<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 27, 1996
FILE NO. 33-45671
FILE NO. 811-6557
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 / /
POST-EFFECTIVE AMENDMENT NO. 16 /X/
AND
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 / /
AMENDMENT NO. 18 /X/
STI CLASSIC FUNDS
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
2 OLIVER STREET
BOSTON, MASSACHUSETTS 02109
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE (800) 342-5734
DAVID G. LEE
C/O SEI CORPORATION
680 E. SWEDESFORD ROAD
WAYNE, PENNSYLVANIA 19087
(NAME AND ADDRESS OF AGENT FOR SERVICE)
Copies to:
RICHARD W. GRANT JOHN H. GRADY, JR.
MORGAN, LEWIS & BOCKIUS LLP MORGAN, LEWIS & BOCKIUS LLP
2000 ONE LOGAN SQUARE 1800 M STREET, N.W.
PHILADELPHIA, PA 19103 WASHINGTON, D.C. 20036
It is proposed that this filing will become effective (check appropriate box)
Immediately upon filing pursuant to paragraph (b), or
- ---
On [DATE] pursuant to paragraph (b), or
- ---
60 days after filing pursuant to paragraph (a) or
- ---
X 75 days after filing pursuant to paragraph (a) or
- ---
On [DATE] pursuant to paragraph (a) of Rule 485.
- ---
Pursuant to the provisions of Rule 24f-2 under the Investment Company Act of
1940, an indefinite number of units of beneficial interest is
being registered by this Registration Statement. Registrant has filed a Rule
24f-2 Notice on July 29, 1996 for its fiscal year ended May
31, 1996.
<PAGE>
STI CLASSIC FUNDS
POST-EFFECTIVE AMENDMENT #16
CROSS REFERENCE SHEET
N-1A ITEM NO. LOCATION
- --------------------------------------------------------------------------------
PART A - ALL FUNDS
Item 1. Cover Page Cover Page
Item 2. Synopsis *
Item 3. Condensed Financial Information *
Item 4. General Description of Registrant Funds and Investment
Objectives; Investment
Policies and Strategies;
General Investment Policies
and Strategies; Investment
Risks; Investment Limitations;
Appendix
Item 5. Management of the Fund Board of Trustees; Investment
Advisor; Distribution;
Administration
Item 6. Capital Stock and Other Securities Voting Rights; Shareholder
Inquiries; Dividends and
Distributions; Tax Information
Item 7. Purchase of Securities Being Offered Cover Page; Purchase of Fund
Shares; Redemption of Fund
Shares
Item 8. Redemption or Repurchase Purchase of Fund Shares;
Redemption of Fund Shares;
Distribution
Item 9. Pending Legal Proceedings *
PART B - ALL FUNDS
Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information and History The Trust
Item 13. Investment Objectives and Policies Description of Permitted
Investments; Investment
Limitations
Item 14. Management of the Registrant Trustees and Officers of the
Trust; The Administrator
Item 15. Control Persons and Principal Trustees and Officers of the
Holders of Securities Trust
Item 16. Investment Advisory and Other Investment Advisor; The
Administrator; Services
The Distributor; Legal Counsel
(Prospectus); Independent
Auditors (Prospectus); Experts
Item 17. Brokerage Allocation Fund Transactions
Item 18. Capital Stock and Other Securities Description of Shares
Item 19. Purchase, Redemption, and Pricing of Purchase and Redemption of
Shares;
Securities Being Offered Determination of Net Asset
Value
Item 20. Tax Status Taxes
Item 21. Underwriters The Distributor
Item 22. Calculation of Yield Quotations Computation of Yield;
Calculation of Total Return
Item 23. Financial Statements Financial Information
<PAGE>
THE INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO, AMONG OTHER THINGS, THIS PROSPECTUS HAS BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. SECURITIES OF THE PORTFOLIO
REFERENCED IN THIS PROSPECTUS MAY NOT BE SOLD NOR MAY OFFERS TO BUY SUCH
SECURITIES BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF SECURITIES
REFERENCED HEREIN IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD
BE UNLAWFUL PRIOR TO SUCH REGISTRATION OR QUALIFICATION UNDER THE SECURITIES
LAWS OF ANY SUCH STATE.
<PAGE>
CLASSIC INSTITUTIONAL CASH MANAGEMENT MONEY MARKET FUND
CLASSIC INSTITUTIONAL U.S. TREASURY SECURITIES
MONEY MARKET FUND
INVESTMENT ADVISOR TO THE FUNDS:
TRUSCO CAPITAL MANAGEMENT, INC.
The STI Classic Funds (the "Trust") is a mutual fund that offers shares in a
number of separate investment portfolios. This Prospectus sets forth concisely
the information about the Shares of the Classic Institutional Cash Management
Money Market Fund and the Classic Institutional U.S. Treasury Securities Money
Market Fund (each a "Fund" and, together, the "Institutional Money Market
Funds"). THE CLASSIC INSTITUTIONAL U.S. TREASURY SECURITIES MONEY MARKET FUND
SEEKS TO MANAGE ITS INVESTMENTS IN A MANNER CONSISTENT WITH THE CRITERIA FOR
OBTAINING AN AAA RATING BY MOODY'S INVESTORS SERVICE AND/OR AN AAA RATING BY
STANDARD & POOR'S CORPORATION. Investors are advised to read this Prospectus and
retain it for future reference.
A Statement of Additional Information relating to the Funds dated the same
date as this Prospectus has been filed with the Securities and Exchange
Commission and is available without charge through the Distributor, SEI
Financial Services Company, 680 East Swedesford Road, Wayne, Pennsylvania
19087-1658 or by calling 1-800-428-6970. 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.
AN INVESTMENT IN A MONEY MARKET FUND IS NEITHER INSURED NOR GUARANTEED BY
THE U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT A MONEY MARKET FUND WILL BE
ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
THE TRUST'S SHARES ARE NOT SPONSORED, ENDORSED, OR GUARANTEED BY, AND DO NOT
CONSTITUTE OBLIGATIONS OR DEPOSITS OF, THE ADVISOR OR ANY OF ITS AFFILIATES OR
CORRESPONDENTS INCLUDING SUNTRUST BANKS, INC., ARE NOT GUARANTEED OR INSURED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY
OTHER GOVERNMENTAL AGENCY, AND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE
LOSS OF THE PRINCIPAL AMOUNT INVESTED.
, 1996
<PAGE>
2
(THIS PAGE INTENTIONALLY LEFT BLANK)
<PAGE>
3
No person has been authorized to give any information or to make any
representations not contained in this Prospectus, or in the Trust's Statement of
Additional Information in connection with the offering made by this Prospectus
and, if given or made, such information or representations must not be relied
upon as having been authorized by the Trust or SEI Financial Services Company
(the "Distributor"). This Prospectus does not constitute an offering by the
Trust or by the Distributor in any jurisdiction in which such offering may not
lawfully be made.
Shares of the Institutional Money Market Funds are offered primarily to various
types of institutional investors ("Shareholders"), including SunTrust Banks,
Inc. and its affiliates and correspondents, for the investment of funds for
which they act in a fiduciary, agency, investment advisory or custodial
capacity.
TABLE OF CONTENTS
<TABLE>
<S> <C>
Expense Summary...................... 4
The Trust............................ 5
Funds and Investment Objectives...... 5
Investment Policies and Strategies... 5
General Investment Policies and
Strategies.......................... 6
Investment Risks..................... 6
Investment Limitations............... 7
Performance Information.............. 8
Purchase of Fund Shares.............. 8
Redemption of Fund Shares............ 9
Dividends and Distributions.......... 9
Tax Information...................... 10
STI Classic Funds Information........ 11
The Trust............................ 11
Board of Trustees.................... 11
Investment Advisor................... 11
Banking Laws......................... 12
Distribution......................... 12
Administration....................... 13
Transfer Agent and Dividend
Disbursing Agent.................... 13
Custodian............................ 13
Legal Counsel........................ 13
Independent Public Accountants....... 13
Other Information.................... 13
Voting Rights........................ 13
Reporting............................ 13
Shareholder Inquiries................ 14
Description of Permitted
Investments......................... 14
Appendix............................. A-1
</TABLE>
<PAGE>
4
EXPENSE SUMMARY
Below is a summary of the estimated annual operating expenses for Shares of each
Institutional Money Market Fund. A hypothetical example based on the summary is
also shown. Actual expenses may vary.
ANNUAL OPERATING EXPENSES
(as a percentage of average net assets)
<TABLE>
<CAPTION>
CLASSIC INSTITUTIONAL CLASSIC INSTITUTIONAL
CASH MANAGEMENT U.S. TREASURY SECURITIES
MONEY MARKET FUND MONEY MARKET FUND
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
Advisory Fees (After Voluntary Reductions)(1)...................... .05 % .05 %
All Other Expenses (After Voluntary Reductions)(2)................. .15 % .15 %
- ---------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses (After Voluntary Reductions)(3)........... .20 % .20 %
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Advisor is waiving, on a voluntary basis, a portion of its fee from each
Fund. The Advisor reserves the right to terminate its waiver at any time in
its sole discretion. Absent such waivers and reimbursements, Advisory Fees
for the Funds would be as follows: Classic Institutional Cash Management
Money Market Fund--.20%, Classic Institutional U.S. Treasury Securities
Money Market Fund-- .20%. See "Investment Advisors." A person that purchases
shares through an account with a financial institution may be charged
separate fees by the financial institution.
(2) Other Expenses are based on estimated amounts for the current fiscal year.
(3) Absent the voluntary waivers described above, Total Operating Expenses for
the Funds would be as follows: Classic Institutional Cash Management Money
Market Fund--.35%, Classic Institutional U.S. Treasury Securities Money
Market Fund--.35%.
<TABLE>
<CAPTION>
CLASSIC INSTITUTIONAL CLASSIC INSTITUTIONAL
CASH MANAGEMENT U.S. TREASURY SECURITIES
MONEY MARKET FUND MONEY MARKET FUND
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
An investor 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:
One Year....................................................... $ 2 $ 2
Three Years.................................................... 6 6
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE EXAMPLE IS BASED UPON THE ESTIMATED TOTAL OPERATING EXPENSES OF A FUND AND
SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL
EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. The purpose of this table is
to assist the investor in understanding the various costs and expenses that may
be directly or indirectly borne by investors in the Trust.
<PAGE>
5
THE TRUST
STI CLASSIC FUNDS (the "Trust") is a diversified, open-end management investment
company that provides a convenient and economical means of investing in several
professionally managed portfolios of securities. The Trust currently offers
units of beneficial interest ("shares") in a number of separate Funds. This
Prospectus relates to the Institutional Money Market Funds described below.
FUNDS AND INVESTMENT OBJECTIVES
THE CLASSIC INSTITUTIONAL CASH MANAGEMENT MONEY MARKET FUND seeks to provide as
high a level of current income as is consistent with preservation of capital and
liquidity by investing exclusively in high quality money market instruments
issued by corporations and the U.S. Government.
THE CLASSIC INSTITUTIONAL U.S. TREASURY SECURITIES MONEY MARKET FUND seeks to
provide as high a level of current income as is consistent with preservation of
capital and liquidity by investing exclusively in bills, notes and bonds issued
by the U.S. Treasury and repurchase agreements ("U.S. Treasury obligations")
with approved dealers collateralized by U.S. Treasury obligations.
It is a fundamental policy of each Institutional Money Market Fund to use its
best efforts to maintain a constant net asset value of $1.00 per share. There
can be no assurance that either Fund will achieve its investment objective or
maintain a net asset value of $1.00 per share on a continuous basis.
Each Institutional Money Market Fund intends to comply with federal regulations
applicable to money market funds using the amortized cost method for calculating
net asset value, which require each Fund to invest only in U.S. dollar
denominated obligations, to maintain an average maturity on a dollar-weighted
basis of 90 days or less and to acquire eligible securities that present minimal
credit risk and have a maturity of 397 days or less. The Classic Institutional
U.S. Treasury Securities Money Market Fund seeks to manage its investments in a
manner consistent with the criteria for obtaining an Aaa rating by Moody's
Investors Service ("Moody's") and/or an AAA rating by Standard & Poor's
Corporation ("S&P"). These requirements will also limit a Institutional Money
Market Fund's ability to generate high current income. For a further discussion
of these rules, see "Description of Permitted Investments."
INVESTMENT POLICIES AND STRATEGIES
CLASSIC INSTITUTIONAL CASH MANAGEMENT MONEY MARKET FUND
The Classic Institutional Cash Management Money Market Fund will invest in money
market instruments denominated in U.S. dollars consisting of (i) U.S. Treasury
obligations; (ii) receipts; (iii) obligations issued or guaranteed as to
principal and interest by agencies and instrumentalities of the U.S. Government;
(iv) commercial paper issued by domestic and foreign issuers rated in the
highest short-term rating category by one or more nationally recognized
statistical rating organizations (an "NRSRO") as described in the "Appendix" or,
if not rated, determined by the Advisor to be of comparable quality; (v) high
quality obligations (including certificates of deposit, time deposits, bankers'
acceptances, Eurodollar and Yankee bank obligations) of U.S. commercial banks
(including foreign branches of such banks), and U.S. and London branches of
foreign banks or savings and loan and thrift institutions that are members of
the Federal Reserve System, the
<PAGE>
6
Federal Deposit Insurance Corporation, or savings and loan associations; (vi)
high quality short-term corporate obligations issued by companies with
commercial paper meeting the ratings indicated in (iv), above, or, if not rated,
determined by the Advisor to be of comparable quality; (vii) repurchase
agreements involving such obligations; (viii) high quality obligations of
supranational entities satisfying the credit ratings described in (iv), above,
or, if not rated, determined by the Advisor to be of comparable quality; (ix)
high quality medium term notes; (x) municipal securities; (xi) mortgage-backed
securities and (xii) asset-backed securities. The Fund may not invest more than
25% of its total assets in obligations issued by foreign branches of U.S. banks
and London branches of foreign banks. The Fund may purchase securities subject
to standby commitments. The Fund may also purchase restricted securities. As a
money market fund, the Fund is subject to limitations on the percentage of its
assets that may be invested in any one issuer and on the percentage that may be
invested in securities carrying the second highest rating assigned by the
requisite NRSROs.
CLASSIC INSTITUTIONAL U.S. TREASURY SECURITIES MONEY MARKET FUND
The U.S. Treasury Securities Money Market Fund will invest exclusively in U.S.
Treasury obligations and any repurchase agreements with dealers will be selected
pursuant to guidelines adopted by the Trust's Board of Trustees and
collateralized by U.S. Treasury obligations.
The Fund, however, seeks to invest exclusively in securities that would qualify
to be rated in the highest ratings category of an NRSRO such as S&P or Moody's.
As a result, the Fund's ability to maintain an average dollar-weighted portfolio
maturity to the maximum extent permitted by Rule 2a-7 will be limited, and the
Fund's performance may be affected adversely.
GENERAL INVESTMENT POLICIES AND STRATEGIES
In the event that a security owned by a Fund is downgraded below the stated
rating categories, the Advisor will review and take appropriate action with
regard to the security.
Each of the Funds may engage in securities lending and will limit such practice
to 33 1/3% of its total assets. No Fund may purchase additional securities while
its outstanding borrowings exceed 5% of its assets.
It is a non-fundamental policy of each Fund to invest no more than 10% of its
net assets in illiquid securities. An illiquid security is a security which
cannot be disposed of in the usual course of business within seven days at a
price approximating its carrying value. Rule 144A securities and Section 4(2)
commercial paper that meet the criteria established by the Board of Trustees of
the Trust may be considered liquid.
For additional information regarding permitted investments, see "Description of
Permitted Investments" in this Prospectus and in the Statement of Additional
Information.
INVESTMENT RISKS
FOREIGN SECURITIES
Investing in the securities of foreign companies involves special risks and
considerations not typically associated with investing in U.S. companies. These
risks and considerations include differences in accounting, auditing and
financial reporting standards, generally higher commission rates on foreign
portfolio transactions, the possibility of expropriation or
<PAGE>
7
confiscatory taxation, adverse changes in investment or exchange control
regulations, political instability which could affect U.S. investment in foreign
countries and potential restrictions of the flow of international capital and
currencies. Foreign companies may also be subject to less government regulation
than U.S. companies. Moreover, the dividends payable on the foreign securities
may be subject to foreign withholding taxes, thus reducing the net amount of
income available for distribution to the Fund's Shareholders. Foreign securities
often trade with less frequency and volume than domestic securities and,
therefore, may exhibit greater price volatility.
GOVERNMENT SECURITIES
Guarantees of a Fund's securities by the U.S. Government, its agencies or
instrumentalities guarantee only the payment of principal and interest on the
guaranteed securities, and do not guarantee the securities' yield or value or
the yield or value of a Fund's shares.
MORTGAGE-BACKED SECURITIES
Mortgage-backed securities are subject to the risk of prepayment of the
underlying mortgages. During periods of declining interest rates, prepayment of
mortgages underlying these securities can be expected to accelerate. When the
mortgage-backed securities held by a Fund are prepaid, the Fund generally will
reinvest the proceeds in securities with a yield that reflects prevailing
interest rates, which may be lower than the prepaid security.
ZERO COUPON OBLIGATIONS
Each Fund, may invest, subject to its investment objective and policies, in zero
coupon obligations. Zero coupon obligations are sold at original issue discount
and do not make periodic payments. Zero coupon obligations may be subject to
greater fluctuations in value due to interest rate changes than interest bearing
obligations. A Fund will be required to include the imputed interest in zero
coupon obligations in its current income. Because each Fund distributes all of
its net investment income to Shareholders, the Fund may have to sell portfolio
securities to distribute the income attributable to these obligations and
securities at a time when the Advisor would not have chosen to sell such
obligations or securities.
INVESTMENT LIMITATIONS
The following investment limitations constitute fundamental policies of each
Fund. Fundamental policies cannot be changed with respect to a Fund 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 a
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 a
Fund's outstanding shares, whichever is less.
Each Fund may not:
1. Purchase securities of any issuer (except securities issued or guaranteed by
the United States, its agencies or instrumentalities and repurchase agreements
involving such securities) if as a result more than 5% of the total assets of a
Fund would be invested in the securities of such issuer; provided, however, that
a Fund may invest up to 25% of its assets in "first tier" securities of a single
issuer for a period of up to three business days.
2. Purchase any securities which would cause more than 25% of the total assets
of a Fund to be invested in the securities of one or more
<PAGE>
8
issuers conducting their principal business activities in the same industry,
provided that this limitation does not apply to investments in obligations
issued or guaranteed by the U.S. Government, its agencies and instrumentalities,
repurchase agreements involving such securities and, with respect to only the
Institutional Cash Management Money Market Fund, obligations issued by domestic
branches of U.S. banks or U.S. branches of foreign banks subject to the same
regulations as U.S. banks. For purposes of this limitation, (i) utility
companies will be divided 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; and (iii)
supranational entities will be considered to be a separate industry.
The foregoing percentages will apply at the time of the purchase of a security.
Additional investment limitations are set forth in the Statement of Additional
Information.
PERFORMANCE INFORMATION
From time to time each Institutional Money Market Fund may advertise its
"current yield" and "effective yield." Both yield figures are based on
historical earnings and are not intended to indicate future performance. The
"current yield" of a Fund refers to the income generated by an investment in the
Fund over a seven-day period (which period will be stated in the advertisement).
This income is then "annualized." That is, the amount of income generated by the
investment during that week is assumed to be generated each week over a 52-week
period and is shown as a percentage of the investment. The "effective yield" is
calculated similarly but, when annualized, the income earned by an investment in
a Fund is assumed to be reinvested. The "effective yield" will be slightly
higher than the "current yield" because of the compounding effect of this
assumed reinvestment.
PURCHASE OF FUND SHARES
Shares of the Fund are sold primarily to various types of institutional
investors, including subsidiaries of SunTrust Banks, Inc. ("SunTrust"), for the
investment of funds for which they act in a fiduciary, agency, investment
advisory or custodial capacity. Individuals may not purchase Shares directly,
although individuals may be able to purchase Trust Shares through accounts
maintained with various types of institutional investors. Shares are sold
without a sales charge, although the institutional investors may charge their
customer accounts for services provided in connection with the purchase of
shares. The minimum initial investment is $10,000,000. The institutional
investors may impose an earlier cut-off time for receipt of purchase orders
directed through them to allow for processing and transmittal of the reorders to
the Federated Services Company (the "Transfer Agent") for effectiveness the same
day. Information concerning these services and any charges will be provided to
customers by the institutional investors. Shares will be held of record by the
institutional investors, although customers may have or be given the right to
vote the shares depending upon the terms of their relationship with the
institutional investor. Confirmations of share purchases and redemptions will be
sent to the institutional investor as the shareholder of record.
Shares may be purchased on days on which the New York Stock Exchange is open for
business (a "Business Day"). However, shares
<PAGE>
9
cannot be purchased or redeemed for same day settlement on days the Federal
Reserve is closed.
Purchase orders for the Funds will be effective as of the Business Day received
by the Transfer Agent and eligible to receive dividends declared the same day if
the Transfer Agent receives the order before 1:00 p.m. Eastern time, and the
Custodian receives federal funds before 4:00 p.m. Eastern time on such day.
Otherwise, purchase orders for the Funds will be effective the next Business Day
provided the Custodian receives readily available funds before 4:00 p.m. Eastern
time on the next such Business Day. The purchase price is the net asset value
per share next computed after the order is received and accepted by the Trust.
The net asset value per share is calculated as of the close of business of the
New York Stock Exchange (currently 4:00 p.m. Eastern time) each Business Day
based on the amortized cost method described in the Statement of Additional
Information and is expected to remain constant at $1.00 per share.
The Trust reserves the right to reject a purchase order when the Distributor
determines that it is not in the best interest of the Trust and/or
Shareholder(s).
Neither the Trust's Transfer Agent nor the Trust will be responsible for any
loss, liability, cost or expense for acting upon telephone or wire instructions
reasonably believed to be genuine. The Trust maintains procedures, including
identification methods and other means, for ascertaining the identity of callers
and authenticity of instructions.
Shares of the Funds are offered only to residents of states in which the shares
are eligible for purchase. Investors in certain states may be required to
purchase shares through institutions registered as brokers/dealers in such
states.
REDEMPTION OF FUND SHARES
An order to redeem shares must be transmitted to the Transfer Agent by the
institutional investor as the record owner of Shares. Institutional investors
may establish procedures for their customers to request redemption of Shares
held in their account with the institutional investor. Customers should contact
their institutional investor for information concerning these procedures.
Redemption orders must be received by the Transfer Agent on a Business Day
before 1:00 p.m. Eastern time. Redemption orders received after the time noted
above will be executed the following day. The Trust reserves the right to wire
redemption proceeds within five Business Days after receiving the redemption
orders if, in the judgment of the Advisor, an earlier payment could adversely
impact a Fund.
The Trust 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 liquid portfolio securities with a market value equal to the
redemption price. In such circumstances, an investor may incur brokerage costs
in converting such securities to cash.
DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (exclusive of capital gains) of each of the
Institutional Money Market Funds are declared on each Business Day to
Shareholders at the close of business on the day of declaration. Net income for
dividend purposes consists of (i) interest accrued and original issue discount
earned on the Fund's assets, (ii) plus the amortization of market discount and
minus the amortization of market premium on such assets, (iii) less accrued
expenses directly
<PAGE>
10
attributable to the Fund and the general expenses of the Trust prorated to the
Fund on the basis of its relative net assets. Shares begin earning dividends on
the Business Day the purchase order is effective and continue earning dividends
through and including the Business Day before the redemption order is effective.
Dividends are paid within ten Business Days after the end of each month in the
form of additional Shares of the same Fund unless the Shareholder has elected
prior to the date of distribution to receive payment in cash. Such election, or
any revocation thereof, must be made in writing at least 15 days prior to the
date of distribution to the Transfer Agent and will become effective with
respect to dividends paid after its receipt. Dividends are paid within ten
Business Days after a Shareholder's complete redemption of its Shares in a Fund.
TAX INFORMATION
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 each Fund or
its Shareholders. Accordingly, Shareholders are urged to consult their tax
advisors regarding specific questions as to federal, state and local income
taxes.
TAX STATUS OF EACH FUND
Each Fund is treated as a separate entity for federal tax purposes, and is not
combined with the Trust's other Funds. Each Fund intends to qualify for the
special tax treatment afforded regulated investment companies by the Internal
Revenue Code of 1986, as amended (the "Code"), so that it will be relieved of
federal income tax on that part of its net investment income and net capital
gains (the excess of long-term capital gains over net short-term capital loss)
which is distributed to Shareholders. Each Fund intends to make sufficient
distributions prior to the end of each calendar year to avoid liability for the
federal excise tax applicable to regulated investment companies.
TAX STATUS OF DISTRIBUTIONS
The Institutional Money Market Funds will each distribute all of their net
investment income (including, for this purpose, net short-term capital gains) to
Shareholders. Dividends from net investment income will be taxable to
Shareholders as ordinary income whether received in cash or in additional
shares. Each Fund will make annual reports to Shareholders of the federal income
tax status of all distributions. Dividends declared by a Fund in October,
November or December of any year and payable to Shareholders of record on a date
in that month will be deemed to have been paid by the Fund and received by the
Shareholders on December 31, of that year, if paid by the Fund any time during
the following January.
Income received on direct U.S. obligations is exempt from tax at the state level
when received directly by a Fund and may be exempt, depending on the state, when
received by a Shareholder provided certain state specific conditions are
satisfied. Not all states permit such income dividends to be tax-exempt and some
require that a certain minimum percentage of an investment company's income be
derived from state tax-exempt interest. Each Fund will inform Shareholders
annually of the percentage of income and distributions derived from direct U.S.
obligations. Shareholders should consult their tax advisors to determine whether
any portion
<PAGE>
11
of the income dividends received from a Fund is considered tax exempt in their
particular states.
A sale, exchange or redemption of Fund shares is a taxable event to the
Shareholder.
STI CLASSIC FUNDS INFORMATION
THE TRUST
The Trust was organized as a Massachusetts Business Trust under a Declaration of
Trust dated January 15, 1992. The Declaration of Trust permits the Trust to
offer separate portfolios of shares and different classes of each 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 Share-
holders, costs of custodial services and registering the shares under federal
and state securities laws, pricing, insurance expenses, litigation and other
extraordinary expenses, brokerage costs, interest charges, taxes and
organization expenses.
BOARD OF TRUSTEES
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 below, certain
companies provide essential management services to the Trust.
INVESTMENT ADVISOR
Trusco Capital Management, Inc. ("Trusco") serves as the Advisor to the
Institutional Money Market Funds. As of June 30, 1996, Trusco had approximately
$13.7 billion in assets under management. The principal business address of
Trusco is 50 Hurt Plaza, Suite 1400, Atlanta, Georgia 30303.
The Advisor is an indirect wholly-owned subsidiary of SunTrust Banks, Inc.
("SunTrust"), a southeastern regional bank holding company with assets of $66
billion as of December 31, 1995. SunTrust ranks among the twenty largest U.S.
banking companies. Its three principal subsidiaries-- SunTrust Banks of Florida,
Inc., SunTrust Banks of Georgia, Inc. and SunTrust Banks of Tennessee,
Inc.--provide a wide range of personal and corporate banking, trust, and
investment services through more than 600 locations in the three-state area.
Total discretionary assets under management with SunTrust Banks, Inc. equalled
approximately $47 billion as of December 31, 1995.
The Trust and the Advisor have entered into an advisory agreement (the "Advisory
Agreement"). Under the Advisory Agreement, the Advisor makes the investment
decisions for the assets of the Funds and continuously reviews, supervises and
administers each Fund's investment program. The Advisor discharges its
responsibilities subject to the supervision of, and policies established by, the
Trustees of the Trust. STI CLASSIC FUNDS ARE NOT DEPOSITS, ARE NOT INSURED OR
GUARANTEED BY THE FDIC OR ANY OTHER GOVERNMENT AGENCY, AND ARE NOT ENDORSED OR
GUARANTEED BY AND DO NOT CONSTITUTE OBLIGATIONS OF SUNTRUST BANKS, INC. OR ANY
OF ITS AFFILIATES. INVESTMENTS IN THE FUNDS INVOLVE RISK, INCLUDING THE POSSIBLE
LOSS OF PRINCIPAL. RETURNS AND PRINCIPAL VALUES WILL FLUCTUATE AND SHARES AT
REDEMPTION MAY BE
<PAGE>
12
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THERE IS NO GUARANTEE THAT ANY STI
CLASSIC FUND WILL ACHIEVE ITS INVESTMENT OBJECTIVE. With respect to each Fund,
the Advisor may execute brokerage or other agency transactions through
affiliates of the Advisor.
For the services provided and expenses incurred pursuant to the Advisory
Agreement: Trusco is entitled to receive advisory fees computed daily and paid
monthly at the annual rate of .20% of the average daily net assets of each Fund.
From time to time, the Advisor may waive (either voluntarily or pursuant to
applicable state limitations) advisory fees payable by a Fund. Currently, the
Advisor has agreed to voluntary reductions in its fees in amounts necessary to
maintain the total operating expenses at the amounts set forth in the Expense
Summary. Voluntary reductions of fees may be terminated at anytime.
BANKING LAWS
Banking laws and regulations, including the Glass-Steagall Act as presently
interpreted by the Board of Governors of the Federal Reserve System, currently
(a) prohibit a bank holding company registered under the Federal Bank Holding
Company Act of 1956 or its affiliates from sponsoring, organizing, controlling,
or distributing the shares of a registered, open-end investment company
continuously engaged in the issuance of its shares, and generally prohibit banks
from underwriting securities, but (b) do not prohibit such a bank holding
company or affiliate or banks generally from acting as an investment advisor,
transfer agent, or custodian to such an investment company or from purchasing
shares of such a company as agent for and upon the order of a customer. The
Advisor believes that it may perform the services for STI Classic Funds
contemplated by its Advisory Agreement described in this Prospectus without
violation of applicable banking laws or regulations. However, future changes in
legal requirements relating to the permissible activities of banks and their
affiliates, as well as future interpretations of present requirements, could
prevent the Advisor from continuing to perform services for the Funds. If the
Advisor was prohibited from providing services to the Funds, the Board of
Trustees would consider selecting another qualified firm. Any new investment
advisory agreements would be subject to Shareholder approval.
If current restrictions preventing a bank or its affiliates from legally
sponsoring, organizing, controlling, or distributing shares of an investment
company were relaxed, the Advisor, or its affiliates, would consider the
possibility of offering to perform additional services for STI Classic Funds. It
is not possible, of course, to predict whether or in what form such legislation
might be enacted or the terms upon which the Advisor, or such affiliates, might
offer to provide such services.
In addition, state securities laws on this issue may differ from the
interpretations of federal law expressed herein and banks and financial
institutions may be required to register as dealers pursuant to state law.
DISTRIBUTION
SEI Financial Services Company (the "Distributor"), a wholly-owned subsidiary of
SEI Corporation ("SEI"), and the Trust are parties to a distribution agreement
(the "Distribution Agreement"). No compensation is paid to the Distributor for
distribution services. Shares of the Fund are offered primarily to institutional
investors, including affiliates and
<PAGE>
13
correspondents for the investment of funds in which they act in a fiduciary,
agency or custodial capacity.
Each Fund may execute brokerage or other agency transactions through the
Distributor for which the Distributor receives compensation.
ADMINISTRATION
SEI Fund Resources (the "Administrator") serves as Administrator to the Trust.
The Administrator provides the Trust with certain administrative services, other
than investment advisory services, including regulatory reporting, all necessary
office space, equipment, personnel, and facilities.
The Administrator is entitled to a fee, which is calculated daily and paid
monthly, at an annual rate as follows:
<TABLE>
<CAPTION>
AVERAGE AGGREGATE DAILY NET ASSETS FEE
- --------------------------------------------- ---------
<S> <C>
$1 - $1 billion .10%
over $1 billion to $5 billion .07%
over $5 billion to $8 billion .05%
over $8 billion to $10 billion .045%
over $10 billion .04%
</TABLE>
From time to time, the Administrator may waive (either voluntarily or pursuant
to applicable state limitations) all or a portion of the administration fee
payable with respect to a Fund.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Federated Services Company, Federated Investors Tower, Pittsburgh, Pennsylvania
15222-3779 is the transfer agent for the shares of the Trust and dividend
disbursing agent for the Trust.
CUSTODIAN
SunTrust Bank, Atlanta, c/o STI Trust & Investment Operations, Inc., 303
Peachtree Street N.E., 14th Floor, Atlanta, Georgia 30308 serves as custodian of
the assets of each Fund. The custodian holds cash, securities and other assets
of the Funds as required by the Investment Company Act of 1940.
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP, Philadelphia, Pennsylvania, serves as legal counsel
to the Trust.
INDEPENDENT PUBLIC ACCOUNTANTS
The independent public accountants to the Trust are Arthur Andersen, LLP,
Philadelphia, Pennsylvania.
OTHER INFORMATION
VOTING RIGHTS
Each share held entitles the Shareholder of record to one vote. Each Fund or
class of a Fund 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 and audited financial
statements annually. The Trust furnishes proxy statements and other reports to
Shareholders of record.
<PAGE>
14
SHAREHOLDER INQUIRIES
Shareholders may contact their financial institution's representative in order
to obtain information on account statements, procedures and other related
information.
DESCRIPTION OF PERMITTED INVESTMENTS
The following is a description of the permitted investments for the Funds.
Further discussion is contained in the Statement of Additional Information.
ASSET-BACKED SECURITIES -- Asset-backed securities are securities secured by
non-mortgage assets such as company receivables, truck and auto loans, leases
and credit card receivables. Such securities are generally issued as
pass-through certificates, which represent undivided fractional ownership
interests in the underlying pools of assets. Such securities also may be debt
instruments, which are also known as collateralized obligations and are
generally issued as the debt of a special purpose entity, such as a trust,
organized solely for the purpose of owning such assets and issuing such debt.
Asset-backed securities are not issued or guaranteed by the U.S. Government or
its agencies or instrumentalities, however, the payment of principal and
interest on such obligations may be guaranteed up to certain amounts and for a
certain 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.
The purchase of asset-backed securities raises risk considerations peculiar to
the financing of the instruments underlying such securities. For example, 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. There also is
the possibility that recoveries on repossessed collateral may not, in some
cases, be available to support payments on those securities. 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. In addition, credit card receivables are unsecured
obligations of the card holder.
The market for asset-backed securities is at a relatively early stage of
development. Accordingly, there may be a limited secondary market for such
securities.
BANKERS' ACCEPTANCES -- Bankers' acceptances are bills of exchange or time
drafts drawn on and accepted by a commercial bank. Bankers' acceptances are used
by corporations to finance the shipment and storage of goods. Maturities are
generally six months or less.
CERTIFICATES OF DEPOSIT -- Certificates of deposit are interest bearing
instruments with a specific maturity. They are issued by banks and savings and
loan institutions in exchange for the deposit of funds and normally can be
traded in the secondary market prior to maturity. Certificates of deposit with
penalties for early withdrawal will be considered illiquid.
COMMERCIAL PAPER -- Commercial paper is a term used to describe unsecured
short-term promissory notes issued by banks, municipalities, corporations and
other entities. Maturities on these issues vary from a few to 270 days.
CUSTODIAL RECEIPTS -- Custodial receipts are interests in separately traded
interest and principal component parts of U.S. Treasury obligations that are
issued by banks or brokerage firms and are created by depositing U.S. Treasury
obligations into a special account
<PAGE>
15
at a custodian bank. The custodian holds the interest and principal payments for
the benefit of the registered owners of the certificates or receipts. The
custodian arranges for the issuance of the certificates or receipts evidencing
ownership and maintains the register. Receipts include Treasury Receipts
("TRs"), Treasury Investment Growth Receipts ("TIGRs"), and Certificates of
Accrual on Treasury Securities ("CATS").
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. See "Zero Coupon Obligations."
EURODOLLAR AND YANKEE BANK OBLIGATIONS -- Eurodollar bank obligations are U.S.
dollar-denominated certificates of deposit or time deposits issued outside the
United States by foreign branches of U.S. banks or by foreign banks. Yankee bank
obligations are U.S. dollar denominated obligations issued in the United States
by foreign banks.
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. An illiquid security includes a demand
instrument with a demand notice period exceeding seven days, where there is no
secondary market for such security, and repurchase agreements with durations (or
maturities) over seven days in length.
MEDIUM TERM NOTES -- Medium term notes are periodically or continuously offered
corporate or agency debt that differs from traditionally underwritten corporate
bonds only in the process by which they are issued.
MORTGAGE-BACKED SECURITIES -- Mortgage-backed securities are instruments that
entitle the holder to a share of all interest and principal payments from
mortgages underlying the security. The mortgages backing these securities
include conventional thirty-year fixed rate mortgages, graduated payment
mortgages, and adjustable rate mortgages. During periods of declining interest
rates, prepayment of mortgages underlying mortgage-backed securities can be
expected to accelerate. Prepayment of mortgages which underlie securities
purchased at a premium often results in capital losses, while prepayment of
mortgages purchased at a discount often results in capital gains. Because of
these unpredictable prepayment characteristics, it is often not possible to
predict accurately the average life or realized yield of a particular issue.
GOVERNMENT PASS-THROUGH SECURITIES: These are securities that are issued or
guaranteed by a U.S. Government agency representing an interest in a pool of
mortgage loans. The primary issuers or guarantors of these mortgage-backed
securities are GNMA, FNMA and FHLMC. FNMA and FHLMC obligations are not backed
by the full faith and credit of the U.S. Government as GNMA certificates are,
but FNMA and FHLMC securities are supported by the instrumentalities' right to
borrow from the U.S. Treasury. GNMA, FNMA and FHLMC each guarantees timely
distributions of interest to certificate holders. GNMA and FNMA also each
guarantees timely distributions of scheduled principal. FHLMC has in the past
guaranteed only the ultimate collection of principal of the underlying mortgage
loan; however, FHLMC
<PAGE>
16
now issues mortgage-backed securities (FHLMC Gold PCs) which also guarantee
timely payment of monthly principal reductions. Government and private
guarantees do not extend to the securities' value, which is likely to vary
inversely with fluctuations in interest rates.
COLLATERALIZED MORTGAGE OBLIGATIONS ("CMOS"): CMOs are debt obligations or
multiclass pass-through certificates issued by agencies or instrumentalities of
the U.S. Government or by private originators or investors in mortgage loans. In
a CMO, series of bonds or certificates are usually issued in multiple classes.
Principal and interest paid on the underlying mortgage assets may be allocated
among the several classes of a series of a CMO in a variety of ways. Each class
of a CMO, often referred to as a "tranche," is issued with a specific fixed or
floating coupon rate and has a stated maturity or final distribution date.
Principal payments on the underlying mortgage assets may cause CMOs to be
retired substantially earlier than their stated maturities or final distribution
dates, resulting in a loss of all or part of any premium paid.
REMICS: A REMIC is a CMO that qualifies for special tax treatment under the
Internal Revenue Code and investes in certain mortgages principally secured by
interests in real property. Investors may purchase beneficial interests in
REMICs, which are known as "regular" interests, or "residual" interests.
Guaranteed REMIC pass-through certificates ("REMIC Certificates") issued by FNMA
or FHLMC represent beneficial ownership interests in a REMIC trust consisting
principally of mortgage loans or FNMA, FHLMC or GNMA-guaranteed mortgage
pass-through certificates. For FHLMC REMIC Certificates, FHLMC guarantees the
timely payment of interest, and also guarantees the payment of principal as
payments are required to be made on the underlying mortgage participation
certificates. FNMA REMIC Certificates are issued and guaranteed as to timely
distribution of principal and interest by FNMA.
MUNICIPAL SECURITIES -- Municipal securities consist of (i) debt obligations
issued by or on behalf of public authorities to obtain funds to be used for
various public facilities, for refunding outstanding obligations, for general
operating expenses, and for lending such funds to other public institutions and
facilities, and (ii) certain private activity and industrial development bonds
issued by or on behalf of public authorities to obtain funds to provide for the
construction, equipment, repair or improvement of privately operated facilities.
Municipal securities include both municipal notes and municipal bonds. Municipal
notes include general obligation notes, tax-exempt commercial paper tax
anticipation notes, revenue anticipation notes, bond anticipation notes,
certificates of indebtedness, demand notes and construction loan notes and
participation interests in municipal notes. Municipal bonds include general
obligation bonds, revenue or special obligation bonds, private activity and
industrial development bonds and participation interests in municipal bonds.
General obligation bonds are backed by the taxing power of the issuing
municipality. Revenue bonds are backed by the revenues of a project or facility
(tolls from a bridge, for example). Certificates of participation represent an
interest in an underlying obligation or commitment, such as an obligation issued
in connection with a leasing arrangement. The payment of principal and interest
on private activity and industrial development bonds generally is dependent
solely on the ability of a facility's user to meet its financial obligations and
the pledge, if any, of real and personal property as security for such payment.
<PAGE>
17
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 political subdivisions thereof 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 the 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 user to meet its financial obligations, and may be secured by
a pledge of real and personal property so financed. Interest on these bonds may
not be exempt from federal income tax.
OBLIGATIONS OF SUPRANATIONAL ENTITIES -- Supranational entities are entities
established through the joint participation of several governments, and include
the Asian Development Bank, Inter-American Development Bank, International Bank
for Reconstruction and Development (World Bank), African Development Bank,
European Economic Community, European Investment Bank and Nordic Investment
Bank.
REPURCHASE AGREEMENTS -- Repurchase agreements are agreements by which a 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 custodian will hold the security as collateral
for the repurchase agreement. A Fund bears a risk of loss in the event the other
party defaults on its obligations and the Fund is delayed or prevented from
exercising its right to dispose of the collateral or if the Fund realizes a loss
on the sale of the collateral. A 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 Investment Company Act of 1940.
RESTRAINTS ON INVESTMENTS BY MONEY MARKET FUNDS -- Investments by a money market
fund are subject to limitations imposed under regulations adopted by the
Securities and Exchange Commission. Under these regulations, money market funds
may only acquire obligations that present minimal credit risk and that are
"eligible securities," which means they are (i) rated, at the time of
investment, by at least two NRSROS organizations (one if it is the only
organization rating such obligation) in the highest rating category or, if
unrated, determined to be of comparable quality (a "first tier security"), or
(ii) rated according to the foregoing criteria in the second highest rating
category or, if unrated, determined to be of comparable quality ("second tier
security"). A security is not considered to be unrated if its issuer has
outstanding obligations of comparable priority and securities that have a
short-term rating. In the case of taxable money market funds, investments in
second tier securities are subject to the further constraints in that (i) no
more than 5% of a Fund's assets may be invested in second tier securities and
(ii) any investment in securities of any one such issuer is limited to the
greater of 1% of the Fund's total assets or $1 million. A taxable money market
fund may also hold more than 5% of its assets in first tier securities of a
single issuer for three "business days" (that is, any day other than a Saturday,
Sunday or customary business holiday).
RESTRICTED SECURITIES -- Restricted securities are securities that may not be
sold freely to the public absent registration under the
<PAGE>
18
Securities Act of 1933 or an exemption from registration. Rule 144A securities
are securities that have not been registered under the Securities Act of 1933
but which may be traded between certain institutional investors including
investment companies. The Trust's Board of Trustees is responsible for
developing guidelines and procedures for determining the liquidity of restricted
securities, and for monitoring the Advisor's implementation of the guidelines
and procedures.
SECURITIES LENDING -- In order to generate additional income, a Fund may lend
securities which it owns pursuant to agreements requiring that the loan be
continuously secured by collateral consisting of cash, securities of the U.S.
Government or its agencies equal to at least 100% of the market value of the
securities lent. A Fund continues to receive interest on the securities lent
while simultaneously earning interest on the investment of cash collateral.
Collateral is marked to market daily. There may be risks of delay in recovery of
the securities or even loss of rights in the collateral should the borrower of
the securities fail financially or become insolvent.
STANDBY COMMITMENTS AND PUTS -- Securities subject to standby commitments or
puts permit the holder thereof to sell the securities at a fixed price prior to
maturity. Securities subject to a standby commitment or put may be sold at any
time at the current market price. However, unless the standby commitment or put
was an integral part of the security as originally issued, it may not be
marketable or assignable; therefore, the standby commitment or put would only
have value to the Fund owning the security to which it relates. In certain
cases, a premium may be paid for a standby commitment or put, which premium will
have the effect of reducing the yield otherwise payable on the underlying
security. The Fund will limit standby commitment or put transactions to
institutions believed to present minimal credit risk.
TIME DEPOSITS -- Time deposits are non-negotiable receipts issued by a bank in
exchange for the deposit of funds. Like a certificate of deposit, it earns a
specified rate of interest over a definite period of time; however, it cannot be
traded in the secondary market. Time deposits are considered to be illiquid
securities.
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 securities), others are supported by the right of the
issuer to borrow from the Treasury (e.g., Federal Farm Credit Bank securities),
while still others are supported only by the credit of the instrumentality
(e.g., Federal National Mortgage Association securities). Guarantees of
principal by agencies or instrumentalities of the U.S. Government may be a
guarantee of payment at the maturity of the obligation so that in the event of a
default prior to maturity there might not be a market and thus no means of
realizing on the obligation prior to maturity. Guarantees as to the timely
payment of principal and interest do not extend to the value or yield of these
securities nor to the value of the Fund's shares.
U.S. TREASURY OBLIGATIONS -- U.S. Treasury obligations consist of bills, notes
and bonds issued by the U.S. Treasury and
<PAGE>
19
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") and Coupon Under
Book Entry Safekeeping ("CUBES").
VARIABLE AND FLOATING RATE INSTRUMENTS -- Certain obligations may carry variable
or floating rates of interest, and may involve a conditional or unconditional
demand feature. Such instruments bear interest at rates which are not fixed, but
which vary with changes in specified market rates or indices. The interest rates
on these securities may be reset daily, weekly, quarterly or some other reset
period, and may have a floor or ceiling on interest rate changes. There is a
risk that the current interest rate on such obligations may not accurately
reflect existing market interest rates. A demand instrument with a demand notice
exceeding seven days may be considered illiquid if there is no secondary market
for such security.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES -- When-issued or delayed delivery
basis transactions involve the purchase of an instrument with payment and
delivery taking place in the future. Delivery of and payment for these
securities may occur a month or more after the date of the purchase commitment.
A Fund will segregate liquid high grade debt securities or cash in an amount at
least equal to these commitments. The interest rate realized on these securities
is fixed as of the purchase date and no interest accrues to the Fund before
settlement. These securities are subject to market fluctuation due to changes in
market interest rates and it is possible that the market value at the time of
settlement could be higher or lower than the purchase price if the general level
of interest rates has changed. Although a Fund generally purchases securities on
a when-issued or forward commitment basis with the intention of actually
acquiring securities for its portfolio, a Fund may dispose of a when-issued
security or forward commitment prior to settlement if it deems appropriate.
ZERO COUPON OBLIGATIONS -- Zero coupon obligations are debt securities that do
not bear any interest, but instead are issued at a deep discount from par. The
value of a zero coupon obligation increases over time to reflect the interest
accreted. Such obligations will not result in the payment of interest until
maturity, and will have greater price volatility than similar securities that
are issued at par and pay interest periodically.
<PAGE>
A-1
APPENDIX
X. COMMERCIAL PAPER AND SHORT-TERM RATINGS
The following descriptions of commercial paper ratings have been published by
Standard & Poor's Corporation ("S&P"), Moody's Investors Services, Inc.
("Moody's"), Fitch Investors Service, Inc. ("Fitch"), Duff and Phelps ("Duff")
and IBCA Limited ("IBCA"), respectively.
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+ and 1. 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 reflect a safety regarding timely
payment but not as high as A-1.
Commercial paper issues rated Prime-1 and Prime-2 by Moody's are judged by
Moody's to have superior ability and strong ability for repayment, respectively.
The rating Fitch-1 (Highest Grade) is the highest commercial rating assigned by
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. 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. Obligations rated A2 are supported
by a strong capacity for timely repayment, although such capacity may be
susceptible to adverse changes in business, economic or financial conditions.
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
<PAGE>
<TABLE>
<S> <C> <C>
STI CLASSIC FUNDS ORGANIZATIONAL OVERVIEW
* INVESTMENT ADVISOR
Trusco Capital Management, Inc. 50 Hurt Plaza
Suite 1400
Atlanta, GA 30303
* DISTRIBUTOR
SEI Financial Services Company 680 E. Swedesford Road
Wayne, PA 19087
* ADMINISTRATOR
SEI Fund Resources 680 E. Swedesford Road
Wayne, PA 19087
* TRANSFER AGENT
Federated Services Company Federated Investors Tower
Pittsburgh, PA 15222-3779
* CUSTODIAN
SunTrust Bank, Atlanta c/o STI Trust & Investment
Operations, Inc.
303 Peachtree Street N.E.
14th Floor
Atlanta, GA 30308
* LEGAL COUNSEL
Morgan, Lewis & Bockius LLP 2000 One Logan Square
Philadelphia, PA 19103
* INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen, LLP 1601 Market Street
Philadelphia, PA 19103
</TABLE>
<PAGE>
DISTRIBUTOR
SEI Financial Services
Company
PROSPECTUS
CLASSIC INSTITUTIONAL
CASH MANAGEMENT
MONEY MARKET FUND
CLASSIC INSTITUTIONAL
U.S. TREASURY SECURITIES
MONEY MARKET FUND
INVESTMENT ADVISOR
TRUSCO CAPITAL MANAGEMENT, INC.
1996
[LOGO]
<PAGE>
PART C
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this Registration Statement.
* Not applicable
<PAGE>
STI CLASSIC FUNDS
INVESTMENT ADVISOR:
TRUSCO CAPITAL MANAGEMENT, INC.
This Statement of Additional Information is not a prospectus. It is intended to
provide additional information regarding the activities and operations of the
Trust and should be read in conjunction with the Trust's Classic Institutional
Cash Management and Classic Institutional U.S. Treasury Securities Money Market
Fund prospectus dated ________________, 1996. The Prospectus may be obtained
through the Distributor, SEI Financial Services Company, 680 E. Swedesford Road,
Wayne, Pennsylvania 19087-1658.
TABLE OF CONTENTS
PAGE
THE TRUST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-
DESCRIPTION OF PERMITTED INVESTMENTS . . . . . . . . . . . . . . . . . . . . B-
INVESTMENT LIMITATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . B-
INVESTMENT ADVISORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-
THE ADMINISTRATOR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-
THE DISTRIBUTOR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-
TRUSTEES AND OFFICERS OF THE TRUST . . . . . . . . . . . . . . . . . . . . . B-
ADVERTISING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-
CALCULATION OF TOTAL RETURN. . . . . . . . . . . . . . . . . . . . . . . . . B-
PURCHASE AND REDEMPTION OF SHARES. . . . . . . . . . . . . . . . . . . . . . B-
DETERMINATION OF NET ASSET VALUE . . . . . . . . . . . . . . . . . . . . . . B-
TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-
FUND TRANSACTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-
TRADING PRACTICES AND BROKERAGE. . . . . . . . . . . . . . . . . . . . . . . B-
DESCRIPTION OF SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . . . B-
SHAREHOLDER LIABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . B-
LIMITATION OF TRUSTEES' LIABILITY. . . . . . . . . . . . . . . . . . . . . . B-
EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-
, 1996
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THE TRUST
STI Classic Funds (the "Trust") is a diversified, open-end management investment
company established under Massachusetts law as a Massachusetts business trust
under a Declaration of Trust dated January 15, 1992. The Declaration of Trust
permits the Trust to offer separate series ("Funds") of units of beneficial
interest ("shares") and different classes of shares of each Fund. This
Statement of Additional Information relates to the Trust's Classic Institutional
Cash Management Money Market Fund and Classic Institutional U.S. Treasury
Securities Money Market Fund (collectively, the "Funds"), each of which
currently offers one class of shares.
DESCRIPTION OF PERMITTED INVESTMENTS
FOREIGN SECURITIES
The Institutional Cash Management Money Market Fund may invest in U.S. dollar
denominated obligations or securities of foreign issuers. Possible investments
include equity securities of foreign entities, obligations of foreign branches
of U.S. banks and of foreign banks, including, without limitation, European
Certificates of Deposit, European Time Deposits, European Bankers' Acceptances,
Canadian Time Deposits and Yankee Certificates of Deposit, and investments in
Canadian Commercial Paper, and foreign securities. Permissible investments may
consist of obligations of foreign branches of U.S. banks and of foreign banks,
including European Certificates of Deposit, European Time Deposits, Canadian
Time Deposits and Yankee Certificates of Deposits, Canadian Commercial Paper and
Europaper. These instruments may subject the Fund to investment risks that
differ in some respects from those related to investments in obligations of U.S.
domestic issuers. Such risks include future adverse political and economic
developments, the possible imposition of withholding taxes on interest or other
income, possible seizure, nationalization, or expropriation of foreign deposits,
the possible establishment of exchange controls or taxation at the source,
greater fluctuations in value due to changes in exchange rates, or the adoption
of other foreign governmental restrictions which might adversely affect the
payment of principal and interest on such obligations. Such investments may
also entail higher custodial fees and sales commissions than domestic
investments. Foreign issuers of securities or obligations are often subject to
accounting treatment and engage in business practices different from those
respecting domestic issuers of similar securities or obligations. Foreign
branches of U.S. banks and foreign banks may be subject to less stringent
reserve requirements than those applicable to domestic branches of U.S. banks.
INVESTMENT COMPANY SHARES
Investment companies typically incur fees that are separate from those fees
incurred directly by the Funds. A Fund's purchase of such investment company
securities results in the layering of expenses, such that Shareholders would
indirectly bear a proportionate share of the operating expenses of such
investment companies, including advisory fees.
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MUNICIPAL SECURITIES
The Funds may invest in municipal securities. The two principal
classifications of municipal securities are "general obligation" and
"revenue" issues. General obligation issues are issues involving the credit
of an issuer possessing taxing power and are payable from the issuer's
general unrestricted revenues, although the characteristics and method of
enforcement of general obligation issues may vary according to the law
applicable to the particular issue. Revenue issues are payable only from the
revenues derived from a particular facility or class of facilities or other
specific revenue source. A Fund may also invest in "moral obligation" issues,
which are normally issued by special purpose authorities. Moral obligation
issues are not backed by the full faith and credit of the state and are
generally backed by the agreement of the issuing authority to request
appropriations from the state legislative body. Municipal securiries include
debt obligations issued by governmental entities to obtain funds for various
public purposes, such as the construction of a wide range of public
facilities, the refunding of outstanding obligations, the payment of general
operating expenses, and the extension of loans to other public institutions
and facilities. Certain private activity bonds that are issued by or on
behalf of public authorities to finance various privately-owned or operated
facilites are included within the term "Municipal Securities." Private
activity bonds are industrial development bonds are generally revenue bonds,
the credit and quality of which are directly related to the credit of the
private user of the facilities.
Municipal securities may also include general obligation notes, tax
anticipation notes, bond anticipation notes, revenue anticipation notes,
project notes, certificates of indebtedness, demand notes, tax-exempt
commercial paper, construction loan notes and other forms of short-term,
tax-exempt loans. Such instruments are issued with a short-term maturity in
anticipation of the receipt of fax funds, the proceeds of bond placements or
other revenues. Project notes are issued by a state or local housing agency
and are sold by the Department of Housing and Urban Development. While the
issuing agency has the primary obligation with respect to its project notes,
thay are also secured by the full faith and credit of the United States
through agreements with the issuing authority which provide that, if
required, the federal government will end the issuer an amount equal to the
principal of and interest on the project notes.
The quality of municipal securities, both within a particular classification
and between classifications, will vary, and the yields on municipal
securities depend upon a variety of factors, including general money market
conditions, the financial condition of the issuer (or other entity whose
financial resources are supporting the securities), general conditions of the
municipal bond market, the size of a particular offering, the maturity of the
obligation and the rating(s) of the issue. In this regard, it should be
emphasized that the ratings of any NRSRO are general and are not absolute
standards of quality. Municipal securities with the same maturity, interest
rate and rating(s) may have different yields, while municipal securities of
the same maturity and interest rate with different rating(s) may have the
same yield.
An issuer's obligations under its municipal securities are subject to the
provisions of bankruptcy, insolvency, and other laws affecting the rights and
remedies of creditors, such as the Federal Bankruptcy Code, and laws, if any,
which may be enacted by Congress or state legislatures extending the time for
payment of principal or interest, or both, or imposing other constraints upon
the enforcement of such
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obligations or upon the ability of municipalities to levy taxes. The power or
ability of an issuer to meet its obligations for the payment of interest on
and principal of its municipal securities may be materially adversely
affected by litigation or other conditions.
MUNICIPAL NOTE RATINGS: Moody's highest rating for state and municipal and
other short-term notes is MIG-1 and VMIG-1. Short-term municipal securities
rated MIG-1 or VMIG-1 are of the best quality. They have strong protection
from established cash flows of funds for their servicing or from established
and broad-based access to the market for refinancing or both. Short-term
municipal securities rated MIG-2 and VMIG-2 are of high quality. Margins of
protection are ample although not so large as in the preceding group.
An S&P note rating reflects the liquidity concerns and market access risks
unique to notes. Notes due in 3 years or less will likely receive a long-term
debt rating. The following criteria will be used in making that assessment.
- Amortization schedule (the larger the final maturity relative to
other maturities the more likely it will be treated as a note).
- Source of payment (the more dependent the issue is on the market
for its refinancing, the more likely it will be treated as a note).
Note rate symbols are as follows:
SP-1. Very strong or strong capacity to pay principal and interest. Those
issues determined to possess overwhelming safety characteristics will be
given a plus (+) designation.
SP-2. Satisfactory capacity to pay principal and interest.
OBLIGATIONS OF SUPRANATIONAL AGENCIES
The Institutional Cash Management Money Market Fund may purchase obligations of
supranational agencies. Currently the Fund intends to invest only in
obligations issued or guaranteed by the Asian Development Bank, Inter-American
Development Bank, International Bank for Reconstruction and Development (World
Bank), African Development Bank, European Coal and Steel Community, European
Economic Community, European Investment Bank and the Nordic Investment Bank.
OTHER INVESTMENTS
The Trust is not prohibited from investing in obligations of banks which are
clients of SEI Corporation ("SEI"), the parent company of the Administrator and
the Distributor. However, the purchase of shares of the Trust by such banks or
by their customers will not be a consideration in determining which bank
obligations the Trust will purchase. The Trust will not purchase obligations
issued by the Advisor.
REPURCHASE AGREEMENTS
Each Fund may enter into repurchase agreements. Repurchase agreements are
agreements by which a person (e.g., a Fund) obtains a security and
simultaneously commits to return the security to the seller (a primary
securities dealer as recognized by the Federal Reserve Bank of New York or a
national member bank as defined in Section 3(d)(1) of the Federal Deposit
Insurance Act, as amended) 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 a Fund for purposes of its
investment limitations. The repurchase agreements entered into by a 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 a Fund, the Custodian or its agent must take possession of the underlying
collateral. However, if the seller defaults, a Fund could realize a loss on the
sale of the underlying security to the extent that the proceeds of the sale
including accrued interest are less than the resale price provided in the
agreement including interest. In addition, even though the Bankruptcy Code
provides protection for most repurchase agreements, if the seller should be
involved in bankruptcy or insolvency proceedings, a Fund may incur delay and
costs in selling the underlying security or may suffer a loss of principal and
interest if a Fund is treated as an unsecured creditor and required to return
the underlying security to the seller's estate.
RESTRICTED SECURITIES
Restricted securities are securities that may not be sold to the public without
registration under the Securities Act of 1933 (the "1933 Act") absent an
exemption from registration. Permitted investments for the Funds include
restricted securities, and each Fund may invest up to 10% of its total
assets in
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illiquid securities, subject to each Fund's investment limitations on the
purchase of illiquid securities. Restricted securities, including securities
eligible for re-sale under 1933 Act Rule 144A, that are determined to be
liquid are not subject to this limitation. This determination is to be made
by the Fund's Advisor pursuant to guidelines adopted by the Board of
Trustees. Under these guidelines, the Advisor will consider the frequency
of trades and quotes for the security, the number of dealers in, and
potential purchasers for, the securities, dealer undertakings to make a
market in the security, and the nature of the security and of the marketplace
trades. In purchasing such Restricted Securities, the Advisor intends to
purchase securities that are exempt from registration under Rule 144A under
the 1933 Act.
SECURITIES LENDING
The Funds may lend securities pursuant to agreements which require that the
loans be continuously secured by collateral at all times equal to 100% of the
market value of the loaned securities which consists of cash, securities of the
U.S. Government or its agencies, or any combination of cash and such securities.
Such loans will not be made if, as a result, the aggregate amount of all
outstanding securities loans for a Fund exceed one-third of the value of the
Fund's total assets taken at fair market value. A Fund will continue to receive
interest on the securities lent while simultaneously earning interest on the
investment of the cash collateral in U.S. Government securities. However, a
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 Funds may use the Distributor or a broker-dealer
affiliate of the Advisor as a broker in these transactions.
STANDBY COMMITMENTS AND PUTS
The Institutional Cash Management Money Market Fund may purchase securities at a
price which would result in a yield-to-maturity lower than that generally
offered by the seller at the time of purchase when it can simultaneously acquire
the right to sell the securities back to the seller, the issuer, or a third
party (the "writer") at an agreed-upon price at any time during a stated period
or on a certain date. Such a right is generally denoted as a "standby
commitment" or a "put." The purpose of engaging in transactions involving puts
is to maintain flexibility and liquidity to permit the Fund to meet redemptions
and remain as fully invested as possible in municipal securities. The Fund
reserves the right to engage in put transactions. The right to put the
securities depends on the writer's ability to pay for the securities at the time
the put is exercised. The Institutional Cash Management Money Market Fund would
limit its put transactions to institutions which the Advisor believes present
minimal credit risks, and the Advisor would use its best efforts to initially
determine and continue to monitor the financial
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strength of the sellers of the options by evaluating their financial statements
and such other information as is available in the marketplace. It may, however
be difficult to monitor the financial strength of the writers because adequate
current financial information may not be available. In the event that any
writer is unable to honor a put for financial reasons, the Fund would be a
general creditor (I.E., on a parity with all other unsecured creditors) of the
writer. Furthermore, particular provisions of the contract between the Fund and
the writer may excuse the writer from repurchasing the securities; for example,
a change in the published rating of the underlying securities or any similar
event that has an adverse effect on the issuer's credit or a provision in the
contract that the put will not be exercised except in certain special cases, for
example, to maintain portfolio liquidity. The Fund could, however, at any time
sell the underlying portfolio security in the open market or wait until the
portfolio security matures, at which time it should realize the full par value
of the security.
The securities purchased subject to a put may be sold to third persons at any
time, even though the put is outstanding, but the put itself, unless it is an
integral part of the security as originally issued, may not be marketable or
otherwise assignable. Therefore, the put would have value only to the Fund.
Sale of the securities to third parties or lapse of time with the put
unexercised may terminate the right to put the securities. Prior to the
expiration of any put option, the Fund could seek to negotiate terms for the
extension of such an option. If such a renewal cannot be negotiated on terms
satisfactory to the Fund, the Fund could, of course, sell the portfolio
security. The maturity of the underlying security will generally be different
from that of the put. There will be no limit to the percentage of portfolio
securities that the Fund may purchase subject to a standby commitment or put,
but the amount paid directly or indirectly for all standby commitments or puts
which are not integral parts of the security as originally issued held in the
Fund will not exceed 1/2 of 1% of the value of its total assets of such Fund
calculated immediately after any such put is acquired.
STRIPS
Each Fund may invest in Separately Traded Interest and Principal Securities
("STRIPS"), which are component parts of U.S. Treasury Securities traded through
the Federal Book-Entry System. The Advisor will only purchase STRIPS that it
determines are liquid or, if illiquid, do not violate each Fund's investment
policy concerning investments in illiquid securities. Consistent with Rule 2a-7
under the Investment Company Act of 1940, as amended, (the "1940 Act"), the
Advisor will only purchase STRIPS for the Funds that have a remaining maturity
of 397 days or less; therefore, the Funds currently may only purchase interest
component parts of U.S. Treasury Securities. While there is no limitation on
the percentage of a Fund's assets that may be comprised of STRIPS, the Advisor
will monitor the level of such holdings to avoid the risk of impairing
Shareholders' redemption rights and of deviations in the value of shares of the
Funds.
U.S. GOVERNMENT AGENCY SECURITIES
Certain investments of the Institutional Cash Management Money Market Fund may
include U.S. Government Agency Securities. Agencies of the United States
Government which issue obligations consist of, among others, the Export Import
Bank of the United States, Farmers Home Administration, Federal Farm Credit
Bank, Federal Housing Administration, Government National Mortgage Association
("GNMA"), Maritime Administration, Small Business Administration, and The
Tennessee
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Valley Authority. Obligations of instrumentalities of the United States
Government include securities issued by, among others, Federal Home Loan Banks,
Federal Home Loan Mortgage Corporation ("FHLMC"), Federal Intermediate Credit
Banks, Federal Land Banks, Federal National Mortgage Association ("FNMA") and
the United States Postal Service as well as government trust certificates. Some
of these securities are supported by the full faith and credit of the United
States Treasury (E.G., GNMA securities), others are supported by the right of
the issuer to borrow from the Treasury and still others are supported only by
the credit of the instrumentality (E.G., FNMA securities). Guarantees of
principal by agencies or instrumentalities of the U.S. Government may be a
guarantee of payment at the maturity of the obligation so that in the event of a
default prior to maturity there might not be a market and thus no means of
realizing the value of the obligation prior to maturity.
VARIABLE RATE MASTER DEMAND NOTES
The Institutional Cash Management Money Market Fund may invest in variable rate
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 Fund, 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 and it is not generally contemplated that such instruments
will be traded. The quality of the note or the underlying credit must, in the
opinion of the Advisor, be equivalent to the ratings applicable to permitted
investments for the Fund. The Advisor will monitor on an ongoing basis the
earning power, cash flow and liquidity ratios of the issuers of such instruments
and will similarly monitor the ability of an issuer of a demand instrument to
pay principal and interest on demand.
INVESTMENT LIMITATIONS
The following are fundamental policies of each Fund and cannot be changed with
respect to a Fund without the consent of the holders of a majority of a Fund's
outstanding shares.
A Fund may not:
1. Acquire more than 10% of the voting securities of any one issuer.
2. Invest in companies for the purpose of exercising control.
3. Borrow money except for temporary or emergency purposes and then only in an
amount not exceeding one-third 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
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an extent that the asset coverage of such borrowings shall be at least
300%. This borrowing provision is included solely to facilitate the
orderly sale of portfolio securities to accommodate heavy redemption
requests if they should occur and is not for investment purposes. All
borrowings in excess of 5% of the value of a Fund's total assets will be
repaid before making additional investments and any interest paid on such
borrowings will reduce income.
4. Make loans, except that (a) a Fund may purchase or hold debt instruments in
accordance with its investment objective and policies; (b) a Fund may enter
into repurchase agreements, and (c) a Fund may engage in securities lending
as described in the Prospectus and in this Statement of Additional
Information.
5. Pledge, mortgage or hypothecate assets except to secure temporary
borrowings permitted by (3) above in aggregate amounts not to exceed 10% of
the Fund's total assets, taken at current value at the time of the
incurrence of such loan, except as permitted with respect to securities
lending.
6. Purchase or sell real estate, real estate limited partnership interests,
commodities or commodities contracts and interests in a pool of securities
that are secured by interests in real estate. However, subject to their
permitted investment spectrum, any Fund may invest in companies which
invest in real estate commodities or commodities contracts.
7. Make short sales of securities, maintain a short position or purchase
securities on margin, except that the Trust may obtain short-term credits
as necessary for the clearance of security transactions.
8. Act as an underwriter of securities of other issuers except as it may be
deemed an underwriter in selling a security.
9. Purchase securities of other investment companies except for money market
funds and CMOs and REMICs deemed to be investment companies and then only
as permitted by the 1940 Act and the rules and regulations thereunder.
Under these rules and regulations, a 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 assets of a Fund; or securities (other than treasury
stock) issued by all investment companies represent more than 10% of the
total assets of the Fund.
10. 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 SEC.
NON-FUNDAMENTAL POLICIES
No Fund may 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
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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.
No Fund may invest in warrants.
No Fund may hold illiquid securities in an amount exceeding, in the aggregate,
10% of a Fund's assets. An illiquid security is a security which cannot be
disposed of promptly (within seven days), and in the usual course of business
without a loss, and includes repurchase agreements maturing in excess of seven
days, time deposits with a withdrawal penalty, non-negotiable instruments and
instruments for which no market exists.
No Fund may invest in interests in oil, gas or other mineral exploration or
development programs and oil, gas or mineral leases.
No Fund may write or purchase puts, calls, options or combinations thereof. The
Institutional Cash Management Money Market Fund may purchase putable securities.
No Fund may invest in securities of issuers which together with predecessors
have a record of less than three years continuous operation or equity securities
of issuers which are not readily marketable if such investments will exceed 5%
of the Fund's total assets.
The foregoing percentages, except with respect to holding illiquid securities,
will apply at the time of the purchase of a security and shall not be considered
violated unless an excess occurs or exists immediately after and as a result of
a purchase of such security.
INVESTMENT ADVISOR
The Trust and Trusco Capital Management, Inc. (the "Advisor") have entered into
an advisory agreement with the Trust (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 Advisory Agreements provide that if, for any fiscal year, the ratio of
expenses of a Fund (including amounts payable to the Advisor but excluding
interest, taxes, brokerage, litigation, and other extraordinary expenses)
exceeds limitations established by certain states, the Advisor and/or the
Administrator will bear the amount of such excess. The Advisor will not be
required to bear expenses of the Trust to an extent which would result in a
Fund's inability to qualify as a regulated investment company under provisions
of the Internal Revenue Code.
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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 each
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 Funds, by a majority of the outstanding shares of the Funds, 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 ADMINISTRATOR
The Trust and SEI Fund Resources (the "Administrator"), a wholly-owned
subsidiary of SEI Corporation ("SEI") have entered into an Administration
Agreement (the "Administration Agreement") dated May 29, 1992. 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 Administrator, a Delaware business trust, has its principal business offices
at 680 East Swedesford Road, Wayne, Pennsylvania 19087-1658. SEI Financial
Management Corporation ("SFM"), a wholly-owned subsidiary of SEI Corporation
("SEI"), is the owner of all beneficial interest in the Administrator. SEI and
its subsidiaries and affiliates, including the Administrator, are leading
providers of funds evaluation services, trust accounting systems, and brokerage
and information services to financial institutions, institutional investors and
money managers. The Administrator and its affiliates also serve as
administrator to the following other mutual funds: The Achievement Funds Trust;
The Advisors' Inner Circle Fund; The Arbor Fund; ARK Funds; Bishop Street Funds;
CoreFunds, Inc.; CrestFunds, Inc.; CUFUND; FMB Funds, Inc.; First American
Funds, Inc.; First American Investment Funds, Inc.; Inventor Funds, Inc; Marquis
Funds-Registered Trademark-; Monitor Funds; Morgan Grenfell Investment Trust;
The PBHG Funds, Inc.; The Pillar Funds; Rembrandt Funds-Registered Trademark-;
1784 Funds-Registered Trademark-; SEI Asset Allocation Trust; SEI Daily Income
Trust; SEI Index Funds; SEI Institutional Investments Trust; SEI Institutional
Managed Trust; SEI International Trust; SEI Liquid Asset Trust; SEI Tax Exempt
Trust; Stepstone Funds; and Turner Funds.
THE DISTRIBUTOR
SEI Financial Services Company (the "Distributor"), a wholly-owned subsidiary of
SEI, and the Trust have entered into a distribution agreement (the "Distribution
Agreement") dated May 29, 1992. The Distributor will receive no compensation
for distribution of Shares.
The Distribution Agreement is renewable annually and may be terminated by the
Distributor, the Qualified Trustees (as defined in the Distribution Agreement),
or by a majority vote of the outstanding securities of the Trust upon not more
than 60 days' written notice by either party.
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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 principal business address for each officer listed below is
680 East Swedesford Road, Wayne, Pennsylvania 19087-1658.
DANIEL S. GOODRUM (7/11/26) - Trustee - 48 Cayuga Road, Fort Lauderdale, Florida
33308. Chairman & CEO, SunBank/South Florida, N.A., 1985 to 1991; Chairman,
Audit Committee and Director, Holy Cross Hospital; Executive Committee Member
and Director, Honda Classic Foundation; Director, Broward Community College
Foundation.
WILTON LOONEY (4/18/19) - Trustee - 2999 Circle 75 Parkway, Atlanta, Georgia
30339. President of Genuine Parts Company, 1961-1964; Chairman of the Board,
1964-1990; Honorary Chairman of the Board, 1990 to present. Rollins, Inc.; RPC
Energy Services, Inc.
CHAMPNEY A. MCNAIR (10/30/24) - Trustee - 1405 Trust Co. of Georgia Building,
Atlanta, Georgia 30303. Director and Chairman of Investment Committee and
member of Executive Committee, Cotton States Life and Health Insurance Company;
Director and Chairman of Investment Committee and member of Executive Committee,
Cotton States Mutual Insurance Company; Chairman, Trust Company of Georgia
Advisory Council.
F. WENDELL GOOCH (12/3/32) - Trustee - P.O. Box 190, Paoli, Indiana 47454.
President, Orange County Publishing Co., Inc., October 1981. Publisher of the
Paoli News and the Paoli Republican and Editor of the Paoli Republican since
January 1981, President, H & W Distribution, Inc. since July 1984. Current
Trustee on the Board of Trustees for the SEI Family of Funds and The Capitol
Mutual Funds. Executive Vice President, Trust Department, Harris Trust and
Savings Bank and Chairman of the Board of Directors of The Harris Trust Company
of Arizona before January 1981.
T. GORDY GERMANY (11/28/25) - Trustee - Retired President, Chairman, and CEO of
Crawford & Company, 1973 to 1987. Member of the Board of Directors, 1970-1990,
joined company in 1948; spent entire career at Crawford, currently serves on
Boards of Norrell Corporation and Mercy Health Services, the latter being the
holding company of St. Joseph's Hospitals.
DR. BERNARD F. SLIGER (9/30/24) - Trustee - Florida State University, The Gus A.
Stavros Center, 250 South Woodward Avenue, Tallahassee, Florida 32306-4035.
Currently on sabbatical leave from Florida State University, 1991-92; now serves
as visiting professor at the University of New Orleans. President of Florida
State University, 1976-91; previous 4 years EVP and Chief Academic Officer.
During educational career, taught at Florida State, Michigan State, Louisiana
State and Southern University. Spent 19 years as faculty member and
administrator at Louisiana State University and served as Head of Economics
Department, member and Chairman of the Graduate Council, Dean of
B-11
<PAGE>
Academic Affairs and Vice Chancellor. Member of Board of Directors of Federal
Reserve Bank of Atlanta, 1983-1988.
JESSE HALL (9/26/29) - Trustee* - 988 Winall Down Road, NE, Atlanta, Georgia
30318. Executive Vice President, SunTrust Banks, Inc., 1985-1994; Director of
Crawford & Company since 1979; Member, Atlanta Estate Planning Council, 1988 to
1993.
DAVID G. LEE (4/16/52) - President, Chief Executive Officer - Senior Vice
President of the Administrator and Distributor since 1993. Vice President of
the Administrator and Distributor, 1991-1993. President, GW Sierra Trust Funds
before 1991.
STEPHEN G. MEYER (7/12/65) - Controller, Chief Financial Officer - Vice
President and Controller of SEI Corporation since 1994. Director, Internal
Audit and Risk Management, SEI Corporation, 1992-1994. Senior Associate,
Coopers & Lybrand, 1990-1992. Internal Audit, Vanguard Group of Investment
prior to 1992.
RICHARD W. GRANT (10/25/45) - Secretary - 2000 One Logan Square, Philadelphia,
Pennsylvania 19103, Partner of Morgan, Lewis & Bockius LLP (law firm), Counsel
to the Trust, Administrator and Distributor.
SANDRA K. ORLOW (10/18/53) - Vice President, Assistant Secretary - Vice
President and Assistant Secretary of the Administrator and Distributor since
1983.
KEVIN P. ROBINS (4/15/61) - Vice President, Assistant Secretary - Senior Vice
President & General Counsel of SEI, the Administrator and the Distributor since
1994. Vice President of SEI, the Administrator and the Distributor, 1992-1994.
Associate, Morgan, Lewis & Bockius LLP (law firm) prior to 1992.
KATHRYN L. STANTON (11/19/58) - Vice President, Assistant Secretary - Vice
President, Assistant Secretary of SEI, the Administrator and Distributor since
1994. Associate, Morgan, Lewis & Bockius LLP (law firm), 1989-1994.
JOSEPH M. LYDON (9/27/59) - Vice President - Director/Operations of the
Distributor since 1995. ________________________________________, Dremen Value
Management L.P., 1989-1995.
TODD CIPPERMAN ( ) - Vice President, Assistant Secretary - Vice
President and Assistant Secretary of the Administrator and the Distributor since
1995. Associate, Dewey Ballantine (law firm), 1994-1995. Associate, Winston &
Strawn (law firm), 1991-1994.
BARBARA NUGENT ( ) - Vice President, Assistant Secretary
MARC CAHN ( ) - Vice President, Assistant Secretary
B-12
<PAGE>
JOHN H. GRADY, JR. (6/1/61) - Assistant Secretary - 1800 M Street, N.W.,
Washington, DC 20036. Partner, Morgan, Lewis & Bockius LLP (law firm) since
1995. Associate, Morgan, Lewis & Bockius LLP, 1993-1995. Associate, Ropes &
Gray (law firm), 1988-1993.
- --------------------------
* Jesse S. Hall may be deemed to be an "interested person" of the Trust as
defined in the Investment Company Act of 1940.
The Trustees and officers of the Trust own, in the aggregate, less than 1% of
the outstanding shares of the Trust.
For the fiscal year end May 31, 1996, the Trust paid the following amounts to
Trustees and Officers of the Trust:
- --------------------------------------------------------------------------------
Aggregate Pension or Total
Compensation Retirement Compensation
From Benefits Estimated from
Name of Registrant Accrued as Annual Registrant and
Person, for Fiscal Part of Benefits Fund Complex
Position Year Ended Fund Upon Paid to
1996 Expenses Retirement Directors for
Fiscal Year
Ended 1996
- --------------------------------------------------------------------------------
Daniel S. $13,500 N/A N/A $13,500 for
Goodrum, service on one
Trustee board
Wilton $16,000 N/A N/A $16,000 for
Looney, service on one
Trustee board
Champney A. $13,500 N/A N/A $13,500 for
McNair, service on one
Trustee board
F. Wendell $13,500 N/A N/A $13,500 for
Gooch, service on one
Trustee board
T. Gordy $13,500 N/A N/A $13,500 for
Germany, service on one
Trustee board
Dr. Bernard $13,500 N/A N/A $13,500 for
F. Sliger, service on one
Trustee board
Jesse S. Hall, $13,500 N/A N/A $13,500 for
Trustee service on one
board
- --------------------------------------------------------------------------------
COMPUTATION OF YIELD
The current yield of the Funds will be calculated daily based upon the seven
days ending on the date of calculation ("base period"). The yield is computed
by determining the net change (exclusive of capital changes) in the value of a
hypothetical pre-existing shareholder account having a balance of one share at
the beginning of the period, subtracting a hypothetical charge reflecting
deductions from shareholder accounts, and dividing such net change by the value
of the account at the beginning of the same period to obtain the base period
return and multiplying the result by (365/7). Realized and unrealized gains and
losses are not included in the calculation of the yield. The effective
compound
B-13
<PAGE>
yield of the Funds is determined by computing the net change, exclusive of
capital changes, in the value of a hypothetical pre-existing account having a
balance of one share at the beginning of the period, subtracting a hypothetical
charge reflecting deductions from shareholder accounts, and dividing the
difference by the value of the account at the beginning of the base period to
obtain the base period return, and then compounding the base period return by
adding 1, raising the sum to a power equal to 365 divided by 7, and subtracting
1 from the result, according to the following formula: Effective Yield = [Base
Period Return + 1) 365/7] - 1. The current and the effective yields reflect
the reinvestment of net income earned daily on portfolio assets.
The yield of these Funds fluctuates, and the annualization of a week's dividend
is not a representation by the Trust as to what an investment in the Fund will
actually yield in the future. Actual yields will depend on such variables as
asset quality, average asset maturity, the type of instruments the Fund invests
in, changes in interest rates on money market instruments, changes in the
expenses of the Fund and other factors.
Yields are one basis upon which investors may compare the Funds with other money
market funds; however, yields of other money market funds and other investment
vehicles may not be comparable because of the factors set forth above and
differences in the methods used in valuing portfolio instruments.
ADVERTISING
From time to time, the Trust may include the names of clients of the Advisor in
advertisements and/or sales literature for the Trust.
PURCHASE AND REDEMPTION OF SHARES
Purchases and redemptions of shares of the Funds may be made on any day the New
York Stock Exchange ("NYSE") is open for business. Currently, the NYSE is
closed on the days following holidays are observed: New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day
and Christmas Day.
It is currently the Trust's policy to pay for all redemptions in cash. The
Trust retains the right, however, to alter this policy to provide for
redemptions in whole or in part by a distribution in-kind of readily marketable
securities held by the Funds in lieu of cash. Shareholders may incur brokerage
charges on the sale of any such securities so received in payment of
redemptions. A Shareholder will at all times be entitled to aggregate cash
redemptions from all Funds of the Trust 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 NYSE is restricted, or during the existence of an emergency (as determined
by the Securities and Exchange Commission by rule or regulation) as a result of
disposal or valuation of a Fund's securities is not reasonably practicable, or
B-14
<PAGE>
for such other periods as the Securities and Exchange Commission has by order
permitted. The Trust also reserves the right to suspend sales of shares of a
Fund for any period during which the NYSE, an Advisor, the Administrator and/or
the Custodian are not open for business. Investors will receive written
notification at least thirty days prior to any change in a Fund's investment
objective.
Certain state securities laws may require those financial institutions providing
certain distribution services to the Trust to register as dealers pursuant to
state law.
DETERMINATION OF NET ASSET VALUE
The net asset value per share of the Funds is calculated daily by the
Administrator by adding the value of securities and other assets, subtracting
liabilities and dividing by the number of outstanding shares. Securities will
be valued by the amortized cost method which involves valuing a security at its
cost on the date of purchase and thereafter (absent unusual circumstances)
assuming a constant amortization to maturity of any discount or premium,
regardless of the impact of fluctuations in general market rates of interest on
the value of the instrument. While this method provides certainty in valuation,
it may result in periods during which a security's value, as determined by this
method, is higher or lower than the price a Fund would receive if it sold the
instrument. During periods of declining interest rates, the daily yield of a
Fund may tend to be higher than a like computation made by a company with
identical investments utilizing a method of valuation based upon market prices
and estimates of market prices for all of its portfolio securities. Thus, if
the use of amortized cost by a Fund resulted in a lower aggregate portfolio
value on a particular day, a prospective investor in a Fund would be able to
obtain a somewhat higher yield than would result from investment in a company
utilizing solely market values, and existing investors in a Fund would
experience a lower yield. The converse would apply in a period of rising
interest rates.
A Fund's use of amortized cost and the maintenance of a Fund's net asset value
at $1.00 are permitted by regulations promulgated by Rule 2a-7 under the 1940
Act, provided that certain conditions are met. The regulations also require the
Trustees to establish procedures which are reasonably designed to stabilize the
net asset value per share at $1.00 for the Funds. Such procedures include the
determination of the extent of deviation, if any, of the Funds current net asset
value per share calculated using available market quotations from the Funds
amortized cost price per share at such intervals as the Trustees deem
appropriate and reasonable in light of market conditions and periodic reviews of
the amount of the deviation and the methods used to calculate such deviation.
In the event that such deviation exceeds 1/2 of 1%, the Trustees are required to
consider promptly what action, if any, should be initiated, and, if the Trustees
believe that the extent of any deviation may result in material dilution or
other unfair results to Shareholders, the Trustees are required to take such
corrective action as they deem appropriate to eliminate or reduce such dilution
or unfair results to the extent reasonably practicable. Such actions may
include the sale of portfolio instruments prior to maturity to realize capital
gains or losses or to shorten average portfolio maturity; withholding dividends;
redeeming shares in kind; or establishing a net asset value per share by using
available market quotations. In addition, if the Funds incur a significant loss
or liability, the Trustees have the authority to reduce pro rota the number of
shares of the Funds in each Shareholder's account and to
B-15
<PAGE>
offset each Shareholder's pro rota portion of such loss or liability from the
Shareholder's accrued but unpaid dividends or from future dividends while each
other Fund must annually distribute at least 90% of its investment company
taxable income.
TAXES
FEDERAL INCOME TAX
In order to qualify for treatment as a regulated investment company ("RIC")
under the Internal Revenue Code of 1986, as amended ("Code"), each 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 net short-term capital
gain) ("Distribution Requirement") and also must meet several additional
requirements. Among these requirements are the following: (i) at least 90% of
a 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 certain other income, (ii) a Fund
must derive less than 30% of its gross income each taxable year from the sale or
other disposition of stocks or securities held for less than three months; (iii)
at the close of each quarter of a 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 RIC's 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 a 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 a 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 RIC's) of any one issuer, or of two or more issuers
engaged in same or similar businesses if the Fund owns at least 20% of the
voting power of such issuers.
Notwithstanding the Distribution Requirement described above, which only
requires a Fund to distribute at least 90% of its annual investment company
taxable income and does not require any minimum distribution of net capital
gains (the excess of net long-term capital gains over net short-term capital
loss), a 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 calendar year, plus certain other amounts.
Any gain or loss recognized on a sale or redemption of Shares of a Fund by a
Shareholder who is not a dealer in securities will generally 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 generally treated as a short-term capital gain or
loss. Any loss recognized by a Shareholder upon the sale or redemption of
shares of a tax-free Fund held for six months or less, however, will be
disallowed to the extent of any exempt-interest dividends received by the
Shareholder with respect to such shares. If shares on which a net capital gain
distribution has been received are subsequently sold or redeemed and such shares
B-16
<PAGE>
have been held for six months or less, any loss recognized will be treated as a
long-term capital loss to the extent of the long-term capital gain distribution.
B-17
<PAGE>
STATE TAXES
A 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 Funds
to Shareholders and the ownership of shares may be subject to state and local
taxes.
FUND TRANSACTIONS
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 a 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 Funds invest 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 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.
DESCRIPTION OF SHARES
The Declaration of Trust authorizes the issuance of an unlimited number of
shares and classes of shares of the Funds each of which represents an equal
proportionate interest in that Fund with each other share. Shares are entitled
upon liquidation to a pro rata share in the net assets of the Funds.
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
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
B-18
<PAGE>
partnership, the possibility of the Shareholders' incurring financial loss for
that reason appears remote because the Trust's Declaration of Trust contains an
express disclaimer of Shareholder liability for obligations of the Trust and
requires that notice of such disclaimer be given in each agreement, obligation
or instrument entered into or executed by or on behalf of the Trust or the
Trustees, and because the Declaration of Trust provides for indemnification out
of the Trust property for any Shareholder held personally liable for the
obligations of the Trust.
LIMITATION OF TRUSTEES' LIABILITY
The Declaration of Trust provides that a Trustee shall be liable only for his
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 willful
misfeasance, bad faith, gross negligence or reckless disregard of his duties.
B-19
<PAGE>
STI CLASSIC FUNDS
PART C: OTHER INFORMATION
POST-EFFECTIVE AMENDMENT NO. 16
Item 24. Financial Statements and Exhibits:
Financial Statements
(a) Part A - Not Applicable
Part B - Not Applicable
(b) Additional Exhibits
(1) Declaration of Trust--as originally filed with Registrant's
Registration Statement on Form N-1A filed February 12, 1992 and
incorporated by reference to Post-Effective Amendment No. 15
filed July 31, 1996.
(2) By-Laws--as originally filed with Registrant's Pre-Effective
Amendment No. 1 filed April 23, 1992 and incorporated by
reference to Post-Effective Amendment No. 15 filed July 31, 1996.
(3) Not applicable.
(4) Not applicable.
(5)(b) Investment Advisory Agreements with:
SunBank Capital Management, N.A.
Trusco Capital Management, Inc.
Trust Company Bank
(5)(c) Revised Investment Advisory Agreement with Trusco Capital
Management--as originally filed with Registrant's Post-Effective
Amendment No. 5 filed August 2, 1993 and incorporated by
reference to Post-Effective Amendment No. 15 filed July 31, 1996.
(5)(d) Investment Advisory Agreement with American National Bank and
Trust Company--as originally filed with Registrant's
Post-Effective Amendment No. 6 filed October 22, 1993 and
incorporated by reference to Post-Effective Amendment No. 15
filed July 31, 1996.
(5)(e) Investment Advisory Agreement with Trust Company Bank--as
originally filed with Registrant's Post-Effective Amendment No. 6
filed October 22, 1993 and incorporated by reference to
Post-Effective Amendment No. 15 filed July 31, 1996.
(6) Distribution Agreement*
(7) Not applicable.
(8)(a) Custodian Agreement with Trust Company Bank dated February 1,
1994--as originally filed with Registrant's Post-Effective
Amendment No. 13 filed September 28, 1995 and incorporated by
reference to Post-Effective Amendment No. 15 filed July 31, 1996.
(8)(b) Custodian Agreement with the Bank of California incorporated by
reference to Post-Effective Amendment No. 15 filed July 31, 1996.
(8)(c) Transfer Agent Agreement with Federated Services Company dated
May 14, 1994--as originally filed with Post-Effective Amendment
No. 9 filed September 22, 1994 and incorporated by reference to
Post-Effective Amendment No. 15 filed July 31, 1996.
C-1
<PAGE>
(9)(a) Administration Agreement with SEI Financial Management
Corporation dated May 29, 1995 as originally filed with
Post-Effective Amendment No. 12 filed August 17, 1995 and
incorporated by reference to Post-Effective Amendment No. 15
filed July 31, 1996.
(10) Opinion and Consent of Counsel (Incorporated by reference to
Pre-Effective Amendment No. 2 filed May 22, 1992)
(11) Consent of Independent Public Accountants *
(12) Not applicable.
(13) Not applicable.
(14) Not applicable.
(15) Distribution Plan - Investor Class*
(15)(a) Distribution and Service Agreement relating to Flex Shares dated
May 29, 1995--as originally filed with Post-Effective Amendment
No. 12 filed August 17, 1995 and incorporated by reference to
Post-Effective Amendment No. 15 filed July 31, 1996.
(16) Performance Quotation Computation (Incorporated by reference to
Post-Effective Amendment No. 9 filed September 22, 1994).
(18) Rule 18f-3 Plan*
(24) Powers of Attorney--as originally filed with Post-Effective
Amendment No. 13 filed September 28, 1995 and incorporated by
reference to Post-Effective Amendment No. 15 filed July 31, 1996.
(27) Financial Data Schedules
*Filed herewith.
Item 25. Persons Controlled by or under Common Control with Registrant:
See the Prospectuses and Statement of Additional Information regarding the
Trust's control relationships. The Administrator is a subsidiary of SEI
Corporation which also controls the distributor of the Registrant, SEI Financial
Services Company, and other corporations engaged in providing various financial
and record keeping services, primarily to bank trust departments, pension plan
sponsors, and investment managers.
Item 26. Number of Holders of Securities:
As of July 19, 1996:
NUMBER OF
TITLE OF CLASS RECORD HOLDERS
Units of beneficial interest, without par value-
TRUST SHARES
Prime Quality Money Market Fund. . . . . . . . . . . . . . . . . . . . . . . 11
U.S. Government Securities Money Market Fund . . . . . . . . . . . . . . . . 5
C-2
<PAGE>
NUMBER OF
TITLE OF CLASS RECORD HOLDERS
Tax-Exempt Money Market Fund . . . . . . . . . . . . . . . . . . . . . . . . 5
Investment Grade Bond Fund . . . . . . . . . . . . . . . . . . . . . . . . . 6
Investment Grade Tax-Exempt Bond Fund. . . . . . . . . . . . . . . . . . . . 5
Capital Growth Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Value Income Stock Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Short-Term Bond Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Short-Term U.S. Treasury Securities Fund . . . . . . . . . . . . . . . . . . 6
Sunbelt Equity Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Balanced Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Mid-Cap Equity Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Florida Tax-Exempt Bond Fund . . . . . . . . . . . . . . . . . . . . . . . . 6
Georgia Tax-Exempt Bond Fund . . . . . . . . . . . . . . . . . . . . . . . . 6
Tennessee Tax-Exempt Bond Fund . . . . . . . . . . . . . . . . . . . . . . . 6
U.S. Government Securities Fund. . . . . . . . . . . . . . . . . . . . . . . 6
Limited-Term Federal Mortgage Securities Fund. . . . . . . . . . . . . . . . 6
International Equity Index Fund. . . . . . . . . . . . . . . . . . . . . . . 5
International Equity Fund. . . . . . . . . . . . . . . . . . . . . . . . . . 7
INVESTOR SHARES
Prime Quality Money Market Fund. . . . . . . . . . . . . . . . . . . . . 1,022
U.S. Government Securities Money Market Fund . . . . . . . . . . . . . . . .477
Tax-Exempt Money Market Fund . . . . . . . . . . . . . . . . . . . . . . . .309
Investment Grade Bond Fund . . . . . . . . . . . . . . . . . . . . . . . 1,535
Investment Grade Tax-Exempt Bond Fund. . . . . . . . . . . . . . . . . . . 981
Capital Growth Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . 9,043
Value Income Stock Fund. . . . . . . . . . . . . . . . . . . . . . . . . 5,459
Short-Term Bond Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Short-Term U.S. Treasury Securities Fund . . . . . . . . . . . . . . . . . 103
Sunbelt Equity Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . 1,871
Balanced Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 299
Mid-Cap Equity Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . 1,063
Florida Tax-Exempt Bond Fund . . . . . . . . . . . . . . . . . . . . . . . . 92
Georgia Tax-Exempt Bond Fund . . . . . . . . . . . . . . . . . . . . . . . . 74
Tennessee Tax-Exempt Bond Fund . . . . . . . . . . . . . . . . . . . . . . . 33
U.S. Government Securities Fund. . . . . . . . . . . . . . . . . . . . . . . 37
Limited-Term Federal Mortgage Securities Fund. . . . . . . . . . . . . . . . 48
International Equity Index Fund. . . . . . . . . . . . . . . . . . . . . . 486
C-3
<PAGE>
NUMBER OF
TITLE OF CLASS RECORD HOLDERS
International Equity Fund . . . . . . . . . . . . . . . . . . . . . . . . 190
FLEX SHARES
Investment Grade Bond Fund . . . . . . . . . . . . . . . . . . . . . . . . 292
Investment Grade Tax-Exempt Bond Fund. . . . . . . . . . . . . . . . . . . 148
Capital Growth Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . 1,071
Value Income Stock Fund. . . . . . . . . . . . . . . . . . . . . . . . . 1,808
Short-Term Bond Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Short-Term U.S. Treasury Securities Fund . . . . . . . . . . . . . . . . . . 65
Sunbelt Equity Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . 325
Balanced Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191
Mid-Cap Equity Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . 514
Florida Tax-Exempt Bond Fund . . . . . . . . . . . . . . . . . . . . . . . . 72
Georgia Tax-Exempt Bond Fund . . . . . . . . . . . . . . . . . . . . . . . . 89
Tennessee Tax-Exempt Bond Fund . . . . . . . . . . . . . . . . . . . . . . . 40
U.S. Government Securities Fund. . . . . . . . . . . . . . . . . . . . . . 124
Limited-Term Federal Mortgage Securities Fund. . . . . . . . . . . . . . . . 72
International Equity Index Fund. . . . . . . . . . . . . . . . . . . . . . 108
International Equity Fund. . . . . . . . . . . . . . . . . . . . . . . . . 146
Item 27. Indemnification:
Article VIII of the Agreement of Declaration of Trust filed as Exhibit 1 to
the Registration Statement is incorporated by reference. Insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to trustees, directors, officers and controlling persons of the
Registrant by the Registrant pursuant to the Declaration of Trust or otherwise,
the Registrant is aware that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and, therefore, is unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by trustees, directors, officers or
controlling persons of the Registrant in connection with the successful defense
of any act, suit or proceeding) is asserted by such trustees, directors,
officers or controlling persons in connection with the shares being registered,
the Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issues.
C-4
<PAGE>
Item 28. Business and Other Connections of Investment Advisors:
Other business, profession, vocation, or employment of a substantial nature
in which each director or principal officer of each Advisor is or has been, at
any time during the last two fiscal years, engaged for his own account or in
the capacity of director, officer, employee, partner or trustee are as follows:
NAME OF CONNECTION WITH
NAME OTHER COMPANY OTHER COMPANY
---- ------------- -------------
STI CAPITAL MANAGEMENT, N.A.
E. Jenner Wood III -- --
Director
Hunting F. Deutsch -- --
Director
Anthony R. Gray -- --
Chairman & Chief Investment
Officer
James R. Wood -- --
President
Daniel Jaworski -- --
Senior Vice President
Elliott A. Perny -- --
Executive Vice President
& Chief Portfolio Manager
Stuart F. Van Arsdale -- --
Senior Vice President
Jonathan D. Rich -- --
Director
Robert Buhrmann -- --
Senior Vice President
Larry M. Cole -- --
Senior Vice President
C-5
<PAGE>
NAME OF CONNECTION WITH
NAME OTHER COMPANY OTHER COMPANY
---- ------------- -------------
L. Earl Denney -- --
Executive Vice President
Thomas A. Edgar -- --
Senior Vice President
Daniel G. Shannon -- --
Senior Vice President
Ronald Schwartz -- --
Senior Vice President
Ryan R. Burrow Catalina Lighting Director/25% owner
Senior Vice President
Mills A. Riddick -- --
Senior Vice President
Christopher A. Jones -- --
Senior Vice President
David E. West -- --
Vice President
The list required by this Item 28 of officers and directors of Trusco Capital
Management, Inc., together with information as to any other business,
profession, vocation or employment of a substantial nature engaged in by such
officers and directors during the past two years, is incorporated by reference
to Schedules A and D of Form ADV, filed by Trusco Capital Management, Inc.
pursuant to the Investment Advisers Act of 1940 (SEC File No. 801-23163).
SUNTRUST BANK CHATTANOOGA, N.A.
Paul K. Brock, Jr. Brock Candy Company Vice President -
Special Director
Projects
J. Harold Chandler Provident Life & President & CEO
Director Accident Insurance Co.
William H. Chapin See Rock City, Inc. President
Director
C-6
<PAGE>
NAME OF CONNECTION WITH
NAME OTHER COMPANY OTHER COMPANY
---- ------------- -------------
John W. Clay, Jr. Third National Chairman & Director
Corporation CEO
Andrew G. Cope The Johnston Company Managing Partner
Director
Robert P. Corker, Jr. -- --
Director
John B. Crimmins, Jr. -- --
Director
J.H. Davenport, III Howard Holdings, Inc. President
Director
Edwin B. Duckett, Jr. -- --
Director
R. Alton Duke, Jr. -- --
Director
Daniel K. Frierson Dixie Yarns, Inc. Chairman & CEO
Director
Zan Guerry Chattem, Inc. Chairman & CEO
Director
James L.E. Hill The Tennessee Aquarium President
Director
Summerfield K. Johnston, Jr. Coca Cola Enterprises, Vice Chairman & CEO
Director Inc.
Robert C. Jones Southern Products Chairman
Director Company, Inc.
James D. Kennedy, Jr. Cherokee Warehouses, Chairman
Director Inc.
C-7
<PAGE>
NAME OF CONNECTION WITH
NAME OTHER COMPANY OTHER COMPANY
---- ------------- -------------
T. A. Lupton, Jr. Stone Fort Land Company President
Director
Hugh O. Maclellen, Jr. Provident Life & Chairman - Executive
Director Accident Insurance Co. Committee
Jack C. McKee McKee Baking Company Executive Vice
Director President
Charles G. Mills Olan Mills Incorporated Chairman - Executive
Director Committee
J. Woodley Murphy E.I. DuPont de Nemours Plant Manager
Director & Co.
L. Harlen Painter Bell & Associates Attorney-at-Law
Director
Scott L. Probasco, Jr. American National Chairman -
Director Bank & Trust Co. Executive Committee
Robert J. Sudderth, Jr. American National Chairman & CEO
Director Bank & Trust Co.
Winston W. Walker -- --
Director
SUNTRUST BANK, ATLANTA
Gaylord O. Coan Gold Kist, Inc. President & CEO
Director Hindsight Corp. Director
A.D. Correll Georgia-Pacific President & CEO
Director Corporation
R.W. Courts, II Atlantic Realty Company President
Director
Ronald S. Crowding -- --
C-8
<PAGE>
NAME OF CONNECTION WITH
NAME OTHER COMPANY OTHER COMPANY
---- ------------- -------------
A.W. Dahlberg The Southern Company President
Director
William W. Gaston Gaston & Gaston General Partner
Director Gaston Development President
Co., Inc.
Charles B. Ginden -- --
Director
Roberto C. Goizueta The Coca-Cola Company Chairman of the
Director Board
Edward P. Gould Trust Company of Chairman of the
Director Georgia Board
T. Marshall Hahn, Jr. Georgia-Pacific Honorary Chairman
Director Corporation
Jesse Hill, Jr. Atlanta Life Insurance President
Director Company
L. Phillip Humann SunTrust Banks, Inc. President &
Director Services Resources Treasurer
Corporation
William B. Johnson The Ritz Carlton Hotel Chairman of the
Director Company Board
Hicks J. Lanier Oxford Industries, Inc. Chairman of the
Director Board & President
Pinehill Development Co. 30% owner
Joseph L. Lanier, Jr. Dan River, Inc. Chairman of the
Director Board
Braelan Group Chairman
Robert R. Long Trust Company Bank President
Director
C-9
<PAGE>
NAME OF CONNECTION WITH
NAME OTHER COMPANY OTHER COMPANY
---- ------------- -------------
Arthur L. Montgomery -- --
Director
H.G. Patillo Patillo Construction Chairman of the
Director Company Board
Larry L. Prince Genuine Parts Company Chairman of the
Director Board
R. Randall Rollins Rollins, Inc. Chairman of the
Director Board
Lor, Inc. Director
Maran, Inc. Director
Gutterworld, Inc. Director
Dabora, Inc. Director & Secretary
Simpson, Nance & Graham Director
Auto Parts Director
Wholesale, Inc.
Global Expanded Director
Metal, Inc.
Rollins Holding Co. Director
Rol, Ltd. Partner
Rollins Investment Fund Partner
Energy Partners Partner
Petro Partnership Partner
The Piedmont Investment
Group Director
WRG, Ltd. Partner
Rollins, Inc. Chairman
RPC Energy Chairman
Services, Inc.
The Mul Company Partner
Bugvac, Inc. Director
Omnitron Int'l, Inc. Director
MRG, Ltd. Partner
Robert W. Scherer -- --
Director
Charles R. Shufeldt -- --
Executive Vice President
C-10
<PAGE>
NAME OF CONNECTION WITH
NAME OTHER COMPANY OTHER COMPANY
---- ------------- -------------
Donald Wayne Thurmond -- --
Senior Vice President
James B. Williams SunTrust Banks, Inc. Chairman of the
Director Board
Gerald T. Adams -- --
Senior Vice President
James R. Albach -- --
Group Vice President
Virginia D. Anderson -- --
Assistant Vice President
Christina Bird -- --
First Vice President
Edward Burgess -- --
Vice President
Gay Cash -- --
Vice President
Krista Lee Cosgrove -- --
Trust Officer
Mark Elam -- --
Vice President
Joseph B. Foley, Jr. -- --
First Vice President
Thomas R. Frisbie -- --
Group Vice President
Molly Guenther -- --
Assistant Vice President
C-11
<PAGE>
NAME OF CONNECTION WITH
NAME OTHER COMPANY OTHER COMPANY
---- ------------- -------------
Benjamin S. Harris -- --
Vice President
Jethro H. Irby, III -- --
First Vice President
V. Jere Koser -- --
Group Vice President
Richard A. Makepeace -- --
Assistant Vice President
Sally S. McKinley -- --
Assistant Vice President
James B. Murphy, III -- --
Vice President
James E. Russell -- --
Vice President
Mark Stancil -- --
Assistant Vice President
David E. Thompson -- --
Vice President
Charles C. Watson -- --
Group Vice President
ITEM 29. PRINCIPAL UNDERWRITERS:
(a) Furnish the name of each investment company (other than the Registrant) for
which each principal underwriter currently distributing the securities of
the Registrant also acts as a principal underwriter, distributor or
investment adviser.
C-12
<PAGE>
Registrant's distributor, SEI Financial Services Company ("SFS"), acts as
distributor for:
SEI Daily Income Trust July 15, 1982
SEI Liquid Asset Trust November 29, 1982
SEI Tax Exempt Trust December 3, 1982
SEI Index Funds July 10, 1985
SEI Institutional Managed Trust January 22, 1987
SEI International Trust August 30, 1988
Stepstone Funds January 30, 1991
The Advisors' Inner Circle Fund November 14, 1991
The Pillar Funds February 28, 1992
CUFUND May 1, 1992
STI Classic Funds May 29, 1992
CoreFunds, Inc. October 30, 1992
First American Funds, Inc. November 1, 1992
First American Investment Funds, Inc. November 1, 1992
The Arbor Fund January 28, 1993
1784 Funds-Registered Trademark- June 1, 1993
The PBHG Funds, Inc. July 16, 1993
Marquis Funds-Registered Trademark- August 17, 1993
Morgan Grenfell Investment Trust January 3, 1994
Inventor Funds, Inc. August 1, 1994
The Achievement Funds Trust December 27, 1994
Bishop Street Funds January 27, 1995
CrestFunds, Inc. March 1, 1995
STI Classic Variable Trust August 18, 1995
ARK Funds November 1, 1995
Monitor Funds January 11, 1996
FMB Funds, Inc. March 1, 1996
SEI Asset Allocation Trust April 1, 1996
Turner Funds April 30, 1996
SEI Institutional Investments Trust June 14, 1996
SFS provides numerous financial services to investment managers, pension
plan sponsors, and bank trust departments. These services include
portfolio evaluation, performance measurement and consulting services
("Funds Evaluation") and automated execution, clearing and settlement of
securities transactions ("MarketLink").
(b) Furnish the Information required by the following table with respect to
each director, officer or partner of each principal underwriter named in
the answer to Item 21 of Part B. Unless otherwise noted, the business
address of each director or officer is 680 East Swedesford Road, Wayne, PA
19087.
C-13
<PAGE>
<TABLE>
<CAPTION>
Position and Office Positions and Offices
Name with Underwriter with Registrant
- ---- ---------------- ---------------
<S> <C> <C>
Alfred P. West, Jr. Director, Chairman & Chief Executive Officer --
Henry H. Greer Director, President & Chief Operating Officer --
Carmen V. Romeo Director, Executive Vice President & Treasurer --
Gilbert L. Beebower Executive Vice President --
Richard B. Lieb Executive Vice President, President-Investment Services Division --
Leo J. Dolan, Jr. Senior Vice President --
Carl A. Guarino Senior Vice President --
Jerome Hickey Senior Vice President --
Steven Kramer Senior Vice President --
David G. Lee Senior Vice President --
William Madden Senior Vice President --
A. Keith McDowell Senior Vice President --
Dennis J. McGonigle Senior Vice President --
Hartland J. McKeown Senior Vice President --
Barbara J. Moore Senior Vice President --
James V. Morris Senior Vice President --
Steven Onofrio Senior Vice President --
Kevin P. Robins Senior Vice President, General Counsel & --
Secretary
Robert Wagner Senior Vice President --
Patrick K. Walsh Senior Vice President --
Kenneth Zimmer Senior Vice President --
Robert Aller Vice President --
Marc H. Cahn Vice President & Assistant Secretary --
Gordon W. Carpenter Vice President --
Todd Cipperman Vice President & Assistant Secretary --
Robert Crudup Vice President & Managing Director --
Ed Daly Vice President --
Jeff Drennen Vice President --
Mick Duncan Vice President and Team Leader --
Vic Galef Vice President & Managing Director --
Kathy Heilig Vice President --
Larry Hutchison Vice President --
Michael Kantor Vice President --
Samuel King Vice President --
Kim Kirk Vice President & Managing Director --
Donald H. Korytowski Vice President --
John Krzeminski Vice President & Managing Director --
Robert S. Ludwig Vice President and Team Leader --
Vicki Malloy Vice President and Team Leader --
Jack May Vice President --
Carolyn McLaurin Vice President & Managing Director --
W. Kelso Morrill Vice President --
Barbara A. Nugent Vice President & Assistant Secretary --
Sandra K. Orlow Vice President & Assistant Secretary --
Donald Pepin Vice President & Managing Director --
Larry Pokora Vice President --
Kim Rainey Vice President --
Paul Sachs Vice President --
</TABLE>
C-14
<PAGE>
<TABLE>
<CAPTION>
Position and Office Positions and Offices
Name with Underwriter with Registrant
- ---- ---------------- ---------------
<S> <C> <C>
Mark Samuels Vice President & Managing Director --
Steve Smith Vice President --
Daniel Spaventa Vice President --
Kathryn L. Stanton Vice President & Assistant Secretary --
Wayne M. Withrow Vice President & Managing Director --
William Zawaski Vice President --
James Dougherty Director of Brokerage Services --
</TABLE>
Item 30. Location of Accounts and Records:
Books or other documents required to be maintained by Section 31(a) of the
Investment Company Act of 1940, and the rules promulgated thereunder, are
maintained as follows:
(a) With respect to Rules 31a-1(a); 31a-1(b)(1); (2)(a) and (b); (3); (6); (8);
(12); and 31a-1(d), the required books and records are maintained at the
offices of Registrant's Custodians:
Trust Company Bank
Park Place
P.O. Box 105504
Atlanta, Georgia 30348
Union Bank of California (INTERNATIONAL EQUITY INDEX FUND ONLY)
475 Sansome Street
Suite 1200
San Francisco, California 94111
Bank of New York (INTERNATIONAL EQUITY FUND ONLY)
One Wall Street
New York, New York
(b)/(c) With respect to Rules 31a-1(a); 31a-1(b)(1),(4); (2)(C) and (D); (4);
(5); (6); (8); (9); (10); (11); and 31a-1(f), the required books and records are
maintained at the offices of Registrant's Administrator:
SEI Financial Management Corporation
680 E. Swedesford Road
Wayne, Pennsylvania 19087
(c) With respect to Rules 31a-1(b)(5), (6), (9) and (10) and 31a-1(f), the
required books and records are maintained at the principal offices of the
Registrant's Advisor:
C-15
<PAGE>
STI Capital Management, N.A.
P.O. Box 3808
Orlando, Florida 32802
Trusco Capital Management
50 Hurt Plaza, Suite 1400
Atlanta, Georgia 30303
SunTrust Bank, Chattanooga
736 Market Street
Chattanooga, Tennessee 37402
SunTrust Bank, Atlanta
25 Park Place
Atlanta, Georgia 30303
Item 31. Management Services: None.
Item 32. Undertakings:
Registrant hereby undertakes that whenever Shareholders meeting the
requirements of Section 16(c) of the Investment Company Act of 1940 inform the
Board of Trustees of their desire to communicate with Shareholders of the Trust,
the Trustees will inform such Shareholders as to the approximate number of
Shareholders of record and the approximate costs of mailing or afford said
Shareholders access to a list of Shareholders.
Registrant undertakes to call a meeting of Shareholders for the purpose of
voting upon the question of removal of a Trustee(s) when requested in writing to
do so by the holders of at least 10% of Registrant's outstanding shares and in
connection with such meetings to comply with the provisions of Section 16(c) of
the Investment Company Act of 1940 relating to Shareholder communications.
Registrant undertakes to furnish each person to whom a prospectus is
delivered with a copy of the Registrant's latest annual report to Shareholders,
upon request and without a charge.
Registrant undertakes to file a post-effective amendment, including
financial statements which need not be audited, within 4-6 months from the later
of the commencement of operations of the Classic Institutional Cash Management
Money Market Fund and the Classic Institutional U.S. Treasury Securities Money
Market Fund of the Registrant or the effective date of Post-Effective Amendment
No. 16 of the Registrant's 1933 Act Registration Statement.
C-16
<PAGE>
NOTICE
A copy of the Agreement and Declaration of Trust for STI Classic Funds is
on file with the Secretary of State of The Commonwealth of Massachusetts and
notice is hereby given that this Registration Statement has been executed on
behalf of the Trust by an officer of the Trust as an officer and by its Trustees
as trustees and not individually and the obligations of or arising out of this
Registration Statement are not binding upon any of the Trustees, officers, or
Shareholders individually but are binding only upon the assets and property of
the Trust.
C-17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 (the "Securities
Act") and the Investment Company Act of 1940, as amended, the Registrant has
duly caused this Post-Effective Amendment No. 16 to Registration Statement No.
33-45671 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wayne, Commonwealth of Pennsylvania on the
18th day of September, 1996.
By: /s/ David G. Lee
--------------------------------
David G. Lee, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacity on the dates indicated.
* Trustee September 18, 1996
- ----------------------------- ----
F. Wendell Gooch
* Trustee September 18, 1996
- ----------------------------- ----
Daniel S. Goodrum
* Trustee September 18, 1996
- ----------------------------- ----
Jesse S. Hall
* Trustee September 18, 1996
- ----------------------------- ----
Wilton Looney
* Trustee September 18, 1996
- ----------------------------- ----
Champney A. McNair
* Trustee September 18, 1996
- ----------------------------- ----
T. Gordy Germany
* Trustee September 18, 1996
- ----------------------------- ----
Bernard F. Sliger
/s/ Stephen G. Meyer
- ----------------------------- Controller September 18, 1996
Stephen G. Meyer & Chief ----
Financial
Officer
/s/ David G. Lee
- ----------------------------- President & September 18, 1996
David G. Lee Chief Executive ----
Officer
* By: /s/ David G. Lee
-----------------------
David G. Lee, As Power of Attorney
<PAGE>
EXHIBIT INDEX
Number Exhibit
EX-99.B1 Declaration of Trust as originally filed with Registrant's
Registration Statement on Form N-1A filed February 12, 1992 and
incorporated by reference to Post-Effective Amendment No. 15
EX-99.B2 By-Laws as originally filed with Registrant's Pre-Effective
Amendment No. 1 filed April 23, 1992 and incorporated by
reference to Post-Effective Amendment No. 15 filed July 31, 1996.
EX-99.B3 Not applicable.
EX-99.B4 Not applicable.
EX-99.B5C Revised Investment Advisory Agreement with Trusco Capital
Management as filed with Registrant's Post-Effective Amendment
No. 5 filed August 2, 1993 and incorporated by reference to
Post-Effective Amendment No. 15 filed July 31, 1996.
EX-99.B5D Investment Advisory Agreement with American National Bank and
Trust Company as filed with Registrant's Post-Effective Amendment
No. 6 filed October 22, 1993 and incorporated by reference to
Post-Effective Amendment No. 15 filed July 31, 1996.
EX-99.B5E Investment Advisory Agreement with Trust Company Bank as
originally filed with Registrant's Post-Effective Amendment No. 6
filed October 22, 1993 and incorporated by reference to
Post-Effective Amendment No. 15 filed July 31, 1996.
EX-99.B6 Distribution Agreement*
EX-99.B7 Not applicable.
EX-99.B8A Custodian Agreement with Trust Company Bank dated February 1,
1994 as originally filed with Registrant's Post-Effective
Amendment No. 13 filed September 28, 1995 and incorporated by
reference to Post-Effective Amendment No. 15 filed July 31, 1996.
EX-99.B8B Custodian Agreement with Bank of California incorporated by
reference to Post-Effective Amendment No. 15 filed July 31, 1996.
EX-99.B8C Transfer Agent Agreement with Federated Services Company dated
May 14, 1994 as originally filed with Post-Effective Amendment
No. 9 filed September 22, 1994 and incorporated by reference to
Post-Effective Amendment No. 15 filed July 31, 1996.
EX-99.B9A Administration Agreement with SEI Financial Management
Corporation dated May 29, 1995 as originally filed with
Post-Effective Amendment No. 12 filed August 17, 1995 and
incorporated by reference to Post-Effective Amendment No. 15
filed July 31, 1996.
EX-99.10 Opinion and Consent of Counsel (incorporated by reference to
Pre-Effective Amendment No. 2 filed May 22, 1992)
EX-99.B11 Consent of Independent Public Accountants*
EX-99.B12 Not applicable.
EX-99.B13 Not applicable.
EX-99.B14 Not applicable.
C-19
<PAGE>
EX-99.B15 Distribution Plan--Investor Class*
EX-99.B15A Distribution and Service Agreement relating to Flex Shares dated
May 29, 1995 as originally filed with Post-Effective Amendment
No. 12 filed August 17, 1995 and incorporated by reference to
Post-Effective Amendment No. 15 filed July 31, 1996.
EX-99.B16 Performance Quotation Computation (incorporated by reference to
Post-Effective Amendment No. 9 filed September 22, 1994).
EX-99.B18 Rule 18f-3 Plan*
EX-99.B24 Powers of attorney as originally file dwith Post-Effective
Amendment No. 13 filed September 28, 1995 and incorporated by
reference to Post-Effective Amendment No. 15 filed July 31, 1996.
EX-99.27 Not applicable.
*FILED HEREWITH.
C-20
<PAGE>
EX-99.B6
DISTRIBUTION AGREEMENT
STI CLASSIC FUNDS
THIS AGREEMENT is made as of this 26th day of May, 1992, between STI
Classic Funds (the "Trust"), a Massachusetts business trust and SEI Financial
Services Company (the "Distributor"), a Pennsylvania corporation.
WHEREAS, the Trust is registered as an investment company with the
Securities and Exchange Commission ("SEC") under the investment Company Act of
1940, as amended ("1940 Act"), and its Shares are registered with the SEC under
the Securities Act of 1933, as amended ("1933 Act"); and
WHEREAS, the Distributor is registered as a broker-dealer with the SEC
under the Securities Exchange Act of 1934, as amended;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the Trust and Distributor hereby agree as follows:
ARTICLE 1. SALE OF SHARES. The Trust grants to the Distributor the
exclusive right to sell Shares of the Trust at the net asset value per Share in
accordance with the current prospectus, as agent and on behalf of the Trust,
during the term of this Agreement and subject to the registration requirements
of the 1933 Act, the rules and regulations of the SEC and the laws governing the
sale of securities in the various states ("Blue Sky Laws").
ARTICLE 2. SOLICITATION OF SALES. In consideration of these rights granted
to the Distributor, the Distributor agrees to use all reasonable efforts,
consistent with its other business, in connection with the distribution of
Shares of the Trust; provided, however, that the Distributor shall not be
prevented from entering into like arrangements with other issuers. The
provisions of this paragraphs do not obligate the Distributor to register as a
broker or dealer under the Blue Sky Laws of any jurisdiction when it determines
it would be uneconomical for it to do so or to maintain its registration in any
jurisdiction in which it is now registered nor obligate the Distributor to sell
any particular number of Shares.
ARTICLE 3. AUTHORIZED REPRESENTATIONS. The Distributor is not authorized by
the Trust to give any information or to make any representations other than
those contained in the current registration statements and prospectuses of the
Trust filed with the SEC or contained in Shareholder reports or other material
that may be prepared by or on behalf of the Trust for the Distributor's use.
The Distributor may prepare and distribute sales
1
<PAGE>
literature and other material as it may deem appropriate, provided that such
literature and materials have been approved by the Trust prior to their use.
ARTICLE 4. REGISTRATION OF SHARES. The Trust agrees that it will take all
action necessary to register Shares under the federal and state securities laws
so that there will be available for sale the number of Shares the Distributor
may reasonably be expected to sell and to pay all fees associated with said
registration. The Trust shall make available to the Distributor such number of
copies of its currently effective prospectus and statement of additional
information as the Distributor may reasonably request. The Trust shall furnish
to the Distributor copies of all information, financial statements and other
papers which the Distributor may reasonably request for use in connection with
the distribution of Shares of the Trust.
ARTICLE 5. COMPENSATION. As compensation for the services performed and the
expenses assumed under this Agreement relative to Investor Shares of the Trust,
and to the extent provided in the Trust's annual budget under its Investor
Shares Distribution Plan adopted in accordance with Rule 12b-1 under the
Investment Company Act of 1940, the Trust shall reimburse the Distributor for
(i) the cost of preparing and printing prospectuses and statements of additional
information, reports to Shareholders, sales literature and other materials for
potential investors, (ii) advertising, (iii) expenses incurred in connection
with the distribution of shares.
ARTICLE 6. INDEMNIFICATION OF DISTRIBUTOR. The Trust agrees to indemnify
and hold harmless the Distributor and each of its directors and officers and
each person, if any, who controls the Distributor within the meaning of Section
15 of the 1933 Act against any loss, liability, claim, damages or expense
(including the reasonable cost of investigating or defending any alleged loss,
liability, claim, damages, or expense and reasonable counsel fees and
disbursements incurred in connection therewith), arising by reason of any person
acquiring any Shares, based upon the ground that the registration statement,
prospectus, Shareholder reports or other information filed or made public by the
Trust (as from time to time amended) included an untrue statement of a material
fact or omitted to state a material fact required to be stated or necessary in
order to make the statements made not misleading. However, the Trust does not
agree to indemnify the Distributor or hold it harmless to the extent that the
statements or omission was made in reliance upon, and in conformity with,
information furnished to the Trust by or on behalf of the Distributor.
In no case (i) is the indemnity of the Trust to be deemed to protect the
Distributor against any liability to the Trust or its Shareholders to which the
Distributor or such person otherwise would be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
by reason of its reckless disregard of its obligations and duties under this
Agreement, or (ii) is the Trust to be liable to the Distributor under the
indemnity agreement contained in this paragraph with respect to any claim made
against the Distributor or any person indemnified unless the Distributor or
2
<PAGE>
other person shall have notified the Trust in writing of the claim within a
reasonable time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon the
Distributor or such other person (or after the Distributor or the person shall
have received notice of service on any designated agent). However, failure to
notify the Trust of any claim shall not relieve the Trust from any liability
which it may have to the Distributor or any person against whom such action is
brought otherwise than on account of its indemnity agreement contained in this
paragraph.
The Trust shall be entitled to participate at its own expense in the
defense or, if it so elects, to assume the defense of any suit brought to
enforce any claims subject to this indemnity provision. If the Trust elects to
assume the defense of any such claim, the defense shall be conducted by counsel
chosen by the Trust and satisfactory to the indemnified defendants in the suit
whose approval shall not be unreasonably withheld. In the event that the Trust
elects to assume the defense of any suit and retain counsel, the indemnified
defendants shall bear the fees and expenses of any additional counsel retained
by them. If the Trust does not elect to assume the defense of a suit, it will
reimburse the indemnified defendants for the reasonable fees and expenses of any
counsel retained by the indemnified defendants.
The Trust agrees to notify the Distributor promptly of the commencement of
any litigation or proceedings against it or any of its officers or Trustees in
connection with the issuance or sale of any of its Shares.
ARTICLE 7. INDEMNIFICATION OF TRUST. The Distributor covenants and agrees
that it will indemnify and hold harmless the Trust and each of its Trustees and
officers and each person, if any, who controls the Trust within the meaning of
Section 15 of the Act, against any loss, liability, damages, claim or expense
(including the reasonable cost of investigating or defending any alleged loss,
liability, damages, claim or expense and reasonable counsel fees incurred in
connection therewith) based upon the 1933 Act or any other statute or common law
and arising by reason of any person acquiring any Shares, and alleging a
wrongful act of the Distributor or any of its employees or alleging that the
registration statement, prospectus, Shareholder reports or other information
filed or made public by the Trust (as from time to time amended) included an
untrue statement of a material fact or omitted to state a material fact required
to be stated or necessary in order to make the statements not misleading,
insofar as the statement or omission was made in reliance upon and in conformity
with information furnished to the Trust by or on behalf of the Distributor.
In no case (i) is the indemnity of the Distributor in favor of the Trust or
any other person indemnified to be deemed to protect the Trust or any other
person against any liability to which the Trust or such other person would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement, or (ii) is the
Distributor to be liable under its indemnity agreement contained in this
paragraph
3
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with respect to any claim made against the Trust or any person indemnified
unless the Trust or person, as the case may be, shall have notified the
Distributor in writing of the claim within a reasonable time after the summons
or other first written notification giving information of the nature of the
claim shall have been served upon the Trust or upon any person (or after the
Trust or such person shall have received notice of service on any designated
agent). However, failure to notify the Distributor of any claim shall not
relieve the Distributor from any liability which it may have to the Trust or any
person against whom the action is brought otherwise than on account of its
indemnity agreement contained in this paragraph.
The Distributor shall be entitled to participate, at its own expense, in
the defense or, if it so elects, to assume the defense of any suit brought to
enforce the claim, but if the Distributor elects to assume the defense, the
defense shall be conducted by counsel chosen by the Distributor and satisfactory
to the indemnified defendants whose approval shall not be unreasonably
withheld. In the event that the Distributor elects to assume the defense of
any suit and retain counsel, the defendants in the suit shall bear the fees and
expenses of any additional counsel retained by them. If the Distributor does
not elect to assume the defense of any suit, it will reimburse the indemnified
defendants in the suit for the reasonable fees and expenses of any counsel
retained by them.
The Distributor agrees to notify the Trust promptly of the commencement of
any litigation or proceedings against it in connection with the issue and sale
of any of the Trusts' Shares.
ARTICLE 8. EFFECTIVE DATE. This Agreement shall be effective upon its
execution, and unless terminated as provided, shall continue in force for one
year from the effective date and thereafter from year to year, provided that
such annual continuance is approved by (i) either the vote of a majority of the
Trustees of the Trust, or the vote of a majority of the outstanding voting
securities of the Trust, and (ii) the vote of a majority of those Trustees of
the Trust who are not parties to this Agreement or the Trust's Distribution Plan
or interested persons of any such party ("Qualified Trustees"), cast in person
at a meeting called for the purpose of voting on the approval. This Agreement
shall automatically terminate in the event of its assignment. As used in this
paragraph the terms "vote of a majority of the outstanding voting securities",
"assignment" and "interested person" shall have the respective meanings
specified in the 1940 Act. In addition, this Agreement may at any time be
terminated without penalty by SFS, by a vote of a majority of Qualified Trustees
or by vote of a majority of the outstanding voting securities of the Trust upon
not less that sixty days prior written notice to the other party.
ARTICLE 9. NOTICES. Any notice required or permitted to be given by either
party to the other shall be deemed sufficient if sent by registered or certified
mail, postage prepaid, addressed by the party giving notice to the other party
at the last address furnished by the other party to the party giving the notice:
if to the Trust, at 680 East Swedesford Road, Wayne, Pennsylvania, and if to the
Distributor, 680 East Swedesford
4
<PAGE>
Road, Wayne, Pennsylvania 19087.
ARTICLE 10. LIMITATION OF LIABILITY. A copy of the Declaration of Trust of
the Trust is on file with the Secretary of State of the Commonwealth of
Massachusetts, and notice is hereby given that this Agreement is executed on
behalf of the Trustees of the Trust as Trustees and not individually and that
the obligations of this instrument are not binding upon any of the Trustees,
officers or unitholders of the Trust individually but binding only upon the
assets and property of the Trust.
ARTICLE 11. GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the Commonwealth of Massachusetts and the applicable provisions
of the 1940 Act. To the extent that the applicable laws of the Commonwealth of
Massachusetts, or any of the provisions herein, conflict with the applicable
provisions of the 1940 Act, the latter shall control.
ARTICLE 12. MULTIPLE ORIGINALS. This Agreement may be executed in two or
more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but on and the same
instrument.
IN WITNESS, the Trust and Distributor have each duly executed this
agreement, as of the day and year above written.
STI CLASSIC FUNDS
BY: /s/ illegible signature
----------------------------
SEI FINANCIAL SERVICES COMPANY
BY: /s/ illegible signature
----------------------------
5
<PAGE>
EXHIBIT 99.B11
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our firm
name included in the Post-Effective Amendment No. 16 to the Registration
Statement on Form N-1A of the STI Classic Funds (No. 33-45671), and to all
references to our firm included in this Registration Statement File No.
33-45671.
Arthur Andersen LLP
Philadelphia, PA
September 13, 1996
<PAGE>
EX-99.B15A
RETAIL TRANSFER AGENT AGREEMENT
INVESTOR SHARES
THIS AGREEMENT is made as of this 29th day of May, 1992, by and between STI
Classic Funds (the "Trust"), a Massachusetts business trust, and SEI Financial
Management Corporation (the "Transfer Agent" or "SEI"), a Delaware corporation.
WHEREAS, the Trust is an open-end diversified management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Transfer Agent is a transfer agent registered under the
Securities Exchange Act of 1934; and
WHEREAS, the Transfer Agent and the Trust are parties to an Administration
Agreement dated May 29, 1992, (the "Administration Agreement")
WHEREAS, the Trust desires the Transfer Agent to provide, and the Transfer
Agent is willing to provide, in addition to the services provided under the
Administration Agreement, retail transfer agent services to the investor Shares
Shareholders of the Trust's portfolios listed in Schedule A which is attached
hereto and made a part of this Agreement, and such other portfolios, or classes
of portfolios, as the Trust and the Transfer Agent may agree on ("Portfolios"),
on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Trust and the Transfer Agent hereby agree as follows:
ARTICLE 1. RETENTION OF THE TRANSFER AGENT. The Trust hereby retains the
Transfer Agent to act as the Transfer Agent of Investor Shares of the Portfolios
and to furnish the Portfolios with the retail transfer agent services as set
forth below. The Transfer Agent hereby accepts such employment to perform the
duties set forth below.
The Transfer Agent shall, for all purposes herein, be deemed to be an
independent contractor and, unless otherwise expressly provided or authorized,
shall have no authority to act for or represent the Trust in any way and shall
not be deemed an agent of the Trust. All of the Transfer Agent's duties shall be
subject always to the objectives, policies and restrictions contained in the
Trust's current registration statement under the 1940 Act, to the Trust's
Declaration of Trust and By-Laws, to the provisions of the 1940 Act, and to any
other guidelines that may be established by the Trust's Trustees and which are
furnished to the Transfer Agent by the Trust.
1
<PAGE>
ARTICLE 2. TRANSFER AGENT SERVICES. The Transfer Agent will act as
Transfer Agent for the Portfolios' retail accounts and, as such, will record
in an account (the "Account") the total number of units of beneficial
interest ("Shares") of each Portfolio issued and outstanding from time to
time and will maintain Share transfer records in which it will note the names
and registered addresses of Shareholders, and the number of Shares from time
to time owned by each of them. Each Shareholder will be assigned one or more
account numbers.
The Transfer Agent is authorized to set up accounts for shareholders and
record transactions in the accounts on the basis of instructions received from
Shareholders when accompanied by remittance in an appropriate amount and form as
provided in the Trust's then current prospectus. The Trust will not issue
certificates representing its Shares. Whenever Shares are purchased or issued,
the Transfer Agent shall credit the Account with the Shares issued, and credit
the proper number of Shares to the appropriate Shareholder.
Likewise, whenever the Transfer Agent has occasion to redeem Shares owned
by a Shareholder, the Trust authorizes the Transfer Agent to process the
transaction by making appropriate entries in its Share transfer records and
debiting the Account.
Upon notification by the Trust's Custodian of the receipt of funds through
the Federal Reserve wire system or conversion into Federal funds of funds
transmitted by other means for the purchase of Shares in accordance with the
Trust's current prospectus, the Transfer Agent shall notify the Trust of such
deposits on a daily basis.
The Transfer Agent shall credit each Shareholder's account with the number
of units purchased according to the price of the Shares in effect for such
purchases determined in the manner set forth in the Trust's then current
prospectus. The Transfer Agent shall process each order for the redemption of
Shares from or on behalf of a Shareholder, and shall cause cash proceeds to be
wired in Federal funds.
The requirements as to instruments of transfer and other documentation, the
applicable redemption price and the time of payment shall be as provided for in
the then current prospectus, subject to such supplemental requirements
consistent with such prospectus as may be established by mutual agreement
between the Trust and the Transfer Agent.
If the Transfer Agent or the Trust's Distributor determines that a request
for redemption does not comply with the requirements for redemption, the
Transfer Agent shall promptly so notify the Shareholder, together with the
reason therefor, and shall effect such redemption at the price next determined
after receipt of documents complying with said standards.
2
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On each day that the Trust's Custodian and the New York Stock Exchange are
open for business ("Business Day"), the Transfer Agent shall notify the
Custodian of the amount of cash or other assets required to meet payments made
pursuant to the provisions of this Article 2, and the Trust shall instruct the
Custodian to make available from time to time sufficient funds or other assets
therefor.
The authority of the Transfer Agent to perform its responsibilities as to
purchases and redemptions shall be suspended upon receipt by it of notification
from the Securities and Exchange Commission or the Trustees of the suspension of
the determination of the Trust's net asset value.
In registering transfers, the Transfer Agent may rely upon the opinion of
counsel in not requiring complete documentation, in registering transfers
without inquiry into adverse claims, in delaying registration for purposes of
such inquiry, or in refusing registration where in its judgment an adverse claim
requires such refusal.
ARTICLE 3. COMPENSATION OF THE TRANSFER AGENT.
(A) TRANSFER AGENT. For the services to be rendered, the facilities
furnished and the expenses assumed by the Transfer Agent pursuant to
this Agreement, the Trust shall pay to the Transfer Agent compensation
at an annual rate specified in the Schedule B which is attached hereto
and made a part of this Agreement. Such compensation shall be accrued
daily, and paid to the Transfer Agent monthly.
If this agreement becomes effective subsequent to the first day of a
month or terminates before the last day of a month, the Transfer
Agent's compensation for that part of the month in which this
Agreement is in efect shall be prorated in a manner consistent with
the calculation of the fees as set forth above. Payment of the
Transfer Agent's compensation for the preceding month shall be made
promptly.
(B) SURVIVAL OF COMPENSATION RIGHTS. All rights of compensation under
this Agreement for services performed as of the termination date shall
survive the termination of this Agreement.
ARTICLE 4. LIMITATION OF LIABILITY OF THE TRANSFER AGENT. The duties of
the Transfer Agent shall be confined to those expressly set forth herein, and no
implied duties are assumed by or may be asserted against the Transfer Agent
hereunder. The Transfer Agent shall not be liable for any error of judgement or
mistake of law or for any act or omission in carrying out its duties hereunder,
except a loss resulting from willful misfeasance, bad faith or gross negligence
in the performance of its duties, or by reason of reckless disregard of its
obligations and duties hereunder, except as may otherwise be provided under
provisions of applicable state law which cannot be waived or modified
3
<PAGE>
hereby. (As used in this Article 4, the term "Transfer Agent" shall include
directors, officers, employees, sub-contracts and other corporate agents of the
Transfer Agent as well as that corporation itself).
So long as the Transfer Agent does not violate the standard of care set
forth herein, the Trust assumes full responsibility and shall indemnify the
Transfer Agent and hold it harmless from and against any and all actions, suits
and claims, whether groundless or otherwise, and from and against any and all
losses, damages, costs, charges, reasonable counsel fees and disbursements,
payments, expenses and liabilities (including reasonable investigation expenses
and attorney's fees) arising directly or indirectly out of said administration,
transfer agency, and dividend disbursing relationships to the Trust or any other
service rendered to the Trust hereunder. The indemnity and defense provisions
set forth herein shall indefinitely survive the termination of this Agreement.
The rights hereunder shall include the right to reasonable advances of
defense expenses in the event of any pending or threatened litigation with
respect to which indemnification hereunder may ultimately be merited. In order
that the indemnification provision contained herein shall apply, however, it is
understood that if in any case the Trust may be asked to indemnify or hold the
Transfer Agent harmless, the Trust shall be fully and promptly advised of all
pertinent facts concerning the situation in question, and it is further
understood that the Transfer Agent will use all reasonable care to identify and
notify the Trust promptly concerning any situation which presents or appears
likely to present the probability of such a claim for indemnification against
the Trust, but failure to do so in good faith shall not effect the rights
hereunder.
The Transfer Agent may apply to the Trust at any time for instructions and
may consult counsel for the Trust or its own counsel and with accountants and
other experts with respect to any matter arising in connection with the Transfer
Agent's duties, and the Transfer Agent shall not be liable or accountable for
any action taken or omitted by it in good faith in accordance with such
instruction or with the opinion of such counsel, accountants or other experts.
The Transfer Agent shall be protected in acting upon any document which it
reasonably believes to be genuine and to have been signed or presented by the
proper person or persons. Nor shall the Transfer Agent be held to have notice
of any change of authority of any officers, employee or agent of the Trust until
receipt of written notice thereof from the Trust.
ARTICLE 5. ACTIVITIES OF THE TRANSFER AGENT. The services of the Transfer
Agent rendered to the Trust are not to be deemed to be exclusive. The Transfer
Agent is free to render such services to others and to have other businesses and
interests. It is understood that Trustees, officers, employees and Shareholders
of the Trust are or may be or become interested in the Transfer Agent, as
directors, officers, employees and
4
<PAGE>
shareholders or otherwise and that directors, officers, employees, and
shareholders of the Transfer Agent and its counsel are or may be or become
similarly interested in the Trust, and that the Transfer Agent may be or become
interested in the Trust as a Shareholder or otherwise.
ARTICLE 5. TERM OF THIS AGREEMENT. This Agreement shall remain in effect
for 2 years after the date of the Agreement and shall continue in effect
thereafter, for periods of two years so long as such continuance is specifically
approved by the vote of a majority of the Trustees of the Trust. SEI reserves
the right to terminate this Agreement if the Administration Agreement is
terminated for any reason. Upon termination of this Agreement all out-of-pocket
expenses associated with the movement of records and material will be borne by
the Trust.
In the event of a material breach of this Agreement by either party, the
non-breaching party shall notify the breaching party in writing of such breach
and upon receipt of such notice, the breaching party shall have 45 days to
remedy the breach or the non-breaching party may terminate this Agreement
immediately.
This Agreement shall not be assignable by either party without the written
consent of the other party.
ARTICLE 7. AMENDMENTS. This Agreement may be amended by the parties
hereto only if such amendment is specifically approved (i) by the vote of a
majority of the Trustees of the Trust, and (ii) by the vote of a majority of the
Trustees of the Trust who are not parties to this Agreement or interested
persons of any such party, cast in person at a Board of Trustees meeting called
for the purpose of voting on such approval.
For special cases, the parties hereto may amend such procedures set forth
herein as may be appropriate or practical under the circumstances, and the
Transfer Agent may conclusively assume that any special procedure which has been
approved by the Trust does not conflict with or violate any requirements of its
Declaration of Trust, By-Laws or prospectus, or any rule, regulation or
requirement of any regulatory body.
ARTICLE 8. TRUSTEE'S LIABILITY. A copy of the Declaration of Trust of the
Trust is on file with the Secretary of State of the Commonwealth of
Massachusetts, and notice is hereby given that this instrument is executed on
behalf of the Trustees of the Trust as Trustees and not individually and that
the obligations of this Instrument are not binding upon any of the Trustees,
officers or Shareholders of the Trust individually, but binding only upon the
assets and property of the Trust.
ARTICLE 9. CERTAIN RECORDS. The Transfer Agent shall maintain customary
records in connection with its duties as specified in this Agreement. Any
records required to be maintained and preserved pursuant to Rules 31a-1 and
31a-2 under the 1940 Act which are prepared or maintained by the Transfer Agent
on behalf of the Trust shall be
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prepared and maintained at the expense of the Transfer Agent, but shall be the
property of the Trust an will be made available to or surrendered promptly to
the Trust on request.
In case of any request or demand for the inspection of such records by
another party, the Transfer Agent shall notify the Trust and follow the Trust's
instructions as to permitting or refusing such inspection; provided that the
Transfer Agent may exhibit such records to any person in any case where it is
advised by its counsel that it may be held liable for failure to do so, unless
(in cases involving potential exposure only to civil liability) the Trust has
agreed to indemnify the Transfer Agent against such liability.
ARTICLE 10. DEFINITIONS OF CERTAIN TERMS. The terms "interested person"
and "affiliated person", when used in this Agreement, shall have the respective
meanings specified in the 1940 Act and the rules and regulations thereunder,
subject to such exemptions as may be granted by the Securities and Exchange
Commission.
ARTICLE 11. NOTICE. Any notice required or permitted to be given by
either party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice to the
other party at the last address furnished by the other party to the party giving
notice: if to the Trust, at 680 East Swedesford Road, Wayne, PA, and if to the
Transfer Agent at 680 East Swedesford Road, Wayne, PA.
ARTICLE 12. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the Commonwealth of Massachusetts and the applicable
provisions of the 1940 act. To the extent that the applicable laws of the
Commonwealth of Massachusetts, or any of the provisions herein, conflict with
the applicable provisions of the 1940 act, the latter shall control.
ARTICLE 13. MULTIPLE ORIGINALS. This Agreement may be executed in two or
more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
STI CLASSIC FUNDS
By: /s/ ILLEGIBLE SIGNATURE
-------------------------------
SEI FINANCIAL MANAGEMENT CORPORATION
By: /s/ ILLEGIBLE SIGNATURE
--------------------------------
6
<PAGE>
SCHEDULE A
TO THE TRANSFER AGENT AGREEMENT
DATED
--------------
BETWEEN
STI CLASSIC FUNDS
AND
SEI FINANCIAL MANAGEMENT CORPORATION
Pursuant to the Preamble, the Transfer Agent shall provide services to Investor
Shares of the following Portfolios:
Prime Quality
U.S. Government Securities
Investment Grade Bond
Investment Grade Tax-Exempt Bond
Capital Growth
Tax-Exempt Money Market Fund
7
<PAGE>
SCHEDULE B
TO THE TRANSFER AGENT AGREEMENT DATED
----------
BETWEEN
STI CLASSIC FUNDS
AND
SEI FINANCIAL MANAGEMENT CORPORATION
Pursuant to Article 6, Section A, the Trust shall pay the Transfer Agent
compensation as follows:
SEI will provide transfer and dividend disbursing agent services on the STI
Classic Funds (Investor Shares) starting in approximately April, 1992.
General
- -------
Fees are based on an annual per shareholder account charge plus out-of-pocket
expenses and assume Equity and Bond Portfolios are processed through Fund/Serv
and Money Market Portfolios are processed by SEI through the MAS system. Annual
maintenance charges for various portfolio types are given below.
Annual Account Charges Equity/Bond Portfolios
- ---------------------------------------------
Fees are billable on a monthly basis at the rate of 1/12 of the annual fee.
Equity Accounts $16.00/year per account
Bond Fund Accounts $10.00/year per account
There is an annual minimum charge of $25,000 for each Bond Portfolio and an
annual minimum charge of $40,000 for the Equity Portfolio.
Annual Account Charges (Money Market Portfolios)
- ------------------------------------------------
Fees are billable on a monthly basis at the rate of 1/12 of the annual fee.
Money Market Accounts $4.00/year per account
There is an annual minimum charge of $10,000 per Money Market Portfolio.
8
<PAGE>
The above minimums include:
- Transaction reconciliation with bank and custodian
- Transmission monitoring and processing
- System accessibility
- Daily NAV and yield updates
- On-going support
- Production and maintenance of system reports
- On-going training for bank staff
- "Help Desk" for bank systems users
- Processing of incoming and outgoing interfaces (bank and custodian)
- System support
- NAV and dividend rate nightly updates
- Month end dividend processing
- Capital gains processing, if needed
- Production of confirms and statements
- Transmission of print files to bank
- Production, printing and storage of system reports
- Production and maintenance of microfiche records
- Maintenance of system security records and passwords
- Maintenance of all system tables
- Maintenance of all dealer files
- Production of monthly 12(b)-1
- 1099 production and filing with the IRS
- Backup withholding and NRA tax processing
Operation/systems training time requirements for SunTrust employees will be
determined jointly by SunTrust/SEI. Costs for such training may run $1,500 per
day plus travel expenses, but are negotiable.
HARDWARE/OPERATIONS COSTS (MONEY MARKET FUNDS)
Preliminary discussions with SEI indicate that an SEI/SunTrust mainframe to
mainframe systems solution utilizing the SEI MAS system will be used. Under
this arrangement only one dedicated line will be required.
In general hardware/telecommunications costs per user location, if needed, will
approximate the following:
Terminal $800 (one-time)
Modem $3,000 (one-time)
Printer $250 month
Controller $166 month
Dedicated line $900 month
9
<PAGE>
OTHER FEES (MONEY MARKET, EQUITY, BOND PORTFOLIOS)
Closed Accounts $2.00 per Account
OUT-OF-POCKET EXPENSES
Out-of-pocket expenses will include but are not limited to confirmation
production, postage, forms, stationery, offsite storage, voice response system,
telephone, microfilm, microfiche, shareholder telephone calls, shareholder
letters, proxy solicitations, and expenses incurred at the specific direction of
the Fund such as custom programming.
10
<PAGE>
SCHEDULE A
TO THE TRANSFER AGENT AGREEMENT
DATED FEBRUARY 26, 1993
BETWEEN
STI CLASSIC FUNDS
AND
SEI FINANCIAL MANAGEMENT CORPORATION
Pursuant to the Preamble, the Transfer Agent shall provide services to Investor
Shares of the following Portfolios:
Prime Quality
U.S. Government Securities
Investment Grade Bond
Investment Grade Tax-Exempt Bond
Capital Growth
Tax-Exempt Money Market Fund
Value Income Stock Fund
Short-Term Bond Fund
Short-Term U.S. Treasury Fund
7
