<PAGE> 1
SEI TAX EXEMPT TRUST
CALIFORNIA TAX EXEMPT PORTFOLIO
CLASS G SHARES
(FORMERLY CLASS C)
SUPPLEMENT DATED MAY 1, 1996 TO
THE PROSPECTUS
DATED DECEMBER 31, 1995
THIS SUPPLEMENT TO THE PROSPECTUS PROVIDES NEW AND ADDITIONAL INFORMATION
BEYOND THAT CONTAINED IN THE PROSPECTUS, AND SHOULD BE READ IN CONJUNCTION WITH
SUCH PROSPECTUS.
At a meeting held on March 18, 1996, the Trustees approved the conversion of
Class C shares of the California Tax Exempt Portfolio (the "Portfolio") into
Class G shares. In connection with this change, the Trustees eliminated the
reimbursement component of the Trust's Rule 12b-1 Distribution Plan formerly
applicable to Class C shares, and approved a Class G shareholder servicing plan
that provides for shareholder servicing fees payable to the Distributor of up to
.25% of average net assets. These new arrangements became effective as of May
1, 1996. Under this new plan, the Distributor may provide a broad range of
shareholder and administrative services itself, or may enter into arrangements
under which third parties provide such services and are compensated by the
Distributor. As a result of this change, the following "Annual Operating
Expenses" table replaces the table on page 2 of the Prospectus:
<TABLE>
<CAPTION>
ANNUAL OPERATING EXPENSES (as a percentage of average net assets)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Management/Advisory Fees (after fee waiver)(1) .24%
12b-1 Fees (after fee waiver)(2) .25%
Total Other Expenses(3) .29%
Shareholder Servicing Expenses .25%
- ------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses (after fee waivers)(4) .78%
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Manager has waived, on a voluntary basis, a portion of its
fees for the Portfolio. The Management/Advisory fees shown
reflect this voluntary waiver. The Manager reserves the right to
terminate its waiver at any time in its sole discretion. Absent
such fee waiver, Management/Advisory fees for the Class G shares
of the Portfolio would be .27%.
(2) The Distributor has waived, on a voluntary basis, all or a portion
of its 12b-1 fee, and the 12b-1 fees shown reflect this waiver.
The Distributor reserves the right to terminate its waiver at any
time in its sole discretion. Absent such waiver, 12b-1 fees would
be .50% for the Class G shares of the Portfolio.
(3) Total Other Expenses represents estimated amounts for the current
year.
(4) Absent fee waivers, Total Operating Expenses for the Class G shares
of the Portfolio would be 1.06%. Additional information may be
found under "The Adviser" and "The Manager and Shareholder
Servicing Agent."
EXAMPLE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
An investor in the Portfolio would pay the following expenses on a $1,000 investment assuming
(1) a 5% annual return and (2) redemption at the end of each time period:
1 YR. 3 YRS. 5 YRS. 10 YRS.
----- ------ ------ -------
<S> <C> <C> <C> <C>
$8 $25 $43 $97
Class G
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The purpose of the expense table and example is to assist the investor in
understanding the various costs and expenses that may be directly or indirectly
borne by investors in the Portfolio. The information set forth in the foregoing
table and example relates only to the Class G shares of the Portfolio. The
Portfolio also offers Class A, Class B and Class C shares, which are subject to
the same expenses, except for different distribution and shareholder servicing
expenses. A person who purchases shares through a financial institution may be
charged separate fees by that institution. Additional information may be found
under "The Manager and Shareholder Servicing Agent," "The Adviser" and
"Distribution."
Long-term shareholders may eventually pay more than the economic equivalent of
the maximum front-end sales charges otherwise permitted by the Rules of Fair
Practice of the National Association of Securities Dealers, Inc. ("NASD").
------------------------------------
<PAGE> 2
In connection with changes to the Portfolio's Distribution Plan and the
adoption of the Class G shareholder servicing plan, the "Distribution" section
on pages 8 and 9 of the Prospectus is replaced with the following:
DISTRIBUTION AND SHAREHOLDER SERVICES
SEI Financial Services Company (the "Distributor"), a wholly owned
subsidiary of SEI, serves as the Portfolio's distributor pursuant to a
distribution agreement (the "Distribution Agreement") with the Trust.
The Rule 12b-1 Plan applicable to Class G Shares of the Portfolio (" Class G
Plan") provides for payments to the Distributor at an annual rate of .50% of
the Portfolio's average daily net assets attributable to Class G shares.
This payment is characterized as "compensation," and is not directly tied to
expenses incurred by the Distributor; the payment the Distributor receives
during any year may therefore be higher or lower than its actual expenses.
This payment compensates the Distributor for its services in connection with
distribution assistance, and some or all of it may be used to pay financial
institutions and intermediaries such as banks, savings and loan associations,
insurance companies, and investment counselors, broker-dealers (including the
Distributor's affiliates and subsidiaries) for services or reimbursement of
expenses incurred in connection with distribution assistance. If the
Distributor's expenses are less than its fees under the Class G Plan, the
Trust will still pay the full fee and the Distributor will realize a profit,
but the Trust will not be obligated to pay in excess of the full fee, even if
the Distributor's actual expenses are higher.
The Portfolio has adopted a shareholder servicing plan (the "Class G Service
Plan") under which firms, including the Distributor, that provide shareholder
services may receive compensation therefor. Under the Class G Service Plan,
the Portfolio will pay shareholder service fees to the Distributor at an
annual rate of up to .25% of average daily net assets in return for the
Distributor's (or its agent's) efforts in maintaining client accounts;
arranging for bank wires; responding to client inquiries concerning services
provided or investment; and assisting clients in changing dividend options,
account designations and addresses. In addition, the Portfolio has adopted
shareholder servicing plans for its Class A, Class B and Class C shares that
are similar to the plan described above. The Distributor may provide those
services itself or may enter into arrangements under which third parties
provide such services and are compensated by the Distributor. The
Distributor may retain as a profit any difference between the fee it
receives and the amount it pays such third party.
It is possible that an institution may offer different classes of shares to
its customers and provide differing services to the classes of the Portfolio,
and thus receive compensation with respect to different classes. Theses
financial institutions may also charge separate fees to their customers.
Certain financial institutions offering shares to their customers may be
required to register as dealers pursuant to state laws.
The Distributor may, from time to time in its sole discretion, institute one
or more promotional incentive programs, which will be paid by the
Distributor from its own resources. Under any such program, the Distributor
will provide promotional incentives, in the form of cash or other
compensation, including merchandise, airline vouchers, trips and vacation
packages, to all dealers selling shares of the Portfolio. Such promotional
incentives will be offered uniformly to all dealers and predicated upon the
amount of shares of the Portfolio sold by the dealer.
------------------------------------
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
<PAGE> 3
SEI TAX EXEMPT TRUST
CALIFORNIA TAX EXEMPT PORTFOLIO
SUPPLEMENT DATED MAY 1, 1996 TO
THE CLASS A, B, AND C PROSPECTUS (FORMERLY
THE CLASS A & B PROSPECTUS)
DATED DECEMBER 31, 1995
THIS SUPPLEMENT TO THE PROSPECTUS SUPERSEDES AND REPLACES ANY EXISTING
SUPPLEMENTS TO THE PROSPECTUS. THIS SUPPLEMENT PROVIDES NEW AND ADDITIONAL
INFORMATION BEYOND THAT CONTAINED IN THE PROSPECTUS, AND SHOULD BE READ IN
CONJUNCTION WITH SUCH PROSPECTUS.
----------------------------------------------------
Effective May 1, 1996, SEI Tax Exempt Trust (the "Trust") will offer Class A,
Class B, Class C and Class G shares of the California Tax Exempt Portfolio (the
"Portfolio"). These Classes differ primarily in the distribution and
shareholder servicing fees charged to shareholders. As a result of this new
class structure, this Prospectus is amended to reflect the addition of Class C
shares of the Portfolio to this Prospectus. In addition, the Portfolio's
existing Class C shares will convert to Class G shares on May 1, 1996.
----------------------------------------------------
At a meeting held on March 18, 1996, the Trustees eliminated the Trust's Rule
12b-1 Distribution Plans for Class A and Class B shares, approved the
conversion of Class C shares to Class G shares, and approved a new class of
shares, the Class C shares. The Trustees also approved Class A, Class B and
Class C shareholder servicing plans that provide for shareholder servicing fees
payable to the Distributor of up to .25% of average net assets, as well as
Class B and Class C administrative services plans that provide for
administrative service fees payable to the Distributor of up to .05% (Class B)
and .25% (Class C). These new arrangements are to become effective as of May
1, 1996. Under these plans, the Distributor may provide a broad range of
shareholder and administrative services itself, or may enter into arrangements
under which third parties provide such services and are compensated by the
Distributor. As a result of this change, effective May 1, 1996, the following
"Annual Operating Expenses" table replaces the table on page 2 of the
Prospectus:
<TABLE>
<CAPTION>
ANNUAL OPERATING EXPENSES (as a percentage of average net assets)
- ------------------------------------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C
------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Management/Advisory Fees (after fee waiver)(1) .24% .24% .24%
12b-1 Fees None None None
Total Other Expenses .04% .34% .54%
Shareholder Servicing Expenses (after fee waiver) .00%(2) .25% .25%
- ------------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses (after fee waivers)(3) .28% .58% .78%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Manager has waived, on a voluntary basis, a portion of its
fees for the Portfolio. The Management/Advisory fees shown
reflect this voluntary waiver. The Manager reserves the right to
terminate its waiver at any time in its sole discretion. Absent
such fee waiver, Management/Advisory fees for the Portfolio would
be .27%.
(2) The Distributor has waived, on a voluntary basis, all of its
shareholder servicing fee, and the Shareholder Servicing Fees shown
reflect this waiver. The Distributor reserves the right to
terminate its waiver at any time in its sole discretion. Absent
such waiver, Shareholder Servicing Fees would be .25% for the Class
A shares of the Portfolio.
(3) Absent fee waivers, Total Operating Expenses for Class A, B and C
shares of the Portfolio would be .56%, .61% and .81%, respectively.
Additional information may be found under "The Adviser" and "The
Manager and Shareholder Servicing Agent."
<PAGE> 4
EXAMPLE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
An investor in the Portfolio would pay the following expenses on a $1,000 investment assuming
(1) a 5% annual return and (2) redemption at the end of each time period:
1 YR. 3 YRS. 5 YRS. 10 YRS.
----- ------ ------ -------
<S> <C> <C> <C> <C>
$3 $ 9 $16 $36
Class A $6 $19 $32 $73
Class B $8 $25 $43 $97
Class C
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The purpose of the expense table and example is to assist the investor in
understanding the various costs and expenses that may be directly or indirectly
borne by investors in the Portfolio's Class A, Class B and Class C shares. The
information set forth in the foregoing table and example relates only to the
Portfolio's Class A, Class B and Class C shares. The Portfolio also offers
Class G shares which are subject to the same expenses, except for different
distribution and shareholder servicing expenses. A person who purchases shares
through a financial institution may be charged separate fees by that
institution. Additional information may be found under "The Manager and
Shareholder Servicing Agent," "The Adviser" and "Distribution."
Long-term Class B and Class C shareholders may pay more than the economic
equivalent of the maximum front-end sales charges permitted by the Rules of
Fair Practice of the National Association of Securities Dealers, Inc. ("NASD").
------------------------------------
<PAGE> 5
In connection with the changes to the Portfolio's Distribution Plans, the
conversion of the Class C shares to Class G shares, the re-establishment of
Class C shares and the approval of shareholder servicing and administrative
service plans, the "Distribution" section on pages 19 and 20 of the Prospectus
is replaced with the following:
DISTRIBUTION AND SHAREHOLDER SERVICES
SEI Financial Services Company (the "Distributor"), a wholly owned
subsidiary of SEI, serves as the Portfolio's distributor pursuant to a
distribution agreement (the "Distribution Agreement") with the Trust.
The Portfolio has adopted plans under which firms, including the Distributor,
that provide shareholder and administrative services may receive compensation
therefor. As discussed below, the Class A, B and C plans differ in a number
of ways, including the amounts that may be paid under each plan. The
Distributor may provide those services itself or may enter into arrangements
under which third parties provide such services and are compensated by the
Distributor. Under such arrangements the Distributor may retain as a profit
any difference between the fee it receives and the amount it pays such third
party. In addition, the Portfolio may enter into such arrangements directly.
Under the Class A plan, the Portfolio will pay the Distributor a fee at an
annual rate of up to .25% of the average daily net assets of the Portfolio
attributable to Class A shares, in return for provision of a broad range of
shareholder and administrative services. Under the Class B and Class C
shareholder service plans, the Portfolio will pay shareholder service fees
to the Distributor at an annual rate of up to .25% of average daily net
assets in return for the Distributor's (or its agent's) efforts in
maintaining client accounts; arranging for bank wires; responding to client
inquiries concerning services provided or investment; and assisting clients
in changing dividend options, account designations and addresses. In
addition, under their administrative services plans, Class B and Class C
shares also pay administrative services fees at specified percentages of the
average daily net assets of the shares of the Class (up to .05% and .25%,
respectively). Administrative services include sub-accounting; providing
information on share positions to clients; forwarding shareholder
communications to clients; processing purchase, exchange and redemption
orders; and processing divided payments. In addition, the Portfolio has
adopted a distribution plan for its Class G shares (the "Class G Plan")
pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended
(the "1940 Act").
It is possible that an institution may offer different classes of shares to
its customers and differing services to the classes of each Portfolio, and
thus receive compensation with respect to different classes. Theses
financial institutions may also charge separate fees to their customers.
Certain financial institutions offering shares to their customers may be
required to register as dealers pursuant to state laws.
The Distributor may, from time to time in its sole discretion, institute one
or more promotional incentive programs, which will be paid by the
Distributor from its own resources. Under any such program, the Distributor
will provide promotional incentives, in the form of cash or other
compensation, including merchandise, airline vouchers, trips and vacation
packages, to all dealers selling shares of the Portfolio. Such promotional
incentives will be offered uniformly to all dealers and predicated upon the
amount of shares of the Portfolio sold by the dealer.
-------------------------------------
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
