction, the Sub-Adviser shall consider all factors that it deems
relevant, including the breadth of the market in the security, the
price of the security, the financial condition and execution capability
of the broker or dealer, and the reasonableness of the commission, if
any, both for the specific transaction and on a continuing basis. In
evaluating the best overall terms available, and in selecting the
broker-dealer to execute a particular transaction, the Sub-Adviser may
also consider the brokerage and research services provided (as those
terms are defined in Section 28(e) of the Securities Exchange Act of
1934). Consistent with any guidelines established by the Board of
Trustees of the Trust, the Sub-Adviser is authorized to pay to a broker
or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for the Fund which is
in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction if, but only if, the
Sub-Adviser determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer - - viewed in terms of that
particular transaction or terms of the overall responsibilities of the
Sub-Adviser to the Fund. In addition, the Sub-Adviser is authorized to
allocate purchase and sale orders for securities to brokers or dealers
(including brokers and dealers that are affiliated with the Adviser,
Sub-Adviser or the Trust's principal underwriter) to take into account
the sale of shares of the Trust if the Sub-Adviser believes that the
quality of the transaction and the commission are comparable to what
they would be with other qualified firms. In no instance, however, will
the Fund's Assets be purchased from or sold to the Adviser,
Sub-Adviser, the Trust's principal underwriter, or any affiliated
person of either the Trust, Adviser, the Sub-Adviser or the principal
underwriter, acting as principal in the transaction, except to the
extent permitted by the Securities and Exchange Commission ("SEC") and
the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5),
(6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the
1940 Act. The Sub-Adviser shall provide to the Adviser or the Board of
Trustees such periodic and special reports, balance sheets or financial
information, and such other information with regard to its affairs as
the Adviser or Board of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and
shall timely furnish to the Adviser all information relating to the
Sub-Adviser's services under this Agreement needed by the Adviser to
keep the other books and records of the Fund required by Rule 31a-1
under the 1940 Act. The Sub-Adviser shall also furnish to the Adviser
any other information relating to the Assets that is required to be
filed by the Adviser or the Trust with the SEC or sent to shareholders
under the 1940 Act (including the rules adopted thereunder) or any
exemptive or other relief that the Adviser or the Trust obtains from
the SEC. The Sub-Adviser agrees that all records that it maintains on
behalf of the Fund are property of the Fund and the Sub-Adviser will
surrender promptly to the Fund any of such records upon the Fund's
request; provided, however, that the Sub-Adviser may retain a copy of
such records. In addition, for
2
<PAGE>
the duration of this Agreement, the Sub-Adviser shall preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act any such records as
are required to be maintained by it pursuant to this Agreement, and
shall transfer said records to any successor sub-adviser upon the
termination of this Agreement (or, if there is no successor
sub-adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Fund's custodian on each business
day with information relating to all transactions concerning the Fund's
Assets and shall provide the Adviser with such information upon request
of the Adviser.
(f) The investment management services provided by the Sub-Adviser under
this Agreement are not to be deemed exclusive and the Sub-Adviser shall
be free to render similar services to others, as long as such services
do not impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill
its commitment under this Agreement.
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held in the Fund. The Adviser shall instruct the custodian
and other parties providing services to the Fund to promptly forward
misdirected proxies to the Sub-Adviser.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners,
officers or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have
responsibility for all services to be provided to the Fund pursuant to
the Advisory Agreement and shall oversee and review the Sub-Adviser's
performance of its duties under this Agreement; provided, however, that
in connection with its management of the Assets, nothing herein shall
be construed to relieve the Sub-Adviser of responsibility for
compliance with the Trust's Declaration of Trust (as defined herein),
the Prospectus, the instructions and directions of the Board of
Trustees of the Trust, the requirements of the 1940 Act, the Internal
Revenue Code of 1986, and all other applicable federal and state laws
and regulations, as each is amended from time to time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of the Commonwealth of Massachusetts (such Agreement
and Declaration of Trust, as in effect on the date of this Agreement
and as amended from time to time, herein called the "Declaration of
Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Fund.
3
<PAGE>
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by
the Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s)
which is attached hereto and made part of this Agreement. The fee will
be calculated based on the average monthly market value of the Assets
under the Sub-Adviser's management and will be paid to the Sub-Adviser
monthly. Except as may otherwise be prohibited by law or regulation
(including any then current SEC staff interpretation), the Sub-Adviser
may, in its discretion and from time to time, waive a portion of its
fee.
5. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or
damages (including reasonable attorney's fees and other related
expenses) howsoever arising from or in connection with the performance
of the Sub-Adviser's obligations under this Agreement; provided,
however, that the Sub- Adviser's obligation under this Section 5 shall
be reduced to the extent that the claim against, or the loss, liability
or damage experienced by the Adviser, is caused by or is otherwise
directly related to the Adviser's own willful misfeasance, bad faith or
negligence, or to the reckless disregard of its duties under this
Agreement.
6. DURATION AND TERMINATION. This Agreement shall become effective upon
its approval by the Trust's Board of Trustees and by the vote of a
majority of the outstanding voting securities of the Fund; provided,
however, that at any time the Adviser shall have obtained exemptive
relief from the Securities and Exchange Commission permitting it to
engage a Sub-Adviser without first obtaining approval of the Agreement
from a majority of the outstanding voting securities of the Fund(s)
involved, the Agreement shall become effective upon its approval by the
Trust's Board of Trustees. Any Sub-Adviser so selected and approved
shall be without the protection accorded by shareholder approval of an
investment adviser's receipt of compensation under Section 36(b) of the
1940 Act.
This Agreement shall continue in effect for a period of more than two
years from the date hereof only so long as continuance is specifically
approved at least annually in conformance with the 1940 Act; provided,
however, that this Agreement may be terminated with respect to the Fund
(a) by the Fund at any time, without the payment of any penalty, by the
vote of a majority of Trustees of the Trust or by the vote of a
majority of the outstanding voting securities of the Fund, (b) by the
Adviser at any time, without the payment of any penalty, on not more
than 60 days' nor less than 30 days' written notice to the Sub-Adviser,
or (c) by the Sub-Adviser at any time, without the payment of any
penalty, on 90 days' written notice to the Adviser. This Agreement
shall terminate automatically and immediately in the event of its
assignment, or in the event of a termination of the Adviser's agreement
with the Trust. As used in this Section 6, the terms "assignment" and
"vote of a majority of the outstanding voting securities" shall have
the respective meanings set forth in the 1940 Act and the rules and
regulations thereunder, subject to such exceptions as may be granted by
the SEC under the 1940 Act.
7. GOVERNING LAW. This Agreement shall be governed by the internal laws
of the
4
<PAGE>
Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed
as being inconsistent with the 1940 Act.
8. SEVERABILITY. Should any part of this Agreement be held invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and
their respective successors.
9. NOTICE: Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by
registered, certified or overnight mail, postage prepaid addressed by
the party giving notice to the other party at the last address
furnished by the other party:
To the Adviser at: SEI Investments Management Corporation
One Freedom Valley Road
Oaks, PA 19456
Attention: Legal Department
To the Sub-Adviser at: Sawgrass Asset Management, L.L.C.
4337 Pablo Oaks Court
Jacksonville, FL 32224
Attention: Brian Monroe
10. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject
matter. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
A copy of the Declaration of Trust is on file with the Secretary of
State of the Commonwealth of Massachusetts, and notice is hereby given that the
obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of the Fund or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI INVESTMENTS MANAGEMENT CORPORATION SAWGRASS ASSET MANAGEMENT, L.L.C.
By: /s/ Cynthia M. Parrish By: /s/ Brian K. Monroe
---------------------------- -------------------------
Name: Cynthia M. Parrish Name: Brian K. Monroe
-------------------------- -----------------------
Title: Vice President Title: Principal
------------------------- ----------------------
6
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
SAWGRASS ASSET MANAGEMENT, L.L.C.
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
<TABLE>
<S> <C>
SEI VP Small Cap Growth Fund 0.50%
</TABLE>
7
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSURANCE PRODUCTS TRUST
AGREEMENT made as of this ___ day of April, 2000, between SEI
Investments Management Corporation (the "Adviser") and Schroder Investment
Management North America Inc. (the "Sub-Adviser").
WHEREAS, SEI Insurance Products Trust, a Massachusetts business trust
(the "Trust"), is registered as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated March 29, 1999 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the SEI VP Emerging Markets
Equity Fund (the "Fund"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain
the Sub-Adviser to provide investment advisory services to the Adviser in
connection with the management of the Fund, and the Sub-Adviser is willing to
render such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and
the Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Fund entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the
Assets, in accordance with the Fund's investment objectives, policies
and restrictions as stated in Schedule A attached hereto and in the
Fund's prospectus and statement of additional information, as currently
in effect and as amended or supplemented from time to time and provided
to the Sub-Adviser (referred to collectively as the "Prospectus"), and
subject to the following:
(a) The Sub-Adviser shall, in consultation with and subject to the
direction of the Adviser, determine from time to time what Assets will
be purchased, retained or sold by the Fund, and what portion of the
Assets will be invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement,
the Sub-Adviser shall act in conformity with the Trust's Declaration of
Trust (as defined herein) and the Prospectus and with the written
instructions and directions of the Adviser and of the Board of Trustees
of the Trust and will conform to and comply with the requirements of
the 1940 Act, the Internal Revenue Code of 1986, and all other
applicable federal and state laws and regulations, as each is amended
from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by
the Fund as provided in subparagraph (a) and will place orders with or
through such persons, brokers or dealers to carry out the policy with
respect to brokerage set forth in the Fund's Registration
1
<PAGE>
Statement (as defined herein) and Prospectus or as the Board of
Trustees or the Adviser may direct in writing from time to time, in
conformity with federal securities laws. In executing Fund transactions
and selecting brokers or dealers, the Sub-Adviser will not be required
to direct brokerage and will use its best efforts to seek on behalf of
the Fund the best overall terms available. In assessing the best
overall terms available for any transaction, the Sub-Adviser shall
consider all factors that it deems relevant, including the breadth of
the market in the security, the price of the security, the financial
condition and execution capability of the broker or dealer, and the
reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis. In evaluating the best overall
terms available, and in selecting the broker-dealer to execute a
particular transaction, the Sub-Adviser may also consider the brokerage
and research services provided (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934). Consistent with any
guidelines established by the Board of Trustees of the Trust and
provided to the Sub-Adviser, the Sub-Adviser is authorized to pay to a
broker or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for the Fund which is
in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction if, but only if, the
Sub-Adviser determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer -- viewed in terms of that
particular transaction or terms of the overall responsibilities of the
Sub-Adviser to the Fund. In addition, the Sub-Adviser is authorized to
allocate purchase and sale orders for securities to brokers or dealers
(including brokers and dealers that are affiliated with the Adviser,
Sub-Adviser or the Trust's principal underwriter) if the Sub-Adviser
believes that the quality of the transaction and the commission are
comparable to what they would be with other qualified firms. In no
instance, however, will the Fund's Assets be purchased from or sold to
the Adviser, Sub-Adviser, the Trust's principal underwriter, or any
affiliated person of either the Trust, Adviser, the Sub-Adviser or the
principal underwriter, acting as principal in the transaction, except
to the extent permitted by the Securities and Exchange Commission
("SEC") and the 1940 Act. Notwithstanding any other provision in this
Agreement and documents referenced therein, in the execution of
transactions for the Fund, the Sub-Adviser is authorized to select any
broker or dealer which in the Sub-Adviser's opinion is capable of
properly executing the transaction or transactions then under
consideration in a manner which is most beneficial to the Fund.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5),
(6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the
1940 Act. The Sub-Adviser shall provide to the Adviser or the Board of
Trustees such periodic and special reports, balance sheets or financial
information, and such other information with regard to its affairs as
the Adviser or Board of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and
shall timely furnish to the Adviser all information relating to the
Sub-Adviser's services under this Agreement needed by the Adviser to
keep the other books and records of the Fund required by Rule 31a-1
under the
2
<PAGE>
1940 Act. The Sub-Adviser shall also furnish to the Adviser any other
information relating to the Assets that is required to be filed by the
Adviser or the Trust with the SEC or sent to shareholders under the
1940 Act (including the rules adopted thereunder) or any exemptive or
other relief that the Adviser or the Trust obtains from the SEC, and
will make all filings required to be made by the Sub-Adviser under
Section 13 of the Securities Act of 1933 and the related rules and
forms. The Sub-Adviser agrees that all records that it maintains on
behalf of the Fund are property of the Fund and the Sub-Adviser will
surrender promptly to the Fund any of such records upon the Fund's
request; provided, however, that the Sub-Adviser may retain a copy of
such records. In addition, for the duration of this Agreement, the
Sub-Adviser shall preserve for the periods prescribed by Rule 31a-2
under the 1940 Act any such records as are required to be maintained by
it pursuant to this Agreement, and shall transfer said records to any
successor sub-adviser upon the termination of this Agreement (or, if
there is no successor sub-adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Fund's custodian on each business day
with information relating to all transactions on such day concerning
the Assets and shall provide the Adviser with such information upon
request of the Adviser.
(f) The investment management services provided by the Sub-Adviser under
this Agreement are not to be deemed exclusive and the Sub-Adviser shall
be free to render similar services to others, as long as such services
do not materially impair the services rendered to the Adviser or the
Trust. The Adviser understands that the Sub-Adviser's affiliates offer
a broad range of brokerage and investment banking services, that the
employees of the Sub-Adviser and its affiliates may from time to time
act as directors, officers, or employees of companies whose securities
are publicly traded, and that as a result, such employees may acquire
information of a confidential nature. The Adviser agrees that the
Sub-Adviser may, but shall not be required to, render investment advice
with respect to any such company, and that the Sub-Adviser may in its
discretion withhold any such knowledge or information or refuse to
advise with respect to such company, whether or not the Assets shall
include securities of such company, if in the Sub-Adviser's judgment
the disclosure of such knowledge or information or the rendering of
investment advice on the basis thereof would be unfair, inequitable, a
breach of any fiduciary obligation of the Sub-Adviser to some other
person, or unlawful. For the same reasons, the Sub-Adviser may, in its
discretion, exclude securities and other property from the Assets, and
the Sub-Adviser shall not be required to give advice on securities and
other property which it or its affiliates have distributed, are
distributing or propose to distribute.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition it may incur that is likely to impair the Sub-Adviser's
ability to fulfill its commitment under this Agreement.
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held in the Fund. The Adviser shall instruct the custodian
and other parties providing services to the Fund to promptly forward
proxies to the Sub-Adviser.
3
<PAGE>
(i) Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners,
officers or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have
responsibility for all services to be provided to the Fund pursuant to
the Advisory Agreement and shall oversee and review the Sub-Adviser's
performance of its duties under this Agreement; provided, however, that
in connection with its management of the Assets, nothing herein shall
be construed to relieve the Sub-Adviser of responsibility for
compliance with the Trust's Declaration of Trust (as defined herein),
the Prospectus, the written instructions and directions of the Board of
Trustees of the Trust, the requirements of the 1940 Act, the Internal
Revenue Code of 1986, and all other applicable federal and state laws
and regulations, as each is amended from time to time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of the Commonwealth of Massachusetts (such Agreement
and Declaration of Trust, as in effect on the date of this Agreement
and as amended from time to time, herein called the "Declaration of
Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Current Prospectus(es) of the Fund with Amendments.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in Schedule B which
is attached hereto and made part of this Agreement. The fee will be
calculated based on the average monthly market value of the Assets
under the Sub-Adviser's management and will be paid to the Sub-Adviser
monthly.
5. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or
damages (including reasonable attorney's fees and other related
expenses) howsoever arising from or in connection with any breach of
this Agreement or negligence, willful default, fraud or bad faith of
the Sub-Adviser in the performance of its duties hereunder or as
otherwise may be required by law.
6. DURATION AND TERMINATION. This Agreement shall become effective upon
its approval by the Trust's Board of Trustees and by the vote of a
majority of the outstanding voting securities of the Fund; provided,
however, that at any time the Adviser shall have obtained exemptive
relief from the Securities and Exchange Commission permitting it to
engage a Sub-Adviser without first obtaining approval of the Agreement
from a majority of the
4
<PAGE>
outstanding voting securities of the Fund(s) involved, the Agreement
shall become effective upon its approval by the Trust's Board of
Trustees. Any Sub-Adviser so selected and approved shall be without the
protection accorded by shareholder approval of an investment adviser's
receipt of compensation under Section 36(b) of the 1940 Act.
This Agreement shall continue in effect for a period of more than two
years from the date hereof only so long as continuance is specifically
approved at least annually in conformance with the 1940 Act; provided,
however, that this Agreement may be terminated with respect to the Fund
(a) by the Fund at any time, without the payment of any penalty, by the
vote of a majority of Trustees of the Trust or by the vote of a
majority of the outstanding voting securities of the Fund, (b) by the
Adviser at any time, without the payment of any penalty, on not more
than 60 days' nor less than 30 days' written notice to the Sub-Adviser,
or (c) by the Sub-Adviser at any time, without the payment of any
penalty, on 90 days' written notice to the Adviser. This Agreement
shall terminate automatically and immediately in the event of its
"assignment", or in the event of a termination of the Adviser's
agreement with the Trust. As used in this Section 6, the terms
"assignment" and "vote of a majority of the outstanding voting
securities" shall have the respective meanings set forth in the 1940
Act and the rules and regulations thereunder, subject to such
exceptions as may be granted by the SEC under the 1940 Act.
7. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed
as being inconsistent with the 1940 Act.
8. SEVERABILITY. Should any part of this Agreement be held invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and
their respective successors.
9. NOTICE. Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by
registered, certified or overnight mail, postage prepaid addressed by
the party giving notice to the other party at the last address
furnished by the other party:
To the Adviser at: SEI Investments Management Corporation
One Freedom Valley Road
Oaks, PA 19456
Attention: Legal Department
To the Sub-Adviser at: Schroder Investment Management North
America Inc.
787 Seventh Avenue, 34th Floor
New York, NY 10019-6091
Attention: Mark Bridgeman
5
<PAGE>
cc: Schroder Investment
Management Limited
31 Graham Street
London EC2V7QA England
Attn: David Ridgway
Notice shall be effective upon receipt.
10. NON-HIRE/NON-SOLICITATION. The parties hereby agree that so long as the
Sub-Adviser provides services to the Adviser or the Trust and for a
period of one year following the date on which the Sub-Adviser ceases
to provide services to the Adviser and the Trust, neither party shall
for any reason, directly or indirectly, on its own behalf or on behalf
of others, hire or solicit any person employed by the other party,
whether or not such person is a full-time employee or whether or not
any person's employment is pursuant to a written agreement or is
at-will. The parties further agree that, to the extent that a party
breaches the covenant described in this paragraph, the other party
shall be entitled to pursue all appropriate remedies in law or equity.
11. REPRESENTATIONS OF THE SUB-ADVISER. The Sub-Adviser represents that it
is registered as an investment adviser under the Investment Advisers
Act of 1940 and is regulated in the conduct of its investment business
in the United Kingdom by the Investment Management Regulatory
Organisation Limited ("IMRO"). The Sub-Adviser confirms that the
Adviser is a Non-private Customer as defined by IMRO, and the Adviser
confirms that it has taken independent legal advice on this Agreement.
12. LIABILITY OF THE SUB-ADVISER. (i) The Sub-Adviser shall not be liable
for any loss or damage arising out of the performance of its duties
hereunder unless such loss or damage arose out of or in connection with
its breach of this Agreement or its negligence, willful default, bad
faith, or fraud in the performance of its duties hereunder. (ii) As the
Assets are held in the custody of State Street Bank and Trust Company,
the Sub-Adviser shall have no responsibility or liability with respect
to custody arrangements or the acts, omissions or other conduct of any
custodian or sub-custodian of the Assets. (iii) The presence of any
exculpatory language in this Agreement shall not be deemed by the
Adviser, the Fund, the Sub-Adviser, any custodian or party appointed
pursuant to this Agreement as in any way limiting causes of action and
remedies which may, notwithstanding such language, be available either
under common law or statutory law principles applicable to fiduciary
relationships or under U.S. federal securities laws.
13. DISCLOSURE. The Adviser confirms that it has received, not less than 48
hours prior to signing this Agreement, Part II of Form ADV of the
Sub-Adviser.
14. APPLICABLE LAW. This Agreement shall be construed in accordance with
and governed by the laws of the State of New York without regard to its
conflicts of laws or principles thereof.
15. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding
6
<PAGE>
between the parties hereto, and supersedes all prior agreements and
understandings relating to this Agreement's subject matter. This
Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall,
together, constitute only one instrument.
A copy of the Declaration of Trust is on file with the Secretary of
State of the Commonwealth of Massachusetts, and notice is hereby given that the
obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of the Fund or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI INVESTMENTS MANAGEMENT CORPORATION SCHRODER INVESTMENT MANAGEMENT NORTH
AMERICA INC.
By: By:
----------------------------------- -----------------------------------
Name: Name:
--------------------------------- ---------------------------------
Title: Title:
-------------------------------- --------------------------------
7
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
SCHRODER INVESTMENT MANAGEMENT NORTH AMERICA INC.
SEI INVESTMENTS
Emerging Markets Equity
Objectives, Guidelines & Reporting Requirements
Global Emerging Markets Mandate
SUB-ADVISOR: SCHRODER INVESTMENT MANAGEMENT NORTH AMERICA
Effective Date: __________
These objectives, guidelines and reporting requirements cover each Account
("Account") related to the SEI Emerging Markets Equity Strategies listed below.
The Sub-Adviser shall manage the assets within the terms of the Investment
Sub-Advisory Agreement, the Prospectus and the Statement of Additional
Information of the Fund or those policies and guidelines specific to a separate
account agreement each subject to the following. In the event that these
objectives are less restrictive or conflict with the three formal documents or
separate account agreement described above, those documents supersede the
objectives and guidelines outlined below. However, these objectives and
guidelines are intended to further specify the broad terms stated in the formal
documents listed above.
These objectives and guidelines apply to the following accounts and should be
followed by all additional accounts initiated after the effective date of this
document unless specifically stated. This list will be updated as needed.
SIT International Strategy (SIT)
SEI Global Master Funds (Offshore) *
Primus Emerging Markets Equity
SEI/Mediolanum Alpha Fund (Mediolanum)
SEI Insurance Product Trust (SIPT)
*See Appendix 1 hereto for differences in Offshore mandate
PERFORMANCE OBJECTIVE
On a rolling three-year basis, the objective is to achieve an annualized return
of 4.0%, net of fees, in excess of the returns generated by the MSCI EMF Index
(the "Benchmark"). Performance attribution should demonstrate stock selection
consistently adding to excess returns.
8
<PAGE>
GUIDELINES AND RESTRICTIONS
PERMITTED INVESTMENTS
In seeking to achieve the Performance Objective, the Subadvisor should invest
primarily in equity securities of issuers domiciled in, or organized under the
laws of, the countries that comprise the MSCI EMF Index, subject to the
guidelines or restrictions expressed in Table 1.
For the purposes of these guidelines, equity securities are defined to include
common stocks, securities convertible into common stocks, preferred stocks,
warrants and rights to subscribe to common stocks. The Subadvisor may also
invest in appropriate issuers through depository receipts including American
Depository Receipts and Global Depository Receipts. Securities should be readily
marketable. No holding should exceed its benchmark weight + 5%. If the security
is not in the benchmark then the maximum weight of that security should not
exceed 5% of the portfolio. Buying on margin and short selling are not
permitted. Please refer to the SEI International Trust Prospectus for a listing
of Permitted Investments.
COUNTRY AND REGIONAL EXPOSURES
Table 1 shows the MSCI EMF Index Country weights. The guidelines are put in
place to insure that the majority of total active risk (tracking error) should
come from specific asset risk and not from country exposure risk.
Subject to prior approval of SEI Asset Management, the Subadvisor may invest up
to 10% of the Mandate's assets in non-benchmark countries. The Subadvisor may
invest up to 5% of the Mandate's assets in individual non-benchmark countries
included in the MSCI World Index, subject to the condition that those
investments should derive more than 50% of their revenues or have more than 50%
of their assets in the emerging market countries. Investment in American
Depositary Receipts and Global Depository Receipts of Global Emerging Markets
issuers is permitted.
Table 1
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
COUNTRY MAXIMUM WEIGHT MINIMUM WEIGHT INVESTMENT VEHICLE
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Argentina Bnmk + 5% Bnmk - 5% Local / ADR
- -----------------------------------------------------------------------------
Brazil Bnmk + 10% Bnmk - 10% Local / ADR
- -----------------------------------------------------------------------------
Chile Bnmk + 5% Bnmk - 5% ADR
- -----------------------------------------------------------------------------
China Bnmk + 5% Bnmk - 5% Local / ADR
- -----------------------------------------------------------------------------
Colombia Bnmk + 5% Bnmk - 5% ADR
- -----------------------------------------------------------------------------
Czech Republic Bnmk + 5% Bnmk - 5% Local / ADR
- -----------------------------------------------------------------------------
Greece Bnmk + 10% Bnmk - 10% Local / ADR
- -----------------------------------------------------------------------------
Hungary Bnmk + 5% Bnmk - 5% Local / ADR
- -----------------------------------------------------------------------------
India Bnmk + 10% Bnmk - 10% ADR
- -----------------------------------------------------------------------------
Indonesia Bnmk + 5% Bnmk - 5% Local / ADR
- -----------------------------------------------------------------------------
Israel Bnmk + 5% Bnmk - 5% Local / ADR
- -----------------------------------------------------------------------------
Korea Bnmk + 15% Bnmk - 15% Local / ADR
- -----------------------------------------------------------------------------
9
<PAGE>
- -----------------------------------------------------------------------------
Malaysia Bnmk + 10% Bnmk - 10% Local / ADR
- -----------------------------------------------------------------------------
Mexico Bnmk + 15% Bnmk - 15% Local / ADR
- -----------------------------------------------------------------------------
Pakistan Bnmk + 5% Bnmk - 5% Not Permitted
- -----------------------------------------------------------------------------
Peru Bnmk + 5% Bnmk - 5% Local / ADR
- -----------------------------------------------------------------------------
Philippines Bnmk + 5% Bnmk - 5% Local / ADR
- -----------------------------------------------------------------------------
Poland Bnmk + 5% Bnmk - 5% Local / ADR
- -----------------------------------------------------------------------------
South Africa Bnmk + 15% Bnmk - 15% Local / ADR
- -----------------------------------------------------------------------------
Sri Lanka Bnmk + 5% Bnmk - 5% Not Permitted
- -----------------------------------------------------------------------------
Taiwan Bnmk + 15% Bnmk - 15% Local / ADR
- -----------------------------------------------------------------------------
Thailand Bnmk + 5% Bnmk - 5% Local / ADR
- -----------------------------------------------------------------------------
Turkey Bnmk + 5% Bnmk - 5% Local / ADR
- -----------------------------------------------------------------------------
Russia* Bnmk + 5% Bnmk - 5% Local** / ADR
- -----------------------------------------------------------------------------
Venezuela Bnmk + 5% Bnmk - 5% Local / ADR
- -----------------------------------------------------------------------------
</TABLE>
*ADR investment only in Mediolanum account
** Only RTS (Russian Trading Syatem) allowed when investing in local shares.
Table 2 below contains the regional target allocations and ranges for the
manages sub accounts. Holdings outside of these ranges may be maintained only
after consultation with SEI.
Table 2
<TABLE>
<CAPTION>
- ---------------------------------------------------------------
REGIONAL EXPOSURES MAXIMUM MINIMUM
- ---------------------------------------------------------------
<S> <C> <C>
Latin America Bnmk + 20% Bnmk - 20%
- ---------------------------------------------------------------
Asia Bnmk + 20% Bnmk - 20%
- ---------------------------------------------------------------
Europe Bnmk + 20% Bnmk - 20%
- ---------------------------------------------------------------
EMEA Bnmk + 20% Bnmk - 20%
- ---------------------------------------------------------------
</TABLE>
CURRENCY MANAGEMENT
This mandate is unhedged. Hedging should NOT be undertaken for the purposes of
enhancing returns. Currency hedging may be used strictly and only to cover
anticipated purchases and sales of securities.
CASH MANAGEMENT
The Fund should be FULLY INVESTED AT ALL TIMES. SEI will be managing cash flows
within the fund and will maintain a cash balance for any withdrawals to the
Fund. The Global Emerging Markets manager will be notified of additional cash
flows into the portfolio by SEI on a timely basis.
When possible the fully invested fund should be targeted at a cash level less
than 1.5% of the account's assets. It is understood that due to transactional
issues or settlement delays, the account could reach a maximum of 3.0% cash or
be in an overdraft position. However, this would be considered an aberration
from normal practice and when breached, a conversation should be initiated
10
<PAGE>
with SEI. In order to facilitate a low cash percentage in the Sub-Advisers
portfolio, SEI Investments will manage cash flows within the SEI portfolio. The
Sub-Adviser will be notified by SEI Investments of any potential cash flows into
or out of the Sub-Advisers portfolio on a timely basis.
ACCOUNT DISPERSION
Because each account managed for SEI Investments is similar, dispersion among
the accounts should be minimized. However, due to uneven funding schedules,
performance between accounts may differ. The dispersion should be kept to within
1.0% annually among all accounts managed for SEI Investments.
REPORTING REQUIREMENTS
MONTHLY REPORTING
- - Please e-mail or fax a report of the monthly return for each of the
accounts managed on SEI's behalf
- - Conference call between the SEI analyst and one of the fund's portfolio
manager
- - Any material organizational changes
- - Any material changes in assets under management
QUARTERLY REPORTING
- - Quarterly performance questionnaire
- - Quarterly compliance questionnaire
- - Reported composite Information
ANNUAL REPORTING
- - An annual review of the markets and organization
- - Attend mutual fund board meeting once every two years
ORGANIZATION/OWNERSHIP CHANGES
The Sub-advisor will provide prompt notification of material changes in
ownership or key personnel. This includes, but is not limited to, the addition
or departure of any executive, portfolio manager, analyst, trader, marketing or
servicing personnel and/or any other individual significant to the investment
process or functioning of the overall business.
INVESTMENT PROCESS CHANGES
The Sub-advisor will provide prompt notification of material changes to the
investment process. This includes, but is not limited to, changes in philosophy,
universe screening models, valuation models, and portfolio construction
methodologies.
11
<PAGE>
APPENDIX 1 to SCHEDULE A
SEI INVESTMENTS
Global Master Funds Equity
Objectives, Guidelines & Reporting Requirements
Global Emerging Markets Mandate
SUB-ADVISOR: SCHRODER INVESTMENT MANAGEMENT NORTH AMERICA
Effective Date:
These objectives, guidelines and reporting requirements cover each Account
("Account") related to the SEI Emerging Markets Equity Strategies listed below.
The Subadvisor shall manage the assets within the terms of the Investment
Sub-Advisory Agreement, the Prospectus and the Statement of Additional
Information of the Fund or those policies and guidelines specific to a separate
account agreement each subject to the following. In the event that these
objectives are less restrictive or conflict with the three formal documents or
separate account agreement described above, those documents supersede the
objectives and guidelines outlined below. However, these objectives and
guidelines are intended to further specify the broad terms stated in the formal
documents listed above.
PERFORMANCE OBJECTIVE
On a rolling three-year basis, the objective is to achieve an annualized return
of 4.0%, gross of fees, in excess of the returns generated by the MSCI EMF Index
ex South Africa (the "Benchmark").
COUNTRY AND REGIONAL EXPOSURES
This sub account has the same guidelines, restrictions and reporting
requirements as the other sub accounts managed for SEI. The only exception is
the country exposures as outlined in Table 3
Table 3
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
COUNTRY MAXIMUM WEIGHT MINIMUM WEIGHT INVESTMENT VEHICLE
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Argentina Bnmk + 5% Bnmk - 5% Local / ADR
- ------------------------------------------------------------------------------
Brazil Bnmk + 10% Bnmk - 10% Local / ADR
- ------------------------------------------------------------------------------
Chile Bnmk + 5% Bnmk - 5% ADR
- ------------------------------------------------------------------------------
China Bnmk + 5% Bnmk - 5% Local / ADR
- ------------------------------------------------------------------------------
Colombia Bnmk + 5% Bnmk - 5% ADR
- ------------------------------------------------------------------------------
Czech Republic Bnmk + 5% Bnmk - 5% Local / ADR
- ------------------------------------------------------------------------------
Greece Bnmk + 10% Bnmk - 10% Local / ADR
- ------------------------------------------------------------------------------
Hungary Bnmk + 5% Bnmk - 5% Local / ADR
- ------------------------------------------------------------------------------
India Bnmk + 10% Bnmk - 10% ADR
- ------------------------------------------------------------------------------
Indonesia Bnmk + 5% Bnmk - 5% Local / ADR
- ------------------------------------------------------------------------------
Israel Bnmk + 5% Bnmk - 5% Local / ADR
- ------------------------------------------------------------------------------
Korea Bnmk + 15% Bnmk - 15% Local / ADR
- ------------------------------------------------------------------------------
12
<PAGE>
- ------------------------------------------------------------------------------
Mexico Bnmk + 15% Bnmk - 15% Local / ADR
- ------------------------------------------------------------------------------
Pakistan Bnmk + 5% Bnmk - 5% Not Permitted
- ------------------------------------------------------------------------------
Peru Bnmk + 5% Bnmk - 5% Local / ADR
- ------------------------------------------------------------------------------
Philippines Bnmk + 5% Bnmk - 5% Local / ADR
- ------------------------------------------------------------------------------
Poland Bnmk + 5% Bnmk - 5% Local / ADR
- ------------------------------------------------------------------------------
South Africa 10% 0% Local / ADR
- ------------------------------------------------------------------------------
Sri Lanka Bnmk + 5% Bnmk - 5% Not Permitted
- ------------------------------------------------------------------------------
Taiwan Bnmk + 15% Bnmk - 15% Local / ADR
- ------------------------------------------------------------------------------
Thailand Bnmk + 5% Bnmk - 5% Local / ADR
- ------------------------------------------------------------------------------
Turkey Bnmk + 5% Bnmk - 5% Local / ADR
- ------------------------------------------------------------------------------
Russia Bnmk + 5% Bnmk - 5% ADR
- ------------------------------------------------------------------------------
Venezuela Bnmk + 5% Bnmk - 5% Local / ADR
- ------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
SCHEDULE B
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
SCHRODER INVESTMENT MANAGEMENT NORTH AMERICA LIMITED
(SEI VP INSURANCE PRODUCTS TRUST)
REMUNERATION
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
FOR THE FIRST SIX MONTHS DURING WHICH THE SUB-ADVISER PROVIDES INVESTMENT
MANAGEMENT/ADVISORY SERVICES WITH RESPECT TO THE FUND, STARTING FROM THE
EFFECTIVE DATE OF THIS AGREEMENT (THE "INITIAL PERIOD"):
.60% of the Total Assets (as defined below in this Schedule A).
AFTER THE INITIAL PERIOD:
If the Total Assets are in an amount less than $350 million, the fee is .70% of
the Total Assets.
If the Total Assets are in an amount of $350 million or more and less than $750
million, the fee is .60% of the Total Assets.
If the Total Assets are in an amount of $750 million or more, the fee is .55% of
the Total Assets.
TOTAL ASSETS
For the purpose of determining the above fees, "Total Assets" means the assets
of all funds for which SEI Investments Management Corporation is the Investment
Manager or Investment Adviser, and Schroder Investment Management North America
Limited is the Portfolio Manager or Sub-Adviser.
14
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSURANCE PRODUCTS TRUST
AGREEMENT made this 4th day of February, 2000, by and between SEI
Investments Management Corporation (the "Adviser"), and Strategic Fixed Income,
LLC (the "Sub-Adviser").
WHEREAS, the SEI Insurance Products Trust (the "Trust") is an open-end,
diversified management investment company registered under the Investment
company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated March 29, 1999 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the SEI VP International
Fixed Income Fund (the "Fund"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain
the Sub-Adviser to provide investment advisory services to the Adviser in
connection with the management of the Fund, and the Sub-Adviser is willing to
render such investment advisory services, upon the terms and subject to the
conditions set forth below.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and
the Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Fund entrusted to it by the Adviser
(the "Assets"), including the purchase, retention and disposition of
the Assets, in accordance with the Fund's investment objectives,
policies and restrictions as stated in the Fund's prospectus and
statement of additional information, as currently in effect and as
amended or supplemented from time to time (referred to collectively as
the "Prospectus"), and subject to the following:
(a) The Sub-Adviser, subject to the direction of the Adviser, and, at the
request of the Adviser, in consultation with the Adviser, shall
determine from time to time what Assets will be purchased, retained or
disposed of by the Fund, and what portion of the Assets will be
invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement,
the Sub-Adviser shall act in conformity with the Trust's Declaration of
Trust (as defined herein) and the Prospectus and with the instructions
and directions of the Adviser and of the Board of Trustees of the Trust
and will conform to and comply with the requirements of the 1940 Act,
the applicable requirements of subchapter M of the Internal Revenue
Code of 1986, and all other applicable federal and state laws and
regulations, as each is amended from time to time; provided, however,
that in no event shall the Sub-Adviser be obligated to act in
conformity with any instruction or direction of the Adviser or of the
Board of Trustees of the Trust if the Sub-Adviser believes in good
faith (in consultation with counsel, where practicable) that
<PAGE>
implementation of such instruction or direction would involve the
Sub-Adviser in a violation of law or willful malfeasance, bad faith or
gross negligence on its part.
(c) The Sub-Adviser shall determine the Assets to be purchased or disposed
of by the Fund as provided in subparagraph (a) and will place orders
with or through such brokers, dealers or banks to carry out the policy
with respect to brokerage set forth in the Fund's Prospectus or as the
Board of Trustees or the Adviser may direct from time to time, in
conformity with federal securities laws. In executing Fund transactions
and selecting brokers, dealers, or banks the Sub-Adviser will use its
best efforts to seek on behalf of the Fund the best overall terms
available. In assessing the best overall terms available for any
transaction, the Sub-Adviser shall consider all factors that it deems
relevant, including the breadth of the market in the security, the
price of the security, the financial condition and execution capability
of the broker, dealer, or bank and the reasonableness of the
commission, if any, both for the specific transaction and on a
continuing basis.
The Sub-Adviser is authorized to allocate purchase and sale orders for
securities to brokers or dealers (including brokers and dealers that
are affiliated with the Adviser, Sub-Adviser or the Trust's principal
underwriter) to take into account the sale of shares of the Trust if
the Sub-Adviser believes that the quality of the transaction and the
commission are comparable to what they would be with other qualified
firms. In no instance, however, will the Fund's Assets be purchased
from or sold to the Adviser, Sub-Adviser, the Trust's principal
underwriter, or any affiliated person of either the Trust, Adviser, the
Sub-Adviser or the principal underwriter, acting as principal in the
transaction, except to the extent permitted by or under the 1940 Act or
by the Securities and Exchange Commission ("SEC").
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5),
(6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the
1940 Act and shall render to the Adviser or Board of Trustees such
periodic and special reports as the Adviser or Board of Trustees may
reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and
shall timely furnish to the Adviser, at its request, all information
relating to the Sub-Adviser's services under this Agreement needed by
the Adviser to keep the other books and records of the Fund required by
Rule 31a- 1 under the 1940 Act. The Sub-Adviser shall also furnish to
the Adviser, at its request, any other information relating to the
Assets that is required to be filed by the Adviser or the Trust with
the SEC or sent to shareholders under the 1940 Act (including the rules
adopted thereunder) or any exemptive or other relief that the Adviser
or the Trust obtains from the SEC, in each case with respect to the
Trust, the Fund, or the Assets. The Sub-Adviser agrees that all records
that it maintains on behalf of the Fund are property of the Fund and
the Sub-Adviser will surrender promptly to the Fund any of such records
upon the Fund's request; provided, however, that the Sub-Adviser may
retain a copy of such records. In addition, for the duration of this
Agreement, the Sub-Adviser shall preserve for the periods prescribed
-2-
<PAGE>
by Rule 31a-2 under the 1940 Act any such records as are required to be
maintained by it pursuant to this Agreement, and shall transfer said
records to any successor Sub-Adviser upon the termination of this
Agreement (or, if there is no successor Sub-Adviser, to the Adviser);
provided, however, that the Sub-Adviser may retain a copy of such
records.
(e) The Sub-Adviser shall provide the Fund's custodian on each business day
with information relating to all transactions concerning the Fund's
Assets and shall provide the Adviser with such information upon request
of the Adviser.
(f) The Sub-Adviser and its partners and its and their respective partners,
stockholders, directors, officers, employees and agents act, may
continue to act and in the future may act as investment managers or
investment advisers to others and may invest for their own accounts,
and nothing in this Agreement shall in any way be construed or deemed
to restrict the right of any such person to perform investment
management or investment advisory services for others or to invest for
its own account, and the performance of such services for others and
such investing shall not be deemed to violate or give rise to any duty
or obligation to the Trust, the Fund or the Adviser, except as
otherwise provided by law. The Sub-Adviser agrees to act in a manner
consistent with its fiduciary obligation to deal fairly with all
clients when taking investment actions.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill
its commitment under this Agreement.
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held in the Fund. The Adviser shall instruct the custodian
and other parties providing services to the Fund to promptly forward
misdirected proxies to the Sub-Adviser.
(i) The Sub-Adviser will notify the Trust and the Adviser of any changes to
the membership of the Sub-Adviser within a reasonable time after such
change.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners,
officers or employees, or officers or employees of the Sub-Adviser's
general partner.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have
responsibility for all services to be provided to the Fund pursuant to
the Advisory Agreement and shall oversee and review the Sub-Adviser's
performance of its duties under this Agreement; provided, however,
that, in connection with its management of the Assets, nothing herein
shall be construed to relieve the Sub-Adviser of responsibility for
compliance with the applicable provisions of the Trust's Declaration of
Trust (as defined herein), the applicable provisions of the Prospectus,
the instructions and directions of the Board of Trustees of the Trust
(subject to the provisions of
-3-
<PAGE>
Section 1(b) hereunder), the applicable provisions of the requirements
of the 1940 Act, the applicable requirements of Subchapter M of the
Internal Revenue Code of 1986, and all other applicable federal and
state laws and regulations, as each is amended from time to time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of, and will furnish the
Sub-Adviser with copies properly certified or authenticated of
amendments and supplements to, each of the following documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of the Commonwealth of Massachusetts (such Agreement
and Declaration of Trust, as in effect on the date of this Agreement
and as amended from time to time, herein called the "Declaration of
Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Fund.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s)
which is attached hereto and made part of this Agreement. The fee will
be calculated based on the average monthly market value of the Assets
under the Sub-Adviser's management and will be paid to the Sub-Adviser
monthly. Except as may otherwise be prohibited by law or regulation
(including any then-current SEC staff interpretation), the Sub-Adviser
may, in its discretion and from time to time, waive a portion of its
fee.
5. LIMITATION OF LIABILITY OF THE SUB-ADVISER. The duties of the
Sub-Adviser shall be confined to those expressly set forth herein, and
no implied duties are assumed by or may be asserted against the
Sub-Adviser hereunder. The Sub-Adviser shall not be liable for any
error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission in carrying out its duties, or
from reckless disregard of its obligations or duties, under this
Agreement, except as may otherwise be provided under provisions of
applicable state law to the extent such provisions cannot be waived or
modified hereby. The Adviser hereby acknowledges that it considers the
Sub-Adviser to be a "corporate agent" of the Adviser within the meaning
of the last sentence of Section 9 of the Investment Advisory Agreement
between the Trust and the Adviser with respect to the Fund.
6. REPORTS. During the term of this Agreement, the Adviser agrees to
furnish the Sub-Adviser at its principal office all Prospectuses, proxy
statements, reports to stockholders of the Fund, the Trust or the
public that refer to the Sub-Adviser, its services or its clients in
any way prior to use thereof and not to use such materials if the
Sub-Adviser reasonably objects in writing within five business days (or
such other period as may be mutually agreed) after receipt
-4-
<PAGE>
thereof. The Sub-Adviser's right to object to such materials is limited
to the portions of such materials that expressly relate to the
Sub-Adviser, its services or its clients. The Adviser agrees to use its
reasonable best efforts to ensure that materials prepared by its
employees or agents or its affiliates that refer to the Sub-Adviser,
its services or its clients in any way are consistent with those
materials previously approved by the Sub-Adviser as referenced in the
first sentence of this paragraph. Sales literature may be furnished to
the Sub-Adviser by first class or overnight mail, facsimile
transmission equipment or hand delivery.
7. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or
damages (including reasonable attorney's fees and other related
expenses) arising from or in connection with the performance by the
Sub- Adviser of its obligations or duties under this Agreement;
provided, however that (a) the Sub- Adviser shall not be obligated to
indemnify or hold harmless the Adviser from or against any claim, loss,
liability, or damage in respect of which the Sub-Adviser is not liable
pursuant to Section 5 hereof; and (b) the Sub-Adviser's obligation
under this Section 7 shall be reduced to the extent that the claim
against, or the loss, liability or damage experienced by, the Adviser,
is caused by or is otherwise directly related to the Adviser's own
willful misfeasance, bad faith or negligence, or to the reckless
disregard of its obligations or duties under this Agreement.
The Adviser shall indemnify and hold harmless the Sub-Adviser from and
against any and all claims, losses, liabilities or damages (including
reasonable attorney's fees and other related expenses) arising from or
in connection with the performance by the Adviser of its obligations or
duties under this Agreement; provided, however, that the Adviser's
obligation under this Section 7 shall be reduced to the extent that the
claim against, or the loss, liability or damage experienced by, the
Sub-Adviser, is caused by or is otherwise directly related to the
Sub-Adviser's own willful misfeasance, bad faith or negligence, or to
the reckless disregard of its obligations or duties under this
Agreement.
8. DURATION AND TERMINATION. This Agreement shall become effective upon
its approval by the Trust's Board of Trustees and by the vote of a
majority of the outstanding voting securities of the Fund.
This Agreement shall continue in effect until terminated as provided
below; provided, however, that this Agreement shall continue in effect
for a period of more than two years from the date hereof only so long
as continuance is specifically approved at least annually in
conformance with the Section 15(a)(2) of the 1940 Act. This Agreement
may be terminated (a) by the Fund at any time, on written notice to the
Sub-Adviser, without the payment of any penalty, by the Board of
Trustees of the Trust or by the vote of a majority of the outstanding
voting securities of the Fund, (b) by the Adviser at any time, without
the payment of any penalty, on not more than 60 days' nor less than 30
days' written notice to the Sub-Adviser, or (c) by the Sub-Adviser at
any time, without the payment of any penalty, on not less than 90 days'
written notice to the Adviser. This Agreement shall terminate
-5-
<PAGE>
automatically and immediately in the event of its assignment, or in the
event of a termination of the Adviser's agreement with the Trust. As
used in this Section 8, the terms "assignment" and "vote of a majority
of the outstanding voting securities" shall have the respective
meanings set forth in the 1940 Act and the rules and regulations
thereunder, subject to such exceptions as may be granted by the SEC
under the 1940 Act.
Upon the termination of this Agreement, the Sub-Adviser shall not be
obligated to take or recommend any action with respect to the Assets.
9. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed
as being inconsistent with the 1940 Act.
10. SEVERABILITY. Should any part of this Agreement be held invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and
their respective successors.
11. NOTICE: Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by
registered, certified or overnight mail, postage prepaid addressed by
the party giving notice to the other party at the last address
furnished by the other party:
To the Adviser at: SEI Investments Management Corporation
One Freedom Valley Drive
Oaks, PA 19456
Attention: Legal Department
To the Sub-Adviser at: Strategic Fixed Income, LLC
1001 Nineteenth Street North
Suite 1720
Arlington, VA 22209-1722
Attention: Vice President
12. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject
matter. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
-6-
<PAGE>
A copy of the Declaration of Trust of the Trust is on file with the
Secretary of State of the Commonwealth of Massachusetts, and notice is hereby
given that the obligations of this instrument are not binding upon any of the
Trustees, officers or shareholders of the Fund or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
Commission, whether of special or general application, such provision shall be
deemed to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI INVESTMENTS MANAGEMENT CORPORATION STRATEGIC FIXED INCOME, LLC
By: /s/ Cynthia M. Parrish By: /s/ Patricia M. Arcoleo
------------------------------- -----------------------------
Name: Cynthia M. Parrish Name: Patricia M. Arcoleo
----------------------------- ---------------------------
Title: Vice President Title: Vice President
---------------------------- --------------------------
-7-
<PAGE>
SCHEDULE A
TO THE
INVESTMENT SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
STRATEGIC FIXED INCOME, LLC
Pursuant to Article 3 , the Trust shall pay the Adviser compensation at an
annual rate as follows:
<TABLE>
<CAPTION>
Fund Fee (in basis points)
- ---- --------------------
<S> <C>
SEI VP International Fixed Income Fund 0.15%
</TABLE>
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSURANCE PRODUCTS TRUST
AGREEMENT made this 21st day of March, 2000, between SEI Investments
Management Corporation (the "Adviser") and Wall Street Associates (the
"Sub-Adviser").
WHEREAS, SEI Insurance Products Trust, a Massachusetts business trust
(the "Trust") is registered as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated March 29, 1999 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the SEI VP Small Cap Growth
Fund (the "Fund"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain
the Sub-Adviser to provide investment advisory services to the Adviser in
connection with the management of the Fund, and the Sub-Adviser is willing to
render such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and
the Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Fund entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the
Assets, in accordance with the Fund's investment objectives, policies
and restrictions as stated in the Fund's prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, in consultation with and subject to the
direction of the Adviser, determine from time to time what Assets will
be purchased, retained or sold by the Fund, and what portion of the
Assets will be invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement,
the Sub-Adviser shall act in conformity with the Trust's Declaration of
Trust (as defined herein) and the Prospectus and with the instructions
and directions of the Adviser and of the Board of Trustees of the Trust
and will conform to and comply with the requirements of the 1940 Act,
the Internal Revenue Code of 1986, and all other applicable federal and
state laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by
the Fund as provided in subparagraph (a) and will place orders with or
through such persons, brokers or dealers to carry out the policy with
respect to brokerage set forth in the Fund's
<PAGE>
Registration Statement (as defined herein) and Prospectus or as the
Board of Trustees or the Adviser may direct from time to time, in
conformity with federal securities laws. In executing Fund transactions
and selecting brokers or dealers, the Sub-Adviser will use its best
efforts to seek on behalf of the Fund the best overall terms available.
In assessing the best overall terms available for any transaction, the
Sub-Adviser shall consider all factors that it deems relevant,
including the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the
broker or dealer, and the reasonableness of the commission, if any,
both for the specific transaction and on a continuing basis. In
evaluating the best overall terms available, and in selecting the
broker-dealer to execute a particular transaction, the Sub-Adviser may
also consider the brokerage and research services provided (as those
terms are defined in Section 28(e) of the Securities Exchange Act of
1934). Consistent with any guidelines established by the Board of
Trustees of the Trust, the Sub-Adviser is authorized to pay to a broker
or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for the Fund which is
in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction if, but only if, the
Sub-Adviser determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer - - viewed in terms of that
particular transaction or terms of the overall responsibilities of the
Sub-Adviser to the Fund. In addition, the Sub-Adviser if authorized to
allocate purchase and sale orders for securities to brokers or dealers
(including brokers and dealers that are affiliated with the Adviser,
Sub-Adviser or the Trust's principal underwriter) to take into account
the sale of shares of the Trust if the Sub-Adviser believes that the
quality of the transaction and the commission are comparable to what
they would be with other qualified firms. In no instance, however, will
the Fund's Assets be purchased from or sold to the Adviser,
Sub-Adviser, the Trust's principal underwriter, or any affiliated
person of either the Trust, Adviser, the Sub-Adviser or the principal
underwriter, acting as principal in the transaction, except to the
extent permitted by the Securities and Exchange Commission and the 1940
Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5),
(6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the
1940 Act. The Sub-Adviser shall provide to the Adviser or the Board of
Trustees such periodic and special reports, balance sheets or financial
information, and such other information with regard to its affairs as
the Adviser or Board of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and
shall timely furnish to the Adviser all information relating to the
Sub-Adviser's services under this Agreement needed by the Adviser to
keep the other books and records of the Fund required by Rule 31a-1
under the 1940 Act. The Sub-Adviser shall also furnish to the Adviser
any other information relating to the Assets that is required to be
filed by the Adviser or the Trust
<PAGE>
with the Securities and Exchange Commission ("SEC") or sent to
shareholders under the 1940 Act (including the rules adopted
thereunder) or any exemptive or other relief that the Adviser or the
Trust obtains from the SEC. The Sub-Adviser agrees that all records
that it maintains on behalf of the Fund are property of the Fund and
the Sub-Adviser will surrender promptly to the Fund any of such records
upon the Fund's request; provided, however, that the Sub-Adviser may
retain a copy of such records. In addition, for the duration of this
Agreement, the Sub-Adviser shall preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act any such records as are required to be
maintained by it pursuant to this Agreement, and shall transfer said
records to any successor Sub-Adviser upon the termination of his
Agreement (or, if there is no successor Sub-Adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Fund's custodian on each business day
with information relating to all transactions concerning the Fund's
Assets and shall provide the Adviser with such information upon request
of the Adviser.
(f) The investment management services provided by the Sub-Adviser under
this Agreement are not to be deemed exclusive and the Sub-Adviser shall
be free to render similar services to others, as long as such services
do not impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill
its commitment under this Agreement.
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held in the Fund. The Adviser shall instruct the custodian
and other parties providing services to the Fund to promptly forward
misdirected proxies to the Sub-Adviser. Services to be furnished by the
Sub-Adviser under this Agreement may be furnished through the medium of
any of the Sub-Adviser's partners, officers or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have
responsibility for all services to be provided to the Fund pursuant to
the Advisory Agreement and shall oversee and review the Sub-Adviser's
performance of its duties under this Agreement; provided, however, that
in connection with its management of the Assets, nothing herein shall
be construed to relieve the Sub-Adviser of responsibility for
compliance with the Trust's Declaration of Trust (as defined herein),
the Prospectus, the instructions and directions of the Board of
Trustees of the Trust, the requirements of the 1940 Act, the Internal
Revenue Code of 1986, and all other applicable federal and state laws
and regulations, as each is amended from time to time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
<PAGE>
(a) The Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of the Commonwealth of Massachusetts (such Agreement
and Declaration of Trust, as in effect on the date of this Agreement
and as amended from time to time, herein called the "Declaration of
Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Fund.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s)
which is attached hereto and made part of this Agreement. The fee will
be calculated based on the average monthly market value of the Assets
under the Sub-Adviser's management and will be paid to the Sub-Adviser
monthly. Except as may otherwise be prohibited by law or regulation
(including any then current SEC staff interpretation), the Sub-Adviser
may, in its discretion and from time to time, waive a portion of its
fee.
5. LIMITATION OF LIABILITY OF THE SUB-ADVISER . The Sub-Adviser shall not
be liable for any error of judgment or for any loss suffered by the
Adviser in connection with the performance of its obligations under
this Agreement, except a loss resulting from a breach of fiduciary duty
with respect to the receipt of compensation for services (in which case
any award of damages shall be limited to the period and the amount set
forth in Section 36(b)(3) of the 1940 Act), or a loss resulting from
willful misfeasance, bad faith or negligence on the Sub-Adviser's part
in the performance of its duties or from reckless disregard of its
obligations and duties under this Agreement, except as may otherwise be
provided under provisions of applicable state law which cannot be
waived or modified hereby.
6. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or
damages (including reasonable attorney's fees and other related
expenses) howsoever arising from or in connection with the performance
of the Sub-Adviser's obligations under this Agreement; the actions of
the Sub-Adviser under this Agreement; provided, however, that the
Sub-Adviser's obligation under this Section 6 shall be reduced to the
extent that the claim against, or the loss, liability or damage
experienced by the Adviser, is caused by or is otherwise directly
related to the Adviser's own willful misfeasance, bad faith or
negligence, or to the reckless disregard of its duties under this
Agreement.
<PAGE>
7. DURATION AND TERMINATION. This Agreement shall become effective upon
its approval by the Trust's Board of Trustees and by the vote of a
majority of the outstanding voting securities of the Fund.
This Agreement shall continue in effect for a period of more than two
years from the date hereof only so long as continuance is specifically
approved at least annually in conformance with the 1940 Act; provided,
however, that this Agreement may be terminated with respect to the Fund
(a) by the Fund at any time, without the payment of any penalty, by the
vote of a majority of Trustees of the Trust or by the vote of a
majority of the outstanding voting securities of the Fund, (b) by the
Adviser at any time, without the payment of any penalty, on not more
than 60 days' nor less than 30 days' written notice to the Sub-Adviser,
or (c) by the Sub-Adviser at any time, without the payment of any
penalty, on 90 days' written notice to the Adviser. This Agreement
shall terminate automatically and immediately in the event of its
assignment, or in the event of a termination of the Adviser's agreement
with the Trust. As used in this Section 7, the terms "assignment" and
"vote of a majority of the outstanding voting securities" shall have
the respective meanings set forth in the 1940 Act and the rules and
regulations thereunder, subject to such exceptions as may be granted by
the Commission under the 1940 Act.
8. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed
as being inconsistent with the 1940 Act.
9. SEVERABILITY. Should any part of this Agreement be held invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and
their respective successors.
10. NOTICE: Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by
registered, certified or overnight mail, postage prepaid addressed by
the party giving notice to the other party at the last address
furnished by the other party:
To the Adviser at: SEI Investments Management Corporation
One Freedom Valley Drive
Oaks, PA 19456
Attention: Legal Department
To the Sub-Adviser at: Wall Street Associates
1200 Prospect Street, Suite 100
La Jolla, CA 92037
Attention: President
<PAGE>
11. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject
matter. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
A copy of the Declaration of Trust of the Trust is on file with the
Secretary of State of the Commonwealth of Massachusetts, and notice is hereby
given that the obligations of this instrument are not binding upon any of the
Trustees, officers or shareholders of the Fund or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
Commission, whether of special or general application, such provision shall be
deemed to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI Investments Management Corporation Wall Street Associates
By: /s/ Todd B. Cipperman By: /s/ William Jeffery III
----------------------------------- --------------------------------
Name: Name: William Jeffery III
--------------------------------- ------------------------------
Title: Title: President
-------------------------------- -----------------------------
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
WALL STREET ASSOCIATES
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
<TABLE>
<S> <C>
SEI VP Small Cap Growth Fund .50%
</TABLE>
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSURANCE PRODUCTS TRUST
AGREEMENT made this 4th day of April, 2000, between SEI Investments
Management Corporation, (the "Adviser") and Wellington Management Company, LLP
(the "Sub-Adviser").
WHEREAS, SEI Insurance Products Trust, a Massachusetts business trust
(the "Trust"), is registered as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated March 29, 1999 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the SEI VP Prime Obligation
Fund (the "Fund"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain
the Sub-Adviser to provide investment advisory services to the Adviser in
connection with the management of the Fund, and the Sub-Adviser is willing to
render such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and
the Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Fund entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the
Assets, in accordance with the Fund's investment objectives, policies
and restrictions as stated in the Fund's prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, subject to supervision by the Adviser, determine
from time to time what Assets will be purchased, retained or sold by
the Fund, and what portion of the Assets will be invested or held
uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement,
the Sub-Adviser shall act in conformity with the Trust's Declaration of
Trust (as defined herein) and the Prospectus and with the instructions
and directions of the Adviser and of the Board of Trustees of the Trust
and will conform to and comply with the requirements of the 1940 Act,
the Internal Revenue Code of 1986, and all other applicable federal and
state laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by
the Fund as provided in subparagraph (a) and will place orders with or
through such persons, brokers or dealers to carry out the policy with
respect to brokerage set forth in the Fund's Registration Statement (as
defined herein) and Prospectus or as the Board of Trustees or the
Adviser may direct from time to time, in conformity with federal
securities laws. In executing Fund
1
<PAGE>
transactions and selecting brokers or dealers, the Sub-Adviser will use
its best efforts to seek on behalf of the Fund the best overall terms
available. In assessing the best overall terms available for any
transaction, the Sub-Adviser shall consider all factors that it deems
relevant, including the breadth of the market in the security, the
price of the security, the financial condition and execution capability
of the broker or dealer, and the reasonableness of the commission, if
any, both for the specific transaction and on a continuing basis. In
evaluating the best overall terms available, and in selecting the
broker-dealer to execute a particular transaction, the Sub-Adviser may
also consider the brokerage and research services provided (as those
terms are defined in Section 28(e) of the Securities Exchange Act of
1934). Consistent with any guidelines established by the Board of
Trustees of the Trust, the Sub-Adviser is authorized to pay to a broker
or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for the Fund which is
in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction if, but only if, the
Sub-Adviser determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer - - viewed in terms of that
particular transaction or terms of the overall responsibilities of the
Sub-Adviser to the Fund. In addition, the Sub-Adviser is authorized to
allocate purchase and sale orders for securities to brokers or dealers
(including brokers and dealers that are affiliated with the Adviser,
Sub-Adviser or the Trust's principal underwriter) to take into account
the sale of shares of the Trust if the Sub-Adviser believes that the
quality of the transaction and the commission are comparable to what
they would be with other qualified firms. In no instance, however, will
the Fund's Assets be purchased from or sold to the Adviser,
Sub-Adviser, the Trust's principal underwriter, or any affiliated
person of either the Trust, Adviser, the Sub-Adviser or the principal
underwriter, acting as principal in the transaction, except to the
extent permitted by the Securities and Exchange Commission ("SEC") and
the 1940 Act.
On occasions when the Sub-Adviser deems the purchase or sale of a
security to be in the best interest of the Fund as well as other
clients of the Sub-Adviser, it may allocate such transactions in the
manner it considers to be the most equitable and consistent with its
fiduciary obligation to the Fund and to such other clients.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5),
(6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the
1940 Act. The Sub-Adviser shall provide to the Adviser or the Board of
Trustees such periodic and special reports, balance sheets or financial
information, and such other information with regard to its affairs as
the Adviser or Board of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and
shall timely furnish to the Adviser all information relating to the
Sub-Adviser's services under this Agreement needed by the Adviser to
keep the other books and records of the Fund required by Rule 31a-1
under the 1940 Act. The Sub-Adviser shall also furnish to the Adviser
any other information relating to the Assets that is required to be
filed by the Adviser or the Trust with the SEC or sent to
2
<PAGE>
shareholders under the 1940 Act (including the rules adopted
thereunder) or any exemptive or other relief that the Adviser or the
Trust obtains from the SEC. The Sub-Adviser agrees that all records
that it maintains on behalf of the Fund are property of the Fund and
the Sub-Adviser will surrender promptly to the Fund any of such records
upon the Fund's request; provided, however, that the Sub-Adviser may
retain a copy of such records. In addition, for the duration of this
Agreement, the Sub-Adviser shall preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act any such records as are required to be
maintained by it pursuant to this Agreement, and shall transfer said
records to any successor sub-adviser upon the termination of this
Agreement (or, if there is no successor sub-adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Fund's custodian on each business day
with information relating to all transactions concerning the Fund's
Assets and shall provide the Adviser with such information upon request
of the Adviser.
(f) The investment management services provided by the Sub-Adviser under
this Agreement are not to be deemed exclusive and the Sub-Adviser shall
be free to render similar services to others, as long as such services
do not impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill
its commitment under this Agreement.
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held in the Fund. The Adviser shall instruct the custodian
and other parties providing services to the Fund to promptly forward
misdirected proxies to the Sub-Adviser.
(i) Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners,
officers or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have
responsibility for all services to be provided to the Fund pursuant to
the Advisory Agreement and shall oversee and review the Sub-Adviser's
performance of its duties under this Agreement; provided, however, that
in connection with its management of the Assets, nothing herein shall
be construed to relieve the Sub-Adviser of responsibility for
compliance with the Trust's Declaration of Trust (as defined herein),
the Prospectus, the instructions and directions of the Board of
Trustees of the Trust, the requirements of the 1940 Act, the Internal
Revenue Code of 1986, and all other applicable federal and state laws
and regulations, as each is amended from time to time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents, and will deliver to it all future amendments and
supplements, if any:
3
<PAGE>
(a) The Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of the Commonwealth of Massachusetts (such Agreement
and Declaration of Trust, as in effect on the date of this Agreement
and as amended from time to time, herein called the "Declaration of
Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Fund;
(d) Certified resolutions of the Trust's Board of Trustees authorizing the
appointment of the Adviser and the Sub-Adviser with respect to the
Fund, and approving the form of this Agreement; and
(e) Registration Statement under the 1940 Act and the Securities Act of
1933, as amended, on Form N-1A (the Registration Statement), as filed
with the SEC relating to the Fund and shares of the Fund's beneficial
shares, and all amendments thereto.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s)
which is attached hereto and made part of this Agreement. The fee will
be calculated based on the average daily net assets under the
Sub-Adviser's management and will be paid to the Sub-Adviser monthly.
Except as may otherwise be prohibited by law or regulation (including
any then current SEC staff interpretation), the Sub-Adviser may, in its
discretion and from time to time, waive a portion of its fee.
5. LIMITATION OF LIABILITY OF THE SUB-ADVISER. The Sub-Adviser shall not
be liable for any error of judgment or for any loss suffered by the
Fund or the Adviser in connection with performance of its obligations
under this Agreement, except a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services
(in which case any award of damages shall be limited to the period and
the amount set forth in Section 36(b)(3) of the 1940 Act), or a loss
resulting from willful misfeasance, bad faith or gross negligence on
the part of the Sub-Adviser in the performance of its duties, or from
reckless disregard of its obligations and duties under this Agreement,
except as may otherwise be provided under provisions of applicable
state law which cannot be waived or modified hereby. (As used in this
Paragraph 5, the term "Sub-Adviser" shall include partners, officers,
employees and other corporate agents of the Sub-Adviser as well as the
partnership itself.)
6. DURATION AND TERMINATION. This Agreement shall become effective upon
its approval by the Trust's Board of Trustees and by the vote of a
majority of the outstanding voting securities of the Fund; provided,
however, that at any time the Adviser shall have obtained exemptive
relief from the Securities and Exchange Commission permitting it to
engage a
4
<PAGE>
Sub-Adviser without first obtaining approval of the Agreement from a
majority of the outstanding voting securities of the Fund(s) involved,
the Agreement shall become effective upon its approval by the Trust's
Board of Trustees.
This Agreement shall continue in effect for a period of more than two
years from the date hereof only so long as continuance is specifically
approved at least annually in conformance with the 1940 Act; provided,
however, that this Agreement may be terminated with respect to the Fund
(a) by the Fund at any time, without the payment of any penalty, by the
vote of a majority of Trustees of the Trust or by the vote of a
majority of the outstanding voting securities of the Fund, (b) by the
Adviser at any time, without the payment of any penalty, on not more
than 60 days' nor less than 30 days' written notice to the Sub-Adviser,
or (c) by the Sub-Adviser at any time, without the payment of any
penalty, on 90 days' written notice to the Adviser. This Agreement
shall terminate automatically and immediately in the event of its
assignment, or in the event of a termination of the Adviser's agreement
with the Trust. As used in this Section 6, the terms "assignment" and
"vote of a majority of the outstanding voting securities" shall have
the respective meanings set forth in the 1940 Act and the rules and
regulations thereunder, subject to such exceptions as may be granted by
the SEC under the 1940 Act.
7. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed
as being inconsistent with the 1940 Act.
8. REVIEW OF MATERIALS. During the term of this Agreement, the Adviser
agrees to furnish the Sub-Adviser at its principal office all
Prospectus, Statements of Additional Information, proxy statements,
reports to shareholders, advertising and sales literature or other
materials prepared for distribution to shareholders of the Fund, the
Trust or the public that refer to the Sub-Adviser or its clients in any
way, prior to the use thereof, and the Adviser shall not use any such
materials if the Sub-Adviser reasonably objects in writing within five
business days (or such other period as may be mutually agreed) after
receipt thereof. The Sub-Adviser's right to object to such materials is
limited to the portions of such materials that expressly relate to the
Sub-Adviser, its services and its clients. Materials which are
consistent with those previously approved by the Sub-Adviser as
referenced in the first sentence of this paragraph do not need to be
submitted for the Sub-Adviser's review. The Adviser agrees to use its
reasonable best efforts to ensure that materials prepared by its
employees or agents or its affiliates that refer to the Sub-Adviser or
its clients in any way are submitted for review or are consistent with
previously approved materials. Material submitted for the Sub-Adviser's
review may be furnished to the Sub-Adviser by first class or overnight
mail, facsimile or hand delivery.
9. SEVERABILITY. Should any part of this Agreement be held invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and
their respective successors.
5
<PAGE>
10. NOTICE: Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by
registered, certified or overnight mail, postage prepaid addressed by
the party giving notice to the other party at the last address
furnished by the other party:
To the Adviser at: SEI Investments Management Corporation
One Freedom Valley Road
Oaks, PA 19456
Attention: Legal Department
To the Sub-Adviser at: Wellington Management Company, LLP
75 State Street
Boston, MA 02109
Attention: Mary Ann Tynan
11. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject
matter. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
A copy of the Declaration of Trust is on file with the Secretary of
State of the Commonwealth of Massachusetts, and notice is hereby given that the
obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of the Fund or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI INVESTMENTS MANAGEMENT CORPORATION WELLINGTON MANAGEMENT COMPANY, LLP
By: /s/ Todd B. Cipperman By: /s/ John A. Gooch
------------------------------- ---------------------------------
Name: Todd B. Cipperman Name: John A. Gooch
----------------------------- -------------------------------
Title: Senior Vice President Title: Senior Vice President
---------------------------- ------------------------------
6
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
WELLINGTON MANAGEMENT COMPANY LLP
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
SEI VP Prime Obligation Fund .075% of the first $500 million of average
daily net assets
.02% on average daily net assets in excess of
$500 million
7
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSURANCE PRODUCTS TRUST
AGREEMENT made this 15th day of February, 2000, between SEI Investments
Management Corporation, (the "Adviser") and Western Asset Management Company
(the "Sub-Adviser").
WHEREAS, SEI Insurance Products Trust, a Massachusetts business trust
(the "Trust"), is registered as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated March 29, 1999 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the SEI VP Core Fixed Income
Fund (the "Fund"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain
the Sub-Adviser to provide investment advisory services to the Adviser in
connection with the management of the Fund, and the Sub-Adviser is willing to
render such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and
the Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Fund entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the
Assets, in accordance with the Fund's investment objectives, policies
and restrictions as stated in the Fund's prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, subject to the Prospectus and any written
instruction or direction of the Adviser, determine from time to time
what Assets will be purchased, retained or sold by the Fund, and what
portion of the Assets will be invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement,
the Sub-Adviser shall act in conformity with the Trust's Declaration of
Trust (as defined herein) and the Prospectus and with the instructions
and directions of the Adviser and of the Board of Trustees of the Trust
and will conform to and comply with the requirements of the 1940 Act,
the Internal Revenue Code of 1986, and all other applicable federal and
state laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by
the Fund as provided in subparagraph (a) and will place orders with or
through such persons, brokers or dealers to carry out the policy with
respect to brokerage set forth in the Fund's Registration Statement (as
defined herein) and Prospectus or as the Board of Trustees or the
Adviser may direct from time to time, in conformity with federal
securities laws. In executing Fund
<PAGE>
transactions and selecting brokers or dealers, the Sub-Adviser will use
its best efforts to seek on behalf of the Fund the best overall terms
available. In assessing the best overall terms available for any
transaction, the Sub-Adviser shall consider all factors that it deems
relevant, including the breadth of the market in the security, the
price of the security, the financial condition and execution capability
of the broker or dealer, and the reasonableness of the commission, if
any, both for the specific transaction and on a continuing basis. In
evaluating the best overall terms available, and in selecting the
broker-dealer to execute a particular transaction, the Sub-Adviser may
also consider the brokerage and research services provided (as those
terms are defined in Section 28(e) of the Securities Exchange Act of
1934). Consistent with any guidelines established by the Board of
Trustees of the Trust, the Sub-Adviser is authorized to pay to a broker
or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for the Fund which is
in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction if, but only if, the
Sub-Adviser determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer - - viewed in terms of that
particular transaction or terms of the overall responsibilities of the
Sub-Adviser to the Fund. In addition, the Sub-Adviser is authorized to
allocate purchase and sale orders for securities to brokers or dealers
(including brokers and dealers that are affiliated with the Adviser,
Sub-Adviser or the Trust's principal underwriter) to take into account
the sale of shares of the Trust if the Sub-Adviser believes that the
quality of the transaction and the commission are comparable to what
they would be with other qualified firms. In no instance, however, will
the Fund's Assets be purchased from or sold to the Adviser,
Sub-Adviser, the Trust's principal underwriter, or any affiliated
person of either the Trust, Adviser, the Sub-Adviser or the principal
underwriter, acting as principal in the transaction, except to the
extent permitted by the Securities and Exchange Commission ("SEC") and
the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5),
(6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the
1940 Act. The Sub-Adviser shall provide to the Adviser or the Board of
Trustees such periodic and special reports, balance sheets or financial
information, and such other information with regard to its affairs as
the Adviser or Board of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and
shall timely furnish to the Adviser all information relating to the
Sub-Adviser's services under this Agreement needed by the Adviser to
keep the other books and records of the Fund required by Rule 31a-1
under the 1940 Act. The Sub-Adviser shall also furnish to the Adviser
any other information relating to the Assets that is required to be
filed by the Adviser or the Trust with the SEC or sent to shareholders
under the 1940 Act (including the rules adopted thereunder) or any
exemptive or other relief that the Adviser or the Trust obtains from
the SEC. The Sub-Adviser agrees that all records that it maintains on
behalf of the Fund are property of the Fund and the Sub-Adviser will
surrender promptly to the Fund any of such records upon the Fund's
request; provided, however, that the Sub-Adviser may retain a copy of
such records. In addition, for
2
<PAGE>
the duration of this Agreement, the Sub-Adviser shall preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act any such records as
are required to be maintained by it pursuant to this Agreement, and
shall transfer said records to any successor sub-adviser upon the
termination of this Agreement (or, if there is no successor
sub-adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Fund's custodian on each business day
with information relating to all transactions concerning the Fund's
Assets and shall provide the Adviser with such information upon request
of the Adviser.
(f) The investment management services provided by the Sub-Adviser under
this Agreement are not to be deemed exclusive and the Sub-Adviser shall
be free to render similar services to others, as long as such services
do not impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill
its commitment under this Agreement.
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held in the Fund. The Adviser shall instruct the custodian
and other parties providing services to the Fund to promptly forward
misdirected proxies to the Sub-Adviser.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners,
officers or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have
responsibility for all services to be provided to the Fund pursuant to
the Advisory Agreement and shall oversee and review the Sub-Adviser's
performance of its duties under this Agreement; provided, however, that
in connection with its management of the Assets, nothing herein shall
be construed to relieve the Sub-Adviser of responsibility for
compliance with the Trust's Declaration of Trust (as defined herein),
the Prospectus, the instructions and directions of the Board of
Trustees of the Trust, the requirements of the 1940 Act, the Internal
Revenue Code of 1986, and all other applicable federal and state laws
and regulations, as each is amended from time to time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of the Commonwealth of Massachusetts (such Agreement
and Declaration of Trust, as in effect on the date of this Agreement
and as amended from time to time, herein called the "Declaration of
Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
3
<PAGE>
(c) Prospectus(es) of the Fund.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s)
which is attached hereto and made part of this Agreement. The fee will
be calculated based on the average monthly market value of the Assets
under the Sub-Adviser's management and will be paid to the Sub-Adviser
monthly. Except as may otherwise be prohibited by law or regulation
(including any then current SEC staff interpretation), the Sub-Adviser
may, in its discretion and from time to time, waive a portion of its
fee.
5. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or
damages (including reasonable attorney's fees and other related
expenses) howsoever arising from or in connection with the performance
of the Sub-Adviser's obligations under this Agreement; provided,
however, that the Sub- Adviser's obligation under this Section 5 shall
be reduced to the extent that the claim against, or the loss, liability
or damage experienced by the Adviser, is caused by or is otherwise
directly related to the Adviser's own willful misfeasance, bad faith or
negligence, or to the reckless disregard of its duties under this
Agreement.
The Adviser shall indemnify an hold harmless the Sub-Adviser from and
against any and all claims, losses, liabilities or damages (including
reasonable attorney's fees and other related expenses) howsoever
arising from or in connection with the performance of the Adviser's
obligations under this Agreement; provided, however, that the Adviser's
obligation under this Section 5 shall be reduced to the extent that the
claim against, or the loss, liability or damage experienced by the
Sub-Adviser, is caused by or is otherwise related to the Sub-Adviser's
own willful misfeasance, bad faith or negligence, or to the reckless
disregard of its duties under this Agreement.
6. LIMITATION OF LIABILITY OF THE SUB-ADVISER. The Sub-Adviser shall not
be liable for any error of judgment or for any loss suffered by the
Adviser in connection with performance of its obligations under this
Agreement, except a loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services (in which case any
award of damages shall be limited to the period and the amount set
forth in Section 36(b)(3) of the 1940 Act), or a loss resulting from
willful misfeasance, bad faith or negligence on the Sub-Adviser's part
in the performance of its duties or from reckless disregard of its
obligations and duties under this Agreement, except as may otherwise be
provided under provisions of applicable state law which cannot be
waived or modified hereby.
7. DURATION AND TERMINATION. This Agreement shall become effective upon
its approval by the Trust's Board of Trustees and by the vote of a
majority of the outstanding voting securities of the Fund. This
Agreement shall continue in effect for a period of more than two years
from the date hereof only so long as continuance is specifically
approved at least annually in conformance with the 1940 Act; provided,
however, that this Agreement may be terminated with respect to the Fund
(a) by the Fund at any time, without the payment of any
4
<PAGE>
penalty, by the vote of a majority of Trustees of the Trust or by the
vote of a majority of the outstanding voting securities of the Fund,
(b) by the Adviser at any time, without the payment of any penalty, on
not more than 60 days' nor less than 30 days' written notice to the
Sub-Adviser, or (c) by the Sub-Adviser at any time, without the payment
of any penalty, on 90 days' written notice to the Adviser. This
Agreement shall terminate automatically and immediately in the event of
its assignment, or in the event of a termination of the Adviser's
agreement with the Trust. As used in this Section 7, the terms
"assignment" and "vote of a majority of the outstanding voting
securities" shall have the respective meanings set forth in the 1940
Act and the rules and regulations thereunder, subject to such
exceptions as may be granted by the SEC under the 1940 Act.
8. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed
as being inconsistent with the 1940 Act.
9. SEVERABILITY. Should any part of this Agreement be held invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and
their respective successors.
10. NOTICE: Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by
registered, certified or overnight mail, postage prepaid addressed by
the party giving notice to the other party at the last address
furnished by the other party:
To the Adviser at: SEI Investments Management Corporation
One Freedom Valley Road
Oaks, PA 19456
Attention: Legal Department
To the Sub-Adviser at: Western Asset Management Company
117 East Colorado Boulevard
Pasadena, CA 91105
Attention: Ilene S. Harker, Director
11. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject
matter. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
A copy of the Declaration of Trust is on file with the Secretary of
State of the Commonwealth of Massachusetts, and notice is hereby given that the
obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of the Fund or the Trust.
5
<PAGE>
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI INVESTMENTS MANAGEMENT CORPORATION WESTERN ASSET MANAGEMENT COMPANY
By: /s/ Cynthia M. Parrish By: /s/ Ilene S. Hanker
----------------------------------- --------------------------------
Name: Cynthia M Parrish Name: Ilene S. Hanker
--------------------------------- ------------------------------
Title: Vice President Title: Director
-------------------------------- -----------------------------
6
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
WESTERN ASSET MANAGEMENT COMPANY
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
<TABLE>
<S> <C>
SEI VP Core Fixed Income Fund 0.09%
</TABLE>
7
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSURANCE PRODUCTS TRUST
AGREEMENT made this 8th day of March, 2000, by and among SEI Investments
Management Corporation, (the "Adviser") and Salomon Brothers Asset Management
Inc (the "Sub-Adviser").
WHEREAS, SEI Insurance Products Trust, a Massachusetts business trust (the
"Trust"), is registered as an open-end management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated March 29, 1999 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the SEI VP Emerging Markets
Debt Fund (the "Fund"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain the
Sub-Adviser to provide investment advisory services to the Adviser in connection
with the management of the Fund, and the Sub-Adviser is willing to render such
investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Fund entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the Assets,
in accordance with the Fund's investment objectives, policies and
restrictions as stated in the Fund's prospectus and statement of additional
information, as currently in effect and as amended or supplemented from
time to time (referred to collectively as the "Prospectus"), and subject to
the following:
(a) The Sub-Adviser shall, in consultation with and subject to the direction of
the Adviser, determine from time to time what Assets will be purchased,
retained or sold by the Fund, and what portion of the Assets will be
invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement, the
Sub-Adviser shall act in conformity with the Trust's Declaration of Trust
(as defined herein) and the Prospectus and with the instructions and
directions of the Adviser and of the Board of Trustees of the Trust and
will conform to and comply with the requirements of the 1940 Act, the
Internal Revenue Code of 1986, and all other applicable federal and state
laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by the
Fund and will place orders with or through such persons, brokers or dealers
to carry out the policy with
<PAGE>
respect to brokerage set forth in the Fund's Registration Statement (as
defined herein) and Prospectus or as the Board of Trustees or the Adviser
may direct from time to time, in conformity with federal securities laws.
In executing Fund transactions and selecting brokers or dealers, the
Sub-Adviser will use its best efforts to seek on behalf of the Fund the
best overall terms available. In assessing the best overall terms available
for any transaction, the Sub-Adviser shall consider all factors that it
deems relevant, including the breadth of the market in the security, the
price of the security, the financial condition and execution capability of
the broker or dealer, and the reasonableness of the commission, if any,
both for the specific transaction and on a continuing basis. In evaluating
the best overall terms available, and in selecting the broker-dealer to
execute a particular transaction the Sub-Adviser may also consider the
brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) provided to the Fund and/or
other accounts over which the Sub-Adviser or an affiliate of the
Sub-Adviser may exercise investment discretion. The Sub-Adviser is
authorized, subject to the prior approval of the Trust's Board of Trustees,
to pay to a broker or dealer who provides such brokerage and research
services a commission for executing a Fund transaction for the Fund which
is in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction if, but only if, the
Sub-Adviser determines in good faith that such commission was reasonable in
relation to the value of the brokerage and research services provided by
such broker or dealer -- viewed in terms of that particular transaction or
terms of the overall responsibilities of the Sub-Adviser to the Fund. In
addition, the Sub-Adviser is authorized to allocate purchase and sale
orders for securities to brokers or dealers (including brokers and dealers
that are affiliated with the Adviser, Sub-Adviser or the Trust's principal
underwriter) to take into account the sale of shares of the Trust if the
Sub-Adviser believes that the quality of the transaction and the commission
are comparable to what they would be with other qualified firms. In no
instance, however, will the Fund's Assets be purchased from or sold to the
Adviser, Sub-Adviser, the Trust's principal underwriter, or any affiliated
person of either the Trust, Adviser, the Sub-Adviser or the principal
underwriter, acting as principal in the transaction, except to the extent
permitted by the Securities and Exchange Commission and the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act
and shall render to the Adviser or Board of Trustees such periodic and
special reports as the Adviser or Board of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and shall
timely furnish to the Adviser all information relating to the Sub-Adviser's
services under this Agreement needed by the Adviser to keep the other books
and records of the Fund required by Rule 31a-1 under the 1940 Act. The
Sub-Adviser shall also furnish to the Adviser any other information
relating to the Assets that is required to be filed by the Adviser or the
Trust
2
<PAGE>
with the Securities and Exchange Commission ("SEC") or sent to shareholders
under the 1940 Act (including the rules adopted thereunder) or any
exemptive or other relief that the Adviser or the Trust obtains from the
SEC. The Sub-Adviser agrees that all records that it maintains on behalf of
the Fund are property of the Fund and the Sub-Adviser will surrender
promptly to the Fund any of such records upon the Fund's request; provided,
however, that the Sub-Adviser may retain a copy of such records. In
addition, for the duration of this Agreement, the Sub-Adviser shall
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act any
such records as are required to be maintained by it pursuant to this
Agreement, and shall transfer said records to any successor Sub-Adviser
upon the termination of his Agreement (or, if there is no successor
Sub-Adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Fund's custodian on each business day
with information relating to all transactions concerning the Fund's Assets
and shall provide the Adviser with such information upon request of the
Adviser.
(f) The investment management services provided by the Sub-Adviser under this
Agreement are not to be deemed exclusive and the Sub-Adviser shall be free
to render similar services to others, as long as such services do not
impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill its
commitment under this Agreement.
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held in the Fund. The Adviser shall instruct the custodian and
other parties providing services to the Fund to promptly forward
misdirected proxies to the Sub-Adviser.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners, officers
or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Fund pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's performance of its
duties under this Agreement; provided, however, that nothing herein shall
be construed to relieve the Sub-Adviser of responsibility for compliance
with the Fund's investment objectives, policies, and restrictions, as
provided in Section 1 hereunder, in connection with its management of the
Assets.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
3
<PAGE>
(a) The Trust's Agreement and Declaration of Trust, as filed with the Secretary
of State of the Commonwealth of Massachusetts (such Agreement and
Declaration of Trust, as in effect on the date of this Agreement and as
amended from time to time, herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Fund.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s) which
is attached hereto and made part of this Agreement. The fee will be
calculated based on the average monthly market value of the Assets under
the Sub-Adviser's management and will be paid to the Sub-Adviser monthly.
Except as may otherwise be prohibited by law or regulation (including any
SEC staff current interpretation thereon), the Sub-Adviser may, in its
discretion and from time to time, waive a portion of its fee.
5. LIMITATION OF LIABILITY OF THE SUB-ADVISER. The Sub-Adviser shall not be
liable for any error of judgment or for any loss suffered by the Adviser in
connection with performance of its obligations under this Agreement, except
a loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services (in which case any award of damages
shall be limited to the period and the amount set forth in Section 36(b)(3)
of the 1940 Act), or a loss resulting from willful misfeasance, bad faith
or negligence on the Sub-Adviser's part in the performance of its duties or
from reckless disregard of its obligations and duties under this Agreement,
except as may otherwise be provided under provisions of applicable state
law which cannot be waived or modified hereby.
6. REPORTS. During the term of this Agreement, the Adviser agrees to furnish
the Sub-Adviser at its principal office all prospectuses, proxy statements,
reports to stockholders, sales literature or other materials prepared for
distribution to stockholders of the Funds, the Trust or the public that
refer to the Sub-Adviser or its clients in any way prior to use thereof and
not to use material if the Sub-Adviser reasonably objects in writing within
five business days (or such other period as may be mutually agreed) after
receipt thereof. The Sub-Adviser's right to object to such materials is
limited to the portions of such materials that expressly relate to the
Sub-Adviser, its services and its clients. The Adviser agrees to use its
reasonable best efforts to ensure that materials prepared by its employees
or agents or its affiliates that refer to the Sub-Adviser or its clients in
any way are consistent with those materials previously approved by the
Sub-Adviser as referenced in the first sentence of this paragraph. Sales
literature may be furnished to the Sub-Adviser by first class or overnight
mail, facsimile transmission equipment or hand delivery.
4
<PAGE>
7. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or damages
(including reasonable attorney's fees and other related expenses) howsoever
arising from or in connection with this Agreement or the performance by the
Sub-Adviser of its duties hereunder; provided, however, that the
Sub-Adviser shall not be required to indemnify or otherwise hold the
Adviser harmless under this Section 7 where the claim against, or the loss,
liability or damage experienced by the Adviser, is caused by or is
otherwise directly related to the Adviser's own willful misfeasance, bad
faith or negligence, or to the reckless disregard of its duties under this
Agreement.
The Adviser shall indemnify and hold harmless the Sub-Adviser from and
against any and all claims, losses, liabilities or damages (including
reasonable attorney's fees and other related expenses) howsoever arising
from or in connection with the performance by the Adviser of its duties
under this Agreement; provided, however, that the Adviser shall not be
required to indemnify or otherwise hold the Sub-Adviser harmless under this
Section 7 where the claim against, or the loss, liability or damage
experienced by the Sub-Adviser, is caused by or is otherwise directly
related to the Sub-Adviser's own willful misfeasance, bad faith or
negligence, or to the reckless disregard of its duties under this
Agreement.
8. DURATION AND TERMINATION. This Agreement shall become effective upon its
approval by the Trust's Board of Trustees and by the vote of a majority of
the outstanding voting securities of the Fund; provided, however, that at
any time the Adviser shall have obtained exemptive relief from the SEC
permitting it to engage a Sub-Adviser without first obtaining approval of
the Agreement from a majority of the outstanding voting securities of the
Fund(s) involved, the Agreement shall become effective upon its approval by
the Trust's Board of Trustees. Any Sub-Adviser so selected and approved
shall be without the protection accorded by shareholder approval of an
investment adviser's receipt of compensation under Section 36(b) of the
1940 Act.
This Agreement shall continue in effect for a period of more than two years
from the date hereof only so long as continuance is specifically approved
at least annually in conformance with the 1940 Act; provided, however, that
this Agreement may be terminated with respect to the Fund (a) by the Fund
at any time, without the payment of any penalty, by the vote of a majority
of Trustees of the Trust or by the vote of a majority of the outstanding
voting securities of the Fund, (b) by the Adviser at any time, without the
payment of any penalty, on not more than 60 days' nor less than 30 days'
written notice to the Sub-Adviser, or (c) by the Sub-Adviser at any time,
without the payment of any penalty, on 60 days' written notice to the
Adviser. This Agreement shall terminate automatically and immediately in
the event of its assignment, or in the event of a termination of the
Adviser's agreement with the Trust. As used in this Section 8, the terms
"assignment" and "vote of a majority of the outstanding voting securities"
shall have the respective meanings set forth in the 1940 Act and the rules
and regulations
5
<PAGE>
thereunder, subject to such exceptions as may be granted by the Commission
under the 1940 Act.
9. GOVERNING LAW. This Agreement shall be governed by the internal laws of the
Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
10. SEVERABILITY. Should any part of this Agreement be held invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
11. NOTICE: Any notice, advice or report to be given pursuant to this Agreement
shall be deemed sufficient if delivered or mailed by registered, certified
or overnight mail, postage prepaid addressed by the party giving notice to
the other party at the last address furnished by the other party:
To the Adviser at: SEI Investments Management Corporation
One Freedom Valley Drive
Oaks, Pennsylvania 19456
Attention: Legal Department
To the Sub-Adviser at: Salomon Brothers Asset Management Inc
7 World Trade Center, 38th Floor
New York, New York 10048
12. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject matter.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
A copy of the Declaration of Trust of the Trust is on file with the
Secretary of State of the Commonwealth of Massachusetts, and notice is hereby
given that the obligations of this instrument are not binding upon any of the
Trustees, officers or shareholders of the Fund or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
Commission, whether of special or
6
<PAGE>
general application, such provision shall be deemed to incorporate the effect of
such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI INVESTMENTS MANAGEMENT CORPORATION SALOMON BROTHERS ASSET MANAGEMENT INC
By: /s/ Todd Cipperman By: /s/ Peter Wilby
------------------------------ ----------------------------
Name: Todd Cipperman Name: Peter Wilby
------------------------------ ----------------------------
Title: Senior Vice President Title: Managing Director
---------------------------- --------------------------
7
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
SALOMON BROTHERS ASSET MANAGEMENT INC
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate of up to:
FUND FEE (IN BASIS POINTS)
SEI VP Emerging Markets Debt Fund 0.40% (40 basis points on the first
$250 million of assets)
0.35% (35 basis points on assets over
$250 million)
<PAGE>
April 12, 2000
SEI Insurance Products Trust
One Freedom Valley Drive
Oaks, Pennsylvania 19456
Re: Opinion of Counsel regarding Post-Effective Amendment No. 2 to the
Registration Statement Filed on Form N-1A under the Securities Act of 1933
(File No. 333-70013).
--------------------------------------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to SEI Insurance Products Trust, a Massachusetts
business trust (the "Trust"), in connection with the above-referenced
Registration Statement (as amended, the "Registration Statement") which relates
to the Trust's units of beneficial interest, without par value (collectively,
the "Shares"). This opinion is being delivered to you in connection with the
Trust's filing of Post-Effective Amendment No. 2 to the Registration Statement
(the "Amendment") to be filed with the Securities and Exchange Commission
pursuant to Rule 485(b) of the Securities Act of 1933 (the "1933 Act"). With
your permission, all assumptions and statements of reliance herein have been
made without any independent investigation or verification on our part except to
the extent otherwise expressly stated, and we express no opinion with respect to
the subject matter or accuracy of such assumptions or items relied upon.
In connection with this opinion, we have reviewed, among other things, executed
copies of the following documents:
(a) a certificate of the Commonwealth of Massachusetts as to the
existence and good standing of the Trust;
(b) the Agreement and Declaration of Trust for the Trust and all
amendments and supplements thereto (the "Declaration of Trust");
<PAGE>
SEI Insurance Products Trust
April 12, 2000
Page 2
(c) a certificate executed by Cynthia M. Parrish, Assistant Secretary of
the Trust, certifying as to the Trust's Declaration of Trust and
By-Laws (the "By-Laws"), and certain resolutions adopted by the Board
of Trustees of the Trust authorizing the issuance of the Shares; and
(d) a printer's proof of the Amendment.
In our capacity as counsel to the Trust, we have examined the originals, or
certified, conformed or reproduced copies, of all records, agreements,
instruments and documents as we have deemed relevant or necessary as the basis
for the opinion hereinafter expressed. In all such examinations, we have assumed
the legal capacity of all natural persons executing documents, the genuineness
of all signatures, the authenticity of all original or certified copies, and the
conformity to original or certified copies of all copies submitted to us as
conformed or reproduced copies. As to various questions of fact relevant to such
opinion, we have relied upon, and assume the accuracy of, certificates and oral
or written statements of public officials and officers or representatives of the
Trust. We have assumed that the Amendment, as filed with the Securities and
Exchange Commission, will be in substantially the form of the printer's proof
referred to in paragraph (d) above.
Based upon, and subject to, the limitations set forth herein, we are of the
opinion that the Shares, when issued and sold in accordance with the Declaration
of Trust and By-Laws, and for the consideration described in the Registration
Statement, will be legally issued, fully paid and nonassessable under the laws
of the Commonwealth of Massachusetts.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not concede that we are in
the category of persons whose consent is required under Section 7 of the 1933
Act.
Very truly yours,
/s/ Morgan, Lewis & Bockius LLP
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in this Registration Statement on Form N-1A of our
report dated February 28, 2000, relating to the seed balance sheet of SEI
Insurance Products Trust, which appears in such Registration Statement. We also
consent to the references to us under the headings "Experts" and "Financial
Statements" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
April 13, 2000
<PAGE>
CODE OF ETHICS
Adopted Under Rule 17j-1
While affirming its confidence in the integrity and good faith of
all of its officers and trustees, SEI Insurance Products Trust (the "Trust"),
recognizes that the knowledge of present or future portfolio transactions and,
in certain instances, the power to influence portfolio transactions which may be
possessed by certain of its officers, employees and trustees could place such
individuals, if they engage in personal transactions in securities which are
eligible for investment by the Trust, in a position where their personal
interest may conflict with that of the Trust.
In view of the foregoing and of the provisions of Rule 17j-1(b)(1)
under the Investment Company Act of 1940 (the "1940 Act"), the Trust has
determined to adopt this Code of Ethics to specify and prohibit certain types of
transactions deemed to create conflicts of interest (or at least the potential
for or the appearance of such a conflict), and to establish reporting
requirements and enforcement procedures.
I. STATEMENT OF GENERAL PRINCIPLES.
In recognition of the trust and confidence placed in the Trust by
its shareholders, and to give effect to the Trust's belief that its operations
should be directed to the benefit of its shareholders, the Trust hereby adopts
the following general principles to guide the actions of its trustees, officers
and employees.
(1) The interests of the Trust's shareholders are paramount,
and all of the Trust's personnel must conduct themselves
and their operations to give maximum effect to this tenet
by assiduously placing the interests of the shareholders
before their own.
(2) All personal transactions in securities by the Trust's
personnel must be accomplished so as to avoid even the
appearance of a conflict of interest on the part of such
personnel with the interests of the Trust and its
shareholders.
(3) All of the Trust's personnel must avoid actions or
activities that allow (or appear to allow) a person to
profit or benefit from his or her position with respect to
the Trust, or that otherwise bring into question the
person's independence or judgment.
II. DEFINITIONS.
(1) "Access Person" shall mean (i) each trustee or officer of
the Trust, (ii) each employee of the Trust (or of any
company in a control relationship to the Trust) who, in
connection with his or her regular functions or duties,
makes,
<PAGE>
participates in, or obtains information regarding the
purchase or sale of a security by the Trust or any
series thereof (herein a "Fund"), or whose functions
relate to the making of any recommendations with respect
to such purchases or sales, and (iii) any natural person
in a control relationship to the Trust who obtains
information concerning recommendations made to or by the
Trust with respect to the purchase or sale of a security
by any Fund.
(2) "Beneficial ownership" of a security is to be determined
in the same manner as it is for purposes of Section 16 of
the Securities Exchange Act of 1934. This means that a
person should generally consider himself the beneficial
owner of any securities in which he has a direct or
indirect pecuniary interest. In addition, a person should
consider himself the beneficial owner of securities held
by his spouse, his minor children, a relative who shares
his home, or other persons by reason of any contract,
arrangement, understanding or relationship that provides
him with sole or shared voting or investment power.
(3) "Control" shall have the same meaning as that set forth in
Section 2(a)(9) of the 1940 Act. Section 2(a)(9) provides
that "control" means the power to exercise a controlling
influence over the management or policies of a company,
unless such power is solely the result of an official
position with such company. Ownership of 25% or more of a
company's outstanding voting security is presumed to give
the holder thereof control over the company. Such
presumption may be countered by the facts and
circumstances of a given situation.
(4) "Independent Trustee" means a Trustee of the Trust who is
not an "interested person" of the Trust within the meaning
of Section 2(a)(19) of the 1940 Act.
(5) "Special Purpose Investment Personnel" means each Access
Person who, in connection with his or her regular
functions (including, where appropriate, attendance at
Board meetings and other meetings at which the official
business of the Trust or any Fund thereof is discussed or
carried on), obtains contemporaneous information regarding
the purchase or sale of a security by the Trust. Special
Purpose Investment Personnel shall occupy this status only
with respect to those securities as to which he or she
obtains such contemporaneous information.
(6) "Purchase or sale of a security" includes, among other
things, the writing of an option to purchase or sell a
security.
(7) "Security" shall have the same meaning as that set forth
in Section 2(a)(36) of the 1940 Act, except that it shall
not include securities issued by the Government of the
United States or an agency thereof, bankers' acceptances,
-2-
<PAGE>
bank certificates of deposit, commercial paper and
registered, open-end mutual funds.
(8) A "Security held or to be acquired" by the Trust or any
Fund means any Security which, within the most recent
fifteen days, (i) is or has been held by the Trust or any
Fund thereof, or (ii) is being or has been considered by
the Fund's investment adviser for purchase by the Fund.
(9) A Security is "being purchased or sold" by the Trust from
the time when a purchase or sale program has been
communicated to the person who places the buy and sell
orders for the Trust until the time when such program has
been fully completed or terminated.
III. PROHIBITED PURCHASES AND SALES OF SECURITIES.
(1) No Access Person shall, in connection with the purchase or
sale, directly or indirectly, by such person of a Security
held or to be acquired by any Fund of the Trust:
(A) employ any device, scheme or artifice to defraud
such Fund;
(B) make to such Fund any untrue statement of a
material fact or omit to state to such Fund a
material fact necessary in order to make the
statements made, in light of the circumstances
under which they are made, not misleading;
(C) engage in any act, practice or course of business
which would operate as a fraud or deceit upon
such Fund; or
(D) engage in any manipulative practice with respect
to Fund.
(2) No Special Purpose Investment Personnel may purchase or
sell, directly or indirectly, any Security as to which
such person is a Special Purpose Investment Personnel in
which he had (or by reason of such transaction acquires)
any Beneficial Ownership at any time within 7 calendar
days before or after the time that the same (or a related)
Security is being purchased or sold by any Fund.
(3) No Special Purpose Investment Personnel may sell a
Security as which he or she is a Special Purpose
Investment Personnel within 60 days of acquiring
beneficial ownership of that Security.
-3-
<PAGE>
IV. ADDITIONAL RESTRICTIONS AND REQUIREMENTS
(1) No Access Person shall accept or receive any gift of more
than DE MINIMIS value from any person or entity that does
business with or on behalf of the Trust.
(2) Each Access Person (other than the Trust's Independent
Trustees and its Trustees and officers who are not
currently affiliated with or employed by the Trust's
investment adviser or principal underwriter) who is not
required to provide such information under the terms of a
code of ethics described in Section VII hereof must
provide to the Review Officer a complete listing of all
securities owned by such person as of December 31, 1994.
Thereafter, each such person shall submit a revised list
of such holdings to the Review Officer as of December 31st
of each subsequent year. The initial listing must be
submitted no later than March 31, 1995 (or within 10 days
of the date upon which such person first becomes an Access
Person of the Trust), and each update thereafter must be
provided no later than 30 days after the start of the
subsequent year.
V. REPORTING OBLIGATION.
(1) Each Access Person (other than the Trust's Independent
Trustees) shall report all transactions in Securities in
which the person has, or by reason of such transaction
acquires, any direct or indirect beneficial ownership.
Reports shall be filed with the Review Officer quarterly.
The Review Officer shall submit confidential quarterly
reports with respect to his or her own personal securities
transactions to an officer designated to receive his or
her reports ("Alternate Review Officer"), who shall act in
all respects in the manner prescribed herein for the
Review Officer.
(2) Every report shall be made not later than 10 days after
the end of the calendar quarter in which the transaction
to which the report relates was effected, and shall
contain the following information:
(A) The date of the transaction, the title and the
number of shares or the principal amount of each
security involved;
(B) The nature of the transaction (i.e., purchase,
sale or any other type of acquisition or
disposition);
(C) The price at which the transaction was effected;
-4-
<PAGE>
(D) The name of the broker, dealer or bank with or
through whom the transaction was effected; and
(E) The date the report was signed.
(3) In the event no reportable transactions occurred during
the quarter, the report should be so noted and returned
signed and dated
(4) An Access Person who would otherwise be required to report
his or her transactions under this Code shall not be
required to file reports pursuant to this Section VI where
such person is required to file reports pursuant to a code
of ethics described in Section VII, hereof.
(5) An Independent Trustee shall report transactions in
Securities only if the Trustee knew at the time of the
transaction or, in the ordinary course of fulfilling his
or her official duties as a trustee, should have known,
that during the 15 day period immediately preceding or
following the date of the transaction, such security was
purchased or sold, or was being considered for purchase or
sale, by the Trust. (The "should have known" standard
implies no duty of inquiry, does not presume there should
have been any deduction or extrapolation from discussions
or memoranda dealing with tactics to be employed meeting
the Trust's investment objectives, or that any knowledge
is to be imputed because of prior knowledge of the Trust's
portfolio holdings, market considerations, or the Trust's
investment policies, objectives and restrictions.)
(6) Any such report may contain a statement that the report
shall not be construed as an admission by the person
making such report that he has any direct or indirect
beneficial ownership in the security to which the report
relates.
(7) Each Independent Trustee shall report the name of any
publicly-owned company (or any company anticipating a
public offering of its equity securities) and the total
number of its shares beneficially owned by him or her if
such total ownership is more than 1/2 of 1% of the
company's outstanding shares. Such report shall be made
promptly after the date on which the Trustee's ownership
interest equalled or exceeded 1/2 of 1%.
VI. REVIEW AND ENFORCEMENT.
(1) The Review Officer shall compare all reported personal
securities transactions with completed portfolio
transactions of the Trust and a list of securities being
considered for purchase or sale by the Trust's adviser(s)
to determine whether a violation of this Code may have
occurred. Before making any determination
-5-
<PAGE>
that a violation has been committed by any person, the
Review Officer shall give such person an opportunity to
supply additional explanatory material.
(2) If the Review Officer determines that a violation of this
Code may have occurred, he shall submit his written
determination, together with the confidential monthly
report and any additional explanatory material provided by
the individual, to the President of the Trust and outside
counsel, who shall make an independent determination as to
whether a violation has occurred.
(3) If the President and outside counsel find that a violation
has occurred, the President shall impose upon the
individual such sanctions as he or she deems appropriate
and shall report the violation and the sanction imposed to
the Board of Trustees of the Trust.
(4) No person shall participate in a determination of whether
he has committed a violation of the Code or of the
imposition of any sanction against himself. If a
securities transaction of the President is under
consideration, any Vice President shall act in all
respects in the manner prescribed herein for the
President.
VII. INVESTMENT ADVISER'S, ADMINISTRATOR'S OR PRINCIPAL UNDERWRITER'S
CODE OF ETHICS.
Each investment adviser (including, where applicable, any
sub-adviser), administrator or manager (where applicable), and principal
underwriter of the Trust shall:
(1) Submit to the Board of Trustees of the Trust a copy of its
code of ethics adopted pursuant to Rule 17j-1, which code
shall comply with the recommendations of the Investment
Company Institute's Advisory Group on Personal Investing
or be accompanied by a written statement explaining any
differences and supplying the rationale therefor;
(2) Promptly report to the Trust in writing any material
amendments to such Code;
(3) Promptly furnish to the Trust upon request copies of any
reports made pursuant to such Code by any person who is an
Access Person as to the Trust; and
(4) Shall immediately furnish to the Trust, without request,
all material information regarding any violation of such
Code by any person who is an Access Person as to the
Trust.
-6-
<PAGE>
VIII. RECORDS.
The Trust shall maintain records in the manner and to the extent
set forth below, which records may be maintained under the conditions described
in Rule 31a-2 under the Investment Company Act and shall be available for
examination by representatives of the Securities and Exchange Commission.
(1) A copy of this Code and any other code which is, or at any
time within the past five years has been, in effect shall
be preserved in an easily accessible place;
(2) A record of any violation of this Code and of any action
taken as a result of such violation shall be preserved in
an easily accessible place for a period of not less than
five years following the end of the fiscal year in which
the violation occurs;
(3) A copy of each report made by an officer or trustee
pursuant to this Code shall be preserved for a period of
not less than five years from the end of the fiscal year
in which it is made, the first two years in an easily
accessible place; and
(4) A list of all persons who are, or within the past five
years have been, required to make reports pursuant to this
Code shall be maintained in an easily accessible place.
IX. MISCELLANEOUS
(1) CONFIDENTIALITY. All reports of securities transactions
and any other information filed with the Trust pursuant to
this Code shall be treated as confidential.
(2) INTERPRETATION OF PROVISIONS. The Board of Trustees may
from time to time adopt such interpretations of this Code
as it deems appropriate.
(3) PERIODIC REVIEW AND REPORTING. The President of the Trust
shall report to the Board of Trustees at least annually as
to the operation of this Code and shall address in any
such report the need (if any) for further changes or
modifications to this Code.
Adopted this __ day
of March, 1999.
-7-
<PAGE>
FEBRUARY 2000
AS AMENDED AND RESTATED
ALLIANCE CAPITAL MANAGEMENT L.P.
CODE OF ETHICS AND STATEMENT OF POLICY AND PROCEDURES REGARDING
PERSONAL SECURITIES TRANSACTIONS
1. PURPOSES
(a) Alliance Capital Management L.P. ("Alliance", "we" or "us") is a
registered investment adviser and acts as investment manager or
adviser to investment companies and other Clients. In this capacity,
we serve as fiduciaries and owe our Clients an undivided duty of
loyalty. We must avoid even the appearance of a conflict that may
compromise the trust Clients have placed in us and must insist on
strict adherence to fiduciary standards and compliance with all
applicable federal and state securities laws. Adherence to this Code
of Ethics and Statement of Policy and Procedures Regarding Personal
Securities Transactions (the "Code and Statement") is a fundamental
condition of service with us, any of our subsidiaries or our general
partner (the "Alliance Group").
(b) The Code and Statement is intended to comply with Rule 17j-1 under the
Investment Company Act which applies to us because we serve as an
investment adviser to registered investment companies. Rule 17j-1
specifically requires us to adopt a code of ethics that contains
provisions reasonably necessary to prevent our "access persons"
(defined in Rule 17j-1 to cover persons such as officers, directors,
portfolio managers, traders, research analysts and others) from
engaging in fraudulent conduct, including insider trading. Each
investment company we advise has also adopted a code of ethics with
respect to its access persons. As set forth in Section 3 below, our
Code and Statement applies to all Employees and all other individuals
who are Access Persons. The Code and Statement is also intended to
comply with the provisions of Rule 204-2 under the Investment Advisers
Act of 1940 (the "Advisers Act") which requires us to maintain records
of securities transactions in which certain of our personnel have any
Beneficial Ownership.
(c) All Employees and all other individuals who are Access Persons
(collectively, "you") also serve as fiduciaries with respect to our
Clients and in this capacity you owe an undivided duty of loyalty to
our Clients. As part of this duty and as expressed throughout the Code
and Statement, you must at all times:
(i) Place the interests of our Clients first;
(ii) Conduct all personal securities transactions consistent with
this Code and Statement and in such a manner that avoids any
actual or potential conflict of interest or any abuse of your
responsibility and position of trust; and
(iii) Abide by the fundamental standard that you not take
inappropriate advantage of your position.
-1-
<PAGE>
(d) This Code and Statement does not attempt to identify all possible
conflicts of interests and literal compliance with each of the
specific procedures will not shield you from liability for personal
trading or other conduct which violates your fiduciary duties to our
Clients. In addition to the specific prohibitions contained in this
Code and Statement, you are also subject to a general requirement not
to engage in any act or practice that would defraud our Clients. This
general prohibition includes, in connection with the purchase or sale
of a Security held or to be acquired or sold (as this phrase is
defined below in Section 2(k)) by a Client:
(i) Making any untrue statement of a material fact;
(ii) Creating materially misleading impressions by omitting to
state or failing to provide any information necessary to make
any statements made, in light of the circumstances in which
they are made, not misleading;
(iii) Making investment decisions, changes in research ratings and
trading decisions other than exclusively for the benefit of
and in the best interest of our Clients;
(iv) Using information about investment or trading decisions or
changes in research ratings (whether considered, proposed or
made) to benefit or avoid economic injury to you or anyone
other than our Clients;
(v) Taking, delaying or omitting to take any action with respect
to any research recommendation, report or rating or any
investment or trading decision for a Client in order to avoid
economic injury to you or anyone other than our Clients;
(vi) Purchasing or selling a Security on the basis of knowledge of
a possible trade by or for a Client;
(vii) Revealing to any other person (except in the normal course of
your duties on behalf of a Client) any information regarding
Securities transactions by any Client or the consideration by
any Client of Alliance of any such Securities transactions; or
(viii) Engaging in any manipulative practice with respect to any
Client.
(e) The provisions contained in this Code and Statement MUST be followed
when making a personal securities transaction. These policies and
procedures, which must be followed, are considerably more restrictive
and time-consuming than those applying to investments in the mutual
funds and other Clients we advise. If you are not prepared to comply
with these policies and procedures, you must forego personal trading.
-2-
<PAGE>
2. DEFINITIONS
The following definitions apply for purposes of the Code and Statement in
addition to the definitions contained in the text itself.
(a) "ACCESS PERSON" means any director or officer of the general partner
of Alliance, as well as any of the following persons:
(i) any Employee who, in connection with his or her regular functions
or duties --
(A) makes, participates in, or obtains information regarding the
purchase or sale of a Security by a Client, or whose
functions relate to the making of any recommendations with
respect to such purchases or sales;
(B) obtains information from any source regarding any change, or
consideration of any change in Alliance's internal research
coverage, a research rating or an internally published view
on a Security or issuer; or
(C) obtains information from any source regarding the placing or
execution of an order for a Client account; and
(ii) any natural person having the power to exercise a controlling
influence over the management or policies of Alliance (unless
that power is solely the result of his or her position with
Alliance) who:
(A) obtains information concerning recommendations made to a
Client with regard to the purchase or sale of a Security;
(B) obtains information from any source regarding any change, or
consideration of any change in research coverage, research
rating or a published view on a Security or issuer; and
(C) obtains information from any source regarding the placing or
execution of an order for a Client account.
(b) A SECURITY IS "BEING CONSIDERED FOR PURCHASE OR SALE" WHEN:
(i) an Alliance research analyst issues research information
(including as part of the daily morning call) regarding initial
coverage of, or changing a rating with respect to, a Security;
(ii) a portfolio manager has indicated (during the daily morning
call or otherwise) his or her intention to purchase or sell a
Security;
(iii) a portfolio manager places an order for a Client; or
-3-
<PAGE>
(iv) a portfolio manager gives a trader discretion to execute an order
for a Client over a specified period of time.
(c) "BENEFICIAL OWNERSHIP" is interpreted in the same manner as in
determining whether a person is subject to the provisions of Section
16 of the Securities Exchange Act of 1934 ("Exchange Act"), Rule 16a-1
and the other rules and regulations thereunder and includes ownership
by any person who, directly or indirectly, through any contract,
arrangement, understanding, relationship or otherwise, has or shares a
direct or indirect pecuniary interest in a Security. For example, an
individual has an indirect pecuniary interest in any Security owned by
the individual's spouse. Beneficial Ownership also includes, directly
or indirectly, through any contract, arrangement, understanding,
relationship, or otherwise, having or sharing "voting power" or
"investment power," as those terms are used in Section 13(d) of the
Exchange Act and Rule 13d-3 thereunder.
(d) "CLIENT" means any person or entity, including an investment company,
for which Alliance serves as investment manager or adviser.
(e) "COMPLIANCE OFFICER" refers to Alliance's Compliance Officer.
(f) "CONTROL" has the same meaning set forth in Section 2(a)(9) of the
Investment Company Act.
(g) "EMPLOYEE" refers to any person who is an employee of any member of
the Alliance Group, including both part-time employees, as well as
consultants (acting in the capacity of a portfolio manager, trader or
research analyst) under the control of Alliance who, but for their
status as consultants, would otherwise come within the definition of
Access Person.
(h) "INITIAL PUBLIC OFFERING" means an offering of securities registered
under the Securities Act of 1933, the issuer of which, immediately
before the registration, was not subject to the reporting requirements
of Sections 13 or 15(d) of the Securities Exchange Act of 1934.
(i) "INVESTMENT PERSONNEL" refers to:
(i) any Employee who acts in the capacity of a portfolio manager,
research analyst or trader;
(ii) any Employee who assists someone acting in the capacity of a
portfolio manager, research analyst or trader and as an assistant
has access to information generated or used by portfolio
managers, research analysts and traders (including, for example,
assistants who have access to the Alliance Investment Review or
the Alliance International Investment Review);
(iii)any Employee who receives the Alliance Investment Review or the
Alliance International Investment Review; or
-4-
<PAGE>
(iv) any natural person who Controls Alliance and who obtains
information concerning recommendations made to a Client regarding
the purchase or sale of securities by the Client.
(j) "LIMITED OFFERING" means an offering that is exempt from registration
under the Securities Act of 1933 pursuant to Sections 4(2) or 4(6)
thereof or pursuant to Rules 504, 505 or 506 under the Securities Act
of 1933.
(k) "PERSONAL ACCOUNT" refers to any account (including, without
limitation, a custody account, safekeeping account and an account
maintained by an entity that may act in a brokerage or a principal
capacity) in which an Access Person or Employee has any Beneficial
Ownership and any such account maintained by or for a financial
dependent. For example, this definition includes Personal Accounts of:
(i) an Access Person's or Employee's spouse, including a legally
separated or divorced spouse who is a financial dependent,
(ii) financial dependents residing with the Access Person or
Employee, and
(iii) any person financially dependent on an Access Person or Employee
who does not reside with that person, including financially
dependent children away at college.
(l) "PURCHASE OR SALE OF A SECURITY" includes, among other transactions,
the writing or purchase of an option to sell a Security and any short
sale of a Security.
(m) "SECURITY" has the meaning set forth in Section 2(a)(36) of the
Investment Company Act and any derivative thereof, commodities,
options or forward contracts, except that it shall not include shares
of open-end investment companies registered under the Investment
Company Act, securities issued by the Government of the United States,
short-term debt securities that are government securities within the
meaning of Section 2(a)(16) of the Investment Company Act, bankers'
acceptances, bank certificates of deposit, commercial paper, and such
other money market instruments as are designated by the Compliance
Officer.
-5-
<PAGE>
(n) "SECURITY HELD OR TO BE ACQUIRED OR SOLD" means:
(i) any Security which, within the most recent 15 days (1) is or has
been held by a Client or (2) is being or has been considered by a
Client (to the extent known by Alliance) or Alliance for purchase
by the Client; and
(ii) any option to purchase or sell, and any Security convertible into
or exchangeable for, a Security.
(o) "SUBSIDIARY" refers to either of the following types of entities with
respect to which Alliance, directly or indirectly, through the
ownership of voting securities, by contract or otherwise has the power
to direct or cause the direction of management or policies of such
entity:
(i) any U.S. entity engaged in money management; and
(ii) any non-U.S. entity engaged in money management for U.S.
accounts.
3. APPLICATION
(a) This Code and Statement applies to all Employees and to all other
individuals who are Access Persons. Please note that certain
provisions apply to all Employees while other provisions apply only to
Access Persons and others apply only to certain categories of Access
Persons who are also Investment Personnel (e.g., portfolio managers
and research analysts).
(b) Alliance will provide a copy of this Code and Statement to all
Employees and all individuals who are Access Persons. In addition, the
Compliance Officer will maintain lists of Access Persons and
Investment Personnel, including a separate list of portfolio managers
and research analysts.
4. LIMITATIONS ON PERSONAL SECURITIES TRANSACTIONS
(a) ALL EMPLOYEES
It is the responsibility of each Employee to ensure that all personal
securities transactions are made in strict compliance with the
restrictions and procedures in the Code and Statement and otherwise
comply with all applicable legal and regulatory requirements.
EMPLOYEES MUST HOLD ALL SECURITIES IN A PERSONAL ACCOUNT. This
requirement applies to all types of personal securities transactions
including, for example, the purchase of Securities in a private
placement or other direct investment. In addition, Employees may not
take physical possession of certificates or other formal evidence of
ownership.
-6-
<PAGE>
Personal securities transactions for Employees may be effected only in
a Personal Account and in accordance with the following provisions:
(i) DESIGNATED BROKERAGE ACCOUNTS
All Personal Accounts of an Employee that are maintained as
brokerage accounts must be held only at the following designated
broker-dealers: Donaldson, Lufkin & Jenrette, Merrill Lynch &
Co., and Charles Schwab.
(ii) SECURITIES BEING CONSIDERED FOR CLIENT PURCHASE OR SALE
An Employee may not purchase or sell a Security, or engage in any
short sale of a Security, in a Personal Account if, at the time
of the transaction, the Security is being considered for purchase
or sale for a Client or is being purchased or sold for a Client.
The following non-exhaustive list of examples illustrates this
restriction:
- An Alliance research analyst issues research information
(including as part of the daily morning call) regarding
initial coverage of, or changing a rating with respect to, a
Security.
- A portfolio manager has, during the daily morning call,
indicated his or her intention to purchase or sell a
Security.
- A portfolio manager places an order in the Security to
purchase or sell the Security for a Client.
- An open order in the Security exists on the trading desk.
- An open limit order exists on the trading desk, and it is
reasonably likely that the Security will reach that limit
price in the near future.
(iii)RESTRICTED LIST
A Security may not be purchased or sold in a Personal Account if,
at the time of the transaction, the Security appears on the
Alliance Daily Restricted List and is restricted for Employee
transactions. The Daily Restricted List is made available each
business day to all Employees via Lotus Notes and the Alliance
Alert.
(iv) PRECLEARANCE REQUIREMENT
An Employee may not purchase or sell, directly or indirectly, any
Security in which the Employee has (or after such transaction
would have) any Beneficial Ownership unless the Employee obtains
the prior written approval to the transaction from the Compliance
Department and, in the case of Investment Personnel, the head of
the business unit in which the Employee works. A request
-7-
<PAGE>
for preclearance must be made in writing in advance of the
contemplated transaction and must state:
a. the name of the Security involved,
b. the number of shares or principal amount to be purchased or
sold, and
c. a response to all questions contained in the appropriate
pre-clearance form.
Preclearance requests will be acted on only between the hours of
10:00 a.m. and 3:30 p.m. Any approval given under this paragraph
will remain in effect only until the end of the trading day on
which the approval was granted.
When a Security is being considered for purchase or sale for a
Client or is being purchased or sold for a Client following the
approval on the same day of a personal trading request form with
respect to the same security, the Compliance Department is
authorized to cancel the personal order if (x) it has not been
executed and the order exceeds a market value of $50,000 or (y)
the Compliance Department determines, after consulting with the
trading desk and the appropriate business unit head (if
available), that the order, based on market conditions, liquidity
and other relevant factors, could have an adverse impact on a
Client or on a Client's ability to purchase or sell the Security
or other Securities of the issuer involved.
(v) AMOUNT OF TRADING
No more than an aggregate of 20 securities transactions may
occur in an Employee's Personal Accounts in any consecutive
thirty-day period.
(vi) DISSEMINATION OF RESEARCH INFORMATION
An Employee may not buy or sell any Security that is the
subject of "significantly new" or "significantly changed"
research during a forty-eight hour period commencing with
the first publication or release of the research. The terms
"significantly new" and "significantly changed" include:
a. the initiation of coverage by an Alliance research
analysts;
b. any change in a research rating or position by an
Alliance research analyst (unless the research analyst
who makes the change advises the Compliance Department
in writing that the change is the result of an
unanticipated widely disseminated announcement or
market event, e.g., the announcement of a major
earnings warning as opposed to the research analysts
independently rethinking his or her subjective
assessment of the security); and
-8-
<PAGE>
c. any other rating, view, opinion, or advice from an
Alliance research analyst, the issuance (or reissuance)
of which in the opinion of such research analyst or
head of research would be reasonably likely to have a
material effect on the price of the security.
(b) ACCESS PERSONS
In addition to the requirements set forth in paragraph (a) of this
Section 4, the following restrictions apply to all Access Persons:
(i) SHORT SALES
No Access Person shall engage in any short sale of a Security if,
at the time of the transaction, any Client has a long position in
such Security (except that an Access Person may engage in short
sales against the box and covered call writing provided that
these personal securities transactions do not violate the
prohibition against short-term trading).
(ii) SHORT-TERM TRADING
All Access Persons are subject to a mandatory buy and hold of all
Securities for 60 calendar days. An Access Person may, however,
after 30 calendar days, sell a Security if the sale price is
lower than the original purchase price (i.e., at a loss on the
original investment). Any trade made in violation of this
paragraph shall be unwound, or, if that is not practicable, all
profits from the short-term trading must be disgorged as directed
by the Compliance Officer.
(iii)NON-EMPLOYEE ACCESS PERSONS
Any non-Employee Access Person with actual knowledge that a
Security is being considered for purchase or sale for a Client
may not purchase or sell such Security.
(c) INVESTMENT PERSONNEL
In addition to the requirements set forth in paragraphs (a) and (b) of
this Section 4, the following restrictions apply to all Investment
Personnel:
(i) INITIAL PUBLIC OFFERINGS
No Investment Personnel shall acquire any direct or indirect
Beneficial Ownership in any Securities in any Initial Public
Offering.
(ii) LIMITED OFFERINGS
No Investment Personnel shall acquire any Beneficial Ownership in
any Securities in any Limited Offering of Securities unless the
Compliance Officer and the
-9-
<PAGE>
business unit head give express prior written approval and
document the basis for granting or denying approval after due
inquiry. The Compliance Officer, in determining whether approval
should be given, will take into account, among other factors,
whether the investment opportunity should be reserved for a
Client and whether the opportunity is being offered to the
individual by virtue of his or her position with the Alliance
Group. Investment Personnel so authorized to acquire Securities
in a Limited Offering must disclose that investment when they
play a part in any Client's subsequent consideration of an
investment in the issuer, and in such a case, the decision of
Alliance to purchase Securities of that issuer for a Client will
be subject to an independent review by Investment Personnel with
no personal interest in such issuer.
(iii)BOARD MEMBER OR TRUSTEE
No Investment Personnel shall serve on any board of directors or
trustees or in any other management capacity of any private or
public company without prior written authorization from the
Compliance Officer based upon a determination that such service
would not be inconsistent with the interests of any Client. This
prohibition does not include non-profit corporations, charities
or foundations; however, approval from the Investment Personnel's
supervisor is necessary.
(iv) RECEIPT OF GIFTS
No Investment Personnel shall receive any gift or other thing of
more than DE MINIMIS value from any person or entity, other than
a member of the Alliance Group, that does business with Alliance
on behalf of a Client, provided, however, that receipt of the
following shall not be prohibited:
a. an occasional breakfast, luncheon, dinner or reception,
ticket to a sporting event or the theater, or comparable
entertainment, that is not so frequent, so costly, nor so
extensive as to raise any question of impropriety;
b. a breakfast, luncheon, dinner, reception or cocktail party
in conjunction with a bona fide business meeting; and
c. a gift approved in writing by the Compliance Officer.
(d) PORTFOLIO MANAGERS
In addition to the requirements set forth in paragraphs (a), (b) and
(c) of this Section 4, the following restrictions apply to all persons
acting in the capacity of a portfolio manager of a Client account:
-10-
<PAGE>
(i) BLACKOUT PERIODS
No person acting in the capacity of a portfolio manager shall buy
or sell a Security for a Personal Account within seven calendar
days before and after a Client trades in that Security. In the
case of Client accounts managed by more than one portfolio
manager, this restriction will apply to the portfolio manager who
makes the decision to purchase or sell the relevant Security. If
a portfolio manager engages in such a personal securities
transaction during a blackout period, the Compliance Officer will
break the trade or, if the trade cannot be broken, the Compliance
Officer will direct that any profit realized on the trade be
disgorged.
(ii) ACTIONS DURING BLACKOUT PERIODS
No person acting in the capacity of a portfolio manager shall
delay or accelerate a Client trade due to a previous purchase or
sale of a Security for a Personal Account. In the event that a
portfolio manager determines that it is in the best interest of a
Client to buy or sell a Security for the account of the Client
within seven days of the purchase or sale of the same Security in
a Personal Account, the portfolio manager should contact the
Compliance Officer immediately who may direct that the trade in
the Personal Account be canceled or take other appropriate
relief.
(iii)TRANSACTIONS CONTRARY TO CLIENT POSITIONS
No person acting in the capacity of a portfolio manager shall
purchase or sell a Security in a Personal Account contrary to
investment decisions made on behalf of a Client, unless the
portfolio manager represents and warrants in the personal trading
request form that (x) it is appropriate for the Client account to
buy, sell or continue to hold that Security and (y) the decision
to purchase or sell the Security for the Personal Account arises
from the need to raise or invest cash or some other valid reason
specified by the portfolio manager and approved by the Compliance
Officer and is not otherwise based on the portfolio manager's
view of how the Security is likely to perform.
(e) RESEARCH ANALYSTS
In addition to the requirements set forth in paragraphs (a), (b), (c)
of this Section 4, the following restrictions apply to all persons
acting in the capacity of a research analyst:
(i) BLACKOUT PERIODS
No person acting as a research analyst shall buy or sell a
Security within seven calendar days before and after making a
change in a rating or other published view with respect to that
Security. If a research analyst engages in such a personal
securities transaction during a blackout period, the Compliance
Officer
-11-
<PAGE>
will break the trade or, if the trade cannot be broken, the
Compliance Officer will direct that any profit realized on the
trade be disgorged.
(ii) ACTIONS DURING BLACKOUT PERIODS
No person acting as a research analyst shall delay or accelerate
a rating or other published view with respect to any Security
because of a previous purchase or sale of a Security in such
person's Personal Account. In the event that a research analyst
determines that it is appropriate to make a change in a rating or
other published view within seven days of the purchase or sale of
the same Security in a Personal Account, the research analyst
should contact the Compliance Officer immediately who may direct
that the trade in the Personal Account be canceled or take other
appropriate relief.
(iii)ACTIONS CONTRARY TO RATINGS
No person acting as a research analyst shall purchase or sell a
Security (to the extent such Security is included in the research
analyst's research universe) contrary to an outstanding rating or
a pending ratings change, unless (x) the research analyst
represents and warrants in the personal trading request form that
(as applicable) there is no reason to change the outstanding
rating and (y) the research analyst's personal trade arises from
the need to raise or invest cash or some other valid reason
specified by the research analyst and approved by the Compliance
Officer and is not otherwise based on the research analyst's view
of how the security is likely to perform.
5. EXEMPTED TRANSACTIONS
(a) The pre-clearance requirements, as described in Section 4(a)(iv) of
this Code and Statement, do not apply to:
(i) NON-VOLITIONAL TRANSACTIONS
Purchases or sales that are non-volitional (including, for
example, any Security received as part of an individual's
compensation) on the part of an Employee (and any Access Person
who is not an Employee) or are pursuant to a dividend
reinvestment plan (up to an amount equal to the cash value of a
regularly declared dividend, but not in excess of this amount).
(ii) EXERCISE OF PRO RATA ISSUED RIGHTS
Purchases effected upon the exercise of rights issued by an
issuer PRO RATA to all holders of a class of the issuer's
Securities, to the extent such rights were acquired from such
issuer, and sales of such rights so acquired. This exemption
applies only to the exercise or sale of rights that are issued in
connection with a specific upcoming public offering on a
specified date, as opposed to rights acquired from the issuer
(such as warrants or options), which may be exercised
-12-
<PAGE>
from time-to-time up until an expiration date. This exemption
does not apply to the sale of stock acquired pursuant to the
exercise of rights.
(b) The restrictions on effecting transactions in a (1) Security being
considered for purchase or sale, as described in Sections 4(a)(ii) and
4(b)(iii) or (2) that is the subject of "significantly new" or
"significantly changed" research, as described in Section 4(a)(vi) of
this Code and Statement, do not apply to:
(i) NON-VOLITIONAL TRANSACTIONS
Purchases or sales that are non-volitional (including, for
example, any Security received as part of an individual's
compensation) on the part of an Access Person or are pursuant to
a dividend reinvestment plan (up to an amount equal to the cash
value of a regularly declared dividend, but not in excess of this
amount).
(ii) EXERCISE OF PRO RATA ISSUED RIGHTS
Purchases effected upon the exercise of rights issued by an
issuer PRO RATA to all holders of a class of the issuer's
Securities, to the extent such rights were acquired from such
issuer, and sales of such rights so acquired. This exemption
applies only to the exercise or sale of rights that are issued in
connection with a specific upcoming public offering on a
specified date, as opposed to rights acquired from the issuer
(such as warrants or options), which may be exercised from
time-to-time up until an expiration date. This exemption does not
apply to the sale of stock acquired pursuant to the exercise of
rights.
(iii)DE MINIMIS TRANSACTIONS -- FIXED INCOME SECURITIES
Any of the following Securities, if at the time of the
transaction, the Access Person has no actual knowledge that the
Security is being considered for purchase or sale by a Client,
that the Security is being purchased or sold by the Client or
that the Security is the subject of significantly new or
significantly changed research:
a. Fixed income securities transaction involving no more than
100 units or having a principal amount not exceeding
$25,000; or
b. Non-convertible debt securities and non-convertible
preferred stocks which are rated by at least one nationally
recognized statistical rating organization ("NRSRO") in one
of the three highest investment grade rating categories.
(iv) DE MINIMIS TRANSACTIONS -- EQUITY SECURITIES
Any equity Securities transaction, or series of related
transactions, involving shares of common stock and excluding
options, warrants, rights and other derivatives, provided
-13-
<PAGE>
a. any orders are entered after 10:00 a.m. and before 3:00 p.m.
and are not designated as "market on open" or "market on
close";
b. the aggregate value of the transactions do not exceed (1)
$10,000 for securities with a market capitalization of less
than $1 billion; (2) $25,000 for securities with a market
capitalization of $1 billion to $5 billion and (3) $50,000
for securities with a market capitalization of greater than
$5 billion; and
c. the Access Person has no actual knowledge that the Security
is being considered for purchase or sale by a Client, that
the Security is being purchased or sold by or for the Client
or that the Security is the subject of significantly new or
significantly changed research.
(c) NON-EMPLOYEE ACCESS PERSONS
The restrictions on Employees and Access Persons, as described in
Sections 4(a) and 4(b) of this Code and Statement, do not apply
to non-Employee Access Persons, if at the time of the transaction
involved, such person has no actual knowledge that the Security
involved is being considered for purchase or sale.
(d) EXTREME HARDSHIP
In addition to the exceptions contained in Section 5(a) and (b), the
Compliance Officer may, in very limited circumstances, grant other
exceptions under any Section of the Code and Statement on a
case-by-case basis, provided:
(i) The individual seeking the exception furnishes to the Compliance
Officer:
a. a written statement detailing the efforts made to comply
with the requirement from which the individual seeks an
exception;
b. a written statement containing a representation and warranty
that (1) compliance with the requirement would impose a
severe undue hardship on the individual and (2) the
exception would not, in any manner or degree, harm or
defraud the Client or compromise the individual's or
Alliance's fiduciary duty to any Client; and
c. any supporting documentation that the Compliance Officer may
request;
(ii) The Compliance Officer conducts an interview with the individual
or takes such other steps the Compliance Officer deems
appropriate in order to verify that granting the exception will
not in any manner or degree, harm or defraud the Client or
compromise the individual's or Alliance's fiduciary duty to any
Client; and
-14-
<PAGE>
(iii)The Compliance Officer maintains, along with statements provided
by the individual, a written record that contains:
a. the name of the individual;
b. the specific requirement of Section 4 from which the
individual sought an exception;
c. the name of the Security involved, the number of shares or
principal amount purchased or sold, and the date or dates on
which the Securities were purchased or sold;
d. the reason(s) the individual sought an exception from the
requirements of Section 4;
e. the efforts the individual made to comply with the
requirements of Section 4 from which the individual sought
to be excepted; and
f. the independent basis upon which the Compliance Officer
believes that the exemption should be granted.
(e) Any Employee or Access Person who acquires an interest in any private
investment fund (including a "hedge fund") or any other Security that
cannot be purchased and held in a Personal Account shall be excepted
from the requirement that all Securities be held in a Personal
Account, as described in Section 4(a) of this Code and Statement. Such
Employee or Access Person shall provide the Compliance Officer with a
written statement detailing the reason why such Security cannot be
purchased and held in a Personal Account. Transactions in these
Securities nevertheless remain subject to all other requirements of
this Code and Statement, including applicable private placement
procedures, preclearance requirements and blackout period trading
restrictions.
6. REPORTING
(a) INITIAL HOLDINGS REPORTS BY ALL ACCESS PERSONS
Each Access Person must, at the time of becoming an Access Person,
provide an initial holdings report to the Compliance Officer
disclosing the following:
(i) all Securities beneficially owned by the Access Person (including
the title, number of shares and/or principal amount of each
Security beneficially owned);
(ii) the name of any broker-dealer or financial institution where the
Access Person maintains a Personal Account; and
(iii)the date the report is submitted by the Access Person.
-15-
<PAGE>
This report must be submitted no later than 10 days after a
person becomes an Access Person. In the event that Alliance already
maintains a record of the required information via account statements
received from the Access Person's broker-dealer (because, for example,
a new Access Person is already an Alliance Employee), the Access
Person may satisfy this requirement by (i) confirming in writing
(which may include e-mail) the accuracy of the record within 10 days
after becoming an Access Person and (ii) recording the date of the
confirmation.
(a) ANNUAL HOLDINGS REPORTS BY ACCESS PERSONS
Each Access Person must, by January 30 of each year, provide an annual
holdings report to the Compliance Officer disclosing the following:
(i) all Securities beneficially owned by the Access Person (including
the title, number of shares and/or principal amount of each
Security beneficially owned);
(ii) the name of any broker-dealer or financial institution where the
Access Person maintains a Personal Account; and
(iii) the date the report is submitted by the Access Person.
The first annual holdings report submitted will be for the year
ending December 31, 2000 and must be provided to the Compliance
Officer by January 30, 2001.
The information must be current as of a date not more than 30
days before the report is submitted. In the event that Alliance
already maintains a record of the required information via account
statements received from the Access Person's broker-dealer, an Access
Person may satisfy this requirement by (i) confirming in writing
(which may include e-mail) the accuracy of the record and (ii)
recording the date of the confirmation.
(b) DISCLOSURE OF PERSONAL ACCOUNTS AND BENEFICIALLY OWNED SECURITIES
Upon commencement of employment with a member of the Alliance Group,
an Employee must:
(i) file with the Compliance Officer a list of all Personal Accounts
by completing the Employee Compliance Statement (a copy of which
is attached as Appendix A), and while so employed maintain the
list on a current basis; and
(ii) Disclose to the Compliance Officer all Securities holdings in
which the Employee has any Beneficial Ownership, and thereafter
on an annual basis, to the extent these Securities do not appear
on the Employee's account statements.
(c) ACCESS PERSONS WHO ARE NOT EMPLOYEES OF ALLIANCE
Every Access Person who is not an Employee of Alliance, shall report
to the Compliance Officer the information described in Section 6(a)
and (b) as well as 6(e) below with
-16-
<PAGE>
respect to transactions in any Security in which such Access Person
has, or by reason of such transaction acquires, any Beneficial
Ownership in the Security; provided, however, that such Access Person
is not required to make a report with respect to transactions effected
in any account over which the Access Person does not have any direct
or indirect influence or control, including such an account in which
an Access Person has any Beneficial Ownership.
(d) REPORT CONTENTS
Every report of a non-Employee Access Person required by Section 6(d)
above shall be in writing and shall be delivered not later than
ten days after the end of the calendar quarter in which a transaction
to which the report relates was effected, and shall contain the
following information:
(i) the date of the transaction, the title and the number of shares,
and the principal amount of each Security involved;
(ii) the nature of the transaction (i.e., purchase, sale or any other
type of acquisition or disposition);
(iii) the price at which the transaction was effected; and
(iv) the name of the broker, dealer or bank with or through whom the
transaction was effected.
(e) REPORT REPRESENTATIONS
Any such report may contain a statement that the report is not to be
construed as an admission by the person making the report that he or
she has any direct or indirect Beneficial Ownership in the Security to
which the report relates.
(f) MAINTENANCE OF REPORTS
The Compliance Officer shall maintain the information required by
Section 6 and such other records, if any, as are required by Rule
17j-1 under the Investment Company Act and Rule 204-2 under the
Advisers Act. All reports furnished pursuant to this Section will be
kept confidential, subject to the rights of inspection by the
Compliance Officer, the Transaction Compliance Committee, the
Securities and Exchange Commission and by other third parties pursuant
to applicable law.
7. ANNUAL VERIFICATIONS
Each person subject to this Code and Statement must certify annually that
he or she has read and understands this Code and Statement, recognizes that
he or she is subject thereto and has complied with its provisions and
disclosed or reported all personal Securities transactions
-17-
<PAGE>
required to be disclosed or reported by this Code and Statement. Such
certificates and reports are to be given to the Compliance Officer.
8. SANCTIONS
Upon learning of a violation of this Code and Statement, any member of the
Alliance Group, with the advice of the Compliance Officer, may impose such
sanctions as it deems appropriate, including, among other things, censure,
suspension or termination of service. Individuals subject to this Code and
Statement who fail to comply with this Code and Statement may also be
violating the federal securities laws or other federal and state laws. Any
such person who is suspected of violating this Code and Statement should be
reported immediately to the Compliance Officer.
-18-
<PAGE>
CERTIFICATION
I hereby acknowledge receipt of the Code of Ethics and Statement of Policy
and Procedures Regarding Personal Securities Transactions (the "Code and
Statement") of Alliance Capital Management L.P. and its Subsidiaries. I certify
that I have read and understand the Code and Statement and recognize that I am
subject to its provisions. I also certify that I have complied with the
requirements of the Code and Statement and have disclosed or reported all
personal securities transactions required to be disclosed or reported pursuant
to the Code and Statement.
Name _______________________________________
(PLEASE PRINT)
Signature _______________________________________
Date _______________________________________
-19-
<PAGE>
APPENDIX A
ALLIANCE CAPITAL MANAGEMENT L.P.
EMPLOYEE COMPLIANCE STATEMENT
I hereby certify that I have read and understand the Code of Ethics
and Statement of Policy and Procedures Regarding Personal Securities
Transactions (the "Code and Statement"), dated August 1999 and hereby agree, in
consideration of my continued employment by Alliance Capital Management L.P. or
one of its subsidiaries, to comply with the policies and procedures contained in
the Code and Statement.
1. In connection therewith, I agree to:
a. file with the Compliance Officer and maintain on a current basis a
list of ALL Personal Accounts (as defined in paragraph 2(h) of the
Code and Statement);
b. arrange to have duplicate trade confirmations and periodic statements
for EACH Personal Account submitted to the Compliance Officer directly
by the securities firm maintaining the Account(s); and
c. be personally responsible for determining if any security transaction
for my Personal Account(s) is prohibited by the Code and Statement or
any other Alliance policy statement.
2. The following Personal Account(s) are maintained at the broker-dealer(s)
and/or financial institution(s) named below (if none write "none"):
a. registered in my name at the following BROKER-DEALER(S) AND/OR
FINANCIAL INSTITUTION(S):
______________________________________________________________________
______________________________________________________________________
__________________________________________________
b. registered in the name of my spouse at the following BROKER-DEALER(S)
AND/OR FINANCIAL INSTITUTION(S):
______________________________________________________________________
______________________________________________________________________
__________________________________________________
-20-
<PAGE>
c. registered in the name of a family member who resides with me at the
following BROKER-DEALER(S) AND/OR FINANCIAL INSTITUTION(S):
name of family member name of broker-dealer and/or financial
institution(s)
_____________________ ______________________________________
_____________________ ______________________________________
_____________________ ______________________________________
d. registered in the name of any other person who resides with me and is
financially dependent on me at the following BROKER-DEALER(S) AND/OR
FINANCIAL INSTITUTION(S):
name of person name of broker-dealer and/or financial
institution(s)
_____________________ ______________________________________
_____________________ ______________________________________
_____________________ ______________________________________
e. registered in the name of any other person who does not reside with
me, but who is financially dependent on me, at the following
BROKER-DEALER(S) AND/OR FINANCIAL INSTITUTION(S):
name of person name of broker-dealer and/or financial
institution(s)
_____________________ ______________________________________
_____________________ ______________________________________
_____________________ ______________________________________
3. I have investment discretion over the following other account(s) at the
following BROKER-DEALER(S) AND/OR FINANCIAL INSTITUTION(S) (do NOT list
Client accounts):
name and description of account name of broker-dealer and/or financial
institution(s)
_______________________________ ______________________________________
_______________________________ ______________________________________
_______________________________ ______________________________________
4. I will notify the Compliance Officer if a Personal Account is opened or
closed. If the answers to paragraphs a through e of Section 2 above are all
"none", I certify that neither I nor any member of my family who resides
with me, any other person who resides with me currently and is financially
dependent on me, or any other person who is financially dependent on me
maintains a BROKERAGE ACCOUNT OR OTHER TYPE OF FINANCIAL ACCOUNT.
___________________ __________________________
Date Employee Signature
__________________________
Type or print name
-21-
<PAGE>
CODE OF CONDUCT
All of us within the Capital organization are responsible for maintaining the
very highest ethical standards when conducting business. In keeping with these
standards, we must never allow our own interests to be placed ahead of our
shareholders' and clients' interests.
Over the years we have earned a reputation for the highest integrity. Regardless
of lesser standards that may be followed through business or community custom,
we must observe exemplary standards of honesty and integrity.
REPORTING VIOLATIONS
If you know of any violation of our Code of Conduct, you have a
responsibility to report it. Deviations from controls or procedures that
safeguard the company, including the assets of shareholders and clients,
should also be reported.
You can report confidentially to:
- Your manager or department head
- CGC Audit Committee:
Wally Stern -- Chairman
Donnalisa Barnum
David Beevers
Jim Brown
Larry P. Clemmensen
Roberta Conroy
Bill Hurt -- (emeritus)
Sonny Kamm
Mike Kerr
Victor Kohn
John McLaughlin
Don O'Neal
Tom Rowland
John Smet
Antonio Vegezzi
Shaw Wagener
Kelly Webb
- Mike Downer or any other lawyer in the CGC Legal Group
- Don Wolfe of Deloitte & Touche LLP (CGC's auditors).
CGC GIFTS POLICY -- CONFLICTS OF INTEREST
A conflict of interest occurs when the private interests of associates
interfere or could potentially interfere with their responsibilities at
work. Associates must not place themselves or the company in a position of
actual or potential conflict. Associates may not accept gifts worth more
than $100, excessive business entertainment, loans, or anything else
involving personal gain from those who conduct business with the company. In
addition, a business
<PAGE>
entertainment event exceeding $200 in value should not be accepted unless
the associate receives permission from the Gifts Policy Committee.
REPORTING -- Although the limitations on accepting gifts applies to ALL
associates as described above, some associates will be asked to fill out
quarterly reports. If you receive a reporting form, you must report any gift
exceeding $50 (although it is recommended that you report ALL gifts received)
and business entertainment in which an event exceeds $75.
GIFTS POLICY COMMITTEE
The Gifts Policy Committee oversees administration of and compliance with the
Policy.
INSIDER TRADING
Antifraud provisions of the federal securities laws generally prohibit persons
while in possession of material nonpublic information from trading on or
communicating the information to others. Sanctions for violations can include
civil injunctions, permanent bars from the securities industry, civil
penalties up to three times the profits made or losses avoided, criminal fines
and jail sentences.
While investment research analysts are most likely to come in contact with
material nonpublic information, the rules (and sanctions) in this area apply
to all CGC associates and extend to activities both within and outside each
associate's duties.
PERSONAL INVESTING POLICY
As an associate of the Capital Group companies, you may have access to
confidential information. This places you in a position of special trust.
You are associated with a group of companies that is responsible for the
management of many billions of dollars belonging to mutual fund shareholders
and other clients. The law, ethics and our own policy place a heavy burden on
all of us to ensure that the highest standards of honesty and integrity are
maintained at all times.
There are several rules that must be followed to avoid possible conflicts of
interest in personal securities transactions.
ALL ASSOCIATES
Information regarding proposed or partially completed plans by CGC companies
to buy or sell specific securities must not be divulged to outsiders.
Favors or preferential treatment from stockbrokers may not be accepted.
Associates may not subscribe to ANY initial public offering (IPO). Generally,
this prohibition
<PAGE>
applies to spouses of associates and any family member residing in the same
household. However, an associate may request that the Personal Investing
Committee consider granting an exception under special circumstances.
COVERED PERSONS
Associates who have access to investment information in connection with their
regular duties are generally considered "covered persons." If you receive a
quarterly personal securities transactions report form, you are a covered
person. You should take the time to review this policy, as ongoing
interpretations of the policy will be explained therein.
Covered persons must conduct their personal securities transactions in such a
way that they do not conflict with the interests of the funds and client
accounts. This policy also includes securities transactions of family members
living in the covered person's household and any trust or custodianship for
which the associate is trustee or custodian. A conflict may occur if you, a
family member in the same household, a trust or custodianship for which you
are trustee or custodian have a transaction in a security when the funds or
client accounts are considering or concluding a transaction in the same
security.
Additional rules apply to "investment personnel" including portfolio
counselors/managers, research analysts, traders, portfolio control
associates, and investment administration personnel (see below).
PRE-CLEARANCE OF SECURITIES TRANSACTIONS
Before buying or selling securities, covered persons must check with the CGC
Legal Group based in LAO. (You will generally receive a response within one
business day.) Unless a shorter period is specified, clearance is good for two
trading days (including the day you check). If you have not executed your
transaction within this period, you must again pre-clear your transaction.
Covered persons must PROMPTLY submit quarterly reports of certain
transactions. Transactions of securities (including fixed-income securities)
or options (see below) must be pre-cleared as described above and reported
except for: open-end investment companies (mutual funds); money market
instruments with maturities of one year or less; direct obligations of the
U.S. Government, bankers' acceptances, CDs or other commercial paper;
commodities; and options or futures on broad-based indices. Covered persons
must also report transactions made by family members in their household and by
those for which they are a trustee or custodian.. NOTE THAT INVESTMENTS IN
PRIVATE PLACEMENTS AND VENTURE CAPITAL PARTNERSHIPS ARE ALSO SUBJECT TO
PRECLEARANCE AND REPORTING. Reporting forms will be supplied at the
appropriate times AND MUST BE SUBMITTED BY THE DATE INDICATED ON THE FORM
In addition, the following transactions must be reported but need not have
been pre-cleared: gifts or bequests (either receiving or giving) of securities
MUST be reported (sales of securities received as a gift MUST be both
precleared and reported); transactions in debt instruments rated "A" or above
by at least one national rating service; sales pursuant to tender offers; and
dividend reinvestment plan purchases (provided the purchase pursuant to such
plan is made with dividend proceeds only).
<PAGE>
PERSONAL INVESTING SHOULD BE VIEWED AS A PRIVILEGE, NOT A RIGHT. AS SUCH,
LIMITATIONS MAY BE PLACED ON THE NUMBER OF PRE-CLEARANCES AND/OR
TRANSACTIONS AS DEEMED APPROPRIATE BY THE PERSONAL INVESTING COMMITTEE.
BROKERAGE ACCOUNTS
Covered persons should inform their stockbrokers that they are employed by an
investment adviser, trust company or affiliate of either. U.S. brokers are
subject to certain rules designed to prevent favoritism toward such accounts.
Associates may not accept negotiated commission rates which they believe may
be more favorable than the broker grants to accounts with similar
characteristics. In addition, covered persons must direct their brokers to
send duplicate confirmations and copies of all periodic statements on a timely
basis to The Legal Group of The Capital Group Companies, Inc. ALL DOCUMENTS
RECEIVED ARE KEPT STRICTLY CONFIDENTIAL.
[If extraneous information is included on an associate's statements (E.G.,
checking account information or other information that is not subject to the
policy), the associate might want to establish a separate account solely for
transactions subject to the policy.]
ANNUAL DISCLOSURE OF PERSONAL SECURITIES HOLDINGS
Covered persons will be required to disclose all personal securities
holdings upon commencement of employment (or upon becoming a covered person)
and thereafter on an annual basis. Reporting forms will be supplied for this
purpose.
ANNUAL RECERTIFICATION
All access persons will be required to certify annually that they have read
and understood the Personal Investing Policy and recognize that they are
subject thereto.
ADDITIONAL RULES FOR INVESTMENT PERSONNEL
DISCLOSURE OF OWNERSHIP OF RECOMMENDED SECURITIES -- Ownership of securities
that are held professionally as well as personally will be reviewed on a
periodic basis by the Legal Group and may also be reviewed by the applicable
Management Committee and/or Investment Committee or Subcommittee. In addition,
to the extent that disclosure has not already been made by the Legal Group to
the applicable Management Committee and/or Investment Committee or
Subcommittee, any associate who is in a position to recommend the purchase or
sale of securities by the fund or client accounts that s/he personally owns
should FIRST disclose such ownership either in writing (in a company write-up)
or orally (when discussing the company at investment meetings) prior to making
a recommendation.(1)
BLACKOUT PERIOD - Investment personnel may not buy or sell a security within
at least seven calendar days before and after A FUND OR CLIENT ACCOUNT THAT
HIS OR HER COMPANY MANAGES transacts in that security. Profits resulting from
transactions occurring within this time period are
--------
(1) Note that this disclosure requirement is consistent with both AIMR
standards as well as the ICI Advisory Group Guidelines.
<PAGE>
subject to special review and may be subject to disgorgement.
BAN ON SHORT-TERM TRADING PROFITS -- Investment personnel are prohibited
from profiting from the purchase and sale or sale and purchase of the same
(or equivalent) securities within 60 days. THIS RESTRICTION APPLIES TO THE
PURCHASE OF AN OPTION AND THE EXERCISE OF THE OPTION WITHIN 60 DAYS.
SERVICE AS A DIRECTOR -- Investment personnel must obtain prior authorization
of the investment committee of the appropriate management company or CGC
Management Committee BEFORE SERVING ON THE BOARD OF DIRECTORS OF PUBLICLY
TRADED COMPANIES. This can be arranged by calling the LAO Legal Group.
PERSONAL INVESTING COMMITTEE
Any questions or hardships that result from these policies or requests for
exceptions should be referred to CGC's Personal Investing Committee by
calling the LAO Legal Group.
<PAGE>
CREDIT SUISSE ASSET MANAGEMENT, LLC
WARBURG PINCUS FUNDS/CSAM CLOSED-END FUNDS
CODE OF ETHICS
I. APPLICABILITY
This Code of Ethics establishes rules of conduct for "Access Persons" (as
defined below) of Credit Suisse Asset Management, LLC, its subsidiaries and
Credit Suisse Asset Management Securities, Inc. (collectively referred to as
"CSAM") and each U.S. registered investment company that adopts this Code
("Covered Fund") (CSAM and the Covered Funds are collectively referred to as the
"Covered Companies"). For purposes of this Code, "Access Person" shall mean:
- any "Advisory Person" -- any employee or officer of CSAM and any natural
person in a control relationship to a Covered Company (except for a natural
person who, but for his or her holdings in a Covered Fund, would not be
considered an Advisory Person, unless he or she obtains information
concerning recommendations made to the Covered Fund with regard to the
purchase or sale of securities by the Covered Fund, in which case such
person shall be considered an Advisory Person only with respect to the
Covered Fund); or
- any director, trustee or officer of a Covered Fund, whether or not such
person is an Advisory Person, in which case such person shall be considered
an Access Person only with respect to the Covered Fund.
For purposes of this Code:
- the term "security" shall include any option to purchase or sell, any
security that is convertible or exchangeable for, and any other derivative
interest relating to the security;
- the terms "purchase" and "sale" of a security shall include, among other
things, the writing of an option to purchase or sell a security; and
- all other terms shall have the same meanings as under the Investment
Company Act of 1940 ("1940 Act"), unless indicated otherwise.
II. STATEMENT OF GENERAL PRINCIPLES
In conducting personal investment activities, all Access Persons are required to
act consistent with the following general fiduciary principles:
- the interests of CSAM clients, including Covered Funds, must always be
placed first, provided, however, that persons who are Access Persons only
with respect to certain Covered Funds shall place the interests of such
Covered Funds first;
- all personal securities transactions must be conducted in such a manner as
to avoid any actual or potential conflict of interest or any abuse of an
individual's position of trust and responsibility; and
<PAGE>
- Access Persons must not take inappropriate advantage of their positions.
CSAM has a separate policy and procedures designed to detect and prevent insider
trading, which should be read together with this Code. Nothing contained in this
Code should be interpreted as relieving any Access Person from the obligation to
act in accordance with any applicable law, rule or regulation or any other
statement of policy or procedure adopted by any Covered Company.
III. PROHIBITIONS
The following prohibitions and related requirements apply to Advisory Persons
and/or Access Persons (as stated) and accounts in which they have "Beneficial
Ownership" (as defined in Exhibit 1).
A. SHORT TERM TRADING. CSAM discourages Advisory Persons from short-term trading
(i.e., purchases and sales within a 60 day period), as such activity could be
viewed as being in conflict with CSAM's general fiduciary principles. In no
event, however, may an Advisory Person make a purchase and sale (or sale and
purchase) of a security, including shares of Covered Funds and other U.S.
registered investment companies (other than money market funds), within five
"Business Days" (meaning days on which the New York Stock Exchange is open for
trading). CSAM reserves the right to extend this prohibition period for the
short-term trading activities of any or all Advisory Persons if CSAM determines
that such activities are being conducted in a manner that may be perceived to be
in conflict with CSAM's general fiduciary principles.
B. SIDE-BY-SIDE TRADING. No Access Person may purchase or sell (directly or
indirectly) any security for which there is a "buy" or "sell" order pending for
a CSAM client (except that this restriction does not apply to any Access Person
who is neither an Advisory Person nor an officer of a Covered Fund, unless he or
she knows, or in the ordinary course of fulfilling official duties with a
Covered Fund should know, that there is a "buy" or "sell" order pending with
respect to such security for a CSAM client), or that such Access Person knows
(or should know) at the time of such purchase or sale:
- is being considered for purchase or sale by or for any CSAM client; or
- is being purchased or sold by or for any CSAM client.
C. BLACKOUT PERIODS. No Advisory Person may execute a securities transaction
within five Business Days before and one Business Day after a transaction in
that security for a CSAM client.
D. PUBLIC OFFERINGS. No Advisory Person may directly or indirectly acquire
Beneficial Ownership in any security in a public offering in the primary
securities market.
E. PRIVATE PLACEMENTS. No Advisory Person may directly or indirectly acquire or
dispose of any Beneficial Ownership in any privately placed security without the
express prior written approval of a supervisory person designated in Section IX
of this Code ("Designated Supervisory Person"). Approval will take into account,
among other factors, whether the investment opportunity should be reserved for a
CSAM client, whether the opportunity is being offered to the Advisory Person
2
<PAGE>
because of his or her position with CSAM or as a reward for past transactions
and whether the investment creates or may in the future create a conflict of
interest.
F. SHORT SELLING. Advisory Persons are only permitted to engage in short selling
for hedging purposes. No Advisory Person may engage in any transaction that has
the effect of creating any net "short exposure" in an individual security.
G. FUTURES CONTRACTS. No Advisory Person may invest in futures contracts, except
through the purchase of options on futures contracts.
H. OPTIONS. No Advisory Person may write (i.e., sell) any options except for
hedging purposes and only if the option is fully covered.
I. TRADING, HEDGING AND SPECULATION IN CREDIT SUISSE GROUP SECURITIES.
Transactions by employees, officers and directors of CSAM in securities of
Credit Suisse Group ("CSG") are prohibited for each period beginning 15 calendar
days before announcement of CSG yearly or half-yearly results and ending two
Business Days after the announcement. Employees, officers and directors of CSAM
may only hedge VESTED positions in CSG stock through short sales or derivative
instruments. Uncovered short exposure, through short sales or otherwise, is not
permitted without the express prior written approval of a Designated Supervisory
Person.
J. INVESTMENT CLUBS. No Advisory Person may participate in an "investment club"
or similar activity.
K. DISCLOSURE OF INTEREST. No Advisory Person may recommend to or effect for any
CSAM client any securities transaction without having disclosed his or her
personal interest (actual or potential), if any, in the issuer of the
securities, including without limitation:
- any ownership or contemplated ownership of any privately placed securities
of the issuer or any of its affiliates;
- any employment, management or official position with the issuer or any of
its affiliates;
- any present or proposed business relationship between the Advisory Person
and the issuer or any of its affiliates; and
- any additional factors that may be relevant to a conflict of interest
analysis.
Where the Advisory Person has a personal interest in an issuer, a decision to
purchase or sell securities of the issuer or any of its affiliates by or for a
CSAM client shall be subject to an independent review by a Designated
Supervisory Person.
L. GIFTS. No Advisory Person may seek or accept any gift of more than a DE
MINIMIS value (approximately $250 per year) from any person or entity that does
business with or on behalf of a CSAM client, other than reasonable,
business-related meals and tickets to sporting events, theater and similar
activities. If any Advisory Person is unsure of the appropriateness of any gift,
a Designated Supervisory Person should be consulted.
3
<PAGE>
M. DIRECTORSHIPS AND OTHER OUTSIDE BUSINESS ACTIVITIES. No Advisory Person may
serve on the board of directors/trustees of any issuer without the express prior
written approval of a Designated Supervisory Person. Approval will be based upon
a determination that the board service would be consistent with the interests of
CSAM clients. Where board service is authorized, Advisory Persons serving as
directors will be isolated from those making investment decisions regarding the
securities of that issuer through "informational barrier" or other procedures
specified by a Designated Supervisory Person.
No Advisory Person may be employed (either for compensation or in a voluntary
capacity) outside his or her regular position with CSAM or its affiliated
companies without the written approval of a Designated Supervisory Person.
IV. EXEMPT TRANSACTIONS
A. EXEMPTIONS FROM PROHIBITIONS.
1. Purchases and sales of securities issued or guaranteed by the
U.S. government or any agencies or instrumentalities of the U.S.
government, municipal securities, and other non-convertible fixed
income securities, which are in each case rated investment grade, are
exempt from the prohibitions described in paragraphs C and D of
Section III if such transactions are made in compliance with the
preclearance requirements of Section V(B) below.
2. Any securities transaction, or series of related transactions,
involving 500 shares or less of an issuer having a market
capitalization (outstanding shares multiplied by the current market
price per share) greater than $2.5 billion is exempt from the
prohibition described in paragraph C of Section III if such
transaction is made in compliance with the preclearance requirements
of Section V(B) below.
B. EXEMPTIONS FROM PROHIBITIONS AND PRECLEARANCE. The prohibitions described in
paragraphs B through E of Section III and the preclearance requirements of
Section V(B) shall not apply to:
- purchases and sales of securities that are direct obligations of the U.S.
government;
- purchases and sales of securities of U.S. registered open-end investment
companies;
- purchases and sales of bankers' acceptances, bank certificates of deposit,
and commercial paper;
- purchases that are part of an automatic dividend reinvestment plan;
- purchases and sales that are non-volitional on the part of either the
Access Person or the CSAM client;
- purchases and sales in any account maintained with a party that has no
affiliation with the Covered Companies and over which no Advisory Person
has, in the judgment of a Designated Supervisory Person after reviewing the
terms and circumstances, direct or indirect influence or control over the
investment or trading of the account; and
4
<PAGE>
- purchases by the exercise of rights offered by an issuer pro rata to all
holders of a class of its securities, to the extent that such rights were
acquired from the issuer.
C. FURTHER EXEMPTIONS. Express prior written approval may be granted by a
Designated Supervisory Person if a purchase or sale of securities or other
outside activity is consistent with the purposes of this Code and Section 17(j)
of the 1940 Act and rules thereunder (attached as Attachment A is a form to
request such approval). For example, a purchase or sale may be considered
consistent with those purposes if the purchase or sale is not harmful to a CSAM
client because such purchase or sale would be unlikely to affect a highly
institutional market, or because such purchase or sale is clearly not related
economically to the securities held, purchased or sold by the CSAM client.
V. TRADING, PRECLEARANCE, REPORTING AND OTHER COMPLIANCE PROCEDURES
A. TRADING THROUGH CSAM. No Advisory Person shall purchase or sell securities
for an account in which he or she has Beneficial Ownership other than through
the CSAM trading desk persons designated by a Designated Supervisory Person,
unless express prior written approval is granted by a Designated Supervisory
Person.
B. PRECLEARANCE. Except as provided in Section IV, before any Advisory Person
purchases or sells any security for any account in which he or she has
Beneficial Ownership, preclearance shall be obtained in writing from a
Designated Supervisory Person (attached as Attachment B is a form to request
such approval). If clearance is given for a purchase or sale and the transaction
is not effected on that Business Day, a new preclearance request must be made.
C. REPORTING.
1. INITIAL CERTIFICATION. Within 10 days after the commencement of his or her
employment with CSAM or his or her affiliation with any Covered Fund, each
Access Person shall submit to a Designated Supervisory Person an initial
certification in the form of Attachment C to certify that:
- he or she has read and understood this Code of Ethics and recognizes that
he or she is subject to its requirements; and
- he or she has disclosed or reported all personal securities holdings in
which he or she has any direct or indirect Beneficial Ownership and all
accounts in which any securities are held for his or her direct or indirect
benefit.
2. ANNUAL CERTIFICATION. In addition, each Access Person shall submit to a
Designated Supervisory Person an annual certification in the form of Attachment
D to certify that:
- he or she has read and understood this Code of Ethics and recognizes that
he or she is subject to its requirements;
- he or she has complied with all requirements of this Code of Ethics; and
5
<PAGE>
- he or she has disclosed or reported (a) all personal securities
transactions for the previous year and (b) all personal securities holdings
in which he or she has any direct or indirect Beneficial Ownership and
accounts in which any securities are held for his or her direct or indirect
benefit as of a date no more than 30 days before the annual certification
is submitted.
Access Persons may comply with the initial and annual reporting requirements by
submitting account statements and/or Attachment E to a Designated Supervisory
Person within the prescribed periods. An Access Person who is not an Advisory
Person is not required to submit initial or annual certifications, unless such
Access Person is an officer of a Covered Fund.
Each Advisory Person shall annually disclose all directorships and outside
business activities (attached as Attachment F is a form for such disclosure).
3. QUARTERLY REPORTING. All Advisory Persons and each Access Person who is an
officer of a Covered Fund shall also supply a Designated Supervisory Person, on
a timely basis, with duplicate copies of confirmations of all personal
securities transactions and copies of periodic statements for all securities
accounts, including confirmations and statements for transactions and accounts
described in Section IV(B) above (exempt from prohibitions and preclearance).
This information must be supplied at least once per calendar quarter, within 10
days after the end of the calendar quarter.
Each Access Person who is neither an Advisory Person nor an officer of a Covered
Fund is required to report a transaction only if he or she, at the time of that
transaction, knew (or in the ordinary course of fulfilling official duties with
a Covered Fund should have known) that during the 15-day period immediately
before or after the date of the transaction the security such person purchased
or sold was purchased or sold by the Covered Fund or was being considered for
purchase or sale by the Covered Fund.
VI. COMPLIANCE MONITORING AND SUPERVISORY REVIEW
A Designated Supervisory Person will periodically review reports from the CSAM
trading desk (or, if applicable, confirmations from brokers) to assure that all
transactions effected by Access Persons for accounts in which they have
Beneficial Ownership are in compliance with this Code and Rule 17j-1 under the
1940 Act.
Material violations of this Code and any sanctions imposed shall be reported not
less frequently than quarterly to the board of directors of each relevant
Covered Fund and to the senior management of CSAM. At least annually, each
Covered Company shall prepare a written report to the board of
directors/trustees of each Covered Fund, and to the senior management of CSAM,
that:
- describes issues that have arisen under the Code since the last report,
including, but not limited to, material violations of the Code or
procedures that implement the Code and any sanctions imposed in response to
those violations; and
- certifies that each Covered Company has adopted procedures reasonably
necessary to prevent Access Persons from violating the Code.
6
<PAGE>
Material changes to this Code of Ethics must be approved by the Board of
Directors of each Covered Fund no later than six months after the change is
adopted. That approval must be based on a determination that the changes are
reasonably necessary to prevent Access Persons from engaging in any conduct
prohibited by the Code and Rule 17j-1 under the 1940 Act. Board approval must
include a separate vote of a majority of the independent directors.
VII. SANCTIONS
Upon discovering that an Access Person has not complied with the requirements of
this Code, the senior management of the relevant Covered Company may impose on
that person whatever sanctions are deemed appropriate, including censure; fine;
reversal of transactions and disgorgement of profits; suspension; or termination
of employment.
VIII. CONFIDENTIALITY
All information obtained from any Access Person under this Code shall be kept in
strict confidence, except that reports of transactions will be made available to
the Securities and Exchange Commission or any other regulatory or
self-regulatory organization to the extent required by law or regulation.
IX. FURTHER INFORMATION
The Designated Supervisory Persons are Hal Liebes and James W. Bernaiche or
their designees in CSAM's legal and compliance department. Any questions
regarding the Code of Ethics should be directed to a Designated Supervisory
Person.
Dated: March 1, 2000
7
<PAGE>
EXHIBIT 1
CREDIT SUISSE ASSET MANAGEMENT, LLC
WARBURG PINCUS FUNDS
CODE OF ETHICS
DEFINITION OF BENEFICIAL OWNERSHIP
The term "Beneficial Ownership" as used in the attached Code of Ethics is to be
interpreted by reference to Rule 16a-1(a)(2) under the Securities Exchange Act
of 1934 ("Rule"). Under the Rule, a person is generally deemed to have
Beneficial Ownership of securities if the person (directly or indirectly),
through any contract, arrangement, understanding, relationship or otherwise, has
or shares a direct or indirect pecuniary interest in the securities.
The term "pecuniary interest" is generally defined in the Rule to mean the
opportunity (directly or indirectly) to profit or share in any profit derived
from a transaction in the securities. A person is deemed to have an "indirect
pecuniary interest" within the meaning of the Rule:
- - in any securities held by members of the person's immediate family sharing
the same household; the term "immediate family" includes any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law
or sister-in-law, as well as adoptive relationships;
- - a general partner's proportionate interest in the portfolio securities held
by a general or limited partnership;
- - a person's right to dividends that is separated or separable from the
underlying securities;
- - a person's interest in certain trusts; and
- - a person's right to acquire equity securities through the exercise or
conversion of any derivative security, whether or not presently
exercisable.(1)
For purposes of the Rule, a person who is a shareholder of a corporation or
similar entity is NOT deemed to have a pecuniary interest in portfolio
securities held by the corporation or entity, so long as the shareholder is not
a controlling shareholder of the corporation or the entity and does not have or
share investment control over the corporation's or the entity's portfolio. The
term "control" means the power to exercise a controlling influence over
management or policies, unless the power is solely the result of an official
position with the company.
- -------------------------
(1) The term "derivative security" is defined as any option, warrant,
convertible security, stock appreciation right or similar right with an exercise
or conversion privilege at a price related to an equity security (or similar
securities) with a value derived from the value of an equity security.
<PAGE>
ATTACHMENT A
CREDIT SUISSE ASSET MANAGEMENT, LLC
WARBURG PINCUS FUNDS/CSAM CLOSED-END FUNDS
CODE OF ETHICS -- SPECIAL APPROVAL FORM
1. The following is a private placement of securities or other investment
requiring special approval in which I want to acquire or dispose of
Beneficial Ownership:
<TABLE>
<CAPTION>
NAME OF PRIVATE
SECURITY OR OTHER DATE TO BE AMOUNT TO BE RECORD PURCHASE HOW ACQUIRED
INVESTMENT ACQUIRED HELD OWNER PRICE (BROKER/ISSUER)
- ------------------------- ----------------- ----------------- ------------------- ----------------- ----------------------
<S> <C> <C> <C> <C> <C>
- ------------------------- ----------------- ----------------- ------------------- ----------------- ----------------------
- ------------------------- ----------------- ----------------- ------------------- ----------------- ----------------------
- ------------------------- ----------------- ----------------- ------------------- ----------------- ----------------------
- ------------------------- ----------------- ----------------- ------------------- ----------------- ----------------------
</TABLE>
Would this investment opportunity be appropriate for a CSAM client?
___ Yes ___ No
2. I want to engage in the following outside business activity:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
3. I want special approval to place personal securities trades other than
through the CSAM trading desk (please describe):
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
I certify, as applicable, that I (a) am not aware of any non-public information
about the issuer, (b) have made all disclosures required by the Code of Ethics
and (c) will comply with all reporting requirements of the Code.
- -------------------------------- -------------------------------
Signature Date
- --------------------------------
Print Name
___ Approved
___ Not Approved
- ------------------------------- ------------------------------
Designated Supervisory Person Date
<PAGE>
ATTACHMENT B
CREDIT SUISSE ASSET MANAGEMENT, LLC
WARBURG PINCUS FUNDS/CSAM CLOSED-END FUNDS
CODE OF ETHICS -- PERSONAL TRADING PRECLEARANCE FORM
This form should be filled out completely to expedite approval.
1. Security: __________________________________________
Ticker: __________________________________________
____ Purchase ____ Sale
2. Number of shares/bonds/units/contracts: _______________________________
3. Account Name/Shortname: ________________________________________________
4. Brokerage Firm AND Account Number: ________________________________________
5. Why do you want to purchase or sell? Is this an opportunity appropriate for
CSAM clients?
---------------------------------------------------------------------------
6. Are you aware of a CSAM Advisory Person who is buying or selling or who
plans to buy or sell this security for his or her personal accounts or CSAM
clients?
___ Yes ___ No
If yes, who?
---------------------------------------------------------------------------
7. If the amount is less than 500 shares, is the issuer market capitalization
greater than $2.5 billion?
____ Yes _____ No
I certify that I (a) am not aware of any non-public information about the
issuer, (b) have made all disclosures required by the Code of Ethics and this
trade otherwise complies with the Code, including the prohibition on investments
in initial public offerings, and (c) will comply with all reporting requirements
of the Code.
- ---------------------------------- ------------------------------------
Signature of Advisory Person Date
- ----------------------------------
Print Name
___ Approved
___ Not Approved
- ---------------------------------- ------------------------------------
Designated Supervisory Person Date - VALID THIS BUSINESS DAY ONLY.
<PAGE>
ATTACHMENT C
CREDIT SUISSE ASSET MANAGEMENT, LLC
WARBURG PINCUS FUNDS/CSAM CLOSED-END FUNDS
CODE OF ETHICS
INITIAL CERTIFICATION
I certify that I:
- - have read and understood the Code of Ethics for Credit Suisse Asset
Management, LLC, the Warburg Pincus Funds and the CSAM Closed-End Funds and
recognize that I am subject to its requirements; and
- - have disclosed or reported all personal securities holdings in which I had
any direct or indirect Beneficial Ownership and accounts in which any
securities were held for my direct or indirect benefit as of the date I
commenced employment with CSAM or the date I became affiliated with a
Covered Fund.
- -------------------------------- -------------------------------
Signature of Access Person Date
- --------------------------------
Print Name
<PAGE>
ATTACHMENT D
CREDIT SUISSE ASSET MANAGEMENT, LLC
WARBURG PINCUS FUNDS/CSAM CLOSED-END FUNDS
CODE OF ETHICS
ANNUAL CERTIFICATION
I certify that I:
- - have read and understood the Code of Ethics for Credit Suisse Asset
Management, LLC, the Warburg Pincus Funds and the CSAM Closed-End Funds and
recognize that I am subject to its requirements;
- - have complied with all requirements of the Code of Ethics and Policy and
Procedures Designed to Detect and Prevent Insider Trading in effect during
the year ended December 31, 1999; and
- - have disclosed or reported all personal securities transactions for the
year ended December 31, 1999 and all personal securities holdings in which
I had any direct or indirect Beneficial Ownership and all accounts in which
any securities were held for my direct or indirect benefit as of
December 31, 1999.
- -------------------------------- -------------------------------
Signature of Access Person Date
- --------------------------------
Print Name
<PAGE>
ATTACHMENT E
CREDIT SUISSE ASSET MANAGEMENT, LLC
WARBURG PINCUS FUNDS/CSAM CLOSED-END FUNDS
CODE OF ETHICS - PERSONAL SECURITIES ACCOUNT DECLARATION
ALL ACCESS PERSONS MUST COMPLETE EACH APPLICABLE ITEM (1, 2, 3 OR 4) AND SIGN
BELOW.
1. The following is a list of securities/commodities accounts in which I have
Beneficial Ownership:
<TABLE>
<CAPTION>
BROKER/DEALER ACCOUNT TITLE AND NUMBER
--------------------------------------------------------- ------------------------------------------------------
<S> <C>
--------------------------------------------------------- ------------------------------------------------------
--------------------------------------------------------- ------------------------------------------------------
--------------------------------------------------------- ------------------------------------------------------
--------------------------------------------------------- ------------------------------------------------------
</TABLE>
2. The following is a list of securities/commodities accounts in which I had
Beneficial Ownership that have been opened or closed in the past year:
<TABLE>
<CAPTION>
BROKER/DEALER ACCOUNT TITLE AND NUMBER
--------------------------------------------------------- ------------------------------------------------------
<S> <C>
--------------------------------------------------------- ------------------------------------------------------
--------------------------------------------------------- ------------------------------------------------------
--------------------------------------------------------- ------------------------------------------------------
</TABLE>
3. The following is a list of any other securities or other investment
holdings in which I have Beneficial Ownership (FOR SECURITIES HELD IN
ACCOUNTS OTHER THAN THOSE DISCLOSED IN RESPONSE TO ITEMS 1 AND 2):
<TABLE>
<CAPTION>
NAME OF PRIVATE
SECURITY OR OTHER RECORD PURCHASE HOW ACQUIRED
INVESTMENT DATE ACQUIRED AMOUNT HELD OWNER PRICE (BROKER/ISSUER)
- ------------------------- ----------------- ----------------- ------------------- ----------------- ----------------------
<S> <C> <C> <C> <C> <C>
- ------------------------- ----------------- ----------------- ------------------- ----------------- ----------------------
- ------------------------- ----------------- ----------------- ------------------- ----------------- ----------------------
- ------------------------- ----------------- ----------------- ------------------- ----------------- ----------------------
- ------------------------- ----------------- ----------------- ------------------- ----------------- ----------------------
</TABLE>
4. I do not have Beneficial Ownership in any securities/commodities accounts
or otherwise have Beneficial Ownership of any securities or other
instruments subject to the Code of Ethics. (Please initial.)
-------------
Initials
I declare that the information given above is true and accurate:
- -------------------------------- -------------------------------
Signature of Access Person Date
- -------------------------------
Print Name
<PAGE>
ATTACHMENT F
CREDIT SUISSE ASSET MANAGEMENT, LLC
WARBURG PINCUS FUNDS/CSAM CLOSED-END FUNDS
CODE OF ETHICS
OUTSIDE BUSINESS ACTIVITIES
Outside business activities include, but are not limited to, the following:
- - self-employment;
- - receiving compensation from another person or company;
- - serving as an officer, director, partner, or consultant of another business
organization (including a family owned company); and
- - becoming a general or limited partner in a partnership or owning any stock
in a business, unless the stock is publicly traded and no control
relationship exists.
Outside business activities include serving with a governmental (federal, state
or local) or charitable organization whether or not for compensation.
ALL ADVISORY PERSONS MUST COMPLETE AT LEAST ONE CHOICE (1 OR 2) AND SIGN BELOW.
1. The following are my outside business activities:
<TABLE>
<CAPTION>
APPROVED BY DESIGNATED SUPERVISORY PERSON
OUTSIDE BUSINESS ACTIVITY DESCRIPTION OF ACTIVITY (YES/NO)
------------------------------------ ----------------------------- ---------------------------------------------
<S> <C> <C>
------------------------------------ ----------------------------- ---------------------------------------------
------------------------------------ ----------------------------- ---------------------------------------------
------------------------------------ ----------------------------- ---------------------------------------------
------------------------------------ ----------------------------- ---------------------------------------------
------------------------------------ ----------------------------- ---------------------------------------------
</TABLE>
2. I am not involved in any outside business activities. (Please initial)
------------
Initials
I declare that the information given above is true and accurate:
- -------------------------------- -------------------------------
Signature of Advisory Person Date
- --------------------------------
Print Name
<PAGE>
LSV ASSET MANAGEMENT
CODE OF ETHICS AND
INSIDER TRADING POLICY
MARCH 2000
<PAGE>
LSV ASSET MANAGEMENT CODE OF ETHICS AND INSIDER TRADING POLICY
I. GENERAL POLICY
LSV Asset Management ("LSV" or "Adviser") serves as investment adviser to
investment companies and asset management accounts (jointly "Investment
Vehicles").
LSV expects that all employees shall conduct any personal securities
transactions consistent with this Code of Ethics and Insider Trading Policy
(jointly "Policy") and in such a manner as to avoid any actual or potential
conflict of interest or any abuse of an employee's position of trust and
responsibility. Employees shall not take inappropriate advantage of their
positions and shall place the interests of shareholders first.
Employees may be subject to different preclearance and reporting standards,
based on their responsibilities within LSV. As a result, it is important that
all employees pay special attention to the definition sections within this
Policy as well as sections on restrictions, preclearance, and reporting.
EACH EMPLOYEE SUBJECT TO THIS POLICY MUST READ AND RETAIN A COPY AND AGREE TO
ABIDE BY ITS TERMS.
Any questions regarding LSV's policy or procedures should be referred to
Tremaine Atkinson, Compliance Officer, (referred to throughout this document as
"Compliance").
II. DEFINITIONS
A. ACCESS PERSON - shall mean (i) each principal of the Adviser, (ii) each
employee of the Adviser (or of any company in a control relationship to the
Adviser) who, in connection with his or her regular functions or duties, makes,
participates in, or obtains information regarding the purchase or sale of a
Security by an Advisory Client, or whose functions relate to the making of any
recommendations with respect to such purchases or sales, and (iii) any natural
person in a control relationship to the Adviser who obtains information
concerning recommendations made by the Adviser with respect to the purchase or
sale of a Security by an Advisory Client.
B. INVESTMENT PERSON - means all Access Persons who, with respect to an Advisory
Client, occupy the position of account or portfolio manager (or who serve on an
investment committee that carries out the investment management function), all
Access Persons who provide or supply information and/or advice to any such
manager (or committee), or who execute or help execute any such manager's (or
committee's) decisions, and all Access Persons who, in connection with their
regular functions, obtain contemporaneous information regarding the purchase or
sale of a Security by or for an Advisory Client.
C. ASSOCIATE - any director, officer or employee who does not fall within
definitions A or B above.
D. EMPLOYEE - Access Persons, Investment Persons, and Associates as a group.
<PAGE>
LSV ASSET MANAGEMENT CODE OF ETHICS AND INSIDER TRADING POLICY
E. ACCOUNT - a securities trading account held by an Employee and by any such
person's spouse, minor children and adults residing in his or her household
(each such person, an "immediate family member"); any trust for which the person
is a trustee or from which the Employee benefits directly or indirectly; any
partnership (general, limited or otherwise) of which the Employee is a general
partner or a principal of the general partner; and any other account over which
the Employee exercises investment discretion.
F. SECURITY - includes any initial public offerings (IPOs), private placement
transactions and any equities eligible for investment by an Investment Vehicle
whose strategy is to invest in domestic equities, or any derivative thereupon,
such as options. It does not include securities issued by the Government of the
United States or any government agency, fixed income securities, open-end and
closed-end mutual funds, ADRs, REITs, and securities of foreign issuers.
G. A SECURITY IS "BEING PURCHASED OR SOLD" by any Investment Vehicle from the
time when a purchase or sale program has been communicated to the person who
places the buy and sell orders for the Investment Vehicle until the time when
such program has been fully completed or terminated.
III. RESTRICTIONS ON PERSONAL SECURITIES TRANSACTIONS
When buying or selling Securities, Employees may not employ any device, scheme
or artifice to defraud, mislead, or manipulate any Investment Vehicle.
A. ACCESS PERSONS:
Access Persons may not purchase or sell, directly or indirectly, any Security
within 1 business day before or after the time that the same (or a related)
Security is being purchased or sold by any Investment Vehicle for which LSV acts
as Adviser.
B. INVESTMENT PERSONS:
Investment Persons may not purchase or sell, directly or indirectly, any
Security within 3 business days before or after the time that the same (or a
related) Security is being purchased or sold by any Investment Vehicle for which
LSV acts as Adviser.
Investment Persons shall not profit from the purchase and sale or sale and
purchase of a Security within 60 days of acquiring or disposing of Beneficial
Ownership of that Security. Any profits so realized will be donated to charity.
Investment Persons may not acquire securities as part of an initial public
offering by the issuer, nor may any Investment Persons purchase, sell, or
recommend the purchase or sale of any security if the Investment Person has
previously acquired an interest in the securities issued by the issuer of the
subject security in a private placement transaction unless full disclosure has
been made of said person's interest to the designated review officer.
<PAGE>
LSV ASSET MANAGEMENT CODE OF ETHICS AND INSIDER TRADING POLICY
Investment Persons may not receive any gift of more than de minimus value
(currently $200 per year) from any person or entity that does business with or
on behalf of any Investment Vehicle. This limitation shall not apply to
reasonable meals, local transportation and entertainment (excluding non-local
travel and lodging), received in the normal course of relationship development
with such persons or entities.
Investment Persons may not serve on the board of directors of any publicly
traded company absent prior authorization from the Management Committee of the
Adviser which is based on a determination that board service would be consistent
with the interests of investment company clients and their shareholders.
IV. PRECLEARANCE
UNLESS SPECIFICALLY PROVIDED OTHERWISE, IN WRITING BY THE REVIEW OFFICER, ANY
CLEARANCE GRANTED WILL BE VALID FOR A PERIOD OF 3 BUSINESS DAYS.
A. ACCESS PERSONS AND INVESTMENT PERSONNEL:
Access Persons and Investment Personnel must pre-clear each proposed transaction
in Securities with the designated review officer. No transaction in Securities
may be effected without the prior approval of the review officer except as set
forth below.
The following transactions do not have to be precleared:
1. Purchases or sales of instruments that are not Securities as defined herein;
2. Purchases or sales over which the Access Person has no direct or indirect
influence or control;
3. Purchases or sales which are non-volitional on the part of either the Access
Person or any Investment Vehicle, including purchases or sales upon exercise of
puts or calls written by the Access Person and sales from a margin account
pursuant to a BONA FIDE margin call;
4. Purchases which are part of an automatic dividend reinvestment plan;
5. Purchases effected upon the exercise of rights issued by an issuer PRO RATA
to all holders of a class of its Securities, to the extent such rights were
acquired from such issuer.
Transactions which appear upon reasonable inquiry and investigation to present
no reasonable likelihood of harm to any Investment Vehicle and which are
otherwise in accordance with Rule l7j-l of the Investment Company Act of 1940
(the "40 Act") shall be entitled to clearance from the review officer:
<PAGE>
LSV ASSET MANAGEMENT CODE OF ETHICS AND INSIDER TRADING POLICY
B. ASSOCIATES:
Associates must preclear transactions only if the Associate knew or should have
known at the time of the transaction that, during the 7 day period immediately
preceding or following the transaction, the security was purchased or sold or
was being considered for purchase or sale by any Investment Vehicle.
V. REPORTING REQUIREMENTS
All Employees are required to have their broker/dealer file duplicate brokerage
statements with Compliance. Statements must be filed for all Accounts except
those which do not trade in instruments which are not Securities, as defined
herein. Failure of a broker-dealer to send duplicate statements will not excuse
an Employee's violation of this Section, unless the Employee demonstrates that
he or she took every reasonable step to monitor the broker-dealer's compliance.
If no such duplicate statement can be supplied, the Employee can obtain a
special report form from Compliance.
VI. DETECTION AND REPORTING OF INSIDER TRADING
Compliance will i) review the trading activity reports or duplicate statements
filed by Employees, focusing on patterns of personal trading; ii) review the
trading activity of Investment Vehicles; and iii) prepare a written report to
LSV management outlining any potential violations of this Policy together with
recommendations for further action.
VII. GUIDELINES ON INSIDER TRADING
All Employees are required to refrain from trading on the basis of inside
information which may be information about LSV or its clients. This Section
outlines basic definitions with which Employees should be familiar.
WHAT IS "MATERIAL" INFORMATION?
INFORMATION IS MATERIAL WHEN THERE IS A SUBSTANTIAL LIKELIHOOD THAT A REASONABLE
INVESTOR WOULD CONSIDER IT IMPORTANT IN MAKING HIS OR HER INVESTMENT DECISIONS.
Generally, if disclosing certain information will have a substantial effect on
the price of a company's securities, or on the perceived value of the company or
of a controlling interest in the company, the information is material, but
information may be material even if it does not have any immediate direct effect
on price or value.
WHAT IS "NONPUBLIC" INFORMATION?
INFORMATION ABOUT A PUBLICLY-TRADED SECURITY OR ISSUER IS "PUBLIC" WHEN IT HAS
BEEN DISSEMINATED BROADLY TO INVESTORS IN THE MARKETPLACE. TANGIBLE EVIDENCE OF
SUCH DISSEMINATION IS THE BEST INDICATION THAT THE INFORMATION IS PUBLIC. For
example, information is public after it has become available to the general
public through a public filing with the SEC or some other
<PAGE>
LSV ASSET MANAGEMENT CODE OF ETHICS AND INSIDER TRADING POLICY
governmental agency, the Dow Jones "tape" or the Wall Street Journal or some
other publication of general circulation, and after sufficient time has passed
so that the information has been disseminated widely.
Information about securities that are not publicly traded, or about the issuers
of such securities, is not ordinarily disseminated broadly to the public.
However, for purposes of this Policy, such private information may be considered
"public" private information to the extent that the information has been
disclosed generally to the issuer's security holders and creditors. For example,
information contained in a private placement memorandum to potential investors
may be considered "public" private information with respect to the class of
persons who received the memorandum, BUT MAY STILL BE CONSIDERED "NONPUBLIC"
INFORMATION WITH RESPECT TO CREDITORS WHO WERE NOT ENTITLED TO RECEIVE THE
MEMORANDUM. As another example, a controlling shareholder may have access to
internal projections that are not disclosed to minority shareholders; such
information would be considered "nonpublic" information.
WHO IS AN INSIDER?
Unlawful insider trading occurs when a person with a duty not to take advantage
of material nonpublic information violates that duty. A person in possession of
such information but not subject to such a duty is not prohibited from trading.
Whether a duty exists is a complex legal question. This portion of the Policy is
intended to provide an overview only, and should not be read as an exhaustive
discussion of ways in which persons may become subject to insider trading
prohibitions.
Insiders of a company include its officers, directors (or partners), and
employees, and may also include a controlling shareholder or other controlling
person. A person who has access to information about the company because of some
special trust or other confidential relationship with a company is considered a
temporary insider of that company. Investment advisers, lawyers, auditors,
financial institutions, and certain consultants AND ALL OF THEIR OFFICERS,
DIRECTORS OR PARTNERS, AND EMPLOYEES are all likely to be temporary insiders of
their clients.
Officers, directors or partners, and employees of a controlling shareholder may
be temporary insiders of the controlled company, or may otherwise be subject to
a duty not to take advantage of inside information.
WHAT IS MISAPPROPRIATION?
Misappropriation usually occurs when a person acquires inside information about
Company A in violation of a duty owed to Company B. For example, an employee of
Company B may know that Company B is negotiating a merger with Company A; the
employee has material nonpublic information about Company A and must not trade
in Company A's shares.
For another example, Employees who, because of their association with LSV,
receive inside information as to the identity of the companies being considered
for investment by LSV Investment
<PAGE>
LSV ASSET MANAGEMENT CODE OF ETHICS AND INSIDER TRADING POLICY
Vehicles or by other clients, have a duty not to take advantage of that
information and must refrain from trading in the securities of those companies.
<PAGE>
LSV ASSET MANAGEMENT CODE OF ETHICS AND INSIDER TRADING POLICY
WHAT IS TIPPING?
Tipping is passing along inside information; the recipient of a tip (the
"tippee") becomes subject to a duty not to trade while in possession of that
information. A tip occurs when an insider or misappropriator (the "tipper")
discloses inside information to another person, who knows or should know that
the tipper was breaching a duty by disclosing the information and that the
tipper was providing the information for an improper purpose.
HOW TO IDENTIFY INSIDE INFORMATION
Before executing any securities transaction for your personal account or for
others, you must consider and determine WHETHER YOU HAVE ACCESS TO MATERIAL,
NONPUBLIC INFORMATION. If you THINK that you might have access to material,
nonpublic information, you should take the following steps:
i. Report the information and proposed trade immediately to Compliance.
ii. Do not purchase or sell the securities on behalf of yourself or others.
iii. Do not communicate the information inside or outside LSV, other than to
Compliance.
ACKNOWLEDGEMENT
I have read and I understand the Policy. I certify that I have, to date,
complied and will continue to comply with the Policy. I understand that any
violation may lead to sanctions, including my dismissal.
Signature:__________________________________ Date:________________
Name (please print):_______________________________
<PAGE>
CONFIDENTIAL INFORMATION AND
SECURITIES TRADING POLICY
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
CONTENTS
- -------------------------
<TABLE>
<CAPTION>
Page
<S> <C> <C>
INTRODUCTION ........................................................... 1
PART I
APPLICABLE TO ALL ASSOCIATES
SECTION ONE
CONFIDENTIAL INFORMATION .................................. 2
-Types of Confidential Information ........................ 2
-Rules for Protecting Confidential Information ............ 3
-Supplemental Procedures .................................. 4
SECTION TWO
INSIDER TRADING AND TIPPING ............................... 5
-Legal Prohibitions ....................................... 5
-Mellon's Policy .......................................... 6
SECTION THREE
RESTRICTIONS ON THE FLOW OF INFORMATION
WITHIN MELLON (THE "CHINESE WALL") ........................ 7
-Rules for Maintaining the Chinese Wall ................... 7
-Reporting Receipt of Material Nonpublic Information ...... 8
-Functions "Above the Wall" ............................... 9
-Supplemental Procedures .................................. 9
SECTION FOUR
RESTRICTIONS ON TRANSACTIONS IN MELLON SECURITIES ......... 10
-Beneficial Ownership ..................................... 11
SECTION FIVE
RESTRICTIONS ON TRANSACTIONS IN OTHER SECURITIES .......... 12
SECTION SIX
CLASSIFICATION OF ASSOCIATES .............................. 14
-Insider Risk Associate ................................... 14
-Investment Associate ..................................... 15
-Other Associate .......................................... 15
<CAPTION>
PART II
APPLICABLE TO INSIDER
<S> <C> <C>
RISK ASSOCIATES ONLY ........................................................... 16
-Prohibition on Investments in Securities of Financial
Services Organizations ................................... 16
-Conflict of Interest ..................................... 17
-Preclearance for Personal Securities Transactions ........ 17
-Personal Securities Transactions Reports ................. 19
-Confidential Treatment ................................... 19
</TABLE>
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
<TABLE>
<CAPTION>
PART III
APPLICABLE TO INVESTMENT
<S> <C> <C>
ASSOCIATES ONLY .......................................................... 20
-Special Standards of Conduct for Investment Associates ... 20
-Preclearance for Personal Securities Transactions ........ 21
-Personal Securities Transactions Reports ................. 23
-Confidential Treatment ................................... 24
PART IV
APPLICABLE TO OTHER
ASSOCIATES ONLY ........................................................... 25
-Preclearance for Personal Securities Transactions ........ 25
-Personal Securities Transactions Reports ................. 25
-Restrictions on Transactions in Other Securities ......... 25
-Confidential Treatment ................................... 26
PART V
APPLICABLE TO NONMANAGEMENT
BOARD MEMBERS ........................................................... 27
-Nonmanagement Board Member ............................... 27
-Standards of Conduct for Nonmanagement Board Member ...... 27
-Preclearance for Personal Securities Transactions ........ 28
-Personal Securities Transactions Reports ................. 29
-Confidential Treatment ................................... 29
GLOSSARY DEFINITIONS ............................................... 30
INDEX OF EXHIBITS ........................................................... 33
</TABLE>
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
<PAGE>
INTRODUCTION
- --------------------
Mellon Bank Corporation ("Mellon") and its associates, and the
registered investment companies for which The Dreyfus Corporation
("Dreyfus") and/or Mellon serves as investment adviser, sub-investment
adviser or administrator, are subject to certain laws and regulations
governing the use of confidential information and personal securities
trading. Mellon has developed this CONFIDENTIAL INFORMATION AND
SECURITIES TRADING POLICY (THE "POLICY") to establish specific
standards to promote compliance with applicable laws. Further, the
Policy is intended to protect Mellon's business secrets and
proprietary information as well as that of its customers and any
entity for which it acts in a fiduciary capacity.
The Policy set forth procedures and limitations which govern the
personal securities transactions of every Mellon associate and certain
other individuals associated with the registered investment companies
for which Dreyfus and/or Mellon serves as investment adviser,
sub-investment adviser or administrator. The Policy is designed to
reinforce Mellon's reputation for integrity by avoiding even the
appearance of impropriety in the conduct of Mellon's business.
Associates should be aware that they may be held personally liable for
any improper or illegal acts committed during the course of their
employment, and that "ignorance of the law" is not a defense.
Associates may be subject to civil penalties such as fines, regulatory
sanctions including suspensions, as well as criminal penalties.
Associates outside the United States are also subject to applicable
laws of foreign jurisdictions, which may differ substantially from
U.S. law and which may subject such associates to additional
requirements. Such associates must comply with applicable requirements
of pertinent foreign laws as well as with the provisions of the
Policy. To the extent any particular portion of the Policy is
inconsistent with foreign law, associates should consult the General
Counsel or the Manager of Corporate Compliance.
Any provision of this Policy may be waived or exempted at the
discretion of the Manager of Corporate Compliance. Any such waiver or
exemption will be evidenced in writing and maintained in the Risk
Management and Compliance Department.
Associates must read the Policies and MUST
COMPLY with them. Failure to comply with the
provisions of the Policies may result in the
imposition of serious sanctions, including but
not limited to disgorgement of profits,
dismissal, substantial personal liability and
referral to law enforcement agencies or other
regulatory agencies. Associates should retain
the Policies in their records for future
reference. Any questions regarding the Policies
should be referred to the Manager of Corporate
Compliance or his/her designee.
1
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
PART I -- APPLICABLE TO ALL ASSOCIATES
- --------------------------------
SECTION ONE
CONFIDENTIAL INFORMATION
As an associate you may receive information about Mellon, its
customers and other parties that, for various reasons, should be
treated as confidential. All associates are expected to strictly
comply with measures necessary to preserve the confidentiality of
information.
TYPES OF CONFIDENTIAL INFORMATION - Although it is impossible to
provide an exhaustive list of information that should remain
confidential, the following are examples of the general types of
confidential information that associates might receive in the ordinary
course of carrying out their job responsibilities.
- INFORMATION OBTAINED FROM BUSINESS RELATIONS - An associate might
receive confidential information regarding customers or other parties
with whom Mellon has business relationships. If released, such
information could have a significant effect on their operations, their
business reputations or the market price of their securities.
Disclosing such information could expose both the associate and Mellon
to liability for damages.
- MELLON FINANCIAL INFORMATION - An associate might receive financial
information regarding Mellon before such information has been
disclosed to the public. It is the policy of Mellon to disclose all
material corporate information to the public in such a manner that all
those who are interested in Mellon and its securities have equal
access to the information. Disclosing such information to unauthorized
persons could subject both the associate and Mellon to liability under
the federal securities laws.
- MELLON PROPRIETARY INFORMATION - Certain nonfinancial information
developed by Mellon - such as business plans, customer lists, methods
of doing business, computer software, source codes, databases and
related documentation - constitutes valuable Mellon proprietary
information. Disclosure of such information to unauthorized persons
could harm, or reduce a benefit to, Mellon and could result in
liability for both the associate and Mellon.
- MELLON EXAMINATION INFORMATION - Banks and certain other Mellon
subsidiaries are periodically examined by regulatory agencies. Certain
reports made by those regulatory agencies are the property of those
agencies and are strictly confidential. Giving information from these
reports to anyone not officially connected with Mellon is a criminal
offense.
- PORTFOLIO MANAGEMENT INFORMATION - Portfolio management information
relating to investment accounts or funds managed by Mellon or Dreyfus,
including investment decisions or strategies developed for the benefit
of investment companies advised by Dreyfus, is for the benefit of such
account or fund. Disclosure or exploitation of such information by an
associate in an unauthorized manner may cause detriment to such
accounts or funds and may subject the associate to liability under the
federal securities laws.
2
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
RULES FOR PROTECTING CONFIDENTIAL INFORMATION -- The following are
some basic rules to follow to protect confidential information.
- LIMITED COMMUNICATION TO OUTSIDERS - Confidential information should
not be communicated to anyone outside Mellon, except to the extent
they need to know the information in order to provide necessary
services to Mellon.
- LIMITED COMMUNICATION TO INSIDERS - Confidential information should
not be communicated to other associates, except to the extent they
need to know the information to fulfill their job responsibilities and
their knowledge of the information is not likely to result in misuse
or a conflict of interest. In this regard, Mellon has established
specific restrictions with respect to material nonpublic information
in order to separate and insulate different functional areas and
personnel within Mellon. Please refer to Section Three, "Restrictions
on The Flow of Information Within Mellon" (The "Chinese Wall").
- CORPORATE USE ONLY - Confidential information should be used only for
Corporate purposes. Under no circumstances may an associate use it,
directly or indirectly, for personal gain or for the benefit of any
outside party who is not entitled to such information.
- OTHER CUSTOMERS - Where appropriate, customers should be made aware
that associates will not disclose to them other customers'
confidential information or use the confidential information of one
customer for the benefit of another.
- NOTIFICATION OF CONFIDENTIALITY - When confidential information is
communicated to any person, either inside or outside Mellon, they
should be informed of the information's confidential nature and the
limitations on its further communication.
- PREVENTION OF EAVESDROPPING - Confidential matters should not be
discussed in public or in places, such as in building lobbies,
restaurants or elevators, where unauthorized persons may overhear.
Precautions, such as locking materials in desk drawers overnight,
stamping material "Confidential" and delivering materials in sealed
envelopes, should be taken with written materials to ensure they are
not read by unauthorized persons.
- DATA PROTECTION - Data stored on personal computers and diskettes
should be properly secured to ensure they are not accessed by
unauthorized persons. Access to computer files should be granted only
on a need-to-know basis. At a minimum, associates should comply with
applicable Mellon policies on electronic data security.
3
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
- CONFIDENTIALITY AGREEMENTS - Confidentiality agreements to which
Mellon is a party must be complied with in addition to, but not in
lieu of, this Policy. Confidentiality agreements that deviate from
commonly used forms should be reviewed in advance by the Legal
Department.
- CONTACT WITH THE PUBLIC - All contacts with institutional shareholders
or securities analysts about Mellon must be made through the Investor
Relations Division of the Finance Department. All contacts with the
media and all speeches or other public statements made on behalf of
Mellon or about Mellon's businesses must be cleared in advance by
Corporate Affairs. In speeches and statements not made on behalf of
Mellon, care should be taken to avoid any implication that Mellon
endorses the views expressed.
- SUPPLEMENTAL PROCEDURES - Mellon entities, departments, divisions and
groups should establish their own supplemental procedures for
protecting confidential information, as appropriate. These procedures
may include:
- establishing records retention and destruction policies;
- using code names;
- limiting the staffing of confidential matters (for example, limiting
the size of working groups and the use of temporary employees,
messengers and word processors); and
- requiring written confidentiality agreements from certain associates.
ANY SUPPLEMENTAL PROCEDURES SHOULD BE USED ONLY TO PROTECT
CONFIDENTIAL INFORMATION AND NOT TO CIRCUMVENT APPROPRIATE REPORTING
AND RECORDKEEPING REQUIREMENTS.
4
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
SECTION TWO
INSIDER TRADING AND TIPPING
LEGAL PROHIBITIONS - Federal securities laws generally prohibit the
trading of securities while in possession of "material nonpublic"
information regarding the issuer of those securities (insider
trading). Any person who passes along the material nonpublic
information upon which a trade is based (tipping) may also be liable.
"MATERIAL" - Information is material if there is a substantial
likelihood that a reasonable investor would consider it important in
deciding whether to buy, sell or hold securities. Obviously,
information that would affect the market price of a security would be
material. Examples of information that might be material include:
- a proposal or agreement for a merger, acquisition or divestiture, or
for the sale or purchase of substantial assets;
- tender offers, which are often material for the party making the
tender offer as well as for the issuer of the securities for which the
tender offer is made;
- dividend declarations or changes;
- extraordinary borrowings or liquidity problems;
- defaults under agreements or actions by creditors, customers or
suppliers relating to a company's credit standing;
- earnings and other financial information, such as large or unusual
write-offs, write-downs, profits or losses;
- pending discoveries or developments, such as new products, sources of
materials, patents, processes, inventions or discoveries of mineral
deposits;
- a proposal or agreement concerning a financial restructuring;
- a proposal to issue or redeem securities, or a development with
respect to a pending issuance or redemption of securities;
- a significant expansion or contraction of operations;
- information about major contracts or increases or decreases in orders;
- the institution of, or a development in, litigation or a regulatory
proceeding;
- developments regarding a company's senior management;
- information about a company received from a director of that company;
and
- information regarding a company's possible noncompliance with
environmental protection laws.
This list is not exhaustive. All relevant circumstances must be
considered when determining whether an item of information is
material.
5
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
"NONPUBLIC" - Information about a company is nonpublic if it is not
generally available to the investing public. Information received
under circumstances indicating that it is not yet in general
circulation and which may be attributable, directly or indirectly, to
the company or its insiders is likely to be deemed nonpublic
information.
If an associate can refer to some public source to show that the
information is generally available (that is, available not from inside
sources only) and that enough time has passed to allow wide
dissemination of the information, the information is likely to be
deemed public. While information appearing in widely accessible
sources - such as newspapers - becomes public very soon after
publication, information appearing in less accessible sources - such
as regulatory filings - may take up to several days to be deemed
public. Similarly, highly complex information might take longer to
become public than would information that is easily understood by the
average investor.
MELLON'S POLICY - Associates who possess material nonpublic
information about a company - whether that company is Mellon, another
Mellon entity, a Mellon customer or supplier, or other company - may
not trade in that company's securities, either for their own accounts
or for any account over which they exercise investment discretion. In
addition, associates may not recommend trading in those securities and
may not pass the information along to others, except to associates who
need to know the information in order to perform their job
responsibilities with Mellon. These prohibitions remain in effect
until the information has become public.
Associates who have investment responsibilities should take
appropriate steps to avoid receiving material nonpublic information.
Receiving such information could create severe limitations on their
ability to carry out their responsibilities to Mellon's fiduciary
customers.
Associates managing the work of consultants and temporary employees
who have access to the types of confidential information described in
this Policy are responsible for ensuring that consultants and
temporary employees are aware of Mellon's policy and the consequences
of noncompliance.
Questions regarding Mellon's policy on material nonpublic information,
or specific information that might be subject to it, should be
referred to the General Counsel.
6
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
SECTION THREE
RESTRICTIONS ON THE FLOW OF
INFORMATION WITHIN MELLON
(THE "CHINESE WALL")
As a diversified financial services organization, Mellon faces unique
challenges in complying with the prohibitions on insider trading and
tipping of material nonpublic information and misuse of confidential
information. This is because one Mellon unit might have material
nonpublic information about a company while other Mellon units may
have a desire, or even a fiduciary duty, to buy or sell that company's
securities or recommend such purchases or sales to customers. To
engage in such broad-ranging financial services activities without
violating laws or breaching Mellon's fiduciary duties, Mellon has
established a "Chinese Wall" policy applicable to all associates. The
"Chinese Wall" separates the Mellon units or individuals that are
likely to receive material nonpublic information (Potential Insider
Functions) from the Mellon units or individuals that either trade in
securities - for Mellon's account or for the accounts of others or
provide investment advice (Investment Functions).
EXAMPLES OF POTENTIAL INSIDER FUNCTIONS - Potential Insider Functions
include, among others, certain commercial lending, corporate finance,
and credit policy areas. Insider Risk Associates (see Section Six,
"Insider Risk Associates") should consider themselves to be in
Potential Insider Functions unless their particular job
responsibilities clearly indicate otherwise.
EXAMPLES OF INVESTMENT FUNCTIONS - Investment Functions include, among
others, securities sales and trading, investment management and
advisory services, investment research and various trust or fiduciary
functions.
RULES FOR MAINTAINING THE "CHINESE WALL" - Without the prior approval
of the General Counsel, material nonpublic information obtained by
anyone in a Potential Insider Function should not be communicated to
anyone in an Investment Function. To reduce the risk of material
nonpublic information being communicated, communications between these
associates in these functions must be limited to the maximum extent
consistent with valid business needs.
PARTICULAR RULES -
- FILE RESTRICTIONS - Associates in Investment Functions must not have
access to commercial credit files, corporate finance files, or any
other Potential Insider Function files that might contain material
nonpublic information. All such files that contain material nonpublic
information should be marked as "Confidential" and, if feasible,
segregated from nonconfidential files.
- ELECTRONIC DATA - Associates in Investment Functions must not have
access to personal computer or word processing files of associates in
Potential Insider Functions.
- MEETINGS - Associates in Investment Functions must not attend meetings
between customers and associates in Potential Insider Functions unless
appropriate steps have been taken to ensure that material nonpublic
information will not be disclosed or discussed.
- COMMITTEE SERVICE - Without the prior approval of the General Counsel,
associates other than those "Above the Wall" (see page 9) must not
serve simultaneously on a committee having responsibility for any
Investment Function and a committee having responsibility for any
Potential Insider Function.
7
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
- INFORMATION REQUESTS - Requests for nonmaterial information or public
information across the "Chinese Wall" should be made in writing to an
appropriate associate in the applicable area. Associates sending or
receiving such a request should resolve any questions regarding the
materiality or nonpublic nature of the requested information by
consulting their department head, who will contact the General
Counsel, as appropriate.
- INFORMATION BACKFLOW - Associates should take care to avoid
inadvertent backflow of information that may be interpreted as the
prohibited communication of material nonpublic information. For
example, the mere fact that someone in a Potential Insider Function,
such as a mergers and acquisitions specialist, requests information
from an associate in an Investment Function could give the latter
person a clue as to possible material developments affecting a
customer.
- CUSTOMERS - Associates in Investment Functions must not state or imply
to customers that associates making decisions or recommendations will
have the benefit of information from Mellon's Potential Insider
Functions. When appropriate, associates should inform customers of
Mellon's "Chinese Wall" policy.
- CONFLICTS OF INTEREST - Associates should not receive or pass on any
information that would create an undue risk of Mellon or any associate
having a conflict of interest or breaching a fiduciary obligation.
REPORTING RECEIPT OF MATERIAL NONPUBLIC INFORMATION - Associates in
Investment Functions who receive any suspected material nonpublic
information must report such receipt promptly to their department or
entity head. A department or entity head who receives information
believed to be material and nonpublic should report the matter
promptly to the General Counsel. If the General Counsel determines
that the information is material and nonpublic, the affected
department or entity will:
- immediately SUSPEND ALL TRADING in the securities of the issuer to
which the information applies, as well as all recommendations with
respect to such securities. The suspension will remain in effect as
long as the information remains both material and nonpublic.
- NOTIFY THE GENERAL COUNSEL before resuming transactions or
recommendations in the affected securities. The General Counsel will
advise as to possible further steps, including ascertaining the
validity and nonpublic nature of the information with the issuer of
the securities; requesting the issuer of the securities, or other
appropriate parties, to disseminate the information promptly to the
public if the information is valid and nonpublic; and publishing the
information.
In certain circumstances, the department or entity head may be able to
demonstrate conclusively that the receipt of the material nonpublic
information has been confined to an individual or small group of
individuals and that measures other than those described above will
comparably reduce the likelihood of trading on the basis of the
information. These measures might include temporarily relieving
individuals of responsibility for any Investment Functions and
preventing any contact between those individuals and associates in
Investment Functions. In these circumstances, the department head,
with the approval of the General Counsel, may take those measures
rather than the measures described above.
8
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
FUNCTIONS "ABOVE THE WALL" - Some functions at Mellon are deemed to be
"Above the Wall." For example, members of senior management, Auditing,
Risk Management and Compliance, and the Legal Department will
typically need to have access to information on both sides of the
"Chinese Wall" to carry out their job responsibilities. These
individuals cannot rely on the procedural safeguards of the "Chinese
Wall" and, therefore, need to be particularly careful to avoid any
improper use or dissemination of material nonpublic information.
SUPPLEMENTAL PROCEDURES - As appropriate, certain Mellon departments
or areas, such as Mellon Trust, should establish their own procedures
to reduce the possibility of information being communicated to
associates who should not have access to that information.
9
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
SECTION FOUR
RESTRICTIONS ON TRANSACTIONS
IN MELLON SECURITIES
Associates who engage in transactions involving Mellon securities
should be aware of their unique responsibilities with respect to such
transactions arising from the employment relationship and should be
sensitive to even the appearance of impropriety.
The following restrictions apply to ALL transactions in Mellon's
publicly traded securities occurring in the associate's own account
and in all other accounts over which the associate could be expected
to exercise influence or control (see provisions under "Beneficial
Ownership" below for a more complete discussion of the accounts to
which these restrictions apply). These restrictions are to be followed
in addition to any restrictions that apply to particular officers or
directors (such as restrictions under Section 16 of the Securities
Exchange Act of 1934).
- SHORT SALES - Short sales of Mellon securities by associates are
prohibited.
- SALES WITHIN 60 DAYS OF PURCHASE -- Sales of Mellon securities within
60 days of acquisition are prohibited. For purposes of the 60-day
holding period, securities will be deemed to be equivalent if one is
convertible into the other, if one entails a right to purchase or sell
the other, or if the value of one is expressly dependent on the value
of the other (e.g., derivative securities).
In cases of extreme hardship, associates (other than senior
management) may obtain permission to dispose of Mellon securities
acquired within 60 days of the proposed transaction, provided the
transaction is pre-cleared with the Manager of Corporate Compliance
and any profits earned are disgorged in accordance with procedures
established by senior management. The Manager of Corporate Compliance
reserves the right to suspend the 60-day holding period restriction in
the event of severe market disruption.
- MARGIN TRANSACTIONS - Purchases on margin of Mellon's publicly traded
securities by associates is prohibited. Margining Mellon securities in
connection with a cashless exercise of an employee stock option
through the Human Resources Department is exempt from this
restriction. Further, Mellon securities may be used to collateralize
loans or the acquisition of securities other than those issued by
Mellon.
- OPTION TRANSACTIONS - Option transactions involving Mellon's publicly
traded securities are prohibited. Transactions under Mellon's
Long-Term Incentive Plan or other associate option plans are exempt
from this restriction.
- MAJOR MELLON EVENTS - Associates who have knowledge of major Mellon
events that have not yet been announced are prohibited from buying and
selling Mellon's publicly traded securities before such public
announcements, even if the associate believes the event does not
constitute material nonpublic information.
- MELLON BLACKOUT PERIOD - Associates are prohibited from buying or
selling Mellon's publicly traded securities during a blackout period,
which begins the 16th day of the last month of each calendar quarter
and ends three business days after Mellon publicly announces the
financial results for that quarter. In cases of extreme hardship,
associates (other than senior management) may request permission from
the Manager of Corporate Compliance to dispose of Mellon securities
during the blackout period.
10
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
BENEFICIAL OWNERSHIP - The provisions discussed above apply to
transactions in the associate's own name and to all other accounts
over which the associate could be expected to exercise influence or
control, including:
- accounts of a spouse, minor children or relatives to whom substantial
support is contributed;
- accounts of any other member of the associate's household (e.g., a
relative living in the same home);
- trust accounts for which the associate acts as trustee or otherwise
exercises any type of guidance or influence;
- Corporate accounts controlled, directly or indirectly, by the
associate;
- arrangements similar to trust accounts that are established for bona
fide financial purposes and benefit the associate; and
- any other account for which the associate is the beneficial owner (see
Glossary for a more complete legal definition of "beneficial owner").
11
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
SECTION FIVE
RESTRICTIONS ON TRANSACTIONS
IN OTHER SECURITIES
Purchases or sales by an associate of the securities of issuers with
which Mellon does business, or other third party issuers, could result
in liability on the part of such associate. Associates should be
sensitive to even the appearance of impropriety in connection with
their personal securities transactions. Associates should refer to the
provisions under "Beneficial Ownership" (Section Four, "Restrictions
on Transactions in Mellon Securities"), which are equally applicable
to the following provisions.
The Mellon Code of Conduct contains certain restrictions on
investments in parties that do business with Mellon. Associates should
refer to the Code of Conduct and comply with such restrictions in
addition to the restrictions and reporting requirements set forth
below.
The following restrictions apply to ALL securities transactions by
associates:
- CREDIT OR ADVISORY RELATIONSHIP - Associate may not buy or sell
securities of a company if they are considering granting, renewing or
denying any credit facility to that company or acting as an adviser to
that company with respect to its securities. In addition, lending
associates who have assigned responsibilities in a specific industry
group are not permitted to trade securities in that industry. This
prohibition does not apply to transactions in securities issued by
open-end investment companies.
- CUSTOMER TRANSACTIONS - Trading for customers and Mellon accounts
should always take precedence over associates' transactions for their
own or related accounts.
- FRONT RUNNING - Associates may not engage in "front running," that is,
the purchase or sale of securities for their own accounts on the basis
of their knowledge of Mellon's trading positions or plans.
- INITIAL PUBLIC OFFERINGS - Mellon prohibits its associates from
acquiring any securities in an initial public offering ("IPO").
- MARGIN TRANSACTIONS - Margin trading is a highly leveraged and
relatively risky method of investing that can create particular
problems for financial services employees. For this reason, all
associates are urged to avoid margin trading.
- Prior to establishing a margin account, the associate must obtain the
written permission of the Manager of Corporate Compliance. Any
associate having a margin account prior to the effective date of this
Policy must notify the Manager of Corporate Compliance of the
existence of such account.
12
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
All associates having margin accounts, other than described below,
must designate the Manager of Corporate Compliance as an interested
party on that account. Associates must ensure that the Manager of
Corporate Compliance promptly receives copies of all trade
confirmations and statements relating to the account directly from the
broker. If requested by a brokerage firm, please contact the Manager
of Corporate Compliance to obtain a letter (sometimes referred to as a
"407 letter") granting permission to maintain a margin account. Trade
confirmations and statements are not required on margin accounts
established at Dreyfus Investment Services Corporation for the sole
purpose of cashless exercises of employee stock options. In addition,
products may be offered by a broker/dealer that, because of their
characteristics, are considered margin accounts but have been
determined by the Manager of Corporate Compliance to be outside the
scope of this Policy (e.g., a Cash Management Account which provides
overdraft protection for the customer). Any questions regarding the
establishment, use and reporting of margin accounts should be directed
to the Manager of Corporate Compliance. Examples of an instruction
letter to a broker are shown in Exhibits B1 and B2.
- MATERIAL NONPUBLIC INFORMATION - Associates possessing material
nonpublic information regarding any issuer of securities must refrain
from purchasing or selling securities of that issuer until the
information becomes public or is no longer considered material.
- NAKED OPTIONS, EXCESSIVE TRADING - Mellon discourages all associates
from engaging in short-term or speculative trading, in trading naked
options, in trading that could be deemed excessive or in trading that
could interfere with an associate's job responsibilities.
- PRIVATE PLACEMENTS - Associates are prohibited from acquiring any
security in a private placement unless they obtain the prior written
approval of the Preclearance Compliance Officer (applicable only to
Investment Associates), the Manager of Corporate Compliance and the
associate's department head. Approval must be given by all appropriate
aforementioned persons for the acquisition to be considered approved.
After receipt of the necessary approvals and the acquisition,
associates are required to disclose that investment when they
participate in any subsequent consideration of an investment in the
issuer for an advised account. Final decision to acquire such
securities for an advised account will be subject to independent
review.
- SCALPING - Associates may not engage in "scalping," that is, the
purchase or sale of securities for their own or Mellon's accounts on
the basis of knowledge of customers' trading positions or plans or
Mellon's forthcoming investment recommendations.
- SHORT-TERM TRADING - Associates are discouraged from purchasing and
selling, or from selling and purchasing, the same (or equivalent)
securities within 60 calendar days. With respect to Investment
Associates only, any profits realized on such short-term trades must
be disgorged in accordance with procedures established by senior
management.
13
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
SECTION SIX
CLASSIFICATION OF ASSOCIATES
Associates are engaged in a wide variety of activities for Mellon. In
light of the nature of their activities and the impact of federal and
state laws and the regulations thereunder, the Policy imposes
different requirements and limitations on associates based on the
nature of their activities for Mellon. To assist the associates in
complying with the requirements and limitations imposed on them in
light of their activities, associates are classified into one of three
categories: Insider Risk Associate, Investment Associate and Other
Associate. Appropriate requirements and limitations are specified in
the Policy based upon the associate's classification.
INSIDER RISK ASSOCIATE -
You are considered to be an Insider Risk Associate if you are:
- employed in any of the following departments or functional areas,
however named, of a Mellon entity other than Dreyfus (see Glossary for
definition of "Dreyfus"):
- Auditing - International
- Capital Markets - Leasing
- Corporate Affairs - Legal
- Credit Policy - Mellon Business Credit
- Credit Recovery - Middle Market
- Credit Review - Portfolio and Funds Management
- Domestic Corporate Banking - Risk Management and Compliance
- Finance - Strategic Planning
- Institutional Banking - Wholesale, Administration
and Operations
- a member of the Mellon Senior Management Committee, provided that
those members of the Mellon Senior Management Committee who have
management responsibility for fiduciary activities or who routinely
have access to information about customers' securities transactions
are considered to be Investment Associates and are subject to those
provisions of the Policy pertaining to Investment Associates;
- employed by a broker/dealer subsidiary of a Mellon entity other than
Dreyfus;
- an associate in the Stock Transfer business unit and have been
specifically designated as an Insider Risk Associate by the Manager of
Corporate Compliance; or
- an associate specifically designated as an Insider Risk Associate by
the Manager of Corporate Compliance.
14
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
INVESTMENT ASSOCIATE -
You are considered to be an Investment Associate if you are:
- a member of Mellon's Senior Management Committee who, as part of
his/her usual duties, has management responsibility for fiduciary
activities or routinely has access to information about customers'
securities transactions;
- a Dreyfus associate;
- an associate of a Mellon entity registered under the Investment
Advisers Act of 1940;
- employed in the trust area of Mellon and:
- have the title of Vice President, First Vice President or Senior
Vice President; or
- have access to material, confidential information regarding
securities transactions by or on behalf of Mellon customers; or
- an associate specifically designated as an Investment Associate
by the Manager of Corporate Compliance.
OTHER ASSOCIATE -
You are considered to be an Other Associate if you are an associate of
Mellon Bank Corporation or any of its direct or indirect subsidiaries
who is not either an Insider Risk Associate or an Investment
Associate.
15
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
PART II -- APPLICABLE TO INSIDER
RISK ASSOCIATES ONLY
- --------------------------------
PROHIBITION ON INVESTMENTS IN SECURITIES OF FINANCIAL SERVICES
ORGANIZATIONS
You are prohibited from acquiring any security issued by a financial
services organization if you are:
- a member of the Mellon Senior Management Committee. For purposes of
this restriction only, this prohibition also applies to those members
of the Mellon Senior Management Committee who are considered
Investment Associates.
- employed in any of the following departments of a Mellon entity other
than Dreyfus (see Glossary for definition of "Dreyfus"):
- Strategic Planning - Finance
- Institutional Banking - Legal
- an associate specifically designated by the Manager of Corporate
Compliance and informed that this prohibition is applicable to you.
FINANCIAL SERVICES ORGANIZATIONS - The term "security issued by a
financial services organization" includes any security issued by:
- Commercial Banks - Bank Holding Companies
(other than Mellon) (other than Mellon)
- Thrifts - Savings and Loan Associations
- Insurance Companies - Broker/Dealers
- Investment Advisory Companies - Transfer Agents
- Shareholder Servicing Companies - Other Depository Institutions
The term "securities issued by a financial services organization" DOES
NOT INCLUDE securities issued by mutual funds, variable annuities or
insurance policies. Further, for purposes of determining whether a
company is a financial services organization, subsidiaries and parent
companies are treated as separate issuers.
EFFECTIVE DATE - The foregoing restrictions will be effective upon
adoption of this Policy. Securities of financial services
organizations properly acquired before the later of the effective date
of this Policy or the date of hire may be maintained or disposed of at
the owner's discretion.
Additional securities of a financial services organization acquired
through the reinvestment of the dividends paid by such financial
services organization through a dividend reinvestment program (DRIP)
are not subject to this prohibition, provided your election to
participate in the DRIP predates the later of the effective date of
this Policy or date of hire. Optional cash purchases through a DRIP
are subject to this prohibition.
Within 30 days of the later of the effective date of this Policy or
date of becoming subject to this prohibition, all holdings of
securities of financial services organizations must be disclosed in
writing to the Manager of Corporate Compliance. Periodically, you will
be asked to file an updated disclosure of all your holdings of
securities of financial services organizations.
16
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
CONFLICT OF INTEREST - No Insider Risk Associate may engage in or
recommend any securities transaction that places, or appears to place,
his or her own interests above those of any customer to whom
investment services are rendered, including mutual funds and managed
accounts, or above the interests of Mellon.
PRECLEARANCE FOR PERSONAL SECURITIES TRANSACTIONS - All Insider Risk
Associates must notify the Manager of Corporate Compliance in writing
and receive preclearance before they engage in any purchase or sale of
a security. Insider Risk Associates should refer to the provisions
under "Beneficial Ownership" (Section Four, "Restrictions on
Transactions in Mellon Securities"), which are equally applicable to
these provisions.
EXEMPTIONS FROM REQUIREMENT TO PRECLEAR - Preclearance is NOT required
for the following transactions:
- purchases or sales of Exempt Securities (see Glossary);
- purchases or sales of municipal bonds;
- purchases or sales effected in any account over which an associate has
no direct or indirect control over the investment decision-making
process (e.g., nondiscretionary trading accounts). Nondiscretionary
trading accounts may only be maintained, without being subject to
preclearance procedures, when the Manager of Corporate Compliance,
after a thorough review, is satisfied that the account is truly
nondiscretionary;
- transactions that are non-volitional on the part of an associate (such
as stock dividends);
- the sale of stock received upon the exercise of an associate stock
option if the sale is part of a "netting of shares" or "cashless
exercise" administered by the Human Resources Department (for which
the Human Resources Department will forward information to the Manager
of Corporate Compliance);
- the automatic reinvestment of dividends under a DRIP (preclearance is
required for OPTIONAL cash purchases under a DRIP);
- purchases effected upon the exercise of rights issued by an issuer pro
rata to all holders of a class of securities, to the extent such
rights were acquired from such issuer;
- sales of rights acquired from an issuer, as described above; and/or
- those situations where the Manager of Corporate Compliance determines,
after taking into consideration the particular facts and
circumstances, that prior approval is not necessary.
REQUESTS FOR PRECLEARANCE - All requests for preclearance for a
securities transaction shall be submitted to the Manager of Corporate
Compliance by completing a Preclearance Request Form (see Exhibit C1).
The Manager of Corporate Compliance will notify the Insider Risk
Associate whether the request is approved or denied, without
disclosing the reason for such approval or denial.
17
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
Notifications may be given in writing or verbally by the Manager of
Corporate Compliance to the Insider Risk Associate. A record of such
notification will be maintained by the Manager of Corporate
Compliance. However, it shall be the responsibility of the Insider
Risk Associate to obtain a written record of the Manager of Corporate
Compliance's notification within 24 hours of such notification. The
Insider Risk Associate should retain a copy of this written record.
As there could be many reasons for preclearance being granted or
denied, Insider Risk Associates should not infer from the preclearance
response anything regarding the security for which preclearance was
requested.
Although making a preclearance request does not obligate an Insider
Risk Associate to do the transaction, it should be noted that:
- preclearance authorization will expire at the end of the third
business day after it is received (the day authorization is granted is
considered the first business day);
- preclearance requests should not be made for a transaction that the
Insider Risk Associate does not intend to make; and
- Insider Risk Associates should not discuss with anyone else, inside or
outside Mellon, the response they received to a preclearance request.
Every Insider Risk Associate must follow these procedures or risk
serious sanctions, including dismissal. If you have any questions
about these procedures you should consult the Manager of Corporate
Compliance. Interpretive issues that arise under these procedures
shall be decided by, and are subject to the discretion of, the Manager
of Corporate Compliance.
RESTRICTED LIST - The Manager of Corporate Compliance will maintain a
list (the "Restricted List") of companies whose securities are deemed
appropriate for implementation of trading restrictions for Insider
Risk Associates. Restricted List(s) will not be distributed outside of
the Risk Management and Compliance Department. From time to time, such
trading restrictions may be appropriate to protect Mellon and its
Insider Risk Associates from potential violations, or the appearance
of violations, of securities laws. The inclusion of a company on the
Restricted List provides no indication of the advisability of an
investment in the company's securities or the existence of material
nonpublic information on the company. Nevertheless, the contents of
the Restricted List will be treated as confidential information to
avoid unwarranted inferences.
To assist the Manager of Corporate Compliance in identifying companies
that may be appropriate for inclusion on the Restricted List, the
department heads of sections in which Insider Risk Associates are
employed will inform the Manager of Corporate Compliance in writing of
any companies they believe should be included on the Restricted List,
based upon facts known or readily available to such department heads.
Although the reasons for inclusion on the Restricted List may vary,
they could typically include the following:
- Mellon is involved as a lender, investor or adviser in a merger,
acquisition or financial restructuring involving the company;
- Mellon is involved as a selling shareholder in a public distribution
of the company's securities;
18
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
- Mellon is involved as an agent in the distribution of the company's
securities;
- Mellon has received material nonpublic information on the company;
- Mellon is considering the exercise of significant creditors' rights
against the company; or
- The company is a Mellon borrower in Credit Recovery.
Department heads of sections in which Insider Risk Associates are
employed are also responsible for notifying the Manager of Corporate
Compliance in writing of any change in circumstances making it
appropriate to remove a company from the Restricted List.
PERSONAL SECURITIES TRANSACTIONS REPORTS
- BROKERAGE ACCOUNTS - All Insider Risk Associates are required to
instruct their brokers to submit directly to the Manager of Corporate
Compliance copies of all trade confirmations and statements relating
to their account. An example of an instruction letter to a broker is
contained in Exhibit B1.
- REPORT OF TRANSACTIONS IN MELLON SECURITIES - Insider Risk Associates
must also report in writing to the Manager of Corporate Compliance
within ten calendar days whenever they purchase or sell Mellon
securities if the transaction was not through a brokerage account as
described above. Purchases and sales of Mellon securities include the
following:
DRIP OPTIONAL CASH PURCHASES - Optional cash purchases under Mellon's
Dividend Reinvestment and Common Stock Purchase Plan (the "Mellon
DRIP").
STOCK OPTIONS - The sale of stock received upon the exercise of an
associate stock option unless the sale is part of a "netting of
shares" or "cashless exercise" administered by the Human Resources
Department (for which the Human Resources Department will forward
information to the Manager of Corporate Compliance).
It should be noted that the reinvestment of dividends under the DRIP,
changes in elections under Mellon's Retirement Savings Plan, the
receipt of stock under Mellon's Restricted Stock Award Plan and the
receipt or exercise of options under Mellon's Long-Term Profit
Incentive Plan are not considered purchases or sales for the purpose
of this reporting requirement.
An example of a written report to the Manager of Corporate Compliance
is contained in Exhibit A.
CONFIDENTIAL TREATMENT
THE MANAGER OF CORPORATE COMPLIANCE WILL USE HIS OR HER BEST EFFORTS
TO ASSURE THAT ALL REQUESTS FOR PRECLEARANCE, ALL PERSONAL SECURITIES
TRANSACTION REPORTS AND ALL REPORTS OF SECURITIES HOLDINGS ARE TREATED
AS "PERSONAL AND CONFIDENTIAL." HOWEVER, SUCH DOCUMENTS WILL BE
AVAILABLE FOR INSPECTION BY APPROPRIATE REGULATORY AGENCIES AND BY
OTHER PARTIES WITHIN AND OUTSIDE MELLON AS ARE NECESSARY TO EVALUATE
COMPLIANCE WITH OR SANCTIONS UNDER THIS POLICY.
19
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
PART III -- APPLICABLE TO
INVESTMENT ASSOCIATES ONLY
- --------------------------
Because of their particular responsibilities, Investment Associates
are subject to different preclearance and personal securities
reporting requirements as discussed below.
SPECIAL STANDARDS OF CONDUCT FOR INVESTMENT ASSOCIATES
CONFLICT OF INTEREST - No Investment Associate may recommend a
securities transaction for a Mellon customer to whom a fiduciary duty
is owed, or for Mellon, without disclosing any interest he or she has
in such securities or issuer (other than an interest in publicly
traded securities where the total investment is equal to or less than
$25,000), including:
- any direct or indirect beneficial ownership of any securities of such
issuer;
- any contemplated transaction by the Investment Associate in such
securities;
- any position with such issuer or its affiliates; and
- any present or proposed business relationship between such issuer or
its affiliates and the Investment Associate or any party in which the
Investment Associate has a beneficial ownership interest (see
"Beneficial Ownership" in Section Four, "Restrictions On Transactions
in Mellon Securities").
PORTFOLIO INFORMATION - No Investment Associate may divulge the
current portfolio positions, or current or anticipated portfolio
transactions, programs or studies, of Mellon or any Mellon customer to
anyone unless it is properly within his or her job responsibilities to
do so.
MATERIAL NONPUBLIC INFORMATION - No Investment Associate may engage in
or recommend a securities transaction, for his or her own benefit or
for the benefit of others, including Mellon or its customers, while in
possession of material nonpublic information regarding such
securities. No Investment Associate may communicate material nonpublic
information to others unless it is properly within his or her job
responsibilities to do so.
SHORT-TERM TRADING - Any Investment Associate who purchases and sells,
or sells and purchases, the same (or equivalent) securities within any
60-calendar-day period is required to disgorge all profits realized on
such transaction in accordance with procedures established by senior
management. For this purpose, securities will be deemed to be
equivalent if one is convertible into the other, if one entails a
right to purchase or sell the other, or if the value of one is
expressly dependent on the value of the other (e.g., derivative
securities).
ADDITIONAL RESTRICTIONS FOR DREYFUS ASSOCIATES AND ASSOCIATES OF
MELLON ENTITIES REGISTERED UNDER THE INVESTMENT ADVISERS ACT OF 1940
ONLY ("40 Act Associates")
- OUTSIDE ACTIVITIES - No 40 Act associate may serve on the board of
directors/trustees or as a general partner of any publicly traded
company (other than Mellon) without the prior approval of the Manager
of Corporate Compliance.
20
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
- GIFTS - All 40 Act associates are prohibited from accepting gifts from
outside companies, or their representatives, with an exception for
gifts of (1) a DE MINIMIS value and (2) an occasional meal, a ticket
to a sporting event or the theater, or comparable entertainment for
the 40 Act associate and, if appropriate, a guest, which is neither so
frequent nor extensive as to raise any question of impropriety. A gift
shall be considered DE MINIMIS if it does not exceed an annual amount
per person fixed periodically by the National Association of
Securities Dealers, which is currently $100 per person.
- BLACKOUT PERIOD - 40 Act associates will not be given clearance to
execute a transaction in any security that is being considered for
purchase or sale by an affiliated investment company, managed account
or trust, for which a pending buy or sell order for such affiliated
account is pending, and for two business days after the transaction in
such security for such affiliated account has been effected. This
provision does not apply to transactions effected or contemplated by
index funds.
In addition, portfolio managers for the investment companies are
prohibited from buying or selling a security within seven calendar
days before and after such investment company trades in that security.
Any violation of the foregoing will require the violator to disgorge
all profit realized with respect to such transaction.
PRECLEARANCE FOR PERSONAL SECURITIES TRANSACTIONS - All Investment
Associates must notify the Preclearance Compliance Officer (see
Glossary) in writing and receive preclearance BEFORE they engage in
any purchase or sale of a security.
EXEMPTIONS FROM REQUIREMENT TO PRECLEAR -- Preclearance is not
required for the following transactions:
- purchases or sales of "Exempt Securities" (see Glossary);
- purchases or sales effected in any account over which an associate has
no direct or indirect control over the investment decision-making
process (i.e., nondiscretionary trading accounts). Nondiscretionary
trading accounts may only be maintained, without being subject to
preclearance procedures, when the Preclearance Compliance Officer,
after a thorough review, is satisfied that the account is truly
nondiscretionary;
- transactions which are non-volitional on the part of an associate
(such as stock dividends);
- the sale of stock received upon the exercise of an associate stock
option if the sale is part of a "netting of shares" or "cashless
exercise" administered by the Human Resources Department (for which
the Human Resources Department will forward information to the manager
of Corporate Compliance);
- purchases which are part of an automatic reinvestment of dividends
under a DRIP (Preclearance is required for OPTIONAL cash purchases
under a DRIP);
- purchases effected upon the exercise of rights issued by an issuer PRO
RATA to all holders of a class of securities, to the extent such
rights were acquired from such issuer;
- sales of rights acquired from an issuer, as described above; and/or
- those situations where the Preclearance Compliance Officer determines,
after taking into consideration the particular facts and
circumstances, that prior approval is not necessary.
21
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
REQUESTS FOR PRECLEARANCE - All requests for preclearance for a
securities transaction shall be submitted to the Preclearance
Compliance Officer by completing a Preclearance Request Form.
(Investment Associates other than Dreyfus associates are to use the
Preclearance Request Form shown as Exhibit C1. Dreyfus associates are
to use the Preclearance Request Form shown as Exhibit C2.)
The Preclearance Compliance Officer will notify the Investment
Associate whether the request is approved or denied without disclosing
the reason for such approval or denial.
Notifications may be given in writing or verbally by the Preclearance
Compliance Officer to the Investment Associate. A record of such
notification will be maintained by the Preclearance Compliance
Officer. However, it shall be the responsibility of the Investment
Associate to obtain a written record of the Preclearance Compliance
Officer's notification within 24 hours of such notification. The
Investment Associate should retain a copy of this written record.
As there could be many reasons for preclearance being granted or
denied, Investment Associates should not infer from the preclearance
response anything regarding the security for which preclearance was
requested.
Although making a preclearance request does not obligate an Investment
Associate to do the transaction, it should be noted that:
- preclearance authorization will expire at the end of the day on which
preclearance is given;
- preclearance requests should not be made for a transaction that the
Investment Associate does not intend to make; and
- Investment Associates should not discuss with anyone else, inside or
outside Mellon, the response the Investment Associate received to a
preclearance request.
Every Investment Associate must follow these procedures or risk
serious sanctions, including dismissal. If you have any questions
about these procedures, consult the Preclearance Compliance Officer.
Interpretive issues that arise under these procedures shall be decided
by, and are subject to the discretion of, the Manager of Corporate
Compliance.
RESTRICTED LIST - Each Preclearance Compliance Officer will maintain a
list (the "Restricted List") of companies whose securities are deemed
appropriate for implementation of trading restrictions for Investment
Associates in their area. From time to time, such trading restrictions
may be appropriate to protect Mellon and its Investment Associates
from potential violations, or the appearance of violations, of
securities laws. The inclusion of a company on the Restricted List
provides no indication of the advisability of an investment in the
company's securities or the existence of material nonpublic
information on the company. Nevertheless, the contents of the
Restricted List will be treated as confidential information in order
to avoid unwarranted inferences.
In order to assist the Preclearance Compliance Officer in identifying
companies that may be appropriate for inclusion on the Restricted
List, the head of the entity/department/area in which Investment
Associates are employed will inform the appropriate Preclearance
Compliance Officer in writing of any companies that they believe
should be included on the Restricted List based upon facts known or
readily available to such department heads.
22
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
PERSONAL SECURITIES TRANSACTIONS REPORTS
- BROKERAGE ACCOUNTS - All Investment Associates are required to
instruct their brokers to submit directly to the Manager of Corporate
Compliance copies of all trade confirmations and statements relating
to their account. Examples of instruction letters to a broker are
contained in Exhibits B1 and B2.
- REPORT OF TRANSACTIONS IN MELLON SECURITIES - Investment Associates
must also report in writing to the Manager of Corporate Compliance
within ten calendar days whenever they purchase or sell Mellon
securities if the transaction was not through a brokerage account as
described above. Purchases and sales of Mellon securities include the
following:
DRIP OPTIONAL CASH PURCHASES - Optional cash purchases under Mellon's
Dividend Reinvestment and Common Stock Purchase Plan (the "Mellon
DRIP").
STOCK OPTIONS - The sale of stock received upon the exercise of an
associate stock option unless the sale is part of a "netting of
shares" or "cashless exercise" administered by the Human Resources
Department (for which the Human Resources Department will forward
information to the Manager of Corporate Compliance).
It should be noted that the reinvestment of dividends under the DRIP,
changes in elections under Mellon's Retirement Savings Plan, the
receipt of stock under Mellon's Restricted Stock Award Plan, and the
receipt or exercise of options under Mellon's Long-Term Profit
Incentive Plan are not considered purchases or sales for the purpose
of this reporting requirement.
An example of a written report to the Manager of Corporate Compliance
is contained in Exhibit A.
- STATEMENT OF SECURITIES HOLDINGS - Within ten days of receiving this
Policy and on an annual basis thereafter, all Investment Associates
must submit to the Manager of Corporate Compliance a statement of all
securities in which they presently have any direct or indirect
beneficial ownership other than Exempt Securities, as defined in the
Glossary. Investment Associates should refer to "Beneficial Ownership"
in Section Four, "Restrictions on Transactions in Mellon Securities,"
which is also applicable to Investment Associates. Such statements
should be in the format shown in Exhibit D. The annual report must be
submitted by January 31 and must report all securities holdings other
than Exempt Securities. The annual statement of securities holdings
contains an acknowledgment that the Investment Associate has read and
complied with this Policy.
- SPECIAL REQUIREMENT WITH RESPECT TO AFFILIATED INVESTMENT COMPANIES -
The portfolio managers, research analysts and other Investment
Associates specifically designated by the Manager of Corporate
Compliance are required within ten calendar days of receiving this
Policy (and by no later than ten calendar days after the end of each
calendar quarter) to report every transaction in the securities issued
by an affiliated investment company occurring in an account in which
the Investment Associate has a beneficial ownership interest. The
quarterly reporting requirement may be satisfied by notifying the
Manager of Corporate Compliance of the name of the investment company,
account name and account number for which such quarterly reports must
be submitted.
23
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
CONFIDENTIAL TREATMENT
THE PRECLEARANCE COMPLIANCE OFFICER WILL USE
HIS OR HER BEST EFFORTS TO ASSURE THAT ALL REQUESTS FOR PRECLEARANCE,
ALL PERSONAL SECURITIES TRANSACTION REPORTS AND ALL REPORTS OF
SECURITIES HOLDINGS ARE TREATED AS "PERSONAL AND CONFIDENTIAL."
HOWEVER, SUCH DOCUMENTS WILL BE AVAILABLE FOR INSPECTION BY
APPROPRIATE REGULATORY AGENCIES, AND BY OTHER PARTIES WITHIN AND
OUTSIDE MELLON AS ARE NECESSARY TO EVALUATE COMPLIANCE WITH OR
SANCTIONS UNDER THIS POLICY. DOCUMENTS RECEIVED FROM DREYFUS
ASSOCIATES ARE ALSO AVAILABLE FOR INSPECTION BY THE BOARDS OF
DIRECTORS OF DREYFUS AND BY THE BOARDS OF DIRECTORS (OR TRUSTEES OR
MANAGING GENERAL PARTNERS, AS APPLICABLE) OF THE INVESTMENT COMPANIES
MANAGED OR ADMINISTERED BY DREYFUS.
24
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
PART IV -- APPLICABLE TO
OTHER ASSOCIATES ONLY
- ---------------------------
PRECLEARANCE FOR PERSONAL SECURITIES TRANSACTIONS - Except for private
placements, Other Associates ARE PERMITTED to engage in personal
securities transactions without obtaining prior approval from the
Manager of Corporate Compliance (for preclearance of private
placements, use the Preclearance Request Form shown as Exhibit C1.)
PERSONAL SECURITIES TRANSACTIONS REPORTS - Other Associates are NOT
required to report their personal securities transactions OTHER THAN
margin transactions and transactions involving Mellon securities as
discussed below. Other Associates are required to instruct their
brokers to submit directly to the Manager of Corporate Compliance
copies of all confirmations and statements pertaining to margin
accounts. Examples of an instruction letter to a broker are shown in
Exhibit B1.
REPORT OF TRANSACTIONS IN MELLON SECURITIES - Other Associates must
report in writing to the Manager of Corporate Compliance within ten
calendar days whenever they purchase or sell Mellon securities.
Purchases and sales of Mellon securities include the following:
- DRIP OPTIONAL CASH PURCHASES - Optional cash purchases under Mellon's
Dividend Reinvestment and Common Stock Purchase Plan (the "Mellon
DRIP").
- STOCK OPTIONS - The sale of stock received upon the exercise of an
associate stock option unless the sale is part of a "netting of
shares" or "cashless exercise" administered by the Human Resources
Department (for which the Human Resources Department will forward
information to the Manager of Corporate Compliance).
It should be noted that the reinvestment of dividends under the DRIP,
changes in elections under Mellon's Retirement Savings Plan, the
receipt of stock under Mellon's Restricted Stock Award Plan and the
receipt or exercise of options under Mellon's Long-Term Profit
Incentive Plan are not considered purchases or sales for the purpose
of this reporting requirement.
An example of a written report to the Manager of Corporate Compliance
is contained in Exhibit A.
RESTRICTIONS ON TRANSACTIONS IN OTHER SECURITIES
MARGIN TRANSACTIONS - Prior to establishing a margin account, Other
Associates must obtain the written permission of the Manager of
Corporate Compliance. Other Associates having a margin account prior
to the effective date of this Policy must notify the Manager of
Corporate Compliance of the existence of such account.
25
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
All associates having margin accounts, other than described below,
must designate the Manager of Corporate Compliance as an interested
party on each account. Associates must ensure that the Manager of
Corporate Compliance promptly receives copies of all trade
confirmations and statements relating to the accounts directly from
the broker. If requested by a brokerage firm, please contact the
Manager of Corporate Compliance to obtain a letter (sometimes referred
to as a "407 letter") granting permission to maintain a margin
account. Trade confirmations and statements are not required on margin
accounts established at Dreyfus Investment Services Corporation for
the sole purpose of cashless exercises of Mellon employee stock
options. In addition, products may be offered by a broker/dealer that,
because of their characteristics, are considered margin accounts but
have been determined by the Manager of Corporate Compliance to be
outside the scope of this Policy (e.g., a Cash Management account
which provides overdraft protection for the customer). Any questions
regarding the establishment, use and reporting of margin accounts
should be directed to the Manager of Corporate Compliance. An example
of an instruction letter to a broker is shown in Exhibit B1.
PRIVATE PLACEMENTS - Other Associates are prohibited from acquiring
any security in a private placement unless they obtain the prior
written approval of the Manager of Corporate Compliance and the
Associate's department head. Approval must be given by both of the
aforementioned persons for the acquisition to be considered approved.
As there could be many reasons for preclearance being granted or
denied, Other Associates should not infer from the preclearance
response anything regarding the security for which preclearance was
requested.
Although making a preclearance request does not obligate an Other
Associate to do the transaction, it should be noted that:
- preclearance authorization will expire at the end of the third
business day after it is received (the day authorization is granted is
considered the first business day);
- preclearance requests should not be made for a transaction that the
Other Associate does not intend to make; and
- Other Associates should not discuss with anyone else, inside or
outside Mellon, the response they received to a preclearance request.
Every Other Associate must follow these procedures or risk serious
sanctions, including dismissal. If you have any questions about these
procedures you should consult the Manager of Corporate Compliance.
Interpretive issues that arise under these procedures shall be decided
by, and are subject to the discretion of, the Manager of Corporate
Compliance.
CONFIDENTIAL TREATMENT
THE MANAGER OF CORPORATE COMPLIANCE WILL USE HIS OR HER BEST EFFORTS
TO ASSURE THAT ALL REQUESTS FOR PRECLEARANCE, ALL PERSONAL SECURITIES
TRANSACTION REPORTS AND ALL REPORTS OF SECURITIES HOLDINGS ARE TREATED
AS "PERSONAL AND CONFIDENTIAL." HOWEVER, SUCH DOCUMENTS WILL BE
AVAILABLE FOR INSPECTION BY APPROPRIATE REGULATORY AGENCIES AND OTHER
PARTIES WITHIN AND OUTSIDE MELLON AS ARE NECESSARY TO EVALUATE
COMPLIANCE WITH OR SANCTIONS UNDER THIS POLICY.
26
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
PART V - APPLICABLE TO
NONMANAGEMENT BOARD MEMBER
- ---------------------
NONMANAGEMENT BOARD MEMBER --
You are considered to be a Nonmanagement Board Member if you are:
- a director of Dreyfus who is not also an officer or employee of
Dreyfus ("Dreyfus Board Member"); or
- a director, trustee or managing general partner of any investment
company who is not also an officer or employee of Dreyfus ("Mutual
Fund Board Member").
The term "Independent" Mutual Fund Board Member means those Mutual
Fund Board Members who are NOT deemed "interested persons" of an
investment company, as defined by the Investment Company Act of 1940,
as amended.
STANDARDS OF CONDUCT FOR NONMANAGEMENT BOARD MEMBER
OUTSIDE ACTIVITIES - Nonmanagement Board Members are prohibited from:
- accepting nomination or serving as a director, trustee or managing
general partner of an investment company not advised by Dreyfus,
WITHOUT the express prior approval of the board of directors of
Dreyfus and the board of directors/trustees or managing general
partners of the pertinent Dreyfus-managed fund(s) for which a
Nonmanagement Board Member serves as a director, trustee or managing
general partner;
- accepting employment with or acting as a consultant to any person
acting as a registered investment adviser to an investment company
without the express prior approval of the board of directors of
Dreyfus;
- owning Mellon securities if the Nonmanagement Board Member is an
"Independent" Mutual Fund Board Member, (since that would destroy his
or her "independent" status); and/or
- buying or selling Mellon's publicly traded securities during a
blackout period, which begins the 16th day of the last month of each
calendar quarter and ends three business days after Mellon publicly
announces the financial results for that quarter.
INSIDER TRADING AND TIPPING - The provisions set forth in Section Two,
"Insider Trading and Tipping," are applicable to Nonmanagement Board
Members.
27
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
CONFLICT OF INTEREST - No Nonmanagement Board Member may recommend a
securities transaction for Mellon, Dreyfus or any Dreyfus-managed fund
without disclosing any interest he or she has in such securities or
issuer thereof (other than an interest in publicly traded securities
where the total investment is less than or equal to $25,000),
including:
- any direct or indirect beneficial ownership of any securities of such
issuer;
- any contemplated transaction by the Nonmanagement Board Member in such
securities;
- any position with such issuer or its affiliates; and
- any present or proposed business relationship between such issuer or
its affiliates and the Nonmanagement Board Member or any party in
which the Nonmanagement Board Member has a beneficial ownership
interest (see "Beneficial Ownership", Section Four, "Restrictions on
Transaction in Mellon Securities").
PORTFOLIO INFORMATION - No Nonmanagement Board Member may divulge the
current portfolio positions, or current or anticipated portfolio
transactions, programs or studies, of Mellon, Dreyfus or any
Dreyfus-managed fund, to anyone unless it is properly within his or
her responsibilities as a Nonmanagement Board Member to do so.
MATERIAL NONPUBLIC INFORMATION - No Nonmanagement Board Member may
engage in or recommend any securities transaction, for his or her own
benefit or for the benefit of others, including Mellon, Dreyfus or any
Dreyfus-managed fund, while in possession of material nonpublic
information. No Nonmanagement Board Member may communicate material
nonpublic information to others unless it is properly within his or
her responsibilities as a Nonmanagement Board Member to do so.
PRECLEARANCE FOR PERSONAL SECURITIES TRANSACTIONS -
Nonmanagement Board Members ARE PERMITTED to engage in personal
securities transactions without obtaining prior approval from the
Preclearance Compliance Officer.
28
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
PERSONAL SECURITY TRANSACTIONS REPORTS -
- "INDEPENDENT" MUTUAL FUND BOARD MEMBERS - Any "Independent" Mutual
Fund Board Members, as defined above, who effects a securities
transaction where he or she knew, or in the ordinary course of
fulfilling his or her official duties should have known, that during
the 15-day period immediately preceding or after the date of such
transaction, the same security was purchased or sold, or was being
considered for purchase or sale by Dreyfus (including any investment
company or other account managed by Dreyfus), are required to report
such personal securities transaction. In the event a personal
securities transaction report is required, it must be submitted to the
Preclearance Compliance Officer not later than ten days after the end
of the calendar quarter in which the transaction to which the report
relates was effected. The report must include the date of the
transaction, the title and number of shares or principal amount of the
security, the nature of the transaction (e.g., purchase, sale or any
other type of acquisition or disposition), the price at which the
transaction was effected and the name of the broker or other entity
with or through whom the transaction was effected. This reporting
requirement can be satisfied by sending a copy of the confirmation
statement regarding such transactions to the Preclearance Compliance
Officer within the time period specified. Notwithstanding the
foregoing, personal securities transaction reports are NOT required
with respect to any securities transaction described in "Exemption
from the Requirement to Preclear" in Part III.
- DREYFUS BOARD MEMBERS AND "INTERESTED" MUTUAL FUND BOARD MEMBERS -
Dreyfus Board Members and Mutual Fund Board Members who are
"interested persons" of an investment company, as defined by the
Investment Company Act of 1940, are required to report their personal
securities transactions. Personal securities transaction reports are
required with respect to any securities transaction other than those
described in "Exemptions from Requirement to Preclear" on Page 21.
Personal securities transaction reports are required to be submitted
to the Preclearance Compliance Officer not later than ten days after
the end of the calendar quarter in which the transaction to which the
report relates was effected. The report must include the date of the
transaction, the title and number of shares or principal amount of the
security, the nature of the transaction (e.g., purchase, sale or any
other type of acquisition or disposition), the price at which the
transaction was effected and the name of the broker or other entity
with or through whom the transaction was effected. This reporting
requirement can be satisfied by sending a copy of the confirmation
statement regarding such transactions to the Preclearance Compliance
Officer within the time period specified.
CONFIDENTIAL TREATMENT
THE PRECLEARANCE COMPLIANCE OFFICER WILL USE HIS OR HER BEST EFFORTS
TO ASSURE THAT ALL PERSONAL SECURITIES TRANSACTION REPORTS ARE TREATED
AS "PERSONAL AND CONFIDENTIAL." HOWEVER, SUCH DOCUMENTS WILL BE
AVAILABLE FOR INSPECTION BY APPROPRIATE REGULATORY AGENCIES AND OTHER
PARTIES WITHIN AND OUTSIDE MELLON AS ARE NECESSARY TO EVALUATE
COMPLIANCE WITH OR SANCTIONS UNDER THIS POLICY.
29
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
GLOSSARY
- -----------------------
DEFINITIONS
- APPROVAL - written consent or written notice of nonobjection.
- ASSOCIATE - any employee of Mellon Bank Corporation or its direct or
indirect subsidiaries; does not include outside consultants or
temporary help.
- BENEFICIAL OWNERSHIP - securities owned of record or held in the
associate's name are generally considered to be beneficially owned by
the associate.
Securities held in the name of any other person are deemed to be
beneficially owned by the associate if by reason of any contract,
understanding, relationship, agreement or other arrangement, the
associate obtains therefrom benefits substantially equivalent to those
of ownership, including the power to vote, or to direct the
disposition of, such securities. Beneficial ownership includes
securities held by others for the associate's benefit (regardless of
record ownership), e.g. securities held for the associate or members
of the associate's immediate family, defined below, by agents,
custodians, brokers, trustees, executors or other administrators;
securities owned by the associate, but which have not been transferred
into the associate's name on the books of the company; securities
which the associate has pledged; or securities owned by a corporation
that should be regarded as the associate's personal holding
corporation. As a natural person, beneficial ownership is deemed to
include securities held in the name or for the benefit of the
associate's immediate family, which includes the associate's spouse,
the associate's minor children and stepchildren and the associate's
relatives or the relatives of the associate's spouse who are sharing
the associate's home, unless because of countervailing circumstances,
the associate does not enjoy benefits substantially equivalent to
those of ownership. Benefits substantially equivalent to ownership
include, for example, application of the income derived from such
securities to maintain a common home, meeting expenses that such
person otherwise would meet from other sources, and the ability to
exercise a controlling influence over the purchase, sale or voting of
such securities. An associate is also deemed the beneficial owner of
securities held in the name of some other person, even though the
associate does not obtain benefits of ownership, if the associate can
vest or revest title in himself at once, or at some future time.
In addition, a person will be deemed the beneficial owner of a
security if he has the right to acquire beneficial ownership of such
security at any time (within 60 days) including but not limited to any
right to acquire: (1) through the exercise of any option, warrant or
right; (2) through the conversion of a security; or (3) pursuant to
the power to revoke a trust, nondiscretionary account or similar
arrangement.
30
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
With respect to ownership of securities held in trust, beneficial
ownership includes ownership of securities as a trustee in instances
where either the associate as trustee or a member of the associate's
"immediate family" has a vested interest in the income or corpus of
the trust, the ownership by the associate of a vested beneficial
interest in the trust and the ownership of securities as a settlor of
a trust in which the associate as the settlor has the power to revoke
the trust without obtaining the consent of the beneficiaries. Certain
exemptions to these trust beneficial ownership rules exist, including
an exemption for instances where beneficial ownership is imposed
solely by reason of the associate being settlor or beneficiary of the
securities held in trust and the ownership, acquisition and
disposition of such securities by the trust is made without the
associate's prior approval as settlor or beneficiary. "Immediate
family" of an associate as trustee means the associate's son or
daughter (including any legally adopted children) or any descendant of
either, the associate's stepson or stepdaughter, the associate's
father or mother or any ancestor of either, the associate's stepfather
or stepmother and his spouse.
To the extent that stockholders of a company use it as a personal
trading or investment medium and the company has no other substantial
business, stockholders are regarded as beneficial owners, to the
extent of their respective interests, of the stock thus invested or
traded in. A general partner in a partnership is considered to have
indirect beneficial ownership in the securities held by the
partnership to the extent of his pro rata interest in the partnership.
Indirect beneficial ownership is not, however, considered to exist
solely by reason of an indirect interest in portfolio securities held
by any holding company registered under the Public Utility Holding
Company Act of 1935, a pension or retirement plan holding securities
of an issuer whose employees generally are beneficiaries of the plan
and a business trust with over 25 beneficiaries.
Any person who, directly or indirectly, creates or uses a trust,
proxy, power of attorney, pooling arrangement or any other contract,
arrangement or device with the purpose or effect of divesting such
person of beneficial ownership as part of a plan or scheme to evade
the reporting requirements of the Securities Exchange Act of 1934
shall be deemed the beneficial owner of such security.
The final determination of beneficial ownership is a question to be
determined in light of the facts of a particular case. Thus, while the
associate may include security holdings of other members of his
family, the associate may nonetheless disclaim beneficial ownership of
such securities.
- "CHINESE WALL" POLICY - procedures designed to restrict the flow of
information within Mellon from units or individuals who are likely to
receive material nonpublic information to units or individuals who
trade in securities or provide investment advice. (see pages 12-14).
- CORPORATION - Mellon Bank Corporation.
- DREYFUS - The Dreyfus Corporation and its subsidiaries.
- DREYFUS ASSOCIATE - any employee of Dreyfus; does not include outside
consultants or temporary help.
31
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
- EXEMPT SECURITIES - Exempt Securities are defined as:
- securities issued or guaranteed by the United States government
or agencies or instrumentalities;
- bankers' acceptances;
- bank certificates of deposit and time deposits;
- commercial paper;
- repurchase agreements; and
- securities issued by open-end investment companies.
- GENERAL COUNSEL - General Counsel of Mellon Bank Corporation or any
person to whom relevant authority is delegated by the General Counsel.
- INDEX FUND - an investment company which seeks to mirror the
performance of the general market by investing in the same stocks (and
in the same proportion) as a broad-based market index.
- INITIAL PUBLIC OFFERING (IPO) - the first offering of a company's
securities to the public.
- INVESTMENT COMPANY - a company that issues securities that represent
an undivided interest in the net assets held by the company. Mutual
funds are investment companies that issue and sell redeemable
securities representing an undivided interest in the net assets of the
company.
- MANAGER OF CORPORATE COMPLIANCE - - the associate within the Risk
Management and Compliance Department of Mellon Bank Corporation who is
responsible for administering the Confidential Information and
Securities Trading Policy, or any person to whom relevant authority is
delegated by the Manager of Corporate Compliance.
- MELLON - Mellon Bank Corporation and all of its direct and indirect
subsidiaries.
- NAKED OPTION - an option sold by the investor which obligates him or
her to sell a security which he or she does not own.
- NONDISCRETIONARY TRADING ACCOUNT - an account over which the
associated person has no direct or indirect control over the
investment decision-making process.
- OPTION - a security which gives the investor the right but not the
obligation to buy or sell a specific security at a specified price
within a specified time.
- PRECLEARANCE COMPLIANCE OFFICER - a person designated by the Manager
of Corporate Compliance, to administer, among other things,
associates' preclearance request for a specific business unit.
- PRIVATE PLACEMENT - an offering of securities that is exempt from
registration under the Securities Act of 1933 because it does not
constitute a public offering.
- SENIOR MANAGEMENT COMMITTEE - the Senior Management Committee of
Mellon Bank Corporation.
- SHORT SALE - the sale of a security that is not owned by the seller at
the time of the trade.
32
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
INDEX OF EXHIBITS
- ---------------------------
EXHIBIT A SAMPLE REPORT TO MANAGER OF CORPORATE COMPLIANCE
EXHIBIT B SAMPLE INSTRUCTION LETTER TO BROKER
EXHIBIT C PRECLEARANCE REQUEST FORM
EXHIBIT D PERSONAL SECURITIES HOLDINGS FORM
33
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
EXHIBIT A
- --------------------------------
SAMPLE REPORT TO MANAGER OF CORPORATE COMPLIANCE
- -------------------------------------------------------------------------------
MELLON INTEROFFICE
MEMORANDUM
Date: From: Associate
To: Manager, Corporate Compliance Dept:
Aim #:
Aim #: 151-4342 Phone:
Fax:
- -------------------------------------------------------------------------------
RE: REPORT OF SECURITIES TRADE
Type of Associate: Insider Risk
--------- Investment
--------- Other
---------
Type of Security: Mellon Bank Corporation
--------- Mellon Bank Corporation -- optional cash
--------- purchases under Dividend Reinvestment
and Common Stock Purchase Plan
--------- Mellon Bank Corporation -- exercise of an
employee stock option
Attached is a copy of the confirmation slip for a securities trade I
engaged in on _____________________, 19xx.
or
On ___________________, 19xx, I (purchased/sold) ____________________
shares of ___________________________ through
(broker). I will arrange to have a copy of the confirmation slip for
this trade delivered to you as soon as possible.
- -------------------------------------------------------------------------------
34
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
EXHIBIT B1
- --------------------------------
FOR NON-DREYFUS ASSOCIATES
- -------------------------------------------------------------------------------
Date
Broker ABC
Street Address
City, State ZIP
Re: John Smith & Mary Smith
Account No. xxxxxxxxxxxxx
In connection with my existing brokerage accounts at your firm noted
above, please be advised that the Risk Management and Compliance
Department of Mellon Bank should be noted as an "Interested Party" with
respect to my accounts. They should, therefore, be sent copies of all
trade confirmations and account statements relating to my account.
Please send the requested documentation ensuring the account holder's
name appears on all correspondence to:
Manager, Corporate Compliance
Mellon Bank
P.O. Box 3130
Pittsburgh, PA 15230-3130
Thank you for your cooperation in this request.
Sincerely yours,
Associate
cc: Manager, Corporate Compliance (151-4342)
- -------------------------------------------------------------------------------
35
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
EXHIBIT B2
- ----------------------------
FOR DREYFUS ASSOCIATES
- -------------------------------------------------------------------------------
Date
Broker ABC
Street Address
City, State ZIP
Re: John Smith & Mary Smith
Account No. xxxxxxxxxxxxx
In connection with my existing brokerage accounts at your firm noted
above, please be advised that the Risk Management and Compliance
Department of Dreyfus Corporation should be noted as an "Interested
Party" with respect to my accounts. They should, therefore, be sent
copies of all trade confirmations and account statements relating to
my account.
Please send the requested documentation ensuring the account holder's
name appears on all correspondence to:
Compliance Officer at The Dreyfus Corporation
200 Park Avenue
Legal Department
New York, NY 10166
Thank you for your cooperation in this request.
Sincerely yours,
Associate
cc: Dreyfus Compliance
- -------------------------------------------------------------------------------
36
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
EXHIBIT C1
- ----------------------
PRECLEARANCE REQUEST FORM NON DREYFUS ASSOCIATES
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
To: Manager, Corporate Compliance 151-4342 (All Insider and Other
Associates) Designated Preclearance Compliance Officer (All Investment
Associates Excluding Dreyfus)
- -------------------------------------------------------------------------------
Associate Name: Title: Date:
- -------------------------------------------------------------------------------
Phone #: AIM #: Social Security #: Department:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
ACCOUNT INFORMATION
- -------------------------------------------------------------------------------
Account Name: Account Number: Name of Broker/Bank:
- -------------------------------------------------------------------------------
Relationship to registered owner(s) (if other than associate)
- -------------------------------------------------------------------------------
I hereby request approval to execute the following trade in the above account:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TRANSACTION DETAIL
- -------------------------------------------------------------------------------
Buy: Sell: Security/Contract: No. of Shares:
- -------------------------------------------------------------------------------
If sale, Margin Transaction: Initial Public Offering: Private Placement:
date
acquired: / /Yes / /Yes / /Yes
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
DISCLOSURE STATEMENT
- -------------------------------------------------------------------------------
I hereby represent that, to the best of my knowledge,
neither I nor the registered account holder is (1) attempting to benefit
personally from any existing business relationship between the issuer and Mellon
or any Mellon-related fund or affiliate; (2) engaging in any manipulative or
deceptive trading activity; (3) in possession of any material non-public
information concerning the security to which is request relates.
- -------------------------------------------------------------------------------
Associate Signature: Date:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
COMPLIANCE OFFICER USE ONLY
- -------------------------------------------------------------------------------
Approved: Disapproved: Authorized Signatory: Date:
- -------------------------------------------------------------------------------
Comments:
- -------------------------------------------------------------------------------
Note: This preclearance will lapse at the end of the day on , 19 .
------------ ---
If you decide not to effect the trade, please notify me.
- -------------------------------------------------------------------------------
Date: By:
- -------------------------------------------------------------------------------
37
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
EXHIBIT C2
- -----------------------
PRECLEARANCE REQUEST FORM DREYFUS ASSOCIATES ONLY
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TO: Dreyfus Compliance Officer
- -------------------------------------------------------------------------------
Associate Name: Title: Date:
- -------------------------------------------------------------------------------
Phone #: AIM #: Social Security #: Department:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
ACCOUNT INFORMATION
- -------------------------------------------------------------------------------
Account Name: Account Number: Name of Broker/Bank:
- -------------------------------------------------------------------------------
Relationship to registered owner(s) (if other than associate)
- -------------------------------------------------------------------------------
I hereby request approval to execute the following trade in the above account:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TRANSACTION DETAIL
- -------------------------------------------------------------------------------
Buy: Sell: Security/Contract: Symbol:
- -------------------------------------------------------------------------------
Amount: Current Market Price: If sale, date acquired: Margin Transaction:
- -------------------------------------------------------------------------------
Is this a New Issue? Is this a Private Placement?
/ / Yes / / No / / Yes / / No
- -------------------------------------------------------------------------------
Reason for Transaction, identify source:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
DISCLOSURE STATEMENT
- -------------------------------------------------------------------------------
I hereby represent that, to the best of my knowledge,
neither I nor the registered account holder is (1) attempting to benefit
personally from any existing business relationship between the issuer and Mellon
or any Mellon-related fund or affiliate; (2) engaging in any manipulative or
deceptive trading activity; (3) in possession of any material non-public
information concerning the security to which is request relates.
- -------------------------------------------------------------------------------
Associate Signature: Date:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
COMPLIANCE OFFICER USE ONLY
- -------------------------------------------------------------------------------
Approved: Disapproved: Authorized Signatory: Date:
- -------------------------------------------------------------------------------
Comments:
- -------------------------------------------------------------------------------
Note: This preclearance will lapse at the end of the day on , 19 .
---------- ----
If you decide not to effect the trade, please notify me.
- -------------------------------------------------------------------------------
Date: By:
- -------------------------------------------------------------------------------
38
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
EXHIBIT D1
- -------------------------------------
Return to: Manager, Corporate Compliance
Mellon Bank
P.O. Box 3130
Pittsburgh, PA 15230-3130
STATEMENT OF SECURITY HOLDINGS
As of
------------------------------
1. List of all securities in which you, your immediate family, any other
member of your immediate household, or any trust or estate of which you or
your spouse is a trustee or fiduciary or beneficiary, or of which your
minor child is a beneficiary, or any person for whom you direct or effect
transactions under a power of attorney or otherwise, maintain a beneficial
ownership - (see Glossary in Policy). If none, write NONE. Securities
issued or guaranteed by the U.S. government or its agencies or
instrumentalities, bankers' acceptances, bank certificates of deposit and
time deposits, commercial paper, repurchase agreements and shares of
registered investment companies need NOT be listed. IF YOUR LIST IS
EXTENSIVE, PLEASE ATTACH A COPY OF THE MOST RECENT STATEMENT FROM YOUR
BROKER(S), RATHER THAN LIST THEM ON THIS FORM.
- ------------------------------------------------------------------------------
NAME OF SECURITY TYPE OF SECURITY AMOUNT OF SHARES
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
2. List the names and addresses of any broker/dealers holding accounts in
which you have a beneficial interest, including the name of your registered
representative (if applicable), the account registration and the relevant
account numbers. If none, write NONE.
- -------------------------------------------------------------------------------
BROKER/ ADDRESS NAME OF ACCOUNT ACCOUNT
DEALER REGISTERED REGISTRATION NUMBER(S)
REPRESENTATIVE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
I certify that the statements made by me on this form are true, complete and
correct to the best of my knowledge and belief, and are made in good faith. I
acknowledge I have read, understood and complied with the Confidential
Information and Securities Trading Policy.
- -------------------------------------------------------------------------------
Date: Printed Name:
- -------------------------------------------------------------------------------
Signature:
- -------------------------------------------------------------------------------
39
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
EXHIBIT D2
- --------------------------
Return to: Compliance Officer at the Dreyfus Corporation
200 Park Avenue
Legal Department
New York, NY 10166
STATEMENT OF SECURITY HOLDINGS
As of
----------------------------
1. List of all securities in which you, your immediate family, any other
member of your immediate household, or any trust or estate of which you or
your spouse is a trustee or fiduciary or beneficiary, or of which your
minor child is a beneficiary, or any person for whom you direct or effect
transactions under a power of attorney or otherwise, maintain a beneficial
interest. If none, write NONE. Securities issued or guaranteed by the U.S.
government or its agencies or instrumentalities, bankers' acceptances, bank
certificates of deposit and time deposits, commercial paper, repurchase
agreements and shares of registered investment companies need NOT be
listed. IF YOUR LIST IS EXTENSIVE, PLEASE ATTACH A COPY OF THE MOST RECENT
STATEMENT FROM YOUR BROKER(S), RATHER THAN LIST THEM ON THIS FORM.
- -------------------------------------------------------------------------------
NAME OF SECURITY TYPE OF SECURITY AMOUNT OF SHARES
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
2. List the names and addresses of any broker/dealers holding accounts in
which you have a beneficial interest, including the name of your registered
representative (if applicable), the account registration and the relevant
account numbers. If none, write NONE.
- -------------------------------------------------------------------------------
BROKER/ ADDRESS NAME OF ACCOUNT ACCOUNT
DEALER REGISTERED REGISTRATION NUMBER(S)
REPRESENTATIVE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
I certify that the statements made by me on this form are true, complete and
correct to the best of my knowledge and belief, and are made in good faith. I
acknowledge I have read, understood and complied with the Confidential
Information and Securities Trading Policy.
- -------------------------------------------------------------------------------
Date: Printed Name:
- -------------------------------------------------------------------------------
Signature:
- -------------------------------------------------------------------------------
40
CONFIDENTIAL INFORMATION AND SECURITIES TRADING POLICY-019 04/11/00
<PAGE>
NICHOLAS-APPLEGATE
===============================================================================
- -------------------------------------------------------------------------------
CODE OF ETHICS
AND CONDUCT
- -------------------------------------------------------------------------------
<PAGE>
NICHOLAS-APPLEGATE
CAPITAL MANAGEMENT
===============================================================================
NICHOLAS-APPLEGATE
SECURITIES
===============================================================================
NICHOLAS-APPLEGATE
INSTITUTIONAL FUNDS
<PAGE>
MESSAGE FROM THE MANAGING PARTNER
Nicholas-Applegate, quite simply, does not exist without our clients. While it's
true we are an investment management firm, known for providing excellent
investment returns and client service, a large part of our success is built on
our reputation for integrity and professionalism. Our clients place not only
their money, but also their trust with us when they hire us. It is up to us as a
firm, and each one of us individually, to ensure that trust is upheld. Without
it, we would not have a single client, regardless of our investment returns.
With this in mind, the firm has long had a formal Code of Ethics in place.
Every employee commits to follow this Code when he/she joins the firm, and
we, as a firm, are committed to the principles embodied by the Code. The
driving principle is actually pretty easy to express: "Our clients come
first." Everything, really, flows from that simple statement. When you review
and sign the attached Code of Ethics, I'd like you to keep these principles
in mind and know that they are supported at our firm from the top down. I'd
also like you to recognize that ultimately the Code of Ethics is really just
an expression about the way we, as a firm, want to do business, and that it
is our responsibility individually, and as a firm, to ensure the Code is
followed in spirit, as well as word. The Code can't cover every individual
situation that may come up, so we must all use our best efforts to apply the
principles of the Code in our everyday business. We, and our clients, should
expect nothing less.
Art Nicholas
i
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
TABLE OF CONTENTS
- -------------------------------------------------------------------------------
<S> <C>
A. DEFINITIONS ........................................................A-1
I. INTRODUCTION & OVERVIEW...............................................1
II. PERSONS COVERED BY THIS CODE
a. EMPLOYEES & COVERED PERSONS.......................................3
b. OUTSIDE FUND DIRECTORS /TRUSTEES..................................3
c. THE ADMINISTRATOR ................................................4
.
III. PERSONAL SECURITIES TRANSACTIONS
a. COVERED SECURITIES & TRANSACTIONS.................................5
b. EXEMPT SECURITIES & TRANSACTIONS..................................5
IV. PROCEDURES FOR TRADING SECURITIES
A. PRE-CLEARANCE.....................................................7
B. VIOLATIONS........................................................8
C. HOLDING PERIOD RESTRICTION.......................................10
D. BLACKOUT PERIOD..................................................10
E. DE MINIMIS TRANSACTIONS..........................................10
F. INITIAL PUBLIC OFFERINGS ("IPOS") & PRIVATE PLACEMENTS...........11
G. FRONT-RUNNING....................................................11
H. INSIDE INFORMATION...............................................11
V. REPORTS & CERTIFICATIONS REGARDING PERSONAL SECURITIES TRANSACTIONS
A. PERSONAL HOLDINGS REPORTS........................................13
B. MONTHLY TRANSACTION & GIFT REPORTS...............................13
C. DUPLICATE BROKERAGE STATEMENTS & CONFIRMATIONS...................14
D. CERTIFICATION OF COMPLIANCE......................................14
VI. POTENTIAL CONFLICT OF INTEREST ISSUES
a. SERVICE ON BOARDS OF OTHER COMPANIES.............................15
b. GIFTS ...........................................................15
c. GIFT PRE-CLEARANCE...............................................15
d. GIFT VIOLATIONS .................................................16
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
TABLE OF CONTENTS (CONT'D)
- -------------------------------------------------------------------------------
<S> <C>
VII. VIOLATIONS OF THE CODE ..............................................17
VIII. ANNUAL BOARD REVIEW .................................................18
IX. ADMINISTRATION & CONSTRUCTION .......................................19
X. AMENDMENTS & MODIFICATIONS...........................................20
- --------------------------------------------------------------------------------
</TABLE>
POLICIES & PROCEDURES - INSIDER TRADING POLICY .................. APPENDIX I
EXAMPLES OF BENEFICIAL OWNERSHIP ............................... APPENDIX II
PERSONAL TRADING RESTRICTION SUMMARY .......................... APPENDIX III
EXCEPTIONS TO BAN ON SHORT-TERM TRADING ........................ APPENDIX IV
CODE OF ETHICS SIGNATURE PAGES................................... APPENDIX V
iii
<PAGE>
- --------------------------------------------------------------------------------
DEFINITIONS
- --------------------------------------------------------------------------------
THE FOLLOWING DEFINITIONS APPLY TO THIS CODE OF ETHICS:
NACM Nicholas-Applegate Capital Management, Inc., a
CA LP
NAS Nicholas-Applegate Securities
NAIF OR FUNDS Nicholas-Applegate Institutional Funds
NA Nicholas-Applegate (I.E., NACM, NAS and NAIF)
CODE NA Code of Ethics
EMPLOYEES All officers, partners and employees of NACM
and NAS, well as part-time employees,
consultants, temps and interns after one month
COVERED PERSONS Any Employee and any relative by blood or
marriage living in the Employee's household or
any person who holds an account that names
Employee as a beneficiary or otherwise
INVESTMENT PERSONNEL Trading Desk personnel, portfolio managers and
financial analysts
ADMINISTRATOR Brown Brothers Harriman - Administrator of the
Funds
ADVISORY CLIENTS Shareholders of funds, institutional clients
and any other person or entity whom NA
provides investment advisory services
EXEMPT TRANSACTIONS Any transaction that does not require
pre-clearance by NA's Compliance Department
prior to execution (E.G., open-end mutual
funds, U.S, government securities and named
indices as listed in the Code at APPENDIX IV)
TRUSTEES Trustees of the Funds
BENEFICIAL OWNERSHIP For purposes of this Code, "beneficial
ownership" means any interest in a security
for which a Covered Person can directly or
indirectly receive a monetary benefit,
including the right to buy or sell a security,
to direct the purchase or sale of a security,
or to vote or direct the voting of a security.
Please refer to APPENDIX II for additional
examples of beneficial ownership
A-1
<PAGE>
NON-EMPLOYEE TRUSTEES Trustees of the Funds who are not Employees of
NACM or NAS (including employees of the
Administrator)
PERSONAL SECURITIES Any trade in debt or equity securities
TRANSACTION executed on a stock market, or other
securities not defined as "exempt securities"
under the NA Code of Ethics, by a Covered
Person. This includes all futures, options,
warrants, short-sells, margin calls, or other
instrument of investment relating to an equity
security
EXEMPT SECURITIES Securities, which, under the Code, do not
require pre-clearance authorization by the
Compliance Department (see page 11 and
APPENDIX IV)
BLUEFORM Monthly Personal Securities Transaction and
Gift Report
INSIDER Persons who are officers, directors, employees
and spouse and anyone else who is privy to
inside information
INSIDER TRADING Buying or selling of a security while in
possession of material, non-public information
or anyone who has communicated such
information in connection with a transaction
that results in a public trade or information
service or medium
NON-PUBLIC INFORMATION Any information that is not made known via a
public magazine, newspaper or other public
document
ACCESS PERSON Any Employee of NA, including temporary
employees (if here more than one month),
interns and consultants (working on NA
premises)
OPEN-END INVESTMENT COMPANIESS Funds that continuously offer new shares and
(OPEN-END MUTUAL FUNDS) redeem outstanding shares at NAV on any
business day. Shares are purchased directly
from the distributor of the funds
CLOSED-END INVESTMENT Funds whose shares traded on the
COMPANIES secondarymarket with most being listed on
stock exchanges. New shares are not
continuously offered, nor are outstanding
shares redeemable.
A-2
<PAGE>
CODE OF ETHICS AND CONDUCT
NICHOLAS-APPLEGATE CAPITAL MANAGEMENT
NICHOLAS-APPLEGATE SECURITIES
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
REVISED AS OF MARCH 20, 2000
- -------------------------------------------------------------------------------
I. INTRODUCTION & OVERVIEW
- -------------------------------------------------------------------------------
Nicholas-Applegate Capital Management ("NACM"), Nicholas-Applegate
Securities ("NAS") and Nicholas-Applegate Institutional Funds ("NAIF")
(collectively, "NA") have developed and maintain a reputation for
integrity and high ethical standards. Therefore, it is essential not
only that NA and its employees comply with relevant federal and state
securities laws, but that we also maintain high standards of personal
and professional conduct. NA's Code of Ethics and Conduct (the "Code")
is designed to help ensure that we conduct our business in a manner
consistent with these high standards.
As a registered investment adviser, NA and its employees owe a
fiduciary duty to our clients that requires each of us to place the
interests of our clients ahead of our own. A critical component of
meeting our fiduciary duty is to avoid potential conflicts of interest.
Accordingly, you must avoid all activities, interests and relationships
that interfere or appear to interfere with making decisions in the best
interests of the shareholders of NAIF (or "Funds") and any other person
or entity to which NA provides investment advisory services (together,
"Advisory Clients").
Please bear in mind a conflict of interest can arise even if there is
no financial loss to Advisory Clients and regardless of the employee's
motivation. Many potential conflicts of interest can arise in
connection with employee personal trading and related activities. The
Code is designed to address and prevent potential conflicts of interest
pertaining to personal trading and related activities and is based on
the following principles:
1) WE MUST AT ALL TIMES PLACE THE INTERESTS OF OUR ADVISORY CLIENTS
FIRST. In other words, as a fiduciary, you must scrupulously
avoid serving your own personal interests ahead of the interests
of NA Advisory Clients.
2) We must make sure that all PERSONAL SECURITIES TRANSACTIONS ARE
CONDUCTED CONSISTENT WITH THE CODE and in such a manner as to
avoid any actual or potential conflicts of interest or any abuse
of an individual's position of trust and responsibility.
3) WE MUST NOT TAKE INAPPROPRIATE ADVANTAGE OF OUR POSITIONS. The
receipt of investment opportunities, perquisites, or gifts from
persons seeking business with NA could call into question the
exercise of your independent judgment.
1
The Code contains policies and procedures relating to personal trading by
Covered Persons, as well as Trustees of the Funds.
- -------------------------------------------------------------------------------
YOU MUST BECOME FAMILIAR
WITH AND ABIDE BY THE CODE
- -------------------------------------------------------------------------------
Compliance with the Code is a condition of your employment with NA.
Violations of the Code will be taken seriously and will result in sanctions
against the violator, up to and including termination of employment.
As with all policies and procedures, the Code was designed to apply to a
myriad of circumstances and conduct. However, this Code is not intended to
be all-inclusive as no policy can anticipate every potential conflict of
interest that can arise in connection with personal trading.
- -------------------------------------------------------------------------------
YOU ARE EXPECTED TO ABIDE NOT ONLY BY THE LETTER OF THE CODE,
BUT ALSO BY THE SPIRIT OF THE CODE
- -------------------------------------------------------------------------------
Whether or not a specific provision of the Code addresses a particular
situation, you must conduct your activities in accordance with the general
principles contained in the Code and in a manner that is designed to avoid
any ACTUAL OR POTENTIAL conflicts of interest. NA reserves the right, when
it deems necessary in light of particular circumstances, to impose more
stringent requirements on those persons subject to the Code, or to grant
exceptions to the Code.
Because governmental regulations and industry standards relating to
personal trading and potential conflicts of interest can evolve over time,
NA reserves the right to modify any or all of the policies and procedures
set forth in the Code. If NA revises the Code, the Director of Compliance
will provide you with written notification of the changes. You must
familiarize yourself with any modifications to the Code.
IF YOU HAVE ANY QUESTIONS ABOUT ANY ASPECT OF THE CODE, OR IF YOU HAVE
QUESTIONS REGARDING APPLICATION OF THE CODE IN A PARTICULAR SITUATION,
CONTACT THE COMPLIANCE DEPARTMENT.
2
<PAGE>
- --------------------------------------------------------------------------------
II. PERSONS COVERED BY THIS CODE
- --------------------------------------------------------------------------------
A. EMPLOYEES & COVERED PERSONS
The policies and procedures set forth in the Code apply to all officers,
principals and employees of NACM and NAS (collectively, "Employees"). The
Code also applies to all temporary employees, consultants and interns (if
here more than one month) who work for NA on premises.
The policies and procedures set forth in the Code also apply to all members
of an Employee's immediate family which, for purposes of the Code, refers
to ANY RELATIVE BY BLOOD OR MARRIAGE LIVING IN THE EMPLOYEE'S HOUSEHOLD
(together with Employees, "Covered Persons").
- -------------------------------------------------------------------------------
THE CODE ALSO APPLIES TO ACCOUNTS IN WHICH THE
EMPLOYEE IS NAMED AS A BENEFICIARY, TRUSTEE OR
IS OTHERWISE ABLE TO EXERCISE INVESTMENT CONTROL
- -------------------------------------------------------------------------------
B. OUTSIDE FUND DIRECTORS/TRUSTEES
Special rules apply to Fund Trustees who are not employees of NACM or NAS
("Non-Employee Trustees"). Specifically, Non-Employee Trustees are NOT
subject to the:
- 3-day blackout period;
- prohibition on initial public offerings;
- restrictions on private placements;
- ban on short-term trading profits;
- gift restrictions; or
- restriction on service as a director.
Further, a Non-Employee Trustee is not required to pre-clear personal
securities transactions PROVIDED he or she did not have knowledge of any
current or pending transactions in the Security that have been completed
within the last fifteen (15) calendar days immediately preceding the date
of the transaction.
A Non-Employee Trustee is not required to submit quarterly personal
securities transaction reports, unless he or she knew, or should have
known, in the ordinary course of the fulfillment of his or her official
duties as a trustee of one of the Funds, that during the 15-day period
immediately preceding or following the date of a transaction in a security
by the Non-Employee Trustee that such security was purchased or sold, or
was considered for a purchase or sale, by a Fund or by NA for an Advisory
Client. Non-Employee Trustees also are not required to submit annual
portfolio holdings reports to NA.
3
<PAGE>
C. THE ADMINISTRATOR
Officers of the Fund who are officers or employees of the Fund's
Administrator are exempt from all provisions of this Code to the extent
that the Administrator has adopted reasonable written policies and
procedures regarding personal securities transactions by its employees.
4
<PAGE>
- -------------------------------------------------------------------------------
III. PERSONAL SECURITIES TRANSACTIONS
- -------------------------------------------------------------------------------
The firm's policies and procedures set forth in the Code regarding personal
investing apply to ALL personal securities transactions by Covered Persons,
UNLESS a transaction is in an Exempt Security or the transaction is an
Exempt Transaction as defined below.
A. COVERED SECURITIES & TRANSACTIONS
Personal securities transactions subject to the Code include, but are not
limited to:
- equity securities including common and preferred stock, except as
otherwise exempted below;
- investment and non-investment grade debt securities;
- investments convertible into, or exchangeable for, stock or debt
securities;
- any derivative instrument relating to any of the above securities,
including options, warrants and futures;
- any interest in a partnership investment in any of the foregoing; and
- shares of closed-end investment companies.
B. EXEMPT SECURITIES & TRANSACTIONS
The Code pre-clearance procedures and reporting requirements do not apply
to the following types of securities and transactions, UNLESS SPECIFIED
OTHERWISE, which are referred to as "Exempt Securities" and "Exempt
Transactions":
EXEMPT SECURITIES
1. Shares of registered open-end mutual funds and money market funds;
2. Treasury bonds, treasury notes, treasury bills, U.S. Savings Bonds,
and other instruments issued by the U.S. government or its agencies or
instrumentalities;
3. Debt instruments issued by a banking institution, such as bankers'
acceptances and bank certificates of deposit; (this does not exempt
corporate bonds or high yield bonds)
4. Commercial paper;
5. Municipal bonds; or
6. Stock indices; (SEE APPENDIX IV)
EXEMPT TRANSACTIONS
1. Transactions in an account over which a Covered Person has no direct
or indirect influence or control; or in any account held by a Covered
Person which is managed on a discretionary basis by a person other
than the Covered Person and, with respect to which the Covered Person
does not influence or control the transactions;
5
<PAGE>
2. Transactions that are non-voluntary on the part of the Covered Person
(THESE TRANSACTIONS MUST BE REPORTED ON THE MONTHLY REPORT OR "BLUE
FORM") (E.G., bond calls, stock splits, spin-offs, etc.);
3. Purchases that are part of an automatic dividend reinvestment plan.
However, your initial purchase into a DRIP program must be pre-cleared
with Compliance and reported on your first monthly report after
starting the program. If you ever contribute more than the automatic
deduction to this plan, you must pre-clear this transaction as if it
were a non-exempt transaction;
4. Purchases as a result of the exercise by a Covered Person of rights
issued pro rata to all holders of a class of securities, to the extent
that such rights were acquired from the issuer, and the sale of such
rights;
5. Other similar circumstances as determined by the Director of
Compliance or General Counsel; or
6. Transactions in options or futures contracts on commodities,
currencies or interest rates.
Additionally, transactions in accounts over which the Covered Person has no
beneficial ownership, nor exercises direct or indirect influence or
control, may be excluded from the Code (and treated as Exempt
Transactions).
IF YOU HAVE ANY QUESTIONS ABOUT WHETHER A PARTICULAR TRANSACTION QUALIFIES
AS AN EXEMPT TRANSACTION, CONTACT THE COMPLIANCE DEPARTMENT OR THE GENERAL
COUNSEL.
6
<PAGE>
- -------------------------------------------------------------------------------
IV. PROCEDURES FOR TRADING SECURITIES
- -------------------------------------------------------------------------------
Covered Persons wishing to purchase or sell securities for their own
accounts must follow certain procedures designed to avoid actual or
potential conflicts of interest. These procedures include pre-clearing the
transaction, holding the security for at least the required minimum length
of time, and adhering to a blackout period around Advisory Client trades.
Please note that these procedures DO NOT APPLY TO EXEMPT SECURITIES AND
EXEMPT TRANSACTIONS, as described above.
A. PRE-CLEARANCE
As a Covered Person, you must submit an Employee Personal Request (an
electronic pre-clearance form), which can be found on the NA intranet site
at HOME.NACM.COM UNDER TRADING/MONTHLY REPORTS AND FORMS - CTI iTRADE,
prior to the purchase or sale of securities for your own account or any
accounts over which you have control or have a beneficial interest. In
addition, Investment Personnel must have all transactions approved by the
Chief Investment Officer ("CIO") (or investment partner in the CIO's
absence). Requests received without the required signature will not be
cleared.
You must submit pre-clearance for ALL PERSONAL SECURITIES transactions,
unless the transaction qualifies as an Exempt or De Minimis Transaction
(described below). All other purchase or sale transactions, including
transactions in equity securities of up to 1,000 shares or $10,000 that are
NOT listed on a domestic exchange or have market capitalization of LESS
THAN $2 BILLION, must be pre-cleared prior to execution.
- -------------------------------------------------------------------------------
TRANSACTIONS IN EQUITY SECURITIES UNDER 1000 SHARES
OR $10,000, WITH A MARKET CAPITALIZATION OF
OVER $2 BILLION DO NOT NEED PRE-CLEARANCE
- -------------------------------------------------------------------------------
However, if you are buying 500 shares or less, the security is on NYSE or
the issuer's market capitalization is over $500 million the trade will be
approved even if NA is active in the security.
NA will treat the pre-clearance process as confidential and will not
disclose the information given during the pre-clearance process, except as
required by law or for applicable business purposes.
As a Covered Person, you cannot execute the requested transaction until you
receive authorization from the Compliance Department to do so.
Pre-clearance requests will be processed by the Compliance Department as
quickly as possible. PLEASE REMEMBER THAT PRE-CLEARANCE APPROVAL IS NOT
AUTOMATICALLY GRANTED FOR EVERY TRADE.
7
<PAGE>
PRIORITY PRE-CLEARANCE WINDOW
Compliance Department personnel will give priority attention to any
pre-clearance request submitted prior to 9:00 a.m. In these cases, you will
normally receive notification of your pre-clearance approval or denial
within 10-15 minutes. Pre-clearance requests submitted after 9:00 a.m. will
be processed in as timely a manner as possible, but other Compliance
Department duties may delay the response for two (2) hours or more
(depending on department priorities) after submission.
PRE-CLEARANCE PERIOD
Pre-clearance must be obtained on the date of the proposed transaction.
Pre-clearance approval for domestic Personal Securities Transactions
effected through a broker-dealer is the day it is pre-cleared up until the
"market open" the next business day (6:30 a.m. PT, except holidays) after
the day that pre-clearance was obtained.
- -------------------------------------------------------------------------------
IF YOU DECIDE NOT TO EXECUTE THE TRANSACTION ON THE DAY YOUR
PRE-CLEARANCE APPROVAL IS GIVEN, OR YOUR ENTIRE TRADE IS NOT
EXECUTED, YOU MUST REQUEST PRE-CLEARANCE AGAIN AT SUCH
TIME AS YOU DECIDE TO EXECUTE THE TRADE
- -------------------------------------------------------------------------------
Pre-clearance approval is valid only for the particular security and
quantity indicated on the Form. For example, if you wish to increase the
size of the transaction, you must submit a new pre-clearance request and
receive a new pre-clearance approval. However, you may decrease the size of
the transaction without obtaining new authorization, but should inform
Compliance if this is done.
Failure to obtain pre-clearance for a personal securities transaction is a
serious breach of NA's Code. If you fail to obtain pre-clearance approval
for your personal securities transaction, you will be subject to
disciplinary action, up to and including termination of employment. You may
also be required to cancel the trade and bear any losses that occur. You
may also be required to disgorge any profits realized on the unauthorized
trade and donate them to a charity designated by NA (see below).
B. VIOLATIONS
1. MONTHLY REPORTING VIOLATIONS
You must complete your Personal Security Transaction and Gift Report
("Blueform") via the intranet site by the end of the 10th day of each
month, regardless of whether you had any trading or gift activity for that
month.
8
<PAGE>
- -------------------------------------------------------------------------------
YOU MUST SUBMIT YOUR BLUEFORM
BY THE 10TH OF EVERY MONTH
- -------------------------------------------------------------------------------
The Executive Committee member with oversight of your department may grant
exceptions to this requirement for legitimate business or personal reasons.
However, you should make every reasonable effort to submit your report in a
timely manner.
- -------------------------------------------------------------------------------
IF YOU FAIL TO REMIT YOUR BLUEFORM ON TIME,
YOU WILL BE FINED $50 FOR THE FIRST DAY LATE & $10 FOR
EACH ADDITIONAL DAY THE REPORT IS LATE.
- -------------------------------------------------------------------------------
2. TRADING VIOLATIONS
Any trading-related violation of this Code, including failure to properly
pre-clear a non-exempt personal trade, etc., will incur the following
sanctions, IN ADDITION TO disgorging any profits on personal trades that
conflict with NA client transactions:
- -------------------------------------------------------------------------------
FIRST VIOLATION
- -------------------------------------------------------------------------------
- A fine of 0.5% of base salary up to $500;
- Meet with Department Head and the Director of Compliance to
discuss and re-sign the Code of Ethics.
- -------------------------------------------------------------------------------
SECOND VIOLATION (WITHIN 12 MONTHS)
- -------------------------------------------------------------------------------
- A fine of 1% of base salary up to $1,000;
- Meet with Department Head and the Director of Compliance to
discuss and re-sign the Code of Ethics;
- Written warning to personnel file;
- -------------------------------------------------------------------------------
THIRD VIOLATION (WITHIN 12 MONTHS)
- -------------------------------------------------------------------------------
- A fine of 2% of base salary up to $2,000;
- Meet with Department Head and the Director of Compliance to
discuss and re-sign the Code of Ethics;
- Written warning to personnel file;
- Prohibition from trading personally for a specific period of time
(E.G., 6 months to 1 year) except to close out current positions;
- May result in termination of employment with NA.
All fines will be paid to a charity of NA's choice: currently the United
Way. Checks will be submitted to Compliance and forwarded to the selected
charity.
9
<PAGE>
C. HOLDING PERIOD RESTRICTION
As a general principle, personal securities transactions must be for
investment purposes and not for the purposes of generating short-term
profits. Any profits realized on a sale of a security held less than 60
days will be disgorged, with a check written to a charity of NA's choice,
currently the United Way. Checks will be submitted to Compliance and
forwarded to the selected charity. You may, however, sell a security held
less than 60 days if the security is being sold for no profit.
This holding period restriction does not apply to Exempt Securities or
Exempt Transactions. NA's Director of Compliance or General Counsel may
also grant exceptions to this prohibition in limited circumstances (E.G.,
bankruptcy, eviction, personal health emergency, etc.) upon prior written
request.
- -------------------------------------------------------------------------------
YOU MAY NOT SELL A SECURITY ACQUIRED WITHIN THE
PREVIOUS 60 DAYS, UNLESS SELLING AT A LOSS
- -------------------------------------------------------------------------------
D. BLACKOUT PERIOD
As a Covered Person, you may not buy or sell equity securities for your
personal accounts if:
- NA has engaged in a transaction in the same or an equivalent
security for an Advisory Client account within the last three (3)
days, OR
- the security is on the NA trading blotter or proposed blotter.
In the event you effect a prohibited personal securities transaction within
3 business days before or after an Advisory Client account transaction in
the same or equivalent security, you will be required to close out your
position in the security and disgorge any profit realized from the
transaction to a charity designated by NA. However, if you properly
obtained pre-clearance for a transaction and an Advisory Client account
subsequently transacted in the same security within 3 days of your
transaction, this will not normally result in required disgorgement, unless
otherwise determined by NA's Director of Compliance or General Counsel.
The blackout period does not apply to transactions that qualify as Exempt
Securities or Exempt Transactions.
E. DE MINIMIS TRANSACTIONS
You are NOT required to pre-clear certain de minimis transactions that meet
the following criteria. However, you must report these transactions on your
monthly Blue Form:
10
<PAGE>
EQUITY SECURITIES
Any purchase or sale transaction of up to 1,000 shares or $10,000 DAILY in
a NYSE-listed security or any security listed on another domestic exchange
(including NASDAQ) with a market capitalization of at least $2 billion.
DEBT SECURITIES
Any purchase or sale transaction of up to 100 units ($100,000 principal
amount) in an issuer with a market capitalization of at least $2 billion.
- -------------------------------------------------------------------------------
ALL DE MINIMIS TRANSACTIONS ARE SUBJECT TO
THE HOLDING PERIOD RESTRICTION
- -------------------------------------------------------------------------------
F. INITIAL PUBLIC OFFERINGS ("IPOS") & PRIVATE PLACEMENTS
As a Covered Person, you may not engage in a personal securities
transaction in any security in a private placement or IPO without prior
written approval of NA's Director of Compliance or its General Counsel. In
considering such approval, the Director of Compliance or General Counsel
will take into account, among other factors, whether the investment
opportunity is available to and/or should be reserved for an Advisory
Client account, and whether the opportunity is being offered to the Covered
Person by virtue of his or her position.
If you are approved to engage in a personal securities transaction in a
private placement or IPO, you must disclose that investment if you play a
part directly or indirectly in subsequent investment considerations of the
security for an Advisory Client account. In such circumstances, NA's
decision to purchase or sell securities of the issuer shall be subject to
an independent review by an NA Employee with no personal interest in the
issuer. In addition, you may also be required to refrain from trading the
security.
G. FRONT-RUNNING
As a Covered Person, you may not front-run an order or recommendation, even
if you are not handling the order or the recommendation (and even if the
order or recommendation is for someone other than the Covered Person).
Front-running consists of executing a transaction based on the knowledge of
the forthcoming transaction or recommendation in the same or an underlying
security, or other related securities, within three (3) business days
preceding a transaction on behalf of an Advisory Client.
H. INSIDE INFORMATION
As a Covered Person, you may not use material, non-public information about
any issuer of securities, whether or not such securities are held in the
portfolios of Advisory Clients or suitable for inclusion in such
portfolios, for personal gain or on behalf of an Advisory Client. If you
believe you are in possession of such information, you must contact NA's
Director of
11
<PAGE>
Compliance immediately to discuss the information and the circumstances
surrounding its receipt. This prohibition does not prevent a Covered Person
from contacting officers and employees of issuers or other investment
professionals in seeking information about issuers that is publicly
available. (REFER TO NA'S INSIDER TRADING POLICY ATTACHED APPENDIX I FOR
MORE INFORMATION.)
- -------------------------------------------------------------------------------
AS A COVERED PERSON, YOU MAY NOT USE MATERIAL,
NON-PUBLIC INFORMATION ABOUT ANY ISSUER OF SECURITIES
- -------------------------------------------------------------------------------
IF YOU HAVE ANY REGARDING PERSONAL TRADING, CONTACT THE COMPLIANCE
DEPARTMENT OR THE GENERAL COUNSEL.
12
<PAGE>
- -------------------------------------------------------------------------------
V. REPORTS & CERTIFICATIONS REGARDING PERSONAL SECURITIES
TRANSACTIONS
- -------------------------------------------------------------------------------
A. PERSONAL HOLDINGS REPORTS
In order to address potential conflicts of interest that can arise when a
Covered Person acquires or disposes of a security, and to help ensure
compliance with the Code, as a Covered Person, you must submit a Personal
Holdings Report at the time of commencement of employment with NACM or NAS
and annually thereafter with a list of all securities holdings in which you
have a beneficial interest (other than interests in Exempt Securities).
- -------------------------------------------------------------------------------
YOU MUST SUBMIT A COMPLETE PERSONAL HOLDINGS
REPORT UPON COMMENCEMENT OF
EMPLOYMENT & ANNUALLY THEREAFTER
- -------------------------------------------------------------------------------
B. MONTHLY TRANSACTION & GIFT REPORTS
As a Covered Person, you must file a Monthly Securities Transaction and
Gift Report ("Blueform") with Compliance by the 10th day of each month for
the previous month (E.G., a September Blue Form would be due by the 10th of
October). If you did not execute any securities transactions during the
applicable month, you must still submit a Blue Form indicating that fact.
You file these Reports electronically on the NA Intranet site at
http://home.nacm.com/compliance. The Compliance Department receives all
Report confirmations via email and stores them in a master database that is
archived annually to CD ROM.
Your Report must contain the following information with respect to each
reportable personal securities transaction. All fields must be completed in
order for your report to be successfully filed:
- Date of transaction;
- Nature of the transaction (purchase, sale or any other type of
acquisition or disposition);
- Security name;
- Security symbol or CUSIP;
- Number of shares/par;
- Principal amount of each security and/or the price at which the
transaction was effected; and
- Name of the broker, dealer or bank with or through whom the
transaction was effected.
13
<PAGE>
Monthly Reports may contain a statement that the report is not to be
construed as an admission that the person filing the report has or had any
direct or indirect beneficial interest in any security described in the
report.
C. DUPLICATE BROKERAGE STATEMENTS & CONFIRMATIONS
To assist NA in monitoring compliance with the Code, as a Covered Person,
you must instruct each broker-dealer with whom you maintain an account to
send duplicate copies of all transaction confirmations and statements
directly to NA's Compliance Department. This requirement does not apply to
accounts that are exclusively hold Exempt Securities or are held at a
mutual fund company.
D. CERTIFICATION OF COMPLIANCE
As a newly hired Employee, you must certify that you have read, understand
and will comply with the Code.
As a continuing Employee, you must annually certify that you have read,
understand, have complied, and will continue to comply, with the Code.
14
<PAGE>
VI. POTENTIAL CONFLICT OF INTEREST ISSUES
Certain activities, while not directly involving personal trading issues,
nonetheless raise similar potential conflict of interest issues and are
appropriate for inclusion in the Code. These monitored activities are as
follows:
A. SERVICE ON BOARDS OF OTHER COMPANIES
As a Covered Person, you are prohibited from serving on the board of
directors of any PUBLICLY TRADED company or organization. In addition, if
you wish to serve on the board of directors of a PRIVATELY HELD "for
profit" company, you must first obtain prior written approval from NA's
Director of Compliance or General Counsel. It is not necessary to obtain
approval to serve on the board of directors of entities such as schools,
churches, industry organizations or associations, or similar non-profit
boards.
B. GIFTS
As a Covered Person, you may not seek any gift, favor, gratuity, or
preferential treatment from any person or entity that:
- does business with or on behalf of NA;
- is or may appear to be connected with any present or future business
dealings between NA and that person or organization; or
- may create or appear to create a conflict of interest.
You may only accept gifts offered as a courtesy. You must report on your
monthly Blueform all gifts, favors or gratuities valued at $25 MORE (EXCEPT
MEALS VALUED AT LESS THAN $50). Non-Employee Trustees only need to report
gifts if values in excess of $100 AND the gift is given in connection with
the Trustee's affiliation with the NA.
C. GIFT PRE-CLEARANCE
You must submit a gift pre-clearance form and obtain prior written approval
for all gifts with a fair market value in excess of $100. Fair market value
applies to the value of the total gift (E.G., if you receive 4 tickets
valued at $55 a piece, this is considered a gift in valued over $100 and
must be pre-cleared). You must make every reasonable effort to obtain
approval from your direct supervisor and the Compliance Department PRIOR to
accepting anything of value over $100. In the event that pre-approval is
not possible, you must make disclosure as soon as possible after the
gift/event, in any event, no later than on your next Blue Form.
A gift may be denied or required to be returned or reimbursed if you
receive an excessive number of gifts, especially if received from a single
source or if the total dollar value of gifts received during a single year
is deemed excessive.
15
<PAGE>
D. GIFT VIOLATIONS
In the event you fail to properly disclose and/or pre-clear these items,
the Management Committee will require the employee personally to either
donate the fair market value of the item (or the item itself) to charity or
directly reimburse the person or entity responsible for giving the item.
As a Covered Person, you may not offer any gifts, favors or gratuities that
could be viewed as influencing decision-making or otherwise could be
considered as creating a conflict of interest on the part of the recipient.
You must never give or receive gifts or entertainment that would be
controversial to either you or NA, if the information was made public. You
should be aware that certain NA clients might also place restrictions on
gifts YOU may give to their employees.
16
<PAGE>
- -------------------------------------------------------------------------------
VII. VIOLATIONS OF THE CODE
- -------------------------------------------------------------------------------
A violation of this Code is subject to the imposition of such sanctions as
may be deemed appropriate under the circumstances to achieve the purposes
of this Code. NA's Director of Compliance and the Executive Committee will
determine sanctions for violations of the Code. Such sanctions may include
those previously described, as well as others deemed appropriate.
Sanctions for a material violation (I.E., one that involves an actual
conflict or appearance of impropriety) of this Code by a Trustee of the
Funds will be determined by a majority vote of that Fund's Disinterested
Trustees.
IF YOU HAVE ANY QUESTIONS ABOUT ANY ASPECT OF THE CODE, CONTACT THE
DIRECTOR OF COMPLIANCE.
17
<PAGE>
- -------------------------------------------------------------------------------
VIII. ANNUAL BOARD REVIEW
- -------------------------------------------------------------------------------
The NA management annually prepares a report to the Funds' boards
summarizing existing procedures concerning personal trading (including any
changes in the Code), highlights material violations of the Code requiring
significant corrective action and identifies any recommended changes to the
Code.
18
<PAGE>
- -------------------------------------------------------------------------------
IX. ADMINISTRATION & CONSTRUCTION
- -------------------------------------------------------------------------------
NA's Director of Compliance serves as the "Administrator" of this Code. The
Administrator's duties include:
- Maintenance of a current list of Covered Persons;
- Providing all Employees with a copy of the Code and periodically
informing them of their duties and obligations under the Code;
- Supervising the implementation and enforcement of the terms of
the Code;
- Maintaining or supervising the maintenance of all records and
reports required by the Code;
- Preparing a list of all transactions effected by any Covered
Person during the three (3) day blackout period;
- Determining whether any particular securities transactions should
be exempted pursuant to the provisions of Section III of the
Code;
- Issuing, either personally or with the assistance of counsel, any
interpretation of the Code which would be consistent with the
objectives of the Code;
- Conducting inspections or investigations reasonably required to
detect and report material violations of the Code and provide
recommendations relative to these violations to NA's Management
Committee, or the Board of Trustees of a Fund or any Committee
appointed by them to deal with such information;
- Submitting a quarterly report to the Trustees of each Fund
containing a description of any material violation and action
taken and any other significant information concerning
administration of the Code; and
- Regular reporting on Code compliance to the Executive Committee
and General Counsel.
19
<PAGE>
- -------------------------------------------------------------------------------
X. AMENDMENTS & MODIFICATIONS
- -------------------------------------------------------------------------------
This Code may be amended or modified as deemed necessary by the officers of
the Funds, with the advice of Fund counsel, provided such amendments or
modifications shall be submitted to the Board of Trustees of the Funds for
ratification and approval at the next available meeting. This version of
the Code has been amended taking into account the recent amendments to Rule
17j-1 under the Investment Company Act of 1940. This Code is effective as
of March 20, 2000 to be ratified by the Board of Trustees of the Funds at
its next regularly scheduled meeting.
20
<PAGE>
================================================================================
APPENDIX I
================================================================================
NICHOLAS-APPLEGATE CAPITAL MANAGEMENT
-------------------------------------
NICHOLAS-APPLEGATE SECURITIES
-----------------------------
POLICIES AND PROCEDURES CONCERNING THE MISUSE
OF MATERIAL NON-PUBLIC INFORMATION
("INSIDER TRADING")
Every employee of Nicholas-Applegate Capital Management, a California Limited
Partnership ("NA") must read and retain a copy of these Policies and Procedures.
Any questions regarding the Policies and Procedures described herein should be
referred to NA's Compliance Department ("Compliance").
- -------------------------------------------------------------------------------
SECTION I. POLICY STATEMENT ON INSIDER TRADING ("POLICY STATEMENT")
- -------------------------------------------------------------------------------
NA's Policy Statement applies to every Employee and extends to
activities both within and outside the scope of their duties at NA. NA
forbids any Employee from engaging in any activities that would be
considered "insider trading."
The term "insider trading" is not defined in the federal securities
laws, but generally is understood to prohibit the following
activities:
- Trading by an insider, while in possession of material
non-public information;
- Trading by a non-insider, while in possession of material
non-public information, where the information either was
disclosed to the non-insider in violation of an insider's
duty to keep it confidential or was misappropriated;
- Recommending the purchase or sale of securities while in
possession of material non-public information; or
- Communicating material non-public information to others
(I.E., "tipping").
The elements of insider trading and the penalties for such unlawful conduct
are discussed below. If you have any questions regarding this Policy
Statement you should consult the Compliance Department.
WHO IS AN INSIDER?
The concept of "insider" is broad and it includes officers, partners and
employees of a company. In addition, a person can be a "temporary insider"
if he or she enters into a special confidential relationship in the conduct
of a company's affairs and, as a result, is given access to information
solely for the company's purposes. A temporary insider can include, among
others, company attorneys, accountants, consultants, bank lending officers,
and the employees of these organizations. In addition, NA and its Employees
may become temporary insiders of a company that NA advises or for which NA
performs other services. According to the U.S. Supreme Court, before an
outsider will be considered a temporary insider for these purposes, the
company
I-1
<PAGE>
must expect the outsider to keep the disclosed non-public information
confidential and the relationship must, at least, imply such a duty.
WHAT IS MATERIAL INFORMATION?
Trading, tipping, or recommending securities transactions while in
possession of inside information is not an actionable activity UNLESS the
information is "material." Generally, information is considered material
if: (i) there is a substantial likelihood that a reasonable investor would
consider it important in making his or her investment decisions or (ii) it
is reasonably certain to have a substantial effect on the price of a
company's securities. Information that should be considered material
includes, but is not limited to:
- dividend changes;
- earnings estimates;
- changes in previously released earnings estimates;
- a joint venture;
- the borrowing of significant funds;
- a major labor dispute, merger or acquisition proposals or
agreements;
- major litigation;
- liquidation problems; and
- extraordinary management developments.
For information to be considered material, it need not be so important that
it would have changed an investor's decision to purchase or sell particular
securities; rather it is enough that it is the type of information on which
reasonable investors rely in making purchase or sale decisions. The
materiality of information relating to the possible occurrence of any
future event would depend on the likelihood that the event will occur and
its significance if it did occur.
Material information does not have to relate to a company's business. For
example, in U.S. V. CARPENTER, 791 F.2d 1024 (2d Cir. 1986), AFF'D, 484
U.S. 19 (1987) (affirmed without opinion by an evenly divided court with
respect to the charge of insider trading, based on the "misappropriation"
theory), the court considered as material certain information about the
contents of a forthcoming newspaper column that was expected to affect the
market price of a security. In that case, a WALL STREET JOURNAL reporter
was found criminally liable for disclosing to others the dates that reports
on various companies would appear in the JOURNAL and whether those reports
would be favorable or not.
WHAT IS NON-PUBLIC INFORMATION?
All information is considered non-public until it has been effectively
communicated to the marketplace. One must be able to point to some fact to
show that the information is generally public. For example, information
found in a report filed with the SEC, or appearing in DOW JONES, REUTERS
ECONOMIC SERVICES, THE WALL STREET JOURNAL or other publications of general
circulation would be considered public. Information in bulletins and
research reports disseminated by brokerage firms are also generally
considered to be public information.
I-2
<PAGE>
BASIS FOR LIABILITY
In order to be found liable for insider trading, one must either (i) have a
fiduciary relationship with the other party to the transaction and have
breached the fiduciary duty owed to that other party, or (ii) have
misappropriated material non-public information from another person.
FIDUCIARY DUTY THEORY
Insider trading liability may be imposed on the theory that the
insider breached a fiduciary duty to a company. In 1980, the U.S.
Supreme Court held that there is no general duty to disclose before
trading on material non-public information, and that such a duty
arises only where there is a fiduciary relationship. That is, there
must be an existing relationship between the parties to the
transaction such that one party has a right to expect that the other
party would either (a) disclose any material non-public information,
if appropriate or permitted to do so, or (b) refrain from trading on
such material non-public information. CHIARELLA V. U.S., 445 U.S. 222
(1980).
In DIRKS V. SEC, 463 U.S. 646 (1983), the U.S. Supreme Court stated
alternative theories under which non-insiders can acquire the
fiduciary duties of insiders: (a) they can enter into a confidential
relationship with the company through which they gain the information
(E.G., attorneys, accountants, etc.), or (b) they can acquire a
fiduciary duty to the company's shareholders as "tippees" if they were
aware, or should have been aware, that they had been given
confidential information by an insider that violated his or her
fiduciary duty to the company's shareholders by providing such
information to an outsider.
However, in the "tippee" situation, a breach of duty occurs ONLY where
the insider personally benefits, directly or indirectly, from the
disclosure. Such benefit does not have to be pecuniary, and can be a
gift, a reputational benefit that will translate into future earnings,
or even evidence of a relationship that suggests a QUID PRO QUO.
MISAPPROPRIATION THEORY
Another basis for insider trading liability is the "misappropriation"
theory. Under the misappropriation theory, liability is established
when trading occurs as a result of, or based upon, material non-public
information that was stolen or misappropriated from any other person.
In U.S. V. CARPENTER, SUPRA, the court held that a columnist for THE
WALL STREET JOURNAL had defrauded the JOURNAL when he obtained
information that was to appear in the JOURNAL and used such
information for trading in the securities markets. The court held that
the columnist's misappropriation of information from his employer was
sufficient to give rise to a duty to disclose such information or
abstain from trading thereon, even though the columnist owed no direct
fiduciary duty to the issuers of the securities described in the
column or to purchasers or sellers of such securities in the
marketplace. Similarly, if information is given to an analyst on a
confidential basis and the analyst uses that information for trading
purposes, liability could arise under the misappropriation theory.
I-3
<PAGE>
PENALTIES FOR INSIDER TRADING
Penalties for trading on, or communicating material non-public information
are severe, both for individuals involved in such unlawful conduct and
their employers. A person can be subject to some or all of the penalties
below even if he or she did not personally benefit from the violation.
Penalties include:
- Civil injunctions;
- Criminal penalties for individuals of up to $1 million and
for "non-natural persons" of up to $2.5 million plus, for
individuals, a maximum jail term from five to ten years;
- Private rights of actions for disgorgement of profits;
- Civil penalties for the person who committed the violation
of up to three times the profit gained or loss avoided,
whether or not the person actually benefited;
- Civil penalties for the employer or other controlling person
of up to the greater of $1 million per violation or three
times the amount of the profit gained or loss avoided, as a
result of each violation; and
- A permanent bar, pursuant to the SEC's administrative
jurisdiction, from association with any broker, dealer,
investment company, investment adviser, or municipal
securities dealer.
In addition, any violation of this Policy Statement can be expected to
result in serious sanctions by NA, including dismissal of the persons
involved.
- -------------------------------------------------------------------------------
SECTION II. PROCEDURES TO IMPLEMENT NA'S POLICY STATEMENT
- -------------------------------------------------------------------------------
The following procedures have been established to aid NA's Employees in
avoiding insider trading, and to aid NA in preventing, detecting and
imposing sanctions against insider trading. Every Employee of NA must
follow these procedures or risk serious sanctions, as described above. If
you have any questions about these procedures you should consult with the
Director of Compliance.
IDENTIFYING INSIDER INFORMATION
Before trading for yourself or others, including for any client accounts
managed by NA, in the securities of a company about which you may have
potential insider information, or revealing such information to others or
making a recommendation based on such information, you should ask yourself
the following questions.
- Is the information material?
- Is this information that an investor would consider important in
making an investment decision?
- Is this information that would substantially affect the market price
of the securities if generally disclosed?
- Is the information non-public?
I-4
<PAGE>
- To whom has this information been provided?
- Has the information been effectively communicated to the marketplace
by being published in THE WALL STREET JOURNAL or other publications of
general circulation, or has it otherwise been made available to the
public?
If, after consideration of the above, you believe that the information is
material and non-public, or if you have questions as to whether the
information may be material and non-public, you should take the following
steps.
- Report the matter immediately to Compliance and disclose all
information that you believe may bear on the issue of whether the
information you have is material and non-public;
- Refrain from purchasing or selling securities with respect to
such information on behalf of yourself or others, including for
client accounts managed by NA; and
- Refrain from communicating the information inside or outside NA,
other than to Compliance.
After Compliance has reviewed the issue, you will be instructed to continue
the prohibitions against trading, tipping, or communication, or you will be
allowed to trade and communicate the information. In appropriate
circumstances, our Director of Compliance will consult with our General
Counsel as to the appropriate course of action.
PERSONAL SECURITIES TRADING
All Employees of NA must adhere to NA's Code of Ethics and Conduct ("Code")
with respect to:
- securities transactions effected for their own account,
- accounts over which they have a direct or indirect beneficial
interest, and
- accounts over which they exercise any direct or indirect
influence.
Please refer to NA's Code as necessary. In accordance with the Code,
Employees are required to obtain prior written approval from Compliance for
all personal securities transactions (unless otherwise exempt under the
Code) and to submit to Compliance a Monthly Securities Transaction and Gift
Report ("Blueform") concerning all equity securities transactions as
required by NA's Code.
RESTRICTING ACCESS TO MATERIAL NON-PUBLIC INFORMATION
Information in your possession that you identify, or that has been
identified to you as material and non-public, must not be communicated to
anyone, except as provided above. In addition, you should make certain that
such information is secure. For example, files containing material
non-public information should be sealed and inaccessible and access to
computer files containing material non-public information should be
restricted by means of a password or other similar restriction.
I-5
<PAGE>
RESOLVING ISSUES CONCERNING INSIDER TRADING
If, after consideration of the items set forth above, doubt remains as to
whether information is material or non-public, or if there is any
unresolved question as to the applicability or interpretation of the
foregoing procedures, or as to the propriety of any action, please discuss
such matters with our Director of Compliance before trading or
communicating the information in question to anyone.
SUPERVISORY PROCEDURES
NA's Compliance Department is critical to the implementation and
maintenance of these Policies and Procedures against insider trading. The
supervisory procedures set forth below are designed to detect and prevent
insider trading.
PREVENTION OF INSIDER TRADING
In addition to the pre-approval and monthly reporting procedures
specified in the Code concerning personal securities transactions, the
following measures have been implemented to prevent insider trading by
NA's Employees.
1. All Employees of NA will be provided with a copy of these
Policies and Procedures regarding insider trading.
2. Compliance will, as deemed necessary, conduct educational
seminars to familiarize Employees with NA's Policies and
Procedures. Such educational seminars will target, in particular,
persons in sensitive areas of NA who may receive inside
information more often than others;
3. Compliance will answer questions regarding NA's Policies and
Procedures;
4. Compliance will resolve issues of whether information received by
an Employee of NA is material and non-public;
5. Compliance will review these Policies and Procedures on a regular
basis and update as necessary;
6. Whenever it has been determined that an Employee of NA has
possession of material non-public information, Compliance will
(i) implement measures to prevent dissemination of such
information, and (ii) restrict Employees from trading in the
securities by placing such securities on NA's Restricted List;
and
7. Upon the request of any Employee, Compliance will review and any
requests for clearance to trade in specified securities and
either approve or disapprove.
DETECTION OF INSIDER TRADING
To detect insider trading, Compliance will:
1. Review the personal securities transaction reports filed by each
Employee, including subsequent monthly review of all personal
securities transactions;
2. Review the trading activity of client accounts managed by NA;
3. Review the trading activity of NA's own accounts, if any; and
I-6
<PAGE>
4. Coordinate the review of such reports with other appropriate
Employees of NA when Compliance has reason to believe inside
information has been provided to certain Employees.
REPORTS TO MANAGEMENT
Promptly upon learning of a potential violation of NA's Policies and
Procedures, Compliance will prepare a confidential written report to
management, providing full details and recommendations for further
action. In addition, Compliance will prepare reports to management,
when appropriate, setting forth:
1. A summary of existing procedures to prevent and detect insider
trading;
2. Full details of any investigation, either internal or by a
regulatory agency, of any suspected insider trading and the
results of such investigation;
3. An evaluation of the current procedures and any recommendations
for improvement; and
4. A description of NA's continuing education program regarding
insider trading, including the dates of any seminars since the
last report to management.
In response to such report, management will determine whether any
changes to the Policies and Procedures might be appropriate.
I-7
<PAGE>
- -------------------------------------------------------------------------------
APPENDIX II
- -------------------------------------------------------------------------------
EXAMPLES OF BENEFICIAL OWNERSHIP
- - Securities held by an Access Person for their own benefit, regardless of
the form in which held;
- - Securities held by others for an Access Person's benefit, such as
securities held by custodians, brokers, relatives, executors or
administrators;
- - Securities held by a pledgee for an Access Person's account;
- - Securities held by a trust in which an Access Person has an income or
remainder interest, unless the Access Person's only interest is to receive
principal (a) if some other remainderman dies before distribution or (b) if
some other person can direct by will a distribution of trust property or
income to the Access Person;
- - Securities held by an Access Person as trustee or co-trustee, where the
Access Person or any member of their immediate family (I.E., spouse,
children or their descendants, stepchildren, parents and their ancestors,
and stepparents, in each case treating a legal adoption as a blood
relationship) has an income or remainder interest in the trust;
- - Securities held by a trust of which the Access Person is the settlor, if
the Access Person has the power to revoke the trust without obtaining the
consent of all the beneficiaries;
- - Securities held by a general or limited partnership in which an Access
Person is either the general partner of such partnership or a controlling
partner of such entity (E.G., Access Person owns more than 25% of the
partnership's general or limited partnership interests);
- - Securities held by a personal holding company controlled by an Access
Person alone or jointly with others;
- - Securities held in the name of an Access Person's spouse - unless legally
separated or divorced;
- - Securities held in the name of minor children of an Access Person or in the
name of any relative of an Access Person or of their spouse (including an
adult child) who is presently sharing the Access Person's home;
- - Securities held in the name of any person other than an Access Person and
those listed in above, if by reason of any contract, understanding,
relationship, agreement, or other arrangement the Access Person obtains
benefits equivalent to those of ownership; and
- - Securities held in the name of any person other than an Access Person ,
even though the Access Person does not obtain benefits equivalent to those
of ownership (as described above), if the Access Person can vest or re-vest
title in himself.
II-1
<PAGE>
- -------------------------------------------------------------------------------
APPENDIX III
- -------------------------------------------------------------------------------
QUICK REFERENCE GUIDE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION PRE- REPORT BLACK-OUT HOLDING TRADING FINE DISGORGEMENT
- ----------- CLEAR PERIOD PERIOD APPLIES REQUIRED
("Blue Form")
- -----------------------------------------------------------------------------------------------------------------------------------
EXEMPT SECURITIES:
<S> <C> <C> <C> <C> <C> <C>
Open-end mutual funds, US Gov't securities,
BAs, CDs, CP, Muni bonds and stock indices NO NO NO NO N/A N/A
- -----------------------------------------------------------------------------------------------------------------------------------
EXEMPT TRANSACTIONS:
No control or influence, non-voluntary,
automatic dividend reinvestment plan,
exercise of pro-rata rights issue, options NO NO NO NO N/A N/A
or futures on commodities, currencies or
interest rates
- -----------------------------------------------------------------------------------------------------------------------------------
DE MINIMIS TRANSACTIONS:
1,000 shares or $10,000 and NYSE or other
listed domestic exchange, including NASDAQ, NO YES NO YES YES YES
and market cap = $2 billion (daily limit)
- -----------------------------------------------------------------------------------------------------------------------------------
= 500 shares, NYSE, or market cap = $500 YES YES NO YES YES YES
million
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: THIS INFORMATION IS PROVIDED AS A SUMMARY ONLY. YOU ARE RESPONSIBLE TO
ENSURE YOUR PERSONAL SECURITIES TRADING COMPLIES WITH THE CODE. PLEASE REFER TO
THE CODE FOR FURTHER DETAILS. IF YOU HAVE ANY QUESTIONS, PLEASE CONTACT
COMPLIANCE.
III-3
<PAGE>
- -------------------------------------------------------------------------------
APPENDIX IV
- -------------------------------------------------------------------------------
EXEMPT INDICES
- -------------------------------------------------------------------------------
The following are exempt from the 60-DAY MINIMUM hold rule and are exempt from
pre-clearance:
- - S&P 500 Index
- - S&P 100 Index
- - S&P Mid Cap Index (400 Issues)
- - S&P Small Cap Index (600 Issues)
- - NASDAQ 100 Index
- - Russell 2000 Index
- - Wilshire Small Cap Index (250 Issues)
- - EUROTOP 100 Index
- - Financial Times Stock Exchange (FT-SE) 100 Index
- - Japan Index (210 Issues)
- - NYSE Composite Index (2400 Issues)
- - PHLX National OTC Index (100 Issues)
- - Standard & Poor's Depository Receipts (SPDRs)
- - Standard & Poor's Mid Cap 400 Depository Receipts (Mid Cap SPDRs)
- - Gold/Silver Index Options
- - World Equity Benchmark Shares (WEBS)
- - JP Morgan Commodity Indexed Preferred Securities, Series A (Symbol JPO)
- - Dow Jones Industrials Diamonds (DIA)
- - NASDAQ 100 Shares (QQQ)
The Director of Compliance may approve any other Index on a case-by-case basis.
If you have any questions regarding the above, please contact the Compliance
Department.
IV-1
<PAGE>
- -------------------------------------------------------------------------------
APPENDIX V
- -------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NEW HIRES:
PLEASE COMPLETE, SIGN & RETURN THE FOLLOWING 4 PAGES TO THE COMPLIANCE
DEPARTMENT WITHIN 5 DAYS OF YOUR DATE OF HIRE
------
YOU ARE NOT PERMITTED TO EXECUTE ANY PERSONAL
TRADES UNTIL THESE CERTIFICATES ARE FILED.
ANNUAL RECERTIFICATION (PRESENT EMPLOYEES):
YOU ARE REQUIRED TO COMPLETE, SIGN & RETURN THE FOLLOWING 4 PAGES TO THE
COMPLIANCE DEPARTMENT BY THE ANNUAL DUE DATE (STATED IN RENEWAL PACKET). IF IT
IS RECEIVED AFTER THAT DATE YOU WILL INCUR A FINE AS FOLLOWS - $50 FOR THE FIRST
DAY LATE & $10 EVERY DAY AFTER THAT.
ALL FINES ARE WRITTEN & SENT TO THE UNITED WAY.
YOU WILL ALSO BE RESTRICTED FROM TRADING UNTIL THESE
CERTIFICATES ARE RECEIVED IN COMPLIANCE (ONLY IF LATE).
THANK YOU
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
V-1
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
NICHOLAS-APPLEGATE SECURITIES
NICHOLAS-APPLEGATE CAPITAL MANAGEMENT
CERTIFICATE OF COMPLIANCE
- -----------------------------------
NAME (PLEASE PRINT)
This is to certify that the Code of Ethics and Conduct ("Code"), updated as of
March 2000, is available for my review on the intranet site (home.nacm.com) for
the year 2000. I have read and understand the Code. I certify that I will comply
with these policies and procedures during the course of my employment by NACM or
NAS. Moreover, I agree to promptly report to the Director of Compliance any
violation, or possible violation of this Code, of which I become aware.
I understand that a violation of this Code will be grounds for disciplinary
action or dismissal and may also be a violation of federal and/or state
securities laws.
- ------------------------------------
SIGNATURE
- ------------------------------------
DATE
- --------------------------------------------------------------------------------
V-2
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NICHOLAS-APPLEGATE CAPITAL MANAGEMENT
NICHOLAS-APPLEGATE SECURITIES
INSIDER TRADING POLICY
{APPENDIX I}
CERTIFICATE OF COMPLIANCE
- ------------------------------------
NAME (PLEASE PRINT)
This is to certify that I have read and understand the policies and
procedures of NA's Insider Trading Policy (the "Policy"), updated as of
March 2000, and available for my review on the intranet site (home.nacm.com)
for the year 2000. I certify that I will comply with these policies and
procedures during the course of my employment with NA. Moreover, I agree to
promptly report to the Director of Compliance any violation, or possible
violation, of the Policy of which I became aware.
I understand that violation of the Policy will be grounds for disciplinary
action or dismissal and may also be a violation of federal and/or state
securities laws.
- ------------------------------------
SIGNATURE
- ------------------------------------
DATE
- -------------------------------------------------------------------------------
V-3
<PAGE>
PERSONAL HOLDINGS REPORT
AS REQUIRED IN Section V of the NA's Code of Ethics ("Code"), please provide a
list of all Securities (except Exempt Securities) in which you have a beneficial
interest, including those in accounts of your immediate family and all
Securities in non-client accounts for which you make investment decisions.
1. List all Securities that are:
a) personally owned; or
b) in which a beneficial interest is held by you, your spouse, minor
child, or any other member of your immediate household;
c) any trust or estate of which you or your spouse is a trustee, other
fiduciary or beneficiary, or of which your minor child is a
beneficiary; or
d) any person for whom you direct or effect transactions under a power of
attorney or otherwise.
TABLE A
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
NAME OF SECURITY TYPE SECURITY(1) HOLDINGS HOLDINGS RELATIONSHIP(3) DISCLAIMER OF
# OF SHARES PRINCIPAL BENEFICIAL INTEREST(4)
AMOUNT ($)(2)
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
* IF NONE, WRITE NONE.
*NOTE: CONTINUE LISTING AS NECESSARY ON ADDITIONAL SHEETS. (YOU MAY ATTACH A
COPY OF A BROKER STATEMENT LISTING THE INFORMATION - IF SO, INDICATE BY WRITING
"SEE ATTACHED.")
IF YOU ARE A PRESENT EMPLOYEE (NEW EMPLOYEES CONTINUE TO TABLE B)
2. Have you, during the past 12 months, requested prior clearance of and filed
monthly reports for all applicable securities transactions as required by
the Code?
Yes No
-------- -------
If "No", has the transaction been discussed with the Compliance Department?
Yes No
-------- -------
- ----------------------
(1) INSERT THE FOLLOWING SYMBOL AS PERTINENT TO INDICATE THE TYPE OF SECURITY
HELD: C-COMMON STOCK, P-PREFERRED STOCK, O-OPTION, W-WARRANT and D-DEBT
SECURITY.
(2) TO BE COMPLETED ONLY FOR DEBT SECURITIES.
(3) INSERT A, B, C, OR D AS EXPLAINED ABOVE, TO DESCRIBE YOUR INTEREST IN THESE
SECURITIES.
(4) MARK X TO INDICATE THAT THE REPORTING OR RECORDING OF THIS SECURITIES
HOLDING SHALL NOT BE CONSTRUED AS AN ADMISSION THAT YOU HAVE ANY DIRECT OR
INDIRECT BENEFICIAL INTEREST IN THESE SECURITIES. PLEASE SEE APPENDIX II FOR A
LIST OF EXAMPLES OF BENEFICIAL INTEREST.
V-4
<PAGE>
If not, please advise the Compliance Department in writing separately of
any securities transactions not pre-cleared or reported.
3. Have you filed monthly reports for all reportable securities transactions as
required by the Code?
Yes No
-------- -------
In addition, Nicholas-Applegate requires all employees to disclose ALL BROKERAGE
ACCOUNTS in their name, any spouse's account, any children's account or any
other account over which the employee has control or is a beneficiary.
TABLE B
NAME OF BROKER ACCOUNT NUMBER NAME(S) ON ACCOUNT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
* IF NONE, WRITE NONE.
I certify that the statements made by me on this form are true, complete and
correct to the best of my knowledge and belief and are made in good faith.
- ------------------------------- ------------------------------------------
DATE SIGNATURE
V-5
<PAGE>
OECHSLE INTERNATIONAL ADVISORS, LLC
CODE OF ETHICS
The reputation of Oechsle International Advisors, LLC ("Oechsle") for integrity
and ethics is one of our most important assets. In order to safeguard this
reputation, we believe that it is essential not only to comply with relevant
federal and state laws and regulations, but also to maintain high standards of
personal and professional conduct. Oechsle's Code of Ethics (the "Code") is
designed to ensure that our conduct is at all times consistent with the highest
of ethical standards, with our fiduciary obligations to our clients, and with
industry and regulatory standards for investment managers.
The Code is based on the principle that the officers, directors, members, and
employees of Oechsle owe a fiduciary duty to our clients to:
- Always place the interests of our clients first.
- Conduct our personal securities transactions in a manner which
does not interfere with client transactions, create an actual
or potential conflict of interest with clients, or otherwise
take unfair advantage of our relationship with our clients.
- Avoid even the appearance of impropriety in our personal actions.
Persons covered by this Code must adhere to this general principle as well as
comply with the Code's specific provisions. It bears emphasis that although the
Code provides guidance with respect to many common situations, it cannot address
every possible circumstance that could give rise to a conflict of interest,
potential conflict, or an appearance of impropriety. Regardless of whether a
specific provision of the Code applies, each of us at Oechsle must conduct his
or her activities in accordance with the general principles embodied in the Code
and in such a way as to avoid any actual or potential conflict of interest or
any abuse of an individual's position of trust and responsibility. Please
remember that even if our clients are not harmed, we cannot take inappropriate
advantage of information we learn through our position as fiduciaries. TECHNICAL
COMPLIANCE WITH THE PROCEDURES INCORPORATED IN THE CODE WILL NOT INSULATE FROM
SCRUTINY TRADES WHICH CONTRAVENE AN INDIVIDUAL'S DUTIES TO OECHSLE AND ITS
CLIENTS. Therefore, to protect yourself and Oechsle, please be alert for any
potential for conflicts of interest, and please consult the Senior Compliance
Officer or the General Counsel whenever questions arise concerning the
application of the Code to a particular situation.
5-1
<PAGE>
PERSONS COVERED BY THE CODE
The provisions and requirements of the Code apply to all officers, directors,
members, and employees of Oechsle and its subsidiaries ("Oechsle employees").
In addition, the provisions and requirements of the code, including the rules
pertaining to pre-clearance of personal securities transactions, apply to all
members of any employee's "immediate family." ANY FAMILY MEMBER WHO IS PRESENTLY
LIVING IN YOUR HOUSEHOLD, OR TO WHOSE FINANCIAL SUPPORT YOU MAKE A SIGNIFICANT
CONTRIBUTION, IS CONSIDERED TO BE A MEMBER OF YOUR IMMEDIATE FAMILY. Please bear
in mind that the Code applies to all securities accounts:
(i) in which any Oechsle employee or his or her immediate family have any
direct or indirect beneficial interest (e.g., family trust); or
(ii) over which any Oechsle employee or his or her immediate family
exercise any investment authority; or
(iii)which receive any investment advice from any Oechsle employee or his
or her immediate family.
Please remember that the term "beneficial interest" includes more than ordinary
ownership. In general, you may be deemed to have beneficial ownership under any
of the following circumstances:
1. You have the power to sell or transfer the security, or you have the
power to direct the sale or transfer; or
2. You have the power to vote the security or the power to direct the
vote; or
3. You have an economic interest in the security; or
4. You have the right to acquire, within 60 days, the power to sell, the
power to vote, or an economic interest in the security.
You should consider yourself as having beneficial ownership of a security in the
following situations (which also apply to your immediate family):
1. The security is held by you, whether in bearer form, registered in
your name, or otherwise;
2. The security is held by others for your benefit, such as a security
held for you by a bank, custodian, broker, relative, executor,
administrator, agent, or any other person;
3. The security is held by a trust of which you are the trustee, or in
which you have an economic interest, or where you participate in the
investment decisions or otherwise have direct or indirect influence or
control;
5-2
<PAGE>
4. The security is held by a trust of which you are the settlor if you
have the power to revoke the trust without obtaining the consent of
all the beneficiaries;
5. The security is held by any partnership in which you are a general
partner, or with respect to which you have direct or indirect
influence or control;
6. The security is held in the name of another person if, by reason of
any contract, understanding, relationship, agreement, or other
arrangement, you obtain therefrom benefits substantially equivalent to
those of ownership;
7. The security is held in the name of another person, even though you do
not obtain therefrom benefits substantially equivalent to those of
ownership, if you can vest or revest title in yourself at any time.
Although persons who are not members of your "immediate family" are not required
to comply with the pre-clearance procedures contained in the Code, they also may
not take improper advantage of information that they may receive from you
regarding the activity or holdings of Oechsle clients. In addition, it would be
a violation of the Code, and, specifically of Oechsle's Insider Trading Policy,
for an Oechsle employee to arrange for a friend or relative to trade in a
security in which that Oechsle employee would be precluded from trading for his
or her own account, or for an Oechsle employee to give information about the
activity or holdings of Oechsle clients to any person for the purpose of
facilitating securities trading by that person.
GENERAL TERMS AND PROVISIONS
These provisions apply to all employees of Oechsle and its subsidiaries.
These provisions apply only to transactions in reportable securities.
A. REPORTABLE SECURITIES are ALL securities except:
(a) shares of registered, open-end investment companies (mutual funds) for
which Oechsle is not an advisor or sub-advisor;
(b) direct U.S. government obligations, such as Treasury bonds, notes, and
bills, and U.S. Savings Bonds;
(c) CDs, bankers' acceptances, and other money-market instruments;
(d) transactions in commodities and options and futures on commodities;
(e) investments in or by hedge funds and commingled funds managed by
Oechsle, in which Oechsle employees may have beneficial interests.
You do not need to report transfers of securities, stock splits, or other such
activity.
Thus, REPORTABLE SECURITIES include, but are not limited to:
5-3
<PAGE>
(a) any type of equity or debt security (including, without limitation,
common and preferred stock and corporate and municipal bonds and debt
obligations issued by foreign governments);
(b) any rights relating to such a security, such as put and call options,
warrants, and convertible securities;
(c) ADRs;
(d) options and futures on security indexes.
B. COMPLIANCE OFFICER - the Oechsle officer assigned the responsibility of
administering this Code is the Senior Compliance Officer, or in his absence
the General Counsel.
C. PRE-CLEARANCE - of ALL personal securities transactions IN REPORTABLE
SECURITIES is required for all Oechsle employees.
D. BROKERAGE CONFIRMATIONS - copies of brokerage confirmations for each
pre-cleared transaction are required.
E. BLACKOUT PERIODS - for certain designated periods surrounding client trades
or while a transaction is being actively considered for a client.
F. EXCESSIVE SHORT-TERM TRADING - is discouraged and profits from such trading
may have to be disgorged.
G. QUARTERLY REPORTING - of personal securities transactions.
H. ANNUAL CERTIFICATION - that the employee has read and understood the Code.
PRE-CLEARANCE
1. GENERAL RULE:
Oechsle requires written pre-clearance of personal trades in reportable
securities.
2. PROCEDURES:
The pre-clearance requirement is satisfied by completing the Personal Securities
Transaction Pre-Trading Authorization Form (SEE EXHIBIT A). PRE-CLEARANCE IS
ONLY EFFECTIVE FOR THE SPECIFIC TRADE DATE (or for the next available market
session if same-date is not practicable due to foreign market constraints) AND
FOR A SPECIFIC NUMBER OF SHARES. TRADING INSTRUCTIONS GIVEN TO BROKERS MUST BE
FOR SAME DAY EXECUTION. You may not change the trade date, and you may not
increase the size of your order, without obtaining a new pre-clearance. You may,
however, decrease the size of your trade without obtaining a new pre-clearance.
Moreover, you need not place an order for which you have obtained pre-clearance.
If you choose not to place that order, you must obtain a new pre-clearance if
you change your mind and wish to enter the order on a later
5-4
<PAGE>
date. In addition, you must inform the Compliance Officer in writing if you
decide not to execute a pre-cleared trade.
Generally, the date on which you initiate your trade instructions should be the
date on which the trade is actually executed. However, there are some
exceptions. For purposes of this Code, the trade date for a limit order or a
stop-loss order is the date on which you give the order to your broker, not the
date on which the order is finally executed in accordance with your
instructions. Therefore, if your limit or stop-loss order is entered with the
broker in accordance with the pre-clearance requirements and consistent with the
blackout period, the subsequent execution of that trade will satisfy the Code,
even if Oechsle subsequently enters trades for client accounts that are executed
on the same day as your order is executed.
Three signatures are required on the pre-clearance form:
1. The Compliance Officer, the Senior Compliance Officer, or the General
Counsel in the Boston office (in the absence of the Compliance
Officer), or the Compliance Officer of the London office, in the case
of that office.
2. The Trading Desk.
3. A Managing Principal.
As a general rule, no person may sign a pre-clearance form for himself or
herself. In order to ensure that all personal securities transactions are
conducted in accordance with the Code, the Compliance Officer of the Boston
office will retain copies of all pre-clearance forms in each employee's personal
securities transactions file.
The Compliance Officer and the Trading Desk will monitor trading in pre-cleared
securities among Oechsle clients to ensure that all applicable blackout periods
have been complied with and that there is otherwise no activity in such
securities that would raise questions regarding any conflicts or potential
conflicts.
EXEMPTIONS:
A. THIRD PARTY ACCOUNTS. If an Oechsle employee nominally has beneficial
ownership over a particular account, but does not exercise direct or
indirect influence or control over that account and provides no investment
advice with respect to the investment decisions made for the account, he or
she may apply to the General Counsel for a waiver from the pre-clearance
provisions of the Code. Waivers are not automatic, are made on a
case-by-case basis, and are conditioned, at a minimum, upon the following:
1. The Oechsle employee discloses to the General Counsel the existence of
the Third Party Account and allows the General Counsel to review, in
her discretion, the governing documents of such accounts.
2. The Oechsle employee establishes to the satisfaction of the General
Counsel that he or she has no direct or indirect influence or control
over the Third Party Account or over investment decisions made for
that account.
5-5
<PAGE>
3. The Oechsle employee completes the Brokerage Account Certification
(SEE EXHIBIT B) on an annual basis.
4. The Oechsle employee does not disclose to any person with influence or
control over the Third Party Account any action that Oechsle may or
may not take, or has or has not taken, with respect to any security.
B. STOCK INDEX FUTURES AND OPTIONS. The pre-clearance requirements of the Code
do not apply to purchases and sales of stock index options and stock index
futures. However, such transactions must be reported on the employee's quarterly
personal securities transactions report.
PROHIBITED TRANSACTIONS
The following categories of transactions may NOT be engaged in by Oechsle
employees:
1. TRANSACTIONS IN CONJUNCTION WITH OECHSLE CLIENTS:
A. No Oechsle employee shall cause an Oechsle client to either take or not
take any action for such employee's personal benefit (or the personal
benefit of anyone else) rather than for the benefit of the client. For
example, an employee would violate this Code by causing a portfolio to
purchase a security he or she owned for the purpose of supporting or
increasing the price of that security. Causing a portfolio to refrain from
selling a security in an attempt to protect a personal investment, such as
an option on that security, also would violate this Code.
B. No Oechsle Employee shall use knowledge of Oechsle client transactions to
profit by the market effect of those transactions.
C. No Oechsle employee may use futures or options to take positions in
securities which the Code would prohibit if the positions were taken
directly.
D. No Oechsle employee may purchase a security with knowledge that it is being
contemplated for purchase, or will be purchased, for an Oechsle client. No
Oechsle portfolio manager, analyst or trader may buy or sell a security
within seven calendar days on either side of a date on which the security
is bought or sold for the account of any Oechsle client. As an example, if
such an account purchases a particular security on Day 8, all portfolio
managers, analysts and traders would be precluded from purchasing or
selling that security for his or her own account(s) from Day 1 through Day
15.
For all other Oechsle employees the blackout period is one day before and one
day after any trade by any Oechsle client.
If a previously-entered employee trade falls within the blackout period, the
employee must reverse the trade. Thus, for example, if an employee pre-clears a
trade and purchases the
5-6
<PAGE>
security on Day 1, and an Oechsle client purchases the security on Day 2, the
Oechsle employee must reverse the trade. If the trade can be reversed prior to
settlement, the employee should do so, with the cost of reversal being borne by
the employee. If the trade cannot be reversed prior to settlement, the employee
must engage in an offsetting transaction immediately. If a loss results, the
employee must bear the loss; if a profit results, the employee must donate the
profit to a charity of the employee's choice with suitable evidence of such
donation provided to the General Counsel, or forfeit the profit to Oechsle.
EXEMPTIONS:
A. LARGE CAPITALIZATION STOCKS.
An Oechsle employee may purchase or sell shares of a security which is being
actively considered for purchase or sale, or which is being purchased or sold,
for Oechsle clients if, given the number of shares the employee is purchasing or
selling and the market capitalization (outstanding shares x current price per
share) of the issuer, the employee's trading could have no material impact on
the price of the security and if Oechsle were to trade in the security, such
trading could have no material impact on the price of the security. This
exemption is subject to prior written approval by the General Counsel, the
Trading Desk, and the Chief Operating Officer. YOU MUST SPECIFICALLY REQUEST
THIS PRIOR APPROVAL.
B OPTION EXERCISE BY OTHERS.
An Oechsle employee who has sold ("written") a put or call option in compliance
with the Code will not violate this or any other provision of the Code if the
put or call is exercised and the Oechsle employee must honor the contractual
commitment to purchase or sell the security, as the case may be.
C. MARGIN CALLS.
An Oechsle employee who maintains securities in a margin account with a
broker-dealer will not violate this provision of the Code if the securities are
sold by the broker-dealer pursuant to a bona fide margin call, provided,
however, that withdrawal of collateral by the employee was not a contributing
factor to the margin call.
D. DIVIDEND REINVESTMENT.
An Oechsle employee will not violate this provision of the Code by participating
in an automatic dividend reinvestment program offered by the issuer of a
publicly traded security.
E. CLIENT SMALL INVESTMENTS.
An Oechsle employee may engage in a transaction which would otherwise violate
this provision of the Code if (a) the client buying the security, or for whom
the security is being considered, is engaged in an ongoing investment program to
augment AN existing position with relatively small regular increments of cash
flow, (b) the General Counsel, after consultation with investment
5-7
<PAGE>
personnel, determines that neither the client's nor the employee's purchases
will materially affect the market price of the security, and (c) the General
Counsel gives prior consent to the transaction.
F. GIFTS.
Gifts of securities made to others, such as relatives or charities, are treated
as dispositions of beneficial ownership, and must be pre-cleared prior to
transfer of the securities. However, gifts of securities received, if
non-volitional on the Oechsle employees' part, need not be pre-cleared.
G. ACQUISITION AND EXERCISE OF CERTAIN RIGHTS.
The acquisition and exercise of rights that are offered PRO RATA to all
shareholders is not covered by the Code. Exercise of oversubscription rights,
however, does require pre-clearance.
H. STOCK INDEX FUTURES AND STOCK INDEX OPTIONS.
The purchase and sale of stock index futures and stock index options are not
subject to the blackout periods. However, such purchases and sales must be
reported in quarterly reports.
2. PUBLIC OFFERINGS:
No Oechsle employee may purchase equity and equity-related securities in initial
public offerings, whether or not Oechsle client accounts participate in the
offering, except as described below. Oechsle employees may purchase securities
that were the subject of a recent public offering after the offering is
completed, and then only at the prevailing market prices and subject to the
usual pre-clearance procedures. Oechsle employees may not receive special
allocations of "hot issues" from brokers which receive Oechsle business.
5-8
<PAGE>
EXEMPTIONS:
A. Oechsle employees are permitted to purchase equity and equity-related
securities in secondary offerings if Oechsle client accounts do not hold
the security and if no Oechsle portfolio manager wishes to participate in
the offering for client accounts.
B. Oechsle employees are permitted to purchase equity and equity-related
securities in rights offerings if the opportunity to purchase is extended
equally to all holders of the company's common stock and the offer is
extended to the employee as a holder of the company's common stock.
C. Oechsle employees are permitted to purchase equity and equity-related
securities in an offering if they are entitled to such purchase by virtue
of being a citizen or resident of a country who qualifies for privatization
issues made available to the public in general.
Any purchase of any security in a public offering, even if permitted under these
rules, must be pre-cleared in writing by the Senior Compliance Officer.
3. PRIVATE OFFERINGS:
No Oechsle employee may purchase a security in a private offering without first
obtaining a pre-clearance from the Senior Compliance Officer. The employee
should complete and submit to the Senior Compliance Officer a checklist in the
form attached as EXHIBIT C hereto.
Consideration of the prior approval request will take into account, among other
factors, whether the investment opportunity should be reserved for an Oechsle
client(s), and whether the opportunity is being offered to an individual as a
favor designed to influence that employee's judgment in the performance of his
or her job duties at Oechsle or as compensation for services of an investment
advisory nature rendered to the issuer. If approval is granted and the employee
has any material role in subsequent consideration by an Oechsle client of an
investment in the same, or a directly affiliated issuer, the employee must
disclose his or her interest in the private placement to the person making the
investment decision.
4. SHORT-TERM TRADING:
Excessive short-term trading increases the risk of conflict of interest, may
over time adversely affect an Oechsle employee's investment judgment on behalf
of Oechsle clients, and may unduly occupy an Oechsle employee's time and
thoughts during working hours. Oechsle employees are hired and compensated on
the assumption that their personal investing will generally be on a long-term
basis.
Therefore, while this Code does not impose an absolute prohibition on short-term
trading, excessive short-term trading is prohibited. Whether the extent of
short-term trading by an employee is "excessive" will be determined on a
case-by-case basis, taking into account all relevant factors, including
conditions prevailing in the securities markets and the types of
5-9
<PAGE>
securities traded. Persons determined to be engaged in excessive short-term
trading will be subject to imposition of any or all of the sanctions described
at the end of this Code, including disgorgement of profits realized from the
short-term trade.
A short-term trade is any purchase and sale, or sale and purchase, of the same
(or equivalent) securities within 60 calendar days.
EXEMPTIONS:
A. OPTION EXERCISE BY OTHERS.
An Oechsle employee who has sold ("written") a put or call option in compliance
with this Code will not have effected a short-term trade if the put or call is
exercised and the Oechsle employee must honor the contractual commitment to
purchase or sell the security, as the case may be, within 90 days of selling the
option.
B. MARGIN CALLS. An Oechsle employee who maintains securities in a margin
account with a broker-dealer will not have effected a short-term trade if the
securities are sold by the broker-dealer pursuant to a bona fide margin call,
provided, however, that withdrawal of collateral by the employee was not a
contributing factor to the margin call.
5. TRANSACTIONS WITH OR INVOLVING OECHSLE CLIENTS:
No Oechsle employee may knowingly initiate a purchase from or sell to an Oechsle
client any securities or other property, nor engage in any transaction to which
an Oechsle client is a party or with which any Oechsle client has a significant
relationship.
6. GENERAL FIDUCIARY OBLIGATION TO CLIENTS; DISCLOSURE OF PERSONAL INTEREST:
As noted above, Oechsle and its employees have a fiduciary responsibility to
Oechsle's clients. Therefore we must avoid any conduct that would be detrimental
to their interests. In order to fulfill our duty, Oechsle employees must offer
all investment opportunities to Oechsle's clients BEFORE taking advantage of
such opportunities. Therefore, before trading in any security that is not
covered by an Oechsle analyst, you should ensure that the appropriate research
analyst or portfolio manager is aware that you have identified a security that
you believe would be a good investment, and explain the basis for your interest
in the security. If, after receiving that information, the analyst or portfolio
manager does not wish to recommend the security for investment by Oechsle
clients, you are free to trade, after securing the necessary pre-approvals. If
the analyst or portfolio manger expresses an interest in that security, however,
you must refrain from trading in that security until a decision has been made as
to whether to purchase that security for Oechsle clients and until any
applicable blackout period has expired.
In addition, if one of your personal securities holdings could create a conflict
of interest, or even a potential conflict of interest, with the interest of an
Oechsle client, you must disclose that conflict or potential conflict to the
appropriate analysts or portfolio managers before participating in any decision
that could affect the security you hold. For example, if you are an
5-10
<PAGE>
analyst, and if you are recommending that Oechsle should purchase for client
accounts securities of any company whose securities you hold personally, you
must disclose the fact that you own the securities to the portfolio manager(s)
who will make that purchase decision before making your recommendation.
Similarly, if you are a portfolio manager and you want to purchase for client
accounts securities of any company whose securities you hold personally, you
must disclose the fact that you own the securities to someone else involved in
investment decisions BEFORE initiating the purchase. Please bear in mind, that
although not prohibited, as a general matter, Oechsle does not expect that
portfolio managers will hold the same securities as the Accounts that they
manage.
WAIVERS
A written request for a waiver from the prohibited transaction rules may be
granted by the Senior Compliance Officer after consultation with the applicable
personnel, upon a determination that the waiver is warranted to avoid undue
hardship to the employee and that none of the abuses or potential abuses that
the Code is designed to prevent would occur. Seeking waivers is not encouraged
and waivers will not be granted routinely.
REPORTING
Each Oechsle employee is responsible for complying with the following
reporting requirements:
1. COPIES OF CONFIRMATIONS:
Each Oechsle employee must instruct each broker-dealer with whom he or she
maintains an account, and with respect to all other accounts as to which the
employee is deemed to have beneficial ownership, to send promptly to the
Compliance Officer a copy of all transaction confirmations generated for the
account. For your convenience, a form letter for requesting such confirmations
to be sent to Oechsle is attached as part of Exhibit A.
Confirmations must include the account description, trade date, security
description, number of shares or principal amount of each security, the nature
of the transaction (e.g., purchase, sale, etc.), the total price, and the name
of the institution (e.g., broker, bank, etc.) effecting the transaction.
Each brokerage confirmation received by Oechsle is cross-checked against
pre-clearance forms and quarterly securities transaction reports submitted by
each employee. Copies of all confirmations and associated pre-clearance forms
are retained by the Compliance Officer in the employee's personal securities
transaction file.
In order to ensure that brokerage confirmations are received for all employee
brokerage accounts, all employees are required to complete a Brokerage Account
Form (SEE EXHIBIT B) and to submit an updated form (within 5 business days)
whenever an account is added or deleted. You and members of your immediate
family must disclose promptly every brokerage account that you maintain and
every new brokerage account that you open to the Compliance Officer. In
5-11
<PAGE>
addition, each employee is asked to certify annually that the list of brokerage
accounts that have been reported previously remains complete and accurate.
2. TRANSACTION REPORTS:
Each Oechsle employee must file a Quarterly Securities Transaction Report (SEE
EXHIBIT D) with the Compliance Officer within 10 days after the end of each
quarter, whether or not the employee entered into any personal securities
transactions during that quarter. Quarterly reports are required by the SEC for
all investment company managers and enable Oechsle to double-check that all
personal securities transactions have been appropriately pre-cleared and
reported to Oechsle.
3. ANNUAL ACKNOWLEDGMENT:
By February 28 of each year, every Oechsle employee must sign an acknowledgment
stating that he or she has reviewed, understood, and complied with the
provisions of this Code (SEE EXHIBIT E).
OTHER CONFLICTS OF INTEREST
1. GIFTS OR OTHER PREFERENTIAL TREATMENT:
No Oechsle employee may seek or accept gifts, favors, preferential treatment, or
any special arrangement of material value from certain persons because of the
employee's association with Oechsle. This prohibition applies to anyone who does
business or is soliciting business with any Oechsle entity or Oechsle client, as
well as to any organization (such as any broker, dealer, or investment adviser)
engaged in the securities business.
This rule is intended to permit only the most proper type of customary business
amenities. Listed below are examples of items which would be permitted under
proper circumstances and which are prohibited under the intent of this rule.
These examples are illustrative and not all-inclusive. Notwithstanding these
examples, an Oechsle employee may not, under any circumstances, accept anything
which could lead to or create the appearance of any kind of conflict of
interest. For example, acceptance of any consideration is prohibited if it would
create the appearance of a "reward" or inducement for business conducted with
the person providing the consideration or his employer.
Among items not considered of "material value" which, under proper
circumstances, would be considered permissible are:
(a) Occasional lunches or dinners conducted for business purposes;
(b) Occasional cocktail parties or similar social gatherings conducted for
business purposes;
(c) Occasional attendance at theater, sporting or other entertainment
events; and
(d) Small gifts, usually in the nature of reminder advertising, such as
pens, calendars, etc.
5-12
<PAGE>
Among items of consideration of "material value" which are NOT permitted under
any circumstances are the following:
(a) Any gift over $250 in value, or any accumulation of gifts which in
aggregate exceeds $250 in value from one source in one calendar year;
(b) Entertainment of a recurring nature such as sporting events, theater,
golf games, etc.;
(c) The cost of transportation to a locality outside the Boston
metropolitan area, and lodging or meals while in another locality,
unless such attendance and reimbursement arrangements have been
approved in advance by the General Counsel;
(d) Personal loans to the Oechsle employee on terms more favorable than
those generally available for comparable credit standing and
collateral; and
(e) Preferential brokerage commissions or spreads or allocation of stock
in "hot issue" initial public offerings for the Oechsle employee's
personal trading account.
2. DIRECTORSHIPS AND TRUSTEESHIPS IN OUTSIDE ORGANIZATIONS:
No Oechsle employee may accept a directorship in an unaffiliated company without
the prior notification and written approval of the Senior Compliance Officer.
Persons such as portfolio managers and analysts whose primary responsibilities
include recommending and selecting securities for the accounts of Oechsle
clients will not be granted approval to accept directorships in companies which
might qualify for investment by any Oechsle clients. Approval will be based upon
the determination that the board service would not be inconsistent with the
interests of Oechsle's clients. If board service is authorized, appropriate
procedures will be implemented to ensure that confidential information is not
obtained or used by either the employee or Oechsle.
No Oechsle employee may accept a position as trustee, executor, custodian, or as
any other fiduciary, or as a private investment adviser or counselor for any
outside account, without the prior notification and written approval of the
Senior Compliance Officer.
3. PROVIDING INVESTMENT ADVICE TO OTHERS:
No Oechsle employee may provide investment advice to anyone or manage any
person's portfolio on a discretionary basis, other than for Oechsle clients or
members of the employee's immediate family. Thus, employees should not give
advice to anyone, other than immediate family members, concerning the purchase
or sale of any security. In particular, Oechsle employees may not provide
investment advice for compensation to anyone other than an Oechsle client,
unless the arrangement is disclosed and approved by Oechsle.
4. IMPROPER USE OF FUNDS:
No Oechsle employee may pay, or offer or commit to pay, any amount of
consideration which might be or appear to be a bribe, kickback, or other similar
improper use of funds.
5-13
<PAGE>
5. GENERAL ANTI-FRAUD PROVISION:
No Oechsle employee may violate the anti-fraud provisions of the federal
securities laws and the rules and regulations promulgated thereunder. This
provision covers a broad range of conduct, including, without limitation, the
following:
A. AFFIRMATIVE DUTY TO DISCLOSE. Oechsle employees who own a security, or who
have decided to effect a personal transaction in a security, have an
affirmative duty to disclose this information in the course of any
communication about that security when the purpose or reasonable
consequence of such communication is to influence an Oechsle client to buy,
hold, or sell that security. The disclosure of ownership should be part of
the initial communication but need not be repeated in the case of
continuing communications directed to a specific person.
B. DISCLOSURE OF OECHSLE INFORMATION. No information regarding any Oechsle
client account or actual or proposed securities trading activities of any
Oechsle client may be disclosed outside the Oechsle organization unless the
information has been publicly announced or reported. Oechsle research
information must not be disclosed unnecessarily and never for personal
gain. Information generally about Oechsle and Oechsle clients is
confidential, and should not be disclosed without a valid business purpose.
C. USE OF INFORMATION. No Oechsle employee may use information from any source
in a manner contrary to the interest of, or in competition with, any
Oechsle client. In particular, an Oechsle employee may not invest in a
company which could reasonably be considered as a potential investment for
Oechsle clients and which has not been considered by Oechsle analysts until
determining with appropriate investment personnel that no portfolio
managers have a current interest in the company on behalf of an Oechsle
client. This rule is not intended to prohibit any Oechsle employees from
uncovering and capitalizing on new "investment ideas," but requires that
Oechsle have the first right to such ideas for its clients.
D. "INSIDE" INFORMATION AND INSIDER TRADING.
Neither Oechsle nor any Oechsle employee may utilize "inside" information
about any issuer of securities for personal benefit or the benefit of
clients. Inside information is material information not generally available
to the public. Information is considered "material" if there is a
substantial likelihood that a reasonable investor would consider it
important in making his or her investment decisions, or if it could
reasonably be expected to affect the price of a company's securities. It
need not be so important that it would have changed the investor's decision
to buy or sell. Information that has been disseminated in a way that makes
it available to investors generally (e.g., national business and financial
news wire services, such as Dow Jones and Reuters; national news services,
such as New York Times; SEC reports; brokerage firm reports) is considered
to be public information. But, for example, information given by a company
director to an acquaintance of an impending takeover prior to a public
announcement would be "nonpublic."
5-14
<PAGE>
No Oechsle employee may trade, either personally or on behalf of others, on
material, nonpublic information (insider trading), or communicate such
information to others who trade in violation of the law (tipping). Although the
pre-clearance, reporting, and trade restriction requirements of this Code apply
only to Oechsle employees and their immediate family members, the insider
trading and tipping restrictions reach beyond to prohibit Oechsle employees from
illegally profiting or from funneling illegal profits to any other person. They
also prohibit Oechsle from insider trading or tipping in client accounts.
No Oechsle employee may solicit inside information from any company, whether or
not Oechsle clients own stock of the company or Oechsle analysts follow the
company. In addition, please note that the SEC has adopted a rule specifically
prohibiting trading while in possession of material information about a
prospective tender offer before it is publicly announced or trading during a
tender officer if in possession of information which one has reason to know is
not yet public.
PROCEDURES TO BE FOLLOWED WHEN RECEIVING INSIDE INFORMATION:
Whenever an Oechsle employee receives information that he or she believes to be
material, nonpublic information, he or she should not trade on his or her own
behalf or on behalf of Oechsle clients in the securities to which the
information relates, tip the information to others, or recommend for purchase or
sale such securities, so long as the information remains nonpublic. In addition,
the employee should contact the Senior Compliance Officer, or, in his absence,
the General Counsel immediately and should refrain from disclosing the
information to anyone else, including persons within the Oechsle organization,
unless specifically advised to do so by the Senior Compliance Officer or the
General Counsel.
SANCTIONS
Failure to comply with this Code may adversely affect an Oechsle employee's
performance evaluation, may require the employee to give up any benefit derived
from the violation, may require the employee to refrain from personal trading
for a period, and may lead to termination of employment in appropriate cases.
Penalties under the federal securities laws are also possible in certain
circumstances.
SANCTIONS may include:
1. CAUTION: Administered by the Senior Compliance Officer;
2. WARNING: Administered by the Senior Compliance Officer;
3. FINE: Assessed by the General Counsel, the Chief Operating
Officer, and the Chief Investment Officer;
4. DISMISSAL: Determined by the Executive Committee;
5-15
<PAGE>
5. CIVIL REFERRAL TO THE SEC OR OTHER CIVIL REGULATORY AUTHORITIES:
Determined by the Executive Committee;
6. CRIMINAL REFERRAL: Determined by the Executive Committee.
PROCEDURES:
When potential violations of the Code come to the attention of the Senior
Compliance Officer, he will investigate the matter and inform the General
Counsel. This investigation may include a meeting with the employee. Upon
completion of the investigation, if necessary, the Senior Compliance Officer may
meet with senior management (the Chief Operating Officer and/or the Chief
Investment Officer) or other appropriate parties, and a determination will be
made as to whether any sanction should be imposed. The employee will be informed
of any sanction deemed to be appropriate. If the employee believes that such
sanction is unwarranted, the employee must provide the Senior Compliance Officer
with a written explanation of such belief within 30 days of being informed after
such determination. The Senior Compliance Officer will then arrange for a review
by senior management or other appropriate party and will advise the employee as
to whether the sanction will be imposed, modified, or withdrawn. The employee
will be given an opportunity to submit a written statement to senior management
and may be represented by counsel of his or her own choosing, at his or her own
expense, at his or her election.
The Senior Compliance Officer will maintain a written record of all exceptions
granted from prohibited transactions under this Code.
5-16
<PAGE>
EXHIBIT A
PERSONAL SECURITIES TRANSACTION PRE-CLEARANCE FORM
NAME OF EMPLOYEE: ____________________________
ACCOUNT NAME AND NUMBER: ____________________________
DATE OF TRANSACTION: ____________________________
SECURITY NAME: ____________________________
SECURITY ID NUMBER (CUSIP/SEDOL): ___________________________
COUNTRY: _______________ TYPE OF SECURITY: ______________
NUMBER OF SHARES: ___________ PRICE: ___________________
BUY: ____________ SELL: _________________
IS THIS A LIMIT ORDER OR STOP-LOSS ORDER TRADE: YES / NO
NAME/ADDRESS OF BROKER: _________________________
-------------------------
----------------------------------------------------------
I hereby certify that I am familiar with Oechsle's Code of Ethics, and
that this transaction complies in all material respects with Oechsle's policies.
I am not aware of any material, non-public information concerning this issuer or
the market for its securities, or any pending plans or consideration to purchase
these securities for Oechsle clients.
SIGNATURE: _________________________________ DATE: _______________
AUTHORIZATION
TRADING DESK: _________________________ DATE: ____________
MANAGING PRINCIPAL ___________________ DATE: ____________
COMPLIANCE OFFICER: __________________ DATE: ____________
*IF THIS PRE-CLEARED TRADE IS NOT EXECUTED, PLEASE WRITE CANCELED ACROSS IT AND
SUBMIT A COPY OF THIS CANCELED FORM TO THE COMPLIANCE OFFICER.
EXHIBIT A
5-17
<PAGE>
PERSONAL SECURITIES TRANSACTION PRE-CLEARANCE FORM - (LONDON)
NAME OF EMPLOYEE: ____________________________
ACCOUNT NAME AND NUMBER: ____________________________
DATE OF TRANSACTION: ____________________________
SECURITY NAME: ____________________________
SECURITY ID NUMBER (CUSIP/SEDOL): ___________________________
COUNTRY: _______________ TYPE OF SECURITY: ______________
NUMBER OF SHARES: ___________ PRICE: ___________________
BUY: ____________ SELL: _________________
IS THIS A LIMIT ORDER OR STOP-LOSS ORDER TRADE: YES / NO
NAME/ADDRESS OF BROKER: _________________________
--------------------------
------------------------------------------------------------
I hereby certify that I am familiar with Oechsle's Code of Ethics, and
that this transaction complies in all material respects with Oechsle's policies.
I am not aware of any material, non-public information concerning this issuer or
the market for its securities, or any pending plans or consideration to purchase
these securities for Oechsle clients.
SIGNATURE: _________________________________ DATE: _______________
AUTHORIZATION
TRADING DESK: ___________________________ DATE: ____________
MANAGING PRINCIPAL: ____________________ DATE: ____________
COMPLIANCE OFFICER: ____________________ DATE: ____________
*IF THIS PRE-CLEARED TRADE IS NOT EXECUTED, PLEASE WRITE CANCELED ACROSS IT AND
SUBMIT A COPY OF THIS CANCELED FORM TO THE COMPLIANCE OFFICER.
EXHIBIT A
5-18
<PAGE>
SAMPLE LETTER TO SEND TO YOUR BROKER
TO REQUEST DUPLICATE ACCOUNT INFORMATION
[Broker-Dealer Name]
[Broker-Dealer Address]
RE: Account Number(s)
Dear [Broker]:
Please send a duplicate copy of all trade confirmations (NOT the monthly
statements) relating to the account(s) listed above to:
James Record
Compliance Officer
Oechsle International Advisors, LLC
One International Place, 23rd Floor
Boston, MA 02110
Very truly yours,
[Employee Name]
5-19
<PAGE>
EXHIBIT B
LIST OF BROKERAGE ACCOUNTS IN WHICH YOU HAVE DIRECT OR INDIRECT BENEFICIAL
OWNERSHIP*
ANNUAL CERTIFICATION
- --------------------------------------------------------------------------------
NAME OF
BROKER NAME BROKER ADDRESS ACCOUNT NUMBER ACCOUNT HOLDER RELATIONSHIP
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Name of Employee___________________________________________________
(Print)
I certify that I have disclosed to Oechsle all brokerage accounts in which I
have a direct or indirect beneficial interest.
Signature___________________________________________________________
*Beneficial ownership is explained in the Code of Ethics.
5-20
<PAGE>
EXHIBIT C
PRIVATE PLACEMENT APPROVAL REQUEST
EMPLOYEE NAME: ___________________________ DATE: ______________
1. COMPANY NAME: ______________________________________
2. Business Operations Summary:
3. Who contacted you regarding this investment? _______________________
4. Which firm/company employs this individual? _______________________
5. Does this individual or firm have a relationship with Oechsle or Oechsle
clients? If so, please explain.
- ------------------------------------------------------------------------
6. What is the individual's role within the company?___________________________
7. What is your relationship to the individual?________________________________
8. What is the total amount of the private placement?__________________________
9. What is the value of your proposed investment?_____________________________
10. Does this company have publicly traded securities?_________________________
11. Is this investment suitable for Oechsle clients? Yes ______ No _______
If not, please explain.
-----------------------------------------------------------------
-----------------------------------------------------------------
- -------------------------------------
Employee Signature
Approved _______ Disapproved ______
Managing Principal _______________________ Date: ______________
Senior Compliance Officer _______________ Date: ______________
5-21
<PAGE>
EXHIBIT D
QUARTERLY TRANSACTION REPORT
October 1 - December 31, XXXX
The following is a record of every transaction in which I had, or by reason of
which I acquired, any direct or indirect beneficial ownership in securities from
October 1 - December 31, XXXX excluding transactions which do not have to be
reported under Oechsle's Code of Ethics.
I had no securities transactions for the quarter: __
I had the following transactions:
- --------------------------------------------------------------------------------
Account Name / Trade Buy / # of Price Name and Description Broker/Dealer
(Number) Date Sell shares (ID # ) of Security
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- ------------------------------ ------------------------------
Signature Date
- ----------------------------
Print Name
5-22
<PAGE>
EXHIBIT E
OECHSLE INTERNATIONAL ADVISORS, LLC
CODE OF ETHICS
ANNUAL CERTIFICATION
I have received a copy of Oechsle International Advisors, LLC's Code of Ethics,
dated July 29, 1999, I have read it and understand it.
I understand that, as a condition of my employment, I am required to comply with
the Code of Ethics. I agree to comply with all provisions of the Code of Ethics,
including, but not limited to, those governing personal securities transactions.
I certify that to the best of my knowledge I have complied with the terms of the
Code of Ethics during the most recent calendar year.
I authorize Oechsle to furnish the information contained in any report of
securities transactions filed by me with the General Counsel or the Compliance
Officer to such federal, state, and self-regulatory authorities as may be
required by law or by applicable rules and regulations.
I certify that I have disclosed to Oechsle all brokerage accounts in which I
have a beneficial interest, and that I have authorized each such brokerage firm
to send directly to Oechsle duplicate copies of all transaction confirmations
for such accounts.
- --------------------------------
Date
- ---------------------------------
Name (Print)
- ----------------------------------
Signature of Employee
5-23
<PAGE>
CODE OF ETHICS
Robert W. Baird & Co. Incorporated
BAIRD/ A Northwestern Mutual Company
January 2000
<PAGE>
CODE OF ETHICS
1. Regulatory Requirements/Statement of Purpose
Robert W. Baird & Co. Incorporated ("Baird") is a full-service
broker-dealer. Offering investment advice is only part of Baird's business;
however, Baird is also a registered investment adviser. Baird offers investment
advice through several departments including: Baird Investment Management, Baird
Advisors, the Gellman Group, Investment Consulting Services, Financial Planning
Department, Cornerstone Asset Allocation Services, and Baird Private Investment
Management (collectively referred to as "Baird Investment Advisory
Departments"). At any time, Baird's investment advisory clients ("Advisory
Clients") may include individuals, pension and profit sharing plans, trusts and
estates, charitable organizations, banks and thrift institutions, investment
companies, corporations and other business entities. Baird is the principal
underwriter for an affiliated investment company and the distributor for several
unaffiliated investment companies. Baird's activities as an investment adviser
subject it to various requirements under the securities laws. This Code of
Ethics applies to all Associates whose responsibilities place them in a
potential conflict of interest with Baird's Advisory Clients.
Baird's duties to its Advisory Clients require, among other things,
that neither Baird nor its Associates compete with its Advisory Clients for
investment opportunities. This requirement must be met whether the opportunity
involves a particular security or a matter of market timing or, as in the case
of trading in a personal account before making trades for Advisory Clients
("front running"), both. Therefore, Baird must take all steps necessary to
ensure that not only the firm's transactions but also Associates' personal
investment and outside business activities are conducted in a manner that avoids
both actual conflicts of interest and the appearance of any abuse of the
position of responsibility and trust inherent in the relationship with Baird's
Advisory Clients. To accomplish this result, Baird will, at all times:
(A) Place the interests of Advisory Clients before firm or
individual Advisory Representative interests; and
(B) Require that Baird Advisory Representatives conduct all
personal securities transactions in a manner consistent with
this Code of Ethics to avoid any actual or potential conflicts
of interest or any abuse of their position of trust and
influence.
Transactions will be reviewed for compliance with both the letter and
the spirit of this Code of Ethics. As a consequence, if the effect of a personal
investment by an Advisory Representative conflicts with that of an Advisory
Client or deprives an Advisory Client of an investment opportunity otherwise
available to such Advisory Client, that transaction is nevertheless prohibited
by the Code of Ethics. Technical compliance with the provisions of this Code of
Ethics will not excuse failure to adhere to either the general principle of
fiduciary duty or the appropriate standards of professional responsibility.
1
<PAGE>
2. Preclearance Procedures
Unless the transaction is exempt under section four below, each
Advisory Representative shall request the written approval of their immediate
supervisor before initiating a transaction in securities for their personal
account. Such approval may be reflected on a Transaction Request Form initialed
by the supervisor. A copy of the form is attached as Exhibit A below.
Supervisory approval is valid only on the business day on which it is received.
If the transaction is not effected on the date approved, the Advisory
Representative must submit a new request for approval. No supervisor may approve
the requested transaction if the transaction would violate the guidelines
described in section three below. Also, no supervisor may knowingly approve a
request if the transaction would deprive an Advisory Client of an investment
opportunity.
If Advisory Clients effect transactions in any security that becomes a
prohibited transaction described in section three below, such transaction will
be canceled by the Compliance Department. Any losses sustained during the
intervening period shall be the sole responsibility of the Advisory
Representative. If the securities increased in value during the intervening
period, any profit on the transaction shall be donated to a charitable
organization designated by Baird.
The supervisor, in giving approval, should consider whether the
Advisory Representative has any direct or indirect professional or business
relationship with the issuer or if the proposed transaction has any substantial
economic relationship to any securities being considered for purchase or sale
for Advisory Clients. An Advisory Representative has a direct or indirect
professional relationship with the issuer if, for example, the Advisory
Representative provides consulting services to the issuer, or is an officer or
director of the issuer or its affiliates. A professional relationship may also
exist if an Advisory Representative's immediate family member has such a
relationship with an issuer or its affiliates.
The Advisory Representative is in the best position to know whether
additional information is necessary. However, a supervisor should only approve
proposed transactions after considering whether any additional information may
be required. Please call the Compliance Department or the Legal Department
before approval is granted if you have any questions regarding transaction
approval.
The immediate supervisor for the Advisory Representative who exercises
discretion over Advisory Client transactions is generally the Branch Office
Manager or the Department Manager for the Baird Investment Advisory Department
or their delegate. However, to the extent that a Baird Branch Officer Manager is
the Advisory Representative, the Regional Sales Manager or designated
individuals from the Compliance or Legal Department shall review the
transaction. In the event that the Advisory Representative's immediate
supervisor is unavailable, the request should be submitted to the next higher
level supervisor. Any preclearance authorization required for Senior Management
will be reviewed by the Investment Advisory Oversight Committee or personnel as
appointed by such Committee.
2
<PAGE>
3. Prohibitions
(A) Personal Investments
Each Baird Associate who provides investment supervisory services for
Advisory Clients, or who is working for or with such Associate, shall be
considered an Advisory Representative and subject to this Code of Ethics. In
each case, Advisory Representatives shall follow the preclearance procedures
described in section two above. In any event, no Advisory Representative shall
purchase or sell, directly or indirectly, any security which he or she has, or
by reason of such transaction acquires, any direct or indirect beneficial
ownership and which he or she knows or should have known at the time of such
purchase or sale is:
(i) the subject of an initial public offering in any
equity securities or securities convertible into
equity securities; or,
(ii) offered pursuant to a private placement memorandum
unless the Baird employee who is designated an
Advisory Representative requests and receives the
prior written approval of Senior Management, their
Branch Officer Manager or the Compliance Department,
as the case may be. Such written approval may be
granted only after consideration of, among other
things, whether such investment opportunity should be
reserved for the Advisory Clients and whether such
Advisory Representative is being offered the
opportunity as a result of his position as an
Advisory Representative. If an Advisory Client later
decides to purchase securities of an issuer the
shares of which have been previously obtained for
personal investment by an Advisory Representative,
that investment decision shall be subject to an
independent review by the Investment Advisory
Oversight Committee or such other person whom the
Committee may appoint which person shall have no
personal interest in the issuer; or,
(iii) prohibited by the guidelines described in more detail
below.
These prohibitions do not prevent Baird Advisory Representatives from
owning or purchasing securities which may be owned or held by one or more
Advisory Clients. Certain transactions, however, shall be permitted only if the
Advisory Representative's personal transaction occurs at least seven days before
or after the Advisory Client transaction, as the case may be. In an effort to
avoid any assertion that the Advisory Representative could benefit from an
Advisory Client transaction which could move the security price up, Advisory
Representatives may not:
- Sell personally held securities until at least seven days
after Advisory Clients have completed purchases,
or,
3
<PAGE>
- Buy securities in a personal transaction unless no Advisory
Client purchases the security for at least seven days
following a personal transaction.
Similarly, to attempt to prevent Advisory Representatives from
profiting as a result of Advisory Client transactions which have the ability to
decrease the security price, Advisory Representatives may not:
- Buy securities in a personal transaction until at least seven
days after Advisory Clients have sold the security,
or,
- Sell securities from a personal account unless no Advisory
Clients sell the securities for at least seven days following
the personal transaction.
The Advisory Representative may engage in transactions that are
consistent with the following general guidelines:
- The Advisory Representative may buy a security that has been
purchased for Advisory Clients if the Advisory Representative
purchases at least one business day after purchasing the
security for Advisory Clients;
or,
- The Advisory Representative may sell a security that has been
sold for Advisory Clients if the Advisory Representative sells
at least one business day after selling the security for
Advisory Clients;
or,
- The Advisory Representative may buy a security that will be
sold for Advisory Clients if the Advisory Representative
purchases at least one business day before selling the
security for Advisory Clients;
or,
- The Advisory Representative may sell a security that will be
purchased for Advisory Clients if the Advisory Representative
sells at least one business day before purchasing the security
for Advisory Clients.
or,
4
<PAGE>
- The Advisory Representative may buy or sell a security on the
same day that the security will be traded for Advisory Clients
if the market capitalization of the security equals or exceeds
three billion dollars ($3,000,000,000) on the day of the
transactions and the transaction for the Advisory
Representative does not represent, either at the time of the
transaction or upon conversion, the purchase or sale of more
than one thousand (1000) shares of common stock and the
Advisory Representative's transaction is effected subsequent
to Advisory Client transactions.
These guidelines do not set forth all possible combinations of
securities transactions; however, any proposed transactions shall be reviewed
during the preclearance process using these, or similar constraints. In some
cases, a supervisor may grant appropriate exceptions based on the facts. If
Advisory Client transactions occur within the one or seven day periods and are
not transactions in securities in excess of $3,000,000,000 market
capitalization, as the case may be, the personal transaction shall be canceled
as described in more detail in section two above.
The prohibitions regarding the purchase of securities related to
Advisory Clients whose accounts are managed within one Baird Investment Advisory
Department will not similarly apply to all other Baird Investment Advisory
Departments unless the facts and circumstances demonstrate that the separate
departments had knowledge of the investment advice being provided to Advisory
Clients in other departments. Prohibitions regarding transactions in securities
will result from knowledge reasonably obtainable by the individual Advisory
Representative based upon their duties within a particular Baird Investment
Advisory Department.
(B) Outside Business Activity
All Baird Associates must be careful to avoid even the appearance of
conflicts of interest and divided loyalty. Additional restrictions may be
imposed upon Baird Advisory Representatives due to their particular Advisory
Client relationships. No Baird Associate who is an Advisory Representative may
engage in outside business activities including, but not limited to, outside
directorships or officerships in another company; a partnership, consultancy or
relationship with another entity; or a financial interest as a shareholder in
another business without receiving the prior approval of Senior Management. The
Advisory Representative should provide the Compliance Department with a written
description of all pertinent facts regarding the prospective activity. This
material will be reviewed by Senior Management and Senior Management will
provide a written response discussing its review of the proposed activity.
(C) Gifts or Gratuities
As discussed in Section E of the Baird Associate Handbook, it is
Baird's policy that neither Associates nor members of their immediate families
shall seek favors, gifts, entertainment or the equivalent from outside suppliers
of goods and services.
5
<PAGE>
In keeping with this policy, no Baird Associate who is an Advisory
Representative may give or accept gifts or gratuities of more than a nominal
amount to or from any person or entity that does business with or on behalf of a
Baird Fund or an Advisory Client. Therefore, an Advisory Representative may give
or accept gifts or gratuities subject to a maximum of $100.00 per year to or
from any one source.
4. Exempted Transactions
The prohibitions and preclearance obligations of this Code of Ethics
shall not apply to:
(A) purchases or sales effected in any account over which an
"Advisory Representative," as defined below, has no direct or
indirect influence or control.
(B) purchases or sales of securities which are not eligible for
purchase or sale by the Advisory Clients according to the
terms of the written investment philosophy statement for
Advisory Clients of the Advisory Representative. Investments
in private placements of securities, however, are not excluded
and such investments must be approved prior to purchase.
(C) changes in ownership positions related to stock splits, stock
dividends or other similar actions by an issuer as well as
purchases or sales of securities which are the result of a
stock delivery upon option exercise by a contra party.
(D) purchases of securities which are part of an automatic
dividend reinvestment plan.
(E) purchases of securities effected upon the exercise of rights
issued by any issuer PRO RATA to all holders of a class of its
securities, to the extent that such rights were acquired from
such issuer, and sales of such rights so acquired.
5. Reporting Requirements
The Compliance Department will supply to each Advisory Representative a
list of personal transactions as reported to the Compliance Department each
month in the form attached as Exhibit B to this Code of Ethics. Each month the
Advisory Representative must promptly review this report and either correct any
inaccurate information or acknowledge in writing that no other transactions were
undertaken. The monthly reports will be provided to Advisory Representatives in
the following circumstances.
(A) All Advisory Representatives shall conduct personal investment
transactions in one or more accounts held at Baird. These
accounts shall be designated as Advisory Representative
accounts and duplicate information will be forwarded to the
Advisory Representative's Branch Officer Manager or Supervisor
and the Compliance Department. On at least a monthly basis,
the Advisory Representative shall review a record of personal
account transactions as provided by the Compliance Department
and affirm, in writing that:
6
<PAGE>
(i) Each security transaction record reflects all
transactions for the preceding month in which such
Advisory Representative has any direct or indirect
beneficial interest.
or,
(ii) No transactions were effected during the month for
the Advisory Representative.
(B) (i) No Advisory Representative shall open or maintain an
account with a broker-dealer other than Baird without
receiving the prior written approval of the
Investment Advisory Oversight Committee. If approved,
such Baird Advisory Representative shall submit all
pertinent information regarding external accounts to
the Compliance Department and direct such
broker-dealer to deliver duplicate copies of
confirmations and monthly statements to the
Compliance Department; and,
(ii) Each Advisory Representative who is permitted to
maintain an account at a broker-dealer other than
Baird shall after receiving a report from the
Compliance Department which reflects transactions
made during the preceding month affirm in writing
that either:
(a) Each security transaction record reflects
all transactions for the preceding month in
which such Advisory Representative has any
direct or indirect beneficial interest.
or,
(b) No transactions were effected during the
month for the Advisory Representative.
(C) Each Advisory Representative who engages in transactions in
private placements of securities or other securities
transactions not effected in such Advisory Representative's
brokerage account shall submit a Monthly Report in the same
form as Exhibit B which shall clearly identify all pertinent
information regarding such securities transactions.
(D) Each Advisory Representative must file an annual statement
certifying that the Advisory Representative has received a
copy of the Code of Ethics, understands
7
<PAGE>
his or her duties pursuant to the Code of Ethics and, for
other than newly designated Advisory Representatives, has
complied with the requirements of such Code of Ethics during
the past year. Newly designated Advisory Representatives must
certify that they have complied with the Code for that period
of the year during which they were subject to the reporting
requirements. The Baird Compliance Department shall distribute
the acknowledgment to each Advisory Representative for review
and execution.
6. Sanctions
Upon discovering a violation of the Code of Ethics, Baird may impose
appropriate sanctions. The sanctions for inappropriate trading activities or
knowingly filing false reports may include, among others, disgorgement of
profits, fines or suspension or termination of employment. Sanctions may be also
be imposed for incomplete or untimely reports.
7. Definitions
(A) "Advisory Clients" include accounts for which a Baird
Investment Advisory Department provides investment supervisory
services including any registered management investment
company clients. Advisory Clients do not include retail or
institutional accounts of registered representatives or their
families unless those accounts participate in one or more
services provided by Baird in its business as an investment
adviser.
(B) "Advisory Representative" means
(i) any officer, director, or employee of Baird or any member
of such person's immediate family (as defined in NASDR rules
on free-riding and withholding)
- who makes any recommendation to Advisory Clients; or
- who participates in the determination of which
recommendations shall be made to Advisory Clients; or
- whose functions or duties relate to the determination
of which recommendations shall be made to Advisory
Clients; or
- who, in connection with his or her regular duties
obtains any information regarding securities
recommendations to Advisory Clients prior to the
publication of such recommendations; and
(ii) any person in a control relationship to Baird,
or any affiliated person of such controlling person
or any affiliated person of such affiliated person
who, prior to the effective dissemination of such
recommendations,
8
<PAGE>
regularly obtains information concerning the
securities recommendations of Baird to its Advisory
Clients.
(C) "Affiliate" shall mean (i) any person directly or indirectly
owning, controlling, or holding with power to vote, 5 per
centum or more of the outstanding voting securities of such
other person; (ii) any person 5 per centum or more whose
outstanding voting securities are directly or indirectly
owned, controlled, or held with power to vote, by such other
person; (iii) any person directly or indirectly controlling,
controlled by, or under common control with, such other
person; (iv) any officer, director, partner, copartner, or
employee of such other person; (v) if such other person is an
investment company, any investment adviser thereof or any
member of an advisory board thereof; and (vi) if such other
person is an unincorporated investment company not having a
board of directors, the depositor thereof.
(D) A security is "being considered for purchase or sale" when a
recommendation or decision to purchase or sell has been made
by an Advisory Representative and communicated, and, with
respect to the individual making the recommendation, when such
person seriously considers making such a recommendation.
(E) "Beneficial Ownership" shall be interpreted in the same manner
as it would be in determining whether a person is subject to
the provisions of Section 16 of the Exchange Act of 1934 and
the rules and regulations thereunder, except that the
determination of direct or indirect beneficial ownership shall
apply to all securities which an Advisory Representative has
or acquires.
(F) "Control" shall mean the power to exercise a controlling
influence over the management or policies of a company, unless
such power is solely the result of an official position with
such company.
(G) "Purchase or sale of a security" includes the buying or
writing of an option to purchase or sell a security and the
purchase or sale of instruments WHICH MAY BE CONNECTED TO
securities the Advisory Client holds or intends or proposes to
acquire.
(H) "Security" shall mean any note, stock, treasury stock, bond,
debenture, evidence of indebtedness, certificate of interest
or participation in any profit-sharing agreement,
collateral-trust certificate, preorganization certificate or
subscription, transferable share, investment contract,
voting-trust certificate, certificate of deposit for a
security, fractional undivided interest in oil, gas, or other
mineral rights, any put, call, straddle, option, or privilege
on any security (including a certificate of deposit) or on any
group or index of securities (including any interest therein
or based on the value thereof), or any put, call, straddle,
option, or privilege entered into on a national securities
exchange relating to foreign currency, or, in general, any
interest or instrument commonly known as a
9
<PAGE>
"security," or any certificate of interest or participation
in, temporary or interim certificate for, receipt for,
guarantee of, or warrant or right to subscribe to or purchase,
any of the foregoing, except that it shall not include shares
of non-affiliated investment companies(1) or securities which
are direct obligations of the Government of the United States.
- --------
(1) SEE, Transamerica Advisors, Inc. (November 4, 1988).
10
<PAGE>
BAIRD ADVISORY REPRESENTATIVE PRECLEARANCE ORDER TICKET
<TABLE>
<S><C>
- ------------------------------------------------------------------------------------------------------------------------------------
/ / LISTED / / OTC AGENCY / / FIXED INCOME / / OPTION / / CANCEL DATE: _________________________________
- ---- -------- ---------------- -------------- ------------------------------------------- --------------------- --------------------
QUANTITY SYMBOL CUSIP PRICE LIMIT PRICE EXECUTED
B
CALL
U -------------------------------------------
SECURITY DESCRIPTION
Y
PUT
/ /OPEN / /CLOSE / /COVERED / /UNCOVERED
- ------------------------------------------------------------------------------------------------------------------------------------
/ / STP / / STP LMT / / OB / / NH / / DNR / / AON / / CLO / / WOW / / ND / / CASH / /
__________________
- ----------------- --------------------- ------------------------ ------------------------ ------------------------------------------
COUPON RATE MATURITY PRINCIPAL ACCRUED INTEREST SOLD NET AMOUNT
- --------------------------------------- --------- -------------- ------------------------ ------------------------------------------
ACCOUNT NUMBER T REP # / / COMMISSION ACCOUNT TYPE
TTO
1/ /CASH 4/ /W/I
2/ /MARGIN 6/ /SHORT
/ / TOTAL
$_________
- ----------------------------------------------------------------- ------------------------------------------
ACCOUNT NAME / / DISC.
%_________ S/N / / SOLICITED
/ / UNSOLICITED
/ / RATE/SH ________
/ / GRS ________
- ----------------------------------------------------------------- ----------------------- ------------------
INVESTMENT ADVISORY REP NAME OFFSET/BOLT # CONTRA/EXCH
/ / WRAP (NO COMMISSION)
------------------------------------------------------------------
TRADE DATE SETTLEMENT DATE
/ / / /
- ------------------------------------------------------------------------------------------------------------------------------------
WITH RESPECT TO THE ABOVE TRANSACTION, I HEREBY MAKE THE FOLLOWING REPRESENTATIONS AND WARRANTIES:
1) I DO NOT POSSESS ANY MATERIAL NONPUBLIC INFORMATION REGARDING THE SECURITY OR THE ISSUER OF THE SECURITY.
2) THE SECURITY IS NOT BEING ACQUIRED IN AN INITIAL PUBLIC OFFERING.
3) THE SECURITY IS NOT BEING ACQUIRED IN A PRIVATE PLACEMENT OR, IF IT IS, IT IS BEING ACQUIRED IN COMPLIANCE WITH THE CURRENT
CODE OF ETHICS.
4) THE SECURITY IS NOT BEING ACQUIRED IN CONJUNCTION WITH A DISTRIBUTION OF STOCK CONSIDERED TO BE A "HOT ISSUE" AS DEFINED BY
THE NASD (UNLESS OTHERWISE EXCEPTED BY NASD CONDUCT RULES).
5) IF I AM A PORTFOLIO MANAGER, NONE OF THE ACCOUNTS I MANAGE PURCHASED OR SOLD THIS SECURITY WITHIN THE PREVIOUS SEVEN
CALENDAR DAYS AND I DO NOT ANTICIPATE THAT ANY SUCH CLIENT ACCOUNTS WILL PURCHASE OR SELL THIS SECURITY WITHIN SEVEN
CALENDAR DAYS OF MY PURCHASE OR SALE, UNLESS OTHERWISE EXCEPTED BY THE CODE.
6) IF I AM A DESIGNATED ACCESS PERSON, AS DEFINED BY THE CODE OF ETHICS, I ATTEST THAT NONE OF THE ACCOUNTS, FOR WHICH I HAVE
BEEN SO DESIGNATED, PURCHASED OR SOLD THIS SECURITY WITHIN THE PREVIOUS SEVEN CALENDAR DAYS AND I DO NOT ANTICIPATE THAT
ANY SUCH CLIENT ACCOUNTS WILL PURCHASE OR SELL THIS SECURITY WITHIN SEVEN CALENDAR DAYS OF MY PURCHASE OR SALE, UNLESS
OTHERWISE EXCEPTED BY THE CODE.
7) I HAVE READ THE CURRENT BAIRD CODE OF ETHICS AND BELIEVE THAT THE PROPOSED TRADE FULLY COMPLIES WITH THE REQUIREMENTS OF
THE CODE.
INVESTMENT ADVISORY REP REQUESTING APPROVAL ___________________________________________
DATE AND TIME OF REQUEST ___________________________________________
- ------------------------------------------------------------------------------------------------------------------------------------
SUPERVISOR APPROVAL ___________________________________________
DATE AND TIME OF APPROVAL ___________________________________________
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
BAIRD ADVISORY REPRESENTATIVE PRECLEARANCE ORDER TICKET
<TABLE>
<S><C>
- ------------------------------------------------------------------------------------------------------------------------------------
/ / LISTED / / OTC AGENCY / / FIXED INCOME / / OPTION / / CANCEL DATE: _________________________________
- ---- -------- --------- --------------- --------------- --------------------------------- --------- -------------- -----------------
QUANTITY SYMBOL CUSIP PRICE LIMIT PRICE EXECUTED
S SHORT
SALE CALL
E / / -------------------------------------------
SECURITY DESCRIPTION
L LONG
SALE PUT
L / / / /OPEN / /CLOSE / /COVERED / /UNCOVERED
- ------------------------------------------------------------------------------------------------------------------------------------
/ / STP / / STP LMT / / OB / / NH / / DNR / / AON / / CLO / / WOW / / ND / / CASH / /
__________________
- ----------------- --------------------- ------------------------ ------------------------ ------------------------------------------
COUPON RATE MATURITY PRINCIPAL ACCRUED INTEREST SOLD NET AMOUNT
- --------------------------------------- --------- -------------- ------------------------ ------------------------------------------
ACCOUNT NUMBER T REP # / / COMMISSION ACCOUNT TYPE
TTO
1/ /CASH 4/ /W/I
2/ /MARGIN 6/ /SHORT
/ / TOTAL
$_________
- ----------------------------------------------------------------- ------------------------------------------
ACCOUNT NAME / / DISC.
%_________ S/N / / SOLICITED
/ / UNSOLICITED
/ / RATE/SH ________ ----------------------- ------------------
- ----------------------------------------------------------------- OFFSET/BOLT # CONTRA/EXCH
SELLER CODE / / GRS ________
U / / LONG - DEL FORM X / / INSTR SENT - OTHER ----------------------- ------------------
V / / LONG - NEED STK PWR Z / / LONG - EXCH SEC TRADE DATE SETTLEMENT DATE
W / / CLIENT WILL DELIVER Y / / SHORT SALE APPROVED BY / /WRAP (NO COMMISSION) / / / /
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT ADVISORY REP NAME
- ------------------------------------------------------------------------------------------------------------------------------------
WITH RESPECT TO THE ABOVE TRANSACTION, I HEREBY MAKE THE FOLLOWING REPRESENTATIONS AND WARRANTIES:
8) I DO NOT POSSESS ANY MATERIAL NONPUBLIC INFORMATION REGARDING THE SECURITY OR THE ISSUER OF THE SECURITY.
9) IF I AM A PORTFOLIO MANAGER, NONE OF THE ACCOUNTS I MANAGE PURCHASED OR SOLD THIS SECURITY WITHIN THE PREVIOUS SEVEN
CALENDAR DAYS AND I DO NOT ANTICIPATE THAT ANY SUCH CLIENT ACCOUNTS WILL PURCHASE OR SELL THIS SECURITY WITHIN SEVEN
CALENDAR DAYS OF MY PURCHASE OR SALE (UNLESS OTHERWISE EXCEPTED BY THE CODE).
10) IF I AM A DESIGNATED ACCESS PERSON, AS DEFINED BY THE CODE OF ETHICS, I ATTEST THAT NONE OF THE ACCOUNTS, FOR WHICH I HAVE
BEEN SO DESIGNATED, PURCHASED OR SOLD THIS SECURITY WITHIN THE PREVIOUS SEVEN CALENDAR DAYS AND I DO NOT ANTICIPATE THAT
ANY SUCH CLIENT ACCOUNTS WILL PURCHASE OR SELL THIS SECURITY WITHIN SEVEN CALENDAR DAYS OF MY PURCHASE OR SALE (UNLESS
OTHERWISE EXCEPTED BY THE CODE).
11) I HAVE READ THE BAIRD CODE OF ETHICS WITHIN THE PRIOR 12 MONTHS AND BELIEVE THAT THE PROPOSED TRADE FULLY COMPLIES WITH THE
REQUIREMENTS OF THE CODE.
INVESTMENT ADVISORY REP REQUESTING APPROVAL ___________________________________________
DATE AND TIME OF REQUEST ___________________________________________
- ------------------------------------------------------------------------------------------------------------------------------------
SUPERVISOR APPROVAL ___________________________________________
DATE AND TIME OF APPROVAL ___________________________________________
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
Exhibit B
<TABLE>
<S><C>
Robert W. Baird & Co. Personal Securities Transaction Report for monitored accounts CM4018 1/31/00 Page 1
Month Ending: February, 1997
ACCT:
Xaction Date Trade Date P/S C Symbol Cusip Security Description Quantity Net Amount
- ------------ ---------- --- - ------ ----- -------------------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
TOTAL # XACTIONS:
13
<PAGE>
APPENDIX II
February 1, 2000
RS INVESTMENT MANAGEMENT CO. LLC
RS INVESTMENT MANAGEMENT, L.P.
RS INVESTMENT MANAGEMENT, INC.
RS GROWTH GROUP LLC
RS VALUE GROUP LLC
RS INVESTMENT TRUST
---------------------------
CODE OF ETHICS
including
RSIM POLICY ON PERSONAL TRADING
---------------------------
I. SCOPE AND SUMMARY
(a) Rule 17j-1 under the Investment Company Act of 1940, as amended (the
"1940 Act"), requires every investment company, as well as every investment
adviser to and principal underwriter of an investment company, to have a written
Code of Ethics which specifically deals with trading practices by "Access
Persons." Access Persons are defined to include (1) officers, directors and
general partners of the two mutual fund advisers (RS Investment Management, Inc.
and RS Investment Management, L.P. -- collectively "RSIM"), as well as (2)
employees of RSIM and officers, directors, partners who have substantial
responsibility for or knowledge of the investments of the mutual funds
constituting series of the RS (each, a "Fund"), and (3) each member of the
Funds' Board of Trustees. The Rule also requires that reasonable diligence is
used and procedures instituted to prevent violations of this Code of Ethics.
(b) Sections 21A and 15(f) of the Securities Exchange Act and Section 204A
of the Investment Advisers Act further require all broker-dealers and investment
advisers to establish, maintain and enforce written policies and procedures to
prevent the misuse of material nonpublic information.
(c) Common law fiduciary principles require that an investment adviser
(like RSIM) avoid placing itself in a position of conflict of interest with its
clients. Likewise, RSIM as a general partner to various partnerships, stands in
a fiduciary relationship to the limited partners investing in those
partnerships.
<PAGE>
(d) The "Blue Ribbon" Advisory Group on Personal Investing in its report to
the Investment Company Institute also articulated the following three general
fiduciary principles which the Group believes should govern the personal
investment activities of mutual fund advisory and distributor personnel:
(i) the duty at all times to place the interests of Fund
shareholders first;
(ii) the requirement that all personal securities
transactions be conducted consistent with the Code of
Ethics and in such a manner as to avoid any actual or
potential conflict of interest or any abuse of an
individual's position of trust and responsibility;
and
(iii) the fundamental standard that mutual fund advisory
and distributor personnel should not take
inappropriate advantage of their positions.
(e) This Code of Ethics is designed to satisfy the above-referenced legal
requirements and ethical principles as applicable to RSIM in their roles as
adviser to and distributor for the RSIM Funds. It is important that all
partners, officers, directors and employees of RSIM to whom this Code of Ethics
applies observe the ethical standards set forth in the Code.
(f) This Code of Ethics is not intended to cover all possible areas of
potential liability under the 1940 Act or under the federal securities laws in
general. For example, other provisions of Section 17 of the 1940 Act prohibit
various transactions between a registered investment company and affiliated
persons, including the knowing sale or purchase of property to or from a
registered investment company on a principal basis, and joint transactions
(E.G., combining to achieve a substantial position in a security, concerted
market activity, or commingling of funds) between an investment company and an
affiliated person.
(g) It is expected that Access Persons will be sensitive to all areas of
potential conflict, even if this Code of Ethics does not address specifically an
area of fiduciary responsibility.
(h) Exceptions to specific provisions of this Code of Ethics may be granted
by the compliance officer or an alternate if warranted by circumstances and if
the exception is requested in a timely manner.
(i) SUMMARY. Under the Code of Ethics, all Access Persons, EXCEPT
INDEPENDENT TRUSTEES of the Funds, are required to:
(i) Pre-clear all trades in individual securities. [Note:
certain securities are excepted: mutual funds, stock
index options, SPDR's and money market instruments
are "excepted securities."]
(ii) Reverse trades that involve securities subsequently
purchased or sold by a Fund within the applicable
blackout period.
(iii) Observe a minimum 60 day holding period for all
securities (except "excepted securities"). This
policy only applies to profitable trades.
(iv) Avoid IPO's.
(v) Receive special clearance for private placements.
(vi) Avoid directorships of companies in which Fund assets
may be invested. (Unless permission is obtained from
the CEO.)
<PAGE>
(vii) Promptly disclose all security transactions and file
quarterly transaction reports and annual ownership
reports.
(viii) Avoid security transactions in which they possess
material non-public information with regard to the
particular security.
II. DEFINITIONS
(a) "ACCESS PERSON" means: (i) officers, directors and general partners of
the four mutual fund advisers (RS Investment Management, Inc. and RS Investment
Management, L.P., RS Growth Group LLC and RS Value Group LLC -- collectively
"RSIM"), as well as (ii) employees of RSIM and officers, directors, partners who
have substantial responsibility for or knowledge of the investments of the
mutual funds constituting series of the RS Trust (each, a "Fund"), hedge funds
managed by RSIM, institutional accounts where RSIM acts as a sub-adviser,
separate accounts managed by RSIM and (iii) each member of the Funds' Board of
Trustees. Members of the immediate family of an Access Person living in the same
household are covered by this Code of Ethics to the same extent as the Access
Person.
(b) "ADVISORY PERSON" means with respect to (i) the Funds, (ii) an
investment adviser to a Fund or (iii) any company in a control relationship to
the Funds or the investment adviser (I.E., RSIM), (A) any employee who, in
connection with his regular functions or duties, makes, participates in, or
obtains information regarding, the purchase or sale of a security by a Fund, or
whose functions relate to the making of any recommendations with respect to such
purchases or sales; and (B) any natural person in a control relationship to the
Funds or an investment adviser who obtains information concerning
recommendations made to a Fund with regard to the purchase or sale of a
security.
(c) A security is "BEING CONSIDERED FOR PURCHASE OR SALE" when a
recommendation to purchase or sell a security has been made and communicated,
and, with respect to a person making a recommendation, when such person
seriously considers making such a recommendation.
(d) "BENEFICIAL OWNERSHIP" shall be interpreted in the same manner as it
would be in determining whether a person is subject to the provisions of Section
16 of the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder, with the exception that the determination of direct or
indirect beneficial ownership shall apply to all securities which an Access
Person has or acquires.
(e) "CONTROL" means the power to exercise a controlling influence over the
management or policies of a company, unless such power is solely the result of
an official position, as further defined in Section 2(a)(9) of the 1940 Act.
(f) "PURCHASE OR SALE OF A SECURITY" includes the writing of an option to
purchase or sell a security.
(g) "SECURITY" shall have the meaning set forth in Section 2(a)(36) of the
1940 Act, and shall include options and warrants, except that it shall not
include excepted securities (as defined below).
(h) "EXCEPTED SECURITIES" include shares of registered open-end investment
companies (except the RSIM Funds), securities issued by the Government of the
United States (including Government agencies), short term debt securities which
are "government securities" within the meaning of
<PAGE>
Section 2(a)(16) of the 1940 Act, bankers' acceptances, bank certificates of
deposit, commercial paper and other money market instruments. Stock Index
Options and SPDR's are also considered "excepted securities" for all purposes
except the quarterly and annual reporting obligations.
(i) "MATERIAL NON-PUBLIC INFORMATION" is information relating to dividend
increases or decreases, earnings estimates, changes in previously released
earnings estimates, significant expansion or curtailment of operations, a
significant increase or decline of orders, significant merger or acquisition
proposals or agreements, significant new products or discoveries, extraordinary
borrowing, major litigation, liquidity problems, extraordinary management
developments, purchase or sale of substantial assets or any information a
reasonable investor might consider to be of importance in making an investment
decision to buy, sell or hold. Information should be deemed non-public if it has
not been widely disseminated by wire service, in one or more newspapers of
general circulation, or by communication from the company involved to its
shareholders or in a press release.
III. PROHIBITED TRADING PRACTICES
(a) GENERAL ANTI-FRAUD PROHIBITION. If a security:
(i) is being considered for purchase or sale by a Fund;
(ii) is in the process of being purchased or sold by a
Fund; or
(iii) is or has been held by a Fund within the most recent
15 day period;
no Access Person shall knowingly purchase, sell or otherwise directly or
indirectly acquire or dispose of any direct or indirect beneficial ownership
interest in that security if such action by such Access Person would defraud a
Fund, operate as a fraud or deceit upon a Fund, or constitute a manipulative
practice with respect to a Fund.
(b) PRE-CLEARANCE. No Access Person shall purchase or sell any individual
security (I.E., any security except an "excepted security") without
pre-clearance. Once pre-clearance has been obtained, the trade must be executed
by the end of the business day or new clearance must be obtained. (See attached
Pre-clearance Form).
(c) BLACKOUT PERIOD. An Access Person may not execute a securities
transaction (other than an "excepted security") on any day during which any Fund
in the RSIM Funds complex has a pending "buy" or "sell" order in that same
security or a related security of the same issuer (e.g., common stock is a
related security to an option on common stock). However, it is not always
possible to determine which orders were executed until the following day. The
fact of pre-clearance does not mean that a trade will not end up being unwound
if it is later ascertained that one of the Funds traded in that security on the
same day. Blackout periods may be extended for certain securities. This policy
applies to all Access people.
Additionally, portfolio managers and others who make investment decisions with
respect to a Fund are prohibited for seven (7) calendar days PRECEDING AND
FOLLOWING any Fund purchase or sale of that security and will include the entire
business day on which the last Fund purchase or sale activity occurs. Any
profits realized on a trade effected during the blackout period by a portfolio
manager or other individual with investment decision-making authority will be
disgorged to the appropriate Fund. The blackout period only applies to
securities traded by a Fund or Funds over which the individual exercises
investment decision-making authority. It does not apply to all Funds in the
complex. The fact of pre-
<PAGE>
clearance and execution within the same day of pre-clearance is not relevant.
Blackout periods may be extended for certain securities
(d) TRADES IN SHARES OF RSIM FUNDS. Please note that purchases and sales of
shares of an RS Fund do NOT need pre-clearance, but the possibility of
appearance of conflict of interest in such transactions is high. Accordingly,
all purchases and sales of shares of an RS Fund:
(i) should be made well in advance of the closing price
calculation each day, and
(ii) should not be made when in possession of material
nonpublic information.
(e) NO IPO'S. No Access Person shall acquire any securities offered in an
initial public offering.
(f) PRIVATE PLACEMENTS. No Access Person shall acquire any securities in a
private placement without both pre-clearance and special approval by the CEO.
(g) OTHER RESTRICTIONS. No Access Person shall engage in short term trading
or make other investments in contravention of the general policies that may be
established from time to time as set forth. An Access Person must hold a
security (other than an "excepted security") for a minimum of 60 days. This
policy only applies to profitable trades.
IV. EXEMPTED TRANSACTIONS/SECURITIES
The prohibitions of Section IV of this Code shall not apply to:
(a) Purchases or sales effected in any account over which the Access Person
has no direct or indirect influence or control.
(b) Purchases or sales of securities which are not eligible for purchase or
sale by any Fund.
(c) Purchases or sales which are non-volitional on the part of either the
Access Person or the Trust (E.G., receipt of gifts).
(d) Purchases that are part of an automatic dividend reinvestment plan.
(e) Purchases effected upon the exercise of rights issued by an issuer pro
rata to all holders of a class of its securities, to the extent such rights were
acquired from such issuer, and sales of such rights so acquired.
(f) Purchases and sales which have received the prior approval of the
Compliance Officer.
(g) Purchases and sales of securities, which are not included in the
definition of "Security" in Section II.g or are "excepted securities" as defined
in Section II.h. -- I.E., mutual fund shares (but not RS Fund shares), stock
index options, SPDR's, government securities and money market instruments.
V. REPORTING
(a) PRE-CLEARANCE AND IMMEDIATE REPORTING. All RSIM employees are currently
required to report all individual security transactions (and purchase/sales of
RSIM Funds) under rules specifically applicable
<PAGE>
to advisory and broker-dealer organizations. Access persons must also seek
pre-clearance of individual security transactions and are required to have a
duplicate confirmation of the transaction sent to the RSIM compliance officer
promptly following the transaction. The only securities for which such
pre-clearance and immediate reporting is not required are "excepted securities"
and shares of the RSIM Funds.
(b) QUARTERLY REPORTS. In addition to contemporaneous reporting, all Access
Persons are required to review, and if necessary, correct or make additions to
quarterly reports generated within 10 days of the end of each calendar quarter,
listing all securities transactions except transactions in "excepted
securities." See subsection (c) below. Please note that purchases and sales of
shares of an RSIM Fund, which are not subject to pre-clearance and
contemporaneous reporting, are subject to quarterly reporting.
(c) Every quarterly report shall be made not later than ten (10) days after
the end of each calendar quarter and shall contain the following information:
(i) The date of the transaction, the title and the number
of shares, and the principal amount of each security
involved;
(ii) The nature of the transaction (I.E., purchase, sale,
or any other type of acquisition or disposition);
(iii) The price at which the transaction was effected; and
(iv) The name of the broker, dealer, or bank with or
through whom the transaction was effected.
(d) Copies of statements or confirmations containing the information
specified in paragraph (c) above may be submitted in lieu of listing the
transactions. Persons submitting statements will be deemed to have satisfied
this reporting requirement, and need only sign off quarterly on having complied.
(e) For periods in which no reportable transactions were effected, the
quarterly report shall contain a representation that no transactions subject to
the reporting requirements were effected during the relevant time period.
(f) ANNUAL REPORT. Annually, in conjunction with the quarterly report for
the quarter ending June 30, each Access Person shall be required to review, and
if necessary, correct or make additions to, an annual report, which lists all
security positions in which such Access Person has a direct or indirect
beneficial interest.
(g) Any quarterly or annual report may contain a statement that the report
shall not be construed as an admission by the person making such report that he
has any direct or indirect beneficial ownership in the security to which the
report relates.
(h) An initial holdings report of all securities beneficially owned by such
person and the name of the broker with whom the Access Person maintained a
securities account must be submitted to Scott Smith or Marianne Clark for review
no later than 10 days after an employee of RSIM becomes an Access Person.
VI. EXCEPTIONS TO REPORTING REQUIREMENTS
<PAGE>
(a) An INDEPENDENT TRUSTEE, I.E., a Trustee of the RS Investment Trust who
is not an "interested person" (as defined in Section 2(a)(19) of the 1940 Act)
of the Funds, is NOT required to file a report on a transaction in a security
provided such Trustee neither knew nor, in the ordinary course of fulfilling his
or her official duties as a trustee of the Funds, should have known that, during
the 15-day period immediately preceding or after the date of the transaction by
the Trustee, such security is or was purchased or sold by a Fund or is or was
being considered for purchase or sale by a Fund by its investment adviser.
(b) Although an independent Trustee is exempt from the reporting
requirements of this Code, such Trustee may nevertheless voluntarily file a
report representing that he or she did not engage in any securities transactions
which, to his or her knowledge, involved securities that were being purchased or
sold or considered for purchase by any Fund during the 15-day period preceding
or after the date(s) of any transaction(s) by such Trustee. The failure to file
such a report, however, shall not be considered a violation of this Code of
Ethics.
(c) Access Persons are not required to make a report with respect to an
exempted transactions/securities as described in Section V of this Code.
(d) Access Persons do not need to file multiple reports. Copies of a single
report can be used to satisfy the personal trading reports required by RSIM.
VII. IMPLEMENTATION
(a) In order to implement this Code of Ethics, a compliance officer and
three alternates have been designated for RSIM and the Funds. These individuals
are:
Scott R. Smith
Marianne E. Clark (alternate)
Steven M. Cohen (alternate)
G. Randy Hecht -President and CEO (alternate)
(b) The compliance officer shall create a list of all "Access Persons" and
update the list with reasonable frequency.
(c) The compliance officer shall circulate a copy of this Code of Ethics to
each Access Person, together with an acknowledgment of receipt, which shall be
signed and returned to the Compliance Officer by each Access Person at least
once each year.
(d) The compliance officer or a compliance officer delegate is charged with
responsibility for ensuring that the pre-clearance and reporting requirements of
this Code of Ethics are adhered to by all Access Persons. The compliance officer
or compliance officer delegate shall be responsible for ensuring that the review
requirements of this Code of Ethics (see Section VIII) are performed in a prompt
manner. The compliance officer shall be responsible for enforcing the policies
set forth herein.
VIII. REVIEW
(a) The compliance officer shall review all reports of personal securities
transactions and compare such reports with pre-clearance forms and with
completed and contemplated portfolio transactions of each Fund to determine
whether noncompliance with the Code of Ethics and/or other applicable trading
<PAGE>
procedures may have occurred. The compliance officer may delegate this function
to one or more persons.
(b) No person shall review his or her own reports. Before making any
determination that a non-compliant transaction may have been made by any person,
the compliance officer shall give such person an opportunity to supply
additional explanatory material. If a securities transaction of the compliance
officer is under consideration, an alternate shall act in all respects in the
manner prescribed herein for the designated compliance officer.
(c) If the compliance officer determines that noncompliance with the Code
of Ethics has or may have occurred, he or she shall, following consultation with
counsel, submit his or her written determination, together with the transaction
report, if any, and any additional explanatory material provided by the
individual, to G. Randall Hecht, who shall make an independent determination of
whether a violation has occurred.
(d) The compliance officer shall be responsible for maintaining a current
list of all Access Persons (including all Fund Trustees) and for identifying all
reporting Access Persons on such list, and shall take steps to ensure that all
reporting Access Persons have submitted reports in a timely manner. The
compliance officer may delegate the compilation of this information to
appropriate persons. Failure to submit timely reports will be communicated to G.
Randall Hecht and to the Funds' Board of Trustees.
IX. SANCTIONS
(a) If a material violation of this Code occurs or a preliminary
determination is made that a violation may have occurred, a report of the
alleged violation shall be made to the Board of Trustees.
(b) The Board of Trustees may impose such sanctions as it deems
appropriate, including, a letter of censure, suspension, or termination of
employment, and/or a disgorging of any profits made.
<PAGE>
Please sign and date the attached form.
Detach and return to RSIM Compliance.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
I FULLY UNDERSTAND AND HEREBY SUBSCRIBE TO THIS CODE OF ETHICS.
----------------------------------------------------
NAME
----------------------------------------------------
SIGNATURE
----------------------------------------------------
DATE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
APPENDIX III
February 1, 2000
RS INVESTMENT MANAGEMENT CO. LLC
RS INVESTMENT MANAGEMENT, L.P.
RS INVESTMENT MANAGEMENT, INC.
RS GROWTH GROUP LLC
RS VALUE GROUP LLC
RS INVESTMENT TRUST
---------------------------
POLICY ON PERSONAL TRADING
---------------------------
SUMMARY
The following policy on personal trading, together with the enclosed Code of
Ethics, outlines all existing restrictions on personal securities transactions
for Access Persons of RS Mutual Funds. While it is our belief that personal
investing can lead an individual to be a better, more knowledgeable investor,
these guidelines have been written not only to ensure compliance with relevant
securities laws, but also to protect our investors and prevent any perception of
a potential conflict of interest.
Access Persons are defined as (i) officers, directors and general partners of
the two mutual fund advisers (RS Investment Management, Inc. and RS Investment
Management, L.P. -- collectively "RSIM"), as well as (ii) employees of RSIM and
officers, directors, partners who have substantial responsibility for or
knowledge of the investments of the mutual funds constituting series of the RS
(each, a "Fund"), and (iii) each member of the Funds' Board of Trustees. Members
of the immediate family of an Access Person living in the same household are
covered by this policy to the same extent as the Access Person. The policy also
applies to the immediate families living in the same household of all Access
Persons. The highlights of the policy are as follows:
1) PERSONAL ACCOUNTS
All personal brokerage accounts must be maintained at BancBoston Robertson
Stephens, Charles Schwab or Fidelity Investments. Any exceptions to this policy
must be approved by the Compliance Department.
2) PRE-CLEARANCE
All personal trades for individual securities for all Access Persons must be
pre-cleared by the Compliance Department using the attached form. After
pre-clearance has been granted, the trade must be completed by the end of the
business day, or the approval is void and the form must be resubmitted. Trades
for which pre-clearance is required include ALL SECURITIES EXCEPT, open-end
mutual funds, stock index options, SPDR's, government securities and money
market securities. Obtaining pre-clearance for a trade does not
<PAGE>
guarantee that the trade will not be later reversed should a Fund effect a
subsequent trade in the same security.
3) BLACKOUT PERIODS
An Access Person may not execute a securities transaction (other than an
"excepted securities") on any day during which any Fund in the RSIM Funds
complex has a pending "buy" or "sell" order in that same security or a related
security of the same issuer (e.g., common stock is a related security to an
option on common stock). However, it is not always possible to determine which
orders were executed until the following day. The fact of pre-clearance does not
mean that a trade will not end up being unwound if it is later ascertained that
one of the Funds traded in that security on the same day. Blackout periods may
be extended for certain securities. This policy applies to all Access people.
Additionally, portfolio managers and others who make investment decisions with
respect to a Fund are prohibited for seven (7) calendar days PRECEDING AND
FOLLOWING any Fund purchase or sale of that security and will include the entire
business day on which the last Fund purchase or sale activity occurs. Any
profits realized on a trade effected during the blackout period by a portfolio
manager or other individual with investment decision-making authority will be
disgorged to the Fund. The blackout period only applies to securities traded by
a Fund or Funds over which the individual exercises investment-making authority.
It does not apply to all Funds in the complex. The fact of pre-clearance and
execution within the same day of pre-clearance is not relevant. Blackout periods
may be extended for certain securities.
4) RESTRICTIONS ON SHORT-TERM TRADING
Access Persons are strongly discouraged from entering into securities
transactions for the purpose of achieving short-term gains. In addition to the
general prohibition against acquiring securities in the blackout period before
and immediately following Fund transactions, an Access Person must hold a
security (other than an excepted security, E.G., a stock index option) for a
minimum of 60 days. This policy only applies to profitable trades. Exceptions
may be made in the case of a medical or other emergency, provided that relevant
details are communicated at the time of pre-clearance.
5) INITIAL PUBLIC OFFERINGS
All Access Persons are strictly prohibited from acquiring securities in any
initial public offering.
6) PRIVATE PLACEMENTS
Investments by Access Persons in private placements require both pre-clearance
and special approval from the CEO.
<PAGE>
7) SERVICE AS A DIRECTOR
Portfolio Managers and Access Persons will be permitted to serve as directors of
publicly traded companies and private companies in which the Funds may invest
only if the CEO determines that doing so would be in the best interest and would
not present a conflict of interest. All Fund investment decisions made or
participated in by such Director/Access Persons require pre-clearance from the
CEO.
8) DISCLOSURE
To the extent an Access Person maintains permitted brokerage accounts at
broker/dealers other than BancBoston Robertson Stephens, Charles Schwab & Co.,
or Fidelity Investments that Access Person must ensure that copies of trade
confirmations for their brokerage accounts and accounts of immediate family
living in the same household, are forwarded to the Compliance Department. Trade
confirmations will be cross-referenced against pre-clearance forms to ensure
that approval had been granted. In addition, Access Persons must make required
quarterly reports of securities transactions (or furnish brokerage statements)
and must sign off, at least annually, on receipt of and compliance with the Code
of Ethics.
<PAGE>
[LOGO]
RS INVESTMENT MANAGEMENT
PRE-AUTHORIZATION FOR PERSONAL TRADES
To: RSIM Compliance
Phone: (415) 591-2779
(415) 591-2728
Fax: (415) 591-2851
From: Date:
---------------------------- ------------------
- --------------------------------------------------------------------------------
I wish to effect the following trade for my personal account, an account in
which I have a beneficial interest, or an account belonging to one of my
immediate relatives living in the same household.
NAME of Security TICKER
-------------------------------- -------------------
# OF SHARES BUY SELL (CIRCLE ONE) PRICE
------------ ----------
BROKERAGE FIRM & ACCOUNT #
------------------------ -----------------------
THE PURCHASE/SALE IS BASED ON PERSONAL RESEARCH YES [ ] NO [ ]
(You may be required to provide documentation should there be a potential
conflict).
I AM AWARE OF AN INTENDED OR POSSIBLE MUTUAL FUND TRADE IN THIS SECURITY
YES [ ] NO [ ]
I AGREE THAT IF I DO NOT EFFECT THE ABOVE TRADE ON THE DAY INDICATED BELOW, THE
APPROVAL IS NULL AND VOID AND THE REQUEST MUST BE RESUBMITTED. I REALIZE THAT IF
I AM AN EMPLOYEE WITH INVESTMENT DECISION MAKING AUTHORITY, AND ANY RS FUNDS
TRANSACTIONS OCCUR WITHIN 7 DAYS OF MY TRANSACTION THAT INVOLVE A FUND OVER
WHICH I HAVE AUTHORITY AND THE ABOVE SECURITY, THE TRADE WILL BE BROKEN AT MY
EXPENSE. I REALIZE THAT IF I DO NOT HAVE SUCH AUTHORITY, AND ANY FUND
TRANSACTIONS OCCUR ON THE SAME DAY AS MY TRANSACTION, THE TRADE WILL BE BROKEN
AT MY EXPENSE. FURTHERMORE, I AFFIRM THAT IF THIS IS A SALE OF STOCK, I HAVE
EITHER HELD IT FOR AT LEAST 60 DAYS OR I AM SELLING THE STOCK AT A LOSS.
------------------------------
AUTHORIZED
- -------------------------------- ------------------------------
SIGNED DATE
<PAGE>
PERSONAL INVESTMENT POLICY
FOR
SSB CITI ASSET MANAGEMENT GROUP - NORTH AMERICA
AND CERTAIN REGISTERED INVESTMENT COMPANIES
SSB Citi Asset Management Group ("SSB Citi")(1), and those U.S.-registered
investment companies advised or managed by SSB Citi that have adopted this
policy ("Funds"), have adopted this policy on securities transactions in order
to accomplish two goals: first, to minimize conflicts and potential conflicts of
interest between employees of SSB Citi and SSB Citi's clients (including the
Funds), and between Fund directors or trustees and their Funds, and SECOND, to
provide policies and procedures consistent with applicable law, including Rule
17j-1 under the Investment Company Act of 1940, to prevent fraudulent or
manipulative practices with respect to purchases or sales of securities held or
to be acquired by client accounts. ALL U.S. EMPLOYEES OF SSB CITI, INCLUDING
EMPLOYEES WHO SERVE AS FUND OFFICERS OR DIRECTORS, AND ALL DIRECTORS OR TRUSTEES
("DIRECTORS") OF EACH FUND, ARE COVERED PERSONS UNDER THIS POLICY. OTHER COVERED
PERSONS ARE DESCRIBED IN SECTION II BELOW.
I. STATEMENT OF PRINCIPLES - All SSB Citi employees owe a fiduciary duty
to SSB Citi's clients when conducting their personal investment
transactions. Employees must place the interests of clients first and
avoid activities, interests and relationships that might interfere with
the duty to make decisions in the best interests of the clients. All
Fund directors owe a fiduciary duty to each Fund of which they are a
director and to that Fund's shareholders when conducting their personal
investment transactions. At all times and in all matters Fund directors
shall place the interests of their Funds before their personal
interests. The fundamental standard to be followed in personal
securities transactions is that Covered Persons may not take
inappropriate advantage of their positions.
All personal securities transactions by Covered Persons shall adhere to
the requirements of this policy and shall be conducted in such a manner
as to avoid any actual or potential conflict of interest, the
appearance of such a conflict, or the abuse of the person's position of
trust and responsibility. While this policy is designed to address both
identified conflicts and potential conflicts, it cannot possibly be
written broadly enough to cover all potential situations. In this
regard, Covered Persons are expected to adhere not only to the letter,
but also the spirit of the policies contained herein.
Employees are reminded that they also are subject to other Citigroup
policies, including policies on insider trading, the purchase and sale
of securities listed on any applicable SSB Citi restricted list, the
receipt of gifts and service as a director of a publicly traded
company. EMPLOYEES MUST NEVER TRADE IN A SECURITY OR COMMODITY WHILE IN
POSSESSION OF MATERIAL, NON-PUBLIC INFORMATION ABOUT THE ISSUER OR THE
MARKET FOR THOSE SECURITIES OR COMMODITIES, EVEN IF THE EMPLOYEE HAS
SATISFIED ALL OTHER REQUIREMENTS OF THIS POLICY.
The reputation of SSB Citi and its employees for straightforward
practices and integrity is a priceless asset, and all employees have
the duty and obligation to support and maintain it when conducting
their personal securities transactions.
(1) The investment advisory entities of SSB Citi covered by this policy include:
Salomon Brothers Asset Management Inc.; SSB Citi Fund Management LLC; Smith
Barney Asset Management Division of Salomon Smith Barney Inc.; Travelers
Investment Management Company; and the Citibank Global Asset Management Division
of Citibank, N.A. and Citicorp Trust, N.A.-California.
1
<PAGE>
II. APPLICABILITY - SSB CITI EMPLOYEES - This policy applies to all U.S.
employees of SSB Citi, including part-time employees. Each employee,
including employees who serve as Fund officers or directors, must
comply with all of the provisions of the policy applicable to SSB Citi
employees unless otherwise indicated. Certain employees are considered
to be "investment personnel" (i.e., portfolio managers, traders and
research analysts (and each of their assistants)), and as such, are
subject to certain additional restrictions outlined in the policy. All
other employees of SSB Citi are considered to be "advisory personnel."
Generally, temporary personnel and consultants working in any SSB Citi
business are subject to the same provisions of the policy as full-time
employees, and their adherence to specific requirements will be
addressed on a case-by-case basis.
The personal investment policies, procedures and restrictions referred
to herein also apply to an employee's spouse and minor children. The
policies also apply to any other account over which the employee is
deemed to have BENEFICIAL OWNERSHIP. This includes: accounts of any
immediate family members sharing the same household as the employee;
accounts of persons or other third parties for whom the employee
exercises investment discretion or gives investment advice; a legal
vehicle in which the employee has a direct or indirect beneficial
interest and has power over investment decisions; accounts for the
benefit of a third party (e.g., a charity) which may be directed by the
employee (other than in the capacity of an employee); and any account
over which the employee may be deemed to have control. For a more
detailed description of beneficial ownership, see Exhibit A attached
hereto.
These policies place certain restrictions on the ability of an employee
to purchase or sell securities that are being or have been purchased or
sold by an SSB Citi managed fund or client account. The restrictions
also apply to securities that are "related" to a security being
purchased or sold by an SSB Citi managed fund or client account. A
"related security" is one whose value is derived from the value of
another security (e.g., a warrant, option or an indexed instrument).
FUND DIRECTORS - This policy applies to all directors of Funds that
have adopted this policy. The personal investment policies, procedures
and restrictions that specifically apply to Fund directors apply to all
accounts and securities in which the director has direct or indirect
beneficial ownership. See Exhibit A attached hereto for a more detailed
description of beneficial ownership.
SECURITIES are defined as stocks, notes, bonds, closed-end mutual
funds, debentures, and other evidences of indebtedness, including
senior debt, subordinated debt, investment contracts, commodity
contracts, futures and all derivative instruments such as options,
warrants and indexed instruments, or, in general, any interest or
instrument commonly known as a "security."
III. ENFORCEMENT - It is the responsibility of each Covered Person to act in
accordance with a high standard of conduct and to comply with the
policies and procedures set forth in this document. SSB Citi takes
seriously its obligation to monitor the personal investment activities
of its employees. Any violation of this policy by employees will be
considered serious, and may result in disciplinary action, which may
include the unwinding of trades, disgorgement of profits, monetary fine
or censure, and suspension or termination of employment. Any violation
of this policy by a Fund director will be reported to the Board of
Directors of the applicable Fund, which may impose such sanctions as it
deems appropriate.
2
<PAGE>
IV. OPENING AND MAINTAINING EMPLOYEE ACCOUNTS - All employee brokerage
accounts, including spouse accounts, accounts for which the employee is
deemed to have beneficial ownership, and any other accounts over which
the employee and/or spouse exercise control, must be maintained either
at Salomon Smith Barney ("SSB") or at Citicorp Investment Services
("CIS").(2) For spouses or other persons who, by reason of their
employment, are required to conduct their securities, commodities or
other financial transactions in a manner inconsistent with this policy,
or in other exceptional circumstances, employees may submit a written
request for an exemption to the Compliance Department. If approval is
granted, copies of trade confirmations and monthly statements must be
sent to the Compliance Department. In addition, all other provisions of
this policy will apply.
V. EXCLUDED ACCOUNTS AND TRANSACTIONS - The following types of
accounts/transactions need not be maintained at SSB or CIS, nor are
they subject to the other restrictions of this policy:
1. Accounts at outside mutual funds that hold only shares of open-end
funds purchased directly from that fund company. NOTE:
TRANSACTIONS RELATING TO CLOSED-END FUNDS ARE SUBJECT TO THE
PRE-CLEARANCE, BLACKOUT PERIOD AND OTHER RESTRICTIONS OF THIS
POLICY;
2. Estate or trust accounts in which an employee or related person
has a beneficial interest, but no power to affect investment
decisions. There must be no communication between the account(s)
and the employee with regard to investment decisions prior to
execution. THE EMPLOYEE MUST DIRECT THE TRUSTEE/BANK TO FURNISH
COPIES OF CONFIRMATIONS AND STATEMENTS TO THE COMPLIANCE
DEPARTMENT;
3. Fully discretionary accounts managed by either an internal or
external registered investment adviser are permitted and may be
custodied away from SSB and CIS if (i) the employee receives
permission from the Regional Director of Compliance and the unit's
Chief Investment Officer, and (ii) there is no communication
between the manager and the employee with regard to investment
decisions prior to execution. The employee must designate that
copies of trade confirmations and monthly statements be sent to
the Compliance Department;
4. Employees may participate in direct investment programs which
allow the purchase of securities directly from the issuer without
the intermediation of a broker/dealer provided that the timing and
size of the purchases are established by a pre-arranged,
regularized schedule (e.g., dividend reinvestment plans).
Employees must pre-clear the transaction at the time that the
dividend reinvestment plan is being set up. Employees also must
provide documentation of these arrangements and direct periodic
(monthly or quarterly) statements to the Compliance Department;
and
5. In addition to the foregoing, the following types of securities
are exempted from pre-clearance, blackout periods, reporting and
short-term trading requirements: open-ended mutual funds; open-end
unit investment trusts; U.S. Treasury bills, bonds and notes;
mortgage pass-throughs (e.g. Ginnie Maes) that are direct
obligations of the U.S. government; bankers acceptances; bank
(2) This requirement will become effective as to all employees on a date to be
determined by the Compliance Department and may be subject to a phase-in
implementation process.
3
<PAGE>
certificates of deposit; commercial paper; and high quality
short-term debt instruments (meaning any instrument that has a
maturity at issuance of less than 366 days and that is rated in
one of the two highest rating categories by a nationally
recognized statistical rating organization, such as S&P or
Moody's), including repurchase agreements.
VI. SECURITIES HOLDING PERIOD/SHORT-TERM TRADING - Securities transactions
must be for investment purposes rather than for speculation.
Consequently, employees may not profit from the purchase and sale, or
sale and purchase, of the same or equivalent securities within sixty
(60) calendar days, calculated on a First In, First Out (FIFO) basis
(i.e., the security may be sold on the 61st day). Citigroup securities
received as part of an employee's compensation are not subject to the
60-day holding period. All profits from short-term trades are subject
to disgorgement. However, with the prior written approval of both a
Chief Investment Officer and the Regional Director of Compliance, and
only in rare and/or unusual circumstances, an employee may execute a
short-term trade that results in a significant loss or in break-even
status.
VII. PRE-CLEARANCE - All SSB Citi employees must pre-clear all personal
securities transactions (see Section V for a listing of accounts,
transactions and securities that do not require pre-clearance). A copy
of the pre-clearance form is attached as Exhibit B. IN ADDITION,
EMPLOYEES ARE PROHIBITED FROM ENGAGING IN MORE THAN TWENTY (20)
TRANSACTIONS IN ANY CALENDAR MONTH, EXCEPT WITH PRIOR WRITTEN APPROVAL
FROM THEIR CHIEF INVESTMENT OFFICER, OR DESIGNEE. A transaction must
not be executed until the employee has received the necessary approval.
Pre-clearance is valid only on the day it is given. If a transaction is
not executed on the day pre-clearance is granted, it is required that
pre-clearance be sought again on a subsequent day (i.e., open orders,
such as limit orders, good until cancelled orders and stop-loss orders,
must be pre-cleared each day until the transaction is effected). In
connection with obtaining approval for any personal securities
transaction, employees must describe in detail any factors which might
be relevant to an analysis of the possibility of a conflict of
interest. Any trade that violates the pre-clearance process may be
unwound at the employee's expense, and the employee will be required to
absorb any resulting loss and to disgorge any resulting profit.
In addition to the foregoing, the CGAM NA Director of Global Equity
Research, or his designate, must approve all personal securities
transactions for members of the CGAM Research Department prior to
pre-clearance from the Compliance Department as set forth in this
section. Pre-approval by the Director of Research, or his designate, is
in addition to and does not replace the requirement for the
pre-clearance of all personal securities transactions.
VIII. BLACKOUT PERIODS - No Covered Person shall purchase or sell, directly
or indirectly, any security in which he/she has, or by reason of the
transaction acquires, any direct or indirect beneficial ownership if
he/she has knowledge at the time of such transaction that the security
is being purchased or sold, or is being considered for purchase or
sale, by a managed fund or client account or in the case of a Fund
director, by the director's Fund. In addition, the following Blackout
Periods apply to the categories of SSB Citi employees listed below:
1. PORTFOLIO MANAGERS AND PORTFOLIO MANAGER ASSISTANTS - may not buy
or sell any securities for personal accounts seven (7) calendar
days before or after managed funds or client accounts he/she
manages trade in that security.
4
<PAGE>
2. TRADERS AND TRADER ASSISTANTS - may not buy or sell any securities
for personal accounts three (3) calendar days before or seven (7)
calendar days after managed funds or client accounts he/she
executes trades for trade in that security.
3. RESEARCH ANALYSTS AND RESEARCH ASSISTANTS - may not buy or sell
any securities for personal accounts: seven (7) calendar days
before or after the issuance of or a change in any recommendation;
or seven (7) calendar days before or after any managed fund or
client account about which the employee is likely to have trading
or portfolio information (as determined by the Compliance
Department) trades in that security.
4. ADVISORY PERSONNEL (see Section II for details) - may not buy or
sell any securities for personal accounts on the same day that a
managed fund or client account about which the employee is likely
to have trading or portfolio information (as determined by the
Compliance Department) trades in that security.
5. UNIT TRUST PERSONNEL - all employees assigned to the Unit Trust
Department are prohibited from transacting in any security when a
SSB Citi-sponsored Unit Trust portfolio is buying the same (or a
related) security, until seven business days after the later of
the completion of the accumulation period or the public
announcement of the trust portfolio. Similarly, all UIT employees
are prohibited from transacting in any security held in a UIT (or
a related security) seven business days prior to the liquidation
period of the trust.
Employees in categories 1, 2 and 5 above may also be considered
Advisory Personnel for other accounts about which the employee is
likely to have trading or portfolio information (as determined by the
Compliance Department).
Any violation of the foregoing provisions will require the employee's
trade to be unwound, with the employee absorbing any resulting loss and
disgorging any resulting profit. Advisory personnel are subject to the
unwinding of the trade provision; however, they may not be required to
absorb any resulting loss (at the discretion of the Compliance
Department and the employee's supervisor). Please be reminded that,
regardless of the provisions set forth above, all employees are always
prohibited from effecting personal securities transactions based on
material, non-public information.
Blackout period requirements shall not apply to any purchase or sale,
or series of related transactions involving the same or related
securities, involving 500 or fewer shares in the aggregate if the
issuer has a market capitalization (outstanding shares multiplied by
the current price per share) greater than $10 billion and is listed on
a U.S. Stock Exchange or NASDAQ. NOTE: PRE-CLEARANCE IS STILL REQUIRED.
Under certain circumstances, the Compliance Department may determine
that an employee may not rely upon this "Large Cap/De Minimis"
exemption. In such a case, the employee will be notified prior to or at
the time the pre-clearance request is made.
IX. PROHIBITED TRANSACTIONS - The following transactions by SSB Citi employees
are prohibited without the prior written approval from the Chief Investment
Officer, or designee, and the Regional Compliance Director:
1. The purchase of private placements; and
2. The acquisition of any securities in an initial public offering
(new issues of municipal debt securities may be acquired subject
to the other requirements of this policy (e.g., pre-clearance).)
5
<PAGE>
X. TRANSACTIONS IN OPTIONS AND FUTURES - SSB Citi employees may buy or sell
derivative instruments such as individual stock options, options and
futures on indexes and options and futures on fixed-income securities, and
may buy or sell physical commodities and futures and forwards on such
commodities. These transactions must comply with all of the policies and
restrictions described in this policy, including pre-clearance, blackout
periods, transactions in Citigroup securities and the 60-day holding
period. However, the 60-day holding period does not apply to individual
stock options that are part of a hedged position where the underlying stock
has been held for more than 60 days and the entire position (including the
underlying security) is closed out.
XI. PROHIBITED RECOMMENDATIONS - No Covered Person shall recommend or execute
any securities transaction by any managed fund or client account, or, in
the case of a Fund director, by the director's Fund, without having
disclosed, in writing, to the Chief Investment Officer, or designee, any
direct or indirect interest in such securities or issuers, except for those
securities purchased pursuant to the "Large Cap/De Minimis" exemption
described in Section VIII above. Prior written approval of such
recommendation or execution also must be received from the Chief Investment
Officer, or designee. The interest in personal accounts could be in the
form of:
1. Any direct or indirect beneficial ownership of any securities of
such issuer;
2. Any contemplated transaction by the person in such securities;
3. Any position with such issuer or its affiliates; or
4. Any present or proposed business relationship between such issuer
or its affiliates and the person or any party in which such person
has a significant interest.
XII. TRANSACTIONS IN CITIGROUP SECURITIES - Unless an SSB Citi employee is a
member of a designated group subject to more restrictive provisions, or is
otherwise notified to the contrary, the employee may trade in Citigroup
securities without restriction (other than the pre-clearance and other
requirements of this policy), subject to the limitations set forth below.
Employees whose jobs are such that they know about Citigroup's
quarterly earnings prior to release may not engage in any transactions
in Citigroup securities during the "blackout periods" beginning on the
first day of a calendar quarter and ending on the second business day
following the release of earnings for the prior quarter. Members of the
SSB Citi Executive Committee and certain other senior SSB Citi
employees are subject to these blackout periods.
Stock option exercises are permitted during a blackout period (but the
simultaneous exercise of an option and sale of the underlying stock is
prohibited). With regard to exchange traded options, no transactions in
Citigroup options are permitted except to close or roll an option
position that expires during a blackout period. Charitable
contributions of Citigroup securities may be made during the blackout
period, but an individual's private foundation may not sell donated
Citigroup common stock during the blackout period. "Good `til
cancelled" orders on Citigroup stock must be cancelled before entering
a blackout period and no such orders may be entered during a blackout
period.
No employee may engage at any time in any personal transactions in
Citigroup securities while in possession of material non-public
information. Investments in Citigroup securities must be made with a
long-term orientation rather than for
6
<PAGE>
speculation or for the generation of short-term trading profits. In
addition, please note that employees may not engage in the following
transactions:
- Short sales of Citigroup securities;
- Purchases or sales of options ("puts" or "calls") on Citigroup
securities, except writing a covered call at a time when the
securities could have been sold under this policy;
- Purchases or sales of futures on Citigroup securities; or
- Any transactions relating to Citigroup securities that might
reasonably appear speculative.
The number of Citigroup shares an employee is entitled to in the
Citigroup Stock Purchase Plan is not treated as a long stock position
until such time as the employee has given instructions to purchase the
shares of Citigroup. Thus, employees are not permitted to use options
to hedge their financial interest in the Citigroup Stock Purchase Plan.
Contributions into the firm's 401(k) Plan are not subject to the
restrictions and prohibitions described in this policy.
XIII. ACKNOWLEDGEMENT AND REPORTING REQUIREMENTS - SSB CITI EMPLOYEES - All new
SSB Citi employees must certify that they have received a copy of this
policy, and have read and understood its provisions. In addition, all SSB
Citi employees must:
1. Acknowledge receipt of the policy and any modifications thereof,
in writing (see Exhibit C for the form of Acknowledgement);
2. Within 10 days of becoming an SSB Citi employee, disclose in
writing all information with respect to all securities
beneficially owned and any existing personal brokerage
relationships (employees must also disclose any new brokerage
relationships whenever established). Such information should be
provided on the form attached as Exhibit D;
3. Direct their brokers to supply, on a timely basis, duplicate
copies of confirmations of all personal securities transactions
(NOTE: THIS REQUIREMENT MAY BE SATISFIED THROUGH THE TRANSMISSION
OF AUTOMATED FEEDS);
4. Within 10 days after the end of each calendar quarter, provide
information relating to securities transactions executed during
the previous quarter for all securities accounts (NOTE: THIS
REQUIREMENT MAY BE SATISFIED THROUGH THE TRANSMISSION OF
AUTOMATED FEEDS);
5. Submit an annual holdings report containing similar information
that must be current as of a date no more than 30 days before the
report is submitted, and confirm at least annually all brokerage
relationships and any and all outside business affiliations (NOTE:
THIS REQUIREMENT MAY BE SATISFIED THROUGH THE TRANSMISSION OF
AUTOMATED FEEDS OR THE REGULAR RECEIPT OF MONTHLY BROKERAGE
STATEMENTS); and
6. Certify on an annual basis that he/she has read and understood the
policy, complied with the requirements of the policy and that
he/she has pre-cleared and disclosed or reported all personal
securities transactions and securities accounts required to be
disclosed or reported pursuant to the requirements of the policy.
7
<PAGE>
FUND DIRECTORS - Fund Directors shall deliver the information required
by Items 1 through 4 of the immediately preceding paragraph, except
that a Fund director who is not an "interested person" of the Fund
within the meaning of Section 2(a)(19) of the Investment Company Act of
1940, and who would be required to make reports solely by reason of
being a Fund Director, is not required to make the initial and annual
holdings reports required by Item 2. Also, a "non-interested" Fund
Director need not supply duplicate copies of confirmations of personal
securities transactions required by Item 3, and need only make the
quarterly transactions reports required by Item 3 as to any security if
at the time of a transaction by the Director in that security, he/she
knew or in the ordinary course of fulfilling his/her official duties as
a Fund Director should have known that, during the 15-day period
immediately preceding or following the date of that transaction, that
security is or was purchased or sold by that Director's Fund or was
being considered for purchase or sale by that Director's Fund.
DISCLAIMER OF BENEFICIAL OWNERSHIP - The reports described in Items 2
and 3 above may contain a statement that the reports shall not be
construed as an admission by the person making the reports that he/she
has any direct or indirect beneficial ownership in the securities to
which the reports relate.
XIV. HANDLING OF DISGORGED PROFITS - Any amounts that are paid/disgorged by
an employee under this policy shall be donated by SSB Citi to one or
more charities. Amounts donated may be aggregated by SSB Citi and paid
to such charity or charities at the end of each year.
XV. CONFIDENTIALITY - All information obtained from any Covered Person
pursuant to this policy shall be kept in strict confidence, except that
such information will be made available to the Securities and Exchange
Commission or any other regulatory or self-regulatory organization or
to the Fund Boards of Directors to the extent required by law,
regulation or this policy.
XVI. OTHER LAWS, RULES AND STATEMENTS OF POLICY - Nothing contained in this
policy shall be interpreted as relieving any person subject to the
policy from acting in accordance with the provision of any applicable
law, rule or regulation or, in the case of SSB Citi employees, any
statement of policy or procedure governing the conduct of such person
adopted by Citigroup, its affiliates and subsidiaries.
XVII. RETENTION OF RECORDS - All records relating to personal securities
transactions hereunder and other records meeting the requirements of
applicable law, including a copy of this policy and any other policies
covering the subject matter hereof, shall be maintained in the manner
and to the extent required by applicable law, including Rule 17j-1
under the 1940 Act. The Compliance Department shall have the
responsibility for maintaining records created under this policy.
XVIII. MONITORING - SSB Citi takes seriously its obligation to monitor the
personal investment activities of its employees and to review the
periodic reports of all Covered Persons. Employee personal investment
transaction activity will be monitored by the Compliance Department.
All noted deviations from the policy requirements will be referred back
to the employee for follow-up and resolution (with a copy to be
supplied to the employee's supervisor). Any noted deviations by Fund
directors will be reported to the Board of Directors of the applicable
Fund for consideration and follow-up as contemplated by Section III
hereof.
8
<PAGE>
XIX. EXCEPTIONS TO THE POLICY - Any exceptions to this policy must have the
prior written approval of both the Chief Investment Officer and the
Regional Director of Compliance. Any questions about this policy should
be directed to the Compliance Department.
XX. BOARD REVIEW - Fund management and SSB Citi shall provide to the Board
of Directors of each Fund, on a quarterly basis, a written report of
all material violations of this policy, and at least annually, a
written report and certification meeting the requirements of Rule 17j-1
under the 1940 Act.
XXI. OTHER CODES OF ETHICS - To the extent that any officer of any Fund is
not a Covered Person hereunder, or an investment subadviser of or
principal underwriter for any Fund and their respective access persons
(as defined in Rule 17j-1) are not Covered Persons hereunder, those
persons must be covered by separate codes of ethics which are approved
in accordance with applicable law.
XXII. AMENDMENTS - SSB CITI EMPLOYEES - Unless otherwise noted herein, this
policy shall become effective as to all SSB Citi employees on March 30,
2000. This policy may be amended as to SSB Citi employees from time to
time by the Compliance Department. Any material amendment of this
policy shall be submitted to the Board of Directors of each Fund for
approval in accordance with Rule 17j-1 under the 1940 Act.
FUND DIRECTORS - This policy shall become effective as to a Fund upon
the approval and adoption of this policy by the Board of Directors of
that Fund in accordance with Rule 17j-1 under the 1940 Act or at such
earlier date as determined by the Secretary of the Fund. Any material
amendment of this policy that applies to the directors of a Fund shall
become effective as to the directors of that Fund only when the Board
of Directors of that Fund has approved the amendment in accordance with
Rule 17j-1 or at such earlier date as determined by the Secretary of
the Fund.
March 15, 2000
9
<PAGE>
EXHIBIT A
EXPLANATION OF BENEFICIAL OWNERSHIP
You are considered to have "Beneficial Ownership" of Securities if you have or
share a direct or indirect "PECUNIARY INTEREST" in the Securities.
You have a "Pecuniary Interest" in Securities if you have the opportunity,
directly or indirectly, to profit or share in any profit derived from a
transaction in the Securities.
The following are examples of an indirect Pecuniary Interest in Securities:
1. Securities held by members of your IMMEDIATE FAMILY sharing the
same household; however, this presumption may be rebutted by
convincing evidence that profits derived from transactions in
these Securities will not provide you with any economic benefit.
"Immediate family" means any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, sibling, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, and includes any adoptive relationship.
2. Your interest as a general partner in Securities held by a general
or limited partnership.
3. Your interest as a manager-member in the Securities held by a
limited liability company.
You do NOT have an indirect Pecuniary Interest in Securities held by a
corporation, partnership, limited liability company or other entity in which you
hold an equity interest, UNLESS you are a controlling equityholder or you have
or share investment control over the Securities held by the entity.
The following circumstances constitute Beneficial Ownership by you of Securities
held by a trust:
1. Your ownership of Securities as a trustee where either you or
members of your immediate family have a vested interest in the
principal or income of the trust.
2. Your ownership of a vested interest in a trust.
3. Your status as a settlor of a trust, unless the consent of all of
the beneficiaries is required in order for you to revoke the
trust.
THE FOREGOING IS A SUMMARY OF THE MEANING OF "BENEFICIAL OWNERSHIP". FOR
PURPOSES OF THE ATTACHED POLICY, "BENEFICIAL OWNERSHIP" SHALL BE INTERPRETED IN
THE SAME MANNER AS IT WOULD BE IN DETERMINING WHETHER A PERSON IS SUBJECT TO THE
PROVISIONS OF SECTION 16 OF THE SECURITIES EXCHANGE ACT OF 1934 AND THE RULES
AND REGULATIONS THEREUNDER
10
<PAGE>
SSB CITI ASSET MANAGEMENT GROUP ("SSB CITI") EXHIBIT B
EMPLOYEE TRADE PRE-APPROVAL FORM
(PAGE 1)
INSTRUCTIONS:
ALL EMPLOYEES ARE REQUIRED TO SUBMIT THIS FORM TO THE COMPLIANCE DEPARTMENT
PRIOR TO PLACING A TRADE. THE COMPLIANCE DEPARTMENT WILL NOTIFY THE EMPLOYEE AS
TO WHETHER OR NOT PRE-APPROVAL IS GRANTED. PRE-APPROVAL IS EFFECTIVE ONLY ON THE
DATE GRANTED.
<TABLE>
<CAPTION>
<S><C>
I. EMPLOYEE INFORMATION
- -------------------------------------------------------------------------------------------------------------------------------
Employee Name: Phone Number:
- -------------------------------------------------------------------------------------------------------------------------------
Account Title:
- -------------------------------------------------------------------------------------------------------------------------------
Account Number:
- -------------------------------------------------------------------------------------------------------------------------------
Managed Account(s)/Mutual Fund(s) for which employee is a Covered Person:
- -------------------------------------------------------------------------------------------------------------------------------
II. SECURITY INFORMATION
IPO / / / / PRIVATE PLACEMENT / / / /
Yes No Yes No
- -------------------------------------------------------------------------------------------------------------------------------
Security Name Security Type-e.g., Ticker Buy/Sell If Sale, Date First No. Large Cap Stock?(2)
common stock, etc. Acquired(1) Shares/Units
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
III. YOUR POSITION WITH THE FIRM:
(PLEASE CHECK ONE OF THE FOLLOWING) / / Portfolio Manager / Portfolio Manager Assistant
/ / Research Analyst / Research Analyst Assistant
/ / Trader / Trader Assistant
/ / Unit Trust Personnel
/ / Other (Advisory Personnel)
NOTE: - All PORTFOLIO MANAGERS must complete the reverse side of this form.
- All RESEARCH ANALYSTS and RESEARCH ANALYST ASSISTANTS located
in CONNECTICUT MUST provide an additional form signed by
RAMA KRISHNA or one of his designees.
IV. CERTIFICATION
I CERTIFY THAT I WILL NOT EFFECT THE TRANSACTION(S) DESCRIBED ABOVE UNLESS AND
UNTIL PRE-CLEARANCE APPROVAL IS OBTAINED FROM THE COMPLIANCE DEPARTMENT. I
FURTHER CERTIFY THAT, EXCEPT AS DESCRIBED ON AN ATTACHED PAGE, TO THE BEST OF MY
KNOWLEDGE, THE PROPOSED TRANSACTION(S) WILL NOT RESULT IN A CONFLICT OF INTEREST
WITH ANY ACCOUNT MANAGED BY SSB CITI (INCLUDING MUTUAL FUNDS MANAGED BY SSB
CITI). I FURTHER CERTIFY THAT, TO THE BEST OF MY KNOWLEDGE, THERE ARE NO PENDING
ORDERS FOR ANY SECURITY LISTED ABOVE OR ANY RELATED SECURITY FOR ANY MANAGED
ACCOUNTS AND/OR MUTUAL FUNDS FOR WHICH I AM CONSIDERED A COVERED PERSON. THE
PROPOSED TRANSACTION(S) ARE CONSISTENT WITH ALL FIRM POLICIES REGARDING EMPLOYEE
PERSONAL SECURITIES TRANSACTIONS.
SIGNATURE DATE
-------------------------- -------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
FOR USE BY THE COMPLIANCE DEPARTMENT
- -------------------------------------------------------------------------------------------------------------------------------
ARE SECURITIES RESTRICTED? / / Yes / / No PRE-APPROVAL GRANTED? / / Yes / / No Reason not granted:
- -------------------------------------------------------------------------------------------------------------------------------
COMPLIANCE DEPARTMENT SIGNATURE: Date: Time:
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1). All securities sold must have been held for at least 60 days.
(2). For purposes of SSB Citi's personal trading policies, a Large Cap Exemption
applies to transactions involving 500 or fewer shares in aggregate and the
stock is one that is listed on a U.S. stock exchange or NASDAQ and whose
issuer has a market capitalization (outstanding shares multiplied by
current price) of more than $10 billion.
11
<PAGE>
SSB CITI ASSET MANAGEMENT GROUP ("SSB CITI")
PAGE 2 - PORTFOLIO MANAGER CERTIFICATION
All portfolio managers must answer the following questions in order to obtain
pre-approval. All questions must be answered or the form will be returned. If a
question is not applicable, please indicate "N/A".
1. Have your client accounts purchased or sold the securities (or related
securities) in the past seven calendar days?
Yes / / No / /
2. Do you intend to purchase or sell the securities (or related securities)
for any client accounts in the next seven calendar days?
Yes / / No / /
3. Do any of your client accounts currently own the securities (or related
securities)? Yes / / No / /
3a. If yes, and you are selling the securities for your personal account,
please explain why the sale of the securities was rejected for client
accounts but is appropriate for your personal account:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
4. Have you, in the past 7 calendar days, CONSIDERED purchasing the
securities (or related securities) for your client accounts?
Yes / / No / /
4a. If yes, and you are purchasing securities for your personal account,
please explain why the purchase of the securities is appropriate for
your account but has been rejected for your client accounts:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
4b. If no, and you are purchasing securities for your personal account,
please explain why the purchase of the securities has not been
considered for your client accounts:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
CERTIFICATION
I certify that I will not effect the transaction(s) described above unless and
until pre-clearance approval is obtained from the Compliance Department. I
further certify that, except as described on an attached page, to the best of my
knowledge, the proposed transaction(s) will not result in a conflict of interest
with any account managed by SSB Citi (including mutual funds managed by SSB
Citi). I further certify that, to the best of my knowledge, there are no pending
orders for any security listed above or any related securities for any Managed
Accounts and/or Mutual Funds for which I am considered a Covered Person. The
proposed transaction(s) are consistent with all firm policies regarding employee
personal securities transactions.
- ------------------------------ -------------------------------------
SIGNATURE DATE
<TABLE>
<S><C>
- -------------------------------------------------------------------------------------------------------
FOR USE BY THE COMPLIANCE DEPARTMENT
- -------------------------------------------------------------------------------------------------------
/ / / / / / / / Reason not granted:
Yes No PRE-APPROVAL GRANTED? Yes No
ARE SECURITIES RESTRICTED?
- -------------------------------------------------------------------------------------------------------
COMPLIANCE DEPARTMENT SIGNATURE: Date: Time:
- -------------------------------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
PERSONAL INVESTMENT POLICY EXHIBIT C
FOR
SSB CITI ASSET MANAGEMENT GROUP - NORTH AMERICA
AND CERTAIN REGISTERED INVESTMENT COMPANIES
ACKNOWLEDGMENT
I ACKNOWLEDGE THAT I HAVE RECEIVED AND READ THE PERSONAL INVESTMENT POLICY
FOR SSB CITI ASSET MANAGEMENT GROUP - NORTH AMERICA AND CERTAIN REGISTERED
INVESTMENT COMPANIES DATED MARCH 15, 2000. I UNDERSTAND THE PROVISIONS OF
THE PERSONAL INVESTMENT POLICY AS DESCRIBED THEREIN AND AGREE TO ABIDE BY
THEM.
EMPLOYEE NAME (PRINT):
----------------------------
SIGNATURE:
----------------------------
DATE:
----------------------------
----------------------------------------------------------------------------
SOCIAL SECURITY DATE OF HIRE:
NUMBER:
----------------------------------------------------------------------------
JOB FUNCTION & SUPERVISOR:
TITLE:
----------------------------------------------------------------------------
LOCATION:
----------------------------------------------------------------------------
FLOOR AND/OR ZONE: TELEPHONE NUMBER:
----------------------------------------------------------------------------
NASD REGISTERED EMPLOYEE (PLEASE CHECK ONE) / / Yes / / No
----------------------------------------------------------------------------
If REGISTERED, list Registration \ License:
----------------------------------------------------------------------------
THIS ACKNOWLEDGMENT FORM MUST BE COMPLETED AND RETURNED NO LATER THAN MARCH
30, 2000 TO THE COMPLIANCE DEPARTMENT - ATTENTION: VERA SANDUCCI-DENDY, 388
GREENWICH STREET, 23RD FLOOR, NEW YORK, NY 10013.
13
<PAGE>
EXHIBIT D
SSB CITI ASSET MANAGEMENT GROUP - NORTH AMERICA PERSONAL INVESTMENT POLICY
FINANCIAL SERVICES FIRM DISCLOSURE AND INITIAL REPORT OF SECURITIES HOLDINGS
THIS REPORT MUST BE SIGNED, DATED AND RETURNED WITHIN 10 DAYS OF EMPLOYMENT TO
THE COMPLIANCE DEPARTMENT - ATTENTION: VERA SANDUCCI-DENDY, 388 GREENWICH
STREET, 23RD FLOOR
- -------------------------------------------------------------------------------
EMPLOYEE NAME: DATE OF EMPLOYMENT:
---------------------------- ----------------
- -------------------------------------------------------------------------------
BROKERAGE ACCOUNTS:
/ / I do not have a BENEFICIAL INTEREST in any account(s) with any financial
services firm.
/ / I maintain the following account(s) with the financial services firm(s)
listed below (attach additional information if necessary-e.g., a
brokerage statement). Please include the information required below for
any broker, dealer or bank where an account is maintained which holds
securities for your direct or indirect benefit as of the date you began
your employment.
<TABLE>
<S><C>
- -------------------------------------------------------------------------------------------------------------------------
Name of Financial Service(s) Firm and Address Account Title Account Number
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
SECURITIES HOLDINGS:
Complete the following (or attach a copy of your most recent statement(s))
listing all of your securities holdings, with the exception of open-ended mutual
funds and U.S Government securities if:
- - You own securities which are held by financial services firm(s) as
described above. If you submit a copy of a statement, it must include all
of the information set forth below. Please be sure to include any
additional securities purchased since the date of the brokerage statement
which is attached. Use additional sheets if necessary.
- - Your securities are not held with a financial service(s) firm (e.g.,
dividend reinvestment programs).
- -------------------------------------------------------------------------------------------------------------------------
Title of Security Ticker Symbol # of Shares Principal Amt. Held Since Financial Services Firm
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
/ / I have no securities holdings to report.
I CERTIFY THAT I HAVE RECEIVED THE SSB CITI - NORTH AMERICA PERSONAL INVESTMENT
POLICY AND HAVE READ IT AND UNDERSTOOD ITS CONTENTS. I FURTHER CERTIFY THAT THE
ABOVE REPRESENTS A COMPLETE AND ACCURATE DESCRIPTION OF MY BROKERAGE ACCOUNT(S)
AND SECURITIES HOLDINGS AS OF MY DATE OF EMPLOYMENT.
Signature: Date of Signature:
--------------------------------- -------------
14
<PAGE>
CODE OF ETHICS
OF
SANFORD C. BERNSTEIN & CO., INC.
EFFECTIVE APRIL, 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
GENERAL PRINCIPLES.........................................................................1
PERSONAL TRADING RULES.....................................................................2
You May Trade Only at Bernstein........................................................2
General Statement of Policy.....................................................2
Outside Accounts Must Be Transferred To Bernstein...............................3
Initial Disclosure Upon Commencing Employment...................................3
Outside Trades Permitted Only in Very Limited Circumstances.....................4
Heightened Disclosure Requirements For Outside Accounts.........................5
Pre-Approval Required For All Trades By All Staff Members..............................6
General Statement of Policy.....................................................6
Steps in the Pre-Approval Process...............................................6
Step One: Order Ticket / Memo Request...................................7
Step Two: Approval by Your Supervisor or Other Authorized Person........7
Step Three: Approval of Trading Desk....................................8
Exception: Trades in Authorized Outside Accounts....................8
Our Trading Desk Will Not Permit You to Trade Ahead of Clients..................9
General Statement of Policy..............................................9
Limited Exception........................................................9
Other Reasons For Trading Desk Disapproval.....................................10
Prohibition Against Insider Trading...................................................11
Restrictions On Participating In:
IPOs...........................................................................12
Private Securities Transactions and Other
Investment Opportunities of Limited Availability...............................12
No Short-Term Trading.................................................................13
Special Restrictions For:
Decisionmakers.................................................................14
Others with Access to Decisions................................................14
i
<PAGE>
Contrary Trading Restrictions For Members of:
Investment Policy Groups.......................................................15
Global Equity Portfolio Management Department..................................15
(Including All Domestic and International Equity Portfolio
Management Groups and Investment Management Trading)....................15
Investment Management Research Department......................................15
(Including All Domestic and International Equity
Research Departments)...................................................15
Fixed Income Department........................................................15
Other Special Restrictions For:
Investment Management Research Analysts........................................16
Investment Management Research Associates......................................16
Fixed Income Staff Performing Research.........................................16
Special Restrictions For:
Institutional Research Analysts................................................17
Institutional Research Associates..............................................17
Other Special Restrictions Imposed By Your Department.................................18
OTHER CONDUCT RULES.......................................................................19
Gifts.................................................................................19
Gifts Received By Staff Members................................................19
Entertaining Clients...........................................................19
Gifts Given By Staff Members...................................................20
Compensation to Certain Employees of Others....................................20
Financial Interest....................................................................21
Awarding Contracts....................................................................21
Outside Directorships & Officerships and Other Outside Activities.....................22
No Recommendation or Sale of Products Other Than Bernstein Products...................22
ii
<PAGE>
Proprietary Information.................................................................23
Identity of Companies on Our Restricted Lists.............................23
Clients'Proprietary Information...........................................23
Our Research..............................................................23
Other.....................................................................23
Rumors..................................................................................24
Communication With Clients & the Public.................................................24
Reportable Events Involving Staff Members...............................................25
ADMINISTRATION..............................................................................26
Annual Report and Certification.........................................................26
Ongoing Supervisory Oversight...........................................................26
Education & Training....................................................................26
Reporting of Violations.................................................................26
SANCTIONS...................................................................................27
OVERSIGHT BY BOARD OF DIRECTORS.............................................................28
Establishment and Oversight of This Code................................................28
Our Annual Report and Certification to the Board........................................28
RECORD-KEEPING..............................................................................29
The Legal Department is Responsible For:................................................29
The Brokerage Operations Department is Responsible For:.................................30
</TABLE>
iii
<PAGE>
GENERAL PRINCIPLES
9 This Code of Ethics is based on the following general principles that
will govern your conduct while a member of the Bernstein staff:
- YOU MUST PLACE THE INTERESTS OF OUR CLIENTS FIRST;
- YOU MUST CONDUCT YOUR PERSONAL SECURITIES AND COMMODITIES TRANSACTIONS
AND PERFORM YOUR JOB DUTIES IN KEEPING WITH THIS CODE OF ETHICS AND IN
A MANNER SO AS TO AVOID ANY ACTUAL OR POTENTIAL CONFLICTS OF INTEREST
OR ANY ABUSE OF YOUR POSITION OF TRUST AND RESPONSIBILITY;
- YOU MUST NOT TAKE INAPPROPRIATE ADVANTAGE OF YOUR POSITION WITH OUR
FIRM;
- YOU MUST COMPLY WITH ALL APPLICABLE LAWS, RULES AND REGULATIONS, AND
MAKE A GOOD FAITH EFFORT TO COMPLY WITH THE SPIRIT AND INTENT OF ALL
SUCH LAWS, RULES AND REGULATIONS; AND
- YOU MUST COMPLY WITH ALL OTHER POLICIES AND PROCEDURES OF OUR FIRM,
SUCH AS THOSE IN OUR COMPLIANCE MANUAL AND IN BERNSTEIN & YOU, OUR
EMPLOYEE HANDBOOK.
For purposes of this Code, we use the term "client" to include all
institutional brokerage, investment advisory and investment management clients
of Bernstein, including each portfolio of the Sanford C. Bernstein Fund, Inc.
and any other investment company for which we provide investment management
services.
When we refer to "you" in this Code and "your" obligations to abide by this
Code's personal trading restrictions, we also mean any other person, including
your spouse or other family member, whose investment decisions you control or
influence.
IT IS YOUR RESP0NSIBILITY TO READ AND UNDERSTAND THIS CODE. PLEASE DIRECT ANY
QUESTIONS ABOUT THIS CODE TO YOUR SUPERVISOR OR TO THE LEGAL DEPARTMENT.
1
<PAGE>
PERSONAL TRADING RULES
YOU MAY TRADE ONLY AT BERNSTEIN
GENERAL STATEMENT OF POLICY
In order to monitor adherence to the trading rules described in this Code
of Ethics, we require you to maintain at Bernstein all of your securities
accounts and the accounts that you control, and we restrict you from controlling
or influencing any securities or commodities trades outside Bernstein without
our special permission. This means, for example:
- Your securities (including options) accounts must be here;
- The securities accounts of your spouse and other immediate family
members sharing your household must be here if you control the
selection of investments for those accounts;
- You must obtain approval from the firm to maintain a commodities
account with a futures commission merchant;
- You may not control or influence any securities or commodities trade
outside Bernstein without our permission;
- Your IRA or 401(k) account must be here if you can control the
selection of particular stocks for the account;
- You may not trade securities "online;"
- You may not participate directly or indirectly in any investment club
in which members pool their funds and invest;
- If you have a financial interest in a trust, and you control the
selection of securities for the trust, the trust account must be here;
and
- The accounts of charities must be here if you control the selection of
investments for those accounts.
IT IS YOUR RESP0NSIBILITY TO READ AND UNDERSTAND THIS CODE. PLEASE DIRECT ANY
QUESTIONS ABOUT THIS CODE TO YOUR SUPERVISOR OR TO THE LEGAL DEPARTMENT.
2
<PAGE>
PERSONAL TRADING RULES - YOU MAY TRADE ONLY AT BERNSTEIN (CONTINUED)
OUTSIDE ACCOUNTS MUST BE TRANSFERRED TO BERNSTEIN
Beginning on your first day as our staff member, you may not control or
influence the trading of securities or commodities in any outside account. You
must transfer to us all outside accounts as soon as possible unless we give you
permission to maintain the accounts outside Bernstein (as explained on the next
page). You can obtain from the Legal Department the forms for transferring
accounts and for opening accounts at Bernstein.
INITIAL DISCLOSURE UPON COMMENCING EMPLOYMENT
In order for us to monitor and facilitate your transfer of accounts to us
and to otherwise help us to implement this Code, you must report to us within 10
days of joining our firm the information described below. The Personnel
Department will provide you with the forms for making this report.
- Information about all securities and commodities accounts you control
or influence (including accounts with brokers, dealers, banks or
mutual fund companies). You will need to attach the most recent
account statements.
- Information about stock certificates you hold.
- Information about all private placements, limited partnership
interests and other private investments that you control or influence.
- Information about all positions you hold as an employee, officer or
director of any business organization outside Bernstein.
IT IS YOUR RESP0NSIBILITY TO READ AND UNDERSTAND THIS CODE. PLEASE DIRECT ANY
QUESTIONS ABOUT THIS CODE TO YOUR SUPERVISOR OR TO THE LEGAL DEPARTMENT.
3
<PAGE>
PERSONAL TRADING RULES - YOU MAY TRADE ONLY AT BERNSTEIN (CONTINUED)
OUTSIDE TRADES PERMITTED ONLY IN VERY LIMITED CIRCUMSTANCES
We may, in our sole discretion, approve the following requests to execute
trades outside Bernstein:
- You want to trade commodities (such as futures). Since we do not
provide those services, we might allow you to maintain an outside
account for this type of trading, but you will need to obtain our
permission before each trade in accordance with procedures established
by the Legal Department.
- You want to maintain elsewhere a managed account (also known as a
discretionary account) in which an investment manager or other
fiduciary has the authority to make trading decisions on your behalf.
In reviewing your request to maintain an outside managed account, we
might ask for written confirmation that you have no power to choose or
recommend securities to trade for the account. Requests of this type
from principals or shareholders of Bernstein are generally denied.
- You want to hold or trade mutual funds outside Bernstein. If you hold
the mutual fund account directly with a mutual fund company and
without utilizing the services of a broker, you will simply need to
report the account to our Legal Department on a form that we will
supply to you. If you hold the mutual funds in a brokerage account, we
may approve your request if you agree not to trade anything other than
mutual funds in the account.
- You have stock options granted to you by a former employer under an
employee stock option plan. The employer may have a program in place
to facilitate your exercise of options through a broker other than
Bernstein, and you want to participate in that program.
- You have a dividend reinvestment plan that you opened directly with an
issuer and not through a brokerage account. You want to maintain that
plan. You may simply need to report the plan to our Legal Department
on a form that we will supply to you. However, you will need to seek
our permission before selling the securities.
- You have a 401(k) plan through your former employer. You have the
ability to choose certain funds for investment, for example a
"balanced fund," or a "growth fund." You do not have the ability to
choose a "self-directed" option or otherwise to choose particular
securities in which to invest.
- You want to purchase Treasury Notes, Treasury Bonds or Treasury Bills
directly from (or sell directly to) the Federal Reserve Bank, or you
want to hold certificates of deposit ("CDs") at a bank. These do not
fall within the definition of "securities" for purposes of this Code.
- You want to participate in a private placement. You will need to seek
our approval in accordance with the policy described on page 12 of
this Code. If and when the issuer later becomes a public company, you
will need to transfer your investment to a brokerage account at
Bernstein if you wish to sell it.
IT IS YOUR RESP0NSIBILITY TO READ AND UNDERSTAND THIS CODE. PLEASE DIRECT ANY
QUESTIONS ABOUT THIS CODE TO YOUR SUPERVISOR OR TO THE LEGAL DEPARTMENT.
4
<PAGE>
PERSONAL TRADING RULES - YOU MAY TRADE ONLY AT BERNSTEIN (CONTINUED)
HEIGHTENED DISCLOSURE REQUIREMENTS FOR OUTSIDE ACCOUNTS
For any securities or commodities accounts we give you permission to
maintain, control or influence outside of Bernstein, you must arrange for a copy
of the confirmation of each transaction and a copy of each monthly statement to
be provided promptly to our Legal Department. (The only exception is for mutual
funds held directly with a mutual fund company and not purchased utilizing the
services of a broker). Whenever possible, you must arrange for these copies to
be sent directly by the other firm where the account is held.
IT IS YOUR RESP0NSIBILITY TO READ AND UNDERSTAND THIS CODE. PLEASE DIRECT ANY
QUESTIONS ABOUT THIS CODE TO YOUR SUPERVISOR OR TO THE LEGAL DEPARTMENT.
5
<PAGE>
PERSONAL TRADING RULES (CONTINUED)
PRE-APPROVAL REQUIRED FOR ALL TRADES BY ALL STAFF MEMBERS
GENERAL STATEMENT OF POLICY
Each time you want to place a securities or commodities trade in an account
you control or influence (whether at Bernstein or outside of Bernstein as
permitted by the Legal Department), you will first need to obtain our permission
in accordance with the three-step set of procedures described below. These
procedures do NOT apply to:
- trades in open-end mutual fund shares;
- non-volitional trading (for example: stocks splits or dividend
reinvestment plans); or
- trades in managed accounts in which Bernstein or another investment
manager is selecting securities or commodities to trade.
We will disapprove your trade in our sole discretion if we believe that
it would violate this Code, that the frequency or nature of your trading
activity may distract you from your job responsibilities, or that the trade may
otherwise be inappropriate or may raise the appearance of a possible conflict of
interest.
STEPS IN THE PRE-APPROVAL PROCESS
You will need to take three steps in order to place a typical trade. The
three steps are summarized in the chart below, and each step is explained on the
following pages. Other pre-approval requirements will apply if you are seeking
to trade options or if you are seeking to participate in an investment
opportunity of limited availability.
---------------- ------------------- ------------------
STEP ONE: STEP TWO: STEP THREE:
COMPLETE OBTAIN APPROVAL BY OBTAIN APPROVAL BY
ORDER TICKET SUPERVISOR OR OTHER TRADING DESK
MEMO REQUEST AUTHORIZED PERSON
---------------- ------------------- ------------------
IT IS YOUR RESP0NSIBILITY TO READ AND UNDERSTAND THIS CODE. PLEASE DIRECT ANY
QUESTIONS ABOUT THIS CODE TO YOUR SUPERVISOR OR TO THE LEGAL DEPARTMENT.
6
<PAGE>
PERSONAL TRADING RULES - PRE-APPROVAL REQUIRED FOR ALL TRADES BY ALL STAFF
MEMBERS (CONTINUED)
STEP ONE: ORDER TICKET / MEMO REQUEST
Before placing a securities trade AT BERNSTEIN, you will need to fill out a
trade order ticket. You can obtain these tickets from the Legal Department or
the trading desk. From time to time, we will distribute instructions for filling
out the trade order ticket.
Before placing a securities or commodities trade OUTSIDE BERNSTEIN (in the
limited circumstances where outside trading is permitted), you will need to
describe the proposed trade in a written memo. You can obtain a form of
memoranda from the Legal Department.
STEP TWO: APPROVAL BY YOUR SUPERVISOR OR OTHER AUTHORIZED PERSON
You must take your trade order ticket (or your memo, in the case of trades
in authorized outside accounts) to your supervisor or other person authorized to
approve trades. The Legal Department will maintain and distribute periodically a
current list of supervisors and other persons who have authority to approve
personal trades. That person must place his or her initials and the date on the
order ticket (or memo) to document the appropriate approval.
Approval to conduct a personal trade will remain effective only for the day
in which it is granted. If you fail or decline to complete the trade that day
for any reason (including that the trading desk holds your order pending a
client transaction), you must obtain a new approval to place the trade on
another day.
IT IS YOUR RESP0NSIBILITY TO READ AND UNDERSTAND THIS CODE. PLEASE DIRECT ANY
QUESTIONS ABOUT THIS CODE TO YOUR SUPERVISOR OR TO THE LEGAL DEPARTMENT.
7
<PAGE>
PERSONAL TRADING RULES - PRE-APPROVAL REQUIRED FOR ALL TRADES BY ALL STAFF
MEMBERS (CONTINUED)
STEP THREE: APPROVAL OF TRADING DESK
After you have obtained approval from your supervisor or other authorized
person to place a trade, you will still need to obtain the approval of our
trading desk. From time to time, we will distribute procedures for obtaining
trading desk approval. The trading desk, if it approves your proposed
transaction, will place the trade for you, and we will send you a confirmation
in the mail.
EXCEPTION: TRADES IN AUTHORIZED OUTSIDE ACCOUNTS
The only exception is for trades in authorized outside accounts such as
commodities accounts. For these outside trades, you will need to bring your memo
(reflecting the approval of your supervisor or other authorized person) to the
Legal Department before you place the trade outside. The Legal Department will
obtain any additional approvals required and will retain a copy of your
memorandum.
IT IS YOUR RESP0NSIBILITY TO READ AND UNDERSTAND THIS CODE. PLEASE DIRECT ANY
QUESTIONS ABOUT THIS CODE TO YOUR SUPERVISOR OR TO THE LEGAL DEPARTMENT.
8
<PAGE>
PERSONAL TRADING RULES - PRE-APPROVAL REQUIRED FOR ALL TRADES BY ALL STAFF
MEMBERS (CONTINUED)
OUR TRADING DESK WILL NOT PERMIT YOU TO TRADE AHEAD OF CLIENTS
GENERAL STATEMENT OF POLICY
In order to minimize the potential for conflicts of interest between
you and our clients, our trading desks will not permit you to trade under the
following circumstances:
- Related client orders are pending; or
- A large volume of client orders is forthcoming (e.g., the
security is listed as a "priority purchase," "priority sale,"
"trim" or "established tax trade").
Under certain circumstances, your trade might be delayed for several days or
even weeks until the pending or anticipated client orders are completed.
LIMITED EXCEPTION
Our trading desk may grant you an exception under the
circumstances set forth below. This exception will not be available to you if
you are a member of the Fixed Income Department (with respect to fixed income
trades), or if you are a member of an equity IPG or any Equity Portfolio
Management Department, including Investment Management Trading (with respect to
equity trades).
- Your trade involves a relatively insignificant number of shares,
typically less than 500 shares or securities convertible into
less than 500 shares, or less than 25 bonds or securities
convertible into less than 25 bonds;
AND
- The security you are seeking to buy is not part of a large buy
program for client accounts, or the security you are seeking to
sell is not part of a large sell program for client accounts;
AND
- Clients are waiting for a better price before trading. For
equities, pending client orders typically must be awaiting prices
that differ from the market price by at least a 1/2 point. For
fixed income securities, pending client orders typically must be
awaiting prices that differ from the market price by at least 10
basis points in yield.
IT IS YOUR RESP0NSIBILITY TO READ AND UNDERSTAND THIS CODE. PLEASE DIRECT ANY
QUESTIONS ABOUT THIS CODE TO YOUR SUPERVISOR OR TO THE LEGAL DEPARTMENT.
9
<PAGE>
PERSONAL TRADING RULES - PRE-APPROVAL REQUIRED FOR ALL TRADES BY ALL STAFF
MEMBERS (CONTINUED)
OTHER REASONS FOR TRADING DESK DISAPPROVAL
In addition, our trading desks will not permit you to trade if, for
example:
- Our firm has agreed to participate in the underwriting for new
securities of an issuer and your order is for securities of that
issuer.
- Our Institutional Research Department is initiating research
coverage of a company or has reached a research recommendation
about the company that has not yet been disseminated, and you
want to trade securities related to that company.
- Our Institutional Research Department has just disseminated a
research report initiating coverage of a company or changing a
recommendation regarding a company, and you want to trade
securities related to that company. Our trading desks will not
execute for you any personal trades relating to that company
until 48 hours following the dissemination of our research.
- You want to buy a security that our firm has purchased for
clients. It is a security that our firm still would want to
purchase for clients but cannot do so because of regulatory or
policy restrictions limiting the ownership interest in an issuer
that we can acquire for ourselves or our clients.
Moreover, our trading desks may from time to time establish rules for
employee personal trading designed to ensure that we do not divert to our
employees the resources needed to serve our clients. For example, our trading
desk may prohibit personal trading by staff members during certain times of the
day during which the desk tends to be particularly busy with client trades.
IT IS YOUR RESP0NSIBILITY TO READ AND UNDERSTAND THIS CODE. PLEASE DIRECT ANY
QUESTIONS ABOUT THIS CODE TO YOUR SUPERVISOR OR TO THE LEGAL DEPARTMENT.
10
<PAGE>
PERSONAL TRADING RULES (CONTINUED)
PROHIBITION AGAINST INSIDER TRADING
The securities laws and our policies prohibit persons or entities from
acting on inside information, in other words information that is "material" and
"nonpublic." Information may be material and nonpublic if there is a substantial
likelihood that a reasonable investor would consider the information important
in making his or her investment decision and the information is not generally
available to ordinary investors in the marketplace. The information may come
from the company itself, or may come from other sources such as investment
bankers.
- You may not trade while in possession of inside information. This is
true regardless of how you learned about the information.
- If you believe that you have received inside information, you must
immediately cease contact with the source and consult an attorney in
the Legal Department. You must not communicate the inside information
to your supervisor, to anyone in the Portfolio Management Department,
or to anyone other than attorneys in the Legal Department. The Legal
Department will determine whether and to what extent we should impose
trading restrictions on you and/or us. Also, you should speak with the
Legal Department if you believe that other staff members have
communicated or traded upon inside information. The Legal Department,
to the extent practicable, will keep your identity confidential in any
resulting investigation.
- While in possession of inside information, you may not recommend the
purchase or sale of a security to our firm or to any other individual
or entity. You also may not make any comment that could be construed
as a recommendation to purchase or sell the security, or take any
other action with respect to that security.
- In the course of our syndicate activities, meaning where the Firm has
agreed to participate in an underwriting, we may come into possession
of inside information regarding a company issuing or planning to issue
securities. On those occasions, the Syndicate Department must
establish a "Chinese Wall," which is the name given to procedures
designed to prevent the disclosure of such information to other
departments of our Firm. Our Compliance Manual sets forth our Chinese
Wall procedures. If you are a member of the Syndicate Department or
are otherwise instructed by the Legal Department to create a Chinese
Wall, you must familiarize yourself with these procedures.
IT IS YOUR RESP0NSIBILITY TO READ AND UNDERSTAND THIS CODE. PLEASE DIRECT ANY
QUESTIONS ABOUT THIS CODE TO YOUR SUPERVISOR OR TO THE LEGAL DEPARTMENT.
11
<PAGE>
PERSONAL TRADING RULES (CONTINUED)
RESTRICTIONS ON PARTICIPATING IN:
|X| IPOS
|X| PRIVATE SECURITIES TRANSACTIONS AND OTHER INVESTMENT OPPORTUNITIES OF
LIMITED AVAILABILITY
You must obtain the approval of your supervisor and the Legal
Department before you directly or indirectly participate in either of the
following activities:
- INITIAL PUBLIC OFFERINGS. In order to ensure our firm's compliance
with NASD rules, we prohibit our staff members from directly or
indirectly acquiring an interest in an IPO except under very limited
circumstances. For example, if you hold a passbook savings account at
a savings & loan, our Legal Department might permit you (subject to
certain conditions) to participate as an account holder in a
conversion of the savings & loan to a public company, so long as our
firm is not participating in the conversion.
- LIMITED OFFERINGS. This includes any private securities transaction or
other investment opportunity of limited availability, including new
offerings or other investments not registered with the SEC (for
example private real estate limited partnerships, investments in
family-owned businesses and hedge fund investments). In responding to
these requests, we will consider, among other things, whether your
investment is passive, whether the investment opportunity should be
reserved for our clients, and whether the opportunity is being offered
to you by virtue of your position here.
You can obtain from the Legal Department forms for requesting approval. The
Legal Department and your supervisor will approve or disapprove your request in
their discretion.
BERNSTEIN PRINCIPALS AND SHAREHOLDERS SHOULD CONSULT THEIR PRINCIPALS'
AGREEMENT AND SHAREHOLDERS' AGREEMENT RESPECTIVELY FOR ADDITIONAL RESTRICTIONS.
IT IS YOUR RESP0NSIBILITY TO READ AND UNDERSTAND THIS CODE. PLEASE DIRECT ANY
QUESTIONS ABOUT THIS CODE TO YOUR SUPERVISOR OR TO THE LEGAL DEPARTMENT.
12
<PAGE>
PERSONAL TRADING RULES (CONTINUED)
NO SHORT-TERM TRADING
- You may not buy a security if you have sold the same or equivalent
security within the prior thirty (30) calendar days.
- You may not sell a security if you have bought the same or equivalent
security within the prior thirty (30) calendar days.
- This rule does not apply to Treasuries or derivatives on Treasuries,
although even for this limited category of securities you may not
trade on an intra-day basis.
- Exemptions from this rule will be granted only in rare instances, such
as in cases of financial hardship. To obtain an exemption, you must
make a written request for approval from your supervisor and the Legal
Department.
- If you profit from a short-term trade in violation of this section,
you will be required to disgorge your profits to charity.
IT IS YOUR RESP0NSIBILITY TO READ AND UNDERSTAND THIS CODE. PLEASE DIRECT ANY
QUESTIONS ABOUT THIS CODE TO YOUR SUPERVISOR OR TO THE LEGAL DEPARTMENT.
13
<PAGE>
PERSONAL TRADING RULES (CONTINUED)
SPECIAL RESTRICTIONS FOR:
|X| DECISIONMAKERS
|X| OTHERS WITH ACCESS TO DECISIONS
- INVESTMENT MANAGEMENT. You may not trade in a security if you
participate in, or have reason to know about, our firm's consideration
of the security for the accounts of our investment management clients.
This restriction will continue throughout the implementation of any
resulting major buy or sell program. The following examples illustrate
this policy:
- You are seriously considering recommending a security to our
applicable investment policy group ("IPG") for purchase or
sale for clients' accounts, or you are a member of an IPG
where discussions of such a recommendation are taking place.
You may not trade in the security. You may trade, if
otherwise consistent with this Code, only after the IPG has
considered and rejected your recommendation, or after the
IPG has accepted your recommendation and client orders have
been completed.
- You know (for example, because you overheard a conversation)
that our firm intends in the reasonably foreseeable future
to place orders to purchase a security for our clients'
accounts. You may not purchase the security. You may trade,
if otherwise consistent with this Code, only after we have
decided not to purchase the security for clients, or after
all client orders have been filled.
Moreover, you must disclose to the chairperson of the applicable IPG
any of your direct or indirect holdings in a security when you are
participating in our firm's determination of whether to buy or sell
the security for our clients.
- INSTITUTIONAL SERVICES. You may not trade in a security if you have
reason to know that our firm is intending to recommend the security to
clients of our institutional services business, or that any of those
clients are intending in the reasonably foreseeable future to place
orders in the security. The following examples illustrate this policy:
- You become aware of a forthcoming research recommendation of
an institutional research analyst prior to its dissemination
(whether with respect to initiating coverage or to changing
a previously-issued recommendation). You may not trade in
that security until 48 hours after the research report has
been disseminated.
- You learn that a client of our institutional services
business intends to place an order to purchase a security.
You may not trade in the security until the client's orders
have been filled.
IT IS YOUR RESP0NSIBILITY TO READ AND UNDERSTAND THIS CODE. PLEASE DIRECT ANY
QUESTIONS ABOUT THIS CODE TO YOUR SUPERVISOR OR TO THE LEGAL DEPARTMENT.
14
<PAGE>
PERSONAL TRADING RULES (CONTINUED)
CONTRARY TRADING RESTRICTIONS FOR MEMBERS OF:
|X| INVESTMENT POLICY GROUPS
|X| GLOBAL EQUITY PORTFOLIO MANAGEMENT DEPARTMENT (INCLUDING ALL DOMESTIC
AND INTERNATIONAL EQUITY PORTFOLIO MANAGEMENT GROUPS AND INVESTMENT
MANAGEMENT TRADING)
|X| INVESTMENT MANAGEMENT RESEARCH DEPARTMENT (INCLUDING ALL DOMESTIC AND
INTERNATIONAL EQUITY RESEARCH DEPARTMENTS)
|X| FIXED INCOME DEPARTMENT
- - GENERAL STATEMENT OF POLICY. If you work in one of these areas, you may not
make any trades that are contrary to the action our firm is taking, or is
contemplating taking in the reasonably foreseeable future, for our managed
accounts in that area. There is only one exception - if we are holding a
stock for clients solely for purposes of diversification to control the
portfolio's tracking error versus its benchmark index, then the contrary
trading policy would not restrict you from selling the stock.
- - ILLUSTRATIONS OF POLICY. For example, if our firm is buying or holding a
fixed income security for clients' accounts, then you may not sell the
security if you are a member of the fixed income department or you serve as
a member of an investment policy group that encompasses fixed income
securities. Similarly, if our firm has just completed a sell program for an
equity security, you may not buy the security if you are a member of the
Global Equity Portfolio Management Department or Investment Management
Research Department, or if you serve as a member of an investment policy
group that encompasses equity securities. Generally, staff member purchases
more than seven (7) days after we have completed our sell program for
clients will not be considered contrary trading under this policy.
- - EXEMPTIONS. To obtain an exemption from this policy, you will need the
written approval of your supervisor and the Legal Department, which may
consider such factors as the length of your holding period, the size of
your holding in absolute terms and relative to your other holdings, and the
reasons for the proposed trade.
IT IS YOUR RESP0NSIBILITY TO READ AND UNDERSTAND THIS CODE. PLEASE DIRECT ANY
QUESTIONS ABOUT THIS CODE TO YOUR SUPERVISOR OR TO THE LEGAL DEPARTMENT.
15
<PAGE>
PERSONAL TRADING RULES (CONTINUED)
OTHER SPECIAL RESTRICTIONS FOR:
|X| INVESTMENT MANAGEMENT RESEARCH ANALYSTS
|X| INVESTMENT MANAGEMENT RESEARCH ASSOCIATES
|X| FIXED INCOME STAFF PERFORMING RESEARCH
- - If you are a staff member in one of these positions, you must sell all
holdings in a security upon your initiation of research coverage of that
security or before otherwise recommending the security for purchase for
managed accounts. The Director of Investment Management Research, or the
Chief Investment Officer or Director of Global Fixed Income Investments (as
applicable), may grant discretionary exceptions to this policy (in
consultation with the Legal Department) based on factors including:
- the length of time since your last purchase of the security,
- your intent regarding future holding of the security,
- reasons for your original purchase,
- the liquidity, capitalization and volatility of the security, and
- the size of your holding (in both absolute terms and relative to
your overall portfolio).
We might condition an exception on your agreement to hold the security until our
clients have sold it.
- - You may not trade options of any kind in securities you cover.
- - You may not "short" securities you cover.
IT IS YOUR RESP0NSIBILITY TO READ AND UNDERSTAND THIS CODE. PLEASE DIRECT ANY
QUESTIONS ABOUT THIS CODE TO YOUR SUPERVISOR OR TO THE LEGAL DEPARTMENT.
16
<PAGE>
PERSONAL TRADING RULES (CONTINUED)
SPECIAL RESTRICTIONS FOR:
|X| INSTITUTIONAL RESEARCH ANALYSTS
|X| INSTITUTIONAL RESEARCH ASSOCIATES
- You must sell all holdings in a security upon your initiation of
research coverage of that security. In other words, you may not
recommend purchase of a security that you hold. The applicable
Director of Institutional Research may grant discretionary exceptions
to this policy (in consultation with the Legal Department) based on
factors including:
- the length of time since your last purchase of the security,
- your intent regarding future holding of the security,
- reasons for your original purchase,
- the liquidity, capitalization and volatility of the security, and
- the size of your holding (in both absolute terms and relative to
your overall portfolio).
The Director might condition an exception on your agreement to hold the
security until we have disseminated to our institutional clients a
recommendation that the security is rated "underperform." The Director also
might grant limited exceptions for new employees with respect to securities
purchased before joining us.
- - With respect to securities you cover, you may purchase only securities that
you rate "outperform," and you may sell only securities that you rate
"underperform." You may neither buy nor sell securities that you rate
"marketperform." To obtain an exemption from this policy, you will need the
written approval of your supervisor and the Legal Department, which might
consider such factors as the length of your holding period, the size of
your holding in absolute terms and relative to your other holdings, and the
reasons for the proposed trade.
- - You may not trade options of any kind in securities you cover.
- - You may not "short" securities you cover.
IT IS YOUR RESP0NSIBILITY TO READ AND UNDERSTAND THIS CODE. PLEASE DIRECT ANY
QUESTIONS ABOUT THIS CODE TO YOUR SUPERVISOR OR TO THE LEGAL DEPARTMENT.
17
<PAGE>
PERSONAL TRADING RULES (CONTINUED)
OTHER SPECIAL RESTRICTIONS IMPOSED BY YOUR DEPARTMENT
From time to time, any department in our firm may establish rules for
personal trading that cover staff members in that department and that take into
consideration the particular functions and duties of those staff members. Any
personal trading rules issued by your department managers will be in addition to
the rules in this Code.
IT IS YOUR RESP0NSIBILITY TO READ AND UNDERSTAND THIS CODE. PLEASE DIRECT ANY
QUESTIONS ABOUT THIS CODE TO YOUR SUPERVISOR OR TO THE LEGAL DEPARTMENT.
18
<PAGE>
OTHER CONDUCT RULES
GIFTS
The following policies do not apply to personal gifts between staff
members, or to personal gifts between a staff member and a family member or
personal friend that are given or received outside of a business related
setting.
GIFTS RECEIVED BY STAFF MEMBERS
You may not accept any gift (including gifts of tickets to sporting events
or theatre where the person providing the entertainment is not present) other
than gifts of nominal value (under $100) from any one person in any one year.
Under no circumstances may you accept a gift of cash.
ENTERTAINING CLIENTS
You may engage in normal and customary business entertainment (such as
business meals, sporting events and shows) provided that you are present for the
event.
IT IS YOUR RESP0NSIBILITY TO READ AND UNDERSTAND THIS CODE. PLEASE DIRECT ANY
QUESTIONS ABOUT THIS CODE TO YOUR SUPERVISOR OR TO THE LEGAL DEPARTMENT.
19
<PAGE>
OTHER CONDUCT RULES--GIFTS (CONTINUED)
GIFTS GIVEN BY STAFF MEMBERS
You may not give or permit to be given anything of value, including
gratuities, in excess of $100 per individual per year to any person where such
payment or gratuity is in relation to the business of the recipient's employer.
This limit applies, for example, to a gift of tickets to an event if you will
not be accompanying the recipient to the event. The maximum is $50 if the
recipient is a principal, officer or employee of the NYSE or its subsidiaries.
You may give gifts of securities to charity, and we permit you to choose
the securities you wish to give from any type of securities account. Please note
the following regarding the charity's subsequent sale of those securities. If
the charity's account is a managed account held at Bernstein, and the charity
wishes to sell the gifted security, then the charity's account will compete
equally (for allocation purposes) with the managed accounts of our other
clients. If the charity's account is one for which you have the power to control
the choice of securities to trade (and thus the charity's account is a brokerage
account held at Bernstein), then the charity will be required to wait for client
orders to be completed before selling the securities that it received from you.
COMPENSATION TO CERTAIN EMPLOYEES OF OTHERS
Bernstein is permitted by applicable regulations to pay for services of up
to $200 per person per year to certain specified operations persons with the
prior written consent of a Senior Vice President or Vice President of
Operations. Such permitted recipients include a telephone clerk on the New York
Stock Exchange floor who provides courtesy telephone relief to the Firm's floor
clerk or handles orders for the Firm. Please refer to the Firm's Compliance
Manual for detailed procedures regarding compensation of this type.
IT IS YOUR RESP0NSIBILITY TO READ AND UNDERSTAND THIS CODE. PLEASE DIRECT ANY
QUESTIONS ABOUT THIS CODE TO YOUR SUPERVISOR OR TO THE LEGAL DEPARTMENT.
20
<PAGE>
OTHER CONDUCT RULES (CONTINUED)
FINANCIAL INTEREST
You may not act on the firm's behalf in any transaction involving persons
or entities with whom you or your family has any significant connection or
financial interest without prior written approval from our Board of Directors.
You should direct to the office of the General Counsel any requests for approval
from the Board of Directors. For purposes of this policy, your family includes
parents, parents-in-law, spouse, siblings, siblings-in-law, children,
children-in-law, or a person to whom you provide material support.
AWARDING CONTRACTS
We must award orders, contracts and commitments to suppliers strictly based
on merit and without favoritism. The Legal Department must review and approve
all contracts for goods or services before execution, and an authorized Firm
officer must sign each contract. The officer signing the contract must provide a
copy of the final, signed version to the Legal Department for retention.
IT IS YOUR RESPONSIBILITY TO READ AND UNDERSTAND THIS CODE. PLEASE DIRECT ANY
QUESTIONS ABOUT THIS CODE TO YOUR SUPERVISOR OR TO THE LEGAL DEPARTMENT.
21
<PAGE>
OTHER CONDUCT RULES (CONTINUED)
OUTSIDE DIRECTORSHIPS & OFFICERSHIPS AND OTHER OUTSIDE ACTIVITIES
Whether or not in connection with your duties and responsibilities at
Bernstein, you may not accept the following without prior written approval from
the Board of Directors:
- A directorship or officership of any company or organization (other
than a charitable organization), regardless of whether you receive
compensation, or
- Outside employment or remuneration from any source for any services
performed (for example, consulting fees or finder's fees).
You must submit any requests for such approval in writing to the General
Counsel. In a rare instance in which we grant your request to serve as a board
member of a public company, we may require that you be isolated from making any
decisions for our clients with respect to investing in that company.
You may not use the firm's name in connection with any outside activity
without prior written approval from our Board of Directors. You must submit any
request for approval in writing to the General Counsel.
NO RECOMMENDATION OR SALE OF PRODUCTS OTHER THAN BERNSTEIN PRODUCTS
You may not recommend to clients that they participate in any securities
transaction (including any private transaction) other than a Bernstein product.
And, you may not receive "selling" or other compensation in connection with any
securities transaction (including any private transaction) other than a
Bernstein product.
IT IS YOUR RESP0NSIBILITY TO READ AND UNDERSTAND THIS CODE. PLEASE DIRECT ANY
QUESTIONS ABOUT THIS CODE TO YOUR SUPERVISOR OR TO THE LEGAL DEPARTMENT.
22
<PAGE>
OTHER CONDUCT RULES (CONTINUED)
PROPRIETARY INFORMATION
IDENTITY OF COMPANIES ON OUR RESTRICTED LISTS
Our firm maintains lists of securities relating to companies for which we
have agreed to participate in an underwriting, or about which we intend to
publish a research recommendation. You may not disclose outside our Firm the
identity of securities on these lists, since the fact that we have listed a
security may signal the market that we know of a significant development which
may affect the price of the security.
CLIENTS' PROPRIETARY INFORMATION
You must never disclose confidential business or personal information,
including names of clients, client account balances, financial information
obtained from a client, or anticipated changes in the management or financial
condition of a client, outside the normal and necessary course of the firm's
business. This policy does not preclude you from sharing information about a
client with his or her lawyers, accountants or other advisors upon the client's
request.
OUR RESEARCH
Our firm gathers and develops information that we use to service our
clients. For example, our Institutional Research Analysts publish "Black Book"
reports. You may not disclose this information outside the firm except as
required to perform your job duties. Also, any material marked "Not for External
Distribution," including research prepared by investment management research
analysts, should not be distributed outside the firm.
OTHER
During the course of your employment, you may have access to information
relating to our business, including information that provides our firm with a
competitive advantage. This confidential information may include, for example,
information relating to our investment strategies, our investment management
processes or systems, our existing or anticipated corporate activity, our
financial condition or performance, or compensation paid to our staff. You may
not disclose confidential information to anyone outside Bernstein except in the
course of the proper exercise of your job duties.
IT IS YOUR RESP0NSIBILITY TO READ AND UNDERSTAND THIS CODE. PLEASE DIRECT ANY
QUESTIONS ABOUT THIS CODE TO YOUR SUPERVISOR OR TO THE LEGAL DEPARTMENT.
23
<PAGE>
OTHER CONDUCT RULES (CONTINUED)
RUMORS
New York Stock Exchange rules, as well as our policy, prohibit the
circulation of rumors concerning the affairs of any company, as well as the
affairs of other NYSE member organizations, since rumors can influence
securities prices. If a rumor comes to your attention, you must contact the
Legal Department immediately and refrain from spreading the rumor.
COMMUNICATION WITH CLIENTS & THE PUBLIC
Our Compliance Manual sets forth our policies and procedures regarding our
communications with clients or other members of the public, with which you must
comply. Also, you must comply with sections of our Compliance Manual governing
our review of incoming and outgoing correspondence of certain staff members. In
addition, when communicating with clients or the public, truthfulness and good
taste are always required.
IT IS YOUR RESP0NSIBILITY TO READ AND UNDERSTAND THIS CODE. PLEASE DIRECT ANY
QUESTIONS ABOUT THIS CODE TO YOUR SUPERVISOR OR TO THE LEGAL DEPARTMENT.
24
<PAGE>
OTHER CONDUCT RULES (CONTINUED)
REPORTABLE EVENTS INVOLVING STAFF MEMBERS
We are required to notify regulatory authorities in the event that a staff
member is involved in or is the subject of a "reportable event," for the most
part when a staff member faces actual or potential disciplinary action or finds
him or herself in some other kind of legal or regulatory trouble. While we are
likely to become aware of certain types of reportable events in the course of
our supervision of staff members, we may not necessarily be aware of all
reportable events without your disclosure. In order to facilitate our firm's
compliance with these requirements, you are required to notify the Legal
Department immediately in the event you, or a person under your supervision,
comes under scrutiny by our firm or any outside person or entity or engages in
conduct warranting a higher level of supervisory oversight by our firm. For
example, you must notify the our Legal Department if you, or a person under your
supervision:
- violates a law or regulation, or any agreement with or rule or
standard of any government agency, self-regulatory organization or
business or professional organization;
- is the subject of any customer complaint;
- is named as a defendant or respondent in any proceeding;
- is denied registration or membership or is disciplined by any
regulatory or self-regulatory organization;
- makes any false or misleading statement, or omits a fact required to
be disclosed, in connection with any matter involving a regulatory
agency, whether in connection with an application, report, proceeding
or otherwise;
- is arrested, or is charged with, convicted of, pleads guilty to, or
pleads no contest to, any criminal offense (other than minor traffic
violations);
- has any association with an entity or person which was disciplined,
suspended, expelled or had its registration denied or revoked by any
agency, jurisdiction or organization, or which was convicted of, or
pleaded no contest to, any criminal offense;
- makes a compromise with creditors, files a bankruptcy petition or is
the subject of an involuntary bankruptcy petition;
- is or may become the subject of any internal disciplinary action;
- violates rules of our firm including this Code.
IT IS YOUR RESP0NSIBILITY TO READ AND UNDERSTAND THIS CODE. PLEASE DIRECT ANY
QUESTIONS ABOUT THIS CODE TO YOUR SUPERVISOR OR TO THE LEGAL DEPARTMENT.
25
<PAGE>
ADMINISTRATION
ANNUAL REPORT AND CERTIFICATION
Annually, we will require you to certify on a form provided by the Legal
Department that you have read and understand this Code and have complied with
all applicable requirements. On the same form, we will require you to certify
the accuracy of our records regarding any accounts or investments you control or
influence outside of Bernstein and any outside business activities.
ONGOING SUPERVISORY OVERSIGHT
The Legal Department and your department manager will receive information
about your personal trading and will investigate any aberrational trading
activity, trades that appear to violate this Code, or trades that otherwise
raise the appearance of impropriety. In addition to our procedures for
monitoring securities and commodities transactions and holdings, we also will,
in connection with our supervisory responsibilities, endeavor to monitor your
conduct to ensure compliance with other conduct rules in this Code.
EDUCATION & TRAINING
We will periodically hold education and training programs in order to,
among other things, highlight the requirements of this Code. You are required to
attend the programs that we hold for you. In addition, if you are a "registered"
staff member, you are responsible for your compliance with continuing education
requirements of the regulatory authorities.
REPORTING OF VIOLATIONS
All departments must promptly report to the Legal Department any violations
of this Code. All departments should consult with the Legal Department before
imposing any sanctions for violations.
IT IS YOUR RESP0NSIBILITY TO READ AND UNDERSTAND THIS CODE. PLEASE DIRECT ANY
QUESTIONS ABOUT THIS CODE TO YOUR SUPERVISOR OR TO THE LEGAL DEPARTMENT.
26
<PAGE>
SANCTIONS
To ensure compliance with the letter and spirit of this Code and with all
applicable laws, we reserve the right in our sole and absolute discretion to:
- Cancel any trade with or without notice to you at your expense;
- Require you to forfeit any profit you have made;
- In the case of an approved outside account, instruct you to cancel the
trade at your expense; and/or
- Suspend or revoke your trading privileges at any time for violations
of the letter or spirit of this Code or any applicable law, in
addition to any other disciplinary action or sanction.
If we discover a violation of this Code, we will respond appropriately,
which may include sanctions such as a letter of censure and/or a fine, or
suspension or termination of employment. Certain violations of this Code may
also expose a staff member (as well as the Firm) to regulatory disclosure
requirements, criminal prosecution and claims for damages.
IT IS YOUR RESP0NSIBILITY TO READ AND UNDERSTAND THIS CODE. PLEASE DIRECT ANY
QUESTIONS ABOUT THIS CODE TO YOUR SUPERVISOR OR TO THE LEGAL DEPARTMENT.
27
<PAGE>
OVERSIGHT BY BOARD OF DIRECTORS
ESTABLISHMENT AND OVERSIGHT OF THIS CODE
The Board of Directors has approved this Code of Ethics and is responsible
for overseeing its operation, including but not limited to approving any
amendments to this Code as may be necessary or appropriate in light of any
violations of this Code and changing circumstances. In approving this Code of
Ethics, our Board of Directors has determined that:
- Personal investing by our staff members does not conflict with the
interests of our clients provided that our staff members comply with
the policies, procedures and restrictions set forth in this Code; and
- In light of the nature of our business, this Code contains provisions
reasonably necessary to prevent conflicts of interest between our
staff members and our clients.
OUR ANNUAL REPORT AND CERTIFICATION TO THE BOARD
At least once a year, we will provide the Boards of Directors of the
Sanford C. Bernstein Fund, Inc. and any other registered investment companies
for which we provide investment management services with a written report
describing any issues arising under this Code of Ethics or related procedures
since the last report, including, but not limited to:
- Information about material violations of the Code or procedures, or
violations that are material in the aggregate;
- Sanctions imposed in response to those violations;
- Information about any other significant conflicts of interest that
arose involving our personal investment policies;
- Procedures initiated or changes made to this Code since the last
report; and
- Amendments and modifications to the Code that we propose to make.
In connection with the annual report, we will also certify to each investment
company's Board of Directors that we have adopted and implemented such
procedures as we believe are reasonably necessary to prevent violations of this
Code of Ethics.
IT IS YOUR RESP0NSIBILITY TO READ AND UNDERSTAND THIS CODE. PLEASE DIRECT ANY
QUESTIONS ABOUT THIS CODE TO YOUR SUPERVISOR OR TO THE LEGAL DEPARTMENT.
28
<PAGE>
RECORD-KEEPING
THE LEGAL DEPARTMENT IS RESPONSIBLE FOR:
- Maintaining (or causing another department to maintain) copies of the
initial holdings reports and annual certifications for at least five
years after the end of the calendar year in which the report is made,
the first two years in an easily accessible place.
- Maintaining the original of each staff member memorandum requesting
permission to conduct a trade in an outside account, each of which
reflects the initials of the supervisor or other authorized person who
approved the trade and the date of that approval, for at least five
years after the end of the calendar year in which the memorandum was
approved, the first two in an easily accessible place.
- Maintaining copies of each broker trade confirmation for each
transaction in approved outside accounts, if any, and a copy of each
monthly or quarterly statement for those accounts, for at least five
years after the end of the calendar year in which the information is
provided, the first two years in an easily accessible place.
- Maintaining (or causing another department to maintain) records of all
persons, currently or within the past five years, required to make
reports of holdings and/or account activity, and of the persons
responsible for reviewing those reports, in an easily accessible
place.
- Maintaining records of all approvals of, and the rationale supporting,
participations in IPOs, private placements and other investment
opportunities of limited availability, for at least five years after
the end of the calendar year in which the approval is granted.
- Maintaining in an easily accessible place a current copy of this Code
of Ethics and a copy of each Code of Ethics effective for the
preceding five-year period.
- Maintaining records of any violations of this Code and sanctions for
such violations in an easily accessible place for at least five years
after the end of the calendar year in which the violations occurred.
- Maintaining copies of our reports to Boards of Directors regarding
this Code for at least five years after the end of the calendar year
in which they are made, the first two years in an easily accessible
place.
IT IS YOUR RESP0NSIBILITY TO READ AND UNDERSTAND THIS CODE. PLEASE DIRECT ANY
QUESTIONS ABOUT THIS CODE TO YOUR SUPERVISOR OR TO THE LEGAL DEPARTMENT.
29
<PAGE>
RECORD-KEEPING (CONTINUED)
THE BROKERAGE OPERATIONS DEPARTMENT IS RESPONSIBLE FOR:
- Maintaining records of all trade order tickets for the trades at
Bernstein in accounts controlled by staff members, each of which
reflects the initials of the supervisor or other authorized officer
who approved the trade and the date of that approval, for at least
five years after the end of the calendar year in which the trade was
effected, the first two years in an easily accessible place.
- Maintaining copies of all brokerage statements for accounts at
Bernstein controlled by staff members for at least five years after
the end of the calendar month to which they pertain, the first two
years in an easily accessible place.
IT IS YOUR RESP0NSIBILITY TO READ AND UNDERSTAND THIS CODE. PLEASE DIRECT ANY
QUESTIONS ABOUT THIS CODE TO YOUR SUPERVISOR OR TO THE LEGAL DEPARTMENT.
30
<PAGE>
SECTION 18
- -------------------------------------------------------------------------------
CODE OF ETHICS
While SAM is confident of its employees integrity and good faith, there are,
certain instances, where employees possess knowledge regarding present or future
transactions or have the ability to influence portfolio transactions made by the
Company for its clients in securities in which they personally invest. In these
situations personal interest may conflict with that of the Company's clients.
In view of the above, SAM has adopted this Code of Ethics to specify or prohibit
certain types of transactions deemed to create conflicts of interest (or the
potential for or appearance of), and to establish reporting requirements and
enforcement procedures.
18.1 STATEMENT OF GENERAL PRINCIPLES
In recognition of the trust and confidence placed in SAM by its
clients and to stress SAM's belief that its operations are directed to
the benefit of its clients, the Company has developed and adopted the
following general principles to guide its employees, officers, and
directors.
1. The interests of the clients are paramount and all associated persons of
the Company must conduct themselves in such a manner that the interests of
the clients take precedence over all others.
2. All personal securities transactions by associated persons of the Company
must be accomplished in such a way as to avoid any conflict between the
interest of the Company's clients and the interest of any associated
person.
3. All associated persons of the Company must avoid actions or activities that
allow personal benefit or profit from their position with regard to the
Company's clients.
18.2 DEFINITIONS
1. "Access Person"-any director, officer, or associated person who recommends
the purchase or sale of securities for the Company on behalf of the client.
2. "Beneficial Ownership" of a security - a person is considered to be a
beneficial owner of any securities in which he has a direct or indirect
monetary interest or is held by his spouse, his minor children, a relative
who shares his home, or other persons by reason of any contract,
arrangement, understanding or relationship that provides him with sole or
shared voting or investment power.
18-1
3. "Control" - means the power to exercise a controlling influence over the
management or policies of a company, unless such power is solely the result
of an official position with such company. Ownership of 25% or more of a
company's outstanding voting security is presumed to give the holder
control over the company.
<PAGE>
4. "Investment Personnel" - means all Access Persons who occupy the position
of portfolio manager with respect to the clients of SAM or any
separately-managed series thereof (a "Fund"), and all Access Persons who
provide or supply information and/or advice to any portfolio manager (or
Trust Officer), or who execute or help execute any portfolio manager's
decisions.
5. "Purchase or Sale of a Security" includes, among other things, the writing
of an option to purchase or sell a security.
6. "Security" shall have the same meaning as that set forth in Section
2(a)(36) of the 1940 Act, except that it shall not include securities
issued by the Government of the United States or an agency thereof,
banker's acceptances, bank certificates of deposit, commercial paper and
registered open-end mutual funds.
7. A "Security Held or to be Acquired" by the clients means any security
which, within the most recent fifteen days, (i) is or has been held by the
clients or (ii) is being or has been considered by the Company for purchase
by the clients.
8. A Security is "being purchased or sold" by the clients from the time when a
purchase or sale has been communicated to the Company until the time when
such transaction has been fully completed or terminated.
18.3 PROHIBITED PURCHASES AND SALES OF SECURITIES
1. No access person shall, in connection with the purchase or sale, directly
or indirectly:
a. employ any device, scheme or artifice to defraud;
b. make any untrue statement of a material fact or omit to state a
material fact;
c. engage in any act, practice or course of business which would operate
as a fraud or deceit; or
d. engage in any manipulative practice.
2. No access person may purchase or sell, directly or indirectly, any security
in which he had or by reason of such transaction acquires any beneficial
ownership, within 24 hours before or after the time that the same (or a
related) security is being purchased or sold by a client.
3. No investment personnel may acquire securities as part of an initial public
offering by the issuer.
4. No investment personnel shall purchase or sell, directly or indirectly, any
security in which he had or by reason of such transaction acquires any
beneficial ownership within 7 days before or after the time that the same
(or a related) security is being purchased or sold by any client for which
he acts as the portfolio manager.
18.4 PRE-CLEARANCE OF TRANSACTIONS
18-2
1. Except as provided in Section 18.4.2, below, all investment personnel must
pre-clear each proposed transaction in securities with a designated
Supervisor prior to proceeding with the transaction. In determining whether
to grant such clearance, the designated Supervisor shall refer to the
Section 18.4.3, below.
2. The requirements of Section 18.4.1 shall not apply to the following
transactions:
<PAGE>
a. Purchases or sales over which the Investment Personnel has no direct
or indirect influence or control.
b. Purchases or sales which are non-volitional on the part of either the
Investment Personnel or any Fund, including purchases or sales upon
exercise of puts or calls written by the Investment Personnel and
sales from a margin account pursuant to a BONA FIDE margin call.
c. Purchases which are part of an automatic dividend reinvestment plan.
d. Purchases effected upon the exercise of rights issued by an issuer
PRO RATA to all
e. holders of a class of its securities, to the extent such rights were
acquired from such issuer.
3. The following transactions must be approved by the designated Supervisor.
a. Transactions which appear upon reasonable inquiry and investigation to
present no reasonable likelihood of harm to the clients and which are
otherwise in accordance with Rule 17j-1.
b. Purchases or sales of securities which are not eligible for purchase
or sale by any client, as determined by reference to the Act and blue
sky laws and regulations hereunder, the investment objectives and
policies and investment restrictions of the clients and their series,
and undertakings made to regulatory authorities.
c. Transactions which the designated Supervisor after consideration of
all the facts and circumstances, determines to be in accordance with
Section 18.3 and to present no reasonable likelihood of harm to the
clients.
18.5 ADDITIONAL RESTRICTIONS AND REQUIREMENTS
1. No Access Person shall accept or receive any gift in excess of $100 value
from any person or entity that does business with or on behalf of SAM.
2. EACH ACCESS PERSON MUST HAVE DUPLICATE STATEMENTS FOR ALL PERSONAL
BROKERAGE ACCOUNTS SENT TO THE DESIGNATED SUPERVISOR DIRECTLY FROM HIS/HER
BROKER/DEALER. Compliance with this provision can be effected by the Access
Person providing duplicate copies of all such statements directly to the
designated Supervisor within two business days of receipt by the Access
Person.
3. No Investment Personnel may accept a position as a director, trustee or
general partner of a publicly-traded company unless such position has been
presented to and approved by the Company and by Trusts' Board of Trustees
as consistent with the interests of the Trusts and their shareholders.
4. All Investment Personnel must provide to the designated Supervisor a
complete listing of all securities owned by such person as of the effective
date of employment, and thereafter must submit a revised list of such
holdings to the designated Supervisor as of January 1 of each subsequent
year. The initial listing must be submitted within 10 days of the date upon
which such person first became an Access Person of the Trusts, a
18-3
<PAGE>
and each update thereafter must be provided no later than 10 days after the
start of the subsequent year. A report form and reminder will be sent to
all Investment Personnel prior to year-end. (see Exhibit 10).
5. INVESTMENT PERSONNEL MAY NOT PROFIT FROM THE PURCHASE AND SALE OR SALE AND
PURCHASE OF A SECURITY WITHIN 60 DAYS OF ACQUIRING OR DISPOSING OF
BENEFICIAL OWNERSHIP OF THAT SECURITY. THIS PROHIBITION DOES NOT APPLY TO
TRANSACTIONS RESULTING IN A LOSS, OR TO FUTURES OR OPTIONS ON FUTURES ON
BROAD-BASED SECURITIES INDEXES OR U.S. GOVERNMENT SECURITIES.
18.6 REPORTING OBLIGATION
1. The Advisor shall create and maintain a listing of all Access Persons,
Investment Personnel, and designated Supervisors.
2. Each Access Person shall report all transactions in securities in which the
person has, or by reason of such transaction acquires, any direct or
indirect beneficial ownership. (see Exhibit 5).
3. Each Access Person shall sign an acknowledgment at the time this Code is
adopted or at the time such person becomes an Access Person and on an
annual basis thereafter that he has read, understands, and agrees to abide
by this Code.
18.7 REPORTS
1. Each Access Person shall submit quarterly reports of personal securities
transactions to the designated Supervisor. The designated Supervisor shall
submit confidential quarterly reports with respect to his or her own
personal securities transactions to an officer designated to receive his or
her reports ("Alternate designated Supervisor"), who shall act in all
respects in the manner prescribed herein for the designated Supervisor.
2. Any such report may contain a statement that the report shall not be
construed as an admission by the person making such report that he has any
direct or indirect beneficial ownership in the security to which the report
relates.
3. Every Access Person shall report the name of any publicly-owned company (or
any company anticipating a public offering of its equity securities) and
the total number of its shares beneficially owned by him if such total
ownership is more than 1/2 of 1% of the company's outstanding shares.
4. Every report shall be made not later than 10 days after the end of the
calendar quarter in which the transaction to which the report relates was
effected, and shall contain the following information:
a. The date of the transaction, the title and the number of shares or the
principal amount of each security involved;
b. The nature of the transaction (i.e., purchase, sale or any other type
of acquisition or disposition);
c. The price at which the transaction was effected;
d. The name of the broker/dealer or bank with or through whom the
transaction was effected; and
e. The date the report was signed.
<PAGE>
18-4
5. In the event no reportable transactions occurred during the quarter, the
report should be so noted and returned, signed and dated.
6. Report forms will be sent to all Access Persons by the designated
Supervisor prior to the end of each quarter.
18.8 REVIEW AND ENFORCEMENT
The designated Supervisor shall review reported personal securities
transactions, brokerage statements, and/or the clients' securities
transactions to determine whether a violation of this Code may have
occurred. Before making any determination that a violation has been
committed by any person, the designated Supervisor shall give such
person an opportunity to supply additional explanatory material.
If the designated Supervisor determines that a violation of this Code
may have occurred, he shall submit his written determination, together
with the confidential monthly report and any additional explanatory
material provided by the individual, to the Counsel for the Advisor,
who shall make an independent determination as to whether a violation
has occurred.
If the Counsel for the Advisor finds that a violation has occurred,
the Counsel for the Advisor shall impose upon the individual such
sanctions as he or she deems appropriate and shall report the
violation and the sanction imposed to the Board of Trustees of the
Trusts.
No person shall participate in a determination of whether he has
committed a violation of the Code or of the imposition of any sanction
against himself. If a securities transaction of the Counsel for the
Advisor is under consideration, any other Counsel shall act in all
respects in the manner prescribed herein for the Counsel for the
Advisor.
18.9 RECORDS
The Company shall maintain records in the manner and to the extent set
forth below, and will make them available for examination by
representatives of the Securities and Exchange Commission.
1. A copy of this Code and any other code which is, or at any time within the
past five years has been, in effect shall be preserved in an easily
accessible place;
2. A record of any violation of this Code and any action taken as a result of
such violation shall be preserved in an easily accessible place for a
period of not less than five years following the end of the fiscal year in
which the violation occurs;
18-5
<PAGE>
3. A copy of each report made by an officer or Supervisor pursuant to this
Code shall be preserved for a period of not less than five years from the
end of the fiscal year in which it is made, the first two years in an
easily accessible place; and
4. A list of all persons who are, or within the past five years have been,
required to make reports pursuant to this Code shall be maintained in an
easily accessible place.
18.10 MISCELLANEOUS
All reports of securities transactions and any other information filed
with the Company pursuant to this Code shall be treated as
confidential. The Company may from time to time adopt such
interpretations of this Code as it deems appropriate.
The Counsel for the Company, or an appropriate member of SAM, shall
report to SAM and to the Board of Trustees of the Trusts at least
annually as to the operation of this Code and shall address in any
such report the need (if any) for further changes or modifications to
this Code.
<PAGE>
CODE OF ETHICS
SCOPE AND PURPOSE
This Code of Ethics (the "Code") applies to:
- - all directors, officers and employees of: }
- Schroder Investment Management North } Collectively }
America Inc., } "SIM NA" }
- Schroder Investment Management North }
America Limited }
- Schroder Fund Advisors Inc., ("SFA") }
- - Schroder Investment Management International }
Limited ("SIMIL") } Collectively
- - New York based employees of Schroder US } The "US
Holdings Inc. ("SI") who are located on the } Schroder
34th floor of 787 Seventh Avenue, } Group"
New York, NY 10019. }
- - all persons employed by any subsidiary of }
Schroders plc ("Schroders") who are Access }
Persons (as defined below) of any }
registered investment company managed }
by SIM NA. }
Set forth below is the Code of Ethics (the "Code") for the US Schroder Group, as
required by Rule 17j-1 under the Investment Company Act of 1940 (the "Investment
Company Act"), Section 204A of the Investment Advisers Act of 1940 (the
"Advisers Act"), Rule 204-2(a)(12) under the Advisers Act and Section 20A of the
Securities Exchange Act of 1934 ( the "Exchange Act"). The Code applies to every
employee (full- and part-time) of the US Schroder Group.
The objective of the Code is to ensure that all business dealings and securities
transactions undertaken by employees, whether for clients or for personal
purposes, are subject to the highest ethical standards. Incorporated within the
Code are an Insider Trading Policy and a Personal Securities Transactions
Policy, which contain procedures that must be followed by all personnel.
Every employee, by means of an Annual Certification of Compliance with the Code
of Ethics (see Exhibit B), must retain, read and acknowledge receipt and
understanding of this Code, which will be updated as necessary. Any questions
regarding the Code should be referred to the appropriate Ethics Supervisor.
The Code contains additional restrictions and requirements for certain Access
Persons (as defined in Appendix A), including all US Schroder Group fund
managers, investment analysts, traders, and those employees who, in connection
with their duties, are aware of securities under consideration for purchase or
sale on behalf of clients. Such persons will be
- 1 -
<PAGE>
notified in writing of their status. These restrictions are designed to
prevent any conflict or the appearance of any conflict of interest between
trading for their personal accounts and securities transactions initiated or
recommended for clients.
STATEMENT OF POLICIES
(a) CONFIDENTIALITY
Personnel are expected to honor the confidential nature of company and
client affairs. Information designated as confidential shall not be
communicated outside of the US Schroder Group or other affiliated
companies of Schroders other than to advisers consulted on a
confidential basis, and shall only be communicated within Schroders on
a "need to know" basis or as otherwise authorized by management in
conformity with the Code.
Personnel must also avoid making unnecessary disclosure of ANY internal
information concerning Schroders and its business relationships and
must use such information in a prudent and proper manner in the best
interests of Schroders and its clients.
(b) LEVEL OF CARE
Personnel are expected to represent the interests of Schroders and its
clients in an ethical manner and to exercise due skill, care, prudence
and diligence in all business dealings, including but not limited to
compliance with all applicable regulations and laws, and to avoid
illegal activities and other conduct specifically prohibited to its
personnel by the respective policies of any of the US Schroder Group
companies in relation to which a person is a director, officer or
employee.
(c) FIDUCIARY DUTIES
All personnel have fiduciary duties:
(i) at all times to place the interests of their clients before
their own and not to take inappropriate advantage of their
position, and
(ii) to conduct themselves in a manner which will avoid any actual
or potential conflict of interest or any abuse of a position
of trust and responsibility.
- 2 -
<PAGE>
(d) REQUIREMENTS
(i) Personnel are required to comply with the Insider Trading
Policy and Personal Securities Transactions Policy
incorporated herein.
(ii) Personnel are prohibited from receiving any gift or other
thing of more than DE MINIMIS value from any person or entity
that does business with or on behalf of any client.
Personnel are prohibited from serving on the board of directors of any publicly
listed or traded company or of any company whose securities are held in any
client portfolio, except with the prior authorization of the Chairman or Chief
Executive of SIM NA, the Chairman of SIMIL or, in their absence, a majority of
the Ethics Committee, based upon a determination that the board service would be
consistent with the interests of Schroders' clients. If permission to serve as a
director is given, the company will be placed permanently on Section Two of the
US Schroder Group Restricted List. Transactions in that company's securities for
client and personal securities accounts will only be authorized when
certification has been obtained from that company's Secretary or similar officer
that its directors are not in possession of material price sensitive information
with respect to its securities.
COMPLIANCE
THE ETHICS COMMITTEE (see Appendix A) is responsible for ensuring that a copy of
the Code is delivered to all persons at the time of the commencement of their
employment with any US Schroder Group company, as well as on an annual basis. As
a condition of continuing employment, each employee is required to acknowledge
in writing receipt of a copy of the Code and that he or she has understood the
obligations and responsibilities hereunder and on an annual basis to certify
compliance with it on the form provided.
THE ETHICS SUPERVISORS (see Appendix A) are each responsible for maintaining
with respect to their company the records and filings required under the Code
and must report immediately to the Ethics Committee any evidence of a breach of
the Code by any personnel. Following such report, there will be a prompt review
of the situation by the Ethics Committee and, if necessary, appropriate
disciplinary and/or dismissal proceedings will be instituted, including, but not
limited to, referral to the appropriate regulatory agency. Each Ethics
Supervisor will conduct a regular annual review, in addition to any other
special reviews which may be deemed appropriate by the Ethics Supervisor, to
supervise the operation of the Code (including the Insider Trading and Personal
Securities Transactions Policies) and will report such reviews by January 31st
of each year to the Ethics Committee or other senior officer of the US Schroder
Group appointed to receive this information.
- 3 -
<PAGE>
QUESTIONS
All questions about an individual's responsibilities and obligations under the
Code of Ethics should be referred to any member of the Ethics Committee, to the
Chief Compliance Officer in New York or London, to the General Counsel of
Schroder U.S. Holdings Inc., or to the relevant Ethics Supervisor.
- 4 -
<PAGE>
INSIDER TRADING POLICY
THE SCOPE AND PURPOSE OF THE POLICY
It is a violation of United States federal law and a serious breach of
Schroders' policies for any employee to trade in, or recommend trading in, the
securities of a company, either for his/her personal gain or on behalf of the
firm or its clients, while in the possession of material, nonpublic information
("inside information") which may come into his/her possession either in the
course of performing his/her duties, or through personal contacts. Such
violations could subject you, Schroders, and our parent organizations, to
significant civil as well as criminal liability, including the imposition of
monetary penalties, and could also result in irreparable harm to the reputation
of Schroders. Tippees (I.E., persons who receive material, nonpublic
information) also may be held liable if they trade or pass along such
information to others.
The US Insider Trading and Securities Fraud Enforcement Act of 1988 ("ITSFEA")
requires all broker-dealers and investment advisers to establish and enforce
written policies and procedures reasonably designed to prevent misuse of
MATERIAL, NON-PUBLIC information. Although ITSFEA itself does not define
"insider trading", the US Supreme Court has previously characterized it as the
purchase or sale of securities (which include debt instruments and put and call
options) while in possession of information which is both MATERIAL and
NON-PUBLIC, I.E., information not available to the general public about the
securities or related securities, the issuer and in some cases the markets for
the securities. The provisions of ITSFEA apply both to trading while in
possession of such information and to communicating such information to others
who might trade on it improperly. This policy supplements the policies and
procedures set forth in SIM NA, SFA's and SI's Chinese Wall Procedures, which
are incorporated herein by reference.
MATERIALITY
Inside information is generally understood as material information about an
issuer of publicly-traded securities that has not been made known to either the
professional investment community or to the public at large. Inside information
is material if it would be likely to have an effect on the price of the issuer's
securities or if a reasonable investor would be likely to consider it important
in making his/her investment decision. Such information usually originates from
the issuer itself and could include, among other things, knowledge of a
company's earnings or dividends, a significant change in the value of assets,
changes in key personnel or plans for a merger or acquisition.
For example, a portfolio manager, analyst or trader may receive information
about an issuer's earnings or a new product in a private communication with the
issuer. Such information is usually considered material and is generally inside
information because it has not been effectively disseminated to the public at
large. As a general rule, any information
- 5 -
<PAGE>
received from an issuer that has not been made public in a press release or a
public filing will be considered inside information. Upon learning the
information, the employee may not purchase or sell securities of the issuer for
him/herself or for any account under management until the information is
effectively disseminated to the public.
If an employee has received information regarding an issuer and he/she believes
that the information given has not been given in breach of fiduciary duties,
then that person may retain and act upon the information.
Market information which emanates from outside the corporation but affects the
market price of an issuer's securities can also be inside information. For
example, inside information can also originate within Schroders itself. This
would include knowledge of activities or plans of an affiliate, or knowledge of
securities transactions that are being considered or executed on behalf of
clients. Inside information can also be obtained from knowledge about a client
that an employee has discovered in his/her dealings with that client. Inside
information pertaining to a particular issuer could also involve another company
that has a material relationship to the issuer, such as a major supplier's
decision to increase its prices.
In addition, Rule 14e-3 under the Exchange Act makes it unlawful to buy or sell
securities while in possession of material information relating to a tender
offer, if the person buying or selling the securities knows or has reason to
know that the information is nonpublic and has been acquired, directly or
indirectly from the person making or planning to make the tender offer, from the
target company, or from any officer, director, partner or employee or other
person acting on behalf of either the bidder or the target company. This rule
prohibits not only trading, but also the communication of material, nonpublic
information relating to a tender offer to another person in circumstances under
which it is reasonably foreseeable that the communication will result in a trade
by someone in possession of the material, nonpublic information.
PROCEDURES AND RESPONSIBILITIES OF EMPLOYEES
1. Personnel who acquire NON-PUBLIC information (that may possibly be
material) about a company are immediately prohibited:
(a) from trading in the securities of that company or related securities
and financial instruments (as defined below) whether for client
accounts, for Schroder company accounts, or for any Personal Account
(see definition in Appendix A), and
(b) from communicating the information either inside or outside Schroders
except as provided below.
2. Such personnel, other than Senior Executives as defined in the Chinese Wall
Procedures, are required immediately to notify the most senior-ranking
available
- 6 -
<PAGE>
member of the Ethics Committee (see Appendix A) who will evaluate
whether the information is both MATERIAL and NON-PUBLIC.
IF YOU ARE IN ANY DOUBT, SPEAK TO THE SENIOR-RANKING AVAILABLE MEMBER OF
THE ETHICS COMMITTEE.
3. If the information is determined by this member of the Ethics Committee to
be MATERIAL and NON-PUBLIC, all securities of the relevant company (or
companies) and related securities or financial instruments will be placed
on Section One of the US Schroder Group Restricted List (see discussion
below) with immediate effect.
4. Only the member of the Ethics Committee who determined the information to
be MATERIAL and NON-PUBLIC may decide whether it is necessary to
communicate the Inside Information to another party, either inside or
outside Schroders. If so, the communication must state clearly and
expressly that such information is MATERIAL, NON-PUBLIC and confidential
and that its possession precludes trading for any account in any security
of the specified company or any related security or financial instrument.
5. This same member of the Ethics Committee is responsible for notifying the
Ethics Supervisor when such information ceases to be MATERIAL and
NON-PUBLIC and for ensuring that the securities of the relevant company or
companies and related securities or financial instrument are removed from
the US Schroder Group Restricted List. The person who initially reported
possession of the information is required to notify the member of the
Ethics Committee of any change in status of the information of which he or
she becomes aware.
6. All employees are also responsible for preventing disclosure of any
NON-PUBLIC information in Schroders' possession, whether or not that
information is MATERIAL, except in accordance with the procedures set out
in this Policy.
7. Any files likely to contain NON-PUBLIC information must be kept locked and
access to computerized files must be restricted at all times, except when
required by authorized personnel for the performance of their duties at
Schroders.
8. NON-PUBLIC information which has not been deemed to be material under 2.
above may be communicated only to such personnel as require such
information for the performance of their duties at Schroders.
- 7 -
<PAGE>
PENALTIES
Penalties for trading on or communicating material, nonpublic information are
severe, both for the individuals involved in such unlawful conduct and their
employers. Under the law, a person can be subject to some or all of the
penalties below, even if s/he does not personally benefit from the violation.
Penalties include:
1) civil injunctions;
2) disgorgement of profits;
3) treble damages - fines for the access person who committed the
violation, of up to 3 times the profit gained or loss avoided,
whether or not the person actually benefited;
4) fines for the employer or other controlling person of up to the
greater of $1,000,000, or 3 times the profit gained or loss avoided;
and
5) jail sentences.
SPECIAL PROVISIONS FOR TRADING IN THE SECURITIES OF SCHRODERS PLC
Special restrictions apply to dealing in the securities of Schroders plc because
staff, by virtue of their employment, may be deemed to have Inside Information:
1. Securities of Schroders plc will not be purchased for any client account
without the permission of that client, and then only if permitted by
applicable law and with the prior approval of a member of the Ethics
Committee or Ethics Supervisor.
2. Personal securities transactions in the securities of Schroders plc are
subject to blackout periods and other restrictions which are outlined in
the Schroder London Group Staff Handbook. Copies of the restrictions are
available from the Ethics Supervisors. Staff wishing to deal in the
securities of Schroders plc must first contact the senior-ranking dealer in
Schroders' London equity dealing room who will explain the applicable
blackout periods, restrictions and authorizations required.
US SCHRODER GROUP RESTRICTED LIST
The US Schroder Group Restricted List is circulated only to those employees
responsible for placing securities trades, to members of the Ethics Committee
and to the Ethics Supervisors.
- 8 -
<PAGE>
SECTION ONE: No personnel may place trades in any securities, which term
includes options, warrants, debentures, futures, etc., on such securities
(hereinafter referred to as a related security or financial instruments, of any
company on Section One of the US Schroder Group Restricted List for any account
whatsoever, including client accounts, Schroder company accounts or Personal
Accounts at any time.
SECTION TWO: Trades in the securities or related securities or financial
instruments of any company on Section Two of the US Schroder Group Restricted
List (which contains those companies that have an officer of a US Schroder Group
Company on their board of directors, or where a US Schroder Group Company
manages a part of their balance sheet assets, I.E., corporate cash rather than
pension fund assets) may only be undertaken with the written permission of the
appropriate Ethics Supervisor.
No approval to trade will be given by the Ethics Supervisor:
(i) for any securities of a company currently on Section One of the US Schroder
Group Restricted List;
(ii) for any security of a company on Section Two of the US Schroder Group
Restricted List because an officer of a US Schroder Group Company serves as
a director of that company unless the Ethics Supervisor (or alternate) can
obtain confirmation from that company's Secretary or similar officer that
its directors are not in possession of material price sensitive information
with respect to its securities. Permission to trade in the securities of
any company on Section Two of the US Schroder Group Restricted List because
a US Schroder Group Company manages balance sheet assets for that company
(as opposed to pension fund assets) will only be given if the Ethics
Supervisor (or alternate) can obtain confirmation from the portfolio
manager responsible for that client that no US Schroder Group Company holds
any price sensitive information with respect to that company. Permission
will not, in any event, be given to any personnel personally involved in
the management of that client's account.
- 9 -
<PAGE>
PERSONAL SECURITIES TRANSACTIONS
POLICY
SCOPE AND PURPOSE OF THE POLICY
This Personal Securities Transactions Policy sets out the policies and
procedures required to be followed by all personnel in connection with trades
for Covered Accounts in Covered Securities (see Appendix A) in order to comply,
INTER ALIA, with the US Schroder Group's Code of Ethics. It sets out additional
restrictions and requirements for Level One Access Persons (as defined in
Appendix A). Further, it sets out the policies and procedures required to be
followed by outside directors (as defined in Appendix A) of Schroder Capital
Funds, Schroder Capital Funds (Delaware) and Schroder Series Trust
(collectively, the "Schroder Funds").
SIM NA LONDON, NEW YORK, SIMIL, AND SI-NEW YORK PERSONNEL
The procedures applicable to personnel employed by SIM NA in London and the US,
SIMIL, and to SI - New York personnel vary in detail but not in principle.
ESTABLISHING AN ACCOUNT
Before undertaking any transactions in Covered Securities, employees must
establish an account in accordance with the requirements of their employer
company.
New York
All US-based personnel of SIM NA and SI, unless exempted in writing by the
Ethics Committee, are required to maintain their Covered Accounts at Salomon
Smith Barney ("SSB") or Charles Schwab & Co. ("Schwab"). SSB and Schwab provide
an electronic download of employees' trades on T+1 which are accessed daily by
the Compliance Department. Additionally, both firms provide contemporaneous
copies of monthly account statements and trade confirmations to the Compliance
Department.
Personnel on secondment from London to New York may apply for a waiver of the
requirement to maintain brokerage accounts at SSB or Schwab for NON-US
securities. At a minimum, such personnel must follow the procedures set forth in
the "Schroder Investment Management London Group Personal Investment Dealing
Rules" as described below and report their transactions in Covered Securities
quarterly to the New York Ethics Supervisor.
LONDON
All London-based personnel are required to comply with the requirements of the
"Schroder Investment Management London Group Personal Investment Dealing Rules,"
which are incorporated herein by reference, including placing all transactions
in Covered Securities
- 10 -
<PAGE>
through the Schroder London dealing room. London-based personnel must establish
an account to deal through Schroders' London dealing room according to the
procedures set out in the London Staff Handbook. Such procedures are
incorporated herein by reference within this Personal Securities Transactions
Policy. Upon establishing an account, London-based personnel covered by this
Policy are required to make arrangements for copies of all contracts and
confirmations to be sent to their Ethics Supervisor.
TORONTO AND MEXICO CITY
All Toronto and Mexico City based SIM NA personnel may maintain Covered
Accounts at the brokerage firm of their choosing, provided that Compliance (New
York) is notified. These employees are required to provide Compliance with
copies of monthly/periodic account statements and trade confirmations.
TRANSACTIONS
ALL TRANSACTIONS FALL INTO ONE OF FOUR CATEGORIES:
- - TRANSACTIONS PROHIBITED BY THE POLICY
- - TRANSACTIONS EXEMPT FROM ALL PROVISIONS OF THE POLICY
- - TRANSACTIONS EXEMPT FROM THE PRE-CLEARANCE REQUIREMENTS BUT SUBJECT TO THE
REPORTING PROVISIONS OF THE POLICY
- - TRANSACTIONS SUBJECT TO PRE-CLEARANCE AND THE REPORTING PROVISIONS
PROHIBITED TRANSACTIONS
All personnel are prohibited from trading for any Covered Account where the
execution of any such transaction would violate the principles and procedures of
the Code or Insider Trading Policy and no personnel shall request permission to
trade for any Covered Account if he or she knows that such trade:
(i) would result in the buying or selling of securities in competition with
buy or sell orders of, or on behalf of, clients, or operate to the
detriment of such clients including, without limitation, executing a
securities transaction on a day during which any client, including any
investment company for which a US Schroder Group company serves as
investment adviser, sub-adviser or manager (a "Schroder Managed Fund"),
has a pending "buy" or "sell" order in that same security until that order
is executed or withdrawn;
(ii) would be for the purpose of, or result in, the buying or selling of
securities to take advantage of recent or imminent trades of clients;
- 11 -
<PAGE>
(iii) would involve a security being considered for recommendation for purchase
or sale on behalf of a client;
(iv) would take place before a sufficient period of time has elapsed after an
open-market purchase or sale of any such security, by or on behalf of any
client, for the effects of such purchase or sale on the market price to
dissipate;
(v) would involve any security of any company currently on the US Schroder
Group Restricted List or any company with respect to which such person has
NON-PUBLIC information which has not been evaluated by a member of the
Ethics Committee in accordance with the provisions of the Insider Trading
Policy;
(vi) would involve trading in options on any of the stocks held by or
contemplated for client accounts;
(vii) would involve a "short sale" or otherwise would expose the employee to
unlimited risk of loss.
DE MINIMIS EXCEPTION: Transactions involving shares in certain companies traded
on US stock exchanges or the NASDAQ, will be approved regardless of whether
there are outstanding client orders unless there is a large outstanding order
for the purchase or sale of such securities by clients. A large order will
generally occur if the US equity large cap model has been revised. Other than
an adjustment in the model, outstanding orders for wrap fee or managed accounts
or to re-balance institutional or private accounts, will not preclude clearance
for a DE MINIMIS transaction.
The exception applies to transactions involving no more than 500 shares per
issuer per week in the aggregate for an employee's Covered Accounts, in
securities of companies with market capitalizations of $5 billion or more. In
the case of options, an employee may purchase or sell up to 5 option contracts
per week to control up to 500 shares in the underlying security of such large
cap company.
SHORT TERM TRADING
All personnel are strongly advised against short-term trading. All
personnel are bound by the Schroder Group policy that no one may purchase
and sell the same (or equivalent) security within seven calendar days.
(Please note that all London-based personnel are bound by the 60 day
holding period outlined below for Level One Access Persons.) Such personnel
are, in addition, subject to tighter restrictions outlined below. The
trading records of all personnel will be reviewed quarterly by their Ethics
Supervisor. Any personnel that appear to have established a pattern of
short term trading may be subject to additional restrictions or penalties
including, but not
- 12 -
<PAGE>
limited to, a limit or ban on future personal trading activity and a
requirement to disgorge profits on short-term trades.
THE SHORT TERM TRADING PROHIBITION SHALL NOT PERTAIN TO THE EXERCISE OF A
CALL SOLD BY AN EMPLOYEE TO COVER A LONG POSITION. HOWEVER, ALTHOUGH AN
EMPLOYEE MAY PURCHASE A PUT TO COVER A LONG POSITION, THE EXERCISE OF SUCH
PUT WILL ONLY BE APPROVED IF THE UNDERLYING SECURITY WAS HELD FOR THE
MINIMUM REQUIRED PERIOD (7 DAYS OR 60 DAYS, AS APPROPRIATE). THE EXERCISE
OF A COVERED PUT IS SUBJECT TO THE SAME PRECLEARANCE AND REPORTING
REQUIREMENTS AS THE UNDERLYING SECURITY.
COVERED SECURITIES
Securities, such as stocks, bonds and options, are covered by this Policy. The
same limitations pertain to transactions in a security related to a Covered
Security, such as an option to purchase or sell a Covered Security and any
security convertible into or exchangeable for a Covered Security.
NOT COVERED BY THIS POLICY ARE:
- - securities which are direct obligations of the U.S. Government (I.E.,
Treasuries)
- - any debt security directly guaranteed by any OECD member Government
- - bankers' acceptances, bank certificates of deposit, commercial paper,
repurchase agreements and other high quality short-term debt instruments(1)
- - shares or units in any open-end US registered investment company (mutual
fund)
- - shares of any UK authorized unit trust(2)
If a security is not covered by this Policy, you may purchase or sell it without
obtaining pre-clearance and you do not have to report the transaction.
EXEMPT FROM PRECLEARANCE
The preclearance requirements do not apply to the following transactions.
However, such transactions MUST BE REPORTED as set forth in the section on
Reporting Requirements.
1) NON-DISCRETIONARY ACCOUNTS
- ---------------------------
(1) High quality short-term debt instruments means any instrument having a
maturity at issuance of less than 366 days and which is rated in one of the
highest two rating categories by a Nationally Recognized Statistical Rating
Organization, or which is unrated but is of comparable quality.
(2) Please note that Schroder Unit Trusts Limited does not currently accept
investments by US Persons into Schroders UK authorized unit trusts.
- 13 -
<PAGE>
Transactions effected in any Covered Account over which the employee has
no direct or indirect influence or control is deemed a non-discretionary
account. An employee shall be deemed to have no direct or indirect
influence or control over an account only if the following conditions are
met:
a) Investment discretion for such account has been delegated in writing
to an independent fiduciary and such investment discretion is not
shared with the employee or decisions for the account are made by a
family member and not by the employee;
b) The employee (and where applicable, the family member) certifies in
writing that he/she has not and will not discuss any potential
investment decisions with such independent fiduciary or family
member; and
c) The Ethics Committee approves such arrangements.
2) NON-VOLITIONAL TRADES
Transactions which are non-volitional on the part of the employee (I.E.,
the receipt of securities pursuant to a stock dividend or merger). However
the volitional sale of securities acquired in a non-volitional manner is
treated as any other securities trade and subject to the preclearance
requirements.
3) AUTOMATIC TRANSACTIONS AND DIVIDEND REINVESTMENT PLANS
Purchases of the stock of a company pursuant to an automatic dividend
reinvestment plan, AUTOMATIC direct stock purchase plan, dividend
reinvestment plan or an employee stock purchase plan sponsored by such
company. Such deductions that take place on an automatic, regular (I.E.,
weekly, monthly, quarterly) basis from either a paycheck or account (I.E.,
bank account, money market account) need not be pre-cleared.
However the volitional sale of such securities is treated as any other
securities trade and subject to the preclearance requirements. In
addition, if an employee mails in a payment to purchase securities
directly from the issuer, that purchase must be pre-cleared on the day the
payment is mailed in to the issuer (see the following section).
4) RIGHTS OFFERINGS
Receipt or exercise of rights issued by a company on a PRO RATA basis to
all holders of a class of security and the sale of such rights. Employees
must, however, pre-clear transactions for the acquisition of such rights
from a third-party or the disposition of such rights.
- 14 -
<PAGE>
TRADING PRECLEARANCE
Before each transaction in a Covered Secuirty, all personnel must complete a
"Personal Securities Transaction - Request to Trade" form (see Appendix C).
U.S. Securities
Personnel wishing to trade in US securities must have the form signed by the
senior fund manager present (in New York or London and corresponding to the
director's, officer's or employee's location) responsible for supervising client
investments in large capitalization US equities, small capitalization US
equities, investment grade fixed income securities or high yield securities, as
appropriate, to the effect that no client trades are presently contemplated in
that security. Boston-based personnel wishing to trade in small capitalization
US equities should obtain certification from the senior fund manager in Boston;
all other personnel wishing to trade in small capitalization US equities should
obtain certification from the senior New York or London-based (as applicable)
small company fund manager.
IF YOU WISH TO PURCHASE AN INITIAL PUBLIC OFFERING(3) OR SECURITIES IN A PRIVATE
PLACEMENT(4) YOU MUST OBTAIN PERMISSION FROM THE CHIEF COMPLIANCE OFFICER.
Any employee who has been authorized to acquire securities in a Private
Place is required to disclose that investment in any subsequent
consideration of a client's investment in securities of the issuer. In
such circumstances, the decision to purchase securities of the issuer
for a client shall be subject to an independent review by personnel
with no personal interest in the matter.
Non U.S. Securities
Personnel wishing to trade in non-US equity securities must obtain
certification, by fax if necessary, from the senior London-based SIM NA or SIMIL
fund manager responsible for supervising client investments in the country where
such securities are primarily traded. Country funds and ADRs are treated as
non-US securities and certification must therefore be obtained from the senior
London based SIM NA or SIMIL fund manager responsible for the relevant country.
- ----------------------
(3) An IPO is an offering of securities registered under the Securities Act,
the issuer of which, immediately before the registration, was not subject to
reporting requirements under the federal securities laws.
(4) A private placement is an offering of securities that are not registered
under the Securities Act because the offering qualified for an exemption
from the registration provisions.
- 15 -
<PAGE>
APPROVAL OF TRADING
Final responsibility for approving all trades, other than those placed through
Schroders' London dealing room, rests with the Ethics Supervisor, or in his/her
absence with any member of the Ethics Committee. London-based personnel must
send the signed Request to Trade form to their Ethics Supervisor at the same
time that the required dealing ticket is submitted to the senior-ranking dealer
in Schroders' London dealing room. Members of the Ethics Committee, including
the Ethics Supervisor, shall have their own personal trades, other than those
placed through Schroders' London dealing room, approved by another member of the
Ethics Committee.
If an employee receives permission to trade a security or instrument, the trade
must be executed AFTER such permission is granted and, for US-based personnel
BEFORE the end of the next business day after permission has been received.
Trades for London-based personnel must be executed within 24 hours after
permission is granted. If the trade is not executed within the appropriate time
frame and the person still wishes to effect the transaction, pre-clearance must
again be obtained - this would be the case for limit orders and orders such as
good-till-canceled as well.
(For Personal Equity Plans and similar vehicles which are subject to a mandatory
cooling-off period, trade date shall be deemed to be the date on which the
application is submitted rather than the date on which the cooling-off period
expires and not the date the trade is executed.)
If an employee fails to preclear a transaction in a Covered Security, he/she may
be monetarily penalized, by a fine and/or disgorgement of profits or avoidance
of loss. These types of violations will result in reprimands and could also
negatively affect the person's employment at Schroders. All preclearance
violations will be forwarded to the Ethics Committee to determine sanctions.
In cases where approval is not granted for any Covered Account transactions in a
security, Schroders will provide no compensation for any consequential losses in
a Covered Account.
ADDITIONAL RESTRICTIONS AND REQUIREMENTS FOR LEVEL ONE ACCESS PERSONS
The following additional restrictions and requirements apply to LEVEL ONE ACCESS
PERSONS, namely all US Schroder Group fund managers, investment analysts,
traders and those persons who, in connection with their regular functions or
duties, obtain: (i) information regarding the purchase or sale of a security on
behalf of a client or (ii) information as to specific securities under
consideration for purchase or sale on behalf of clients. These additional
restrictions are designed to prevent any conflict or the appearance of any
conflict
- 16 -
<PAGE>
of interest between trading for their Covered Accounts and securities
transactions initiated or recommended by them for clients:
i) Level One Access Persons are prohibited from buying or selling a security
within seven calendar days before and after any client trades in that
security. Any profits realized on transactions within the proscribed
periods (based on the difference in the price per share between that paid
or received, as appropriate, by the client and that paid or received by
such Access Person) will be required to be disgorged to the appropriate
client or, if that is not possible, to a charitable organization
designated by the Ethics Committee.
ii) Level One Access Persons are prohibited from profiting in the purchase and
sale of the same (or equivalent) securities within 60 calendar days. This
60 day restriction is in lieu of the general seven day restriction on
short-term trading described above. Any profits realized on any such
short-term trades will be required to be disgorged to a charitable
organization designated by the Ethics Committee.
iii) Level One Access Persons are required to disclose, on commencement of
employment and subsequently in an annual filing to their Ethics
Supervisor, all their personal securities holdings.
REPORTING REQUIREMENTS
All personnel are required to report his/her transactions in Covered Securities
holdings in Covered Accounts, as follows.
REPORTS OF EACH TRANSACTION IN A COVERED SECURITY
- - Personnel are required to report to Compliance, no later than at the
opening of business on the business day following the day of execution of
a trade for a Personal Account, including:
name of security
nature of transaction (purchase, sale, etc.)
number of shares/units or principal amount
price of transaction
date of trade
name of broker
SSB and Schwab provide the New York Compliance Department with a daily report of
the above information with respect to any personal securities transactions
executed by New York-based personnel.
Any personnel seconded from London to New York who are granted a waiver from the
requirement to maintain personal accounts at SSB or Schwab shall, within ten
days after the
- 17 -
<PAGE>
end of each calendar quarter, provide the New York Ethics Supervisor with copies
of all pre-clearance forms and contract notes for transactions executed through
the London dealing desk.
The reporting obligation of London-based personnel shall be discharged by
arranging in advance for copies of contract notes/confirmations for all their
transactions to be sent automatically to Compliance upon completion of a trade.
INITIAL EMPLOYMENT
- - No later than 10 days after initial employment with a US Schroder Group
Company, each employee must provide Compliance (New York or London, as
appropriate) with a list of each Covered Security s/he owns (as defined
above). The information provided must include the title of the security,
number of shares owned, and principal amount, as well as a of list of all
Covered Accounts where Covered Securities are held. The employee will sign
and date the report.
QUARTERLY REPORTS
- - No later than 10 days after the end of each calendar quarter, each employee
will provide Compliance (New York or London, as appropriate) with a report
of all transactions in Covered Securities in the quarter, including the
name of the Covered Security, the number of shares and principal amount,
whether it was a buy or sell, the price and the name of the broker through
whom effected. The employee will also report any new Covered Accounts
established during the quarter, including the name of the broker/dealer and
the date the Covered Account was established. The report will be signed and
dated by the employee.
ANNUAL REPORTS
- - Within 30 days after the end of the calendar, each employee must report all
his/her holdings in Covered Securities as at December 31, including the
title, number of shares and principal amount of each Covered Security the
employee owns (as defined above) and the names of all Covered Accounts. The
employee will sign and date the report.
EXCEPTIONS:
- - AN EMPLOYEE NEED NOT REPORT ANY TRANSACTIONS IN COVERED SECURITIES OR ANY
COVERED ACCOUNTS IN WHICH S/HE HAS NO DIRECT OR INDIRECT INFLUENCE OR
CONTROL.
- - A DIRECTOR OF A SCHRODER FUND WHO IS NOT AN "INTERESTED PERSON"(5) IS NOT
REQUIRED TO MAKE INITIAL, QUARTERLY OR ANNUAL REPORTS PROVIDED THAT S/HE
DID NOT KNOW, NOR IN THE ORDINARY COURSE OF FULFILLING HIS/HER DUTIES AS A
DIRECTOR, S/HE SHOULD NOT HAVE KNOWN, THAT DURING
- -------------------------
(5) As defined in Section 2(a)(19) of the Investment Company Act.
- 18 -
<PAGE>
THE 15 DAY PERIOD IMMEDIATELY BEFORE OR AFTER HIS/HER TRANSACTION IN A
COVERED SECURITY, THE FUND PURCHASED OR SOLD THE COVERED SECURITY OR THAT
THE COVERED SECURITY WAS CONSIDERED FOR PURCHASE OR SALE BY THE FUND.
THE INFORMATION ON PERSONAL SECURITIES TRANSACTIONS RECEIVED AND RECORDED BY SIM
NA AND SIMIL (ON BEHALF OF THEIR EMPLOYEES) WILL BE DEEMED TO SATISFY THE
REPORTING OBLIGATIONS CONTAINED IN RULE 204-2(a)(12) UNDER THE ADVISERS ACT AND
RULE 17j-1 UNDER THE INVESTMENT COMPANY ACT. SUCH REPORTS MAY, WHERE
APPROPRIATE, CONTAIN A STATEMENT TO THE EFFECT THAT THE REPORTING OF THE
TRANSACTION IS NOT TO BE CONSTRUED AS AN ADMISSION THAT THE PERSON HAS ANY
DIRECT OR INDIRECT BENEFICIAL INTEREST OR OWNERSHIP IN THE SECURITY.
Reports by the Ethics Supervisors
On a quarterly basis, the appropriate Ethics Supervisors, in order to assist
them in fulfilling their regulatory obligations, will report to the Boards of
Trustees of the Schroder Funds or the Schroder-managed Funds, as appropriate,
and the Supervisory Principal of SFA, any violations of this Code and the
actions, if any, taken by the Ethics Committee.
Adopted: October 1, 1995
Amended: May 15, 1996
May 1, 1997
June 12, 1998
June 2, 1999
March 14, 2000
- 19 -
<PAGE>
APPENDIX A
DEFINITIONS
"ETHICS SUPERVISOR" means the persons designated from time to time by the Ethics
Committee to administer the Code, who currently are:
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------------------------------
Barbara Brooke Manning for: Schroders U.S. Holdings Inc.
(alts: ) Evett Lawrence Schroder Investment Management North America Inc. (New York and Mexico City)
Brian Murphy Schroder Investment Management North America Ltd. (Toronto only)
- ---------------------------------------------------------------------------------------------------------------------
Barbara Brooke Manning for: Schroder Fund Advisors Inc.
(alt: Sandra Poe) Schroder Capital Funds
Schroder. Investment Management North America Inc. (New York)
Schroder Capital Funds (Delaware)
Schroder Series Trust
- ---------------------------------------------------------------------------------------------------------------------
Paul Martin for: Schroder Investment Management North America Inc. (London)
Schroder Investment Management North America Limited (London)
Schroder Investment Management International Limited
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
"ETHICS COMMITTEE" means the committee designated by the US Schroder Group
Companies from time to time, which currently comprises:
Jeremy Willoughby(Chairman)
Richard Foulkes
Barbara Brooke Manning
Richard Mountford
Andrew Smethurst
Mark Smith
"ACCESS PERSON" will be divided into two categories: Level One Access Person
means any director, officer or employee who is an Advisory Person (as defined
herein) of SIM NA, SFA, SI and the Schroder Funds. All other directors and
officers are Level Two Access Persons.
"ADVISORY PERSON" is any employee who, in connection with his/her regular
functions or duties, makes, participates in, or obtains information regarding
the purchase or sale of a security on behalf of any advisory client or
information regarding securities under consideration for purchase or sale on
behalf of clients or whose functions relate to the making of any recommendations
with respect to such purchases or sales.
- 20 -
<PAGE>
A SECURITY IS "BEING CONSIDERED FOR PURCHASE OR SALE" when a recommendation to
purchase or sell a security has been made or communicated and, with respect to
the person making the recommendation, when such person seriously considers
making such a recommendation.
"COVERED ACCOUNT" is an account in which securities are owned by you. This
includes IRA accounts. Under the Policy, accounts held by your spouse (including
his/her IRA accounts), minor children and other members of your immediate family
(children, stepchildren, grandchildren, parents, step parents, grandparents,
siblings, in-laws and adoptive relationships) who share your household are also
considered your accounts. In addition, accounts maintained by your domestic
partner (an unrelated adult with whom you share your home and contribute to each
other's support) are considered your accounts under this Policy.
If you are in any doubt as to whether an account falls within this definition of
Covered Account, please see Compliance. Further, if you believe that there is a
reason that you are unable to comply with the Policy, for example, your spouse
works for another regulated firm, you make seek a waiver from Compliance.
"COVERED SECURITIES" generally means stocks, bonds and options. The same
limitations pertain to transactions in a security related to a Covered Security,
such as an option to purchase or sell a Covered Security and any security
convertible into or exchangeable for a Covered Security.
NOT COVERED BY THIS POLICY ARE:
- - securities which are direct obligations of the U.S. Government (I.E.,
Treasuries)
- - any debt security directly guaranteed by any OECD member Government
- - bankers' acceptances, bank certificates of deposit, commercial paper,
repurchase agreements and other high quality short-term debt instruments(6)
- - shares or units in any open-end US registered investment company (mutual
fund)
- - shares of any UK authorized unit trust(7)
"DISINTERESTED DIRECTOR/TRUSTEE" means a Director or Trustee of the any of the
Schroder Funds who is not an "interested person" of the Funds within the meaning
of Section 2(a)(19) of the Investment Company Act or the rules thereunder.
- ------------------------
(6) High quality short-term debt instruments means any instrument having a
maturity at issuance of less than 366 days and which is rated in one of the
highest two rating categories by a Nationally Recognized Statistical Rating
Organization, or which is unrated but is of comparable quality.
(7) Please note that Schroder Unit Trusts Limited does not currently accept
investments by US Persons into Schroders UK authorized unit trusts.
- 21 -
<PAGE>
"US SCHRODER GROUP RESTRICTED LIST" means a list of securities determined from
time to time by the Ethics Committee, in accordance with provisions of the
Insider Trading Policy, to be inappropriate for trading by personnel covered by
this Code and, in certain circumstances, by any client portfolio of any US
Schroder Group Company.
- 22 -
<PAGE>
STRATEGIC FIXED INCOME, L.L.C.
1001 19TH STREET NORTH, SUITE 1720
ARLINGTON, VA 22209
703-812-8300
This Code of Ethics ("Code") has been adopted by Strategic Fixed Income,
L.L.C. ("Strategic") to comply with the requirements of Rule 17j-1 under the
Investment Company Act of 1940 ("Act"). In some respects, this Code imposes
obligations that go beyond those imposed by the Act, where Strategic believes it
appropriate to do so. The provisions of this Code apply to all employees of
Strategic.
Employees of Strategic must read and understand this Code and should
present any questions concerning the Code to Patricia Arcoleo, who is the Vice
President in charge of compliance matters ("Compliance Director"). Each employee
must sign and return the attached acknowledgement with respect to the Code to
the Compliance Director.
I. GENERAL STATEMENTS OF POLICY
A. The interests of Strategic's advisory clients, including any
registered investment company client (collectively "clients"),
supersede the interests of Strategic employees.
B. Personal investing of Strategic employees shall be conducted in a
manner to avoid actual or potential conflicts of interest with
Strategic's clients.
C. Strategic employees shall not use their position to the detriment of
Strategic's clients.
II. DEFINITIONS
A. For purposes of this Code:
1. An "IPO" means an offering of securities registered under the
Securities Act of 1933, the issuer of which, immediately before
the registration, was not subject to the reporting requirements
of Sections 13 or 15(d) of the Securities Exchange Act of 1934.
2. A "limited offering" means an offering that is exempt from
registration under the Securities Act of 1933 pursuant to Section
4(2) or Section 4(6), or pursuant to Rule 504, 505 or 506
thereunder.
<PAGE>
3. "Beneficial Ownership" has the meaning set forth in Attachment A
hereto.
4. A "security held or to be held" by any client means:
(i) any security which, within the most recent fifteen (15)
days, is or has been held by any client or is being or has
been considered by any client or by Strategic for purchase
by the client; and
(ii) any derivative of a security described in subparagraph
2(i), above, including any option, right, warrant, or
futures contract or any similar right having an exercise
or conversion privilege whose price or value is derived
from or based upon, in whole or in part, the price of such
security.
5. The term "security" does not include direct obligations of the
Government of the United States, bankers' acceptances, bank
certificates of deposit, commercial paper, high quality
short-term debt instruments (including repurchase agreements), or
shares issued by registered open-end investment companies.
6. The term "Access Person" means
(i) The Manager of Strategic;
(ii) any director or officer of Strategic;
(iii) each Strategic employee, or employee of a company in a
control relationship to Strategic, who, in connection with
his or her regular functions or duties, makes,
participates in, or obtains information regarding the
purchase or sale of securities by any registered
investment company client of Strategic, or whose functions
relate to the making of any recommendations with respect
to such purchases or sales; and
(iv) each natural person in a control relationship with
Strategic who obtains information concerning
recommendations made to any registered investment company
client of Strategic regarding the purchase or sale of
securities by such client.
7. The term "Investment Employee" means
(i) any Strategic employee, or employee of a company in a
control relationship to Strategic, who, in connection with
his or her regular functions or duties, makes or
participates in making recommendations regarding the
purchase or sale of securities by any registered
investment company client of Strategic; and
2
<PAGE>
(ii) any natural person who controls Strategic and who obtains
information concerning recommendations made to any
registered investment company client of Strategic
regarding purchases or sales of securities by such client.
III. PROHIBITIONS
A. GENERAL PROHIBITION
1. No affiliated person of Strategic ("Affiliated Person"),
including any Strategic employee, in connection with the purchase or sale,
directly or indirectly, by such person of a security held or to be held by any
client of Strategic, shall:
(i) employ any device, scheme or artifice to defraud any
client;
(ii) make to any client any untrue statement of a material fact
or omit to state to such client a material fact necessary
in order to make the statements made, in light of the
circumstances under which they are made, not misleading;
(iii) engage in any act, practice or course of business which
operates or would operate as a fraud or deceit upon a
client; or
(iv) engage in any manipulative practice with respect to a
client.
B. AFFILIATED PERSON TRANSACTIONS
1. Except as set forth below, no Affiliated Person of Strategic shall
purchase or sell any security or derivative thereof (including any option,
right, warrant, or futures contract or any similar right having an exercise or
conversion privilege whose price or value is derived from or based upon, in
whole or in part, the price of any security) in which the Affiliated Person has,
or by reason of such transaction acquires, any direct or indirect beneficial
ownership, and that, to the Affiliated Person's actual knowledge at the time of
such purchase or sale, is a security held or to be held by any client of
Strategic. If the security is a corporate fixed-income security (which shall
include mortgage- and asset-backed securities of any kind issued by any issuer,
regardless of whether such issuer is a corporation), in certain cases the more
restrictive provisions set forth in Section IV.C, below, shall apply instead of
the provisions set forth in this Section III.B.
2. The restrictions described in this Subsection B shall not apply
to:
(i) purchases or sales effected in any account over which the
Affiliated Person has no direct or indirect influence or
control;
3
<PAGE>
(ii) purchases or sales that are non-volitional on the part of
the Affiliated Person;
(iii) purchases that are part of an automatic dividend
reinvestment plan;
(iv) purchases effected upon the exercise of rights issued by
an issuer PRO RATA to all holders of a class of its
securities, to the extent that such rights were acquired
from the issuer, and sales of such rights so acquired; or
(v) any purchase or sale (or series of related purchases or
sales) of a security involving 500 shares or fewer in the
aggregate, if the issuer of the security has a market
capitalization (I.E., outstanding shares multiplied by the
current price per share) greater than $1 billion.
C. CERTAIN INVESTMENT EMPLOYEE TRANSACTIONS--CORPORATE FIXED-INCOME
SECURITIES
The following restrictions relate to the purchase and sale by certain
Investment Employees of corporate fixed-income securities. In the event the
following restrictions do not apply to a particular employee or a particular
transaction, the restrictions set forth above in Section III.B shall apply
instead.
1. No Investment Employee who is a portfolio manager, analyst, or a
trader who provides information and advice to a portfolio manager
or helps execute a portfolio manager's decisions ("Qualified
Investment Employee") shall acquire any corporate fixed-income
security in an IPO.
2. No Qualified Investment Employee shall acquire any corporate
fixed-income security, whether in the open market or in a limited
offering, or dispose of any such security without express prior
approval of the Compliance Director. In determining whether to
approve such an acquisition or disposition, the Compliance
Director will take into account, among other factors, whether the
investment opportunity, or the opportunity to dispose of the
security, should be reserved for one or more of Strategic's
clients, and whether the opportunity is being offered to the
Qualified Investment Employee by virtue of his or her position
with respect to any client.
3. No Qualified Investment Employee shall purchase or sell any
corporate fixed-income security in which such employee has, or by
reason of such transaction acquires, any direct or indirect
beneficial ownership (i) on a day during which, to the actual
knowledge of such employee, any advisory client has a pending
"buy" or "sell" order in that same security until that order is
executed or withdrawn, or (ii) if the employee has actual
knowledge of plans to effect a trade in that security on behalf
of any client, within fifteen (15) days of the proposed date of
such trade, or, if the employee has actual knowledge that such a
trade has been effected, within fifteen (15) days after any such
trade. Any profits realized
4
<PAGE>
by a Qualified Investment Employee on a trade proscribed by the
foregoing will be required to be disgorged.
4. No Qualified Investment Employee shall personally profit from the
purchase and sale, or sale and purchase, of the same (or
equivalent) corporate fixed-income securities within sixty (60)
calendar days. Any profits realized by the employee in violation
of the foregoing will be required to be disgorged.
5. The restrictions described in paragraphs of this III.C shall not
apply to:
(A) purchases or sale effected in any account over which the
employee has no direct or indirect influence or control;
or
(B) purchases or sales that are non-volitional on the part of the
employee.
6. Each Qualified Investment Employee shall direct his or her broker
in writing to supply to the Compliance Director, on a timely
basis, duplicate copies of all personal securities transactions
involving corporate fixed-income securities and copies of
periodic statements for all personal securities accounts, to the
extent such statements relate to corporate fixed-income
securities, and shall supply a copy of that directive to the
Compliance Director. No such employee shall revoke or alter such
directive without notifying the Compliance Director of that fact.
D. GIFTS
No Investment Employee of Strategic shall receive any gift or other thing
of value of more than DE MINIMIS VALUE ($100.00) from any person or entity that
does business with or on behalf of any client of Strategic.
E. SERVICE AS DIRECTOR
No Investment Employee of Strategic shall serve on the board of directors
of any publicly traded company absent prior authorization of the Compliance
Director, which authorization shall not be given unless the Compliance Director
first determines that board service would be consistent with the interests of
Strategic's clients, including particularly registered investment company
clients and their shareholders. Where board service is authorized, Strategic
will formulate and implement appropriate "Chinese Wall" or other procedures to
isolate the Investment Employee serving on the board from Strategic employees
engaged in making decisions for Strategic's registered investment company
clients.
5
<PAGE>
F. PRE-APPROVAL REQUIREMENT CONCERNING INVESTMENTS
IN IPOS AND LIMITED OFFERINGS BY INVESTMENT EMPLOYEES
1. No Investment Employee shall directly or indirectly acquire
beneficial ownership in any securities in an IPO or in a limited offering
without first obtaining prior written approval from the Compliance Director.
2. The Compliance Director, in most circumstances, will make a
decision concerning any request submitted in accordance with paragraph F.1
above, within two (2) business days after the request is made. The Compliance
Director will retain a record of the approval of, and rationale supporting, any
acquisition of securities in an IPO or a limited offering.
G. DISCLOSURE OF CONFLICTS OF INTEREST
Each Investment Employee should consider whether he or she has a conflict
of interest, including a material ownership interest in any issuer, whose
securities are held or to be held or to be sold by a client, that might require
disclosure to such client, and should discuss such conflict with the Compliance
Director. The Compliance Director will keep a record of such discussion
concerning the employee's conflict. The Compliance Director may provide for
review, in appropriate circumstances, of any investment decisions being made
such employee by other Strategic Investment Employees who are not subject to any
conflict with respect to such client's investment decision. The Compliance
Director may, in her own discretion, elect to prohibit the employee with such
conflict from participating in the investment recommendation.
IV. REPORTING
A. TRANSACTIONS IN GENERAL
1. Each Access Person of Strategic is required to report to the
Compliance Director certain information about such Access Persons's securities
holdings and about each transaction in which such Access Person acquires any
direct or indirect beneficial ownership of a security, except with respect to a
transaction effected for, and securities held in, any account over which the
Access Person does not have any direct or indirect influence or control. The
reports that are required to be submitted are as follows:
(a) INITIAL HOLDINGS REPORTS. Every Access Person must file an
Initial Holdings Report no later than ten (10) days after
the person becomes an Access Person. The Initial Holdings
Report must contain the following information:
6
<PAGE>
(i) The title, number of shares and principal amount of
each security in which the Access Person had any
direct or indirect beneficial ownership when the
person became an Access Person;
(ii) The name of any broker, dealer or bank with whom the
Access Person maintained an account in which any
securities were held for the direct or indirect
benefit of the Access Person as of the date the
person became an Access Person; and
(iii) The date that the report is submitted by the Access
Person.
(b) QUARTERLY TRANSACTION REPORTS. Every Access Person must
file a Quarterly Transaction Report no later than ten (10)
days after the end of a calendar quarter. The Quarterly
Transaction Report must contain the following information:
(i) With respect to any transaction during the quarter
in a security in which the Access Person had any
direct or indirect beneficial ownership:
(1) The date of the transaction, the title, the
interest rate and maturity date (if
applicable), the number of shares and the
principal amount of each security involved;
(2) The nature of the transaction (I.E., purchase,
sale or any other type of acquisition or
disposition);
(3) The price of the security at which the
transaction was effected;
(4) The name of the broker, dealer or bank with or
through which the transaction was effected; and
(5) The date that the report is submitted by the
Access Person.
(ii) With respect to any account established by the
Access Person in which any securities were held
during the quarter for the direct or indirect
benefit of the Access Person:
(1) The name of the broker, dealer or bank with whom
the Access Person established the account;
(2) The date the account was established; and
(3) The date that the report is submitted by the
Access Person.
7
<PAGE>
(c) ANNUAL HOLDINGS REPORTS. Every Access Person must file an
Annual Holdings Report, which must include the following
information (which information must be current as of a
date no more than thirty (30) days before the report is
submitted):
(i) The title, number of shares and principal amount of
each security in which the Access Person had any
direct or indirect beneficial ownership;
(ii) The name of any broker, dealer or bank with whom the
Access Person maintains an account in which any
securities are held for the direct or indirect
benefit of the Access Person; and
(iii) The date that the report is submitted by the Access
Person.
2. To the extent necessary, Compliance Director will designate
certain employees of any company in a control relationship with Strategic and
natural persons in a control relationship with Strategic as Access Persons for
purposes of this Section IV and will notify them of their obligations hereunder.
3. Each Strategic employee who is not an Access Person, and thus not
subject to the reporting obligations of paragraph A.1 above, is nevertheless
required to report to the Compliance Director certain information about each
transaction in which such employee acquires any direct or indirect beneficial
ownership of a security, except with respect to a transaction effected for an
account over which the employee does not have any direct or indirect influence
or control. The reports required to be submitted are those described in the
Memorandum to New Staff/Temporary Employees from the Compliance Director dated
August 23, 1993, concerning Quarterly Reports of Personal Securities
Transactions (a copy of which is attached as Attachment B hereto).
4. Access Persons and all Strategic employees should note that the
reports described above must be provided with respect to transactions in any
security which the Access Person or the employee has, or by reason of such
transaction acquires, any direct or indirect beneficial ownership in the
security. These reports will be reviewed by the Compliance Director to determine
whether there is any reason to believe that any provision of this Code has been
violated by the Access Person or the employee, in which case further inquiry may
be made with respect to one or more particular transaction. Additional
requirements apply with respect to corporate fixed-income securities. SEE
Section III.C above.
V. SANCTIONS
8
<PAGE>
Upon discovering that an employee has not complied with the requirements
of this Code, Strategic may impose upon that person whatever sanctions Strategic
deems appropriate, including, among other things, censure, suspension, or
termination of employment.
VI. OTHER LAWS, RULES AND STATEMENTS OF POLICY
Nothing contained in this Code shall be interpreted as relieving any
employee of Strategic from acting in accordance with the requirements of any
law, rule, regulation or other statement of policy or procedure governing the
conduct of such employee adopted by Strategic, including the Insider Trading
Policy.
VII. ANNUAL APPROVAL REQUIREMENT
The Code must be approved by the board of directors of each registered
investment company client of Strategic. Any material change to the Code must be
approved by the board of each registered investment company client of Strategic
no later than six (6) months after adoption of the material change. Strategic is
required to furnish to any such board of directors an annual written report that
contains the following information:
(A) description of any issues arising under the Code since the last
report to the board of directors, including, but not limited to,
information about material violations of the Code and sanctions
imposed in response to the material violations; and
(B) certification that Strategic has adopted procedures reasonably
necessary to prevent its employees from violating the Code.
The Compliance Director will be responsible for furnishing such written reports.
9
<PAGE>
ATTACHMENT A
BENEFICIAL OWNERSHIP
The term "beneficial ownership" as used in Strategic's Code is to be
interpreted by reference to Rule 16a-1 under the Securities Exchange Act of 1934
("Rule"), except that the determination of direct or indirect beneficial
ownership for purposes of the Code must be made with respect to all securities
that an employee has or acquires. Under the Rule, a person is generally deemed
to have beneficial ownership of securities if: (i) the person, directly or
indirectly, through any contract, arrangement, understanding, relationship or
otherwise, has or shares (a) voting power, which includes the power to vote, or
to direct the voting of, the securities and/or (b) investment power, which
includes the power to dispose of, or to direct the disposition of, the
securities; and (ii) the person, directly or indirectly, through any contract,
arrangement, understanding, relationship or otherwise, has or shares a direct or
indirect pecuniary interest in the securities. A person is deemed to have voting
and/or investment power with respect to securities within the meaning of the
Rule if the person has the right to acquire beneficial ownership of the security
within sixty (60) days, including any right to acquire the security through the
exercise of any option, warrant or right; through the conversion of a security,
pursuant to the power to revoke a trust, discretionary account or similar
arrangement -- or pursuant to the automatic termination of a trust,
discretionary account or similar arrangement.
The term "pecuniary interest" in particular securities is generally
defined in the Rule to mean the opportunity, directly or indirectly, to profit
or share in any profit derived from a transaction in the securities. A person is
deemed to have an "indirect pecuniary interest" within the meaning of the Rule
in any securities held by members of the person's immediate family sharing the
same household, the term "immediate family" including any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, as
well as adoptive relationships. Under the Rule, an indirect pecuniary interest
also includes, among other things, a general partner's proportionate interest in
the portfolio securities held by a general or limited partnership; a person's
right to dividends that is separated or separable from the underlying
securities; a person's interest in certain trusts; and a person's right to
acquire equity securities through the exercise or conversion of any derivative
security, whether or not presently exercisable, the term "derivative security"
being generally defined as any option, warrant, convertible security, stock
appreciation right, or similar right with an exercise or conversion privilege at
a price related to an equity security, or similar securities with, or value
derived from, the value of an equity security. For purposes of the Rule, a
person who is a shareholder of a corporation or similar entity is not deemed to
have a pecuniary interest in portfolio securities held by the corporation or
entity, so long as the shareholder is not a controlling shareholder of the
corporation or the entity and does not have or share investment control over the
corporation's or the entity's portfolio.
<PAGE>
ACKNOWLEDGEMENT
The undersigned,___ , an employee of Strategic Fixed Income, L.L.C. (or a
non-employee who has been notified that he or she is regarded as an "Access
Person" of Strategic), certifies that he or she (1) has read and understands the
Code of Ethics ("Code") of Strategic Fixed Income, L.L.C.; (2) recognizes that
he or she is subject to the Code; (3) has complied with all the requirements of
the Code applicable to him or her; and (4) has disclosed or reported all
personal security transactions and security holdings required to be disclosed or
reported by him or her pursuant to the Code. The undersigned further recognizes
that he or she will be required to make the foregoing certification on an annual
basis.
------------------------------
Dated:
---------------------------
<PAGE>
WALL STREET ASSOCIATES
CODE OF ETHICS AND STATEMENT OF
POLICY AND PROCEDURES REGARDING PERSONAL
SECURITIES TRANSACTIONS
October 1, 1999
1. DEFINITIONS
The following definitions apply for purposes of the Code and Statement in
addition to the definitions contained elsewhere herein.
(1) "Access Person" means any director, officer or employee of Wall Street
Associates ("WSA") and any Advisory Person.
(2) (b) "Advisory Person" means any Employee, who, in connection with
his or her regular functions or duties, makes, participates in, or
obtains information regarding the purchase or sale of a security by a
Client, or whose functions relate to the making of any recommendations
with respect to such purchases or sales.
(3) "Client" means any person or entity, including an investment company,
for which WSA serves as investment manager, adviser or sub-adviser.
(4) "Compliance Officer" refers to Jeff Jeffery, or the current appointed
Officer or his successor Compliance Officer.
(5) "Employee" refers to a person who is an employee of WSA.
(6) "Investment Personnel" refers to any Employee who is a Portfolio
Manager, or Access Persons, such as Securities Analysts and order
placement personnel, or those who assist in executing the Portfolio
Manager's decisions.
(7) "Personal Account" refers to a brokerage account in which an individual
subject to this Code and Statement has any beneficial ownership and a
brokerage account maintained by or for:
(1) such an individual's spouse (other than a legally separated or
divorced spouse),
(2) any person who resides with an Employee, or
<PAGE>
(3) any other account (except a Client Account) with respect to
which the individual has investment discretion.
(8) "Security" has the meaning as set forth in Section 2 (a) (36) of the
Company Act and any derivative thereof, commodities, options or forward
contracts, except that it shall not include shares of open-end and
closed-end investment companies registered under the Company Act,
securities issued by the Government of the United States, short-term
debt securities that are government Securities within the meaning of
Section 2(a)16 of the Company Act, bankers' acceptances, bank
certificates of deposit, commercial paper, and such other money market
instruments as are designated by the Compliance Officer.
(i) "Insider Trading" refers to a person's reliance upon material
information regarding a publicly traded company in making the
determination to purchase or sell shares in that company that is not
otherwise made known to the investing public and which is received from
an officer, director or employee for the company or individual who owns
a controlling interest in the company.
2. PURPOSE
(a) As a registered investment adviser and a fiduciary, WSA,
hereinafter sometimes "WSA", owes an undivided duty of loyalty
to its clients for which it serves as investment manager,
adviser or sub-adviser. WSA must avoid even the appearance of
a conflict that may compromise the trust clients have placed
in WSA and must insist on strict adherence to fiduciary
standards and compliance with all applicable federal and state
Securities laws. Adherence to this Code of Ethics and
Statement of Policy and Procedures Regarding Personal
Securities Transactions (the "Code and Statement") is a
fundamental condition of service with WSA.
(b) The Code and Statement is intended to comply with Rule 17j-1
under the Investment Company Act of 1940, as amended, which
requires WSA to adopt a code of ethics containing provisions
reasonably necessary to prevent specified individuals from
engaging in certain conduct. Under Rule 17j-1(a), certain
conduct by "access persons" (as defined in the Rule) of WSA,
itself as adviser or sub-adviser of these companies with
respect to purchases or sales of securities held or to be
acquired by the client(s), is prohibited. As set forth in
Section 3 below, this Code
<PAGE>
and Statement applies to all Employees and all other
individuals who are Access Persons. The Code and Statement is
also intended to comply with the provisions of Rule 204-2
under the Investment Advisers Act of 1940, as amended (the
"Advisers Act"), which requires WSA to maintain records of
securities transactions in which its personnel have any
beneficial ownership.
(c) This Code and Statement is intended to ensure that Personal
Account transactions are conducted in accordance with the
following principles:
(i) a duty at all times to place first the interests of
Clients;
(ii) the requirement that all Personal Account
transactions be conducted consistent with this Code
and Statement and in a manner that avoids any actual
or potential conflict of interest or any abuse of an
individual's responsibility and position of trust;
and
(iii) the fundamental standard that WSA personnel not take
inappropriate advantage of their positions.
(d) In addition to the specific prohibitions on certain Personal
Account transactions as set forth below, all Access Persons
are prohibited, in connection with the purchase or sale,
directly or indirectly, by such persons of a security held or
to be acquired by a Client, from:
(i) employing any device, scheme or artifice to defraud
any Client; making to a Client any untrue statement
of a material fact or omitting to state to such
Client a material fact necessary in order to make the
statements made, in light of the circumstances under
which they are made, not misleading;
(ii) engaging in any act, practice or course of business
which operates or would operate as a fraud or deceit
upon any Client;
(iii) engaging in any manipulative practice with respect to
any Client; or
3
<PAGE>
(iv) revealing to any other person (except in the normal
course of his or her duties on behalf of a Client)
any information regarding securities transactions by
any Client or the consideration by any Client or of
WSA of any such securities transactions; or
(v) serving on any board of directors, as trustees, or in
any other management capacity of any private or
public company without prior written authorization
from the Compliance Officer based upon a
determination that such service would not be
inconsistent with the interests of any Client; or
(vi) receiving any gift or other thing of more than de
minimis value from any person or entity that does
business with WSA on behalf of a Client, provided,
however, that receipt of the following shall not be
prohibited:
(1) an occasional meal, reception, event or
entertainment that is not so frequent, so
costly, or so extensive as to raise any
question of impropriety;
(2) a meal, reception or event in conjunction
with a bona fide business meeting;
3. PROHIBITED PURCHASES AND SALES
(a) ALL ACCESS PERSONS. It is the responsibility of each Access
Person to ensure that a particular securities transaction
being considered for his or her Personal Account is not
subject to a restriction contained in this Code and Statement
or otherwise prohibited by any applicable laws. Personal
Account transactions for Access Persons may be effected only
in a Personal Account and in accordance with the following
provisions:
(i) No Access Person may purchase or sell a security in a
Personal Account if, at the time of the transaction,
the Access Person has actual knowledge that the
security is being considered for purchase or sale for
a Client, is being purchased or sold for a Client.
This restriction is applicable to all Personal
Accounts, including one for which the Access Person
has investment discretion, but no beneficial
ownership.
4
<PAGE>
(ii) No Access Person may purchase or sell, directly or
indirectly, any security in which the Access Person
has (or after such transaction would have) any direct
or indirect beneficial ownership unless such Access
Person obtains the prior written approval of the
transaction by both a Senior Member of the Portfolio
Management Staff and the Senior Trader on the Trading
Desk. The Senior Member of the Portfolio Management
Staff and the Senior Trader (having no personal
interest in the subject transaction) may approve the
transaction if they conclude that the transaction is
not likely to have any adverse economic impact on a
Client, or on the ability to purchase or sell
securities of the same or similar class of Securities
of the issuer involved. A request for pre-clearance
must be made in writing in advance of the
contemplated transaction and must state:
(3) the name of the security involved,
(4) the date or dates on which such securities
are to be acquired or sold, and
(5) an explanation of the reason(s) the Employee
or Access Person is not proposing to
purchase or sell the security or securities
on behalf of the Clients, as well.
(iii) No Access Person shall profit from the purchase and
sale, or sale and purchase, of the same (or an equivalent) Security in a
Personal Securities Transaction within sixty calendar days.
(iii) No Access Person may execute or cause the execution
of a transaction in a security in which the Access
Person has (or by reason of such transaction would
have) any direct or indirect beneficial ownership,
for at least seven (7) days prior to, and seven (7)
days following the day on which any Client has a
pending "buy" or "sell" order in that same or related
security until that order is executed or withdrawn.
However, if the Client's pending "sell" order in the
same or related securities disposes of all of the
Client's interest in that security, an Access Person
is allowed to sell his or her direct or beneficial
interest in that security twenty-four (24) hours
5
<PAGE>
after the sale of Client's entire interest in that
security has been finalized
(b) INVESTMENT PERSONNEL. In addition to the prohibitions set
forth in paragraph (a) of this Section, Investment Personnel
shall not:
(i) acquire any direct or indirect Beneficial Ownership
in any securities in any initial public offering.
(ii) acquire any Beneficial Ownership in any securities in
any private placement of securities unless the
Compliance Officer and Senior Portfolio Management
Team have given express prior written approval.
Investment Personnel so authorized to acquire
securities in a private placement must disclose that
investment when they play a part in any Client's
subsequent consideration for an investment in the
issuer, and in such a case, the decision to purchase
securities of that issuer for a Client will be
subject to an independent review by Investment
Personnel with no personal interest in such issuer;
The Compliance Officer, in determining whether
approval should be given, will take into account,
among other factors, whether the investment
opportunity should be reserved for a Client and
whether the opportunity is being offered to the
individual by virtue of his or her position with WSA.
(c) PORTFOLIO MANAGERS. In addition to the requirements set forth
in paragraphs (a) and (b) of this Section, a Portfolio Manager
of a Client account shall not buy or sell a security for his
Personal Account within seven (7) days before and after that
Client's account trades in that security unless the Client's
trade in the security disposes of all of the Clients' interest
in that security, in which event the Portfolio Manager may
sell the security twenty-four (24) hours after the sale of
Clients' entire interest in that security.
4. REPORTING
6
<PAGE>
(a) ALL EMPLOYEES All Employees must file with the Compliance
Officer a listing of all securities in which they have
Beneficial Ownership, and upon commencement of employment with
WSA and while so employed maintain on a current basis, a list
of all of their Personal Accounts. They also must direct their
brokers to submit to the Compliance Officer a duplicate copy
of the confirmation of each securities transaction in a
Personal Account and a copy of the monthly statements for each
Personal Account. Any employee who has not engaged in any
reportable transaction during a quarter shall, within ten (10)
days of the end of the quarter, so certify to the Compliance
Officer in writing.
(9) The Compliance Officer shall maintain the confirmations, trade
authorization sheets and periodic statements required by
paragraph (a) above and such other records, if any, as are
required by Rule 17j-1 under the Company Act and Rule 204-2
under the Advisers Act.
All reports furnished pursuant to this Section will be kept
confidential, subject to the rights of inspection by the
Compliance Officer, the Securities and Exchange Commission and
by other third parties pursuant to applicable law.
(10) Each person subject to this Code and Statement must certify
upon commencement of employment that he or she has read and
understands this Code and Statement as amended, recognizes
that he or she is subject thereto and has complied with its
provisions and disclosed or reported all Personal Account
transactions required to be disclosed or reported by this Code
and Statement.
2. SANCTIONS
Upon discovery of a violation of this Code and Statement, WSA, with the
advice of the Compliance Officer and the Company's expert counsel, may
impose such sanctions as it deems appropriate, including, but not
limited to, censure, suspension or termination of service. Individuals
subject to this Code and Statement who fail to comply with this Code
and Statement may also be violating the federal Securities laws and
other federal and state laws. Any such person who is suspected of
violating this Code and Statement should be reported immediately the
Compliance Officer.
7
<PAGE>
INSIDER TRADING
SUPPLEMENT
TO THE
CODE OF ETHICS
The purpose of this Supplement to the Code of Ethics is to expand upon
the provisions of the Code of Ethics regarding the topic of insider trading.
The term "insider trading" refers to the use of material non-public
information to trade securities. Insider trading is illegal as is the
communication of material non-public information to others.
No employee may use any special knowledge, personal contacts or access
to property or equipment obtained in connection with employment at Wall Street
Associates, Inc. for personal gain. The use o inside information for personal
securities transactions is clearly included in the prohibition. In addition to
personal transactions, insider trading prohibitions apply to securities
transactions made on behalf of Wall Street Associates, Inc. and any of its
clients.
We at Wall Street Associates must be vigilant against even inadvertent
violations of the insider trading laws. We seldom come across inside information
in the regular course of our business. Nonetheless, any information obtained
from an insider, or which is not from a public source presents the possibility
that it is inside information, and a trade could be made which is inadvertently
based in part upon items of tainted information.
WHO IS AN INSIDER? The concept of insider includes the officers,
directors and employees of the company whose securities are in question. It also
includes people who enter into a special confidential relationship with the
company and as a result are given access to confidential information about the
company. These can include attorneys, accountants, consultants, lenders and the
employees of such organizations.
WHAT IS MATERIAL INFORMATION? Information for which there is a
substantial likelihood that reasonable investors would consider it important to
making a decision to buy or sell the securities of a company, or information
that is likely to have an effect on the price of a company's securities is
material information.
WHAT IS NON-PUBLIC INFORMATION? Information that has not yet been
communicated to the public through, for example, SEC filings, newspaper reports
or wire service reports, is non-public information.
8
<PAGE>
PREVENTION OF INSIDER TRADING. Wall Street Associates has a continuing
obligation to detect and prevent insider trading. An employee who obtains
information about a company which could be material non-public information
should disclose that information to his superior and the Compliance Officer. If
it appears that the information is material non-public information, the
Compliance Officer must inform the appropriate Portfolio Managers that the
securities of the Company in question cannot be traded because Wall Street
Associates possesses inside information concerning the stock. This restriction
may be removed when it is determined that the information is no longer material
non-public information.
When deemed appropriate, Wall Street Associates' management may also
review trades made in personal accounts and on behalf of Wall Street Associates
or any of its clients for evidence of trading in violation of these rules.
As with all matters concerning ethical conduce, Wall Street Associates'
rules and procedures for insider trading are intended to promote the highest
ethical standards. It is not sufficient by itself that a course of action is
legal. It also must be the right thing to do. There are no transactions
important enough to risk the reputation of Wall Street Associates. All business
should be conducted with this in mind.
9
<PAGE>
Wellington Management Company, llp
Wellington Trust Company, na
Wellington Management International
Wellington International Management Company Pte Ltd.
Code of Ethics
- ------------------------ ----------------------------------------------------
Summary Wellington Management Company, llp and its
affiliates have a fiduciary duty to investment
company and investment counseling clients which
requires each employee to act solely for the benefit
of clients. Also, each employee has a duty to act in
the best interest of the firm. In addition to the
various laws and regulations covering the firm's
activities, it is clearly in the firm's best
interest as a professional investment advisory
organization to avoid potential conflicts of
interest or even the appearance of such conflicts
with respect to the conduct of the firm's employees.
Wellington Management's personal trading and conduct
must recognize that the firm's clients always come
first, that the firm must avoid any actual or
potential abuse of our positions of trust and
responsibility, and that the firm must never take
inappropriate advantage of its positions. While it
is not possible to anticipate all instances of
potential conflict, the standard is clear.
In light of the firm's professional and legal
responsibilities, we believe it is appropriate to
restate and periodically distribute the firm's Code
of Ethics to all employees. It is Wellington
Management's aim to be as flexible as possible in
its internal procedures, while simultaneously
protecting the organization and its clients from the
damage that could arise from a situation involving a
real or apparent conflict of interest. While it is
not possible to specifically define and prescribe
rules regarding all possible cases in which
conflicts might arise, this Code of Ethics is
designed to set forth the policy regarding employee
conduct in those situations in which conflicts are
most likely to develop. If an employee has any doubt
as to the propriety of any activity, he or she
should consult the President or Regulatory Affairs
Department.
The Code reflects the requirements of United States
law, Rule 17j-1 of the Investment Company Act of
1940, as amended on October 29, 1999, as well as the
recommendations issued by an industry study group in
1994, which were strongly supported by the SEC. The
term "Employee" includes all employees and Partners.
- ------------------------ ----------------------------------------------------
Policy on Personal Essentially, this policy requires that all personal
Securities securities transactions (including acquisitions or
Transactions dispositions other than through a purchase or sale)
by all Employees must be cleared prior to execution.
The only exceptions to this policy of prior
clearance are noted below.
- ------------------------ ----------------------------------------------------
Definition of The following transactions by Employees are
"Personal Securities considered "personal" under applicable SEC rules and
Transactions" therefore subject to this statement of policy:
1
Transactions for an Employee's own account,
including IRA's.
<PAGE>
Code of Ethics
Page 2
- ------------------------ ----------------------------------------------------
2
Transactions for an account in which an Employee has
indirect beneficial ownership, unless the Employee
has no direct or indirect influence or control over
the account. Accounts involving family (including
husband, wife, minor children or other dependent
relatives), or accounts in which an Employee has a
beneficial interest (such as a trust of which the
Employee is an income or principal beneficiary) are
included within the meaning of "indirect beneficial
interest".
If an Employee has a substantial measure of
influence or control over an account, but neither
the Employee nor the Employee's family has any
direct or indirect beneficial interest (e.g., a
trust for which the Employee is a trustee but not a
direct or indirect beneficiary), the rules relating
to personal securities transactions are not
considered to be directly applicable. Therefore,
prior clearance and subsequent reporting of such
transactions are not required. In all transactions
involving such an account an Employee should,
however, conform to the spirit of these rules and
avoid any activity which might appear to conflict
with the investment company or counseling clients or
with respect to the Employee's position within
Wellington Management. In this regard, please note
"Other Conflicts of Interest", found later in this
Code of Ethics, which does apply to such situations.
- ------------------------ ----------------------------------------------------
Preclearance EXCEPT AS SPECIFICALLY EXEMPTED IN THIS SECTION, ALL
Required EMPLOYEES MUST CLEAR PERSONAL SECURITIES
TRANSACTIONS PRIOR TO EXECUTION. This includes
bonds, stocks (including closed end funds),
convertibles, preferreds, options on securities,
warrants, rights, etc. for domestic and foreign
securities, whether publicly traded or privately
placed. The only exceptions to this requirement are
automatic dividend reinvestment and stock purchase
plan acquisitions, broad-based stock index and U.S.
government securities futures and options on such
futures, transactions in open-end mutual funds, U.S.
Government securities, commercial paper, or
non-volitional transactions. Non-volitional
transactions include gifts to an Employee over which
the Employee has no control of the timing or
transactions which result from corporate action
applicable to all similar security holders (such as
splits, tender offers, mergers, stock dividends,
etc.). Please note, however, that most of these
transactions must be reported even though they do
not have to be precleared. See the following section
on reporting obligations.
Clearance for transactions must be obtained by
contacting the Director of Global Equity Trading or
those personnel designated by him for this purpose.
Requests for clearance and approval for transactions
may be communicated orally or via email. The Trading
Department will maintain a log of all requests for
approval as coded confidential records of the firm.
Private placements (including both securities and
partnership interests) are subject to special
clearance by the Director of Regulatory Affairs,
Director of Enterprise
<PAGE>
Code of Ethics
Page 3
- ------------------------ ----------------------------------------------------
Risk Management or the General Counsel, and the
clearance will remain in effect for a reasonable
period thereafter, not to exceed 90 days.
CLEARANCE FOR PERSONAL SECURITIES TRANSACTIONS FOR
PUBLICLY TRADED SECURITIES WILL BE IN EFFECT FOR ONE
TRADING DAY ONLY. THIS "ONE TRADING DAY" POLICY IS
INTERPRETED AS FOLLOWS:
- IF CLEARANCE IS GRANTED AT A TIME WHEN THE
PRINCIPAL MARKET IN WHICH THE SECURITY TRADES IS
OPEN, CLEARANCE IS EFFECTIVE FOR THE REMAINDER
OF THAT TRADING DAY UNTIL THE OPENING OF THAT
MARKET ON THE FOLLOWING DAY.
- IF CLEARANCE IS GRANTED AT A TIME WHEN THE
PRINCIPAL MARKET IN WHICH THE SECURITY TRADES IS
CLOSED, CLEARANCE IS EFFECTIVE FOR THE NEXT
TRADING DAY UNTIL THE OPENING OF THAT MARKET ON
THE FOLLOWING DAY.
- ------------------------ ----------------------------------------------------
Filing of Reports Records of personal securities transactions by
Employees will be maintained. All Employees are
subject to the following reporting requirements:
1
Duplicate Brokerage All Employees must require their securities brokers
Confirmations to send duplicate confirmations of their securities
transactions to the Regulatory Affairs Department.
Brokerage firms are accustomed to providing this
service. Please contact Regulatory Affairs to obtain
a form letter to request this service. Each employee
must return to the Regulatory Affairs Department a
completed form for each brokerage account that is
used for personal securities transactions of the
Employee. Employees should NOT send the completed
forms to their brokers directly. The form must be
completed and returned to the Regulatory Affairs
Department prior to any transactions being placed
with the broker. The Regulatory Affairs Department
will process the request in order to assure delivery
of the confirms directly to the Department and to
preserve the confidentiality of this information.
When possible, the transaction confirmation filing
requirement will be satisfied by electronic filings
from securities depositories.
2
Filing of Quarterly SEC rules require that a quarterly record of all
Report of all personal securities transactions submitted by each
"Personal Securities person subject to the Code's requirements and that
Transactions" this record be available for inspection. To comply
with these rules, every Employee must file a
quarterly personal securities transaction report
within 10 calendar days after the end of each
calendar quarter. Reports are filed electronically
utilizing the firm's proprietary Personal Securities
Transaction Reporting System (PSTRS) accessible to
all Employees via the Wellington Management
Intranet.
At the end of each calendar quarter, Employees will
be notified of the filing requirement. Employees are
responsible for submitting the quarterly report
within the deadline established in the notice.
<PAGE>
Code of Ethics
Page 4
- ------------------------ ----------------------------------------------------
Transactions during the quarter indicated on
brokerage confirmations or electronic filings are
displayed on the Employee's reporting screen and
must be affirmed if they are accurate. Holdings not
acquired through a broker submitting confirmations
must be entered manually. All Employees are required
to submit a quarterly report, even if there were no
reportable transactions during the quarter.
Employees must also provide information on any new
brokerage account established during the quarter
including the name of the broker, dealer or bank and
the date the account was established.
IMPORTANT NOTE: The quarterly report must include
the required information for all "personal
securities transactions" as defined above, except
transactions in open-end mutual funds, money market
securities, U.S. Government securities, and futures
and options on futures on U.S. government
securities. Non-volitional transactions and those
resulting from corporate actions must also be
reported even though preclearance is not required
and the nature of the transaction must be clearly
specified in the report.
3
Certification of As part of the quarterly reporting process on PSTRS,
Compliance Employees are required to confirm their compliance
with the provisions of this Code of Ethics.
4
Filing of Personal Annually, all Employees must file a schedule
Holding Report indicating their personal securities holdings as of
December 31 of each year by the following January
30. SEC Rules require that this report include the
title, number of shares and principal amount of each
security held in an Employee's personal account, and
the name of any broker, dealer or bank with whom the
Employee maintains an account. "Securities" for
purposes of this report are those which must be
reported as indicated in the prior paragraph. Newly
hired Employees are required to file a holding
report within ten (10) days of joining the firm.
Employees may indicate securities held in a
brokerage account by attaching an account statement,
but are not required to do so, since these
statements contain additional information not
required by the holding report.
5
Review of Reports All reports filed in accordance with this section
will be maintained and kept confidential by the
Regulatory Affairs Department. Reports will be
reviewed by the Director of Regulatory Affairs or
personnel designated by her for this purpose.
- ------------------------ ----------------------------------------------------
Restrictions on While all personal securities transactions must be
"Personal Securities cleared prior to execution, the following guidelines
indicate which transactions will be prohibited,
discouraged,
<PAGE>
Code of Ethics
Page 5
- ------------------------ ----------------------------------------------------
Transactions" or subject to nearly automatic clearance. The
clearance of personal securities transactions may
also depend upon other circumstances, including the
timing of the proposed transaction relative to
transactions by our investment counseling or
investment company clients; the nature of the
securities and the parties involved in the
transaction; and the percentage of securities
involved in the transaction relative to ownership by
clients. The word "clients" refers collectively to
investment company clients and counseling clients.
Employees are expected to be particularly sensitive
to meeting the spirit as well as the letter of these
restrictions.
Please note that these restrictions apply in the
case of debt securities to the specific issue and in
the case of common stock, not only to the common
stock, but to any equity-related security of the
same issuer including preferred stock, options,
warrants, and convertible bonds. Also, a gift or
transfer from you (an Employee) to a third party
shall be subject to these restrictions, unless the
donee or transferee represents that he or she has no
present intention of selling the donated security.
1
No Employee may engage in personal transactions
involving any securities which are:
- being bought or sold on behalf of clients until
one trading day after such buying or selling is
completed or canceled. In addition, no Portfolio
Manager may engage in a personal transaction
involving any security for 7 days prior to, and
7 days following, a transaction in the same
security for a client account managed by that
Portfolio Manager without a special exemption.
See "Exemptive Procedures" below. Portfolio
Managers include all designated portfolio
managers and others who have direct authority to
make investment decisions to buy or sell
securities, such as investment team members and
analysts involved in Research Equity portfolios.
All Employees who are considered Portfolio
Managers will be so notified by the Regulatory
Affairs Department.
- the subject of a new or changed action
recommendation from a research analyst until 10
business days following the issuance of such
recommendation;
- the subject of a reiterated but unchanged
recommendation from a research analyst until 2
business days following reissuance of the
recommendation
- actively contemplated for transactions on behalf
of clients, even though no buy or sell orders
have been placed. This restriction applies from
the moment that an Employee has been informed in
any fashion that any Portfolio Manager intends
to purchase or sell a specific security. This is
a particularly sensitive area and one in which
each Employee must exercise caution to avoid
actions which, to his or her knowledge, are in
conflict or in competition with the interests of
clients.
<PAGE>
Code of Ethics
Page 6
- ------------------------ ----------------------------------------------------
2
The Code of Ethics strongly discourages short term
trading by Employees. In addition, no Employee may
take a "short term trading" profit in a security,
which means the sale of a security at a gain (or
closing of a short position at a gain) within 60
days of its purchase, without a special exemption.
See "Exemptive Procedures". The 60 day prohibition
does not apply to transactions resulting in a loss,
nor to futures or options on futures on broad-based
securities indexes or U.S. government securities.
3
No Employee engaged in equity or bond trading may
engage in personal transactions involving any equity
securities of any company whose primary business is
that of a broker/dealer.
4
Subject to preclearance, Employees may engage in
short sales, options, and margin transactions, but
such transactions are strongly discouraged,
particularly due to the 60 day short term
profit-taking prohibition. Any Employee engaging in
such transactions should also recognize the danger
of being "frozen" or subject to a forced close out
because of the general restrictions which apply to
personal transactions as noted above. In specific
case of hardship an exception may be granted by the
Director of Regulatory Affairs or her designee upon
approval of the Ethics Committee with respect to an
otherwise "frozen" transaction.
5
No Employee may engage in personal transactions
involving the purchase of any security on an initial
public offering. This restriction also includes new
issues resulting from spin-offs, municipal
securities and thrift conversions, although in
limited cases the purchase of such securities in an
offering may be approved by the Director of
Regulatory Affairs or her designee upon determining
that approval would not violate any policy reflected
in this Code. This restriction does not apply to
open-end mutual funds, U. S. government issues or
money market investments.
6
EMPLOYEES MAY NOT PURCHASE SECURITIES IN PRIVATE
PLACEMENTS UNLESS APPROVAL OF THE DIRECTOR OF
REGULATORY AFFAIRS, DIRECTOR OF ENTERPRISE RISK
MANAGEMENT OR THE GENERAL COUNSEL HAS BEEN OBTAINED.
This approval will be based upon a determination
that the investment opportunity need not be reserved
for clients, that the Employee is not being offered
the investment opportunity due to his or her
employment with Wellington Management and other
relevant factors on a case-by-case basis. If the
Employee has portfolio management or securities
analysis responsibilities and is granted approval to
purchase a private placement, he or she must
disclose the privately placed holding later if
<PAGE>
Code of Ethics
Page 7
- ------------------------ ----------------------------------------------------
asked to evaluate the issuer of the security. An
independent review of the Employee's analytical work
or decision to purchase the security for a client
account will then be performed by another investment
professional with no personal interest in the
transaction.
Gifts and Other Employees should not seek, accept or offer any gifts
Sensitive Payments or favors of more than minimal value or any
preferential treatment in dealings with any client,
broker/dealer, portfolio company, financial
institution or any other organization with whom the
firm transacts business. Occasional participation in
lunches, dinners, cocktail parties, sporting
activities or similar gatherings conducted for
business purposes are not prohibited. However, for
both the Employee's protection and that of the firm
it is extremely important that even the appearance
of a possible conflict of interest be avoided.
Extreme caution is to be exercised in any instance
in which business related travel and lodgings are
paid for other than by Wellington Management, and
prior approval must be obtained from the Regulatory
Affairs Department.
Any question as to the propriety of such situations
should be discussed with the Regulatory Affairs
Department and any incident in which an Employee is
encouraged to violate these provisions should be
reported immediately. An explanation of all
extraordinary travel, lodging and related meals and
entertainment is to be reported in a brief
memorandum to the Director of Regulatory Affairs.
Employees must not participate individually or on
behalf of the firm, a subsidiary, or any client,
directly or indirectly, in any of the following
transactions:
1
Use of the firm's funds for political purposes.
2
Payment or receipt of bribes, kickbacks, or payment
or receipt of any other amount with an understanding
that part or all of such amount will be refunded or
delivered to a third party in violation of any law
applicable to the transaction.
3
Payments to government officials or employees (other
than disbursements in the ordinary course of
business for such legal purposes as payment of
taxes).
4
<PAGE>
Code of Ethics
Page 8
- ------------------------ ----------------------------------------------------
Payment of compensation or fees in a manner the
purpose of which is to assist the recipient to evade
taxes, federal or state law, or other valid charges
or restrictions applicable to such payment.
5
Use of the funds or assets of the firm or any
subsidiary for any other unlawful or improper
purpose.
- ------------------------ ----------------------------------------------------
Other Conflicts of Employees should also be aware that areas other than
Interest personal securities transactions or gifts and
sensitive payments may involve conflicts of
interest. The following should be regarded as
examples of situations involving real or potential
conflicts rather than a complete list of situations
to avoid.
"Inside Information" Specific reference is made to the firm's policy on
the use of "inside information" which applies to
personal securities transactions as well as to
client transactions.
Use of Information Information acquired in connection with employment
by the organization may not be used in any way which
might be contrary to or in competition with the
interests of clients. Employees are reminded that
certain clients have specifically required their
relationship with us to be treated confidentially.
Disclosure of Information regarding actual or contemplated
Information investment decisions, research priorities or client
interests should not be disclosed to persons outside
our organization and in no way can be used for
personal gain.
Outside All outside relationships such as directorships or
Activities trusteeships of any kind or membership in investment
organizations (e.g., an investment club) must be
cleared by the Director of Regulatory Affairs prior
to the acceptance of such a position. As a general
matter, directorships in unaffiliated public
companies or companies which may reasonably be
expected to become public companies will not be
authorized because of the potential for conflicts
which may impede our freedom to act in the best
interests of clients. Service with charitable
organizations generally will be authorized, subject
to considerations related to time required during
working hours and use of proprietary information.
Exemptive Procedure The Director of Regulatory Affairs, the Director of
Enterprise Risk Management, the General Counsel or
the Ethics Committee can grant exemptions from the
personal trading restrictions in this Code upon
determining that the transaction for which an
exemption is requested would not result in a
conflict of interest or violate any other policy
embodied in this Code. Factors to be considered may
include: the size and holding period of the
Employee's position in the security, the market
capitalization of the issuer, the liquidity of
<PAGE>
Code of Ethics
Page 9
- ------------------------ ----------------------------------------------------
the security, the reason for the Employee's
requested transaction, the amount and timing of
client trading in the same or a related security,
and other relevant factors.
Any Employee wishing an exemption should submit a
written request to the Director of Regulatory
Affairs setting forth the pertinent facts and
reasons why the employee believes that the exemption
should be granted. Employees are cautioned that
exemptions are intended to be exceptions, and
repetitive exemptive applications by an Employee
will not be well received.
Records of the approval of exemptions and the
reasons for granting exemptions will be maintained
by the Regulatory Affairs Department.
- ------------------------ ----------------------------------------------------
Compliance with Adherence to the Code of Ethics is considered a
The Code of Ethics basic condition of employment with our organization.
The Ethics Committee monitors compliance with the
Code and reviews violations of the Code to determine
what action or sanctions are appropriate.
Violations of the provisions regarding personal
trading will presumptively be subject to being
reversed in the case of a violative purchase, and to
disgorgement of any profit realized from the
position (net of transaction costs and capital gains
taxes payable with respect to the transaction) by
payment of the profit to any client disadvantaged by
the transaction, or to a charitable organization, as
determined by the Ethics Committee, unless the
Employee establishes to the satisfaction of the
Ethics Committee that under the particular
circumstances disgorgement would be an unreasonable
remedy for the violation.
Violations of the Code of Ethics may also adversely
affect an Employee's career with Wellington
Management with respect to such matters as
compensation and advancement.
Employees must recognize that a serious violation of
the Code of Ethics or related policies may result,
at a minimum, in immediate dismissal. Since many
provisions of the Code of Ethics also reflect
provisions of the U.S. securities laws, Employees
should be aware that violations could also lead to
regulatory enforcement action resulting in
suspension or expulsion from the securities
business, fines and penalties, and imprisonment.
Again, Wellington Management would like to emphasize
the importance of obtaining prior clearance of all
personal securities transactions, avoiding
prohibited transactions, filing all required reports
promptly and avoiding other situations which might
involve even an apparent conflict of interest.
Questions regarding interpretation of this policy or
questions related to specific situations should be
directed to the Regulatory Affairs Department or
Ethics Committee.
Revised: March 1, 2000
<PAGE>
CODE OF ETHICS
ARROYO SECO, INC.
PACIFIC AMERICAN INCOME SHARES
WESTERN ASSET MANAGEMENT COMPANY
LM INSTITUTIONAL FUND ADVISORS 1
A. STATEMENT OF GENERAL PRINCIPLES
1. All Access Persons are fiduciaries to the Accounts and Funds managed by
the Companies. All Access Persons are also fiduciaries to Fund
shareholders. Accordingly, Access Persons shall place the interests of
the Accounts and Funds first.
2. Each Access Person shall handle his or her personal securities
transactions in such a manner as to avoid any actual or potential
conflict of interest or any abuse of his or her position of trust and
responsibility. No Access Person shall take inappropriate advantage of
his or her position.
3. All Access Persons shall act in accordance with both the letter and the
spirit of this Code.
4. It will be considered a violation of this Code to do indirectly that
which is prohibited directly. For example, it will be considered a
violation of this Code to do indirectly through options, futures or other
derivatives that which is prohibited directly through transactions in
securities themselves.
5. This Code is to be interpreted consistent with the Securities and
Exchange Commission's rules governing codes of ethics.
B. PRE-CLEARANCE
1. Except for the transactions set forth in Section C.1 below, any
Securities Transaction which an Access Person or a member of his or her
Immediate Family has a Beneficial Interest must be pre-cleared with a
Pre-Clearance Officer.
2. PRE-CLEARANCE PROCEDURES: Prior to entering an order for a Securities
Transaction that requires pre-clearance, the Access Person must complete,
in writing, a Trade Authorization Request form and submit the completed
form to a Pre-Clearance Officer. Proposed Securities Transactions of a
Page 1
<PAGE>
Pre-Clearance Officer that require pre-clearance must be submitted to
another Pre-Clearance Officer. In the event an Access Person is unable to
complete a Trade Authorization Request form, the Access Person requesting
Pre-Clearance may designate someone else to complete the Form on his or
her behalf in order to obtain proper authorization.
3. LENGTH OF TRADE AUTHORIZATION APPROVAL: The authorization provided by the
Pre-Clearance Officer is effective until the earlier of (1) its
revocation, (2) the close of business on the trading day after the
authorization is granted, or (3) the Access Person learns that the
information in the Trade Authorization Request Form is not accurate. If
the order for the Securities Transaction is not placed within that
period, a new authorization must be obtained before the Securities
Transaction is placed. If a Securities Transaction is placed but has not
been executed before the authorization expires (e.g. a limit order), no
new authorization is necessary unless the person placing the order amends
it in any way.
C. EXEMPTIONS
1. The following Securities Transactions are exempt from the pre-clearance
requirements of this code as well as the prohibitions outlined in
sections E.3, E.4 and E.5:
a. MUTUAL FUNDS - Securities issued by any registered open-end
investment company;
b. NO KNOWLEDGE - Securities Transactions where neither the Access
Person nor an Immediate Family member knows of the transaction
before it is completed (for example a transaction effected by a
Trustee of a blind trust or discretionary trades involving an
investment partnership or investment club, in connection with
which the Access Person is neither consulted nor advised of the
trade before it is executed);
c. CERTAIN CORPORATE ACTIONS - Any acquisition of Securities, through
stock dividends, dividend reinvestments, stock splits, reverse
stock splits, mergers, consolidations, spin-offs, exercise of
rights or other similar corporate reorganizations or distributions
generally applicable to all holders of the same class of
Securities;
Page 2
<PAGE>
d. MISCELLANEOUS - Any transaction in the following:
1. Bankers Acceptances,
2. Bank Certificates of Deposit,
3. Commercial Paper,
4. Repurchase Agreements,
5. Securities that are direct obligations of the U.S.
Government,
6. Other securities as may from time to time be
designated in writing by the Code of Ethics Committee
on the grounds that the risk of abuse is minimal or
non-existent.
The Securities listed above are not exempt from the reporting
requirements set forth in Section D.
2. Commodities, Futures, Options on Futures and Options on Broad Based
Indices Commodities, Futures (including currency futures and futures on
securities comprising part of a broad-based, publicly traded market based
index of stocks) and options on futures are not subject to preclearance,
nor to the seven-day blackout, 60-day profit disgorgement, and prohibited
transaction provisions of Section E, but are subject to transaction
reporting. Options on broad-based indices are subject to the preclearance
and transaction reporting provisions of the Code, but are not subject to
the provisions regarding seven-day blackout and 60-day profit
disgorgement.
3. Sovereign debt of non-U.S. governments with an issue size greater than $1
billion and issued in either the home currency or U.S. dollars are exempt
from the blackout provisions of the Code as provided for in Section E.
These transactions are still subject to the pre-clearance and reporting
requirements of the Code.
D. REPORTING
1. CONFIRMATIONS AND STATEMENTS: All Access Persons and members of his or
her Immediate Family must arrange for the Compliance Department to
receive directly from any broker, dealer or bank duplicate copies of
confirmations for Personal Securities Transactions and periodic
statements for each brokerage account in which the Access Person has a
Beneficial Interest. The foregoing does not apply to transactions and
holdings in registered open-end investment companies.
Page 3
<PAGE>
2. INITIAL REPORTS: Within 10 days from the start of employment with the
Companies, all Access Persons must disclose all Covered Securities in
which they or members of their Immediate Family have a Beneficial
Interest. Such report must include the title, number of shares and
principal amount of each Covered Security. Access Persons must also
report all brokerage accounts in which they or members of their Immediate
Family have a Beneficial Interest. Initial reports must be signed and
dated by the Access Person.
3. MONTHLY REPORTS: All employees of the companies shall submit to the
Compliance Department, within 10 days after month end, a report of all
personal securities transactions during the previous month. The report
shall state the title and number of shares, the principal amount of the
security involved, the date and nature of the transaction, the price at
which the transaction was effected and the name of the broker, dealer or
bank with or through whom the transaction was effected. Access Persons
who have reported their Personal Securities Transactions through
duplicate copies of broker confirmations and statements are not required
to file a monthly report. In addition, all employees of the companies
shall submit a report of any securities account established during the
month for the direct or indirect benefit of the employee. The report
shall include the name of the broker, dealer or bank with whom the
employee established the account, the date the account was established
and the date the report was submitted to the Compliance Department.
4. ANNUAL REPORTS: All Access Person shall provide annually a list of all
Covered Securities in which they or members of their Immediate Family
have a Beneficial Interest. In addition, each Access Person must report
to the Compliance Department the account number, account name and
brokerage firm of each Securities account in which the Access Person, or
a member of his or her Immediate Family, has a Beneficial Interest. The
information in the annual report must be current as of a date no more
than 30 days before the report is submitted.
5. DIRECTORS REPORTS (for Directors of Pacific American Income Shares and
LM Institutional Fund Advisors 1):
a. A DISINTERESTED DIRECTOR is not required to make a report
regarding Personal Securities Transactions except where such
director knew or, in the ordinary course of fulfilling his or her
official duties as a director of Pacific American Income Shares
or LM Institutional Fund Advisors 1, should have known that
during the 15-day period immediately preceding or after the date
of the transaction in a
Page 4
<PAGE>
security by the director, such security is or was purchased or
sold by a Fund or such purchase or sale is or was considered by
a Fund or its Advisers.
b. AN INTERESTED DIRECTOR is required to make the following reports:
i. Initial Holdings Report (See Paragraph D.2.)
ii. Quarterly Transaction Report:: No later than 10 days after
the end of each calendar quarter the folllowing information
must be reported:
- TRANSACTION REPORT for Covered Securities including:
Date of each transaction, full security description,
number of shares and principal amount, nature of
transaction, price at which transaction effected,
broker, dealer or bank through which transaction
affected, date report is submitted.
- ACCOUNT REPORT including: Any new account established
by the Director in which any securities were held
during the quarter for the direct or indirect benefit
of the access Person. Such report to also include the
name of the broker, dealer or bank with whom the
Director established the account, the date the account
was established and the date the report is submitted.
iii. Annual Reports (See Paragraph D.4.)
E. PROHIBITED TRANSACTIONS - The following Securities Transactions are
prohibited and will not be authorized by the Pre-Clearance Officer absent
exceptional circumstances. The prohibitions apply only to the categories of
Access Persons specified.
1. INITIAL PUBLIC OFFERINGS (INVESTMENT PERSONNEL ONLY) Investment Persons
shall not acquire any securities in an initial public offering.
2. PRIVATE PLACEMENTS (INVESTMENT PERSONNEL ONLY) Investment Persons shall
not acquire any securities in a private placement without written prior
approval from the Code of Ethics Committee. This prior approval shall take
into account among other factors, whether the investment opportunity
should be reserved for the Funds or Accounts, and whether the opportunity
is being offered to the Investment Person by virtue of his or relationship
with the Companies. An Investment Person who has been authorized to
acquire securities in a private placement shall disclose that investment
when he or she plays a part in any subsequent consideration by the Fund,
Accounts or the Adviser of an
Page 5
<PAGE>
investment in the issuer. In such circumstances, the decision to purchase
securities of the issuer shall be subject to an independent review by
persons with no personal interest in the issuer.
3. ONE-DAY BLACKOUT PERIOD No Access Person shall execute a personal
securities transaction in a security on any day during which an Account or
Fund has placed or executed a purchase or sell order on the same security.
4. SEVEN-DAY BLACKOUT PERIOD (PORTFOLIO MANAGERS ONLY) Portfolio Managers may
not purchase or sell securities for their own account within seven
calendar days of a purchase or sale of the same Securities (or Equivalent
Securities) by an Account or Fund managed by that Portfolio Manager.
5. 60-DAY BLACKOUT PERIOD (INVESTMENT PERSONNEL ONLY) Investment Personnel
may not (for their own beneficial interest) purchase a Security within 60
days of the sale of the same Security; nor may an Investment Person sell a
Security within 60 days of a purchase of the same Security if at any time
during the 60 days the security was held by an Account or Fund managed by
the Companies.
F. MISCELLANEOUS
1. GIFTS: An Investment Person shall not receive any gift or other thing of
more than de minimis value from any person or entity that does business
with or on behalf of an Account or Fund advised by Western Asset
Management Company. Gifts of a nominal value (i.e. gifts whose reasonable
value is no more than $100 a year), and customary business meals,
entertainment (e.g. sporting events), and promotional items (e.g. pens,
mugs, T-shirts) may be accepted. An Investment Person may not personally
give any gift with a value in excess of $100 per year to persons
associated with securities or financial organizations, including clients
of the firm.
2. SERVICE AS A DIRECTOR: No Investment Person may serve on the board of
directors of any publicly traded company without prior written
authorization from the Code of Ethics Committee. If the Committee
authorizes board service, it shall do so subject to appropriate
safeguards, including in most cases "Chinese Walls" or other procedures to
isolate the Investment Person from the making of investment decisions
related to the company on whose board the Investment Person serves.
Page 6
<PAGE>
3. REMEDIES AND SANCTIONS: If the Code of Ethics Committee determines that an
employee of the Companies has committed a violation of the Code, the
Committee may impose sanctions and take other actions as it deems
appropriate.
4. CERTIFICATION OF COMPLIANCE: At least annually, all Access Persons shall
certify that they have complied with the requirements of this Code and
that they have disclosed or reported all personal securities transactions
required to be disclosed or reported pursuant to the requirements of this
Code.
G. DEFINITIONS
1. "ACCESS PERSONS" means (a) all interested directors and officers of Arroyo
Seco, Inc., Pacific American Income Shares, Western Asset Management
Company and LM Institutional Fund Advisors 1 (the Companies); (b) all
employees of the Companies who, in connection with their regular functions
or duties, make, participate in, or obtain information, regarding the
purchase or sale of a security by an Account or Fund; (c) any natural
person in a control relationship to the Companies who obtains information
concerning recommendations made to an Account or Fund with regard to the
purchase or sale of a security and such other persons as the Compliance
Department shall designate.
2. "ACCOUNT" means any portfolio managed by Western Asset Management Company.
3. "BENEFICIAL INTEREST" means the opportunity, directly or indirectly,
through any contract, arrangement, understanding, relationship or
otherwise, to profit, or share in any profit derived from, a transaction
in the subject Securities. An Access Person is deemed to have a
Beneficial Interest in the following:
a. any Security owned individually by the Access Person;
b. any Security owned jointly by the Access Person with others (for
example, joint accounts, spousal accounts, UTMA accounts,
partnerships, trusts and controlling interests in corporations); and
c. any Security in which a member of the Access Person's Immediate Family
has a Beneficial Interest if the Security is held in an account over
which the Access Person has decision making authority (for example,
the Access Person acts as trustee, executor, or guardian). In
addition, an Access Person is presumed to have a Beneficial Interest
in any Security in which a member of the Access Person's Immediate
Family has a Beneficial Interest if the Immediate Family member
resides in the
Page 7
<PAGE>
same household as the Access Person. This presumption may be rebutted
if the Access Person is able to provide the Compliance Department with
satisfactory assurances that the Access Person has no material
Beneficial Interest in the Security and exercises no control over
investment decisions made regarding the Security. Access Persons may
use the form attached (Certification of No Beneficial Interest) in
connection with such requests
4. "COMPANIES" means Arroyo Seco Inc., Pacific American Income Shares,
Western Asset Management Company and LM Institutional Fund Advisors 1.
5. "COVERED SECURITY" means any security defined below except covered
security does not include direct obligations of the U.S. Government,
bankers acceptances, bank certificates of deposit, commercial paper and
high quality short-term debt instruments including repurchase agreements
and shares issued by open-end Funds.
6. "FUND" means any investment company registered under the Investment
Company Act of 1940 managed by Western Asset Management Company.
7. "IMMEDIATE FAMILY" of an Access Person means any of the following persons
who reside in the same household as the Access Person:
child grandparent son-in-law
stepchild spouse daughter-in-law
grandchild sibling brother-in-law
parent mother-in-law sister-in-law
stepparent father-in-law
8. "DIRECTOR" means a director of Pacific American Income Shares or LM
Institutional Fund Advisors 1.
9. "INVESTMENT PERSON" means each Portfolio Manager (as defined below) and
any Access Person who, in connection with his or her regular functions or
duties provides information and advice to a Portfolio Manager or who
helps execute a Portfolio Manager's decisions.
10. "PORTFOLIO MANAGER" means a person who has or shares principal day-to-day
responsibility for managing an Account or Fund.
Page 8
<PAGE>
11. "PRE-CLEARANCE OFFICER" means the persons designated as Pre-Clearance
Officers by the Code of Ethics Committee.
12. "SECURITY" means any security (as that term is defined under the
Investment Company Act of 1940) and any financial instrument related to a
security, including options on securities, futures contracts, options on
futures contracts and any other derivative.
13. "SECURITIES TRANSACTION" means a purchase or sale of Securities in which
an Access Person or a member of his or her Immediate Family has or
acquires a Beneficial Interest.
14. "WESTERN ASSET CODE OF ETHICS COMMITTEE" ("CODE OF ETHICS COMMITTEE")
Members of the Western Asset Code of Ethics Committee shall be designated
by the Western Asset Board of Directors.
Page 9
<PAGE>
SEI LIQUID ASSET TRUST
SEI TAX EXEMPT TRUST
SEI DAILY INCOME TRUST
SEI INDEX FUNDS
SEI INSTITUTIONAL MANAGED TRUST
SEI INSTITUTIONAL INTERNATIONAL TRUST
SEI ASSET ALLOCATION TRUST
SEI INSTITUTIONAL INVESTMENTS TRUST
SEI INSURANCE PRODUCTS TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced fund (the "Trust"), a business trust organized
under the laws of The Commonwealth of Massachusetts, hereby constitutes and
appoints Edward D. Loughlin, Todd B. Cipperman and Mark E. Nagle, each of them
singly, her true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for her and in her name, place and
stead, and in the capacity indicated below, to sign any and all Registration
Statements and all amendments thereto relating to the offering of the Trust's
shares under the provisions of the Investment Company Act of 1940 and/or the
Securities Act of 1933, each such Act as amended, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, acting alone, full power and authority to do and
perform each and every act and thing requisite or necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal as
of the date set forth below.
/s/ William M. Doran Date: 3/28/200
- ---------------------------------- ------------
William M. Doran, Trustee
<PAGE>
SEI LIQUID ASSET TRUST
SEI TAX EXEMPT TRUST
SEI DAILY INCOME TRUST
SEI INDEX FUNDS
SEI INSTITUTIONAL MANAGED TRUST
SEI INSTITUTIONAL INTERNATIONAL TRUST
SEI ASSET ALLOCATION TRUST
SEI INSTITUTIONAL INVESTMENTS TRUST
SEI INSURANCE PRODUCTS TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced fund (the "Trust"), a business trust organized
under the laws of The Commonwealth of Massachusetts, hereby constitutes and
appoints Edward D. Loughlin, Todd B. Cipperman and Mark E. Nagle, each of them
singly, his true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him and in his name, place and
stead, and in the capacity indicated below, to sign any and all Registration
Statements and all amendments thereto relating to the offering of the Trust's
shares under the provisions of the Investment Company Act of 1940 and/or the
Securities Act of 1933, each such Act as amended, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, acting alone, full power and authority to do and
perform each and every act and thing requisite or necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal as
of the date set forth below.
/s/ F. Wendell Gooch Date: 3/28/2000
- ---------------------------- ------------
F. Wendell Gooch, Trustee
<PAGE>
SEI LIQUID ASSET TRUST
SEI TAX EXEMPT TRUST
SEI DAILY INCOME TRUST
SEI INDEX FUNDS
SEI INSTITUTIONAL MANAGED TRUST
SEI INSTITUTIONAL INTERNATIONAL TRUST
SEI ASSET ALLOCATION TRUST
SEI INSTITUTIONAL INVESTMENTS TRUST
SEI INSURANCE PRODUCTS TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced fund (the "Trust"), a business trust organized
under the laws of The Commonwealth of Massachusetts, hereby constitutes and
appoints Edward D. Loughlin, Todd B. Cipperman and Mark E. Nagle, each of them
singly, his true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him and in his name, place and
stead, and in the capacity indicated below, to sign any and all Registration
Statements and all amendments thereto relating to the offering of the Trust's
shares under the provisions of the Investment Company Act of 1940 and/or the
Securities Act of 1933, each such Act as amended, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, acting alone, full power and authority to do and
perform each and every act and thing requisite or necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal as
of the date set forth below.
/s/ James M. Storey Date: 4/7/2000
- ---------------------------- ------------
James M. Storey, Trustee
<PAGE>
SEI LIQUID ASSET TRUST
SEI TAX EXEMPT TRUST
SEI DAILY INCOME TRUST
SEI INDEX FUNDS
SEI INSTITUTIONAL MANAGED TRUST
SEI INSTITUTIONAL INTERNATIONAL TRUST
SEI ASSET ALLOCATION TRUST
SEI INSTITUTIONAL INVESTMENTS TRUST
SEI INSURANCE PRODUCTS TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced fund (the "Trust"), a business trust organized
under the laws of The Commonwealth of Massachusetts, hereby constitutes and
appoints Edward D. Loughlin, Todd B. Cipperman and Mark E. Nagle, each of them
singly, his true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him and in his name, place and
stead, and in the capacity indicated below, to sign any and all Registration
Statements and all amendments thereto relating to the offering of the Trust's
shares under the provisions of the Investment Company Act of 1940 and/or the
Securities Act of 1933, each such Act as amended, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, acting alone, full power and authority to do and
perform each and every act and thing requisite or necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal as
of the date set forth below.
/s/ Robert A Nesher Date: 3/26/2000
- ---------------------------- ------------
Robert A. Nesher, Trustee
<PAGE>
SEI LIQUID ASSET TRUST
SEI TAX EXEMPT TRUST
SEI DAILY INCOME TRUST
SEI INDEX FUNDS
SEI INSTITUTIONAL MANAGED TRUST
SEI INSTITUTIONAL INTERNATIONAL TRUST
SEI ASSET ALLOCATION TRUST
SEI INSTITUTIONAL INVESTMENTS TRUST
SEI INSURANCE PRODUCTS TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced fund (the "Trust"), a business trust organized
under the laws of The Commonwealth of Massachusetts, hereby constitutes and
appoints Edward D. Loughlin, Todd B. Cipperman and Mark E. Nagle, each of them
singly, his true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him and in his name, place and
stead, and in the capacity indicated below, to sign any and all Registration
Statements and all amendments thereto relating to the offering of the Trust's
shares under the provisions of the Investment Company Act of 1940 and/or the
Securities Act of 1933, each such Act as amended, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, acting alone, full power and authority to do and
perform each and every act and thing requisite or necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal as
of the date set forth below.
/s/ Edward D. Loughlin Date: 3/28/2000
- ---------------------------------- ------------
Edward D. Loughlin, President and
Chief Executive Officer
<PAGE>
SEI LIQUID ASSET TRUST
SEI TAX EXEMPT TRUST
SEI DAILY INCOME TRUST
SEI INDEX FUNDS
SEI INSTITUTIONAL MANAGED TRUST
SEI INSTITUTIONAL INTERNATIONAL TRUST
SEI ASSET ALLOCATION TRUST
SEI INSTITUTIONAL INVESTMENTS TRUST
SEI INSURANCE PRODUCTS TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced fund (the "Trust"), a business trust organized
under the laws of The Commonwealth of Massachusetts, hereby constitutes and
appoints Edward D. Loughlin, Todd B. Cipperman and Mark E. Nagle, each of them
singly, his true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him and in his name, place and
stead, and in the capacity indicated below, to sign any and all Registration
Statements and all amendments thereto relating to the offering of the Trust's
shares under the provisions of the Investment Company Act of 1940 and/or the
Securities Act of 1933, each such Act as amended, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, acting alone, full power and authority to do and
perform each and every act and thing requisite or necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal as
of the date set forth below.
/s/ George J. Sullivan, Jr. Date: 3/28/2000
- ---------------------------------- ------------
George J. Sullivan, Jr., Trustee
<PAGE>
SEI LIQUID ASSET TRUST
SEI TAX EXEMPT TRUST
SEI DAILY INCOME TRUST
SEI INDEX FUNDS
SEI INSTITUTIONAL MANAGED TRUST
SEI INSTITUTIONAL INTERNATIONAL TRUST
SEI ASSET ALLOCATION TRUST
SEI INSTITUTIONAL INVESTMENTS TRUST
SEI INSURANCE PRODUCTS TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced fund (the "Trust"), a business trust organized
under the laws of The Commonwealth of Massachusetts, hereby constitutes and
appoints Edward D. Loughlin, Todd B. Cipperman and Mark E. Nagle, each of them
singly, his true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him and in his name, place and
stead, and in the capacity indicated below, to sign any and all Registration
Statements and all amendments thereto relating to the offering of the Trust's
shares under the provisions of the Investment Company Act of 1940 and/or the
Securities Act of 1933, each such Act as amended, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, acting alone, full power and authority to do and
perform each and every act and thing requisite or necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal as
of the date set forth below.
/s/ Rosemarie B. Greco Date: 3/27/2000
- ---------------------------------- ------------
Rosemarie B. Greco, Trustee
<PAGE>
SEI LIQUID ASSET TRUST
SEI TAX EXEMPT TRUST
SEI DAILY INCOME TRUST
SEI INDEX FUNDS
SEI INSTITUTIONAL MANAGED TRUST
SEI INSTITUTIONAL INTERNATIONAL TRUST
SEI ASSET ALLOCATION TRUST
SEI INSTITUTIONAL INVESTMENTS TRUST
SEI INSURANCE PRODUCTS TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced fund (the "Trust"), a business trust organized
under the laws of The Commonwealth of Massachusetts, hereby constitutes and
appoints Edward D. Loughlin, Todd B. Cipperman and Mark E. Nagle, each of them
singly, his true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him and in his name, place and
stead, and in the capacity indicated below, to sign any and all Registration
Statements and all amendments thereto relating to the offering of the Trust's
shares under the provisions of the Investment Company Act of 1940 and/or the
Securities Act of 1933, each such Act as amended, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, acting alone, full power and authority to do and
perform each and every act and thing requisite or necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal as
of the date set forth below.
/s/ Mark E. Nagle Date: 3/28/2000
- ---------------------------------- ------------
Mark E. Nagle, Controller and
Chief Financial Officer
