<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 16, 1998
File No. 33-30950
File No. 811-5900
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 [ ]
POST-EFFECTIVE AMENDMENT NO. 30 [X]
and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [ ]
AMENDMENT NO. 27 [X]
THE EXPEDITION FUNDS
(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)
Registrant's Telephone Number, including Area Code (800) 342-5734
Kevin P. Robins
c/o SEI Investments Company
Oaks, Pennsylvania 19456
(Name and Address of Agent for Service)
Copies to:
Richard W. Grant, Esq. John H. Grady, Jr., Esq.
Morgan, Lewis & Bockius LLP Morgan, Lewis & Bockius LLP
2000 One Logan Square 2000 One Logan Square
Philadelphia, PA 19103 Philadelphia, PA 19103
It is proposed that this filing become effective (check appropriate box)
/ / immediately upon filing pursuant to paragraph (b)
/ / on [date] 1997 pursuant to paragraph (b)
/X/ 60 days after filing pursuant to paragraph (a)
/ / 75 days after filing pursuant to paragraph (a)
/ / on [___________] pursuant to paragraph (a) of Rule 485.
<PAGE>
THE EXPEDITION FUNDS
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
N-1A Item No. Location
- -------------- --------
PART A: The Expedition Bond Fund & The
- ------ Expedition Equity Fund Prospectus
<S> <C>
Item 1. Cover Page Cover Page
Item 2. Synopsis Summary of Funds
Expenses
Item 3. Condensed Financial Information Financial Highlights
Item 4. General Description of Registrant General Information;
Investment Information --
Investment Objectives,
Investment Policies,
General Investment
Policies, Investment
Limitations
Item 5. Management of the Fund Fund Information --
Management of the Fund;
Distribution of Fund
Shares;
Administration of the Fund;
Item 5A. Management's Discussion of Fund Performance **
Item 6. Capital Stock and Other Securities General Information;
Shareholder Information--
Voting Rights
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
Item 7. Purchase of Securities Being Offered Investing in Shares --
Share Purchases,
What Shares Cost,
Shareholder Accounts,
Sales Charges --
Investment Shares,
Reducing the Sales
Charge, Systematic
Investment Program
Item 8. Redemption or Repurchase Exchange Privilege;
Redeeming Shares --
Systematic Withdrawal
Program;
Accounts with Low
Balances
Item 9. Pending Legal Proceedings *
</TABLE>
<TABLE>
<CAPTION>
PART B: Statement of Additional Information
- ------
<S> <C>
Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information and History General Information about
the Funds
Item 13. Investment Objectives and Policies Investment Objective and
Policies;
Investment Limitations
Item 14. Management of the Registrant The Expedition Funds
Management
Item 15. Control Persons and Principal Holders of Fund Ownership
Securities
Item 16. Investment Advisory and Other Services Investment Advisory
Services;
Other Services
Item 17. Brokerage Allocation Brokerage Transactions
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C>
Item 18. Capital Stock and Other Securities Purchasing Shares;
Massachusetts Partnership
Law
Item 19. Purchase, Redemption, and Pricing of Purchasing Shares;
Securities Being Offered Redeeming Shares;
Determining Net Asset
Value
Item 20. Tax Status Tax Status
Item 21. Underwriters Other Services --
Distributor
Item 22. Calculation of Performance Data Total Return;
Yield;
Effective Yield;
Performance Comparisons
Item 23. Financial Statements Financial Statements
</TABLE>
PART C Information required to be included in Part C is set forth under the
- ------
appropriate Item, so numbered, in Part C of this Registration Statement.
__________________
* Not Applicable
** Information required by Item 5A will be contained in the Annual Report for
the fiscal year ending October 31, 1997.
iv
<PAGE>
[LOGO] Expedition Funds
Prospectus
________________________________________________________________________________
Expedition Equity Fund
Expedition Bond Fund
___________, 1998
<PAGE>
THE EXPEDITION FUNDS
THE EXPEDITION BOND FUND
THE EXPEDITION EQUITY FUND
PROSPECTUS
The shares offered by this prospectus represent interests in two diversified
portfolios known as The Expedition Bond Fund (the "Bond Fund") and the
Expedition Equity Fund (the "Equity Fund") (each a "Fund" and collectively the
"Funds"). Each Fund is one of a series of investment portfolios in The
Expedition Funds (the "Trust"), an open-end, management investment company (a
mutual fund).
The investment objective of the Bond Fund is to provide current income. The
Fund pursues this investment objective by investing in a professionally
managed, diversified portfolio consisting primarily of bonds, as well as other
fixed income securities.
The investment objective of the Equity Fund is to provide growth of capital,
with a secondary objective of income. The Fund pursues this investment
objective by investing in a professionally managed, diversified portfolio
consisting primarily of common stocks issued by mid- and large-capitalization
companies.
Compass Bank, an Alabama state banking corporation, professionally manages
each Fund's portfolio.
This prospectus offers Class B Shares of each Fund.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF
COMPASS BANK, COMPASS BANCSHARES, INC. OR ANY OF ITS AFFILIATES, OR OF ANY
BANK, ARE NOT ENDORSED OR GUARANTEED BY COMPASS BANK, COMPASS BANCSHARES, INC.
OR ANY OF ITS AFFILIATES, OR BY ANY BANK, AND ARE NOT OBLIGATIONS OF,
GUARANTEED BY OR INSURED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE
CORPORATION ("FDIC"), THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT
AGENCY. INVESTMENT IN THESE SHARES INVOLVES INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.
Compass Bank, an Alabama banking corporation, serves as investment adviser and
custodian of the Funds, and Compass Bank and certain of its affiliates provide
or may provide certain other services to the Funds, for which services Compass
Bank and/or its affiliates will be compensated. SEI Investments Distribution
Co., which is not affiliated with Compass Bank, is the sponsor and serves as
distributor of the Funds.
This prospectus contains the information you should read and know before you
invest in a Fund. Keep this prospectus for future reference.
The Trust has also filed a Statement of Additional Information dated ,
1998, with the Securities and Exchange Commission ("SEC"). The information
contained in the Statement of Additional Information is incorporated by
reference into this prospectus. You may request a copy of the Statement of
Additional Information free of charge by calling 1-800-992-2085. To obtain
other information or make inquiries about a Fund, contact the Trust at the
address listed in the back of this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
Prospectus dated , 1998
<PAGE>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
SUMMARY OF FUND EXPENSES 1
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 4
- --------------------------------------------------------------------------------
PERFORMANCE INFORMATION FOR EQUITY FUND, INCLUDING PREDECESSOR COMMON TRUST
FUND 6
- --------------------------------------------------------------------------------
GENERAL INFORMATION 7
- --------------------------------------------------------------------------------
INVESTMENT INFORMATION 8
- --------------------------------------------------------------------------------
Investment Objectives 8
Investment Policies 8
General Investment Policies 13
Investment Limitations 17
FUND INFORMATION 18
- --------------------------------------------------------------------------------
Management of the Funds 18
Distribution of Fund Shares 19
Administration of the Funds 20
NET ASSET VALUE 20
- --------------------------------------------------------------------------------
INVESTING IN SHARES 21
- --------------------------------------------------------------------------------
Share Purchases 21
What Shares Cost 22
Sales Charges--Class B Shares 22
Systematic Investment Program 23
Dividends 24
Capital Gains 24
EXCHANGE PRIVILEGE 24
- --------------------------------------------------------------------------------
REDEEMING SHARES 26
- --------------------------------------------------------------------------------
Systematic Withdrawal Program 27
Accounts with Low Balances 28
SHAREHOLDER INFORMATION 29
- --------------------------------------------------------------------------------
Voting Rights 29
EFFECT OF BANKING LAWS 29
- --------------------------------------------------------------------------------
TAX INFORMATION 30
- --------------------------------------------------------------------------------
PERFORMANCE INFORMATION 30
- --------------------------------------------------------------------------------
ADDRESSES 32
- --------------------------------------------------------------------------------
I
<PAGE>
SUMMARY OF FUND EXPENSES
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS B SHARES
SHAREHOLDER TRANSACTION EXPENSES
<S> <C>
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price)................................... None
Maximum Sales Charge Imposed on Reinvested Dividends
(as a percentage of offering price)................................... None
Contingent Deferred Sales Charge (as a percentage of original purchase
price or redemption proceeds, if applicable).......................... 5.00%
Redemption Fee (as a percentage of amount redeemed, if applicable)...... None*
Exchange Fee............................................................ None
</TABLE>
*Wire-transferred redemptions of less than $5,000 may be subject to additional
fees.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(As a percentage of average net assets)
Bond Equity
Fund Fund
---- ------
<S> <C> <C>
Management Fee (after waivers) (1)................................ .50% .75%
12b-1 Fee (2)..................................................... 1.00% 1.00%
Total Other Expenses (3).......................................... .36% .34%
Total Operating Expenses (1),(4) .............................. 1.86% 2.09%
</TABLE>
(1) The Adviser has agreed, on a voluntary basis, to waive or reimburse its
management fee for the Class B Shares of the Bond Fund and Equity Fund to
the extent necessary to keep the Total Operating Expenses for the current
fiscal year from exceeding 2.10% and 2.25%, respectively. Upon
commencement of operations of Class B, the Adviser will further, on a
voluntary basis, waive its management fees for the Bond Fund a total of
.25%. The management fees in the table above reflect this .25% fee waiver.
Absent the management fee waivers, the management fees for the Bond Fund
would be .75%. The Adviser reserves the right, at its sole discretion, to
terminate these waivers or reimbursements at any time.
(2) Rule 12b-1 fees include .75% for distribution related activities and .25%
for shareholder servicing activities.
(3) The Trust, either directly or through its transfer agent, may enter into
arrangements with recordkeepers and others who provide services to
shareholders, and may compensate such entities for their services. Any
such arrangements, if entered into, may increase a Fund's "Total Other
Expenses."
(4) Absent the Adviser's and the Distributor's voluntary fee waivers, if any,
Total Operating Expenses for the Bond Fund would be 2.11%.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF CLASS B SHARES OF EACH FUND
WILL BEAR EITHER DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE
VARIOUS COSTS AND EXPENSES, SEE "FUND INFORMATION" AND "INVESTING IN SHARES."
1
<PAGE>
<TABLE>
<CAPTION>
EXAMPLE 1 Year 3 Years 5 Years 10 Years*
- ------- ------ ------- ------- ---------
<S> <C> <C> <C> <C>
You would pay the following expenses on a
$1,000 investment assuming (1) a 5% annual
return and (2) deduction of the maximum
applicable contingent deferred sales charge:
Bond Fund
Assuming complete redemption at end of
period...................................... $71 $ 96 $123 N/A
Assuming no redemptions..................... $21 $ 66 $113 N/A
Equity Fund
Assuming complete redemption at end of
period...................................... $73 $100 $130 N/A
Assuming no redemptions..................... $23 $ 70 $120 N/A
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
BECAUSE THE EQUITY FUND HAS JUST RECENTLY BECOME OPERATIONAL AS OF THE DATE OF
THIS PROSPECTUS, THE FUND HAS NOT PROJECTED EXPENSES BEYOND THE THREE-YEAR
PERIOD SHOWN. LONG-TERM HOLDERS OF CLASS B SHARES MAY EVENTUALLY PAY MORE THAN
THE ECONOMIC EQUIVALENT OF THE MAXIMUM FRONT-END SALES CHARGES OTHERWISE
PERMITTED BY THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.'S CONDUCT
RULES.
* Class B Shares automatically convert to Investment Shares after [5] years.
2
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
3
<PAGE>
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
The following information has been audited by Deloitte & Touche LLP, the
Trust's independent auditors, as indicated in their report dated December 5,
1997 on the Trust's financial statements as of October 31, 1997 which are
incorporated by reference into the Trust's Statement of Additional
Information. This table should be read in conjunction with the Trust's
financial statements and related notes thereto. The Trust did not offer Class
B shares as of October 31, 1997 and therefore no financial highlights are
presented for such shares. Because Class B shares are subject to different
sales charges and expense levels, the total return and yield, for the same
period, will ordinarily differ among classes. The Expedition Equity Fund did
not offer Investment Shares as of October 31, 1997 and therefore no financial
highlights are presented for such shares. Additional performance information
is set forth in the Trust's 1997 Annual Report to Shareholders and is
available upon request and without charge by calling 1-800-992-2085.
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
REALIZED
AND
UNREALIZED DISTRIBU- DISTRIBU-
NET ASSET GAINS OR TIONS TIONS NET ASSET
VALUE, NET (LOSSES) FROM NET FROM VALUE,
BEGINNING INVESTMENT ON INVESTMENT CAPITAL END TOTAL
OF PERIOD INCOME INVESTMENTS INCOME GAINS OF PERIOD RETURN
--------- ---------- ----------- ---------- --------- --------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
EQUITY FUND
- -----------
Institutional Shares
1997(/1/) $10.00 0.02 0.25 (0.02) (0.86) $9.39 2.96%
BOND FUND
- ---------
Investment Shares
1997 $ 9.77 0.53 0.08 (0.53) -- $9.85 6.41%(/3/)
1996 9.92 0.58 (0.15) (0.58) -- 9.77 4.44%(/3/)
1995 9.54 0.63 0.38 (0.63) -- 9.92 10.94%(/3/)
1994 10.40 0.54 (0.86) (0.54) -- 9.54 (3.12%)(/3/)
1993 10.25 0.63 0.21 (0.63) (0.06) 10.40 8.42%(/3/)
1992(/2/) 10.00 0.36 0.25 (0.36) -- 10.25 6.24%(/3/)
</TABLE>
- -----------
* Annualized.
(1) Commenced operations on June 13, 1997.
(2) Commenced operations on April 20, 1992.
(3) Based on net asset value, which does not reflect the sales charge, if
applicable.
4
<PAGE>
<TABLE>
<CAPTION>
RATIO OF
NET
RATIO OF RATIO OF RATIO INVESTMENT
NET EXPENSES NET OF EXPENSES INCOME TO
ASSETS TO INVESTMENT TO AVERAGE AVERAGE AVERAGE
END OF AVERAGE INCOME NET ASSETS NET ASSETS PORTFOLIO COMMIS-
PERIOD NET TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER SION
(000) ASSETS NET ASSETS WAIVERS) WAIVERS) RATE RATE
-------- -------- ---------- ----------- ---------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
$237,567 1.09%* 0.53%* 1.09%* 0.53%* 64.68% $0.0519
$ 23,630 1.13% 5.46% 1.56% 5.03% 69.09% --
44,552 1.08% 5.90% 1.58% 5.40% 77.00% --
63,521 1.04% 6.51% 1.51% 6.04% 79.00% --
58,827 1.20% 5.44% 1.50% 5.14% 91.00% --
97,246 1.11% 6.11% 1.40% 5.82% 69.00% --
65,984 0.79%* 6.79%* 1.39%* 6.19%* 88.00% --
</TABLE>
5
<PAGE>
PERFORMANCE INFORMATION FOR EQUITY FUND, INCLUDING PREDECESSOR COMMON TRUST
FUND
- -------------------------------------------------------------------------------
The Equity Fund is the successor to a common trust fund (the Equity Model
Trust Fund) previously managed by an affiliate of the Equity Fund's investment
adviser. A substantial portion of the assets of that common trust fund was
transferred to the Equity Fund in connection with the Equity Fund's
commencement of operations on June 13, 1997. Set forth below is certain
performance data for the Equity Fund that includes periods during which it was
operated as a common trust fund. The performance for the periods during which
the Equity Fund existed as a common trust fund is deemed relevant because the
common trust fund was managed using virtually the same investment objective,
policies and restrictions as those used by the Equity Fund. The common trust
fund was not registered under the Investment Company Act of 1940 and the
performance data is not necessarily indicative of the future performance of
the Equity Fund. Further, the predecessor common trust fund was not subject to
certain investment limitations imposed on mutual funds which, if they had been
imposed, may have adversely affected the common trust fund's performance.
The predecessor common trust fund did not incur expenses that correspond to
the advisory, administrative, and other fees to which the Equity Fund is
subject. Accordingly, the following performance information has been adjusted
by applying the total expense ratios for the Institutional Shares of the
Equity Fund, as disclosed in the Prospectus at the time the Equity Fund
commenced operations, which reduced the actual performance of the common trust
fund.
The average annual total returns (adjusted to reflect Fund expenses net of
voluntary waivers and reimbursements but not the contingent deferred sales
charges or 12b-1 fees charged to Class B Shares) are set forth in the
following table for the periods indicated therein:
TOTAL RETURNS FOR THE EQUITY FUND (INCLUDING PREDECESSOR COMMON TRUST FUND
PERFORMANCE)
AND
STANDARD BENCHMARK INDICES
FOR PERIODS ENDED OCTOBER 31, 1997
<TABLE>
<CAPTION>
SINCE
INCEPTION
ONE YEAR THREE YEARS FROM 10/13/93
TO 10/31/97 TO 10/31/97 TO 10/31/97
----------- ----------- -------------
<S> <C> <C> <C>
Equity Fund............................... 27.15% 21.98% 15.98%
Lipper Growth and Income Fund Index....... 28.12% 23.39% 17.81%
S&P 500 Index............................. 32.11% 27.49% 21.12%
S&P 400 Mid Cap Index..................... 32.65% 23.57% 17.89%
</TABLE>
6
<PAGE>
The Lipper Growth & Income Fund Index is a net asset value weighted index of
the 30 largest funds with a growth & income investment objective. It is
calculated daily with adjustments for income dividends and capital gains
distributions as of the ex-dividend dates. The S&P 500 Index (the Standard &
Poor's 500 Composite Index) is a market capitalization weighted index composed
of widely held common stocks listed on the New York Stock Exchange, American
Stock Exchange, and over-the-counter market. The S&P 400 Mid Cap Index is a
market-value weighted index of 400 domestic mid cap stocks chosen for market
size, liquidity and industry group representation. These indices are
unmanaged. It is not possible to invest in an index, including the indices
listed above.
GENERAL INFORMATION
- -------------------------------------------------------------------------------
The Trust was established as a Massachusetts business trust under a
Declaration of Trust dated August 7, 1989. The Declaration of Trust permits
the Trust to offer separate series of shares of beneficial interest
representing interests in separate portfolios of securities. The shares in any
one portfolio may be offered in separate classes. As of the date of this
prospectus, the Board of Trustees (the "Trustees") has established three
classes of shares of each Fund, Investment Shares, Class B Shares and
Institutional Shares. Investment Shares and Institutional Shares are offered
in a separate Prospectus.
Class B Shares of each Fund are primarily designed for customers of Compass
Bank and its correspondents and affiliates (including customers obtaining
brokerage and related services from Compass Brokerage, Inc.), other than
individuals and entities establishing fiduciary, trust, agency, private
banking, custody or similar relationships with the Asset Management Group of
Compass Bank or a trust division of a banking affiliate of Compass Bancshares,
Inc. or trust company affiliate of Compass Bancshares, Inc., who desire a
convenient means of accumulating an interest in a professionally managed,
diversified portfolio of securities. Except as noted herein, a minimum initial
investment of $1,000 is required and subsequent investments must be in amounts
of at least $100.
The Trust also offers two other portfolios: The Expedition Money Market Fund;
and The Expedition Tax-Free Money Market Fund. Information regarding the
Trust's other portfolios and classes is contained in separate prospectuses
that may be obtained by calling 1-800-992-2085.
7
<PAGE>
INVESTMENT INFORMATION
- -------------------------------------------------------------------------------
INVESTMENT OBJECTIVES
The investment objective of a Fund cannot be changed without approval of
shareholders. While there is no assurance that a Fund will achieve its
investment objective, it endeavors to do so by following the investment
policies described in this prospectus.
BOND FUND
The investment objective of the Bond Fund is to provide current income.
EQUITY FUND
The investment objective of the Equity Fund is to provide growth of capital,
with a secondary objective of income.
INVESTMENT POLICIES
The investment policies described below may be changed by the Trustees without
shareholder approval. Shareholders will be notified before any material change
in these policies becomes effective.
BOND FUND
ACCEPTABLE INVESTMENTS. The Fund invests primarily in bonds as well as other
fixed income securities. Under normal circumstances, the Fund will invest at
least 65% of the value of its total assets in bonds, which may include
debentures and notes, issued by U.S. and foreign companies as well as by U.S.
and foreign governments and supranational entities. All such instruments must
be denominated in U.S. dollars and must be rated "A" or better by one or more
nationally recognized statistical rating organization ("NRSRO") at the time of
purchase. Under normal circumstances, the Fund's average weighted maturity
will be maintained at from 3 to 5 years. In the event that a security owned by
the Fund is downgraded below the stated rating categories, Compass Bank (the
"Adviser") will review and take appropriate action with regard to the
security. The Fund may invest any remaining assets in a variety of fixed
income securities, as further described below.
TEMPORARY INVESTMENTS. The Fund may invest up to 100% of its assets in cash
and short-term obligations during times of unusual market conditions for
temporary defensive purposes. Short-term obligations include:
. obligations of the U.S. Government or its agencies or
instrumentalities;
8
<PAGE>
. high quality commercial paper;
. shares of money market mutual funds;
. short-term obligations issued by domestic banks and U.S. branches of
foreign banks; and
. repurchase agreements.
U.S. GOVERNMENT OBLIGATIONS. The Fund may invest in U.S. Government
securities. U.S. Government securities in which the Fund invests include:
. direct obligations of the U.S. Treasury, including STRIPs and zero
coupon securities; and
. obligations of U.S. Government agencies or instrumentalities, which may
include but are not limited to Federal Home Loan Banks, Government
National Mortgage Association, Fannie Mae, and the Federal Home Loan
Mortgage Corporation.
Obligations of U.S. Government agencies or instrumentalities are backed in a
variety of ways by the U.S. Government, or its agencies or instrumentalities.
Some of these obligations, such as Government National Mortgage Association
mortgage-backed securities, are backed by the full faith and credit of the
U.S. Treasury. Obligations of Federal Home Loan Banks are backed by the
discretionary authority of the U.S. government to purchase certain obligations
of agencies or instrumentalities. Obligations of the Federal Home Loan
Mortgage Corporation are backed by the credit of the agency issuing the
obligations.
MORTGAGE-RELATED SECURITIES. The Fund may invest in mortgage-related
securities which are issued by private entities. The mortgage-related
securities in which the Fund may invest may be: (i) privately issued
securities which are collateralized by pools of mortgages in which each
mortgage is guaranteed as to payment of principal and interest by an agency or
instrumentality of the U.S. Government; (ii) privately issued securities which
are collateralized by pools of mortgages in which payment of principal and
interest are guaranteed by the issuer and such guarantee is collateralized by
U.S. Government securities; or (iii) other privately issued securities in
which the proceeds of the issuance are invested in mortgage-backed securities
and payment of the principal and interest are supported by the credit of any
agency or instrumentality of the U.S. Government. The underlying mortgage
pools may consist of both fixed and adjustable rate mortgages. Other mortgage-
related securities that may be purchased by the Fund include "CMOs" and
"REMICs" (discussed below).
9
<PAGE>
ASSET-BACKED SECURITIES (NON-MORTGAGE). Asset-backed securities consist of
securities secured by 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
purposes of owning such assets and issuing such debt. A Fund may invest in
other asset-backed securities that may be created in the future if the Advisor
determines they are suitable.
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 and is thus termed an interest-only class ("IO"),
while the other class may receive all of the principal payments and is thus
termed the principal-only class ("PO"). The value of IOs tends to increase as
interest rates rise and decrease as rates fall; the opposite is true of POs.
SMBs are extremely sensitive to changes in interest rates because of the
impact thereon of prepayment of principal on the underlying mortgage
securities.
ZERO COUPON OBLIGATIONS. Zero coupon obligations are debt securities that do
not bear any interest, but instead are issued at a deep discount from par. The
value of a zero coupon obligation increases over time to reflect the interest
accreted. Such obligations will not result in the payment of interest until
maturity, and will have greater price volatility than similar securities that
are issued at par and pay interest periodically. Zero coupon obligations may
include interest only and principal only components of fixed income
securities, as well as interests in trusts that issue interests in fixed
income securities, such as "CATs" and "TIGRs."
LOAN PARTICIPATIONS. Loan participations are interests in loans to U.S.
corporations which are administered by the lending bank or agent for a
syndicate of lending banks, and sold by the lending bank or syndicate member
("intermediary bank"). In a loan participation, the borrower corporation 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 corporate borrower. In the event of the bankruptcy or insolvency of
the corporate 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
10
<PAGE>
event the underlying corporate 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 corporate borrower), so that the Fund may also be subject to
the risk that the intermediary bank may become insolvent.
CMOS/REMICS. Collateralized mortgage obligations ("CMOs") and real estate
mortgage investment conduits ("REMICs") are mortgage-backed securities issued
by a non-governmental entity, such as a trust or corporation. 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.
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.
Principal payments on the underlying mortgage assets may cause CMOs to be
retired substantially earlier than their stated maturity or final distribution
dates, resulting in a loss of all or part of any premium paid. A REMIC is a
CMO that qualifies for special tax treatment under the Internal Revenue Code
and invests in certain mortgages principally secured by interests in real
property.
CONVERTIBLE SECURITIES. Convertible securities are corporate securities that
are exchangeable for a set number of shares of another security at a prestated
price. Convertible securities have characteristics similar to both fixed
income and equity securities. Because of the conversion feature, the market
value of convertible securities tends to move together with the market value
of the underlying stock. The value of convertible securities is also affected
by prevailing interest rates, the credit quality of the issuer, and any call
provisions.
DOLLAR ROLLS. Dollar roll transactions consist of the sale of mortgage-backed
securities to a bank or broker-dealer, together with a commitment to purchase
similar, but not necessarily identical, securities at a future date. Any
difference between the sale price and the purchase price is netted against the
interest income foregone on the securities to arrive at an implied borrowing
(reverse repurchase) rate. Alternatively, the sale and purchase transactions
which constitute the dollar roll can be executed at the same price, with the
Fund being paid a fee as consideration for entering into the commitment to
purchase. Dollar rolls may be renewed after cash settlement
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and initially may involve only a firm commitment agreement by the Fund to buy
a security. If the broker-dealer to whom the Fund sells the security becomes
insolvent, the Fund's right to purchase or repurchase the security may be
restricted. Also, the value of the security may change adversely over the term
of the dollar roll, such that the security that the Fund is required to
repurchase may be worth less than the security that the Fund originally held.
REVERSE REPURCHASE AGREEMENTS. The Fund may enter into reverse repurchase
agreements. In a reverse repurchase agreement the Fund transfers possession of
a portfolio instrument to another person, such as a financial institution,
broker, or dealer, in return for a percentage of the instrument's market value
in cash, and agrees that on a stipulated date in the future the Fund will
repurchase the portfolio instrument by remitting the original consideration
plus interest at an agreed upon rate. When effecting reverse repurchase
agreements, assets of the Fund in a dollar amount sufficient to make payment
for the obligations to be purchased, are earmarked or otherwise segregated
until the transaction is settled.
GUARANTEED INVESTMENT CONTRACTS ("GICS"). GICs are contracts issued by U.S.
insurance companies. Pursuant to such contracts, the Fund makes cash
contributions to a deposit fund of the insurance company's general account.
The insurance company then credits to the Fund on a monthly basis guaranteed
interest at either a fixed, variable or floating rate. Generally, GICs are not
assignable or transferable without the permission of the issuing insurance
companies and therefore may be considered illiquid.
BANK INVESTMENT CONTRACTS ("BICS"). BICs are contracts issued by U.S. banks
and savings and loan institutions. Pursuant to such contracts, a Fund makes
cash contributions to a deposit fund of the general account of the bank or
savings and loan institution. The bank or savings and loan institution then
credits to the Fund on a monthly basis guaranteed interest at either a fixed,
variable or floating rate. Generally, BICs are not assignable or transferable
without the permission of the issuing bank or savings and loan institution and
therefore may be considered illiquid.
EQUITY FUND
ACCEPTABLE INVESTMENTS. The Fund invests primarily (at least 80% of the value
of its total assets) in common stocks issued by mid- and large-capitalization
companies. The Fund may invest any remaining assets in warrants and rights to
purchase common stocks, preferred stocks convertible into common stock, non-
convertible preferred stocks, U.S. dollar denominated equity securities of
foreign issuers listed on national
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<PAGE>
securities exchanges or actively traded in the over-the-counter market, and
American Depositary Receipts ("ADRs"). The Fund also may purchase and sell
("write") put and call options (including options on indices) and may purchase
financial futures contracts and options thereon. The Fund also may purchase
bonds convertible into common stock and Standard & Poor's Depositary Receipts
("SPDRs").
TEMPORARY INVESTMENTS. The Fund may invest a portion of its assets in cash,
shares of money market mutual funds and repurchase agreements for liquidity
reasons. For temporary defensive purposes during times of unusual market
conditions, as determined by the Adviser, the Fund may invest up to 100% of
its assets in these securities.
EQUITY SECURITIES. Equity securities consist primarily of common stocks and
instruments exchangeable or convertible into common stocks. Common stock
represents units of ownership in a corporation or other company. Investments
in equity securities are subject to market risks which may cause their prices
to fluctuate over time. Changes in the value of these securities will not
necessarily affect cash income derived from these securities but will affect
the Fund's net asset value.
GENERAL INVESTMENT POLICIES
The following investment policies and strategies apply to both the Bond Fund
and the Equity Fund.
REPURCHASE AGREEMENTS. Repurchase agreements are arrangements in which
financial institutions sell U.S. Government securities or other securities to
a Fund and agree at the time of sale to repurchase them at a mutually agreed
upon time and price. To the extent that the original seller does not
repurchase the securities from a Fund, the Fund could receive less than the
repurchase price on any sale of such securities. A Fund will only enter into
repurchase agreements with banks and other recognized financial institutions
deemed by the adviser to be creditworthy pursuant to guidelines established by
the Trustees.
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES. Each Fund may invest in
the securities of other investment companies including, pending approval from
the Securities and Exchange Commission, affiliated money market funds. A Fund
will invest in other investment companies primarily for the purpose of
investing short-term cash which has not yet been invested in other portfolio
instruments. A Fund's purchase of investment company securities may result in
a layering of expenses.
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<PAGE>
RESTRICTED SECURITIES. Each Fund may invest in restricted securities.
Restricted securities are any securities in which a Fund may otherwise invest
pursuant to its investment objective and policies but which are subject to
restrictions on resale under federal securities laws. Restricted securities
may be illiquid.
VARIABLE AND FLOATING RATE INSTRUMENTS. Certain obligations may carry variable
or floating rates of interest, and may involve conditional or unconditional
demand features. Such instruments bear interest at rates which 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. There
is a risk that the current interest rate on such obligations may not
accurately reflect existing market interest rates.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. Each Fund may purchase
securities on a when-issued or delayed delivery basis. These transactions are
arrangements in which a Fund purchases securities with payment and delivery
scheduled for a future time. The seller's failure to complete these
transactions may cause the Fund to miss a price or yield considered to be
advantageous. Settlement dates may be a month or more after entering into
these transactions, and the market values of the securities purchased may vary
from the purchase prices.
LENDING OF PORTFOLIO SECURITIES. In order to generate additional income, each
Fund may lend portfolio securities on a short-term basis to broker/dealers,
banks, or other institutional borrowers of securities. The Funds will receive
collateral in the form of cash or U.S. Government securities equal to at least
100% of the value of the securities loaned. There is the risk that when
lending portfolio securities, the securities may not be available to the Fund
on a timely basis, and the Fund may, therefore, lose the opportunity to sell
the securities at a desirable price. In addition, in the event that a borrower
of securities filed for bankruptcy or became insolvent, disposition of the
securities may be delayed.
PUT AND CALL OPTIONS. Each Fund may purchase put and call options on its
portfolio securities. The Funds may also write (sell) put and call options on
all or any portion of its portfolio to generate income for the Funds. A Fund
only will write call options on securities either held in its portfolio or
which it has the right to obtain without payment of further consideration or
for which it has segregated cash in the amount of any additional
consideration. In the case of put options, the Funds will segregate liquid
assets with a value equal to or greater than the exercise price of the
underlying securities.
A Fund can purchase or write options that are either traded over-the-counter
or on an exchange. A Fund will generally purchase and write over-
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<PAGE>
the-counter options on portfolio securities in negotiated transactions with
the buyers or writers of the options since options on the portfolio securities
held by the Fund are not traded on an exchange. Over-the-counter options are
two-party contracts with price and terms negotiated between buyer and seller.
A Fund purchases and writes options only with investment dealers and other
financial institutions (such as commercial banks or savings associations)
deemed creditworthy by the Adviser.
SWAPS, CAPS, FLOORS AND COLLARS. 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. 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.
FINANCIAL FUTURES AND OPTIONS ON FUTURES. Each Fund may purchase and sell
financial futures contracts. Financial futures contracts call for the delivery
of particular debt instruments at a certain time in the future. The seller of
the contract agrees to make delivery of the type of instrument called for in
the contract and the buyer agrees to take delivery of the instrument at the
specified future time.
Each Fund also may write put and call options and purchase put and call
options on financial futures contracts. When a Fund writes a call option on a
futures contract, it is undertaking the obligation of selling the futures
contract at a fixed price at any time during a specified period if the option
is exercised. Conversely, as purchaser of a put option on a futures contract,
the Fund is entitled (but not obligated) to sell a futures contract at the
fixed price during the life of the option. When a Fund writes a put option on
a futures contract, it is undertaking to buy a particular futures contract at
a fixed price at any time during a specified period if the option is
exercised. As a purchaser of a call option on a futures contract, a Fund is
entitled (but not obligated) to purchase a futures contract at a fixed price
at any time during the life of the option. When a Fund purchases futures
contracts, it will collateralize its position by depositing amount of cash and
cash equivalents equal to the market value of the futures positions held, less
margin deposits, in a segregated account with the Trust's custodian.
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<PAGE>
A Fund may not purchase or sell futures contracts or related options if
immediately thereafter the sum of the amount of margin deposits on the Fund's
existing non-hedging futures positions and premiums paid for related options
would exceed 5% of the market value of the Fund's total assets.
INVESTMENT RISKS. The value of a Fund's shares will fluctuate. With regard to
the Bond Fund, the amount of this fluctuation is dependent upon the quality
and maturity of the securities in the Fund's portfolio, as well as on market
conditions. Prices of securities eligible for purchase by the Bond Fund are
interest rate sensitive, which means that their value varies inversely with
market interest rates. Thus, if market interest rates have increased from the
time a security was purchased, the security, if sold, might be sold at a price
less than its cost. Similarly, if market interest rates have declined from the
time a security was purchased, the security, if sold, might be sold at a price
greater than its cost. Equity securities in which the Equity Fund invests are
subject to market risks which may cause their prices to fluctuate. Changes in
the value of these securities will not necessarily affect cash income derived
from these securities but will affect the Equity Fund's net asset value.
The Bond Fund may invest in mortgage-related securities which may have less
potential for capital appreciation than other similar investments (e.g.,
investments with comparable maturities) because as interest rates decline, the
likelihood increases that mortgages will be prepaid. Furthermore, if mortgage-
related securities are purchased at a premium, mortgage foreclosures and
unscheduled principal payments may result in some loss of a holder's principal
investment to the extent of the premium paid. Conversely, if mortgage-related
securities are purchased at a discount, both a scheduled payment of principal
and an unscheduled prepayment of principal would increase current and total
returns and would accelerate the recognition of income, which would be taxed
as ordinary income when distributed to shareholders.
Securities of foreign issuers are subject to certain risks not typically
associated with domestic securities, including, among other risks, changes in
currency rates and in exchange control regulations, costs in connection with
conversions between various currencies, limited publicly available information
regarding foreign issuers, lack of uniformity in accounting, auditing and
financial statements and requirements, greater securities market volatility,
less liquidity of securities, less government supervision and regulations of
securities markets, withholding taxes and changes in taxes on income on
securities, and possible seizure, nationalization or expropriation of the
foreign issuer or foreign deposits.
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<PAGE>
SPECIAL RISKS ASSOCIATED WITH FINANCIAL FUTURES AND OPTIONS ON FINANCIAL
FUTURES. When a Fund uses financial futures and options on financial futures
there is a risk that the prices of the securities subject to the futures
contracts may not correlate with the prices of the securities in the Fund's
portfolio. This may cause the futures contract and any related options to
react differently than the portfolio securities to market changes. In
addition, the Adviser could be incorrect in its expectations about the
direction or extent of market factors such as interest rate movements. In
these events, a Fund may lose money on the futures contract or option. It is
not certain that a secondary market for positions in futures contracts or for
options will exist at all times. Although the Adviser will consider liquidity
before entering into options transactions, there is no assurance that a liquid
secondary market on an exchange will exist for any particular futures contract
or option at any particular time. A Fund's ability to establish and close out
futures and options positions depends on this secondary market.
INVESTMENT LIMITATIONS
The Bond Fund will not:
. borrow money directly or through reverse repurchase agreements or
pledge securities except, under certain circumstances, the Fund may
borrow up to one-third of the value of its net assets and pledge up to
10% of the value of its total assets to secure such borrowings; or
. with respect to securities comprising 75% of its assets, invest more
than 5% of its total assets in securities of one issuer (except cash
and cash items, and securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities).
The Equity Fund will not:
. borrow money or pledge securities except, under certain circumstances,
the Fund may borrow up to one-third of the value of its net assets and
pledge up to 10% of the value of its total assets to secure such
borrowings; or
. with respect to securities comprising 75% of its assets, invest more
than 5% of its total assets in securities of one issuer (except
securities issued or guaranteed by the U.S. Government or its agencies
or instrumentalities).
The above investment limitations cannot be changed without shareholder
approval. The following limitation, however, may be changed by the Trustees
without shareholder approval. Shareholders will be notified before any
material change in this limitation becomes effective.
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Each Fund will not:
. invest more than 15% of its net assets in securities which are not
readily marketable or which are otherwise considered illiquid,
including over-the-counter options and repurchase agreements providing
for settlement in more than seven days after notice.
FUND INFORMATION
- -------------------------------------------------------------------------------
MANAGEMENT OF THE FUNDS
BOARD OF TRUSTEES. The Board of Trustees is responsible for managing the
business affairs of the Trust and for exercising all of the powers of the
Trust except those reserved for the shareholders.
INVESTMENT ADVISER. Pursuant to an investment advisory contract with the Trust
and subject to direction by the Trustees, investment decisions for the Funds
are made by Compass Bank, an Alabama state banking corporation that is a
Federal Reserve System member bank, as each Fund's investment adviser (the
"Adviser"). The Adviser continually conducts investment research and
supervision for the Funds and is responsible for the purchase or sale of
portfolio instruments, for which it receives an annual fee from the assets of
each Fund.
ADVISORY FEES. The Adviser is entitled to receive an annual investment
advisory fee equal to .75% of each Fund's average daily net assets
payable from the assets of a Fund. The Adviser may choose to voluntarily
waive or reimburse a portion of its fee. The Adviser reserves the right,
in its sole discretion, to terminate these voluntary waivers or
reimbursements at any time.
ADVISER'S BACKGROUND. The Adviser is a wholly-owned subsidiary of Compass
Bancshares, Inc. ("Bancshares"), a bank holding company organized under
the laws of Delaware. Through its subsidiaries and affiliates,
Bancshares, the 48th largest bank holding company in the United States in
terms of total assets as of December 31, 1997, offers a full range of
financial services to the public including commercial lending, depository
services, cash management, brokerage services, retail banking, credit
card services, investment advisory services, and trust services.
As of December 31, 1997, the Adviser offered a broad range of commercial
banking services. The Adviser has served as investment adviser to mutual
funds since February 5, 1990. Through the Compass Asset Management Group,
the Adviser and certain other affiliates of Bancshares provide investment
advisory and management services
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<PAGE>
for the assets of individuals, pension and profit sharing plans,
endowments and foundations. As of December 31, 1997, the Compass Asset
Management Group had approximately $7.7 billion under administration
($5.08 billion of which was under administration by the Adviser), of
which the Compass Asset Management Group had discretion over
approximately $2.8 billion ($1.8 billion of which was comprised of assets
of accounts over which the Adviser exercised discretion).
As part of its regular banking operations, the Adviser may make loans to
public companies. Thus, it may be possible, from time to time, for a Fund
to hold or acquire the securities of issuers which are also lending
clients of the Adviser. The lending relationship will not be a factor in
the selection of securities.
Each Fund is managed by members of the Expedition Portfolio Management
Team and no one person is responsible for making investment decisions for
a Fund.
DISTRIBUTION OF FUND SHARES
SEI Investments Distribution Co. (the "Distributor") is the principal
distributor for shares of each Fund. The Distributor is a wholly-owned
subsidiary of SEI Investments Company ("SEI Investments") and is the principal
distributor for a number of investment companies. In connection with the sale
of Shares, the Distributor may, from time to time, offer certain items of
nominal value to any shareholder or investor.
DISTRIBUTION AND SHAREHOLDER SERVICING PLAN. Pursuant to the provisions of a
distribution and shareholder servicing plan adopted in accordance with the
Investment Company Act Rule 12b-1 (the "Plan"), each Fund may pay the
Distributor an amount computed at an annual rate of 1.00% of the average daily
net asset value of the Class B Shares of each Fund. Of the amounts paid under
the Plan, .75% may be used to finance any activity which is principally
intended to result in the sale of shares subject to the Plan and .25% may be
used for shareholder servicing activities.
The Distributor may select financial institutions such as banks, fiduciaries,
custodians for public funds, investment advisers, and broker/dealers,
including the Adviser and various other affiliates of Bancshares, to provide
sales and/or administrative services as agents for their clients or customers
who beneficially own Class B Shares of a Fund. Administrative services may
include, but are not limited to, the following functions: providing office
space, equipment, telephone facilities; and various personnel
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<PAGE>
including clerical, supervisory, and computer personnel as necessary or
beneficial to establish and maintain shareholder accounts and records;
processing purchase and redemption transactions and automatic investments of
client account cash balances; answering routine client inquiries regarding a
Fund; assisting clients in changing dividend options, account designations,
and addresses; and providing such other services as the Funds reasonably
request. The Plan is a compensation type plan. As such, a Fund makes no
payments to the Distributor except as described above. Therefore, a Fund does
not pay for unreimbursed expenses of the Distributor except as described
above.
ADMINISTRATION OF THE FUNDS
ADMINISTRATIVE SERVICES. SEI Investments Mutual Funds Services (the
"Administrator"), a wholly-owned subsidiary of SEI Investments provides each
Fund with certain administrative personnel and services necessary to operate
each Fund. Such services include shareholder servicing and certain legal and
accounting services. For these services the Administrator is entitled to a fee
which is calculated daily and paid monthly at an annual rate of .20% of each
Fund's average daily net assets payable from the assets of a Fund. The
Administrator may choose to voluntarily waive a portion of its fee. The
Administrator reserves the right, in its sole discretion, to terminate these
voluntary waivers at any time.
TRANSFER AGENT/SERVICING AGENT. State Street Bank and Trust Company (the
"Transfer Agent") and Boston Financial Data Services, Inc. act as transfer
agent and servicing agent, respectively for the Trust, and are entitled to
compensation payable from the assets of a Fund.
CUSTODIAN. Compass Bank, an Alabama state banking corporation, which is also
the Adviser, is custodian for the securities and cash of each Fund for which
it receives an annual fee of 0.02% of each Fund's daily net assets payable
from the assets of a Fund and is reimbursed for its out-of-pocket expenses.
NET ASSET VALUE
- -------------------------------------------------------------------------------
Each Fund's net asset value per share fluctuates. Net asset value for a class
of shares of a Fund is determined by dividing the sum of the market value of
all securities and other assets attributable to the class, less liabilities
attributable to the class, by the number of shares of the class outstanding.
Net asset values are determined as of the close of regular trading of the New
York Stock Exchange ("NYSE"), normally 3:00 p.m. (Central time) on days on
which the NYSE is open for business (a "Business Day").
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INVESTING IN SHARES
- -------------------------------------------------------------------------------
SHARE PURCHASES
Class B Shares are made available through personal investment officers or
other authorized registered representatives of Compass Brokerage, Inc., an
affiliate of the Adviser and a member of the NASD, or through the Transfer
Agent at 1-800-992-2085.
Class B Shares of each Fund may be purchased by investors on each Business
Day. The Trust reserves the right to reject any purchase request.
To purchase Class B Shares, an investor may call their Compass Brokerage, Inc.
personal investment officer or other authorized registered representative or
the Transfer Agent at 1-800-992-2085 to place an order. The minimum initial
investment for Class B Shares of each Fund is $1,000, except for an IRA
account, which requires a minimum initial investment of $500. Subsequent
investments must be in amounts of at least $100. Payment may be made either by
check or wire transfer of federal funds or by debiting a customer's account at
a Bancshares banking affiliate.
To purchase by check, the check must be included with the order and made
payable to "The Expedition Funds -------- Fund--Class B Shares." Purchase
orders received after the Fund's net asset value has been determined will be
priced at the next Business Day's net asset value. Orders are considered
received after payment by check is converted into federal funds. Third party
checks, credit cards, credit card checks and cash will not be accepted. When
purchases are made by check, redemptions will not be allowed until the
investment being redeemed has been in the account for 15 business days.
To purchase Class B Shares by wire, investors should call the Transfer Agent
at 1-800-992-2085 prior to purchase. Federal funds should be wired as follows:
State Street Bank & Trust Co., ABA # 011000028 for credit to DDA # 9905-303-5.
Further credit to: The Expedition Funds -------- Fund--Class B Shares; Re:
(Shareholder name and account number). Payment by wire must be received before
the Funds calculate their net asset value, normally 3:00 p.m. (Central time).
Payment for all orders must be received within three days of placing the
order. Shares can not be purchased by Federal Reserve wire on days when either
the NYSE or Federal Reserve is closed.
Under limited circumstances, arrangements may be made with Compass for same
day receipt of purchase orders, to earn dividends of the Bond Fund that day.
Investors interested in establishing such arrangements are requested to call
their trade in by 1:00 p.m. (Central time), and are
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reminded that the Fund does reserve the right to refuse any purchase request.
WHAT SHARES COST
Class B Shares are sold at their net asset value next determined after an
order is received, and are subject to a contingent deferred sales charge (See
"Sales Charges--Class B Shares").
SALES CHARGES--CLASS B SHARES
If you redeem your Class B shares within five years of purchase, you will pay
a contingent deferred sales charge at the rates set forth below. You will not
be required to pay the contingent deferred sales charge on any exchange of
your Class B shares of any Fund for Class B shares of any other Fund. See
"Exchanges." The charge is assessed on an amount equal to the lesser of the
then-current market value or the original cost of the shares being redeemed.
Accordingly, no sales charge is imposed on increases in net asset value above
the initial purchase price. In addition, no charge is assessed on shares
derived from reinvestment of dividends or capital gain distributions.
<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE AS A
PERCENTAGE OF DOLLAR
AMOUNT SUBJECT TO
YEAR SINCE PURCHASE CHARGE
- ------------------- --------------------
<S> <C>
First 5.00%
Second 4.00%
Third 3.00%
Fourth 2.00%
Fifth 1.00%
</TABLE>
In determining whether a particular redemption is subject to a contingent
deferred sales charge, it is assumed that the redemption is first of
Investment Shares acquired pursuant to the automatic conversion feature of
Class B Shares, second of Class B Shares held for over five years or Class B
Shares acquired pursuant to reinvestment of dividends or other distributions
and third of Class B Shares held longest during the five-year period, unless
otherwise directed by a shareholder or his or her representative. This method
should result in the lowest possible sales charge.
The contingent deferred sales charge is waived on redemption of shares (i)
following the death or disability (as defined in the Internal Revenue Code) of
a shareholder, or (ii) to the extent that the redemption represents a minimum
required distribution from an individual retirement account or other
retirement plan to a shareholder who has attained the age of 70 1/2. In
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addition, Class B shareholders may redeem [ %] of their shares per year,
without payment of a contingent deferred sales charge. A shareholder, or his
or her representative, must notify the Transfer Agent prior to the time of
redemption if such circumstances exist and the shareholder is eligible for
this waiver.
From time to time, some financial institutions, including Compass Brokerage,
Inc. and its affiliates, may be reallowed up to the entire contingent deferred
sales charge imposed on Class B shares. Firms that receive a reallowance of
the entire sales charge may be considered underwriters for purposes of federal
securities law.
The Distributor may, from time to time in its sole discretion, institute one
or more promotional incentive programs for dealers, which will be paid for by
the Distributor from any sales charge it receives or from any other source
available to it. Under any such program, the Distributor may provide
incentives, in the form of cash or other compensation, including merchandise,
airline vouchers, trips and vacation packages, to dealers selling shares of
the funds.
Any sales charge for Class B Shares sold other than through Compass Brokerage,
Inc. or other registered broker/dealers will be retained by the Distributor.
The Distributor may pay fees to banks out of the sales charge in exchange for
sales and/or administrative services performed on behalf of the bank's
customers in connection with the initiation of customer accounts and purchases
of shares of a Fund.
CONVERSION FEATURE. At the end of the period ending [five] years after the
beginning of the month in which the shares were issued, Class B shares will
automatically convert to Investment Shares and will no longer be subject to
the higher distribution and service fees of the Class B shares. Such
conversion will be on the basis of the relative net asset values of the two
classes.
SYSTEMATIC INVESTMENT PROGRAM
Once a Fund account has been opened, shareholders may add to their investment
of Class B Shares on a regular basis in a minimum amount of $100 for each
Fund. Under this program, funds may be automatically withdrawn periodically
from the shareholder's checking account at a Bancshares banking affiliate and
invested in Fund shares at the net asset value next determined after an order
is received by the Transfer Agent. A shareholder may apply for participation
in this program by calling their Compass Brokerage, Inc. personal investment
officer or other authorized registered representative or the Transfer Agent.
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DIVIDENDS
Dividends for the Bond Fund are declared daily and paid monthly and for the
Equity Fund declared and paid monthly to shareholders of record. Dividends
will be reinvested automatically in additional shares on payment dates without
a sales charge unless cash payments are requested by writing to Compass, the
Trust or the Transfer Agent as appropriate.
CAPITAL GAINS
Net capital gains realized by a Fund, if any, will be distributed at least
once every twelve months and will be reinvested automatically in additional
shares on payment dates without a sales charge unless cash payments are
requested by writing to Compass, the Trust or the Transfer Agent as
appropriate.
EXCHANGE PRIVILEGE
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CLASS B SHARES
Shareholders may exchange Class B Shares of a Fund for Class B Shares of any
other Expedition Fund. Shares of Funds with a sales charge may be exchanged at
net asset value for shares of other Funds with an equal sales charge or no
sales charge. Shares of Funds with no sales charge acquired by direct purchase
or reinvestment of dividends on such shares may be exchanged for shares of
funds sold with a sales charge at net asset value, plus the applicable sales
charge imposed by the fund whose shares are being purchased. Neither the Trust
nor either of the Funds imposes any additional fees on exchanges.
When an exchange is made from a Fund with a sales charge to a Fund with no
sales charge, the shares exchanged and additional shares which have been
purchased by reinvesting dividends on such shares retain the character of the
exchanged shares for purposes of exercising further exchange privileges; thus,
an exchange of such shares for shares of a fund with a sales charge would be
at net asset value.
For purposes of calculating the Class B shares' [five] year conversion period
or contingent deferred sales charge payable upon redemption, the holding
period of Class B shares of the "old" Fund and the holding period for Class B
shares of the "new" Fund are aggregated.
Shareholders of Class B Shares who exercise this exchange privilege must
exchange shares having a net asset value of at least $1,000. Prior to any
exchange, the shareholder must receive a copy of the current prospectus of the
participating fund into which an exchange is to be made.
Upon receipt of proper instructions and all necessary supporting documents
Class B Shares submitted for exchange will be redeemed at the
24
<PAGE>
next-determined net asset value. If the exchanging shareholder does not have
an account in the participating Fund whose shares are being acquired, a new
account will be established with the same registration, dividend and capital
gain options as the account from which shares are exchanged, unless otherwise
specified by the shareholder. In the case where the new account registration
is not identical to that of the existing account, a signature guarantee is
required. (See "Redeeming Shares--By Mail.") Exercise of this privilege is
treated as a redemption and new purchase for federal income tax purposes and,
depending on the circumstances, a short or long-term capital gain or loss may
be realized. The Trust reserves the right to modify or terminate the exchange
privilege at any time. Shareholders would be notified within 60 days prior to
any modification or termination.
EXCHANGE BY TELEPHONE. Shareholders may provide instructions for exchanges
between participating Funds by calling the Transfer Agent at 1-800-992-2085.
In addition, investors may exchange shares by calling their Compass Brokerage,
Inc. personal investment officer or other authorized registered representative
directly.
An authorization form permitting the Trust to accept telephone exchange
requests must first be completed. It is recommended that investors request
this privilege at the time of their initial application. If not completed at
the time of initial application, authorization forms and information on this
service can be obtained through the Transfer Agent, Compass Brokerage, Inc. or
a Compass Brokerage, Inc. personal investment officer or other authorized
registered representative.
Shares may be exchanged by telephone only between fund accounts having
identical shareholder registrations. Exchange instructions given by telephone
may be electronically recorded. If reasonable procedures are not followed by
the Trust, it may be liable for losses due to unauthorized or fraudulent
telephone instructions.
Telephone exchange instructions must be received before 3:00 p.m. (Central
time) for shares to be exchanged the same day.
WRITTEN EXCHANGE. A shareholder wishing to make an exchange of Class B Shares
by written request may do so by sending it to: The Expedition Funds, P.O. Box
8010, Boston, Massachusetts 02266-8010. In addition, an investor may exchange
shares by sending a written request to their Compass Brokerage, Inc. personal
investment officer or other authorized registered representative directly.
25
<PAGE>
REDEEMING SHARES
- -------------------------------------------------------------------------------
CLASS B SHARES
Each Fund redeems shares at their net asset value next determined after
receipt of the redemption request, reduced by any applicable contingent
deferred sales charge for Class B Shares. Redemptions will be made on days on
which the Funds compute their net asset values. A redemption request received
after a Fund's net asset value has been determined will be priced at the next
Business Day's net asset value. Telephone or written requests for redemptions
of Class B Shares must be received in proper form and can be made through a
Compass Brokerage, Inc. personal investment officer or other authorized
registered representative or through the Transfer Agent.
BY TELEPHONE. Shareholders may redeem Class B Shares of the Funds by
telephoning 1-800-992-2085. An authorization form permitting telephone
redemption requests must be completed. For calls received before 3:00 p.m.
(Central time), proceeds will normally be deposited into the shareholder's
account, if any, at a Bancshares banking affiliate or a check will be mailed
to the address of record on the next business day. In no event will it take
more than seven days for proceeds to be wired or a check to be mailed after a
proper request for redemption has been received. If, at any time, the Trust
shall determine it necessary to terminate or modify this method of redemption,
shareholders would be promptly notified.
None of Compass Asset Management, Compass Brokerage, Inc., the Transfer Agent
nor the Trust will be responsible for any loss, liability, cost or expense for
acting upon wire or telephone instructions that it reasonably believes to be
genuine. The Trust, Compass Asset Management, Compass Brokerage, Inc., and the
Transfer Agent will each employ reasonable procedures to confirm that
instructions communicated by telephone are genuine, including requiring a form
of personal identification prior to acting upon instructions received by
telephone and recording telephone instructions. Such procedures may include
taping of telephone conversations.
If market conditions are extraordinarily active or other extraordinary
circumstances exist, and you experience difficulties placing redemption orders
by telephone, you may consider placing your order by mail.
BY MAIL. Shareholders may redeem Class B Shares of a Fund by sending a written
request. The written request should include the shareholder's name, the Fund
name, the account number, and the share or dollar amount requested. Investors
redeeming Class B Shares through the Transfer Agent
26
<PAGE>
should mail written requests to: The Expedition Funds--Class B Shares, P.O.
Box 8010, Boston, Massachusetts 02266-8010.
SIGNATURES. Shareholders requesting a redemption of any amount to be sent to
an address other than that on record or a redemption payable other than to the
shareholder of record must have their signatures guaranteed by:
. a trust company or commercial bank whose deposits are insured by the
Bank Insurance Fund ("BIF"), which is administered by the FDIC;
. a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchange;
. a savings bank or savings association whose deposits are insured by the
Savings Association Insurance Fund ("SAIF"), which is administered by
the FDIC; or
. any other "eligible guarantor institution," as defined in the
Securities Exchange Act of 1934.
The Trust does not accept signatures guaranteed by a notary public.
The Trust and the Transfer Agent adopted standards for accepting signature
guarantees from the above institutions. The Trust may elect in the future to
limit eligible signature guarantors to institutions that are members of a
signature guarantee program. Redemptions of $40,000 or greater for a Fund must
be in writing and a signature guarantee must accompany the request. The Trust
and the Transfer Agent reserve the right to amend these standards at any time
without notice.
Normally, a check for the proceeds is mailed to the shareholder within one
business day, but in no event more than seven days, after receipt of a proper
written redemption request.
SYSTEMATIC WITHDRAWAL PLAN
Shareholders of Class B Shares who desire to receive monthly or quarterly
payments of a predetermined amount may take advantage of the Systematic
Withdrawal Plan. Under this program, Class B Shares are redeemed to provide
for monthly or quarterly withdrawal payments in an amount directed by the
shareholder. Depending upon the amount of the withdrawal payments, the amount
of dividends paid and capital gains distributions, and the fluctuation of the
net asset value of shares redeemed under this program, redemptions may reduce,
and eventually deplete the shareholder's investment in a Fund. For this
reason, payments under this program should not be considered as yield or
income on the shareholder's investment in a Fund. To be eligible to
participate in this program, a shareholder must have invested at least $10,000
in a Fund (at current offering price).
27
<PAGE>
A shareholder may apply for participation in this program through Compass
Brokerage, Inc. or the Transfer Agent. Because automatic withdrawals of Class
B Shares, in an amount which exceeds [--]% of the value of the shareholder's
account at the time the shareholder elects a Systematic Withdrawal Plan, will
be subject to a contingent deferred sales charge, it may not be in the best
interests of Class B shareholders to participate in a Systematic Withdrawal
Plan. Payment of the designated withdrawal amount can be made on any day of
the month the shareholder specifies, except the thirtieth or thirty-first day
of each month in which a payment is to be made. No contingent deferred sales
charge will be imposed on withdrawals made under a Systematic Withdrawal Plan,
provided that the amounts withdrawn under such a plan do not exceed on an
annual basis [--]% of the account value at the time the shareholder elects to
participate in the Systematic Withdrawal Plan. Systematic Withdrawal Plans
with respect to shares subject to a contingent deferred sales charge that
exceed on an annual basis [--]% of such account will be subject to a
contingent deferred sales charge on the amounts exceeding [--]% of the account
value at the time the shareholder elects to participate in the Systematic
Withdrawal Plan.
Under a Systematic Withdrawal Plan, all shares are to be held by the Transfer
Agent and all dividends and distributions are reinvested in shares of the
applicable Fund by the Transfer Agent. To provide funds for payments made
under the Systematic Withdrawal Plan, the Transfer Agent redeems sufficient
full and fractional shares at their net asset value in effect at the time of
each such redemptions.
Payments under a Systematic Withdrawal Plan constitute taxable events. Since
such payments are funded by the redemption of shares, they may result in a
return of capital and in capital gains or losses, rather than in ordinary
income.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Trust may
redeem shares in any Class B Shares account and pay the proceeds to the
shareholder if the account balance falls below the required minimum value of
$1,000. Before Class B Shares are redeemed to close an account, the
shareholder is notified in writing and allowed 30 days to purchase additional
shares to meet the minimum requirement. These requirements do not apply,
however, if the balance falls below the above-stated minimum because of
changes in a Fund's net asset value.
28
<PAGE>
SHAREHOLDER INFORMATION
- -------------------------------------------------------------------------------
VOTING RIGHTS
Each share of a Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of each portfolio
in the Trust have equal voting rights, except that in matters affecting only a
particular portfolio or class, only shares of that portfolio or class are
entitled to vote.
As used in this Prospectus, a "vote of a majority of the outstanding shares"
of a Fund means, with respect to the approval of an investment advisory
agreement, sub-advisory agreement, a change in a fundamental investment
limitation or with respect to a material increase in 12b-1 distribution costs,
the lesser of (a) more than 50% of the outstanding shares of a Fund, or (b) at
least 67% of the shares of a Fund present at a meeting at which the holders of
more than 50% of the outstanding shares of such Fund are represented in person
or by proxy.
As a Massachusetts business trust, the Trust is not required to hold annual
shareholder meetings. Shareholder approval will be sought only for certain
changes in the Trust or a Fund's operation and for the election of Trustees
under certain circumstances.
Trustees may be removed by the Trustees or by shareholders at a special
meeting. A special meeting of the shareholders shall be called by the Trustees
upon the written request of shareholders owning at least 10% of the Trust's
outstanding shares.
As of September 8, 1998, Compass Bank owned beneficially or of record 97.89%
of the Bond Fund's shares and 91.45% of the Equity Fund's shares. Each of the
foregoing interests is considered a controlling interest as defined by the
Investment Company Act of 1940.
EFFECT OF BANKING LAWS
- -------------------------------------------------------------------------------
The Glass-Steagall Act and other banking laws and regulations presently
prohibit a bank holding company registered under the Bank Holding Company Act
of 1956 or any affiliate thereof from sponsoring, organizing or controlling a
registered, open-end investment company continuously engaged in the issuance
of its shares, and from issuing, underwriting, selling or distributing
securities in general. Such laws and regulations do not prohibit such a
holding company or affiliate from acting as investment adviser, transfer
agent, or custodian to such an investment company or from purchasing shares of
such a company as agent for and upon the order of their customers.
29
<PAGE>
The Adviser, Bancshares and certain of Bancshares' affiliates are subject to
certain such banking laws and regulations. They believe, based on the advice
of their counsel, that they may perform those services for the Funds
contemplated by any existing agreement entered into with the Trust without
violating those laws or regulations. Changes in either federal or state
statutes and regulations relating to the permissible activities of banks and
their subsidiaries or affiliates, as well as further judicial or
administrative decisions or interpretations of present or future statutes and
regulations, could prevent these entities from continuing to perform all or a
part of the above services. If this happens, the Trustees would consider
alternative means of continuing available services. It is not expected that
shareholders would suffer any adverse financial consequences as a result of
any of these occurrences.
TAX INFORMATION
- -------------------------------------------------------------------------------
FEDERAL INCOME TAX
A Fund will pay no federal income tax because it expects to meet requirements
of the Internal Revenue Code applicable to regulated investment companies and
to receive the special tax treatment afforded to such companies.
Unless otherwise exempt, shareholders are required to pay federal income tax
on any dividends and other distributions. This applies whether dividends and
distributions are received in cash or as additional shares.
STATE AND LOCAL TAXES. Shareholders are urged to consult their own tax
advisers regarding the status of their accounts under state and local tax
laws.
PERFORMANCE INFORMATION
- -------------------------------------------------------------------------------
From time to time, each Fund advertises its total return and the Bond Fund
advertises its yield.
Total return represents the change, over a specified period of time, in the
value of an investment in a Fund after reinvesting all income and capital
gains distributions. It is calculated by dividing that change by the initial
investment and is expressed as a percentage.
The yield of the Bond Fund is calculated by dividing the net investment income
per share (as defined by the Securities and Exchange Commission) earned by the
Fund over a thirty-day period by the maximum offering price per share of the
Fund on the last day of the period. This number is then
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<PAGE>
annualized using semi-annual compounding. The yield does not necessarily
reflect income actually earned by the Fund and, therefore, may not correlate
to the dividends or other distributions paid to shareholders.
From time to time, advertisements for the Funds may refer to ratings,
rankings, and other information in certain financial publications and/or
compare the Funds' performance to certain indices.
31
<PAGE>
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
The Expedition Funds One Freedom Valley Road
Oaks, Pennsylvania 19456
- ------------------------------------------------------------------------------------------------------------
Distributor
SEI Investments Distribution Co. One Freedom Valley Road
Oaks, Pennsylvania 19456
- ------------------------------------------------------------------------------------------------------------
Investment Adviser and Custodian
Compass Bank 15 S. 20th Street
Birmingham, Alabama 35233
- ------------------------------------------------------------------------------------------------------------
Transfer Agent and Servicing Agent
Transfer Agent Servicing Agent
State Street Bank and Trust Company Boston Financial Data Services, Inc.
225 Franklin Street Two Heritage Drive
Boston, Massachusetts 02110 Quincy, Massachusetts 02171
- ------------------------------------------------------------------------------------------------------------
Independent Auditors
Deloitte & Touche LLP 117 Campus Drive
Princeton, New Jersey 08540
- ------------------------------------------------------------------------------------------------------------
Counsel
Morgan, Lewis & Bockius LLP 1800 M Street, N.W.
Washington, D.C. 20036
- ------------------------------------------------------------------------------------------------------------
</TABLE>
32
<PAGE>
Expedition Equity Fund
Expedition Bond Fund
__________, 1998
Distributor:
SEI Investments Distribution Co.
One Freedom Valley Road
Oaks, Pennsylvania 19456
Investment Adviser and Custodian:
Compass Bank
15 S. 20th Street
Birmingham, Alabama 35233
Transfer Agent:
State Street Bank and Trust Company
225 Franklin Street
Boston Massachusetts 02110
Servicing Agent:
Boston Financial Data Services, Inc.
Two Heritage Drive
Quincy, Massachusetts 02171
Independent Auditors:
Deloitte & Touche LLP
117 Campus Drive
Princeton, New Jersey 08540
Counsel:
Morgan, Lewis & Bockius LLP
1800 M Street, N.W.
Washington, D.C. 20036
<PAGE>
THE EXPEDITION BOND FUND
THE EXPEDITION EQUITY FUND
(PORTFOLIOS OF THE EXPEDITION FUNDS)
STATEMENT OF ADDITIONAL INFORMATION
CLASS B SHARES
This Statement of Additional Information is not a prospectus. It provides
information about the activities and operations of Class B Shares of the Bond
Fund and the Equity Fund, separate series of The Expedition Funds (the "Trust")
in addition to the information provided in the Trust's prospectus dated
__________, 1998 (the "Prospectus") and should be read in conjunction with the
Prospectus. The Prospectus may be obtained by writing to the Trust or calling
toll-free 1-800-992-2085.
Statement dated __________, 1998
<PAGE>
TABLE OF CONTENTS
General Information About the Funds...................... 1
Investment Objectives and Policies....................... 1
Investment Limitations................................... 10
The Expedition Funds Management.......................... 13
Investment Advisory Services............................. 18
Brokerage Transactions................................... 18
Other Services........................................... 20
Purchasing Shares........................................ 22
Determining Net Asset Value.............................. 23
Redeeming Shares......................................... 24
Massachusetts Partnership Law............................ 25
Tax Status............................................... 25
Fund Ownership........................................... 26
Total Return............................................. 27
Yield.................................................... 28
Performance Comparisons.................................. 28
Financial Statements..................................... 31
<PAGE>
GENERAL INFORMATION ABOUT THE FUNDS
- ------------------------------------------
Each Fund is a portfolio in The Expedition Funds (the "Trust"). The Trust,
formerly The Starburst Funds, was established as a Massachusetts business trust
under a Declaration of Trust dated August 7, 1989.
Shares of The Expedition Bond Fund (the "Bond Fund") and The Expedition Equity
Fund (the "Equity Fund") are offered in three classes, known as the Investment
Shares, Institutional Shares and Class B Shares. This Statement of Additional
Information relates only to Class B Shares of the Bond Fund and the Equity Fund.
Each of the Bond and Equity Funds are referred to herein as a "Fund" and
collectively as the "Funds." Capitalized terms not defined herein are defined
in the Prospectus. No investment in shares of a Fund should be made without
first reading the Fund's prospectus carefully.
INVESTMENT OBJECTIVES AND POLICIES
- ------------------------------------------
INVESTMENT OBJECTIVES
The Bond Fund's investment objective is to provide current income. The Equity
Fund's investment objective is to provide growth of capital, with a secondary
objective of income. A Fund's investment objective cannot be changed without
approval of shareholders.
INVESTMENT POLICIES
The investment policies described below may be changed by the Board of Trustees
(the "Trustees") without shareholder approval. Shareholders will be notified
before any material change in these policies becomes effective.
RATINGS
A nationally recognized statistical rating organizations' ("NRSROs") highest
rating category is determined without regard for subcategories and gradations.
For example, securities rated A-1 or A-1+ by Standard & Poor's Ratings Group
("S&P"), Prime-1 by Moody's Investors Service, Inc. ("Moody's"), or F-1 (+ or -)
by Fitch Investors Service, Inc. ("Fitch") are all considered rated in the
highest short-term rating category.
U.S. GOVERNMENT OBLIGATIONS
The types of U.S. Government obligations in which the Bond Fund may invest
generally include direct obligations of the U.S. Treasury (such as U.S. Treasury
bills, notes, and bonds) and obligations issued or guaranteed by U.S. Government
agencies or instrumentalities. These securities are backed by:
1
<PAGE>
. the full faith and credit of the U.S. Treasury;
. the issuer's right to borrow from the U.S. Treasury;
. the discretionary authority of the U.S. government to purchase certain
obligations of agencies or instrumentalities; or
. the credit of the agency or instrumentality issuing the obligations.
Examples of agencies and instrumentalities which may not always receive
financial support from the U.S. government are:
. Farm Credit Banks;
. National Bank for Cooperatives;
. Federal Home Loan Banks;
. Farmers Home Administration; and
. Fannie Mae.
PRIVATELY ISSUED MORTGAGE-RELATED SECURITIES
Privately issued mortgage-related securities generally represent an ownership
interest in federal agency mortgage pass through securities such as those issued
by Government National Mortgage Association. The terms and characteristics of
the mortgage instruments may vary among pass through mortgage loan pools.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
These transactions are made to secure what is considered to be an advantageous
price or yield for a Fund. No fees or other expenses, other than normal
transaction costs, are incurred. However, liquid assets of the appropriate Fund
sufficient to make payment for the securities to be purchased are segregated on
the Fund's records at the trade date. These assets are marked to market daily
and are maintained until the transaction has been settled. Each Fund does not
intend to engage in when-issued and delayed delivery transactions to an extent
that would cause the segregation of more than 20% of the total value of its
assets.
FUTURES AND OPTIONS TRANSACTIONS
Each of the Bond and Equity Funds may attempt to hedge all or a portion of its
portfolio by buying and selling financial futures contracts and options on
financial futures contracts.
2
<PAGE>
FINANCIAL FUTURES CONTRACTS
A futures contract is a firm commitment by two parties, the seller who
agrees to make delivery of the specific type of security called for in
the contract ("going short") and the buyer who agrees to take delivery
of the security ("going long") at a certain time in the future.
In the fixed income securities market, price moves inversely to
interest rates. A rise in rates means a drop in price. Conversely, a
drop in rates means a rise in price. In order to hedge its holdings
of fixed income securities against a rise in market interest rates,
the Bond Fund could enter into contracts to deliver securities at a
predetermined price (i.e., "go short") to protect itself against the
possibility that the prices of its fixed income securities may decline
during the Fund's anticipated holding period. The Bond Fund would "go
long" (agree to purchase securities in the future at a predetermined
price) to hedge against a decline in market interest rates.
PURCHASING PUT OPTIONS ON FINANCIAL FUTURES CONTRACTS
Each Fund may purchase listed put options on financial futures
contracts. Unlike entering directly into a futures contract, which
requires the purchaser to buy a financial instrument on a set date at
a specified price, the purchase of a put option on a futures contract
entitles (but does not obligate) its purchaser to decide on or before
a future date whether to assume a short position at the specified
price.
A Fund would purchase put options on futures to protect portfolio
securities against decreases in value resulting from an anticipated
increase in market interest rates. Generally, if the hedged portfolio
securities decrease in value during the term of an option, the related
futures contracts will also decrease in value and the option will
increase in value. In such an event, a Fund will normally close out
its option by selling an identical option. If the hedge is
successful, the proceeds received by the Fund upon the sale of the
second option will be large enough to offset both the premium paid by
the Fund for the original option plus the realized decrease in value
of the hedged securities.
Alternatively, a Fund may exercise its put option. To do so, it could
simultaneously enter into a futures contract of the type underlying
the option (for a price less than the strike price of the option) and
exercise the option. The Fund would then deliver the futures contract
in return for payment of the strike price. If the Fund neither closes
out nor exercises an option, the option will expire on the date
provided in the option contract, and the premium paid for the contract
will be lost.
3
<PAGE>
WRITING CALL OPTIONS ON FINANCIAL FUTURES CONTRACTS
In addition to purchasing put options on futures, each Fund may write
listed call options on futures contracts to hedge its portfolio
against an increase in market interest rates. When a Fund writes a
call option on a futures contract, it is undertaking the obligation of
assuming a short futures position (selling a futures contract) at the
fixed strike price at any time during the life of the option if the
option is exercised. As market interest rates rise, causing the
prices of futures to go down, the Fund's obligation under a call
option on a future (to sell a futures contract) costs less to fulfill,
causing the value of the Fund's call option position to increase.
Prior to the expiration of a call written by the Fund, or exercise of
it by the buyer, the Fund may close out the option by buying an
identical option. If the hedge is successful, the cost of the second
option will be less than the premium received by the Fund for the
initial option. The net premium income of the Fund will then offset
the decrease in value of the hedged securities.
WRITING PUT OPTIONS ON FINANCIAL FUTURES CONTRACTS
Each Fund may write listed put options on financial futures contracts.
When a Fund writes a put option on a futures contract, it receives a
premium for undertaking the obligation to assume a long futures
position (buying a futures contract) at a fixed price at any time
during the life of the option. As stock prices rise or interest rates
decrease, the market price of the underlying futures contract normally
increases. As the market value of the underlying futures contract
increases, the buyer of the put option has less reason to exercise the
put because the buyer can sell the same futures contract at a higher
price in the market. The premium received by a Fund can then be used
to offset the higher prices of portfolio securities to be purchased in
the future due to the increase in market prices or decrease in
interest rates.
Prior to the expiration of the put option, or its exercise by the
buyer, a Fund may close out the option by buying an identical option.
If the hedge is successful, the cost of buying the second option will
be less than the premium received by the Fund for the initial option.
PURCHASING CALL OPTIONS ON FINANCIAL FUTURES CONTRACTS
An additional way in which a Fund may hedge against decreases in
market interest rates is to buy a listed call option on a financial
futures contract. When a Fund purchases a call option on a futures
contract, it is purchasing the right (not the obligation) to assume a
long futures position (buy a futures contract) at a fixed
4
<PAGE>
price at any time during the life of the option. As market interest
rates fall, the value of the underlying futures contract will normally
increase, resulting in an increase in value of a Fund's option
position. When the market price of the underlying futures contract
increases above the strike price plus premium paid, the Fund could
exercise its option and buy the futures contract below market price.
Prior to the exercise or expiration of the call option, a Fund could
sell an identical call option and close out its position. If the
premium received upon selling the offsetting call is greater than the
premium originally paid, the Fund has completed a successful hedge.
LIMITATIONS ON OPEN FUTURES POSITIONS
A Fund will not maintain open positions in futures contracts it has
sold or call options it has written on futures contracts if, in the
aggregate, the value of the open positions (marked to market) exceeds
the current market value of its securities portfolio plus or minus the
unrealized gain or loss on those open positions, adjusted for the
correlation of volatility between the hedged securities and the
futures contracts. If this limitation is exceeded at any time, the
Fund will take prompt action to close out a sufficient number of open
contracts to bring its open futures and options positions within this
limitation.
"MARGIN" IN FUTURES TRANSACTIONS
Unlike the purchase or sale of a security, a Fund does not pay or
receive money upon the purchase or sale of a futures contract.
Rather, a Fund is required to deposit an amount of "initial margin" in
cash or U.S. Treasury bills with its custodian (or the broker, if
legally permitted). The nature of initial margin in futures
transactions is different from that of margin in securities
transactions in that futures contract initial margin does not involve
the borrowing of funds by the Fund to finance the transactions.
A futures contract held by a Fund is valued daily at the official
settlement price of the exchange on which it is traded. Each day the
Fund pays or receives cash, called "variation margin," equal to the
daily change in value of the futures contract. This process is known
as "marking to market." Variation margin does not represent a
borrowing or loan by the Fund but is instead settlement between the
Fund and the broker of the amount one would owe the other if the
futures contract expired. In computing its daily net asset value, the
Fund will mark-to-market its open futures positions.
Each Fund is also required to deposit and maintain margin when it
writes call options on futures contracts.
5
<PAGE>
PURCHASING PUT AND CALL OPTIONS
Each Fund may purchase put and call options. A put option gives a
Fund, in return for a premium, the right to sell the underlying
security to the writer (seller) at a specified price during the term
of the option. A call option gives the Fund, in return for a premium,
the right to buy the underlying security from the seller.
WRITING PUT AND CALL OPTIONS
Each Fund may write covered put and call options to generate income.
As writer of a call option, a Fund has the obligation upon exercise of
the option during the option period to deliver the underlying security
upon payment of the exercise price. As a writer of a put option, a
Fund has the obligation to purchase a security from the purchaser of
the option upon the exercise of the option.
A Fund may only write call options either on securities held in its
portfolio or on securities which it has the right to obtain without
payment of further consideration (or has segregated cash in the amount
of any additional consideration). In the case of put options, a Fund
will segregate cash or liquid assets with a value equal to or greater
than the exercise price of the underlying securities.
LENDING OF PORTFOLIO SECURITIES
The collateral received when a Fund lends portfolio securities must be valued
daily and, should the market value of the loaned securities increase, the
borrower must furnish additional collateral to the Fund. During the time
portfolio securities are on loan, the borrower pays the Fund any dividends or
interest paid on such securities. Loans are subject to termination at the
option of the Fund or the borrower. The Funds may pay reasonable administrative
and custodial fees in connection with a loan and may pay a negotiated portion of
the interest earned on the cash or equivalent collateral to the borrower or
placing broker.
RESTRICTED SECURITIES
Each Fund may invest in restricted securities. Restricted securities are any
securities in which a Fund may otherwise invest pursuant to its investment
objective and policies but which are subject to restriction on resale under
federal securities law. The ability of the Trustees to determine the liquidity
of certain restricted securities is permitted under an SEC Staff position set
forth in the adopting release for Rule 144A under the Securities Act of 1933
(the "Rule"). The Rule is a non-exclusive, safe-harbor for certain secondary
market transactions involving securities subject to restrictions on resale under
federal securities laws. The Rule provides an exemption from registration for
resale of otherwise restricted securities to qualified institutional buyers.
The Rule was expected to further enhance the liquidity of the secondary market
for securities eligible for resale under Rule 144A. The Trust believes that the
Staff of the SEC has
6
<PAGE>
left the question of determining the liquidity of all restricted securities
(eligible for resale under Rule 144A) for determination of the Trust's Board of
Trustees. The Board of Trustees considers the following criteria in determining
the liquidity of certain restricted securities:
. the frequency of trades and quotes for the security;
. the number of dealers willing to purchase or sell the security and the
number of other potential buyers;
. dealer undertakings to make a market in the security; and
. the nature of the security and the nature of the marketplace trades.
REPURCHASE AGREEMENTS
Each Fund requires the Fund's custodian to take possession of the securities
subject to repurchase agreements, and these securities are marked to market
daily. To the extent that the original seller does not repurchase the
securities from a Fund, the Fund could receive less than the repurchase price on
any sale of such securities. In the event that such a defaulting seller filed
for bankruptcy or became insolvent, disposition of such securities by a Fund
might be delayed pending court action. The Funds believe that under the regular
procedures normally in effect for custody of the Funds' portfolio securities
subject to repurchase agreements, a court of competent jurisdiction would rule
in favor of the Funds and allow retention or disposition of such securities. A
Fund will only enter into repurchase agreements with banks and other recognized
financial institutions such as broker/dealers which are deemed by the Adviser to
be creditworthy pursuant to guidelines established by the Trustees.
ASSET BACKED SECURITIES
Asset Backed Securities in which the Bond Fund may invest are securities
collateralized by shorter term loans such as automobile loans, home equity
loans, computer leases, or credit card receivables. The payments from the
collateral are passed through to the security holder. The collateral behind
asset-backed securities tends to have prepayment rates that do not vary with
interest rates. In addition the short-term nature of the loans reduces the
impact of any change in prepayment level. Due to amortization, the average life
for these securities is also the conventional proxy for maturity.
Special Risks: Due to the possibility that prepayments (on automobile loans and
other collateral) will alter the cash flow on asset-backed securities, it is not
possible to determine in advance the actual final maturity date or average life.
Faster prepayment will shorten the average life and slower prepayments will
lengthen it. However, it is possible to determine what the range of that
movement could be and to calculate the effect that it will have on the price of
the security. In
7
<PAGE>
selecting these securities, the Adviser will look for those securities that
offer higher yield to compensate for any variation in average maturity.
REVERSE REPURCHASE AGREEMENTS
The Bond Fund may enter into reverse repurchase agreements. These transactions
are similar to borrowing cash. In a reverse repurchase agreement the Bond Fund
transfers possession of a portfolio instrument to another person, such as a
financial institution, broker or dealer, in return for a percentage of the
instrument's market value in cash, and agrees that on a stipulated date in the
future the Fund will repurchase the portfolio instrument by remitting the
original consideration plus interest at an agreed upon rate.
The use of reverse repurchase agreements may enable the Bond Fund to avoid
selling portfolio instruments at a time when a sale may be deemed to be
disadvantageous, but the ability to enter into reverse repurchase agreements
does not ensure that the Fund will be able to avoid selling portfolio
instruments at a disadvantageous time.
When effecting reverse repurchase agreements, liquid assets of the Bond Fund, in
a dollar amount sufficient to make payment for the obligations to be purchased,
are segregated at the trade date. These assets are marked to market daily and
maintained until the transaction is settled.
STANDARD & POOR'S DEPOSITARY RECEIPTS ("SPDRS")
The Equity Fund may invest in SPDRS, which are securities that represent
ownership in a unit investment trust (a "UIT") that holds a portfolio of common
stocks designed to track the performance of the Standard & Poor's 500 Composite
Stock Price Index (the "S&P Index"). SPDRS may be obtained from the UIT directly
or purchased in the secondary market. SPDRs are generally listed on the
American Stock Exchange.
The UIT will issue SPDRs in aggregations of 50,000 known as "Creation Units" in
exchange for a "Portfolio Deposit" consisting of (a) a portfolio of securities
substantially similar to the component securities ("Index Securities") of the
S&P Index, (b) a cash payment equal to a pro rata portion of the dividends
accrued on the UIT's portfolio securities since the last dividend payment by the
UIT, net of expenses and liabilities, and (c) a cash payment or credit
("Balancing Amount") designed to equalize the net asset value of the S&P Index
and the net asset value of a Portfolio Deposit.
SPDRs are not individually redeemable, except upon termination of the UIT. To
redeem, a Fund must accumulate enough SPDRs to reconstitute a Creation Unit.
The liquidity of small holdings of SPDRs, therefore, will depend upon the
existence of a secondary market. Upon redemption of a Creation Unit, the Equity
Fund will receive Index Securities and cash identical to the Portfolio Deposit
required of an investor wishing to purchase a Creation Unit that day.
8
<PAGE>
The price of SPDRs is derived and based upon the securities held by the UIT.
Accordingly, the level of risk involved in the purchase or sale of a SPDR is
similar to the risk involved in the purchase or sale of traditional common
stock, with the exception that the pricing mechanism for SPDRs is based on a
basket of stocks. Disruptions in the markets for the securities underlying
SPDRs purchased or sold by the Equity Fund could result in losses on SPDRs.
Trading in SPDRs involves risks similar to those risks, described above under
"Options," involved in the writing of options on securities.
AMERICAN DEPOSITORY RECEIPTS ("ADRS")
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. Generally, ADRs are
designed for trading in the U.S. securities market. ADRs 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 receipt's's underlying
security. The Equity Fund may invest in ADRs traded on registered exchanges or
on NASDAQ and may also invest in ADRs not traded on an established exchange.
While the Fund typically invests in sponsored ADRs, joint arrangements between
the issuer and the depositary, some ADRs may be unsponsored. Unlike sponsored
ADRs, the holders of unsponsored ADRs bear all expenses and the depositary may
not be obligated to distribute shareholder communications or to pass through the
voting rights on the deposited securities.
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
specific period.
FOREIGN SECURITIES
Foreign securities 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 exchange rates, or the adoption of other
foreign governmental restrictions which might adversely affect the payment of
principal and interest on such obligations. 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 U.S. banks and
foreign banks may be
9
<PAGE>
subject to less stringent reserve requirements than those applicable to domestic
branches of U.S. banks.
PORTFOLIO TURNOVER
The Equity Fund will not attempt to set or meet a portfolio turnover rate since
any turnover would be incidental to transactions undertaken in an attempt to
achieve the Fund's investment objective. The estimated annual rate of
portfolio turnover will not exceed 100%. For the fiscal year ended October 31,
1997, the Equity Fund's portfolio turnover rate was 64.68%. For the fiscal
years ended October 31, 1997 and 1996, the Bond Fund's portfolio turnover rates
were 69.09% and 77% respectively.
INVESTMENT LIMITATIONS
- --------------------------------------------------------------------------------
FUNDAMENTAL LIMITATIONS
The following are fundamental limitations of the Equity and Bond Funds.
Fundamental investment limitations cannot be changed without shareholder
approval.
DIVERSIFICATION OF INVESTMENTS
With respect to 75% of the value of each Fund's total assets, a Fund will not
purchase securities of any one issuer (other than cash, cash items and
securities issued or guaranteed by the government of the United States or its
agencies or instrumentalities) if as a result more than 5% of the value of its
total assets would be invested in the securities of that issuer.
Under this limitation, as it relates to the Bond Fund, each governmental
subdivision, including states and the District of Columbia, territories,
possessions of the United States, or their political subdivisions, agencies,
authorities, instrumentalities, or similar entities, will be considered a
separate issuer if its assets and revenues are separate from those of the
governmental body creating it and the security is backed only by its own assets
and revenues.
BUYING ON MARGIN
A Fund will not purchase any securities on margin, but may obtain such short-
term credits as are necessary for clearance of transactions. The deposit or
payment by a Fund of initial or variation margin in connection with financial
futures contracts or related options transactions is not considered the purchase
of a security on margin.
ISSUING SENIOR SECURITIES AND BORROWING MONEY
A Fund will not issue senior securities except that a Fund may borrow money and
the Bond Fund may engage in reverse repurchase agreements in amounts up to one-
third of the value of its net assets, including the amounts borrowed.
10
<PAGE>
A Fund will not borrow money or, with respect to the Bond Fund, engage in
reverse repurchase agreements for investment leverage, but rather as a
temporary, extraordinary, or emergency measure or to facilitate management of
the portfolio by enabling a Fund to meet redemption requests when the
liquidation of portfolio securities is deemed to be inconvenient or
disadvantageous. The Fund will not purchase any securities while borrowings in
excess of 5% of its total assets are outstanding. During the period any reverse
repurchase agreements are outstanding, but only to the extent necessary to
assure completion of the reverse repurchase agreements, the Bond Fund will
restrict the purchase of portfolio instruments to money market instruments
maturing on or before the expiration date of the reverse repurchase agreements.
PLEDGING ASSETS
A Fund will not mortgage, pledge, or hypothecate any assets except to secure
permitted borrowings. In these cases, it may pledge assets having a market
value not exceeding the lesser of the dollar amounts borrowed or 10% of the
value of total assets at the time of the borrowing. Neither the deposit of
underlying securities and other assets in escrow in connection with the writing
of put or call options on securities nor margin deposits for the purchase and
sale of financial futures contracts and related options are deemed to be a
pledge.
INVESTING IN REAL ESTATE
A Fund will not buy or sell real estate including limited partnership interests,
although it may invest in securities of companies whose business involves the
purchase or sale of real estate or in securities which are secured by real
estate or interests in real estate.
INVESTING IN COMMODITIES
A Fund will not purchase or sell commodities, except that a Fund may purchase
and sell financial futures contracts and related options.
UNDERWRITING
A Fund will not underwrite any issue of securities, except as it may be deemed
to be an underwriter under the Securities Act of 1933, as amended, in connection
with the sale of securities in accordance with its investment objective,
policies, and limitations.
LENDING CASH OR SECURITIES
A Fund will not lend any of its assets except portfolio securities up to one-
third of the value of its total assets. (This shall not prevent the purchase or
holding of U.S. Government securities, repurchase agreements covering U.S.
Government securities, or other transactions which are permitted by a Fund's
investment objective and policies.)
11
<PAGE>
SELLING SHORT
A Fund will not sell securities short.
NON-FUNDAMENTAL LIMITATIONS
The following limitations may be changed by the Trustees without shareholder
approval. Shareholders will be notified before any material change in these
limitations becomes effective.
INVESTING IN ILLIQUID SECURITIES
A Fund will not invest more than 15% of the value of its net assets in
securities which are not readily marketable or which are otherwise considered
illiquid, including over-the-counter options and also including repurchase
agreements providing for settlement in more than seven days after notice.
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
A Fund will limit its respective investment in other investment companies to no
more than 3% of the total outstanding voting stock of any investment company,
invest no more than 5% of total assets in any one investment company, or invest
more than 10% of total assets in investment companies in general. A Fund will
purchase securities of closed-end investment companies only in open market
transactions involving only customary broker's commissions. However, these
limitations are not applicable if the securities are acquired in a merger,
consolidation, reorganization, or acquisition of assets. It should be noted
that investment companies incur certain expenses such as management fees, and
therefore any investment by a Fund in shares of another investment company would
be subject to such customary expenses.
The Trust and the Advisor have received an exemptive order from the Securities
and Exchange Commission, which allows the Bond and Equity Funds to invest in
shares of the Trust's money market funds, which are described in a separate
prospectus and statement of additional information. Should a Fund invest in
shares of the Trust's money market funds, the Trust's Board of Trustees will
determine to what extent, if any, that the Adviser's advisory fees should be
adjusted to reflect the impact of such investments.
WRITING COVERED PUT AND CALL OPTIONS AND PURCHASING PUT OPTIONS
A Fund will not write call options on securities unless the securities are held
in the Fund's portfolio or unless the Fund is entitled to them in deliverable
form without further payment or after segregating cash in the amount of any
further payment. When writing put options, the Fund will segregate cash or U.S.
Treasury obligations with a value equal to or greater than the exercise price of
the underlying securities. The Fund will not write put or call options or
purchase put or call options in excess of 5% of the value of its total assets.
12
<PAGE>
Except with respect to borrowing money, if a percentage limitation is adhered to
at the time of investment, a later increase or decrease in percentage resulting
from any change in value or net assets will not result in a violation of such
restriction.
For purposes of its policies and limitations, the Bond Fund considers
certificates of deposit and demand and time deposits issued by a U.S. branch of
a domestic bank or savings association having capital, surplus, and undivided
profits in excess of $100,000,000 at the time of investment to be "cash items."
THE EXPEDITION FUNDS MANAGEMENT
- ------------------------------------------
TRUSTEES AND OFFICERS OF THE TRUST
The management and affairs of the Fund are supervised by the Trustees under the
laws of the Commonwealth of Massachusetts. The Trust pays the fees for
unaffiliated Trustees.
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, The Arbor Fund,
ARK Funds, Armada Funds, Bishop Street Funds, Boston 1784 Funds(R), CrestFunds,
Inc., CUFUND, First American Funds, Inc., First American Investment Funds, Inc.,
First American Strategy Funds, Inc., HighMark Funds, Monitor Funds, Morgan
Grenfell Investment Trust, Oak Associates Funds, The PBHG Funds, Inc., PBHG
Advisor 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 and TIP Institutional
Funds, each of which is an open-end management investment company managed by SEI
Investments Mutual Funds Services or its affiliates and, except for PBHG Advisor
Funds, Inc., 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 Administrator and
the Distributor, 1981-1994. Trustee of The Advisors' Inner Circle Fund,
The Arbor Fund, Boston 1784 Funds(R), Oak Associates Funds, Pillar Funds,
SEI Asset Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI
Institutional Investments Trust, SEI Institutional Managed Trust, SEI
Institutional International Trust, SEI Liquid Asset Trust and SEI Tax
Exempt Trust.
13
<PAGE>
JOHN T. COONEY (DOB 01/20/27) -- Trustee** -- Vice Chairman of Ameritrust
Texas N.A., 1989-1992, and MTrust Corp., 1985-1989. Trustee of The
Advisors' Inner Circle Fund, The Arbor Fund, The Expedition Funds, and Oak
Associates Funds.
WILLIAM M. DORAN (DOB 05/26/40) -- Trustee* -- 2000 One Logan Square,
Philadelphia, PA 19103. Partner, Morgan, Lewis & Bockius LLP (law firm),
counsel to the Trust, SEI Investments, the Administrator and the
Distributor. Director and Secretary of SEI Investments and Secretary of
the Administrator and the Distributor. Trustee of The Advisors' Inner
Circle Fund, The Arbor Fund, Oak Associates Funds, SEI Asset Allocation
Trust, SEI Daily Income Trust, SEI Index Funds, SEI Institutional
Investments Trust, SEI Institutional Managed Trust, SEI Institutional
International Trust, SEI Liquid Asset Trust and SEI Tax Exempt Trust.
FRANK E. MORRIS (DOB 12/30/23) -- Trustee** -- Peter Drucker Professor of
Management, Boston College, 1989-1990. President, Federal Reserve Bank of
Boston, 1968-1988. 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
Investments Trust, SEI Institutional Managed Trust, SEI Institutional
International Trust, SEI Liquid Asset Trust and SEI Tax Exempt Trust.
ROBERT A. PATTERSON (DOB 11/05/27) -- Trustee** -- Pennsylvania State
University, Senior Vice President, Treasurer (Emeritus). Financial and
Investment Consultant, Professor of Transportation (1984-present). Vice
President-Investments, Treasurer, Senior Vice President (Emeritus) (1982-
1984). Director, Pennsylvania Research Corp.; Member and Treasurer, Board
of Trustees of Grove City College. Trustee of The Advisors' Inner Circle
Fund, The Arbor Fund, The Expedition Funds, and Oak Associates Funds.
EUGENE B. PETERS (DOB 06/03/29) -- Trustee** -- Private investor from 1987
to present. Vice President and Chief Financial Officer, Western Company of
North America (petroleum service company) (1980-1986). President of Gene
Peters and Associates (import company) (1978-1980). President and Chief
Executive Officer of Jos. Schlitz Brewing Company before 1978. Trustee of
The Advisors' Inner Circle Fund, The Arbor Fund, The Expedition Funds, and
Oak Associates Funds.
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, Oak Associates Funds, SEI Asset Allocation
Trust, SEI Daily Income Trust, SEI Index Funds, SEI Institutional
Investments Trust, SEI Institutional Managed Trust, SEI Institutional
International Trust, SEI Liquid Asset Trust and SEI Tax Exempt Trust.
14
<PAGE>
MARK E. NAGLE (DOB 10/20/59) -- President and Chief Executive Officer --
Vice President of Fund Accounting and Administration for SEI Fund Resources
and Vice President of the Administrator since 1996. 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.
TODD B. CIPPERMAN (DOB 02/14/66) -- Vice President and Assistant Secretary
-- Vice President and Assistant Secretary of SEI Investments, the
Administrator and the Distributor since 1995. Associate, Dewey Ballantine
(law firm), 1994-1995. Associate, Winston & Strawn (law firm) 1991-1994.
LYDIA A. GAVALIS (DOB 06/05/64) -- Vice President and Assistant Secretary -
- Vice President and Assistant Secretary of the Administrator and the
Distributor since 1998. Assistant General Counsel and Director of
Arbitration, Philadelphia Stock Exchange, 1989-1998.
KATHY HEILIG (DOB 12/21/58) -- Vice President and Assistant Secretary --
Treasurer of SEI Investments since 1997; Assistant Controller of SEI
Investments since 1995; Vice President of SEI Investments since 1991;
Director of Taxes of SEI Investments, 1987 to 1991. Tax Manager, Arthur
Anderson LLP prior to 1987.
JOSEPH M. O'DONNELL (DOB 11/13/54) -- Vice President and Assistant
Secretary -- Vice President and Assistant Secretary of the Administrator
and the Distributor since 1998. Vice President and General Counsel, FPS
Services, Inc., 1993-1997. Staff Counsel and Secretary, Provident Mutual
Family of Funds, 1990-1993.
SANDRA K. ORLOW (DOB 10/18/53) -- Vice President and Assistant Secretary --
Secretary of the Distributor since 1998; Vice President of the Distributor
since 1988. Vice President and Assistant Secretary of the Manager since
1988. Assistant Secretary of the Distributor from 1988 to 1998.
KEVIN P. ROBINS (DOB 04/15/61) -- Vice President and Assistant Secretary --
Senior Vice President and General Counsel of SEI Investments, the
Administrator and the Distributor since 1994. Assistant Secretary of SEI
Investments since 1992; Secretary of the Administrator since 1994. Vice
President, General Counsel and Assistant Secretary of the Administrator and
the Distributor, 1992-1994. Associate, Morgan, Lewis & Bockius LLP (law
firm), 1988-1992.
LYNDA J. STRIEGEL (DOB 10/30/48) -- Vice President and Assistant Secretary
-- Vice President and Assistant Secretary of the Administrator and the
Distributor since 1998. Senior Asset Management Counsel, Barnett Banks,
Inc., 1997-1998. Partner,
15
<PAGE>
Groom and Nordberg, Chartered, 1996-1997. Associate General Counsel, Riggs
Bank, N.A., 1991-1995.
ROBERT DELLACROCE (DOB 12/17/63) -- Controller and Chief Financial Officer
-- Director, Funds Administration and Accounting of SEI Investments since
1994. Senior Audit Manager, Arthur Andersen LLP, 1986 - 1994.
JOHN H. GRADY, JR. (DOB 06/01/61) -- Secretary -- 2000 One Logan Square,
Philaelphia, PA 19103-6993, Partner since 1995, Morgan, Lewis & Bockius LLP
(law firm), counsel to the Trust, SEI Investments, the Administrator and
the Distributor.
---------------------------
*Messrs. Nesher and Doran are Trustees who may be deemed to be "interested"
persons of the Trust as that term is defined in the 1940 Act.
**Messrs. Cooney, Morris, Patterson, Peters and Storey serve as members of
the Audit Committee of the Trust.
The Trustees and officers of the Trust own less than 1% of the outstanding
shares of the Trust. The Trust pays the fees for unaffiliated Trustees.
<TABLE>
<CAPTION>
===============================================================================================
TOTAL
COMPENSATION
FROM
REGISTRANT AND
FUND
AGGREGATE PENSION OR COMPLEX*
COMPENSATION FROM RETIREMENT ESTIMATED PAID TO
REGISTRANT FOR THE BENEFITS ANNUAL TRUSTEES FOR
NAME OF PERSON, FISCAL PERIOD FROM ACCRUED AS PART BENEFITS THE FISCAL
POSITION MAY 16, 1997 TO OF FUND UPON PERIOD FROM
OCTOBER 31, 1997 EXPENSES RETIREMENT MAY 16, 1997
TO
OCTOBER 31,
1997
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John T. Cooney $1426 N/A N/A $1426 for
services on 1
board
- -----------------------------------------------------------------------------------------------
Frank E. Morris $1426 N/A N/A $1426 for
services on 1
board
- -----------------------------------------------------------------------------------------------
Robert Patterson $1426 N/A N/A $1426 for
services on 1
board
- -----------------------------------------------------------------------------------------------
Eugene B. Peters $1426 N/A N/A $1426 for
services on 1
board
- -----------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
James M. Storey, Esq. $1426 N/A N/A $1426 for
services on 1
board
- ---------------------------------------------------------------------------------------------
William M. Doran, Esq. N/A N/A N/A N/A
- ---------------------------------------------------------------------------------------------
Robert A. Nesher N/A N/A N/A N/A
=============================================================================================
</TABLE>
*The Trust is the only investment company in the "Fund Complex."
Officers and Trustees own less than 1% of the Trust's outstanding shares.
TRUSTEE LIABILITY
The Trust's Declaration of Trust provides that the Trustees will not be liable
for errors of judgment or mistakes of fact or law. However, they are not
protected against any liability to which they would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of their office.
INVESTMENT ADVISORY SERVICES
- ------------------------------------------
ADVISER TO THE FUNDS
The Funds' investment adviser is Compass Bank, an Alabama state banking
corporation (the "Adviser"). The Adviser is a wholly-owned subsidiary of Compass
Bancshares, Inc. ("Bancshares"), a bank holding company organized under the laws
of Delaware.
The Adviser shall not be liable to the Trust, a Fund, or any shareholder of a
Fund for any losses that may be sustained in the purchase, holding, or sale of
any security, or for anything done or omitted by it, except acts or omissions
involving willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties imposed upon it by its contract with the Trust.
Because of the internal controls maintained by the Adviser to restrict the flow
of non-public information, Fund investments are typically made without any
knowledge of the Adviser's or its affiliates' lending relationships with an
issuer.
ADVISORY FEES
For its advisory services, Compass Bank receives an annual investment
advisory fee as described in the prospectuses.
17
<PAGE>
For the fiscal years ended October 31, 1995, 1996 and 1997, the Funds paid
the following advisory fees:
<TABLE>
<CAPTION>
============================================================================
Fund Fees Paid Fee Waivers
---------------------------------------------------------------
1995 1996 1997 1995 1996 1997
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Bond Fund $434,754 $411,493 $478,461 $179,019 $137,165 $68,168
- ----------------------------------------------------------------------------
Equity Fund * * $691,952 * * $0
============================================================================
</TABLE>
* An asterisk indicates that the Fund had not commenced operations as of
the period indicated.
BROKERAGE TRANSACTIONS
------------------------------------------
When selecting brokers and dealers to handle the purchase and sale of
portfolio instruments, the Adviser looks for prompt execution of the order
at a favorable price. In working with dealers, the Adviser will generally
use those who are recognized dealers in specific portfolio instruments,
except when a better price and execution of the order can be obtained
elsewhere. The Adviser makes decisions on portfolio transactions and
selects brokers and dealers subject to guidelines established by the
Trustees. The Adviser may select brokers and dealers who offer brokerage
and research services. These services may be furnished directly to the
Funds or to the Adviser and may include: advice as to the advisability of
investing in securities; security analysis and reports; economic studies;
industry studies; receipt of quotations for portfolio evaluations; and
similar services. Research services provided by brokers and dealers may be
used by the Adviser or its affiliates in advising the Funds and other
accounts. To the extent that receipt of these services may supplant
services for which the Adviser or its affiliates might otherwise have paid,
it would tend to reduce their expenses. The Adviser and its affiliates
exercise reasonable business judgment in selecting brokers who offer
brokerage and research services to execute securities transactions. They
determine in good faith that commissions charged by such persons are
reasonable in relationship to the value of the brokerage and research
services provided. Although investment decisions for the Funds are made
independently from those of the other accounts managed by the Adviser,
investments of the type the Funds may also be made by those other accounts.
When a Fund and one or more other accounts managed by the Adviser are
prepared to invest in, or desire to dispose of, the same security,
available investments or opportunities for sales will be allocated in a
manner believed by the Adviser to be equitable to each. In some cases, this
procedure may adversely affect the price paid or received by a Fund or the
size of the position obtained or disposed of by the Fund. In other cases,
however, it is believed that coordination and the ability to participate in
volume transactions will be to the benefit of the Fund.
18
<PAGE>
For the fiscal year ended October 31, 1997, the following commissions
were paid on brokerage transactions, pursuant to an agreement or
understanding, to brokers because of research services provided by the
brokers:
<TABLE>
<CAPTION>
Fund Total Dollar Amount Total Dollar Amount of
of Transactions
Brokerage Commissions Involving Directed Brokerage
for Research Services Commissions for Research Services
=============================================================================================
<S> <C> <C>
Bond Fund $0 $0
---------------------------------------------------------------------------------------------
Equity Fund $259,247 $245,107,815
=============================================================================================
</TABLE>
For the fiscal years indicated, the Funds paid the following brokerage
commissions:
<TABLE>
<CAPTION>
======================================================================================================================
% of Total % of Total
Total $ Amount of Brokerage Brokerage Brokerage
Fund Total $ Amount of Brokerage Commision Paid to Affiliated Commissions Paid Transactions
Commissions Paid Brokers to the Affiliated Effected Through
Brokers Affiliated Brokers
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------
1995 1996 1997 1995 1996 1997 1997 1997 1997
- ----------------------------------------------------------------------------------------------------------------------
Bond Fund N/A N/A N/A N/A N/A N/A N/A 0 0
- ----------------------------------------------------------------------------------------------------------------------
Equity Fund * * $332,823 * * $0 0 0 0
======================================================================================================================
</TABLE>
* An asterisk indicates that the Fund had not commenced operations as of
the period indicated.
"Regular brokers or dealers" of the Trust are the ten brokers or dealers
that, during the most recent fiscal year, (i) received the greatest
dollar amounts of brokerage commissions from the Trust's portfolio
transactions, (ii) engaged as principal in the largest dollar amounts of
portfolio transactions of the Trust, or (iii) sold the largest dollar
amounts of the Trust's shares. At October 31, 1997, the following Funds
held securities of the Trust's "regular brokers or dealers" as follows:
the Bond Fund held repurchase agreements valued at $1,159,000 at the
fiscal year end with Merrill Lynch; and the Equity Fund held repurchase
agreements valued at $3,146,000 with Merrill Lynch at the fiscal year
end.
19
<PAGE>
OTHER SERVICES
- ---------------------------
FUND ADMINISTRATION
The Trust and SEI Investments Mutual Funds Services (the "Administrator") have
entered into an administration agreement (the "Administration Agreement"). 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 a Fund 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 the Administrator in the performance of its duties or from
reckless disregard by it of its duties and obligations thereunder. The
Administration Agreement shall remain in effect with respect to the Trust for
three years.
The Administrator, a Delaware business trust, has its principal business offices
at Oaks, Pennsylvania 19456. SEI Investments Management Corporation ("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 other mutual funds: The Achievement Funds
Trust, The Advisors' Inner Circle Fund, The Arbor Fund, ARK Funds, Armada Funds,
Bishop Street Funds, Boston 1784 Funds(R), CrestFunds, Inc., CUFUND, First
American Funds, Inc., First American Investment Funds, Inc., First American
Strategy Funds, Inc., HighMark Funds, Monitor Funds, Morgan Grenfell Investment
Trust, The Nevis Funds, Oak Associates Funds, The PBHG Funds, Inc., PBHG Advisor
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 and TIP Institutional Funds.
For the fiscal year ended October 31, 1997, the Administrator (since June 9,
1997) earned $96,779 and $186,608 for the Bond Fund and the Equity Fund,
respectively, of which $0 and $0 were voluntarily waived. Federated
Administrative Services, a subsidiary of Federated Investors, previously
provided administrative personnel and services to the Bond Fund. For the fiscal
years ended October 31, 1997 (until June 9, 1997), 1996 and 1995, the Bond Fund
incurred $62,443, $78,143 and $80,898, respectively, for administrative
services, on which there were no voluntary fee waivers.
DISTRIBUTOR
20
<PAGE>
SEI Investments Distribution Co. (the "Distributor"), a wholly-owned subsidiary
of SEI Investments, and the Trust are parties to a distribution agreement (the
"Distribution Agreement") which applies to each Fund's classes of shares.
CUSTODIAN
Compass Bank, Birmingham, Alabama, which is also the Adviser, is custodian for
the securities and cash of the Funds for which it receives an annual fee of
0.02% of each Fund's average aggregate daily net assets and is reimbursed for
its out-of-pocket expenses.
TRANSFER AGENT AND SERVICING AGENT
State Street Bank and Trust Company (the "Transfer Agent") serves as transfer
agent for the Trust and Boston Financial Data Services, Inc. (the "Servicing
Agent") serves as the Trust's servicing agent. The fee paid to the Transfer
Agent is based upon the size, type and number of accounts and transactions made
by shareholders. The Transfer Agent pays the Servicing Agent's compensation.
INDEPENDENT AUDITORS
The independent auditors for the Trust are Deloitte & Touche LLP,
Princeton, New Jersey.
PURCHASING SHARES
- --------------------------------------------------------------------------------
Shares are sold at their net asset value on days when the New York Stock
Exchange (the "NYSE") is open for business. The procedures for purchasing shares
of the Funds is explained in the appropriate prospectus under "Investing in
Shares".
The Adviser, Compass Brokerage, Inc. and the other affiliates of Bancshares
which provide shareholder and administrative services to the Funds sometimes are
referred herein as "Compass."
DISTRIBUTION AND SHAREHOLDER SERVICES PLANS
The Trust has adopted a Plan for the Class B Shares of the Funds pursuant to
Rule 12b-1 (the "12b-1 Plan") which was promulgated by the Securities and
Exchange Commission under the Investment Company Act of 1940. The 12b-1 Plan
provides for payment of fees to finance any activity which is principally
intended to result in the sale of a Fund's shares subject to the 12b-1 Plan.
Such activities may include the advertising and marketing of shares; preparing,
printing and distributing prospectuses and sales literature to prospective
shareholders, brokers or administrators; and implementing and operating
21
<PAGE>
the 12b-1 Plan. Pursuant to the 12b-1 Plan, the Distributor may pay fees to
brokers for distribution and administrative services and to administrators
for administrative services as to shares.
The administrative services are provided by a representative who has
knowledge of the shareholder's particular circumstances and goals, and
include, but are not limited to: communicating account openings;
communicating account closings; entering purchase transactions; entering
redemption transactions; providing or arranging to provide accounting
support for all transactions; wiring funds and receiving funds for Share
purchases and redemptions; confirming and reconciling all transactions;
reviewing the activity in Fund accounts; and providing training and
supervision of broker personnel; posting and reinvesting dividends to Fund
accounts or arranging for this service to be performed by the Trust's
transfer agent; and maintaining and distributing current copies of
prospectuses and shareholder reports to the beneficial owners of Shares and
prospective shareholders.
The Trustees expect that the adoption of the 12b-1 Plan will result in the
sale of a sufficient number of shares so as to allow the Funds to achieve
economic viability. It is also anticipated that an increase in the size of
a Fund will facilitate more efficient portfolio management and assist the
Fund in seeking to achieve its investment objective.
For the fiscal year ended October 31, 1997, the Trust had not commenced the
offering of Class B Shares.
===========================================================================
Total Total
Distribution Distribution Sales Printing Other
Fund Expenses Expenses Expenses Costs Costs
(as a % of
net assets)
- ---------------------------------------------------------------------------
Bond Fund N/A .00%* N/A N/A N/A
- ---------------------------------------------------------------------------
Equity Fund** N/A .25% N/A N/A N/A
===========================================================================
* Reflects voluntary fee waiver in effect for the period indicated.
** Investment Shares of the Fund had not commenced operations as of the
period indicated.
CONVERSION TO FEDERAL FUNDS
It is each Fund's policy to be as fully invested as possible so that
maximum interest may be earned. To this end, all payments from shareholders
must be in federal funds or be converted into federal funds.
22
<PAGE>
DETERMINING NET ASSET VALUE
- ------------------------------------
Net asset value generally changes each day for each of the Funds. Net asset
value is calculated on days on which the New York Stock Exchange is open for
business. Currently the Funds are closed when the following holidays are
observed: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas.
DETERMINING MARKET VALUE OF SECURITIES
Market values of a Fund's portfolio securities are determined as follows:
. as provided by an independent pricing service;
. for short-term obligations, according to the mean between bid and
asked prices, as furnished by an independent pricing service, or for
short-term obligations with remaining maturities of less than 60 days
at the time of purchase, at amortized cost unless the Trustees
determine this is not fair value; or
. at fair value as determined in good faith by the Trustees.
Prices provided by independent pricing services may be determined without
relying exclusively on quoted prices. Pricing services may consider:
. yield;
. quality;
. coupon rate;
. maturity;
. type of issue;
. trading characteristics; and
. other market data.
Over-the-counter put options will be valued at the mean between the bid and the
asked prices. Covered call options will be valued at the last sale price on the
national exchange on which such option is traded. Unlisted call options will be
valued at the latest bid price as provided by brokers.
23
<PAGE>
REDEEMING SHARES
- -------------------------
Each Fund redeems shares at the next computed net asset value after the Transfer
Agent receives the redemption request, less any applicable contingent deferred
sales charge. Redemption procedures are explained in the Fund's prospectus under
"Redeeming Shares." Although the Transfer Agent does not charge for telephone
redemptions, it reserves the right to charge a fee for the cost of wire-
transferred redemptions of less than $5,000.
REDEMPTION IN KIND
Although the Trust intends to redeem shares in cash, it reserves the right under
certain circumstances to pay the redemption price in whole or in part by a
distribution of securities from each respective Fund's portfolio.
Redemption in kind will be made in conformity with applicable Securities and
Exchange Commission rules, taking such securities at the same value employed in
determining net asset value and selecting the securities in a manner the
Trustees determine to be fair and equitable.
The Trust has elected to be governed by Rule 18f-1 of the Investment Company Act
of 1940 under which the Trust is obligated to redeem shares for any one
shareholder in cash only up to the lesser of $250,000 or 1% of a Fund's net
asset value during any 90-day period.
Redemption in kind is not as liquid as a cash redemption. If redemption is made
in kind, shareholders receiving their securities and selling them before their
maturity could receive less than the redemption value of their securities and
could incur certain transaction costs.
MASSACHUSETTS PARTNERSHIP LAW
- -----------------------------------
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect
shareholders, the Trust has filed legal documents with Massachusetts that
expressly disclaim the liability of its shareholders for acts or obligations of
the Trust. These documents require notice of this disclaimer to be given in each
agreement, obligation or instrument that the Trust or its Trustees enter into or
sign.
In the unlikely event a shareholder is held personally liable for the Trust's
obligations, the Trust is required by the Declaration of Trust to use its
property to protect or compensate the shareholder. On request, the Trust will
defend any claim made and pay
24
<PAGE>
any judgment against a shareholder for any act or obligation of the Trust.
Therefore, financial loss resulting from liability as a shareholder will occur
only if the Trust cannot meet its obligations to indemnify shareholders and pay
judgments against them.
TAX STATUS
- -----------------------
Each Fund intends to pay no federal income tax because it expects to meet the
requirements of Subchapter M of the Internal Revenue Code applicable to
regulated investment companies and to receive the special tax treatment afforded
to such companies. To qualify for this treatment, a Fund must, among other
requirements:
. derive at least 90% of its gross income from dividends, interest, and
gains from the sale of securities;
. invest in securities within certain statutory limits; and
. distribute to its shareholders at least 90% of its net income earned
during the year.
Shareholders are subject to federal income tax on dividends and capital gains,
if any, received as cash or additional shares.
No portion of any income dividend paid by a Fund is eligible for the dividends
received deduction available to corporations. These dividends, and any short-
term capital gains, are taxable as ordinary income.
CAPITAL GAINS
Shareholders will pay federal tax at capital gains rates on long-
term capital gains, if any, distributed to them regardless of how
long they have held the Fund shares. Capital gains, if any, will
be distributed at least once every 12 months.
FUND OWNERSHIP
- ---------------------
As of September 8, 1998, the following persons were the only persons who were
record holders of 5% or more of the shares of the Bond Fund: Compass Bank, Attn:
Trust Oper. 3rd Level S, P.O. Box 10566, Birmingham, AL 35296-0001, 97.89%
(Institutional Shares).
As of September 8, 1998, the following persons were the only persons who were
record holders of 5% or more of the shares of the Equity Fund: Donaldson Lufkin
Jenrette,
25
<PAGE>
Securities Corporation Inc., P.O. Box 2052, Jersey City, NJ 07303-2052,
11.01% and James C. Plummer PC, Collateral Account, 1010 Lamar Suite 1510,
Houston, TX 77002-6315, 9.40% (Investment Shares); Compass Bank, Attn:
Trust Oper. 3rd Level S, P.O. Box 10566, Birmingham, AL 35296-0001, 91.45%,
Compass Bank Trustee for Compass Bancshares Inc., 401K Pla c/o Benefit
Services Corporation, 1375 Peachtree St. NE, Suite 300, Atlanta, GA 30309-
3112, 5.78% (Institutional Shares).
TOTAL RETURN
-------------------
The average total returns for the Funds from inception through October 31,
1997 were as follows:
<TABLE>
<CAPTION>
========================================================================
FUND CLASS/(1)/ AVERAGE ANNUAL TOTAL RETURN
===================================
ONE YEAR FIVE TEN SINCE
YEARS YEARS INCEPTION*
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Bond Fund Institutional Shares N/A N/A N/A **9.58
---------------------------------------------------------
Investment Shares 6.41 5.31 N/A 5.94
(no load)
---------------------------------------------------------
Investment Shares 2.13 4.45 N/A 5.15
(load)
- ------------------------------------------------------------------------
Institutional Shares N/A N/A N/A **7.89
---------------------------------------------------------
Equity Fund Investment Shares N/A N/A N/A N/A
(no load)
---------------------------------------------------------
Investment Shares N/A N/A N/A N/A
(load)
========================================================================
</TABLE>
* Investment Shares of the Bond Fund were initially offered to the public
on April 20, 1992. Institutional Shares of the Bond Fund and Institutional
Shares of the Equity Fund were initially offered to the public on June 13,
1997. Investment Shares of the Equity Fund were not offered to the public
during the fiscal year ended October 31, 1997. The Trust did not offer
Class B Shares as of October 31, 1997. Because Class B Shares are subject
to different sales charges and expense levels, the total return and yield
will ordinarily differ from the total return and yield of the Investment
Shares or Institutional Shares.
** Annualized
The average annual total return for a Fund is the average compounded rate
of return for a given period that would equate a $1,000 initial investment
to the ending redeemable value of that investment. The ending redeemable
value is computed by multiplying the number of shares owned at the end of
the period by the offering price per share at the end of the period. The
number of shares owned at the end of the period is based on the number of
shares purchased at the beginning of the period with $1,000, less any
26
<PAGE>
applicable sales charge, adjusted over the period by any additional shares,
assuming the monthly reinvestment of all dividends and distributions. Total
return may also be shown without giving effect to any sales charge.
YIELD
- ---------------------------
THE BOND FUND
The Bond Fund's yield for the thirty-day period ended October 31, 1997 was as
follows: Institutional Shares 5.04% and Investment Shares 4.83%.
The yield for the Bond Fund is determined by dividing the net investment income
per share (as defined by the Securities and Exchange Commission) earned by the
Fund over a thirty-day period by the maximum offering price per share of the
Fund on the last day of the period. This value is then annualized using semi-
annual compounding. This means that the amount of income generated during the
thirty-day period is assumed to be generated each month over a twelve-month
period and is reinvested every six months. The yield does not necessarily
reflect income actually earned by the Fund because of certain adjustments
required by the Securities and Exchange Commission and, therefore, may not
correlate to the dividends or other distributions paid to shareholders.
To the extent that financial institutions and broker/dealers charge fees in
connection with services provided in conjunction with an investment in the Fund,
performance will be reduced for those shareholders paying those fees.
PERFORMANCE COMPARISONS
- ------------------------------
A Fund's performance of both classes of shares depends upon such variables
as:
. portfolio quality;
. average portfolio maturity;
. type of instruments in which the portfolio is invested;
. changes in interest rates and market value of portfolio securities;
. changes in the Fund's (or class's) expenses;
. the relative amount of Fund cash flow; and
27
<PAGE>
. various other factors.
A Fund's performance fluctuates on a daily basis largely because net earnings
and, with respect to the Funds, because their offering price per share fluctuate
daily. Both net earnings and offering price per share are factors in the
computation of yield and total return.
Investors may use financial publications and/or indices to obtain a more
complete view of a Fund's performance. When comparing performance, investors
should consider all relevant factors such as the composition of any index used,
prevailing market conditions, portfolio compositions of other funds, and methods
used to value portfolio securities and compute offering price. The financial
publications and/or indices which the Funds use in advertising may include:
. LIPPER ANALYTICAL SERVICES, INC. ranks funds in various fund
categories by making comparative calculations using total return.
Total return assumes the reinvestment of all capital gains
distributions and income dividends and takes into account any change
in offering price over a specific period of time. From time to time,
the Funds will quote their Lipper rankings in advertising and sales
literature. The Bond Fund will use the "Short-Intermediate Government
Funds" and/or "Short-Intermediate Corporate Funds" categories; and the
Equity Fund will use the "Growth and Income Funds" category.
. THE SALOMON BROTHERS TOTAL RATE-OF-RETURN INDEX for mortgage pass
through securities reflects the entire mortgage pass through market
and reflects their special characteristics. The index represents data
aggregated by mortgage pool and coupon within a given sector. A market
weighted portfolio is constructed considering all newly created pools
and coupons.
. THE MERRILL LYNCH TAXABLE BOND INDICES include U.S. Treasury and
agency issues and were designed to keep pace with structural changes
in the fixed income market. The performance indicators capture all
rating changes, new issues, and any structural changes of the entire
market.
. MORNINGSTAR, INC., an independent rating service, is the publisher of
the bi-weekly Mutual Fund Values. Mutual Fund Values rates more than
1,000 NASDAQ-listed mutual funds of all types, according to their
risk-adjusted returns. The maximum rating is five stars, and ratings
are effective for two weeks.
. LEHMAN BROTHERS INTERMEDIATE GOVERNMENT/CORPORATE BOND INDEX is an
unmanaged index comprised of all approximately 5,000 issues
28
<PAGE>
which include: non-convertible bonds publicly issued by the U.S.
Government or its agencies; corporate bonds guaranteed by the U.S.
Government and quasi-federal corporations; and publicly issued, fixed-
rate, non-convertible domestic bonds of companies in industry, public
utilities, and finance with maturities between 1 and 9.99 years. Total
return is based on price appreciation/depreciation and income as a
percentage of the original investment. Indices are rebalanced monthly
by market capitalization.
. LIPPER GROWTH & INCOME FUND INDEX is a net asset value weighted index
of the 30 largest funds with a growth and income investment objective.
It is calculated daily with adjustments for income dividends and
capital gains distribution as of the ex-dividend dates.
. LIPPER SHORT-INTERMEDIATE GOVERNMENT FUND INDEX is a net asset value
weighted index of the 10 largest funds with a short-intermediate
government investment objective. It is calculated daily with
adjustments for income dividends and capital gains distribution as of
the ex-dividend dates.
. LIPPER SHORT-INTERMEDIATE CORPORATE FUND INDEX is a net asset value
weighted index of the 10 largest funds with a short-intermediate
corporate investment objective. It is calculated daily with
adjustments for income dividends and capital gains distribution as of
the ex-dividend dates.
. S & P SMALL CAP 600 INDEX -- a capitalization-weighted index of 600
domestic stocks having market capitalizations which reside within the
50th and the 83rd percentiles of the market capitalization of the
entire stock market, chosen for certain liquidity characteristics and
for industry representation.
. S&P 500 INDEX is a portfolio of 500 stocks designed to mimic the
overall equity market's industry weightings. Most, but not all, large
capitalization stocks are in the index. There are also some small
capitalization names in the index. The list is maintained by Standard
& Poor's Corporation. It is market capitalization weighted. Unlike the
Russell indices, there are always 500 names in the S&P 500. Changes
are made by Standard & Poor's as needed.
. S&P MID CAP 400 INDEX consists of 400 domestic stocks chosen for
market size, liquidity, and industry group representation. It is also
a market-value weighted index and was the first benchmark of mid cap
stock price movement.
29
<PAGE>
. WILSHIRE 5000 EQUITY INDEX measures performance of all US
headquartered equity securities with readily available price data.
Approximately 6,000 capitalization weighted security returns are used
to calculate the index.
. S&P 1500 INDEX is a combination of the S&P 500, the S&P Mid Cap 400
Index, and the S&P Small Cap 600 Index, it calculates a composite
index based on those 1500 issues.
. CONSUMER PRICE INDEX ("CPI" OR "COST OF LIVING INDEX"), published by
the U.S. Bureau of Labor Statistics -- a statistical measure of
change, over time, in the price of goods and services in major
expenditure groups.
Advertisements and other sales literature for a Fund may quote total returns
which are calculated on non-standardized base periods. These total returns
represent the historic change in the value of an investment in a Fund based on
monthly reinvestment of dividends over a specified period of time.
Advertisements may quote performance information which does not reflect the
effect of the sales charge.
Advertising and other promotional literature may include charts, graphs and
other illustrations using the Fund's returns, or returns in general, that
demonstrate basic investment concepts such as tax-deferred compounding, dollar-
cost averaging and systematic investment. In addition, a Fund can compare its
performance, or performance for the types of securities in which it invests, to
a variety of other investments, such as bank savings accounts, certificates of
deposit, and Treasury bills.
ECONOMIC AND MARKET INFORMATION
Advertising and sales literature for a Fund may include discussions of economic,
financial and political developments and their effect on the securities market.
Such discussions may take the form of commentary on these developments by Fund
portfolio managers and their views and analysis on how such developments could
affect a Fund. In addition, advertising and sales literature may quote
statistics and give general information about the mutual fund industry,
including the growth of the industry, from sources such as the Investment
Company Institute ("ICI"). For example, according to the ICI, more than 63
million individuals are pursuing their financial goals through mutual funds.
These investors, as well as businesses and institutions, have entrusted over
$3.5 trillion to the 6,368 mutual funds available.
FINANCIAL STATEMENTS
- ----------------------------
30
<PAGE>
The financial statements of the Funds for the fiscal year ended October 31,
1997, including notes thereto and the report of Deloitte & Touche LLP thereon
are herein incorporated by reference. A copy of the 1997 Annual Report to
Shareholders must accompany the delivery of this Statement of Additional
Information.
31
<PAGE>
PART C: OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits:
(a) Financial Statements:
(1) Part A -- Financial Highlights
(2) Part B --
(i) The following unaudited financial statements for The Expedition
Bond Fund, The Expedition Equity Fund, and The Expedition Money
Market Fund for the fiscal period ended April 30, 1998 are
incorporated by reference into the Statement of Additional
Information from form N-30D filed on June 25, 1998 with Accession
Number 0000935069-98-000104:
Statement of Net Assets
Statement of Operations
Statement of Changes in Net Assets
Financial Highlights
Notes to Financial Statements
Independent Auditor's Report
(ii) The following financial statements for The Expedition Bond Fund,
The Expedition Equity Fund, and The Expedition Money Market Fund
for the fiscal year ended October 31, 1997, are incorporated by
reference into the Statement of Additional Information from form
N-30D filed on December 30, 1997 with Accession Number
0000935069-97-000224:
Statement of Net Assets
Statement of Operations
Statement of Changes in Net Assets
Financial Highlights
Notes to Financial Statements
Independent Auditor's Report
(b) Additional Exhibits:
(1) Declaration of Trust is incorporated herein by reference to
Registrant's Post-Effective Amendment No. 22 on Form N-1A (File No.
33-30950) filed with the Securities and Exchange Commission ("SEC") on
December 29, 1995.
(1)(a) Amendment No. 1 to Declaration of Trust is incorporated herein by
reference as Exhibit (1)(i) to Registrant's Pre-Effective Amendment
No. 1 on Form N-1A (File No. 33-30950) filed with the SEC on November
16, 1989.
v
<PAGE>
(1)(b) Amendment No. 2 to Declaration of Trust is incorporated herein by
reference as Exhibit (1)(ii) to Registrant's Post-Effective Amendment
No. 1 on Form N-1A (File No. 33-30950) filed with the SEC on May 21,
1990.
(1)(c) Amendment Nos. 3, 4, and 5 to Declaration of Trust are incorporated
herein by reference as Exhibit (1)(iii) to Registrant's Post-Effective
Amendment No. 3 on Form N-1A (File No. 33-30950) filed with the SEC on
September 11, 1991.
(1)(d) Amendment No. 6 to Declaration of Trust is incorporated herein by
reference as Exhibit (1)(iv) to Registrant's Post-Effective Amendment
No. 5 on Form N-1A (File No. 33-30950) filed with the SEC on February
14, 1992.
(1)(e) Amendment No. 7 to Declaration of Trust is incorporated herein by
reference as Exhibit (1)(v) to Registrant's Post-Effective Amendment
No. 8 on Form N-1A (File No. 33-30950) filed with the SEC on September
28, 1992.
(1)(f) Amendment Nos. 8 and 9 to Declaration of Trust are incorporated herein
by reference as Exhibit (1)(vi) to Registrant's Post-Effective
Amendment No. 22 on Form N-1A (File No. 33-30950) filed with the SEC
on December 29, 1995.
(1)(g) Amendment No. 10 to Declaration of Trust is incorporated herein by
reference to Registrant's Post-Effective Amendment No. 26 on form N-1A
filed with the SEC on June 4, 1997.
(1)(h) Amendment No. 12 is incorporated herein by reference as Exhibit (1)(h)
to Registrants Post-Effective Amendment No. 28 on Form N-1A (File No.
33-30950) filed with the SEC on January 15, 1998.
(1)(i) Amendment No. 13 is incorporated herein by reference as Exhibit (1)(i)
to Registrants Post-Effective Amendment No. 28 on Form N-1A (File No.
33-30950) filed with the SEC on January 15, 1998.
(1)(j) Amendment No. 14 is filed herewith.
(2) By-Laws are incorporated herein by reference to Registrant's Post-
Effective Amendment No. 22 on Form N-1A (File No. 33-30950) filed with
the SEC on December 29, 1995.
(3) Not Applicable
(4) Specimen Certificate for Shares of Beneficial Interest of The
Starburst Government Income Fund is incorporated herein by reference
as Exhibit (4)(i) to Registrant's Post-Effective Amendment No. 22 on
Form N-1A (File No. 33-30950) filed with the SEC on December 29, 1995.
(4)(a) Specimen Certificate for Shares of Beneficial Interest of The
Starburst Government Money Market Fund-Investment Shares is
incorporated herein by reference as Exhibit (4)(ii) to Registrant's
Post-Effective Amendment No. 22 on Form N-1A (File No. 33-30950) filed
with the SEC on December 29, 1995.
(4)(b) Specimen Certificate for Shares of Beneficial Interest of The
Starburst Government Money Market Fund-Trust Shares is incorporated
herein by reference as Exhibit (4)(iii) to Registrant's Post-Effective
Amendment No. 22 on Form N-1A (File No. 33-30950) filed with the SEC
on December 29, 1995.
(4)(c) Specimen Certificate for Shares of Beneficial Interest of The
Starburst Money Market Fund-Investment Shares is incorporated herein
by reference as Exhibit (4)(iv)
vi
<PAGE>
to Registrant's Post-Effective Amendment No. 22 on Form N-1A (File No.
33-30950) filed with the SEC on December 29, 1995.
(4)(d) Specimen Certificate for Shares of Beneficial Interest of The
Starburst Money Market Fund-Trust Shares is incorporated herein by
reference as Exhibit (4)(v) to Registrant's Post-Effective Amendment
No. 22 on Form N-1A (File No. 33-30950) filed with the SEC on December
29, 1995.
(5) Investment Advisory Contract of the Registrant through and including
Exhibit D is incorporated herein by reference as Exhibit (5)(i) to
Registrant's Post-Effective Amendment No. 22 on Form N-1A (File No.
33-30950) filed with the SEC on December 29, 1995.
(5)(a) Investment Management Contract of the Registrant through and including
Exhibit A is incorporated herein by reference as Exhibit (5)(ii) to
Registrant's Post-Effective Amendment No. 22 on Form N-1A (File No.
33-30950) filed with the SEC on December 29, 1995.
(5)(b) Exhibit E to the Investment Advisory Contract of the Registrant
relating to The Expedition Equity Fund is incorporated herein by
reference to Registrant's Post-Effective Amendment No. 29 on Form N-1A
(File No. 33-30950) filed with the SEC on January 30, 1998.
(5)(c) Exhibit F to the Investment Advisory Contract of the Registrant
relating to The Expedition Tax-Free Money Market Fund is filed
herewith.
(5)(d) Form of Investment Sub-Advisory Agreement between the Advisor and
Weiss, Peck & Greer, L.L.C. is filed herewith.
(6) Distributor's Contract of the Registrant through and including Exhibit
F is incorporated herein by reference to Registrant's Post-Effective
Amendment No. 22 on Form N-1A (File No. 33-30950) filed with the SEC
on December 29, 1995.
(6)(a) Distribution Agreement with SEI Investments Distribution Co. is
incorporated herein by reference to Registrant's Post-Effective
Amendment No. 29 on Form N-1A (File No. 33-30950) filed with the SEC
on January 30, 1998.
(7) Not applicable
(8) Custodian Agreement of the Registrant is incorporated herein by
reference to Registrant's Post-Effective Amendment No. 22 on Form N-1A
(File No. 33-30950) filed with the SEC on December 29, 1995.
(9) Agreement for Fund Accounting, Shareholder Record keeping, and Custody
Services Procurement is incorporated herein by reference as Exhibit
(9)(i) to Registrant's Post-Effective Amendment No. 20 on Form N-1A
(File No. 33-30950) filed with the SEC on December 28, 1994.
(9)(a) Sales Agreement with Federated Securities Corp. is incorporated herein
by reference as Exhibit (9)(ii) to Registrant's Post-Effective
Amendment No. 17 on Form N-1A (File No. 33-30950) filed with the SEC
on August 3, 1994.
(9)(b) Electronic Communications and Record keeping Agreement is incorporated
herein by reference as Exhibit (9)(iii) to Registrant's Post-Effective
Amendment No. 17 on Form N-1A (File No. 33-30950) filed with the SEC
on August 3, 1994.
vii
<PAGE>
(9)(c) Administration Agreement with SEI Fund Resources is incorporated
herein by reference to Registrant's Post-Effective Amendment No. 29 on
Form N-1A (File No. 33-30950) filed with the SEC on January 30, 1998.
(9)(d) Shareholder Service Plan and Agreement as it relates to the Investment
Service Shares is incorporated herein by reference to Registrant's
Post-Effective Amendment No. 29 on Form N-1A (File No. 33-30950) filed
with the SEC on January 30, 1998.
(10) Opinion and Consent of Counsel is incorporated herein by reference to
Registrant's Post-Effective Amendment No. 20 on Form N-1A (File No.
33-30950) filed with the SEC on December 28, 1994.
(11) Consent of the Independent Auditors is filed herewith.
(12) Not applicable.
(13) Initial Capital Understanding is incorporated herein by reference to
Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No.
33-30950) filed with the SEC on November 16, 1989.
(14) Not applicable.
(15) Distribution Plan through and including Exhibit G is incorporated
herein by reference as Exhibit (15)(i) to Registrant's Post-Effective
Amendment No. 22 on Form N-1A (File No. 33-30950) filed with the SEC
on December 29, 1995.
(15)(a) Form of 12b-1 Agreement is incorporated herein by reference as Exhibit
(15)(ii) to Registrant's Post-Effective Amendment No. 24 on Form N-1A
(File No. 33-30950) filed with the SEC on December 27, 1996.
(15)(b) Amended and Restated Distribution Plan is incorporated herein by
reference to Registrant's Post-Effective Amendment No. 26 on form N-1A
filed with the SEC on June 4, 1997.
(15)(c) Distribution and Service Plan for the Class B Shares dated May 18,
1998 is filed herewith.
(16) Schedule of Computation of Fund Performance for The Starburst
Government Income Fund is incorporated herein by reference as Exhibit
(16)(i) to Registrant's Post-Effective Amendment No. 22 on Form N-1A
(File No. 33-30950) filed with the SEC on December 29, 1995.
(16)(a) Schedule of Computation of Fund Performance for The Starburst
Government Money Market Fund is incorporated herein by reference as
Exhibit (16)(ii) to Registrant's Post-Effective Amendment No. 22 on
Form N-1A (File No. 33-30950) filed with the SEC on December 29, 1995.
(16)(b) Schedule of Computation of Fund Performance for The Starburst Money
Market Fund is incorporated herein by reference as Exhibit (16)(iii)
to Registrant's Post-Effective Amendment No. 22 on Form N-1A (File No.
33-30950) filed with the SEC on December 29, 1995.
(17) Financial Data Schedules are filed herewith.
(18) Multiple Class Plan of the Registrant is incorporated herein by
reference to Registrant's Post-Effective Amendment No. 24 on Form N-1A
(File No. 33-30950) filed with the SEC on December 27, 1996.
(18)(a) Rule 18f-3 Multiple Class Plan of May, 1998 is filed herewith.
viii
<PAGE>
(24) Powers of Attorney for Dr. Robert A. Patterson, Eugene B. Peters,
Frank E. Morris, Robert A. Nesher, William M. Doran, James M. Storey,
John T. Cooney and Mark E. Nagle are filed herewith.
ITEM 25. Persons Controlled by or Under Common Control with Registrant
See the Prospectus and Statement of Additional Information regarding the
Trust's control relationships. The Administrator is a subsidiary of SEI
Investments Company which also controls the distributor of the Registrant (SEI
Investments Distribution Co.) and other corporations engaged in providing
various financial and record keeping services, primarily to bank trust
departments, pension plan sponsors and investment managers.
ITEM 26. Number of Holders of Securities:
As of September 8, 1998:
Number of
Title of Class Record Holders
- -------------- --------------
Units of beneficial interest, without par value-
Money Market Fund - Institutional Shares....................... 11
Money Market Fund - Investment Shares..........................583
Equity Fund - Institutional Shares ............................ 19
Equity Fund - Investment Shares................................302
Bond Fund - Institutional Shares................................10
Bond Fund - Investment Shares .................................808
ITEM 27. Indemnification:
Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 2 on Form N-1A filed May 23, 1990. (File No. 33-30950).
ITEM 28. Business and Other Connections of Investment Adviser:
For a description of the other business of Compass Bank, the investment adviser,
see the section entitled "Management of the Fund" in Part A.
The Executive Officers of the investment adviser are:
Other Substantial
Business, Profession,
Name Position with the Adviser Vocation, Employment
- ---- ------------------------- ---------------------
ix
<PAGE>
<TABLE>
<S> <C> <C>
D. Paul Jones, Jr. Chairman, President, Chairman, Chief Executive
Chief Executive Officer, Officer, Treasurer and
Treasurer and Director Director of Compass
Bancshares, Inc.; Director of
Golden Enterprises, Inc.
(snack food and metal fastener
production and distribution),
the principal business address
of which is 110 South Sixth
Street, Birmingham, Alabama
35205
E. Lee Harris, Jr. Executive Vice President,
Executive Officer,
Human Resources
Garrett R. Hegel Chief Financial Officer Chief Financial Officer of
Compass Bancshares, Inc.
Jerry W. Powell General Counsel and Secretary General Counsel of Compass
Bancshares, Inc.
G. Ray Stone Senior Executive Vice President, Chief Credit
Policy Officer
Byrd Williams Group Executive Vice Executive Vice President of
President, Chief Retail Compass Bancshares, Inc.
Banking Executive
Michael A. Bean Executive Vice President,
Controller
Christina L. Boles Executive Vice President,
Asset and Liability Management
Eugene C. Boles Executive Vice President, Loan
Administration
Ralph H. Cassell Executive Vice President,
Regional Executive, Community
Banking
</TABLE>
x
<PAGE>
D. Stevenson Ferguson, Jr. Executive Vice President,
Asset Management
James G. Heslop Executive Vice President,
Metro Alabama, Retail
Banking
Thomas E. Lazenby Executive Vice President,
Consumer Finance
Robert S. McKean Executive Vice President,
Regional Executive,
Community Banking
John C. Neiman Executive Vice President,
National Industries
Dewey A. White, III Executive Vice President,
Correspondent and
Investment Services
David N. Wright Executive Vice President,
Southern Region Executive
The business address for each of the above-listed persons is 15 South 20th
Street, Birmingham, Alabama 35233.
The principal business address of Compass Bank, Compass Bancshares, Inc. and
Compass Bancshares Insurance, Inc. is 15 South 20th Street, Birmingham, Alabama
35233.
Directors:
Name Other Substantial Business, Profession Vocation or Employment
- ------------------------------------------------------------------------------
Charles W. Daniel President, Dantract, Inc. (real estate investments),
Suite 100, 200 Office Park Drive, Birmingham, Alabama
35223.
William Eugene Davenport President and Chief Operating Officer of Russell
Lands, Inc. (real estate development), 1 Willowpoint
Road, Alexander City, Alabama 35010.
Marshall Durbin, Jr. President of Marshall Durbin & Company, Inc. (poultry
processing), 3125 Independence Drive, Birmingham,
Alabama 35209.
xi
<PAGE>
Tranum Fitzpatrick Chairman of Guilford Company, Inc. (real estate
development), President of Guilford Capital (real
estate investment) and President of Empire-Rouse
(real estate development) 2600 East South Boulevard,
Montgomery, Alabama 36116.
George W. Hansberry, M.D. Decatur General Hospital (medical services provider)
P.O. Box 2239, Decatur, Alabama 35609-2239 and
Parkway Medical Center (medical services provider)
P.O. Box 2211, Decatur, Alabama 35609-2211.
D. Paul Jones, Jr. Chairman, Chief Executive Officer and Treasurer of
Compass Bancshares, Inc. and Compass Bank; President
of Compass Bank; Director of Golden Enterprises, Inc.
(snack food distribution), 110 South Sixth Street,
Birmingham, Alabama 35205.
Goodwin L. Myrick President and Chairman, Alabama Farmers Federation,
ALFA Corporation, ALFA Insurance Companies and ALFA
Services, Inc. (agriculture and insurance), the
principal address of each of which is 2108 East South
Boulevard, Montgomery, Alabama 36116.
John S. Stein President and Chief Executive Officer of Golden
Foods, Inc. (snack food distribution), 110 South
Sixth Street, Birmingham, Alabama 35205.
All of the members of the Compass Bank Board of Directors are also members of
the Board of Directors of Compass Bancshares, Inc.
ITEM 29. 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:
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
xii
<PAGE>
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/R/ June 1, 1993
The PBHG Funds, Inc. July 16, 1993
Morgan Grenfell Investment Trust January 3, 1994
The Achievement Funds Trust December 27, 1994
Bishop Street Funds January 27, 1995
CrestFunds, Inc. March 1, 1995
STI Classic Variable Trust August 18, 1995
ARK Funds November 1, 1995
Monitor Funds January 11, 1996
SEI Asset Allocation Trust April 1, 1996
TIP Funds April 28, 1996
SEI Institutional Investments Trust June 14, 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
TIP Institutional Funds January 1, 1998
Oak Associates Funds February 27, 1998
The Nevis Funds June 29, 1998
The Parkstone Group of Funds September 14, 1998
The Distributor provides numerous financial services to investment
managers, pension plan sponsors, and bank trust departments. These services
include portfolio evaluation, performance measurement 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.
Position and Offices Position and Offices
Name with Underwriter with Registrant
- ---- ---------------- ---------------
xiii
<PAGE>
<TABLE>
<S> <C> <C>
Alfred P. West, Jr. Director, Chairman of the Board of Directors --
Henry H. Greer Director --
Carmen V. Romeo Director --
Mark J. Held President & Chief Operating Officer --
Gilbert L. Beebower Executive Vice President --
Richard B. Lieb 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 --
Barbara J. Moore Senior Vice President --
Kevin P. Robins Senior Vice President & General Counsel Vice President
& Assistant Secretary
Patrick K. Walsh Senior Vice President --
Robert Aller Vice President --
Gordon W. Carpenter Vice President --
Todd Cipperman Vice President & Assistant Secretary Vice President &
Assistant Secretary
S. Courtney E. Collier Vice President & Assistant Secretary --
Robert Crudup Vice President & Managing Director --
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 Vice President &
Assistant Secretary
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 --
W. Kelso Morrill Vice President --
Mark Nagle Vice President President
Joanne Nelson Vice President --
Joseph M. O'Donnell Vice President & Assistant Secretary Vice President &
Assistant Secretary
Sandra K. Orlow Vice President & Secretary Vice President &
Assistant Secretary
Cynthia M. Parrish Vice President & Assistant Secretary --
Kim Rainey Vice President --
</TABLE>
xiv
<PAGE>
<TABLE>
<S> <C> <C>
Rob Redican Vice President --
Maria Rinehart Vice President --
Mark Samuels Vice President & Managing Director --
Kathryn L. Stanton 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 30. Location of Accounts and Records:
Books or other documents required to be maintained by Section 31(a) of the
Investment Company Act of 1940, as amended (the "1940 Act"), 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 are maintained
at the offices of the Portfolios' Custodian:
Compass Bank
701 S. 32nd Street
Birmingham, AL 35233
(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 Mutual Funds Services
Oaks, PA 19456
(d) With respect to Rules 31a-(b)(5); (6), (9) and (10) and 31a-1(f),
the required books and records are maintained at the offices of
Registrant's Advisors:
Compass Bank
701 S. 32nd Street
Birmingham, AL 35233
Weiss, Peck & Greer, L.L.C.
One New York Plaza
New York, New York 10004
xv
<PAGE>
ITEM 31. Management Services: None.
ITEM 32. Undertakings:
Registrant hereby undertakes to comply with the provisions of Section 16(c) of
the 1940 Act with respect to the removal of Trustees and the calling of special
shareholder meetings by shareholders.
Registrant hereby undertakes to furnish each person to whom a prospectus is
delivered with a copy of the Registrant's latest annual report to shareholders,
upon request and without charge.
xvi
<PAGE>
NOTICE
A copy of the Declaration of Trust of The Expedition Funds is on file with the
Secretary of State of the Commonwealth of Massachusetts and notice is hereby
given that this Registration Statement has been executed on behalf of the Trust
by an officer of the Trust as an officer and by its Trustees as trustees and not
individually and the obligations of or arising out of this Registration
Statement are not binding upon any of the Trustees, officers, or shareholders
individually but are binding only upon the assets and property of the Trust.
xvii
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, as amended, the Registrant has duly caused
this Post-Effective Amendment No. 30 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Oaks, Commonwealth of
Pennsylvania on the 15th day of September, 1998.
THE EXPEDITION FUNDS
By /s/ Mark E. Nagle
------------------------------------
Mark E. Nagle, President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacity on the
dates indicated.
* Trustee September 15, 1998
- ---------------------------
William M. Doran
* Trustee September 15, 1998
- ---------------------------
Dr. Robert A. Patterson
* Trustee September 15, 1998
- ---------------------------
Frank E. Morris
* Trustee September 15, 1998
- ---------------------------
Robert A. Nesher
* Trustee September 15, 1998
- ---------------------------
James M. Storey
* Trustee September 15, 1998
- ---------------------------
Eugene B. Peters
* Trustee September 15, 1998
- ---------------------------
John T. Cooney
/s/ Mark E. Nagle President September 15, 1998
- ---------------------------
Mark E. Nagle
/s/ Robert J. DellaCroce Controller & Chief
- ---------------------------
Robert J. DellaCroce Financial Officer September 15, 1998
*By /s/ Mark E. Nagle
-----------------------
Mark E. Nagle
Attorney-in-Fact
xviii
<PAGE>
EXHIBIT INDEX
Exhibits:
- ---------
EX-99.B1 Declaration of Trust is incorporated herein by reference to
Registrant's Post-Effective Amendment No. 22 on Form N-1A (File
No. 33-30950) filed with the Securities and Exchange Commission
("SEC") on December 29, 1995.
EX-99.B(1)(a) Amendment No. 1 to Declaration of Trust is incorporated herein
by reference as Exhibit (1)(i) to Registrant's Pre-Effective
Amendment No. 1 on Form N-1A (File No. 33-30950) filed with the
SEC on November 16, 1989.
EX-99.B(1)(b) Amendment No. 2 to Declaration of Trust is incorporated herein
by reference as Exhibit (1)(ii) to Registrant's Post-Effective
Amendment No. 1 on Form N-1A (File No. 33-30950) filed with the
SEC on May 21, 1990.
EX-99.B(1)(c) Amendment Nos. 3, 4, and 5 to Declaration of Trust are
incorporated herein by reference as Exhibit (1)(iii) to
Registrant's Post-Effective Amendment No. 3 on Form N-1A (File
No. 33-30950) filed with the SEC on September 11, 1991.
EX-99.B(1)(d) Amendment No. 6 to Declaration of Trust is incorporated herein
by reference as Exhibit (1)(iv) to Registrant's Post-Effective
Amendment No. 5 on Form N-1A (File No. 33-30950) filed with the
SEC on February 14, 1992.
EX-99.B(1)(e) Amendment No. 7 to Declaration of Trust is incorporated herein
by reference as Exhibit (1)(v) to Registrant's Post-Effective
Amendment No. 8 on Form N-1A (File No. 33-30950) filed with the
SEC on September 28, 1992.
EX-99.B(1)(f) Amendment Nos. 8 and 9 to Declaration of Trust are incorporated
herein by reference as Exhibit (1)(vi) to Registrant's Post-
Effective Amendment No. 22 on Form N-1A (File No. 33-30950)
filed with the SEC on December 29, 1995.
EX-99.B(1)(g) Amendment No. 10 to Declaration of Trust is incorporated herein
by reference to Registrant's Post-Effective Amendment No. 26 on
form N-1A filed with the SEC on June 4, 1997.
EX-99.B(1)(h) Amendment No. 12 is incorporated herein by reference as Exhibit
(1)(h) to Registrant's Post-Effective Amendment No. 28 on Form
N-1A (File No. 33-30950) filed with the SEC on January 15,
1998.
EX-99.B(1)(i) Amendment No. 13 is incorporated herein by reference as Exhibit
(1)(i) to Registrant's Post-Effective Amendment No. 28 on Form
N-1A (File No. 33-30950) filed with the SEC on January 15,
1998.
EX-99.B(1)(j) Amendment No. 14 is filed herewith.
xix
<PAGE>
EX-99.B(2) By-Laws are incorporated herein by reference to Registrant's
Post-Effective Amendment No. 22 on Form N-1A (File No. 33-
30950) filed with the SEC on December 29, 1995.
EX-99.B(3) Not Applicable
EX-99.B(4) Specimen Certificate for Shares of Beneficial Interest of The
Starburst Government Income Fund is incorporated herein by
reference as Exhibit (4)(i) to Registrant's Post-Effective
Amendment No. 22 on Form N-1A (File No. 33-30950) filed with
the SEC on December 29, 1995.
EX-99.B(4)(a) Specimen Certificate for Shares of Beneficial Interest of The
Starburst Government Money Market Fund-Investment Shares is
incorporated herein by reference as Exhibit (4)(ii) to
Registrant's Post-Effective Amendment No. 22 on Form N-1A (File
No. 33-30950) filed with the SEC on December 29, 1995.
EX-99.B(4)(b) Specimen Certificate for Shares of Beneficial Interest of The
Starburst Government Money Market Fund-Trust Shares is
incorporated herein by reference as Exhibit (4)(iii) to
Registrant's Post-Effective Amendment No. 22 on Form N-1A (File
No. 33-30950) filed with the SEC on December 29, 1995.
EX-99.B(4)(c) Specimen Certificate for Shares of Beneficial Interest of The
Starburst Money Market Fund-Investment Shares is incorporated
herein by reference as Exhibit (4)(iv) to Registrant's Post-
Effective Amendment No. 22 on Form N-1A (File No. 33-30950)
filed with the SEC on December 29, 1995.
EX-99.B(4)(d) Specimen Certificate for Shares of Beneficial Interest of The
Starburst Money Market Fund-Trust Shares is incorporated herein
by reference as Exhibit (4)(v) to Registrant's Post-Effective
Amendment No. 22 on Form N-1A (File No. 33-30950) filed with
the SEC on December 29, 1995.
EX-99.B(5) Investment Advisory Contract of the Registrant through and
including Exhibit D is incorporated herein by reference as
Exhibit (5)(i) to Registrant's Post-Effective Amendment No. 22
on Form N-1A (File No. 33-30950) filed with the SEC on December
29, 1995.
EX-99.B(5)(a) Investment Management Contract of the Registrant through and
including Exhibit A is incorporated herein by reference as
Exhibit (5)(ii) to Registrant's Post-Effective Amendment No. 22
on Form N-1A (File No. 33-30950) filed with the SEC on December
29, 1995.
EX-99.B(5)(b) Exhibit E to the Investment Advisory Contract relating to The
Expedition Equity Fund is incorporated herein by reference to
Registrant's Post-Effective Amendment No. 29 on Form N-1A (File
No. 33-30950) filed with the SEC on January 30, 1998.
EX-99.B(5)(c) Exhibit F to the Investment Advisory Contract of the Registrant
relating to The Expedition Tax-Free Money Market Fund is filed
herewith.
xx
<PAGE>
EX-99.B(5)(d) Form of Investment Sub-Advisory Agreement between the Advisor
and Weiss, Peck & Greer, L.L.C. is filed herewith.
EX-99.B(6) Distributor's Contract of the Registrant through and including
Exhibit F is incorporated herein by reference to Registrant's
Post-Effective Amendment No. 22 on Form N-1A (File No. 33-
30950) filed with the SEC on December 29, 1995.
EX-99.B(6)(a) Distribution Agreement with SEI Investments Distribution Co. is
incorporated herein by reference to Registrant's Post-Effective
Amendment No. 29 on Form N-1A (File No. 33-30950) filed with
the SEC on January 30, 1998.
EX-99.B(7) Not applicable
EX-99.B(8) Custodian Agreement of the Registrant is incorporated herein by
reference to Registrant's Post-Effective Amendment No. 22 on
Form N-1A (File No. 33-30950) filed with the SEC on December
29, 1995.
EX-99.B(9) Agreement for Fund Accounting, Shareholder Record keeping, and
Custody Services Procurement is incorporated herein by
reference as Exhibit (9)(i) to Registrant's Post-Effective
Amendment No. 20 on Form N-1A (File No. 33-30950) filed with
the SEC on December 28, 1994.
EX-99.B(9)(a) Sales Agreement with Federated Securities Corp. is incorporated
herein by reference as Exhibit (9)(ii) to Registrant's Post-
Effective Amendment No. 17 on Form N-1A (File No. 33-30950)
filed with the SEC on August 3, 1994.
EX-99.B(9)(b) Electronic Communications and Record keeping Agreement is
incorporated herein by reference as Exhibit (9)(iii) to
Registrant's Post-Effective Amendment No. 17 on Form N-1A (File
No. 33-30950) filed with the SEC on August 3, 1994.
EX-99.B(9)(c) Administration Agreement with SEI Fund Resources is
incorporated herein by reference to Registrant's Post-Effective
Amendment No. 29 on Form N-1A (File No. 33-30950) filed with
the SEC on January 30, 1998.
EX-99.B(9)(d) Shareholder Service Plan and Agreement as it related to the
Investment Service Shares is incorporated herein by reference
to Registrant's Post-Effective Amendment No. 29 on Form N-1A
(File No. 33-30950) filed with the SEC on January 30, 1998.
EX-99.B(10) Opinion and Consent of Counsel is incorporated herein by
reference to Registrant's Post-Effective Amendment No. 20 on
Form N-1A (File No. 33-30950) filed with the SEC on December
28, 1994.
EX-99.B(11) Consent of the Independent Auditors is filed herewith.
EX-99.B(12) Not applicable
EX-99.B(13) Initial Capital Understanding is incorporated herein by
reference to Registrant's Pre-Effective Amendment No. 1 on Form
N-1A (File No. 33-30950) filed with the SEC on November 16,
1989.
EX-99.B(14) Not applicable
xxi
<PAGE>
EX-99.B(15) Distribution Plan through and including Exhibit G is
incorporated herein by reference as Exhibit (15)(i) to
Registrant's Post-Effective Amendment No. 22 on Form N-1A (File
No. 33-30950) filed with the SEC on December 29, 1995.
EX-99.B(15)(a) Form of 12b-1 Agreement is incorporated herein by reference as
Exhibit (15)(ii) to Registrant's Post-Effective Amendment No.
24 on Form N-1A (File No. 33-30950) filed with the SEC on
December 27, 1996.
EX-99.B(15)(b) Amended and Restated Distribution Plan is incorporated herein
by reference to Registrant's Post-Effective Amendment No. 26 on
form N1-A filed with the SEC on June 4, 1997.
EX-99.B(15)(c) Distribution and Service Plan for the Class B Shares dated May
18, 1998 is filed herewith.
EX-99.B(16) Schedule of Computation of Fund Performance for The Starburst
Government Income Fund is incorporated herein by reference as
Exhibit (16)(i) to Registrant's Post-Effective Amendment No. 22
on Form N-1A (File No. 33-30950) filed with the SEC on December
29, 1995.
EX-99.B(16)(a) Schedule of Computation of Fund Performance for The Starburst
Government Money Market Fund is incorporated herein by
reference as Exhibit (16)(ii) to Registrant's Post-Effective
Amendment No. 22 on Form N-1A (File No. 33-30950) filed with
the SEC on December 29, 1995.
EX-99.B(16)(b) Schedule of Computation of Fund Performance for The Starburst
Money Market Fund is incorporated herein by reference as
Exhibit (16)(iii) to Registrant's Post-Effective Amendment No.
22 on Form N-1A (File No. 33-30950) filed with the SEC on
December 29, 1995.
EX-99.B(18) Multiple Class Plan of the Registrant is incorporated herein by
reference to Registrant's Post-Effective Amendment No. 24 on
Form N-1A (File No. 33-30950) filed with the SEC on December
27, 1996.
EX-99.B(18)(a) Rule 18f-3 Multiple Class Plan of May, 1998 is filed herewith.
EX-99.B(24) Powers of Attorney for Dr. Robert A. Patterson, Eugene B.
Peters, Frank E. Morris, Robert A. Nesher, William M. Doran,
James M. Storey, John T. Cooney and Mark E. Nagle are filed
herewith.
EX-27.1 Financial Data Schedule for The Expedition Funds Money Market
Fund Investment Service Class filed herewith.
EX-27.2 Financial Data Schedule for The Expedition Funds Money Market
Fund Institutional Class is filed herewith.
EX-27.3 Financial Data Schedule for The Expedition Funds Bond Fund
Investment Class is filed herewith.
EX-27.4 Financial Data Schedule for The Expedition Funds Bond Fund
Institutional Class is filed herewith.
EX-27.5 Financial Data Schedule for The Expedition Funds Equity Fund
Institutional Class is filed herewith.
xxii
<PAGE>
EX-27.6 Financial Data Schedule for The Expedition Funds Equity Fund
Investment Class is filed herewith.
xxiii
<PAGE>
EX.99.B(1)(J)
THE EXPEDITION FUNDS
AMENDMENT NO. 14
TO
DECLARATION OF TRUST
DATED AUGUST 7, 1989
THIS Declaration of Trust is amended as follows:
Strike the first paragraph of Section 5 of Article III from the Declaration
of Trust, and all preceeding amendments thereto, and substitute in its place the
following:
"Section 5. Establishment and Designation of Series or Class. Without
------------------------------------------------------------
limiting the authority of the Trustees set forth in Article XII, Section 8,
inter alia, to establish and designate any additional series or class or to
modify the rights and preferences of any existing Series or Class, the series
and classes of the Trust are established and designated as:
The Expedition Equity Fund
Institutional Shares
Investment Shares
The Expedition Bond Fund
Institutional Shares
Investment Shares
The Expedition Money Market Fund
Institutional Shares
Investment Service Shares
The Expedition Tax-Free Money Market Fund
Institutional Shares
Investment Service Shares
The undersigned being the President and Secretary of The Expedition Fund
(the "Trust") do hereby certify that the above stated Amendment is a true and
correct copy of the Amendment to the Declaration of Trust, as adopted by the
Board of Trustees on the 23rd day of February, 1998.
Witness my hand this 23rd day of February 1998:
/s/ David G. Lee /s/ John H. Grady, Jr.
- ------------------------------ ----------------------------
David G. Lee, President John H. Grady, Jr., Secretary
<PAGE>
EX.99.B(5)(C)
EXHIBIT F
THE EXPEDITION TAX-FREE MONEY MARKET FUND
For all services rendered by Adviser hereunder. The Trust shall pay to
Adviser and Adviser agrees to accept as full compensation for all services
rendered hereunder, an annual investment advisory fee equal to .40% of 1% of the
average daily net assets of the Fund.
The fee shall be accrued daily at the rate of 1/365th of .40% of 1% applied
to the daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this 1st day of April, 1998.
Compass Bank
Attest: /s/ Tuyet Storm By: /s/ Steve Brownlow
----------------------- -----------------------------------
Title: Senior Vice President
The Expedition Funds
Attest: /s/ Donna M. Rafa By: /s/ Kevin Robins
----------------------------- ----------------------------------
Title: Vice President
<PAGE>
EX.99.B(5)(D)
THE EXPEDITION FUNDS
FORM OF INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT executed as of ___________, 1998 by and between Compass Bank
(the "Adviser") and Weiss, Peck & Greer, L.L.C., a limited liability Company
organized under the laws of the State of Delaware, an investment advisor
registered under the Investment Advisors Act of 1940, as amended (the "Sub-
Adviser").
WHEREAS, the Adviser is the investment manager for Expedition Funds
(the "Trust"), an open-end management investment company registered under the
Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, the Adviser desires to retain the Sub-Adviser as its agent to
furnish investment advisory services for the Tax Free Money Market Fund, a
diversified investment portfolio of the Trust (the "Fund").
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. Appointment. The Adviser hereby appoints the Sub-Adviser to
------------
provide certain investment sub-advisory services to the Fund for the period and
on the terms set forth in this Agreement. The Sub-Adviser accepts such
appointment and agrees to furnish the services herein set forth for the
compensation herein provided.
2. Delivery of Documents. The Adviser has furnished the Sub-Adviser
----------------------
with copies of each of the following:
(a) the Trust's Declaration of Trust, as filed with the Secretary
of State of the State of Massachusetts on August 7, 1989, and all amendments
thereto or restatements thereof (such Declaration of Trust, as presently in
effect and as it shall from time to time be amended or restated, is herein
called the "Declaration of Trust");
(b) the Trust's By-Laws and all amendments thereto;
(c) the resolutions of the Trust's Board of Trustees authorizing
the appointment of the Sub-Adviser and approving this Agreement;
(d) the Trust's Notification of Registration on Form N-8A under
the 1940 Act, as filed with the Securities and Exchange Commission (the "SEC")
on August 7, 1989 and all amendments thereto;
(e) the Trust's Registration Statement on Form N-1A under the
Securities Act of 1933, as amended (the "1933 Act") and under the 1940 Act as
filed with the SEC and all amendments thereto insofar as such Registration
Statement and such amendments relate to the Fund;
<PAGE>
(f) the Trust's most recent prospectuses and Statement of
Additional Information for the Funds (such prospectuses and Statement of
Additional Information, as presently in effect, and all amendments and
supplements thereto are herein collectively called the "Prospectuses"); and
(g) any other information reasonably needed by the Sub-Adviser to
satisfy its obligations under this Agreement.
The Adviser will furnish the Sub-Adviser from time to time with
copies of all amendments of or supplements to the foregoing and information on
changes to the Trust's service providers.
The Sub-Adviser has furnished the Adviser with a copy of the Sub-
Adviser's Form ADV Part II.
3. Management. Subject always to the supervision of the Trust's
-----------
Board of Trustees and the Adviser, the Sub-Adviser will furnish an investment
program in respect of, and make investment decisions for, all assets of the Fund
and place all orders for the purchase and sale of securities, all on behalf of
the Fund. In the performance of its duties the Sub-Adviser will satisfy its
fiduciary duties to the Fund (as set forth in Section 8 below), and will monitor
the Fund's investments, and will comply with the provisions of the Trust's
Declaration of Trust and By-Laws, as amended from time to time, and the stated
investment objectives, policies and restrictions of the Funds as set forth in
the prospectus of the Fund, as amended from time to time. The Sub-Adviser and
the Adviser will each make its officers and employees available to the other
from time to time at reasonable times to review investment policies of the Fund
and to consult with each other regarding the investment affairs of the Fund and
the Sub-Adviser will at all times act consistently with the instructions and
directions given to it by the Adviser. The Sub-Adviser shall also make itself
reasonably available to the Board of Trustees of the Trust at such times as the
Board of Trustees shall request.
The Sub-Adviser represents and warrants that it is in compliance
with all applicable rules and regulations of the SEC pertaining to its
investment advisory activities and agrees that it:
(a) will conform with all applicable rules and regulations of the
SEC pertaining to its investment advisory activities;
(b) will place orders pursuant to its investment determinations
for the Fund either directly with the issuer or with any broker or dealer. In
placing orders with brokers or dealers, the Sub-Adviser will attempt to obtain
the best combination of prompt execution of orders in an effective manner and at
the most favorable price. 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 the
other clients of the Sub-Adviser, the Sub-Adviser, to the extent permitted by
applicable laws and regulations, may, but shall be under no obligation to,
aggregate the securities to be so purchased or sold in order to obtain the most
favorable price or lower brokerage commissions and efficient execution.
Consistent with this obligation, when the execution and price offered by two or
more brokers or dealers are comparable, the Sub-Adviser may, in its discretion,
purchase and sell portfolio securities to and from brokers and dealers who
provide the Sub-Adviser with research, advice and other services. In no
<PAGE>
instance will portfolio securities be purchased from or sold to the Adviser, the
Sub-Adviser, SEI Financial Services Company or any affiliated person of either
the Trust, the Adviser, SEI Financial Services Company or the Sub-Adviser,
except as may be permitted under the 1940 Act;
(c) will report regularly to the Adviser and will make
appropriate persons available for the purpose of reviewing at reasonable times
with representatives of the Adviser and the Board of Trustees of the Trust the
management of each of the Funds, including, without limitation, review of the
general investment strategy of each of the Funds, the performance of each of the
Funds in relation to standard industry indices, interest rate considerations and
general conditions affecting the marketplace and will provide various other
reports from time to time as reasonably requested by the Adviser;
(d) will maintain books and records with respect to the Trust's
securities transactions which it has affected and will furnish the Adviser and
the Board of Trustees of the Trust such periodic and special reports as the
Board of Trustees or the Adviser may request;
(e) will act upon instructions from the Adviser not inconsistent
with the fiduciary duties hereunder; and
(f) will treat confidentially and as proprietary information of
the Trust all such records and other information relative to the Trust
maintained by the Sub-Adviser, and will not use such records and information for
any purpose other than performance of its responsibilities and duties hereunder,
except after prior notification to and approval in writing by the Trust, which
approval shall not be unreasonably withheld and may not be withheld where the
Sub-Adviser may be exposed to civil or criminal contempt proceeding for failure
to comply, when requested to divulge such information by duly constituted
authorities, or when so requested by the Trust. The Sub-Adviser further
acknowledges and agrees that (i) the names "Expedition" and " Expedition Funds"
are the property of the Adviser, and (ii) the Sub-Adviser will publicly
disseminate information concerning the Fund and the Trust only if such
information has been approved in advance by the Adviser.
The Sub-Adviser shall have the right to execute and deliver, or cause
its nominee to execute and deliver, all proxies and notices of meetings and
other notices affecting or relating to the securities of the Fund.
The Sub-Adviser hereby warrants that it is not presently, nor has it
been in the past three years, nor has it been advised that it may be in the
future, the subject of a Securities and Exchange Commission investigative
proceeding or a proceeding by any state securities commission, nor the subject
of any disciplinary hearing by a self-regulatory organization or other
governmental or quasi-governmental body.
4. Books and Records. In compliance with the requirements of Rule
------------------
31a-3 under the 1940 Act, the Sub-Adviser hereby agrees that all records which
it maintains for the Trust are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon
<PAGE>
the Trust's request. The Sub-Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-1 under the 1940 Act.
5. Expenses. During the term of this Agreement, the Sub-Adviser
---------
will pay all expenses incurred by it in connection with its activities under
this Agreement other than the cost of securities (including brokerage
commissions, if any) purchased for the Trust.
6. Compensation. For the services provided and the expenses assumed
-------------
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
payable monthly, in accordance with Schedule A hereto. The fee shall be based on
----------
the average daily net assets for the month involved.
7. Services to Others. The Adviser understands, and has advised the
-------------------
Trust's Board of Trustees, that the Sub-Adviser now acts, and may in the future
act, as an investment adviser to fiduciary and other managed accounts, and as
investment adviser, sub-investment adviser, and/or administrator to other
investment companies. The Adviser acknowledges that the Sub-Adviser may give
advice and take action in the performance of its duties with respect to any of
its other clients which may differ from advice given, or the time or nature of
action taken, with respect to the Fund, so long as it is the Sub-Adviser's
policy, to the extent practicable, to allocate investment opportunities to the
Fund over a period of time on a fair and equitable basis relative to other
clients. Nothing in this Agreement shall be deemed to impose upon the Sub-
Adviser any obligation to purchase or sell for the Fund any security or property
which the Sub-Adviser, its principals, affiliates or employees may purchase or
sell for its or their own accounts or for the account of any other client, if in
the sole discretion of the Sub-Adviser such transaction or investment appears
unsuitable, impractical or undesirable for the Fund. In addition, the Adviser
understands, and has advised the Trust's Board of Trustees, that the persons
employed by the Sub-Adviser to assist in the Sub-Adviser's duties under this
Agreement will not devote their full time to such service and nothing contained
in this Agreement will be deemed to limit or restrict the right of the Sub-
Adviser or any of its affiliates to engage in and devote time and attention to
other businesses or to render services whatever kind or nature. Provided,
further, that notwithstanding the above, the Sub-Adviser shall provide its
services reasonably, and make itself available to the Adviser or the Board of
Trustees at reasonable times, in accordance with the provisions of paragraph 3.
8. Limitation of Liability. The Adviser will not take any action
------------------------
against the Sub-Adviser to hold the Sub-Adviser liable for any loss suffered by
the Fund in connection with the performance of the Sub-Adviser's duties under
this Agreement, except a loss resulting from the Sub-Adviser's willful
misfeasance, bad faith, or negligence in the performance of its duties under
this Agreement.
9. Duration and Termination. This Agreement will become effective
-------------------------
as to the Fund on the first day the Fund's shares are offered to the public
provided that it has been approved by vote of a majority of the outstanding
voting securities of the Fund in accordance with the requirements under the 1940
Act, and, unless sooner terminated as provided herein, will continue in effect
for one year.
<PAGE>
Thereafter, if not terminated, this Agreement will continue in effect
for successive periods of 12 months, each ending on the day preceding the
anniversary of the Agreement's effective date of each year, provided that such
--------
continuation is specifically approved at least annually (a) by the vote of a
majority of those members of the Trust's Board of Trustees who are not
interested persons of the Trust, the Sub-Adviser, or the Adviser, 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 the vote of a majority
of all votes attributable to the outstanding shares of the Fund. Notwithstanding
the foregoing, this Agreement may be terminated by the Adviser, the Trust's
Board of Trustees or by a vote of the majority of the outstanding voting
securities of the Fund at any time, without the payment of any penalty, on sixty
(60) days' written notice to the Sub-Adviser and may be terminated by the Sub-
Adviser at any time by ninety (90) days' written notice to the Adviser and the
Fund. This Agreement will immediately terminate in the event of its assignment
or upon termination of the investment advisory agreement between the Adviser and
the Trust with regard to the Fund (As used in this Agreement, the terms
"majority of the outstanding voting securities", "interested persons" and
"assignment" have the same meaning of such terms in the 1940 Act.).
This Agreement will terminate automatically if the advisory agreement
between the Trust and the Adviser is terminated.
10. Amendment of this Agreement. No provision of this Agreement may
----------------------------
be changed, waived, discharged or terminated orally, but only by an instrument
in writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
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 Adviser, at 15 S. 20/th/ Street, Birmingham, AL 35233, Attention:
President and if to the Sub-Adviser at: 1 New York Plaza, New York, NY 10004-
1950, Attention: Arthur L. Schwarz. The Sub-Adviser shall notify the Adviser of
any change in the membership of the Sub-Adviser's partnership within a
reasonable time after such change.
12. Miscellaneous. The captions in this Agreement are included for
--------------
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement is held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement will not be affected
thereby. This Agreement will be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and will be governed by the
laws of the state of Massachusetts.
The name "Expedition Funds" and "Trustees of Expedition Funds" refers
respectively to the Trust created by, and the Trustees, as trustees but not
individually or personally, acting from time to time under, the Articles of
Trust, to which reference is hereby made and a copy of which is on file at the
office of the Secretary of State of Massachusetts and elsewhere as required by
law, and to any and all amendments thereto so filed or hereafter filed. The
obligations of "Expedition Funds" entered in the name or on behalf thereof by
any of the Trustees, representatives or agents are made not individually but
only in such capacities and are not binding upon any of the Trustees,
<PAGE>
shareholders or representatives of the Trust personally, but bind only the
assets of the Trust, and persons dealing with the Fund must look solely to the
assets of the Trust belonging to such Fund for the enforcement of any claims
against the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
COMPASS BANK
By:
Name:
Title:
WEISS, PECK & GREER, L.L.C.
By:
Name:
Title:
<PAGE>
SCHEDULE A
TO
INVESTMENT SUB-ADVISORY AGREEMENT
DATED
______________, 1998
The Adviser shall pay to the Sub-Adviser compensation with respect to the Tax-
Free Money Market Portfolio at an annual rate as follows:
.075% of average daily net assets up to $150 million
.05% of average daily net assets between $150 - $500 million
.04% of average daily net assets between $500 million - $1 billion
.03% of average daily net assets over $1 billion
<PAGE>
EX.99.B(11)
CONSENT OF INDEPENDENT AUDITORS
The Expedition Funds:
We consent to the incorporation by reference in Post-Effective Amendment No. 30
to Registration Statement No. 33-30950 of our report dated December 5, 1997
appearing in the Annual Report to Shareholders-October 31, 1997 and to the
reference to us under the caption "Financial Highlights" appearing in the
Prospectus, which is a part of such Registration Statement.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Princeton, New Jersey
September 16, 1998
<PAGE>
EX.99.B(15)(C)
THE EXPEDITION FUNDS
DISTRIBUTION AND SERVICE PLAN
CLASS B SHARES
WHEREAS, The Expedition Funds (the "Trust") is engaged in business as an
open-end investment company registered under the Investment Company Act of 1940,
as amended ("1940 Act"); and
WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that the following Distribution and Service Plan (the
"Plan") will benefit the Trust and the owners of the Class B Shares of certain
portfolios (the "Shareholders") of the Trust.
NOW, THEREFORE, the Trustees of the Trust hereby adopt this Distribution
and Service Plan pursuant to Rule 12b-1 under the 1940 Act and in accordance
with Rule 18f-3 under the 1940
Act.
SECTION 1. The Trust has adopted this Plan to enable the Trust to
----------
directly or indirectly bear expenses relating to (a) the distribution and sale
of Class B Shares (collectively, the "Shares") of the portfolios of the Trust,
as now in existence or hereinafter created from time to time, (each, a
"Portfolio"), and (b) the shareholder servicing of such Shares.
SECTION 2. Distribution Activities.
----------
(a) The Shares of each Portfolio are authorized to pay the principal
underwriter of the Shares (the "Distributor") a total fee in connection
with distribution-related services provided in respect of such class,
calculated and payable monthly, at the annual rate rate of .75% of the
value of the average daily net assets of such class.
(b) The fee paid pursuant to this Section 2 may be used by the Distributor to
provide initial and ongoing sales compensation to its investment executives
and to other broker-dealers in respect of sales of Shares of the applicable
Portfolios and to pay for other advertising and promotional expenses in
connection with the distribution of the Shares. These advertising and
promotional expenses include, by way of example but not by way of
limitation, costs of printing and mailing prospectuses, statements of
additional information and shareholder reports to prospective investors;
preparation and distribution of sales literature; advertising of any type;
an allocation of overhead and other expenses of the Distributor related to
the distribution of the Shares; and payments to, and expenses of, officers,
employees or representatives of the Distributor, of other broker-dealers,
banks or other financial institutions, and of any other persons who
provide support services in connection with the distribution of the Shares,
including travel, entertainment, and telephone expenses.
<PAGE>
(c) Payments under this Section of the Plan are not tied exclusively to the
expenses for distribution-related activities actually incurred by the
Distributor, so that such payments may exceed expenses actually incurred by
the Distributor. The Trust's Board of Trustees will evaluate the
appropriateness of the Plan and its payment terms on a continuing basis and
in doing so will consider all relevant factors, including expenses borne by
the Distributor and amounts it receives under the Plan.
(d) The Trust's investment adviser and the Distributor may, at their option and
in their sole discretion, make payments from their own resources to cover
costs of additional distribution.
SECTION 3. Shareholder Servicing Activities.
----------
(a) In addition to the amounts set forth in Section 2 above, the Shares of each
Portfolio are authorized to pay the Distributor a fee in connection with
the personal, ongoing servicing of shareholder accounts of such Shares,
calculated and payable monthly, at the annual rate of .25% of the value of
the average daily net assets of such class.
(b) The service fee payable to the Distributor pursuant to this Section 3
hereof may be used by the Distributor to provide compensation for personal,
ongoing servicing and/or maintenance of shareholder accounts with respect
to the Shares of the applicable Portfolios. Compensation may be paid by the
Distributor, or any portion of the fee may be reallowed, to persons,
including employees of the Distributor, and institutions who respond to
inquiries of holders of the Shares regarding their ownership of Shares or
their accounts with the Trust or who provide other administrative or
accounting services not otherwise required to be provided by the Trust's
investment adviser, transfer agent or other agent of the Trust.
Notwithstanding the foregoing, if the National Association of Securities
Dealers, Inc. (the "NASD") adopts a definition of "service fee" for
purposes of Section 2830(d) of its Conduct Rules that differs from the
definition of shareholder servicing activities in this paragraph, or if the
NASD adopts a related definition intended to define the same concept, the
definition of shareholder servicing activities in this paragraph shall be
automatically amended, without further action of the parties, to conform to
such NASD definition.
(c) Payments under this Section of the Plan are not tied exclusively to the
expenses for shareholder servicing activities actually incurred by the
Distributor, so that such payments may exceed expenses actually incurred by
the Distributor. The Trust's Board of Trustees will evaluate the
appropriateness of the Plan and its payment terms on a continuing basis and
in doing so will consider all relevant factors, including expenses borne by
the Distributor and amounts it receives under the Plan.
(d) The Trust's investment adviser and the Distributor may, at their option and
in their sole discretion, make payments from their own resources to cover
costs of additional
2
<PAGE>
shareholder servicing activities.
SECTION 4. This Plan shall not take effect with respect to a Portfolio
----------
until it has been approved by shareholders if and to the extent required by Rule
12b-1 underthe 1940 Act and, together with any related agreements, by votes of
the majority of both (i) the Trustees of the Trust and (ii) the Qualified
Trustees, cast in person at a Board of Trustees meeting called for the purpose
of voting on this Plan or such agreement.
SECTION 5. This Plan shall continue in effect for a period of more than
----------
one year after it takes effect only for so long as such continuance is
specifically approved at least annually in the manner provided in Part (b) of
Section 4 herein for the approval of this Plan.
SECTION 6. Any person authorized to direct the disposition of monies paid
----------
or payable by the Trust pursuant to this Plan or any related agreement shall
provide to the Trustees of the Trust, at least quarterly, a written report of
the amounts so expended and the purposes for which such expenditures were made.
SECTION 7. This Plan may be terminated at any time with respect to any
----------
Portfolio by the vote of a majority of the Qualified Trustees or by vote of a
majority of the Portfolio's outstanding Shares.
SECTION 8. All agreements with any person relating to implementation of
----------
this Plan shall be in writing, and any agreement related to this Plan shall
provide (a) that such agreement may be terminated at any time with respect to
any Portfolio, without payment of any penalty, by the vote of a majority of the
Qualified Trustees or by the vote of shareholders holding a majority of the
Portfolio's outstanding Shares, on not more than 60 days written notice to any
other party to the agreement; and (b) that such agreement shall terminate
automatically in the event of its assignment.
SECTION 9. This Plan may not be amended to increase materially the amount
----------
of distribution expenses permitted pursuant to Section 2 hereof without the
approval of shareholders holding a majority of the outstanding Shares of the
applicable Portfolio, and all material amendments to this Plan shall be approved
in the manner provided in Section 4 (b) herein for the approval of this Plan.
SECTION 10. As used in this Plan, (a) the term "Qualified Trustees" shall
-----------
mean those Trustees of the Trust who are not interested persons of the Trust,
and have no direct or indirect financial interest in the operation of this Plan
or any agreements related to it, and (b) the terms "assignment" and "interested
person" shall have the respective meanings specified in the 1940 Act and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the SEC.
3
<PAGE>
SECTION 11. While this Plan is in effect, the selection and nomination of
-----------
those Trustees who are not interested persons of the Trust within the meaning of
Section 2(a)(19) of the 1940 Act shall be committed to the discretion of the
Trustees then in office who are not interested persons of the Trust.
SECTION 12. This Plan shall not obligate the Trust or any other party to
-----------
enter into an agreement with any particular person.
May 18, 1998
4
<PAGE>
EX.99.B(18)(A)
EXPEDITION FUNDS
AMENDED AND RESTATED RULE 18F-3
MULTIPLE CLASS PLAN
MAY 1998
The Expedition Funds (the "Trust"), a registered investment company that
currently consists of a number of separately managed funds, has elected to rely
on Rule 18f-3 under the Investment Company Act of 1940, as amended (the "1940
Act"), in offering multiple classes of shares in each fund listed on Schedule A
hereto (each a "Fund" and together the "Funds").
A. ATTRIBUTES OF SHARE CLASSES
1. The rights of each class of shares of the Funds shall be as set forth in
the respective Certificate of Class Designation for each class (each a
"Certificate") as each such Certificate is attached as Exhibits hereto.
2. With respect to each class of shares created hereunder, each share of a
Fund will represent an equal pro rata interest in the Fund and will have
--- ----
identical terms and conditions, except that: (i) each new class will have
a different class name (or other designation) that identifies the class as
separate from any other class; (ii) each class will be offered and sold
only to investors meeting the qualifications set forth in the Certificate
and disclosed in the Trust's Prospectus; (iii) each class will separately
bear any distribution fees that are payable in connection with a
distribution plan adopted pursuant to Rule 12b-1 under the 1940 Act (a
"Distribution Plan"), and separately bear any other service fees ("service
fees") that are payable under any service agreement entered into with
respect to that class which are not contemplated by or within the scope of
the Distribution Plan; (iv) each class may bear, consistent with rulings
and other published statements of position by the Internal Revenue
Service, the expenses of the Fund's operations which are directly
attributable to such class ("Class Expenses"); and (v) shareholders of
each class will have exclusive voting rights regarding any matter
submitted to shareholders that relates solely to such class (such as a
Distribution Plan or service agreement relating to such class), and will
have separate voting rights on any matter submitted to shareholders in
which the interests of that class differ from the interests of any other
class.
B. EXPENSE ALLOCATIONS
1. With respect to each Fund, the expenses of each class shall be allocated
as follows: (i) any Rule 12b-1 fees relating to a particular class of
shares associated with a Distribution Plan or service fees relating to a
particular class of shares are (or will be) borne exclusively by that
class; (ii) any incremental transfer agency fees relating to a particular
class are (or will be) borne exclusively by that class; and (iii) Class
Expenses relating to a particular class are (or will be) borne exclusively
by that class.
2. Non-class specific expenses shall be allocated in accordance with Rule
18f-3(c).
<PAGE>
C. AMENDMENT OF PLAN; PERIODIC REVIEW
1. This Plan must be amended to properly describe (through additional
Exhibits hereto) each new class of shares upon its approval by the Board.
2. The Board of Trustees of the Trust, including a majority of the Trustees
who are not "interested persons" of the Trust as defined in the 1940 Act,
must review this Plan at least annually for its continued appropriateness,
and must approve any material amendment of the Plan as it relates to any
class covered by the Plan. In approving any material amendment to the
Plan, the Trustees, including a majority of the Trustees who are not
interested persons of the Trust, must find that the amendment is in the
best interests of each class individually and the Trust as a whole.
<PAGE>
Schedule A
----------
Expedition Funds
- ------------------------------------------------------------------------------
CLASS
-----------------------------------------------
MONEY MARKET FUNDS INVESTMENT INVESTMENT INSTITUTIONAL CLASS B
SERVICE
- ------------------------------------------------------------------------------
Money Market Fund X -- X --
- ------------------------------------------------------------------------------
Tax-Exempt Money Market Fund X -- X --
- ------------------------------------------------------------------------------
NON-MONEY MARKET FUNDS
- ------------------------------------------------------------------------------
Bond Fund -- X X X
- ------------------------------------------------------------------------------
Equity Fund -- X X X
- ------------------------------------------------------------------------------
<PAGE>
Exhibit A
EXPEDITION FUNDS
CERTIFICATE OF CLASS DESIGNATION
Institutional Shares
1. Class-Specific Distribution Arrangements, Other Expenses
--------------------------------------------------------
Institutional Shares are sold without a load or sales charge and are not
subject to a Rule 12b-1 fee.
2. Eligibility of Purchasers
-------------------------
Institutional Shares do not require a minimum initial investment and are
available primarily to customers of the Asset Management Group of Compass
Bank or any affiliate or division of any affiliate or any correspondent of
Compass Bank, or any affiliate providing fiduciary, trust, agency, private
banking or similar services.
3. Exchange Privileges
-------------------
Institutional Shares of each Fund may be exchanged for Institutional Shares
of each other Fund of the Trust in accordance with the procedures disclosed
in the Fund's Prospectus and subject to any applicable limitations resulting
from the closing of Funds to new investors.
4. Voting Rights
-------------
Each Institutional Shares shareholder will have one vote for each full
Institutional Share held and a fractional vote for each fractional
Institutional Share held. Institutional shareholders will have exclusive
voting rights regarding any matter submitted to shareholders that relates
solely to Institutional Shares (such as a distribution plan or service
agreement relating to Institutional Shares), and will have separate voting
rights on any other matter submitted to shareholders in which the interests
of the Institutional Shares Shareholders differ from the interests of
holders of any other class.
5. Conversion Rights
-----------------
Institutional Shares do not have a conversion feature.
<PAGE>
Exhibit B
EXPEDITION FUNDS
CERTIFICATE OF CLASS DESIGNATION
Investment Shares
1. Class-Specific Distribution Arrangements; Other Expenses
--------------------------------------------------------
The Investment Shares are sold with a load or sales charge (as described in
the prospectus) and may be subject to a Rule 12b-1 fee. The Trust, on behalf
of the each Fund, will make monthly payments to the Distributor under the
Distribution Plan approved by the Board of Trustees at an annual rate of up
to .25% of each Fund's average daily net assets attributable to the
Investment Shares. The Distributor will use its fee for expenses associated
with the promotion and sale of the Fund's Investment Shares including,
without limitation, travel and communication expenses and expenses for the
compensation of and benefits for sales personnel.
2. Eligibility of Purchasers
-------------------------
Investment Shares require a minimum initial investment of $1,000 and
subsequent minimum investment of $500, and are available to customers of
Compass Bank and its correspondents and affiliates. who desire a convenient
means of.
3. Exchange Privileges
-------------------
Investment Shares may be exchanged for Investment Shares of each other Fund
of the Trust in accordance with the procedures disclosed in the Fund's
Prospectus and subject to any applicable limitations resulting from the
closing of Funds to new investors.
4. Voting Rights
-------------
Each Investment Shares shareholder will have one vote for each full
Investment Share held and a fractional vote for each fractional Investment
Share held. Investment Shares shareholders will have exclusive voting rights
regarding any matter submitted to shareholders that relates solely to the
Investment Shares (such as a distribution plan or service agreement relating
to the Investment Shares), and will have separate voting rights on any other
matter submitted to shareholders in which the interests of the Investment
Shares shareholders differ from the interests of holders of any other class.
5. Conversion Rights
-----------------
Investment Shares do not have a conversion feature.
<PAGE>
Exhibit C
EXPEDITION FUNDS
CERTIFICATE OF CLASS DESIGNATION
Investment Service Shares
1. Class-Specific Distribution Arrangements; Other Expenses.
---------------------------------------------------------
Investment Service Shares are sold without a load or sales charge or Rule
12b-1 fee, but are subject to a shareholder servicing fee. The Trust, on
behalf of each Fund, will make monthly payments to the Distributor under the
Shareholder Service Plan approved by the Board of Trustees at an annual rate
of up to .25% of each Fund's average daily net assets attributable to
Investment Service Shares. The Distributor will use the fee it receives in
connection with its provision of shareholder or account maintenance
services, or to compensate service providers for providing ongoing account
maintenance and other services to Investment Service Share shareholders
(including, where applicable, any underlying beneficial owners) identified
in the Shareholder Service Plan.
2. Eligibility of Purchasers
-------------------------
Investment Service Shares do not require a minimum initial investment and
are available to customers of Compass Bank and its affiliates, and
correspondents of Compass Bank and its affiliates, including customers of
the Asset Management Group of Compass Bank or of any affiliate or any
division of any affiliate or any correspondent of Compass Bank or any
affiliate providing fiduciary, trust, agency, private banking or similar
services, and customers of divisions and affiliates of Compass Bank and
other affiliates of Compass Bancshares providing brokerage and investment
services.
3. Exchange Privileges
-------------------
Investment Service Shares of each Fund may be exchanged for Investment
Service Shares of each other Fund of the Trust in accordance with the
procedures disclosed in the Fund's Prospectus and subject to any applicable
limitations resulting from the closing of Funds to new investors.
4. Voting Rights
-------------
Each Investment Service shareholder will have one vote for each full
Investment Service Share held and a fractional vote for each fractional
Investment Service Share held. Investment Service shareholders will have
exclusive voting rights regarding any matter submitted to shareholders that
relates solely to Investment Service Shares (such as a distribution plan or
service agreement relating to Investment Service Shares), and will have
separate voting rights on any other matter submitted to shareholders in
which the interests of Investment Service shareholders differ from the
interests of holders of any other class.
5. Conversion Rights
-----------------
Investment Service Shares do not have a conversion feature.
<PAGE>
Exhibit D
EXPEDITION FUNDS
CERTIFICATE OF CLASS DESIGNATION
Class B Shares
1. Class-Specific Distribution Arrangements; Other Expenses
--------------------------------------------------------
The Class B Shares are sold subject to a contingent deferred sales charge
(as described in the prospectus), and may be subject to a Rule 12b-1 fee and
a shareholder servicing fee. The Trust, on behalf of the each Fund, will
make monthly payments to the Distributor under the Distribution Plan
approved by the Board of Trustees at an annual rate of up to .75% of each
Fund's average daily net assets attributable to the Class B Shares. The
Distributor will use its fee for expenses associated with the promotion and
sale of the Fund's Class B Shares including, without limitation, travel and
communication expenses and expenses for the compensation of and benefits for
sales personnel. The Trust, on behalf of each Fund, will also make monthly
payments to the Distributor under the Shareholder Service Plan approved by
the Board of Trustees at an annual rate of up to .25% of each Fund's average
daily net assets attributable to Class B Shares. The Distributor will use
the fee it receives in connection with its provision of shareholder or
account maintenance services, or to compensate service providers for
providing ongoing account maintenance and other services to Investment
Service Share shareholders (including, where applicable, any underlying
beneficial owners) identified in the Shareholder Service Plan.
2. Eligibility of Purchasers
-------------------------
Class B Shares require a minimum initial investment of $1,000 and subsequent
minimum investment of $500, and are available to customers of Compass Bank
and its correspondents and affiliates.
3. Exchange Privileges
-------------------
Class B Shares may be exchanged for Class B Shares of each other Fund of the
Trust in accordance with the procedures disclosed in the Fund's Prospectus
and subject to any applicable limitations resulting from the closing of
Funds to new investors.
4. Voting Rights
-------------
Each Class B Shares shareholder will have one vote for each full Class B
Share held and a fractional vote for each fractional Class B Share held.
Class B Shares shareholders will have exclusive voting rights regarding any
matter submitted to shareholders that relates solely to the Class B Shares
(such as a distribution plan or service agreement relating to the Class B
Shares), and will have separate voting rights on any other matter submitted
to shareholders in which the interests of the Class B Shares shareholders
differ from the interests of holders of any other class.
5. Conversion Rights
-----------------
Class B Shares of a Fund will automatically convert into Investment Shares
of that Fund without a sales charge after five years from the acquisition of
the Class B Shares. The conversion will take place at the respective net
asset values of each of the classes. At that time the Shares will no longer
be subject to the higher distribution and service fees. When Class B Shares
of a Fund convert, any other Class B Shares that were acquired by the
reinvestment of dividends and distributions attributable to such Shares will
also convert into Investment Shares.
<PAGE>
EX.99.B(24)
THE ARBOR FUND
THE ADVISORS' INNER CIRCLE FUND
THE EXPEDITION FUNDS
OAK ASSOCIATES FUNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced funds (the "Trusts"), each a business trust
organized under the laws of The Commonwealth of Massachusetts, hereby
constitutes and appoints Mark E. Nagle, Joseph M. O'Donnell and Kevin P. Robins,
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: 9-11-98
- ------------------------------------- ---------------
Robert A. Nesher, Trustee
<PAGE>
THE ARBOR FUND
THE ADVISORS' INNER CIRCLE FUND
THE EXPEDITION FUNDS
OAK ASSOCIATES FUNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced funds (the "Trusts"), each a business trust
organized under the laws of The Commonwealth of Massachusetts, hereby
constitutes and appoints Mark E. Nagle, Joseph M. O'Donnell and Kevin P. Robins,
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/ John T. Cooney Date: 9-9-98
- --------------------------------- ---------------
John T. Cooney, Trustee
<PAGE>
THE ARBOR FUND
THE ADVISORS' INNER CIRCLE FUND
THE EXPEDITION FUNDS
OAK ASSOCIATES FUNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced funds (the "Trusts"), each a business trust
organized under the laws of The Commonwealth of Massachusetts, hereby
constitutes and appoints Mark E. Nagle, Joseph M. O'Donnell and Kevin P. Robins,
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/ William M. Doran Date: 9/9/98
- ------------------------------------ ------------------
William M. Doran, Trustee
<PAGE>
THE ARBOR FUND
THE ADVISORS' INNER CIRCLE FUND
THE EXPEDITION FUNDS
OAK ASSOCIATES FUNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced funds (the "Trusts"), each a business trust
organized under the laws of The Commonwealth of Massachusetts, hereby
constitutes and appoints Mark E. Nagle, Joseph M. O'Donnell and Kevin P. Robins,
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/ Frank E. Morris Date: 9/9/98
- ------------------------------------- ----------
Frank E. Morris, Trustee
<PAGE>
THE ARBOR FUND
THE ADVISORS' INNER CIRCLE FUND
THE EXPEDITION FUNDS
OAK ASSOCIATES FUNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced funds (the "Trusts"), each a business trust
organized under the laws of The Commonwealth of Massachusetts, hereby
constitutes and appoints Mark E. Nagle, Joseph M. O'Donnell and Kevin P. Robins,
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. Patterson Date: 9-9-98
- -------------------------------------- ------------
Robert A. Patterson, Trustee
<PAGE>
THE ARBOR FUND
THE ADVISORS' INNER CIRCLE FUND
THE EXPEDITION FUNDS
OAK ASSOCIATES FUNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced funds (the "Trusts"), each a business trust
organized under the laws of The Commonwealth of Massachusetts, hereby
constitutes and appoints Mark E. Nagle, Joseph M. O'Donnell and Kevin P. Robins,
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/ Eugene B. Peters Date: 10 Sept-98
- --------------------------------- --------------
Eugene B. Peters, Trustee
<PAGE>
THE ARBOR FUND
THE ADVISORS' INNER CIRCLE FUND
THE EXPEDITION FUNDS
OAK ASSOCIATES FUNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced funds (the "Trusts"), each a business trust
organized under the laws of The Commonwealth of Massachusetts, hereby
constitutes and appoints Mark E. Nagle, Joseph M. O'Donnell and Kevin P. Robins,
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: 9/10/98
- ------------------------------------ -----------
James M. Storey, Trustee
<PAGE>
THE ARBOR FUND
THE ADVISORS' INNER CIRCLE FUND
THE EXPEDITION FUNDS
OAK ASSOCIATES FUNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced funds (the "Trusts"), each a business trust
organized under the laws of The Commonwealth of Massachusetts, hereby
constitutes and appoints Kevin P. Robins and Joseph M. O'Donnell, 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: September 9, 1998
- ------------------------------------- --------------------
Mark E. Nagle, President
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<PAGE>
<ARTICLE> 6
<CIK> 0000854850
<NAME> EXPEDITION FUNDS
<SERIES>
<NUMBER> 020
<NAME> MONEY MARKET INVESTOR SERVICE SHARES
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> APR-30-1998
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<OTHER-ITEMS-ASSETS> (37)
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<NET-INVESTMENT-INCOME> 4,265
<REALIZED-GAINS-CURRENT> 1
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<NET-CHANGE-FROM-OPS> 4,266
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (3,373)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 271,102
<NUMBER-OF-SHARES-REDEEMED> (298,210)
<SHARES-REINVESTED> 646
<NET-CHANGE-IN-ASSETS> (25,569)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
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<GROSS-ADVISORY-FEES> 525
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<GROSS-EXPENSE> 761
<AVERAGE-NET-ASSETS> 135,776
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> 0
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<PAGE>
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<CIK> 0000854850
<NAME> EXPEDITION FUNDS
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<NUMBER> 021
<NAME> MONEY MARKET INSTITUTIONAL SHARES
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> APR-30-1998
<INVESTMENTS-AT-COST> 154,551
<INVESTMENTS-AT-VALUE> 154,551
<RECEIVABLES> 722
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> (37)
<TOTAL-ASSETS> 155,236
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 600
<TOTAL-LIABILITIES> 600
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 33,446
<SHARES-COMMON-STOCK> 33,446
<SHARES-COMMON-PRIOR> 48,006
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (3)
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 154,636
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<OTHER-INCOME> 0
<EXPENSES-NET> (531)
<NET-INVESTMENT-INCOME> 4,265
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 4,265
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (892)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 36,463
<NUMBER-OF-SHARES-REDEEMED> (51,023)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (11,187)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (4)
<GROSS-ADVISORY-FEES> 525
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 761
<AVERAGE-NET-ASSETS> 34,163
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.03)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .43
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
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<PAGE>
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<CIK> 0000854850
<NAME> EXPEDITION FUNDS
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<NUMBER> 041
<NAME> BOND INVESTOR SHARES
<MULTIPLIER> 1,000
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<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> APR-30-1998
<INVESTMENTS-AT-COST> 110,046
<INVESTMENTS-AT-VALUE> 111,426
<RECEIVABLES> 2,759
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<TOTAL-ASSETS> 114,215
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<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 654
<TOTAL-LIABILITIES> 654
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 16,728
<SHARES-COMMON-STOCK> 1,265
<SHARES-COMMON-PRIOR> 2,399
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (5)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (3,700)
<ACCUM-APPREC-OR-DEPREC> (1,380)
<NET-ASSETS> 113,561
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3,603
<OTHER-INCOME> 0
<EXPENSES-NET> (593)
<NET-INVESTMENT-INCOME> 3,010
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<NAME> EXPEDITION FUNDS
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<NAME> BOND INSTITUTIONAL SHARES
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<CIK> 0000854850
<NAME> EXPEDITION FUNDS
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<NAME> EQUITY INSTITUTIONAL SHARES
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<S> <C>
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<CIK> 0000854850
<NAME> EXPEDITION FUNDS
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<NAME> EQUITY INVESTOR SHARES
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<S> <C>
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