<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 29, 1997
FILE NO. 33-58041
FILE NO. 811-7257
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 2 /X/
AND
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 4 /X/
------------------------
SEI INSTITUTIONAL INVESTMENTS TRUST
(Exact Name of Registrant as Specified in Charter)
C/O THE CT CORPORATION SYSTEM
2 Oliver Street
Boston, Massachusetts 02109
(Address of Principal Executive Offices, Zip Code)
Registrant's Telephone Number, including Area Code 610-989-1000
DAVID G. LEE
C/O SEI Investments Company
Oaks, Pennsylvania 19456
(Name and Address of Agent for Service)
COPIES TO:
Richard W. Grant, Esquire John H. Grady, Jr., Esquire
Morgan, Lewis & Bockius LLP Morgan, Lewis & Bockius LLP
2000 One Logan Square 1800 M Street, N.W.
Philadelphia, Pennsylvania 19103 Washington, D.C. 20036
------------------------
It is proposed that this filing will become effective (check appropriate box):
<TABLE>
<C> <S>
/X/ immediately upon filing pursuant to paragraph (b)
/ / on [date] pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)
/ / on [date] pursuant to paragraph (a)(1) of Rule 485
/ / 75 days after filing pursuant to paragraph (a)(2)
</TABLE>
Registrant has elected to register an indefinite number of securities
pursuant to the provisions of Rule 24f-2 under the Investment Company Act of
1940.
Registrant has filed a 24f-2 Notice on July 28, 1997 for its fiscal year
ended May 31, 1997.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
SEI INSTITUTIONAL INVESTMENTS TRUST
CROSS REFERENCE SHEET
POST-EFFECTIVE AMENDMENT NO. 2
<TABLE>
<CAPTION>
N-1A ITEM NO. LOCATION
- -------------------------------------------------------------- -------------------------------------------------
<S> <C> <C>
PART A--LARGE CAP, SMALL CAP, CORE FIXED INCOME, HIGH YIELD BOND, INTERNATIONAL FIXED INCOME, EMERGING MARKETS
EQUITY AND INTERNATIONAL EQUITY FUNDS
Item 1. Cover Page....................................... Cover Page
Item 2. Synopsis......................................... Annual Operating Expenses
Item 3. Condensed Financial Information.................. Financial Highlights
Item 4. General Description of Registrant................ The Trust; Investment Objectives and Policies;
General Investment Policies and Risk Factors;
Description of Permitted Investments and Risk
Factors
Item 5. Management of the Fund........................... General Information--General Management of the
Funds; The Money Managers
Item 5a. Management's Discussion of Fund Performance...... **
Item 6. Capital Stock & Other Securities................. General Information--Voting Rights, Shareholder
Inquiries, Dividends; Taxes
Item 7. Purchase of Securities Being Offered............. Purchase and Redemption of Shares
Item 8. Redemption or Repurchase......................... Purchase and Redemption of Shares
Item 9. Pending Legal Proceedings........................ *
PART B--ALL FUNDS
Item 10. Cover Page....................................... Cover Page
Item 11. Table of Contents................................ Table of Contents
Item 12. General Information & History.................... The Trust
Item 13. Investment Objectives & Policies................. Description of Permitted Investments; Investment
Limitations
Item 14. Management of the Registrant..................... Trustees and Officers of the Trust; The Manager
and The Money Managers
Item 15. Control Persons & Principal Holders of
Securities..................................... Trustees and Officers of the Trust; 5%
Shareholders
Item 16. Investment Advisory & Other Services............. The Administrator and Transfer Agent; The Manager
and The Money Managers; Distribution; Experts
Item 17. Brokerage Allocation............................. Fund Transactions
Item 18. Capital Stock & Other Securities................. Description of Shares
Item 19. Purchase, Redemption, & Pricing of Securities
Being Offered.................................. Purchase and Redemption of Shares; Description of
Shares; Determination of Net Asset Value
Item 20. Tax Status....................................... Taxes
</TABLE>
(i)
<PAGE>
<TABLE>
<CAPTION>
N-1A ITEM NO. LOCATION
- -------------------------------------------------------------- -------------------------------------------------
<S> <C> <C>
Item 21. Underwriters..................................... Distribution
Item 22. Calculation of Yield Quotation................... Performance
Item 23. Financial Statements............................. Financial Statements
</TABLE>
PART C
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this Registration Statement.
- ------------------------
* Not Applicable
** Information required by this Item 5a is contained in the Annual Report for
the fiscal year ending May 31, 1997.
(ii)
<PAGE>
SEI INSTITUTIONAL INVESTMENTS TRUST
SEPTEMBER 30, 1997
- --------------------------------------------------------------------------------
LARGE CAP FUND
SMALL CAP FUND
CORE FIXED INCOME FUND
HIGH YIELD BOND FUND
INTERNATIONAL FIXED INCOME FUND
EMERGING MARKETS EQUITY FUND
INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
This Prospectus concisely sets forth information about the above-referenced
funds that an investor needs to know before investing. Please read this
Prospectus carefully, and keep it on file for future reference.
A Statement of Additional Information dated September 30, 1997 has been filed
with the Securities and Exchange Commission (the "SEC") and is available upon
request and without charge by writing the distributor, SEI Investments
Distribution Co., Oaks, Pennsylvania 19456, or by calling 1-800-342-5734. The
Statement of Additional Information is incorporated by reference into this
Prospectus.
SEI Institutional Investments Trust ("SIIT" or the "Trust") is an open-end
management investment company that offers certain institutions with investable
pools of assets that have signed an Investment Management Agreement with SEI
Investments Management Corporation a convenient means of investing in
professionally managed diversified and non-diversified portfolios of securities.
THE HIGH YIELD BOND FUND INVESTS PRIMARILY, AND MAY INVEST ALL OF ITS ASSETS, IN
LOWER RATED BONDS, COMMONLY REFERRED TO AS "JUNK BONDS." THESE SECURITIES ARE
SPECULATIVE AND ARE SUBJECT TO GREATER RISK OF LOSS OF PRINCIPAL AND INTEREST
THAN ARE INVESTMENTS IN HIGHER RATED BONDS. BECAUSE INVESTMENT IN SUCH
SECURITIES ENTAILS GREATER RISKS, INCLUDING RISK OF DEFAULT, AN INVESTMENT IN
THE HIGH YIELD BOND FUND SHOULD NOT CONSTITUTE A COMPLETE INVESTMENT PROGRAM AND
MAY NOT BE APPROPRIATE FOR ALL INVESTORS. INVESTORS SHOULD CAREFULLY CONSIDER
THE RISKS POSED BY AN INVESTMENT IN THE HIGH YIELD BOND FUND BEFORE INVESTING.
SEE "INVESTMENT OBJECTIVES AND POLICIES," "GENERAL INVESTMENT POLICIES AND RISK
FACTORS -- RISK FACTORS RELATING TO INVESTING IN LOWER RATED SECURITIES" AND THE
"APPENDIX."
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK. THE TRUST'S SHARES ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
GOVERNMENT AGENCY. INVESTMENT IN THE SHARES INVOLVES RISK, INCLUDING POSSIBLE
LOSS OF THE PRINCIPAL AMOUNT INVESTED.
<PAGE>
TABLE OF CONTENTS
_________________________________________________________________
<TABLE>
<S> <C>
Annual Operating Expenses........................ 3
Financial Highlights............................. 4
The Trust........................................ 5
Eligible Investors............................... 5
General Management of the Funds.................. 5
The Money Managers............................... 8
Investment Objectives and Policies............... 17
General Investment Policies and Risk Factors..... 22
Investment Limitations........................... 25
Purchase and Redemption of Shares................ 26
Performance...................................... 28
Taxes............................................ 29
General Information.............................. 30
Description of Permitted Investments and Risk
Factors......................................... 32
Appendix......................................... A-1
</TABLE>
2
<PAGE>
ANNUAL OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EMERGING
CORE FIXED HIGH YIELD INTERNATIONAL MARKETS INTERNATIONAL
LARGE CAP SMALL CAP INCOME BOND FIXED INCOME EQUITY EQUITY
FUND FUND FUND FUND FUND FUND FUND
----------- ----------- ----------- ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Management/Administration Fees
(AFTER FEE WAIVERS) (1)(2) .26% .51% .14% .38% .34% .94% .33%
Other Expenses (3) .08% .09% .07% .09% .27% .46% .25%
- ---------------------------------------------------------------------------------------------------------------------------------
Total Fund Operating Expenses (AFTER
FEE WAIVERS) (4) .34% .60% .21% .47% .61% 1.40% .58%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) EACH SHAREHOLDER MUST ALSO ENTER INTO AN INVESTMENT MANAGEMENT AGREEMENT
WITH SEI INVESTMENTS MANAGEMENT CORPORATION ("SIMC") FOR INVESTMENT
STRATEGIES AND PROGRAMS AND ASSET ALLOCATION SERVICES, AND PAY AN ANNUAL FEE
THEREUNDER CALCULATED AS A SPECIFIED PERCENTAGE OF THE SHAREHOLDER'S ASSETS
MANAGED BY SIMC.
(2) SIMC AND SEI FUND MANAGEMENT ("SEI MANAGEMENT") HAVE AGREED TO WAIVE, ON A
VOLUNTARY BASIS, A PORTION OF THEIR FEES, AND THE MANAGEMENT/ ADMINISTRATION
FEES SHOWN REFLECT THESE VOLUNTARY WAIVERS. EACH OF SIMC AND SEI MANAGEMENT
RESERVES THE RIGHT TO TERMINATE ITS WAIVER AT ANY TIME IN ITS SOLE
DISCRETION. ABSENT SUCH FEE WAIVERS, MANAGEMENT/ADMINISTRATION FEES WOULD
BE: LARGE CAP FUND, .40% AND .05%, RESPECTIVELY; SMALL CAP FUND, .65% AND
.05%, RESPECTIVELY; CORE FIXED INCOME FUND, .30% AND .05%, RESPECTIVELY;
HIGH YIELD BOND FUND, .49% AND .05%, RESPECTIVELY; INTERNATIONAL FIXED
INCOME FUND, .45% AND .05%, RESPECTIVELY; EMERGING MARKETS EQUITY FUND,
1.05% AND .05%, RESPECTIVELY; AND INTERNATIONAL EQUITY FUND, .51% AND .05%,
RESPECTIVELY.
(3) THE HIGH YIELD BOND, INTERNATIONAL FIXED INCOME AND EMERGING MARKETS EQUITY
FUNDS HAD NOT COMMENCED OPERATIONS AS OF MAY 31, 1997. "OTHER EXPENSES" FOR
THESE FUNDS ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
(4) EACH OF SIMC AND SEI MANAGMENT RESERVES THE RIGHT TO TERMINATE ITS VOLUNTARY
WAIVER AT ANY TIME IN ITS SOLE DISCRETION. ABSENT THE FEE WAIVERS DESCRIBED
ABOVE, TOTAL OPERATING EXPENSES WOULD BE: LARGE CAP FUND, .53%, SMALL CAP
FUND, .79%, CORE FIXED INCOME FUND, .42%, HIGH YIELD BOND FUND, .63%,
INTERNATIONAL FIXED INCOME FUND, .77%, EMERGING MARKETS EQUITY FUND, 1.56%,
AND INTERNATIONAL EQUITY FUND, .81%.
EXAMPLE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YR. 3 YRS. 5 YRS.
----------- ----------- -----------
<S> <C> <C> <C>
An investor in a Fund would pay the following expenses on a $1,000 investment
assuming
(1) a 5% annual return and (2) redemption at the end of each time period:
Large Cap Fund $ 3 $ 11 $ 19
Small Cap Fund $ 6 $ 19 $ 33
Core Fixed Income Fund $ 2 $ 7 $ 12
High Yield Bond Fund $ 5 $ 15 --
International Fixed Income Fund $ 6 $ 20 --
Emerging Markets Equity Fund $ 14 $ 44 --
International Equity Fund $ 6 $ 19 $ 32
- ----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
10 YRS.
-----------
<S> <C>
An investor in a Fund would pay the following expenses on a $1,000 investment
assuming
(1) a 5% annual return and (2) redemption at the end of each time period:
Large Cap Fund $ 43
Small Cap Fund $ 75
Core Fixed Income Fund $ 27
High Yield Bond Fund --
International Fixed Income Fund --
Emerging Markets Equity Fund --
International Equity Fund $ 73
- -------------------------------------------------------------------------------------
</TABLE>
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. THE PURPOSE
OF THE EXPENSE TABLE AND EXAMPLE IS TO ASSIST THE INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT MAY BE DIRECTLY OR INDIRECTLY BORNE BY INVESTORS
IN THE FUNDS. ADDITIONAL INFORMATION MAY BE FOUND UNDER "GENERAL MANAGEMENT OF
THE FUNDS" AND "THE MONEY MANAGERS."
3
<PAGE>
FINANCIAL HIGHLIGHTS
______________________________________________________________
The following information has been derived from the financial statements audited
by Coopers & Lybrand L.L.P., the Trust's independent accountants, as indicated
in their report dated July 15, 1997 on the Trust's financial statements as of
May 31, 1997, which are incorporated by reference into the Trust's Statement of
Additional Information. The Trust's financial statements and additional
performance information are set forth in the 1997 Annual Report to Shareholders,
which is available upon request and without charge by calling 1-800-342-5734.
This table should be read in conjunction with the Trust's financial statements
and notes thereto. The High Yield Bond, International Fixed Income and Emerging
Markets Equity Funds had not commenced operations as of the date of this
Prospectus.
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
DISTRIBUTIONS
NET ASSET NET REALIZED DISTRIBUTIONS FROM NET ASSET
VALUE NET AND UNREALIZED FROM NET REALIZED VALUE
BEGINNING INVESTMENT GAINS ON INVESTMENT CAPITAL END OF TOTAL
OF PERIOD INCOME SECURITIES INCOME GAINS PERIOD RETURN
<S> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
------------------------------------------------
LARGE CAP FUND(1)
------------------------------------------------
1997 $ 10.00 $0.17 $ 2.63 $(0.14) $ -- $ 12.66 28.22%
------------------------------------------------
SMALL CAP FUND(1)
------------------------------------------------
1997 $ 10.00 $0.06 $ 0.85 $(0.05) $ -- $ 10.86 9.18%
------------------------------------------------
CORE FIXED INCOME FUND(1)
------------------------------------------------
1997 $ 10.00 $0.64 $ 0.17 $(0.64) $(0.04) $ 10.13 8.28%
------------------------------------------------
INTERNATIONAL EQUITY FUND(1)
------------------------------------------------
1997 $ 10.00 $0.14 $ 0.61 $(0.05) $(0.01) $ 10.69 7.56%
<CAPTION>
RATIO OF
RATIO OF INVESTMENT TO AVERAGE TO AVERAGE
NET ASSETS EXPENSES INCOME NET ASSETS NET ASSETS PORTFOLIO AVERAGE
END OF TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER COMMISSION
PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE RATE+
<S> <C> <C> <C> <C> <C> <C> <C>
- ----- ------------------------------------------------------------------------------------------
----------------------------------------
LARGE CAP FUND(1)
----------------------------------------
1997 $ 438,818 0.34% 1.65% 0.53% 1.46% 71% $ 0.049
----------------------------------------
SMALL CAP FUND(1)
----------------------------------------
1997 $ 123,941 0.60% 0.70% 0.79% 0.51% 163% $ 0.052
----------------------------------------
CORE FIXED INCOME FUND(1)
----------------------------------------
1997 $ 349,304 0.21% 6.60% 0.42% 6.39% 194% n/a
----------------------------------------
INTERNATIONAL EQUITY FUND(1)
----------------------------------------
1997 $ 384,663 0.63% 1.73% 0.82% 1.54% 120% $ 0.017
</TABLE>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
+ AVERAGE COMMISSION RATE PAID PER SHARE FOR EQUITY SECURITY PURCHASES AND
SALES DURING THE PERIOD. GENERALLY, NON-U.S. COMMISSIONS ARE LOWER THAN U.S.
COMMISSIONS WHEN EXPRESSED AS CENTS PER SHARE, BUT HIGHER WHEN EXPRESSED AS
A PERCENTAGE OF TRANSACTIONS BECAUSE OF THE LOWER PER-SHARE PRICES OF MANY
NON-U.S. SECURITIES.
(1) THE FUNDS COMMENCED OPERATIONS ON JUNE 14, 1996. ALL RATIOS EXCEPT TOTAL
RETURN HAVE BEEN ANNUALIZED.
4
<PAGE>
THE TRUST
__________________________________________________________________________
SEI INSTITUTIONAL INVESTMENTS TRUST ("SIIT" or the "Trust") is an open-end
management investment company, organized as a Massachusetts business trust under
a Declaration of Trust dated March 1, 1995. The Declaration of Trust permits the
Trust to offer separate series ("funds") of units of beneficial interest
("shares") and different classes of each fund. Currently, the Trust does not
intend to issue additional classes of shares.
This Prospectus relates to the following funds: Large Cap, Small Cap, Core
Fixed Income, High Yield Bond, International Fixed Income, Emerging Markets
Equity and International Equity Funds (each a "Fund" and, together, the
"Funds"). All of these Funds are diversified funds except for the International
Fixed Income Fund, which is a non-diversified fund. Additional information
pertaining to the Trust may be obtained by writing SEI Investments Distribution,
Co., Oaks, Pennsylvania 19456, or by calling 1-800-342-5734.
ELIGIBLE INVESTORS
_________________________________________________________________
Eligible investors are principally institutions that have
investable pools of assets, including defined benefit
plans, defined contribution plans, health care defined
benefit plans and board-designated funds, insurance
operating funds, foundations, endowments, public plans and
Taft-Hartley plans and have entered into an Investment
Management Agreement (the "Agreement") with SEI Investments
Management Corporation ("SIMC")(collectively, "Eligible
Investors").
Pursuant to the Agreement, SIMC will consult with
each Eligible Investor to define its investment objectives,
desired returns and tolerance for risk, and to develop a
plan for the allocation of assets among different asset
classes. The Agreement sets forth the fee to be paid to
SIMC, which is ordinarily expressed as a percentage of the
Eligible Investor's assets managed by SIMC. This fee, which
is negotiated by the Eligible Investor and SIMC, may
include a performance based fee or a fixed-dollar fee for
certain specified services. Either the Eligible Investor or
SIMC may terminate the Agreement upon written notice as
provided in the Agreement.
GENERAL MANAGEMENT OF
THE FUNDS ______________________________________________________________________
SIMC (the "Manager") is a wholly-owned subsidiary of SEI
Investments Company ("SEI Investments"), a financial
services company. The principal business address of SIMC
and SEI Investments is Oaks, Pennsylvania, 19456. SEI
Investments was founded in 1968, and is a leading provider
of investment solutions to banks, institutional investors,
investment advisers and insurance companies. Affiliates of
SIMC have provided consulting advice to institutional
investors for more than 20 years, including advice
regarding selection and evaluation of money managers. SIMC
currently serves as manager to more than 43 investment
companies, including more than 325 funds, with more than
$93.9 billion in assets as of May 31, 1997.
SIMC is the investment Manager for each of the Funds,
and operates as a "manager of managers." As Manager, SIMC
oversees the investment advisory services
5
<PAGE>
provided to the Funds and manages the cash portion of the
Funds' assets. Pursuant to separate sub-advisory agreements
with SIMC, and under the supervision of the Manager and the
Board of Trustees, a number of sub-advisers (the "Money
Managers") are responsible for the day-to-day investment
management of all or a discrete portion of the assets of
the Funds. Money Managers are selected for the Funds based
primarily upon the research and recommendations of SIMC,
which evaluates quantitatively and qualitatively a Money
Manager's skills and investment results in managing assets
for specific asset classes, investment styles and
strategies.
Subject to Board review, SIMC allocates and, when
appropriate, reallocates the Funds' assets among Money
Managers, monitors and evaluates Money Manager performance,
and oversees Money Manager compliance with the Funds'
investment objectives, policies and restrictions. SIMC HAS
ULTIMATE RESPONSIBILITY FOR THE INVESTMENT PERFORMANCE OF
THE FUNDS DUE TO ITS RESPONSIBILITY TO OVERSEE MONEY
MANAGERS AND RECOMMEND THEIR HIRING, TERMINATION AND
REPLACEMENT.
SIMC and the Trust have obtained an exemptive order
from the Securities and Exchange Commission (the "SEC")
that permits SIMC, with the approval of the Trust's Board
of Trustees, to retain Money Managers unaffiliated with
SIMC for the Funds without submitting the Money Manager
agreements to a vote of the Fund's shareholders. The
exemptive relief permits SIMC to disclose only the
aggregate amount payable by SIMC to the Money Managers
under all such Money Manager agreements for each Fund. The
Funds will notify shareholders in the event of any addition
or change in the identity of its Money Managers.
For its management services, SIMC is entitled to a
fee, which is calculated daily and paid monthly, at the
following annual rates (shown as a percentage of the
average daily net assets of each Fund): Large Cap Fund,
.40%; Small Cap Fund, .65%; Core Fixed Income Fund, .30%;
High Yield Bond Fund, .49%; International Fixed Income
Fund, .45%; Emerging Markets Equity Fund, 1.05%; and
International Equity Fund, .51%. SIMC pays the Money
Managers a fee out of its advisory fee, which fee is based
on a percentage of the average monthly market value of the
assets managed by each Money Manager.
For the fiscal year ended May 31, 1997, the Large
Cap, Small Cap, Core Fixed Income and International Equity
Funds paid management fees, after fee waivers, of .24%,
.49%, .12% and .35%, respectively, of their average daily
net assets. The High Yield Bond, International Fixed Income
and Emerging Markets Equity Funds had not commenced
operations as of May 31, 1997.
SEI Fund Management ("SEI Management" or the
"Administrator") provides the Fund with overall
administrative services, regulatory reporting, all
necessary office space, equipment, personnel and
facilities, and acts as dividend disbursing agent. SEI
Management also serves as transfer agent (the "Transfer
Agent") for the Funds. For these administrative services,
SEI Management is entitled to a fee, which is calculated
daily and paid monthly, at an annual rate of .05% of the
average daily net assets of each Fund.
6
<PAGE>
SIMC and SEI Management have agreed, on a voluntary basis,
to waive a portion of their Management/Administration Fees
and/or reimburse Other Expenses to the extent necessary to
keep Total Operating Expenses from exceeding current
levels. The Total Operating Expenses reflect current fee
waivers.
For the fiscal year ended May 31, 1997, the Large
Cap, Small Cap, Core Fixed Income and International Equity
Funds paid administrative fees, after fee waivers, of .02%,
.02%, .02% and .03%, respectively, of their average daily
net assets. The High Yield Bond, International Fixed Income
and Emerging Markets Equity Funds had not commenced
operations as of May 31, 1997.
SEI Investments Distribution Co. (The "Distributor")
serves as each Fund's distributor pursuant to a
distribution agreement (the "Distribution Agreement") with
the Trust. No compensation is paid to the Distributor under
the Distribution Agreement for distribution services for
the shares of any Fund.
The Fund may execute brokerage or other agency
transactions through the Distributor, for which the
Distributor may receive compensation.
The Distributor may, from time to time and at its own
expense, provide promotional incentives, in the form of
cash or other compensation, to certain financial
institutions whose representatives have sold or are
expected to sell significant amounts of the Funds' shares.
7
<PAGE>
THE MONEY MANAGERS ____________________________________________________________
The assets of each Fund will be allocated among the Money
Managers listed below. However, SIMC may change the
allocation of a Fund's assets among Money Managers at any
time.
The following table sets forth information about the
Money Managers selected for the Funds by the Boards of
Trustees (as of September 30, 1997).
<TABLE>
<CAPTION>
FUND MONEY MANAGERS
<S> <C>
- ---------------------------------------------------------------------------------------
Large Cap Alliance Capital Management L.P.
American Express Asset Management Group Inc.
LSV Asset Management
Mellon Equity Associates
Pacific Alliance Capital Management
Provident Investment Counsel, Inc.
- ---------------------------------------------------------------------------------------
Small Cap 1838 Investment Advisors, L.P.
Boston Partners Asset Management, L.P.
First of America Investment Corporation
Furman Selz Capital Management LLC
LSV Asset Management
Nicholas-Applegate Capital Management
Wall Street Associates
- ---------------------------------------------------------------------------------------
International Equity Acadian Asset Management, Inc.
Farrell Wako Global Investment Management, Inc.
Lazard London International Investment Management Limited
Seligman Henderson Co.
Yamaichi Capital Management, Inc. and Yamaichi Capital
Management (Singapore) Limited
- ---------------------------------------------------------------------------------------
Emerging Markets Equity Coronation Asset Management (Proprietary) Limited
Montgomery Asset Management, LLC
Parametric Portfolio Associates
Yamaichi Capital Management, Inc. and Yamaichi Capital
Management (Singapore) Limited
- ---------------------------------------------------------------------------------------
Core Fixed Income BlackRock Financial Management, Inc
Firstar Investment Research & Management Company, LLC
Western Asset Management Company
- ---------------------------------------------------------------------------------------
High Yield Bond BEA Associates
- ---------------------------------------------------------------------------------------
International Fixed Strategic Fixed Income, L.P.
Income
- ---------------------------------------------------------------------------------------
</TABLE>
8
<PAGE>
1838 INVESTMENT ADVISORS, L.P.
1838 Investment Advisors, L.P. ("1838") serves as a Money
Manager for a portion of the assets of the Small Cap Fund.
As of June 30, 1997, 1838 managed $5.2 billion in assets,
in large and small capitalization equity, fixed income and
balanced account funds. Clients include corporate employee
benefit plans, municipalities, endowments, foundations,
jointly trusteed plans, insurance companies and wealthy
individuals. The principal address of 1838 is 100
Matsonford Road, Suite 320, Radnor, Pennsylvania 19087.
Edwin B. Powell and Cynthia R. Axelrod are the fund
managers for the portion of the Small Cap Fund's assets
allocated to 1838. These individuals work as a team and
share responsibility. Mr. Powell managed small cap equity
funds for Provident Capital Management from 1987 to 1994.
Prior to joining 1838 in 1995, Ms. Axelrod was with Friess
Associates from 1992 to 1995. Prior to that, she was with
Provident Capital Management from 1987 to 1992.
ACADIAN ASSET MANAGEMENT, INC.
Acadian Asset Management, Inc. ("Acadian") serves as a
Money Manager for a portion of the assets of the
International Equity Fund. Acadian, a wholly-owned
subsidiary of United Asset Management Corporation ("UAM"),
was founded in 1977, and manages approximately $4.25
billion in assets invested globally as of May 31, 1997. The
principal address of Acadian is Two International Place,
26th floor, Boston, Massachusetts 02110.
A committee of investment professionals at Acadian is
responsible for managing the portion of the International
Equity Fund's assets allocated to Acadian.
ALLIANCE CAPITAL MANAGEMENT L.P.
Alliance Capital Management L.P. ("Alliance") serves as a
Money Manager for a portion of the assets of the Large Cap
Fund. Alliance is a registered investment adviser organized
as a Delaware limited partnership, which originated as
Alliance Capital Management Corporation in 1971. Alliance
Capital Management Corporation, an indirect wholly-owned
subsidiary of The Equitable Life Assurance Society of the
United States, is the general partner of Alliance. As of
March 31, 1997, Alliance managed over $180 billion in
assets. The principal address of Alliance is 1345 Avenue of
the Americas, New York, New York 10105.
A committee of investment professionals at Alliance
manages the portion of the Large Cap Fund's assets
allocated to Alliance.
AMERICAN EXPRESS ASSET MANAGEMENT GROUP INC.
American Express Asset Management Group Inc. (formerly,
"IDS Advisory Group Inc.") serves as a Money Manager for a
portion of the assets of the Large Cap Fund. American
Express Asset Management Group Inc. ("AEAMG") is a
registered investment adviser and wholly-owned subsidiary
of American Express Financial Corporation. As of May 31,
1997, AEAMG managed over $35 billion in assets with $8
billion of this total in large capitalization growth
domestic equities. AEAMG was founded in 1972 to manage tax-
exempt assets for institutional clients. The principal
business address of AEAMG is IDS Tower 10, Minneapolis,
Minnesota 55440.
9
<PAGE>
A committee composed of five investment fund managers
of the equity investment team has managed the portion of
the Large Cap Fund's assets allocated to AEAMG since the
Fund's inception. No individual person is primarily
responsible for making recommendations to that committee.
BEA ASSOCIATES
BEA Associates ("BEA") serves as the Money Manager for the
High Yield Bond Fund. BEA is a general partnership
organized under the laws of the State of New York and,
together with its predecessor firms, has been engaged in
the investment advisory business for more than 50 years.
BEA is a wholly-owned subsidiary of Credit Suisse, the
second largest Swiss bank, which, in turn, is a subsidiary
of CS Holding, a Swiss corporation. BEA is registered as an
investment adviser under the Investment Advisers Act of
1940.
BEA is a diversified asset manager, handling global
equity, balanced, fixed income and derivative securities
accounts for private individuals, as well as corporate
pension and profit-sharing plans, state pension funds,
union funds, endowments and other charitable institutions.
As of June 30, 1997, BEA managed approximately $32 billion
in assets. BEA's principal business address is One Citicorp
Center, 153 East 53rd Street, New York, New York 10022.
The High Yield Bond Fund's assets are managed by
Richard J. Lindquist, C.F.A. Mr. Lindquist joined BEA in
1995 as a result of BEA's acquisition of CS First Boston
Investment Management, and has had 14 years of investment
management experience, all 14 years of experience working
with high yield bonds. Prior to joining CS First Boston,
Mr. Lindquist was with Prudential Insurance Company of
America where he managed high yield funds totalling
approximately $1.3 billion. Prior to Prudential, Mr.
Lindquist was managing high yield funds at T. Rowe Price.
In 1988 and 1993, Mr. Lindquist received the Lipper
Analytical Services Award for best performing fixed income
mutual fund.
BLACKROCK FINANCIAL MANAGEMENT, INC.
BlackRock Financial Management, Inc. ("BlackRock") serves
as a Money Manager for a portion of the assets of the Core
Fixed Income Fund. BlackRock, a registered investment
adviser, is a Delaware corporation with its principal
business address at 345 Park Avenue, 30th Floor, New York,
New York 10154. BlackRock's predecessor was founded in
1988, and as of August 31, 1997, BlackRock had $51 billion
in assets under management. BlackRock is wholly-owned by
PNC Asset Management Group, Inc., a wholly-owned subsidiary
of PNC Bank, N.A. PNC Bank, N.A.'s ultimate parent is PNC
Bank Corp., One PNC Plaza, Pittsburgh, Pennsylvania 15265.
BlackRock provides investment advice to investment
companies, trusts, charitable organizations, pension and
profit sharing plans and government entities.
BlackRock employs a team approach in managing the
Fund assets allocated to BlackRock; however, the fund
manager who has day-to-day responsibility for the portion
of the Core Fixed Income Fund's assets allocated to
BlackRock is Keith Anderson. Mr. Anderson is a Managing
Director and Co-Head of Portfolio Management at BlackRock,
and has 13 years experience investing in fixed income
securities. Prior to the founding of
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BlackRock in 1988, Mr. Anderson was a Vice President in
Fixed Income Research at The First Boston Corporation.
BOSTON PARTNERS ASSET MANAGEMENT, L.P.
Boston Partners Asset Management, L.P. ("BPAM") serves as a
Money Manager for a portion of the assets of the Small Cap
Fund. BPAM, a Delaware limited partnership, is a registered
investment adviser, and its general partner is Boston
Partners, Inc. BPAM was founded in April, 1995, and as of
June 30, 1997, it had approximately $10.5 billion in assets
under management. BPAM's clients include corporations,
endowments, foundations, pension and profit sharing plans,
and investment companies. The principal business address of
BPAM is One Financial Center, 43rd Floor, Boston,
Massachusetts 02111.
The portion of the Small Cap Fund's assets allocated
to BPAM is managed by Wayne J. Archambo, C.F.A. Mr.
Archambo has been employed by BPAM since its organization,
and has more than 14 years experience investing in
equities. Prior to joining BPAM, Mr. Archambo was employed
at The Boston Company Asset Management, Inc. ("TBCAM") from
1989 through April, 1995. Mr. Archambo created TBCAM's
small cap value product in 1992. Prior to joining TBCAM in
1989, Mr. Archambo spent six years as a fund
manager/analyst for Boston-based Systematic Investors.
CORONATION ASSET MANAGEMENT (PROPRIETARY) LIMITED
Coronation Asset Management (Proprietary) Limited
("Coronation") serves as a Money Manager for a portion of
the assets of the Emerging Markets Equity Fund. Coronation,
a registered investment adviser organized under the laws of
the Republic of South Africa, was founded in 1993, and as
of July 31, 1997, managed $4.2 billion in assets. The
principal business address of Coronation is 80 Strand
Street, Cape Town, South Africa, 8001.
Investment decisions for Coronation's portion of the
Fund are made by Anthony Gibson and Louis Stassen. Prior to
joining Coronation in 1993, Mr. Gibson, the head of
Coronation's Investment Committee, and Mr. Stassen, the
head of Coronation's research department, worked at Syfrets
Managed Assets for seven years and one year, respectively.
Prior to joining Syfrets Managed Assets, Mr. Stassen worked
as an Investment Analyst for Allan Gray Investment Counsel.
FARRELL WAKO GLOBAL INVESTMENT MANAGEMENT, INC.
Farrell Wako Global Investment Management, Inc. ("Farrell
Wako") serves as a Money Manager for a portion of the
assets of the International Equity Fund. Farrell Wako, a
Delaware corporation and a wholly-owned subsidiary of Wako
Securities, was founded in 1991 and is a registered
investment advisor in the U.S. and Japan. Farrell Wako
currently manages over $381 million. The principal address
of Farrell Wako is 780 Third Avenue, New York, New York
10017.
James L. Farrell, the chairman of Farrell Wako,
manages its portion of the assets of the International
Equity Fund. Mr. Farrell has 32 years of experience in
investment management and applied financial research and
was responsible for management of over
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<PAGE>
$1 billion in equity assets as Chairman of MPT Associates
prior to his association with Farrell Wako.
FIRST OF AMERICA INVESTMENT CORPORATION
First of America Investment Corporation ("First America")
serves as a Money Manager for a portion of the assets of
the Small Cap Fund. First America is a Michigan Corporation
that is a wholly-owned subsidiary of First America Bank --
Michigan, N.A., a national banking association, which is in
turn a wholly-owned subsidiary of First America Bank
Corporation, a registered bank holding company. First
America is registered as an investment adviser under the
Investment Advisers Act of 1940. First America, together
with its predecessor, has been engaged in the investment
advisory business since 1932. First America's principal
business address is 303 North Rose Street, Suite 500,
Kalamazoo, Michigan 49007.
As of June 30, 1997, First America had approximately
$15.7 billion in assets under management. First America's
clients include mutual funds, trust funds, and individually
managed institutional and individual accounts.
Mr. Roger Stamper, CFA, has primary responsibility
for First America's portion of the Small Cap Fund. Mr.
Stamper is a Managing Director of First America and has
been with First America since 1988.
FIRSTAR INVESTMENT RESEARCH & MANAGEMENT COMPANY, LLC
Firstar Investment Research & Management Company, LLC
("FIRMCO") serves as a Money Manager for a portion of the
assets of the Core Fixed Income Fund. FIRMCO is a
registered investment adviser with its principal business
address at 777 East Wisconsin Avenue, Suite 800, Milwaukee,
Wisconsin 53202. As of June 30, 1997, it had approximately
$20.9 billion in assets under management. FIRMCO is a
wholly-owned subsidiary of Firstar Corporation, a bank
holding company located at 777 East Wisconsin Avenue,
Milwaukee, Wisconsin 53202. FIRMCO's clients include
pension and profit sharing plans, trusts and estates and
one other investment company.
Mr. Charles Groeschell, a Senior Vice President of
FIRMCO, has been employed by FIRMCO or its affiliates since
1983, and has 15 years experience in fixed income
investment management. Mr. Groeschell manages the portion
of the Core Fixed Income Fund's assets that is allocated to
FIRMCO.
FURMAN SELZ CAPITAL MANAGEMENT LLC
Furman Selz Capital Management LLC ("Furman Selz") serves
as a Money Manager for a portion of the assets of the Small
Cap Fund. Furman Selz, a Delaware limited liability company
whose predecessor was formed in 1977, is a registered
investment adviser that managed approximately $8.3 billion
in assets as of March 31, 1997. The ultimate parent of
Furman Selz is ING Groep N.V. Furman Selz's principal
business address is 230 Park Avenue, New York, NY 10169.
Matthew S. Price and David C. Campbell, Managing
Directors/Portfolio Managers, have been with Furman Selz
for over 5 and 7 years, respectively, and are primarily
responsible for the day-to-day management and investment
decisions made with respect to the assets of the Fund.
Prior to joining Furman Selz, Mr. Price and Mr. Campbell
were Senior Portfolio Managers at Value Line Asset
Management.
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<PAGE>
LAZARD LONDON INTERNATIONAL INVESTMENT MANAGEMENT
LIMITED
Lazard London International Investment Management Limited
("Lazard") serves as a Money Manager for a portion of the
assets of the International Equity Fund. Lazard is a
registered investment adviser with its principal business
address at 21 Moorfields, London, England EC2P 2HT. Lazard,
which was founded in 1980, offers international investment
services. Lazard and its asset management affiliates manage
domestic and international funds for institutions and
private clients, including insurance funds, pension funds,
charities and mutual funds. As of June 30, 1997, Lazard and
its asset management affiliates had approximately $60.4
billion in assets under management.
Within the European equity team, Mr. Dino Fuschillo,
Director of Lazard, has primary responsibility for the
day-to-day management of the portion of the Fund's assets
managed by Lazard. Mr. Fuschillo joined Lazard in 1989, and
has specialized in European equity management ever since.
LSV ASSET MANAGEMENT
LSV Asset Management ("LSV") serves as a Money Manager for
a portion of the assets of the Large Cap and Small Cap
Funds. LSV is a registered investment adviser organized as
a Delaware general partnership, in which an affiliate of
SIMC owns a majority interest. The general partners
developed a quantitative value investment philosophy that
has been used to manage assets over the past 6 years. The
investment process has been implemented for a number of
institutional clients with aggregate assets invested of
approximately $955 million. The principal business address
of LSV is 181 W. Madison Avenue, Chicago, Illinois 60602.
Josef Lakonishok, Andrei Shleifer and Robert Vishny,
officers of LSV, manage the Funds on an ongoing basis and
make adjustments to the model based on their research and
statistical analysis. Through their investment process, LSV
identifies buy and sell candidates subject to specific
tolerances and constraints.
SIMC pays LSV a fee, which is calculated and paid
monthly, based on an annual rate of .20% of the average
monthly value of the assets of the Large Cap and .50% of
the average monthly value of the assets of the Small Cap
Fund managed by LSV.
MELLON EQUITY ASSOCIATES
Mellon Equity Associates ("Mellon Equity") serves as a
Money Manager for a portion of the assets of the Large Cap
Fund. Mellon Equity is a Pennsylvania business trust
founded in 1987, whose beneficial owners are Mellon Bank,
N.A. and MMIP, Inc. Mellon Equity is a professional
investment counseling firm that provides investment
management services to the equity and balanced pension,
public fund and profit-sharing investment management
markets, and is an investment adviser registered under the
Investment Advisers Act of 1940, as amended. As of June 30,
1997, Mellon Equity had discretionary management authority
with respect to approximately $14.4 billion of assets.
Mellon Equity's predecessor organization had managed
domestic equity tax-exempt institutional accounts since
1947. The principal business address for Mellon Equity is
500 Grant Street, Suite 3700, Pittsburgh, Pennsylvania
15258.
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<PAGE>
William P. Rydell and Robert A. Wilk manage the Large
Cap Fund's assets allocated to Mellon Equity. Mr. Rydell is
the President and Chief Executive Officer of Mellon Equity,
and has been managing individual and collective portfolios
at Mellon Equity since 1982. Mr. Wilk is a Senior Vice
President and Portfolio Manager of Mellon Equity, and has
been involved with securities analysis, quantitative
research, asset allocation, trading and client services at
Mellon Equity since April 1990. Prior to joining Mellon
Equity, Mr. Wilk was in charge of portfolio management and
conducted quantitative research for another investment
subsidiary of Mellon Bank Corporation, Triangle Portfolio
Associates.
MONTGOMERY ASSET MANAGEMENT, LLC
Montgomery Asset Management, LLC ("MAM") serves as a Money
Manager for a portion of the assets of the Emerging Markets
Equity Fund. MAM is a subsidiary of Commerzbank AG, a
German financial institution. As of July 31, 1997, MAM had
approximately $9.5 billion in assets under management. MAM
has been providing investment management services for over
seven years. The principal address of MAM is 101 California
Street, San Francisco, California 94111.
Josephine S. Jimenez and Bryan L. Sudweeks share
primary responsibility for the Emerging Markets Equity
Fund's assets allocated to MAM. Ms. Jimenez has sixteen
years experience in emerging markets investment and Dr.
Sudweeks has eleven years experience in emerging markets
investment. Both joined MAM in 1991.
NICHOLAS-APPLEGATE CAPITAL MANAGEMENT, INC.
Nicholas-Applegate Capital Management, Inc.
("Nicholas-Applegate") serves as a Money Manager for a
portion of the assets of the Small Cap Fund.
Nicholas-Applegate has operated as an investment adviser
which provides investment services to numerous clients,
including employee benefit plans, public retirement systems
and unions, university endowments, foundations, investment
companies, other institutional investors and individuals.
As of June 30, 1997, Nicholas-Applegate had discretionary
management authority with respect to approximately $30.3
billion of assets. The principal business address of
Nicholas-Applegate is 600 West Broadway, 29th Floor, San
Diego, California 92101. Nicholas-Applegate, pursuant to a
partnership agreement, is controlled by its general
partner, Nicholas-Applegate Capital Management Holdings,
L.P. a California Limited Partnership controlled by Arthur
E. Nicholas.
Nicholas-Applegate manages its portion of the Small
Cap Fund's assets through its systematic-driven management
team under the general supervision of Mr. Nicholas, founder
and Chief Investment Officer of the firm.
Nicholas-Applegate's investment team, headed by Lawrence S.
Speidell, is primarily responsible for the day-to-day
management of the Fund's assets allocated to
Nicholas-Applegate. Mr. Speidell has been a fund manager
and investment team leader with Nicholas-Applegate since
March, 1994. Prior to joining Nicholas-Applegate, he was an
institutional portfolio manager with Batterymarch Financial
Management.
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<PAGE>
PACIFIC ALLIANCE CAPITAL MANAGEMENT
Pacific Alliance Capital Management ("Pacific") serves as a
Money Manager for a portion of the assets of the Large Cap
Fund. Pacific is a division of Union Bank of California,
N.A. and provides equity and fixed-income management
services for corporate pension plans, endowments,
foundations, Taft-Hartley Plans, public agencies and
individuals. Union Bank of California, N.A., is a
wholly-owned subsidiary of the Bank of Tokyo-Mitsubishi
Limited. As of June 30, 1997, Pacific had discretionary
management authority with respect to approximately $14.7
billion of assets. The principal address of Pacific is 475
Sansome Street, San Francisco, California 94111.
A committee of investment professionals at Pacific
manages the Large Cap Fund's assets allocated to Pacific.
PARAMETRIC PORTFOLIO ASSOCIATES
Parametric Portfolio Associates ("Parametric") serves as a
Money Manager for a portion of the assets of the Emerging
Markets Equity Fund. Parametric is a general partnership
whose general partners are PIMCO Advisors L.P. ("PIMCO"),
the supervisory general partner, and Parametric Management,
Inc., the managing general partner (a wholly-owned
subsidiary of PIMCO). Parametric's predecessor was founded
in 1987, and as of July 31, 1997, Parametric managed
approximately $2.4 billion in client assets. Parametric's
business address is 701 Fifth Avenue, Suite 7310, Seattle,
WA 98104. PIMCO's address is 800 Newport Center Drive,
Newport Beach, California 92660.
Clifford Quisenberry, CFA, Senior Investment Manager
and Research Manager, is responsible for managing the
portion of the Fund's assets allocated to Parametric. Prior
to joining Parametric, Mr. Quisenberry was a Portfolio
Manager with Cutler & Company.
PROVIDENT INVESTMENT COUNSEL, INC.
Provident Investment Counsel, Inc. ("Provident") serves as
a Money Manager for a portion of the assets of the Large
Cap Fund. Provident is a registered investment adviser with
its principal business address at 300 North Lake Avenue,
Pasadena, California 91101, which, through its
predecessors, has been in business since 1951, a
wholly-owned subsidiary of United Asset Management ("UAM"),
a publicly traded investment adviser holding company. UAM
is headquartered at One International Place, Boston,
Massachusetts 02110. Provident provides investment advice
to corporations, public entities, foundations and labor
unions, as well as to other investment companies. As of
June 30, 1997, Provident had over $20.4 billion in client
assets under management.
A team consisting of the senior investment
professionals is responsible for the development of
investment policy and strategy. The implementation of these
decisions for the portion of the Large Cap Fund's assets
allocated to Provident is the responsibility of Lauro
Guerra, Managing Director, and Jeffrey J. Miller, Managing
Director. Mr. Guerra has been with Provident since 1983 and
Mr. Miller has been with the firm since 1972.
SELIGMAN HENDERSON CO.
Seligman Henderson Co. serves as a Money Manager for a
portion of the assets of the International Equity Fund.
Seligman Henderson Co. is a New York general partnership
and is structured as an equal partnership between J.&W.
Seligman & Co. Incorporated and
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<PAGE>
Henderson International Inc., a controlled affiliate of
Henderson plc. Seligman Henderson Co. was established in
1991 and manages over $4.0 billion in global and
international equity portfolios for U.S. institutional and
retail clients. The principal address of Seligman Henderson
Co. is 100 Park Avenue, New York, New York 10017.
Mr. William Garnett is primarily responsible for the
day-to-day management and investment decisions with respect
to the International Equity Funds' assets allocated to
Seligman. Mr. Garnett has more than 11 years' experience in
managing Japanese small cap equity securities. Mr. Iain
Clark, Seligman Henderson Co.'s chief investment officer,
has ultimate responsibility for portfolio management. Mr.
Clark has more than 25 years experience, including 12 with
Henderson plc.
STRATEGIC FIXED INCOME, L.P.
Strategic Fixed Income, L.P. ("SFI") serves as the Money
Manager for the International Fixed Income Fund. SFI is a
limited partnership between Gobi Investment, Inc. and
Strategic Investment Management ("SIM"), the limited
partner, an Arlington, Virginia-based investment manager.
Gobi Investment, Inc. is the general partner, of which Mr.
Kenneth Windheim is the sole shareholder and is the
president and chief investment officer of the firm. As of
July 31, 1997, SFI had approximately $5.7 billion of client
assets under management. The principal address of SFI is
1001 Nineteenth Street North, Suite 1720, Arlington,
Virginia 22209.
Kenneth Windheim, President of SFI, is the portfolio
manager of the International Fixed Income Fund. Mr.
Windheim is assisted by Gregory Barnett and David Jallits,
Directors of SFI. Prior to forming SFI, Kenneth Windheim
managed global fixed income portfolios at Prudential Asset
Management. Prior to joining SFI, Gregory Barnett was
portfolio manager for the Pilgrim Multi-Market Income Fund
with active use of foreign exchange option strategies.
Prior to that, he was vice president and senior fixed
income portfolio manager at Lexington Management. Prior to
joining SFI, David Jallits was senior Portfolio Manager for
a hedge fund at Teton Partners. From 1982 to 1994, he was
Vice President and Global Fixed Income Portfolio Manager at
The Putnam Companies.
WALL STREET ASSOCIATES
Wall Street Associates ("WSA") serves as a Money Manager
for a portion of the assets of the Small Cap Fund. WSA was
founded in 1987, and as of July 31, 1997, had approximately
$1.2 billion in assets under management. WSA provides
investment advisory services for institutional clients, an
investment partnership for which it serves as general
partner, a group trust, for which it serves as sole
investment manager, and an offshore fund for foreign
investors for which it serves as the sole investment
manager. The principal business address of WSA is at 1200
Prospect Street, Suite 100, La Jolla, California 92037.
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<PAGE>
William Jeffery III, Kenneth F. McCain, and Richard
S. Coons, each of whom owns 1/3 of WSA, serve as fund
managers for the portion of the Small Cap Fund's assets
allocated to WSA. Each is a principal of WSA and they have
an average of 27 years of investment management experience.
WESTERN ASSET MANAGEMENT COMPANY
Western Asset Management Company ("Western") serves as a
Money Manager for a portion of the assets of the Core Fixed
Income Fund. Western is a wholly-owned subsidiary of Legg
Mason, Inc., a financial services company located in
Baltimore, Maryland. Western was founded in 1971 and
specializes in the management of fixed income funds. As of
June 30, 1997, Western managed approximately $29.6 billion
in client assets, including $4.4 billion of investment
company assets. The principal business address of Western
is 117 East Colorado Boulevard, Pasadena, California 91105.
Kent S. Engel, Director and Chief Investment Officer
of Western, is primarily responsible for the day-to-day
management of the portion of the Core Fixed Fund's assets
allocated to Western. Mr. Engel has been with Western and
its predecessor since 1969.
YAMAICHI CAPITAL MANAGEMENT, INC. AND YAMAICHI CAPITAL MANAGEMENT (SINGAPORE)
LIMITED
Yamaichi Capital Management, Inc. ("Yamaichi") and Yamaichi
Capital Management (Singapore) Limited ("YCMS") jointly
serve as Money Manager for a portion of the assets of the
International Equity and Emerging Markets Equity Funds.
Yamaichi is a New York Corporation established in 1981 and
YCMS is a Singapore corporation established in 1979, and
each is a wholly-owned subsidiary of Yamaichi International
Capital Management Co., Ltd. ("YICM"). Yamaichi, YCMS and
YICM are controlled by Yamaichi Securities Co., Ltd., which
is located in Tokyo, Japan. YCMS and its affiliates manage
approximately $24 billion worldwide. The principal address
of Yamaichi is 2 World Trade Center, Suite 9828, New York,
New York 10048. The principal address of YCMS is 138
Robinson Road, #13-01/05, Hong Leong Centre, Singapore
068906.
Mr. Marco Wong leads the management team for the
assets of the International Equity and Emerging Markets
Equity Funds allocated to Yamaichi and YCMS. Mr. Wong has
been with YCMS since 1986.
INVESTMENT OBJECTIVES
AND POLICIES
___________________________________________________________________________
Each Fund's investment objective and policies are set forth
below. See "General Investment Policies and Risk Factors"
for information about additional investment practices that
some or all of the Funds may employ.
LARGE CAP FUND
The investment objective of the Large Cap Fund is long-term
growth of capital and income.
Under normal market conditions, the Fund will invest
at least 65% of its total assets in equity securities of
large companies (i.e., companies with market
capitalizations
17
<PAGE>
of more than $1 billion at the time of purchase). Any
remaining assets may be invested in investment grade fixed
income securities, including variable and floating rate
securities, or in equity securities of smaller companies
that the Fund's Money Managers believe are appropriate in
light of the Fund's objective. The Fund may also purchase
illiquid securities, shares of other investment companies,
when-issued and delayed-delivery securities and zero coupon
obligations. The Fund may also borrow money and lend its
securities to qualified borrowers.
SMALL CAP FUND
The investment objective of the Small Cap Fund is capital
appreciation.
Under normal market conditions, the Fund will invest
at least 65% of its total assets in the equity securities
of smaller companies (i.e., companies with market
capitalizations of less than $1 billion at the time of
purchase). Any remaining assets may be invested in
investment grade fixed income securities, including
variable and floating rate securities, or in equity
securities of larger companies that the Fund's Money
Managers believe are appropriate in light of the Fund's
objective. The Fund may also purchase illiquid securities,
shares of other investment companies, when-issued and
delayed-delivery securities and zero coupon obligations.
The Fund may also borrow money and lend its securities to
qualified borrowers.
CORE FIXED INCOME FUND
The investment objective of the Core Fixed Income Fund is
current income consistent with the preservation of capital.
Under normal market conditions, the Fund will invest
at least 65% of its total assets in investment grade fixed
income securities.
The Fund may acquire all types of fixed income
securities issued by domestic and foreign private and
governmental issuers, including mortgage-backed and
asset-backed securities and variable and floating rate
securities. The Fund may invest not only in traditional
fixed income securities, such as bonds and debentures, but
in structured securities that make interest and principal
payments based upon the performance of specified assets or
indices. Structured securities include mortgage-backed
securities such as pass-through certificates,
collateralized mortgage obligations and interest and
principal only components of mortgage-backed securities.
The Fund may also invest in mortgage dollar roll
transactions, Yankee obligations, illiquid securities,
shares of other investment companies, obligations of
supranational agencies, warrants, when-issued and delayed-
delivery securities and zero coupon obligations. The Fund
may also borrow money and lend its securities to qualified
borrowers.
The Core Fixed Income Fund invests in a portfolio
with a dollar-weighted average duration that will, under
normal market conditions, stay within plus or minus 20% of
what the Money Managers believe to be the average duration
of the domestic bond market as a whole. The Money Managers
base their analysis of the average duration of the domestic
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<PAGE>
bond market on bond market indices which they believe to be
representative. The Money Managers currently use the Lehman
Aggregate Bond Index for this purpose.
HIGH YIELD BOND FUND
The investment objective of the High Yield Bond Fund is to
maximize total return.
Under normal market conditions, the Fund will invest
at least 65% of its total assets in fixed income securities
that are below investment grade, i.e., rated below the top
four rating categories by a NRSRO at the time of purchase,
or, if not rated, determined to be of comparable quality by
the Fund's Money Manager. Below investment grade securities
are commonly referred to as "junk bonds," and generally
entail increased credit and market risk. See "Lower Rated
Securities" in "General Investment Policies and Risk
Factors." The achievement of the Fund's investment
objective may be more dependent on the Money Manager's own
credit analysis than would be the case if the Fund invested
in higher rated securities. There is no bottom limit on the
ratings of high yield securities that may be purchased and
held by the Fund. These securities may have predominantly
speculative characteristics or may be in default. Any
remaining assets may be invested in equity, investment
grade fixed income and money market securities that the
Money Manager believes are appropriate in light of the
Fund's objective.
The Fund may acquire all types of fixed income
securities issued by domestic and foreign private and
governmental issuers, including mortgage-backed and
asset-backed securities, and variable and floating rate
securities. The Fund may also invest in Yankee obligations,
illiquid securities, shares of other investment companies,
warrants, when-issued and delayed-delivery securities, zero
coupon obligations, pay-in-kind and deferred payment
securities. The Fund may also borrow money, enter into
forward foreign currency contracts, and lend its securities
to qualified buyers. The Fund's Money Manager may vary the
average maturity of the securities in the Fund without
limit, and there is no restriction on the maturity of any
individual security.
The Fund's Money Manager will consider ratings, but
it will perform its own analyses and will not rely
principally on ratings. The Fund's Money Manager will
consider, among other things, the price of the security and
the financial history and condition, the prospects and the
management of an issuer in selecting securities for the
Fund.
INTERNATIONAL FIXED INCOME FUND
The International Fixed Income Fund seeks to provide
capital appreciation and current income.
Under normal market conditions, the Fund will invest
in at least 65% of its total assets in investment grade
fixed income securities of issuers located in at least
three countries other than the United States.
The International Fixed Income Fund may invest its
remaining assets in obligations issued or guaranteed as to
principal and interest by the United States Government, its
agencies or instrumentalities ("U.S. Government
securities") and preferred stocks of U.S. and foreign
issuers. The Fund also may engage in short selling against
the box. The Fund may also invest in securities of
companies located in and governments of emerging market
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<PAGE>
countries, as defined below. Investments in emerging
markets countries will not exceed 5% of the Fund's total
assets at the time of purchase. Such investments entail
different risks than investments in securities of companies
and governments of more developed, stable nations.
The Fund may acquire all types of fixed income
securities issued by foreign private and governmental
issuers, including mortgage-backed and asset-backed
securities, and variable and floating rate securities. The
Fund may invest in traditional fixed income securities such
as bonds and debentures, and in structured securities that
derive interest and principal payments from specified
assets or indices. All such investments will be in
investment grade securities denominated in various
currencies, including the European Currency Unit. The Fund
may also invest in illiquid securities, shares of other
investment companies, obligations of supranational
entities, warrants, when-issued and delayed-delivery
securities and zero coupon obligations. The Fund may also
borrow money, enter into forward foreign currency
transactions and swap contracts and lend its securities to
qualified buyers.
There are no restrictions on the average maturity of
the Fund or the maturity of any single instrument.
Maturities may vary widely depending on the Fund's Money
Managers' assessment of interest rate trends and other
economic and market factors.
The Fund is a non-diversified fund. Investment in a
non-diversified company may entail greater risk than
investment in a diversified company. The Fund's ability to
focus its investments on a fewer number of issuers means
that economic, political or regulatory developments
affecting the Fund's investment securities could have a
greater impact on the total value of the Fund than would be
the case if the Fund were diversified among more issuers.
The Fund intends to comply with the diversification
requirements of Subchapter M of the Internal Revenue Code
of 1986, as amended (the "Code"). See "Taxes" for
additional information.
The Emerging Markets Equity Fund seeks to provide capital
appreciation.
Under normal market conditions, the Fund will invest
at least 65% of its total assets in the equity securities
of emerging market issuers. The Fund defines an emerging
market country as any country the economy and market of
which the World Bank or the United Nations considers to be
emerging or developing. The Fund's Money Manager considers
emerging market issuers to include companies the securities
of which are principally traded in the capital markets of
emerging market countries; that derive at least 50% of
their total revenue from either goods produced or services
rendered in emerging market countries, regardless of where
the securities of such companies are principally traded; or
that are organized under the laws of and have a principal
office in an emerging market country. Under normal market
conditions, the Fund maintains investments in at least six
emerging market countries and does not invest more than 35%
of its total assets in any one country.
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EMERGING MARKETS EQUITY FUND
The Fund may invest any remaining assets in
investment grade fixed income securities, including
variable and floating rate securities, of emerging market
governments and companies, and may invest up to 5% of its
total assets in securities that are rated below investment
grade. Certain securities issued by governments of emerging
market countries are or may be eligible for conversion into
investments in emerging market companies under debt
conversion programs sponsored by such governments. Bonds
rated below investment grade are often referred to as "junk
bonds." Such securities involve greater risk of default or
price volatility than investment grade securities. See
"Lower Rated Securities" in "General Investment Policies
and Risk Factors."
When in the Fund's Money Manager's opinion there is
an insufficient supply of suitable securities from emerging
market issuers, the Fund may invest up to 20% of its total
assets in the equity securities of non-emerging market
companies contained in the Morgan Stanley Capital
International Europe, Australia and Far East Index (the
"EAFE Index"). These companies typically have larger
average market capitalizations than the emerging market
companies in which the Fund generally invests.
Securities of non-U.S. issuers purchased by the Fund
may be purchased on exchanges in foreign markets, on U.S.
registered exchanges or the domestic or foreign
over-the-counter markets, and may be purchased in initial
public offerings. The Fund may also purchase illiquid
securities, including "special situation" securities,
shares of other investment companies, obligations of
supranational entities, when-issued and delayed-delivery
securities and zero coupon obligations. The Fund may also
borrow money, enter into forward foreign currency
transactions and swap contracts and lend its securities to
qualified buyers.
INTERNATIONAL EQUITY FUND
The International Equity Fund seeks to provide capital
appreciation.
Under normal market conditions, the Fund will invest
at least 65% of its total assets in the equity securities
of non-U.S. issuers located in at least three different
countries. Any remaining assets will be invested in U.S. or
non-U.S. cash reserves and money market instruments, as
well as variable and floating rate securities. The Fund may
also purchase illiquid securities, shares of other
investment companies, obligations of supranational
entities, when-issued and delayed-delivery securities and
zero coupon obligations. The Fund may also borrow money,
enter into forward foreign currency and swap contracts and
lend its securities to qualified buyers.
Securities of non-U.S. issuers purchased by the Fund
may be purchased on exchanges in foreign markets, on U.S.
registered exchanges or the domestic or foreign
over-the-counter markets.
There can be no assurance that the Funds will achieve
their respective investment objectives.
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GENERAL INVESTMENT
POLICIES AND RISK
FACTORS
____________________________________________________________________________
EQUITY SECURITIES
Equity securities represent ownership interests in a
company or corporation and include common stock, preferred
stock and warrants and other rights to acquire such
instruments and convertible securities. Equity securities
also include structured securities whose risk and return
characteristics are similar to those of traditional equity
securities. Changes in the value of portfolio securities
will not necessarily affect cash income derived from these
securities, but will affect a Fund's net asset value.
FIXED INCOME SECURITIES
Fixed income securities consist primarily of debt
obligations issued by governments, corporations,
municipalities and other borrowers, but may also include
structured securities that provide for participation
interests in debt obligations. The market value of fixed
income investments will generally change in response to
interest rate changes and other factors. During periods of
falling interest rates, the values of outstanding fixed
income securities generally rise. Conversely, during
periods of rising interest rates, the values of such
securities generally decline. Moreover, while securities
with longer maturities tend to produce higher yields, the
prices of longer maturity securities are also subject to
greater market fluctuations as a result of changes in
interest rates. Changes by recognized agencies in the
rating of any fixed income security and in the ability of
an issuer to make payments of interest and principal also
affect the value of these investments. Changes in the value
of these securities will not affect cash income derived
from these securities, but will affect a Fund's net asset
value.
Fixed income securities are considered investment
grade if they are rated in one of the four highest rating
categories by a nationally recognized statistical rating
organization ("NRSRO"), or, if not rated, are determined to
be of comparable quality by the Fund's Money Managers. The
"Appendix" to this Prospectus sets forth a description of
the bond rating categories of several NRSROs. Ratings of
each NRSRO represents its opinion of the safety of
principal and interest payments (and not the market risk)
of bonds and other fixed income securities it undertakes to
rate at the time of issuance. Ratings are not absolute
standards of quality and may not reflect changes in an
issuer's creditworthiness.
Fixed income securities rated BBB or Baa lack
outstanding investment characteristics, and have
speculative characteristics as well. Fixed income
securities rated below investment grade are often referred
to as "junk bonds." Such securities involve greater risk of
default or price declines than investment grade securities.
In the event a security owned by a Fund is downgraded, the
adviser will review the situation and take appropriate
action with regard to the security.
FOREIGN CURRENCY TRANSACTIONS
The Funds may enter into forward foreign currency contracts
to manage its foreign currency exposure and as a hedge
against possible variations in foreign exchange rates.
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The Funds may enter into forward foreign currency contracts
to hedge a specific security transaction or to hedge a
portfolio position. These contracts may be bought or sold
to protect the Funds, to some degree, against possible
losses resulting from an adverse change in the relationship
between foreign currencies and the U.S. dollar. The Funds
also may invest in foreign currency futures and in options
on currencies.
LOWER RATED SECURITIES
The High Yield Bond and Emerging Markets Equity Funds may
invest in lower rated securities. Fixed income securities
are subject to the risk of an issuer's ability to meet
principal and interest payments on the obligation (credit
risk), and may also be subject to price volatility due to
such factors as interest rate sensitivity, market
perception of the creditworthiness of the issuer and
general market liquidity (market risk). Lower rated or
unrated (i.e., high yield) securities are more likely to
react to developments affecting market and credit risk than
are more highly rated securities, which primarily react to
movements in the general level of interest rates. The
market values of fixed income securities tend to vary
inversely with the level of interest rates. Yields and
market values of high yield securities will fluctuate over
time, reflecting not only changing interest rates but the
market's perception of credit quality and the outlook for
economic growth. When economic conditions appear to be
deteriorating, medium to lower rated securities may decline
in value due to heightened concern over credit quality,
regardless of prevailing interest rates. Investors should
carefully consider the relative risks of investing in high
yield securities and understand that such securities
generally are not meant for short-term investing.
The high yield market is relatively new and its
growth paralleled a long period of economic expansion and
an increase in merger, acquisition and leveraged buyout
activity. Adverse economic developments can disrupt the
market for high yield securities, and severely affect the
ability of issuers, especially highly leveraged issuers, to
service their debt obligations or to repay their
obligations upon maturity which may lead to a higher
incidence of default on such securities. In addition, the
secondary market for high yield securities, which is
concentrated in relatively few market makers, may not be as
liquid as the secondary market for more highly rated
securities. As a result, a Fund's Money Managers could find
it more difficult to sell these securities or may be able
to sell the securities only at prices lower than if such
securities were widely traded. Furthermore, a Fund may
experience difficulty in valuing certain securities at
certain times. Prices realized upon the sale of such lower
rated or unrated securities, under these circumstances, may
be less than the prices used in calculating such Fund's net
asset value.
Prices for high yield securities may be affected by
legislative and regulatory developments. These laws could
adversely affect a Fund's net asset value and investment
practices, the secondary market for high yield securities,
the financial condition of issuers
23
<PAGE>
of these securities and the value of outstanding high yield
securities. For example, federal legislation requiring the
divestiture by federally insured savings and loan
associations of their investments in high yield bonds and
limiting the deductibility of interest by certain corporate
issuers of high yield bonds adversely affected the market
in recent years.
Lower rated or unrated fixed income obligations also
present risks based on payment expectations. If an issuer
calls the obligations for redemption, a Fund may have to
replace the security with a lower yielding security,
resulting in a decreased return for investors. If a Fund
experiences unexpected net redemptions, it may be forced to
sell its higher rated securities, resulting in a decline in
the overall credit quality of the Fund's investment
portfolio and increasing the exposure of the Fund to the
risks of high yield securities.
MONEY MARKET
SECURITIES
Each Fund may hold cash reserves and invest in money market
instruments (including securities issued or guaranteed by
the U.S. Government, its agencies or instrumentalities,
repurchase agreements, certificates of deposit and bankers'
acceptances issued by banks or savings and loan
associations having net assets of at least $500 million as
of the end of their most recent fiscal year, high-grade
commercial paper and other short-term debt securities)
rated at the time of purchase in the top two categories by
an NRSRO, or, if not rated, determined by the advisers to
be of comparable quality at the time of purchase.
OPTIONS AND FUTURES
Each Fund may purchase or write options (including options
on non-U.S. indices and currencies), futures (including
futures on U.S. Treasury obligations and Eurodollar
instruments) and options on futures. Risks associated with
investing in options and futures may include lack of a
liquid secondary market, trading restrictions which may be
imposed by an exchange, government regulations which may
restrict trading, an imperfect correlation between the
prices of securities held by a Fund and the price of an
option or future and, in the case of non-U.S. futures and
options, the risks of investing in foreign markets
generally.
PORTFOLIO TURNOVER RATE
Each Fund's annual portfolio turnover rate will generally
not exceed 150%, except for the Core Fixed Income Fund's
portfolio turnover rate, which will generally not exceed
300%. Portfolio turnover rates over 100% will result in
higher transaction costs and may result in additional taxes
for shareholders. See "Taxes."
SECURITIES OF FOREIGN AND EMERGING MARKET ISSUERS
There are certain risks connected with investing in foreign
securities. These include risks of adverse political and
economic developments (including possible governmental
seizure or nationalization of assets), the possible
imposition of exchange or currency controls or other
governmental restrictions, less uniformity in accounting
and reporting requirements, the possibility that there will
be less information on such securities and their issuers
available to the public, the difficulty of obtaining or
enforcing court judgments abroad, restrictions on foreign
investments in other jurisdictions, difficulties in
effecting repatriation of capital invested abroad and
difficulties in transaction settlements and the effect of
delay on shareholder equity. Foreign securities may be
subject to foreign taxes, and may be less
24
<PAGE>
marketable than comparable U.S. securities. The value of a
Fund's investments denominated in foreign currencies will
depend on the relative strengths of those currencies and
the U.S. dollar, and a Fund may be affected favorably or
unfavorably by changes in the exchange rates or exchange or
currency control regulations between foreign currencies and
the U.S. dollar. Changes in foreign currency exchange rates
also may affect the value of dividends and interest earned,
gains and losses realized on the sale of securities and net
investment income and gains if any, to be distributed to
shareholders by a Fund.
A Fund's investments in emerging markets can be
considered speculative, and therefore may offer higher
potential for gains and losses than investments in
developed markets of the world. With respect to any
emerging country, there may be a greater potential for
nationalization, expropriation or confiscatory taxation,
political changes, government regulation, social
instability or diplomatic developments (including war)
which could affect adversely the economies of such
countries or investments in such countries. The economies
of developing countries generally are heavily dependent
upon international trade and, accordingly, have been and
may continue to be adversely affected by trade barriers,
exchange or currency controls, managed adjustments in
relative currency values and other protectionist measures
imposed or negotiated by the countries with which they
trade.
In addition to the risks of investing in emerging
market country debt securities, a Fund's investment in
government, government-related and restructured debt
instruments are subject to special risks, including the
inability or unwillingness to repay principal and interest,
requests to reschedule or restructure outstanding debt, and
requests to extend additional loan amounts. A Fund may have
limited recourse in the event of default on such debt
instruments.
TEMPORARY DEFENSIVE INVESTMENTS
For temporary defensive purposes, when the Money Managers
determine that market conditions warrant, the Funds may
invest up to 100% of their assets in U.S. dollar-
denominated fixed income securities or debt obligations and
in domestic and foreign money market instruments. In
addition, the Funds may invest in the foregoing instruments
and hold cash for liquidity purposes.
For additional information regarding the Funds'
permitted investments, see "Description of Permitted
Investments and Risk Factors" in this Prospectus and
"Description of Permitted Investments" in the Statement of
Additional Information. For a description of the above
ratings, see the "Appendix."
INVESTMENT LIMITATIONS
________________________________________________________________________
The investment objectives and certain of the investment
limitations are fundamental policies of the Funds.
Fundamental policies cannot be changed with respect to the
Trust or a Fund without the consent of the holders of a
majority of the Trust's or that Fund's outstanding shares.
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<PAGE>
NO FUND MAY:
1. With respect to 75% of its total assets, (i) purchase
securities of any issuer (except securities issued or
guaranteed by the United States Government, its agencies
or instrumentalities) if, as a result, more than 5% of
its total assets would be invested in the securities of
such issuer; or (ii) acquire more than 10% of the
outstanding voting securities of any one issuer. This
restriction does not apply to the International Fixed
Income Fund.
2. Purchase any securities which would cause more than 25%
of its total assets to be invested in the securities of
one or more issuers conducting their principal business
activities in the same industry, provided that this
limitation does not apply to investments in securities
issued or guaranteed by the United States Government, its
agencies or instrumentalities.
For purposes of the industry concentration limitation,
specified in paragraph 2 above, (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 end users of
their services, for example, automobile finance, bank
finance and diversified finance will each be considered a
separate industry; (iii) supranational agencies will be
deemed to be issuers conducting their principal business
activities in the same industry; and (iv) governmental
issuers within a particular country will be deemed to be
conducting their principal business activities in the same
industry.
The foregoing percentage limitations will apply at
the time of the purchase of a security. Additional
fundamental and non-fundamental investment limitations are
set forth in the Statement of Additional Information.
PURCHASE AND
REDEMPTION OF SHARES
____________________________________________________________________________
Shares of each Fund may be purchased or redeemed on days on
which the New York Stock Exchange is open for business
(each, a "Business Day").
Shareholders who desire to purchase shares for cash
must place their orders with the Transfer Agent (or its
authorized agent) prior to 4:00 p.m. Eastern time on any
Business Day for the order to be accepted on that Business
Day. Cash investments must be transmitted or delivered in
federal funds to the wire agent on the next Business Day
following the day the order is placed. The Trust reserves
the right to reject a purchase order when the distributor
determines that it is not in the best interest of the Trust
or its shareholders to accept such purchase order.
Purchases will be made in full and fractional shares
of a Fund calculated to three decimal places. The Trust
will send shareholders a statement of shares owned after
each
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<PAGE>
transaction. The purchase price of shares is the net asset
value next determined after a purchase order is received
and accepted by the Trust. The net asset value per share of
each Fund is determined by dividing the total market value
of a Fund's investment and other assets, less any
liabilities, by the total number of outstanding shares of
that Fund. Net asset value per share is determined daily at
the close of business of the New York Stock Exchange
(currently 4:00 p.m. Eastern time) on each Business Day.
Information about the market value of each portfolio
security may be obtained by SEI Management from an
independent pricing service. The pricing service relies
primarily on prices of actual market transactions as well
as trader quotations. However, the pricing service may use
a matrix system to determine valuations of equity and fixed
income securities. This system considers such factors as
security prices, yields, maturities, call features, ratings
and developments relating to specific securities in
arriving at valuations. The procedures used by the pricing
service and its valuations are reviewed by the officers of
the Trust under the general supervision of the Trustees.
Securities that have maturities of 60 days or less at the
time of purchase will be valued using the amortized cost
method (described in the Statement of Additional
Information).
Shares of a Fund may be purchased in exchange for
securities included in the Fund subject to SEI Management's
determination that the securities are acceptable.
Securities accepted in an exchange will be valued at the
market value. All accrued interest and subscription of
other rights which are reflected in the market price of
accepted securities at the time of valuation become the
property of the Trust and must be delivered by the
Shareholder to the Trust upon receipt from the issuer.
SEI Management will not accept securities for a Fund
unless (1) such securities are appropriate for the Fund at
the time of the exchange; (2) such securities are acquired
for investment and not for resale; (3) the Shareholder
represents and agrees that all securities offered to the
Trust for the Fund are not subject to any restrictions upon
their sale by the Fund under the Securities Act of 1933, or
otherwise; (4) such securities are traded on the American
Stock Exchange, the New York Stock Exchange or on NASDAQ in
an unrelated transaction with a quoted sales price on the
same day the exchange valuation is made or, if not listed
on such exchanges or on NASDAQ, have prices available from
an independent pricing service approved by the Trust's
Board of Trustees; and (5) the securities may be acquired
under the investment restrictions applicable to the Fund.
Shareholders who desire to redeem shares of a Fund
must place their redemption orders with the Transfer Agent
(or its authorized agent) prior to 4:00 p.m. Eastern time
on any Business Day. The redemption price is the net asset
value per share of the Fund next determined after receipt
by the Transfer Agent of the redemption order. Payment on
redemption will be made as promptly as possible and, in any
event, within seven days after the redemption order is
received.
The Trust intends to generally make redemptions in
cash. The Trust may, however, make redemptions in whole or
in part by a distribution in kind of readily marketable
27
<PAGE>
securities in lieu of cash. Shareholders may incur
brokerage costs on the sale of any such securities so
received in payment of redemptions.
Purchase and redemption orders may be placed by
telephone. Neither the Trust nor the Transfer Agent will be
responsible for any loss, liability, cost or expense for
acting upon wire instructions or upon telephone
instructions that it reasonably believes to be genuine. The
Trust and the Transfer Agent will each employ reasonable
procedures to confirm that instructions communicated by
telephone are genuine, including requiring a form of
personal identification prior to acting upon instructions
received by telephone and recording telephone instructions.
If market conditions are extraordinarily active, or
other extraordinary circumstances exist, and shareholders
experience difficulties placing redemption orders by
telephone, shareholders may wish to consider placing their
order by other means.
PERFORMANCE
______________________________________________________________________
From time to time, a Fund may advertise yield and total
return. These figures will be based on historical earnings
and are not intended to indicate future performance. No
representation can be made concerning actual yield or
future returns. The yield of a Fund refers to the
annualized income generated by an investment in the Fund
over a specified 30-day period. The yield is calculated by
assuming that the same amount of income generated by the
investment during that period is generated in each 30-day
period over one year and is shown as a percentage of the
investment.
The total return of a Fund refers to the average
compounded rate of return on a hypothetical investment for
designated time periods, assuming that the entire
investment is redeemed at the end of each period and
assuming the reinvestment of all dividend and capital gain
distributions.
A Fund may periodically compare its performance to
that of: (i) other mutual funds tracked by mutual fund
rating services (such as Lipper Analytical), or by
financial and business publications and periodicals; (ii)
broad groups of comparable mutual funds; (iii) unmanaged
indices which may assume investment of dividends but
generally do not reflect deductions for administrative and
management costs; or (iv) other investment alternatives. A
Fund may quote Morningstar, Inc., a service that ranks
mutual funds on the basis of risk-adjusted performance. A
Fund may use long-term performance of these capital markets
to demonstrate general long-term risk versus reward
scenarios and could include the value of a hypothetical
investment in any of the capital markets. A Fund may also
quote financial and business publications and periodicals
as they relate to fund management, investment philosophy
and investment techniques.
A Fund may quote various measures of volatility and
benchmark correlation in advertising and may compare these
measures to those of other funds. Measures of volatility
attempt to compare historical share price fluctuations or
total returns to a benchmark while measures of benchmark
correlation indicate how valid a comparative
28
<PAGE>
benchmark might be. Measures of volatility and correlation
are calculated using averages of historical data and cannot
be calculated precisely.
TAXES
______________________________________________________________________________
The following summary of federal income tax consequences is
based on current tax laws and regulations, which may be
changed by legislative, judicial or administrative action.
No attempt has been made to present a detailed explanation
of the federal, state or local tax treatment of the Funds
or their shareholders. Accordingly, shareholders are urged
to consult their tax advisers regarding specific questions
as to federal, state and local taxes. State and local tax
consequences of an investment in a Fund may differ from the
federal income tax consequences described below. Additional
information concerning taxes is set forth in the Statement
of Additional Information.
TAX STATUS OF THE FUNDS
Each Fund is treated as a separate entity for federal
income tax purposes and is not combined with the Trust's
other funds. The Funds intend to qualify for the special
tax treatment afforded regulated investment companies
("RICs") under Subchapter M of the Code so as to be
relieved of federal income tax on net investment company
taxable income and net capital gains (the excess of net
long-term capital gain over net short-term capital losses)
distributed to shareholders.
TAX STATUS OF DISTRIBUTIONS
Each Fund distributes substantially all of its net
investment income (including net short-term capital gains)
to shareholders. Dividends from a Fund's net investment
income are taxable to its shareholders as ordinary income
(whether received in cash or in additional shares).
Distributions of net capital gains are taxable to
shareholders as gain from the sale or exchange of a capital
asset held for more than one year regardless of how long
the shareholder has held shares. Dividends distributions of
the Core Fixed Income Fund, High Yield Bond Fund,
International Fixed Income Fund, Emerging Markets Equity
Fund and International Equity Fund will not qualify for the
corporate dividends-received deduction. The Funds will
provide annual reports to shareholders of the federal
income tax status of all distributions.
Dividends declared by a Fund in October, November or
December of any year and payable to shareholders of record
on a date in such a month will be deemed to have been paid
by the Fund and received by the Shareholders on December 31
of the year declared if paid by the Fund at any time during
the following January.
Each Fund intends to make sufficient distributions to
avoid liability for the federal excise tax applicable to
RICs.
Investment income received by the Funds from sources
within foreign countries may be subject to foreign income
taxes withheld at the source. To the extent that a Fund is
liable for foreign income taxes so withheld, the Fund
intends to operate so as to meet the requirements of the
Code to pass through to the shareholders credit for foreign
29
<PAGE>
income taxes paid. Although the Funds intend to meet Code
requirements to pass through credit for such taxes, there
can be no assurance that the Funds will be able to do so.
Each sale, exchange or redemption of Fund shares is a
taxable transaction to the shareholder.
GENERAL INFORMATION
______________________________________________________________
TRUSTEES OF THE TRUST
The management and affairs of the Trust are supervised by
the Trustees under the laws of the Commonwealth of
Massachusetts. The Trustees have approved contracts under
which, as described above, certain companies provide
essential management services to the Trust. All
consideration received by the Trust for shares of any fund,
and all assets of such fund belong to that fund and would
be subject to the liabilities related thereto. The Trust
pays its expenses, including the fees of its service
providers, audit and legal expenses, expenses of preparing
prospectuses, proxy solicitation materials 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 organizational expenses.
VOTING RIGHTS
Each share held entitles the shareholder of record to one
vote. The shareholders of each Fund will vote separately on
matters pertaining solely to that Fund, such as any
distribution plan. As a Massachusetts business trust, the
Trust is not required to hold annual meetings of
shareholders, but approval will be sought for certain
changes in the operation of the Trust and for the election
of Trustees under certain circumstances. In addition, a
Trustee may be removed by the remaining Trustees or by
shareholders at a special meeting called upon written
request of shareholders owning at least 10% of the
outstanding shares of the Trust. In the event that such a
meeting is requested, the Trust will provide appropriate
assistance and information to the shareholders requesting
the meeting.
As of September 1, 1997, Bank of America NT and SA
owned a controlling interest (as defined by the Investment
Company Act of 1940) in the Trust's International Equity,
Core Fixed Income, Large Cap and Small Cap Funds.
REPORTING
The Trust issues an unaudited financial report
semi-annually and audited financial statements annually.
The Trust furnishes proxy statements and other reports to
shareholders of record.
SHAREHOLDER INQUIRIES
Shareholder inquiries should be directed to SEI Fund
Management, Oaks, Pennsylvania 19456.
DIVIDENDS
Substantially all of the net investment income (exclusive
of capital gains) of each Fund is periodically declared and
paid as a dividend. Dividends currently are paid
periodically for the International Fixed Income, Emerging
Markets Equity and International Equity Funds, monthly for
the Core Fixed Income and High Yield Bond Funds and
quarterly for the Small
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<PAGE>
Cap and Large Cap Funds. Currently, net capital gains for
all the Funds (the excess of net long-term capital gain
over net short-term capital loss) realized, if any, will be
distributed at least annually.
Shareholders automatically receive all income
dividends and capital gains distributions in additional
shares at the net asset value next determined following the
record date, unless the shareholder has elected to take
such payment in cash. Shareholders may change their
election by providing written notice to SEI Management at
least 15 days prior to the distribution.
Dividends and capital gains of each Fund are paid on
a per-share basis. The value of each share will be reduced
by the amount of any such payment. If shares are purchased
shortly before the record date for a dividend or capital
gains distributions, a shareholder will pay the full price
for the share and receive some portion of the price back as
a taxable dividend or distribution.
MASTER/FEEDER OPTION
The Trust may in the future seek to achieve any Fund's
investment objective by investing all of that Fund's assets
in another investment company having the same investment
objective and substantially the same investment policies
and restrictions as those applicable to that Fund. It is
expected that any such investment company would be managed
by SIMC in substantially the same manner as the existing
Fund. The initial shareholder(s) of each Fund voted to vest
such authority in the sole discretion of the Trustees and
such investment may be made without further approval of the
shareholders of the Funds. However, shareholders of the
Funds will be given at least 30 days' prior notice of any
such investment. Such investment would be made only if the
Trustees determine it to be in the best interests of a Fund
and its shareholders. In making that determination the
Trustees will consider, among other things, the benefits to
shareholders and/or the opportunity to reduce costs and
achieve operational efficiencies. Although the Funds
believe that the Trustees will not approve an arrangement
that is likely to result in higher costs, no assurance is
given that costs will be materially reduced if this option
is implemented.
COUNSEL AND INDEPENDENT ACCOUNTANTS
Morgan, Lewis & Bockius LLP serves as counsel to the Trust.
Coopers & Lybrand LLP serves as the independent accountants
of the Trust.
CUSTODIAN
CoreStates Bank, N.A., Broad and Chestnut Streets, P.O. Box
7618, Philadelphia, Pennsylvania 19101, acts as wire agent
for each of the Funds and custodian for the assets of the
Large Cap, Small Cap, Core Fixed Income and High Yield Bond
Funds. State Street Bank and Trust Company, 225 Franklin
Street, Boston, Massachusetts 02110, acts as custodian for
the assets of the International Fixed Income, Emerging
Markets Equity and International Equity Funds. CoreStates
Bank, N.A. and State Street Bank and Trust Company (each a
"Custodian," and, together, the "Custodians") hold cash,
securities and other assets of the respective Funds for
which they act as custodian as required by the 1940 Act.
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DESCRIPTION OF
PERMITTED INVESTMENTS
AND
RISK FACTORS
______________________________________________________________________
The following is a description of the permitted investment
practices for the Funds, and the associated risk factors:
AMERICAN DEPOSITARY RECEIPTS ("ADRS"), EUROPEAN DEPOSITARY RECEIPTS ("EDRS") AND
GLOBAL DEPOSITARY RECEIPTS ("GDRS")
ADRs are securities, typically issued by a U.S. financial
institution (a "depositary"), that evidence ownership
interests in a security or a pool of securities issued by a
foreign issuer and deposited with the depositary. ADRs
include American Depositary Shares and New York Shares.
EDRs, which are sometimes referred to as Continental
Depositary Receipts ("CDRs"), are securities, typically
issued by a non-U.S. financial institution, that evidence
ownership interests in a security or a pool of securities
issued by either a U.S. or foreign issuer. GDRs are issued
globally and evidence a similar ownership arrangement.
Generally, ADRs are designed for trading in the U.S.
securities market, EDRs are designed for trading in
European securities market and GDRs are designed for
trading in non-U.S. securities markets. ADRs, EDRs, CDRs
and GDRs may be available for investment through
"sponsored" or "unsponsored" facilities. A sponsored
facility is established jointly by the issuer of the
security underlying the receipt and a depositary, whereas
an unsponsored facility may be established by a depositary
without participation by the issuer of the receipt's
underlying security.
ASSET-BACKED SECURITIES
Asset-backed securities are secured by non-mortgage assets
such as company receivables, truck and auto loans, leases
and credit card receivables. Such securities are generally
issued as pass-through certificates, which represent
undivided fractional ownership interests in the underlying
pools of assets. Such securities also may be debt
instruments, which are also known as collateralized
obligations and are generally issued as the debt of a
special purpose entity, such as a trust, organized solely
for the purpose of owning such assets and issuing such
debt. A Fund may invest in other asset-backed securities
that may be created in the future if the Money Managers
determine that they are suitable.
CONVERTIBLE SECURITIES
Convertible securities are corporate securities that are
exchangeable for a set number of another security at a
prestated price. Convertible securities typically have
characteristics similar to both fixed income and equity
securities. Because of the conversion feature, the market
value of a convertible security tends to move with the
market value of the underlying stock. The value of a
convertible security is also affected by prevailing
interest rates, the credit quality of the issuer, and any
call provisions.
DEMAND INSTRUMENTS
Certain instruments may entail a demand feature which
permits the holder to demand payment of the principal
amount of the instrument. Demand instruments include
variable rate demand notes.
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DERIVATIVES
Derivatives are investments that derive their value from
other securities, assets or indices. The following may be
considered derivative securities: futures, options on
futures, options (e.g., puts and calls), swap agreements,
mortgage-backed securities (e.g., CMOs, REMICs, IOs and
POs), when-issued securities and forward commitments,
floating and variable rate securities, convertible
securities, "stripped" U.S. Treasury securities (e.g.,
receipts and STRIPs), privately issued stripped securities
(e.g., TIGRs, TRs and CATS). See elsewhere in this
"Description of Permitted Investments and Risk Factors" for
discussions of certain of these instruments, and see
"Investment Objectives and Policies" for more information
about any investment policies and limitations applicable to
their use.
FORWARD FOREIGN CURRENCY CONTRACTS
A forward contract involves an obligation to purchase or
sell a specific currency amount at a future date, agreed
upon by the parties, at a price set at the time of the
contract. A Fund may enter into a contract to sell, for a
fixed amount of U.S. dollars or other appropriate currency,
the amount of foreign currency approximating the value of
some or all of the Fund's securities denominated in such
foreign currency.
At the maturity of a forward contract, the Fund may
either sell a fund security and make delivery of the
foreign currency, or it may retain the security and
terminate its contractual obligation to deliver the foreign
currency by purchasing an "offsetting" contract with the
same currency trader, obligating it to purchase, on the
same maturity date, the same amount of the foreign
currency. The Fund may realize a gain or loss from currency
transactions.
FUTURES AND OPTIONS ON FUTURES
Futures contracts provide for the future sale by one party
and purchase by another party of a specified amount of a
specific security at a specified future time and at a
specified price. An option on a futures contract gives the
purchaser the right, in exchange for a premium, to assume a
position in a futures contract at a specified exercise
price during the term of the option. A Fund may use futures
contracts and related options for bona fide hedging
purposes, to offset changes in the value of securities held
or expected to be acquired or be disposed of, to minimize
fluctuations in foreign currencies, or to gain exposure to
a particular market or instrument. A Fund will minimize the
risk that it will be unable to close out a futures contract
by only entering into futures contracts which are traded on
national futures exchanges.
An index futures contract is a bilateral agreement
pursuant to which two parties agree to take or make
delivery of an amount of cash equal to a specified dollar
amount times the difference between the index value at the
close of trading of the contract and the price at which the
futures contract is originally struck. No physical delivery
of the securities comprising the Index is made; generally
contracts are closed out prior to the expiration date of
the contract.
In order to avoid leveraging and related risks, when
a Fund invests in futures contracts, it will cover its
position by depositing an amount of cash or liquid
securities, equal to the market value of the futures
positions held, less margin deposits, in a segregated
account and that amount will be marked to market on a daily
basis.
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A Fund may enter into futures contracts and options
on futures contracts traded on an exchange regulated by the
Commodities Futures Trading Commission ("CFTC"), as long
as, to the extent that such transactions are not for "bona
fide hedging purposes," the aggregate initial margin and
premiums on such positions (excluding the amount by which
such options are in the money) do not exceed 5% of a Fund's
net assets.
There are risks associated with these activities,
including the following: (1) the success of a hedging
strategy may depend on an ability to predict movements in
the prices of individual securities, fluctuations in
markets and movements in interest rates; (2) there may be
an imperfect or no correlation between the changes in
market value of the securities held by the Fund and the
prices of futures and options on futures; (3) there may not
be a liquid secondary market for a futures contract or
option; (4) trading restrictions or limitations may be
imposed by an exchange; and (5) government regulations may
restrict trading in futures contracts and futures options.
ILLIQUID SECURITIES
Illiquid securities are securities that cannot be disposed
of within seven business days at approximately the price at
which they are being carried on the Fund's books. Illiquid
securities include demand instruments with a demand notice
period exceeding seven days, securities for which there is
no active secondary market, and repurchase agreements with
durations over 7 days in length.
The Emerging Markets Equity Fund's Money Managers
believe that carefully selected investments in joint
ventures, cooperatives, partnerships, private placements,
unlisted securities and other similar situations
(collectively, "special situations") could enhance its
capital appreciation potential. Investments in special
situations may be illiquid, as determined by the Emerging
Markets Equity Fund's Money Managers based on criteria
approved by the Board of Trustees. To the extent these
investments are deemed illiquid, the Emerging Markets
Equity Fund's investment in them will be consistent with
its 15% restriction on investment in illiquid securities.
INVESTMENT COMPANIES
Because of restrictions on direct investment by U.S.
entities in certain countries, investment in other
investment companies may be the most practical or only
manner in which an international and global fund can invest
in the securities markets of those countries. A Fund does
not intend to invest in other investment companies unless,
in the judgment of its Money Managers, the potential
benefits of such investments exceed the associated costs
(which includes any investment advisory fees charged by the
investment companies) relative to the benefits and costs
associated with direct investments in the underlying
securities.
Investments in closed-end investment companies may
involve the payment of substantial premiums above the net
asset value of such issuers' fund securities, and are
subject to limitations under the 1940 Act. A Fund may incur
tax liability to the extent it invests in the stock of a
foreign issuer that constitutes a "passive foreign
investment company."
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JUNK BONDS
Bonds rated below investment grade are often referred to as
"junk bonds." Such securities involve greater risk of
default or price declines than investment grade securities
due to changes in the issuer's creditworthiness and the
outlook for economic growth. The market for these
securities may be less active, causing market price
volatility and limited liquidity in the secondary market.
This may limit a Fund's ability to sell such securities at
their market value. In addition, the market for these
securities may also be adversely affected by legislative
and regulatory developments. Credit quality in the junk
bond market can change suddenly and unexpectedly, and even
recently issued credit ratings may not fully reflect the
actual risks imposed by a particular security.
MONEY MARKET SECURITIES
Money market securities are high-quality dollar and
nondollar-denominated, short-term debt instruments. They
consist of: (i) bankers' acceptances, certificates of
deposits, notes and time deposits of highly-rated U.S. and
foreign banks; (ii) U.S. Treasury obligations and
obligations issued or guaranteed by the agencies and
instrumentalities of the U.S. Government; (iii)
high-quality commercial paper issued by U.S. and foreign
corporations; (iv) debt obligations with a maturity of one
year or less issued by corporations and governments that
issue high-quality commercial paper or similar securities;
(v) repurchase agreements involving any of the foregoing
obligations entered into with highly-rated banks and
broker-dealers; and (vi) foreign government obligations.
MORTGAGE-BACKED SECURITIES
Mortgage-backed securities are instruments that entitle the
holder to a share of all interest and principal payments
from mortgages underlying the security. The mortgages
backing these securities include conventional fifteen and
thirty-year fixed-rate mortgages, graduated payment
mortgages, adjustable rate mortgages and balloon mortgages.
During periods of declining interest rates, prepayment of
mortgages underlying mortgage-backed securities can be
expected to accelerate. Prepayment of mortgages which
underlie securities purchased at a premium often results in
capital losses, while prepayment of mortgages purchased at
a discount often results in capital gains. Because of these
unpredictable prepayment characteristics, it is often not
possible to predict accurately the average life or realized
yield of a particular issue.
GOVERNMENT PASS-THROUGH SECURITIES: These are
securities that are issued or guaranteed by a U.S.
Government agency representing an interest in a pool of
mortgage loans. The primary issuers or guarantors of these
mortgage-backed securities are the Government National
Mortgage Association ("GNMA"), Fannie Mae and the Federal
Home Loan Mortgage Company ("FHLMC"). Fannie Mae and FHLMC
obligations are not backed by the full faith and credit of
the U.S. Government as GNMA certificates are, but Fannie
Mae and FHLMC securities are supported by the
instrumentalities' right to borrow from the U.S. Treasury.
GNMA, Fannie Mae and FHLMC each guarantee timely
distributions of interest to certificate holders. GNMA and
Fannie Mae also each guarantee timely distributions of
scheduled principal.
PRIVATE PASS-THROUGH SECURITIES: These are
mortgage-backed securities issued by a non-governmental
entity, such as a trust. While they are generally
structured with one or
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more types of credit enhancement, private pass-through
securities typically lack a guarantee by an entity having
the credit status of a governmental agency or
instrumentality.
COMMERCIAL MORTGAGE-BACKED SECURITIES ("CMBS"): CMBS
are generally multi-class or pass-through securities backed
by a mortgage loan or a pool of mortgage loans secured by
commercial property, such as industrial and warehouse
properties, office buildings, retail space and shopping
malls, multifamily properties and cooperative apartments.
The commercial mortgage loans that underlie CMBS have
certain distinct characteristics. Commercial mortgage loans
are generally not amortizing or not fully amortizing. That
is, at their maturity date, repayment of the remaining
principal balance or "balloon" is due and is repaid through
the attainment of an additional loan of sale of the
property. Unlike most single family residential mortgages,
commercial real estate property loans often contain
provisions which substantially reduce the likelihood that
such securities will be prepaid. The provisions generally
impose significant prepayment penalties on loans and, in
some cases there may be prohibitions on principal
prepayments for several years following origination.
COLLATERALIZED MORTGAGE OBLIGATIONS ("CMOS"): CMOs
are debt obligations of multiclass pass-through
certificates issued by agencies or instrumentalities of the
U.S. Government or by private originators or investors in
mortgage loans. In a CMO, series of bonds or certificates
are usually issued in multiple classes. Principal and
interest paid on the underlying mortgage assets may be
allocated among the several classes of a series of a CMO in
a variety of ways. Each class of a CMO is issued with a
specific fixed or floating coupon rate and has a stated
maturity or final distribution date.
REMICS: A REMIC is a CMO that qualifies for special
tax treatment under the Code and invests in certain
mortgages principally secured by interests in real
property. Guaranteed REMIC pass-through certificates
("REMIC Certificates") issued by Fannie Mae or FHLMC
represent beneficial ownership interests in a REMIC trust
consisting principally of mortgage loans or Fannie Mae,
FHLMC or GNMA-guaranteed mortgage pass-through
certificates.
STRIPPED MORTGAGE-BACKED SECURITIES ("SMBS"): SMBs
are usually structured with two classes that receive
specified proportions of the monthly interest and principal
payments from a pool of mortgage securities. One class may
receive all of the interest payments while the other class
may receive all of the principal payments. SMBs are
extremely sensitive to changes in interest rates because of
the impact thereon of prepayment of principal on the
underlying mortgage securities. The market for SMBs is not
as fully developed as other markets; SMBs therefore may be
illiquid.
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MORTGAGE DOLLAR ROLLS
Mortgage "dollar rolls," or "covered rolls," are
transactions in which a Fund sells securities (usually
mortgage-backed securities) and simultaneously contracts to
repurchase, typically in 30 or 60 days, substantially
similar, but not identical, securities on a specified
future date. During the roll period, a Fund forgoes
principal and interest paid on such securities. A Fund is
compensated by the difference between the current sales
price and the forward price for the future purchase (often
referred to as the "drop") as well as by the interest
earned on the cash proceeds of the initial sale. A "covered
roll" is a specific type of mortgage dollar roll for which
there is an offsetting cash position or cash equivalent
securities position that matures on or before the forward
settlement date of the mortgage dollar roll transaction. As
used herein the term "mortgage dollar roll" refers to
mortgage dollar rolls that are not "covered rolls." At the
end of the roll commitment period, a Fund may or may not
take delivery of the securities it has contracted to
purchase.
OBLIGATIONS OF SUPRANATIONAL ENTITIES
Supranational entities are entities established through the
joint participation of several governments, and include the
Asian Development Bank, the Inter-American Development
Bank, International Bank for Reconstruction and Development
(World Bank), African Development Bank, European Economic
Community, European Investment Bank and the Nordic
Investment Bank. The governmental members, or
"stockholders," usually make initial capital contributions
to the supranational entity and, in many cases, are
committed to make additional capital contributions if the
supranational entity is unable to repay its borrowings.
OPTIONS
A Fund may purchase and write put and call options on
indices or securities and enter into related closing
transactions. A put option on a security gives the
purchaser of the option the right to sell, and the writer
of the option the obligation to buy, the underlying
security at any time during the option period. A call
option on a security gives the purchaser of the option the
right to buy, and the writer of the option the obligation
to sell, the underlying security at any time during the
option period. The premium paid to the writer is the
consideration for undertaking the obligations under the
option contract.
Options on an index give the holder the right to
receive, upon exercise of the option, an amount of cash if
the closing level of the underlying index is greater than
(or less than, in the case of puts) the exercise price of
the option. Alternatively, a Fund may choose to terminate
an option position by entering into a closing transaction.
All settlements are in cash, and gain or loss depends on
price movements in the particular market represented by the
index generally, rather than the price movements in
individual securities.
A Fund that may invest in the securities of a foreign
issuer may also purchase and write put and call options on
foreign currencies to manage its exposure to exchange
rates. Call options on foreign currency written by a Fund
will be "covered," which means that the Fund will own an
equal amount of the underlying foreign currency. With
respect to put options on foreign currency written by a
Fund, the Fund will establish a segregated
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account with its custodian bank consisting of cash or
liquid securities in an amount equal to the amount the Fund
would be required to pay upon exercise of the put.
All options written on indices or securities must be
covered. When a Fund writes an option or security on an
index, it will establish a segregated account containing
cash or liquid securities in an amount at least equal to
the market value of the option and will maintain the
account while the option is open, or will otherwise cover
the transaction.
RISK FACTORS. Risks associated with options
transactions include: (1) the success of a hedging strategy
may depend on an ability to predict movements in the prices
of individual securities, fluctuations in markets and
movements in interest rates; (2) there may be an imperfect
correlation between the movement in prices of options and
the securities underlying them; (3) there may not be a
liquid secondary market for options; and (4) while a Fund
will receive a premium when it writes covered call options,
it may not participate fully in a rise in the market value
of the underlying security.
PRIVATIZATIONS
Privatizations are foreign government programs for selling
all or part of the interests in government owned or
controlled enterprises. The ability of a U.S. entity to
participate in privatizations in certain foreign countries
may be limited by local law, or the terms on which the Fund
may be permitted to participate may be less advantageous
than those applicable for local investors. There can be no
assurance that foreign governments will continue to sell
their interests in companies currently owned or controlled
by them or that privatization programs will be successful.
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 fixed income securities.
REITS
REITs are trusts that invest primarily in commercial real
estate or real estate-related loans. The value of interests
in REITs may be affected by the value of the property owned
or the quality of the mortgages held by the trust.
REPURCHASE AGREEMENTS
Arrangements by which a Fund obtains a security and
simultaneously commits to return the security to the seller
at an agreed upon price (including principal and interest)
on an agreed upon date within a number of days from the
date of purchase. Repurchase agreements are considered
loans under the 1940 Act.
SECURITIES LENDING
In order to generate additional income, a Fund may lend
securities that it owns pursuant to agreements requiring
that the loan be continuously secured by collateral
consisting of cash, securities of the U.S. Government or
its agencies equal to at least 100% of the market value of
the loaned securities. A Fund continues to receive interest
on the loaned securities while simultaneously earning
interest on the investment of cash collateral. Collateral
is marked to market daily. There may be risks of delay in
recovery of the
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securities or even loss of rights in the collateral should
the borrower of the securities fail financially or become
insolvent.
SHORT SALES
A Fund may only sell securities short "against the box." A
short sale is "against the box" if, at all times during
which the short position is open, the Fund owns at least an
equal amount of the securities or securities convertible
into, or exchangeable without further consideration for,
securities of the same issue as the securities that are
sold short.
SWAPS, CAPS, FLOORS AND COLLARS
Interest rate swaps, mortgage swaps, currency swaps and
other types of swap agreements such as caps, floors and
collars are designed to permit the purchaser to preserve a
return or spread on a particular investment or portion of
its portfolio, and to protect against any increase in the
price of securities a Fund anticipates purchasing at a
later date.
Swap agreements will tend to shift a Fund's
investment exposure from one type of investment to another.
Depending on how they are used, swap agreements may
increase or decrease the overall volatility of the Fund's
investments and their share price or yield.
U.S. GOVERNMENT AGENCY SECURITIES
Obligations issued or guaranteed by agencies of the U.S.
Government, including, among others, the Federal Farm
Credit Bank, the Federal Housing Administration and the
Small Business Administration, and obligations issued or
guaranteed by instrumentalities of the U.S. Government,
including, among others, the FHLMC, the Federal Land Banks
and the U.S. Postal Service. Some of these securities are
supported by the full faith and credit of the U.S. Treasury
(e.g., GNMA securities), others are supported by the right
of the issuer to borrow from the Treasury (e.g., Federal
Farm Credit Bank securities), while still others are
supported only by the credit of the instrumentality (e.g.,
Fannie Mae securities).
U.S. TREASURY OBLIGATIONS
U.S. Treasury obligations consist of bills, notes and bonds
issued by the U.S. Treasury as well as separately traded
interest and principal component parts of such obligations
that are transferable through the Federal book-entry
Principal Securities ("STRIPS").
U.S. TREASURY RECEIPTS
U. S. Treasury receipts are interests in separately traded
interest and principal component parts of U.S. Treasury
obligations that are issued by banks or brokerage firms and
are created by depositing U.S. Treasury notes and
obligations into a special account at a custodian bank. The
custodian holds the interest and principal payments for the
benefit of the registered owners of the certificates of
receipts. The custodian arranges for the issuance of the
certificates or receipts evidencing ownership and maintains
the register.
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
that are not fixed, but which vary with changes in
specified market rates or indices. The interest rates on
these securities may be reset daily, weekly, quarterly or
some other reset period, and may have a floor or ceiling on
interest rate changes.
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.
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WHEN-ISSUED AND DELAYED DELIVERY SECURITIES, INCLUDING TBA MORTGAGE-BACKED
SECURITIES
When-issued or delayed delivery basis transactions involve
the purchase of an instrument with payment and delivery
taking place in the future. Delivery of and payment for
these securities may occur a month or more after the date
of the purchase commitment. A Fund will maintain a separate
account with liquid securities or cash in an amount at
least equal to these commitments. The interest rate
realized on these securities is fixed as of the purchase
date, and no interest accrues to a Fund before settlement.
YANKEE OBLIGATIONS
Yankee obligations ("Yankees") are U.S. dollar-denominated
instruments of foreign issuers who either register with the
SEC or issue under Rule 144A under the Securities Act of
1933. These obligations consist of debt securities
(including preferred or preference stock of
non-governmental issuers), certificates of deposit, fixed
time deposits and bankers' acceptances issued by foreign
banks, and debt obligations of foreign governments or their
subdivisions, agencies and instrumentalities, international
agencies and supranational entities. Some securities issued
by foreign governments or their subdivisions, agencies and
instrumentalities may not be backed by the full faith and
credit of the foreign government.
The Yankee obligations selected for a Fund will
adhere to the same quality standards as those utilized for
the selection of domestic debt obligations.
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 a Fund
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 Fund will have fewer assets with which to
purchase income producing securities. Pay-in-kind
securities pay interest in either cash or additional
securities, at the issuer's option, for a specified period.
Pay-in-kind bonds, like zero coupon bonds, are designed to
give an issuer flexibility in managing cash flow.
Pay-in-kind bonds are expected to reflect the market value
of the underlying debt plus an amount representing accrued
interest since the last payment. Pay-in-kind bonds are
usually less volatile than zero coupon bonds, but more
volatile than cash pay securities. 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.
To avoid any leveraging concerns, the Fund will place
U.S. Government or other liquid securities in a segregated
account in an amount sufficient to cover its repurchase
obligation. 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.
Additional information on permitted investments and
risk factors can be found in the Statement of Additional
Information.
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APPENDIX--DESCRIPTION OF CORPORATE BOND RATINGS ________________________________
DESCRIPTION OF MOODY'S LONG-TERM RATINGS
Aaa
Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
Aa
Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other
elements present which make the long-term risk appear somewhat larger than
the Aaa securities.
A
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 some time in
the future.
Baa
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.
Ba
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.
B
Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance
of other terms of the contract over any long period of time may be small.
Caa
Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to
principal or interest.
Ca
Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked
shortcomings.
C
Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing.
Moody's bond ratings, where specified, are applied to senior bank obligations
and insurance company senior policyholder and claims obligations with an
original maturity in excess of one year. Obligations relying upon support
mechanisms such as letters-of-credit and bonds of indemnity are excluded unless
explicitly rated.
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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.
NOTE: Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.
DESCRIPTION OF STANDARD & POOR'S LONG-TERM RATINGS
INVESTMENT GRADE
AAA
Debt rated 'AAA' has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.
AA
Debt rated 'AA' has a very strong capacity to pay interest and repay
principal and differs from the highest rated debt only in small degree.
A
Debt rated 'A' has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to adverse effects of changes in
circumstances and economic conditions than debt in higher-rated categories.
BBB
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.
A-2
<PAGE>
SPECULATIVE GRADE
Debt rated 'BB', 'B', 'CCC', 'CC', and 'C' 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.
BB
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.
B
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.
CCC
Debt rated 'CCC' has a current identifiable vulnerability to default, and
is dependent on favorable business, financial, and economic conditions to
meet timely payment of interest and repayment of principal. In the event of
adverse business, financial, or economic conditions, it is not likely to
have the capacity to pay interest and repay principal. The 'CCC' rating
category also is used for debt subordinated to senior debt that is assigned
an actual or implied 'B' or 'B-' rating.
CC
The rating 'CC' is typically applied to debt subordinated to senior debt
which is assigned an actual or implied 'CCC' rating.
C
The rating 'C' is typically applied to debt subordinated to senior debt
which is assigned an actual or implied 'CCC-' debt rating. The 'C' rating
may be used to cover a situation where a bankruptcy petition has been
filed, but debt service payments are continued.
CI
Debt rated 'CI' is reserved for income bonds on which no interest is being
paid.
D
Debt is rated 'D' when the issue is in payment default, or the obligor has
filed for bankruptcy. The 'D' rating is used when interest or principal
payments are not made on the date due, even if the applicable grace period
has not expired, unless S&P believes that such payments will be made during
such grace period.
Plus (+) or minus (-): The ratings from 'AA' to 'CCC' may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
DESCRIPTION OF DUFF & PHELPS' LONG-TERM DEBT RATINGS
AAA
Highest credit quality. The risk factors are negligible, being only
slightly more than for risk-free U.S. Treasury debt.
AA+
AA-
High credit quality. Protection factors are strong. Risk is modest but may
vary slightly from time to time because of economic conditions.
A-3
<PAGE>
A+
A-
Protection factors are average but adequate. However, risk factors are more
variable and greater in periods of economic stress.
BBB+
BBB-
Below average protection factors but still considered sufficient for
prudent investment. Considerable variability in risk during economic
cycles.
BB+
BB
BB-
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.
B+
B
B-
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.
CCC
Well below investment grade securities. Considerable uncertainty exists as
to timely payment of principal, interest or preferred dividends. Protection
factors are narrow and risk can be substantial with unfavorable economic/
industry conditions, and/or with unfavorable company developments.
DD
Defaulted debt obligations. Issuer failed to meet scheduled principal
and/or interest payments.
DP
Preferred stock with dividend arrearages.
DESCRIPTION OF FITCH'S LONG-TERM RATINGS
INVESTMENT GRADE BOND
AAA
Bonds considered to be investment grade and of the highest credit quality.
The obligor has an exceptionally strong ability to pay interest and repay
principal, which is unlikely to be affected by reasonably foreseeable
events.
AA
Bonds considered to be investment grade and of very high credit quality.
The obligor's ability to pay interest and repay principal is very strong,
although not quite as strong as bonds rated 'AAA'. Because bonds rated in
the 'AAA' and 'AA' categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these issuers is
generally rated 'F-1+'.
A
Bonds 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.
BBB
Bonds 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.
A-4
<PAGE>
SPECULATIVE GRADE BOND
BB
Bonds 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.
B
Bonds 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.
CCC
Bonds have certain identifiable characteristics which, if not remedied, may
lead to default. The ability to meet obligations requires an advantageous
business and economic environment.
CC
Bonds are minimally protected. Default in payment of interest and/or
principal seems probable over time.
C
Bonds are in imminent default in payment of interest or principal.
DDD, DD, AND D
Bonds are in default on interest and/or principal payments. Such
bonds are extremely speculative and should be valued on the basis
of their ultimate recovery value in liquidation or reorganization
of the obligor. 'DDD' represents the highest potential for
recovery on these bonds, and 'D' represents the lowest potential
for recovery.
PLUS (+) MINUS (-)
Plus and minus signs are used with a rating symbol to indicate
the relative position of a credit within the rating category.
Plus and minus signs, however, are not used in the 'AAA', 'DDD',
'DD', or 'D' categories.
DESCRIPTION OF IBCA'S LONG-TERM RATINGS
AAA
Obligations for which there is the lowest expectation of investment risk.
Capacity for timely repayment of principal and interest is substantial,
such that adverse changes in business, economic or financial conditions are
unlikely to increase investment risk substantially.
AA
Obligations for which there is a very low expectation of investment risk.
Capacity for timely repayment of principal and interest is substantial.
Adverse changes in business, economic or financial conditions may increase
investment risk, albeit not very significantly.
A
Obligations for which there is a low expectation of investment risk.
Capacity for timely repayment of principal and interest is strong, although
adverse changes in business, economic or financial conditions may lead to
increased investment risk.
BBB
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.
A-5
<PAGE>
BB
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.
B
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.
CCC
Obligations for which there is a current perceived possibility of default.
Timely repayment of principal and interest is dependent on favorable
business, economic or financial conditions.
CC
Obligations which are highly speculative or which have a high risk of
default.
C
Obligations which are currently in default.
NOTES:
"+" or "-" may be appended to a rating to denote relative status within
major rating categories.
Ratings of BB and below are assigned where it is considered that
speculative characteristics are present.
DESCRIPTION OF THOMSON BANKWATCH'S LONG-TERM DEBT RATINGS
INVESTMENT GRADE
AAA
The highest category; indicates that the ability to repay principal and
interest on a timely basis is very high.
AA
The second-highest category; indicates a superior ability to repay
principal and interest on a timely basis, with limited incremental risk
compared to issues rated in the highest category.
A
The third-highest category; indicates 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.
BBB
The lowest investment-grade category; indicates 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.
NON-INVESTMENT GRADE
(Issues regarded as having speculative characteristics in the likelihood of
timely repayment of principal and interest.)
BB
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.
B
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.
CCC
Issues rated "CCC" clearly have a high likelihood of default, with little
capacity to address further adverse changes in financial circumstances.
A-6
<PAGE>
CC
"CC" is applied to issues that are subordinate to other obligations rated
"CCC" and are afforded less protection in the event of bankruptcy or
reorganization.
D
Default
Ratings in the Long-Term Debt categories may include a plus (+) or minus
(-) designation, which indicates where within the respective category the issue
is placed.
A-7
<PAGE>
SEI INSTITUTIONAL INVESTMENTS TRUST
Manager:
SEI Investments Management Corporation
Administrator:
SEI Fund Management
Distributor:
SEI Investments Distribution Co.
Money Managers:
1838 Investment Advisors, L.P.
Acadian Asset Management, Inc.
Alliance Capital Management L.P.
American Express Asset Management
Group Inc.
BEA Associates
BlackRock Financial Management, Inc.
Boston Partners Asset Management, L.P.
Coronation Asset Management (Proprietary)
Limited
Farrell Wako Global Investment
Management, Inc.
First of America Investment Corporation
Firstar Investment Research & Management
Company, LLC
Furman Selz Capital Management LLC
Lazard London International Investment
Management Limited
LSV Asset Management
Mellon Equity Associates
Montgomery Asset Management, LLC
Nicholas-Applegate Capital Management, Inc.
Pacific Alliance Capital Management
Parametric Portfolio Associates
Provident Investment Counsel, Inc.
Seligman Henderson Co.
Strategic Fixed Income, L.P.
Wall Street Associates
Western Asset Management Company
Yamaichi Capital Management, Inc. and
Yamaichi Capital Management
(Singapore) Limited
This STATEMENT OF ADDITIONAL INFORMATION is not a Prospectus. It is intended
to provide additional information regarding the activities and operations of the
SEI Institutional Investments Trust (the "Trust") and should be read in
conjunction with the Trust's Prospectus dated September 30, 1997. A Prospectus
may be obtained through SEI Investments Distribution Co., Oaks, Pennsylvania
19456.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
The Trust................................................................. S-3
Description of Permitted Investments...................................... S-3
Description of Ratings.................................................... S-13
Investment Limitations.................................................... S-15
The Administrator and Transfer Agent...................................... S-16
The Manager and The Money Managers........................................ S-17
Distribution.............................................................. S-18
Trustees and Officers of the Trust........................................ S-19
Performance............................................................... S-21
Purchase and Redemption of Shares......................................... S-22
Taxes..................................................................... S-23
Portfolio Transactions.................................................... S-24
Description of Shares..................................................... S-26
Limitation of Trustees' Liability......................................... S-27
Voting.................................................................... S-27
Shareholder Liability..................................................... S-27
5% Shareholders........................................................... S-28
Experts................................................................... S-28
Financial Statements...................................................... S-28
</TABLE>
September 30, 1997
S-2
<PAGE>
THE TRUST
SEI Institutional Investments Trust (the "Trust") is an open-end management
investment company that has diversified and non-diversified funds. The Trust was
organized as a Massachusetts business trust under a Declaration of Trust dated
March 1, 1995. The Declaration of Trust permits the Trust to offer separate
series ("funds") of units of beneficial interest ("shares") and different
classes of shares. Each share of each fund represents an equal proportionate
interest in that fund with each other share of that fund.
This Statement of Additional Information relates to the following funds:
Large Cap, Small Cap, Core Fixed Income, High Yield Bond, International Fixed
Income, Emerging Markets Equity and International Equity Funds (each a "Fund"
and, together, the "Funds").
DESCRIPTION OF PERMITTED INVESTMENTS
AMERICAN DEPOSITARY RECEIPTS ("ADRS"), EUROPEAN DEPOSITARY RECEIPTS ("EDRS")
AND GLOBAL DEPOSITARY RECEIPTS ("GDRS")--Holders of an unsponsored depositary
receipt generally bear all the costs of the unsponsored facility. The depositary
of an unsponsored facility frequently is under no obligation to distribute
shareholder communications received from the issuer of the deposited security or
to pass through to the holders of the receipts voting rights with respect to the
deposited securities.
ASSET-BACKED SECURITIES--securities backed by automobile receivables and
credit-card receivables and other securities backed by other types of
receivables or other assets. Credit support for asset-backed securities may be
based on the underlying assets and/or provided through credit enhancements by a
third party. Credit enhancement techniques include letters of credit, insurance
bonds, limited guarantees (which are generally provided by the issuer),
senior-subordinated structures and overcollateralization. The Core Fixed Income,
High Yield Bond and International Fixed Income Funds may invest in asset-backed
securities.
Asset-backed securities are not issued or guaranteed by the United States
Government or its agencies or instrumentalities; however, the payment of
principal and interest on such obligations may be guaranteed up to certain
amounts and for a certain period by a letter of credit issued by a financial
institution (such as a bank or insurance company) unaffiliated with the issuers
of such securities. The purchase of asset-backed securities raises risk
considerations peculiar to the financing instruments underlying such securities.
For example, there is a risk that another party could acquire an interest in the
obligations superior to that of the holders of the asset-backed securities.
There also is the possibility that recoveries on repossessed collateral may not,
in some cases, be available to support payments on those securities.
Asset-backed securities entail prepayment risk, which may vary depending on the
type of asset, but is generally less than the prepayment risk associated with
mortgage-backed securities. In addition, credit card receivables are unsecured
obligations of the card holder.
The market for asset-backed securities is at a relatively early stage of
development. Accordingly, there may be limited secondary market for such
securities.
BANKERS' ACCEPTANCES--a bill of exchange or time draft drawn on and accepted
by a commercial bank. It is used by corporations to finance the shipment and
storage of goods and to furnish dollar exchange. Maturities are generally six
months or less.
CERTIFICATES OF DEPOSIT--a negotiable interest bearing instrument with a
specific maturity. Certificates of deposit 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 have
penalties for early withdrawal.
S-3
<PAGE>
COMMERCIAL PAPER--the term used to designate unsecured short-term promissory
notes issued by corporations and other entities. Maturities on these issues vary
from a few days to nine months. (See "Description of Ratings").
EQUITY SECURITIES--Equity securities represent ownership interests in a
company or corporation and consist of common stock, preferred stock, warrants
and other rights to acquire such instruments. Equity securities may be listed on
exchanges or traded in the over-the-counter market. Investments in common stocks
are subject to market risks which may cause their prices to fluctuate over time.
The value of convertible securities is also affected by prevailing interest
rates, the credit quality of the issuer and any call provisions. Changes in the
value of fund securities will not necessarily affect cash income derived from
these securities, but will affect a Fund's net asset value.
Investments in the equity securities of small capitalization companies
involves greater risk than is customarily associated with larger, more
established companies due to the greater business risks of small size, limited
markets and financial resources, narrow product lines and the frequent lack of
depth of management. The securities of small companies are often traded
over-the-counter and may not be traded in volumes typical on a national
securities exchange. Consequently, the securities of smaller companies may have
limited market stability and may be subject to more abrupt or erratic market
movements than securities of larger, more established growth companies or the
market averages in general.
FOREIGN SECURITIES--may consist of obligations of foreign branches of U.S.
banks and foreign banks, including European Certificates of Deposit, European
Time Deposits, Canadian Time Deposits and Yankee Certificates of Deposit and
investments in Canadian Commercial Paper, foreign securities and Europaper. In
addition, a Fund may invest in American Depositary Receipts ("ADRs") traded on
registered exchanges or NASDAQ. While a Fund expects to invest primarily in
sponsored ADRs, a joint arrangement between the issuer and the depositary, some
ADRs may be unsponsored. These instruments may subject a Fund to investment
risks that differ in some respects from those related to investments in
obligations of U.S. domestic issuers. Such risks include future adverse
political and economic developments, the possible imposition of withholding
taxes on interest or other income, possible seizure, nationalization, or
expropriation of foreign deposits, the possible establishment of exchange
controls or taxation at the source, greater fluctuations in value due to changes
in the exchange rates, or the adoption of other foreign governmental
restrictions which might adversely affect the payment of principal and interest
on such obligations. Such investments may also entail higher custodial fees and
sales commissions than domestic investments. Foreign issuers of securities or
obligations are often subject to accounting treatment and engage in business
practices different from those respecting domestic issuers of similar securities
or obligations. Foreign branches of U.S. banks and foreign banks may be subject
to less stringent reserve requirements than those applicable to domestic
branches of U.S. banks.
FORWARD FOREIGN CURRENCY CONTRACTS--involve an obligation to purchase or
sell a specified currency at a future date at a price set at the time of the
contract. Forward currency contracts do not eliminate fluctuations in the values
of fund securities but rather allow a Fund to establish a rate of exchange for a
future point in time.
When entering into a contract for the purchase or sale of a security in a
foreign currency, a Fund may enter into a foreign forward currency contract for
the amount of the purchase or sale price to protect against variations, between
the date the security is purchased or sold and the date on which payment is made
or received, in the value of the foreign currency relative to the United States
Dollar or other foreign currency.
Also, when the Money Manager anticipates that a particular foreign currency
may decline substantially relative to the United States dollar or other leading
currencies, in order to reduce risk, a Fund may enter into a forward contract to
sell, for a fixed amount, the amount of foreign currency approximating the value
of its securities denominated in such foreign currency. With respect to any such
forward foreign currency contract, it generally will not be possible to match
precisely the amount covered by that contract
S-4
<PAGE>
and the value of the securities involved due to changes in the values of such
securities resulting from market movements between the date the forward contract
is entered into and the date it matures. In addition, while forward currency
contracts may offer protection from losses resulting from declines in value of a
particular foreign currency, they also limit potential gains which might result
from increases in the value of such currency. A Fund will also incur costs in
connection with forward foreign currency contracts and conversions of foreign
currencies into United States dollars. The Fund will place assets in a
segregated account to assure that its obligations under forward foreign currency
contracts are covered.
FUTURES AND OPTIONS ON FUTURES--A Fund may enter into futures contracts and
options on futures contracts traded on an exchange regulated by the Commodities
Futures Trading Commission ("CFTC"), as long as, to the extent that such
transactions are not for "bona fide hedging purposes," the aggregate initial
margin and premiums on such positions (excluding the amount by which such
options are in the money) do not exceed 5% of a Fund's net assets. A Fund may
buy and sell futures contracts and related options to manage its exposure to
changing interest rates and securities prices. Some strategies reduce a Fund's
exposure to price fluctuations, while others tend to increase its market
exposure. Futures and options on futures can be volatile instruments and involve
certain risks that could negatively impact a Fund's return.
GNMA SECURITIES--securities issued by the Government National Mortgage
Association ("GNMA"), a wholly-owned U.S. Government corporation, are guaranteed
by GNMA as to the timely payment of principal and interest. However, any
premiums paid to purchase these instruments are not subject to GNMA guarantees.
The market value and interest yield of these instruments can vary due to market
interest rate fluctuations and early prepayments of underlying mortgages. These
securities represent ownership in a pool of federally insured mortgage loans.
GNMA certificates consist of underlying mortgages with a maximum maturity of 30
years. However, due to scheduled and unscheduled principal payments, GNMA
certificates have a shorter average maturity and, therefore, less principal
volatility than a comparable 30-year bond. Since prepayment rates vary widely,
it is not possible to accurately predict the average maturity of a particular
GNMA pool. The scheduled monthly interest and principal payments relating to
mortgages in the pool will be "passed through" to investors. GNMA securities
differ from conventional bonds in that principal is paid back to the certificate
holders over the life of the loan rather than at maturity. As a result, a Fund
will receive monthly scheduled payments of principal and interest. In addition,
a Fund may receive unscheduled principal payments representing prepayments on
the underlying mortgages. Any prepayments will be reinvested at the then
prevailing interest rate.
Although GNMA certificates may offer yields higher than those available from
other types of U.S. Government securities, GNMA certificates may be less
effective than other types of securities as a means of "locking in" attractive
long-term rates because of the prepayment feature.
LOWER RATED SECURITIES--lower-rated bonds are commonly referred to as "junk
bonds" or high yield/high risk securities. These securities are rated "Baa" or
"BBB" or lower by an NRSRO. Each Fund may invest in securities rated as low as
"C" by Moody's or "D" by S&P. These ratings indicate that the obligations are
speculative and may be in default. In addition, each Fund may invest in unrated
securities subject to the restrictions stated in the Prospectus.
GROWTH OF HIGH YIELD BOND, HIGH-RISK BOND MARKET. The widespread expansion
of government, consumer and corporate debt within the U.S. economy has made the
corporate sector more vulnerable to economic downturns or increased interest
rates. Further, an economic downturn could severely disrupt the market for lower
rated bonds and adversely affect the value of outstanding bonds and the ability
of the issuers to repay principal and interest.
SENSITIVITY TO INTEREST RATE AND ECONOMIC CHANGES. Lower rated bonds are
very sensitive to adverse economic changes and corporate developments. During an
economic down turn or substantial period of rising interest rates, highly
leveraged issuers may experience financial stress that would adversely affect
their ability to service their principal and interest payment obligations, to
meet projected business goals,
S-5
<PAGE>
and to obtain additional financing. If the issuer of a bond defaulted on its
obligations to pay interest or principal or entered into bankruptcy proceedings,
a Fund may incur losses or expenses in seeking recovery of amounts owed to it.
In addition, periods of economic uncertainty and change can be expected to
result in increased volatility of market prices of high-yield, high-risk bonds
and a Fund's net asset value.
PAYMENT EXPECTATIONS. High-yield, high-risk bonds may contain redemption or
call provisions. If an issuer exercised these provisions in a declining interest
rate market, a Fund would have to replace the security with a lower yielding
security, resulting in a decreased return for investors. Conversely, a high-
yield, high-risk bond's value will decrease in a rising interest rate market, as
will the value of a Fund's assets. If a Fund experiences significant unexpected
net redemptions, this may force it to sell high-yield, high-risk bonds without
regard to their investment merits, thereby decreasing the asset base upon which
expenses can be spread and possibly reducing the Fund's rate of return.
LIQUIDITY AND VALUATION. There may be little trading in the secondary
market for particular bonds, which may affect adversely a Fund's ability to
value accurately or dispose of such bonds. Adverse publicity and investor
perception, whether or not based on fundamental analysis, may decrease the value
and liquidity of high-yield, high-risk bonds, especially in a thin market.
TAXES. A Fund may purchase debt securities (such as zero-coupon or
pay-in-kind securities) that contain original issue discount. Original issue
discount that accretes in a taxable year is treated as earned by a Fund and
therefore is subject to the distribution requirements of the Internal Revenue
Code of 1986, as amended (the "Code"). Because the original issue discount
earned by a Fund in a taxable year may not be represented by cash income, the
Fund may have to dispose of other securities and use the proceeds to make
distributions to shareholders.
MORTGAGE-BACKED SECURITIES--The Funds may invest in mortgage-backed
securities, which represent pools of mortgage loans assembled for sale to
investors by various governmental agencies such as GNMA and government-related
organizations such as Fannie Mae and the Federal Home Loan Mortgage Corporation
("FHLMC"). In addition, the High Yield Bond may invest in pools of mortgage
loans from nongovernmental issuers such as commercial banks, savings and loan
institutions, mortgage bankers, and private mortgage insurance companies.
Although certain mortgage-backed securities are guaranteed by a third party or
otherwise similarly secured, the market value of the security, which may
fluctuate, is not so secured. If a Fund purchases a mortgage-backed security at
a premium, that portion may be lost if there is a decline in the market value of
the security whether resulting from changes in interest rates or prepayments in
the underlying mortgage collateral. As with other interest-bearing securities,
the prices of such securities are inversely affected by changes in interest
rates. However, though the value of a mortgage-backed security may decline when
interest rates rise, the converse is not necessarily true since in periods of
declining interest rates the mortgages underlying the securities are prone to
prepayment. For this and other reasons, a mortgage-backed security's stated
maturity may be shortened by unscheduled prepayments on the underlying mortgages
and, therefore, it is not possible to predict accurately the security's return
to a Fund. In addition, regular payments received in respect of mortgage-backed
securities include both interest and principal. No assurance can be given as to
the return a Fund will receive when these amounts are reinvested.
A Fund may also invest in mortgage-backed securities that are collateralized
mortgage obligations structured on pools of mortgage pass-through certificates
or mortgage loans.
There are a number of important differences among the agencies and
instrumentalities of the U.S. Government that issue mortgage-backed securities
and among the securities that they issue. Mortgage-backed securities issued by
GNMA include GNMA Mortgage Pass-Through Certificates (also known as "Ginnie
Maes") which are guaranteed as to the timely payment of principal and interest
by GNMA and is backed by the full faith and credit of the United States. GNMA
certificates also are supported by the authority of GNMA to borrow funds from
the U.S. Treasury to make payments under its guarantee. Mortgage-backed
securities issued by Fannie Mae include Fannie Mae Guaranteed Mortgage Pass-
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Through Certificates (also known as "Fannie Maes") which are solely the
obligations of Fannie Mae and are not backed by or entitled to the full faith
and credit of the United States. Fannie Mae is a government-sponsored
organization owned entirely by private stockholders. Fannie Maes are guaranteed
as to timely payment of the principal and interest by Fannie Mae.
Mortgage-backed securities issued by FHLMC include FHLMC Mortgage Participation
Certificates (also known as "Freddie Macs" or "PCs"). FHLMC is a corporate
instrumentality of the United States, created pursuant to an Act of Congress,
which is owned entirely by Federal Home Loan Banks. Freddie Macs are not
guaranteed by the United States or by any Federal Home Loan Banks and do not
constitute a debt or obligation of the United States or of any Federal Home Loan
Bank. Freddie Macs entitle the holder to timely payment of interest, which is
guaranteed by FHLMC. FHLMC guarantees either ultimate collection or timely
payment of all principal payments on the underlying mortgage loans. FHLMC has in
the past guaranteed only the ultimate collection of principal of the underlying
mortgage loan; however, FHLMC now issues mortgage-backed securities (FHLMC Gold
PCs) which also guarantee timely payment of monthly principal reductions.
Government and private guarantees do not extend to the securities' value, which
is likely to vary inversely with fluctuations in interest rates. When FHLMC does
not guarantee timely payment of principal, FHLMC may remit the amount due on
account of its guarantee of ultimate payment of principal at any time after
default on an underlying mortgage, but in no event later than one year after it
becomes payable. The Core Fixed Income, High Yield Bond and International Fixed
Income Funds may, consistent with their respective investment objectives and
policies, invest in mortgage-backed securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities. The High Yield Bond Fund may
also purchase mortgage-backed securities issued by non-governmental entities as
set forth in the Prospectus.
PARALLEL PAY SECURITIES; PAC BONDS: Parallel pay CMOs and REMICS are
structured to provide payments of principal on each payment date to more than
one class. These simultaneous payments are taken into account in calculating the
stated maturity date or final distribution date of each class, which must be
retired by its stated maturity date or final distribution date, but may be
retired earlier. It is possible that payments on one class of parallel pay
security may be deferred or subordinated to payments on other classes. Planned
Amortization Class CMOs ("PAC Bonds") generally require payments of a specified
amount of principal on each payment date. PAC Bonds are always parallel pay CMOs
with the required principal payment on such securities having the highest
priority after interest has been paid to all classes.
MORTGAGE DOLLAR ROLLS--Mortgage "dollar rolls" are transactions in which
mortgage-backed securities are sold for delivery in the current month and the
seller simultaneously contracts to repurchase substantially similar securities
on a specified future date. Any difference between the sale price and the
purchase price is netted against the interest income foregone on the securities
sold to arrive at an implied borrowing rate. Alternatively, the sale and
purchase transactions can be executed at the same price, with the Fund being
paid a fee as consideration for entering into the commitment to purchase.
Mortgage dollar rolls may be renewed prior to cash settlement and initially may
involve only a firm commitment agreement by the Fund to buy a security. If the
broker-dealer to whom the Fund sells the security becomes insolvent, the Fund's
right to repurchase the security may be restricted. Other risks involved in
entering into mortgage dollar rolls include the risk that the value of the
security may change adversely over the term of the mortgage dollar roll and that
the security the Fund is required to repurchase may be worth less than the
security that the Fund originally held.
To avoid any leveraging concerns, the Fund will place U.S. Government or
other liquid securities in a segregated account in an amount sufficient to cover
its repurchase obligation.
OBLIGATIONS OF SUPRANATIONAL AGENCIES--may be purchased by the Core Fixed
Income, International Fixed Income, Emerging Markets Equity and International
Equity Funds. Currently, each Fund intends to invest only in obligations issued
or guaranteed by the Asian Development Bank, Inter-American Development Bank,
European Coal and Steel Community, European Economic Community, European
Investment Bank and the Nordic Investment Bank.
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OPTIONS--The initial purchase (sale) of an option contract is an "opening
transaction." In order to close out an option position, a Fund may enter into a
"closing transaction," which is simply the sale (purchase) of an option contract
on the same security with the same exercise price and expiration date as the
option contract originally opened. If a Fund is unable to effect a closing
purchase transaction with respect to an option it has written, it will not be
able to sell the underlying security until the option expires or the Fund
delivers the security upon exercise.
A Fund may purchase put and call options on securities to protect against a
decline in the market value of the securities in its portfolio or to anticipate
an increase in the market value of securities that the Fund may seek to purchase
in the future. A Fund purchasing put and call options pays a premium therefor.
If price movements in the underlying securities are such that exercise of the
options would not be profitable for the Fund, loss of the premium paid may be
offset by an increase in the value of the Fund's securities or by a decrease in
the cost of acquisition of securities by the Fund.
A Fund may write covered call options on securities as a means of increasing
the yield on its fund and as a means of providing limited protection against
decreases in its market value. When a Fund writes an option, if the underlying
securities do not increase or decrease to a price level that would make the
exercise of the option profitable to the holder thereof, the option generally
will expire without being exercised and the Fund will realize as profit the
premium received for such option. When a call option of which a Fund is the
writer is exercised, the Fund will be required to sell the underlying securities
to the option holder at the strike price, and will not participate in any
increase in the price of such securities above the strike price. When a put
option of which a Fund is the writer is exercised, the Fund will be required to
purchase the underlying securities at a price in excess of the market value of
such securities.
A segregated account is maintained to cover the difference between the
closing price of the index and the exercise price of the index option, expressed
in dollars multiplied by a specified number. Thus, unlike options on individual
securities, the ability of a Fund to enter into closing transactions depends
upon the existence of a liquid secondary market for such transactions.
A Fund may purchase and write options on an exchange or over-the-counter.
Over-the-counter options ("OTC options") differ from exchange-traded options in
several respects. They are transacted directly with dealers and not with a
clearing corporation, and therefore entail the risk of non-performance by the
dealer. OTC options are available for a greater variety of securities and for a
wider range of expiration dates and exercise prices than are available for
exchange-traded options. Because OTC options are not traded on an exchange,
pricing is done normally by reference to information from a market maker. It is
the position of the SEC that OTC options are generally illiquid.
PUT TRANSACTIONS--All of the Funds may purchase securities at a price which
would result in a yield to maturity lower than generally offered by the seller
at the time of purchase when a Fund can simultaneously acquire the right to sell
the securities back to the seller, the issuer or a third party (the "writer") at
an agreed-upon price at any time during a stated period or on a certain date.
Such a right is generally denoted as a "standby commitment" or a "put." The
purpose of engaging in transactions involving puts is to maintain flexibility
and liquidity to permit a Fund to meet redemptions and remain as fully invested
as possible in municipal securities. A Fund reserves the right to engage in put
transactions. The right to put the securities depends on the writer's ability to
pay for the securities at the time the put is exercised. A Fund would limit its
put transactions to institutions which the Fund's Money Managers believe present
minimum credit risks, and the Fund's Money Managers would use their best efforts
to initially determine and continue to monitor the financial strength of the
sellers of the options by evaluating their financial statements and such other
information as is available in the marketplace. It may, however, be difficult to
monitor the financial strength of the writers because adequate current financial
information may not be available. In the event that any writer is unable to
honor a put for financial reasons, a Fund would be a general creditor (I.E., on
a parity with all other unsecured creditors) of the writer. Furthermore,
particular provisions of the contract between a Fund and the writer may excuse
the writer from repurchasing the securities; for example, a change in the
published rating of the underlying municipal securities or
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any similar event that has an adverse effect on the issuer's credit or a
provision in the contract that the put will not be exercised except in certain
special cases, for example, to maintain fund liquidity. A Fund could, however,
at any time sell the underlying portfolio security in the open market or wait
until the portfolio security matures, at which time it should realize the full
par value of the security.
The securities purchased subject to a put may be sold to third persons at
any time, even though the put is outstanding, but the put itself, unless it is
an integral part of the security as originally issued, may not be marketable or
otherwise assignable. Therefore, the put would have value only to that
particular Fund. Sale of the securities to third parties or lapse of time with
the put unexercised may terminate the right to put the securities. Prior to the
expiration of any put option, a Fund could seek to negotiate terms for the
extension of such an option. If such a renewal cannot be negotiated on terms
satisfactory to the Fund, the Fund could, of course, sell the portfolio
security. The maturity of the underlying security will generally be different
from that of the put. There will be no limit to the percentage of fund
securities that a Fund may purchase subject to a put but the amount paid
directly or indirectly for puts which are not integral parts of the security as
originally issued will not exceed 1/2 of 1% of the value of the total assets of
such Fund calculated immediately after any such put is acquired. For the purpose
of determining the "maturity" of securities purchased subject to an option to
put, and for the purpose of determining the dollar-weighted average maturity of
a Fund including such securities, the Trust will consider "maturity" to be the
first date on which it has the right to demand payment from the writer of the
put although the final maturity of the security is later than such date.
RECEIPTS--interests in separately traded interest and principal component
parts of U.S. Government obligations that are issued by banks or brokerage firms
and are created by depositing U.S. Government obligations into a special account
at a custodian bank. The custodian holds the interest and principal payments for
the benefit of the registered owners of the certificates or receipts. The
custodian arranges for the issuance of the certificates or receipts evidencing
ownership and maintains the register. Receipts include "Treasury Receipts"
("TRs"), "Treasury Investment Growth Receipts" ("TIGRs"), and "Certificates of
Accrual on Treasury Securities" ("CATS"). TIGRs and CATS are interests in
private proprietary accounts while TRs and STRIPS (See "U.S. Treasury
Obligations") are interests in accounts sponsored by the U.S. Treasury. Receipts
are sold as zero coupon securities; for more information, see "Zero Coupon
Securities."
REPURCHASE AGREEMENTS--agreements under which securities are acquired from a
securities dealer or bank subject to resale on an agreed upon date and at an
agreed upon price which includes principal and interest. A Fund involved bears a
risk of loss in the event that the other party to a repurchase agreement
defaults on its obligations and the Fund is delayed or prevented from exercising
its rights to dispose of the collateral securities. A Fund's Money Managers
enter into repurchase agreements only with financial institutions that they deem
to present minimal risk of bankruptcy during the term of the agreement, based on
guidelines that are periodically reviewed by the Board of Trustees. These
guidelines currently permit each Fund to enter into repurchase agreements only
with approved banks and primary securities dealers, as recognized by the Federal
Reserve Bank of New York, which have minimum net capital of $100 million, or
with a member bank of the Federal Reserve System. Repurchase agreements are
considered to be loans collateralized by the underlying security. Repurchase
agreements entered into by a Fund will provide that the underlying security at
all times shall have a value at least equal to 102% of the price stated in the
agreement. This underlying security will be marked to market daily. A Fund's
Money Managers will monitor compliance with this requirement. Under all
repurchase agreements entered into by a Fund, the Custodian or its agent must
take possession of the underlying collateral. However, if the seller defaults, a
Fund could realize a loss on the sale of the underlying security to the extent
the proceeds of the sale are less than the resale price. In addition, even
though the Bankruptcy Code provides protection for most repurchase agreements,
if the seller should be involved in bankruptcy or insolvency proceedings, a Fund
may incur delay and costs in selling the security and may suffer a loss of
principal and interest if the Fund is treated as an unsecured creditor.
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SECURITIES LENDING--in order to generate additional income, a Fund may lend
the securities in which it is invested pursuant to agreements requiring that the
loans be continuously secured by cash, securities of the U.S. Government or its
agencies, or any combination of cash and such securities, as collateral equal to
at least the market value at all times of the loaned securities. A Fund will
continue to receive interest on the loaned securities while simultaneously
earning interest on the investment of the cash collateral in U.S. Government
securities. However, a Fund will normally pay lending fees to such
broker-dealers and related expenses from the interest earned on invested
collateral. There may be risks of delay in receiving additional collateral or
risks of delay in recovery of the securities or even loss of rights in the
collateral should the borrower of the securities fail financially. However,
loans are made only to borrowers deemed by the Fund's Money Managers to be of
good standing and when, in the judgment of the Fund's Money Managers, 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. Each Fund may use the Distributor as a broker in
these transactions.
SHORT SALES--Selling securities short involves selling securities the Fund
does not own (but has borrowed) in anticipation of a decline in the market price
of such securities. To deliver the securities to the buyer, the seller must
arrange through a broker to borrow the securities and, in so doing, the seller
becomes obligated to replace the securities borrowed at their market price at
the time of replacement. In a short sale, the proceeds the seller receives from
the sale are retained by a broker until the seller replaces the borrowed
securities. The seller may have to pay a premium to borrow the securities and
must pay any dividends or interest payable on the securities until they are
replaced.
SWAPS, CAPS, FLOORS AND COLLARS--are sophisticated hedging instruments that
typically involve a small investment of cash relative to the magnitude of risk
assumed. As a result, swaps can be highly volatile and have a considerable
impact on a Fund's performance. Swap agreements are subject to risks related to
the counterparty's ability to perform, and may decline in value if the
counterparty's creditworthiness deteriorates. A Fund may also suffer losses if
it is unable to terminate outstanding swap agreements or reduce its exposure
through offsetting transactions. Any obligation a Fund may have under these
types of arrangements will be covered by setting aside liquid, high grade
securities in a segregated account. A Fund will enter into swaps only with
counterparties believed to be creditworthy.
In a typical interest rate swap, one party agrees to make regular payments
equal to a floating interest rate times a "notional principal amount," in return
for payments equal to a fixed rate times the same amount, for a specific period
of time. Swaps may also depend on other prices or rates, such as the value of an
index or mortgage prepayment rates.
In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by the
other party.
The buyer of an interest rate cap obtains the right to receive payments to
the extent that a specific interest rate exceeds an agreed-upon level, while the
seller of an interest rate floor is obligated to make payments to the extent
that a specified interest rate falls below an agreed-upon level. An interest
rate collar combines elements of buying a cap and selling a floor.
TIME DEPOSITS--a non-negotiable receipt issued by a bank in exchange for the
deposit of funds. Like a certificate of deposit, it earns a specified rate of
interest over a definite period of time; however, it cannot be traded in the
secondary market.
Time deposits with a withdrawal penalty are considered to be illiquid
securities. The High Yield Bond, International Fixed Income, Emerging Markets
Equity and International Equity Funds may invest in time deposits.
U.S. GOVERNMENT AGENCY OBLIGATIONS--agencies of the United States Government
that issue obligations, including, among others, Export Import Bank of the
United States, Farmers Home Administration, Federal Farm Credit System, Federal
Housing Administration, Government National
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Mortgage Association, Maritime Administration, Small Business Administration and
The Tennessee Valley Authority. A Fund may purchase securities issued or
guaranteed by the GNMA which represent participations in Veterans Administration
and Federal Housing Administration backed mortgage pools.
Guarantees of principal by agencies or instrumentalities of the U.S.
Government may be a guarantee of payment at the maturity of the obligation so
that in the event of a default prior to maturity there might not be a market and
thus no means of realizing on the obligation prior to maturity. Guarantees as to
the timely payment of principal and interest do not extend to the value or yield
of these securities or to the value of a Fund's shares.
U.S. TREASURY OBLIGATIONS--bills, notes and bonds issued by the U.S.
Treasury and separately traded interest and principal component parts of such
obligations that are transferable through the Federal book-entry system known as
Separately Traded Registered Interest and Principal Securities ("STRIPS"). No
Fund may actively trade STRIPS. STRIPS are sold as zero coupon securities; for
more information, see "Zero Coupon Securities."
VARIABLE AND FLOATING RATE INSTRUMENTS--may involve a demand feature and may
include variable amount master demand notes available through the Custodian, or
otherwise. Variable or floating rate instruments bear interest at a rate which
varies with changes in market rates. The holder of an instrument with a demand
feature may tender the instrument back to the issuer at par prior to maturity. A
variable amount master demand note is issued pursuant to a written agreement
between the issuer and the holder, its amount may be increased by the holder or
decreased by the holder or issuer, it is payable on demand, and the rate of
interest varies based upon an agreed formula. The quality of the underlying
credit must, in the opinion of the Fund's managers, be equivalent to the
long-term bond or commercial paper ratings applicable to permitted investments
for each Fund. Each Fund's Money Managers will monitor on an ongoing basis the
earning power, cash flow, and liquidity ratios of the issuers of such
instruments and will similarly monitor the ability of an issuer of a demand
instrument to pay principal and interest on demand. 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.
In case of obligations which include a put feature at the option of the debt
holder, the date of the put may be used as an effective maturity date for the
purpose of determining weighted average fund maturity.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES--involve the purchase of debt
obligations on a when-issued basis, in which case delivery and payment normally
take place within 45 days after the date of commitment to purchase. The payment
obligation and the interest rate that will be received on the securities are
each fixed at the time the purchaser enters into the commitment. These
securities are subject to market fluctuation due to changes in market interest
rates, and it is possible that the market value at the time of settlement could
be higher or lower than the purchase price if the general level of interest
rates has changed. Although a Fund generally purchases securities on a
when-issued or forward commitment basis with the intention of actually acquiring
securities, a Fund may dispose of a when-issued security or forward commitment
prior to settlement if it deems it appropriate to do so. When investing in
when-issued securities, a Fund will not accrue income until delivery of the
securities and will invest in such securities only for purposes of actually
acquiring the securities and not for purposes of leveraging.
One form of when-issued or delayed-delivery security that a Portfolio may
purchase is a "to be announced" ("TBA") mortgage-backed security. A TBA
mortgage-backed security transaction arises when a mortgage-backed security,
such as a GNMA pass-through security, is purchased or sold with specific pools
that will constitute that GNMA pass-through security to be announced on a future
settlement date.
Purchasing obligations on a when-issued basis is a form of leveraging and
can involve a risk that the yields available in the market when the delivery
takes place may actually be higher than those obtained in the transaction
itself. In that case there could be an unrealized loss at the time of delivery.
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A Fund will establish a segregated account and maintain liquid assets in an
amount at least equal in value to that Fund's commitments to purchase
when-issued securities. If the value of these assets declines, the Fund involved
will place additional liquid assets in the account on a daily basis so that the
value of the assets in the account is equal to the amount of such commitments.
ZERO COUPON SECURITIES--STRIPS and receipts (TRs, TIGRs and CATS) are sold
as zero coupon securities, that is, fixed income securities that have been
stripped of their unmatured interest coupons. Zero coupon securities are sold at
a (usually substantial) discount and redeemed at face value at their maturity
date without interim cash payments of interest or principal. The amount of this
discount is accreted over the life of the security, and the accretion
constitutes the income earned on the security for both accounting and tax
purposes. Because of these features, the market prices of zero coupon securities
are generally more volatile than the market prices of securities that have
similar maturity but that pay interest periodically. Zero coupon securities are
likely to respond to a greater degree to interest rate changes than are non-zero
coupon securities with similar maturity and credit qualities.
Corporate zero coupon securities are: (i) notes or debentures which do not
pay current interest and are issued at substantial discounts from par value, or
(ii) notes or debentures that pay no current interest until a stated dated one
or more years into the future, after which the issuer is obligated to pay
interest until maturity, usually at a higher rate than if interest were payable
from the date of issuance and may also make interest payments in kind (e.g.,
with identical zero coupon securities). Such corporate zero coupon securities,
in addition to the risks identified above, are subject to the risk of the
issuer's failure to pay interest and repay principal in accordance with the
terms of the obligation. A Fund must accrete the discount or interest on
high-yield bonds structured as zero coupon securities as income even though it
does not receive a corresponding cash interest payment until the security's
maturity or payment date. A Fund may have to dispose of its securities under
disadvantageous circumstances to generate cash, or may have to leverage itself
by borrowing cash to satisfy distribution requirements. A Fund accrues income
with respect to the securities prior to the receipt of cash payments.
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DESCRIPTION OF RATINGS
DESCRIPTION OF MOODY'S SHORT-TERM RATINGS
PRIME-1 Issuers 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.
PRIME-2 Issuers rated Prime-2 (or supporting institutions) have a strong
ability for repayment of senior short-term debt obligations. This will normally
be evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
PRIME-3 Issuers rated Prime-3 (or supporting institutions) have an
acceptable ability for repayment of senior short-term obligations. The effect of
industry characteristics and market compositions may be more pronounced.
Variability in earnings and profitability may result in changes in the level of
debt protection measurements and may require relatively high financial leverage.
Adequate alternate liquidity is maintained.
NOT PRIME Issuers rated Not Prime do not fall within any of the Prime rating
categories.
STANDARD & POOR'S SHORT-TERM RATINGS
<TABLE>
<S> <C>
A-1 This highest category indicates that the degree of safety regarding timely payment is
strong. Debt determined to possess extremely strong safety characteristics is denoted
with a plus sign (+) designation.
A-2 Capacity for timely payment on issues with this designation is satisfactory. However,
the relative degree of safety is not as high as for issues designated 'A-1'.
A-3 Debt carrying this designation has an adequate capacity for timely payment. It is,
however, more vulnerable to the adverse effects of changes in circumstances than
obligations carrying the higher designations.
B Debt rated 'B' is regarded as having only speculative capacity for timely payment.
C This rating is assigned to short-term debt obligations with a doubtful capacity for
payment.
D This rating indicates that the obligation is in payment default.
</TABLE>
DESCRIPTION OF DUFF & PHELPS' SHORT-TERM RATINGS
<TABLE>
<S> <C>
Duff 1+ Highest certainty of timely payment. Short-term liquidity, including internal
operating factors and/or access to alternative sources of funds, is outstanding,
and safety is just below risk-free U.S. Treasury short-term obligations.
Duff 1 Very high certainty of timely payment. Liquidity factors are excellent and
supported by good fundamental protection factors. Risk factors are minor.
Duff 1- High certainty of timely payment. Liquidity factors are strong and supported by
good fundamental protection factors. Risk factors are very small.
</TABLE>
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<TABLE>
<S> <C>
GOOD GRADE
Duff 2 Good certainty of timely payment. Liquidity factors and company fundamentals are
sound. Although ongoing funding needs may enlarge total financing requirements,
access to capital markets is good. Risk factors are small.
SATISFACTORY GRADE
Duff 3 Satisfactory liquidity and other protection factors qualify issue as to investment
grade. Risk factors are larger and subject to more variation. Nevertheless, timely
payment is expected.
NON-INVESTMENT GRADE
Duff 4 Speculative investment characteristics. Liquidity is not sufficient to insure
against disruption in debt service. Operating factors and market access may be
subject to a high degree of variation.
DEFAULT
Duff 5 Issuer failed to meet scheduled principal and/or interest payments.
DESCRIPTION OF FITCH'S SHORT-TERM RATINGS
F-1+ Exceptionally Strong Credit Quality. Issues assigned this rating are regarded as
having the strongest degree of assurance for timely payment.
F-1 Very Strong Credit Quality. Issues assigned this rating reflect an assurance of
timely payment only slightly less in degree than issues rated 'F-1+'
F-2 Good Credit Quality. Issues assigned this rating have a satisfactory degree of
assurance for timely payment, but the margin of safety is not as great as for
issues assigned 'F-1+' and 'F-1' ratings.
F-3 Fair Credit Quality. Issues assigned this rating have characteristics suggesting
that the degree of assurance for timely payment is adequate, however, near-term
adverse changes could cause these securities to be rated below investment grade.
F-S Weak Credit Quality. Issues assigned this rating have characteristics suggesting a
minimal degree of assurance for timely payment and are vulnerable to near-term
adverse changes in financial and economic conditions.
D Default. Issues assigned this rating are in actual or imminent payment default.
LOC The symbol LOC indicates that the rating is based on a letter of credit issued by
a commercial bank.
DESCRIPTION OF IBCA'S SHORT-TERM RATINGS (UP TO 12 MONTHS)
A1+ Obligations supported by the highest capacity for timely repayment.
A1 Obligations supported by a strong capacity for timely repayment.
A2 Obligations supported by a satisfactory capacity for timely repayment, although
such capacity may be susceptible to adverse changes in business, economic, or
financial conditions.
A3 Obligations supported by an adequate capacity for timely repayment. Such capacity
is more susceptible to adverse changes in business, economic, or financial
conditions than for obligations in higher categories.
B Obligations for which the capacity for timely repayment is susceptible to adverse
changes in business, economic, or financial conditions.
C Obligations for which there is an inadequate capacity to ensure timely repayment.
D Obligations which have a high risk of default or which are currently in default.
</TABLE>
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<TABLE>
<S> <C>
DESCRIPTION OF THOMSON BANKWATCH'S SHORT-TERM RATINGS
TBW-1 The highest category; indicates a very high likelihood that principal and interest
will be paid on a timely basis.
TBW-2 The second-highest category; while the degree of safety regarding timely repayment
of principal and interest is strong, the relative degree of safety is not as high
as for issues rated "TBW-1".
TBW-3 The lowest investment-grade category; indicates that while the obligation is more
susceptible to adverse developments (both internal and external) than those with
higher ratings, the capacity to service principal and interest in a timely fashion
is considered adequate.
TBW-4 The lowest rating category; this rating is regarded as non-investment grade and
therefore speculative.
</TABLE>
INVESTMENT LIMITATIONS
FUNDAMENTAL POLICIES
The following investment limitations and the investment limitations in the
Prospectus are fundamental policies of the Trust and may not be changed without
shareholder approval.
A Fund may not:
1. Issue any class of senior security or sell any senior security of which it
is the issuer, except that a Fund may borrow from any bank, provided that
immediately after any such borrowing there is asset coverage of at least
300% for all borrowings of the Fund, and further provided that, to the
extent that such borrowings exceed 5% of a Fund's total assets, all
borrowings shall be repaid before such Fund makes additional investments.
The term "senior security" shall not include any temporary borrowings that
do not exceed 5% of the value of such Fund's total assets at the time the
Fund makes such temporary borrowing. In addition, investment strategies that
either obligate a Fund to purchase securities or require a Fund to segregate
assets will not be considered borrowings or senior securities.
2. Make loans if, as a result, more than 33 1/3% of its total assets would be
lent to other parties, except that each Fund may (i) purchase or hold debt
instruments in accordance with its investment objective and policies; (ii)
enter into repurchase agreements; and (iii) lend its securities.
3. Purchase or sell real estate, physical commodities, or commodities
contracts, except that each Fund may purchase (i) marketable securities
issued by companies which own or invest in real estate (including real
estate investment trusts), commodities, or commodities contracts, and (ii)
commodities contracts relating to financial instruments, such as financial
futures contracts and options on such contracts.
4. Act as an underwriter of securities of other issuers except as it may be
deemed an underwriter in selling a portfolio security.
5. Invest in interests in oil, gas or other mineral exploration or development
programs and oil, gas or mineral leases.
NON-FUNDAMENTAL POLICIES
The following investment limitations are non-fundamental policies of the
Trust and may be changed without shareholder approval.
A Fund may not:
1. Pledge, mortgage or hypothecate assets except to secure borrowings permitted
by the Fund's fundamental limitation on borrowing.
2. Invest in companies for the purpose of exercising control.
S-15
<PAGE>
3. Purchase securities on margin or effect short sales, except that each Fund
may (i) obtain short-term credits as necessary for the clearance of security
transactions, (ii) provide initial and variation margin payments in
connection with transactions involving futures contracts and options on such
contracts, and (iii) make short sales "against the box" or in compliance
with the SEC's position regarding the asset segregation requirements of
section 18 of the 1940 Act.
4. Invest its assets in securities of any investment company, except as
permitted by the 1940 Act.
5. Purchase or hold illiquid securities, I.E., securities that cannot be
disposed of for their approximate carrying value in seven days or less
(which term includes repurchase agreements and time deposits maturing in
more than seven days) if, in the aggregate, more than 15% of its net assets
would be invested in illiquid securities.
6. Purchase securities which are not readily marketable if, in the aggregate,
more than 15% of its total assets would be invested in such securities.
THE ADMINISTRATOR AND TRANSFER AGENT
The Administration Agreement provides that the Administrator, SEI Fund
Management ("SEI Management" or 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 SEI Management in the performance of its duties or from reckless
disregard of its duties and obligations thereunder.
The continuance of the Administration Agreement must be specifically
approved at least annually (i) by the vote of a majority of the Trustees or by
the vote of a majority of the outstanding voting securities of the Fund, and
(ii) by the vote of a majority of the Trustees of the Trust who are not parties
to the Administration Agreement or an "interested person" (as that term is
defined in the 1940 Act) of any party thereto, cast in person at a meeting
called for the purpose of voting on such approval. The Administration Agreement
is terminable at any time as to any Fund without penalty by the Trustees of the
Trust, by a vote of a majority of the outstanding shares of the Fund or by SEI
Management on not less than 30 days' nor more than 60 days' written notice. This
Agreement shall not be assignable by either party without the written consent of
the other party.
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 to the following other mutual funds: The Achievement Funds
Trust, The Advisors' Inner Circle Fund, The Arbor Fund, ARK Funds, Bishop Street
Funds, Boston 1784 Funds-Registered Trademark-, CoreFunds, Inc., CrestFunds,
Inc., CUFUND, The Expedition Funds, FMB Funds, Inc., First American Funds, Inc.,
First American Investment Funds, Inc., First American Strategy Funds, Inc.,
HighMark Funds, Marquis Funds-Registered Trademark-, Monitor Funds, Morgan
Grenfell Investment Trust, The PBHG Funds, Inc., PBHG Insurance Series Fund,
Inc., The Pillar Funds, Profit Funds Investment Trust, Rembrandt
Funds-Registered Trademark-, Santa Barbara Group of Mutual Funds, Inc., SEI
Asset Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI
Institutional Managed Trust, SEI International Trust, SEI Liquid Asset Trust,
SEI Tax Exempt Trust, STI Classic Funds, STI Classic Variable Trust, and TIP
Funds.
If operating expenses of any Fund exceed applicable limitations, SEI
Management will pay such excess. SEI Management will not be required to bear
expenses of any Fund to an extent which would result in the Fund's inability to
qualify as a regulated investment company under provisions of the Internal
Revenue Code of 1986, as amended (the "Code"). The term "expenses" is defined in
such laws or
S-16
<PAGE>
regulations, and generally excludes brokerage commissions, distribution
expenses, taxes, interest and extraordinary expenses.
For the fiscal year ended May 31, 1997, the Funds paid fees to SEI
Management as follows:
<TABLE>
<CAPTION>
FUND
- --------------------------------------------------------------------------------
FEES PAID FEES
(REIMBURSED) (000) WAIVED (000)
--------------------- ---------------
1997 1997
--------------------- ---------------
<S> <C> <C>
Large Cap Fund.................................................................. $ 56 $ 84
Small Cap Fund.................................................................. $ 15 $ 23
Core Fixed Income Fund.......................................................... $ 27 $ 67
High Yield Bond Fund............................................................ * *
International Fixed Income Fund................................................. * *
Emerging Markets Equity Fund.................................................... * *
International Equity Fund....................................................... $ 72 $ 75
</TABLE>
- ------------------------
*Not in operation during such period.
THE MANAGER AND THE MONEY MANAGERS
The Manager Agreement and certain of the Money Manager Agreements provide
that SEI Investments Management Corporation ("SIMC" or the "Manager")(or any
Money Manager) 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. In addition, certain of the Money Manager
Agreements provide that the Money Manager shall not be protected against any
liability to the Trust or its shareholders by reason of willful misfeasance, bad
faith or negligence on its part in the performance of its duties, or from
reckless disregard of its obligations or duties thereunder.
The continuance of each Manager and Money Manager Agreement must be
specifically approved at least annually (i) by the vote of a majority of the
outstanding shares of that Fund or by the Trustees, and (ii) by the vote of a
majority of the Trustees who are not parties to such Agreement or "interested
persons" of any party thereto, cast in person at a meeting called for the
purpose of voting on such approval. Each Money Manager 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 a Fund, by a
majority of the outstanding shares of that Fund, on not less than 30 days' nor
more than 60 days' written notice to the Manager or Money Manager, or by the
Manager or Money Manager on 90 days' written notice to the Trust.
SIMC and the Trust have obtained an exemptive order from the SEC that
permits SIMC, with the approval of the Trust's Board of Trustees, to retain
unaffiliated Money Managers for a Fund without submitting the Money Manager
agreement to a vote of the Fund's shareholders. The exemptive relief permits the
non-disclosure of amounts payable by SIMC under such Money Manager agreements.
The Trust will notify shareholders in the event of any change in the identity of
the Money Manager for a Fund.
S-17
<PAGE>
For the fiscal year ended May 31, 1997, the Funds paid SIMC fees as follows:
<TABLE>
<CAPTION>
FUND
- -------------------------------------------------------------------------------
FEES PAID (000) FEE WAIVERS (000)
--------------- -------------------
1997 1997
--------------- -------------------
<S> <C> <C>
Large Cap Fund................................................................. $ 678 $ 439
Small Cap Fund................................................................. $ 367 $ 121
Core Fixed Income Fund......................................................... $ 231 $ 335
High Yield Bond Fund........................................................... * *
International Fixed Income Fund................................................ * *
Emerging Markets Equity Fund................................................... * *
International Equity Fund...................................................... $ 1,028 $ 471
</TABLE>
- ------------------------
*Not in operation during such period.
For the fiscal year ended May 31, 1997, SIMC paid the Money Managers as
follows:
<TABLE>
<CAPTION>
FUND
- -------------------------------------------------------------------------------
FEES PAID (000) FEE WAIVERS (000)
----------------- -------------------
1997 1997
----------------- -------------------
<S> <C> <C>
Large Cap Fund................................................................. $ 595 $ 0
Small Cap Fund................................................................. $ 348 $ 0
Core Fixed Income Fund......................................................... $ 221 $ 0
High Yield Bond Fund........................................................... * *
International Fixed Income Fund................................................ * *
Emerging Markets Equity Fund................................................... * *
International Equity Fund...................................................... $ 816 $ 0
</TABLE>
- ------------------------
*Not in operation during such period.
DISTRIBUTION
The Distributor, a wholly-owned subsidiary of SEI, and the Trust are parties
to a distribution agreement ("Distribution Agreement"). 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 Fund on not less than sixty
days' notice by the Trust's Trustees, by vote of a majority of the outstanding
shares of such Fund or by the Distributor. The Distributor will receive no
compensation for the distribution of Fund shares.
Although banking laws and regulations prohibit banks from distributing
shares of open-end investment companies such as the Trust, according to an
opinion issued to the staff of the SEC by the Office of the Comptroller of the
Currency, financial institutions are not prohibited from acting in other
capacities for investment companies, such as providing shareholder services.
Should future legislative, judicial or administrative action prohibit or
restrict the activities of financial institutions in connection with providing
shareholder services, the Trust may be required to alter materially or
discontinue its arrangements with such financial institutions.
S-18
<PAGE>
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, The Arbor Fund,
ARK Funds, Bishop Street Funds, Boston 1784 Funds-Registered Trademark-,
CoreFunds, Inc., CrestFunds, Inc., CUFUND, The Expedition Funds, FMB Funds,
Inc., First American Funds, Inc., First American Investment Funds, Inc., First
American Strategy Funds, Inc., HighMark Funds, Marquis
Funds-Registered Trademark-, Monitor Funds, Morgan Grenfell Investment Trust,
The PBHG Funds, Inc., PBHG Insurance Series Fund, Inc., The Pillar Funds, Profit
Funds Investment Trust, Rembrandt Funds-Registered Trademark-, Santa Barbara
Group of Mutual Funds, Inc., SEI Asset Allocation Trust, SEI Daily Income Trust,
SEI Index Funds, SEI Institutional Managed Trust, SEI International 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 Fund Management or its affiliates and, except for Profit
Funds Investment Trust, Rembrandt Funds-Registered Trademark-, and Santa Barbara
Group of Mutual Funds, Inc., are distributed by SEI Investments Distribution Co.
ROBERT A. NESHER (DOB 08/17/46)--Chairman of the Board of Trustees*--Retired
since 1994. Executive Vice President of SEI Investments, 1986-1994. Director and
Executive Vice President of the Manager, Administrator and the Distributor,
1981-1994. Trustee of the Arbor Fund, Marquis Funds-Registered Trademark-, The
Advisors' Inner Circle Fund, The Expedition Funds, SEI Asset Allocation Trust,
SEI Daily Income Trust, SEI Index Funds, SEI Liquid Asset Trust, SEI
Institutional Managed Trust, SEI International Trust, SEI Tax Exempt Trust,
Boston 1784 Funds-Registered Trademark-, Pillar Funds, and Rembrandt
Funds-Registered Trademark-.
WILLIAM M. DORAN (DOB 05/26/40)--Trustee*--2000 One Logan Square,
Philadelphia, PA 19103. Partner, Morgan, Lewis & Bockius LLP (law firm), counsel
to the Trust, Manager and Distributor, Director and Secretary of SEI Investments
and Secretary of the Manager, Administrator and Distributor. Trustee of The
Arbor Fund, Marquis Funds-Registered Trademark-, The Advisors' Inner Circle
Fund, The Expedition Funds, SEI Asset Allocation Trust, SEI Daily Income Trust,
SEI Index Funds, SEI Liquid Asset Trust, SEI Institutional Managed Trust, SEI
International Trust, and SEI Tax Exempt Trust.
F. WENDELL GOOCH (DOB 12/03/32)--Trustee**--P.O. Box 190, Paoli, IN 47454,
President, Orange County Publishing Co., Inc. since October 1981. Retired;
Publisher of the Paoli News and the Paoli Republican and Editor of the Paoli
Republican from January 1981 to 1997. President, H&W Distribution, Inc., since
July 1984. Executive Vice President, Trust Department, Harris Trust and Savings
Bank and Chairman of the Board of Directors of The Harris Trust Company of
Arizona before January 1981. Trustee of STI Classic Funds, SEI Asset Allocation
Trust, SEI Daily Income Trust, SEI Index Funds, SEI Liquid Asset Trust, SEI
Institutional Managed Trust, SEI International Trust, and SEI Tax Exempt Trust.
FRANK E. MORRIS (DOB 12/30/23)--Trustee**--105 Walpole Street, Dover, MA
02030. Retired since 1990. Peter Drucker Professor of Management, Boston
College, 1989-1990. President, Federal Reserve Bank of Boston, 1968-1988.
Trustee of The Arbor Fund, Marquis Funds-Registered Trademark-, The Advisors'
Inner Circle Fund, SEI Asset Allocation Trust, SEI Daily Income Trust, SEI Index
Funds, SEI Liquid Asset Trust, SEI Institutional Managed Trust, SEI
International Trust, and SEI Tax Exempt Trust.
JAMES M. STOREY (DOB 04/12/31)--Trustee**--Retired; Partner, Dechert Price &
Rhoads, from September 1987-December 1993; Trustee of The Arbor Fund, Marquis
Funds-Registered Trademark-, The Advisors' Inner Circle Fund, The Expedition
Funds, SEI Asset Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI
Liquid Asset Trust, SEI Institutional Managed Trust, SEI International Trust,
and SEI Tax Exempt Trust.
GEORGE J. SULLIVAN, JR. (DOB 11/13/42)--Trustee**--General Partner, Teton
Partners, L.P., since 1991; Chief Financial Officer, Noble Partners, L.P., since
1991; Treasurer and Clerk, Peak Asset Management, Inc., since 1991; Trustee,
Navigator Securities Lending Trust, since 1995. Trustee of SEI Asset
S-19
<PAGE>
Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI Liquid Asset
Trust, SEI Institutional Managed Trust, SEI International Trust, and SEI Tax
Exempt Trust.
DAVID G. LEE (DOB 04/16/52)--President and Chief Executive Officer--Senior
Vice President of the Manager and Distributor since 1993. Vice President of the
Manager, Administrator and Distributor, 1991-1993. President, GW Sierra Trust
Funds before 1991.
SANDRA K. ORLOW (DOB 10/18/53)--Vice President and Assistant Secretary--Vice
President and Assistant Secretary of the Manager, Administrator and Distributor
since 1988.
KEVIN P. ROBINS (DOB 04/15/61)--Vice President and Assistant
Secretary--Senior Vice President, General Counsel and Assistant Secretary of SEI
Investments, Senior Vice President, General Counsel and Secretary of the
Manager, the Administrator and Distibutor since 1994. Vice President and
Assistant Secretary of SEI Investments, the Manager, Administrator and
Distributor, 1992-1994. Associate, Morgan, Lewis & Bockius LLP (law firm),
1988-1992.
RICHARD W. GRANT (DOB 10/25/45)--Secretary--2000 One Logan Square,
Philadelphia, PA 19103, Partner, Morgan, Lewis & Bockius LLP (law firm), counsel
to the Trust, SEI Investments, the Manager, Administrator and Distributor.
KATHRYN L. STANTON (DOB 11/19/58)--Vice President and Assistant
Secretary--Vice President, Deputy General Counsel, Vice President and Assistant
Secretary of SEI Investments, the Manager, Administrator and Distributor since
1994. General Counsel, Investment Systems and Services, since 1997. Associate,
Morgan, Lewis & Bockius, LLP (law firm), 1989-1994.
MARK E. NAGLE (DOB 10/20/59)--Controller and Chief Financial Officer--Vice
President of Fund Accounting and Administration for SEI Fund Resources and the
Administrator since 1996. Vice President of Fund Accounting, BISYS Fund Services
1995-1996. Senior Vice President and Site Manager, Fidelity Investments
(1981-1995).
TODD B. CIPPERMAN (DOB 02/14/66)--Vice President and Assistant
Secretary--Vice President and Assistant Secretary of SEI Investments, the
Manager, Administrator and the Distributor since 1995. Associate, Dewey
Ballantine (law firm) (1994-1995). Associate, Winston & Strawn (law firm)
(1994-1995). Associate, Winston & Strawn (law firm) (1991-1994).
BARBARA A. NUGENT (DOB 06/18/56)--Vice President and Assistant
Secretary--Vice President and Assistant Secretary of SEI Investments, the
Manager, Administrator and Distributor since 1996. Associate, Drinker, Biddle &
Reath (law firm). Assistant Vice President/Administration, Delaware Service
Company, Inc. (1992-1993), Assistant Vice President--Operations, Delaware
Service Company, Inc. (1988-1992).
MARC H. CAHN (DOB 06/19/57)--Vice President and Assistant Secretary--Vice
President and Assistant Secretary of SEI Investments, the Manager, Administrator
and Distributor since 1996. Associate General Counsel, Barclays Bank PLC
(1995-1996). ERISA counsel, First Fidelity Bancorporation (1994-1995),
Associate, Morgan, Lewis & Bockius LLP (1989-1994).
- ------------------------
* Messrs. Nesher and Doran are Trustees who may be deemed to be "interested
persons" of the Trust as the term is defined in the 1940 Act.
** Messrs. Gooch, Morris, Sullivan and Storey serve as members of the Audit
Committee of the Trust.
The Trustees and officers of the Trust own, as a group, less than 1% of the
outstanding shares of the Trust.
S-20
<PAGE>
Compensation of officers and affiliated Trustees of the Trust is paid by SEI
Management. The Trust pays the fees for unaffiliated Trustees. For the fiscal
year ended May 31, 1997, the Trust paid the following amounts to the Trustees.
<TABLE>
<CAPTION>
AGGREGATE PENSION OR TOTAL COMPENSATION FROM
COMPENSATION RETIREMENT BENEFITS ESTIMATED REGISTRANT AND TRUST
FROM REGISTRANT ACCRUED AS ANNUAL COMPLEX PAID TO TRUSTEES
NAME OF FOR FISCAL YEAR PART OF BENEFITS UPON FOR
PERSON, POSITION ENDED 5/31/97 FUND EXPENSES RETIREMENT FISCAL YEAR ENDED 5/31/97
- ----------------------------------- ----------------- ----------------------- -------------- --------------------------
<S> <C> <C> <C> <C>
F. Wendell Gooch, Trustee.......... $ 10,718 $ 0 $ 0 $92,258 for services on 8
boards
Frank E. Morris, Trustee........... $ 10,718 $ 0 $ 0 $92,258 for services on 8
boards
James M. Storey*, Trustee.......... $ 10,718 $ 0 $ 0 $92,258 for services on 8
boards
Robert A. Nesher, Trustee.......... $ 0 $ 0 $ 0 $0 for services on 8
boards
William M. Doran, Trustee.......... $ 0 $ 0 $ 0 $0 for services on 8
boards
George J. Sullivan, Trustee........ $ 10,718 $92,258 for services on 8
boards
</TABLE>
- ------------------------
* Mr. Storey received a portion of such amount as compensation for service as an
Honorary Trustee for the Trust prior to being elected as a Trustee on August
14, 1996.
Mr. Edward W. Binshadler is a Trustee Emeritus of the Trust. Mr. Binshadler
serves as a consultant to the Audit Committee and receives as compensation,
$5,000 per Audit Committee meeting attended.
PERFORMANCE
From time to time, each Fund may advertise yield and/or total return. These
figures will be based on historical earnings and are not intended to indicate
future performance. The yield of a Fund refers to the annualized income
generated by an investment in such Fund over a specified 30-day period. The
yield is calculated by assuming that the income generated by the investment
during that period generated each period over one year and is shown as a
percentage of the investment. In particular, yield will be calculated according
to the following formula:
Yield = 2[(((a-b)/cd) + 1)(6)-1], where a = dividends and interest
earned during the period; b = expenses accrued for the period (net
of reimbursement); c = the current daily number of shares
outstanding during the period that were entitled to receive
dividends; and d = the maximum offering price per share on the
last day of the period.
Actual yield will depend on such variables as asset quality, average asset
maturity, the type of instruments a Fund invests in, changes in interest rates
on money market instruments, changes in the expenses of the Fund and other
factors. For the 30-day period ending May 31, 1997, the yields for the Large
Cap, Small Cap and Core Fixed Income Funds were 1.58%, 0.82% and 6.43%,
respectively.
The total return of a Fund 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 Fund 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)(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.
S-21
<PAGE>
Based on the foregoing, the average annual total return for the Funds from
inception through May 31, 1997 were as follows:
<TABLE>
<CAPTION>
AVERAGE ANNUAL
TOTAL RETURN
FUND SINCE INCEPTION
- ---------------------------------------------------------------------------------------- ---------------
<S> <C>
Large Cap Fund.......................................................................... 28.22%
Small Cap Fund.......................................................................... 9.18%
Core Fixed Income Fund.................................................................. 8.28%
High Yield Bond Fund.................................................................... *
International Fixed Income Fund......................................................... *
Emerging Markets Equity Fund............................................................ *
International Equity Fund............................................................... 7.56%
</TABLE>
- ------------------------
* Not in operation during such period.
The Funds 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.
From time to time the Trust may include the names of clients of the Money
Managers in advertisements and/or sales literature for the Trust.
PURCHASE AND REDEMPTION OF SHARES
The purchase and redemption price of shares is the net asset value of each
share. A Fund's securities are valued by SEI Management pursuant to valuations
provided by an independent pricing service (generally the last quoted sale
price). Fund securities listed on a securities exchange for which market
quotations are available are valued at the last quoted sale price on each
Business Day (defined as days on which the New York Stock Exchange is open for
business ("Business Day")) or, if there is no such reported sale, at the most
recently quoted bid price. Unlisted securities for which market quotations are
readily available are valued at the most recently quoted bid price. The pricing
service may also use a matrix system to determine valuations. This system
considers such factors as security prices, yields, maturities, call features,
ratings and developments relating to specific securities in arriving at
valuations. The procedures of the pricing service and its valuations are
reviewed by the officers of the Trust under the general supervision of the
Trustees.
It is currently the Trust's policy to pay all redemptions in cash. The Trust
retains the right, however, to alter this policy to provide for redemptions in
whole or in part by a distribution in kind of readily marketable securities held
by a Fund in lieu of cash. Shareholders may incur brokerage charges on the sale
of any such securities so received in payment of redemptions. However, a
shareholder will at all times be entitled to aggregate cash redemptions from all
Funds of the Trust during any 90-day period of up to the lesser of $250,000 or
1% of the Trust's net assets.
A gain or loss for federal income tax purposes may be realized by a taxable
shareholder upon an in-kind redemption depending upon the shareholder's basis in
the shares of the Trust redeemed.
The Trust reserves the right to suspend the right of redemption and/or to
postpone the date of payment upon redemption for any period during which trading
on the New York Stock Exchange is restricted, or during the existence of an
emergency (as determined by the SEC by rule or regulation) as a result of which
disposal or evaluation of the fund securities is not reasonably practicable, or
for such other periods as the SEC may by order permit. The Trust also reserves
the right to suspend sales of shares of the Funds for any period during which
the New York Stock Exchange, the Manager, the Administrator, the Distributor,
the Money Managers and/or the Custodian are not open for business. Currently,
the following
S-22
<PAGE>
holidays are observed by the Trust: New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.
The securities may be traded on foreign markets on days other than Business
Days or the net asset value of a Fund may be computed on days when such foreign
markets are closed. In addition, foreign markets may close at times other than
4:00 p.m. Eastern time. As a consequence, the net asset value of a share of a
Fund may not reflect all events that may affect the value of the Fund's foreign
securities unless the Money Managers determine that such events materially
affect net asset value in which case net asset value will be determined by
consideration of other factors.
TAXES
The following is only a summary of certain additional federal tax
considerations generally affecting the Funds and their shareholders that are not
described in the Funds' Prospectus. No attempt is made to present a detailed
explanation of the federal, state or local tax treatment of the Funds or their
shareholders and the discussion here and in the Funds' Prospectus is not
intended as a substitute for careful tax planning.
This discussion of 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.
Each Fund is treated as a separate entity for federal income tax purposes
and is not combined with the Trust's other Funds. Each Fund intends to qualify
as a regulated investment company ("RIC") under Subchapter M of the Code so that
it will be relieved of federal income tax on that part of its income that is
distributed to shareholders. In order to qualify for treatment as a RIC, a Fund
must distribute annually to its shareholders at least 90% of its investment
company taxable income (generally, net investment income plus the excess, if
any, of net short-term capital gain over net long-term capital losses)
("Distribution Requirement") and also must meet several additional requirements.
Among these requirements are the following: (i) at least 90% of a Fund's gross
income each taxable year must be derived from dividends, interest, payments with
respect to securities loans, and gains from the sale or other disposition of
stock, securities or foreign currencies, or other income derived with respect to
its business of investing in such stock or securities or currencies; (ii) at the
close of each quarter of a Fund's taxable year, at least 50% of the value of its
total assets must be represented by cash and cash items, U.S. government
securities, securities of other RICs and other securities, with such other
securities limited, in respect of any one issuer, to an amount that does not
exceed 5% of the value of a Fund's assets and that does not represent more than
10% of the outstanding voting securities of such issuer; and (iii) at the close
of each quarter of a Fund's taxable year, not more than 25% of the value of its
assets may be invested in securities (other than U.S. government securities or
the securities of other RICs) of any one issuer or of two or more issuers which
the Fund controls and which are engaged in the same, similar, or related trades
or businesses.
Notwithstanding the Distribution Requirement described above, which only
requires a Fund to distribute at least 90% of its annual investment company
taxable income and does not require any minimum distribution of net capital
gain, a Fund will be subject to a nondeductible 4% federal excise tax to the
extent it fails to distribute by the end of any calendar year at least 98% of
its ordinary income for that year and 98% of its capital gain net income (the
excess of short- and long-term capital gain over short- and long-term capital
loss) for the one-year period ending on October 31 of that year, plus certain
other amounts. Each Fund intends to make sufficient distributions to avoid
liability for the federal excise tax. A Fund may in certain circumstances be
required to liquidate Fund investments in order to make sufficient distributions
to avoid federal excise tax liability at a time when the investment advisor
might not otherwise have chosen to do so, and liquidation of investments in such
circumstances may affect the ability of a Fund to satisfy the requirements for
qualification as a RIC.
S-23
<PAGE>
Any gain or loss recognized on a sale, exchange or redemption of shares of a
Fund by a shareholder who is not a dealer in securities will generally, for
individual shareholders, be treated as a long-term capital gain or loss if the
shares have been held for more than eighteen months, mid-term capital gain if
the shares are held for more than twelve but not more than eighteen months, and
otherwise will be treated as a short-term capital gain or loss. However, if
shares on which a shareholder has received a net capital gain distribution are
subsequently sold, exchanged or redeemed and such shares have been held for six
months or less, any loss recognized will be treated as a long-term capital loss
to the extent of the net capital gain distribution.
Long-term capital gains are currently taxed at a maximum rate of 20%,
mid-term capital gains are currently taxed at a maximum rate of 28%, and
short-term capital gains are currently taxed at ordinary income tax rates.
If a Fund fails to qualify as a RIC for any year, all of its income will be
subject to federal income tax at corporate rates, and its distributions
(including capital gain distributions) generally will be taxable as ordinary
income dividends to its shareholders, subject to the dividends received
deduction for eligible corporate shareholders.
A Fund will be required in certain cases to withhold and remit to the United
States Treasury 31% of amounts payable to any shareholder who (1) has provided
the Fund either an incorrect tax identification number or no number at all, (2)
who is subject to backup withholding by the Internal Revenue Service for failure
to properly report payments of interest or dividends, or (3) who has failed to
certify to the Fund that such shareholder is not subject to backup withholding.
Dividends and interest received by a Fund may be subject to income,
withholding or other taxes imposed by foreign countries and United States
possessions that would reduce the yield on a Fund's securities. Tax conventions
between certain countries and the United States may reduce or eliminate these
taxes. Foreign countries generally do not impose taxes on capital gains with
respect to investments by foreign investors. If more than 50% of the value of a
Fund's total assets at the close of its taxable year consists of securities of
foreign corporations, a Fund will be eligible to, and will, file an election
with the Internal Revenue Service that will enable shareholders, in effect, to
receive the benefit of the foreign tax credit with respect to any foreign and
United States possessions income taxes paid by a Fund. Pursuant to the election,
a Fund will treat those taxes as dividends paid to its shareholders. Each
shareholder will be required to include a proportionate share of those taxes in
gross income as income received from a foreign source and must treat the amount
so included as if the shareholder had paid the foreign tax directly. The
shareholder may then either deduct the taxes deemed paid by him or her in
computing his or her taxable income or, alternatively, use the foregoing
information in calculating the foreign tax credit (subject to significant
limitations) against the shareholder's federal income tax. If a Fund makes the
election, it will report annually to its shareholders the respective amounts per
share of the Fund's income from sources within, and taxes paid to, foreign
countries and United States possessions.
STATE TAXES
A Fund is not liable for any income or franchise tax in Massachusetts if it
qualifies as a RIC for federal income tax purposes. Distributions by a Fund to
shareholders and the ownership of shares may be subject to state and local
taxes. Shareholders should consult their own tax advisers regarding the affect
of federal, state and local taxes in their own individual circumstances.
PORTFOLIO TRANSACTIONS
Money Managers make decisions to buy or sell securities independently from
one another. Thus, one Money Manager could sell a security at approximately the
same time another Money Manager for the same Fund is purchasing the same type of
security. In addition, when a Money Manager's services are
S-24
<PAGE>
terminated and/or a new Money Manager is retained, the new Money Manager may
significantly restructure the Fund's portfolio. These practices may increase the
Funds' portfolio turnover rates, realization of gains or losses, brokerage
commissions and other transaction based costs.
The Trust has no obligation to deal with any dealer or group of dealers in
the execution of transactions in fund securities. Subject to policies
established by the Trustees, the Money Managers are responsible for placing
orders to execute Fund transactions. In placing orders, it is the Trust's policy
to seek to obtain the best net results taking into account such factors as price
(including the applicable dealer spread), 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 Money
Managers generally seek reasonably competitive spreads or commissions, the Trust
will not necessarily be paying the lowest spread or commission available. The
Trust will not purchase fund securities from any affiliated person acting as
principal except in conformity with the regulations of the SEC.
The money market securities in which a Fund invests are traded primarily in
the over-the-counter market. Bonds and debentures are usually traded
over-the-counter, but may be traded on an exchange. Where possible, the Money
Managers will deal directly with the dealers who make a market in the securities
involved except in those circumstances where better prices and execution are
available elsewhere. Such dealers usually are acting as principal for their own
account. On occasion, securities may be purchased directly from the issuer.
Money market securities are generally traded on a net basis and do not normally
involve either brokerage commissions or transfer taxes. The cost of executing
fund securities transactions of a Fund will primarily consist of dealer spreads
and underwriting commissions.
It is expected that the Funds may execute brokerage or other agency
transactions through the Distributor, a registered broker-dealer, for a
commission, in conformity with the 1940 Act, the Securities Exchange Act of
1934, as amended, and rules of the SEC. Under these provisions, the Distributor
is permitted to receive and retain compensation for effecting fund transactions
for a Fund on an exchange. These provisions further require that commissions
paid to the Distributor by the Trust for exchange transactions not exceed "usual
and customary" brokerage commissions. The rules define "usual and customary"
commissions to include amounts which are "reasonable and fair compared to the
commission, fee or other remuneration received or to be received by other
brokers in connection with comparable transactions involving similar securities
being purchased or sold on a securities exchange during a comparable period of
time." In addition, a Fund may direct commission business to one or more
designated broker-dealers, including the Distributor, in connection with such
broker-dealer's payment of certain of the Fund's expenses. 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.
Since the Trust does not market its shares through intermediary brokers or
dealers, it is not the Trust's practice to allocate brokerage or principal
business on the basis of sales of its shares which may be made through such
firms. However, the Fund's Money Managers may place fund orders with qualified
broker-dealers who recommend the Trust to clients, and may, when a number of
brokers and dealers can provide best price and execution on a particular
transaction, consider such recommendations by a broker or dealer in selecting
among broker-dealers.
The Trust does not expect to use one particular dealer, but a Fund's Money
Managers may, consistent with the interests of the Fund, select brokers on the
basis of the research services they provide to the Fund's Money Managers. Such
services may include analysis of the business or prospects of a company,
industry or economic sector or statistical and pricing services. Information so
received by the Money Manager will be in addition to and not in lieu of the
services required to be performed by a Fund's Money Managers under the Advisory
and/or Sub-Advisory Agreements. If in the judgement of a Fund's Money Managers
the Funds, or other accounts managed by the Fund's Money Managers, will be
benefitted by supplemental research services, the Fund's Money Managers are
authorized to pay brokerage commissions to a broker furnishing such services
which are in excess of commissions which another broker may have
S-25
<PAGE>
charged for effecting the same transaction. The expenses of a Fund's Money
Managers will not necessarily be reduced as a result of the receipt of such
supplemental information.
In connection with transactions effected for Funds operating within the
"Manager of Managers" structure, under this policy, SIMC and the various firms
that serve as money managers to certain Funds of the Trust, in the exercise of
joint investment discretion over the assets of a Fund, may direct a portion of a
Fund's brokerage to the Distributor. All such transactions directed to the
Distributor must be accomplished in a manner that is consistent with the Trust's
policy to achieve best net results, and must comply with the Trust's procedures
regarding the execution of transactions through affiliated brokers.
For the fiscal year ended May 31, 1997, the Funds paid the following
brokerage fees:
<TABLE>
<CAPTION>
% OF TOTAL
TOTAL $ AMOUNT TOTAL $ AMOUNT % OF TOTAL BROKERED
OF BROKERAGE OF BROKERAGE BROKERAGE TRANSACTIONS TOTAL $ AMOUNT
COMMISSION COMMISSIONS COMMISSIONS EFFECTED THROUGH OF BROKERED
PAID IN 1997 PAID TO AFFILIATES PAID TO AFFILIATES AFFILIATES TRANSACTIONS
FUND (000) IN 1997 (000) IN 1997 IN 1997 IN 1997
- -------------------------------- -------------- ------------------ ------------------- ----------------- --------------
<S> <C> <C> <C> <C> <C>
Large Cap Fund.................. $ 532 $0 0% 0% $717,375
Small Cap Fund.................. $ 281 $0 0% 0% $197,196
Core Fixed Income Fund.......... $ 5 $0 0% 0% $ 55,236
High Yield Bond Fund............ * * * * *
International
Fixed Income Fund.............. * * * * *
Emerging Markets Equity Fund.... * * * * *
International Equity Fund....... $1,818 $0 0% 0% $893,767
<CAPTION>
TOTAL BROKERAGE
COMMISSIONS
PAID TO THE DISTRIBUTOR
IN CONNECTION WITH
REPURCHASE AGREEMENT
FUND TRANSACTIONS IN 1997
- -------------------------------- -----------------------
<S> <C>
Large Cap Fund.................. $0
Small Cap Fund.................. $0
Core Fixed Income Fund.......... $0
High Yield Bond Fund............ *
International
Fixed Income Fund.............. *
Emerging Markets Equity Fund.... *
International Equity Fund....... $0
</TABLE>
- ------------------------------
* Not in operation during such period.
The portfolio turnover rate for each Fund for the fiscal year ended May 31,
1997 was as follows:
<TABLE>
<CAPTION>
TURNOVER RATE
FUND 1997
- ------------------------------------------------------------------------------- -------------
<S> <C>
Large Cap Fund................................................................. 71%
Small Cap Fund................................................................. 163%
Core Fixed Income Fund......................................................... 194%
High Yield Bond Fund........................................................... *
International Fixed Income Fund................................................ *
Emerging Markets Equity Fund................................................... *
International Equity Fund...................................................... 120%
</TABLE>
- ------------------------
* Not in operation during such period.
As of May 31, 1997, the Large Cap Fund owned $908,000 of equity securities
issued by Lehman Brothers; $3,509,000 of equity securities and $4,014,000 of
debt securities issued by Merrill Lynch; $1,836,000 of equity securities issued
by J.P. Morgan; and $402,000 of equity securities issued by Salomon Brothers.
The Small Cap Fund owned $8,868,000 of debt securities issued by Merrill Lynch.
The Core Fixed Income Fund owned $198,000 of equity securities issued by J.P.
Morgan; $3,224,000 of equity securities and $889,000 of debt securities issued
by Lehman Brothers; $1,568,000 of equity securities and $5,872,000 of debt
securities issued by Merrill Lynch; $464,000 of debt securities issued by Paine
Webber; and $1,257,000 of equity securities issued by Salomon Brothers.
DESCRIPTION OF SHARES
The Declaration of Trust authorizes the issuance of an unlimited number of
shares of each Fund, each of which represents an equal proportionate interest in
that Fund. Each share upon liquidation entitles a shareholder to a pro rata
share in the net assets of that Fund. Shareholders have no preemptive rights.
The
S-26
<PAGE>
Declaration of Trust provides that the Trustees of the Trust may create
additional series of shares or separate classes of funds. Share certificates
representing the shares will not be issued.
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 administrators, shall not be
liable for any neglect or wrongdoing of any such person. The Declaration of
Trust also provides that the Trust will indemnify its Trustees and officers
against liabilities and expenses incurred in connection with actual or
threatened litigation in which they may be involved because of their offices
with the Trust unless it is determined in the manner provided in the Declaration
of Trust that they have not acted in good faith in the reasonable belief that
their actions were in the best interests of the Trust. However, nothing in the
Declaration of Trust shall protect or indemnify a Trustee against any liability
for his or her willful misfeasance, bad faith, gross negligence or reckless
disregard of his or her duties.
VOTING
Where the Prospectus for the Funds or this Statement of Additional
Information state that an investment limitation or a fundamental policy may not
be changed without shareholder approval, such approval means the vote of (i) 67%
or more of the Fund's shares present at a meeting if the holders of more than
50% of the outstanding shares of the Fund are present or represented by Proxy,
or (ii) more than 50% of the Fund's outstanding shares, whichever is less.
SHAREHOLDER LIABILITY
The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of such a Trust could,
under certain circumstances, be held personally liable as partners for the
obligations of the Trust. Even if, however, the Trust were held to be a
partnership, the possibility of the shareholders' incurring financial loss for
that reason appears remote because the Trust's Declaration of Trust (i) contains
an express disclaimer of shareholder liability for obligations of the Trust and
requires that notice of such disclaimer be given in each agreement, obligation
or instrument entered into or executed by or on behalf of the Trust or the
Trustees, and (ii) provides for indemnification out of the Trust property for
any shareholders held personally liable for the obligations of the Trust.
S-27
<PAGE>
5% SHAREHOLDERS
As of September 1, 1997, the following persons were the only persons who
were record owners (or to the knowledge of the Trust, beneficial owners) of 5%
or more of the shares of the Funds. The Trust believes that most of the shares
referred to above were held by the above persons in accounts for their
fiduciary, agency, or custodial customers.
<TABLE>
<CAPTION>
ADDRESS NUMBER OF SHARES PERCENTAGE
- ------------------------------------------------------------------------ ----------------- -----------
<S> <C> <C>
LARGE CAP FUND: 46,420,219.9470 96.33%
Bank of America NT and SA
Attn: Common Trust Funds Unit #8329
PO Box 3577 Terminal Annex
Los Angeles, CA 90051-1577
INTERNATIONAL EQUITY FUND: 34,366,931.6890 89.45%
Bank of America NT and SA
Attn: Common Trust Funds Unit #8329
PO Box 3577 Terminal Annex
Los Angeles, CA 90051-1577
2,200,499.0680 5.73%
National Fuel Gas Retirement Fund
c/o Marine Midland Bank--Trustee
Attn: Joseph M. Rizzuto
One Marine Midland Ctr--17th floor
Buffalo, NY 14203
CORE FIXED INCOME FUND: 39,296,886.0450 96.93%
Bank of America NT and SA
Attn: Common Trust Funds Unit #8329
PO Box 3577 Terminal Annex
Los Angeles, CA 90051-1577
SMALL CAP FUND: 12,491,316.3870 83.58%
Bank of America NT and SA
Attn: Common Trust Funds Unit #8329
PO Box 3577 Terminal Annex
Los Angeles, CA 90051-1577
908,408.4090 6.08%
Pemco Aeroplex
c/o Citybank N.A.
Attn: Edward Flannery
111 Wall Street
New York, NY 10043-1000
</TABLE>
EXPERTS
The financial statements incorporated by reference into this Statement of
Additional Information have been incorporated by reference in reliance on the
report of Coopers & Lybrand LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.
FINANCIAL STATEMENTS
The Trust's financial statements for the fiscal year ended May 31, 1997,
including notes thereto and the report of Coopers & Lybrand LLP thereon, are
herein incorporated by reference from the Trust's 1997 Annual Report. A copy of
the 1997 Annual Report must accompany the delivery of this Statement of
Additional Information.
S-28
<PAGE>
SEI INSTITUTIONAL INVESTMENTS TRUST
PART C. OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS:
(a) Financial Statements.
<TABLE>
<S> <C>
Part A: Financial Highlights
Part B: The following audited Financial Statements for the fiscal year ended May 31,
1997 and Report of Independent Public Accountants dated July 15, 1997 are incorporated
by reference to the Statement of Additional Information from form N-30D filed on July
28, 1997 with Accession Number 0000935069-97-000117.
Statement of Net Assets
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Financial Highlights
Notes to Financial Statements
</TABLE>
(b) Additional Exhibits:
<TABLE>
<S> <C>
(1) Registrant's Declaration of Trust is incorporated herein by reference to
Registrant's Registration Statement on Form N-1A (File No. 33-58041),
filed with the Securities and Exchange Commission ("SEC") on March 10,
1995.
(2) Registrant's By-Laws are incorporated herein by reference to Registrant's
Registration Statement on Form N-1A (File No. 33-58041), filed with the
SEC on March 10, 1995.
(2)(a) Amended By-Laws are filed herewith.
(3) Not Applicable.
(4) Not Applicable.
(5)(a) Investment Advisory Agreement between the Trust and SEI Investments
Management Corporation ("SIMC") (formerly "SEI Financial Management
Corporation") as previously filed with Registrant's Pre-Effective
Amendment No. 2 on Form N-1A (File No. 33-58041), filed with the SEC on
June 7, 1996 is filed herewith.
(5)(b) Form of Investment Sub-Advisory Agreement between SIMC and 1838 Investment
Advisors, L.P. with respect to the Trust's Small Cap Fund as previously
filed with Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File
No. 33-58041), filed with the SEC on April 26, 1996 is filed herewith.
(5)(c) Investment Sub-Advisory Agreement between SIMC and Acadian Asset Management,
L.P. with respect to the Trust's International Equity Fund as previously
filed with Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File
No. 33-58041), filed with the SEC on April 26, 1996 is filed herewith.
(5)(d) Investment Sub-Advisory Agreement between SIMC and Alliance Capital
Management L.P. with respect to the Trust's Large Cap Fund as previously
filed with Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File
No. 33-58041), filed with the SEC on April 26, 1996 is filed herewith.
(5)(e) Form of Investment Sub-Advisory Agreement between SIMC and Apodaca-Johnston
Capital Management, Inc. with respect to the Trust's Small Cap Fund is
incorporated herein by reference to Registrant's Pre-Effective Amendment
No. 1 on Form N-1A (File No. 33-58041), as previously filed with the SEC
on April 26, 1996.
</TABLE>
C-1
<PAGE>
<TABLE>
<S> <C>
(5)(f) Investment Sub-Advisory Agreement between SIMC and BEA Associates with
respect to the High Yield Bond Fund as previously filed with Registrant's
Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041), filed with
the SEC on April 26, 1996 is filed herewith.
(5)(g) Investment Sub-Advisory Agreement between SIMC and BlackRock Financial
Management, Inc. with respect to the Core Fixed Income Fund as previously
filed with Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File
No. 33-58041), filed with the SEC on April 26, 1996 is filed herewith.
(5)(h) Investment Sub-Advisory Agreement between SIMC and Boston Partners Asset
Management, L.P. with respect to the Small Cap Fund as previously filed
with Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No.
33-58041), filed with the SEC on April 26, 1996 is filed herewith.
(5)(i) Investment Sub-Advisory Agreement between SIMC and Firstar Investment
Research & Management Company with respect to the Core Fixed Income Fund
as previously filed with Registrant's Pre-Effective Amendment No. 1 on
Form N-1A (File No. 33-58041), filed with the SEC on April 26, 1996 is
filed herewith.
(5)(j) Investment Sub-Advisory Agreement between SIMC and American Express Asset
Management Group, Inc. (formerly "IDS Advisory Group, L.P.") with respect
to the Trust's Large Cap Fund as previously filed with Registrant's
Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041), filed with
the SEC on April 26, 1996 is filed herewith.
(5)(k) Investment Sub-Advisory Agreement between SIMC and LSV Asset Management with
respect to the Trust's Large Cap and Small Cap Funds as previously filed
with Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No.
33-58041), filed with the SEC on April 26, 1996 is filed herewith.
(5)(l) Investment Sub-Advisory Agreement between SIMC and Mellon Equity Associates
with respect to the Large Cap Fund as previously filed with Registrant's
Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041), filed with
the SEC on April 26, 1996 is filed herewith.
(5)(m) Investment Sub-Advisory Agreement between SIMC and Pacific Alliance Capital
Management (formerly "MERUS-UCA Capital Management") with respect to the
Large Cap Fund as previously filed with Registrant's Pre-Effective
Amendment No. 1 on Form N-1A (File No. 33-58041), filed with the SEC on
April 26, 1996 is filed herewith.
(5)(n) Investment Sub-Advisory Agreement between SIMC and Montgomery Asset
Management, L.P. with respect to the Emerging Markets Equity Fund as
previously filed with Registrant's Pre-Effective Amendment No. 1 on Form
N-1A (File No. 33-58041), filed with the SEC on April 26, 1996 is filed
herewith.
(5)(o) Form of Investment Sub-Advisory Agreement between SIMC and Morgan Grenfell
Investment Services Limited with respect to the International Equity Fund
is incorporated herein by reference to Registrant's Pre-Effective
Amendment No. 1 on Form N-1A (File No. 33-58041), as previously filed with
the SEC on April 26, 1996.
(5)(p) Investment Sub-Advisory Agreement between SIMC and Nicholas-Applegate
Capital Management, Inc. with respect to the Small Cap Fund as previously
filed with Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File
No. 33-58041), filed with the SEC on April 26, 1996 is filed herewith.
(5)(q) Investment Sub-Advisory Agreement between SIMC and Provident Investment
Counsel, Inc. with respect to the Large Cap Fund as previously filed with
Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No.
33-58041), filed with the SEC on April 26, 1996 is filed herewith.
</TABLE>
C-2
<PAGE>
<TABLE>
<S> <C>
(5)(r) Form of Investment Sub-Advisory Agreement between SIMC and Schroder Capital
Management International Limited with respect to the International Equity
Fund is incorporated herein by reference to Registrant's Pre-Effective
Amendment No. 1 on Form N-1A (File No. 33-58041), as previously filed with
the SEC on April 26, 1996.
(5)(s) Investment Sub-Advisory Agreement between SIMC and Strategic Fixed Income
L.P. with respect to the International Fixed Income Fund as previously
filed with Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File
No. 33-58041), filed with the SEC on April 26, 1996 is filed herewith.
(5)(t) Investment Sub-Advisory Agreement between SIMC and Wall Street Associates
with respect to the Small Cap Fund as previously filed with Registrant's
Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041), filed with
the SEC on April 26, 1996 is filed herewith.
(5)(u) Investment Sub-Advisory Agreement between SIMC and Western Asset Management
Company with respect to the Core Fixed Income Fund as previously filed
with Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No.
33-58041), filed with the SEC on April 26, 1996 is filed herewith.
(5)(v) Investment Sub-Advisory Agreement between SIMC and First of America
Investment Corporation with respect to the Small Cap Fund as previously
filed as Exhibit (5)(w) with Registrant's Pre-Effective Amendment No. 2 on
Form N-1A (File No. 33-58041), filed with the SEC on June 7, 1996 is filed
herewith.
(5)(w) Investment Sub-Advisory Agreement between SIMC and Farrell Wako Global
Investment Management, Inc. with respect to the International Equity Fund
as previously filed as Exhibit (5)(x) with Registrant's Pre-Effective
Amendment No. 2 on Form N-1A (File No. 33-58041), filed with the SEC on
June 7, 1996 is filed herewith.
(5)(x) Investment Sub-Advisory Agreement between SIMC and Seligman Henderson Co.
with respect to the International Equity Fund as previously filed as
Exhibit (5)(y) with Registrant's Pre-Effective Amendment No. 2 on Form
N-1A (File No. 33-58041), filed with the SEC on June 7, 1996 is filed
herewith.
(5)(y) Investment Sub-Advisory Agreement between SIMC and Yamaichi Capital
Management, Inc. with respect to the International Equity Fund as
previously filed as Exhibit (5)(z) with Registrant's Pre-Effective
Amendment No. 2 on Form N-1A (File No. 33-58041), filed with the SEC on
June 7, 1996.
(5)(z) Investment Sub-Advisory Agreement between SIMC and Coronation Asset
Management (Proprietary) Limited with respect to the Emerging Markets
Equity Fund is incorporated herein by reference as Exhibit (5)(aa) to
Registrant's Post-Effective Amendment No. 1 on Form N-1A (File No.
33-58041), filed with the SEC on December 30, 1996.
(5)(aa) Investment Sub-Advisory Agreement between SIMC and Furman Selz Capital
Management LLC with respect to the Small Cap Fund as previously filed as
Exhibit (5)(bb) to Registrant's Post-Effective Amendment No. 1 on Form
N-1A (File No. 33-58041), filed with the SEC on December 30, 1996 is filed
herewith.
(5)(bb) Investment Sub-Advisory Agreement between SIMC and Lazard London
International Investment Management Limited with respect to the
International Equity Fund as previously filed as Exhibit (5)(cc) to
Registrant's Post-Effective Amendment No. 1 on Form N-1A (File No.
33-58041), filed with the SEC on December 30, 1996 is filed herewith.
(5)(cc) Investment Sub-Advisory Agreement between SIMC and Parametric Portfolio
Associates with respect to the Emerging Markets Equity Fund is
incorporated herein by reference as Exhibit (5)(dd) to Registrant's
Post-Effective Amendment No. 1 on Form N-1A (File No. 33-58041), filed
with the SEC on December 30, 1996.
</TABLE>
C-3
<PAGE>
<TABLE>
<S> <C>
(5)(dd) Investment Sub-Advisory Agreement between SIMC and Yamaichi Capital
Management, Inc. And Yamaichi Capital Management (Singapore) Limited with
respect to the International Equity Fund is incorporated herein by
reference as Exhibit (5)(ee) to Registrant's Post-Effective Amendment No.
1 on Form N-1A (File No. 33-58041), filed with the SEC on December 30,
1996.
(5)(ee) Schedule B dated January 1, 1997 to the Trust's Sub-Advisory Agreement dated
June 14, 1996 between SIMC and LSV Asset Management is filed herewith.
(6) Distribution Agreement between the Trust and SEI Investments Distribution
Co. (formerly "SEI Financial Services Company") as previously filed with
Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No.
33-58041), filed with the SEC on April 26, 1996 is filed herewith.
(7) Not Applicable.
(8) Custodian Agreement between the Trust and CoreStates Bank, N.A. with respect
to the Trust's Large Cap, Small Cap, Core Fixed Income and High Yield Bond
Funds as previously filed with Registrant's Pre-Effective Amendment No. 2
on Form N-1A (File No. 33-58041), filed with the SEC on June 7, 1996 is
filed herewith.
(8)(a) Custodian Agreement between the Trust and State Street Bank and Trust
Company is filed herewith.
(9)(a) Administration Agreement dated June 14, 1996 between the Trust and SEI Fund
Management as previously filed with Registrant's Pre-Effective Amendment
No. 1 on Form N-1A (File No. 33-58041), filed with the SEC on April 26,
1996 is filed herewith.
(10) Opinion and Consent of Counsel is incorporated herein by reference to
Registrant's Pre-Effective Amendment No. 2 on Form N-1A (File No.
33-58041), filed with the SEC on June 7, 1996.
(11) Consent of Independent Public Accountants is filed herewith.
(12) Not Applicable.
(13) Not Applicable.
(14) Not Applicable.
(15) Not Applicable.
(16) Performance Quotation Computation is incorporated herein by reference to
Registrant's Pre-Effective Amendment No. 2 on Form N-1A (File No.
33-58041), filed with the SEC on June 7, 1996.
(17) Financial Data Schedules for the Large Cap, Small Cap, Core Fixed Income and
International Equity Funds are filed herewith.
(24) Powers of Attorney for Robert A. Nesher, William M. Doran, George J.
Sullivan, Jr., F. Wendell Gooch, Mark E. Nagle, James M. Storey, David G.
Lee and Frank E. Morris are filed herewith.
</TABLE>
ITEM 25.
See the Prospectus and Statement of Additional Information filed herewith
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.
C-4
<PAGE>
ITEM 26. NUMBER OF HOLDERS OF SECURITIES:
The number of record holders as of September 1, 1997:
<TABLE>
<CAPTION>
NUMBER OF
RECORD
TITLE OF CLASS HOLDERS
- ---------------------------------------------------------------------------------- -------------
<S> <C>
Large Cap Fund.................................................................... 7
Small Cap Fund.................................................................... 9
Core Fixed Income Fund............................................................ 7
High Yield Bond Fund.............................................................. N/A
International Fixed Income Fund................................................... N/A
Emerging Markets Equity Fund...................................................... N/A
International Equity Fund......................................................... 9
</TABLE>
ITEM 27. INDEMNIFICATION:
Article VIII of the Agreement and Declaration of Trust is filed as Exhibit 1
to the Registration Statement. Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to trustees,
directors, officers and controlling persons of the Registrant by the Registrant
pursuant to the Declaration of Trust or otherwise, the Registrant is aware that
in the opinion of the Securities and Exchange Commission, such indemnification
is against public policy as expressed in the Act and, therefore, is
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by trustees, directors, officers or controlling persons of the Registrant
in connection with the successful defense of any act, suite 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.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF MONEY MANAGERS:
Other business, profession, vocation, or employment of a substantial nature
in which each director or principal officer of each Money Manager is or has
been, at any time during the last two fiscal years, engaged for his own account
or in the capacity of director, officer, employee, partner or trustee are as
follows:
1838 INVESTMENT ADVISORS, L.P.
1838 Investment Advisors L.P. ("1838") is a money manager for the
Registrant's Small Cap Fund. The principal business address of 1838 is 5 Radnor
Corporate Center, 100 Matsonford Road, Suite 320, Radnor, Pennsylvania 19087.
1838 is an investment money manager registered under the Advisers Act.
The list required by this Item 28 of officers and directors of 1838,
together with information as to any other business, profession, vocation or
employment of substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by 1838 pursuant to the Advisers Act (SEC File No. 801-33025).
ACADIAN ASSET MANAGEMENT, INC.
Acadian Asset Management, Inc. ("Acadian") is a money manager for the
Registrant's International Equity Fund. The principal business address of
Acadian is 260 Franklin Street, Boston, Massachusetts 02110. Acadian is an
investment money manager registered under the Advisers Act.
C-5
<PAGE>
The list required by this Item 28 of officers and directors of Acadian,
together with information as to any other business, profession, vocation or
employment of substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by Acadian pursuant to the Advisers Act (SEC File No. 28078).
ALLIANCE CAPITAL MANAGEMENT L.P.
Alliance Capital Management L.P. ("Alliance") is a money manager for the
Registrant's Large Cap Fund. The principal business address of Alliance is 1345
Avenue of the Americas, New York, New York 10105. Alliance is an investment
money manager registered under the Advisers Act.
The list required by this Item 28 of officers and directors of Alliance,
together with information as to any other business, profession, vocation or
employment of substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by Alliance pursuant to the Advisers Act (SEC File No.
801-32361).
AMERICAN EXPRESS ASSET MANAGEMENT GROUP INC. (FORMERLY "IDS ADVISORY GROUP
INC.")
American Express Asset Management Group Inc. ("AEAMG") is a money manager
for the Registrant's Large Cap Fund. The principal business address of AEAMG is
IDS Tower 10, Minneapolis, Minnesota 55400-0010. AEAMG is an investment money
manager registered under the Advisers Act.
The list required by this Item 28 of officers and directors of AEAMG,
together with information as to any other business, profession, vocation or
employment of substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by AEAMG pursuant to the Advisers Act (SEC File No. 801-25943).
BEA ASSOCIATES
BEA Associates ("BEA") is the money manager for the Registrant's High Yield
Fund. The principal business address of BEA is One Citicorp Center, 153 East
53rd Street, New York, New York 10022. BEA is an investment money manager
registered under the Advisers Act.
The list required by this Item 28 of officers and directors of BEA, together
with information as to any other business, profession, vocation or employment of
a substantial nature engaged in by such officers and directors during the past
two years, is incorporated by reference to Schedules A and D of Form ADV filed
by BEA pursuant to the Advisers Act (SEC File No. 801-37170).
BLACKROCK FINANCIAL MANAGEMENT, INC.
BlackRock Financial Management, Inc. ("BlackRock") is a money manager for
the Registrant's Core Fixed Income Fund. The principal business address of
BlackRock is 345 Park Avenue, 29th Floor, New York, New York 10154. BlackRock is
an investment money manager registered under the Advisers Act.
The list required by this Item 28 of officers and directors of BlackRock,
together with information as to any other business, profession, vocation or
employment of a substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by BlackRock pursuant to the Advisers Act (SEC File No.
801-48433).
BOSTON PARTNERS ASSET MANAGEMENT, L.P.
Boston Partners Asset Management, L.P. ("BPAM") is a money manager for the
Registrant's Small Cap Fund. The principal business address of BPAM is One
Financial Center, 43rd Floor, Boston, Massachusetts 02111. BPAM is an investment
money manager registered under the Advisers Act.
C-6
<PAGE>
The list required by this Item 28 of officers and directors of BPAM,
together with information as to any other business, profession, vocation or
employment of a substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by BPAM pursuant to the Advisers Act (SEC File No. 801-49059).
CORONATION ASSET MANAGEMENT (PROPRIETARY) LIMITED
Coronation Asset Management (Proprietary) Limited ("Coronation") is a money
manager for the Registrant's Emerging Markets Equity Fund. The principal
business address of Coronation is 80 Strand Street, Cape Town, South Africa
8001. Coronation is an investment money manager registered under the Advisers
Act.
The list required by this Item 28 of officers and directors of Coronation,
together with information as to any other business, profession, vocation or
employment of a substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by Coronation pursuant to the Advisers Act (SEC File No.
801-52830).
FARRELL WAKO GLOBAL INVESTMENT MANAGEMENT COMPANY, INC.
Farrell Wako Global Investment Management Company, Inc. ("Farrell Wako") is
a money manager for the Registrant's International Equity Fund. The principal
business address of Farrell Wako is 780 Third Avenue, New York, New York 10017.
Farrell Wako is an investment money manager registered under the Advisers Act.
The list required by this Item 28 of officers and directors of Farrell Wako,
together with information as to any other business, profession, vocation or
employment of a substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by Farrell Wako pursuant to the Advisers Act (SEC File No.
801-41830).
FIRST OF AMERICA INVESTMENT CORPORATION
First of America Investment Corporation ("First America") is a money manager
for the Registrant's Small Cap Fund. The principal business address of First
America is 303 North Rose Street, Suite 500, Kalamazoo, Michigan 49007. First
America is an investment money manager registered under the Advisers Act.
The list required by this Item 28 of officers and directors of First
America, together with information as to any other business, profession,
vocation or employment of a substantial nature engaged in by such officers and
directors during the past two years, is incorporated by reference to Schedules A
and D of Form ADV filed by First America pursuant to the Advisers Act (SEC File
No. 801-446).
FIRSTAR INVESTMENT RESEARCH & MANAGEMENT COMPANY, LLC
Firstar Investment Research & Management Company, LLC ("FIRMCO") is a money
manager for the Registrant's Core Fixed Income Fund. The principal business
address of FIRMCO is 777 East Wisconsin Avenue, Suite 800, Milwaukee, Wisconsin
53202. FIRMCO is an investment money manager registered under the Advisers Act.
The list required by this Item 28 of officers and directors of FIRMCO,
together with information as to any other business, profession, vocation or
employment of a substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by FIRMCO pursuant to the Advisers Act (SEC File No. 801-28084).
C-7
<PAGE>
FURMAN SELZ CAPITAL MANAGEMENT LLC
Furman Selz Capital Management LLC ("Furman Selz") is a money manager for
the Registrant's Small Cap Fund. The principal business address of Furman Selz
is 230 Park Avenue, New York, NY 10169. Furman Selz is an investment money
manager registered under the Advisers Act.
The list required by this Item 28 of officers and directors of Furman Selz,
together with information as to any other business, profession, vocation or
employment of a substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by Furman Selz pursuant to the Advisers Act (SEC File No.
801-20737).
LAZARD LONDON INTERNATIONAL INVESTMENT MANAGEMENT LIMITED
Lazard London International Investment Management Limited ("Lazard") is a
money manager for the Registrant's International Equity Fund. The principal
business address of Lazard is 21 Moorfields London, England, EC2P 2HT. Lazard is
an investment money manager registered under the Advisers Act.
The list required by this Item 28 of officers and directors of Lazard,
together with information as to any other business, profession, vocation or
employment of a substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by Lazard pursuant to the Advisers Act (SEC File No. 801-15430).
LSV ASSET MANAGEMENT
LSV Asset Management ("LSV") is a money manager for the Registrant's Large
Cap and Small Cap Funds. The principal business address of LSV is 181 West
Madison Street, Chicago, Illinois 60602. LSV is an investment money manager
registered under the Advisers Act.
The list required by this Item 28 of officers and directors of LSV, together
with information as to any other business, profession, vocation or employment of
substantial nature engaged in by such officers and directors during the past two
years, is incorporated by reference to Schedules A and D of Form ADV filed by
LSV pursuant to the Advisers Act (SEC File No. 801-38734).
MELLON EQUITY ASSOCIATES
Mellon Equity Associates ("Mellon Equity") is a money manager for the
Registrant's Large Cap Fund. The principal business address of Mellon Equity is
500 Grant Street, Suite 3700, Pittsburgh, PA 15258. Mellon Equity is an
investment money manager registered under the Advisers Act.
The list required by this Item 28 of officers and directors of Mellon
Equity, together with information as to any other business, profession, vocation
or employment of substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedule A and D of
Form ADV filed by Mellon Equity pursuant to the Advisers Act (SEC File No.
801-28692).
MONTGOMERY ASSET MANAGEMENT, LLC
Montgomery Asset Management, LLC ("MAM") is a money manager for the
Registrant's Emerging Markets Equity Fund. The principal business address of MAM
is 600 Montgomery Street, San Francisco, California 94111. MAM is an investment
money manager registered under the Advisers Act.
The list required by this Item 28 of officers and directors of MAM, together
with information as to any other business, profession, vocation or employment of
substantial nature engaged in by such officers and directors during the past two
years, is incorporated by reference to Schedules A and D of Form ADV filed by
MAM pursuant to the Advisers Act (SEC File No. 801-36790).
C-8
<PAGE>
NICHOLAS-APPLEGATE CAPITAL MANAGEMENT, INC.
Nicholas-Applegate Capital Management, Inc. ("Nicholas-Applegate") is a
money manager for the Registrant's Small Cap Fund. The principal business
address of Nicholas-Applegate is 600 West Broadway, 29th Floor, San Diego,
California 92101. Nicholas-Applegate is an investment money manager registered
under the Advisers Act.
The list required by this Item 28 of officers and directors of
Nicholas-Applegate, together with information as to any other business,
profession, vocation or employment of substantial nature engaged in by such
officers and directors during the past two years, is incorporated by reference
to Schedules A and D of Form ADV filed by Nicholas-Applegate pursuant to the
Advisers Act (SEC File No. 801-21442).
PACIFIC ALLIANCE CAPITAL MANAGEMENT
Pacific Alliance Capital Management ("Pacific Alliance") is a money manager
for the Registrant's Large Cap Fund. The principal business address of Pacific
Alliance is 475 Sansome Street, San Francisco, California 94111. Pacific
Alliance is a division of Union Bank of California, N.A. and is exempt from
registration under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------------- ---------------------------------- ---------------------------------
<S> <C> <C>
Stanley F. Farrar Sullivan & Cromwell Partner
Director of Adviser
Kazuo Ibuki The Mitsubishi Bank Limited Chairman
Director
Raymond E. Miles Univ. of California School of Bus. Dean
Director of Adviser Admin.
J. Fernado Niedbla Infotec Development, Inc. Chairman & CEO
Director of Adviser
Hiroo Nozawa BanCal Tri-State Corporation Chairman, President & CEO
Director of Adviser Chairman, President &
CEO
Carl W. Robertson Warland Investments Company Managing Director
Director of Adviser
Paul W. Steere Bogle & Gates Partner
Director of Adviser
Charles R. Scott Intermark, Inc. President & CEO
Director of Adviser
Henry T. Swigert ESCO Corporation Chairman
Director of Adviser
Yasuyuki Hirai The Mitsubishi Bank --
Director of Adviser,
Chief Executive Officer
Minoru Noda -- --
Director of Adviser, Vice Chairman Credit
& Finance
Samuel L. Williams Hufstedler, Miller Partner
Director of Adviser Kaus & Beardsley
</TABLE>
C-9
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------------- ---------------------------------- ---------------------------------
<S> <C> <C>
Roy A. Henderson -- --
Director of Advisor,
Chairman, Regional Banking
Takejiro Sneyoshi MBL New York Branch Director & General Manager
Director of Adviser
Peter R. Butcher -- --
Executive Vice President
Chief Credit Officer
David W. Ehlers -- --
Executive Vice President
Chief Financial Officer
Michael Spilsbury -- --
Executive Vice President
Resources & Services Sector
William R. Sweet -- --
Executive Vice President
Wholesale & International Group
James M. Castro -- --
Secretary
Luke Mazur -- --
Senior Vice President & Manager
</TABLE>
PARAMETRIC PORTFOLIO ASSOCIATES
Parametric Portfolio Associates ("Parametric") is a money manager for the
Registrant's Emerging Markets Equity Fund. The principal business address of
Parametric is 700 Newport Center Drive, Newport Beach, CA 92660. Parametric is
an investment money manager registered under the Advisers Act.
The list required by this Item 28 of officers and directors of Parametric
together with information as to any other business, profession, vocation or
employment of a substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by Parametric pursuant to the Advisers Act (SEC File No.
801-48184).
PROVIDENT INVESTMENT COUNSEL, INC.
Provident Investment Counsel, Inc. ("Provident") is a money manager for the
Registrant's Large Cap Fund. The principal business address of Provident is 300
North Lake Avenue, Pasadena, CA 91101. Provident is an investment money manager
registered under the Advisers Act.
The list required by this Item 28 of officers and directors of Provident,
together with information as to any other business, profession, vocation or
employment of substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by Provident pursuant to the Advisers Act (SEC File No.
801-47993).
SEI INVESTMENTS MANAGEMENT CORPORATION
SEI Investments Management Corporation ("SIMC") is the money manager for the
Large Cap, Small Cap, Core Fixed Income, High Yield Bond, International Fixed
Income, Emerging Markets Equity and
C-10
<PAGE>
International Equity Funds. The principal address of SIMC is Oaks, Pennsylvania
19456. SIMC is an investment money manager registered under the Advisers Act.
The list required by this Item 28 of officers and directors of SIMC,
together with information as to any other business profession, vocation, or
employment of a substantial nature engaged in by such officers and directors
during the past two years is incorporated by reference to Schedules A and D of
Form ADV filed by SIMC to the Advisers Act (SEC File No. 801-24593).
SELIGMAN HENDERSON CO.
Seligman Henderson Co. is a money manager for the Registrant's International
Equity Fund. The principal business address of Seligman Henderson Co. is 100
Park Avenue, New York, New York 10017. Seligman Henderson Co. is an investment
money manager registered under the Advisers Act.
The list required by this Item 28 of officers and directors of Seligman
Henderson Co., together with information as to any other business profession,
vocation, or employment of a substantial nature engaged in by such officers and
directors during the past two years, is incorporated by reference to Schedules A
and D of Form ADV filed by Seligman Henderson Co. pursuant to the Advisers Act
(SEC File No. 801-40670).
STRATEGIC FIXED INCOME, L.P.
Strategic Fixed Income, L.P. ("SFI") is a money manager for the Registrant's
International Fixed Income Fund. The principal business address of SFI is 1001
Nineteenth Street North, 17th Floor, Arlington, Virginia 22209. SFI is an
investment money manager registered under the Advisers Act.
The list required by this Item 28 of officers and directors of SFI, together
with information as to any other business, profession, vocation or employment of
substantial nature engaged in by such officers and directors during the past two
years, is incorporated by reference to Schedules A and D of Form ADV filed by
SFI pursuant to the Advisers Act (SEC File No. 801-38734).
WALL STREET ASSOCIATES
Wall Street Associates ("WSA") is a money manager for the Registrant's Small
Cap Fund. The principal address for WSA is 1200 Prospect Street, Suite 100, La
Jolla, California 92037. WSA is an investment money manager registered under the
Advisers Act.
The list required by this Item 28 of officers and directors of WSA, together
with information as to any other business, profession, vocation or employment of
substantial nature engaged in by such officers and directors during the past two
years, is incorporated by reference to Schedules A and D of Form ADV filed by
WSA pursuant to the Advisers Act (SEC File No. 801-30019).
WESTERN ASSET MANAGEMENT COMPANY
Western Asset Management Company ("Western") is a money manager for the
Registrant's Core Fixed Income Fund. The principal business address of Western
is 117 East Colorado Boulevard, Pasadena, California 91105. Western is an
investment money manager registered under the Advisers Act.
The list required by this Item 28 of officers and directors of Western,
together with information as to any other business, profession, vocation or
employment of substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by Western pursuant to the Advisers Act (SEC File No. 801-08162).
YAMAICHI CAPITAL MANAGEMENT, INC. AND YAMAICHI CAPITAL MANAGEMENT (SINGAPORE)
LIMITED
Yamaichi Capital Management, Inc. ("Yamaichi") and Yamaichi Capital
Management (Singapore) Limited ("YCMS") jointly serve as money manager for the
Registrant's International Equity and Emerging
C-11
<PAGE>
Markets Equity Funds. The principal business address of Yamaichi is 2 World
Trade Center, Suite 9828, New York, NY 10048. The principal address of YCMS is
138 Robinson Road, #13-01/05, Hong Leong Centre, Singapore 068906.
The list required by this Item 28 of officers and directors of Yamaichi and
YCMS, together with information as to any other business, profession, vocation
or employment of substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by Yamaichi and YCMS pursuant to the Advisers Act (SEC File Nos.
801-15955 and 801-44118, respectively).
ITEM 29. PRINCIPAL UNDERWRITERS:
(a) Furnish the name of each investment company (other than the Registrant)
for which each principal underwriter currently distributing the securities of
the Registrant also acts as a principal underwriter, distributor or investment
adviser.
Registrant's distributor, SEI 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 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
CoreFunds, Inc. October 30, 1992
First American Funds, Inc. November 1, 1992
First American Investment Funds, Inc. November 1, 1992
The Arbor Fund January 28, 1993
Boston 1784 Funds-Registered Trademark- June 1, 1993
The PBHG Funds, Inc. July 16, 1993
Marquis Funds-Registered Trademark- August 17, 1993
Morgan Grenfell Investment Trust January 3, 1994
The Achievement Funds Trust December 27, 1994
Bishop Street Funds January 27, 1995
CrestFunds, Inc. March 1, 1995
STI Classic Variable Trust August 18, 1995
ARK Funds November 1, 1995
Monitor Funds January 11, 1996
FMB Funds, Inc. March 1, 1996
SEI Asset Allocation Trust April 1, 1996
TIP Funds April 28, 1996
First American Strategy Funds, Inc. October 1, 1996
HighMark Funds February 15, 1997
Armada Funds March 8, 1997
PBHG Insurance Series Fund, Inc. April 1, 1997
The Expedition Funds June 9, 1997
</TABLE>
The Distributor provides numerous financial services to investment managers,
pension plan sponsors, and bank trust departments. These services include
portfolio evaluation, performance measurement
C-12
<PAGE>
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.
<TABLE>
<CAPTION>
POSITION AND OFFICE POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- ------------------------------ ------------------------------------------------------- ------------------------
<S> <C> <C>
Alfred P. West, Jr. Director, Chairman & Chief Executive Officer --
Henry H. Greer Director, President & Chief Operating Officer --
Carmen V. Romeo Director, Executive Vice President & President-- --
Investment Advisory Group
Gilbert L. Beebower Executive Vice President --
Richard B. Lieb Executive Vice President, President--Investment --
Services Division
Dennis J. McGonigle Executive Vice President --
Leo J. Dolan, Jr. Senior Vice President --
Carl A. Guarino Senior Vice President --
Larry Hutchison Senior Vice President --
David G. Lee Senior Vice President President & Chief
Executive Officer
Jack May Senior Vice President --
A. Keith McDowell Senior Vice President --
Hartland J. McKeown Senior Vice President --
Barbara J. Moore Senior Vice President --
Kevin P. Robins Senior Vice President, General Counsel & Secretary Vice President &
Assistant Secretary
Robert Wagner Senior Vice President --
Patrick K. Walsh Senior Vice President --
Robert Aller Vice President --
Marc H. Cahn Vice President & Assistant Secretary Vice President &
Assistant Secretary
Gordon W. Carpenter Vice President --
Todd Cipperman Vice President & Assistant Secretary Vice President &
Assistant Secretary
Robert Crudup Vice President & Managing Director --
Barbara Doyne Vice President --
Jeff Drennen Vice President --
Vic Galef Vice President & Managing Director --
Kathy Heilig Vice President & Treasurer --
Michael Kantor Vice President --
Samuel King Vice President --
</TABLE>
C-13
<PAGE>
<TABLE>
<CAPTION>
POSITION AND OFFICE POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- ------------------------------ ------------------------------------------------------- ------------------------
<S> <C> <C>
Kim Kirk Vice President & Managing Director --
John Krzeminski Vice President & Managing Director --
Carolyn McLaurin Vice President & Managing Director --
W. Kelso Morrill Vice President --
Joanne Nelson Vice President --
Barbara A. Nugent Vice President & Assistant Secretary Vice President &
Assistant Secretary
Sandra K. Orlow Vice President & Assistant Secretary Vice President &
Assistant Secretary
Cynthia M. Parrish Vice President & Assistant Secretary --
Donald Pepin Vice President & Managing Director --
Kim Rainey Vice President --
Mark Samuels Vice President & Managing Director --
Steve Smith Vice President --
Daniel Spaventa Vice President --
Kathryn L. Stanton Vice President & Assistant Secretary Vice President &
Assistant Secretary
Wayne M. Withrow Vice President & Managing Director --
James Dougherty Director of Brokerage Services --
</TABLE>
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS:
Books or other documents required to be maintained by Section 31(a) of the
Investment Company Act of 1940, and the rules promulgated thereunder, are
maintained as follows:
(a) With respect to Rules 31a-1(a); 31a-1(b)(1); (2)(a) and (b); (3);
(6); (8); (12); and 31a-1(d), the required books and records are maintained
at the offices of Registrant's Custodians:
CoreStates Bank, N.A.
Broad and Chestnut Streets
P.O. Box 7618
Philadelphia, PA 19101
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
(b)/(c) With respect to Rules 31a-1(a); 31a-1(b)(1),(4); (2)(C) and
(D); (4); (5); (6); (8); (9); (10); (11); and 31a-1(f), the required books
and records are maintained at the offices of Registrant's Administrator:
SEI Fund Management
Oaks, PA 19456
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<PAGE>
(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 Money Managers:
1838 Investment Advisors, L.P.
5 Radnor Corporate Center
100 Matsonford Road
Suite 320
Radnor, Pennsylvania 19087
Acadian Asset Management
260 Franklin Street
Boston, Massachusetts 02110
Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, New York 10105
American Express Asset Management Group Inc.
IDS Tower 10
Minneapolis, Minnesota 55400-0010
BEA Associates
One Citicorp Center
153 East 53rd Street
New York, New York 10022
BlackRock Financial Management, Inc.
345 Park Avenue
29th Floor
New York, New York 10154
Boston Partners Asset Management, L.P.
One Financial Center
43rd Floor
Boston, Massachusetts 02111
Coronation Asset Management (Proprietary) Limited
80 Strand Street
Cape Town, South Africa, 8001
Farrell Wako Global Investment Management Inc.
780 3rd Avenue
New York, New York 10017
First of America Investment Corporation
303 North Rose Street
Suite 500
Kalamazoo, Michigan 49007
Firstar Investment Research & Management Company, LLC
777 East Wisconsin Avenue
Suite 800
Milwaukee, Wisconsin 53202
Furman Selz Capital Management LLC
230 Park Avenue
New York, NY 10169
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<PAGE>
Lazard London International Investment Management Limited
21 Moorfields
London, England EC2P 2HT
LSV Asset Management
181 West Madison Street
Chicago, Illinois 60602
Mellon Equity Associates
500 Grant Street
Suite 3700
Pittsburgh, PA 15258
Montgomery Asset Management, LLC
600 Montgomery Street
San Francisco, California 94111
Nicholas-Applegate Capital Management, Inc.
600 West Broadway, 29th Floor
San Diego, California 92101
Pacific Alliance Capital Management
475 Sansome Street
San Francisco, CA 94111
Parametric Portfolio Associates
700 Newport Center Drive
Newport Beach, CA 92660
Provident Investment Counsel, Inc.
300 North Lake Avenue
Penthouse
Pasadena, CA 91101
SEI Investments Management Corporation
Oaks, PA 19456
Seligman Henderson Co.
100 Park Avenue
New York, New York 10017
Strategic Fixed Income, L.P.
1001 Nineteenth Street North, 17th Floor
Arlington, VA 22209
Wall Street Associates
1200 Prospect Street
Suite 100
La Jolla, California 92037
Western Asset Management Company
117 East Colorado Boulevard
Pasadena, CA 91105
Yamaichi Capital Management, Inc.
2 World Trade Center
Suite 9828
New York, New York 10048
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<PAGE>
Yamaichi Capital Management (Singapore) Limited
138 Robinson Road, #13-01/05
Hong Leong Centre
Singapore, 068906
ITEM 31. MANAGEMENT SERVICES:
None.
ITEM 32. UNDERTAKINGS:
Registrant hereby undertakes to file a post-effective amendment containing
reasonably current financial statements , which need not be certified, within
four to six months of the effective date of the Registrant's 1933 Act
Registration Statement or the commencement of operations of the High Yield Bond,
International Fixed Income and Emerging Markets Equity Funds, whichever is
later.
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 cost 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.
Registrant undertakes to furnish each person to whom a prospectus for any
series of the Registrant is delivered with a copy of the Registrant's latest
annual report to shareholders for such series, 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 of SEI Institutional
Investments Trust is on file with the Secretary of State of The Commonwealth of
Massachusetts and notice is hereby given that this Registration Statement has
been executed on behalf of the Trust by an officer of the Trust as an officer
and by its Trustees as trustees and not individually and the obligations of or
arising out of this Registration Statement are not binding upon any of the
Trustees, Officers, or Shareholders individually but are binding only upon the
assets and property of the Trust.
C-17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, as amended, the Registrant certifies that it
meets all of the requirements for effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused
this Post-Effective Amendment No. 2 to Registration Statement No. 33-58041 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Wayne, Commonwealth of Pennsylvania on the 29th day of September, 1997.
SEI INSTITUTIONAL INVESTMENTS TRUST
By: /s/ DAVID G. LEE
-----------------------------------------
David G. Lee,
PRESIDENT & CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacity on the date(s) indicated.
*
- ------------------------------ Trustee September 29, 1997
William M. Doran
*
- ------------------------------ Trustee September 29, 1997
F. Wendell Gooch
*
- ------------------------------ Trustee September 29, 1997
Frank E. Morris
*
- ------------------------------ Trustee September 29, 1997
George J. Sullivan, Jr.
*
- ------------------------------ Trustee September 29, 1997
James M. Storey
*
- ------------------------------ Trustee September 29, 1997
Robert A. Nesher
/s/ DAVID G. LEE
- ------------------------------ President & Chief September 29, 1997
David G. Lee Executive Officer
/s/ MARK E. NAGLE
- ------------------------------ Controller & Chief September 29, 1997
Mark E. Nagle Financial Officer
*By: /s/ DAVID G. LEE
-------------------------
David G. Lee
ATTORNEY-IN-FACT
C-18
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
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<S> <C>
EX-99.B(1) Registrant's Declaration of Trust is incorporated herein by reference to
Registrant's Registration Statement on Form N-1A (File No. 33-58041), filed with
the Securities and Exchange Commission ("SEC") on March 10, 1995.
EX-99.B(2) Registrant's By-Laws are incorporated herein by reference to Registrant's
Registration Statement on Form N-1A (File No. 33-58041), filed with the SEC on
March 10, 1995.
EX-99.B(2)(a) Amended By-Laws are filed herewith.
EX-99.B(3) Not Applicable.
EX-99.B(4) Not Applicable.
EX-99.B(5)(a) Investment Advisory Agreement between the Trust and SEI Investments Management
Corporation ("SIMC") (formerly "SEI Financial Management Corporation") as
previously filed with Registrant's Pre-Effective Amendment No. 2 on Form N-1A
(File No. 33-58041), filed with the SEC on June 7, 1996 is filed herewith.
EX-99.B(5)(b) Form of Investment Sub-Advisory Agreement between SIMC and 1838 Investment
Advisors, L.P. with respect to the Trust's Small Cap Fund as previously filed
with Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041),
filed with the SEC on April 26, 1996 is filed herewith.
EX-99.B(5)(c) Investment Sub-Advisory Agreement between SIMC and Acadian Asset Management, L.P.
with respect to the Trust's International Equity Fund as previously filed with
Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041),
filed with the SEC on April 26, 1996 is filed herewith.
EX-99.B(5)(d) Investment Sub-Advisory Agreement between SIMC and Alliance Capital Management L.P.
with respect to the Trust's Large Cap Fund as previously filed with Registrant's
Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041), filed with the
SEC on April 26, 1996 is filed herewith.
EX-99.B(5)(e) Form of Investment Sub-Advisory Agreement between SIMC and Apodaca-Johnston Capital
Management, Inc. with respect to the Trust's Small Cap Fund is incorporated
herein by reference to Registrant's Pre-Effective Amendment No. 1 on Form N-1A
(File No. 33-58041), as previously filed with the SEC on April 26, 1996.
EX-99.B(5)(f) Investment Sub-Advisory Agreement between SIMC and BEA Associates with respect to
the High Yield Bond Fund as previously filed with Registrant's Pre-Effective
Amendment No. 1 on Form N-1A (File No. 33-58041), filed with the SEC on April 26,
1996 is filed herewith.
EX-99.B(5)(g) Investment Sub-Advisory Agreement between SIMC and BlackRock Financial Management,
Inc. with respect to the Core Fixed Income Fund as previously filed with
Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041),
filed with the SEC on April 26, 1996 is filed herewith.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
- -------------------- -----------------------------------------------------------------------------------
<S> <C>
EX-99.B(5)(h) Investment Sub-Advisory Agreement between SIMC and Boston Partners Asset
Management, L.P. with respect to the Small Cap Fund as previously filed with
Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041),
filed with the SEC on April 26, 1996 is filed herewith.
EX-99.B(5)(i) Investment Sub-Advisory Agreement between SIMC and Firstar Investment Research &
Management Company with respect to the Core Fixed Income Fund as previously filed
with Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041),
filed with the SEC on April 26, 1996 is filed herewith.
EX-99.B(5)(j) Investment Sub-Advisory Agreement between SIMC and American Express Asset
Management Group, Inc. (formerly "IDS Advisory Group, L.P.") with respect to the
Trust's Large Cap Fund as previously filed with Registrant's Pre-Effective
Amendment No. 1 on Form N-1A (File No. 33-58041), filed with the SEC on April 26,
1996 is filed herewith.
EX-99.B(5)(k) Investment Sub-Advisory Agreement between SIMC and LSV Asset Management with
respect to the Trust's Large Cap and Small Cap Funds as previously filed with
Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041),
filed with the SEC on April 26, 1996 is filed herewith.
EX-99.B(5)(l) Investment Sub-Advisory Agreement between SIMC and Mellon Equity Associates with
respect to the Large Cap Fund as previously filed with Registrant's Pre-Effective
Amendment No. 1 on Form N-1A (File No. 33-58041), filed with the SEC on April 26,
1996 is filed herewith.
EX-99.B(5)(m) Investment Sub-Advisory Agreement between SIMC and Pacific Alliance Capital
Management (formerly "MERUS-UCA Capital Management") with respect to the Large
Cap Fund as previously filed with Registrant's Pre-Effective Amendment No. 1 on
Form N-1A (File No. 33-58041), filed with the SEC on April 26, 1996 is filed
herewith.
EX-99.B(5)(n) Investment Sub-Advisory Agreement between SIMC and Montgomery Asset Management,
L.P. with respect to the Emerging Markets Equity Fund as previously filed with
Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041),
filed with the SEC on April 26, 1996 is filed herewith.
EX-99.B(5)(o) Form of Investment Sub-Advisory Agreement between SIMC and Morgan Grenfell
Investment Services Limited with respect to the International Equity Fund is
incorporated herein by reference to Registrant's Pre-Effective Amendment No. 1 on
Form N-1A (File No. 33-58041), as previously filed with the SEC on April 26,
1996.
EX-99.B(5)(p) Investment Sub-Advisory Agreement between SIMC and Nicholas-Applegate Capital
Management, Inc. with respect to the Small Cap Fund as previously filed with
Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041),
filed with the SEC on April 26, 1996 is filed herewith.
EX-99.B(5)(q) Investment Sub-Advisory Agreement between SIMC and Provident Investment Counsel,
Inc. with respect to the Large Cap Fund as previously filed with Registrant's
Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041), filed with the
SEC on April 26, 1996 is filed herewith.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
- -------------------- -----------------------------------------------------------------------------------
<S> <C>
EX-99.B(5)(r) Investment Sub-Advisory Agreement between SIMC and Schroder Capital Management
International Limited with respect to the International Equity Fund is
incorporated herein by reference to Registrant's Pre-Effective Amendment No. 1 on
Form N-1A (File No. 33-58041), as previously filed with the SEC on April 26,
1996.
EX-99.B(5)(s) Investment Sub-Advisory Agreement between SIMC and Strategic Fixed Income L.P. with
respect to the International Fixed Income Fund as previously filed with
Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041),
filed with the SEC on April 26, 1996 is filed herewith.
EX-99.B(5)(t) Investment Sub-Advisory Agreement between SIMC and Wall Street Associates with
respect to the Small Cap Fund as previously filed with Registrant's Pre-Effective
Amendment No. 1 on Form N-1A (File No. 33-58041), filed with the SEC on April 26,
1996 is filed herewith.
EX-99.B(5)(u) Investment Sub-Advisory Agreement between SIMC and Western Asset Management Company
with respect to the Core Fixed Income Fund as previously filed with Registrant's
Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041), filed with the
SEC on April 26, 1996 is filed herewith.
EX-99.B(5)(v) Investment Sub-Advisory Agreement between SIMC and First of America Investment
Corporation with respect to the Small Cap Fund as previously filed as Exhibit
(5)(w) with Registrant's Pre-Effective Amendment No. 2 on Form N-1A (File No.
33-58041), filed with the SEC on June 7, 1996 is filed herewith.
EX-99.B(5)(w) Investment Sub-Advisory Agreement between SIMC and Farrell Wako Global Investment
Management, Inc. with respect to the International Equity Fund as previously
filed as Exhibit (5)(x) with Registrant's Pre-Effective Amendment No. 2 on Form
N-1A (File No. 33-58041), filed with the SEC on June 7, 1996 is filed herewith.
EX-99.B(5)(x) Investment Sub-Advisory Agreement between SIMC and Seligman Henderson Co. with
respect to the International Equity Fund as previously filed as Exhibit (5)(y)
with Registrant's Pre-Effective Amendment No. 2 on Form N-1A (File No. 33-58041),
filed with the SEC on June 7, 1996 is filed herewith.
EX-99.B(5)(y) Investment Sub-Advisory Agreement between SIMC and Yamaichi Capital Management,
Inc. with respect to the International Equity Fund as previously filed as Exhibit
(5)(z) with Registrant's Pre-Effective Amendment No. 2 on Form N-1A (File No.
33-58041), filed with the SEC on June 7, 1996.
EX-99.B(5)(z) Investment Sub-Advisory Agreement between SIMC and Coronation Asset Management
(Proprietary) Limited with respect to the Emerging Markets Equity Fund is
incorporated herein by reference as Exhibit (5)(aa) to Registrant's
Post-Effective Amendment No. 1 on Form N-1A (File No. 33-58041), filed with the
SEC on December 30, 1996.
EX-99.B(5)(aa) Investment Sub-Advisory Agreement between SIMC and Furman Selz Capital Management
LLC with respect to the Small Cap Fund as previously filed as Exhibit (5)(bb) to
Registrant's Post-Effective Amendment No. 1 on Form N-1A (File No. 33-58041),
filed with the SEC on December 30, 1996 is filed herewith.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
- -------------------- -----------------------------------------------------------------------------------
<S> <C>
EX-99.B(5)(bb) Investment Sub-Advisory Agreement between SIMC and Lazard London International
Investment Management Limited with respect to the International Equity Fund as
previously filed as Exhibit (5)(cc) to Registrant's Post-Effective Amendment No.
1 on Form N-1A (File No. 33-58041), filed with the SEC on December 30, 1996 is
filed herewith.
EX-99.B(5)(cc) Investment Sub-Advisory Agreement between SIMC and Parametric Portfolio Associates
with respect to the Emerging Markets Equity Fund is incorporated herein by
reference as Exhibit (5)(dd) to Registrant's Post-Effective Amendment No. 1 on
Form N-1A (File No. 33-58041), filed with the SEC on December 30, 1996.
EX-99.B(5)(dd) Investment Sub-Advisory Agreement between SIMC and Yamaichi Capital Management,
Inc. And Yamaichi Capital Management (Singapore) Limited with respect to the
International Equity Fund is incorporated herein by reference as Exhibit (5)(ee)
to Registrant's Post-Effective Amendment No. 1 on Form N-1A (File No. 33-58041),
filed with the SEC on December 30, 1996.
EX-99.B(5)(ee) Schedule B dated January 1, 1997 to the Trust's Sub-Advisory Agreement dated June
14, 1996 between SIMC and LSV Asset Management is filed herewith.
EX-99.B(6) Distribution Agreement between the Trust and SEI Investments Distribution Co.
(formerly "SEI Financial Services Company") as previously filed with Registrant's
Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041), filed with the
SEC on April 26, 1996 is filed herewith.
EX-99.B(7) Not Applicable.
EX-99.B(8) Custodian Agreement between the Trust and CoreStates Bank, N.A. with respect to the
Trust's Large Cap, Small Cap, Core Fixed Income and High Yield Bond Funds as
previously filed with Registrant's Pre-Effective Amendment No. 2 on Form N-1A
(File No. 33-58041), filed with the SEC on June 7, 1996 is filed herewith.
EX-99.B(8)(a) Custodian Agreement between the Trust and State Street Bank and Trust Company is
filed herewith.
EX-99.B(9)(a) Administration Agreement dated June 14, 1996 between the Trust and SEI Fund
Management as previously filed with Registrant's Pre-Effective Amendment No. 1 on
Form N-1A (File No. 33-58041), filed with the SEC on April 26, 1996 is filed
herewith.
EX-99.B(10) Opinion and Consent of Counsel is incorporated herein by reference to Registrant's
Pre-Effective Amendment No. 2 on Form N-1A (File No. 33-58041), filed with the
SEC on June 7, 1996.
EX-99.B(11) Consent of Independent Public Accountants is filed herewith.
EX-99.B(12) Not Applicable.
EX-99.B(13) Not Applicable.
EX-99.B(14) Not Applicable.
EX-99.B(15) Not Applicable.
EX-99.B(16) Performance Quotation Computation is incorporated herein by reference to
Registrant's Pre-Effective Amendment No. 2 on Form N-1A (File No. 33-58041),
filed with the SEC on June 7, 1996.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
- -------------------- -----------------------------------------------------------------------------------
<S> <C>
EX-99.B(24) Powers of Attorney for Robert A. Nesher, William M. Doran, George J. Sullivan, Jr.,
F. Wendell Gooch, Mark E. Nagle, James M. Storey, David G. Lee and Frank E.
Morris are filed herewith.
EX-27.1 Financial Data Schedule for the Large Cap Fund is filed herewith.
EX-27.2 Financial Data Schedule for the Small Cap Fund is filed herewith.
EX-27.3 Financial Data Schedule for the Core Fixed Income Fund is filed herewith.
EX-27.4 Financial Data Schedule for the International Equity Fund is filed herewith.
</TABLE>
<PAGE>
f8
INVESTMENT ADVISORY AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
AGREEMENT made this 14th day of June, 1996, by and between SEI
Institutional Investments Trust, a Massachusetts business trust (the "Trust"),
and SEI Financial Management Corporation, (the "Adviser").
WHEREAS, the Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"),
consisting of several portfolios of shares, each having its own investment
policies; and
WHEREAS, the Trust desires to retain the Adviser to render investment
management services with respect to its Large Cap, Small Cap, Core Fixed Income,
High Yield Bond, International Fixed Income, Emerging Markets Equity and
International Equity Funds and such other portfolios as the Trust and the
Adviser may agree upon (the "Portfolios"), and the Adviser is willing to render
such services:
NOW, THEREFORE, in consideration of mutual covenants herein contained, the
parties hereto agree as follows:
1. DUTIES OF THE ADVISER. The Trust employs the Adviser to manage the
investment and reinvestment of the assets, to hire (subject to the approval
of the Trust's Board of Trustees and, except as otherwise permitted under
the terms of any exemptive relief obtained by the Adviser from the
Securities and Exchange Commission, or by rule or regulation, a majority of
the outstanding voting securities of any affected Portfolio(s)) and
thereafter supervise the investment activities of one or more sub-advisers
deemed necessary to carry out the investment program of any Portfolios of
the Trust, and to continuously review, supervise and (where appropriate)
administer the investment program of the Portfolios, to determine in its
discretion (where appropriate) the securities to be purchased or sold, to
provide the Administrator and the Trust with records concerning the
Adviser's activities which the Trust is required to maintain, and to render
regular reports to the Administrator and to the Trust's officers and
Trustees concerning the Adviser's discharge of the foregoing
responsibilities. The retention of a sub-adviser by the Adviser shall not
relieve the Adviser of its responsibilities under this Agreement.
The Adviser shall discharge the foregoing responsibilities subject to the
control of the Board of Trustees of the Trust and in compliance with such
policies as the Trustees may from time to time establish, and in compliance
with the objectives, policies, and limitations for each such Portfolio set
forth in the Trust's prospectus and statement of additional information, as
amended from time to time (referred to collectively as the "Prospectus"),
and applicable laws and regulations. The Trust will furnish the Adviser
from time to time with copies of all amendments or supplements to the
Prospectus, if any.
The Adviser accepts such employment and agrees, at its own expense, to
render the services and to provide the office space, furnishings and
equipment and the personnel (including any sub-advisers) required by it to
perform the services on the terms and for the compensation provided herein.
The Adviser will not, however, pay for the cost of securities, commodities,
and other investments (including brokerage commissions and other
transaction charges, if any) purchased or sold for the Trust.
2. DELIVERY OF DOCUMENTS. The Trust has furnished Adviser with copies properly
certified or authenticated of each of the following:
1
<PAGE>
(a) The Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of the Commonwealth of Massachusetts (such Agreement and
Declaration of Trust, as presently in effect and as it shall from time to
time be amended, is herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Portfolio(s).
3. OTHER COVENANTS. The Adviser agrees that it:
(a) will comply with all applicable Rules and Regulations of the
Securities and Exchange Commission and will in addition conduct its
activities under this Agreement in accordance with other applicable law;
(b) will place orders pursuant to its investment determinations for the
Portfolios either directly with the issuer or with any broker or dealer. In
executing Portfolio transactions and selecting brokers or dealers, the
Adviser will use its best efforts to seek on behalf of the Portfolio the
best overall terms available. In assessing the best overall terms available
for any transaction, the Adviser shall consider all factors that it deems
relevant, including the breadth of the market in the security, the price of
the security, the financial condition and execution capability of the
broker or dealer, and the reasonableness of the commission, if any, both
for the specific transaction and on a continuing basis. In evaluating the
best overall terms available, and in selecting the broker-dealer to execute
a particular transaction the Adviser may also consider the brokerage and
research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) provided to the Portfolio and/or other
accounts over which the Adviser or an affiliate of the Adviser may exercise
investment discretion. The Adviser is authorized, subject to the prior
approval of the Trust's Board of Trustees, to pay to a broker or dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction for any of the Portfolios which is in excess of the
amount of commission another broker or dealer would have charged for
effecting that transaction if, but only if, the Adviser determines in good
faith that such commission was reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer - -
viewed in terms of that particular transaction or terms of the overall
responsibilities of the Adviser to the Portfolio. In addition, the Adviser
if authorized to allocate purchase and sale orders for portfolio securities
to brokers or dealers (including brokers and dealers that are affiliated
with the Adviser or the Trust's principal underwriter) to take into
account the sale of shares of the Trust if the Adviser believes that the
quality of the transaction and the commission are comparable to what they
would be with other qualified firms. In no instance, however, will any
Portfolio's securities be purchased from or sold to the Adviser, any
sub-adviser engaged with respect to that Portfolio, the Trust's principal
underwriter, or any affiliated person of either the Trust, the Adviser, and
sub-adviser or the principal underwriter, acting as principal in the
transaction, except to the extent permitted by the Securities and Exchange
Commission and the 1940 Act.
4. COMPENSATION OF THE ADVISER. For the services to be rendered by the Adviser
as provided in Sections 1 and 2 of this Agreement, the Trust shall pay to
the Adviser compensation at the rate(s) specified in the Schedule(s) which
are attached hereto and made a part of this Agreement. Such compensation
shall be paid to the Adviser at the end of each month, and calculated by
applying a
2
<PAGE>
daily rate, based on the annual percentage rates as specified in the
attached Schedule(s), to the assets of the Portfolio. The fee shall be
based on the average daily net assets for the month involved. The Adviser
may, in its discretion and from time to time, waive a portion of its fee.
All rights of compensation under this Agreement for services performed as
of the termination date shall survive the termination of this Agreement.
5. EXCESS EXPENSES. If the expenses for any Portfolio for any fiscal year
(including fees and other amounts payable to the Adviser, but excluding
interest, taxes, brokerage costs, litigation, and other extraordinary
costs) as calculated every business day would exceed the expense
limitations imposed on investment companies by any applicable statute or
regulatory authority of any jurisdiction in which Shares are qualified for
offer and sale, the Adviser shall bear such excess cost.
However, the Adviser will not bear expenses of the Trust or any Portfolio
which would result in the Trust's inability to qualify as a regulated
investment company under provisions of the Internal Revenue Code. Payment
of expenses by the Adviser pursuant to this Section 5 shall be settled on a
monthly basis (subject to fiscal year end reconciliation) by a waiver of
the Adviser's fees provided for hereunder, and such waiver shall be treated
as a reduction in the purchase price of the Adviser's services.
6. REPORTS. The Trust and the Adviser agree to furnish to each other, if
applicable, current prospectuses, proxy statements, reports to
shareholders, certified copies of their financial statements, and such
other information with regard to their affairs as each may reasonably
request. The Adviser further agrees to furnish to the Trust, if applicable,
the same such documents and information pertaining to any sub-adviser as
the Trust may reasonably request.
7. STATUS OF THE ADVISER. The services of the Adviser to the Trust are not to
be deemed exclusive, and the Adviser shall be free to render similar
services to others so long as its services to the Trust are not impaired
thereby. The Adviser shall be deemed to be an independent contractor and
shall, unless otherwise expressly provided or authorized, have no authority
to act for or represent the Trust in any way or otherwise be deemed an
agent of the Trust. To the extent that the purchase or sale of securities
or other investments of any issuer may be deemed by the Adviser to be
suitable for two or more accounts managed by the Adviser, the available
securities or investments may be allocated in a manner believed by the
Adviser to be equitable to each account. It is recognized that in some
cases this may adversely affect the price paid or received by the Trust or
the size or position obtainable for or disposed by the Trust or any
Portfolio.
8. CERTAIN RECORDS. Any records required to be maintained and preserved
pursuant to the provisions of Rule 31a-1 and Rule 31a-2 promulgated under
the 1940 Act which are prepared or maintained by the Adviser (or any
sub-adviser) on behalf of the Trust are the property of the Trust and will
be surrendered promptly to the Trust on request. The Adviser further agrees
to preserve for the periods prescribed in Rule 31a-2 under the 1940 Act
the records required to be maintained under Rule 31a-1 under the 1940 Act.
9. LIMITATION OF LIABILITY OF THE ADVISER. The duties of the Adviser shall be
confined to those expressly set forth herein, and no implied duties are
assumed by or may be asserted against the Adviser hereunder. The Adviser
shall not be liable for any error of judgment or mistake of law or for any
loss arising out of any investment or for any act or omission in carrying
out its duties
3
<PAGE>
hereunder, except a loss resulting from willful misfeasance, bad faith or
gross negligence in the performance of its duties, or by reason of reckless
disregard of its obligations and duties hereunder, except as may otherwise
be provided under provisions of applicable state law which cannot be waived
or modified hereby. (As used in this Section 9, the term "Adviser" shall
include directors, officers, employees and other corporate agents of the
Adviser as well as that corporation itself).
10. PERMISSIBLE INTERESTS. Trustees, agents, and shareholders of the Trust are
or may be interested in the Adviser (or any successor thereof) as
directors, partners, officers, or shareholders, or otherwise; directors,
partners, officers, agents, and shareholders of the Adviser are or may be
interested in the Trust as Trustees, officers, shareholders or otherwise;
and the Adviser (or any successor) is or may be interested in the Trust as
a shareholder or otherwise subject to the provisions of applicable law. All
such interests shall be fully disclosed between the parties on an ongoing
basis and in the Trust's Prospectus as required by law. In addition,
brokerage transactions for the Trust may be effected through affiliates of
the Adviser or any sub-adviser if approved by the Board of Trustees,
subject to the rules and regulations of the Securities and Exchange
Commission.
11. DURATION AND TERMINATION. This Agreement, unless sooner terminated as
provided herein, shall remain in effect until two years from date of
execution, and thereafter, for periods of one year so long as such
continuance thereafter is specifically approved at least annually (a) by
the vote of a majority of those Trustees of the Trust who are not parties
to this Agreement or interested persons of any such party, cast in person
at a meeting called for the purpose of voting on such approval, and (b) by
the Trustees of the Trust or by vote of a majority of the outstanding
voting securities of each Portfolio; provided, however, that if the
shareholders of any Portfolio fail to approve the Agreement as provided
herein, the Adviser may continue to serve hereunder in the manner and to
the extent permitted by the 1940 Act and rules and regulations thereunder.
The foregoing requirement that continuance of this Agreement be
"specifically approved at least annually" shall be construed in a manner
consistent with the 1940 Act and the rules and regulations thereunder.
This Agreement may be terminated as to any Portfolio at any time, without
the payment of any penalty by vote of a majority of the Trustees of the
Trust or by vote of a majority of the outstanding voting securities of the
Portfolio on not less than 30 days nor more than 60 days written notice to
the Adviser, or by the Adviser at any time without the payment of any
penalty, on 90 days written notice to the Trust. This Agreement will
automatically and immediately terminate in the event of its assignment.
As used in this Section 11, the terms "assignment", "interested persons",
and a "vote of a majority of the outstanding voting securities" shall have
the respective meanings set forth in the 1940 Act and the rules and
regulations thereunder, subject to such exemptions as may be granted by the
Securities and Exchange Commission.
12. GOVERNING LAW. This Agreement shall be governed by the internal laws of the
Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however that nothing herein shall be construed as
being inconsistent with the 1940 Act.
13. NOTICE: Any notice, advice or report to be given pursuant to this Agreement
shall be deemed sufficient if delivered or mailed by registered, certified
or overnight mail, postage prepaid addressed by the party giving notice to
the other party at the last address furnished by the other party:
4
<PAGE>
To the Adviser at: SEI Financial Management Corporation
680 East Swedesford Road
Wayne, PA 19087
Attn: Legal Department
To the Trust at: SEI Financial Management Corporation
680 East Swedesford Road
Wayne, PA 19087
Attn: Legal Department
14. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
15. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject matter.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
A copy of the Declaration of Trust of the Trust is on file with the Secretary of
State of the Commonwealth of Massachusetts, and notice is hereby given that this
instrument is executed on behalf of the Trustees of the Trust as Trustees, and
is not binding upon any of the Trustees, officers, or shareholders of the Trust
individually but binding only upon the assets and property of the Trust.
No Portfolio of the Trust shall be liable for the obligations of any other
Portfolio of the Trust. Without limiting the generality of the foregoing, the
Adviser shall look only to the assets of a particular Portfolio for payment of
fees for services rendered to that Portfolio.
Where the effect of a requirement of the 1940 Act reflected in any provision of
this Agreement is altered by a rule, regulation or order of the Commission,
whether of special or general application, such provision shall be deemed to
incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day and year first written above.
SEI Institutional Investments Trust SEI Financial Management Corporation
By: Signature Appears Here By: Signature Appears Here
-------------------------------- --------------------------------
Attest: Signature Appears Here Attest: Signature Appears Here
---------------------------- ----------------------------
5
<PAGE>
SCHEDULE A
TO THE
INVESTMENT ADVISORY AGREEMENT
BETWEEN
SEI INSTITUTIONAL INVESTMENTS TRUST
AND
SEI FINANCIAL MANAGEMENT CORPORATION
Pursuant to Article 4, the Trust shall pay the Adviser compensation at an annual
rate as follows:
Large Cap .40%
Small Cap .65%
Core Fixed Income .30%
High Yield Bond .4875%
International Fixed Income .45%
Emerging Markets Equity 1.05%
International Equity .505%
6
<PAGE>
BY-LAWS
OF
SEI INSTITUTIONAL INVESTMENTS TRUST
SECTION 1. AGREEMENT AND DECLARATION OF
TRUST AND PRINCIPAL OFFICE
1.1 AGREEMENT AND DECLARATION OF TRUST. These By-Laws shall be subject
to the Agreement and Declaration of Trust, as from time to time in effect
(the "Declaration of Trust"), of SEI INSTITUTIONAL INVESTMENTS TRUST, the
Massachusetts business trust established by the Declaration of Trust (the
"Trust").
1.2 PRINCIPAL OFFICE OF THE TRUST. The principal office of the Trust
shall be located in Boston, Massachusetts.
SECTION 2. SHAREHOLDERS
2.1 MEETINGS. A meeting of the shareholders of the Trust or by any one
or more series of shares may be called at any time by the Trustees, by the
president or, if the Trustees and the president shall fail to call any
meeting of shareholders for a period of 30 days after written application of
one or more shareholders who at least 10% of all outstanding shares of the
Trust, if shareholders of all series are required under Declaration of Trust
to vote the aggregate and not by individual series at such meeting, or of any
series, if shareholders of such series are entitled under the Declaration of
Trust to vote by individual series at such meeting, then such shareholders
may call such meeting. If the meeting is a meeting of the shareholders of
one or more series of shares, but not a meeting of all shareholders of the
Trust, then only the shareholders of such one or more series shall be
entitled to notice of and to vote at the meeting. Each call of a meeting
shall state the place, date, hour and purpose of the meeting.
2.2 SPECIAL MEETINGS. A special meeting of the shareholders may be
called at any time by the Trustees, by the president or, if the Trustees and
the president shall fail to call any meeting of shareholders for a period of
30 days after written application of one or more shareholders who hold at
least 25% of all shares issued and outstanding and entitled to vote at the
meeting, then such shareholders may call such meeting. Each call of a
meeting shall state the place, date, hour and purposes of the meeting.
2.3 PLACE OF MEETINGS. All meetings of the shareholders shall be held
at the principal office of the Trust, or, to the extent permitted by the
Declaration of Trust, at such other place within the United States as shall
be designated by the Trustees or the president of the Trust.
<PAGE>
2.4 NOTICE OF MEETINGS. A written notice of each meeting of
shareholders, stating the place, date and hour and the purposes of the
meeting, shall be given at least seven days before the meeting to each
shareholder entitled to vote thereat by leaving such notice with him or at
his residence or usual place of business or by mailing it, postage prepaid,
and addressed to such shareholder at his address as it appears in the records
of the Trust. Such notice shall be given by the secretary or an assistant
secretary or by an officer designated by the Trustees. No notice of any
meeting of shareholders need be given to a shareholder if a written waiver of
notice, executed before or after the meeting by such shareholder or his
attorney thereunto duly authorized, is filed with the records of the meeting.
2.5 BALLOTS. No ballot shall be required for any election unless
requested by a shareholder present or represented at the meeting and entitled
to vote in the election.
2.6 PROXIES. Shareholders entitled to vote may vote either in person or
by proxy in writing dated not more than six months before the meeting named
therein, which proxies shall be filed with the secretary or other person
responsible to record the proceedings of the meeting before being voted.
Unless otherwise specifically limited by their terms, such proxies shall
entitle the holders thereof to vote at any adjournment of such meeting but
shall not be valid after the final adjournment of such meeting.
SECTION 3. TRUSTEES
3.1 COMMITTEES AND ADVISORY BOARD. The Trustees may appoint from their
number an executive committee and other committees. Except as the Trustees
may otherwise determine, any such committee may make rules for conduct of its
business. The Trustees may appoint an advisory board to consist of not less
than two nor more than five members. The members of the advisory board shall
be compensated in such manner as the Trustees may determine and shall confer
with and advise the Trustees regarding the investments and other affairs of
the Trust. Each member of the advisory board shall hold office until the
first meeting of the Trustees following the next annual meeting of the
shareholders and until his successor is elected and qualified, or until he
sooner dies, resigns, is removed, or becomes disqualified, or until the
advisory board is sooner abolished by the Trustees.
3.2 REGULAR MEETINGS. Regular meetings of the Trustees may be held without
call or notice at such places and at such times as the Trustees may from time to
time determine, provided that notice of the first regular meeting following any
such determination shall be given to absent Trustees. A regular meeting of the
Trustees may be held without call or notice immediately after and at the same
place as the annual meeting of the shareholders.
3.3 SPECIAL MEETINGS. Special meetings of the Trustees may be held at
any time and at any place designated in the call of the meetings, when called
by the Chairman of the Board, the president or the treasurer or by two or
more Trustees, sufficient notice thereof being given to each Trustee by the
secretary or an assistant secretary or by the officer or one of the Trustees
calling the meeting.
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<PAGE>
3.4 NOTICE. It shall be sufficient notice to a Trustee to send notice
by mail at least forty-eight hours or by telegram at least twenty-four hours
before the meeting addressed to the Trustee at his or her usual or last known
business or residence address or to give notice to him or her in person or by
telephone at least twenty-four hours before the meeting. Notice of a meeting
need not be given to any Trustee if a written waiver of notice, executed by
him or her before or after the meeting, is filed with the records of the
meeting, or to any Trustee who attends the meeting without protesting prior
thereto or at its commencement the lack of notice to him or her. Neither
notice of a meeting nor a waiver of a notice need specify the purposes of the
meeting.
3.5 QUORUM. At any meeting of the Trustees one-third of the Trustees
then in office shall constitute a quorum; provided, however, a quorum shall
not be less than two. Any meeting may be adjourned from time to time by a
majority of the votes cast upon the question, whether or not a quorum is
present, and the meeting may be held as adjourned without further notice.
SECTION 4. OFFICERS AND AGENTS
4.1 ENUMERATION; QUALIFICATION. The officers of the Trust shall be a
president, a treasurer, a secretary and such other officers, if any, as the
Trustees from time to time may in their discretion elect or appoint. The
Trust may also have such Agents, if any, as the Trustees from time to time
may in their discretion appoint. Any officer may be but none need be a
Trustee or shareholder. Any two or more offices may be held by the same
person.
4.2 POWERS. Subject to the other provisions of these By-Laws, each
officer shall have, in addition to the duties and powers herein and in the
Declaration of Trust set forth, such duties and powers as are commonly
incident to his or her office as if the Trust were organized as a
Massachusetts business corporation and such other duties and powers as the
Trustees may from time to time designate.
4.3 ELECTION. The president, the treasurer and the secretary shall be
elected annually by the Trustees at their first meeting following the annual
meeting of the shareholders. Other officers, if any, may be elected or
appointed by the Trustees at said meeting or at any other time.
4.4 TENURE. The president, the treasurer and the secretary shall hold
office until the first meeting of Trustees following the next annual meeting
of the shareholders and until their respective successors are chosen and
qualified, or in each case until he or she sooner dies, resigns, is removed
or becomes disqualified. Each agent shall retain his or her authority at the
pleasure of the Trustees.
4.5 PRESIDENT AND VICE PRESIDENTS. The president shall be the chief
executive officer of the Trust. The president shall, subject to the control
of the Trustees, have general charge and supervision of the business of the
Trust. Any vice president shall have such duties and powers as shall be
designated from time to time by the Trustees.
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<PAGE>
4.6 CHAIRMAN OF THE BOARD. If a Chairman of the Board of Trustees is
elected, he shall have the duties and powers specified in these By-Laws and,
except as the Trustees shall otherwise determine, preside at all meetings of
the shareholders and of the Trustees at which he or she is present and have
such other duties and powers as may be determined by the Trustees.
4.7 TREASURER AND CONTROLLER. The treasurer shall be the chief
financial officer of the Trust and subject to any arrangement made by the
Trustees with a bank or trust company or other organization as custodian or
transfer or shareholder services agent, shall be in charge of its valuable
papers and shall have such other duties and powers as may be designated from
time to time by the Trustees or by the president. If at any time there shall
be no controller, the treasurer shall also be the chief accounting officer of
the Trust and shall have the duties and powers prescribed herein for the
controller. Any assistant treasurer shall have such duties and powers as
shall be designated from time to time by the Trustees.
The controller, if any be elected, shall be the chief accounting officer of
the Trust and shall be in charge of its books of account and accounting
records. The controller shall be responsible for preparation of financial
statements of the Trust and shall have such other duties and powers as may be
designated from time to time by the Trustees or the president.
4.8 SECRETARY AND ASSISTANT SECRETARIES. The secretary shall record all
proceedings of the shareholders and the Trustees in books to be kept
therefor, which books shall be kept at the principal office of the Trust. In
the absence of the secretary from any meeting of shareholders or Trustees, an
assistant secretary, or if there be none or he or she is absent, a temporary
clerk chosen at the meeting shall record the proceedings thereof in the
aforesaid books.
SECTION 5. RESIGNATION AND REMOVALS
Any Trustee, officer or advisory board member may resign at any time by
delivering his or her resignation in writing to the Chairman of the Board, the
president, the treasurer or the secretary or to a meeting of the Trustees. The
Trustees may remove any officer elected by them with or without cause by a vote
of a majority of the Trustees then in office. Except to the extent expressly
provided in a written agreement with the Trust, no Trustee, officer, or advisory
board member resigning, and no officer or advisory board member removed shall
have any right to any compensation for any period following his or her
resignation or removal, or any right to damages on account of such removal.
SECTION 6. VACANCIES
A vacancy in any office may be filled at any time. Each successor shall hold
office for the unexpired term, and in the case of the president, the treasurer
and the secretary, until his or her successor is chosen and qualified, or in
each case until he or she sooner dies, resigns, is removed or becomes
disqualified.
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<PAGE>
SECTION 7. SHARES
7.1 SHARE CERTIFICATES. No certificates certifying the ownership of
shares shall be issued except as the Trustees may otherwise authorize. In
the event that the Trustees authorize the issuance of share certificates,
subject to the provisions of Section 7.3, each shareholder shall be entitled
to a certificate stating the number of shares owned by him or her, in such
form as shall be prescribed from time to time by the Trustees. Such
certificate shall be signed by the president or a vice president and by the
treasurer or an assistant treasurer. Such signatures may be facsimiles if
the certificate is signed by a transfer or shareholder services agent or by a
registrar, other than a Trustee, officer or employee of the Trust. In case
any officer who has signed or whose facsimile signature has been placed on
such certificate shall have ceased to be such officer before such certificate
is issued, it may be issued by the Trust with the same effect as if he or she
were such officer at the time of its issue.
In lieu of issuing certificates for shares, the Trustees or the transfer or
shareholder services agent may either issue receipts therefor or may keep
accounts upon the books of the Trust for the record holders of such shares, who
shall in either case be deemed, for all purposes hereunder, to be the holders of
certificates for such shares as if they had accepted such certificates and shall
be held to have expressly assented and agreed to the terms hereof.
7.2 LOSS OF CERTIFICATES. In the case of the alleged loss or destruction
or the mutilation of a share certificate, a duplicate certificate may be issued
in place thereof, upon such terms as the Trustees may prescribe.
7.3 DISCONTINUANCE OF ISSUANCE OF CERTIFICATES. The Trustees may at any
time discontinue the issuance of share certificates and may, by written
notice to each shareholder, require the surrender of share certificates to
the Trust for cancellation. Such surrender and cancellation shall not affect
the ownership of shares in the Trust.
SECTION 8. RECORD DATE
The Trustees may fix in advance a time, which shall not be more than 60 days
before the date of any meeting of shareholders or the date for the payment of
any dividend or making of any other distribution to shareholders, as the record
date for determining the shareholders having the right to notice and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution, and in such case only shareholders of record on such record
date shall have such right, notwithstanding any transfer of shares on the books
of the Trust after the record date.
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<PAGE>
SECTION 9. SEAL
The seal of the Trust shall, subject to alteration by the Trustees, consist of a
flat-faced circular die with the word "Massachusetts", together with the name of
the Trust and the year of its organization, cut or engraved thereon; but, unless
otherwise required by the Trustees, the seal shall not be necessary to be placed
on, and its absence shall not impair the validity of, any document, instrument
or other paper executed and delivered by or on behalf of the Trust.
SECTION 10. EXECUTION OF PAPERS
Except as the Trustees may generally or in particular cases authorize the
execution thereof in some other manner, all deeds, leases, transfers, contracts,
bonds, notes, checks, drafts and other obligations made, accepted or endorsed by
the Trust shall be signed, and any transfers of securities standing in the name
of the Trust shall be executed, by the president or by one of the vice
presidents or by the treasurer or by whomsoever else shall be designated for
that purpose by the vote of the Trustees and need not bear the seal of the
Trust.
SECTION 11. FISCAL YEAR
The fiscal year of the Trust shall end on such date in each year as the Trustees
shall from time to time determine.
SECTION 12. PROVISIONS RELATING TO THE
CONDUCT OF THE TRUST'S BUSINESS
12.1 DEALINGS WITH AFFILIATES. No officer, Trustee or agent of the Trust
and no officer, director or agent of any investment advisor shall deal for or
on behalf of the Trust with himself as principal or agent, or with any
partnership, association or corporation in which he has a material financial
interest; provided that the foregoing provisions shall not prevent (a)
officers and Trustees of the Trust from buying, holding or selling shares in
the Trust, or from being partners, officers or directors of or financially
interested in any investment advisor to the Trust or in any corporation, firm
or association which may at any time have a distributor's or principal
underwriter's contract with the Trust; (b) purchases or sales of securities
or other property if such transaction is permitted by or is exempt or
exempted from the provisions of the Investment Company Act of 1940 or any
Rule or Regulation thereunder and if such transaction does not involve any
commission or profit to any security dealer who is, or one or more of whose
partners, shareholders, officers or directors is, an officer or Trustees of
the Trust or an officer or director of the investment advisor, manager or
principal underwriter of the Trust; (c) employment of legal counsel,
registrar, transfer agent, shareholder services, dividend disbursing agent or
custodian who is, or has a partner, stockholder, officer or director who is,
an officer or Trustee of the Trust; (d) sharing statistical, research and
management expenses, including
-6-
<PAGE>
office hire and services, with any other company in which an officer or
Trustee of the Trust is an officer or director or financially interested.
12.2 DEALING IN SECURITIES OF THE TRUST. The Trust, the investment
advisor, any corporation, firm or association which may at any time have an
exclusive distributor's or principal underwriter's contract with the Trust
(the "distributor") and the officers and Trustees of the Trust and officers
and directors of every investment advisor and distributor, shall not take
long or short positions in the securities of the Trust, except that:
(a) the distributor may place orders with the Trust for its shares
equivalent to orders received by the distributor;
(b) shares of the Trust may be purchased at not less than net asset
value for investment by the investment advisor and by officers and
directors of the distributor, investment advisor, or the Trust and by
any trust, pension, profit-sharing or other benefit plan for such
persons, no such purchase to be in contravention of any applicable
state or federal requirement.
12.3 LIMITATION ON CERTAIN LOANS. The Trust shall not make loans to any
officer, Trustee or employee of the Trust or any investment advisor or
distributor or their respective officers, directors or partners or employees.
12.4 CUSTODIAN. All securities and cash owned by the Trust shall be
maintained in the custody of one or more banks or trust companies having
(according to its last published report) not less than two million dollars
($2,000,000) aggregate capital, surplus and undivided profits (any such bank
or trust company is hereinafter referred to as the "custodian"); provided,
however, the custodian may deliver securities as collateral on borrowings
effected by the Trust, provided, that such delivery shall be conditioned upon
receipt of the borrowed funds by the custodian except where additional
collateral is being pledged on an outstanding loan and the custodian may
deliver securities lent by the Trust against receipt of initial collateral
specified by the Trust. Subject to such rules, regulations and orders, if
any, as the Securities and Exchange Commission may adopt, the Trust may, or
may permit any custodian to, deposit all or any part of the securities owned
by the Trust in a system for the central handling of securities operated by
the Federal Reserve Banks, or established by a national securities exchange
or national securities association registered with said Commission under the
Securities Exchange Act of 1934, or such other person as may be permitted by
said Commission, pursuant to which system all securities of any particular
class or series of any issue deposited with the system are treated as
fungible and may be transferred or pledged by bookkeeping entry, without
physical delivery of such securities.
The Trust shall upon the resignation or inability to serve of its custodian or
upon change of the custodian:
(a) in the case of such resignation or inability to serve use its best
efforts to obtain a successor custodian;
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<PAGE>
(b) require that the case and securities owned by this corporation be
delivered directly to the successor custodian; and
(c) in the event that no successor custodian can be found, submit to
the shareholders, before permitting delivery of the case and securities
owned by this Trust otherwise than to a successor custodian, the
question whether or not this Trust shall be liquidated or shall
function without a custodian.
12.5 REPORTS TO SHAREHOLDERS; DISTRIBUTIONS FROM REALIZED GAINS. The Trust
shall send to each shareholder of record at least annually a statement of the
condition of the Trust and of the results of its operation, containing all
information required by applicable laws or regulations.
SECTION 13. AMENDMENTS
These By-Laws may be amended or repealed, in whole or in part, by a majority of
the Trustees then in office at any meeting of the Trustees, or by one or more
writings signed by such majority.
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<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
AGREEMENT made this 14th day of June, 1996, by and among SEI Financial
Management Corporation, (the "Adviser") and 1838 Investment Advisors, L.P. (the
"Sub-Adviser").
WHEREAS, SEI Institutional Investments Trust, a Massachusetts business
trust (the "Trust") is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated June 14, 1996 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the Small Cap Portfolio
(the "Portfolio"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain the
Sub-Adviser to provide investment advisory services to the Adviser in connection
with the management of the Portfolio, and the Sub-Adviser is willing to render
such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Sub-Adviser shall manage the investment
operations of the Portfolio and the composition of the Portfolio, including
the purchase, retention and disposition of securities and other assets, in
accordance with the Portfolio's investment objectives, policies and
restrictions as stated in the Portfolio's prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall provide supervision of the Portfolio's investments
and determine from time to time what investments and securities will be
purchased, retained or sold by the Portfolio, and what portion of the
assets will be invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement, the
Sub-Adviser shall act in conformity with the Trust's Declaration of Trust
(as defined herein) and the Prospectus and with the instructions and
directions of the Adviser and of the Board of Trustees of the Trust and
will conform to and comply with the requirements of the 1940 Act, the
Internal Revenue Code of 1986, and all other applicable federal and state
laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the securities to be purchased or sold by
the Portfolio and will place orders with or through such persons, brokers
or dealers to carry out the policy with respect to brokerage set forth in
the Portfolio's Registration Statement (as defined herein) and Prospectus
or as the Board of Trustees or the Adviser may direct from time to time, in
conformity with federal securities laws. In executing Portfolio
transactions and selecting brokers or dealers, the Sub-Adviser will use its
best efforts to seek on behalf of the Portfolio the best overall terms
available. In assessing the best overall terms available for any
transaction, the Sub-Adviser shall consider all factors that it deems
relevant, including the breadth of the market in the security, the price of
the security, the financial condition and execution capability of the
broker or dealer, and the reasonableness of the commission, if any, both
for the specific transaction and on a continuing basis. In evaluating the
best overall terms available, and in selecting the broker-dealer to execute
a particular transaction the Sub-Adviser may also consider the brokerage
and research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) provided to the Portfolio and/or other
accounts over which the Sub-Adviser or an affiliate of the Sub-Adviser may
exercise investment discretion. The Sub-Adviser is authorized, subject to
the prior approval of the Trust's Board of Trustees, to pay to a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for any of the Portfolios which is in
excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if, but only if, the Sub-Adviser
determines in good faith that such commission was reasonable in relation to
the value of the brokerage and research services provided by such broker or
dealer -- viewed in terms of that particular transaction or terms of the
overall responsibilities of the Sub-Adviser
<PAGE>
provided to the Portfolio and/or other accounts over which the Sub-Adviser
or an affiliate of the Sub-Adviser may exercise investment discretion. The
Sub-Adviser is authorized, subject to the prior approval of the Trust's
Board of Trustees, to pay to a broker or dealer who provides such brokerage
and research services a commission for executing a portfolio transaction
for any of the Portfolios which is in excess of the amount of commission
another broker or dealer would have charged for effecting that transaction
if, but only if, the Sub-Adviser determines in good faith that such
commission was reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer - - viewed in terms of
that particular transaction or terms of the overall responsibilities of the
Sub-Adviser to the Portfolio. In addition, the Sub-Adviser if authorized to
allocate purchase and sale orders for portfolio securities to brokers or
dealers (including brokers and dealers that are affiliated with the
Sub-Adviser or the Trust's principal underwriter) to take into account the
sale of shares of the Trust if the Sub-Adviser believes that the quality of
the transaction and the commission are comparable to what they
would be with other qualified firms. In no instance, however, will any
Portfolio's securities be purchased from or sold to the Sub-Adviser, the
Trust's principal underwriter, or any affiliated person of either the
Trust, the Sub-Adviser or the principal underwriter, acting as principal
in the transaction. except to the extent permitted by the Securities and
Exchange Commission and the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to the
Portfolio's portfolio transactions required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act
and shall render to the Adviser or Board of Trustees such periodic and
special reports as the Adviser or Board of Trustees may reasonably request.
The Sub-Adviser shall keep the Portfolio's books and records required to be
maintained by the Sub-Adviser of this Agreement and shall timely furnish to
the Adviser all information relating to the Sub-Adviser's services under
this Agreement needed by the Adviser to keep the other books and records of
the Portfolio required by Rule 31a-1 under the 1940 Act. The Sub-Adviser
shall also furnish to the Adviser any other information that is required to
be filled by the Adviser or the Trust with the Securities and Exchange
Commission ("SEC") or sent to shareholders under the 1940 Act (including
the rules adopted thereunder) or any exemptive or other relief that the
Adviser or the Trust obtains from the SEC. The Sub-Adviser agrees that all
records that it maintains on behalf of the Portfolio are property of the
Portfolio and the Sub-Adviser will surrender promptly to the Portfolio any
of such records upon the Portfolio's request; provided, however, that the
Sub-Adviser may retain a copy of such records. In addition, for the
duration of this Agreement, the Sub-Adviser shall preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records as are
required to be maintained by it pursuant to this Agreement, and shall
transfer said records to any successor Sub-Adviser upon the termination of
his Agreement (or, if there is no successor Sub-Adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Portfolio's custodian on each business
day with information relating to all transactions concerning the
Portfolio's assets and shall provide the Adviser with such information upon
request of the Adviser.
(f) The investment management services provided by the Sub-Adviser under this
Agreement are not to be deemed exclusive and the Sub-Adviser shall be free
to render similar services to others, as long as such services do not
impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill its
commitment under this Agreement.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners, officers
or employees.
<PAGE>
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Portfolio pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's performance of its
duties under this Agreement; provided, however, that nothing herein shall
be construed to relieve the Sub-Adviser of responsibility for compliance
with the Portfolio's investment objectives, policies, and restrictions, as
provided in Section I hereunder.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the Secretary
of State of the Commonwealth of Massachusetts (such Agreement and
Declaration of Trust, as in effect on the date of this Agreement and as
amended from time to time, herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Portfolio.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s) which
is attached hereto and made part of this Agreement. The fee will be
calculated based on the average monthly market value of investments under
management and will be paid to the Sub-Adviser monthly. The Sub-Adviser
may, in its discretion and from time to time, waive a portion of its fee.
5. LIMITATION OF LIABILITY OF THE SUB-ADVISER. The Sub-Adviser shall not be
liable for any error of judgment or for any loss suffered by the Adviser in
connection with performance of its obligations under this Agreement, except
a loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services (in which case any award of damages
shall be limited to the period and the amount set forth in Section 36(b)(3)
of the 1940 Act), or a loss resulting from willful misfeasance, bad faith
or negligence on the Sub-Adviser's part in the performance of its duties or
from reckless disregard of its obligations and duties under this Agreement,
except as may otherwise be provided under provisions of applicable state
law which cannot be waived or modified hereby.
6. REPORTS. During the term of this Agreement, the Adviser agrees to furnish
the Sub-Adviser at its principal office all prospectuses, proxy statements,
reports to stockholders, sales literature or other materials prepared for
distribution to stockholders of the Portfolios, the Trust or the public
that refer to the Sub-Adviser or its clients in any way prior to use
thereof and not to use material if the Sub-Adviser reasonably objects in
writing within five business days (or such other period as may be mutually
agreed) after receipt thereof. The Sub-Adviser's right to object to such
materials is limited to the portions of such materials that expressly
relate to the Sub-Adviser, its services and its clients. The Adviser agrees
to use its reasonable best efforts to ensure that materials prepared by its
employees or agents or its affiliates that refer to the Sub-Adviser or its
clients in any way are consistent with those materials previously approved
by the Sub-Adviser as referenced in the first sentence of this paragraph.
Sales literature may be furnished to the Sub-Adviser by first class or
overnight mail, facsimile transmission equipment or hand delivery.
7. CHANGE IN THE SUB-ADVISER'S MEMBERSHIP. The Sub-Adviser agrees that it
shall notify the Trust of any change in the membership of the Sub-Adviser
within a reasonable time after such change.
<PAGE>
8. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or
damages (including reasonable attorney's fees and other related expenses)
howsoever arising from or in connection with this Agreement or the
performance by the Sub-Adviser of its duties hereunder, provided, however,
that the Sub-Adviser shall not be required to indemnify or otherwise hold
the Adviser harmless under this Section 8 where the claim against, or the
loss, liability or damage experienced by the Adviser, is caused by or is
otherwise directly related to the Adviser's own willful misfeasance, bad
faith or negligence, or to the reckless disregard of its duties under this
Agreement.
9. DURATION AND TERMINATION. This Agreement shall become effective upon its
approval by the Trust's Board of Trustees and by the vote of a majority of
the outstanding voting securities of the Portfolio; provided, however, that
at any time the Adviser shall have obtained exemptive relief from the SEC
permitting it to engage a Sub-Adviser without first obtaining approval of
the Agreement from a majority of the outstanding voting securities of the
Portfolio(s) involved, the Agreement shall become effective upon its
approval by the Trust's Board of Trustees. Any Sub-Adviser so selected and
approved shall be without the protection accorded by shareholder approval
of an investment adviser's receipt of compensation under Section 36(b) of
the 1940 Act.
This Agreement shall continue in effect for a period of more than two years
from the date hereof only so long as continuance is specifically approved
at least annually in conformance with the 1940 Act; provided, however, that
this Agreement may be terminated with respect to the Portfolio (a) by the
Portfolio at any time, without the payment of any penalty, by the vote of a
majority of Trustees of the Trust or by the vote of a majority of the
outstanding voting securities of such Portfolio, (b) by the Adviser at any
time, without the payment of any penalty, on not more than 60 days' nor
less than 30 days' written notice to the other party, or (c) by the
Sub-Adviser at any time, without the payment of any penalty, on 90 days'
written notice to the other party. This Agreement shall terminate
automatically and immediately in the event of its assignment, or in the
event of a termination of the Adviser's agreement with the Trust. As used
in this Section 9, the terms "assignment" and "vote of a majority of the
outstanding voting securities" shall have the respective meanings set forth
in the 1940 Act and the rules and regulations thereunder, subject to such
exceptions as may be granted by the Commission under the 1940 Act.
10. GOVERNING LAW. This Agreement shall be governed by the internal laws of the
Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
11. SEVERABILITY. Should any part of this Agreement be held invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
12. NOTICE: Any notice, advice or report to be given pursuant to this Agreement
shall be deemed sufficient if delivered or mailed by registered, certified
or overnight mail, postage prepaid addressed by the party giving notice to
the other party at the last address furnished by the other party:
To the Adviser at: SEI Financial Management Corporation
680 East Swedesford Road
Wayne, PA 19087
Attention: Legal Department
<PAGE>
To the Sub-Adviser at: 1838 Investment Advisors, L.P.
5 Radnor Corporate Center
100 Matsonford Road, Suite 320
Radnor, Pa 19087
13. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject matter.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
Where the effect of a requirement of the 1940 Act reflected in any provision of
this Agreement is altered by a rule, regulation or order of the Commission,
whether of special or general application, such provision shall be deemed to
incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI Financial Management Corporation 1838 Investment Advisors, L.P.
By: /s/ Kevin Robins By: /s/ W. Thacher Brown
Title: Sr. Vice President Title: President
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI FINANCIAL MANAGEMENT CORPORATION
AND
1838 INVESTMENT ADVISORS, L.P.
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
Small Cap %
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
AGREEMENT made this 14th day of June 1996, by and among SEI Financial
Management Corporation, (the "Adviser") and Acadian Asset Management, Inc.
(the "Sub-Adviser")
WHEREAS, SEI Institutional Investments Trust, a Massachusetts business
trust (the "Trust") is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated June 14, 1996 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the International Equity
Portfolio (the "Portfolio"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain
the Sub-Adviser to provide investment advisory services to the Adviser in
connection with the management of the Portfolio, and the Sub-Advisor is
willing to render such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1 DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Sub-Adviser shall manage the investment
operations of the Portfolio and the composition of the Portfolio, including
the purchase, retention and disposition of securities and other assets, in
accordance with the Portfolio's investment objectives, policies and
restrictions as stated in the Portfolio's prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following.
(a) The Sub-Adviser shall provide supervision of the Portfolio's investments
and determine from time to time what investments and securities will be
purchased, retained or sold by the Portfolio, and what portion of the
assets will be invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement, the
Sub-Adviser shall act in conformity with the Trust's Declaration of Trust
(as defined herein) and the Prospectus and with the instructions and
directions of the Adviser and of the Board of Trustees of the Trust and
will conform to and comply with the requirements of the 1940 Act, the
Internal Revenue Code of 1986, and all other applicable federal and state
laws and regulations, as each is amended from time to time
(c) The Sub-Adviser shall determine the securities to be purchased or sold by
the Portfolio and will place orders with or through such persons, brokers
or dealers to carry out the policy with respect to brokerage set forth in
the Portfolio's Registration Statement (as defined herein) and Prospectus
or as the Board of Trustees or the Adviser may direct from time to time, in
conformity with federal securities laws. In executing Portfolio
transactions and selecting brokers or dealers, the Sub-Adviser will use its
best efforts to seek on behalf of the Portfolio the best overall terms
available. In assessing the best overall terms available for any
transaction, the Sub-Adviser shall consider all factors that it deems
relevant, including the breadth of the market in the security, the pace of
the security, the financial condition and execution capability of the
broker or dealer, and the reasonableness of the commission, if any, both
for the specific transaction and on a continuing basis. In evaluating the
best overall terms available, and in selecting the broker-dealer to execute
a particular transaction the Sub-Adviser may also consider the brokerage
and research services (as those terms are defined in Section 28(e) of the
securities Exchange Act of 1934)
<PAGE>
provided to the Portfolio and/or other accounts over which the Sub-Adviser
or an affiliate of the Sub-Adviser may exercise investment discretion. The
Sub-Adviser is authorized, subject to the prior approval of the Trust's
Board of Trustees, to pay to a broker or dealer who provides such brokerage
and research services a commission for executing a portfolio transaction
for any of the Portfolios which is in excess of the amount of commission
another broker or dealer would have charged for effecting that transaction
if, but only if, the Sub-Adviser determines in good faith that such
commission was reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer--viewed in terms of that
particular transaction or terms of the overall responsibilities of the
Sub-Adviser to the Portfolio. In addition, the Sub-Adviser if authorized to
allocate purchase and sale orders for portfolio securities to brokers or
dealers (including brokers and dealers that are affiliated with the
Sub-Advisor or the Trust's principal underwriter to take into account
the sale of shares of the Trust if the Sub-Adviser believes that the quality
of the transaction and the commission are comparable to what they would be
with other qualified firms. In no instance, however, will any Portfolio's
securities be purchased from or sold to the Sub-Adviser, the Trust's
principal underwriter, or any affiliated person of either the Trust, the
Sub-Adviser or the principal underwriter, acting as principal in the
transaction, except to the extent permitted by the Securities and Exchange
Commission and the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to the
Portfolio's portfolio transactions required by subparagraphs (b)(5), (6),
(7), (9), (10) and (I 1) and paragraph (f) of Rule 31a-1 under the 1940
Act and shall render to the Adviser or Board of Trustees such periodic and
special reports as the Adviser or Board of Trustees may reasonably request.
The Sub-Adviser shall keep the Portfolio's books and records required to be
maintained by the Sub-Advisor of this Agreement and shall timely furnish to
the Adviser all information relating to the Sub-Advisor services under this
Agreement needed by the Adviser to keep the other books and records of the
Portfolio required by Rule 3la-1 under the 1940 Act. The Sub-Adviser shall
also furnish to the Adviser any other information that is required to be
filled by the Adviser or the Trust with the Securities and Exchange
Commission ("SEC") or sent to shareholders under the 1940 Act (including the
rules adopted thereunder) or any exemptive or other relief that the Adviser
or the Trust obtains from the SEC. The Sub-Adviser agrees that all records
that it maintains on behalf of the Portfolio are property of the Portfolio
and the Sub-Adviser will surrender promptly to the Portfolio any of such
records upon the Portfolio's Request; provided, however, that the
Sub-Adviser may retain a copy of such records. In addition, for the
duration of this Agreement, the Sub-Adviser shall preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records as are
required to be maintained by it pursuant to this Agreement, and shall
transfer said records to any successor Sub-Adviser upon the termination of
this Agreement (or, if there is no successor Sub-Adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Portfolio's custodian on each business
day with information relating to all transactions concerning the
Portfolio's assets and shall provide the Adviser with such information upon
request of the Adviser.
(f) The investment management services provided by the Sub-Adviser under this
Agreement are not to be deemed exclusive and the Sub-Adviser shall be free
to render similar services to others, as long as such services Do not
impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill its
commitment under this Agreement.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners,
officers or employees.
<PAGE>
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Portfolio pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's performance of
its duties under this Agreement; provided, however, that nothing herein
shall be construed to relieve the Sub-Adviser of responsibility for
compliance with the Portfolio's investment objectives, policies, and
restrictions, as provided in Section I hereunder.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the Secretary
of State of the Commonwealth of Massachusetts (such Agreement and
Declaration of Trust, as in effect on the date of this Agreement and as
amended from time to time, herein called the "Declaration of Trust";
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Portfolio.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s) which
is attached hereto and made part of this Agreement. The fee will be
calculated based on the average monthly market value of investments under
management and will be paid to the Sub-Adviser monthly. The Sub-Adviser may,
in its discretion and from time to time, waive a portion of its fee.
5. LIMITATION OF LIABILITY OF THE SUB-ADVISER. The Sub-Adviser shall not be
liable for any error of judgment or for any loss suffered by the Adviser in
connection with performance of its obligations under this Agreement, except
a loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services (in which case any award of damages
shall be limited to the period and the amount set forth in Section 36(b)(3)
of the 1940 Act), or a loss resulting from willful misfeasance, bad faith
or negligence on the Sub-Adviser's part in the performance of its duties or
from reckless disregard of its obligations and duties under this Agreement,
except as may otherwise be provided under provisions of applicable state
law which cannot be waived or modified hereby.
6. REPORTS. During the term of this Agreement, the Adviser agrees to furnish
the Sub-Adviser at its principal office all prospectuses, proxy statements,
reports to stockholders, sales literature or other materials prepared for
distribution to stockholders of the Portfolios, the Trust or the public
that refer to the Sub-Adviser or its clients in any way prior to use
thereof and not to use material if the Sub-Adviser reasonably objects in
writing within five business days (or such other period as may be mutually
agreed) after receipt thereof. The Sub-Adviser's right to object to such
materials is limited to the portions of such materials that expressly
relate to the Sub-Adviser, its services and its clients. The Adviser agrees
to use its reasonable best efforts to ensure that materials prepared by its
employees or agents or its affiliates that refer to the Sub-Adviser or its
clients in any way are consistent with those materials previously approved
by the Sub-Adviser as referenced in the first sentence of this paragraph.
Sales literature may be furnished to the Sub-Adviser by first class or
overnight mail, facsimile transmission equipment or hand delivery.
7 INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or damages
(including reasonable attorney's fees and other related
<PAGE>
expenses) howsoever arising from or in connection with this Agreement or
the performance by the Sub-Adviser of its duties hereunder; provided,
however, that the Sub-Adviser shall not be required to indemnify or
otherwise hold the Adviser harmless under this Section 7 where the claim
against, or the loss liability or damage experienced by the Adviser, is
caused by or is otherwise directly related to the Adviser's own willful
misfeasance, bad faith or negligence, or to the reckless disregard of its
duties under this Agreement.
8 DURATION AND TERMINATION. This Agreement shall become effective upon its
approval by the Trust's Board of Trustees and by the vote of a majority of
the outstanding voting securities of the Portfolio; provided, however, that
at any time the Adviser shall have obtained exemptive relief from the SEC
permitting it to engage a Sub-Adviser without first obtaining approval of
the Agreement from a majority of the outstanding voting securities of the
Portfolio(s) involved, the Agreement shall become effective upon its
approval by the Trust's Board of Trustees. Any Sub-Adviser so selected and
approved shall be without the protection accorded by shareholder approval
of an investment adviser's receipt of compensation under Section 36(b) of
the 1940 Act.
This Agreement shall continue in effect for a period of more than two years
from the date hereof only so long as continuance is specifically approved
at least annually in conformance with the 1940 Act; provided, however, that
this Agreement may be terminated with respect to the Portfolio (a) by the
Portfolio at any time, without the payment of any penalty, by the vote of a
majority of Trustees of the Trust or by the vote of a majority of the
outstanding voting securities of such Portfolio, (b) by the Adviser at any
time, without the payment of any penalty, on not more than 60 days' nor
less than 30 days' written notice to the other party, or (c) by the
Sub-Adviser at any time, without the payment of any penalty, on 90 days'
written notice to the other party. This Agreement shall terminate
automatically and immediately in the event of its assignment, or in the
event of a termination of the Adviser's agreement with the Trust. As used
in this Section 8, the terms "assignment" and "vote of a majority of the
outstanding voting securities shall have the respective meanings set forth
in the 1940 Act and the rules and regulations thereunder, subject to such
exceptions as may be granted by the Commission under the 1940 Act.
9. GOVERNING LAW. This Agreement shall be governed by the internal laws of the
Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
10. SEVERABILITY. Should any part of this Agreement be held invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
11. NOTICE: Any notice, advice or report to be given pursuant to this Agreement
shall be deemed sufficient if delivered or mailed by registered, certified
or overnight mail, postage prepaid addressed by the party giving notice to
the other party at the last address furnished by the other party:
To the Adviser at: SEI Financial Management Corporation
680 East Swedesford Road
Wayne, PA 19087
Attention: Legal Department
<PAGE>
To the Sub-Adviser at: Acadian Asset Management, Inc
Two International Place
Boston, MA 02110
Attention: President
12 ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject matter.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument
Where the effect of a requirement of the 1940 Act reflected in any provision of
this Agreement is altered by a rule, regulation or order of the Commission,
whether of special or general application, such provision shall be deemed to
incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their of ficers designated below as of the day and year first
written above.
SEI Financial Management Corporation Acadian Asset Management, Inc.
By: /s/ Kevin Robins By: Signature Apppears Here
--------------------------------- --------------------------------
Kevin Robins
Title: S.V.P. Title: Senior Vice President
------------------------------ -----------------------------
5/21/96
<PAGE>
Schedule A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEC FINANCIAL MANAGEMENT CORPORATION
AND
ACADIAN ASSET MANAGEMENT, INC.
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
International Equity % on first $150 million
% on next $150 million
% over $300 million
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
AGREEMENT made this 14th day of June, 1996, by and among SEI Financial
Management Corporation, (the "Adviser") and Alliance Capital Management L.P.
(the "Sub-Adviser").
WHEREAS, SEI Institutional Investments Trust, a Massachusetts business
trust (the "Trust") is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated June 14, 1996 (the "Advisory Agreement") with the Trust, pursuant to which
the Adviser will act as investment adviser to the Large Cap Portfolio (the
"Portfolio"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain the
Sub-Adviser to provide investment advisory services to the Adviser in connection
with the management of the Portfolio, and the Sub-Adviser is willing to render
such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Sub-Adviser shall manage the investment of
all of the securities and other assets of the Portfolio entrusted to it
hereunder, including the purchase, retention and disposition of securities
and other assets, in accordance with the Portfolio's investment objectives,
policies and restrictions as stated in the Portfolio's prospectus and
statement of additional information, as currently in effect and as amended
or supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall provide supervision of the Portfolio's investments
and determine from time to time what investments and securities will be
purchased, retained or sold by the Portfolio, and what portion of the
assets will be invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement, the
Sub-Adviser shall act in conformity with the Trust's Declaration of Trust
(as defined herein) and the Prospectus and with the instructions and
directions of the Adviser and of the Board of Trustees of the Trust and
will conform to and comply with the requirements of the 1940 Act, the
Internal Revenue Code of 1986, and all other applicable federal and state
laws and regulations, as each is amended from time to time. The Adviser
agrees promptly to deliver any amendment or supplement to the Prospectus to
the Sub-Adviser on an on-going basis, and until the Adviser delivers any
such amendment or supplement to its Sub-Adviser, the Sub-Adviser shall be
fully protected in relying on the Prospectus as previously furnished.
(c) The Sub-Adviser shall determine the securities to be purchased or sold by
the Portfolio and will place orders with or through such persons, brokers
or dealers to carry out the policy with respect to brokerage set forth in
the Portfolio's Registration Statement and Prospectus or as the Board of
Trustees or the Adviser may direct from time to time, in conformity with
federal securities laws. In executing Portfolio transactions and selecting
brokers or dealers, the Sub-Adviser will use its best efforts to seek on
behalf of the Portfolio the best overall terms available. In assessing the
best overall terms available for any transaction, the Sub-Adviser shall
consider all factors that it deems relevant, including the breadth of the
market in the security, the pace of the security, the financial condition
and execution capability of the broker or dealer, and the reasonableness of
the commission, if any, both for the specific transaction and on a
continuing basis. In evaluating the best overall terms available, and in
selecting the broker-dealer
<PAGE>
to execute a particular transaction the Sub-Adviser may also consider the
brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) provided to the Portfolio
and/or other accounts over which the Sub-Adviser or an affiliate of the
Sub-Adviser may exercise investment discretion. The Sub-Adviser is
authorized, subject to the prior approval of the Trust's Board of Trustees,
to pay to a broker or dealer who provides such brokerage and research
services a commission for executing a portfolio transaction for any of the
Portfolios which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if, but only if,
the Sub-Adviser determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer - - viewed in terms of that particular
transaction or terms of the overall responsibilities of the Sub-Adviser to
the Portfolio. In addition, the Sub-Adviser is authorized to allocate
purchase and sale orders for portfolio securities to brokers or dealers
(including brokers and dealers that are affiliated with the Sub-Adviser or
the Trust's principal underwriter) to take into account the sale of shares
of the Trust if the Sub-Adviser believes that the quality of the
transaction and the commission are comparable to what they would be with
other qualified firms. In no instance, however, will any Portfolio's
securities be purchased from or sold to the Sub-Adviser, the Trust's
principal underwriter, or any affiliated person of either the Trust, the
Sub-Adviser or the principal underwriter, acting as principal in the
transaction, except to the extent permitted by the Securities and Exchange
Commission and the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to the
Portfolio's portfolio transactions required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act
and shall render to the Adviser or Board of Trustees such periodic and
special reports as the Adviser or Board of Trustees may reasonably request.
The Sub-Adviser shall keep the Portfolio's books and records required to be
maintained by the Sub-Adviser by this Agreement and shall timely furnish to
the Adviser all information relating to the Sub-Adviser's services under
this Agreement needed by the Adviser to keep the other books and records of
the Portfolio required by Rule 31a-1 under the 1940 Act. The Sub-Adviser
shall also furnish to the Adviser any other information that is required to
be filed by the Adviser or the Trust with the Securities and Exchange
Commission ("SEC") or sent to shareholders under the 1940 Act (including
the rules adopted thereunder) or any exemptive or other relief that the
Adviser or the Trust obtains from the SEC. The Sub-Adviser agrees that all
records that it maintains on behalf of the Portfolio are property of the
Portfolio and the Sub-Adviser will surrender promptly to the Portfolio any
of such records upon the Portfolio's request; provided, however, that the
Sub-Adviser may retain a copy of such records. In addition, for the
duration of this Agreement, the Sub-Adviser shall preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records as are
required to be maintained by it pursuant to this Agreement, and shall
transfer said records to any successor Sub-Adviser upon the termination of
his Agreement (or, if there is no successor Sub-Adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Portfolio's custodian on each business
day with information relating to all transactions concerning the
Portfolio's assets and shall provide such information and such periodic or
special reports as the Adviser or Board of Trustees may reasonably request.
(f) Adviser understands that the Sub-Adviser now acts, will continue to act and
may act in the future as investment manager or adviser to fiduciary and
other managed accounts, and as investment manager or adviser to other
investment companies, including any offshore entities, or accounts, and the
Portfolio has no objection to the Sub-Adviser's so acting, provided that
whenever the Portfolio and one or more other investment companies or
accounts managed or advised by the Sub-Adviser have available funds for
investment, investments suitable and appropriate for each will be allocated
in accordance with a formula believed to be equitable to each company and
account. The Adviser recognizes that in some cases this procedure may
adversely affect the size of the position obtainable for the Portfolio. In
addition, the Adviser understands that the persons employed by the
Sub-Adviser to assist in the performance of the
<PAGE>
Sub-Adviser's duties under this Agreement will not devote their full time
to such service and nothing contained in this Agreement shall be deemed to
limit or restrict the right of the Sub-Adviser or any affiliate of the
Sub-Adviser to engage in and devote time and attention to other businesses
or to render services of whatever kind or nature.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill its
commitment under this Agreement.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners, officers
or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Portfolio pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's performance of its
duties under this Agreement; provided, however, that nothing herein shall
be construed to relieve the Sub-Adviser of responsibility for compliance
with the Portfolio's investment objectives, policies, and restrictions, as
provided in Section 1 hereunder.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the Secretary
of State of the Commonwealth of Massachusetts (such Agreement and
Declaration of Trust, as in effect on the date of this Agreement and as
amended from time to time, herein called the "Declaration of Trust").
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Portfolio.
(d) The Trust's most recent Registration Statement as filed with the Securities
and Exchange Commission.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in Schedule A which is
attached hereto and made part of this Agreement. The fee will be calculated
based on the average monthly market value of investments under management
and will be paid to the Sub-Adviser monthly. The Sub-Adviser may, in its
discretion and from time to time, waive a portion of its fee
5. LIMITATION OF LIABILITY OF THE SUB-ADVISER. The Sub-Adviser shall not be
liable for any error of judgment or for any loss suffered by the Adviser in
connection with the performance of its obligations under this Agreement,
except a loss resulting from (i) willful misfeasance, bad faith or
negligence on the Sub-Adviser's part in the performance of its duties, or
(ii) reckless disregard of its obligations and duties under this Agreement,
or (iii) a violation of law or any duty imposed by federal or state law.
6. REPORTS. During the term of this Agreement, the Adviser agrees to furnish
the Sub-Adviser at its principal office all prospectuses, proxy statements,
reports to stockholders, sales literature or other materials prepared for
distribution to stockholders of the Portfolios, the Trust or the public
that refer to the Sub-Adviser or its clients in any way prior to use
thereof and not to use material if the Sub-Adviser reasonably objects in
writing within five business days (or such other period as may be mutually
agreed) after receipt thereof. The Sub-Adviser's right to object to such
materials is limited to the portions of such materials that expressly
relate to the Sub-Adviser, its services and its clients. The Adviser agrees
to use
<PAGE>
its reasonable best efforts to ensure that materials prepared its employees
or agents or its that refer to the Sub-Adviser or its clients in any way
are consistent with those materials previously approved by the Sub-Adviser
as referenced in the first sentence of this paragraph. Sales literature may
be furnished to the Sub-Adviser by first class or overnight mail, facsimile
transmission equipment or hand delivery.
7. CHANGE IN THE SUB-ADVISER'S MEMBERSHIP. The Sub-Adviser agrees that it
shall notify the Adviser of any change in the membership of the general
partners of the Sub-Adviser within a reasonable time after such change.
8. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or damages
(including reasonable attorney's fees and other related expenses) howsoever
arising from or in connection with this Agreement or the performance by the
Sub-Adviser of its duties hereunder; provided, however, that the
Sub-Adviser shall not be required to indemnify or otherwise hold the
Adviser harmless under this Section 8 where the claim against, or the
loss, liability or damage experienced by the Adviser, is caused by or is
otherwise directly related to the Adviser's own willful misfeasance, bad
faith or negligence, or to the reckless disregard of its duties under this
Agreement.
9. DURATION AND TERMINATION. This Agreement shall become effective upon its
approval by the Trust's Board of Trustees and by the vote of a majority of
the outstanding voting securities of the Portfolio; provided, however, that
at any time the Adviser shall have obtained exemptive relief from the SEC
permitting it to engage a Sub-Adviser without first obtaining approval of
the Agreement from a majority of the outstanding voting securities of the
Portfolio(s) involved, the Agreement shall become effective upon its
approval by the Trust's Board of Trustees. Any Sub-Adviser so selected and
approved shall be without the protection accorded by shareholder approval
of an investment adviser's receipt of compensation under Section 36(b) of
the 1940 Act.
This Agreement shall continue in effect for a period of more than two years
from the date hereof only so long as continuance is specifically approved
at least annually in conformance with the 1940 Act; provided, however, that
this Agreement may be terminated with respect to the Portfolio (a) by the
Portfolio at any time, without the payment of any penalty, by the vote of a
majority of Trustees of the Trust or by the vote of a majority of the
outstanding voting securities of such Portfolio, (b) by the Adviser at any
time, without the payment of any penalty, on not more than 60 days' nor
less than 30 days' written notice to the other party, or (c) by the
Sub-Adviser at any time, without the payment of any penalty, on 90 days'
written notice to the other party. This Agreement shall terminate
automatically and immediately in the event of its assignment, or in the
event of a termination of the Adviser's agreement with the Trust. As used
in this Section 9, the terms "assignment" and "vote of a majority of the
outstanding voting securities" shall have the respective meanings set forth
in the 1940 Act and the rules and regulations thereunder, subject to such
exceptions as may be granted by the Commission under the 1940 Act.
10. GOVERNING LAW. This Agreement shall be governed by the internal laws of the
Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
11. SEVERABILITY. Should any part of this Agreement be held invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
12. NOTICE: Any notice, advice or report to be given pursuant to this Agreement
shall be deemed sufficient if delivered or mailed by registered, certified
or overnight mail, postage prepaid addressed by the party
<PAGE>
giving notice to the other party at the last address furnished by the other
party:
To the Adviser at: SEI Financial Management Corporation
680 East Swedesford Road
Wayne, PA 19087
Attention: Legal Department
To the Sub-Adviser at: Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, NY 10105
Attention: Corporate Legal and
Attention: Thomas Leavitt SVP
13. NAMES. The Trust may use the names "Alliance Capital Management L.P.",
"Alliance Capital Management", "Alliance Capital", or "Alliance" only for
so long as this Agreement or any extension, renewal, or amendment hereof
remains in effect. At such times as this Agreement shall no longer be in
effect, the Trust shall cease to use such names or any other name
indicating that it is advised by or otherwise connected with the
Sub-Adviser.
14. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject matter.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
A copy of the Declaration of Trust of the Trust is on file with the
Secretary of State of the Commonwealth of Massachusetts, and notice is hereby
given that the obligations of this instrument are not binding upon any of the
Trustees, officers or shareholders of the Portfolio or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
Commission, whether of special or general application, such provision shall be
deemed to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI Financial Management Corporation Alliance Capital Management L.P.
By: /s/ Kevin Robins By: Alliance Capital Management
--------------------------------- Corporation, its General Partner
Kevin Robins
Title: Sr. Vice President By: /s/ Mark R. Manley
------------------------------------
Mark R. Manley, Assistant Secretary
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI FINANCIAL MANAGEMENT CORPORATION
AND
ALLIANCE CAPITAL MANAGEMENT L.P.
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
Large Cap %
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
AGREEMENT made this 14th day of June, 1996, between SEI Financial
Management Corporation, (the "Adviser") and BEA Associates (the
"Sub-Adviser").
WHEREAS, SEI Institutional Investments Trust, a Massachusetts business trust
(the "Trust") is registered as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement dated
June 14, 1996 (the "Advisory Agreement") with the Trust, pursuant to which the
Adviser will act as investment adviser to the High Yield Bond Portfolio (the
"Portfolio"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain the
Sub-Adviser to provide investment advisory services to the Adviser in connection
with the management of the Portfolio, and the Sub-Adviser is willing to render
such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Sub-Adviser shall manage the investment of
all of the securities and other assets of the Portfolio entrusted to it
hereunder (the "Assets") including the purchase, retention and disposition
of the Assets, in accordance with the Portfolio's investment objectives,
policies and restrictions as stated in the Portfolio's prospectus and
statement of additional information, as currently in effect and as amended
or supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, in consultation with and subject to the direction of
the Adviser, determine from time to time what Assets will be purchased,
retained or sold by the Portfolio, and what portion of the Assets will be
invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement, the
Sub-Adviser shall act in conformity with the investment objectives,
policies and limitations with respect to the Portfolio set forth in the
Trust's Declaration of Trust (as defined herein) and the Prospectus and
with applicable instructions and directions of the Adviser and of the Board
of Trustees of the Trust and will conform to and comply with the
requirements of the 1940 Act, the Internal Revenue Code of 1986, and all
other applicable federal and state laws and regulations, as each is amended
from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by the
Portfolio as provided in subparagraph (a) and will place orders with or
through such persons, brokers or dealers, including the Sub-Adviser or
affiliates thereof, in accordance with the policy with respect to brokerage
set forth in the Portfolio's Registration Statement and Prospectus or as
the Trust's Board of Trustees or the Adviser may direct from time to time,
in conformity with federal securities laws. In executing Portfolio
transactions and selecting brokers or dealers, the Sub-Adviser will use its
best efforts to seek on behalf of the Portfolio the best overall terms
available. In assessing the best overall terms available for any
transaction, the Sub-Adviser shall consider all factors that it deems
relevant, including the breadth of the market in the security, the price of
the security, the financial condition and execution capability of the broker
or dealer, and the reasonableness of the commission, if any, both for the
specific transaction and on a continuing basis. In evaluating the best
overall terms available, and in selecting the broker-dealer to execute a
particular transaction the Sub-Adviser may also consider the brokerage and
research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) provided to the Portfolio and/or other
accounts over which the Sub-Adviser or an affiliate of the Sub-Adviser may
exercise investment discretion. The Sub-Adviser is authorized to pay to a
broker or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for the Portfolio which is
in excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if, but only if, the Sub-Adviser
determines in good faith that such commission was reasonable in relation to
the value of the brokerage and research services provided by such broker or
dealer - - viewed in terms of that particular transaction or in terms of
the overall
<PAGE>
responsibilities of the Sub-Adviser to the Portfolio and the accounts as
to which the Sub-Adviser excercises investment discretion. It is recognized
that the services provided by such brokers or dealers may be useful to the
Sub-Adviser in connection with the Sub-Adviser's services to other clients.
In no instance, however, will any of the Portfolio's Assets be purchased
from or sold to the Adviser, Sub-Adviser, the Trust's principal underwriter,
or any affiliated person of either the Trust, the Sub-Adviser or the
principal underwriter, acting as principal in the transaction, except to the
extent permitted by the Securities and Exchange Commission and the 1940 Act.
On occasions when the Sub-Adviser deems the purchase or sale of a security
to be in the best interest of the Portfolio as well as other customers, the
Sub-Adviser may, to the extent permitted by applicable laws and regulations,
but shall not be obligated to, aggregate the securities to be sold or
purchased in order to obtain the best execution and lower brokerage
commissions, if any. In such event, allocation of the securities so
purchased or sold, as well as expenses incurred in the transaction, will be
made by the Sub-Adviser in the manner it considers to be fair and equitable
and consistent with its fiduciary obligation to the Portfolio, and, if
applicable, to other customers.
The Adviser acknowledges that in order to comply with federal securities
laws and related regulatory requirements, there may be periods when the
Sub-Adviser will not be permitted to initiate or recommend certain types of
transactions in the securities or issuers for which affiliates of the
Sub-Adviser are performing investment banking services, and neither the
Trust nor the Adviser will be advised of that fact. For example, during
certain periods when affiliates of the Sub-Adviser are engaged in an
underwriting or other distribution of a company's securities, the
Sub-Adviser may be prohibited from purchasing or recommending the purchase
of certain securities of that company for its clients. Similarly, the
Sub-Adviser may on occasion be prohibited from selling or recommending the
sale of securities of a company for which affiliates are providing
investment banking services.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act
and shall render to the Adviser or the Trust's Board of Trustees such
periodic and special reports as the Adviser or the Trust's Board of
Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and shall
timely furnish to the Adviser all information relating to the Sub-Adviser's
services under this Agreement needed by the Adviser to keep the other books
and records of the Portfolio required by Rule 31a-1 under the 1940 Act. The
Sub-Adviser shall also furnish to the Adviser any other information
relating to the Assets that is required to be filed by the Adviser or the
Trust with the Securities and Exchange Commission ("SEC") or sent to
shareholders under the 1940 Act (including the rules adopted thereunder) or
any exemptive or other relief that the Adviser or the Trust obtains from
the SEC. The Sub-Adviser agrees that all records that it maintains on
behalf of the Portfolio are property of the Portfolio and the Sub-Adviser
will surrender promptly to the Portfolio any of such records upon the
Portfolio's request; provided, however, that the Sub-Adviser may retain a
copy of such records. In addition, for the duration of this Agreement, the
Sub-Adviser shall preserve for the periods prescribed by Rule 31a-2 under
the 1940 Act any such records as are required to be maintained by it
pursuant to this Agreement, and shall transfer said records to any
successor Sub-Adviser upon the termination of this Agreement (or, if there
is no successor Sub-Adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Portfolio's custodian on each business
day with information relating to all transactions concerning the Assets and
shall provide the Adviser with such information upon request of the
Adviser.
(f) The investment management services provided by the Sub-Adviser under this
Agreement are not to be deemed exclusive and the Sub-Adviser shall be free
to render similar services to other clients, as long as such services do
not impair the services rendered to the Adviser or the Trust. The
Sub-Adviser may give advice, and take action, with respect to any of its
other clients that may differ from the advice given, or the time or nature
of action taken, with respect to the Portfolio. The Sub-Adviser shall have
no obligation to purchase or sell for the Portfolio or to recommend for
purchase or sale by the Portfolio, any securities that the Sub-Adviser, its
principals, affiliates or employees may purchase for themselves or for any
other clients.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill its
commitment under this Agreement.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners, officers
or employees.
<PAGE>
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Portfolio pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's performance of its
duties under this Agreement; provided, however, that in connection with its
management of the Assets, nothing herein shall be construed to relieve the
Sub-Adviser of responsibility for compliance, with respect to the
Portfolio, with the Trust's Declaration of Trust (as defined herein), the
Prospectus, the instructions and directions of the Board of Trustees of the
Trust, the requirements of the 1940 Act, the Internal Revenue Code of 1986,
and all other applicable federal and state laws and regulations, as each is
amended from time to time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the Secretary
of State of the Commonwealth of Massachusetts (such Agreement and
Declaration of Trust, as in effect on the date of this Agreement and as
amended from time to time, herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Portfolio.
Copies of any amendments to the above documents will be furnished promptly
to the Sub-Adviser.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s) which
is attached hereto and made part of this Agreement. The fee will be
calculated based on the average monthly market value of the Assets under
the Sub-Adviser's management and will be paid to the Sub-Adviser monthly.
Except as may otherwise be prohibited by law or regulation (including any
then current SEC staff interpretation), the Sub-Adviser may, in its
discretion and from time to time, waive a portion of its fee.
5. LIMITATION OF LIABILITY OF THE SUB-ADVISER. The Sub-Adviser shall not be
liable for any error of judgment or for any loss suffered by the Adviser in
connection with the performance of its obligations under this Agreement,
except a loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services (in which case any award of damages
shall be limited to the period and the amount set forth in Section 36(b)(3)
of the 1940 Act), or a loss resulting from willful misfeasance, bad faith
or negligence on the Sub-Adviser's part in the performance of its duties or
from reckless disregard of its obligations and duties under this Agreement,
except as may otherwise be provided under provisions of applicable state
law which cannot be waived or modified hereby.
The Sub-Adviser shall not be responsible for any loss incurred by reason of
any act or omission of any broker-dealer; provided, however, that the
Sub-Adviser shall use reasonable care in its selection and use of brokers
in effecting transactions for the Portfolio. The Sub-Adviser shall have no
obligation to seek to obtain any material non-public ("inside") information
about any issuer of securities, nor to purchase or sell, or to recommend
for purchase or sale, for the Portfolio the securities of any issuer on the
basis of any such information as may come into its possession.
The Adviser acknowledges and agrees that the Sub-Adviser makes no
representation and warranty, express or implied, that any level of
performance or investment results will be achieved by the Portfolio or that
the Portfolio will perform comparably with any standard or index, including
other clients of the Sub-Adviser whether public or private.
6. REPORTS. During the term of this Agreement, the Adviser agrees to furnish
the Sub-Adviser at its principal office all prospectuses, proxy statements,
reports to stockholders, sales literature or other materials prepared for
distribution to stockholders of the Portfolios, the Trust or the public that
refer to the Sub-Adviser or its clients in any way prior to use thereof and
not to use such material if the Sub-Adviser reasonably objects in writing
within five business days (or such other period as may be mutually agreed)
after receipt thereof. The Sub-Adviser's right to object to such materials
is limited to the portions of such materials that expressly relate to the
Sub-Adviser; its services and its clients. The Adviser agrees to use its
reasonable best efforts to ensure that materials prepared by
<PAGE>
its agents or its affiliates that refer to the Sub-Adviser or its clients
in any way are consistent with those materials previously approved by the
Sub-Adviser as referenced in the first sentence of this paragraph. Sales
literature may be furnished to the Sub-Adviser by first class or overnight
mail, facsimile transmission equipment or hand delivery.
7. PORTFOLIO COMPOSITION. The Adviser shall provide (or cause the Trust's
custodian to provide) timely information to the Sub-Adviser regarding such
matters as the composition of the Assets and cash available for investment
in the Portfolio and cash requirements (with respect to the redemption of
Portfolio shares) and such other information as the parties may reasonably
agree upon.
8. EXPENSES. The Sub-Adviser shall bear expenses incurred by it in connection
with its duties hereunder, including payment for compensation of and office
space for its officers and employees engaged in providing services
hereunder, but shall not be responsible for any expenses of the Trust.
9. CUSTODY. The cash and assets of the Portfolio shall be held by CoreStates
Bank, N A. (the "Custodian"), which the Adviser hereby represents has
agreed to act as custodian for the Portfolio. The Sub-Adviser shall at no
time have custody or physical control of the Assets in the Portfolio. In
addition, the Sub-Adviser shall not be liable for any act or omission of
the Custodian. The Sub-Adviser shall give instructions to the Custodian in
writing or orally (at the discretion of the Custodian) and confirmed in
writing as soon as practicable thereafter. The Adviser shall instruct the
Custodian to provide the Sub-Adviser with such periodic reports concerning
the status of the Portfolio as the Sub-Adviser and the Adviser may agree
from time to time. The Adviser shall provide the Sub-Adviser with a copy of
the Portfolio's agreement with the Custodian and any modification thereto
and will notify the Sub-Adviser in advance of a change in the Custodian.
10. REPRESENTATIONS AND WARRANTIES OF THE ADVISER. The Adviser represents and
warrants to the Sub-Adviser that (a) the Adviser has the authority to act
on behalf of the Trust and has and will continue to convey to the
Sub-Adviser all relevant information regarding the Trust and the Portfolio
including, but not limited to, any relevant investment restrictions of the
Trust and the Portfolio; (b) this Agreement has been duly authorized,
executed and delivered by the Adviser and constitutes its valid and binding
obligation, enforceable in accordance with its terms; (c) no governmental
authorizations, approvals, consents or filings are required in connection
with the execution, delivery or performance of this Agreement by the
Adviser; (d) the execution, delivery and performance of this Agreement by
the Adviser will not violate or result in any default under the Adviser's
certificate of incorporation or by-laws (or equivalent constituent
documents), any contract or other agreement to which the Adviser is a party
or by which its assets may be bound or any statute or any rule, regulation
or order of any government agency or body; (e) the Assets of the Portfolio
do not and will not constitute assets of any employee benefit plan within
the meaning of Section 3(3) of the Employee Retirement Security Act of 1974
or Section 4975(e) of the Internal Revenue Code of 1986 and this Agreement
and the transactions contemplated hereby will not constitute an investment
by a "benefit plan investor" within the meaning of DOL Reg. Section 2510.3
-101; and (f) the Adviser has received a copy of Part II of the
Sub-Adviser's Form ADV as most recently filed with the SEC.
11. DIRECTIONS TO SUB-ADVISER. All directions by or on behalf of the Adviser to
the Sub-Adviser shall be in writing signed either (a) by a director or
officer of the Adviser, or (b) by a duly authorized agent of the Adviser.
The Sub-Adviser shall be fully protected in relying upon any direction
signed in the appropriate manner with respect to any instruction, direction
or approval of the Adviser. The Sub-Adviser shall also be fully protected
when acting upon any instrument, certificate or paper the Sub-Adviser
reasonably believes to be genuine and to be signed or presented by the
proper person or persons. The Sub-Adviser shall be under no duty to make
any investigation or inquiry as to any statement contained in any such
writing and may accept the same as conclusive evidence of the truth and
accuracy of the statements therein contained.
12. PROXIES, TENDER OFFERS, CLASS ACTIONS, ETC. Subject to any other written
instructions of the Adviser, the Sub-Adviser is hereby appointed the
Adviser's agent and attorney-in-fact on behalf of the Portfolio in its
discretion to vote, tender or convert any of the Assets; to execute proxies,
waivers, consents, account documentation, agreements, contracts, and other
instruments with respect to the Assets; to endorse, transfer or deliver the
Assets and to participate in or consent to any class action, plan of
reorganization, merger, combination, consolidation, liquidation or similar
plan with reference to the Assets; and the Sub-Adviser shall not incur any
liability to the Adviser or the Portfolio by reason of any exercise of, or
failure to exercise, any such discretion. Notwithstanding the provisions of
this Section 12, if the Sub-Adviser determines that it, or any of its
affiliates, has an adverse or potentially adverse interest with respect to
the vote or other requested action, the Sub-Adviser shall so inform the
Adviser, which shall thereupon become responsible for the determination on
such vote or other action.
<PAGE>
13. INDEMNIFICATION. (a) The Adviser shall indemnify and hold harmless the
Sub-Adviser, its officers, directors, employees, agents and each person, if
any, who controls the Sub-Adviser within the meaning of Section 15 of the
Securities Act of 1933 (the "1933 Act") (any and all such persons shall be
referred to as "Sub-Adviser Indemnified Party"), against any and all
claims, losses, liabilities or damages (including reasonable attorney's
fees and other related expenses) howsoever arising from or in connection
with this Agreement or the performance by the Adviser of its duties
hereunder; provided, however, that the Adviser shall not be required to
indemnify or otherwise hold any particular Sub-Adviser Indemnified Party
harmless under this Section 13 where the claim against, or the loss,
liability or damage experienced by the Sub-Adviser Indemnified Party is
caused by or is otherwise directly related to such Sub-Adviser Indemnified
Party's own willful misfeasance, bad faith or negligence, or to the
reckless disregard of its duties under this Agreement.
(b) The Sub-Adviser shall indemnify and hold harmless the Adviser, its
officers, directors, employees, agents and each person, if any, who
controls the Adviser within the meaning of Section 15 of the 1933 Act (any
and all such persons shall be referred to as "Adviser Indemnified Party")
from and against any and all claims, losses, liabilities or damages
(including reasonable attorney's fees and other related expenses) howsoever
arising from or in connection with this Agreement or the performance by the
Sub-Adviser of its duties hereunder; provided, however, that the
Sub-Adviser shall not be required to indemnify or otherwise hold any
particular Adviser Indemnified Party harmless under this Section 13 where
the claim against, or the loss, liability or damage experienced by the
Adviser Indemnified Party, is caused by or is otherwise directly related to
such Adviser Indemnified Party's own willful misfeasance, bad faith or
negligence, or to the reckless disregard of its duties under this
Agreement.
14. DURATION AND TERMINATION. This Agreement shall become effective as of the
date hereof.
This Agreement shall continue in effect until the earlier of (i) a period
two years from the date hereof only so long as continuance is specifically
approved at least annually in conformance with the 1940 Act or (ii) the
approval by a majority of the outstanding voting securities of the
Portfolio of an Investment Sub-Advisory Agreement with substantially the
same terms and conditions except with respect to compensation to the
Sub-Adviser; provided, however, that this Agreement may be terminated with
respect to the Portfolio (a) by the Portfolio at any time, without the
payment of any penalty, by the vote of a majority of Trustees of the Trust
or by the vote of a majority of the outstanding voting securities of such
Portfolio, (b) by the Adviser at any time, without the payment of any
penalty, on not more than 60 days' nor less than 30 days' written notice to
the Sub-Adviser, or (c) by the Sub-Adviser at any time, without the payment
of any penalty, on 90 days' written notice to the Adviser. This Agreement
shall terminate automatically and immediately in the event of its
assignment, or in the event of a termination of the Adviser's agreement with
the Trust. As used in this Section 14, the terms "assignment" and "vote of a
majority of the outstanding voting securities" shall have the respective
meanings set forth in the 1940 Act and the rules and regulations thereunder,
subject to such exceptions as may be granted by the SEC under the 1940 Act.
15. GOVERNING LAW. This Agreement shall be governed by the internal laws of the
Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
16. SEVERABILITY. Should any part of this Agreement be held invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
17. NOTICE. Any notice, advice or report to be given pursuant to this Agreement
shall be deemed sufficient if delivered or mailed by registered, certified
or overnight mail, postage prepaid addressed by the party giving notice to
the other party at the last address furnished by the other party:
To the Adviser at: SEI Financial Management Corporation
680 East Swedesford Road
Wayne, PA 19087
Attention: Legal Department
<PAGE>
To the Sub-Adviser at: BEA Associates
151 East 53rd Street
New York, NY 10022
Attn.: President
18. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject matter.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
<PAGE>
Where the effect of a requirement of the l940 Act reflected in any provision of
this Agreement is altered by a rule, regulation or order of the SEC, whether of
special or general application, such provision shall be deemed to incorporate
the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI Financial Management Corporation BEA Associates
By: By:
/s/ Kevin Robins /s/ Signature Appears Here
- ----------------------------------- ----------------------------------
Name: Kevin Robins Name:
- ----------------------------------- ----------------------------------
Title: S.V.P. Title: Legal Counsel
- ----------------------------------- ----------------------------------
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI FINANCIAL MANAGEMENT
CORPORATION
AND
BEA ASSOCIATES
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
High Yield Bond Portfolio %
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
AGREEMENT made this 14th day of June, 1996, between SEI Financial
Management Corporation, (the "Adviser") and BlackRock Financial Management, Inc.
(the "Sub-Adviser").
WHEREAS, SEI Institutional Investments Trust, a Massachusetts business
trust (the "Trust") is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated June 14, 1996 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the Core Fixed Income
Portfolio (the "Portfolio"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain the
Sub-Adviser to provide investment advisory services to the Adviser in connection
with the management of the Portfolio, and the Sub-Adviser is willing to render
such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and
the Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Portfolio entrusted to it hereunder
(the "Assets"), including the purchase, retention and disposition of
the Assets, in accordance with the Portfolio's investment objectives,
policies and restrictions as stated in the Portfolio's prospectus and
statement of additional information, as currently in effect and as
amended or supplemented from time to time (referred to collectively as
the "Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, in consultation with and subject to the
direction of the Adviser, determine from time to time what Assets will
be purchased, retained or sold by the Portfolio, and what portion of
the Assets will be invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement,
the Sub-Adviser shall act in conformity with the Trust's Declaration
of Trust (as defined herein) and the Prospectus and with the
instructions and directions of the Adviser and of the Board of
Trustees of the Trust and will conform to and comply with the
requirements of the 1940 Act, the Internal Revenue Code of 1986, and
all other applicable federal and state laws and regulations, as each
is amended from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by
the Portfolio as provided in subparagraph (a) and will place orders
with or through such persons, brokers or dealers to carry out the
policy with respect to brokerage set forth in the Portfolio's
Registration Statement (as defined herein) and Prospectus or as the
Board of Trustees or the Adviser may direct from time to time, in
conformity with federal securities laws. In executing Portfolio
transactions and selecting brokers or dealers, the Sub-Adviser will
use its best efforts to seek on behalf of the Portfolio the best
overall terms available. In assessing the best overall terms available
for any transaction, the Sub-Adviser shall consider all factors that
it deems relevant, including the breadth of the market in the
security, the price of the security, the financial condition and
execution capability of the broker or dealer, and the reasonableness
of the commission, if any, both for the specific transaction and on a
continuing basis. In evaluating the best overall terms available, and
in selecting the broker-dealer to execute a particular transaction,
the Sub-Adviser may also consider the brokerage and research services
provided (as those terms are defined in Section 28(e)
<PAGE>
of the Securities Exchange Act of 1934). Consistent with any
guidelines established by Board of Trustees of the Trust, the
Sub-Adviser is authorized to pay to a broker or dealer who provides
such brokerage and research services a commission for executing a
portfolio transaction for the Portfolio which is in excess of the
amount of commission another broker or dealer would have charged for
effecting that transaction if, but only if, the Sub-Adviser determines
in good faith that such commission was reasonable in relation to the
value of the brokerage and research services provided by such broker
or dealer -- viewed in terms of that particular transaction or terms of
the overall responsibilities of the Sub-Adviser to the Portfolio. In
addition, the Sub-Adviser if authorized to allocate purchase and sale
orders for securities to brokers or dealers (including brokers and
dealers that are affiliated with the Adviser, Sub-Adviser or the
Trust's principal underwriter) to take into account the sale of shares
of the Trust if the Sub-Adviser believes that the quality of the
transaction and the commission are comparable to what they would be
with other qualified firms. In no instance, however, will the
Portfolio's Assets be purchased from or sold to the Adviser,
Sub-Adviser, the Trust's principal underwriter, or any affiliated
person of either the Trust, Adviser, the Sub-Adviser or the principal
underwriter, acting as principal in the transaction, except to the
extent permitted by the Securities and Exchange Commission ("SEC") and
the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5),
(6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the
1940 Act. The Sub-Adviser shall provide to the Adviser or the Board of
Trustees such periodic and special reports, balance sheets or
financial information, and such other information with regard to its
affairs as the Adviser or Board of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the
Assets required to be maintained by the Sub-Adviser under this
Agreement and shall timely furnish to the Adviser all information
relating to the Sub-Adviser's services under this Agreement needed by
the Adviser to keep the other books and records of the Portfolio
required by Rule 31a-1 under the 1940 Act. The Sub-Adviser shall also
furnish to the Adviser any other information relating to the Assets
that is required to be filed by the Adviser or the Trust with the SEC
or sent to shareholders under the 1940 Act (including the rules
adopted thereunder) or any exemptive or other relief that the Adviser
or the Trust obtains from the SEC. The Sub-Adviser agrees that all
records that it maintains on behalf of the Portfolio are property of
the Portfolio and the Sub-Adviser will surrender promptly to the
Portfolio any of such records upon the Portfolio's request; provided,
however, that the Sub-Adviser may retain a copy of such records. In
addition, for the duration of this Agreement, the Sub-Adviser shall
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
any such records as are required to be maintained by it pursuant to
this Agreement, and shall transfer said records to any successor
sub-adviser upon the termination of this Agreement (or, if there is no
successor sub-adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Portfolio's custodian on each
business day with information relating to all transactions concerning
the Portfolio's Assets and shall provide the Adviser with such
information upon request of the Adviser.
(f) The investment management services provided by the Sub-Adviser under
this Agreement are not to be deemed exclusive and the Sub-Adviser
shall be free to render similar services to others, as long as such
services do not impair the services rendered to the Adviser or the
Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to
fulfill its commitment under this Agreement.
-2-
<PAGE>
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held in the Portfolio. The Adviser shall instruct the
custodian and other parties providing services to the Portfolio to
promptly forward misdirected proxies to the Sub-Adviser.
Services to be furnished by the Sub-Adviser under this Agreement may
be furnished through the medium of any of the Sub-Adviser's partners,
officers or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have
responsibility for all services to be provided to the Portfolio
pursuant to the Advisory Agreement and shall oversee and review the
Sub-Adviser's performance of its duties under this Agreement;
provided, however, that in connection with its management of the
Assets, nothing herein shall be construed to relieve the Sub-Adviser
of responsibility for compliance with the Trust's Declaration of Trust
(as defined herein), the Prospectus, the instructions and directions
of the Board of Trustees of the Trust, the requirements of the 1940
Act, the Internal Revenue Code of 1986, and all other applicable
federal and state laws and regulations, as each is amended from time
to time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of the Commonwealth of Massachusetts (such
Agreement and Declaration of Trust, as in effect on the date of this
Agreement and as amended from time to time, herein called the
"Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Portfolio.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by
the Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s)
which is attached hereto and made part of this Agreement. The fee will
be calculated based on the average monthly market value of the Assets
under the Sub-Adviser's management and will be paid to the Sub-Adviser
monthly. Except as may otherwise be prohibited by law or regulation
(including any then current SEC staff interpretation), the Sub-Adviser
may, in its discretion and from time to time, waive a portion of its
fee.
5. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
adviser from and against any and all claims, losses, liabilities or
damages (including reasonable attorney's fees and other related
expenses) howsoever arising from or in connection with the performance
of the Sub-Adviser's obligations under this Agreement; provided,
however, that the Sub-Adviser's obligation under this Section 5 shall
be reduced to the extent that the claim against, or the loss, liability
or damage experienced by the Adviser is caused by or is otherwise
directly related to the Adviser's own willful misfeasance, bad faith or
negligence, or to the reckless disregard of its duties under this
Agreement.
The Adviser shall indemnify and hold harmless the Sub-Adviser from and
against any and all claims, losses, liabilities or damages (including
reasonable attorney's fees and other related
-3-
<PAGE>
expenses) howsoever arising from or in connection with the
performance of the Adviser's obligations under this Agreement;
provided, however, that the Adviser's obligation under this Section 5
shall be reduced to the extent that the claim against, or the loss,
liability or damage experienced by the Sub-Adviser, is caused by or is
otherwise directly related to the Sub-Adviser's own willful
misfeasance, bad faith or negligence, or to the reckless disregard of
its duties under this Agreement.
6. DURATION AND TERMINATION. This Agreement shall become effective upon
its approval by the Trust's Board of Trustees and by the vote of a
majority of the outstanding voting securities of the Portfolio. This
Agreement shall continue in effect for a period of more than two years
from the date hereof only so long as continuance is specifically
approved at least annually in conformance with the 1940 Act; provided,
however, that this Agreement may be terminated with respect to the
Portfolio (a) by the Portfolio at any time, without the payment of any
penalty, by the vote of a majority of Trustees of the Trust or by the
vote of a majority of the outstanding voting securities of the
Portfolio and, (b) by the Adviser at any time, without the payment of
any penalty, on not more than 60 days' nor less than 30 days' written
notice to the Sub-Adviser, or (c) by the Sub-Adviser at any time,
without the payment of any penalty, on 90 days' written notice to the
Adviser. This Agreement shall terminate automatically and immediately
in the event of its assignment, or in the event of a termination of the
Adviser's agreement with the Trust. As used in this Section 6, the
terms "assignment" and "vote of a majority of the outstanding voting
securities" shall have the respective meanings set forth in the 1940
Act and the rules and regulations thereunder, subject to such
exceptions as may be granted by the Commission under the 1940 Act.
7. GOVERNING LAW. This Agreement shall be governed by the internal laws
of the Commonwealth of Massachusetts, without regard to conflict of
law principles; provided, however, that nothing herein shall be
construed as being inconsistent with the 1940 Act.
8. SEVERABILITY. Should any part of this Agreement be held invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and
their respective successors.
9. NOTICE: Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by
registered, certified or overnight mail, postage prepaid addressed by
the party giving notice to the other party at the last address
furnished by the other party:
To the Adviser at: SEI Financial Management Corporation
680 East Swedesford Road
Wayne, PA 19087
Attention: Legal Department
To the Sub-Adviser at: BlackRock Financial Management, Inc.
345 Park Avenue, 30th Floor
New York, NY 10154
Attn: President
10. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject
matter. This Agreement may be executed in any number of counterparts,
-4-
<PAGE>
each of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
A copy of the Declaration of Trust is on file with the Secretary of
State of the Commonwealth of Massachusetts, and notice is hereby given that the
obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of the Portfolio or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their officers designated below as of the day and year first
written above.
SEI Financial Management Corporation BlackRock Financial Management, Inc.
By: /s/ Kevin Robins By: /s/ Signature Appears Here
-------------------------------- ---------------------------------
Name: Kevin Robins Name:
------------------------------ -------------------------------
Title: SVP Title:
------------------------------
-5-
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI FINANCIAL MANAGEMENT CORPORATION
AND
BLACKROCK FINANCIAL MANAGEMENT, INC.
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
Core Fixed Income Portfolio %
-6-
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
AGREEMENT made this 14th day of June, 1996, between SEI Financial
Management Corporation, (the "Adviser") and Boston Partners Asset Management,
L.P. (the "Sub-Adviser").
WHEREAS, SEI Institutional Investments Trust, a Massachusetts business
trust (the "Trust" ) is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated June 14, 1996 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the Small Cap Portfolio (the
"Portfolio"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain the
Sub-Adviser to provide investment advisory services to the Adviser in connection
with the management of the Portfolio, and the Sub-Adviser is willing to render
such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Portfolio entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the Assets,
in accordance with the Portfolio's investment objectives, policies and
restrictions as stated in the Portfolio's prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, on a discretionary basis, in consultation with and
subject to the direction of the Adviser, determine from time to time what
Assets will be purchased, retained or sold by the Portfolio, and what
portion of the Assets will be invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement, the
Sub-Adviser shall act in conformity with the Trust's Declaration of Trust
(as defined herein) and the Prospectus and with the instructions and
directions of the Adviser and of the Board of Trustees of the Trust and
will conform to and comply with the requirements of the 1940 Act, the
Internal Revenue Code of 1986, and all other applicable federal and state
laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by the
Portfolio as provided in subparagraph (a) and will place orders with or
through such persons, brokers or dealers to carry out the policy with
respect to brokerage set forth in the Portfolio's Registration Statement
(as defined herein) and Prospectus or as the Board of Trustees or the
Adviser may direct from time to time, in conformity with federal securities
laws. In executing Portfolio transactions and selecting brokers or dealers,
the Sub-Adviser will use its best efforts to seek on behalf of the
Portfolio the best overall terms available. In assessing the best overall
terms available for any transaction, the Sub-Adviser shall consider all
factors that it deems relevant, including the breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker or dealer, and the reasonableness of the
commission, if any, both for the specific transaction and on a continuing
basis. In evaluating the best overall terms available, and in selecting the
broker-dealer to execute a particular transaction, the Sub-Adviser may also
consider the brokerage and research services provided (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934).
Consistent with any guidelines established by the Board of Trustees of the
Trust, the Sub-Adviser is authorized to pay to a broker or dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if, but only if, the Sub-Adviser determines in good faith that
such commission was reasonable in relation to the value of the brokerage
and research services provided by such broker or dealer--viewed in terms of
that particular transaction or terms of the overall responsibilities of the
Sub-Adviser to the Portfolio. In addition, the Sub-Adviser if authorized
to allocate purchase and sale orders for securities to brokers or dealers
<PAGE>
(including brokers and dealers that are affiliated with the Adviser,
Sub-Adviser or the Trust's principal underwriter) to take into account the
sale of shares of the Trust if the Sub-Adviser believes that the quality of
the transaction and the commission are comparable to what they would be
with other qualified firms. In no instance, however, will the Portfolio's
Assets be purchased from or sold to the Adviser, Sub-Adviser, the Trust's
principal underwriter, or any affiliated person of either the Trust,
Adviser, the Sub-Adviser or the principal underwriter, acting as principal
in the transaction, except to the extent permitted by the Securities and
Exchange Commission ("SEC") and the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940
Act. The Sub-Adviser shall provide to the Adviser or the Board of Trustees
such periodic and special reports, balance sheets or financial
information, and such other information with regard to its affairs as the
Adviser or Board of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and shall
timely furnish to the Adviser all information relating to the Sub-Adviser's
services under this Agreement needed by the Adviser to keep the other books
and records of the Portfolio required by Rule 31a-1 under the 1940 Act. The
Sub-Adviser shall also furnish to the Adviser any other information
relating to the Assets that is required to be filed by the Adviser or the
Trust with the SEC or sent to shareholders under the 1940 Act (including
the rules adopted thereunder) or any exemptive or other relief that the
Adviser or the Trust obtains from the SEC. The Sub-Adviser agrees that all
records that it maintains on behalf of the Portfolio are property of the
Portfolio and the Sub-Adviser will surrender promptly to the Portfolio any
of such records upon the Portfolio's request; provided, however, that the
Sub-Adviser may retain a copy of such records. In addition, for the
duration of this Agreement, the Sub-Adviser shall preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records as are
required to be maintained by it pursuant to this Agreement, and shall
transfer said records to any successor sub-adviser upon the termination of
this Agreement (or, if there is no successor sub-adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Portfolio's custodian on each business
day with information relating to all transactions concerning the
Portfolio's Assets and shall provide the Adviser with such information upon
request of the Adviser.
(f) The investment management services provided by the Sub-Adviser under this
Agreement are not to be deemed exclusive and the Sub-Adviser shall be free
to render similar services to others, as long as such services do not
impair the services rendered to the Adviser or the Trust. In addition, it
is understood that the Sub-Adviser performs investment advisory services
for various clients other than the Adviser. The Sub-Adviser may give advice
and take action in the performance of its duties with respect to any of its
other clients which may differ from the advice given, or the timing or
nature of action taken, with respect to the Assets. Nothing in this
Agreement shall be deemed to impose upon the Sub-Adviser any obligation to
purchase or sell for the Portfolio any security or other property which
Sub-Adviser purchases or sells for its own account or for the account of
any other client.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill its
commitment under this Agreement.
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held in the Portfolio. The Adviser shall instruct the custodian
and other parties providing services to the Portfolio to promptly forward
misdirected proxies to the Sub-Adviser.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners, officers
or employees.
-2-
<PAGE>
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Portfolio pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's performance of its
duties under this Agreement; provided, however, that in connection with its
management of the Assets, nothing herein shall be construed to relieve the
Sub-Adviser of responsibility for compliance with the Trust's Declaration
of Trust (as defined herein), the Prospectus, the instructions and
directions of the Board of Trustees of the Trust, the requirements of the
1940 Act, the Internal Revenue Code of 1986, and all other applicable
federal and state laws and regulations, as each is amended from time to
time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the Secretary
of State of the Commonwealth of Massachusetts (such Agreement and
Declaration of Trust, as in effect on the date of this Agreement and as
amended from time to time, herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Portfolio.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s) which
is attached hereto and made part of this Agreement. The fee will be
calculated based on the average monthly market value of the Assets under
the Sub-Adviser's management and will be paid to the Sub-Adviser monthly.
Except as may otherwise be prohibited by law or regulation (including any
then current SEC staff interpretation), the Sub-Adviser may, in its
discretion and from time to time, waive a portion of its fee.
5. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or damages
(including reasonable attorney's fees and other related expenses) howsoever
arising from or in connection with the performance of the Sub-Adviser's
obligations under this Agreement; provided, however, that the Sub-Adviser's
obligation under this Section 5 shall be reduced to the extent that the
claim against, or the loss, liability or damage experienced by the Adviser,
is caused by or is otherwise directly related to an explicit instruction by
the Adviser or the Adviser's own willful misfeasance, bad faith or
negligence, or to the reckless disregard of its duties under this
Agreement.
The Adviser shall indemnify and hold harmless the Sub-Adviser from and
against any and all claims, losses, liabilities or damages (including
reasonable attorney's fees and other related expenses) howsoever arising
from or in connection with the performance of the Adviser's obligations
under this Agreement; provided, however, that the Adviser's obligation
under this Section 5 shall be reduced to the extent that the claim against,
or the loss, liability or damage experienced by the Sub-Adviser, is caused
by or is otherwise directly related to the Sub-Adviser's own willful
misfeasance, bad faith or negligence, or to the reckless disregard of its
duties under this Agreement.
6. DURATION AND TERMINATION. This Agreement shall become effective upon its
approval by the Trust's Board of Trustees and by the vote of a majority of
the outstanding voting securities of the Portfolio. This Agreement shall
continue in effect for a period of more than two years from the date hereof
only so long as continuance is specifically approved at least annually in
conformance with the 1940 Act; provided, however, that this Agreement may
be terminated with respect to the Portfolio (a) by the Portfolio at any
time, without the payment of any penalty, by the vote of a majority of
Trustees of the Trust or by the vote of a majority of the outstanding
voting securities of the Portfolio, (b) by the Adviser at any time, without
the payment of any penalty, on not more than 60 days' nor less than 30
days' written notice to the Sub-Adviser, or (c) by the Sub-Adviser at any
time, without the payment of any penalty, on 90 days' written notice to the
Adviser. This Agreement shall terminate automatically and immediately in
the event of its assignment, or in the event of a termination of the
Adviser's agreement with the Trust. As used in this
-3-
<PAGE>
Section 6, the terms "assignment" and "vote of a majority of the
outstanding voting securities" shall have the respective meanings set forth
in the 1940 Act and the rules and regulations thereunder, subject to such
exceptions as may be granted by the SEC under the 1940 Act.
7. GOVERNING LAW. This Agreement shall be governed by the internal laws of the
Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
8. SEVERABILITY. Should any part of this Agreement be held invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
9. NOTICE: Any notice, advice or report to be given pursuant to this Agreement
shall be deemed sufficient if delivered or mailed by registered, certified
or overnight mail, postage prepaid addressed by the party giving notice to
the other party at the last address furnished by the other party:
To the Adviser at: SEI Financial Management Corporation
680 East Swedesford Road
Wayne, PA 19087
Attention: Legal Department
To the Sub-Adviser at: Boston Partners Asset Management, L.P.
One Financial Center
43rd Floor
Boston, MA 02111
Attn: President
10. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject matter.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
11. INFORMATION. The Sub-Adviser will notify the Adviser of any change in the
composition of its partners within a reasonable time after such change.
12. FORM ADV, PART II. Adviser represents that Sub-Adviser has delivered to it
a copy of Part II of Sub-Adviser's current Form ADV as required by the
Investment Advisers Act of 1940. If Adviser did not receive Part II of
Sub-Adviser's Form ADV at least 48 hours prior to entering into the
Agreement, Adviser may terminate this Agreement without penalty within five
business days hereof.
A copy of the Declaration of Trust is on file with the Secretary of State
of the Commonwealth of Massachusetts, and notice is hereby given that the
obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of the Portfolio or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
-4-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first
written above.
SEI Financial Management Corporation Boston Partners Asset Management, L.P.
By: Boston Partners, Inc., the General
Partner
By: /s/ Kevin P. Robins By: /s/ William T. Kelly
--------------------------------- --------------------------------
Name: Kevin P. Robins Name: William T. Kelly
------------------------------- ------------------------------
Title: S.V.P. Title: Treasurer
------------------------------ -----------------------------
-5-
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI FINANCIAL MANAGEMENT CORPORATION
AND
BOSTON PARTNERS ASSET MANAGEMENT, L.P.
Pursuant to Article 4. the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
Small Cap Portfolio %
-6-
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
AGREEMENT made this 14th day of June, 1996, between SEI Financial
Management Corporation, (the "Adviser") and Firstar Investment Research &
Management Company (the "Sub-Adviser").
WHEREAS, SEI Institutional Investments Trust, a Massachusetts business
trust (the "Trust") is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated June __, 1996 the "Advisory Agreement") with the Trust, pursuant to which
the Adviser will act as investment adviser to the Core Fixed Income Portfolio
(the "Portfolio"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain
the Sub-Adviser to provide investment advisory services to the Adviser in
connection with the management of the Portfolio, and the Sub-Adviser is
willing to render such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Portfolio entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the Assets,
in accordance with the Portfolio's investment objectives, policies and
restrictions as stated in the Portfolio's prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, in consultation with and subject to the direction of
the Adviser, determine from time to time what Assets will be purchased,
retained or sold by the Portfolio, and what portion of the Assets will be
invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement, the
Sub-Adviser shall act in conformity with the Trust's Declaration of Trust
(as defined herein) and the Prospectus and with the instructions and
directions of the Adviser and of the Board of Trustees of the Trust and
will conform to and comply with the requirements of the 1940 Act, the
Internal Revenue Code of 1986, and all other applicable federal and state
laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by the
Portfolio as provided in subparagraph (a) and will place orders with or
through such persons, brokers or dealers to carry out the policy with
respect to brokerage set forth in the Portfolio's Registration Statement
(as defined herein) and Prospectus or as the Board of Trustees or the
Adviser may direct from time to time, in conformity with federal securities
laws. In executing Portfolio transactions and selecting brokers or dealers,
the Sub-Adviser will use its best efforts to seek on behalf of the
Portfolio the best overall terms available. In assessing the best overall
terms available for any transaction, the Sub-Adviser shall consider all
factors that it deems relevant, including the breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker or dealer, and the reasonableness of the
commission, if any, both for the specific transaction and on a continuing
basis. In evaluating the best overall terms available, and in selecting the
broker-dealer to execute a particular transaction, the Sub-Adviser may also
consider the brokerage and research services provided (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934).
Consistent with any guidelines established by the Board of Trustees of the
Trust, the Sub-Adviser is authorized to pay to a broker or dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if, but only if, the Sub-Adviser determines in good faith that
such commission was reasonable in relation to the value of the brokerage
and research services provided by such broker or dealer - - viewed in terms
of that particular transaction or terms of the overall responsibilities of
the Sub-Adviser to the Portfolio. In addition, the Sub-Adviser if
authorized to allocate purchase and sale orders for securities to brokers
or dealers (including brokers and dealers that are affiliated with the
Adviser, Sub-Adviser or the Trust's principal underwriter) to take into
account the sale of shares of the Trust if the Sub-Adviser believes that
the quality of the transaction and the commission are comparable to what
they would be with other qualified firms. In no instance, however, will the
Portfolio's Assets be purchased
<PAGE>
from or sold to the Adviser, Sub-Adviser, the Trust's principal
underwriter, or any affiliated person of either the Trust, Adviser, the
Sub-Adviser or the principal underwriter, acting as principal in the
transaction, except to the extent permitted by the Securities and Exchange
Commission ("SEC") and the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act.
The Sub-Adviser shall provide to the Adviser or the Board of Trustees such
periodic and special reports, balance sheets or financial information, and
such other information with regard to its affairs as the Adviser or Board
of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and shall
timely furnish to the Adviser all information relating to the Sub-Adviser's
services under this Agreement needed by the Adviser to keep the other books
and records of the Portfolio required by Rule 31a-1 under the 1940 Act.
The Sub-Adviser shall also furnish to the Adviser any other information
relating to the Assets that is required to be filed by the Adviser or the
Trust with the SEC or sent to shareholders under the 1940 Act (including
the rules adopted thereunder) or any exemptive or other relief that the
Adviser or the Trust obtains from the SEC. The Sub-Adviser agrees that all
records that it maintains on behalf of the Portfolio are property of the
Portfolio and the Sub-Adviser will surrender promptly to the Portfolio any
of such records upon the Portfolio's request; provided, however, that the
Sub-Adviser may retain a copy of such records. In addition, for the
duration of this Agreement, the Sub-Adviser shall preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records as are
required to be maintained by it pursuant to this Agreement, and shall
transfer said records to any successor sub-adviser upon the termination of
this Agreement (or, if there is no successor sub-adviser to the Adviser).
(e) The Sub-Adviser shall provide the Portfolio's custodian on each business
day with information relating to all transactions concerning the
Portfolio's Assets and shall provide the Adviser with such information upon
request of the Adviser.
(f) The investment management services provided by the Sub-Adviser under this
Agreement are not to be deemed exclusive and the Sub-Adviser shall be free
to render similar services to others, as long as such services do not
impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill its
commitment under this Agreement.
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held in the Portfolio. The Adviser shall instruct the custodian
and other parties providing services to the Portfolio to promptly forward
misdirected proxies to the Sub-Adviser.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners, officers
or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Portfolio pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's performance of its
duties under this Agreement; provided, however, that in connection with its
management of the Assets, nothing herein shall be construed to relieve the
Sub-Adviser of responsibility for compliance with the Trust's Declaration
of Trust (as defined herein), the Prospectus, the instructions and
directions of the Board of Trustees of the Trust, the requirements of the
1940 Act, the Internal Revenue Code of 1986, and all other applicable
federal and state laws and regulations, as each is amended from time to
time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the Secretary
of State of the Commonwealth of Massachusetts (such Agreement and
Declaration of Trust, as in effect on the date of this Agreement and as
amended from time to time, herein called the "Declaration of Trust");
2
<PAGE>
(b) By-Laws for the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Portfolio.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s) which
is attached hereto and made part of this Agreement. The fee will be
calculated based on the average monthly market value of the Assets under
the Sub-Adviser's management and will be paid to the Sub-Adviser monthly.
Except as may otherwise be prohibited by law or regulation (including any
then current SEC staff interpretation), the Sub-Adviser may, in its
discretion and from time to time, waive a portion of its fee.
5. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or damages
(including reasonable attorney's fees and other related expenses) howsoever
arising from or in connection with the performance of the Sub-Adviser's
obligations under this Agreement; provided, however, that the Sub-Adviser's
obligation under this Section 5 shall be reduced to the extent that the
claim against, or the loss, liability or damage experienced by the Adviser,
is caused by or is otherwise directly related to the Adviser's own willful
misfeasance, bad faith or negligence, or to the reckless disregard of its
duties under this Agreement.
6. DURATION AND TERMINATION. This Agreement shall become effective upon its
approval by the Trust's Board of Trustees and by the vote of a majority of
the outstanding voting securities of the Portfolio.
This Agreement shall continue in effect for a period of more than two
years from the date hereof only so long as continuance is specifically
approved at least annually in conformance with the 1940 Act; provided,
however, that this Agreement may be terminated with respect to the
Portfolio (a) by the Portfolio at any time, without the payment of any
penalty, by the vote of a majority of Trustees of the Trust or by the
vote of a majority of the outstanding voting securities of the Portfolio,
(b) by the Adviser at any time, without the payment of any penalty, on not
more than 60 days' nor less than 30 days' written notice to the
Sub-Adviser, or (c) by the Sub-Adviser at any time, without the payment of
any penalty, on 90 days' written notice to the Adviser. This Agreement
shall terminate automatically and immediately in the event of its
assignment, or in the event of a termination of the Adviser's agreement
with the Trust. As used in this Section 6, the terms "assignment" and
"vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in the 1940 Act and the rules and
regulations thereunder, subject to such exceptions as may be granted by
the SEC under the 1940 Act.
7. GOVERNING LAW. This Agreement shall be governed by the internal laws of the
Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
8. SEVERABILITY. Should any part of this Agreement be held invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
9. NOTICE: Any notice, advice or report to be given pursuant to this Agreement
shall be deemed sufficient if delivered or mailed by registered, certified
or overnight mail, postage prepaid addressed by the party giving notice to
the other party at the last address furnished by the other party:
To the Adviser at: SEI Financial Management Corporation
680 East Swedesford Road
Wayne, PA 19087
Attention: Legal Department
3
<PAGE>
To the Sub-Adviser at: Firstar Investment Research & Management Company
777 E. Wisconsin Avenue, Suite 1800
Milwaukee, WI 53202
Attn: President
10. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject
matter. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
A copy of the Declaration of Trust is on file with the Secretary of State
of the Commonwealth of Massachusetts, and notice is hereby given that the
obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of the Portfolio or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI Financial Management Corporation Firstar Investment Research &
Management Company
By: /s/ Kevin P. Robins By: /s/ Charles B. Goeschell
--------------------------------- --------------------------------
Name: Kevin P. Robins Name: Charles B. Groeschell
------------------------------- ------------------------------
Title: SVP Title: Senior Vice President
------------------------------ -----------------------------
4
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI FINANCIAL MANAGEMENT CORPORATION
AND
FIRSTAR INVESTMENT RESEARCH & MANAGEMENT
COMPANY
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
Core Fixed Income Portfolio %
5
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
AGREEMENT made this 14th day of June, 1996, by and among SEI Financial
Management Corporation, (the "Adviser") and IDS Advisory Group Inc. (the
"Sub-Adviser").
WHEREAS, SEI Institutional Investments Trust, a Massachusetts business
trust (the "Trust") is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated June, 1996 (the "Advisory Agreement") with the Trust, pursuant to which
the Adviser will act as investment adviser to the Large Cap Portfolio (the
"Portfolio"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain the
Sub-Adviser to provide investment advisory services to the Adviser in connection
with the management of the Portfolio, and the Sub-Adviser is willing to render
such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Sub-Adviser shall manage the investment of
all of the securities and other assets of the Portfolio entrusted to it
hereunder, including the purchase, retention and disposition of securities
and other assets, in accordance with the Portfolio's investment objectives,
policies and restrictions as stated in the Portfolio's prospectus and
statement of additional information, as currently in effect and as amended
or supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall provide supervision of the Portfolio's investments
and determine from time to time what investments and securities will be
purchased, retained or sold by the Portfolio, and what portion of the
assets will be invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement, the
Sub-Adviser shall act in conformity with the Trust's Declaration of Trust
(as defined herein) and the Prospectus and with the instructions and
directions of the Adviser and of the Board of Trustees of the Trust and
will conform to and comply with the requirements of the 1940 Act, the
Internal Revenue Code of 1986, and all other applicable federal and state
laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the securities to be purchased or sold by
the Portfolio and will place orders with or through such persons, brokers
or dealers to carry out the policy with respect to brokerage set forth in
the Portfolio's Registration Statement and Prospectus or as the Board of
Trustees or the Adviser may direct from time to time, in conformity with
federal securities laws. In executing Portfolio transactions and selecting
brokers or dealers, the Sub-Adviser will use its best efforts to seek on
behalf of the Portfolio the best overall terms available. In assessing the
best overall terms available for any transaction, the Sub-Adviser shall
consider all factors that it deems relevant, including the breadth of the
market in the security, the price of the security, the financial condition
and execution capability of the
<PAGE>
broker or dealer, and the reasonableness of the commission, if any, both
for the specific transaction and on a continuing basis. In evaluating the
best overall terms available, and in selecting the broker-dealer to execute
a particular transaction the Sub-Adviser may also consider the brokerage
and research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) provided to the Portfolio and/or other
accounts over which the Sub-Adviser or an affiliate of the Sub-Adviser may
exercise investment discretion. The Sub-Adviser is authorized, to pay to a
broker or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for any of the Portfolios
which is in excess of the amount of commission another broker or dealer
would have charged for effecting that transaction if, but only if, the
Sub-Adviser determines in good faith that such commission was reasonable in
relation to the value of the brokerage and research services provided by
such broker or dealer - - viewed in terms of that particular transaction or
terms of the overall responsibilities of the Sub-Adviser to the Portfolio
and other accounts. In addition, the Sub-Adviser is authorized to allocate
purchase and sale orders for portfolio securities to brokers or dealers
(including brokers and dealers that are affiliated with the Sub-Adviser or
the Trust's principal underwriter) to take into account the sale of shares
of the Trust if the Sub-Adviser believes that the quality of the
transaction and the commission are comparable to what they would be with
other qualified firms. In no instance, however, will any Portfolio's
securities be purchased from or sold to the Sub-Adviser, the Trust's
principal underwriter, or any affiliated person of either the Trust, the
Sub-Adviser or the principal underwriter, acting as principal in the
transaction, except to the extent permitted by the Securities and Exchange
Commission and the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to the
Portfolio's portfolio transactions required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act
and shall render to the Adviser or Board of Trustees such periodic and
special reports as the Adviser or Board of Trustees may reasonably request.
Upon reasonable request and for purposes of a Securities and Exchange
Commission or other regulatory inspection, the Adviser will furnish
Sub-Adviser with information maintained by it as Adviser to the Portfolio.
The Sub-Adviser shall keep the Portfolio's books and records required to be
maintained by the Sub-Adviser by this Agreement and shall timely furnish to
the Adviser all information relating to the Sub-Adviser's services under
this Agreement needed by the Adviser to keep the other books and records of
the Portfolio required by Rule 31a-1 under the 1940 Act. The Sub-Adviser
shall also furnish to the Adviser any other information that is required to
be filed by the Adviser or the Trust with the Securities and Exchange
Commission ("SEC") or sent to shareholders under the 1940 Act (including
the rules adopted thereunder) or any exemptive or other relief that the
Adviser or the Trust obtains from the SEC. The Sub-Adviser agrees that all
records that it maintains on behalf of the Portfolio are property of the
Portfolio and the Sub-Adviser will surrender promptly to the Portfolio any
of such records upon the Portfolio's request; provided, however, that the
Sub-Adviser may retain a copy of such records. In addition, for the
duration of this Agreement, the Sub-Adviser shall preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records as are
required to be maintained by it pursuant to this Agreement, and shall
transfer said records to any successor Sub-Adviser upon the termination of
his Agreement (or, if there is no successor
2
<PAGE>
Sub-Adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Portfolio's custodian on each business
day with information relating to all transactions concerning the
Portfolio's assets and shall provide the Adviser with such information upon
request of the Adviser.
(f) The investment management services provided by the Sub-Adviser under this
Agreement are not to be deemed exclusive and the Sub-Adviser shall be free
to render similar services to others, as long as such services do not
impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill its
commitment under this Agreement.
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held in the Portfolio. The Adviser shall instruct custodian and
other parties providing services to the Portfolio to promptly forward
misdirected proxies to Sub-Adviser.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners, officers
or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Portfolio pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's performance of its
duties under this Agreement; provided, however, that nothing herein shall
be construed to relieve the Sub-Adviser of responsibility for compliance
with the Portfolio's investment objectives, policies, and restrictions, as
provided in Section 1 hereunder.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the Secretary
of State of the Commonwealth of Massachusetts (such Agreement and
Declaration of Trust, as in effect on the date of this Agreement and as
amended from time to time, herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Portfolio.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s) which
is attached hereto and made part of this Agreement. The fee will be
3
<PAGE>
calculated based on the average monthly market value of investments under
management and will be paid to the Sub-Adviser monthly. The Sub-Adviser
may, in its discretion and from time to time, waive a portion of its fee.
5. LIMITATION OF LIABILITY OF THE SUB-ADVISER. The Sub-Adviser shall not be
liable for any error of judgment or for any loss suffered by the Adviser in
connection with the performance of the Sub-Adviser's obligations under this
Agreement, except a loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services (in which case any
award of damages shall be limited to the period and the amount set forth in
Section 36(b)(3) of the 1940 Act), or a loss resulting from willful
misfeasance, bad faith or negligence on the Sub-Adviser's part in the
performance of its duties or from reckless disregard of its obligations and
duties under this Agreement, except as may otherwise be provided under
provisions of applicable state law which cannot be waived or modified
hereby.
6. REPORTS. During the term of this Agreement, the Adviser agrees to furnish
the Sub-Adviser at its principal office all prospectuses, proxy statements,
reports to stockholders, sales literature or other materials prepared for
distribution to stockholders of the Portfolios, the Trust or the public
that refer to the Sub-Adviser or its clients in any way prior to use
thereof and not to use material if the Sub-Adviser reasonably objects in
writing within five business days (or such other period as may be mutually
agreed) after receipt thereof. The Sub-Adviser's right to object to such
materials is limited to the portions of such materials that expressly
relate to the Sub-Adviser, its services and its clients. The Adviser
agrees to use its reasonable best efforts to ensure that materials prepared
by its employees or agents or its affiliates that refer to the Sub-Adviser
or its clients in any way are consistent with those materials previously
approved by the Sub-Adviser as referenced in the first sentence of this
paragraph. Sales literature may be furnished to the Sub-Adviser by first
class or overnight mail, facsimile transmission equipment or hand delivery.
7. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or damages
(including reasonable attorney's fees and other related expenses) howsoever
arising from or in connection with the performance by the Sub-Adviser of
its duties under this Agreement; provided, however, that the Sub-Adviser
shall not be required to indemnify or otherwise hold the Adviser harmless
under this Section 7 where the claim against, or the loss, liability or
damage experienced by the Adviser, is caused by or is otherwise directly
related to the Adviser's own willful misfeasance, bad faith or negligence,
or to the reckless disregard of its duties under this Agreement.
The Adviser shall indemnify and hold harmless the Sub-Adviser from and
against any and all claims, losses, liabilities or damages (including
reasonable attorney's fees and other related expenses) howsoever arising
from or in connection with the performance by the Adviser of its duties
under this Agreement; provided, however, that the Adviser shall not be
required to indemnify or otherwise hold the Sub-Adviser harmless under
this Section 7 where the claim against, or the loss, liability or damage
experienced by the Sub-Adviser, is caused by or is otherwise directly
related to the Sub-Adviser's own willful misfeasance, bad faith or
negligence, or to the reckless disregard of its duties under this
Agreement.
4
<PAGE>
8. DURATION AND TERMINATION. This Agreement shall become effective upon its
approval by the Trust's Board of Trustees and by the vote of a majority of
the outstanding voting securities of the Portfolio; provided, however, that
at any time the Adviser shall have obtained exemptive relief from the SEC
permitting it to engage a Sub-Adviser without first obtaining approval of
the Agreement from a majority of the outstanding voting securities of the
Portfolio(s) involved, the Agreement shall become effective upon its
approval by the Trust's Board of Trustees. Any Sub-Adviser so selected and
approved shall be without the protection accorded by shareholder approval
of an investment adviser's receipt of compensation under Section 36(b) of
the 1940 Act.
This Agreement shall continue in effect for a period of more than two years
from the date hereof only so long as continuance is specifically approved
at least annually in conformance with the 1940 Act; provided, however, that
this Agreement may be terminated with respect to the Portfolio (a) by the
Portfolio at any time, without the payment of any penalty, by the vote of a
majority of Trustees of the Trust or by the vote of a majority of the
outstanding voting securities of such Portfolio, (b) by the Adviser at any
time, without the payment of any penalty, on not more than 60 days' nor
less than 30 days' written notice to the other party, or (c) by the
Sub-Adviser at any time, without the payment of any penalty, on 90 days'
written notice to the other party. This Agreement shall terminate
automatically and immediately in the event of its assignment, or in the
event of a termination of the Adviser's agreement with the Trust. As used
in this Section 8, the terms "assignment" and "vote of a majority of the
outstanding voting securities" shall have the respective meanings set forth
in the 1940 Act and the rules and regulations thereunder, subject to such
exceptions as may be granted by the Commission under the 1940 Act.
9. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
10. SEVERABILITY. Should any part of this Agreement be held invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
11. NOTICE. Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by registered,
certified or overnight mail, postage prepaid addressed by the party giving
notice to the other party at the last address furnished by the other party:
To the Adviser at: SEI Financial Management Corporation
680 East Swedesford Road
Wayne, PA 19087
Attention: Legal Department
5
<PAGE>
To the Sub-Adviser at: IDS Advisory Group Inc.
IDS Tower 10
Minneapolis, MN 55440
Attention: President
12. MISCELLANEOUS. The Trust may be identified by name in the Sub-Adviser's
current client list. Such list may be used with third parties. The
Sub-Adviser is an affirmative action company.
13. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject matter.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
A copy of the Declaration of Trust of the Trust is on file with the
Secretary of State of the Commonwealth of Massachusetts, and notice is hereby
given that the obligations of this instrument are not binding upon any of the
Trustees, officers or shareholders of the Portfolio or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
Commission, whether of special or general application, such provision shall be
deemed to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI Financial Management Corporation IDS Advisory Group Inc.
By:Kevin Robins By:signature appears here
------------ -----------------------
Title: Title:President and CEO
------------------------ ------------------
6
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI FINANCIAL MANAGEMENT CORPORATION
AND
IDS ADVISORY GROUP INC.
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
Large Cap Portfolio .%
7
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
AGREEMENT made this 14th day of June, 1996, by and among SEI Financial
Management Corporation, (the "Adviser") and LSV Asset Management (the
"Sub-Adviser").
WHEREAS, SEI Institutional Investments Trust, a Massachusetts business
trust (the "Trust") is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated June 14, 1996 (the "Advisory Agreement") with the Trust, pursuant to which
the Adviser will act as investment adviser to the Large Cap Portfolio (the
"Portfolio"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain the
Sub-Adviser to provide investment advisory services to the Adviser in connection
with the management of the Portfolio, and the Sub-Adviser is willing to render
such investment advisory services.
NOW THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Sub-Adviser shall manage the investment
operations of the Portfolio and the composition of the Portfolio, including
the purchase, retention and disposition of securities and other assets, in
accordance with the Portfolio's investment objectives, policies and
restrictions as stated in the Portfolio's prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall provide supervision of the Portfolio's investments
and determine from time to time what investments and securities will be
purchased, retained or sold by the Portfolio, and what portion of the
assets will be invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement, the
Sub-Adviser shall act in conformity with the Trust's Declaration of Trust
(as defined herein) and the Prospectus and with the instructions and
directions of the Adviser and of the Board of Trustees of the Trust and
will conform to and comply with the requirements of the 1940 Act, the
Internal Revenue Code of 1986, and all other applicable federal and state
laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the securities to be purchased or sold by
the Portfolio and will place orders with or through such persons, brokers
or dealers to carry out the policy with respect to brokerage set forth in
the Portfolio's Registration Statement (as defined herein) and Prospectus
or as the Board of Trustees or the Adviser may direct from time to time, in
conformity with federal securities laws. In executing Portfolio
transactions and selecting brokers or dealers, the Sub-Adviser will use its
best efforts to seek on behalf of the Portfolio the best overall terms
available. In assessing the best overall terms available for any
transaction, the Sub-Adviser shall consider all factors that it deems
relevant, including the breadth of the market in the security, the price of
the security, the financial condition and execution capability of the
broker or dealer, and the reasonableness of the commission, if any, both
for the specific transaction and on a continuing basis. In evaluating the
best overall terms available, and in selecting the broker-dealer to execute
a particular transaction the Sub-Adviser may also consider the brokerage
and research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934)
<PAGE>
provided to the Portfolio and/or other accounts over which the Sub-Adviser
or an affiliate of the Sub-Adviser may exercise investment discretion. The
Sub-Adviser is authorized, subject to the prior approval of the Trust's
Board of Trustees, to pay to a broker or dealer who provides such brokerage
and research services a commission for executing a portfolio transaction
for any of the Portfolios which is in excess of the amount of commission
another broker or dealer would have charged for effecting that transaction
if, but only if, the Sub-Adviser determines in good faith that such
commission was reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer -- in terms of that
particular transaction or terms of the overall responsibilities of the
Sub-Adviser to the Portfolio. In addition, the Sub-Adviser if authorized to
allocate purchase and sale orders for portfolio securities to brokers or
dealers (including brokers and dealers that are affiliated with the
Sub-Adviser or the Trust's principal underwriter) to take into account the
sale of shares of the Trust if the Sub-Adviser believes that the quality
of the transaction and the commission are comparable to what they would be
with other qualified firms. In no instance, however, will any Portfolio's
securities be purchased from or sold to the Sub-Adviser, the Trust's
principal underwriter, or any affiliated person of either the Trust, the
Sub-Adviser or the principal underwriter, acting as principal in the
transaction, except to the extent permitted by the Securities and Exchange
Commission and the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to the
Portfolio's portfolio transactions required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act
and shall render to the Adviser or Board of Trustees such periodic and
special reports as the Adviser or Board of Trustees may reasonably request.
The Sub-Adviser shall keep the Portfolio's books and records required to be
maintained by the Sub-Adviser of this Agreement and shall timely furnish to
the Adviser all information relating to the Sub-Adviser's services under
this Agreement needed by the Adviser to keep the other books and records of
the Portfolio required by Rule 31a-1 under the 1940 Act. The Sub-Adviser
shall also furnish to the Adviser any other information that is required to
be filled by the Adviser or the Trust with the Securities and Exchange
Commission ("SEC") or sent to shareholders under the 1940 Act (including
the rules adopted thereunder) or any exemptive or other relief that the
Adviser or the Trust obtains from the SEC. The Sub-Adviser agrees that all
records that it maintains on behalf of the Portfolio are property of the
Portfolio and the Sub-Adviser will surrender promptly to the Portfolio any
of such records upon the Portfolio's request; provided, however, that the
Sub-Adviser may retain a copy of such records. In addition, for the
duration of this Agreement, the Sub-Adviser shall preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records as are
required to be maintained by it pursuant to this Agreement, and shall
transfer said records to any successor Sub-Adviser upon the termination of
his Agreement (or, if there is no successor Sub-Adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Portfolio's custodian on each business
day with information relating to all transactions concerning the
Portfolio's assets and shall provide the Adviser with such information upon
request of the Adviser.
(f) The investment management services provided by the Sub-Adviser under this
Agreement are not to be deemed exclusive and the Sub-Adviser shall be free
to render similar services to others, as long as such services do not
impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill its
commitment under this Agreement.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners, officers
or employees.
<PAGE>
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Portfolio pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's performance of its
duties under this Agreement; provided, however, that nothing herein shall
be construed to relieve the Sub-Adviser of responsibility for compliance
with the Portfolio's investment objectives, policies, and restrictions, as
provided in Section 1 hereunder.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the Secretary
of State of the Commonwealth of Massachusetts (such Agreement and
Declaration of Trust, as in effect on the date of this Agreement and as
amended from time to time, herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Portfolio.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s) which
is attached hereto and made part of this Agreement. The fee will be
calculated based on the average monthly market value of investments under
management and will be paid to the Sub-Adviser monthly. The Sub-Adviser
may, in its discretion and from time to time, waive a portion of its fee.
5. LIMITATION OF LIABILITY OF THE SUB-ADVISER. The Sub-Adviser shall not be
liable for any error of judgment or for any loss suffered by the Adviser in
connection with performance of its obligations under this Agreement, except
a loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services (in which case any award of damages
shall be limited to the period and the amount set forth in Section 36(b)(3)
of the 1940 Act), or a loss resulting from willful misfeasance, bad faith
or negligence on the Sub-Adviser's part in the performance of its duties or
from reckless disregard of its obligations and duties under this Agreement,
except as may otherwise be provided under provisions of applicable state
law which cannot be waived or modified hereby.
6. REPORTS. During the term of this Agreement, the Adviser agrees to furnish
the Sub-Adviser at its principal office all prospectuses, proxy statements,
reports to stockholders, sales literature or other materials prepared for
distribution to stockholders of the Portfolios, the Trust or the public
that refer to the Sub-Adviser or its clients in any way prior to use
thereof and not to use material if the Sub-Adviser reasonably objects in
writing within five business days (or such other period as may be mutually
agreed) after receipt thereof. The Sub-Adviser's right to object to such
materials is limited to the portions of such materials that expressly
relate to the Sub-Adviser, its services and its clients. The Adviser agrees
to use its reasonable best efforts to ensure that materials prepared by its
employees or agents or its affiliates that refer to the Sub-Adviser or its
clients in any way are consistent with those materials previously approved
by the Sub-Adviser as referenced in the first sentence of this paragraph.
Sales literature may be furnished to the Sub-Adviser by first class or
overnight mail, facsimile transmission equipment or hand delivery.
7. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or damages
(including reasonable attorney's fees and other related
<PAGE>
expenses) howsoever arising from or in connection with this Agreement or
the performance by the Sub-Adviser of its duties hereunder; provided,
however, that the Sub-Adviser shall not be required to indemnify or
otherwise hold the Adviser harmless under this Section 7 where the claim
against, or the loss, liability or damage experienced by the Adviser, is
caused by or is otherwise directly related to the Adviser's own willful
misfeasance, bad faith or negligence, or to the reckless disregard of its
duties under this Agreement.
8. DURATION AND TERMINATION. This Agreement shall become effective upon its
approval by the Trust's Board of Trustees and by the vote of a majority of
the outstanding voting securities of the Portfolio; provided, however, that
at any time the Adviser shall have obtained exemptive relief from the SEC
permitting it to engage a Sub-Adviser without first obtaining approval of
the Agreement from a majority of the outstanding voting securities of the
Portfolio(s) involved, the Agreement shall become effective upon its
approval by the Trust's Board of Trustees. Any Sub-Adviser so selected and
approved shall be without the protection accorded by shareholder approval
of an investment adviser's receipt of compensation under Section 36(b) of
the 1940 Act.
This Agreement shall continue in effect for a period of more
than two years from the date hereof only so long as continuance is
specifically approved at least annually in conformance with the 1940 Act;
provided, however, that this Agreement may be terminated with respect to
the Portfolio (a) by the Portfolio at any time, without the payment of any
penalty, by the vote of a majority of Trustees of the Trust or by the vote
of a majority of the outstanding voting securities of such Portfolio, (b)
by the Adviser at any time, without the payment of any penalty, on not more
than 60 days' nor less than 30 days' written notice to the other party, or
(c) by the Sub-Adviser at any time, without the payment of any penalty, on
90 days' written notice to the other party. This Agreement shall terminate
automatically and immediately in the event of its assignment, or in the
event of a termination of the Adviser's agreement with the Trust. As
used in this Section 8, the terms "assignment" and "vote of a majority of
the outstanding voting securities" shall have the respective meanings set
forth in the 1940 Act and the rules and regulations thereunder, subject to
such exceptions as may be granted by the Commission under the 1940 Act.
9. GOVERNING LAW. This Agreement shall be governed by the internal laws of the
Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
10. SEVERABILITY. Should any part of this Agreement be held invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
11. NOTICE: Any notice, advice or report to be given pursuant to this Agreement
shall be deemed sufficient if delivered or mailed by registered, certified
or overnight mail, postage prepaid addressed by the party giving notice to
the other party at the last address furnished by the other party:
To the Adviser at: SEI Financial Management Corporation
680 East Swedesford Road
Wayne, PA 19087
Attention: Legal Department
<PAGE>
To the Sub-Adviser at: LSV Asset Management
181 W. Madison Avenue
Chicago, IL 60602
Attention: President
12. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject matter.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
Where the effect of a requirement of the 1940 Act reflected in any provision of
this Agreement is altered by a rule, regulation or order of the Commission,
whether of special or general application, such provision shall be deemed to
incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI Financial Management Corporation LSV Asset Management
By SEI Funds, Inc.,
a general partner
By: /s/ Kevin Robins By: /s/ Gilbert Beebower
Kevin Robins
Title: Sr. Vice President Title: Senior Vice President
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI FINANCIAL MANAGEMENT
CORPORATION
AND
LSV ASSET MANAGEMENT
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation
at an annual rate as follows:
Large Cap Portfolio %
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
AGREEMENT made this 14 day of June, 1996, by and among SEI Financial
Management Corporation, (the "Adviser") and Mellon Equity Associates (the
"Sub-Adviser").
WHEREAS, SEI Institutional Investments Trust, a Massachusetts business
trust (the "Trust") is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated June 14, 1996 (the "Advisory Agreement") with the Trust, pursuant to which
the Adviser will act as investment adviser to the Large Cap Portfolio (the
"Portfolio"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain the
Sub-Adviser to provide investment advisory services to the Adviser in connection
with the management of the Portfolio, and the Sub-Adviser is willing to render
such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Sub-Adviser shall manage the investment
operations of the Portfolio and the composition of the Portfolio, including
the purchase, retention and disposition of securities and other assets, in
accordance with the Portfolio's investment objectives, policies and
restrictions as stated in the Portfolio's prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall provide supervision of the Portfolio's investments
and determine from time to time what investments and securities will be
purchased, retained or sold by the Portfolio, and what portion of the
assets will be invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement, the
Sub-Adviser shall act in conformity with the Trust's Declaration of Trust
(as defined herein) and the Prospectus and with the instructions and
directions of the Adviser and of the Board of Trustees of the Trust and
will conform to and comply with the requirements of the 1940 Act, the
Internal Revenue Code of 1986, and all other applicable federal and state
laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the securities to be purchased or sold by
the Portfolio and will place orders with or through such persons, brokers
or dealers to carry out the policy with respect to brokerage set forth in
the Portfolio's Registration Statement and Prospectus or as the Board of
Trustees or the Adviser may direct from time to time, in conformity with
federal securities laws. In executing Portfolio transactions and selecting
brokers or dealers, the Sub-Adviser will use its best efforts to seek on
behalf of the Portfolio the best overall terms available. In assessing the
best overall terms available for any transaction, the Sub-Adviser shall
consider all factors that it deems relevant, which may include the breadth
of the market in the security, the price of the security, the financial
condition and execution capability of the broker or dealer, and the
reasonableness of the commission, if any, both for the specific transaction
and on a continuing basis. In evaluating the best overall terms available,
and in selecting the broker-dealer to execute a particular transaction the
Sub-Adviser may also consider the brokerage and research services (as those
terms are defined in Section 28(e) of the Securities Exchange Act of 1934)
provided to the
<PAGE>
Portfolio and/or other accounts over which the Sub-Adviser or an affiliate
of the Sub-Adviser may exercise investment discretion. The Sub-Adviser is
authorized, subject to the prior approval of the Trust's Board of Trustees,
to pay to a broker or dealer who provides such brokerage and research
services a commission for executing a portfolio transaction for any of the
Portfolios which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if, but only it,
the Sub-Adviser determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer -- viewed in terms of that particular
transaction or terms of the overall responsibilities of the Sub-Adviser to
the Portfolio. In addition, the Sub-Adviser is authorized to allocate
purchase and sale orders for portfolio securities to brokers or dealers
(including brokers and dealers that are affiliated with the Sub-Adviser or
the Trust's principal underwriter) to take into account the sale of shares
of the Trust if the Sub-Adviser believes that the quality of the
transaction and the commission are comparable to what they would be with
other qualified firms. In no instance, however, will the Portfolio's
securities be purchased from or sold to the Sub-Adviser, the Trust's
principal underwriter, or any affiliated person of either the Trust, the
Sub-Adviser or the principal underwriter, acting as principal in the
transaction, except to the extent permitted by the Securities and Exchange
Commission and the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to the
Portfolio's portfolio transactions required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act
and shall render to the Adviser or Board of Trustees such periodic and
special reports as the Adviser or Board of Trustees may reasonably request.
The Sub-Adviser shall keep the Portfolio's books and records required to be
maintained by the Sub-Adviser of this Agreement and shall timely furnish to
the Adviser all information relating to the Sub-Adviser's services under
this Agreement needed by the Adviser to keep the other books and records of
the Portfolio required by Rule 31a-1 under the 1940 Act. The Sub-Adviser
shall also furnish to the Adviser any other information that is required to
be filed by the Adviser or the Trust with the Securities and Exchange
Commission ("SEC") or sent to shareholders under the 1940 Act (including
the rules adopted thereunder) or any exemptive or other relief that the
Adviser or the Trust obtains from the SEC. The Sub-Adviser agrees that all
records that it maintains on behalf of the Portfolio are property of the
Portfolio and the Sub-Adviser will surrender promptly to the Portfolio any
of such records upon the Portfolio's request; provided, however, that the
Sub-Adviser may retain a copy of such records. In addition, for the
duration of this Agreement, the Sub-Adviser shall preserve for the periods
prescribed by Rule 3la-2 under the 1940 Act any such records as are
required to be maintained by it pursuant to this Agreement, and shall
transfer said records to any successor Sub-Adviser upon the termination of
this Agreement (or, if there is no successor Sub-Adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Portfolio's custodian on each business
day with information relating to all transactions concerning the
Portfolio's assets and shall provide the Adviser with such information upon
request of the Adviser.
(f) The investment management services provided by the Sub-Adviser under this
Agreement are not to be deemed exclusive and the Sub-Adviser shall be free
to render similar services to others, as long as such services do not
impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill its
commitment under this Agreement.
- 2 -
<PAGE>
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners, officers
or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Portfolio pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's performance of its
duties under this Agreement; provided, however, that nothing herein shall
be construed to relieve the Sub-Adviser of responsibility for compliance
with the Portfolio's investment objectives, policies, and restrictions, as
provided in Section 1 hereunder. The Adviser hereby covenants to promptly
provide the Sub-Adviser with copies of any amendment or supplement to the
Portfolio's Registration Statement as well as all applicable trading
guidelines and procedures established for the Portfolio.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the Secretary
of State of the Commonwealth of Massachusetts (such Agreement and
Declaration of Trust, as in effect on the date of this Agreement and as
amended from time to time, herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the "By-
Laws");
(c) Prospectus(es) of the Portfolio.
(d) The Adviser hereby covenants to promptly furnish the Sub-Adviser with
copies of any amendments or supplements to such documents.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in Schedule A which is
attached hereto and made part of this Agreement. The fee will be calculated
based on the average monthly market value of investments under management
and will be paid to the Sub-Adviser monthly. The Sub-Adviser may, in its
discretion and from time to time, waive a portion of its fee.
5. LIMITATION OF LIABILITY OF THE SUB-ADVISER. The Sub-Adviser shall not be
liable for any error of judgment or for any loss suffered by the Adviser in
connection with performance of its obligations under this Agreement, except
a loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services (in which case any award of damages
shall be limited to the period and the amount set forth in Section 36(b)(3)
of the 1940 Act), or a loss resulting from willful misfeasance, bad faith
or negligence on the Sub-Adviser's part in the performance of its duties or
from reckless disregard of its obligations and duties under this Agreement,
except as may otherwise be provided under provisions of applicable state
law which cannot be waived or modified hereby.
6. REPORTS. During the term of this Agreement, the Adviser agrees to furnish
the Sub-Adviser at its principal office all prospectuses, proxy statements,
reports to stockholders, sales literature or other materials prepared for
distribution to stockholders of the Portfolios, the Trust or the public
that refer to the Sub-Adviser or its clients in any way prior to use
thereof and not to use material
- 3 -
<PAGE>
if the Sub-Adviser reasonably objects in writing within five business days
(or such other period as may be mutually agreed) after receipt thereof. The
Sub-Adviser's right to object to such materials is limited to the portions
of such materials that expressly relate to the Sub-Adviser, its services
and its clients. The Adviser agrees to use its reasonable best efforts to
ensure that materials prepared by its employees or agents or its affiliates
that refer to the Sub-Adviser or its clients in any way are consistent
with those materials previously approved by the Sub-Adviser as referenced
in the first sentence of this paragraph. Sales literature may be furnished
to the Sub-Adviser by first class or overnight mail, facsimile transmission
equipment or hand delivery.
7. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any, and all claims, losses, liabilities or
damages (including reasonable attorney's fees and other related expenses)
howsoever arising from or in connection with the performance by the
Sub-Adviser of its duties under this Agreement; provided, however, that the
Sub-Adviser shall not be required to indemnify or otherwise hold the
Adviser harmless under this Section 7 where the claim against, or the loss,
liability or damage experienced by the Adviser, is caused by or is
otherwise directly related to the Adviser's own willful misfeasance, bad
faith or negligence, or to the reckless disregard of its duties under this
Agreement.
The Adviser shall indemnify and hold harmless the Sub-Adviser from and
against any and all claims, losses, liabilities or damages (including
reasonable attorney's fees and other related expenses) howsoever arising
from or in connection with the performance by the Adviser of its duties
under this Agreement; provided, however, that the Adviser shall not be
required to indemnify or otherwise hold the Sub-Adviser harmless under this
Section 7 where the claim against, or the loss, liability or damage
experienced by the Sub-Adviser, is caused by or is otherwise directly
related to the Sub-Adviser's own willful misfeasance, bad faith or
negligence, or to the reckless disregard of its duties under this
Agreement.
8. DURATION AND TERMINATION. This Agreement shall become effective upon its
approval by the Trust's Board of Trustees and by the vote of a majority of
the outstanding voting securities of the Portfolio; provided, however, that
at any time the Adviser shall have obtained exemptive relief from the SEC
permitting it to engage a Sub-Adviser without first obtaining approval of
the Agreement from a majority of the outstanding voting securities of the
Portfolio involved, the Agreement shall become effective upon its approval
by the Trust's Board of Trustees. Any Sub-Adviser so selected and approved
shall be without the protection accorded by shareholder approval of an
investment adviser's receipt of compensation under Section 36(b) of the
1940 Act.
This Agreement shall continue in effect for a period of more than two years
from the date hereof only so long as continuance is specifically approved
at least annually in conformance with the 1940 Act; provided, however, that
this Agreement may be terminated with respect to the Portfolio (a) by the
Portfolio at any time, without the payment of any penalty, by the vote of a
majority of Trustees of the Trust or by the vote of a majority of the
outstanding voting securities of such Portfolio, (b) by the Adviser at any
time, without the payment of any penalty, on not more than 60 days' nor
less than 30 days' written notice to the other party, or (c) by the
Sub-Adviser at any time, without the payment of any penalty, on 90 days'
written notice to the other party. This Agreement shall terminate
automatically and immediately in the event of its assignment, or in the
event of a termination of the Adviser's agreement with the Trust. As used
in this Section 8, the terms "assignment" and "vote of a majority of the
outstanding voting securities" shall have the respective meanings set forth
in the 1940 Act and the rules and regulations thereunder, subject to such
exceptions as may be granted by the Commission under the 1940 Act.
- 4 -
<PAGE>
9. GOVERNING LAW. This Agreement shall be governed by the internal laws of the
Commonwealth of Massachusetts, without regard to conflict of law
principles: provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
10. SEVERABILITY. Should any part of this Agreement be held invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
11. NOTICE. Any notice, advice or report to be given pursuant to this Agreement
shall be deemed sufficient if delivered or mailed by registered, certified
or overnight mail, postage prepaid addressed by the party giving notice to
the other party at the last address furnished by the other party:
To the Adviser at: SEI Financial Management Corporation
680 East Swedesford Road
Wayne, PA 19087
Attention: Legal Department
To the Sub-Adviser at: Mellon Equity Associates
500 Grant Street, Suite 3700
Pittsburgh, Pa 15258
Attention: President
12. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject matter.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
Where the effect of a requirement of the 1940 Act reflected in any provision
of this Agreement is altered by a rule, regulation or order of the
Commission, whether of special or general application, such provision shall
be deemed to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI Financial Management Corporation Mellon Equity Associates
By: /s/ Kevin Robins By: /s/ William P. Rydell
------------------------------------- --------------------------------
Kevin Robins William P. Rydell
President & Chief Executive
Title: Senior Vice President Title: Officer
---------------------------------- ----------------------------
[STAMP]
- 5 -
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI FINANCIAL MANAGEMENT CORPORATION
AND
MELLON EQUITY ASSOCIATES
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
Large Cap Portfolio %
- 6 -
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
AGREEMENT made this 14th day of June, 1996, between SEI Financial
Management Corporation, (the "Adviser") and Merus-UCA Capital Management, a
division of the Union Bank of California, N.A. (the "Sub-Adviser").
WHEREAS, SEI Institutional Investments Trust, a Massachusetts business
trust (the "Trust") is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the " 1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated June 14, 1996 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the Large Cap Portfolio (the
"Portfolio"), each a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain the
Sub-Adviser to provide investment advisory services to the Adviser in connection
with the management of the Portfolio, and the Sub-Adviser is willing to render
such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Portfolio entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the Assets,
in accordance with the Portfolio's investment objectives, policies and
restrictions as stated in the Portfolio's prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, subject to the direction of the Adviser,
determine what Assets will be purchased, retained or sold by the Portfolio,
and what portion of the Assets will be invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement,
the Sub-Adviser shall act in conformity with the Trust's Declaration of
Trust (as defined herein) and the Prospectus and with the written
instructions and directions of the Adviser and of the Board of Trustees of
the Trust and will conform to and comply with the requirements of the 1940
Act, the Internal Revenue Code of 1986, and all other applicable federal
and state laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by
the Portfolio as provided in subparagraph (a) and will place orders with or
through such persons, brokers or dealers to carry out the policy with
respect to brokerage set forth in the Portfolio's Registration Statement
(as defined herein) and Prospectus or as the Board of Trustees or the
Adviser may direct from time to time, in conformity with federal securities
laws. In executing Portfolio transactions and selecting brokers or dealers,
the Sub-Adviser will use its best efforts to seek on behalf of the
Portfolio the best overall terms available. In assessing the best overall
terms available for any transaction, the Sub-Adviser shall consider all
factors that it deems relevant, including the breadth of the market in the
security, the price of the security, the financial condition and execution
1
<PAGE>
capability of the broker or dealer, and the reasonableness of the
commission, if any, both for the specific transaction and on a continuing
basis. In evaluating the best overall terms available, and in selecting the
broker-dealer to execute a particular transaction, the Sub-Adviser may also
consider the brokerage and research services provided (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934).
Consistent with any guidelines established by the Board of Trustees of the
Trust, the Sub-Adviser is authorized to pay to a broker or dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if, but only if, the Sub-Adviser determines in good faith that
such commission was reasonable in relation to the value of the brokerage
and research services provided by such broker or dealer - - viewed in terms
of that particular transaction or terms of the overall responsibilities of
the Sub-Adviser to the Portfolio. In addition, the Sub-Adviser is
authorized to allocate purchase and sale orders for securities to brokers
or dealers (including brokers and dealers that are affiliated with the
Adviser, Sub-Adviser or the Trust's principal underwriter) to take into
account the sale of shares of the Trust if the Sub-Adviser believes that
the quality of the transaction and the commission are comparable to what
they would be with other qualified firms. In no instance, however, will the
Portfolio's Assets be purchased from or sold to the Adviser, Sub-Adviser,
the Trust's principal underwriter, or any affiliated person of either the
Trust, Adviser, the Sub-Adviser or the principal underwriter, acting as
principal in the transaction, except to the extent permitted by the
Securities and Exchange Commission ("SEC") and the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940
Act. The Sub-Adviser shall provide to the Adviser or the Board of Trustees
such periodic and special reports, balance sheets or financial information,
and such other information with regard to its affairs as the Adviser or
Board of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and shall
timely furnish to the Adviser all information relating to the Sub-Adviser's
services under this Agreement needed by the Adviser to keep the other books
and records of the Portfolio required by Rule 31a-1 under the 1940 Act. The
Sub-Adviser shall also furnish to the Adviser any other information
relating to the Assets that is required to be filed by the Adviser or the
Trust with the SEC or sent to shareholders under the 1940 Act (including
the rules adopted thereunder) or any exemptive or other relief that the
Adviser or the Trust obtains from the SEC. The Sub-Adviser agrees that all
records that it maintains on behalf of the Portfolio are property of the
Portfolio and the Sub-Adviser will surrender promptly to the Portfolio any
of such records upon the Portfolio's request; provided, however, that the
Sub-Adviser, may retain a copy of such records. In addition, for the
duration of this Agreement, the Sub-Adviser shall preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records as are
required to be maintained by it pursuant to this Agreement, and shall
transfer said records to any successor sub-adviser upon the termination of
this Agreement (or, if there is no successor sub-adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Portfolio's custodian on each
business day with information relating to all transactions concerning the
Portfolio's Assets and shall provide the Adviser with such information upon
request of the Adviser.
2
<PAGE>
(f) The investment management services provided by the Sub-Adviser under
this Agreement are not to be deemed exclusive and the Sub-Adviser shall be
free to render similar services to others, as long as such services do not
impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill its
commitment under this Agreement.
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held in the Portfolio. The Adviser shall instruct the custodian
and other parties providing services to the Portfolio to promptly forward
misdirected proxies to the Sub-Adviser.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners, officers
or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Portfolio pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's performance of its
duties under this Agreement; provided, however, that in connection with its
management of the Assets, nothing herein shall be construed to relieve the
Sub-Adviser of responsibility for compliance with the Trust's Declaration
of Trust (as defined herein), the Prospectus, the instructions and
directions of the Board of Trustees of the Trust, the requirements of the
1940 Act, the Internal Revenue Code of 1986, and all other applicable
federal and state laws and regulations, as each is amended from time to
time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of the Commonwealth of Massachusetts (such Agreement and
Declaration of Trust, as in effect on the date of this Agreement and as
amended from time to time, herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Portfolio.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s)
which is attached hereto and made part of this Agreement. The fee will be
calculated based on the average monthly market value of the Assets under
the Sub-Adviser's management and will be paid to the Sub-Adviser monthly.
Except as may otherwise be prohibited by law or regulation (including any
then current SEC staff interpretation), the Sub-Adviser may, in its
discretion and from time to time, waive a portion of its fee.
5. LIMITATION OF LIABILITY OF THE SUB-ADVISER. The Sub-Adviser shall not be
liable for any error of judgment or for any loss suffered by the Adviser in
connection with performance of its obligations under this Agreement, except
a loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services (in which case any award of damages
shall be limited to the
3
<PAGE>
period and the amount set forth in Section 36(b)(3) of the 1940 Act), or a
loss resulting from willful misfeasance, bad faith or negligence on the
Sub-Adviser's part in the performance of its duties or from reckless
disregard of its obligations and duties under this Agreement, except as may
otherwise be provided under provisions of applicable state law which cannot
be waived or modified hereby.
6. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or damages
(including reasonable attorney's fees and other related expenses) howsoever
arising from or in connection with the performance of the Sub-Adviser's
obligations under this Agreement; provided, however, that the Sub-Adviser's
obligation under this Section 6 shall be reduced to the extent that the
claim against, or the loss, liability or damage experienced by the Adviser,
is caused by or is otherwise directly related to the Adviser's own willful
misfeasance, bad faith or negligence, or to the reckless disregard of its
duties under this Agreement.
The Adviser shall indemnify and hold harmless the Sub-Adviser from and
against any and all claims, losses, liabilities or damages (including
reasonable attorney's fees and other related expenses) howsoever arising
from or in connection with the performance of the Adviser's obligations
under this Agreement; provided, however, that the Adviser's obligation
under this Section 6 shall be reduced to the extent that the claim against,
or the loss, liability or damage experienced by the Sub-Adviser, is caused
by or is otherwise directly related to the Sub-Adviser's own willful
misfeasance, bad faith or negligence, or to the reckless disregard of its
duties under this Agreement.
7. DURATION AND TERMINATION. This Agreement shall become effective upon its
approval by the Trust's Board of Trustees and by the vote of a majority of
the outstanding voting securities of the Portfolio. This Agreement shall
continue in effect for a period of more than two years from the date hereof
only so long as continuance is specifically approved at least annually in
conformance with the 1940 Act; provided, however, that this Agreement may
be terminated with respect to the Portfolio (a) by the Portfolio at any
time, without the payment of any penalty, by the vote of a majority of
Trustees of the Trust or by the vote of a majority of the outstanding
voting securities of the Portfolio, (b) by the Adviser at any time,
without the payment of any penalty, on not more than 60 days' nor less than
30 days' written notice to the Sub-Adviser, or (c) by the Sub-Adviser at
any time, without the payment of any penalty, on 90 days' written notice to
the Adviser. This Agreement shall terminate automatically and immediately
in the event of its assignment, or in the event of a termination of the
Adviser's agreement with the Trust. As used in this Section 7, the terms
"assignment" and "vote of a majority of the outstanding voting securities"
shall have the respective meanings set forth in the 1940 Act and the rules
and regulations thereunder, subject to such exceptions as may be granted by
the SEC under the 1940 Act.
8. GOVERNING LAW. This Agreement shall be governed by the internal laws of the
Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
9. SEVERABILITY. Should any part of this Agreement be held invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
4
<PAGE>
10. NOTICE: Any notice, advice or report to be given pursuant to this Agreement
shall be deemed sufficient if delivered or mailed by registered, certified
or overnight mail, postage prepaid addressed by the party giving notice to
the other party at the last address furnished by the other party:
To the Adviser at: SEI Financial Management Corporation
680 East Swedesford Road
Wayne, PA 19087
Attention: Legal Department
To the Sub-Adviser at: Merus-UCA Capital Management
475 Sansome Street
San Francisco, CA 94111
Attention: President
11. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject matter.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
A copy of the Declaration of Trust is on file with the Secretary of State
of the Commonwealth of Massachusetts, and notice is hereby given that the
obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of the Portfolio or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI Financial Management Corporation Merus-UCA Capital Management, a
division of the Union Bank of
California, N.A.
By: Signature Appears Here By: Signature Appears Here
-------------------------------- --------------------------------
Name: Kathryn L. Stanton Name: Clark R. Gates
------------------------------ ------------------------------
Title: Vice President Title: President
----------------------------- -----------------------------
5
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI FINANCIAL MANAGEMENT CORPORATION
AND
MERUS-UCA CAPITAL MANAGEMENT, A DIVISION OF THE UNION BANK OF CALIFORNIAN, N.A.
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
Large Cap Portfolio . %
6
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
AGREEMENT made this 14th day of June, 1996, by and among SEI Financial
Management Corporation, (the "Adviser") and Montgomery Asset Management, L.P.
(the "Sub-Adviser").
WHEREAS, SEI Institutional Investments Trust, a Massachusetts business
trust (the "Trust") is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated June 14, 1996 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the Emerging Markets Equity
Portfolio (the "Portfolio"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain the
Sub-Adviser to provide investment advisory services to the Adviser in connection
with the management of the Portfolio, and the Sub-Adviser is willing to render
such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision and direction by the
Adviser and the Trust's Board of Trustees, the Sub-Adviser shall
manage on a discretionary basis the investment operation of all of the
securities and other assets of the Portfolio entrusted to it hereunder
(the "Assets") and the composition of the Portfolio, including the
purchase, retention and disposition of the Assets, in accordance with
the Portfolio's investment objectives, policies and restrictions as
stated in the Portfolio's prospectus and statement of additional
information, as currently in effect and as amended or supplemented
from time to time by written notice to the Sub-Adviser (referred to
collectively as the "Prospectus"), and subject to the following:
(a) The Sub-Adviser shall provide supervision of the Assets and determine
from time to time what Assets will be purchased, retained or sold by
the Portfolio, and what portion of the Assets will be invested or held
uninvested in cash. In furtherance of the forgoing, the Adviser hereby
designates and appoints the Sub-Adviser as agent and attorney-in-fact
of the Trust, with authority and without further approval of the
Adviser (except as expressly provided for herein or as may be required
by law) to make and execute, in the name and on behalf of the
Portfolio, all agreements, instruments and other documents and to take
all such other action which the Sub-Adviser considers necessary or
advisable to carry out its duties hereunder. By way of example and not
by way of limitation, in connection with any purchase for the
Portfolio of securities that are not registered under the Securities
Act of 1933, as amended (the "Securities Act"), the Sub-Adviser shall
have authority, among other things to: (i) commit to purchase such
securities for the Portfolio on the terms and conditions under which
such securities are offered; (ii) execute such agreements, instruments
and documents (including, without limitation, purchase agreements and
subscription documents), and make such commitments, as may be required
or otherwise in connection with the purchase and sale or such
securities; (iii) represent that the Portfolio is an "accredited
investor" under the Securities Act; and (iv) commit that such
securities will not be offered or sold by the Portfolio except in
compliance with the registration requirements of the Securities Act or
an exemption therefrom. This power-of-attorney is a continuing
power-of-attorney and shall remain in full force and effect until
revoked by the Adviser in writing, but any such revocation shall not
affect any transaction initiated prior to receipt by the Sub-Adviser
or such notice.
<PAGE>
(b) In the performance of its duties and obligations under this
Agreement, the Sub-Adviser shall act in conformity with the Trust's
Declaration of Trust (as defined herein) and the Prospectus and with
the instructions and directions of the Adviser and of the Board of
Trustees of the Trust and will conform to and comply with the
requirements of the 1940 Act, the Internal Revenue Code of 1986, and
all other applicable federal and state laws and regulations, as each
is amended from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by
the Portfolio and will place orders with or through such persons,
brokers or dealers to carry out the policy with respect to brokerage
set forth in the Portfolio's Prospectus or as the Board of Trustees or
the Adviser may direct from time to time, in conformity with federal
securities laws. In executing Portfolio transactions and selecting
brokers or dealers, the Sub-Adviser will use its best efforts to seek
on behalf of the Portfolio the best overall terms available. In
assessing the best overall terms available for any transaction, the
Sub-Adviser shall consider all factors that it deems relevant,
including the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the
broker or dealer, and the reasonableness of the commission, if any,
both for the specific transaction and on a continuing basis. In
evaluating the best overall terms available, and in selecting the
broker-dealer to execute a particular transaction the Sub-Adviser may
also consider the brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934)
provided to the Portfolio and/or other accounts over which the
Sub-Adviser or an affiliate of the Sub-Adviser may exercise investment
discretion. The Sub-Adviser is authorized, subject to the prior
approval of the Trust's Board of Trustees, to pay to a broker or
dealer who provides such brokerage and research services a commission
for executing a portfolio transaction for the Portfolio which is in
excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if, but only if, the
Sub-Adviser determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer - - viewed in terms of that
particular transaction or terms of the overall responsibilities of the
Sub-Adviser to the Portfolio. In addition, the Sub-Adviser is
authorized to allocate purchase and sale orders for portfolio
securities to brokers or dealers (including brokers and dealers that
are affiliated with the Adviser, the Sub-Adviser or the Trust's
principal underwriter) to take into account the sale of shares of the
Trust if the Sub-Adviser believes that the quality of the transaction
and the commission are comparable to what they would be with other
qualified firms. In no instance, however, will the Portfolio's Assets
be purchased from or sold to the Adviser, the Sub-Adviser, the Trust's
principal underwriter, or any affiliated person of either the Trust,
the Adviser, the Sub-Adviser or the principal underwriter, acting as
principal in the transaction, except to the extent permitted by the
Securities and Exchange Commission and the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5),
(6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1
under the 1940 Act and shall render to the Adviser or Board of Trustees
such periodic and special reports as the Adviser or Board of Trustees
may reasonably request.
The Sub-Adviser shall keep the books and records relating to the
Assets required to be maintained by the Sub-Adviser under this
Agreement and shall timely furnish to the Adviser all information
requested by the Adviser relating to the Sub-Adviser's services under
this Agreement needed by the Adviser to keep the other books and
records of the Portfolio required by Rule 31a-1 under the 1940 Act.
Upon request, the Sub-Adviser shall also furnish to the Adviser any
other information relating to the Assets that is required to be filed
by the Adviser or the Trust with the Securities and Exchange
Commission ("SEC") or sent to shareholders under the 1940 Act
(including the rules adopted thereunder) or any exemptive or other
relief that the Adviser or the Trust obtains from the SEC. The
Sub-Adviser agrees that all records that it maintains on behalf of the
Portfolio are property of the Portfolio and the Sub-Adviser will
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<PAGE>
surrender promptly to the Portfolio any of such records upon the
Portfolio's request,; provided, however, that the Sub-Adviser may
retain a copy of such records. In addition, for the duration of this
Agreement, the Sub-Adviser shall preserve for the periods prescribed
by Rule 31a-2 under the 1940 Act any such records as are required to
be maintained by it pursuant to this Agreement, and shall transfer
said records to any successor Sub-Adviser upon the termination of his
Agreement (or, if there is no successor Sub-Adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Portfolio's custodian on each
business day with information relating to all transactions concerning
the Portfolio's Assets and shall provide the Adviser with such
information upon request of the Adviser.
(f) The investment management services provided by the Sub-Adviser under
this Agreement are not to be deemed exclusive and the Sub-Adviser
shall be free to render similar services to others, as long as such
services do not impair the services rendered to the Adviser or the
Trust.
The Sub-Adviser shall not be obligated to purchase or sell for
the Portfolio securities which the Sub-Adviser may purchase or sell or
recommend for purchase or sale for itself or for the portfolios of
other clients. Moreover, the Adviser acknowledges that circumstances
may arise under which the Sub-Adviser determines that while it would
be both desirable and suitable that a particular security be purchased
or sold for the account of more than one of the Sub-Adviser's
portfolios, there is a limited supply or demand for that security.
Under such circumstances, the Adviser acknowledges that, while the
Sub-Adviser will seek to allocate the opportunity to purchase or sell
that security among those portfolios on an equitable basis (including
as between portfolios of the Sub-Adviser's nondiscretionary clients, to
whom the Sub-Adviser makes recommendations, and portfolios of its
discretionary clients, such as the Portfolio), the Sub-Adviser shall
not be required to assure equality of treatment among all of its
clients (including that that opportunity to purchase or sell that
security will be proportionately allocated among those portfolios
according to any particular or predetermined standards or criteria).
Where, because of the prevailing market conditions, it is not
possible to receive the same price or time of execution for all of the
securities or other investments purchased or sold for the Portfolio,
transactions for the Portfolio may be reported with the average prices
of those transactions. In certain instances, the Sub-Adviser, in its
discretion, may place a large order to purchase or sell a particular
security or other investment for the Portfolio and the accounts of one
or more other clients. Because of the prevailing market conditions,
it is frequently not possible to receive the same price or time of
execution for all of the securities or other investments purchased or
sold. When this occurs, the Sub-Adviser will average the various prices
and charge or credit the Portfolio with the average price. In such
instances, the confirmation for such transaction sent to the Adviser
will disclose the average price. Upon request, the Sub-Adviser will
make the underlying records reflecting the actual transaction
available for the Adviser's inspection.
The Portfolio may include securities of companies for which
Montgomery Securities, an affiliate of the Sub-Adviser, acts as
investment banker or financial adviser or with which it has other
confidential relationships or in which it maintains a position or
makes a market or otherwise has an interest. The Adviser appreciates
that, for good commercial and legal reasons, nonpublic information (a)
which becomes available to Montgomery Securities through its
relationships or for any other reason cannot be passed on to the
Sub-Adviser or the Adviser, or used for the benefit of the Portfolio;
and (b) which becomes available to the Sub-Adviser for any reason
cannot be passed onto the Adviser or used for the benefit of the
Portfolio. The Adviser understands that Montgomery Securities, an
affiliate of the Sub-Adviser may provide investment banking,
investment advisory and brokerage services to persons other than the
Adviser. These activities may result in a conflict between the
interests of Montgomery
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<PAGE>
Securities and the Adviser which, in certain circumstances, may
restrict the Sub-Adviser from trading or recommending the trading in
certain securities.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to
fulfill its commitment under this Agreement.
(h) The Adviser hereby authorizes the Sub-Adviser to receive and
confer upon the Sub-Adviser complete discretion to vote proxies
solicited by or with respect to the issuers of securities in which the
Assets may be invested from time to time ("Proxies"). The Sub-Adviser
shall vote all Proxies in a manner which, at the time of any Proxy
vote is cast, is consistent with the Sub-Adviser's good faith
judgment. The Adviser shall promptly deliver or cause to be delivered
to the Sub-Adviser all Proxies, including any information with respect
thereto, received by the Adviser or the Trust, or by any agent of the
Adviser or the Trust, including without limitation, any custodian of
the Assets. The Adviser shall hold the Sub-Adviser harmless for
failure to vote Proxies, which are not received by, or delivered to,
the Sub-Adviser in sufficient time to permit the Sub-Adviser to vote
such Proxies in accordance with the Sub-Adviser's good faith judgment.
Services to be furnished by the Sub-Adviser under this Agreement may
be furnished through the medium of any of the Sub-Adviser's partners,
officers or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have
responsibility for all services to be provided to the Portfolio
pursuant to the Advisory Agreement and shall oversee and review the
Sub-Adviser's performance of its duties under this Agreement;
provided, however, that nothing herein shall be construed to relieve
the Sub-Adviser of responsibility for compliance with the Portfolio's
investment objectives, policies, and restrictions, as provided in
Section 1 hereunder, in connection with its management of the Assets.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents, and will provide the Sub-Adviser with any amendments
thereto prior to or immediately upon effectiveness:
(a) The Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of the Commonwealth of Massachusetts (such
Agreement and Declaration of Trust, as in effect on the date of this
Agreement and as amended from time to time, herein called the
"Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, is herein called the
"By-Laws");
(c) Prospectus(es) of the Portfolio.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by
the Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s)
which is attached hereto and made part of this Agreement. The fee will
be calculated based on the average monthly market value
4
<PAGE>
of the Assets under the Sub-Adviser's management and will be paid to
the Sub-Adviser monthly. The Sub-Adviser may, in its discretion and
from time to time, waive a portion of its fee.
5. LIMITATION OF LIABILITY OF THE SUB-ADVISER. The Sub-Adviser shall not
be liable for any error of judgment or for any loss suffered by the
Adviser in connection with performance of its obligations under this
Agreement, except a loss resulting from a breach of fiduciary duty
with respect to the receipt of compensation for services (in which
case any award of damages shall be limited to the period and the
amount set forth in Section 36(b)(3) of the 1940 Act), or a loss
resulting from willful misfeasance, bad faith or negligence on the
Sub-Adviser's part in the performance of its duties or from reckless
disregard of its obligations and duties under this Agreement, except
as may otherwise be provided under provisions of applicable state law
which cannot be waived or modified hereby.
6. REPORTS. During the term of this Agreement, the Adviser agrees to
furnish the Sub-Adviser at its principal office all prospectuses,
proxy statements, reports to stockholders, sales literature or other
materials prepared for distribution to stockholders of the Portfolios,
the Trust or the public that refer to the Sub-Adviser or its clients in
any way prior to use thereof and not to use material if the Sub-Adviser
reasonably objects in writing within five business days (or such other
period as may be mutually agreed) after receipt thereof. The
Sub-Adviser's right to object to such materials is limited to the
portions of such materials that expressly relate to the Sub-Adviser,
its services and its clients. The Adviser agrees to use its reasonable
best efforts to ensure that materials prepared by its employees
or agents or its affiliates that refer to the Sub-Adviser or its
clients in any way are consistent with those materials previously
approved by the Sub-Adviser as referenced in the first sentence of this
paragraph. Sales literature may be furnished to the Sub-Adviser by
first class or overnight mail, facsimile transmission equipment or
hand delivery.
7. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or
damages (including reasonable attorney's fees and other related
expenses) howsoever arising from or in connection with a breach by the
Sub-Adviser of its duties and obligations under this Agreement;
provided, however, that the Sub-Adviser shall not be required to
indemnify or otherwise hold the Adviser harmless under this Section 7
where the claim against, or the loss, liability or damage experienced
by the Adviser is caused by or is otherwise directly related to the
Adviser's own willful misfeasance, bad faith or negligence, or to the
reckless disregard of its duties under this Agreement.
The Adviser shall indemnify and hold harmless the Sub-Adviser from and
against any and all claims, losses, liabilities or damages (including
reasonable attorney's fees and other related expenses) howsoever
arising from or in connection with a breach by the Adviser of its
duties and obligations under this Agreement; provided, however, that
the Adviser shall not be required to indemnify or otherwise hold the
Sub-Adviser harmless under this Section 7 where the claim against, or
the loss, liability or damage experienced by the Sub-Adviser is caused
by or is otherwise directly related to the Sub-Adviser's own willful
misfeasance, bad faith or negligence, or to the reckless disregard of
its duties under this Agreement.
8. CUSTODY. The custodian of the assets comprising the Emerging Markets
Equity Portfolio will be State Street Bank and Trust Company (the
"Custodian"). The Assets will be maintained by the Custodian in a
subaccount, separately identified from the other assets of the
Emerging Markets Equity Portfolio and the Trust. All transactions with
respect to assets in the Portfolio will be carried out through the
Custodian or such other custodians of the Portfolio as approved or
appointed by the Portfolio.
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<PAGE>
9. DURATION AND TERMINATION. This Agreement shall become effective upon
its approval by the Trust's Board of Trustees and by the vote of a
majority of the outstanding voting securities of the Portfolio;
provided, however, that at any time the Adviser shall have obtained
exemptive relief from the SEC permitting it to engage a Sub-Adviser
without first obtaining approval of the Agreement from a majority of
the outstanding voting securities of the Portfolio(s) involved, the
Agreement shall become effective upon its approval by the Trust's
Board of Trustees. Any Sub-Adviser so selected and approved shall be
without the protection accorded by shareholder approval of an
investment adviser's receipt of compensation under Section 36(b) of
the 1940 Act.
This Agreement shall continue in effect for a period of more than two
years from the date hereof only so long as continuance is
specifically approved at least annually in conformance with the 1940
Act; provided, however, that this Agreement may be terminated with
respect to the Portfolio (a) by the Portfolio at any time, without
the payment of any penalty, by the vote of a majority of Trustees of
the Trust or by the vote of a majority of the outstanding voting
securities of the Portfolio, (b) by the Adviser at any time, without
the payment of any penalty, on not more than 60 days' nor less than
30 days' written notice to the Sub-Adviser, or (c) by the
Sub-Adviser at any time, without the payment of any penalty, on 90
days' written notice to the Adviser. This Agreement shall terminate
automatically and immediately in the event of its assignment, or in
the event of a termination of the Adviser's agreement with the
Trust. As used in this Section 8, the terms "assignment" and "vote
of a majority of the outstanding voting securities" shall have the
respective meanings set forth in the 1940 Act and the rules and
regulations thereunder, subject to such exceptions as may be granted
by the Commission under the 1940 Act.
10. GOVERNING LAW. This Agreement shall be governed by the internal laws
of the Commonwealth of Massachusetts, without regard to conflict of
law principles; provided, however, that nothing herein shall be
construed as being inconsistent with the 1940 Act.
11. SEVERABILITY. Should any part of this Agreement be held invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto
and their respective successors.
12. NOTICE: Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by
registered, certified or overnight mail, postage prepaid addressed by
the party giving notice to the other party at the last address
furnished by the other party:
To the Adviser at: SEI Financial Management Corporation
680 East Swedesford Road
Wayne, PA 19087
Attention: Legal Department
To the Sub-Adviser at: Montgomery Asset Management, L.P.
600 Montgomery Street
San Francisco, CA 94111
Attention: Kevin T. Hamilton
13. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject
matter. This Agreement may be executed in any number of counterparts,
each of which shall be
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<PAGE>
deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
14. INFORMATION. The Sub-Adviser will notify the Adviser of any change in
the composition of its partners within a reasonable time after such
change.
15. ADVISER INFORMATION. For the purposes of complying with the laws of
the State of California, the Adviser hereby consents to the
disclosure to third parties of (i) the identity of the Portfolio as
part of a representative list of other clients of the Sub-Adviser,
(ii) investment results and other data of the Portfolio (other than
the identity of the Adviser) in connection with providing composite
investment results of the Sub-Adviser and (iii) investments and
transactions of the Portfolio (other than the identity of the
Adviser) in connection with proving composite information of the
Sub-Adviser.
A copy of the Declaration of Trust is on file with the Secretary of
State of the Commonwealth of Massachusetts, and notice is hereby given that
the obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of the Portfolio or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
Commission, whether of special or general application, such provision shall
be deemed to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their officers designated below as of the day and year
first written above.
SEI Financial Management Corporation Montgomery Asset Management, L.P.
by Montgomery Asset Management, Inc.,
its General Partner
By: /s/ Kevin P. Robins By: Signature Appears Here
---------------------------------------------------------------------------
Title: S.V.P. Title: Managing Director
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7
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI FINANCIAL MANAGEMENT
CORPORATION
AND
MONTGOMERY ASSET MANAGEMENT, L.P.
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
Emerging Markets Equity Portfolio % up to $50 million
% over $50 million
8
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
AGREEMENT made this 14th day of June, 1996, between SEI Financial
Management Corporation, (the "Adviser") and Nicholas-Applegate Capital
Management (the Sub-Adviser).
WHEREAS, SEI Institutional Investments Trust, a Massachusetts business
trust (the "Trust") is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated June 14, 1996 (the "Advisory Agreement") with the Trust, pursuant to which
the Adviser will act as investment adviser to the Small Cap Portfolio (the
"Portfolio"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain the
Sub-Adviser to provide investment advisory services to the Adviser in connection
with the management of the Portfolio, and the Sub-Adviser is willing to render
such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Portfolio entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the Assets,
in accordance with the Portfolio's investment objectives, policies and
restrictions as stated in the Portfolio's prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, in consultation with and subject to the direction of
the Adviser, determine from time to time what Assets will be purchased,
retained or sold by the Portfolio, and what portion of the Assets will be
invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement, the
Sub-Adviser shall act in conformity with the Trust's Declaration of Trust
(as defined herein) and the Prospectus and with the instructions and
directions of the Adviser and of the Board of Trustees of the Trust and
will conform to and comply with the requirements of the 1940 Act, the
Internal Revenue Code of 1986, and all other applicable federal and state
laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by the
Portfolio as provided in subparagraph (a) and will place orders with or
through such persons, brokers or dealers to carry out the policy with
respect to brokerage set forth in the Portfolio's Registration Statement
(as defined herein) and Prospectus or as the Board of Trustees or the
Adviser may direct from time to time, in conformity with federal securities
laws. In executing Portfolio transactions and selecting brokers or dealers,
the Sub-Adviser will use its best efforts to seek on behalf of the
Portfolio the best overall terms available. In assessing the best overall
terms available for any transaction, the Sub-Adviser shall consider all
factors that it deems relevant, including the breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker or dealer, and the reasonableness of the
commission, if any, both for the specific transaction and on a continuing
basis. In evaluating the best overall terms available, and in selecting the
broker-dealer to execute a particular transaction, the Sub-Adviser may also
<PAGE>
consider the brokerage and research services provided (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934).
Consistent with any guidelines established by the Board of Trustees of the
Trust, the Sub-Adviser is authorized to pay to a broker or dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if, but only if, the Sub-Adviser determines in good faith that
such commission was reasonable in relation to the value of the brokerage
and research services provided by such broker or dealer -- viewed in terms
of that particular transaction or terms of the overall responsibilities of
the Sub-Adviser to the Portfolio. In addition, the Sub-Adviser if
authorized to allocate purchase and sale orders for securities to brokers
or dealers (including brokers and dealers that are affiliated with the
Adviser, Sub-Adviser or the Trust's principal underwriter) to take into
account the sale of shares of the Trust if the Sub-Adviser believes that
the quality of the transaction and the commission are comparable to what
they would be with other qualified firms. In no instance, however, will the
Portfolio's Assets be purchased from or sold to the Adviser, Sub-Adviser,
the Trust's principal underwriter, or any affiliated person of either the
Trust, Adviser, the Sub-Adviser or the principal underwriter, acting as
principal in the transaction, except to the extent permitted by the
Securities and Exchange Commission and the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act.
The Sub-Adviser shall provide to the Adviser or the Board of Trustees such
periodic and special reports, balance sheets or financial information, and
such other information with regard to its affairs as the Adviser or Board
of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and shall
timely furnish to the Adviser all information relating to the Sub-Adviser's
services under this Agreement needed by the Adviser to keep the other books
and records of the Portfolio required by Rule 31a-1 under the 1940 Act. The
Sub-Adviser shall also furnish to the Adviser any other information
relating to the Assets that is required to be filed by the Adviser or the
Trust with the Securities and Exchange Commission ("SEC") or sent to
shareholders under the 1940 Act (including the rules adopted thereunder) or
any exemptive or other relief that the Adviser or the Trust obtains from
the SEC. The Sub-Adviser agrees that all records that it maintains on
behalf of the Portfolio are property of the Portfolio and the Sub-Adviser
will surrender promptly to the Portfolio any of such records upon the
Portfolio's request; provided, however, that the Sub-Adviser may retain a
copy of such records. In addition, for the duration of this Agreement, the
Sub-Adviser shall preserve for the periods prescribed by Rule 31a-2 under
the 1940 Act any such records as are required to be maintained by it
pursuant to this Agreement, and shall transfer said records to any
successor Sub-Adviser upon the termination of his Agreement (or, if there
is no successor Sub-Adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Portfolio's custodian on each business
day with information relating to all transactions concerning the
Portfolio's Assets and shall provide the Adviser with such information upon
request of the Adviser.
(f) The investment management services provided by the Sub-Adviser under this
Agreement are not to be deemed exclusive and the Sub-Adviser shall be free
to render similar services to others, as long as such services do not
impair the services rendered to the Adviser or the Trust.
<PAGE>
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill its
commitment under this Agreement. The Sub-Adviser will notify the Adviser of
any change in its partners within a reasonable time.
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held in the Portfolio. The Adviser shall instruct the custodian
and other parties providing services to the Portfolio to promptly forward
misdirected proxies to the Sub-Adviser.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners, officers
or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Portfolio pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's performance of its
duties under this Agreement; provided, however, that in connection with its
management of the Assets, nothing herein shall be construed to relieve the
Sub-Adviser of responsibility for compliance with the Trust's Declaration
of Trust (as defined herein), the Prospectus, the instructions and
directions of the Board of Trustees of the Trust, the requirements of the
1940 Act, the Internal Revenue Code of 1986, and all other applicable
federal and state laws and regulations, as each is amended from time to
time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the Secretary
of State of the Commonwealth of Massachusetts (such Agreement and
Declaration of Trust, as in effect on the date of this Agreement and as
amended from time to time, herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Portfolio.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s) which
is attached hereto and made part of this Agreement. The fee will be
calculated based on the average monthly market value of the Assets under
the Sub-Adviser's management and will be paid to the Sub-Adviser monthly.
Except as may otherwise be prohibited by law or regulation (including any
then current SEC staff interpretation), the Sub-Adviser may, in its
discretion and from time to time, waive a portion of its fee.
5. LIMITATION OF LIABILITY OF THE SUB-ADVISER. The Sub-Adviser shall not be
liable for any error of judgment or for any loss suffered by the Adviser in
connection with the performance of its obligations under this Agreement,
except a loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services (in which case any award of damages
shall be limited to the period and the amount set forth in Section 36(b)(3)
of the 1940 Act), or a loss resulting from willful misfeasance, bad faith
or negligence on the Sub-Adviser's part in the performance of its duties or
from reckless disregard of its obligations and duties under this Agreement,
except as may otherwise be provided under provisions of applicable state
law which cannot be waived or modified hereby.
<PAGE>
6. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or damages
(including reasonable attorney's fees and other related expenses) howsoever
arising from or in connection with the performance of the Sub-Adviser's
obligations under this Agreement; provided, however, that the Sub-Adviser's
obligation under this Section 6 shall be reduced to the extent that the
claim against, or the loss, liability or damage experienced by the Adviser,
is caused by or is otherwise directly related to the Adviser's own willful
misfeasance, bad faith or negligence, or to the reckless disregard of its
duties under this Agreement.
The Adviser shall indemnify and hold harmless the Sub-Adviser from and
against any and all claims, losses, liabilities or damages (including
reasonable attorney's fees and other related expenses) howsoever arising
from or in connection with the performance of the Adviser's obligations
under this Agreement; provided, however, that the Adviser's obligation
under this Section 6 shall be reduced to the extent that the claim against,
or the loss, liability or damage experienced by the Sub-Adviser, is caused
by or is otherwise directly related to the Sub-Adviser's own willful
misfeasance, bad faith or negligence, or the reckless disregard of its
duties under this Agreement.
7. DURATION AND TERMINATION. This Agreement shall become effective upon
its approval by the Trust's Board of Trustees and by the vote of a
majority of the outstanding voting securities of the Portfolio.
This Agreement shall continue in effect for a period of more than two
years from the date hereof only so long as continuance is specifically
approved at least annually in conformance with the 1940 Act; provided,
however, that this Agreement may be terminated with respect to the
Portfolio (a) by the Portfolio at any time, without the payment of any
penalty, by the vote of a majority of Trustees of the Trust or by the vote
of a majority of the outstanding voting securities of the Portfolio, (b) by
the Adviser at any time, without the payment of any penalty, on not more
than 60 days' nor less than 30 days' written notice to the Sub-Adviser,
or (c) by the Sub-Adviser at any time, without the payment of any penalty,
on 90 days' written notice to the Adviser. This Agreement shall terminate
automatically and immediately in the event of its assignment, or in the
event of a termination of the Adviser's agreement with the Trust. As used
in this Section 7, the terms "assignment" and "vote of a majority of
the outstanding voting securities" shall have the respective meanings set
forth in the 1940 Act and the rules and regulations thereunder, subject to
such exceptions as may be granted by the Commission under the 1940 Act.
8. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
9. SEVERABILITY. Should any part of this Agreement be held invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their
respective successors.
10. NOTICE: Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by registered,
certified or overnight mail, postage prepaid addressed by the party giving
notice to the other party at the last address furnished by the other party:
To the Adviser at: SEI Financial Management Corporation
680 East Swedesford Road
Wayne, PA 19087
Attention: Legal Department
<PAGE>
To the Sub-Adviser at: Nicholas-Applegate Capital Management
600 West Broadway, 29th Floor
San Diego, CA 92101
Attention: General Counsel
11. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject matter.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but such counterparts shall,
together, constitute only one instrument.
12. MISCELLANEOUS. The name "Nicholas-Applegate" is a registered trademark
of the Sub-Adviser, and any use or continued use of the name by the
Adviser is subject to the Sub-Adviser's continuing, consent, in its sole
discretion, which consent will not be withheld during the term of this
Agreement.
A copy of the Declaration of Trust of the Trust is on file with the
Secretary of State of the Commonwealth of Massachusetts, and notice is hereby
given that the obligations of this instrument are not binding upon any of the
Trustees, officers or shareholders of the Portfolio or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
Commission, whether of special or general application, such provision shall
be deemed to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first
written above.
SEI Financial Management Corporation Nicholas-Applegate Capital Management
By: Kevin P. Robins By: E. Blake Moore, Jr
--------------------------------- ---------------------------------
Name: Kevin P. Robins Name: E. Blake Moore, Jr.
------------------------------- -------------------------------
Title: S.V.P. Title: General Counsel
------------------------------- ------------------------------
<PAGE>
Schedule A
to the
Sub-Advisory Agreement Dated June 14, 1996
between
SEI Financial Management Corporation
and
Nicholas-Applegate Capital Management
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at
an annual rate as follows:
Small Cap Portfolio %
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
AGREEMENT made this 14th day of June, 1996, between SEI Financial
Management Corporation, (the "Adviser") and Provident Investment Counsel, Inc.
(the "Sub-Adviser").
WHEREAS, SEI Institutional Investments Trust, a Massachusetts business
trust (the "Trust") is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated June 14, 1996 (the "Advisory Agreement") with the Trust, pursuant to which
the Adviser will act as investment adviser to the Large Cap Portfolio (the
"Portfolio"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain the
Sub-Adviser to provide investment advisory services to the Adviser in connection
with the management of the Portfolio, and the Sub-Adviser is willing to render
such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Portfolio entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the Assets,
in accordance with the Portfolio's investment objectives, policies and
restrictions as stated in the Portfolio's prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, in consultation with and subject to the direction of
the Adviser, determine from time to time what Assets will be purchased,
retained or sold by the Portfolio, and what portion of the Assets will be
invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement, the
Sub-Adviser shall act in conformity with the Trust's Declaration of Trust
(as defined herein) and the Prospectus and with the instructions and
directions of the Adviser and of the Board of Trustees of the Trust and
will conform to and comply with the requirements of the 1940 Act, the
Internal Revenue Code of 1986, and all other applicable federal and state
laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by the
Portfolio as provided in subparagraph (a) and will place orders with or
through such persons, brokers or dealers to carry out the policy with
respect to brokerage set forth in the Portfolio's Registration Statement
(as defined herein) and Prospectus or as the Board of Trustees or the
Adviser may direct from time to time, in conformity with federal securities
laws. In executing Portfolio transactions and selecting brokers or
dealers, the Sub-Adviser will use its best efforts to seek on behalf of the
Portfolio the best overall terms available. In assessing the best overall
terms available for any transaction, the Sub-Adviser shall consider all
factors that it deems relevant, including the breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker or dealer, and the reasonableness of the
commission, if any, both for the specific transaction and on a continuing
basis. In evaluating the best overall terms available, and in selecting
the broker-dealer to execute a particular transaction, the Sub-Adviser may
also consider the brokerage and research services provided (as those terms
are defined in Section 28(e) of the Securities Exchange Act of 1934).
Consistent with any guidelines established by the Board of Trustees of the
Trust, the Sub-Adviser is authorized to pay to a broker or dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction for the
<PAGE>
Portfolio which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if, but only if,
the Sub-Adviser determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer -- viewed in terms of that particular
transaction or terms of the overall responsibilities of the Sub-Adviser to
the Portfolio. In addition, the Sub-Adviser if authorized to allocate
purchase and sale orders for securities to brokers or dealers (including
brokers and dealers that are affiliated with the Adviser, Sub-Adviser or
the Trust's principal underwriter) to take into account the sale of shares
of the Trust if the Sub-Adviser believes that the quality of the
transaction and the commission are comparable to what they would be with
other qualified firms. In no instance, however, will the Portfolio's
Assets be purchased from or sold to the Adviser, Sub-Adviser, the Trust's
principal underwriter, or any affiliated person of either the Trust,
Adviser, the Sub-Adviser or the principal underwriter, acting as principal
in the transaction, except to the extent permitted by the Securities and
Exchange Commission ("SEC") and the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act.
The Sub-Adviser shall provide to the Adviser or the Board of Trustees such
periodic and special reports, balance sheets or financial information, and
such other information with regard to its affairs as the Adviser or Board
of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and shall
timely furnish to the Adviser all information relating to the Sub-Adviser's
services under this Agreement needed by the Adviser to keep the other books
and records of the Portfolio required by Rule 31a-1 under the 1940 Act.
The Sub-Adviser shall also furnish to the Adviser any other information
relating to the Assets that is required to be filed by the Adviser or the
Trust with the SEC or sent to shareholders under the 1940 Act (including
the rules adopted thereunder) or any exemptive or other relief that the
Adviser or the Trust obtains from the SEC. The Sub-Adviser agrees that all
records that it maintains on behalf of the Portfolio are property of the
Portfolio and the Sub-Adviser will surrender promptly to the Portfolio any
of such records upon the Portfolio's request; provided, however, that the
Sub-Adviser may retain a copy of such records. In addition, for the
duration of this Agreement, the Sub-Adviser shall preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records as are
required to be maintained by it pursuant to this Agreement, and shall
transfer said records to any successor sub-adviser upon the termination of
this Agreement (or, if there is no successor sub-adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Portfolio's custodian on each business
day with information relating to all transactions concerning the
Portfolio's Assets and shall provide the Adviser with such information upon
request of the Adviser.
(f) The investment management services provided by the Sub-Adviser under this
Agreement are not to be deemed exclusive and the Sub-Adviser shall be free
to render similar services to others, as long as such services do not
impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill its
commitment under this Agreement.
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held in the Portfolio. The Adviser shall instruct the custodian
and other parties providing services to the Portfolio to promptly forward
misdirected proxies to the Sub-Adviser.
-2-
<PAGE>
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners, officers
or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Portfolio pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's performance of its
duties under this Agreement; provided, however, that in connection with its
management of the Assets, nothing herein shall be construed to relieve the
Sub-Adviser of responsibility for compliance with the Trust's Declaration
of Trust (as defined herein), the Prospectus, the instructions and
directions of the Board of Trustees of the Trust, the requirements of the
1940 Act, the Internal Revenue Code of 1986, and all other applicable
federal and state laws and regulations, as each is amended from time to
time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the Secretary
of State of the Commonwealth of Massachusetts (such Agreement and
Declaration of Trust, as in effect on the date of this Agreement and as
amended from time to time, herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Portfolio.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s) which
is attached hereto and made part of this Agreement. The fee will be
calculated based on the average monthly market value of the Assets under
the Sub-Adviser's management and will be paid to the Sub-Adviser monthly.
Except as may otherwise be prohibited by law or regulation (including any
then current SEC staff interpretation), the Sub-Adviser may, in its
discretion and from time to time, waive a portion of its fee.
5. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or damages
(including reasonable attorney's fees and other related expenses) howsoever
arising from or in connection with the performance of the Sub-Adviser s
obligations under this Agreement; provided, however, that the Sub-Adviser s
obligation under this Section 5 shall be reduced to the extent that the
claim against, or the loss, liability or damage experienced by the Adviser,
is caused by or is otherwise directly related to the Adviser's own willful
misfeasance, bad faith or negligence, or to the reckless disregard of its
duties under this Agreement.
6. DURATION AND TERMINATION. This Agreement shall become effective upon its
approval by the Trust's Board of Trustees and by the vote of a majority of
the outstanding voting securities of the Portfolio. This Agreement shall
continue in effect for a period of more than two years from the date hereof
only so long as continuance is specifically approved at least annually in
conformance with the 1940 Act; provided, however, that this Agreement may
be terminated with respect to the Portfolio (a) by the Portfolio at any
time, without the payment of any penalty, by the vote of a majority of
Trustees of the Trust or by the vote of a majority of the outstanding
voting securities of the Portfolio, (b) by the Adviser at any time, without
the payment of any penalty, on not more than 60 days' nor less than 30
days' written notice to the Sub-Adviser, or (c) by the Sub-Adviser at any
time, without the payment of any penalty, on 90 days' written
-3-
<PAGE>
notice to the Adviser. This Agreement shall terminate automatically and
immediately in the event of its assignment, or in the event of a
termination of the Adviser's agreement with the Trust. As used in this
Section 6, the terms "assignment" and "vote of a majority of the
outstanding voting securities" shall have the respective meanings set forth
in the 1940 Act and the rules and regulations thereunder, subject to such
exceptions as may be granted by the SEC under the 1940 Act.
7. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
8. SEVERABILITY. Should any part of this Agreement be held invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
9. NOTICE: Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by registered,
certified or overnight mail, postage prepaid addressed by the party giving
notice to the other party at the last address furnished by the other party:
To the Adviser at: SEI Financial Management Corporation
680 East Swedesford Road
Wayne, PA 19087
Attention: Legal Department
To the Sub-Adviser at: Provident Investment Counsel, Inc.
300 North Lake Avenue, Penthouse
Pasadena, CA 91101
Attention: President
10. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject matter.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
A copy of the Declaration of Trust is on file with the Secretary of State
of the Commonwealth of Massachusetts, and notice is hereby given that the
obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of the Portfolio or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
-4-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI Financial Management Corporation Provident Investment Counsel, Inc.
By: /s/ Kevin Robins By: /s/ Thad M. Brown
-------------------------- ------------------------------
Name: Kevin Robins Name: Thad M. Brown
-------------------------- -----------------------------
Title: Senior Vice President Title: Sr. V.P./C.O.O.
------------------------- --------------------------
-5-
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI FINANCIAL MANAGEMENT CORPORATION
AND
PROVIDENT INVESTMENT COUNSEL, INC.
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
Large Cap Portfolio . %
-6-
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
AGREEMENT made this 14th day of June, 1996, by and between SEI Financial
Management Corporation (the "Adviser") and Strategic Fixed Income, L.P. (the
"Sub-Adviser").
WHEREAS, SEI Institutional Investments Trust, a Massachusetts business
trust (the "Trust"), is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated June 14, 1996 (the "Advisory Agreement") with the Trust, pursuant to which
the Adviser acts as investment adviser to the International Fixed Income
Portfolio (the "Portfolio"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain the
Sub-Adviser to provide investment advisory services to the Adviser in connection
with the management of the Portfolio, and the Sub-Adviser is willing to render
such investment advisory services, upon the terms and subject to the conditions
set forth below.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Portfolio entrusted to it by the Adviser
("the Assets"), including the purchase, retention and disposition of the
Assets, in accordance with the Portfolio's investment objectives, policies
and restrictions as stated in the Portfolio s prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), provided the Sub-Adviser shall be given reasonable advance
notice of any such amendments and supplements, and subject to the
following:
(a) The Sub-Adviser, subject to the direction of the Adviser, and, at the
request of the Adviser, in consultation with the Adviser, shall determine
from time to time what Assets will be purchased, retained or disposed of by
the Portfolio, and what portion of the Assets will be invested or held
uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement, the
Sub-Adviser shall act in conformity with the Trust's Declaration of Trust
(as defined herein) and the Prospectus and with the instructions and
directions of the Adviser and of the Board of Trustees of the Trust and
will conform to and comply with the applicable requirements of the 1940
Act, the applicable requirements of Subchapter M of the Internal Revenue
Code of 1986, and all other applicable federal and state laws and
regulations, as each is amended from time to time; provided, however, that
in no event shall the Sub-Adviser be obligated to act in conformity with
and instruction or direction of the Adviser or of the Board of Trustees of
the Trust if the Sub-Adviser believes in good faith (in consultation with
counsel, where practicable) that implementation of such instruction or
direction would involve the Sub-Adviser in a violation of law or willful
malfeasance, bad faith or gross negligence on its part.
(c) The Sub-Adviser shall determine the Assets to be purchased or disposed of
by the Portfolio as provided in subparagraph (a) and will place orders with
or through such brokers, dealers or banks to carry out the policy with
respect to brokerage set forth in the Portfolio's
<PAGE>
Prospectus or as the Board of Trustees or the Adviser may direct from time
to time, in conformity with federal securities laws. In executing Portfolio
transactions and selecting brokers, dealers or banks the Sub-Adviser will
use its best efforts to seek on behalf of the Portfolio the best overall
terms available. In assessing the best overall terms available for any
transaction, the Sub-Adviser shall consider all factors that it deems
relevant, including the breadth of the market in the security, the price of
the security, the financial condition and execution capability of the
broker, dealer, or bank and the reasonableness of the commission, if any,
both for the specific transaction and on a continuing basis.
The Sub-Adviser is authorized to allocate purchase and sale orders for
securities to brokers or dealers (including brokers and dealers that are
affiliated with the Adviser, Sub-Adviser or the Trust's principal
underwriter) to take into account the sale of shares of the Trust if the
Sub-Adviser believes that the quality of the transaction and the commission
are comparable to what they would be with other qualified firms. In no
instance, however, will the Portfolio s Assets be purchased from or sold to
the Adviser, Sub-Adviser, the Trust's principal underwriter, or any
affiliated person of either the Trust, Adviser, the Sub-Adviser or the
principal underwriter, acting as principal in the transaction, except to
the extent permitted by or under the 1940 Act or by the Securities and
Exchange Commission ("SEC").
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31-1 under the 1940 Act
and shall render to the Adviser or Board of Trustees such periodic and
special reports as the Adviser or Board of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and shall
timely furnish to the Adviser, at its request, all information relating to
the Sub-Adviser's services under this Agreement needed by the Adviser to
keep the other books and records of the Portfolio required by Rule 31a-1
under the 1940 Act. The Sub-Adviser shall also furnish to the Adviser, at
its request, any other information relating to the Assets that is required
to be filed by the Adviser or the Trust with the SEC or sent to
shareholders under the 1940 Act (including the rules adopted thereunder) or
any exemptive or other relief that the Adviser or the Trust obtains from
the SEC, in each case with respect to the Trust, the Portfolio, or the
Assets. The Sub-Adviser agrees that all records that it maintains on behalf
of the Portfolio are property of the Portfolio and the Sub-Adviser will
surrender promptly to the Portfolio any of such records upon the
Portfolio's request; provided, however, that the Sub-Adviser may retain a
copy of such records. In addition, for the duration of this Agreement, the
Sub-Adviser shall preserve for the periods prescribed by Rule 31a-2 under
the 1940 Act any such records as are required to be maintained by it
pursuant to this Agreement, and shall transfer said records to any
successor Sub-Adviser upon the termination of his Agreement (or, if there
is no successor Sub-Adviser, to the Adviser); provided, however, that the
Sub-Adviser may retain a copy of such records.
-2-
<PAGE>
(e) The Sub-Adviser shall provide the Portfolio's custodian on each business
day with information relating to all transactions concerning the
Portfolio's Assets and shall provide the Adviser with such information upon
request of the Adviser.
(f) The Sub-Adviser and its partners and its and their respective partners,
stockholders, directors, officers, employees and agents act, may continue
to act and in the future may act as investment managers or investment
advisers to others and may invest for their own accounts, and nothing in
this Agreement shall in any way be construed or deemed to restrict the
right of any such person to perform investment management or investment
advisory services for others or to invest for its own account, and the
performance of such services for others and such investing shall not be
deemed to violate or give rise to any duty or obligation to the Trust, the
Portfolio or the Adviser, except as otherwise provided by law. The
Sub-Adviser agrees to act in a manner consistent with its fiduciary
obligation to deal fairly with all clients when taking investment actions.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to materially impair the Sub-Adviser's ability to
fulfill its commitment under this Agreement.
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held in the Portfolio. The Adviser shall instruct the custodian
and other parties providing services to the Portfolio to promptly forward
misdirected proxies to the Sub-Adviser.
(i) The Sub-Adviser will notify the Trust and the Adviser of any changes to the
membership of the Sub-Adviser within a reasonable time after such change.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners, officers
or employees, or the officers or employees of the Sub-Adviser's general
partner.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Portfolio pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's performance of its
duties under this Agreement; provided, however, that, in connection with
its management of the Assets, nothing herein shall be construed to relieve
the Sub-Adviser of responsibility for compliance with the applicable
provisions of the Trust's Declaration of Trust (as defined herein), the
applicable provisions of the Prospectus, the instructions and directions of
the Board of Trustees of the Trust (subject to the provisions of Section
l(b) hereunder), the applicable requirements of the 1940 Act, the
applicable requirements of Subchapter M of the Internal Revenue Code of
1986, and all other applicable federal and state laws and regulations, as
each is amended from time to time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of, and will furnish the
Sub-Adviser with copies properly certified or authenticated of amendments
and supplements to, each of the following documents:
-3-
<PAGE>
(a) The Trust's Agreement and Declaration of Trust, as filed with the Secretary
of State of the Commonwealth of Massachusetts (such Agreement and
Declaration of Trust, as in effect on the date of this Agreement and as
amended from time to time, herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Portfolio.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory tee at the rate specified in the Schedule(s) which
is attached hereto and made part of this Agreement. The fee will be
calculated based on the average monthly market value of the Assets under
the Sub-Adviser's management and will be paid to the Sub-Adviser monthly.
Except as may otherwise be prohibited by law or regulation (including any
then-current SEC staff interpretation), the Sub-Adviser may, in its
discretion and from time to time, waive a portion of its fee.
5. LIMITATION OF LIABILITY OF THE SUB-ADVISER. The duties of the Sub-Adviser
shall be confined to those expressly set forth herein, and no implied
duties are assumed by or may be asserted against the Sub-Adviser hereunder.
The Sub-Adviser shall not be liable for any error of judgment or mistake of
law or for any loss arising out of any investment or for any act or
omission in carrying out its duties hereunder, except a loss resulting from
willful misfeasance, bad faith or gross negligence on the Sub-Adviser's
part in the performance of its obligations or duties, or from reckless
disregard of its obligations or duties, under this Agreement, except as may
otherwise be provided under provisions of applicable state law to the
extent such provisions cannot be waived or modified hereby. The Adviser
hereby acknowledges that it considers the Sub-Adviser to be a "corporate
agent" of the Adviser within the meaning of the last sentence of Section 9
of the Investment Advisory Agreement between the Trust and the Adviser with
respect to the Portfolio.
6. REPORTS. During the term of this Agreement, the Adviser agrees to furnish
the Sub-Adviser at its principal office all Prospectuses, proxy statements,
reports to stockholders, sales literature or other materials prepared for
distribution to stockholders of the Portfolio, the Trust or the public that
refer to the Sub-Adviser, its services or its clients in any way prior to
use thereof and not to use such materials if the Sub-Adviser reasonably
objects in writing within five business days (or such other period as may
be mutually agreed) after receipt thereof. The Sub-Adviser s right to
object to such materials is limited to the portions of such materials that
expressly relate to the Sub-Adviser, its services or its clients. The
Adviser agrees to use its reasonable best efforts to ensure that materials
prepared by its employees or agents or its affiliates that refer to the
Sub-Adviser, its services or its clients in any way are consistent with
those materials previously approved by the Sub-Adviser as referenced in the
first sentence of this paragraph. Sales literature may be furnished to the
Sub-Adviser by first class or overnight mail, facsimile transmission
equipment or hand delivery.
-4-
<PAGE>
7. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or damages
(including reasonable attorney's fees and other related expenses) arising
from or in connection with the performance by the Sub Adviser of its
obligations or duties under this Agreement; provided, however, that (a) the
Sub-Adviser shall not be obligated to indemnify or hold harmless the
Adviser from or against any claim, loss, liability, or damage in respect of
which the Sub-Adviser is not liable pursuant to Section 5 hereof: and (b)
the Sub-Adviser's obligation under this Section 7 shall be reduced to the
extent that the claim against, or the loss, liability or damage experienced
by, the Adviser. is caused by or is otherwise directly related to the
Adviser's own willful misfeasance, bad faith or negligence, or to the
reckless disregard of its obligations or duties under this Agreement.
The Adviser shall indemnify and hold harmless the Sub-Adviser from and
against any and all claims, losses, liabilities or damages (including
reasonable attorney's fees and other related expenses) arising from or in
connection with the performance by the Adviser of its obligations or duties
under this Agreement; provided, however, that the Adviser's obligation
under this Section 7 shall be reduced to the extent that the claim against,
or the loss, liability or damage experienced by, the Sub-Adviser, is caused
by or is otherwise directly related to the Sub-Adviser's own willful
misfeasance, bad faith or negligence, or to the reckless disregard of its
obligations or duties under this Agreement.
8. DURATION AND TERMINATION. This Agreement shall become effective upon its
approval by the Trust's Board of Trustees and by the vote of a majority of
the outstanding voting securities of the Portfolio.
This Agreement shall continue in effect until terminated as provided below;
provided, however, that this Agreement shall continue in effect for a
period of more than two years from the date hereof only so long as such
continuance is specifically approved at least annually in conformance with
the Section 15(a)(2) of the 1940 Act. This Agreement may be terminated (a)
by the Portfolio at any time, on written notice to the Sub-Adviser, without
the payment of any penalty, by the Board of Trustees of the Trust or by the
vote of a majority of the outstanding voting securities of the Portfolio,
(b) by the Adviser at any time, without the payment of any penalty, on not
more than 60 days' nor less than 30 days' written notice to the
Sub-Adviser, or (c) by the Sub-Adviser at any time, without the payment of
any penalty, on not less than 90 days' written notice to the Adviser. This
Agreement shall terminate automatically and immediately in the event of its
assignment, or in the event of a termination of the Adviser's investment
advisory agreement with the Trust. As used in this Section 8, the terms
"assignment" and "vote of a majority of the outstanding voting securities"
shall have the respective meanings set forth in the 1940 Act and the rules
and regulations thereunder, subject to such exceptions as may be granted by
the SEC under the 1940 Act.
Upon the termination of this Agreement, the Sub-Adviser shall not be
obligated to take or recommend any action with respect to the Assets.
-5-
<PAGE>
9. GOVERNING LAW. This Agreement shall be governed by the internal laws of the
Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
10. SEVERABILITY. Should any part of this Agreement be held invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
11. NOTICE: Any notice, advice or report to be given pursuant to this Agreement
shall be deemed sufficient if delivered or mailed by registered, certified
or overnight mail, postage prepaid addressed by the party giving notice to
the other party at the last address furnished by the other party:
To the Adviser at: SEI Financial Management Corporation
680 East Swedesford Road
Wayne, PA 19087
Attention: Legal Department
To the Sub-Adviser at: Strategic Fixed Income, L.P.
1001 Nineteenth Street North
Suite 1720
Arlington, VA 22209
Attention: Vice President
-6-
<PAGE>
12. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between parties hereto, and supersedes all prior agreements
and understandings relating to this Agreement's subject matter. This
Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
A copy of the Declaration of Trust of the Trust is on file with the
Secretary of State of the Commonwealth of Massachusetts, and notice is hereby
given that the obligations of this instrument are not binding upon any of the
Trustees, officers or shareholders of the Portfolio or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
Commission, whether of special or general application, such provision shall be
deemed to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI Financial Management Corporation Strategic Fixed Income L.P.
By: Gobi Investment, Inc.
By: /s/ Kevin P. Robins By: /s/ Patricia M. Arcoleo
----------------------------- -------------------------
Name: Kevin P. Robins Name: Patricia M. Arcoleo
--------------------------- -----------------------
Title: SVP Title: Vice President
-------------------------- ----------------------
7
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI FINANCIAL MANAGEMENT CORPORATION
AND
STRATEGIC FIXED INCOME, L.P.
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows
International Fixed Income Portfolio %
8
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
AGREEMENT made this 14th day of June, 1996, between SEI Financial
Management Corporation, (the "Adviser") and Wall Street Associates (the
"Sub-Adviser").
WHEREAS, SEI Institutional Investments Trust, a Massachusetts business
trust (the "Trust") is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated June 14, 1996 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the Small Cap Portfolio
(the "Portfolio"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain
the Sub-Adviser to provide investment advisory services to the Adviser in
connection with the management of the Portfolio, and the Sub-Adviser is willing
to render such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Portfolio entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the Assets,
in accordance with the Portfolio's investment objectives, policies and
restrictions as stated in the Portfolio's prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, in consultation with and subject to the direction
of the Adviser, determine from time to time.
(b) In the performance of its duties and obligations under this Agreement, the
Sub-Adviser shall act in conformity with the Trust's Declaration of Trust
(as defined herein) and the Prospectus and with the instructions and
directions of the Adviser and of the Board of Trustees of the Trust and
will conform to and comply with the requirements of the 1940 Act, the
Internal Revenue Code of 1986, and all other applicable federal and state
laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by the
Portfolio as provided in subparagraph (a) and will place orders with or
through such persons, brokers or dealers to carry out the policy with
respect to brokerage set forth in the Portfolio's Registration Statement
(as defined herein) and Prospectus or as the Board of Trustees or the
Adviser may direct from time to time, in conformity with federal securities
laws. In executing Portfolio transactions and selecting brokers or dealers,
the Sub-Adviser will use its best efforts to seek on behalf of the
Portfolio the best overall terms available. In assessing the best overall
terms available for any transaction, the Sub-Adviser shall consider all
factors that it deems relevant, including the breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker or dealer, and the reasonableness of the
commission, if any, both for the specific transaction and on a continuing
basis. In evaluating the best overall terms available, and in selecting the
broker-dealer to execute a particular transaction, the Sub-Adviser may also
consider the brokerage and research services provided (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934).
<PAGE>
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act.
The Sub-Adviser shall provide to the Adviser or the Board of Trustees such
periodic and special reports, balance sheets or financial information, and
such other information with regard to its affairs as the Adviser or Board
of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and
shall timely furnish to the Adviser all information relating to the
Sub-Adviser's services under this Agreement needed by the Adviser to
keep the other books and records of the Portfolio required by Rule 31a-1
under the 1940 Act. The Sub-Adviser shall also furnish to the Adviser
any other information relating to the Assets that is required to be
filed by the Adviser or the Trust with the Securities and Exchange
Commission ("SEC") or sent to shareholders under the 1940 Act (including
the rules adopted thereunder) or any exemptive or other relief that the
Adviser or the Trust obtains from the SEC. The Sub-Adviser agrees that
all records that it maintains on behalf of the Portfolio are property of
the Portfolio and the Sub-Adviser will surrender promptly to the
Portfolio any of such records upon the Portfolio's request; provided,
however, that the Sub-Adviser may retain a copy of such records. In
addition, for the duration of this Agreement, the Sub-Adviser shall
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act any
such records as are required to be maintained by it pursuant to this
Agreement, and shall transfer said records to any successor Sub-Adviser
upon the termination of his Agreement (or, if there is no successor
Sub-Adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Portfolio's custodian on each business
day with information relating to all transactions concerning the
Portfolio's Assets and shall provide the Adviser with such information
upon request of the Adviser.
(f) The investment management services provided by the Sub-Adviser under this
Agreement are not to be deemed exclusive and the Sub-Adviser shall be free
to render similar services to others, as long as such services do not
impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill its
commitment under this Agreement.
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held in the Portfolio. The Adviser shall instruct the custodian
and other parties providing services to the Portfolio to promptly forward
misdirected proxies to the Sub-Adviser.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners, officers
or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Portfolio pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's performance of its
duties under this Agreement; provided, however, that in connection with its
management of the Assets, nothing herein shall be construed to relieve the
Sub-Adviser of responsibility for compliance with the Trust's Declaration
of Trust (as defined herein), the Prospectus, the instructions and
directions of the Board of Trustees of the Trust, the requirements of the
1940 Act, the Internal Revenue Code of 1986, and all other applicable
federal and state laws and regulations, as each is amended from time to
time.
- 2 -
<PAGE>
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the Secretary
of State of the Commonwealth of Massachusetts (such Agreement and
Deciaration of Trust, as in effect on the date of this Agreement and as
amended from time to time, herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Portfolio.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s) which
is attached hereto and made part of this Agreement. The fee will be
calculated based on the average monthly market value of the Assets under
the Sub-Adviser's management and will be paid to the Sub-Adviser monthly.
Except as may otherwise be prohibited by law or regulation (including any
then current SEC staff), the Sub-Adviser may, in its discretion and from
time to time, waive a portion of its fee.
5. LIMITATION OF LIABILITY OF THE SUB-ADVISER. The Sub-Adviser shall not be
liable for any error of judgment or for any loss suffered by the Adviser in
connection with the performance of its obligations under this Agreement,
except a loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services (in which case any award of damages
shall be limited to the period and the amount set forth in Section 36(b)(3)
of the 1940 Act), or a loss resulting from willful misfeasance, bad faith
or negligence on the Sub-Adviser's part in the performance of its duties or
from reckless disregard of its obligations and duties under this Agreement,
except as may otherwise be provided under provisions of applicable state
law which cannot be waived or modified hereby.
6. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or damages
(including reasonable attorney's fees and other related expenses) howsoever
arising from or in connection with the performance of the Sub-Adviser's
obligations under this Agreement; the actions of the Sub-Adviser under this
Agreement by the Sub-Adviser of its duties hereunder; provided, however,
that the Sub-Adviser's obligation under this Section 6 shall be reduced to
the extent that the claim against, or the loss, liability or damage
experienced by the Adviser, is caused by or is otherwise directly related
to the Adviser's own willful misfeasance, bad faith or negligence, or to
the reckless disregard of its duties under this Agreement.
7. DURATION AND TERMINATION. This Agreement shall become effective upon its
approval by the Trust's Board of Trustees and by the vote of a majority of
the outstanding voting securities of the Portfolio.
This Agreement shall continue in effect for a period of more than two years
from the date hereof only so long as continuance is specifically approved
at least annually in conformance with the 1940 Act; provided, however, that
this Agreement may be terminated with respect to the Portfolio (a) by the
Portfolio at any time, without the payment of any penalty, by the vote of a
majority
-3-
<PAGE>
of Trustees of the Trust or by the vote of a majority of the outstanding
voting securities of the Portfolio, (b) by the Adviser at any time, without
the payment of any penalty, on not more than 60 days' nor less than 30
days' written notice to the Sub-Adviser, or (c) by the Sub-Adviser at any
time, without the payment of any penalty, on 90 days' written notice to the
Adviser. This Agreement shall terminate automatically and immediately in
the event of its assignment, or in the event of a termination of the
Adviser's agreement with the Trust. As used in this Section 7, the terms
"assignment" and "vote of a majority of the outstanding voting securities"
shall have the respective meanings set forth in the 1940 Act and the rules
and regulations thereunder, subject to such exceptions as may be granted by
the Commission under the 1940 Act.
8. GOVERNING LAW. This Agreement shall be governed by the internal laws of the
Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
9. SEVERABILITY. Should any part of this Agreement be held invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
10. NOTICE: Any notice, advice or report to be given pursuant to this Agreement
shall be deemed sufficient if delivered or mailed by registered, certified
or overnight mail, postage prepaid addressed by the party giving notice to
the other party at the last address furnished by the other party:
To the Adviser at: SEI Financial Management Corporation
680 East Swedesford Road
Wayne, PA 19087
Attention: Legal Department
To the Sub-Adviser at: Wall Street Associates
1200 Prospect Street
Suite 100
La Jolla, CA 92037
Attention: President
11. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject matter.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
A copy of the Declaration of Trust of the Trust is on file with the
Secretary of State of the Commonwealth of Massachusetts, and notice is hereby
given that the obligations of this instrument are not binding upon any of the
Trustees, officers or shareholders of the Portfolio or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
Commission, whether of special or general application, such provision shall be
deemed to incorporate the effect of such rule, regulation or order.
-4-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI Financial Management Corporation Wall Street Associates
By: /s/ Kevin P. Robins By: /s/ William Jeffery III
--------------------------------- --------------------------------
Name: Kevin P. Robins Name: William Jeffery III
------------------------------- ------------------------------
Title: SVP Title: Pres.
------------------------------ -----------------------------
-5-
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT DATED JUNE 14, 1996
BETWEEN
SEI FINANCIAL MANAGEMENT CORPORATION
AND
WALL STREET ASSOCIATES
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
Small Cap Portfolio %
-6-
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL lNVESTMENTS TRUST
AGREEMENT made this 14th day of June 1996, between SEI Financial Management
Corporation, (the "Adviser") and Western Asset Management Company (the
"Sub-Adviser")
WHEREAS, SEI Institutional Investments Trust, a Massachusetts business
trust (the "Trust") is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated June 14, 1996 (the "Advisory Agreement") with the Trust, pursuant to which
the Adviser will act as investment adviser to the Core Fixed Income Portfolio
(the "Portfolio"), which is a series of the Trust; and
WHEREAS the Adviser, with the approval of the Trust, desires to retain the
Sub-Adviser to provide investment advisory services to the Adviser in connection
with the management of the Portfolio, and the Sub-Adviser is willing to render
such investment advisory services.
NOW, THEREFORE. the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Portfolio entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the Assets,
in accordance with the Portfolio's investment objectives, policies and
restrictions as stated in the Portfolio's prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, subject to the Prospectus and any written
instruction or direction of the Adviser, determine from time to time what
Assets will be purchased, retained or sold by the Portfolio, and what
portion of the Assets will be invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement, the
Sub-Adviser shall act in conformity with the Trust's Declaration of Trust
(as defined herein) and the Prospectus and with the instructions and
directions of the Adviser and of the Board of Trustees of the Trust and
will conform to and comply with the requirements of the 1940 Act, the
Internal Revenue Code of 1986, and all other applicable federal and state
laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by the
Portfolio as provided in subparagraph (a) and will place orders with or
through such persons, brokers or dealers to carry out the policy with
respect to brokerage set forth in the Portfolio's Registration Statement
(as defined herein) and Prospectus or as the Board of Trustees or the
Adviser may direct from time to time, in conformity with federal securities
laws. In executing Portfolio transactions and selecting brokers or dealers,
the Sub-Adviser will use its best efforts to seek on behalf of the
Portfolio the best overall terms available. In assessing the best overall
terms available for any transaction, the Sub-Adviser shall consider all
factors that it deems relevant, including the breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker or dealer, and the reasonableness of the
commission, if any, both for the specific transaction and on a continuing
basis. In evaluating the best overall terms available, and in selecting the
broker-dealer to execute a particular transaction, the Sub-Adviser may also
consider the brokerage and research services provided (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934).
Consistent with any guidelines established by the Board of Trustees of the
Trust, the Sub-Adviser is authorized to pay to a broker or dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction for the
<PAGE>
Portfolio which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if, but only if,
the Sub-Adviser determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer - - viewed in terms of that particular
transaction or terms of the overall responsibilities of the Sub-Adviser to
the Portfolio. In addition, the Sub-Adviser if authorized to allocate
purchase and sale orders for securities to brokers or dealers (including
brokers and dealers that are affiliated with the Adviser, Sub-Adviser or
the Trust's principal underwriter) to take into account the sale of shares
of the Trust if the Sub-Adviser believes that the quality of the
transaction and the commission are comparable to what they would be with
other qualified firms. In no instance, however, will the Portfolio's Assets
be purchased from or sold to the Adviser, Sub-Adviser, the Trust's
principal underwriter, or any affiliated person of either the Trust,
Adviser, the Sub-Adviser or the principal underwriter, acting as principal
in the transaction, except to the extent permitted by the Securities and
Exchange Commission ("SEC") and the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940
Act. The Sub-Adviser shall provide to the Adviser or the Board of Trustees
such periodic and special reports, balance sheets or financial information,
and such other information with regard to its affairs as the Adviser or
Board of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and shall
timely furnish to the Adviser all information relating to the Sub-Adviser's
services under this Agreement needed by the Adviser to keep the other books
and records of the Portfolio required by Rule 31a-1 under the 1940 Act. The
Sub-Adviser shall also furnish to the Adviser any other information
relating to the Assets that is required to be filed by the Adviser or the
Trust with the SEC or sent to shareholders under the 1940 Act (including
the rules adopted thereunder) or any exemptive or other relief that the
Adviser or the Trust obtains from the SEC. The Sub-Adviser agrees that all
records that it maintains on behalf of the Portfolio are property of the
Portfolio and the Sub-Adviser will surrender promptly to the Portfolio any
of such records upon the Portfolio's request; provided however, that the
Sub-Adviser may retain a copy of such records. In addition, for the
duration of this Agreement, the Sub-Adviser shall preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records as are
required to be maintained by it pursuant to this Agreement, and shall
transfer said records to any successor sub-adviser upon the termination of
this Agreement (or, if there is no successor sub-adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Portfolio's custodian on each business
day with information relating to all transactions concerning the
Portfolio's Assets and shall provide the Adviser with such information upon
request of the Adviser.
(f) The investment management services provided by the Sub-Adviser under this
Agreement are not to be deemed exclusive and the Sub-Adviser shall be free
to render similar services to others, as long as such services do not
impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill its
commitment under this Agreement.
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held in the Portfolio. The Adviser shall instruct the custodian
and other parties providing services to the Portfolio to promptly forward
misdirected proxies to the Sub-Adviser.
2
<PAGE>
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of and of the Sub-Adviser's partners, officers
or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Portfolio pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's performance of its
duties under this Agreement; provided, however, that in connection with its
management of the Assets, nothing herein shall be construed to relieve the
Sub-Adviser of responsibility for compliance with the Trust's Declaration
of Trust (as detained herein), the Prospectus, the instructions and
directions of the Board of Trustees of the Trust, the requirements of the
1940 Act, the Internal Revenue Code of 1986 and all other applicable
federal and state laws and regulations, as each is amended from time to
time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with copies
properly certified or authenticated of each of the following documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the Secretary
of State of the Commonwealth of Massachusetts (such Agreement and
Declaration of Trust, as in effect on the date of this Agreement and as
amended from time to time, herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Portfolio.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s) which
is attached hereto and made part of this Agreement. The fee will be
calculated based on the average monthly market value of the Assets under
the Sub-Adviser's management and will be paid to the Sub-Adviser monthly
Except as may otherwise be prohibited by law or regulation (including any
then current SEC staff interpretation), the Sub-Adviser may, in its
discretion and from time to time, waive a portion of its fee.
5. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or damages
(including reasonable attorney's fees and other related expenses) howsoever
arising from or in connection with the performance of the Sub-Adviser's
obligations under this Agreement; provided, however, that the Sub-Adviser's
obligation under this Section 5 shall be reduced to the extent that the
claim against, or the loss, liability or damage experienced by the Adviser,
is caused by or is otherwise directly related to the Adviser's own willful
misfeasance, bad faith or negligence, or to the reckless disregard of its
duties under this Agreement.
The Adviser shall indemnify and hold harmless the Sub-Adviser from and
against any and all claims, losses, liabilities or damages (including
reasonable attorney's fees and other related expenses) howsoever arising
from or in connection with the performance of the Adviser's obligations
under this Agreement; provided, however, that the Adviser's obligation
under this Section 5 shall be reduced to the extent that the claim against,
or the loss, liability or damage experienced by the Sub-Adviser, is caused
by or is otherwise directly related to the Sub-Adviser's own willful
misfeasance, bad faith or negligence, or to the reckless disregard of its
duties under this Agreement.
6. LIMITATION OF LIABILITY OF THE SUB-ADVISER. The Sub-Adviser shall not be
liable for any error of
3
<PAGE>
judgment or for any loss suffered by the Adviser in connection with performance
of its obligations under this Agreement, except a loss resulting from a breach
of fiduciary duty with respect to the receipt of compensation for services (in
which case any award of damages shall be limited to the period and the amount
set forth in Section 36(b)(3) of the 1940 Act), or a loss resulting from willful
misfeasance, bad faith or negligence on the Sub-Adviser's part in the
performance of its duties or from reckless disregard of its obligations and
duties under this Agreement, except as may otherwise be provided under
provisions of applicable state law which cannot be waived or modified hereby.
7. DURATION AND TERMINATION. This Agreement shall become effective upon its
approval by the Trust's Board of Trustees and by the vote of a majority of
the outstanding voting securities of the Portfolio. This Agreement shall
continue in effect for a period of more than two years from the date hereof
only so long as continuance is specifically approved at least annually in
conformance with the 1940 Act; provided, however, that this Agreement may
be terminated with respect to the Portfolio (a) by the Portfolio at any
time, without the payment of any penalty, by the vote of a majority of
Trustees of the Trust or by the vote of a majority of the outstanding
voting securities of the Portfolio, (b) by the Adviser at any time, without
the payment of any penalty, on not more than 60 days' nor less than 30
days' written notice to the Sub-Adviser, or (c) by the Sub-Adviser at any
time, without the payment of any penalty, on 90 days' written notice to the
Adviser. This Agreement shall terminate automatically and immediately in
the event of its assignment, or in the event of a termination of the
Adviser's agreement with the Trust. As used in this Section 7, the terms
"assignment" and "vote of a majority of the outstanding voting securities"
shall have the respective meanings set forth in the 1940 Act and the rules
and regulations thereunder, subject to such exceptions as may be granted by
the SEC under the 1940 Act.
8. GOVERNING LAW. This Agreement shall be governed by the internal laws of the
Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
9. SEVERABILITY. Should any part of this Agreement be held invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
10. NOTICE: Any notice, advice or report to be given pursuant to this Agreement
shall be deemed sufficient if delivered or mailed by registered, certified
or overnight mail, postage prepaid addressed by the party giving notice to
the other party at the last address furnished by the other party:
To the Adviser at: SEI Financial Management Corporation
680 East Swedesford Road
Wayne, PA 19087
Attention: Legal Department
To the Sub-Adviser at: Western Asset Management Company
117 East Colorado Boulevard
Pasadena, California 91105
Attention: Ilene S. Harker, Director
11. ENTIRE AGREEMENT. This agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject matter.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
4
<PAGE>
A copy of the Declaration of Trust is on file with Secretary of State of
the Commonwealth of Massachusetts, and notice is hereby given that the
obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of the Portfolio or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI Financial Management Corporation Western Asset Management Company
By: By:
/s/ Kevin Robins /s/ Ilene S. Harker
--------------------------------- -----------------------------
Name: Kevin Robins Name: Ilene S. Harker
------------------------------ --------------------------
Title: SVP Title: Director
5
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI FINANCIAL MANAGEMENT CORPORATION
AND
WESTERN ASSET MANAGEMENT COMPANY
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
Core Fixed Income Portfolio %
6
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
AGREEMENT made this 14th day of June, 1996, between SEI Financial
Management Corporation, (the "Adviser") and First of America Investment
Corporation (the "Sub-Adviser").
WHEREAS, SEI Institutional Investments Trust, a Massachusetts business
trust (the "Trust") is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated December 16, 1994 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the Small Cap Growth
Portfolio (the "Portfolio"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain the
Sub-Adviser to provide investment advisory services to the Adviser in connection
with the management of the Portfolio, and the Sub-Adviser is willing to render
such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Portfolio entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the Assets,
in accordance with the Portfolio's investment objectives, policies and
restrictions as stated in the Portfolio's prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, in consultation with and subject to the direction of
the Adviser, determine from time to time what Assets will be purchased,
retained or sold by the Portfolio, and what portion of the Assets will be
invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement, the
Sub-Adviser shall act in conformity with the Trust's Declaration of Trust
(as defined herein) and the Prospectus and with the instructions and
directions of the Adviser and of the Board of Trustees of the Trust and
will conform to and comply with the requirements of the 1940 Act, the
Internal Revenue Code of 1986, and all other applicable federal and state
laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by the
Portfolio as provided in subparagraph (a) and will place orders with or
through such persons, brokers or dealers to carry out the policy with
respect to brokerage set forth in the Portfolio's Registration Statement
(as defined herein) and Prospectus or as the Board of Trustees or the
Adviser may direct from time to time, in conformity with federal securities
laws. In executing Portfolio transactions and selecting brokers or
dealers, the Sub-Adviser will use its best efforts to seek on behalf of the
Portfolio the best overall terms available. In assessing the best overall
terms available for any transaction, the Sub-Adviser shall consider all
factors that it deems relevant, including the breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker
<PAGE>
or dealer, and the reasonableness of the commission, if any, both for the
specific transaction and on a continuing basis. In evaluating the best
overall terms available, and in selecting the broker-dealer to execute a
particular transaction, the Sub-Adviser may also consider the brokerage and
research services provided (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934). Consistent with any guidelines
established by the Board of Trustees of the Trust, the Sub-Adviser is
authorized to pay to a broker or dealer who provides such brokerage and
research services a commission for executing a portfolio transaction for
the Portfolio which is in excess of the amount of commission another broker
or dealer would have charged for effecting that transaction if, but only
if, the Sub-Adviser determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer - - viewed in terms of that particular
transaction or terms of the overall responsibilities of the Sub-Adviser to
the Portfolio. In addition, the Sub-Adviser is authorized to allocate
purchase and sale orders for securities to brokers or dealers (including
brokers and dealers that are affiliated with the Adviser, Sub-Adviser or
the Trust's principal underwriter) to take into account the sale of shares
of the Trust if the Sub-Adviser believes that the quality of the
transaction and the commission are comparable to what they would be with
other qualified firms. In no instance, however, will the Portfolio's
Assets be purchased from or sold to the Adviser, Sub-Adviser, the Trust's
principal underwriter, or any affiliated person of either the Trust,
Adviser, the Sub-Adviser or the principal underwriter, acting as principal
in the transaction, except to the extent permitted by the Securities and
Exchange Commission ("SEC") and the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act.
The Sub-Adviser shall provide to the Adviser or the Board of Trustees such
periodic and special reports, balance sheets or financial information, and
such other information with regard to its affairs as the Adviser or Board
of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and shall
timely furnish to the Adviser all information relating to the Sub-Adviser's
services under this Agreement needed by the Adviser to keep the other books
and records of the Portfolio required by Rule 31a-1 under the 1940 Act.
The Sub-Adviser shall also furnish to the Adviser any other information
relating to the Assets that is required to be filed by the Adviser or the
Trust with the SEC or sent to shareholders under the 1940 Act (including
the rules adopted thereunder) or any exemptive or other relief that the
Adviser or the Trust obtains from the SEC. The Sub-Adviser agrees that all
records that it maintains on behalf of the Portfolio are property of the
Portfolio and the Sub-Adviser will surrender promptly to the Portfolio any
of such records upon the Portfolio's request; provided, however, that the
Sub-Adviser may retain a copy of such records. In addition, for the
duration of this Agreement, the Sub-Adviser shall preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records as are
required to be maintained by it pursuant to this Agreement, and shall
transfer said records to any successor sub-adviser upon the termination of
this Agreement (or, if there is no successor sub-adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Portfolio's custodian on each business
day with information relating to all transactions concerning the
Portfolio's Assets and shall provide the Adviser with such information upon
request of the Adviser.
(f) The investment management services provided by the Sub-Adviser under this
Agreement are not to be deemed exclusive and the Sub-Adviser shall be free
to render similar services to others, as long as such services do not
impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill its
commitment under this Agreement.
2
<PAGE>
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the Assets.
The Adviser shall instruct the custodian and other parties providing
services to the Portfolio to promptly forward misdirected proxies to the
Sub-Adviser.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners, officers
or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Portfolio pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's performance of its
duties under this Agreement; provided, however, that in connection with its
management of the Assets, nothing herein shall be construed to relieve the
Sub-Adviser of responsibility for compliance with the Trust's Declaration
of Trust (as defined herein), the Prospectus, the instructions and
directions of the Board of Trustees of the Trust, the requirements of the
1940 Act, the Internal Revenue Code of 1986, and all other applicable
federal and state laws and regulations, as each is amended from time to
time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the Secretary
of State of the Commonwealth of Massachusetts (such Agreement and
Declaration of Trust, as in effect on the date of this Agreement and as
amended from time to time, herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Portfolio.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s) which
is attached hereto and made part of this Agreement. The fee will be
calculated based on the average monthly market value of the Assets under
the Sub-Adviser's management and will be paid to the Sub-Adviser monthly.
Except as may otherwise be prohibited by law or regulation (including any
then current SEC staff interpretation), the Sub-Adviser may, in its
discretion and from time to time, waive a portion of its fee.
5. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or damages
(including reasonable attorney's fees and other related expenses) howsoever
arising from or in connection with the performance of the Sub-Adviser's
obligations under this Agreement; provided, however, that the Sub-Adviser's
obligation under this Section 5 shall be reduced to the extent that the
claim against, or the loss, liability or damage experienced by the Adviser,
is caused by or is otherwise directly related to the Adviser's own, or any
other sub-adviser's, willful misfeasance, bad faith or negligence, or to
the reckless disregard of its duties under this Agreement.
6. DURATION AND TERMINATION. This Agreement shall become effective upon its
approval by the Trust's Board of Trustees and by the vote of a majority of
the outstanding voting securities of the Portfolio. This Agreement shall
continue in effect for a period of more than two years from the date hereof
only so long as continuance is specifically approved at least annually in
conformance with the 1940 Act; provided, however, that this Agreement may
be terminated with respect to the Portfolio (a) by the Portfolio at any
time, without the payment of any penalty, by the vote of a majority of
Trustees of the Trust or by the vote of a majority of the outstanding
voting securities of the Portfolio, (b) by the Adviser at any time, without
3
<PAGE>
the payment of any penalty, on not more than 60 days' nor less than 30
days' written notice to the Sub-Adviser, or (c) by the Sub-Adviser at any
time, without the payment of any penalty, on 90 days' written notice to the
Adviser. This Agreement shall terminate automatically and immediately in
the event of its assignment, or in the event of a termination of the
Adviser's agreement with the Trust. As used in this Section 6, the terms
"assignment" and "vote of a majority of the outstanding voting securities"
shall have the respective meanings set forth in the 1940 Act and the rules
and regulations thereunder, subject to such exceptions as may be granted by
the SEC under the 1940 Act.
7. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
8. SEVERABILITY. Should any part of this Agreement be held invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
9. NOTICE. Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by registered,
certified or overnight mail, postage prepaid addressed by the party giving
notice to the other party at the last address furnished by the other party:
To the Adviser at: SEI Financial Management Corporation
680 East Swedesford Road
Wayne, PA 19087
Attention: Legal Department
To the Sub-Adviser at: First of America Investment Corporation
303 N. Rose Street
Suite 500
Kalamazoo, Michigan 49007
10. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject matter.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
A copy of the Declaration of Trust is on file with the Secretary of State
of the Commonwealth of Massachusetts, and notice is hereby given that the
obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of the Portfolio or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
4
<PAGE>
SEI Financial Management Corporation First of America Investment Corporation
By: By:
/s/ Kevin P. Robins /s/ L. Edward Knox
--------------------- ---------------------
Name: Name:
Kevin P. Robins L. Edward Knox
--------------------- ---------------------
Title: Title:
Senior Vice President Vice President
--------------------- ---------------------
5
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI FINANCIAL MANAGEMENT CORPORATION
AND
FIRST OF AMERICA INVESTMENT CORPORATION
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
Small Cap Growth Portfolio . %
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
AGREEMENT made this 14th day of June, 1996, between SEI Financial
Management Corporation, (the "Adviser") and Farrell Wako Global Investment
Management, Inc. (the "Sub-Adviser").
WHEREAS, SEI Institutional Investments Trust, a Massachusetts business
trust (the "Trust") is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated June 14, 1996 (the "Advisory Agreement") with the Trust, pursuant to which
the Adviser will act as investment adviser to the International Equity Portfolio
(the "Portfolio"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain the
Sub-Adviser to provide investment advisory services to the Adviser in connection
with the management of the Portfolio, and the Sub-Adviser is willing to render
such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Portfolio entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the Assets,
in accordance with the Portfolio's investment objectives, policies and
restrictions as stated in the Portfolio's prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, in consultation with and subject to the direction of
the Adviser, determine from time to time what Assets will be purchased,
retained or sold by the Portfolio, and what portion of the Assets will be
invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement, the
Sub-Adviser shall act in conformity with the Trust's Declaration of Trust
(as defined herein) and the Prospectus and with the instructions and
directions of the Adviser and of the Board of Trustees of the Trust and
will conform to and comply with the requirements of the 1940 Act, the
Internal Revenue Code of 1986, and all other applicable federal and state
laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by the
Portfolio as provided in subparagraph (a) and will place orders with or
through such persons, brokers or dealers to carry out the policy with
respect to brokerage set forth in the Portfolio's Registration Statement
(as defined herein) and Prospectus or as the Board of Trustees or the
Adviser may direct from time to time, in conformity with federal securities
laws. In executing Portfolio transactions and selecting brokers or
dealers, the Sub-Adviser will use its best efforts to seek on behalf of the
Portfolio the best overall terms available. In assessing the best overall
terms available for any transaction, the Sub-Adviser shall consider all
factors that it deems relevant, including the breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker or dealer, and the reasonableness of the
commission, if any, both for the specific transaction and on a continuing
basis. In evaluating the best overall terms available, and in selecting
the broker-dealer to execute a particular transaction, the Sub-Adviser may
also consider the brokerage and research services provided (as those terms
are defined in Section 28(e) of the Securities Exchange Act of 1934).
Consistent with any guidelines established by the Board of Trustees of the
Trust, the Sub-Adviser is authorized to pay to a broker or dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction for the
<PAGE>
Portfolio which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if, but only if,
the Sub-Adviser determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer - - viewed in terms of that particular
transaction or terms of the overall responsibilities of the Sub-Adviser to
the Portfolio. In addition, the Sub-Adviser is authorized to allocate
purchase and sale orders for securities to brokers or dealers (including
brokers and dealers that are affiliated with the Adviser, Sub-Adviser or
the Trust's principal underwriter) to take into account the sale of shares
of the Trust if the Sub-Adviser believes that the quality of the
transaction and the commission are comparable to what they would be with
other qualified firms. In no instance, however, will the Portfolio's
Assets be purchased from or sold to the Adviser, Sub-Adviser, the Trust's
principal underwriter, or any affiliated person of either the Trust,
Adviser, the Sub-Adviser or the principal underwriter, acting as principal
in the transaction, except to the extent permitted by the Securities and
Exchange Commission ("SEC") and the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act.
The Sub-Adviser shall provide to the Adviser or the Board of Trustees such
periodic and special reports, balance sheets or financial information, and
such other information with regard to its affairs as the Adviser or Board
of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and shall
timely furnish to the Adviser all information relating to the Sub-Adviser's
services under this Agreement needed by the Adviser to keep the other books
and records of the Portfolio required by Rule 31a-1 under the 1940 Act.
The Sub-Adviser shall also furnish to the Adviser any other information
relating to the Assets that is required to be filed by the Adviser or the
Trust with the SEC" or sent to shareholders under the 1940 Act (including
the rules adopted thereunder) or any exemptive or other relief that the
Adviser or the Trust obtains from the SEC. The Sub-Adviser agrees that all
records that it maintains on behalf of the Portfolio are property of the
Portfolio and the Sub-Adviser will surrender promptly to the Portfolio any
of such records upon the Portfolio's request; provided, however, that the
Sub-Adviser may retain a copy of such records. In addition, for the
duration of this Agreement, the Sub-Adviser shall preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records as are
required to be maintained by it pursuant to this Agreement, and shall
transfer said records to any successor sub-adviser upon the termination of
this Agreement (or, if there is no successor sub-adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Portfolio's custodian on each business
day with information relating to all transactions concerning the
Portfolio's Assets and shall provide the Adviser with such information upon
request of the Adviser.
(f) The investment management services provided by the Sub-Adviser under this
Agreement are not to be deemed exclusive and the Sub-Adviser shall be free
to render similar services to others, as long as such services do not
impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill its
commitment under this Agreement.
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held in the Portfolio. The Adviser shall instruct the custodian
and other parties providing services to the Portfolio to promptly forward
misdirected proxies to the Sub-Adviser.
2
<PAGE>
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners, officers
or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Portfolio pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's performance of its
duties under this Agreement; provided, however, that in connection with its
management of the Assets, nothing herein shall be construed to relieve the
Sub-Adviser of responsibility for compliance with the Trust's Declaration
of Trust (as defined herein), the Prospectus, the instructions and
directions of the Board of Trustees of the Trust, the requirements of the
1940 Act, the Internal Revenue Code of 1986, and all other applicable
federal and state laws and regulations, as each is amended from time to
time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the Secretary
of State of the Commonwealth of Massachusetts (such Agreement and
Declaration of Trust, as in effect on the date of this Agreement and as
amended from time to time, herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Portfolio.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s) which
is attached hereto and made part of this Agreement. The fee will be
calculated based on the average monthly market value of the Assets under
the Sub-Adviser s management and will be paid to the Sub-Adviser monthly.
Except as may otherwise be prohibited by law or regulation (including any
then current SEC staff interpretation), the Sub-Adviser may, in its
discretion and from time to time, waive a portion of its fee.
5. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or damages
(including reasonable attorney's fees and other related expenses) howsoever
arising from or in connection with the performance of the Sub-Adviser s
obligations under this Agreement; provided, however, that the Sub-Adviser s
obligation under this Section 5 shall be reduced to the extent that the
claim against, or the loss, liability or damage experienced by the Adviser,
is caused by or is otherwise directly related to the Adviser's own willful
misfeasance, bad faith or negligence, or to the reckless disregard of its
duties under this Agreement.
6. DURATION AND TERMINATION. This Agreement shall become effective upon its
approval by the Trust's Board of Trustees and by the vote of a majority of
the outstanding voting securities of the Portfolio. This Agreement shall
continue in effect for a period of more than two years from the date hereof
only so long as continuance is specifically approved at least annually in
conformance with the 1940 Act; provided, however, that this Agreement may
be terminated with respect to the Portfolio (a) by the Portfolio at any
time, without the payment of any penalty, by the vote of a majority of
Trustees of the Trust or by the vote of a majority of the outstanding
voting securities of the Portfolio, (b) by the Adviser at any time, without
the payment of any penalty, on not more than 60 days' nor less than 30
days' written notice to the Sub-Adviser, or (c) by the Sub-Adviser at any
time, without the payment of any penalty, on 90 days' written
3
<PAGE>
notice to the Adviser. This Agreement shall terminate automatically and
immediately in the event of its assignment, or in the event of a
termination of the Adviser's agreement with the Trust. As used in this
Section 6, the terms "assignment" and "vote of a majority of the
outstanding voting securities" shall have the respective meanings set forth
in the 1940 Act and the rules and regulations thereunder, subject to such
exceptions as may be granted by the SEC under the 1940 Act.
7. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
8. SEVERABILITY. Should any part of this Agreement be held invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
9. NOTICE: Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by registered,
certified or overnight mail, postage prepaid addressed by the party giving
notice to the other party at the last address furnished by the other party:
To the Adviser at: SEI Financial Management Corporation
680 East Swedesford Road
Wayne, PA 19087
Attention: Legal Department
To the Sub-Adviser at: Farrell Wako Global Investment
Management, Inc.
780 Third Avenue
38th Floor
New York, NY 10017
10. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject matter.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
A copy of the Declaration of Trust is on file with the Secretary of State
of the Commonwealth of Massachusetts, and notice is hereby given that the
obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of the Portfolio or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their officers designated below as of the day and year first written above.
SEI Financial Management Corporation Farrell Wako Global Investment
Management, Inc.
By: By:
/s/ Kevin P. Robins /s/ James L. Farrell
------------------- -------------------
Name: Name:
KEVIN P. ROBINS JAMES L. FARRELL
Title: Title:
SENIOR VICE PRESIDENT CHAIRMAN
5
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI FINANCIAL MANAGEMENT CORPORATION
AND
FARRELL WAKO GLOBAL INVESTMENT MANAGEMENT, INC.
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
International Equity Portfolio . %
6
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
AGREEMENT made this 14th day of June, 1996, between SEI Financial
Management Corporation, (the "Adviser") and Seligman Henderson Co. (the
"Sub-Adviser").
WHEREAS, SEI Institutional Investments Trust, a Massachusetts business
trust (the "Trust") is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated June 14, 1996 (the "Advisory Agreement") with the Trust, pursuant to which
the Adviser will act as investment adviser to the International Equity Portfolio
(the "Portfolio"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain the
Sub-Adviser to provide investment advisory services to the Adviser in connection
with the management of the Portfolio, and the Sub-Adviser is willing to render
such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Portfolio entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the Assets,
in accordance with the Portfolio's investment objectives, policies and
restrictions as stated in the Portfolio's prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, in consultation with and subject to the direction of
the Adviser, determine from time to time what Assets will be purchased,
retained or sold by the Portfolio, and what portion of the Assets will be
invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement, the
Sub-Adviser shall act in conformity with the Trust's Declaration of Trust
(as defined herein) and the Prospectus and with the instructions and
directions of the Adviser and of the Board of Trustees of the Trust and
will conform to and comply with the requirements of the 1940 Act, the
Internal Revenue Code of 1986, and all other applicable federal and state
laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by the
Portfolio as provided in subparagraph (a) and will place orders with or
through such persons, brokers or dealers to carry out the policy with
respect to brokerage set forth in the Portfolio's Registration Statement
(as defined herein) and Prospectus or as the Board of Trustees or the
Adviser may direct from time to time, in conformity with federal securities
laws. In executing Portfolio transactions and selecting brokers or
dealers, the Sub-Adviser will use its best efforts to seek on behalf of the
Portfolio the best execution. In assessing the best execution availability
for each transaction, the Sub-Adviser shall consider all factors that it
deems relevant, including the breadth of the market in the security, the
price of the security, the financial condition and execution and
operational capability of the broker or dealer, and the reasonableness of
the commission, if any, both for the specific transaction and on a
continuing basis. In evaluating the best execution, and in selecting
<PAGE>
the broker-dealer to execute a particular transaction, the Sub-Adviser may
also consider the brokerage and research services provided (as those terms
are defined in Section 28(e) of the Securities Exchange Act of 1934).
Consistent with any guidelines established by the Board of Trustees of the
Trust, the Sub-Adviser is authorized to pay to a broker or dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if, but only if, the Sub-Adviser determines in good faith that
such commission was reasonable in relation to the value of the brokerage
and research services provided by such broker or dealer - - viewed in terms
of that particular transaction or terms of the overall responsibilities of
the Sub-Adviser to the Portfolio and its other clients. In addition, the
Sub-Adviser is authorized to allocate purchase and sale orders for
securities to brokers or dealers (including brokers and dealers that are
affiliated with the Adviser, Sub-Adviser or the Trust's principal
underwriter) to take into account the sale of shares of the Trust if the
Sub-Adviser believes that the quality of the transaction and the commission
are comparable to what they would be with other qualified firms. In no
instance, however, will the Portfolio's Assets be purchased from or sold to
the Adviser, Sub-Adviser, the Trust's principal underwriter, or any
affiliated person of either the Trust, Adviser, the Sub-Adviser or the
principal underwriter, acting as principal in the transaction, except to
the extent permitted by the Securities and Exchange Commission ("SEC") and
the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act.
The Sub-Adviser shall provide to the Adviser or the Board of Trustees such
periodic and special reports, balance sheets or financial information, and
such other information with regard to its affairs as the Adviser or Board
of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and shall
timely furnish to the Adviser all information relating to the Sub-Adviser's
services under this Agreement needed by the Adviser to keep the other books
and records of the Portfolio required by Rule 31a-1 under the 1940 Act.
The Sub-Adviser shall also furnish to the Adviser any other information
relating to the Assets that is required to be filed by the Adviser or the
Trust with the SEC or sent to shareholders under the 1940 Act (including
the rules adopted thereunder) or any exemptive or other relief that the
Adviser or the Trust obtains from the SEC. The Sub-Adviser agrees that all
records that it maintains on behalf of the Portfolio are property of the
Portfolio and the Sub-Adviser will surrender promptly to the Portfolio any
of such records upon the Portfolio's request; provided, however, that the
Sub-Adviser may retain a copy of such records. In addition, for the
duration of this Agreement, the Sub-Adviser shall preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records as are
required to be maintained by it pursuant to this Agreement, and shall
transfer said records to any successor sub-adviser upon the termination of
this Agreement (or, if there is no successor sub-adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Portfolio's custodian on each business
day with information relating to all transactions concerning the
Portfolio's Assets and shall provide the Adviser with such information upon
request of the Adviser.
(f) The investment management services provided by the Sub-Adviser under this
Agreement are not to be deemed exclusive and the Sub-Adviser shall be free
to render similar services to others, as long as such services do not
impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill its
commitment under this Agreement.
2
<PAGE>
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held in the Portfolio. The Adviser shall instruct the custodian
and other parties providing services to the Portfolio to promptly forward
misdirected proxies to the Sub-Adviser.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners,
officers, employees or affiliates.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Portfolio pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's performance of its
duties under this Agreement; provided, however, that in connection with its
management of the Assets, nothing herein shall be construed to relieve the
Sub-Adviser of responsibility for compliance with the Trust's Declaration
of Trust (as defined herein), the Prospectus, the instructions and
directions of the Board of Trustees of the Trust, the requirements of the
1940 Act, the Internal Revenue Code of 1986, and all other applicable
federal and state laws and regulations, as each is amended from time to
time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the Secretary
of State of the Commonwealth of Massachusetts (such Agreement and
Declaration of Trust, as in effect on the date of this Agreement and as
amended from time to time, herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Portfolio.
The Adviser will promptly furnish to the Sub-Adviser any and all amendments
or other changes to the documents specified in this Section 3, and the
Sub-Adviser shall not be charged with complying with any such document or
amendment not so delivered to the Sub-Adviser, unless the Sub-Adviser
reasonably should have known the terms of such document or amendment.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s) which
is attached hereto and made part of this Agreement. The fee will be
calculated based on the average monthly market value of the Assets under
the Sub-Adviser's management and will be paid to the Sub-Adviser monthly.
Except as may otherwise be prohibited by law or regulation (including any
then current SEC staff interpretation), the Sub-Adviser may, in its
discretion and from time to time, waive a portion of its fee.
5. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or damages
(including reasonable attorney's fees and other related expenses) howsoever
arising from or in connection with the performance of the Sub-Adviser's
obligations under this Agreement; provided, however, that the Sub-Adviser's
obligation under this Section 5 shall be reduced to the extent that the
claim against, or the loss, liability or damage experienced by the Adviser,
is caused by or is otherwise directly related to the Adviser's own willful
misfeasance, bad faith or negligence, or to the reckless disregard of its
duties under this Agreement.
3
<PAGE>
6. DURATION AND TERMINATION. This Agreement shall become effective upon its
approval by the Trust's Board of Trustees and by the vote of a majority of
the outstanding voting securities of the Portfolio. This Agreement shall
continue in effect for a period of more than two years from the date hereof
only so long as continuance is specifically approved at least annually in
conformance with the 1940 Act; provided, however, that this Agreement may
be terminated with respect to the Portfolio (a) by the Portfolio at any
time, without the payment of any penalty, by the vote of a majority of
Trustees of the Trust or by the vote of a majority of the outstanding
voting securities of the Portfolio, (b) by the Adviser at any time, without
the payment of any penalty, on not more than 60 days' nor less than 30
days' written notice to the Sub-Adviser, or (c) by the Sub-Adviser at any
time, without the payment of any penalty, on 90 days' written notice to the
Adviser. This Agreement shall terminate automatically and immediately in
the event of its assignment, or in the event of a termination of the
Adviser's agreement with the Trust. As used in this Section 6, the terms
"assignment" and "vote of a majority of the outstanding voting securities"
shall have the respective meanings set forth in the 1940 Act and the rules
and regulations thereunder, subject to such exceptions as may be granted by
the SEC under the 1940 Act.
7. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
8. SEVERABILITY. Should any part of this Agreement be held invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
9. NOTICE: Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by registered,
certified or overnight mail, postage prepaid addressed by the party giving
notice to the other party at the last address furnished by the other party:
To the Adviser at: SEI Financial Management Corporation
680 East Swedesford Road
Wayne, PA 19087
Attention: Legal Department
To the Sub-Adviser at: Seligman Henderson Co.
100 Park Avenue
New York, NY 10017
Attention: Compliance Officer
10. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject matter.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
A copy of the Declaration of Trust is on file with the Secretary of State
of the Commonwealth of Massachusetts, and notice is hereby given that the
obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of the Portfolio or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers
4
<PAGE>
designated below as of the day and year first written above.
SEI Financial Management Corporation Seligman Henderson Co.
By: By:
/s/ Kevin P. Robins /s/ Rodney G.D. Smith
------------------- ---------------------
Name: Name:
Kevin P. Robins Rodney G.D. Smith
---------------- -----------------
Title: Title:
Vice President C.E.O.
--------------- ------
5
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI FINANCIAL MANAGEMENT CORPORATION
AND
SELIGMAN HENDERSON CO.
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
International Equity Portfolio . %
6
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
AGREEMENT made this 20th day of September, 1996, between SEI Investments
Management Corporation, (the "Adviser") and Furman Selz Capital Management, LLC
(the "Sub-Adviser").
WHEREAS, SEI Institutional Investments Trust, a Massachusetts business
trust (the "Trust"), is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated June 14, 1996 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the Small Cap Growth Fund
(the "Portfolio"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain the
Sub-Adviser to provide investment advisory services to the Adviser in connection
with the management of the Portfolio, and the Sub-Adviser is willing to render
such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Portfolio entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the Assets,
in accordance with the Portfolio's investment objectives, policies and
restrictions as stated in the Portfolio's prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, in consultation with and subject to the direction of
the Adviser, determine from time to time what Assets will be purchased,
retained or sold by the Portfolio, and what portion of the Assets will be
invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement, the
Sub-Adviser shall act in conformity with the Trust's Declaration of Trust
(as defined herein) and the Prospectus and with the instructions and
directions of the Adviser and of the Board of Trustees of the Trust and
will conform to and comply with the requirements of the 1940 Act, the
Internal Revenue Code of 1986, and all other applicable federal and state
laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by the
Portfolio as provided in subparagraph (a) and will place orders with or
through such persons, brokers or dealers to carry out the policy with
respect to brokerage set forth in the Portfolio's Registration Statement
(as defined herein) and Prospectus or as the Board of Trustees or the
Adviser may direct from time to time, in conformity with federal securities
laws. In executing Portfolio transactions and selecting brokers or
dealers, the Sub-Adviser will use its best efforts to seek on behalf of the
Portfolio the best overall terms available. In assessing the best overall
terms available for any transaction, the Sub-Adviser shall consider all
factors that it deems relevant, including the breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker or dealer, and the reasonableness of the
commission, if any, both for the specific transaction and on a continuing
basis. In evaluating the best overall terms available, and in selecting
the broker-dealer to execute a particular transaction, the Sub-Adviser may
also consider the brokerage and research services provided (as those terms
are defined in Section 28(e) of the Securities Exchange Act of 1934).
Consistent with any guidelines established by the Board of Trustees of the
Trust, the Sub-Adviser is authorized to pay to a broker or dealer who
<PAGE>
provides such brokerage and research services a commission for executing a
portfolio transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if, but only if, the Sub-Adviser determines in good faith that
such commission was reasonable in relation to the value of the brokerage
and research services provided by such broker or dealer - - viewed in terms
of that particular transaction or terms of the overall responsibilities of
the Sub-Adviser to the Portfolio. In addition, the Sub-Adviser is
authorized to allocate purchase and sale orders for securities to brokers
or dealers (including brokers and dealers that are affiliated with the
Adviser, Sub-Adviser or the Trust's principal underwriter) to take into
account the sale of shares of the Trust if the Sub-Adviser believes that
the quality of the transaction and the commission are comparable to what
they would be with other qualified firms. In no instance, however, will
the Portfolio's Assets be purchased from or sold to the Adviser,
Sub-Adviser, the Trust's principal underwriter, or any affiliated person of
either the Trust, Adviser, the Sub-Adviser or the principal underwriter,
acting as principal in the transaction, except to the extent permitted by
the Securities and Exchange Commission ("SEC") and the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act.
The Sub-Adviser shall provide to the Adviser or the Board of Trustees such
periodic and special reports, balance sheets or financial information, and
such other information with regard to its affairs as the Adviser or Board
of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and shall
timely furnish to the Adviser all information relating to the Sub-Adviser's
services under this Agreement needed by the Adviser to keep the other books
and records of the Portfolio required by Rule 31a-1 under the 1940 Act.
The Sub-Adviser shall also furnish to the Adviser any other information
relating to the Assets that is required to be filed by the Adviser or the
Trust with the SEC or sent to shareholders under the 1940 Act (including
the rules adopted thereunder) or any exemptive or other relief that the
Adviser or the Trust obtains from the SEC. The Sub-Adviser agrees that all
records that it maintains on behalf of the Portfolio are property of the
Portfolio and the Sub-Adviser will surrender promptly to the Portfolio any
of such records upon the Portfolio's request; provided, however, that the
Sub-Adviser may retain a copy of such records. In addition, for the
duration of this Agreement, the Sub-Adviser shall preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records as are
required to be maintained by it pursuant to this Agreement, and shall
transfer said records to any successor sub-adviser upon the termination of
this Agreement (or, if there is no successor sub-adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Portfolio's custodian on each business
day with information relating to all transactions concerning the
Portfolio's Assets and shall provide the Adviser with such information upon
request of the Adviser.
(f) The investment management services provided by the Sub-Adviser under this
Agreement are not to be deemed exclusive and the Sub-Adviser shall be free
to render similar services to others, as long as such services do not
impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill its
commitment under this Agreement.
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held in the Portfolio. The Adviser shall instruct the custodian
and other parties providing services to the Portfolio to promptly forward
misdirected proxies to the Sub-
2
<PAGE>
Adviser.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners, officers
or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Portfolio pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's performance of its
duties under this Agreement; provided, however, that in connection with its
management of the Assets, nothing herein shall be construed to relieve the
Sub-Adviser of responsibility for compliance with the Trust's Declaration
of Trust (as defined herein), the Prospectus, the instructions and
directions of the Board of Trustees of the Trust, the requirements of the
1940 Act, the Internal Revenue Code of 1986, and all other applicable
federal and state laws and regulations, as each is amended from time to
time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the Secretary
of State of the Commonwealth of Massachusetts (such Agreement and
Declaration of Trust, as in effect on the date of this Agreement and as
amended from time to time, herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Portfolio.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s) which
is attached hereto and made part of this Agreement. The fee will be
calculated based on the average monthly market value of the Assets under
the Sub-Adviser s management and will be paid to the Sub-Adviser monthly.
Except as may otherwise be prohibited by law or regulation (including any
then current SEC staff interpretation), the Sub-Adviser may, in its
discretion and from time to time, waive a portion of its fee.
5. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or damages
(including reasonable attorney's fees and other related expenses) howsoever
arising from or in connection with the performance of the Sub-Adviser s
obligations under this Agreement; provided, however, that the Sub-Adviser s
obligation under this Section 5 shall be reduced to the extent that the
claim against, or the loss, liability or damage experienced by the Adviser,
is caused by or is otherwise directly related to the Adviser's own willful
misfeasance, bad faith or negligence, or to the reckless disregard of its
duties under this Agreement.
The Adviser shall indemnify and hold harmless the Sub-Adviser from and
against any and all claims, losses, liabilities or damages (including
reasonable attorney's fees and other related expenses) howsoever arising
from or in connection with the performance of the Adviser's obligations
under this Agreement; provided, however, that the Adviser's obligation
under this Section 5 shall be reduced to the extent that the claim against,
or the loss, liability or damage experienced by the Sub-Adviser, is caused
by or is otherwise directly related to the Sub-Adviser's own willful
misfeasance, bad faith or negligence, or to the reckless disregard of its
duties under this Agreement.
3
<PAGE>
6. DURATION AND TERMINATION. This Agreement shall become effective upon its
approval by the Trust's Board of Trustees and by the vote of a majority of
the outstanding voting securities of the Portfolio; provided, however, that
at any time the Adviser shall have obtained exemptive relief from the
Securities and Exchange Commission permitting it to engage a Sub-Adviser
without first obtaining approval of the Agreement from a majority of the
outstanding voting securities of the Portfolio(s) involved, the Agreement
shall become effective upon its approval by the Trust's Board of Trustees.
Any Sub-Adviser so selected and approved shall be without the protection
accorded by shareholder approval of an investment adviser's receipt of
compensation under Section 36(b) of the 1940 Act.
This Agreement shall continue in effect for a period of more than two years
from the date hereof only so long as continuance is specifically approved
at least annually in conformance with the 1940 Act; provided, however, that
this Agreement may be terminated with respect to the Portfolio (a) by the
Portfolio at any time, without the payment of any penalty, by the vote of a
majority of Trustees of the Trust or by the vote of a majority of the
outstanding voting securities of the Portfolio, (b) by the Adviser at any
time, without the payment of any penalty, on not more than 60 days' nor
less than 30 days' written notice to the Sub-Adviser, or (c) by the
Sub-Adviser at any time, without the payment of any penalty, on 90 days'
written notice to the Adviser. This Agreement shall terminate
automatically and immediately in the event of its assignment, or in the
event of a termination of the Adviser's agreement with the Trust. As used
in this Section 6, the terms "assignment" and "vote of a majority of the
outstanding voting securities" shall have the respective meanings set forth
in the 1940 Act and the rules and regulations thereunder, subject to such
exceptions as may be granted by the SEC under the 1940 Act.
7. GOVERNING LAW. This Agreement shall be governed by the internal laws of the
Commonwealth of Massachusetts, without regard to conflict of law principles;
provided, however, that nothing herein shall be construed as being
inconsistent with the 1940 Act.
8. SEVERABILITY. Should any part of this Agreement be held invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
9. NOTICE: Any notice, advice or report to be given pursuant to this Agreement
shall be deemed sufficient if delivered or mailed by registered, certified
or overnight mail, postage prepaid addressed by the party giving notice to
the other party at the last address furnished by the other party:
To the Adviser at: SEI Investments Management Corporation
Oaks, PA 19456
Attention: Legal Department
To the Sub-Adviser at: Furman Selz Capital Management, LLC
230 Park Avenue, 10th Floor
New York, NY 10169
10. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject matter.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
A copy of the Declaration of Trust is on file with the Secretary of State
of the Commonwealth of Massachusetts, and notice is hereby given that the
obligations of this instrument are not binding upon any of the
4
<PAGE>
Trustees, officers or shareholders of the Portfolio or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI Investments Management Corporation Furman Selz Capital Management, LLC
By: By:
/s/ Kevin P. Robins /s/ Vincent J. Lepore
- ------------------- ---------------------
Name: Name:
KEVIN P. ROBINS VINCENT J. LEPORE
Title: Title:
SENIOR VICE PRESIDENT VICE PRESIDENT AND MANAGING DIRECTOR
5
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
FURMAN SELZ CAPITAL MANAGEMENT, LLC
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
Small Cap Growth Fund . %
6
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
AGREEMENT made this 30th day of December, 1996, between SEI Investments
Management Corporation, (the "Adviser") and Lazard London International
Investment Management Limited (the "Sub-Adviser").
WHEREAS, SEI Institutional Investments Trust, a Massachusetts business
trust (the "Trust"), is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated June 14, 1996 (the "Advisory Agreement") with the Trust, pursuant to which
the Adviser will act as investment adviser to the International Equity Portfolio
(the "Portfolio"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain the
Sub-Adviser to provide investment advisory services to the Adviser in connection
with the management of the Portfolio, and the Sub-Adviser is willing to render
such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Portfolio entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the Assets,
in accordance with the Portfolio's investment objectives, policies and
restrictions as stated in the Portfolio's prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, in consultation with and subject to the direction of
the Adviser, determine from time to time what Assets will be purchased,
retained or sold by the Portfolio, and what portion of the Assets will be
invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement, the
Sub-Adviser shall act in conformity with the Trust's Declaration of Trust
(as defined herein) and the Prospectus and with the instructions and
directions of the Adviser and of the Board of Trustees of the Trust and
will conform to and comply with the requirements of the 1940 Act, the
Internal Revenue Code of 1986, and all other applicable federal and state
laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by the
Portfolio as provided in subparagraph (a) and will place orders with or
through such persons, brokers or dealers to carry out the policy with
respect to brokerage set forth in the Portfolio's Registration Statement
(as defined herein) and Prospectus or as the Board of Trustees or the
Adviser may direct from time to time, in conformity with federal securities
laws. In executing Portfolio transactions and selecting brokers or
dealers, the Sub-Adviser will use its best efforts to seek on behalf of the
Portfolio the best overall terms available. In assessing the best overall
terms available for any transaction, the Sub-Adviser shall consider all
factors that it deems relevant, including the breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker or dealer, and the reasonableness of the
commission, if any, both for the specific transaction and on a continuing
basis. In evaluating the best overall terms available, and in selecting
the broker-dealer to execute a particular transaction, the Sub-Adviser may
also consider the brokerage and research services provided (as those terms
are defined in
<PAGE>
Section 28(e) of the Securities Exchange Act of 1934). Consistent with any
guidelines established by the Board of Trustees of the Trust, the
Sub-Adviser is authorized to pay to a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if, but only if, the Sub-Adviser determines in good faith that
such commission was reasonable in relation to the value of the brokerage
and research services provided by such broker or dealer - - viewed in terms
of that particular transaction or terms of the overall responsibilities of
the Sub-Adviser to the Portfolio. In addition, the Sub-Adviser is
authorized to allocate purchase and sale orders for securities to brokers
or dealers (including brokers and dealers that are affiliated with the
Adviser, Sub-Adviser or the Trust's principal underwriter) to take into
account the sale of shares of the Trust if the Sub-Adviser believes that
the quality of the transaction and the commission are comparable to what
they would be with other qualified firms. In no instance, however, will
the Portfolio's Assets be purchased from or sold to the Adviser,
Sub-Adviser, the Trust's principal underwriter, or any affiliated person of
either the Trust, Adviser, the Sub-Adviser or the principal underwriter,
acting as principal in the transaction, except to the extent permitted by
the Securities and Exchange Commission ("SEC") and the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act.
The Sub-Adviser shall provide to the Adviser or the Board of Trustees such
periodic and special reports, balance sheets or financial information, and
such other information with regard to its affairs as the Adviser or Board
of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and shall
timely furnish to the Adviser all information relating to the Sub-Adviser's
services under this Agreement needed by the Adviser to keep the other books
and records of the Portfolio required by Rule 31a-1 under the 1940 Act.
The Sub-Adviser shall also furnish to the Adviser any other information
relating to the Assets that is required to be filed by the Adviser or the
Trust with the SEC or sent to shareholders under the 1940 Act (including
the rules adopted thereunder) or any exemptive or other relief that the
Adviser or the Trust obtains from the SEC. The Sub-Adviser agrees that all
records that it maintains on behalf of the Portfolio are property of the
Portfolio and the Sub-Adviser will surrender promptly to the Portfolio any
of such records upon the Portfolio's request; provided, however, that the
Sub-Adviser may retain a copy of such records. In addition, for the
duration of this Agreement, the Sub-Adviser shall preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records as are
required to be maintained by it pursuant to this Agreement, and shall
transfer said records to any successor sub-adviser upon the termination of
this Agreement (or, if there is no successor sub-adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Portfolio's custodian on each business
day with information relating to all transactions concerning the
Portfolio's Assets and shall provide the Adviser with such information upon
request of the Adviser.
(f) The investment management services provided by the Sub-Adviser under this
Agreement are not to be deemed exclusive and the Sub-Adviser shall be free
to render similar services to others, as long as such services do not
impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill its
commitment under this Agreement.
(h) The Sub-Adviser shall have discretion over voting and handling all proxies
in relation to the securities
2
<PAGE>
held in the Portfolio including, without limitation, whether or not to
vote. The Adviser shall instruct the custodian and other parties providing
services to the Portfolio to promptly forward misdirected proxies to the
Sub-Adviser.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners, officers
or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Portfolio pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's performance of its
duties under this Agreement; provided, however, that in connection with its
management of the Assets, nothing herein shall be construed to relieve the
Sub-Adviser of responsibility for compliance with the Trust's Declaration
of Trust (as defined herein), the Prospectus, the instructions and
directions of the Board of Trustees of the Trust, the requirements of the
1940 Act, the Internal Revenue Code of 1986, and all other applicable
federal and state laws and regulations, as each is amended from time to
time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the Secretary
of State of the Commonwealth of Massachusetts (such Agreement and
Declaration of Trust, as in effect on the date of this Agreement and as
amended from time to time, herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Portfolio.
(d) The Adviser will promptly furnish to the Sub-Adviser any and all amendments
or other changes to the documents specified in this Section 3, and the
Sub-Adviser shall not be charged with complying with any such document or
amendment not so delivered to the Sub-Adviser, unless the Sub-Adviser
reasonably should have known the terms of such document or amendment.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s) which
is attached hereto and made part of this Agreement. The fee will be
calculated at the end of each month based on the average of the market
value of the Assets under the Sub-Adviser s management at the end of the
preceding month and at the end of the current month, and will be paid to
the Sub-Adviser monthly. The fee hereunder shall initially be calculated
for the period beginning [MONTH DATE, 1997]. Except as may otherwise be
prohibited by law or regulation (including any then current SEC staff
interpretation), the Sub-Adviser may, in its discretion and from time to
time, waive a portion of its fee.
5. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or damages
(including reasonable attorney's fees and other related expenses) howsoever
arising from or in connection with the performance of the Sub-Adviser s
obligations under this Agreement; provided, however, that the Sub-Adviser s
obligation under this Section 5 shall be reduced to the extent that the
claim against, or the loss, liability or damage experienced by the Adviser,
is caused by or is otherwise related to the Adviser's own willful
misfeasance, bad faith or negligence, or to the reckless disregard of its
duties under this Agreement.
3
<PAGE>
The Adviser shall indemnify and hold harmless the Sub-Adviser from and
against any and all claims, losses, liabilities or damages (including
reasonable attorney's fees and other related expenses) howsoever arising
from or in connection with the performance of the Adviser's obligations
under this Agreement; provided, however, that the Adviser's obligation
under this Section 5 shall be reduced to the extent that the claim against,
or the loss, liability or damage experienced by the Sub-Adviser, is caused
by or is otherwise related to the Sub-Adviser's own willful misfeasance,
bad faith or negligence, or to the reckless disregard of its duties under
this Agreement.
6. DURATION AND TERMINATION. This Agreement shall become effective upon its
approval by the Trust's Board of Trustees, without need for a vote of a
majority of the outstanding voting securities of the Portfolio, pursuant to
an exemptive order issued by the Securities and Exchange Commission.
This Agreement shall continue in effect for a period of more than two years
from the date hereof only so long as continuance is specifically approved
at least annually in conformance with the 1940 Act; provided, however, that
this Agreement may be terminated with respect to the Portfolio (a) by the
Portfolio at any time, without the payment of any penalty, by the vote of a
majority of Trustees of the Trust or by the vote of a majority of the
outstanding voting securities of the Portfolio, (b) by the Adviser at any
time, without the payment of any penalty, on not more than 60 days' nor
less than 30 days' written notice to the Sub-Adviser, or (c) by the
Sub-Adviser at any time, without the payment of any penalty, on 90 days'
written notice to the Adviser. This Agreement shall terminate
automatically and immediately in the event of its assignment, or in the
event of a termination of the Adviser's agreement with the Trust. As used
in this Section 6, the terms "assignment" and "vote of a majority of the
outstanding voting securities" shall have the respective meanings set forth
in the 1940 Act and the rules and regulations thereunder, subject to such
exceptions as may be granted by the SEC under the 1940 Act.
7. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
8. SEVERABILITY. Should any part of this Agreement be held invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
9. NOTICE: Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by registered,
certified or overnight mail, postage prepaid addressed by the party giving
notice to the other party at the last address furnished by the other party:
To the Adviser at: SEI Investments Management Corporation
Oaks, Pennsylvania 19456
Attention: Legal Department
To the Sub-Adviser at: Lazard London International Investment
Management Limited
21 Moorfields
London, England EC2P 2HT
10. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject matter.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
4
<PAGE>
A copy of the Declaration of Trust is on file with the Secretary of State
of the Commonwealth of Massachusetts, and notice is hereby given that the
obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of the Portfolio or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI Investments Management Lazard London International Investment
Corporation Management Limited
By: By:
/s/ Kevin Robins /s/ Keith Jecks
- ---------------- ---------------
Name: Name:
KEVIN ROBINS KEITH JECKS
Title: Title:
SENIOR VICE PRESIDENT DIRECTOR
5
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
LAZARD LONDON INTERNATIONAL INVESTMENT MANAGEMENT LIMITED
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
International Equity Fund . %
6
<PAGE>
SCHEDULE B DATED JANUARY 1,1997
TO THE
SEI INSTITUTIONAL INVESTMENTS TRUST
SUB-ADVISORY AGREEMENT DATED JUNE 14, 1996
BETWEEN
SEI FINANCIAL MANAGEMENT CORPORATION
AND
LSV ASSET MANAGEMENT
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
Large Cap Fund .20%
Small Cap Value Fund .50%
Agreed and Accepted:
SEI Financial Management Corporation LSV Asset Management
. By SEI Funds, Inc.,
a general partner
By: Signature Appears Here By: Signature Appears Here
-------------------------------- --------------------------------
Title: Title:
----------------------------- -----------------------------
-6-
<PAGE>
DISTRIBUTION AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
THIS AGREEMENT is made as of this 14th day of June, 1996 between SEI
Institutional Investments Trust (the "Trust"), a Massachusetts business trust,
and SEI Financial Services Company (the "Distributor"), a Pennsylvania
corporation.
WHEREAS, the Trust is registered as an investment company with the
Securities and Exchange Commission (the "SEC") under the Investment Company Act
of 1940, as amended (the "1940 Act"), and its shares are registered with the SEC
under the Securities Act of 1933, as amended (the "1933 Act"); and
WHEREAS, the Distributor is registered as a broker-dealer with the SEC
under the Securities Exchange Act of 1934, as amended;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the Trust and the Distributor hereby agree as follows:
ARTICLE 1. SALE OF SHARES. The Trust grants to the Distributor the
exclusive right to sell shares (the "Shares") of the portfolios (the
"Portfolios") of the Trust at the net asset value per Share, plus any applicable
sales charge in accordance with the Trust's current prospectuses, as agent and
on behalf of the Trust, during the term of this Agreement and subject to the
registration requirements of the 1933 Act, the rules and regulations of the SEC
and the laws governing the sale of securities in the various states (the "Blue
Sky Laws").
ARTICLE 2. SOLICITATION OF SALES. In consideration of these rights granted
to the Distributor, the Distributor agrees to use all reasonable efforts,
consistent with its other business, in connection with the distribution of the
Shares of the Trust; provided, however, that the Distributor shall not be
prevented from entering into like arrangements with other issuers. The
provisions of this paragraph do not obligate the Distributor to register as a
broker or dealer under the Blue Sky Laws of any jurisdiction when it determines
it would be uneconomical for it to do so or to maintain its registration in any
jurisdiction in which it is now registered nor obligate the Distributor to sell
any particular number of Shares.
ARTICLE 3. COMPENSATION. As compensation for providing the services under
this Agreement:
(a) The Distributor shall receive from the Trust:
(1) all distribution and service fees, as applicable, at the rate and
under the terms and conditions set forth in each Distribution and
Service Plan adopted by the appropriate class of Shares of each of the
Portfolios, as such Plans may be amended from time to time, and
subject to any further limitations on such fees as the Board of
Directors of the Trust may impose;
(2) all contingent deferred sales charges ("CDSC") applied on
redemptions of CDSC Class Shares, as applicable, of each Portfolio on
the terms and subject to such waivers as are described in the Trust's
Registration Statement and current prospectuses, as amended from time
to time, or as otherwise required pursuant to applicable law; and
(3) all front-end sales charges, as applicable, on purchases of
front-end load Shares of each Portfolio sold subject to such charges
as described in the Trust's Registration Statement and
<PAGE>
current prospectuses, as amended from time to time. The Distributor,
or brokers, dealers and other financial institutions and
intermediaries that have entered into sub-distribution agreements with
the Distributor, may collect the gross proceeds derived from the sale
of such front-end load Shares, remit the net asset value thereof to
the Trust upon receipt of the proceeds and retain the applicable sales
charge.
(b) The Distributor may reallow any or all of the distribution or service
fees, CDSC, and front-end sales charges which it is paid by the Trust
to such brokers, dealers and other financial institutions and
intermediaries as the Distributor may from time to time determine.
(c) The Distributor may transfer its right to the payments described in
this Article 3 to third persons who provide Trusting to the Distributor,
provided that any such transfer shall not be deemed a transfer of the
Distributor's obligations under this Agreement. Upon receipt of direction
from the Distributor to pay such fees to a transferee, the Trust shall make
payment in accordance with such direction.
ARTICLE 4. AUTHORIZED REPRESENTATIONS. The Distributor is not authorized by
the Trust to give any information or to make any representations other than
those contained in the current registration statements and prospectuses of the
Trust filed with the SEC or contained in Shareholder reports or other material
that may be prepared by or on behalf of the Trust for the Distributor's use. The
Distributor may prepare and distribute sales literature and other material as it
may deem appropriate, provided that such literature and materials have been
prepared in accordance with applicable rules and regulations.
ARTICLE 5. REGISTRATION OF SHARES. The Trust agrees that it will take all
action necessary to register Shares under the federal and state securities laws
so that there will be available for sale the number of Shares the Distributor
may reasonably be expected to sell and to pay all fees associated with said
registration. The Trust shall make available to the Distributor such number of
copies of its currently effective prospectuses and statement of additional
information as the Distributor may reasonably request. The Trust shall furnish
to the Distributor copies of all information, financial statements and other
papers which the Distributor may reasonably request for use in connection with
the distribution of Shares of the Trust.
ARTICLE 6. INDEMNIFICATION OF DISTRIBUTOR. The Trust agrees to indemnify
and hold harmless the Distributor and each of its directors and officers and
each person, if any, who controls the Distributor within the meaning of Section
15 of the 1933 Act against any loss, liability, claim, damages or expense
(including the reasonable cost of investigating or defending any alleged loss,
liability, claim, damages, or expense and reasonable counsel fees and
disbursements incurred in connection therewith), arising by reason of any person
acquiring any Shares, based upon the ground that the registration statement,
prospectus, Shareholder reports or other information filed or made public by the
Trust (as from time to time amended) included an untrue statement of a material
fact or omitted to state a material fact required to be stated or necessary in
order to make the statements made not misleading. However, the Trust does not
agree to indemnify the Distributor or hold it harmless to the extent that the
statements or omission was made in reliance upon, and in conformity with,
information furnished to the Trust by or on behalf of the Distributor.
In no case (i) is the indemnity of the Trust to be deemed to protect the
Distributor against any liability to the Trust or its Shareholders to which the
Distributor or such person otherwise would be subject by reason of willful
misfeasance, bad faith or negligence in the performance of its duties or by
reason of its reckless disregard of its obligations and duties under this
Agreement, or (ii) is the Trust to be liable to the Distributor under the
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<PAGE>
indemnity agreement contained in this paragraph with respect to any claim made
against the Distributor or any person indemnified unless the Distributor or
other person shall have notified the Trust in writing of the claim within a
reasonable time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon the
Distributor or such other person (or after the Distributor or the person shall
have received notice of service on any designated agent). However, failure to
notify the Trust of any claim shall not relieve the Trust from any liability
which it may have to the Distributor or any person against whom such action is
brought otherwise than on account of its indemnity agreement contained in this
paragraph.
The Trust shall be entitled to participate at its own expense in the
defense or, if it so elects, to assume the defense of any suit brought to
enforce any claims subject to this indemnity provision. If the Trust elects to
assume the defense of any such claim, the defense shall be conducted by counsel
chosen by the Trust and satisfactory to the indemnified defendants in the suit
whose approval shall not be unreasonably withheld. In the event that the Trust
elects to assume the defense of any suit and retain counsel, the indemnified
defendants shall bear the fees and expenses of any additional counsel retained
by them. If the Trust does not elect to assume the defense of a suit, it will
reimburse the indemnified defendants for the reasonable fees and expenses of any
counsel retained by the indemnified defendants.
The Trust agrees to notify the Distributor promptly of the commencement of
any litigation or proceedings against it or any of its officers or Directors in
connection with the issuance or sale of any of its Shares.
ARTICLE 7. INDEMNIFICATION OF TRUST. The Distributor covenants and agrees
that it will indemnify and hold harmless the Trust and each of its Directors and
officers and each person, if any, who controls the Trust within the meaning of
Section 15 of the Act, against any loss, liability, damages, claim or expense
(including the reasonable cost of investigating or defending any alleged loss,
liability, damages, claim or expense and reasonable counsel fees incurred in
connection therewith) based upon the 1933 Act or any other statute or common law
and arising by reason of any person acquiring any Shares, and alleging a
wrongful act of the Distributor or any of its employees or alleging that the
registration statement, prospectus, Shareholder reports or other information
filed or made public by the Trust (as from time to time amended) included an
untrue statement of a material fact or omitted to state a material fact required
to be stated or necessary in order to make the statements not misleading,
insofar as the statement or omission was made in reliance upon and in conformity
with information furnished to the Trust by or on behalf of the Distributor.
In no case (i) is the indemnity of the Distributor in favor of the Trust or
any other person indemnified to be deemed to protect the Trust or any other
person against any liability to which the Trust or such other person would
otherwise be subject by reason of willful misfeasance, bad faith or negligence
in the performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement, or (ii) is the Distributor to be
liable under its indemnity agreement contained in this paragraph with respect to
any claim made against the Trust or any person indemnified unless the Trust or
person, as the case may be, shall have notified the Distributor in writing of
the claim within a reasonable time after the summons or other first written
notification giving information of the nature of the claim shall have been
served upon the Trust or upon any person (or after the Trust or such person
shall have received notice of service on any designated agent). However, failure
to notify the Distributor of any claim shall not relieve the Distributor from
any liability which it may have to the Trust or any person against whom the
action is brought otherwise than on account of its indemnity agreement contained
in this paragraph.
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The Distributor shall be entitled to participate, at its own expense, in
the defense or, if it so elects, to assume the defense of any suit brought to
enforce the claim, but if the Distributor elects to assume the defense, the
defense shall be conducted by counsel chosen by the Distributor and satisfactory
to the indemnified defendants whose approval shall not be unreasonably withheld.
In the event that the Distributor elects to assume the defense of any suit and
retain counsel, the defendants in the suit shall bear the fees and expenses of
any additional counsel retained by them. If the Distributor does not elect to
assume the defense of any suit, it will reimburse the indemnified defendants in
the suit for the reasonable fees and expenses of any counsel retained by them.
The Distributor agrees to notify the Trust promptly of the commencement of
any litigation or proceedings against it in connection with the issue and sale
of any of the Trust's Shares.
ARTICLE 8. EFFECTIVE DATE. This Agreement shall be effective upon its
execution, and unless terminated as provided, shall continue in force for one
year from the effective date and thereafter year to year, provided that such
annual continuance is approved by (i) either the vote of a majority of the
Directors of the Trust, or the vote of a majority of the outstanding voting
securities of the Trust, and (ii) the vote of a majority of those Directors of
the Trust who are not parties to this Agreement or the Trust's Distribution Plan
or interested persons of any such party ("Qualified Directors"), cast in person
at a meeting called for the purpose of voting on the approval. This Agreement
shall automatically terminate in the event of its assignment. As used in this
paragraph the terms "vote of a majority of the outstanding voting securities",
"assignment" and "interested person" shall have the respective meanings
specified in the 1940 Act. In addition, this Agreement may at any time be
terminated without penalty by the Distributor, by a vote of a majority of
Qualified Directors or by vote of a majority of the outstanding voting
securities of the Trust upon not less than sixty days prior written notice to
the other party.
ARTICLE 9. NOTICES. Any notice required or permitted to be given by either
party to the other shall be deemed sufficient if sent by registered or certified
mail, postage prepaid, addressed by the party giving notice to the other party
at the last address furnished by the other party to the party giving notice: if
to the Trust, at 680 East Swedesford Road, Wayne, Pennsylvania, and if to the
Distributor, at 680 East Swedesford Road, Wayne, Pennsylvania 19087.
ARTICLE 10. LIMITATION OF LIABILITY. A copy of the Articles of
Incorporation of the Trust is on file with the Secretary of State of Maryland,
and notice is hereby given that this Agreement is executed on behalf of the
Directors of the Trust as Directors and not individually and that the
obligations of this instrument are not binding upon any of the Directors,
officers or shareholders of the Trust individually but binding only upon the
assets and property of the Trust.
ARTICLE 11. GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the state of Maryland and the applicable provisions of the 1940
Act. To the extent that the applicable laws of the state of Maryland, or any of
the provisions herein, conflict with the applicable provisions of the 1940 Act,
the latter shall control.
ARTICLE 12. MULTIPLE ORIGINALS. This Agreement may be executed in two or
more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
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IN WITNESS, the Trust and Distributor have each duly executed this
Agreement, as of the day and year above written.
SEI INSTITUTIONAL INVESTMENTS TRUST
By: Signature Appears Here
--------------------------------
Attest: Signature Appears Here
----------------------------
SEI FINANCIAL SERVICES COMPANY
By: Signature Appears Here
--------------------------------
Attest: Signature Appears Here
----------------------------
5
<PAGE>
CUSTODIAN AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
This Agreement, dated as of the 17th day of June, 1996 by and between SEI
INSTITUTIONAL INVESTMENTS TRUST (the "Trust"), a business trust duly organized
under the laws of the Commonwealth of Massachusetts and CORESTATES BANK, N.A.
(the "Bank").
WITNESSETH:
WHEREAS, the Trust desires to appoint the Bank to act as Custodian of its
portfolio securities, cash and other property from time to time deposited with
or collected by the Bank for the Trust;
WHEREAS, the Bank is qualified and authorized to act as Custodian for the
Trust and the separate series thereof (each a "Fund" and, collectively, the
"Funds"), and is willing to act in such capacity upon the terms and conditions
herein set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto, intending to be legally bound,
do hereby agree as follows:
1. The terms as defined in this Section wherever used in this Agreement, or in
any amendment or supplement hereto, shall have meanings herein specified unless
the context otherwise requires.
CUSTODIAN: The term Custodian shall mean the Bank in its capacity as Custodian
under this Agreement.
DEPOSITORY: The term Depository means any depository service which acts as a
system for the central handling of securities where all securities of any
particular class or series of an issuer deposited within the system are treated
as fungible and may be transferred by bookkeeping entry without physical
delivery.
PROPER INSTRUCTIONS. For purposes of this Agreement, the Custodian shall be
deemed to have received Proper Instructions upon receipt of written (including
instructions received by means of computer terminals or facsimile
transmissions), telephone or telegraphic instructions from a person or persons
authorized from time to time by the Trustees of the Trust to give the particular
class of instructions. Telephone or telegraphic instructions shall be confirmed
in writing by such person or persons as said Trustees shall have from time to
time authorized to give the particular class of instructions in question. The
Custodian may act upon telephone or telegraphic instructions without awaiting
receipt of written confirmation, and shall not be liable for the Trust's
failure to confirm such instructions in writing.
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SECURITIES: The term Securities means stocks, bonds, rights, warrants and all
other negotiable or non-negotiable paper issued in certificated or book-entry
form commonly known as "securities" in banking custom or practice.
SHAREHOLDERS: The term Shareholders shall mean the registered owners from time
to time of the Shares of the Trust in accordance with the registry records
maintained by the Trust or agents on its behalf.
SHARES: The term Shares of the Trust shall mean the units of beneficial
interest.
2. The Trust hereby appoints the Custodian as Custodian of the Trust's cash,
Securities and other property, to be held by the Custodian as provided in this
Agreement. The Custodian hereby accepts such appointment subject to the terms
and conditions hereinafter provided. The Bank shall open a separate custodial
account in the name of the Trust on the books and records of the Bank to hold
the Securities of the Trust deposited with, transferred to or collected by the
Bank for the account of the Trust, and a separate cash account to which the Bank
shall credit monies received by the Bank for the account of or from the Trust.
Such cash shall be segregated from the assets of others and shall be and remain
the sole property of the Trust.
3. The Trust shall from time to time file with the Custodian a certified copy of
each resolution of its Board of Trustees authorizing the person or persons to
give Proper Instructions and specifying the class of instructions that may be
given by each person to the Custodian under this Agreement, together with
certified signatures of such persons authorized to sign, which shall constitute
conclusive evidence of the authority of the officers signatories designated
therein to act, and shall be considered in full force and effect with the
Custodian fully protected in acting in reliance thereon until it receives
written notice to the contrary; provided, however, that if the certifying
officer is authorized to give Proper Instructions, the certification shall be
also signed by a second officer of the Trust.
4. The Trust will cause to be deposited with the Custodian hereunder the
applicable net asset value of Shares sold from time to time whether representing
initial issue, other stock or reinvestments of dividends and/or distributions
payable to Shareholders.
5. The Bank, acting as agent for the Trust, is authorized, directed and
instructed subject to the further provisions of this Agreement:
(a) to hold Securities issued only in bearer form in bearer form;
(b) to register in the name of the nominee of the Bank, the Bank's
Depositories, or sub-custodians, (i) Securities issued only in
registered form, and (ii) Securities issued in both bearer and
registered form, which are freely interchangeable without penalty;
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<PAGE>
(c) to deposit any Securities which are eligible for deposit (i) with any
domestic or foreign Depository on such terms and conditions as such
Depository may require, including provisions for limitation or
exclusion of liability on the part of the Depository; and (ii) with
any sub-custodian which the Bank uses, including any subsidiary or
affiliate of the Bank;
(d) (i) to credit for the account of the Trust all proceeds received
and payable on or in respect of the assets maintained
hereunder,
(ii) to debit the account of the Trust for the cost of acquiring
Securities the Bank has received for the Trust, against
delivery of such Securities to the Bank,
(iii) to present for payment Securities and other obligations
(including coupons) upon maturity, when called for
redemption, and when income payments are due, and
(iv) to make exchanges of Securities which, in the Bank's
opinion, are purely ministerial as, for example, the
exchange of Securities in temporary form for Securities in
definitive form or the mandatory exchange of certificates;
(e) to forward to the Trust, and/or any other person designated by the
Trust, all proxies and proxy materials received by the Bank in
connection with Securities held in the Trust's account, which have
been registered in the name of the Bank's nominee, or are being held
by any Depository, or sub-custodian, on behalf of the Bank;
(f) to sell any fractional interest of any Securities which the Bank has
received resulting from any stock dividend, stock split, distribution,
exchange, conversion or similar activity;
(g) to release the Trust's name, address and aggregate share position to
the issuers of any domestic Securities in the account of the Trust,
provided, however, the Trust may instruct the Bank not to provide any
such information to any issuer;
(h) to endorse and collect all checks, drafts or other orders for the
payment of money received by the Bank for the account of or from the
Trust;
(i) at the direction of the Trust, to enroll designated Securities
belonging to the Trust and held hereunder in a program for the
automatic reinvestment of all income and capital gains distributions
on those Securities in new shares (an "Automatic Reinvestment
Program"), or instruct any Depository holding such Securities to
enroll those Securities in an Automatic Reinvestment Program;
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<PAGE>
(j) at the direction of the Trust, to receive, deliver and transfer
Securities and make payments and collections of monies in connection
therewith, enter purchase and sale orders and perform any other acts
incidental or necessary to the performance of the above acts with
brokers, dealers or similar agents selected by the Trust, including
any broker, dealer or similar agent affiliated with the Bank, for the
account and risk of the Trust in accordance with accepted industry
practice in the relevant market, provided, however, if it is
determined that any certificated Securities transferred to a
Depository or sub-custodian, the Bank, or the Bank's nominee, the
Bank's sole responsibility for such Securities under this Agreement
shall be to safekeep the Securities in accordance with Section 11
hereof; and
(k) to notify the Trust and/or any other person designated by the Trust
upon receipt of notice by the Bank of any call for redemption, tender
offer, subscription rights, merger, consolidation, reorganization or
recapitalization which (i) appears in The Wall Street Journal (New
York edition), The Standard & Poor's Called Bond Record for Preferred
Stocks, Financial Daily Called Bond Service, The Kenny Services, any
official notifications from The Depository Trust Company and such
other publications or services to which the Bank may from time to time
subscribe, (ii) requires the Bank to act in response thereto, and
(iii) pertain to Securities belonging to the Trust and held hereunder
which have been registered in the name of the Bank's nominee or are
being held by a Depository or sub-custodian on behalf of the Bank.
Notwithstanding anything contained herein to the contrary, the Trust
shall have the sole responsibility for monitoring the applicable dates
on which Securities with put option features must be exercised. All
solicitation fees payable to the Bank as agent in connection herewith
will be retained by the Bank unless expressly agreed to the contrary
in writing by the Bank.
Notwithstanding anything in this Section to the contrary, the Bank is authorized
to hold Securities for the Trust which have transfer limitations imposed upon
them by the Securities Act of 1933, as amended, or represent shares of mutual
funds (i) in the name of the Trust, (ii) in the name of the Bank's nominee, or
(iii) with any Depository or sub-custodian.
6. The Custodian's compensation shall be as set forth in Schedule A hereto
attached, or as shall be set forth in amendments to such schedule approved by
the Trust and the Custodian. The Bank is authorized to charge the Trust's
account for such compensation. All expenses and taxes payable with respect to
the Securities in the account of the Trust including, without limitation,
commission charges on purchases and sales and the amount of any loss or
liability for stockholders' assessments or otherwise, claimed or asserted
against the bank or against the Bank's nominee by reason of any registration
hereunder shall be charged to the Trust.
7. In connection with its functions under this Agreement, the Custodian shall:
(a) render to the Trust a daily report of all monies received or paid on
behalf of the Trust; and
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(b) create, maintain and retain all records relating to its activities and
obligations under this Agreement in such manner as will meet the
obligations of the Trust with respect to said Custodian's activities
in accordance with generally accepted accounting principles. All
records maintained by the Custodian in connection with the performance
of its duties under this Agreement will remain the property of the
Trust and in the event of termination of this Agreement will be
relinquished to the Trust.
8. Any Securities deposited with any Depository or with any sub-custodian will
be represented in accounts in the name of the Bank which include only property
held by the Bank as Custodian for customers in which the Bank acts in a
fiduciary or agency capacity.
Should any Securities which are forwarded to the Bank by the Trust, and which
are subsequently deposited to the Bank's account in any Depository or with any
sub-custodian, or which the Trust may arrange to deposit in the Bank's account
in any Depository or with any sub-custodian, not be deemed acceptable for
deposit by such Depository or sub-custodian, for any reason, and as a result
thereof there is a short position in the account of the Bank with the Depository
for such Security, the Trust agrees to furnish the Bank immediately with like
Securities in acceptable form.
9. The Trust represents and warrants that: (i) it has the legal right, power and
authority to execute, deliver and perform this Agreement and to carry out all of
the transactions contemplated hereby; (ii) it has obtained all necessary
authorizations; (iii) the execution, delivery and performance of this Agreement
and the carrying out of any of the transactions contemplated hereby will not be
in conflict with, result in a breach of or constitute a default under any
agreement or other instrument to which the Trust is a party or which is
otherwise known to the Trust; (iv) it does not require the consent or approval
of any governmental agency or instrumentality, except any such consents and
approvals which the Trust has obtained; (v) the execution and delivery of this
Agreement by the Trust will not violate any law, regulation, charter, by-law,
order of any court or governmental agency or judgment applicable to the Trust;
and (vi) all persons executing this Agreement on behalf of the Trust and
carrying out the transactions contemplated hereby on behalf of the Trust are
duly authorized to do so.
In the event any of the foregoing representations should become untrue,
incorrect or misleading, the Trust agrees to notify the Bank immediately in
writing thereof.
10. The Bank represents and warrants that: (i) it has the legal right, power and
authority to execute, deliver and perform this Agreement and to carry out all of
the transactions contemplated hereby; (ii) it has obtained all necessary
authorizations; (iii) the execution, delivery and performance of this Agreement
and the carrying out of any of the transactions contemplated hereby will not be
in conflict with, result in a breach of or constitute a default under any
agreement or other instrument to which the Bank is a party or which is otherwise
known to the Bank; (iv) it does not require the consent or approval of any
governmental agency or instrumentality, except any such consents and approvals
which the Bank has obtained; (v) the
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<PAGE>
execution and delivery of this Agreement by the Bank will not violate any law,
regulation, charter, by-law, order of any court or governmental agency or
judgment applicable to the Bank; and (vi) all persons executing this Agreement
on behalf of the Bank and carrying out the transactions contemplated hereby on
behalf of the Bank are duly authorized to do so. In the event that any of the
foregoing representations should become untrue, incorrect or misleading, the
Bank agrees to notify the Trust immediately in writing thereof.
11. All cash and Securities held by the Bank hereunder shall be kept with the
care exercised as to the Bank's own similar property. The Bank may at its option
insure itself against loss from any cause but shall be under no obligation to
insure for the benefit of the Trust.
12. No liability of any kind shall be attached to or incurred by the Custodian
by reason of its custody of the Trust's assets held by it from time to time
under this Agreement, or otherwise by reason of its position as Custodian
hereunder except only for its own negligence, bad faith, or willful misconduct
in the performance of its duties as specifically set forth in the Custodian
Agreement. Without limiting the generality of the foregoing sentence, the
Custodian:
(a) may rely upon the advice of counsel for the Trust; and for any action
taken or suffered in good faith based upon such advice or statements
the Custodian shall not be liable to anyone;
(b) shall not be liable for anything done or suffered to be done in good
faith in accordance with any request or advice of, or based upon
information furnished by, the Trust or its authorized officers or
agents;
(c) is authorized to accept a certificate of the Secretary or Assistant
Secretary of the Trust, or Proper Instructions, to the effect that a
resolution in the form submitted has been duly adopted by its Board of
Trustees or by the Shareholders, as conclusive evidence that such
resolution has been duly adopted and is in full force and effect; and
(d) may rely and shall be protected in acting upon any signature, written
(including telegraph or other mechanical) instructions, request,
letter of transmittal, certificate, opinion of counsel, statement,
instrument, report, notice, consent, order, or other paper or document
reasonably believed by it to be genuine and to have been signed,
forwarded or presented by the purchaser, Trust or other proper
party or parties.
13. The Trust, its successors and assigns do hereby fully indemnify and hold
harmless the Custodian its successors and assigns, from any and all loss,
liability, claims, demand, actions, suits and expenses of any nature as the same
may arise from the failure of the Trust to comply with any law, rule, regulation
or order of the United States, any state or any other jurisdiction, governmental
authority, body, or board relating to the sale, registration, qualification of
units of
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<PAGE>
beneficial interest in the Trust, or from the failure of the Trust to perform
any duty or obligation under this Agreement.
Upon written request of the Custodian, the Trust shall assume the entire defense
of any claim subject to the foregoing indemnity, or the joint defense with the
Custodian of such claim, as the Custodian shall request. The indemnities and
defense provisions of this Section 13 shall indefinitely survive termination of
this Agreement.
14. This Agreement may be amended from time to time without notice to or
approval of the Shareholders by a supplemental agreement executed by the Trust
and the Bank and amending and supplementing this Agreement in the manner
mutually agreed.
15. Either the Trust or the Custodian may give one hundred twenty (120) days'
written notice to the other of the termination of this Agreement, such
termination to take effect at the time specified in the notice. In case such
notice of termination is given either by the Trust or by the Custodian, the
Trustees of the Trust shall, by resolution duly adopted, promptly appoint a
successor Custodian (the "Successor Custodian") which Successor Custodian shall
be a bank, trust company, or a bank and trust company in good standing, with
legal capacity to accept custody of the cash and Securities of a mutual fund.
Upon receipt of written notice from the Trust of the appointment of such
Successor Custodian and upon receipt of Proper Instructions, the Custodian shall
deliver such cash and Securities as it may then be holding hereunder directly
and only to the Successor Custodian. Unless or until a Successor Custodian has
been appointed as above provided, the Custodian then acting shall continue to
act as Custodian under this Agreement.
Every Successor Custodian appointed hereunder shall execute and deliver an
appropriate written acceptance of its appointment and shall thereupon become
vested with the rights, powers, obligations and custody of its predecessor
Custodian. The Custodian ceasing to act shall nevertheless, upon request of the
Trust and the Successor Custodian and upon payment of its charges and
disbursements, execute an instrument in form approved by its counsel
transferring to the Successor Custodian all the predecessor Custodian's rights,
duties, obligations and custody.
Subject to the provisions of Section 21 hereof, in case the Custodian shall
consolidate with or merge into any other corporation, the corporation remaining
after or resulting from such consolidation or merger shall ipso facto without
the execution of filing of any papers or other documents, succeed to and be
substituted for the Custodian with like effect as though originally named as
such, PROVIDED, HOWEVER, in every case that said Successor corporation maintains
the qualifications set out in Section 17(f) of the Investment Company Act of
1940, as amended.
16. This Agreement shall take effect when assets of the Trust are first
delivered to the Custodian.
17. This Agreement may be executed in two or more counterparts, each of which
when so executed shall be deemed to be an original, but such counterparts shall
together constitute but one and the same instrument.
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<PAGE>
18. A copy of the Declaration of Trust of the Trust is on file with the
Secretary of State of the Commonwealth of Massachusetts, and notice is hereby
given that this instrument is executed on behalf of the Trustees of the Trust as
Trustees and not individually and that the obligations of this instrument are
not binding upon any of the Trustees, officers or Shareholders of the Trust
individually, but binding only upon the assets and property of the Trust. No
Fund of the Trust shall be liable for the obligations of any other Fund of the
Trust.
19. The Custodian shall create and maintain all records relating to its
activities and obligations under this Agreement in such manner as will meet the
obligations of the Trust under the Investment Company Act of 1940, as amended,
with particular attention to Section 31 thereof and Rules 31a-1 and 31a-2
thereunder, applicable Federal and state tax laws and any other law or
administrative rules or procedures which may be applicable to the Trust.
Subject to security requirements of the Custodian applicable to its own
employees having access to similar records within the Custodian, the books and
records of the Custodian pertaining to this Agreement shall be open to
inspection and audit at any reasonable times by officers of, attorneys for, and
auditors employed by, the Trust.
20. Nothing contained in this Agreement is intended to or shall require the
Custodian in any capacity hereunder to perform any functions or duties on any
holiday or other day of special observance on which the Custodian is closed.
Functions or duties normally scheduled to be performed on such days shall be
performed on, and as of, the next business day the Custodian is open.
21. This Agreement shall extend to and shall be binding upon the parties hereto
and their respective successors and assigns; provided, however, that this
Agreement shall not be assignable by the Trust without the written consent of
the Custodian, or by the Custodian without the written consent of the Trust,
authorized or approved by a resolution of its Board of Trustees.
22. All communications (other than Proper Instructions which are to be furnished
hereunder to either party, or under any amendment hereto, shall be sent by mail
to the address listed below, provided that in the event that the Bank, in its
sole discretion, shall determine that an emergency exists, the Bank may use such
other means of communications as the Bank deems advisable.
To the Trust: SEI Institutional Investments Trust
c/o SEI Corporation
680 East Swedesford Road
Wayne, PA 19087
To the Bank:
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<PAGE>
23. This Agreement, and any amendments hereto, shall be governed, construed and
interpreted in accordance with the laws of the Commonwealth of Pennsylvania
applicable to agreements made and to be performed entirely within such
Commonwealth.
IN WITNESS WHEREOF, the Trust and the Custodian have caused this Agreement to be
signed by their respective officers as of the day and year first above written.
SEI INSTITUTIONAL INVESTMENTS TRUST
By: /s/ Kathryn Stanton
-------------------------------------
Name: Kathryn Stanton
Title: Vice President
CORESTATES BANK, N.A.
By: /s/ Paul T. Cahill
-------------------------------------
Name: Paul T. Cahill
Title: Vice President
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<PAGE>
SCHEDULE A
FEE SCHEDULE
1.00 basis points on the first $2.5 billion
.75 basis points on the next $2.5 billion
.50 basis points son the next $5 billion
.40 basis points on remainder
Transactions billed separately by portfolio at the now current rates. Asset
level charges billed as one invoice covering all SEI Institutional Investments
Trust portfolios custodied at CoreStates. SEI will allocate charges back to
individual portfolios. Transactions charges are subject to change.
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SCHEDULE B
CUSTODY SERVICES
Transaction Fees
$ 4.00 Per trade and maturity clearing through Depository Trust
Company.
$10.00 Per trade and maturity clearing book entry through Federal
Reserve.
$15.00 Per trade and maturity for assets requiring physical
settlement.
$10.00 Per trade and maturity clearing through Participants Trust
Company.
$ 4.00 Paydowns on mortgage-backed securities.
$ 5.50 Fed wire charge on Repo collateral in/out.
$ 5.50/7.50 Other cash wire transfers in/out.
$ 5.50 Dividend reinvestment.
$ 2.50 Fed charge for sale/return of collateral.
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<PAGE>
CUSTODIAN CONTRACT
Between
SEI INSTITUTIONAL INVESTMENTS TRUST
and
STATE STREET BANK AND TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
Page
----
1. Employment of Custodian and Property to be Held By
It . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
2. Duties of the Custodian with Respect to Property
of the Fund Held by the Custodian in the United States . . . . . . . . . .2
2.1 Holding Securities . . . . . . . . . . . . . . . . . . . . . . . . .2
2.2 Delivery of Securities . . . . . . . . . . . . . . . . . . . . . . .2
2.3 Registration of Securities . . . . . . . . . . . . . . . . . . . . .4
2.4 Bank Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . .4
2.5 Availability of Federal Funds. . . . . . . . . . . . . . . . . . . .5
2.6 Collection of Income . . . . . . . . . . . . . . . . . . . . . . . .5
2.7 Payment of Fund Monies . . . . . . . . . . . . . . . . . . . . . . .5
2.8 Liability for Payment in Advance of Receipt of
Securities Purchased . . . . . . . . . . . . . . . . . . . . . . . .6
2.9 Appointment of Agents. . . . . . . . . . . . . . . . . . . . . . . .7
2.10 Deposit of Fund Assets in U.S. Securities System . . . . . . . . . .7
2.11 Fund Assets Held in the Custodian's Direct
Paper System . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
2.12 Segregated Account . . . . . . . . . . . . . . . . . . . . . . . . .9
2.13 Ownership Certificates for Tax Purposes. . . . . . . . . . . . . . .9
2.14 Proxies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.15 Communications Relating to Portfolio
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3. Duties of the Custodian with Respect to Property of
the Fund Held Outside of the United States . . . . . . . . . . . . . . . 10
3.1 Appointment of Foreign Sub-Custodians. . . . . . . . . . . . . . . 10
3.2 Assets to be Held. . . . . . . . . . . . . . . . . . . . . . . . . 10
3.3 Foreign Securities Systems . . . . . . . . . . . . . . . . . . . . 11
3.4 Holding Securities . . . . . . . . . . . . . . . . . . . . . . . . 11
3.5 Agreements with Foreign Banking Institutions . . . . . . . . . . . 11
3.6 Access of Independent Accountants of the Fund. . . . . . . . . . . 11
3.7 Reports by Custodian . . . . . . . . . . . . . . . . . . . . . . . 11
3.8 Transactions in Foreign Custody Account. . . . . . . . . . . . . . 12
3.9 Liability of Foreign Sub-Custodians. . . . . . . . . . . . . . . . 12
3.10 Liability of Custodian . . . . . . . . . . . . . . . . . . . . . . 12
3.11 Reimbursement for Advances . . . . . . . . . . . . . . . . . . . . 13
3.12 Monitoring Responsibilities. . . . . . . . . . . . . . . . . . . . 13
3.13 Branches of U.S. Banks . . . . . . . . . . . . . . . . . . . . . . 13
<PAGE>
3.14 Tax Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4. Payments for Sales or Repurchases or Redemptions
of Shares of the Fund . . . . . . . . . . . . . . . . . . . . . . . . . 14
5. Proper Instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6. Actions Permitted Without Express Authority. . . . . . . . . . . . . . . 15
7. Evidence of Authority. . . . . . . . . . . . . . . . . . . . . . . . . . 15
8. Duties of Custodian With Respect to the Books of Account
and Calculation of Net Asset Value and Net Income. . . . . . . . . . . . 15
9. Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
10. Opinion of Fund's Independent Accountants . . . . . . . . . . . . . . . 16
11. Reports to Fund by Independent Public Accountants . . . . . . . . . . . 16
12. Compensation of Custodian. . . . . . . . . . . . . . . . . . . . . . . . 16
13. Responsibility of Custodian. . . . . . . . . . . . . . . . . . . . . . . 17
14. Effective Period, Termination and Amendment. . . . . . . . . . . . . . . 18
15. Successor Custodian. . . . . . . . . . . . . . . . . . . . . . . . . . . 19
16. Interpretive and Additional Provisions . . . . . . . . . . . . . . . . . 19
17. Additional Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
18. Massachusetts Law to Apply . . . . . . . . . . . . . . . . . . . . . . . 20
19. Prior Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
20. Shareholder Communications Election. . . . . . . . . . . . . . . . . . . 20
<PAGE>
CUSTODIAN CONTRACT
This Contract between SEI Institutional Investments Trust, a business
trust organized and existing under the laws of Massachusetts, having its
principal place of business at 680 East Swedesford Road, Wayne, Pennsylvania
hereinafter called the "Fund", and State Street Bank and Trust Company, a
Massachusetts trust company, having its principal place of business at 225
Franklin Street, Boston, Massachusetts, 02110, hereinafter called the
"Custodian",
WITNESSETH:
WHEREAS, the Fund is authorized to issue shares in separate series, with
each such series representing interests in a separate portfolio of securities
and other assets; and
WHEREAS, the Fund intends to initially offer shares in three series, the
International Fixed Income Fund, Emerging Markets Equity Fund and International
Equity Fund (such series together with all other series subsequently established
by the Fund and made subject to this Contract in accordance with paragraph 17,
being herein referred to as the "Portfolio(s)");
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
The Fund hereby employs the Custodian as the custodian of the assets of
the Portfolios of the Fund, including securities which the Fund, on behalf of
the applicable Portfolio desires to be held in places within the United States
("domestic securities") and securities it desires to be held outside the United
States ("foreign securities") pursuant to the provisions of the Declaration of
Trust. The Fund on behalf of the Portfolio(s) agrees to deliver to the Custodian
all securities and cash of the Portfolios, and all payments of income, payments
of principal or capital distributions received by it with respect to all
securities owned by the Portfolio(s) from time to time, and the cash
consideration received by it for such new or treasury shares of beneficial
interest of the Fund representing interests in the Portfolios, ("Shares") as may
be issued or sold from time to time. The Custodian shall not be responsible for
any property of a Portfolio held or received by the Portfolio and not delivered
to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Article 5),
the Custodian shall on behalf of the applicable Portfolio(s) from time to time
employ one or more sub-custodians, located in the United States but only in
accordance with an applicable vote by the Board of Trustees of the Fund on
behalf of the applicable Portfolio(s), and provided that the Custodian shall
have no more or less responsibility or liability to the Fund on account of any
actions or omissions of any sub-custodian so employed than any such
sub-custodian has to the Custodian. The Custodian may employ as sub-custodian
for the Fund's foreign securities on behalf of the applicable Portfolio(s) the
foreign banking institutions and foreign securities depositories designated in
Schedule A hereto but only in accordance with the provisions of Article 3.
<PAGE>
2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND HELD BY THE
CUSTODIAN IN THE UNITED STATES
2.1 HOLDING SECURITIES. The Custodian shall hold and physically segregate for
the account of each Portfolio all non-cash property, to be held by it in
the United States including all domestic securities owned by such
Portfolio, other than (a) securities which are maintained pursuant to
Section 2.10 in a clearing agency which acts as a securities depository
or in a book-entry system authorized by the U.S. Department of the
Treasury and certain federal agencies (each, a "U.S. Securities System")
and (b) commercial paper of an issuer for which State Street Bank and
Trust Company acts as issuing and paying agent ("Direct Paper") which is
deposited and/or maintained in the Direct Paper System of the Custodian
(the "Direct Paper System") pursuant to Section 2.11.
2.2 DELIVERY OF SECURITIES. The Custodian shall release and deliver domestic
securities owned by a Portfolio held by the Custodian or in a U.S.
Securities System account of the Custodian or in the Custodian's Direct
Paper book entry system account ("Direct Paper System Account") only upon
receipt of Proper Instructions from the Fund on behalf of the applicable
Portfolio, which may be continuing instructions when deemed appropriate
by the parties, and only in the following cases:
1) Upon sale of such securities for the account of the Portfolio and
receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Portfolio;
3) In the case of a sale effected through a U.S. Securities System, in
accordance with the provisions of Section 2.10 hereof;
4) To the depository agent in connection with tender or other similar
offers for securities of the Portfolio;
5) To the issuer thereof or its agent when such securities are called,
redeemed, retired or otherwise become payable; provided that, in
any such case, the cash or other consideration is to be delivered
to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the name of
the Portfolio or into the name of any nominee or nominees of the
Custodian or into the name or nominee name of any agent appointed
pursuant to Section 2.9 or into the name or nominee name of any
sub-custodian appointed pursuant to Article 1; or for exchange for
a different number of bonds, certificates or other evidence
representing the same aggregate face amount or number of units;
PROVIDED that, in any such case, the new securities are to be
delivered to the Custodian;
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7) Upon the sale of such securities for the account of the Portfolio,
to the broker or its clearing agent, against a receipt, for
examination in accordance with "street delivery" custom; provided
that in any such case, the Custodian shall have no responsibility
or liability for any loss arising from the delivery of such
securities prior to receiving payment for such securities except as
may arise from the Custodian's own negligence or willful
misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of
the securities of the issuer of such securities, or pursuant to
provisions for conversion contained in such securities, or pursuant
to any deposit agreement; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the Custodian;
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities; provided that, in
any such case, the new securities and cash, if any, are to be
delivered to the Custodian;
10) For delivery in connection with any loans of securities made by the
Portfolio, BUT ONLY against receipt of adequate collateral as
agreed upon from time to time by the Custodian and the Fund on
behalf of the Portfolio, which may be in the form of cash or
obligations issued by the United States government, its agencies or
instrumentalities, except that in connection with any loans for
which collateral is to be credited to the Custodian's account in
the book-entry system authorized by the U.S. Department of the
Treasury, the Custodian will not be held liable or responsible for
the delivery of securities owned by the Portfolio prior to the
receipt of such collateral;
11) For delivery as security in connection with any borrowings by the
Fund on behalf of the Portfolio requiring a pledge of assets by the
Fund on behalf of the Portfolio, BUT ONLY against receipt of
amounts borrowed;
12) For delivery in accordance with the provisions of any agreement
among the Fund on behalf of the Portfolio, the Custodian and a
broker-dealer registered under the Securities Exchange Act of 1934
(the "Exchange Act") and a member of The National Association of
Securities Dealers, Inc. ("NASD"), relating to compliance with
the rules of The Options Clearing Corporation and of any registered
national securities exchange, or of any similar organization or
organizations, regarding escrow or other arrangements in connection
with transactions by the Portfolio of the Fund;
13) For delivery in accordance with the provisions of any agreement
among the Fund on behalf of the Portfolio, the Custodian, and a
Futures Commission Merchant registered under the Commodity Exchange
Act, relating to compliance with the
3
<PAGE>
rules of the Commodity Futures Trading Commission and/or any
Contract Market, or any similar organization or organizations,
regarding account deposits in connection with transactions by the
Portfolio of the Fund;
14) Upon receipt of instructions from the transfer agent ("Transfer
Agent") for the Fund, for delivery to such Transfer Agent or to the
holders of shares in connection with distributions in kind, as may
be described from time to time in the currently effective
prospectus and statement of additional information of the Fund,
related to the Portfolio ("Prospectus"), in satisfaction of
requests by holders of Shares for repurchase or redemption; and
15) For any other proper corporate purpose, BUT ONLY upon receipt of,
in addition to Proper Instructions from the Fund on behalf of the
applicable Portfolio, a certified copy of a resolution of the Board
of Trustees or of the Executive Committee signed by an officer of
the Fund and certified by the Secretary or an Assistant Secretary,
specifying the securities of the Portfolio to be delivered, setting
forth the purpose for which such delivery is to be made, declaring
such purpose to be a proper corporate purpose, and naming the
person or persons to whom delivery of such securities shall be
made.
2.3 REGISTRATION OF SECURITIES. Domestic securities held by the Custodian
(other than bearer securities) shall be registered in the name of the
Portfolio or in the name of any nominee of the Fund on behalf of the
Portfolio or of any nominee of the Custodian which nominee shall be
assigned exclusively to the Portfolio, UNLESS the Fund has authorized in
writing the appointment of a nominee to be used in common with other
registered investment companies having the same investment adviser as the
Portfolio, or in the name or nominee name of any agent appointed pursuant
to Section 2.9 or in the name or nominee name of any sub-custodian
appointed pursuant to Article 1. All securities accepted by the Custodian
on behalf of the Portfolio under the terms of this Contract shall be in
"street name" or other good delivery form. If, however, the Fund directs
the Custodian to maintain securities in "street name", the Custodian
shall utilize its best efforts only to timely collect income due the Fund
on such securities and to notify the Fund on a best efforts basis only of
relevant corporate actions including, without limitation, pendency of
calls, maturities, tender or exchange offers.
2.4 BANK ACCOUNTS. The Custodian shall open and maintain a separate bank
account or accounts in the United States in the name of each Portfolio of
the Fund, subject only to draft or order by the Custodian acting pursuant
to the terms of this Contract, and shall hold in such account or
accounts, subject to the provisions hereof, all cash received by it from
or for the account of the Portfolio, other than cash maintained by the
Portfolio in a bank account established and used in accordance with Rule
17f-3 under the Investment Company Act of 1940. Funds held by the
Custodian for a Portfolio may be deposited by it to its credit as
Custodian in the Banking Department of the Custodian or in such other
banks or trust companies as it may in its discretion deem necessary or
desirable; PROVIDED, however, that
4
<PAGE>
every such bank or trust company shall be qualified to act as a custodian
under the Investment Company Act of 1940 and that each such bank or trust
company and the funds to be deposited with each such bank or trust
company shall on behalf of each applicable Portfolio be approved by vote
of a majority of the Board of Trustees of the Fund. Such funds shall be
deposited by the Custodian in its capacity as Custodian and shall be
withdrawable by the Custodian only in that capacity.
2.5 AVAILABILITY OF FEDERAL FUNDS. Upon mutual agreement between the Fund on
behalf of each applicable Portfolio and the Custodian, the Custodian
shall, upon the receipt of Proper Instructions from the Fund on behalf of
a Portfolio, make federal funds available to such Portfolio as of
specified times agreed upon from time to time by the Fund and the
Custodian in the amount of checks received in payment for Shares of such
Portfolio which are deposited into the Portfolio's account.
2.6 COLLECTION OF INCOME. Subject to the provisions of Section 2.3, the
Custodian shall collect on a timely basis all income and other payments
with respect to registered domestic securities held hereunder to which
each Portfolio shall be entitled either by law or pursuant to custom in
the securities business, and shall collect on a timely basis all income
and other payments with respect to bearer domestic securities if, on the
date of payment by the issuer, such securities are held by the Custodian
or its agent thereof and shall credit such income, as collected, to such
Portfolio's custodian account. Without limiting the generality of the
foregoing, the Custodian shall detach and present for payment all coupons
and other income items requiring presentation as and when they become due
and shall collect interest when due on securities held hereunder. Income
due each Portfolio on securities loaned pursuant to the provisions of
Section 2.2 (10) shall be the responsibility of the Fund. The Custodian
will have no duty or responsibility in connection therewith, other than
to provide the Fund with such information or data as may be necessary to
assist the Fund in arranging for the timely delivery to the Custodian of
the income to which the Portfolio is properly entitled.
2.7 PAYMENT OF FUND MONIES. Upon receipt of Proper Instructions from the Fund
on behalf of the applicable Portfolio, which may be continuing
instructions when deemed appropriate by the parties, the Custodian shall
pay out monies of a Portfolio in the following cases only:
1) Upon the purchase of domestic securities, options, futures
contracts or options on futures contracts for the account of the
Portfolio but only (a) against the delivery of such securities or
evidence of title to such options, futures contracts or options on
futures contracts to the Custodian (or any bank, banking firm or
trust company doing business in the United States or abroad which
is qualified under the Investment Company Act of 1940, as amended,
to act as a custodian and has been designated by the Custodian as
its agent for this purpose) registered in the name of the Portfolio
or in the name of a nominee of the Custodian referred to in Section
2.3 hereof or in proper form for transfer; (b) in the case of a
purchase effected through a U.S. Securities System, in accordance
with the conditions set forth in Section 2.10 hereof; (c) in the
case of a purchase involving the Direct Paper System, in
5
<PAGE>
accordance with the conditions set forth in Section 2.11; (d) in
the case of repurchase agreements entered into between the Fund on
behalf of the Portfolio and the Custodian, or another bank, or a
broker-dealer which is a member of NASD, (i) against delivery of
the securities either in certificate form or through an entry
crediting the Custodian's account at the Federal Reserve Bank with
such securities or (ii) against delivery of the receipt evidencing
purchase by the Portfolio of securities owned by the Custodian
along with written evidence of the agreement by the Custodian to
repurchase such securities from the Portfolio or (e) for transfer
to a time deposit account of the Fund in any bank, whether domestic
or foreign; such transfer may be effected prior to receipt of a
confirmation from a broker and/or the applicable bank pursuant to
Proper Instructions from the Fund as defined in Article 5;
2) In connection with conversion, exchange or surrender of securities
owned by the Portfolio as set forth in Section 2.2 hereof;
3) For the redemption or repurchase of Shares issued by the Portfolio
as set forth in Article 4 hereof;
4) For the payment of any expense or liability incurred by the
Portfolio, including but not limited to the following payments for
the account of the Portfolio: interest, taxes, management,
accounting, transfer agent and legal fees, and operating expenses
of the Fund whether or not such expenses are to be in whole or part
capitalized or treated as deferred expenses;
5) For the payment of any dividends on Shares of the Portfolio
declared pursuant to the governing documents of the Fund;
6) For payment of the amount of dividends received in respect of
securities sold short;
7) For any other proper purpose, BUT ONLY upon receipt of, in addition
to Proper Instructions from the Fund on behalf of the Portfolio, a
certified copy of a resolution of the Board of Trustees or of the
Executive Committee of the Fund signed by an officer of the Fund
and certified by its Secretary or an Assistant Secretary,
specifying the amount of such payment, setting forth the purpose
for which such payment is to be made, declaring such purpose to be
a proper purpose, and naming the person or persons to whom such
payment is to be made.
2.8 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASED.
Except as specifically stated otherwise in this Contract, in any and
every case where payment for purchase of domestic securities for the
account of a Portfolio is made by the Custodian in advance of receipt of
the securities purchased in the absence of specific written instructions
from the Fund on behalf of such Portfolio to so pay in advance, the
Custodian shall be absolutely
6
<PAGE>
liable to the Fund for such securities to the same extent as if the
securities had been received by the Custodian.
2.9 APPOINTMENT OF AGENTS. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the Investment Company Act of
1940, as amended, to act as a custodian, as its agent to carry out such
of the provisions of this Article 2 as the Custodian may from time to
time direct; PROVIDED, however, that the appointment of any agent shall
not relieve the Custodian of its responsibilities or liabilities
hereunder.
2.10 DEPOSIT OF FUND ASSETS IN U.S. SECURITIES SYSTEMS. The Custodian may
deposit and/or maintain securities owned by a Portfolio in a clearing
agency registered with the Securities and Exchange Commission under
Section 17A of the Securities Exchange Act of 1934, which acts as a
securities depository, or in the book-entry system authorized by the U.S.
Department of the Treasury and certain federal agencies, collectively
referred to herein as "U.S. Securities System" in accordance with
applicable Federal Reserve Board and Securities and Exchange Commission
rules and regulations, if any, and subject to the following provisions:
1) The Custodian may keep securities of the Portfolio in a U.S.
Securities System provided that such securities are represented in
an account ("Account") of the Custodian in the U.S. Securities
System which shall not include any assets of the Custodian other
than assets held as a fiduciary, custodian or otherwise for
customers;
2) The records of the Custodian with respect to securities of the
Portfolio which are maintained in a U.S. Securities System shall
identify by book-entry those securities belonging to the Portfolio;
3) The Custodian shall pay for securities purchased for the account of
the Portfolio upon (i) receipt of advice from the U.S. Securities
System that such securities have been transferred to the Account,
and (ii) the making of an entry on the records of the Custodian to
reflect such payment and transfer for the account of the Portfolio.
The Custodian shall transfer securities sold for the account of the
Portfolio upon (i) receipt of advice from the U.S. Securities
System that payment for such securities has been transferred to the
Account, and (ii) the making of an entry on the records of the
Custodian to reflect such transfer and payment for the account of
the portfolio. Copies of all advices from the U.S. Securities
System of transfers of securities for the account of the Portfolio
shall identify the Portfolio, be maintained for the Portfolio by
the Custodian and be provided to the Fund at its request. Upon
request, the Custodian shall furnish the Fund on behalf of the
Portfolio confirmation of each transfer to or from the account of
the Portfolio in the form of a written advice or notice and shall
furnish to the Fund on behalf of the Portfolio copies of daily
7
<PAGE>
transaction sheets reflecting each day's transactions in the U.S.
Securities System for the account of the Portfolio;
4) The Custodian shall provide the Fund for the Portfolio with any
report obtained by the Custodian on the U.S. Securities System's
accounting system, internal accounting control and procedures for
safeguarding securities deposited in the U.S. Securities System;
5) The Custodian shall have received from the Fund on behalf of the
Portfolio the initial or annual certificate, as the case may be,
required by Article 14 hereof;
6) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Fund for the benefit of the
Portfolio for any loss or damage to the Portfolio resulting from
use of the U.S. Securities System by reason of any negligence,
misfeasance or misconduct of the Custodian or any of its agents or
of any of its or their employees or from failure of the Custodian
or any such agent to enforce effectively such rights as it may have
against the U.S. Securities System; at the election of the Fund, it
shall be entitled to be subrogated to the rights of the Custodian
with respect to any claim against the U.S. Securities System or any
other person which the Custodian may have as a consequence of any
such loss or damage if and to the extent that the Portfolio has not
been made whole for any such loss or damage.
2.11 FUND ASSETS HELD IN THE CUSTODIAN'S DIRECT PAPER SYSTEM. The Custodian
may deposit and/or maintain securities owned by a Portfolio in the Direct
Paper System of the Custodian subject to the following provisions:
1) No transaction relating to securities in the Direct Paper System
will be effected in the absence of Proper Instructions from the
Fund on behalf of the Portfolio;
2) The Custodian may keep securities of the Portfolio in the Direct
Paper System only if such securities are represented in an account
("Account") of the Custodian in the Direct Paper System which shall
not include any assets of the Custodian other than assets held as a
fiduciary, custodian or otherwise for customers;
3) The records of the Custodian with respect to securities of the
Portfolio which are maintained in the Direct Paper System shall
identify by book-entry those securities belonging to the Portfolio;
4) The Custodian shall pay for securities purchased for the account of
the Portfolio upon the making of an entry on the records of the
Custodian to reflect such payment and transfer of securities to the
account of the Portfolio. The Custodian shall transfer securities
sold for the account of the Portfolio upon the making of an entry
8
<PAGE>
on the records of the Custodian to reflect such transfer and
receipt of payment for the account of the Portfolio;
5) The Custodian shall furnish the Fund on behalf of the Portfolio
confirmation of each transfer to or from the account of the
Portfolio, in the form of a written advice or notice, of Direct
Paper on the next business day following such transfer and shall
furnish to the Fund on behalf of the Portfolio copies of daily
transaction sheets reflecting each day's transaction in the U.S.
Securities System for the account of the Portfolio;
6) The Custodian shall provide the Fund on behalf of the Portfolio
with any report on its system of internal accounting control as the
Fund may reasonably request from time to time.
2.12 SEGREGATED ACCOUNT. The Custodian shall upon receipt of Proper
Instructions from the Fund on behalf of each applicable Portfolio
establish and maintain a segregated account or accounts for and on behalf
of each such Portfolio, into which account or accounts may be transferred
cash and/or securities, including securities maintained in an account by
the Custodian pursuant to Section 2.10 hereof, (i) in accordance with the
provisions of any agreement among the Fund on behalf of the Portfolio,
the Custodian and a broker-dealer registered under the Exchange Act and a
member of the NASD (or any futures commission merchant registered under
the Commodity Exchange Act), relating to compliance with the rules of The
Options Clearing Corporation and of any registered national securities
exchange (or the Commodity Futures Trading Commission or any registered
contract market), or of any similar organization or organizations,
regarding escrow or other arrangements in connection with transactions by
the Portfolio, (ii) for purposes of segregating cash or government
securities in connection with options purchased, sold or written by the
Portfolio or commodity futures contracts or options thereon purchased or
sold by the Portfolio, (iii) for the purposes of compliance by the
Portfolio with the procedures required by Investment Company Act Release
No. 10666, or any subsequent release or releases of the Securities and
Exchange Commission relating to the maintenance of segregated accounts by
registered investment companies and (iv) for other proper corporate
purposes, BUT ONLY, in the case of clause (iv), upon receipt of, in
addition to Proper Instructions from the Fund on behalf of the applicable
Portfolio, a certified copy of a resolution of the Board of Trustees or
of the Executive Committee signed by an officer of the Fund and certified
by the Secretary or an Assistant Secretary, setting forth the purpose or
purposes of such segregated account and declaring such purposes to be
proper corporate purposes.
2.13 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian shall execute
ownership and other certificates and affidavits for all federal and state
tax purposes in connection with receipt of income or other payments with
respect to domestic securities of each Portfolio held by it and in
connection with transfers of securities.
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2.14 PROXIES. The Custodian shall, with respect to the domestic securities
held hereunder, cause to be promptly executed by the registered holder of
such securities, if the securities are registered otherwise than in the
name of the Portfolio or a nominee of the Portfolio, all proxies, without
indication of the manner in which such proxies are to be voted, and shall
promptly deliver to the Portfolio such proxies, all proxy soliciting
materials and all notices relating to such securities.
2.15 COMMUNICATIONS RELATING TO PORTFOLIO SECURITIES. Subject to the
provisions of Section 2.3, the Custodian shall transmit promptly to the
Fund for each Portfolio all written information (including, without
limitation, pendency of calls and maturities of domestic securities and
expirations of rights in connection therewith and notices of exercise of
call and put options written by the Fund on behalf of the Portfolio and
the maturity of futures contracts purchased or sold by the Portfolio)
received by the Custodian from issuers of the securities being held for
the Portfolio. With respect to tender or exchange offers, the Custodian
shall transmit promptly to the Portfolio all written information received
by the Custodian from issuers of the securities whose tender or exchange
is sought and from the party (or his agents) making the tender or
exchange offer. If the Portfolio desires to take action with respect to
any tender offer, exchange offer or any other similar transaction, the
Portfolio shall notify the Custodian at least three business days prior
to the date on which the Custodian is to take such action.
3. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND HELD OUTSIDE
OF THE UNITED STATES
3.1 APPOINTMENT OF FOREIGN SUB-CUSTODIANS. The Fund hereby authorizes and
instructs the Custodian to employ as sub-custodians for the Portfolio's
securities and other assets maintained outside the United States the
foreign banking institutions and foreign securities depositories
designated on Schedule A hereto ("foreign sub-custodians"). Upon receipt
of "Proper Instructions", as defined in Section 5 of this Contract,
together with a certified resolution of the Fund's Board of Trustees, the
Custodian and the Fund may agree to amend Schedule A hereto from time to
time to designate additional foreign banking institutions and foreign
securities depositories to act as sub-custodian. Upon receipt of Proper
Instructions, the Fund may instruct the Custodian to cease the employment
of any one or more such sub-custodians for maintaining custody of the
Portfolio's assets.
3.2 ASSETS TO BE HELD. The Custodian shall limit the securities and other
assets maintained in the custody of the foreign sub-custodians to: (a)
"foreign securities", as defined in paragraph (c)(1) of Rule 17f-5 under
the Investment Company Act of 1940, and (b) cash and cash equivalents in
such amounts as the Custodian or the Fund may determine to be reasonably
necessary to effect the Portfolio's foreign securities transactions. The
Custodian shall identify on its books as belonging to the Fund, the
foreign securities of the Fund held by each foreign sub-custodian.
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3.3 FOREIGN SECURITIES SYSTEMS. Except as may otherwise be agreed upon in
writing by the Custodian and the Fund, assets of the Portfolios shall be
maintained in a clearing agency which acts as a securities depository or
in a book-entry system for the central handling of securities located
outside the United States (each a "Foreign Securities System") only
through arrangements implemented by the foreign banking institutions
serving as sub-custodians pursuant to the terms hereof (Foreign
Securities Systems and U.S. Securities Systems are collectively referred
to herein as the "Securities Systems"). Where possible, such arrangements
shall include entry into agreements containing the provisions set forth
in Section 3.5 hereof.
3.4 HOLDING SECURITIES. The Custodian may hold securities and other non-cash
property for all of its customers, including the Fund, with a foreign
sub-custodian in a single account that is identified as belonging to the
Custodian for the benefit of its customers, PROVIDED HOWEVER, that (i)
the records of the Custodian with respect to securities and other
non-cash property of the Fund which are maintained in such account shall
identify by book-entry those securities and other non-cash property
belonging to the Fund and (ii) the Custodian shall require that
securities and other non-cash property so held by the foreign
sub-custodian be held separately from any assets of the foreign
sub-custodian or of others.
3.5 AGREEMENTS WITH FOREIGN BANKING INSTITUTIONS. Each agreement with a
foreign banking institution shall provide that: (a) the assets of each
Portfolio will not be subject to any right, charge, security interest,
lien or claim of any kind in favor of the foreign banking institution or
its creditors or agent, except a claim of payment for their safe custody
or administration; (b) beneficial ownership for the assets of each
Portfolio will be freely transferable without the payment of money or
value other than for custody or administration; (c) adequate records will
be maintained identifying the assets as belonging to each applicable
Portfolio; (d) officers of or auditors employed by, or other
representatives of the Custodian, including to the extent permitted under
applicable law the independent public accountants for the Fund, will be
given access to the books and records of the foreign banking institution
relating to its actions under its agreement with the Custodian; and (e)
assets of the Portfolios held by the foreign sub-custodian will be
subject only to the instructions of the Custodian or its agents.
3.6 ACCESS OF INDEPENDENT ACCOUNTANTS OF THE FUND. Upon request of the Fund,
the Custodian will use its best efforts to arrange for the independent
accountants of the Fund to be afforded access to the books and records of
any foreign banking institution employed as a foreign sub-custodian
insofar as such books and records relate to the performance of such
foreign banking institution under its agreement with the Custodian.
3.7 REPORTS BY CUSTODIAN. The Custodian will supply to the Fund from time to
time, as mutually agreed upon, statements in respect of the securities
and other assets of the Portfolio(s) held by foreign sub-custodians,
including but not limited to an identification of entities having
possession of the Portfolio(s) securities and other assets and advices or
notifications of any transfers of securities to or from each custodial
account maintained by a
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foreign banking institution for the Custodian on behalf of each
applicable Portfolio indicating, as to securities acquired for a
Portfolio, the identity of the entity having physical possession of such
securities.
3.8 TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT. (a) Except as otherwise provided
in paragraph (b) of this Section 3.8, the provision of Sections 2.2 and
2.7 of this Contract shall apply, MUTATIS MUTANDIS to the foreign
securities of the Fund held outside the United States by foreign
sub-custodians.
(b) Notwithstanding any provision of this Contract to the contrary,
settlement and payment for securities received for the account of each
applicable Portfolio and delivery of securities maintained for the
account of each applicable Portfolio may be effected in accordance with
the customary established securities trading or securities processing
practices and procedures in the jurisdiction or market in which the
transaction occurs, including, without limitation, delivering securities
to the purchaser thereof or to a dealer therefor (or an agent for such
purchaser or dealer) against a receipt with the expectation of receiving
later payment for such securities from such purchaser or dealer.
(c) Securities maintained in the custody of a foreign sub-custodian may
be maintained in the name of such entity's nominee to the same extent as
set forth in Section 2.3 of this Contract, and the Fund agrees to hold
any such nominee harmless from any liability as a holder of record of
such securities.
3.9 LIABILITY OF FOREIGN SUB-CUSTODIANS. Each agreement pursuant to which the
Custodian employs a foreign banking institution as a foreign
sub-custodian shall require the institution to exercise reasonable care
in the performance of its duties and to indemnify, and hold harmless, the
Custodian and the Fund from and against any loss, damage, cost, expense,
liability or claim arising out of or in connection with the institution's
performance of such obligations. At the election of the Fund, it shall be
entitled to be subrogated to the rights of the Custodian with respect to
any claims against a foreign banking institution as a consequence of any
such loss, damage, cost, expense, liability or claim if and to the extent
that the Fund has not been made whole for any such loss, damage, cost,
expense, liability or claim.
3.10 LIABILITY OF CUSTODIAN. The Custodian shall be liable for the acts or
omissions of a foreign banking institution to the same extent as set
forth with respect to sub-custodians generally in this Contract and,
regardless of whether assets are maintained in the custody of a foreign
banking institution, a foreign securities depository or a branch of a
U.S. bank as contemplated by paragraph 3.13 hereof, the Custodian shall
not be liable for any loss, damage, cost, expense, liability or claim
resulting from nationalization, expropriation, currency restrictions, or
acts of war or terrorism or any loss where the sub-custodian has
otherwise exercised reasonable care. Notwithstanding the foregoing
provisions of this paragraph 3.10, in delegating custody duties to State
Street London Ltd., the Custodian shall not be relieved of any
responsibility to the Fund for any loss due to such delegation, except
such loss as may result from (a) political risk (including, but not
limited to, exchange
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control restrictions, confiscation, expropriation, nationalization,
insurrection, civil strife or armed hostilities) or (b) other losses
(excluding a bankruptcy or insolvency of State Street London Ltd. not
caused by political risk) due to Acts of God, nuclear incident or other
losses under circumstances where the Custodian and State Street London
Ltd. have exercised reasonable care.
3.11 REIMBURSEMENT FOR ADVANCES. If the Fund requires the Custodian to advance
cash or securities for any purpose for the benefit of a Portfolio
including the purchase or sale of foreign exchange or of contracts for
foreign exchange, or in the event that the Custodian or its nominee shall
incur or be assessed any taxes, charges, expenses, assessments, claims or
liabilities in connection with the performance of this Contract, except
such as may arise from its or its nominee's own negligent action,
negligent failure to act or willful misconduct, any property at any time
held for the account of the applicable Portfolio shall be security
therefor and should the Fund fail to repay the Custodian promptly, the
Custodian shall be entitled to utilize available cash and to dispose of
such Portfolio's assets to the extent necessary to obtain reimbursement.
3.12 MONITORING RESPONSIBILITIES. The Custodian shall furnish annually to the
Fund, during the month of June, information concerning the foreign
sub-custodians employed by the Custodian. Such information shall be
similar in kind and scope to that furnished to the Fund in connection
with the initial approval of this Contract. In addition, the Custodian
will promptly inform the Fund in the event that the Custodian learns of a
material adverse change in the financial condition of a foreign
sub-custodian or any material loss of the assets of the Fund or in the
case of any foreign sub-custodian not the subject of an exemptive order
from the Securities and Exchange Commission is notified by such foreign
sub-custodian that there appears to be a substantial likelihood that its
shareholders' equity will decline below $200 million (U.S. dollars or the
equivalent thereof) or that its shareholders' equity has declined below
$200 million (in each case computed in accordance with generally accepted
U.S. accounting principles).
3.13 BRANCHES OF U.S. BANKS. (a) Except as otherwise set forth in this
Contract, the provisions hereof shall not apply where the custody of the
Portfolios assets are maintained in a foreign branch of a banking
institution which is a "bank" as defined by Section 2(a)(5) of the
Investment Company Act of 1940 meeting the qualification set forth in
Section 26(a) of said Act. The appointment of any such branch as a
sub-custodian shall be governed by paragraph 1 of this Contract.
(b) Cash held for each Portfolio of the Fund in the United Kingdom shall
be maintained in an interest bearing account established for the Fund
with the Custodian's London branch, which account shall be subject to the
direction of the Custodian, State Street London Ltd. or both.
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3.14 TAX LAW. The Custodian shall have no responsibility or liability for any
obligations now or hereafter imposed on the Fund or the Custodian as
custodian of the Fund by the tax law of the United States of America or
any state or political subdivision thereof. It shall be the
responsibility of the Fund to notify the Custodian of the obligations
imposed on the Fund or the Custodian as custodian of the Fund by the tax
law of jurisdictions other than those mentioned in the above sentence,
including responsibility for withholding and other taxes, assessments or
other governmental charges, certifications and governmental reporting.
The sole responsibility of the Custodian with regard to such tax law
shall be to use reasonable efforts to assist the Fund with respect to any
claim for exemption or refund under the tax law of jurisdictions for
which the Fund has provided such information.
4. PAYMENTS FOR SALES OR REPURCHASES OR REDEMPTIONS OF SHARES OF THE FUND
The Custodian shall receive from the distributor for the Shares or from
the Transfer Agent of the Fund and deposit into the account of the appropriate
Portfolio such payments as are received for Shares of that Portfolio issued or
sold from time to time by the Fund. The Custodian will provide timely
notification to the Fund on behalf of each such Portfolio and the Transfer Agent
of any receipt by it of payments for Shares of such Portfolio.
From such funds as may be available for the purpose but subject to the
limitations of the Declaration of Trust and any applicable votes of the Board of
Trustees of the Fund pursuant thereto, the Custodian shall, upon receipt of
instructions from the Transfer Agent, make funds available for payment to
holders of Shares who have delivered to the Transfer Agent a request for
redemption or repurchase of their Shares. In connection with the redemption or
repurchase of Shares of a Portfolio, the Custodian is authorized upon receipt of
instructions from the Transfer Agent to wire funds to or through a commercial
bank designated by the redeeming shareholders. In connection with the redemption
or repurchase of Shares of the Fund, the Custodian shall honor checks drawn on
the Custodian by a holder of Shares, which checks have been furnished by the
Fund to the holder of Shares, when presented to the Custodian in accordance with
such procedures and controls as are mutually agreed upon from time to time
between the Fund and the Custodian.
5. PROPER INSTRUCTIONS
Proper Instructions as used throughout this Contract means a writing
signed or initialled by one or more person or persons as the Board of Trustees
shall have from time to time authorized. Each such writing shall set forth the
specific transaction or type of transaction involved, including a specific
statement of the purpose for which such action is requested. Oral instructions
will be considered Proper Instructions if the Custodian reasonably believes
them to have been given by a person authorized to give such instructions with
respect to the transaction involved. The Fund shall cause all oral
instructions to be confirmed in writing. Upon receipt of a certificate of the
Secretary or an Assistant Secretary as to the authorization by the Board of
Trustees of the Fund accompanied by a detailed description of procedures
approved by the Board of Trustees, Proper Instructions may include
communications effected directly between electro-mechanical or electronic
devices provided that the Board of Trustees and the Custodian are satisfied
that such procedures afford
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adequate safeguards for the Portfolios' assets. For purposes of this Section,
Proper Instructions shall include instructions received by the Custodian
pursuant to any three-party agreement which requires a segregated asset account
in accordance with Section 2.12.
6. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY
The Custodian may in its discretion, without express authority from the
Fund on behalf of each applicable Portfolio:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this
Contract, PROVIDED that all such payments shall be accounted for to
the Fund on behalf of the Portfolio;
2) surrender securities in temporary form for securities in definitive
form;
3) endorse for collection, in the name of the Portfolio, checks,
drafts and other negotiable instruments; and
4) in general, attend to all non-discretionary details in connection
with the sale, exchange, substitution, purchase, transfer and other
dealings with the securities and property of the Portfolio except
as otherwise directed by the Board of Trustees of the Fund.
7. EVIDENCE OF AUTHORITY
The Custodian shall be protected in acting upon any instructions, notice,
request, consent, certificate or other instrument or paper believed by it to be
genuine and to have been properly executed by or on behalf of the Fund. The
Custodian may receive and accept a certified copy of a vote of the Board of
Trustees of the Fund as conclusive evidence (a) of the authority of any person
to act in accordance with such vote or (b) of any determination or of any
action by the Board of Trustees pursuant to the Declaration of Trust as
described in such vote, and such vote may be considered as in full force and
effect until receipt by the Custodian of written notice to the contrary.
8. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT AND CALCULATION
OF NET ASSET VALUE AND NET INCOME
The Custodian shall cooperate with and supply necessary information to
the entity or entities appointed by the Board of Trustees of the Fund to keep
the books of account of each Portfolio and/or compute the net asset value per
share of the outstanding shares of each Portfolio or, if directed in writing to
do so by the Fund on behalf of the Portfolio, shall itself keep such books of
account and/or compute such net asset value per share. If so directed, the
Custodian shall also calculate daily the net income of the Portfolio as
described in the Fund's currently effective prospectus related to such Portfolio
and shall advise the Fund and the Transfer Agent daily of the total amounts of
such net income and, if instructed in writing by an officer of the Fund to do
so,
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shall advise the Transfer Agent periodically of the division of such net income
among its various components. The calculations of the net asset value per share
and the daily income of each Portfolio shall be made at the time or times
described from time to time in the Fund's currently effective prospectus related
to such Portfolio.
9. RECORDS
The Custodian shall with respect to each Portfolio create and maintain
all records relating to its activities and obligations under this Contract in
such manner as will meet the obligations of the Fund under the Investment
Company Act of 1940, with particular attention to Section 31 thereof and
Rules 31a-1 and 31a-2 thereunder. All such records shall be the property of
the Fund and shall at all times during the regular business hours of the
Custodian be open for inspection by duly authorized officers, employees or
agents of the Fund and employees and agents of the Securities and Exchange
Commission. The Custodian shall, at the Fund's request, supply the Fund with
a tabulation of securities owned by each Portfolio and held by the Custodian
and shall, when requested to do so by the Fund and for such compensation as
shall be agreed upon between the Fund and the Custodian, include certificate
numbers in such tabulations.
10. OPINION OF FUND'S INDEPENDENT ACCOUNTANT
The Custodian shall take all reasonable action, as the Fund on behalf of
each applicable Portfolio may from time to time request, to obtain from year to
year favorable opinions from the Fund's independent accountants with respect to
its activities hereunder in connection with the preparation of the Fund's Form
N-1A,, and Form N-SAR or other annual reports to the Securities and Exchange
Commission and with respect to any other requirements of such Commission.
11. REPORTS TO FUND BY INDEPENDENT PUBLIC ACCOUNTANTS
The Custodian shall provide the Fund, on behalf of each of the Portfolios
at such times as the Fund may reasonably require, with reports by independent
public accountants on the accounting system, internal accounting control and
procedures for safeguarding securities, futures contracts and options on futures
contracts, including securities deposited and/or maintained in a Securities
System, relating to the services provided by the Custodian under this Contract;
such reports, shall be of sufficient scope and in sufficient detail, as may
reasonably be required by the Fund to provide reasonable assurance that any
material inadequacies would be disclosed by such examination, and, if there are
no such inadequacies, the reports shall so state.
12. COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between the
Fund on behalf of each applicable Portfolio and the Custodian.
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13. RESPONSIBILITY OF CUSTODIAN
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Contract and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties,
including any futures commission merchant acting pursuant to the terms of a
three-party futures or options agreement. The Custodian shall be held to the
exercise of reasonable care in carrying out the provisions of this Contract, but
shall be kept indemnified by and shall be without liability to the Fund for any
action taken or omitted by it in good faith without negligence. It shall be
entitled to rely on and may act upon advice of counsel (who may be counsel for
the Fund) on all matters, and shall be without liability for any action
reasonably taken or omitted pursuant to such advice.
Except as may arise from the Custodian's own negligence or willful
misconduct or the negligence or willful misconduct of a sub-custodian or agent,
the Custodian shall be without liability to the Fund for any loss, liability,
claim or expense resulting from or caused by; (i) events or circumstances beyond
the reasonable control of the Custodian or any sub-custodian or Securities
System or any agent or nominee of any of the foregoing, including, without
limitation, nationalization or expropriation, imposition of currency controls or
restrictions, the interruption, suspension or restriction of trading on or the
closure of any securities market, power or other mechanical or technological
failures or interruptions, computer viruses or communications disruptions, acts
of war or terrorism, riots, revolutions, work stoppages, natural disasters or
other similar events or acts; (ii) errors by the Fund or the Investment Advisor
in their instructions to the Custodian provided such instructions have been in
accordance with this Contract; (iii) the insolvency of or acts or omissions by a
Securities System; (iv) any delay or failure of any broker, agent or
intermediary, central bank or other commercially prevalent payment or clearing
system to deliver to the Custodian's sub-custodian or agent securities purchased
or in the remittance or payment made in connection with securities sold; (v) any
delay or failure of any company, corporation, or other body in charge or
registering or transferring securities in the name of the Custodian, the Fund,
the Custodian's sub-custodians, nominees or agents or any consequential losses
arising out of such delay or failure to transfer such securities including
non-receipt of bonus, dividends and rights and other accretions or benefits;
(vi) delays or inability to perform its duties due to any disorder in market
infrastructure with respect to any particular security or Securities System; and
(vii) any provision of any present or future law or regulation or order of the
United States of America, or any state thereof, or any other country, or
political subdivision thereof or of any court of competent jurisdiction.
The Custodian shall be liable for the acts or omissions of a foreign
banking institution to the same extent as set forth with respect to
sub-custodians generally in this Contract.
If the Fund on behalf of the Portfolio requires the Custodian to take any
action with respect to securities, which action involves the payment of money or
which action may, in the opinion of the Custodian, result in the Custodian or
its nominee assigned to the Fund or the Portfolio being
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liable for the payment of money or incurring liability of some other form, the
Fund on behalf of the Portfolio, as a prerequisite to requiring the Custodian to
take such action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
If the Fund requires the Custodian, its affiliates, subsidiaries or
agents, to advance cash or securities for any purpose (including but not limited
to securities settlements, foreign exchange contracts and assumed settlement) or
in the event that the Custodian or its nominee shall incur or be assessed any
taxes, charges, expenses, assessments, claims or liabilities in connection with
the performance of this Contract, except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful misconduct,
any property at any time held for the account of the applicable Portfolio shall
be security therefor and should the Fund fail to repay the Custodian promptly,
the Custodian shall be entitled to utilize available cash and to dispose of such
Portfolio's assets to the extent necessary to obtain reimbursement.
In no event shall the Custodian be liable for indirect, special or
consequential damages.
14. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT
This Contract shall become effective as of its execution, shall continue
in full force and effect until terminated as hereinafter provided, may be
amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
than thirty (30) days after the date of such delivery or mailing; PROVIDED,
however that the Custodian shall not with respect to a Portfolio act under
Section 2.10 hereof in the absence of receipt of an initial certificate of the
Secretary or an Assistant Secretary that the Board of Trustees of the Fund has
approved the initial use of a particular Securities System by such Portfolio, as
required by Rule 17f-4 under the Investment Company Act of 1940, as amended and
that the Custodian shall not with respect to a Portfolio act under Section 2.11
hereof in the absence of receipt of an initial certificate of the Secretary or
an Assistant Secretary that the Board of Trustees has approved the initial use
of the Direct Paper System by such Portfolio; PROVIDED FURTHER, however, that
the Fund shall not amend or terminate this Contract in contravention of any
applicable federal or state regulations, or any provision of the Declaration of
Trust, and further provided, that the Fund on behalf of one or more of the
Portfolios may at any time by action of its Board of Trustees (i) substitute
another bank or trust company for the Custodian by giving notice as described
above to the Custodian, or (ii) immediately terminate this Contract in the event
of the appointment of a conservator or receiver for the Custodian by the
Comptroller of the Currency or upon the happening of a like event at the
direction of an appropriate regulatory agency or court of competent
jurisdiction.
Upon termination of the Contract, the Fund on behalf of each applicable
Portfolio shall pay to the Custodian such compensation as may be due as of the
date of such termination and shall likewise reimburse the Custodian for its
costs, expenses and disbursements.
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15. SUCCESSOR CUSTODIAN
If a successor custodian for the Fund, of one or more of the Portfolios
shall be appointed by the Board of Trustees of the Fund, the Custodian shall,
upon termination, deliver to such successor custodian at the office of the
Custodian, duly endorsed and in the form for transfer, all securities of each
applicable Portfolio then held by it hereunder and shall transfer to an account
of the successor custodian all of the securities of each such Portfolio held in
a Securities System.
If no such successor custodian shall be appointed, the Custodian shall,
in like manner, upon receipt of a certified copy of a vote of the Board of
Trustees of the Fund, deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Trustees shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or trust
company, which is a "bank" as defined in the Investment Company Act of 1940,
doing business in Boston, Massachusetts, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $25,000,000, all securities, funds and other
properties held by the Custodian on behalf of each applicable Portfolio and all
instruments held by the Custodian relative thereto and all other property held
by it under this Contract on behalf of each applicable Portfolio and to transfer
to an account of such successor custodian all of the securities of each such
Portfolio held in any Securities System. Thereafter, such bank or trust company
shall be the successor of the Custodian under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of the vote referred to or of
the Board of Trustees to appoint a successor custodian, the Custodian shall be
entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.
16. INTERPRETIVE AND ADDITIONAL PROVISIONS
In connection with the operation of this Contract, the Custodian and the
Fund on behalf of each of the Portfolios, may from time to time agree on such
provisions interpretive of or in addition to the provisions of this Contract as
may in their joint opinion be consistent with the general tenor of this
Contract. Any such interpretive or additional provisions shall be in a writing
signed by both parties and shall be annexed hereto, PROVIDED that no such
interpretive or additional provisions shall contravene any applicable federal or
state regulations or any provision of the Declaration of Trust of the Fund. No
interpretive or additional provisions made as provided in the preceding sentence
shall be deemed to be an amendment of this Contract.
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17. ADDITIONAL FUNDS
In the event that the Fund establishes one or more series of Shares in
addition to the International Fixed Income Fund, Emerging Markets Equity Fund
and International Equity Fund with respect to which it desires to have the
Custodian render services as custodian under the terms hereof, it shall so
notify the Custodian in writing, and if the Custodian agrees in writing to
provide such services, such series of Shares shall become a Portfolio hereunder.
18. MASSACHUSETTS LAW TO APPLY
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The Commonwealth of Massachusetts.
19. PRIOR CONTRACTS
This Contract supersedes and terminates, as of the date hereof, all prior
contracts between the Fund on behalf of each of the Portfolios and the Custodian
relating to the custody of the Fund's assets.
20. SHAREHOLDER COMMUNICATIONS ELECTION
Securities and Exchange Commission Rule 14b-2 requires banks which hold
securities for the account of customers to respond to requests by issuers of
securities for the names, addresses and holdings of beneficial owners of
securities of that issuer held by the bank unless the beneficial owner has
expressly objected to disclosure of this information. In order to comply with
the rule, the Custodian needs the Fund to indicate whether it authorizes the
Custodian to provide the Fund's name, address, and share position to requesting
companies whose securities the Fund owns. If the Fund tells the Custodian "no",
the Custodian will not provide this information to requesting companies. If the
Fund tells the Custodian "yes" or does not check either "yes" or "no" below, the
Custodian is required by the rule to treat the Fund as consenting to disclosure
of this information for all securities owned by the Fund or any funds or
accounts established by the Fund. For the Fund's protection, the Rule prohibits
the requesting company from using the Fund's name and address for any purpose
other than corporate communications. Please indicate below whether the Fund
consents or objects by checking one of the alternatives below.
YES [ ] The Custodian is authorized to release the Fund's name,
address, and share positions.
NO [ ] The Custodian is not authorized to release the Fund's name,
address, and share positions.
20
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the 1st day of June, 1996.
ATTEST SEI INSTITUTIONAL INVESTMENTS TRUST
By: Signature Appears Here
- ------------------------------ --------------------------------
ATTEST STATE STREET BANK AND TRUST COMPANY
Signature Appears Here By: Signature Appears Here
- ------------------------------ --------------------------------
Executive Vice President
<PAGE>
SCHEDULE A
The following foreign banking institutions and foreign securities
depositories have been approved by the Board of Trustees of SEI Institutional
Investments Trust for use as sub-custodians for the Fund's securities and other
assets:
(Insert banks and securities depositories)
Certified:
- -------------------------
Fund's Authorized Officer
Date:
--------------------
<PAGE>
ADMINISTRATION AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
THIS AGREEMENT is made as of this 14th day of June, 1996, by and between
SEI Institutional Investments Trust, a Massachusetts business trust (the
"Trust"), and SEI Financial Management Corporation (the "Administrator"), a
Delaware Corporation.
WHEREAS, the Trust is an open-end diversified management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), consisting of several series of shares of Common Stock; and
WHEREAS, the Trust desires the Administrator to provide, and the
Administrator is willing to provide, management and administrative services to
such portfolios of the Trust as the Trust and the Administrator may agree on
("Portfolios") and as listed on the schedules attached hereto ("Schedules") and
made a part of this Agreement, on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the promises and the covenants
hereinafter contained, the Trust and the Administrator hereby agree as follows:
ARTICLE 1. RETENTION OF THE ADMINISTRATOR. The Trust hereby retains the
Administrator to act as the administrator of the Portfolios and to furnish the
Portfolios with the management and administrative services as set forth in
Article 2 below. The Administrator hereby accepts such employment to perform the
duties set forth below.
The Administrator shall, for all purposes herein, be deemed to be an
independent contractor and, unless otherwise expressly provided or authorized,
shall have no authority to act for or represent the Trust in any way and shall
not be deemed an agent of the Trust.
ARTICLE 2. ADMINISTRATIVE AND ACCOUNTING SERVICES. The Administrator shall
perform or supervise the performance by others of other administrative services
in connection with the operations of the Portfolios, and, on behalf of the
Trust, will investigate, assist in the selection of and conduct relations with
custodians, depositories, accountants, legal counsel, underwriters, brokers and
dealers, corporate fiduciaries, insurers, banks and persons in any other
capacity deemed to be necessary or desirable for the Portfolios' operations. The
Administrator shall provide the Trustees of the Trust with such reports
regarding investment performance and compliance with investment policies and
applicable laws, rules and regulations as they may reasonably request but shall
have no responsibility for supervising the performance by any investment adviser
or sub-adviser of its responsibilities. The Administrator may appoint a
sub-administrator to perform certain of the services to be performed by the
Administrator hereunder.
The Administrator shall provide the Trust with administrative services,
regulatory reporting, fund accounting and related portfolio accounting services,
all necessary office space, equipment, personnel, compensation and facilities
(including facilities for Shareholders' and Trustees' meetings) for handling the
affairs of the Portfolios and such other services as the Trustees may, from time
to time, reasonably request and the Administrator shall, from time to time,
reasonably determine to be necessary to perform its obligations under this
Agreement. In addition, at the request of the Trust's Board of Trustees (the
"Trustees"), the Administrator shall make reports to the Trustees concerning the
performance of its obligations hereunder.
1
<PAGE>
Without limiting the generality of the foregoing, the Administrator shall:
(A) calculate contractual Trust expenses and control all disbursements for
the Trust, and as appropriate compute the Trust's yields, total
return, expense ratios, portfolio turnover rate and, if required,
portfolio average dollar-weighed maturity;
(B) assist Trust counsel with the preparation of prospectuses, statements
of additional information, registration statements, and proxy
materials;
(C) prepare such reports, applications and documents (including reports
regarding the sale and redemption of Shares as may be required in
order to comply with Federal and state securities law) as may be
necessary or desirable to register the Trust's shares with state
securities authorities, monitor sale of Trust shares for compliance
with state securities laws and file with the appropriate state
securities authorities the registration statements and reports for the
Trust and the Trust's shares and all amendments thereto, as may be
necessary or convenient to register and keep effective the Trust and
the Trust's shares with state securities authorities to enable the
Trust to make a continuous offering of its shares;
(D) develop and prepare communications to shareholders, including the
annual report to shareholders, coordinate mailing prospectuses,
notices, proxy statements, proxies and other reports to Trust
shareholders, and supervise and facilitate the solicitation of proxies
solicited by the Trust for all shareholder meetings, including
tabulation process for shareholder meetings;
(E) coordinate with Trust counsel the preparation and negotiation of, and
administer contracts on behalf of the Trust with, among others, the
Trust's investment adviser, distributor, custodian, and transfer
agent;
(F) maintain the Trust's general ledger and prepare the Trust's financial
statements, including expense accruals and payments, determine the net
asset value of the Trust's assets and of the Trust's shares, and
supervise the Trust's transfer agent with respect to the payment of
dividends and other distributions to shareholders;
(G) calculate performance data of the Trust and its portfolios for
dissemination to information services covering the investment company
industry;
(H) coordinate and supervise the preparation and filing of the Trust's tax
returns;
(I) examine and review the operations and performance of the various
organizations providing services to the Trust or any Portfolio of the
Trust, including, without limitation, the Trust's investment adviser,
distributor, custodian, transfer agent, outside legal counsel and
independent public accountants, and at the request of the Trustees,
report to the Trustees on the performance of organizations;
(J) assist with the layout and printing of publicly disseminated
prospectuses and assist with and coordinate layout and printing of the
Trust's semi-annual and annual reports to shareholders;
2
<PAGE>
(K) provide internal legal and administrative services as requested by the
Trust from time to time;
(L) assist with the design, development, and operation of the Trust,
including new portfolio and class investment objectives, policies and
structure;
(M) provide individuals acceptable to the Trustees for nomination,
appointment, or election as officers of the Trust, who will be
responsible for the management of certain of the Trust's affairs as
determined by the Trustees;
(N) advise the Trust and its Trustees on matters concerning the Trust and
its affairs;
(O) obtain and keep in effect fidelity bonds and directors and
officers/errors and omissions insurance policies for the Trust in
accordance with the requirements of Rules 17g-1 and 17d-1(7) under the
1940 Act as such bonds and policies are approved by the Trust's Board
of Trustees;
(P) monitor and advise the Trust and its Portfolios on their registered
investment company status under the Internal Revenue Code of 1986, as
amended;
(Q) perform all administrative services and functions of the Trust and
each Portfolio to the extent administrative services and functions are
not provided to the Trust or such Portfolio pursuant to the Trust's or
such Portfolio's investment advisory agreement, distribution
agreement, custodian agreement and transfer agent agreement;
(R) furnish advice and recommendations with respect to other aspects of
the business and affairs of the Portfolios as the Trust and the
Administrator shall determine desirable; and
(S) prepare and file with the SEC the semi-annual report for the Trust on
Form N-SAR and all required notices pursuant to Rule 24f-2.
Also, the Administrator will perform other services for the Trust as agreed from
time to time, including, but not limited to performing internal audit
examinations; mailing the annual reports of the Portfolios; preparing an annual
list of shareholders; and mailing notices of shareholders' meetings, proxies and
proxy statements, for all of which the Trust will pay the Administrator's
out-of-pocket expenses.
ARTICLE 3. ALLOCATION OF CHARGES AND EXPENSES.
(A) THE ADMINISTRATOR. The Administrator shall furnish at its own expense
the executive, supervisory and clerical personnel necessary to perform its
obligations under this Agreement. The Administrator shall also provide the items
which it is obligated to provide under this Agreement, and shall pay all
compensation, if any, of officers of the Trust as well as all Trustees of the
Trust who are affiliated persons of the Administrator or any affiliated
corporation of the Administrator; provided, however, that unless otherwise
specifically provided, the Administrator shall not be obligated to pay the
compensation of any employee of the Trust retained by the Trustees of the Trust
to perform services on behalf of the Trust.
3
<PAGE>
(B) THE TRUST. The Trust assumes and shall pay or cause to be paid all
other expenses of the Trust not otherwise allocated herein, including, without
limitation, organizational costs, taxes, expenses for legal and auditing
services, the expenses of preparing (including typesetting), printing and
mailing reports, prospectuses, statements of additional information, proxy
solicitation material and notices to existing Shareholders, all expenses
incurred in connection with issuing and redeeming Shares, the costs of custodial
services, the cost of initial and ongoing registration of the Shares under
Federal and state securities laws, fees and out-of-pocket expenses of Trustees
who are not affiliated persons of the Administrator or the investment adviser to
the Trust or any affiliated corporation of the Administrator or the investment
Adviser, the costs of Trustees' meetings, insurance, interest, brokerage costs,
litigation and other extraordinary or nonrecurring expenses, and all fees and
charges of investment advisers to the Trust.
ARTICLE 4. COMPENSATION OF THE ADMINISTRATOR.
(A) ADMINISTRATION FEE. For the services to be rendered, the facilities
furnished and the expenses assumed by the Administrator pursuant to this
Agreement, the Trust shall pay to the Administrator compensation at an annual
rate specified in the Schedules. Such compensation shall be calculated and
accrued daily, and paid to the Administrator monthly.
If this Agreement becomes effective subsequent to the first day of a month
or terminates before the last day of a month, the Administrator's compensation
for that part of the month in which this Agreement is in effect shall be
prorated in a manner consistent with the calculation of the fees as set forth
above. Payment of the Administrator's compensation for the preceding month shall
be made promptly.
(B) COMPENSATION FROM TRANSACTIONS. The Trust hereby authorizes any entity
or person associated with the Administrator which is a member of a national
securities exchange to effect any transaction on the exchange for the account of
the Trust which is permitted by Section 11 (a) of the Securities Exchange Act of
1934 and Rule 11a2-2(T) thereunder, and the Trust hereby consents to the
retention of compensation for such transactions in accordance with Rule
11a2-2(T) (a) (2) (iv).
(C) SURVIVAL OF COMPENSATION RATES. All rights of compensation under this
Agreement for services performed as of the termination date shall survive the
termination of this Agreement.
ARTICLE 5. LIMITATION OF LIABILITY OF THE ADMINISTRATOR. The duties of the
Administrator shall be confined to those expressly set forth herein, and no
implied duties are assumed by or may be asserted against the Administrator
hereunder. The Administrator shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any investment or for any act or
omission in carrying out its duties hereunder, except a loss resulting from
willful misfeasance, bad faith or negligence in the performance of its duties,
or by reason of reckless disregard of its obligations and duties hereunder,
except as may otherwise be provided under provisions of applicable law which
cannot be waived or modified hereby. (As used in this Article 5, the term
"Administrator" shall include directors, officers, employees and other agents of
the Administrator as well as that corporation itself..)
So long as the Administrator, or its agents, acts in good faith and with
due diligence and without negligence, the Trust assumes full responsibility and
shall indemnify the Administrator and hold it harmless from and against any and
all actions, suits and claims, whether groundless or otherwise, and from and
against any and all losses, damages, costs, charges, reasonable counsel fees and
disbursements, payments, expenses and liabilities
4
<PAGE>
(including reasonable investigation expenses) arising directly or indirectly out
of said administration, transfer agency, and dividend disbursing relationships
to the Trust or any other service rendered to the Trust hereunder. The indemnity
and defense provisions set forth herein shall indefinitely survive the
termination of this Agreement.
The rights hereunder shall include the right to reasonable advances of
defense expenses in the event of any pending or threatened litigation with
respect to which indemnification hereunder may ultimately be merited. In order
that the indemnification provision contained herein shall apply, however, it is
understood that if in any case the Trust may be asked to indemnify or hold the
Administrator harmless, the Trust shall be fully and promptly advised of all
pertinent facts concerning the situation in question, and it is further
understood that the Administrator will use all reasonable care to identify and
notify the Trust promptly concerning any situation which presents or appears
likely to present the probability of such a claim for indemnification against
the Trust, but failure to do so in good faith shall not affect the rights
hereunder.
The Trust shall be entitled to participate at its own expense or, if it so
elects, to assume the defense of any suit brought to enforce any claims subject
to this indemnity provision. If the Trust elects to assume the defense of any
such claim, the defense shall be conducted by counsel chosen by the Trust and
satisfactory to the Administrator, whose approval shall not be unreasonably
withheld. In the event that the Trust elects to assume the defense of any suit
and retain counsel, the Administrator shall bear the fees and expenses of any
additional counsel retained by it. If the Trust does not elect to assume the
defense of a suit, it will reimburse the Administrator for the reasonable fees
and expenses of any counsel retained by the Administrator.
The Administrator may apply to the Trust at any time for instructions and
may consult counsel for the Trust or its own counsel and with accountants and
other experts with respect to any matter arising in connection with the
Administrator's duties, and the Administrator shall not be liable or accountable
for any action taken or omitted by it in good faith in accordance with such
instruction or with the opinion of such counsel, accountants or other experts.
Also, the Administrator shall be protected in acting upon any document
which it reasonably believes to be genuine and to have been signed or presented
by the proper person or persons. Nor shall the Administrator be held to have
notice of any change of authority of any officers, employee or agent of the
Trust until receipt of written notice thereof from the Trust.
ARTICLE 6. ACTIVITIES OF THE ADMINISTRATOR. The services of the
Administrator rendered to the Trust are not to be deemed to be exclusive. The
Administrator is free to render such services to others and to have other
businesses and interests. It is understood that Trustees, officers, employees
and Shareholders of the Trust are or may be or become interested in the
Administrator, as directors, officers, employees and shareholders or otherwise
and that directors, officers, employees and shareholders of the Administrator
and its counsel are or may be or become similarly interested in the Trust, and
that the Administrator may be or become interested in the Trust as a Shareholder
or otherwise.
ARTICLE 7. CONFIDENTIALITY. The Administrator agrees on behalf of itself
and its employees to treat confidentially all records and other information
relative to the Trust and its prior, present or potential Shareholders and
relative to the Adviser and its prior, present or potential customers, except,
after prior notification to and approval in writing by the Trust, which approval
shall not be unreasonably withheld and may not be withheld where the
Administrator may be exposed to civil or criminal contempt proceedings for
failure to
5
<PAGE>
comply, when requested to divulge such information by duly constituted
authorities, or when so requested by the Trust.
ARTICLE 8. EQUIPMENT FAILURES. In the event of equipment failures beyond
the Administrator's control, the Administrator shall, at no additional expense
to the Trust, take reasonable steps to minimize service interruptions but shall
have no liability with respect thereto. The Administrator shall develop and
maintain a plan for recovery from equipment failures which may include
contractual arrangements with appropriate parties making reasonable provision
for emergency use of electronic data processing equipment to the extent
appropriate equipment is available.
ARTICLE 9. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS. The
Administrator undertakes to comply with all applicable requirements of the 1933
Act, the 1934 Act, the 1940 Act and any laws, rules and regulations of
governmental authorities having jurisdiction with respect to the duties to be
performed by the Administrator hereunder.
ARTICLE 10. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement
shall become effective on the date set forth in the Schedules and shall remain
in effect for the initial term of the Agreement (the "Initial Term") and each
renewal term thereof (each, a "Renewal Term"), each as set forth in the
Schedules, unless terminated in accordance with the provisions of this Article
10. This Agreement may be terminated only: (a) by the mutual written agreement
of the parties; (b) by either party hereto on 90 days' written notice, as of the
end of the Initial Term or the end of any Renewal Term; (c) by either party
hereto on such date as is specified in written notice given by the terminating
party, in the event of a material breach of this Agreement by the other party,
provided the terminating party has notified the other party of such breach at
least 45 days prior to the specified date of termination and the breaching party
has not remedied such breach by the specified date; (d) effective upon the
liquidation of the Administrator; or (e) as to any Portfolio or the Trust,
effective upon the liquidation of such Portfolio or the Trust, as the case may
be. For purposes of this Article 10, the term "liquidation" shall mean a
transaction in which the assets of the Administrator, the Trust or a Portfolio
are sold or otherwise disposed of and proceeds therefrom are distributed in cash
to the shareholders in complete liquidation of the interests of such
shareholders in the entity.
This Agreement shall not be assignable by the Administrator, without the
prior written consent of the Trust, except to an entity that is controlled by,
or under common control, with, the Administrator.
ARTICLE 11. AMENDMENTS. This Agreement or any part hereof may be changed or
waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought.
ARTICLE 12. CERTAIN RECORDS. The Administrator shall maintain customary
records in connection with its duties as specified in this Agreement. Any
records required to be maintained and preserved pursuant to Rules 31a-1 and
31a-2 under the 1940 Act which are prepared or maintained by the
Administrator on behalf of the Trust shall be prepared and maintained at the
expense of the Administrator, but shall be the property of the Trust and will
be made available to or surrendered promptly to the Trust on request.
In case of any request or demand for the inspection of such records by
another party, the Administrator shall notify the Trust and follow the Trust's
instructions as to permitting or refusing such inspection; provided that the
Administrator may exhibit such records to any person in any case where it is
advised by its counsel that it
6
<PAGE>
may be held liable for failure to do so, unless (in cases involving potential
exposure only to civil liability) the Trust has agreed to indemnify the
Administrator against such liability.
ARTICLE 13. DEFINITIONS OF CERTAIN TERMS. The terms "interested person" and
"affiliated person," when used in this Agreement, shall have the respective
meanings specified in the 1940 Act and the rules and regulations thereunder,
subject to such exemptions as may be granted by the Securities and Exchange
Commission.
ARTICLE 14. NOTICE. Any notice required or permitted to be given by either
party to the other shall be deemed sufficient if sent by registered or certified
mail, postage prepaid, addressed by the party giving notice to the other party
at the last address furnished by the other party to the party giving notice: if
to the Trust, at c/o Kevin P. Robins, General Counsel, SEI Financial Management
Corporation, 680 East Swedesford Road, Wayne, PA 19087; and if to the
Administrator at 680 East Swedesford Road, Wayne, PA 19087-1658.
ARTICLE 15. GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the Commonwealth of Massachusetts and the applicable provisions
of the 1940 Act. To the extent that the applicable laws of the Commonwealth of
Massachusetts, or any of the provisions herein, conflict with the applicable
provisions of the 1940 Act, the latter shall control.
ARTICLE 16. MULTIPLE ORIGINALS. This Agreement may be executed in two or
more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
ARTICLE 17. LIMITATION OF LIABILITY. The Administrator is hereby expressly
put on notice of the limitation of liability as set forth in Article XI of the
Trust's Declaration of Trust and agrees that the obligations pursuant to this
Agreement of a particular Portfolio and of the Trust with respect to that
Portfolio shall be limited solely to the assets of that Portfolio, and the
Administrator shall not seek satisfaction of any such obligation from any other
Portfolio, the shareholders of any Portfolio, the Trustees, officers, employees
or agents of the Trust, or any of them.
7
<PAGE>
ARTICLE 18. BINDING AGREEMENT. This Agreement, and the rights and
obligations of the parties and the Portfolios hereunder, shall be binding on,
and inure to the benefit of, the parties and the Portfolios and the respective
successors and assigns of each of them.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
SEI INSTITUTIONAL INVESTMENTS TRUST
By: Signature Appears Here
---------------------------------
Attest: Signature Appears Here
---------------------------------
SEI FINANCIAL MANAGEMENT CORPORATION
By: Signature Appears Here
---------------------------------
Attest: Signature Appears Here
---------------------------------
8
<PAGE>
SCHEDULE
TO THE ADMINISTRATION AGREEMENT
DATED AS OF APRIL 1, 1996
BETWEEN
SEI INSTITUTIONAL INVESTMENTS TRUST
AND
SEI FINANCIAL MANAGEMENT CORPORATION
Portfolios: This Agreement shall apply to all Portfolios of the Trust, either
now in the future created. The following is a listing of the
current portfolios of the Trust: Large Cap, Small Cap, Core Fixed
Income, High Yield Bond, International Fixed Income, Emerging
Markets Equity and International Equity Funds (collectively, the
"Portfolios").
Fees: Pursuant to Article 4, Section A, the Trust shall pay the
Administrator compensation for services rendered to the
Portfolios at an annual rate, which is calculated daily and paid
monthly, at a maximum administrative fee equal to .05% of each
Portfolios' average daily net assets.
Term: This Agreement shall become effective on June 14, 1996, and shall
remain in effect for an Initial Term of two (2) years from such
date and, thereafter, for successive Renewal Terms of one (1) year
each, unless and until this Agreement is terminated in accordance
with the provisions of Article 10 hereof.
9
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion of our report dated July 15, 1997 on our audit of
the financial statements and financial highlights of the SEI Institutional
Investments Trust, comprised of the Large Cap Fund, Small Cap Fund, Core
Fixed Income Fund and International Equity Fund, as of May 31, 1997 with
respect to this Post-Effective Amendment No. 2 to the Registration Statement
(No. 33-58041) under the Securities Act of 1933 on Form N-1A. We also
consent to the reference to our Firm under the headings "Financial
Highlights" and "Counsel and Independent Accountants" in the Prospectus and
under the headings "Experts" and "Financial Statements" in the Statement of
Additional Information.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
September 26, 1997
<PAGE>
SEI ASSET ALLOCATION TRUST
SEI LIQUID ASSET TRUST
SEI DAILY INCOME TRUST
SEI TAX EXEMPT TRUST
SEI INDEX FUNDS
SEI INSTITUTIONAL MANAGED TRUST
SEI INSTITUTIONAL INVESTMENTS TRUST
SEI INTERNATIONAL TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced funds (the "Trusts"), each a business trust
organized under the laws of The Commonwealth of Massachusetts, hereby
constitutes and appoints David G. Lee and Kevin P. Robins, and each of them
singly, his or her true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him or her and in his or her name,
place and stead, and in the capacity indicated below, to sign any or all
amendments (including post-effective amendments) to each Trust's Registration
Statement on Form N-1A under the provisions of the Investment Company Act of
1940 and the Securities Act of 1933, each such Act as amended, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, acting alone, full power and
authority to do and perform each and every act and thing requisite or necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and
seal as of the date set forth below.
/s/ William M. Doran Date: 10/16/96
- -------------------- --------
William M. Doran
Trustee
<PAGE>
SEI ASSET ALLOCATION TRUST
SEI LIQUID ASSET TRUST
SEI DAILY INCOME TRUST
SEI TAX EXEMPT TRUST
SEI INDEX FUNDS
SEI INSTITUTIONAL MANAGED TRUST
SEI INSTITUTIONAL INVESTMENTS TRUST
SEI INTERNATIONAL TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced funds (the "Trusts"), each a business trust
organized under the laws of The Commonwealth of Massachusetts, hereby
constitutes and appoints David G. Lee and Kevin P. Robins, and each of them
singly, his or her true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him or her and in his or her name,
place and stead, and in the capacity indicated below, to sign any or all
amendments (including post-effective amendments) to each Trust's Registration
Statement on Form N-1A under the provisions of the Investment Company Act of
1940 and the Securities Act of 1933, each such Act as amended, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, acting alone, full power and
authority to do and perform each and every act and thing requisite or necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and
seal as of the date set forth below.
/s/ F. Wendell Gooch Date: 10-18-96
- -------------------- --------
F. Wendell Gooch
Trustee
<PAGE>
SEI ASSET ALLOCATION TRUST
SEI LIQUID ASSET TRUST
SEI DAILY INCOME TRUST
SEI TAX EXEMPT TRUST
SEI INDEX FUNDS
SEI INSTITUTIONAL MANAGED TRUST
SEI INSTITUTIONAL INVESTMENTS TRUST
SEI INTERNATIONAL TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced funds (the "Trusts"), each a business trust
organized under the laws of The Commonwealth of Massachusetts, hereby
constitutes and appoints David G. Lee and Kevin P. Robins, and each of them
singly, his or her true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him or her and in his or her name,
place and stead, and in the capacity indicated below, to sign any or all
amendments (including post-effective amendments) to each Trust's Registration
Statement on Form N-1A under the provisions of the Investment Company Act of
1940 and the Securities Act of 1933, each such Act as amended, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, acting alone, full power and
authority to do and perform each and every act and thing requisite or necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and
seal as of the date set forth below.
/s/ Frank E. Morris Date: Oct. 18, 1996
- ------------------- -------------
Frank E. Morris
Trustee
<PAGE>
SEI ASSET ALLOCATION TRUST
SEI LIQUID ASSET TRUST
SEI DAILY INCOME TRUST
SEI TAX EXEMPT TRUST
SEI INDEX FUNDS
SEI INSTITUTIONAL MANAGED TRUST
SEI INSTITUTIONAL INVESTMENTS TRUST
SEI INTERNATIONAL TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced funds (the "Trusts"), each a business trust
organized under the laws of The Commonwealth of Massachusetts, hereby
constitutes and appoints David G. Lee and Kevin P. Robins, and each of them
singly, his or her true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him or her and in his or her name,
place and stead, and in the capacity indicated below, to sign any or all
amendments (including post-effective amendments) to each Trust's Registration
Statement on Form N-1A under the provisions of the Investment Company Act of
1940 and the Securities Act of 1933, each such Act as amended, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, acting alone, full power and
authority to do and perform each and every act and thing requisite or necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and
seal as of the date set forth below.
/s/ James M. Storey Date:
- ------------------- ----------------
James M. Storey
Trustee
<PAGE>
SEI ASSET ALLOCATION TRUST
SEI LIQUID ASSET TRUST
SEI DAILY INCOME TRUST
SEI TAX EXEMPT TRUST
SEI INDEX FUNDS
SEI INSTITUTIONAL MANAGED TRUST
SEI INSTITUTIONAL INVESTMENTS TRUST
SEI INTERNATIONAL TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced funds (the "Trusts"), each a business trust
organized under the laws of The Commonwealth of Massachusetts, hereby
constitutes and appoints David G. Lee and Kevin P. Robins, and each of them
singly, his or her true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him or her and in his or her name,
place and stead, and in the capacity indicated below, to sign any or all
amendments (including post-effective amendments) to each Trust's Registration
Statement on Form N-1A under the provisions of the Investment Company Act of
1940 and the Securities Act of 1933, each such Act as amended, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, acting alone, full power and
authority to do and perform each and every act and thing requisite or necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and
seal as of the date set forth below.
/s/ Robert A. Nesher Date: 10-15-96
- -------------------- --------
Robert A. Nesher
Trustee
<PAGE>
SEI ASSET ALLOCATION TRUST
SEI LIQUID ASSET TRUST
SEI DAILY INCOME TRUST
SEI TAX EXEMPT TRUST
SEI INDEX FUNDS
SEI INSTITUTIONAL MANAGED TRUST
SEI INSTITUTIONAL INVESTMENTS TRUST
SEI INTERNATIONAL TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced funds (the "Trusts"), each a business trust
organized under the laws of The Commonwealth of Massachusetts, hereby
constitutes and appoints Todd C. Cipperman and Kevin P. Robins, and each of them
singly, his or her true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him or her and in his or her name,
place and stead, and in the capacity indicated below, to sign any or all
amendments (including post-effective amendments) to each Trust's Registration
Statement on Form N-1A under the provisions of the Investment Company Act of
1940 and the Securities Act of 1933, each such Act as amended, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, acting alone, full power and
authority to do and perform each and every act and thing requisite or necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and
seal as of the date set forth below.
/s/ David G. Lee Date: 10/23/96
- ---------------- --------
David G. Lee
President, Chief Executive Officer
<PAGE>
SEI ASSET ALLOCATION TRUST
SEI LIQUID ASSET TRUST
SEI DAILY INCOME TRUST
SEI TAX EXEMPT TRUST
SEI INDEX FUNDS
SEI INSTITUTIONAL MANAGED TRUST
SEI INSTITUTIONAL INVESTMENTS TRUST
SEI INTERNATIONAL TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced funds (the "Trusts"), each a business trust
organized under the laws of The Commonwealth of Massachusetts, hereby
constitutes and appoints David G. Lee and Kevin P. Robins, and each of them
singly, his or her true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him or her and in his or her name,
place and stead, and in the capacity indicated below, to sign any or all
amendments (including post-effective amendments) to each Trust's Registration
Statement on Form N-1A under the provisions of the Investment Company Act of
1940 and the Securities Act of 1933, each such Act as amended, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, acting alone, full power and
authority to do and perform each and every act and thing requisite or necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and
seal as of the date set forth below.
/s/ George J. Sullivan, Jr. Date: OCT 16, 1996
- --------------------------- ------------
George J. Sullivan, Jr.
Trustee
<PAGE>
SEI ASSET ALLOCATION TRUST
SEI LIQUID ASSET TRUST
SEI DAILY INCOME TRUST
SEI TAX EXEMPT TRUST
SEI INDEX FUNDS
SEI INSTITUTIONAL MANAGED TRUST
SEI INSTITUTIONAL INVESTMENTS TRUST
SEI INTERNATIONAL TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced funds (the "Trusts"), each a business trust
organized under the laws of The Commonwealth of Massachusetts, hereby
constitutes and appoints David G. Lee and Kevin P. Robins, and each of them
singly, his or her true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him or her and in his or her name,
place and stead, and in the capacity indicated below, to sign any or all
amendments (including post-effective amendments) to each Trust's Registration
Statement on Form N-1A under the provisions of the Investment Company Act of
1940 and the Securities Act of 1933, each such Act as amended, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, acting alone, full power and
authority to do and perform each and every act and thing requisite or necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and
seal as of the date set forth below.
/s/ Mark E. Nagle Date: March 4, 1997
- ----------------- -------------
Mark E. Nagle
Controller and Chief Financial Officer
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