<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 15, 1999
FILE NO. 33-50718
FILE NO. 811-7102
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 / /
POST-EFFECTIVE AMENDMENT NO. 25 /X/
AND
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 / /
AMENDMENT NO. 27 /X/
------------------------
THE ARBOR FUND
(Exact Name of Registrant as Specified in Charter)
2 OLIVER STREET
BOSTON, MASSACHUSETTS 02109
(Address of Principal Executive Offices, Zip Code)
Registrant's Telephone Number, including Area Code (800) 342-5734
MARK E. NAGLE
C/O SEI CORPORATION
OAKS, PENNSYLVANIA 19456
(Name and Address of Agent for Service)
COPIES TO:
RICHARD W. GRANT, ESQUIRE
MORGAN, LEWIS & BOCKIUS LLP
1701 MARKET STREET
PHILADELPHIA, PA 19103
------------------------
It is proposed that this filing become effective (check appropriate box)
/ / immediately upon filing pursuant to paragraph (b)
/ / on [date] pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)
/X/ 75 days after filing pursuant to paragraph (a)
/ / on [date] pursuant to paragraph (a) of Rule 485.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
THE ARBOR FUND
INSTITUTIONAL SHARES AND CLASS A SHARES
PROSPECTUS
SEPTEMBER 1, 1999
GOLDEN OAK SMALL CAP VALUE PORTFOLIO
INVESTMENT ADVISER
CITIZENS BANK
INVESTMENT SUB-ADVISER
SYSTEMATIC FINANCIAL MANAGEMENT, L.P.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Page 1 of 16
<PAGE>
HOW TO READ THIS PROSPECTUS
The Golden Oak Family of Funds is a mutual fund family that offers different
classes of shares in separate investment portfolios (Portfolios). The Portfolios
have individual investment goals and strategies. This prospectus gives you
important information about the Institutional Shares and Class A Shares of the
Golden Oak Small Cap Value Portfolio that you should know before investing.
Please read this prospectus and keep it for future reference.
This prospectus has been arranged into different sections so that you can easily
review this important information. For more detailed information about the
Portfolio, please see:
<TABLE>
<CAPTION>
PAGE
<S> <C>
GOLDEN OAK SMALL CAP VALUE PORTFOLIO
INVESTMENT STRATEGIES AND PRINCIPAL RISKS........................................XXX
PERFORMANCE INFORMATION AND EXPENSES...............................................XXX
MORE INFORMATION ABOUT RISK........................................................XXX
THE PORTFOLIO'S OTHER INVESTMENTS..................................................XXX
INVESTMENT ADVISER AND SUB-ADVISER ................................................XXX
PORTFOLIO MANAGERS.................................................................XXX
PURCHASING, SELLING AND EXCHANGING PORTFOLIO SHARES................................XXX
DISTRIBUTION OF PORTFOLIO SHARES...................................................XXX
DIVIDENDS AND DISTRIBUTIONS........................................................XXX
TAXES..............................................................................XXX
HOW TO OBTAIN MORE INFORMATION ABOUT THE
GOLDEN OAK FAMILY OF FUNDS.......................................................Back Cover
</TABLE>
Page 2 of 16
<PAGE>
GOLDEN OAK SMALL CAP VALUE PORTFOLIO
PORTFOLIO SUMMARY
INVESTMENT GOAL Long-term capital appreciation
INVESTMENT FOCUS Small capitalization U.S. common stocks
SHARE PRICE VOLATILITY High
PRINCIPAL INVESTMENT STRATEGY Investing in common stocks of small companies
which are undervalued relative to a company's
cash flow
INVESTOR PROFILE Investors who seek long term capital
appreciation and who are willing to bear the
risks of investing in small cap stocks
INVESTMENT STRATEGY OF THE GOLDEN OAK SMALL CAP VALUE PORTFOLIO
The Portfolio invests primarily (at least 65% of its assets) in common stocks of
U.S. companies with small capitalizations (less than $1 billion). The Adviser
has engaged Systematic Financial Management, L.P. as sub-adviser (Sub-Adviser)
to manage the Portfolio on a day-to-day basis. In choosing investments for the
Portfolio, the Sub-Adviser invests in companies that are generating cash flow,
have low levels of debt and which it believes are undervalued relative to a
company's ability to generate cash flows. The Sub-Adviser makes investments in
these companies based on its fundamental research and analysis of various
characteristics, including financial statements, sales and expense trends,
earnings estimates, market position of the company and industry outlook. The
Sub-Adviser also looks for "catalysts" which could positively or negatively
affect prices of current and potential Portfolio companies.
PRINCIPAL RISKS OF INVESTING IN THE GOLDEN OAK SMALL CAP VALUE PORTFOLIO
Since it purchases common stocks, the Portfolio is subject to the risk that
stock prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Portfolio's equity
securities may fluctuate drastically from day-to-day. Individual companies may
report poor results or be negatively affected by industry and/or economic trends
and developments. The prices of securities issued by such companies may suffer a
decline in response. These factors contribute to price volatility, which is the
principal risk of investing in the Portfolio.
The smaller capitalization companies the Portfolio invests in may be more
vulnerable to adverse business or economic events than larger, more established
companies. In particular, these small companies may have limited product lines,
markets and financial resources, and may depend upon a relatively small
management group. Therefore, small cap stocks may be more volatile than those of
larger companies. These securities may be traded over-the-counter or listed on
an exchange and may or may not pay dividends.
Page 3 of 16
<PAGE>
The Portfolio is also subject to the risk that its market segment, small
capitalization value stocks, may underperform other equity market segments or
the equity market as a whole.
PERFORMANCE INFORMATION
The Portfolio is new and did not have performance information at the time this
prospectus was printed.
PORTFOLIO FEES AND EXPENSES
THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
PORTFOLIO SHARES.
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES CLASS A SHARES
<S> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)* None 5.75%
Maximum Deferred Sales Charge (Load)
(as a percentage of net asset value) None None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and
other Distributions
(as a percentage of offering price) None None
Redemption Fee
(as a percentage of amount redeemed, if applicable) None None
Exchange Fee None None
</TABLE>
* This sales charge varies depending upon how much you invest. See "Purchasing
Portfolio Shares."
ANNUAL PORTFOLIO OPERATING EXPENSES (EXPENSES DEDUCTED FROM PORTFOLIO ASSETS)*
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES CLASS A SHARES
- --------------------------------------------------------------------- ---------------------- ------------------
<S> <C> <C>
Investment Advisory Fees .99% .99%
Distribution and Service (12b-1) Fees None .25%
Other Expenses .36% .36%
- --------------------------------------------------------------------- ---------------------- ------------------
Total Annual Portfolio Operating Expenses 1.35% 1.60%
</TABLE>
For more information about these fees, see "Investment Adviser and Sub-Adviser"
and "Distribution of Portfolio Shares."
EXAMPLE
This Example is intended to help you compare the cost of investing in the
Portfolio with the cost of investing in other mutual funds. The Example assumes
that you invest $10,000 in the Portfolio for the time periods indicated and that
you sell your shares at the end of the period.
The Example also assumes that each year your investment has a 5% return,
Portfolio operating expenses remain the same and you reinvest all dividends and
distributions. Although your actual costs and returns might be different, your
estimated costs of investing $10,000 in the Portfolio would be:
<TABLE>
1 YEAR 3 YEARS
<S> <C> <C>
INSTITUTIONAL SHARES $137 $428
CLASS A SHARES $728 $1,051
</TABLE>
Page 4 of 16
<PAGE>
MORE INFORMATION ABOUT RISK
The Portfolio is a mutual fund. A mutual fund pools shareholders' money and,
using professional investment managers, invests it in securities.
The Portfolio has its own investment goal and strategies for reaching that goal.
The investment managers invest Portfolio assets in a way that they believe will
help the Portfolio achieve its goal. Still, investing in the Portfolio involves
risk and there is no guarantee that the Portfolio will achieve its goal. An
investment manager's judgments about the markets, the economy, or companies may
not anticipate actual market movements, economic conditions or company
performance, and these judgments may affect the return on your investment. In
fact, no matter how good a job an investment manager does, you could lose money
on your investment in the Portfolio, just as you could with other investments. A
PORTFOLIO SHARE IS NOT A BANK DEPOSIT AND IT IS NOT INSURED OR GUARANTEED BY THE
FDIC OR ANY GOVERNMENT AGENCY.
The value of your investment in the Portfolio is based on the market value of
the securities the Portfolio holds. These prices change daily due to economic
and other events that affect particular companies and other issuers. These price
movements, sometimes called volatility, may be greater or lesser depending on
the types of securities the Portfolio owns and the markets in which they trade.
The effect on the Portfolio of a change in the value of a single security will
depend on how widely the Portfolio diversifies its holdings.
EQUITY RISK - Equity securities include public and privately issued equity
securities, common and preferred stocks, warrants, rights to subscribe to common
stock and convertible securities, as well as instruments that attempt to track
the price movement of equity indices. Investments in equity securities and
equity derivatives in general are subject to market risks that may cause their
prices to fluctuate over time. The value of securities convertible into equity
securities, such as warrants or convertible debt, is also affected by prevailing
interest rates, the credit quality of the issuer and any call provision.
Fluctuations in the value of equity securities in which a mutual fund invests
will cause the Portfolio's net asset value to fluctuate. An investment in a
portfolio of equity securities may be more suitable for long-term investors who
can bear the risk of these share price fluctuations.
YEAR 2000 RISK - The Portfolio depends on the smooth functioning of computer
systems in almost every aspect of its business. Like other mutual funds,
businesses and individuals around the world, the Portfolio could be adversely
affected if the computer systems used by its service providers do not properly
process dates on and after January 1, 2000, and distinguish between the year
2000 and the year 1900. The Portfolio has asked its service providers whether it
expects to have its computer systems adjusted for the year 2000 transition, and
are seeking assurances from each service provider that they are devoting
significant resources to prevent material adverse consequences to the Portfolio.
While it is likely that such assurances will be obtained, the Portfolio and its
shareholders may experience losses if these assurances prove to be incorrect, or
as a result of year 2000 computer difficulties experienced by issuers of
portfolio securities or third parties, such as custodians, banks, broker-dealers
or others with which the Portfolio does business.
Page 5 of 16
<PAGE>
THE PORTFOLIO'S OTHER INVESTMENTS
This prospectus describes the Portfolio's primary strategies, and the Portfolio
will normally invest in the types of securities described in this prospectus.
However, in addition to the investments and strategies described in this
prospectus, the Portfolio also may invest in other securities, use other
strategies and engage in other investment practices. These investments and
strategies, as well as those described in this prospectus, are described in
detail in our Statement of Additional Information.
The investments and strategies described in this prospectus are those that we
use under normal conditions. During unusual economic or market conditions, or
for temporary defensive or liquidity purposes, the Portfolio may invest up to
100% of its assets in cash or money market instruments that would not ordinarily
be consistent with the Portfolio's objectives. The Portfolio will do so only if
the Adviser or Sub-Adviser believes that the risk of loss outweighs the
opportunity for capital gains. Of course, we cannot guarantee that the Portfolio
will achieve its investment goal.
INVESTMENT ADVISER AND SUB-ADVISER
The Investment Adviser oversees the Sub-Adviser to ensure compliance with the
Portfolio's investment policies and guidelines, and monitors the Sub-Adviser's
adherence to its investment style. The Board of Trustees of The Arbor Fund
supervises the Adviser and Sub-Adviser and establishes policies that the Adviser
and Sub-Adviser must follow in their management activities.
Citizens Bank serves as the Adviser to the Portfolio. Citizens Bank has managed
bank common funds, pension plan assets and personal trust assets since 1927. As
of January 1, 1999, Citizens Bank had approximately $3.5 billion in assets under
management. The Adviser is entitled to receive .34% of the Portfolio's average
daily net assets for its investment advisory services, but may receive less due
to waivers.
Systematic Financial Management, L.P. (Systematic) manages the Portfolio on a
day-to-day basis. Systematic selects, buys and sells securities for the
Portfolio under the supervision of the Adviser and the Board of Trustees. The
Sub-Adviser is entitled to receive .65% of the Portfolio's average daily net
asses for its services, but may receive less due to waivers.
PORTFOLIO MANAGERS
Gyanendra Kumar Joshi serves as Senior Managing Director of Systematic. He has
more than 26 years of investment experience. Prior to joining Systematic, Mr.
Joshi served as Managing Director of Mitchell Hutchins Institutional Investors.
Ken Burgess serves as Assistant Portfolio Manager and Senior Small Cap Analyst.
He specializes in cash flow analysis and devotes his efforts solely to the
portfolio management and analysis of small cap equities. Mr. Burgess has been a
part of the small cap investment process at Systematic since 1993.
Page 6 of 16
<PAGE>
THE SUB-ADVISER'S PAST PERFORMANCE
The following table represents the average annual return for all of the accounts
managed by Systematic with investment goals and strategies that are
substantially similar to those of the Portfolio and a comparison to the
Portfolio's performance benchmarks. These similarly managed accounts are
referred to as "composites." The composites were managed by the same portfolio
managers that currently manage the investments of the Portfolio. The composite
performance has been adjusted based on the applicable sales charges and the
estimated total operating expenses of the Portfolio. This adjustment reduces the
actual performance of the composites. The comparison of the composites to the
benchmarks is meant to provide you with a general sense of how the composites
performed compared to an appropriate broad-based equity market index. In
addition, the composites were not registered mutual funds so they were not
subject to the same investment and tax restrictions as the Portfolio. If they
had been, the composites' performance might have been lower. The past
performance of the composites is no guarantee of the future performance of the
Portfolio.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED _______
- -----------------------------------------------------------------------------------------------------------------------------
SINCE INCEPTION
COMPOSITES/BENCHMARKS 1 YEAR 5 YEARS (______)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Systematic Small Cap Equity Composite Portfolio (Reflects Total
Operating expenses of Institutional Shares) ____% ____% ____%
- -----------------------------------------------------------------------------------------------------------------------------
Systematic Small Cap Equity Composite Portfolio (Reflects Sales
Load and Total Operating Expenses of Class A Shares) ____% ____% ____%
- -----------------------------------------------------------------------------------------------------------------------------
Systematic Small Cap Equity Composite Portfolio (Without Sales
Load and Fees) ____% ____% ____%
- -----------------------------------------------------------------------------------------------------------------------------
Russell 2000 Value Index ____% ____% ____%
- -----------------------------------------------------------------------------------------------------------------------------
Russell 2000 Index ____% ____% ____%
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
PURCHASING, SELLING AND EXCHANGING PORTFOLIO SHARES
This section tells you how to buy, sell (sometimes called "redeem") and exchange
Institutional Shares and Class A Shares of the Portfolio.
The classes have different expenses and other characteristics.
INSTITUTIONAL SHARES
- NO SALES CHARGE
- NO 12b-1 FEES OR SHAREHOLDER FEES
- $1,000,000 MINIMUM INITIAL INVESTMENT
CLASS A SHARES
- FRONT-END SALES CHARGE
- 12b-1 FEES
- $1,000 MINIMUM INITIAL INVESTMENT
For some investors the minimum initial investment may be lower.
Page 7 of 16
<PAGE>
Institutional Shares are for financial institutions investing for their own or
their customers' accounts. For information on how to open an account and set up
procedures for placing transactions call 1-800-808-4920.
Class A Shares are for individual and institutional investors.
HOW TO PURCHASE PORTFOLIO SHARES
You may purchase shares directly by:
- - Mail (Class A only);
- - Telephone;
- - Wire;
- - Direct Deposit; or
- - Automated Clearing House (ACH).
To purchase shares directly from us, please call 1-800-808-4920, or complete and
send in the enclosed application. Unless you arrange to pay by wire or through
direct deposit or ACH, write your check, payable in U.S. dollars, to "Golden Oak
Family of Funds" and include the name of the Portfolio on the check. You cannot
purchase Institutional Shares by check. The Portfolio cannot accept third-party
checks, credit cards, credit card checks or cash.
You may also buy shares through accounts with brokers and other institutions
that are authorized to place trades in Portfolio shares for their customers. If
you invest through an authorized institution, you will have to follow its
procedures, which may be different from the procedures for investing directly.
Your institution may charge a fee for its services, in addition to the fees
charged by the Portfolio. You will also generally have to address your
correspondence or questions regarding the Portfolio to your institution.
GENERAL INFORMATION
You may purchase shares on any day that the New York Stock Exchange is open for
business (a Business Day). Shares cannot be purchased by Federal Reserve Wire on
days when either the New York Stock Exchange or the Federal Reserve is closed.
The Portfolio may reject any purchase order if it determines that accepting the
order would not be in the best interests of the Portfolio or its shareholders.
The price per share (the offering price) will be the net asset value per share
(NAV) next determined after the Portfolio receives your purchase order plus, in
the case of Class A Shares, the applicable front-end sales charge.
The Portfolio calculates its NAV once each Business Day at the
regularly-scheduled close of normal trading on the New York Stock Exchange
(normally, 4:00 p.m. Eastern time). So, for you to receive the current Business
Day's NAV, generally the Portfolio must receive your purchase order before 4:00
p.m. Eastern time.
HOW WE CALCULATE NAV
NAV for one Portfolio share is the value of that share's portion of all of the
net assets in the Portfolio.
Page 8 of 16
<PAGE>
In calculating NAV, the Portfolio generally values its investment portfolio at
market price. If market prices are unavailable or the Portfolio thinks that they
are unreliable, fair value prices may be determined in good faith using methods
approved by the Board of Trustees.
MINIMUM PURCHASES
To purchase shares for the first time, you must invest in the Portfolio at
least:
<TABLE>
<CAPTION>
CLASS DOLLAR AMOUNT
<S> <C>
Institutional Shares $1,000,000
Class A Shares $1,000 ($500 minimum for an IRA)
</TABLE>
Your subsequent investments in Class A Shares of the Portfolio must be made in
amounts of at least $50. There is no minimum for subsequent investments in
Institutional Shares.
The Portfolio may accept investments of smaller amounts for either class of
shares at it discretion.
SYSTEMATIC INVESTMENT PLAN (CLASS A ONLY)
If you have a checking or savings account with a bank, you may purchase Class A
shares automatically through regular deductions by ACH from your account in
amounts of at least $50 per month.
SALES CHARGES
FRONT-END SALES CHARGES - CLASS A SHARES
The offering price of Class A Shares is the NAV next calculated after the
Portfolio receives your request, plus the front-end sales load.
The amount of any front-end sales charge included in your offering price varies,
depending on the amount of your investment:
<TABLE>
<CAPTION>
IF YOUR INVESTMENT IS: YOUR SALES CHARGE AS A PERCENTAGE YOUR SALES CHARGE AS A PERCENTAGE
OF OFFERING PRICE OF YOUR NET INVESTMENT
<S> <C> <C>
LESS THAN $50,000 5.75% 6.10%
$50,000 BUT LESS THAN $100,000 4.50% 4.71%
$100,000 BUT LESS THAN $250,000 3.50% 3.63%
$250,000 BUT LESS THAN $500,000 2.60% 2.67%
$500,000 BUT LESS THAN $1,000,000 2.00% 2.04%
$1,000,000 AND OVER 0.00% 0.00%
</TABLE>
WAIVER OF FRONT-END SALES CHARGE - CLASS A SHARES
No sales charge is imposed on shares of the Portfolio:
- - issued in plans of reorganization, such as mergers involving the Portfolio;
- - sold to dealers or brokers that have a sales agreement with the
Distributor, for their own account or for retirement plans for their
employees or sold to employees (and their spouses) of dealers or brokers
that certify to the Distributor at the time of purchase that such purchase
is for their own account (or for the benefit of such employees' minor
children);
Page 9 of 16
<PAGE>
- - purchased in aggregate amounts of $1 million or more by tax exempt
organizations enumerated in Section 501(c) of the Code or employee
benefit plans created under Sections 401 or 457 of the Code;
- - sold to Trustees and officers of The Arbor Fund and employees of the
Adviser and its affiliates;
- - sold to agency, custody and fiduciary accounts of the Adviser and its
affiliates; or
- - purchased in connection with any asset allocation plan established by the
Adviser.
REDUCED SALES CHARGES - CLASS A SHARES
RIGHTS OF ACCUMULATION. In calculating the appropriate sales charge rate, this
right allows you to add the value of the Class A Shares you already own to the
amount that you are currently purchasing. The Portfolio will combine the value
of your current purchases with the current value of any Class A Shares you
purchased previously for (i) your account, (ii) your spouse's account, (iii) a
joint account with your spouse, or (iv) your minor children's trust or custodial
accounts. A fiduciary purchasing shares for the same fiduciary account, trust or
estate may also use this right of accumulation. The Portfolio will only consider
the value of Class A Shares purchased previously that were sold subject to a
sales charge. TO BE ENTITLED TO A REDUCED SALES CHARGE BASED ON SHARES ALREADY
OWNED, YOU MUST ASK US FOR THE REDUCTION AT THE TIME OF PURCHASE. You must
provide the Portfolio with your account number(s) and, if applicable, the
account numbers for your spouse and/or children (and provide the children's
ages). The Portfolio may amend or terminate this right of accumulation at any
time.
LETTER OF INTENT. You may purchase Class A Shares at the sales charge rate
applicable to the total amount of the purchases you intend to make over a
13-month period. In other words, a Letter of Intent allows you to purchase Class
A Shares of the Portfolio over a 13-month period and receive the same sales
charge as if you had purchased all the shares at the same time. The Portfolio
will only consider the value of Class A Shares sold subject to a sales charge.
As a result, Class A Shares purchased with dividends or distributions will not
be included in the calculation. To be entitled to a reduced sales charge based
on shares you intend to purchase over the 13-month period, you must send the
Portfolio a Letter of Intent. In calculating the total amount of purchases you
may include in your letter purchases made up to 90 days before the date of the
Letter. The 13-month period begins on the date of the first purchase, including
those purchases made in the 90-day period before the date of the Letter. Please
note that the purchase price of these prior purchases will not be adjusted.
You are not legally bound by the terms of your Letter of Intent to purchase the
amount of your shares stated in the Letter. The Letter does, however, authorize
the Portfolio to hold in escrow 5.0% of the total amount you intend to purchase.
If you do not complete the total intended purchase at the end of the 13-month
period, the Portfolio's transfer agent will redeem the necessary portion of the
escrowed shares to make up the difference between the reduced rate sales charge
(based on the amount you intended to purchase) and the sales charge that would
normally apply (based on the actual amount you purchased).
COMBINED PURCHASE/QUANTITY DISCOUNT PRIVILEGE. When calculating the appropriate
sales charge rate, the Portfolio will combine same day purchases of Class A
Shares (that are subject to a sales charge) made by you, your spouse and your
minor children (under age 21). This combination also applies to Class A Shares
you purchase with a Letter of Intent.
Page 10 of 16
<PAGE>
GENERAL INFORMATION ABOUT SALES CHARGES
Your securities dealer is paid a commission when you buy your shares and is paid
a servicing fee as long as you hold your shares. Your securities dealer or
servicing agent may receive different levels of compensation depending on which
class of shares you buy.
From time to time, some financial institutions, including brokerage firms
affiliated with the Adviser, may be reallowed up to the entire sales charge.
Firms that receive a reallowance of the entire sales charge may be considered
underwriters for the purpose of federal securities law.
The Distributor may, from time to time in its sole discretion, institute one or
more promotional incentive programs for dealers, which will be paid for by the
Distributor from any sales charge it receives or from any other source available
to it. Under any such program, the Distributor may provide incentives, in the
form of cash or other compensation, including merchandise, airline vouchers,
trips and vacation packages, to dealers selling shares of the Portfolio.
HOW TO SELL YOUR PORTFOLIO SHARES
Holders of Institutional Shares may sell shares by following procedures
established when they opened their account or accounts. If you have questions,
call 1-800-808-4920.
If you own your shares through an account with a broker or other institution,
contact that broker or institution to sell your shares.
If you own your shares directly, you may sell your shares on any Business Day by
contacting the Portfolio directly by mail or telephone at 1-800-808-4920.
If you would like to sell $50,000 or more of your shares, or would like the
proceeds sent to a third-party or an address other than your own, please notify
the Portfolio in writing and include a signature guarantee by a bank or other
financial institution (a notarized signature is not sufficient).
SYSTEMATIC WITHDRAWAL PLAN (CLASS A ONLY)
If you have at least $10,000 in your account, you may use the systematic
withdrawal plan. Under the plan you may arrange monthly, quarterly, semi-annual
or annual automatic withdrawals of at least $50 from the Portfolio. The proceeds
of each withdrawal will be mailed to you by check or, if you have a checking or
savings account with a bank, electronically transferred to your account.
RECEIVING YOUR MONEY
Normally, we will send your sale proceeds within 7 days after we receive your
request. Your proceeds can be wired to your bank account (subject to a $10 fee)
or sent to you by check. IF YOU RECENTLY PURCHASED YOUR SHARES BY CHECK OR
THROUGH ACH, REDEMPTION PROCEEDS MAY NOT BE AVAILABLE UNTIL YOUR CHECK HAS
CLEARED (WHICH MAY TAKE UP TO 15 DAYS FROM YOUR DATE OF PURCHASE).
REDEMPTIONS IN KIND
We generally pay sale (redemption) proceeds in cash. However, under unusual
conditions that make the payment of cash unwise (and for the protection of the
Portfolio's remaining shareholders) we might pay all or part of your redemption
proceeds in liquid securities with a
Page 11 of 16
<PAGE>
market value equal to the redemption price (redemption in kind). It is highly
unlikely that your shares would ever be redeemed in kind, but if they were you
would probably have to pay transaction costs to sell the securities distributed
to you, as well as taxes on any capital gains from the sale as with any
redemption.
INVOLUNTARY REDEMPTIONS OF YOUR SHARES
If your account balance drops below the required minimum, the Portfolio may
redeem your shares. The account balance minimums are:
<TABLE>
<CAPTION>
CLASS DOLLAR AMOUNT
<S> <C>
Institutional Shares $1,000,000
Class A Shares $1,000
</TABLE>
But, the Portfolio will always give you at least 60 days' written notice to give
you time to add to your account and avoid the involuntary redemption of your
shares.
SUSPENSION OF YOUR RIGHT TO SELL YOUR SHARES
The Portfolio may suspend your right to sell your shares if the NYSE restricts
trading, the SEC declares an emergency or for other reasons. More information
about this is in our Statement of Additional Information.
HOW TO EXCHANGE YOUR SHARES
You may exchange your shares on any Business Day by contacting us directly by
mail or telephone.
You may also exchange shares through your financial institution by mail or
telephone.
If you recently purchased shares by check or through ACH, you may not be able to
exchange your shares until your check has cleared (which may take up to 15 days
from your date of purchase). This exchange privilege may be changed or canceled
at any time upon 60 days' notice.
When you exchange shares, you are really selling your shares and buying other
Portfolio shares. So, your sale price and purchase price will be based on the
NAV next calculated after the Portfolio receives your exchange request.
CLASS A SHARES
You may exchange Class A Shares of the Portfolio for Class A Shares of any other
Portfolio. If you exchange shares that you purchased without a sales charge or
with a lower sales charge into a Portfolio with a sales charge or with a higher
sales charge, the exchange is subject to an incremental sales charge (e.g., the
difference between the lower and higher applicable sales charges). If you
exchange shares into a Portfolio with the same, lower or no sales charge there
is no incremental sales charge for the exchange.
The Golden Oak Family of Funds also offers shares of the Golden Oak Growth
Portfolio, Golden Oak Value Portfolio, Golden Oak Tax-Managed Equity Portfolio,
Golden Oak Intermediate-Term Income Portfolio, Golden Oak Michigan Tax-Free Bond
Portfolio and Golden Oak Prime Obligation Money Market Portfolio in a separate
prospectus that is available by calling 1-800-545-6331.
Page 12 of 16
<PAGE>
AUTOMATIC EXCHANGE OF YOUR SHARES
If your account balance for Institutional Shares drops below $1,000,000 because
of redemptions, your shares will be automatically exchanged for Class A Shares.
You will not be charged the applicable Class A sales charge for an automatic
exchange. But, the Portfolio will always give you at least 30 days' written
notice to give you time to add to your account and avoid the automatic exchange
of your shares.
TELEPHONE TRANSACTIONS
Purchasing, selling and exchanging Portfolio shares over the telephone is
extremely convenient, but not without risk. Although the Portfolio has certain
safeguards and procedures to confirm the identity of callers and the
authenticity of instructions, the Portfolio is not responsible for any losses or
costs incurred by following telephone instructions we reasonably believe to be
genuine. If you or your financial institution transact with the Portfolio over
the telephone, you will generally bear the risk of any loss.
DISTRIBUTION OF PORTFOLIO SHARES
The Portfolio has adopted a distribution plan that allows the Portfolio to pay
distribution and service fees for the sale and distribution of Class A Shares,
and for services provided to Class A shareholders. Because these fees are paid
out of the Portfolio's assets continuously, over time these fees will increase
the cost of your investment and may cost you more than paying other types of
sales charges.
Distribution fees, as a percentage of average daily net assets are 0.25% for
Class A Shares.
DIVIDENDS AND DISTRIBUTIONS
The Portfolio distributes its income quarterly and makes distributions of
capital gains, if any, at least annually. If you own Portfolio shares on the
Portfolio's record date, you will be entitled to receive the distribution.
You will receive dividends and distributions in the form of additional Portfolio
shares unless you elect to receive payment in cash. To elect cash payment, you
must notify the Portfolio in writing prior to the date of the distribution. Your
election will be effective for dividends and distributions paid after the
Portfolio receives your written notice. To cancel your election, simply send the
Portfolio written notice.
TAXES
PLEASE CONSULT YOUR TAX ADVISER REGARDING YOUR SPECIFIC QUESTIONS ABOUT FEDERAL,
STATE AND LOCAL INCOME TAXES. Below we have summarized some important tax issues
that affect the Portfolio and its shareholders. This summary is based on current
tax laws, which may change.
The Portfolio will distribute substantially all of its income and capital gains,
if any. The dividends and distributions you receive may be subject to federal,
state and local taxation, depending upon your tax situation. Income
distributions are generally taxable at ordinary income
Page 13 of 16
<PAGE>
tax rates. Capital gains distributions are generally taxable at the rates
applicable to long-term capital gains. EACH SALE OR EXCHANGE OF PORTFOLIO SHARES
IS A TAXABLE EVENT.
MORE INFORMATION ABOUT TAXES IS IN THE STATEMENT OF ADDITIONAL INFORMATION.
Page 14 of 16
<PAGE>
THE ARBOR FUND
GOLDEN OAK FAMILY OF FUNDS
GOLDEN OAK SMALL CAP VALUE PORTFOLIO
INVESTMENT ADVISER
Citizens Bank
328 S. Saginaw Street
Flint, Michigan 48502
DISTRIBUTOR
SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, Pennsylvania 19456
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP
1800 M Street, N.W.
Washington, DC 20036
More information about the Golden Oak Family of Funds is available without
charge through the following:
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI dated September 1, 1999, includes detailed information about The
Arbor Fund and the Golden Oak Small Cap Value Portfolio. The SAI is on file
with the SEC and is incorporated by reference into this prospectus. This
means that the SAI, for legal purposes, is a part of this prospectus.
ANNUAL AND SEMI-ANNUAL REPORTS
These reports list the Portfolio's holdings and contain information from the
Portfolio's managers about strategies, and recent market conditions and trends
and their impact on Portfolio performance. The reports also contain detailed
financial information about the Portfolio.
TO OBTAIN MORE INFORMATION:
BY TELEPHONE: Call 1-800-545-6331
BY MAIL: Write to us
Golden Oak Family of Funds
c/o The Arbor Fund
P.O. Box 419947
Kansas City, Missouri 64141-6947
Page 15 of 16
<PAGE>
FROM THE SEC: You can also obtain the SAI or the Annual and Semi-annual reports,
as well as other information about the Golden Oak Family of Funds or The Arbor
Fund, from the SEC's website ("http://www.sec.gov"). You may review and copy
documents at the SEC Public Reference Room in Washington, DC (for information
call 1-800-SEC-0330). You may request documents by mail from the SEC, upon
payment of a duplicating fee, by writing to: Securities and Exchange Commission,
Public Reference Section, Washington, DC 20549-6009. The Arbor Fund's Investment
Company Act registration number is 811-7102.
Page 16 of 16
<PAGE>
GOLDEN OAK FAMILY OF FUNDS
TRUST:
THE ARBOR FUND
PORTFOLIO:
GOLDEN OAK SMALL CAP VALUE PORTFOLIO
INVESTMENT ADVISER:
CITIZENS BANK
This STATEMENT OF ADDITIONAL INFORMATION is not a prospectus. It is intended to
provide additional information regarding the activities and operations of the
following Portfolio of the Trust: Golden Oak Small Cap Value Portfolio. This
Statement of Additional Information should be read in conjunction with the
Prospectus dated September 1, 1999. A Prospectus may be obtained by calling
1-800-545-6331.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
THE PORTFOLIO AND THE TRUST..............................................S-2
INVESTMENT OBJECTIVES AND POLICES........................................S-2
DESCRIPTION OF PERMITTED INVESTMENTS.....................................S-3
INVESTMENT LIMITATIONS...................................................S-10
THE ADVISER..............................................................S-12
THE SUB-ADVISER..........................................................S-13
THE ADMINISTRATOR........................................................S-14
THE DISTRIBUTOR..........................................................S-15
THE TRANSFER AGENT.......................................................S-16
THE CUSTODIAN............................................................S-16
LEGAL COUNSEL............................................................S-16
INDEPENDENT PUBLIC ACCOUNTANTS...........................................S-16
TRUSTEES AND OFFICERS OF THE TRUST.......................................S-16
COMPUTATION OF YIELD.....................................................S-19
CALCULATION OF TOTAL RETURN..............................................S-20
PURCHASE AND REDEMPTION OF SHARES........................................S-20
LETTER OF INTENT.........................................................S-21
DETERMINATION OF NET ASSET VALUE.........................................S-21
TAXES....................................................................S-21
TRADING PRACTICES AND BROKERAGE..........................................S-24
DESCRIPTION OF SHARES....................................................S-26
SHAREHOLDER LIABILITY....................................................S-27
LIMITATION OF TRUSTEES' LIABILITY........................................S-27
DESCRIPTION OF RATINGS...................................................A-1
</TABLE>
September 1, 1999
GOK-F-______
S-1
<PAGE>
THE PORTFOLIO AND THE TRUST
The "Golden Oak Family of Funds" is a name under which a number of mutual fund
investment portfolios with differing objectives and policies are offered to
investors. Seven of these portfolios were established by The Arbor Fund
(the"Trust"), an open-end management investment company established under
Massachusetts law as a Massachusetts business trust under a Declaration of Trust
dated July 24, 1992. The Declaration of Trust permits the Trust to offer
separate series of shares of beneficial interest ("shares") and different
classes of shares of each portfolio. Shareholders may purchase shares through
two separate classes (Institutional and Class A) which provide for variations in
distribution costs, voting rights and dividends. Except for differences between
Institutional and Class A shares pertaining to distribution fees, each share of
each portfolio represents an equal proportionate interest in that portfolio. See
"Description of Shares." This Statement of Additional Information relates to the
Institutional and Class A shares of the Golden Oak Small Cap Value Portfolio
(the "Portfolio"). Shares of the Golden Oak Growth (formerly, the Golden Oak
Diversified Growth Portfolio) (the "Growth Portfolio"), Golden Oak Value (the
"Value Portfolio"), Golden Oak Tax-Managed Equity (the "Tax-Managed Portfolio"),
Golden Oak Intermediate-Term Income (the "Intermediate-Term Income Portfolio"),
Golden Oak Michigan Tax Free Bond (the "Michigan Portfolio") and Golden Oak
Prime Obligation Money Market (the "Prime Obligation Portfolio") Portfolios
(each a "Portfolio" and collectively, the "Portfolios") of the Trust are
discussed in a separate Statement of Additional Information.
The Trust pays its expenses, including fees of its service providers, audit and
legal expenses, expenses of preparing prospectuses, proxy solicitation material
and reports to shareholders, costs of custodial services and registering the
shares under federal and state securities laws, pricing, insurance expenses,
litigation and other extraordinary expenses, brokerage costs, interest charges,
taxes and organization expenses.
INVESTMENT OBJECTIVES AND POLICIES
The investment objective of the Portfolio is to seek long-term capital
appreciation. There is no assurance that the Portfolio will achieve its
investment objective. The investment objective is a fundamental policy of the
Portfolio. A Fundamental policy cannot be changed with respect to the Portfolio
without the consent of the holders of a majority of the Portfolio's outstanding
shares.
The Portfolio attempts to achieve its investment objective by investing
primarily in small capitalization U.S. common stocks, warrants, rights to
purchase common stocks, preferred stocks and securities convertible into common
stocks (together, "equity securities"). The Portfolio will be as fully invested
as practicable (and in no event less than 65%) in equity securities and will
focus on equity securities which are undervalued relative to a company's ability
to generate cash flows. Systematic Financial Management, L.P. (the
"Sub-Adviser") will invest in equity securities of U.S. companies based on an
analysis of various fundamental characteristics,
S-2
<PAGE>
including balance sheet items, underlying sales and expense trends, earnings
estimates, market position of the company and industry outlook. The Portfolio
may also invest in American Depositary Receipts and enter into repurchase
agreements. Although it has no present intention to do so, the Portfolio
reserves the ability to write and purchase options for hedging purposes.
Although the Portfolio intends to be as fully invested as practicable in equity
securities, the Portfolio may invest in up to 15% of its assets in money market
instruments consisting of securities issued or guaranteed as to principal and
interest by the United States Government, its agencies or instrumentalities,
repurchase agreements collateralized by United States Government securities and
entered into with financial institutions the Sub-Adviser deems creditworthy,
certificates of deposit, time deposits and bankers' acceptances issued by banks
or savings and loan associations having net assets of at least $1.0 billion as
shown on their most recent public financial statements, and deemed by the
Adviser or Sub-Adviser to present minimal credit risk, and commercial paper
rated in the two highest short-term rating categories (collectively, "Money
Market Instruments").
The Portfolio may invest up to 15% of its net assets in illiquid securities,
including restricted securities other than Section 4(2) commercial paper
("Illiquid Securities"). Restricted securities, including Rule 144A Securities
and Section 4(2) commercial paper, that meet the criteria established by the
Board of Trustees or the Trust will be considered illiquid.
For temporary defensive purposes during periods when the Portfolio's Sub-Adviser
determines that market conditions warrant, the Portfolio may invest up to 100%
of its assets in money market instruments (consisting of securities issued or
guaranteed as to principal and interest by the United States Government, its
agencies or instrumentalities, repurchase agreements collateralized by United
States Government securities and entered into with financial institutions the
Sub-Adviser deems creditworthy, certificates of deposit, time deposits and
bankers' acceptances issued by banks or savings and loan associations having net
assets of at least $1.0 billion as shown on their most recent public financial
statements, and deemed by the Adviser or Sub-Adviser to present minimal credit
risk, and commercial paper rated in the two highest short-term rating categories
(collectively, "Money Market Instruments"), and may hold a portion of its assets
in cash. To the extent the Portfolio is engaged in temporary defensive
investment, the Portfolio will not be pursuing its investment objective.
The Portfolio reserves the right to engage in securities lending but has no
present intention to do so.
The Portfolio's portfolio turnover will be generally moderate and most likely
below 50%, however turnover may be influenced by specific company fundamentals,
market environments and investment opportunities.
DESCRIPTION OF PERMITTED INVESTMENTS
AMERICAN DEPOSITARY RECEIPTS ("ADRS")
ADRs are securities, typically issued by a U.S. financial institution (a
"depositary"), that evidence ownership interests in a security or a pool of
securities issued by a foreign issuer and deposited with the depositary. ADRs
may be available through "sponsored" or "unsponsored" facilities. A
S-3
<PAGE>
sponsored facility is established jointly by the issuer of the security
underlying the receipt and a depositary, whereas an unsponsored facility may be
established by a depositary without participation by the issuer of the
underlying security. Holders of unsponsored depositary receipts generally bear
all the costs of the unsponsored facility. The depositary of an unsponsored
facility frequently is under no obligation to distribute shareholder
communications received from the issuer of the deposited security or to pass
through, to the holders of the receipts, voting rights with respect to the
deposited securities.
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.
BANK OBLIGATIONS
The Trust is not prohibited from investing in obligations of banks which are
clients of SEI Investments Company ("SEI"). However, the purchase of shares of
the Trust by them or by their customers will not be a consideration in
determining which bank obligations the Trust will purchase. The Trust will not
purchase obligations of the Adviser or Sub-Adviser.
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.
CONVERTIBLE SECURITIES
While convertible securities generally offer lower yields than nonconvertible
debt securities of similar quality, their prices may reflect changes in the
value of the underlying common stock. Convertible securities entail less credit
risk than the issuer's common stock.
S-4
<PAGE>
EQUITY SECURITIES
Investments in common stocks are subject to market risks which may cause their
prices to fluctuate over time. Changes in the value of portfolio securities will
not necessarily affect cash income derived from these securities but will affect
the Portfolio's net asset value.
ILLIQUID SECURITIES
Illiquid securities are securities that cannot be disposed of within seven
business days at approximately the value at which they are being carried on the
Portfolio's books. An illiquid security includes a demand instrument with a
demand notice period exceeding seven days, where there is no secondary market
for such security, and repurchase agreements with durations over seven days in
length.
INVESTMENT COMPANIES
The Portfolio may invest in securities of other investment companies as
permitted by the Investment Company Act of 1940, as amended (the "1940 Act"),
and the rules and regulations thereunder. These investment companies typically
incur fees that are separate from those fees incurred directly by the Portfolio.
The Portfolio's purchase of such investment company securities results in a
layering of expenses, such that shareholders would indirectly bear a
proportionate share of the operating expenses of such investment companies,
including advisory fees.
OPTIONS
The Portfolio may write and sell both call options and put options, provided
that the aggregate value of such options does not exceed 15% of the Portfolio's
net assets as of the time such options are entered into by the Portfolio.
A put option gives the purchaser of the option, upon payment of a premium, the
right to sell, and the writer the obligation to buy, the underlying security,
commodity, index, currency or other instrument at the exercise price. For
instance, the Portfolio's purchase of a put option on a security might be
designed to protect its holdings in the underlying instrument (or, in some
cases, a similar instrument) against a substantial decline in the market value
by giving the Portfolio the right to sell such instrument at the option exercise
price. A call option, upon payment of a premium, gives the purchaser of the
option the right to buy, and the seller the obligation to sell, the underlying
instrument at the exercise price. The Portfolio's purchase of a call option on a
security, financial future, index, currency or other instrument might be
intended to protect the Portfolio against an increase in the price of the
underlying instrument that it intends to purchase in the future by fixing the
price at which it may purchase such instrument. An American style put or call
option may be exercised at any time during the option period while a European
style put or call option may be exercised only upon expiration or during a fixed
period prior thereto. The Portfolio is authorized to purchase and sell exchange
listed options and over-the-counter options ("OTC options").
S-5
<PAGE>
Exchange listed options are issued by a regulated intermediary such as the
Options Clearing Corporation ("OCC"), which guarantees the performance of the
obligations of the parties to such options. The discussion below uses the OCC as
an example, but is also applicable to other financial intermediaries.
With certain exceptions, OCC issued and exchange listed options generally settle
by physical delivery of the underlying security or currency, although in the
future cash settlement may become available. Index options and Eurodollar
instruments are cash settled for the net amount, if any, by which the option is
"in-the-money" (i.e., where the value of the underlying instrument exceeds, in
the case of a call option, or is less than, in the case of a put option, the
exercise price of the option) at the time the option is exercised. Frequently,
rather than taking or making delivery of the underlying instrument through the
process of exercising the option, listed options are closed by entering into
offsetting purchase or sale transactions that do not result in ownership of the
new option.
The Portfolio's ability to close out its position as a purchaser or seller of an
OCC or exchange listed put or call option is dependent, in part, upon the
liquidity of the option market. Among the possible reasons for the absence of a
liquid option market on an exchange are: (i) insufficient trading interest in
certain options; (ii) restrictions on transactions imposed by an exchange; (iii)
trading halts, suspensions or other restrictions imposed with respect to
particular classes or series of options or underlying securities including
reaching daily price limits; (iv) interruption of the normal operations of the
OCC or an exchange; (v) inadequacy of the facilities of an exchange or OCC to
handle current trading volume; or (vi) a decision by one or more exchanges to
discontinue the trading of options (or a particular class or series of options),
in which event the relevant market for that option on that exchange would cease
to exist, although outstanding options on that exchange would generally continue
to be exercisable in accordance with their terms.
The hours of trading for listed options may not coincide with the hours during
which the underlying financial instruments are traded. To the extent that the
option markets close before the markets for the underlying financial
instruments, significant price and rate movements can take place in the
underlying markets that cannot be reflected in the option markets.
OTC options are purchased from or sold to securities dealers, financial
institutions or other parties ("Counterparties") through direct bilateral
agreement with the Counterparty. In contrast to exchange listed options, which
generally have standardized terms and performance mechanics, all the terms of an
OTC option, including such terms as method of settlement, term, exercise price,
premium, guarantees and security, are set by negotiation of the parties. The
Portfolio will only sell OTC options (other than OTC currency options) that are
subject to a buy-back provision permitting the Portfolio to require the
Counterparty to sell the option back to the Portfolio at a formula price within
seven days. The Portfolio expects generally to enter into OTC options that have
cash settlement provisions, although it is not required to do so.
S-6
<PAGE>
Unless the parties provide for it, there is no central clearing or guaranty
function in an OTC option. As a result, if the Counterparty fails to make or
take delivery of the security, currency or other instrument underlying an OTC
option it has entered into with the Portfolio or fails to make a cash settlement
payment due in accordance with the terms of that option, the Portfolio will lose
any premium it paid for the option as well as any anticipated benefit of the
transaction. Accordingly, the Adviser or Sub-Adviser must assess the
creditworthiness of each such Counterparty or any guarantor or credit
enhancement of the Counterparty's credit to determine the likelihood that the
terms of the OTC option will be satisfied.
RECEIPTS
Receipts are sold as zero coupon securities which means that they are sold at a
substantial discount and redeemed at face value at their maturity date without
interim cash payments of interest or principal. This discount is accreted over
the life of the security, and such accretion will constitute the income earned
on the security for both accounting and tax purposes. Because of these features,
such securities may be subject to greater interest rate volatility than interest
paying investments.
REPURCHASE AGREEMENTS
Repurchase agreements are arrangements by which the Portfolio obtains a security
and simultaneously commits to return the security to the seller at an agreed
upon price on an agreed upon date within a number of days from the date of
purchase. The Portfolio will have actual or constructive possession of the
security as collateral for the repurchase agreement. Collateral must be
maintained at a value at least equal to 102% of the purchase price. The
Portfolio bears a risk of loss in the event the other party defaults on its
obligations and the Portfolio is delayed or prevented from exercising its right
to dispose of the collateral securities or if the Portfolio realizes a loss on
the sale of the collateral. The Portfolio will enter into repurchase agreements
on behalf of the Portfolio only with financial institutions deemed to present
minimal risk of bankruptcy during the term of the agreement based on established
guidelines. Repurchase agreements are considered loans under the 1940 Act.
RESTRICTED SECURITIES
The Portfolio may invest in restricted securities that are securities in which
the Trust may otherwise invest as provided in the Prospectus and this Statement
of Additional Information. Restricted securities are securities that may not be
sold freely to the public absent registration under the Securities Act of 1933,
as amended (the "Act"), or an exemption from registration. The Portfolio may
invest 15% of its net assets in illiquid securities, including restricted
securities. The Portfolio may invest in Section 4(2) commercial paper. Section
4(2) commercial paper is issued in reliance on an exemption from registration
under Section 4(2) of the Act and is generally sold to institutional investors
who purchase for investment. Any resale of such commercial paper must be in an
exempt transaction, usually to an institutional investor through the issuer or
investment dealers who make a market in such commercial paper. The Trust
believes that Section 4(2) commercial paper is liquid
S-7
<PAGE>
to the extent it meets the criteria established by the Board of Trustees of the
Trust. The Trust intends to treat such commercial paper as liquid and not
subject to the investment limitations applicable to illiquid securities or
restricted securities.
SECURITIES LENDING
The Portfolio may lend securities pursuant to agreements requiring that the
loans be continuously secured by cash, securities of the United States
Government or its agencies, or any combination of cash and such securities, as
collateral equal to 102% of the market value at all times of the securities
lent. Such loans will not be made if, as a result, the aggregate amount of all
outstanding securities loans for the Portfolio exceed one-third of the value of
the Portfolio's total assets taken at fair market value (including any
collateral received in connection with such loans). The Portfolio 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,
the Portfolio 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 Adviser or Sub-Adviser to be of good standing and when, in the judgment of
the Adviser or Sub-Adviser, 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 Portfolio may use
the Distributor or a broker/dealer affiliate of the Adviser or Sub-Adviser as a
broker in these transactions.
SEPARATELY TRADED INTEREST AND PRINCIPAL SECURITIES ("STRIPS")
The Portfolio may invest in STRIPS, which are component parts of U.S. Treasury
Securities traded through the Federal Book-Entry System. The Adviser will only
purchase STRIPS that it determines are liquid or, if illiquid, do not violate
the Portfolio's investment policy concerning investments in illiquid securities.
TIME DEPOSITS
Time deposits are non-negotiable receipts issued by a bank in exchange for the
deposit of funds. Like a certificate of deposit, they earn a specified rate of
interest over a definite period of time; however, they cannot be traded in the
secondary market. Time deposits with a withdrawal penalty or that mature in more
than seven days are considered to be illiquid securities.
U.S. GOVERNMENT AGENCY SECURITIES
Certain of the investments of the Portfolio 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, Maritime
S-8
<PAGE>
Administration, Small Business Administration, and the Tennessee 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, Federal Intermediate Credit Banks, Federal Land
Banks, Fannie Mae and the United States Postal Service. Some of these securities
are supported by the full faith and credit of the United States Treasury. 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.
Guarantees of principal by agencies or instrumentalities of the United States
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.
U.S. TREASURY OBLIGATIONS
U.S. Treasury obligations consist of bills, notes and bonds issued by the U.S.
Treasury and separately traded interest and principal component parts of such
obligations that are transferable through the Federal book-entry system known as
STRIPS.
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.
WARRANTS
Warrants are instruments giving holders the right, but not the obligation, to
buy equity or fixed income securities of a company at a given price during a
specified period.
ZERO COUPON, PAY-IN-KIND AND DEFERRED PAYMENT SECURITIES
Zero coupon securities are securities that are sold at a discount to par value
and securities on which interest payments are not made during the life of the
security. Upon maturity, the holder is entitled to receive the par value of the
security. While interest payments are not made on such securities, holders of
such securities are deemed to have received "phantom income" annually. Because
the Portfolio will distribute its "phantom income" to shareholders, to the
extent that shareholders elect to receive dividends in cash rather than
reinvesting such dividends in additional shares, the Portfolio will have fewer
assets with which to purchase income producing securities. Alternatively,
S-9
<PAGE>
shareholders may have to redeem shares to pay tax on this "phantom income." In
either case, the Portfolio may have to dispose of its fund securities under
disadvantageous circumstances to generate cash, or may have to leverage itself
by borrowing cash to satisfy distribution requirements. The Portfolio accrues
income with respect to the securities prior to the receipt of cash payments.
Pay-in-kind securities are securities that have interest payable by delivery of
additional securities. Upon maturity, the holder is entitled to receive the
aggregate par value of the securities. Deferred payment securities are
securities that remain zero coupon securities until a predetermined date, at
which time the stated coupon rate becomes effective and interest becomes payable
at regular intervals. Zero coupon, pay-in-kind and deferred payment securities
may be subject to greater fluctuation in value and lesser liquidity in the event
of adverse market conditions than comparably rated securities paying cash
interest at regular interest payment periods.
INVESTMENT LIMITATIONS
FUNDAMENTAL POLICIES
The following policies are fundamental and may not be changed without the
consent of a majority of the Portfolio's outstanding shares. The term "a
majority of the Portfolio's outstanding shares" means the vote of (i) 67% or
more of the Portfolio's shares present at a meeting if more than 50% of the
outstanding shares of the Portfolio are present or represented by proxy, or (ii)
more than 50% of the Portfolio's shares, whichever is less.
The Portfolio may not:
1. Purchase securities of any issuer (except securities issued or guaranteed
by the United States Government, its agencies or instrumentalities and
repurchase agreements involving such securities) if, as a result, more than
5% ofnvested in the securities of such issuer. This restriction applies to
75% of the Portfolio's assets.
2. Purchase any securities which would cause more than 25% of the total assets
of the Portfolio to be invested in the securities of one or more issuers
conducting their principal business activities in the same industry,
provided that this limitation does not apply to (a) investments in the
obligations issued or guaranteed by the United States Government, its
agencies or instrumentalities and repurchase agreements involving such
securities, (b) investments in tax-exempt securities issued by governments
or political subdivisions of government or (c) obligations issued by
domestic branches of United States banks or United States branches of
foreign banks subject to the same regulations as United States 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; (iii) supranational
entities will be considered to be a separate industry;
S-10
<PAGE>
and (iv) loan participations are considered to be issued by both the
issuing bank and the underlying corporate borrower.
3. Make loans, except that the Portfolio may (i) purchase or hold debt
instruments in accordance with its investment objective and policies; (ii)
enter into repurchase agreements; and (iii) engage in securities lending.
4. Acquire more than 10% of the voting securities of any one issuer.
5. Invest in companies for the purpose of exercising control.
6. 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 Portfolio's assets, asset coverage of at least 300% is
required. In the event that such asset coverage shall at any time fall
below 300%, the Portfolio shall, within three days thereafter or such
longer period as the Securities and Exchange Commission (the "SEC") may
prescribe by rules and regulations, reduce the amount of its borrowings to
such an extent that the asset coverage of such borrowings shall be at least
300%. This borrowing provision is included solely to facilitate the orderly
sale of portfolio securities to accommodate heavy redemption requests if
they should occur and is not for investment purposes. All borrowings in
excess of 5% of the Portfolio's total assets will be repaid before making
additional investments and any interest paid on such borrowings will reduce
income.
7. Pledge, mortgage or hypothecate assets except to secure temporary
borrowings permitted by (6) above in aggregate amounts not to exceed 10% of
total assets taken at current value at the time of the incurrence of such
loan, except as permitted with respect to securities lending.
8. Purchase or sell real estate, real estate limited partnership interests,
commodities or commodities contracts. However, subject to their permitted
investments, the Portfolio may invest in companies which invest in real
estate commodities or commodities contracts and may invest in financial
futures contracts and related options.
9. Act as an underwriter of securities of other issuers except as it may be
deemed an underwriter under federal securities laws in selling a portfolio
security.
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
The following investment limitations of the Portfolio is non-fundamental and may
be changed by the Trust's Board of Trustees without shareholder approval:
S-11
<PAGE>
1. The Portfolio may not invest in illiquid securities in an amount exceeding,
in the aggregate, 15% of the portfolio's net assets.
2. The Portfolio may not invest in interests in oil, gas or other mineral
exploration or development programs and oil, gas or mineral leases.
3. 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.
4. Purchase securities of other investment companies except as permitted by
the 1940 Act and the rules and regulations thereunder. The Portfolio is
prohibited from acquiring the securities of other investment companies if,
as a result of such acquisition, the Portfolio 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 Portfolio's assets; or
securities (other than treasury stock) issued by all investment companies
represent more than 10% of the total assets of the Portfolio.
The foregoing percentages, except with respect to borrowings and 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.
THE ADVISER
Citizens Bank (the "Adviser") serves as investment adviser to the Portfolio
pursuant to an investment advisory agreement (the "Advisory Agreement") with the
Trust. Under the Advisory Agreement, the Adviser is responsible for the
investment decisions for the Portfolio, and continuously reviews, supervises and
administers the Portfolio's investment program. The Advisory Agreement also
provides that the Adviser shall not be protected against any liability to the
Trust or its shareholders by reason of willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard of its obligations or duties thereunder.
The Trust and the Adviser have employed Systematic Financial Management, L.P. as
the investment sub-adviser to the Portfolio to manage the Portfolio on a
day-to-day basis, subject to the supervision of the Adviser and the Trustees. In
conjunction with the Adviser, the investment sub-adviser makes the investment
decisions for the assets of the Portfolio and continuously reviews, supervises
and administers the Portfolio's investment program. See "The Sub-Adviser."
The Adviser, 328 S. Saginaw Street, Flint, Michigan 48502, was incorporated in
1871 in the state of Michigan. Citizens Bank is a wholly-owned subsidiary of
Citizens Banking Corporation. Citizens Banking Corporation is an interstate bank
holding company with over $4.5 billion in assets and 124 banking offices in
Michigan and Illinois. As of January 31, 1999, the Adviser's total assets under
management were $3.5 billion. The Adviser has managed bank common funds, pension
plan assets
S-12
<PAGE>
and personal trust assets since 1927. The Adviser's sole experience as an
investment adviser to investment companies is as investment adviser to the
Trust.
For its services, the Adviser is entitled to a fee, which is calculated daily
and paid monthly, at an annual rate based on the average daily net assets of the
Portfolio of .34%. The Adviser has voluntarily agreed to waive a portion of
its fees in order to limit the total operating expenses of Institutional
Shares to not more than 1.35% and Class A Shares to not more than 1.60%
(exclusive of distribution expenses charged to Class A Shares) of the
Portfolio's average daily net assets. The Adviser reserves the right, in its
sole discretion, to terminate this voluntary fee waiver at any time.
The Glass-Steagall Act restricts the securities activities of banks such as the
Adviser, but federal regulatory authorities permit such banks to provide
investment advisory and other services to mutual funds. Should this position be
challenged successfully in court or reversed by legislation, the Trust might
have to make other investment advisory arrangements.
The Adviser will not be required to bear expenses of any Portfolio of the Trust
to an extent which would result in the Portfolio's inability to qualify as a
"regulated investment company" (a "RIC") under provisions of the Internal
Revenue Code of 1986, as amended (the "Code").
The continuance of the Advisory Agreement, after the first two years, must be
specifically approved at least annually (i) by the vote of the Trustees, and
(ii) by the vote of a majority of the Trustees who are not parties to the
Agreement or "interested persons" of any party thereto, cast in person at a
meeting called for the purpose of voting on such approval. The Advisory
Agreement will terminate automatically in the event of its assignment, and is
terminable at any time without penalty by the Trustees of the Trust or, with
respect to the Portfolio by a majority of the outstanding shares of the
Portfolio, on not less than 30 days' nor more than 60 days' written notice to
the Adviser, or by the Adviser on 90 days' written notice to the Trust.
THE SUB-ADVISER
SYSTEMATIC FINANCIAL MANAGEMENT, L.P.
Systematic Financial serves as the investment sub-adviser for the Portfolio.
Systematic Financial was established in 1982 and has managed portfolios on a
discretionary basis since inception. Systematic Financial's clients include
foundations, pension funds, public retirement systems and Taft-Hartley plans as
well as other institutional investors and individuals. Systematic Financial also
advises the Golden Oak Value Portfolio, a separate series of the Trust.
Systematic Financial's value strategy, which was originally developed by our
Chief Investment Officer, has been employed since the early 1980's. Systematic
Financial is a Delaware limited partnership. The principal business address of
Systematic Financial Management, L.P. is 300 Frank W. Burr Blvd. Glenpointe
East, 7th Floor Teaneck, NJ 07666.
S-13
<PAGE>
For the services provided and the expenses incurred pursuant to the Sub-Advisory
Agreement, Systematic Financial is entitled to receive from the Portfolio a fee,
calculated daily and paid monthly, at an annual rate of .65% of the average
daily net assets of the Portfolio.
THE ADMINISTRATOR
SEI Investments Mutual Funds Services (the "Administrator") serves as
administrator to the Portfolio pursuant to an administration agreement (the
"Administration Agreement") with the Trust. 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.
For its services, the Administrator is entitled to a fee, which is calculated
daily and paid monthly, at an annual rate of .20% of the average daily net
assets of the Portfolio. The Portfolio is also subject to a minimum fee of
$50,000.
The Administration Agreement shall remain in effect with respect to the Golden
Oak Family of Funds until May 19, 2002, and thereafter shall continue in effect
for successive two-year periods subject to annual review by the Trustees.
The Administrator, a Delaware business trust, has its principal business
offices at Oaks, Pennsylvania 19456. SEI Investments Management Corporation
("SIMC"), a wholly-owned subsidiary of SEI Investments Company ("SEI
Investments"), is the owner of all beneficial interest in the Administrator.
SEI Investments 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 or sub-administrator to the
following other mutual funds: The Achievement Funds Trust, The Advisors'
Inner Circle Fund, Alpha Select Funds, ARK Funds, Armada Funds, Bishop Street
Funds, Boston 1784 Funds-Registered Trademark-, CNI Charter Funds,
CrestFunds, Inc., CUFUND, The Expedition Funds, First American Funds, Inc.,
First American Investment Funds, Inc., First American Strategy Funds, Inc.,
HighMark Funds, Huntington Funds, The Nevis Fund, Inc., Oak Associates Funds,
The PBHG Funds, Inc., PBHG Insurance Series Fund, Inc., The Pillar Funds, SEI
Asset Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI
Institutional International Trust, SEI Institutional Investments Trust, SEI
Institutional Managed Trust, SEI Liquid Asset Trust, SEI Tax Exempt Trust,
STI Classic Funds, STI Classic Variable Trust, TIP Funds and UAM Funds, Inc.
II.
S-14
<PAGE>
THE DISTRIBUTOR
SEI Investments Distribution Co. (the "Distributor" or "SIDC"), a wholly-owned
subsidiary of SEI Investments, and the Trust are parties to a distribution
agreement (the "Distribution Agreement"), which applies to both Institutional
and Class A shares of the Portfolio. The Distribution Agreement shall be
reviewed and ratified at least annually (i) by the Trust's Trustees or by the
vote of a majority of the outstanding shares of the Trust, and (ii) by the vote
of a majority of the Trustees of the Trust who are not parties to the
Distribution Agreement or interested persons (as defined in the 1940 Act) of any
party to the Distribution Agreement, cast in person at a meeting called for the
purpose of voting on such approval. The Distribution Agreement will terminate in
the event of any assignment, as defined in the 1940 Act, and is terminable with
respect to a particular Portfolio on not less than 60 days' notice by the
Trust's Trustees, by vote of a majority of the outstanding shares of the
Portfolio or by the Distributor. The Distributor will receive no compensation
for distribution of Institutional shares. Class A has a distribution plan (the
"Class A Distribution Plan").
CLASS A DISTRIBUTION PLAN
The Distribution Agreement and the Class A Distribution Plan adopted by the
Class A shareholders provides that the Class A shares of the Portfolio will pay
the Distributor a fee of .25% of the average daily net assets which the
Distributor can use to compensate/broker dealers and service providers,
including the Adviser and its affiliates which provide administrative and/or
distribution services to the Class A shareholders or their customers who
beneficially own Class A shares. The Class A Plan is characterized as a
compensation plan since the distribution fee will be paid to the Distributor
without regard to the distribution or shareholder service expenses incurred by
the Distributor or the amount or payments made to financial institutions and
intermediaries. The Trust intends to operate the Class A Plan in accordance with
its terms and with the NASD rules concerning sales charges.
The Distribution Agreement is renewable annually and may be terminated by the
Distributor, the Qualified Trustees (defined below), or by a majority vote of
the outstanding securities of the Trust upon not more than 60 days' written
notice by either party.
The Trust has adopted the Class A Distribution Plan in accordance with the
provisions of Rule 12b-1 under the 1940 Act which regulates circumstances under
which an investment company may directly or indirectly bear expenses relating to
the distribution of its shares. Continuance of the Class A Distribution Plan
must be approved annually by a majority of the Trustees of the Trust and by a
majority of the Trustees who are not interested persons of the Trust, and have
no direct or indirect financial interest in the operation of such Class A
Distribution Plan or any agreements related to it ("Qualified Trustees"). The
Class A Distribution Plan requires that quarterly written reports of amounts
spent under the Class A Distribution Plan and the purposes of such expenditures
be furnished to and reviewed by the Trustees. The Class A Distribution Plan may
not be amended to increase materially the amount which may be spent thereunder
without approval by a majority of the outstanding shares of the Trust. All
material amendments of the Plan will require approval by a majority of the
Trustees of the Trust and of the Qualified Trustees.
S-15
<PAGE>
THE TRANSFER AGENT
DST Systems, Inc., 1004 Baltimore Street, Kansas City, Missouri 64105 (the
"Transfer Agent"), serves as the transfer agent and dividend disbursing agent
for the Portfolio under a transfer agency agreement with the Trust.
THE CUSTODIAN
First Union National Bank, Broad and Chestnut Streets, P.O. Box 7618,
Philadelphia, Pennsylvania 19101 (the "Custodian") acts as custodian of the
Trust. The Custodian holds cash, securities and other assets of the Trust as
required by the 1940 Act.
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP serves as counsel to the Trust.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP serves as the independent accountants of the Trust.
TRUSTEES AND OFFICERS OF THE TRUST
The Trustees and Executive Officers of the Trust, their respective dates of
birth, and their principal occupations for the last five years are set forth
below. Each may have held other positions with the named companies during
that period. Unless otherwise noted, the business address of each Trustee and
each Executive Officer is SEI Investments Company, Oaks, Pennsylvania 19456.
Certain officers of the Trust also serve as officers of some or all of the
following: The Achievement Funds Trust, The Advisors' Inner Circle Fund,
Alpha Select Funds, ARK Funds, Armada Funds, Bishop Street Funds, Boston 1784
Funds-Registered Trademark-, CNI Charter Funds, CrestFunds, Inc., CUFUND, The
Expedition Funds, First American Funds, Inc., First American Investment
Funds, Inc., First American Strategy Funds, Inc., HighMark Funds, Huntington
Funds, The Nevis Fund, Inc., Oak Associates Funds, The Parkstone Group of
Funds, The PBHG Funds, Inc., PBHG Insurance Series Fund, Inc., The Pillar
Funds, SEI Asset Allocation Trust, SEI Daily Income Trust, SEI Index Funds,
SEI Institutional International Trust, SEI Institutional Investments Trust,
SEI Institutional Managed Trust, SEI Liquid Asset Trust, SEI Tax Exempt
Trust, STI Classic Funds, STI Classic Variable Trust, and TIP Funds, each of
which is an open-end management investment company Managed by SEI Investments
Mutual Funds Services or its affiliates and distributed by SEI Investments
Distribution Co.
ROBERT A. NESHER (DOB 08/17/46) -- Chairman of the Board of Trustees* --
Currently performs various services on behalf of SEI Investments for which Mr.
Nesher is compensated. Executive Vice President of SEI Investments, 1986-1994.
Director and Executive Vice President
S-16
<PAGE>
of the Administrator and the Distributor, 1981-1994. Trustee of The Advisors'
Inner Circle Fund, Bishop Street Funds, Boston 1784 Funds-Registered
Trademark-, The Expedition Funds, Oak Associates Funds, Pillar Funds, SEI
Asset Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI
Institutional International Trust, SEI Institutional Investments Trust, SEI
Institutional Managed Trust, SEI Liquid Asset Trust and SEI Tax Exempt Trust.
JOHN T. COONEY (DOB 01/20/27) -- Trustee** -- Vice Chairman of Ameritrust Texas
N.A., 1989-1992, and MTrust Corp., 1985-1989. Trustee of The Advisors' Inner
Circle Fund, The Expedition Funds and Oak Associates Funds.
WILLIAM M. DORAN (DOB 05/26/40) -- Trustee* -- 1701 Market Street, Philadelphia,
PA 19103. Partner, Morgan, Lewis & Bockius LLP (law firm), counsel to the Trust,
SEI Investments, the Administrator and the Distributor. Director of SEI
Investments since 1974; Secretary of SEI Investments since 1978. Trustee of The
Advisors' Inner Circle Fund, The Expedition Funds, Oak Associates Funds, SEI
Asset Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI
Institutional International Trust, SEI Institutional Investments Trust, SEI
Institutional Managed Trust, SEI Liquid Asset Trust and SEI Tax Exempt Trust.
ROBERT A. PATTERSON (DOB 11/05/27) -- Trustee** -- Pennsylvania State
University, Senior Vice President, Treasurer (Emeritus); Financial and
Investment Consultant, Professor of Transportation since 1984; Vice
President-Investments, Treasurer, Senior Vice President (Emeritus), 1982-1984.
Director, Pennsylvania Research Corp.; Member and Treasurer, Board of Trustees
of Grove City College. Trustee of The Advisors' Inner Circle Fund, The
Expedition Funds and Oak Associates Funds.
EUGENE B. PETERS (DOB 06/03/29) -- Trustee** -- Private investor from 1987 to
present. Vice President and Chief Financial Officer, Western Company of North
America (petroleum service company) 1980-1986. President of Gene Peters and
Associates (import company) 1978-1980. President and Chief Executive Officer of
Jos. Schlitz Brewing Company before 1978. Trustee of The Advisors' Inner Circle
Fund, The Expedition Funds and Oak Associates Funds.
JAMES M. STOREY (DOB 04/12/31) -- Trustee** -- Partner, Dechert Price & Rhoads,
September 1987 - December 1993; Trustee of The Advisors' Inner Circle Fund, The
Expedition Funds, Oak Associates Funds, SEI Asset Allocation Trust, SEI Daily
Income Trust, SEI Index Funds, SEI Institutional International Trust, SEI
Institutional Investments Trust, SEI Institutional Managed Trust, SEI Liquid
Asset Trust and SEI Tax Exempt Trust.
GEORGE J. SULLIVAN, JR. (DOB 11/13/42) -- Trustee**-- Chief Executive Officer,
Newfound Consultants Inc. since April 1997. General Partner, Teton Partners,
L.P., June 1991- December 1996; Chief Financial Officer, Noble Partners, L.P.,
March 1991-December 1996; Treasurer and Clerk, Peak Asset Management, Inc.,
since 1991; Trustee, Navigator Securities Lending Trust, since 1995. Trustee of
The Advisors' Inner Circle Fund, The Expedition Funds, Oak Associates Funds, SEI
Asset Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI
S-17
<PAGE>
Institutional International Trust, SEI Institutional Investments Trust, SEI
Institutional Managed Trust, SEI Liquid Asset Trust and SEI Tax Exempt Trust.
MARK E. NAGLE (DOB 10/20/59) -- President, Chief Executive Officer, Controller
and Chief Financial Officer -- President and Senior Vice President of Fund
Accounting and Administration of the Administrator since 1998. Vice President of
Fund Accounting and Administration of the Administrator 1996-1998. Vice
President of the Distributor since December 1997. Vice President, Fund
Accounting, BISYS Fund Services, September 1995 - November 1996. Senior Vice
President and Site Manager, Fidelity Investments, 1981 - September 1995.
TODD B. CIPPERMAN (DOB 02/14/66) -- Vice President and Assistant Secretary --
Vice President and Assistant Secretary of SEI Investments, the Administrator and
the Distributor since 1995. Associate, Dewey Ballantine (law firm), 1994-1995.
Associate, Winston & Strawn (law firm), 1991-1994.
JAMES R. FOGGO (DOB 06/30/64) -- Vice President and Assistant Secretary -- Vice
President and Assistant Secretary of SEI Investments since 1998. Associate, Paul
Weiss, Rifkind, Wharton & Garrison (law firm), 1998. Associate, Baker & McKenzie
(law firm), 1995-1998. Associate, Battle Fowler L.L.P. (law firm), 1993-1995.
Operations Manager, The Shareholder Services Group, Inc., 1986-1990.
LYDIA A. GAVALIS (DOB 06/05/64) -- Vice President and Assistant Secretary --
Vice President and Assistant Secretary of SEI Investments, the Administrator and
the Distributor since 1998. Assistant General Counsel and Director of
Arbitration, Philadelphia Stock Exchange, 1989-1998.
KATHY HEILIG (DOB 12/21/58) -- Vice President and Assistant Secretary --
Treasurer of SEI Investments since 1997; Vice President of SEI Investments since
1991. Vice President and Treasurer of the Administrator since 1997. Assistant
Controller of SEI Investments and Vice President of the Distributor since 1995;
Director of Taxes of SEI Investments, 1987 to 1991. Tax Manager, Arthur Andersen
LLP prior to 1987.
KEVIN P. ROBINS (DOB 04/15/61) -- Vice President and Assistant Secretary --
Senior Vice President and General Counsel of SEI Investments, the Administrator
and the Distributor since 1994. Assistant Secretary of SEI Investments since
1992; Secretary of the Administrator since 1994. Vice President, General Counsel
and Assistant Secretary of the Administrator and the Distributor, 1992- 1994.
Associate, Morgan, Lewis & Bockius LLP (law firm), 1988-1992.
LYNDA J. STRIEGEL (DOB 10/30/48) -- Vice President and Assistant Secretary --
Vice President and Assistant Secretary of SEI Investments, the Administrator and
the Distributor since 1998. Senior Asset Management Counsel, Barnett Banks,
Inc., 1997-1998. Partner, Groom and Nordberg, Chartered, 1996-1997. Associate
General Counsel, Riggs Bank, N.A., 1991-1995.
S-18
<PAGE>
JOHN H. GRADY, JR. (DOB 06/01/61) -- Secretary -- 1701 Market Street,
Philadelphia, PA 19103, Partner since 1995, Morgan, Lewis & Bockius LLP (law
firm), counsel to the Trust, SEI Investments, the Administrator and the
Distributor.
- ------------------------------
*Messrs. Nesher and Doran are Trustees who may be deemed to be "interested"
persons of the Trust as that term is defined in the 1940 Act.
**Messrs. Cooney, Patterson, Peters, Storey and Sullivan serve as members of the
Audit Committee of the Trust.
The Trustees and officers of the Trust own less than 1% of the outstanding
shares of the Trust. The Trust pays the fees for unaffiliated Trustees. For the
fiscal year ended January 31, 1999, the Trust paid the unaffiliated Trustees
aggregate fees of $25,257.
COMPENSATION TABLE
<TABLE>
<CAPTION>
Total Compensation
Pension or From Registrant and
Retirement Estimated Fund Complex Paid to
Aggregate Benefits Accrued Annual Trustees for the Fiscal
Name of Person, Position Compensation as Part of Fund Benefits Upon Year Ended January 31,
- ------------------------ From Registrant Expenses Retirement 1999 (1)
--------------- -------- ---------- ----
<S> <C> <C> <C> <C>
John T. Cooney, Trustee $5,303 N/A N/A $28,250
**Frank E. Morris, Trustee $3,940 N/A N/A $21,500
Robert Patterson, Trustee $5,338 N/A N/A $29,250
Eugene B. Peters, Trustee $5,338 N/A N/A $29,250
James M. Storey, Trustee $5,338 N/A N/A $29,250
William M. Doran, Trustee* $0 N/A N/A $0
Robert A. Nesher, Trustee* $0 N/A N/A $0
</TABLE>
- ------------------------------
(1) Total Compensation for service on one board.
* A Trustee who is an "interested person" as defined by the 1940 Act.
** Retired 12/31/98.
COMPUTATION OF YIELD
From time to time, the Portfolio may advertise yield and/or total return. These
figures will be based on historical earnings and are not intended to indicate
future performance.
S-19
<PAGE>
The "yield" of the Portfolio refers to the income generated by an investment in
the Portfolio over a seven-day or 30-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 seven-day or 30-day period is
assumed to be generated each seven-day or 30-day period over a year 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 the Portfolio is
assumed to be reinvested. The "effective yield" will be slightly higher than the
"yield" because of the compounding effect of this assumed reinvestment.
The Portfolio may, from time to time, compare their performance to other mutual
funds tracked by mutual fund rating services, to broad groups of comparable
mutual funds or to unmanaged indices which may assume investment of dividends
but generally do not reflect deductions for administrative and management costs.
CALCULATION OF TOTAL RETURN
From time to time, the Portfolio may advertise total return. The total return
of the Portfolio refers to the average compounded rate of return to a
hypothetical investment for designated time periods (including but not
limited to, the period from which the Portfolio commenced operations through
the specified date), assuming that the entire investment is redeemed at the
end of each period. In particular, total return will be calculated according
to the following formula: P (1 + T) TO THE POWER OF n = ERV, where P = a
hypothetical initial payment of $1,000; T = average annual total return; n =
number of years; and ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of the designated time period as of the end of
such period.
PURCHASE AND REDEMPTION OF SHARES
Purchases and redemptions may be made through the Distributor on a day on which
the New York Stock Exchange is open for business. Shares of the Portfolio are
offered on a continuous basis. Currently, the holidays observed by the Trust and
the New York Stock Exchange are as follows: New Year's Day, Presidents' Day,
Martin Luther King Jr. Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving and Christmas.
It is currently the Trust's policy to pay for the redemptions in cash. The Trust
retains the right, however, to alter this policy to provide for redemptions in
whole or in part by a distribution in-kind of securities held by the Portfolio
in lieu of cash. Shareholders may incur brokerage charges on the sale of any
such securities so received in payment of redemptions. However, a shareholder
will at all times be entitled to aggregate cash redemptions from all Portfolios
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 New York Stock Exchange is restricted, or during the existence of an
emergency (as determined by the SEC by rule or regulation)
S-20
<PAGE>
as a result of disposal or valuation of the Portfolio's securities is not
reasonably practicable, or for such other periods as the SEC has by order
permitted. The Trust also reserves the right to suspend sales of shares of the
Portfolio for any period during which the New York Stock Exchange, the Adviser,
the applicable Sub-Adviser, the Administrator and/or the Custodian are not open
for business.
LETTER OF INTENT
Reduced sales charges are also applicable to the aggregate amount of purchases
made by any such purchaser previously enumerated within a 13-month period
pursuant to a written Letter of Intent provided to the Trust's transfer agent,
that does not legally bind the signer to purchase any set number of shares and
provides for the holding in escrow by the Administrator of 5% of the amount
purchased until such purchase is completed within the 13-month period. A Letter
of Intent may be dated to include shares purchased up to 90 days prior to the
date the Letter of Intent is signed. The 13-month period begins on the date of
the earliest purchase. If the intended investment is not completed, the
Administrator will surrender an appropriate number of the escrowed shares for
redemption in order to recover the difference between the sales charge on the
shares purchased at the reduced rate and the sales charge otherwise applicable
to the total shares purchased.
DETERMINATION OF NET ASSET VALUE
The securities of the Portfolio are valued by the Administrator pursuant to
valuations provided by an independent pricing service. The pricing service
relies primarily on prices of actual market transactions as well as trader
quotations. However, the service may also use a matrix system to determine
valuations of fixed income securities, which system considers such factors as
security prices, yields, maturities, call features, ratings and developments
relating to specific securities in arriving at valuations. The procedures of the
pricing service and its valuations are reviewed by theervision of the Trustees.
TAXES
The following is only a summary of certain additional federal income tax
considerations generally affecting the Portfolio and its shareholders that are
not described in the Portfolio's prospectus. No attempt is made to present a
detailed explanation of the tax treatment of the Portfolio or its shareholders,
and the discussion here and in the Portfolio's prospectus is not intended as a
substitute for careful tax planning. Shareholders are urged to consult with
their tax advisors with specific reference to their own tax situation, including
their state and local tax liabilities.
S-21
<PAGE>
FEDERAL INCOME TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS
The following general discussion of certain federal income tax consequences is
based on the Code and the regulations issued thereunder as in effect on the date
of this Statement of Additional Information. New legislation, as well as
administrative changes or court decisions, may significantly change the
conclusions expressed herein, and may have a retroactive effect with respect to
the transactions contemplated herein.
QUALIFICATION AS A REGULATED INVESTMENT COMPANY
The Portfolio intends to qualify and elect to be treated as a RIC as defined
under Subchapter M of the Code. By following such a policy, the Portfolio
expects to eliminate or reduce to a nominal amount the federal taxes to which
they may be subject.
In order to qualify as a RIC, the Portfolio must distribute at least 90% of its
net investment income (that generally includes dividends, taxable interest, and
the excess of net short-term capital gains over net long-term capital losses
less operating expenses) and at least 90% of its net tax exempt interest income,
for each tax year, if any, to its shareholders and also must meet several
additional requirements. Included among these requirements are the following:
(i) at least 90% of the Portfolio's gross income each taxable year must be
derived from dividends, interest, payments with respect to securities loans, and
gains from the sale or other disposition of stock or securities, or certain
other income; (ii) at the close of each quarter of the Portfolio's taxable year,
at least 50% of the value of its total assets must be represented by cash and
cash items, U.S. Government securities, securities of other RICs and other
securities, with such other securities limited, in respect to any one issuer, to
an amount that does not exceed 5% of the value of the Portfolio's assets and
that does not represent more than 10% of the outstanding voting securities of
such issuer; and (iii) at the close of each quarter of the Portfolio's taxable
year, not more than 25% of the value of its assets may be invested in securities
(other than U.S. Government securities or the securities of other RICs) of any
one issuer or of two or more issuers which the Portfolio controls and which are
engaged in the same, similar or related trades or businesses.
The Portfolio may make investments in securities (such as STRIPS) that bear
"original issue discount" or "acquisition discount" (collectively, "OID
Securities"). The holder of such securities is deemed to have received interest
income even though no cash payments have been received. Accordingly, OID
Securities may not produce sufficient current cash receipts to match the amount
of distributable net investment income the Portfolio must distribute to satisfy
the Distribution Requirement. In some cases, the Portfolio may have to borrow
money or dispose of other investments in order to make sufficient cash
distributions to satisfy the Distribution Requirement.
Although the Portfolio intends to distribute substantially all of its net
investment income and may distribute its capital gains for any taxable year, the
Portfolio will be subject to federal income taxation to the extent any such
income or gains are not distributed.
S-22
<PAGE>
If the Portfolio fails to qualify for any taxable year as a RIC, all of its
taxable income will be subject to tax at regular corporate income tax rates
without any deduction for distributions to shareholders and such distributions
generally will be taxable to shareholders as ordinary dividends to the extent of
the Portfolio's current and accumulated earnings and profits. In this event,
distributions generally will be eligible for the dividends-received deduction
for corporate shareholders.
PORTFOLIO DISTRIBUTIONS
Distributions of investment company taxable income will be taxable to
shareholders as ordinary income, regardless of whether such distributions are
paid in cash or are reinvested in additional Shares, to the extent of the
Portfolio's earnings and profits. The Portfolio anticipates that it will
distribute substantially all of its investment company taxable income for each
taxable year.
The Portfolio intends to distribute to shareholders its excess of net long-term
capital gains over net short-term capital losses ("net capital gains"). Such
distributions are taxable to shareholders who are individuals at a maximum rate
of 20%, regardless of the length of time the shareholder has held their
Portfolio Shares. If any such gains are retained, however, the Portfolio will
pay federal income tax thereon.
In the case of corporate shareholders, distributions (other than capital gains
distributions) from a RIC generally qualify for the dividends-received deduction
to the extent of the gross amount of qualifying dividends received by the
Portfolio for the year. Generally, and subject to certain limitations, a
dividend will be treated as a qualifying dividend if it has been received from a
domestic corporation. Accordingly, such distributions will generally qualify for
the corporate dividends-received deduction.
Ordinarily, investors should include all dividends as income in the year of
payment. However, dividends declared payable to shareholders of record in
October, November, or December of one year, but paid in January of the following
year, will be deemed for tax purposes to have been received by the shareholder
and paid by the Portfolio in the year in which the dividends were declared.
In certain cases, the Portfolio will be required to withhold, and remit to the
United States Treasury, 31% of any distributions paid to a shareholder who (1)
has failed to provide a correct taxpayer identification number, (2) is subject
to backup withholding by the Internal Revenue Service, or (3) has failed to
certify to the Portfolio that such shareholder is not subject to backup
withholding.
The Portfolio will provide a statement annually to shareholders as to the
federal tax status of distributions paid (or deemed to be paid) by the Portfolio
during the year, including the amount of dividends eligible for the corporate
dividends-received deduction.
S-23
<PAGE>
SALE OR EXCHANGE OF PORTFOLIO SHARES
Generally, gain or loss on the sale or exchange of a Portfolio Share will be
capital gain or loss that will be long-term if the Share has been held for more
than twelve months and otherwise will be short-term. For individuals, long-term
capital gains are currently taxed at a maximum rate of 20% and short-term
capital gains are currently taxed at ordinary income tax rates. However, if a
shareholder realizes a loss on the sale, exchange or redemption of a Share held
for six months or less and has previously received a capital gains distribution
with respect to the Share (or any undistributed net capital gains of the
Portfolio with respect to such Share are included in determining the
shareholder's long-term capital gains), the shareholder must treat the loss as a
long-term capital loss to the extent of the amount of the prior capital gains
distribution (or any undistributed net capital gains of the Portfolio that have
been included in determining such shareholder's long-term capital gains). In
addition, any loss realized on a sale or other disposition of Shares will be
disallowed to the extent an investor repurchases (or enters into a contract or
option to repurchase) Shares within a period of 61 days (beginning 30 days
before and ending 30 days after the disposition of the Shares). This loss
disallowance rule will apply to Shares received through the reinvestment of
dividends during the 61-day period.
FEDERAL EXCISE TAX
If the Portfolio fails to distribute in a calendar year at least 98% of its
ordinary income for the year and 98% of its capital gain net income (the excess
of short and long term capital gains over short and long term capital losses)
for the one-year period ending October 31 of that year (and any retained amount
from the prior calendar year), the Portfolio will be subject to a nondeductible
4% Federal excise tax on the undistributed amounts. The Portfolio intends to
make sufficient distributions to avoid imposition of this tax, or to retain, at
most its net capital gains and pay tax thereon.
STATE AND LOCAL TAXES
The Portfolio is not liable for any income or franchise tax in Massachusetts if
it qualifies as a RIC for federal income tax purposes. Depending upon state and
local law, distributions by the Portfolio to shareholders and the ownership of
Shares may be subject to state and local taxes. Shareholders are urged to
consult their tax advisors as to the consequences of these and other state and
local tax rules affecting an investment in the Portfolio.
TRADING PRACTICES AND BROKERAGE
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 Adviser and/or Sub-Adviser is responsible for
placing the orders to execute transactions for the Portfolio. In placing orders,
it is the policy of the Trust to seek to obtain the best net results taking into
account such factors as price (including the applicable dealer spread), the
size, type and difficulty of the transaction involved, the firm's general
execution and operational facilities, and the firm's risk in positioning the
securities involved. While the Adviser and/or Sub-Adviser generally seek
reasonably competitive spreads or commissions, the Trust will not necessarily be
paying the lowest spread or
S-24
<PAGE>
commission available if the difference is reasonably justified by other aspects
of the portfolio execution securities offered.
The Adviser and/or Sub-Adviser select brokers or dealers to execute transactions
for the purchase or sale of portfolio securities on the basis of its judgment of
their professional capability to provide the service. The primary consideration
is to have brokers or dealers execute transactions at best price and execution.
Best price and execution refers to many factors, including the price paid or
received for a security, the commission charged, the promptness and reliability
of execution, the confidentiality and placement accorded the order and other
factors affecting the overall benefit obtained by the account on the
transaction. The Adviser's and/or a Sub-Adviser's determination of what are
reasonably competitive rates is based upon the professional knowledge of its
trading department as to rates paid and charged for similar transactions
throughout the securities industry. In some instances, the Adviser and/or a
Sub-Adviser pays a minimal share transaction cost when the transaction presents
no difficulty. Some trades are made on a net basis where the Adviser and/or a
Sub-Adviser either buys securities directly from the dealer or sells them to the
dealer. In these instances, there is no direct commission charged but there is a
spread (the difference between the buy and sell price) which is the equivalent
of a commission.
The Adviser and/or Sub-Adviser may allocate out of all commission business
generated by all of the funds and accounts under management by the Adviser
and/or Sub-Adviser, brokerage business to brokers or dealers who provide
brokerage and research services. These research services include advice, either
directly or through publications or writings, as to the value of securities, the
advisability of investing in, purchasing or selling securities, and the
availability of securities or purchasers or sellers of securities; furnishing of
analyses and reports concerning issuers, securities or industries; providing
information on economic factors and trends, assisting in determining portfolio
strategy, providing computer software used in security analyses, and providing
portfolio performance evaluation and technical market analyses. Such services
are used by the Adviser and/or Sub-Adviser in connection with its investment
decision-making process with respect to one or more funds and accounts managed
by it, and may not be used exclusively with respect to the fund or account
generating the brokerage.
As provided in the Securities Exchange Act of 1934, as amended (the "1934 Act"),
higher commissions may be paid to broker/dealers who provide brokerage and
research services than to broker/dealers who do not provide such services if
such higher commissions are deemed reasonable in relation to the value of the
brokerage and research services provided. Although transactions are directed to
broker/dealers who provide such brokerage and research services, the Adviser
and/or Sub-Adviser believes that the commissions paid to such broker/dealers are
not, in general, higher than commissions that would be paid to broker/dealers
not providing such services and that such commissions are reasonable in relation
to the value of the brokerage and research services provided. In addition,
portfolio transactions which generate commissions or their equivalent are
directed to broker/dealers who provide daily portfolio pricing services to the
Adviser and/or Sub-Adviser. Subject to best price and execution, commissions
used for pricing may or may not be generated by the funds receiving the pricing
service.
S-25
<PAGE>
The Adviser and/or Sub-Adviser may place a combined order for two or more
accounts or funds engaged in the purchase or sale of the same security if, in
its judgment, joint execution is in the best interest of each participant and
will result in best price and execution. Transactions involving commingled
orders are allocated in a manner deemed equitable to each account or fund. It is
believed that the ability of the accounts to participate in volume transactions
will generally be beneficial to the accounts and funds. Although it is
recognized that, in some cases, the joint execution of orders could adversely
affect the price or volume of the security that a particular account or trust
may obtain, it is the opinion of the Adviser and/or Sub-Adviser and the Trust's
Board of Directors that the advantages of combined orders outweigh the possible
disadvantages of separate transactions.
Consistent with the Conduct Rules of the National Association of Securities
Dealers, Inc., and subject to seeking best price and execution, the Adviser
and/or Sub-Adviser may give consideration to sales of shares of the Adviser
and/or Sub-Adviser as a factor in the selection of brokers and dealers to
execute portfolio transactions for the Portfolio.
It is expected that the Adviser and/or Sub-Adviser may execute brokerage or
other agency transactions through the Distributor or an affiliate of the
Adviser, both of which are registered broker-dealers, for a commission in
conformity with the 1940 Act, the 1934 Act and the rules promulgated thereunder
by the SEC. Under these provisions, the Distributor or an affiliate of the
Adviser is permitted to receive and retain compensation for effecting portfolio
transactions for the Portfolio on an exchange if a written contract is in effect
between the Distributor and the Trust expressly permitting the Distributor or an
affiliate of the Adviser to receive and retain such compensation. These rules
further require that commissions paid to the Distributor by the Portfolio for
exchange transactions not exceed "usual and customary" brokerage commissions.
The rules define "usual and customary" commissions to include amounts which are
"reasonable and fair compared to the commission, fee or other remuneration
received or to be received by other brokers in connection with comparable
transactions involving similar securities being purchased or sold on a
securities exchange during a comparable period of time." In addition, the
Adviser and/or Sub-Adviser may direct commission business to one or more
designated broker/dealers in connection with such broker/ dealer's provision of
services to the Portfolio or payment of certain Portfolio expenses (e.g.,
custody, pricing and professional fees). The Trustees, including those who are
not "interested persons" of the Trust, have adopted procedures for evaluating
the reasonableness of commissions paid to the Distributor and will review these
procedures periodically.
DESCRIPTION OF SHARES
The Declaration of Trust authorizes the issuance of an unlimited number of
shares of the Portfolio each of which represents an equal proportionate interest
in the Portfolio with each other share. Shares are entitled upon liquidation to
a pro rata share in the net assets of the Portfolio. Shareholders have no
preemptive rights. The Declaration of Trust provides that the Trustees of the
Trust may create additional series of shares. All consideration received by the
Trust for shares of any additional
S-26
<PAGE>
series and all assets in which such consideration is invested would belong to
that series and would be subject to the liabilities related thereto. Share
certificates representing shares will not be issued.
SHAREHOLDER LIABILITY
The Trust is an entity of the type commonly known as a "Massachusetts business
trust." Under Massachusetts law, shareholders of such a trust could, under
certain circumstances, be held personally liable as partners for the obligations
of the trust. Even if, however, the Trust were held to be a partnership, the
possibility of its shareholders incurring financial loss for that reason appears
remote because the Trust's Declaration of Trust contains an express disclaimer
of shareholder liability for obligations of the Trust and requires that notice
of such disclaimer be given in each agreement, obligation or instrument entered
into or executed by or on behalf of the Trust or the Trustees, and because the
Declaration of Trust provides for indemnification out of the Trust property for
any shareholder held personally liable for the obligations of the Trust.
LIMITATION OF TRUSTEES' LIABILITY
The Declaration of Trust provides that a Trustee shall be liable only for his or
her own willful defaults and, if reasonable care has been exercised in the
selection of officers, agents, employees or investment advisers, shall not be
liable for any neglect or wrongdoing of any such person. The Declaration of
Trust also provides that the Trust will indemnify its Trustees and officers
against liabilities and expenses incurred in connection with actual or
threatened litigation in which they may be involved because of their offices
with the Trust unless it is determined in the manner provided in the Declaration
of Trust that they have not acted in good faith in the reasonable belief that
their actions were in the best interests of the Trust. However, nothing in the
Declaration of Trust shall protect or indemnify a Trustee against any liability
for his willful misfeasance, bad faith, gross negligence or reckless disregard
of his duties.
S-27
<PAGE>
APPENDIX
DESCRIPTION OF RATINGS
The following descriptions are summaries of published ratings.
DESCRIPTION OF COMMERCIAL PAPER RATINGS
A-1 This is the highest category and indicates that the degree of safety
regarding timely payment is strong. Those issues determined to possess
extremely strong safety characteristics are denoted with a plus sign
(+) designation.
A-2 Capacity for timely payment on issues with this designation is
satisfactory and the obligation is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions
than obligations in higher rating categories.
PRIME-1 Issues rated Prime-1 (or supporting institutions) have a superior
ability for repayment of senior short-term debt obligations. Prime-1
repayment ability will often be evidenced by many of the following
characteristics:
- Leading market positions in well-established industries.
- High rates of return on funds employed.
- Conservative capitalization structure with moderate reliance on
debt and ample asset protection.
- Broad margins in earnings coverage of fixed financial
charges and high internal cash generation.
- Well-established access to a range of financial markets
and assured sources of alternate liquidity.
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 and
Phelps, Inc. ("Duff"). Paper rated Duff-1 is regarded as having very high
certainty of timely payment with excellent liquidity factors which are supported
by ample asset protection. Risk factors are minor. Paper rated
A-1
<PAGE>
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 Limited ("IBCA") indicates that the obligation is
supported by a very strong capacity for timely repayment. Those obligations
rated A1+ are supported by the highest capacity for timely repayment are
supported by a strong capacity for timely repayment, although such capacity may
be susceptible to adverse changes in business, economic or financial conditions.
The rating TBW-1 by Thomson BankWatch ("Thomson") indicates a very high
likelihood that principal and interest will be paid on a timely basis.
DESCRIPTION OF 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 or
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 note rating.
Notes maturing beyond 3 years will most 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).
S&P note rating 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.
DESCRIPTION OF CORPORATE BOND RATINGS
Bonds rated AAA have the highest rating S&P assigns to a debt obligation. Such a
rating indicates an extremely strong capacity to pay principal and interest.
Bonds rated AA also qualify as high-quality debt obligations. Capacity to pay
principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in small degree. Debt rated A has a strong
A-2
<PAGE>
capacity to pay interest and repay principal although it is somewhat more
susceptible to the adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories. Debt rated BBB is regarded as
having an adequate capacity to pay interest and repay principal. Whereas it
normally exhibits adequate protection parameters, adverse economic conditions or
changing circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher rated
categories. Debt rated BB and B is regarded as having predominantly speculative
characteristics with respect to capacity to pay interest and repay principal. BB
indicates the least degree of speculation and C the highest degree of
speculation. While such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions. Debt rated BB has less near-term vulnerability
to default than other speculative grade debt. However, it faces major ongoing
uncertainties or exposure to adverse business, financial, or economic conditions
that could lead to inadequate capacity to meet timely interest and principal
payments. The BB rating category is also used for debt subordinated to senior
debt that is assigned an actual or implied BBB- rating. Debt rate B has greater
vulnerability to default but presently has the capacity to meet interest
payments and principal repayments. Adverse business, financial, or economic
conditions would likely impair capacity or willingness to pay interest and repay
principal. The B rating category also is used for debt subordinated to senior
debt that is assigned an actual or implied BB or BB- rating.
Bonds which are rated Aaa by Moody's are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large, or an exceptionally
stable, margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues. Bonds rated Aa by
Moody's are judged by Moody's to be of high quality by all standards. Together
with bonds rated Aaa, they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than in Aaa securities. Bonds which
are rated A possess many favorable investment attributes and are to be
considered as upper-medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Bonds which are rated Baa are considered as medium-grade obligations (I.E., they
are neither highly protected nor poorly secured). Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well. Bonds which are rated Ba are
judged to have speculative elements; their future cannot be considered as
well-assured. Often the protection of interest and principal payments may be
very moderate and thereby not well safeguarded during both good and bad times
over the future. Uncertainty of position characterizes bonds in this class.
Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and
A-3
<PAGE>
principal payments or of maintenance of other terms of the contract over any
long period of time may be small.
Moody's bond ratings, where specified, are applied to senior bank obligations
and insurance company senior policyholder and claims obligations with an
original maturity in excess of one year. Obligations relying upon support
mechanisms such as letters-of-credit and bonds of indemnity are excluded unless
explicitly rated.
Obligations of a branch of a bank are considered to be domiciled in the country
in which the branch is located. Unless noted as an exception, Moody's rating on
a bank's ability to repay senior obligations extends only to branches located in
countries which carry a Moody's sovereign rating. Such branch obligations are
rated at the lower of the bank's rating or Moody's sovereign rating for the bank
deposits for the country in which the branch is located.
When the currency in which an obligation is denominated is not the same as the
currency of the country in which the obligation is domiciled, Moody's ratings do
not incorporate an opinion as to whether payment of the obligation will be
affected by the actions of the government controlling the currency of
denomination. In addition, risk associated with bilateral conflicts between an
investor's home country and either the issuer's home country or the country
where an issuer branch is located are not incorporated into Moody's ratings.
Moody's makes no representation that rated bank obligations or insurance company
obligations are exempt from registration under the U.S. Securities Act of 1933
or issued in conformity with any other applicable law or regulation. Nor does
Moody's represent that any specific bank or insurance company obligation is
legally enforceable or is a valid senior obligation of a rated issuer.
Moody's ratings are opinions, not recommendations to buy or sell, and their
accuracy is not guaranteed. A rating should be weighed solely as one factor in
an investment decision and you should make your own study and evaluation of any
issuer whose securities or debt obligations you consider buying or selling.
Bonds rated AAA by Fitch are judged by Fitch to be strictly high grade, broadly
marketable, suitable for investment by trustees and fiduciary institutions
liable to but slight market fluctuation other than through changes in the money
rate. The prime feature of an AAA bond is a showing of earnings several times or
many times interest requirements, with such stability of applicable earnings
that safety is beyond reasonable question whatever changes occur in conditions.
Bonds rated AA by Fitch are judged by Fitch to be of safety virtually beyond
question and are readily salable, whose merits are not unlike those of the AAA
class, but whose margin of safety is less strikingly broad. The issue may be the
obligation of a small company, strongly secured but influenced as to rating by
the lesser financial power of the enterprise and more local type market.
A-4
<PAGE>
Bonds rated A are considered to be investment grade and of high credit quality.
The obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
Bonds rated BBB are considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal is considered
to be adequate. Adverse changes in economic conditions and circumstances,
however, are more likely to have adverse impact on these bonds, and therefore
impair timely payment. The likelihood that the ratings of these bonds will fall
below investment grade is higher than for bonds with higher ratings. Bonds rated
BB are considered speculative. The obligor's ability to pay interest and repay
principal may be affected over time by adverse economic changes.
However, business and financial alternatives can be identified which could
assist the obligor in satisfying its debt service requirements. Bonds rated B
are considered highly speculative. While bonds in this class are currently
meeting debt service requirements, the probability of continued timely payment
of principal and interest reflects the obligor's limited margin of safety and
the need for reasonable business and economic activity throughout the life of
the issue.
Bonds rated Duff-1 are judged by Duff to be of the highest credit qualify with
negligible risk factors; only slightly more than U.S. Treasury debt. Bonds rated
Duff-2, 3 and 4 are judged by Duff to be of high credit quality with strong
protection factors. Risk is modest but may vary slightly from time to time
because of economic conditions.
Bonds rated BBB+, BBB, or BBB- are considered below average protection factors
but still considered sufficient for prudent investment. Considerable BBB
variability in risk during economic cycles. Bonds rated BB+, BB or BB- are
considered below investment grade but deemed likely to meet obligations when
due. Present or prospective financial protection factors fluctuate according to
industry conditions or company fortunes. Overall quality may move up or down
frequently within this category.
Bonds rated B+, B or B- are considered below investment grade and possessing
risk that obligations will not be met when due. Financial protection factors
will fluctuate widely according to economic cycles, industry conditions and/or
company fortunes. Potential exists for frequent changes in the rating within
this category or into a higher or lower rating grade.
Obligations rated AAA by IBCA have the lowest expectation of investment risk.
Capacity for timely repayment of principal and interest is substantial, such
that adverse changes in business, economic or financial conditions are unlikely
to increase investment risk significantly. Obligations for which there is a very
low expectation of investment risk are rated AA by IBCA. Capacity for timely
repayment of principal and interest is substantial. Adverse changes in business,
economic or financial conditions may increase investment risk albeit not very
significantly. Bonds rated A are obligations for which there is a low
expectation of investment risk. Capacity for timely repayment
A-5
<PAGE>
of principal and interest is strong, although adverse changes in business,
economic or financial conditions may lead to increased investment risk.
Bonds rated BBB are obligations for which there is currently a low expectation
of investment risk. Capacity for timely repayment of principal and interest is
adequate, although adverse changes in business, economic or financial conditions
are more likely to lead to increased investment risk than for obligations in
other categories. Bonds rated BB are obligations for which there is a
possibility of investment risk developing. Capacity for timely repayment of
principal and interest exists, but is susceptible over time to adverse changes
in business, economic or financial conditions. Bonds rated B are obligations for
which investment risk exists. Timely repayment of principal and interest is not
sufficiently protected against adverse changes in business, economic or
financial conditions.
Bonds rated AAA by Thomson BankWatch indicate that the ability to repay
principal and interest on a timely basis is very high. Bonds rated AA indicate a
superior ability to repay principal and interest on a timely basis, with limited
incremental risk compared to issues rated in the highest category. Bonds rated A
indicate the ability to repay principal and interest is strong. Issues rated A
could be more vulnerable to adverse developments (both internal and external)
than obligations with higher ratings.
Bonds rated BBB indicate an acceptable capacity to repay principal and interest.
Issues rated "BBB" are, however, more vulnerable to adverse developments (both
internal and external) than obligations with higher ratings.
While not investment grade, the BB rating suggests that the likelihood of
default is considerably less than for lower-rated issues. However, there are
significant uncertainties that could affect the ability to adequately service
debt obligations. Issues rated B show a higher degree of uncertainty and
therefore greater likelihood of default than higher-rated issues. Adverse
developments could well negatively affect the payment of interest and principal
on a timely basis.
A-6
<PAGE>
PART C: OTHER INFORMATION
POST-EFFECTIVE AMENDMENT NO. 25
ITEM 23. EXHIBITS:
<TABLE>
<S> <C>
(a) Registrant's Agreement and Declaration of Trust(1), originally filed with the
Registrant's Registration Statement on Form N-1A (File No. 33-50718) with the
Securities and Exchange Commission on August 11, 1992, is incorporated herein by
reference as exhibit 1 to Post-Effective Amendment No. 17 filed with the Securities
and Exchange Commission on April 2, 1997.
(b) Registrant's By-Laws are incorporated herein by reference to Post-Effective
Amendment No. 20 to Registrant's Registration Statement on Form N-1A (File No.
33-50718), filed with the Securities and Exchange Commission on March 30, 1998.
(c) Not Applicable.
(d)(1) Investment Advisory Agreement between the Registrant and Citizens Commercial and
Savings Bank with respect to the Golden Oak Diversified Growth Portfolio, the
Golden Oak Intermediate-Term Income Portfolio, Golden Oak Michigan Tax Free Bond
Portfolio and Golden Oak Prime Obligation Money Market Portfolio, originally filed
as exhibit 5(b) with Pre-Effective Amendment No. 2 to Registrant's Registration
Statement on Form N-1A (File No. 33-50718) with the Securities and Exchange
Commission on January 13, 1993, is incorporated herein by reference as exhibit 5(a)
to Post-Effective Amendment No. 17 filed with the Securities and Exchange
Commission on April 2, 1997.
(d)(2) Investment Sub-Advisory Agreement by and among Registrant, Citizens Commercial and
Savings Bank and Wellington Management Company, LLP with respect to the Golden Oak
Prime Obligation Money Market Portfolio, originally filed as exhibit 5(c), is
incorporated herein by reference to Pre-Effective Amendment No. 2 to Registrant's
Registration Statement on Form N-1A (File No. 33-50718) filed with the Securities
and Exchange Commission on January 13, 1993.
(d)(3) Investment Advisory Agreement between the Registrant and One Valley Bank, National
Association with respect to the OVB Portfolios, originally filed as exhibit 5(h)
with Post-Effective Amendment No. 6 to Registrant's Registration Statement on Form
N-1A (File No. 33-50718) with the Securities and Exchange Commission on September
23, 1993, is incorporated herein by reference as exhibit 5(d) to Post-Effective
Amendment No. 17 filed with the Securities and Exchange Commission on April 2,
1997.
(d)(4) Investment Sub-Advisory Agreement by and among the Registrant, One Valley Bank,
National Association, and Wellington Management Company, LLP with respect to the
OVB Prime Obligations Portfolio, originally filed as exhibit 5(i) with
Post-Effective Amendment No. 6 to Registrant's Registration Statement on Form N-1A
(File No. 33-50718) with the Securities and Exchange Commission on September 23,
1993, is incorporated herein by reference as exhibit 5(e) to Post-Effective
Amendment No. 17 filed with the Securities and Exchange Commission on April 2,
1997.
(d)(5) Investment Advisory Agreement between the Registrant and Capitoline Investment
Services, Incorporated with respect to the U.S. Government Securities Money Fund,
originally filed as exhibit 5(j), with Post-Effective Amendment No. 9 to
Registrant's Registration Statement on Form N-1A (File No. 33-50718) with the
Securities and Exchange Commission on June 2, 1994, is incorporated herein by
reference as exhibit 5(f) to Post-Effective Amendment No. 17 filed with the
Securities and Exchange Commission on April 2, 1997.
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
(d)(6) Schedule B to Investment Advisory Agreement between the Registrant and Citizens
Commercial & Savings Bank with respect to Golden Oak Growth and Income Portfolio,
originally filed as exhibit 5(l) with Post-Effective Amendment No. 10 to
Registrant's Registration Statement on Form N-1A (File No. 33-50718) filed with the
Securities and Exchange Commission on September 30, 1994 is incorporated herein by
reference as exhibit 5(g) to Post-Effective Amendment No. 18 filed with the
Securities and Exchange Commission on May 30, 1997.
(d)(7) Schedule to the Investment Advisory Agreement between Registrant and Capitoline
Investment Services Incorporated with respect to the Prime Obligations Fund,
originally filed as exhibit 5(q) with Post-Effective Amendment No. 13 to
Registrant's Registration Statement on Form N-1A (File No. 33-50718) with the
Securities and Exchange Commission on August 11, 1995, is incorporated herein by
reference as exhibit 5(h) to Post-Effective Amendment No. 17 filed with the
Securities and Exchange Commission on April 2, 1997.
(d)(8) Investment Sub-Advisory Agreement by and among the Registrant and Citizens Bank and
Nicholas-Applegate Capital Management with respect to the Golden Oak Diversified
Growth Portfolio, originally filed as exhibit 5(u), is incorporated herein by
reference to Post-Effective Amendment No. 14 to Registrant's Registration Statement
on Form N-1A (File No. 33-50718) filed with the Securities and Exchange Commission
on March 29, 1996.
(d)(9) Investment Advisory Agreement between the Registrant and One Valley Bank, National
Association with respect to the OVB Equity Income Portfolio, is incorporated herein
by reference to Post-Effective Amendment No. 16 to the Registrant's Registration
Statement on Form N-1A (File No. 33-50718) filed with the Securities and Exchange
Commission on February 28, 1997.
(d)(10) Investment Sub-Advisory Agreement by and among the Registrant, Citizens Bank and
Systematic Financial Management, L.P. with respect to the Golden Oak Value
Portfolio is incorporated herein by reference to Post-Effective Amendment No. 20 to
Registrant's Registration Statement on Form N-1A (File No. 33-50718), filed with
the Securities and Exchange Commission on March 30, 1998.
(d)(11) Amendment to Investment Sub-Advisory Agreement between Citizens Bank and Nicholas -
Applegate Capital Management is incorporated herein by reference to Post-Effective
Amendment No. 20 to Registrant's Registration Statement on Form N-1A (File No.
33-50718), filed with the Securities and Exchange Commission on March 30, 1998.
(d)(12) Schedule A to the Investment Advisory Agreement between Registrant and Citizens
Bank is incorporated herein by reference to Post-Effective Amendment No. 23 to
Registrant's Registration Statement on Form N-1A (File No. 33-50718), filed with
The Securities and Exchange Commission on April 1, 1999.
(d)(13) Amendment to the Investment Sub-Advisory Agreement by and between Citizens Bank
and Systematic Financial Management, L.P. is incorporated herein by reference to
Post-Effective Amendment No. 23 to Registrant's Registration Statement on Form N-1A
(File No. 33-50718), filed with The Securities and Exchange Commission on
April 1, 1999.
(d)(14) Amended Schedule A dated February 22, 1999 to the Investment Advisory Agreement
between Registrant and Citizens Bank is incorporated herein by reference to
Post-Effective Amendment No. 23 to Registrant's Registration Statement on Form N-1A
(File No. 33-50718), filed with The Securities and Exchange Commission on
April 1, 1999.
(d)(15) Amendment No. 2 dated February 22, 1999 to the Investment Sub-Advisory Agreement
between Citizens Bank and Nicholas-Applegate Capital Management is incorporated
herein by reference as Exhibit d(15) to Post-Effective Amendment no. 24 filed with
the Securities and Exchange Commission on May 28, 1999.
(e)(1) Distribution Agreement between Registrant and SEI Financial Services Company,
originally filed with Pre-Effective Amendment No. 1 to Registrant's Registration
Statement on Form N-1A (File No. 33-50718) with the Securities and Exchange
Commission on October 14, 1992, is incorporated herein by reference as exhibit 6(a)
to Post-Effective Amendment No. 17 filed with the Securities and Exchange
Commission on April 2, 1997.
(e)(2) Transfer Agent Agreement between Registrant and SEI Financial Management
Corporation is incorporated herein by reference to Pre-Effective Amendment No. 2 to
Registrant's Registration Statement on Form N-1A (File No. 33-50718) filed with the
Securities and Exchange Commission on January 13, 1993.
(e)(3) Transfer Agent Agreement between Registrant and Crestar Bank is incorporated herein
by reference to Post-Effective Amendment No. 12 to Registrant's Registration
Statement on Form N-1A (File No. 33-50718) filed with the Securities and Exchange
Commission on May 31, 1995.
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
(e)(4) Transfer Agent Agreement between Registrant and Supervised Service Company is
incorporated herein by reference to Post-Effective Amendment No. 12 to Registrant's
Registration Statement on Form N-1A (File No. 33-50718) filed with the Securities
and Exchange Commission on May 31, 1995.
(e)(5) Amendment to Transfer Agent Agreement between Registrant and Crestar Bank dated
August 1, 1994 is incorporated herein by reference to Post-Effective Amendment No.
20 to Registrant's Registration Statement on Form N-1A (File No. 33-50718), filed
with the Securities and Exchange Commission on March 30, 1998.
(e)(6) Amended and restated Schedule A, relating to The Golden Oak Family of Funds, to the
Distribution Plan is incorporated herein by reference to Post-Effective Amendment
No. 23 to Registrant's Registration Statement on Form N-1A (File No. 33-50718), filed
with The Securities and Exchange Commission on April 1, 1999.
(f) Not Applicable.
(g)(1) Custodian Agreement between Registrant and CoreStates Bank N.A., originally filed
with Pre-Effective Amendment No. 1 to Registrant's Registration Statement on Form
N-1A (File No. 33-50718) with the Securities and Exchange Commission on October 14,
1992, is incorporated herein by reference as exhibit 8(a) to Post-Effective
Amendment No. 17 filed with the Securities and Exchange Commission on April 2,
1997.
(g)(2) Custodian Agreement between Registrant and Crestar Bank, originally filed with
Post-Effective Amendment No. 9 to Registrant's Registration Statement on Form N-1A
(File No. 33-50718) filed with the Securities and Exchange Commission on June 2,
1994, is incorporated herein by reference as exhibit 8(b) to Post-Effective
Amendment No. 18 filed with the Securities and Exchange Commission on May 30, 1997.
(g)(3) Amendment to Custodian Agreement between Registrant and Crestar Bank dated August
1, 1994 is incorporated herein by reference to Post-Effective Amendment No. 20 to
Registrant's Registration Statement on Form N-1A (File No. 33-50718), filed with
the Securities and Exchange Commission on March 30, 1998.
(h)(1) Administration Agreement between Registrant and SEI Financial Management
Corporation with Schedule dated January 28, 1993 for the Golden Oak Portfolios and
forms of Schedule for the California Tax Exempt Portfolio and Institutional Tax
Free Portfolio, originally filed as exhibit 5(a), is incorporated herein by
reference to Post-Effective Amendment No. 4 to Registrant's Registration Statement
on Form N-1A (File No. 33-50718) filed with the Securities and Exchange Commission
on July 29, 1993.
(h)(2) Schedule, relating to the OVB Prime Obligations, OVB Capital Appreciation, OVB
Emerging Growth, OVB Government Securities and OVB West Virginia Tax-Exempt Income
Portfolios (the "OVB Portfolios"), to Administration Agreement by and between the
Registrant and SEI Financial Management Corporation dated as of January 28, 1993 is
incorporated herein by reference to Post-Effective Amendment No. 20 to Registrant's
Registration Statement on Form N-1A (File No. 33-50718), filed with the Securities
and Exchange Commission on March 30, 1998.
(h)(3) Schedule relating to U.S. Government Securities Money Fund, to Administration
Agreement by and between Registrant and SEI Financial Management Corporation is
incorporated herein by reference to Post-Effective Amendment No. 20 to Registrant's
Registration Statement on Form N-1A (File No. 33-50718), filed with the Securities
and Exchange Commission on March 30, 1998.
(h)(4) Schedule dated May 19, 1997, relating to the Golden Oak Portfolios, to
Administration Agreement by and between Registrant and SEI Fund Resources is
incorporated herein by reference to Post-Effective Amendment No. 20 to Registrant's
Registration Statement on Form N-1A (File No. 33-50718), filed with the Securities
and Exchange Commission on March 30, 1998.
</TABLE>
4
<PAGE>
<TABLE>
<S> <C>
(h)(5) Administration Agreement between Registrant and SEI Financial Corporation with
Schedule dated January 28, 1993 as amended and restated on May 17, 1994 for Golden
Oak Portfolios, the Prudential Portfolios and the OVB Portfolios, originally filed
as exhibit 5(o) with Post-Effective Amendment No. 12 to Registrant's Registration
Statement on Form N-1A (File No. 33-50718) with the Securities and Exchange
Commission on May 31, 1995, is incorporated herein by reference as exhibit 9(e) to
Post-Effective Amendment No. 17 filed with the Securities and Exchange Commission
on April 2, 1997.
(h)(6) Administration Agreement between Registrant and SEI Financial Management
Corporation with Schedule dated August 1, 1994, originally filed as exhibit 5(p)
with Post-Effective Amendment No. 12 to Registrant's Registration Statement on Form
N-1A (File No. 33-50718) with the Securities and Exchange Commission on May 31,
1995, is incorporated herein by reference as exhibit 9(f) to Post-Effective
Amendment No. 17 filed with the Securities and Exchange Commission on April 2,
1997.
(h)(7) Schedule relating to the Prime Obligations Fund, to Administration Agreement by and
between Registrant and SEI Financial Management Corporation, originally filed as
exhibit 5(p) with Post-Effective Amendment No. 13 to Registrant's Registration
Statement on Form N-1A (File No. 33-50718) with the Securities and Exchange
Commission on August 11, 1995, is incorporated herein by reference as exhibit 9(g)
to Post-Effective Amendment No. 17 filed with the Securities and Exchange
Commission on April 2, 1997.
(h)(8) Consent to Assignment and Assumption of Administration Agreement between the
Registrant and SEI Financial Management Corporation, dated January 28, 1993, to SEI
Fund Resources is incorporated herein by reference as exhibit 9(h) to
Post-Effective Amendment No. 17 filed with the Securities and Exchange Commission
on April 2, 1997.
(h)(9) Consent to Assignment and Assumption of Administration Agreement between the
Registrant and SEI Financial Management Corporation, dated June 1, 1996, to SEI
Fund Resources is incorporated herein by reference to Post-Effective Amendment No.
20 to Registrant's Registration Statement on Form N-1A (File No. 33-50718), filed
with the Securities and Exchange Commission on March 30, 1998.
(h)(10) Schedule dated November 23, 1998 to the Administration Agreement, relating to the
OVB Family of Funds, between the Registrant and SEI Financial Management
Corporation is incorporated herein by reference to Post-Effective Amendment No. 23
to Registrant's Registration Statement on Form N-1A (File No. 33-50718), filed with
The Securities and Exchange Commission on April 1, 1999.
(h)(11) Schedule dated February 22, 1999 to the Administration Agreement, relating to The
Golden Oak Family of Funds, between the Registrant and SEI Fund Resources is
incorporated herein by reference to Post-Effective Amendment No. 23 to Registrant's
Registration Statement on Form N-1A (File No. 33-50718), filed with The Securities
and Exchange Commission on April 1, 1999.
(i) Opinion and Consent of Counsel is filed herewith.
(j) Not Applicable.
(k) Not Applicable.
(l) Not Applicable.
(m)(1) Registrant's Distribution Plan with respect to the Class B shares of the Golden Oak
Portfolios (except Golden Oak Growth and Income Portfolio), originally filed with
Pre-Effective Amendment No. 1 to Registrant's Registration Statement on Form N-1A
(File No. 33-50718) with the Securities and Exchange Commission on October 14,
1992, is incorporated herein by reference as exhibit 15(a) to Post-Effective
Amendment No. 17 filed with the Securities and Exchange Commission on April 2,
1997.
</TABLE>
5
<PAGE>
<TABLE>
<S> <C>
(m)(2) Registrant's Distribution Plan with respect to the Class B shares of the OVB
Portfolios, originally filed with Post-Effective Amendment No. 6 to Registrant's
Registration Statement on Form N-1A (File No. 33-50718) with the Securities and
Exchange Commission on September 23, 1993, is incorporated herein by reference as
exhibit 15(b) to Post-Effective Amendment No. 17 filed with the Securities and
Exchange Commission on April 2, 1997.
(m)(3) Registrant's Distribution Plan with respect to the Class B Shares of the Golden Oak
Growth and Income Portfolio is incorporated herein by reference to Post-Effective
Amendment No. 20 to Registrant's Registration Statement on Form N-1A (File No.
33-50718), filed with the Securities and Exchange Commission on March 30, 1998.
(m)(4) Rule 18f-3 Multi-Class Plan, originally filed with Post-Effective Amendment No. 12
to Registrant's Registration Statement on Form N-1A (File No. 33-50718) with the
Securities and Exchange Commission on May 31, 1995, is incorporated herein by
reference as exhibit 15(d) to Post-Effective Amendment No. 17 filed with the
Securities and Exchange Commission on April 2, 1997.
(n) Not Applicable.
(o) Not Applicable.
(p)(1) Powers of Attorney for John T. Cooney, William M. Doran, Frank E. Morris, Mark E.
Nagle, Robert A. Nesher, Robert A. Patterson, Eugene B. Peters and James M. Storey
are incorporated herein by reference to Post-Effective Amendment No. 22 to
Registrant's Registration Statement on Form N-1A (File No. 33-50718), filed with
the Securities and Exchange Commission on December 30, 1998.
(p)(2) Power of Attorney for George J. Sullivan, Jr. is incorporated herein by reference to
Post-Effective Amendment No. 24 to Registrant's Registration Statement on Form N-1A
(file No. 33-50718) filed with the Securities and Exchange Commission on May 28, 1999.
</TABLE>
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT:
See the Prospectuses and the Statement of Additional Information regarding
the Trust's control relationships. The Administrator is a subsidiary of SEI
Investments Company which also controls the distributor of the Registrant, SEI
Investments Distribution Co., and other corporations engaged in providing
various financial and record keeping services, primarily to bank trust
departments, pension plan sponsors, and investment managers.
ITEM 25. INDEMNIFICATION:
Article VIII of the Agreement and Declaration of Trust filed as Exhibit 1 to
the Registration Statement is incorporated by reference. Insofar as
indemnification for liabilities arising under the Securities Act of 1933, as
amended, 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.
6
<PAGE>
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER:
Other business, profession, vocation or employment of a substantial nature
in which each director or principal officer of the Adviser is or has been, at
any time during the last two fiscal years, engaged for his or her own account or
in the capacity of director, officer, employee, partner or trustee are as
follows:
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY OTHER COMPANY
- --------------------------------- ------------------------------------------ ---------------------------------
<S> <C> <C>
CITIZENS BANK
Victor E. George Victor George Oldsmobile, Inc. Chairman
Chairman Citizens Banking Corporation Director
Charles R. Weeks Citizens Banking Corporation Chairman
James L. Wolohan Wolohan Lumber Co. Chairman, President & CEO
Edward P. Abbott Abbott's Meat, Inc. President & CEO
Director Citizens Banking Corporation Director
John W. Ennest Citizens Banking Corporation Vice Chairman, CFO and
Director Treasurer
George H. Kossaras Spring's Drug Store, Inc. President & CEO
Director Citizens Banking Corporation Director
Gerald Schreiber Royalite Co. Vice President
Director
William C. Shedd Winegarden, Shedd, Haley, Attorney & Partner
Director Lindholm & Robertson Director
Citizens Banking Corporation
Joseph G. Shomsky Massachusetts Mutual Insurance Insurance
Director Company
James E. Truesdell The Austin Group President & Secretary
Director Citizens Banking Corporation Director
Robert J. Vitito Citizens Banking Corporation President, CEO
President & Chairman
of the Board
Kendall B. Williams The Williams Firm, Inc. Attorney at Law
Director Citizens Banking Corporation Director
Ada C. Washington Community Volunteer
Director
Gary P. Drainville Citizens Banking Corporation Executive Vice President
Executive Vice President
Wayne G. Schaeffer Citizens Banking Corporation Executive Vice President
Senior Executive Vice President
Chief Financial Officer and
Director
Chief Operating Officer
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY OTHER COMPANY
- --------------------------------- ------------------------------------------ ---------------------------------
<S> <C> <C>
Dana A. Czmer
Senior Vice President and Trust
Officer
Thomas W. Gallagher Citizens Banking Corporation Senior Vice President,
General Counsel, Secretary
Gary O. Clark Citizens Banking Corporation Executive Vice President
CEO, Director Citizens Bank Illinois, N.A. President
Edward P. Majask
Senior Vice President and Senior
Investment Officer
Richard J. Mitsdarfer Citizens Banking Corporation Senior Vice President &
Senior Vice President and General General Auditor
Auditor
Edward H. Newman Citizens Banking Corporation Vice President & Assistant
Senior Vice President, Cashier & Secretary
Secretary
Thomas C. Shafer
Senior Vice President
Lawrence G. Southwell
Senior Vice President
Richard T. Albee
Senior Vice President
Marilyn K. Allor
Senior Vice President
Daniel E. Bekemeier
Senior Vice President &
Controller
Dennis R. Johnston
Senior Vice President
Vicent V. Maysura
Senior Vice President
James M. VanTiflin
Director
Joseph F. Smith Citizens Bank--Sturgis
Community President & Director
Richard J. DeVries Citizens Bank--Ypsilanti
Community President & Director
Nicholas J. Cilfone Citizens Banking Corporation Senior Vice President
Hugo E. Braun, Jr. Braun Kendrick Finbeiner, P.L.C. Attorney at Law
Joseph P. Day Bauner Engineering & Sales, Inc. President
Richard J. Dolinski Dolinski Associates, Inc. President
James M. Franklin Worthington Steel Company Vice President & General Manager
Frank Kern, III Maxitrol Company President
Philip G. Miller Miller Tool & Die Co. President
Richard N. Robb Dentist
ONE VALLEY BANK, NATIONAL ASSOCIATION:
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY OTHER COMPANY
- --------------------------------- ------------------------------------------ ---------------------------------
<S> <C> <C>
J. Holmes Morrison One Valley Bancorp President & Chief Executive
Chairman of the Board Officer
Phyllis H. Arnold One Valley Bancorp Director
Director, President & Chief One Valley Bancorp Executive Vice President
Executive Officer
Charles M. Avampato Clay Foundation, Inc. President
Director One Valley Bancorp Director
Robert F. Baronner One Valley Bancorp Chairman of the Board
Director of Directors
Herald R. Baughman
Senior Vice President
Gary L. Brown Parkerburg Region
Region President
James K. Brown Jackson & Kelly Attorney, Partner
Director One Valley Bancorp Director
Lloyd P. Calvert
Senior Vice President
John T. Chambers Ravenswood Land Co. and Mt. Alpha President
Director Development Co. Director
One Valley Bancorp
Nelle Ratrie Chilton Dickinson Fuel Co. Director
Director Terra Co., Inc. Director
Terra Care, Inc. Director
Terra Salis, Inc. Director
TerraSod, Inc. Director
One Valley Bancorp Director
Anthony N. Ciliberti
General Auditor
Bernice J. Deem
Senior Vice President
Ray Marshall Evans, Jr. Chesapeake Mining Co. & Hubbard Properties President
Director Geary Securities Vice President
Jane Fleming
Senior Vice President
Brian Fox
Senior Vice President
Robert F. Goldsmith Cascades Coal Sales, Inc. President
Director Sentry Resource Associates, Inc. Executive Vice President
Phillip H. Goodwin CAMCARE President
Director Director
One Valley Bancorp
O. Nelson Jones Madison Coal & Supply Company President
Director Amherst Industries, Inc. Vice President
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY OTHER COMPANY
- --------------------------------- ------------------------------------------ ---------------------------------
<S> <C> <C>
William M. Kidd
Senior Vice President
Carl E. Little Vice Chairman (retired)
Director
David E. Lowe Intelos President
William A. Rice, Jr. Airgas Direct President
Director Industrial
Steven M. Rubin
Director
Edward H. Maier General Corporation President
Director One Valley Bancorp Director
Roger D. Mooney
Senior Vice President
John F. Mork President
Director
Harold E. Neely
Senior Vice President
Robert O. Orders, Sr. Orders Construction Company Chief Executive Officer
Director One Valley Bancorp Director
John L. D. Payne Payne-Gallatin Mining Co. President
Director One Valley Bancorp Director
Angus E. Peyton Brown & Peyton Attorney & Partner
Director One Valley Bancorp Director
Director
Brent D. Robinson One Valley Bancorp, President & CEO Senior Vice President
One Valley Bank of Boston
K. Richard C. Sinclair Jefferds Corporation President
Director
James C. Smith O.V. Smith & Sons of Big President
Director Chimney, Inc. Vice President
Michael W. Stajduhar
Senior Vice President
James R. Thomas II Chairman (retired)
Director
J. Randy Valentine
Senior Vice President
Dr. Edwin H. Welch University of Charleston President
Director One Valley Bank, N.A.
John Henry Wick III Dickinson Fuel Co., Inc. Vice President
Director
Thomas D. Wilkerson Northwestern Mutual Life Insurance Senior Agent
Director Company
James D. Williams
Director
James A. Winter
Senior Vice President
Jack B. Young
Senior Vice President
John F. Ziebold
Senior Vice President
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY OTHER COMPANY
- --------------------------------- ------------------------------------------ ---------------------------------
<S> <C> <C>
Robert K. Welty
Senior Vice President
John O'Donovan
Senior Vice President
John A. Derito
Senior Vice President
Michael H. Spangler
Senior Vice President
</TABLE>
The list required by this Item 26. of officers and partners of Wellington
Management Company, LLP together with information as to any other business,
profession, vocation or employment of a substantial nature engaged in by such
officers and partners during the past two years, is incorporated by reference to
Schedules A and D of Form ADV, filed by Wellington Management Company, LLP
pursuant to the Investment Advisers Act of 1940 (SEC File No. 801-15908).
The list required by this Item 26. of officers and partners of
Nicholas-Applegate Capital Management, together with information as to any other
business, profession, vocation or employment of a substantial nature engaged in
by such officers and partners during the past two years, is incorporated by
reference to Schedules A and D of Form ADV, filed by Nicholas-Applegate Capital
Management pursuant to the Investment Advisers Act of 1940 (SEC File No.
801-21442).
The list required by this Item 26. of officers and partners of Systematic
Financial Management, L.P. together with information as to any other business,
profession, vocation or employment of a substantial nature engaged in by such
officers and partners during the past two years, is incorporated by reference to
Schedules A and D of Form ADV, filed by Systematic Financial Management, L.P.
pursuant to the Investment Advisers Act of 1940 (SEC File No. 801-48908).
To the Registrant's knowledge, none of the directors or officers of PIMC,
except as set forth in the filings referred to below, is, or has been at any
time during the Registrant's past two fiscal years, engaged in any other
business, profession, vocation or employment of a substantial nature, except
that certain directors and officers and certain executives of PIMC also hold
various positions with, and engage in business for, PNC Bank Corp., which
indirectly owns all the outstanding stock of PIMC, or other subsidiaries of PNC
Bank Corp. Set forth in the filings referred to below are the names and
principal businesses of the directors and certain executives of PIMC who are
engaged in any other business, profession, vocation or employment of a
substantial nature.
The information required by this Item 26 with respect to each director,
officer and partner of PIMC is incorporated by reference to Schedules A and D of
Form ADV, filed by PNC Institutional Management Corporation pursuant to the
Investment Advisers Act of 1940 (SEC File No. 801-13304).
11
<PAGE>
ITEM 27. PRINCIPAL UNDERWRITERS:
(a) Furnish the name of each investment company (other than the Registrant)
for which each principal underwriter currently distributing the securities of
the Registrant also acts as a principal underwriter, distributor or investment
adviser.
Registrant's distributor, SEI Investments Distribution Co. (the
"Distributor"), acts as distributor for:
<TABLE>
<S> <C>
SEI Daily Income Trust.................................. July 15, 1982
SEI Liquid Asset Trust.................................. November 29, 1982
SEI Tax Exempt Trust.................................... December 3, 1982
SEI Index Funds......................................... July 10, 1985
SEI Institutional Managed Trust......................... January 22, 1987
SEI Institutional International Trust................... August 30, 1988
The Advisors' Inner Circle Fund......................... November 14, 1991
The Pillar Funds........................................ February 28, 1992
CUFUND.................................................. May 1, 1992
STI Classic Funds....................................... May 29, 1992
First American Funds, Inc............................... November 1, 1992
First American Investment Funds, Inc.................... November 1, 1992
Boston 1784 Funds-Registered Trademark-................. June 1, 1993
The PBHG Funds, Inc..................................... July 16, 1993
Morgan Grenfell Investment Trust........................ January 3, 1994
The Achievement Funds Trust............................. December 27, 1994
Bishop Street Funds..................................... January 27, 1995
CrestFunds, Inc......................................... March 1, 1995
STI Classic Variable Trust.............................. August 18, 1995
ARK Funds............................................... November 1, 1995
Huntington Funds........................................ January 11, 1996
SEI Asset Allocation Trust.............................. April 1, 1996
TIP Funds............................................... April 28, 1996
SEI Institutional Investments Trust..................... June 14, 1996
First American Strategy Funds, Inc...................... October 1, 1996
HighMark Funds.......................................... February 15, 1997
Armada Funds............................................ March 8, 1997
PBHG Insurance Series Funds, Inc........................ April 1, 1997
The Expedition Funds.................................... June 9, 1997
Alpha Select Funds...................................... January 1, 1998
Oak Associates Funds.................................... February 27, 1998
The Nevis Fund, Inc..................................... June 29, 1998
The Parkstone Group of Funds............................ September 14, 1998
</TABLE>
The Distributor 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 Oaks, PA 19456
12
<PAGE>
<TABLE>
<CAPTION>
POSITION AND OFFICE POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- -------------------------------------- ------------------------------------- --------------------------------
<S> <C> <C>
Alfred P. West, Jr. Director, Chairman of the Board of --
Directors
Henry H. Greer Director --
Carmen V. Romeo Director --
Mark J. Held President & Chief Operating Officer --
Gilbert L. Beebower Executive Vice President --
Richard B. Lieb Executive Vice President --
Dennis J. McGonigle Executive Vice President --
Robert M. Silvestri Chief Financial Officer & Treasurer --
Leo J. Dolan, Jr. Senior Vice President --
Carl A. Guarino Senior Vice President --
Larry Hutchison Senior Vice President --
Jack May Senior Vice President --
Hartland J. McKeown Senior Vice President --
Barbara J. Moore Senior Vice President --
Kevin P. Robins Senior Vice President & General Vice President and Assistant
Counsel Secretary
Patrick K. Walsh Senior Vice President --
Robert Aller Vice President --
Gordon W. Carpenter Vice President --
Todd Cipperman Vice President & Assistant Secretary Vice President and Assistant
Secretary
S. Courtney E. Collier Vice President & Assistant Secretary --
Robert Crudup Vice President & Managing Director --
Barbara Doyne Vice President --
Jeff Drennen Vice President --
Vic Galef Vice President & Managing Director --
Lydia A. Gavalis Vice President & Assistant Secretary Vice President and Assistant
Secretary
Greg Gettinger Vice President & Assistant Secretary --
Kathy Heilig Vice President Vice President and Assistant
Secretary
Jeff Jacobs Vice President --
Kim Kirk Vice President & Managing Director --
John Krzeminski Vice President & Managing Director --
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
POSITION AND OFFICE POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- -------------------------------------- ------------------------------------- --------------------------------
<S> <C> <C>
Carolyn McLaurin Vice President & Managing Director --
W. Kelso Morrill Vice President --
Mark Nagle Vice President Controller and Chief Financial
Officer
Joanne Nelson Vice President --
Joseph M. O'Donnell Vice President & Assistant Secretary Vice President and Assistant
Secretary
Sandra K. Orlow Vice President & Assistant Secretary Vice President and Assistant
Secretary
Cynthia M. Parrish Vice President & Assistant Secretary --
Kim Rainey Vice President --
Rob Redican Vice President --
Maria Rinehart Vice President --
Mark Samuels Vice President & Managing Director --
Steve Smith Vice President --
Daniel Spaventa Vice President --
Kathryn L. Stanton Vice President & Assistant Secretary Vice President and Assistant
Secretary
Lydia J. Striegel Vice President & Assistant Secretary Vice President and Assistant
Secretary
Lori L. White Vice President & Assistant Secretary --
Wayne M. Withrow Vice President & Managing Director --
</TABLE>
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS:
Books or other documents required to be maintained by Section 31(a) of the
Investment Company Act of 1940, and the rules promulgated thereunder, are
maintained as follows:
(a) With respect to Rules 31a-1(a); 31a-1(b)(1); (2)(a) and (b); (3);
(6); (8); (12); and 31a-1(d), the required books and records are maintained
at the offices of Registrant's Custodian:
First Union National Bank
Broad and Chestnut Streets
P.O. Box 7618
Philadelphia, PA 19101
(b)/(c) With respect to Rules 31a-1(a); 31a-1(b)(1),(4); (2)(C) and (D);
(4); (5);
14
<PAGE>
(6); (8); (9); (10); (11); and 31a-1(f), the required books and records
are maintained at the offices of Registrant's Administrator:
SEI Investment Mutual Funds Resources
Oaks, PA 19456
(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 Advisers:
<TABLE>
<S> <C>
GOLDEN OAK PORTFOLIOS................................ Citizens Bank
One Citizens Banking Plaza
Flint, MI 48502
Wellington Management Company, LLP
75 State Street
Boston, MA 02109
Systematic Financial Management,
L.P.
300 Frank W. Burr Blvd.
Glenpointe East, 7th Floor
Teaneck, NJ 07666
Nicholas-Applegate Capital
Management
600 West Broadway
29th Floor
San Diego, CA 92101
OVB PORTFOLIOS....................................... One Valley Bank, National
Association
One Valley Square
Charleston, WV 25301
Wellington Management Company, LLP
75 State Street
Boston, MA 02109
</TABLE>
ITEM 29. MANAGEMENT SERVICES:
None.
ITEM 30. 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 hold 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.
15
<PAGE>
Registrant undertakes to furnish each prospective person to whom a
prospectus will be delivered with a copy of the Registrant's latest annual
report to shareholders, when such annual report is issued containing information
called for by Item 5A of Form N-1A, upon request and without charge.
NOTICE
A copy of the Agreement and Declaration of Trust for The Arbor Fund is on
file with the Secretary of State of The Commonwealth of Massachusetts and notice
is hereby given that this Registration Statement has been executed on behalf of
the 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.
16
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 25 to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Oaks, Commonwealth of Pennsylvania on
the 15th day of June, 1999.
<TABLE>
<S> <C> <C>
THE ARBOR FUND
By: /s/ MARK E. NAGLE
-----------------------------------------
Mark E. Nagle
PRESIDENT
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacity and on the dates indicated.
SIGNATURE TITLE DATE
- ------------------------------ --------------------------- -------------------
* Trustee
- ------------------------------ June 15, 1999
John T. Cooney
* Trustee
- ------------------------------ June 15, 1999
William M. Doran
* Trustee
- ------------------------------ June 15, 1999
Robert A. Nesher
* Trustee
- ------------------------------ June 15, 1999
Robert A. Patterson
* Trustee
- ------------------------------ June 15, 1999
Eugene B. Peters
* Trustee
- ------------------------------ June 15, 1999
James M. Storey
* Trustee
- ------------------------------ June 15, 1999
George J. Sullivan
/s/ MARK E. NAGLE President, Controller &
- ------------------------------ Chief Financial Officer June 15, 1999
Mark E. Nagle
<TABLE>
<S> <C> <C> <C>
*By: /s/ MARK E. NAGLE
-------------------------
Mark E. Nagle
ATTORNEY IN FACT
</TABLE>
17
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
- -----------
<S> <C>
EX-99.A Registrant's Agreement and Declaration of Trust, originally filed with the Registrant's Registration
Statement on Form N-1A (File No. 33-50718) with the Securities and Exchange Commission on August 11,
1992, is incorporated herein by reference as exhibit 1 to Post-Effective Amendment No. 17 filed with
the Securities and Exchange Commission on April 2, 1997.
EX-99.B Registrant's By-Laws are incorporated herein by reference to Post-Effective Amendment No. 20 to
Registrant's Registration Statement on Form N-1A (File No. 33-50718), filed with the Securities and
Exchange Commission on March 30, 1998.
EX-99.C Not Applicable.
EX-99.D1 Investment Advisory Agreement between the Registrant and Citizens Commercial and Savings Bank with
respect to the Golden Oak Diversified Growth Portfolio, the Golden Oak Intermediate-Term Income
Portfolio, Golden Oak Michigan Tax Free Bond Portfolio and Golden Oak Prime Obligation Money Market
Portfolio, originally filed as exhibit 5(b) with Pre-Effective Amendment No. 2 to Registrant's
Registration Statement on Form N-1A (File No. 33-50718) with the Securities and Exchange Commission
on January 13, 1993, is incorporated herein by reference as exhibit 5(a) to Post-Effective Amendment
No. 17 filed with the Securities and Exchange Commission on April 2, 1997.
EX-99.D2 Investment Sub-Advisory Agreement by and among Registrant, Citizens Commercial and Savings Bank and
Wellington Management Company, LLP with respect to the Golden Oak Prime Obligation Money Market
Portfolio, originally filed as exhibit 5(c), is incorporated herein by reference to Pre-Effective
Amendment No. 2 to Registrant's Registration Statement on Form N-1A (File No. 33-50718) filed with
the Securities and Exchange Commission on January 13, 1993.
EX-99.D3 Investment Advisory Agreement between the Registrant and One Valley Bank, National Association with
respect to the OVB Portfolios, originally filed as exhibit 5(h) with Post-Effective Amendment No. 6
to Registrant's Registration Statement on Form N-1A (File No. 33-50718) with the Securities and
Exchange Commission on September 23, 1993, is incorporated herein by reference as exhibit 5(d) to
Post-Effective Amendment No. 17 filed with the Securities and Exchange Commission on April 2, 1997.
EX-99.D4 Investment Sub-Advisory Agreement by and among the Registrant, One Valley Bank, National Association,
and Wellington Management Company, LLP with respect to the OVB Prime Obligations Portfolio originally
filed as exhibit 5(i) with Post-Effective Amendment No. 6 to Registrant's Registration Statement on
Form N-1A (File No. 33-50718) with the Securities and Exchange Commission on September 23, 1993, is
incorporated herein by reference as exhibit 5(e) to Post-Effective Amendment No. 17 filed with the
Securities and Exchange Commission on April 2, 1997.
EX-99.D5 Investment Advisory Agreement between the Registrant and Capitoline Investment Services, Incorporated
with respect to the U.S. Government Securities Money Fund, originally filed as exhibit 5(j) with
Post-Effective Amendment No. 9 to Registrant's Registration Statement on Form N-1A (File No.
33-50718) with the Securities and Exchange Commission on June 2, 1994, is incorporated herein by
reference as exhibit 5(f) to Post-Effective Amendment No. 17 filed with the Securities and Exchange
Commission on April 2, 1997.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
- -----------
<S> <C>
EX-99.D6 Schedule B to Investment Advisory Agreement between the Registrant and Citizens Commercial & Savings
Bank with respect to Golden Oak Growth and Income Portfolio, originally filed as exhibit 5(l) with
Post-Effective Amendment No. 10 to Registrant's Registration Statement on Form N-1A (File No.
33-50718) filed with the Securities and Exchange Commission on September 30, 1994 is incorporated
herein by reference as exhibit 5(g) to Post-Effective Amendment No. 18 filed with the Securities and
Exchange Commission on May 30, 1997.
EX-99.D7 Schedule to the Investment Advisory Agreement between Registrant and Capitoline Investment Services
Incorporated with respect to the Prime Obligations Fund, originally filed as exhibit 5(q) with
Post-Effective Amendment No. 13 to Registrant's Registration Statement on Form N-1A (File No.
33-50718) with the Securities and Exchange Commission on August 11, 1995, is incorporated herein by
reference as exhibit 5(h) to Post-Effective Amendment No. 17 filed with the Securities and Exchange
Commission on April 2, 1997.
EX-99.D8 Investment Sub-Advisory Agreement by and among the Registrant and Citizens Bank and
Nicholas-Applegate Capital Management with respect to the Golden Oak Diversified Growth Portfolio,
originally filed as exhibit 5(u), is incorporated herein by reference to Post-Effective Amendment No.
14 to Registrant's Registration Statement on Form N-1A (File No. 33-50718) filed with the Securities
and Exchange Commission on March 29, 1996.
EX-99.D9 Investment Advisory Agreement between the Registrant and One Valley Bank, National Association with
respect to the OVB Equity Income Portfolio, is incorporated herein by reference to Post-Effective
Amendment No. 16 to the Registrant's Registration Statement on Form N-1A (File No. 33-50718) filed
with the Securities and Exchange Commission on February 28, 1997.
EX-99.D10 Investment Sub-Advisory Agreement by and among the Registrant, Citizens Bank and Systematic Financial
Management, L.P. with respect to the Golden Oak Value Portfolio is incorporated herein by reference
to Post-Effective Amendment No. 20 to Registrant's Registration Statement on Form N-1A (File No.
33-50718), filed with the Securities and Exchange Commission on March 30, 1998.
EX-99.D11 Amendment to Investment Sub-Advisory Agreement between Citizens Bank and Nicholas-Applegate
Capital Management is incorporated herein by reference to Post-Effective Amendment No. 20 to
Registrant's Registration Statement on Form N-1A (File No. 33-50718), filed with the Securities and
Exchange Commission on March 30, 1998.
EX-99.D12 Schedule A to the Investment Advisory Agreement between Registrant and Citizens Bank is incorporated
herein by reference to Post-Effective Amendment No. 23 to Registrant's Registration Statement on
Form N-1A (File No. 33-50718), filed with the Securities and Exchange Commission on April 1, 1999.
EX-99.D13 Amendment to the Investment Sub-Advisory Agreement by and between Citizens Bank and Systematic
Financial Management, L.P. is incorporated herein by reference to Post-Effective Amendment No. 23 to
Registrant's Registration Statement on Form N-1A (File No. 33-50718), filed with the Securities and
Exchange Commission on April 1, 1999.
EX-99.D14 Amended Schedule A dated February 22, 1999 to the Investment Advisory Agreement between Registrant
and Citizens Bank is incorporated herein by reference to Post-Effective Amendment No. 23 to
Registrant's Registration Statement on Form N-1A (File No. 33-50718), filed with the Securities and
Exchange Commission on April 1, 1999.
EX-99.D15 Amendment No. 2 dated February 22, 1999 to the Investment Sub-Advisory Agreement between Citizens
Bank and Nicholas-Applegate Capital Management is incorporated herein by reference as Exhibit d(15)
to Post-Effective Amendment No. 24 filed with the Securities and Exchange Commission on May 28, 1999.
EX-99.E1 Distribution Agreement between Registrant and SEI Financial Services Company, originally filed with
Pre-Effective Amendment No. 1 to Registrant's Registration Statement on Form N-1A (File No. 33-50718)
with the Securities and Exchange Commission on October 14, 1992, is incorporated herein by reference
as exhibit 6(a) to Post-Effective Amendment No. 17 filed with the Securities and Exchange Commission
on April 2, 1997.
EX-99.E2 Transfer Agent Agreement between Registrant and SEI Financial Management Corporation is incorporated
herein by reference to Pre-Effective Amendment No. 2 to Registrant's Registration Statement on Form
N-1A (File No. 33-50718) filed with the Securities and Exchange Commission on January 13, 1993.
EX-99.E3 Transfer Agent Agreement between Registrant and Crestar Bank is incorporated herein by reference to
Post-Effective Amendment No. 12 to Registrant's Registration Statement on Form N-1A (File No.
33-50718) filed with the Securities and Exchange Commission on May 31, 1995.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
- -----------
<S> <C>
EX-99.E4 Transfer Agent Agreement between Registrant and Supervised Service Company is incorporated herein by
reference to Post-Effective Amendment No. 12 to Registrant's Registration Statement on Form N-1A
(File No. 33-50718) filed with the Securities and Exchange Commission on May 31, 1995.
EX-99.E5 Amendment to Transfer Agreement between Registrant and Crestar Bank dated August 1, 1994 is
incorporated herein by reference to Post-Effective Amendment No. 20 to Registrant's Registration
Statement on Form N-1A (File No. 33-50718), filed with the Securities and Exchange Commission on
March 30, 1998.
EX-99.E6 Amended and Restated Schedule A, relating to The Golden Oak Family of Funds, to the Distribution
Plan is incorporated herein by reference to Post-Effective Amendment No. 23 to Registrant's
Registration Statement on Form N-1A (File No. 33-50718), filed with the Securities and Exchange
Commission on April 1, 1999.
EX-99.F Not Applicable.
EX-99.G1 Custodian Agreement between Registrant and CoreStates Bank N.A., originally filed with Pre-Effective
Amendment No. 1 to Registrant's Registration Statement on Form N-1A (File No. 33-50718) with the
Securities and Exchange Commission on October 14, 1992, is incorporated herein by reference as
exhibit 8(a) to Post-Effective Amendment No. 17 filed with the Securities and Exchange Commission on
April 2, 1997.
EX-99.G2 Custodian Agreement between Registrant and Crestar Bank, originally filed with Post-Effective
Amendment No. 9 to Registrant's Registration Statement on Form N-1A (File No. 33-50718) filed with
the Securities and Exchange Commission on June 2, 1994, is incorporated herein by reference as
exhibit 8(b) to Post-Effective Amendment No. 18 filed with the Securities and Exchange Commission on
May 30, 1997.
EX-99.G3 Amendment to Custodian Agreement between Registrant and Crestar Bank dated August 1, 1994 is
incorporated herein by reference to Post-Effective Amendment No. 20 to Registrant's Registration
Statement on Form N-1A (File No. 33-50718), filed with the Securities and Exchange Commission on
March 30, 1998.
EX-99.H1 Administration Agreement between Registrant and SEI Financial Management Corporation with Schedule
dated January 28, 1993 for the Golden Oak Portfolios and forms of Schedule for the California Tax
Exempt Portfolio and Institutional Tax Free Portfolio, originally filed as exhibit 5(a), is
incorporated herein by reference to Post-Effective Amendment No. 4 to Registrant's Registration
Statement on Form N-1A (File No. 33-50718) filed with the Securities and Exchange Commission on July
29, 1993.
EX-99.H2 Schedule, relating to the OVB Prime Obligations, OVB Capital Appreciation, OVB Emerging Growth, OVB
Government Securities and OVB West Virginia Tax-Exempt Income Portfolios (the OVB Portfolios), to
Administration Agreement by and between the Registrant and SEI Financial Management Corporation dated
as of January 28, 1993 is incorporated herein by reference to Post-Effective Amendment No. 20 to
Registrant's Registration Statement on Form N-1A (File No. 33-50718), filed with the Securities and
Exchange Commission on March 30, 1998.
EX-99.H3 Schedule relating to U.S. Government Securities Money Fund,to Administration Agreement by and between
Registrant and SEI Financial Management Corporation is incorporated herein by reference to
Post-Effective Amendment No. 20 to Registrant's Registration Statement on Form N-1A (File No.
33-50718), filed with the Securities and Exchange Commission on March 30, 1998.
EX-99.H4 Schedule dated May 19, 1997, relating to The Golden Oak Portfolios, to Administration Agreement by
and between Registrant and SEI Fund Resources is incorporated herein by reference to Post-Effective
Amendment No. 20 to Registrant's Registration Statement on Form N-1A (File No. 33-50718), filed with
the Securities and Exchange Commission on March 30, 1998.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
- -----------
<S> <C>
EX-99.H5 Administration Agreement between Registrant and SEI Financial Corporation with Schedule dated January
28, 1993 as amended and restated on May 17, 1994 for Golden Oak Portfolios, the Prudential Portfolios
and the OVB Portfolios originally filed as exhibit 5(o) with Post-Effective Amendment No. 12 to
Registrant's Registration Statement on Form N-1A (File No. 33-50718) with the Securities and Exchange
Commission on May 31, 1995 is incorporated herein by reference as exhibit 9(e) to Post-Effective
Amendment No. 17 filed with the Securities and Exchange Commission on April 2, 1997.
EX-99.H6 Administration Agreement between Registrant and SEI Financial Management Corporation with Schedule
dated August 1, 1994 originally filed as exhibit 5(p) with Post-Effective Amendment No. 12 to
Registrant's Registration Statement on Form N-1A (File No. 33-50718) with the Securities and Exchange
Commission on May 31, 1995 is incorporated herein by reference as exhibit 9(f) to Post-Effective
Amendment No. 17 filed with the Securities and Exchange Commission on April 2, 1997.
EX-99.H7 Schedule relating to the Prime Obligations Fund, to Administration Agreement by and between
Registrant and SEI Financial Management Corporation originally filed as exhibit 5(p) with
Post-Effective Amendment No. 13 to Registrant's Registration Statement on Form N-1A (File No.
33-50718) with the Securities and Exchange Commission on August 11, 1995 is incorporated herein by
reference as exhibit 9(g) to Post-Effective Amendment No. 17 filed with the Securities and Exchange
Commission on April 2, 1997.
EX-99.H8 Consent to Assignment and Assumption of Administration Agreement between the Registrant and SEI
Financial Management Corporation, dated January 28, 1993, to SEI Fund Resources is incorporated
herein by reference as exhibit 9(h) to Post-Effective Amendment No. 17 filed with the Securities and
Exchange Commission on April 2, 1997.
EX-99.H9 Consent to Assignment and Assumption of Administration Agreement between the Registrant and SEI
Financial Management Corporation, dated June 1, 1996, to SEI Fund Resources is incorporated herein by
reference to Post-Effective Amendment No. 20 to Registrant's Registration Statement on Form N-1A
(File No. 33-50718), filed with the Securities and Exchange Commission on March 30, 1998.
EX-99.H10 Schedule dated November 23, 1998 to the Administration Agreement, relating to the OVB Family of
Funds, between the Registrant and SEI Financial Management Corporation is incorporated herein by
reference to Post-Effective Amendment No. 23 to Registrant's Registration Statement on Form N-1A
(File No. 33-50718), filed with the Securities and Exchange Commission on April 1, 1999.
EX-99.H11 Schedule dated February 22, 1999 to the Administration Agreement, relating to The Golden Oak Family
of Funds, between the Registrant and SEI Fund Resources is incorporated herein by reference to
Post-Effective Amendment No. 23 to Registrant's Registration Statement on Form N-1A (File No. 33-50718),
filed with the Securities and Exchange Commission on April 1, 1999.
EX-99.I Opinion and Consent of Counsel is filed herewith.
EX-99.J Not Applicable.
EX-99.K Not Applicable.
EX-99.L Not Applicable.
EX-99.M1 Registrant's Distribution Plan with respect to the Class B shares of the Golden Oak Portfolios
(except Golden Oak Growth and Income Portfolio) originally filed with Pre-Effective Amendment No. 1
to Registrant's Registration Statement on Form N-1A (File No. 33-50718) with the Securities and
Exchange Commission on October 14, 1992 is incorporated herein by reference as exhibit 15(a) to
Post-Effective Amendment No. 17 filed with the Securities and Exchange Commission on April 2, 1997.
EX-99.M2 Registrant's Distribution Plan with respect to the Class B shares of the OVB Portfolios originally
filed with Post-Effective Amendment No. 6 to Registrant's Registration Statement on Form N-1A (File
No. 33-50718) with the Securities and Exchange Commission on September 23, 1993 incorporated herein
by reference as exhibit 15(b) to Post-Effective Amendment No. 17 filed with the Securities and
Exchange Commission on April 2, 1997.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
- -----------
<S> <C>
EX-99.M3 Registrant's Distribution Plan with respect to the Class B Shares of the Golden Oak Growth and Income
Portfolio is incorporated herein by reference to Post-Effective Amendment No. 20 to Registrant's
Registration Statement on Form N-1A (File No. 33-50718), filed with the Securities and Exchange
Commission on March 30, 1998.
EX-99.M4 Rule 18f-3 Multi-Class Plan originally filed with Post-Effective Amendment No. 12 to Registrant's
Registration Statement on Form N-1A (File No. 33-50718) with the Securities and Exchange Commission
on May 31, 1995 is incorporated herein by reference as exhibit 15(d) to Post-Effective Amendment No.
17 filed with the Securities and Exchange Commission on April 2, 1997.
EX-99.N Not Applicable.
EX-99.O Not Applicable.
EX-99.P(1) Powers of Attorney for John T. Cooney, William M. Doran, Frank E. Morris, Mark E. Nagle, Robert A.
Nesher, Robert A. Patterson, Eugene B. Peters and James M. Storey are incorporated herein by
reference to Post-Effective Amendment No. 22 to Registrant's Registration Statement on Form N-1A
(File No. 33-50718), filed with the Securities and Exchange Commission on December 30, 1998.
EX-99.P(2) Power of Attorney for George J. Sullivan, Jr. is incorporated herein by reference to Post-Effective
Amendment No. 24 to Registrant's Registration Statement on Form N-1A (File No. 33-50718) filed with
the Securities and Exchange Commission on May 28, 1999.
</TABLE>
<PAGE>
[LETTERHEAD OF MORGAN LEWIS & BOCKIUS]
June 15, 1999
The Arbor Fund
c/o SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, Pennsylvania 19456
Re: Opinion of Counsel regarding Post-Effective Amendment No. 25 to the
Registration Statement filed on Form N-1A under the Securities Act of 1933
(File No. 33-50718).
--------------------------------------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to The Arbor Fund, a Massachusetts trust (the "Trust"),
in connection with the above-referenced Registration Statement (as amended, the
"Registration Statement") which relates to the Trust's units of beneficial
interest, par value $.00001 per share (collectively, the "Shares") of The Arbor
Fund. This opinion is being delivered to you in connection with the Trust's
filing of Post-Effective Amendment No. 25 to the Registration Statement (the
"Amendment") to be filed with the Securities and Exchange Commission pursuant to
Rule 485(a) of the Securities Act of 1933 (the "1933 Act"). With your
permission, all assumptions and statements of reliance herein have been made
without any independent investigation or verification on our part except to the
extent otherwise expressly stated, and we express no opinion with respect to the
subject matter or accuracy of such assumptions or items relied upon.
In connection with this opinion, we have reviewed, among other things, executed
copies of the following documents:
(a) a certificate of the Commonwealth of Massachusetts as to the existence
and good standing of the Trust;
<PAGE>
The Arbor Fund
June 15, 1999
Page 2
(b) the Agreement and Declaration of Trust for the Trust and all
amendments and supplements thereto (the "Declaration of Trust");
(c) a certificate executed by John H. Grady, Jr., the Secretary of the
Trust, certifying as to, and attaching copies of, the Trust's
Declaration of Trust and Amended and Restated By-Laws (the "By-Laws"),
and certain resolutions adopted by the Board of Trustees of the Trust
authorizing the issuance of the Shares; and
(d) a printer's proof of the Amendment.
In our capacity as counsel to the Trust, we have examined the originals, or
certified, conformed or reproduced copies, of all records, agreements,
instruments and documents as we have deemed relevant or necessary as the basis
for the opinion hereinafter expressed. In all such examinations, we have assumed
the legal capacity of all natural persons executing documents, the genuineness
of all signatures, the authenticity of all original or certified copies, and the
conformity to original or certified copies of all copies submitted to us as
conformed or reproduced copies. As to various questions of fact relevant to such
opinion, we have relied upon, and assume the accuracy of, certificates and oral
or written statements of public officials and officers or representatives of the
Fund. We have assumed that the Amendment, as filed with the Securities and
Exchange Commission, will be in substantially the form of the printer's proof
referred to in paragraph (d) above.
Based upon, and subject to, the limitations set forth herein, we are of the
opinion that the Shares, when issued and sold in accordance with the Declaration
of Trust and By-Laws, and for the consideration described in the Registration
Statement, will be legally issued, fully paid and nonassessable under the laws
of the Commonwealth of Massachusetts.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not concede that we are in
the category of persons whose consent is required under Section 7 of the 1933
Act.
Very truly yours,
/s/ Morgan, Lewis & Bockius LLP
Morgan, Lewis & Bockius LLP
<PAGE>
The Arbor Fund
June 15, 1999
Page 3
Prepared by:
Richard Zemble
- -------------------------
Reviewed by:
John H. Grady, Jr.
- -------------------------
Signed by:
/s/ John H. Grady, Jr.
- -------------------------
John H. Grady, Jr.
