<PAGE>
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
[ X ] Filed by the Registrant
[ ] Filed by a Party other than the Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
SEI Tax Exempt Trust
-------------------------------------------------------------
(Exact name of registrant as specified in its charter)
SEI Tax Exempt Trust
------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rule 14a-6(i)(2).
[ ] $125 per Exchange Act Rule 14a-6(i)(1). (No preliminary filing was
required.)
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
N/A
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2) Aggregate number of securities to which transaction applies:
N/A
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: /1/
N/A
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4) Proposed maximum aggregate value of transaction:
N/A
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[ X ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
$125.00
---------------------------------------------
2) Form, Schedule or Registration Statement No.:
Schedule 14a
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3) Filing Party:
SEI Tax Exempt Trust
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4) Dated Filed:
August 9, 1995
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- --------------------
/1/ Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE>
SEI TAX EXEMPT TRUST
2 OLIVER STREET
BOSTON, MA 02109
----------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
SEPTEMBER 28, 1995
----------------
Notice is hereby given that a Special Meeting of Shareholders of the
Pennsylvania Municipal Portfolio (the "Portfolio") of SEI Tax Exempt Trust
(the "Trust"), will be held at the offices of SEI Financial Management
Corporation, 680 East Swedesford Road, Wayne, Pennsylvania 19087-1658, on
Thursday, September 28, 1995, at 10:00 a.m. to consider and act on the
following matters:
I. Proposal to approve the selection of Morgan Grenfell Capital
Management Incorporated as the Investment Adviser for the Portfolio and to
approve the adoption of the Investment Advisory Agreement between the
Trust, on behalf of the Portfolio, and Morgan Grenfell Capital Management
Incorporated.
II. Such other business as may properly come before the meeting or any
adjourned session thereof.
All Shareholders are cordially invited to attend the meeting. However, if
you are unable to be present at the meeting, you are requested to mark, sign
and date the enclosed Proxy and return it promptly in the enclosed envelope so
that the meeting may be held and a maximum number of shares may be voted.
Shareholders of record at the close of business on August 4, 1995 are
entitled to notice of and to vote at the meeting or any adjournment thereof.
By Order of the Board of Trustees
Richard W. Grant
Secretary
August 28, 1995
<PAGE>
SEI TAX EXEMPT TRUST
2 OLIVER STREET
BOSTON, MA 02109
----------------
PROXY STATEMENT
----------------
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Trustees of SEI Tax Exempt Trust (the "Trust") on
behalf of the Pennsylvania Municipal Portfolio (the "Portfolio") for use at the
Special Meeting of Shareholders to be held on September 28, 1995 at 10:00 a.m.
at the offices of SEI Corporation, 680 E. Swedesford Road, Wayne, Pennsylvania
19087-1658, and at any adjourned session thereof (such meeting and any
adjournment thereof are hereinafter referred to as the "Meeting"). Shareholders
of each Portfolio (the "Shareholders") of record at the close of business on
August 4, 1995 are entitled to vote at the Meeting. As of August 4, 1995, the
approximate number of units of beneficial interest ("shares") issued and
outstanding for the Pennsylvania Municipal Portfolio was 9,831,936.739. Each
share is entitled to one vote and each fractional share is entitled to a
proportionate fractional vote on each matter to be acted upon at the Meeting.
In addition to the solicitation of proxies by mail, Trustees and officers of
the Trust and officers and employees of SEI Financial Management Corporation,
the Manager and Shareholder Servicing Agent for the Trust (the "Manager"), may
solicit proxies in person or by telephone. Persons holding shares as nominees
will, upon request, be reimbursed for their reasonable expenses incurred in
sending soliciting materials to their principals. The cost of solicitation will
be borne by the Trust. The proxy and this Proxy Statement are being mailed to
Shareholders on or about August 28, 1995.
Shares represented by duly executed proxies will be voted in accordance with
the instructions given. Proxies may be revoked at any time before they are
exercised by a written revocation received by the President of the Trust at 680
E. Swedesford Road, Wayne, Pennsylvania 19087-1658, by properly executing a
later-dated proxy, or by attendance at the Meeting and voting in person.
I. APPROVAL OF MORGAN GRENFELL CAPITAL MANAGEMENT INCORPORATED
AS INVESTMENT ADVISER AND APPROVAL OF INVESTMENT
ADVISORY AGREEMENT RELATING TO THE PORTFOLIO.
The Board of Trustees is recommending that Shareholders of the Pennsylvania
Municipal Portfolio (the "Portfolio") approve Morgan Grenfell Capital
Management Incorporated ("Morgan Grenfell" or the "Investment Adviser") as the
adviser and approve the investment advisory agreement between the Trust, on
behalf of the Portfolio, and Morgan Grenfell, 885 Third Avenue, 32nd Floor, New
York, New York 10022, dated as of July 3, 1995 (the "Investment Advisory
Agreement"). The Trustees of the Trust, including all of the Trustees who are
not "interested persons" of the Trust, as defined under the Investment Company
Act of 1940, as amended (the "1940 Act"), approved the Investment Advisory
Agreement with respect to the Portfolio on June 5, 1995.
INTRODUCTION
At a Board of Trustees' meeting held on June 5, 1995, the Trustees voted to
terminate the investment advisory agreement between the Trust, on behalf of the
Portfolio, and Bessemer Trust Company, N.A.
<PAGE>
("Bessemer"), and approved the selection of Morgan Grenfell Capital Management
Incorporated as the investment adviser to the Portfolio. As permitted by the
1940 Act, Morgan Grenfell Capital Management Incorporated, will begin serving
as investment adviser after Board approval but prior to shareholder approval
as the fee paid to it is less than the current investment advisory fee. The
fee structure set forth below reflects the proposed fee arrangement that took
effect after the current investment advisory agreement with Bessemer was
terminated and the new advisory agreement with Morgan Grenfell was
implemented.
Termination of Prior Investment Advisory Agreement. Prior to July 3, 1995,
Bessemer served as the investment adviser to the Portfolio pursuant to an
investment advisory agreement dated June 30, 1989 and last approved by the
sole initial shareholder prior to commencement of operations of the Portfolio
on August 14, 1989. On June 5, 1995, the Board of Trustees voted to terminate
this agreement based upon the Board's determination that the selection of
Morgan Grenfell would be in the best interests of the Portfolio.
Duties Under the Investment Advisory Agreement. Except for the change in the
identity of the Investment Adviser, different effective and termination dates,
and the differing compensation arrangements described below, the terms of the
Investment Advisory Agreement are identical in all material respects to the
terms of the prior investment advisory agreement between Bessemer and the
Trust. A copy of the Investment Advisory Agreement is attached as Exhibit A to
this Proxy Statement.
Compensation. Under the previous investment advisory agreement, the Trust
paid Bessemer a fee, calculated daily and paid monthly, at an annual rate of
.25% of the daily net assets of the Portfolio. During the Portfolio's most
recent fiscal year, the aggregate advisory fee paid to Bessemer was $233,000.
Under the new Investment Advisory Agreement, the Trust pays Morgan Grenfell a
fee, which is calculated daily and paid monthly, based on an annual percentage
rate of .20% of the average daily net assets of the Portfolio.
FUND EXPENSE COMPARISON (AS A PERCENTAGE OF AVERAGE NET ASSETS) (CLASS A
SHARES)
<TABLE>
<CAPTION>
CURRENT PROPOSED
FEES AND EXPENSES FEES AND EXPENSES
----------------- -----------------
<S> <C> <C>
Management/Advisory Fees................... .37% .37%
12b-1 Fees(1).............................. .06% .06%
Other Expenses............................. .05% .05%
--- ---
Total Operating Expenses (after waivers and
reimbursements)(2)........................ .48% .48%
</TABLE>
- --------
(1) The 12b-1 fees shown reflect the Portfolio's current 12b-1 budget for
reimbursement of expenses. The maximum 12b-1 fees payable by Class A
shares of the Portfolio are .30%.
(2) Absent the Manager's waiver of fees and reimbursements of certain
expenses, total operating expenses for Class A shares of the Portfolio
would be .71% under the current arrangement and .66% under the proposed
arrangement.
2
<PAGE>
FUND EXPENSE COMPARISON (AS A PERCENTAGE OF AVERAGE NET ASSETS) (CLASS D
SHARES)
<TABLE>
<CAPTION>
CURRENT PROPOSED
FEES AND EXPENSES FEES AND EXPENSES
----------------- -----------------
<S> <C> <C>
Management/Advisory Fees................... .37% .37%
12b-1 Fees(1).............................. .31% .31%
Other Expenses............................. .20% .20%
--- ---
Total Operating Expenses (after fee waiv-
er)(2).................................... .88% .88%
</TABLE>
- --------
(1) The 12b-1 fees shown reflect the Portfolio's current 12b-1 budget for
reimbursement of expenses. The maximum 12b-1 fees payable by Class D
shares of the Portfolio are .60%.
(2) Absent the Manager's waiver of fees and reimbursements of certain
expenses, total operating expenses for Class D shares of the Portfolio
would be 1.11% under the current arrangement and 1.06% under the proposed
arrangement.
Duration and Termination. Once approved by a vote of a majority of the
outstanding voting securities of the Portfolio in accordance with the
requirements of the 1940 Act, and unless sooner terminated, the Investment
Advisory Agreement will continue in effect for an initial period of two years.
Thereafter, if not terminated, the Investment Advisory Agreement will continue
in effect for the Portfolio for successive periods of one year, provided that
such continuation is specifically approved at least annually (a) by the vote
of a majority of those Trustees who are not parties to the Investment Advisory
Agreement or interested persons of the Trust or Morgan Grenfell, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
by the vote of a majority of the Trust's Board of Trustees or by a vote of a
majority of the outstanding voting securities of the Portfolio. The Investment
Advisory Agreement may be terminated as to the Portfolio at any time, without
the payment of any penalty by a vote of a majority of the Trustees or by a
vote of a majority of the outstanding voting securities of the Portfolio on
not less than thirty (30) days nor more than sixty (60) days written notice to
Morgan Grenfell, or on ninety (90) days written notice to the Trust.
The Investment Advisory Agreement will terminate immediately in the event of
its assignment.
Trustees' Consideration. In recommending that the Shareholders approve the
Investment Advisory Agreement, the Trustees carefully reviewed and evaluated
the experience of the Morgan Grenfell's key personnel and the quality of
services expected to be delivered to the Portfolio by Morgan Grenfell. These
considerations included but were not limited to the following: Morgan
Grenfell's past performance record with respect to municipal securities, the
team-oriented approach used by Morgan Grenfell's senior personnel, the nature
and quality of services to be rendered by Morgan Grenfell, the history,
reputation and background of Morgan Grenfell and its key personnel, and other
factors deemed relevant by the Trustees. The Trustees also reviewed the fees
to be paid to Morgan Grenfell in comparison to those charged in the relevant
segment of the mutual fund business. The Trustees of the Trust have no
material interest in the termination of Bessemer or the appointment of Morgan
Grenfell.
Description of Morgan Grenfell. Morgan Grenfell Capital Management
Incorporated, 885 Third Avenue, 32nd Floor, New York, New York 10022, is a
wholly-owned U.S.-based subsidiary of Morgan Grenfell Asset Management
("MGAM"). MGAM is located at 20 Finsbury Circus, London EC2 M1NB, England, and
is 100% owned by the Morgan Grenfell Group, PLC which was acquired by Deutsche
Bank AG in 1990. Morgan Grenfell provides equity and fixed income management
services, and as of July 27, 1995, had a total of $7.2 billion in assets under
management.
3
<PAGE>
Listed below are the names and principal occupations of each of the
directors and principal executive officers of Morgan Grenfell. The principal
business address of each director and principal executive officer, as it
relates to his or her duties at the Investment Adviser, is 885 Third Avenue,
32nd Floor, New York, New York 10022.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<S> <C>
Michael Bullock.............................. Chairman
James Edward Minnick......................... President, Secretary and Treasurer
Robert Edward Kern, Jr....................... Director, Executive Vice President
David Westover Baldt......................... Director, Executive Vice President
Mark Gerard Arthus........................... Compliance Officer
</TABLE>
To the knowledge of the Trust, no Trustee of the Trust has purchased or sold
shares of or interests in Morgan Grenfell during the most recent fiscal year
of the Trust.
Morgan Grenfell also serves as the investment adviser to two (2) other
registered investment companies with similar investment objectives. The
approximate net assets of such funds and the fees payable are set forth below.
<TABLE>
<CAPTION>
TRUST ANNUAL FEE NET ASSETS
----- ---------- ------------
<S> <C> <C>
Morgan Grenfell Capital Management Municipal Bond Fund. .40% $198,738,099
Short Term Muni Bond Fund.............................. .40% $ 3,482,559
</TABLE>
In the event Shareholders of the Portfolio do not approve the adoption of
the Investment Advisory Agreement at the Special Meeting to which this Proxy
Statement relates, or any adjournment thereof, the Trustees will consider the
appropriate course of action.
THE TRUSTEES RECOMMEND THAT THE SHAREHOLDERS VOTE FOR THIS PROPOSAL.
GENERAL INFORMATION ABOUT THE TRUST AND OTHER MATTERS
Distribution. SEI Financial Services Company ("SFS"), a wholly-owned
subsidiary of SEI Corporation, 680 E. Swedesford Road, Wayne, Pennsylvania
19087-1658 ("SEI"), acts as the Distributor of the Trust's shares pursuant to
a Distribution Agreement between the Trust and SFS. Alfred P. West, Jr.,
serves as Chairman of the Board and Chief Executive Officer of SFS and SEI,
and Henry H. Greer serves as Director, President and Chief Operating Officer
of SFS and SEI. William M. Doran, a Trustee of the Trust, is a Director and
Secretary of SEI.
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 Investment Adviser is
responsible for placing orders to execute transactions for the Portfolio. In
placing orders, it is the policy of the Trust 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 Investment Adviser generally
seeks reasonable competitive spreads or commissions, the Trust will not
necessarily be paying the lowest spread or commission available.
4
<PAGE>
The Trust does not expect to use one particular dealer, but, subject to the
Trust's policy of seeking the best net results, dealers who provide
supplemental investment research to the Investment Adviser may receive orders
for transactions by the Trust. Information so received will be in addition to
and not in lieu of the services required to be performed by the Investment
Adviser under the Investment Advisory Agreement, and the expenses of the
Investment Adviser will not necessarily be reduced as a result of the receipt
of such supplemental information. Certain research services furnished to the
Investment Adviser by dealers may be useful to the Investment Adviser for
clients other than the Trust. Similarly, any research services received by the
Investment Adviser through placement of portfolio transactions of other
clients may be of value to the Investment Adviser in fulfilling its
obligations to the Trust.
There is generally no stated commission in the case of fixed income
securities, but the price paid by a Portfolio usually includes an undisclosed
dealer commission or mark-up. In underwritten offerings, the price paid by the
Portfolio includes a disclosed, fixed commission or discount retained by the
underwriter or dealer.
Since the Trust does not market its shares through intermediary brokers or
dealers, it is not the Trust's practice to allocate brokerage or principal
business on the basis of sales of its shares which may be made through such
firms. For the fiscal year ended August 31, 1994, the Pennsylvania Municipal
Portfolio paid no brokerage commissions to affiliates.
5% Shareholders. As of August 4, 1995, the following persons were the only
persons who were record owners or to the knowledge of the Trust beneficial
owners of 5% or more of shares of the Portfolio. The Trust believes that most
of the shares referred to above were held by the below persons in accounts for
their fiduciary, agency or custodial customers.
<TABLE>
<CAPTION>
NUMBER
SHAREHOLDER OF SHARES % OWNERSHIP
----------- --------- -----------
<S> <C> <C>
ACO................................................... 8,070,297.000 82.08%
c/o Integra Trust Services
Trust Securities Section 2-032
Attn: Karen White
300 Fourth Avenue
Pittsburgh, PA 15278-2232
Meg and Co. .......................................... 764,556.698 7.78%
c/o United States National Bank
Attn: Debbie Moraca
P.O. Box 520
Johnstown, PA 15907
</TABLE>
Adjournment. In the event that sufficient votes in favor of the proposal set
forth in the Notice of the Special Meeting are not received by the time
scheduled for the meeting, the persons named as proxies may propose one or
more adjournments of the meeting for a period or periods of not more than 60
days in the aggregate to permit further solicitation of proxies with respect
to any of such proposal. Any such adjournment will require the affirmative
vote of a majority of the votes cast on the question in person or by proxy at
the session of the meeting to be adjourned. The persons named as proxies will
vote in favor of such adjournment those proxies which they are entitled to
vote in favor of such proposals. They will vote against any such adjournment
those proxies required to be voted against any such proposals. The costs of
any such additional solicitation and of any adjourned session will be borne by
the Trust.
5
<PAGE>
Required Vote. Approval of the Investment Advisory Agreement requires the
affirmative vote of a majority of the outstanding voting securities of the
Portfolio. As defined in the 1940 Act, "majority of the outstanding voting
securities" means the vote of (i) 67% or more of the Portfolio's outstanding
voting securities present at a meeting, if the holders of more than 50% of the
outstanding voting securities of the Portfolio are present or represented by
proxy, or (ii) more than 50% of the Portfolio's outstanding voting securities,
whichever is less.
Abstentions and "broker non-votes" will not be counted for or against any
proposal to which they relate, but will be counted for purposes of determining
whether a quorum is present. Abstentions will be counted as votes present for
purposes of determining a "majority of the outstanding voting securities"
present at the Meeting, and will therefore have the effect of counting against
the proposal to which they relate.
Shareholder Proposals. The Trust does not hold annual shareholder meetings.
Shareholders wishing to submit proposals for inclusion in a proxy statement
for a subsequent meeting should send their written proposals to the Secretary
of the Trust c/o SEI Corporation, Legal Department, 680 E. Swedesford Road,
Wayne, Pennsylvania 19087-1658.
Reports to Shareholders. The Trust will furnish, without charge, a copy of
the most recent Annual Report to Shareholders of the Trust and the most recent
Semi-Annual Report succeeding such Annual Report, if any, on request. Request
should be directed to the Trust at 680 E. Swedesford Road, Wayne, Pennsylvania
19087- 1658 or by calling 1-800-342-5734.
Other Matters. The Trustees know of no other business to be brought before
the Meeting. However, if any other matters properly come before the Meeting,
it is their intention that proxies which do not contain specific restrictions
to the contrary will be voted on such matters in accordance with the judgment
of the persons named in the enclosed form of proxy.
SHAREHOLDERS ARE URGED TO COMPLETE, SIGN AND DATE
THE ENCLOSED PROXY AND RETURN IT PROMPTLY.
6
<PAGE>
EXHIBIT A
INVESTMENT ADVISORY AGREEMENT
SEI TAX EXEMPT TRUST
AGREEMENT made this 3rd day of July, 1995 by and between SEI Tax Exempt
Trust, a Massachusetts business trust (the "Trust"), and Morgan Grenfell
Capital Management Incorporated (the "Adviser").
WHEREAS, the Trust is an open-end, diversified management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), consisting of several series of shares, each having its own investment
policies; and
WHEREAS, the Trust has retained SEI Financial Management Corporation (the
"Administrator") to provide administration of the Trust's operations, subject
to the control of the Board of Trustees;
WHEREAS, the Trust desires to retain the Adviser to render investment
management services with respect to the portfolio(s) listed in Schedule A to
this Agreement and such other portfolios as the Trust and the Adviser may
agree upon (the "Portfolios"), and the Adviser is willing to render such
services:
NOW, THEREFORE, in consideration of mutual covenants herein contained, the
parties hereto agree as follows:
1. DUTIES OF THE ADVISER. The Trust employs the Adviser to manage the
investment and reinvestment of the assets, and to continuously review,
supervise, and administer the investment program of the Portfolios, to
determine in its discretion the securities to be purchased or sold, to
provide the Administrator and the Trust with records concerning the
Adviser's activities which the Trust is required to maintain, and to
render regular reports to the Administrator and to the Trust's Officers
and Trustees concerning the Adviser's discharge of the foregoing
responsibilities.
The Adviser shall discharge the foregoing responsibilities subject to
the control of the Board of Trustees of the Trust and in compliance
with such policies as the Trustees may from time to time establish, and
in compliance with the objectives, policies, and limitations for each
such Portfolio set forth in the Trust's prospectus and statement of
additional information as amended from time to time, and applicable
laws and regulations.
The Adviser accepts such employment and agrees, at its own expense, to
render the services and to provide the office space, furnishings and
equipment and the personnel required by it to perform the services on
the terms and for the compensation provided herein.
2. PORTFOLIO TRANSACTIONS. The Adviser is authorized to select the brokers
or dealers that will execute the purchases and sales of portfolio
securities for the Portfolios and is directed to use its best efforts to
obtain the best net results as described in the Trust's prospectus and
statement of additional information from time to time. The Adviser will
promptly communicate to the Administrator and to the officers and the
Trustees of the Trust such information relating to portfolio
transactions as they may reasonably request. It is understood that the
Adviser will not be deemed to have acted unlawfully, or to have breached
a fiduciary duty to the Trust or be in breach of any obligation owing to
the Trust under this
A-1
<PAGE>
Agreement, or otherwise, solely by reason of its having directed a
securities transaction on behalf of the Trust to a broker-dealer in
compliance with the provisions of Section 28(e) of the Securities
Exchange Act of 1934.
3. COMPENSATION OF THE ADVISER. For the services to be rendered by the
Adviser as provided in Sections 1 and 2 of this Agreement, the Trust
shall pay to the Adviser compensation at the rate specified in Schedule
A which is attached hereto and made a part of this Agreement. Such
compensation shall be paid to the Adviser at the end of each month, and
calculated by applying a daily rate, based on the annual percentage
rates as specified in Schedule A, to the assets. The fee shall be based
on the average daily net assets for the month involved.
All rights of compensation under this Agreement for services performed
as of the termination date shall survive the termination of this
Agreement.
4. REPORTS. The Trust and the Adviser agree to furnish to each other, if
applicable, current prospectuses, proxy statements, reports to
shareholders, certified copies of their financial statements, and such
other information with regard to their affairs as each may reasonably
request.
5. STATUS OF THE ADVISER. The services of the Adviser to the Trust are not
to be deemed exclusive, and the Adviser shall be free to render similar
services to others so long as its services to the Trust are not impaired
thereby. The Adviser shall be deemed to be an independent contractor and
shall, unless otherwise expressly provided or authorized, have no
authority to act for or represent the Trust in any way or otherwise be
deemed an agent of the Trust.
6. CERTAIN RECORDS. Any records required to be maintained and preserved
pursuant to the provisions of Rule 31a-1 and Rule 31a-2 promulgated
under the 1940 Act which are prepared or maintained by the Adviser on
behalf of the Trust are the property of the Trust and will be
surrendered promptly to the Trust on request.
7. LIMITATION OF LIABILITY OF THE ADVISER. The duties of the Adviser shall
be confined to those expressly set forth herein, and no implied duties
are assumed by or may be asserted against the Adviser hereunder. The
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 hereunder, except a loss resulting from
willful misfeasance, bad faith or gross negligence in the performance of
its duties, or by reason of reckless disregard of its obligations and
duties hereunder, except as may otherwise be provided under provisions
of applicable state law which cannot be waived or modified hereby. (As
used in this Section 7, the term "Adviser" shall include directors,
officers, employees and other corporate agents of the Adviser as well as
that corporation itself).
8. PERMISSIBLE INTERESTS. Trustees, agents, and shareholders of the Trust
are or may be interested in the Adviser (or any successor thereof) as
directors, partners, officers, or shareholders, or otherwise; directors,
partners, officers, agents, and shareholders of the Adviser are or may
be interested in the Trust as Trustees, shareholders or otherwise; and
the Adviser (or any successor) is or may be interested in the Trust as a
shareholder or otherwise. In addition, brokerage transactions for the
Trust may be effected through affiliates of the Adviser if approved by
the Board of Trustees, subject to the rules and regulations of the
Securities and Exchange Commission.
A-2
<PAGE>
9. DURATION AND TERMINATION. This Agreement, unless sooner terminated as
provided herein, shall remain in effect until two years from date of
execution, and thereafter, for periods of one year so long as such
continuance thereafter is specifically approved at least annually (a) by
the vote of a majority of those Trustees of the Trust who are not
parties to this Agreement or interested persons of any such party, cast
in person at a meeting called for the purpose of voting on such
approval, and (b) by the Trustees of the Trust or by vote of a majority
of the outstanding voting securities of each Portfolio; provided,
however, that if the shareholders of any Portfolio fail to approve the
Agreement as provided herein, the Adviser may continue to serve
hereunder in the manner and to the extent permitted by the 1940 Act and
rules and regulations thereunder. The foregoing requirement that
continuance of this Agreement be "specifically approved at least
annually" shall be construed in a manner consistent with the 1940 Act
and the rules and regulations thereunder.
This Agreement may be terminated as to any Portfolio at any time,
without the payment of any penalty by vote of a majority of the
Trustees of the Trust or by vote of a majority of the outstanding
voting securities of the Portfolio on not less than 30 days nor more
than 60 days written notice to the Adviser, or by the Adviser at any
time without the payment of any penalty, on 90 days written notice to
the Trust. This Agreement will automatically and immediately terminate
in the event of its assignment. Any notice under this Agreement shall
be given in writing, addressed and delivered, or mailed postpaid, to
the other party at any office of such party.
As used in this Section 9, the terms "assignment", "interested
persons", and a "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
exemptions as may be granted by the Securities and Exchange Commission
under said 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. NOTICE. Any notice required or permitted to be given by either party to
the other shall be deemed sufficient if sent by registered or certified
mail, postage prepaid, addressed by the party giving notice to the
other party at the last address furnished by the other party to the
party giving notice: if to the Trust, at 680 East Swedesford Road,
Wayne, PA, Attention: President and if to the Adviser at: Morgan
Grenfell Capital Management, Inc., 885 Third Avenue, 32nd Floor, New
York, NY 10022-4802.
12. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby.
A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of the Commonwealth of Massachusetts, and notice is hereby
given that this instrument is executed on behalf of the Trustees of the Trust
as Trustees, is are not binding upon any of the Trustees, officers, or
shareholders of the Trust individually but binding only upon the assets and
property of the Trust.
No portfolio of the Trust shall be liable for the obligations of any other
portfolio of the Trust. Without limiting the generality of the foregoing, the
Adviser shall look only to the assets of the Portfolios for payment of fees
for services rendered to the Portfolios.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Investment Advisory
Agreement to be executed as of the day and year first written above.
SEI Tax Exempt Trust Morgan Grenfell Capital Management
Incorporated
By: /s/ Robert B. Carroll By: /s/ James E. Minnick
--------------------------------- ---------------------------------
Name: Robert B. Carroll Name: James E. Minnick
------------------------------ --------------------------------
Attest: /s/ Jennifer Klass Attest: /s/ Mark G. Arthus
---------------------------- ------------------------------
Name: Jennifer Klass Name: Mark G. Arthus
------------------------------ --------------------------------
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<PAGE>
SCHEDULE A DATED JULY 3, 1995
TO THE
INVESTMENT ADVISORY AGREEMENT
DATED JULY 3, 1995
BETWEEN
SEI TAX EXEMPT TRUST
AND
MORGAN GRENFELL CAPITAL MANAGEMENT INCORPORATED
Pursuant to Article 3, the Trust shall pay the Adviser compensation at an
annual rate as follows:
Pennsylvania Municipal Portfolio .20%
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<PAGE>
SEI TAX EXEMPT TRUST
Pennsylvania Municipal Portfolio
Special Meeting of Shareholders
PROXY SOLICITED BY THE BOARD OF TRUSTEES FOR
THE SPECIAL MEETING OF SHAREHOLDERS, SEPTEMBER 28, 1995
The undersigned, revoking previous proxies with respect to the Shares (defined
below), hereby appoints David G. Lee and Robert B. Carroll as proxies and each
of them, each with full power of substitution, to vote at the Special Meeting of
Shareholders of the Pennsylvania Municipal Portfolio (the "Portfolio") of SEI
Tax Exempt Trust (the "Trust") to be held in the offices of SEI Financial
Management Corporation, 680 East Swedesford Road, Wayne, Pennsylvania 19087-
1658, on Thursday, September 28, 1995 at 10:00 a.m., Eastern time, and any
adjournments or postponements thereof (the "Meeting"), all shares of beneficial
interest of said Portfolio that the undersigned would be entitled to vote if
personally present at the Meeting ("Shares") on the proposal set forth below
and, in accordance with their own discretion, any other matters properly brought
before the Meeting.
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS A VOTE "FOR" THE PROPOSAL TO:
Approve Morgan Grenfell Capital Management Incorporated ("Morgan Grenfell")
as Investment Adviser of the Portfolio and approve a new Investment
Advisory Agreement relating to the Portfolio between the Trust and Morgan
Grenfell.
____For ____Against ____Abstain
This proxy will, when properly executed, be voted as directed herein by the
signing Shareholder. If no contrary direction is given when the duly executed
proxy is returned, this proxy will be voted FOR the foregoing proposal and will
be voted in the appointed proxies' discretion upon such other business as may
properly come before the Meeting.
The undersigned acknowledges receipt with this proxy of a copy of the Notice of
Special Meeting and the Proxy Statement of the Board of Trustees. Your
signature(s) on this proxy should be exactly as your name(s) appear on this
Proxy. If the shares are held jointly, each holder should
<PAGE>
sign this Proxy. Attorneys-in-fact, executors, administrators, trustees or
guardians should indicate the full title and capacity in which they are signing.
Dated:_________________, 1995 ________________________________
Signature of Shareholder
________________________________
Signature (Joint owners)
PLEASE DATE, SIGN AND RETURN PROMPTLY USING THE ENCLOSED ENVELOPE WHETHER OR NOT
YOU EXPECT TO ATTEND THE MEETING; YOU MAY, NEVERTHELESS, VOTE IN PERSON IF YOU
DO SO ATTEND.
2
