As filed with the Securities and Exchange Commission on November 13, 1996.
File No. 33-44712
File No. 811-6509
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20546
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 | |
POST-EFFECTIVE AMENDMENT NO. 9 |X|
and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 | |
AMENDMENT NO. 11 |X|
The Pillar Funds
(Exact Name of Registrant as Specified in Charter)
2 Oliver Street
Boston, Massachusetts 02109
(Address of Principal Executive Offices, Zip Code)
Registrant's Telephone Number, including Area Code (800) 932-7781
David G. Lee
c/o SEI Corporation
680 E. Swedesford Road
Wayne, Pennsylvania 19087-1658
(Name and Address of Agent for Service)
Copies to:
Richard W. Grant, Esquire
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, PA 19103
It is proposed that this filing will become effective (check appropriate box)
|_| immediately upon filing pursuant to Paragraph (b)
|_| on (date) pursuant to Paragraph (b)
|_| 60 days after filing pursuant to Paragraph (a)
|X| 75 days after filing pursuant to Paragraph (a)
|_| on (date) pursuant to Paragraph (a) of Rule 485
Registrant has elected to register an indefinite number of shares
pursuant to Regulation 24f-2 under the Investment Company Act of 1940.
Registrant filed its Rule 24f-2 notice on February 21, 1996.
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<PAGE>
THE PILLAR FUNDS
CROSS REFERENCE SHEET
N-1A ITEM NO. LOCATION
PART A--U.S. Treasury Securities Money Market Fund,
Prime Obligation Money Market Fund and
Tax-Exempt Money Market Fund--Class A
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Item 1. Cover Page .............................................. Cover Page
Item 2. Synopsis ................................................ Summary
Item 3. Condensed Financial Information ......................... Financial Highlights
Item 4. General Description of Registrant ....................... The Trust; Investment Objectives and
Policies; Investment Limitations;
Description of Permitted Investments
Item 5. Management of the Trust ................................. The Advisor; The Administrator; The
Shareholder Servicing Agent; The
Distributor; General Information--The
Trust; General Information--Trustees
of the Trust
Item 5A. Management's Discussion of Fund Performance.............. *
Item 6. Capital Stock and Other Securities ...................... Taxes; General Information--Dividends
Item 7. Purchase of Securities Being Offered .................... Cover Page; The Distributor; Purchase
and Redemption of Shares
Item 8. Redemption or Repurchase ................................ Purchase and Redemption of Shares
Item 9. Pending Legal Proceedings ............................... Not Applicable
PART A--U.S. Treasury Securities Money Market Fund,
Prime Obligation Money Market Fund and
Tax-Exempt Money Market Fund--Class B
Item 1. Cover Page .............................................. Cover Page
Item 2. Synopsis ................................................ Summary
Item 3. Condensed Financial Information ......................... Financial Highlights
Item 4. General Description of Registrant ....................... The Trust; Investment Objectives and
Policies; Investment Limitations;
Description of Permitted Investments
Item 5. Management of the Trust ................................. The Advisor; The Administrator; The
Shareholder Servicing Agent; The
Distributor; General Information--The
Trust; General Information--Trustees
of the Trust
Item 5A. Management's Discussion of Fund Performance.............. *
Item 6. Capital Stock and Other Securities ...................... Taxes; General Information--Dividends
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i
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N-1A ITEM NO. LOCATION
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Item 7. Purchase of Securities Being Offered .................... Cover Page; The Distributor; Purchase of
Shares
Item 8. Redemption or Repurchase ................................ Redemption of Shares
Item 9. Pending Legal Proceedings ................................ Not Applicable
PART A--Short-Term Investment Fund, Fixed Income Fund,
New Jersey Municipal Securities Fund, Pennsylvania Municipal Securities Fund,
Intermediate-Term Government Securities Fund and GNMA Fund--Class A
Item 1. Cover Page .............................................. Cover Page
Item 2. Synopsis ................................................ Summary
Item 3. Condensed Financial Information ......................... Financial Highlights
Item 4. General Description of Registrant ....................... The Trust; Investment Objectives and
Policies; Investment Limitations;
Description of Permitted
Investments
Item 5. Management of the Trust ................................. The Advisor; The Administrator; The
Shareholder Servicing Agent; The
Distributor; General Information--The
Trust; General Information--Trustees
of the Trust
Item 5A. Management's Discussion of Fund Performance ............. *
Item 6. Capital Stock and Other Securities ...................... Taxes; General Information--Dividends
Item 7. Purchase of Securities Being Offered .................... Cover Page; The Distributor; Purchase
and Redemption of Shares
Item 8. Redemption or Repurchase ................................ Purchase and Redemption of Shares
Item 9. Pending Legal Proceedings ............................... Not Applicable
PART A--Short-Term Investment Fund, Fixed Income Fund,
New Jersey Municipal Securities Fund, Pennsylvania Municipal Securities Fund,
Intermediate-Term Government Securities Fund and GNMA Fund--Class B
Item 1. Cover Page .............................................. Cover Page
Item 2. Synopsis ................................................ Summary
Item 3. Condensed Financial Information ......................... Financial Highlights
Item 4. General Description of Registrant ....................... The Trust; Investment Objectives and
Policies; Investment Limitations;
Description of Permitted
Investments
Item 5. Management of the Trust.................................. The Advisor; The Administrator; The
Shareholder Servicing Agent; The
Distributor; General Information--The
Trust; General Information--Trustees
of the Trust
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ii
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N-1A ITEM NO. LOCATION
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Item 5A. Management's Discussion of Fund Performance ............. *
Item 6. Capital Stock and Other Securities ...................... Taxes; General Information--Dividends
Item 7. Purchase of Securities Being Offered .................... Cover Page; The Distributor; Purchase
of Shares
Item 8. Redemption or Repurchase ................................ Redemption of Shares
Item 9. Pending Legal Proceedings ............................... Not Applicable
PART A--Equity Value, Equity Income Fund,
Mid Cap Value Fund, Balanced Growth Fund and International Growth Fund--Class A
Item 1. Cover Page .............................................. Cover Page
Item 2. Synopsis ................................................ Summary
Item 3. Condensed Financial Information ......................... Financial Highlights
Item 4. General Description of Registrant ....................... The Trust; Investment Objectives and
Policies; Investment Limitations;
Description of Permitted
Investments
Item 5. Management of the Trust ................................. The Advisor; The Sub-Advisor; The
Administrator; The Shareholder
Servicing Agent; The Distributor;
General Information--The Trust;
General Information--Trustees of the
Trust
Item 5A. Management's Discussion of Fund Performance ............. *
Item 6. Capital Stock and Other Securities ...................... Taxes; General Information--Dividends
Item 7. Purchase of Securities Being Offered .................... Cover Page; The Distributor; Purchase
and Redemption of Shares
Item 8. Redemption or Repurchase ................................ Purchase and Redemption of Shares
Item 9. Pending Legal Proceedings ............................... Not Applicable
PART A--Equity Value Fund, Equity Income Fund,
Mid Cap Value Fund, Balanced Growth Fund and International Growth Fund--Class B
Item 1. Cover Page .............................................. Cover Page
Item 2. Synopsis ................................................ Summary
Item 3. Condensed Financial Information ......................... Financial Highlights
Item 4. General Description of Registrant ....................... The Trust; Investment Objectives and
Policies; Investment Limitations;
Description of Permitted
Investments
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iii
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N-1A ITEM NO. LOCATION
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Item 5. Management of the Trust ................................. The Advisor; The Sub-Advisor; The
Administrator; The Shareholder
Servicing Agent; The Distributor;
General Information--The Trust;
General Information--Trustees of the
Trust
Item 5A. Management's Discussion of Fund Performance ............. *
Item 6. Capital Stock and Other Securities ...................... Taxes; General Information--Dividends
Item 7. Purchase of Securities Being Offered .................... Cover Page; The Distributor; Purchase of
Shares
Item 8. Redemption or Repurchase ................................ Redemption of Shares
Item 9. Pending Legal Proceedings ................................ Not Applicable
PART A--U.S. Treasury Securities Plus Money Market Fund
Item 1. Cover Page .............................................. Cover Page
Item 2. Synopsis ................................................ Summary
Item 3. Condensed Financial Information ......................... Financial Highlights
Item 4. General Description of Registrant ....................... The Trust; Investment Objectives and
Policies; Investment Limitations;
Description of Permitted
Investments
Item 5. Management of the Trust ................................. The Advisor; The Administrator; The
Shareholder Servicing Agent; The
Distributor; General Information--The
Trust; General Information--Trustees
of the Trust
Item 6. Capital Stock and Other Securities ...................... Taxes; General Information--Dividends
Item 7. Purchase of Securities Being Offered .................... Cover Page; The Distributor; Purchase
and Redemption of Shares
Item 8. Redemption or Repurchase ................................ Purchase and Redemption of Shares
Item 9. Pending Legal Proceedings ............................... Not Applicable
PART A--Equity Growth Fund--Class A
Item 1. Cover Page .............................................. Cover Page
Item 2. Synopsis ................................................ Summary
Item 3. Condensed Financial Information ......................... Financial Highlights
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iv
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N-1A ITEM NO. LOCATION
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Item 4. General Description of Registrant ....................... The Trust; Investment Objective and
Policies; Investment Limitations;
Description of Permitted Investments
Item 5. Management of the Trust ................................. The Advisor; The Administrator; The
Shareholder Servicing Agent; The
Distributor; General Information--The
Trust; General Information--Trustees
of the Trust
Item 5A. Management's Discussion of Fund Performance............. Not Applicable
Item 6. Capital Stock and Other Securities ...................... Taxes; General Information--Dividends
Item 7. Purchase of Securities Being Offered .................... Cover Page; The Distributor; Purchase
and Redemption of Shares
Item 8. Redemption or Repurchase ................................ Purchase and Redemption of Shares
Item 9. Pending Legal Proceedings ............................... Not Applicable
PART A--Equity Growth Fund--Class B
Item 1. Cover Page .............................................. Cover Page
Item 2. Synopsis ................................................ Summary
Item 3. Condensed Financial Information ......................... Financial Highlights
Item 4. General Description of Registrant ....................... The Trust; Investment Objective and
Policies; Investment Limitations;
Description of Permitted
Investments
Item 5. Management of the Trust ................................. The Advisor; The Administrator; The
Shareholder Servicing Agent; The
Distributor; General Information--The
Trust; General Information--Trustees
of the Trust
Item 5A. Management's Discussion of Fund Performance.............. Not Applicable
Item 6. Capital Stock and Other Securities ...................... Taxes; General Information--Dividends
Item 7. Purchase of Securities Being Offered .................... Cover Page; The Distributor; Purchase
and Redemption of Shares
Item 8. Redemption or Repurchase ................................ Purchase and Redemption of Shares
Item 9. Pending Legal Proceedings ............................... Not Applicable
PART B--All Funds except the Equity Growth Fund
Item 10. Cover Page ............................................. Cover Page
Item 11. Table of Contents ...................................... Table of Contents
Item 12. General Information and History ........................ General Information and History--The
Trust
Item 13. Investment Objectives and Policies ..................... Investment Objectives and Policies--
Description of Permitted Investments;
Investment Objective and Policies--
Investment Limitations
Item 14. Management of the Registrant ........................... General Information--Trustees of the
Trust (Prospectus); Management of the
Trust--Trustees and Officers of the
Trust; Management of the Trust--The
Administrator
Item 15. Control Persons and Principal Holders of Securities .... Management of the Trust--Trustees and
Officers of the Trust
Item 16. Investment Advisory and Other Services ................. Management of the Trust--The Advisor;
Management of the Trust--The Sub-
Advisor: Management of the Trust--
The Administrator; The Distributor
and Distribution Plans; Shareholder
Services; Experts
Item 17. Brokerage Allocation and Other Practices ............... Fund Transactions--General; Fund
Transactions--Trading Practices and
Brokerage
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v
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N-1A ITEM NO. LOCATION
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Item 18. Capital Stock and Other Securities ..................... General Information and History--
Description of Shares
Item 19. Purchase, Redemption, and Pricing of
Securities Being Offered.............................. Purchase and Redemption of Shares
(Prospectus and Statement of
Additional Information);
Determination of Net Asset Value
Item 20. Tax Status ............................................. Taxes (Prospectus and Statement of
Additional Information)
Item 21. Underwriters ........................................... The Distributor and Distribution Plans
Item 22. Calculation of Performance Data ........................ Performance--Computation of Yield;
Performance--Calculation of Total
Return
Item 23. Financial Statements ................................... Financial Information--Financial
Statements
PART B--Equity Growth Fund
Item 10. Cover Page ............................................. Cover Page
Item 11. Table of Contents ...................................... Table of Contents
Item 12. General Information and History ........................ General Information and History--The
Trust
Item 13. Investment Objectives and Policies ..................... Investment Objective and Policies--
Description of Permitted Investments;
Investment Objective and Policies--
Investment Limitations
Item 14. Management of the Registrant ........................... General Information--Trustees of the
Trust (Prospectus); Management of the
Trust--Trustees and Officers of the
Trust; Management of the Trust--The
Administrator
Item 15. Control Persons and Principal Holders of
Securities............................................ Management of the Trust--Trustees and
Officers of the Trust
Item 16. Investment Advisory and Other Services ................. Management of the Trust--The Advisor;
Management of the Trust--The
Administrator; The Distributor and
Distribution Plans; Shareholder
Services; Experts
Item 17. Brokerage Allocation and Other Practices ............... Fund Transactions--General; Fund
Transactions--Trading Practices and
Brokerage
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vi
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N-1A ITEM NO. LOCATION
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Item 18. Capital Stock and Other Securities ..................... General Information and History--
Description of Shares
Item 19. Purchase, Redemption, and Pricing of
Securities Being Offered.............................. Purchase and Redemption of Shares
(Prospectus and Statement of
Additional Information);
Determination of Net Asset Value
Item 20. Tax Status ............................................. Taxes (Prospectus and Statement of
Additional Information)
Item 21. Underwriters ........................................... The Distributor and Distribution Plans
Item 22. Calculation of Performance Data ........................ Performance--Computation of Yield;
Performance--Calculation of Total
Return
Item 23. Financial Statements ................................... Financial Information--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.
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* Information required by Item 5A is contained in the 1995 Annual Report to
Shareholders.
vii
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A POST-
EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS BEEN FILED WITH THE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY
BE ACCEPTED PRIOR TO THE TIME THE POST-EFFECTIVE AMENDMENT TO THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO
SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY
SUCH STATE.
PROSPECTUS DATED NOVEMBER 14, 1996
SUBJECT TO COMPLETION
THE PILLAR FUNDS
Investment Advisor:
SUMMIT BANK INVESTMENT MANAGEMENT DIVISION,
A DIVISION OF SUMMIT BANK
THE PILLAR FUNDS (the 'Trust') consist of mutual fund portfolios seeking to
provide a convenient and economical means of investing in one or more
professionally managed portfolios of securities. This Prospectus relates to the
following equity fund (the 'Fund'):
o EQUITY GROWTH FUND
CLASS A
The Trust's Class A Shares are offered without distribution fees (i) to
institutional investors (including Summit Bank, its affiliates and correspondent
banks) for the investment of their own funds, (ii) to any individual or
institution (including Summit Bank, its affiliates and correspondent banks) for
the investment of funds held by such individual or institution in a fiduciary,
agency, custodial or other representative capacity, if such individual or
institution is able to provide complete shareholder recordkeeping services with
respect to shares purchased and held in such capacity, and (iii) any qualified
customer who has entered into an agreement with Summit Bank, its affiliates or
correspondent banks ('Qualified Customers') (persons who own of record Class A
shares of the Fund are referred to herein as 'Shareholders').
CLASS A SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR INSURED,
ENDORSED OR GUARANTEED BY, ANY BANK (INCLUDING SUMMIT BANK OR ITS AFFILIATES
OR CORRESPONDENTS), ANY STATE OR STATE AGENCY, THE FEDERAL DEPOSIT INSURANCE
CORPORATION (FDIC), THE U.S. GOVERNMENT OR ANY U.S. GOVERNMENT AGENCY.
AMOUNTS INVESTED IN THE FUND ARE SUBJECT TO INVESTMENT RISKS, INCLUDING
POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
This Prospectus sets forth concisely the information about the Trust that a
prospective investor should know before investing. Investors are advised to read
this Prospectus and retain it for future reference. A Statement of Additional
Information dated , has been filed with the Securities and
Exchange Commission and is available without charge through the Distributor, SEI
Financial Services Company, 680 East Swedesford Road, Wayne, PA 19087-1658 or by
calling 1-800-932-7782. The Statement of Additional Information is incorporated
into this Prospectus by reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION 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 PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
__________ __, ____
CLASS A
<PAGE>
2
SUMMARY
THE PILLAR FUNDS (THE 'TRUST') CONSIST OF OPEN-END MANAGEMENT INVESTMENT
COMPANIES WHICH PROVIDE A CONVENIENT WAY TO INVEST IN PROFESSIONALLY MANAGED
PORTFOLIOS OF SECURITIES. THE FOLLOWING PROVIDES BASIC INFORMATION ABOUT THE
CLASS A SHARES OF THE TRUST'S EQUITY GROWTH FUND (THE 'FUND').
What is the Investment Objective? The investment objective of the Fund is
long-term growth of capital. There is no assurance that the Fund will meet its
investment objective. See 'Investment Objective and Policies.'
What are the Permitted Investments? The Fund invests in equity securities
consisting of (i) common stocks; (ii) warrants to purchase common stocks; (iii)
securities convertible into common stocks; and (iv) American Depositary Receipts
('ADRs'), European Depositary Receipts ('EDRs'), Continental Depositary Receipts
('CDRs') and Global Depositary Receipts ('GDRs'). The Fund may also invest in
certain fixed income securities. Because securities fluctuate in value, the
shares of the Fund will also fluctuate in value. The Fund's investment in
securities of foreign issuers will subject the Fund to risks associated with
foreign investments. The Fund may also invest in options, futures contracts and
options on futures contracts. See 'Investment Objective and Policies,' 'General
Investment Policies,' 'Risk Factors,' and 'Description of Permitted
Investments.'
Who is the Advisor? Summit Bank Investment Management Division, a division
of Summit Bank, serves as the Advisor of the Trust. See 'The Advisor.'
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 acts as dividend
disbursing agent, shareholder servicing agent and transfer agent for the Trust.
See 'The Shareholder Servicing Agent.'
Who is the Distributor? SEI Financial Services Company acts as distributor
of the Trust's shares. See 'The Distributor.'
How do I Purchase and Redeem Shares? 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 ('Business Day'). Except
in the case of Qualified Customers, a purchase order will be effective as of the
Business Day received by the Distributor if the Distributor receives an order
prior to 4:00 p.m., Eastern time. However, an order may be cancelled if Summit
Bank (the 'Custodian') does not receive federal funds before 12:00 noon, 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 effective that day.
With respect to Qualified Customers, purchase orders will be effective as of the
Business Day received by the Distributor if the Distributor receives the order
and payment prior to 4:00 p.m., Eastern time, on such Business Day. The purchase
and redemption price for shares is the net asset value per share determined as
of the end of the day the order is effective. See 'Purchase and Redemption of
Shares.'
How are Dividends Paid? Substantially all of the net investment income
(exclusive of capital gains) of the Fund is distributed in the form of quarterly
dividends to Shareholders of record on the next to last Business Day of each
quarter. Any capital gain is distributed at least annually. Distributions are
paid in additional shares unless the Shareholder elects to take the payment in
cash. See 'Dividends.'
<PAGE>
3
EXPENSE SUMMARY
ANNUAL OPERATING EXPENSES CLASS A
(As a percentage of average net assets)
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EQUITY
GROWTH
FUND
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Advisory Fees (after fee waivers)(1).............................................................. .50%
Other Expenses(2)................................................................................. .30%
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Total Operating Expenses (after fee waivers)(3)................................................... .80%
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(1) The Advisor has agreed to voluntarily waive a portion of its fees in an
amount that operates to limit total operating expenses of Class A shares of
the Fund to not more than .80% of average daily net assets. The Advisor
reserves the right to terminate its fee waiver at any time in its sole
discretion.
(2) Other Expenses are based on estimated amounts for the current fiscal year.
(3) Absent fee waivers for the Fund, the Advisory Fee would be .75%, and Total
Operating Expenses would be 1.05% of the Fund's average daily net assets.
Additional information may be found under 'The Advisor,' 'The Administrator'
and 'The Distributor.'
EXAMPLE
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1YR. 3 YRS.
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An investor in the Fund would pay the following expenses on a $1,000 investment
assuming (1) 5% annual return and (2) redemption at the end of each time period:
Equity Growth Fund........................................................................................ $ 8 $ 26
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</TABLE>
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 the Fund. The information set forth in the foregoing table
and example relates only to Class A shares. The Trust also offers Class B shares
of the Fund, which are subject to the same expenses plus a sales load and
certain distribution costs. Financial institutions may impose separate fees for
account services on their Qualifed Customers and on customers for which they are
the record owner of shares for the account. In addition, a wire redemption
charge of $10.00 is imposed for each redemption by wire. Additional information
may be found under 'The Advisor,' 'The Administrator,' 'The Shareholder
Servicing Agent' and 'The Distributor.'
<PAGE>
4
THE TRUST
THE PILLAR FUNDS (the 'Trust') is an open-end management investment company that
consists of diversified and non-diversified portfolios. The Trust offers units
of beneficial interest ('shares') in sixteen separate investment portfolios.
Shareholders may purchase shares in each portfolio (except for the U.S. Treasury
Securities Plus Money Market Fund) through two separate classes of shares (Class
A and Class B) which provide for variations in distribution costs, voting
rights, sales load, minimum investment, redemption fees, transfer agency fees
and dividends. Except for these differences between classes, each share of each
portfolio represents an undivided proportionate interest in that portfolio. This
Prospectus relates to the Class A shares of the Trust's Equity Growth Fund (the
'Fund'), a diversified mutual fund. Information regarding the Trust's other
portfolios and the Class B shares of the Fund is contained in separate
prospectuses that may be obtained from the Trust's Distributor, SEI Financial
Services Company, 680 East Swedesford Road, Wayne, Pennsylvania 19087 or by
calling 1-800-932-7782.
SHARES OF THE TRUST ARE NOT DEPOSITS, OBLIGATIONS OR ACCOUNTS (TRUST OR
OTHERWISE) OF, OR INSURED, GUARANTEED, OR ENDORSED BY, ANY BANK (INCLUDING
SUMMIT BANK OR ITS AFFILIATES OR CORRESPONDENTS), ANY STATE OR STATE AGENCY, THE
FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC), THE U.S. GOVERNMENT OR ANY U.S.
GOVERNMENT AGENCY.
SHARES OF THE TRUST ARE SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF
THE PRINCIPAL AMOUNT INVESTED. SEE 'INVESTMENT OBJECTIVE AND POLICIES--RISK
FACTORS.'
INVESTMENT OBJECTIVE AND POLICIES
THE EQUITY GROWTH FUND
The investment objective of the Fund is long-term growth of capital. There is no
assurance that the investment objective will be met.
The Fund will normally be as fully invested as practicable in equity securities
consisting of common stocks, warrants to purchase common stocks, debt securities
and preferred stocks that are convertible into common stocks and ADRs, EDRs,
CDRs and GDRs. The Advisor will invest in companies that it expects will
demonstrate greater long-term earnings growth than the average company included
in the Standard & Poor's 500 Composite Index (the 'S&P 500 Index'). This method
of investing is based upon the premise that growth in a company's earnings will
eventually translate into growth in the price of its stock.
To the extent that the Fund is not invested in equity securities, the Fund may
invest in the following fixed income securities: obligations issued or
guaranteed as to principal and interest by the U.S. Government, its agencies or
instrumentalities ('U.S. Government Securities'); corporate bonds and debentures
rated in one of the three highest rating categories by a nationally recognized
statistical ratings organization (an 'NRSRO') or determined by the Advisor to be
of comparable quality at the time of purchase, except that as part of its
investment strategy, the Fund may invest up to 5% of its total assets in lower
rated bonds, commonly referred to as 'junk bonds,' rated B or higher by an NRSRO
or determined to be of comparable quality by the Advisor; mortgage-backed
securities consisting of collateralized mortgage obligations ('CMOs') and real
estate mortgage investment conduits ('REMICs') that are rated in one of the top
two rating categories by an NRSRO and which are backed solely by GNMA
certificates or other mortgage pass-throughs issued or guaranteed by the U.S.
Government, its agencies or instrumentalities; and asset-backed securities
secured by company receivables, truck and auto loans, leases and credit card
receivables that are rated in one of the top two rating categories by an NRSRO.
The Fund may also employ certain hedging, income enhancement and risk management
techniques, including the purchase and sale of exchange-listed and
over-the-counter options, futures and options on futures involving equity and
debt securities, aggregates of equity and debt securities and other financial
indices. The Fund may write options and invest in futures only on a covered
basis. For a description of the Fund's permitted investments, see 'Description
of Permitted Investments.'
<PAGE>
5
GENERAL INVESTMENT POLICIES
For temporary defensive purposes during periods when the Advisor determines that
market conditions warrant, the Fund may invest up to 100% of its assets in the
following money market instruments: short-term U.S. Government Securities;
custodial receipts evidencing separately traded interest and principal
components of securities issued by the U.S. Treasury; commercial paper rated in
the highest short-term rating category by an NRSRO or determined by the Advisor
to be of comparable quality at the time of purchase; short-term bank obligations
(certificates of deposit, time deposits and bankers' acceptances) of U.S.
commercial banks with assets of at least $1 billion as of the end of their most
recent fiscal year; and repurchase agreements involving such securities. The
Fund may hold cash for liquidity purposes. To the extent the Fund is engaged in
temporary defensive investing, it will not be pursuing its investment objective.
Securities purchased by the Fund may involve floating or variable interest rates
and may be acquired through a forward commitment or on a when-issued basis.
In addition, the Fund reserves the right to engage in securities lending but has
no present intention to do so. The Fund will purchase equity securities,
including ADRs, that are traded in the United States on registered exchanges or
the over-the-counter market. However, the Fund reserves the right to invest up
to 25% of its assets in foreign equity securities denominated in foreign
currency and traded on foreign markets, although it currently has no intention
to do so.
RISK FACTORS
Because the Fund invests in equity securities, its shares will fluctuate in
value. The market value of the convertible securities purchased by the Fund may
also be affected by changes in interest rates, the credit quality of the issuer
and any call provisions.
The market value of the Fund's fixed income securities will fluctuate in
response to interest rate changes and other factors. See, 'Description of
Permitted Investments.' The Fund may invest in junk bonds. These securities are
speculative and are subject to a greater risk of loss of principal and interest
than are investments in higher rated bonds.
The Fund's investments in securities of foreign issuers may subject the Fund to
different risks than those attendant to investments in securities of U.S.
issuers, such as differences in accounting, auditing and financial reporting
standards, the possibility of expropriation or confiscatory taxation, political
instability and greater fluctuations in value due to changes in currency
exchange rates. There may also be less publicly available information with
regard to foreign issuers than domestic issuers. In addition, foreign markets
may be characterized by less liquidity, greater price volatility, less
regulation and higher transaction costs than U.S. markets. Moreover, the
dividends payable on the Fund's foreign securities may be subject to foreign
withholding taxes, thus reducing the net amount of income available for
distribution to the Fund's Shareholders.
The Fund may invest in options and futures. There are various risks associated
with options and futures, including that the success of a particular hedging,
income enhancement or risk management technique may depend on an ability to
predict accurately movements in security prices, interest rates or currency
exchange rates; there may be little correlation between the changes in a
security's value and the price of futures or options; a related future or option
may not be liquid; an exchange may impose trading restrictions or limitations;
government regulations may restrict trading in futures and options; and possible
lack of full participation in a rise in the market value of the underlying
security.
PORTFOLIO TURNOVER
The portfolio turnover rate for the Fund is expected to be less than 100%.
INVESTMENT LIMITATIONS
The investment objective and the following investment limitations are
fundamental policies of the Fund. Fundamental policies cannot be changed with
respect to the Fund without the consent of the holders of a majority of the
Fund's outstanding shares.
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6
The Fund may not:
1. Purchase securities of any issuer (except securities issued or guaranteed by
the United States Government, its agencies or instrumentalities and repurchase
agreements involving such securities) if, as a result, more than 5% of the total
assets of the Fund would be invested in the securities of such issuer. This
restriction applies to 75% of the Fund's total assets.
2. Purchase any securities which would cause more than 25% of the total assets
of the Fund to be invested in the securities of one or more issuers conducting
their principal business activities in the same industry, provided that this
limitation does not apply to investments in the obligations issued or guaranteed
by the U.S. Government, its agencies or instrumentalities and repurchase
agreements involving such securities. For purposes of this limitation, (i)
utility companies will be classified according to their services, for example,
gas, gas transmission, electric and telephone will each be considered a separate
industry; (ii) financial service companies will be classified according to the
end users of their services, for example, automobile finance, bank finance and
diversified finance will each be considered a separate industry; (iii)
supranational agencies will be deemed to be issuers conducting their principal
business activities in the same industry; and (iv) governmental issuers within a
particular country will be deemed to be conducting their principal business
activities in the same industry.
3. Make loans, except that the Fund may (a) purchase or hold debt instruments in
accordance with its investment objective and policies; (b) enter into repurchase
agreements; and (c) engage in securities lending as described in this Prospectus
and in the Statement of Additional Information.
The foregoing percentage limitations will apply at the time of the purchase of a
security. Additional investment limitations are set forth in the Statement of
Additional Information.
THE ADVISOR
Summit Bank Investment Management Division, a division of Summit Bank (the
'Advisor'), serves as the Advisor of the Trust. The Advisor makes the investment
decisions for the assets of the Fund and continuously reviews, supervises and
administers the Fund's investment program subject to the supervision of, and
policies established by, the Trustees of the Trust.
Summit Bank, 210 Main Street, Hackensack, New Jersey 07601, was chartered in
1899 and has been exercising trust powers and managing money since 1916. The
Investment Management Division began as a separate operating division of the
Bank in 1973. The Bank's investment professionals have, on average, over 20
years of experience in investment management. As of October 31, 1996, total
assets under management were approximately $6.7 billion.
Summit Bank is a wholly-owned subsidiary of Summit Bancorp, an interstate bank
holding company with $22 billion in assets and over 325 banking offices in New
Jersey and Eastern Pennsylvania as of October 31, 1996.
John Guarino is a Vice President of the Advisor and has managed the Fund since
its inception. Prior to joining Summit Bank in April, 1985, Mr. Guarino was a
Portfolio Manager with First National State Bank.
The Advisor is entitled to a fee, which is calculated daily and paid monthly, at
an annual rate of .75% of the average daily net assets of the Fund. The Advisor
has voluntarily agreed to waive all or a portion of its fees in order to limit
the operating expenses of Class A shares of the Fund to .80%. The Advisor
reserves the right to terminate its fee waiver at any time in its sole
discretion.
Summit Bank has also entered into a Custodian Agreement with the Trust, under
which it provides all securities safekeeping services as required by the Fund
and the Investment Company Act of 1940, as amended (the '1940 Act'). The Trust
pays Summit Bank (referred to herein in its custodial capacity as the
'Custodian') a custodian fee, which is calculated daily and paid monthly, at an
annual rate of .025% of the average daily net assets of the Fund.
THE ADMINISTRATOR
SEI Fund Resources (the 'Administrator') serves as the Administrator of the
Trust. The Administrator provides the Trust with administrative services, other
than investment advisory services, including all
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7
regulatory reporting, necessary office space, equipment, personnel and
facilities.
The Administrator is entitled to a fee, which is calculated daily and paid
monthly, at an annual rate of .20% of the average daily net assets of the Fund.
THE SHAREHOLDER SERVICING AGENT
SEI Fund Resources acts as the dividend disbursing agent, shareholder servicing
agent and transfer agent for the Trust.
THE DISTRIBUTOR
SEI Financial Services Company (the 'Distributor'), a wholly-owned subsidiary of
SEI Corporation, acts as the Distributor for the Trust. No compensation is paid
to the Distributor for distribution services for the Class A shares of the Fund.
Class A shares of the Fund are offered without distribution fees (i) to
institutional investors (including Summit Bank, its affiliates and correspondent
banks) for the investment of their own funds, (ii) to individuals and
institutions (including Summit Bank, its affiliates and correspondent banks) for
the investment of funds held by such individuals or institutions in a fiduciary,
agency, custodial or other representative capacity if such individuals or
institutions are able to provide complete shareholder recordkeeping services
with respect to shares purchased and held in such capacity, and (iii) any
qualified customer who has entered into an agreement with Summit Bank, its
affiliates or correspondent banks ('Qualified Customers').
Class B shares of the Fund are offered to all persons. Consequently, it is
possible that individuals and institutions may offer different classes of shares
of the Fund to their customers and thus receive different compensation with
respect to different classes of shares. In addition, individuals and
institutions that are the record owner of shares for the account of their
customers may impose separate fees for account services to their customers. The
Fund may also execute brokerage or other agency transactions through an
affiliate of the Advisor or through the Distributor for which such affiliate or
the Distributor receives compensation.
PURCHASE AND REDEMPTION OF SHARES
The following discussion relates to investors other than Qualified Customers.
For a discussion of purchase and redemption of shares, Qualified Customers
should see pages 8 and 9 of this Prospectus.
Purchases and redemptions of shares of the Fund may be made on any Business Day.
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. However, an
order may be cancelled if the Custodian does not receive federal funds before
12:00 noon, Eastern time, on the next Business Day, and the investor could be
liable for any fees or expenses incurred by the Trust. Generally, an investor in
the Class A shares of the Fund may not purchase shares by check, third party
check, credit card or credit card check. Financial institutions may impose an
earlier cut-off time for receipt of purchase orders directed through them to
allow for processing and transmittal of these orders to the Distributor for
effectiveness the same day. The purchase price of shares of the Fund is the net
asset value next determined after a purchase order is effective. The net asset
value per Class A share of the Fund is determined by dividing the total market
value of the Fund's investments and other assets that are allocated to Class A
shares, less any liabilities that are allocated to Class A shares, by the total
outstanding Class A shares of the Fund. The Fund may use a pricing service to
provide market quotations. A pricing service may use a matrix system of
valuation to value fixed income securities which considers factors such as
securities prices, yield features, ratings and developments related to a
specific security. Net asset value per share is determined daily as of 4:00
p.m., Eastern time, on each Business Day. Purchases will be made in full and
fractional shares of the Fund calculated to three decimal places. Although the
methodology and procedures for determining net asset value are identical, the
net asset value per share of classes within the Fund may differ because of the
distribution expenses and sales loads charged to Class B shares. No certificates
representing shares will be issued.
Neither the Trust nor its transfer agent will be responsible for any loss,
liability, cost or expense for
<PAGE>
8
acting upon wire instructions or upon telephone instructions that it reasonably
believes to be genuine. The Trust and its transfer agent will each employ
reasonable procedures to confirm that instructions communicated by telephone are
genuine, including requiring a form of personal identification prior to acting
upon instructions received by telephone and recording telephone instructions. 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 the redemption order by other
means.
The Trust reserves the right to reject a purchase order when the Distributor
determines that it is not in the best interest of the Fund or its Shareholders
to accept such order.
Shareholders who desire to redeem shares of the Fund must place their redemption
orders prior to 4:00 p.m., Eastern time, on any Business Day, for the order to
be effective on that Business Day. The redemption price of shares is the net
asset value of the Fund next determined after the redemption order is effective.
Payment on redemption will be made as promptly as possible and, in any event,
within seven Business Days after the redemption order is effective.
The Fund intends to pay cash for all shares redeemed, but under abnormal
conditions which make payment in cash unwise, payment may be made wholly or
partly in portfolio securities with a market value equal to the redemption
price. In such cases, an investor may incur brokerage costs in converting such
securities to cash.
PURCHASE OF SHARES -- QUALIFIED CUSTOMERS
Accounts for Qualified Customers may be opened through Summit Bank, its
affiliates or correspondent banks (the 'Bank'). Subsequent purchases of shares
of the Fund may be made through the Bank or directly through the Distributor by
mail or by wire. Purchases may not be made by telephone. Qualified Customers
should contact their Investment Counselor ('IC') for information about opening
an account and purchasing shares of the Fund through the Bank. The Bank may
impose an earlier cut-off time for receipt of purchase orders directed through
them to allow for processing and transmittal of these orders to the Distributor
for effectiveness the same day.
The minimum initial investment in the Trust for Qualified Customers is $10,000.
All subsequent purchases must be at least $1,000. A purchase order will be
effective as of the Business Day received by the Distributor if the Distributor
receives the order and payment before 4:00 p.m., Eastern time, on such Business
Day.
DIRECT PURCHASES -- QUALIFIED CUSTOMERS
By Mail--Subsequent purchases of shares may be made at any time by mailing a
check (or other negotiable bank draft or money order) to the Distributor. When
purchases are made by check, redemptions will not be allowed until the
investment being redeemed has been in the account for 10 Business Days. If a
check received does not clear, the purchase will be canceled and the investor
could be liable for any losses or fees incurred.
By Wire--Subsequent purchases of shares may be made by wire. To buy shares by
wire, call the Distributor toll-free at 1-800-932-7782.
Other Information Regarding Purchases--The purchase price is the net asset value
per share next computed after the order is effective. No certificates
representing shares will be issued.
REDEMPTION OF SHARES -- QUALIFIED CUSTOMERS
The IC through which Qualified Customers may purchase shares is able to assist
Qualified Customers in effecting through the Distributor the redemption of
shares held in Fund accounts. Qualified Customers wishing to effect a redemption
with the assistance of an IC should contact the Bank or their IC for additional
information about redemption procedures and cut-off times. Shares may also be
redeemed directly through the Distributor by mail, by telephone, by wire, by
Automated Clearing House ('ACH') or through a systematic withdrawal plan.
DIRECT REDEMPTIONS -- QUALIFIED CUSTOMERS
By Mail--A written request for redemption must be received by the Distributor in
order to constitute a valid request for redemption. The Distributor may
<PAGE>
9
require that the signature on the written request be guaranteed by a commercial
bank or by a member firm of a domestic stock exchange. The signature guarantee
requirement will be waived if all of the following conditions apply: (1) the
redemption is for $5,000 worth of shares or less, (2) the redemption check is
payable to the Shareholder(s) of record, and (3) the redemption check is mailed
to the Shareholder(s) at the address of record. Qualified Customers may also
have the proceeds mailed to a commercial bank account previously designated on
the Account Application or by written instruction to the Distributor. There is
no charge for having redemption requests mailed to a designated bank account.
By Telephone, Wire or ACH--Shares may be redeemed by telephone if Qualified
Customers elect that option on the Account Application. A Qualified Customer may
have the proceeds mailed to his or her address or wired to a commercial bank
account previously designated on the Account Application. Under most
circumstances, payments will be transmitted on the next Business Day following
receipt of a valid request for redemption. Wire and ACH redemption requests may
be made by Qualified Customers by calling the Distributor at 1-800-932-7782, who
will add a wire redemption charge (presently $10.00) to the amount of the
redemption. Accounts may not be closed by telephone.
Neither the Trust nor its transfer agent will 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 and its
transfer agent will each employ reasonable procedures to confirm that
instructions communicated by telephone are genuine, including requiring a form
of personal identification prior to acting upon instructions received by
telephone and recording telephone instructions. If market conditions are
extraordinarily active, or other extraordinary circumstances exist, Qualified
Customers attempting to place redemption orders by telephone may wish to
consider placing the redemption order by other means.
Systematic Withdrawal Plan (SWP)--The Fund offers a Systematic Withdrawal Plan
which may be utilized by Qualified Customers who wish to receive regular
distributions from their account. Upon commencement of the SWP, the account must
have a current value of $10,000 or more. Qualified Customers may elect to
receive automatic payment by check or ACH of $50 or more on a monthly or
quarterly basis.
Other Information Regarding Redemptions--All redemption orders are effected at
the net asset value per share next determined after receipt of a valid request
for redemption, as described above. Net asset value per share is determined as
of 4:00 p.m., Eastern time, on each Business Day. Payment to Shareholders for
shares redeemed will be made within seven days after receipt by the Distributor
of the request for redemption.
At various times, the Fund may be requested to redeem shares for which it has
not yet received good payment in connection with a purchase. In such
circumstances, the forwarding of redemption proceeds may be delayed until such
payment has been collected. The Fund intends to pay cash for all shares
redeemed, but under abnormal conditions that make payment in cash unwise,
payment may be made wholly or partly in portfolio securities with a market value
equal to the redemption price. In such cases, an investor may incur brokerage
costs in converting such securities to cash.
PERFORMANCE
From time to time, the Fund may advertise total return. These figures will be
based on historical earnings and are not intended to indicate future
performance.
The total return of the Fund refers to the average compounded rate of return on
a hypothetical investment for designated time periods (including, but not
limited to, the period from which the Fund commenced operations through the
specified date), assuming that the entire investment is redeemed at the end of
each period and assuming the reinvestment of all dividend and capital gain
distributions. The advertised performance on Class A shares will normally be
higher than for Class B shares because Class A shares are not subject to
<PAGE>
10
distribution expenses and sales loads charged to Class B shares. The actual
return to a Shareholder on Class A shares may be reduced by any administrative
or management charges that may be imposed by individuals or institutions on
their customers for account services. The actual return to shareholders on Class
B shares will be reduced by the amount of any sales load and distribution
expenses paid in respect of Class B shares.
The Fund may periodically compare its performance to that of: (i) other mutual
funds tracked by mutual fund rating services (such as Lipper Analytical),
financial and business publications and periodicals; (ii) broad groups of
comparable mutual funds; (iii) unmanaged indices which may assume investment of
dividends but generally do not reflect deductions for administrative and
management costs; or (iv) to other investment alternatives. The Fund may quote
Morningstar, Inc., a service that ranks mutual funds on the basis of
risk-adjusted performance. The Fund may use long-term performance of the capital
markets to demonstrate general long-term risk versus reward scenarios and could
include the value of a hypothetical investment in any of the capital markets.
The Fund may also quote financial and business publications and periodicals as
they relate to fund management, investment philosophy, and investment
techniques.
The Fund may quote various measures of volatility and benchmark correlation in
advertising and may compare these measures to those of other funds. Measures of
volatility attempt to compare historical share price fluctuations or total
returns to a benchmark while measures of benchmark correlation indicate how
valid a comparative benchmark might be. Measures of volatility and correlation
are calculated using averages of historical data and cannot be calculated
precisely.
TAXES
The following summary of federal income tax consequences is based on current tax
laws and regulations, which may be changed by legislative, judicial or
administrative action. No attempt has been made to present a detailed
explanation of the federal, state, or local income tax treatment of the Fund or
its Shareholders. Accordingly, Shareholders are urged to consult their tax
advisers regarding specific questions as to federal, state and local income
taxes.
TAX STATUS OF THE FUND
The Fund is treated as a separate entity for federal income tax purposes and is
not combined with the Trust's other investment portfolios (together with the
Fund, the 'Funds'). The Fund intends to qualify for the special tax treatment
afforded regulated investment companies under Subchapter M of the Internal
Revenue Code of 1986, as amended (the 'Code'), so as to be relieved of federal
income tax on that part of its net investment income and net capital gain (the
excess of net long-term capital gain over net short-term capital loss) which is
distributed to Shareholders.
TAX STATUS OF DISTRIBUTIONS
The Fund will distribute substantially 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 gains
will be distributed annually and will be taxed to Shareholders as long-term
capital gains, regardless of how long the Shareholder has held shares. Capital
gains distributions will not qualify for the corporate dividends-received
deduction. The Fund will make annual reports to Shareholders of the federal
income tax status of all distributions.
Dividends declared by the Fund in October, November or December of any year and
payable to Shareholders of record on a date in these months will be deemed to
have been paid by the Fund and received by the Shareholders on December 31 if
paid by the Fund at any time during the following January.
The Fund intends to make sufficient distributions prior to the end of each
calendar year to avoid liability for federal excise tax.
<PAGE>
11
Sale, exchange or redemption of Fund shares is a taxable event to a Shareholder.
Generally, gain or loss on the sale, exchange or redemption of a share will be
capital gain or loss which will be long-term if the share has been held for more
than one year and otherwise will be short-term. However, if a Shareholder
realizes a loss on the sale, exchange or redemption of a share held for six
months or less and has previously received a capital gains distribution with
respect to the share (or any undistributed capital gains of the Fund with
respect to such share are included in determining the Shareholder's long-term
capital gains), the Shareholder must treat the loss as a long-term capital loss
to the extent of the amount of the prior capital gains distribution (or any
undistributed net capital gains of the Fund which have been included in
determining such Shareholder's long-term capital gains). In addition, any loss
realized on a sale or other disposition of shares will be disallowed to the
extent an investor repurchases (or enters into a contract or option to
repurchase) shares within a period of 61 days (beginning 30 days before and
ending 30 days after the disposition of the shares). Investors should
particularly note that this loss disallowance rule will apply to shares received
through the reinvestment of dividends during the 61-day period.
GENERAL INFORMATION
THE TRUST
The Trust was organized as a Massachusetts business trust under a Declaration of
Trust dated September 9, 1991. The Declaration of Trust permits the Trust to
offer separate portfolios of shares and different classes of each portfolio. In
addition to the Fund, the Trust consists of the following portfolios: U.S.
Treasury Securities Money Market Fund, U.S. Treasury Securities Plus Money
Market Fund, Prime Obligation Money Market Fund, Tax-Exempt Money Market Fund,
Short-Term Investment Fund, New Jersey Municipal Securities Fund, Pennsylvania
Municipal Securities Fund, GNMA Fund, Fixed Income Fund, Intermediate-Term
Government Securities Fund, Equity Value Fund, Equity Income Fund, Mid Cap Value
Fund, Balanced Growth Fund and International Growth Fund. All consideration
received by the Trust for shares of any Fund and all assets of such Fund belong
to that Fund and would be subject 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, registering the shares
under federal laws and filing with state securities commissions, pricing,
insurance expenses, litigation and other extraordinary expenses, brokerage
costs, interest charges, taxes and organization expenses.
From time to time, the Funds may experience relatively large purchases or
redemptions due to asset allocation decisions made by the Advisor for its
clients. These transactions may have a material effect on the Funds, since Funds
that experience redemptions as a result of reallocations may have to sell
portfolio securities and because Funds that receive additional cash will have to
invest it. While it is impossible to predict the overall impact of these
transactions over time, there could be adverse effects on portfolio management
to the extent that Funds may be required to sell securities at times when they
would not otherwise do so, or receive cash that cannot be invested in an
expeditious manner. There may be tax consequences associated with purchases and
sales of securities, and such sales may also increase transaction costs. The
Advisor is committed to minimizing the impact of these transactions on the Funds
to the extent it is consistent with pursuing the investment objectives of its
asset allocation decisions on the Funds.
TRUSTEES 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 management services to the Trust.
VOTING RIGHTS
Each share held entitles a Shareholder of record to one vote. The Shareholders
of each Fund or class will vote separately on matters relating solely to that
Fund or class. As a Massachusetts business trust,
<PAGE>
12
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 the remaining Trustees or by Shareholders at a special meeting called
upon written request of Shareholders owning at least 10% of the outstanding
shares of the Trust. In the event that such a meeting is requested the Trust
will provide appropriate assistance and information to the Shareholders
requesting the meeting.
REPORTING
The Trust issues unaudited financial information semi-annually and audited
financial statements annually. The Trust furnishes proxy statements and other
reports to Shareholders of record.
SHAREHOLDER INQUIRIES
Shareholder inquiries should be directed to The Pillar Funds, P.O. Box 8523,
Boston, MA 02266-8523.
DIVIDENDS
Substantially all of the net investment income (not including capital gain) of
the Fund is distributed in the form of quarterly dividends to Shareholders of
record on the next to last Business Day of each quarter. If any capital gain is
realized, substantially all of it will be distributed at least annually.
Shareholders automatically receive all income dividends and capital gain
distributions in additional Class A shares at the net asset value next
determined following the record date, unless the Shareholder has elected to take
such payment in cash. Shareholders may change their election by providing
written notice to the Administrator at least 15 days prior to the distribution.
Dividends and distributions of the Fund are paid on a per-share basis. The value
of each share will be reduced by the amount of the payment. If shares are
purchased shortly before the record date for a dividend or the distribution of
capital gains, a Shareholder will pay the full price for the shares and receive
some portion of the price back as a taxable dividend or distribution.
The amount of dividends payable on Class A shares will be more than the
dividends payable on Class B shares because of the distribution expenses charged
to Class B shares.
COUNSEL AND INDEPENDENT PUBLIC ACCOUNTANTS
Morgan, Lewis & Bockius LLP serves as counsel to the Trust. Arthur Andersen LLP
serves as the independent public accountants of the Trust.
DESCRIPTION OF PERMITTED INVESTMENTS
The following is a description of certain permitted investments and associated
risk factors for the Fund:
AMERICAN DEPOSITARY RECEIPTS ('ADRs'), EUROPEAN DEPOSITARY RECEIPTS ('EDRs'),
CONTINENTAL DEPOSITARY RECEIPTS ('CDRs') and GLOBAL DEPOSITARY RECEIPTS
('GDRs')-- ADRs are securities, typically issued by a U.S. financial institution
(a 'depositary'), that evidence ownership interests in a security or a pool of
securities issued by a foreign issuer and deposited with the depositary. ADRs
include American Depositary Shares and New York Shares. EDRs, which are
sometimes referred to as Continental Depositary Receipts, are securities,
typically issued by a non-U.S. financial institution, that evidence ownership
interests in a security or a pool of securities issued by either a U.S. or
foreign issuer. GDRs are issued globally and evidence a similar ownership
arrangement. Generally, ADRs are designed for trading in the U.S. securities
markets, EDRs are designed for trading in European securities markets and GDRs
are designed for trading in non-U.S. securities markets. ADRs, EDRs, CDRs and
GDRs may be available for investment through 'sponsored' or 'unsponsored'
facilities. A sponsored facility is established jointly by the issuer of the
security underlying the receipt and a depositary, whereas an unsponsored
facility may be established by a depositary without participation by the issuer
of the receipt's underlying security. Holders of an unsponsored depositary
receipt generally bear all the costs of the unsponsored facility. The depositary
of an unsponsored facility frequently is under no obligation to distribute
<PAGE>
13
shareholder communications received from the issuer of the deposited security or
to pass through to the holders of the receipts voting rights with respect to the
deposited securities.
BANKERS' ACCEPTANCES--Bankers' acceptances are bills of exchange or time drafts
drawn on and accepted by a commercial bank. They are used by corporations to
finance the shipment and storage of goods and to furnish dollar exchange.
Maturities are generally six months or less.
CERTIFICATES OF DEPOSIT--Certificates of deposit are interest-bearing
instruments with a specific maturity. They are issued by banks and savings and
loan institutions in exchange for the deposit of funds and normally can be
traded in the secondary market prior to maturity. Certificates of deposit with
penalties for early withdrawal will be considered illiquid.
COMMERCIAL PAPER--Commercial paper is a term used to describe unsecured
short-term promissory notes issued by corporations and other entities.
Maturities on these issues vary from a few to 270 days.
CONVERTIBLE SECURITIES--Convertible securities are corporate securities that are
exchangeable for a set amount of another security at a prestated price.
Convertible securities typically have characteristics similar to both fixed
income and equity securities. Because of the conversion feature, the market
value of convertible securities tends to move with the market value of the
underlying stock. The value of a convertible security is also affected by
prevailing interest rates, the credit quality of the issuer, and any call
provisions.
DERIVATIVES--Derivatives are securities that derive their value from other
securities. The following are considered derivative securities: futures, options
(e.g., puts and calls), options on futures, swap agreements, mortgage-backed
securities (CMOs, REMICs, IOs and POs), when-issued securities and forward
commitments, floating and variable rate securities, convertible securities,
'stripped' U.S. Treasury securities (e.g., Receipts and STRIPs), privately
issued stripped securities (e.g., TGRs, TRs and CATS). See elsewhere in this
'Description of Permitted Investments' for discussions of these various
instruments, and see 'Investment Objective and Policies' for more information
about any investment policies and limitations applicable to their use.
EQUITY SECURITIES--Equity securities represent ownership interests in a company
and consist of common stocks, preferred stocks, warrants to acquire common stock
and securities convertible into common stock. Investments in equity securities
in general are subject to market risks that may cause their prices to fluctuate
over time. The value of convertible equity securities is also affected by
prevailing interest rates, the credit quality of the issuer and any call
provision. Fluctuations in the value of equity securities in which the Fund
invests will cause the net asset value of the Fund to fluctuate.
FIXED INCOME SECURITIES--Fixed income securities consist of bonds, notes,
debentures and other interest-bearing securities that represent indebtedness.
The market value of the fixed income investments in which the Fund invests will
change in response to interest rate changes and other factors. During periods of
falling interest rates, the values of outstanding fixed income securities
generally rise. Conversely, during periods of rising interest rates, the values
of such securities generally decline. Moreover, while securities with longer
maturities tend to produce higher yields, the prices of longer maturity
securities are also subject to greater market fluctuations as a result of
changes in interest rates. Changes by recognized agencies in the rating of any
fixed income security and in the ability of an issuer to make payments of
interest and principal also affect the value of these investments. Changes in
the value of these securities will not necessarily affect cash income derived
from these securities but will affect the Fund's net asset value.
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS--A purchase of a futures
contract means the acquisition of a contractual right to obtain delivery to the
Fund of the securities or foreign currency called for by the contract at a
specified price during a specified future month. When a futures contract on
securities or currency is sold, the Fund incurs a contractual obligation to
deliver the securities or foreign currency underlying
<PAGE>
14
the contract at a specified price on a specified date during a specified future
month. The Fund may sell stock index futures contracts in anticipation of, or
during a market decline to attempt to offset the decrease in market value of its
common stocks that might otherwise result; and it may purchase such contracts in
order to offset increases in the cost of common stocks that it intends to
purchase. The Fund may enter into futures contracts and options thereon without
limitation if engaged in for 'bona fide' hedging purposes, and also up to 5% of
the Fund's assets for transactions engaged in for other purposes.
The Fund may also purchase and write options to buy or sell futures contracts.
The Fund may write options on futures only on a covered basis. Options on
futures are similar to options on securities except that options on futures give
the purchaser the right, in return for the premium paid, to assume a position in
a futures contract, rather than actually to purchase or sell the futures
contract, at a specified exercise price at any time during the period of the
option.
When the Fund enters into a futures transaction it must deliver to the futures
commission merchant selected by the Fund an amount referred to as 'initial
margin.' This amount is maintained in a segregated account at the custodian
bank. Thereafter, a 'variation margin' may be paid by the Fund to, or drawn by
the Fund from, such account in accordance with controls set for such accounts,
depending upon changes in the price of the underlying securities subject to the
futures contract. In addition, the Fund will segregate cash or other liquid
assets in an amount equal to its obligations under such contract. The Fund will
enter into such futures and options on futures transactions on domestic
exchanges and, to the extent such transactions have been approved by the
Commodity Futures Trading Commission for sale to customers in the United States,
on foreign exchanges.
Options and futures can be volatile investments and involve certain risks. If
the Advisor applies a hedge at an inappropriate time or judges interest rates
incorrectly, options and futures strategies may lower the Fund's return. The
Fund could also experience losses if the prices of its options and futures
positions were poorly correlated with its other instruments, or if it could not
close out its positions because of an illiquid secondary market.
ILLIQUID SECURITIES--Illiquid securities are securities that cannot be disposed
of within seven business days at approximately the price at which they are being
carried on the Fund's books. Not more than 15% of the total assets of the Fund
will be invested in such instruments. An illiquid security includes a demand
instrument with a demand notice period exceeding seven days, if there is no
secondary market for such security. Restricted securities, including Rule 144A
securities, that meet the criteria established by the Trustees of the Trust will
be considered liquid.
INVESTMENT COMPANIES--The Fund may invest up to 10% of its total assets in
shares of other investment companies. Because of restrictions on direct
investment by U.S. entities in certain countries, investment in other investment
companies may be the most practical or only manner in which an international and
global fund can invest in the securities markets of those countries. Such
investments may involve the payment of substantial premiums above the net asset
value of such issuers' fund securities, and are subject to limitations under the
1940 Act.
The Fund does not intend to invest in other investment companies unless, in the
judgment of the Advisor, the potential benefits of such investment exceed the
associated costs relative to the benefits and costs associated with direct
investments in the underlying securities. As a shareholder in an investment
company, the Fund would bear its ratable share of that investment company's
expenses, including its advisory and administration fees.
OPTIONS--A put option gives the purchaser of the option the right to sell, and
the writer of the option the obligation to buy, the underlying security at any
time during the option period. A call option gives the purchaser of the option
the right to buy, and the writer of the option the obligation to sell, the
underlying security at any time during the option period. The premium paid to
the writer is the consideration for undertaking the obligations under the option
contract. The initial purchase (sale) of an option contract is an 'opening
transaction.' In order to close out an option position, the Fund may enter
<PAGE>
15
into a 'closing transaction,' which is simply the sale (purchase) of an option
contract on the same security with the same exercise price and expiration date
as the option contract originally opened.
The Fund may purchase put and call options to protect against a decline in the
market value of the securities in its portfolio or to protect against an
increase in the cost of securities that the Fund may seek to purchase in the
future. The Fund pays a premium for purchasing put and call options. If price
movements in the underlying securities are such that exercise of the options
would not be profitable for the Fund, loss of the premium paid may be offset by
an increase in the value of the Fund's securities or by a decrease in the cost
of acquisition of securities by the Fund.
The Fund may write covered put and call options as a means of increasing the
yield on its portfolio and as a means of providing limited protection against
decreases in its market value. When the Fund sells an option, if the underlying
securities do not increase or decrease to a price level that would make the
exercise of the option profitable to the holder thereof, the option generally
will expire without being exercised and the Fund will realize as profit the
premium received for such option. When a call option of which the Fund is the
writer is exercised, the Fund will be required to sell the underlying securities
to the option holder at the strike price, and will not participate in any
increase in the price of such securities above the strike price. When a put
option of which the Fund is the writer is exercised, the Fund will be required
to purchase the underlying securities at the strike price, which may be in
excess of the market value of such securities.
The Fund may purchase and write options on an exchange or over-the-counter.
Over-the-counter options ('OTC options') differ from exchange-traded options in
several respects. They are transacted directly with dealers and not with a
clearing corporation and therefore entail the risk of non-performance by the
dealer. OTC options are available for a greater variety of securities and for a
wider range of expiration dates and exercise prices than are available for
exchange-traded options. Because OTC options are not traded on an exchange,
pricing normally is done by reference to information from a market maker. It is
the position of the Securities and Exchange Commission that OTC options are
illiquid.
The Fund may purchase and write put and call options on foreign currencies
(traded on U.S. and foreign exchanges or over-the-counter markets) to manage its
exposure to exchange rates.
Call options on securities or foreign currency written by the Fund will be
'covered,' which means that the Fund will own an equal amount of the underlying
security or foreign currency. With respect to put options on securities or
foreign currency written by the Fund, the Fund will establish a segregated
account with its Custodian consisting of cash or other liquid assets in an
amount equal to the amount the Fund would be required to pay upon exercise of
the put.
The Fund may purchase and write put and call options on indices and enter into
related closing transactions. Put and call options on indices are similar to
options on securities except that options on an index give the holder the right
to receive, upon exercise of the option, an amount of cash if the closing level
of the underlying index is greater than (or less than, in the case of puts) the
exercise price of the option. This amount of cash is equal to the difference
between the closing price of the index and the exercise price of the option,
expressed in dollars multiplied by a specified number. Thus, unlike options on
individual securities, all settlements are in cash, and gain or loss depends on
price movements in the particular market represented by the index generally,
rather than the price movements in individual securities. The Fund may choose to
terminate an option position by entering into a closing transaction. The ability
of the Fund to enter into closing transactions depends upon the existence of a
liquid secondary market for such transactions.
All options written on indices must be covered. When the Fund writes an option
on an index, it will establish a segregated account containing cash or other
liquid assets with its Custodian in an amount at least equal to the market value
of the option and will maintain the account while the option is open or will
otherwise cover the transaction.
<PAGE>
16
Risk Factors. Risks associated with options transactions include: (1) the
success of a hedging strategy may depend on an ability to predict movements in
the prices of individual securities, fluctuations in markets and movements in
interest rates; (2) there may be an imperfect correlation between the movement
in prices of options and the securities underlying them; (3) there may not be a
liquid secondary market for options; and (4) while the Fund will receive a
premium when it writes covered call options, it may not participate fully in a
rise in the market value of the underlying security.
RECEIPTS--Receipts are sold as zero coupon securities which means that they are
sold at a substantial discount and redeemed at face value at their maturity date
without interim cash payments of interest or principal. This discount is
accreted over the life of the security, and such accretion will constitute the
income earned on the security for both accounting and tax purposes. Because of
these features, such securities may be subject to greater interest rate
volatility than interest-paying investments.
REPURCHASE AGREEMENTS--Repurchase Agreements are agreements by which the Fund
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 Fund will have actual or constructive possession
of the security as collateral for the repurchase agreement. The Fund bears a
risk of loss in the event the other party defaults on its obligations and the
Fund is delayed or prevented from its right to dispose of the collateral
securities or if the Fund realizes a loss on the sale of the collateral
securities. The Fund 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.
TIME DEPOSITS--Time deposits are non-negotiable receipts issued by a bank in
exchange for the deposit of funds. Like a certificate of deposit, it earns a
specified rate of interest over a definite period of time; however, it cannot be
traded in the secondary market. Time deposits maturing in more than seven days
are considered to be illiquid securities.
U.S. 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').
U.S. 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, the Federal Home Loan Mortgage Corporation, the Federal
Land Banks and the U.S. Postal Service. Some of these securities are supported
by the full faith and credit of the U.S. Treasury (e.g., Government National
Mortgage Association), 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., Federal National
Mortgage Association). Guarantees of principal by agencies or instrumentalities
of the U.S. Government may be a guarantee of payment at the maturity of the
obligation so that in the event of a default prior to maturity there might not
be a market and thus no means of realizing on the obligation prior to maturity.
Guarantees as to the timely payment of principal and interest do not extend to
the value or yield of these securities nor to the value of the Fund's shares.
VARIABLE OR FLOATING RATE INSTRUMENTS-- Certain obligations may carry variable
or floating rates of interest, and may involve a conditional or unconditional
demand feature. Such instruments bear interest at rates that are not fixed, but
which vary with changes in specified market rates or indices. The interest rates
on these securities may be reset daily, weekly, quarterly or some other reset
period, and may have a floor or ceiling on interest rate changes. There is a
risk that the current interest rate on such obligations may not accurately
reflect existing market interest rates. A demand instrument with a demand notice
exceeding seven days may be considered illiquid if there is no secondary market
for such security.
<PAGE>
17
WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES (EQUITY AND DEBT SECURITIES)--
When-issued or delayed delivery basis transactions involve the purchase of an
instrument with payment and delivery taking place in the future. Delivery of and
payment for these securities may occur a month or more after the date of the
purchase commitment. The Fund will maintain with the Custodian a separate
account with cash or other liquid assets in an amount at least equal to these
commitments. The interest rate, if any, realized on these securities is fixed as
of the purchase date and no interest accrues to the Fund before settlement. Debt
and equity securities are subject to market fluctuation and it is possible that
the market value at the time of settlement could be higher or lower than the
purchase price. Although the Fund generally purchases securities on a
when-issued or forward commitment basis with the intention of actually acquiring
securities for its portfolio, the Fund may dispose of a when-issued security or
forward commitment prior to settlement if it deems appropriate.
<PAGE>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Summary............................................. 2 The Distributor..................................... 7
Expense Summary..................................... 3 Purchase and Redemption of Shares................... 7
The Trust........................................... 4 Purchase of Shares--Qualified Customers............. 8
Investment Objective and Policies................... 4 Redemption of Shares--Qualified Customers........... 8
Investment Limitations.............................. 5 Performance......................................... 9
The Advisor......................................... 6 Taxes............................................... 10
The Administrator................................... 6 General Information................................. 11
The Shareholder Servicing Agent..................... 7 Description of Permitted Investments................ 12
</TABLE>
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A POST-
EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS BEEN FILED WITH THE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE
ACCEPTED PRIOR TO THE TIME THE POST-EFFECTIVE AMENDMENT TO THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO
SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY
SUCH STATE.
PROSPECTUS DATED NOVEMBER 14, 1996
SUBJECT TO COMPLETION
THE PILLAR FUNDS
Investment Advisor:
SUMMIT BANK INVESTMENT MANAGEMENT DIVISION,
A DIVISION OF SUMMIT BANK
THE PILLAR FUNDS (the 'Trust') consist of mutual fund portfolios seeking to
provide a convenient and economical means of investing in one or more
professionally managed portfolios of securities. This Prospectus relates to the
following equity fund (the 'Fund'):
O EQUITY GROWTH FUND
CLASS B
The Trust's Class B Shares are offered to all persons (persons who own Class B
shares of the Fund are referred to herein as 'Shareholders').
CLASS B SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR INSURED,
ENDORSED OR GUARANTEED BY, ANY BANK (INCLUDING SUMMIT BANK OR ITS AFFILIATES
OR CORRESPONDENTS), ANY STATE OR STATE AGENCY, THE FEDERAL DEPOSIT INSURANCE
CORPORATION (FDIC), THE U.S. GOVERNMENT OR ANY U.S. GOVERNMENT AGENCY.
AMOUNTS INVESTED IN THE FUND ARE SUBJECT TO INVESTMENT RISKS, INCLUDING
POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
SALES CHARGES ARE IMPOSED BY THE FUND AT THE TIME OF PURCHASE.
This Prospectus sets forth concisely the information about the Trust that a
prospective investor should know before investing. Investors are advised to read
this Prospectus and retain it for future reference. A Statement of Additional
Information dated _____ __, ____, has been filed with the Securities and
Exchange Commission and is available without charge through the Distributor, SEI
Financial Services Company, 680 East Swedesford Road, Wayne, PA 19087-1658 or by
calling 1-800-932-7782. The Statement of Additional Information is incorporated
into this Prospectus by reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION 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 PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
____ __, ____
CLASS B
<PAGE>
2
SUMMARY
THE PILLAR FUNDS (THE 'TRUST') CONSIST OF OPEN-END MANAGEMENT INVESTMENT
COMPANIES WHICH PROVIDE A CONVENIENT WAY TO INVEST IN PROFESSIONALLY MANAGED
PORTFOLIOS OF SECURITIES. THE FOLLOWING PROVIDES BASIC INFORMATION ABOUT THE
CLASS B SHARES OF THE TRUST'S EQUITY GROWTH FUND (THE 'FUND').
What is the Investment Objective? The investment objective of the Fund is
long-term growth of capital. There is no assurance that the Fund will meet its
investment objective. See 'Investment Objective and Policies.'
What are the Permitted Investments? The Fund invests in equity securities
consisting of (i) common stocks; (ii) warrants to purchase common stocks; (iii)
securities convertible into common stocks; and (iv) American Depositary Receipts
('ADRs'), European Depositary Receipts ('EDRs'), Continental Depositary Receipts
('CDRs') and Global Depositary Receipts ('GDRs'). The Fund may also invest in
certain fixed income securities. Because securities fluctuate in value, the
shares of the Fund will also fluctuate in value. The Fund's investment in
securities of foreign issuers will subject the Fund to risks associated with
foreign investments. The Fund may also invest in options, futures contracts and
options on futures contracts. See 'Investment Objective and Policies,' 'General
Investment Policies,' 'Risk Factors,' and 'Description of Permitted
Investments.'
Who is the Advisor? Summit Bank Investment Management Division, a division
of Summit Bank, serves as the Advisor of the Trust. See 'The Advisor.'
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 acts as dividend
disbursing agent, shareholder servicing agent and as transfer agent for the
Trust. See 'The Shareholder Servicing Agent.'
Who is the Distributor? SEI Financial Services Company acts as distributor
of the Trust's shares. The Trust has adopted a distribution plan (the 'Class B
Plan') on behalf of the Class B shares pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended (the '1940 Act'). See 'The
Distributor.'
How Do I Purchase and Redeem Shares? Shares may be purchased through a
financial institution, such as Summit Bank, or a broker-dealer that has entered
into a dealer agreement with SEI Financial Services Company ('Intermediaries').
Shares may also be purchased directly through the Distributor. Shareholders may
redeem shares directly through the Distributor. In addition, Intermediaries
through which Shareholders may purchase shares generally stand ready to assist
Shareholders in effecting redemptions of shares held in their Fund accounts.
Purchase and redemption requests may be made on a day on which both the New York
Stock Exchange and the Federal Reserve wire system are open for business
('Business Day'). The minimum initial investment is $1,000. Shares are offered
at net asset value per share plus a maximum sales charge at the time of purchase
of 4%. Shareholders who purchase higher amounts may qualify for a reduced sales
charge. The net asset value per share is determined as of 4:00 p.m., Eastern
time on each Business Day. See 'Purchases of Shares' and 'Redemption of Shares.'
How are Dividends Paid? Substantially all of the net investment income
(exclusive of capital gains) of the Fund is distributed in the form of quarterly
dividends to Shareholders of record on the next to last Business Day of each
quarter. Any capital gain is distributed at least annually. Distributions are
paid in additional shares unless the Shareholder elects to take the payment in
cash. See 'Dividends.'
<PAGE>
3
EXPENSE SUMMARY
SHAREHOLDER TRANSACTION EXPENSES CLASS B
(As a percentage of offering price)
<TABLE>
<CAPTION>
EQUITY
GROWTH
FUND
- ---------------------------------------------------------------------------------------------------------------------
<S> <C>
Maximum sales charge imposed on purchases............................................................... 4.00%
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
<TABLE>
<CAPTION>
EQUITY
GROWTH
FUND
- ---------------------------------------------------------------------------------------------------------------------
<S> <C>
Advisory Fees (after fee waivers)(1).................................................................... .50%
12b-1 Fees.............................................................................................. .25%
Other Expenses(2)....................................................................................... .30%
- ---------------------------------------------------------------------------------------------------------------------
Total Operating Expenses (after fee waivers)(3)......................................................... 1.05%
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Advisor has agreed to voluntarily waive a portion of its fees in an
amount that operates to limit total operating expenses of Class B shares of
the Fund to not more than 1.05% of average daily net assets. The Advisor
reserves the right to terminate its fee waiver at any time in its sole
discretion.
(2) Other Expenses are based on estimated amounts for the current fiscal year.
(3) Absent fee waivers for the Fund, the Advisory Fee would be .75% and Total
Operating Expenses would be 1.30% of the Fund's average daily net assets.
Additional information may be found under 'The Advisor,' 'The Administrator'
and 'The Distributor.'
EXAMPLE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YR. 3 YRS.
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
An investor in the Fund would pay the following expenses on a $1,000 investment assuming (1) 4%
maximum sales charge, (2) 5% annual return and (3) redemption at the end of each time period:
Equity Growth Fund.............................................................................. $ 50 $ 72
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
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 the Fund. The information set forth in the foregoing table
and example relates only to Class B shares. The Trust also offers Class A shares
of the Fund, which are subject to the same expenses except there are no sales
loads or distribution fees. Financial institutions may impose separate fees for
account services on their qualified customers ('Qualified Customers') and on
customers for which they are the record owner of shares for the account. In
addition, a wire redemption charge of $10.00 is imposed for each redemption by
wire. Additional information may be found under 'The Advisor,' 'The
Administrator,' 'The Shareholder Servicing Agent' and 'The Distributor.'
The rules of the Securities and Exchange Commission require that the maximum
sales charge be reflected in the above table. However, certain investors may
qualify for reduced sales charges. See 'Purchase and Redemption of Shares.'
Long-term shareholders may pay more than the equivalent of the maximum front-end
sales charges otherwise permitted by the Conduct Rules (the 'Rules') of the
National Association of Securities Dealers, Inc. ('NASD'). The Trust intends to
operate the Class B distribution plan in accordance with its terms and with the
NASD Rules concerning sales charges.
<PAGE>
4
THE TRUST
THE PILLAR FUNDS (the 'Trust') is an open-end management investment company that
consists of diversified and non-diversified portfolios. The Trust offers units
of beneficial interest ('shares') in sixteen separate investment portfolios.
Shareholders may purchase shares in each portfolio (except for the U.S. Treasury
Securities Plus Money Market Fund) through two separate classes of shares (Class
A and Class B) which provide for variations in distribution costs, voting
rights, sales load, minimum investment, redemption fees, transfer agency fees
and dividends. Except for these differences between classes, each share of each
portfolio represents an undivided proportionate interest in that portfolio. This
Prospectus relates to the Class B shares of the Trust's Equity Growth Fund (the
'Fund'), a diversified mutual fund. Information regarding the Trust's other
portfolios and the Class A shares of the Fund is contained in separate
prospectuses that may be obtained from the Trust's Distributor, SEI Financial
Services Company, 680 East Swedesford Road, Wayne, Pennsylvania 19087 or by
calling 1-800-932-7782.
SHARES OF THE TRUST ARE NOT DEPOSITS, OBLIGATIONS OR ACCOUNTS (TRUST OR
OTHERWISE) OF, OR INSURED, GUARANTEED OR ENDORSED BY, ANY BANK (INCLUDING SUMMIT
BANK OR ITS AFFILIATES OR CORRESPONDENTS), ANY STATE OR STATE AGENCY, THE
FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC), THE U.S. GOVERNMENT OR ANY U.S.
GOVERNMENT AGENCY.
SHARES OF THE TRUST ARE SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF
THE PRINCIPAL AMOUNT INVESTED. SEE 'INVESTMENT OBJECTIVE AND POLICIES--RISK
FACTORS.'
A SALES CHARGE IS IMPOSED BY THE FUND AT THE TIME OF PURCHASE. SEE 'PURCHASE OF
SHARES--OTHER INFORMATION REGARDING PURCHASES.'
INVESTMENT OBJECTIVE AND POLICIES
THE EQUITY GROWTH FUND
The investment objective of the Fund is long-term growth of capital. There is no
assurance that the investment objective will be met.
The Fund will normally be as fully invested as practicable in equity securities
consisting of common stocks, warrants to purchase common stocks, debt securities
and preferred stocks that are convertible into common stocks and ADRs, EDRs,
CDRs and GDRs. The Advisor will invest in companies that it expects will
demonstrate greater long-term earnings growth than the average company included
in the Standard & Poor's 500 Composite Index (the 'S&P 500 Index'). This method
of investing is based upon the premise that growth in a company's earnings will
eventually translate into growth in the price of its stock.
To the extent that the Fund is not invested in equity securities, the Fund may
invest in the following fixed income securities: obligations issued or
guaranteed as to principal and interest by the U.S. Government, its agencies or
instrumentalities ('U.S. Government Securities'); corporate bonds and debentures
rated in one of the three highest rating categories by a nationally recognized
statistical ratings organization (an 'NRSRO') or determined by the Advisor to be
of comparable quality at the time of purchase, except that as part of its
investment strategy, the Fund may invest up to 5% of its total assets in lower
rated bonds, commonly referred to as 'junk bonds,' rated B or higher by an NRSRO
or determined to be of comparable quality by the Advisor; mortgage-backed
securities consisting of collateralized mortgage obligations ('CMOs') and real
estate mortgage investment conduits ('REMICs') that are rated in one of the top
two rating categories by an NRSRO and which are backed solely by GNMA
certificates or other mortgage pass-throughs issued or guaranteed by the U.S.
Government, its agencies or instrumentalities; and asset-backed securities
secured by company receivables, truck and auto loans, leases and credit card
receivables that are rated in one of the top two rating categories by an NRSRO.
The Fund may also employ certain hedging, income enhancement and risk management
techniques, including the purchase and sale of exchange-listed and
over-the-counter options, futures and options on futures involving equity and
debt securities, aggregates of equity and debt securities and other financial
indices. The Fund may write options and futures only on a covered basis. For a
description of the Fund's permitted investments, see 'Description of Permitted
Investments.'
<PAGE>
5
GENERAL INVESTMENT POLICIES
For temporary defensive purposes during periods when the Advisor determines that
market conditions warrant, the Fund may invest up to 100% of its assets in the
following money market instruments: short-term U.S.Government Securities;
custodial receipts evidencing separately traded interest and principal
components of securities issued by the U.S. Treasury; commercial paper rated in
the highest short-term rating category by an NRSRO or determined by the Advisor
to be of comparable quality at the time of purchase; short-term bank obligations
(certificates of deposit, time deposits and bankers' acceptances) of U.S.
commercial banks with assets of at least $1 billion as of the end of their most
recent fiscal year; and repurchase agreements involving such securities. The
Fund may hold cash for liquidity purposes. To the extent the Fund is engaged in
temporary defensive investing, it will not be pursuing its investment objective.
Securities purchased by the Fund may involve floating or variable interest rates
and may be acquired through a forward commitment or on a when-issued basis.
In addition, the Fund reserves the right to engage in securities lending but has
no present intention to do so. The Fund will only purchase equity securities,
including ADRs, that are traded in the United States on registered exchanges or
the over-the-counter market. However, the Fund reserves the right to invest up
to 25% of its assets in foreign equity securities denominated in foreign
currency and traded on foreign markets, although it currently has no present
intention to do so.
RISK FACTORS
Because the Fund invests in equity securities, its shares will fluctuate in
value. The market value of the convertible securities purchased by the Fund may
also be affected by changes in interest rates, the credit quality of the issuer
and any call provisions.
The market value of the Fund's fixed income securities will fluctuate in
response to interest rate changes and other factors. See, 'Description of
Permitted Investments.' The Fund may invest in junk bonds. These securities are
speculative and are subject to a greater risk of loss of principal and interest
than are investments in higher rated bonds.
The Fund's investments in securities of foreign issuers may subject the Fund to
different risks than those attendant to investments in securities of U.S.
issuers, such as differences in accounting, auditing and financial reporting
standards, the possibility of expropriation or confiscatory taxation, political
instability and greater fluctuations in value due to changes in currency
exchange rates. There may also be less publicly available information with
regard to foreign issuers than domestic issues. In addition, foreign markets may
be characterized by less liquidity, greater price volatility, less regulation
and higher transaction costs than U.S. markets. Moreover, the dividends payable
on the Fund's foreign securities may be subject to foreign withholding taxes,
thus reducing the net amount of income available for distribution to the Fund's
Shareholders.
The Fund may invest in options and futures. There are various risks associated
with options and futures, including that the success of a particular hedging,
income enhancement or risk management technique may depend on an ability to
predict accurately movements in security prices, interest rates or currency
exchange rates; there may be little correlation between the changes in a
security's value and the price of futures or options; a related future or option
may not be liquid; an exchange may impose trading restrictions or limitations;
government regulations may restrict trading in futures and options; and possible
lack of full participation in a rise in the market value of the underlying
security.
PORTFOLIO TURNOVER
The portfolio turnover rate for the Fund is expected to be less than 100%.
INVESTMENT LIMITATIONS
The investment objective and the following investment limitations are
fundamental policies of the Fund. Fundamental policies cannot be changed with
respect to the Fund without the consent of the holders of a majority of the
Fund's outstanding shares.
<PAGE>
6
The Fund may not:
1. Purchase securities of any issuer (except securities issued or guaranteed by
the United States Government, its agencies or instrumentalities and repurchase
agreements involving such securities) if, as a result, more than 5% of the total
assets of the Fund would be invested in the securities of such issuer. This
restriction applies to 75% of the Fund's total assets.
2. Purchase any securities which would cause more than 25% of the total assets
of the Fund to be invested in the securities of one or more issuers conducting
their principal business activities in the same industry, provided that this
limitation does not apply to investments in the obligations issued or guaranteed
by the U.S. Government, its agencies or instrumentalities and repurchase
agreements involving such securities. For purposes of this limitation, (i)
utility companies will be classified according to their services, for example,
gas, gas transmission, electric and telephone will each be considered a separate
industry; (ii) financial service companies will be classified according to the
end users of their services, for example, automobile finance, bank finance and
diversified finance will each be considered a separate industry; (iii)
supranational agencies will be deemed to be issuers conducting their principal
business activities in the same industry; and (iv) governmental issuers within a
particular country will be deemed to be conducting their principal business
activities in the same industry.
3. Make loans, except that the Fund may (a) purchase or hold debt instruments in
accordance with its investment objective and policies; (b) enter into repurchase
agreements; and (c) engage in securities lending as described in this Prospectus
and in the Statement of Additional Information.
The foregoing percentage limitations will apply at the time of the purchase of a
security. Additional investment limitations are set forth in the Statement of
Additional Information.
THE ADVISOR
Summit Bank Investment Management Division, a division of Summit Bank (the
'Advisor'), serves as the Advisor of the Trust. The Advisor makes the investment
decisions for the assets of the Fund and continuously reviews, supervises and
administers the Fund's investment program subject to the supervision of, and
policies established by, the Trustees of the Trust.
Summit Bank, 210 Main Street, Hackensack, New Jersey 07601, was chartered in
1899 and has been exercising trust powers and managing money since 1916. The
Investment Management Division began as a separate operating division of the
Bank in 1973. The Bank's investment professionals have, on average, over 20
years of experience in investment management. As of October 31, 1996, total
assets under management were approximately $6.7 billion.
Summit Bank is a wholly-owned subsidiary of Summit Bancorp, an interstate bank
holding company with $22 billion in assets and over 325 banking offices in New
Jersey and Eastern Pennsylvania as of October 31, 1996.
John Guarino is a Vice President of the Advisor and has managed the Fund since
its inception. Prior to joining Summit Bank in April, 1985, Mr. Guarino was a
Portfolio Manager with First National State Bank.
The Advisor is entitled to a fee, which is calculated daily and paid monthly, at
an annual rate of .75% of the average daily net assets of the Fund. The Advisor
has voluntarily agreed to waive all or a portion of its fees in order to limit
the operating expenses of Class B shares of the Fund to 1.05%. The Advisor
reserves the right to terminate its fee waiver at any time in its sole
discretion.
Summit Bank has also entered into a Custodian Agreement with the Trust, under
which it provides all securities safekeeping services as required by the Fund
and the 1940 Act. The Trust pays Summit Bank (referred to herein in its
custodial capacity as the 'Custodian') a custodian fee, which is calculated
daily and paid monthly, at an annual rate of .025% of the average daily net
assets of the Fund.
THE ADMINISTRATOR
SEI Fund Resources (the 'Administrator') serves as the Administrator of the
Trust. The Administrator provides the Trust with administrative services, other
than investment advisory services, including all regulatory reporting, necessary
office space, equipment, personnel and facilities.
<PAGE>
7
The Administrator is entitled to a fee, which is calculated daily and paid
monthly, at an annual rate of .20% of the average daily net assets of the Fund.
THE SHAREHOLDER SERVICING AGENT
SEI Fund Resources acts as the dividend disbursing agent, shareholder servicing
agent and transfer agent for the Trust.
THE DISTRIBUTOR
SEI Financial Services Company (the 'Distributor'), a wholly-owned subsidiary of
SEI Corporation, acts as the Distributor for the Trust.
The Class B shares of the Fund are subject to a distribution plan dated February
28, 1992 ('Class B Plan'). As provided in the Distribution Agreement and the
Class B Plan, the Trust will pay the Distributor a fee of .25% of the average
daily net assets of the Fund's Class B shares. The Distributor may apply this
fee toward: a) compensation for its services in connection with distribution
assistance or provision of shareholder services; or b) payments to financial
institutions and intermediaries such as banks (including Summit Bank), savings
and loan associations, insurance companies, and investment counselors,
broker-dealers, and the Distributor's affiliates and subsidiaries as
compensation for services, reimbursement of expenses incurred in connection with
distribution assistance, or provision of shareholder services. The Class B Plan
is characterized as a compensation plan since the distribution fee will be paid
to the Distributor without regard to the distribution or shareholder service
expenses incurred by the Distributor or the amount of payments made to financial
institutions and intermediaries. The Fund may also execute brokerage or other
agency transactions through an affiliate of the Advisor or through the
Distributor for which such affiliate or the Distributor receives compensation.
Class A shares of the Fund are offered without distribution fees or sales loads
(i) to institutional investors (including Summit Bank, its affiliates and
correspondent banks) for the investment of their own funds, (ii) to individuals
and institutions (including Summit Bank, its affiliates and correspondent banks)
for the investment of funds held by such individuals or institutions in a
fiduciary, agency, custodial or other representative capacity if such
individuals or institutions are able to provide complete shareholder
recordkeeping services with respect to shares purchased and held in such
capacity, and (iii) any qualified customer who has entered into an agreement
with Summit Bank, its affiliates or correspondent banks ('Qualified Customers').
Class B shares of the Fund are offered to all persons. Consequently, it is
possible that individuals and institutions may offer different classes of shares
of the Fund to their customers and thus receive different compensation with
respect to different classes of shares. In addition, individuals and
institutions that are the record owner of shares for the account of their
customers may impose separate fees for account services to their customers.
PURCHASE OF SHARES
Shares of the Fund may be purchased through a financial institution, such as
Summit Bank, or a broker-dealer that has entered into a dealer agreement with
the Distributor. Shares may also be purchased directly through the Distributor
by mail, by telephone, or by wire.
Shares of the Fund are sold on a continuous basis and may be purchased on any
Business Day. The minimum initial investment in the Trust is $1,000; however,
the minimum investment may be waived at the Distributor's discretion. All
subsequent purchases must be at least $50.
Generally, a purchase order will be effective as of the Business Day received by
the Distributor if the Distributor receives the order and payment before 4:00
p.m., Eastern time, on such Business Day.
PURCHASES THROUGH INTERMEDIARIES
Customers should contact their Intermediary for information about the
institution's procedures for purchasing shares of the Fund and any charges for
services provided by the institution. Intermediaries may impose an earlier
cut-off time for receipt of purchase orders directed through them to allow for
processing and transmittal of these orders to the Distributor for effectiveness
the same day. In addition, state securities laws may require banks and financial
institutions purchasing shares for their customers to register as dealers
pursuant to state laws.
<PAGE>
8
DIRECT PURCHASES
By Mail
Investors may purchase shares of the Fund by completing and signing an Account
Application form and mailing it, along with a check (or other negotiable bank
instrument or money order) payable to 'The Pillar Funds (Fund Name),' P.O. Box
8523, Boston, MA 02266-8523. Third party checks, credit cards, credit card
checks and cash will not be accepted. When purchases are made by check,
redemptions will not be allowed until the investment being redeemed has been in
the account for 10 Business Days. Orders by mail will be executed upon receipt
of payment. If an investor's check does not clear, the purchase will be
cancelled and the investor could be liable for any losses or fees incurred.
Subsequent purchases of shares may be made at any time by mailing a check (or
other negotiable bank draft or money order) to the above listed address.
Account Application forms can be obtained by calling the Distributor at
1-800-932-7782.
By Telephone or by Wire
If your Account Application has been previously received, you may also purchase
shares by telephone or by wire. To buy shares by telephone or by wire, call the
Distributor toll-free at 1-800-932-7782. Shares cannot be purchased by Federal
Reserve wire on days which the New York Stock Exchange is closed and on federal
holidays upon which wire transfers are restricted.
Automatic Investment Plan (AIP)
A Shareholder may also arrange for periodic additional investments in the Fund
through automatic deductions by Automated Clearing House ('ACH') wire transfer
from a checking account by completing an Optional Services Form. The minimum
pre-authorized investment amount is $50 per month. An Optional Services Form may
be obtained by contacting the Distributor at 1-800-932-7782.
OTHER INFORMATION REGARDING PURCHASES
A purchase order for shares will be executed at a per share price equal to the
net asset value next determined after the receipt of the purchase order by the
Distributor plus any applicable sales charge (the 'offering price').
Orders by telephone will not be executed until payment has been received. If a
check received does not clear, the purchase will be cancelled and the investor
could be liable for any losses or fees incurred. No certificates representing
shares will be issued.
The net asset value per Class B share of the Fund is determined by dividing the
total market value of the Fund's investments and other assets that are allocated
to Class B shares, less any liabilities that are allocated to Class B shares, by
the total outstanding Class B shares of the Fund. The Fund may use a pricing
service to provide market quotations. A pricing service may use a matrix system
of valuation to value fixed income securities which considers factors such as
securities prices, yield features, ratings and developments related to a
specific security. Net asset value per share is determined as of 4:00 p.m.,
Eastern time, on each Business Day. Purchases will be made in full and
fractional shares of the Fund calculated to three decimal places. Although the
methodology and procedures are identical, the net asset value per share of
classes within the Fund may differ because of the distribution expenses charged
to Class B shares.
The following table shows the regular sales charge on Class B shares of the Fund
to a 'single purchaser' (defined below) together with the reallowance paid to
dealers and the agency commission paid to brokers (collectively the
'commission'):
<PAGE>
9
<TABLE>
<CAPTION>
SALES CHARGE REALLOWANCE AND
AS A BROKERAGE
PERCENTAGE OF SALES CHARGE AS COMMISSION AS
AMOUNT OF OFFERING PERCENTAGE OF NET PERCENTAGE OF
PURCHASE PRICE AMOUNT INVESTED OFFERING PRICE
- ------------ ------------- ----------------- ---------------
<S> <C> <C> <C>
$0-99,999 4.00% 4.17% 3.50%
$100,000-
249,999 3.00% 3.10% 2.70%
$250,000-
499,999 2.00% 2.05% 1.80%
$500,000-
999,999 1.00% 1.01% .90%
$1,000,000
and above .00% .00% .00%
</TABLE>
The commissions shown in the table apply to sales through financial
institutions. Under certain circumstances, some financial institutions,
including Summit Bank and its affiliates, will be reallowed the entire sales
charge imposed on purchases of Class B shares and may, therefore, be deemed to
be 'underwriters' under the Securities Act of 1933, as amended.
Right of Accumulation
In calculating the sales charge rates applicable to current purchases of the
Fund's shares, a 'single purchaser' is entitled to cumulate current purchases
with the net purchases of previously purchased shares of the Fund and other
investment portfolios of The Pillar Funds (together with the Fund, the 'Funds')
which are sold subject to a comparable sales charge.
The term 'single purchaser' refers to (i) an individual, (ii) an individual and
spouse purchasing shares of a Fund for their own account or for trust or
custodial accounts for their minor children, or (iii) a fiduciary purchasing for
any one trust, estate or fiduciary account, including employee benefit plans
created under Sections 401 or 457 of the Internal Revenue Code of 1986, as
amended (the 'Code'), including related plans of the same employer. To be
entitled to a reduced sales charge based upon shares already owned, the investor
must ask the Distributor for such entitlement at the time of purchase and
provide the account number(s) of the investor and, if applicable, the investor
and spouse, their minor children, and give the ages of such children. The Fund
may amend or terminate this right of accumulation at any time prior to
subsequent purchases.
Letter of Intent
By initially investing at least $1,000 and submitting a Letter of Intent to the
Distributor, a 'single purchaser' may purchase shares of the Fund and the other
Funds during a 13-month period at the reduced sales charge rates applying to the
aggregate amount of the intended purchases stated in the Letter. The Letter may
apply to purchases made up to 90 days before the date of the Letter.
Other Circumstances
No sales charge is imposed on shares of the Fund: (i) issued in plans of
reorganization, such as mergers, asset acquisitions and exchange offers, to
which the Trust is a party; (ii) sold to dealers or brokers that have a sales
agreement with the Distributor, for their own account or for retirement plans
for their employees or sold to present employees of dealers or brokers that
certify to the Distributor at the time of purchase that such purchase is for
their own account; (iii) sold to investors who are present or retired employees
of Summit Bank or one of its affiliates; (iv) sold to investors who are present
employees of any entity which is a current service provider to the Trust; or (v)
sold to any qualified customer who has entered into an agreement with Summit
Bank, its affiliates or correspondent banks.
The Trust reserves the right to reject a purchase order when the Distributor
determines that it is not in the best interest of the Fund or its Shareholders
to accept such order.
EXCHANGES
Some or all of the shares of the Fund for which payment has been received (i.e.,
an established account) may be exchanged for shares, at their net asset value,
of other Funds within the Trust with similar, lower or no sales loads. Exchanges
will be made only after instructions in writing or by telephone (an 'Exchange
Request') are received for an established account by the Distributor.
Shareholders may effect exchanges of shares directly through the Distributor.
Additionally, Intermediaries, through which Shareholders may purchase shares,
generally stand ready to assist Shareholders in effecting through the
Distributor exchanges of shares held in Fund accounts. Shareholders wishing to
effect an exchange with the assistance of an Intermediary should contact that
<PAGE>
10
Intermediary for information about exchange procedures and cut-off times.
If an Exchange Request in good order is received by the Distributor by 4:00
p.m., Eastern time, on any Business Day, the exchange usually will occur on that
day. Any Shareholder who wishes to make an exchange must have received a current
prospectus of the Fund in which he or she wishes to invest before the exchange
will be effected.
A description of the above and other plans and privileges by which a sales
charge may be reduced is set forth in the 'Shareholder Services' section of the
Statement of Additional Information.
REDEMPTION OF SHARES
Shares may be redeemed without charge on any Business Day at their net asset
value. Redemption requests received in good order by 4:00 p.m., Eastern time,
will be effective on the Business Day received. Requests received after 4:00
p.m. will be effective on the next Business Day.
REDEMPTIONS THROUGH INTERMEDIARIES
Intermediaries, through which Shareholders may purchase shares, generally stand
ready to assist Shareholders in effecting through the Distributor redemptions of
shares held in Fund accounts. Shareholders wishing to effect a redemption with
the assistance of an Intermediary should contact that Intermediary for
information about redemption procedures and cut-off times.
DIRECT REDEMPTIONS
Shares may be redeemed directly through the Distributor by mail, by telephone or
by wire.
By Mail
A written request for redemption must be received by the Distributor in order to
constitute a valid request for redemption. The Distributor may require that the
signature on the written request be guaranteed by a commercial bank or by a
member firm of a domestic stock exchange. The signature guarantee requirement
will be waived if all of the following conditions apply: (1) the redemption is
for $5,000 worth of shares or less, (2) the redemption check is payable to the
Shareholder(s) of record, and (3) the redemption check is mailed to the
Shareholder(s) at the address of record. The Shareholder may also have the
proceeds mailed to a commercial bank account previously designated on the
Account Application or by written instruction to the Distributor. There is no
charge for having redemption requests mailed to a designated bank account.
By Telephone
Shares may be redeemed by telephone if the Shareholder elects that option on the
Account Application. The Shareholder may have the proceeds mailed to his or her
address or mailed or wired to a commercial bank account previously designated on
the Account Application. Payment on redemption will be made as promptly as
possible and, in any event, within seven Business Days after the redemption
order is effective. Wire redemption requests may be made by the Shareholder by
calling the Distributor at 1-800-932-7782. A $10.00 wire redemption charge will
be added to the amount of the redemption. Shareholders may not close their
accounts by telephone.
Neither the Trust nor its transfer agent will 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 and its
transfer agent will each employ reasonable procedures to confirm that
instructions communicated by telephone are genuine, including requiring a form
of personal identification prior to acting upon instructions received by
telephone and recording telephone instructions. 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 the redemption order by other means.
Systematic Withdrawal Plan (SWP)
The Fund offers a Systematic Withdrawal Plan which may be utilized by
Shareholders who wish to receive regular distributions from their account. Upon
commencement of the SWP, the account must have a current value of $1,000 or
more. Shareholders may elect to receive automatic payments by check or ACH wire
transfer of $50 or more on a monthly or quarterly basis. An Optional Services
Form may be obtained by contacting the Distributor at 1-800-932-7782.
<PAGE>
11
OTHER INFORMATION REGARDING REDEMPTIONS
All redemption orders are effected at the net asset value per share next
determined after receipt of a valid request for redemption, as described above.
Net asset value per share is determined as of 4:00 p.m., Eastern time, on each
Business Day. Payment to Shareholders for shares redeemed will be made within
seven days after receipt by the Distributor of the request for redemption.
At various times, the Fund may be requested to redeem shares for which it has
not yet received good payment in connection with a purchase. In such
circumstances, the forwarding of redemption proceeds may be delayed until such
payment has been collected. The Fund intends to pay cash for all shares
redeemed, but under abnormal conditions that make payment in cash unwise,
payment may be made wholly or partly in portfolio securities with a market value
equal to the redemption price. In such cases, an investor may incur brokerage
costs in converting such securities to cash.
Due to the relatively high cost of handling small investments, the Fund reserves
the right to redeem, at net asset value, the shares of any Shareholder if,
because of redemptions of shares by or on behalf of the Shareholder, the account
of such Shareholder in the Fund has a value of less than $1,000, the minimum
initial purchase amount. Accordingly, an investor purchasing shares of any Fund
in only the minimum investment amount may be subject to such involuntary
redemption if he or she thereafter redeems any of these shares. Before the Fund
exercises its right to redeem such shares and to send the proceeds to the
Shareholder, the Shareholder will be given notice that the value of the shares
in his or her account is less than the minimum amount and will be allowed 60
days to make an additional investment in the Fund in an amount which will
increase the value of the account to at least $1,000.
See 'Purchase and Redemption of Shares' in the Statement of Additional
Information for examples of when the right of redemption may be suspended.
PERFORMANCE
From time to time, the Fund may advertise total return. These figures will be
based on historical earnings and are not intended to indicate future
performance.
The total return of the Fund refers to the average compounded rate of return on
a hypothetical investment, net of any sales charge imposed, for designated time
periods (including, but not limited to, the period from which the Fund commenced
operations through the specified date), assuming that the entire investment is
redeemed at the end of each period and assuming the reinvestment of all dividend
and capital gain distributions. The Fund's performance may be compared to other
funds or to relevant indices which may calculate total return without reflecting
sales charges, in which case the Fund may advertise its total return in the same
manner. If reflected, sales charges would reduce these total return
calculations. The advertised performance on Class A shares will normally be
higher than for Class B shares because Class A shares are not subject to
distribution expenses and sales loads charged to Class B shares. The actual
return to a Shareholder on Class A shares may be reduced by any administrative
or management charges that may be imposed by individuals or institutions on
their customers for account services. The actual return to Shareholders on Class
B shares will be reduced by the amount of any sales load and distribution
expenses paid in respect of Class B shares.
The Fund may periodically compare its performance to that of: (i) other mutual
funds tracked by mutual fund rating services (such as Lipper Analytical),
financial and business publications and periodicals; (ii) broad groups of
comparable mutual funds; (iii) unmanaged indices which may assume investment of
dividends but generally do not reflect deductions for administrative and
management costs; or (iv) to other investment alternatives. The Fund may quote
Morningstar, Inc., a service that ranks mutual funds on the basis of
risk-adjusted performance. The Fund may use long-term performance of the capital
markets to demonstrate general long-term risk versus reward scenarios and could
include the value of a hypothetical investment in any of the capital markets.
The Fund may also quote financial and business publications and periodicals as
they relate to fund management, investment philosophy, and investment
techniques.
<PAGE>
12
The Fund may quote various measures of volatility and benchmark correlation in
advertising and may compare these measures to those of other funds. Measures of
volatility attempt to compare historical share price fluctuations or total
returns to a benchmark while measures of benchmark correlation indicate how
valid a comparative benchmark might be. Measures of volatility and correlation
are calculated using averages of historical data and cannot be calculated
precisely.
TAXES
The following summary of federal income tax consequences is based on current tax
laws and regulations, which may be changed by legislative, judicial or
administrative action. No attempt has been made to present a detailed
explanation of the federal, state, or local income tax treatment of the Fund or
its Shareholders. Accordingly, Shareholders are urged to consult their tax
advisers regarding specific questions as to federal, state and local income
taxes.
TAX STATUS OF THE FUND
The Fund is treated as a separate entity for federal income tax purposes and is
not combined with the Trust's other Funds. The Fund intends to qualify for the
special tax treatment afforded regulated investment companies under Subchapter M
of the Code, so as to be relieved of federal income tax on that part of its net
investment income and net capital gain (the excess of net long-term capital gain
over net short-term capital loss) which is distributed to Shareholders.
TAX STATUS OF DISTRIBUTIONS
The Fund will distribute substantially 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 gains
will be distributed annually and will be taxed to Shareholders as long-term
capital gains, regardless of how long the Shareholder has held shares. Capital
gains distributions will not qualify for the corporate dividends-received
deduction. The Fund will make annual reports to Shareholders of the federal
income tax status of all distributions.
Dividends declared by the Fund in October, November or December of any year and
payable to Shareholders of record on a date in these months will be deemed to
have been paid by the Fund and received by the Shareholders on December 31 if
paid by the Fund at any time during the following January.
The Fund intends to make sufficient distributions prior to the end of each
calendar year to avoid liability for federal excise tax.
Sale, exchange or redemption of Fund shares is a taxable event to a Shareholder.
Generally, gain or loss on the sale, exchange or redemption of a share will be
capital gain or loss which will be long-term if the share has been held for more
than one year and otherwise will be short-term. However, if a Shareholder
realizes a loss on the sale, exchange or redemption of a share held for six
months or less and has previously received a capital gains distribution with
respect to the share (or any undistributed capital gains of the Fund with
respect to such share are included in determining the Shareholder's long-term
capital gains), the Shareholder must treat the loss as a long-term capital loss
to the extent of the amount of the prior capital gains distribution (or any
undistributed net capital gains of the Fund which have been included in
determining such Shareholder's long-term capital gains). In addition, any loss
realized on a sale or other disposition of shares will be disallowed to the
extent an investor repurchases (or enters into a contract or option to
repurchase) shares within a period of 61 days (beginning 30 days before and
ending 30 days after the disposition of the shares). Investors should
particularly note that this loss disallowance rule will apply to shares received
through the reinvestment of dividends during the 61-day period.
GENERAL INFORMATION
THE TRUST
The Trust was organized as a Massachusetts business trust under a Declaration of
Trust dated September 9, 1991. The Declaration of Trust permits the Trust to
offer separate portfolios of shares and different classes of each portfolio. In
addition to the Fund, the Trust consists of the following portfolios: U.S.
Treasury Securities Money Market Fund, U.S. Treasury Securities Plus Money
Market Fund, Prime
<PAGE>
13
Obligation Money Market Fund, Tax-Exempt Money Market Fund, Short-Term
Investment Fund, New Jersey Municipal Securities Fund, Pennsylvania Municipal
Securities Fund, GNMA Fund, Fixed Income Fund, Intermediate-Term Government
Securities Fund, Equity Value Fund, Equity Income Fund, Mid Cap Value Fund,
Balanced Growth Fund and International Growth Fund. All consideration received
by the Trust for shares of any Fund and all assets of such Fund belong to that
Fund and would be subject 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, registering the shares
under federal laws and filing with state securities commissions, pricing,
insurance expenses, litigation and other extraordinary expenses, brokerage
costs, interest charges, taxes and organization expenses.
From time to time, the Funds may experience relatively large purchases or
redemptions due to asset allocation decisions made by the Advisor for its
clients. These transactions may have a material effect on the Funds, since Funds
that experience redemptions as a result of reallocations may have to sell
portfolio securities and because Funds that receive additional cash will have to
invest it. While it is impossible to predict the overall impact of these
transactions over time, there coud be adverse effects on portfolio management to
the extent that Funds may be required to sell securities at times when they
would not otherwise do so, or receive cash that cannot be invested in an
expeditious manner. There may be tax consequences associated with purchases and
sales of securities, and such sales may also increase transaction costs. The
Advisor is committed to minimizing the impact of these transactions on the Funds
to the extent it is consistent with pursuing the investment objectives of its
asset allocation decisions on the Funds.
TRUSTEES 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 management services to the Trust.
VOTING RIGHTS
Each share held entitles the Shareholder of record to one vote. The Shareholders
of each Fund or class will vote separately on matters relating solely to that
Fund or class. 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 the remaining
Trustees or by Shareholders at a special meeting called upon written request of
Shareholders owning at least 10% of the outstanding shares of the Trust. In the
event that such a meeting is requested the Trust will provide appropriate
assistance and information to the Shareholders requesting the meeting.
REPORTING
The Trust issues unaudited financial information semi-annually and audited
financial statements annually. The Trust furnishes proxy statements and other
reports to Shareholders of record.
SHAREHOLDER INQUIRIES
Shareholder inquiries should be directed to The Pillar Funds, P.O. Box 8523,
Boston, MA 02266-8523.
DIVIDENDS
Substantially all of the net investment income (not including capital gain) of
the Fund is distributed in the form of quarterly dividends to Shareholders of
record on the next to last Business Day of each quarter. If any capital gain is
realized, substantially all of it will be distributed at least annually.
Shareholders automatically receive all income dividends and capital gain
distributions in additional Class B shares at the net asset value next
determined following the record date, unless the Shareholder has elected to take
such payment in cash. Shareholders may change their election by
<PAGE>
14
providing written notice to the Administrator at least 15 days prior to the
distribution.
Dividends and distributions of the Fund are paid on a per-share basis. The value
of each share will be reduced by the amount of the payment. If shares are
purchased shortly before the record date for a dividend or the distribution of
capital gains, a Shareholder will pay the full price for the shares and receive
some portion of the price back as a taxable dividend or distribution.
The amount of dividends payable on Class B shares will be less than the
dividends payable on Class A shares because of the distribution expenses charged
to Class B shares.
COUNSEL AND INDEPENDENT PUBLIC ACCOUNTANTS
Morgan, Lewis & Bockius LLP serves as counsel to the Trust. Arthur Andersen LLP
serves as the independent public accountants of the Trust.
DESCRIPTION OF PERMITTED INVESTMENTS
The following is a description of certain permitted investments and associated
risk factors for the Fund:
AMERICAN DEPOSITARY RECEIPTS ('ADRs'), EUROPEAN DEPOSITARY RECEIPTS ('EDRs'),
CONTINENTAL DEPOSITARY RECEIPTS ('CDRs') and GLOBAL DEPOSITARY RECEIPTS
('GDRs')-- ADRs are securities, typically issued by a U.S. financial institution
(a 'depositary'), that evidence ownership interests in a security or a pool of
securities issued by a foreign issuer and deposited with the depositary. ADRs
include American Depositary Shares and New York Shares. EDRs, which are
sometimes referred to as Continental Depositary Receipts, are securities,
typically issued by a non-U.S. financial institution, that evidence ownership
interests in a security or a pool of securities issued by either a U.S. or
foreign issuer. GDRs are issued globally and evidence a similar ownership
arrangement. Generally, ADRs are designed for trading in the U.S. securities
markets, EDRs are designed for trading in European securities markets and GDRs
are designed for trading in non-U.S. securities markets. ADRs, EDRs, CDRs and
GDRs may be available for investment through 'sponsored' or 'unsponsored'
facilities. A sponsored facility is established jointly by the issuer of the
security underlying the receipt and a depositary, whereas an unsponsored
facility may be established by a depositary without participation by the issuer
of the receipt's underlying security. Holders of an unsponsored depositary
receipt generally bear all the costs of the unsponsored facility. The depositary
of an unsponsored facility frequently is under no obligation to distribute
shareholder communications received from the issuer of the deposited security or
to pass through to the holders of the receipts voting rights with respect to the
deposited securities.
BANKERS' ACCEPTANCES--Bankers' acceptances are bills of exchange or time drafts
drawn on and accepted by a commercial bank. They are used by corporations to
finance the shipment and storage of goods and to furnish dollar exchange.
Maturities are generally six months or less.
CERTIFICATES OF DEPOSIT--Certificates of deposit are interest-bearing
instruments with a specific maturity. They are issued by banks and savings and
loan institutions in exchange for the deposit of funds and normally can be
traded in the secondary market prior to maturity. Certificates of deposit with
penalties for early withdrawal will be considered illiquid.
COMMERCIAL PAPER--Commercial paper is a term used to describe unsecured
short-term promissory notes issued by corporations and other entities.
Maturities on these issues vary from a few to 270 days.
CONVERTIBLE SECURITIES--Convertible securities are corporate securities that are
exchangeble for a set amount of another security at a prestated price.
Convertible securities typically have characteristics similar to both fixed
income and equity securities. Because of the conversion feature, the market
value of convertible securities tends to move with the market value of the
underlying stock. The value of a convertible security is also affected by
prevailing interest rates, the credit quality of the issuer, and any call
provisions.
DERIVATIVES--Derivatives are securities that derive their value from other
securities. The following are considered derivative securities: futures, options
<PAGE>
15
(e.g., puts and calls), options on futures, swap agreements, mortgage-backed
securities (CMOs, REMICs, IOs and POs), when-issued securities and forward
commitments, floating and variable rate securities, convertible securities,
'stripped' U.S. Treasury securities (e.g., Receipts and STRIPs), privately
issued stripped securities (e.g., TGRs, TRs and CATS). See elsewhere in this
'Description of Permitted Investments' for discussions of these various
instruments, and see 'Investment Objective and Policies' for more information
about any investment policies and limitations applicable to their use.
EQUITY SECURITIES--Equity securities represent ownership interests in a company
and consist of common stocks, preferred stocks, warrants to acquire common stock
and securities convertible into common stock. Investments in equity securities
in general are subject to market risks that may cause their prices to fluctuate
over time. The value of convertible equity securities is also affected by
prevailing interest rates, the credit quality of the issuer and any call
provision. Fluctuations in the value of equity securities in which the Fund
invests will cause the net asset value of the Fund to fluctuate.
FIXED INCOME SECURITIES--Fixed Income securities consist of bonds, notes,
debentures and other interest-bearing securities that represent indebtedness.
The market value of the fixed income investments in which the Fund invests will
change in response to interest rate changes and other factors. During periods of
falling interest rates, the values of outstanding fixed income securities
generally rise. Conversely, during periods of rising interest rates, the values
of such securities generally decline. Moreover, while securities with longer
maturities tend to produce higher yields, the prices of longer maturity
securities are also subject to greater market fluctuations as a result of
changes in interest rates. Changes by recognized agencies in the rating of any
fixed income security and in the ability of an issuer to make payments of
interest and principal also affect the value of these investments. Changes in
the value of these securities will not necessarily affect cash income derived
from these securities but will affect the Fund's net asset value.
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS--A purchase of a futures
contract means the acquisition of a contractual right to obtain delivery to the
Fund of the securities or foreign currency called for by the contract at a
specified price during a specified future month. When a futures contract on
securities or currency is sold, the Fund incurs a contractual obligation to
deliver the securities or foreign currency underlying the contract at a
specified price on a specified date during a specified future month. The Fund
may sell stock index futures contracts in anticipation of, or during a market
decline to attempt to offset the decrease in market value of its common stocks
that might otherwise result; and it may purchase such contracts in order to
offset increases in the cost of common stocks that it intends to purchase. The
Fund may enter into futures contracts and options thereon without limitation if
engaged in for 'bona fide' hedging purposes, and also up to 5% of the Fund's
assets for transactions engaged in for other purposes.
The Fund may also purchase and write options to buy or sell futures contracts.
The Fund may write options on futures only on a covered basis. Options on
futures are similar to options on securities except that options on futures give
the purchaser the right, in return for the premium paid, to assume a position in
a futures contract, rather than actually to purchase or sell the futures
contract, at a specified exercise price at any time during the period of the
option.
When the Fund enters into a futures transaction it must deliver to the futures
commission merchant selected by the Fund an amount referred to as 'initial
margin.' This amount is maintained in a segregated account at the custodian
bank. Thereafter, a 'variation margin' may be paid by the Fund to, or drawn by
the Fund from, such account in accordance with controls set for such accounts,
depending upon changes in the price of the underlying securities subject to the
futures contract. In addition, the Fund will segregate cash or other liquid
assets in an amount equal to its obligations under such contract. The Fund will
enter into such futures and options on futures transactions on domestic
exchanges and, to the extent such transactions have been approved by the
Commodity
<PAGE>
16
Futures Trading Commission for sale to customers in the United States, on
foreign exchanges.
Options and futures can be volatile investments and involve certain risks. If
the Advisor applies a hedge at an inappropriate time or judges interest rates
incorrectly, options and futures strategies may lower the Fund's return. The
Fund could also experience losses if the prices of its options and futures
positions were poorly correlated with its other instruments, or if it could not
close out its positions because of an illiquid secondary market.
ILLIQUID SECURITIES--Illiquid securities are securities that cannot be disposed
of within seven business days at approximately the price at which they are being
carried on a Fund's books. Not more than 15% of the total assets of the Fund
will be invested in such instruments. An illiquid security includes a demand
instrument with a demand notice period exceeding seven days, if there is no
secondary market for such security. Restricted securities, including Rule 144A
securities, that meet the criteria established by the Trustees of the Trust will
be considered liquid.
INVESTMENT COMPANIES--The Fund may invest up to 10% of its total assets in
shares of other investment companies. Because of restrictions on direct
investment by U.S. entities in certain countries, investment in other investment
companies may be the most practical or only manner in which an international and
global fund can invest in the securities markets of those countries. Such
investments may involve the payment of substantial premiums above the net asset
value of such issuers' fund securities, and are subject to limitations under the
1940 Act.
The Fund does not intend to invest in other investment companies unless, in the
judgment of the Advisor, the potential benefits of such investment exceed the
associated costs relative to the benefits and costs associated with direct
investments in the underlying securities. As a shareholder in an investment
company, the Fund would bear its ratable share of that investment company's
expenses, including its advisory and administration fees.
OPTIONS--A put option gives the purchaser of the option the right to sell, and
the writer of the option the obligation to buy, the underlying security at any
time during the option period. A call option gives the purchaser of the option
the right to buy, and the writer of the option the obligation to sell, the
underlying security at any time during the option period. The premium paid to
the writer is the consideration for undertaking the obligations under the option
contract. The initial purchase (sale) of an option contract is an 'opening
transaction.' In order to close out an option position, the Fund may enter into
a 'closing transaction,' which is simply the sale (purchase) of an option
contract on the same security with the same exercise price and expiration date
as the option contract originally opened.
The Fund may purchase put and call options to protect against a decline in the
market value of the securities in its portfolio or to protect against an
increase in the cost of securities that the Fund may seek to purchase in the
future. The Fund pays a premium for purchasing put and call options. If price
movements in the underlying securities are such that exercise of the options
would not be profitable for the Fund, loss of the premium paid may be offset by
an increase in the value of the Fund's securities or by a decrease in the cost
of acquisition of securities by the Fund.
The Fund may write covered put and call options as a means of increasing the
yield on its portfolio and as a means of providing limited protection against
decreases in its market value. When the Fund sells an option, if the underlying
securities do not increase or decrease to a price level that would make the
exercise of the option profitable to the holder thereof, the option generally
will expire without being exercised and the Fund will realize as profit the
premium received for such option. When a call option of which the Fund is the
writer is exercised, the Fund will be required to sell the underlying securities
to the option holder at the strike price, and will not participate in any
increase in the price of such securities above the strike price. When a put
option of which the Fund is the writer is exercised, the Fund will be required
to purchase the underlying securities at the strike price, which may be in
excess of the market value of such securities.
The Fund may purchase and write options on an exchange or over-the-counter.
Over-the-counter
<PAGE>
17
options ('OTC options') differ from exchange-traded options in several respects.
They are transacted directly with dealers and not with a clearing corporation,
and therefore entail the risk of non-performance by the dealer. OTC options are
available for a greater variety of securities and for a wider range of
expiration dates and exercise prices than are available for exchange-traded
options. Because OTC options are not traded on an exchange, pricing normally is
done by reference to information from a market maker. It is the position of the
Securities and Exchange Commission that OTC options are illiquid.
The Fund may purchase and write put and call options on foreign currencies
(traded on U.S. and foreign exchanges or over-the-counter markets) to manage its
exposure to exchange rates.
Call options on securities or foreign currency written by the Fund will be
'covered,' which means that the Fund will own an equal amount of the underlying
security or foreign currency. With respect to put options on securities or
foreign currency written by the Fund, the Fund will establish a segregated
account with its Custodian consisting of cash or other liquid assets in an
amount equal to the amount the Fund would be required to pay upon exercise of
the put.
The Fund may purchase and write put and call options on indices and enter into
related closing transactions. Put and call options on indices are similar to
options on securities except that options on an index give the holder the right
to receive, upon exercise of the option, an amount of cash if the closing level
of the underlying index is greater than (or less than, in the case of puts) the
exercise price of the option. This amount of cash is equal to the difference
between the closing price of the index and the exercise price of the option,
expressed in dollars multiplied by a specified number. Thus, unlike options on
individual securities, all settlements are in cash, and gain or loss depends on
price movements in the particular market represented by the index generally,
rather than the price movements in individual securities. The Fund may choose to
terminate an option position by entering into a closing transaction. The ability
of the Fund to enter into closing transactions depends upon the existence of a
liquid secondary market for such transactions.
All options written on indices must be covered. When the Fund writes an option
on an index, it will establish a segregated account containing cash or other
liquid assets with its Custodian in an amount at least equal to the market value
of the option and will maintain the account while the option is open or will
otherwise cover the transaction.
Risk Factors. Risks associated with options transactions include: (1) the
success of a hedging strategy may depend on an ability to predict movements in
the prices of individual securities, fluctuations in markets and movements in
interest rates; (2) there may be an imperfect correlation between the movement
in prices of options and the securities underlying them; (3) there may not be a
liquid secondary market for options; and (4) while the Fund will receive a
premium when it writes covered call options, it may not participate fully in a
rise in the market value of the underlying security.
RECEIPTS--Receipts are sold as zero coupon securities which means that they are
sold at a substantial discount and redeemed at face value at their maturity date
without interim cash payments of interest or principal. This discount is
accreted over the life of the security, and such accretion will constitute the
income earned on the security for both accounting and tax purposes. Because of
these features, such securities may be subject to greater interest rate
volatility than interest-paying investments.
REPURCHASE AGREEMENTS--Repurchase agreements are agreements by which the Fund
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 Fund will have actual or constructive possession
of the security as collateral for the repurchase agreement. The Fund bears a
risk of loss in the event the other party defaults on its obligations and the
Fund is delayed or prevented from its right to dispose of the collateral
securities or if the Fund realizes a loss on the sale of collateral securities.
The Fund will enter into repurchase agreements only with financial institutions
deemed to present minimal risk of
<PAGE>
18
bankruptcy during the term of the agreement based on established guidelines.
Repurchase agreements are considered loans under the 1940 Act.
TIME DEPOSITS--Time deposits are non-negotiable receipts issued by a bank in
exchange for the deposit of funds. Like a certificate of deposit, it earns a
specified rate of interest over a definite period of time; however, it cannot be
traded in the secondary market. Time deposits maturing in more than seven days
are considered to be illiquid securities.
U.S. 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').
U.S. 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, the Federal Home Loan Mortgage Corporation, the Federal
Land Banks and the U.S. Postal Service. Some of these securities are supported
by the full faith and credit of the U.S. Treasury (e.g., Government National
Mortgage Association), 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., Federal National
Mortgage Association). Guarantees of principal by agencies or instrumentalities
of the U.S. Government may be a guarantee of payment at the maturity of the
obligation so that in the event of a default prior to maturity there might not
be a market and thus no means of realizing on the obligation prior to maturity.
Guarantees as to the timely payment of principal and interest do not extend to
the value or yield of these securities nor to the value of the Fund's shares.
VARIABLE OR FLOATING RATE INSTRUMENTS--Certain obligations may carry variable
or floating rates of interest, and may involve a conditional or unconditional
demand feature. Such instruments bear interest at rates that are not fixed, but
which vary with changes in specified market rates or indices. The interest rates
on these securities may be reset daily, weekly, quarterly or some other reset
period, and may have a floor or ceiling on interest rate changes. There is a
risk that the current interest rate on such obligations may not accurately
reflect existing market interest rates. A demand instrument with a demand notice
exceeding seven days may be considered illiquid if there is no secondary market
for such security.
WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES (EQUITY AND DEBT SECURITIES)--
When-issued or delayed delivery basis transactions involve the purchase of an
instrument with payment and delivery taking place in the future. Delivery of and
payment for these securities may occur a month or more after the date of the
purchase commitment. The Fund will maintain with the Custodian a separate
account with cash or other liquid assets in an amount at least equal to these
commitments. The interest rate, if any, realized on these securities is fixed as
of the purchase date and no interest accrues to the Fund before settlement. Debt
and equity securities are subject to market fluctuation and it is possible that
the market value at the time of settlement could be higher or lower than the
purchase price. Although the Fund generally purchases securities on a
when-issued or forward commitment basis with the intention of actually acquiring
securities for its portfolio, the Fund may dispose of a when-issued security or
forward commitment prior to settlement if it deems appropriate.
<PAGE>
TABLE OF CONTENTS
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<TABLE>
<S> <C>
Summary........................................ 2
Expense Summary................................ 3
The Trust...................................... 4
Investment Objective and Policies.............. 4
Investment Limitations......................... 6
The Advisor.................................... 6
The Administrator.............................. 7
The Shareholder Servicing Agent................ 7
The Distributor................................ 7
Purchase of Shares............................. 7
Redemption of Shares........................... 10
Performance.................................... 11
Taxes.......................................... 12
General Information............................ 12
Description of Permitted Investments........... 14
</TABLE>
<PAGE>
THE PILLAR FUNDS
EQUITY GROWTH FUND
INVESTMENT ADVISOR:
SUMMIT BANK INVESTMENT MANAGEMENT DIVISION,
A DIVISION OF SUMMIT BANK
This Statement of Additional Information is not a prospectus. It is intended to
provide additional information regarding the activities and operations of The
Pillar Funds (the "Trust") and should be read in conjunction with the Trust's
Prospectuses dated ______, 19__ relating to the Equity Growth Fund (the "Fund").
Prospectuses may be obtained through the Distributor, SEI Financial Services
Company, 680 E. Swedesford Road, Wayne, PA 19087-1658, or by calling
1-800-932-7782.
TABLE OF CONTENTS
Investment Objective and Policies....................................... 2
Description of Permitted Investments........................... 2
Investment Limitations.......................................... 6
Management of the Trust ..................................................8
Trustees and Officers of the Trust.............................. 8
The Advisor.................................................... 10
The Administrator.............................................. 11
Fund Transactions....................................................... 11
General ...................................................... 11
Trading Practices and Brokerage................................ 12
The Distributor and the Distribution Plans.............................. 14
Performance............................................................. 15
Performance Information for Predecessor Common Trust and
Collective Investment Fund................................... 15
Calculation of Total Return.................................... 15
Purchase and Redemption of Shares....................................... 15
Shareholder Services.................................................... 15
Determination of Net Asset Value........................................ 17
General Information and History......................................... 18
The Trust...................................................... 18
Description of Shares.......................................... 18
Shareholder Liability.......................................... 18
Limitation of Trustees' Liability.............................. 18
Taxes ............................................................... 19
Experts ............................................................... 20
Financial Statements.................................................... 20
Appendix................................................................A-1
Description of Ratings.........................................A-1
________, 19__
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
DESCRIPTION OF PERMITTED INVESTMENTS
ASSET-BACKED SECURITIES. The Fund may invest in asset-backed securities
including company receivables, truck and auto loans, leases, and credit card
receivables. These securities, like mortgage-backed securities, represent
ownership of a pool of obligations. The payment of principal and interest on
non-mortgage asset-backed securities may be guaranteed up to certain amounts and
for a certain time period by a letter of credit issued by a financial
institution (such as a bank or insurance company) unaffiliated with the issuers
of such securities. In addition, these issues typically have a short to
intermediate maturity structure depending on the paydown characteristics of the
underlying financial assets that are passed through to the security holder. The
purchase of non-mortgage asset-backed securities raises risk considerations
peculiar to the financing of the instruments underlying such securities. For
example, due to the manner in which the issuing organizations may perfect their
interests in their respective obligations, there is a risk that another party
could acquire an interest in the obligations superior to that of the holders of
the asset-backed securities. Also, in most states the security interest in a
motor vehicle must be noted on the certificate of title to perfect a security
interest against competing claims of other parties. Due to the large number of
vehicles involved, however, the certificate of title to each vehicle financed,
pursuant to the obligations underlying the asset-backed securities, usually is
not amended to reflect the assignment of the seller's security interest for the
benefit of the holders of the asset-backed securities. Therefore, the
possibility exists that recoveries on repossessed collateral may not, in some
cases, be available to support payments on those securities. In addition,
various state and federal laws give the motor vehicle owner the right to assert
against the holder of the owner's obligation certain defenses such owner would
have against the seller of the motor vehicle. The assertion of such defenses
could reduce payments on the related asset-backed securities. Insofar as credit
card receivables are concerned, credit card holders are entitled to the
protection of a number of state and federal consumer credit laws, many of which
give such holders the right to set off certain amounts against balances owed on
the credit card, thereby reducing the amounts paid on such receivables. In
addition, unlike most other asset-backed securities, credit card receivables are
unsecured obligations of the card holder. Asset-backed securities entail
prepayment risk, which may vary depending on the type of asset but is generally
less than the prepayment risk associated with mortgage-backed securities.
The development of non-mortgage asset-backed securities is at an earlier stage
than that of mortgage-backed securities. While the market for asset-backed
securities is becoming increasingly liquid, the market for non-mortgage
asset-backed securities is not as well developed as that for mortgage-backed
securities guaranteed by government agencies or instrumentalities. The Advisor
intends to limit purchases of non-mortgage asset-backed securities to securities
that are readily marketable at the time of purchase.
LOWER RATED SECURITIES. The Fund may invest in lower-rated bonds commonly
referred to as "junk bonds" or high yield/high risk securities. These securities
are rated "Ba" or lower by Moody's Investors Service, Inc. ("Moody's") or "BB"
or lower by Standard & Poor's Ratings Group ("S&P"), Fitch Investors Services,
Inc. ("Fitch"), Duff & Phelps, Inc. ("Duff"), IBCA Limited ("IBCA") and Thomson
BankWatch ("Thomson"). These ratings indicate that the obligations are
speculative and may be in default.
Certain Risk Factors Relating to High-Yield, High-Risk Securities.
The descriptions below are intended to supplement the discussion in the
Prospectus under "Risk Factors."
Growth of High Yield Bond, High-Risk Bond Market. The widespread
expansion of government, consumer and corporate debt within the U.S. economy has
made the corporate sector more vulnerable to economic downturns or increased
interest rates. Further, an economic downturn could severely disrupt the market
for lower rated bonds and adversely affect the value of outstanding bonds and
the ability of the issuers to repay principal and interest.
Sensitivity to Interest Rate and Economic Changes. Lower rated bonds are
very sensitive to adverse economic changes and corporate developments. During an
economic down turn or substantial period of rising interest rates, highly
S - 2
<PAGE>
leveraged issuers may experience financial stress that would adversely affect
their ability to service their principal and interest payment obligations, to
meet projected business goals, and to obtain additional financing. If the issuer
of a bond defaulted on its obligations to pay interest or principal or entered
into bankruptcy proceedings, the Fund may incur losses or expenses in seeking
recovery of amounts owed to it. In addition, periods of economic uncertainty and
change can be expected to result in increased volatility of market prices of
high-yield, high-risk bonds and the Fund's net asset value.
Payment Expectations. High-yield, high-risk bonds may contain
redemption or call provisions. If an issuer exercised these provisions in a
declining interest rate market, the Fund would generally replace the security
with a lower yielding security, resulting in a decreased return for investors.
Conversely, a high-yield, high-risk bond's value will decrease in a rising
interest rate market, as will the value of the Fund's assets. If the Fund
experiences significant unexpected net redemptions, this may force it to sell
high-yield, high-risk bonds without regard to their investment merits, thereby
decreasing the asset base upon which expenses can be spread and possibly
reducing the Fund's rate of return.
Liquidity and Valuation. There may be little trading in the secondary
market for particular bonds, which may affect adversely the Fund's ability to
value accurately or dispose of such bonds. Adverse publicity and investor
perception, whether or not based on fundamental analysis, may decrease the
values and liquidity of high-yield, high-risk bonds, especially in a thin
market.
Legislation. Federal laws require the divestiture by federally insured
savings and loan associations of their investments in lower rated bonds and
limit the deductibility of interest by certain corporate issuers of high yield
bonds. These laws could adversely affect the Fund's net asset value and
investment practices, the secondary market for high yield securities, the
financial condition of issuers of these securities and the value of outstanding
high yield securities.
Taxes. The Fund may purchase debt securities (such as zero-coupon or
pay-in-kind securities) that contain original issue discount. Original issue
discount that accrues in a taxable year is treated as earned by the Fund and
therefore is subject to the distribution requirements of the Internal Revenue
Code of 1986, as amended (the "Code"). Because the original issue discount
earned by the Fund in a taxable year may not be represented by cash income, the
Fund may have to dispose of other securities and use the proceeds to make
distributions to Shareholders.
FOREIGN SECURITIES. The Fund may invest in American Depositary Receipts,
American Depositary Shares and New York Shares, and reserves the right to invest
up to 25% of its assets in foreign equity securities denominated in foreign
currencies. These instruments may subject the Fund to investment risks that
differ in some respects from those related to investments in obligations of
U.S.issuers. Such risks include future adverse political and economic
developments, the possible imposition of withholding taxes on interest or other
income, possible seizure, nationalization, or expropriation of foreign deposits,
the possible establishment of exchange controls or taxation at the source,
greater fluctuations in value due to changes in currency exchange rates, or the
adoption of other foreign governmental restrictions that might adversely affect
the payment of principal and interest on such obligations. Such investments may
also entail higher custodial fees and sales commission than domestic
investments. Foreign issuers of securities or obligations are often subject to
accounting treatment and engage in business practices different from those
respecting domestic issuers of similar securities or obligations. Foreign
branches of U.S. banks and foreign banks may be subject to less stringent
reserve requirements than those applicable to domestic branches of U.S. banks.
In addition, foreign markets may be characterized by lower liquidity, greater
price volatility, less regulation and higher transaction costs than U.S.
markets.
ILLIQUID SECURITIES. An illiquid security is a security which cannot be disposed
of within seven days in the usual course of business at approximately the price
at which it is being carried on the Fund's books, and includes repurchase
agreements maturing in more than seven days, time deposits with a withdrawal
penalty, non-negotiable instruments and instruments for which no market exists.
S - 3
<PAGE>
MORTGAGE-BACKED SECURITIES. The Fund may invest in mortgage-backed securities
issued or guaranteed by U.S. Government agencies or instrumentalities such as
the Government National Mortgage Association ("GNMA"), the Federal National
Mortgage Association ("FNMA") and the Federal Home Loan Mortgage Corporation
("FHLMC"). In addition, the Fund may invest in privately issued mortgage-backed
securities. Obligations of GNMA are backed by the full faith and credit of the
U.S. Government. Obligations of FNMA and FHLMC are not backed by the full faith
and credit of the U.S. Government but are considered to be of high quality since
they are considered to be instrumentalities of the United States. The market
value and interest yield of these mortgage-backed securities can vary due to
market interest rate fluctuations and early prepayments of underlying mortgages.
These securities represent ownership in a pool of federally insured mortgage
loans with a maximum maturity of 30 years. However, due to scheduled and
unscheduled principal payments on the underlying loans, these securities have a
shorter average maturity and, therefore, less principal volatility than a
comparable 30-year bond. Since prepayment rates vary widely, it is not possible
to predict accurately the average maturity of a particular mortgage-backed
security. The scheduled monthly interest and principal payments relating to
mortgages in the pool will be "passed through" to investors. Government
mortgage-backed securities differ from conventional bonds in that principal is
paid back to the certificate holders over the life of the loan rather than at
maturity. As a result, there will be monthly scheduled payments of principal and
interest. In addition, there may be unscheduled principal payments representing
prepayments on the underlying mortgages. Although these securities may offer
yields higher than those available from other types of U.S. Government
securities, mortgage-backed securities may be less effective than other types of
securities as a means of "locking in" attractive long-term rates because of the
prepayment feature. For instance, when interest rates decline, the value of
these securities likely will not rise as much as comparable debt securities due
to the prepayment feature. In addition, these prepayments can cause the price of
a mortgage-backed security originally purchased at a premium to decline in price
to its par value, which may result in a loss.
CMOs. The Fund may also invest in mortgage-backed securities issued by
non-governmental entities. The mortgage-backed securities the Fund may purchase
are collateralized mortgage obligations ("CMOs") and real estate mortgage
investment conduits ("REMICs") that are rated in one of the two top categories
by S&P or Moody's and which are backed solely by GNMA certificates or other
mortgage pass-throughs issued or guaranteed by the U.S. Government or its
agencies and instrumentalities. CMOs are securities collateralized by mortgages,
mortgage pass-throughs, mortgage "pay-through" bonds (bonds representing an
interest in a pool of mortgages where the cash flow generated from the mortgage
collateral pool is dedicated to bond repayment), and "mortgage-backed" bonds
(general obligations of the issuers payable out of the issuers' general funds
and additionally secured by a first lien on a pool of single family detached
properties). Many CMOs are issued with a number of classes or series which have
different maturities and are retired in sequence.
Investors purchasing such CMOs in the shortest maturities receive or are
credited with their pro rata portion of the scheduled payments of interest and
principal on the underlying mortgages plus all unscheduled prepayments of
principal up to a predetermined portion of the total CMO obligation. Until that
portion of such CMO obligation is repaid, investors in the longer maturities
receive interest only. Accordingly, the CMOs in the longer maturity series are
less likely than other mortgage pass-throughs to be prepaid prior to their
stated maturity. Although some of the mortgages underlying CMOs may be supported
by various types of insurance, and some CMOs may be backed by GNMA certificates
or other mortgage pass-throughs issued or guaranteed by U.S. Government agencies
or instrumentalities, the CMOs themselves are not generally guaranteed by U.S.
Government agencies or instrumentalities.
REMICs, which were authorized under the Tax Reform Act of 1986, are private
entities formed for the purpose of holding a fixed pool of mortgages secured by
an interest in real property. REMICs are similar to CMOs in that they issue
multiple classes of securities.
Due to prepayments of the underlying mortgage instruments, mortgage-backed
securities do not have a known actual maturity. In the absence of a known
maturity, market participants generally refer to an estimated average life. The
Advisor believes that the estimated average life is the most appropriate measure
of the maturity of a mortgage-backed security. Accordingly, in order to
determine the average maturity of the Fund, the Advisor will use an estimate of
the
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<PAGE>
average life of a mortgage-backed security. An average life estimate is a
function of an assumption regarding anticipated prepayment patterns. The
assumption is 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 could produce somewhat
different average life estimates with regard to the same security. There can be
no assurance that the average life as estimated by the Advisor will be the
actual average life.
SECURITIES LENDING. The Fund may lend securities pursuant to agreements
requiring that the loans be continuously secured by cash, U.S. Government
securities, or any combination of cash and such securities, as collateral equal
at all times to 100% of the market value of the securities lent. Collateral is
marked to market daily. Such loans will not be made if, as a result, the
aggregate amount of all outstanding securities loans for the Fund exceed
one-third of the value of the Fund's total assets taken at fair market value.
The Fund will continue to receive interest or dividends on the securities lent
while simultaneously earning interest on the investment of the cash collateral
in U.S. Government securities. However, the Fund will normally pay lending fees
to such broker-dealers and related expenses from the interest earned on invested
collateral. There may be risks of delay in receiving additional collateral or
risks of delay in recovery of the securities or even loss of rights in the
collateral should the borrower of the securities fail financially. However,
loans are made only to borrowers deemed by the Advisor to be of good standing
and when, in the judgment of the Advisor, the consideration which can be earned
currently from such securities loans justifies the attendant risk. Any loan may
be terminated by either party upon reasonable notice to the other party. The
Fund may use the Distributor or a broker/dealer affiliate of the Advisor as a
broker in these transactions.
REPURCHASE AGREEMENTS. The Fund may invest in repurchase agreements. Repurchase
agreements are agreements by which a person (e.g., a portfolio) obtains a
security and simultaneously commits to return the security to the seller (a
member bank of the Federal Reserve System or a primary securities dealer, as
recognized by the Federal Reserve Bank of New York) at an agreed upon price
(including principal and interest) on an agreed upon date within a number of
days (usually not more than seven) from the date of purchase. The resale price
reflects the purchase price plus an agreed upon market rate of interest which is
unrelated to the coupon rate or maturity of the underlying security. A
repurchase agreement involves the obligation of the seller to pay the agreed
upon price, which obligation is in effect secured by the value of the underlying
security.
Repurchase agreements are considered to be loans by the Fund for purposes of its
investment limitations. The repurchase agreements entered into by the Fund will
provide that the underlying security at all times shall have a value at least
equal to 102% of the resale price stated in the agreement (the Advisor monitors
compliance with this requirement). Under all repurchase agreements entered into
by the Fund, the Custodian or its agent must take possession of the underlying
collateral. However, if the seller defaults, the Fund could realize a loss on
the sale of the underlying security to the extent that the proceeds of sale
including accrued interest are less than the resale price provided in the
agreement including interest. In addition, even though the United States
Bankruptcy Code provides protection for most repurchase agreements, if the
seller should be involved in bankruptcy or insolvency proceedings, the Fund may
incur delay and costs in selling the underlying security or may suffer a loss of
principal and interest if the Fund is treated as an unsecured creditor and
required to return the underlying security to the seller's estate.
VARIABLE AMOUNT MASTER DEMAND NOTES. The Fund may invest in variable amount
master demand notes which may or may not be backed by bank letters of credit.
These notes permit the investment of fluctuating amounts at varying market rates
of interest pursuant to direct arrangements between the Trust, as lender, and
the borrower. Such notes provide that the interest rate on the amount
outstanding varies on a daily, weekly or monthly basis depending upon a stated
short-term interest rate index. Both the lender and the borrower have the right
to reduce the amount of outstanding indebtedness at any time. There is no
secondary market for the notes. It is not generally contemplated that such
instruments will be traded.
WHEN-ISSUED SECURITIES. The Fund may acquire securities on a when-issued basis,
in which case delivery and payment normally take place within 45 days after the
date of commitment to purchase. The Fund will only make commitments to purchase
obligations on a when-issued basis with the intention of actually acquiring the
securities, but may sell them
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<PAGE>
before the settlement date. The when-issued securities are subject to market
fluctuation, and no interest accrues on the security to the purchaser during
this period. The payment obligation and the interest rate that will be received
on the securities are each fixed at the time the purchaser enters into the
commitment. Purchasing obligations on a when-issued basis is a form of
leveraging and can involve a risk that the yields available in the market when
the delivery takes place may actually be higher than those obtained in the
transaction itself. In that case there could be an unrealized loss at the time
of delivery.
Segregated accounts will be established with the Custodian, and the Fund will
maintain cash and other liquid assets in an amount at least equal in value to
the Fund's commitments to purchase when-issued securities. If the value of these
assets declines, the Fund will place additional liquid assets in the account on
a daily basis so that the value of the assets in the account is at all times
equal to the amount of such commitments.
INVESTMENT LIMITATIONS
The following investment limitations are fundamental policies of the Fund which
cannot be changed without the consent of the holders of a majority of the Fund's
outstanding shares. The term "majority of the outstanding shares" means the vote
of (i) 67% or more of the Fund's shares present at a meeting, if more than 50%
of the outstanding shares of the Fund are present or represented by proxy, or
(ii) more than 50% of the Fund's outstanding shares, whichever is less.
The Fund may not:
1. Acquire more than 10% of the voting securities of any one issuer.
2. Borrow money except for temporary or emergency purposes and then only
in an amount not exceeding 10% of the value of total assets. Any
borrowing will be done from a bank and to the extent that such
borrowing exceeds 5% of the value of the Fund'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 Fund shall, within three days
thereafter or such longer period as the Securities and Exchange
Commission 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
for temporary liquidity or emergency purposes. All borrowings in excess
of 5% of the value of the Fund's total assets will be repaid before
making additional investments and any interest paid on such borrowings
will reduce income.
3. Pledge, mortgage or hypothecate assets except to secure temporary
borrowings permitted by (2) above in aggregate amounts not to exceed
10% of total assets taken at current value at the time of the
incurrence of such loan, except as permitted with respect to securities
lending.
4. Purchase or sell real estate or real estate limited partnership
interests; provided that this shall not prevent the Fund from investing
in readily marketable securities of issuers which own or invest in real
estate.
5. 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.
6. Act as an underwriter of securities of other issuers except as it may
be deemed an underwriter in selling the Fund's securities.
7. Purchase securities of other investment companies except as permitted
by the Investment Company Act of 1940, as amended (the "1940 Act"), and
the rules and regulations thereunder. Under these rules and
regulations, as currently in effect, the Fund is prohibited from
acquiring the securities of other investment companies if, as a result
of such acquisition, the Fund owns 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 Fund assets; or
S - 6
<PAGE>
securities (other than treasury stock) issued by all investment
companies represent more than 10% of the total assets of the Fund.
8. Issue senior securities (as defined in the 1940 Act) except in
connection with permitted borrowings as described above or as permitted
by rule, regulation or order of the Securities and Exchange Commission.
The foregoing percentages will apply at the time of the purchase of a security
and shall not be considered violated unless an excess or deficiency occurs
immediately after or as a result of a purchase of such security.
NON-FUNDAMENTAL POLICIES. The following investment policies are non-fundamental
policies which may be changed by the Board of Trustees without shareholder
approval.
The Fund may not:
1. Invest in illiquid securities in an amount exceeding, in the aggregate,
15% of the Fund's total assets.
2. 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 advisor 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.
3. Invest in companies for the purpose of exercising control.
The foregoing percentage limitations (except with respect to the limitation on
investing in illiquid securities) apply at the time of purchase.
MANAGEMENT OF THE TRUST
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 and executive officers of the Trust, their dates of birth and their
principal occupations for the last five years are set forth below. Unless
otherwise noted, the business address of each Trustee and executive officer is
SEI Fund Resources, 680 E. Swedesford Road, Wayne, Pennsylvania 19087-1658.
JAMES B. GRECCO - Trustee - Date of Birth: 02/17/33 - President, Grecco Auto
Body Inc. (1986 - present); President, Grecco Auto Imports, Inc. (1970 -
present); President, Joyce Motor Corp. (1979 - present); President, Grecco Auto
Leasing Inc. (1964 - present); President, Grecco Lincoln Mercury Inc. (1964 -
present).
CHRISTINE H. YACKMAN - Trustee - Date of Birth: 12/30/61 - Executive and
Corporate Officer, Edgeboro Disposal, Inc. and Affiliated Companies (1991 -
present); Officer Manager, Herbert Sand Co., Inc. (1981 - 1986).
ARTHUR L. BERMAN - Trustee - Date of Birth: 07/27/27 - President of Bertek, Inc.
(1972-1994).
RAYMOND KONRAD - Trustee - Date of Birth: 9/17/36 - Chairman and Chief Executive
Officer of American Compressed Gases, Inc. (1961 - present).
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<PAGE>
ROBERT A. NESHER - Chairman of the Board of Trustees* - Date of Birth: 08/17/46
- - Retired since 1994. Director, Executive Vice President of SEI Corporation
(1986-1994). Director and Executive Vice President of the Administrator and
Distributor (1981-1994). Trustee of The Arbor Fund, Marquis Funds(R), Advisors'
Inner Circle Fund, SEI Asset Allocation Trust, SEI Daily Income Trust, SEI Index
Funds, SEI Institutional Managed Trust, SEI International Trust, SEI
Institutional Investments Trust, SEI Liquid Asset Trust, SEI Tax Exempt Trust,
Insurance Investment Products Trust, 1784 Funds(R), The Pillar Funds, Rembrandt
Funds and Stepstone Funds.
DAVID G. LEE - President, Chief Executive Officer - Date of Birth: 4/16/52 -
Senior Vice President of the Distributor since 1993. Vice President of the
Distributor since 1991. President, GW Sierra Trust Funds prior to 1991.
KEVIN P. ROBINS - Vice President, Assistant Secretary - Date of Birth: 4/15/61-
Senior Vice President, General Counsel and Assistant Secretary of SEI, Senior
Vice President, General Counsel and Secretary of the Administrator and the
Distributor since 1994. Vice President and Assistant Secretary of SEI, the
Administrator and Distributor 1992- 1994. Associate, Morgan, Lewis & Bockius LLP
(law firm), 1988- 1992.
KATHRYN L. STANTON - Vice President, Assistant Secretary - Date of Birth:
11/19/58 - Vice President and Assistant Secretary, Deputy General Counsel, Vice
President and Assistant Secretary of SEI, Vice President and Assistant Secretary
of the Administrator and Distributor since 1994. Associate, Morgan, Lewis &
Bockius LLP (law firm), 1989-1994.
RICHARD W. GRANT - Secretary - Date of Birth: 10/25/45 - 2000 One Logan Square,
Philadelphia, PA 19103, Partner of Morgan, Lewis & Bockius LLP (law firm),
Counsel to the Trust, Administrator and Distributor.
SANDRA K. ORLOW - Vice President, Assistant Secretary - Date of Birth: 10/18/53
- - Vice President and Assistant Secretary of the Administrator and Distributor
since 1988.
STEPHEN G. MEYER - CPA, Controller and Chief Financial Officer* - Date of Birth:
7/12/65 - Vice President and Controller of SEI Fund Resources since 1995.
Director, Internal Audit and Risk Management, SEI Corporation, 1992 to 1995.
Senior Associate, Coopers & Lybrand, 1990-1992.
JOSEPH M. LYDON - Vice President, Assistant Secretary - Date of Birth: 9/27/59 -
Director, Business Administration of SEI Fund Resources, April 1995. Vice
President of Fund Group, Dreman Value Management, LP and President of Dreman
Financial Services, Inc. prior to 1995.
TODD CIPPERMAN - Vice President, Assistant Secretary - Date of Birth: 2/14/66 -
Vice President and Assistant Secretary of SEI, the Administrator and the
Distributor since 1995. Associate, Dewey Ballantine (law firm) (1994-1995).
Associate, Winston & Strawn (law firm) (1991-1994).
BARBARA A. NUGENT - Vice President, Assistant Secretary - Date of Birth: 6/18/56
- - Vice President and Assistant Secretary of SEI, the Administrator and
Distributor since 1996. Associate, Drinker Biddle & Reath (law firm), 1994-
1996. Assistant Vice President/Administration, Delaware Service Company, Inc.,
1992-1993; Assistant Vice President, Operations of Delaware Service Company,
Inc., 1988-1992.
MARC H. CAHN - Vice President, Assistant Secretary - Date of Birth: 6/19/57 -
Vice President and Assistant Secretary of SEI, the Distributor and Administrator
since 1996. Associate General Counsel, Barclays Bank PLC, 1995-1996. ERISA
Counsel for First Fidelity Bancorporation , 1994-1995. Associate, Morgan, Lewis
& Bockius LLP, 1989-1994.
- --------------------
* "Interested person" within the meaning of the 1940 Act.
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<PAGE>
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 who are not affiliated
with the Administrator. During the period ended December 31, 1995, the Trust
paid approximately $19,250.00 in fees to the unaffiliated Trustees. Compensation
of officers and Trustees of the Trust affiliated with the Administrator is paid
by the Administrator.
Compensation Table
<TABLE>
<CAPTION>
=============================================================================================================================
Name of Person, Position Aggregate Pension or Retirement Estimated Annual Total Compensation
Compensation From Benefits Accrued As Benefits Upon From Registrant and
Registrant(1) Part of Fund Expenses Retirement Fund Complex Paid to
Trustees for the Fiscal
Year Ended December
31, 1995 (1), (2)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Arthur L. Berman Trustee $5,250.00 N/A N/A $5,250.00 for services
on 1 board
- ----------------------------------------------------------------------------------------------------------------------------
Thomas Ehrhart (3) $3,500.00 N/A N/A $3,500.00 for services
Trustee on 1 board
- ----------------------------------------------------------------------------------------------------------------------------
Raymond Konrad, Trustee $7,000.00 N/A N/A $7,000.00 for services
on 1 board
- ----------------------------------------------------------------------------------------------------------------------------
Pasquale V. Mazzarulli(4) $3,500.00 N/A N/A $3,500.00 for services
Trustee on 1 board
- ----------------------------------------------------------------------------------------------------------------------------
James B. Grecco N/A N/A N/A N/A
Trustee*
- ----------------------------------------------------------------------------------------------------------------------------
Christine H. Yackman N/A N/A N/A N/A
Trustee*
- ----------------------------------------------------------------------------------------------------------------------------
Robert A. Nesher $0 N/A N/A $0
Trustee**
===========================================================================================================================
</TABLE>
(1) Amounts do not include travel expenses.
(2) Mssrs. Konrad and Nesher are not on the Board of Trustees for any other
investment company in the "Fund Complex" (as that term is defined in
the Securities and Exchange Act of 1934, as amended).
(3) Retired effective May 22, 1995.
(4) Retired effective December 7, 1995.
* Trustee elected after the fiscal year ended December 31, 1995.
** A Director who is an "interested person" as defined in the 1940 Act.
THE ADVISOR
The Trust and SUMMIT BANK INVESTMENT MANAGEMENT DIVISION, A DIVISION OF SUMMIT
BANK (the "Advisor"), have entered into an advisory agreement (the "Advisory
Agreement"). The Advisory Agreement provides that the Advisor shall not be
protected against any liability to the Trust or its shareholders by reason of
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard of its obligations or
duties thereunder.
The Advisor will not be required to bear expenses of the Trust to an extent
which would result in the Fund's inability to qualify as a regulated investment
company under provisions of the Code.
The continuance of the Advisory Agreement, after the first two years, must be
specifically approved at least annually (i) by the vote of the Trustees, and
(ii) by the vote of a majority of the Trustees who are not parties to the
Agreement or "interested persons" of any party thereto, cast in person at a
meeting called for the purpose of voting on such approval. The Advisory
Agreement will terminate automatically in the event of its assignment, and is
terminable at any time without penalty by the Trustees of the Trust or, with
respect to the Fund by a majority of the outstanding shares of the
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<PAGE>
Fund, on not less than 30 days' nor more than 60 days' written notice to the
Advisor, or by the Advisor on 90 days' written notice to the Trust.
The Glass-Steagall Act restricts the securities activities of banks such as
Summit Bank, but federal regulatory authorities permit such banks to provide
investment advisory and other services to mutual funds. Should this position be
challenged successfully in court or reversed by legislation, the Trust might
have to make other investment advisory arrangements.
For the fiscal year ended December 31, 1996, the Fund had not commenced
operations and therefore did not pay an advisory fee.
THE ADMINISTRATOR
The Trust and SEI Fund Resources (the "Administrator") are parties to an
Administration Agreement. The Administration Agreement provides that the
Administrator shall not be liable for any error of judgment or mistake of law or
for any loss suffered by 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 thereunder. The Administration Agreement shall remain in effect for
a period of five years after the date of the Agreement and shall continue in
effect for successive periods of two years subject to review at least annually
by the Trustees of the Trust unless terminated by either party on not less than
90 days' written notice to the other party.
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., CUFUND, FMB Funds, Inc., First American Funds, Inc.,
First American Investment Funds, Inc., First American Strategy Funds, Inc.,
Marquis Funds(R), Monitor Funds, Morgan Grenfell Investment Trust, The PBHG
Funds, Inc., The Profit Funds Investment Trust, Rembrandt Funds(R), Santa
Barbara Group of Mutual Funds, Inc., 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.
For the fiscal year ended December 31, 1996, the Fund had not commenced
operations and therefore did not pay administrative fees.
FUND TRANSACTIONS
GENERAL
The Trust has no obligation to deal with any dealer or group of dealers in the
execution of transactions in portfolio securities. Subject to policies
established by the Trustees, the Advisor is responsible for placing the orders
to execute transactions for the Fund. In placing orders, it is the policy of the
Trust to seek to obtain the best net results taking into account such factors as
price (including the applicable dealer spread), the size, type and difficulty of
the transaction involved, the firm's general execution and operational
facilities, and the firm's risk in positioning the securities involved. While
the Advisor generally seeks reasonably competitive spreads or commissions, the
Trust will not necessarily be paying the lowest spread or commission available.
The money market securities in which the Fund invests are traded primarily in
the over-the-counter market. Bonds and debentures are usually traded
over-the-counter, but may be traded on an exchange. Where possible, the Advisor
will
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<PAGE>
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
and underwriting commissions.
TRADING PRACTICES AND BROKERAGE
The Advisor 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 commission charged, 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 Advisor's determination of what are reasonably competitive
rates is based upon the professional knowledge of the Advisor's trading
department as to rates paid and charged for similar transactions throughout the
securities industry. In some instances, the Trust pays a minimal share
transaction cost when the transaction presents no difficulty.
As described above, bonds, debentures and money market securities are bought and
sold directly with a dealer without payment of a brokerage commission. In these
instances, while there is no direct commission charged, there is a spread (the
difference between the buy and sell price) which is the equivalent of a
commission.
The Advisor may allocate, out of all commission business generated by all of the
funds and accounts under management by the Advisor, brokerage business to
brokers or dealers who provide brokerage and research services. These research
services include advice, either directly or through publications or writings, as
to the value of securities, the advisability of investing in, purchasing or
selling securities, and the availability of securities or purchasers or sellers
of securities; furnishing of analyses and reports concerning issuers, securities
or industries; providing information on economic factors and trends, assisting
in determining portfolio strategy, providing computer software used in security
analyses, and providing portfolio performance evaluation and technical market
analyses. Such services are used by the Advisor in connection with its
investment decision-making process with respect to one or more funds and
accounts managed by it, and may not be used exclusively with respect to the fund
or account generating the brokerage.
As provided in the Securities Exchange Act of 1934, higher commissions may be
paid to broker/dealers who provide brokerage and research services than to
broker/dealers who do not provide such services if such higher commissions are
deemed reasonable in relation to the value of the brokerage and research
services provided. Although transactions are directed to broker/dealers who
provide such brokerage and research services, the Trust believes that the
commissions paid to such broker/dealers are not, in general, higher than
commissions that would be paid to broker/dealers not providing such services and
that such commissions are reasonable in relation to the value of the brokerage
and research services provided. In addition, portfolio transactions which
generate commissions or their equivalent are directed to broker/dealers who
provide daily portfolio pricing services to the Trust or who have agreed to
defray other Trust expenses such as custodian fees. Subject to best price and
execution, commissions used for pricing may or may not be generated by the funds
receiving the pricing service.
For the fiscal year ended December 31, 1996, the Fund had not commenced
operations and therefore did not pay commissions on any brokerage transactions,
pursuant to an agreement or understanding, to brokers because of research
services provided by the brokers.
The Advisor may place a combined order for two or more accounts or funds 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 fund. It is believed that the ability
of the accounts to participate in volume transactions will generally be
beneficial to the
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<PAGE>
accounts and funds. 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 Advisor
and the Trust's Board of Directors that the advantages of combined orders
outweigh the possible disadvantages of separate transactions.
Consistent with the Conduct Rules of the National Association of Securities
Dealers, Inc., and subject to seeking best price and execution, the Advisor may,
at the request of the SEI Financial Services Company ("SFS" or the
"Distributor"), give consideration to sales of shares of the Trust as a factor
in the selection of brokers and dealers to execute Trust portfolio transactions.
It is expected that the Trust may execute brokerage or other agency transactions
through the Distributor or Summit Discount Brokerage Co., an affiliate of the
Advisor, both of which are registered broker-dealers, for a commission in
conformity with the 1940 Act, the Securities Exchange Act of 1934, as amended,
and rules promulgated by the Securities and Exchange Commission (the "SEC").
Under these provisions, the Distributor or Summit Discount Brokerage Co. 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 and the Trust expressly permitting the Distributor or
Summit Discount Brokerage Co. to receive and retain such compensation. These
rules further require that commissions paid to the Distributor 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." The Trustees, including
those who are not "interested persons" of the Trust, have adopted procedures for
evaluating the reasonableness of commissions paid to the Distributor and will
review these procedures periodically.
For the fiscal year ended December 31, 1996, the Fund had not commenced
operations and therefore did not pay any brokerage commissions.
"Regular brokers or dealers" of the Trust are the ten brokers or dealers that,
during the most recent fiscal year, (i) received the greatest dollar amounts of
brokerage commissions from the Trust's portfolio transactions, (ii) engaged as
principal in the largest dollar amounts of portfolio transactions of the Trust,
or (iii) sold the largest dollar amounts of the Trust's shares. At December 31,
1996, the Fund had not commenced operations and therefore did not hold any
securities of the Trust's "regular brokers or dealers."
THE DISTRIBUTOR AND THE DISTRIBUTION PLANS
SEI Financial Services Company, a wholly owned subsidiary of SEI, and the Trust
are parties to a distribution agreement ("Distribution Agreement") dated
February 28, 1992, which applies to all classes of shares of the Fund. The
Distributor receives no compensation for distribution of Class A shares.
The Distribution Agreement is renewable annually and may be terminated by the
Distributor, the 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. "Qualified Trustees" are Trustees of the Trust who are not interested
persons and have no financial interest in the Agreement or any related agreement
or plan.
The Class B Distribution Plan adopted by the Class B shareholders (the "Class B
Distribution Plan") provides that the Trust will pay the Distributor a fee of up
to .25% of the Fund's Class B shares' average daily net assets which the
Distributor can use to compensate broker/dealers and service providers,
including Summit Bank and its affiliates, which provide distribution related
services to Class B shareholders or their customers who beneficially own Class B
shares.
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Services under the Class B Distribution Plan may include establishing and
maintaining customer accounts and records; aggregating and processing purchase
and redemption requests from customers; placing net purchase and redemption
orders with the Distributor; automatically investing customer account cash
balances; providing periodic statements to customers; arranging for wires;
answering customer inquiries concerning their investments; assisting customers
in changing dividend options, account designations, and addresses; performing
sub-accounting functions; processing dividend payments from the Trust on behalf
of customers; and forwarding shareholder communications from the Trust (such as
proxies, shareholder reports, and dividend distribution and tax notices) to
these customers with respect to investments in the Trust. Certain state
securities laws may require those financial institutions providing such
distribution services to register as dealers pursuant to state law.
Although banking laws and regulations prohibit banks from distributing shares of
open-end investment companies such as the Trust, according to an opinion issued
to the staff of the SEC by the Office of the Comptroller of the Currency,
financial institutions are not prohibited from acting in other capacities for
investment companies, such as providing shareholder services. Should future
legislative, judicial or administrative action prohibit or restrict the
activities of financial institutions in connection with providing shareholder
services, the Trust may be required to alter materially or discontinue its
arrangements with such financial institutions.
The Trust has adopted the Class B Distribution Plan in accordance with the
provisions of Rule 12b-1 under the 1940 Act which regulates circumstances under
which an investment company may directly or indirectly bear expenses relating to
the distribution of its shares.
Continuance of the Class B Distribution Plan must be approved annually by a
majority of the Trustees of the Trust and by a majority of the Qualified
Trustees. The Class B Distribution Plan requires that quarterly written reports
of amounts spent under the Plan and the purposes of such expenditures be
furnished to and reviewed by the Trustees. The Class B Distribution Plan may be
amended to increase materially the amount which may be spent thereunder without
approval by a majority of the outstanding shares of the Trust. All material
amendments of the Class B Distribution Plan will require approval by a majority
of the Trustees of the Trust and of the Qualified Trustees.
For the fiscal year ended December 31, 1996, the Fund had not commenced
operations and therefore did not incur any distribution expenses.
PERFORMANCE
Performance Information for Predecessor Common Trust and Collective
Investment Funds
The Equity Growth Fund is the successor to a common trust fund and a collective
investment fund (together, the "Common Fund") previously managed by Summit
Bank. A substantial portion of the assets of each Common Fund was transferred
into the Equity Growth Fund in connection with the Fund's commencement of
operations. Set forth below is certain composite performance data for the
Common Funds, which is deemed relevant because each Common Fund was managed
using virtually the same investment objectives, policies and restrictions as
those used by the Fund. Past performance of the Common Funds, as shown in the
table below, may be relevant to your consideration of an investment in the
Equity Growth Fund. The composite performance data, however, is not
necessarily indicative of the future performance of the Fund. Further, each
Common Fund was not subject to certain investment limitations, diversification
requirements, and other restrictions imposed by the 1940 Act and the Code,
which, if they had been imposed, may have adversely affected the Common Fund's
performance.
The Common Funds did not incur expenses that correspond to the advisory,
administrative, and other fees to which the Equity Growth Fund is subject.
Therefore, the operating expenses of the Equity Growth Fund will be different
from, and may be higher than, the operating expenses of the Common Funds.
Composite Average Annual Total Returns For The Common Funds
From Inception _____________, Through _________________
(Adjusted to reflect stated sales load for each class of the Equity Growth Fund)
Since
Common Fund [date]* 1 Year 3 Years 5 Years 10 Years
- ----------- ------- ------ ------- ------- --------
Class A __% __% __% __% __%
Class B (Return with __% __% __% __% __%
4.00% Sales Load)
Class B (Return with __% __% __% __% __%
No Sales Load)
S&P 500 __% __% __% __% __%
Past performance of the Common Funds is no guarantee of future performance
by the Equity Growth Fund.
* The Common Funds consist of the Summit Bank EBF Common Stock Fund and
Summit Bank CTF Capital Growth Fund, which commenced operations on
_________________ and _______________, respectively.
CALCULATION OF TOTAL RETURN
From time to time, the Fund may advertise total return on an "average annual
total return" basis and on an "aggregate total return" basis for various
periods. Average annual total return reflects the average annual percentage
change in the value of an investment in the Fund over the particular measuring
period. Aggregate total return reflects the cumulative percentage change in
value over the measuring period. Aggregate total return is computed according to
a formula prescribed by the SEC. The formula can be expressed as follows: 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 or the life of the fund. The formula for
calculating aggregate total return can be expressed as (ERV/P)-1.
The calculation of total return assumes reinvestment of all dividends and
capital gain distribution on the reinvestment dates during the period and that
the entire investment is redeemed at the end of the period. In addition the
maximum sales charge for the Fund is deducted from the initial $1,000 payment.
Total return may also be shown without giving effect to any sales charges.
As of December 31, 1996, the Fund had not commenced operations and therefore did
not advertise total return.
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PURCHASE AND REDEMPTION OF SHARES
It is currently the Trust's policy to pay for the Fund's redemptions in cash.
The Trust retains the right, however, to alter this policy to provide for
redemptions in whole or in part by a distribution in-kind of securities held by
the Fund in lieu of cash. Shareholders may incur brokerage charges on the sale
of any such securities so received in payment of redemptions. However, a
shareholder will at all times be entitled to aggregate cash redemptions from the
Fund during any 90-day period of up to the lesser of $250,000 or 1% of the
Trust's net assets.
The Trust reserves the right to suspend the right of redemption and/or to
postpone the date of payment upon redemption for any period on which trading on
the New York Stock Exchange is restricted, or during the existence of an
emergency (as determined by the SEC by rule or regulation) as a result of
disposal or valuation of the Fund'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 the Fund for any period during
which the New York Stock Exchange, the Advisor, the Administrator and/or the
Custodian are not open for business.
SHAREHOLDER SERVICES
The following is a description of plans and privileges by which the sale charges
imposed on the Class B shares of the Fund may be reduced.
RIGHT OF ACCUMULATION: A shareholder qualifies for cumulative quantity discounts
when his or her new investment, together with the previous net purchases of that
shareholder in the Trust's other investment portfolios (together with the Fund,
the "Funds") reaches a discount level. See "Purchase and Redemption of Shares"
in the Prospectus for the sales charge on quantity purchases.
LETTER OF INTENT: The reduced sales charges are also applicable to the aggregate
amount of purchases made by any such purchaser previously enumerated within a
13-month period pursuant to a written Letter of Intent provided by the
Distributor, and not legally binding on the signer or the Fund which provides
for the holding in escrow by the Administrator of 5% of the total amount
intended to be purchased until such purchase is completed within the 13-month
period. A Letter of Intent may be dated to include shares purchased up to 90
days prior to the date the Letter is signed. The 13-month period begins on the
date of the earliest purchase. If the intended investment is not completed, the
Administrator will surrender an appropriate number of the escrowed shares for
redemption in order to realize the difference.
DISTRIBUTION INVESTMENT OPTION: Distributions of dividends and capital gains
made by the Fund may be automatically invested in shares of another Fund of the
Trust if shares of that Fund are available for sale. Such investments will be
subject to initial investment minimums, as well as additional purchase minimums.
A shareholder considering the Distribution Investment Option should obtain and
read the prospectus of the other Funds and consider the differences in
objectives and policies before making any investment.
REINSTATEMENT PRIVILEGE: A shareholder who has redeemed his or her shares of the
Fund has a one-time right to reinvest the redemption proceeds in shares of any
of the Trust's Funds at their net asset value as of the time of reinvestment.
Such a reinvestment must be made within 30 days of the redemption and is limited
to the amount of the redemption proceeds. Although redemptions and repurchases
of shares are taxable events, a reinvestment within such 30-day period in the
same fund is considered a "wash sale" and results in the inability to recognize
currently all or a portion of a loss realized on the original redemption for
federal income tax purposes. The investor must notify the Transfer Agent at the
time the trade is placed that the transaction is a reinvestment.
EXCHANGE PRIVILEGE: Subject to the restrictions set forth below, some or all of
the shares of the Fund for which good payment has been received (i.e., an
established account) may be exchanged for shares of other Funds of the Trust
with similar or lower sales loads or for shares of the Trust's Funds which do
not have a sales load, at their net asset value.
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The Trust reserves the right to change the terms and conditions of the exchange
privilege discussed herein, or to terminate the exchange privilege, upon sixty
days' notice. Exchanges will be made only after instructions in writing or by
telephone (an "Exchange Request") are received for an established account by the
Distributor.
A shareholder may exchange the shares of the Fund, for which good payment has
been received, in his or her account at any time, regardless of how long he or
she has held his or her shares.
Each Exchange Request must be in proper form (i.e., if in writing, signed by the
record owner(s) exactly as the shares are registered; if by telephone, proper
account identification is given by the dealer or shareholder of record), and
each exchange must involve either shares having an aggregate value of at least
$1,000 or all the shares in the account. Each exchange involves the redemption
of the shares of the Fund to be exchanged and the purchase either at net asset
value (i.e., without a sales charge) or with the appropriate sales charge, of
the shares of the other Funds. Any gain or loss on the redemption of the shares
exchanged is reportable on the shareholder's federal income tax return, unless
such shares were held in a tax-deferred retirement plan or other tax-exempt
account. If the Exchange Request is received by the Distributor in writing or by
telephone on any business day prior to the close of the New York Stock Exchange,
the exchange usually will occur on that day if all the restrictions set forth
above have been complied with at that time. However, payment of the redemption
proceeds by the Fund, and thus the purchase of shares of the other Funds, may be
delayed for up to seven days if the Fund determines that such delay would be in
the best interest of all of its shareholders. Investment dealers which have
satisfied criteria established by the Fund may also communicate a shareholder's
Exchange Request to the Fund subject to the restrictions set forth above. No
more than five exchange requests may be made in any one telephone Exchange
Request.
The Exchange Privilege may be exercised only in those states where the class of
shares of such other Funds of the Trust may legally be sold.
Stop-Payment Requests: Investors may request a stop payment on checks by
providing the Trust with a written authorization to do so. Oral requests will be
accepted provided that the Trust promptly receives a written authorization. Such
requests will remain in effect for six months unless renewed or canceled. The
Trust will use its best efforts to effect stop-payment instructions, but does
not promise or guarantee that such instructions will be effective. Shareholders
requesting stop payment will be charged a $20 service fee per check which will
be deducted from their accounts.
DETERMINATION OF NET ASSET VALUE
Shares will normally be issued for cash only. Transactions involving the
issuance of shares for securities or assets other than cash will be limited to a
bona fide reorganization, statutory merger or will be limited to other
acquisitions of portfolio securities (except for municipal debt securities
issued by state political subdivisions or their agencies or instrumentalities)
which: meet the investment objectives and policies of the Fund; are acquired for
investment and not for resale; are liquid securities which are not restricted as
to transfer either by law or liquidity of market; and have a value which is
readily ascertainable (and not established only by evaluation procedures) as
evidenced by a listing on the American Stock Exchange, the New York Stock
Exchange or NASDAQ.
The securities of the Fund are valued by the Administrator. The Administrator
may use an independent pricing service to obtain valuations of securities. The
pricing service relies primarily on prices of actual market transactions as well
as trader quotations. However, the service may also use a matrix system to
determine valuations of fixed income securities, which system considers such
factors as security prices, yields, maturities, call features, ratings and
developments relating to specific securities in arriving at valuations. The
procedures of the pricing service and its valuations are reviewed by the
officers of the Trust under the general supervision of the Trustees. Although
the methodology and procedures are identical, the net asset value per share of
Class A and Class B shares of the Fund may differ because of the distribution
expenses charged to Class B shares.
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A pricing service values portfolio securities, which are primarily traded on a
domestic exchange, at the last sale price on that exchange or, if there is no
recent sale, at the last current bid quotation. A Fund security that is
primarily traded on a foreign securities exchange is generally valued at its
preceding closing value on the exchange, provided that if an event occurs after
the security is so valued that is likely to have changed its value, then the
fair value of those securities will be determined through consideration of other
factors by or under the direction of the Board of Trustees. A security that is
listed or traded on more than one exchange is valued at the quotation on the
exchange determined to be the primary market for such security. For valuation
purposes, quotations of foreign securities in foreign currency are converted to
U.S. Dollars equivalent at the prevailing market rate on the day of valuation.
Certain of the securities acquired by the Fund may be traded on foreign
exchanges or over-the counter markets on days on which the Fund's net asset
value is calculated. In such cases, the net asset value of the Fund's shares may
be significantly affected on days when investors can neither purchase nor redeem
shares of the Fund.
GENERAL INFORMATION AND HISTORY
THE TRUST
The Trust is an open-end management investment company established under
Massachusetts law as a Massachusetts business trust under a Declaration of Trust
dated September 9, 1991. The Declaration of Trust permits the Trust to offer
separate series of units of beneficial interest ("shares") and different classes
of shares of each series. This Statement of Additional Information relates to
the shares of the Trust's Equity Growth Fund (the "Fund"). Shareholders may
purchase shares of the Fund through two separate classes (Class A and Class B)
which provide for variations in distribution and transfer agent costs, voting
rights and dividends. In addition, a sales load is imposed on the sale of Class
B shares of certain of the Trust's Funds, including the Fund. Except for
differences between Class A and Class B shares pertaining to distribution and
transfer agent costs, each share of the Fund represents an equal proportionate
interest in the Fund. See "Description of Shares."
DESCRIPTION OF SHARES
The Declaration of Trust authorizes the issuance of an unlimited number of
shares of the Fund each of which represents an equal proportionate interest in
the Fund with each other share. Shares are entitled upon liquidation to a pro
rata share in the net assets of the Fund; shareholders have no preemptive
rights. The Declaration of Trust provides that the Trustees of the Trust may
create additional series of shares or classes of a series. All consideration
received by the Trust for shares of any additional series and all assets in
which such consideration is invested would belong to that series and would be
subject to the liabilities related thereto. Share certificates representing
shares will not be issued.
SHAREHOLDER LIABILITY
The Trust is an entity of the type commonly known as a "Massachusetts business
trust." Under Massachusetts law, shareholders of such a trust could, under
certain circumstances, be held personally liable as partners for the obligations
of the trust. Even if, however, the Trust were held to be a partnership, the
possibility of the shareholders' incurring financial loss for that reason
appears remote because the Trust's Declaration of Trust contains an express
disclaimer of shareholder liability for obligations of the Trust and requires
that notice of such disclaimer be given in each agreement, obligation or
instrument entered into or executed by or on behalf of the Trust or the
Trustees, and because the Declaration of Trust provides for indemnification out
of the Trust property for any shareholder held personally liable for the
obligations of the Trust.
LIMITATION OF TRUSTEES' LIABILITY
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The Declaration of Trust provides that a Trustee shall be liable only for his or
her own willful defaults and, if reasonable care has been exercised in the
selection of officers, agents, employees or investment advisors, shall not be
liable for any neglect or wrongdoing of any such person. The Declaration of
Trust also provides that the Trust will indemnify its Trustees and officers
against liabilities and expenses incurred in connection with actual or
threatened litigation in which they may be involved because of their offices
with the Trust unless it is determined in the manner provided in the Declaration
of Trust that they have not acted in good faith in the reasonable belief that
their actions were in the best interests of the Trust. However, nothing in the
Declaration of Trust shall protect or indemnify a Trustee against any liability
for his or her willful misfeasance, bad faith, gross negligence or reckless
disregard of his or her duties.
TAXES
The following is only a summary of certain additional tax considerations
generally affecting the Fund and its shareholders that are not described in the
Fund's prospectuses. No attempt has been made to present a detailed explanation
of the tax treatment of the Fund or its shareholders and the discussion here and
in the Fund's prospectuses is not intended as a substitute for careful tax
planning.
FEDERAL INCOME TAX
In order to qualify for treatment as a regulated investment company ("RIC")
under the Code, the Fund 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
the excess, if any, of net short-term capital gain over net long-term capital
loss)(the "Distribution Requirement") and also must meet several additional
requirements. Among these requirements are the following: (i) at least 90% of
the Fund'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 foreign currencies, or certain other
income; (ii) the Fund must derive less than 30% of its gross income each taxable
year from the sale or other disposition of stock, securities or certain other
assets held for less than three months; (iii) at the close of each quarter of
the Fund's taxable year, at least 50% of the value of its total assets must be
represented by cash and cash items, U.S. Government securities, securities of
other RICs and other securities, with such other securities limited, in respect
to any one issuer, to an amount that does not exceed 5% of the value of the
Fund'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
Fund's taxable year, not more than 25% of the value of its assets may be
invested in securities (other than U.S. Government securities or the securities
of other RICs) of any one issuer or of two or more issuers which the Fund
controls and which are engaged in the same, similar or related trades of
businesses.
Notwithstanding the Distribution Requirement described above, which only
requires the Fund 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), the
Fund will be subject to a nondeductible 4% 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 for the one-year period ending on
October 31 of that year, plus certain other amounts. The Fund intends to make
sufficient distributions prior to the end of each calendar year to avoid
liability for federal excise tax.
Any gain or loss recognized on a sale or redemption of shares of the Fund by a
shareholder who is not a dealer in securities generally will be treated as a
long-term capital gain or loss if the shares have been held for more than twelve
months and otherwise will be treated as a short-term capital gain or loss.
Distributions from the Fund generally will not be eligible for the dividends
received deduction available to corporate shareholders.
If for any taxable year the Fund does not qualify for the special tax treatment
afforded RICs, all of the taxable income of the Fund will be subject to federal
income tax at regular corporate rates (without any deduction for distributions
to the Fund shareholders). In such event, all distributions made by the Fund
(whether or not derived from tax-exempt interest) would
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<PAGE>
be taxable to shareholders as dividends to the extent of the Fund's earnings and
profits, and such dividend distributions would be eligible for the dividends
received deduction available to corporate shareholders.
Additional Consideration. Dividends and interest received by the Fund may be
subject to income, withholding or other taxes imposed by foreign countries and
United States possessions that would reduce the yield on the Fund's securities.
Tax conventions between certain countries and the United States may reduce or
eliminate these taxes. Foreign countries generally do not impose taxes on
capital gains on investments by foreign investors. If more than 50% of the value
of the Fund's total assets at the close of its taxable year consists of
securities of foreign corporations, the Fund will be eligible to, and may, file
an election with the Internal Revenue Service that will enable shareholders, in
effect, to receive the benefit of the foreign tax credit with respect to any
foreign and United States possessions income taxes paid by the Fund. Pursuant to
an election, the Fund will treat those taxes as dividends paid to its
shareholders. Each shareholder will be required to include a proportionate share
of those taxes in gross income as income received from a foreign source and must
treat the amount so included as if the shareholder had paid the foreign tax
directly. The shareholder may then either deduct the taxes deemed paid by him or
her in computing his or her taxable income or, alternatively, use the foregoing
information in calculation the foreign tax credit (subject to significant
limitations) against the shareholder's federal income tax. If the Fund makes the
election, it will report annually to its shareholders the respective amounts per
share of the Fund's income from sources within, and taxes paid to, foreign
countries and United States possessions.
STATE TAXES
The Fund is not liable for any income or franchise tax in Massachusetts if it
qualifies as a RIC for federal income tax purposes. Distributions by the Fund to
shareholders and the ownership of shares may be subject to state and local
taxes.
EXPERTS
Arthur Andersen LLP serves as independent public accountants to the Trust.
FINANCIAL STATEMENTS
The Fund has not commenced operations and therefore does not have financial
statements.
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APPENDIX
DESCRIPTION OF RATINGS
The following descriptions are summaries of published ratings.
Description of Commercial Paper Ratings
Commercial paper rated A by S&P is regarded by S&P as having the greatest
capacity for timely payment. Issues rated A are further refined by use of the
numbers 1 +,1 and 2, to indicate the relative degree of safety. Issues rated
A-1+ are those with an "overwhelming degree" of credit protection. Those rated
A-1 reflect a "very strong" degree of safety regarding timely payment. Those
rated A-2 have satisfactory capacity to meet its financial commitments.
Commercial paper issues rated Prime-1 by Moody's are judged by Moody's to be of
the "highest" quality on the basis of relative repayment capacity.
The rating Fitch-1 (Highest Grade) is the highest commercial rating assigned by
Fitch Investors Services, Inc. ("Fitch"). Paper rated Fitch-1 is regarded as
having the strongest degree of assurance for timely payment. The rating Fitch-2
(Very Good Grade) is the second highest commercial paper rating assigned by
Fitch which reflects an assurance of timely payment only slightly less in degree
than the strongest issues.
The rating Duff-1 is the highest commercial paper rating assigned by Duff and
Phelps, Inc. ("Duff"). Paper rated Duff-1 is regarded as having very high
certainty of timely payment with excellent liquidity factors which are supported
by ample asset protection. Risk factors are minor. Paper rated Duff-2 is
regarded as having good certainty of timely payment, good access to capital
markets and sound liquidity factors and company fundamentals. Risk factors are
small.
The designation A1 by IBCA indicates that the obligation is supported by a very
strong capacity for timely repayment. Those obligations rated A1+ are supported
by the highest capacity for timely repayment are supported by a strong capacity
for timely repayment, although such capacity may be susceptible to adverse
changes in business, economic or financial conditions.
The rating TBW-1 by Thomson indicates a very high likelihood that principal and
interest will be paid on a timely basis.
Description of Corporate Bond Ratings
Bonds which are rated Aaa by Moody's 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 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. Bonds rated Aa by
Moody's are judged by Moody's to be of high quality by all standards. Together
with bonds rated Aaa, 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 risks appear somewhat larger than in Aaa securities. Bonds which
are rated A possess many favorable investment attributes and are to be
considered as upper-medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Bonds which are rated Baa are considered as medium-grade obligations (i.e., they
are neither highly protected nor poorly secured). Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well. Bonds which are rated Ba are
judged to have speculative elements; their future cannot be considered as
well-assured. Often the protection of interest and principal payments may be
very moderate and thereby not well safeguarded during both good and bad times
over the future. Uncertainty of position
A-1
<PAGE>
characterizes bonds in this class. Bonds which are rated B generally lack
characteristics of the desirable investment. Assurance of interest and principal
payments or of maintenance of other terms of the contract over any long period
of time may be small.
Bonds which are rated Caa are of poor standing. Such issues may be in default or
there may be present elements of danger with respect to principal or interest.
Bonds which are rated Ca represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked shortcomings.
Bonds which are rated C are the lowest rated class of bonds, and issues so rated
can be regarded as having extremely poor prospects of ever attaining any real
investment standing.
Moody's bond ratings, where specified, are applied to senior bank obligations
and insurance company senior policyholder and claims obligations with an
original maturity in excess of one year. Obligations relying upon support
mechanisms such as letters-of-credit and bonds of indemnity are excluded unless
explicitly rated.
Obligations of a branch of a bank are considered to be domiciled in the country
in which the branch is located. Unless noted as an exception, Moody's rating on
a bank's ability to repay senior obligations extends only to branches located in
countries which carry a Moody's sovereign rating. Such branch obligations are
rated at the lower of the bank's rating or Moody's sovereign rating for the bank
deposits for the country in which the branch is located.
When the currency in which an obligation is denominated is not the same as the
currency of the country in which the obligation is domiciled, Moody's ratings do
not incorporate an opinion as to whether payment of the obligation will be
affected by the actions of the government controlling the currency of
denomination. In addition, risk associated with bilateral conflicts between an
investor's home country and either the issuer's home country or the country
where an issuer branch is located are not incorporated into Moody's ratings.
Moody's makes no representation that rated bank obligations or insurance company
obligations are exempt from registration under the U.S. Securities Act of 1933
or issued in conformity with any other applicable law or regulation. Nor does
Moody's represent that any specific bank or insurance company obligation is
legally enforceable or is a valid senior obligation of a rated issuer.
Moody's ratings are opinions, not recommendations to buy or sell, and their
accuracy is not guaranteed. A rating should be weighed solely as one factor in
an investment decision and you should make your own study and evaluation of any
issuer whose securities or debt obligations you consider buying or selling.
Bonds rated AAA have the highest rating S&P assigns to a debt obligation. Such a
rating indicates an extremely strong capacity to pay principal and interest.
Bonds rated AA also qualify as high-quality debt obligations. Capacity to pay
principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in small degree. Debt rated A has a strong capacity
to pay interest and repay principal although it is somewhat more susceptible to
the adverse effects of changes in circumstances and economic conditions than
debt in higher rated categories. Debt rated BBB is regarded as having an
adequate capacity to pay interest and repay principal. Whereas it normally
exhibits adequate protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay interest and
repay principal for debt in this category than in higher rated categories.
Debt rated BB, B, CCC, CC and C is regarded as having significant speculative
characteristics with respect to capacity to pay interest and repay principal. BB
indicates the least degree of speculation and C the highest degree of
speculation. While such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions. Debt rated BB is less vulnerable to nonpayment
than other speculative grade debt. However, it faces major ongoing uncertainties
or exposure to adverse business, financial, or economic conditions that could
lead to the obligor's inadequate capacity to meet its financial commitment on
the obligation. The BB rating category is also used for debt subordinated to
senior debt that is assigned an actual or implied BBB- rating. Debt rated B has
greater vulnerability to default but presently has the capacity to meet interest
payments and principal repayments. Adverse business, financial, or economic
conditions would likely impair the obligor's capacity or willingness to meet its
financial commitment
A-2
<PAGE>
on the obligation. The B rating category also is used for debt subordinated to
senior debt that is assigned an actual or implied BB or BB- rating.
Debt rated CCC has a currently identifiable vulnerability to nonpayment, and is
dependent upon favorable business, financial and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial or economic conditions, the obligor is not likely to
have the capacity to meet its financial commitment on the obligation. An
obligation rated CC is currently highly vulnerable to nonpayment. The C rating
may be used to cover a situation where a bankruptcy petition has been filed or
similar action has been taken, but payments on this obligation are being
continued.
An obligation rated D is in payment default. The D rating category is used when
payments on an obligation are not made on the date due even if the applicable
grace period has not expired, unless S&P believes that such payments will be
made during such grace period. The D rating also will be used upon the filing of
a bankruptcy petition or the taking of a similar action if payments on an
obligation are jeopardized.
Bonds rated AAA by Fitch are 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. Bonds rated AA are 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+'.
Bonds rated A are considered to be investment grade and of high credit quality.
The obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
Bonds rated BBB are considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal is considered
to be adequate. Adverse changes in economic conditions and circumstances,
however, are more likely to have adverse impact on these bonds and, therefore,
impair timely payment. The likelihood that the ratings of these bonds will fall
below investment grade is higher than for bonds with higher ratings. Bonds rated
BB are considered speculative. The obligor's ability to pay interest and repay
principal may be affected over time by adverse economic changes. However,
business and financial alternatives can be identified, which could assist the
obligor in satisfying its debt service requirements. Bonds rated B are
considered highly speculative. While bonds in this class are currently meeting
debt service requirements, the probability of continued timely payment of
principal and interest reflects the obligor's limited margin of safety and the
need for reasonable business and economic activity throughout the life of the
issue.
Bonds rated CCC have certain identifiable characteristics that, if not remedied,
may lead to default. The ability to meet obligations requires an advantageous
business and economic environment. Bonds rated CC are minimally protected.
Default in payment of interest and/or principal seems probable over time. Bonds
rated C are in imminent default in payment of interest or principal.
Bonds rated DDD,DD and D are in default on interest and/or principal payments.
Such bonds are extremely speculative and should be valued on the basis of their
ultimaterecovery value in liquidation or reorganization of the obligor. DDD
represents the highest potential for recovery on these bonds, and D represents
the lowest potential for recovery.
Bonds rated AAA by Duff are considered of the highest credit quality. The risk
factors are negligible, being only slightly more than for risk-free U.S.
Treasury debt. Bonds rated AA+ , AA and AA- are considered to be of high credit
quality. Protection factors are strong. Risk is modest but may vary slightly
from time to time because of economic conditions. Bonds rated A+, A and A- have
protection factors that are average but adequate. However, risk factors are more
variable and greater in periods of economic stress. Bonds rated BBB+, BBB and
BBB- are considered to have below average protection factors but are still
considered sufficient for prudent investment. There is considerable variability
in risk during economic cycles. Bonds rated BB+, BB
A-3
<PAGE>
and BB- are below investment grade but deemed likely to meet obligations when
due. Present or prospective financial protection factors fluctuate according to
industry conditions or company fortunes. Overall quality may move up or down
frequently within this category. Bonds rated B+, B and B- are below investment
grade and possessing risk that obligations will not be met when due. Financial
protection factors will fluctuate widely according to economic cycles, industry
conditions and/or company fortunes. Potential exists for frequent changes in the
rating within this category or into a higher or lower rating grade.
Bonds rated CCC are well below investment grade securities. Considerable
uncertainty exists as to timely payment of principal, interest or preferred
dividends. Protection factors are narrow and risk can be substantial with
unfavorable economic/industry conditions, and/or with unfavorable company
developments.
Bonds rated DD are defaulted debt obligations. Issuer failed to meet scheduled
principal and/or interest payments.
Bonds rated AAA by IBCA are 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.
Bonds rated AA are 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. Bonds rated A are
obligations for which there is low expectation of investment risk. Capacity for
timely repayment of principal and interest is strong although adverse changes in
business, economic or financial conditions may lead to increased investment
risk.
Bonds rated BBB are obligations for which there is currently a low expectation
of investment risk. Capacity for timely repayment of principal and interest is
adequate, although adverse changes in business, economic or financial conditions
are more likely to lead to increased investment risk than for obligations in
other categories. Bonds rated BB are obligations for which there is a
possibility of investment risk developing. Capacity for timely repayment of
principal and interest exists, but is susceptible over time to adverse changes
in business, economic or financial conditions. Bonds rated B are obligations for
which investment risk exists. Timely repayment of principal and interest is not
sufficiently protected against adverse changes in business, economic or
financial conditions.
Bonds rated CCC are obligations for which there is a current perceived
possibility of default. Timely repayment of principal and interest is dependent
on favorable business, economic or financial conditions. Bonds rated CC are
obligations which are highly speculative or which have a high risk of default.
Bonds rated C are obligations which are currently in default.
Bonds rated AAA by Thomson indicate that the ability to repay principal and
interest on a timely basis is very high. Bonds rated AA indicate a superior
ability to repay principal and interest on a timely basis, with limited
incremental risk compared to issues rated in the highest category. Bonds rated A
indicate the ability to repay principal and interest is strong. Issues rated A
could be more vulnerable to adverse developments (both internal and external)
than obligations with higher ratings.
Bonds rated BBB indicate an acceptable capacity to repay principal and interest.
Issues rated BBB are, however, more vulnerable to adverse developments (both
internal and external) than obligations with higher ratings. Bonds rated BBB are
the lowest investment grade category.
While not investment grade, the BB rating suggests that the likelihood of
default is considerably less than for lower-rated issues. However, there are
significant uncertainties that could affect the ability to adequately service
debt obligations. Issues rated B show a higher degree of uncertainty and
therefore greater likelihood of default than higher-rated issues. Adverse
developments could well negatively affect the payment of interest and principal
on a timely basis.
Issues rated CCC clearly have a high likelihood of default, with little capacity
to address further adverse changes in financial circumstances. CC is applied to
issues that are subordinate to other obligations rated CCC and are afforded less
protection in the event of bankruptcy or reorganization. Issues rated D are in
default.
A-4
<PAGE>
PART C: OTHER INFORMATION
Item 24. Financial Statements and Exhibits:
<TABLE>
<S> <C> <C>
(a) Financial Statements
none
(b) Additional Exhibits
(1) Declaration of Trust (Incorporated by Reference to Registration Statement on Form
N-1A, File No. 33-44712, as originally filed with the Securities and Exchange
Commission on December 23, 1991), filed herewith via EDGAR.
(2) By-Laws (Incorporated by Reference to Registration Statement on Form N-1A, File
No. 33-44712, as originally filed with the Securities and Exchange Commission on
December 23, 1991) filed herewith via EDGAR.
(3) Not Applicable.
(4) Not Applicable.
(5)(a) Administration Agreement (Incorporated by Reference to Post-Effective Amendment
No. 1 to Registrant's Registration Statement on Form N-1A, File No. 33-44712, as
originally filed with the Securities and Exchange Commission on September 24, 1992)
filed herewith via EDGAR.
(5)(b) Schedule to the Administration Agreement (Incorporated by Reference to Post-
Effective Amendment No. 6 to Registrant's Registration Statement on Form N-1A,
File No. 33-44712, as originally filed with the Securities and Exchange Commission on
April 28, 1995) filed herewith via EDGAR.
(5)(c) Investment Advisory Agreement with United Jersey Bank Investment Management
Division (the "Advisor")(Incorporated by Reference to Post-Effective Amendment
No. 1 to Registrant's Registration Statement on Form N-1A, File No. 33-44712, as
orginally filed with the Securities and Exchange Commission on September 24, 1992)
filed herewith via EDGAR.
(5)(d) Transfer Agent Agreement (Incorporated by Reference to Post-Effective Amendment
No. 1 to Registrant's Registration Statement on Form N-1A, File No. 33-44712, as
originally filed with the Securities and Exchange Commission on September 24, 1992)
filed herewith via EDGAR.
(5)(e) Investment Advisory Agreement between Registrant and United Jersey Bank filed
herewith via EDGAR.
(5)(f) Investment Sub-Advisory Agreement between the Advisor and Wellington
Management Company filed herewith via EDGAR.
(5)(g) Schedule to the Administration Agreement relating to the Equity Growth Fund, filed
herewith.
(5)(h) Schedule to the Investment Advisory Agreement relating to the Equity Growth Fund, filed
herewith.
(5)(i) Form of Consent to Assignment and Assumption of the Administration Contract, filed herewith.
(6) Distribution Agreement (Incorporated by Reference to Post-Effective Amendment
No. 1 to Registrant's Registration Statement on Form N-1A, File No. 33-44712, as originally
filed with the Securities and Exchange Commission on September 24, 1992) filed herewith via
EDGAR.
</TABLE>
C-1
<PAGE>
<TABLE>
<S> <C> <C>
(7) Not Applicable.
(8)(a) Custodian Agreement (Incorporated by Reference to Post-Effective Amendment No. 1
to Registrant's Registration Statement on Form N-1A, File No. 33-44712, as originally
filed with the Securities and Exchange Commission on September 24, 1992) filed
herewith via EDGAR.
(8)(b) Custodian Agreement between United Jersey Bank and The Bank of California,
National Association (Incorporated by Reference to Post-Effective Amendment No. 5
to Registrant's Registration Statement on Form N-1A, File No. 33-44712, as originally
filed with the Securities and Exchange Commission on February 10, 1995) filed
herewith via EDGAR.
(9) Not Applicable.
(10) Opinion and Consent of Counsel (Incorporated by Reference to Pre-Effective
Amendment No. 2 to Registrant's Registration Statement on Form N-1A, File No. 33-
44712, as originally filed with the Securities and Exchange Commission on March 27,
1992)filed herewith via EDGAR.
(11) Consent of Independent Public Accountants, filed herewith.
(12) Not Applicable.
(13) Not Applicable.
(14) Not Applicable.
(15)(a) Distribution Plan--Class B (Incorporated by Reference to Post-Effective Amendment
No. 1 to Registrant's Registration Statement on Form N-1A, File No. 33-44712, as
originally filed with the Securities and Exchange Commission on September 24, 1992)
filed herewith via EDGAR.
(15)(b) Distribution Plan--U.S. Treasury Securities Plus Money Market Fund (Incorporated by
reference to Post-Effective Amendment No. 2 to Registrant's Registration Statement
on Form N-1A, File No. 33-44712, as originally filed with the Securities and Exchange
Commission on March 1, 1993)filed herewith via EDGAR.
(15)(c) Rule 18F-3 Multiple Class Plan (Incorporated by Reference to Post-Effective
Amendment No. 7 to Registrant's Registration Statement on Form N-1A (File No. 33-
44712), as originally filed with the Securities and Exchange Commission on October 25,
1995)filed herewith via EDGAR.
(16) Performance Quotation Computation.
(24)(a) Powers of Attorney (Incorporated by reference to Post-Effective Amendment No. 5 to
Registrant's Registration Statement on Form N-1A, File No. 33-44712, as originally
filed with the Securities and Exchange Commission on February 10, 1995) filed
herewith via EDGAR.
</TABLE>
C-2
<PAGE>
<TABLE>
<S> <C> <C>
(24)(b) Power of Attorney for Arthur L. Berman (Incorporated by Reference to Post-Effective
Amendment No. 7 to Registrant's Registration Statement on Form N-1A (File No. 33-
44712), as originally filed with the Securities and Exchange Commission on October 25,
1995)filed herewith via EDGAR.
(24)(c) Powers of Attorney for Christine H. Yackman and James B. Grecco, filed herewith.
</TABLE>
Item 25. Persons Controlled by or under Common Control with Registrant
See the Prospectuses and the 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 October 30, 1996,
<TABLE>
<CAPTION>
Number of
Title of Class Record Holders
<S> <C>
Units of beneficial interest, without par value--
U.S. Treasury Securities Money Market Fund--Class A......................... 14
U.S. Treasury Securities Money Market Fund--Class B......................... 84
U.S. Treasury Securities Plus Money Market Fund............................. 234
Prime Obligation Money Market Fund--Class A................................. 933
Prime Obligation Money Market Fund--Class B................................. 316
Tax-Exempt Money Market Fund--Class A....................................... 323
Tax-Exempt Money Market Fund--Class B....................................... 98
Short-Term Investment Fund--Class A......................................... 414
Short-Term Investment Fund--Class B......................................... 59
Fixed Income Fund--Class A.................................................. 726
Fixed Income Fund--Class B.................................................. 412
New Jersey Municipal Securities Fund--Class A............................... 332
New Jersey Municipal Securities Fund--Class B............................... 942
Pennsylvania Municipal Securities Fund--Class A............................. 8
Pennsylvania Municipal Securities Fund--Class B............................. 19
Intermediate-Term Government Securities Fund--Class A 213
Intermediate-Term Government Securities Fund--Class B 163
GNMA Fund--Class A.......................................................... 195
GNMA Fund--Class B.......................................................... 139
Equity Value Fund--Class A.................................................. 365
Equity Value Fund--Class B.................................................. 912
Equity Income Fund--Class A................................................. 420
Equity Income Fund--Class B................................................. 1146
Mid Cap Value Fund--Class A................................................. 143
Mid Cap Value Fund--Class B................................................. 840
Balanced Growth Fund--Class A............................................... 10
Balanced Growth Fund--Class B............................................... 893
International Growth Fund--Class A.......................................... 360
International Growth Fund--Class B.......................................... 207
Equity Growth Fund--Class A................................................. 0
Equity Growth Fund--Class B................................................. 0
</TABLE>
C-3
<PAGE>
Item 27. Indemnification:
Article VIII of the Declaration of Trust filed as Exhibit 1 to the
Registration Statement is incorporated by reference. Insofar as indemnification
for liabilities arising under the Securities Act of 1933 may be permitted to
trustees, directors, officers and controlling persons of the Registrant by the
Registrant pursuant to the Declaration of Trust or otherwise, the Registrant is
aware that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and, therefore,
is unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by trustees, directors, officers or controlling persons of the Registrant
in connection with the successful defense of any act, suit or proceeding) is
asserted by such trustees, directors, officers or controlling persons in
connection with the shares being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act will be
governed by the final adjudication of such issues.
Item 28. Business and Other Connections of Investment Advisor:
Other business, profession, vocation, or employment of a substantial
nature in which each director or principal officer of the Advisor is or has
been, at any time during the last two fiscal years, engaged for his own account
or in the capacity of a director, officer, employee, partner or trustee are as
follows:
<TABLE>
<CAPTION>
Name and Position Name of Connection with
with Investment Advisor Other Company Other Company
----------------------- ------------- ---------------
<S> <C> <C>
Directors:
T. Joseph Semrod--Chairman, Chief Executive
Officer & Director...................... Summit Bancorp. Chairman & CEO
Robert G. Cox, President & Director......... Summit Bancorp. President
John G. Collins, Vice Chairman & Director... Summit Bancorp. Vice Chairman
Bjorn Ahlstrom, Director.................... Volvo North America --
Corporation, Retired
Robert L. Boyle, Director................... William H. Hintelmann Firm Representative
</TABLE>
C-4
<PAGE>
<TABLE>
<CAPTION>
Name and Position Name of Connection with
with Investment Advisor Other Company Other Company
----------------------- ------------- ---------------
<S> <C> <C>
Directors:
- ----------
James C. Brady, Jr., Director............... Mill House Associates, L.P. Partner
Barry D. Brown, Director.................... Princeton Insurance Co. Chairman
T.J. Dermot Dunphy, Director................ Sealed Air Corporation President & CEO
Anne Evans Estabrook, Director.............. Elberon Development Co. Owner
Elinor J. Ferdon, Director.................. Girl Scouts of the USA President
Samuel Gerstein, Esq., Director............. Gerstein, Cohen & Grayson Partner
Richard H. Goldberger, Director............. Linda's Flame Roasted Chicken Chairman
Robert S. Hekemian, Director................ Hekemian & Co., Inc. Chairman & CEO
Thomas C. Jamieson, Jr., Esq., Director..... Jamieson, Moore, Peskin & Chairman, President
Spicer, PA
Vincent P. Langone, Director................ L & S Incorporated --
Francis J. Mertz, Director.................. Farleigh Dickinson University President
George L. Miles, Jr., Director.............. WQED Pittsburgh President & CEO
Bertram B. Miller, Director................. B.B. Miller & Company President
Henry S. Patterson II, Director............. E'town Corporation President
Raymond Silverstein, Director............... Alloy, Silverstein, Shapiro, Consultant
Adams, Mulford & Co.
Orin R. Smith, Director..................... Engelhard Corp. Chairman & CEO
Sylvester L. Sullivan, Director............. Car Rentals, Inc. President
Joseph M. Tabak, Dirrector.................. JPC Enterprises, Inc. President & CEO
Alexander von Summer, Director.............. Alexander Summer Co. Chairman
Robert A. Woodruff, Director................ Woodruff Oil Company President
</TABLE>
Wellington Management Company, LLP ("WMC") is the investment
sub-advisor for the International Growth Fund. The principal address of WMC is
75 State Street, Boston, MA 02109.
The list required by this Item 28 of officers and directors of WMC,
together with information as to any other business, profession, vocation or
employment of substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by WMC pursuant to the Advisers Act (SEC File No. 801-15908).
C-5
<PAGE>
Item 29. Principal Underwriters:
(a) Furnish the name of each investment company (other than the
Registrant) for which each principal underwriter currently
distributing the securities of the Registrant also acts as a principal
underwriter, distributor or investment adviser.
Registrant's distributor, SEI Financial Services Company ("SFS"), acts
as distributor for:
<TABLE>
<PAGE>
<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
CUFUND............................................................ May 1, 1992
STI Classic Funds................................................. May 29, 1992
CoreFunds, Inc. .................................................. October 30, 1992
First American Funds, Inc. ....................................... November 1, 1992
First American Investment Funds, Inc. ............................ November 1, 1992
The Arbor Fund.................................................... January 28, 1993
1784 Funds(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
First American Strategy Funds, Inc. .............................. October 1, 1996
</TABLE>
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.
C-6
<PAGE>
<TABLE>
<CAPTION>
Position and Office Positions and Offices
Name with Underwriter with Registrant
- ---- ---------------- ----------------------
<S> <C> <C>
Alfred P. West, Jr. Director, Chairman & Chief Executive Officer --
Henry H. Greer Director, President & Chief Operating Officer --
Carmen V. Romeo Director, Executive Vice President
& Treasurer --
Gilbert L. Beebower Executive Vice President --
Richard B. Lieb Executive Vice President, President-Investment
Services Division --
Leo J. Dolan, Jr. Senior Vice President --
Carl A. Guarino Senior Vice President --
Jerome Hickey Senior Vice President --
Larry Hutchison Senior Vice President --
Steven Kramer Senior Vice President --
David G. Lee Senior Vice President President & Chief
Executive Officer
William Madden Senior Vice President --
Jack May Senior Vice President --
A. Keith McDowell Senior Vice President --
Dennis J. McGonigle Senior Vice President --
Hartland J. McKeown Senior Vice President --
Barbara J. Moore Senior Vice President --
James V. Morris Senior Vice President --
Steven Onofrio Senior Vice President --
Kevin P. Robins Senior Vice President, General Counsel & Vice President & Assistant
Assistant Secretary Secretary
Robert Wagner Senior Vice President --
Patrick K. Walsh Senior Vice President --
Kenneth Zimmer Senior Vice President --
Robert Aller Vice President --
Marc H. Cahn Vice President & Assistant Secretary Vice President & Assistant
Secretary
Gordon W. Carpenter Vice President --
Todd Cipperman Vice President & Assistant Secretary Vice President & Assistant
Secretary
Robert Crudup Vice President & Managing Director --
Ed Daly Vice President --
Jeff Drennen Vice President --
Mick Duncan Vice President and Team Leader --
Vic Galef Vice President & Managing Director --
Kathy Heilig Vice President --
Michael Kantor Vice President --
Samuel King Vice President --
Kim Kirk Vice President & Managing Director --
Donald H. Korytowski Vice President --
John Krzeminski Vice President & Managing Director --
Robert S. Ludwig Vice President and Team Leader --
Vicki Malloy Vice President and Team Leader --
Carolyn McLaurin Vice President & Managing Director --
W. Kelso Morrill Vice President --
Barbara A. Nugent Vice President & Assistant Secretary Vice President & Assistant
Secretary
</TABLE>
C-7
<PAGE>
<TABLE>
<CAPTION>
Position and Office Positions and Offices
Name with Underwriter with Registrant
- ---- ---------------- ----------------------
<S> <C> <C>
Sandra K. Orlow Vice President & Assistant Secretary Vice President & Assistant
Secretary
Donald Pepin Vice President & Managing Director --
Larry Pokora Vice President --
Kim Rainey Vice President --
Paul Sachs Vice President --
Mark Samuels Vice President & Managing Director --
Steve Smith Vice President --
Daniel Spaventa Vice President --
Kathryn L. Stanton Vice President & Assistant Secretary Vice President & Assistant
Secretary
Wayne M. Withrow Vice President & Managing Director --
William Zawaski Vice President --
James Dougherty Director of Brokerage Services --
</TABLE>
Item 30. Location of Accounts and Records:
Books or other documents required to be maintained by Section 31(a) of
the Investment Company Act of 1940, and the rules promulgated thereunder, are
maintained as follows:
(a) With respect to Rules 31a-1(a); 31a-1(b)(1); (2)(a) and (b);
(3); (6); (8); (12); and 31a-1(d), the required books and records are
maintained at the offices of Registrant's Custodian:
Summit Bank
210 Main Street
Hackensack, NJ 07601
Mitsubishi Global Custody
475 Sansome Street
11th floor
San Francisco, CA 94111
C-8
<PAGE>
(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) With respect to Rules 31a-1(b)(5), (6), (9) and (10) and
31a-1(f), the required books and records are maintained at the principal
offices of the Registrant's Advisor or Sub-Advisor:
Summit Bank Investment Management Division,
a division of Summit Bank
210 Main Street
Hackensack, NJ 07601
Wellington Management Company, LLP
75 State Street
Boston, MA 02109
Item 31. Management Services: None.
Item 32. Undertakings:
Registrant hereby undertakes to file a post-effective amendment, using
financial statements with respect to the Equity Growth Fund, which need not be
certified, within four to six months from the effective date of this Post-
Effective Amendment No. 9.
Registrant hereby undertakes that whenever shareholders meeting the
requirements of Section 16(c) of the Investment Company Act of 1940, as amended
(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 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 each person to whom a prospectus
is delivered with a copy of the Registrant's latest Annual Report to
Shareholders, upon request and without charge.
C-9
<PAGE>
NOTICE
A copy of the Agreement and Declaration of Trust for The Pillar Funds is
on file with the Secretary of State of The Commonwealth of Massachusetts and
notice is hereby given that this Registration Statement has been executed on
behalf of the Trust by an officer of the Trust as an officer and by its Trustees
as trustees and not individually and the obligations of or arising out of this
Registration Statement are not binding upon any of the Trustees, officers, or
shareholders individually but are binding only upon the assets and property of
the Trust.
C-10
<PAGE>
Signatures
Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant has duly caused this Registration Statement No. 33-44712 to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Wayne, Commonwealth of Pennsylvania on the 12 day of November, 1996.
THE PILLAR FUNDS
By: /s/ David G. Lee
----------------------------------
David G. Lee
President & Chief Executive Officer
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 and on the dates indicated.
<TABLE>
<S> <C> <C>
* Trustee November 12, 1996
- ----------------------------------------
Arthur L. Berman
* Trustee November 12, 1996
- ----------------------------------------
Ray Konrad
* Trustee November 12, 1996
- ----------------------------------------
Robert A. Nesher
* Trustee November 12, 1996
- ----------------------------------------
Christine H. Yackman
* Trustee November 12, 1996
- ----------------------------------------
James B. Grecco
/s/ Stephen G. Meyer Controller & Chief Financial Officer November 12, 1996
- -----------------------------------------
Stephen G. Meyer
*By: /s/ David G. Lee
-------------------------------------
David G. Lee
Attorney-in-Fact
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequential
Exhibit Name Page #
------- ---- ----------
<S> <C> <C>
EX-99.B1 Registrant's Declaration of Trust is incorporated herein by
reference to Registrant's Registration Statement on Form
N-1A (File No. 33-44712), originally filed with the
Securities and Exchange Commission on December 23, 1991 and
filed via EDGAR herewith.
EX-99.B2 Registrant's By-laws are incorporated herein by reference
to Registrant's Registration Statement on Form N-1A (File
No. 33-44712), originally filed with the Securities and
Exchange Commission on December 23, 1991 and filed via
EDGAR herewith.
EX-99.B5(a) Administration Agreement between Registrant and SEI Financial
Management Corporation is incorporated herein by reference to Post-
Effective Amendment No. 1 to Registrant's Registration Statement on
Form N-1A (File No. 33-44712), originally filed with the Securities and
Exchange Commission on September 24, 1992 and filed via EDGAR
herewith.
EX-99.B5(b) Schedule to the Administration Agreement between Registrant and SEI
Financial Management Corporation, is incorporated by reference to
Post-Effective Amendment No. 6 to Registrant's Registration Statement
on Form N-1A (File No. 33-44712), originally filed with the Securities
and Exchange Commission on April 28, 1995 and filed via EDGAR
herewith.
EX-99.B5(c) Investment Advisory Agreement between Registrant and United
Jersey Bank Investment Management Division, a division of
United Jersey Bank, is incorporated herein by reference to
Post-Effective Amendment No. 1 to Registrant's Registration
Statement on Form N-1A (File No. 33-44712), originally
filed with the Securities and Exchange Commission on
September 24, 1992 and filed via EDGAR herewith.
EX-99.B5(d) Retail Transfer Agent and Shareholder Services Agreement
between Registrant and SEI Financial Management Corporation
is incorporated herein by reference to Post-Effective
Amendment No. 1 to Registrant's Registration Statement on
Form N-1A (File No. 33-44712), originally filed with the
Securities and Exchange Commission on September 24, 1992 and
filed via EDGAR herewith.
EX-99.B5(e) Investment Advisory Agreement between Registrant and United Jersey
Bank Investment Management Division, a division of United Jersey
Bank, filed herewith.
EX-99.B5(f) Investment Sub-Advisory Agreement between United Jersey
Bank Investment Management Division, a division of United
Jersey Bank, and Wellington Management Company, filed
herewith.
EX-99.B5(g) Schedule to the Administration Agreement relating to the
Equity Growth Fund, filed herewith.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Sequential
Exhibit Name Page #
------- ---- ----------
<S> <C> <C>
EX-99.B5(h) Schedule to the Investment Advisory Agreement relating to
the Equity Growth Fund, filed herewith.
EX-99.B5(i) Form of Consent to Assignment and Assumption of the
Administration Contract, filed herewith.
EX-99.B6 Distribution Agreement between Registrant and SEI Financial
Services Company is incorporated herein by reference to
Post-Effective Amendment No. 1 to Registrant's Registration
Statement on Form N-1A (File No. 33-44712), originally
filed with the Securities and Exchange Commission on
September 24, 1992 and filed via EDGAR herewith.
EX-99.B8(a) Custodian Agreement between Registrant and United Jersey
Bank is incorporated herein by reference to Post-Effective
Amendment No. 1 to Registrant's Registration Statement on
Form N-1A (File No. 33-44712), originally filed with the
Securities and Exchange Commission on September 24, 1992 and
filed via EDGAR herewith.
EX-99.B8(b) Custodian Agreement between United Jersey Bank and The Bank of
California, National Association incorporated herein by reference to
Post-Effective Amendment No. 5 to Registrant's Registration Statement
on Form N-1A (File No. 33-44712), originally filed with the Securities
and Exchange Commission on February 10, 1995 and filed via EDGAR
herewith.
EX-99.B10 Opinion and Consent of Counsel is incorporated herein by reference to
Pre-Effective Amendment No. 2 to Registrant's Registration Statement
on Form N-1A (File No. 33-44712), originally filed with the Securities
and Exchange Commission on March 27, 1992 and filed via EDGAR
herewith.
EX-99.B11 Consent of Independent Public Accountants, filed herewith.
EX-99.B15(a) Distribution Plan-Class B is incorporated herein by reference to Post-
Effective Amendment No. 1 to Registrant's Registration Statement on
Form N-1A (File No. 33-44712), originally filed with the Securities and
Exchange Commission on September 24, 1992 and filed via EDGAR
herewith.
EX-99.B15(b) Distribution Plan-U.S. Treasury Securities Plus Money Market Fund is
incorporated herein by reference to Post-Effective Amendment No. 2 to
Registrant's Registration Statement on Form N-1A (File No. 33-44712)
originally filed with the Securities and Exchange Commission on March
1, 1993 and filed via EDGAR herewith.
EX-99.B15(c) Rule 18F-3 Multiple Class Plan, incorporated herein by reference to
Post-Effective Amendment No.7 Registrant's Registration Statement on
Form N-1A (File No. 33-44712), originally filed with the Securities
and Exchange Commission on October 25, 1995 and filed via EDGAR
herewith.
EX-99.B24(a) Powers of Attorney incorporated herein by reference to Post-Effective
Amendment No. 5 to Registrant's Registration Statement on Form N-1A
(File No. 33-44712), originally filed with the Securities and Exchange
Commission on February 10, 1995 and filed via EDGAR herewith.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Sequential
Exhibit Name Page #
------- ---- ----------
<S> <C> <C>
EX-99.B24(b) Power of Attorney for Arthur L. Berman, incorporated herein by
reference to Post-Effective Amendment No.7 to Registrant's Registration
Statement on Form N-1A (File No. 33-44712), originally filed with the
Securities and Exchange Commission on October 25, 1995 and filed via
EDGAR herewith.
EX-99.B24(c) Powers of Attorney for Christine H. Yackman and James B. Grecco,
filed herewith.
</TABLE>
AGREEMENT AND DECLARATION OF TRUST
AGREEMENT AND DECLARATION OF TRUST dated the 9th day of September,
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 voluntary association 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 The Pillar Funds, 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 specifically provided:
<PAGE>
(a) The "Trust" refers to the Massachusetts voluntary association
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 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 "Majority
Shareholder Vote" (the 67% or 50% requirement of the third sentence
of Section 2(a) (42) of the Investment Company Act of 1940 (the
"1940 Act") 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 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.
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.
ARTICLE III
Shares
Division of Beneficial Interest
Section 1. The Trustees may divided 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
<PAGE>
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.
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.
<PAGE>
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 descendent 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 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
<PAGE>
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.
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
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 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.
<PAGE>
Effect of Death, Resignation, Etc. of a Trustee
Section 2. The death, declination, resignation, retirement, removal, or
incapacity 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 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.
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;
<PAGE>
(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, 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;
<PAGE>
(m) To purchase and pay for entirely out of Trust property such
insurance as they 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 administrators, principal underwriters, or
independent contractors of the Trust individually against ail
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
Shareholders 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, inducing any
meeting held by means of a conference telephone or other communications
equipment by which all persons participating in the
<PAGE>
meeting can communicate with each other simultaneously and 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 administration services with United Jersey Bank
Investment Management Division, a division of United Jersey Bank, with SEI
Financial Management Corporation, a Delaware corporation, and/or with any other
corporation, trust, association or other organization, every such contract to
comply with such requirements and restrictions as may be set
<PAGE>
forth in the By-Laws; and any such contract may contain such other
forms 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, director, officer, partner, trustee, employee,,
adviser, principal underwriter, or distributor or agent of or for
any corporation, trust, association, 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 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, 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 accountability to the Trust or its Shareholders.
<PAGE>
ARTICLE V
Shareholders' Voting Powers and Meetings
Voting Powers
Section 1. The Shareholders shall have power to vote only (i) for the
election or removal of Trustees as provided in Article IV, Section 1, (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 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 exorcise
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.
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
<PAGE>
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 10% 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 10% 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 him or her.
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.
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 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.
<PAGE>
Additional Provisions
Section 5. The By-Laws may include further provisions for Shareholders'
votes and meetings and related matters.
ARTICLE VI
Distributions, Redemptions, Repurchase
and Determination of Net Asset Value
Distributions
Section 1. The Trustees may, but need not, distribute each year to the
Shareholders of each series 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, 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 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 otherwise, or all or part of any other
principal of the Trust attributable to the series. 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 this
Declaration of Trust.
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 provisions of this Section 2, 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
<PAGE>
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 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 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
<PAGE>
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 of Shares
being redeemed, purchased or repurchased (but not necessarily involving a
portion of each of the series' 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) with
respect to, nor any redemption or repurchase of, the Shares of any series shall
be effected by the Trust other than from the assets of such series.
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, 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.
<PAGE>
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 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)) and
resulting in a payment by Trustee or officer, unless there has been
either a determination 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 by
the court or other body approving the settlement or other
disposition 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:
(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.
<PAGE>
The rights of indemnification hereinafter 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 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 he is not
entitled to indemnification under this Article, provided that either:
(a) such undertaking is secured by a surety bond or some other
appropriate security 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 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 actions, suits or other proceedings or another 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.
<PAGE>
ARTICLE IX
Miscellaneous
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 of Shares shall look only to
the assets of the Trust or the assets of that particular series 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 notes 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.
<PAGE>
Duration 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 of Shares
may be terminated at any time by vote of Shareholders holding at least a
majority of the Shares of such series entitled to vote or by the Trustees by
written notice to the Shareholders of such series.
Upon termination of the Trust or of any one or more series 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. 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 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 Commonwealth.
<PAGE>
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 classes 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 6th day of September, 1991.
/s/ Carl A. Guarino
----------------------------------------
c/o SEI Financial Services Company
680 E. Swedesford Road
Wayne, PA 19087
COMMONWEALTH OF PENNSYLVANIA
COUNTY Of CHESTER
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 6th day of September.
/s/ Christine M. McCann
----------------------------------------
Notary Public
My commission expires: May 6, 1995
Resident Agent: CT Corporation, 2 Oliver Street, Boston. MA 02109
NOTARIAL SEAL
CHRISTINE M. McCANN, Notary Public
Tredyffrin Twp., Chester County
My Commission Expires May 06, 1995
BY-LAWS
OF
THE PILLAR FUNDS
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 The Pillar Funds, a
Massachusetts business trust established by the Declaration of
Trust (the "Trust").
1.2 Principal Office of the Trust. The principal office of the Trust
shall be located in Boston, Massachusetts.
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 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
<PAGE>
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.
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.
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.
<PAGE>
3.4 Notice. It shall be sufficient notice to a Trustee to send notice
by mail at least forty-eight hours or by telegram 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. 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.
Section 4. Officers and Agents
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.
<PAGE>
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 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 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
<PAGE>
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.
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.
<PAGE>
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 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.
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 one-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
<PAGE>
from being partners, officers or directors of or financially
interested in any investment adviser to the Trust or in any
corporation, firm or associa- tion 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 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
<PAGE>
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 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, or may not 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 this corporation
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 all information required by applicable laws
or regulations.
<PAGE>
Section 13. Ammendments
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.
ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of this 28th day of February, 1992, by and
between The Pillar Funds (the "Trust") a Massachusetts business 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"); and
WHEREAS, the Trust desires the Administrator to provide, and the
Administrator is willing to provide management, administrative, transfer agent
and shareholder servicing services to the Trust's U.S. Treasury Securities Money
Market, Prime Obligation Money Market, Tax-Exempt Money Market, Short-Term
Investment, Fixed Income, New Jersey Municipal Securities, Intermediate-Term
Government Securities, Equity Growth, Equity Income, Equity Aggressive Growth
and Balanced Growth Portfolios and such other portfolios as the Trust and the
Administrator may agree on (the "Portfolios"), 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 and Shareholder Servicing Agent of the
Portfolios and to furnish the Portfolios with the management, administrative,
transfer 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' institutional 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.
<PAGE>
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 Trust's then current prospectus. The Trust will not issue certificates
representing its 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.
Likewise, whenever the Administrator has occasion to redeem Shares
owned by a Shareholder, the Trust authorizes the Administrator to process the
transaction by making appropriate entries in its Share transfer records and
debiting the Account.
Upon notification by the Trust's Custodian of the receipt of funds
through the Federal Reserve wire system or conversion into Federal funds of
funds transmitted by other means for the purchase of Shares in accordance with
the Trust's current prospectus, the Administrator shall notify the Trust of such
deposits on a daily basis.
The Administrator shall credit each Shareholder's account with the
number of shares purchased according to the price of the Shares in effect for
such purchases determined in the manner set forth in the Trust's then current
prospectus. The Administrator shall process each order for the redemption of
Shares from or on behalf of a Shareholder, and shall cause cash proceeds to be
wired in Federal funds.
The requirements as to instruments of transfer and other documentation,
the applicable redemption price and the time of payment shall be as provided in
the then current prospectus, subject to such supplemental requirements
consistent with such prospectus as may be established by mutual agreement
between the Trust and Administrator.
If the Administrator or the Trust determines that a request for
redemption does not comply with the requirements for redemption, the
Administrator shall promptly so notify the Shareholder, together with the reason
therefor, and shall effect such redemption at the price next determined after
receipt of documents complying with said standards.
On each day that the Trust's Custodian and the New York Stock Exchange
are open for business ("Business Day"), the Administrator shall notify the
Custodian of the amount of cash or other assets required to meet payments made
pursuant to the provisions of this Article 2, and the Trust shall instruct the
Custodian to make available from time to time sufficient funds or other assets
therefor.
The authority of the Administrator to perform its responsibilities as
to purchases
<PAGE>
and redemptions under this Article 2 shall be suspended upon receipt by
it of notification from the Securities and Exchange Commission or the Trustees
of the suspension of the determination of the Trust's net asset value.
In registering transfers, the Administrator may rely upon an opinion of
counsel in not requiring complete documentation, in registering transfers
without inquiry into adverse claims, in delaying registration for purposes of
such inquiry, or in refusing registration where in its judgment an adverse claim
requires such refusal.
The Trust warrants that it has or shall deliver to the Administrator,
as transfer agent:
(a) a copy of the Declaration of Trust 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 non-assessable; 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 Trust's institutional accounts and, as such,
in accordance with the provisions of the Trust's Declaration of Trust and then
current prospectus, 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.
<PAGE>
The Trust agrees that it shall promptly inform the Administrator of the
declaration of any dividend or distribution on its Shares, 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. In addition to the services
described above, 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,
underwriters, brokers and dealers, corporate fiduciaries, insurers, banks and
persons in any other capacity deemed to be necessary or desirable for the
Portfolios' operation. The Administrator shall provide the Trustees of the Trust
with such reports regarding investment performance as they may reasonably
request but shall have no responsibility for supervising the performance by any
investment adviser or sub-adviser of its responsibilities.
The Administrator shall provide the Trust with 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 Administrator shall, from time to
time, determine to be necessary to perform its obligations under this Agreement.
The Administrator shall make reports to the Trust's Trustees concerning
the performance of its obligations hereunder; 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 shall provide the
Portfolios' Shareholders with the reports described in the Trust's current
prospectus.
The Administrator shall calculate the daily net asset value of the
Portfolios in accordance with the procedures prescribed in the Trust's
Registration Statement and such other procedures as may be established by the
Trustees of the Trust.
Also, the Administrator will perform other services for the Trust as
agreed from time to time, including, but not limited to, preparation and mailing
of appropriate federal income tax forms and returns to the Internal Revenue;
mailing the annual reports of the Trust; preparing an annual list of
institutional Shareholders; furnishing the Trust with such reports regarding the
sale and redemption of Shares as may be
<PAGE>
required in order to comply with federal and state securities law; and
mailing notices of Shareholders' meetings, proxies and proxy statements to
institutional Shareholders, 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 Trust
Shares, the costs of custodial services, the cost of initial and
ongoing registration of the Trust's 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, all fees and charges
of investment advisers to the Trust. In addition, the Trust will
bear distribution expenses in accordance with the Trust's
Distribution Plan.
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 which are attached hereto and made a part of this
Agreement ("Schedules"). Such compensation shall be calculated and
accrued daily, and paid to the Administrator monthly.
<PAGE>
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
lla2-2(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 Rights. 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
state 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
<PAGE>
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 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 effect 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 of This Agreement. This Agreement shall remain in
effect for five years after the date of the Agreement and shall continue in
effect for successive periods of two years subject to review at least annually
by the Trustees.
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
<PAGE>
receipt of such notice, the breaching party shall have 45 days to
remedy the breach or the non-breaching party may terminate this Agreement
immediately.
This Agreement shall not be assignable by either party without the
written consent of the other party.
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 prospectus, or any rule, regulation or
requirement of any regulatory body.
ARTICLE 11. Trustees' 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 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
<PAGE>
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.
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, and if to the
Administrator at 680 East Swedesford Road, Wayne, PA.
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.
THE PILLAR FUNDS
By: /s/ [ILLEGIBLE SIGNATURE]
----------------------------------
SEI FINANCIAL MANAGEMENT COMPANY
By: /s/ [ILLEGIBLE SIGNATURE]
----------------------------------
<PAGE>
SCHEDULE A
TO THE ADMINISTRATION AGREEMENT
DATED FEBRUARY 28, 1992
BETWEEN
THE PILLAR FUNDS
AND
SEI FINANCIAL MANAGEMENT CORPORATION
Pursuant to Article 6, Section A, the Trust shall pay the Administrator
compensation which is calculated daily and paid monthly at an annual rate as
follows:
.20% of average daily net assets of each Portfolio.
SCHEDULE C
DATED FEBRUARY 16, 1995
TO THE ADMINISTRATION AGREEMENT
DATED FEBRUARY 28, 1992
BETWEEN
THE PILLAR FUNDS
AND
SEI FINANCIAL MANAGEMENT CORPORATION
Pursuant to Article 10, the Administrator shall provide services to the
following additional Portfolio (the "Portfolio"):
International Growth
Pursuant to Article 5, Section A, the Trust shall pay the Administrator
compensation for the Portfolio which is calculated daily and paid
monthly at an annual rate as follows:
.20% of average daily next assets of the Portfolio
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 28th day of February, 1992, by and between The
Pillar Funds, a Massachusetts business trust (the "Trust"), and United Jersey
Bank Investment Management Division, a division of United Jersey Bank, (the
"Adviser").
WHEREAS, the Trust is an open-end, diversified management investment
company registered under the Investment Company Act of 1940, 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;
WHEREAS, the Trust desires to retain the Adviser to render investment
management services with respect to its U.S. Treasury Securities Money Market,
Prime Obligation Money Market, Tax-Exempt Money Market, Short-Term Investment,
Fixed Income, New Jersey Municipal Securities, Intermediate-Term Government
Securities, Equity Growth, Equity Income, Equity Aggressive Growth and Balanced
Growth Portfolios and such other portfolios as the Trust and the Adviser may
agree upon (the "Portfolios"), and the Adviser is willing to render such
services:
NOW, THEREFORE, in consideration of mutual covenants herein contained,
the parties hereto agree as follows:
1. Duties of Adviser. The Trust employs the Adviser to manage the
investment and reinvestment of the assets, and to continuously
review, supervise, and administer the investment program of the
Portfolios, to determine in its discretion the securities to be
purchased or sold, to provide the Administrator and the Trust with
records concerning the Adviser's activities which the Trust is
required to maintain, and to render regular reports to the
Administrator and to the Trust's Officers and Trustees concerning
the Adviser's discharge of the foregoing responsibilities.
<PAGE>
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 prospectuses and statement of
additional information as amended from time to time, and applicable
laws and regulations.
The Adviser accepts such employment and agrees, at its own expense, to
render the services and to provide the office space, furnishings and
equipment and the personnel required by it to perform the services on
the terms and for the compensation provided herein.
2. Portfolio Transactions. The Adviser is authorized to select the
brokers or dealers that will execute the purchases and sales of
portfolio securities for the Portfolios and is directed to use its
best efforts to obtain the best net results as described in the
Trust's prospectus and statement of additional information from
time to time. The Adviser will promptly communicate to the
Administrator and to the officers and the Trustees of the Trust
such information relating to portfolio transactions as they may
reasonably request.
It is understood that the Adviser will not be deemed to have acted
unlawfully, or to have breached a fiduciary duty to the Trust or
be in breach of any obligation owing to the Trust under this
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.
<PAGE>
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 to the extent these expenses are
not borne by the Trust under a distribution plan adopted pursuant
to Rule 12b-1.
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.
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 and, if such
reduction shall be insufficient to offset such expenses, by
reimbursing the Trust.
6. Reports. The Trust and the Adviser agree to furnish to each other,
if applicable, current prospectuses, proxy statements, reports to
shareholders, certified copies of their financial statements, and
such other information with regard to their affairs as each may
reasonably request.
<PAGE>
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 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 Paragraph 9, the term 'Adviser" shall include
directors, officers, employees and other corporate agents of the
Adviser as well as that corporation itself).
<PAGE>
10. Permissible Interests. Trustees, agents, and shareholders of the
Trust are or may be interested in the Adviser (or any successor
thereof) as directors, partners, officers, or shareholders, or
otherwise; directors, partners, officers, agents, and shareholders
of the Adviser are or may be interested in the Trust as Trustees,
shareholders or otherwise; and the Adviser (or any successor) is
or may be interested in the Trust as a shareholder or otherwise.
In addition, brokerage transactions for the Trust may be effected
through affiliates of the Adviser if approved by the Board of
Trustees, subject to the rules and regulations of the Securities
and Exchange Commission.
11. 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 Investment Company
Act of 1940 and rules and regulations thereunder. The foregoing
requirement that continuance of this Agreement be "specifically
approved at least annually" shall be construed in a manner
consistent with the Investment Company Act of 1940 and the rules
and regulations thereunder.
This Agreement may be terminated as to any Portfolio at any time,
without the payment of any penalty by vote of a majority of the
Trustees of the Trust or by vote of a majority of the outstanding
voting securities of the Portfolio on not less than 30 days nor
more than 60 days written notice to the Adviser, or by the Adviser
at any time without the payment of any penalty, on 90 days written
notice to the Trust. This Agreement will automatically and
immediately terminate in the event of its assignment. Any notice
under this Agreement shall be given in writing, addressed and
delivered, or
<PAGE>
mailed postpaid, to the other party at any office of such party.
As used in this Section 11, the terms "assignment", "interested
persons", and a "vote of a majority of the outstanding voting
securities" shall have the respective meanings set forth in the
Investment Company Act of 1940 and the rules and regulations
thereunder; subject to such exemptions as may be granted by the
Securities and Exchange Commission under said Act.
12. Amendment. The terms or provisions of this Agreement may be
amended, modified or waived in writing if such amendment,
modification or waiver is approved by the affirmative vote or
action by written consent of the Board of Trustees of the Trust
and by the Adviser in accordance with the Investment Company Act
of 1940; provided, that an amendment, modification or waiver shall
also be approved by the shareholders of the Trust if shareholder
approval is required by the Investment Company Act of 1940 and the
rules and regulations thereunder.
13. 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 and if to the
Adviser at 210 Main Street, Hackensack, NJ 07601.
14. 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.
15. Governing Law. This Agreement shall be construed in accordance
with 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.
<PAGE>
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 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.
The Pillar Funds United Jersey Bank Investment Management
Division, a division of United Jersey Bank
By: illegible signature By: /s/ John W. Gustafson
-------------------- -------------------------------------
John W. Gustafson
<PAGE>
Schedule A
to the
Investment Advisory
Agreement
between
The Pillar Funds
and
United Jersey Bank Investment Management
Division,
a division of United Jersey Bank
Pursuant to Article 3, the Trust shall pay the Adviser compensation at
an annual rate as follows:
Portfolio Fee (in basis points)
U.S. Treasury Securities Money Market .35%
Prime Obligation Money Market .35%
Tax-Exempt Money Market .35%
Short-Term Investment .60%
Fixed Income .60%
New Jersey Municipal Securities .60%
Intermediate-Term Government Securites .60%
Equity Growth .75%
Equity Income .75%
Equity Aggressive Growth .75%
Balanced Growth .75%
RETAIL TRANSFER AGENT AND SHAREHOLDER SERVICES AGREEMENT
THIS AGREEMENT is made as of this 28th day of February, 1992, by and
between The Pillar Funds (the "Trust"), a Massachusetts business trust, and SEI
Financial Management Corporation (the "Transfer Agent" or "SEI"), 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"); and
WHEREAS, the Transfer Agent is a transfer agent registered under the
Securities Exchange Act of 1934; and
WHEREAS, the Trust desires the Transfer Agent to provide, and the
Transfer Agent is willing to provide retail transfer agent and shareholder
servicing services to the Trust's portfolios listed in Schedule A which is
attached hereto and made a part of this Agreement, and such other portfolios, or
classes of portfolios, as the Trust and the Transfer Agent may agree on
("Portfolios"), on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Trust and the Transfer Agent hereby agree as follows:
ARTICLE 1. Retention of the Transfer Agent. The Trust hereby retains the
Transfer Agent to act as the Transfer Agent and Shareholder Servicing Agent of
the Portfolios and to furnish the Portfolios with the retail transfer agent and
shareholder servicing services as set forth below. The Transfer Agent hereby
accepts such employment to perform the duties set forth below.
The Transfer Agent 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. All of the Transfer Agent's duties shall be
subject always to the objectives, policies and restrictions contained in the
Trust's current registration statement under the 1940 Act, to the Trust's
Declaration of Trust and By-Laws, to the provisions of the 1940 Act, and to any
other guidelines that may be established by the Trust's Trustees and which are
furnished to the Transfer Agent by the Trust.
<PAGE>
ARTICLE 2. Transfer Agent Services. The Transfer Agent will act as
Transfer Agent for the Portfolios' retail 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 Transfer Agent is authorized to set up accounts for shareholders and
record transactions in the accounts on the basis of instructions received from
Shareholders when accompanied by remittance in an appropriate amount and form as
provided in the Trust's then current prospectus. The Trust will not issue
certificates representing its Shares. Whenever Shares are purchased or issued,
the Transfer Agent shall credit the Account with the Shares issued, and credit
the proper number of Shares to the appropriate Shareholder.
Likewise, whenever the Transfer Agent has occasion to redeem Shares
owned by a Shareholder, the Trust authorizes the Transfer Agent to process the
transaction by making appropriate entries in its Share transfer records and
debiting the Account.
Upon notification by the Trust's Custodian of the receipt of funds
through the Federal Reserve wire system or conversion into Federal funds of
funds transmitted by other means for the purchase of Shares in accordance with
the Trust's current prospectus, the Transfer Agent shall notify the Trust of
such deposits on a daily basis.
The Transfer Agent shall credit each Shareholder's account with the
number of units purchased according to the price of the Shares in effect for
such purchases determined in the manner set forth in the Trust's then current
prospectus. The Transfer Agent shall process each order for the redemption of
Shares from or on behalf of a Shareholder, and shall cause cash proceeds to be
wired in Federal funds.
The requirements as to instruments of transfer and other documentation,
the applicable redemption price and the time of payment shall be as provided for
in the then current prospectus, subject to such supplemental requirements
consistent with such prospectus as may be established by mutual agreement
between the Trust and the Transfer Agent.
If the Transfer Agent or the Trust's Distributor determines that a
request for redemption does not comply with the requirements for redemption, the
Transfer Agent shall promptly so notify the Shareholder, together with the
reason therefor, and shall
<PAGE>
effect such redemption at the price next determined after receipt of documents
complying with said standards.
On each day that the Trust's Custodian and the New York Stock Exchange
are open for business ("Business Day"), the Transfer Agent shall notify the
Custodian of the amount of cash or other assets required to meet payments made
pursuant to the provisions of this Article 2, and the Trust shall instruct the
Custodian to make available from time to time sufficient funds or other assets
therefor.
The authority of the Transfer Agent to perform its responsibilities as
to purchases and redemptions shall be suspended upon receipt by it of
notification from the Securities and Exchange Commission or the Trustees of the
suspension of the determination of the Trust's net asset value.
In registering transfers, the Transfer Agent may rely upon the opinion
of counsel in not requiring complete documentation, in registering transfers
without inquiry into adverse claims, in delaying registration for purposes of
such inquiry, or in refusing registration where in its judgment an adverse claim
requires such refusal.
The Trust warrants that it has or shall deliver to the Transfer Agent,
as transfer agent:
(a) a copy of the Declaration of Trust 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 non-assessable; 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
Transfer Agent 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
Transfer Agent, together with copies of all relevant resolutions,
instruments or other documents, specimen signatures, certificates,
opinions or the like as the Transfer Agent may deem necessary or
appropriate.
<PAGE>
ARTICLE 3. Dividend Disbursing Agent. The Transfer Agent shall act as
Dividend Disbursing Agent for the Trust's retail accounts and, as such, in
accordance with the provisions of the Trust's Declaration of Trust and then
current prospectus, 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 Transfer Agent of the
declaration of any dividend or distribution on its Shares, 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.
In accordance with the prospectuses of the Portfolios and such
procedures as mutually agreed upon by the Trust, the Transfer Agent and the
Custodian, the Transfer Agent shall (a) arrange for issuance of shares obtained
through the Right of Accumulation, if any, and (b) arrange for the exchange of
shares for shares of such other funds as may be designated by the Trust.
ARTICLE 4. Other Services. The Transfer Agent will perform other
services for the Trust as agreed from time to time, including, but not limited
to, preparation and mailing of appropriate federal income tax forms and returns
to the Internal Revenue Service, other appropriate taxing authorities and
shareholders as the Trust is so required to prepare, file or mail by applicable
laws, rules and regulations; mailing the annual reports of the Trust to the
Shareholders; preparing an annual list of Shareholders; furnishing the Trust
with such reports regarding the sale and redemption of Shares as may be required
in order to comply with federal and state securities law; and mailing notices of
Shareholders' meetings, proxies and proxy statements to the Shareholders, for
all of which the Trust will pay the Transfer Agent's out-of-pocket expenses. In
addition, the Transfer Agent shall make reports to the Trust's Trustees
concerning the performance of its obligations hereunder.
ARTICLE 5. Compensation of the Transfer Agent.
(A) Transfer Agent. For the services to be rendered, the facilities
furnished and the expenses assumed by the Transfer Agent pursuant to
this Agreement, the Trust shall pay to the Transfer Agent
compensation at an annual rate specified in the Schedule B which is
attached hereto and
<PAGE>
made a part of this Agreement. Such compensation shall be accrued
daily, and paid to the Transfer Agent monthly.
If this Agreement becomes effective subsequent to the first day of a
month or terminates before the last day of a month, the Transfer
Agent'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
Transfer Agent's compensation for the preceding month shall be made
promptly.
(B) Survival of Compensation Rights. All rights of compensation under
this Agreement for services performed as of the termination date
shall survive the termination of this Agreement.
ARTICLE 6. Limitation of Liability of the Transfer Agent. The duties of
the Transfer Agent shall be confined to those expressly set forth herein, and no
implied duties are assumed by or may be asserted against the Transfer Agent
hereunder. The Transfer Agent shall not be liable for any error of judgment or
mistake of law 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 Article 7, the term "Transfer Agent" shall include directors,
officers, employees, sub-contracts and other corporate agents of the Transfer
Agent as well as that corporation itself).
So long as the Transfer Agent does not violate the standard of care set
forth herein, the Trust assumes full responsibility and shall indemnify the
Transfer Agent 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
and attorney's fees) 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
Transfer Agent
<PAGE>
harmless, the Trust shall be fully and promptly advised of all pertinent facts
concerning the situation in question, and it is further understood that the
Transfer Agent 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 effect the rights hereunder.
The Transfer Agent 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
Transfer Agent's duties, and the Transfer Agent 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.
The Transfer Agent 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 Transfer Agent 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 7. Activities of the Transfer Agent. The services of the
Transfer Agent rendered to the Trust are not to be deemed to be exclusive. The
Transfer Agent 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 Transfer
Agent, as directors, officers, employees and shareholders or otherwise and that
directors, officers, employees and shareholders of the Transfer Agent and its
counsel are or may be or become similarly interested in the Trust, and that the
Transfer Agent may be or become interested in the Trust as a Shareholder or
otherwise.
ARTICLE 8. Term of this Agreement. This Agreement shall remain in effect
for five years after the date of the Agreement and shall continue in effect for
successive periods of two years subject to review at least annually by the
Trustees of the Trust. SEI reserves the right to terminate this Agreement if the
Administration Agreement between the Trust and SEI is terminated for any reason.
Upon termination of this Agreement all out-of-pocket expenses associated with
the movement of records and material will be borne by the Trust.
This Agreement shall not be assignable by either party without the
written consent of the other party.
<PAGE>
ARTICLE 9. 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
Transfer Agent 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 prospectus, or any rule, regulation or
requirement of any regulatory body.
ARTICLE 10. Trustees' 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 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 11. Certain Records. The Transfer Agent 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 Transfer Agent
on behalf of the Trust shall be prepared and maintained at the expense of the
Transfer Agent, 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 Transfer Agent shall notify the Trust and follow the Trust's
instructions as to permitting or refusing such inspection; provided that the
Transfer Agent 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 Transfer Agent against such liability.
ARTICLE 12. 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.
<PAGE>
ARTICLE 13. 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, and if to the
Transfer Agent at 680 East Swedesford Road, Wayne, PA.
ARTICLE 14. 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 15. 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.
THE PILLAR FUNDS
By: /s/ illegible signature
---------------------------------------
SEI FINANCIAL MANAGEMENT CORPORATION
By: /s/ illegible signature
---------------------------------------
Vice President
<PAGE>
SCHEDULE A
TO THE TRANSFER AGENT AND SHAREHOLDER
SERVICES AGREEMENT DATED FEBRUARY 28, 1992
BETWEEN
THE PILLAR FUNDS
AND
SEI FINANCIAL MANAGEMENT CORPORATION
Pursuant to the Preamble, the Transfer Agent shall provide services to
the following Portfolios:
U.S. Treasury Securities Money Market Portfolio
Prime Obligation Money Market Portfolio
Tax-Exempt Money Market Portfolio
Short-Term Investment Portfolio
Fixed Income Portfolio
New Jersey Municipal Securities Portfolio
Intermediate-Term Government Securities Portfolio
Equity Growth Portfolio
Equity Income Portfolio
Equity Aggressive Growth Portfolio
Balanced Growth Portfolio
<PAGE>
SCHEDULE B
TO THE TRANSFER AGENT AND SHAREHOLDER
SERVICES AGREEMENT DATED FEBRUARY 28, 1992
BETWEEN
THE PILLAR FUNDS
AND
SEI FINANCIAL MANAGEMENT CORPORATION
Pursuant to Article 6, Section A, the Trust shall pay the Transfer Agent
compensation at the rate of:
$19.00 per year for each money market account
$15.00 per year for each non-money market account
with a minimum of $18,000 per year for each portfolio
Plus all out-of-pocket costs, including, but not limited to: forms,
stationery, postage, toll-free telephone lines, voice response
systems, proxies, microfilm, microfiche, offsite storage, checkwriting
books, terminals, and any expense incurred at the request of the
Trust such as custom programming.
THE PILLAR FUNDS
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 28th day of April, 1995, by and between The Pillar
Funds, a Massachusetts business trust (the "Trust"), and United Jersey Bank
Investment Management Division, a division of United Jersey Bank, (the
"Adviser").
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), consisting of several series of shares, each having its own investment
policies; and
WHEREAS, the Trust has retained SEI Financial Management Corporation
(the "Administrator") to provide administration of the Trust's operations,
subject to the control of the Board of Trustees;
WHEREAS, the Trust desires to retain the Adviser to render investment
advisory services with respect to its international Growth Portfolio and such
other portfolios as the Trust and the Adviser may hereafter agree upon from time
to time (the "Portfolios"), and the Adviser is willing to render such services:
NOW, THEREFORE, in consideration of mutual covenants herein contained,
and intending to be legally bound, the parties hereto agree as follows:
1. Appointment and Duties of Adviser. The Trust hereby appoints the
Adviser to provide investment advisory services to the Portfolio
for the period and on the terms set forth in this Agreement.
A. The Adviser accepts such appointment and agrees to furnish the
services herein set forth for the compensation herein provided. In
the event that the Trust establishes one or more additional
portfolios in the future with respect to which it desires that the
Adviser furnish investment advisory services hereunder, the Trust
so shall notify the Adviser in writing. If the Adviser is willing
to render such services under this Agreement, it shall notify the
Trust in writing whereupon such portfolio shall become a Portfolio
hereunder and shall be subject to the provisions of this Agreement
to the same extent as the Portfolio named above in the recitals
except to the extent that said provisions (including those
relating to the compensation payable by the Trust to the Adviser)
are modified with respect to such Portfolio in writing by Trust
and the Adviser.
B. Subject to supervision by the Trust's Board of Trustees, the
Adviser shall manage the investment operations of the Portfolio
and the composition of the Portfolio, including the purchase,
retention and disposition thereof, in accordance with the
Portfolio's investment objectives, policies and restrictions as
stated in the Portfolio's Prospectus (such Prospectus and the
Statement of Additional Information, as currently in effect and as
amended or supplemented from time to time, being herein called the
"Prospectus"), and subject to the following:
<PAGE>
(1) The Adviser shall determine from time to time what investments
and securities will be purchased, retained or sold by the
Portfolio, and what portion of the assets will be invested or
held uninvested in cash.
(2) In the performance of its duties and obligations under this
Agreement, the Adviser shall act in conformity with the
Trust's Declaration of Trust and By-Laws and the Prospectus
and with the instructions and directions of the Board of
Trustees of the Trust and will conform to and comply with the
requirements of the 1940 Act, the Internal Revenue Code of
1986, and all other applicable federal and state laws and
regulations, as each is amended from time to time.
The Adviser agrees, at its own expense, to render the services and to provide
the office space, furnishings and equipment and the personnel required by it to
perform the services on the terms and for the compensation provided herein.
C. It is understood that the Adviser may from time to time employ
or associate with itself such person or persons as the Adviser may
believe to be particularly fitted to assist in the performance of
this Agreement; provided, however, that the compensation of such
person or persons shall be paid by the Adviser and that any person
providing investment advisory services to the Portfolio shall be
approved in accordance with the provisions of the 1940 Act. Each
such sub-adviser is hereinafter referred to as a "Sub-Adviser".
Notwithstanding the approval of any such Sub-Adviser(s), however, in carrying
out its obligations hereunder the Adviser shall in all events:
(a) determine, either in its sole discretion or jointly with the
Sub-Adviser(s), country and regional investment allocation
guidelines for the Portfolio, as well as investment hedging
guidelines, if any;
(b) establish and monitor general investment criteria and policies for
the Portfolio;
(c) review investments in the Portfolio on a periodic basis for
compliance with the Portfolio's investment objective, policies and
restrictions as stated in the Prospectus;
(d) review on a periodic basis the policies established by the
Sub-Adviser(s) for the Portfolio with respect to the placement of
orders for the purchase and sale of portfolio securities;
(e) review, monitor, analyze and report to the Board of Trustees on
the performance of the Sub-Adviser(s);
(f) furnish to the Board of Trustees or the Sub-Adviser(s), reports,
statistics and economic information as may be requested; and
(g) recommend, either in its sole discretion or in conjunction with
the Sub-Adviser(s), potential changes in investment policy.
<PAGE>
2. Portfolio Transactions. The Adviser shall place orders with or
through such persons, brokers or dealers to carry out the policy
with respect to brokerage set forth in the Portfolio's
Registration Statement and Prospectus or as the Board of Trustees
may direct from time to time, in conformity with federal
securities laws. In providing the Portfolio with investment
advisory services, the Adviser shall give primary consideration to
securing the most favorable price and efficient execution. Within
the framework of this policy, the Adviser may consider the
financial responsibility, research and investment information and
other services provided by brokers or dealers who may effect or be
a party to any such transaction or other transactions to which the
Adviser's other clients may be a party. It is understood that it
is desirable for the Portfolio that the Adviser have access to
supplemental investment and market research and security and
economic analysis provided by brokers who may execute brokerage
transactions at higher cost to the Portfolio than may result when
allocating brokerage to other brokers on the basis of seeking the
most favorable price and efficient execution. Therefore, the
Adviser is authorized to place orders for the purchase and sale of
securities for the Portfolio with such brokers, subject to review
by the Trust's Board of Trustees from time to time with respect to
the extent and continuation of this practice. It is understood
that the services provided by such brokers may be useful to the
Adviser (or a Sub-Adviser) in connection with the Adviser's (or
Sub-Adviser's) services to other clients.
On occasions when the Adviser deems the purchase or sale of a
security to be in the best interest of the Portfolio as well as
other clients of the Adviser, the Adviser, to the extent permitted
by applicable laws and regulations, may, but shall be under no
obligation to, aggregate the securities to be so purchased or sold
in order to obtain the most favorable price or lower brokerage
commissions and efficient execution. In such event, allocation of
the securities so purchased or sold, as well as the expenses
incurred in the transaction, shall be made by the Adviser in the
manner it considers to be the most equitable and consistent with
its fiduciary obligation to the Portfolio and to such other
clients.
3. Compensation of the Adviser. For the services rendered by the
Adviser as provided in Sections 1 and 2 of this Agreement, the
Trust shall pay to the Adviser, and the Adviser agrees to accept
as full compensation therefor, an advisory fee at an annual rate
of 1.00% of the Portfolio's average daily net assets. The fee
shall be computed daily and paid to the Adviser monthly.
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 to the extent these expenses are
not borne by the Trust under a distribution plan adopted pursuant
to Rule 12b-1.
<PAGE>
5. Excess Expenses. If the expenses for the Portfolio for any fiscal
year (including fees and other amounts payable to the Adviser, but
excluding interest, taxes, brokerage costs, litigation, and other
extraordinary costs) as calculated every business day would exceed
the expense limitations imposed on investment companies by any
applicable statute or regulatory authority of any jurisdiction in
which Shares of the Portfolio are qualified for offer and sale,
the Adviser shall bear such excess cost.
However, the Adviser shall not bear expenses of the Portfolio
which would result in the Portfolio's inability to qualify as a
regulated investment company under provisions of the internal
Revenue Code. Payment of expenses by the Adviser pursuant to this
Section 5 shall be settled on a monthly basis (subject to fiscal
year end reconciliation) by a reduction in the fee payable to the
Adviser for such month pursuant to Section 3 and, if such
reduction shall be insufficient to offset such expenses, by
reimbursing the Trust.
6. Reports. The Trust and the Adviser agree to furnish to each other,
if applicable, current prospectuses, proxy statements, reports to
shareholders, certified copies of their financial statements, and
such other information with regard to their affairs as each may
reasonably request.
7. Status of Adviser. The services of the Adviser to the Trust are
not to be deemed exclusive, and the Adviser shall be free to
render similar services to others so long as its services to the
Trust are not impaired thereby. The Adviser shall be deemed to be
an independent contractor and shall, unless otherwise expressly
provided or authorized, have no authority to act for or represent
the Trust in any way or otherwise be deemed an agent of the Trust.
8. Certain Records. Any records required to be maintained and
preserved pursuant to the provisions of Rule 31a-1 and Rule 31a-2
promulgated under the 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 shall 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 by the Adviser or by any
Sub-Adviser in carrying out its duties hereunder or under any
sub-investment advisory agreement, except a loss resulting from
the Adviser's own willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of
reckless disregard by the Adviser 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 Paragraph 9, the term "Adviser" shall include
directors, officers, employees and other corporate agents (but not
the Sub-Adviser) of the Adviser as well as that corporation
itself).
<PAGE>
10. Permissible Interests. Trustees, agents, and shareholders of the
Trust are or may be interested in the Adviser (or any successor
thereof) as directors, partners, officers, or shareholders, or
otherwise; directors, partners, officers, agents, and shareholders
of the Adviser are or may be interested in the Trust as Trustees,
shareholders or otherwise; and the Adviser (or any successor) is
or may be interested in the Trust as a shareholder or otherwise.
In addition, brokerage transactions for the Trust may be effected
through affiliates of the Adviser if approved by the Board of
Trustees, subject to the rules and regulations of the Securities
and Exchange Commission.
11. Duration and Termination. This Agreement shall become effective as
of the date hereof with respect to the Portfolio listed in the
recitals, and with respect to any additional Portfolio added
pursuant to Section 1 hereof, on the date of receipt by the Trust
of notice from the Adviser in accordance with said Section that
the Adviser is willing to serve as investment adviser with respect
to such Portfolio, provided that this Agreement (as supplemented
by the terms specified in any notice and agreement pursuant to
Section 1 hereof) has been approved by the shareholders of the
Portfolio in accordance with the requirements of the 1940 Act,
and, unless sooner terminated as provided herein, shall continue
in effect with respect to each Portfolio until February 28,1997.
Thereafter, if not terminated, this Agreement shall automatically
continue in effect as to a particular Portfolio for successive
annual periods, provided such continuance is specifically approved
at least annually (a) by the vote of a majority of those members
of the Trust's Board of Trustees who are not interested persons of
any party to this Agreement, cast in person at a meeting called
for the purpose of voting on such approval, and (b) by the Trust's
Board of Trustees or by vote of a majority of the outstanding
voting securities of such Portfolio; provided, however, that if
the shareholders of the Portfolio fail to approve the continuation
of its Agreement as provided herein, the Adviser may continue to
serve hereunder in the manner and to the extent permitted by the
1940 Act and rules and regulations thereunder. The foregoing
requirement that continuance of this Agreement be "specifically
approved at least annually" shall be construed in a manner
consistent with the 1940 Act and the rules and regulations
thereunder.
This Agreement may be terminated as to any Portfolio at any time,
without the payment of any penalty, by vote of a majority of the
Trustees of the Trust or by vote of a majority of the outstanding
voting securities of the Portfolio on 60 days written notice to
the Adviser, or by the Adviser at any time, without the payment of
any penalty, on 60 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, subject to such
exemptions as may be granted by the Securities and Exchange
Commission under said Act.
12. Amendment. The terms or provisions of this Agreement may be
amended, modified or waived in writing if such amendment,
modification or waiver is
<PAGE>
approved by the affirmative vote or action by written consent of
the Board of Trustees of the Trust and by the Adviser in
accordance with the 1940 Act; provided, that an amendment,
modification or waiver shall also be approved by the shareholders
of the Trust if shareholder approval is required by the 1940 Act
and the rules and regulations thereunder.
13. Notice. Any notice required or permitted to be given by either
party to the other shall be delivered or mailed: if to the Trust,
at 680 East Swedesford Road, Wayne, PA 19087, and if to the
Adviser at 210 Main Street, Hackensack, NJ 07601. Either party may
change its address for notices hereunder by giving notice of such
change to the other party in accordance with this Section 13.
14. 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.
15. Governing Law. This Agreement shall be construed in accordance
with 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.
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 is not binding upon any of the Trustees, officers, or shareholders of the
Trust individually but binding only upon the assets and property of the Trust.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed as of the day and year first written above.
The Pillar Funds United Jersey Bank Investment
Management Division, a
division of United Jersey Bank
By: /s/ Kathryn L. Stanton By: /s/ John W. Gustafson
----------------------------- -----------------------------
THE PILLAR FUNDS
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT made this 28th day of April, 1995, by and among United Jersey
Bank Investment Management Division, a division of United Jersey Bank, (the
"Adviser"), Wellington Management Company, a Massachusetts general partnership
(the "Sub-Adviser") and The Pillar Funds, a Massachusetts business trust (the
"Trust").
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
of even date herewith (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the International Growth
Portfolio (the "Portfolio"), and
WHEREAS, the Adviser and the Trust each desire to retain the
Sub-Adviser to provide investment sub-advisory services to the Trust in
connection with the management of the Portfolio and such other portfolios as the
Trust, the Adviser and the Sub-Adviser may agree upon by written addenda to this
Agreement, and the Sub-Adviser is willing to render such investment advisory
services.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and intending to be legally bound, the parties hereto agree as
follows:
1. (a) Subject to supervision by the Adviser and the Trust's Board of
Trustees, the Sub-Adviser shall manage the investment operations of
the Portfolio and the composition of the Portfolio, including the
purchase, retention and disposition thereof, in accordance with the
Portfolio's investment objectives, policies and restrictions as
stated in the Portfolio's Prospectus (such Prospectus and the
Statement of Additional Information, as currently in effect and as
amended or supplemented from time to time, being herein called the
"Prospectus"), and subject to the following:
(1) The Sub-Adviser shall determine from time to time what
investments and securities will be purchased, retained or sold
by the Portfolio, and what portion of the assets will be
invested or held uninvested in cash.
(2) In the performance of its duties and obligations under this
Agreement, the Sub-Adviser shall act in conformity with the
Trust's Declaration of Trust and By-Laws (as defined herein) and
the Prospectus and with the instructions and directions of the
Adviser and of the Board of Trustees of the Trust and will
conform to and comply with the requirements of the 1940 Act, the
Internal Revenue Code of 1986, and all other applicable federal
and state laws and regulations. as each is amended from time to
time.
(3) The Sub-Adviser shall place orders with or through such persons,
brokers or dealers to carry out the policy with respect to
brokerage set forth in the Portfolio's Registration Statement
(as defined herein) and Prospectus or as the Board of Trustees
or the Adviser may direct from time to time, in conformity with
federal securities laws. In providing the Portfolio with
investment sub-advisory
<PAGE>
services, the Sub-Adviser will give primary consideration to
securing the most favorable price and efficient execution.
Within the framework of this policy, the Sub-Adviser may
consider the financial responsibility, research and investment
information and other services provided by brokers or dealers
who may effect or be a party to any such transaction or other
transactions to which the Sub-Adviser's other clients may be a
party. It is understood that it is desirable for the Portfolio
that the Sub-Adviser have access to supplemental investment and
market research and security and economic analysis provided by
brokers who may execute brokerage transactions at higher cost to
the Portfolio than may result when allocating brokerage to other
brokers on the basis of seeking the most favorable price and
efficient execution. Therefore, the Sub-Adviser is authorized to
place orders for the purchase and sale of securities for the
Portfolio with such brokers, subject to review by the Trust's
Board of Trustees from time to time with respect to the extent
and continuation of this practice. It is understood that the
services provided by such brokers may be useful to the
Sub-Adviser in connection with the Sub-Adviser's services to
other clients.
On occasions when the Sub-Adviser deems the purchase or sale
of a security to be in the best interest of the Portfolio as
well as other clients of the Sub-Adviser, the Sub-Adviser, to
the extent permitted by applicable laws and regulations, may,
but shall be under no obligation to, aggregate the securities to
be so purchased or sold in order to obtain the most favorable
price or lower brokerage commissions and efficient execution. In
such event, allocation of the securities so purchased or sold,
as well as the expenses incurred in the transaction, will be
made by the Sub-Adviser in the manner it considers to be the
most equitable and consistent with its fiduciary obligation to
the Portfolio and to such other clients.
(4) The Sub-Adviser shall maintain all books and records with
respect to the Portfolio's portfolio transactions required by
subparagraphs (b)(5), (6), (7), (9), (10) and (11) and paragraph
(f) of Rule 31a-1 under the 1940 Act and shall render to the
Board of Trustees such periodic and special reports as the Board
of Trustees may reasonably request.
(5) The Sub-Adviser shall provide the Portfolio's Custodian on each
business day with information relating to all transactions
concerning the Portfolio's assets and shall provide the Adviser
with such information upon request of the Adviser.
(6) The investment sub-advisory services provided by the Sub-Adviser
under this Agreement are not to be deemed exclusive and the
Sub-Adviser shall be free to render similar services to others,
as long as such services do not impair the services rendered to
the Adviser or the Trust.
(7) The Sub-Adviser shall provide such reports and data in hard copy
and machine readable form as are requested by the Adviser and
which are consistent with the Sub-Adviser's normal data
production capabilities.
(8) The Sub-Adviser shall prepare a quarterly broker security
transaction summary and monthly security transaction listing for
the Portfolio.
<PAGE>
(9) Unless the Board of Trustees of the Trust or the Adviser directs
otherwise in a particular instance or generally, the Sub-Adviser
shall take reasonable measures to vote, give and withhold
consents with respect to, and take all other similar actions
relating to, the securities and other investments owned by the
Portfolio.
(10) The Sub-Adviser shall report regularly to the Adviser and shall
make appropriate persons available for the purpose of reviewing
at reasonable times with representatives of the Adviser and the
Board of Trustees of the Trust the management of the Portfolio,
including, without limitation, review of the general investment
strategy of the Portfolio, the performance of the Portfolio in
relation to standard industry indices, interest rate
considerations and general conditions affecting the marketplace
and shall provide various other reports from time to time as
reasonably requested by the Adviser.
(11) The Sub-Adviser shall treat confidentially and as proprietary
information of the Trust all such records and other information
relative to the Trust maintained by the Sub-Adviser, and shall
not use such records and information for any purpose other than
performance of its responsibilities and duties hereunder, except
after prior notification to and approval in writing by the
Trust, which approval shall not be unreasonably withheld and may
not be withheld where the Sub-Adviser may be exposed to civil or
criminal contempt proceeding for failure to comply, when
requested to divulge such information by duly constituted
authorities, or when so requested by the Trust.
(b) Services to be furnished by the Sub-Adviser under this Agreement
may be furnished through the medium of any of the Sub-Adviser's
partners, officers or employees.
(c) The Sub-Adviser shall keep the Portfolio's books and records
required to be maintained by the Sub-Adviser pursuant to paragraph
1(a) of this Agreement and shall timely furnish to the Adviser all
information relating to the Sub-Adviser's services under this
Agreement needed by the Adviser to keep the other books and records
of the Portfolio required by Rule 31a-1 under the 1940 Act. The
Sub-Adviser agrees that all records that it maintains on behalf of
the Portfolio are property of the Portfolio and the SubAdviser
shall surrender promptly to the Portfolio any of such records upon
the Portfolio's request; provided, however, that the Sub-Adviser
may retain a copy of such records. The Sub-Adviser further agrees
to preserve for the periods prescribed by Rule 31a-2 under the 1940
Act any such records as are required to be maintained by it
pursuant to paragraph 1(a) of this Agreement.
2. For all purposes of this Agreement the Sub-Adviser shall be deemed
to be an independent contractor, and shall have no authority to act
as agent for the Adviser or the Trust in any manner or in any
respect.
3. The Adviser has delivered to the Sub-Adviser copies of each of the
following documents and shall deliver to it all future amendments
and supplements, if any:
(a) The Trust's Declaration of Trust, as filed with the
Secretary of State of the Commonwealth of Massachusetts
(such Agreement and Declaration of Trust, as
<PAGE>
in effect on the date of this Agreement and as amended from
time to time, herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date
of this Agreement and as amended from time to time, are
herein called the "By-Laws");
(c) Certified resolutions of the Board of Trustees of the Trust
authorizing the appointment of the Adviser and the
Sub-Adviser with respect to the Portfolio, and approving the
form of this Agreement;
(d) Registration Statement under the 1940 Act and the Securities
Act of 1933, as amended, on Form N-1A (the "Registration
Statement"), as filed with the Securities and Exchange
Commission (the "Commission") relating to the Portfolio and
shares of the Portfolio, and all amendments thereto;
(e) Notification of Registration of the Trust under the 1940 Act
on Form N-8A as filed with the Commission, and all
amendments thereto; and
(f) Prospectus(es) of the Portfolio
4. During the term of this Agreement, the Sub-Adviser shall pay all
expenses incurred by it in connection with its activities under
this Agreement other than the cost of securities (including
brokerage commissions, if any) purchased for the Portfolio. For the
services provided and the expense assumed by the Sub-Adviser
pursuant to this Agreement, the Adviser shall pay the Sub-Adviser,
and the Sub-Adviser agrees to accept as full compensation therefor,
a sub-advisory fee at an annual rate of .60% on the first $50
million, .45% on the next $100 million and .30% over $150 million
of the Portfolio's average daily net assets. This fee shall be
computed daily and paid to the Sub-Adviser monthly. The Sub-Adviser
may, in its discretion and from time to time, waive a portion of
its fee.
5. The Sub-Adviser shall not be liable for any error of judgment or
for any loss suffered by the Portfolio or the Adviser in connection
with performance of its obligations under this Agreement, except a
loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services (in which case any award of
damages shall be limited to the period and the amount set forth in
Section 36(b)(3) of the 1940 Act), or a loss resulting from willful
misfeasance, bad faith or gross negligence on the Sub-Adviser's
part in the performance of its duties or from reckless disregard of
its obligations and duties under this Agreement, except as may
otherwise be provided under provisions of applicable state law
which cannot be waived or modified hereby.
6. This Agreement shall become effective as of the date hereof with
respect to the Portfolio and, unless sooner terminated as provided
herein, shall continue in effect with respect to the Portfolio
until February, 28, 1997. Thereafter, if not terminated, this
Agreement shall automatically continue in effect as to the
Portfolio for successive annual periods, provided such continuance
is specifically approved at least annually (a) by the vote of a
majority of those members of the Trust's Board of Trustees who are
not interested persons of any party to this Agreement, cast in
person at a meeting called for the purpose of voting on such
approval, and (b) by the Trust's Board of Trustees or by vote of a
majority of the outstanding voting securities of the Portfolio;
provided,
<PAGE>
however, that if the shareholders of the Portfolio fail to approve
the continuance of this Agreement as provided herein, the
Sub-Adviser may continue to serve hereunder in the manner and to
the extent permitted under 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.
Notwithstanding the foregoing, this Agreement may be terminated as
to the Portfolio at any time, without the payment of any penalty,
by the Trust (by vote of the Trust's Board of Trustees or by vote
of a majority of the outstanding securities of the Portfolio), by
the Adviser, or by the Sub-Adviser on sixty days' written notice to
each of the other parties hereto. This Agreement shall terminate
automatically and immediately in the event of its assignment, and
shall also terminate automatically and immediately upon the
termination of the Advisory Agreement.
As used in this Section 6, the terms "assignment," "interested
persons" and "vote of a majority of the outstanding voting
securities" shall have the respective meanings set forth in the
1940 Act and the rules and regulations thereunder, subject to such
exceptions as may be granted by the Commission under the 1940 Act.
7. As long as the services to the Adviser and the Trust under this
Agreement are not impaired, nothing in this Agreement shall limit
or restrict the right of any of the Sub-Adviser's partners,
officers, or employees to engage in any other business or to devote
his or her time and attention in part to the management or other
aspects of any business, whether of a similar or dissimilar nature,
nor limit or restrict the Sub-Adviser's right to engage in any
other business or to render services of any kind to any other
corporation, firm, individual or association.
8. During the term of this Agreement, the Trust agrees to furnish the
Sub-Adviser at its principal office all prospectuses, proxy
statements, reports to stockholders, sales literature or other
materials prepared for distribution to stockholders of the
Portfolio or the public that refer to the Sub-Adviser or its
clients in any way prior to use thereof and not to use material if
the Sub-Adviser reasonably objects in writing within five business
days (or such other period as may be mutually agreed) after receipt
thereof. The Sub-Adviser's right to object to such materials is
limited to the portions of such materials that expressly relate to
the Sub-Adviser, its services and its clients. The Trust agrees to
use its reasonable best efforts to ensure that materials prepared
by its employees or agents or its affiliates that refer to the
Sub-Adviser or its clients in any way are consistent with those
materials previously approved by the Sub-Adviser as referenced in
the first sentence of this paragraph. Sales literature may be
furnished to the Sub-Adviser by first class or overnight mail,
facsimile transmission equipment or hand delivery.
9. The terms or provisions of this Agreement may be amended, modified
or waived in writing if such amendment, modification or waiver is
approved by the affirmative vote or action by written consent of
the Board of Trustees of the Trust and by the Adviser and
Sub-Adviser in accordance with the 1940 Act; provided, that an
amendment, modification or waiver shall also be approved by the
shareholders of the Trust if shareholder approval is required by
the 1940 Act and the rules and regulations thereunder.
<PAGE>
10. This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts; provided, however, that nothing herein shall be
construed as being inconsistent with the 1940 Act.
11. This Agreement embodies the entire agreement and understanding
among the parties hereto with respect to the services to be
provided by the Sub-Adviser, and supersedes all prior agreements
and understandings relating to this Agreement's subject matter.
This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
12. Should any part of this Agreement be held invalid by a court
decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto
and their respective successors.
13. Any notice, advice or report to be given pursuant to this Agreement
shall be delivered or mailed:
To the Adviser at:
United Jersey Bank
210 Main Street
Hackensack, NJ 07601
Attention: President
To the Sub-Adviser at:
Wellington Management Company
75 State Street
Boston, MA 02109
Attention: Legal Department
To the Trust or the Portfolio at:
The Pillar Funds
c/o SEI Corporation
680 East Swedesford Road
Wayne, PA 19087
Attention: Legal Department
Any party may change its address for notices, advices or reports
hereunder by giving notice of such change to the other parties in
accordance with this Section 13.
14. Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or
order of the Commission, whether of special or general application,
such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
A copy of the Agreement and 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 instrument is executed on behalf of the
Trustees of the Trust as Trustees, and is not binding upon any of the Trustees,
officers, or shareholders of the Trust individually but binding
<PAGE>
only upon the assets and property of the Portfolio of the Trust. No
portfolio of the Trust shall be liable for any other portfolio of the
Trust. Without limiting the generality of the foregoing, the
Sub-Adviser shall look only to the assets of the Portfolio for payment
of fees for services rendered to the Portfolio.
In the event that there is a change in the partners of the Sub-Adviser,
the Sub-Adviser shall notify the Adviser and the Trust within a reasonable
period of time.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their of officers designated below as of the day and year first
written above.
United Jersey Bank Investment Management Wellington Management Company
Division, a division of United Jersey Bank
By: /s/ John W. Gustafson By: /s/ Duncan M. McFarland
-------------------------------- -----------------------------
Title: Senior Vice President Title: President
----------------------------- --------------------------
The Pillar Funds
By: /s/ Kathyrn L. Stanton
--------------------------------
Title: Vice President
-----------------------------
SCHEDULE D
DATED NOVEMBER 14, 1996
TO THE ADMINISTRATION AGREEMENT
DATED FEBRUARY 28, 1992
BETWEEN
THE PILLAR FUNDS
AND
SEI FUND RESOURCES
Purant to Article 10, the Administrator shall provide services to the
following additional portfolio (the "Portfolio"):
Equity Growth Fund
Pursuant to Article 6, Section A, the Trust shall pay the Administrator
compensation for the Portfolio which is calculated daily and paid monthly at an
annual rate as follows:
.20% of the Portfolio's average daily net assets
PILLAR EQUITY GROWTH FUND
SCHEDULE DATED NOVEMBER 14, 1996
TO THE INVESTMENT ADVISORY AGREEMENT
DATED APRIL 28, 1995
BETWEEN
THE PILLAR FUNDS
AND
UNITED JERSEY BANK INVESTMENT MANAGEMENT DIVISION,
A DIVISION OF UNITED JERSEY BANK
Fees: Pursuant to Section 3, the Trust shall pay the Adviser compensation for
services rendered to the Equity Growth Fund (the "Portfolio") at an
annual rate of .75% of the Portfolio's average daily net assets.
CONSENT TO ASSIGNMENT AND ASSUMPTION
1. SEI Financial Management Corporation ("Assignor") hereby notifies
[_____________] ("Trust") that it intends to assign all of its rights and
delegate its obligations under the [agreement title] between [____________]
and SEI Financial Management Corporation, dated [_______________] (the
"Assignment and Assumption Agreement") to [Name of business trust],
("Assignee"), no later than [_____________], in connection with the
transition of Assignor's fund administration and distribution business to
Assignee;
2. Trust releases Assignor from its rights and obligations under the Agreement
on or after the date the Assignment and Assumption Agreement is executed and
any liability or responsibility for (i) breach of the Agreement by Assignee
or (ii) demands and claims made against the Trust or damages, losses or
expenses incurred by the Trust on or after the date of the Assignment and
Assumption Agreement, unless such demands, claims, losses, damages or
expenses arose out of or resulted from an act or omission of Assignor prior
to the date of the Assignment and Assumption Agreement.
3. This consent is not a waiver or estoppel with respect to any rights the
Trust may have by reason of the past performance or failure to perform by
Assignor.
4. This consent is conditioned upon the execution of an Assignment and
Assumption Agreement between Assignor and Assignee that require(s) Assignee
(i) to assume all rights and obligations of Assignor under the Agreement and
(ii) to be liable to the Trust for any default or breach of the Agreement to
the extent the default or breach occurs on or after the date of execution of
the Assignment and Assumption Agreement.
5. Except as provided herein, neither this consent nor the Assignment and
Assumption Agreement shall alter or modify the terms or conditions of the
Agreement.
Trust: Assignor:
SEI Financial Management Corporation
By: _______________________________ By: ____________________________________
Title: ____________________________ Title: _________________________________
Date: _____________________________ Date: __________________________________
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of this 28th day of February, 1992, by and
between The Pillar Funds (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, 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.
<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. The Distributor does not receive compensation
for services performed and expenses assumed in the distribution of Class A
shares of the Trust. As compensation for the services performed and the expenses
assumed under this Agreement as to Class B shares of the Trust, and to the
extent provided in the Trust's annual budget under its Class B Distribution Plan
adopted in accordance with Rule 12b-1 under the Investment Company Act of 1940,
the Trust shall reimburse the Distributor for (i) the cost of preparing and
printing prospectuses and statements of additional information, reports to
Shareholders, sales literature and other materials for potential investors;
(ii) advertising; (iii) sales literature; and (iv) expenses incurred in
connection with the distribution of shares.
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
<PAGE>
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
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 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, 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 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
paragraph with 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 paragraph.
The Distributor shall be entitled to participate, at its own expense, in
the defense or, if is 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.
<PAGE>
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 of the Trust's Distribution Plan 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 SFS, 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 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 unitholders 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 to the provisions herein, conflict with the applicable
provisions of the 1940 Act, the latter shall control.
<PAGE>
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.
IN WITNESS WHEREOF, the Trust and Distributor have each duly executed
this Agreement, as of the day and year above written.
THE PILLAR FUNDS
By: /s/ illegible signature
---------------------------------
SEI FINANCIAL SERVICES COMPANY
By: /s/ illegible signature
---------------------------------
Vice President
CUSTODIAN AGREEMENT
This Agreement, dated as of the 28th day of February, 1992 by and
between The Pillar Funds (the "Trust"), a business trust operating as an
open-end investment company, duly organized under the laws of the Commonwealth
of Massachusetts and United Jersey Bank, a state chartered New Jersey bank;
WHEREAS, the Trust desires to deposit cash and securities with United
Jersey Bank as custodian; and
WHEREAS, United Jersey Bank 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 United Jersey Bank 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
<PAGE>
from time to time of the Shares of the Trust in accordance with the registry
records maintained by 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.
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
reinvestment 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.
2
<PAGE>
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:
(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;
3
<PAGE>
(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 Agreement, except only for liability
arising out of the Custodian's own gross 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.
4
<PAGE>
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.
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.
5
<PAGE>
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.
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.
6
<PAGE>
SECTION 18. 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.
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.
The Pillar Funds
By: /s/ [Illegible Signature]
---------------------------------
United Jersey Bank
By: /s/ [Illegible Signature]
---------------------------------
7
<PAGE>
SCHEDULE A
Fee Schedule
ALL Portfolios: .025% of average daily net assets of each Portfolio.
CUSTODIAN AGREEMENT
(FOREIGN AND DOMESTIC SECURITIES)
This Custodian Agreement is made by and between UNITED JERSEY BANK
("Principal") and THE BANK OF CALIFORNIA, NATIONAL ASSOCIATION ("Custodian").
Principal desires that Custodian hold and administer on behalf of Principal
certain Securities (as herein defined). Custodian is willing to do so on the
terms and conditions set forth in this Agreement. Accordingly, Principal and
Custodian agree as follows:
1. Definitions. Certain terms used in this Agreement are defined as
follows:
(a) "Account" means, collectively, each custodianship account main-
tained by Custodian pursuant to Paragraph 3 of this Agreement.
(b) "Depository" means a securities depository or clearing agency
incorporated or organized under the laws of the United States or a country other
than the United States which (i) operates as or is part of the central system
for handling securities or equivalent book-entries in that country, or (ii)
operates a transnational system for the central handling of securities or
equiva- lent book-entries, or (iii) is the subject of an exemptive order of the
U.S. Securities and Exchange Commission ("SEC") with respect to applicable
require- ments of SEC Rule 17f-5 under the Investment Company Act of 1940, 17
C.F.R. 270.17f-5, as amended.
(c) "Investment Manager" means an investment advisor or manager
identified by Principal in a written notice to Custodian as having the authority
to direct Custodian regarding the management, acquisition, or disposition of
Securities.
(d) "Securities" means domestic or foreign securities or both within
the meaning of regulations issued by (i) the U.S. Department of Labor ("DOL")
under Section 404(b) of the Employee Retirement Income Security Act of 1974
("ERISA"), 29 C.F.R. 2550.404b-1(a)(1), as amended, or (ii) the SEC under
Section 17(f) of the Investment Company Act of 1940, 17 C.F.R. 270.17f-5(c)(1),
as amended, which are held by Custodian in the Account, and shall include case
of any currency or other property and all income and proceeds of sale of such
securities or other property.
(e) "Sub-Custodian" means a foreign banking institution, trust
company, or other entity which is qualified to act as a foreign custodian.
2. Representations.
(a) Principal represents that with respect to any Account
established by Principal to hold Securities, Principal is authorized to enter
into this Agreement and to retain Custodian on the terms and conditions and
for the purposes described herein.
(b) Custodian represents that (i) it is organized under the laws of
the United States and has its principal place of business in the United States,
(ii) it is a bank within the meaning of Section 202(a)(2) of the Investment
Advisors Act of 1940 and Section 2(a)(5) of the Investment Company Act of 1940,
and (iii) as of the effective date hereof, it has equity capital in excess of
$1 million.
<PAGE>
3. Establishment of Accounts. Principal hereby establishes with
Custodian, and may in the future establish, one or more Accounts in Principal's
name. The Account shall consist of Securities delivered to and receipted for by
Custodian. Custodian, in its sole discretion, may refuse to accept any property
now or hereafter delivered to it for inclusion in the Account. Custodian will
indicate to Principal in writing the specific reason for such rejection.
4. Custody. Subject to the terms of this Agreement, Custodian shall be
responsible for the safekeeping and custody of the Securities. Custodian may
(i) retain possession of all or any portion of the Securities in a foreign
branch or other office of Custodian, or (ii) retain, in accordance with
Paragraph 5 of this Agreement, one or more Sub-Custodian to hold all or any por-
tion of the Securities. Custodian and any Sub-Custodian may, in accordance with
Paragraph 5 of this Agreement, deposit definitive or book-entry Securities with
one or more Depositories.
(a) If Custodian retains possession of Securities, Custodian shall
ensure the Securities are at all times properly identified as being held for the
appropriate Account. Custodian shall segregate physically the Securities from
any Property owned by Custodian. Custodian shall not be required to segregate
physically the Securities from other securities or property held by Custodian
for third parties, but Custodian shall maintain adequate records showing the
true ownership of the Securities.
(b) If Custodian deposits Securities with a Sub-Custodian, Custodian
shall maintain adequate records showing the identity and location of the Sub-
Custodian, the Securities held by the Sub-Custodian, and each Account to which
such Securities belong. Sub-custodian shall not be required to segregate the
Securities from other securities or property held by sub-custodian for third
parties, but Custodian shall maintain adequate records showing the true owner-
ship of the Securities.
(c) If Custodian or any Sub-Custodian deposits Securities with a
Depository, Custodian shall maintain, or shall cause the Sub-Custodian to main-
tain, adequate records showing the identity and location of the Depository, the
Securities held by the Depository, and each Account to which such Securities
belong. Depository shall not be required to segregate the Securities from other
securities or property held by the Depository for third parties. Custodian shall
maintain adequate records showing the true ownership of the Securities.
(d) If Principal directs Custodian to deliver certificates or other
physical evidence or ownership of Securities to any broker or other party, other
than a Sub-Custodian or Depository employed by Custodian for purposes of main-
taining the Account, Custodian's sole responsibility shall be to exercise care
and diligence in effecting the delivery as instructed by Principal. Upon
completion of the delivery, Custodian shall be discharged completely of any
further liability or responsibility with respect to the safekeeping and custody
of Securities so delivered.
(e) Custodian shall ensure that (i) the Securities will not be sub-
ject to any right, charge, security interest, lien, or claim of any kind in
favor of Custodian or any Sub-Custodian or Depository except for the Securities'
safe custody or administration, and (ii) the beneficial ownership of the
Securities will be freely transferable without the payment of money or value
other than for safe custody or administration.
(f) Principal or its authorized representatives shall have reasonable
access to inspect books and records maintain by Custodian or any Sub-Custodian
or Depository holding Securities hereunder to verify the accuracy of such books
and records. Custodian shall notify Principal promptly of any applicable law or
regulation in any country where Securities are held that would restrict such
access or inspection.
<PAGE>
(5) Sub-Custodians and Depositories. With Principal's approval, as pro-
vided in Paragraph 5(c) of this Agreement, Custodian may from time to time
retain one or more Sub-Custodians and Depositories to hold Securities here-
under.
(a) Custodian shall exercise reasonable care in the selection of Sub-
Custodians and Depositories. In making its selection, Custodian shall consider
(i) the Sub-Custodian's or Depository's financial strength, general reputation
and standing in the country in which it is located, its ability to provide
efficiently the custodial services required, and the relative cost of such
services, (ii) whether the Sub-Custodian or Depository would provide a level of
safeguards for safekeeping and custody of Securities not materially different
from those prevailing in the U.S., (iii) whether the Sub-Custodian or Depository
has branch offices in the U.S. in order to facilitate jurisdiction over and
enforcement of judgments against it, and (iv) in the case of a Depository, the
number of its participants and its operating history.
(b) Custodian shall give written notice to Principal of its intention
to deposit Securities with a Sub-Custodian or (directly or through a Sub-
Custodian) with a Depository. The notice shall identify the proposed Sub-
Custodian or Depository and shall include reasonably available information
relied on by Custodian in making the selection and, where applicable, a copy
of the proposed form of agreement with the Sub-Custodian or Depository.
(c) Within 30 days of its receipt of a notice from Custodian pursuant
to Paragraph 5(b) of this Agreement regarding Custodian's proposed selection of
one or more Sub-Custodians or Depositories, Principal shall give written notice
to Custodian of Principal's approval or disapproval of the proposed selection.
Principal hereby approves Custodian's retention of those Sub-Custodians and
Depositories, if any, that have been identified to it by Custodian prior to
Principal's execution of this Agreement, as referred to in Appendix A.
(d) Custodian shall evaluate and determine at least annually the
continued eligibility of each Sub-Custodian and Depository approved by Principal
to act as such hereunder. In discharging this responsibility, Custodian shall
(i) monitor continuously the day to day services and reports provided by each
Sub- Custodian or Depository, (ii) at least annually, obtain and review the
annual financial report published by such Sub-Custodian or Depository and any
reports on such Sub-Custodian or Depository prepared by a reputable independent
analyst, (iii) at least triennially, physically inspect the operations of such
Sub- Custodian or Depository and (iv) Custodian shall provide client with report
of annual review.
(e) If Custodian determines that any Sub-Custodian or Depository no
longer satisfies the applicable requirements described in Paragraph 1(b) (in the
case of a Depository) or Paragraph 1(c) (in the case of a Sub-Custodian) of this
Agreement or is otherwise no longer capable or qualified to perform the
functions contemplated herein, Custodian shall promptly give written notice
thereof to Principal. The notice shall, in addition, either (i) indicate
Custodian's intention to transfer Securities held by the removed Sub-Custodian
or Depository to another Sub-Custodian or Depository previously approved by
Principal, or (ii) include a notice pursuant to Paragraph 5(b) of this
Agreement of Custodian's intention to deposit Securities with a new Sub-
Custodian or Depository.
6. Registration. Subjects to any specific instructions from Principal,
Custodian shall hold or cause to be held all Securities in the name or nominee
of Custodian, or any Sub-Custodian or Depository approved by Principal pursuant
to Paragraph 5 of this Agreement, as Custodian shall determine to be appropriate
under the circumstances.
<PAGE>
7. Transactions. Principal or any Investment Manager from time to time
may instruct Custodian (which in turn shall be responsible for giving appro-
priate instructions to any Sub-Custodian or Depository) regarding the purchase
or sale of Securities in accordance with this Paragraph 7:
(a) Custodian shall effect and account for each Securities and
currency sale on the date such transaction actually settles; provided, however,
that Principal may in it sole discretion direct Custodian, in such manner as
shall be acceptable to Custodian, to account for Securities and currency pur-
chases and sales on contractual settlement date, regardless of whether settle-
ment of such transactions actually occurs on contractual settlement date.
Principal may, from time to time, direct Custodian to change the accounting
method employed by Custodian in a written notice delivered to Custodian at least
thirty (30) days prior to the date a change in accounting method shall become
effective.
(b) Custodian shall effect purchases by charging the Account with the
amount necessary to make the purchase and effecting payment to the seller or
broker for the securities or other property purchased. Custodian shall have no
liability of any kind to any person, including Principal, except in the case of
negligent or intentional tortious acts, if the Custodian effects payment on
behalf of Principal, and the seller or broker fails to deliver the securities or
other property purchased. Custodian shall exercise such ordinary care as would
be employed by a reasonably prudent custodian and due diligence in examining and
verifying the certificates or other indicia of ownership of the property
purchased before accepting them.
(c) Custodian shall effect sales by delivering certificates or other
indicia of ownership of the Property, and, as instructed, shall receive cash for
such sales. Custodian shall have no liability of any kind to any person, includ-
ing Principal, if Custodian delivers such certificates or indicia of ownership
and the purchaser or broker fails to effect payment. If a purchase or sale is
effected through a Depository, Custodian shall exercise such care as would be
employed by a reasonably prudent custodian and due diligence in verifying proper
consummation of the transaction by the Depository.
(d) Principal or, where applicable, the Investment Manager, is
responsible for ensuring Custodian receives timely instructions and or/funds
to enable Custodian to effect settlement of any purchase or sale of Securities
or Foreign Exchange. If Custodian does not receive such timely instructions or
receipt of funds, Custodian shall have no liability of any kind to any person,
including Principal, for failing to effect settlement. However, Custodian shall
use reasonable efforts to effect settlement as soon as possible after receipt of
appropriate instructions. Principal shall be liable for interest compensation
to Custodian and/or counterparty for failure to deliver instructions or funds
in a timely manner to effect settlements of third party foreign exchange funds
movement.
(e) At the direction of Principal or the Investment Manager, as the
case may be, Custodian shall convert currency in the Account to other currencies
through customary channels including, without limitation, Custodian or any of
its affiliates, as shall be necessary to effect any transaction directed by
Principal or the Investment Manager. Principal or the Investment Manager, as the
case may be, acknowledges that 1) the foreign currency exchange department is a
part of the Custodian or one of its affiliates or subsidiaries, 2) the Account
is not obligated to effect foreign currency exchange with Custodian, 3) the
Custodian will receive benefits for such foreign currency transactions which
are in addition to the compensation which the Custodian receives for administer-
ing the Account, and 4) the Custodian will make available the relevant data so
that Principal or the Investment Manager, as the case may be, can determine that
the foreign currency exchange transactions are as favorable to the Account as
<PAGE>
terms generally available in arm's length transactions between unrelated
parties.
(f) Custodian shall have no responsibility to manage or recommend
investments of the Account or to initiate any purchase, sale, or other invest-
ment transaction in the absence of instructions from Principal or, were
applicable, an Investment Manager.
8. Capital Changes; Income.
(a) Custodian may, without further instructions from Principal or any
Investment Manager, exchange temporary certificates and may surrender and
exchange Securities for other securities in connection with any reorganization,
recapitalization, or similar transaction in which the owner of the Securities is
not given an option. Custodian has no responsibility to effect any such
exchange unless it has received actual notice of the event permitting or
requiring such exchange at its office designated in Paragraph 14 of this
Agreement
(b) Custodian is authorized, as Principal's agent, to surrender
against payment maturing obligations and obligations called for redemption, and
to collect and receive payments of interest and principal, dividends, warrants,
and other things of value in connection with Securities. Except as otherwise
provided in Paragraph 15(d) of this Agreement, Custodian shall not be obligated
to enforce collection of any item by legal process or other means.
(c) Custodian is authorized to sign for Principal all declarations,
affidavits, certificates, or other documents that may be required to collect
or receive payments or distributions with respect to Securities. Custodian is
authorized to disclose, without further consent of Principal, Principal's
identity to issuers of Securities, or the agents of such issuers, who may
request such disclosure.
9. Notices re Account Securities. Custodian shall notify Principal or,
where applicable, the Investment Manager, of any reorganization, recapitaliza-
tion, or similar transaction not covered by Paragraph 8, and any subscription
rights, proxies, and other shareholder information pertaining to the Securities
actual notice of which is received by Custodian at its office designated in
Paragraph 14 of this Agreement. Custodian's sole responsibility in this regard
shall be to give such notices to Principal or the Investment Manager, as the
case may be, within a reasonable time after Custodian receives them, and
Custodian shall not otherwise be responsible for the timeliness of such notices.
Custodian has no responsibility to respond or otherwise act with respect to any
such notice unless and until Custodian has received appropriate instructions
from Principal or the Investment Manager.
10. Taxes. Custodian shall pay or cause to be paid from the Account all
taxes and levies in the nature of taxes imposed on the Account or the
Securities thereof any country. However, Custodian shall use reasonable efforts
to obtain refunds of taxes withheld on Securities or the income thereof that
are available under applicable tax laws, treaties, and regulations.
11. Cash. By executing this Agreement Principal directs Custodian to hold
Account cash or any currency in The HighMark Group of mutual funds or in any
investment company for which Custodian or its affiliates or subsidiaries, acts
as investment advisor, custodies the assets, or provides other services.
Principal shall designate the particular HighMark fund or such other above-
mentioned fund that Principal deems appropriate for the Account. Principal or
an Investment Manager, where applicable, acknowledges that Custodian will
receive fees for such services which will be in addition to those fees charged
by Custodian as agent for the Account.
<PAGE>
12. Reports. Custodian shall give written reports to Principal showing
(i) each transaction involving Securities effected by or reported to Custodian,
(ii) the identity and location of Securities held by Custodian as of the date
of the report, (iii) any transfer of location of Securities not otherwise
reported, and (iv) such other information as shall be agreed upon by Principal
and Custodian. Unless otherwise agreed upon by Principal and Custodian,
Custodian shall provide the reports described in this Paragraph 12 on a monthly
basis.
13. Instructions from Principal.
(a) Principal shall certify or cause to be certified to Custodian in
writing the names and specimen signatures of all persons authorized to give
instructions, notices, or other communications on behalf of Principal or any
Investment Manager. Such certification shall remain effective until Custodian
receives notice to the contrary.
(b) Principal or any Investment Manager may give any instruction,
notice, or other communication called for this Agreement to Custodian in
writing, or by telecopy, telex, telegram, or other form of electronic
communication acceptable to Custodian. However, Principal or the Investment
Manager shall confirm promptly any oral communication in writing. Custodian
shall not be responsible for any unauthorized use of any form of electronic
communication purporting to come from Principal or Investment Manager.
(c) All such communications shall be deemed effective upon receipt
by Custodian at its address specified in Paragraph 14 of this Agreement, as
amended from time to time. Custodian without liability may rely upon and act
in accordance with any instruction that Custodian in good faith believes has
been given by Principal or an Investment Manager.
(d) Custodian may at any time request instructions from Principal
and may await such instructions without incurring liability. Custodian has no
obligation to act in the absence of such requested instructions, but may,
however, without liability take such action as it deems appropriate to carry
out the purposes of this Agreement.
14. Addresses. Until further notice from either party, all communications
called for under this Agreement shall be addressed as follows:
If to Principal:
United Jersey Bank
210 Main Street
Hackensack, NJ 07602
Attn: Mr. Richard Rolandelli, V.P.
Manager Custody Administration
Telephone: 201-646-6233
Telecopier: 201-646-0087
<PAGE>
If to Custodian:
THE BANK OF CALIFORNIA, NATIONAL ASSOCIATION
Mitsubishi Global Custody
475 Sansome Street, 12 Floor
San Francisco, California 94111
Attn: Ms. Janet E. Potter, Vice President
Telephone: (415) 291-7685
Telecopier: (415) 291-7696
Telex (Answerback): 215748/MBCTD UR
15. Custodian's Responsibilities and Liabilities.
(a) Custodian's duties and responsibilities shall be limited to those
expressly set forth in this Agreement, or as otherwise agreed by Custodian in
writing. In carrying out its responsibilities, Custodian shall exercise no less
than the same degree of care and diligence it usually exercises with respect
to similar property of its own.
(b) 1) - Insurance, Custodian (i) shall not be required to maintain
any special insurance for the benefit of Principal, and (ii) shall not be liable
or responsible for any loss of or damage to Securities resulting from any causes
beyond Custodian's reasonable control including, without limitations, acts of
God, war, government action, civil commotion, fire, earthquake, or other
casualty or disaster. However, Custodian shall use reasonable efforts to replace
Securities lost or damaged due to such causes with securities of the same class
and issue with all rights and privileges pertaining thereto. Insurance coverage
by agent is disclosed in annual Sub-Agent Review.
(b)2) Disaster Recovery. Custodian has detailed disaster recovery
plan, including a hot-site backup. Custodian reviews and conducts a test of the
plan annually.
(c) The parties intend that Custodian shall not be considered a
fiduciary of the Account. Accordingly, Custodian shall have no power to make
decisions regarding any policy, interpretation, practice, or procedure with
respect to the Account, but shall perform the ministerial and administrative
functions described in this Agreement as provided herein and within the frame-
work of policies, interpretations, rules, practices, and procedures made by
Principal or an investment manager, where applicable, as the same shall be
reflected in instructions to Custodian from Principal or any Investment Manager.
(d) Custodian shall not be required to appear in or defend any legal
proceedings with respect to the Account or the Securities unless Custodian has
been idemnified to its satisfaction against loss and expense (including reason-
able attorney's fees).
(e) Custodian may consult with counsel acceptable to it and after
written notification to Principal concerning its duties and responsibilities
under this Agreement, and shall not be liable for any action taken or not
taken in good faith on the advise of such counsel. Custodian will only consult
counsel in matters outside the ordinary operations of the account. Principal has
ten (10) days after receipt of written notice to contact custodian about such
consultation.
<PAGE>
16. Indemnities.
(a) Principal hereby agrees to indemnify Custodian against all
liability, claims, demands, damages, losses, and costs, including reasonable
attorney's fees and expenses of legal proceedings, resulting from Custodian's
compliance with instructions from Principal or any Investment Manager and the
terms of this Agreement, except where Custodian has acted with negligence or
willful misconduct.
(b) Custodian's right to indemnity under Paragraph 16(a) of this
Agreement shall survive the termination of this Agreement.
17. Compensation: Expenses. Principal shall reimburse Custodian for all
reasonable out-of-pocket expenses incurred by Custodian in the administration
of the Account including, without limitation, reasonable counsel fees incurred
by Custodian pursuant to Paragraph 15(e) of this Agreement. Principal also shall
pay Custodian reasonable compensation for its services hereunder as specified
in Appendix B. Custodian shall be entitled to withdraw such expenses or compen-
sation from the Account if Principal fails to pay the same to Custodian within
a reasonable time (not to exceed 45 days) after Custodian has sent an appro-
priate billing to Principal.
18. Amendment: Termination. This Agreement may be amended at any time by
a written instrument signed by the parties. Either party may terminate this
Agreement and the Account upon 90 days' written notice to the other unless the
parties agree on a different time period. Upon such termination, Custodian shall
deliver or cause to be delivered the Securities, less any amounts due and
owing to Custodian under this Agreement, to a successor custodian designated by
Principal or, if a successor custodian has not accepted an appointment by the
effective date of termination of the Account, to Principal. Upon completion of
such delivery Custodian shall be discharged of any further liability or
responsibility with respect to the Securities so delivered.
20. Successors. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their successors in interest.
21. Governing Law. The validity, construction, and administration of this
Agreement shall be governed by the applicable laws of the United States from
time to time in force and effect and, to the extent not preempted by such laws
of the United States, by the laws of the State of California from time to time
in force and effect.
22. Effective Date. This Agreement shall be effective as of the date
appearing below, and shall supersede any prior or existing agreements between
the parties pertaining to the subject matter hereof.
Date ______________________________
<PAGE>
UNITED JERSEY BANK
Attested By:
By: /s/ R.D.R. /s/ Debra Schwalb
- --------------------------------------- ---------------------------------
Authorized Signature
Richard D. Rein Debra Schwalb
Senior Vice President Assistant Secretary
Title: ________________________________ Title: __________________________
"Principal"
4/22/92
Date: _________________________________
THE BANK OF CALIFORNIA, NATIONAL ASSOCIATION
/s/ Ellen F. Russell
By: ____________________________________
Vice President
Title: _________________________________
/s/ [Illegible Signature]
By: ____________________________________
Vice President
Title: _________________________________
"Custodian"
April 17, 1992
Date: __________________________________
<PAGE>
APPENDIX A
SUB-CUSTODIAN NETWORK SUMMARY
_______________________________________________________________________________
Credit Ratings
Equity --------------------
Market Sub-Custodian (US$ mill) IBCA Moody's S&P
- ------------- ------------------------------ ---------- ---- ------- ---
Australia National Australia Bank $6,157 AA Aa3 AA
Belgium Kredietbank $1,407 AA- Aa2 A+
Canada Royal Bank of Canada $5,612 AA Aa2 AA
Denmark Den Danske Bank $3,557 AA- Aa2 A+
Euro-CDs First National Bank of Chicago $2,812 A- A1 A
Finland Union Bank of Finland $2,526 A+ Aa3 A
France Banque Indosuez $2,175 AA Aa3 AA-
Germany Hessische Landesbank GZ $1,012 AAA Aaa AAA
Hong Kong Hong Kong & Shanghai Bank $7,798 AA- P-1 A-1
Indonesia Standard Chartered Bank $1,967 A- A2 -NR-
Italy Banca Commerciale Italiana $4,286 AA Aa3 AA-
Japan Mitsubishi Bank $11,798 AA+ Aa1 AA
Malaysia Malayan Banking Berhad $ 663 -NR- -NR- -NR-
Mexico Citibank N.A. (Mexico Branch) $9,730 A- A2 A
Netherlands ABN AMRO Bank $8,964 AA Aa1 AA-
New Zealand National Australia Bank (NZ) $6,157 AA Aa3 AA
Norway Christiania Bank $ 401 BBB+ A3 A-3
Singapore DBS Bank $1,707 -NR- -NR- -NR-
Spain Banco Bilbao Vizcaya $5,648 AA P-1 AA-
Sweden Swenska Handelsbanken $2,980 AA Aa3 AA
Switzerland Union Bank of Switzerland $13,403 AAA Aaa AAA
Taiwan Standard Chartered Bank $1,967 A- A2 -NR-
Thailand Hong Kong & Shanghai Bank $7,798 AA- P-1 A-1
U.K. National Westminster Bank $11,647 AA+ Aa1 AA+
<PAGE>
MITSUBISHI GLOBAL CUSTODY
<TABLE>
<CAPTION>
CUSTODY FEES
TRANSACTION --------------------------------------------------------------------------------
FEES .02% .05% .10% .15% .20% .30%
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 35 Canada CEDEL Japan
United States Euroclear
First Chicago
- ----------------------------------------------------------------------------------------------
$ 50 Austria Netherlands Mexico
- ----------------------------------------------------------------------------------------------
$ 75 Belgium Ireland Australia Finland
France Sweden New Zealand Singapore
Germany United Kingdom
Norway
Switzerland
- ----------------------------------------------------------------------------------------------
$100 Denmark Hong Kong Italy Malaysia
Thailand Indonesia
Portugal
- -----------------------------------------------------------------------------------------------
$125 Philippines Spain
Taiwan
- ------------------------------------------------------------------------------------------------
</TABLE>
Third-Party Wires: Domestic $25.00
Foreign $35.00
<PAGE>
APPENDIX B
The Bank of California will charge the standard fee schedule by market.
The fees will be computed quarterly on the average net asset value for the
period.
[LETTERHEAD OF MORGAN, LEWIS & BOCKUS]
The Pillar Funds
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 The Pillar Funds (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. 33-44712) 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 assume 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 two classes (Class A and Class B) representing interests in
the U.S.
<PAGE>
MORGAN, LEWIS & BOCKIUS
The Pillar Funds
March 26 , 1992
Page 2
Treasury Securities Money Market Portfolio, Prime Obligation Money Market
Portfolio, Tax-Exempt Money Market Portfolio, Short-Term Investment Portfolio,
Fixed Income Portfolio, New Jersey Municipal Securities Portfolio,
Intermediate-Term Government Securities Portfolio, Equity Growth Portfolio,
Equity Income Portfolio, Equity Aggressive Growth Portfolio and Balanced Growth
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 non-assessable.
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 Accountants" in the Prospectus filed as part of such
Registration Statement.
Very truly yours,
/s/ Morgan, Lewis & Bockius
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our firm name
included in the Post-Effective Amendment No. 9 to the Registration Statement on
Form N-1A of the Pillar Funds (No. 33-44712), and to all references to our firm
included in this Registration Statement.
\s\ Arthur Andersen LLP
Philadelphia, Pa.,
November 12, 1996
DISTRIBUTION PLAN
Class B
The Pillar Funds
WHEREAS, The Pillar Funds (the "Trust") is engaged in business as an
open-end investment company registered under the Investment Company Act of 1940,
as amended ("1940 Act"); and
WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that the following Distribution Plan will benefit the
Trust and the owners of units of beneficial interest ("Shareholders") in the
Trust;
NOW, THEREFORE, the Trustees of the Trust hereby adopt this Distribution
Plan pursuant to Rule 12b-1 under the 1940 Act.
Section 1. The Trust has adopted this Class B Distribution Plan ("Plan") to
enable the Trust to directly or indirectly bear expenses relating to the
distribution of Class B shares of the portfolios (the "Portfolios") of the
Trust.
Section 2. The Trust will pay the Distributor a fee, accrued daily and paid
monthly, of up to .25% of the Class B Portfolios' average daily net assets. The
Distributor may apply this fee toward: a) compensation for its services in
connection with distribution assistance with respect to the Class B shares of
the Portfolios of the Trust or for its services in connection with the rendering
of shareholder services to the holders of Class B shares of the Portfolios of
the Trust; or b) payments to financial institutions and intermediaries (such as
banks, savings and loan associations, insurance companies, and investment
counselors), broker-dealers, and the Distributor's affiliates and subsidiaries
as compensation for services or reimbursement of expenses incurred in connection
with distribution assistance or provision of shareholder services to Class B
shares of the Portfolio of the Trust.
Section 3. This Plan shall not take effect until it has been approved
(a) by a vote of at least a majority of the outstanding voting securities of the
Trust; and (b) together with any related agreements, by votes of the majority of
both (i) the Trustees of the Trust and (ii) the Qualified Trustees, cast in
person at a Board of
<PAGE>
Trustees meeting called for the purpose of voting on this Plan or such
agreement.
Section 4. This Plan shall continue in effect for a period of more than one
year after it takes effect only for so long as such continuance is specifically
approved at least annually in the manner provided in Part (b) of Section 4
herein for the approval of this Plan.
Section 5. Any person authorized to direct the disposition of monies paid
or payable by the Trust pursuant to this Plan or any related agreement shall
provide to the Trustees of the Trust, at least quarterly, a written report of
the amounts so expended and the purposes for which such expenditures were made.
Section 6. This Plan may be terminated at any time by the vote of a
majority of the Qualified Trustees or by vote of a majority of the Trust's
outstanding voting securities.
Section 7. All agreements with any person relating to implementation of
this Plan shall be in writing, and any agreement related to this Plan shall
provide (a) that such agreement may be terminated at any time, without payment
of any penalty, by the vote of a majority of the Qualified Trustees or by the
vote of Shareholders holding a majority of the Trust's outstanding voting
securities, on not more than 60 days written notice to any other party to the
agreement; and (b) that such agreement shall terminate automatically in the
event of its assignment.
Section 8. This Plan may not be amended to increase materially the amount
of distribution expenses permitted pursuant to Section 2 hereof without the
approval of Shareholders holding a majority of the outstanding voting securities
of the Trust, and all material amendments to this Plan shall be approved in the
manner provided in Part (b) of Section 4 herein for the approval of this Plan.
Section 9. As used in this Plan, (a) the term "Qualified Trustees" shall
mean those Trustees of the Trust who are not interested persons of the Trust,
and have no direct or indirect financial interest in the operation of this Plan
or any agreements related to it, and (b) the terms "assignment" and "interested
person" shall have the respective meanings specified in the 1940 Act and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the Securities and Exchange Commission.
DISTRIBUTION PLAN
The Pillar Funds
WHEREAS, The Pillar Funds (the "Trust") is engaged in business as an
open-end investment company registered under the Investment Company Act of 1940,
as amended ("1940 Act"); and
WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that the following Distribution Plan will benefit the
Trust and the owners of units of beneficial interest ("Shareholders") in the
Trust;
NOW,THEREFORE, the Trustees of the Trust hereby adopt this Distribution
Plan pursuant to Rule 12b-1 under the 1940 Act.
Section 1. The Trust has adopted this Distribution Plan ("Plan") to enable
the Trust to directly or indirectly bear expenses relating to the distribution
of shares of certain portfolios (the "Portfolios") of the Trust (See Exhibit A
attached hereto).
Section 2. The Trust will pay the Distributor a fee, accrued daily and paid
monthly, of up to .30% of the Portfolios' average daily net assets (for actual
fee levels per Portfolio, see Exhibit A). The Distributor may apply this fee
toward: a) compensation for its services in connection with distribution
assistance with respect to shares of certain Portfolios of the Trust or for its
services in connection with the rendering of shareholder services to the holders
of shares of certain Portfolios of the Trust; or b) payments to financial
institutions and intermediaries (such as banks, savings and loan associations,
insurance companies, and investment counselors), broker-dealers, and the
Distributor's affiliates and subsidiaries as compensation for services or
reimbursement of expenses incurred in connection with distribution assistance or
provision of shareholder services to certain Portfolios of the Trust.
Section 3. This Plan shall not take effect until it has been approved
(a) by a vote of at least a majority of the outstanding voting securities of the
Trust; and (b) together with any related agreements, by votes of the majority of
both (i) the Trustees of the Trust and (ii) the Qualified Trustees, cast in
person at a Board of
<PAGE>
Trustees meeting called for the purpose of voting on this Plan or such
agreement.
Section 4. This Plan shall continue in effect for a period of more than one
year after it takes effect only for so long as such continuance is specifically
approved at least annually in the manner provided in Part (b) of Section 4
herein for the approval of this Plan.
Section 5. Any person authorized to direct the disposition of monies paid
or payable by the Trust pursuant to this Plan or any related agreement shall
provide to the Trustees of the Trust, at least quarterly, a written report of
the amounts so expended and the purposes for which such expenditures were made.
Section 6. This Plan may be terminated at any time by the vote of a
majority of the Qualified Trustees or by vote of a majority of the Trust's
outstanding voting securities.
Section 7. All agreements with any person relating to implementation of
this Plan shall be in writing, and any agreement related to this Plan shall
provide (a) that such agreement may be terminated at any time, without payment
of any penalty, by the vote of a majority of the Qualified Trustees or by the
vote of Shareholders holding a majority of the Trust's outstanding voting
securities, on not more than 60 days written notice to any other party to the
agreement; and (b) that such agreement shall terminate automatically in the
event of its assignment.
Section 8. This Plan may not be amended to increase materially the amount
of distribution expenses permitted pursuant to Section 2 hereof without the
approval of Shareholders holding a majority of the outstanding voting securities
of the Trust, and all material amendments to this Plan shall be approved in the
manner provided in Part (b) of Section 4 herein for the approval of this Plan.
Section 9. As used in this Plan, (a) the term "Qualified Trustees" shall
mean those Trustees of the Trust who are not interested persons of the Trust,
and have no direct or indirect financial interest in the operation of this Plan
or any agreements related to it, and (b) the terms "assignment" and "interested
person" shall have the respective meanings specified in the 1940 Act and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the Securities and Exchange Commission.
<PAGE>
Section 10. While this Plan is in effect, the selection and nomination of
those Trustees who are not interested persons of the Trust within the meaning of
Section 2(a) (19) of the 1940 Act shall be committed to the discretion of the
Trustees then in office who are not interested persons of the Trust.
Section 11. This Plan shall not obligate the Trust or any other party to
enter into an agreement with any particular person.
<PAGE>
EXHIBIT A
U.S. Treasury Securities Plus Money Market Portfolio........ .03%
The Pillar Funds
Rule 18f-3
Multiple Class Plan
October 25, 1995
Introduction
The Pillar Funds (the "Trust"), a registered investment company that
currently consists of fifteen (15) separately managed portfolios (the U.S.
Treasury Securities Money Market Fund, Prime Obligation Money Market Fund,
Tax-Exempt Money Market Fund, Short-Term Investment Fund, Fixed Income Fund, New
Jersey Municipal Securities Fund, Pennsylvania Municipal Securities Fund,
Intermediate-Term Government Securities Fund, GNMA Fund, Equity Value Fund,
Equity Income Fund, Mid Cap Value Fund, Balanced Growth Fund, International
Growth Fund, and U.S. Treasury Securities Plus Money Market Fund) and that may
consist of additional portfolios in the future as listed on Schedule A hereto
(each a "Fund" and, collectively, the "Funds"), have elected to rely on Rule
18f-3 under the Investment Company Act of 1940, as amended (the "1940 Act") in
offering multiple classes of units of beneficial interest ("shares") in each
Fund. The Plan sets forth the differences among classes, including shareholder
services, distribution arrangements, expense allocations, and conversion or
exchange options.
A. Attributes of Share Classes
The rights of each existing class of the Funds (i.e., Institutional and
Retail Classes) shall be as set forth in the resolutions and related materials
of the Trust's Board adopted pursuant to the order dated September 9, 1993,
obtained by SEI Liquid Asset Trust, et al. (Inv. Co. Act Release No. IC-19698),
and attached hereto as Exhibits A-C.
With respect to any class of shares of a Fund created after the date
hereof, each share of a Fund will represent an equal pro rata interest in the
Fund and will have identical terms and conditions, except that: (i) each new
class will have a different class name (or other designation) that identifies
the class as separate from any other class; (ii) each class will separately bear
any distribution expenses ("distribution fees") in connection with a plan
adopted pursuant to Rule 12b-1 under the 1940 Act (a "Rule 12b-1 Plan"), and
will separately bear any non-Rule 12b-1 Plan service payments ("service fees")
that are made under any servicing agreement entered into with respect to that
class; (iii) each class may bear, consistent with rulings and other published
statements of position by the Internal Revenue Service, the expenses of the
Fund's operations which are directly attributable to such class ("Class
Expenses"); and (iv) shareholders of the class will have exclusive voting rights
<PAGE>
regarding the Rule 12b-1 Plan and the servicing agreements relating to such
class, and will have separate voting rights on any matter submitted to
shareholders in which the interests of that class differ from the interests of
any other class.
B. Expense Allocations
Expenses of each existing class and of each class created after the date
hereof shall be allocated as follows: (i) distribution and shareholder servicing
payments associated with any Rule 12b-1 Plan or servicing agreement relating to
each class of shares are (or will be) borne exclusively by that class; (ii) any
incremental transfer agency fees relating to a particular class are (or will be)
borne exclusively by that class; and (iii) class Expenses relating to a
particular class are (or will be) borne exclusively by that class.
Until and unless changed by the Board, the methodology and procedures for
calculating the net asset value of the various classes of shares and the proper
allocation of income and expenses among the various classes of shares shall be
as set forth in the "Report" rendered by Arthur Andersen LLP.
C. Amendment of Plan; Periodic Review
This Plan must be amended to properly describe (through additional exhibits
hereto or otherwise) each new class of shares approved by the Board after the
date hereof.
The Board of the Trust, including a majority of the independent Trustees,
must periodically review this Plan for its continued appropriateness, and must
approve any material amendment of the Plan as it relates to any class of any
Fund covered by the Plan.
- 2 -
<PAGE>
DISTRIBUTION PLAN
The Pillar Funds
WHEREAS, The Pillar Funds (the "Trust") is engaged in business as an
open-end investment company registered under the Investment Company Act of 1940,
as amended ("1940 Act"); and
WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that the following Distribution Plan will benefit the
Trust and the owners of units of beneficial interest ("Shareholders") in the
Trust;
NOW, THEREFORE, the Trustees of the Trust hereby adopt this Distribution
Plan pursuant to Rule 12b-1 under the 1940 Act.
Section 1. The Trust has adopted this Distribution Plan ("Plan") to enable
the Trust to directly or indirectly bear expenses relating to the distribution
of shares of certain portfolios (the "Portfolios") of the Trust (See Exhibit A
attached hereto).
Section 2. The Trust will pay the Distributor a fee, accrued daily and paid
monthly, of up to .30% of the Portfolios' average daily net assets (for actual
fee levels per Portfolio, see Exhibit A). The Distributor may apply this fee
toward: a) compensation for its services in connection with distribution
assistance with respect to shares of certain Portfolios of the Trust or for its
services in connection with the rendering of shareholder services to the holders
of shares of certain Portfolios of the Trust; or b) payments to financial
institutions and intermediaries (such as banks, savings and loan associations,
insurance companies, and investment counselors), broker-dealers, and the
Distributor's affiliates and subsidiaries as compensation for services or
reimbursement of expenses incurred in connection with distribution assistance or
provision of shareholder services to certain Portfolios of the Trust.
Section 3. This Plan shall not take effect until it has been approved
(a) by a vote of at least a majority of the outstanding voting securities of the
Trust; and (b) together with any related agreements, by votes of the majority of
both (i) the Trustees of the Trust and (ii) the Qualified Trustees, cast in
person at a Board of
1
<PAGE>
Trustees meeting called for the purpose of voting on this Plan or such
agreement.
Section 4. This Plan shall continue in effect for a period of more than one
year after it takes effect only for so long as such continuance is specifically
approved at least annually in the manner provided in Part (b) of Section 4
herein for the approval of this Plan.
Section 5. Any person authorized to direct the disposition of monies paid
or payable by the Trust pursuant to this Plan or any related agreement shall
provide to the Trustees of the Trust, at least quarterly, a written report of
the amounts so expended and the purposes for which such expenditures were made.
Section 6. This Plan may be terminated at any time by the vote of a
majority of the Qualified Trustees or by vote of a majority of the Trust's
outstanding voting securities.
Section 7. All agreements with any person relating to implementation of
this Plan shall be in writing, and any agreement related to this Plan shall
provide (a) that such agreement may be terminated at any time, without payment
of any penalty, by the vote of a majority of the Qualified Trustees or by the
vote of Shareholders holding a majority of the Trust's outstanding voting
securities, on not more than 60 days written notice to any other party to the
agreement; and (b) that such agreement shall terminate automatically in the
event of its assignment.
Section 8. This Plan may not be amended to increase materially the amount
of distribution expenses permitted pursuant to Section 2 hereof without the
approval of Shareholders holding a majority of the outstanding voting securities
of the Trust, and all material amendments to this Plan shall be approved in the
manner provided in Part (b) of Section 4 herein for the approval of this Plan.
Section 9. As used in this Plan, (a) the term "Qualified Trustees" shall
mean those Trustees of the Trust who are not interested persons of the Trust,
and have no direct or indirect financial interest in the operation of this Plan
or any agreements related to it, and (b) the terms "assignment" and "interested
person" shall have the respective meanings specified in the 1940 Act and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the Securities and Exchange Commission.
2
<PAGE>
Section 10. While this Plan is in effect, the selection and nomination of
those Trustees who are not interested persons of the Trust within the meaning of
Section 2(a)(19) of the 1940 Act shall be committed to the discretion of the
Trustees then in office who are not interested persons of the Trust.
Section 11. This Plan shall not obligate the Trust or any other party to
enter into an agreement with any particular person.
3
<PAGE>
Exhibit A
U.S. Treasury Securities Plus Money Market Portfolio........... .03%
4
<PAGE>
DISTRIBUTION PLAN
Class B
The Pillar Funds
WHEREAS, The Pillar Funds (the "Trust") is engaged in business as an
open-end investment company registered under the Investment Company Act of 1940,
as amended ("1940 Act"); and
WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that the following Distribution Plan will benefit the
Trust and the owners of units of beneficial interest ("Shareholders") in the
Trust;
NOW, THEREFORE, the Trustees of the Trust hereby adopt this Distribution
Plan pursuant to Rule 12b -1 under the 1940 Act.
Section 1. The Trust has adopted this Class B Distribution Plan ("Plan") to
enable the Trust to directly or indirectly bear expenses relating to the
distribution of Class B shares of the portfolios (the "Portfolios") of the
Trust.
Section 2. The Trust will pay the Distributor a fee, accrued daily and paid
monthly, of up to .25% of the Class B Portfolios' average daily net assets. The
Distributor may apply this fee toward: a) compensation for its services in
connection with distribution assistance with respect to the Class B shares of
the Portfolios of the Trust or for its services in connection with the rendering
of shareholder services to the holders of Class B shares of the Portfolios of
the Trust; or b) payments to financial institutions and intermediaries (such as
banks, savings and loan associations, insurance companies, and investment
counselors), broker-dealers, and the Distributor's affiliates and subsidiaries
as compensation for services or reimbursement of expenses incurred in connection
with distribution assistance or provision of shareholder services to Class B
shares of the Portfolio of the Trust.
Section 3. This Plan shall not take effect until it has been approved
(a) by a vote of at least a majority of the outstanding voting securities of the
Trust; and (b) together with any related agreements, by votes of the majority of
both (i) the Trustees of the Trust and (ii) the Qualified Trustees, cast in
person at a Board of
1
<PAGE>
Trustees meeting called for the purpose of voting on this Plan or such
agreement.
Section 4. This Plan shall continue in effect for a period of more than one
year after it takes effect only for so long as such continuance is specifically
approved at least annually in the manner provided in Part (b) of Section 4
herein for the approval of this Plan.
Section 5. Any person authorized to direct the disposition of monies paid
or payable by the Trust pursuant to this Plan or any related agreement shall
provide to the Trustees of the Trust, at least quarterly, a written report of
the amounts so expended and the purposes for which such expenditures were made.
Section 6. This Plan may be terminated at any time by the vote of majority
of the Qualified Trustees or by vote of a majority of the Trust's outstanding
voting securities.
Section 7. All agreements with any person relating to implementation of
this Plan shall be in writing, and any agreement related to this Plan shall
provide (a) that such agreement may be terminated at any time, without payment
of any penalty, by the vote of a majority of the Qualified Trustees or by the
vote of Shareholders holding a majority of the Trust's outstanding voting
securities, on not more than 60 days written notice to any other party to the
agreement; and (b) that such agreement shall terminate automatically in the
event of its assignment.
Section 8. This Plan may not be amended to increase materially the amount
of distribution expenses permitted pursuant to Section 2 hereof without the
approval of Shareholders holding a majority of the outstanding voting
securities of the Trust, and all material amendments to this Plan shall be
approved in the manner provided in Part (b) of Section 4 herein for the approval
of this Plan.
Section 9. As used in this Plan, (a) the term "Qualified Trustees" shall
mean those Trustees of the Trust who are not interested persons of the Trust,
and have no direct or indirect financial interest in the operation of this Plan
or any agreements related to it, and (b) the terms "assignment" and "interested
person" shall have the respective meanings specified in the 1940 Act and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the Securities and Exchange Commission.
2
<PAGE>
Section 10. While this Plan is in effect, the selection and nomination of
those Trustees who are not interested persons of the Trust within the meaning of
Section 2(a)(19) of the 1940 Act shall be committed to the discretion of the
Trustees then in office who are not interested persons of the Trust.
Section 11. This Plan shall not obligate the Trust or any other party to
enter into an agreement with any particular person.
3
<PAGE>
Filed Pursuant to Rule 497(c)
(File Nos. 33-44712 & 811-6509)
The Pillar Funds
Investment Advisor:
United Jersey Bank Investment Management Division,
a division of United Jersey Bank
The Pillar Funds (the "Trust") consist of mutual fund portfolios seeking to
provide a convenient and economical means of investing in one or more
professionally managed portfolios of securities. This Prospectus relates to the
following funds (collectively, the "Funds"; individually, a "Fund"):
o U.S. Treasury Securities Money Market Fund
o Prime Obligation Money Market Fund
o Tax-Exempt Money Market Fund
Class A
The Trust's Class A Shares are offered without distribution fees (i) to
institutional investors (including United Jersey Bank, its affiliates and
correspondent banks) for the investment of their own funds, and to any
individual or institution (including United Jersey Bank, its affiliates and
correspondent banks) for the investment of funds held by such individual or
institution in a fiduciary, agency, custodial or other representative capacity
(but only if such individual or institution is able to provide complete
shareholder recordkeeping services with respect to shares purchased and held in
such capacity) (persons who own Class A shares of a Fund are referred to herein
as "Shareholders").
CLASS A SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR INSURED,
ENDORSED OR GUARANTEED BY, ANY BANK (INCLUDING UNITED JERSEY BANK OR ITS
AFFILIATES OR CORRESPONDENTS), ANY STATE OR STATE AGENCY, THE FEDERAL DEPOSIT
INSURANCE CORPORATION (FDIC), THE U.S. GOVERNMENT OR ANY U.S. GOVERNMENT AGENCY.
An investment in a Fund is subject to investment risks, including possible
loss of the principal amount invested.
An investment in any of the Funds is neither insured nor guaranteed by the
U.S. Government and there can be no assurance that a Fund will be able to
maintain a stable net asset value of $1.00 per share.
This Prospectus sets forth concisely the information about the Trust that a
prospective investor should know before investing. Investors are advised to read
this Prospectus and retain it for future reference. A Statement of Additional
Information dated April 29, 1995 has been filed with the Securities and Exchange
Commission and is available without charge through the Distributor, SEI
Financial Services Company, 680 East Swedesford Road, Wayne, PA 19087-1658 or by
calling 1-800-932-7782. The Statement of Additional Information is incorporated
into this Prospectus by reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION 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 PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
April 30, 1995
CLASS A
<PAGE>
The Pillar Funds
EXPENSE SUMMARY
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
CLASS A
<TABLE>
<CAPTION>
U.S. Treasury Prime
Securities Obligation Tax-Exempt
Money Market Money Market Money Market
Fund Fund Fund
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Advisory Fees (after fee waivers)(1)............. .35% .35% .32%
Other Expenses................................... .27% .27% .33%
- ----------------------------------------------------------------------------------------------
Total Operating Expenses (after fee waivers)(2).. .62% .62% .65%
==============================================================================================
</TABLE>
(1) The Advisor has agreed to voluntarily waive a portion of its fees in an
amount that operates to limit total operating expenses of Class A of each
Fund to not more than .65% of average daily net assets. The Advisor
reserves right to terminate its fee waiver at any time in its sole
discretion.
(2) Absent a fee waiver for the Tax-Exempt Money Market Fund, the Advisory Fee
would be .35% and Total Operating Expenses would be .68% of such Fund's
average daily net assets. Additional information may be found under
"The Advisor," "The Administrator" and "The Distributor."
Example
1 yr. 3 yrs. 5 yrs. 10 yrs.
- --------------------------------------------------------------------------------
An investor in a Fund would pay the following expenses on a $1,000
investment assuming (1) 5% annual return and (2) redemption at
the end of each time period:
U.S. Treasury Securities Money Market Fund... $6 $20 $35 $77
Prime Obligation Money Market Fund .......... $6 $20 $35 $77
Tax-Exempt Money Market Fund................. $7 $21 $36 $81
================================================================================
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 the Funds. The information set forth in the foregoing
table and example relates only to Class A Shares. The Trust also offers Class B
shares of each Fund which are subject to the same expenses except that Class B
shares bear certain distribution costs. Financial institutions that are the
record owner of shares for the account of their customers may impose separate
fees for account services to their customers. Additional information may be
found under "The Advisor," "The Administrator" and "The Distributor."
<PAGE>
THE TRUST
The Pillar Funds (the "Trust") consist of open-end management investment
companies that have diversified and non-diversified portfolios. The Trust offers
units of beneficial interest ("shares") in fifteen separate investment
portfolios. Shareholders may purchase shares in each portfolio (except for the
U.S Treasury Securities Plus Money Market Fund) through two separate classes
(Class A and Class B) which provide for variations in distribution costs, voting
rights, and dividends. Except for these differences between classes, each share
of each portfolio represents an undivided, proportionate interest in that
portfolio. This Prospectus relates to the Class A shares of the Trust's U.S.
Treasury Securities Money Market, Prime Obligation Money Market and Tax-Exempt
Money Market Funds (each of these, a "Fund"). Each Fund is a diversified mutual
fund. Information regarding the Trust's other portfolios and the Class B shares
of the Funds is contained in separate prospectuses that may be obtained from the
Trust's Distributor, SEI Financial Services Company, 680 East Swedesford Road,
Wayne, Pennsylvania 19087 or by calling 1800-932-7782.
Shares of the Trust are not deposits, obligations or accounts (trust or
otherwise) of, or insured, guaranteed, sponsored or endorsed by, any bank
(including United Jersey Bank or its affiliates or correspondents), any state or
state agency, the Federal Deposit insurance Corporation (FDIC), the U.S.
Government or any U.S. Government agency.
Shares of the Trust are subject to investment risks, Including possible
loss of the principal amount invested.
INVESTMENT OBJECTIVES AND POLICIES
The investment objective of each Fund is to preserve principal value and
maintain a high degree of liquidity while providing current income. In addition,
the Tax-Exempt Money Market Fund seeks to provide current income that is exempt
from federal income tax. There is no assurance that the investment objective of
any Fund will be met.
Each Fund intends to comply with regulations of the Securities and]
Exchange Commission ("SEC") applicable to money market funds using the
amortized cost method for calculating net asset value. These regulations impose
certain quality, maturity and diversification restraints on investments by a
Fund. Under these regulations, each Fund will invest only in U.S. dollar
denominated securities, will maintain an average maturity on a dollar-weighted
basis of 90 days or less, and will acquire only "eligible securities" that
present minimal credit risks and have a maturity of 397 days or less. For a
further discussion of these rules, see "Description of Permitted Investments."
The U.S. Treasury Securities Money Market Fund
The U.S Treasury Securities Money Market Fund (the "Treasury Fund"' will
invest exclusively in bills, notes and coeds 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 ("U.S. Treasury
Obligations"). The Fund may also engage in securities lending. For a description
of U.S. Treasury Obligations, see "Description of Permitted Investments"
The Prime Obligation Money Market Fund
The Prime Obligation Money Market Fund (the "Prime Fund") will invest in
eligible securities consisting of: (i) commercial paper and short-term corporate
obligations of U.S issuers that satisfy the Fund's quality criteria;
(ii) obligations (certificates of deposit, time deposits and bankers'
acceptances) of U.S. commercial banks. U.S. savings and loan institutions and
U.S. and London branches of foreign banks, provided such institutions have total
assets of $500 million or more as shown on their last published financial
statements at the time of investment and are insured by the Federal Deposit
Insurance Corporation or the Federal Savings and Loan Insurance Corporation (the
Fund may not invest more than 25% of its total assets in obligations issued by
foreign branches of U.S. banks
<PAGE>
THE SHAREHOLDER SERVICING AGENT
SEI Financial Management Corporation acts as the dividend disbursing agent
and shareholder servicing agent for the Trust. SEI Financial Management
Corporation also acts as the transfer agent for the Trust.
THE DISTRIBUTOR
SEI Financial Services Company (the "Distributor"), a wholly-owned
subsidiary of SEI, acts as the Distributor for the Trust. No compensation is
paid to the Distributor for distribution services for the Class A shares of any
Fund. Class B shares of each Fund bear the costs of their distribution expenses
and related service fees at the annual rate of up to .25% of the average daily
net assets of the Fund. Class A shares of each Fund are offered without
distribution fees (i) to institutional investors (including United Jersey Bank,
its affiliates and correspondent banks) for the investment of their own funds,
and (ii) to individuals and institutions (including United Jersey Bank, its
affiliates and correspondent banks) but (A) only for the investment of funds
held by such individuals or institutions in a fiduciary, agency, custodial or
other representative capacity, and (B) only if such individuals or institutions
are able to provide complete shareholder recordkeeping services with respect to
shares purchased and held in such capacity.
Class B shares of each Fund are offered to all persons. Consequently, it is
possible that individuals and institutions may offer different classes of shares
to their customers and thus receive different compensation with respect to
different classes of shares. In addition, individuals and institutions that are
the record owners of shares for the account of their customers may impose
separate fees for account services to their customers. The Funds may also
execute brokerage or other agency transactions through an affiliate of the
Advisor or through the Distributor for which such affiliate or the Distributor
receives compensation.
PURCHASE AND REDEMPTION OF SHARES
Purchases and redemptions of shares of the Funds may be made on any
Business Day. State securities laws may require banks and financial institutions
purchasing shares for their customers to register as dealers pursuant to state
laws.
A purchase order will be effective as of the Business Day received by the
Distributor if the Distributor receives an order and the Custodian receives
federal funds before 12:00 noon, Eastern time, on such Business Day. Otherwise,
the purchase order will be effective the next Business Day. Financial
institutions may impose an earlier cut-off time for receipt of purchase orders
directed through them to allow time for processing and transmittal of these
orders to the Distributor for effectiveness the same day.
The purchase price is the net asset value per share next computed after the
order is effective. The net asset value per share of each Fund is determined by
dividing the total value of its investments and other assets, less any
liabilities, by its total outstanding shares. The net asset value per share is
calculated as of 12:00 noon, Eastern time, each Business Day based on the
amortized cost method as described in the Statement of Additional Information.
Purchase a shares are first entitled to dividends the day the purchase order is
effective.
The Trust reserves the right to reject a purchase order when the Distributor
determines that it is not in the best interest of the Trust or its Shareholders
to accept such order.
For redemption orders received before 12:00 noon, Eastern time, payment
will be made the same day by transfer of Federal funds. Otherwise, payment will
be made on the next Business Day. The redemption price is the net asset value
per share of the Fund next determined after receipt by the Distributor of the
redemption order. Redeemed shares are not entitled to dividends declared the day
the redemption order is effective.
The purchase price and the redemption price is expected to remain constant
at $1.00 per share.
The Funds intend to pay cash for all shares redeemed, but under abnormal
conditions which??????????????????
<PAGE>
The Pillar Funds
Filed Pursuant to Rule 497(c)
(File Nos. 33 44712 & 811-6509)
Investment Advisor:
United Jersey Bank Investment Management Division,
a division of United Jersey Bank
The Pillar Funds (the "Trust") consist of mutual fund portfolios company
seeking to provide a convenient and economical means of investing in one or more
professionally managed portfolios of securities. This Prospectus relates to the
following funds (collectively, "Funds"; individually, a "Fund").
o U.S. Treasury Securities Money Market Fund
o Prime Obligation Money Market Fund
o Tax-Exempt Money Market Fund
Class B
The Trust's Class B Shares are offered to all persons (persons who own
Class B shares of a Fund are referred to herein as "Shareholders").
CLASS B SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR INSURED,
ENDORSED OR GUARANTEED BY, ANY BANK (INCLUDING UNITED JERSEY BANK OR ITS
AFFILIATES OR CORRESPONDENTS), ANY STATE OR STATE AGENCY, THE FEDERAL DEPOSIT
INSURANCE CORPORATION (FDIC), THE U.S. GOVERNMENT OR ANY U.S. GOVERNMENT AGENCY.
An Investment in a Fund is subject to investment risks, including possible
loss of the principal amount invested.
An investment in any of the Funds is neither insured nor guaranteed by the
U.S. Government and there can be no assurance that a Fund will be able to
maintain a stable net asset value of $1.00 per share.
This Prospectus sets forth concisely the information about the Trust that a
prospective investor should know before investing. Investors are advised to read
this Prospectus and retain it for future reference. A Statement of Additional
Information dated April 29, 1995 has been filed with the Securities and Exchange
Commission and is available without charge through the Distributor, SEI
Financial Services Company, 680 East Swedesford Road, Wayne, PA 19087-1658 or by
calling 1-800-932-7782. The Statement of Additional Information is incorporated
into this Prospectus by reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION 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 PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
April 30, 1995
CLASS B
<PAGE>
EXPENSE SUMMARY
ANNUAL OPERATING EXPENSES
(As a Percentage of average net assets)
CLASS B
U.S. Treasury Prime
Securities Obligation Tax-Exempt
Money Money Money
Market Market Market
Fund Fund Fund
- --------------------------------------------------------------------------------
Advisory Fees (after fee waivers)(1)...... .35% .35% .32%
12b-1 Fees................................ .25% .25% .25%
Other Expenses............................ .27% .27% .33%
- --------------------------------------------------------------------------------
Total Operating Expenses
(after fee waivers)(2)................. .87% .87% .90%
================================================================================
(1) The Advisor has agreed to voluntarily waive a portion of its fees in an
amount that operates to limit total operating expenses of Class B of each
Fund to not more than .90% of average daily net assets. The Advisor
reserves the right to terminate its fee waiver at any time in its sole
discretion.
(2) Absent the fee waiver for the Tax-Exempt Money Market Fund the Advisory Fee
would be .35% and Total Operating Expenses would be .93% of such Fund's
average daily net assets. Additional information may be found under "The
Advisor," "The Administrator" and "The Distributor."
Example
- --------------------------------------------------------------------------------
1 yr. 3 yrs. 5 yrs. 10 yrs.
- --------------------------------------------------------------------------------
An investor in a Fund would pay the following expenses on a $1,000
investment assuming (1) 5% annual return and (2) redemption at the end
of each time period:
U.S. Treasury Securities Money Market Fund... $9 $28 $48 $107
Prime Obligations Money Market Fund.......... $9 $28 $48 $107
Tax-Exempt Money Market Fund ................ $9 $29 $50 $111
================================================================================
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 the Funds. The information set forth in the foregoing
table and example relates only to Class B Shares. The Trust also offers Class A
Shares of each Fund which are subject to the same expenses except that there are
no distribution fees. Financial institutions that are the record owner of shares
for the account of their customers may impose separate fees for account services
to their customers. In addition, a wire redemption charge of $10.00 is imposed
for each redemption by wire. Additional information may be found under "The
Advisor," "The Administrator" and "The Distributor."
Long-term shareholders may pay more than the equivalent of the maximum
front-end sales charges otherwise permitted by the Rules (the "Rules") of the
National Association of Securities Dealers, Inc. ("NASD"). The Trust intends to
operate the Class B distribution plan in accordance with its terms and with the
NASD Rules concerning sales charges.
<PAGE>
THE TRUST
The Pillar Funds (the "Trust") consist of open-end management investment
companies that have diversified and non-diversified portfolios. The Trust offers
units of beneficial interest ("shares") in fifteen separate investment
portfolios. Shareholders may purchase shares in each portfolio (except for the
U.S. Treasury Securities Plus Money Market Fund) through two separate classes
(Class A and Class B) which provide for variations in distribution costs, voting
rights, and dividends. Except for these differences between classes, each share
of each portfolio represents an undivided, proportionate interest in that
portfolio. This Prospectus relates to the Class B shares of the Trust's U.S.
Treasury Securities Money Market, Prime Obligation Money Market and Tax-Exempt
Money Market Funds (each of these, a "Fund"). Each Fund is a diversified mutual
fund. Information regarding the Trust's other portfolios and the Class A shares
of the Funds is contained in separate prospectuses that may be obtained from the
Trust's Distributor, SEI Financial Services Company, 680 East Swedesford Road,
Wayne, Pennsylvania 19087 or by calling 1-800-932-7782.
Shares of the Trust are not deposits, obligations or accounts (trust or
otherwise) of, or insured, guaranteed, sponsored or endorsed by, any bank
(including United Jersey Bank or its affiliates or correspondents), any state or
state agency, the Federal Deposit Insurance Corporation (FDIC), the U.S.
Government or any U.S. Government agency.
Shares of the Trust are subject to investment risks, Including possible
loss of the principal amount invested.
INVESTMENT OBJECTIVES AND POLICIES
The investment objective of each Fund is to preserve principal value and
maintain a high degree of liquidity while providing current income. In addition,
the Tax-Exempt Money Market Fund seeks to provide current income that is exempt
from federal income tax. There is no assurance that the investment objective of
any Fund will be met.
Each Fund intends to comply with regulations of the Securities and Exchange
Commission ("SEC") applicable to money market funds using the amortized cost
method for calculating net asset value. These regulations impose certain
quality, maturity and diversification restraints on investments by a Fund.
Under these regulations, each Fund will invest only in U.S. dollar denominated
securities, will maintain an average maturity on a dollar-weighted basis of 90
days or less, and will acquire only "eligible securities" that present minimal
credit risks and have a maturity of 397 days or less. For a further discussion
of these rules, see "Description of Permitted Investments."
The U.S. Treasury Securities Money Market Fund
The U.S. Treasury Securities Money Market Fund (the "Treasury Fund") will
invest exclusively in 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 ("U.S. Treasury
Obligations"). The Fund may also engage in securities lending. For a description
of U.S Treasury Obligations, see "Description of Permitted Investments."
The Prime Obligation Fund
The Prime Obligation Money Market Fund (the "Prime Fund") will invest in
eligible securities consisting of: (i) commercial paper and short-term corporate
obligations of U.S. issuers that satisfy the Fund's quality criteria:
(ii) obligations (certificates of deposit, time deposits and bankers'
acceptances) of U.S. commercial banks, U.S. savings and loan institutions and
U.S. and London branches of foreign banks, provided such institutions have total
assets of $500 million or more as shown on their last published financial
statements at the time of investment and are insured by the Federal Deposit
Insurance Corporation or the Federal Savings and Loan Insurance Corporation (the
Fund may not ???????
<PAGE>
THE DISTRIBUTOR
SEI Financial Services Company (the "Distributor"), a wholly-owned
subsidiary of SEI, acts as the Distributor of the Trust.
The Class B shares of each Fund are subject to a distribution plan dated
February 28, 1992. ("Class B Plan") As provided in the Distribution Agreement
and the Class B Plan, the Trust will pay the Distributor a fee of .25% of the
average daily net assets of each Fund's Class B shares. The Distributor may
apply this fee toward: a) compensation for its services in connection with
distribution assistance or provision of shareholder services; or b) payments to
financial institutions and intermediaries such as banks (including United Jersey
Bank), savings and loan associations, insurance companies, and investment
counselors, broker-dealers, and the Distributor's affiliates and subsidiaries as
compensation for services or reimbursement of expenses incurred in connection
with distribution assistance or provision of shareholder services. The Class B
Plan is characterized as a compensation plan since the distribution fee will be
paid to the Distributor without regard to the distribution or shareholder
service expenses incurred by the Distributor or the amount of payments made to
financial institutions and intermediaries. The Funds may also execute brokerage
or other agency transactions through an affiliate of the Advisor or through the
Distributor for which such affiliate or the Distributor receives compensation.
Class A shares of each Fund are offered without distribution fees (i) to
institutional investors (including United Jersey Bank, its affiliates and
correspondent banks) for the investment of their own funds, and (ii) to
individuals and institutions (including United Jersey Bank, it affiliates and
correspondent banks) but (A) only for the investment of funds held by such
individuals or institutions in a fiduciary, agency, custodian or other
representative capacity. and (B) only if such individuals or institutions are
able to provide complete shareholder recordkeeping services with respect to
shares purchased and held in such capacity.
Class B shares of each Fund are offered to all persons. Consequently, it is
possible that individuals and institutions may offer different classes of shares
to their customers and thus receive different compensation with respect to
different classes of shares. In addition, individuals and institutions that are
the record owner of shares for the account of their customers may impose
separate fees for account services to their customers.
PURCHASE OF SHARES
Shares of the Funds may be purchased through a financial institution, such
as United Jersey Bank, or a broker-dealer that has entered into a dealer
agreement with SEI Financial Services Company. Shares may also be purchased
directly through the Distributor by mail, by telephone. or by wire.
Shares of each Fund are sold on a continuous basis and may be purchased on
any Business Day. The minimum initial investment in the Trust is $1,000;
however, the minimum investment may be waived at the distributor's discretion.
All subsequent purchases must be at least $50.
A purchase order will be effective as of the Business Day received by the
Distributor if the Distributor receives the order, and the Custodian receives
Federal funds, before 12:00 noon, Eastern time, on such Business Day. Otherwise,
the purchase order will be effective the next Business Day.
Purchases Through Intermediaries
Customers should contact their Intermediary for information about the
institution's procedures for purchasing shares of the Funds and any charges for
services provided by the institution. Intermediaries may impose an earlier
cut-off time for receipt of purchase orders directed through them to allow for
processing and transmittal of these orders to the Distributor for effectiveness
the same day. In addition, state securities laws may required banks and
financial institutions purchasing shares for their customers to register as
dealers pursuant to state laws.
<PAGE>
The Pillar Funds
Investment Advisor:
United Jersey Bank Investment Management Division,
a Division of United Jersey Bank
The Pillar Funds (the "Trust") consist of mutual fund portfolios seeking to
provide a convenient and economical means of investing in one or more
professionally managed portfolios of securities. This Prospectus relates to
the following fixed income funds (collectively. the "Funds": individually, a
"Fund":
o Short-Term Investment Fund
o Fixed Income Fund
o New Jersey Municipal Securities Fund
o Pennsylvania Municipal Securities Fund
o Intermediate-Term Government Securities Fund
o GNMA Fund
Class A
The Trust's Class A Shares are offered without distribution fees (i) to
institutional investors (including United Jersey Bank, its affiliates and
correspondent banks) for the investment of their own funds, and (ii) to any
individual or institution (including United Jersey Bank, its affiliates and
correspondent banks) for the investment of funds held by such individual or
institution in a fiduciary, agency, custodial or other representative capacity
(but only if such individual or institution is able to provide complete
shareholder record keeping services with respect to shares purchased and held in
such capacity) (persons who own Class A Shares of a Fund are referred to herein
as "Shareholders").
CLASS A SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR INSURED,
ENDORSED OR GUARANTEED BY, ANY BANK (INCLUDING UNITED JERSEY BANK OR ITS
AFFILIATES OR CORRESPONDENTS), ANY STATE OR STATE AGENCY, THE FEDERAL DEPOSIT
INSURANCE CORPORATION (FDIC), THE U.S. GOVERNMENT OR ANY U.S. GOVERNMENT AGENCY.
Amounts invested in the Funds are subject to investment risks, including
possible loss of the principal amount invested.
This Prospectus sets forth concisely the information about the Trust that a
prospective investor should know before investing. Investors are advised to read
this Prospectus and retain it for future reference. A Statement of Additional
Information dated April 29, 1995, has been filed with the Securities and
Exchange Commission and is available without charge through the Distributor, SEI
Financial Services Company, 680 East Swedesford Road, Wayne, PA 19087-1658 or by
calling 1-800-932-7782. The Statement of Additional Information is incorporated
into this Prospectus by reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION 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 PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
April 30, 1995
CLASS A
<PAGE>
EXPENSE SUMMARY
ANNUAL OPERATING EXPENSES
(As a Percentage of average net assets)
CLASS A
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
New Jersey Pennsylvania Intermediate-Term
Short-Term Fixed Municipal Municipal Government
Investment Income Securities Securities Securities GNMA
Fund Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
Advisory Fees (after fee
waivers)(1)............... .46% .50% .15% .00% .45% .43%
Other Expenses ............. .34% .30% .32% .80% .35% .37%
- ---------------------------------------------------------------------------------------------------
Total Operating Expenses
(after fee waivers)(2)..... .80% .80% .47% .80% .80% .80%
===================================================================================================
</TABLE>
(1) The Advisor and Administrator have agreed to voluntarily waive a portion of
their fees in an amount that operates to limit total operating expenses of
Class A of each Fund to not more than .80% of average daily net assets. The
Advisor and the Administrator each reserves the right to terminate its fee
waiver at any time in its sole discretion.
(2) Absent fee waivers, Advisory Fees would be .60%, Administration Fees for
each Fund would be .20% and Total Operating Expenses would be as follows:
Short-Term Investment Fund .94%, Fixed Income Fund .90%, New Jersey
Municipal Securities Fund .97%, Pennsylvania Municipal Securities Fund
1.60%, Intermediate-Term Government Securities Fund .95% and GNMA Fund
.97%. Additional Information may be found under "The Advisor," "The
Administrator" and "The Distributor."
Example
- -------------------------------------------------------------------------------
1 yr. .3 yrs. .5 yrs. .10 yrs.
- -------------------------------------------------------------------------------
An investor would pay the following expenses
on a $1,000 investment in a Fund assuming
(1) 5% annual return and (2) redemption at
the end of each time period:
New Jersey Municipal Securities Fund.... $5 $15 $26 $59
Other Funds............................. $8 $26 $44 $99
================================================================================
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 the Funds. The information set forth in the foregoing
table and example relates only to Class A shares. The Trust also offers Class B
shares of each Fund which are subject to the same expenses except for a sales
load and certain distribution costs. Financial institutions that are the record
owner of shares for the account of their customers may impose separate fees for
account services to their customers. Additional information may be found under
"The Advisor," "The Administrator" and "The Distributor."
<PAGE>
THE TRUST
The Pillar Funds (the "Trust") consist of open-end management investment
companies that have diversified and non-diversified portfolios. The Trust offers
units of beneficial interest ("shares") in one of fifteen separate investment
portfolios. Shareholders may purchase shares in each portfolio (except for the
U.S. Treasury Securities Plus Money Market Fund) through two separate classes
(Class A and Class B) which provide for variations in distribution costs, voting
rights and dividends. Except for these differences between classes, each share
of each portfolio represents an undivided, proportionate interest in that
portfolio. This Prospectus relates to the Class A shares of the Trust's
Short-Term Investment, Fixed Income, New Jersey Municipal Securities,
Pennsylvania Municipal Securities, Intermediate-Term Government Securities and
GNMA Funds (each of these, a "Fund"). Each of the Funds is a diversified mutual
fund except for the New Jersey and Pennsylvania Municipal Securities Funds,
which are non-diversified mutual funds. Information regarding the Trust's other
portfolios and the Class B shares of the Funds is contained in separate
prospectuses that may be obtained from the Trust's Distributor, SEI Financial
Services Company, 680 East Swedesford Road, Wayne, Pennsylvania 19087 or by
calling 1-800-932-7782.
Shares of the Trust are not deposits, obligations or accounts (trust or
otherwise) of, or insured, guaranteed, sponsored or endorsed by, any bank
(Including United Jersey Bank or Its affiliates or correspondents), any state or
state agency, the Federal Deposit Insurance Corporation (FDIC), the U.S.
Government or any U.S. Government agency.
Shares of the Trust are subject to investment risks, including possible
loss of the principal amount invested. See "INVESTMENT OBJECTIVES AND
POLICIES--Risk Factors; Additional Risk Factors For New Jersey Municipal
Securities; Additional Risk Factors For Pennsylvania Municipal Securities."
INVESTMENT OBJECTIVES AND POLICIES
The Short-Term Investment Fund
The investment objective of this Fund is to provide a high level of total
return, primarily through income, consistent with preservation of capital. There
is no assurance that the investment objective will be met. The Fund may not
invest in certain securities that may earn a higher return but which are more
volatile and riskier than the Fund's permitted investments.
At least 65% of the Fund's assets will be invested in (i) 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 ("U.S Treasury obligations") (ii) obligations issued or
guaranteed as to principal and interest by agencies and instrumentalities of the
U.S. Government; (iii) corporate debt obligations rated in one of the three
highest rating categories by a nationally recognized statistical ratings
organization ("NRSRO") or determined by the Adviser to be of comparable quality
at the time of investment; (iv) commercial paper rated in the highest short-term
rating category by an NRSRO or determined by the Adviser to be of comparable
quality at the time of investment; (v) short-term bank obligations (certificates
of deposit, time deposits and bankers' acceptances) of U.S. commercial banks
with assets of at least $1 billion as of the end of their most recent fiscal
year; (vi) securities of the government of Canada and its provincial and local
governments: (vii) custodial receipts evidencing separately traced interest and
principal component parts of U.S. Treasury obligations; and (viii) repurchase
agreements involving such securities. Of this amount, the Fund may, for
temporary defensive purposes, invest up to 35% of its assets in commercial paper
rated in one of the two highest short-term rating categories or determined by
the Adviser to be of comparable quality at the time of investment. Securities
rated A are considered to be investment grade and of high credit quality. Issues
rated A could be more vulnerable to adverse developments than obligations with
higher ratings. In addition, the Fund may invest in corporate bonds
<PAGE>
Market Fund. Mrs. Tendall joined United Jersey Bank in 1982 and is currently
responsible for managing both equity and fixed income portfolios.
The Advisor is entitled to a fee, which is calculated daily and paid
monthly, at an annual rate of .60% of the average daily net assets of each Fund.
The Advisor has voluntarily agreed to waive all or a portion of its fees in
order to limit the operating expenses of Class A of each Fund to .80%. For the
fiscal year ended December 31, 1994, each Fund paid the Adviser the following
advisory fee (shown as a percentage of its average daily net assets): Short-Term
Investment Fund, .46%: Fixed Income Fund, .50%; New Jersey Municipal Securities
Fund, .15%; Pennsylvania Municipal Securities Fund, .00%; Intermediate-Term
Government Securities Fund, .45%; and GNMA Fund, .43%. The Advisor reserves the
right to terminate its fee waiver at any time in its sole discretion.
United Jersey Bank has also entered into a Custodian Agreement with the
Trust, under which it will provide all securities safekeeping services as
required by the Funds and the Investment Company Act of 1940, as amended. The
Trust pays United Jersey Bank (referred to herein in its custodial capacity as
the "Custodian") a custodian fee, which is calculated daily and paid monthly,
at an annual rate of .025% of the average daily net assets of each Fund.
The Glass-Steagall Act restricts the securities activities of banks such as
United Jersey Bank, but federal regulatory authorities permit such banks to
provide investment advisory and other services to mutual funds. Should this
position be challenged successfully in court or reversed by legislation, the
Trust might have to make other investment advisory arrangements.
THE ADMINISTRATOR
SEI Financial Management Corporation (the "Administrator"), a wholly-owned
subsidiary of SEI Corporation ("SEI"), serves as the Administrator of the Trust.
The Administrator provides the Trust with administrative services, other than
investment advisory services, including regulatory reporting, all necessary
office space, equipment, personnel and facilities.
The Administrator is entitled to a fee, which is calculated daily and paid
monthly, at an annual rate of .20% of the average daily net assets of each Fund.
The Administrator has agreed to waive all or a portion of its fees in order to
limit the total operating expenses of Class A of the New Jersey Municipal
Securities Fund and the Pennsylvania Municipal Securities Fund to .80%. The
Administrator reserves the right to terminate its fee waiver at any time in its
sole discretion.
THE SHAREHOLDER SERVICING AGENT
SEI Financial Management Corporation acts as the dividend dispursing agent
and shareholder servicing agent for the Trust. SEI Financial Management
Corporation also acts as the transfer agent for the Trust.
THE DISTRIBUTOR
SEI Financial Services Company (the 'Distributor"), a wholly-owned
subsidiary of SEI, acts as the Distributor for the Trust. No compensation is
paid to the Distributor for distribution services for the Class A shares of any
Fund. Class B shares of each Fund bear the costs of their distribution expenses
and related service fees at the annual rate of up to .25% of the average daily
net assets of the Fund. In addition, a maximum sales charge of 4% is imposed on
the sale of Class B shares of the Fixed Income and Intermediate-Term Government
Securities Funds, 3% on the sale of Class B shares of the GNMA Fund, and 1% on
Class B shares of the Short-Term Investment, New Jersey Municipal Securities and
Pennsylvania Municipal Securities Funds. Class A shares of each Fund are offered
without distribution fees (i) to institutional investors (including United
Jersey Bank, its affiliates and
<PAGE>
correspondent banks) for the investment of their own funds, and (ii) to
individuals and institutions (including United Jersey Bank, its affiliates and
correspondent banks) but (A) only for the investment of funds held by such
individuals or institutions in a fiduciary, agency, custodial or other
representative capacity, and (B) only if such individuals or institutions are
able to provide complete shareholder recordkeeping services with respect to
shares purchased and held in such capacity.
Class B shares of each Fund are offered to all persons. Consequently, it is
possible that individuals or institutions may offer different classes of shares
to their customers and thus receive different compensation with respect to
different classes of shares. In addition, individuals or institutions that are
the record owner of shares for the account of their customers may impose
separate fees for account services to their customers. The Funds may also
execute brokerage or other agency transactions through an affiliate of the
Advisor or through the Distributor for which the affiliate or the Distributor
receives compensation.
PURCHASE AND REDEMPTION OF SHARES
Purchases and redemptions of shares of each Fund may be made on any
Business Day. State securities laws may require banks and financial institutions
purchasing shares for their customers to register as dealers pursuant to state
laws.
A purchase order will be effective as of the Business Day received by the
Distributor if the Distributor receives the order before 4:00 p.m., Eastern
time, provided the Custodian receives Federal funds before 12:00 noon, Eastern
time, on the next Business Day. However, an order may be cancelled if the
Custodian does not receive Federal Funds before 12:00 noon, Eastern time, on the
next Business Day, and the investor could be liable for any fees or expenses
incurred by the Trust. Financial institutions may impose an earlier cut-off time
for receipt of purchase orders directed through them to allow time for
processing and transmittal of these orders to the Distributor for effectiveness
the same day. The purchase price of shares of each Fund is the net asset value
next determined after a purchase order is effective. The net asset value per
share of each Fund is determined by dividing the total market value of the
Fund's investments and other assets less any liabilities, by the total
outstanding shares of the Fund. A Fund may use a pricing service to provide
market quotations. A pricing service may use a matrix system of valuation to
value fixed income securities which considers factors such securities prices,
yield features, ratings and developments related to a specific security. Net
asset value per share is determined as of 4:00 p.m. Eastern time, on each
Business Day. Purchases will be made in full and fractional shares of the Trust
calculated to three decimal places.
The Trust reserves the right to reject a purchase order when the
Distributor determines that it is not in the best interest of the Trust or its
Shareholders to accept such order.
Shareholders who desire to redeem shares of the Fund must place their
redemption orders prior to 4:00 p.m. Eastern time, on any Business Day, for the
order to be effective on that Business Day. The redemption price of shares is
the net asset value of the Fund next determined after the redemption order is
effective. Payment on redemption will be made as promptly as possible and, in
any event, within seven Business Days after the redemption order is effective.
The Funds intend to pay cash for all shares redeemed, but under abnormal
conditions which make payment in cash unwise, payment may be made wholly or
partly in portfolio securities with a market value equal to the redemption
price. In such cases, an investor may incur brokerage costs in converting such
securities to cash.
PERFORMANCE
From time to time. the Funds may advertise yield and total return. These
figures will be based on historical earnings and are not intended to indicate
future performance. The yield of a Fund refers to the annualized income
generated by an investment in the Fund over a specified 30 day period. The yield
is calculated by assuming that the income generated
<PAGE>
Filed Pursuant to Rule 497(c)
(File Nos. 33-44712 & 811-6509)
The Pillar Funds
Investment Advisor:
United Jersey Bank Investment Management Division,
a division of United Jersey Bank
The Pillar Funds (the "Trust") consist of mutual fund portfolios seeking to
provide a convenient and economical means of investing in one or more
professionally managed portfolios of securities. This Prospectus relates to the
following fixed income funds (collectively. the "Funds": individually, a
"Fund"):
o Short-Term Investment Fund
o Fixed Income Fund
o New Jersey Municipal Securities Fund
o Pennsylvania Municipal Securities Fund
o Intermediate-Term Government Securities Fund
o GNMA Fund
Class B
The Trust's Class B Shares are offered to all persons (persons who own
Class B shares of a fund are referred to herein as "Shareholders").
CLASS B SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR INSURED,
ENDORSED OR GUARANTEED BY, ANY BANK (INCLUDING UNITED JERSEY BANK OR ITS
AFFILIATES OR CORRESPONDENTS), ANY STATE OR STATE AGENCY, THE FEDERAL DEPOSIT
INSURANCE CORPORATION (FDIC), THE U.S. GOVERNMENT OR ANY U.S. GOVERNMENT AGENCY.
Amounts invested in the Funds are subject to investment risks, including
possible loss of the principal amount invested.
Sales charges are imposed by all Funds at the time of purchase.
This Prospectus sets forth concisely the information about the Trust that a
prospective investor should know before investing. Investors are advised to read
this Prospectus and retain it for future reference. A Statement of Additional
Information dated April 29, 1995, has been filed with the Securities and
Exchange Commission and is available without charge through the Distributor, SEI
Financial Services Company, 680 East Swedesford Road, Wayne, PA 19087-1658 or by
calling 1-800-932-7782. The Statement of Additional Information is incorporated
into this Prospectus by reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION 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 PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
April 30, 1995
CLASS B
<PAGE>
EXPENSE SUMMARY
SHAREHOLDER TRANSACTION EXPENSES
(As a percentage of offering price)
CLASS B
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
New Jersey Pennsylvania Intermediate-Term
Short-Term Fixed Municipal Municipal Government
Investment Income Securities Securities Securities GNMA
Fund Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------
Maximum sales charge imposed on
purchases....................... 1.00% 4.00% 1.00% 1.00% 4.00% 3?%
===========================================================================================================
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
- -----------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
New Jersey Pennsylvania Intermediate-Term
Short-Term Fixed Municipal Municipal Government
Investment Income Securities Securities Securities GNMA
Fund Fund Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Advisory Fees (after fee
waivers)(1) ............... .46% .50% .15% .00% .45% .43%
12b-1 Fees................... .25% .25% .25% .25% .25% .25%
Other Expenses............... .34% .30% .32% .80% .35% .37%
- -----------------------------------------------------------------------------------------------------------
Total Operating Expenses (after fee
waivers)(2)................ .1.05% 1.05% .72% 1.05% 1.05% 1.05%
===========================================================================================================
</TABLE>
(1) The Advisor and Administrator have agreed to voluntarily waive a portion of
their fees in an amount that operates to limit total operating expenses of
Class B of each Fund to not more than 1.05% of average daily net assets.
The Advisor and the Administrator each reserves the right to terminate its
fee waiver at any time in their sole discretion.
(2) Absent fee waivers, Advisory Fees would be .60%, Administration Fees for
each Fund would be .20% and Total Operating Expenses would be as follows:
Short-Term Investment Fund 1.19%, Fixed Income Fund 1.15%, New Jersey
Municipal Securities Fund 1.22%, Pennsylvania Municipal Securities Fund
1.85%, Intermediate-Term Government Securities Fund 1.20% and GNMA Fund
1.22%. Additional information may be found under "The Advisor," "The
Administrator" and "The Distributor."
<PAGE>
THE TRUST
The Pillar Funds (the "Trust") consist of open-end management investment
companies that have diversified and non-diversified portfolios. The Trust offers
units of beneficial interest ("shares'') in one of fourteen separate investment
portfolios. Shareholders may purchase shares in each portfolio (except for the
U.S. Treasury Securities Plus Money Market Fund) through two separate classes
(Class A and Class B) which provide for variations in distribution costs, voting
rights, and dividends. Except for these differences between classes, each share
of each portfolio represents an undivided, proportionate interest in that
portfolio. This Prospectus relates to the Class B shares of the Trust's
Short-Term Investment, Fixed Income, New Jersey Municipal Securities,
Pennsylvania Municipal Securities, Intermediate-Term Government Securities and
GNMA Funds (each of these, a "Fund"). Each of the Funds is a diversified mutual
fund except for the New Jersey and Pennsylvania Municipal Securities Funds,
which are non-diversified mutual funds. Information regarding the Trust's other
portfolios and the Class A shares of the Funds is contained in separate
prospectuses that may be obtained from the Trust's Distributor, SEI Financial
Services Company, 680 East Swedesford Road, Wayne, Pennsylvania 19087 or by
calling 1-800-932-7782.
Shares of the Trust are not deposits, obligations or accounts (trust or
otherwise) of, or insured, guaranteed, sponsored or endorsed by, any bank
(including United Jersey Bank or its affiliates or correspondents), any state or
state agency, the Federal Deposit Insurance Corporation (FDIC), the U.S.
Government or any U.S. Government agency.
Shares of the Trust are subject to investment risks, including possible
loss of the principal amount invested. See "INVESTMENT OBJECTIVES AND
POLICIES--Risk Factors; Additional Risk Factors For New Jersey Municipal
Securities; Additional Risk Factors For Pennsylvania Municipal Securities."
A sales charge is imposed by all Funds at the time of purchase. See "PURCHASE
OF SHARES--Other Information Regarding Purchases."
INVESTMENT OBJECTIVES AND POLICIES
The Short-Term Investment Fund
The investment objective of this Fund is to provide a high level of total
return, primarily through income consistent with preservation of capital.
There is no assurance that the investment objective will be met. The Fund may
not invest in certain securities that may earn a higher return but which are
more volatile and riskier than the Fund's permitted investments.
At least 65% of the Fund's assets will be invested in (i) bills, notes and
bonds issued by the U.S. Treasury and separately traded interest and principal
component pans of such obligations that are transferable through the Federal
book entry system ("U.S. Treasury obligations") (ii) obligations issued or
guaranteed as to principal and interest by agencies and instrumentalities of the
U.S. Government; (iii) corporate debt obligations rated in one of the three
highest rating categories by a nationally recognize statistical rating
organization ("NRSRO") or determined by the Advisor to be of comparable quality
at the time of investment; (iv) commercial paper rated in the highest short-term
rating category by an NRSRO or determined by the Advisor to be of comparable
quality at the time of investment; (v) short-term bank obligations (certificates
of deposit, time deposits and bankers' acceptances) of U.S. commercial banks
with assets of at least $1 billion as of the end of their most recent fiscal
year; (vi) securities of the government of Canada and its provincial and local
governments; (vii) custodial receipts evidencing separately traded interest and
principal component parts of U.S. Treasury obligations; and (viii) repurchase
agreements involving such securities. Of this amount, the Fund may, for
temporary defensive purposes, invest up to 35% of its assets in commercial paper
rated in one of the two highest short-term rating categories or determined by
the Advisor to be of comparable quality at the time of investment. Securities
rated A are considered to be
<PAGE>
Charlene P. Palmer is a Vice President of the Advisor and has managed the
New Jersey Municipal Securities Fund since its inception in May, 1992.
Mrs. Palmer's experience has emphasized tax-exempt bonds. She joined United
Jersey Bank in 1981.
Frances M. Tendall is a Vice President and Regional Manager (Princeton) of
the Advisor. Mrs. Tendall has managed the Intermediate-Term Government
Securities Fund since its inception in April, 1992 and co-manages the U.S.
Treasury Securities Money Market Fund. Mrs. Tendall joined United Jersey Bank in
1982 and is currently responsible for managing both equity and fixed income
portfolios.
The Advisor is entitled to a fee. which is calculated daily and paid
monthly, at an annual rate of .60% of the average daily net assets of each Fund.
The Advisor has voluntarily agreed to waive all or a portion of its fees in
order to limit the operating expenses of Class B of each Fund to 1.05%. For the
fiscal year ended December 31, 1994, each Fund paid the Adviser the following
advisory fee (shown as a percentage of its average daily net assets): Short-Term
Investment Fund, .46%; Fixed Income Fund, .50%, New Jersey Municipal Securities
Fund, .15%; Pennsylvania Municipal Securities Fund, .00%; Intermediate-Term
Government Securities Fund, .45%; and GNMA Fund, .43%. The Advisor reserves the
right to terminate its fee waiver at any time in its sole discretion.
United Jersey Bank has also entered into a Custodian Agreement with the
Trust, under which it will provide all securities safekeeping services as
required by the Funds and the Investment Company Act of 1940, as amended. The
Trust pays United Jersey Bank (referred to herein in its custodial capacity as
the "Custodian") a Custodian fee, which is calculated daily and paid monthly, at
an annual rate of .025% of the average daily net assets of each Fund.
The Glass-Steagall Act restricts the securities activities of banks such as
United Jersey Bank, but federal regulatory authorities permit such banks to
provide investment advisory and other services to mutual funds. Should this
position be challanged successfully in court or reversed by legislation the
Trust might have to make other investment advisory arrangements.
THE ADMINISTRATOR
SEI Financial Management Corporation (the "Administrator"), a wholly-owned
subsidiary of SEI Corporation ("SEI"), serves as the Administrator of the
Trust. The Administrator provides the Trust with administrative services, other
than investment advisory services, including regulatory reporting, all necessary
office space, equipment, personnel and facilities.
The Administrator is entitled to a fee, which is calculated daily and paid
monthly, at an annual rate of .20% of the average daily net assets of each Fund.
The Administrator has agreed to waive all or a portion of its fees in order to
limit the total operating expenses of Class B of the New Jersey Municipal
Securities Fund and the Pennsylvania Municipal Securities Fund to .80%. The
Administrator reserves the right to terminate its fee waiver at any time in its
sole discretion.
THE SHAREHOLDER SERVICING AGENT
SEI Financial Management Corporation acts as the dividend dispursing agent
and shareholder servicing agent for the Trust. SEI Financial Management
Corporation also acts as the transfer agent for the Trust.
THE DISTRIBUTOR
SEI Financial Services Company (the "Distributor"), a wholly-owned
subsidiary of SEI, acts as the Distributor for the Trust.
The Class B shares of each Fund have a distribution plan dated February 28,
1992 or, for the Pennsylvania Municipal Securities and GNMA Fund, April 30, 1993
("Class B Plan"). As provided in the Distribution Agreement and the Class B
Plan, the Trust will pay the Distributor a fee of .25% of the
<PAGE>
average daily net assets of each Fund's Class B shares. The Distributor may
apply this fee toward: a) compensation for its services in connection with
distribution assistance or provision of shareholder services; or b) payments to
financial institutions and intermediaries such as banks (including United Jersey
Bank), savings and loan associations, insurance companies, and investment
counselors, broker-dealers, and the Distributor's affiliates and subsidiaries as
compensation for services, reimbursement of expenses incurred in connection with
distribution assistance, or provision of shareholder services. The Class B Plan
is characterized as a compensation plan since the distribution fee will be paid
to the Distributor without regard to the distribution or shareholder service
expenses incurred by the Distributor or the amount of payments made to financial
institutions and intermediaries. The Funds may also execute brokerage or other
agency transactions through an affiliate of the Advisor or through the
Distributor for which such affiliate or the Distributor receives compensation.
Class A shares of each Fund are offered without distribution fees (i) to
institutional investors (including United Jersey Bank, its affiliates and
correspondent banks) for the investment of their own funds, and (ii) to
individuals and institutions (including United Jersey Bank, its affiliates and
correspondent banks) but (A) only for the investment of funds held by such
individuals or institutions in a fiduciary, agency, custodial or other
representative capacity, and (B) only if such individuals or institutions are
able to provide complete shareholder recordkeeping services with respect to
shares purchased and held in such capacity.
Class B shares of each Fund are offered to all persons. Consequently, it is
possible that individuals or institutions may offer different classes of shares
to their customers and thus receive different compensation with respect to
different classes of shares. In addition, individuals or institutions that are
the record owner of shares for the account of their customers may impose
separate fees for account services to their customers.
PURCHASE OF SHARES
Shares of the Funds may be purchased through a financial institution, such
as United Jersey Bank, or a broker-dealer that has entered into a dealer
agreement with SEI Financial Services Company. Shares may also be purchased
directly through the Distributor by mail, by telephone, or by wire.
Shares of each Fund are sold on a continuous basis and may be purchased on
any Business Day. The minimum initial investment in the Trust is $1,000;
however, the minimum investment may be waived at the Distributor's discretion.
All subsequent purchases must be at least $50.
A purchase order will be effective as of the Business Day received by the
Distributor it the Distributor receives the order and payment before 4:00 p.m.,
Eastern time, on such Business Day.
Purchases Through Intermediaries
Customers should contact their intermediary for information about the
institution's procedures for purchasing shares of the Funds and any charges for
services provided by the institution. Intermediaries may impose an earlier
cut-off time for receipt of purchase orders directed through them to allow for
processing and transmittal of these orders to the Distributor for effectiveness
the same day. In addition, state securities laws may require banks and financial
institutions purchasing shares for their customers to register as dealers
pursuant to state laws.
Direct Purchases
By Mail
Investors may purchase shares of any Fund by completing and signing an
Account Application form and mailing it, along with a check (or other negotiable
bank instrument or money order) payable to "The Pillar Funds (Fund Name)," to
the Distributor. Subsequent purchases of shares may be made at any time by
mailing a check (or other negotiable bank draft or money order) to the
Distributor.
<PAGE>
The Pillar Funds
Investment Advisor:
United Jersey Bank Investment Management Division,
a division of United Jersey Bank
The Pillar Funds (the "Trust") consist of mutual fund portfolios seeking to
provide a convenient and economical means of investing in one or more
professionally managed portfolios of securities. This Prospectus relates to the
following equity and balanced funds (collectively, the "Funds"; individually a
"Fund"):
o Equity Value Fund
o Equity Income Fund
o Mid Cap Value Fund
o Balanced Growth Fund
o International Growth Fund
Class A
The Trust's Class A Shares are offered without distribution fees (i) to
institutional investors (including United Jersey Bank, its affiliates and
correspondent banks) for the investment of their own funds, and (ii) to any
individual or institution (including United Jersey Bank, its affiliates and
correspondent banks) for the investment of funds held by such individual or
institution in a fiduciary, agency, custodial or other representative capacity
(but only if such individual or institution is able to provide complete
shareholder record keeping services with respect to shares purchased and held in
such capacity) (persons who own Class A shares of a Fund are referred to herein
as "Shareholders").
CLASS A SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR INSURED,
ENDORSED OR GUARANTEED BY, ANY BANK (INCLUDING UNITED JERSEY BANK OR ITS
AFFILIATES OR CORRESPONDENTS), ANY STATE OR STATE AGENCY, THE FEDERAL DEPOSIT
INSURANCE CORPORATION (FDIC), THE U.S. GOVERNMENT OR ANY U.S. GOVERNMENT AGENCY.
Amounts invested in the Funds are subject to investment risks, including
possible loss of the principal amount invested.
This Prospectus sets forth concisely the information about the Trust that a
prospective investor should know before investing. Investors are advised to read
this Prospectus and retain it for future reference. A Statement of Additional
Information dated April 29,1995, has been filed with the Securities and Exchange
Commission and is available without charge through the Distributor, SEI
Financial Services Company, 680 East Swedesford Road, Wayne, PA 19087-1658 or by
calling 1-800-932-7782. The Statement of Additional Information is incorporated
into this Prospectus by reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION 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 PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
April 30, 1995
CLASS A
<PAGE>
EXPENSE SUMMARY
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
CLASS A
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Equity Equity Mid Cap Balanced International
Value Income Value Growth Growth
Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
Advisory Fees (after fee waivers)(1)... .49% .47% .47% .46% .90%
Other Expenses(2) ..................... .31% .33% .33% .34% .60%
- -------------------------------------------------------------------------------------------------
Total Operating Expenses
(after fee waivers)(3)............... .80% .80% .80% .80% 1.50%
=================================================================================================
</TABLE>
(1) The Advisor has agreed to voluntarily waive a portion of its fees in an
amount that operates to limit total operating. expenses of Class A of the
Equity Value, Equity Income, Mid Cap Value and Balanced Growth Funds to not
more than .80% of average daily net assets; and the Adviser and Sub-Adviser
have voluntarily agreed to waive a portion of their fees in an amount that
operates to limit total operating expenses of Class A of the International
Growth Fund to not more than 1.50% of average daily net assets. The Advisor
and Sub-Advisor each reserves the right to terminate its fee waiver at any
time in its sole discretion.
(2) Other Expenses for the International Growth Fund are based on estimated
amounts for the current fiscal year.
(3) Absent fee waivers for the Equity Value, Equity Income, Mid Cap Value,
Balanced Growth and International Growth Funds, Advisory Fees would be .75%
for the Equity Value, Equity Income, Mid Cap Value and Balanced Growth
Funds and 1.00% for the International Growth Fund, and Total Operating
Expenses would be 1.06%, 1.08%, 1.08%, 1.09% and 1.60%, respectively, of
such Funds' average daily net assets. Additional information may be found
under "The Advisor," "The Sub-Advisor," "The Administrator" and "The
Distributor."
Example
- ------------------------------------------------------------------------------
1 yr. 3 yrs. 5 yrs. 10 yrs.
- ------------------------------------------------------------------------------
An investor in a Fund would pay the
following expenses on a $1,000 investment
assuming (1) 5% annual return and
(2) redemption at the end of each time
period:
Equity Value, Equity Income, Mid Cap Value
and Balanced Growth Funds................ $ 8 $26 $44 $99
International Growth Fund .............. $15 $47 -- --
=============================================================================
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 the Funds. The information set forth in the foregoing
table and example relates only to Class A shares. The Trust also offers Class B
shares of each Fund which are subject to the same expenses except for a sales
load and certain distribution costs. Financial institutions that are the record
owner of shares for the account of their customers may impose separate fees for
account services to their customers. Additional information may be found under
"The Advisor," "The Sub-Advisor," "The Administrator" and "The Distributor."
<PAGE>
THE TRUST
The PILLAR Funds (the "Trust") consist of open-end management investment
companies that have diversified and non-diversified portfolios. The Trust offers
units of beneficial interest ("shares") in fifteen separate investment
portfolios. Shareholders may purchase shares in each portfolio (except for the
U.S. Treasury Securities Plus Money Market Fund) through two separate classes
(Class A and Class B) which provide for variations in distribution costs, voting
rights, and dividends. Except for these differences between classes, each share
of each portfolio represents an undivided proportionate interest in that
portfolio. This Prospectus relates to the Class A shares of the Trust's Equity
Value Fund, Equity Income Fund, Mid Cap Value Fund, Balanced Growth Fund and
International Growth Fund (each of these, a "Fund"). Each of the Funds is a
diversified mutual fund, except for the International Growth Fund, which is a
nondiversified mutual fund. Information regarding the Trust's other portfolios
and the Class B shares of the Funds is contained in separate prospectuses that
may be obtained from the Trust's Distributor, SEI Financial Services Company,
680 East Swedesford Road, Wayne, Pennsylvania 19087 or by calling
1-800-932-7782.
Shares of the Trust are not deposits, obligations or accounts (trust or
otherwise) of, or insured, guaranteed, sponsored or endorsed by, any bank
(including United Jersey Bank or its affiliates or correspondents), any state or
state agency, the Federal Deposit Insurance Corporation (FDIC), the U.S.
Government or any U.S. Government agency.
Shares of the Trust are subject to Investment risks, including possible
loss of the principal amount invested. See "INVESTMENT OBJECTIVES AND
POLICIES--Risk Factors."
INVESTMENT OBJECTIVES AND POLICIES
The Equity Value Fund
The investment objective of this Fund is growth of both capital and income.
There is no assurance that the investment objective will be met. The Fund will
normally be as fully invested as practicable in equity securities consisting of
common stocks, warrants to purchase common stocks, debt securities and preferred
stocks convertible into common stocks and ADRs. The Advisor will purchase equity
securities which, in the Advisor's opinion, are undervalued in the marketplace
at the time of purchase. For a description of the Fund's permitted investments,
see "Description of Permitted Investments."
The Equity Income Fund
The investment objective of this Fund is growth of capital consistent with
an emphasis on current income There is no assurance that the investment
objective will be met.
The Fund will normally be as fully invested as practicable in equity
securities consisting of common stocks, warrants to purchase common stocks, debt
securities and preferred stocks convertible into common stocks and ADRs. For a
description of the Fund's permitted investments, see "Description of Permitted
Investments."
The Mid Cap Value Fund
The investment objective of this Fund is growth of both capital and income.
There is no assurance that the investment objective will be met.
The Fund will normally be as fully invested as practicable in equity
securities consisting of common stocks, warrants to purchase common stocks, debt
securities and preferred stocks convertible into common stocks and ADRs, that in
the Advisor's opinion, are significantly undervalued relative to the their
actual value at the time of purchase. Under normal market conditions, the Fund
will invest at least 65% of its total assets in equity securities of mid cap
issuers (i.e. companies with market capitalizations ranging between $250 million
and $1.5 billion at the time of purchase). The Fund may also invest in equity
securities of small cap issuers (i.e. companies with market capitalizations
between $100 million and $250 million at the time of purchase).
The Advisor will attempt to maintain a highly diversified portfolio in
order to reduce the risks
<PAGE>
the Trust. The Administrator provides the Trust with administrative
services, other than investment advisory services, including all regulatory
reporting, necessary office space, equipment, personnel and facilities.
The Administrator is entitled to a fee, which is calculated daily and paid
monthly, at an annual rate of .20% of the average daily net assets of each Fund.
THE SHAREHOLDER SERVICING AGENT
SEI Financial Management Corporation acts as the dividend disbursing agent
and shareholder servicing agent for the Trust. SEI Financial Management
Corporation also acts as the transfer agent for the Trust.
THE DISTRIBUTOR
SEI Financial Services Company (the "Distributor"), a wholly-owned
subsidiary of SEI acts as the Distributor for the Trust. No compensation is paid
to the Distributor for distribution services for the Class A shares of any Fund.
Class B shares of each Fund bear the costs of their distribution expenses and
related service fees at the annual rate of up to .25% of the average daily net
assets of the Fund. In addition, a maximum charge of 4% is imposed on the sale
of Class B shares of each Fund. Class A shares of each Fund are offered without
distribution fees (i) to institutional investors (including United Jersey Bank,
its affiliates and correspondent banks) for the investment of their own funds,
and (ii) to individuals and institutions (including United Jersey Bank, its
affiliates and correspondent banks) but (A) only for the investment of funds
held by such individuals or institutions in a fiduciary, agency, custodial or
other representative capacity, and (B) only if such individuals or institutions
are able to provide complete shareholder recordkeeping services with respect to
shares purchased and held in such capacity.
Class B shares of each Fund are offered to all persons. Consequently, it is
possible that individuals and institutions may offer different classes of shares
to their customers and thus receive different compensation with respect to
different classes of shares. In addition, individuals and institutions that are
the record owner of shares for the account ???? their customers may impose
separate fees for account services to their customers. The Funds may also
execute brokerage or other agency transactions through an affiliate of the
Advisor or through the Distributor for which such affiliate or the Distributor
receives compensation.
PURCHASE AND REDEMPTION OF SHARES
Purchases and redemptions of shares of each Fund may be made on any
Business Day. State securities laws may require banks and financial institutions
purchasing shares for their customers to register as dealers pursuant to state
laws.
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. However, an order may be cancelled if the Custodian does not receive
Federal funds before 12:00 noon, Eastern time, on the next Business Day, and the
investor could be liable for any fees or expenses incurred by the Trust. An
investor in the Class A shares of the Funds may not purchase shares by check.
Financial institutions may impose an earlier cut-off time for receipt of
purchase orders directed through them to allow for processing and transmittal
of these orders to the Distributor for effectiveness the same day. The purchase
price of shares of each Fund is the net asset value next determined after a
purchase order is effective. The net asset value per share of each Fund is
determined by dividing the total market value of the Fund's investments and
other assets, less any liabilities, by the total outstanding shares of the Fund.
A Fund may use a pricing service to provide market quotations. A pricing service
may use a matrix system of valuation to value fixed income securities which
considers factors such as securities prices, yield features, ratings and
developments related to a specific security. Net asset value per share is
determined daily as of 4:00 p.m., Eastern time, on each Business Day. Purchases
will be made in full and fractional shares of the Trust calculated to three
decimal places. Although the methodology and
<PAGE>
procedures for determining net asset value are identical, the net asset
value per share of classes within a Fund may differ because of the distribution
expenses charged to Class B shares.
The Trust reserves the right to reject a purchase order when the
Distributor determines that it is not in the best interest of the Trust or its
Shareholders to accept such order.
Shareholders who desire to redeem shares of the Fund must place their
redemption orders prior to 4:00 p.m., Eastern time, on any Business Day, for the
order to be effective on that Business Day. The redemption price of shares is
the net asset value of the Fund next determined after the redemption order is
effective. Payment on redemption will be made as promptly as possible and, in
any event, within seven Business Days after the redemption order is effective.
The Funds intend to pay cash for all shares redeemed, but under abnormal
conditions which make payment in cash unwise, payment may be made wholly or
partly in portfolio securities with a market value equal to the redemption
price. In such cases, an investor may incur brokerage costs in converting such
securities to cash.
PERFORMANCE
From time to time, the Funds may advertise yield and total return. These
figures will be based on historical earnings and are not intended to indicate
future performance. The yield of a Fund refers to the annualized income
generated by an investment in the Fund over a specified 30 day period. The
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.
The total return of a Fund refers to the average compounded rate of return
on a hypothetical investment for designated time periods (including, but not
limited to, the period from which the Fund commenced operations through the
specified date), assuming that the entire investment is redeemed at the end of
each period and assuming the reinvestment of all dividend and capital gain
distributions. The advertised performance on Class A shares will normally be
higher than for Class B shares because Class A shares are not subject to
distribution expenses charged to Class B shares. The actual return to a
Shareholder on Class A shares may be reduced by any administrative or management
charges that may be imposed by individuals or institutions on their customers
for account services. The actual return to shareholders on Class B shares will
be reduced by the amount of any sales load paid on Class B shares.
A Fund may periodically compare its performance to that of other mutual
funds tracked by mutual fund rating services (such as Lipper Analytical) or
financial and business publications and periodicals, broad groups of comparable
mutual funds, unmanaged indices which may assume investment of dividends but
generally do not reflect deductions for administrative and management costs or
to other investment alternatives. The Fund may quote Morningstar, Inc., a
service that ranks mutual funds on the basis of risk-adjusted performance. The
Fund may quote Ibbotson Associates of Chicago, Illinois, which provides
historical returns of the capital markets in the U.S. The Fund may use long term
performance of these capital markets to demonstrate general long-term risk
versus reward scenarios and could include the value of a hypothetical investment
in any of the capital markets. The Fund may also quote financial and business
publications and periodicals as they relate to fund management, investment
philosophy, and investment techniques.
A Fund may quote various measures of volatility and benchmark correlation
in advertising and may compare these measures to those of other funds. Measures
of volatility attempt to compare historical share price fluctuations or total
returns to a benchmark while measures of benchmark correlation indicate how
valid a comparative benchmark might be. Measures of volatility and correlation
are calculated using averages of historical data and cannot be calculated
precisely.
<PAGE>
The Pillar Funds
Investment Advisor:
United Jersey Bank
Investment Management Division,
a division of
United Jersey Bank
The Pillar Funds (the "Trust") consist of mutual fund portfolios
(collectively, the "Funds"; individually a "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 following
equity and balanced funds:
o Equity Value Fund
o Equity Income Fund
o Mid Cap Value Fund
o Balanced Growth Fund
o International Growth Fund
Class B
The Trust's Class B Shares are offered to all persons (persons who own
Class B shares of a Fund are referred to herein as "Shareholders").
CLASS B SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR INSURED,
ENDORSED OR GUARANTEED BY, ANY BANK (INCLUDING UNITED JERSEY BANK OR ITS
AFFILIATES OR CORRESPONDENTS), ANY STATE OR STATE AGENCY, THE FEDERAL DEPOSIT
INSURANCE CORPORATION (FDIC), THE U.S. GOVERNMENT OR ANY U.S. GOVERNMENT AGENCY.
Amounts invested in the Funds are subject to investment risks, including
possible loss of the principal amount invested.
Sales charges are imposed by all Funds at the time of purchase.
This Prospectus sets forth concisely the information about the Trust that a
prospective investor should know before investing. Investors are advised to read
this Prospectus and retain it for future reference. A Statement of Additional
Information dated April 29, 1995, has been filed with the Securities and
Exchange Commission and is available without charge through the Distributor, SEI
Financial Services Company, 680 East Swedesford Road, Wayne, PA 19087-1658 or by
calling 1-800-932-7782. The Statement of Additional Information is incorporated
into this Prospectus by reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION 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 PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
April 30, 1995
CLASS B
<PAGE>
EXPENSE SUMMARY
CLASS B
SHAREHOLDER TRANSACTION EXPENSES
(As a percentage of offering price)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Equity Equity Mid Cap Balanced International
Value Income Value Growth Growth
Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
Maximum sales charge imposed
on purchases........................... .4.00% 4.00% 4.00% 4.00% 4.00%
===============================================================================================
</TABLE>
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
<TABLE>
<CAPTION>
Equity Equity Mid Cap Balanced International
Value Income Value Growth Growth
Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
Advisory Fees (after fee waivers)(1).... .49% .47% .47% .46% .90%
12b-1 Fees.............................. .25% .25% .25% .25% .25%
Other Expenses(2)....................... .31% .33% .33% .34% .60%
- -----------------------------------------------------------------------------------------------
Total Operating Expenses
(after fee waivers)(3)................. 1.05% 1.05% 1.05% 1.05% 1.75%
===============================================================================================
</TABLE>
(1) The Advisor has agreed to voluntarily waive a portion of its fees in an
amount that operates to limit total operating expenses of Class B of the
Equity Value, Equity Income, Mid Cap Value and Balanced Growth Funds to not
more than 1.05% of average daily net assets; and the Advisor and
Sub-Advisor have voluntarily agreed to waive a portion of their fees in an
amount that operates to limit total operating expenses of Class B of the
International Growth Fund to not more than 1.75% of average daily net
assets. The Advisor and Sub-Advisor each reserves the right to terminate
its fee waiver at any time in its sole discretion.
(2) Other Expenses for the International Growth Fund are based on estimated
amounts for the current fiscal year.
(3) Absent fee waivers for the Equity Value, Equity Income, Mid Cap Value,
Balanced Growth and International Growth Funds, Advisory Fees would be .75%
for the Equity Growth, Equity Income, Mid Cap Value and Balanced Funds and
1.00% for the International Growth Fund, and Total Operating Expenses would
be 1.31%,1.33%, 1.33% and 1.34% and 1.85%, respectively, of such Funds'
average daily net assets. Additional information may be found under "The
Advisor," "The Sub-Advisor," "The Administrator" and "The Distributor."
Example
- -------------------------------------------------------------------------------
1 yr. 3 yrs. 5 yrs. 10 yrs.
- -------------------------------------------------------------------------------
An investor in each Fund would pay the
following expenses on a $1,000 investment
assuming (1) 4% maximum sales charge,
(2) 5% annual return and (3) redemption
at the end of each time period:
Equity Value, Equity Income, Mid Cap
Value and Balanced Growth Funds........... $50 $72 $96 $163
International Growth Fund ................ $57 $93 -- --
===============================================================================
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 the Funds. The information set forth in the foregoing
table and example relates only to Class B shares. The Trust also offers Class A
shares of each Fund which are subject to the same expenses except there are no
sales loads and distribution fees. Financial institutions that are the record
owner of shares for the account of their customers may impose separate fees for
account services to their customers. In addition, a wire redemption charge of
$10.00 is imposed for each redemption by wire. Additional information may be
found under "The Advisor," "The Sub-Advisor," "The Administrator," "The
Shareholder Servicing Agent" and "The Distributor."
The rules of the Securities and Exchange Commission require that the
maximum sales charge be reflected in the above table. However, certain investors
may qualify for reduced sales charges. See "Purchase and Redemption of Shares."
Long-term shareholders may pay more than the equivalent of the maximum
front-end sales charges otherwise permitted by the Rules (the "Rules") of the
National Association of Securities Dealers, Inc. ("NASD"). The Trust intends to
operate the Class B distribution plan in accordance with its terms and with the
NASD Rules concerning sales charges.
<PAGE>
THE TRUST
The Pillar Funds (the "Trust") consist of open-end management investment
companies that have diversified and non-diversified portfolios. The Trust offers
units of beneficial interest ("shares") in fifteen separate investment
portfolios. Shareholders may purchase shares in each portfolio (except for the
U.S. Treasury Securities Plus Money Market Fund) through two separate classes
(Class A and Class B) which provide for variations in distribution costs, voting
rights, and dividends. Except for these differences between classes, each share
of each portfolio represents an undivided proportionate interest in that
portfolio. This Prospectus relates to the Class B shares of the Trust's Equity
Value Fund, Equity Income Fund, Mid Cap Value Fund, Balanced Growth Fund and
International Growth Fund (each of these, a "Fund"). Each of the Funds is a
diversified mutual fund, except for the International Growth Fund, which is a
non-diversified mutual fund. Information regarding the Trust's other portfolios
and the Class A shares of the Funds is contained in separate prospectuses that
may be obtained from the Trust's Distributor, SEI Financial Services Company,
680 East Swedesford Road, Wayne, Pennsylvania 19087 or by calling
1-800-932-7782.
Shares of the Trust are not deposits, obligations or accounts (trust or
otherwise) of, or Insured, guaranteed, sponsored or endorsed by, any bank
(including United Jersey Bank or its affiliates or correspondents), any state or
state agency, the Federal Deposit Insurance Corporation (FDIC), the U.S.
Government or any U.S. Government agency.
Shares of the Trust are subject to investment risks, including possible
loss of the principal amount invested. See "INVESTMENT OBJECTIVES AND
POLICIES--Risk Factors."
A sales charge is imposed by all Funds at the time of purchase. See
"PURCHASE OF SHARES--Other Information Regarding Purchases."
INVESTMENT OBJECTIVES AND POLICIES
The Equity Value Fund
The investment objective of this Fund is growth of both capital and income.
There is no assurance that the investment objective will be met.
The Fund will normally be as fully invested as practicable in equity
securities consisting of common stocks, warrants to purchase common stocks, debt
securities and preferred stocks convertible into common stocks and ADRs. The
Advisor will purchase equity securities which, in the Advisor's opinion, are
undervalued in the marketplace at the time of purchase. For a description of the
Fund's permitted investments, see "Description of Permitted Investments."
The Equity Income Fund
The investment objective of this Fund is growth of capital consistent with
an emphasis on current income. There is no assurance that the investment
objective will be met.
The Fund will normally be as fully invested as practicable in equity
securities consisting of common stocks, warrants to purchase common stocks, debt
securities and preferred stocks convertible into common stocks and ADRs. For a
description of the Fund's permitted investments, see "Description of Permitted
Investments."
The Mid Cap Value Fund
The investment objective of this Fund is growth of both capital and income.
There is no assurance that the investment objective will be met.
The Fund will normally be as fully invested as practicable in equity
securities consisting of common stocks, warrants to purchase common stocks, debt
securities and preferred stocks convertible into common stocks and ADRs that, in
the Advisor's opinion, are significantly undervalued relative to their actual
value at the time of purchase. Under normal market conditions, the Fund will
invest at least 65%
<PAGE>
headed by Trond Skramstad, Senior Vice President of WMC.
The Sub-Advisor is entitled to a fee payable by the Advisor from the
Advisor's fee, which is calculated daily and paid monthly, at an annual rate of
.60% of the average daily net assets of the Fund up to and including $50
million; .45% of the average daily net assets of the Fund in excess of $50
million up to and including $150 million and .30% of the average daily net
assets of the Fund in excess of $150 million. The Sub-Advisor may from time to
time waive a portion of its fee in order to limit the operating expenses of
Class B shares of the Fund. The Sub-Advisor reserves the right to terminate any
such fee waiver at any time in its sole discretion. As of December 31, 1994, the
International Growth Fund had not commenced operations
THE ADMINISTRATOR
SEI Financial Management Corporation (the "Administrator"), a wholly-owned
subsidiary of SEI Corporation ("SEI"), serves as the Administrator of the Trust.
The Administrator provides the Trust with administrative services, other than
investment advisory services, including all regulatory reporting, necessary
office space, equipment, personnel and facilities.
The Administrator is entitled to a fee, which is calculated daily and paid
monthly, at an annual rate of .20% of the average daily net assets of each Fund.
THE SHAREHOLDER SERVICING AGENT
SEI Financial Management Corporation acts as the dividend dispursing agent
and shareholder servicing agent for the Trust. SEI Financial Management
Corporation also acts as the transfer agent for the Trust.
THE DISTRIBUTOR
SEI Financial Services Company (the "Distributor"), a wholly-owned
subsidiary of SEI, acts as the Distributor for the Trust.
The Class B shares of each Fund are subject to a distribution plan dated
February 28, 1992 ("Class B Plan"). As provided in the Distribution Agreement
and the Class B Plan, the Trust will pay the Distributor a fee of .25% of the
average daily net assets of each Fund's Class B shares. The Distributor may
apply this fee toward: a) compensation for its services in connection with
distribution assistance or provision of shareholders services; or b) payments to
financial institutions intermediaries such as banks (including United Jersey
Bank), savings and loan associations, insurance companies, and investment
counselors, broker-dealers, and the Distributor's affiliates and subsidiaries as
compensation for services, reimbursement of expenses incurred in connection with
distribution assistance, or provision of shareholder services. The Class B Plan
is characterized as a compensation plan since the distribution fee will be paid
to the Distributor without regard to the distribution or shareholder service
expenses incurred by the Distributor or the amount of payments made to financial
institutions and intermediaries. The Funds may also execute brokerage or other
agency transactions through an affiliate of the Advisor or through the
Distributor for which such affiliate or the Distributor receives compensation.
Class A shares of each Fund are offered without distribution fees (i) to
institutional investors (including United Jersey Bank, its affiliates and
correspondent banks) for the investment of their own funds, and (ii) to
individuals and institutions (including United Jersey Bank, its affiliates and
correspondent banks) but (A) only for the investment of funds held by such
individuals or institutions in a fiduciary, agency, custodial or other
representative capacity, and (B) only if such individuals or institutions are
able to provide complete shareholder recordkeeping services with respect to
shares purchased and held in such capacity.
Class B shares of each Fund are offered to all persons. Consequently, it is
possible that individuals and institutions may offer different classes of shares
to their customers and thus receive different
<PAGE>
compensation with respect to different classes of shares. In addition,
individuals and institutions that are the record owner of shares for the account
of their customers may impose separate fees for account services to their
customers.
PURCHASE OF SHARES
Shares of the Funds may be purchased through a financial institution, such
as United Jersey Bank, or a broker-dealer that has entered into a dealer
agreement with SEI Financial Services Company. Shares may also be purchased
directly through the Distributor by mail, by telephone, or by wire.
Shares of each Fund are sold on a continuous basis and may be purchased on
any Business Day. The minimum initial investment in the Trust is $1,000;
however, the minimum investment may be waived at the Distributor's discretion.
All subsequent purchases must be at least $50.
A purchase order will be effective as of the Business Day received by the
Distributor if the Distributor receives the order and payment before 4:00 p.m.,
Eastern time, on such Business Day.
Purchases Through Intermediaries
Customers should contact their Intermediary for information about the
institution's procedures for purchasing shares of the Funds and any charges for
services provided by the institution. Intermediaries may impose an earlier
cut-off time for receipt of purchase orders directed through them to allow for
processing and transmittal of these orders to the Distributor for effectiveness
the same day. In addition, state securities laws may require banks and financial
institutions purchasing shares for their customers to register as dealers
pursuant to state laws.
Direct Purchases
By Mail
Investors may purchase shares of any Fund by completing and signing an
Account Application form and mailing it, along with a check (or other negotiable
bank instrument or money order) payable to "The Pillar Funds (Fund Name)," to
the Distributor. Subsequent purchases of shares may be made at any time by
mailing a check (or other negotiable bank draft or money order) to the
Distributor.
Account Application forms can be obtained by calling SEI Financial Services
Company at 1-800-932-7782.
By Telephone or by Wire
If your Account Application has been previously received, you may also
purchase shares by telephone or by wire. To buy shares by telephone or by wire,
call SEI Financial Services Company toll-free at 1-800-538-0018.
Automatic Investment Plan (AIP)
A Shareholder may also arrange for periodic additional investments in the
Funds through automatic deductions by ACH from a checking accounting by
completing an Optional Services Form. The minimum pre-authorized investment
amount is $50 per month An Optional Services Form may be obtained by contacting
the Distributor at 1-800-932-7782.
Other Information Regarding Purchases
A purchase order for shares will be executed at a per share price equal to
the net asset value next determined after the receipt of the purchase order by
the Distributor plus any applicable sales charge (the "offering price").
Orders by telephone will not be executed until payment has been received.
If a check received does not clear, the purchase will be cancelled and the
investor could be liable for any losses or fees incurred. No certificates
representing shares will be issued.
The net asset value per share of each Fund is determined by dividing the
total market value of that Fund's investments and other assets, less any
liabilities, by the total outstanding shares of the Fund. A Fund may use a
pricing service to provide market
<PAGE>
next Business Day following receipt of a valid request for redemption. Wire
redemption requests may be made by the Shareholder by calling SEI Financial
Services Company at 1-800-932-7782 who will add a wire redemption charge
(presently $10.00) to the amount of the redemption. Shareholders may not close
their accounts by telephone
Neither the Trust nor its transfer agent will 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 and its
transfer agent will each employ reasonable procedures to confirm that
instructions communicated by telephone are genuine, including requiring a form
of personal identification prior to acting upon instructions received by
telephone and recording telephone instructions. 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 the redemption order by other means.
Systematic Withdrawal Plan (SWP)
The Funds offer a Systematic Withdrawal Plan which may be utilized by
Shareholders who wish to receive regular distributions from their account. Upon
commencement of the SWP, the account must have a current value of $1,000 or
more. Shareholders may elect to receive automatic payments by check or ACH of
$50 or more on a monthly or quarterly basis. An Optional Services Form may be
obtained by contacting the Distributor at 1-800-932-7732.
Other Information Regarding Redemptions
All redemption orders are effected at the net asset value per share next
determined after receipt of a valid request for redemption, as described above.
Net asset value per share is determined as of 4:00 p.m., Eastern time, on each
Business Day. Payment to Shareholders for shares redeemed will be made within
seven days after receipt by the Distributor of the request for redemption.
At various times, any Fund may be requested to redeem shares for which it
has not yet received good payment in connection with their purchase. In such
circumstances, the forwarding of redemption proceeds may be delayed until such
payment has been collected. The Funds intend to pay cash for all shares
redeemed, but under abnormal conditions which make payment in cash unwise,
payment may be made wholly or partly in portfolio securities on a market value
equal to the redemption price. In such cases, an investor may incur brokerage
costs in converting such securities to cash.
Due to the relatively high cost of handling small investments, each Fund
reserves the right to redeem. at net asset value, the shares of any Shareholder
if, because of redemptions of shares by or on behalf of the Shareholder, the
account of such Shareholder in any Fund has a value of less than $1,000, the
minimum initial purchase amount. Accordingly, an investor purchasing shares of
any Fund in only the minimum investment amount may be subject to such
involuntary redemption if he or she thereafter redeems any of these shares.
Before any Fund exercises its right to redeem such shares and to send the
proceeds to the Shareholder, the Shareholder will be given notice that the value
of the shares in his or her account is less than the minimum amount and will be
allowed 60 days to make an additional investment in such Fund in an amount which
will increase the value of the account to at least $1,000.
See "Purchase and Redemption of Shares" in the Statement of Additional
Information for examples of when the right of redemption may be suspended.
PERFORMANCE
From time to time, the Funds may advertise yield and total return. These
figures will be based on historical earnings and are not intended to indicate
future performance. The yield of a Fund refers to the annualized income
generated by an investment in the Fund over a specified 30 day period. The 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.
<PAGE>
The total return of a Fund refers to the average compounded rate of return
on a hypothetical investment, net of any sales charge imposed, for designated
time periods (including, but not limited to, the period from which the Fund
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. Each Fund's performance may be
compared to other funds or to relevant indices which may calculate total return
without reflecting sales charges, in which case a Fund may advertise its total
return in the same manner. If reflected, sales charges would reduce these total
return calculations. The advertised performance on Class A shares will normally
be higher than for Class B shares because Class A shares are not subject to
distribution expenses charged to Class B shares. The actual return to a
Shareholder on Class A shares may be reduced by any administrative or management
charges that may be imposed by individuals or institutions on their customers
for account services. The actual return to Shareholders on Class B shares will
be reduced by the amount of any sales load paid on Class B shares.
A Fund may periodically compare its performance to that of other mutual
funds tracked by mutual fund rating services (such as Lipper Analytical) or
financial and business publications and periodicals, broad groups of comparable
mutual funds, unmanaged indices which may assume investment of dividends but
generally do not reflect deductions for administrative and management costs or
to other investment alternatives. The Fund may quote Morningstar, Inc., a
service that ranks mutual funds on the basis of risk-adjusted performance. The
Fund may quote Ibbotson Associates of Chicago, Illinois, which provides
historical returns of the capital markets in the U.S. The Fund may use long term
performance of these capital markets to demonstrate general long-term risk
versus reward scenarios and could include the value of a hypothetical investment
in any of the capital markets. The Fund may also quote financial and business
publications and periodicals as they relate to fund management, investment
philosophy, and investment techniques.
A Fund may quote various measures of volatility and benchmark correlation
in advertising and may compare these measures to those of other funds. Measures
of volatility attempt to compare historical share price fluctuations or total
returns to a benchmark while measures of benchmark correlation indicate how
valid a comparative benchmark might be. Measures of volatility and correlation
are calculated using averages of historical data and cannot be calculated
precisely.
TAXES
The following summary of federal income tax consequences is based on
current tax laws and regulations, which may be changed by legislative, judicial
or administrative action. No attempt has been made to present a detailed
explanation of the federal, state, or local income tax treatment of the Funds or
their Shareholders. Accordingly, Shareholders are urged to consult their tax
advisers regarding specific questions as to federal, state and local income
taxes.
Tax Status of the Funds
Each Fund is treated as a separate entity for federal income tax purposes
and is not combined with the Trust's other Funds. Each Fund intends to qualify
for the special tax treatment afforded regulated investment companies under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"), so
as to be relieved of federal income tax on that part of its net investment
income and net capital gain (the excess of net long-term capital gain over net
short-term capital loss) which is distributed to Shareholders.
Tax Status of Distributions
Each Fund will distribute substantially 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. Only a portion of such
dividends from the Balanced Growth Fund will qualify for the dividends-received
deduction otherwise available to corporate shareholders. No??????????
<PAGE>
Filed Pursuant to Rule 497(c)
(File Nos. 33-44712 & 8116509)
The Pillar Funds
Investment Advisor:
United Jersey Bank Investment Management Division,
a division of United Jersey Bank
The Pillar Funds (the "Trust") consist of mutual fund portfolios company
seeking to provide a convenient and economical means of investing in one or more
professionally managed portfolios of securities. This Prospectus relates to the
following fund (the "Fund"):
o U.S. Treasury Securities Plus Money Market Fund
The Fund's Shares are offered exclusively through the Money Desk of the
Bank Investment Division of United Jersey Bank (the "Money Desk") on an agency
basis and are available exclusively to customers of the Money Desk (persons who
own shares of the Fund are referred to herein as "Shareholders").
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR INSURED, ENDORSED
OR GUARANTEED BY, ANY BANK (INCLUDING UNITED JERSEY BANK OR ITS AFFILIATES OR
CORRESPONDENTS), ANY STATE OR STATE AGENCY, THE FEDERAL DEPOSIT INSURANCE
CORPORATION (FDIC), THE U.S. GOVERNMENT OR ANY U.S. GOVERNMENT AGENCY.
An investment in the Fund is subject to investment risks, including
possible loss of the principal amount invested.
An investment in the Fund is neither insured nor guaranteed by the U.S.
Government and there can be no assurance that the Fund will be able to maintain
a stable net asset value of S1.00 per share.
This Prospectus sets forth concisely the information about the Trust that a
prospective investor should know before investing. Investors are advised to read
this Prospectus and retain it for future reference. A Statement of Additional
Information dated April 29, 1995 has been filed with the Securities and Exchange
Commission and is available without charge through the Distributor, SEI
Financial Services Company, 680 East Swedesford Road, Wayne, PA 19087-1658 or by
calling 1-800-932-7782. The Statement of Additional Information is incorporated
into this Prospectus by reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION 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 PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
April 30, 1995
<PAGE>
EXPENSE SUMMARY
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
U.S. Treasury
Securities Plus
Money Market
Fund
Advisory Fees (after fee waivers)(1) ......................... .05%
12b-1 fees.................................................... .03%
Other Expenses................................................ .47%
- --------------------------------------------------------------------------------
Total Operating Expenses (after fee waivers)(2)............... .55%
================================================================================
(1) The Advisor has agreed to voluntarily waive fees in an amount that
operates to limit total operating expenses of the Fund to not more than
.55% of average daily net assets. The Advisor reserves the right to
terminate its fee waiver at any time in its sole discretion.
(2) Absent fee waivers, Advisory Fees would be 15% and Total Operating
Expenses would be .65% of the Fund's average daily net assets. Additional
information may be found under "The Advisor," "The Administrator" and "The
Distributor."
Example
- --------------------------------------------------------------------------------
1 yr. 3 yrs. 5 yrs. 10 yrs.
- --------------------------------------------------------------------------------
An investor in a Fund would pay the
following expenses on a $1,000
investment assuming (1) 5% annual
return and (2) redemption at the end
of each time period..................... $6 $18 $31 $69
================================================================================
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 the Fund. Financial institutions that are the record owner
of shares for the account of their customers may impose separate fees for
account services to their customers. Additional information may be found under
"The Advisor," "The Administrator" and "The Distributor."
Long-term shareholders may pay more than the equivalent of the maximum
front-end sales charges otherwise permitted by the Rules (the "Rules") of the
National Association of Securities Dealers, Inc. ("NASD"). The Trust intends to
operate the distribution plan in accordance with its terms and with the NASD
Rules concerning sales charges.
<PAGE>
THE TRUST
The Pillar Funds (the "Trust") is an open-end management investment company
that has diversified and non-diversified portfolios. The Trust offers units of
beneficial interest ("shares") in fifteen separate investment portfolios.
Shareholders may purchase shares in each portfolio (except for the U.S.
Treasury Securities Plus Money Market Fund) through two separate classes (Class
A and Class B) which provide for variations in distribution costs, voting
rights, and dividends. Except for these differences between classes, each share
of each fund represents an undivided, proportionate interest in that fund. This
Prospectus relates to the Trust's U.S. Treasury Securities Plus Money Market
Fund (each of these, a "Fund"). The Fund is a diversified mutual fund.
Information regarding the Trust's other funds is contained in separate
prospectuses that may be obtained from the Trust's Distributor, SEI Financial
Services Company, 680 East Swedesford Road, Wayne, Pennsylvania 19087 or by
calling 1-800-932-7782.
Shares of the Trust are not deposits, obligations or accounts (trust or
otherwise) of, or insured, guaranteed, sponsored or endorsed by, any bank
(including United Jersey Bank), any state or state agency, the Federal Deposit
Insurance Corporation (FDIC), the U.S. Government or any U.S. Government
agency.
Shares of the Trust are subject to investment risks, including possible
loss of the principal amount invested.
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Fund is to preserve principal value and
maintain a high degree of liquidity while providing current income. There is no
assurance that the investment objective of the Fund will be met.
The Fund intends to comply with regulations of the Securities and Exchange
Commission ("SEC") applicable to money market funds using the amortized cost
method for calculating net asset value. These regulations impose certain
quality, maturity and diversification restraints on investments by the Fund.
Under these regulations, the Fund will invest only in U.S. dollar denominated
securities, will maintain an average maturity on a dollar-weighted basis of 90
days or less, and will acquire only "eligible securities" that present minimal
credit risks and have a maturity of 397 days or less. For a further discussion
of these rules, see "Description of Permitted Investments."
The U.S. Treasury Securities Plus Money Market Fund
The Fund will invest in (i) bills, notes and bonds issued by the U.S.
Treasury; (ii) separately traded interest and principal component parts of such
obligations are transferable through the Federal Book Entry System (together,
"U.S. Treasury Obligations"); and (iii) repurchase agreements involving U.S.
Treasury Obligations.
For a description of the Fund's permitted investments, see "Description of
Permitted Investments."
Securities Lending
The Fund may make short-term loans of its portfolio securities under
contracts calling for collateral in cash or U.S. Government securities with a
value at least equal to 102% of the value of the loaned securities. The Fund
will continue to collect interest on the securities loaned and will also
receive either interest, through investment of cash collateral, or a fee, if the
collateral is U.S. Government securities. The Fund pays lending and other fees
in connection with securities loans.
INVESTMENT LIMITATIONS
The investment objective and the following investment limitations are
fundamental policies of the Fund. In addition, it is a fundamental policy of the
Fund to use its best efforts to maintain a constant net asset value of $1.00 per
share although there can be no assurance the Fund will be able to do so.
Fundamental policies cannot be changed with respect to the Fund without the
consent of the holders of a majority of the Fund's outstanding shares.
<PAGE>
THE DISTRIBUTOR
SEI Financial Services Company (the "Distributor"), a wholly-owned
subsidiary of SEI, acts as the Distributor for the Trust.
The Fund has a distribution plan dated April 30, 1993 ("Plan"). As provided
in the Distribution Agreement and the Plan, the Trust will pay the Distributor a
fee of .03% of the Fund's average daily net assets. The Distributor may apply
this fee toward: a) compensation for its services in connection with
distribution assistance or provision of shareholder services; or (b) payments to
financial institutions and intermediaries such as banks (including United Jersey
Bank), savings and loan associations, insurance companies. and investment
counselors, broker-dealers, and the Distributor's affiliates and subsidiaries
as compensation for services or reimbursement of expenses incurred in connection
with distributor assistance or provision of shareholder services. The Plan is
characterized as a compensation plan since the distribution fee will be paid to
the Distributor without regard to the distribution or shareholder service
expenses incurred by the Distributor or the amount of payments made to financial
institutions and intermediaries. The Fund may also execute brokerage or other
agency transactions through an affiliate of the Advisor or through the
Distributor for which the affiliate or the Distributor receives compensation.
In addition, financial institutions that are the record owner of shares for the
account of their customers may impose separate fees for account services to
their customers.
PURCHASE AND REDEMPTION OF SHARES
Purchases and redemptions of shares of the Fund may be made on any Business
Day. State securities laws may require banks and financial institutions
purchasing shares for their customers to register as dealers pursuant to state
laws.
A purchase order will be effective as of the Business Day received by the
Distributor if the Distributor receives an order and the Custodian receives
federal funds before 12:00 noon, Eastern time, on such Business Day. Otherwise,
the purchase order will be effective the next Business Day. Financial
institutions may impose an earlier cut-off time for receipt of purchase orders
directed through them to allow time for processing and transmittal of these
orders to the Distributor for effectiveness the same day.
The purchase price is the net asset value per share next computed after the
order is effective. The net asset value per share of the Fund is determined by
dividing the total value of its investments and other assets, less any
liabilities, by its total outstanding shares. The net asset value per share is
calculated as of 12:00 noon, Eastern time, each Business Day based on the
amortized cost method as described in the Statement of Additional Information.
Purchased shares are first entitled to dividends the day the purchase order is
effective.
The minimum initial investment in the Fund is $100,000: however, the
minimum investment may be waived at the Distributor's discretion.
The Trust reserves the right to reject a purchase order when the
Distributor determines that it is not in the best interest of the Trust or its
Shareholders to accept such order
For redemption orders received before 12:00 noon, Eastern time, payment
will be made the same day by transfer of federal funds. Otherwise, payment will
be made on the next Business Day. The redemption price is the net asset value
per share of the Fund next determined after receipt by the Distributor of the
redemption order. Redeemed shares are not entitled to dividends declared the day
the redemption order is effective.
The purchase price and the redemption price is expected to remain constant
at $1.00 per share.
The Fund intends to pay cash for all shares redeemed, but under abnormal
conditions which make payment in cash unwise, payment may be made wholly or
partly in fund securities with a market value equal to the redemption price. In
such cases, an investor may incur brokerage costs in converting such securities
to cash.
<PAGE>
VOTED: That SEI Financial Management Corporation be, and it hereby is, appointed
to serve as the Administrator of the Trust.
VOTED: That the form of the Administration Agreement presented to this
meeting be, and it hereby is, approved; and that the proper officers
of the Trust hereby are authorized to execute and deliver said
Agreement on behalf of the Trust; provided, however, that the
President or Secretary shall not execute and deliver said Agreement
unless said Agreement shall have been approved by a majority of the
outstanding units of beneficial interest of the Trust following the
initial issuance of such shares.
VOTED: The SEI Financial Management Corporation be, and it hereby is, appointed
to serve as the Transfer Agent of the Trust.
VOTED: That the form of the Transfer Agent Agreement presented to this
meeting be, and it hereby is, approved; and that the proper officers
of the Trust hereby are authorized to execute and deliver said
Agreement on behalf of the Trust.
VOTED: That SEI Financial Services Company be, and it hereby is, appointed to
serve as Distributor of units of beneficial interest of the Trust
under the terms and conditions set forth in the Distribution Agreement
presented to this meeting.
VOTED: That the form of Distribution Agreement presented to this meeting be,
and it hereby is, approved, and that the proper officers of the Trust
are hereby authorized to execute and deliver said Agreement on behalf
of the Trust.
VOTED: That the form of Distribution Plan for Class B presented to this
meeting be, and the same hereby is, approved.
FURTHER
VOTED: That the Distribution Plan for Class B be submitted to public
shareholders of Class B at the first meeting of Shareholders which
must be held within one year from the date shares of Class B are
initially issued.
Mr. Nesher then asked Mr. Grant to discuss with the Trustees various
organizational matters. Mr. Grant first asked for consideration of establishment
of the Trust's various
<PAGE>
VOTED: That the proposed Rule 18f-3 plan presented to this meeting be, and it
hereby is, approved as the Trust's Rule 18f-3 plan; and further
FURTHER
VOTED: That the proper officers of the Trust be and hereby are authorized to
take whatever actions are necessary to effectuate the plan.
VOTED: That the amended Code of Ethics presented to this meeting be, and it
hereby is, approved as the Code of Ethics of the Trust; and
FURTHER
VOTED: That the proper officers of the Trust be, and hereby are, authorized
to identify all access persons, as defined in the Code of Ethics, who
are under a duty to make reports to the Trust and to inform all
such persons of such duty.
Mr. Nesher asked Ms. Klass to discuss the insurance renewals proposed for
the Trust. Ms. Klass directed the Trustees' attention to the SEI memorandum
contained in the Board materials and the supplemental materials supplied by
SEI's insurance consultant. Ms. Klass explained that both the Trust's fidelity
bond and errors and omissions coverage was up for renewal. She explained that
the fidelity bond coverage was joint coverage for 28 different investment
companies for which SEI provided services, that the total amount of the bond was
$43 million, and that the bond was co-insured by four different carriers. She
responded to questions from the Trustees regarding the amount of additional
coverage and the decreased premium rate for the proposed coverage, and discussed
the allocation of premium to the Trust. Ms. Klass thereafter discussed the $25
million joint E&O policy. She explained that it was an aggregate policy and that
the Trust's share of the premium would be $7,000. Ms. Klass responded to
questions from Mr. Gustafson and members of the Board of Trustees regarding the
insurance. Discussion followed. Thereafter, upon motion duly made and seconded,
it was unanimously
VOTED: That the proper officers be, and they hereby are, authorized to execute,
with the advice of legal counsel to the Trust, a Joint Fidelity Bond
on behalf of the Trust with the other investment companies managed by
and/or affiliated with the Trust's Administrator; provided that the
allocation of the premium be in accordance with a formula under which
the Trust pays no more than its pro rata share of premium based on
relative asset size and, in any event, the Trust would pay no more
than the premiums of the individual policy and no more than the share
of the joint premiums based on the relative premiums which would apply
to individual policies taken by the Trust.
VOTED: That the proper officers of the Trust hereby are authorized to execute
and deliver an Agreement on behalf of the Trust regarding the
allocation of premiums for [and/the] share of recovery from the Joint
Fidelity Bond as required by Rule 17g-1(f) under the Investment
Company Act of 1940.
VOTED: That the officers of the Trust are hereby directed to:
(1) File with the Securities and Exchange Commission ("SEC")
within 10 days after execution of any fidelity bond or
amendment thereof (i) a copy of the bond, (ii) a copy of
each resolution of the Board of Trustees, including a
majority of the Trustees who are not "interested persons,"
approving the amount, type, form and coverage of each
such bond and the portion of the premium to be paid by
the Trust, (iii) a statement showing the amount the Trust
would have provided or maintained had it not been named
as an insured under a joint insured bond, (iv)
THE PILLAR FUNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of The Pillar Funds (the "Trust"), a business trust organized under the
laws of The Commonwealth of Massachusetts, hereby constitutes and appoints Kevin
P. Robins 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 the 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.
Date: 12/27/94
------------------------
/s/ David G. Lee
- ----------------------------------
David G. Lee
President and Chief
Executive Officer
<PAGE>
THE PILLAR FUNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of The Pillar Funds (the "Trust"), a business trust organized under the
laws of The Commonwealth of Massachusetts, hereby constitutes and appoints David
G. Lee and Kevin P. Robins, 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 the 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.
Date: 12/19/94
------------------------
/s/ Carmen V. Romeo
- ----------------------------------
Carmen V. Romeo
Treasurer and
Assistant Secretary
<PAGE>
THE PILLAR FUNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of The Pillar Funds (the "Trust"), a business trust organized under the
laws of The Commonwealth of Massachusetts, hereby constitutes and appoints David
G. Lee, Kevin P. Robins 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 the 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.
Date: 12/29/94
------------------------
/s/ Jean Young
- ----------------------------------
Jean Young
Controller and Assistant
Secretary
<PAGE>
THE PILLAR FUNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of The Pillar Funds (the "Trust"), a business trust organized under the
laws of The Commonwealth of Massachusetts, hereby constitutes and appoints David
G. Lee, Kevin P. Robins 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 the 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.
Date: 12/15/94
------------------------
/s/ Robert A. Nesher
- ----------------------------------
Robert A. Nesher
Trustee
<PAGE>
THE PILLAR FUNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of The Pillar Funds (the "Trust"), a business trust organized under the
laws of The Commonwealth of Massachusetts, hereby constitutes and appoints David
G. Lee, Kevin P. Robins 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 the 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.
Date: 12/14/94
------------------------
/s/ Pasquale Mazzarulli
- ----------------------------------
Pasquale Mazzarulli
Trustee
<PAGE>
THE PILLAR FUNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of The Pillar Funds (the "Trust"), a business trust organized under the
laws of The Commonwealth of Massachusetts, hereby constitutes and appoints David
G. Lee, Kevin P. Robins 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 the 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 reguisite 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.
Date: 12/14/94
------------------------
/s/ Ray Konrad
- ----------------------------------
Ray Konrad
Trustee
<PAGE>
THE PILLAR FUNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of The Pillar Funds (the "Trust"), a business trust organized under the
laws of The Commonwealth of Massachusetts, hereby constitutes and appoints David
G. Lee, Kevin P. Robins 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 the 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.
Date: 12/21/94
------------------------
/s/ Thomas Ehrhart
- ----------------------------------
Thomas Ehrhart
Trustee
THE PILLAR FUNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced fund (the "Trust"), a business trust organized
under the laws of The Commonwealth of Massachusetts, hereby constitutes and
appoints David G. Lee, Kevin P. Robins 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/ Arthur L. Berman Date: 10/6/95
______________________________ _________________
Arthur L. Berman
Trustee
THE PILLAR FUNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced fund (the "Trust"), a business trust organized
under the laws of The Commonwealth of Massachusetts, hereby constitutes and
appoints David G. Lee, Kevin P. Robins 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/ Christine H. Yackman Date: 10/7/96
_______________________ __________________
Christine H. Yackman
Trustee
THE PILLAR FUNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced fund (the "Trust"), a business trust organized
under the laws of The Commonwealth of Massachusetts, hereby constitutes and
appoints David G. Lee, Kevin P. Robins 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 B. Grecco Date: 9/30/96
_____________________ __________________
James B. Grecco
Trustee
