<PAGE>
As filed with the Securities and Exchange Commission on September 27, 1996
File No. 33-44293
File No. 811-6488
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 [_]
Post-Effective Amendment No. 5 [X]
and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [_]
Amendment No. 7 [X]
CUFUND
(Exact name of registrant as specified in charter)
c/o CT Corporation
2 Oliver Street
Boston, Massachusetts 02109
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code (800) 342-5734
David G. Lee
c/o SEI Corporation
680 E. Swedesford Road
Wayne, Pennsylvania 19087
(Name and Address of Agent for Service)
Copies to:
Richard W. Grant, Esquire Francis C. Lee
Morgan, Lewis & Bockius LLP Southwest Corporate F.C.U.
2000 One Logan Square 7920 Belt Line Road, Suite 1100
Philadelphia, PA 19103 Dallas, TX 75240
It is proposed that this filing become effective (check appropriate box)
[x] immediately upon filing pursuant to paragraph (b)
[_] on [date] pursuant to paragraph (b)
[_] 60 days after filing pursuant to paragraph (a) (1)
[_] 75 days after filing pursuant to paragraph (a) (2)
[_] on [date] pursuant to paragraph (a) of Rule 485
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CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
================================================================================
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum
Title of Securities Amount Being Offering Price Aggregate Amount of
Being Registered Registered Per Unit Offering Price (1) Registration Fee(1)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
units of beneficial $ 12,696,241 9.98* $ 12,696,241 $100
interest
=================================================================================================================
</TABLE>
(1) Registrant has calculated the maximum offering price pursuant to Rule 24e-2
under the Investment Company Act of 1940, as amended (the "1940 Act") for the
fiscal year ended May 31, 1996. Registrant had actual aggregate redemptions of
$19,785,621 worth of units of beneficial interest ("shares") for its fiscal year
ended May 31, 1996; has used $7,379,380 of available redemptions for reductions
pursuant to Rule 24F-2(c) under the 1940 Act and has previously used no
available redemptions for reductions pursuant to Rule 24e-2(a) of the 1940 Act
during the current year. Registrant elects to use redemptions in the aggregate
amount of $12,406,240 worth of shares units for reduction to the registration
fee for this filing pursuant to Rule 24e-2(a) of the 1940 Act.
Registrant currently is registering $12,696,241 worth of shares pursuant to Rule
24e-2, and together with $29,799,572 worth of shares previously registered
pursuant to Rule 24e-2 in prior fiscal years (none of which were previously
applied as a reduction of filing fees pursuant to Rule 24e-2), Registrant has
registered $49,585,193 worth shares under the 1933 Act, other than pursuant to
Rule 24f-2, as of the effective date of this Post-Effective Amendment.
*The proposed maximum offering price per unit of $9.98 reflects the net asset
value of the Adjustable Rate Mortgage Portfolio; and the net asset value of the
Short-Term Maturity Portfolio was $9.80 as of September 26, 1996.
Registrant has elected to register an indefinite number of securities pursuant
to Rule 24f-2 under the Investment Company Act of 1940, as amended. Registrant
has filed a Rule 24F-2 Notice on July 29, 1996 for its fiscal year ended May 31,
1996.
================================================================================
<PAGE>
CUFUND
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
N-1A Item No. Location
- ------------- --------
<S> <C> <C>
PART A - Short-Term Maturity Portfolio and Adjustable Rate Portfolio
- ------
Item 1. Cover Page ........................................Cover Page
Item 2. Synopsis ..........................................Annual Operating Expenses
Summary
Item 3. Condensed Financial Information ...................Financial Highlights
Item 4. General Description of Registrant .................Summary; The Trust;
Investment Objective;
Investment Policies; Portfolio
Management Policies;
Investment Risks
Item 5. Management of the Fund ............................The Adviser; The
Administrator; The
Shareholder Servicing Agent;
Trustees and Officers of the
Trust
Item 5A. Management's Discussion of Fund Performance ....... *
Item 6. Capital Stock and Other Securities ................General Information--
Voting Rights, Shareholder
Inquiries; Dividends; Federal
Taxes; State 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 .........................*
</TABLE>
PART B - Short-Term Maturity Portfolio and Adjustable Rate Portfolio
- ------
<TABLE>
<CAPTION>
<S> <C> <C>
Item 10. Cover Page ........................................*
Item 11. Table of Contents .................................Table of Contents
Item 12. General Information and History ...................*
Item 13. Investment Objectives and Policies ................Description of Permitted
Investments; General
Information--
Investment Limitations; Non-
Fundamental Policies
Item 14. Management of the Fund ............................The Adviser; Trustees and
Officers of the Trust; The
Administrator; The
Shareholder Servicing Agent
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
Item 15. Control Persons and Principal Holders of
Securities .......................................General Information--
5% Shareholders; Trustees
and Officers of the Trust
Item 16. Investment Advisory and Other Services ............The Adviser; The
Administrator; The
Shareholder Servicing Agent;
The Distributor
Item 17. Brokerage Allocation and Other Practices ..........General Information--
Portfolio Transactions
Item 18. Capital Stock and Other Securities ................General Information--
Description of Shares;
Dividends; Shareholder
Liability; Limitation of
Trustees' Liability; Voting
Rights
Item 19. Purchase, Redemption, and Pricing of
Securities Being Offered .........................Purchase and Redemption of
Shares; Description of Net
Asset Value
Item 20. Tax Status ........................................Federal Taxes; State Taxes
Item 21. Underwriters ......................................The Distributor
Item 22. Calculation of Performance Data ...................Performance; Computation of
Yield; Calculation of Total
Return
Item 23. Financial Statements ..............................Financial Statements
</TABLE>
PART C Information required to be included in Part C is set forth under the
- ------
appropriate Item, so numbered, in Part C of this Registration Statement.
__________________
* Not Applicable
<PAGE>
PROSPECTUS
AND
STATEMENT OF ADDITIONAL INFORMATION
9/27/96
CUF-F008-02
<PAGE>
CUFUND
Investment Adviser:
SOUTHWEST CORPORATE FEDERAL CREDIT UNION
CUFUND (the "Trust") is a no-load mutual fund seeking to provide a convenient
and economical means of investing in one or more professionally managed
portfolios of securities. This Prospectus relates to the shares of the
following fixed income portfolios (the "Portfolios"):
. SHORT-TERM MATURITY PORTFOLIO
. ADJUSTABLE RATE PORTFOLIO
The Trust's shares are offered exclusively to federally and state chartered
credit unions ("Shareholders").
This combined Prospectus and Statement of Additional Information sets forth
concisely the information about the Trust that a prospective investor should
know before investing. Investors are advised to read this combined Prospectus
and Statement of Additional Information and retain it for future reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS COMBINED PROSPECTUS AND STATEMENT OF ADDITIONAL
INFORMATION. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THIS INVESTMENT WILL NOT REPRESENT SHARES OR DEPOSITS OF AND WILL NOT BE
INSURED BY THE NATIONAL CREDIT UNION SHARE INSURANCE FUND OR ANY OTHER
GOVERNMENT AGENCY. ONLY CREDIT UNIONS MAY INVEST IN CUFUND.
ALL INVESTMENTS OF CUFUND ARE PERMITTED BY THE FEDERAL CREDIT UNION ACT AND
NATIONAL CREDIT UNION ADMINISTRATION RULES AND REGULATIONS FOR NATURAL PERSON
CREDIT UNIONS. THE MERITS OF THESE SECURITIES HAVE NOT BEEN PASSED UPON BY THE
NATIONAL CREDIT UNION ADMINISTRATION NOR HAS THE NATIONAL CREDIT UNION
ADMINISTRATION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS COMBINED PROSPECTUS
AND STATEMENT OF ADDITIONAL INFORMATION.
NO AGENT OR OTHER OFFICIAL OF SOUTHWEST CORPORATE FEDERAL CREDIT UNION OR ANY
OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS COMBINED PROSPECTUS AND
STATEMENT OF ADDITIONAL INFORMATION AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS SHOULD NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY CUFUND.
THIS COMBINED PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION DOES NOT
CONSTITUTE AN OFFERING BY CUFUND OR BY THE DISTRIBUTOR IN ANY JURISDICTION IN
WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.
SEPTEMBER 27, 1996
<PAGE>
2
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Summary..................................................................... 3
Annual Operating Expenses................................................... 4
Financial Highlights........................................................ 5
The Trust................................................................... 6
The Short-Term Maturity Portfolio........................................... 6
The Adjustable Rate Portfolio............................................... 7
Portfolio Management Policies............................................... 7
The Adviser................................................................. 8
The Administrator........................................................... 9
The Shareholder Servicing Agent............................................. 9
The Distributor............................................................. 9
Trustees and Officers of the Trust.......................................... 10
Purchase and Redemption of Shares........................................... 11
</TABLE>
<TABLE>
<S> <C>
Dividends................................................................... 12
Determination of Net Asset Value............................................ 12
Performance................................................................. 13
Computation of Yield........................................................ 13
Calculation of Total Return................................................. 13
Federal Taxes............................................................... 13
State Taxes................................................................. 14
General Information......................................................... 15
Description of Permitted Investments and Risk Factors....................... 20
Experts..................................................................... 23
Financial Statements........................................................ 23
Appendix.................................................................... A-1
</TABLE>
<PAGE>
3
SUMMARY
CUFUND (THE "TRUST") IS A NO-LOAD, DIVERSIFIED, OPEN-END MANAGEMENT
INVESTMENT COMPANY THAT PROVIDES A CONVENIENT WAY FOR FEDERALLY AND STATE
CHARTERED CREDIT UNIONS TO INVEST IN PROFESSIONALLY MANAGED PORTFOLIOS OF
SECURITIES. THE FOLLOWING PROVIDES BASIC INFORMATION ABOUT THE TRUST'S SHORT-
TERM MATURITY AND ADJUSTABLE RATE PORTFOLIOS (EACH, A "PORTFOLIO").
What are the Investment Objectives? The Short-Term Maturity Portfolio seeks a
high level of income consistent with safety of capital. The Adjustable Rate
Portfolio seeks higher levels of current income while reducing principal
volatility. There is no assurance that either Portfolio will meet its
investment objective. See "Investment Objective" for each Portfolio.
What are the Permitted Investments? Each Portfolio's assets will be invested
exclusively in obligations that constitute authorized investments for federal
credit unions. When market conditions are favorable, the Short-Term Maturity
Portfolio will be predominantly invested in mortgage-backed securities. The
Adjustable Rate Portfolio will invest at least 65% of its assets in adjustable
rate securities.
What are the Risks Involved with an Investment in the Portfolios? Each
Portfolio's investments are subject to market and interest rate fluctuations
which may affect the value of the Portfolio's shares. In addition, the
mortgage-backed securities in which the Portfolios may invest are subject to
the risk of prepayment during periods of declining interest rates, which could
affect the Portfolios' ability to lock-in longer term rates during such
periods. See "Investment Policies" for each Portfolio and the "Description of
Permitted Investments and Risk Factors."
Who is the Adviser? Southwest Corporate Federal Credit Union serves as the
Adviser of the Trust and is entitled to a fee, which is calculated daily and
paid monthly, at an annual rate of .32% of the average daily net assets of each
Portfolio. The Adviser has voluntarily agreed to waive its fee and reimburse
the Trust for other expenses to the extent necessary to limit the total
operating expenses of each Portfolio to .39%. The Adviser reserves the right,
in its sole discretion, to terminate this voluntary waiver at any time. See
"The Adviser."
Who is the Administrator? SEI Fund Resources serves as the Administrator of
the Trust. See "The Administrator."
Who is the Shareholder Servicing Agent? SEI Fund Resources serves as the
transfer agent, dividend disbursing agent and shareholder servicing agent for
the Trust under the Administration Agreement. See "The Shareholder Servicing
Agent."
Who is the Distributor? SEI Financial Services Company serves as the
exclusive distributor of the Trust's shares. No compensation is paid to the
Distributor for distribution services. See "The Distributor."
How are Shares Purchased and Redeemed? Purchases and redemptions may be made
through the Distributor on a day on which both the New York Stock Exchange and
the Federal Reserve wire system are open for business (a "Business Day"). A
Purchase Order will be effective as of the day received by the Distributor if
the Distributor receives the order prior to 4:00 p.m., Eastern time and
CoreStates Bank, N.A. (the "Custodian") receives federal funds before 12:00
p.m., Eastern time on the next Business Day. Redemption Orders must be placed
prior to 4:00 p.m., Eastern time on any Business Day for the order to be
accepted that day. See "Purchase and Redemption of Shares."
How are Dividends Paid? Substantially all of the net investment income
(exclusive of capital gains) of each Portfolio is declared daily and
distributed in the form of monthly dividends to Shareholders. Any capital gains
are distributed at least annually. Distributions are paid in additional shares
unless the Shareholder elects to take the payment in cash. See "Dividends."
<PAGE>
4
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
<TABLE>
<CAPTION>
SHORT-TERM ADJUSTABLE
MATURITY RATE
PORTFOLIO PORTFOLIO
- --------------------------------------------------------------------------------
<S> <C> <C>
Advisory Fees (after fee waivers)(1)(2)................... .14% .18%
Other Expenses(3)......................................... .25% .21%
- --------------------------------------------------------------------------------
Total Operating Expenses(1)(2)............................ .39% .39%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
(1) The Adviser has agreed to voluntarily waive its fee and reimburse expenses
in an amount that operates to limit Total Operating Expenses of each
Portfolio to not more than .39% of average daily net assets. The Adviser
reserves the right, in its sole discretion, to terminate this voluntary
waiver at any time. Absent the waiver of advisory fees, Advisory Fees and
Total Operating Expenses, as a percentage of average net assets, would
have been .32% and .57%, respectively, for the Short-Term Maturity
Portfolio and .32% and .53%, respectively, for the Adjustable Rate
Portfolio. Additional information may be found under "The Adviser" and
"The Administrator."
(2) The Advisory Fees and Total Operating Expenses set forth above have been
restated from historical figures to reflect an estimate of current
expenses.
(3) Administration fees are calculated at an annual rate which is the greater
of: (i) $214,000 or (ii) .09% of the average daily net assets of the Trust
up to $750 million, and .0725% of the average daily net assets of the
Trust exceeding $750 million. See "The Administrator."
EXAMPLE
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YR. 3 YRS. 5 YRS. 10 YRS.
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a
$1,000 investment in a Portfolio assuming a 5%
annual return and redemption at the end of each
time period........................................ $4 $13 $22 $49
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
The example is based upon the total operating expenses of each Portfolio as
set forth in the "Annual Operating Expenses" table above. THE EXAMPLE SHOULD
NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL
EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. The purpose of the expense
table and example is to assist the investor in understanding the various costs
and expenses that may be directly or indirectly borne by investors in each
Portfolio. Additional information may be found under "The Adviser," "The
Administrator" and "The Distributor."
<PAGE>
5
FINANCIAL HIGHLIGHTS
The following information on Financial Highlights has been audited by Arthur
Andersen LLP, independent public accountants, whose report thereon was
unqualified. This information should be read in conjunction with the financial
statements and notes thereto which appear in this combined Prospectus and
Statement of Additional Information. Further information about the performance
of the Portfolios, including management's discussion of the Portfolios'
performance, is contained in the Trust's annual report to Shareholders, which
may be obtained upon request without charge by contacting the Trust's
Administrator.
<TABLE>
<CAPTION>
ADJUSTABLE RATE PORTFOLIO SHORT-TERM MATURITY PORTFOLIO
----------------------------------------------- -----------------------------------------------
06/01/95 06/01/94 06/01/93 06/15/92(1) 06/01/95 06/01/94 06/01/93 06/15/92(1)
TO 05/31/96 TO 05/31/95 TO 05/31/94 TO 05/31/93 TO 05/31/96 TO 05/31/95 TO 05/31/94 TO 05/31/93
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period... 9.94 9.96 10.02 10.00 9.73 9.59 10.00 10.00
- ------------------------------------------------------------------------------------------------------------------------
Income from Investment
Operations
Net Investment Income. 0.59 0.53 0.37 0.38 0.52 0.50 0.41 0.44
Net Gains on
Investment
Securities........... 0.02 (0.02) (0.06) 0.02 0.03 0.14 (0.38) 0.01
- ------------------------------------------------------------------------------------------------------------------------
Total from Investment
Operations.......... 0.61 0.51 0.31 0.40 0.55 0.64 0.03 0.45
- ------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends from Net
Investment Income.... (0.59) (0.53) (0.37) (0.38) (0.52) (0.50) (0.41) (0.45)
Capital Gain
Distributions........ -- -- -- -- -- -- (0.03) --
- ------------------------------------------------------------------------------------------------------------------------
Total Distributions.. (0.59) (0.53) (0.37) (0.38) (0.52) (0.50) (0.44) (0.45)
- ------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of
Period................ 9.96 9.94 9.96 10.02 9.76 9.73 9.59 10.00
- ------------------------------------------------------------------------------------------------------------------------
Total Return........... 6.29% 5.25% 3.19% 4.22% 5.73% 6.92% 0.23% 4.77%
- ------------------------------------------------------------------------------------------------------------------------
Ratios and Supplemental
Data
- ------------------------------------------------------------------------------------------------------------------------
Net Assets, End of
Period (000).......... 153,760 162,147 183,486 172,593 30,633 35,050 41,737 20,288
Ratio of Expenses to
Average Net Assets,
Net of Fee Waivers.... 0.39% 0.38% 0.38% 0.39% 0.38% 0.38% 0.38% 0.39%
Ratio of Expenses to
Average Net Assets,
Excluding Fee Waivers. 0.53% 0.51% 0.51% 0.55% 0.61% 0.51% 0.55% 0.64%
Ratio of Net Investment
Income to Average Net
Assets, Net of Fee
Waivers............... 5.92% 5.34% 3.70% 3.94% 5.27% 5.24% 4.23% 4.69%
Ratio of Net Investment
Income to Average Net
Assets, Excluding Fee
Waivers............... 5.78% 5.21% 3.57% 3.78% 5.04% 5.11% 4.06% 4.44%
Portfolio Turnover
Rate.................. 23% 4% 67% 71% 42% 53% 148% 188%
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1)Commencement of operations. Ratios and total returns for this period have
been annualized.
Amounts designated as "--" are either $0 or have been rounded to $0.
<PAGE>
6
THE TRUST
CUFUND (the "Trust") is a diversified, open-end management investment company
and was organized as a Massachusetts business trust on November 22, 1991. The
Trust offers units of beneficial interest ("shares") in two portfolios
("Portfolios")--the Short-Term Maturity Portfolio and the Adjustable Rate
Portfolio. Each share of each Portfolio represents an undivided, proportionate
interest in that Portfolio. Shares of the Trust are sold without a sales
charge.
The Trust is offered solely to federally and state chartered credit unions.
Shares of the Trust are designed to qualify as eligible investments for
federally chartered credit unions pursuant to Sections 107(7), 107(8) and
107(15) of the Federal Credit Union Act ("FCUA") and Part 703 of the National
Credit Union Administration ("NCUA") Rules and Regulations ("NCUA Rules"). The
Trust intends to continually monitor changes in the applicable laws, rules and
regulations governing eligible investments, including new investments, for
federally chartered credit unions and to take such action as may be necessary
to assure that the Trust's investments, and, therefore, shares of the Trust,
continue to qualify as eligible investments under the FCUA.
Sections 107(7), 107(8) and 107(15) of the FCUA set forth those securities,
deposits and other obligations in which federally chartered credit unions may
invest. The Trust's investments consist exclusively of assets designed to
qualify as eligible investments if owned directly by a federally chartered
credit union. Shares of the Trust may or may not qualify as eligible
investments for particular state chartered credit unions. Accordingly, the
Trust encourages, but does not require, each state chartered credit union to
consult qualified legal counsel concerning whether the Trust's shares are
permissible investments for that credit union. While the Adviser will attempt
to assure that the Trust follows the investment policies set forth herein, the
Trust cannot be responsible for compliance by participating state chartered
credit unions with limitations on permissible investments to which they may be
subject.
The Trust is designed as a convenient and economic vehicle for federally and
state chartered credit unions seeking to obtain the yields available on short-
term and adjustable rate investments authorized under the FCUA. The Trust
offers to credit unions an alternative to direct investments in eligible
investments, with the intended financial advantage of quantity purchases. For
example, a higher yield may be available when eligible investments are bought
in substantial amounts. Investment in the Trust will relieve the credit unions
of many of the investment and administrative problems usually associated with
the direct purchase and investment management of these eligible investments,
such as scheduling maturities and reinvestments, safekeeping of securities,
surveying the market for the best price at which to buy and sell, and separate
principal and interest recordkeeping.
THE SHORT-TERM MATURITY PORTFOLIO
INVESTMENT OBJECTIVE
The Short-Term Maturity Portfolio seeks a high level of income consistent with
safety of capital. There is no assurance that the Portfolio's investment
objective will be met.
INVESTMENT POLICIES
The Short-Term Maturity Portfolio's assets will be invested exclusively in
obligations that are authorized investments for federal credit unions under the
FCUA, consisting of: obligations issued or fully guaranteed as to principal and
interest by the United States Government and its agencies or instrumentalities;
certificates of deposit, bankers' acceptances and time deposits issued or
guaranteed by United States banks with total assets exceeding $1 billion,
including comparable U.S. dollar denominated obligations of foreign branches of
such banks; mortgage-backed securities; share certificates issued by corporate
credit unions that operate in compliance with Part 704 of the NCUA Rules and
are examined by the NCUA; repurchase agreements and reverse repurchase
agreements involving securities that constitute permissible investments for the
Portfolio; and federal funds. When market conditions are favorable, the
Portfolio will be predominantly invested in mortgage-backed securities. See
"Portfolio Management Policies." For additional information regarding permitted
investments of the Portfolio, see "Description of Permitted Investments and
Risk Factors."
Under normal circumstances, the Short-Term Maturity Portfolio will maintain an
average weighted maturity of three years or less. The measure of maturity will
be the expected life of securities held by the Portfolio. See "Description of
Permitted Investments and Risk Factors."
<PAGE>
7
THE ADJUSTABLE RATE PORTFOLIO
INVESTMENT OBJECTIVE
The Adjustable Rate Portfolio seeks higher levels of current income while
reducing principal volatility. There is no assurance that the Portfolio's
investment objective will be met.
INVESTMENT POLICIES
The Adjustable Rate Portfolio's assets will be invested exclusively in
obligations authorized under the FCUA (see "The Short-Term Maturity Portfolio--
Investment Policies"). The Adjustable Rate Portfolio will, under normal
circumstances, invest at least 65% of its assets in adjustable rate mortgage
securities ("ARMs") or other adjustable rate securities that have interest
rates which reset at periodic intervals. ARMs are pass-through certificates
representing interests in a pool of adjustable rate mortgages. These adjustable
rate mortgages and other adjustable rate securities have interest rates that
reset at periodic intervals of one year or less based upon a specified index
and thus may experience less price volatility due to changes in market interest
rates than other debt securities. However, these securities will still
experience some price fluctuations since the interest rate adjustments may be
subject to caps and may not correlate completely to market interest rates. For
a description of the Portfolio's permitted investments, see "Description of
Permitted Investments and Risk Factors."
Under normal circumstances, the Adjustable Rate Portfolio expects to maintain
an average weighted maturity of 5 years.
PORTFOLIO MANAGEMENT POLICIES
The Adviser will seek to enhance the yield of each Portfolio by taking
advantage of yield disparities or other factors that occur in the government
securities and money markets. The Trust may dispose of any portfolio security
prior to its maturity if such disposition and reinvestment of the proceeds are
expected to enhance yield consistent with the Adviser's judgment as to a
desirable portfolio maturity structure or if such disposition is believed to be
advisable due to other circumstances or considerations.
Mortgage-backed securities purchased by a Portfolio will be issued or
guaranteed as to payment of principal and interest by the U.S. Government, its
agencies or instrumentalities or, if backed by private issuers, rated in one of
the two highest rating categories by a nationally recognized statistical rating
organization (an "NRSRO"). The principal Governmental issuers or guarantors of
mortgage-backed securities are the Government National Mortgage Association
("GNMA"), Federal National Mortgage Association ("FNMA"), and Federal Home Loan
Mortgage Corporation ("FHLMC"). Obligations of GNMA are backed by the full
faith and credit of the U.S. Government while obligations of FNMA and FHLMC are
supported by the respective agency only. Guarantees of each Portfolio's
securities by the U.S. Government, its agencies or instrumentalities guarantee
only the payment of principal and interest on the guaranteed securities, and do
not guarantee the securities' yield or value or the yield or value of the
Portfolio's shares. Each Portfolio may purchase mortgage-backed securities that
are backed or collateralized by fixed, adjustable or floating rate mortgages.
Under normal circumstances, the Adjustable Rate Portfolio will invest at least
25% of its total assets in privately issued mortgage-backed securities
(securities that are not issued or guaranteed by the U.S. Government, its
agencies or instrumentalities), including securities nominally issued by a
governmental entity (such as the Resolution Trust Corporation) that is not
responsible for the payment of principal and interest on such securities. While
such securities are not obligations of a governmental entity and thus may bear
a greater risk of nonpayment, the timely payment of principal and interest
normally is supported, at least partially, by various forms of insurance or
guarantees. There can be no assurance, however, that such credit enhancements
will support full payment of the principal and interest on such obligations. As
stated above, each Portfolio intends to invest in privately issued, mortgage-
backed securities only if they are rated in one of the two highest rating
categories.
For temporary defensive purposes when the Adviser determines that market
conditions warrant, each Portfolio may invest up to 100% of its assets in the
money market instruments described above and in the "Description of Permitted
Investments and Risk Factors," and may hold a portion of its assets in cash.
While each Portfolio expects to invest primarily in mortgage-backed securities,
the Adviser may decide to reduce either Portfolio's holdings at a time when it
believes mortgage-backed securities are trading at a high premium, experiencing
high levels of prepayments, trading
<PAGE>
at historically narrow effective margins, or are otherwise less attractive
investments with a risk of capital depreciation.
For the fiscal years ended May 31, 1996 and May 31, 1995, the portfolio
turnover rates for the Short-Term Maturity Portfolio were 42% and 53%,
respectively, and for the Adjustable Rate Portfolio were 23% and 4%,
respectively.
The Portfolios will not purchase any obligation of any bank or savings and loan
association that does not qualify as a "Section 107(8) institution" under the
FCUA and regulations thereunder.
Fluctuations in the price of securities held by a Portfolio will cause
fluctuations in the net asset value of that Portfolio's shares.
Some of the permitted investments for the Portfolios may not be permitted
investments for particular state chartered credit unions. See "The Trust."
THE ADVISER
The Trust and Southwest Corporate Federal Credit Union (the "Adviser") have
entered into an investment advisory agreement (the "Advisory Agreement"). 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 programs, subject to the supervision of, and
policies established by, the Trustees of the Trust. Each Portfolio may also
execute brokerage or other agency transactions through an affiliate of the
Adviser for which the affiliate receives compensation.
The Adviser is a federally chartered corporate credit union located at 7920
Belt Line Road, Suite 1100, Dallas, TX 75240. As of May 31, 1996, the Adviser
had total assets of approximately $3.3 billion, ranking it as the third largest
corporate credit union in the United States. Founded in 1975, the Adviser
provides credit unions with investment products and services; payment systems
services; correspondent financial services; financial management information;
and credit services. The Adviser registered as an investment adviser in 1989
and, as of May 31, 1996, had credit union funds under advisement in its
Investment Advisory Service of approximately $1.6 billion.
Bruce M. Fox, Vice President of Funds Management--joined the Adviser in 1990.
Mr. Fox has served as portfolio manager of the Short-Term Maturity Portfolio
since August, 1994 and will act as adviser to the Adjustable Rate Portfolio
beginning mid-September 1996. Prior to 1990, he was Cash Manager at Members
Insurance Group. He is responsible for management of Southwest Corporate
Federal Credit Union's funds management area.
Jim F. Dykstal, Investment Adviser--joined the Adviser in December 1995. Mr.
Dykstal manages the daily cash position of the Short-Term Maturity Portfolio
and, in conjunction with Mr. Fox, sets the overall strategy and decisions of
the Portfolio. He also advises approximately 12 portfolios of member credit
unions under the Network Investment Advisory Service. He has worked in the
fixed income markets since 1988.
The Adviser is entitled to a fee, which is calculated daily and paid monthly,
at an annual rate of .32% of the average daily net assets of each Portfolio.
California regulations require that the Adviser waive its advisory fee on that
portion of a Portfolio's assets invested in other open-end investment
companies. In addition, the Adviser has voluntarily agreed to waive all or a
portion of its fees and reimburse expenses in order to limit the total
operating expenses of each Portfolio to not more than .39% of each Portfolio's
average daily net assets. The Adviser reserves the right, in its sole
discretion, to terminate this voluntary fee waiver at any time.
The Advisory Agreement provides that if, for any fiscal year, the ratio of
expenses of any Portfolio (including amounts payable to the Adviser but
excluding interest, taxes, brokerage costs, litigation, and other extraordinary
expenses) exceeds limitations established by the State of California (currently
significantly higher than the Trust's expense ratio), the Adviser will bear the
amount of such excess. The Adviser will not be required to bear expenses of the
Trust or either Portfolio to an extent which would result in a Portfolio's
inability to qualify as a regulated investment company under provisions of the
Internal Revenue Code.
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
8
<PAGE>
part in the performance of its duties or from reckless disregard of its
obligations or duties under the Advisory Agreement.
The continuance of the Advisory Agreement, must be specifically approved at
least annually (i) by the vote of the Trustees, and (ii) by the vote of a
majority of the Trustees who are not parties to the Advisory 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 each
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.
THE ADMINISTRATOR
SEI Fund Resources (the "Administrator") and the Trust are parties to an
administration agreement (the "Administration Agreement"). Under the terms of
the Administration Agreement, the Administrator provides the Trust with overall
administrative services (other than investment advisory services) including all
necessary office space, equipment, personnel and facilities.
The Trust pays the Administrator a fee, which is calculated at an annual rate
which is the greater of: (i) .09% of the average daily net assets of the Trust
up to $750 million, and .0725% of the average daily net assets of the Trust
exceeding $750 million, or (ii) $214,000.
The Administration Agreement provides that the Administrator shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Trust in connection with the matters to which the Administration Agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Administrator in the performance of its duties or
from reckless disregard by it of its duties and obligations under the
Administration Agreement.
The Administration Agreement shall remain in effect for a period of two years
after the date of the Agreement and shall continue in effect for successive
periods of one year subject to review by the Trustees of the Trust.
The Administrator, a Delaware business trust, has its principal business
offices at 680 East Swedesford Road, Wayne, PA 19087-1658. SEI Financial
Management Corporation ("SFM"), a wholly-owned subsidiary of SEI Corporation
("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., FMB Funds, Inc., First American
Funds, Inc., First American Investment Funds, Inc., Marquis Funds(R), Monitor
Funds, Morgan Grenfell Investment Trust, The PBHG Funds, Inc., The Pillar
Funds, Rembrandt Funds(R), 1784 Funds(R), 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 Turner Funds.
THE SHAREHOLDER SERVICING AGENT
SEI Fund Resources acts as the transfer agent, dividend disbursing agent and
shareholder servicing agent for the Trust. Compensation for these services is
paid under the Administration Agreement. See "The Administrator."
THE DISTRIBUTOR
SEI Financial Services Company (the "Distributor"), a registered broker-dealer
that is a wholly-owned subsidiary of SEI, and the Trust are parties to a
distribution agreement (the "Distribution Agreement"). Each Portfolio may also
execute brokerage or other agency transactions through the Distributor for
which the Distributor receives compensation.
The Distribution Agreement appoints the Distributor as the exclusive
distributor of the Trust's shares and provides that the Trust's shares be sold
without a minimum sales quota. The Distribution Agreement is renewable annually
and may be
9
<PAGE>
10
terminated at any time by the Distributor, Trustees who are not "interested
persons" of the Trust as that term is defined in the Investment Company Act of
1940, as amended (the "1940 Act"), and who have no direct or indirect financial
interest in the operation of a Distribution Plan or in any agreements related
thereto ("Qualified Trustees") or by a majority vote of the outstanding
securities of the Trust upon not more than 60 days written notice by either
party.
No compensation is paid to the Distributor for distribution services.
TRUSTEES AND OFFICERS OF THE TRUST
The management and affairs of the Trust are supervised by the Trustees under
the laws governing business trusts in the Commonwealth of Massachusetts. The
Trustees have approved contracts under which, as described above, certain
companies provide essential services to the Trust. The Trustees and executive
officers of the Trust, their respective dates of birth and principal
occupations for the last five years are set forth below. Unless otherwise
indicated, the address of each Trustee and executive officer is 680 East
Swedesford Road, Wayne, Pennsylvania, 19087.
JAMES L. BRYAN* (7/13/38)--Trustee--777 E. Campbell Road, Suite 731,
Richardson, Texas 75081. President of Texins Credit Union, Richardson, Texas
(1974-present).
GARY L. JANACEK* (3/30/51)--Trustee--2401 S. 31st Street, Temple, Texas 76508.
President of Scott and White Employees Credit Union, Temple, Texas (1977-
present).
ARNO J. EASTERLY* (3/25/35)--Trustee--2701 Village Lane, Bossier City,
Louisiana 71112. President of Barksdale Federal Credit Union, Barksdale AFB,
Louisiana (1984-present).
DR. MARTHA ROMAYNE SEGER (2/17/21)--Trustee--4810 E. Scarlett Street, Tucson,
Arizona 85711. John M. Olin Distinguished Fellow in the Eller Center for the
Study of the Private Market Economy at The University of Arizona, Tucson (1991-
present). Former Governor of the Federal Reserve System in Washington, D.C.
(1984-91).
- --------
* Messrs Bryan, Janacek and Easterly are Trustees who may be deemed to be
"interested" persons of the Trust as the term is defined in the 1940 Act.
RICHARD HELBER (12/19/56)--Trustee--2800 Civic Center Drive, Southfield,
Michigan 48076. President of Central Corporate Credit Union, Southfield,
Michigan (1991-present).
DAVID G. LEE (4/16/52)--President, Chief Executive Officer--Senior Vice
President of the Administrator and the Distributor since 1993. Vice President
of the Administrator and Distributor 1991-1993. President, GW Sierra Trust
Funds prior to 1991.
STEPHEN G. MEYER (7/12/65)--Controller and Chief Financial Officer--CPA--1995
to Present; Director--Internal Audit and Risk Management--SEI Corporation--1992
to 1995; Coopers & Lybrand, Senior Associate--1990-1992.
RICHARD W. GRANT (10/25/45)--Secretary--2000 One Logan Square, Philadelphia,
Pennsylvania 19103, Partner of Morgan, Lewis & Bockius LLP (law firm) since
1989, Counsel to the Trust, SEI, the Administrator, and the Distributor.
FRANCIS C. LEE (12/3/48)--Vice President, Assistant Secretary--President and
CEO of Southwest Corporate Federal Credit Union since 1995. Senior Vice
President of Operations, Western Corporate Federal Credit Union--1981-1995.
KEVIN P. ROBINS (4/5/61)--Vice President, Assistant Secretary--Senior Vice
President, General Counsel and Secretary of SEI, the Administrator and the
Distributor and Assistant Secretary of SEI since 1994. Secretary of the
Administrator and the Distributor since 1994. Vice President and Assistant
Secretary of SEI, the Administrator and the Distributor 1992-1994. Associate,
Morgan, Lewis & Bockius LLP (law firm) prior to 1992.
SANDRA K. ORLOW (10/18/53)--Vice President, Assistant Secretary--Vice President
and Assistant Secretary of SEI, the Administrator and the Distributor since
1983.
KATHRYN L. STANTON (11/19/58)--Vice President, Assistant Secretary--Vice
President and Assistant Secretary of SEI, the Administrator and the Distributor
since 1994. Associate, Morgan, Lewis & Bockius LLP (law firm)--1989-1994.
TODD CIPPERMAN (2/14/66)--Vice President, Assistant Secretary--Vice President
and Assistant Secretary of SEI, the Administrator and the Distributor since
1995. Associate, Dewey Ballantine
<PAGE>
11
(law firm) 1994-1995. Associate, Winston & Strawn (law firm) 1991-1994.
JOSEPH M. LYDON (9/27/59)--Vice President, Assistant Secretary--Director of
Business Administration of the Administrator since 1995; Vice President of Fund
Group and Vice President of Dreman Value Management (investment adviser) and
President of Dreman Financial Services, Inc. prior to 1995.
BARBARA A. NUGENT 6/18/56)--Vice President, Assistant Secretary--Vice President
and Assistant Secretary of SEI, the Distributor and Administrator. Associate,
Drinker Biddle & Reath (law firm)--1994 -1996. Assistant Vice
President/Administration, Delaware Services Company, Inc.--1981-1994.
MARC H. CAHN (6/19/57)--Vice President, Assistant Secretary--Vice President and
Assistant Secretary of SEI, the Distributor and Administrator. Associate
General Counsel, Barclays Bank PLC--1995-1996. Counsel for First Fidelity
Bancorporation prior to 1995.
The Trustees and officers of the Trust own less than 1% of the outstanding
shares of the Trust. The Trust pays the fees for Trustees. Compensation of
officers of the Trust is paid by the Administrator.
The following table exhibits Trustee compensation for the fiscal year ended May
31, 1996.
<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION PENSION OR
FROM REGISTRANT RETIREMENT ESTIMATED TOTAL COMPENSATION FROM
FOR THE FISCAL BENEFITS ACCRUED ANNUAL REGISTRANT AND FUND COMPLEX
YEAR ENDED AS PART OF FUND BENEFITS UPON PAID TO TRUSTEES FOR THE
NAME OF PERSON MAY 31, 1996 EXPENSES RETIREMENT FISCAL YEAR ENDED MAY 31, 1996
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dr. M.R. Seger.......... $24,000 N/A N/A $24,000 for service on 1 board
- ------------------------------------------------------------------------------------------------------
J.L. Bryan.............. $ 4,000 N/A N/A $ 4,000 for service on 1 board
- ------------------------------------------------------------------------------------------------------
A.J. Easterly........... $ 4,000 N/A N/A $ 4,000 for service on 1 board
- ------------------------------------------------------------------------------------------------------
G.L. Janacek............ $ 4,000 N/A N/A $ 4,000 for service on 1 board
- ------------------------------------------------------------------------------------------------------
R. Helber............... $ 4,000 N/A N/A $ 4,000 for service on 1 board
- ------------------------------------------------------------------------------------------------------
R. Nesher*.............. $ 0 N/A N/A $ 0 for service on 1 board
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
</TABLE>
* Mr. Nesher resigned from the Board of Trustees effective September 7, 1995.
PURCHASE AND REDEMPTION OF SHARES
Purchases and redemptions of shares of either Portfolio may be made on a day on
which both the New York Stock Exchange (the "NYSE") and the Federal Reserve
wire system are open for business (a "Business Day") by placing orders with the
Distributor.
The minimum initial investment in either Portfolio of the Trust is $100,000.
There is no minimum for subsequent investments.
A purchase order will be effective as of the day received by the Distributor if
the Distributor receives the order before 4:00 p.m. Eastern time, and the
Custodian receives federal funds before 12:00 p.m. Eastern time on the next
Business Day. The purchase price of shares of a Portfolio is the net asset
value next determined after a purchase order is received by the Trust. The net
asset value per share of a Portfolio is determined by dividing the total market
value of a Portfolio's investments and other assets, less any liabilities, by
the total outstanding shares of the Portfolio. Net asset value per share is
determined as of the close of business of the NYSE (currently 4:00 p.m. Eastern
time), on any Business Day. See "Determination of Net Asset Value." Purchases
will be made in full and fractional shares of a Portfolio calculated to three
decimal places.
Shares may be offered only to residents of those states in which such shares
are eligible for purchase.
<PAGE>
12
Shareholders who desire to redeem shares of either Portfolio must place their
redemption orders prior to 4:00 p.m. Eastern time on any Business Day for the
order to be accepted on that Business Day. The redemption price of the shares
is the net asset value of the Portfolio next determined after receipt by the
Distributor of the redemption order. Payment on redemption will be made as
promptly as possible and, in any event, within seven days after the redemption
order is received, as required by the 1940 Act. It is currently the Trust's
policy to pay for redemptions in cash.
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 NYSE is restricted, or during the existence of an emergency (as determined
by the Securities and Exchange Commission (the "SEC") by rule or regulation) as
a result of which 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 a
Portfolio for any period during which the NYSE, the Adviser, the Administrator
and/or the Custodian are not open for business for any reason.
Purchase and redemption orders may be placed by telephone. The Trust, its
transfer agent or subagent will not be responsible for any loss, liability,
cost or expense for acting upon wire instructions or upon telephone
instructions that it reasonably believes to be genuine. The Trust, its transfer
agent and subagent may each employ reasonable procedures to confirm that
instructions communicated by telephone are genuine, including requiring a form
of personal identification prior to acting upon instructions received by
telephone and recording telephone instructions. The Trust, the Trust's transfer
agent or sub-agent may be liable for losses resulting from fraudulent or
unauthorized instructions if it does not employ these procedures. If market
conditions are extraordinarily active, or other extraordinary circumstances
exist, Shareholders who experience difficulties placing redemption orders by
telephone may wish to consider placing their redemption orders by other means.
DIVIDENDS
Substantially all of the net investment income (not including capital gains) of
each Portfolio is distributed in the form of monthly dividends to Shareholders.
Net investment income consists of accrued interest and any general income of
the Trust allocated to a Portfolio, less the estimated expenses of such
Portfolio and the general expenses of the Trust allocated to such Portfolio
during a particular period. Dividends are declared daily, just prior to a
determination of net asset value. If a purchase order is placed on the
preceding Business Day, shares begin earning dividends on the Business Day
federal funds payment is received by the Custodian. If a purchase order and
federal funds are received the same Business Day, shares begin earning
dividends on the next Business Day. Currently, capital gains of a Portfolio, if
any, will be distributed at least annually.
Shareholders automatically receive all income dividends and capital gain
distributions in additional shares at the net asset value next determined
unless the Shareholder has elected at the time of initial investment to take
such payments in cash. Shareholders may change their election by providing
written notice to the Administrator at least 15 days prior to the change.
Dividends and distributions of each Portfolio are paid on a per-share basis.
DETERMINATION OF NET ASSET VALUE
As described previously, the net asset value per share of each Portfolio is
calculated by adding the value of securities and other assets, subtracting
liabilities and dividing by the number of outstanding shares.
Pursuant to policies established by the Board of Trustees of the Trust, the
Administrator values the securities of each Portfolio based upon valuations
provided by an independent pricing service. 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 Board of Trustees. In addition, securities and other
assets for which market prices are either (i) not readily available, or (ii)
deemed by the Adviser to be materially inaccurate, are valued at fair value as
determined in good faith by the Adviser under procedures established by the
Board of Trustees.
<PAGE>
13
PERFORMANCE
From time to time, each Portfolio may advertise its yield and total return.
These figures will be based on historical earnings and are not intended to
indicate future performance. The 30-day yield of a Portfolio refers to the
annualized income generated by an investment in the Portfolio over a specified
30-day period. The 30-day yield is calculated by assuming that the income
generated by the investment during that period is generated over one year and
is shown as a percentage of the investment. See "Computation of Yield."
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 the Portfolio 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. See "Calculation of Total Return."
Each Portfolio's performance may from time to time be compared to other mutual
funds tracked by mutual fund rating services, to broad groups of comparable
mutual funds or to unmanaged indices which may assume reinvestment of dividends
but generally do not reflect deductions for administrative and management
costs. Indices that may be used are as follows: for the Short-Term Maturity
Portfolio--Lipper Short Term U.S. Government Index and 3 year Constant Maturity
Treasury Adjustable Rate ("CMT"); for the Adjustable Rate Portfolio--Lipper
Adjustable Rate Mortgage Index, 6 month London Interbank Offered Rate
("LIBOR"), 1 year CMT, Effective Fed Funds Rate and 30-day Donoghue Index.
COMPUTATION OF YIELD
The 30-day yield for a Portfolio is calculated by assuming that the income
generated by the Portfolio's investment during that 30-day period is generated
each period over one year and is shown as a percentage of the investment. In
particular, yield will be calculated according to the following formula: Yield
= 2[((a-b)/(cd)+1)/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.
For the 30-day period ended May 31, 1996, the end of the Trust's most recent
fiscal year, the yield for each Portfolio was: Short-Term Maturity Portfolio,
5.23% and Adjustable Rate Portfolio, 5.74%.
CALCULATION OF TOTAL RETURN
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 of a hypothetical $1,000 payment made at the beginning of the designated
time period as of the end of such period. For the fiscal period ended May 31,
1996 the total return for each Portfolio was: Short-Term Maturity Portfolio,
5.73% and Adjustable Rate Portfolio, 6.29%. For the period from June 15,1992
(commencement of operations) through May 31, 1996, the average annual total
return for each Portfolio was: Short-Term Maturity Portfolio, 4.37% and
Adjustable Rate Portfolio, 4.74%.
FEDERAL TAXES
The following discussion of federal income tax consequences is based on the
Internal Revenue Code of 1986, as amended (the "Code") and the regulations
issued thereunder as in effect on the date of this combined Prospectus and
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.
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.
Credit unions generally are exempt from federal income taxation on income,
dividends and capital gains realized as a result of purchasing, holding or
redeeming shares of the Trust. Shareholders are, however, urged (but not
required) to consult their tax advisors regarding specific questions as to
federal, state and local income taxes including, without limitation, issues
relating to unrelated business 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 Portfolio. Each Portfolio intends to
qualify for the special tax treatment afforded regulated investment companies
("RICs")
<PAGE>
14
under the Code, so that it will be relieved of federal income tax on that part
of its net investment income and net capital gains (the excess of long-term
capital gain over short-term capital loss) which is distributed to
Shareholders.
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. 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. Each Portfolio
will make annual reports to Shareholders of the federal income tax status of
all distributions.
In order to qualify for treatment as a RIC under the Code, each Portfolio must
distribute annually to its Shareholders at least the sum of 90% of its net
interest income excludable from gross income plus 90% of its investment company
taxable income (generally, net investment income plus net short-term capital
gain) 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, United
States 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 United States Government securities or the securities of other
RICs) of any one issuer or two or more issuers which the Portfolio controls and
which are engaged in the same, similar or related trades or businesses. The
Trust's Adviser may reimburse the Trust for certain costs incurred.
If for any taxable year a Portfolio does not qualify for the special tax
treatment afforded RICs, all of its taxable income will be subject to federal
income tax at corporate rates without any deduction for distributions to its
Shareholders.
Notwithstanding the distribution requirement described above, which only
requires a Portfolio to 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), a 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 prior to the end of
each calendar year to avoid liability for federal excise tax.
Dividends declared by a Portfolio in October, November or December of any year
and payable to Shareholders of record on a date in that month will be deemed to
have been paid by the Portfolio and received by the Shareholder on December 31
of that year, if paid by the Portfolio at any time during the immediately
succeeding January.
Sale, exchange or redemption of Portfolio shares is a taxable event to the
Shareholder.
STATE TAXES
Income received on direct U.S. obligations is exempt from tax at the state
level when received directly and may be exempt, depending on the state, when
received by a Shareholder from a Portfolio provided certain conditions are
satisfied. Interest received on repurchase agreements may not be exempt from
state taxation. Each Portfolio will inform Shareholders annually of the
percentage of income and distributions derived from direct U.S. obligations.
Shareholders should consult their tax advisors to determine whether any portion
of the income dividends received from a Portfolio is considered tax exempt in
their particular states.
Each Portfolio is not liable for any income or franchise tax in Massachusetts
if it qualifies as a RIC for federal income tax purposes. See "Federal Taxes."
<PAGE>
15
GENERAL INFORMATION
THE TRUST
The Declaration of Trust under which the Trust was organized permits the Trust
to offer separate portfolios of shares. All consideration received by the Trust
for shares of any portfolio and all assets of such portfolio belong only to
that portfolio and would be subject only to liabilities related thereto.
The Trust pays its expenses, including fees of its service providers, audit and
legal expenses, expenses of preparing prospectuses, proxy solicitation material
and reports to shareholders, costs of custodial services and registering the
shares under federal and state securities laws, pricing, insurance expenses,
litigation and other extraordinary expenses, brokerage costs, interest charges,
taxes and organization expenses.
For the Short-Term Maturity Portfolio, for the fiscal years ended May 31, 1996,
May 31, 1995 and May 31, 1994, (i) the fees paid to the Administrator and
Shareholder Servicing Agent (formerly SFM) by the Portfolio, were $38,327,
$40,076 and $25,773, respectively and (ii) the fees paid to the Adviser were
$108,870, $128,971 and $91,635, respectively, of which $78,682, $58,150 and
$46,444 were waived, respectively. For the Adjustable Rate Portfolio, for the
fiscal years ended May 31, 1996, May 31, 1995 and May 31, 1994, (i) the fees
paid to the Administrator and Shareholder Servicing Agent (formerly SFM) by the
Portfolio, were $175,673, $167,753 and $158,486, respectively and (ii) the fees
paid to the Adviser were $505,410, $544,498 and 563,497, respectively, of which
$221,873, $208,635 and $222,776 were waived, respectively.
DESCRIPTION OF SHARES
The Declaration of Trust authorizes the issuance of an unlimited number of
shares of a Portfolio, each of which represents an equal proportionate interest
in that Portfolio with each other share of the Portfolio. Shares are entitled
upon liquidation to a pro rata share in the net assets of the respective
Portfolio. Shareholders have no preemptive rights. The Declaration of Trust
provides that the Board of 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 (i) 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 (ii) 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 for his or her
own willful defaults and shall not be liable for any neglect or wrongdoing of
any officer, agent, employee, investment adviser, administrator, principal
underwriter or custodian. 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 duties.
INVESTMENT LIMITATIONS
The investment objective and the following investment limitations are
"fundamental policies" of each Portfolio. Fundamental policies cannot be
changed with respect to a Portfolio without the consent of the holders of a
majority of the Portfolio's outstanding shares. The term "majority of the
Portfolio's outstanding shares" means the vote of (i) 67% or more of the
Portfolio's shares present at a meeting, if more than 50% of the outstanding
shares of the Portfolio are present or represented by proxy, or (ii) more than
50% of the Portfolio's outstanding shares, whichever is less.
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16
Each Portfolio may not:
1. Purchase securities of any issuer (except securities issued or guaranteed as
to principal and interest by the U.S. Government, its agencies or
instrumentalities and repurchase agreements involving such securities) if as a
result of such purchase 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 more than 25% of the total assets
of the 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 securities issued or guaranteed by the
U.S. Government, its agencies or instrumentalities, or repurchase agreements
involving such securities; and further provided that the Adjustable Rate
Portfolio will invest at least 25% of the value of its total assets in
mortgage-backed securities which are not issued or guaranteed by the U.S.
Government as described in this Prospectus, except when investing for temporary
defensive purposes.
3. Borrow money except for temporary or emergency purposes and then only in an
amount not exceeding one-third of the value of its total assets, except that
each Portfolio may enter into reverse repurchase agreements. Any borrowing will
be done from a credit union, corporate credit union or bank (any borrowing over
5% will be from a bank) and, to the extent that such borrowing exceeds 5% of
the value of the Portfolio's assets, asset coverage of at least 300% is
required. In the event that such asset coverage shall at any time fall below
300%, the Portfolio shall, within three days thereafter or such longer period
as the SEC may prescribe by rules and regulations, reduce the amount of its
borrowings to such an extent that the asset coverage of such borrowings shall
be at least 300%. This borrowing provision is included solely to facilitate the
orderly sale of portfolio securities to accommodate heavy redemption requests
if they should occur and is not for investment purposes. All borrowings in
excess of 5% of a Portfolo's total assets will be repaid before the Portfolio
makes additional investments and any interest paid on such borrowings will
reduce income.
4. Make loans, except that (a) a Portfolio may purchase or hold debt
instruments in accordance with its investment objective and policies; and (b) a
Portfolio may enter into repurchase agreements.
5. Pledge, mortgage or hypothecate assets, except to secure temporary
borrowings permitted by paragraph (3) above in aggregate amounts not to exceed
10% of total assets taken at current value at the time of the incurrence of
such loan.
6. Purchase or sell real estate, real estate limited partnership interests,
futures contracts, commodities or commodities contracts, provided that this
limitation shall not prohibit the purchase of securities of issuers that may
invest in such obligations and debt securities secured by real estate or
interests therein.
7. Make short sales of securities, maintain a short position or purchase
securities on margin, except that the Trust may obtain short-term credits as
necessary for the clearance of security transactions.
8. Act as an underwriter of securities of other issuers except as it may be
deemed an underwriter in selling a Portfolio security.
9. Purchase securities of other investment companies except for money market
funds, CMOs and REMICs (defined below) and then only as permitted by the 1940
Act and the rules and regulations thereunder. Under these rules and
regulations, the Portfolios are prohibited from acquiring the securities of
other investment companies if, as a result of such acquisition, the Portfolios
own more than 3% of the total voting stock of the company; securities issued by
any one investment company represent more than 5% of the total assets of either
Portfolio; or securities (other than treasury stock) issued by all investment
companies represent more than 10% of the total assets of either Portfolio.
Investment companies typically incur fees that are separate from those fees
incurred directly by the Portfolio. A 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.
It is the position of the SEC's Staff that certain nongovernmental issuers of
collateralized mortgage obligations ("CMOs") and real estate mortgage
investment conduits ("REMICs") constitute investment companies pursuant to the
1940 Act and that investments in instruments issued by such entities are
subject to the limitations set forth above unless the issuers of such
instruments have received orders from the SEC exempting such instruments from
the definition of investment company.
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17
10. Issue senior securities (as defined in the 1940 Act) except in connection
with permitted borrowings as described above or as permitted by rule,
regulations or order of the SEC.
11. Purchase or retain securities of an issuer if, to the knowledge of the
Trust, an officer, Trustee, partner or director of the Trust or any investment
adviser of the Trust owns beneficially more than 1/2 of 1% of the shares or
securities of such issuer and all such officers, Trustees, partners and
directors owning more than 1/2 of 1% of such shares or securities together own
more than 5% of such shares or securities.
12. Invest in interests in oil, gas or other mineral exploration or development
programs or oil, gas or mineral leases.
13. Purchase securities of any company which has (with predecessors) a record
of less than three years' continuing operations, except (i) obligations issued
or guaranteed by the U.S. Government, its agencies or instrumentalities, or
(ii) municipal securities which are rated by at least two NRSROs, if, as a
result, more than 5% of the total assets (taken at fair market value) of the
Portfolio would be invested in such securities.
In addition,
14. CUFUND is not insured or insurable by the National Credit Union Share
Insurance Fund.
15. CUFUND is not supervised or examined by NCUA and is not subject to NCUA
oversight. It is the responsibility of each credit union investing in CUFUND to
evaluate the appropriateness of the investment and the suitable level of
concentration risk on their balance sheets.
16. Except for the initial shareholder, CUFUND investors are restricted to only
credit unions. CUFUND will refuse all offers of investment arising from other
non-credit union parties.
17. Each Portfolio of CUFUND will only invest in investments and engage in
transactions permitted for natural person federal credit unions under Sections
107(7), 107(8) and 107(15) of the FCUA and Part 703 of the NCUA Rules and
Regulations.
18. Any amendments, modifications or changes to these fundamental policies must
be approved by the NCUA before becoming effective.
NON-FUNDAMENTAL POLICIES
Non-fundamental policies can be changed without Shareholder approval.
Each Portfolio may not:
1. Invest in warrants.
2. Invest in illiquid securities in an amount exceeding, in the aggregate, 15%
of the Portfolio's assets. An illiquid security is a security which cannot be
disposed of promptly (within seven days) and in the usual course of business at
a price that approximates its carrying value by the Portfolio, and includes
repurchase agreements maturing in excess of seven days, time deposits with a
withdrawal penalty, non-negotiable instruments and instruments for which no
market exists.
3. Write or purchase puts, calls, options or combinations thereof.
4. Acquire more than 10% of the voting securities of any one issuer.
5. Invest in companies for the purpose of exercising control.
Credit unions that seek an independent certified accountant's opinion on their
financial statements in accordance with generally accepted accounting
principles ("GAAP") are required to account for investments in mutual funds
such as CUFUND at fair value each month. Credit unions that do not seek an
independent certified accountant's opinion in accordance with GAAP are required
to account for investments in mutual funds by the lower of cost or market each
month. This disclosure is intended to comply with the substance of an NCUA
requirement that the Adviser disclose the proper accounting treatment for
Shareholders investing in the Trust.
The foregoing percentages concerning the investment limitations and non-
fundamental policies of the Portfolios will apply at the time of the purchase
of a security and shall not be considered violated unless an excess occurs or
exists immediately after and as a result of a purchase of such security.
In addition to the investment restrictions discussed in fundamental policy
number 9, as long as each Portfolio's shares are registered for sale in the
state of California, the Adviser is required, pursuant to California
regulations, to waive its advisory fee on that portion of a Portfolio's assets
invested in other open-end investment companies.
VOTING RIGHTS
Each share of a Portfolio held entitles the Shareholder of record to one vote
on all matters
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18
voted on by the Shareholders of such Portfolio. Each Portfolio will vote
separately on matters relating solely to that Portfolio. As a Massachusetts
business trust, the Trust is not required to hold annual meetings of
Shareholders but approval will be sought for certain changes in the operation
of the Trust and for the election of Trustees under certain circumstances. In
addition, a Trustee may be removed by a majority vote of the remaining Trustees
or by a majority vote of 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. Voting by proxy is permitted.
REPORTING
The Trust will send to its shareholders annual and semi-annual reports; the
financial statements appearing in annual reports are audited by independent
public accountants. The Trust furnishes proxy statements and other reports to
Shareholders of record.
SHAREHOLDER INQUIRIES
Shareholder inquiries should be directed to the Adviser, 7920 Belt Line Road,
Suite 1100, Dallas, TX 75240.
PORTFOLIO TRANSACTIONS
The Adviser selects brokers or dealers to execute transactions for the purchase
or sale of portfolio securities on the basis of its judgment of their
professional capability to provide the service. The primary consideration is to
have brokers or dealers execute transactions at best price and execution. Best
price and execution refers to many factors, including the price paid or
received for a security, the transaction cost, the promptness and reliability
of execution, the confidentiality and placement accorded the order and other
factors affecting the overall benefit obtained by the account on the
transaction. The determination of what are reasonably competitive rates is
based upon the professional knowledge of the Adviser as to rates paid and
charged for similar transactions throughout the securities industry. In some
instances, the Trust may pay a minimal transaction cost when the transaction
presents no difficulty. Trades are generally made on a net basis where the
Trust either buys securities directly from the dealer or sells them to the
dealer. In these instances, there is no direct commission charged but there is
a spread (the difference between the buy and sell price) which is the
equivalent of a commission.
The money market securities in which the Portfolios invest are traded primarily
in the over-the-counter market. Longer term debt securities 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 securities are generally traded on a net basis and do not normally
involve either brokerage commissions or transfer taxes. The cost of executing
portfolio securities transactions of the Trust will primarily consist of dealer
spreads.
The Adviser may place a combined order for two or more accounts or Portfolios
engaged in the purchase or sale of the same security if, in its judgment, joint
execution is in the best interest of each participant and will result in best
price and execution. Transactions involving commingled orders are allocated in
a manner deemed equitable to each account or Portfolio. It is believed that the
ability of the accounts to participate in volume transactions will generally be
beneficial to the accounts and Portfolios. Although it is recognized that, in
some cases, the joint execution of orders could adversely affect the price or
volume of the security that a particular account or trust may obtain, it is the
opinion of the Adviser and the Board of Trustees that the advantages of
combined orders outweigh the possible disadvantages.
Consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc., and subject to seeking best price and execution, the
Adviser may place orders with broker/dealers which have agreed to defray
certain Trust expenses such as custodian fees.
It is expected that the Adviser may execute brokerage or other agency
transactions through the Distributor, a registered broker-dealer, or an
affiliate of the Adviser in conformity with the 1940
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19
Act, the Securities Exchange Act of 1934, as amended, and rules promulgated by
the SEC. Under these provisions, the Distributor or an affiliate of the Adviser
is permitted to receive and retain compensation for effecting portfolio
transactions for the Trust on an exchange if a written contract is in effect
between the Distributor or an affiliate of the Adviser and the Trust expressly
permitting the Distributor or an affiliate of the Adviser to receive and retain
such compensation. These rules further require that commissions paid to the
Distributor or an affiliate of the Adviser by the Trust for exchange
transactions not exceed "usual and customary" brokerage commissions. The rules
define "usual and customary" commissions to include amounts which are
"reasonable and fair compared to the commission, fee or other remuneration
received or to be received by other brokers in connection with comparable
transactions involving similar securities being purchased or sold on a
securities exchange during a comparable period of time." In addition, the Trust
may direct business to one or more designated broker/dealers in connection with
such broker/dealer's provision of services to the Trust or payment of certain
Trust expenses (e.g., custody, pricing and professional fees). The Trustees,
including those who are not "interested persons" of the Trust, have adopted
procedures for evaluating the reasonableness of compensation paid to the
Distributor or an affiliate of the Adviser and will review these procedures
periodically.
The Trust is required to identify any securities of its "regular broker or
dealers" (as such term is defined in the Investment Company Act) which the
Trust has acquired during its most recent fiscal year. As of May 31, 1996, the
Short-Term Maturity Portfolio held debt securities issued by CS First Boston
and Prudential Securities in the amount of $74,000 and $5,485,000,
respectively, and the Adjustable Rate Portfolio held debt securities issued by
Merrill Lynch and Prudential Securities in the amount of $14,351,000 and
$5,488,000, respectively.
5% SHAREHOLDERS
As of September 5, 1996, the following persons were the only persons who were
record owners (or to the knowledge of the Trust, beneficial owners) of 5% or
more of the shares of the Portfolios. The Trust believes that most of the
shares referred to below were owned by the indicated entities both of record
and beneficially.
ADJUSTABLE RATE PORTFOLIO
Southwest Corporate FCU
c/o Melissa Wardell
7920 Belt Line Road, Suite 1100
Dallas TX 75240, 88.70%
SHORT-TERM MATURITY PORTFOLIO
Southwest Corporate FCU
c/o Melissa Wardell
7920 Belt Line Road, Suite 1100
Dallas TX 75240, 77.75%
Dyess Federal Credit Union
Attn: Wilson R. Little
P.O. Box 631
Abilene, TX 79604, 9.64%
Carter Federal Credit Union
c/o Sherrel Matlock
P.O. Box 814
Springhill, LA 71075, 6.41%
As of September 2, 1996 Southwest Corporate FCU, 7920 Belt Line Road, Suite
1100, Dallas, TX 75240, which is the Adviser, owned of record 88.70% and 77.75%
of the outstanding voting securities of the Adjustable Rate Portfolio and the
Short-Term Maturity Portfolio, respectively. Southwest Corporate FCU has voting
or investment power with respect to such voting securities. Consequently, under
the 1940 Act, Southwest Corporate FCU may be deemed to be a controlling person
of the Adjustable Rate Portfolio and Short-Term Maturity Portfolio. To the best
of the knowledge of the Trust, Southwest Corporate FCU's ownership of such
voting securities is for investment only, not for purposes of control, but may
materially affect the voting rights of other Shareholders.
COUNSEL AND INDEPENDENT ACCOUNTANTS
Morgan, Lewis & Bockius LLP, Washington D.C. and Philadelphia, Pennsylvania,
serves as counsel to the Trust. Arthur Andersen LLP, Philadelphia,
Pennsylvania, 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 of the Trust. The Custodian holds cash,
securities and other assets of the Trust as required by the 1940 Act.
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20
DESCRIPTION OF PERMITTED INVESTMENTS AND RISK FACTORS
The following is a description of the permitted investments for the Portfolios:
BANKERS' ACCEPTANCE--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; SHARE CERTIFICATES-- Certificates of deposit are
interest bearing instruments with a specific maturity. They are issued by banks
and savings and loan associations in exchange for the deposit of funds and
normally can be traded in the secondary market prior to maturity. Each
Portfolio may also purchase share certificates issued by certain credit unions
which cannot be traded in a secondary market. Such share certificates are
considered to be illiquid securities and neither Portfolio may invest more than
15% of its total assets in illiquid securities. See "Non-Fundamental Policies."
FEDERAL FUNDS--Federal funds are funds held by a regional Federal Reserve Bank
for the account of a bank that is a member of such Federal Reserve Bank. A loan
of federal funds is an unsecured loan at a negotiated interest rate for a
negotiated time period, generally overnight. Unsecured loans of federal funds
may be made to U.S. banks and other Section 107(8) institutions, provided that:
1) the accounts of such banks are federally insured; 2) the interest received
is at the market rate for federal funds transactions; and 3) the transaction
has a specified maturity or the Portfolio is able to require repayment at any
time. Federal funds investments maturing in more than seven days are considered
to be illiquid; a Portfolio will not invest more than 15% of its total assets
in illiquid securities. See "General Information--Non-Fundamental Policies."
Loans of federal funds are not federally insured. In the event the borrower of
federal funds enters into a bankruptcy or other insolvency proceedings, the
lending Portfolio could experience delays and incur expenses in recovering
cash. Further, the possibility exists that, in such an instance, the borrowing
institution may not be able to repay the borrowed funds. A Portfolio will limit
federal funds lending to those banks and other Section 107(8) institutions
whose creditworthiness has been reviewed and found satisfactory by the Adviser.
MORTGAGE-BACKED SECURITIES--Mortgage-backed securities are instruments that
entitle the holder to a share of all interest and principal payments from
mortgages underlying the security. The mortgages backing these securities
include conventional fixed rate mortgages, graduated payment mortgages, and
adjustable rate mortgages. During periods of declining interest rates,
prepayment of mortgages underlying mortgage-backed securities can be expected
to accelerate. Prepayment of mortgages which underlie securities purchased at a
premium often results in capital losses, while prepayment of mortgages
purchased at a discount often results in capital gains. Because of these
unpredictable prepayment characteristics, it is often not possible to predict
accurately the average life or realized yield of a particular issue.
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.
Private Pass-Through Securities: These are mortgage-backed securities
issued by a non-governmental entity, such as a trust. These securities
include collateralized mortgage obligations ("CMOs") and real estate
mortgage investment conduits ("REMICs") that are rated in one of the top
two
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21
rating categories. While they are generally structured with one or more
types of credit enhancement, private pass-through securities typically lack
a guarantee by an entity having the credit status of a governmental agency
or instrumentality.
Collateralized Mortgage Obligations: CMOs are debt obligations or
multiclass pass-through certificates issued by agencies or
instrumentalities of the U.S. Government or by private originators or
investors in mortgage loans. In a CMO, series of bonds or certificates are
usually issued in multiple classes. Principal and interest paid on the
underlying mortgage assets may be allocated among the several classes of a
series of a CMO in a variety of ways. Each class of a CMO, 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 than their stated maturities or final distribution dates, resulting
in a loss of all or part of any premium paid. One or more classes of CMOs
may have coupon rates that reset periodically based on an index, such as
the London Interbank Offered Rate ("LIBOR"). The Trust may purchase fixed,
adjustable or "floating" rate CMOs: (i) that are collateralized by fixed
rate or adjustable rate mortgages that are guaranteed as to payment of
principal and interest by an agency or instrumentality of the U.S.
Government; (ii) that are directly guaranteed as to payment of principal
and interest by the issuer, which guarantee is collateralized by U.S.
Government securities; (iii) that are collateralized by privately issued
fixed rate or adjustable rate mortgages adhering to sufficient credit
enhancements to achieve the highest rating by a nationally recognized
rating agency; (iv) whose price is estimated to change not more than 17
percent, due to an immediate and sustained parallel shift in the yield
curve of plus or minus 300 basis points; (v) whose expected average life is
not greater than 10 years; whose average life would not extend by more than
4 years, assuming an immediate and sustained parallel shift in the yield
curve of plus 300 basis points; and (vi) whose average life would not
shorten by more than 6 years, assuming an immediate and sustained parallel
shift in the yield curve of minus 300 basis points. The expected average
life test and the two average life sensitivity tests, which are set forth
in the final three clauses of the immediately preceding sentence hereof, do
not apply to a floating or adjustable rate CMO that has all of the
following characteristics at the time of purchase or on a subsequent date:
the interest rate of the instrument resets at least annually; the interest
rate of the instrument, at the time of purchase or at a subsequent testing
date, is below the contractual cap of the instrument; the index upon which
the interest rate is based is a conventional, widely-used market interest
rate such as LIBOR; and the interest rate of the instrument varies directly
(not inversely) with the index upon which it is based and is not reset as a
multiple of the change in the related index.
REMICs: A REMIC is a CMO that qualifies for special tax treatment under
the Code and invests in certain mortgages principally secured by interests
in real property. Investors may purchase beneficial interests in REMICs,
which are known as "regular" interests, or "residual" interests. The
Portfolios will invest in residual REMICs for hedging purposes only,
pursuant to Section 703.5(i) of the NCUA Rules. Guaranteed REMIC pass-
through certificates ("REMIC Certificates") issued by FNMA, FHLMC or GNMA
represent beneficial ownership interests in a REMIC trust consisting
principally of mortgage loans or FNMA, FHLMC or GNMA-guaranteed mortgage
pass-through certificates. For FHLMC REMIC Certificates, FHLMC guarantees
the timely payment of interest, and also guarantees the payment of
principal as payments are required to be made on the underlying mortgage
participation certificates. FNMA REMIC Certificates are issued and
guaranteed as to timely distribution of principal and interest by FNMA.
Parallel Pay Securities; PAC Bonds: Parallel pay CMOs and REMICS are
structured to provide payments of principal on each payment date to more
than one class. These simultaneous payments are taken into account in
calculating the stated maturity date or final distribution date of each
class, which must be retired by its stated maturity date or final
distribution date, but may be retired earlier. Planned Amortization Class
CMOs ("PAC Bonds") generally require payments of a specified amount of
principal on each
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22
payment date. PAC Bonds are always parallel pay CMOs with the required
principal payment on such securities having the highest priority after
interest has been paid to all classes.
Stripped Mortgage-Backed Securities ("SMBs"): SMBs are usually structured
with two classes that receive specified proportions of the monthly interest
and principal payments from a pool of mortgage securities. One class may
receive all of the interest payments and is thus termed an interest-only
class ("IO"), while the other class may receive all of the principal
payments and is thus termed the principal-only class ("PO"). The value of
IOs tends to increase as rates rise and decrease as rates fall; the
opposite is true of POs. SMBs are extremely sensitive to changes in
interest rates because of the impact thereon of prepayment of principal on
the underlying mortgage securities. The market for SMBs is not as fully
developed as other markets; SMBs therefore may be illiquid. The Portfolios
will invest in SMBs for hedging purposes only, pursuant to Section 703.5(i)
of the NCUA Rules.
Risk Factors: 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.
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, although they are not considered to be loans under Section 107 of the
FCUA, which generally limits federal credit unions to making loans only to
members.
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 a Portfolio under the
1940 Act, and would also be considered to be borrowings under Section 107 of
the FCUA.
TIME DEPOSITS--Time deposits are non-negotiable receipts issued by a bank in
exchange for a deposit of funds. Like certificates of deposit, they earn a
specified rate of interest over a definite period of time; however, they cannot
be traded in the secondary market. Time deposits are considered to be illiquid
securities.
UNITED STATES GOVERNMENT AGENCIES--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, FHLMC, the Federal Land Banks and the U.S. Postal
Service. Some of these securities are supported by the full faith and credit of
the U.S. Treasury (e.g., GNMA securities), others are supported by the right of
the issuer to borrow from the Treasury (e.g., Federal Farm Credit Bank), while
still others are supported only by the credit of the instrumentality (e.g.,
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
<PAGE>
23
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 a Portfolio's shares.
UNITED STATES TREASURY OBLIGATIONS--U.S. Treasury obligations consist of bills,
notes and bonds issued by the U.S. Treasury and separately traded interest and
principal component parts of such obligations that are transferable through the
federal book-entry system known as Separately Traded Registered Interest and
Principal Securities ("STRIPS").
VARIABLE AND FLOATING RATE INSTRUMENTS--Certain obligations purchased by each
Portfolio 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 such as the Federal Reserve Composite Index. 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--The Portfolios may individually
purchase or sell portfolio securities in when-issued or delayed delivery
transactions. 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. Each Portfolio 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 Portfolio 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. Although a
Portfolio generally purchases securities on a when-issued or forward commitment
basis with the intention of actually acquiring securities for its portfolio, a
Portfolio may dispose of a when-issued security or forward commitment prior to
settlement if it deems appropriate.
EXPERTS
The Financial Statements in this Prospectus and Statement of Additional
Information have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in
giving said report.
FINANCIAL STATEMENTS
The following are the audited Financial Statements for the fiscal period ended
May 31, 1996, and the Report of Independent Public Accountants of Arthur
Andersen LLP dated July 3, 1996 relating to the Financial Statements and
Financial Highlights for the Portfolios.
<PAGE>
STATEMENT OF NET ASSETS CUFUND
May 31, 1996
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) ADJUSTABLE RATE PORTFOLIO (000)
- --------------------------------------------------------------------------------
<C> <S> <C>
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS (45.2%)
FHLMC
$ 2,649 Class #1512-M, 5.425%, 05/15/08 (A) CMO..................... $ 2,557
7,282 Class #1611-G, 5.938%, 05/15/21 (A) CMO..................... 7,309
8,278 Class #1546-FC, 5.938%, 12/15/21 (A) CMO.................... 8,316
9,857 Class #1671-J, 5.963%, 12/15/22 (A) CMO..................... 9,868
4,322 Pool #97003, 7.286%, 01/01/23 (A) (B)....................... 4,387
7,904 Pool #970021, 7.417%, 01/01/23 (A) (B)...................... 8,022
FNMA
6,008 Class #94-12 PB, 5.000%, 11/25/00 CMO....................... 5,979
1,292 Class #92-28F, 5.938%, 05/25/07 (A) CMO..................... 1,297
16,500 Class #92-112 FC, 6.138%, 06/25/18 (A) CMO.................. 16,684
872 Pool #165655, 7.555%, 05/01/22 (A) (B)...................... 890
763 Pool #169164, 7.935%, 06/01/22 (A) (B)...................... 771
3,401 Pool #166291, 7.414%, 06/01/22 (A) (B)...................... 3,454
- --------------------------------------------------------------------------------
Total U.S. Agency Mortgage-Backed Obligations (Cost $69,488)
............................................................ 69,534
- --------------------------------------------------------------------------------
NON-AGENCY MORTGAGE-BACKED OBLIGATIONS (45.2%)
Capstead Securities IV
2,768 Class #92-9 A, 6.560%, 07/25/22 (A) (B)..................... 2,747
Citicorp Mortgage Securities
650 Class #92-9 A4, 6.288%, 04/25/21 (A) CMO.................... 651
DLJ Mortgage Acceptance
3,756 Class #94-Q1 1A1, 7.190%, 03/25/24 (A) (B).................. 3,754
Fund America Investors II
2,067 Class #93-J M, 7.970%, 12/25/23 (A) (B)..................... 2,083
Merrill Lynch Mortgage Investments
7,400 Class #91-F A2, 6.340%, 06/15/16 (A) (B).................... 7,351
7,000 Class #92-C A2, 6.288%, 06/15/17 (A) (B).................... 7,000
Prudential Home Mortgage Securities
5,477 Class #93-5 A7, 6.138%, 03/25/00(A) CMO..................... 5,488
Residential Funding Mortgage Securities I
100 Class #92-S33 A4, 6.288%, 09/25/19 (A) CMO.................. 100
Resolution Trust
2,163 Class #92-M4 A4, 6.238%, 09/25/21 (A) CMO................... 2,153
4,794 Class #92-16 A4, 7.794%, 08/25/22 CMO....................... 4,854
1,946 Class #92-6 B9, 6.388%, 11/25/26 (A) CMO.................... 1,934
1,770 Class #92-3 A4, 5.988%, 09/25/30 (A) CMO.................... 1,772
Ryland Mortgage Securities
1,980 Class #92-L6 A2, 7.500%, 05/25/22 (A) (B)................... 2,027
1,920 Class #92-L9 A2, 7.720%, 07/25/22 (A) (B)................... 1,929
5,000 Class #92-L9 A1B, 7.780%, 07/25/22 (A) (B).................. 5,031
Salomon Brothers Mortgage Securities VII
3,382 Class #92-2 A4, 7.180%, 06/25/22 (A) (B).................... 3,393
</TABLE>
FS-1
<PAGE>
STATEMENT OF NET ASSETS CUFUND
May 31, 1996
<TABLE>
<CAPTION>
Face Market
Amount Value
(000)/Shares ADJUSTABLE RATE PORTFOLIO (concluded) (000)
- ---------------------------------------------------------------------------------
<C> <S> <C>
$ 2,206 Class #92-4 A5, 7.450%, 09/25/22 (A) (B)............... $ 2,230
3,461 Class #92-6 A1, 7.370%, 11/25/22 (A) (B)............... 3,499
Saxon Mortgage Securities
546 Class #92-1 A2, 7.740%, 09/25/22 (A) (B)............... 549
1,925 Class #92-3 A1, 7.270%, 11/25/22 (A) (B)............... 1,939
3,773 Class #93-1 A, 7.820%, 02/25/23 (A) (B)................ 3,794
Sears Mortgage Securities
1,557 Class #93-3 F, 6.388%, 07/25/20 (A) CMO................ 1,560
Securitized Assets Sales
3,626 Class #93-8 A2, 7.680%, 12/26/23 (A) CMO............... 3,680
- ---------------------------------------------------------------------------------
Total Non-Agency Mortgage-Backed Obligations (Cost
$69,719)............................................... 69,518
- ---------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (8.8%)
FHLMC Discount Notes
6,900 5.220%*, 06/04/96...................................... 6,896
1,250 5.250%*, 06/07/96...................................... 1,249
2,695 5.230%*, 06/12/96...................................... 2,690
FNMA Discount Notes
700 5.180%*, 06/17/96...................................... 698
2,000 5.180%*, 06/17/96...................................... 1,995
- ---------------------------------------------------------------------------------
Total U.S. Government Agency Obligations (Cost $13,530)
....................................................... 13,528
- ---------------------------------------------------------------------------------
CASH EQUIVALENT (0.3%)
376 SEI Liquid Asset Trust Treasury Portfolio.............. 376
- ---------------------------------------------------------------------------------
Total Cash Equivalent (Cost $376)...................... 376
- ---------------------------------------------------------------------------------
TOTAL INVESTMENTS (99.5%) (COST $153,113).............. 152,956
- ---------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (0.5%)
- ---------------------------------------------------------------------------------
Total Other Assets and Liabilities, Net................ 804
- ---------------------------------------------------------------------------------
NET ASSETS:
Portfolio shares (unlimited authorization--no par
value) based on 15,430,968 outstanding shares of
beneficial interest................................... 154,614
Distributions in Excess of Net Investment Income....... (23)
Accumulated Net Realized Loss on Investments........... (674)
Net Unrealized Depreciation of Investments............. (157)
- ---------------------------------------------------------------------------------
TOTAL NET ASSETS (100.0%).............................. $153,760
- ---------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE
PER SHARE.............................................. $9.96
- ---------------------------------------------------------------------------------
</TABLE>
* Effective Yield
(A) Adjustable Rate Features. Rate shown on the Statement of Net Assets is the
rate in effect on May 31, 1996.
(B) Pass-Through Security
CMO--Collateralized Mortgage Obligation
FHLMC--Federal Home Loan Mortgage Corporation
FNMA--Federal National Mortgage Association
The accompanying notes are an integral part of these financial statements.
FS-2
<PAGE>
STATEMENT OF NET ASSETS CUFUND
May 31, 1996
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) SHORT-TERM MATURITY PORTFOLIO (000)
- --------------------------------------------------------------------------------
<C> <S> <C>
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS (52.8%)
FHLMC
$ 315 Class #1275 VK, 7.000%, 01/15/97 CMO........................... $ 316
399 Class #1640-F, 5.838%, 10/15/07 (A) CMO........................ 399
2,500 Class #1714 B, 5.250%, 05/15/09 CMO............................ 2,490
1,000 Class #1611 C, 5.000%, 03/15/13 CMO............................ 988
1,234 Class #1543 TC, 5.400%, 06/15/13 CMO........................... 1,229
1,000 Class #1611 D, 5.250%, 01/15/16 CMO............................ 973
1,000 Class #1671 D, 5.750%, 11/15/16 CMO............................ 979
1,000 Class #1650 D, 5.400%, 04/15/24 CMO............................ 974
FNMA
226 Class #92-131 GA, 7.000%, 05/25/97 CMO......................... 227
298 Class #93-11C, 5.750%, 04/25/02 CMO............................ 296
2,000 Class #92-155 E, 6.700%, 08/25/04 CMO.......................... 1,978
99 Class #93-99 PB, 4.500%, 06/25/08 CMO.......................... 99
536 Class #G 93-9 C, 5.500%, 03/25/10 CMO.......................... 534
1,000 Class #93-207 B, 4.850%, 06/25/10 CMO.......................... 985
909 Class #93-20 C, 5.700%, 08/25/12 CMO........................... 903
728 Class #92-132 PE, 7.250%, 07/25/15 CMO......................... 731
1,000 Class #93-203 PD, 5.250%, 08/25/15 CMO......................... 973
129 Class #92-28 A, 6.250%, 12/25/16 CMO........................... 129
1,000 Class #94-76-C, 5.000%, 12/25/17 CMO........................... 976
- --------------------------------------------------------------------------------
Total U.S. Agency Mortgage-Backed Obligations (Cost $16,373)... 16,179
- --------------------------------------------------------------------------------
NON-AGENCY MORTGAGE-BACKED OBLIGATIONS (34.5%)
Countrywide Mortgage Backed Securities
626 Class #94-D A1, 5.938%, 03/25/24 (A) CMO....................... 617
First Boston Mortgage Securities
74 Class #93-5 A13, 7.300%, 10/25/97 CMO.......................... 74
General Electric Mortgage Services
1,472 Class #94-7 A4, 5.500%, 02/25/09 CMO........................... 1,451
Housing Securities
256 Class #94-1 A4, 5.500%, 07/25/02 CMO........................... 255
Prudential Home Mortgage Securities
1,102 Class #93-43 A1, 5.400%, 10/25/23 CMO.......................... 1,075
1,500 Class #93-57 A2, 5.500%, 12/25/23 CMO.......................... 1,483
3,000 Class #93-54 A21, 5.500%, 01/25/24 CMO......................... 2,927
Residential Funding Mortgage Securities I
225 Class #92-S30 A5, 7.000%, 04/25/97 CMO......................... 224
1,093 Class #93-S40 A1, 5.838%, 11/25/23 (A) CMO..................... 1,078
</TABLE>
FS-3
<PAGE>
STATEMENT OF NET ASSETS CUFUND
May 31, 1996
<TABLE>
<CAPTION>
Face Market
Amount Value
(000)/Shares SHORT-TERM MATURITY PORTFOLIO (concluded) (000)
- ---------------------------------------------------------------------------------
<C> <S> <C>
$1,157 Class #93-S45 A3, 6.750%, 12/25/23 CMO.................. $ 1,153
228 Class #94-S1 A1, 4.750%, 01/25/24 CMO................... 226
- ---------------------------------------------------------------------------------
Total Non-Agency Mortgage-Backed Obligations (Cost
$10,726)............................................... 10,563
- ---------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (2.5%)
Federal Farm Credit Bank Discount Note
775 5.260%*, 06/05/96....................................... 774
- ---------------------------------------------------------------------------------
Total U.S. Government Agency Obligations (Cost $775).... 774
- ---------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS (5.4%)
U.S. Treasury Notes
1,000 5.125%, 02/28/98........................................ 982
700 5.000%, 02/15/99........................................ 676
- ---------------------------------------------------------------------------------
Total U.S. Treasury Obligations (Cost $1,676)........... 1,658
- ---------------------------------------------------------------------------------
CASH EQUIVALENTS (4.5%)
799 SEI Liquid Asset Trust Government Portfolio............. 799
585 SEI Liquid Asset Trust Treasury Portfolio............... 585
- ---------------------------------------------------------------------------------
Total Cash Equivalents (Cost $1,384).................... 1,384
- ---------------------------------------------------------------------------------
TOTAL INVESTMENTS (99.7%) (COST $30,934)................ 30,558
- ---------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (0.3%)
- ---------------------------------------------------------------------------------
Total Other Assets and Liabilities, Net................. 75
- ---------------------------------------------------------------------------------
NET ASSETS:
Portfolio shares (unlimited authorization--no par value)
based on 3,139,592 outstanding shares of beneficial
interest............................................... 31,761
Accumulated Net Realized Loss on Investments............ (752)
Net Unrealized Depreciation of Investments.............. (376)
- ---------------------------------------------------------------------------------
TOTAL NET ASSETS (100.0%)............................... $30,633
- ---------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER
SHARE.................................................. $9.76
- ---------------------------------------------------------------------------------
</TABLE>
* Effective Yield
(A) Adjustable Rate Features. Rate shown on the Statement of Net Assets is the
rate in effect on May 31, 1996.
CMO--Collateralized Mortgage Obligation
FHLMC--Federal Home Loan Mortgage Corporation
FNMA--Federal National Mortgage Association
The accompanying notes are an integral part of these financial statements.
FS-4
<PAGE>
STATEMENT OF OPERATIONS CUFUND
For the Year ended 05/31/96
<TABLE>
<CAPTION>
(IN THOUSANDS)
-----------------------------------
ADJUSTABLE RATE SHORT-TERM MATURITY
PORTFOLIO PORTFOLIO
- -------------------------------------------------------------------------------
<S> <C> <C>
Investment Income......................... $9,944 $1,920
- -------------------------------------------------------------------------------
Expenses:
Investment Advisory Fees................. 505 109
Waiver of Investment Advisory Fees....... (222) (78)
Administrator Fees....................... 176 38
Custodian Fees........................... 14 4
Professional Fees........................ 60 19
Registration Fees........................ 8 2
Insurance Fees........................... 1 --
Trustee Fees............................. 38 11
Printing Fees............................ 13 7
Amortization of Deferred Organizational
Costs................................... 11 11
Other.................................... 10 5
- -------------------------------------------------------------------------------
Total Expenses.......................... 614 128
- -------------------------------------------------------------------------------
Net Investment Income..................... 9,330 1,792
- -------------------------------------------------------------------------------
Net Realized Loss on Investments........ (21) (32)
- -------------------------------------------------------------------------------
Net Unrealized Appreciation on Invest-
ments.................................. 472 150
- -------------------------------------------------------------------------------
Net Realized and Unrealized Gain on
Investments.............................. 451 118
- -------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Operations............................... $9,781 $1,910
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
FS-5
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS CUFUND
<TABLE>
<CAPTION>
(IN THOUSANDS)
-------------------------------------------
ADJUSTABLE RATE SHORT-TERM MATURITY
PORTFOLIO PORTFOLIO
--------------------- ---------------------
6/1/95 6/1/94 6/1/95 6/1/94
TO 5/31/96 TO 5/31/95 TO 5/31/96 TO 5/31/95
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Activities:
Net Investment Income............ $ 9,330 $ 9,086 $ 1,792 $ 2,114
Net Realized Loss on Investments. (21) (638) (32) (599)
Net Unrealized Appreciation on
Investments..................... 472 78 150 999
- -------------------------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations........ 9,781 8,526 1,910 2,514
- -------------------------------------------------------------------------------
Distributions to Shareholders:
Net Investment Income............ (9,334) (9,024) (1,790) (2,115)
- -------------------------------------------------------------------------------
Capital Share Transactions:
Proceeds from Shares Issued...... 5,000 5,700 600 8,200
Shares Issued in Lieu of Cash
Distributions................... 662 1,004 151 579
Cost of Shares Redeemed.......... (14,496) (27,545) (5,288) (15,865)
- -------------------------------------------------------------------------------
Decrease in Net Assets from
Capital Share Transactions....... (8,834) (20,841) (4,537) (7,086)
- -------------------------------------------------------------------------------
Total Decrease in Net Assets.... (8,387) (21,339) (4,417) (6,687)
- -------------------------------------------------------------------------------
Net Assets:
Beginning of Period.............. 162,147 183,486 35,050 41,737
- -------------------------------------------------------------------------------
End of Period (1)................ $153,760 $162,147 $30,633 $35,050
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Capital Share Transactions:
Shares Issued.................... 502 574 62 855
Shares Issued in Lieu of Cash
Distributions................... 66 101 15 61
Shares Redeemed.................. (1,451) (2,782) (541) (1,663)
- -------------------------------------------------------------------------------
Net Capital Share Transactions.... (883) (2,107) (464) (747)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) Including distributions in excess of net investment income (000) of $(23)
and $(19) for Adjustable Rate Portfolio, $(0) and $(2) for Short-Term
Maturity Portfolio at May 31, 1996 and May 31, 1995, respectively.
The accompanying notes are an integral part of the financial statements.
FS-6
<PAGE>
FINANCIAL HIGHLIGHTS CUFUND
FOR THE PERIODS ENDED MAY 31,
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
Net Ratio of
Net Realized and Net Net Ratio of Net Expenses
Asset Unrealized Dividends Asset Assets Ratio of Investment to Average
Value Net Gains from Net Capital Value End of Expenses Income Net Assets
Beginning Investment (Losses) on Investment Gains End of Total Period to Average to Average (Excluding
of Period Income Investments Income Distributions Period Return (000) Net Assets Net Assets Waivers)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Adjustable Rate Portfolio
1996 $ 9.94 0.59 0.02 (0.59) -- $ 9.96 6.29% $153,760 0.39% 5.92% 0.53%
1995 $ 9.96 0.53 (0.02) (0.53) -- $ 9.94 5.25% $162,147 0.38% 5.34% 0.51%
1994 $10.02 0.37 (0.06) (0.37) -- $ 9.96 3.19% $183,486 0.38% 3.70% 0.51%
1993
(1) $10.00 0.38 0.02 (0.38) -- $10.02 4.22% $172,593 0.39% 3.94% 0.55%
Short-Term Maturity Portfolio
1996 $ 9.73 0.52 0.03 (0.52) -- $ 9.76 5.73% $ 30,633 0.38% 5.27% 0.61%
1995 $ 9.59 0.50 0.14 (0.50) -- $ 9.73 6.92% $ 35,050 0.38% 5.24% 0.51%
1994 $10.00 0.41 (0.38) (0.41) (0.03) $ 9.59 0.23% $ 41,737 0.38% 4.23% 0.55%
1993
(1) $10.00 0.44 0.01 (0.45) -- $10.00 4.77% $ 20,288 0.39% 4.69% 0.64%
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Ratio of Net
Investment
Income
to Average
Net Assets Portfolio
(Excluding Turnover
Waivers) Rate
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Adjustable Rate Portfolio
1996 5.78% 23%
1995 5.21% 4%
1994 3.57% 67%
1993
(1) 3.78% 71%
Short-Term Maturity Portfolio
1996 5.04% 42%
1995 5.11% 53%
1994 4.06% 148%
1993
(1) 4.44% 188%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) The Adjustable Rate Portfolio and Short-Term Maturity Portfolio commenced
operations on June 15, 1992. Ratios and total returns for this period have
been annualized.
The accompanying notes are an integral part of the financial statements.
FS-7
<PAGE>
NOTES TO FINANCIAL STATEMENTS CUFUND
May 31, 1996
1. Organization:
CUFUND (the "Trust") was organized as a Massachusetts business trust under a
Declaration of Trust dated November 22, 1991 and had no operations through June
14, 1992 other than those related to organizational matters and the sale of
initial shares of beneficial interest to SEI Financial Management Corporation
(the "Administrator") on January 16, 1992.
The Trust is registered under the Investment Company Act of 1940, as amended,
as a diversified open-end investment company with two portfolios: the
Adjustable Rate Portfolio and the Short-Term Maturity Portfolio (the
"Portfolios"). The Trust's prospectus provides a description of each
Portfolio's investment objectives, policies and strategies.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the
Trust in the preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles.
Securities Valuation--Investment securities of the Portfolios which are
listed on a securities exchange for which market quotations are available
are valued at the last quoted sales price for such securities on each
business day, or, if there is no such reported sales price on the valuation
date, at the most recently quoted bid price. Unlisted securities for which
market quotations are readily available are valued at the most recently
quoted price. Debt obligations with sixty days or less remaining until
maturity may be valued at their amortized cost. Under this valuation
method, purchase discounts and premiums are accreted and amortized ratably
to maturity and are included in interest income. Securities for which
quotations are not readily available are valued at fair value using methods
determined in good faith by the Board of Trustees.
Security Transactions and Related Income--Security transactions are
accounted for on the trade date of the security purchase or sale. Costs
used in determining net realized capital gains and losses on the sale of
securities are those of the specific securities sold, adjusted for the
accretion and amortization of purchase discounts and premiums during the
respective holding period. Gains and losses realized on sales of securities
are determined on a first-in first-out (FIFO) basis. Interest income and
expenses are recognized on the accrual basis. Purchase discounts and
premiums are accreted and amortized over the life of each security and
recorded as interest income using a method which approximates the effective
interest method.
Distributions to Shareholders--Distributions of net investment income for
each Portfolio are declared daily and paid monthly on the first business
day. Any net realized capital gains will be distributed at least annually.
Federal Income Taxes--The Trust's policy is to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies
and to distribute all of its taxable income and net capital gains to its
shareholders. Accordingly, no provision for Federal income taxes is
required in the financial statements.
Organization Costs--The Trust incurred organization costs in connection
with its start-up. These costs have been deferred in the accounts of the
Portfolios and are being amortized on a straight-line basis over a period
of sixty months commencing with operations. In the event that any of the
initial shares of the Trust are redeemed by any holder thereof during the
period that the Trust is amortizing its organizational costs, the
FS-8
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued) CUFUND
May 31, 1996
redemption proceeds payable to the holder thereof by the Trust will be
reduced by the unamortized organizational costs in the same ratio as the
number of initial shares being redeemed bears to the number of initial
shares outstanding at the time of redemption.
Use of Estimates in the Preparation of Financial Statements--The
preparation of financial statements, in conformity with generally accepted
accounting principles, requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ from those
estimates.
Other--Expenses that are directly related to one of the Portfolios are
charged directly to that Portfolio. Other operating expenses of the Trust
are prorated to the Portfolios on the basis of relative net assets.
3. Administrative and Distribution Agreements:
The Trust and the Administrator are parties to an administrative agreement
dated May 1, 1992, under which the Administrator provides services for a fee
that is computed daily and payable monthly, at an annual rate which is the
greater of .09% of the average daily net assets of the Trust up to $750
million, and .0725% of the average daily net assets of the Trust exceeding $750
million, or $214,000. Certain officers of the Trust are also officers of the
Administrator and/or Distributor. Such officers are paid no fees by the Trust
for serving in their respective roles.
SEI Financial Services Company (the "Distributor") acts as the distributor of
the shares of the Trust. No compensation is paid to the Distributor for
distribution services.
4. Investment Advisory and Custodian Agreements:
The Trust and Southwest Corporate Federal Credit Union (the "Adviser") are
parties to an investment advisory agreement dated May 1, 1992, under which the
Adviser receives an annual fee, which is calculated daily and paid monthly, at
an annual rate of .32% of the average daily net assets of each Portfolio. The
Adviser has voluntarily agreed to waive its fee and reimburse the Trust for
other expenses to the extent necessary to limit the annual operating expenses
of each Portfolio to .39% of average daily net assets.
The Trust and CoreStates Bank, N.A. (the "Custodian") are parties to a
custodial agreement dated May 1, 1992 under which the Custodian holds cash,
securities and other assets of the Trust as required by the Investment Company
Act of 1940. The Custodian plays no role in determining the investment policies
of the Trust or which securities are to be purchased or sold in the Portfolios.
5. Investment Transactions:
For the period ended May 31, 1996, purchases and sales of investment securities
and United States Government Obligations (other than short-term securities)
were as follows (000):
<TABLE>
<CAPTION>
U.S. GOVERNMENT OTHER INVESTMENT
SECURITIES SECURITIES
----------------- -----------------
PURCHASES SALES PURCHASES SALES
--------- ------- --------- -------
<S> <C> <C> <C> <C>
Adjustable Rate Portfolio $18,400 $14,447 $10,248 $28,722
Short-Term Maturity Portfolio 8,321 9,949 1,412 2,086
</TABLE>
The total cost of securities held for Federal income tax purposes at May 31,
1996 for the Adjustable Rate Portfolio and the Short-Term Maturity Portfolio
FS-9
<PAGE>
NOTES TO FINANCIAL STATEMENTS (concluded) CUFUND
May 31, 1996
was not materially different from amounts reported for financial reporting
purposes. The Adjustable Rate Portfolio had net unrealized depreciation of
($156,996), which was composed of gross unrealized appreciation of $308,098 and
gross unrealized depreciation of ($465,094) for tax purposes. The Short-Term
Maturity Portfolio had net unrealized depreciation of ($376,199), which was
composed of gross unrealized appreciation of $9,043 and gross unrealized
depreciation of ($385,242) for tax purposes.
6. Capital Loss Carryforwards:
The capital loss carryforwards at May 31, 1996 for Federal income tax purposes
are as follows:
<TABLE>
<CAPTION>
EXPIRATION
AMOUNT DATE
-------- ----------
<S> <C> <C>
Adjustable Rate Portfolio $ 4,605 2001
10,425 2002
558,430 2003
37,771 2004
Short-Term Maturity Portfolio 383,533 2003
337,054 2004
</TABLE>
Subsequent to 10/31/95 the Adjustable Rate Portfolio and the Short-Term
Maturity Portfolio recognized net capital losses for tax purposes that have
been deferred to 1996 of $62,774 and $31,213, respectively. The capital loss
carryforwards and post 10/31/95 deferred losses can be used to offset future
net realized gains.
7. Variable Rate Financial Instruments:
The Adjustable Rate Portfolio's investment policies include investing, under
normal circumstances, at least 65% of its assets in adjustable rate mortgage
securities or other adjustable rate securities that have interest rates that
reset at periodic intervals. Such securities may experience less price
volatility due to changes in market interest rates than other debt securities.
These investments include securities subject to interest rate caps as well as
certain securities that adjust based upon an index whose movements may not
correlate directly with market movements. Both of these items may influence the
pricing of the security. As with other securities, the market values are
adjusted on a daily basis.
FS-10
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees of CUFUND:
We have audited the accompanying statements of net assets of the Adjustable
Rate and Short-Term Maturity Portfolios of CUFUND (the "Trust") as of May 31,
1996, and the related statements of operations, changes in net assets, and
financial highlights for the periods presented. These financial statements and
financial highlights are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of May
31, 1996, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Adjustable Rate and Short-Term Maturity Portfolios of CUFUND as of May 31,
1996, the results of their operations, changes in their net assets, and
financial highlights for the periods presented, in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN LLP
Philadelphia, Pa.
July 3, 1996
FS-11
<PAGE>
APPENDIX
DESCRIPTION OF RATINGS
DUFF & PHELPS
AAA Highest credit quality. The risk factors are negligible, being only
slightly more than for risk-free U.S. Treasury debt.
AA High credit quality. Protection factors are strong. Risk is modest but may
vary slightly from time to time because of economic conditions.
FITCH RATINGS
AAA Bonds considered to be investment grade and of the highest credit quality.
The obligor has an exceptionally strong ability to pay interest and repay
principal, which is unlikely to be affected by reasonably foreseeable
events.
AA Bonds considered to be investment grade and of very high credit quality.
The obligor's ability to pay interest and repay principal is very strong,
although not quite as strong as bonds rated "AAA'. Because bonds rated in
the "AAA' and "AA' categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these issuers is
generally rated "F-1+'.
IBCA RATING DEFINITIONS
AAA Obligations for which there is the lowest expectation of investment risk.
Capacity for timely repayment of principal and interest is substantial,
such that adverse changes in business, economic or financial conditions are
unlikely to increase investment risk substantially.
AA Obligations for which there is a very low expectation of investment risk.
Capacity for timely repayment of principal and interest is substantial.
Adverse changes in business, economic or financial conditions may increase
investment risk, albeit not very significantly.
MOODY'S RATING DEFINITIONS
Aaa Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as
"gilt edged". Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
Aa Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high-
grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other
elements present which make the long-term risk appear somewhat larger than
the Aaa securities.
STANDARD & POOR'S DEFINITIONS
AAA Debt rated "AAA' has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.
AA Debt rated "AA' has a very strong capacity to pay interest and repay
principal and differs from the highest rated debt only in small degree.
THOMSON BANKWATCH
AAA The highest category; indicates that the ability to repay principal and
interest on a timely basis is very high.
AA The second-highest category; indicates a superior ability to repay
principal and interest on a timely basis, with limited incremental risk
compared to issues rated in the highest category.
A-1
<PAGE>
INVESTMENT ADVISER
Southwest Corporate Federal Credit Union
7920 Belt Line Road
Suite 1100
Dallas, TX 75240
ADMINISTRATOR
SEI Fund Resources
680 East Swedesford Road
Wayne, PA 19087-1658
DISTRIBUTOR
SEI Financial Services Company
680 East Swedesford Road
Wayne, PA 19087-1658
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, PA 19103-6993
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP
1601 Market Street
Philadelphia, PA 19103-2499
<PAGE>
PART C: OTHER INFORMATION
Item 24. Financial Statements and Exhibits:
(a) Financial Statements
The Registrant's audited financial statements for the Short-Term
Maturity and Adjustable Rate Portfolios (the "Portfolios") for the fiscal year
ended May 31, 1996, including the report of Arthur Andersen LLP thereon, are
filed herewith as part of the combined Prospectus and Statement of Additional
Information. Such financial statements and report thereon consist of the
following:
1. Statement of Net Assets at May 31, 1996
2. Statement of Operations for the fiscal year ended May 31, 1996
3. Statement of Changes in Net Assets for the fiscal year ended
May 31, 1996
4. Financial Highlights for the fiscal year ended May 31, 1996
5. Notes to Financial Statements dated May 31, 1996
6. Report of Independent Public Accountants, dated July 3, 1996
(b) Exhibits
(1) Agreement and Declaration of Trust (originally filed as
Exhibit No. 1 to Registrant's Registration Statement on
December 2, 1991) is filed herewith.
(2) By-Laws (originally filed as Exhibit No. 2 to Registrant's
Registration Statement on April 23, 1992) are filed
herewith.
(3) Not Applicable.
(4) Not Applicable.
(5) Investment Advisory Agreement between Registrant and
Southwest Corporate Federal Credit Union dated May 1, 1992
is filed herewith.
(6) Distribution Agreement between Registrant and SEI Financial
Services Company dated May l, 1992 is filed herewith.
(7) Not Applicable.
(8) Custodian Agreement between Registrant and CoreStates Bank
N.A. dated May 1, 1992 is filed herewith.
(9) Not Applicable.
(10) Opinion and Consent of Counsel (originally filed as
Exhibit No. 10 to Registrant's Registration Statement on
May 29, 1992) is filed herewith.
(11) Consent of Independent Public Accountants is filed
herewith.
(12) Not Applicable.
(13)(1)Administration Agreement between Registrant and SEI
Financial Management Corporation dated April 30, 1996
is filed herewith.
(13)(2)Assignment and Assumption Agreement between SEI Financial
Management Corporation and SEI Financial Resources dated
May 31, 1996 is filed herewith.
(14) Not Applicable.
(15) Not Applicable.
(16) Performance Quotation Computation (originally filed as
Exhibit No. 16 to Registrant's Registration Statement on
September 28, 1995) is filed herewith.
(17) Financial Data Schedules are filed herewith.
(18) Not Applicable.
(24) Powers of Attorney for James L. Bryan, Gary L. Janacek,
Arno J. Easterly, Dr. Martha Romayne Seger, Stephen G.
Meyer, Richard Helber and David G. Lee (originally filed
as Exhibit No. 17 to Registrant's Registration Statement
on September 28, 1995) are filed herewith.
C-1
<PAGE>
Item 25. Persons Controlled by or Under Common Control with Registrant
See the combined Prospectus and Statement of Additional Information
regarding the Trust's control relationships. The Administrator is a subsidiary
of SEI Corporation which also controls the Distributor of the Registrant (SEI
Financial Services Company) and other corporations engaged in providing various
financial and record keeping services, primarily to bank trust departments,
pension plan sponsors and investment managers.
Item 26. Number of Holders of Securities:
As of September 2, 1996:
Number of
Title of Class Record Holders
-------------- --------------
Units of beneficial interest, without par value--
Short-Term Maturity Portfolio.................. 16
Adjustable Rate Portfolio...................... 13
Item 27. Indemnification:
Article VIII of the Agreement and Declaration of Trust (originally
filed as Exhibit No. 1 to Registrant's Registration Statement on December 2,
1991) is filed herewith. Insofar as indemnification for liabilities arising
under the Securities Act of 1933, as amended (the "Act"), may be permitted to
trustees, directors, officers and controlling persons of the Registrant by the
Registrant pursuant to the Registrant's Agreement and 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, officers or controlling
persons of the Registrant in connection with the successful defense of any act,
suit or proceeding) is asserted by such trustees, 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 Adviser:
Other business, profession, vocation or employment of a substantial
nature in which the Adviser and each director or officer of the Adviser is or
has been, at any time during the last two fiscal years, engaged for his own
account or in the capacity or director, officer, employee, partner or trustee
are as follows:
<TABLE>
<CAPTION>
Name and Position Name of Connection with
with Adviser Other Company Other Company
-------------- ------------- --------------
<S> <C> <C>
Francis C. Lee, President Western Corporate Federal Credit Union, Chief Operating Officer
San Dimas, CA
Arno J. Easterly, Chairman Barksdale Federal Credit Union, President
Barksdale AFB,LA
Patricia A. Mott, Director Arlington Federal Credit Union, President
Arlington, TX
Joe G. Thornton, Director The Teachers Federal Credit Union, President
Texarkana, TX
W.E. Ferrett, Director Texaco P.A.W. Employees Federal Credit Union, President
Port Arthur, TX
Gary A. Jester, Director Atlantic Federal Credit Union President
Dallas, TX
Jimmy O. Junkin, Director Randolph-Brooks Federal Credit Union, Chief Financial Officer
Universal City, TX
</TABLE>
C-2
<PAGE>
<TABLE>
<CAPTION>
Name and Position Name of Connection with
with Adviser Other Company Other Company
-------------- ------------- --------------
<S> <C> <C>
Sarah S. Mosley, Director Telcoe Federal Credit Union, President
Little Rock, AR
David R. Seely, Director Kirtland Federal Credit Union, President
Albuquerque, NM
Gerald W. Gurney, Director Texins Credit Union, Dallas, TX Sr. Exec. Vice President/Chief
Operating Officer
Bruce M. Fox, Vice President None None
Brent W. Smith, Vice President None None
Bob L. Rehm, Vice President None None
Jo Anne Beck, Vice President None None
Rebecca L. Averett, Vice President None None
Vahid G. Parvazi, Vice President None None
</TABLE>
Item 29. Principal Underwriters:
(a) 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, depositor or investment adviser.
<TABLE>
<CAPTION>
Registrant's distributor, SEI Financial Services Company ("SFS"),
acts as distributor for:
<S> <C>
SEI Daily Income Trust July 15, 1982
SEI Liquid Asset Trust November 29, 1982
SEI Tax Exempt Trust December 3, 1982
SEI Index Funds July 10, 1985
SEI Institutional Managed Trust January 22, 1987
SEI International Trust August 30, 1988
Stepstone Funds January 30, 1991
The Advisors' Inner Circle Fund November 14, 1991
The Pillar Funds February 28, 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/(R)/ June 1, 1993
The PBHG Funds, Inc. July 16, 1993
Marquis Funds/(R)/ 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
Turner Funds April 30, 1996
SEI Institutional Investments Trust June 14, 1996
</TABLE>
C-3
<PAGE>
SFS provides numerous financial services to investment managers, pension
plan sponsors, and bank trust departments. These services include portfolio
evaluation, performance measurement and consulting services ("Funds Evaluation")
and automated execution, clearing and settlement of securities transactions
("MarketLink").
(b) Furnish the information required by the following table with respect to
each director, officer or partner of each principal underwriter named in
the answer to Item 21 of Part B. Unless otherwise noted, the business
address of each director or officer is 680 East Swedesford Road, Wayne,
PA 19087.
<TABLE>
<CAPTION>
Positions and
Position and Office Offices
Name with Underwriter with Registrant
- ---- ---------------- ---------------
<S> <C> <C>
Alfred P. West, Jr. Director, Chairman &
Chief Executive Officer --
Henry H. Greer Director, President & Chief
Chief Operating Officer --
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 --
Steven Kramer Senior Vice President --
David G. Lee Senior Vice President President/ CEO
William Madden 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 V.P./Asst. Sec.
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 V.P./Asst. Sec.
Gordon W. Carpenter Vice President --
Todd Cipperman Vice President &
Assistant Secretary V.P./Asst. Sec.
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 --
Larry Hutchison Vice President --
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 --
Jack May Vice President --
Carolyn McLaurin Vice President &
Managing Director --
</TABLE>
C-4
<PAGE>
<TABLE><CAPTION>
Positions and
Position and Office Offices
Name with Underwriter with Registrant
- ---- ---------------- ---------------
<S> <C> <C>
W. Kelso Morrill Vice President --
Barbara A. Nugent Vice President & Assistant
Secretary V.P./Asst. Sec.
Sandra K. Orlow Vice President & Assistant
Secretary V.P./Asst. Sec.
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 V.P./Asst. Sec.
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, as amended (the "1940 Act"), and the rules
promulgated thereunder, are maintained as follows:
(a) With respect to Rules 31a-1(a); 31a-1(b)(1); (2)(a) and (b);
(3); (6); (8); (12); and 31a-1(d), the required books and records are
maintained at the offices of Registrant's Custodian:
CoreStates Bank, N.A.
Broad and Chestnut Streets
P.O. Box 7618
Philadelphia, Pennsylvania 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
680 E. Swedesford Road
Wayne, PA 19087
C-5
<PAGE>
(d) With respect to Rules 31a-(b)(5); (6), (9) and (10) and 31a-1(f),
the required books and records are maintained at the offices of
Registrant's Adviser:
Southwest Corporate Federal Credit Union
7920 Belt Line Road, Suite 1100
Dallas, TX 75240
Item 31. Management Services: None.
Item 32. Undertakings.
Registrant hereby undertakes that whenever Shareholders meeting the
requirements of Section 16(c) of the 1940 Act inform the Board of Trustees of
their desire to communicate with Shareholders of the Trust, 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 comply with the provisions of
Section 16(c) of the 1940 Act relating to shareholder communications.
Registrant hereby undertakes to furnish, upon request and without
charge, to each person to whom a prospectus is delivered, a copy of the
Registrant's latest annual report to Shareholders.
C-6
<PAGE>
NOTICE
A copy of the Agreement and Declaration of Trust of CUFUND is on file
with the Secretary of State of the Commonwealth of Massachusetts and notice is
hereby given that this Registration Statement has been executed on behalf of the
Trust by an officer of the Trust as an officer and by its Trustees as trustees
and not individually and the obligations of or arising out of this Registration
Statement are not binding upon any of the Trustees, officers, or Shareholders
individually but are binding only upon the assets and property of the Trust.
C-7
<PAGE>
Signatures
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, as amended, the Registrant certifies that it meets all of
the requirements for the effectiveness of this Registration Statement pursuant
to Rule 485(b) under the Securities Act of 1933 and has duly caused this Post-
Effective Amendment to the Registration Statement No. 33-44293 to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Wayne,
Commonwealth of Pennsylvania on the 23rd day of September, 1996.
CUFUND
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.
<TABLE>
<S> <C> <C>
* Trustee September 23, 1996
- --------------------------
James L. Bryan
* Trustee September 23, 1996
- --------------------------
Gary L. Janacek
* Trustee September 23, 1996
- --------------------------
Arno J. Easterly
* Trustee September 23, 1996
- --------------------------
Dr. Martha Romayne Seger
* Trustee September 23, 1996
- --------------------------
Richard Helber
/s/ DAVID G. LEE President & Chief September 23, 1996
- -------------------------- Executive Officer
David G. Lee
/s/ STEPHEN G. MEYER Controller & September 23, 1996
- -------------------------- Assistant Secretary
Stephen G. Meyer
*By /s/ DAVID G. LEE
-----------------------
David G. Lee
Attorney-in-Fact
</TABLE>
<PAGE>
Exhibit Index
<TABLE>
Exhibit
- -------
<S> <C> <C>
EX-99.B1 (1) Agreement and Declaration of Trust (originally filed as
Exhibit No. 1 to Registrant's Registration Statement on
December 2, 1991) is filed herewith.
EX-99.B2 (2) By-Laws (originally filed as Exhibit No. 2 to Registrant's
Registration Statement on April 23, 1992) are filed herewith.
(3) Not Applicable.
(4) Not Applicable.
EX-99.B5 (5) Investment Advisory Agreement between Registrant and Southwest
Corporate Federal Credit Union dated May 1, 1992 is filed
herewith.
EX-99.B6 (6) Distribution Agreement between Registrant and SEI Financial
Services Company dated May l, 1992 is filed herewith.
(7) Not Applicable.
EX-99.B8 (8) Custodian Agreement between Registrant and CoreStates Bank N.A.
dated May 1, 1992 is filed herewith.
(9) Not Applicable.
EX-99.B10 (10) Opinion and Consent of Counsel (originally filed as Exhibit No.
10 to Registrant's Registration Statement on May 29, 1992) is
filed herewith.
EX-99.B11 (11) Consent of Independent Public Accountants is filed herewith.
(12) Not Applicable.
EX-99.B13.1 (13) Administration Agreement between Registrant and SEI Financial
Management Corporation dated April 30, 1996 is filed herewith.
EX-99.B13.2 (13) Assignment and Assumption Agreement between SEC Financial
Management Corporation and SEI Fund Resources dated May 31, 1996
is filed herewith.
(14) Not Applicable.
(15) Not Applicable.
EX-99.B16 (16) Performance Quotation Computation (originally filed as Exhibit
No. 16 to Registrant's Registration Statement on September 28,
1995) is filed herewith.
(18) Not Applicable.
EX-99.B24 (24) Powers of Attorney for James L. Bryan, Gary L. Janacek, Arno J.
Easterly, Dr. Martha Romayne Seger, Stephen G. Meyer, Richard
Helber and David G. Lee (originally filed as Exhibit No. 17
to Registrant's Registration Statement on September 28, 1995)
are filed herewith.
EX-99.B27 (27) Financial Data Schedules are filed herewith.
</TABLE>
<PAGE>
CUFUND
AGREEMENT AND DECLARATION OF TRUST
AGREEMENT AND DECLARATION OF TRUST dated the 21st day of November, 1991, by
the Trustees hereunder, and by the holders of Shares of beneficial interest to
be issued hereunder as hereinafter provided.
WITNESSETH that
WHEREAS, this Trust has been formed to carry on the business of an
investment company; and
WHEREAS, the Trustees have agreed to manage all property coming into their
hands as trustees of a Massachusetts business trust with transferable Shares in
accordance with the provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will hold all cash,
securities and other assets, which they may from time to time acquire in any
manner as Trustees hereunder IN TRUST to manage and dispose of the same upon the
following terms and conditions for the pro rata benefit of the holders from time
to time of Shares in this Trust as hereinafter set forth.
ARTICLE I
Name and Definitions
Name
- ----
Section 1. This Trust shall be known as CUFUND, and the Trustees shall
---------
conduct the business of the Trust under that name or any other name as they may
from time to time determine.
Definitions
- -----------
Section 2. Whenever used herein, unless otherwise required by the context
---------
or
1
<PAGE>
specifically provided:
(a) The "Trust" refers to the Massachusetts business trust established by
this Agreement and Declaration of Trust, as amended from time to time;
(b) "Trustees" refers to the Trustees of the Trust named herein or elected
or appointed in accordance with Article IV and then in office;
(c) The term "Shares" refers to units of beneficial interest in the assets,
or in specified assets, of the Trust;
(d) "Shareholder" means a record owner of Shares;
(e) The terms "Affiliated Person," "Assignment," "Commission," "Interested
Person," "Principal Underwriter" and "Vote of a Majority" of the
outstanding Shares (the 67% or 50% requirement of the third sentence of
Section 2(a) (42) of the Investment Company Act of 1940 and the Rules
and Regulations thereunder, all as amended from time to time, whichever
may be applicable) shall have the meanings given them in the 1940 Act;
(f) "Declaration of Trust" shall mean this Agreement and Declaration of
Trust as amended or restated from time to time; and
(g) "By-Laws" shall mean the By-Laws of the Trust as adopted by the
Trustees and amended from time to time;
(h) The "1940 Act" refers to the Investment Company Act of 1940 and the
Rules and Regulations thereunder, all as amended from time to time.
(i) "Disinterested Trustee" shall have the meaning set forth in Article
VIII hereof.
ARTICLE II
Purpose
The purpose of the Trust is to provide investors with one or more
investment portfolio(s) consisting primarily of securities, including debt
instruments or obligations.
2
<PAGE>
ARTICLE III
Shares
Division of Beneficial Interest
- -------------------------------
Section 1. The Trustees may divide the beneficial interest in the Trust
---------
into an unlimited number of Shares and authorize the issuance of Shares without
prior Shareholder approval. Shares may be issued in series and, if so, Shares
of any series will constitute units of beneficial interest in assets of the
Trust specifically allocated to such series. Shares of the Trust, or any series
thereof, shall have no par value; shall represent equal and proportionate
interests in the Trust, or such series, with none having priority or preference
over any other except as specifically set forth in this Article III: and shall
be transferable. Shares of the Trust or of any series may be divided into
classes with Shares of any class being identical to those of any other class of
the Trust or such series except insofar as the Trustees may, consistent with the
1940 Act and other applicable law, allocate certain expenses to particular
classes of the Trust or a series thereof, and may provide for separate voting by
holders of securities of a class on matters affecting solely that class as
prescribed in Article V hereof.
Ownership of Shares
- -------------------
Section 2. The ownership of Shares shall be recorded on the books of the
---------
Trust or its transfer or similar agent. No certificates certifying the
ownership of Shares shall be issued except as the Trustees may otherwise
determine from time to time. The Trustees may make such rules as they consider
appropriate for the issuance of Share certificates, the transfer of Shares and
similar matters. The record books of the Trust as kept by the Trust or any
transfer or similar agent of the Trust, as the case may be, shall be conclusive
as to who are the Shareholders of each series and as to the number of Shares of
each series held from time to time by each Shareholder.
Investments in the Trust; Assets of the Series
- -----------------------------------------------
Section 3. The Trustees may accept investments in the Trust from such
---------
persons and on such terms and, subject to any requirements of law, for such
consideration, which may consist of cash or tangible or intangible property or a
combination thereof, as they may from time to time authorize.
3
<PAGE>
All consideration received by the Trust for the issue or sale of Shares of
each series, together with all income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation thereof,
and any funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably belong to the series of Shares
with respect to which the same were received by the Trust for all purposes,
subject only to the rights of creditors, and shall be so recorded upon the books
of account of the Trust and are herein referred to as "assets of" such series.
In addition, any assets, income, earnings, profits, and proceeds thereof, funds,
or payments which are not readily identifiable as belonging to any particular
series shall be allocated by the Trustees between and among one or more of the
series in such manner as they, in their sole discretion, deem fair and
equitable. Each such allocation shall be conclusive and binding upon the
Shareholders of all series for all purposes, and shall be referred to as assets
belonging to that series.
No Preemptive Rights
- --------------------
Section 4. Shareholders shall have no preemptive or other right to
---------
receive, purchase or subscribe for any additional Shares or other securities
issued by the Trust.
Status of Shares and Limitation of Personal Liability
- -----------------------------------------------------
Section 5. Shares shall be deemed to be personal property giving only the
---------
rights provided in this instrument. Every Shareholder by virtue of having
become a Shareholder shall be held to have expressly assented and agreed to the
terms of this Declaration of Trust and to have become a party thereto. The
death of a Shareholder during the continuance of the Trust shall not operate to
terminate the same nor entitle the representative of any deceased Shareholder to
an accounting or to take any action in court or elsewhere against the Trust or
the Trustees, but only to the rights of said decedent under this Trust.
Ownership of Shares shall not entitle the Shareholder to any title in or to the
whole or any part of the Trust property or right to call for a partition or
division of the same or for an accounting, nor shall the ownership of Shares
constitute the Shareholders partners. Neither the Trust nor the Trustees, nor
any officer, employee or agent of the Trust shall have any power to bind
personally any Shareholder, nor, except as specifically provided herein, to call
upon any Shareholder for the payment of any sum of money or assessment
whatsoever other than such as the Shareholder may at any time personally agree
to pay.
Trustees and Officers as Shareholders
- -------------------------------------
Section 6. Any Trustee, officer or other agent of the Trust may acquire,
---------
own and dispose of Shares of the Trust to the same extent as if he were not a
Trustee, officer or agent; and the Trustees may issue and sell or cause to be
issued and sold Shares
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to and buy such Shares from any such person of any firm or company in which he
is interested, subject only to the general limitations herein contained as to
the sale and purchase of such Shares; and all subject to any restrictions which
may be contained in the By-Laws.
ARTICLE IV
The Trustees
Election
- --------
Section 1. A Trustee may be elected either by the Trustees or the
---------
Shareholders subject to the limitations of the 1940 Act. The number of Trustees
shall be fixed by the Trustees, except that, commencing with the first
shareholders meeting at which Trustees are elected, there shall be not less than
three nor more than fifteen Trustees, each of whom shall hold office during the
lifetime of this Trust or until the election and qualification of his or her
successor, or until he or she sooner dies, resigns or is removed. The number of
Trustees so fixed may be increased either by the Shareholders or by the Trustees
by a vote of a majority of the Trustees then in office. The number of Trustees
so fixed may be decreased either by the Shareholders or by the Trustees by vote
of a majority of the Trustees then in office, but only to eliminate vacancies
existing by reason of the death, resignation or removal of one or more Trustees.
The initial Trustees, each of whom shall serve until the first meeting of
Shareholders at which Trustees are elected and until his or her successor is
elected and qualified, or until he or she sooner dies, resigns or is removed,
shall be Carl A. Guarino and such other persons as the Trustee or Trustees then
in office shall, prior to any sale of Shares pursuant to public offering,
appoint. By vote of the Shareholders holding a majority of the shares entitled
to vote, the Shareholders may remove a Trustee with or without cause. By vote
of a majority of the Trustees then in office, the Trustees may remove a Trustee
with or without cause. Any Trustee may resign at any time by written instrument
signed by him and delivered to any officer of the Trust, to each other Trustee
or to a meeting of the Trustees. Such resignation shall be effective upon
receipt unless specified to be effective at some other time. Except to the
extent expressly provided in a written agreement with the Trust, no Trustee
resigning and no Trustee removed shall have any right to any compensation for
any period following his resignation or removal, or any right to damages on
account of such removal. Any
5
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Trustee may, but need not, be a Shareholder.
In case of the declination, death, resignation, retirement, removal,
incapacity, or inability of any of the Trustees, or in case a vacancy shall
exist by reason of an increase in number, or for any other reason, the remaining
Trustees shall fill such vacancy by appointing such other person as they in
their discretion shall see fit consistent with the limitations under the 1940
Act. Such appointment shall be evidenced by a written instrument signed by a
majority of the Trustees in office or by recording in the records of
the Trust, whereupon the appointment shall take effect. An appointment of a
Trustee may be made by the Trustees then in office in anticipation of a vacancy
to occur by reason of retirement, resignation or increase in number of Trustees
effective at a later date, provided that said appointment shall become effective
only at or after the effective date of said retirement, resignation or increase
in number of Trustees. As soon as any Trustee so appointed shall have accepted
this trust, the trust estate shall vest in the new Trustee or Trustees, together
with the continuing Trustees, without any further act or conveyance, and he
shall be deemed a Trustee hereunder. The power of appointment is subject to the
provisions of Section 16(a) of the 1940 Act. In the event that at any time
after the commencement of public sales of Trust Shares less than a majority of
the Trustees then holding office were elected to such office by the
Shareholders, the Trustees or the Trust's President promptly shall call a
meeting of Shareholders for the purpose of electing Trustees. Each Trustee
elected by the Shareholders or by the Trustees shall serve until the election or
qualification of his or her successor, or until he or she sooner dies, resigns
or is removed.
Effect of Death, Resignation, Etc. of a Trustee
- -----------------------------------------------
Section 2. The death, declination, resignation, retirement, removal, or
---------
incapacity or inability of the Trustees, or any one of them, shall not operate
to annul the Trust or to revoke any existing agency created pursuant to the
terms of this Declaration of Trust.
Powers
- ------
Section 3. Subject to the provisions of this Declaration of Trust, the
---------
business of the Trust shall be managed by the Trustees, and they shall have all
powers necessary or convenient to carry out that responsibility. Without
limiting the foregoing, the Trustees may adopt By-Laws not inconsistent with
this Declaration of Trust providing for the conduct of the business of the Trust
and may amend and repeal them to the extent that such By-Laws do not reserve
that right to the Shareholders; they may fill vacancies in their number,
including vacancies resulting from increases in their number, and may elect and
remove such officers and appoint and terminate such agents as they consider
appropriate; they may appoint from their own number, and terminate, any one
6
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or more committees consisting of two or more Trustees, including an executive
committee which may, when the Trustees are not in session, exercise some or all
of the powers and authority of the Trustees as the Trustees may determine; they
may appoint an advisory board, the members of which shall not be Trustees and
need not be Shareholders; they may employ one or more investment advisers or
administrators as provided in Section 7 of this Article IV; they may employ one
or more custodians of the assets of the trust and may authorize such custodians
to employ subcustodians and to deposit all or any part of such assets in a
system or systems for the central handling of securities, retain a transfer
agent or a Shareholder servicing agent, or both, provide for the distribution of
Shares by the Trust, through one or more principal underwriters or otherwise,
set record dates for the determination of Shareholders with respect to various
matters, and in general delegate such authority as they consider desirable to
any officer of the Trust, to any committee of the Trustees and to any agent or
employee of the Trust or to any such custodian or underwriter; and they may
elect and remove such officers and appoint and terminate such agents as they
consider appropriate. No such delegation of authority or appointment of an agent
shall relieve the Trustees of their obligations for the action thus delegated or
authorized.
Without limiting the foregoing, the Trustees shall have power and
authority:
(a) To invest and reinvest cash, and to hold cash uninvested;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate, write options
on and lease any or all of the assets of the Trust;
(c) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property, and to execute and
deliver proxies or powers of attorney to such person or persons as the
Trustees shall deem proper, granting to such person or persons such
power and discretion with relation to securities or property as the
Trustees shall deem proper;
(d) To exercise powers and rights of subscription or otherwise which in any
manner arise out of ownership of securities;
(e) To hold any security or property in a form not indicating any trust,
whether in bearer, unregistered or other negotiable form, or in the
name of the Trustees or of the Trust or in the name of a custodian,
subcustodian or other depositary or a nominee or nominees or otherwise;
(f) To establish separate and distinct series of shares with separately
defined investment objectives, policies and purposes, and to allocate
assets,
7
<PAGE>
liabilities and expenses of the Trust to a particular series of Shares
or to apportion the same among two or more series, provided that any
liability or expense incurred by a particular series of Shares shall be
payable solely out of the assets of that series and to establish
separate classes of shares of each series, all in accordance with
Article III hereof;
(g) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer, any security or
property of which is or was held in the Trust; to consent to any
contract, lease, mortgage, purchase or sale of property by such
corporation or issuer, and to pay calls or subscriptions with respect
to any security held in the Trust;
(h) To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to
deposit any security with, or transfer any security to, any such
committee, depositary or trustee, and to delegate to them such power
and authority with relation to any security (whether or not so
deposited or transferred) as the Trustees shall deem proper, and to
agree to pay, and to pay, such portion of the expenses and compensation
of such committee, depositary or trustee as the Trustees shall deem
proper;
(i) To compromise, arbitrate or otherwise adjust claims in favor of or
against the Trust or any matter in controversy, including but not
limited to claims for taxes;
(j) To enter into joint ventures, general or limited partnerships and any
other combinations or associations;
(k) To borrow funds;
(l) To endorse or guarantee the payment of any notes or other obligations
of any person; to make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof; and to mortgage and
pledge the Trust property or any part thereof to secure any or all of
such obligations;
(m) To purchase and pay for entirely out of Trust property such insurance
as the Trustees may deem necessary or appropriate for the conduct of
the business, including, without limitation, insurance policies
insuring the assets of the Trust and payment of distributions and
principal on its portfolio investments, and insurance policies insuring
the Shareholders, Trustees, officers, employees, agents, investment
advisers or
8
<PAGE>
administrators, principal underwriters, or independent contractors of
the Trust individually against all claims and liabilities of every
nature arising by reason of holding, being or having held any such
office or position, or by reason of any action alleged to have been
taken or omitted by any such person as Shareholder, Trustee, officer,
employee, agent, investment adviser or administrator, principal
underwriter, or independent contractor, including any action taken or
omitted that may be determined to constitute negligence, whether or not
the Trust would have the power to indemnify such person against such
liability;
(n) To pay pensions for faithful service, as deemed appropriate by the
Trustees, and to adopt, establish and carry out pension, profit-
sharing, share bonus, share purchase, savings, thrift and other
retirement, incentive and benefit plans, trusts and provisions,
including the purchasing of life insurance and annuity contracts as a
means of providing such retirement and other benefits, for any or all
of the Trustees, officers, employees and agents of the Trust;
(o) To establish, from time to time, a minimum total investment for
Shareholders, and to require the redemption of the Shares of any
Shareholder whose investment is less than such minimum upon giving
notice to such Shareholder;
(p) To enter into contracts of any kind and description;
(q) To name, or to change the name or designation of the Trust or any
series or class of the Trust;
(r) To take whatever action may be necessary to enable the Trust to comply
with any applicable Federal, state or local statute, rule or
regulation; and
(s) To engage in any other lawful act or activity in which corporations
organized under the Massachusetts Business Corporation Law may engage.
The Trustees shall not in any way be bound or limited by any present or
future law or custom in regard to investments by Trustees. Except as otherwise
provided herein or from time to time in the By-Laws, any action to be taken by
the Trustees may be taken by a majority of the Trustees present at a meeting of
Trustees (if a quorum be present), within or without Massachusetts, including
any meeting held by means of a conference telephone or other communications
equipment by which all persons participating in the meeting can communicate with
each other simultaneously and
9
<PAGE>
participation by such means shall constitute presence in person at a meeting, or
by written consent of a majority of the Trustees then in office.
Payment of Expenses by the Trust
- --------------------------------
Section 4. The Trustees are authorized to pay or to cause to be paid out
---------
of the principal or income of the Trust, or partly out of principal and partly
out of income, as they deem fair, all expenses, fees, charges, taxes and
liabilities incurred or arising in connection with the Trust, or in connection
with the management thereof, including, but not limited to, the Trustees'
compensation and such expenses and charges for the services of the Trust's
officers, employees, investment adviser or administrator, principal underwriter,
auditor, counsel, custodian, transfer agent, Shareholder servicing agent, and
such other agents or independent contractors and such other expenses and charges
as the Trustees may deem necessary or proper to incur, provided, however, that
all expenses, fees, charges, taxes and liabilities incurred or arising in
connection with a particular series of Shares or class as determined by the
Trustees consistent with applicable law, shall be payable solely out of the
assets of that series or class. Any general liabilities, expenses, costs,
charges or reserves of the Trust which are not readily identifiable as belonging
to any particular series shall be allocated and charged by the Trustees between
or among any one or more of the series in such manner as the Trustees in their
sole discretion deem fair and equitable. Each such allocation shall be
conclusive and binding upon the Shareholders of all series for all purposes. Any
creditor of any series may look only to the assets of that series to satisfy
such creditor's debt.
Section 5. The Trustees shall have the power, as frequently as they may
---------
determine, to cause each Shareholder to pay directly, in advance or arrears, for
any and all expenses of the Trust, an amount fixed from time to time by the
Trustees, by setting off such charges due from such Shareholder from declared
but unpaid dividends owed such Shareholder and/or by reducing the number of
Shares in the account of such Shareholder by that number of full and/or
fractional Shares which represents the outstanding amount of such charges due
from such Shareholder.
Ownership of Assets of the Trust
- --------------------------------
Section 6. Title to all of the assets of each series of Shares and the
---------
Trust shall at all times be considered as vested in the Trustees.
Advisory, Administration and Distribution
- -----------------------------------------
Section 7. The Trustees may, at any time and from time to time, contract
---------
with respect to the Trust or any series thereof for exclusive or nonexclusive
advisory and/or
10
<PAGE>
administration services with Southwest Corporate Federal Credit Union, SEI
Financial Management Corporation, a Delaware corporation, and/or any other
corporation, trust, association or other organization, every such contract to
comply with such requirements and restrictions as may be set forth in the By-
Laws; and any such contract may contain such other terms interpretive of or in
addition to said requirements and restrictions as the Trustees may determine,
including, without limitation, in the case of a contract for advisory or sub-
advisory services, authority to determine from time to time what investments
shall be purchased, held, sold or exchanged and what portion, if any, of the
assets of the Trust shall be held uninvested and to make changes in the Trust's
investments. Any contract for advisory services shall be subject to such
Shareholder approval as is required by the 1940 Act. The Trustees may also, at
any time and from time to time, contract with SEI Financial Services Company, a
Pennsylvania corporation, and/or any other corporation, trust, association or
other organization, appointing it exclusive or nonexclusive distributor or
principal underwriter for the Shares, every such contract to comply with such
requirements and restrictions as may be set forth in the By-Laws, and any such
contract may contain such other terms interpretive of or in addition to said
requirements and restrictions as the Trustees may determine.
The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, member, director, officer, partner, trustee, employee,
adviser, principal underwriter, or distributor or agent of or for any
corporation, trust, association, credit union or other organization,
or of or for any parent or affiliate of any organization, with which
an advisory or administration or principal underwriter's or
distributor's contract, or transfer, Shareholder servicing or other
agency contract may have been or may hereafter be made, or that any
such organization, or any parent or affiliate thereof, is a
Shareholder or has an interest in the Trust, or that
(ii) any corporation, trust, association, credit union or other
organization with which an advisory or administration or principal
underwriter's or distributor's contract, or transfer, Shareholder
servicing or other agency contract may have been or may hereafter be
made also has an advisory or administration contract, or principal
underwriter's or distributor's contract, or transfer, Shareholder
servicing or other agency contract with one or more other
corporations, trusts, associations, credit unions, or other
organizations, or has other businesses or interests,
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or create any liability or
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accountability to the Trust or its Shareholders.
ARTICLE V
Shareholders' Voting Powers and Meetings
Voting Powers
- -------------
Section 1. The Shareholders shall have power hereof to vote only (i) for
---------
the election or removal of Trustees as provided in Article IV, Section 1 hereof,
(ii) with respect to any investment adviser as provided in Article IV, Section
7, (iii) with respect to any termination of the Trust or any series of shares to
the extent and as provided in Article IX, Section 4, (iv) with respect to any
amendment of this Declaration of Trust to the extent and as provided in Article
IX, Section 7, (v) to the same extent as the stockholders of a Massachusetts
business corporation as to whether or not a court action, proceeding or claim
should or should not be brought or maintained derivatively or as a class action
on behalf of the Trust or the Shareholders, and (vi) with respect to such
additional matters relating to the Trust as may be required by law, by this
Declaration of Trust, by the By-Laws or by any registration of the Trust with
the Securities and Exchange Commission or any state, or as the Trustees may
consider necessary or desirable.
Each whole Share shall be entitled to one vote as to any matter on which it
is entitled to vote and each fractional Share shall be entitled to a
proportionate fractional vote. Notwithstanding any other provisions of this
Declaration of Trust, or any matter submitted to a vote of Shareholders, all
Shares of the Trust then entitled to vote shall be voted by individual series or
class, except (1) when required by the 1940 Act, Shares shall be voted in the
aggregate and not by individual series or class, and (2) when the Trustees have
determined that the matter affects only the interests of one or more series or
class, then only Shareholders of such series or class shall be entitled to vote
thereon. There shall be no cumulative voting in the election of Trustees.
Shares may be voted in person or by proxy.
A proxy with respect to Shares held in the name of two or more persons
shall be valid if executed by any one of them unless at or prior to the exercise
of the proxy the Trust receives a specific written notice to the contrary from
any one of them. A proxy purporting to be executed by or on behalf of a
Shareholder shall be deemed valid unless challenged at or prior to its exercise
and the burden of proving invalidity shall rest on the challenger. Until Shares
are issued, the Trustees may exercise all rights of Shareholders and may take
any action required by law, this Declaration of Trust or the By-Laws to be taken
by Shareholders.
12
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Voting Power and Meetings
- -------------------------
Section 2. Meetings of Shareholders of the Trust or of any series or class
---------
may be called by the Trustees, or such other person or persons as may be
specified in the By-Laws, and held from time to time for the purpose of taking
action upon any matter requiring the vote or the authority of the Shareholders
of the Trust or any series or class as herein provided or upon any other matter
deemed by the Trustees to be necessary or desirable. Written notice of any
meeting of Shareholders shall be given or caused to be given by the Trustees by
mailing such notice at least seven days before such meeting, postage prepaid,
stating the time, place and purpose of the meeting, to each Shareholder at the
Shareholder's address as it appears on the records of the Trust. If the
Trustees shall fail to call or give notice of any meeting of Shareholders for a
period of thirty days after written application by Shareholders holding at least
25% of the Shares then outstanding requesting a meeting to be called for a
purpose requiring action by the Shareholders as provided herein or in the By-
Laws, then Shareholders holding at least 25% of the Shares then outstanding may
call and give notice of such meeting, and thereupon the meeting shall be held in
the manner provided for herein in case of call thereof by the Trustees. Notice
of a meeting need not be given to any Shareholder if a written waiver of notice,
executed by him or her before or after the meeting, is filed with the records of
the meeting, or to any Shareholder who attends the meeting without protesting
prior thereto or at its commencement the lack of notice to such Shareholder.
Quorum and Required Vote
- ------------------------
Section 3. A majority of the Shares entitled to vote shall be a quorum for
---------
the transaction of business at a Shareholders' meeting, except that where any
provision of law or of this Declaration of Trust permits or requires that
holders of any series or class shall vote as a series or class, then a majority
of the aggregate number of Shares of that series or class entitled to vote shall
be necessary to constitute a quorum for the transaction of business by that
series or class. Any lesser number, however, shall be sufficient for
adjournments. Any adjourned session or sessions may be held within a reasonable
time after the date set for the original meeting without the necessity of
further notice.
Except when a larger vote is required by any provisions of this Declaration
of Trust or the By-Laws, a majority of the Shares voted on any matter shall
decide such matter and a plurality shall elect a Trustee, provided that where
any provision of law or of this Declaration of Trust permits or requires that
the holders of any series or class shall vote as a series or class, then a
majority of the Shares of that series or class voted on the matter shall decide
that matter insofar as that series or class is concerned.
13
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Action by Written Consent
- -------------------------
Section 4. Any action taken by Shareholders may be taken without a meeting
---------
if a majority of Shareholders entitled to vote on the matter (or such larger
vote as shall be required by applicable law or by any provision of this
Declaration of Trust or the By-Laws) consent to the action in writing and such
written consents are filed with the records of the meetings of Shareholders.
Such consent shall be treated for all purposes as a vote taken at a meeting of
Shareholders.
Additional Provisions
- ---------------------
Section 5. The By-Laws may include further provisions for Shareholders'
---------
votes and meetings and related matters.
ARTICLE VI
Distributions, Redemptions, Repurchases
and Determination of Net Asset Value
Distributions
- -------------
Section 1. The Trustees may, but need not, distribute each year to the
---------
Shareholders of each series or class such income and gains, accrued or realized,
as the Trustees may determine, after providing for actual and accrued expenses
and liabilities (including such reserves as the Trustees may establish)
determined in accordance with
good accounting practices. The Trustees shall have full discretion to determine
which items shall be treated as income and which items as capital and their
determination shall be binding upon the Shareholders. Distributions of each
year's income of each series or class, if any be made, may be made in one or
more payments, which shall be in Shares, in cash or otherwise and on a date or
dates determined by the Trustees. At any time and from time to time in their
discretion, the Trustees may distribute to the Shareholders of any one or more
series or class as of a record date or dates determined by the Trustees, in
Shares, in cash or otherwise, all or part of any gains realized on the sale or
disposition of property of the series or class or otherwise, or all or part of
any other principal of the Trust attributable to the series or class. Each
distribution pursuant to this Section 1 shall be made ratably according to the
number of Shares of the series or class held by the several Shareholders on the
applicable record date thereof, provided that no distributions need be made on
Shares purchased pursuant to orders received, or for which payment is made,
after such time or times as the Trustees may determine. Any such distribution
paid in Shares will be paid at the net asset value thereof as determined in
accordance with Section 2 of this
14
<PAGE>
Article VI.
Redemptions and Repurchases
- ---------------------------
Section 2. Any holder of Shares of the Trust may, by presentation of a
---------
written request, together with his certificates, if any, for such Shares, in
proper form for transfer, at the office of the Trust, the adviser, the
underwriter or the distributors, or at a principal office of a transfer or
Shareholder services agent appointed by the Trust (as the Trustees may
determine), redeem his Shares for the net asset value thereof determined and
computed in accordance with the procedures and computation methods established
from time to time by the Trust under the authority of the Trustees, less any
redemption charge which the Trustees may establish. Upon receipt of such
written request for redemption of Shares by the Trust, the adviser, the
underwriter or the distributor, or the Trust's transfer or Shareholder services
agent, such Shares shall be redeemed at the net asset value per share of the
particular series next determined after such Shares are tendered in proper form
for transfer to the Trust or determined as of such other time fixed by the
Trustees, as may be permitted or required by the 1940 Act, provided that no such
tender shall be required in the case of Shares for which a certificate or
certificates have not been issued, and in such case such Shares shall be
redeemed at the net asset value per share of the particular series next
determined after such demand has been received or determined at such other time
fixed by the Trustees, as may be determined or required by the 1940 Act.
The obligation of the Trust to redeem its Shares of each series as set
forth above in this Section 2 shall be subject to the condition that, during any
time of emergency, as hereinafter defined, such obligation may be suspended by
the Trust by or under authority of the Trustees for such period or periods
during such time of emergency as shall be determined by or under authority of
the Trustees. If there is such a suspension, any Shareholder may withdraw any
demand for redemption and any tender of Shares which
has been received by the Trust during any such period and any tender of Shares
the applicable net asset value of which would but for such suspension be
calculated as of a time during such period. Upon such withdrawal, the Trust
shall return to the Shareholder the certificates therefor, if any. For the
purposes of any such suspension "time of emergency" shall mean, either with
respect to all Shares or any series or class of Shares, any period during which:
(a) the New York Stock Exchange is closed other than for customary weekend
and holiday closings; or
(b) the Trustees or authorized officers of the Trust shall have determined,
in compliance with any applicable rules and regulations or orders of
the Commission, either that trading on the New York Stock Exchange is
15
<PAGE>
restricted, or that an emergency exists as a result of which (i)
disposal by the Trust of securities owned by it is not reasonably
practicable or (ii) it is not reasonably practicable for the Trust
fairly to determine the current value of its net assets; or
(c) the suspension or postponement of such obligations is permitted by
order of the Commission.
The Trust may also purchase, repurchase or redeem Shares in accordance with
such other methods, upon such other terms and subject to such other conditions
as the Trustees may from time to time authorize at a price not exceeding the net
asset value of such Shares in effect when the purchase or repurchase or any
contract to purchase or repurchase is made.
Payment in Kind
- ---------------
Section 3. Subject to any generally applicable limitation imposed by the
---------
Trustees, any payment on redemption, purchase or repurchase by the Trust of
Shares may, if authorized by the Trustees, be made wholly or partly in kind,
instead of in cash. Such payment in kind shall be made by distributing
securities or other property, constituting, in the opinion of the Trustees, a
fair representation of the various types of securities and other property then
held by the series or class of Shares being redeemed, purchased or repurchased
(but not necessarily involving a portion of each of the series' or classes'
holdings) and taken at their value used in determining the net asset value of
the Shares in respect of which payment is made.
Additional Provisions Relating to Redemptions and Repurchases
- -------------------------------------------------------------
Section 4. The completion of redemption, purchase or repurchase of Shares
---------
shall constitute a full discharge of the Trust and the Trustees with respect to
such Shares and the Trustees may require that any certificate or certificates
issued by the Trust to evidence the ownership of such Shares shall be
surrendered to the Trustees for cancellation or notation .
Dividends, Distributions, Redemptions and Repurchases
- -----------------------------------------------------
Section 5. No dividend or distribution (including, without limitation, any
---------
distribution paid upon termination of the Trust or of any series or class) with
respect to, nor any redemption or repurchase of, the Shares of any series or
class shall be effected by the Trust other than from the assets of such series
or class.
16
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ARTICLE VII
Compensation and Limitation
of Liability of Trustees
Compensation
- ------------
Section 1. The Trustees as such shall be entitled to reasonable
---------
compensation from the Trust; they may fix the amount of their compensation.
Nothing herein shall in any way prevent the employment of any Trustee for
advisory, administration, legal, accounting, investment banking or other
services and payment for the same by the Trust.
Limitation of Liability
- -----------------------
Section 2. The Trustees shall not be responsible or liable in any event
---------
for any neglect or wrongdoing of any officer, agent, employee, investment
adviser or administrator, principal underwriter or custodian of or for the
Trust, nor shall any Trustee be responsible for the act or omission of any other
Trustee, but nothing herein contained shall protect any Trustee against any
liability to which he or she would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office.
Every note, bond, contract, instrument, certificate, Share or undertaking
and every other act or thing whatsoever executed or done by or on behalf of the
Trust or the Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been executed or done only in or with respect to
their or his or her capacity as Trustees or Trustee, and such Trustees or
Trustee shall not be personally liable thereon.
ARTICLE VIII
Indemnification
Subject to the exceptions and limitations contained in this Article, every
person who is, or has been, a Trustee or officer of the Trust shall be
indemnified by the Trust to the fullest extent permitted by law against
liability and against all expenses reasonably incurred or paid by him in
connection with any claim, action, suit or proceeding in which he becomes
involved as a party or otherwise by virtue of his being or having been a Trustee
or officer and against amounts paid or incurred by him in
17
<PAGE>
settlement thereof.
No indemnification shall be provided hereunder to a Trustee or officer:
(a) against any liability to the Trust or its Shareholders by reason of a
final adjudication by the court or other body before which the
proceeding was brought that he engaged in willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in
the conduct of his office;
(b) with respect to any matter as to which he shall have been finally
adjudicated not to have acted in good faith in the reasonable belief
that his action was in the best interests of the Trust;
(c) in the event of a settlement or other disposition not involving a final
adjudication (as provided in paragraph (a) or (b) hereof) and resulting
in a payment by a Trustee or officer, unless there has been either a
determination by the court or other body approving the settlement or
other disposition that such Trustee or officer did not engage in
willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his office or a reasonable
determination, based on a review of readily available facts (as opposed
to a full trial-type inquiry), that he did not engage in such conduct,
and such reasonable determination is made either:
(i) by a vote of a majority of the Disinterested Trustees acting on the
matter (provided that a majority of the Disinterested Trustees then
in office act on the matter); or
(ii) by written opinion of independent legal counsel to the Trust.
The rights of indemnification herein provided may be insured against by
policies maintained by the Trust, shall be severable, shall not affect any other
rights to which any Trustee or officer may now or hereafter be entitled, shall
continue as to a person who has ceased to be such Trustee or officer and shall
inure to the benefit of the heirs, executors and administrators of such a
person. Nothing contained herein shall affect any rights to indemnification to
which Trust personnel other than Trustees and officers may be entitled by
contract or otherwise under law.
Expenses of preparation and presentation of a defense to any claim, action,
suit or proceeding of the character described in the next to the last paragraph
of this Article
18
<PAGE>
shall be advanced by the Trust prior to final disposition thereof upon receipt
of an undertaking by or on behalf of the recipient to repay such amount if it is
ultimately determined that such recipient is not entitled to indemnification
under this Article, provided that either:
(a) such undertaking is secured by a surety bond or some other security
deemed appropriate by the Trustees or the Trust shall be insured
against losses arising out of any such advances; or
(b) a majority of the Disinterested Trustees acting on the matter (provided
that a majority of the Disinterested Trustees then in office act on the
matter) or independent legal counsel to the Trust in a written opinion
shall determine, based upon a review of the readily available facts (as
opposed to a full trial-type inquiry), that there is reason to believe
that the recipient ultimately will be found entitled to
indemnification.
As used in this Article, a "Disinterested Trustee" is one (i) who is not an
"interested person" of the Trust (as defined by the 1940 Act) (including anyone
who has been exempted from being an "interested person" by any rule, regulation
or order of the Securities and Exchange Commission), and (ii) against whom none
of such claims, actions, suits or other proceedings or another claim, action,
suit or other proceeding on the same or similar grounds is then or has been
pending.
As used in this Article, the words "claim," "action," "suit" or
"proceeding" shall apply to all claims, actions, suits or proceedings (civil,
criminal or other, including appeals), actual or threatened; and the words
"liability" and "expenses" shall include without limitation, attorney's fees,
costs, judgments, amounts paid in settlement, fines, penalties and other
liabilities.
In case any Shareholder or former Shareholder shall be held to be
personally liable solely by reason of his or her being or having been a
Shareholder and not because of his or her acts or omissions or for some other
reason, the Shareholder or former Shareholder (or his or her heirs, executors,
administrators or other legal representatives or in the case of a corporation or
other entity, its corporate or other general successor) shall be entitled to be
held harmless from and indemnified against all loss and expenses arising from
such liability, but only out of the assets of the particular series of Shares of
which he or she is or was a Shareholder.
ARTICLE IX
Miscellaneous
19
<PAGE>
Trustees, Shareholders, Etc. Not Personally Liable; Notice
- ----------------------------------------------------------
Section 1. All persons extending credit to, contracting with or
---------
having any claim against the Trust or a particular series or class of Shares
shall look only to the assets of the Trust or the assets of that particular
series or class of Shares for payment under such credit, contract or claim; and
neither the Shareholders nor the Trustees, nor any of the Trust's officers,
employees or agents, whether past, present or future, shall be personally liable
therefor. Nothing in this Declaration of Trust shall protect any Trustee
against any liability to which such Trustee would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of Trustee.
Every note, bond, contract, instrument, certificate or undertaking
made or issued by the Trustees or by any officers or officer shall give notice
that this Declaration of Trust is on file with the Secretary of the Commonwealth
of Massachusetts and shall recite that the same was executed or made by or on
behalf of the Trust or by them as Trustees or Trustee or as officers or officer
and not individually and that the obligations of such instrument are not binding
upon any of them or the Shareholders individually but are binding only upon the
assets and property of the Trust, and may contain such further recital as he or
she or they may deem appropriate, but the omission thereof shall not operate to
bind any Trustees or Trustee or officers or officer or Shareholders or
Shareholder individually.
Trustees' Good Faith Action, Expert Advice; No Bond or Surety
- -------------------------------------------------------------
Section 2. The exercise by the Trustees of their powers and
---------
discretion hereunder shall be binding upon everyone interested. A Trustee shall
be liable for his or her own willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of the office of
Trustee, and for nothing else, and shall not be liable for errors of judgment or
mistakes of fact or law. The Trustees may take advice of counsel or other
experts with respect to the meaning and operation of this Declaration of Trust,
and shall be under no liability for any act or omission in accordance with such
advice or for failing to follow such advice. The Trustees shall not be required
to give any bond as such, nor any surety if a bond is required.
Liability of Third Persons Dealing with Trustees
- ------------------------------------------------
Section 3. No person dealing with the Trustees shall be bound to make
---------
any inquiry concerning the validity of any transaction made or to be made by the
Trustees or to see to the application of any payments made or property
transferred to the Trust or upon its order.
20
<PAGE>
Duration and Termination of Trust
- ---------------------------------
Section 4. Unless terminated as provided herein, the Trust shall
---------
continue without limitation of time. The Trust may be terminated at any time by
vote of Shareholders holding at least a majority of the Shares entitled to vote
or by the Trustees by written notice to the Shareholders. Any series or class
of Shares may be terminated at any time by vote of Shareholders holding at least
a majority of the Shares of such series or class entitled to vote or by the
Trustees by written notice to the Shareholders of such series or class. Upon
termination of the Trust or of any one or more series or class of Shares, after
paying or otherwise providing for all charges, taxes, expenses and liabilities,
whether due or accrued or anticipated, of the Trust or of the particular series
as may be determined by the Trustees, the Trust shall, in accordance with such
procedures as the Trustees consider appropriate, reduce the remaining assets to
distributable form in cash or Shares or other securities, or any combination
thereof, and distribute the proceeds to the Shareholders of the series involved,
ratably according to the number of Shares of such series held by the several
Shareholders of such series on the date of termination.
Section 5. The original or a copy of this instrument and of each
---------
amendment hereto shall be kept at the office of the Trust where it may be
inspected by any Shareholder during normal business hours and upon reasonable
prior notice. A copy of this instrument and of each amendment hereto shall be
filed by the Trust with the Secretary of the Commonwealth of Massachusetts and
with the Boston City Clerk, as well as any other governmental office where such
filing may from time to time be required. Anyone dealing with the Trust may
rely on a certificate by an officer of the Trust as to whether or not any such
amendments have been made and as to any matters in connection with the Trust
hereunder; and, with the same effect as if it were the original, may rely on a
copy certified by an officer of the Trust to be a copy of this instrument or of
any such amendments. In this instrument and in such amendment, references to
this instrument, and the expression "herein," "hereof," and "hereunder" shall be
deemed to refer to this instrument as amended from time to time. Headings are
placed herein for convenience of reference only and shall not be taken as part
hereof or control or affect the meaning, construction or effect of this
instrument. This instrument may be executed in any number of counterparts each
of which shall be deemed an original.
Applicable Law
- --------------
Section 6. The Trust shall be of the type commonly called a
---------
Massachusetts business trust, and without limiting the provisions hereof, the
Trust may exercise all powers which are ordinarily exercised by such a trust.
This Declaration of Trust is to be governed by and construed and administered
according to the laws of said
21
<PAGE>
Commonwealth.
Amendments
- ----------
Section 7. This Declaration of Trust may be amended at any time by an
---------
instrument in writing signed by a majority of the then Trustees when authorized
to do so by a vote of Shareholders holding a majority of the Shares entitled to
vote, except that an amendment which shall affect the holders of one or more
series or classes of Shares but not the holders of all outstanding series as
classes shall be authorized by vote of the Shareholders holding a majority of
the Shares entitled to vote of each series or classes affected and no vote of
Shareholders of a series or class not affected shall be required.
Amendments having the purpose of changing the name of the Trust or of
supplying any omission, curing any ambiguity or curing, correcting or
supplementing any defective or inconsistent provision contained herein shall not
require authorization by Shareholder vote.
IN WITNESS WHEREOF, the undersigned being the sole initial Trustee of
the Trust has executed this document this 21st day of November, 1991.
/s/ Carl A. Guarino
___________________________
Carl A. Guarino
c/o SEI Financial Services Company
680 E. Swedesford Road
Wayne, PA 19087
COMMONWEALTH OF PENNSYLVANIA
COUNTY OF PHILADELPHIA
I, the undersigned authority, hereby certify that the foregoing is a true and
correct copy of the instrument presented to me by Carl A. Guarino as the
original of such instrument.
WITNESS my hand and official seal, this 21 day of November.
/s/ Christine M. McCann
--------------------------
Notary Public
My commission expires: May 6, 1995
22
<PAGE>
Resident Agent: CT Corporation, 2 Oliver Street, Boston, MA 02109
23
<PAGE>
BY-LAWS
OF
CUFUND
Section 1. Agreement and Declaration of Trust and Principal Office
1.1 Agreement and Declaration of Trust. These By-Laws shall be subject to the
-----------------------------------
Agreement and Declaration of Trust, as from time to time in effect (the
"Declaration of Trust"), of CUFUND, a Massachusetts business trust
established by the Declaration of Trust (the "Trust"). All defined terms in
these By-Laws shall be used as defined in the Declaration of Trust.
1.2 Principal Office of the Trust. The principal office of the Trust shall be
------------------------------
located in Boston, Massachusetts, or such other location as may from time
to time be selected by the Trustees.
Section 2. Shareholders
2.1 Annual Meeting. The Trust will not hold annual meetings of the
---------------
shareholders.
2.2 Special Meetings. A special meeting of the shareholders may be called at
-----------------
any time by the Trustees, by the president or, if the Trustees and the
president shall fail to call any meeting of shareholders for a period of 30
days after written application of one or more shareholders who hold at
least 10% of all shares issued and outstanding and entitled to vote at the
meeting, then such shareholders may call such meeting. Each call of a
meeting shall state the place, date, hour and purposes of the meeting.
2.3 Place of Meetings. All meetings of the shareholders shall be held at such
------------------
place within the United States as shall be designated by the Trustees or
the president of the Trust.
2.4 Notice of Meetings. A written notice of each meeting of shareholders,
-------------------
stating the place, date and hour and the purposes of the meeting, shall be
given at least seven days before the meeting to each shareholder entitled
1
<PAGE>
to vote thereat by leaving such notice with him or at his residence or
usual place of business or by mailing it, postage prepaid, and addressed to
such shareholder at his address as it appears in the records of the Trust.
Such notice shall be given by the secretary or an assistant secretary or by
an officer designated by the Trustees. No notice of any meeting of
shareholders need be given to a shareholder if a written waiver of notice,
executed before or after the meeting by such shareholder or his attorney
thereunto duly authorized, is filed with the records of the meeting.
2.5 Ballots. No ballot shall be required for any election unless requested by
--------
a shareholder present or represented at the meeting and entitled to vote
in the election.
2.6 Proxies. Shareholders entitled to vote may vote either in person or by
--------
proxy in writing dated not more than six months before the meeting named
therein, which proxies shall be filed with the secretary or other person
responsible to record the proceedings of the meeting before being voted.
Unless otherwise specifically limited by their terms, such proxies shall
entitle the holders thereof to vote at any adjournment of such meeting but
shall not be valid after the final adjournment of such meeting.
2.7 Eligible Shareholders. Only credit unions can invest in the Trust. Offers
---------------------
of investment from non-credit union parties must be refused. Any change in
this provision requires the vote of a majority of the outstanding shares of
the Trust.
Section 3. Trustees
3.1 Committees and Advisory Board. The Trustees may appoint from their number
------------------------------
an executive committee and other committees. Except as the Trustees may
otherwise determine, any such committee may make rules for conduct of its
business. The Trustees may appoint an advisory board to consist of not less
than two nor more than five members. The members of the advisory board
shall be compensated in such manner as the Trustees may determine and shall
confer with and advise the Trustees regarding the investments and other
affairs of the Trust. Each member of the advisory board shall hold office
until the first meeting of the Trustees following the next annual meeting
of the shareholders and until his successor is elected and qualified, or
until he sooner dies, resigns, is removed, or becomes disqualified, or
until the advisory board is sooner abolished by the Trustees.
2
<PAGE>
3.2 Regular Meetings. Regular meetings of the Trustees may be held without
-----------------
call or notice at such places and at such times as the Trustees may from
time to time determine, provided that notice of the first regular meeting
following any such determination shall be given to absent Trustees. A
regular meeting of the Trustees may be held without call or notice
immediately after and at the same place as the annual meeting of the
shareholders.
3.3 Special Meetings. Special meetings of the Trustees may be held at any time
-----------------
and at any place designated in the call of the meeting, when called by the
Chairman of the Board, the president or the treasurer or by two or more
Trustees, sufficient notice thereof being given to each Trustee by the
secretary or an assistant secretary or by the officer or one of the
Trustees calling the meeting.
3.4 Notice. It shall be sufficient notice to a Trustee to send notice by mail
-------
at least forty-eight hours or by telegram or facsimile transmission at
least twenty-four hours before the meeting addressed to the Trustee at his
or her usual or last known business or residence address or to give notice
to him or her in person or by telephone at least twenty-four hours before
the meeting. Notice of a meeting need not be given to any Trustee if a
written waiver of notice, executed by him or her before or after the
meeting, is filed with the records of the meeting, or to any Trustee who
attends the meeting without protesting prior thereto or at its commencement
the lack of notice to him or her. Neither notice of a meeting nor a waiver
of a notice need specify the purposes of the meeting.
3.5 Quorum. At any meeting of the Trustees one-third of the Trustees then in
-------
office shall constitute a quorum; provided, however, a quorum shall not be
less than two (unless at any time there is only one Trustee in office). Any
meeting may be adjourned from time to time by a majority of the votes cast
upon the question, whether or not a quorum is present, and the meeting may
be held as adjourned without further notice.
3.6 Shareholder Approval. All appointments of Trustees must be approved by a
--------------------
majority of the outstanding shares of the Trust as well as approval of the
National Credit Union Administration ("NCUA") prior to commencement of that
Trustees term.
Section 4. Officers and Agents
3
<PAGE>
4.1 Enumeration; Qualification. The officers of the Trust shall be a
---------------------------
president, a treasurer, a secretary and such other officers, if any, as the
Trustees from time to time may in their discretion elect or appoint. The
Trust may also have such agents, if any, as the Trustees from time to time
may in their discretion appoint. Any officer may be but none need be a
Trustee or shareholder. Any two or more offices may be held by the same
person.
4.2 Powers. Subject to the other provisions of these By-Laws, each officer
-------
shall have, in addition to the duties and powers herein and in the
Declaration of Trust set forth, such duties and powers as are commonly
incident to his or her office as if the Trust were organized as a
Massachusetts business corporation and such other duties and powers as the
Trustees may from time to time designate.
4.3 Election. The president, the treasurer and the secretary shall be elected
---------
annually by the Trustees. Other officers, if any, may be elected or
appointed by the Trustees at any time.
4.4 Tenure. The president, the treasurer and the secretary shall hold office
-------
for a one year term and until their respective successors are chosen and
qualified, or in each case until he or she sooner dies, resigns, is removed
or becomes disqualified. Each agent shall retain his or her authority at
the pleasure of the Trustees.
4.5 President and Vice Presidents. The president shall be the chief executive
------------------------------
officer of the Trust. The president shall, subject to the control of the
Trustees, have general charge and supervision of the business of the Trust.
Any vice president shall have such duties and powers as shall be designated
from time to time by the Trustees.
4.6 Chairman of the Board. If a Chairman of the Board of Trustees is elected,
----------------------
he shall have the duties and powers specified in these By-Laws and, except
as the Trustees shall otherwise determine, preside at all meetings of the
shareholders and of the Trustees at which he or she is present and have
such other duties and powers as may be determined by the Trustees.
4.7 Treasurer and Controller. The treasurer shall be the chief financial
-------------------------
officer of the Trust and subject to any arrangement made by the Trustees
with a bank or trust company or other organization as custodian or transfer
4
<PAGE>
or shareholder services agent, shall be in charge of its valuable papers
and shall have such other duties and powers as may be designated from time
to time by the Trustees or by the president. If at any time there shall be
no controller, the treasurer shall also be the chief accounting officer of
the Trust and shall have the duties and powers prescribed herein for the
controller. Any assistant treasurer shall have such duties and powers as
shall be designated from time to time by the Trustees.
The controller, if any be elected, shall be the chief accounting officer of
the Trust and shall be in charge of its books of account and accounting
records. The controller shall be responsible for preparation of financial
statements of the Trust and shall have such other duties and powers as may
be designated from time to time by the Trustees or the president.
4.8 Secretary and Assistant Secretaries. The secretary shall record all
------------------------------------
proceedings of the shareholders and the Trustees in books to be kept
therefor, which books shall be kept at the principal office of the Trust.
In the absence of the secretary from any meeting of shareholders or
Trustees, an assistant secretary, or if there be none or he or she is
absent, a temporary clerk chosen at the meeting shall record the
proceedings thereof in the aforesaid books.
Section 5. Resignation and Removals
Any Trustee, officer or advisory board member may resign at any time by
delivering his or her resignation in writing to the Chairman of the Board, the
president, the treasurer or the secretary or to a meeting of the Trustees. The
Trustees may remove any officer elected by them with or without cause by the
vote of a majority of the Trustees then in office. Except to the extent
expressly provided in a written agreement with the Trust, no Trustee, officer,
or advisory board member resigning, and no officer or advisory board member
removed shall have any right to any compensation for any period following his or
her resignation or removal, or any right to damages on account of such removal.
Section 6. Vacancies
A vacancy in any office may be filled at any time. Each successor shall hold
office for the unexpired term, and in the case of the president, the treasurer
and the secretary, until his or her successor is chosen and qualified, or in
each case until he or she sooner dies, resigns, is removed or becomes
disqualified.
5
<PAGE>
Section 7. Shares of Beneficial Interest
In lieu of issuing certificates for shares, the Trustees or the transfer or
shareholder services agent may either issue receipts therefor or may keep
accounts upon the books of the Trust for the record holders of such shares, who
shall in either case be deemed, for all purposes hereunder, to be the holders of
certificates for such shares as if they had accepted such certificates and shall
be held to have expressly assented and agreed to the terms hereof.
Section 8. Record Date
The Trustees may fix in advance a time, which shall not be more than 60 days
before the date of any meeting of shareholders or the date for the payment of
any dividend or making of any other distribution to shareholders, as the record
date for determining the shareholders having the right to notice and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution, and in such case only shareholders of record on such record
date shall have such right, notwithstanding any transfer of shares on the books
of the Trust after the record date.
Section 9. Seal
The seal of the Trust shall, subject to alteration by the Trustees, consist of a
flat-faced circular die with the word "Massachusetts", together with the name of
the Trust and the year of its organization, cut or engraved thereon; but, unless
otherwise required by the Trustees, the seal shall not be necessary to be placed
on, and its absence shall not impair the validity of, any document, instrument
or other paper executed and delivered by or on behalf of the Trust.
Section 10. Execution of Papers
Except as the Trustees may generally or in particular cases authorize the
execution thereof in some other manner, all deeds, leases, transfers, contracts,
bonds, notes, checks, drafts and other obligations made, accepted or endorsed by
the Trust shall be signed, and any transfers of securities standing in the name
of the Trust shall be executed by a Trustee or by the president or by one of the
vice presidents or by the treasurer or by whomsoever else shall be designated
for that purpose by the vote of the Trustees and need not bear the seal of the
Trust.
6
<PAGE>
Section 11. Fiscal Year
The fiscal year of the Trust shall end on such date in each year as the Trustees
shall from time to time determine.
Section 12. Provisions Relating to the Conduct of the Trust's Business
12.1 Dealings with Affiliates. The Trust shall not purchase or retain
-------------------------
securities issued by any issuer if one or more of the holders of the
securities of such issuer or one or more of the officers or directors of
such issuer is an officer or Trustee of the Trust or officer or director of
any organization, association or corporation with which the Trust has an
investment adviser's contract ("investment adviser"), if to the knowledge
of the Trust one or more of such officers or Trustees of the Trust or such
officers or directors of such investment advisers owns beneficially more
than one-half of one percent of the shares or securities of such issuer and
such officers, Trustees and directors owning more than on-half of one
percent of such shares or securities together own beneficially more than
five percent of such outstanding shares or securities. Each Trustee and
officer of the Trust shall give notice to the secretary of the identity of
all issuers whose securities are held by the Trust of which such officer or
Trustee owns as much as one-half of one percent of the outstanding
securities, and the Trust shall not be charged with the knowledge of such
holdings in the absence of receiving such notice if the Trust has requested
such information not less often than quarterly.
Subject to the provisions of the preceding paragraph, no officer, Trustee
or agent of the Trust and no officer, director or agent of any investment
adviser shall deal for or on behalf of the Trust with himself as principal
or agent, or with any partnership, association or corporation in which he
has a material financial interest; provided that the foregoing provisions
shall not prevent (a) officers and Trustees of the Trust from buying,
holding or selling shares in the Trust, or from being partners, officers or
directors of or financially interested in any investment adviser to the
Trust or in any corporation, firm or association which may at any time have
a distributor's or principal underwriter's contract with the Trust; (b)
purchases or sales of securities or other property if such transaction is
permitted by or is exempt or exempted from the provisions of the Investment
Company Act of 1940 or any Rule or Regulation thereunder and if such
transaction does not
7
<PAGE>
involve any commission or profit to any security dealer who is, or one or
more of whose partners, shareholders, officers or directors is, an officer
or Trustee of the Trust or an officer or director of the investment
adviser, administrator or principal underwriter of the Trust; (c)
employment of legal counsel, registrar, transfer agent, shareholder
services, dividend disbursing agent or custodian who is, or has a partner,
stockholder, officer or director who is, an officer or Trustee of the
Trust; (d) sharing statistical, research and management expenses, including
office hire and services, with any other company in which an officer or
Trustee of the Trust is an officer or director or financially interested.
12.2 Dealing in Securities of the Trust. The Trust, the investment adviser, any
-----------------------------------
corporation, firm or association which may at any time have an exclusive
distributor's or principal underwriter's contract with the Trust (the
"distributor") and the officers and Trustees of the Trust and officers and
directors of every investment adviser and distributor, shall not take long
or short positions in the securities of the Trust, except that:
(a) the distributor may place orders with the Trust for its shares
equivalent to orders received by the distributor;
(b) shares of the Trust may be purchased at not less than net asset value
for investment by the investment adviser and by officers and directors
of the distributor, investment adviser, or the Trust and by any trust,
pension, profit-sharing or other benefit plan for such persons, no such
purchase to be in contravention of any applicable state or federal
requirement.
12.3 Limitation on Certain Loans. The Trust shall not make loans to any
----------------------------
officer, Trustee or employee of the Trust or any investment adviser or
distributor or their respective officers, directors or partners or
employees.
12.4 Custodian. All securities and cash owned by the Trust shall be maintained
----------
in the custody of one or more banks or trust companies having (according to
its last published report) not less than two million dollars ($2,000,000)
aggregate capital, surplus and undivided profits (any such bank or trust
company is hereinafter referred to as the "custodian"); provided, however,
the custodian may deliver securities as collateral on borrowings effected
by the Trust, provided, that such delivery shall be conditioned upon
receipt of the borrowed funds by the custodian except where additional
collateral
8
<PAGE>
is being pledged on an outstanding loan and the custodian may deliver
securities lent by the Trust against receipt of initial collateral
specified by the Trust. Subject to such rules, regulations and orders, if
any, as the Securities and Exchange Commission may adopt, the Trust may
permit any custodian to, deposit all or any part of the securities owned by
the Trust in a system for the central handling of securities operated by
the Federal Reserve Banks, or established by a national securities exchange
or national securities association registered with said Commission under
the Securities Exchange Act of 1934, or such other person as may be
permitted by said Commission, pursuant to which system all securities of
any particular class or series of any issue deposited with the system are
treated as fungible and may be transferred or pledged by bookkeeping entry,
without physical delivery of such securities.
The Trust shall upon the resignation or inability to serve of its custodian
or upon change of the custodian:
(a) in the case of such resignation or inability to serve use its best
efforts to obtain a successor custodian;
(b) require that the cash and securities owned by the custodian be
delivered directly to the successor custodian; and
(c) in the event that no successor custodian can be found, submit to the
shareholders, before permitting delivery of the cash and securities
owned by this Trust otherwise than to a successor custodian, the
question whether or not this Trust shall be liquidated or shall
function without a custodian.
12.5 Limitations on Investment. Each series of shares may not invest in
--------------------------
securities other than those described in the Trust's then current
prospectus as appropriate for the series of shares for which such
securities are being purchased.
12.6 Determination of Net Asset Value. Determinations of net asset value made
--------------------------------
in good faith shall be binding on all parties concerned.
12.7 Reports to Shareholders; Distributions from Realized Gains. The Trust
-----------------------------------------------------------
shall send to each shareholder of record at least annually a statement of
the condition of the Trust and of the results of its operation, containing
9
<PAGE>
all information required by applicable laws or regulations.
12.8 Fundamental Policies. Any changes, modifications, or amendments to
--------------------
fundamental policies of the Trust require the approval of a majority of the
outstanding shares of the Trust as well as approval of NCUA.
Section 13. Amendments
These By-Laws may be amended or repealed, in whole or in part, by a majority of
the Trustees then in office at any meeting of the Trustees, or by one or more
writings signed by such majority.
10
<PAGE>
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 1st day of May, 1992, by and between CUFUND, a
Massachusetts business trust (the "Trust"), and Southwest Corporate Federal
Credit Union (the "Adviser").
WHEREAS, the Trust is an open-end, diversified management investment
company registered under the Investment Company Act of 1940 (the "1940 Act"), as
amended, consisting of several series of shares, each having its own investment
policies; and
WHEREAS, the Trust has retained SEI Financial Management Corporation (the
"Administrator") to provide administration of the Trust's operations, subject to
the control of the Board of Trustees of the Trust;
WHEREAS, the Trust desires to retain the Adviser to render investment
management services with respect to its Short-Term Maturity and Adjustable Rate
Portfolios and such other portfolios as the Trust and the Adviser may from time
to time 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 Adviser. The Trust employs the Adviser to manage the
-----------------
investment and reinvestment of the Trust's assets, and to continuously
review, supervise, and administer the investment program of the
Portfolios, to determine in its discretion the securities to be
purchased or sold, to provide the Administrator and the Trust with
records concerning the Adviser's activities which the Trust is required
to maintain, and to render regular reports to the Administrator and to
the Trust's officers and Trustees concerning the Adviser's discharge of
the foregoing responsibilities.
The Adviser shall discharge the foregoing responsibilities subject to
the control of the Board of Trustees of the Trust and in compliance
with such policies as the Trustees may from time to time establish, and
in compliance with the objectives, policies, and limitations for each
such Portfolio set forth in the Trust's current prospectus and
statement of additional information ("prospectus") 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 agrees to use its best
efforts to obtain the objectives as described in the prospectus from
time to time. The Adviser will promptly communicate to the
Administrator and to the officers and the Trustees of the Trust such
information relating to portfolio transactions as they may reasonably
request.
It is understood that the Adviser will not be deemed to have acted
unlawfully, or to have breached a fiduciary duty to the Trust or be in
breach of any obligation owing to the Trust under this Agreement, or
otherwise, solely by reason of its having directed a securities
transaction on behalf of the Trust to a broker-dealer in compliance
with the provisions of Section 28(e) of the Securities Exchange Act of
1934.
3. Compensation of the Adviser. For the services to be rendered by the
---------------------------
Adviser as provided in Sections 1 and 2 of this Agreement, the Trust
shall pay to the Adviser compensation at the rate specified in 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 preparing
--------------
(including typesetting), printing and mailing reports, prospectuses,
statements of additional information, and sales literature to
prospective clients.
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 are
qualified for offer and sale, the Adviser shall bear such excess cost.
2
<PAGE>
However, the Adviser will not bear expenses of the Trust or any
Portfolio which would result in the Trust'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 hereof 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 and statements of additional
information, 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 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 and to have other businesses and interests 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 Investment Company Act of 1940 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 Adviser. The duties of the Adviser shall be
----------------------------------
confined to those expressly set forth herein, and no implied duties are
assumed by or may be asserted against the Adviser hereunder. The
Adviser shall not be liable for any error of judgment or mistake of law
or for any loss arising out of any investment or for any act or
omission in carrying out its duties hereunder, except a loss resulting
from willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of reckless disregard of its
obligations and duties hereunder, except as may otherwise be provided
under provisions of applicable state law which cannot be waived or
modified hereby. (As used in this Section 9, the term "Adviser" shall
include directors, officers, employees and other corporate agents of
the Adviser as well as that corporation itself).
3
<PAGE>
So long as the Adviser acts in good faith and with due diligence and
without willful misfeasance, gross negligence or bad faith in the
performance of its duties, or by reason of reckless disregard of its
obligations and duties hereunder, the Trust assumes full responsibility
and agrees to and hereby does indemnify the Adviser and hold it
harmless from and against any and all actions, suits and claims,
whether groundless or otherwise, and from and against any and all
losses, damages, costs, charges, reasonable counsel fees and
disbursements, payments, expenses and liabilities (including reasonable
investigation expenses) arising directly or indirectly out of said
advisory relationship to the Trust or any other service rendered to the
Trust hereunder. The indemnity and defense provisions set forth herein
shall indefinitely survive the termination of this Agreement.
The Adviser's rights hereunder shall include the right to reasonable
advances of defense expenses in the event of any pending or threatened
litigation with respect to which indemnification hereunder may
ultimately be merited if a majority of the disinterested Trustees or
independent legal counsel determines that there is a reasonable belief
that indemnification ultimately will be permissible. However, if it is
ultimately determined that the Adviser is not entitled to
indemnification, all funds advanced must be returned to the Trust.
In order that the indemnification provision contained herein shall
apply, however, it is understood that if in any case the Trust may be
asked to indemnify or hold the Adviser harmless, a determination must
be made either by a vote of a majority of the disinterested Trustees or
by opinion of independent legal counsel that indemnification is
available. In addition, the Trust shall be fully and promptly advised
of all pertinent facts concerning the situation in question, and it is
further understood that the Adviser will use all reasonable care to
identify and notify the Trust promptly concerning any situation which
presents or appears likely to present the probability of such a claim
for indemnification against the Trust, but failure to do so in good
faith shall not affect the Adviser's rights hereunder.
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, members, or shareholders, or
otherwise; directors, partners, officers, agents, members, 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.
4
<PAGE>
11. 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
the 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.
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 or as amended, subject to
such exemptions as may be granted by the Securities and Exchange
Commission under said Act.
12. 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 or delivered by a courier service that
provides reasonable evidence of the date of actual delivery, 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 4455 LBJ Freeway, Suite 1012, P.O. Box 655147, Dallas, TX
75625-5147.
13. 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.
5
<PAGE>
14. Amendments. This Agreement may be amended by the parties hereto only
----------
if such amendment is specifically approved (i) by the vote of a
majority of the Trustees of the Trust, and (ii) by the vote of a
majority of the Trustees of the Trust who are not parties to this
Agreement or interested persons of any such party, cast in person at a
Board of Trustees meeting called for the purpose of voting on such
approval. No amendment shall become effective until submitted to and
approved by Shareholders under rules and regulations of the 1940 Act.
15. Governing Law. This Agreement shall be construed in accordance with
-------------
the laws of the Commonwealth of Massachusetts and the applicable
provisions of the 1940 Act. To the extent that the applicable laws of
the Commonwealth of Massachusetts, or any of the provisions herein,
conflict with the applicable provisions of the 1940 Act, the latter
shall control.
16. Multiple Originals. This Agreement may be executed in two or more
------------------
counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and
the same instrument.
A copy of the 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
not individually, and that the obligations of this instrument are not binding
upon any of the Trustees, officers, or shareholders of the Trust individually
but binding only upon the assets and property of the Trust.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as of the day and year first written above.
CUFUND
By: /s/ Sandra K. Orlow
-----------------------
Southwest Corporate Federal Credit Union
By: /s/ S. Keith Laycock
-----------------------
6
<PAGE>
Schedule A
to the
Investment Advisory Agreement
between
CUFUND
AND
SOUTHWEST CORPORATE FEDERAL CREDIT UNION
Pursuant to Article 3, the Trust shall pay the Adviser compensation at an annual
rate as follows:
Portfolio Fee
Short-Term Maturity .32%
Adjustable Rate .32%
7
<PAGE>
DISTRIBUTION AGREEMENT
CUFUND
THIS AGREEMENT is made as of this 1st day of May, 1992 between CUFUND, the
"Trust"), a Massachusetts business trust and SEI Financial Services Company (the
"Distributor"), a Pennsylvania corporation.
WHEREAS, the Trust is registered as an investment company with the
Securities and Exchange Commission ("SEC") under the Investment Company Act of
1940, as amended ("1940 Act"), and its Shares are registered with the SEC under
the Securities Act of 1933, as amended ("1933 Act"); and
WHEREAS, the Distributor is registered as a broker-dealer with the SEC
under the Securities Exchange Act of 1934, as amended;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the Trust and Distributor hereby agree as follows:
ARTICLE 1. Sale of Shares. The Trust grants to the Distributor the
--------------
exclusive right to sell Shares of the Trust at the net asset value per Share in
accordance with the current prospectus and statement of additional information
("prospectus"), as agent and on behalf of the Trust, during the term of this
Agreement and subject to the registration requirements of the 1933 Act, the
rules and regulations of the SEC and the laws governing the sale of securities
in the various states ("Blue Sky Laws").
ARTICLE 2. Solicitation of Sales. In consideration of these rights
---------------------
granted to the Distributor, the Distributor agrees to use all reasonable
efforts, consistent with its other business, in connection with the distribution
of Shares of the Trust; provided, however, that the Distributor shall not be
prevented from entering into like arrangements with other issuers. The
provisions of this paragraph do not obligate the Distributor to register as a
broker or dealer under the Blue Sky Laws of any jurisdiction when it determines
it would be uneconomical for it to do so or to maintain its registration in any
jurisdiction in which it is now registered nor obligate the Distributor to sell
any particular number of Shares.
1
<PAGE>
ARTICLE 3. Authorized Representations. The Distributor is not authorized
--------------------------
by the Trust to give any information or to make any representations other than
those contained in the current registration statements and prospectuses of the
Trust filed with the SEC or contained in Shareholder reports or other material
that may be prepared by or on behalf of the Trust for the Distributor's use. The
Distributor may prepare and distribute sales literature and other material as it
may deem appropriate, provided that such literature and materials have been
approved by the Trust prior to their use.
ARTICLE 4. Registration of Shares. The Trust agrees that it will take all
----------------------
action necessary to register Shares under the federal and state securities laws
so that there will be available for sale the number of Shares the Distributor
may reasonably be expected to sell and to pay all fees associated with said
registration. The Trust shall make available to the Distributor such number of
copies of its currently effective prospectus and statement of additional
information as the Distributor may reasonably request. The Trust shall furnish
to the Distributor copies of all information, financial statements and other
papers which the Distributor may reasonably request for use in connection with
the distribution of Shares of the Trust.
ARTICLE 5. Compensation. No compensation is paid to the Distributor for
------------
distribution services.
ARTICLE 6. Indemnification of Distributor. The Trust agrees to indemnify
------------------------------
and hold harmless the Distributor and each of its directors and officers and
each person, if any, who controls the Distributor within the meaning of Section
15 of the 1933 Act against any loss, liability, claim, damages or expense
(including the reasonable cost of investigating or defending any alleged loss,
liability, claim, damages, or expense and reasonable counsel fees and
disbursements incurred in connection therewith), arising by reason of any person
acquiring any Shares, based upon the ground that the registration statement,
prospectus, Shareholder reports or other information filed or made public by the
Trust (as from time to time amended) included an untrue statement of a material
fact or omitted to state a material fact required to be stated or necessary in
order to make the statements made not misleading. However, the Trust does not
agree to indemnify the Distributor or hold it harmless to the extent that the
statements or omission was made in reliance upon, and in conformity with,
information furnished to the Trust by or on behalf of the Distributor.
In no case (i) is the indemnity of the Trust to be deemed to protect the
Distributor against any liability to the Trust or its Shareholders to which the
Distributor or such person otherwise would be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
by reason of its reckless disregard of its obligations and duties under this
Agreement, or (ii) is the Trust to be liable to the Distributor under the
indemnity agreement contained in this paragraph with respect to any claim made
against the Distributor or any person indemnified unless the Distributor or
2
<PAGE>
other person shall have notified the Trust in writing of the claim within a
reasonable time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon the
Distributor or such other person (or after the Distributor or the person shall
have received notice of service on any designated agent). However, failure to
notify the Trust of any claim shall not relieve the Trust from any liability
which it may have to the Distributor or any person against whom such action is
brought otherwise than on account of its indemnity agreement contained in this
paragraph.
The Trust shall be entitled to participate at its own expense in the
defense or, if it so elects, to assume the defense of any suit brought to
enforce any claims subject to this indemnity provision. If the Trust elects to
assume the defense of any such claim, the defense shall be conducted by counsel
chosen by the Trust and satisfactory to the indemnified defendants in the suit
whose approval shall not be unreasonably withheld. In the event that the Trust
elects to assume the defense of any suit and retain counsel, the indemnified
defendants shall bear the fees and expenses of any additional counsel retained
by them. If the Trust does not elect to assume the defense of a suit, it will
reimburse the indemnified defendants for the reasonable fees and expenses of any
counsel retained by the indemnified defendants.
The Trust agrees to notify the Distributor promptly of the commencement of
any litigation or proceedings against it or any of its officers or Trustees in
connection with the issuance or sale of any of its Shares.
ARTICLE 7. Indemnification of Trust. The Distributor covenants and agrees
------------------------
that it will indemnify and hold harmless the Trust and each of its Trustees and
officers and each person, if any, who controls the Trust within the meaning of
Section 15 of the 1933 Act, against any loss, liability, damages, claim or
expense (including the reasonable cost of investigating or defending any alleged
loss, liability, damages, claim or expense and reasonable counsel fees incurred
in connection therewith) based upon the 1933 Act or any other statute or common
law and arising by reason of any person acquiring any Shares, and alleging a
wrongful act of the Distributor or any of its employees or alleging that the
registration statement, prospectus, statement of additional information,
Shareholder reports or other information filed or made public by the Trust (as
from time to time amended) included an untrue statement of a material fact or
omitted to state a material fact required to be stated or necessary in order to
make the statements not misleading, insofar as the statement or omission was
made in reliance upon and in conformity with information furnished to the Trust
by or on behalf of the Distributor.
In no case (i) is the indemnity of the Distributor in favor of the Trust or
any other person indemnified to be deemed to protect the Trust or any other
person against any liability to which the Trust or such other person would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement, or (ii) is the
Distributor to be liable under its indemnity agreement contained in this Article
with
3
<PAGE>
respect to any claim made against the Trust or any person indemnified unless the
Trust or person, as the case may be, shall have notified the Distributor in
writing of the claim within a reasonable time after the summons or other first
written notification giving information of the nature of the claim shall have
been served upon the Trust or upon any person (or after the Trust or such person
shall have received notice of service on any designated agent). However, failure
to notify the Distributor of any claim shall not relieve the Distributor from
any liability which it may have to the Trust or any person against whom the
action is brought otherwise than on account of its indemnity agreement contained
in this Article.
The Distributor shall be entitled to participate, at its own expense, in
the defense or, if it so elects, to assume the defense of any suit brought to
enforce the claim, but if the Distributor elects to assume the defense, the
defense shall be conducted by counsel chosen by the Distributor and satisfactory
to the indemnified defendants whose approval shall not be unreasonably withheld.
In the event that the Distributor elects to assume the defense of any suit and
retain counsel, the defendants in the suit shall bear the fees and expenses of
any additional counsel retained by them. If the Distributor does not elect to
assume the defense of any suit, it will reimburse the indemnified defendants in
the suit for the reasonable fees and expenses of any counsel retained by them.
The Distributor agrees to notify the Trust promptly of the commencement of
any litigation or proceedings against it in connection with the issue and sale
of any of the Trusts' Shares.
ARTICLE 8. Effective Date. This Agreement shall be effective upon its
--------------
execution, and unless terminated as provided, shall continue in force for one
year from the effective date and thereafter from year to year, provided that
such annual continuance is approved by (i) either the vote of a majority of the
Trustees of the Trust, or the vote of a majority of the outstanding voting
securities of the Trust, and (ii) 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 ("Qualified Trustees"), cast in person at a meeting called for the
purpose of voting on the approval. This Agreement shall automatically terminate
in the event of its assignment. As used in this paragraph the terms "vote of a
majority of the outstanding voting securities", "assignment" and "interested
person" shall have the respective meanings specified in the 1940 Act. In
addition, this Agreement may at any time be terminated without penalty by the
Distributor, by a vote of a majority of Qualified Trustees or by vote of a
majority of the outstanding voting securities of the Trust upon not less than
sixty days prior written notice to the other party.
ARTICLE 9. Notices. 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, Pennsylvania 19087,
and if to the Distributor, 680 East
4
<PAGE>
Swedesford Road, Wayne, Pennsylvania 19087.
ARTICLE 10. Limitation of Liability. A copy of the Declaration of Trust
-----------------------
of the Trust is on file with the Secretary of State of the Commonwealth of
Massachusetts, and notice is hereby given that this Agreement is executed on
behalf of the Trustees of the Trust as Trustees and not individually and that
the obligations of this instrument are not binding upon any of the Trustees,
officers or Shareholders of the Trust individually but binding only upon the
assets and property of the Trust.
ARTICLE 11. Governing Law. This Agreement shall be construed in
-------------
accordance with the laws of the Commonwealth of Massachusetts and the applicable
provisions of the 1940 Act. To the extent that the applicable laws of the
Commonwealth of Massachusetts, or any of the provisions herein, conflict with
the applicable provisions of the 1940 Act, the latter shall control.
ARTICLE 12. Multiple Originals. This Agreement may be executed in two or
------------------
more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
ARTICLE 13. Amendments. This Agreement may be amended by the parties
----------
hereto only if such amendment is specifically approved (i) by the vote of a
majority of the Trustees of the Trust, and (ii) by the vote of a majority of the
Trustees of the Trust who are not parties to this Agreement or interested
persons of any such party, cast in person at a Board of Trustees meeting called
for the purpose of voting on such approval. No amendment shall become effective
until submitted to and approved by Shareholders under rules and regulations of
the 1940 Act.
IN WITNESS, the Trust and Distributor have each duly executed this
Agreement, as of the day and year above written.
CUFUND
By: /s/ Sandra K. Orlow
--------------------------
SEI FINANCIAL SERVICES COMPANY
By: /s/ Carl A. Guarino
--------------------------
5
<PAGE>
CUSTODIAN AGREEMENT
This Agreement, dated as of the 1st day of May, 1992 by and between
CUFUND (the "Trust"), a business trust operating as an open-end investment
company, duly organized under the laws of the Commonwealth of Massachusetts and
CoreStates Bank N.A.;
WHEREAS, the Trust desires to deposit its cash and securities with
CoreStates Bank N.A. as custodian; and
WHEREAS, CoreStates Bank N.A. is qualified and authorized to act as
custodian for the cash and securities of an open-end investment company and is
willing to act in such capacity upon the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto, intending to be legally bound,
do hereby agree as follows:
SECTION 1. The terms as defined in this Section wherever used in this
- ----------
Agreement, or in any amendment or supplement hereto, shall have meanings herein
specified unless the context otherwise requires.
CUSTODIAN: The term Custodian shall mean CoreStates Bank N.A. in its capacity
as Custodian under this Agreement.
PROPER INSTRUCTIONS: For purposes of this Agreement the Custodian shall be
deemed to have received Proper Instructions upon receipt of written (including
instructions received by means of computer terminals), telephone or telegraphic
instructions from a person or persons authorized from time to time by the
Trustees of the Trust to give the particular class of instructions. Telephone or
telegraphic instructions shall be confirmed in writing by such person or persons
as said Trustees or said Board of Directors shall have from time to time
authorized to give the particular class of instructions in question. The
Custodian may act upon telephone or telegraphic instructions without awaiting
receipt of written confirmation, and shall not be liable for the Trust's or such
investment adviser's failure to confirm such instructions in writing.
SHAREHOLDERS: The term Shareholders shall mean the registered owners from time
to time of the Shares of the Trust in accordance with the registry records
maintained by
1
<PAGE>
the Trust or agents on its behalf.
SHARES: The term Shares of the Trust shall mean the units of beneficial
interest of the Trust.
SECTION 2. The Trust shall from time to time file with the Custodian a
- ----------
certified copy of each resolution of its Board of Trustees authorizing the
person or persons to give Proper Instructions (as defined in Section 1) and
specifying the class of instructions that may be given by each person to the
Custodian under this Agreement, together with certified signatures of such
persons authorized to sign, which shall constitute conclusive evidence of the
authority of the officers and signatories designated therein to act, and shall
be considered in full force and effect with the Custodian fully protected in
acting in reliance thereon until it receives written notice to the contrary;
provided, however, that if the certifying officer is authorized to give Proper
Instructions, the certification shall be also signed by a second officer of the
Trust.
SECTION 3. The Trust hereby appoints the Custodian as custodian of cash and
- ----------
securities from time to time on deposit hereunder, to be held by the Custodian
and applied as provided in this Agreement. The Custodian hereby accepts such
appointment subject to the terms and conditions hereinafter provided. Such cash
and securities shall, however, be segregated from the assets of others and shall
be and remain the sole property of the Trust and the Custodian shall have only
the bare custody thereof.
The Custodian may perform some or all of its duties hereunder through a
subcustodian.
The Custodian may deposit the Trust's portfolio securities with a U.S.
securities depository or in U.S. Federal book-entry systems pursuant to rules
and regulations of the Securities and Exchange Commission.
The Custodian will transmit to the Trust all reports that it receives from
Federal Reserve Banks and/or from securities depositories.
SECTION 4. The Trust will make an initial deposit of cash to be held and
- ----------
applied by the Custodian hereunder. Thereafter the Trust will cause to be
deposited with the Custodian hereunder the applicable net asset value of Shares
sold from time to time whether representing initial issue, other stock or
reinvestments of dividends and/or distributions payable to Shareholders.
SECTION 5. The Custodian is hereby authorized and directed to disburse cash
- ----------
from time to time upon receipt of and in accordance with Proper Instructions.
SECTION 6. The Custodian's compensation shall be as set forth in Schedule A
- ----------
hereto attached, or as shall be set forth in amendments to such schedule
approved by the Trust and the Custodian.
SECTION 7. In connection with its functions under this Agreement, the Custodian
- ----------
shall:
2
<PAGE>
(a) render to the Trust a daily report of all monies received or paid on
behalf of the Trust.
(b) create, maintain and retain all records relating to its activities
and obligations under this Agreement in such manner as will meet the
obligations of the Trust with respect to said Custodian's activities
in accordance with generally accepted accounting principles. All
records maintained by the Custodian in connection with the
performance of its duties under this Agreement will remain the
property of the Trust and in the event of termination of this
Agreement will be relinquished to the Trust.
SECTION 8. No liability of any kind shall be attached to or incurred by the
- ----------
Custodian by reason of its custody of the assets held by it from time to time
under this Agreement, or otherwise by reason of its position as Custodian
hereunder except only for its own negligence, bad faith, or willful misconduct
in the performance of its duties as specifically set forth in the Agreement.
Without limiting the generality of the foregoing sentence, the Custodian:
(a) may rely upon the advice of counsel, who may be counsel for the
Trust or for the Custodian, and upon statements of accountants,
brokers and other persons believed by it in good faith to be expert
in the matters upon which they are consulted; and for any action
taken or suffered in good faith based upon such advice or statements
the Custodian shall not be liable to anyone;
(b) shall not be liable for anything done or suffered to be done in good
faith in accordance with any request or advice of, or based upon
information furnished by, the Trust or its authorized officers or
agents;
(c) is authorized to accept a certificate of the Secretary or Assistant
Secretary of the Trust, or Proper Instructions, to the effect that a
resolution in the form submitted has been duly adopted by its Board
of Trustees or by the Shareholders, as conclusive evidence that such
resolution has been duly adopted and is in full force and effect;
(d) may rely and shall be protected in acting upon any signature,
written (including telegraph or other mechanical) instructions,
request, letter of transmittal, certificate, opinion of counsel,
statement, instrument, report, notice, consent, order, or other
paper or document reasonably believed by it to be genuine and to
have been signed, forwarded or presented by the purchaser, Trust or
other proper party or parties.
SECTION 9. The Trust, its successors and assigns hereby indemnify and hold
- ----------
harmless the Custodian, its successors and assigns, of and from any and all
liability whatsoever arising out of or in connection with the Custodian's
status, acts, or omissions under this
3
<PAGE>
Agreement, except only for liability arising out of the Custodian's own
negligence, bad faith, or willful misconduct in the performance of its duties
specifically set forth in this Agreement. Without limiting the generality of the
foregoing, the Trust, its successors and assigns do hereby fully indemnify and
hold harmless the Custodian its successors and assigns, from any and all loss,
liability, claims, demand, actions, suits and expenses of any nature as the same
may arise from the failure of the Trust to comply with any law, rule, regulation
or order of the United States, any state or any other jurisdiction, governmental
authority, body, or board relating to the sale, registration, qualification of
units of beneficial interest in the Trust, or from the failure of the Trust to
perform any duty or obligation under this Agreement.
Upon written request of the Custodian, the Trust shall assume the entire defense
of any claim subject to the foregoing indemnity, or the joint defense with the
Custodian of such claim, as the Custodian shall request. The indemnities and
defense provisions of this Section 9 shall indefinitely survive termination of
this Agreement.
SECTION 10. This Agreement may be amended from time to time without notice to
- -----------
or approval of the Shareholders by a supplemental agreement executed by the
Trust and the Custodian and amending and supplementing this Agreement in the
manner mutually agreed.
SECTION 11. Either the Trust or the Custodian may give one hundred twenty (120)
- -----------
days written notice to the other of the termination of this Agreement, such
termination to take effect at the time specified in the notice. In case such
notice of termination is given either by the Trust or by the Custodian, the
Trustees of the Trust shall, by resolution duly adopted, promptly appoint a
Successor Custodian which Successor Custodian shall be a bank, trust company, or
a bank and trust company in good standing, with legal capacity to accept custody
of the cash and securities of a mutual fund.
Upon receipt of written notice from the Trust of the appointment of such
successor and upon receipt of Proper Instructions, the Custodian shall deliver
such cash and securities as it may then be holding hereunder directly and only
to the Successor Custodian. Unless or until a Successor Custodian has been
appointed as above provided, the Custodian then acting shall continue to act as
Custodian under this Agreement.
Every Successor Custodian appointed hereunder shall execute and deliver an
appropriate written acceptance of its appointment and shall thereupon become
vested with the rights, powers, obligations and custody of its predecessor
Custodian. The Custodian ceasing to act shall nevertheless, upon request of the
Trust and the Successor Custodian and upon payment of its charges and
disbursements, execute an instrument in form approved by its counsel
transferring to the Successor Custodian all the predecessor Custodian's rights,
duties, obligations and custody.
4
<PAGE>
In case the Custodian shall consolidate with or merge into any other
corporation, the corporation remaining after or resulting from such
consolidation or merger shall ipso facto without the execution or filing of any
papers or other documents, succeed to and be substituted for the Custodian with
like effect as though originally named as such.
SECTION 12. This Agreement shall take effect when assets of the Trust are first
- -----------
delivered to the Custodian.
SECTION 13. This Agreement may be executed in two or more counterparts, each of
- -----------
which when so executed shall be deemed to be an original, but such counterparts
shall together constitute but one and the same instrument.
SECTION 14. A copy of the 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 not individually and that the obligations of this instrument are not binding
upon any of the Trustees, officers or Shareholders of the Trust individually,
but binding only upon the assets and property of the Trust.
SECTION 15. The Custodian shall create and maintain all records relating to its
- -----------
activities and obligations under this Agreement in such manner as will meet the
obligations of the Trust under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder,
applicable Federal and state tax laws and any other law or administrative rules
or procedures which may be applicable to the Trust.
Subject to security requirements of the Custodian applicable to its own
employees having access to similar records within the Custodian and such
regulations as to the conduct of such monitors as may be reasonably imposed by
the Custodian after prior consultation with an officer of the Trust the books
and records of the Custodian pertaining to its actions under this Agreement
shall be open to inspection and audit at any reasonable times by officers of,
attorneys for, and auditors employed by, the Trust.
SECTION 16. Nothing contained in this Agreement is intended to or shall require
- -----------
the Custodian in any capacity hereunder to perform any functions or duties on
any holiday or other day of special observance on which the Custodian is closed.
Functions or duties normally scheduled to be performed on such days shall be
performed on, and as of, the next business day the Custodian is open.
5
<PAGE>
SECTION 17. This Agreement shall extend to and shall be binding upon the
- -----------
parties hereto and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable by the Trust without the written
consent of the Custodian, or by the Custodian without the written consent of the
Trust, authorized or approved by a resolution of its Board of Trustees.
IN WITNESS WHEREOF, the Trust and the Custodian have caused this Agreement to be
signed by their respective officers as of the day and year first above written.
CUFUND
By: /s/ Sandra K. Orlow
----------------------------
Attest: /s/ Carl A. Guarino
------------------------
CoreStates Bank N.A.
By: /s/ Sheila E. Kavanagh
----------------------------
Attest: /s/ Rebecca B. Ley
------------------------
6
<PAGE>
SCHEDULE A
Fee Schedule
Effective April 1, 1991 the following fees will be charged to SEI-sponsored
mutual funds.
Market Value Fee Schedule
1.00 basis points on the first $2.5 billion
.75 basis points on the next $2.5 billion
.50 basis points on amounts over $5 billion
The above rates apply to the total month-end balances of all SEI-sponsored funds
combined together, net of repurchase agreements.
Transaction charges are billed separately for each portfolio at the then current
rate schedule.
Transaction fees as of 10/31/91:
$10.00 Per transaction clearing through Depository Trust
Company or the U.S. treasury book-entry systems.
$26.00 Per transaction for GNMA's physical delivery
securities, or other securities requiring special
handling.
$ 9.00 Mortgage-backed securities - paydowns.
$ 3.00 Fed wire on collateral.
$ 5.50/7.50 Other wire transfers in/out.
Transactions are defined as: all security purchases, sales, maturities,
redemptions, additions (after initial funding of account), exchanges,
conversions, withdrawals (including gifts and distribution of assets at
termination of account), and the wire transfer of funds not directly related to
an immediate purchase.
7
<PAGE>
Arthur Andersen LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the use in this
Registration Statement of our report dated July 3, 1996 included in the Post-
Effective Amendment No. 5 to the Registration Statement on Form N-1A of CUFUND
(No. 33-44293), and to all references to our Firm included in this Registration
Statement File No. 33-44293.
/s/ Arthur Andersen LLP
Philadelphia, Pa.
September 20, 1996
<PAGE>
MORGAN, LEWIS & BOCKIUS
COUNSELORS AT LAW WASHINGTON
PHILADELPHIA 2000 ONE LOGAN SQUARE NEW YORK
LOS ANGELES PHILADELPHIA, PENNSYLVANIA 19103-6993 HARRISBURG
MIAMI TELEPHONE: (215) 963-5000 SAN DIEGO
LONDON FAX: (215) 963-5299 BRUSSELS
FRANKFURT TOKYO
May 20, 1992
CUFund
2 Oliver Street
Boston, Massachusetts 02109
Gentlemen:
We are furnishing this opinion with respect to the proposed offer and
sale from time to time of units of beneficial interest, without par value (the
"Shares"), of CUFUND (the "Trust"), a Massachusetts business trust, being
registered under the Securities Act of 1933 and the Investment Company Act of
1940 by a Registration Statement on Form N-1A (File No. 33-44293) as amended
from time to time (the "Registration Statement").
We have acted as counsel to the Trust since its inception, and we are
familiar with the actions taken by its Trustees to authorize the issuance of the
Shares. We have reviewed the Agreement and Declaration of Trust, the By-Laws,
and the minute books of the Trust, and such other certificates, documents and
opinions of counsel as we deem necessary for the purpose of this opinion.
We have reviewed the Trust's Notification of Registration on Form N-8A
under the Investment Company Act of 1940. We have assisted in the preparation of
the Trust's Registration Statement, including all pre-effective amendments
thereto, filed or to be filed with the Securities and Exchange Commission.
We have assumed the appropriate action will be taken to register or
qualify the sale of the Shares under any applicable state and federal laws
regulating sales and offerings of securities.
Based upon the foregoing, we are of the opinion that:
1. The Trust is a business trust validly existing under the laws of
the Commonwealth of Massachusetts. The Trust is authorized to issue an unlimited
number of Shares in series representing interests in the Short-Term Maturity
Portfolio and
<PAGE>
[LETTERHEAD OF MORGAN, LEWIS & BOCKIUS APPEARS HERE]
CUFund
May 20, 1992
Page 2
the Adjustable Rate Portfolio of the Trust, and in such other series or classes
as the Trustees may hereafter duly authorize.
2. Upon the issuance of any Shares of any of the series or classes of the
Trust for payment therefor as described in the Prospectus and Statement of
Additional Information for such series or class filed as part of the
Registration Statement, the Shares so issued will be validly issued, fully paid
and nonassessable.
This opinion is intended only for your use in connection with the offering
of Shares and may not be relied upon by any other person.
We hereby consent to the inclusion of this opinion as Exhibit 10 to the
Trust's Registration Statement on Form N-1A to be filed with the Securities and
Exchange Commission and to the reference to our firm under the caption "Counsel
and Independent Accountant" in the Prospectus and Statement of Additional
Information filed as part of such Registration Statement.
Very truly yours,
/s/ Morgan, Lewis & Bockius
<PAGE>
ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of this 30th day of April, 1996, by and between
CUFUND, a Massachusetts business trust (the "Trust"), and SEI Financial
Management Corporation (the "Administrator"), a Delaware corporation.
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; and
WHEREAS, the Trust desires the Administrator to provide, and the
Administrator is willing to provide, management, administrative, transfer agent,
dividend disbursing agent and shareholder servicing services to such portfolios
of the Trust as the Trust and the Administrator may agree on (the "Portfolios")
and as listed on the schedules attached hereto (the "Schedules") and made a part
of this Agreement, on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Trust and the Administrator hereby agree as follows:
ARTICLE 1. Retention of the Administrator. The Trust hereby retains the
------------------------------
Administrator to act as the administrator of the Portfolios and to furnish the
Portfolios with the management, administrative, transfer agent, dividend
disbursing agent and shareholder servicing services as set forth below. The
Administrator hereby accepts such employment to perform the duties set forth
below.
The Administrator shall, for all purposes herein, be deemed to be an
independent contractor and, unless otherwise expressly provided or authorized,
shall have no authority to act for or represent the Trust in any way and shall
not be deemed an agent of the Trust.
ARTICLE 2. Transfer Agent Services. The Administrator will act as
-----------------------
transfer agent for the Portfolios' accounts and, as such, will record in an
account (the "Account") the total number of units of beneficial interest
("Shares") of each Portfolio issued and outstanding from time to time and will
maintain Share transfer records in which it will note the names and registered
addresses of Shareholders, and the number of Shares from time to time owned by
each of them. Each Shareholder will be assigned one or more account numbers.
The Administrator is authorized to set up accounts and record transactions in
the accounts on the basis of instructions received from Shareholders when
accompanied by remittance in appropriate amount as provided in the Portfolios'
then current prospectuses. The Trust will not issue certificates representing
Shares. Whenever Shares are purchased or issued, the Administrator shall credit
the Account with the Shares issued, and credit the proper number of Shares to
the appropriate Shareholder.
1
<PAGE>
The Trust warrants that it has or shall deliver to the Administrator, as
transfer agent:
(A) a copy of the Declaration of Trust and By-laws of the Trust,
incorporating all amendments thereto, certified by the Secretary or
Assistant Secretary of the Trust;
(B) an opinion of counsel to the Trust with respect to (i) the legality
and continuing existence of the Trust, (ii) the legality of its
outstanding Shares of beneficial interest, and (iii) the number of
Shares authorized for issuance and stating that upon issuance they
will be validly issued and nonassessable; and
(C) the Trust's Secretary's or Assistant Secretary's certificate as to the
authorized outstanding Shares of the Trust, its address to which
notices may be sent, the names and specimen signatures of its officers
who are authorized to sign instructions or requests to the
Administrator on behalf of the Trust, and the name and address of
legal counsel to the Trust. In the event of any future amendment or
change in respect of any of the foregoing, prompt written notification
of such change shall be given by the Trust to the Administrator,
together with copies of all relevant resolutions, instruments or other
documents, specimen signatures, certificates, opinions or the like as
the Administrator may deem necessary or appropriate.
ARTICLE 3. Dividend Disbursing Agent. The Administrator shall act as
-------------------------
dividend disbursing agent for the Portfolios' accounts and, as such, in
accordance with the provisions of the Trust's Declaration of Trust and the
Portfolios' then current prospectuses, shall prepare and wire or credit income
and capital gains distributions to Shareholders (or instruct the Custodian to do
so) after deducting any amount required to be withheld by any applicable tax
laws, rules and regulations or other applicable rules or regulations.
The Trust agrees that it shall promptly inform the Administrator of the
declaration of any dividend or distribution on Shares of any of its Portfolios,
and that on or before the payment date of a distribution, it shall instruct the
Custodian to make available, at the instruction of the dividend disbursing
agent, sufficient funds for the cash amount to be paid out. If a Shareholder is
entitled to receive additional Shares by virtue of any such distribution or
dividend, appropriate credits will be made to the Shareholder's account.
ARTICLE 4. Other Administrative Services. The Administrator shall perform
-----------------------------
or supervise the performance by others of other administrative services in
connection with the operations of the Portfolios, and, on behalf of the Trust,
will investigate, assist in the selection of and conduct relations with
custodians, depositories, accountants, legal counsel, underwriters, brokers and
dealers, corporate fiduciaries, insurers, banks and persons in any other
capacity deemed to be necessary or desirable for the Portfolios' operations. The
Administrator shall provide the Trustees of the Trust with such reports
regarding investment performance and compliance with investment policies and
applicable laws, rules and regulations as they may reasonably request but shall
have no responsibility for supervising the
2
<PAGE>
performance by any investment adviser or sub-adviser of its responsibilities.
The Administrator may appoint a sub-administrator to perform certain of the
services to be performed by the Administrator hereunder.
The Administrator shall provide the Trust with administrative services,
regulatory reporting, fund accounting and related portfolio accounting services,
all necessary office space, equipment, personnel, compensation and facilities
(including facilities for Shareholders' and Trustees' meetings) for handling the
affairs of the Portfolios and such other services as the Trustees may, from time
to time, reasonably request and the Administrator shall, from time to time,
reasonably determine to be necessary to perform its obligations under this
Agreement. In addition, at the request of the Trust's Board of Trustees (the
"Trustees"), the Administrator shall make reports to the Trustees concerning the
performance of its obligations hereunder.
Without limiting the generality of the foregoing, the Administrator shall:
(A) calculate contractual Trust expenses and control all disbursements for
the Trust, and as appropriate compute the Trust's yields, total
return, expense ratios, portfolio turnover rate and, if required,
portfolio average dollar-weighed maturity;
(B) assist Trust counsel with the preparation of prospectuses, statements
of additional information, registration statements, and proxy
materials;
(C) prepare such reports, applications and documents (including reports
regarding the sale and redemption of Shares as may be required in
order to comply with Federal and state securities law) as may be
necessary or desirable to register the Trust's shares with state
securities authorities, monitor sale of Trust shares for compliance
with state securities laws. and file with the appropriate state
securities authorities the registration statements and reports for the
Trust and the Trust's shares and all amendments thereto, as may be
necessary or convenient to register and keep effective the Trust and
the Trust's shares with state securities authorities to enable the
Trust to make a continuous offering of its shares;
(D) develop and prepare communications to shareholders, including the
annual report to shareholders, coordinate mailing prospectuses,
notices, proxy statements, proxies and other reports to Trust
shareholders, and supervise and facilitate the solicitation of proxies
solicited by the Trust for all shareholder meetings, including
tabulation process for shareholder meetings;
(E) coordinate with Trust counsel the preparation and negotiation of, and
administer contracts on behalf of the Trust with, among others, the
Trust's investment adviser, distributor, custodian, and transfer
agent;
3
<PAGE>
(F) maintain the Trust's general ledger and prepare the Trust's financial
statements, including expense accruals and payments, determine the net
asset value of the Trust's assets and of the Trust's shares, and
supervise the Trust's transfer agent with respect to the payment of
dividends and other distributions to shareholders;
(G) calculate performance data of the Trust and its portfolios for
dissemination to information services covering the investment company
industry;
(H) coordinate and supervise the preparation and filing of the Trust's tax
returns;
(I) examine and review the operations and performance of the various
organizations providing services to the Trust or any Portfolio of the
Trust, including, without limitation, the Trust's investment adviser,
distributor, custodian, transfer agent, outside legal counsel and
independent public accountants, and at the request of the Trustees,
report to the Trustees on the performance of organizations;
(J) assist with the layout and printing of publicly disseminated
prospectuses and assist with and coordinate layout and printing of the
Trust's semi-annual and annual reports to shareholders;
(K) provide internal legal and administrative services as requested by the
Trust from time to time;
(L) assist with the design, development, and operation of the Trust,
including new portfolio and class investment objectives, policies and
structure;
(M) advise the Trust and its Trustees on matters concerning the Trust and
its affairs;
(N) obtain and keep in effect fidelity bonds and directors and
officers/errors and omissions insurance policies for the Trust in
accordance with the requirements of Rules 17g-1 and 17d-1(7) under the
1940 Act as such bonds and policies are approved by the Trust's Board
of Trustees;
(O) monitor and advise the Trust and its Portfolios on their registered
investment company status under the Internal Revenue Code of 1986, as
amended;
(P) perform all administrative services and functions of the Trust and
each Portfolio to the extent administrative services and functions are
not provided to the Trust or such Portfolio pursuant to the Trust's or
such Portfolio's investment advisory agreement, distribution
agreement, custodian agreement and transfer agent agreement;
4
<PAGE>
(Q) furnish advice and recommendations with respect to other aspects of
the business and affairs of the Portfolios as the Trust and the
Administrator shall determine desirable; and
(R) prepare and file with the SEC the semi-annual report for the Trust on
Form N-SAR and all required notices pursuant to Rule 24f-2.
Also, the Administrator will perform other services for the Trust as agreed from
time to time, including, but not limited to performing internal audit
examinations; mailing the annual reports of the Portfolios; preparing an annual
list of shareholders; and mailing notices of shareholders' meetings, proxies and
proxy statements, for all of which the Trust will pay the Administrator's out-
of-pocket expenses.
ARTICLE 5. Allocation of Charges and Expenses.
----------------------------------
(A) The Administrator. The Administrator shall furnish at its own expense
-----------------
the executive, supervisory and clerical personnel necessary to perform its
obligations under this Agreement. The Administrator shall also provide the items
which it is obligated to provide under this Agreement, and shall pay all
compensation, if any, of officers of the Trust as well as all Trustees of the
Trust who are affiliated persons of the Administrator or any affiliated
corporation; provided, however, that unless otherwise specifically provided, the
Administrator shall not be obligated to pay the compensation of any employee of
the Trust retained by the Trustees of the Trust to perform services on behalf of
the Trust.
(B) The Trust. The Trust assumes and shall pay or cause to be paid all
---------
other expenses of the Trust not otherwise allocated herein, including, without
limitation, organizational costs, taxes, expenses for legal and auditing
services, the expenses of preparing (including typesetting), printing and
mailing reports, prospectuses, statements of additional information, proxy
solicitation material and notices to existing Shareholders, all expenses
incurred in connection with issuing and redeeming Shares, the cost of custodial
services, the cost of pricing services, the cost of initial and ongoing
registration of the Shares under Federal and state securities laws, fees and
out-of-pocket expenses of Trustees who are not affiliated persons of the
Administrator or any affiliated corporation, insurance, interest, brokerage
costs, litigation and other extraordinary or nonrecurring expenses, and all fees
and charges of investment advisers to the Trust.
ARTICLE 6. Compensation of the Administrator.
---------------------------------
(A) Administration Fee. For the services to be rendered, the facilities
------------------
furnished and the expenses assumed by the Administrator pursuant to this
Agreement, the Trust shall pay to the Administrator compensation at an annual
rate specified in the Schedules. Such compensation shall be calculated and
accrued daily, and paid to the Administrator monthly. The Trust shall also
reimburse the Administrator for its reasonable out-of-pocket expenses, including
the travel and lodging expenses
5
<PAGE>
incurred by officers and employees of the Administrator in connection with
attendance at Board meetings.
If this Agreement becomes effective subsequent to the first day of a month
or terminates before the last day of a month, the Administrator's compensation
for that part of the month in which this Agreement is in effect shall be
prorated in a manner consistent with the calculation of the fees as set forth
above. Payment of the Administrator's compensation for the preceding month shall
be made promptly.
(B) Compensation from Transactions. The Trust hereby authorizes any entity
------------------------------
or person associated with the Administrator which is a member of a national
securities exchange to effect any transaction on the exchange for the account of
the Trust which is permitted by Section 11 (a) of the Securities Exchange Act of
1934 and Rule 11a2-2(T) thereunder, and the Trust hereby consents to the
retention of compensation for such transactions in accordance with Rule 11a2-
2(T) (a) (2) (iv).
(C) Survival of Compensation Rates. All rights of compensation under this
------------------------------
Agreement for services performed as of the termination date shall survive the
termination of this Agreement.
ARTICLE 7. Limitation of Liability of the Administrator. The duties of the
--------------------------------------------
Administrator shall be confined to those expressly set forth herein, and no
implied duties are assumed by or may be asserted against the Administrator
hereunder. The Administrator 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
law which cannot be waived or modified hereby. (As used in this Article 7, the
term "Administrator" shall include directors, officers, employees and other
corporate agents of the Administrator as well as that corporation itself.)
So long as the Administrator acts in good faith and with due diligence and
without gross negligence, the Trust assumes full responsibility and shall
indemnify the Administrator and hold it harmless from and against any and all
actions, suits and claims, whether groundless or otherwise, and from and against
any and all losses, damages, costs, charges, reasonable counsel fees and
disbursements, payments, expenses and liabilities (including reasonable
investigation expenses) arising directly or indirectly out of said
administration, transfer agency, and dividend disbursing relationships to the
Trust or any other service rendered to the Trust hereunder. The indemnity and
defense provisions set forth herein shall indefinitely survive the termination
of this Agreement.
The rights hereunder shall include the right to reasonable advances of
defense expenses in the event of any pending or threatened litigation with
respect to which indemnification hereunder may ultimately be merited. In order
that the indemnification provision contained herein shall apply, however, it is
understood that if in any case the Trust may be asked to indemnify or hold the
Administrator harmless, the Trust shall be fully and promptly advised of all
pertinent facts concerning the situation in
6
<PAGE>
question, and it is further understood that the Administrator will use all
reasonable care to identify and notify the Trust promptly concerning any
situation which presents or appears likely to present the probability of such a
claim for indemnification against the Trust, but failure to do so in good faith
shall not affect the rights hereunder.
The Administrator may apply to the Trust at any time for instructions and
may consult counsel for the Trust or its own counsel and with accountants and
other experts with respect to any matter arising in connection with the
Administrator's duties, and the Administrator shall not be liable or accountable
for any action taken or omitted by it in good faith in accordance with such
instruction or with the opinion of such counsel, accountants or other experts.
Also, the Administrator shall be protected in acting upon any document
which it reasonably believes to be genuine and to have been signed or presented
by the proper person or persons. Nor shall the Administrator be held to have
notice of any change of authority of any officers, employee or agent of the
Trust until receipt of written notice thereof from the Trust.
ARTICLE 8. Activities of the Administrator. The services of the
-------------------------------
Administrator rendered to the Trust are not to be deemed to be exclusive. The
Administrator is free to render such services to others and to have other
businesses and interests. It is understood that Trustees, officers, employees
and Shareholders of the Trust are or may be or become interested in the
Administrator, as directors, officers, employees and shareholders or otherwise
and that directors, officers, employees and shareholders of the Administrator
and its counsel are or may be or become similarly interested in the Trust, and
that the Administrator may be or become interested in the Trust as a Shareholder
or otherwise.
ARTICLE 9. Duration and Termination of this Agreement. This Agreement
------------------------------------------
shall become effective on the date set forth in the Schedules and shall remain
in effect for the initial term of the Agreement (the "Initial Term") and each
renewal term thereof (each, a "Renewal Term"), each as set forth in the
Schedules, unless terminated in accordance with the provisions of this Article
9. This Agreement may be terminated only: (a) by the mutual written agreement
of the parties; (b) by the Administrator as of the date (the "Termination Date")
that concludes the Initial Term or any Renewal Term, as the case may be, upon
written notice delivered to the Trust at least 90 days prior to the Termination
Date; (c) by the Trust upon 90 days written notice provided that such notice is
given no more than 90 days prior to the date that concludes the Initial Term or
any Renewal Term; (d) by either party hereto on such date as is specified in
written notice given by the terminating party, in the event of a material breach
of this 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; (e) effective upon the liquidation of the Administrator; or (f)
as to any Portfolio or the Trust, effective upon the liquidation of such
Portfolio or the Trust, as the case may be. For purposes of this Article 10,
the term "liquidation" shall mean a transaction in which the assets of the
Administrator, the Trust or a Portfolio are sold or otherwise disposed of and
proceeds therefrom are distributed in cash to the shareholders in complete
liquidation of the interests of such shareholders in the entity.
7
<PAGE>
This Agreement shall not be assignable by the Administrator, without the
prior written consent of the Trust, except to an entity that is controlled by,
or under common control, with, the Administrator.
ARTICLE 10. Amendments. This Agreement may be amended by the parties
----------
hereto only if such amendment is specifically approved (i) by the vote of a
majority of the Trustees of the Trust, and (ii) by the vote of a majority of the
Trustees of the Trust who are not parties to this Agreement or interested
persons of any such party, cast in person at a Board of Trustees meeting called
for the purpose of voting on such approval.
For special cases, the parties hereto may amend such procedures set forth
herein as may be appropriate or practical under the circumstances, and the
Administrator may conclusively assume that any special procedure which has been
approved by the Trust does not conflict with or violate any requirements of its
Declaration of Trust, By-Laws or then current prospectuses, or any rule,
regulation or requirement of any regulatory body.
ARTICLE 11. Trustee's Liability. A copy of the Declaration of Trust is on
-------------------
file with the Secretary of State of the Commonwealth of Massachusetts, and
notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually and that the obligations
of this instrument are not binding upon any of the Trustees, officers or
Shareholders of the Trust individually, but binding only upon the assets and
property of the Trust.
ARTICLE 12. Certain Records. The Administrator shall maintain customary
---------------
records in connection with its duties as specified in this Agreement. Any
records required to be maintained and preserved pursuant to Rules 31a-1 and 31a-
2 under the 1940 Act which are prepared or maintained by the Administrator on
behalf of the Trust shall be prepared and maintained at the expense of the
Administrator, but shall be the property of the Trust and will be made available
to or surrendered promptly to the Trust on request.
In case of any request or demand for the inspection of such records by
another party, the Administrator shall notify the Trust and follow the Trust's
instructions as to permitting or refusing such inspection; provided that the
Administrator may exhibit such records to any person in any case where it is
advised by its counsel that it may be held liable for failure to do so, unless
(in cases involving potential exposure only to civil liability) the Trust has
agreed to indemnify the Administrator against such liability.
ARTICLE 13. Definitions of Certain Terms. The terms "interested person"
----------------------------
and "affiliated person," when used in this Agreement, shall have the respective
meanings specified in the 1940 Act and the rules and regulations thereunder,
subject to such exemptions as may be granted by the Securities and Exchange
Commission.
8
<PAGE>
ARTICLE 14. 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 Administrator at 680 East Swedesford Road, Wayne, PA 19087-1658.
ARTICLE 15. Governing Law. This Agreement shall be construed in
--------------
accordance with the laws of the Commonwealth of Massachusetts and the applicable
provisions of the 1940 Act. To the extent that the applicable laws of the
Commonwealth of Massachusetts, or any of the provisions herein, conflict with
the applicable provisions of the 1940 Act, the latter shall control.
ARTICLE 16. Multiple Originals. This Agreement may be executed in two or
------------------
more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
CUFUND
By: /s/ Todd Cipperman
------------------------------------
Attest: /s/ Brian J.Kelly
--------------------------------
SEI FINANCIAL MANAGEMENT CORPORATION
By: /s/ Kathyrn L. Stanton
------------------------------------
Attest: /s/ Brian J. Kelly
--------------------------------
9
<PAGE>
SCHEDULE
DATED April 30,1996
TO THE ADMINISTRATION AGREEMENT
DATED April 30, 1996
BETWEEN
CUFUND
AND
SEI FINANCIAL MANAGEMENT CORPORATION
Fees: Pursuant to Article 6, Section A, the Trust shall pay the
Administrator compensation for services rendered to the Short Term
Maturity Portfolio and Adjustable Rate Portfolio (the "Portfolios") at
an annual rate, which is calculated daily and paid monthly, which is
the greater of:
.09% of average daily net assets up to $750 million
.0725% of average daily net assets thereafter
or
$214,000
Term: Pursuant to Article 9, the term of this Agreement shall commence on
May 1, 1996 and shall remain in effect for one year ("Initial Term").
This Agreement shall continue in effect for successive periods of one
year subject to review annually by the Trustees, 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
nonbreaching party may immediately terminate this Agreement.
10
<PAGE>
ASSIGNMENT AND ASSUMPTION AGREEMENT
-----------------------------------
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT ("Agreement"), dated as of May 31,
1996, is made by and between SEI Financial Management Corporation
("Transferor"), and SEI Fund Resources ("Transferee"), with reference to the
following Recitals.
A. Transferor serves as the administrator to several facilities of mutual
funds pursuant to certain administration agreements with such funds;
B. Transferor has agreed to sell, transfer and deliver to Transferee
certain of its assets relating to its mutual fund administration business,
including the mutual fund administration agreements identified on Exhibit A
hereto; and
C. Transferee has agreed that at the time of the transfer of such assets,
it will assume all of Transferor's liabilities arising out of such
administration agreements.
NOW THEREFORE, in consideration of the terms and conditions of the
Agreement and other good and valuable consideration, the receipt of which is
hereby acknowledged, and intending to be legally bound, the parties hereto agree
as follows:
1. Transferor hereby grants, sells, conveys, transfers and delivers to
Transferee all of Transferor's right, title and interest in and to the assets
described in Schedule I attached hereto, including, without limitation, all of
its contracts, licenses and other documents or instruments by which Transferor
is bound and which are assumed hereby.
2. Transferee hereby assumes and agrees to perform or to pay or discharge
the obligations and liabilities of Transferor described on Schedule II hereto.
3. Nothing contained in this Agreement shall be deemed to confer any
rights or benefits upon any person not a party to the Agreement. This Agreement
shall inure to the benefit of and shall be binding upon the successors and
assigns of the respective parties. This Agreement shall be governed and
interpreted in accordance with the law of the Commonwealth of Pennsylvania
without reference to the conflicts of laws principles of such state.
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this instrument to be duly
executed as of the date first set forth above.
Attest: SEI Financial Management Corporation
/s/ Patricia Arizin By: /s/ Kevin P. Robins
- -------------------------------- ---------------------------------
Name: Kevin P. Robins
Title: Senior Vice President,
General Counsel & Secretary
Attest: SEI Fund Resources
/s/ Patricia Arizin By: /s/ Kevin P. Robins
- --------------------------------- ---------------------------------
Name: Kevin P. Robins
Title: Senior Vice President,
General Counsel & Secretary
<PAGE>
SCHEDULE I & II
<TABLE>
<CAPTION>
Agreement Type between SFM and: Date of Agreement
<S> <C> <C>
Administration Agreement The Arbor Fund August 1, 1994
Administration Agreement The Arbor Fund January 28, 1993 (as
amended and restated
May 17, 1994)
Administration Agreement The Advisors' Inner November 14, 1991
Circle Fund (as amended and
restated May 17, 1994)
Administration Agreement The ARK Funds November 1, 1995
Administration Agreement Marquis Funds August 17, 1993
Administration Agreement The PBHG Funds, Inc. September 10, 1993
(as amended and
restated August 8,
1994)
Administration Agreement STI Classic Variable August 18, 1995
Trust
Administration Agreement The Pillar Funds February 28, 1992 (as
amended and restated
May 25, 1993)
Administration Agreement 1784 Funds June 7, 1993
Administration Agreement CUFUND May 1, 1992
Administration Agreement CoreFunds, Inc. October 30, 1992
Administration Agreement THE ACHIEVEMENT FUNDS December 27, 1994
TRUST
Administration Agreement Inventor Funds, Inc. August 1, 1994
Administration Agreement Bishop Street Fund January 27, 1995
Administration Agreement Union Investors January 30, 1991
Portfolios
Administration Agreement The Monitor Funds January 11, 1996
</TABLE>
<PAGE>
PERFORMANCE QUOTATION COMPUTATION
This schedule is included to illustrate how yield and total return will be
calculated for the Short-Term Maturity and Adjustable Rate Maturity Portfolios.
The example presented utilize data from CUFund which has a fiscal year ending
December 31.
Yield = 2[(a-b/cd+1)/6/-1]
Short-Term Maturity Adjustable Rate Maturity
------------------- ------------------------
a= 304,428.39 915,804.00
b= 18,811.29 67,481.00
c= 5,187,092.911 14,670,030.00
d= 9.82 10.30
yield 6.82% 6.83%
Total Return = P(1+T)/n/=ERV
Short-Term Maturity Adjustable Rate Maturity
------------------- ------------------------
p= 1,000 1,000
n= 1 1
ERV= 1,099.88 1,133.10
T 9.98% 13.31%
<PAGE>
CUFUND
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or officer
of the above referenced funds (the "Trusts"), each a business trust organized
under the laws of The Commonwealth of Massachusetts, hereby constitutes and
appoints David G. Lee, Stephen G. Meyer and Carmen V. Romeo, and each of them
singly, his or her true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him or her and in his or her name,
place and stead, and in the capacity indicated below, to sign any or all
amendments (including post-effective amendments) to each Trust's Registration
Statement on Form N-1A under the provisions of the Investment Company Act of
1940 and the Securities Act of 1933, each such Act as amended, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-in-
fact and agents, and each of them, acting alone, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said attorneys-
in-fact and agents or any of them, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and seal as
of the date set forth below.
/s/ James L. Bryan Date: 9/7/95
- ---------------------- ------------
James L. Bryan
Trustee
<PAGE>
CUFUND
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or officer
of the above referenced funds (the "Trusts"), each a business trust organized
under the laws of The Commonwealth of Massachusetts, hereby constitutes and
appoints David G. Lee, Stephen G. Meyer and Carmen V. Romeo, and each of them
singly, his or her true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him or her and in his or her name,
place and stead, and in the capacity indicated below, to sign any or all
amendments (including post-effective amendments) to each Trust's Registration
Statement on Form N-1A under the provisions of the Investment Company Act of
1940 and the Securities Act of 1933, each such Act as amended, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-in-
fact and agents, and each of them, acting alone, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said attorneys-
in-fact and agents or any of them, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and seal as
of the date set forth below.
/s/ Gary L. Janacek Date: 9/7/95
- --------------------- ---------
Gary L. Janacek
Trustee
<PAGE>
CUFUND
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or officer
of the above referenced funds (the "Trusts"), each a business trust organized
under the laws of The Commonwealth of Massachusetts, hereby constitutes and
appoints David G. Lee, Stephen G. Meyer and Carmen V. Romeo, and each of them
singly, his or her true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him or her and in his or her name,
place and stead, and in the capacity indicated below, to sign any or all
amendments (including post-effective amendments) to each Trust's Registration
Statement on Form N-1A under the provisions of the Investment Company Act of
1940 and the Securities Act of 1933, each such Act as amended, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-in-
fact and agents, and each of them, acting alone, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said attorneys-
in-fact and agents or any of them, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and seal as
of the date set forth below.
/s/ Arno J. Easterly Date: 9/16/95
- ---------------------- -----------
Arno J. Easterly
Trustee
<PAGE>
CUFUND
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or officer
of the above referenced funds (the "Trusts"), each a business trust organized
under the laws of The Commonwealth of Massachusetts, hereby constitutes and
appoints David G. Lee, Stephen G. Meyer and Carmen V. Romeo, and each of them
singly, his or her true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him or her and in his or her name,
place and stead, and in the capacity indicated below, to sign any or all
amendments (including post-effective amendments) to each Trust's Registration
Statement on Form N-1A under the provisions of the Investment Company Act of
1940 and the Securities Act of 1933, each such Act as amended, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-in-
fact and agents, and each of them, acting alone, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said attorneys-
in-fact and agents or any of them, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and seal as
of the date set forth below.
/s/ Martha Romayne Seger Date: 9/7/95
- ------------------------- ----------
Dr. Martha Romayne Seger
Trustee
<PAGE>
CUFUND
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or officer
of the above referenced funds (the "Trusts"), each a business trust organized
under the laws of The Commonwealth of Massachusetts, hereby constitutes and
appoints David G. Lee, Stephen G. Meyer and Carmen V. Romeo, and each of them
singly, his or her true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him or her and in his or her name,
place and stead, and in the capacity indicated below, to sign any or all
amendments (including post-effective amendments) to each Trust's Registration
Statement on Form N-1A under the provisions of the Investment Company Act of
1940 and the Securities Act of 1933, each such Act as amended, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-in-
fact and agents, and each of them, acting alone, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said attorneys-
in-fact and agents or any of them, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and seal as
of the date set forth below.
/s/ Richard Helber Date: 9/13/95
- ------------------------- -------------
Richard Helber
Trustee
<PAGE>
CUFUND
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or officer
of the above referenced funds (the "Trusts"), each a business trust organized
under the laws of The Commonwealth of Massachusetts, hereby constitutes and
appoints David G. Lee and Carmen V. Romeo, and each of them singly, his or her
true and lawful attorney-in-fact and agent with full power of substitution and
resubstitution, to sign for him or her and in his or her name, place and stead,
and in the capacity indicated below, to sign any or all amendments (including
post-effective amendments) to each Trust's Registration Statement on Form N-1A
under the provisions of the Investment Company Act of 1940 and the Securities
Act of 1933, each such Act as amended, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, acting alone, full power and authority to do and perform each and every
act and thing requisite or necessary to be done in and about the premises, as
fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents or
any of them, or their substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and seal as
of the date set forth below.
/s/ Stephen G. Meyer Date: 9/10/95
- ---------------------- -------------
Stephen G. Meyer
Controller & Assistant Secretary
<PAGE>
CUFUND
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or officer
of the above referenced funds (the "Trusts"), each a business trust organized
under the laws of The Commonwealth of Massachusetts, hereby constitutes and
appoints Stephen G. Meyer and Carmen V. Romeo, and each of them singly, his or
her true and lawful attorney-in-fact and agent with full power of substitution
and resubstitution, to sign for him or her and in his or her name, place and
stead, and in the capacity indicated below, to sign any or all amendments
(including post-effective amendments) to each Trust's Registration Statement on
Form N-1A under the provisions of the Investment Company Act of 1940 and the
Securities Act of 1933, each such Act as amended, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, acting alone, full power and authority to do and
perform each and every act and thing requisite or necessary to be done in and
about the premises, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said attorneys-in-
fact and agents or any of them, or their substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and seal as
of the date set forth below.
/s/ David G. Lee Date: 9/10/95
- ------------------------- -------------
David G. Lee
Presidient & Chief Executive
Officer
<PAGE>
[ARTICLE] 6
[CIK] 0000881636
[NAME] CUFUND
[SERIES]
[NUMBER] 020
[NAME] SHORT-TERM MATURITY
[MULTIPLIER] 1,000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] MAY-31-1996
[PERIOD-START] JUN-01-1995
[PERIOD-END] MAY-31-1996
[INVESTMENTS-AT-COST] 30,934
[INVESTMENTS-AT-VALUE] 30,558
[RECEIVABLES] 148
[ASSETS-OTHER] 83
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 30,789
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 157
[TOTAL-LIABILITIES] 157
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 31,761
[SHARES-COMMON-STOCK] 3,140
[SHARES-COMMON-PRIOR] 3,603
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (752)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] (376)
[NET-ASSETS] 30,633
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 1,920
[OTHER-INCOME] 0
[EXPENSES-NET] (128)
[NET-INVESTMENT-INCOME] 1,792
[REALIZED-GAINS-CURRENT] (32)
[APPREC-INCREASE-CURRENT] 150
[NET-CHANGE-FROM-OPS] 1,910
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 1,790
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 62
[NUMBER-OF-SHARES-REDEEMED] (541)
[SHARES-REINVESTED] 15
[NET-CHANGE-IN-ASSETS] (4,537)
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 2
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 109
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 128
[AVERAGE-NET-ASSETS] 33,967
[PER-SHARE-NAV-BEGIN] 9.73
[PER-SHARE-NII] .52
[PER-SHARE-GAIN-APPREC] .03
[PER-SHARE-DIVIDEND] (.52)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 9.76
[EXPENSE-RATIO] .38
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
<PAGE>
[ARTICLE] 6
[CIK] 0000881636
[NAME] CUFUND
[SERIES]
[NUMBER] 010
[NAME] ADJUSTABLE RATE
[MULTIPLIER] 1,000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] MAY-31-1996
[PERIOD-START] JUN-01-1995
[PERIOD-END] MAY-31-1996
[INVESTMENTS-AT-COST] 153,113
[INVESTMENTS-AT-VALUE] 152,956
[RECEIVABLES] 1,151
[ASSETS-OTHER] 556
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 154,663
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 903
[TOTAL-LIABILITIES] 903
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 154,614
[SHARES-COMMON-STOCK] 15,431
[SHARES-COMMON-PRIOR] 16,314
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 23
[ACCUMULATED-NET-GAINS] (674)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] (157)
[NET-ASSETS] 153,760
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 9,944
[OTHER-INCOME] 0
[EXPENSES-NET] 614
[NET-INVESTMENT-INCOME] 9,330
[REALIZED-GAINS-CURRENT] (21)
[APPREC-INCREASE-CURRENT] 472
[NET-CHANGE-FROM-OPS] 9,781
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 9,334
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 502
[NUMBER-OF-SHARES-REDEEMED] (1,451)
[SHARES-REINVESTED] 66
[NET-CHANGE-IN-ASSETS] 8,834
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 19
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 505
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] (614)
[AVERAGE-NET-ASSETS] 157,685
[PER-SHARE-NAV-BEGIN] 9.94
[PER-SHARE-NII] .59
[PER-SHARE-GAIN-APPREC] .02
[PER-SHARE-DIVIDEND] (.59)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 9.96
[EXPENSE-RATIO] .39
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
