1933 Act Registration No. 333-7463.
1940 Act Registration No. 811-7687.
As filed with the Securities and Exchange Commission on March 26, 1997
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [x]
Pre-Effective Amendment No. ___ [ ]
Post-Effective Amendment No. _2_ [x]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 [x]
Amendment No. _2_
FIRST AMERICAN STRATEGY FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
OAKS, PENNSYLVANIA 19456
(Address of Principal Executive Offices) (Zip Code)
(610) 254-1000
(Registrant's Telephone Number, including Area Code)
DAVID G. LEE
C/O SEI INVESTMENTS COMPANY, OAKS, PENNSYLVANIA 19456
(Name and Address of Agent for Service)
COPIES TO:
Kathryn Stanton, Esq. Michael J. Radmer, Esq.
SEI Investments Company James D. Alt, Esq.
Oaks, Pennsylvania 19456 Dorsey & Whitney LLP
220 South Sixth Street
Minneapolis, Minnesota 55402
[x] immediately upon filing pursuant to paragraph (b) of rule 485
[ ] on (date) pursuant to paragraph (b) of rule 485
[ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485
[ ] on (date) pursuant to paragraph (a)(1) of Rule 485
[ ] 75 days after filing pursuant to paragraph (a)(2) of Rule 485
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485
FIRST AMERICAN STRATEGY FUNDS, INC.
POST-EFFECTIVE AMENDMENT NO. 2
CROSS REFERENCE SHEET FOR ITEMS REQUIRED BY FORM N-1A
NOTE: This post-effective amendment is filed for the purpose of
complying with the Registrant's undertaking to file a post-effective amendment,
using financial statements which need not be certified, within four to six
months from the date it commences operations.
PART A of this amendment to the Registration Statement consists of the
following documents:
(1) Prospectus dated October 31, 1996, as supplemented January 31,
1997 (incorporated by reference to such Prospectus as supplemented
as filed pursuant to Rule 497).
(2) Supplement dated March 26, 1997, to the Prospectus referred to
above, setting forth Financial Highlights for the period ended
February 28, 1997 (included herein).
PART B of this amendment to the Registration Statement consists of the
following:
(1) Statement of Additional Information dated October 31, 1996, as
supplemented January 31, 1997 (incorporated by reference to such
Statement of Additional Information as supplemented as filed
pursuant to Rule 497).
(2) Supplement dated March 26, 1997, to the Statement of Additional
Information, setting forth financial statements for the period
ended February 28, 1997 (included herein).
ITEM NUMBER OF FORM N-1A
PART A CAPTION IN PROSPECTUS OR PROSPECTUS SUPPLEMENT
- ------ ----------------------------------------------
1 Cover Page
2 Summary; Fees and Expenses
3 Not Applicable
4 The Funds; Investment Objectives and Policies; The Underlying
Funds; Special Investment Methods
5 Management; Distributor
5A Not Applicable
6 Fund Shares; Investing in the Funds; Federal Income Taxes
7 Distributor; Investing in the Funds; Determining the Price of
Shares
8 Redeeming Shares
9 Not Applicable
CAPTION IN STATEMENT
PART B OF ADDITIONAL INFORMATION
- ------ -------------------------
10 Cover Page
11 Table of Contents
12 General Information
13 Additional Information Concerning Investments by the Funds and
the Underlying Funds; Investment Restrictions; Investment
Restrictions of the Funds; Investment Restrictions of the
Underlying Funds
14 Directors and Executive Officers
15 Capital Stock
16 Investment Advisory and Other Services for the Funds; Investment
Advisory Services for the Underlying Funds
17 Portfolio Transactions and Allocation of Brokerage
18 Not Applicable
19 Net Asset Value and Public Offering Price
20 Taxation
21 Investment Advisory and Other Services
22 Fund Performance
23 Financial Statements
FIRST AMERICAN STRATEGY FUNDS, INC.
SUPPLEMENT DATED MARCH 26, 1997
TO
PROSPECTUS DATED OCTOBER 31, 1996, AS SUPPLEMENTED JANUARY 31, 1997
The unaudited Financial Highlights for Income Fund, Growth and Income
Fund, Growth Fund, and Aggressive Growth Fund for the period ended February 28,
1997, are set forth below.
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
For the period ended February 28, 1997
For a share outstanding throughout the period.
REALIZED AND DIVIDENDS
NET ASSET NET UNREALIZED FROM NET NET ASSET
VALUE BEGINNING INVESTMENT GAINS INVESTMENT VALUE END TOTAL
OF PERIOD INCOME ON INVESTMENTS INCOME OF PERIOD RETURN
<S> <C> <C> <C> <C> <C> <C>
Income Fund (1) $ 10.00 $ 0.15 $ 0.26 $ (0.15) $ 10.26 4.11% +
Growth and Income Fund (1) $ 10.00 $ 0.10 $ 0.49 $ (0.10) $ 10.49 5.88% +
Growth Fund (1) $ 10.00 $ 0.08 $ 0.45 $ (0.08) $ 10.45 5.32% +
Aggressive Growth Fund (1) $ 10.00 $ 0.06 $ 0.49 $ (0.06) $ 10.49 5.55% +
</TABLE>
<TABLE>
<CAPTION>
[WIDE TABLE CONTINUED FROM ABOVE]
RATIO OF NET RATIO OF
RATIO OF INVESTMENT EXPENSES TO
NET ASSETS EXPENSES TO INCOME TO AVERAGE
END OF AVERAGE AVERAGE NET ASSETS PORTFOLIO
PERIOD (000) NET ASSETS NET ASSETS (EXCLUDING WAIVERS) TURNOVER
<S> <C> <C> <C> <C> <C>
Income Fund (1) $10,315 0.60% 4.52% 3.45% 2%
Growth and Income Fund (1) $ 8,016 0.60% 2.80% 4.01% 23%
Growth Fund (1) $ 3,694 0.60% 2.15% 6.00% 8%
Aggressive Growth Fund (1) $ 3,519 0.60% 0.86% 6.19% 8%
</TABLE>
+ Returns are for the period indicated and have not been annualized
(1) Commenced operations on October 1, 1996. All ratios for the period have
been annualized.
PART B
FIRST AMERICAN STRATEGY FUNDS, INC.
SUPPLEMENT DATED MARCH 26, 1997
TO
STATEMENT OF ADDITIONAL INFORMATION DATED OCTOBER 31, 1996,
AS SUPPLEMENTED JANUARY 31, 1997
This Supplement to the Statement of Additional Information dated
October 31, 1996, as supplemented January 31, 1997, is provided for the purpose
of complying with the Registrant's undertaking to file a post-effective
amendment, using financial statements which need not be certified, within four
to six months from the date the Registrant commences operations.
The Statement of Additional Information, as previously supplemented and
as supplemented by this Supplement, is not a prospectus. The Statement of
Additional Information, as so supplemented, should be read in conjunction with
the Registrant's Prospectus dated October 31, 1996, as supplemented January 31,
1997. Copies of the Prospectuses may be obtained by writing or calling the
Funds' administrator SEI Financial Services Company, Oaks, Pennsylvania 19456,
telephone: 1-888-99STRAT.
FINANCIAL STATEMENTS
The unaudited financial statements of Income Fund, Growth and Income
Fund, Growth Fund, and Aggressive Growth Fund for the period ended February 28,
1997 are attached to this Supplement.
STATEMENT OF NET ASSETS- FEBRUARY 28, 1997
- ------------------------------------------
INCOME FUND
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- ------------------------------------------------------------------------------------
<S> <C> <C>
EQUITY FUNDS- 29.4%
First American Investment Funds, Inc.
Equity Income Fund 185,257 2,527
Real Estate Securities Fund 38,314 511
--------
TOTAL EQUITY FUNDS
Cost ($2,952) 3,038
--------
FIXED INCOME FUND- 64.1%
First American Investment Funds, Inc.
Fixed Income Fund 614,378 6,611
--------
TOTAL FIXED INCOME FUND
Cost ($6,677) 6,611
--------
MONEY MARKET FUND- 5.6%
First American Funds, Inc.
Prime Obligations Fund 578,454 578
--------
TOTAL MONEY MARKET FUND
Cost ($578) 578
--------
TOTAL INVESTMENTS- 99.1%
Cost ($10,207) 10,227
--------
OTHER ASSETS AND LIABILITIES, NET- 0.9% 88
--------
NET ASSETS:
Porfolio shares- ($.01 par value- 20 billion authorized)
based on 1,005,420 outstanding shares $ 10,278
Accumulated net realized gain on investments 17
Net unrealized appreciation of investments 20
--------
TOTAL NET ASSETS- 100.0% $ 10,315
========
NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION
PRICE PER SHARE $ 10.26
========
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS- FEBRUARY 28, 1997
- ------------------------------------------
GROWTH AND INCOME FUND
- ----------------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- ----------------------------------------------------------------------------------------
<S> <C> <C>
EQUITY FUNDS- 51.5%
First American Investment Funds, Inc.
Diversified Growth Fund 80,795 $ 1,186
Emerging Growth Fund 37,988 525
International Fund 35,012 380
Real Estate Securities Fund 22,945 306
Regional Equity Fund 30,023 526
Stock Fund 50,974 1,203
---------
TOTAL EQUITY FUNDS
Cost ($4,121) 4,126
---------
FIXED INCOME FUND- 38.0%
First American Investment Funds, Inc.
Fixed Income Fund 283,819 3,054
---------
TOTAL FIXED INCOME FUND
Cost ($ 3,084) 3,054
---------
MONEY MARKET FUND- 6.5%
First American Funds, Inc.
Prime Obligations Fund 518,281 518
---------
TOTAL MONEY MARKET FUND
Cost ($518) 518
---------
TOTAL INVESTMENTS- 96.0%
Cost ($7,723) 7,698
---------
OTHER ASSETS AND LIABILITIES, NET- 4.0% 318
---------
NET ASSETS:
Porfolio shares- ($.01 par value- 20 billion authorized)
based on 764,363 outstanding shares $ 7,968
Accumulated net realized gain on investments 73
Net unrealized depreciation of investments (25)
---------
TOTAL NET ASSETS- 100.0% $ 8,016
=========
NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION
PRICE PER SHARE $ 10.49
=========
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS- FEBRUARY 28, 1997
- ------------------------------------------
GROWTH FUND
- ----------------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- ----------------------------------------------------------------------------------------
<S> <C> <C>
EQUITY FUNDS- 68.7%
First American Investment Funds, Inc.
Diversified Growth Fund 36,505 $ 536
Emerging Growth Fund 26,168 361
International Fund 33,801 367
Regional Equity Fund 20,688 362
Special Equity Fund 18,188 367
Stock Fund 23,041 544
---------
TOTAL EQUITY FUNDS
Cost ($2,534) 2,537
---------
FIXED INCOME FUND- 24.9%
First American Investment Funds, Inc.
Fixed Income Fund 85,560 921
---------
TOTAL FIXED INCOME FUND
Cost ($ 930) 921
---------
MONEY MARKET FUND- 5.7%
First American Funds, Inc.
Prime Obligations Fund 209,545 210
---------
TOTAL MONEY MARKET FUND
Cost ($210) 210
---------
TOTAL INVESTMENTS- 99.3%
Cost ($3,674) 3,668
---------
OTHER ASSETS AND LIABILITIES, NET- 0.7% 26
---------
NET ASSETS:
Porfolio shares- ($.01 par value- 20 billion authorized)
based on 353,660 outstanding shares $ 3,644
Accumulated net realized gain on investments 56
Net unrealized depreciation of investments (6)
---------
TOTAL NET ASSETS- 100.0% $ 3,694
---------
NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION
PRICE PER SHARE $ 10.45
---------
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS- FEBRUARY 28, 1997
- ------------------------------------------
AGGRESSIVE GROWTH FUND
- -----------------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -----------------------------------------------------------------------------------------
<S> <C> <C>
EQUITY FUNDS- 73.2%
First American Investment Funds, Inc.
Diversified Growth Fund 22,389 $ 328
Emerging Growth Fund 28,450 393
Health Sciences Fund 11,500 120
International Fund 42,393 460
Regional Equity Fund 22,491 394
Special Equity Fund 19,768 399
Stock Fund 15,416 364
Technology Fund 7,338 119
---------
TOTAL EQUITY FUNDS
Cost ($2,575) 2,577
---------
FIXED INCOME FUND- 8.8%
First American Investment Funds, Inc.
Fixed Income Fund 28,651 308
---------
TOTAL FIXED INCOME FUND
Cost ($ 311) 308
---------
MONEY MARKET FUND- 15.5%
First American Funds, Inc.
Prime Obligations Fund 546,545 547
---------
TOTAL MONEY MARKET FUND
Cost ($547) 547
---------
TOTAL INVESTMENTS- 97.5%
Cost ($3,433) 3,432
---------
OTHER ASSETS AND LIABILITIES, NET- 2.5% 87
---------
NET ASSETS:
Portfolio shares- ($.01 par value- 20 billion authorized)
based on 335,547 outstanding shares $ 3,450
Accumulated net realized gain on investments 70
Net unrealized depreciation of investments (1)
---------
TOTAL NET ASSETS- 100.0% $ 3,519
---------
NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION
PRICE PER SHARE $ 10.49
---------
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS (000)
- ------------------------------
For the period ended February 28, 1997
Growth and Aggressive
Income Income Growth Growth
Fund (1) Fund (1) Fund (1) Fund (1)
-----------------------------------------------
INVESTMENT INCOME:
<S> <C> <C> <C> <C>
Interest $ 6 $ 5 $ 2 $ 2
Dividends 80 40 18 12
----- ----- ----- -----
Total investment income 86 45 20 14
----- ----- ----- -----
EXPENSES:
Investment advisory fees 4 3 2 2
Waiver of investment advisory fees (4) (3) (2) (2)
Reimbursement of expenses by adviser (44) (42) (38) (37)
Administrator fees 20 20 20 20
Transfer agent fees 6 6 5 5
Amortization of organizational costs 1 1 1 1
Custodian fees 1 -- -- --
Directors' fees -- -- -- --
Registration fees 10 10 9 9
Professional fees 7 6 3 3
Printing 4 3 2 1
Shareholder servicing fee 4 3 2 2
Other 1 1 -- --
----- ----- ----- -----
TOTAL EXPENSES AFTER WAIVERS AND REIMBURSEMENTS 10 8 4 4
----- ----- ----- -----
Investment income- net 76 37 16 10
----- ----- ----- -----
REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS- NET:
Net realized gain on investments 17 73 56 70
Net change in unrealized appreciation (depreciation)
of investments 20 (25) (6) (1)
----- ----- ----- -----
NET GAIN ON INVESTMENTS 37 48 50 69
----- ----- ----- -----
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 113 $ 85 $ 66 $ 79
===== ===== ===== =====
(1) Commenced operations on October 1, 1996.
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS (000)
Growth and Aggressive
Income Income Growth Growth
Fund Fund Fund Fund
-------- -------- -------- --------
10/1/96 to 10/1/96 to 10/1/96 to 10/1/96 to
2/28/1997 (1) 2/28/1997 (1) 2/28/1997 (1) 2/28/1997 (1)
-------- -------- -------- --------
<S> <C> <C> <C> <C>
OPERATIONS:
Investment income - net $ 76 $ 37 $ 16 $ 10
Net realized gain on investments 17 73 56 70
Net change in unrealized depreciation of investments 20 (25) (6) (1)
-------- -------- -------- --------
Net increase in net assets resulting from operations 113 85 66 79
-------- -------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment Income - net: (76) (37) (16) (10)
-------- -------- -------- --------
Total Distributions (76) (37) (16) (10)
-------- -------- -------- --------
CAPITAL SHARE TRANSACTIONS:
Proceeds from sales 11,035 9,573 4,110 3,787
Reinvestment of distributions 69 33 15 9
Payments for redemptions (826) (1,638) (481) (346)
-------- -------- -------- --------
Increase in net assets from capital share transactions 10,278 7,968 3,644 3,450
-------- -------- -------- --------
Total increase in net assets 10,315 8,016 3,694 3,519
-------- -------- -------- --------
NET ASSETS AT BEGINNING OF PERIOD -- -- -- --
-------- -------- -------- --------
NET ASSETS AT END OF PERIOD $ 10,315 $ 8,016 $ 3,694 $ 3,519
-------- -------- -------- --------
Capital share transactions:
Proceeds from sales 1,079 920 399 369
Reinvestment of distributions 7 3 1 1
Payments for redemptions (81) (159) (46) (34)
-------- -------- -------- --------
NET INCREASE IN CAPITAL SHARES 1,005 764 354 336
-------- -------- -------- --------
(1) Commenced operations on October 1, 1996.
</TABLE>
FINANCIAL HIGHLIGHTS
For the period ended February 28, 1997
For a share outstanding throughout the period.
<TABLE>
<CAPTION>
REALIZED AND DIVIDENDS
NET ASSET NET UNREALIZED FROM NET NET ASSET
VALUE BEGINNING INVESTMENT GAINS INVESTMENT VALUE END TOTAL
OF PERIOD INCOME ON INVESTMENTS INCOME OF PERIOD RETURN
<S> <C> <C> <C> <C> <C> <C>
Income Fund (1) $ 10.00 $ 0.15 $ 0.26 $ (0.15) $ 10.26 4.11% +
Growth and Income Fund (1) $ 10.00 $ 0.10 $ 0.49 $ (0.10) $ 10.49 5.88% +
Growth Fund (1) $ 10.00 $ 0.08 $ 0.45 $ (0.08) $ 10.45 5.32% +
Aggressive Growth Fund (1) $ 10.00 $ 0.06 $ 0.49 $ (0.06) $ 10.49 5.55% +
</TABLE>
<TABLE>
<CAPTION>
[WIDE TABLE CONTINUED FROM ABOVE]
RATIO OF NET RATIO OF
RATIO OF INVESTMENT EXPENSES TO
NET ASSETS EXPENSES TO INCOME TO AVERAGE
END OF AVERAGE AVERAGE NET ASSETS PORTFOLIO
PERIOD (000) NET ASSETS NET ASSETS (EXCLUDING WAIVERS) TURNOVER
<S> <C> <C> <C> <C> <C>
Income Fund (1) $10,315 0.60% 4.52% 3.45% 2%
Growth and Income Fund (1) $ 8,016 0.60% 2.80% 4.01% 23%
Growth Fund (1) $ 3,694 0.60% 2.15% 6.00% 8%
Aggressive Growth Fund (1) $ 3,519 0.60% 0.86% 6.19% 8%
</TABLE>
+ Returns are for the period indicated and have not been annualized
(1) Commenced operations on October 1, 1996. All ratios for the period have
been annualized.
First American Strategy Funds, Inc.
Notes to Financial Statements
February 28, 1997
1. Organization:
The Income Fund, Growth and Income Fund, Growth Fund, and Aggressive Growth Fund
are funds offered by the First American Strategy Funds, Inc. (FASF). FASF (the
"Funds") is a corporation organized under Minnesota law which is registered
under the Investment Company Act of 1940, as amended, as open end, management
investment companies. FASF's articles of incorporation permit the Board of
Directors to create additional funds and classes in the future. The Funds'
prospectus provides a description of each Fund's investment objectives,
policies, and strategies.
2. Significant Accounting Policies:
SECURITY VALUATION: Investments are valued at the respective net asset value of
each underlying First American Investment Fund determined at the close of the
New York Stock Exchange (generally 3:00pm central time) on the valuation date.
FEDERAL INCOME TAXES: It is each Fund's intention to qualify as a regulated
investment company for Federal income tax purposes and to distribute all of its
taxable income. Accordingly, no provisions for Federal income taxes is required.
For Federal income tax purposes, required distributions related to realized
gains from security transactions are computed as of October 31st.
SECURITY TRANSACTIONS AND RELATED INCOME: Security transactions are recorded on
the trade date of the security purchase or sale. Dividend income is recorded on
the ex-dividend date. Interest income is recorded on the accrual basis. Security
gains and losses are determined on the basis of identified cost, which is the
same basis used for Federal income tax purposes.
EXPENSES: Expenses that are directly related to one of the Funds are charged
directly to that fund. Other operating expenses of the fund are prorated to the
Funds on the basis of relative net asset value.
3. Fees and Expenses:
Pursuant to an investment advisory agreement (the Agreement), First Bank
National Association (the Adviser) manages each Fund's assets and furnishes
related office facilities, equipment, research and personnel. The Agreement
requires each Fund to pay the Adviser a monthly fee based upon average daily net
assets. The fee for each of the Funds is equal to an annual rate of 0.25% of the
average daily net assets. The adviser intends to waive their entire fee for the
current fiscal year. Such waivers are voluntary and may be discontinued at any
time.
Through a separate contractual agreement, First Trust National Association, an
affiliate of the Adviser, serves as the Fund's custodian.
SEI Financial Services Company (SFS) and SEI Financial Management Corporation
(SFM) serve as distributor and administrator of the Funds, respectively. FASF
has adopted and entered into a shareholder service plan and agreement with SFS.
Each Fund pays to SFS a shareholder servicing fee at an annual rate of 0.25% of
the average daily net asset value of all shares of each Fund, which is computed
daily and paid monthly. SFM provides administrative services, including certain
accounting, legal, and shareholder services, at an annual rate of 0.12% of each
Fund's average daily net assets, with a minimum annual fee of $50,000 per Fund.
To the extent that the aggregate net assets of all the First American Funds
exceed $8 billion, the percentage stated above is reduced to 0.105%.
In addition to the investment advisory and management fees, custodian fees,
distribution fees, administrator and transfer agent fees, each fund is
responsible for paying most other operating expenses including organization
costs, fees and expenses of outside directors, registration fees, printing
shareholder reports, legal, auditing, insurance and other miscellaneous
expenses.
For the period ended February 28, 1997, legal fees and expenses were paid to a
law firm of which the Secretary of the Funds is a partner.
DST Systems, Inc. provides transfer agent services for the Funds.
4. Investment Security Transactions
During the period ended February 28,1997, purchases of securities and proceeds
from sales of securities, other than temporary investments in short-term
securities were as follows (000):
US Government Other Investment
Securities Securities
---------- ----------
Purchases Sales Purchases Sales
--------- ----- --------- -----
Income Fund $-- $-- $9,697 $ 75
Growth and Income Fund -- -- 8,045 861
Growth Fund -- -- 3,616 153
Aggressive Growth Fund -- -- 3,025 1,785
At February 28, 1997 the total cost of securities for Federal income tax
purposes, was not materially different from amounts reported for financial
reporting purposes. The aggregate gross unrealized appreciation and depreciation
for securities held by the Funds at February 28, 1997 is as follows (000):
Aggregate Aggregate
Gross Gross
Appreciation Depreciation Net
------------ ------------ ---
Income Fund $ 92 $(72) $ 20
Growth and Income Fund 52 (77) (25)
Growth Fund 36 (42) (6)
Aggressive Growth Fund 44 (45) (1)
5. Deferred Organizational Costs
Organizational costs have been capitalized by the Funds and are being amortized
over 60 months commencing with operations on a straight-line basis. In the event
any of the initial shares are redeemed by any holder thereof during the period
that the Funds are amortizing their organizational costs, the redemption
proceeds payable to the holder thereof by the Fund will be reduced by the
unamortized organizational costs in the same ratio as the number of initial
shares being redeemed bears to the number of initial shares outstanding at the
time of the redemption. These costs include legal fees of approximately $60,000
for organizational work performed by a law firm of which the Secretary of the
Funds is a partner.
Offering costs have been capitalized by the Funds and will be amortized over
twelve months commencing with operations.
PART C -- OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements: Financial Statements for Income Fund,
Growth and Income Fund, Growth Fund, and Aggressive Growth
Fund are included in the Statement of Additional Information.
(b) Exhibits:
(1) Articles of Incorporation of Registrant.
(Incorporated by reference to Exhibit (1) to initial
filing.)
(2) Bylaws of Registrant. (Incorporated by reference to
Exhibit (2) to initial filing.)
(3) Not applicable.
(4) Form of Common Stock Certificate. (Incorporated by
reference to Exhibit (4) to initial filing.)
(5) Form of Investment Advisory Agreement between
Registrant and First Bank National Association.
(Incorporated by reference to Exhibit (5) to initial
filing.)
(6) Form of Distribution Agreement between Registrant and
SEI Financial Services Company. (Incorporated by
reference to Exhibit (6) to initial filing.)
(7) Not applicable.
(8) Form of Custodian Agreement between Registrant and
First Trust National Association, including form of
Compensation Agreement pursuant thereto.
(Incorporated by reference to Exhibit (8) to initial
filing.)
(9) (a) Form of Administration Agreement between
Registrant and SEI Financial Management
Corporation. (Incorporated by reference to
Exhibit (9)(a) to initial filing.)
* (9) (b) Form of Transfer Agency Agreement between
Registrant and DST Systems, Inc.
(9) (c) Form of Shareholder Service Plan and Agreement
between Registrant and SEI Financial Services
Company. (Incorporated by reference to Exhibit
(9)(c) to initial filing.)
(10) Opinion and Consent of Dorsey & Whitney LLP.
(Incorporated by reference to Exhibit (10) to initial
filing.)
(11) Consent of KPMG Peat Marwick LLP. (Most recently
filed with Post-Effective Amendment No. 1.)
(12) Not applicable.
(13) Investment Letter for Initial Shares of of the
respective Series. (Incorporated by reference to
Exhibit (13) to Post-Effective Amendment No. 1.)
(14) (a) 401(k) Prototype Basic Plan Document # 02 (1989
Restatement), including Amendment Nos. 1, 2, and
3 and sample Adoption Agreement. (Incorporated
by reference to Exhibit (14)(a) to initial
filing.)
(14) (b) Defined Contribution Prototype Basic Plan
Document # 01 (1989 Restatement), including
Amendment Nos. 1 and 2 and sample Adoption
Agreement. (Incorporated by reference to Exhibit
(14)(b) to initial filing.)
(14) (c) IRA Applications and Documentation. (Incorporated
by reference to Exhibit (14)(c) to initial
filing.)
(15) Not applicable.
(16) Not applicable.
(17) Not applicable.
(18) Not applicable.
(19) Powers of Attorney of Directors Dayton, Kedrowski,
Strauss, Stringer and Veit. (Incorporated by
reference to Exhibit (19) to initial filing.)
* (19) (a) Power of Attorney of Director Andrew M.
Hunter III.
* (19) (b) Power of Attorney of Director Robert L. Spies.
* (27) Financial Data Schedule
- -------------------------
* Filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, as amended, the Registrant certifies that it
meets all of the requirements for effectiveness of this Post-Effective Amendment
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused
this Post-Effective Amendment No. 2 to its Registration Statement No. 333-7463
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Oaks, Commonwealth of Pennsylvania, on the 26th day of March, 1997.
FIRST AMERICAN STRATEGY FUNDS, INC.
ATTEST: /s/ Stephen G. Meyer By: /s/ Kathryn L. Stanton
----------------------------- --------------------------------------
Stephen G. Meyer Kathryn L. Stanton, Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 2 to the Registration Statement has been signed
below by the following persons in the capacity and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Stephen G. Meyer Controller (Principal **
- -------------------------------- Financial and Accounting
Stephen G. Meyer Officer)
* Director **
- --------------------------------
Robert J. Dayton
* Director **
- --------------------------------
Andrew M. Hunter III
* Director **
- --------------------------------
Leonard W. Kedrowski
* Director **
- --------------------------------
Robert L. Spies
* Director **
- --------------------------------
Joseph D. Strauss
* Director **
- --------------------------------
Virginia L. Stringer
* Director **
- --------------------------------
Gae B. Veit
* By: /s/ Kathryn L. Stanton
--------------------------
Kathryn L. Stanton
Attorney in Fact
** March 26, 1997.
EXHIBIT (9)(b)
AGENCY AGREEMENT
THIS AGREEMENT made the 1st day of October, 1996, by and between FIRST
AMERICAN STRATEGY FUNDS, INC., a corporation existing under the laws of the
State of Maryland, having its principal place of business at 680 East Swedesford
Road, Wayne, Pennsylvania 19087 (the "Fund"), and DST SYSTEMS, INC., a
corporation existing under the laws of the State of Delaware, having its
principal place of business at 333 W. 11th St., 5th Fl., Kansas City, Missouri
64105 ("DST"):
WITNESSETH:
WHEREAS, the Fund desires to appoint DST as Transfer Agent and Dividend
Disbursing Agent, and DST desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. Documents to be Filed with Appointment.
In connection with the appointment of DST as Transfer Agent and
Dividend Disbursing Agent for the Fund, there will be filed with DST
the following documents:
A. A certified copy of the resolutions of the Board of Directors
of the Fund (which term when used herein shall include any
Board of Trustees, or other governing body of the Fund,
however styled) appointing DST as Transfer Agent and Dividend
Disbursing Agent, approving the form of this Agreement, and
designating certain persons to sign stock certificates, if
any, and give written instructions and requests on behalf of
the Fund;
B. A certified copy of the Articles of Incorporation (which term
as used herein shall include, where relevant, the Declaration
of Trust, or other basic instrument establishing the existence
and nature of the Fund) of the Fund and all amendments
thereto;
C. A certified copy of the Bylaws of the Fund;
D. Copies of Registration Statements and amendments thereto,
filed with the Securities and Exchange Commission.
E. Specimens of all forms of outstanding stock certificates, in
the forms approved by the Board of Directors of the Fund, with
a certificate of the Secretary of the Fund, as to such
approval;
F. Specimens of the signatures of the officers of the Fund
authorized to sign stock certificates and individuals
authorized to sign written instructions and requests;
G. An opinion of counsel for the Fund, as such opinion(s) have
been filed with the Fund's Registration Statement or notices
required under Rule 24f-2 under the Investment Company Act of
1940 (the "1940 Act"), with respect to:
(1) The Fund's organization and existence under the laws
of its state of organization, and
(2) That all issued shares are validly issued, fully paid
and nonassessable.
2. Certain Representations and Warranties of DST.
DST represents and warrants to the Fund that:
A. It is a corporation duly organized and existing and in good
standing under the laws of Delaware.
B. It is duly qualified to carry on its business in the State of
Missouri.
C. It is empowered under applicable laws and by its Articles of
Incorporation and Bylaws to enter into and perform the
services contemplated in this Agreement.
D. It is registered as a transfer agent to the extent required
under the Securities Exchange Act of 1934 (the "1934 Act").
E. All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
F. It has and will continue to have and maintain the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
G. It is in compliance with Securities and Exchange Commission
("SEC") regulations and is not subject to restrictions under
Rule 17Ad.
H. Copies of DST's Rule 17Ad-13 reports will be provided to the
Fund annually as and to the extent required under Rule 17Ad-13
under the 1934 Act.
I. Its fidelity bonding and minimum capital meet the transfer
agency requirements of the New York Stock Exchange and the
American Stock Exchange.
3. Certain Representations and Warranties of the Fund.
The Fund represents and warrants to DST that:
A. It is a corporation duly organized and existing and in good
standing under the laws of the State of Maryland.
B. It is an open-end management investment company registered
under the 1940 Act, as amended, the portfolios of which may be
diversified or non-diversified.
C. A registration statement under the Securities Act of 1933 has
been filed and will be effective with respect to all shares of
the Fund being offered for sale.
D. All requisite steps have been and will continue to be taken to
register the Fund's shares for sale in all applicable states
and such registration will be effective at all times shares
are offered for sale in such state.
E. The Fund is empowered under applicable laws and by its charter
and Bylaws to enter into and perform this Agreement.
4. Scope of Appointment.
A. Subject to the conditions set forth in this Agreement, the
Fund hereby appoints DST as Transfer Agent and Dividend
Disbursing Agent.
B. DST hereby accepts such appointment and agrees that it will
act as the Fund's Transfer Agent and Dividend Disbursing
Agent. DST agrees that it will also act as agent in connection
with the Fund's periodic withdrawal payment accounts and other
open accounts or similar plans for shareholders, if any.
C. The Fund agrees to use its reasonable efforts to deliver to
DST in Kansas City, Missouri, as soon as they are available,
all of its shareholder account records.
D. DST, utilizing TA2000(R), DST's computerized data processing
system for securityholder accounting (the "TA2000 System"),
will perform the following services as transfer and dividend
disbursing agent for the Fund, and as agent of the Fund for
shareholder accounts thereof, in a timely manner: issuing
(including countersigning), transferring and canceling share
certificates, if any; maintaining all shareholder accounts;
providing transaction journals; as requested by the Fund and
subject to payment by the Fund of an additional fee, preparing
shareholder meeting lists for use in connection with any
annual or special meeting and arrange for an affiliate to
print, mail and receive back proxies and to certify the
shareholder votes of the Fund of any portfolios thereof;
mailing shareholder reports and prospectuses; withholding, as
required by federal law, taxes on shareholder accounts,
disbursing income dividends and capital gains distributions to
shareholders, preparing, filing and mailing U.S. Treasury
Department Forms 1099, 1042, and 1042S and performing and
paying backup withholding as required for all shareholders;
preparing and mailing confirmation forms to shareholders and
dealers, as instructed, for all purchases and liquidations of
shares of the Fund and other confirmable transactions in
shareholders' accounts; recording reinvestment of dividends
and distributions in shares of the Fund; providing or making
available on-line daily and monthly reports as provided by the
TA2000 System and as requested by the Fund or its management
company; maintaining those records necessary to carry out
DST's duties hereunder, including all information reasonably
required by the Fund to account for all transactions in the
Fund shares, calculating the appropriate sales charge with
respect to each purchase of the Fund shares as set forth in
the prospectus for the Fund, determining the portion of each
sales charge payable to the dealer participating in a sale in
accordance with schedules delivered to DST by the Fund's
principal underwriter or distributor (hereinafter "principal
underwriter") from time to time, disbursing dealer commissions
collected to such dealers, determining the portion of each
sales charge payable to such principal underwriter and
disbursing such commissions to the principal underwriter;
receiving correspondence pertaining to any former, existing or
new shareholder account, processing such correspondence for
proper recordkeeping, and responding promptly to shareholder
correspondence; mailing to dealers confirmations of wire order
trades; mailing copies of shareholder statements to
shareholders and registered representatives of dealers in
accordance with the Fund's instructions; interfacing with,
accepting and effectuating order for transactions and
registration and maintenance information, all on an automated
basis, from, and providing advices to the Fund's custodian
bank and to the Fund's settlement bank in connection with the
settling of such transactions, with, the National Securities
Clearing Corporation ("NSCC") pertaining to NSCC's Fund/SERV
and Networking programs; and processing, generally on the date
of receipt, purchases or redemptions or instructions to settle
any mail or wire order purchases or redemptions received in
proper order as set forth in the prospectus, rejecting
promptly any requests not received in proper order (as defined
by the Fund or its agents), and causing exchanges of shares to
be executed in accordance with the Fund's instructions and
prospectus and the general exchange privilege applicable.
E. At the request of Fund, DST shall use reasonable efforts to
provide the services set forth in Section 4.D. other than
through DST's usual methods of and procedures to utilize the
TA2000 System, that is by using methods and procedures other
than those usually employed by DST to perform services
requiring more manual intervention by DST, either in the entry
of data, in the maintenance of account lists and/or the
effecting of transactions with respect to timers and accounts
subject to agreements with timers, or in the modification or
amendment of reports generated by the TA2000 System, or which
provides information to DST after the commencement of the
nightly processing cycle of the TA2000 System, thereby
decreasing the effective time for performance by DST (the
"Exception Services").
F. DST shall use reasonable efforts to provide, reasonably
promptly under the circumstances, the same transfer agent
services with respect to any new, additional functions or
features or any changes or improvements to existing functions
or features as provided for in the Fund's instructions,
prospectus or application as amended from time to time, for
the Fund provided (i) DST is advised in advance by the Fund of
any changes therein and (ii) the TA2000 System and the mode of
operations utilized by DST as then constituted supports such
additional functions and features. If any addition to,
improvement of or change in the features and functions
currently provided by the TA2000 System or the operations as
requested by the Fund requires an enhancement or modification
to the TA2000 System or to operations as then conducted by
DST, DST shall not be liable therefore until such modification
or enhancement is installed on the TA2000 System or new mode
of operation is instituted. If any new, additional function or
feature or change or improvement to existing functions or
features or new service or mode of operation measurably
increases DST's cost of performing the services required
hereunder at the current level of service, DST shall advise
the Fund of the amount of such increase and if the Fund elects
to utilize such function, feature or service, DST shall be
entitled to increase its fees by the amount of the increase in
costs. In no event shall DST be responsible for or liable to
provide any additional function, feature, improvement or
change in method of operation until it has consented thereto
in writing.
G. The Fund shall have the right to add new series to the TA2000
System upon at least thirty (30) days' prior written notice to
DST provided that the requirements of the new series are
generally consistent with services then being provided by DST
under this Agreement. Rates or charges for additional series
shall be as set forth in Exhibit A, as hereinafter defined,
for the remainder of the contract term except as such series
use functions, features or characteristics for which DST has
imposed an additional charge as part of its standard pricing
schedule. In the latter event, rates and charges shall be in
accordance with DST's then-standard pricing schedule.
5. Limit of Authority.
Unless otherwise expressly limited by the resolution of appointment or
by subsequent action by the Fund, the appointment of DST as Transfer
Agent will be construed to cover the full amount of authorized stock of
the class or classes for which DST is appointed as the same will, from
time to time, be constituted, and any subsequent increases in such
authorized amount.
In case of such increase the Fund will file with DST:
A. If the appointment of DST was theretofore expresslynd National
Securities Clearing Corporation ("NSCC") transaction fees to
the extent any of the foregoing are paid by DST. The Fund
agrees to pay postage expenses at least one day in advance if
so requested. In addition, any other expenses incurred by DST
at the request or with the consent of the Fund will be
promptly reimbursed by the Fund.
C. Amounts due hereunder shall be due and paid on or before the
thirtieth (30th) business day after receipt of the statement
therefor by the Fund (the "Due Date"). The Fund is aware that
its failure to pay all amounts in a timely fashion so that
they will be received by DST on or before the Due Date will
give rise to costs to DST not contemplated by this Agreement,
including but not limited to carrying, processing and
accounting charges. Accordingly, subject to Section 6.D.
hereof, in the event that any amounts due hereunder are not
received by DST by the Due Date, the Fund shall pay a late
charge equal to the lesser of the maximum amount permitted by
applicable law or the product of that rate announced from time
to time by State Street Bank and Trust Company as its "Prime
Rate" plus three (3) percentage points times the amount
overdue, times the number of days from the Due Date up to and
including the day on which payment is received by DST divided
by 365. The parties hereby agree that such late charge
represents a fair and reasonable computation of the costs
incurred by reason of late payment or payment of amounts not
properly due. Acceptance of such late charge shall in no event
constitute a waiver of the Fund's or DST's default or prevent
the non-defaulting party from exercising any other rights and
remedies available to it.
D. In the event that any charges are disputed, the Fund shall, on
or before the Due Date, pay all undisputed amounts due
hereunder and notify DST in writing of any disputed charges
for billable expenses which it is disputing in good faith.
Payment for such disputed charges shall be due on or before
the close of the fifth (5th) business day after the day on
which DST provides to the Fund documentation which an
objective observer would agree reasonably supports the
disputed charges (the "Revised Due Date"). Late charges shall
not begin to accrue as to charges disputed in good faith until
the first business day after the Revised Due Date.
E. The fees and charges set forth on Exhibit A shall increase or
may be increased as follows:
(1) On the first day of each new term, but only in
accordance with the "Fee Increases" provision in
Exhibit A;
(2) DST may increase the fees and charges set forth on
Exhibit A upon at least ninety (90) days prior
written notice, if changes in existing laws, rules or
regulations: (i) require substantial system
modifications or (ii) materially increase cost of
performance hereunder;
(3) Upon at least ninety (90) days prior written notice,
DST may impose a reasonable charge for additional
features of TA2000 used by the Fund which features
are not consistent with the Fund's current processing
requirements; and
(4) In the event DST, at the Fund's request or direction,
pernd National Securities Clearing Corporation
("NSCC") transaction fees to the extent any of the
foregoing are paid by DST. The Fund agrees to pay
postage expenses at least one day in advance if so
requested. In addition, any other expenses incurred
by DST at the request or with the consent of the Fund
will be promptly reimbursed by the Fund.
C. Amounts due hereunder shall be due and paid on or before the
thirtieth (30th) business day after receipt of the statement
therefor by the Fund (the "Due Date"). The Fund is aware that
its failure to pay all amounts in a timely fashion so that
they will be received by DST on or before the Due Date will
give rise to costs to DST not contemplated by this Agreement,
including but not limited to carrying, processing and
accounting charges. Accordingly, subject to Section 6.D.
hereof, in the event that any amounts due hereunder are not
received by DST by the Due Date, the Fund shall pay a late
charge equal to the lesser of the maximum amount permitted by
applicable law or the product of that rate announced from time
to time by State Street Bank and Trust Company as its "Prime
Rate" plus three (3) percentage points times the amount
overdue, times the number of days from the Due Date up to and
including the day on which payment is received by DST divided
by 365. The parties hereby agree that such late charge
represents a fair and reasonable computation of the costs
incurred by reason of late payment or payment of amounts not
properly due. Acceptance of such late charge shall in no event
constitute a waiver of the Fund's or DST's default or prevent
the non-defaulting party from exercising any other rights and
remedies available to it.
D. In the event that any charges are disputed, the Fund shall, on
or before the Due Date, pay all undisputed amounts due
hereunder and notify DST in writing of any disputed charges
for billable expenses which it is disputing in good faith.
Payment for such disputed charges shall be due on or before
the close of the fifth (5th) business day after the day on
which DST provides to the Fund documentation which an
objective observer would agree reasonably supports the
disputed charges (the "Revised Due Date"). Late charges shall
not begin to accrue as to charges disputed in good faith until
the first business day after the Revised Due Date.
E. The fees and charges set forth on Exhibit A shall increase or
may be increased as follows:
(1) On the first day of each new term, but only in
accordance with the "Fee Increases" provision in
Exhibit A;
(2) DST may increase the fees and charges set forth on
Exhibit A upon at least ninety (90) days prior
written notice, if changes in existing laws, rules or
regulations: (i) require substantial system
modifications or (ii) materially increase cost of
performance hereunder;
(3) Upon at least ninety (90) days prior written notice,
DST may impose a reasonable charge for additional
features of TA2000 used by the Fund which features
are not consistent with the Fund's current processing
requirements; and
(4) In the event DST, at the Fund's request or direction,
performs Exception Services, DST shall be entitled to
impose a reasonable increase in the fees and charges
for such Exception Services from those set forth on
Exhibit A to the extent such Exception Services
increase DST's cost of performance.
If DST notifies the Fund of an increase in fees or charges
pursuant to subparagraph (2) of this Section 6.E., the parties shall
confer, diligently and in good faith and agree upon a new fee to cover
the amount necessary, but not more than such amount, to reimburse DST
for the Fund's aliquot portion of the cost of developing the new
software to comply with regulatory charges and for the increased cost
of operation.
If DST notifies the Fund of an increase in fees or charges
under subparagraphs (3) or (4) of this Section 6.E., the parties shall
confer, diligently and in good faith, and agree upon a new fee to cover
such new fund feature.
7. Operation of DST System.
In connection with the performance of its services under this
Agreement, DST is responsible for such items as:
A. That entries in DST's records, and in the Fund's records on
the TA2000 System created by DST, accurately reflect the
orders, instructions, and other information received by DST
from the Fund, the Fund's distributor, manager or principal
underwriter, the Fund's investment adviser, or the Fund's
administrator (each an "Authorized Person"), broker-dealers
and/or shareholders;
B. That shareholder lists, shareholder account verifications,
confirmations and other shareholder account information to be
produced from its records or data be available and accurately
reflect the data in the Fund's records on the TA2000 System;
C. The accurate and timely issuance of dividend and distribution
checks in accordance with instructions received from the Fund
and the data in the Fund's records on the TA2000 System;
D. That redemption transactions and payments be effected timely,
under normal circumstances on the day of receipt, and
accurately in accordance with redemption instructions received
by DST from Authorized Persons, broker-dealers or shareholders
and the data in the Fund's records on the TA2000 System;
E. The deposit daily in the Fund's appropriate bank account of
all checks and payments received by DST from NSCC,
broker-dealers or shareholders for investment in shares;
F. Notwithstanding anything herein to the contrary, with respect
to "as of" adjustments, DST will not assume one hundred
percent (100%) responsibility for losses resulting from "as
ofs" due to clerical errors or misinterpretations of
shareholder instructions by DST, but DST will discuss with the
Fund DST's accepting liability for an "as of" on a
case-by-case basis and will accept "financial responsibility"
for a particular situation resulting in a "material" financial
loss to the Fund where DST acted in bad faith or without due
diligence. As used herein: (i) the terms "as of" or "as ofs"
refer to the situation where, as a result of DST's sole error
or omission, DST enters a transaction into the TA2000 System
on a basis of a price determined other than the price next
determined after the receipt by DST of instructions to perform
such transaction; (ii) the term "financial responsibility"
shall include only the loss experienced by the Fund during the
period between the entry of the erroneous transaction or the
omission to enter the transaction into the TA2000 System and
one (1) day after the earliest time when a record disclosing
the erroneous transaction or the omission to process shall
have been made available to or received by the presentor or
the presentor's agent [plus any delay occasioned by DST to
research and to correct the error or omission after notice
thereof has been received by DST]; and a financial loss shall
be "material" when the financial consequences to the Fund of
DST's error or omission shall have resulted in a loss to the
Fund of one full cent ($0.01) per share or greater.
G. The requiring of proper forms of instructions, signatures and
signature guarantees(1) and any necessary documents supporting
the opening of shareholder accounts, transfers, redemptions
and other shareholder account transactions, all in conformance
with DST's present procedures as set forth in its Legal
Manual, Check Acceptance Policy, Checkwriting Draft
Procedures, and Signature Guarantee Procedures (collectively
the "Procedures") with such changes or deviations therefrom as
may be from time to time required or approved by the Fund, its
investment adviser, principal underwriter or administrator, or
its or DST's counsel and the rejection of orders or
instructions not in good order in accordance with the
applicable prospectus or the Procedures;
---------------------
(1) DST shall ascertain that what reasonably purports to be an appropriate
signature guarantee is present if a signature guarantee is required, but DST
shall have no responsibility for verifying the authenticity thereof or the
authority of the person executing the signature guarantee.
H. The maintenance of customary records in connection with its
agency, and particularly those records required to be
maintained pursuant to subparagraph (2)(iv) of paragraph (b)
of Rule 31a-1 under the Investment Company Act of 1940, if
any; and
I. The maintenance of a current, duplicate set of the Fund's
essential records at a secure separate location, in a form
available and usable forthwith in the event of any breakdown
or disaster disrupting its main operation.
8. Indemnification.
A. DST shall at all times use reasonable care, due diligence and
act in good faith in performing its duties under this
Agreement. DST shall provide its services as Transfer Agent in
accordance with Section 17A of the Securities Exchange Act of
1934, and the rules and regulations thereunder. In the absence
of bad faith, willful misconduct, knowing violations of
applicable law pertaining to the manner in which transfer
agency services are to be performed by DST (excluding any
violations arising directly or indirectly out of the actions
or omissions to act of third parties unaffiliated with DST),
reckless disregard of the performance of its duties, or
negligence on its part, DST shall not be liable for any action
taken, suffered, or omitted by it or for any error of judgment
(including reasonable interpretations of unclear, ambiguous or
obscure instructions) made by it or its employees in the
performance of its duties under this Agreement. For those
activities or actions delineated in the Procedures, DST shall
be presumed to have used reasonable care, due diligence and
acted in good faith if it has acted in accordance with the
Procedures, copies of which have been provided to the SEI
Corporation ("SEI"), the administrator to the Fund and
reviewed and approved by SEI's counsel, as amended from time
to time with approval of counsel, or for any deviation
therefrom approved by the Fund or DST counsel.
B. DST shall not be responsible for, and the Fund shall indemnify
and hold DST harmless from and against, any and all losses,
damages, costs, charges, counsel fees, payments, expenses and
liability which are asserted against DST or for which DST is
to be liable, arising out of or attributable to:
(1) All actions of DST required to be taken by DST
pursuant to this Agreement, provided that DST has
acted in good faith and with due diligence and
reasonable care;
(2) The Fund's refusal or failure to comply with the
terms of this Agreement, the Fund's negligence or
willful misconduct, or the breach of any
representation or warranty of the Fund hereunder;
(3) The good faith reliance on, or the carrying out of,
any written or oral instructions or requests of
persons designated by the Fund in writing (see
Exhibit C) from time to time as authorized to give
instructions on its behalf or representatives of an
Authorized Person or DST's good faith reliance on, or
use of, information, data, records and documents
received from, or which have been prepared and/or
maintained by the Fund, its investment advisor, its
sponsor or its principal underwriter;
(4) Defaults by dealers or shareowners with respect to
payment for share orders previously entered if DST
has acted in good faith;
(5) The offer or sale of the Fund's shares in violation
of any requirement under federal securities laws or
regulations or the securities laws or regulations of
any state or in violation of any stop order or other
determination or ruling by any federal agency or
state with respect to the offer or sale of such
shares in such state (unless such violation results
from DST's failure to comply with written
instructions of the Fund or of any officer of the
Fund that no offers or sales be input into the Fund's
securityholder records in or to residents of such
state);
(6) The Fund's errors and mistakes in the use of the
TA2000 System, the data center, computer and related
equipment used to access the TA2000 System (the "DST
Facilities"), and control procedures relating thereto
in the verification of output and in the remote input
of data;
(7) Errors, inaccuracies, and omissions in, or errors,
inaccuracies or omissions of DST arising out of or
resulting from such errors, inaccuracies and
omissions in, the Fund's records, shareholder and
other records, delivered to DST hereunder by the Fund
or its prior agent(s);
(8) Actions or omissions to act by the Fund or agents
designated by the Fund with respect to duties assumed
thereby as provided for in Section 21 hereof; and
(9) DST's performance of Exception Services except where
DST acted or omitted to act in bad faith, with
reckless disregard of its obligations or with gross
negligence.
C. Except where DST is entitled to indemnification under Section
8.B. hereof and with respect to "as ofs" set forth in Section
7.F., DST shall indemnify and hold the Fund harmless from and
against any and all losses, damages, costs, charges, counsel
fees, payments, expenses and liability arising out of DST's
failure to comply with the terms of this Agreement or arising
out of or attributable to DST's negligence or willful
misconduct or breach of any representation or warranty of DST
hereunder.
D. EXCEPT FOR VIOLATIONS OF SECTION 23, IN NO EVENT AND UNDER NO
CIRCUMSTANCES SHALL EITHER PARTY TO THIS AGREEMENT BE LIABLE
TO ANYONE, INCLUDING, WITHOUT LIMITATION TO THE OTHER PARTY,
FOR CONSEQUENTIAL DAMAGES FOR ANY ACT OR FAILURE TO ACT UNDER
ANY PROVISION OF THIS AGREEMENT EVEN IF ADVISED OF THE
POSSIBILITY THEREOF.
E. Promptly after receipt by an indemnified person of notice of
the commencement of any action, such indemnified person will,
if a claim in respect thereto is to be made against an
indemnifying party hereunder, notify the indemnifying party in
writing of the commencement thereof; but the failure so to
notify the indemnifying party will not relieve an indemnifying
party from any liability that it may have to any indemnified
person for contribution or otherwise under the indemnity
agreement contained herein except to the extent it is
prejudiced as a proximate result of such failure to timely
notify. In case any such action is brought against any
indemnified person and such indemnified person seeks or
intends to seek indemnity from an indemnifying party, the
indemnifying party will be entitled to participate in, and, to
the extent that it may wish, assume the defense thereof (in
its own name or in the name and on behalf of any indemnified
party or both with counsel reasonably satisfactory to such
indemnified person); provided, however, if the defendants in
any such action include both the indemnified person and an
indemnifying party and the indemnified person shall have
reasonably concluded that there may be a conflict between the
positions of the indemnified person and an indemnifying party
in conducting the defense of any such action or that there may
be legal defenses available to it and/or other indemnified
persons which are inconsistent with those available to an
indemnifying party, the indemnified person or indemnified
persons shall have the right to select one separate counsel
(in addition to local counsel) to assume such legal defense
and to otherwise participate in the defense of such action on
behalf of such indemnified person or indemnified persons at
such indemnified party's sole expense. Upon receipt of notice
from an indemnifying party to such indemnified person of its
election so to assume the defense of such action and approval
by the indemnified person of counsel, which approval shall not
be unreasonably withheld (and any disapproval shall be
accompanied by a written statement of the reasons therefor),
the indemnifying party will not be liable to such indemnified
person hereunder for any legal or other expenses subsequently
incurred by such indemnified person in connection with the
defense thereof. An indemnifying party will not settle or
compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified
persons are actual or potential parties to such claim, action,
suit or proceeding) unless such settlement, compromise or
consent includes an unconditional release of each indemnified
person from all liability arising out of such claim, action,
suit or proceeding. An indemnified party will not, without the
prior written consent of the indemnifying party settle or
compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution
may be sought hereunder. If it does so, it waives its right to
indemnification therefor.
9. Certain Covenants of DST and the Fund.
A. All requisite steps will be taken by the Fund from time to
time when and as necessary to register the Fund's shares for
sale in all states in which the Fund's shares shall at the
time be offered for sale and require registration. If at any
time the Fund receives notice of any stop order or other
proceeding in any such state affecting such registration or
the sale of the Fund's shares, or of any stop order or other
proceeding under the federal securities laws affecting the
sale of the Fund's shares, the Fund will give prompt notice
thereof to DST.
B. DST hereby agrees to perform such transfer agency functions as
are set forth in Section 4.D. above and establish and maintain
facilities and procedures reasonably acceptable to the Fund
for safekeeping of stock certificates, check forms, and
facsimile signature imprinting devices, if any; and for the
preparation or use, and for keeping account of, such
certificates, forms and devices, and to carry such insurance
as it considers adequate and reasonably available.
C. To the extent required by Section 31 of the Investment Company
Act of 1940 as amended and Rules thereunder, DST agrees that
all records maintained by DST relating to the services to be
performed by DST under this Agreement are the property of the
Fund and will be preserved and will be surrendered promptly to
the Fund on request.
D. DST agrees to furnish the Fund annual reports of its financial
condition, consisting of a balance sheet, earnings statement
and any other publicly available financial information
reasonably requested by the Fund and a copy of the report
issued by its certified public accountants pursuant to Rule
17Ad-13 under the 1934 Act as filed with the SEC. The annual
financial statements will be certified by DST's certified
public accountants and may be included in DST's publicly
distributed Annual Report.
E. DST represents and agrees that it will use its reasonable
efforts to keep current on the trends of the investment
company industry relating to shareholder services and will use
its reasonable efforts to continue to modernize and improve.
F. DST will permit the Fund and its authorized representatives to
make periodic inspections of its operations as such would
involve the Fund at reasonable times during business hours.
G. DST will provide in Kansas City at the Fund's request and
expense training for the Fund's personnel in connection with
use and operation of the TA2000 System. All travel and
reimbursable expenses incurred by the Fund's personnel in
connection with and during training at DST's Facility shall be
borne by the Fund. At the Fund's option and expense, DST also
agrees to use its reasonable efforts to provide two (2) man
weeks of training at the Fund's facility for the Fund's
personnel in connection with the continued operation of the
TA2000 System. Reasonable travel, per diem and reimbursable
expenses incurred by DST personnel in connection with and
during training at the Fund's facility or in connection with
the conversion shall be borne by the Fund.
10. Recapitalization or Readjustment.
In case of any recapitalization, readjustment or other change in the
capital structure of the Fund requiring a change in the form of stock
certificates, DST will issue or register certificates in the new form
in exchange for, or in transfer of, the outstanding certificates in the
old form, upon receiving:
A. Written instructions from an officer of the Fund;
B. Certified copy of the amendment to the Articles of
Incorporation or other document effecting the change;
C. Certified copy of the order or consent of each governmental or
regulatory authority, required by law to the issuance of the
stock in the new form, and an opinion of counsel that the
order or consent of no other government or regulatory
authority is required;
D. Specimens of the new certificates in the form approved by the
Board of Directors of the Fund, with a certificate of the
Secretary of the Fund as to such approval;
E. Opinion of counsel for the Fund stating:
(1) The status of the shares of stock of the Fund in the
new form under the Securities Act of 1933, as amended
and any other applicable federal or state statute;
and
(2) That the issued shares in the new form are, and all
unissued shares will be, when issued, validly issued,
fully paid and nonassessable.
11. Reserved.
12. Death, Resignation or Removal of Signing Officer.
The Fund will file promptly with DST written notice of any change in
the officers authorized to sign written requests or instructions to
give requests or instructions, together with two signature cards
bearing the specimen signature of each newly authorized officer.
13. Future Amendments of Charter and Bylaws.
The Fund will promptly file with DST copies of all material amendments
to its Articles of Incorporation or Bylaws made after the date of this
Agreement.
14. Instructions, Opinion of Counsel and Signatures.
At any time DST may apply to any person authorized by the Fund to give
instructions to DST, and may with the approval of a Fund officer and at
the expense of the Fund, either consult with legal counsel for the Fund
or consult with counsel chosen by DST and acceptable to the Fund, with
respect to any matter arising in connection with the agency and it will
not be liable for any action taken or omitted by it in good faith in
reliance upon such instructions or upon the opinion of such counsel.
For purposes hereof, DST's internal counsel and attorneys employed by
Sonnenschein Nath & Rosenthal, DST's primary outside counsel for
transfer agent matters, are acceptable to the Fund. DST will be
protected in acting upon any paper or document reasonably believed by
it to be genuine and to have been signed by the proper person or
persons and will not be held to have notice of any change of authority
of any person, until receipt of written notice thereof from the Fund.
It will also be protected in recognizing stock certificates which it
reasonably believes to bear the proper manual or facsimile signatures
of the officers of the Fund, and the proper countersignature of any
former Transfer Agent or Registrar, or of a co-Transfer Agent or
co-Registrar.
15. Force Majeure and Disaster Recovery Plans.
A. DST shall not be responsible or liable for its failure or
delay in performance of its obligations under this Agreement
arising out of or caused, directly or indirectly, by
circumstances beyond its reasonable control, including,
without limitation: any interruption, loss or malfunction or
any utility, transportation, computer hardware, provided such
equipment has been reasonably maintained, or third party
software or communication service; inability to obtain labor,
material, equipment or transportation, or a delay in mails;
governmental or exchange action, statute, ordinance, rulings,
regulations or direction; war, strike, riot, emergency, civil
disturbance, terrorism, vandalism, explosions, labor disputes,
freezes, floods, fires, tornadoes, acts of God or public
enemy, revolutions, or insurrection; or any other cause,
contingency, circumstance or delay not subject to DST's
reasonable control which prevents or hinders DST's performance
hereunder.
B. DST currently maintains an agreement with a third party
whereby DST is to be permitted to use on a "shared use" basis
a "hot site" (the "Recovery Facility") maintained by such
party in event of a disaster rendering the DST Facilities
inoperable. DST has developed and is continually revising a
business contingency plan (the "Business Contingency Plan")
detailing which, how, when, and by whom data maintained by DST
at the DST Facilities will be installed and operated at the
Recovery Facility. Provided the Fund is paying its pro rata
portion of the charge therefor, DST will, in the event of a
disaster rendering the DST Facilities inoperable, use
reasonable efforts to convert the TA2000 System containing the
designated Fund data to the computers at the Recovery Facility
in accordance with the then current Business Contingency Plan.
C. DST also currently maintains, separate from the area in which
the operations which provides the services to the Fund
hereunder are located, a Crisis Management Center consisting
of phones, computers and the other equipment necessary to
operate a full service transfer agency business in the event
one of its operations areas is rendered inoperable. The
transfer of operations to other operating areas or to the
Crisis Management Center is also covered in DST's Business
Contingency Plan.
16. Certification of Documents.
The required copy of the Articles of Incorporation of the Fund and
copies of all amendments thereto will be certified by the Secretary of
State (or other appropriate official) of the State of Incorporation,
and if such Articles of Incorporation and amendments are required by
law to be also filed with a county, city or other officer of official
body, a certificate of such filing will appear on the certified copy
submitted to DST. A copy of the order or consent of each governmental
or regulatory authority required by law to the issuance of the stock
will be certified by the Secretary or Clerk of such governmental or
regulatory authority, under proper seal of such authority. The copy of
the Bylaws and copies of all amendments thereto, and copies of
resolutions of the Board of Directors of the Fund, will be certified by
the Secretary or an Assistant Secretary of the Fund under the Fund's
seal.
17. Records.
DST will maintain customary records in connection with its agency, and
particularly will maintain those records required to be maintained
pursuant to subparagraph (2) (iv) of paragraph (b) of Rule 31a-1 under
the Investment Company Act of 1940, if any.
18. Disposition of Books, Records and Canceled Certificates.
DST may send periodically to the Fund, or to where designated by the
Secretary or an Assistant Secretary of the Fund, all books, documents,
and all records no longer deemed needed for current purposes and stock
certificates which have been canceled in transfer or in exchange, upon
the understanding that such books, documents, records, and stock
certificates will be maintained by the Fund under and in accordance
with the requirements of Section 17Ad-7 adopted under the Securities
Exchange Act of 1934. Such materials will not be destroyed by the Fund
without the consent of DST (which consent will not be unreasonably
withheld), but will be safely stored for possible future reference.
19. Provisions Relating to DST as Transfer Agent.
A. Instructions for the transfer, exchange or redemption of
shares of the Fund will be accepted, the registration,
redemption or transfer of the shares be effected and, where
applicable, funds remitted therefor. Upon surrender of the old
certificates in form or receipt by DST of instructions deemed
by DST properly endorsed for transfer, exchange or redemption,
accompanied by such documents as DST may deem necessary to
evidence the authority of the person making the transfer,
exchange or redemption, the transfer, exchange or redemption
of the shares reflected by such certificates be effected and
any sums due in connection therewith be remitted, in
accordance with the instructions contained herein. DST
reserves the right to refuse to transfer or redeem shares
until it is satisfied that the endorsement or signature on the
instruction or any other document is valid and genuine, and
for that purpose it may require a guaranty of signature in
accordance with the Signature Guarantee Procedures. DST also
reserves the right to refuse to transfer, exchange or redeem
shares until it is satisfied that the requested transfer,
exchange or redemption is legally authorized, and DST will
incur no liability for the refusal in good faith to make
transfers or redemptions which, in its judgment, are improper
or unauthorized. DST may, in effecting transfers, exchanges or
redemptions, rely upon DST's Procedures and Simplification
Acts, Uniform Commercial Code or other statutes which protect
it and the Fund in not requiring complete fiduciary
documentation. In cases in which DST is not directed or
otherwise required to maintain the consolidated records of
shareholder's accounts, DST will not be liable for any loss
which may arise by reason of not having such records.
B. DST will, at the expense of the Fund, issue and mail
subscription warrants, effectuate stock dividends, exchanges
or split ups, or act as Conversion Agent upon receiving
written instructions from any officer of the Fund and such
other documents as DST deems necessary.
C. DST will, at the expense of the Fund, supply a shareholder's
list to the Fund for its annual meeting upon receiving a
request from an officer of the Fund. It will also, at the
expense of the Fund, supply lists at such other times as may
be requested by an officer of the Fund.
D. Upon receipt of written instructions of an officer of the
Fund, DST will, at the expense of the Fund, address and mail
notices to shareholders.
E. In case of any request or demand for the inspection of the
stock books of the Fund or any other books in the possession
of DST, DST will endeavor to notify the Fund and to secure
instructions as to permitting or refusing such inspection. DST
reserves the right, however, to exhibit the stock books or
other books to any person in case it is advised by its counsel
that it may be held responsible for the failure to exhibit the
stock books or other books to such person.
20. Provisions Relating to Dividend Disbursing Agency.
A. DST will, at the expense of the Fund, provide a special form
of check containing the imprint of any device or other matter
desired by the Fund. Said checks must, however, be of a form
and size convenient for use by DST.
B. If the Fund desires to include additional printed matter,
financial statements, etc., with the dividend checks, the same
will be furnished DST within a reasonable time prior to the
date of mailing of the dividend checks, at the expense of the
Fund.
C. If the Fund desires its distributions mailed in any special
form of envelopes, sufficient supply of the same will be
furnished to DST but the size and form of said envelopes will
be subject to the approval of DST. If stamped envelopes are
used, they must be furnished by the Fund; or if postage stamps
are to be affixed to the envelopes, the stamps or the cash
necessary for such stamps must be furnished by the Fund.
D. DST shall establish and maintain on behalf of the Fund one or
more deposit accounts as Agent for the Fund, into which DST
shall deposit the funds DST receives for payment of dividends,
distributions, redemptions or other disbursements provided for
hereunder and to draw checks against such accounts.
E. DST is authorized and directed to stop payment of checks
theretofore issued hereunder, but not presented for payment,
when the payees thereof allege either that they have not
received the checks or that such checks have been mislaid,
lost, stolen, destroyed or through no fault of theirs, are
otherwise beyond their control, and cannot be produced by them
for presentation and collection, and, to issue and deliver
duplicate checks in replacement thereof.
21. Assumption of Duties By the Fund or Agents Designated By the Fund.
A. The Fund or its designated agents other than DST may assume
certain duties and responsibilities of DST or those services
of Transfer Agent and Dividend Disbursing Agent as those terms
are referred to in Section 4.D. of this Agreement including
but not limited to answering and responding to telephone
inquiries from shareholders and brokers, accepting shareholder
and broker instructions (either or both oral and written) and
transmitting orders based on such instructions to DST,
preparing and mailing confirmations, obtaining certified TIN
numbers, classifying the status of shareholders and
shareholder accounts under applicable tax law, establishing
shareholder accounts on the TA2000 System and assigning social
codes and Taxpayer Identification Number codes thereof, and
disbursing monies of the Fund, said assumption to be embodied
in writing to be signed by both parties.
B. To the extent the Fund or its agent or affiliate assumes such
duties and responsibilities, DST shall be relieved from all
responsibility and liability therefor and is hereby
indemnified and held harmless against any liability therefrom
and in the same manner and degree as provided for in Section 8
hereof.
C. Initially the Fund or its designees shall be responsible for
the following: (i) answer and respond to phone calls from
shareholders and broker-dealers, and (ii) monitor wire order
settlements and order cancellations of unsettled trades.
22. Termination of Agreement.
A. This Agreement shall be in effect for an initial period of
three (3) years and, thereafter, shall automatically extend
for additional, successive twelve (12) month terms upon the
expiration of any term hereof unless terminated as hereinafter
provided. This Agreement may be terminated by either party
upon the expiration of any term by the delivery to the other
party of one hundred twenty (120) days prior written notice of
such termination, provided, however, that the effective date
of any termination shall not occur during the period from
November 15 through March 15 of any year to avoid adversely
impacting year end.
B. Each party, in addition to any other rights and remedies,
shall have the right to terminate this Agreement forthwith
upon the occurrence at any time of any of the following events
with respect to the other party:
(1) The bankruptcy of the other party or its assigns or
the appointment of a receiver for the other party or
its assigns; or
(2) Failure by the other party or its assigns to perform
its duties in accordance with the Agreement, which
failure materially adversely affects the business
operations of the first party and which failure
continues for thirty (30) days after receipt of
written notice from the first party.
C. Either party may terminate this Agreement at any time by
delivering to the other party written notice of such
termination at least six (6) months prior to the effective
date of such termination.
D. In the event of any termination of this Agreement, the Fund
will continue to pay to DST as invoiced all sums due for DST's
services until completion of the conversion and will pay to
DST, no later than contemporaneously with the dispatch by DST
of the Fund's records, all amounts payable to DST hereunder.
An estimated invoice for fees and reimbursable expenses will
be presented prior to conversion for amounts anticipated to
follow the conversion. The Fund should accrue appropriate
reserves in expectation of invoices/amounts which will be
generated and received following the date of conversion, which
the Fund will pay within thirty (30) days of receipt.
E. In addition, in the event of any termination, DST will,
provided the Fund contemporaneously pays all outstanding
charges and fees, promptly transfer all of the records of the
Fund to the designated successor transfer agent. DST shall
also provide reasonable assistance to the Fund and its
designated successor transfer agent and other information
relating to its services provided hereunder (subject to the
recompense of DST for such assistance and information at its
standard rates and fees for personnel then in effect at that
time); provided, however, as used herein "reasonable
assistance" and "other information" shall not include
assisting any new service or system provider to modify, alter,
enhance, or improve its system or to improve, enhance, or
alter its current system, or to provide any new, functionality
or to require DST to disclose any DST Confidential
Information, as hereinafter defined, or any information which
is otherwise confidential to DST.
F. Subsequent to any termination of this Agreement, the Fund
shall continue to pay to DST, subject to and in accordance
with the terms and conditions set forth in Sections 6.A.,
6.B., 6.C. and 6.D. of this Agreement, for all expenses
incurred on the Fund's behalf and the post-deconversion fees
set forth in Exhibit B to this Agreement (a) until the Fund
accounts are purged from the TA2000 System (no longer being
required for Year End Reporting) with respect to closed
account fees and (b) so long as DST's services are utilized by
the Fund with respect to all fees other than those for closed
accounts.
G. In any event, the effective date of any deconversion as a
result a termination of this Agreement shall not occur during
the period from November 15th through March 15th of any year
to avoid adversely impacting year end.
23. Confidentiality.
A. DST agrees that, except as provided in the last sentence of
Section 19.J. hereof, or as otherwise required by law, DST
will keep confidential all records of and information in its
possession relating to the Fund or its shareholders or
shareholder accounts and will not disclose the same to any
person except at the request or with the consent of the Fund.
B. The Fund owns all of the data supplied by or on behalf of the
Fund to DST. The Fund has proprietary rights to all such data,
records and reports containing such data, but not including
the software programs upon which such data is installed, and
all records relating to such data will be transferred in
accordance with Section 22.D above in the event of
termination.
C. The Fund agrees to keep confidential all non-public financial
statements and other financial records of DST received
hereunder, all accountants' reports relating to DST, the terms
and provisions of this Agreement, including all exhibits and
schedules now or in the future attached hereto and all
manuals, systems and other technical information and data, not
publicly disclosed, relating to DST's operations and programs
furnished to it by DST pursuant to this Agreement and will not
disclose the same to any person except at the request or with
the consent of DST.
D. (1) The Fund acknowledges that DST has proprietary rights
in and to the TA2000 System used to perform services
hereunder including, but not limited to the
maintenance of shareholder accounts and records,
processing of related information and generation of
output, including, without limitation any changes or
modifications of the TA2000 System and any other DST
programs, data bases, supporting documentation, or
procedures (collectively "DST Confidential
Information") which the Fund's access to the TA2000
System or computer hardware or software may permit
the Fund or its employees or agents to become aware
of or to access and that the DST Confidential
Information constitutes confidential material and
trade secrets of DST. The Fund agrees to maintain the
confidentiality of the DST Confidential Information.
(2) The Fund acknowledges that any unauthorized use,
misuse, disclosure or taking of DST Confidential
Information which is confidential as provided by law,
or which is a trade secret, residing or existing
internal or external to a computer, computer system,
or computer network, or the knowing and unauthorized
accessing or causing to be accessed of any computer,
computer system, or computer network, may be subject
to civil liabilities and criminal penalties under
applicable state law. The Fund will advise all of its
employees and agents who have access to any DST
Confidential Information or to any computer equipment
capable of accessing DST or DST hardware or software
of the foregoing.
(3) The Fund acknowledges that disclosure of the DST
Confidential Information may give rise to an
irreparable injury to DST inadequately compensable in
damages. Accordingly, DST may seek (without the
posting of any bond or other security) injunctive
relief against the breach of the foregoing
undertaking of confidentiality and nondisclosure, in
addition to any other legal remedies which may be
available, and the Fund consents to the obtaining of
such injunctive relief. All of the undertakings and
obligations relating to confidentiality and
nondisclosure, whether contained in this Section or
elsewhere in this Agreement shall survive the
termination or expiration of this Agreement for a
period of ten (10) years.
24. Changes and Modifications.
A. During the term of this Agreement DST will use on behalf of
the Fund without additional cost all modifications,
enhancements, or changes which DST may make to the TA2000
System in the normal course of its business and which are
applicable to functions and features offered by the Fund,
unless substantially all DST clients are charged separately
for such modifications, enhancements or changes, including,
without limitation, substantial system revisions or
modifications necessitated by changes in existing laws, rules
or regulations. The Fund agrees to pay DST promptly for
modifications and improvements which are charged for
separately at the rate provided for in DST's standard pricing
schedule which shall be identical for substantially all
clients, if a standard pricing schedule shall exist. If there
is no standard pricing schedule, the parties shall mutually
agree upon the rates to be charged.
B. DST shall have the right, at any time and from time to time,
to alter and modify any systems, programs, procedures or
facilities used or employed in performing its duties and
obligations hereunder; provided that the Fund will be notified
as promptly as possible prior to implementation of such
alterations and modifications and that no such alteration or
modification or deletion shall materially adversely change or
affect the operations and procedures of the Fund in using or
employing the TA2000 System or DST Facilities hereunder or the
reports to be generated by such system and facilities
hereunder, unless the Fund is given thirty (30) days prior
notice to allow the Fund to change its procedures and DST
provides the Fund with revised operating procedures and
controls at the time such notice is delivered to the Fund.
C. All enhancements, improvements, changes, modifications or new
features added to the TA2000 System however developed or paid
for shall be, and shall remain, the confidential and exclusive
property of, and proprietary to, DST.
25. Subcontractors.
Nothing herein shall impose any duty upon DST in connection with or
make DST liable for the actions or omissions to act of unaffiliated
third parties such as, by way of example and not limitation, Airborne
Services, the U.S. mails and telecommunication companies, provided, if
DST selected such company, DST shall have exercised due care in
selecting the same.
26. Limitations on Liability. If the Fund is comprised of more than one
Portfolio, each Portfolio shall be regarded for all purposes hereunder
as a separate party apart from each other Portfolio. Unless the context
otherwise requires, with respect to every transaction covered by this
Agreement, every reference herein to the Fund shall be deemed to relate
solely to the particular Portfolio to which such transaction relates.
Under no circumstances shall the rights, obligations or remedies with
respect to a particular Portfolio constitute a right, obligation or
remedy applicable to any other Portfolio. The use of this single
document to memorialize the separate agreement of each Portfolio is
understood to be for clerical convenience only and shall not constitute
any basis for joining the Portfolios for any reason.
27. Miscellaneous.
A. This Agreement shall be construed according to, and the rights
and liabilities of the parties hereto shall be governed by,
the laws of the State of Missouri, excluding that body of law
applicable to choice of law.
B. All terms and provisions of this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the
parties hereto and their respective successors and permitted
assigns.
C. The representations and warranties, the indemnifications
extended hereunder, and the provisions of Sections 22.F and
6.A through and including 6.D., to the extent incorporated by
Section 22.F., are intended to and shall continue after and
survive the expiration, termination or cancellation of this
Agreement.
D. No provisions of this Agreement may be amended or modified in
any manner except by a written agreement properly authorized
and executed by each party hereto.
E. The captions in this Agreement are included for convenience of
reference only, and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or
effect.
F. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
G. If any part, term or provision of this Agreement is by the
courts held to be illegal, in conflict with any law or
otherwise invalid, the remaining portion or portions shall be
considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as
if the Agreement did not contain the particular part, term or
provision held to be illegal or invalid.
H. This Agreement may not be assigned by the Fund or DST without
the prior written consent of the other.
I. Neither the execution nor performance of this Agreement shall
be deemed to create a partnership or joint venture by and
between the Fund and DST. It is understood and agreed that all
services performed hereunder by DST shall be as an independent
contractor and not as an employee of the Fund. This Agreement
is between DST and the Fund and neither this Agreement nor the
performance of services under it shall create any rights in
any third parties. There are no third party beneficiaries
hereto.
J. Except as specifically provided herein, this Agreement does
not in any way affect any other agreements entered into among
the parties hereto and any actions taken or omitted by any
party hereunder shall not affect any rights or obligations of
any other party hereunder.
K. The failure of either party to insist upon the performance of
any terms or conditions of this Agreement or to enforce any
rights resulting from any breach of any of the terms or
conditions of this Agreement, including the payment of
damages, shall not be construed as a continuing or permanent
waiver of any such terms, conditions, rights or privileges,
but the same shall continue and remain in full force and
effect as if no such forbearance or waiver had occurred.
L. This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement, draft or
agreement or proposal with respect to the subject matter
hereof, whether oral or written, and this Agreement may not be
modified except by written instrument executed by both
parties.
M. All notices to be given hereunder shall be deemed properly
given if delivered in person or if sent by U.S. mail, first
class, postage prepaid, or if sent by facsimile and thereafter
confirmed by mail as follows:
If to DST:
DST Systems, Inc.
1055 Broadway, 7th Fl.
Kansas City, Missouri 64105
Attn: Senior Vice President-Full Service
Facsimile No.: 816-435-3455
With a copy of non-operational notices to:
DST Systems, Inc.
333 W. 11th St., 5th Fl.
Kansas City, Missouri 64105
Attn: Legal Department
Facsimile No.: 816-435-8630
If to the Fund:
First American Strategy Funds, Inc.
680 East Swedesford Rd.
Wayne, Pennsylvania 19087
Attn: _________________________
Facsimile No.: ________________
or to such other address as shall have been specified in
writing by the party to whom such notice is to be given.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized officers, to be effective as of the
day and year first above written.
DST SYSTEMS, INC.
By:________________________________
Title:_____________________________
FIRST AMERICAN STRATEGY
FUNDS, INC.
By:________________________________
Title:_____________________________
EXHIBIT A
PAGE 1 OF 5
DST SYSTEMS, INC.
FIRST AMERICAN TRANSFER AGENCY FEE PROPOSAL
EFFECTIVE NOVEMBER 1, 1996 THROUGH OCTOBER 31, 1999
A. MINIMUM FEE
Current - through October 1996
All Cusips $9,000/year
Year 1 - November 1996 through October 1997
Cusips in the range 1-10 $11,000/year
Cusips in the range 11-20 $10,500/year
Cusips in the range more than 20 $9,250/year
Year 2 - November 1997 through October 1998
Cusips in the range 1-10 $13,000/year
Cusips in the range 11-20 $12,500/year
Cusips in the range more than 20 $11,000/year
Year 3 - November 1998 through October 1999
Cusips in the range 1-10 $15,500/year
Cusips in the range 11-20 $14,000/year
Cusips in the range more than 20 $12,500/year
Note: Minimum applies unless charges included in Section B exceed the
minimum.
B. ACCOUNT MAINTENANCE AND PROCESSING FEES
Current - through October 1996
Open Accounts:
Daily Accrual Portfolio(s) $22.50 per account per year
Monthly Accrual Portfolio(s) $15.50 per account per year
Other Accruals Portfolio(s) $15.50 per account per year
Closed Accounts $1.20 per account per year
EXHIBIT A
PAGE 2 OF 5
Year 1 - November 1996 through October 1997
Open Accounts:
Daily Accrual Portfolio(s) $23.00 per account per year
Monthly Accrual Portfolio(s) $18.00 per account per year
Other Accruals Portfolio(s) $16.00 per account per year
Closed Accounts $2.85 per account per year
Year 2 - November 1997 through October 1998
Open Accounts:
Daily Accrual Portfolio(s) $24.00 per account per year
Monthly Accrual Portfolio(s) $19.00 per account per year
Other Accruals Portfolio(s) $17.00 per account per year
Closed Accounts $2.85 per account per year
Year 3 - November 1998 through October 1999
Open Accounts:
Daily Accrual Portfolio(s) $25.00 per account per year
Monthly Accrual Portfolio(s) $21.00 per account per year
Other Accruals Portfolio(s) $18.00 per account per year
Closed Accounts $2.85 per account per year
C. OPTIONAL SERVICES
Financial Intermediary Interface (Schwab)
Same Day:
Transaction Fee $2.50 each
Phone Call $4.00 each
Next Day 401(k) Interface:
Purchase $8.75 each
Redemption $13.75 each
- compared to -
Per Cusip Minimums
$1,200 per year 1st three cusips
$900 per year for each additional cusip
EXHIBIT A
PAGE 3 OF 5
Note: Financial Intermediary Interface Minimum applies to all SEI relationships
and is allocated to all management companies. Minimum applies unless the
activity fees for next day items exceed the minimum.
12b-1 Processing $.15 per open and closed account per cycle
CDSC/Sharelot Accounting $1.90 per account per year
Ad-Hoc Reporting
Multi File Reports $400 per report
Single File Reports $250 per report
*Audio Response(TM) System - see Exhibit A
*NSCC - see Exhibit B
Escheatment Costs - as incurred
Conversion/Acquisition Costs - Out of Pocket expenses including but not limited
to travel and accommodations, programming, training, equipment installation,
etc.
*Computer/Technical Personnel:
Business Analyst/Tester:
Dedicated $65,000 per year
On Request:
Senior Staff Support $60 per hour
Staff Support $40 per hour
Clerical Support $30 per hour
Technical/Programming:
Dedicated $102,000 per year
On Request $80 per hour
Technical/C Programming:
Dedicated $130,000 per year
On Request $105 per hour
EXHIBIT A
PAGE 4 OF 5
NOTES TO THE ABOVE FEE SCHEDULE
A. The above schedule does not include reimbursable expenses that are
incurred on the Fund's behalf. Examples of reimbursable expenses are
set forth hereinafter in this Exhibit A. Reimbursable expenses are
billed separately from service fees on a monthly basis.
B. Any fees or reimbursable expenses not paid within 30 days of the date
of the original invoice will be charged a late payment fee in
accordance with Section 6.C. of this Agreement.
FEE INCREASES
Unless new fees are negotiated by Fund and DST for the fourth year or any
succeeding year of this Agreement, the fees and charges set forth in this
Exhibit A shall increase annually as of December 1, 1999 and upon each
succeeding December 1st over the fees and charges during the prior 12 months in
an amount equal to the annual percentage of change in the Consumer Price Index
in the Kansas City, Missouri-Kansas Standard Metropolitan Statistical Area, All
Items, Base 1982-1984=100, as last reported by the U.S. Bureau of Labor
Statistics for the 12 calendar months immediately preceding such anniversary. In
the event that this Agreement was not signed as of the first day of the month,
the fees and charges increase shall be effective as of the first day of the
month immediately following the month during which the anniversary occurred.
OPEN AND CLOSED ACCOUNTS FEES
The monthly fee for an open account shall be charged in the month during which
an account is opened through the month in which such account is closed. The
monthly fee for a closed account shall be charged in the month following the
month during which such account is closed and shall cease to be charged in the
month following the Purge Date, as hereinafter defined. The "Purge Date" for any
year shall be any day after June 1st of that year, as selected by the Fund,
provided that written notification is presented to DST at least forty-five (45)
days prior to the Purge Date.
EXHIBIT A
PAGE 5 OF 5
REIMBURSABLE EXPENSES
Forms
Postage (to be paid in advance if so requested)
Mailing Services
Computer Hardware and Software - specific to Fund or installed at remote
site at Fund's direction
Telecommunications Equipment and Lines/Long Distance Charges
Magnetic Tapes, Reels or Cartridges
Magnetic Tape Handling Charges
Microfiche/Microfilm
Freight Charges
Printing
Bank Wire and ACH Charges
Proxy Processing - per proxy mailed
not including postage
Includes: Proxy Card
Printing
Outgoing Envelope
Return Envelope
Tabulation and Certification
T.I.N. Certification (W-8 & W-9)
(Postage associated with the return
envelope is included)
N.S.C.C. Communications Charge Currently $1,200.00
(Fund/Serv and Networking) per Fund per Year
Off-site Record Storage
Second Site Disaster Currently $.07
Backup Fee (per account) (guaranteed not to
exceed $.11 through
12/31/97)
Transmission of Statement Data for Currently $.035/per
Remote Processing record
Travel, Per Diem and other Billables
Incurred by DST personnel traveling to,
at and from the Fund at the request
of the Fund
EXHIBIT B
DST SYSTEMS, INC. / FIRST AMERICAN FUNDS
POST DECONVERSION FEE SCHEDULE
ALL FEES EFFECTIVE AS OF DECONVERSION:
ACCOUNT MAINTENANCE
Closed Accounts $.20/month/acct
Transaction/Maintenance Processing$ 2.50/item
Telephone Calls $4.00/call
Research Requests $40/hour (1 hr min)
PROGRAMMING
As required at DST's then current standard rates
REIMBURSABLE EXPENSES
This schedule does not include reimbursable expenses that are incurred on the
Fund's behalf. Examples of reimbursable expenses include but are not limited to
forms, postage, mailing services, telephone line/long distance charges,
transmission of statement data for remote print/mail operations, remote client
hardware, document storage, tax certification mailings, magnetic tapes,
printing, microfiche, Fed wire bank charges, ACH bank charges, NSCC charges, as
required or incurred, etc. Reimbursable expenses are billed separately from
Account Maintenance and Programming fees on a monthly basis and late payments
are subject to late charges in accordance with Section 6.C. of this Agreement.
EXHIBIT C
AUTHORIZED PERSONNEL
Pursuant to Section 8.A. of the Agency Agreement between _________________ (the
"Fund") and DST (the "Agreement"), the Fund authorizes the following Fund
personnel to provide instructions to DST, and receive inquiries from DST in
connection with the Agreement:
Name Title
---- -----
- ----------------------------- --------------------------------
- ----------------------------- --------------------------------
- ----------------------------- --------------------------------
- ----------------------------- --------------------------------
- ----------------------------- --------------------------------
- ----------------------------- --------------------------------
- ----------------------------- --------------------------------
This Exhibit may be revised by the Fund by providing DST with a substitute
Exhibit B. Any such substitute Exhibit B shall become effective twenty-four (24)
hours after DST's receipt of the document and shall be incorporated into the
Agreement.
ACKNOWLEDGMENT OF RECEIPT:
FIRST AMERICAN STRATEGY
DST SYSTEMS, INC. FUNDS, INC.
By:___________________________________ By:__________________________________
Title:________________________________ Title:_______________________________
Date:_________________________________ Date:________________________________
EXHIBIT (19)(a)
FIRST AMERICAN STRATEGY FUNDS, INC.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned person hereby
constitutes and appoints David Lee, Stephen G. Meyer, Kathryn Stanton, and
Joseph Lydon, and each of them, his true and lawful attorneys-in-fact and
agents, each acting alone, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign a
Registration Statement on Form N-1A of First American Strategy Funds, Inc., and
any and all amendments thereto, including post-effective amendments, and to file
the same, with all exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, each acting alone, full power and authority to do
and perform to all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, each
acting alone, or the substitutes for such attorneys-in-fact and agents, may
lawfully do or cause to be done by virtue hereof.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Andrew M. Hunter III Director March 12, 1997
- ---------------------------- --------------
Andrew M. Hunter III
EXHIBIT (19)(b)
FIRST AMERICAN STRATEGY FUNDS, INC.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned person hereby
constitutes and appoints David Lee, Stephen G. Meyer, Kathryn Stanton, and
Joseph Lydon, and each of them, his true and lawful attorneys-in-fact and
agents, each acting alone, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign a
Registration Statement on Form N-1A of First American Strategy Funds, Inc., and
any and all amendments thereto, including post-effective amendments, and to file
the same, with all exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, each acting alone, full power and authority to do
and perform to all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, each
acting alone, or the substitutes for such attorneys-in-fact and agents, may
lawfully do or cause to be done by virtue hereof.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Robert L. Spies Director March 7, 1997
- ---------------------------- -------------
Robert L. Spies
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