<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 22, 1997
FILE NO. 33-42484
FILE NO. 811-6400
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 / /
POST-EFFECTIVE AMENDMENT NO. 29 /X/
AND
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 / /
AMENDMENT NO. 30 /X/
------------------------
THE ADVISORS' INNER CIRCLE FUND
(Exact Name of Registrant as Specified in Charter)
2 Oliver Street
Boston, Massachusetts 02109
(Address of Principal Executive Offices, Zip Code)
Registrant's Telephone Number, Including Area Code (800) 932-7781
DAVID G. LEE
Oaks, Pennsylvania 19456
(Name and Address of Agent for Service)
COPIES TO:
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Richard W. Grant, Esquire John H. Grady, Jr., Esquire
Morgan, Lewis & Bockius LLP Morgan, Lewis & Bockius LLP
2000 One Logan Square 1800 M Street, N.W.
Philadelphia, Pennsylvania 19103 Washington, D.C. 20036
</TABLE>
------------------------
It is proposed that this filing become effective (check appropriate box)
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/ / immediately upon filing pursuant to paragraph (b)
/ / on [date] pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)
/X/ 75 days after filing pursuant to paragraph (a)
/ / on [date] pursuant to paragraph (a) of Rule 485.
</TABLE>
Registrant has elected to maintain registration of an indefinite number of
shares pursuant to Rule 24f-2 under the Investment Company Act of 1940.
Registrant filed its 24f-2 Notice for the fiscal year ended October 31, 1996 on
December 30, 1996.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
THE ADVISORS' INNER CIRCLE FUND
CROSS REFERENCE SHEET
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<CAPTION>
N-1A ITEM NO. LOCATION
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PART A--CLOVER CAPITAL EQUITY VALUE FUND, CLOVER CAPITAL FIXED INCOME FUND AND CLOVER CAPITAL SMALL CAP VALUE
FUND
Item 1. Cover Page....................................... Cover Page
Item 2. Synopsis......................................... Summary; Expense Summary
Item 3. Condensed Financial Information.................. Financial Highlights
Item 4. General Description of Registrant................ The Fund and the Portfolios; Investment
Objectives; Investment Policies; Risk Factors;
Investment Limitations; General
Information--The Fund
Item 5. Management of the Fund........................... General Information--Trustees of the Fund; The
Adviser; The Administrator; The Transfer Agent;
Portfolio Transactions; Expense Summary
Item 5A. Management's Discussion of Fund Performance...... **
Item 6. Capital Stock and Other Securities............... General Information--Voting Rights; General
Information--Shareholder Inquiries; General
Information-- Dividends and Distributions;
Taxes
Item 7. Purchase of Securities Being Offered............. Purchase and Redemption of Shares
Item 8. Redemption or Repurchase......................... Purchase and Redemption of Shares
Item 9. Pending Legal Proceedings........................ *
PART B--CLOVER CAPITAL EQUITY VALUE FUND, CLOVER CAPITAL FIXED INCOME FUND AND CLOVER CAPITAL SMALL CAP VALUE
FUND
Item 10. Cover Page....................................... Cover Page
Item 11. Table of Contents................................ Table of Contents
Item 12. General Information and History.................. The Fund
Item 13. Investment Objectives and Policies............... Investment Objective (Prospectus); Investment
Policies (Prospectus); Investment Limitations
Item 14. Management of the Registrant..................... General Information--Trustees of the Fund
(Prospectus); Trustees and Officers of the
Fund; The Advisor; The Administrator
Item 15. Control Persons and Principal Holders of
Securities..................................... Trustees and Officers of the Fund; 5%
Shareholders
</TABLE>
(i)
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<CAPTION>
N-1A ITEM NO. LOCATION
- -------------------------------------------------------------- -------------------------------------------------
<S> <C> <C>
Item 16. Investment Advisory and Other Services........... The Adviser (Prospectus and Statement of
Additional Information); The Administrator
(Prospectus and Statement of Additional
Information); The Distributor (Prospectus and
Statement of Additional Information); The
Transfer Agent (Prospectus); General
Information--Counsel and Independent Public
Accountants (Prospectus); Experts; General
Information--Custodian (Prospectus)
Item 17. Brokerage Allocation............................. Portfolio Transactions (Prospectus and Statement
of Additional Information)
Item 18. Capital Stock and Other Securities............... Description of Shares
Item 19. Purchase, Redemption, and Pricing of Securities
Being Offered.................................. Purchase and Redemption of Shares (Prospectus and
Statement of Additional Information);
Determination of Net Asset Value
Item 20. Tax Status....................................... Taxes (Prospectus); Taxes
Item 21. Underwriters..................................... The Distributor
Item 22. Calculation of Performance Data.................. Computation of Yield and Total Return
Item 23. Financial Statements............................. Financial Information
PART A--WHITE OAK GROWTH STOCK FUND AND PIN OAK AGGRESSIVE STOCK FUND
Item 1. Cover Page....................................... Cover Page
Item 2. Synopsis......................................... Summary; Expense Summary
Item 3. Condensed Financial Information.................. Financial Highlights
Item 4. General Description of Registrant................ The Fund and the Portfolios; Investment
Objectives and Policies; Risk Factors;
Investment Limitations; General
Information--The Fund
Item 5. Management of the Fund........................... General Information--Trustees of the Fund; The
Adviser; The Administrator; The Transfer Agent;
Portfolio Transactions; Expense Summary
Item 5A. Management's Discussion of Fund Performance...... **
Item 6. Capital Stock and Other Securities............... General Information--Voting Rights; General
Information--Shareholder Inquiries; General
Information-- Dividends and Distributions;
Taxes
Item 7. Purchase of Securities Being Offered............. Purchase and Redemption of Shares
Item 8. Redemption or Repurchase......................... Purchase and Redemption of Shares
Item 9. Pending Legal Proceedings........................ *
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(ii)
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N-1A ITEM NO. LOCATION
- -------------------------------------------------------------- -------------------------------------------------
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PART B--WHITE OAK GROWTH STOCK FUND AND PIN OAK AGGRESSIVE STOCK FUND
Item 10. Cover Page....................................... Cover Page
Item 11. Table of Contents................................ Table of Contents
Item 12. General Information and History.................. The Fund
Item 13. Investment Objectives and Policies............... Investment Objectives and Policies (Prospectus);
Investment Limitations
Item 14. Management of the Registrant..................... General Information--Trustees of the Fund
(Prospectus); Trustees and Officers of the
Fund; The Adviser; The Administrator
Item 15. Control Persons and Principal Holders of
Securities..................................... Trustees and Officers of the Fund; 5%
Shareholders
Item 16. Investment Advisory and Other Services........... The Adviser (Prospectus and Statement of
Additional Information); The Administrator
(Prospectus and Statement of Additional
Information); The Distributor (Prospectus and
Statement of Additional Information); The
Transfer Agent (Prospectus); General
Information--Counsel and Independent Public
Accountants (Prospectus); Experts; General
Information--Custodian (Prospectus)
Item 17. Brokerage Allocation............................. Portfolio Transactions (Prospectus and Statement
of Additional Information)
Item 18. Capital Stock and Other Securities............... Description of Shares
Item 19. Purchase, Redemption, and Pricing of Securities
Being Offered.................................. Purchase and Redemption of Shares (Prospectus and
Statement of Additional Information);
Determination of Net Asset Value
Item 20. Tax Status....................................... Taxes (Prospectus); Taxes
Item 21. Underwriters..................................... The Distributor
Item 22. Calculation of Performance Date.................. Computation of Yield and Total Return
Item 23. Financial Statements............................. Financial Information
PART A--HGK FIXED INCOME FUND
Item 1. Cover Page....................................... Cover Page
Item 2. Synopsis......................................... Summary; Expense Summary
Item 3. Condensed Financial Information.................. Financial Highlights
Item 4. General Description of Registrant................ The Fund and the Portfolio; Investment Objective
and Policies; Investment Limitations; General
Information--The Fund
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(iii)
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N-1A ITEM NO. LOCATION
- -------------------------------------------------------------- -------------------------------------------------
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Item 5. Management of the Fund........................... General Information--Trustees of the Fund; The
Adviser; The Administrator; The Transfer Agent
Item 5A. Management's Discussion of Fund Performance...... **
Item 6. Capital Stock and Other Securities............... General Information--Voting Rights; General
Information--Shareholder Inquiries; General
Information-- Dividends and Distributions;
Taxes
Item 7. Purchase of Securities Being Offered............. Purchase and Redemption of Shares
Item 8. Redemption or Repurchase......................... Purchase and Redemption of Shares
Item 9. Pending Legal Proceedings........................ The Adviser
PART B--HGK FIXED INCOME FUND
Item 10. Cover Page....................................... Cover Page
Item 11. Table of Contents................................ Table of Contents
Item 12. General Information and History.................. The Fund
Item 13. Investment Objectives and Policies............... Investment Objective and Policies (Prospectus);
Investment Limitations
Item 14. Management of the Registrant..................... General Information--Trustees of the Fund
(Prospectus); Trustees and Officers of the
Fund; The Adviser; The Administrator
Item 15. Control Persons and Principal Holders of
Securities..................................... Trustees and Officers of the Fund
Item 16. Investment Advisory and Other Services........... The Adviser (Prospectus and Statement of
Additional Information); The Administrator
(Prospectus and Statement of Additional
Information); The Distributor (Prospectus and
Statement of Additional Information); The
Transfer Agent (Prospectus); General
Information--Counsel and Independent Public
Accountants (Prospectus); General
Information--Custodian (Prospectus)
Item 17. Brokerage Allocation............................. Portfolio Transactions
Item 18. Capital Stock and Other Securities............... Description of Shares
Item 19. Purchase, Redemption, and Pricing of Securities
Being Offered.................................. Purchase and Redemption of Shares (Prospectus and
Statement of Additional Information);
Determination of Net Asset Value
Item 20. Tax Status....................................... Taxes (Prospectus); Taxes
Item 21. Underwriters..................................... The Distributor
Item 22. Calculation of Performance Data.................. Computation of Yield and Total Return
Item 23. Financial Statements............................. Financial Information
</TABLE>
(iv)
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N-1A ITEM NO. LOCATION
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PART A--AIG MONEY MARKET FUND CLASS A SHARES
Item 1. Cover Page....................................... Cover Page
Item 2. Synopsis......................................... Summary; Expense Summary
Item 3. Condensed Financial Information.................. Financial Highlights
Item 4. General Description of Registrant................ The Fund and the Portfolio; Investment Objective
and Policies; Investment Limitations; General
Information--The Fund
Item 5. Management of the Fund........................... General Information--Trustees of the Fund; The
Adviser; The Administrator; The Transfer Agent
Item 5A. Management's Discussion of Fund Performance...... **
Item 6. Capital Stock and Other Securities............... General Information--Voting Rights; General
Information--Shareholder Inquiries; General
Information-- Dividends and Distributions;
Taxes
Item 7. Purchase of Securities Being Offered............. Purchase and Redemption of Shares
Item 8. Redemption or Repurchase......................... Purchase and Redemption of Shares
Item 9. Pending Legal Proceedings........................ *
PART A--AIG MONEY MARKET FUND CLASS B SHARES
Item 1. Cover Page....................................... Cover Page
Item 2. Synopsis......................................... Summary; Expense Summary
Item 3. Condensed Financial Information.................. Financial Highlights
Item 4. General Description of Registrant................ The Fund and the Portfolio; Investment Objective
and Policies; Investment Limitations; General
Information--The Fund
Item 5. Management of the Fund........................... General Information--Trustees of the Fund; The
Adviser; The Administrator; The Transfer Agent
Item 5A. Management's Discussion of Fund Performance...... **
Item 6. Capital Stock and Other Securities............... General Information--Voting Rights; General
Information--Shareholder Inquiries; General
Information-- Dividends and Distributions;
Taxes
Item 7. Purchase of Securities Being Offered............. Purchase and Redemption of Shares
Item 8. Redemption or Repurchase......................... Purchase and Redemption of Shares
Item 9. Pending Legal Proceedings........................ *
PART B--AIG MONEY MARKET FUND CLASS A AND CLASS B SHARES
Item 10. Cover Page....................................... Cover Page
Item 11. Table of Contents................................ Table of Contents
</TABLE>
(v)
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N-1A ITEM NO. LOCATION
- -------------------------------------------------------------- -------------------------------------------------
<S> <C> <C>
Item 12. General Information and History.................. The Fund
Item 13. Investment Objectives and Policies............... Investment Objective and Policies (Prospectus);
Investment Limitations
Item 14. Management of the Registrant..................... General Information--Trustees of the Fund
(Prospectus); Trustees and Officers of the
Fund; The Adviser; The Administrator
Item 15. Control Persons and Principal Holders of
Securities..................................... Trustees and Officers of the Fund
Item 16. Investment Advisory and Other Services........... The Adviser (Prospectus and Statement of
Additional Information); The Administrator
(Prospectus and Statement of Additional
Information); The Distributor (Prospectus and
Statement of Additional Information); The
Transfer Agent (Prospectus); General
Information--Counsel and Independent Public
Accountants (Prospectus); General
Information--Custodian (Prospectus)
Item 17. Brokerage Allocation............................. Portfolio Transactions
Item 18. Capital Stock and Other Securities............... Description of Shares
Item 19. Purchase, Redemption, and Pricing of Securities
Being Offered.................................. Purchase and Redemption of Shares (Prospectus and
Statement of Additional Information);
Determination of Net Asset Value
Item 20. Tax Status....................................... Taxes (Prospectus); Taxes
Item 21. Underwriters..................................... The Distributor
Item 22. Calculation of Performance Data.................. Computation of Yield and Total Return
Item 23. Financial Statements............................. Financial Information
PART A--FMC SELECT FUND
Item 1. Cover Page....................................... Cover Page
Item 2. Synopsis......................................... Summary; Expense Summary
Item 3. Condensed Financial Information.................. Financial Highlights
Item 4. General Description of Registrant................ The Fund and the Portfolio; Investment Objective
and Policies; Investment Limitations; General
Information--The Fund
Item 5. Management of the Fund........................... General Information--Trustees of the Fund; The
Adviser; The Administrator; The Transfer Agent
Item 5A. Management's Discussion of Fund Performance...... **
Item 6. Capital Stock and Other Securities............... General Information--Voting Rights; General
Information--Shareholder Inquiries; General
Information-- Dividends and Distributions;
Taxes
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(vi)
<PAGE>
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N-1A ITEM NO. LOCATION
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Item 7. Purchase of Securities Being Offered............. Purchase and Redemption of Shares
Item 8. Redemption or Repurchase......................... Purchase and Redemption of Shares
Item 9. Pending Legal Proceedings........................ *
PART B--FMC SELECT FUND
Item 10. Cover Page....................................... Cover Page
Item 11. Table of Contents................................ Table of Contents
Item 12. General Information and History.................. The Fund
Item 13. Investment Objectives and Policies............... Investment Objective and Policies (Prospectus);
Investment Limitations
Item 14. Management of the Registrant..................... General Information--Trustees of the Fund
(Prospectus); Trustees and Officers of the
Fund; The Adviser; The Administrator
Item 15. Control Persons and Principal Holders of
Securities..................................... Trustees and Officers of the Fund
Item 16. Investment Advisory and Other Services........... The Adviser (Prospectus and Statement of
Additional Information); The Administrator
(Prospectus and Statement of Additional
Information); The Distributor (Prospectus and
Statement of Additional Information); The
Transfer Agent (Prospectus); General
Information--Counsel and Independent Public
Accountants (Prospectus); General
Information--Custodian (Prospectus)
Item 17. Brokerage Allocation............................. Portfolio Transactions
Item 18. Capital Stock and Other Securities............... Description of Shares
Item 19. Purchase, Redemption, and Pricing of Securities
Being Offered.................................. Purchase and Redemption of Shares (Prospectus and
Statement of Additional Information);
Determination of Net Asset Value
Item 20. Tax Status....................................... Taxes (Prospectus); Taxes
Item 21. Underwriters..................................... The Distributor
Item 22. Calculation of Performance Data.................. Computation of Total Return
Item 23. Financial Statements............................. Financial Information
PART A--CRA REALTY SHARES PORTFOLIO
Item 1. Cover Page....................................... Cover Page
Item 2. Synopsis......................................... Summary; Expense Summary
Item 3. Condensed Financial Information.................. Fianancial Highlights
Item 4. General Description of Registrant................ The Fund and the Portfolio; Investment Objective
and Policies; Investment Limitations; General
Information--The Fund
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(vii)
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N-1A ITEM NO. LOCATION
- -------------------------------------------------------------- -------------------------------------------------
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Item 5. Management of the Fund........................... General Information--Trustees of the Fund; The
Adviser; The Administrator; The Transfer Agent
Item 5A. Management's Discussion of Fund Performance...... **
Item 6. Capital Stock and Other Securities............... General Information--Voting Rights; General
Information--Shareholder Inquiries; General
Information-- Dividends and Distributions;
Taxes
Item 7. Purchase of Securities Being Offered............. Purchase and Redemption of Shares
Item 8. Redemption or Repurchase......................... Purchase and Redemption of Shares
Item 9. Pending Legal Proceedings........................ *
PART B--CRA REALTY SHARES PORTFOLIO
Item 10. Cover Page....................................... Cover Page
Item 11. Table of Contents................................ Table of Contents
Item 12. General Information and History.................. The Fund
Item 13. Investment Objectives and Policies............... Investment Objective and Policies (Prospectus);
Investment Limitations
Item 14. Management of the Registrant..................... General Information--Trustees of the Fund
(Prospectus); Trustees and Officers of the
Fund; The Adviser; The Administrator
Item 15. Control Persons and Principal Holders of
Securities..................................... Trustees and Officers of the Fund
Item 16. Investment Advisory and Other Services........... The Adviser (Prospectus and Statement of
Additional Information); The Administrator
(Prospectus and Statement of Additional
Information); The Distributor (Prospectus and
Statement of Additional Information); The
Transfer Agent (Prospectus); General
Information--Counsel and Independent Public
Accountants (Prospectus); General
Information--Custodian (Prospectus)
Item 17. Brokerage Allocation............................. Portfolio Transactions
Item 18. Capital Stock and Other Securities............... Description of Shares
Item 19. Purchase, Redemption, and Pricing of Securities
Being Offered.................................. Purchase and Redemption of Shares (Prospectus and
Statement of Additional Information);
Determination of Net Asset Value
Item 20. Tax Status....................................... Taxes (Prospectus); Taxes
Item 21. Underwriters..................................... The Distributor
Item 22. Calculation of Performance Data.................. Computation of Total Return
</TABLE>
(viii)
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N-1A ITEM NO. LOCATION
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Item 23. Financial Statements............................. Financial Information
PART A--FAIRWAY EXTENDED LIQUITY PORTFOLIO, FAIRWAY SHORT DURATION PORTFOLIO AND FAIRWAY INTERMEDIATE DURATION
PORTFOLIO
Item 1. Cover Page....................................... Cover Page
Item 2. Synopsis......................................... Summary; Expense Summary
Item 3. Condensed Financial Information.................. *
Item 4. General Description of Registrant................ The Trust and the Portfolio; Investment
Objectives and Policies; Investment
Limitations; General Information--The Fund;
Item 5. Management of the Fund........................... General Information--Trustees of the Fund; The
Adviser; The Money Managers; The Administrator;
The Transfer Agent
Item 5A. Management's Discussion of Fund Performance...... **
Item 6. Capital Stock and Other Securities............... General Information--Voting Rights; General
Information--Shareholder Inquiries; General
Information-- Dividends and Distributions;
Taxes
Item 7. Purchase of Securities Being Offered............. Purchase and Redemption of Shares
Item 8. Redemption or Repurchase......................... Purchase and Redemption of Shares
Item 9. Pending Legal Proceedings........................ *
PART B--FAIRWAY EXTENDED LIQUITY PORTFOLIO, FAIRWAY SHORT DURATION PORTFOLIO AND FAIRWAY INTERMEDIATE DURATION
PORTFOLIO
Item 10. Cover Page....................................... Cover Page
Item 11. Table of Contents................................ Table of Contents
Item 12. General Information and History.................. The Fund
Item 13. Investment Objectives and Policies............... Investment Objectives and Policies (Prospectus);
Investment Limitations
Item 14. Management of the Registrant..................... General Information--Trustees of the Fund
(Prospectus); Trustees and Officers of the
Fund; The Adviser; The Administrator
Item 15. Control Persons and Principal Holders of
Securities..................................... Trustees and Officers of the Fund
</TABLE>
(ix)
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N-1A ITEM NO. LOCATION
- -------------------------------------------------------------- -------------------------------------------------
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Item 16. Investment Advisory and Other Services........... The Adviser (Prospectus and Statement of
Additional Information); The Money Managers
(Prospectus and Statement of Additional
Information); The Administrator (Prospectus and
Statement of Additional Information); The
Distributor (Prospectus and Statement of
Additional Information); The Transfer Agent
(Prospectus); General Information--Counsel and
Independent Public Accountants (Prospectus);
General Information--Custodian (Prospectus)
Item 17. Brokerage Allocation............................. Portfolio Transactions
Item 18. Capital Stock and Other Securities............... Description of Shares
Item 19. Purchase, Redemption, and Pricing of Securities
Being Offered.................................. Purchase and Redemption of Shares (Prospectus and
Statement of Additional Information);
Determination of Net Asset Value
Item 20. Tax Status....................................... Taxes (Prospectus); Taxes
Item 21. Underwriters..................................... The Distributor
Item 22. Calculation of Performance Data.................. Computation of Total Return
Item 23. Financial Statements............................. *
PART A--MDL BROAD MARKET FIXED INCOME PORTFOLIO AND MDL LARGE CAP GROWTH EQUITY PORTFOLIO
Item 1. Cover Page....................................... Cover Page
Item 2. Synopsis......................................... Summary; Expense Summary
Item 3. Condensed Financial Information.................. *
Item 4. General Description of Registrant................ The Trust and the Portfolios; Investment
Objectives and Policies; Investment
Limitations; General Information--The Trust;
Item 5. Management of the Fund........................... General Information--Trustees of the Trust; The
Adviser; The Administrator; The Transfer Agent
Item 5A. Management's Discussion of Fund Performance...... **
Item 6. Capital Stock and Other Securities............... General Information--Voting Rights; General
Information--Shareholder Inquiries; General
Information-- Dividends and Distributions;
Taxes
Item 7. Purchase of Securities Being Offered............. Purchase and Redemption of Shares
Item 8. Redemption or Repurchase......................... Purchase and Redemption of Shares
</TABLE>
(x)
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N-1A ITEM NO. LOCATION
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Item 9. Pending Legal Proceedings........................ *
PART B--MDL BROAD MARKET FIXED INCOME PORTFOLIO AND MDL LARGE CAP GROWTH EQUITY PORTFOLIO
Item 10. Cover Page....................................... Cover Page
Item 11. Table of Contents................................ Table of Contents
Item 12. General Information and History.................. The Trust
Item 13. Investment Objectives and Policies............... Investment Objectives and Policies (Prospectus);
Investment Limitations
Item 14. Management of the Registrant..................... General Information--Trustees of the Trust
(Prospectus); Trustees and Officers of the
Trust; The Adviser; The Administrator
Item 15. Control Persons and Principal Holders of
Securities..................................... Trustees and Officers of the Trust
Item 16. Investment Advisory and Other Services........... The Adviser (Prospectus and Statement of
Additional Information); The Administrator
(Prospectus and Statement of Additional
Information); The Distributor (Prospectus and
Statement of Additional Information); The
Transfer Agent (Prospectus); General
Information--Counsel and Independent Public
Accountants (Prospectus); General
Information--Custodian (Prospectus)
Item 17. Brokerage Allocation............................. Portfolio Transactions
Item 18. Capital Stock and Other Securities............... Description of Shares
Item 19. Purchase, Redemption, and Pricing of Securities
Being Offered.................................. Purchase and Redemption of Shares (Prospectus and
Statement of Additional Information);
Determination of Net Asset Value
Item 20. Tax Status....................................... Taxes (Prospectus); Taxes
Item 21. Underwriters..................................... The Distributor
Item 22. Calculation of Performance Data.................. Performance Information
Item 23. 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 under Item 5A is or will be (as applicable) contained
in the Fund's Annual Reports to Shareholders.
(xi)
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A POST-
EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY
NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE
POST-EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS
PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER
TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH
SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAW OF ANY SUCH STATE.
<PAGE>
PRELIMINARY PROSPECTUS DATED ,
SUBJECT TO COMPLETION
THE ADVISORS' INNER CIRCLE FUND
Investment Adviser:
MDL CAPITAL MANAGEMENT, INC.
THE ADVISORS' INNER CIRCLE FUND (the "Trust") provides a convenient and
economical means of investing in professionally managed portfolios of
securities. This Prospectus offers shares of the following mutual funds (the
"Portfolios"), each of which is a separate series of the Trust.
- MDL BROAD MARKET FIXED INCOME PORTFOLIO
- MDL LARGE CAP GROWTH EQUITY PORTFOLIO
This Prospectus sets forth concisely the information about the Trust and the
Portfolios that a prospective investor should know before investing. Investors
are advised to read this Prospectus and retain it for future reference. A
Statement of Additional Information dated , 1997 has been filed with
the Securities and Exchange Commission and is available without charge by
calling 1-800-932-7781. The Statement of Additional Information is incorporated
into this Prospectus by reference.
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.
, 1997
MDL-F-001-01
<PAGE>
2
SUMMARY
THE FOLLOWING PROVIDES BASIC INFORMATION ABOUT THE MDL BROAD MARKET FIXED
INCOME PORTFOLIO (THE "FIXED INCOME PORTFOLIO") AND THE MDL LARGE CAP GROWTH
EQUITY PORTFOLIO (THE "EQUITY PORTFOLIO" AND TOGETHER WITH THE FIXED INCOME
PORTFOLIO, THE "PORTFOLIOS"). THE PORTFOLIOS ARE TWO OF THE MUTUAL FUNDS
COMPRISING THE ADVISORS' INNER CIRCLE FUND (THE "TRUST").
WHAT ARE THE INVESTMENT OBJECTIVES? The Fixed Income Portfolio seeks total
return consistent with the preservation of capital. The Equity Fund seeks
long-term growth of capital with a secondary objective of income.
WHAT ARE THE PERMITTED INVESTMENTS? The Fixed Income Fund seeks to achieve
its objective by investing at least 80% of its net assets under normal
conditions in investment grade fixed income securities. The Equity Portfolio
seeks to achieve its objective by investing at least 80% of its net assets
under normal conditions in common stocks. See "Investment Objectives and
Policies" and "Description of Permitted Investments and Risk Factors."
WHAT ARE THE RISKS INVOLVED WITH AN INVESTMENT IN THE PORTFOLIOS? The
Portfolios invest in securities that fluctuate in value, and investors
should expect the Portfolios' net asset value per share to fluctuate. Values
of fixed income securities and, correspondingly, of mutual funds invested in
such securities, such as the Fixed Income Portfolio, generally tend to vary
inversely with interest rates and may be affected by other market and
economic factors as well. The Equity Portfolio may purchase equity
securities that are volatile and may fluctuate in value more than other
types of investments. To the extent set forth under "Investment Objectives
and Policies" and "Description of Permitted Investments and Risk Factors"
the Portfolios may engage in the following investment practices: the
purchase of mortgage-related securities, the use of repurchase agreements
and reverse repurchase agreements (reverse repurchase agreements are
considered to be borrowings by the Portfolios), the purchase or sale of
securities on a "when-issued" or "forward commitment" basis and the use of
options and futures for hedging purposes. See "Investment Objectives and
Policies" and "Description of Permitted Investments and Risk Factors."
WHO IS THE ADVISER? MDL Capital Management, Inc. (the "Adviser") serves as
the investment adviser of the Portfolios. See "Expense Summary" and "The
Adviser."
WHO IS THE ADMINISTRATOR? SEI Fund Resources (the "Administrator") serves
as the administrator and shareholder servicing agent of the Portfolios. See
"The Administrator."
WHO IS THE TRANSFER AGENT? DST Systems, Inc. (the "Transfer Agent") serves
as the transfer agent and dividend disbursing agent for the Trust. See "The
Transfer Agent."
WHO IS THE DISTRIBUTOR? SEI Investments Distribution Co. (the
"Distributor") acts as the distributor of the Portfolios' shares. See "The
Distributor."
IS THERE A SALES LOAD? No, shares of the Portfolios are offered on a
no-load basis.
IS THERE A MINIMUM INVESTMENT? The minimum initial investment in each
Portfolio is $500. Subsequent investments for each Portfolio must be at
least $100. The Trust reserves the right to accept smaller purchases at its
sole discretion.
<PAGE>
3
HOW DO I PURCHASE AND REDEEM SHARES? Purchases and redemptions may be made
through the Transfer Agent on a day when the New York Stock Exchange is open
for business (a "Business Day"). A purchase order will be effective as of
the Business Day received by the Transfer Agent if the Transfer Agent
receives an order and payment with readily available funds prior to 4:00
p.m., Eastern time. To purchase shares by wire, you must first call
1-800-808-4921. Redemption orders placed with the Transfer Agent prior to
4:00 p.m., Eastern time on any Business Day will be effective that day. The
purchase and redemption price for shares is the net asset value per share
determined as of the end of the day the order is effective. Each Portfolio
reserves the right, upon 30 days' written notice, to redeem an account if
the net asset value of the shares in that account falls below $500. See
"Purchase and Redemption of Shares."
HOW ARE DISTRIBUTIONS PAID? The Portfolios distribute substantially all of
their net investment income (exclusive of capital gains) in the form of
dividends, which for the Fixed Income Fund are declared and paid monthly and
for the Equity Fund are declared and paid quarterly. Any capital gain is
distributed at least annually. Distributions are paid in additional shares
unless the shareholder elects to take the payment in cash. See "General
Information--Dividends and Distributions."
<PAGE>
4
EXPENSE SUMMARY
<TABLE>
<CAPTION>
FIXED
INCOME EQUITY
SHAREHOLDER TRANSACTION EXPENSES PORTFOLIO PORTFOLIO
- ---------------------------------------------------------------------------------
<S> <C> <C>
Maximum Sales Load Imposed on Purchases.............. None None
Maximum Sales Load Imposed on Reinvested Dividends... None None
Deferred Sales Charges............................... None None
Redemption Fees*..................................... None None
Exchange Fees........................................ None None
Fixed Income......................................... None None
- ---------------------------------------------------------------------------------
<CAPTION>
FIXED
ANNUAL PORTFOLIO OPERATING EXPENSES INCOME EQUITY
(AS A PERCENTAGE OF AVERAGE NET ASSETS) PORTFOLIO PORTFOLIO
- ---------------------------------------------------------------------------------
<S> <C> <C>
Management Fees (after fee waivers)(1)............... .00% .31%
Other Expenses(2).................................... .90% .95%
- ---------------------------------------------------------------------------------
Total Operating Expenses (after fee waivers)(1)(2)... 90% 1.26%
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
</TABLE>
(1) The Adviser has voluntarily agreed to waive all or a portion of its advisory
fees for each Portfolio and to reimburse expenses of each Portfolio to seek
to maintain Total Operating Expenses at not more than .90% and 1.26% of the
Fixed Income and the Equity Portfolios, respectively. Absent any voluntary
waivers, advisory fees for the Fixed Income and Equity Portfolios would be
.45% and .74%, and Total Operating Expenses would be 1.35% and 1.69% of the
respective Portfolio's average daily net assets.
(2) Other Expenses for the Portfolios are estimated for the current fiscal year.
* Shareholders are charged a fee, currently $10.00, for redemptions by wire.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
EXAMPLE 1 YR. 3 YRS.
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
You would pay the following expenses on a $1,000 investment, assuming (1) 5% annual return and (2)
redemption at the end of each time period:
Fixed Income Portfolio............................................................................. $ 9 $ 13
Equity Portfolio................................................................................... $ 29 $ 40
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. THE PORTFOLIOS ARE NEW, AND ACTUAL EXPENSES MAY BE GREATER OR LESS
THAN THOSE SHOWN. The purpose of the expense summary and example is to assist
the investor in understanding the various costs and expenses that may be
directly or indirectly borne by shareholders of the Portfolios. Additional
information may be found under "The Adviser" and "The Administrator."
<PAGE>
5
THE TRUST AND THE PORTFOLIOS
The Advisors' Inner Circle Fund (the "Trust") offers shares in a number of
mutual funds, each of which is a separate series ("portfolio") of the Trust.
Each share of each portfolio represents an undivided, proportionate interest in
that portfolio. This Prospectus offers shares of the Trust's MDL Broad Market
Fixed Income Portfolio (the "Fixed Income Portfolio") and the MDL Large Cap
Growth Equity Portfolio (the "Equity Portfolio" and together with the Fixed
Income Portfolio, the "Portfolios"), each diversified investment portfolios.
Information regarding the other portfolios in the Trust is contained in separate
prospectuses that may be obtained by calling 1-800-932-7781.
INVESTMENT OBJECTIVES AND POLICIES
The investment objective of the Fixed Income Portfolio is to seek total return
consistent with the preservation of capital. The investment objective of the
Equity Portfolio is to seek long-term growth of capital with a secondary
objective of income. There can be no assurance that a Portfolio will be able to
achieve its investment objective.
MDL BROAD MARKET FIXED INCOME PORTFOLIO
Under normal conditions the Fixed Income Portfolio will invest at least 80% of
its net assets in U.S. Treasury bills, notes and bonds and other securities
issued or guaranteed by the United States Government, its agencies or
instrumentalities ("U.S. Government Securities"), and corporate fixed income
securities rated A- or higher by Standard & Poor's Corporation ("S&P"), A1 or
higher by Moody's Investors Services, Inc. ("Moody's") or of comparable quality
as determined by the Adviser. The U.S. Government Securities in which the
Portfolio may invest include mortgage-backed securities ("MBSs"), and
mortgage-related securities such as pass-through securities and collateralized
mortgage obligations. The Portfolio intends to invest less than 25% of its total
assets in corporate fixed income securities and less than 30% of its total
assets in MBSs. Additional securities in which the Portfolio may invest consist
of: (i) short-term U.S. bank obligations; (ii) other investment companies; and
(iii) repurchase agreements with respect to any of the foregoing.
The Portfolio may purchase or sell securities on a when-issued or forward
commitment basis and sell securities short "against the box." The Portfolio may
engage in reverse repurchase agreements with banks and dealers up to 33 1/3% of
its total assets at the time of borrowing.
For temporary defensive purposes when the Adviser determines that market
conditions warrant, the Portfolio may also invest up to 100% of its assets in
money market securities or hold cash. In order to remain fully invested and to
reduce transaction costs, up to 15% of the Fixed Income Portfolio's total assets
may be invested in futures contracts and options on futures contracts, including
securities index futures contracts and options on securities index futures
contracts.
The Adviser's fixed income decision making process begins with a "top down"
analysis of the factors that drive interest rates: economic growth, inflation,
the level of the dollar, monetary policy and fiscal policy. Based on this
process, the Adviser develops several interest rate projections and determines
an appropriate duration target and maturity structure. The Portfolio's duration
will be between 3 1/2 and 6 1/2 years.
Securities rated A- by S&P or A1 by Moody's possess many favorable investment
attributes and are to be considered as upper-medium grade obligations. They have
a strong capacity to pay interest and repay principal although they are somewhat
more susceptible to the adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories.
MDL LARGE CAP GROWTH EQUITY PORTFOLIO
The Equity Portfolio intends to be as fully invested as practicable in common
stocks and under normal circumstances will invest at least 80% of its net assets
in common stocks, but may also invest in warrants, rights to purchase common
stocks, debt securities convertible into common stocks, or preferred stocks. The
Portfolio may invest in equity securities of foreign issuers traded in the
United States through American Depositary Receipts. The Portfolio may also
engage in repurchase agreements with respect to the foregoing. For temporary
defensive purposes when the Adviser determines that market conditions warrant,
the Portfolio may also invest up to 100% of its assets in
<PAGE>
6
money market securities or hold cash. The Portfolio may engage in reverse
repurchase agreements with banks and dealers up to 33 1/3% of its total assets
at the time of borrowing. In order to remain fully invested and to reduce
transaction costs, up to 15% of the Equity Portfolio's total assets may be
invested in futures contracts and options on futures contracts, including
securities index futures contracts and options on securities index futures
contracts.
The Portfolio will invest primarily in the common stocks of established
companies with equity-market capitalizations in excess of $3 billion. The
Portfolio may also invest in common stocks of smaller companies with equity
market capitalizations in excess of $500 million. The Adviser evaluates these
companies through a multi-step screening process which begins with a universe of
approximately 700 stocks, including those in the S&P 500 index. The Adviser
seeks to purchase the equity securities of companies with 1) high absolute and
relative earnings momentum, 2) positive earnings surprise, 3) positive price
momentum and 4) low absolute and relative valuation. The Adviser then performs a
fundamental analysis of the those companies that meet the foregoing criteria and
selects from those companies approximately 100 securities across 12 identified
economic sectors.
For a further discussion of the Portfolios' permitted investments, see
"Description of Permitted Investments and Risk Factors" herein, as well as the
"Description of Permitted Investments" in the Statement of Additional
Information.
PORTFOLIO TURNOVER
The portfolio turnover rate for the Fixed Income and Equity Portfolios is not
expected to exceed 50% and 80%, respectively.
INVESTMENT LIMITATIONS
The investment objective of each Portfolio and the investment limitations set
forth below and in the Statement of Additional Information are fundamental
policies of the Portfolios. Fundamental policies cannot be changed without the
consent of the holders of a majority of the appropriate Portfolio's outstanding
shares.
No Portfolio may:
1. Purchase securities of any issuer (except securities issued or guaranteed
by the United States, its agencies or instrumentalities and repurchase
agreements involving such securities) if as a result more than 5% of the total
assets of the Portfolio would be invested in the securities of such issuer.
This restriction applies to 75% of the Portfolio's total assets.
2. Purchase any securities which would cause 25% or more of the total assets
of a Portfolio to be invested in the securities of one or more issuers
conducting their principal business activities in the same industry, provided
that this limitation does not apply to investments in obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities and
repurchase agreements involving such securities. For purposes of this
limitation, (i) utility companies will be divided according to their services,
for example, gas distribution, gas transmission, electric and telephone will
each be considered a separate industry, and (ii) financial service companies
will be classified according to the end users of their services, for example,
automobile finance, bank finance and diversified finance will each be
considered a separate industry.
The foregoing percentages will apply at the time of the purchase of a security.
Additionally, it is a non-fundamental policy of each Portfolio to limit
borrowing, except to the extent that the Portfolio may engage in reverse
repurchase agreements, to no more than 5% of its total assets.
THE ADVISER
MDL Capital Management, Inc. (the "Adviser" or "MDL") has been retained under an
investment advisory agreement with the Trust (the "Advisory Agreement") to act
as the investment adviser for the Portfolios. Under the Advisory Agreement, the
Adviser makes the investment decisions for the assets of each Portfolio and
continuously reviews, supervises and administers each Portfolio's investment
program, subject to the supervision of, and policies established by, the
Trustees of the Trust.
The Adviser's principal business address is 730 Centre City Tower, 650
Smithfield Street, Pittsburgh,
<PAGE>
7
PA 15222. As of December 31, 1996, the Adviser had approximately $270 million of
assets under management for institutional clients such as Taft-Hartleys plans,
Hospitals, Public sector funds, foundations, and ERISA Qualified plans. The
Adviser has not previously served as an investment adviser to a registered
investment company, and, as such, does not have extensive experience advising a
highly regulated entity such as an investment company. This may present
additional risks for the Portfolios.
Messrs. Mark D. Lay and Edward Adatepe have served as co-portfolio managers of
both the Fixed Income and Equity Portfolios, since the respective Portfolios'
commencement of operations. Mr. Lay has served as the Chairman and Chief
Executive Officer of the Adviser since 1993. Prior thereto, Mr. Lay was an
account executive at Dean Witter Reynolds, Inc. advising clients on market
conditions worldwide. Mr. Lay is a graduate of Columbia University, where he
majored in Economics. Mr. Adatepe has been the Chief Investment Officer of the
Adviser since 1994. Prior thereto, Mr. Adatepe was the Managing Director of RRZ
Investment Management, Inc., where he was responsible for managing both fixed
income and equity portfolios for various public and private pension funds. Mr.
Adatepe received a B.S. degree in Physics from Allegheny College and a M.S.
degree in Industrial Administration (MBA) from Carnegie-Mellon University.
Steven Sanders serves as the Adviser's President and economist. Prior thereto,
Mr. Sanders served as Chief Executive Officer of Sanders Financial, a retail
investment firm. Mr Sanders appears weekly as an investment specialist on the
CNBC International Business Television Network.
Under the Advisory Agreement, the Adviser receives a monthly management fee
computed separately for each Portfolio. Such fees are payable at an annual rate
of .45% and .74% of the average daily net assets of the Fixed Income and Equity
Portfolios, respectively. The Adviser has voluntarily agreed to waive all or a
portion of its fee for each Portfolio and to reimburse expenses of each
Portfolio in order to limit total operating expenses of that Portfolio to an
annual rate of not more than .90% and 1.26% of average daily net assets for the
Fixed Income and Equity Portfolios, respectively. The Adviser reserves the
right, in its sole discretion, to terminate its voluntary fee waivers and
reimbursements at any time. The Adviser may, from its own resources, compensate
broker-dealers whose clients purchase shares of the Portfolios.
The following graph presents the composite compounded annual rates of total
return attained by all of the accounts managed by MDL Capital Management, Inc.
with investment objectives and policies substantially similar to those of each
of the Fixed Income and Equity Portfolios, respectively, for the time periods
indicated, compared to appropriate indices.
PAST FIXED INCOME PERFORMANCE OF MDL*
PERIODS ENDING DECEMBER 31, 1996
<TABLE>
<CAPTION>
SINCE INCEPTION
FIXED INCOME 1 YEAR (12/31/92)
- ------------------------------------------------------- ------ ---------------
<S> <C> <C>
MDL Fixed Income
Composite (Gross of Advisory Fees)(1).................. 2.22% 38.74%
MDL Fixed Income
Composite (Net of Advisory Fees)(2).................... 1.72% 36.16%
Lehman Government/
Corporate Bond Index................................... 2.90% 31.48%
<CAPTION>
SINCE INCEPTION
EQUITY 1 YEAR (6/30/95)
- ------------------------------------------------------- ------ ---------------
<S> <C> <C>
MDL Equity Composite (Gross of Advisory Fees)(1)....... 23.33% 41.27%
MDL Equity Composite (Net of Advisory Fees)(2)......... 22.46% 39.79%
S&P 500 Stock Index.................................... 22.98% 40.73%
</TABLE>
* The performance results described above are unaudited results based on a
composite of all discretionary fixed income and equity portfolios that were
advised by MDL with investment objectives and policies substantially similar
to those of the respective Portfolio through December 31, 1996. Mr. Lay
managed the accounts of the Fixed Income accounts since their inception, Mr.
Adatepe joined Mr. Lay as manager of the Fixed Income accounts in March,
1994. The Equity accounts were managed by Mr. Lay and Mr. Adatepe for all
periods shown. All performance figures are time weighted total return
calculations and are based on trade date accounting.
(1) The deduction of advisory fees is not reflected. Reinvestment of dividends
is assumed.
<PAGE>
8
(2) The results are net of a model advisory fee (equal to the highest advisory
fee that MDL charged) and assume the reinvestment of dividends.
The Lehman Government/Corporate Bond Index is an unmanaged index of
investment-grade U.S. Government and corporate debt securities. The S&P 500 is
an unmanaged weighted index of 500 industrial, transportation, utility and
financial companies widely regarded by investors as representative of the stock
market. The comparison of the Composites with these indices is meant to provide
you with a general sense of how the Composites compared to standard benchmarks
of the market. The indices are paper calculations and do not reflect any
expenses that accompany a real investment such as sales charges, expenses for
fund operation, management fees or portfolio transaction costs.
Registered investment companies managed by the Adviser, including the
Portfolios, are subject to certain regulatory and tax restrictions on investment
that are not applicable to the Adviser's private accounts. Additionally, the
operating expenses of the Portfolios will be different from, and may be higher
than, the operating expenses of the individual accounts. The performance of MDL
is provided merely to indicate its proficiency in managing similar investment
portfolios. Investors should note that past performance is no guarantee of
future results.
THE ADMINISTRATOR
SEI Fund Resources (the "Administrator"), provides the Trust with administrative
services, including regulatory reporting and all necessary office space,
equipment, personnel and facilities.
For these administrative services, the Administrator is entitled to a fee from
each Portfolio, which is calculated daily and paid monthly, at an annual rate
of: .15% of average daily net assets on the first $50 million of the appropriate
Portfolio's assets; .125% of average daily net assets on the next $50 million of
the appropriate Portfolio's assets; and .10% of average daily net assets on all
assets over $100 million. However, each Portfolio pays a minimum annual
administration fee of $80,000 per portfolio and would be increased by $15,000
per additional class. The fee a Portfolio pays will decline to reflect the
tiered structure described above at net asset levels of $54 million and above.
The Administrator also serves as shareholder servicing agent for the Portfolios.
THE TRANSFER AGENT
DST Systems, Inc., 1004 Baltimore Street, 2nd Floor, Kansas City, Missouri 64105
(the "Transfer Agent") serves as the transfer agent and dividend disbursing
agent for the Trust.
THE DISTRIBUTOR
SEI Investments Distribution Co. (the "Distributor"), Oaks, Pennsylvania, 19456,
a wholly-owned subsidiary of SEI Investments Company, serves as the Trust's
distributor. No compensation is paid to the Distributor for distribution
services for the shares of the Portfolios.
PURCHASE AND REDEMPTION OF SHARES
Investors may purchase and redeem shares of the Portfolios directly through the
Transfer Agent, P.O. Box 419009, Kansas City, Missouri 64141-6009, by wire
transfer. Purchases and redemptions of shares of the Portfolios may be made on a
day on which the New York Stock Exchange is open for business (a "Business
Day"). Shares of the Portfolios are offered only to residents of states in which
such shares are eligible for purchase.
MINIMUM INVESTMENTS
The minimum initial investment in each Portfolio is $500. Subsequent investments
for each Portfolio must be at least $100. Each Portfolio reserves the right to
accept smaller purchases at its sole discretion. See "Minimum Account Sizes and
Involuntary Redemptions of Shares."
PURCHASES BY WIRE TRANSFER
INITIAL PURCHASES: Before making an initial investment by wire, an investor
must first telephone 1-800-808-4921 to be assigned an account number. The
investor's name, Portfolio's name, account number, taxpayer identification
number or Social Security number and address must be specified in the wire. In
addition, an Account Application should be promptly forwarded to the Transfer
Agent at: The
<PAGE>
9
Advisors' Inner Circle Fund, P.O. Box 419009, Kansas City, Missouri 64141-6009.
Shareholders having an account with a commercial bank that is a member of the
Federal Reserve System may purchase shares of the Portfolios by requesting their
bank to transmit funds by wire to: United Missouri Bank; ABA #10-10-00695 for
Account Number 98-7052-396-5; Further Credit: MDL ________ Portfolio. The
shareholder's name, the Portfolio's name and account number must be specified in
the wire.
SUBSEQUENT PURCHASES: Additional investments may be made at any time through
the wire procedures described above, which must include the shareholder's name,
the Portfolio's name and account number. The investor's bank may impose a fee
for investments by wire.
GENERAL INFORMATION REGARDING PURCHASES
A purchase order will be effective as of the day received by the Transfer Agent
if the Transfer Agent receives the order and payment before 4:00 p.m., Eastern
time. Payment may be made by check or readily available funds. The purchase
price of shares of a Portfolio is the daily net asset value per share next
determined after a purchase order is effective. Purchases will be made in full
and fractional shares of the Portfolios calculated to three decimal places. The
Trust will not issue certificates representing shares of the Portfolios.
The Trust reserves the right to reject a purchase order when the Distributor or
the Transfer Agent determines that it is not in the best interest of the Trust,
a Portfolio and/or its shareholders to accept such offer.
REDEMPTIONS
Redemption orders received by the Transfer Agent prior to 4:00 p.m., Eastern
time on any Business Day will be effective that day. The redemption price of
shares of a Portfolio is the net asset value per share of that Portfolio next
determined after a valid redemption order, in good form, is received. Payment on
redemption will be made as promptly as possible and, in any event, within seven
days after the redemption order is received. Shareholders may not close their
accounts by telephone.
Shareholders may receive redemption payments in the form of a check or by
Federal Reserve or ACH wire transfer. There is no charge for having a check for
redemption proceeds mailed. A wire charge, currently $10.00, will be deducted
from the amount of a Federal Reserve wire redemption payment made at the request
of a shareholder, except that certain institutions may be exempt from this
charge. Shareholders cannot redeem shares of the Portfolios by Federal Reserve
wire on federal holidays restricting wire transfers. The Trust does not charge
for ACH wire transactions; however, such transactions will not be posted to a
shareholder's bank account until the second Business Day following the
transaction.
Shareholders are granted telephone redemption privileges automatically. Neither
the Trust nor the Transfer Agent will be responsible for the authenticity of the
redemption instructions received by telephone if it reasonably believes those
instructions are genuine. The Trust and the Transfer Agent will each employ
reasonable procedures to confirm that telephone instructions are genuine, and
may be liable for losses resulting from unauthorized or fraudulent telephone
transactions if it does not employ those procedures.
The right of redemption may be suspended or the date of payment of redemption
proceeds postponed during certain periods as set forth more fully in the
Statement of Additional Information.
MINIMUM ACCOUNT SIZES AND INVOLUNTARY REDEMPTIONS OF SHARES
If the value of a Portfolio account falls below $500 because of shareholder
redemption(s), the Trust will notify the shareholder, and if the account value
remains below $500 for a continuous 60-day period, the shares in such account
are subject to redemption by the Trust and, if redeemed, the daily net asset
value of such shares will be promptly paid to the shareholder. The Trust,
however, will not redeem shares based solely upon changes in the market that
reduce the net asset value of shares.
The Trust reserves the right to modify or terminate the involuntary redemption
features of the shares as stated above at any time upon 60 days' notice to
shareholders.
<PAGE>
10
NET ASSET VALUE
The net asset value per share of each Portfolio is determined by dividing the
total market value of the Portfolio's investments and other assets, less any
liabilities, by the total outstanding shares of the Portfolio. Net asset value
per share is determined daily as of 4:00 p.m., Eastern time on any Business Day.
The Portfolios will use a pricing service to provide market quotations. The
pricing service may use a matrix system of valuation for fixed income securities
which considers factors such as securities prices, yield features, call
features, ratings and developments related to a specific security.
PERFORMANCE
From time to time, the Fixed Income Portfolio may advertise its yield and total
return and the Equity Portfolio may advertise its total return. These figures
will be based on historical earnings and are not intended to indicate future
performance. No representation can be made regarding actual future yields or
returns. The yield of the Fixed Income Portfolio refers to the annualized income
generated by an investment in the Portfolio over a specified 30-day period. The
yield is calculated by assuming that the same amount of income generated by the
investment during that period is generated in each 30-day period over one year
and is shown as a percentage of the investment.
The total return of a Portfolio refers to the average compounded rate of return
on a hypothetical investment, for designated time periods (including but not
limited to the period from which the Portfolios commenced operations through the
specified date), assuming that the entire investment is redeemed at the end of
each period and assuming the reinvestment of all dividend and capital gain
distributions.
The Portfolios may periodically compare their performance to that of other
mutual funds tracked by mutual fund rating services (such as Lipper Analytical
Services, Inc.), financial and business publications and periodicals, broad
groups of comparable mutual funds, unmanaged indices, which may assume
investment of dividends but generally do not reflect deductions for
administrative and management costs, or other investment alternatives. The
Portfolios may quote Morningstar, Inc., a service that ranks mutual funds on the
basis of risk-adjusted performance. The Portfolios may quote Ibbotson Associates
of Chicago, Illinois, which provides historical returns of the capital markets
in the U.S. The Portfolios may use long-term performance of these capital
markets to demonstrate general long-term risk versus reward scenarios and could
include the value of a hypothetical investment in any of the capital markets.
The Portfolios may also quote financial and business publications and
periodicals as they relate to fund management, investment philosophy, and
investment techniques.
The Portfolios may quote various measures of volatility and benchmark
correlation in advertising and may compare these measures to those of other
funds. Measures of volatility attempt to compare historical share price
fluctuations or total returns to a benchmark while measures of benchmark
correlation indicate how valid a comparative benchmark might be. Measures of
volatility and correlation are calculated using averages of historical data and
cannot be calculated precisely.
TAXES
The following summary of federal income tax consequences is based on current tax
laws and regulations, which may be changed by legislative, judicial or
administrative action.
No attempt has been made to present a detailed explanation of the federal, state
or local income tax treatment of the Portfolios or their shareholders.
Accordingly, shareholders are urged to consult their tax advisers regarding
specific questions as to federal, state and local income taxes.
TAX STATUS OF THE PORTFOLIOS
Each Portfolio is treated as a separate entity for federal income tax purposes
and is not combined with the Trust's other portfolios. Each Portfolio intends to
qualify for the special tax treatment afforded regulated investment companies as
defined under Subchapter M of the Internal Revenue Code of 1986, as amended. So
long as a Portfolio qualifies for this special tax treatment, it will be
relieved of federal income tax on that part of its net investment income and net
capital gain (the excess of net long-term capital gain over net short-term
capital loss) which it distributes to shareholders.
<PAGE>
11
TAX STATUS OF DISTRIBUTIONS
Each Portfolio will distribute all of its net investment income (including, for
this purpose, net short-term capital gain) to shareholders. Dividends from net
investment income will be taxable to shareholders as ordinary income whether
received in cash or in additional shares. Distributions from net investment
income will qualify for the dividends-received deduction for corporate
shareholders only to the extent such distributions are derived from dividends
paid by domestic corporations; dividends of the Portfolios are not expected to
qualify for this deduction. Any net capital gain will be distributed annually
and will be taxed to shareholders as long-term capital gain, regardless of how
long the shareholder has held shares. The Portfolios will make annual reports to
shareholders of the federal income tax status of all distributions.
Income received on direct U.S. obligations is exempt from income tax at the
state level when received directly and may be exempt, depending on the state,
when received by a shareholder from the Portfolios provided certain
state-specific conditions are satisfied. The Portfolios will inform shareholders
annually of the percentage of income and distributions, if any, derived from
direct U.S. obligations. Shareholders should consult their tax advisers to
determine whether any portion of the income dividends received from the
Portfolios is considered tax exempt in their particular state.
Dividends declared by the Portfolios in October, November or December of any
year and payable to shareholders of record on a date in one of those months will
be deemed to have been paid by the Portfolios and received by the shareholders
on December 31 of that year, if paid by the Portfolios at any time during the
following January.
Each Portfolio intends to make sufficient distributions prior to the end of each
calendar year to avoid liability for federal excise tax.
Sale, exchange or redemption of a Portfolio's shares is a taxable event to the
shareholder.
GENERAL INFORMATION
THE TRUST
The Trust, an open-end management investment company, was organized under
Massachusetts law as a business trust under a Declaration of Trust dated July
18, 1991. The Declaration of Trust permits the Trust to offer separate series
("portfolios") of shares. All consideration received by the Trust for shares of
any portfolio and all assets of such portfolio belong to that portfolio and are
subject to liabilities related thereto. The Trust reserves the right to create
and issue shares of additional portfolios.
Each Portfolio pays its (i) operating expenses, including fees of its service
providers, expenses of preparing prospectuses, proxy solicitation material and
reports to shareholders, costs of custodial services and registering its shares
under federal and state securities laws, pricing and insurance expenses and pays
additional expenses, brokerage costs, interest charges, taxes and organization
expenses and (ii) pro rata share of the Trust's other expenses, including audit
and legal expenses. The Portfolios' expense ratios are disclosed under "Expense
Summary."
TRUSTEES OF THE TRUST
The management and affairs of the Trust are supervised by the Trustees under the
laws of the Commonwealth of Massachusetts. The Trustees have approved contracts
under which, as described above, certain companies provide essential management
services to the Trust.
VOTING RIGHTS
Each shareholder of record is entitled to one vote or fraction thereof for each
share or fractional share held. Each Portfolio will vote separately on matters
relating solely to it. As a Massachusetts business trust, the Trust is not
required to hold annual meetings of shareholders but shareholders' approval will
be sought for certain changes in the operation of the Trust and for the election
of Trustees under certain circumstances. In addition, a Trustee may be removed
by the remaining Trustees or by shareholders at a special meeting called upon
written request of shareholders owning at least 10% of the outstanding shares of
the Trust. In the event that such a meeting is requested, the Trust will provide
appropriate assistance and information to the shareholders requesting the
meeting.
<PAGE>
12
REPORTING
The Trust issues unaudited financial information semiannually and audited
financial statements annually for the Portfolios. The Trust also furnishes
periodic reports and, as necessary, proxy statements to shareholders of record.
SHAREHOLDER INQUIRIES
Shareholder inquiries should be directed to The Advisors' Inner Circle Fund,
P.O. Box 419009, Kansas City, Missouri 64141-6009 or by calling 1-800-932-7781.
Purchase and redemption transactions should be made through the Transfer Agent
by calling 1-800-808-4921.
DIVIDENDS AND DISTRIBUTIONS
The Fixed Income Portfolio declares dividends of substantially all of its net
investment income (exclusive of capital gains) monthly and pays such dividends
on the first Business Day of each month. The Equity Portfolio declares dividends
of substantially all of its net investment income (exclusive of capital gains)
quarterly and pays such dividends on the first Business Day of each quarter.
Shares purchased begin earning dividends on the Business Day following receipt
of funds by the Transfer Agent. Normally, this will occur within two Business
Days after an order is effective. If any capital gain is realized, substantially
all of it will be distributed at least annually.
Shareholders automatically receive all income dividends and capital gain
distributions in additional shares, unless the shareholder has elected to take
such payment in cash. Shareholders may change their election by providing
written notice to the Transfer Agent at least 15 days prior to the distribution.
Shareholders may receive payments for cash distributions in the form of a check
or by Federal Reserve or ACH wire transfer.
Dividends and other distributions of the Portfolios are paid on a per-share
basis. The value of each share will be reduced by the amount of the payment. If
shares are purchased shortly before the record date for a distribution of
capital gains, a shareholder will pay the full price for the shares and receive
some portion of the price back as a taxable distribution or dividend.
COUNSEL AND INDEPENDENT PUBLIC ACCOUNTANTS
Morgan, Lewis & Bockius LLP serves as counsel to the Trust. Arthur Andersen LLP
serves as the independent public accountants of the Trust.
CUSTODIAN
CoreStates Bank, N.A., Broad and Chestnut Streets, P.O. Box 7618, Philadelphia,
Pennsylvania 19101 acts as custodian (the "Custodian") of the Portfolios. The
Custodian holds cash, securities and other assets of the Trust as required by
the Investment Company Act of 1940, as amended (the "1940 Act").
DESCRIPTION OF PERMITTED INVESTMENTS AND RISK FACTORS
The following is a description of some permitted investments for the Portfolios,
and the associated risk factors:
AMERICAN DEPOSITARY 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 may be available 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 underlying security. Holders of unsponsored depositary receipts generally
bear all the costs of the unsponsored facility. The depositary of an unsponsored
facility frequently is under no obligation to distribute shareholder
communications received from the issuer of the deposited security or to pass
through, to the holders of the receipts, voting rights with respect to the
deposited securities.
CONVERTIBLE SECURITIES--Convertible securities are corporate securities that are
exchangeable for a set number of another security at a prestated price.
Convertible securities typically have characteristics of both fixed income and
equity securities. Because of the conversion feature, the market value of a
convertible security tends to move with the market value of the underlying
stock. The value of a convertible security is also affected by prevailing
<PAGE>
13
interest rates, the credit quality of the issuer and any call provisions.
CORPORATE BONDS--Debt instruments issued by a private corporation, as distinct
from one issued by a governmental agency or municipality. Corporate bonds
generally have the following features: (1) they are taxable; (2) they have a par
value of $1,000; and (3) they have a term maturity. They are sometimes traded on
major exchanges.
DURATION--Traditionally, a debt security's "term to maturity" has been used to
represent the sensitivity of the debt security's price to changes in interest
rates (which is the "interest rate risk" or "volatility" of the security).
However, "term to maturity" measures only the time until a debt security
provides its final payment, taking no account of the pattern of the security's
payments prior to maturity. Most debt securities provide interest ("coupon")
payments in addition to a final ("par") payment at maturity. Some debt
securities also have call provisions allowing the issuer to repay the instrument
in full before the stated maturity date. Depending on the relative magnitude of
these payments, the market values of debt securities respond differently to
changes in the level and structure of interest rates.
Duration is a measure of the expected change in value of a fixed income security
for a given change in interest rates that was developed as a more precise
alternative to the concept of "term to maturity." For example, if interest rates
changed by one percent, the value of a security having an effective duration of
two years generally would vary by two percent. Duration takes the length of the
time intervals between the present time and time that the interest and principal
payments are scheduled, or in the case of a callable bond, expected to be
received, and weighs them by the present values of the cash to be received at
each future point in time.
In some situations even the standard duration calculation does not properly
reflect the interest rate risk of a security. In these situations, the Adviser
will use sophisticated analytical techniques, such as modeling monthly principal
and interest payments based upon historical experience or comparing the mortgage
rates underlying the security to prevailing market rates, to arrive at an
"effective duration" that incorporates the economic life of a security into the
determination of its interest rate risk.
EQUITY SECURITIES--Investments in equity securities in general are subject to
market risks that may cause their prices to fluctuate over time. The value of
securities, such as warrants or convertible debt, exercisable for or convertible
into equity securities is also affected by prevailing interest rates, the credit
quality of the issuer and any call provision. Fluctuations in the value of
equity securities in which the Portfolios invests will cause the net asset value
of the Portfolios to fluctuate. An investment in the Portfolios may therefore be
more suitable for long-term investors.
FIXED INCOME SECURITIES--The market value of the fixed income investments in
which the Portfolios invest will change in response to interest rate changes and
other factors. During periods of falling interest rates, the values of
outstanding fixed income securities generally rise. Conversely, during periods
of rising interest rates, the values of such securities generally decline.
Moreover, while securities with longer maturities tend to produce higher yields,
the prices of longer maturity securities are also subject to greater market
fluctuations as a result of changes in interest rates. Changes by recognized
agencies in the rating of any fixed income security and in the ability of an
issuer to make payments of interest and principal also affect the value of these
investments. Changes in the value of these securities will not necessarily
affect cash income derived from these securities but will affect the Portfolio's
net asset value.
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS--Futures contracts provide
for the future sale by one party and purchase by another party of a specified
amount of a specific security at a specified future time and at a specified
price. An option on a futures contract gives the purchaser the right, in
exchange for a premium, to assume a position in a futures contract at a
specified exercise price during the term of the option. The Portfolios may use
futures contracts and related options for BONA FIDE hedging purposes. The
Portfolios will minimize the risk that it will be unable to close out a futures
contract by only entering into futures contracts which are traded on national
futures exchanges.
<PAGE>
14
Stock index futures are futures contracts for various stock indices that are
traded on registered securities exchanges. A stock index futures contract
obligates the seller to deliver (and the purchaser to accept) an amount of cash
equal to a specific dollar amount times the difference between the value of a
specific stock index at the close of the last trading day of the contract and
the price at which the agreement is made.
There are risks associated with these activities, including the following: (1)
the success of a hedging strategy may depend on an ability to accurately predict
movements in the prices of individual securities, fluctuations in markets and
movements in interest rates, (2) there may be an imperfect or no correlation
between the changes in market value of the securities held by a Portfolio and
the prices of futures and options on futures, (3) there may not be a liquid
secondary market for a futures contract or option, (4) trading restrictions or
limitations may be imposed by an exchange, and (5) government regulations may
restrict trading in futures contracts and futures options.
ILLIQUID SECURITIES--Illiquid securities are securities that cannot be disposed
of within seven business days at approximately the price at which they are being
carried on a Portfolio's books. An illiquid security includes a demand
instrument with a demand notice period exceeding seven days, where there is no
secondary market for such security, and repurchase agreements with a remaining
term to maturity in excess of seven days.
INVESTMENT COMPANY SECURITIES--Each Portfolio may invest up to 10% of its total
assets in the securities of other open-end investment companies that invest in
securities which that Portfolio may invest directly. A Portfolio's purchase of
investment company securities will result in a layering of expenses.
MONEY MARKET INSTRUMENTS--Money market instruments include short-term U.S.
Government Securities; custodial receipts evidencing separately traded interest
and principal components of securities issued by the U.S. Treasury; commercial
paper rated in the highest short-term rating category by an NRSRO or determined
by the Advisor to be of comparable quality at the time of purchase; short-term
bank obligations (certificates of deposit, time deposits and bankers'
acceptances) of U.S. commercial banks with assets of at least $1 billion as of
the end of their most recent fiscal year; and repurchase agreements involving
such securities.
BANKERS' ACCEPTANCES: Bankers' acceptances are bills of exchange or time drafts
drawn on and accepted by a commercial bank. Bankers' acceptances are used by
corporations to finance the shipment and storage of goods. Maturities are
generally six months or less.
CERTIFICATES OF DEPOSIT: Certificates of deposit are interest bearing
instruments with a specific maturity. They are issued by banks and savings and
loan institutions in exchange for the deposit of funds and normally can be
traded in the secondary market prior to maturity. Certificates of deposit with
penalties for early withdrawal will be considered illiquid.
COMMERCIAL PAPER: Commercial paper is a term used to describe unsecured
short-term promissory notes issued by banks, municipalities, corporations and
other entities. Maturities on these issues vary from a few to 270 days.
TIME DEPOSITS: Time deposits are non-negotiable receipts issued by a bank in
exchange for the deposit of funds. Like a certificate of deposit, it earns a
specified rate of interest over a definite period of time; however, it cannot be
traded in the secondary market. Time deposits are considered to be illiquid
securities.
OPTIONS--A put option gives the purchaser of the option the right to sell, and
the writer of the option the obligation to buy, the underlying security at any
time during the option period. A call option gives the purchaser of the option
the right to buy, and the writer of the option the obligation to sell, the
underlying security at any time during the option period. The premium paid to
the writer is the consideration for undertaking the obligations under the option
contract. The initial purchase (sale) of an option contract is an "opening
transaction." In order to close out an option position, a Portfolio may enter
into a "closing transaction," which is simply the sale (purchase) of an option
contract on the same security with the same exercise price and expiration date
as the option contract originally opened.
The Portfolios may purchase put and call options to protect against a decline in
the market value of the
<PAGE>
15
securities in its fund or to protect against an increase in the cost of
securities that the Portfolios may seek to purchase in the future. When
purchasing put and call options, the Portfolios pay a premium therefor. If price
movements in the underlying securities are such that exercise of the options
would not be profitable for a Portfolio, loss of the premium paid may be offset
by an increase in the value of the Portfolio's securities or by a decrease in
the cost of acquisition of securities by the Portfolio.
The Portfolios may write covered call options as a means of providing limited
protection against decreases in its market value. When a Portfolio sells an
option, if the underlying securities do not increase or decrease to a price
level that would make the exercise of the option profitable to the holder
thereof, the option generally will expire without being exercised and the
Portfolio will realize as profit the premium received for such option. When a
call option of which a Portfolio is the writer is exercised, the Portfolio will
be required to sell the underlying securities to the option holder at the strike
price, and will not participate in any increase in the price of such securities
above the strike price. The Portfolios may purchase and write options only on an
exchange.
RISK FACTORS. Risks associated with options transactions include: (1) the
success of a hedging strategy may depend on an ability to accurately predict
movements in the prices of individual securities, fluctuations in markets and
movements in interest rates; (2) there may be an imperfect correlation between
the movement in prices of options and the securities underlying them; (3) there
may not be a liquid secondary market for options; and (4) while a Portfolio will
receive a premium when it writes covered call options, it may not participate
fully in a rise in the market value of the underlying security.
REPURCHASE AGREEMENTS--Repurchase agreements are agreements by which a Portfolio
obtains a security and simultaneously commits to return the security to the
seller at an agreed upon price on an agreed upon date within a number of days
from the date of purchase. The Custodian will hold the security as collateral
for the repurchase agreement. A Portfolio bears a risk of loss in the event the
other party defaults on its obligations and the Portfolio is delayed or
prevented from exercising its right to dispose of the collateral or if the
Portfolio realizes a loss on the sale of the collateral. A Portfolio will enter
into repurchase agreements only with financial institutions deemed to present
minimal risk of bankruptcy during the term of the agreement based on established
guidelines. Repurchase agreements are considered loans under the 1940 Act.
REVERSE REPURCHASE AGREEMENTS--Reverse repurchase agreements are agreements by
which a Portfolio sells securities to financial institutions and simultaneously
agrees to repurchase those securities at a mutually agreed-upon date and price.
At the time a Portfolio enters into a reverse repurchase agreement, the
Portfolio will place liquid assets having a value equal to the repurchase price
in a segregated custodial account and monitor this account to ensure equivalent
value is maintained. Reverse repurchase agreements involve the risk that the
market value of securities sold by the Portfolio may decline below the price at
which the Portfolio is obligated to repurchase the securities. Reverse
repurchase agreements are considered to be borrowings by the Portfolio under the
1940 Act.
SHORT SALES AGAINST-THE-BOX--The Portfolios may make short sales
"against-the-box" for the purpose of deferring realization of gain or loss for
federal income tax purposes and for the purpose of hedging against an
anticipated decline in the value of the underlying securities. A short sale
"against-the-box" is a short sale in which the Portfolio owns or has the right
to obtain without payment of additional consideration an equal amount of the
same type of securities sold short.
U.S. GOVERNMENT SECURITIES--U.S. Government Securities consist of bills, notes
and bonds issued by the U.S. Treasury and obligations issued or guaranteed by
agencies of the U.S. Government, including, among others, the Federal Farm
Credit Bank, the Federal Housing Administration and the Small Business
Administration, and obligations issued or guaranteed by instrumentalities of the
U.S. Government, including, among others, the Federal Home Loan Mortgage
Corporation ("FHLMC"), the Federal Land Banks and the U.S. Postal Service. Some
of these securities are supported by the full faith and credit of the U.S.
Treasury (e.g., Government National Mortgage Association ("GNMA") securities),
others are supported by the right of the issuer to borrow from the Treasury
(e.g.,
<PAGE>
16
Federal Farm Credit Bank securities), while still others are supported only by
the credit of the instrumentality (e.g., Federal National Mortgage Association
("FNMA") securities). Guarantees of principal by agencies or instrumentalities
of the U.S. Government may be a guarantee of payment at the maturity of the
obligation so that in the event of a default prior to maturity there might not
be a market and thus no means of realizing on the obligation prior to maturity.
Guarantees as to the timely payment of principal and interest do not extend to
the value or yield of these securities nor to the value of the Portfolios'
shares.
GOVERNMENT PASS-THROUGH SECURITIES: These are securities that are issued or
guaranteed by a U.S. Government agency representing an interest in a pool of
mortgage loans. The primary issuers or guarantors of these mortgage-backed
securities are GNMA, FNMA and FHLMC. FNMA and FHLMC obligations are not backed
by the full faith and credit of the U.S. Government as GNMA certificates are,
but FNMA and FHLMC securities are supported by the instrumentalities' right to
borrow from the U.S. Treasury. GNMA, FNMA and FHLMC each guarantees timely
distributions of interest to certificate holders. GNMA and FNMA also each
guarantees timely distributions of scheduled principal. FHLMC has in the past
guaranteed only the ultimate collection of principal of the underlying mortgage
loan; however, FHLMC now issues mortgage-backed securities (FHLMC Gold PCS)
which also guarantee timely payment of monthly principal reductions. Government
and private guarantees do not extend to the securities' value, which is likely
to vary inversely with fluctuations in interest rates. The Portfolios will not
invest in any mortgage-backed securities (including ARMS, CMOs and SMBs, as
defined below) other than those issued or guaranteed by the U.S. Government, its
agencies or instrumentalities.
ADJUSTABLE RATE MORTGAGE SECURITIES ("ARMS"): ARMS are a form of pass-through
security representing interests in pools of mortgage loans whose interest rates
are adjusted from time to time. The adjustments usually are determined in
accordance with a predetermined interest rate index and may be subject to
certain limits. While the value of ARMS, like other debt securities, generally
vary inversely with changes in market interest rates (increasing in value during
periods of declining interest rates and decreasing in value during periods of
increasing interest rates), the values of ARMS should generally be more
resistant to price swings than other debt securities because the interest rates
of ARMS move with market interest rates. The adjustable rate feature of ARMS
will not, however, eliminate fluctuations in the prices of ARMS, particularly
during periods of extreme fluctuations in interest rates. Also, since many
adjustable rate mortgages only reset on an annual basis, it can be expected that
the prices of ARMS will fluctuate to the extent that changes in prevailing
interests rates are not immediately reflected in the interest rates payable on
the underlying adjustable rate mortgages.
CMOS: CMOs are debt obligations or multiclass pass-through certificates issued
by agencies or instrumentalities of the U.S. Government. In a CMO, series of
bonds or certificates are usually issued in multiple classes. Principal and
interest paid on the underlying mortgage assets may be allocated among the
several classes of a series of a CMO in a variety of ways. Each class of a CMO,
often referred to as a "tranche," is issued with a specific fixed or floating
coupon rate and has a stated maturity or final distribution date. Principal
payments on the underlying mortgage assets may cause CMOs to be retired
substantially earlier then their stated maturities or final distribution dates,
resulting in a loss of all or part of any premium paid. The Portfolios will not
invest in CMO residual interests (i.e., claims on any excess cash flows
remaining after payments due all other CMO classes and administrative expenses
have been met).
RISK FACTORS: The market value of fixed income investments, including U.S.
Government Securities, will change in response to interest rate changes and
other factors. During periods of falling interest rates, the values of
outstanding fixed income securities generally rise. Conversely, during periods
of rising interest rates, the values of such securities generally decline.
Moreover, while securities with longer maturities tend to produce higher yields,
the prices of longer maturity securities are also subject to greater market
fluctuations as a result of changes in interest rates. Changes in the value of
the Portfolio's securities will not affect cash income derived from these
securities but will affect the Portfolios's net asset value.
<PAGE>
17
Due to the possibility of prepayments of the underlying mortgage instruments,
mortgage-backed securities generally do not have a known maturity. In the
absence of a known maturity, market participants generally refer to an estimated
average life. An average life estimate is a function of an assumption regarding
anticipated prepayment patterns, based upon current interest rates, current
conditions in the relevant housing markets and other factors. The assumption is
necessarily subjective, and thus different market participants can produce
different average life estimates with regard to the same security. There can be
no assurance that estimated average life will be a security's actual average
life.
VARIABLE AND FLOATING RATE INSTRUMENTS-- Certain obligations may carry variable
or floating rates of interest, and may involve a conditional or unconditional
demand feature. Such instruments bear interest at rates 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. A demand instrument with a demand notice
exceeding seven days may be considered illiquid if there is no secondary market
for such security.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES--When-issued or delayed delivery
basis transactions involve the purchase of an instrument with payment and
delivery taking place in the future. Delivery of and payment for these
securities may occur a month or more after the date of the purchase commitment.
The Portfolios will maintain with the Custodian a separate account with liquid
high grade debt securities or cash in an amount at least equal to these
commitments. The interest rate realized on these securities is fixed as of the
purchase date and no interest accrues to the Portfolios before settlement. These
securities are subject to market fluctuation due to changes in market interest
rates and it is possible that the market value at the time of settlement could
be higher or lower than the purchase price if the general level of interest
rates has changed.
<PAGE>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Summary...................................... 2
Expense Summary.............................. 4
The Trust and The Portfolios................. 5
Investment Objectives and Policies........... 5
Portfolio Turnover........................... 6
Investment Limitations....................... 6
The Adviser.................................. 6
The Administrator............................ 8
The Transfer Agent........................... 8
The Distributor.............................. 8
Purchase and Redemption of Shares............ 8
Performance.................................. 10
Taxes........................................ 10
General Information.......................... 11
Description of Permitted Investments and Risk
Factors.................................... 12
</TABLE>
<PAGE>
Trust:
THE ADVISORS' INNER CIRCLE FUND
Portfolios:
MDL BROAD MARKET FIXED INCOME PORTFOLIO
MDL LARGE CAP GROWTH EQUITY PORTFOLIO
Adviser:
MDL CAPITAL MANAGEMENT, INC.
Distributor:
SEI INVESTMENTS DISTRIBUTION CO.
Administrator:
SEI FUND RESOURCES
Legal Counsel:
MORGAN, LEWIS & BOCKIUS LLP
Independent Public Accountants:
ARTHUR ANDERSEN LLP
, 1997
<PAGE>
FUND:
THE ADVISORS' INNER CIRCLE FUND
PORTFOLIOS:
MDL BROAD MARKET FIXED INCOME PORTFOLIO
MDL LARGE CAP GROWTH EQUITY PORTFOLIO
INVESTMENT ADVISER:
MDL CAPITAL MANAGEMENT, INC.
This STATEMENT OF ADDITIONAL INFORMATION is not a prospectus and relates only to
the MDL Broad Market Fixed Income Portfolio (the "Fixed Income Portfolio") and
MDL Large Cap Growth Equity Portfolio (the "Equity Portfolio" and together with
the Fixed Income Portfolio, the "Portfolios"). It is intended to provide
additional information regarding the activities and operations of The Advisors'
Inner Circle Fund (the "Trust") and the Portfolios and should be read in
conjunction with the Portfolios' Prospectus dated , 1997. The
Prospectus for the Portfolios may be obtained by calling 1-800-932-7781.
TABLE OF CONTENTS
<TABLE>
<S> <C>
THE TRUST............................................................................. S-2
DESCRIPTION OF PERMITTED INVESTMENTS.................................................. S-2
INVESTMENT LIMITATIONS................................................................ S-4
THE ADVISER........................................................................... S-5
THE ADMINISTRATOR..................................................................... S-5
THE DISTRIBUTOR....................................................................... S-6
TRUSTEES AND OFFICERS OF THE TRUST.................................................... S-6
PERFORMANCE INFORMATION............................................................... S-8
PURCHASE AND REDEMPTION OF SHARES..................................................... S-9
DETERMINATION OF NET ASSET VALUE...................................................... S-9
TAXES................................................................................. S-9
PORTFOLIO TRANSACTIONS................................................................ S-11
DESCRIPTION OF SHARES................................................................. S-12
SHAREHOLDER LIABILITY................................................................. S-12
LIMITATION OF TRUSTEES' LIABILITY..................................................... S-12
EXPERTS............................................................................... S-12
</TABLE>
, 1997
MDL-F-002-01
<PAGE>
THE TRUST
This Statement of Additional Information relates only to the MDL Broad Market
Fixed Income Portfolio (the "Fixed Income Portfolio") and MDL Large Cap Growth
Equity Portfolio (the "Equity Portfolio" and together with the Fixed Income
Portfolio, the "Portfolios"), each a diversified portfolio. Each Portfolio is a
separate series of the Advisors' Inner Circle Fund (the "Trust"), an open-end
investment management company established under Massachusetts law as a
Massachusetts business trust under a Declaration of Trust dated July 18, 1991.
The Declaration of Trust permits the Trust to offer separate series
("portfolios") of shares of beneficial interest ("shares"). Each portfolio is a
separate mutual fund, and each share of each portfolio represents an equal
proportionate interest in that portfolio. See "Description of Shares." No
investment in shares of a portfolio should be made without first reading that
portfolio's prospectus. Capitalized terms not defined herein are defined in the
Prospectus offering shares of the Portfolios.
DESCRIPTION OF PERMITTED INVESTMENTS
The following sets forth certain information as a supplement to the "Investment
Objectives and Policies" and "Description of Permitted Investments and Risk
Factors" sections of the Prospectus.
AMERICAN DEPOSITARY RECEIPTS
The Equity Portfolio may invest in American Depositary Receipts. These
instruments may subject the Portfolio 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. 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 subject
to less stringent reserve requirements than those applicable to domestic
branches of U.S. banks.
INVESTMENT COMPANY SHARES
The Fixed Income Portfolio may invest up to 10% of its total assets in shares of
other investment companies that invest those securities in which the Portfolio
may invest directly. These investment companies typically incur fees that are
separate from those fees incurred directly by the Portfolio. The Portfolio's
purchase of such investment company securities results in the layering of
expenses, such that shareholders would indirectly bear a proportionate share of
the operating expenses of such investment companies, including advisory fees, in
addition to paying Portfolio expenses. Under applicable regulations, the
Portfolio is prohibited from acquiring the securities of another investment
company if, as a result of such acquisition: (1) the Portfolio owns more than 3%
of the total voting stock of the other company; (2) securities issued by any one
investment company represent more than 5% of the Portfolio's total assets; or
(3) securities (other than treasury stock) issued by all investment companies
represent more than 10% of the total assets of the Portfolio.
MORTGAGE-BACKED SECURITIES
The Fixed Income Portfolio may invest in other mortgage-backed securities,
principally collateralized mortgage obligations ("CMOs") and real estate
mortgage investment conduits ("REMICs"). CMOs are securities collateralized by
mortgages, mortgage pass-throughs, mortgage pay-through bonds (bonds
representing an interest in a pool of mortgages where the cash flow generated
from the mortgage collateral pool is dedicated to bond repayment), and
mortgage-backed bonds (general obligations of the issuers
S-2
<PAGE>
payable out of the issuers' general funds and additionally secured by a first
lien on a pool of single-family detached properties).
Many CMOs are issued with a number of classes or series that have different
maturities and are retired in sequence. Investors purchasing such CMOs in the
shortest maturities receive or are credited with their pro rata portion of the
scheduled payments of interest and principal on the underlying mortgages plus
all unscheduled prepayments of principal up to a predetermined portion of the
total CMO obligation. Until that portion of such CMO obligation is repaid,
investors in the longer maturities receive interest only. Accordingly, the CMOs
in the longer maturity series are less likely than other mortgage pass-throughs
to be prepaid prior to their stated maturity. Although some of the mortgages
underlying CMOs may be supported by various types of insurance, and some CMOs
may be backed by GNMA certificates or other mortgage pass-throughs issued or
guaranteed by U.S. Government agencies or instrumentalities, the CMOs themselves
generally are not guaranteed.
REMICs, which were authorized under the Internal Revenue Code of 1986, as
amended (the "Code"), are private entities formed for the purpose of holding a
fixed pool of mortgages secured by an interest in real property. REMICs are a
form of CMO, and issue multiple classes of securities.
REPURCHASE AGREEMENTS
Each Portfolio may enter into repurchase agreements with primary securities
dealers recognized by the Federal Reserve Bank of New York or with national
member banks as defined in Section 3(d)(1) of the Federal Deposit Insurance Act,
as amended. A repurchase agreement will have an agreed-upon price (including
principal and interest) and an agreed-upon repurchase date within a number of
days (usually not more than seven) from the date of purchase. The resale price
reflects the purchase price plus an agreed-upon market rate of interest which is
unrelated to the coupon rate or maturity of the underlying security. A
repurchase agreement involves the obligation of the seller to pay the agreed
upon price, which obligation is in effect secured by the value of the underlying
security.
The repurchase agreements entered into by the Portfolios will provide that the
underlying security at all times shall have a value at least equal to 102% of
the resale price stated in the agreement; the Adviser monitors compliance with
this requirement. Under all repurchase agreements entered into by a Portfolio,
the Custodian or its agent must take possession of the underlying collateral.
However, if the seller defaults, the Portfolio could realize a loss on the sale
of the underlying security to the extent that the proceeds of sale including
accrued interest are less than the resale price provided in the agreement
including interest. In addition, even though the Federal Bankruptcy Code
provides protection for proceedings, the Portfolio may incur delay and costs in
selling the underlying security or may suffer a loss of principal and interest
if the Portfolio is treated as an unsecured creditor and required to return the
underlying security to the seller's estate.
WHEN-ISSUED SECURITIES
Each Portfolio may purchase debt obligations on a when-issued basis, in which
case delivery and payment normally take place on a future date. The Portfolios
will make commitments to purchase obligations on a when-issued basis only with
the intention of actually acquiring the securities, but may sell them before the
settlement date. During the period prior to the settlement date, the securities
are subject to market fluctuation, and no interest accrues on the securities to
the purchaser. The payment obligation and the interest rate that will be
received on the securities at settlement are each fixed at the time the
purchaser enters into the commitment. Purchasing obligations on a when-issued
basis may be used as a form of leveraging because the purchaser may accept the
market risk prior to payment for the securities. The Portfolios, however, will
not use such purchases for leveraging; instead, as disclosed in the Prospectus,
a Portfolio will set aside assets to cover its commitments. If the value of
these assets declines, the Portfolio
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<PAGE>
will place additional liquid assets aside on a daily basis so that the value of
the assets set aside is equal to the amount of the commitment.
INVESTMENT LIMITATIONS
FUNDAMENTAL POLICIES
The following investment limitations are fundamental policies of each Portfolio
that cannot be changed without the consent of the holders of a majority of that
Portfolio's outstanding shares. The phrase "majority of the outstanding shares"
means the vote of (i) 67% or more of a Portfolio's shares present at a meeting,
if more than 50% of the outstanding shares of a Portfolio are present or
represented by proxy, or (ii) more than 50% of a Portfolio's outstanding shares,
whichever is less.
Each Portfolio may not:
1. Acquire more than 10% of the voting securities of any one issuer.
2. Invest in companies for the purpose of exercising control.
3. Issue any class of senior security or sell any senior security of which it
is the issuer, except that the Portfolio may borrow from any bank, provided
that immediately after any such borrowing there is asset coverage of at
least 300% for all borrowings of the Portfolio, and further provided that,
to the extent that such borrowings exceed 5% of the Portfolio's total
assets, all borrowings shall be repaid before the Portfolio makes additional
investments. The term "senior security" shall not include any temporary
borrowings that do not exceed 5% of the value of the Portfolio's total
assets at the time the Portfolio makes such temporary borrowing. In
addition, investment strategies that either obligate the Portfolio to
purchase securities or require the Portfolio to segregate assets will not be
considered borrowings or senior securities. This investment limitation shall
not preclude the Portfolio from issuing multiple classes of shares in
reliance on SEC rules or orders.
4. Make loans if, as a result, more than 33 1/3% of its total assets would be
lent to other parties, except that the Portfolio may (i) purchase or hold
debt instruments in accordance with its investment objective and policies;
(ii) enter into repurchase agreements; and (iii) lend its securities.
5. Purchase or sell real estate, real estate limited partnership interests,
physical commodities or commodities contracts except that the Portfolio may
purchase commodities contracts relating to financial instruments, such as
financial futures contracts and options on such contracts.
6. Make short sales of securities, maintain a short position or purchase
securities on margin, except that a Portfolio may obtain short-term credits
as necessary for the clearance of security transactions and sell securities
short "against the box."
7. Act as an underwriter of securities of other issuers except as it may be
deemed an underwriter in selling the Portfolio security.
8. Purchase securities of other investment companies except as permitted by the
Investment Company Act of 1940, as amended (the "1940 Act") and the rules
and regulations thereunder.
NON-FUNDAMENTAL POLICIES
The following investment limitation of each Portfolio is non-fundamental and may
be changed by the Trust's Board of Trustees without shareholder approval:
1. A Portfolio may not invest in illiquid securities in an amount exceeding, in
the aggregate, 15% of the Portfolio's net assets.
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<PAGE>
Except with respect to each Portfolio's policy concerning borrowing and illiquid
securities, if a percentage restriction is adhered to at the time of an
investment, a later increase or decrease in percentage resulting from changes in
values or assets will not constitute a violation of such restriction.
THE ADVISER
MDL Capital Management, Inc. (the "Adviser") and the Trust have entered into an
advisory agreement dated , 1997 (the "Advisory Agreement"). The
Advisory Agreement provides that the Adviser shall not be protected against any
liability to the Trust or its shareholders by reason of willful misfeasance, bad
faith or gross negligence on its part in the performance of its duties or from
reckless disregard of its obligations or duties thereunder.
The continuance of the Advisory Agreement, after the first two years, must be
specifically approved at least annually (i) by the vote of the Trustees or by a
vote of the shareholders of a Portfolio, and (ii) by the vote of a majority of
the Trustees who are not parties to the Agreement or "interested persons" of any
party thereto, cast in person at a meeting called for the purpose of voting on
such approval. The Advisory Agreement will terminate automatically in the event
of its assignment, and is terminable at any time without penalty by the Trustees
of the Trust or, with respect to a Portfolio, by a majority of the outstanding
shares of that Portfolio, on not less than 30 days' nor more than 60 days'
written notice to the Adviser, or by the Adviser on 90 days' written notice to
the Trust.
For the fiscal year ended October 31, 1996, the Portfolios had not commenced
operations and therefore did not pay advisory fees.
THE ADMINISTRATOR
The Administration Agreement provides that SEI Fund Resources (the
"Administrator") shall not be liable for any error of judgment or mistake of law
or for any loss suffered by the Portfolios 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 of its duties and
obligations thereunder.
The Administration Agreement shall remain effective for the initial term of the
Agreement and each renewal term thereof unless earlier terminated (a) by the
mutual written agreement of the parties; (b) by either party of the
Administration Agreement on 90 days' written notice, as of the end of the
initial term or the end of any renewal term; (c) by either party of the
Administration Agreement on such date as is specified in written notice given by
the terminating party, in the event of a material breach of the Administration
Agreement by the other party, provided the terminating party has notified the
other party of such breach at least 45 days' prior to the specified date of
termination and the breaching party has not remedied such breach by the
specified date; (d) effective upon the liquidation of the Administrator; or (e)
as to a Portfolio or the Trust, effective upon the liquidation of the Portfolio
or the Trust, as the case may be.
The Administrator, a Delaware business trust, has its principal business offices
at Oaks, Pennsylvania 19456. SEI Financial Management Corporation ("SFM"), a
wholly-owned subsidiary of SEI Investments Company ("SEI"), is the owner of all
beneficial interest in the Administrator. SEI 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 to the
following other mutual funds: The Achievement Funds Trust, The Advisors' Inner
Circle Fund, The Arbor Fund, ARK Funds, Bishop Street Funds, CoreFunds, Inc.,
CrestFunds, Inc., CUFUND, FMB Funds, Inc., First American Funds, Inc., First
American Investment Funds, Inc., First American Strategy Funds, Inc., HighMark
Funds, Marquis Funds, Monitor Funds, Morgan Grenfell Investment Trust, The PBHG
Funds, Inc., The Pillar Funds, Profit Funds Investment Trust, Rembrandt Funds,
Santa Barbara Group of Mutual Funds, Inc.,
S-5
<PAGE>
1784 Funds-Registered Trademark-, SEI Asset Allocation Trust, SEI Daily Income
Trust, SEI Index Funds, SEI Institutional Investments Trust, SEI Institutional
Managed Trust, SEI International Trust, SEI Liquid Asset Trust, SEI Tax Exempt
Trust, Stepstone Funds, STI Classic Funds, STI Classic Variable Trust, and TIP
Funds.
The Administrator will not be required to bear expenses of any Portfolio to an
extent which would result in the Portfolio's inability to qualify as a regulated
investment company under provisions of the Internal Revenue Code. The term
"expenses" is defined in such laws or regulations, and generally excludes
brokerage commissions, distribution expenses, taxes, interest and extraordinary
expenses.
For the fiscal year ended October 31, 1996, the Portfolios had not commenced
operations and therefore did not pay administration fees.
THE DISTRIBUTOR
SEI Investments Distribution Co. (the "Distributor"), a wholly-owned subsidiary
of SEI, and the Trust are parties to a distribution agreement (the "Distribution
Agreement"). The Distributor will not receive compensation for distribution of
shares of the Portfolio.
The Distribution Agreement shall remain in effect for a period of two years
after the effective date of the agreement and is renewable annually. The
Distribution Agreement may be terminated by the Distributor, by a majority vote
of the Trustees who are not interested persons and have no financial interest in
the Distribution Agreement or by a majority vote of the outstanding securities
of the Trust upon not more than 60 days' written notice by either party or upon
assignment by the Distributor.
For the fiscal year ended October 31, 1996, the Portfolios had not commenced
operations and therefore did not pay distribution fees.
TRUSTEES AND OFFICERS OF THE TRUST
The Trustees and Executive Officers of the Trust, their respective dates of
birth, and their principal occupations for the last five years are set forth
below. Each may have held other positions with the named companies during that
period. Unless otherwise noted, the business address of each Trustee and each
Executive Officer is SEI Investments Company, Oaks, Pennsylvania 19456. Certain
officers of the Trust also serve as officers of some or all of the following:
The Achievement Funds Trust, The Advisors' Inner Circle Fund, The Arbor Fund,
ARK Funds, Bishop Street Funds, CoreFunds, Inc., CrestFunds, Inc., CUFUND, FMB
Funds, Inc., First American Funds, Inc., First American Investment Funds, Inc.,
First American Strategy Funds, Inc, HighMark Funds, Marquis-Registered
Trademark- Funds, Monitor Funds, Morgan Grenfell Investment Trust, The PBHG
Funds, Inc., The Pillar Funds, Profit Funds Investment Trust, Rembrandt
Funds-Registered Trademark-, Santa Barbara Group of Mutual Funds, Inc., 1784
Funds-Registered Trademark-, SEI Asset Allocation Trust, SEI Daily Income Trust,
SEI Index Funds, SEI Institutional Investments Trust, SEI Institutional Managed
Trust, SEI International Trust, SEI Liquid Asset Trust, SEI Tax Exempt Trust,
Stepstone Funds, STI Classic Funds, STI Classic Variable Trust and TIP Funds,
each of which is an open-end management investment company managed by SEI Fund
Resources or its affiliates and, except for Profit Funds Investment Trust,
Rembrandt Funds-Registered Trademark-, and Santa Barbara Group of Mutual Funds,
Inc., are distributed by SEI Investments Distribution Co..
ROBERT A. NESHER (DOB 08/17/46)--Chairman of the Board of Trustees*--Retired
since 1994. Executive Vice President of SEI, 1986-1994. Director and Executive
Vice President of the Administrator and the Distributor, 1981-1994. Trustee of
The Arbor Fund, Marquis-Registered Trademark- Funds, The Advisors' Inner Circle
Fund, SEI Asset Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI
Institutional Managed Trust, SEI International Trust, SEI Institutional
Investments Trust, SEI Liquid Asset Trust, SEI Tax Exempt Trust, Insurance
Investment Products Trust, 1784 Funds-Registered Trademark-, Pillar Funds,
Rembrandt Funds, and Stepstone Funds.
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<PAGE>
JOHN T. COONEY (DOB 01/20/27)--Trustee**--569 N. Post Oak Lane, Houston, TX
77024. Retired since 1992. Formerly Vice Chairman of Ameritrust Texas N.A.,
1989-1992, and MTrust Corp., 1985-1989. Trustee of The Arbor Fund,
Marquis-Registered Trademark- Funds, and The Advisors' Inner Circle Fund.
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,
Administrator and Distributor, Director and Secretary of SEI. Trustee of The
Arbor Fund, SEI Liquid Asset Trust, SEI Tax Exempt Trust, SEI Daily Income
Trust, SEI Index Funds, SEI Institutional Managed Trust, SEI International
Trust, SEI Asset Allocation Trust, SEI Institutional Investments Trust,
Insurance Investment Products Trust, The Advisors' Inner Circle Fund, and
Marquis-Registered Trademark- Funds.
FRANK E. MORRIS (DOB 12/30/23)--Trustee**--105 Walpole Street, Dover, MA 02030.
Retired since 1990. Peter Drucker Professor of Management, Boston College,
1989-1990. President, Federal Reserve Bank of Boston, 1968-1988. Trustee of The
Arbor Fund, Marquis-Registered Trademark- Funds, The Advisors' Inner Circle
Fund, SEI Liquid Asset Trust, SEI Tax Exempt Trust, SEI Daily Income Trust, SEI
Index Funds, SEI Institutional Managed Trust, SEI International Trust, Insurance
Investment Products Trust, SEI Asset Allocation Trust and SEI Institutional
Investments Trust.
ROBERT A. PATTERSON (DOB 11/05/27)--Trustee**--208 Old Main, University Park, PA
16802. 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 Arbor Fund,
Marquis-Registered Trademark- Funds, and The Advisors' Inner Circle Fund.
GENE PETERS (DOB 06/03/29)--Trustee**--943 Oblong Road, Williamstown, MA 01267.
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 Arbor Fund, Marquis-Registered Trademark-
Funds and The Advisors' Inner Circle Fund.
JAMES M. STOREY (DOB 04/12/31)--Trustee**--Partner, Dechert Price & Rhoads, from
September 1987 - December 1993; Trustee of The Arbor Fund, Marquis-Registered
Trademark- Funds, The Advisors' Inner Circle Fund, SEI Liquid Asset Trust, SEI
Tax Exempt Trust, SEI Daily Income Trust, SEI Index Funds, SEI Institutional
Managed Trust, SEI International Trust, Insurance Investment Products Trust, SEI
Asset Allocation Trust, and SEI Institutional Investments Trust.
DAVID G. LEE (DOB 04/16/52)--President and Chief Executive Officer--Senior Vice
President of the Administrator and Distributor since 1993. Vice President of the
Administrator and Distributor, 1991-1993. President, GW Sierra Trust Funds
before 1991.
SANDRA K. ORLOW (DOB 10/18/53)--Vice President and Assistant Secretary--Vice
President and Assistant Secretary of the Administrator and Distributor since
1988.
KEVIN P. ROBINS (DOB 04/15/61)--Vice President and Assistant Secretary--Senior
Vice President, General Counsel and Assistant Secretary of SEI, Senior Vice
President, General Counsel and Secretary of the Administrator and Distributor
since 1994. Vice President and Assistant Secretary of SEI, the Administrator and
Distributor, 1992-1994. Associate, Morgan, Lewis & Bockius LLP (law firm),
1988-1992.
RICHARD W. GRANT (DOB 10/25/45)--Secretary--2000 One Logan Square, Philadelphia,
PA 19103, Partner, Morgan, Lewis & Bockius LLP (law firm), counsel to the Trust,
Administrator and Distributor.
KATHRYN L. STANTON (DOB 11/19/58)--Vice President and Assistant
Secretary--Deputy General Counsel of SEI, Vice President and Assistant Secretary
of the Administrator and Distributor since 1994. Associate, Morgan, Lewis &
Bockius LLP (law firm), 1989-1994.
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<PAGE>
JOSEPH P. LYDON (DOB 09/27/59)--Vice President and Assistant
Secretary--Director, Business Administration of Fund Resources, April 1995. Vice
President, Fund Group, Dremen Value Management, LP, President Dremen Financial
Services, Inc. prior to 1995.
MARK NAGLE (DOB 10/20/59)--Controller and Chief Financial Officer--Vice
President of Fund Accounting and Administration of SEI Fund Resources since
November 1996. Vice President of 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, the Administrator and the Distributor
since 1995. Associate, Dewey Ballantine (law firm) (1994-1995). Associate,
Winston & Strawn (law firm) (1991-1994).
BARBARA A. NUGENT (DOB 06/18/56)--Vice President and Assistant Secretary--Vice
President and Assistant Secretary of SEI, the Administrator and Distributor
since 1996. Associate, Drinker Biddle & Reath (law firm) (1994-1996). Assistant
Vice President/Administration, Delaware Service Company, Inc. (1992-1993);
Assistant Vice President-Operations of Delaware Service Company, Inc.
(1988-1992).
MARC H. CAHN (DOB 06/19/57)--Vice President and Assistant Secretary--Vice
President and Assistant Secretary of SEI, the Administrator and Distributor
since 1996. Associate General Counsel, Barclays Bank PLC (1995-1996). ERISA
counsel, First Fidelity Bancorporation (1994-1995), Associate, Morgan, Lewis &
Bockius LLP (1989-1994).
- ------------------------
* Messrs. Nesher and Doran are Trustees who may be deemed to be "interested"
persons of the Fund 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 Fund.
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.
The following table exhibits Trustee compensation for the fiscal year ended
October 31, 1996.
COMPENSATION TABLE
<TABLE>
<CAPTION>
AGGREGATE TOTAL COMPENSATION
COMPENSATION FROM FROM REGISTRANT AND
REGISTRANT FOR PENSION OR FUND COMPLEX* PAID TO
THE FISCAL YEAR RETIREMENT BENEFITS ESTIMATED ANNUAL TRUSTEES FOR THE
ENDED OCTOBER 31, ACCRUED AS PART OF BENEFITS UPON FISCAL YEAR ENDED
NAME OF PERSON, POSITION 1996 TRUST EXPENSES RETIREMENT OCTOBER 31, 1996
- --------------------------------------------- ----------------- -------------------- ---------------- ---------------------
<S> <C> <C> <C> <C>
$9,859 for services
John T. Cooney, Trustee...................... $ 9,859 N/A N/A on 1 board
$10,006 for services
Frank E. Morris, Trustee..................... $ 10,006 N/A N/A on 1 board
$10,006 for services
Robert Patterson, Trustee.................... $ 10,006 N/A N/A on 1 board
$10,006 for services
Eugene B. Peters, Trustee.................... $ 10,006 N/A N/A on 1 board
$10,006 for services
James M. Storey, Esq., Trustee............... $ 10,006 N/A N/A on 1 board
$0 for services on 1
William M. Doran, Esq., Trustee.............. $ 0 N/A N/A board
$0 for services on 1
Robert A. Nesher, Chairman of the Board...... $ 0 N/A N/A board
</TABLE>
- ------------------------
* For purposes of this table, the Fund Complex consists of only the Trust.
PERFORMANCE INFORMATION
From time to time, the Trust may advertise yield and total return of the Fixed
Income Portfolio and the total return of the Equity Portfolio. These figures
will be based on historical earnings and are not intended to indicate future
performance. No representation can be made concerning actual future yields or
returns.
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The yield of the Fixed Income Portfolio refers to the annualized income
generated by an investment in that Portfolio over a specified 30-day period. The
yield is calculated by assuming that the income generated by the investment
during that 30-day period is generated in each period over one year and is shown
as a percentage of the investment. In particular, yield will be calculated
according to the following formula:
Yield = 2[((a - b)/cd+1)(6) - 1], where a = dividends and interest earned during
the period; b = expenses accrued for the period (net of reimbursement); c = the
average daily number of shares outstanding during the period that were entitled
to receive dividends; and d = the maximum offering price per share on the last
day of the period.
The total return of a Portfolio refers to the average compounded rate of return
to a hypothetical investment for designated time periods (including, but not
limited to, the period from which that Portfolio commenced operations through
the specified date), assuming that the entire investment is redeemed at the end
of each period. In particular, total return will be calculated according to the
following formula: P (1 + T)(n) = ERV, where P = a hypothetical initial payment
of $1,000; T = average annual total return; n = number of years; and ERV =
ending redeemable value, as of the end of the designated time period, of a
hypothetical $1,000 payment made at the beginning of the designated time period.
PURCHASE AND REDEMPTION OF SHARES
Purchases and redemptions may be made through the Distributor on a day on which
both the New York Stock Exchange is open for business. Shares of the Portfolios
are offered on a continuous basis.
It is currently the Trust's policy to pay all redemptions in cash. The Trust
retains the right, however, to alter this policy to provide for redemptions in
whole or in part by a distribution in-kind of securities held by a Portfolio in
lieu of cash. Shareholders may incur brokerage charges on the sale of any such
securities so received in payment of redemptions. The Trust has received
exemptive relief from the Securities and Exchange Commission (the "SEC"), which
permits the Trust to make in-kind redemptions to those shareholders that are
affiliated with the Portfolios solely by their ownership of a certain percentage
of the Portfolios.
The Trust reserves the right to suspend the right of redemption and/or to
postpone the date of payment upon redemption for any period on which trading on
the New York Stock Exchange is restricted, or during the existence of an
emergency (as determined by the SEC by rule or regulation) as a result of which
the disposal or valuation of the Portfolio's securities is not reasonably
practicable, or for such other periods as the SEC has by order permitted. The
Trust also reserves the right to suspend sales of shares of any Portfolio for
any period during which the New York Stock Exchange, the Adviser, the
Administrator, the Transfer Agent and/or the custodian are not open for
business.
DETERMINATION OF NET ASSET VALUE
The securities of the Portfolios are valued by the Administrator. The
Administrator will use an independent pricing service to obtain valuations of
securities. The pricing service relies primarily on prices of actual market
transactions as well as trader quotations. However, the service may also use a
matrix system to determine valuations of fixed income securities, which system
considers such factors as security prices, yields, maturities, call features,
ratings and developments relating to specific securities in arriving at
valuations. The procedures of the pricing service and its valuations are
reviewed by the officers of the Trust under the general supervision of the
Trustees.
TAXES
The following is only a summary of certain tax considerations generally
affecting the Portfolios and their shareholders, and is not intended as a
substitute for careful tax planning. Shareholders are urged to consult
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<PAGE>
their tax advisers with specific reference to their own tax situations,
including their state and local tax liabilities.
FEDERAL INCOME TAX
The following discussion of federal income tax consequences is based on the Code
and the regulations issued thereunder as in effect on the date of this Statement
of Additional Information. New legislation, as well as administrative changes or
court decisions, may significantly change the conclusions expressed herein, and
may have a retroactive effect with respect to the transactions contemplated
herein.
Each Portfolio intends to qualify as a "regulated investment company" ("RIC") as
defined under Subchapter M of the Code. By following such a policy, the
Portfolios expect to eliminate or reduce to a nominal amount the federal taxes
to which they may be subject.
In order to qualify for treatment as a RIC under the Code, a Portfolio generally
must distribute annually to its shareholders at least 90% of its investment
company taxable income (generally, net investment income plus net short-term
capital gain) (the "Distribution Requirement") and also must meet several
additional requirements. Among these requirements are the following: (i) at
least 90% of the Portfolio's gross income each taxable year must be derived from
dividends, interest, payments with respect to securities loans, and gains from
the sale or other disposition of stock or securities, or certain other income;
(ii) the Portfolio must derive less than 30% of its gross income each taxable
year from the sale or other disposition of stocks or securities held for less
than three months; (iii) at the close of each quarter of the Portfolio's taxable
year, at least 50% of the value of its total assets must be represented by cash
and cash items, U.S. Government securities, securities of other RICs and other
securities, with such other securities limited, in respect to any one issuer, to
an amount that does not exceed 5% of the value of the Portfolio's assets and
that does not represent more than 10% of the outstanding voting securities of
such issuer; and (iv) at the close of each quarter of the Portfolio's taxable
year, not more than 25% of the value of its assets may be invested in securities
(other than U.S. Government securities or the securities of other RICs) of any
one issuer or of two or more issuers which the Portfolio controls and which are
engaged in the same, similar or related trades or businesses.
Notwithstanding the Distribution Requirement described above, which requires
only that a Portfolio distribute at least 90% of its annual investment company
taxable income and does not require any minimum distribution of net capital gain
(the excess of net long-term capital gain over net short-term capital loss),
each Portfolio will be subject to a nondeductible 4% federal excise tax to the
extent it fails to distribute by the end of any calendar year 98% of its
ordinary income for that year and 98% of its capital gain net income (the excess
of short- and long-term capital gains over short- and long-term capital losses)
for the one-year period ending on October 31 of that year, plus certain other
amounts. Each Portfolio intends to make sufficient distributions of its ordinary
income and capital gain net income prior to the end of each calendar year to
avoid liability for excise tax.
Any gain or loss recognized on a sale or redemption of shares of the Portfolios
by a non-exempt shareholder who is not a dealer in securities generally will be
treated as a long-term capital gain or loss if the shares have been held for
more than twelve months and otherwise generally will be treated as a short-term
capital gain or loss. If shares of a Portfolio on which a net capital gain
distribution has been received are subsequently sold or redeemed and such shares
have been held for six months or less, any loss recognized will be treated as a
long-term capital loss to the extent of the long-term capital gain distribution.
In certain cases, the Portfolios will be required to withhold, and remit to the
United States Treasury, 31% of any distributions paid to a shareholder who (1)
has failed to provide a correct taxpayer identification number, (2) is subject
to backup withholding by the Internal Revenue Service, or (3) has not certified
to the Portfolios that such shareholder is not subject to backup withholding.
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<PAGE>
If a Portfolio fails to qualify as a RIC for any taxable year, it will be
subject to tax on its taxable income at regular corporate rates. In such an
event, all distributions from that Portfolio generally would be eligible for the
corporate dividend received deduction.
STATE TAXES
The Portfolios are not liable for any income or franchise tax in Massachusetts
if it qualifies as a RIC for federal income tax purposes. Portfolio shareholders
should consult with their tax advisers regarding the state and local tax
consequences of investments in the Portfolios.
PORTFOLIO TRANSACTIONS
The Portfolios have no obligation to deal with any broker-dealer or group of
broker-dealers in the execution of transactions in portfolio securities. Subject
to policies established by the Trustees of the Trust, the Adviser is responsible
for placing the orders to execute transactions for the Portfolios. In placing
orders, it is the policy of the Trust to seek to obtain the best net results
taking into account such factors as price (including the applicable dealer
spread), the size, type and difficulty of the transaction involved, the firm's
general execution and operational facilities and the firm's risk in positioning
the securities involved. While the Adviser generally seeks reasonably
competitive spreads or commissions, the Portfolios will not necessarily be
paying the lowest spread or commission available.
The money market instruments in which the Portfolio invests are traded primarily
in the over-the-counter market. Bonds and debentures are usually traded
over-the-counter, but may be traded on an exchange. Where possible, the Adviser
will deal directly with the dealers who make a market in the securities involved
except in those circumstances where better prices and execution are available
elsewhere. Such dealers usually are acting as principal for their own account.
On occasion, securities may be purchased directly from the issuer. Money market
instruments are generally traded on a net basis and do not normally involve
either brokerage commissions or transfer taxes. The cost of executing portfolio
securities transactions of the Portfolios will primarily consist of dealer
spreads and underwriting commissions.
It is expected that the Portfolios may execute brokerage or other agency
transactions through the Distributor, which is a registered broker-dealer, for a
commission in conformity with the 1940 Act, the Securities Exchange Act of 1934
and rules promulgated by the SEC. Under these provisions, the Distributor is
permitted to receive and retain compensation for effecting portfolio
transactions for the Portfolios on an exchange if a written contract is in
effect between the Distributor and the Trust expressly permitting the
Distributor to receive and retain such compensation. These rules further require
that commissions paid to the Distributor by the Portfolios for exchange
transactions not exceed "usual and customary" brokerage commissions. The rules
define "usual and customary" commissions to include amounts which are
"reasonable and fair compared to the commission, fee or other remuneration
received or to be received by other brokers in connection with comparable
transactions involving similar securities being purchased or sold on a
securities exchange during a comparable period of time." The Trustees, including
those who are not "interested persons" of the Trust, have adopted procedures for
evaluating the reasonableness of commissions paid to the Distributor and will
review these procedures periodically.
Since the Trust does not market its shares through intermediary brokers or
dealers, it is not the Trust's practice to allocate brokerage or principal
business on the basis of sales of its shares which may be made through such
firms. However, the Adviser may place portfolio orders with qualified
broker-dealers who recommend the Portfolios' shares to clients, and may, when a
number of brokers and dealers can provide best net results on a particular
transaction, consider such recommendations by a broker or dealer in selecting
among broker-dealers.
The Portfolios are required to identify any securities of its "regular brokers
or dealers" (as such term is defined in the 1940 Act, which the Portfolios have
acquired during its most recent fiscal year. For the fiscal year ended October
31, 1996, the Portfolios had not commenced operations.
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<PAGE>
The portfolio turnover rate for the Fixed Income and Equity Portfolios is
estimated to be 50% and 80%, respectively.
DESCRIPTION OF SHARES
The Declaration of Trust authorizes the issuance of an unlimited number of
portfolios and shares of each portfolio, each of which represents an equal
proportionate interest in the portfolio with each other share. Shares are
entitled upon liquidation to a pro rata share in the net assets of the
portfolio. Shareholders have no preemptive rights. The Declaration of Trust
provides that the Trustees of the Trust may create additional series of shares.
All consideration received by the Trust for shares of any additional series and
all assets in which such consideration is invested would belong to that series
and would be subject to the liabilities related thereto. Share certificates
representing shares will not be issued.
SHAREHOLDER LIABILITY
The Trust is an entity of the type commonly known as a "Massachusetts business
trust." Under Massachusetts law, shareholders of such a trust could, under
certain circumstances, be held personally liable as partners for the obligations
of the trust. Even if, however, the Trust were held to be a partnership, the
possibility of the shareholders incurring financial loss for that reason appears
remote because the Trust's Declaration of Trust contains an express disclaimer
of shareholder liability for obligations of the Trust and requires that notice
of such disclaimer be given in each agreement, obligation or instrument entered
into or executed by or on behalf of the Trust or the Trustees, and because the
Declaration of Trust provides for indemnification out of the Trust property for
any shareholder held personally liable for the obligations of the Trust.
LIMITATION OF TRUSTEES' LIABILITY
The Declaration of Trust provides that a Trustee shall be liable only for his or
her own willful defaults and, if reasonable care has been exercised in the
selection of officers, agents, employees or investment advisers, shall not be
liable for any neglect or wrongdoing of any such person. The Declaration of
Trust also provides that the Trust will indemnify its Trustees and officers
against liabilities and expenses incurred in connection with actual or
threatened litigation in which they may be involved because of their offices
with the Trust unless it is determined in the manner provided in the Declaration
of Trust that they have not acted in good faith in the reasonable belief that
their actions were in the best interests of the Trust. However, nothing in the
Declaration of Trust shall protect or indemnify a Trustee against any liability
for his or her willful misfeasance, bad faith, gross negligence or reckless
disregard of his or her duties.
EXPERTS
Arthur Andersen LLP serves as independent public accountants to the Trust.
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PART C: OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS:
(a) Financial Statements
Part--A Not Applicable
Part--B Not Applicable
(b) Additional Exhibits
<TABLE>
<S> <C>
(1) Registrant's Agreement and Declaration of Trust dated June 29, 1993 is
incorporated herein by reference to Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the Securities and Exchange
Commission on August 29, 1991.
(1)(a) Registrant's Amendment to the Agreement and Declaration of Trust dated
December 2, 1996, is incorporated herein by reference to Post-Effective
Amendment No. 27 to Registrant's Registration Statement on Form N-1A (File
No. 33-42484), filed with the Securities and Exchange Commission on
December 13, 1996.
(1)(b) Registrant's Amendment to the Agreement and Declaration of Trust dated
February 18, 1997, is incorporated herein by reference to Post-Effective
Amendment No. 28 to Registrant's Registration Statement on Form N-1A (File
No. 33-42484), filed with the Securities and Exchange Commission on
February 27, 1997.
(2) Registrant's By-Laws are incorporated herein by reference to Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the
Securities and Exchange Commission on August 29, 1991.
(2)(a) Registrant's Amended and Restated By-Laws are incorporated herein by
reference to Post-Effective Amendment No. 27 to Registrant's Registration
Statement on Form N-1A (File No. 33-42484), filed with the Securities and
Exchange Commission on December 12, 1996.
(3) Not Applicable.
(4) Not Applicable.
(5)(a) Investment Advisory Agreement between Registrant and Clover Capital
Management, Inc. with respect to Clover Capital Equity Value Fund and
Clover Capital Fixed Income Fund dated November 14, 1991 as originally
filed with Pre-Effective Amendment No. 1 to Registrant's Registration
Statement on Form N-1A (File No. 33-42484), filed with the Securities and
Exchange Commission on October 28, 1991 is incorporated herein by
reference to Post-Effective Amendment No. 24, filed on February 28, 1996.
(5)(b) Investment Advisory Agreement between Registrant and Turner Investment
Partners, Inc., complete with schedule with respect to Turner Growth
Equity Fund and form of schedule with respect to Turner Fixed Income Fund,
Turner Small Cap Fund and as revised with respect to Turner Growth Equity
Fund dated February 21, 1992 as originally filed with Post-Effective
Amendment No. 11 to Registrant's Registration Statement on Form N-1A (File
No. 33-42484), filed with the Securities and Exchange Commission on
November 15, 1993 is incorporated herein by reference to Post-Effective
Amendment No. 24 filed on February 28, 1996.
</TABLE>
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<TABLE>
<S> <C>
(5)(c) Investment Advisory Agreement between Registrant and Oak Associates with
respect to White Oak Growth Stock Fund and Pin Oak Aggressive Stock Fund
dated July 20, 1992 as originally filed with Post-Effective Amendment No.
3 to Registrant's Registration Statement on Form N-1A (File No. 33-42484),
filed with the Securities and Exchange Commission on May 22, 1992 is
incorporated herein by reference to Post-Effective Amendment No. 24 filed
on February 28, 1996.
(5)(d) Investment Advisory Agreement between Registrant and Aronson+Fogler with
respect to A+F Large-Cap Fund dated October 15, 1993 as originally filed
with Post-Effective Amendment No. 11 to Registrant's Registration
Statement on Form N-1A (File No. 33-42484), filed with the Securities and
Exchange Commission on November 15, 1993 is incorporated herein by
reference to Post-Effective Amendment No. 24 filed on February 28, 1996.
(5)(e) Investment Advisory Agreement between Registrant and HGK Asset Management,
Inc. with respect to HGK Fixed Income Fund dated August 15, 1994 as
originally filed with Post-Effective Amendment No. 15 to Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the
Securities and Exchange Commission on June 15, 1994 is incorporated herein
by reference to Post-Effective Amendment No. 24 filed on February 28,
1996.
(5)(f) Investment Advisory Agreement between Registrant and AIG Capital Management
Corp. with respect to AIG Money Market Fund originally filed with
Post-Effective Amendment No. 17 to Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the Securities and Exchange
Commission on September 19, 1994 is incorporated herein by reference to
Post-Effective Amendment No. 28 filed February 27, 1997.
(5)(g) Investment Advisory Agreement between Registrant and First Manhattan Co.
with respect to FMC Select Fund dated May 3, 1995 as originally filed with
Post-Effective Amendment No. 19 to Registrant's Registration Statement on
Form N-1A (File No. 33-42484) filed with the Securities and Exchange
Commission on February 1, 1995 is incorporated herein by reference to
Post-Effective Amendment No. 24 filed on February 28, 1996.
(5)(h) Investment Advisory Agreement between Registrant and CRA Real Estate
Securities L.P. dated December 31, 1996 with respect to the CRA Realty
Shares Portfolio is filed herewith.
(5)(i) Form of Investment Advisory Agreement between Registrant and Trust for
Community Banks, L.P. with respect to the Extended Liquidity Portfolio,
Short Duration Portfolio and Intermediate Duration Portfolio is
incorporated by reference to Post-Effective Amendment No. 27 to
Registrant's Registration Statement on Form N-1A (File No. 33-42484),
filed with the Securities and Exchange Commission on December 13, 1996.
(5)(j) Form of Investment Sub-Advisory Agreement between Trust for Community Banks,
L.P. and Duff & Phelps Investment Management Co. with respect to the
Extended Liquidity Portfolio and Short Duration Portfolio is incorporated
by reference to Post-Effective Amendment No. 27 to Registrant's
Registration Statement on Form N-1A (File No. 33-42484) filed with the
Securities and Exchange Commission on December 13, 1996.
(5)(k) Form of Investment Sub-Advisory Agreement between Trust for Community Banks,
L.P. and State Street Research & Management Company with respect to the
Short Duration Portfolio and Intermediate Duration Portfolio is
incorporated by reference to Post-Effective Amendment No. 27 to
Registrant's Registration Statement on Form N-1A (File No. 33-42484),
filed with the Securities and Exchange Commission on December 13, 1996.
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
(5)(l) Form of Investment Sub-Advisory Agreement between Trust for Community Banks,
L.P. and Weiss, Peck & Greer, L.L.C. with respect to the Extended
Liquidity Portfolio, Pinnacle Short Duration Portfolio and Intermediate
Duration Portfolio is incorporated by reference to Post-Effective
Amendment No. 27 to Registrant's Registration Statement on Form N-1A (File
No. 33-42484), filed with the Securities and Exchange Commission on
December 13, 1996.
(5)(m) Form of Investment Sub-Advisory Agreement between Trust for Community Banks,
L.P. and Western Asset Management with respect to the Extended Liquidity
Portfolio, Pinnacle Short Duration Portfolio and Pinnacle Intermediate
Duration Portfolio is incorporated by reference to Post-Effective
Amendment No. 27 to Registrant's Registration Statement on Form N-1A (File
No. 33-42484), filed with the Securities and Exchange Commission on
December 13, 1996.
(5)(n) Form of Investment Advisory Agreement between Registrant and MDL Capital
Management, Inc. with respect to the MDL Broad Market Fixed Income
Portfolio and the MDL Large Cap Growth Equity Portfolio is filed herewith.
(6) Amended and Restated Distribution Agreement between Registrant and SEI
Financial Services Company dated August 8, 1994 as originally filed with
Post-Effective Amendment No. 17 to Registrant's Registration Statement on
Form N-1A (File No. 33-42484) filed with the Securities and Exchange
Commission on September 19, 1994 is incorporated herein by reference to
Post-Effective Amendment No. 24 filed on February 28, 1996.
(7) Not Applicable.
(8) Custodian Agreement between Registrant and CoreStates Bank N.A. originally
filed Pre-Effective Amendment No. 1 to Registrant's Registration Statement
on Form N-1A (File No. 33-42484), filed with the Securities and Exchange
Commission on October 28, 1991 is incorporated herein by reference to
Post-Effective Amendment No. 28 filed on February 27, 1997.
(9) Amended and Restated Administration Agreement between Registrant and SEI
Financial Management Corporation, including schedules relating to Clover
Capital Equity Value Fund, Clover Capital Fixed Income Fund, White Oak
Growth Stock Fund, Pin Oak Aggressive Stock Fund, Roulston Midwest Growth
Fund, Roulston Growth and Income Fund, Roulston Government Securities
Fund, A+P Large-Cap Fund, Turner Fixed Income Fund, Turner Small Cap Fund,
Turner Growth Equity Fund, Morgan Grenfell Fixed Income Fund, Morgan
Grenfell Municipal Bond Fund and HGK Fixed Income Fund dated May 17, 1994
as originally filed with Post-Effective Amendment No. 15 to Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the
Securities and Exchange Commission on June 15, 1994 is incorporated herein
by reference to Post-Effective Amendment No. 24 filed on February 28,
1996.
(9)(a) Schedule dated November 11, 1996 to Administration Agreement dated November
14, 1991 as Amended and Restated May 17, 1994 adding the CRA Realty Shares
Portfolio is filed herewith.
(9)(b) Form of Shareholder Service Plan and Agreement for the Class A Shares of the
CRA Realty Shares Portfolio is incorporated herein by reference to
Post-Effective Amendment No. 26 to Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the Securities and Exchange
Commission on October 15, 1996.
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
(9)(c) Form of Schedule to Amended and Restated Administration Agreement adding the
Extended Liquidity Portfolio, Short Duration Portfolio and Intermediate
Duration Portfolio is incorporated by reference to Post-Effective
Amendment No. 27 to Registrant's Registration Statement on Form N-1A (File
No. 33-42484), filed with the Securities and Exchange Commission on
December 13, 1996.
(9)(d) Schedule to Amended and Restated Administration Agreement dated May 8, 1995
to the Administration Agreement dated November 14, 1991 as Amended and
Restated May 17, 1994 with respect to the FMC Select Fund is incorporated
herein by reference to Post-Effective Amendment No. 28 to Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the
Securities and Exchange Commission on February 27, 1997.
(9)(e) Schedule to the Amended and Restated Administration Agreement dated February
13, 1996 to the Administration Agreement November 14, 1991 as Amended and
Restated May 17, 1994 with respect to the Clover Capital Equity Value
Fund, Clover Capital Fixed Income Fund and Clover Capital Small Cap Value
Fund is incorporated herein by reference to Post-Effective Amendment No.
28 to Registrant's Registration Statement on Form N-1A (File No.
33-42484), filed with the Securities and Exchange Commission on February
27, 1997.
(9)(f) Consent to Assignment and Assumption of Administration Agreement dated June
1, 1996 is incorporated herein by reference to Post-Effective Amendment
No. 28 to Registrant's Registration Statement on Form N-1A (File No.
33-42484), filed with the Securities and Exchange Commission on February
27, 1997.
(9)(g) Form of Schedule to the Amended and Restated Administration Agreement adding
the MDL Broad Market Fixed Income Portfolio and the MDL Large Cap Growth
Equity Portfolio is filed herewith.
(10) Opinion and Consent of Counsel is incorporated herein by reference to
Pre-Effective Amendment No. 1 to Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the Securities and Exchange
Commission on October 28, 1991.
(11) Consent of Independent Public Accountants is filed herewith.
(12) Not Applicable.
(13) Not Applicable.
(14) Not Applicable.
(15) Distribution Plan for The Advisors' Inner Circle Fund as originally filed
with Post-Effective Amendment No. 17 to Registrant's Registration
Statement on Form N-1A (File No. 33-42484), filed with the Securities and
Exchange Commission on September 19, 1994 is incorporated herein by
reference to Post-Effective Amendment No. 24 filed on February 28, 1996.
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
(16) Performance Quotation Computation is incorporated herein by reference to
Post-Effective Amendment No. 13 to Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the Securities and Exchange
Commission on February 25, 1994.
(17) Not Applicable.
(18) Rule 18f-3 Plan is incorporated herein to exhibit (15)(a) which is
incorporated herein by reference to exhibit (15)(a) to Post-Effective
Amendment No. 21 to Registrant's Registration Statement on Form N-1A (File
No. 33-42484), filed with the Securities and Exchange Commission on June
1, 1995.
(24) Powers of Attorney for David G. Lee, John T. Cooney, William M. Doran, Frank
E. Morris, Robert A. Nesher, Gene Peters, Robert A. Patterson, James M.
Storey and Jeffrey A. Cohen are incorporated herein by reference to
Post-Effective Amendment No. 28 to Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the Securities and Exchange
Commission on February 27, 1997.
</TABLE>
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT:
See the Prospectuses and the Statements of Additional Information regarding
the control relationships of The Advisors' Inner Circle Fund (the "Fund"). SEI
Financial Management Corporation a wholly-owned subsidiary of SEI Corporation
("SEI"), is the owner of all beneficial interest in SEI Fund Resources ("the
Administrator"). SEI 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.
Item 26. NUMBER OF HOLDERS OF SECURITIES AS OF APRIL 30, 1997:
<TABLE>
<CAPTION>
NUMBER OF
RECORD
TITLE OF CLASS HOLDERS
- ---------------------------------------------------------------------------------- -------------
<S> <C>
Units of beneficial interest, without par value--
Clover Capital Fixed Income Fund.................................................. 301
Clover Capital Equity Value Fund.................................................. 1802
Clover Capital Small Cap Value Fund............................................... 303
White Oak Growth Stock Fund....................................................... 4881
Pin Oak Aggressive Stock Fund..................................................... 891
HGK Fixed Income Fund............................................................. 140
AIG Money Market Fund Class A..................................................... 205
AIG Money Market Fund Class B..................................................... 81
FMC Select Fund................................................................... 14
CRA Realty Shares Portfolio....................................................... 44
Fairway Extended Liquidity Portfolio.............................................. N/A
Fairway Short Duration Portfolio.................................................. N/A
Fairway Intermediate Duration Portfolio........................................... N/A
MDL Broad Market Fixed Income Portfolio........................................... N/A
MDL Large Cap Growth Portfolio.................................................... N/A
</TABLE>
Item 27. INDEMNIFICATION:
Article VIII of the Agreement and Declaration of Trust filed as Exhibit 1 to
the Registration Statement is incorporated by reference. Insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to trustees, directors, officers and controlling persons of the
Registrant
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<PAGE>
by the Registrant pursuant to the Declaration of Trust or otherwise, the
Registrant is aware that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and, therefore, is unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by trustees, directors, officers or
controlling persons of the Registrant in connection with the successful defense
of any act, suit or proceeding) is asserted by such trustees, directors,
officers or controlling persons in connection with the shares being registered,
the Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issues.
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISOR:
Other business, profession, vocation, or employment of a substantial nature
in which each director or principal officer of the Advisor is or has been, at
any time during the last two fiscal years, engaged for his own account or in the
capacity of director, officer, employee, partner or trustee are as follows:
CLOVER CAPITAL MANAGEMENT, INC.
Clover Capital Management, Inc. is the investment adviser for the Clover
Capital Equity Value, Clover Capital Fixed Income and Clover Capital Small Cap
Value Funds. The principal address of Clover Capital Management, Inc. is 11
Tobey Village Office Park, Pittsford, NY 14534.
The list required by this Item 28 of general partners of Clover Capital
Management, Inc., together with information as to any other business profession,
vocation, or employment of a substantial nature engaged in by such general
partners during the past two years is incorporated by reference to Schedules A
and D of Form ADV filed by Clover Capital Management, Inc. under the Advisers
Act of 1940 (SEC File No. 801-27041).
OAK ASSOCIATES
Oak Associates is the investment adviser for the White Oak Growth Stock Fund
and the Pin Oak Aggressive Stock Fund. The principal address of Oak Associates
is 3875 Embassy Parkway, Suite 250, Akron, OH 44333.
The list required by this Item 28 of general partners of Oak Associates,
together with information as to any other business profession, vocation, or
employment of a substantial nature engaged in by such general partners during
the past two years is incorporated by reference to Schedules B and D of Form ADV
filed by Oak Associates under the Advisers Act of 1940 (SEC File No. 801-23632).
HGK ASSET MANAGEMENT, INC.
HGK Asset Management, Inc. is the investment adviser for the HGK Fixed
Income Fund. The principal address of HGK Asset Management, Inc. is Newport
Tower, 525 Washington Blvd., Jersey City, NJ 07310.
The list required by this Item 28 of general partners of HGK Asset
Management, Inc., together with information as to any other business profession,
vocation, or employment of a substantial nature engaged in by such general
partners during the past two years is incorporated by reference to Schedules B
and D of Form ADV filed by HGK Asset Management, Inc. under the Advisers Act of
1940 (SEC File No. 801-19314).
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AIG CAPITAL MANAGEMENT CORP.
AIG Capital Management Corp. is the investment adviser for the AIG Money
Market Fund. The principal address of AIG Capital Management Corp. is 70 Pine
Street, New York, NY 10270.
The list required by this Item 28 of directors and officers of AIG Capital
Management Corp., together with information as to any other business profession,
vocation, or employment of a substantial nature engaged in by such directors and
officers during the past two years is incorporated by reference to Schedules A
and D of Form ADV filed by AIG Capital Management Corp. under the Advisers Act
of 1940 (SEC File No. 801-47192).
FIRST MANHATTAN CO.
First Manhattan Co. is the investment adviser for the FMC Select Fund. The
principal address of First Manhattan Co. is 437 Madison Avenue, New York, NY
10022.
The list required by this Item 28 of general partners of First Manhattan
Co., together with information as to any other business profession, vocation, or
employment of a substantial nature engaged in by such general partners during
the past two years is incorporated by reference to Schedules B and D of Form ADV
filed by First Manhattan Co. under the Advisers Act of 1940 (SEC File No.
801-12411).
CRA REAL ESTATE SECURITIES L.P.
CRA Real Estate Securities L.P. is the investment adviser for the CRA Realty
Shares Portfolio. The principal address of CRA Real Estate Securities L.P. is
Suite 205, 259 Radnor-Chester Road, Radnor, PA 19087.
The list required by this Item 28 of general partners of CRA Real Estate
Securities L.P., together with information as to any other business profession,
vocation, or employment of a substantial nature engaged in by such general
partners during the past two years is incorporated by reference to Schedules B
and D of Form ADV filed by CRA Real Estate Securities L.P. under the Advisers
Act of 1940 (SEC File No. 801-49083).
TRUST FOR COMMUNITY BANKS, L.P.
Trust for Community Banks, L.P. is the investment adviser for the Pinnacle
Extended Liquidity Portfolio, Pinnacle Short Duration Portfolio and Pinnacle
Intermediate Term Portfolio. The principal address of Trust for Community Banks,
L.P. is 800 Laurel Oak Drive, Suite 200, Naples, FL 34108.
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISOR NAME OF OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
L. Edward Baker, principal of Summit Investment Majority
General Partner Advisors, Inc. Shareholder
James F. Nolan, principal of
General Partner
</TABLE>
MDL CAPITAL MANAGEMENT, INC.
MDL Capital Management, Inc. is the investment adviser for the MDL Broad
Market Fixed Income Portfolio and the MDL Large Cap Growth Equity Portfolio. The
principal address of MDL Capital Management, Inc. is 650 Smithfield Street,
Suite 730, Pittsburgh, PA 15222
The list required by this Item 28 of general partners of MDL Capital
Management, Inc., together with information as to any other business profession,
vocation, or employment of a substantial nature engaged in by such general
partners during the past two years is incorporated by reference to Schedules B
and D of
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Form ADV filed by MDL Capital Management, Inc. under the Advisers Act of 1940
(SEC File No. 801-43419).
DUFF & PHELPS INVESTMENT MANAGEMENT CO.
Duff & Phelps Investment Management Co. is the investment sub-adviser for
the Pinnacle Extended Liquidity Portfolio and Pinnacle Short Duration Portfolio.
The principal address of Duff & Phelps Investment Management Co. is 55 East
Monroe, Chicago, IL 60603.
The list required by this Item 28 of general partners of Duff & Phelps
Investment Management Co., together with information as to any other business
profession, vocation, or employment of a substantial nature engaged in by such
general partners during the past two years is incorporated by reference to
Schedules B and D of Form ADV filed by Duff & Phelps Investment Management Co.
under the Advisers Act of 1940 (SEC File No. 801-14813).
STATE STREET RESEARCH & MANAGEMENT COMPANY
State Street Research & Management Company is the investment sub-adviser for
the Pinnacle Short Duration Portfolio and Pinnacle Intermediate Duration
Portfolio. The principal address of State Street Research & Management Company
is One Financial Center, Boston, MA 02111.
The list required by this Item 28 of general partners of State Street
Research & Management Company, together with information as to any other
business profession, vocation, or employment of a substantial nature engaged in
by such general partners during the past two years is incorporated by reference
to Schedules B and D of Form ADV filed by State Street Research & Management
Company under the Advisers Act of 1940 (SEC File No. 801-18538).
WEISS, PECK & GREER, L.L.C.
Weiss, Peck & Greer, L.L.C. is the investment sub-adviser for the Pinnacle
Extended Liquidity Portfolio, Pinnacle Short Duration Portfolio and Pinnacle
Intermediate Duration Portfolio. The principal address of Weiss, Peck & Greer,
L.L.C. is One New York Plaza, New York, NY 10004.
The list required by this Item 28 of general partners of Weiss, Peck &
Greer, L.L.C., together with information as to any other business profession,
vocation, or employment of a substantial nature engaged in by such general
partners during the past two years is incorporated by reference to Schedules B
and D of Form ADV filed by Weiss, Peck & Greer under the Advisers Act of 1940
(SEC File No. 801-6604).
WESTERN ASSET MANAGEMENT
Western Asset Management is the investment sub-adviser for the Pinnacle
Extended Liquidity Portfolio, Pinnacle Short Duration Portfolio and Pinnacle
Intermediate Duration Portfolio. The principal address of Western Asset
Management is 117 E. Colorado Blvd., Pasadena, CA 91105.
The list required by this Item 28 of general partners of Western Asset
Management, together with information as to any other business profession,
vocation, or employment of a substantial nature engaged in by such general
partners during the past two years is incorporated by reference to Schedules B
and D of Form ADV filed by Western Asset Management under the Advisers Act of
1940 (SEC File No. 801-08162).
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Item 29. PRINCIPAL UNDERWRITERS:
Furnish the name of each investment company (other than the Registrant) for
which each principal underwriter currently distributing securities of the
Registrant also acts as a principal underwriter, distributor or investment
advisor.
<TABLE>
<S> <C>
Registrant's distributor, SEI Investments Distribution Co. ("SEI
Investments"), 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
SEI Institutional Managed Trust January 22, 1987
SEI International Trust August 30, 1988
Stepstone Funds January 30, 1991
The Pillar Funds February 28, 1992
CUFUND May 1, 1992
STI Classic Funds May 29, 1992
CoreFunds, Inc. October 30, 1992
First American Funds, Inc. November 1, 1992
First American Investment Funds, Inc. November 1, 1992
The Arbor Fund January 28, 1993
1784 Funds-Registered Trademark- June 1, 1993
The PBHG Funds, Inc. July 16,1993
Marquis Funds-Registered Trademark- August 17,1993
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
FMB Funds, Inc. March 1, 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
</TABLE>
SEI Investments 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").
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 principal business address of
each director or officer is Oaks, PA 19456.
C-9
<PAGE>
<TABLE>
<CAPTION>
POSITION AND OFFICE POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- ------------------------------ -------------------------------------------------------- ------------------------
<S> <C> <C>
Alfred P. West, Jr. Director, Chairman & Chief Executive Officer --
Henry H. Greer Director, President & Chief Operating Officer --
Carmen V. Romeo Director, Executive Vice President & Treasurer --
Gilbert L. Beebower Executive Vice President --
Richard B. Lieb Executive Vice President, President-Investment Services --
Division
Leo J. Dolan, Jr. Senior Vice President --
Carl A. Guarino Senior Vice President --
Jerome Hickey Senior Vice President --
Larry Hutchison Senior Vice President --
Steven Kramer Senior Vice President --
David G. Lee Senior Vice President President & Chief
Executive Officer
William Madden Senior Vice President --
Jack May Senior Vice President --
A. Keith McDowell Senior Vice President --
Dennis J. McGonigle Senior Vice President --
Hartland J. McKeown Senior Vice President --
Barbara J. Moore Senior Vice President --
James V. Morris Senior Vice President --
Steven Onofrio Senior Vice President --
Kevin P. Robins Senior Vice President, General Counsel & Secretary Vice President,
Assistant Secretary
Robert Wagner Senior Vice President --
Patrick K. Walsh Senior Vice President --
Kenneth Zimmer Senior Vice President --
Robert Aller Vice President --
Marc H. Cahn Vice President & Assistant Secretary Vice President,
Assistant Secretary
Gordon W. Carpenter Vice President --
Todd Cipperman Vice President & Assistant Secretary Vice President,
Assistant Secretary
Robert Crudup Vice President & Managing Director --
Ed Daly Vice President --
Jeff Drennen Vice President --
Mick Duncan Vice President and Team Leader --
Vic Galef Vice President & Managing Director --
Kathy Heilig Vice President --
</TABLE>
C-10
<PAGE>
<TABLE>
<CAPTION>
POSITION AND OFFICE POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- ------------------------------ -------------------------------------------------------- ------------------------
<S> <C> <C>
Michael Kantor Vice President --
Samuel King Vice President --
Kim Kirk Vice President & Managing Director --
Donald H. Korytowski Vice President --
John Krzeminski Vice President & Managing Director --
Robert S. Ludwig Vice President and Team Leader --
Vicki Malloy Vice President and Team Leader --
Carolyn McLaurin Vice President & Managing Director --
W. Kelso Morrill Vice President --
Barbara A. Nugent Vice President & Assistant Secretary Vice President,
Assistant Secretary
Sandra K. Orlow Vice President & Assistant Secretary Vice President,
Assistant Secretary
Donald Pepin Vice President & Managing Director --
Larry Pokora Vice President --
Kim Rainey Vice President --
Paul Sachs Vice President --
Mark Samuels Vice President & Managing Director --
Steve Smith Vice President --
Daniel Spaventa Vice President --
Kathryn L. Stanton Vice President & Assistant Secretary Vice President,
Assistant Secretary
Wayne M. Withrow Vice President & Managing Director --
William Zawaski Vice President --
James Dougherty Director of Brokerage Services --
</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, 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-I (d), the required books and records are maintained
at the offices of Registrant's Custodian:
CoreStates Bank, N.A.
Broad & Chestnut Streets
P.O. Box 7618
Philadelphia, PA 19101
(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 Fund Resources
Oaks, PA 19456
C-11
<PAGE>
(c) With respect to Rules 31a-1 (b)(5), (6), (9) and (10) and 31a-1 (f),
the required books and records are maintained at the offices of the
Registrant's Advisors:
Clover Capital Management
11 Tobey Village Office Park
Pittsford, NY 14534
Oak Associates
3875 Embassy Parkway
Suite 250
Akron, OH 44333-8334
HGK Asset Management, Inc.
Newport Tower
525 Washington Blvd.
Jersey City, NJ 07310
AIG Capital Management Corp.
70 Pine Street
20th Floor
New York, NY 10270
First Manhattan Co.
437 Madison Avenue
New York, NY 10022-7022
CRA Real Estate Securities L.P.
Suite 205
259 Radnor-Chester Road
Radnor, PA 19087
Trust for Community Banks, L.P.
800 Laurel Oak Drive, Suite 200
Naples, FL 34108
MDL Capital Management, Inc.
650 Smithfield Street, Suite 730
Pittsburgh, PA 15222
Duff & Phelps Investment Management Co.
55 East Monroe
Chicago, IL 60603
State Street Research & Management Company
One Financial Center
Boston, MA 02111
Weiss, Peck & Greer, L.L.C.
One New York Plaza
New York, NY 10004
Western Asset Management
117 E. Colorado Blvd.
Pasadena, CA 91105
C-12
<PAGE>
Item 31. MANAGEMENT SERVICES:
None.
Item 32. UNDERTAKINGS:
Registrant hereby undertakes to file a post-effective amendment, using
financial statements with respect to the MDL Broad Market Fixed Income Portfolio
and the MDL Large Cap Growth Equity Portfolio which need not be certified,
within four to six months from the effective date of this Post-Effective
Amendment No. 29.
Registrant hereby undertakes to file a post-effective amendment, using
financial statements with respect to the Fairway Extended Liquidity Portfolio,
Fairway Short Duration Portfolio and Fairway Intermediate Portfolio which need
not be certified, within four to six months from the effective date of this
Post-Effective Amendment No. 27.
Registrant hereby undertakes to file a post-effective amendment, using
financial statements with respect to the CRA Realty Shares Portfolio which need
not be certified, within four to six months from the effective date of
Post-Effective Amendment No. 26.
Registrant hereby undertakes that whenever shareholders meeting the
requirements of Section 16(c) of the Investment Company Act of 1940 inform the
Board of Trustees of their desire to communicate with shareholders of the Fund,
the Trustees will inform such shareholders as to the approximate number of
shareholders of record and the approximate costs of mailing or afford said
shareholders access to a list of shareholders.
Registrant hereby undertakes to call a meeting of shareholders for the
purpose of voting upon the question of removal of a Trustee(s) when requested in
writing to do so by the holders of at least 10% of Registrant's outstanding
shares and in connection with such meetings to assist in communications with
other shareholders as required by the provisions of Section 16(c) of the
Investment Company Act of 1940.
Registrant hereby undertakes to furnish each prospective person to whom a
prospectus for any series of the Registrant is delivered with a copy of the
Registrant's latest annual report to shareholders for such series, when such
annual report is issued containing information called for by Item 5A of Form
N-1A, upon request and without charge.
NOTICE
A copy of the Agreement and Declaration of Trust for The Advisors' Inner
Circle Fund 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 Fund by an officer of the Fund 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 Fund.
C-13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 29 to the Registration Statement No. 33-42484 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Wayne, Commonwealth of Pennsylvania on the 22nd day of May, 1997.
THE ADVISORS' INNER CIRCLE FUND
By: /s/ David G. Lee
-----------------------------------------
David G. Lee
President
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below by the following persons in the
capacity on the dates indicated.
*
- ------------------------------ Trustee May 22, 1997
John Cooney
*
- ------------------------------ Trustee May 22, 1997
William M. Doran
*
- ------------------------------ Trustee May 22, 1997
Frank E. Morris
*
- ------------------------------ Trustee May 22, 1997
Robert A. Nesher
*
- ------------------------------ Trustee May 22, 1997
Robert A. Patterson
*
- ------------------------------ Trustee May 22, 1997
Eugene Peters
*
- ------------------------------ Trustee May 22, 1997
James M. Storey
/s/ David G. Lee
- ------------------------------ President & Chief May 22, 1997
David G. Lee Executive Officer
/s/ Mark Nagle
- ------------------------------ Controller & May 22, 1997
Mark Nagle Chief Financial Officer
*By: /s/ David G. Lee
-------------------------
David G. Lee
Attorney-in-Fact
C-14
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. AND
DESCRIPTION
- --------------------
<S> <C>
EX-99.B1 Registrant's Agreement and Declaration of Trust dated June 29, 1993 is incorporated
herein by reference to Registrant's Registration Statement on Form N-1A (File No.
33-42484), filed with the Securities and Exchange Commission on August 29, 1991.
EX-99.B1(a) Registrant's Amendment to the Agreement and Declaration of Trust dated December 2,
1996 is incorporated herein by reference to Post-Effective Amendment No. 27 to
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed with
the Securities and Exchange Commission on December 13, 1996.
EX-99.B1(b) Registrant's Amendment to the Agreement and Declaration of Trust dated February 18,
1997, is incorporated herein by reference to Post-Effective Amendment No. 28 to
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed with
the Securities and Exchange Commission on February 27, 1997.
EX-99.B2 Registrant's By-Laws are incorporated herein by reference to Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the
Securities and Exchange Commission on August 29, 1991.
EX-99.B2(a) Registrant's Amended and Restated By-Laws are incorporated herein by reference to
Post-Effective Amendment No. 27 to Registrant's Registration Statement on Form
N-1A (File No. 33-42484), filed with the Securities and Exchange Commission on
December 12, 1996.
EX-99.B3 Not Applicable.
EX-99.B4 Not Applicable.
EX-99.B5(a) Investment Advisory Agreement between Registrant and Clover Capital Management,
Inc. with respect to Clover Capital Equity Value Fund and Clover Capital Fixed
Income Fund dated November 14, 1991 as originally filed with Pre-Effective
Amendment No. 1 to Registrant's Registration Statement on Form N-1A (File No.
33-42484), filed with the Securities and Exchange Commission on October 28, 1991
is incorporated herein by reference to Post-Effective Amendment No. 24, filed on
February 28, 1996.
EX-99.B5(b) Investment Advisory Agreement between Registrant and Turner Investment Partners,
Inc., complete with schedule with respect to Turner Growth Equity Fund and Form
of schedule with respect to Turner Fixed Income Fund, Turner Small Cap Fund and
as revised with respect to Turner Growth Equity Fund dated February 21, 1992 as
originally filed with Post-Effective Amendment No. 11 to Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the
Securities and Exchange Commission on November 15, 1993 is incorporated by
reference to Post-Effective Amendment No. 24 filed on February 28, 1996.
</TABLE>
C-15
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. AND
DESCRIPTION
- --------------------
<S> <C>
EX-99.B5(c) Investment Advisory Agreement between Registrant and Oak Associates with respect to
White Oak Growth Stock Fund and Pin Oak Aggressive Stock Fund dated July 20, 1992
as originally filed with Post-Effective Amendment No. 3 to Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the
Securities and Exchange Commission on May 22, 1992 is incorporated by reference
to Post-Effective Amendment No. 24 filed on February 28, 1996.
EX-99.B5(d) Investment Advisory Agreement between Registrant and Aronson+Fogler with respect to
A+F Large-Cap Fund dated October 15, 1993 as originally filed with Post-Effective
Amendment No. 11 to Registrant's Registration Statement on Form N-1A (File No.
33-42484), filed with the Securities and Exchange Commission on November 15, 1993
is incorporated by reference to Post-Effective Amendment No. 24 filed on February
28, 1996.
EX-99.B5(e) Investment Advisory Agreement between Registrant and HGK Asset Management, Inc.
with respect to HGK Fixed Income Fund dated August 15, 1994 as originally filed
with Post-Effective Amendment No. 15 to Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the Securities and Exchange Commission
on June 15, 1994 is incorporated by reference to Post-Effective Amendment No. 24
filed on February 28, 1996.
EX-99.B5(f) Investment Advisory Agreement between Registrant and AIG Capital Management Corp.
with respect to AIG Money Market Fund is incorporated by reference to
Post-Effective Amendment No. 17 to Registrant's Registration Statement on Form
N-1A (File No. 33-42484), filed with the Securities and Exchange Commission on
September 19, 1994 is incorporated herein by reference to Post-Effective
Amendment No. 28 filed February 27, 1997.
EX-99.B5(g) Investment Advisory Agreement Between Registrant and First Manhattan Co. with
respect to FMC Select Fund dated May 3, 1995 as originally filed with
Post-Effective Amendment No. 19 to Registrant's Registration Statement on Form
N-1A (File No.33-42484), filed with the Securities and Exchange Commission on
February 1, 1995 is incorporated by reference to Post-Effective Amendment No. 24
filed on February 28, 1996.
EX-99.B5(h) Investment Advisory Agreement between Registrant and CRA Real Estate Securities
L.P. dated December 31, 1996 with respect to the CRA Realty Shares Portfolio is
filed herewith.
EX-99.B5(i) Form of Investment Advisory Agreement between Registrant and Trust for Community
Banks, L.P. with respect to the Extended Liquidity Portfolio, Short Duration
Portfolio and Intermediate Duration Portfolio is incorporated by reference to
Post-Effective Amendment No. 27 to Registrant's Registration Statement on Form
N-1A (File No. 33-42484), filed with the Securities and Exchange Commission on
December 13, 1996.
</TABLE>
C-16
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. AND
DESCRIPTION
- --------------------
<S> <C>
EX-99.B5(j) Form of Investment Sub-Advisory Agreement between Trust for Community Banks, L.P.
and Duff & Phelps Investment Management Co. with respect to the Extended
Liquidity Portfolio and Short Duration Portfolio is incorporated by reference to
Post-Effective Amendment No. 27 to Registrant's Registration Statement on Form
N-1A (File No. 33-42484) filed with the Securities and Exchange Commission on
December 13, 1996.
EX-99.B5(k) Form of Investment Sub-Advisory Agreement between Trust for Community Banks, L.P.
and State Street Research & Management Company with respect to the Short Duration
Portfolio and Intermediate Duration Portfolio is incorporated by reference to
Post-Effective Amendment No. 27 to Registrant's Registration Statement on Form
N-1A (File No. 33-42484), filed with the Securities and Exchange Commission on
December 13, 1996.
EX-99.B5(l) Form of Investment Sub-Advisory Agreement between Trust for Community Banks, L.P.
and Weiss, Peck & Greer, L.L.C. with respect to the Extended Liquidity Portfolio,
Pinnacle Short Duration Portfolio and Intermediate Duration Portfolio is
incorporated by reference to Post-Effective Amendment No. 27 to Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the
Securities and Exchange Commission on December 13, 1996.
EX-99.B5(m) Form of Investment Sub-Advisory Agreement between Trust for Community Banks, L.P.
and Western Asset Management with respect to the Extended Liquidity Portfolio,
Pinnacle Short Duration Portfolio and Pinnacle Intermediate Duration Portfolio is
incorporated by reference to Post-Effective Amendment No. 27 to Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the
Securities and Exchange Commission on December 13, 1996.
EX-99.B5(n) Form of Investment Advisory Agreement between Registrant and MDL Capital
Management, Inc. with respect to the MDL Broad Market Fixed Income Portfolio and
the MDL Large Cap Growth Equity Portfolio is filed herewith.
EX-99.B6 Amended and Restated Distribution Agreement between Registrant and SEI Financial
Services Company dated August 8, 1994 as originally filed with Post-Effective
Amendment No. 17 to Registrant's Registration Statement on Form N-1A (File No.
33-42484), filed with the Securities and Exchange Commission on September 19,
1994 is incorporated by reference to Post-Effective Amendment No. 24 filed on
February 28, 1996.
EX-99.B7 Not Applicable.
EX-99.B8 Custodian Agreement between Registrant and CoreStates Bank N.A. is incorporated
herein by reference to Pre-Effective Amendment No. 1 to Registrant's Registration
Statement on Form N-1A (File No. 33-42484), filed with the Securities and
Exchange Commission on October 28, 1991 is incorporated herein by reference to
Post-Effective Amendment No. 28 filed on February 27, 1997.
</TABLE>
C-17
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. AND
DESCRIPTION
- --------------------
<S> <C>
EX-99.B9 Amended and Restated Administration Agreement between Registrant and SEI Financial
Management Corporation, including schedules relating to Clover Capital Equity
Value Fund, Clover Capital Fixed Income Fund, White Oak Growth Stock Fund, Pin
Oak Aggressive Stock Fund, Roulston Midwest Growth Fund, Roulston Growth and
Income Fund, Roulston Government Securities Fund, A+P Large-Cap Fund, Turner
Fixed Income Fund, Turner Small Cap Fund, Turner Growth Equity Fund, Morgan
Grenfell Fixed Income Fund, Morgan Grenfell Municipal Bond Fund and HGK Fixed
Income Fund dated May 17, 1994 as originally filed with Post-Effective Amendment
No. 15 to Registrant's Registration Statement on Form N-1A (File No. 33-42484),
filed with the Securities and Exchange Commission on June 15, 1994 is
incorporated by reference to Post-Effective Amendment No. 24 filed on February
28, 1996.
EX-99.B9(a) Schedule dated November 11, 1996 to Administration Agreement dated November 14,
1991 as Amended and Restated May 17, 1994 adding the CRA Realty Shares Portfolio
is filed herewith.
EX-99.B9(b) Form of Shareholder Service Plan and Agreement for the Class A Shares of the CRA
Realty Shares Portfolio is incorporated by reference to Post-Effective Amendment
No. 26 to Registrant's Registration Statement on Form N-1A (File No. 33-42484),
filed with the Securities and Exchange Commission on October 15, 1996.
EX-99.B9(c) Form of Schedule to Amended and Restated Administration Agreement adding the
Extended Liquidity Portfolio, Short Duration Portfolio and Intermediate Duration
Portfolio is incorporated by reference to Post-Effective Amendment No. 27 to
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed with
the Securities and Exchange Commission on December 13, 1996.
EX-99.B9(d) Schedule to Amended and Restated Administration Agreement dated May 8, 1995 to the
Administration Agreement dated November 14, 1991 as Amended and Restated May 17,
1994 with respect to the FMC Select Fund is incorporated herein by reference to
Post-Effective Amendment No. 28 to Registrant's Registration Statement on Form
N-1A (File No. 33-42484), filed with the Securities and Exchange Commission on
February 27, 1997.
EX-99.B9(e) Schedule to the Amended and Restated Administration Agreement dated February 13,
1996 to the Administration Agreement November 14, 1991 as Amended and Restated
May 17, 1994 with respect to the Clover Capital Equity Value Fund, Clover Capital
Fixed Income Fund and Clover Capital Small Cap Value Fund is incorporated herein
by reference to Post-Effective Amendment No. 28 to Registrant's Registration
Statement on Form N-1A (File No. 33-42484), filed with the Securities and
Exchange Commission on February 27, 1997.
EX-99.B9(f) Consent to Assignment and Assumption of Administration Agreement dated June 1, 1996
is incorporated herein by reference to Post-Effective Amendment No. 28 to
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed with
the Securities and Exchange Commission on February 27, 1997.
</TABLE>
C-18
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. AND
DESCRIPTION
- --------------------
<S> <C>
EX-99.B9(g) Form of Schedule to the Amended and Restated Administration Agreement adding the
MDL Broad Market Fixed Income Portfolio and the MDL Large Cap Growth Equity
Portfolio is filed herewith.
EX-99.B10 Opinion and Consent of Counsel is incorporated herein by reference to Pre-Effective
Amendment No. 1 to Registrant's Registration Statement on Form N-1A (File No.
33-42484), filed with the Securities and Exchange Commission on October 28, 1991.
EX-99.B11 Consent of Independent Public Accountants is filed herewith.
EX-99.B12 Not Applicable.
EX-99.B13 Not Applicable.
EX-99.B14 Not Applicable.
EX-99.B15 Distribution Plan for The Advisors' Inner Circle Fund as originally filed with
Post-Effective Amendment No. 17 to Registrant's Registration Statement on Form
N-1A (File No. 33-42484), filed with the Securities and Exchange Commission on
September 19, 1994 is incorporated by reference to Post-Effective Amendment No.
24 filed on February 28, 1996.
EX-99.B16 Performance Quotation Computation is incorporated herein by reference to
Post-Effective Amendment No. 13 to Registrant's Registration Statement on Form
N-1A (File No. 33-42484), filed with the Securities and Exchange Commission on
February 25, 1994.
EX-99.B18 Rule 18f-3 Plan is incorporated herein to exhibit (15)(a) which is incorporated
herein by reference to exhibit (15)(a) to Post-Effective Amendment No. 21 to
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed with
the Securities and Exchange Commission on June 1, 1995.
EX-99.B24 Powers of Attorney for David G. Lee, John T. Cooney, William M. Doran, Frank E.
Morris, Robert A. Nesher, Gene Peters, Robert A. Patterson, James M. Storey and
Jeffrey A. Cohen are incorporated herein by reference to Post-Effective Amendment
No. 28 to Registrant's Registration Statement on Form N-1A (File No. 33-42484),
filed with the Securities and Exchange Commission on February 27, 1997.
EX-99.B27 Not Applicable.
</TABLE>
C-19
<PAGE>
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 31st day of December, 1996, by and between The
Advisors' Inner Circle Fund, a Massachusetts business trust (the "Trust"), and
CRA Real Estate Securities, L.P. (the "Adviser").
WHEREAS, the Trust is an open-end, diversified management investment
company registered under the Investment Company Act of 1940, as amended, (the
"1940 Act") consisting of several series of shares, each having its own
investment policies; and
WHEREAS, the Trust has retained SEI Fund Resources (the "Administrator")
to provide administration of the Trust's operations, subject to the control
of the Board of Trustees;
WHEREAS, the Trust desires to retain the Adviser to render investment
management services with respect to its CRA Realty Shares Portfolio and such
other portfolios as the Trust and the Adviser may agree upon (the
"Portfolios"), and the Adviser is willing to render such services:
NOW, THEREFORE, in consideration of mutual covenants herein contained,
the parties hereto agree as follows:
1. DUTIES OF THE ADVISER. The Trust employs the Adviser to manage
the investment and reinvestment of the assets, and to
continuously review, supervise, and administer the investment
program of the Portfolios, to determine in its discretion the
securities to be purchased or sold, to provide the Administrator
and the Trust with records concerning the Adviser's activities
which the Trust is required to maintain, and to render regular
reports to the Administrator and to the Trust's Officers and
Trustees concerning the Adviser's discharge of the foregoing
responsibilities.
The Adviser shall discharge the foregoing responsibilities
subject to the control of the Board of Trustees of the Trust and
in compliance with such policies as the Trustees may from time to
time establish, and in compliance with the objectives, policies,
and limitations for each such Portfolio set forth in the
Portfolio's prospectus and statement of additional information as
amended from time to time, and applicable laws and regulations.
The Adviser accepts such employment and agrees, at its own
expense, to render the services and to provide the office space,
furnishings and equipment and the personnel required by it to
perform the services on the
<PAGE>
terms and for the compensation provided herein.
2. PORTFOLIO TRANSACTIONS. The Adviser is authorized to select the
brokers or dealers that will execute the purchases and sales of
portfolio securities for the Portfolios and is directed to use
its best efforts to obtain the best net results as described from
time to time in the Portfolios' Prospectuses and Statement of
Additional Information. The Adviser will promptly communicate to
the Administrator and to the officers and the Trustees of the
Trust such information relating to portfolio transactions as they
may reasonably request.
It is understood that the Adviser will not be deemed to have
acted unlawfully, or to have breached a fiduciary duty to the
Trust or be in breach of any obligation owing to the Trust under
this Agreement, or otherwise, by reason of its having directed a
securities transaction on behalf of the Trust to a broker-dealer
in compliance with the provisions of Section 28(e) of the
Securities Exchange Act of 1934 or as described from time to time
by the Portfolios' Prospectuses and Statement of Additional
Information.
3. COMPENSATION OF THE ADVISER. For the services to be rendered by
the Adviser as provided in Sections 1 and 2 of this Agreement,
the Trust shall pay to the Adviser compensation at the rate
specified in the Schedule(s) which are attached hereto and made a
part of this Agreement. Such compensation shall be paid to the
Adviser at the end of each month, and calculated by applying a
daily rate, based on the annual percentage rates as specified in
the attached Schedule(s), to the assets. The fee shall be based
on the average daily net assets for the month involved.
All rights of compensation under this Agreement for services
performed as of the termination date shall survive the
termination of this Agreement.
4. OTHER EXPENSES. The Adviser shall pay all expenses of printing
and mailing reports, prospectuses, statements of additional
information, and sales literature relating to the solicitation of
prospective clients. The Trust shall pay all expenses relating
to mailing to existing shareholders prospectuses, statements of
additional information, proxy solicitation material and
shareholder reports.
5. EXCESS EXPENSES. If the expenses for any Portfolio for any
fiscal year (including fees and other amounts payable to the
Adviser, but excluding interest, taxes, brokerage costs,
litigation, and other extraordinary costs) as calculated every
business day would exceed the expense limitations imposed on
investment companies by any applicable statute or regulatory
authority of any jurisdiction in which shares of a Portfolio are
qualified for
<PAGE>
offer and sale, the Adviser shall bear such excess cost.
However, the Adviser will not bear expenses of any Portfolio
which would result in the Portfolio's inability to qualify as a
regulated investment company under provisions of the Internal
Revenue Code. Payment of expenses by the Adviser pursuant to
this Section 5 shall be settled on a monthly basis (subject to
fiscal year end reconciliation) by a reduction in the fee payable
to the Adviser for such month pursuant to Section 3 and, if such
reduction shall be insufficient to offset such expenses, by
reimbursing the Trust.
6. REPORTS. The Trust and the Adviser agree to furnish to each
other, if applicable, current prospectuses, proxy statements,
reports to shareholders, certified copies of their financial
statements, and such other information with regard to their
affairs as each may reasonably request.
7. STATUS OF THE ADVISER. The services of the Adviser to the Trust
are not to be deemed exclusive, and the Adviser shall be free to
render similar services to others so long as its services to the
Trust are not impaired thereby. The Adviser shall be deemed to
be an independent contractor and shall, unless otherwise
expressly provided or authorized, have no authority to act for or
represent the Trust in any way or otherwise be deemed an agent of
the Trust.
8. CERTAIN RECORDS. Any records required to be maintained and
preserved pursuant to the provisions of Rule 31a-1 and Rule 31a-2
promulgated under the 1940 Act which are prepared or maintained
by the Adviser on behalf of the Trust are the property of the
Trust and will be surrendered promptly to the Trust on request.
9. LIMITATION OF LIABILITY OF THE ADVISER. The duties of the
Adviser shall be confined to those expressly set forth herein,
and no implied duties are assumed by or may be asserted against
the Adviser hereunder. The Adviser shall not be liable for any
error of judgment or mistake of law or for any loss arising out
of any investment or for any act or omission in carrying out its
duties hereunder, except a loss resulting from willful
misfeasance, bad faith or gross negligence in the performance of
its duties, or by reason of reckless disregard of its obligations
and duties hereunder, except as may otherwise be provided under
provisions of applicable state law or Federal securities law
which cannot be waived or modified hereby. (As used in this
Paragraph 9, the term "Adviser" shall include directors,
officers, employees and other corporate agents of the Adviser as
well as that corporation itself).
10. PERMISSIBLE INTERESTS. Trustees, agents, and shareholders of the
Trust
<PAGE>
are or may be interested in the Adviser (or any successor
thereof) as directors, partners, officers, or shareholders, or
otherwise; directors, partners, officers, agents, and
shareholders of the Adviser are or may be interested in the Trust
as Trustees, shareholders or otherwise; and the Adviser (or any
successor) is or may be interested in the Trust as a shareholder
or otherwise. In addition, brokerage transactions for the Trust
may be effected through affiliates of the Adviser if approved by
the Board of Trustees, subject to the rules and regulations of
the Securities and Exchange Commission.
11. LICENSE OF THE ADVISER'S NAME. The Adviser hereby agrees to
grant a license to the Trust for use of its name in the names of
the Portfolios for the term of this Agreement and such license
shall terminate upon termination of this Agreement.
12. DURATION AND TERMINATION. This Agreement, unless sooner
terminated as provided herein, shall remain in effect until two
years from date of execution, and thereafter, for periods of one
year so long as such continuance thereafter is specifically
approved at least annually (a) by the vote of a majority of those
Trustees of the Trust who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval, and (b) by the
Trustees of the Trust or by vote of a majority of the outstanding
voting securities of each Portfolio; provided, however, that if
the shareholders of any Portfolio fail to approve the Agreement
as provided herein, the Adviser may continue to serve hereunder
in the manner and to the extent permitted by the 1940 Act and
rules and regulations thereunder. The foregoing requirement that
continuance of this Agreement be "specifically approved at least
annually" shall be construed in a manner consistent with the 1940
Act and the rules and regulations thereunder.
This Agreement may be terminated as to any Portfolio at any time,
without the payment of any penalty by vote of a majority of the
Trustees of the Trust or by vote of a majority of the outstanding
voting securities of the Portfolio on not less than 30 days nor
more than 60 days written notice to the Adviser, or by the
Adviser at any time without the payment of any penalty, on 90
days written notice to the Trust. This Agreement will
automatically and immediately terminate in the event of its
assignment. Any notice under this Agreement shall be given in
writing, addressed and delivered, or mailed postpaid, to the
other party at any office of such party.
As used in this Section 11, the terms "assignment", "interested
persons", and a "vote of a majority of the outstanding voting
securities" shall have the respective meanings set forth in the
1940 Act and the rules and
<PAGE>
regulations thereunder; subject to such exemptions as may be
granted by the Securities and Exchange Commission under said Act.
14. CHANGE IN THE ADVISER'S MEMBERSHIP. The Adviser agrees that it
shall notify the Trust of any change in the membership of the
Adviser within a reasonable time after such change.
15. NOTICE. Any notice required or permitted to be given by either
party to the other shall be deemed sufficient if sent by
registered or certified mail, postage prepaid, addressed by the
party giving notice to the other party at the last address
furnished by the other party to the party giving notice: if to
the Trust, at One Freedom Valley Road, Oaks, PA 19456 and if to
the Adviser, at 259 Radnor-Chester Road, Suite 205, Radnor, PA
19087.
16. SEVERABILITY. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise,
the remainder of this Agreement shall not be affected thereby.
17. GOVERNING LAW. This Agreement shall be governed by the internal
laws of the Commonwealth of Massachusetts, without regard to
conflict of law principles; provided, however, that nothing
herein shall be construed as being inconsistent with the 1940
Act.
A copy of the Agreement and Declaration of Trust of the Trust is on file with
the Secretary of the Commonwealth of Massachusetts, and notice is hereby
given that this instrument is executed on behalf of the Trustees of the Trust
as Trustees, and is not binding upon any of the Trustees, officers, or
shareholders of the Trust individually but binding only upon the assets and
property of the Trust.
No portfolio of the Trust shall be liable for the obligations of any other
portfolio of the Trust. Without limiting the generality of the foregoing,
the Adviser shall look only to the assets of the Portfolios for payment of
fees for services rendered to the Portfolios.
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed as of the day and year first written above.
THE ADVISORS' INNER CIRCLE FUND
By: \S\ BARBARA A. NUGENT
------------------------------
Attest: \S\ CASSANDRA ARNOLD
--------------------------
CRA REAL ESTATE SECURITIES, L.P.
By: \S\ T. RITSON FERGUSON
------------------------------
Attest: \S\ CAROL J. HANNAN
--------------------------
<PAGE>
SCHEDULE
TO THE
INVESTMENT ADVISORY AGREEMENT
BETWEEN
THE ADVISORS' INNER CIRCLE FUND
AND
CRA REAL ESTATE SECURITIES, L.P.
Pursuant to Article 3, the Trust shall pay the Adviser compensation at an
annual rate as follows:
Portfolio Fee
--------- ---
CRA Realty Shares Portfolio .70% of the average daily net assets
<PAGE>
THE ADVISOR' INNER CIRCLE FUND
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this ____ day of _________, 199_, by and between The
Advisors' Inner Circle Fund, a Massachusetts business trust (the "Trust"),
and MDL Capital Management, Inc. (the "Adviser").
WHEREAS, the Trust is an open-end, diversified management investment
company registered under the Investment Company Act of 1940, as amended, (the
"1940 Act") consisting of several series of shares, each having its own
investment policies; and
WHEREAS, the Trust has retained SEI Fund Resources (the "Administrator")
to provide administration of the Trust's operations, subject to the control
of the Board of Trustees;
WHEREAS, the Trust desires to retain the Adviser to render investment
management services with respect to its Camelot Broad Market Fixed Income
Portfolio, Camelot Large Cap Growth Equity Portfolio and such other
portfolios as the Trust and the Adviser may agree upon (the "Portfolios"),
and the Adviser is willing to render such services:
NOW, THEREFORE, in consideration of mutual covenants herein contained,
the parties hereto agree as follows:
1. DUTIES OF THE ADVISER. The Trust employs the Adviser to manage
the investment and reinvestment of the assets, and to
continuously review, supervise, and administer the investment
program of the Portfolios, to determine in its discretion the
securities to be purchased or sold, to provide the Administrator
and the Trust with records concerning the Adviser's activities
which the Trust is required to maintain, and to render regular
reports to the Administrator and to the Trust's Officers and
Trustees concerning the Adviser's discharge of the foregoing
responsibilities.
The Adviser shall discharge the foregoing responsibilities
subject to the control of the Board of Trustees of the Trust and
in compliance with such policies as the Trustees may from time to
time establish, and in compliance with the objectives, policies,
and limitations for each such Portfolio set forth in the
Portfolio's prospectus and statement of additional information as
amended from time to time, and applicable laws and regulations.
The Adviser accepts such employment and agrees, at its own
expense, to
<PAGE>
render the services and to provide the office space, furnishings
and equipment and the personnel required by it to perform the
services on the terms and for the compensation provided herein.
2. PORTFOLIO TRANSACTIONS. The Adviser is authorized to select the
brokers or dealers that will execute the purchases and sales of
portfolio securities for the Portfolios and is directed to use
its best efforts to obtain the best net results as described from
time to time in the Portfolios' Prospectuses and Statement of
Additional Information. The Adviser will promptly communicate to
the Administrator and to the officers and the Trustees of the
Trust such information relating to portfolio transactions as they
may reasonably request.
It is understood that the Adviser will not be deemed to have
acted unlawfully, or to have breached a fiduciary duty to the
Trust or be in breach of any obligation owing to the Trust under
this Agreement, or otherwise, by reason of its having directed a
securities transaction on behalf of the Trust to a broker-dealer
in compliance with the provisions of Section 28(e) of the
Securities Exchange Act of 1934 or as described from time to time
by the Portfolios' Prospectuses and Statement of Additional
Information.
3. COMPENSATION OF THE ADVISER. For the services to be rendered by
the Adviser as provided in Sections 1 and 2 of this Agreement,
the Trust shall pay to the Adviser compensation at the rate
specified in the Schedule(s) which are attached hereto and made a
part of this Agreement. Such compensation shall be paid to the
Adviser at the end of each month, and calculated by applying a
daily rate, based on the annual percentage rates as specified in
the attached Schedule(s), to the assets. The fee shall be based
on the average daily net assets for the month involved.
All rights of compensation under this Agreement for services
performed as of the termination date shall survive the
termination of this Agreement.
4. OTHER EXPENSES. The Adviser shall pay all expenses of printing
and mailing reports, prospectuses, statements of additional
information, and sales literature relating to the solicitation of
prospective clients. The Trust shall pay all expenses relating
to mailing to existing shareholders prospectuses, statements of
additional information, proxy solicitation material and
shareholder reports.
5. EXCESS EXPENSES. If the expenses for any Portfolio for any
fiscal year (including fees and other amounts payable to the
Adviser, but excluding interest, taxes, brokerage costs,
litigation, and other extraordinary costs) as calculated every
business day would exceed the expense limitations imposed
<PAGE>
on investment companies by any applicable statute or regulatory
authority of any jurisdiction in which shares of a Portfolio are
qualified for offer and sale, the Adviser shall bear such excess
cost.
However, the Adviser will not bear expenses of any Portfolio
which would result in the Portfolio's inability to qualify as a
regulated investment company under provisions of the Internal
Revenue Code. Payment of expenses by the Adviser pursuant to
this Section 5 shall be settled on a monthly basis (subject to
fiscal year end reconciliation) by a reduction in the fee payable
to the Adviser for such month pursuant to Section 3 and, if such
reduction shall be insufficient to offset such expenses, by
reimbursing the Trust.
6. REPORTS. The Trust and the Adviser agree to furnish to each
other, if applicable, current prospectuses, proxy statements,
reports to shareholders, certified copies of their financial
statements, and such other information with regard to their
affairs as each may reasonably request.
7. STATUS OF THE ADVISER. The services of the Adviser to the Trust
are not to be deemed exclusive, and the Adviser shall be free to
render similar services to others so long as its services to the
Trust are not impaired thereby. The Adviser shall be deemed to
be an independent contractor and shall, unless otherwise
expressly provided or authorized, have no authority to act for or
represent the Trust in any way or otherwise be deemed an agent of
the Trust.
8. CERTAIN RECORDS. Any records required to be maintained and
preserved pursuant to the provisions of Rule 31a-1 and Rule 31a-2
promulgated under the 1940 Act which are prepared or maintained
by the Adviser on behalf of the Trust are the property of the
Trust and will be surrendered promptly to the Trust on request.
9. LIMITATION OF LIABILITY OF THE ADVISER. The duties of the
Adviser shall be confined to those expressly set forth herein,
and no implied duties are assumed by or may be asserted against
the Adviser hereunder. The Adviser shall not be liable for any
error of judgment or mistake of law or for any loss arising out
of any investment or for any act or omission in carrying out its
duties hereunder, except a loss resulting from willful
misfeasance, bad faith or gross negligence in the performance of
its duties, or by reason of reckless disregard of its obligations
and duties hereunder, except as may otherwise be provided under
provisions of applicable state law or Federal securities law
which cannot be waived or modified hereby. (As used in this
Paragraph 9, the term "Adviser" shall include directors,
officers, employees and other corporate agents of the
<PAGE>
Adviser as well as that corporation itself).
10. PERMISSIBLE INTERESTS. Trustees, agents, and shareholders of the
Trust are or may be interested in the Adviser (or any successor
thereof) as directors, partners, officers, or shareholders, or
otherwise; directors, partners, officers, agents, and
shareholders of the Adviser are or may be interested in the Trust
as Trustees, shareholders or otherwise; and the Adviser (or any
successor) is or may be interested in the Trust as a shareholder
or otherwise. In addition, brokerage transactions for the Trust
may be effected through affiliates of the Adviser if approved by
the Board of Trustees, subject to the rules and regulations of
the Securities and Exchange Commission.
11. LICENSE OF THE ADVISER'S NAME. The Adviser hereby agrees to
grant a license to the Trust for use of its name in the names of
the Portfolios for the term of this Agreement and such license
shall terminate upon termination of this Agreement.
12. DURATION AND TERMINATION. This Agreement, unless sooner
terminated as provided herein, shall remain in effect until two
years from date of execution, and thereafter, for periods of one
year so long as such continuance thereafter is specifically
approved at least annually (a) by the vote of a majority of those
Trustees of the Trust who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval, and (b) by the
Trustees of the Trust or by vote of a majority of the outstanding
voting securities of each Portfolio; provided, however, that if
the shareholders of any Portfolio fail to approve the Agreement
as provided herein, the Adviser may continue to serve hereunder
in the manner and to the extent permitted by the 1940 Act and
rules and regulations thereunder. The foregoing requirement that
continuance of this Agreement be "specifically approved at least
annually" shall be construed in a manner consistent with the 1940
Act and the rules and regulations thereunder.
This Agreement may be terminated as to any Portfolio at any time,
without the payment of any penalty by vote of a majority of the
Trustees of the Trust or by vote of a majority of the outstanding
voting securities of the Portfolio on not less than 30 days nor
more than 60 days written notice to the Adviser, or by the
Adviser at any time without the payment of any penalty, on 90
days written notice to the Trust. This Agreement will
automatically and immediately terminate in the event of its
assignment. Any notice under this Agreement shall be given in
writing, addressed and delivered, or mailed postpaid, to the
other
<PAGE>
party at any office of such party.
As used in this Section 11, the terms "assignment", "interested
persons", and a "vote of a majority of the outstanding voting
securities" shall have the respective meanings set forth in the
1940 Act and the rules and regulations thereunder; subject to
such exemptions as may be granted by the Securities and Exchange
Commission under said Act.
14. CHANGE IN THE ADVISER'S MEMBERSHIP. The Adviser agrees that it
shall notify the Trust of any change in the membership of the
Adviser within a reasonable time after such change.
15. NOTICE. Any notice required or permitted to be given by either
party to the other shall be deemed sufficient if sent by
registered or certified mail, postage prepaid, addressed by the
party giving notice to the other party at the last address
furnished by the other party to the party giving notice: if to
the Trust, at 680 East Swedesford Road, Wayne, PA 19087-1658 and
if to the Adviser at
16. SEVERABILITY. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise,
the remainder of this Agreement shall not be affected thereby.
17. GOVERNING LAW. This Agreement shall be governed by the internal
laws of the Commonwealth of Massachusetts, without regard to
conflict of law principles; provided, however, that nothing
herein shall be construed as being inconsistent with the 1940
Act.
A copy of the Agreement and Declaration of Trust of the Trust is on file with
the Secretary of the Commonwealth of Massachusetts, and notice is hereby
given that this instrument is executed on behalf of the Trustees of the Trust
as Trustees, and is not binding upon any of the Trustees, officers, or
shareholders of the Trust individually but binding only upon the assets and
property of the Trust.
No portfolio of the Trust shall be liable for the obligations of any other
portfolio of the Trust. Without limiting the generality of the foregoing,
the Adviser shall look only to the assets of the Portfolios for payment of
fees for services rendered to the Portfolios.
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed as of the day and year first written above.
THE ADVISORS' INNER CIRCLE FUND NAME OF ADVISER
By: By:
---------------------------- ----------------------------
Attest: Attest:
------------------------ ------------------------
<PAGE>
SCHEDULE
TO THE
INVESTMENT ADVISORY AGREEMENT
BETWEEN
THE ADVISORS' INNER CIRCLE FUND
AND
MDL CAPTAL MANAGEMENT, INC.
Pursuant to Article 3, the Trust shall pay the Adviser compensation at an
annual rate as follows:
PORTFOLIO FEE
--------- ---
Camelot Broad Market Fixed Income Portfolio .45%
Camelot Large Cap Growth Equity Portfolio .74%
<PAGE>
CRA REAL ESTATE SECURITIES L.P.
CRA REALTY SHARES PORTFOLIO
SCHEDULE DATED NOVEMBER 11, 1996
TO THE ADMINISTRATION AGREEMENT
DATED NOVEMBER 14, 1991
AS AMENDED AND RESTATED MAY 17, 1994
BETWEEN
THE ADVISORS' INNER CIRCLE FUND
AND
SEI FUND RESOURCES
Fees: Pursuant to Article 4, Section A, the Trust shall pay the
Administrator compensation for services rendered to the CRA
Realty Shares Portfolio (the "Portfolio") at an annual rate
equal to 15.0 basis points on the first $100 million of
assets;12.5 basis points on the next $100 million of
assets;10.0 basis points on the next $100 million of assets
and 8.0 basis points on all assets over $300 million. There
is a minimum annual administration fee of $75,000 per
portfolio.
Term: Pursuant to Article 7, the term of this Agreement shall
commence on November 11, 1996 and shall remain in effect
with respect to the Portfolio for 3 years (the "Initial
Term"). This Agreement shall continue in effect for
successive periods of 2 years after the Initial Term, unless
terminated by either party on not less than 90 days prior
written notice to the other party. In the event of a
material breach of this Agreement by either party, the non-
breaching party shall notify the breaching party in writing
of such breach and upon receipt of such notice, the
breaching party shall have 45 days to remedy the breach or
the non-breaching party may immediately terminate this
Agreement.
This Agreement shall terminate with respect to the Portfolio
immediately upon its assignment except upon the express written
consent by the Portfolio to the assignment.
<PAGE>
MDL CAPITAL MANAGEMENT, INC.
MDL BROAD MARKET FIXED INCOME PORTFOLIO
MDL LARGE CAP GROWTH EQUITY PORTFOLIO
SCHEDULE DATED MAY __, 1997
TO THE ADMINISTRATION AGREEMENT
DATED NOVEMBER 14, 1991
AS AMENDED AND RESTATED MAY 17, 1994
BETWEEN
THE ADVISORS' INNER CIRCLE FUND
AND
SEI FUND RESOURCES
Fees: Pursuant to Article 4, Section A, the Trust shall pay the
Administrator compensation for services rendered to the MDL Broad
Market Fixed Income Portfolio and MDL Large Cap Growth Equity
Portfolio (the Portfolios") at an annual rate equal to 15.0 basis
points on the first $50 million of assets;12.5 basis points on
the next $50 million of assets and 10.0 basis points on all
assets over $100 million. There is a minimum annual
administration fee of $80,000 per portfolio and $15,000 per
additional class.
Term: Pursuant to Article 7, the term of this Agreement shall
commence on May __, 1997 and shall remain in effect with respect
to the Portfolio for 4 years (the "Initial Term"). This
Agreement shall continue in effect for successive periods of 2
years after the Initial Term, unless terminated by either party
on not less than 90 days prior written notice to the other party.
In the event of a material breach of this Agreement by either
party, the non-breaching party shall notify the breaching party
in writing of such breach and upon receipt of such notice, the
breaching party shall have 45 days to remedy the breach or the
non-breaching party may immediately terminate this Agreement.
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our firm name
included in the Post-Effective Amendment No. 29 to the Registration Statement on
Form N-1A of the The Advisors' Inner Circle (File No. 33-42484), and to all
references to our firm included in this Registration Statement.
/s/ ARTHUR ANDERSEN LLP
Philadelphia, Pa.,
May 20, 1997