<PAGE> 1
SCHEDULE 14a INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
SEI INSTITUTIONAL INVESTMENTS TRUST
(Name of Registrant as Specified In Its Charter)
same
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11(1).
1) Title of each class of securities to which transaction applies:
_______________________________________________________________________
2) Aggregate number of securities to which transaction applies:
_______________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
_______________________________________________________________________
4) Proposed maximum aggregate value of transaction:
_______________________________________________________________________
5) Total fee paid:
_______________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
_______________________________________________________________________
2) Form, Schedule or Registration Statement No.:
_______________________________________________________________________
3) Filing Party:
_______________________________________________________________________
4) Date Filed:
_______________________________________________________________________
<PAGE> 2
SMALL CAP FUND
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IMPORTANT SHAREHOLDER INFORMATION
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THE DOCUMENT YOU HOLD IN YOUR HANDS CONTAINS YOUR PROXY STATEMENT AND PROXY
CARD. A PROXY CARD IS, IN ESSENCE, A BALLOT. WHEN YOU VOTE YOUR PROXY, IT TELLS
US HOW TO VOTE ON YOUR BEHALF ON IMPORTANT ISSUES RELATING TO YOUR FUND. EACH
PROXY CARD MAY BE COMPLETED BY VOTING FOR OR AGAINST THE PROPOSAL RELATING TO
YOUR FUND. IF YOU SIMPLY SIGN THE PROXY WITHOUT SPECIFYING A VOTE, YOUR SHARES
WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF TRUSTEES.
WE URGE YOU TO SPEND A FEW MINUTES WITH THE PROXY STATEMENT, FILL OUT YOUR PROXY
CARD, AND RETURN IT TO US. VOTING YOUR PROXY, AND DOING SO PROMPTLY, ENSURES
THAT YOUR FUND WILL NOT NEED TO CONDUCT ADDITIONAL MAILINGS. WHEN SHAREHOLDERS
DO NOT RETURN THEIR PROXIES IN SUFFICIENT NUMBERS, WE HAVE TO MAKE FOLLOW-UP
SOLICITATIONS, WHICH MAY COST YOUR FUND MONEY.
PLEASE TAKE A FEW MOMENTS TO EXERCISE YOUR RIGHT TO VOTE. THANK YOU.
- --------------------------------------------------------------------------------
SEI INSTITUTIONAL INVESTMENTS TRUST
<PAGE> 3
SEI INSTITUTIONAL INVESTMENTS TRUST
Dear Shareholder,
A Shareholder Meeting of the Small Cap Fund (the "Fund") of SEI Institutional
Investments Trust (the "Trust") has been scheduled for February 28, 1997. If you
were a shareholder of record as of the close of business on January 6, 1997, you
are entitled to vote at the meeting or any adjournment of the meeting.
Whether or not you plan to attend the meeting, we need your vote. While you are,
of course, welcome to join us a the meeting, most shareholders will cast their
votes by filling out and signing a proxy card. Please mark, sign, and date the
enclosed proxy card and return it promptly in the enclosed envelope so that the
maximum number of shares may be voted.
The attached proxy statement is designed to give you information relating to the
proposal on which you are being asked to vote. We encourage you to support the
Trustees' recommendation. The proposal described in the proxy statement relates
to the following matter:
I. APPROVING THE SELECTION OF LSV ASSET MANAGEMENT ("LSV") AS MONEY
MANAGER FOR THE SMALL CAP FUND OF SEI INSTITUTIONAL INVESTMENTS TRUST,
AND A NEW INVESTMENT SUB-ADVISORY AGREEMENT BETWEEN LSV AND SEI
FINANCIAL MANAGEMENT CORPORATION RELATING TO THE FUND.
Your vote is important to us. Please do not hesitate to call 1-800-DIAL SEI if
you have any questions about the proposal under consideration. Thank you for
taking the time to consider the important proposal and for your investment in
the SEI Funds.
Sincerely,
David G. Lee
President and Chief Executive Officer
SEI Institutional Investments Trust
<PAGE> 4
PRELIMINARY COPY
SEI INSTITUTIONAL INVESTMENTS TRUST
2 OLIVER STREET
BOSTON, MA 02109
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
FEBRUARY 28, 1997
Notice is hereby given that a Special Meeting of Shareholders of the
Small Cap Fund (the "Fund") of SEI Institutional Investments Trust ("SIIT" or
the "Trust") will be held at the offices of SEI Financial Management Corporation
("SFM"), Oaks, Pennsylvania 19456, on February 28, 1997, at 3:30 p.m.
At the meeting, shareholders of the Fund will be asked to consider and
approve a new Money Manager and a new sub-advisory agreement. The specifics of
the Proposal, which are more fully described in the attached Proxy Statement,
are as follows:
I. TO APPROVE THE SELECTION OF LSV ASSET MANAGEMENT ("LSV") AS
MONEY MANAGER FOR THE SMALL CAP FUND OF SEI INSTITUTIONAL INVESTMENTS
TRUST, AND A NEW INVESTMENT SUB-ADVISORY AGREEMENT BETWEEN LSV AND SEI
FINANCIAL MANAGEMENT CORPORATION RELATING TO THE FUND.
The Proposal relates to the approval of the selection of LSV to serve
as Money Manager to the Fund, and to the approval of an Investment Sub-Advisory
Agreement for the Fund. The Trust operates using a "Manager of Managers"
structure, under which the Trustees are able, upon the recommendation of SFM and
without Shareholder approval, to replace Money Managers and/or appoint
additional Money Managers for the Fund. However, because LSV is an affiliate of
SFM, Shareholder approval of the appointment of LSV and of the new sub-advisory
agreement between LSV and SFM is necessary.
In accordance with their own discretion, the proxies are authorized to
vote on such other business as may properly come before the Meeting.
BY ORDER OF THE BOARD OF TRUSTEES
RICHARD W. GRANT, SECRETARY
<PAGE> 5
All Shareholders are cordially invited to attend the Meeting. However,
if you are unable to be present at the Meeting, you are requested to mark, sign,
and date the enclosed Proxy and return it promptly in the enclosed envelope so
that the Meeting may be held and a maximum number of shares may be voted.
Shareholders of record at the close of business on January 6, 1997 are
entitled to notice of and to vote at the Meeting or any adjournment thereof.
January 20, 1997
<PAGE> 6
PRELIMINARY COPY
SEI INSTITUTIONAL INVESTMENTS TRUST
2 OLIVER STREET
BOSTON, MA 02109
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of proxies
by the Board of Trustees of SEI Institutional Investments Trust ("SIIT" or the
"Trust") for use at the Special Meeting of Shareholders to be held on February
28, 1997, at 3:30 p.m., at the offices of SEI Financial Management Corporation
("SFM"), Oaks, Pennsylvania 19456, and at any adjourned session thereof (such
meeting and any adjournment thereof are hereinafter referred to as the
"Meeting"). Shareholders of the Small Cap Fund (the "Fund") of record at the
close of business on January 6, 1997 ("Shareholders"), are entitled to vote at
the Meeting. The approximate number of units of beneficial interest ("shares")
issued and outstanding for the Fund as of January 6, 1997 was _____________.
Each share is entitled to one vote and each fractional share is entitled to a
proportionate fractional vote on each matter as to which such shares are to be
voted at the Meeting.
In addition to the solicitation of proxies by mail, Trustees and officers of the
Trust and officers and employees of SFM, the Investment Adviser for the Trust,
may solicit proxies in person or by telephone. Persons holding shares as
nominees will, upon request, be reimbursed for their reasonable expenses
incurred in sending soliciting materials to their principals. The cost of
solicitation will be borne by the Trust. The proxy and this Proxy Statement are
being mailed to Shareholders on or about January 20, 1997.
Shares represented by duly executed proxies will be voted in accordance with the
instructions given. Proxies may be revoked at any time before they are exercised
by a written revocation received by the President of the Trust at Oaks,
Pennsylvania 19456, by properly executing a later-dated proxy, or by attending
the Meeting and voting in person.
INTRODUCTION
The Trust is organized as a Massachusetts business trust and is not required to
hold annual meetings of Shareholders. The Meeting is being called in order to
permit the Shareholders of the Fund to vote on the selection of a new Money
Manager, and to approve a new investment sub-advisory agreement in connection
with this new relationship. Shareholders are required to approve the selection
of LSV Asset Management ("LSV") as a Money Manager for the Fund, and to approve
a new investment sub-advisory agreement between SFM and LSV relating to the
<PAGE> 7
Fund.
The Trust operates using a "Manager of Managers" structure under which the
Trustees are able, upon the recommendation of SFM and without Shareholder
approval, to replace Money Managers and/or appoint additional Money Managers to
the Fund. However, because LSV is an affiliate of SFM, Shareholder approval is
necessary.
I. APPROVAL OF A MONEY MANAGER AND THE NEW INVESTMENT SUB-
ADVISORY AGREEMENT FOR THE SMALL CAP FUND
The Board of Trustees is recommending that Shareholders of the Fund approve LSV
as an additional Money Manager for the Fund and approve the new Investment
Sub-Advisory Agreement between SFM and LSV relating to the Fund.
A. DISCUSSION OF "MANAGER OF MANAGERS" ARRANGEMENT.
Section 15(a) of the Investment Company Act of 1940 (the "Act") requires that
all contracts pursuant to which persons serve as investment advisers to
investment companies be approved by shareholders. As interpreted, this
requirement would apply to the appointment of Money Managers to the Fund. The
SEC has granted the Trust an exemption from the shareholder approval
requirements which permits the Trust's Board of Trustees, without Shareholder
approval, to appoint additional or replacement Money Managers (herein,
"Managers"). The Board would not, however, be able to replace SFM as investment
adviser to the Fund without complying with the Act and applicable regulations
governing Shareholder approval of advisory contracts.
Under the "Manager of Managers" structure, SFM has general oversight
responsibility for the investment advisory services provided to the Trust,
including formulating investment policies and analyzing economic trends
affecting the Trust. SFM is responsible for managing the allocation of assets
among the Managers and directing and evaluating the investment services provided
by the Managers, including their adherence to the Fund's investment objectives
and policies and the investment performance of the Fund and may provide specific
portfolio security advice. HOWEVER, SFM HAS THE ULTIMATE RESPONSIBILITY FOR THE
INVESTMENT PERFORMANCE OF THE FUND DUE TO ITS RESPONSIBILITY TO OVERSEE MONEY
MANAGERS AND RECOMMEND THEIR HIRING, TERMINATION AND REPLACEMENT.
Under the Manager of Managers structure, Money Managers are selected based
primarily upon the research and recommendations of SFM, the Investment Adviser
and Manager of Managers for the Fund. SFM evaluates quantitatively and
qualitatively each Money Manager's skills and investment results in managing
assets for specific asset classes, investment styles and strategies. Subject to
Board review, SFM allocates and, when appropriate, reallocates the Fund's assets
among Money Managers, depending on SFM's assessment of what combination of
Managers it believes will optimize the Fund's chances of achieving its
investment objective. After completing this evaluation process, SFM recommended,
and the Board approved, the selection of LSV as a
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<PAGE> 8
new Money Manager.
B. SELECTION OF LSV ASSET MANAGEMENT AS MONEY MANAGER.
The Money Manager. If approved by shareholders, LSV will serve as Money Manager
for a portion of the assets of the Fund. In accordance with the Fund's
investment objectives and policies, and under the supervision of SFM and the
Trust's Board of Trustees, LSV will be responsible for the day-to-day investment
management of a discrete portion of the assets of the Fund authorized to make
investment decisions for the Fund and place orders on behalf of the Fund to
effect the investment decisions made. SFM will monitor the compliance of LSV
with regulatory and tax regulations, such as those relating to portfolio
concentration and diversification. For the most part, compliance with these
requirements by LSV with respect to its portion of the Fund will assure
compliance by the Fund as a whole.
LSV is a registered investment adviser organized as a Delaware general
partnership. SEI Funds, Inc., an affiliate of SFM, owns a majority interest in
LSV. The general partners of LSV have developed quantitative value analysis
methodology and software which has been used to manage assets over the past 5
years. The portfolio identified by the model has been implemented by a number of
institutional clients with aggregate assets invested of approximately $295
million. The principal business address of LSV is 181 W. Madison Avenue,
Chicago, Illinois 60602.
Listed below are the names, titles and addresses of the principal executive
officer and each of LSV's partners and principals. No Trustee of the Trust
purchased or sold partnership interests in LSV during the Trust's most recent
fiscal year. Except as noted below, the principal business address of each
partner and principal of LSV is 181 W. Madison Avenue, Chicago, Illinois 60602.
<TABLE>
<CAPTION>
NAME TITLE
- ---- -----
<S> <C>
SEI Funds, Inc. General Partner
Oaks, PA 19456
Lakonishok Corporation General Partner
Shleifer Corporation General Partner
Vishny Corporation General Partner
Christopher LaCroix Partner
</TABLE>
-3-
<PAGE> 9
<TABLE>
<CAPTION>
<S> <C>
Josef Lakonishok Principal and CEO
Andrei Shleifer Principal
Robert Vishny Principal
Gilbert Beebower Chairman, Management
SEI Investments Company Committee
Oaks, PA 19456
</TABLE>
Trustees' Considerations. The Trustees of the Trust, including all of the
Trustees who are not "interested persons" of the Trust, approved the form of the
Investment Sub-Advisory Agreement with respect to the Fund at a meeting held on
December 9 and 10, 1996. The Trustees received written and oral information from
both SFM and LSV. SFM recommended the selection of LSV as an additional Money
Manager and reviewed the considerations and the search process that had led to
the recommendation. The Trustees also met with representatives of the Money
Manager and considered information about key personnel, investment philosophy
and process and performance track record, among other factors.
In recommending that the Shareholders approve LSV, the Trustees carefully
evaluated the investing experience of the Money Manager's key personnel and the
quality of services the Money Manager can be expected to provide to the Fund,
including, but not limited to: (1) the nature and quality of the services
expected to be rendered by the Money Manager; (2) the distinct investment
objective and policies of the Fund; (3) the compensation payable to the Money
Manager under the Investment Sub-Advisory Agreement; (4) the history,
reputation, and background of the Money Manager, as well as the qualifications
of its personnel and financial condition; (5) its performance record, including
its performance as Money Manager to the SIIT Large Cap Fund; and (6) other
factors deemed relevant, including the impact on SFM's profitability. The
Trustees also reviewed the fees to be paid to the Money Manager in comparison to
those being charged in the relevant segment of the mutual fund business,
including any benefits received by the Money Manager or its affiliates in
connection with soft dollar practices.
Duties under the Investment Sub-Advisory Agreement. Under the Investment
Sub-Advisory Agreement (a copy of which is attached as Exhibit A), the Money
Manager will make investment decisions for the assets of the Fund allocated to
it by SFM and continuously review, supervise, and administer the Fund's
investment program with respect to these assets. The Money Manager will
discharge its responsibilities subject to the supervision of SFM and the
Trustees of the Trust and in a manner consistent with the Fund's investment
objectives, policies and limitations. The Investment Sub-Advisory Agreement
provides that the Money Manager shall not be protected against any liability to
the Trust, its shareholders, or SFM by reason of willful misfeasance, bad
-4-
<PAGE> 10
faith, or negligence on its part in the performance of its duties or from
reckless disregard by the Money Manager to its obligations or duties thereunder.
Duration and Termination. If approved, and unless terminated earlier, the
Investment Sub-Advisory Agreement shall continue in effect as to the Fund
through December, 1998 and thereafter for periods of one year for so long as
such continuance is specifically approved at least annually: (i) by the vote of
the holders of a majority of the outstanding shares of the Fund or by the
Trustees of the Trust, and (ii) by the vote of a majority of those Trustees of
the Trust who are not parties to the Investment Sub-Advisory Agreement or who
are not "interested persons" (as that term is defined in the Act) of any party
thereto, cast in person at a meeting called for the purpose of voting on such
approval.
The Investment Sub-Advisory Agreement will terminate automatically in the event
of its assignment or in the event that SFM's Investment Advisory Agreement with
respect to the Fund is terminated. The Investment Sub-Advisory Agreement is
terminable at any time without penalty by the Trustees of the Trust, or, with
respect to the Fund, by a vote of a majority of the outstanding shares on not
less than 30 days' nor more than 60 days' written notice to LSV. In addition,
the Investment Sub-Advisory Agreement is terminable by LSV upon 90 days' written
notice to the Trust or SFM.
In the event Shareholders of the Fund do not approve LSV at the Special Meeting
to which this Proxy Statement relates, or any adjournment thereof, the Trustees
will consider the appropriate course of action.
Compensation. Under the proposed Investment Sub-Advisory Agreement, SFM will pay
LSV a fee, which is calculated and paid monthly, based on the annual percentage
rate of .50% of the average monthly market value of the portion of the assets of
the Fund managed by LSV. Under the existing investment sub-advisory agreement
between SFM and LSV relating to the Large Cap Value Portfolio of SEI
Institutional Managed Trust ("SIMT") and the Large Cap Fund of SIIT, SFM pays
LSV a fee, which is calculated and paid monthly, based on the annual percentage
rate of .20% of the average monthly market value of investments under
management. During the fiscal year ended September 30, 1996, LSV received from
SFM $179,000 as compensation for its investment sub-advisory services to the
SIMT Large Cap Value Portfolio. For the period ended ______, 1996, LSV received
from SFM $_________ as compensation for its investment sub-advisory services to
the SIIT Large Cap Fund. For the period ended _____________, SFM received $
____________ as compensation for its investment advisory services to the Fund.
THE TRUSTEES RECOMMEND THAT THE SHAREHOLDERS VOTE FOR PROPOSAL I.
GENERAL INFORMATION ABOUT THE TRUST AND OTHER MATTERS
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<PAGE> 11
Distribution. SEI Financial Services Company ("SFS"), a wholly-owned subsidiary
of SEI Investments Company, Oaks, Pennsylvania 19456 ("SEI"), acts as the
Distributor of SIIT's shares pursuant to a Distribution Agreement dated June 14,
1996 between the Trust and SFS. Alfred P. West, Jr. serves as Chairman of the
Board and Chief Executive Officer of SFS and SEI, and Henry H. Greer serves as
Director, President and Chief Operating Officer of SFS and SEI. William M.
Doran, a Trustee of the Trust, is a Director and Secretary of SEI.
Portfolio Transactions. For the period ended November 30, 1996, the Fund paid
the following amounts in brokerage commissions to affiliates:
<TABLE>
<CAPTION>
TOTAL BROKERAGE AMOUNT PAID TO % PAID TO
COMMISSION AFFILIATED BROKER AFFILIATED BROKER
<S> <C> <C>
</TABLE>
5% Shareholders. As of January 6, 1997, the following persons were the only
persons who were, to the knowledge of the Trust, beneficial owners of 5% or more
of shares of the Fund.
<TABLE>
<CAPTION>
NAME AND ADDRESS PERCENTAGE OF
OF BENEFICIAL OWNER NUMBER OF SHARES FUND'S SHARES
<S> <C> <C>
</TABLE>
The Trust's Trustees and officers do not beneficially own any shares of the
Trust.
Adjournment. In the event that sufficient votes in favor of the Proposal set
forth in the Notice of the Special Meeting are not received by the time
scheduled for the meeting, the persons named as proxies may propose one or more
adjournments of the meeting for a period or periods of not more than 60 days in
the aggregate to permit further solicitation of proxies with respect to the
Proposal. Any such adjournment will require the affirmative vote of a majority
of the votes cast on the question in person or by proxy at the session of the
meeting to be adjourned. The persons named as proxies will vote in favor of such
adjournment those proxies which they are entitled to vote in favor of the
Proposal. They will vote against any such adjournment those proxies required to
be voted against the Proposal. The costs of any such additional solicitation and
of any adjourned session will be borne by the Trust.
Required Vote. Approval of the Proposal requires the affirmative vote of a
majority of the outstanding shares of the Fund. As defined in the Act, "majority
of the outstanding shares" means the vote of (i) 67% or more of the Fund's
outstanding 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.
Abstentions and "broker non-votes" will not be counted for or against the
Proposal, but will be
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<PAGE> 12
counted for purposes of determining whether a quorum is present. Abstentions
will be counted as votes present for purposes of determining a "majority of the
outstanding voting securities" present at the Meeting, and will therefore have
the effect of counting against the Proposal.
Shareholder Proposals. The Trust does not hold annual Shareholder Meetings.
Shareholders wishing to submit proposals for inclusion in a proxy statement for
a subsequent meeting should send their written proposals to the Secretary of the
Trust c/o SEI Investments Company, Legal Department, Oaks, Pennsylvania 19456.
Reports to Shareholders. The Trust will furnish, without charge, a copy of the
most recent Annual Report to Shareholders of the Trust and the most recent
Semi-Annual Report succeeding such Annual Report, if any, on request. Requests
should be directed to the Trust at Oaks, Pennsylvania 19456, or by calling
1-800-342-5734.
Other Matters. The Trustees know of no other business to be brought before the
meeting. However, if any other matters properly come before the meeting, it is
their intention that proxies which do not contain specific restrictions to the
contrary will be voted on such matters in accordance with the judgment of the
persons named in the enclosed form of proxy.
----------------
SHAREHOLDERS ARE URGED TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND RETURN
IT PROMPTLY.
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<PAGE> 13
EXHIBIT A
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
AGREEMENT made this day of , 1997, 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 , 1997 (the "Advisory Agreement") with the Trust, pursuant to which the
Adviser will act as investment adviser to the Small Cap 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 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
A-1
<PAGE> 14
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
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
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<PAGE> 15
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.
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.
A-3
<PAGE> 16
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 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
A-4
<PAGE> 17
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
Oaks, PA 19456
Attention: Legal Department
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: By:
Title: Title:
A-5
<PAGE> 18
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT DATED _____, 1997
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:
Small Cap Fund .50%
Agreed and Accepted:
SEI Financial Management Corporation LSV Asset Management
By SEI Funds, Inc.,
a general partner
By: By:
Title: Title:
A-6
<PAGE> 19
SEI INSTITUTIONAL INVESTMENTS TRUST
SMALL CAP FUND
PROXY SOLICITED BY THE BOARD OF TRUSTEES FOR
THE SPECIAL MEETING OF SHAREHOLDERS, FEBRUARY 28, 1997
The undersigned, revoking previous proxies with respect to the Shares (defined
below), hereby appoints David G. Lee, Kevin P. Robins and Kathryn L. Stanton as
proxies and each of them, each with full power of substitution, to vote at the
Special Meeting of Shareholders of the Small Cap Fund (the "Fund") of SEI
Institutional Investments Trust (the "Trust") to be held in the offices of SEI
Financial Management Corporation ("SFM"), Oaks, Pennsylvania 19456, on February
28, 1997, at 3:30 p.m., and any adjournments or postponements thereof (the
"Meeting") all shares of beneficial interest of said Trust that the undersigned
would be entitled to vote if personally present at the Meeting ("Shares") on the
proposal set forth below respecting the approval of the selection of LSV Asset
Management ("LSV") as Money Manager for the Fund, and the approval of a new
investment sub-advisory agreement between LSV and SEI Financial Management
("SFM") relating to the Fund and, in accordance with their own discretion, any
other matters properly brought before the Meeting.
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS A VOTE "FOR" THE
PROPOSAL TO:
PROPOSAL 1 Approve the selection of LSV as an investment sub-adviser
for the Fund, and to approve a new investment sub-advisory
agreement between LSV and SFM relating to the Fund.
____For ____Against ____Abstain
<PAGE> 20
THIS PROXY WILL, WHEN PROPERLY EXECUTED, BE VOTED AS DIRECTED HEREIN BY THE
SIGNING SHAREHOLDER. IF NO CONTRARY DIRECTION IS GIVEN WHEN THE DULY EXECUTED
PROXY IS RETURNED, THIS PROXY WILL BE VOTED FOR THE FOREGOING PROPOSAL AND WILL
BE VOTED IN THE APPOINTED PROXIES' DISCRETION UPON SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING.
The undersigned acknowledges receipt with this proxy of a copy of the Notice of
Special Meeting and the Proxy Statement of the Board of Trustees. Your
signature(s) on this proxy should be exactly as your name(s) appear on this
Proxy. If the shares are held jointly, each holder should sign this Proxy.
Attorneys-in-fact, executors, administrators, trustees or guardians should
indicate the full title and capacity in which they are signing.
Dated: __________, 1997 _____________________________________________
Signature of Shareholder
_____________________________________________
Title
_____________________________________________
Signature (Joint owners)
_____________________________________________
Title
PLEASE DATE, SIGN AND RETURN PROMPTLY USING THE ENCLOSED, POSTAGE-PAID ENVELOPE
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING; YOU MAY, NEVERTHELESS, VOTE IN
PERSON IF YOU DO ATTEND.
2
