PILLAR FUNDS, 497, 1997-02-04

PILLAR FUNDS
497, 1997-02-04

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THE PILLAR FUNDS

SHORT-TERM INVESTMENT FUND
FIXED INCOME FUND
NEW JERSEY MUNICIPAL SECURITIES FUND
PENNSYLVANIA MUNICIPAL SECURITIES FUND
INTERMEDIATE-TERM GOVERNMENT SECURITIES FUND
GNMA FUND

CLASS A SHARES

Supplement dated January 28, 1997 to the Prospectus dated July 15, 1996

THE PROSPECTUS IS AMENDED AND SUPPLEMENTED TO REFLECT (i) A CHANGE IN THE FIXED
INCOME FUND'S INVESTMENT POLICIES AND (ii) THE ABILITY OF THE TRUSTEES OF THE
TRUST TO INVEST IN CLASS A SHARES OF THE FUNDS.

The third clause of the second paragraph on the cover of the Prospectus is
amended and supplemented as follows:

, (iii) to any Trustee of the Trust and (iv) to any qualified customer who
has entered into an agreement with Summit Bank, its affiliates or
correspondent banks ("Qualified Customers") (persons who own Class A Shares
of a Fund are referred to herein as "Shareholders").

The second paragraph under "The Fixed Income Fund" on page 7 of the
Prospectus is supplemented by adding the following sentence:

In addition, the Fund may invest in obligations subject to federal
income tax issued by or on behalf of states, territories and possessions of
the United States and the District of Columbia and their political
subdivisions, agencies and instrumentalities ("Taxable Municipal
Securities"), which are rated A or higher by an NRSRO or determined by the
Advisor to be of comparable quality.

The section "Purchase and Redemption of Shares" on page 13 of the
Prospectus is supplemented by adding the following paragraph:

The Trust may sell Class A shares of the Funds to the Trustees of the
Trust and their immediate families without regard to investment minimums.

The description of "Municipal Securities" on page 22 of the Prospectus is
supplemented by the following paragraph:

Taxable Municipal Securities: Taxable Municipal Securities are
Municipal Securities the interest on which is not exempt from federal
income tax. Taxable Municipal Securities include "private activity bonds"
that are issued by or on behalf of states or their political subdivisions
to finance privately-owned or operated facilities for business and
manufacturing, housing, sports, and pollution control and to finance
activities of, and facilities for, charitable institutions. Private
activity bonds are also used to finance public facilities such as airports,
mass transit systems, ports, parking lots and low income housing. The
payment of principal and interest on private activity bonds is not backed
by a pledge of tax revenues, and is dependent solely on the ability of the
facility's operator to meet its financial obligations, and may be secured
by a pledge of the financed real and/or personal property.

PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE

PIL-A-004-01

<PAGE>

THE PILLAR FUNDS

SHORT-TERM INVESTMENT FUND
FIXED INCOME FUND
NEW JERSEY MUNICIPAL SECURITIES FUND
PENNSYLVANIA MUNICIPAL SECURITIES FUND
INTERMEDIATE-TERM GOVERNMENT SECURITIES FUND
GNMA FUND

CLASS B SHARES

Supplement dated January 28, 1997 to the Prospectus dated July 15, 1996

THE PROSPECTUS IS AMENDED AND SUPPLEMENTED TO REFLECT A CHANGE IN THE FIXED
INCOME FUND'S INVESTMENT POLICIES.

The second paragraph under "The Fixed Income Fund" on page 8 of the
Prospectus is supplemented by adding the following sentence:

The description of "Municipal Securities" on page 24 of the Prospectus is
supplemented by the following paragraph:

PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE

PIL-A-007-03

<PAGE>

THE PILLAR FUNDS

EQUITY VALUE FUND
EQUITY INCOME FUND
MID CAP VALUE FUND
BALANCED GROWTH FUND
INTERNATIONAL GROWTH FUND

CLASS A SHARES

Supplement dated January 28, 1997 to the Prospectus dated July 15, 1996

THE PROSPECTUS IS AMENDED AND SUPPLEMENTED TO REFLECT THE ABILITY OF THE
TRUSTEES OF THE TRUST TO INVEST IN CLASS A SHARES OF THE FUNDS.

The third clause of the second paragraph on the cover of the Prospectus is
amended and supplemented as follows:

, (iii) to any Trustee of the Trust and (iv) to any qualified customer
who has entered into an agreement with Summit Bank, its affiliates or
correspondent banks ("Qualified Customers") (persons who own Class A Shares
of a Fund are referred to herein as "Shareholders").

The section "Purchase and Redemption of Shares" beginning on page 12 of the
Prospectus is supplemented by adding the following paragraph:

The Trust may sell Class A shares of the Funds to the Trustees of the
Trust and their immediate families without regard to investment minimums.

PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE

PIL-A-002-01

<PAGE>

THE PILLAR FUNDS
U.S. TREASURY SECURITIES MONEY MARKET FUND
PRIME OBLIGATION MONEY MARKET FUND
TAX-EXEMPT MONEY MARKET FUND

CLASS A SHARES

Supplement dated January 28, 1997 to the Prospectus dated July 15, 1996

THE PROSPECTUS IS AMENDED AND SUPPLEMENTED TO REFLECT THE ABILITY OF THE
TRUSTEES OF THE TRUST TO INVEST IN CLASS A SHARES OF THE FUNDS.

The third clause of the second paragraph on the cover of the Prospectus is
amended and supplemented as follows:

, (iii) to any Trustee of the Trust and (iv) to any qualified customer
who has entered into an agreement with Summit Bank, its affiliates or
correspondent banks ("Qualified Customers") (persons who own Class A Shares
of a Fund are referred to herein as "Shareholders").

The section "Purchase and Redemption of Shares" on page 8 of the Prospectus
is supplemented by adding the following paragraph:

The Trust may sell Class A shares of the Funds to the Trustees of the
Trust and their immediate families without regard to investment minimums.

PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE

PIL-A-003-06

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 GROWTH FUND

CLASS A

The Trust's Class A Shares are offered without distribution fees to:
(i) institutional investors (including Summit Bank, its affiliates and
correspondent banks) for the investment of their own funds; (ii) 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; (iii) any Trustee of the Trust; and (iv) 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 January 28, 1997, has been filed with the Securities and
Exchange Commission and is available without charge through the Distributor, SEI
Financial Services Company, Oaks, PA 19456 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.

January 28, 1997

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 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)

GROWTH
FUND
- ------------------------------------------------------------------------------------------------------------------
Advisory Fees (after fee waivers)(1).............................................................. .50%
Other Expenses(2)................................................................................. .30%
- ------------------------------------------------------------------------------------------------------------------
Total Operating Expenses (after fee waivers)(3)................................................... .80%
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
</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 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
- --------------------------------------------------------------------------------

1YR. 3 YRS.
- ----------------------------------------------------------------------------------------------------------------------------
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:
Growth Fund............................................................................................... $ 8 $ 26
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
</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 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, Oaks, Pennsylvania 19456 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 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 for cash management purposes:
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 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.

<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 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

<PAGE>
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 to:
(i) 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; (iii) any Trustee of the Trust; and (iv) 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.

The Trust may sell Class A shares of the Funds to the Trustees of the Trust and
their immediate families without regard to investment minimums.

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.

The Advisor, in addition to providing investment advice to the Trust, provides
investment advice to other clients. Some of these clients' funds are maintained
in asset allocation accounts and may be invested in the Funds. 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.

<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>

The Pillar Funds, the "Pillar" logo and Reach Higher are registered service
marks of Summit Bank. Pillar is a service mark of Summit Bank. Summit is a
registered service mark of Summit Bancorp. Summit Bank and Summit Bancorp are
service marks of Summit Bancorp.

<PAGE>

THE PILLAR FUNDS

Investment Advisor:
SUMMIT BANK INVESTMENT MANAGEMENT DIVISION,
A DIVISION OF SUMMIT BANK

O 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 January 28, 1997 has been filed with the Securities and
Exchange Commission and is available without charge through the Distributor, SEI
Financial Services Company, Oaks, PA 19456 or by calling 1-800-932-7782. The
Statement of Additional Information is incorporated into this Prospectus by
reference.

January 28, 1997
CLASS B

<PAGE>
2
SUMMARY

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."

EXPENSE SUMMARY

SHAREHOLDER TRANSACTION EXPENSES CLASS B
(As a percentage of offering price)

GROWTH
FUND
- ---------------------------------------------------------------------------------------------------------------------
<S> <C>
Maximum sales charge imposed on purchases............................................................... 4.00%
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>

ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)

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
- --------------------------------------------------------------------------------

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:
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 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, Oaks, Pennsylvania 19456 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 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.

To the extent that the Fund is not invested in equity securities, the Fund may
invest in the following fixed income securities for cash management purposes:
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 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

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.

PORTFOLIO TURNOVER

The portfolio turnover rate for the Fund is expected to be less than 100%.

INVESTMENT LIMITATIONS

<PAGE>
6

The Fund may not:

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

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

<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; and 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
to: (i) 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; (iii) any Trustee of the Trust; and (iv) any qualified customer who
has entered into an agreement with Summit Bank, its affiliates or correspondent
banks ("Qualified 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

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
- ------------ ------------- ----------------- ---------------
$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%

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 Bancorp. 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.

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.

<PAGE>
12

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 intends to make sufficient distributions prior to the end of each
calendar year to avoid liability for federal excise tax.

GENERAL INFORMATION

THE TRUST

<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 Advisor, in addition to providing investment advice to the Trust, provides
investment advice to other clients. Some of these clients' funds are maintained
in asset allocation accounts and may be invested in the Funds. 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

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

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.

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:

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.

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.

<PAGE>
16

Futures Trading Commission for sale to customers in the United States, on
foreign exchanges.

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.

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.

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.

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>

TABLE OF CONTENTS
- --------------------------------------------------------------------------------

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

<PAGE>

THE PILLAR FUNDS
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 January 28, 1997 relating to the Growth Fund (the "Fund").
Prospectuses may be obtained through the Distributor, SEI Financial Services
Company, Oaks, PA 19456, or by calling 1-800-932-7782.

TABLE OF CONTENTS

Investment Objective and Policies....................................... S-2
Description of Permitted Investments........................... S-2
Investment Limitations......................................... S-6
Management of the Trust ................................................ S-7
Trustees and Officers of the Trust............................. S-7
The Advisor.................................................... S-9
The Administrator.............................................. S-10
Fund Transactions....................................................... S-10
General ...................................................... S-10
Trading Practices and Brokerage................................ S-11
The Distributor and the Distribution Plans.............................. S-12
Performance............................................................. S-13
Calculation of Total Return.................................... S-13
Purchase and Redemption of Shares....................................... S-14
Shareholder Services.................................................... S-14
Determination of Net Asset Value........................................ S-15
General Information and History......................................... S-16
The Trust...................................................... S-16
Description of Shares.......................................... S-16
Shareholder Liability.......................................... S-16
Limitation of Trustees' Liability.............................. S-16
Taxes ............................................................... S-17
Experts ............................................................... S-18
Financial Statements.................................................... S-18
Appendix................................................................ A-1
Description of Ratings......................................... A-1

January 28, 1997

<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

S - 4

<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

S - 5

<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, Oaks, Pennsylvania 19456.

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).

S - 7

<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

S - 9

<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 Oaks, PA 19456. 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

S - 10

<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.

S - 12

<PAGE>

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

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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<PAGE>

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.

S - 14

<PAGE>

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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<PAGE>

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 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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<PAGE>

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

S - 17

<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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<PAGE>

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

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<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.
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