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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
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 Section 240.14a-12
SEI LIQUID ASSET TRUST
SEI TAX EXEMPT TRUST
SEI DAILY INCOME TRUST
SEI INDEX FUNDS
SEI INSTITUTIONAL MANAGED TRUST
SEI INSTITUTIONAL INTERNATIONAL TRUST
SEI ASSET ALLOCATION TRUST
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the 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)(4)
and 0-11.
(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:
------------------------------------------------------------------------
PERSONS WHO ARE TO RESPOND TO THE COLLECTION OF INFORMATION CONTAINED
IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A
CURRENTLY VALID OMB CONTROL NUMBER.
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SEI LIQUID ASSET TRUST
SEI TAX EXEMPT TRUST
SEI DAILY INCOME TRUST
SEI INDEX FUNDS
SEI INSTITUTIONAL MANAGED TRUST
SEI INSTITUTIONAL INTERNATIONAL TRUST
SEI ASSET ALLOCATION TRUST
IMPORTANT SHAREHOLDER INFORMATION
This document 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(s). The proxy card may be
completed by checking the appropriate box and voting for or against the specific
proposals relating to your Fund(s). If you simply sign the proxy without
specifying a vote, your shares will be voted in accordance with the
recommendation of the Board of Trustees.
Please 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 the
Funds will not need to conduct additional mailings.
Please take a few moments to exercise your right to vote. Thank you.
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SEI LIQUID ASSET TRUST
SEI TAX EXEMPT TRUST
SEI DAILY INCOME TRUST
SEI INDEX FUNDS
SEI INSTITUTIONAL MANAGED TRUST
SEI INSTITUTIONAL INTERNATIONAL TRUST
SEI ASSET ALLOCATION TRUST
Dear Shareholder,
A shareholder meeting of the SEI Liquid Asset Trust, SEI Tax Exempt
Trust, SEI Daily Income Trust, SEI Index Funds, SEI Institutional Managed Trust,
SEI Institutional International Trust and SEI Asset Allocation Trust and each of
their portfolios (the "Funds") has been scheduled for October 27, 2004 (the
"Meeting"). The Meeting will be held at the offices of SEI Investments
Management Corporation ("SIMC"), One Freedom Valley Drive, Oaks, Pennsylvania
19456.
If you were a shareholder of record as of the close of business on
August 17, 2004, you are entitled to vote at the Meeting and any adjournment(s)
of the Meeting. While you are, of course, welcome to join us at the Meeting,
most shareholders cast their votes by filling out and signing the enclosed proxy
card. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, WE NEED YOUR VOTE. YOUR
BALLOT SHOWS WHICH PROPOSALS YOU ARE BEING ASKED TO VOTE ON. PLEASE MARK, SIGN,
AND DATE THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE SO THAT THE MAXIMUM NUMBER OF SHARES MAY BE VOTED. YOU MAY
ALSO VOTE BY TELEPHONE OR THROUGH THE INTERNET.
The attached Proxy Statement is designed to give you detailed
information relating to each of the proposals on which you are asked to vote. We
encourage you to support the Trustees' recommendations. The purpose of the
Meeting is to consider the proposals set forth below and to transact such
business as may be properly brought before the Meeting or any adjournment(s)
thereof. The proposals described in the Proxy Statement relate to the following
matters:
- - To elect Trustees for all Funds.
- - To approve a "manager of managers" structure for: the Bond Index Fund of
SEI Index Funds; the Short-Duration Government, Intermediate-Duration
Government, GNMA, and Corporate Daily Income Funds of SEI Daily Income
Trust; and the California Tax Exempt, Tax Free, Institutional Tax Free, and
Pennsylvania Tax Free Funds of SEI Tax Exempt Trust.
- - To approve SIMC as investment adviser for: the Bond Index Fund of SEI Index
Funds; the Short-Duration Government, Intermediate-Duration Government,
GNMA, and Corporate Daily Income Funds of SEI Daily Income Trust; and the
California Tax Exempt, Tax Free, Institutional Tax Free, and Pennsylvania
Tax Free Funds of SEI Tax Exempt Trust; and to approve an investment
advisory agreement with SIMC and these Funds.
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- - To approve eliminating or reclassifying certain fundamental policies and
restrictions for all Funds, except for: the Treasury Securities Fund of SEI
Liquid Asset Trust and the Money Market, Prime Obligation, Government,
Treasury and Treasury II Funds of SEI Daily Income Trust.
Shareholders also will be asked to vote on such other business as may
properly come before the Meeting.
To implement the "manager of managers" structure described under
Proposal 2, with SIMC serving as each applicable Fund's "manager of managers,"
shareholders must approve Proposals 2 and 3. If shareholders do not approve both
Proposals, Proposals 2 and 3 will not be implemented and the Trustees will
consider an alternative course of action.
Your vote is important. Please do not hesitate to call 1-800-DIAL-SEI if
you have any questions about the proposals under consideration. Thank you for
taking the time to consider these important proposals and for your investment in
the SEI Funds.
Sincerely,
/s/ Edward D. Loughlin
Edward D. Loughlin
President and Chief Executive Officer
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IMPORTANT NOTICE
Although we recommend that you read the complete Proxy Statement, for your
convenience we have provided a brief overview of the proposals. The information
provided under the "Questions and Answers" section below is qualified in its
entirety by reference to the Proxy Statement.
QUESTIONS AND ANSWERS
WHY AM I RECEIVING THIS PROXY STATEMENT?
The Board of Trustees is asking you to vote on the following proposals:
- - To elect Trustees for all Funds.
- - To approve a "manager of managers" structure for: the Bond Index Fund of
SEI Index Funds; the Short-Duration Government, Intermediate-Duration
Government, GNMA, and Corporate Daily Income Funds of SEI Daily Income
Trust; and the California Tax Exempt, Tax Free, Institutional Tax Free, and
Pennsylvania Tax Free Funds of SEI Tax Exempt Trust.
- - To approve SEI Investments Management Corporation ("SIMC") as investment
adviser for: the Bond Index Fund of SEI Index Funds; the Short-Duration
Government, Intermediate-Duration Government, GNMA, and Corporate Daily
Income Funds of SEI Daily Income Trust; and the California Tax Exempt, Tax
Free, Institutional Tax Free, and Pennsylvania Tax Free Funds of SEI Tax
Exempt Trust; and to approve an investment advisory agreement with SIMC and
these Funds.
- - To approve eliminating or reclassifying certain fundamental policies and
restrictions for all Funds, except for: the Treasury Securities Fund of SEI
Liquid Asset Trust and the Money Market, Prime Obligation, Government,
Treasury and Treasury II Funds of SEI Daily Income Trust.
WHY AM I BEING ASKED TO ELECT TRUSTEES?
The Board currently consists of seven Trustees, five of whom are not "interested
persons," as such term is defined under the Investment Company Act of 1940, as
amended (the "1940 Act") (an "Independent Trustee"). The Board of Trustees has
determined to increase the size of the Board by adding an additional Independent
Trustee. Pursuant to requirements under the 1940 Act, more than two-thirds of
the Trustees must have been elected by shareholders immediately upon the
addition of a new Trustee. Five of the seven current Trustees of the Funds have
been elected by shareholders. Immediately upon the addition of a new Trustee,
less than two-thirds of the Trustees would have been elected by shareholders.
Therefore, shareholder approval is required to add a new Trustee.
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WHAT IS A "MANAGER OF MANAGERS" STRUCTURE?
The Board of Trustees is proposing the implementation of a "manager of managers"
structure for certain Funds, as indicated above. Under this structure, each Fund
will have SIMC as an investment adviser and SIMC, subject to supervision of the
Board of Trustees, will supervise one or more sub-advisers. This structure will
allow the Board of Trustees, at the recommendation of SIMC, to appoint
additional or replacement sub-advisers to the Funds without shareholder
approval.
The 1940 Act requires shareholder approval of new investment advisory agreements
(including sub-advisory agreements). The U.S. Securities and Exchange
Commission, however, has granted the Trusts a partial exemption from this
requirement to allow the appointment of investment sub-advisers in connection
with the proposed "manager of managers" structure, WITHOUT shareholder approval.
Before a Fund can rely on this exemption and implement the "manager of managers"
structure, the Fund's shareholders must approve the "manager of managers"
structure and approve SIMC as the Fund's investment adviser.
All of the other Funds in the SEI Funds family have implemented the "manager of
managers" structure and the Board of Trustees has found that structure to be
efficient and effective in managing those Funds. Using a "manager of managers"
structure will enable the Funds to avoid the considerable expense of holding
shareholder meetings to approve new or additional sub-advisers.
WHY AM I BEING ASKED TO VOTE ON SIMC AS THE FUNDS' INVESTMENT ADVISER AND A NEW
INVESTMENT ADVISORY AGREEMENT WITH SIMC?
In connection with the implementation of the "manager of managers" structure,
the Board of Trustees is also seeking shareholder approval of SIMC as each
Fund's investment adviser, as indicated above, and the new investment advisory
agreement with SIMC. As mentioned above, the 1940 Act requires shareholder
approval of new investment advisory agreements. At a meeting held in June 2004,
the Board approved the operation of the Funds under a manager of managers
structure with SIMC as the Funds' investment adviser. In addition, the Board
approved each Fund's current adviser as investment sub-adviser. Accordingly, if
Proposals 2 and 3 are approved, each of the current advisers will serve as
sub-adviser to their respective Funds in the "manager of managers" structure
under new sub-advisory agreements with SIMC. The appointment of these advisers
as sub-advisers does not require shareholder approval. In addition, SIMC will be
able to recommend that the Board hire additional sub-advisers or replace these
sub-advisers, and the Board may approve such changes without shareholder
approval.
HOW WILL THE IMPLEMENTATION OF THE "MANAGER OF MANAGERS" STRUCTURE AFFECT MY
ACCOUNT?
The implementation of the "manager of managers" structure will not directly
change your account. You will remain a shareholder of your Fund just as before
and each Fund will contract for advisory services as before. However, with the
proposed "manager of managers" structure, the Funds will receive the benefit of
SIMC's investment adviser selection, monitoring and allocation services and the
Board's flexibility in approving additional or replacement sub-advisers without
shareholder approval. The proposed investment advisory agreements between
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the Trusts, on the Funds' behalf, and SIMC are substantially similar to the
Trusts' previous investment advisory agreements except to the extent they
contemplate sub-advisory agreements.
WILL THE IMPLEMENTATION OF A "MANAGER OF MANAGERS" STRUCTURE AFFECT THE FUNDS'
EXPENSES?
For each Fund, SIMC is entitled to the same contractual investment advisory fee
as the investment advisory fee for the previous adviser. SIMC will be
responsible for paying any advisory fees to the sub-advisers. As a result, the
proposed changes will not result in increased investment advisory fees. Certain
Fund service providers have voluntarily agreed to waive fees to keep the Funds'
total expense ratio at specific levels. SIMC and the other service providers
currently expect to waive fees to keep the Funds' total expense ratios at
current levels. While SIMC's and the Fund service providers' voluntary fee
waivers may be discontinued at any time, SIMC and the Fund service providers
have no current intention of discontinuing these voluntary fee waivers.
Accordingly, implementation of a "manager of managers" structure will not result
in increased Fund fees and expenses to shareholders.
WHY AM I BEING ASKED TO VOTE FOR CHANGES TO MY FUND'S INVESTMENT POLICIES AND
RESTRICTIONS?
The Board of Trustees believes that it would benefit shareholders of the Funds
to update the Funds' fundamental investment policies. Some of the Funds'
policies reflect government regulations that no longer exist. In other cases,
policies are more restrictive than current government regulations require. The
proposed changes in investment policies will benefit shareholders by allowing
the Funds to adapt more quickly to future changes in investment opportunities.
It is currently expected that the proposed changes to investment policies will
not have a material impact on the manner in which the Funds are managed.
WILL MY VOTE MAKE A DIFFERENCE?
Yes. Your vote is needed to ensure that the proposals can be acted upon.
Additionally, your immediate response on the enclosed proxy card will help save
the costs of any further solicitations for shareholder votes. We encourage all
shareholders to participate in the governance of their Fund.
HOW DO THE TRUSTEES SUGGEST THAT I VOTE?
After careful consideration, the Trustees of your Fund, including the
Independent Trustees who comprise a majority of each Fund's Board of Trustees,
unanimously recommend that you vote "FOR" the proposals.
WHOM DO I CALL IF I HAVE QUESTIONS?
We will be happy to answer your questions about this proxy solicitation. Please
call us at 1-800-DIAL-SEI between 9:00 a.m. and 5:00 p.m., Eastern Standard
Time, Monday through Friday.
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HOW CAN I VOTE MY SHARES?
Please refer to your proxy card for instructions on how to vote.
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SEI LIQUID ASSET TRUST
SEI TAX EXEMPT TRUST
SEI DAILY INCOME TRUST
SEI INDEX FUNDS
SEI INSTITUTIONAL MANAGED TRUST
SEI INSTITUTIONAL INTERNATIONAL TRUST
SEI ASSET ALLOCATION TRUST
101 FEDERAL STREET
BOSTON, MA 02110
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON
OCTOBER 27, 2004
Notice is hereby given that a special meeting of shareholders (the
"Meeting") of SEI Liquid Asset Trust, SEI Tax Exempt Trust, SEI Daily Income
Trust, SEI Index Funds, SEI Institutional Managed Trust, SEI Institutional
International Trust and SEI Asset Allocation Trust (collectively, the "Trusts")
and each of their portfolios (the "Funds") will be held at the offices of SEI
Investments Management Corporation ("SIMC"), One Freedom Valley Drive, Oaks,
Pennsylvania 19456, on October 27, 2004, at [MEETING TIME] (Eastern time).
The purpose of the Meeting is to consider the Proposals set forth below
and to transact such other business as may be properly brought before the
Meeting or any adjournment(s) thereof. The specifics of these Proposals, which
are more fully described in the attached Proxy Statement, are as follows:
1. To elect Trustees for all Funds.
2. To approve a "manager of managers" structure for: the Bond Index Fund of
SEI Index Funds; the Short-Duration Government, Intermediate-Duration
Government, GNMA, and Corporate Daily Income Funds of SEI Daily Income
Trust; and the California Tax Exempt, Tax Free, Institutional Tax Free, and
Pennsylvania Tax Free Funds of SEI Tax Exempt Trust.
3. To approve SIMC as investment adviser for: the Bond Index Fund of SEI Index
Funds; the Short-Duration Government, Intermediate-Duration Government,
GNMA, and Corporate Daily Income Funds of SEI Daily Income Trust; and the
California Tax Exempt, Tax Free, Institutional Tax Free, and Pennsylvania
Tax Free Funds of SEI Tax Exempt Trust; and to approve an investment
advisory agreement with SIMC and these Funds.
4. To approve eliminating or reclassifying certain fundamental policies and
restrictions for all Funds, except for: the Treasury Securities Fund of SEI
Liquid Asset Trust and the Money Market, Prime Obligation, Government,
Treasury and Treasury II Funds of SEI Daily Income Trust.
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Shareholders also will be asked to vote on such other business as may
properly come before the Meeting.
Proposal 1 asks for shareholder approval of Trustees.
Proposal 2 asks for shareholder approval of a "manager of managers"
structure for the Bond Index Fund of SEI Index Funds, the Short-Duration
Government, Intermediate-Duration Government, GNMA and Corporate Daily Income
Funds of SEI Daily Income Trust, and the California Tax Exempt, Tax Free,
Institutional Tax Free and Pennsylvania Tax Free Funds of SEI Tax Exempt Trust.
Under this structure, each Fund will have an investment adviser and one or more
sub-advisers. This structure would allow the Trustees to appoint additional and
replacement investment sub-advisers for the Funds WITHOUT obtaining shareholder
approval of the sub-advisers. Proposal 3 asks for shareholder approval of SIMC
as investment adviser and "manager of managers" to each Fund and the approval of
an investment advisory agreement between SIMC and each Trust, on behalf of the
Funds. To implement the "manager of managers" structure described under
Proposal 2, with SIMC serving as each Fund's "manager of managers," shareholders
must approve Proposals 2 and 3. If shareholders do not approve both Proposals,
neither Proposal will be implemented and the Trustees will consider an
alternative course of action.
Proposal 4 asks for shareholder approval of changes to certain
investment policies and restrictions of the Funds.
All shareholders are 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. You may also
vote by telephone or through the Internet.
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 a Trust's President at One Freedom
Valley Drive, Oaks, Pennsylvania 19456, by properly executing a later-dated
proxy, or by attending the Meeting and voting in person. In accordance with
their own discretion, the proxies are authorized to vote on such other business
as may properly come before the Meeting or any adjourned session(s) thereof.
Shareholders of record at the close of the business on August 17, 2004
are entitled to notice of and to vote at the Meeting or any adjournment(s)
thereof.
BY ORDER OF THE BOARD OF TRUSTEES
TIMOTHY D. BARTO, SECRETARY
September 9, 2004
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SEI LIQUID ASSET TRUST
SEI TAX EXEMPT TRUST
SEI DAILY INCOME TRUST
SEI INDEX FUNDS
SEI INSTITUTIONAL MANAGED TRUST
SEI INSTITUTIONAL INTERNATIONAL TRUST
SEI ASSET ALLOCATION TRUST
101 FEDERAL STREET
BOSTON, MA 02110
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Trustees of SEI Liquid Asset Trust ("SLAT"), SEI Tax
Exempt Trust ("STET"), SEI Daily Income Trust ("SDIT"), SEI Index Funds
("INDEX"), SEI Institutional Managed Trust ("SIMT"), SEI Institutional
International Trust ("SIT") and SEI Asset Allocation Trust ("SAAT")
(collectively, the "Trusts") and each of their portfolios (collectively, the
"Funds") for use at the special meeting of shareholders to be held on October
27, 2004 at [MEETING TIME] (Eastern time) at the offices of SEI Investments
Management Corporation ("SIMC"), One Freedom Valley Drive, Oaks, Pennsylvania
19456, and at any adjourned session(s) thereof (such meeting and any
adjournments thereof are hereinafter referred to as the "Meeting"). Shareholders
of record of the Funds at the close of business on August 17, 2004 are entitled
to vote at the Meeting ("Shareholders").
As of August 17, 2004, the net assets and the approximate number of
units of beneficial interest ("shares") issued and outstanding for each Fund
were as follows:
<Table>
<Caption>
SHARES
FUND NET ASSETS OUTSTANDING
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SEI LIQUID ASSET TRUST
Treasury Securities Fund $
Prime Obligation Fund $
SEI TAX EXEMPT TRUST
Intermediate-Term Municipal Fund $
Short Duration Municipal Fund $
California Municipal Bond Fund $
Massachusetts Municipal Bond Fund $
New Jersey Municipal Bond Fund $
New York Municipal Bond Fund $
Pennsylvania Municipal Bond Fund $
Institutional Tax Free Fund $
Tax Free Fund $
California Tax Exempt Fund $
Pennsylvania Tax Free Fund $
Massachusetts Tax Free Money Market Fund $
</Table>
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<Table>
SEI DAILY INCOME TRUST
Corporate Daily Income Fund $
Short-Duration Government Fund $
Intermediate-Duration Government Fund $
GNMA Fund $
Money Market Fund $
Prime Obligation Fund $
Government Fund $
Government II Fund $
Treasury Fund $
Treasury II Fund $
SEI INDEX FUNDS
Bond Index Fund $
S&P 500 Index Fund $
SEI INSTITUTIONAL MANAGED TRUST
Large Cap Value Fund $
Large Cap Growth Fund $
Tax-Managed Large Cap Fund $
Small Cap Value Fund $
Small Cap Growth Fund $
Tax-Managed Small Cap Fund $
Mid-Cap Fund $
Core Fixed Income Fund $
High Yield Bond Fund $
Real Estate Fund $
SEI INSTITUTIONAL INTERNATIONAL TRUST
International Equity Fund $
International Fixed Income Fund $
Emerging Markets Equity Fund $
Emerging Markets Debt Fund $
SEI ASSET ALLOCATION TRUST
Diversified Conservative Income Fund $
Diversified Conservative Fund $
Diversified Global Moderate Growth Fund $
Diversified Moderate Growth Fund $
Diversified Global Growth Fund $
Diversified Global Stock Fund $
Diversified U.S. Stock Fund $
Defensive Strategy Fund $
Tax-Managed Defensive Strategy Fund $
Conservative Strategy Fund $
Tax-Managed Conservative Strategy Fund $
Moderate Strategy Fund $
Tax-Managed Moderate Strategy Fund $
Aggressive Strategy Fund $
</Table>
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<Table>
Tax-Managed Aggressive Strategy Fund $
Core Market Strategy Fund $
Tax-Managed Core Market Strategy Fund $
Market Growth Strategy Fund $
Tax-Managed Market Growth Strategy Fund $
</Table>
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. Each Fund will be voting separately and each Fund's
votes will be counted separately for each Proposal. If a Fund approves a
Proposal while one or more Funds do not approve that Proposal, the Proposal will
be implemented only with respect to the Fund or Funds that have approved that
Proposal.
In addition to the solicitation of proxies by mail, Trustees and
officers of each Trust and officers and employees of SIMC, the Shareholder
Servicing Agent for the Trusts, and certain third parties hired for such
purpose, may solicit proxies in person, by Internet or by telephone. The Funds
will bear the costs of the Meeting and costs of any solicitation in connection
with the meeting. The Funds will use Georgeson Shareholder, third party
solicitor, for solicitation of proxies. Georgeson Shareholder may solicit
proxies in person, by Internet or by telephone. The Funds expect to pay
approximately $[SOLICITATION FEE] to Georgeson Shareholder. Persons holding
shares as nominees will, upon request, be reimbursed for their reasonable
expenses incurred in sending soliciting materials to their principals. The proxy
card and this Proxy Statement are being mailed to Shareholders on or about
September 9, 2004.
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 Trusts' President at One
Freedom Valley Drive, Oaks, Pennsylvania 19456, by properly executing a
later-dated proxy, or by attending the Meeting and voting in person.
INTRODUCTION
Each Trust is organized as a Massachusetts business trust and is not
required to hold annual shareholder meetings. The Meeting is being called in
order to permit Shareholders to vote on: (i) the election of Trustees; (ii) a
new "manager of managers" structure for certain Funds; (iii) the selection of a
new investment adviser for certain Funds; and (iv) changes to certain investment
policies and restrictions for certain Funds. The summary voting table below sets
forth the action required of each Fund.
<Table>
<Caption>
NO. PROPOSAL FUND
--- -------- ----
1. TO ELECT TRUSTEES FOR ALL FUNDS All Funds; Shareholders of each Trust voting
together with other Shareholders of that Trust
2. TO APPROVE A "MANAGER OF MANAGERS" STRUCTURE Bond Index Fund of INDEX; Short-Duration
Government, Intermediate-Duration Government,
GNMA, and Corporate Daily Income Funds of
SDIT; and California Tax Exempt, Tax Free,
Institutional Tax Free, and Pennsylvania Tax
Free Funds of STET.
3. TO APPROVE SIMC AS INVESTMENT Bond Index Fund of INDEX; Short-Duration
</Table>
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<Table>
ADVISER, AND TO APPROVE AN INVESTMENT Government, Intermediate-Duration Government,
ADVISORY AGREEMENT WITH SIMC GNMA, and Corporate Daily Income Funds of
SDIT; and California Tax Exempt, Tax Free,
Institutional Tax Free, and Pennsylvania Tax
Free Funds of STET; Shareholders of each Fund
voting separately
4. TO APPROVE ELIMINATING OR RECLASSIFYING CERTAIN All Funds, except for the Treasury Securities
FUNDAMENTAL POLICIES AND RESTRICTIONS Fund of SLAT and the Money Market, Prime
Obligation, Government, Treasury, and
Treasury II Funds of SDIT; Shareholders of each
Fund voting separately
</Table>
Shareholders also will be asked to vote on such other business as may
properly come before the Meeting.
RELATIONSHIP AMONG PROPOSALS 2 AND 3. TO IMPLEMENT THE "MANAGER OF
MANAGERS" STRUCTURE WITH SIMC SERVING AS EACH FUND'S "MANAGER OF MANAGERS,"
SHAREHOLDERS MUST APPROVE PROPOSALS 2 AND 3. NEITHER PROPOSAL WILL BE
IMPLEMENTED WITH RESPECT TO A FUND IF SHAREHOLDERS OF THAT FUND DO NOT APPROVE
BOTH PROPOSALS. IF SHAREHOLDERS OF A FUND DO NOT APPROVE BOTH PROPOSALS, THE
TRUSTEES WILL CONSIDER AN ALTERNATE COURSE OF ACTION FOR THE FUND.
IMPLEMENTATION OF THESE PROPOSALS WILL NOT RESULT IN INCREASED FUND FEES
OR EXPENSES TO SHAREHOLDERS.
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PROPOSAL 1. TO ELECT TRUSTEES FOR ALL FUNDS.
Shareholders are being asked to elect Rosemarie B. Greco, Nina Lesavoy
and James M. Williams (each a "Nominee" and, collectively, the "Nominees") as
Trustees for each Trust. The Board of Trustees recommends that Shareholders
elect the three Nominees to serve as Trustees, each to hold office until a
successor is duly elected and qualified.
Rosemarie B. Greco and Nina Lesavoy are currently members of the Board.
Messes. Greco and Lesavoy were each appointed to the Board by the Board of
Trustees on March 20, 2000 and September 17, 2003, respectively. Mr. James M.
Williams was nominated by the Nominating Committee to the Board on June 17, 2004
and appointed by the Board on [DATE OF APPOINTMENT], subject to approval of his
election by Shareholders, as required under the 1940 Act.
Each Nominee has consented to being named in this Proxy Statement and to
serving as Trustee if elected. The Trusts know of no reason why any Nominee
would be unable or unwilling to serve as Trustee if elected.
INFORMATION ABOUT CURRENT TRUSTEES AND NOMINEES FOR ELECTION AS
TRUSTEES. The business and affairs of each Trust, including all of the Funds,
are managed under the direction of its Board of Trustees. The table below
provides basic information about each Nominee and each current Trustee. The
mailing address for each Nominee and each Trustee, except for the mailing
address for William M. Doran, is One Freedom Valley Drive, Oaks, Pennsylvania
19456. The mailing address for Mr. Doran is 1701 Market Street, Philadelphia, PA
19103.
<Table>
<Caption>
NUMBER
OF FUNDS
IN THE
FUND
POSITION TERM OF OFFICE PRINCIPAL OCCUPATION DURING THE PAST COMPLEX
NAME AND WITH THE AND LENGTH OF FIVE YEARS AND OTHER DIRECTORSHIPS TO BE
AGE TRUSTS TIME SERVED HELD BY TRUSTEE OR NOMINEE OVERSEEN
---- ------ ----------- --------------- --------
NOMINEES FOR INDEPENDENT TRUSTEES
Rosemarie B. Trustee No set term; served Director, Governor's Office of Health Care Reform, 68
Greco; 58 since 1999. Commonwealth of Pennsylvania since 2003. Founder and
Principal, Grecoventures Ltd. from 1999 to 2002.
Interim President & Chief Executive Officer, Private
Industry Council of Philadelphia, April 1998-August
1998. President, Corestates Financial Corp.,
1996-1997; Chief Executive Officer and President,
Corestates Bank, N.A., 1994-1997. Director of Sunoco,
Inc. and Exelon Corporation. Trustee of Pennsylvania
Real Estate Investment Trust, SEI Asset Allocation
Trust, SEI Daily Income Trust, SEI Institutional
International Trust, SEI Institutional Investments
Trust, SEI Institutional Managed Trust, SEI Index
Funds, SEI Liquid Asset Trust and SEI Tax Exempt
Trust.
Nina Lesavoy; Trustee No set term; served Partner, Cue Capital since 2002. Head of 68
</Table>
14
<Page>
<Table>
47 since 2003. Sales, Investorforce, January 2000-December 2001.
Global Partner working for the CEO, Invesco Capital,
January 1998-January 2000. Head of Sales and Client
Services, Chancellor Capital and later LGT Asset
Management, 1986-2000. Trustee of SEI Absolute Return
Master Fund, L.P., SEI Opportunity Master Fund, L.P.,
SEI Absolute Return Fund, L.P., SEI Opportunity Fund,
L.P., SEI Asset Allocation Trust, SEI Tax Exempt Trust,
SEI Daily Income Trust, SEI Institutional Managed Trust,
SEI Index Funds, SEI Liquid Asset Trust, SEI
Institutional International Trust and SEI Institutional
Investments Trust.
James M. No set term. Vice President and Chief Investment Officer, J. Paul
Williams; 56 Getty Trust, Non Profit Foundation Visual Arts, since
December 2002. President, Harbor Capital Investors and
Harbor Mutual Funds, 2000-2002. Manager, Pension Asset
Management, Ford Motor Company, 1997-1999.
CURRENT INDEPENDENT TRUSTEES
F. Wendell Trustee No set term; served Retired. Trustee of SEI Asset Allocation Trust, SEI 68
Gooch; 71 SDIT since 1982; SAAT Daily Income Trust, SEI Institutional International
since 1995; INDEX Trust, SEI Institutional Investments Trust, SEI
since 1985; SIT since Institutional Managed Trust, SEI Index Funds, SEI Liquid
1988; SIMT since 1986; Asset Trust, SEI Tax Exempt Trust, STI Classic Funds and
SLAT since 1995; STET STI Classic Variable Trust.
since 1982.
James M. Trustee No set term; served Attorney, Solo Practitioner since 1994. Partner, Dechert 68
Storey; 73 since 1995. Price & Rhoads (law firm), September 1987-December 1993.
Director of U.S. Charitable Gift Trust. Trustee of The
Advisors' Inner Circle Fund, The Arbor Fund, Expedition
Funds, The MDL Funds, Massachusetts Health and Education
Tax-Exempt Trust, SEI Asset Allocation Trust, SEI Daily
Income Trust, SEI Institutional International Trust, SEI
Institutional Investments Trust, SEI Institutional
Managed Trust, SEI Index Funds, SEI Liquid Asset Trust
and SEI Tax Exempt Trust.
George J. Trustee No set term; served Self-employed Consultant, Newfound Consultants Inc. 68
Sullivan, Jr.; since 1996. since April 1997. Trustee of State Street Navigator
61 Securities Lending Trust, The Advisors' Inner Circle
Fund, The Arbor Fund, Expedition Funds, The MDL Funds,
SEI Absolute Return Master Fund, L.P., SEI Opportunity
Master Fund, L.P., SEI Absolute Return Fund, L.P., SEI
Opportunity Fund, L.P., SEI Asset Allocation Trust, SEI
Daily Income Trust, SEI Institutional International
Trust, SEI Institutional Investments Trust, SEI
Institutional Managed Trust, SEI Index Funds, SEI Liquid
Asset Trust and SEI Tax Exempt Trust.
</Table>
15
<Page>
<Table>
CURRENT INTERESTED TRUSTEES
William M. Trustee No set term; served Self-employed Consultant. Partner, Morgan, Lewis & 68
Doran; 64 SDIT since 1982; SAAT Bockius LLP (law firm) from 1976 to 2003, counsel to the
1995; INDEX since Trusts, SEI Investments Company, SIMC, SEI Investments
1985; SIT since 1988; Fund Management and SEI Investments Distribution Co.
SIMT since 1986; SLAT Director of SEI Investments Company since 1974;
since 1995; STET since Secretary of SEI Investments Company since 1978.
1982. Director of SEI Investments Distribution Co. since 2003.
Trustee of The Advisors' Inner Circle Fund, The Arbor
Fund, Expedition Funds, The MDL Funds, SEI Asset
Allocation Trust, SEI Daily Income Trust, SEI
Institutional International Trust, SEI Institutional
Investments Trust, SEI Institutional Managed Trust, SEI
Index Funds, SEI Liquid Asset Trust and SEI Tax Exempt
Trust.
Robert A. Chairman No set term; served Currently performs various services on behalf of SEI 68
Nesher; 58 SDIT since 1982; SAAT Investments Company for which Mr. Nesher is compensated.
1995; INDEX since Executive Vice President of SEI Investments Company,
1985; SIT since 1988; 1986-1994. Director and Executive Vice President of
SIMT since 1986; SLAT SIMC, SEI Investments Fund Management and SEI
since 1995; STET since Investments Distribution Co., 1981-1994. Trustee of The
1982. Advisors' Inner Circle Fund, The Arbor Fund, Bishop
Street Funds, Expedition Funds, The MDL Funds, SEI
Global Master Fund, plc, SEI Global Assets Fund, plc,
SEI Global Investments Fund, plc, SEI Investments
Global, Limited, SEI Absolute Return Master Fund, L.P.,
SEI Opportunity Master Fund, L.P., SEI Absolute Return
Fund, L.P., SEI Opportunity Fund, L.P., SEI Asset
Allocation Trust, SEI Daily Income Trust, SEI
Institutional International Trust, SEI Institutional
Investments Trust, SEI Institutional Managed Trust, SEI
Index Funds, SEI Liquid Asset Trust and SEI Tax Exempt
Trust.
</Table>
Messrs. Nesher and Doran are Trustees who may be deemed to be
"interested persons" of the Funds, as that term is defined in the 1940 Act
("Interested Trustees"), by virtue of their relationship with SIMC, which serves
as investment adviser to certain Funds, and SEI Investments Distribution Co.,
the Funds' distributor.
MEETINGS AND COMMITTEES OF THE BOARD OF TRUSTEES. The chart below
provides information about the number of Board meetings held during each Trust's
most recently completed fiscal year and which Board members attended such
meetings.
16
<Page>
<Table>
<Caption>
NUMBER OF
BOARD
MEETINGS
HELD DURING
MOST RECENT TRUSTEES WHO ATTENDED THE
TRUST AND FISCAL YEAR FISCAL YEAR MEETING
- --------------------- ----------- -------
SEI Liquid Asset Trust 9 The Trustees attended all meetings, except
June 30, 2004 for Mr. Gooch and Ms. Greco, who were each
absent from one meeting.
SEI Tax Exempt Trust 8 The Trustees attended all meetings, except
August 31, 2003 for Mr. Gooch and Ms. Greco, who were each
absent from one meeting.
SEI Daily Income Trust 9 The Trustees attended all meetings, except
January 31, 2004 for Mr. Gooch and Ms. Greco, who were each
absent from one meeting.
SEI Index Funds 9 The Trustees attended all meetings, except
March 31, 2004 for Mr. Gooch and Ms. Greco, who were each
absent from one meeting.
SEI Institutional Managed Trust 9 The Trustees attended all meetings, except
September 30, 2003 for Mr. Gooch and Ms. Greco, who were each
absent from one meeting.
SEI Institutional International Trust 9 The Trustees attended all meetings, except
September 30, 2003 for Mr. Gooch and Ms. Greco, who were each
absent from one meeting.
SEI Asset Allocation Trust 9 The Trustees attended all meetings, except
March 31, 2004 for Mr. Gooch and Ms. Greco, who were each
absent from one meeting.
</Table>
Each Trust has a standing Audit Committee currently consisting of
Messrs. Gooch, Storey and Sullivan, and Messes. Greco and Lesavoy, each of whom
are not "interested persons" as such term is defined in the 1940 Act
(collectively, the "Independent Trustees"). The Audit Committee assists the
Trustees in their oversight of the Trusts' financial reporting. The chart below
provides information about the number of Audit Committee Meetings held during
each Trust's most recently completed fiscal year and which Audit Committee
members attended such meetings.
<Table>
<Caption>
NUMBER OF
AUDIT
COMMITTEE
MEETINGS
HELD DURING
MOST RECENT AUDIT COMMITTEE MEMBERS
TRUST AND FISCAL YEAR FISCAL YEAR WHO ATTENDED THE MEETING
- --------------------- ----------- ------------------------
SEI Liquid Asset Trust 4 The Audit Committee members attended all
June 30, 2004 meetings.
SEI Tax Exempt Trust 4 The Audit Committee members attended all
August 31, 2003 meetings, except for Mr. Gooch, who was
absent from one meeting.
SEI Daily Income Trust 4 The Audit Committee members attended all
January 31, 2004 meetings, except for Mr. Storey, who was
absent from one meeting.
SEI Index Funds 4 The Audit Committee members attended all
March 31, 2004 meetings, except for Mr. Storey, who was
absent from one meeting.
SEI Institutional Managed Trust 4 The Audit Committee members attended all
September 30, 2003 meetings except for Mr. Gooch, who was
absent from one meeting.
SEI Institutional International Trust 4 The Audit Committee members attended all
September 30, 2003 meetings except for Mr. Gooch, who was
absent from one meeting.
SEI Asset Allocation Trust 5 The Audit Committee members attended all
March 31, 2004 meetings, except for Mr. Storey, who was
absent from one meeting.
</Table>
17
<Page>
Each Trust has a standing Nominating Committee currently consisting of
the Independent Trustees. The Nominating Committee is responsible for evaluating
and recommending nominees for election to the Board. The Nominating Committee
meets as necessary and the chart below provides information about the number of
Nominating Committee Meetings held during each Trust's most recently completed
fiscal year.
<Table>
<Caption>
NUMBER OF NOMINATING
COMMITTEE MEETINGS HELD
TRUST AND FISCAL YEAR DURING MOST RECENT FISCAL YEAR
- --------------------- ------------------------------
SEI Liquid Asset Trust 2
June 30, 2004
SEI Tax Exempt Trust 1
August 31, 2003
SEI Daily Income Trust 1
January 31, 2004
SEI Index Funds 2
March 31, 2004
SEI Institutional Managed Trust 1
September 30, 2003
SEI Institutional International Trust 1
September 30, 2003
SEI Asset Allocation Trust 2
March 31, 2004
</Table>
The Nominating Committee has adopted a charter, a copy of which is
attached hereto as Exhibit A. It is the Nominating Committee's policy to review
shareholder recommendations for nominations to fill vacancies on the Board if
such recommendations are submitted in writing and addressed to the Nominating
Committee at the applicable Trust's offices.
The Trusts do not have a standing compensation committee or any
committee performing similar functions.
COMPENSATION OF THE TRUSTEES, OFFICERS AND OTHERS. The Interested
Trustees and officers of the Trusts do not receive compensation from the Trusts.
The chart below provides information about the annual fee that each Independent
Trustee receives from each Trust, total compensation accrued and payable to the
Independent Trustees by each Trust and the "fund complex" for each Trust's most
recently completed fiscal year. The "fund complex" is composed of all of the
Funds and the portfolios of SEI Institutional Investments Trust.
<Table>
<Caption>
PENSION OR
RETIREMENT
ANNUAL BENEFITS ESTIMATED
NAME OF FEE ACCRUED AS ANNUAL TOTAL
INDEPENDENT PAYABLE TOTAL PART OF BENEFITS COMPENSATION
TRUSTEE AND TO COMPENSATION FUND UPON FROM FUND
FISCAL YEAR TRUSTEE FROM TRUST EXPENSES RETIREMENT COMPLEX
----------- ------- ---------- -------- ---------- -------
SEI LIQUID ASSET TRUST - FISCAL YEAR ENDED JUNE 30, 2004 (* AS OF JUNE 30, 2003)
F. Wendell Gooch $ 4,527 N/A N/A $ 133,000
</Table>
18
<Page>
<Table>
<Caption>
PENSION OR
RETIREMENT
ANNUAL BENEFITS ESTIMATED
NAME OF FEE ACCRUED AS ANNUAL TOTAL
INDEPENDENT PAYABLE TOTAL PART OF BENEFITS COMPENSATION
TRUSTEE AND TO COMPENSATION FUND UPON FROM FUND
FISCAL YEAR TRUSTEE FROM TRUST EXPENSES RETIREMENT COMPLEX
----------- ------- ---------- -------- ---------- -------
James M. Storey $ 4,527 N/A N/A $ 133,000
George J. Sullivan, Jr. $ 4,527 N/A N/A $ 133,000
Rosemarie B. Greco $ 4,527 N/A N/A $ 133,000
Nina Lesavoy -- N/A N/A --
SEI TAX EXEMPT TRUST - FISCAL YEAR ENDED AUGUST 31, 2003
F. Wendell Gooch $ 18,391 N/A N/A $ 133,000
James M. Storey $ 18,391 N/A N/A $ 133,000
George J. Sullivan, Jr. $ 18,391 N/A N/A $ 133,000
Rosemarie B. Greco $ 18,391 N/A N/A $ 133,000
Nina Lesavoy -- N/A N/A --
SEI DAILY INCOME TRUST - FISCAL YEAR ENDED JANUARY 31, 2004
F. Wendell Gooch $ 14,707 N/A N/A $ 133,000
James M. Storey $ 14,707 N/A N/A $ 133,000
George J. Sullivan, Jr. $ 14,707 N/A N/A $ 133,000
Rosemarie B. Greco $ 14,707 N/A N/A $ 133,000
Nina Lesavoy $ 7,831 N/A N/A $ 66,500
SEI INDEX FUNDS - FISCAL YEAR ENDED MARCH 31, 2004
F. Wendell Gooch $ 4,114 N/A N/A $ 133,000
James M. Storey $ 4,114 N/A N/A $ 133,000
George J. Sullivan, Jr. $ 4,114 N/A N/A $ 133,000
Rosemarie B. Greco $ 4,114 N/A N/A $ 133,000
Nina Lesavoy $ 3,143 N/A N/A $ 99,750
SEI ASSET ALLOCATION TRUST - FISCAL YEAR ENDED MARCH 31, 2004
F. Wendell Gooch $ 13,888 N/A N/A $ 133,000
James M. Storey $ 13,888 N/A N/A $ 133,000
George J. Sullivan, Jr. $ 13,888 N/A N/A $ 133,000
Rosemarie B. Greco $ 13,888 N/A N/A $ 133,000
Nina Lesavoy $ 11,478 N/A N/A $ 99,750
SEI INSTITUTIONAL MANAGED TRUST - FISCAL YEAR ENDED SEPTEMBER 30, 2003
F. Wendell Gooch $ 33,250 N/A N/A $ 133,000
James M. Storey $ 33,250 N/A N/A $ 133,000
George J. Sullivan, Jr. $ 33,250 N/A N/A $ 133,000
Rosemarie B. Greco $ 33,250 N/A N/A $ 133,000
Nina Lesavoy [--] N/A N/A [--]
SEI INSTITUTIONAL INTERNATIONAL TRUST - FISCAL YEAR ENDED SEPTEMBER 30, 2003
F. Wendell Gooch $ 12,578 N/A N/A $ 133,000
James M. Storey $ 12,578 N/A N/A $ 133,000
George J. Sullivan, Jr. $ 12,578 N/A N/A $ 133,000
Rosemarie B. Greco $ 12,578 N/A N/A $ 133,000
Nina Lesavoy $ [3,668] N/A N/A $ [33,250]
</Table>
OWNERSHIP OF FUND SECURITIES. The table below shows the dollar range of
equity securities beneficially owned by each Nominee or Trustee as of June 30,
2004.
19
<Page>
<Table>
<Caption>
AGGREGATE DOLLAR
RANGE OF EQUITY
SECURITIES IN ALL FUNDS
OVERSEEN BY TRUSTEE OR
NAME OF TRUSTEE OR DOLLAR RANGE OF EQUITY SECURITIES NOMINEE IN THE
NOMINEE FOR EACH FUND FUND COMPLEX
- ------- ------------- --------------------
Mr. Nesher Over $100,000 (SIMT Core Fixed Income Fund) Over $100,000
Over $100,000 (SIMT Large Cap Growth Fund)
Over $100,000 (SIMT Large Cap Value Fund)
$1-$10,000 (SIMT Small Cap Growth Fund)
Mr. Doran
Mr. Gooch Over $100,000 (SIMT Small Cap Growth Fund) Over $100,000
$10,001-$50,000 (SIT International Equity Fund)
Over $100,000 (SDIT Prime Obligation Fund)
Mr. Storey
Mr. Sullivan None None
Ms. Greco None None
Ms. Lesavoy
Mr. Williams None None
</Table>
Proposal 2. To approve a "manager of managers" structure for: the Bond Index
Fund of INDEX; the Short-Duration Government,
Intermediate-Duration Government, GNMA, and Corporate Daily
Income Funds of SDIT; and the California Tax Exempt, Tax Free,
Institutional Tax Free, and Pennsylvania Tax Free Funds of STET.
The Board of Trustees recommends that Shareholders approve a "manager of
managers" structure for the Bond Index Fund of INDEX; the Short-Duration
Government, Intermediate-Duration Government, GNMA, and Corporate Daily Income
Funds of SDIT; and the California Tax Exempt, Tax Free, Institutional Tax Free,
and Pennsylvania Tax Free Funds of STET, as described below.
SEC EXEMPTIVE ORDER AND SHAREHOLDER APPROVAL. Proposal 2 seeks
Shareholder approval to implement a "manager of managers" structure for each
Fund. Under this structure, each Fund will have an investment adviser and one or
more sub-advisers. The Board of Trustees will be permitted to approve or
terminate investment sub-advisers, based on the recommendation of SIMC as
investment adviser, WITHOUT shareholder approval. Normally, shareholders of a
mutual fund must approve investment advisory agreements for the mutual fund. To
operate a "manager of managers" structure efficiently, however, the Trusts have
obtained an exemption from the U.S. Securities and Exchange Commission ("SEC")
from the shareholder approval requirements, subject to certain conditions. One
condition of the SEC exemption order is that, before a Fund relies on the
exemption and implements a "manager of managers" structure, that Fund's
shareholders
20
<Page>
must approve the "manager of managers" structure. All of the other Funds in the
SEI Funds family have implemented this "manager of managers" structure, and SIMC
currently serves as investment adviser and "manager of managers" for those
Funds.
DESCRIPTION OF THE PROPOSED "MANAGER OF MANAGERS" STRUCTURE. Under the
proposed "manager of managers" structure, each Fund will be operated in a manner
that is different from many other mutual funds. Most mutual funds operate under
a structure in which a single entity, the fund's adviser, provides investment
advisory services to the fund. Typically, the fund pays an advisory fee to the
fund's adviser and the adviser, in turn, compensates the adviser's portfolio
managers who make specific securities selections for the fund. In contrast,
under the "manager of managers" structure, a Fund will pay SIMC an advisory fee
and SIMC, in turn, will hire sub-advisers to provide day-to-day investment
advisory services to the Fund. Under this structure, shareholders will have the
benefit of SIMC's expertise in selecting and monitoring investment sub-advisers.
SIMC will continuously monitor the performance of the sub-advisers and may from
time to time recommend that the Board of Trustees replace one or more
sub-advisers or appoint additional sub-advisers, depending on SIMC's assessment
of what combination of sub-advisers it believes would optimize a Fund's chances
of achieving its investment objective. The Board would be able to approve the
addition or termination of sub-advisers without shareholder approval.
Any proposal to add or replace sub-advisers would be reviewed as
follows. First, SIMC would assess a Fund's needs and, if it believed additional
or replacement sub-advisers could benefit the Fund, would systematically search
the relevant universe of available investment sub-advisers. Second, any
recommendations made by SIMC would have to be approved by a majority of the
Trustees, including a majority of the Trustees who are not parties to the
investment sub-advisory agreement or "interested persons," as defined under the
1940 Act, of any party to the investment sub-advisory agreement. Finally, any
selections of additional or replacement sub-advisers would have to comply with
conditions contained in the SEC exemption.
The proposed "manager of managers" structure is intended to afford the
Funds increased management flexibility. With the "manager of managers"
structure, the Trustees will not be required to call a shareholder meeting each
time a new sub-adviser is approved and A FUND WILL NOT INCUR THE CONSIDERABLE
EXPENSE OF HOLDING SHAREHOLDER MEETINGS TO APPROVE SUB-ADVISERS.
TRUSTEES' CONSIDERATIONS. In unanimously approving the "manager of
managers" structure for the Funds and in recommending that Shareholders also
approve this structure, the Trustees reviewed SIMC's expertise as a "manager of
managers," including SIMC's experience in serving as "manager of managers" for
the other Funds in the SEI Funds family. In addition, the Trustees considered
the flexibility the Funds will have under a "manager of managers" structure to
implement sub-adviser changes, without shareholder approval and without the
Funds incurring the considerable costs of obtaining shareholder approval, when
the Board determines that such changes are advisable.
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS VOTE "FOR" PROPOSAL
2.
21
<Page>
Proposal 3. To approve SIMC as investment adviser for: the Bond Index Fund
of INDEX; the Short-Duration Government, Intermediate-Duration
Government, GNMA, and Corporate Daily Income Funds of SDIT; and
the California Tax Exempt, Tax Free, Institutional Tax Free, and
Pennsylvania Tax Free Funds of STET; and to approve an investment
advisory agreement with SIMC and these Funds.
The Board of Trustees recommends that Shareholders approve SIMC as the
investment adviser of the Bond Index Fund of INDEX; the Short-Duration
Government, Intermediate-Duration Government, GNMA, and Corporate Daily Income
Funds of SDIT; and the California Tax Exempt, Tax Free, Institutional Tax Free,
and Pennsylvania Tax Free Funds of STET, and approve the investment advisory
agreements (each an "Investment Advisory Agreement" and, collectively, the
"Investment Advisory Agreements") between the Trusts and SIMC relating to these
Funds (which are attached as Exhibits B, C and D to this Proxy Statement). The
description of the Investment Advisory Agreements in this Proxy Statement is
qualified in its entirety by reference to Exhibits B, C and D. The Trustees,
including all of the Trustees who are not parties to the Investment Advisory
Agreements or "interested persons," as defined under the 1940 Act, of any party
to the Investment Advisory Agreements, unanimously approved SIMC as investment
adviser for each Fund and the Investment Advisory Agreements with respect to
each Fund at a meeting held on June 17, 2004.
CURRENT INVESTMENT ADVISORY ARRANGEMENTS. Standish Mellon Asset
Management Company LLC ("Standish Mellon") serves as investment adviser to the
Bond Index Fund of INDEX pursuant to an investment advisory agreement with INDEX
dated October 2, 1995. Wellington Management Company, LLP ("Wellington
Management") serves as investment adviser to the Short-Duration Government,
Intermediate-Duration Government and GNMA Funds of SDIT, and the Corporate Daily
Income Fund of SDIT pursuant to investment advisory agreements with SDIT dated
December 15, 1986 and August 4, 1993, respectively. Weiss Peck and Greer
Investments ("WPG") serves as investment adviser to the California Tax Exempt,
Tax Free, Institutional Tax Free, and Pennsylvania Tax Free Funds of STET
pursuant to an investment advisory agreement with STET dated December 31, 1995.
The current investment advisory agreements are collectively referred to as the
"Previous Advisory Agreements."
NEW INVESTMENT ADVISORY AGREEMENTS. At a meeting of the Board of
Trustees held on June 17, 2004, the Trustees approved SIMC as investment adviser
to the Bond Index Fund of INDEX; the Short-Duration Government,
Intermediate-Duration Government, GNMA, and Corporate Daily Income Funds of
SDIT; and the California Tax Exempt, Tax Free, Institutional Tax Free, and
Pennsylvania Tax Free Funds of STET, and those Funds' current advisers, Standish
Mellon, Wellington Management and WPG, as sub-advisers to the Funds, based upon
the Board's determination that the selection of SIMC to provide the investment
advisory and "manager of managers" services as described herein will better
optimize each Fund's chances of achieving its investment objective.
Other than the identity of the investment adviser and provisions
concerning the "manager of managers" structure, there are no material
differences between the Investment Advisory Agreements and the Previous Advisory
22
<Page>
Agreements. For example, the advisory fees are identical, and the standards of
care and limitations of liability are the same, except as noted below.
SIMC'S DUTIES UNDER THE INVESTMENT ADVISORY AGREEMENTS. Under the
Investment Advisory Agreements, SIMC will serve as investment adviser and
"manager of managers" to each Fund. SIMC will provide its proprietary investment
adviser selection, monitoring, and asset allocation services to the Funds.
Subject to Board approval (but not shareholder approval), SIMC, in turn, will
enter into investment sub-advisory agreements with one or more sub-advisers who
will make specific investment decisions with respect to the assets (or a portion
of the assets) of each Fund. Under the Investment Advisory Agreements, SIMC will
also continuously review and supervise each Fund's investment program. Subject
to Board approval, SIMC in the future may provide specific portfolio security
advice with respect to all or some portion of a Fund's assets, but SIMC does not
currently expect to request such approval.
SIMC will perform internal due diligence on prospective sub-advisers for
each Fund and monitor sub-adviser performance using its proprietary investment
adviser selection and monitoring process. SIMC will be responsible for
communicating performance targets and evaluations to sub-advisers, supervising
each sub-adviser's compliance with a Fund's investment objective and policies,
authorizing sub-advisers to engage in certain investment techniques for a Fund,
and recommending to the Board of Trustees whether investment sub-advisory
agreements should be renewed, modified or terminated. SIMC also will recommend
to the Board of Trustees the addition of new sub-advisers, as it deems
appropriate.
SUB-ADVISORY SERVICES UNDER THE "MANAGER OF MANAGERS" STRUCTURE. As
discussed above, at the June 17, 2004 meeting, the Board of Trustees approved
the Funds' current advisers, Standish Mellon, Wellington Management and WPG, as
the investment sub-adviser to each respective Fund, subject to shareholder
approval of the "manager of managers" structure described in this Proxy
Statement. If Shareholders approve this structure, Standish Mellon, Wellington
Management and WPG will serve as sub-advisers to each respective Fund under a
sub-advisory agreement between Standish Mellon, Wellington Management and WPG
and SIMC, respectively. As sub-advisers to the Funds, Standish Mellon,
Wellington Management and WPG will be responsible for the day-to-day investment
management of all or a discrete portion of their respective Fund's assets
allocated to it by SIMC. Standish Mellon, Wellington Management and WPG will be
authorized to make investment decisions for their respective Fund and place
orders on each Fund's behalf to effect those investment decisions. As the
"manager of managers" of each Fund, SIMC will oversee Standish Mellon,
Wellington Management and WPG to ensure compliance with each Fund's investment
objective and guidelines, and will monitor their adherence to each Fund's
investment style. Shortly after Standish Mellon, Wellington Management and WPG
begin acting as sub-advisers under this structure, each Fund will provide
shareholders with information about Standish Mellon, Wellington Management and
WPG and their Investment Advisory Agreements with SIMC.
COMPENSATION. For its services as investment adviser and "manager of
managers" of each Fund, SIMC will receive a fee from the Funds. The chart below
provides information about the fees that each Fund will pay under each
Investment Advisory Agreement. These are the same contractual fees that were
paid to the previous advisers. SIMC will pay any sub-advisers out of
23
<Page>
the investment advisory fee it receives. The Funds are not responsible for
paying the sub-advisers' advisory fees.
<Table>
<Caption>
FUND CONTRACTUAL FEE
- --------------------------------------------------------------------------------------------------
INDEX Bond Index Fund 0.07%
SDIT Short-Duration Government Fund 0.10% up to $500 million; 0.075% between $500
SDIT Intermediate-Duration Government Fund million and $1 billion; and 0.05% over $1 billion,
SDIT GNMA Fund based on the combined assets of the
Intermediate-Duration Government, Short-Duration
Government, and GNMA Funds
SDIT Corporate Daily Income Fund 0.10% up to $500 million; 0.075% between $500
million and $1 billion; and 0.05% over $1 billion,
based on the combined assets of the Corporate Daily
Income and Treasury Securities Daily Income Funds
STET California Tax Exempt Fund 0.05% up to $500,000,000; 0.04% next $500,000,000;
STET Tax Free Fund 0.03% over $1,000,000,000, calculated by aggregating
STET Institutional Tax Free Fund the assets of the California Tax Exempt, Tax Free,
STET Pennsylvania Tax Free Fund Institutional Tax Free and Pennsylvania Tax Free
Funds and applying this fee schedule and then
allocating the fee to each of these Funds based
upon their relative net assets
</Table>
SIMC and its affiliates that are service providers to the Funds have
voluntarily agreed to waive fees to keep the Funds' total expense ratios at
specified levels. These voluntary fee waivers may be discontinued at any time;
however, SIMC and its affiliates have no current intention to discontinue these
voluntary fee waivers.
DURATION AND TERMINATION. Unless terminated earlier, each Investment
Advisory Agreement will continue in effect as to a Fund for an initial two year
term, and will continue thereafter for periods of one year for so long as such
continuance is specifically approved at least annually as required by the 1940
Act.
Each Investment Advisory Agreement will terminate automatically in the
event of its assignment. In addition, each Investment Advisory Agreement may be
terminated at any time without penalty by the Trustees or by a vote of a
majority of the outstanding shares of a Fund on not less than 30 days' nor more
than 60 days' written notice to SIMC. In addition, each Investment Advisory
Agreement is terminable by SIMC upon 90 days' written notice to the Trust. The
duration and termination provisions of the Investment Advisory Agreements are
identical to the duration and termination provisions of the Previous Advisory
Agreements.
LIMITATION OF LIABILITY. SIMC will discharge its responsibilities under
the Investment Advisory Agreements subject to the general supervision of, and
any policies set by, the Board of Trustees. Under the Investment Advisory
Agreements, SIMC is not 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 under the Investment Advisory Agreements (except a loss
resulting from willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of reckless disregard by SIMC of its
obligations or duties under the Investment Advisory Agreements, except as may
otherwise be provided under provisions of applicable state and Federal law to
the extent such provisions cannot be waived or modified by the Investment
Advisory Agreements). The limitation of liability provisions of the Investment
Advisory
24
<Page>
Agreements are identical to the limitation of liability provisions of the
Previous Advisory Agreements with the exception of the Previous Advisory
Agreement for the Short-Duration Government, Intermediate-Duration Government
and GNMA Funds of SDIT, which provides that no provision of the Agreement
shall be deemed to protect Wellington Management against any liability to
SDIT or its shareholders to which it might otherwise be subject by reason of
any willful misfeasance, bad faith or gross negligence in performance of its
duties or the reckless disregard of its obligations under the agreement.
DESCRIPTION OF THE INVESTMENT ADVISER. SIMC is a wholly-owned subsidiary
of SEI Investments Company ("SEI"), a financial services company located at
Oaks, Pennsylvania 19456. SEI was founded in 1968 and is a leading provider of
investment solutions to banks, institutional investors, investment advisers, and
insurance companies. SIMC, and its predecessor, began managing as a "manager of
managers" in 1995 and has significant experience providing advice to investors
regarding the selection and evaluation of investment advisers. As of July 31,
2004, SIMC acted in a similar "manager of managers" role with respect to $XX
billion of client assets.
Listed below are the names and principal occupations of each director
and the principal executive officer of SIMC. The principal business address of
each director and the principal executive officer, as it relates to their duties
at SIMC, is One Freedom Valley Drive, Oaks, Pennsylvania 19456.
<Table>
<Caption>
NAME TITLE
---- -----
Edward D. Loughlin Director & President
Carl A. Guarino Director & Executive Vice President
Robert Crudup Senior Vice President
Wayne Withrow Senior Vice President
Timothy D. Barto General Counsel, Vice President & Secretary
Lydia A. Gavalis Vice President & Assistant Secretary
Christine McCullough Vice President & Assistant Secretary
Richard A. Deak Vice President & Assistant Secretary
John C. Munch Assistant Secretary
William E. Zitelli, Jr. Assistant Secretary
Rosanne Miller Assistant Secretary
Lori L. White Assistant Secretary
Thomas D. Jones Compliance Officer & Assistant Secretary
David Campbell Vice President
Vincent Chu Vice President
Jim Combs Vice President
Karl Dasher Vice President & Chief Investment Officer
Scott W. Dellorfano Vice President
Michael Cagina Vice President
Greg Gettinger Vice President
Kathy Heilig Vice President & Treasurer
Lori Heinel Vice President
Paul Klauder Vice President
Jack May Vice President
Carolyn McLaurin Vice President
James V. Morris Vice President
</Table>
25
<Page>
<Table>
<Caption>
NAME TITLE
---- -----
Stephen Onofrio Vice President
Alison Saunders Vice President
Brandon Sharrett Vice President
Frank Sidoti Vice President
Kathryn L. Stanton Vice President
Raymond B. Webster Vice President
</Table>
Listed below are the names of each officer of the Funds who is an
officer or employee of SIMC.
<Table>
<Caption>
NAME POSITION WITH FUND POSITION WITH SIMC
- ---- ------------------ ------------------
Edward D. Loughlin President & Chief Executive Officer Director & President
Timothy D. Barto Vice President & Secretary General Counsel, Vice President &
Secretary
Lydia A. Gavalis Vice President & Assistant Secretary Vice President & Assistant Secretary
Christine M. McCullough Vice President & Assistant Secretary Vice President & Assistant Secretary
William E. Zitelli, Jr. Vice President & Assistant Secretary Assistant Secretary
John J. McCue Vice President Director of Portfolio
Implementations & Managing Director
of Money Market Investments
Thomas D. Jones Chief Compliance Officer Chief Compliance Officer & Assistant
Secretary
</Table>
OTHER FUNDS WITH SIMILAR INVESTMENT OBJECTIVES. SIMC serves as
investment adviser and "manager of managers" to the following funds that have
investment objectives similar to those of the Funds. The following table
provides comparative information on fees paid to SIMC for managing funds with
investment objectives similar to those of the Funds.
<Table>
<Caption>
NAME OF FUND NET ASSETS OF FUND
(INVESTMENT OBJECTIVE) AS OF JUNE 30, 2004 MANAGEMENT FEE
- ---------------------- ------------------- --------------
</Table>
TRUSTEES' CONSIDERATIONS. At a meeting of the Board of Trustees held on
June 17, 2004, the Board of Trustees reviewed SIMC's qualifications to act as
each Fund's investment adviser and "manager of managers," placing particular
emphasis on: (i) SIMC's proposed role in recommending, monitoring and
terminating sub-advisers, subject to the Board of Trustees' oversight; and (ii)
SIMC's performance as "manager of managers" and investment adviser for the other
Funds in the SEI Funds family. The Trustees received oral information regarding
SIMC's key personnel, its experience in selection and evaluation of sub-advisers
and research performed by SIMC and others that had led SIMC to recommend a
"manager of managers" structure.
In unanimously approving (and recommending that Shareholders approve)
SIMC as investment adviser and "manager of managers" to the Bond Index Fund of
INDEX; the Short-Duration Government, Intermediate-Duration Government, GNMA,
and Corporate Daily Income Funds of SDIT; and the California Tax Exempt, Tax
Free, Institutional Tax Free, and
26
<Page>
Pennsylvania Tax Free Funds of STET and the Investment Advisory Agreements with
respect to those Funds, the Trustees carefully evaluated the experience of
SIMC's key personnel in serving as a "manager of managers" for other
institutional funds in the SEI Funds family, and the nature and quality of
services SIMC is expected to provide to the Funds. The Trustees also considered:
(i) each Fund's distinct investment objective and policies; (ii) that the total
compensation payable to SIMC by the Funds under the Investment Advisory
Agreements will be at the same rate as the compensation payable under the
Previous Advisory Agreements; (iii) the history, reputation, qualification and
background of SIMC, as well as the qualifications of its personnel and its
financial condition; (iv) SIMC's performance record; (v) each Fund's
performance; (vi) the benefits to each Fund expected to be realized as a result
of implementing the proposed "manager of managers" structure for the Fund; and
(vii) other factors deemed relevant. In addition, the Trustees considered the
fees to be paid to SIMC in comparison to those being charged in the relevant
segment of the mutual fund business. The Trustees used this information, as well
as other information they obtained independently, to help them decide whether to
approve SIMC as each Fund's "manager of managers" and investment adviser and the
Investment Advisory Agreements.
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS VOTE "FOR" PROPOSAL
3.
Proposal 4. To approve eliminating or reclassifying certain fundamental
policies and restrictions for all Funds, except for: the Treasury
Securities Fund of SLAT and the Money Market, Prime Obligation,
Government, Treasury and Treasury II Funds of SDIT.
The Board of Trustees recommends that Shareholders approve eliminating
or reclassifying certain fundamental investment policies for all Funds, except
for: the Treasury Securities Fund of SLAT and the Money Market, Prime
Obligation, Government, Treasury and Treasury II Funds of SDIT, as described
below.
GENERAL DESCRIPTION OF 1940 ACT REQUIREMENTS. Each Fund operates in
accordance with the investment objectives, policies and restrictions described
in its prospectus and statement of additional information. The 1940 Act requires
that each Fund classify specific investment policies as fundamental policies and
requires a shareholder vote to make changes to those policies. Other policies
not enumerated in the 1940 Act can be designated by a Fund as fundamental, and
if so designated, may only be changed by shareholder vote or can be designated
as non-fundamental and may be changed by a vote of the Board of Trustees.
Since the time each Fund was created, there have been a number of
changes in the laws and regulations that govern the Funds. First, significant
federal legislation in 1996 pre-empted state regulation of all mutual funds. As
a result, many investment policies previously imposed on the Funds by various
states are no longer required. Second, significant changes to Rule 2a-7 under
the 1940 Act, which governs the investments and operations of money market
funds, took effect during the 1990s. Thus, many of the current fundamental
policies of the Funds reflect outdated regulatory requirements or predate the
current requirements of Rule 2a-7 and are, in significant respects, more
restrictive than the 1940 Act and Rule 2a-7 currently require. In addition, new
types of investment techniques and money market instruments have been
27
<Page>
developed, which the Funds may not be permitted to use or invest in because of
their outdated fundamental policies.
SIMC performed a comprehensive review of the Funds' fundamental
policies, and based on the recommendations of SIMC, the Board of Trustees has
approved policy revisions that are designed to: (i) simplify and modernize those
policies that are required to be fundamental; and (ii) eliminate or reclassify
as non-fundamental those fundamental policies that are no longer required to be
fundamental or that are no longer necessary.
In some cases the Board of Trustees recommends that fundamental policies
be amended or eliminated completely. In certain cases, the Board of Trustees has
approved non-fundamental policies that in effect reclassify all or part of a
fundamental policy into a non-fundamental policy. Changes to non-fundamental
policies do not require shareholder approval. While not specifically subject to
shareholder approval, the non-fundamental policies approved by the Board will
not take effect unless the related change to the fundamental policy is approved
by shareholders. Once converted to non-fundamental, a policy may be changed
without Shareholder approval. If the Board decides in the future to change or
eliminate a reclassified non-fundamental policy, the change would be disclosed
in the Funds' prospectus(es) or statement of additional information, as
required.
Approval of these changes by Shareholders would allow the Funds greater
flexibility to respond to a changing investment environment. The Board of
Trustees also believes that the proposed changes will enhance the Funds'
investment adviser's ability to manage the Funds' investment portfolios. In
addition, by reducing to a minimum those policies that can be changed only by
shareholder vote, the Funds in the future may be able to avoid the costs and
delay associated with a shareholder meeting. The Funds that are money market
funds will continue to be subject to the requirements of Rule 2a-7.
Each proposed change to a Fund's fundamental policies recommended by the
Board of Trustees is discussed in detail below. In order to help you understand
the proposed changes, attached as Exhibit E is a list of the Funds' current
fundamental policies proposed to be replaced by new fundamental and/or
non-fundamental policies or to be eliminated.
VOTING REQUIREMENTS FOR PROPOSAL 4. Approval of each item of Proposal 4
requires the favorable vote of a majority of outstanding voting shares of a Fund
as defined by the 1940 Act. Proposal 4 is separated into separate items. YOU MAY
VOTE FOR PROPOSAL 4 AS A GROUP OR BY EACH ITEM. If you vote on Proposal 4 as a
group, a Fund will record your votes as having been cast "FOR" or "AGAINST,"
according to your vote, each applicable item within Proposal 4. Alternatively,
you may vote separately for or against each item. If you return a proxy card
with a vote on the entire Proposal as a group and separate votes on specific
items, your vote on the entire Proposal as a group will control and be recorded
as your intended vote.
If Shareholders approve some, but not all, items of Proposal 4, a Fund
will have a combination of certain current fundamental policies and certain new
fundamental and/or non-fundamental policies. Fundamental policies approved by
the Shareholders would become
28
<Page>
effective immediately after the Meeting. However, it is not expected that the
changes in fundamental policies will materially change the manner in which the
Funds are managed.
ITEM 4 (a) - FUNDAMENTAL POLICY REGARDING DIVERSIFICATION
CURRENT FUNDAMENTAL POLICY. The chart below describes each Fund's
current fundamental policy regarding diversification.
<Table>
<Caption>
CURRENT
FUNDS FUNDAMENTAL POLICY
- ----- ------------------
SIMT Large Cap Growth, SIMT Large Cap Value, SIMT Tax-Managed Large Cap, SIMT With respect to 75% of its assets,
Mid-Cap, SIMT Small Cap Growth, SIMT Small Cap Value, SIMT Tax-Managed Small no Fund may: (i) purchase the
Cap, SIMT Core Fixed Income, SIMT High Yield Bond, SIT International Equity, SIT securities of any issuer (except
Emerging Markets Equity, STET Short Duration Municipal, STET Intermediate-Term securities issued or guaranteed by
Municipal, STET Pennsylvania Municipal, SDIT Corporate Daily Income, SDIT the U.S. Government, its agencies
Short-Duration Government, SDIT Intermediate-Duration Government, SDIT GNMA, or instrumentalities) if, as a
INDEX S&P 500 Index and INDEX Bond Index Funds 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.
SDIT Government II, STET Tax Free, STET Institutional Tax Free, STET California No Fund may purchase securities
Tax Exempt and STET Pennsylvania Tax Free Funds of any issuer (except securities
issued or guaranteed by the U.S.
Government, its agencies or
instrumentalities), if as a result,
more than 25% of its total assets
would be invested in the securities
of such issuer. No Fund may acquire
more than 10% of the voting
securities of any one issuer.
</Table>
PROPOSED FUNDAMENTAL POLICY. No Fund may purchase securities of an
issuer if it would cause the Fund to fail to satisfy the diversification
requirements for a diversified management company under the 1940 Act, the rules
or regulations thereunder or any exemption therefrom, as such statute, rules or
regulations may be amended or interpreted from time to time.
ANALYSIS OF PROPOSED CHANGES. Each Fund is classified as a "diversified"
mutual fund. This Proposal does not seek to change the Funds' status as
diversified investment management companies, but to provide the Funds with
maximum flexibility allowed for diversified investment companies under the 1940
Act. The proposed fundamental policy will require a Fund to comply with the
limitations imposed by the 1940 Act on "diversified" funds. Section 5(b) of the
1940 Act prohibits a "diversified" mutual fund from purchasing securities of any
one issuer if, at the time of purchase, more than 5% of the fund's total assets
would be invested in securities
29
<Page>
of that issuer or the fund would own or hold more than 10% of the outstanding
voting securities of that issuer, except that up to 25% of the fund's total
assets may be invested without regard to this limitation. The 5% limitation does
not apply to securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities or to securities issued by other investment
companies.
In addition to the limitations imposed on "diversified" funds, money
market funds are subject to additional, stricter diversification requirements
imposed by Rule 2a-7 under the 1940 Act. Rule 2a-7 limits a money market fund to
investing no more than 5% of its assets in the securities of a single issuer.
This requirement applies with respect to 100% of a money market fund's assets,
in contrast to Section 5(b) diversification requirements, which apply only with
respect to 75% of a non-money market fund's assets. Rule 2a-7 does provide for a
safe harbor for a fund, as a money market fund, to invest up to 25% of its
assets in securities of a single issuer, but only for a period of up to three
days.
PROPOSED NON-FUNDAMENTAL POLICY. The Board has also approved that each
Fund's current fundamental policy regarding diversification be reclassified as a
non-fundamental policy. The reclassification of the Funds' current fundamental
policy to a non-fundamental policy is not expected to affect the management of
the Funds. The Board of Trustees would be able to make changes to the
non-fundamental policy in the future if deemed to be in the best interests of
the Funds and their shareholders. Accordingly, should Shareholders approve this
Proposal, the non-fundamental policy described in Exhibit E will take effect.
ITEM 4 (b) - FUNDAMENTAL POLICY REGARDING CONCENTRATION
CURRENT FUNDAMENTAL POLICY. The chart below describes each Fund's
current fundamental policy regarding concentration.
<Table>
<Caption>
FUNDS CURRENT FUNDAMENTAL POLICY
- ----- --------------------------
SIMT Large Cap Growth, SIMT Large Cap Value, SIMT No Fund may purchase any securities which would cause
Tax-Managed Large Cap, SIMT Mid-Cap, SIMT Small Cap more than 25% of the total assets of the Fund to be
Growth, SIMT Small Cap Value, SIMT Tax-Managed Small invested in the securities of one or more issuers
Cap, SIMT Core Fixed Income, SIMT High Yield Bond, SIT conducting their principal business activities in the
International Equity, SIT Emerging Markets Equity, SIT same industry, provided that this limitation does not
Emerging Markets Debt, SIT International Fixed Income, apply to investments in obligations issued or
STET Tax Free, STET Institutional Tax Free, STET guaranteed by the U.S. Government, its agencies or
California Tax Exempt, STET Intermediate-Term Municipal, instrumentalities.
STET Pennsylvania Municipal Bond, STET Pennsylvania Tax
Free, STET Short Duration Municipal, INDEX S&P 500 Index,
INDEX Bond Index, STET California Municipal Bond, STET
Massachusetts Municipal Bond, STET New Jersey Municipal
Bond, and STET New York Municipal Bond Funds
SDIT Corporate Daily Income, SDIT Short-Duration No Fund may purchase any securities which would cause
Government, SDIT Intermediate-Duration Government, SDIT 25% or more of the total assets of the Fund to be
GNMA and SDIT Government II invested in the securities of one or more issuers
conducting their
</Table>
30
<Page>
<Table>
Funds principal business activities in the same industry,
provided that this limitation does not apply to
investments in (a) domestic banks and (b) obligations
issued or guaranteed by the U.S. Government or its
agencies and instrumentalities.
STET Tax Free, STET Institutional Tax Free, STET No Fund may invest more than 25% of its total assets in
Intermediate-Term Municipal and STET Pennsylvania issuers within the same state or similar type projects
Municipal Bond Funds (except in specified categories). For the STET
Pennsylvania Municipal Bond Fund, this limitation does
not apply to the extent stated in its investment
objective and policies.
STET Massachusetts Tax Free Money Market Fund No Fund may purchase any securities which would cause
more than 25% of the total assets of the Fund, based on
current value at the time of such purchase, 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 (a) obligations issued or
guaranteed by the U.S. Government or its agencies and
instrumentalities, or (b) obligations of state or
municipal governments and their political subdivisions.
</Table>
PROPOSED FUNDAMENTAL POLICY. No Fund may concentrate investments in a
particular industry or group of industries, as concentration is defined under
the 1940 Act, the rules and regulations thereunder or any exemption therefrom,
as such statute, rules or regulations may be amended or interpreted from time to
time.
ANALYSIS OF PROPOSED CHANGES. The 1940 Act generally requires the Funds
to adopt a fundamental policy regarding concentration of investments in
particular industries. It is currently the SEC staff's position that if 25% or
more of the value of a fund's assets are invested in securities of issuers in
one industry, that fund's investments will be deemed to be concentrated in that
industry. However, this 25% limitation does not apply to: (i) fund investments
in government securities; (ii) municipal bond fund investments in industrial
development and pollution control bonds; and (iii) fund investments in certain
obligations of domestic banks.
The proposed policy is more flexible than the current policy, and would
permit the Funds to take appropriate and timely action in the future to amend
the Funds' policies in response to market or regulatory changes, without the
expense and delay associated with a shareholder meeting. The Board of Trustees
anticipates taking such action only in the event that the SEC changes its
position on the meaning of industry concentration.
PROPOSED NON-FUNDAMENTAL POLICY. The Board has also approved that each
Fund's current fundamental policy regarding concentration be reclassified as a
non-fundamental policy. The reclassification of the Funds' current fundamental
policy to a non-fundamental policy is not expected to affect the management of
the Funds. The Board of Trustees would be able to make changes to the
non-fundamental policy in the future if deemed to be in the best interests of
the
31
<Page>
Funds and their shareholders. Accordingly, should Shareholders approve this
Proposal, the non-fundamental policy described in Exhibit E will take effect.
ITEM 4 (c) - FUNDAMENTAL POLICIES REGARDING BORROWING AND SENIOR
SECURITIES
CURRENT FUNDAMENTAL POLICIES. The chart below describes each Fund's
current fundamental policy regarding borrowing and senior securities.
<Table>
<Caption>
FUNDS CURRENT FUNDAMENTAL POLICY
- ----- --------------------------
SIMT Large Cap Growth, SIMT Large Cap Value, SIMT No Fund may borrow money in an amount exceeding
Tax-Managed Large Cap, SIMT Mid-Cap, SIMT Small Cap 33 1/3% of the value of its total assets, provided that,
Growth, SIMT Small Cap Value, SIMT Tax-Managed Small for purposes of this limitation, investment strategies
Cap, SIMT Core Fixed Income, SIMT High Yield Bond, SIT which either obligate a Fund to purchase securities or
International Equity, SIT Emerging Markets Equity, SIT require a Fund to segregate assets are not considered to
Emerging Markets Debt, STET Short Duration Municipal, be borrowings. To the extent that its borrowings exceed
STET California Municipal Bond, STET Massachusetts 5% of its assets: (i) all borrowings will be repaid before
Municipal Bond, STET New Jersey Municipal Bond and STET a Fund makes additional investments and any interest paid
New York Municipal Bond Funds on such borrowings will reduce income; and (ii) asset
coverage of at least 300% is required.
No Fund may issue senior securities (as defined in the
1940 Act) except as permitted by rule, regulation or order
of the SEC.
All SAAT Funds Each Fund may borrow money in an amount up to 33 1/3% of
the value of its total assets, provided that, for purposes
of this limitation, investment strategies which either
obligate a Fund to purchase securities or require a Fund
to segregate assets are not considered to be borrowings.
Except where a Fund has borrowed money for temporary
purposes in amounts not exceeding 5% of its assets, asset
coverage of 300% is required for all borrowings.
No Fund may issue senior securities (as defined in the
1940 Act) except as permitted by rule, regulation or order
of the
SEC.
SIMT Real Estate Fund No Fund may borrow money in an amount exceeding
33 1/3% of the value of its total assets, provided that,
for purposes of this limitation, investment strategies
that either obligate the Fund to purchase securities or
require the Fund to segregate assets are not considered to
be borrowing. Asset coverage of at least 300% is required
for all borrowing, except where the Fund has borrowed
money for temporary purposes in an amount not exceeding 5%
of its total assets.
No Fund may issue senior securities (as defined in the
1940 Act) except as permitted by rule, regulation or order
of the
SEC.
SDIT Corporate Daily Income, SDIT Short-Duration No Fund may borrow money except for temporary or emergency
Government, SDIT Intermediate-Duration purposes and then only in an amount not
</Table>
32
<Page>
<Table>
Government, SDIT GNMA, SDIT Government II, INDEX S&P 500 exceeding 10% of the value of the total assets of that
Index, INDEX Bond Index and SIT International Fixed Fund. This borrowing provision is included solely to
Income Funds facilitate the orderly sale of portfolio securities to
accommodate substantial redemption requests if they should
occur and is not for investment purposes. All borrowings
will be repaid before the Fund makes additional
investments and any interest paid on such borrowings will
reduce the income of that Fund.
No Fund may issue senior securities (as defined in the
1940 Act) except in connection with permitted borrowings as
described in the prospectuses and its statement of
additional information or as permitted by rule, regulation
or order of the SEC.
STET Tax Free, STET Institutional Tax Free, STET No Fund may borrow money except for temporary or emergency
California Tax Exempt, STET Intermediate-Term purposes and then only in an amount not exceeding 10% of
Municipal, STET Pennsylvania Municipal Bond and STET the value of total assets. The California Tax Exempt Fund
Pennsylvania Tax Free Funds has a fundamental policy that, to the extent such
borrowing exceeds 5% of the value of the Fund's total
assets, borrowing will be done from a bank and in
accordance with the requirements of the 1940 Act. This
borrowing provision is included solely to facilitate the
orderly sale of portfolio securities to accommodate heavy
redemption requests if they should occur and is not for
investment purposes. All borrowings of the Funds, in
excess of 5% of its total assets, will be repaid before
making additional investments and any interest paid on
such borrowings will reduce income.
No Fund may issue senior securities (as defined in the
1940 Act) except as permitted by rule, regulation or order
of the SEC.
STET Massachusetts Tax Free Money Market Fund No Fund may borrow, except that the Fund may: (a) borrow
from banks for temporary or emergency purposes, including
the meeting of redemption requests which might otherwise
require the untimely disposition of securities; and (b) to
the extent consistent with the Fund's investment objective
and policies, enter into reverse repurchase agreements,
forward roll transactions and similar investment
techniques and strategies. To the extent it engages in
transactions described in (a) and (b), the Fund will be
limited so that no more than 33 1/3% of its total assets
(including the amount borrowed), less liabilities (not
including the amount borrowed) valued at the time the
borrowing is made, is derived from such transactions.
No Fund may issue senior securities (as defined in the
1940 Act) except in connection with permitted borrowings
as described in its statement of additional information or
as permitted by the 1940 Act, and any rule, regulation or
order of the SEC thereunder.
</Table>
33
<Page>
PROPOSED FUNDAMENTAL POLICY. No Fund may borrow money or issue senior
securities (as defined in the 1940 Act), except to the extent permitted under
the 1940 Act, the rules and regulations thereunder or any exemption therefrom,
as such statute, rules or regulations may be amended or interpreted from time to
time.
ANALYSIS OF PROPOSED CHANGES. Under the 1940 Act, the Funds are required
to adopt fundamental policies regarding borrowing and issuance of senior
securities. The 1940 Act presently limits a fund's ability to borrow more than
one-third of the value of its total assets, subject to certain coverage
requirements. Over time, the SEC has acknowledged the existence of new types of
investment practices that technically may be considered borrowings, but that may
be permissible investment practices for a fund. The 1940 Act generally prohibits
the Funds from issuing senior securities, although it provides allowances for
certain borrowings and certain other investments, such as short sales or reverse
repurchase agreements, if Fund assets are earmarked or segregated to cover such
obligations.
Currently the Funds have two separate fundamental policies for borrowing
and issuance of senior securities. The current fundamental policy regarding
borrowing is more restrictive than the current standards permitted under the
1940 Act. As a result, it is proposed that the Funds adopt a more flexible
single fundamental policy to address both borrowing and issuance of senior
securities. This would permit the Funds to take appropriate and timely action in
the future to amend the Funds' non-fundamental policies, without the expense and
delay associated with a shareholder meeting.
PROPOSED NON-FUNDAMENTAL POLICY. The Board has also approved that each
Fund's current fundamental policy regarding borrowing and issuance of senior
securities be reclassified as a non-fundamental policy. The reclassification of
the Funds' current fundamental policies to a non-fundamental policy is not
expected to affect the management of the Funds. The Board of Trustees would be
able to make changes to the non-fundamental policy in the future if deemed to be
in the best interests of the Funds and their shareholders. Accordingly, should
Shareholders approve this Proposal, the non-fundamental policy described in
Exhibit E will take effect.
ITEM 4 (d) - FUNDAMENTAL POLICY REGARDING LENDING
CURRENT FUNDAMENTAL POLICY. The chart below describes each Fund's
current fundamental policy regarding lending.
<Table>
<Caption>
FUNDS CURRENT FUNDAMENTAL POLICY
- ----- --------------------------
SIMT Large Cap Growth, SIMT Large Cap Value, SIMT No Fund may make loans if, as a result, more than 33 1/3%
Tax-Managed Large Cap, SIMT Mid-Cap, SIMT Small Cap of its total assets would be lent to other parties, except
Growth, SIMT Small Cap Value, SIMT Tax-Managed Small that each Fund may: (i) purchase or hold debt instruments
Cap, SIMT Core Fixed Income, SIMT High Yield Bond, SIMT in accordance with its investment objective and policies;
Real Estate, SIT International Equity, SIT Emerging (ii) enter into repurchase agreements; and (iii) lend its
Markets Equity, SIT Emerging Markets Debt, STET Short securities.
Duration Municipal, SIIT Large Cap, STET California
Municipal Bond, STET Massachusetts
</Table>
34
<Page>
<Table>
Municipal Bond, STET New Jersey Municipal Bond, STET
New York Municipal Bond and STET Massachusetts Tax Free
Money Market Funds
All SAAT Funds No Fund may make loans if, as a result, more than 33 1/3%
of its total assets would be loaned to other parties.
SDIT Corporate Daily Income, SDIT Short-Duration No Fund may make loans, except that each Fund may purchase
Government, SDIT Intermediate-Duration Government, SDIT or hold debt instruments in accordance with its investment
GNMA, SDIT Government II, STET Tax Free, STET objective and policies and may enter into repurchase
Institutional Tax Free, STET California Tax Exempt, agreements, provided that repurchase agreements maturing
STET Intermediate-Term Municipal, STET Pennsylvania in more than seven days, restricted securities and other
Municipal Bond and STET Pennsylvania Tax Free Funds illiquid securities are not to exceed, in the aggregate,
10% of the Fund's net assets (15% for STET
Intermediate-Term Municipal Fund).
INDEX S&P 500 Index, INDEX Bond Index and SIT No Fund may make loans, except that each Fund: (i) may
International Fixed Income Funds enter into repurchase agreements, provided that repurchase
agreements and time deposits maturing in more than seven
days, and other illiquid securities, including securities
which are not readily marketable or are restricted, are
not to exceed, in the aggregate, 10% of the Fund's total
assets; (ii) may engage in securities lending as described
in its statement of additional information; and (iii) may
purchase or hold debt instruments in accordance with its
investment objective and policies.
</Table>
PROPOSED FUNDAMENTAL POLICY. No Fund may make loans, except to the
extent permitted under the 1940 Act, the rules and regulations thereunder or any
exemption therefrom, as such statute, rules or regulations may be amended or
interpreted from time to time.
ANALYSIS OF PROPOSED CHANGES. Under the 1940 Act, the Funds are required
to adopt fundamental policies regarding lending. Although the 1940 Act does not
impose percentage limits on the amount that funds may lend, the 1940 Act
prohibits funds from making loans to persons who control or are under common
control with the funds, effectively prohibiting loans where conflicts of
interest or undue influence are most likely present.
It is proposed that the Funds adopt a more flexible fundamental policy.
This fundamental lending policy would limit the Funds only as required by the
1940 Act, thereby permitting the Funds to adapt to future developments in
investment practices and changes in laws and regulations without the delay and
cost of a shareholder meeting.
PROPOSED NON-FUNDAMENTAL POLICY. The Board has also approved that each
Fund's current fundamental policy regarding lending be reclassified as a
non-fundamental policy. The reclassification of the Funds' current fundamental
policy to a non-fundamental policy is not expected to affect the management of
the Funds. The Board of Trustees would be able to make changes to the
non-fundamental policy in the future if deemed to be in the best interests of
the Funds and their shareholders. Accordingly, should Shareholders approve this
Proposal, the non-fundamental policy described in Exhibit E will take effect.
35
<Page>
ITEM 4 (e) - FUNDAMENTAL POLICY REGARDING PLEDGING AND MORTGAGING OF
FUND ASSETS
CURRENT FUNDAMENTAL POLICY. The chart below describes each Fund's
current fundamental policy regarding pledging and mortgaging of Fund assets.
<Table>
<Caption>
FUNDS CURRENT FUNDAMENTAL POLICY
- ----- --------------------------
SDIT Corporate Daily Income, SDIT Short-Duration No Fund may pledge, mortgage or hypothecate assets except
Government, SDIT Intermediate-Duration Government, SDIT to secure temporary borrowings permitted by a Fund's
GNMA, SDIT Government II, INDEX S&P 500 Index, INDEX borrowing policy/statement of additional information in
Bond Index, SIT International Fixed Income, STET Tax aggregate amounts not to exceed 10% of the net assets of
Free, STET Institutional Tax Free, STET California Tax such Fund taken at fair market value at the time of the
Exempt, STET Intermediate-Term Municipal, STET incurrence of such loan, and as to the INDEX S&P 500
Pennsylvania Municipal Bond and STET Pennsylvania Tax Index Fund, in connection with stock index futures trading
Free Funds as provided in its statement of additional information.
INDEX S&P 500 Index and INDEX Bond Index Funds No Fund may pledge, mortgage or hypothecate assets except
to secure temporary borrowings as described in its
statement of additional information in aggregate amounts
not to exceed 10% of the net assets of the Fund taken at
current value at the time of the incurrence of such loan
and, as to the INDEX S&P 500 Index Fund, in connection with
stock index futures trading as provided in its statement
of additional information.
</Table>
PROPOSED FUNDAMENTAL POLICY. None. However, the Board has approved a
non-fundamental policy as discussed below.
ANALYSIS OF PROPOSED CHANGE. The Funds' current fundamental policy is
based on requirements imposed by the administrators of securities laws in
various states. However, federal legislation passed in 1996 preempted
substantive state regulation of mutual funds and the sale of their shares. The
1940 Act does not currently require the Funds to have a fundamental policy
regarding pledging and mortgaging of Fund assets. As a result, it is proposed
that the current fundamental policy be eliminated.
PROPOSED NON-FUNDAMENTAL POLICY. While the Funds propose eliminating the
current fundamental policy, the Board has approved that the Funds' current
fundamental policy regarding pledging and mortgaging of Fund assets be
reclassified as a non-fundamental policy. By reclassifying the fundamental
policy to non-fundamental, the Funds would be able to make a change to the
non-fundamental policy without incurring the cost of a shareholder meeting. The
reclassification of the Funds' current fundamental policy to a non-fundamental
policy is not expected to affect the management of the Funds. The Board of
Trustees would be able to make changes to the non-fundamental policy in the
future if deemed to be in the best interests of the Funds and their
shareholders. Accordingly, should Shareholders approve this Proposal, the
non-fundamental policy described in Exhibit E will take effect.
36
<Page>
ITEM 4 (f) - FUNDAMENTAL POLICY REGARDING CONTROL OF AN ISSUER
CURRENT FUNDAMENTAL POLICY. The chart below describes each Fund's
current fundamental policy regarding control of an issuer.
<Table>
<Caption>
FUNDS CURRENT FUNDAMENTAL POLICY
- ----- --------------------------
SDIT Corporate Daily Income, SDIT Short-Duration No Fund may invest in companies for the purpose of
Government, SDIT Intermediate-Duration Government, exercising control.
SDIT GNMA, SDIT Government II, INDEX S&P 500 Index,
INDEX Bond Index, SIT International Fixed Income,
STET Tax Free, STET Institutional Tax Free, STET
California Tax Exempt, STET Intermediate-Term
Municipal, STET Pennsylvania Municipal Bond and STET
Pennsylvania Tax Free Funds
</Table>
PROPOSED FUNDAMENTAL POLICY. None. However, the Board has approved a
non-fundamental policy as discussed below.
ANALYSIS OF PROPOSED CHANGE. The Funds' current fundamental policy is
based on requirements imposed by the administrators of securities laws in
various states. However, federal legislation passed in 1996 preempted
substantive state regulation of mutual funds and the sale of their shares. The
1940 Act does not currently require the Funds to have a fundamental policy
regarding investing for the purpose of exercising control of an issuer. As a
result, it is proposed that the current fundamental policy be eliminated.
PROPOSED NON-FUNDAMENTAL POLICY. While the Funds propose eliminating the
current fundamental policy, the Board has approved that the Funds' current
fundamental policy regarding investment of Fund assets with the purpose of
exercising control over an issuer be reclassified as a non-fundamental policy.
By reclassifying the fundamental policy to non-fundamental, Funds would be able
to make a change to the non-fundamental policy without incurring the cost of
holding a shareholder meeting. The reclassification of the Funds' current
fundamental policy to a non-fundamental policy is not expected to affect the
management of the Funds. The Board of Trustees would be able to make changes to
the non-fundamental policy in the future if deemed to be in the best interests
of the Funds and their shareholders. Accordingly, should Shareholders approve
this Proposal, the non-fundamental policy described in Exhibit E will take
effect.
37
<Page>
ITEM 4 (g) - FUNDAMENTAL POLICY REGARDING PURCHASE OF REAL ESTATE AND
COMMODITIES
CURRENT FUNDAMENTAL POLICY. The chart below describes each Fund's
current fundamental policy regarding purchase of real estate and commodities.
<Table>
<Caption>
FUNDS CURRENT FUNDAMENTAL POLICY
- ----- --------------------------
SIMT Large Cap Growth, SIMT Large Cap Value, SIMT No Fund may purchase or sell real estate, physical
Tax-Managed Large Cap, SIMT Mid-Cap, SIMT Small Cap commodities, or commodities contracts, except that each Fund
Growth, SIMT Small Cap Value, SIMT Tax-Managed Small may purchase: (i) marketable securities issued by companies
Cap, SIMT Core Fixed Income, SIMT High Yield Bond, which own or invest in real estate (including real estate
SIMT Real Estate, SIT International Equity, SIT investment trusts), commodities, or commodities contracts;
Emerging Markets Equity, SIT Emerging Markets Debt, and (ii) commodities contracts relating to financial
STET Short Duration Municipal, STET California instruments, such as financial futures contracts and options
Municipal Bond, STET Massachusetts Municipal Bond, on such contracts.
STET New Jersey Municipal Bond, STET New York
Municipal Bond, INDEX S&P 500 Index and INDEX Bond
Index Funds
All SAAT Funds No Fund may purchase or sell real estate, physical
commodities, or commodities contracts, except that each Fund
may purchase commodities contracts relating to financial
instruments, such as financial futures or index contracts
and options on such contracts.
SDIT Corporate Daily Income, SDIT Government II and No Fund may purchase or sell real estate, real estate
SIT International Fixed Income Funds limited partnership interests, commodities or commodities
contracts including futures contracts. However, subject to
its permitted investments, each Fund may purchase
obligations issued by companies which invest in real estate,
commodities or commodities contracts.
STET Tax Free, STET Institutional Tax Free, STET No Fund may purchase or sell real estate, real estate
California Tax Exempt, STET Intermediate-Term limited partnership interests, commodities or commodities
Municipal, STET Pennsylvania Municipal Bond and STET contracts including futures contracts. However, subject to
Pennsylvania Tax Free Funds its permitted investments, any Fund may invest in municipal
securities or other obligations secured by real estate or
other interests therein.
SDIT Short-Duration Government, SDIT No Fund may purchase or sell real estate, real estate
Intermediate-Duration Government and SDIT GNMA Funds limited partnership interests, commodities or commodities
contracts (excluding futures contracts). However, subject to
its permitted investments, each Fund may purchase
obligations issued by companies which invest in real estate,
commodities or commodities contracts.
STET Massachusetts Tax Free Money Market Fund No Fund may purchase or sell real estate, real estate
limited partnership interests, commodities or commodities
contracts including futures contracts. However, subject to
its permitted investments, the Fund may: (a) invest in
securities of issuers engaged in the real estate business or
the business of investing in real estate (including
interests in limited partnerships owning or otherwise
engaging in the real estate business or the business of
investing in real estate) and
</Table>
38
<Page>
<Table>
securities which are secured by real estate or interests
therein; (b) hold or sell real estate received in connection
with securities it holds or held; or (c) trade in futures
contracts and options on futures contracts (including
options on currencies) to the extent consistent with the
Fund's investment objective and policies.
</Table>
PROPOSED FUNDAMENTAL POLICY. No Fund may purchase or sell commodities or
real estate, except to the extent permitted under the 1940 Act, the rules and
regulations thereunder or any exemption therefrom, as such statute, rules or
regulations may be amended or interpreted from time to time.
ANALYSIS OF PROPOSED CHANGES. Under the 1940 Act, the Funds are required
to adopt a fundamental policy regarding investment in real estate and
commodities. The 1940 Act does not prohibit the Funds from purchasing
commodities. It is the SEC staff's position that an interest in real estate
includes securities (other than marketable securities) of companies whose assets
consist substantially of real property and interests therein, including
mortgages and other liens, but does not include securities of companies whose
investments in real estate are incidental to another business. The 1940 Act does
not restrict investment in marketable securities of issuers who invest in real
estate (E.G., Real Estate Investment Trusts or REITs).
It is proposed that the Funds adopt a more flexible fundamental policy.
This fundamental policy regarding the purchase of real estate and commodities
would limit the Funds only as required by the 1940 Act, thereby permitting the
Funds to adapt to future developments in investment practices and changes in
laws and regulations without the delay and cost associated with a shareholder
meeting.
PROPOSED NON-FUNDAMENTAL POLICY. The Board has also approved that each
Fund's current fundamental policy regarding purchase of real estate and
commodities be reclassified as a non-fundamental policy. The reclassification of
the Funds' current fundamental policy to a non-fundamental policy is not
expected to affect the management of the Funds. The Board of Trustees would be
able to make changes to the non-fundamental policy in the future if deemed to be
in the best interests of the Funds and their shareholders. Accordingly, should
Shareholders approve this Proposal, the non-fundamental policy described in
Exhibit E will take effect.
ITEM 4 (h) - FUNDAMENTAL POLICY REGARDING SHORT SALES
CURRENT FUNDAMENTAL POLICY. The chart below describes each Fund's
current fundamental policy regarding short sales.
<Table>
<Caption>
FUNDS CURRENT FUNDAMENTAL POLICY
- ----- --------------------------
SDIT Corporate Daily Income, SDIT Short-Duration No Fund may make short sales of securities, maintain a
Government, SDIT Intermediate-Duration Government, SDIT short position or purchase securities on margin, except
GNMA, SDIT Government II, INDEX S&P 500 Index, INDEX that the Funds may obtain short-term credits as necessary
Bond Index, SIT International Fixed Income, STET Tax for the clearance of security transactions.
Free, STET
</Table>
39
<Page>
<Table>
Institutional Tax Free, STET California Tax Exempt, STET
Intermediate-Term Municipal, STET Pennsylvania Municipal
Bond and STET Pennsylvania Tax Free Funds
</Table>
PROPOSED FUNDAMENTAL POLICY. None. However, the Board has approved a
non-fundamental policy as discussed below.
ANALYSIS OF PROPOSED CHANGE. The Funds' current fundamental policy is
based on requirements imposed by the administrators of securities laws in
various states. However, federal legislation passed in 1996 preempted
substantive state regulation of mutual funds and the sale of their shares. The
1940 Act does not currently require the Funds to have a fundamental policy
regarding short sales. As a result, it is proposed that the current fundamental
policy be eliminated.
PROPOSED NON-FUNDAMENTAL POLICY. While the Funds propose eliminating the
current fundamental policy, the Board has approved that the Funds' current
fundamental policy regarding short sales be reclassified as a non-fundamental
policy. By reclassifying the fundamental policy to non-fundamental, the Funds
would be able to make a change to the non-fundamental policy without incurring
the cost of holding a shareholder meeting. The reclassification of the Funds'
current fundamental policy to a non-fundamental policy is not expected to affect
the management of the Funds. Accordingly, should Shareholders approve this
Proposal, the Funds intend to adopt the non-fundamental policy described in
Exhibit E.
ITEM 4 (i) - FUNDAMENTAL POLICY REGARDING UNDERWRITING OF SECURITIES
CURRENT FUNDAMENTAL POLICY. The chart below describes each Fund's
current fundamental policy regarding underwriting of securities.
<Table>
<Caption>
FUNDS CURRENT FUNDAMENTAL POLICY
- ----- --------------------------
All SAAT Funds, SIMT Large Cap Growth, SIMT Large Cap No Fund may act as an underwriter of securities of other
Value, SIMT Tax-Managed Large Cap, SIMT Mid-Cap, SIMT issuers except as it may be deemed an underwriter in
Small Cap Growth, SIMT Small Cap Value, SIMT selling a portfolio security.
Tax-Managed Small Cap, SIMT Core Fixed Income, SIMT
High Yield Bond, SIMT Real Estate, SIT International
Equity, SIT Emerging Markets Equity, SIT Emerging
Markets Debt, SIT International Fixed Income, STET
Short Duration Municipal, SDIT Corporate Daily Income,
SDIT Short-Duration Government, SDIT
Intermediate-Duration Government, SDIT GNMA, SDIT
Government II, INDEX S&P 500 Index, INDEX Bond Index,
STET Tax Free, STET Institutional Tax Free, STET
California Tax Exempt, STET Intermediate-Term
Municipal, STET Pennsylvania Municipal Bond, STET
Pennsylvania Tax Free, STET California Municipal Bond,
STET
</Table>
40
<Page>
<Table>
Massachusetts Municipal Bond, STET New Jersey
Municipal Bond, STET New York Municipal Bond and STET
Massachusetts Tax Free Money Market Funds
</Table>
PROPOSED FUNDAMENTAL POLICY. No Fund may underwrite securities issued by
other persons, except to the extent permitted under the 1940 Act, the rules and
regulations thereunder or any exemption therefrom, as such statute, rules or
regulations may be amended or interpreted from time to time.
ANALYSIS OF PROPOSED CHANGES. Under the 1940 Act, the Funds are required
to adopt a fundamental policy regarding underwriting of securities. The SEC
staff generally takes the position that funds should not engage in the business
of underwriting securities.
It is proposed that the Funds adopt a more flexible fundamental policy.
While the Funds' current fundamental policy has not affected the Funds'
investments in the past, its replacement with a more flexible fundamental policy
could provide investment flexibility in the future. In addition, the Board of
Trustees could take appropriate and timely action to amend non-fundamental
policies, without the expense and delay associated with a shareholder meeting.
Accordingly, should Shareholders approve this Proposal, the fundamental policy
set forth above will take effect.
ITEM 4 (j) - FUNDAMENTAL POLICY REGARDING INVESTMENTS IN SECURITIES OF
OTHER INVESTMENT COMPANIES
CURRENT FUNDAMENTAL POLICY. The chart below describes each Fund's
current fundamental policy regarding investments in securities of other
investment companies.
<Table>
<Caption>
FUNDS CURRENT FUNDAMENTAL POLICY
- ----- --------------------------
All SAAT Funds The SAAT Funds concentrate their interests in investment
company interests.
SDIT Corporate Daily Income, SDIT Short-Duration No Fund may purchase securities of other investment
Government, SDIT Intermediate-Duration Government and companies; provided that all Funds may purchase such
SDIT GNMA Funds securities as permitted by the 1940 Act and the rules and
regulations thereunder but, in any event, such Funds may
not purchase securities of other open-end investment
companies.
INDEX S&P 500 Index, INDEX Bond Index, SIT No Fund may purchase securities of other investment
International Fixed Income, STET Intermediate-Term companies except as permitted by the 1940 Act and the
Municipal, STET Pennsylvania Municipal Bond and STET rules and regulations thereunder and may only purchase
Pennsylvania Tax Free Funds securities of money market funds.
STET Tax Free, STET Institutional Tax Free and STET No Fund may purchase securities of other investment
California Tax Exempt Funds companies as permitted by the 1940 Act and the rules and
regulations thereunder.
</Table>
41
<Page>
PROPOSED FUNDAMENTAL POLICY. None. However, the Board has approved a
non-fundamental policy as discussed below.
ANALYSIS OF PROPOSED CHANGES. The Funds' current fundamental policy is
based on requirements imposed by the administrators of securities laws in
various states. However, federal legislation passed in 1996 preempted
substantive state regulation of mutual funds and the sale of their shares. The
1940 Act does not currently require the Funds to have a fundamental policy
regarding investments in securities of other investment companies. As a result,
it is proposed that the current fundamental policy be eliminated.
The Funds are limited in their ability to invest in shares of other
investment companies by Section 12(d)(1) of the 1940 Act and by Rule 2a-7
governing money market funds. The 1940 Act generally limits a Fund to: (i)
purchasing 3% of the total outstanding voting stock of a single other investment
company; (ii) investing 5% of its total assets in the securities of a single
other investment company; and (iii) investing 10% of its total assets in
securities of all other investment companies. Rule 2a-7 imposes additional
limitations on money market funds' investments in other investment companies
because Rule 2a-7 limits fund investments, for money market funds, to high
quality instruments that present minimal credit risk.
PROPOSED NON-FUNDAMENTAL POLICY. While the Funds propose eliminating the
current fundamental policy, the Board has approved that the Funds' current
fundamental policy regarding investments in securities of other investment
companies be reclassified as non-fundamental. By reclassifying the fundamental
policy to non-fundamental, the Funds would be able to make a change to the
non-fundamental policy without incurring the cost of holding a shareholder
meeting. The reclassification of the Funds' current fundamental policy to a
non-fundamental policy is not expected to affect the management of the Funds.
Accordingly, should Shareholders approve this Proposal, the Funds intend to
adopt the non-fundamental policy described in Exhibit E.
ITEM 4 (k) - ELIMINATE POLICY REGARDING THE INVESTING IN ISSUERS WHEN
SECURITIES ARE OWNED BY OFFICERS AND TRUSTEES
CURRENT FUNDAMENTAL POLICY. The chart below describes each Fund's
current fundamental policy regarding investing in issuers when securities are
owned by officers and Trustees.
<Table>
<Caption>
FUNDS CURRENT FUNDAMENTAL POLICY
- ----- --------------------------
SDIT Corporate Daily Income, SDIT Short-Duration No Fund may purchase or retain securities of an issuer if,
Government, SDIT Intermediate-Duration Government, SDIT to the knowledge of the Trust, an officer, trustee,
GNMA, SDIT Government II, INDEX S&P 500 Index, INDEX partner or director of the Trust or any investment adviser
Bond Index, SIT International Fixed Income, STET Tax of the Trust owns beneficially more than 1/2 of 1% of the
Free, STET Institutional Tax Free, STET California Tax shares or securities of such issuer and all such officers,
Exempt, STET Intermediate-Term Municipal, STET trustees, partners and directors owning more than 1/2 of
Pennsylvania Municipal Bond and STET Pennsylvania 1% of such shares or securities together own more than 5%
Tax Free Funds of such shares or securities.
</Table>
42
<Page>
PROPOSED FUNDAMENTAL POLICY. None.
ANALYSIS OF PROPOSED CHANGES. The Funds' current fundamental policy is
based on requirements imposed by the administrators of securities laws in
various states. However, federal legislation passed in 1996 preempted
substantive state regulation of mutual funds and the sale of their shares, and
there is no comparable requirement under the 1940 Act. It is proposed that the
fundamental policy regarding investments in issuers when officers or Trustees of
the Trust own securities of such issuer for each Fund be eliminated. The
elimination of this fundamental policy will maximize each Fund's investment
flexibility.
ITEM 4 (l) - FUNDAMENTAL POLICY REGARDING INVESTMENTS IN "UNSEASONED
ISSUERS"
CURRENT FUNDAMENTAL POLICY. The chart below describes each Fund's
current fundamental policy regarding investments in "unseasoned issuers."
<Table>
<Caption>
FUNDS CURRENT FUNDAMENTAL POLICY
- ----- --------------------------
SDIT Corporate Daily Income, SDIT Short-Duration No Fund may purchase securities of any company which has
Government, SDIT Intermediate-Duration Government, SDIT (with predecessors) a record of less than three years
GNMA, SDIT Government II, SIT International Fixed continuing operations, except: (i) obligations issued or
Income, STET Tax Free, STET Institutional Tax Free, guaranteed by the U.S. Government, its agencies
STET California Tax Exempt, STET Intermediate-Term or instrumentalities; or (ii) municipal securities which
Municipal, STET Pennsylvania Municipal Bond and STET are rated by at least two nationally recognized municipal
Pennsylvania Tax Free Funds bond rating services if, as a result, more than 5% of the
total assets (taken at fair market value and current value
for the STET Funds) would be invested in such securities.
INDEX S&P 500 Index and INDEX Bond Index Funds No Fund may purchase securities of any company which has
(with predecessors) a record of less than three years
continuing operations if, as a result, more than 5% of the
total assets (taken at current value) would be invested in
such securities.
</Table>
PROPOSED FUNDAMENTAL POLICY. None.
ANALYSIS OF PROPOSED CHANGES. The Funds' current fundamental policy is
based on requirements imposed by the administrators of securities laws in
various states. However, federal legislation passed in 1996 preempted
substantive state regulation of mutual funds and the sale of their shares, and
there is no comparable requirement under the 1940 Act. It is proposed that the
fundamental policy regarding investments in "unseasoned issuers" for each Fund
be eliminated. The elimination of this fundamental policy will maximize each
Fund's investment flexibility, but is not intended to change the Funds' current
operating policies.
43
<Page>
ITEM 4 (m) - FUNDAMENTAL POLICY REGARDING INVESTMENTS IN OPTIONS
CURRENT FUNDAMENTAL POLICY. The chart below describes each Fund's
current fundamental policy regarding investments in options.
<Table>
<Caption>
FUNDS CURRENT FUNDAMENTAL POLICY
- ----- --------------------------
SDIT Corporate Daily Income, SDIT Short-Duration No Fund may purchase warrants, puts, calls, straddles,
Government, SDIT Intermediate-Duration Government, SDIT spreads or combinations thereof, except that the SDIT
GNMA, SDIT Government II, INDEX S&P 500 Index and INDEX Intermediate-Duration Government and SDIT GNMA Funds may
Bond Index Funds invest in options on futures contracts.
STET Tax Free, STET Institutional Tax Free, STET No Fund may purchase warrants, puts, calls, straddles,
California Tax Exempt, STET Intermediate-Term spreads or combinations thereof, except as permitted by
Municipal, STET Pennsylvania Municipal Bond and STET its statement of additional information.
Pennsylvania Tax Free Funds
</Table>
PROPOSED FUNDAMENTAL POLICY. None. However, the Board has approved a
non-fundamental policy as discussed below.
ANALYSIS OF PROPOSED CHANGES. Under the 1940 Act, the Funds are not
required to adopt a fundamental policy regarding investment in options. As a
result, it is proposed that the current fundamental policy be eliminated.
PROPOSED NON-FUNDAMENTAL POLICY. While the Funds propose eliminating the
current fundamental policy, the Board has approved that the Funds' fundamental
policy regarding investments in options be reclassified as non-fundamental. By
reclassifying the fundamental policy to non-fundamental, Funds would be able to
make a change to the non-fundamental policy without incurring the cost of
holding a shareholder meeting. The reclassification of the Funds' current
fundamental policy to a non-fundamental policy is not expected to affect the
management of the Funds. Accordingly, should Shareholders approve this Proposal,
the non-fundamental policy described in Exhibit E will take effect.
ITEM 4 (n) - FUNDAMENTAL POLICY REGARDING INVESTMENT IN OIL AND GAS
CURRENT FUNDAMENTAL POLICY. The chart below describes each Fund's
current fundamental policy regarding investment in oil and gas.
<Table>
<Caption>
FUNDS CURRENT FUNDAMENTAL POLICY
- ----- --------------------------
All SAAT Funds, SIMT Large Cap Growth, SIMT Large Cap No Fund may invest in interests in oil, gas, or other
Value, SIMT Tax-Managed Large Cap, SIMT Mid-Cap, mineral exploration or development programs and oil, gas or
SIMT Small Cap Growth, SIMT Small Cap Value, SIMT mineral leases.
Core Fixed Income, SIMT High Yield Bond, SIT
International Equity, SIT Emerging Markets Equity,
SIT Emerging Markets Debt, SIT International Fixed
Income, STET California Municipal Bond, STET
Massachusetts
</Table>
44
<Page>
<Table>
Municipal Bond, STET New Jersey Municipal
Bond and STET New York Municipal Bond Funds
SDIT Corporate Daily Income, SDIT Short-Duration No Fund may invest in interests in oil, gas or other mineral
Government, SDIT Intermediate-Duration Government, exploration or development programs.
SDIT GNMA, SDIT Government II, INDEX S&P 500 Index,
INDEX Bond Index, STET Tax Free, STET
Intermediate-Term Municipal, STET Pennsylvania
Municipal Bond and STET Pennsylvania Tax Free Funds
STET Institutional Tax Free and STET California Tax No Fund may invest in interests in oil, gas or mineral
Exempt Funds leases.
</Table>
PROPOSED FUNDAMENTAL POLICY. None. However, the Board has approved a
non-fundamental policy as discussed below.
ANALYSIS OF PROPOSED CHANGE. The Funds' current fundamental policy is
based on requirements imposed by the administrators of securities laws in
various states. However, federal legislation passed in 1996 preempted
substantive state regulation of mutual funds and the sale of their shares. The
1940 Act does not currently require the Funds to have a fundamental policy
regarding investment in oil and gas. As a result, it is proposed that the
current fundamental policy be eliminated.
PROPOSED NON-FUNDAMENTAL POLICY. While the Funds propose eliminating the
current fundamental policy, the Board has approved that the Funds' current
fundamental policy regarding investment in oil and gas be reclassified as a
non-fundamental policy. By reclassifying the fundamental policy to
non-fundamental, the Funds would be able to make a change to the non-fundamental
policy without incurring the cost of holding a shareholder meeting. The
reclassification of the Funds' current fundamental policy to a non-fundamental
policy is not expected to affect the management of the Funds. Accordingly,
should Shareholders approve this Proposal, the non-fundamental policy described
in Exhibit E will take effect.
ITEM 4 (o) - FUNDAMENTAL POLICY REGARDING INVESTMENTS IN ILLIQUID AND
RESTRICTED SECURITIES
CURRENT FUNDAMENTAL POLICY. The chart below describes each Fund's
current fundamental policy regarding investments in illiquid and restricted
securities.
<Table>
<Caption>
FUNDS CURRENT FUNDAMENTAL POLICY
- ----- --------------------------
SDIT Corporate Daily Income, SDIT Short-Duration No Fund may purchase restricted securities (securities
Government, SDIT Intermediate-Duration Government, SDIT which must be registered under the Securities Act of 1933
GNMA, SDIT Government II, INDEX S&P 500 Index, INDEX before they may be offered or sold to the public) or other
Bond Index and SIT International Fixed Income Funds illiquid securities except as described in the
prospectuses and statement of additional information.
</Table>
45
<Page>
ANALYSIS OF PROPOSED CHANGES. The Funds' current fundamental policy is
based on requirements imposed by the administrators of securities laws in
various states. However, federal legislation passed in 1996 preempted
substantive state regulation of mutual funds and the sale of their shares. The
1940 Act does not currently require the Funds to have a fundamental policy
restricting investment in illiquid or restricted securities. As a result, it is
proposed that the current fundamental policy be eliminated.
PROPOSED NON-FUNDAMENTAL POLICY. While the Funds propose eliminating the
current fundamental policy, the Board has approved that the fundamental policy
regarding investments in illiquid and restricted securities be amended, by
eliminating the restrictions for purchase of restricted securities and
clarifying the policy for purchase of illiquid securities, and reclassified as a
non-fundamental policy. Eliminating restrictions for purchase of restricted
securities would provide the Funds with additional flexibility. The exception to
securities registration requirements added by Rule 144A under the Securities Act
of 1933 permits trading of restricted securities among institutional investors,
such as the Funds, and this has created active markets in restricted securities,
allowing certain restricted securities to be considered liquid under guidelines
established by the Board of Trustees.
In addition, making the restrictions on illiquid securities
non-fundamental would give the Funds more flexibility in responding to changing
regulatory requirements. For example, a number of years ago, the SEC permitted
non-money market funds to increase the percentage of their assets that could be
invested in illiquid securities from 10% to 15%. Should the SEC change its
policy again, or should market conditions permit a change in this policy, it
would be advantageous to the Funds to be able to make a change without incurring
the cost of holding a shareholder meeting. Accordingly, should Shareholders
approve this Proposal, the non-fundamental policy described in Exhibit E will
take effect.
ITEM 4 (p) - FUNDAMENTAL POLICY MAKING ALL INVESTMENT LIMITATIONS IN
PROSPECTUS FUNDAMENTAL
CURRENT FUNDAMENTAL POLICY. The chart below describes each Fund's
fundamental policy making all investment limitations in its prospectus
fundamental.
<Table>
<Caption>
FUNDS CURRENT FUNDAMENTAL POLICY
- ----- --------------------------
SIMT Large Cap Value, SIMT Large Cap Growth, SIMT The Funds' investment limitations in their respective
Tax-Managed Large Cap, SIMT Small Cap Value, SIMT Small prospectuses are fundamental.
Cap Growth, SIMT Tax-Managed Small Cap, SIMT Mid-Cap,
SIMT Core Fixed Income, SIMT High Yield Bond, STET Tax
Free, STET Institutional Tax Free, STET California Tax
Exempt, STET Intermediate-Term Municipal, STET
Pennsylvania Municipal Bond and STET Pennsylvania Tax
Free Funds
</Table>
46
<Page>
PROPOSED FUNDAMENTAL POLICY. It is proposed that the Funds' fundamental
policy making the Funds' policies fundamental be eliminated. This proposed
change, however, will not result in the elimination of those fundamental
policies that are required to be fundamental under the 1940 Act, as described
above in Items 4(a) through 4(o).
ANALYSIS OF PROPOSED CHANGES. Under the 1940 Act, the Funds are not
required to adopt a policy requiring that all of its investment limitations in
its prospectus be classified as fundamental. Management believes that the
current policy is unduly restrictive and may effectively prevent the Funds from
taking advantage of new investment opportunities that are potentially beneficial
to shareholders and available to other mutual funds. The proposed new policy
would enable the Funds to make changes in policies in response to new market
conditions or changes in the regulatory environment, subject to Board approval.
If this change is approved, the Board of Trustees may take appropriate and
timely action to amend, as necessary, and without the expense and delay
associated with a shareholder meeting, the Funds' policies in the event any
regulatory changes occur or new types of investments become available.
ITEM 4 (q) - FUNDAMENTAL POLICY REQUIRING THAT AT LEAST 65% OF THE
FUND'S ASSETS BE INVESTED IN PARTICULAR TYPES OF SECURITIES
CURRENT FUNDAMENTAL POLICY. The chart below describes the Fund's
fundamental policy that requires the Fund to invest at least 65% of its assets
in particular types of securities.
<Table>
<Caption>
FUND CURRENT FUNDAMENTAL POLICY
- ----- --------------------------
SDIT GNMA Fund The Fund may not invest less than 65% of its assets in
GNMA securities.
</Table>
PROPOSED FUNDAMENTAL POLICY. It is proposed that the Funds' fundamental
policy that requires a Fund to invest at least 65% of its assets in particular
types of securities be eliminated.
ANALYSIS OF PROPOSED CHANGE. Pursuant the Rule 35d-1 under the 1940
Act, the Fund is required to adopt a policy to invest, under normal
circumstances, at least 80% of the value of its assets in particular types of
investments, in investments in a particular industry, or investments in a
particular country or geographic region, as suggested by its name. This
policy may either be a fundamental policy or the Fund may adopt a policy to
provide Fund shareholders with at least 60 days' prior notice of any change
in this policy. The Fund has adopted a policy to invest its assets as
required under the 1940 Act, and to provide shareholders with at least 60
days' prior notice of any change to its policy. Management believes that the
current policy is unduly restrictive and this policy may effectively prevent
the Board of Trustees from taking appropriate and timely action to amend, as
necessary, and without the expense and delay associated with a shareholder
meeting, the Fund's policies in the event that any regulatory changes occur
or new types of investments become available. The Fund will continue to
invest its assets consistent with the requirements of Rule 35d-1.
47
<Page>
ITEM 4 (r) - FUNDAMENTAL POLICY REQUIRING THE MUNICIPAL FUNDS TO BE
FULLY INVESTED IN OBLIGATIONS WHICH PRODUCE INTEREST THAT IS EXEMPT FROM
BOTH FEDERAL AND STATE INCOME TAXES
CURRENT FUNDAMENTAL POLICY. The chart below describes each Fund's
fundamental policy that requires a Fund to be fully invested in obligations
which produce interest that is exempt from both federal and state income taxes.
<Table>
<Caption>
FUNDS CURRENT FUNDAMENTAL POLICY
- ----- --------------------------
STET California Municipal Bond Fund The Fund must be fully invested in obligations which
produce interest that is exempt from both Federal and
California state income taxes.
STET Massachusetts Municipal Bond Fund The Fund must be fully invested in obligations which
produce interest that is exempt from both Federal and
Massachusetts state income taxes.
STET New Jersey Municipal Bond Fund The Fund must be fully invested in obligations which
produce interest that is exempt from both Federal and New
Jersey state income taxes.
STET New York Municipal Bond Fund The Fund must be fully invested in obligations which
produce interest that is exempt from both Federal and New
York state and city income taxes.
STET Pennsylvania Municipal Bond Fund The Fund must be fully invested in obligations which
produce interest that is exempt from both Federal and
Pennsylvania state income taxes.
</Table>
PROPOSED FUNDAMENTAL POLICY.
<Table>
<Caption>
FUNDS PROPOSED FUNDAMENTAL POLICY
- ----- ---------------------------
STET California Municipal Bond Fund At least 80% of its net assets is invested in obligations
which produce interest that is exempt from both Federal
and California state income taxes.
STET Massachusetts Municipal Bond Fund At least 80% of its net assets is invested in obligations
which produce interest that is exempt from both Federal
and Massachusetts state income taxes.
STET New Jersey Municipal Bond Fund At least 80% of its net assets is invested in obligations
which produce interest that is exempt from both Federal
and New Jersey state income taxes.
STET New York Municipal Bond Fund At least 80% of its net assets is invested in obligations
which produce interest that is exempt from both Federal
and New York state and city income taxes.
STET Pennsylvania Municipal Bond Fund At least 80% of its net assets is invested in obligations
which produce interest that is exempt from both Federal
and Pennsylvania state income taxes.
</Table>
ANALYSIS OF PROPOSED CHANGE. Under the 1940 Act, a fund with a name that
suggests that its distributions are exempt from both Federal and state income
tax, such as the STET California Tax Exempt Fund, must have a fundamental policy
to invest, under normal
48
<Page>
circumstances, either: (i) at least 80% of the value of its assets in
investments the income from which is exempt from both Federal income tax and
the income tax of the named state; or (ii) its assets so that at least 80% of
the income that it distributes will be exempt from both Federal income tax
and the income tax of the named state. The Funds' current policy is more
restrictive in that it requires that all of the Funds' assets be invested in
obligations that produce income that is exempt from both Federal and state
income taxes. As a result, it is proposed that the Funds' investment policy
be amended to provide the Funds more flexibility. However, it is not expected
that the changes in this fundamental policy will materially change the manner
in which the Funds are managed.
ITEM 4 (s) - FUNDAMENTAL POLICY THAT THE FUNDS MUST ABIDE BY THEIR
MATURITY RESTRICTIONS AND INVEST SOLELY IN INVESTMENTS PERMITTED BY
THEIR PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION
CURRENT FUNDAMENTAL POLICY. The chart below describes each Fund's
fundamental policy that requires a Fund to abide by its maturity restrictions
and invest solely in investments permitted by its prospectus and statement of
additional information.
<Table>
<Caption>
FUNDS CURRENT FUNDAMENTAL POLICY
- ----- --------------------------
STET Intermediate-Term Municipal and STET The Fund must abide by its maturity restrictions and
Pennsylvania Municipal Bond Funds invest solely in the permitted investments in its
statement of additional information and prospectuses.
</Table>
PROPOSED FUNDAMENTAL POLICY. None, however, the Board has approved a
non-fundamental policy as discussed below.
ANALYSIS OF PROPOSED CHANGES. Under the 1940 Act, the Funds are not
required to adopt a fundamental policy requiring the Funds to abide by their
maturity restriction and invest solely in investments permitted by their
prospectus and statement of additional information. Management believes that the
current policy is unduly restrictive and may effectively prevent the Funds from
taking advantage of new investment opportunities that are potentially beneficial
to shareholders and available to other mutual funds. The proposed new policy
would enable the Funds to make changes in policies in response to new market
conditions or changes in the regulatory environment, subject to Board approval.
If this change is approved, the Board of Trustees may take appropriate and
timely action to amend, as necessary, and without the expense and delay
associated with a shareholder meeting, the Funds' policies in the event any
regulatory changes occur or new types of investments become available.
PROPOSED NON-FUNDAMENTAL POLICY. While the Funds propose eliminating
the current fundamental policy, the Board has approved the reclassification
of the Funds' current fundamental policy regarding investing solely in
investments permitted by their prospectus and statement of additional
information and abiding by their maturity restriction as a non-fundamental
policy. By reclassifying the fundamental policy to non-fundamental, the Funds
would be able to make a change to the non-fundamental policy without
incurring the cost of holding a shareholder meeting. The reclassification of
the Funds' current fundamental policy to a non-fundamental
49
<Page>
policy is not expected to affect the management of the Funds. Accordingly,
should Shareholders approve this Proposal, the non-fundamental policy described
in Exhibit E will take effect.
ITEM 4 (t) - FUNDAMENTAL POLICY THAT THE FUND MAY ONLY PURCHASE
SECURITIES WITH A REMAINING MATURITY OF 365 DAYS OR LESS
CURRENT FUNDAMENTAL POLICY. The chart below describes the Fund's
fundamental policy that requires the Fund to only purchase securities with a
remaining maturity of 365 days or less.
<Table>
<Caption>
FUND CURRENT FUNDAMENTAL POLICY
- ----- --------------------------
SLAT Prime Obligation Fund The Fund may only purchase securities with a remaining
maturity of 365 days or less.
</Table>
PROPOSED FUNDAMENTAL POLICY. None.
ANALYSIS OF PROPOSED CHANGES. Rule 2a-7 under the 1940 Act currently
requires money market funds, such as the SLAT Prime Obligation Fund, to limit
their investments to securities with remaining maturities of 397 days or less,
and maintain a dollar-weighted average maturity of 90 days or less. The Fund's
current fundamental policy is more restrictive than the 1940 Act and Rule 2a-7
currently require. As a result, it is proposed that the current fundamental
policy be eliminated. The Fund will continue to be subject to the requirements
of Rule 2a-7.
TRUSTEES' CONSIDERATIONS. In unanimously approving the elimination or
reclassification of the Funds' fundamental policies and restrictions, the
Trustees considered the flexibility that the Funds would have under the proposed
fundamental policies. In particular, the Trustees considered that the Funds
would be able to adapt to future developments in investment practices and
changes in laws and regulations without the delay and cost associated with a
shareholder meeting.
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS VOTE "FOR" EACH
ELEMENT OF PROPOSAL 4.
50
<Page>
INFORMATION CONCERNING
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS
PricewaterhouseCoopers LLP ("PwC") serves as the independent public
accounting firm for SAAT, SLAT, SIMT and SIT, and Ernst & Young LLP ("E&Y" and,
together with PwC, the "Independent Registered Public Accounting Firms") serves
as the independent registered public accounting firm for INDEX, STET and SDIT.
The Independent Registered Public Accounting Firms conduct annual audits
of the Trusts' financial statements, assist in the preparation of the Trusts'
federal and state income tax returns and the Trusts' filings with the SEC, and
consult with the Trust as to matters of accounting and federal and state income
taxation. During the Audit Committee's most recent consideration of whether to
recommend the Independent Registered Public Accounting Firms as independent
registered public accounting firms for the Trusts, the Audit Committee
considered whether the provision of any non-audit services to the Trusts by the
Independent Registered Public Accounting Firms was compatible with maintaining
their independence.
Representatives of PwC or E&Y are not expected to be present at the
Meeting, but have been given an opportunity to make a statement if they so
desire and will be available should any matter arise requiring their presence.
AUDIT FEES. The aggregate fees billed for professional services rendered
for the audit of the Trusts' annual financial statements for the most recent
fiscal year and the review of the financial statements included in the Trusts'
reports to shareholders were as follows:
<Table>
<Caption>
TRUST AND FISCAL YEAR AGGREGATE FEES
- --------------------- --------------
SEI Liquid Asset Trust $ XX
June 30, 2004
SEI Tax Exempt Trust $ 135,300
August 31, 2003
SEI Daily Income Trust $ XX
January 31, 2004
SEI Index Funds $ 27,600
March 31, 2004
SEI Asset Allocation Trust $ 131,428
March 31, 2004
SEI Institutional Managed Trust --
September 30, 2003
SEI Institutional International Trust $ 100,450
August 31, 2003
</Table>
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. [The
following is the fees billed by PwC or E&Y for each Trust's most recent fiscal
year for services rendered for financial information systems design and
implementation services provided to the Trusts,
51
<Page>
SIMC or any entity that controls, is controlled by or is under common control
with SIMC that provides services to the Trusts: [$XX]].
ALL OTHER FEES. [The following is the amount of other fees PwC or E&Y
billed for each Trust's most recent fiscal year for other services rendered to
the Trusts, SIMC or any entity that controls, is controlled by or is under
common control with SIMC that provides services to the Trusts: [$XX]].
GENERAL INFORMATION ABOUT THE TRUST AND OTHER MATTERS
INFORMATION ABOUT OFFICERS OF THE TRUSTS. The chart below provides basic
information about each Trust's current officers. The mailing address of each
officer is One Freedom Valley Drive, Oaks, PA 19456.
<Table>
<Caption>
NUMBER OF
FUNDS IN
THE FUND
POSITION TERM OF OFFICE COMPLEX
NAME AND WITH THE AND LENGTH OF PRINCIPAL OCCUPATION TO BE
AGE TRUSTS TIME SERVED DURING THE PAST FIVE YEARS OVERSEEN
Edward D. Loughlin, President and No set term; served SEI Executive Vice President and 68
53 Chief Executive Daily Income Trust since President--Asset Management Division of
Officer 1982; SEI Asset Allocation SEI since 1993. Director and President of
Trust since 1995; SEI SIMC since 2004. Chief Executive Officer
Index Funds since 1985; of SEI Investments Fund Management and
SEI Institutional Director of SEI Investments Distribution
International Trust since Co. since 2003. Executive Vice President
1988; SEI Institutional of SEI Investments Fund Management,
Managed Trust since 1986; 1994-2003. Executive Vice President
SEI Liquid Asset Trust of SIMC, 1994-2004.
since 1995; SEI Tax Exempt
Trust since 1982.
Timothy D. Barto, 36 Vice President No set term; served since General Counsel and Secretary of SIMC and 68
and Secretary 1999. SEI Investments Fund Management since
2004. Vice President of SIMC and SEI
Investments Fund Management since 2001.
Vice President and Assistant Secretary of
SEI since 2001. Assistant Secretary of
SIMC, SEI Investments Fund Management and
SEI Investments Distribution Co. and Vice
President of SEI Investments Distribution
Co., 1999-2003. Associate, Dechert Price
& Rhoads (law firm), 1997-1999.
Lydia A. Gavalis, 40 Vice President No set term; served since Vice President and Assistant Secretary of 68
and Assistant 1998. SEI and SIMC since 1998. Assistant
Secretary Secretary of SEI Investments Fund
Management since 1998. Vice President of
SEI Investments Fund Management and SEI
Investments Distribution Co. and
</Table>
52
<Page>
<Table>
Assistant Secretary of SEI Investments
Distribution Co., 1998-2003.
Christine M. Vice President No set term; served since Vice President and Assistant Secretary of 68
McCullough, 43 and Assistant 1999. SEI since 2000. Vice President and
Secretary Assistant Secretary of SIMC since 1999.
Vice President and Assistant Secretary of
SEI Investments Fund Management and SEI
Investments Distribution Co., 1999-2003.
Associate, White and Williams LLP (law
firm), 1991-1999.
William E. Zitelli, Vice President No set term; served since Assistant Secretary of SIMC and SEI 68
Jr., 36 and Assistant 2001. Investments Fund Management since 2000.
Secretary Vice President and Assistant Secretary of
SEI since 2000. Vice President of SIMC,
SEI Investments Fund Management and SEI
Investments Distribution Co. and
Assistant Secretary of SEI Investments
Distribution Co., 2000-2003. Vice
President, Merrill Lynch & Co. Asset
Management Group, 1998-2000.
John Munera, 41 Vice President No set term; served since Global AML Compliance Officer at SEI 68
and Assistant 2002. since March 2002. Middle Office
Secretary Compliance Officer at SEI, July 2000 to
December 2002. Supervising Examiner at
Federal Reserve Bank of Philadelphia,
1998-2000.
Peter (Pedro) A. Controller and No set term; served since Director, Fund Accounting and 68
Rodriguez, 42 Chief Financial 2003. Administration, SEI Investments Global
Officer Funds Services, March 1997 to April 2002
and September 2002 to present. Vice
President, Fund Administration, BlackRock
Financial Management, April 2002 to
September 2002.
John J. McCue, 41 Vice President No set term; served since Director of Portfolio Implementations for 68
2004. SIMC, August 1995 to present. Managing
Director of Money Market Investments for
SIMC, January 2003 to present.
</Table>
[TRUSTEE AND OFFICER FUND OWNERSHIP. The chart below shows the number of
shares of each Fund beneficially owned by each Trustee and officer as of June
30, 2004. The Trusts do not have knowledge as to whether any Trustee has the
right to acquire beneficially ownership of shares in a Fund. In cases where the
amount of a Fund owned is more than 1% of the Fund's assets, the percentage is
noted. Unless otherwise noted, each Trustee and officer owns less than one
percent (1%) of each Fund's shares.]
<Table>
<Caption>
AMOUNT AND
NAME AND ADDRESS NATURE OF
OF BENEFICIAL BENEFICIAL
FUND OWNER OWNERSHIP PERCENT OF FUND
- ---- ----- --------- ---------------
</Table>
53
<Page>
DISTRIBUTION. SEI Investments Distribution Co., located at Oaks,
Pennsylvania 19456, a wholly-owned subsidiary of SEI, acts as the distributor of
the Funds, and is an affiliate of SIMC.
[FUND TRANSACTIONS. The Bond Index Fund of INDEX, the Short-Duration Government,
Intermediate-Duration Government, GNMA and Corporate Daily Income Funds of SDIT,
and the California Tax Exempt, Tax Free, Institutional Tax Free and
Pennsylvania Tax Free Funds of STET did not pay an brokerage commissions to
any affiliate for their respective fiscal year ends.]
[ADMINISTRATOR. SEI Investments Fund Management ("SIFM"), located at Oaks,
Pennsylvania 19456, serves as the Funds' administrator and is a wholly-owned
subsidiary of SEI and an affiliate of SIMC. The chart below provides the fees
paid by the Funds to SIFM for administration services.]
<Table>
<Caption>
TRUST AND FISCAL YEAR FEES PAID TO SIFM
- --------------------- -----------------
SEI Liquid Asset Trust $ 3,286,000
June 30, 2004
SEI Tax Exempt Trust $ 9,716,000
August 31, 2003
SEI Daily Income Trust $ 18,577,000
January 31, 2004
SEI Index Funds $ 3,011,000
March 31, 2004
SEI Asset Allocation Trust $ 2,429,614
</Table>
54
<Page>
<Table>
<Caption>
TRUST AND FISCAL YEAR FEES PAID TO SIFM
- --------------------- -----------------
March 31, 2004
SEI Institutional Managed Trust $ 48,275,000
September 30, 2003
SEI Institutional International Trust $ 23,003,000
September 30, 2003
</Table>
5% SHAREHOLDERS. As of August 17, 2004, the following persons were the
only persons who were record owners or, to the knowledge of the Funds, were
beneficial owners of 5% or more of each Fund's outstanding shares. The Funds
believe that most of the shares referred to above were held by the below persons
in accounts for their fiduciary, agency, or custodial customers.
<Table>
<Caption>
NAME AND ADDRESS OF PERCENT OF FUND'S
SHAREHOLDER NUMBER OF SHARES OWNED OUTSTANDING SHARES
- ----------- ---------------------- ------------------
</Table>
ADJOURNMENT. In the event that sufficient votes in favor of a 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 to permit further
solicitation of proxies with respect to any such 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 adjournments with respect to
a Proposal those proxies that they are entitled to vote in favor of such
Proposal. They will vote against any such adjournment those proxies required to
be voted against any such Proposals. SIMC will bear the costs of any additional
solicitation and any adjourned sessions.
QUORUM AND REQUIRED VOTE. In order to act upon a Proposal, a quorum is
required to be present at the Meeting. A majority of the aggregate number of
shares in a Fund entitled to vote at the Meeting constitutes a quorum. Any
lesser number of shares, however, is sufficient for adjournments.
Approval of Proposal 1 requires the affirmative vote of a majority of
shares represented at the Meeting. Approval of Proposals 2, 3 and 4 with respect
to a Fund requires the affirmative vote of a majority of the outstanding shares
of the Fund. As defined in the 1940 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 a
Proposal, but will be counted for purposes of determining whether a quorum is
present. Abstentions will be counted as votes present for purposes of
determining a "majority of shares represented" (for Proposal 1) and "majority of
the outstanding voting securities" (for Proposals 2, 3 and 4) present
55
<Page>
at the Meeting and will therefore have the effect of counting against the
Proposal to which it relates.
SHAREHOLDER PROPOSALS. The Trusts do 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 Trusts c/o SEI Investments Management Corporation, One Freedom
Valley Drive, Oaks, Pennsylvania 19456.
REPORTS TO SHAREHOLDERS. THE TRUSTS WILL FURNISH, WITHOUT CHARGE, A COPY
OF A FUND'S MOST RECENT ANNUAL REPORT TO SHAREHOLDERS AND ITS MOST RECENT
SEMI-ANNUAL REPORT SUCCEEDING SUCH ANNUAL REPORT, IF ANY, UPON REQUEST. Requests
should be directed to the Trusts at One Freedom Valley Drive, Oaks, Pennsylvania
19456, or by calling 1-800-DIAL-SEI.
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 CARD AND RETURN IT PROMPTLY.
56
<Page>
[EXHIBITS]
EXHIBIT A - NOMINATING COMMITTEE CHARTER
THE COMMITTEE
The Nominating Committee (the "Committee") is a committee of, and
established by, the Board of Trustees (the "Board") of SEI Liquid Asset Trust,
SEI Tax Exempt Trust, SEI Daily Income Trust, SEI Index Funds, SEI Institutional
Managed Trust, SEI Institutional International Trust, SEI Asset Allocation Trust
and SEI Institutional Investments Trust (collectively, the "Trusts"). The
Committee consists of such number of members as set by the Board from time to
time and its members shall be selected by the Board. The Committee shall be
comprised entirely of "Independent Trustees." For purposes of this Charter,
Independent Trustees shall mean members of the Board who are not interested
persons of the Trusts as defined in Section 2(a)(19) of the Investment Company
Act of 1940, as amended (the "1940 Act").
BOARD NOMINATIONS AND FUNCTIONS
1. The Committee shall select and nominate all persons to serve as
Independent Trustees. The Committee shall evaluate candidates' qualifications
for Board membership and the independence of such candidates from the investment
advisers and other principal service providers for the funds of the Trusts.
Persons selected must be independent in terms of both the letter and the spirit
of the 1940 Act. The Committee shall also consider the effect of any
relationships beyond those delineated in the 1940 Act that might impair
independence, E.G., business, financial or family relationships with investment
advisers or service providers.
2. The Committee also shall evaluate the qualifications of and make
recommendations for "interested" Trustee candidates to the Board.
3. The Committee may adopt from time to time specific, minimum
qualifications that the Committee believes a candidate must meet before being
considered as a candidate for Board membership and shall comply with any rules
adopted from time to time by the U.S. Securities and Exchange Commission
regarding investment company nominating committees and the nomination of persons
to be considered as candidates for Board membership.
4. The Committee shall review shareholder recommendations for nominations
to fill vacancies on the Board if such recommendations are submitted in writing
and addressed to the Committee at the applicable Trust's offices. The Committee
shall adopt, by resolution, a policy regarding its procedures for considering
candidates for the Board, including any recommended by shareholders.
<Page>
COMMITTEE NOMINATIONS AND FUNCTIONS
1. The Committee has the authority to make recommendations to the full
Board for nomination for membership on any committees of the Board.
2. The Committee is responsible for the adoption and administration of any
policy for retirement from Board membership.
3. The Committee has the authority to review as necessary the
responsibilities of any committees of the Board, whether there is a continuing
need for each committee, whether there is a need for additional committees of
the Board, and whether committees should be combined or reorganized. The
Committee shall make recommendations for any such action to the full Board.
4. The Committee shall, on an annual basis or at least as often as is
required by law, review the performance of the Board. The Committee may invite
any or all Interested Trustees or others to participate in such reviews as it
deems appropriate.
OTHER POWERS AND RESPONSIBILITIES
1. The Committee shall meet at least once each year or more frequently in
open or executive sessions. The Committee may invite members of management,
counsel, advisers and others to attend its meetings as it deems appropriate. The
Committee shall have separate sessions with management and others, as and when
it deems appropriate.
2. The Committee shall have the resources and authority appropriate to
discharge its responsibilities, including authority to retain special counsel
and other experts or consultants at the expense of the applicable Fund or Trust.
3. The Committee shall report its activities to the Board and make such
recommendations as the Committee may deem necessary or appropriate.
4. A majority of the members of the Committee shall constitute a quorum for
the transaction of business at any meeting of the Committee. The action of a
majority of the members of the Committee present at a meeting at which a quorum
is present shall be the action of the Committee. The Committee may meet in
person or by telephone, and the Committee may act by written consent, to the
extent permitted by law and by the applicable Trust's by-laws. In the event of
any inconsistency between this Charter and a Trust's organizational documents,
the provisions of the Trust's organizational documents shall govern.
5. The Committee shall review this Charter as appropriate and recommend any
changes to the full Board.
6. The Committee shall elect one of its members to serve as Chairman, who
shall serve until another Chairman is elected.
Adopted: June 17, 2004
<Page>
EXHIBIT B - ADVISORY AGREEMENT BETWEEN SIMC AND INDEX
INVESTMENT ADVISORY AGREEMENT
SEI INDEX FUNDS
AGREEMENT made as of the 18th day of November, 1998, by and between SEI
Index Funds, a Massachusetts business trust (the "Trust"), and SEI Investments
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 the S&P 500 Index Fund and such other
portfolios as the Trust and the Adviser may agree upon (the "Funds"), 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 Fund(s)) and thereafter supervise the investment
activities of one or more sub-advisers deemed necessary to carry out the
investment program of any Funds of the Trust, and to continuously review,
supervise and (where appropriate) administer the investment program of the
Funds, 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 Fund 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
<Page>
(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:
(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 Fund(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
Funds either directly with the issuer or with any broker or dealer. In executing
Fund transactions and selecting brokers or dealers, the Adviser will use its
best efforts to seek on behalf of the Fund 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 Fund 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 Funds 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 Fund.
In addition, the 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 or
<Page>
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 Fund's securities be purchased from or sold to
the Adviser, any sub-adviser engaged with respect to that Fund, 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 daily
rate, based on the annual percentage rates as specified in the attached
Schedule(s), to the assets of the Fund. 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 Fund 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 Fund 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
<Page>
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 Fund.
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
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 Fund; provided, however,
that if the shareholders of any Fund 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
<Page>
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 Fund 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 Fund 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:
To the Adviser at:
SEI Investments Management Corporation
One Freedom Valley Drive
Oaks, PA 19456
Attn: Legal Department
To the Trust at:
One Freedom Valley Drive
Oaks, PA 19456
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
<Page>
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 Fund of the Trust shall be liable for the obligations of any other Fund of
the Trust. Without limiting the generality of the foregoing, the Adviser shall
look only to the assets of a particular Fund for payment of fees for services
rendered to that Fund.
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 Index Funds SEI Investments Management Corporation
By: By:
/s/ Cynthia Parrish /s/ Todd Cipperman
- -------------------------------------- --------------------------------------
Name: Name:
Cynthia Parrish Todd Cipperman
- -------------------------------------- --------------------------------------
Title: Title:
Vice President Vice President
- -------------------------------------- --------------------------------------
<Page>
SCHEDULE A
TO THE
INVESTMENT ADVISORY AGREEMENT
BETWEEN
SEI INDEX FUNDS
AND
SEI INVESTMENTS MANAGEMENT CORPORATION
DATED NOVEMBER 18, 1998
AS AMENDED ____, 2004
Pursuant to Article 4, the Trust shall pay the Adviser compensation at an annual
rate as follows:
<Table>
S&P 500 Index Fund .03%
Bond Index Fund .07%
</Table>
<Page>
EXHIBIT C - ADVISORY AGREEMENT BETWEEN SIMC AND SDIT
INVESTMENT ADVISORY AGREEMENT
SEI DAILY INCOME TRUST
AGREEMENT made this 17th day of March, 2003, by and between SEI Daily
Income Trust, a Massachusetts business trust (the "Trust"), and SEI Investments
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, each having its own investment policies; and
WHEREAS, the Trust desires to retain the Adviser to render investment
management services with respect to its portfolios, as listed on attached
Schedule A, (each a "Fund" and, collectively, the "Funds"), 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 U.S.
Securities and Exchange Commission (the "SEC"), or by rule or regulation, a
majority of the outstanding voting securities of any affected Fund(s)) and
thereafter supervise the investment activities of one or more sub-advisers
deemed necessary to carry out the investment program of any Funds of the
Trust, and to continuously review, supervise and (where appropriate)
administer the investment program of the Funds, to determine in its
discretion (where appropriate) the securities to be purchased or sold, to
provide the Trust's administrator (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 Fund 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.
<Page>
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 the Adviser with copies
properly certified or authenticated of each of the following:
(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 Fund(s).
3. OTHER COVENANTS. The Adviser agrees that it:
(a) will comply with all applicable rules and regulations of the SEC 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
Funds 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 Fund 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 Fund 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
<Page>
research services a commission for executing a portfolio transaction
for any of the Funds 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 Fund. 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 Fund's securities be purchased from or
sold to the Adviser, any sub-adviser engaged with respect to that
Fund, 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 SEC 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 daily rate, based on the annual percentage rates as specified in
the attached Schedule(s), to the assets of a Fund. 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 Fund 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 Fund 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
<Page>
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 Fund.
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 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
and Federal 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
<Page>
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 Funds 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 Fund; provided, however, that if the shareholders
of any Fund 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 Fund 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 Fund
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
SEC.
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:
<Page>
To the Adviser at: SEI Investments Management Corporation
1 Freedom Valley Drive
Oaks, PA 19456
Attn: Legal Department
To the Trust at: SEI Daily Income Trust
c/o SEI Investments
1 Freedom Valley Drive
Oaks, PA 19456
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 Fund of the Trust shall be liable for the obligations of any other Fund
of the Trust. Without limiting the generality of the foregoing, the Adviser
shall look only to the assets of a particular Fund for payment of fees for
services rendered to that Fund.
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 as of the day and year first written above.
SEI Daily Income Trust SEI Investments Management Corporation
By: /s/ Timothy D. Barto By: /s/ Todd Cipperman
-------------------------------- -------------------------------
Attest: /s/ Jackie Bardyn Attest: /s/ Jackie Bardyn
---------------------------- ---------------------------
<Page>
AMENDED AND RESTATED
SCHEDULE A
TO THE INVESTMENT ADVISORY AGREEMENT
BETWEEN
SEI DAILY INCOME TRUST
AND
SEI INVESTMENTS MANAGEMENT CORPORATION
AS OF MARCH 17, 2003, AS AMENDED
_______, 2004
Money Market Fund
Prime Obligation Fund
Government Fund
Government II Fund
Treasury Fund
Treasury II Fund
Federal Securities Fund
Short-Duration Government Fund
Intermediate-Duration Government Fund
GNMA Fund
Corporate Daily Income Fund
Treasury Securities Daily Income Fund
<Page>
AMENDED AND RESTATED SCHEDULE B
TO THE INVESTMENT ADVISORY AGREEMENT
BETWEEN
SEI DAILY INCOME TRUST
AND
SEI INVESTMENTS MANAGEMENT CORPORATION
AS OF MARCH 17, 2003, AS AMENDED
__________, 2004
Pursuant to Article 4, the Trust shall pay the Adviser compensation at an annual
rate as follows:
0.075% on the first $500 million of assets and 0.02% on the assets in excess of
$500 million. The fee will be calculated based on the combined assets of the
following Funds managed by the Adviser:
Money Market Fund
Prime Obligation Fund
Government Fund
Government II Fund
Treasury Fund
Treasury II Fund
Federal Securities Fund
0.10% up to $500 million; 0.075% between $500 million and $1 billion; and 0.05%
over $1 billion. The fee will be calculated based on the combined assets of the
following Funds managed by the Adviser:
Short-Duration Government Fund
Intermediate-Duration Government Fund
GNMA Fund
0.10% up to $500 million; 0.075% between $500 million and $1 billion; and 0.05%
over $1 billion. The fee will be calculated based on the combined assets of the
following Funds managed by the Adviser:
Corporate Daily Income Fund
Treasury Securities Daily Income Fund
AGREED AND ACCEPTED:
SEI Daily Income Trust SEI Investments Management Corporation
By: /s/ By: /s/
-------------------------------- -------------------------------
Attest: /s/ Attest: /s/
---------------------------- ---------------------------
<Page>
EXHIBIT D - ADVISORY AGREEMENT BETWEEN SIMC AND STET
INVESTMENT ADVISORY AGREEMENT
SEI TAX EXEMPT TRUST
AGREEMENT made this 16th day of April, 1996, by and between SEI Tax Exempt
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 Intermediate-Term Municipal Portfolio
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.
<Page>
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 the Adviser with copies
properly certified or authenticated of each of the following:
(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
<Page>
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 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
<Page>
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 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 interests in the Adviser (or any successor thereof) as directors,
partners,
<Page>
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 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
<Page>
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
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, statue, 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 Tax Exempt Trust SEI Financial Management Corporation
By: /s/ Kevin Robins By: /s/ Todd Cipperman
-------------------------------- -------------------------------
Attest: /s/ Jennifer Klass Attest: /s/ Kevin Robins
---------------------------- ---------------------------
<Page>
SCHEDULE A
TO THE
INVESTMENT ADVISORY AGREEMENT
BETWEEN
SEI TAX EXEMPT TRUST
AND
SEI FINANCIAL MANAGEMENT CORPORATION
Pursuant to Article 4, the Trust shall pay the Adviser compensation at an annual
rate as follows:
<Table>
Intermediate-Term Municipal Portfolio .33%
</Table>
<Page>
SCHEDULE B
TO THE
INVESTMENT ADVISORY AGREEMENT
BETWEEN
SEI TAX EXEMPT TRUST
AND
SEI INVESTMENTS MANAGEMENT CORPORATION
This Schedule B forms a supplement to the Investment Advisory Agreement
(the "Agreement") dated April 16, 1996 between SEI Tax Exempt Trust (the
"Trust") and SEI Investments Management Corporation, f/k/a SEI Financial
Management Corporation (the "Adviser").
RECITALS
WHEREAS, the Trust and the Adviser entered into the Agreement, which sets
forth the rights and obligations of the parties pertaining to the management of
separate portfolios of the Trust managed by the Adviser;
WHEREAS, the Trust offers an investment portfolio: Pennsylvania Municipal
Bond Fund (the "Fund"), and has approved of the Adviser's management of the Fund
as a "manager of managers," in accordance with the Agreement; and
WHEREAS, at the shareholder meeting held on August 29, 2000, the
shareholders of the Fund approved the Agreement with respect to the Adviser's
management of the Fund.
AGREEMENTS
Now, therefore, the parties agree as follows:
The Trust hereby appoints the Adviser to act as investment adviser to the
Fund as provided in Section 1 of the Agreement. In making the Agreement
applicable with respect to the Fund, the Agreement is being entered into
severally and not jointly, as it pertains to the respective funds of the Trust,
and the Trust and the Adviser intend that the numbered provisions contained in
the Agreement be understood as applying separately to the Fund as if contained
in, and forming, a separate agreement.
The compensation of the Adviser, determined as set forth in Article 4 of
the Agreement with respect to the Fund, will be 0.35%.
The date of this Schedule B is August 29, 2000, which shall be deemed the
date upon which the Agreement has been executed with respect to the Fund.
<Page>
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 is binding only upon the assets and property of the Trust.
This Schedule B may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
The parties listed below have executed this Schedule B as of the 29th
day of August, 2000.
IN WITNESS WHEREOF, the parties hereto have caused this Schedule to be executed
as of August 29, 2000.
SEI Tax Exempt Trust SEI Investments Management Corporation
By: /s/ Timothy D. Barto By: /s/ Todd Cipperman
-------------------------------- -------------------------------
Attest: /s/ Jackie Bardyn Attest: /s/ Jackie Bardyn
---------------------------- ---------------------------
<Page>
SCHEDULE C
TO THE
INVESTMENT ADVISORY AGREEMENT
BETWEEN
SEI TAX EXEMPT TRUST
AND
SEI INVESTMENTS MANAGEMENT CORPORATION
This Schedule C forms a supplement to the Investment Advisory Agreement
(the "Agreement") dated April 16, 1996 between SEI Tax Exempt Trust (the
"Trust") and SEI Investments Management Corporation, f/k/a SEI Financial
Management Corporation (the "Adviser").
RECITALS
WHEREAS, the Trust and the Adviser entered into the Agreement, which sets
forth the rights and obligations of the parties pertaining to the management of
separate portfolios of the Trust managed by the Adviser; and
WHEREAS, the Trust has created an additional portfolio: Massachusetts Tax
Free Money Market Fund (the "Fund"), and has approved of the Adviser's
management of the Fund as a "manager of managers," in accordance with the
Agreement.
AGREEMENTS
Now, therefore, the parties agree as follows:
The Trust hereby appoints the Adviser to act as investment adviser to the
Fund as provided in Section 1 of the Agreement. In making the Agreement
applicable with respect to the Fund, the Agreement is being entered into
severally and not jointly, as it pertains to the respective funds of the Trust,
and the Trust and the Adviser intend that the numbered provisions contained in
the Agreement be understood as applying separately to the Fund as if contained
in, and forming, a separate agreement.
The compensation of the Adviser, determined as set forth in Article 4 of
the Agreement with respect to the Fund, will be 0.05% on the first $500,000,
000, 0.04% on the next $500,000,000 and 0.03% thereafter. For the purposes of
this fee schedule, the Advisor's fees will be calculated based upon the net
assets of the Fund, provided, however, payment to the Adviser shall not exceed
payment due from the Adviser to the Sub-Adviser in accordance with the terms of
the Sub-Advisory agreement for the Fund.
The date of this Schedule C is December 29, 2000, which shall be deemed the
date upon which the Agreement has been executed with respect to the Fund.
<Page>
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 is binding only upon the assets and property of the Trust.
This Schedule C may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
The parties listed below have executed this Schedule B as of the 29th day
of December, 2000.
IN WITNESS WHEREOF, the parties hereto have caused this Schedule to be executed
as of December 29, 2000.
SEI Tax Exempt Trust SEI Investments Management Corporation
By: /s/ Timothy D. Barto By: /s/ Todd Cipperman
-------------------------------- -------------------------------
Attest: /s/ Jackie Bardyn Attest: /s/ Jackie Bardyn
---------------------------- ---------------------------
<Page>
SCHEDULE D
TO THE
INVESTMENT ADVISORY AGREEMENT
BETWEEN
SEI TAX EXEMPT TRUST
AND
SEI INVESTMENTS MANAGEMENT CORPORATION
This Schedule D forms a supplement to the Investment Advisory Agreement
(the "Agreement") dated April 16, 1996 between SEI Tax Exempt Trust (the
"Trust") and SEI Investments Management Corporation, f/k/a SEI Financial
Management Corporation (the "Adviser").
RECITALS
WHEREAS, the Trust and the Adviser entered into the Agreement, which sets
forth the rights and obligations of the parties pertaining to the management of
separate portfolios of the Trust managed by the Adviser; and
WHEREAS, the Trust has created an additional portfolio: Short Duration
Municipal Fund (the "Fund"), and has approved of the Adviser's management of the
Fund as a "manager of managers," in accordance with the Agreement.
AGREEMENTS
Now, therefore, the parties agree as follows:
The Trust hereby appoints the Adviser to act as investment adviser to the
Fund as provided in Section 1 of the Agreement. In making the Agreement
applicable with respect to the Fund, the Agreement is being entered into
severally and not jointly, as it pertains to the respective funds of the Trust,
and the Trust and the Adviser intend that the numbered provisions contained in
the Agreement be understood as applying separately to the Fund as if contained
in, and forming, a separate agreement.
The compensation of the Adviser, determined as set forth in Article 4 of
the Agreement with respect to the Fund, will be 0.33%. For the purposes of this
fee schedule, the Advisor's fees will be calculated based upon the net assets of
the Fund, provided, however, payment to the Adviser shall not exceed payment due
from the Adviser to the Sub-Adviser in accordance with the terms of the
Sub-Advisory agreement for the Fund.
The date of this Schedule D is September 17, 2003 which shall be deemed the
date upon which the Agreement has been executed with respect to the Fund.
<Page>
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 is binding only upon the assets and property of the Trust.
This Schedule D may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
The parties listed below have executed this Schedule D as of the 17th day
of September, 2003.
IN WITNESS WHEREOF, the parties hereto have caused this Schedule to be executed
as of September 17, 2003.
SEI Tax Exempt Trust SEI Investments Management Corporation
By: /s/ Timothy D. Barto By: /s/ Lydia A. Gavalis
-------------------------------- -------------------------------
Attest: /s/ Cassandra Johnson Attest: /s/ Cassandra Johnson
---------------------------- ---------------------------
<Page>
SCHEDULE E
TO THE
INVESTMENT ADVISORY AGREEMENT
BETWEEN
SEI TAX EXEMPT TRUST
AND
SEI INVESTMENTS MANAGEMENT CORPORATION
This Schedule E forms a supplement to the Investment Advisory Agreement
(the "Agreement") dated April 16, 1996 between SEI Tax Exempt Trust (the
"Trust") and SEI Investments Management Corporation, f/k/a SEI Financial
Management Corporation (the "Adviser").
RECITALS
WHEREAS, the Trust and the Adviser entered into the Agreement, which sets
forth the rights and obligations of the parties pertaining to the management of
separate portfolios of the Trust managed by the Adviser; and
WHEREAS, the Trust approved the Adviser's management of the California Tax
Exempt Fund, Tax Free Fund, Institutional Tax Free Fund, and Pennsylvania Tax
Free Fund (collectively, the "Funds") as a "manager of managers," in accordance
with the Agreement.
AGREEMENTS
Now, therefore, the parties agree as follows:
The Trust hereby appoints the Adviser to act as investment adviser to the
Funds as provided in Section 1 of the Agreement. In making the Agreement
applicable with respect to the Funds, the Agreement is being entered into
severally and not jointly, as it pertains to the respective funds of the Trust,
and the Trust and the Adviser intend that the numbered provisions contained in
the Agreement be understood as applying separately to the Funds as if contained
in, and forming, a separate agreement.
The compensation of the Adviser, determined as set forth in Article 4 of
the Agreement with respect to the Funds, will be as follows:
<Table>
<Caption>
NET ASSET VALUE ANNUAL FEE
- --------------- ----------
Up to $500,000,000 0.05%
Next $500,000,000 0.04%
Over $1,000,000,000 0.03%
</Table>
<Page>
The fees for the Tax Free, Institutional Tax Free, Pennsylvania Tax Free and
California Tax Exempt Funds shall be calculated by aggregating the assets of the
four portfolios, applying the above fee schedule and then allocating the fee to
each of those portfolios based upon their relative net assets.
For the purposes of this fee schedule, the Advisor's fees will be calculated
based upon the net assets of the Funds, provided, however, payment to the
Adviser shall not exceed payment due from the Adviser to the Sub-Adviser in
accordance with the terms of the Sub-Advisory agreement for the Funds.
The date of this Schedule E is ____, 2004 which shall be deemed the date
upon which the Agreement has been executed with respect to the Fund.
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 is binding only upon the assets and property of the Trust.
This Schedule D may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
The parties listed below have executed this Schedule E as of the ___th day
of _____, 2004.
IN WITNESS WHEREOF, the parties hereto have caused this Schedule to be executed
as of ____________, 2004.
SEI Tax Exempt Trust SEI Investments Management Corporation
By: By:
-------------------------------- -------------------------------
Attest: Attest:
---------------------------- ---------------------------
<Page>
EXHIBIT E - INVESTMENT POLICIES CHART
<Table>
<Caption>
CURRENT FUNDAMENTAL PROPOSED NEW PROPOSED NEW NON-
FUNDS POLICY FUNDAMENTAL POLICY FUNDAMENTAL POLICY
- ------------------------------------- ----------------------------- ----------------------------- -----------------------------
DIVERSIFICATION POLICY
SIMT Large Cap Growth, SIMT Large With respect to 75% of its No Fund may purchase With respect to 75% of its
Cap Value, SIMT Tax-Managed Large assets, no Fund may: (i) securities of an issuer if assets, no Fund may: (i)
Cap, SIMT Mid-Cap, SIMT Small Cap purchase the securities of it would cause the Fund to purchase the securities of
Growth, SIMT Small Cap Value, SIMT any issuer (except fail to satisfy the any issuer (except
Tax-Managed Small Cap, SIMT Core securities issued or diversification requirement securities issued or
Fixed Income, SIMT High Yield Bond, guaranteed by the U.S. for a diversified management guaranteed by the U.S.
SIT International Equity, SIT Government, its agencies or company under the 1940 Act, Government, its agencies or
Emerging Markets Equity, STET Short instrumentalities) if, as a the rules or regulations instrumentalities) if, as a
Duration Municipal, STET result, more than 5% of its thereunder or any exemption result, more than 5% of its
Intermediate-Term Municipal, STET total assets would be therefrom, as such statute, total assets would be
Pennsylvania Municipal, SDIT invested in the securities rules or regulations may be invested in the securities
Corporate Daily Income, SDIT of such issuer; or (ii) amended or interpreted from of such issuer; or (ii)
Short-Duration Government, SDIT acquire more than 10% of the time to time. acquire more than 10% of
Intermediate-Duration Government, outstanding voting the outstanding voting
SDIT GNMA, INDEX S&P 500 Index, securities of any one issuer. securities of any one
INDEX Bond Index issuer.
SDIT Government II, STET Tax Free, No Fund may purchase No Fund may purchase No Fund may purchase
STET Institutional Tax Free, STET securities of any issuer securities of an issuer if securities of any issuer
California Tax Exempt, STET (except securities issued or it would cause the Fund to (except securities issued
Pennsylvania Tax Free guaranteed by the U.S. fail to satisfy the or guaranteed by the U.S.
Government, its agencies or diversification requirement Government, its agencies or
instrumentalities), if as a for a diversified management instrumentalities), if as a
result, more than 25% of its company under the 1940 Act, result, more than 25% of
total assets would be the rules or regulations its total assets would be
invested in the securities thereunder or any exemption invested in the securities
of such issuer. therefrom, as such statute, of such issuer.
rules or regulations may be
No Fund may acquire more amended or interpreted from No Fund may acquire more
than 10% of the voting time to time. than 10% of the voting
securities of any one issuer. securities of any one
issuer.
CONCENTRATION POLICY
SIMT Large Cap Growth, SIMT Large No Fund may purchase any No Fund may concentrate No Fund may purchase any
Cap Value, SIMT Tax-Managed Large securities which would cause investments in a particular securities which would
Cap, SIMT Mid-Cap, SIMT Small Cap more than 25% of the total industry or group of cause 25% or more of the
Growth, SIMT Small Cap Value, SIMT assets of the Fund to be industries, as concentration total assets of the Fund to
Tax-Managed Small Cap, SIMT Core invested in the securities is defined under the 1940 be invested in the
Fixed Income, SIMT High Yield Bond, of one or more issuers Act, the rules and securities of one or more
SIT conducting their principal regulations thereunder or issuers conducting their
business activities in any exemption principal business
activities in
</Table>
E-1
<Page>
<Table>
<Caption>
CURRENT FUNDAMENTAL PROPOSED NEW PROPOSED NEW NON-
FUNDS POLICY FUNDAMENTAL POLICY FUNDAMENTAL POLICY
- ------------------------------------- ----------------------------- ----------------------------- -----------------------------
International Equity, SIT Emerging the same industry, provided therefrom, as such statute, the same industry, provided
Markets Equity, SIT Emerging Markets that this limitation does rules or regulations may be that this limitation does
Debt, SIT International Fixed not apply to investments in amended or interpreted from not apply to investments in
Income, STET Tax Free, STET obligations issued or time to time. obligations issued or
Institutional Tax Free, STET guaranteed by the U.S. guaranteed by the U.S.
California Tax Exempt, STET Government, its agencies or Government, its agencies or
Intermediate-Term Municipal, STET instrumentalities. instrumentalities.
Pennsylvania Municipal Bond, STET
Pennsylvania Tax Free, STET Short
Duration Municipal, INDEX S&P 500
Index, INDEX Bond Index, STET
California Municipal Bond, STET
Massachusetts Municipal Bond, STET
New Jersey Municipal Bond, STET New
York Municipal Bond
SDIT Corporate Daily Income, SDIT No Fund may purchase any No Fund may concentrate No Fund may purchase any
Short-Duration Government, SDIT securities which would cause investments in a particular securities which would
Intermediate-Duration Government, 25% or more of the total industry or group of cause 25% or more of the
SDIT GNMA, SDIT Government II assets of the Fund to be industries, as concentration total assets of the Fund to
invested in the securities is defined under the 1940 be invested in the
of one or more issuers Act, the rules and securities of one or more
conducting their principal regulations thereunder or issuers conducting their
business activities in the any exemption therefrom, as principal business
same industry, provided that such statute, rules or activities in the same
this limitation does not regulations may be amended industry, provided that
apply to investments in (a) or interpreted from time to this limitation does not
domestic banks and (b) time. apply to investments in (a)
obligations issued or domestic banks and (b)
guaranteed by the U.S. obligations issued or
Government or its agencies guaranteed by the U.S.
and instrumentalities. Government or its agencies
and instrumentalities.
STET Tax Free, STET Institutional No Fund may invest more than No Fund may concentrate No Fund may invest more
Tax Free, STET 25% of its total assets in investments in a particular than 25% of its total
issuers industry assets in issuers within
</Table>
E-2
<Page>
<Table>
<Caption>
CURRENT FUNDAMENTAL PROPOSED NEW PROPOSED NEW NON-
FUNDS POLICY FUNDAMENTAL POLICY FUNDAMENTAL POLICY
- ------------------------------------- ----------------------------- ----------------------------- -----------------------------
Intermediate-Term Municipal, STET within the same state or or group of industries, as the same state or similar
Pennsylvania Municipal Bond similar type projects concentration is defined type projects (except in
(except in specified under the 1940 Act, the specified categories). For
categories). For the STET rules and regulations the STET Pennsylvania
Pennsylvania Municipal Bond thereunder or any exemption Municipal Bond Fund,
Fund, this limitation does therefrom, as such statute, this limitation does
not apply to the extent rules or regulations may be not apply to the extent
stated in its investment amended or interpreted from stated in its investment
objective and policies. time to time. objective and policies.
STET Massachusetts Tax Free Money No Fund may purchase any No Fund may concentrate No Fund may purchase any
Market securities which would cause investments in a particular securities which would
more than 25% of the total industry or group of cause 25% or more of the
assets of the Fund, based on industries, as concentration total assets of the Fund,
current value at the time of is defined under the 1940 based on current value at
such purchase, to be Act, the rules and the time of such purchase,
invested in the securities regulations thereunder or to be invested in the
of one or more issuers any exemption therefrom, as securities of one or more
conducting their principal such statute, rules or issuers conducting their
business activities in the regulations may be amended principal business
same industry, provided that or interpreted from time to activities in the same
this limitation does not time. industry, provided that
apply to investments in (a) this limitation does not
obligations issued or apply to investments in (a)
guaranteed by the U.S. obligations issued or
Government or its agencies guaranteed by the U.S.
and instrumentalities, or Government or its agencies
(b) obligations of state or and instrumentalities, or
municipal governments and (b) obligations of state or
their political subdivisions. municipal governments and
their political
subdivisions.
BORROWING POLICY AND POLICY REGARDING ISSUANCE OF SENIOR SECURITIES
SIMT Large Cap Growth, SIMT Large No Fund may borrow money in No Fund may borrow money or No Fund may borrow money in
Cap Value, SIMT Tax-Managed Large an amount exceeding 33 1/3% issue senior securities (as an amount exceeding 33 1/3%
Cap, SIMT Mid-Cap, SIMT Small Cap of the value of its total defined under the 1940 of the value of its total
Growth, SIMT Small Cap Value, SIMT assets, provided that, for Act), except to the extent assets, provided that, for
Tax- purposes of this limitation, permitted under the 1940 purposes of this limitation,
</Table>
E-3
<Page>
<Table>
<Caption>
CURRENT FUNDAMENTAL PROPOSED NEW PROPOSED NEW NON-
FUNDS POLICY FUNDAMENTAL POLICY FUNDAMENTAL POLICY
- ------------------------------------- ----------------------------- ----------------------------- -----------------------------
Managed Small Cap, SIMT Core investment strategies which Act, the rules and investment strategies which
Fixed Income, SIMT High Yield Bond, either obligate a Fund to regulations thereunder or either obligate a Fund to
SIT International Equity, SIT purchase securities or any exemption therefrom, as purchase securities or
Emerging Markets Equity, SIT require a Fund to segregate such statute, rules or require a Fund to segregate
Emerging Markets Debt, STET Short assets are not considered to regulations may be amended assets are not considered to
Duration Municipal, STET California be borrowings. To the extent or interpreted from time to be borrowings. To the extent
Municipal Bond, STET Massachusetts that its borrowings exceed time. that its borrowings exceed
Municipal Bond, STET New Jersey 5% of its assets: (i) all 5% of its assets: (i) all
Municipal Bond, STET New York borrowings will be repaid borrowings will be repaid
Municipal Bond before a Fund makes before a Fund makes
additional investments and additional investments and
any interest paid on such any interest paid on such
borrowings will reduce borrowings will reduce
income; and (ii) asset income; and (ii) asset
coverage of at least 300% is coverage of at least 300% is
required. required.
No Fund may issue senior
securities (as defined in
the 1940 Act) except as
permitted by rule,
regulation or order of the
SEC.
All SAAT Funds Each Fund may borrow money No Fund may borrow money or Each Fund may borrow money
in an amount up to 33 1/3% issue senior securities (as in an amount up to 33 1/3%
of the value of its total defined under the 1940 of the value of its total
assets, provided that, for Act), except to the extent assets, provided that, for
purposes of this limitation, permitted under the 1940 purposes of this limitation,
investment strategies which Act, the rules and investment strategies which
either obligate a Fund to regulations thereunder or either obligate a Fund to
purchase securities or any exemption therefrom, as purchase securities or
require a Fund to segregate such statute, rules or require a Fund to segregate
assets are not considered to regulations may be amended assets are not considered to
be borrowings. Except where or interpreted from time to be borrowings. Except where
a Fund has borrowed money time. a Fund has borrowed money
for temporary purposes in for temporary purposes in
amounts not exceeding 5% of amounts not exceeding 5% of
its assets, asset coverage its assets, asset coverage
of 300% is required for all of 300% is required for all
borrowings. borrowings.
No Fund may issue senior
securities
</Table>
E-4
<Page>
<Table>
<Caption>
CURRENT FUNDAMENTAL PROPOSED NEW PROPOSED NEW NON-
FUNDS POLICY FUNDAMENTAL POLICY FUNDAMENTAL POLICY
- ------------------------------------- ----------------------------- ----------------------------- -----------------------------
as defined in the 1940 Act)
except as permitted by rule,
regulation or order of the
SEC.
SIMT Real Estate Fund No Fund may borrow money in No Fund may borrow money or No Fund may borrow money in
an amount exceeding 33 1/3% issue senior securities (as an amount exceeding 33 1/3%
of the value of its total defined under the 1940 of the value of its total
assets, provided that, for Act), except to the extent assets, provided that, for
purposes of this limitation, permitted under the 1940 purposes of this limitation,
investment strategies that Act, the rules and investment strategies that
either obligate the Fund to regulations thereunder or either obligate the Fund to
purchase securities or any exemption therefrom, as purchase securities or
require the Fund to such statute, rules or require the Fund to
segregate assets are not regulations may be amended segregate assets are not
considered to be borrowing. or interpreted from time to considered to be borrowing.
Asset coverage of at least time. Asset coverage of at least
300% is required for all 300% is required for all
borrowing, except where the borrowing, except where the
Fund has borrowed money for Fund has borrowed money for
temporary purposes in an temporary purposes in an
amount not exceeding 5% of amount not exceeding 5% of
its total assets. its total assets.
No Fund may issue senior
securities (as defined in
the 1940 Act) except as
permitted by rule,
regulation or order of the
SEC.
SDIT Corporate Daily Income, SDIT No Fund may borrow money No Fund may borrow money or No Fund may borrow money
Short-Duration Government, SDIT except for temporary or issue senior securities (as except for temporary or
Intermediate-Duration Government, emergency purposes and then defined under the 1940 emergency purposes and then
SDIT GNMA, SDIT Government II, INDEX only in an amount not Act), except to the extent only in an amount not
S&P 500 Index, INDEX Bond Index, SIT exceeding 10% of the value permitted under the 1940 exceeding 10% of the value
International Fixed Income of the total assets of that Act, the rules and of the total assets of that
Fund. This borrowing regulations thereunder or Fund. This borrowing
provision is included solely any exemption therefrom, as provision is included solely
to facilitate the orderly such statute, rules or to facilitate the orderly
sale of portfolio securities regulations may be amended sale of portfolio securities
to accommodate or interpreted from time to to accommodate
time.
</Table>
E-5
<Page>
<Table>
<Caption>
CURRENT FUNDAMENTAL PROPOSED NEW PROPOSED NEW NON-
FUNDS POLICY FUNDAMENTAL POLICY FUNDAMENTAL POLICY
- ------------------------------------- ----------------------------- ----------------------------- -----------------------------
substantial redemption substantial redemption
requests if they should requests if they should
occur and is not for occur and is not for
investment purposes. All investment purposes. All
borrowings will be repaid borrowings will be repaid
before the Fund makes before the Fund makes
additional investments and additional investments and
any interest paid on such any interest paid on such
borrowings will reduce the borrowings will reduce the
income of that Fund. income of that Fund.
No Fund may issue senior
securities (as defined in
the 1940 Act) except in
connection with permitted
borrowings as described in
the prospectuses and its
statement of additional
information or as permitted
by rule, regulation or order
of the SEC.
STET Tax Free, STET Institutional No Fund may borrow money No Fund may borrow money or No Fund may borrow money
Tax Free, STET California Tax except for temporary or issue senior securities (as except for temporary or
Exempt, STET Intermediate-Term emergency purposes and then defined under the 1940 emergency purposes and then
Municipal, STET Pennsylvania only in an amount not Act), except to the extent only in an amount not
Municipal Bond, STET Pennsylvania exceeding 10% of the value permitted under the 1940 exceeding 10% of the value
Tax Free of total assets. The Act, the rules and of total assets. The
California Tax Exempt Fund regulations thereunder or California Tax Exempt Fund
has a fundamental policy any exemption therefrom, as has a fundamental policy
that, to the extent such such statute, rules or that, to the extent such
borrowing exceeds 5% of the regulations may be amended borrowing exceeds 5% of the
value of the Fund's total or interpreted from time to value of the Fund's total
assets, borrowing will be time. assets, borrowing will be
done from a bank and in done from a bank and in
accordance with the accordance with the
requirements of the 1940 requirements of the 1940
Act. This borrowing Act. This borrowing
provision is included solely provision is included solely
to facilitate the orderly to facilitate the orderly
sale of portfolio securities sale of portfolio securities
to accommodate heavy to accommodate heavy
redemption requests if they redemption requests if they
should occur and is should occur and is not for
</Table>
E-6
<Page>
<Table>
<Caption>
CURRENT FUNDAMENTAL PROPOSED NEW PROPOSED NEW NON-
FUNDS POLICY FUNDAMENTAL POLICY FUNDAMENTAL POLICY
- ------------------------------------- ----------------------------- ----------------------------- -----------------------------
not for investment purposes. investment purposes. All
All borrowings of the Funds, borrowings of the Funds, in
in excess of 5% of their excess of 5% of its total
total assets, will be repaid assets, will be repaid
before making additional before making additional
investments and any interest investments and any interest
paid on such borrowings will paid on such borrowings will
reduce income. reduce income.
No Fund may issue senior
securities (as defined in
the 1940 Act) except as
permitted by rule,
regulation or order of the
SEC.
STET Massachusetts Tax Free Money No Fund may borrow, except No Fund may borrow money or No Fund may borrow, except
Market that the Fund may (a) borrow issue senior securities (as that the Fund may (a) borrow
from banks for temporary or defined under the 1940 from banks for temporary or
emergency purposes, Act), except to the extent emergency purposes,
including the meeting of permitted under the 1940 including the meeting of
redemption requests which Act, the rules and redemption requests which
might otherwise require the regulations thereunder or might otherwise require the
untimely disposition of any exemption therefrom, as untimely disposition of
securities, and (b) to the such statute, rules or securities, and (b) to the
extent consistent with the regulations may be amended extent consistent with the
Fund's investment objective or interpreted from time to Fund's investment objective
and policies, enter into time. and policies, enter into
reverse repurchase reverse repurchase
agreements, forward roll agreements, forward roll
transactions and similar transactions and similar
investment techniques and investment techniques and
strategies. To the extent it strategies. To the extent it
engages in transactions engages in transactions
described in (a) and (b), described in (a) and (b),
the Fund will be limited so the Fund will be limited so
that no more than 33 1/3% of that no more than 33 1/3% of
its total assets (including its total assets (including
the amount borrowed), less the amount borrowed), less
liabilities (not including liabilities (not including
the amount borrowed) valued the amount borrowed) valued
at the time the borrowing is at the time the borrowing is
made, is derived from such made, is derived from such
transactions. transactions.
</Table>
E-7
<Page>
<Table>
<Caption>
CURRENT FUNDAMENTAL PROPOSED NEW PROPOSED NEW NON-
FUNDS POLICY FUNDAMENTAL POLICY FUNDAMENTAL POLICY
- ------------------------------------- ----------------------------- ----------------------------- -----------------------------
No Fund may issue senior
securities (as defined in
the 1940 Act) except in
connection with permitted
borrowings as described in
its statement of additional
information or as permitted
by the 1940 Act, and any
rule, regulation or order of
the SEC thereunder.
LENDING POLICY
SIMT Large Cap Growth, SIMT Large No Fund may make loans if, No Fund may make loans, No Fund may make loans if,
Cap Value, SIMT Tax-Managed Large as a result, more than 33 except to the extent as a result, more than 33
Cap, SIMT Mid-Cap, SIMT Small Cap 1/3% of its total assets permitted under the 1940 1/3% of its total assets
Growth, SIMT Small Cap Value, SIMT would be lent to other Act, the rules and would be lent to other
Tax-Managed Small Cap, SIMT Core parties, except that each regulations thereunder or parties, except that each
Fixed Income, SIMT High Yield Bond, Fund may: (i) purchase or any exemption therefrom, as Fund may: (i) purchase or
SIMT Real Estate, SIT International hold debt instruments in such statute, rules or hold debt instruments in
Equity, SIT Emerging Markets Equity, accordance with its regulations may be amended accordance with its
SIT Emerging Markets Debt, STET investment objective and or interpreted from time to investment objective and
Short Duration Municipal, STET policies; (ii) enter into time. policies; (ii) enter into
California Municipal Bond, STET repurchase agreements; and repurchase agreements; and
Massachusetts Municipal Bond, STET (iii) lend its securities. (iii) lend its securities.
New Jersey Municipal Bond, STET New
York Municipal Bond, STET
Massachusetts Tax Free Money Market
All SAAT Funds No Fund may make loans if, No Fund may make loans, No Fund may make loans if,
as a result, more than 33 except to the extent as a result, more than 33
1/3% of its total assets permitted under the 1940 1/3% of its total assets
would be loaned to other Act, the rules and would be loaned to other
parties. regulations thereunder or parties.
any exemption therefrom, as
such statute, rules or
regulations may be amended
or interpreted from time to
time.
SDIT Corporate Daily Income, SDIT No Fund may make loans, No Fund may make loans, No Fund may make loans,
Short- except except to except
</Table>
E-8
<Page>
<Table>
<Caption>
CURRENT FUNDAMENTAL PROPOSED NEW PROPOSED NEW NON-
FUNDS POLICY FUNDAMENTAL POLICY FUNDAMENTAL POLICY
- ------------------------------------- ----------------------------- ----------------------------- -----------------------------
Duration Government, SDIT that each Fund may the extent permitted that each Fund may
Intermediate-Duration Government, purchase or hold debt under the 1940 Act, purchase or hold debt
SDIT GNMA, SDIT Government II, STET instruments in accordance the rules and regulations instruments in accordance
Tax Free, STET Institutional Tax with its investment thereunder or any with its investment
Free, STET California Tax Exempt, objective and policies and exemption therefrom, as objective and policies and
STET Intermediate-Term Municipal, may enter into repurchase such statute, rules or may enter into repurchase
STET Pennsylvania Municipal Bond, agreements, provided that regulations may be amended agreements, provided that
STET Pennsylvania Tax Free repurchase agreements or interpreted from time to repurchase agreements
maturing in more than seven time. maturing in more than seven
days, restricted securities days, restricted securities
and other illiquid and other illiquid
securities are not to securities are not to
exceed, in the aggregate, exceed, in the aggregate,
10% of the Fund's net assets 10% of the Fund's net
(15% for STET assets (15% for STET
Intermediate-Term Municipal Intermediate-Term Municipal
Fund). Fund).
INDEX S&P 500 Index, INDEX Bond No Fund may make loans, No Fund may make loans, No Fund may make loans,
Index, SIT International Fixed Income except that each Fund: (i) except to the extent except that each Fund: (i)
may enter into repurchase permitted under the 1940 may enter into repurchase
agreements, provided that Act, the rules and agreements, provided that
repurchase agreements and regulations thereunder or repurchase agreements and
time deposits maturing in any exemption therefrom, as time deposits maturing in
more than seven days, and such statute, rules or more than seven days, and
other illiquid securities, regulations may be amended other illiquid securities,
including securities which or interpreted from time to including securities which
are not readily marketable time. are not readily marketable
or are restricted, are not or are restricted, are not
to exceed, in the aggregate, to exceed, in the
10% of the Fund's total aggregate, 10% of the
assets; (ii) may engage in Fund's total assets; (ii)
securities lending as may engage in securities
described in its statement lending as described in its
of additional information; statement of additional
and (iii) may purchase or information; and (iii) may
hold debt instruments in purchase or hold debt
accordance with its instruments in accordance
investment objective and with its investment
policies. objective and policies.
PLEDGING/MORTGAGING POLICY
SDIT Corporate Daily Income, SDIT No Fund may pledge, mortgage None. No Fund may pledge,
Short-Duration Government, SDIT or hypothecate assets except mortgage or hypothecate
Intermediate-Duration Government, to secure temporary assets except to secure
SDIT GNMA, SDIT borrowings permitted by temporary borrowings
permitted by
</Table>
E-9
<Page>
<Table>
<Caption>
CURRENT FUNDAMENTAL PROPOSED NEW PROPOSED NEW NON-
FUNDS POLICY FUNDAMENTAL POLICY FUNDAMENTAL POLICY
- ------------------------------------- ----------------------------- ----------------------------- -----------------------------
Government II, INDEX S&P 500 a Fund's borrowing a Fund's borrowing
Index, INDEX Bond Index, SIT policy/statement of policy/statement of
International Fixed Income, STET Tax additional information in additional information
Free, STET Institutional Tax Free, aggregate amounts not to in aggregate amounts not to
STET California Tax Exempt, STET exceed 10% of the net assets exceed 10% of the net
Intermediate-Term Municipal, STET of such Fund taken at fair assets of such Fund taken
Pennsylvania Municipal Bond, STET market value at the time of at fair market value at the
Pennsylvania Tax Free the incurrence of such loan, time of the incurrence of
and as to the INDEX S&P 500 such loan, and as to the
Index, in connection with INDEX S&P 500 Index, in
stock index futures trading connection with stock index
as provided in its statement futures trading as provided
of additional information. in its statement of
additional information.
INDEX S&P 500 Index, INDEX Bond Index No Fund may pledge, mortgage None. No Fund may pledge,
or hypothecate assets except mortgage or hypothecate
to secure temporary assets except to secure
borrowings as described in temporary borrowings as
its statement of additional described in its statement
information in aggregate of additional information
amounts not to exceed 10% of in aggregate amounts not to
the net assets of the Fund exceed 10% of the net
taken at current value at assets of the Fund taken at
the time of the incurrence current value at the time
of such loan and, as to the of the incurrence of such
INDEX S&P 500 Index Fund, in loan and, as to the INDEX S&P
connection with stock index 500 Index Fund, in connection
futures trading as provided with stock index futures
in its statement of trading as provided in its
additional information. statement of additional
information.
SHORT SALES
SDIT Corporate Daily Income, SDIT No Fund may make short sales None. No Fund may make short
Short-Duration Government, SDIT of securities, maintain a sales of securities,
Intermediate-Duration Government, short position or purchase maintain a short position
SDIT GNMA, SDIT Government II, INDEX securities on margin, except or purchase securities on
S&P 500 Index, INDEX Bond Index, SIT that the Funds may obtain margin, except that the
International Fixed Income, STET Tax short-term credits as Funds may obtain short-term
Free, STET Institutional Tax Free, necessary for the clearance credits as necessary for
STET California Tax Exempt, STET of security transactions. the clearance of security
Intermediate-Term transactions.
</Table>
E-10
<Page>
<Table>
<Caption>
CURRENT FUNDAMENTAL PROPOSED NEW PROPOSED NEW NON-
FUNDS POLICY FUNDAMENTAL POLICY FUNDAMENTAL POLICY
- ------------------------------------- ----------------------------- ----------------------------- -----------------------------
Municipal, STET Pennsylvania
Municipal Bond, STET Pennsylvania
Tax Free
REAL ESTATE/COMMODITIES
SIMT Large Cap Growth, SIMT Large No Fund may purchase or sell No Fund may purchase or No Fund may purchase or sell
Cap Value, SIMT Tax-Managed Large real estate, physical sell commodities or real real estate, physical
Cap, SIMT Mid-Cap, SIMT Small Cap commodities, or commodities estate, except to the commodities, or commodities
Growth, SIMT Small Cap Value, SIMT contracts, except that each extent permitted under the contracts, except that each
Tax-Managed Small Cap, SIMT Core Fund may purchase: (i) 1940 Act, the rules and Fund may purchase: (i)
Fixed Income, SIMT High Yield Bond, marketable securities issued regulations thereunder or marketable securities issued
SIMT Real Estate, SIT International by companies which own or any exemption therefrom, as by companies which own or
Equity, SIT Emerging Markets Equity, invest in real estate such statute, rules or invest in real estate
SIT Emerging Markets Debt, STET (including real estate regulations may be amended (including real estate
Short Duration Municipal, STET investment trusts), or interpreted from time to investment trusts),
California Municipal Bond, STET commodities, or commodities time. commodities, or commodities
Massachusetts Municipal Bond, STET contracts; and (ii) contracts; and (ii)
New Jersey Municipal Bond, STET commodities contracts commodities contracts
New York Municipal Bond, INDEX S&P relating to financial relating to financial
500 Index, INDEX Bond Fund instruments, such as instruments, such as
financial futures contracts financial futures contracts
and options on such and options on such
contracts. contracts.
All SAAT Funds No Fund may purchase or sell No Fund may purchase or No Fund may purchase or sell
real estate, physical sell commodities or real real estate, physical
commodities, or commodities estate, except to the commodities, or commodities
contracts, except that each extent permitted under the contracts, except that each
Fund may purchase 1940 Act, the rules and Fund may purchase
commodities contracts regulations thereunder or commodities contracts
relating to financial any exemption therefrom, as relating to financial
instruments, such as such statute, rules or instruments, such as
financial futures or index regulations may be amended financial futures or index
contracts and options on or interpreted from time to contracts and options on
such contracts. time. such contracts.
SDIT Corporate Daily Income, SDIT No Fund may purchase or sell No Fund may purchase or No Fund may purchase or sell
Government II, SIT International real estate, real estate sell commodities or real real estate, real estate
Fixed Income Fund limited partnership estate, except to the limited partnership
interests, commodities or extent permitted under the interests, commodities or
commodities contracts 1940 Act, the rules and commodities contracts
including futures contracts. regulations thereunder or including futures contracts.
However, subject to its any exemption therefrom, as However, subject to its
permitted investments, each such statute, rules or permitted investments, each
Fund may purchase regulations may be amended Fund may purchase obligations
obligations or
</Table>
E-11
<Page>
<Table>
<Caption>
CURRENT FUNDAMENTAL PROPOSED NEW PROPOSED NEW NON-
FUNDS POLICY FUNDAMENTAL POLICY FUNDAMENTAL POLICY
- ------------------------------------- ----------------------------- ----------------------------- -----------------------------
issued by companies which interpreted from time to issued by companies which
invest in real estate, time. invest in real estate,
commodities or commodities commodities or commodities
contracts. contracts.
STET Tax Free, STET Institutional No Fund may purchase or sell No Fund may purchase or No Fund may purchase or sell
Tax Free, STET California Tax real estate, real estate sell commodities or real real estate, real estate
Exempt, STET Intermediate-Term limited partnership estate, except to the limited partnership
Municipal, STET Pennsylvania interests, commodities or extent permitted under the interests, commodities or
Municipal Bond, STET Pennsylvania commodities contracts 1940 Act, the rules and commodities contracts
Tax Free including futures contracts. regulations thereunder or including futures contracts.
However, subject to its any exemption therefrom, as However, subject to its
permitted investments, any such statute, rules or permitted investments, any
Fund may invest in municipal regulations may be amended Fund may invest in municipal
securities or other or interpreted from time to securities or other
obligations secured by real time. obligations secured by real
estate or other interests estate or other interests
therein. therein.
SDIT Short-Duration Government, SDIT No Fund may purchase or sell No Fund may purchase or No Fund may purchase or sell
Intermediate-Duration Government, real estate, real estate sell commodities or real real estate, real estate
SDIT GNMA limited partnership estate, except to the limited partnership
interests, commodities or extent permitted under the interests, commodities or
commodities contracts 1940 Act, the rules and commodities contracts
(excluding futures regulations thereunder or (excluding futures
contracts). However, subject any exemption therefrom, as contracts). However, subject
to its permitted such statute, rules or to its permitted
investments, each Fund may regulations may be amended investments, each Fund may
purchase obligations issued or interpreted from time to purchase obligations issued
by companies which invest in time. by companies which invest in
real estate, commodities or real estate, commodities or
commodities contracts. commodities contracts.
STET Massachusetts Tax Free Money No Fund may purchase or sell No Fund may purchase or No Fund may purchase or sell
Market real estate, real estate sell commodities or real real estate, real estate
limited partnership estate, except to the limited partnership
interests, commodities or extent permitted under the interests, commodities or
commodities contracts 1940 Act, the rules and commodities contracts
including futures contracts. regulations thereunder or including futures contracts.
However, subject to its any exemption therefrom, as However, subject to its
permitted investments, the such statute, rules or permitted investments, the
Fund may: (a) invest in regulations may be amended Fund may: (a) invest in
securities of issuers or interpreted from time to securities of issuers
engaged in the real estate time. engaged in the real estate
business or the business of business or the business of
investing investing
</Table>
E-12
<Page>
<Table>
<Caption>
CURRENT FUNDAMENTAL PROPOSED NEW PROPOSED NEW NON-
FUNDS POLICY FUNDAMENTAL POLICY FUNDAMENTAL POLICY
- ------------------------------------- ----------------------------- ----------------------------- -----------------------------
in real estate (including in real estate (including
interests in limited interests in limited
partnerships owning or partnerships owning or
otherwise engaging in the otherwise engaging in the
real estate business or the real estate business or the
business of investing in business of investing in
real estate) and securities real estate) and securities
which are secured by real which are secured by real
estate or interests therein; estate or interests therein;
(b) hold or sell real estate (b) hold or sell real estate
received in connection with received in connection with
securities it holds or held; securities it holds or held;
or (c) trade in futures or (c) trade in futures
contracts and options on contracts and options on
futures contracts (including futures contracts (including
options on currencies) to options on currencies) to
the extent consistent with the extent consistent with
the Fund's investment the Fund's investment
objective and policies. objective and policies.
UNDERWRITING OF SECURITIES
All SAAT Funds, SIMT Large Cap No Fund may act as an No Fund may underwrite None.
Growth, SIMT Large Cap Value, SIMT underwriter of securities of securities issued by other
Tax-Managed Large Cap, SIMT Mid-Cap, other issuers except as it persons, except to the
SIMT Small Cap Growth, SIMT Small may be deemed an underwriter extent permitted under the
Cap Value, SIMT Tax-Managed Small in selling a portfolio 1940 Act, the rules and
Cap, SIMT Core Fixed Income, SIMT security. regulations thereunder or
High Yield Bond, SIMT Real Estate, any exemption therefrom, as
SIT International Equity, SIT such statute, rules or
Emerging Markets Equity, SIT regulations may be amended
Emerging Markets Debt, SIT or interpreted from time to
International Fixed Income, STET time.
Short Duration Municipal, SDIT
Corporate Daily Income, SDIT
Short-Duration Government, SDIT
Intermediate-Duration Government,
SDIT GNMA, SDIT Government II, INDEX
S&P 500 Index, INDEX Bond Index,
STET Tax Free, STET Institutional
Tax Free, STET California Tax
Exempt, STET Intermediate-Term
Municipal, STET
</Table>
E-13
<Page>
<Table>
<Caption>
CURRENT FUNDAMENTAL PROPOSED NEW PROPOSED NEW NON-
FUNDS POLICY FUNDAMENTAL POLICY FUNDAMENTAL POLICY
- ------------------------------------- ----------------------------- ----------------------------- -----------------------------
Pennsylvania Municipal Bond, STET
Pennsylvania Tax Free, STET California
Municipal Bond, STET Massachusetts
Municipal Bond, STET New Jersey
Municipal Bond, STET New York
Municipal Bond, STET Massachusetts
Tax Free Money Market
INVESTMENT IN OIL/GAS
All SAAT Funds, SIMT Large Cap No Fund may invest in None. No Fund may invest in
Growth, SIMT Large Cap Value, SIMT interests in oil, gas, or interests in oil, gas, or
Tax-Managed Large Cap, SIMT Mid-Cap, other mineral exploration or other mineral exploration
SIMT Small Cap Growth, SIMT Small development programs and or development programs and
Cap Value, SIMT Core Fixed Income, oil, gas or mineral leases. oil, gas or mineral leases.
SIMT High Yield Bond, SIT
International Equity, SIT Emerging
Markets Equity, SIT Emerging Markets
Debt, SIT International Fixed
Income, STET California Municipal
Bond, STET Massachusetts Municipal
Bond, STET New Jersey Municipal
Bond, STET New York Municipal Bond
SDIT Corporate Daily Income, SDIT No Fund may invest in None. No Fund may invest in
Short-Duration Government, SDIT interests in oil, gas or interests in oil, gas or
Intermediate-Duration Government, other mineral exploration or other mineral exploration
SDIT GNMA, SDIT Government II, INDEX development programs. or development programs.
S&P 500 Index, INDEX Bond Index,
STET Tax Free, STET
Intermediate-Term Municipal, STET
Pennsylvania Municipal Bond, STET
Pennsylvania Tax Free
STET Institutional Tax Free, STET No Fund may invest in None. No Fund may invest in
California Tax Exempt interests in oil, gas or interests in oil, gas or
mineral leases. mineral leases.
INVESTMENT COMPANIES
</Table>
E-14
<Page>
<Table>
<Caption>
CURRENT FUNDAMENTAL PROPOSED NEW PROPOSED NEW NON-
FUNDS POLICY FUNDAMENTAL POLICY FUNDAMENTAL POLICY
- ------------------------------------- ----------------------------- ----------------------------- -----------------------------
All SAAT Funds The SAAT Funds concentrate None. None.
their interests in
investment company interests.
SDIT Corporate Daily Income, SDIT No Fund may purchase None. No Fund may purchase
Short-Duration Government, SDIT securities of other securities of other
Intermediate-Duration Government, investment companies; investment companies;
SDIT GNMA provided that all Funds may provided that all Funds may
purchase such securities as purchase such securities as
permitted by the 1940 Act permitted by the 1940 Act
and the rules and and the rules and
regulations thereunder but, regulations thereunder but,
in any event, such Funds may in any event, such Funds
not purchase securities of may not purchase securities
other open-end investment of other open-end
companies. investment companies.
INDEX S&P 500 Index, INDEX Bond No Fund may purchase None. No Fund may purchase
Index, SIT International Fixed securities of other securities of other
Income, STET Intermediate-Term investment companies except investment companies except
Municipal, STET Pennsylvania as permitted by the 1940 Act as permitted by the 1940
Municipal Bond, Pennsylvania Tax Free and the rules and Act and the rules and
regulations thereunder and regulations thereunder and
may only purchase securities may only purchase
of money market funds. securities of money market
funds.
STET Tax Free, STET Institutional No Fund may purchase None. No Fund may purchase
Tax Free, STET California Tax Exempt securities of other securities of other
investment companies as investment companies as
permitted by the 1940 Act permitted by the 1940 Act
and the rules and and the rules and
regulations thereunder. regulations thereunder.
OWNERSHIP OF SECURITIES
SDIT Corporate Daily Income, SDIT No Fund may purchase or None. None.
Short-Duration Government, SDIT retain securities of an
Intermediate-Duration Government, issuer if, to the knowledge
SDIT GNMA, SDIT Government II, INDEX of the Trust, an officer,
S&P 500 Index, INDEX Bond Index, SIT trustee, partner or director
International Fixed Income, STET Tax of the Trust or any
Free, STET Institutional Tax Free, investment adviser of the
STET California Tax Exempt, STET Trust owns beneficially more
Intermediate-Term Municipal, STET than 1/2 of 1% of the shares
Pennsylvania Municipal or securities of such issuer
and all such officers,
trustees, partners and
</Table>
E-15
<Page>
<Table>
<Caption>
CURRENT FUNDAMENTAL PROPOSED NEW PROPOSED NEW NON-
FUNDS POLICY FUNDAMENTAL POLICY FUNDAMENTAL POLICY
- ------------------------------------- ----------------------------- ----------------------------- -----------------------------
Bond, STET Pennsylvania Tax Free directors owning more than
1/2 of 1% of such shares or
securities together own more
than 5% of such shares or
securities.
UNSEASONED ISSUERS
SDIT Corporate Daily Income, SDIT No Fund may purchase None. None.
Short-Duration Government, SDIT securities of any company
Intermediate-Duration Government, which has (with
SDIT GNMA, SDIT Government II, SIT predecessors) a record of
International Fixed Income, STET Tax less than three years
Free, STET Institutional Tax Free, continuing operations,
STET California Tax Exempt, STET except: (i) obligations
Intermediate-Term Municipal, STET issued or guaranteed by the
Pennsylvania Municipal Bond, STET U.S. Government, its
Pennsylvania Tax Free agencies or
instrumentalities; or (ii)
municipal securities which
are rated by at least two
nationally recognized
municipal bond rating
services if, as a result,
more than 5% of the total
assets (taken at fair market
value and current value for
the STET Funds) would be
invested in such securities.
INDEX S&P 500 Index, INDEX Bond Index No Fund may purchase None. None.
securities of any company
which has (with
predecessors) a record of
less than three years
continuing operations if, as
a result, more than 5% of
the total assets (taken at
current value) would be
invested in such securities.
INVESTMENT IN OPTIONS
SDIT Corporate Daily Income, SDIT No Fund may purchase None. No Fund may purchase
Short-Duration Government, SDIT warrants, puts, calls, warrants, puts, calls,
Intermediate- straddles, spreads or straddles, spreads or
</Table>
E-16
<Page>
<Table>
<Caption>
CURRENT FUNDAMENTAL PROPOSED NEW PROPOSED NEW NON-
FUNDS POLICY FUNDAMENTAL POLICY FUNDAMENTAL POLICY
- ------------------------------------- ----------------------------- ----------------------------- -----------------------------
Duration Government, SDIT GNMA, combinations thereof, combinations thereof,
SDIT Government II, INDEX S&P 500 except that the except that the
Index, INDEX Bond Index Intermediate-Duration Intermediate-Duration
Government and GNMA Funds Government and GNMA Funds
may invest in options on may invest in options on
futures contracts. futures contracts.
STET Tax Free, STET Institutional No Fund may purchase None. No Fund may purchase
Tax Free, STET California Tax warrants, puts, calls, warrants, puts, calls,
Exempt, STET Intermediate-Term straddles, spreads or straddles, spreads or
Municipal, STET Pennsylvania combinations thereof, except combinations thereof,
Municipal Bond, STET Pennsylvania as permitted by their except as permitted by
Tax Free statement of additional their statement of
information. additional information.
RESTRICTED/ILLIQUID SECURITIES
SDIT Corporate Daily Income, SDIT No Fund may purchase None. No Fund may invest more
Short-Duration Government, SDIT restricted securities than 10% of its net assets
Intermediate-Duration Government, (securities which must be in illiquid securities.
SDIT GNMA, SDIT Government II, INDEX registered under the
S&P 500 Index, INDEX Bond Index, SIT Securities Act of 1933
International Fixed Income before they may be offered
or sold to the public) or
other illiquid securities
except as described in the
prospectuses and statement
of additional information.
POLICY REGARDING CONTROL OF ISSUER
SDIT Corporate Daily Income, SDIT No Fund may invest in None. No Fund may invest in
Short-Duration Government, SDIT companies for the purpose of companies for the purpose
Intermediate-Duration Government, exercising control. of exercising control.
SDIT GNMA, SDIT Government II, INDEX
S&P 500 Index, INDEX Bond Index, SIT
International Fixed Income, STET Tax
Free, STET Institutional Tax Free,
STET California Tax Exempt, STET
Intermediate-Term Municipal, STET
Pennsylvania Municipal Bond, STET
Pennsylvania Tax Free
OTHER POLICIES
</Table>
E-17
<Page>
<Table>
<Caption>
CURRENT FUNDAMENTAL PROPOSED NEW PROPOSED NEW NON-
FUNDS POLICY FUNDAMENTAL POLICY FUNDAMENTAL POLICY
- ------------------------------------- ----------------------------- ----------------------------- -----------------------------
SIMT Large Cap Value, SIMT Large Cap The Funds' investment None. None.
Growth, SIMT Tax-Managed Large Cap, limitations in their
SIMT Small Cap Value, SIMT Small Cap respective prospectuses are
Growth, SIMT Tax-Managed Small Cap, fundamental.
SIMT Mid-Cap, SIMT Core Fixed
Income, SIMT High Yield Bond, STET
Tax Free, STET Institutional Tax
Free, STET California Tax Exempt,
STET Intermediate-Term Municipal,
STET Pennsylvania Municipal Bond,
STET Pennsylvania Tax Free
STET Intermediate-Term Municipal, Each Fund must abide by its None. No Fund or each Fund must
STET Pennsylvania Municipal Bond maturity restrictions and abide by its maturity
invest solely in the restrictions and invest
permitted investments in its solely in the permitted
statement of additional investments in its
information and prospectuses. statement of additional
information and
prospectuses.
SLAT Prime Obligation The Fund may only purchase None. None.
securities with a remaining
maturity of 365 days or less. (The Fund will be managed
in accordance with Rule
2a-7 under the 1940 Act,
which currently restricts a
money market fund from
acquiring any instrument
with a remaining maturity
of greater than 397
calendar days).
STET California Municipal Bond The Fund must be fully At least 80% of its net None.
invested in obligations assets is invested in
which produce interest that obligations which produce
is exempt from both Federal interest that is exempt from
and California state income both Federal and California
taxes. state income taxes.
STET Massachusetts Municipal Bond The Fund must be fully At least 80% of its net None.
invested in obligations assets is invested in
which produce interest obligations which
</Table>
E-18
<Page>
<Table>
<Caption>
CURRENT FUNDAMENTAL PROPOSED NEW PROPOSED NEW NON-
FUNDS POLICY FUNDAMENTAL POLICY FUNDAMENTAL POLICY
- ------------------------------------- ----------------------------- ----------------------------- -----------------------------
that is exempt from both produce interest that is
Federal and Massachusetts exempt from both Federal and
state income taxes. Massachusetts state income
taxes.
STET New Jersey Municipal Bond The Fund must be fully At least 80% of its net None.
invested in obligations assets is invested in
which produce interest that obligations which produce
is exempt from both Federal interest that is exempt from
and New Jersey state income both Federal and New Jersey
taxes. state income taxes.
STET New York Municipal Bond The Fund must be fully At least 80% of its net None.
invested in obligations assets is invested in
which produce interest that obligations which produce
is exempt from both Federal interest that is exempt from
and New York state and city both Federal and New York
income taxes. state and city income taxes.
STET Pennsylvania Municipal Bond Fund The Fund must be fully At least 80% of its net None.
invested in obligations assets is invested in
which produce interest that obligations which produce
is exempt from both Federal interest that is exempt from
and Pennsylvania state both Federal and
income taxes. Pennsylvania state income
taxes.
SDIT GNMA The Fund may not invest less None. The Fund has adopted a
than 65% of its assets in policy to invest at least
GNMA securities. 80% of its assets in the
type of securities that it
is required to by Rule
35d-1.
</Table>
E-19
<Page>
PROXY TABULATOR
P.O. BOX 9132
HINGHAM, MA 02043-9132 TO VOTE BY TELEPHONE
1) Read the Proxy Statement and have the Proxy
card on reverse at hand.
2) Call 1-800-690-6903.
3) Follow the recorded instructions.
TO VOTE BY INTERNET
1) Read the Proxy Statement and have the Proxy
card below at hand.
2) Go to www.proxyweb.com
3) Follow the on-line instructions.
TO VOTE BY MAIL
1) Read the Proxy Statement.
2) Check the appropriate boxes on the reverse
side.
3) Sign, date and return the Proxy card in the
envelope provided.
IF YOU VOTE BY TELEPHONE OR INTERNET, PLEASE DO
NOT RETURN YOUR PROXY CARD.
[SHAREHOLDER ADDRESS] SHARES XXX
CONTROL NUMBER XXX
ACCOUNT NUMBER XXX
999 999 999 999 99
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
FUND NAME PRINTS HERE TO BE HELD ON OCTOBER 27, 2004
Notice is hereby given that a special meeting of shareholders (the "Meeting") of
SEI Liquid Asset Trust, SEI Tax Exempt Trust, SEI Daily Income Trust, SEI Index
Funds, SEI Institutional Managed Trust, SEI Institutional International Trust
and SEI Asset Allocation Trust (collectively, the "Trusts") and each of their
portfolios (the "Funds") will be held at the offices of SEI Investments
Management Corporation ("SIMC"), One Freedom Valley Drive, Oaks, Pennsylvania
19456, on October 27, 2004, at [MEETING TIME] (Eastern time).
The purpose of the Meeting is to consider the Proposals set forth on reverse and
to transact such other business as may be properly brought before the Meeting or
any adjournments(s) thereof. The specifics of these Proposals, which are more
fully described in the attached Proxy Statement, are shown on the reverse side
of the card.
Date:_________________________, 2004
<Page>
-----------------------------------
| |
| |
-----------------------------------
Signature(s) (SIGN IN THE BOX)
Please date and sign exactly as the
name or names appear on this card.
When signing as attorney, trustee,
executor, administrator, custodian,
guardian or corporate officer,
please give full title. If shares
are held jointly, each shareholder
should sign.
Please fill out box(es) as shown using black or blue ink or number 2 pencil.
PLEASE DO NOT USE FINE POINT PENS.
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS A VOTE "FOR" THE PROPOSALS.
<Table>
Proposal 1. To elect Trustees for all Funds FOR WITHHOLD
nominees authority
listed (except as to vote for
marked to the all nominees
contrary at left)
(01) Rosemarie B. Greco
(02) Nina Lesavoy
(03) James M. Williams
--------------------------------------------------------------------------------------------------------------------------
To withhold authority to vote for one or more of the nominees, write the number(s) of the nominee(s) above.
</Table>
TO IMPLEMENT THE "MANAGER OF MANAGERS" STRUCTURE WITH SIMC
SERVING AS EACH FUND'S "MANAGER OF MANAGERS," SHAREHOLDERS
MUST APPROVE PROPOSALS 2 AND 3. NEITHER PROPOSAL WILL BE
IMPLEMENTED WITH RESPECT TO A FUND, IF SHAREHOLDERS OF THAT
FUND DO NOT APPROVE BOTH PROPOSALS.
<Table>
FOR AGAINST ABSTAIN
PROPOSAL 2. To approve a "manager of managers" structure for: the Bond
Index Fund of SEI Index Funds; the Short-Duration
Government, Intermediate-Duration Government, GNMA, and
Corporate Daily Income Funds of SEI Daily Income Trust;
and the California Tax Exempt, Tax Free, Institutional Tax
Free, and Pennsylvania Tax Free Funds of SEI Tax Exempt
Trust.
PROPOSAL 3. To approve SIMC as investment advisor for: the Bond Index
Fund of SEI Index Funds; the Short-Duration Government,
Intermediate-Duration Government, GNMA, and Corporate
Daily Income Funds of SEI Daily Income Trust; and the
California Tax Exempt, Tax Free, Institutional Tax Free,
and Pennsylvania Tax Free Funds of SEI Tax Exempt Trust;
and to approve an investment advisory agreement with SIMC
and these Funds.
<Page>
PROPOSAL 4 IS SEPARATED INTO SEPARATE ITEMS. YOU MAY VOTE
FOR PROPOSAL 4 AS A GROUP OR BY EACH ITEM. IF YOU VOTE ON
PROPOSAL 4 AS A GROUP, A FUND WILL RECORD YOUR VOTES AS
HAVING BEEN CAST "FOR" OR "AGAINST" EACH APPLICABLE ITEM
WITHIN PROPOSAL 4 IN ACCORDANCE WITH YOUR VOTE.
ALTERNATIVELY, YOU MAY VOTE SEPARATELY "FOR" OR "AGAINST"
EACH ITEM OF PROPOSAL 4. IF THIS PROXY CARD INCLUDES A VOTE
ON PROPOSAL 4 AS A GROUP AND SEPARATE VOTES ON SPECIFIC
ITEMS, YOUR VOTE ON THE ENTIRE PROPOSAL AS A GROUP WILL
CONTROL AND WILL BE RECORDED AS YOUR INTENDED VOTE.
PROPOSAL 4. To approve eliminating, amending or reclassifying certain
fundamental policies and restrictions.
STOP HERE IF YOU VOTED ON PROPOSAL 4 AS A GROUP. IF YOU
HAVE NOT VOTED ON PROPOSAL 4 AS A GROUP AND WOULD LIKE TO
VOTE ON EACH ITEM SEPARATELY, PLEASE CHECK THE APPROPRIATE
BOXES BELOW.
4(a) Fundamental Policy Regarding Diversification
4(b) Fundamental Policy Regarding Concentration
4(c) Fundamental Policy Regarding Borrowing and Senior
Securities
4(d) Fundamental Policy Regarding Lending
4(e) Fundamental Policy Regarding Pledging and Mortgaging of
Fund Assets
4(f) Fundamental Policy Regarding Control of Issuer
4(g) Fundamental Policy Regarding Purchase of Real Estate
and Commodities
4(h) Fundamental Policy Regarding Short Sales
4(i) Fundamental Policy Regarding Underwriting of Securities
4(j) Fundamental Policy Regarding Investment in Securities
of Other Investment Companies
4(k) Fundamental Policy Regarding Investing in Issuers when
Securities are Owned by Officers and Trustees
4(l) Fundamental Policy Regarding "Unseasoned Issuers"
4(m) Fundamental Policy Regarding Investments in Options
4(n) Fundamental Policy Regarding Oil and Gas
<Page>
4(o) Fundamental Policy Regarding Investments in Illiquid
and Restricted Securities
4(p) Fundamental Policy making all Investment Limitations in
Prospectus Fundamental
4(q) Fundamental Policy Requiring that at Least 65% of the
Fund's Assets be Invested in Particular Types of Securities
4(r) Fundamental Policy Requiring the Municipal Funds to be
Fully Invested in Obligations which Produce Interest that is
Exempt from Both Federal and State Income Taxes
4(s) Fundamental Policy that the Funds Must Abide by their
Maturity Restrictions and Invest Solely in Investments
Permitted by their Prospectus and Statement of Additional
Information
4(t) Fundamental Policy that the Fund may only Purchase
Securities with a Remaining Maturity of 365 Days or Less
</Table>
PLEASE DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.