<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
[_] Preliminary Proxy Statement
[_] Confidential, for use of the Commission Only (as permitted
by Rule 14a-6(e)(2)
[X] Definitive Proxy Statement
[_] Definitive Additional materials
[_] Soliciting Material Pursuant to (S) 240.14a-l l(c) or (S)
240.14a-12
IAI INVESTMENT FUNDS I, INC.
----------------------------
(Name of Registrant as Specified in its Charter)
Steven G. Lentz
Investment Advisers, Inc.
3700 First Bank Place
Minneapolis MN 55402
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] $125 per Exchange Act Rules 0-l l(c)(l)(ii), 14a~(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rule 14a~(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
___________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
___________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 *-/:
___________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
___________________________________________________________________________
*-/ Set forth the amount on which the filing fee is calculated and state
how it was determined.
(5) Total fee paid:
___________________________________________________________________________
[X] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-l l(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
__________________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
__________________________________________________________________________
(3) Filing Party:
__________________________________________________________________________
(4) Date Filed:
___________________________________________________________________________
<PAGE>
IAI INVESTMENT FUNDS I, INC.
3700 First Bank Place, P.O. Box 357
Minneapolis, Minnesota 55440-0357
(612) 376-2700; (800) 945-3863
NOTICE OF SPECIAL SHAREHOLDERS' MEETING: MARCH 21, 1996
NOTICE IS HEREBY GIVEN that a special meeting of shareholders of IAI
Investment Funds I, Inc., on behalf of its portfolio known as IAI Institutional
Bond Fund (the "Corporation" or "Fund", as appropriate), will be held at the
Crowne Plaza Northstar Hotel, 618 Second Avenue South, Minneapolis, Minnesota,
at 10:00 a.m. Central Standard Time, for the following purposes:
1. To re-elect the directors of the Corporation.
2. To ratify the selection of KPMG Peat Marwick LLP as the independent
auditors of the Corporation for the Fund's current fiscal year.
3. To ratify the current Investment Advisory and Administrative Agreement
between the Fund and Investment Advisers, Inc.
Shareholders of record on February 7, 1996 are the only persons entitled to
notice of and to vote at the meeting. Your attention is directed to the attached
Proxy Statement. WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE
FILL IN, SIGN, DATE, AND MAIL THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN
ORDER TO SAVE FURTHER SOLICITATION EXPENSE. There is enclosed with the proxy an
addressed envelope for which no postage is required.
Dated: February 20, 1996 William C. Joas, Secretary
<PAGE>
IAI INVESTMENT FUNDS I, INC.
3700 First Bank Place, P.O. Box 357
Minneapolis, Minnesota 55440-0357
(612) 376-2700; (800) 945-3863
SPECIAL MEETING OF SHAREHOLDERS -- MARCH 21, 1996
The enclosed Proxy is solicited by the Board of Directors of the above-
referenced registered investment company (the "Corporation") in connection with
a special meeting of shareholders to be held on Thursday, March 21, 1996, at the
Crowne Plaza Northstar Hotel, 618 Second Avenue South, Minneapolis, Minnesota,
at 10:00 a.m. Central Standard Time, and any adjournments thereof. The shares of
the capital stock of the Corporation entitled to vote at the meeting are issued
in a series known as IAI Institutional Bond Fund (the "Fund"). As of February 7,
1996, the Fund had 10,776,883 outstanding shares. The costs of solicitation,
including the cost of preparing and mailing the Notice of Meeting and this Proxy
Statement will be paid by Investment Advisers, Inc. ("IAI"), the investment
adviser and manager of each Fund, and Lloyds TSB Group plc, IAI's ultimate
corporate parent. Such mailing occurred on approximately February 20, 1996. In
addition to being the Fund's investment adviser, IAI also provides the Fund with
significant administrative and business management services. IAI's address is
3700 First Bank Place, 601 Second Avenue South, Minneapolis, Minnesota 55440.
The Fund will furnish, without charge, a copy of its annual report and most
recent semi-annual report succeeding the annual report, if any, to a shareholder
upon request. To request such materials, please call the Fund at 1-800-943-3863.
A Proxy may be revoked before the meeting by giving written notice of
revocation in person or by mail to the Secretary of the Fund or at the meeting
prior to voting. Unless revoked, properly executed Proxies on which choices are
not specified by the shareholder will be voted as indicated in this Proxy
Statement in accordance with the recommendation of management. In instances
where choices are specified in the Proxy, those Proxies will be voted or the
vote will be withheld in accordance with the shareholder's choices.
Common shares represent the only class of securities of the Fund. Only
shareholders of record on February 7, 1996, as set forth above, may vote at the
meeting or any adjournments thereof. Each shareholder is entitled to one vote
for each share held. In the event that sufficient Proxy votes in favor of the
proposals set forth in the Notice of Joint Special meeting of Shareholders for
the Fund are not received by March 21, 1996, the persons named as proxies may
propose one or more adjournments of the meeting for that Fund to permit further
solicitation of Proxies. Any adjournment will require the affirmative vote of
the holders of a majority of the shares present in person or by Proxy at the
meeting. The persons named as proxies will vote in favor of such adjournment if
they are instructed (by a majority of the shares represented in person or by
Proxy) to vote for the proposals set forth in the Notice of Meeting for which
adjournment has been proposed. The persons named as proxies will vote against
such adjournment if they are instructed (by a majority of the shares represented
in person or by Proxy) to vote against such proposals. An abstention on any
proposal will be counted as present for purposes of determining whether a quorum
of shares is present at the meeting with respect to the proposal on which the
abstention is noted, but will be counted as a vote against such proposal. Under
the Rules of the New York Stock Exchange, Proposals 3 is considered a
"nondiscretionary" proposal; therefore, brokers who hold Fund shares in street
name for customers are not authorized to vote on those proposals on behalf of
any customer who has not furnished the broker with specific voting instructions
as to such proposal. Such "broker non-votes" will not be counted as present for
purposes of calculating the vote with respect to the nondiscretionary proposals.
SHARE OWNERSHIP
Except as set forth below, no person or entity, to the knowledge of Fund
management, beneficially owns more than 5% of the Fund's outstanding shares as
of February 7, 1996. Individual directors and the Fund officers and directors as
a group own less than 1% of the Fund's outstanding shares.
<TABLE>
<CAPTION>
SHARES PERCENT OF
BENEFICIALLY OUTSTANDING
NAME OF BENEFICIAL OWNER OWNED SHARES
------------------------ ------------ -----------
<S> <C> <C>
Bank of America TTEE for Retirement Trust 2,814,882 26.12
for Employees of Tracor Inc. & Affiliates
P.O. Box 98622
Las Vegas, NV 89193-8622
The Baptist Medical Centers 935,776 8.68
Attn: Robert E. Greene
3500 Blue Lake Drive, Suite 105
Birmingham, AL 35243
Trussal & Co. 848,783 7.88
FBO GMJF #606612102
c/o NBD Bank
P.O. Box 771072
Detroit, MI 48277-1072
Blandin Paper Company 836,542 7.76
Defined Benefit Pension Plan
Attn: A. Eugene Radecki
115 SW First Street
Grand Rapids, MN 55744-3699
Kansas Health Foundation 835,223 7.75
Evan A. Meyers, Vice President
309 East Douglas
Wichita, KS 67207
Bank of America as Trustee 631,079 5.86
FBO Littlefuse, Inc. Retirement Plan
TR #10-35-155-2027600 Attn: MF 8615
P.O. Box 3577 Terminal Annex
Los Angeles, CA 90051
</TABLE>
1
<PAGE>
PROPOSAL 1: RE-ELECTION OF DIRECTORS
At the meeting, the shareholders of the Corporation will be asked to
re-elect the members of the Corporation's Board of Directors (the "Directors").
The Corporation's Bylaws provide that the number of directors may be established
by the shareholders. The Directors recommend that there be seven directors.
It is intended that the enclosed Proxy will be voted for the re-election of the
seven persons named below, all of whom have served as Directors since the Fund's
inception, unless such authority has been withheld in the Proxy. The term of
office of each person elected will be until the next meeting of shareholders
where directors are elected or until his or her successor is duly elected and
shall qualify. In accordance with each Corporation's Bylaws, management
currently does not intend to hold annual or periodically scheduled regular
meetings of shareholders. Information regarding each nominee is set forth
following his or her name below.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
NAME AGE PRINCIPAL OCCUPATION
- --------------------------------------------------------------------------------
<S> <C> <C>
Madeline Betsch 53 Executive Vice President of CME-KHBB
Advertising until 1994; currently retired.
- --------------------------------------------------------------------------------
W. William Hodgson 71 Information Manager of North Central, Home
Office of the Prudential Insurance Company of
America until retirement in 1984.
- --------------------------------------------------------------------------------
George R. Long 65 Chairman of Mayfield Corp. (financial
consultants and venture capitalists);
Director of Black Hawk Holdings, Inc.
- --------------------------------------------------------------------------------
Noel P. Rahn* 57 Chief Executive Officer and Director of IAI;
Chairman of the Board of the nineteen IAI
Funds (including the new IAI Capital
Appreciation Fund).
- --------------------------------------------------------------------------------
Richard E. Struthers* 43 Executive Vice President of IAI; President
and Director of the nineteen IAI Funds
(including the new IAI Capital Appreciation
Fund).
- --------------------------------------------------------------------------------
J. Peter Thompson 64 Grain farmer since 1974; prior thereto Senior
Vice President and General Partner of Paine,
Webber, Jackson & Curtis, Inc. (diversified
financial services concern).
- --------------------------------------------------------------------------------
Charles H. Withers 69 Editor of Rochester Post-Bulletin, Rochester,
Minnesota, from 1960 through March 1980;
consultant to such newspaper through 1990;
currently retired.
- --------------------------------------------------------------------------------
</TABLE>
* Denotes directors who are "interested persons" (as defined by the Investment
Company Act of 1940, as amended) of a Corporation and IAI. Messrs. Rahn and
Struthers are interested persons because of their employment with IAI.
Each of the nominees was nominated by Directors who are not interested
persons, as defined by the Investment Company Act of 1940, as amended (the "1940
Act"), of a Corporation or IAI ("disinterested directors"), and each has agreed
to serve as a Director. If any unforeseen event prevents one or more of the
nominees from serving as a director, your votes will be cast for the election of
a substitute or substitutes selected by the disinterested directors. In no
event, however, can the Proxies be voted for a greater number of persons than
the number of nominees named. Unless otherwise instructed, the proxies will
vote for the re-election of each Director.
The Corporation has an Audit Committee whose members are selected annually
by the full Board of Directors. The Audit Committee is comprised of
disinterested directors Madeline Betsch, William Hodgson, and J. Peter Thompson.
The Audit Committee recommends annually to the Directors a firm of independent
certified public accountants to audit the books and records of each Corporation
for the ensuing year; monitors that firm's performance; reviews with the firm
the scope and results of each audit and determines the need, if any, to extend
audit procedures; confers with the firm and representatives of a Corporation on
matters concerning a Corporation's financial statements and reports; evaluates
the independence of the firm; reviews procedures to safeguard portfolio
securities; reviews a Corporation's purchase from the firm of non-audit
services; reviews fees paid to the firm; and facilitates communication. The
Corporations do not have a standing compensation committee or a standing
nominating committee.
For the most recent fiscal year, the Directors of the Fund met five times
and the Audit Committee met twice. No director attended fewer than 75% of the
total number of Directors' meetings and the meetings held by all Directors'
committees on which such director served.
The following table sets forth the total compensation received by each
director from the Fund as of its most recent fiscal year end, as well as the
total compensation received by each director from all eighteen mutual funds
managed by IAI for the calendar year ended December 31, 1995. Neither Mr. Rahn
nor Mr. Struthers received any compensation and they are not included in the
table. No officer of a Fund received compensation from a Fund during its most
recent fiscal year. No director receives pension or retirement benefits from
any Fund.
2
<PAGE>
<TABLE>
<CAPTION>
Total Compensation Total Compensation from
Director from the Fund IAI Mutual Funds
- --------------------------------------------------------------------------------
<S> <C> <C>
Madeline Betsch $1,950 $28,725
- --------------------------------------------------------------------------------
W. Wm. Hodgson $1,950 $28,725
- --------------------------------------------------------------------------------
George R. Long $1,550 $27,725
- --------------------------------------------------------------------------------
J. Peter Thompson $1,950 $28,725
- --------------------------------------------------------------------------------
Charles H. Withers $1,550 $27,725
- --------------------------------------------------------------------------------
</TABLE>
The vote of a majority of shares of the Corporation represented at the
meeting, provided at least a quorum (50% of the outstanding shares), is
represented in person or by proxy, is sufficient for the re-election of the
Directors. By completing the Proxy, you give the proxy the right to vote for
the persons named in the table above. If you elect to withhold authority for
any nominees, you may do so by making an "X" in the box marked "FOR" and by
striking a line through the nominee name on the Proxy, as further explained on
the Proxy itself.
All of the nominees listed above have consented to serve as directors if
elected. In the event any of the above nominees are not candidates for election
at the meeting, the proxies may vote for such other persons as management may
designate. Nothing currently indicates that such a situation will arise.
PROPOSAL 2: RATIFICATION OF INDEPENDENT AUDITORS
The 1940 Act provides that every registered investment company shall be
audited at least once a year by independent auditors selected by a majority of
the disinterested directors. The 1940 Act requires that the selection be
submitted for ratification or rejection by the shareholders at their next annual
meeting following the selection. The Directors, including the disinterested
directors, have selected KPMG Peat Marwick LLP to be the independent auditors
for the Corporation for their current fiscal years. KPMG Peat Marwick LLP has
no direct or material indirect financial interest in the Corporation or in IAI,
other than receipt of fees for services to the Corporation and IAI. KPMG Peat
Marwick LLP has also served as the independent auditors for IAI. At the
meeting, the shareholders of the Corporation will be asked to ratify the
selection of KPMG Peat Marwick LLP as the Corporation's independent auditors.
KPMG Peat Marwick LLP representatives will be present at the meeting and will
have an opportunity to make a statement to the shareholders and to respond to
questions.
The vote of a majority of the shares of the Corporation represented at the
meeting, provided at least a quorum (50% of the outstanding shares) is
represented in person or by proxy, is sufficient for the ratification of the
selection of the independent auditors. Unless otherwise instructed, the proxies
will vote for the ratification of the selection of KPMG Peat Marwick LLP as each
Corporation's independent auditors.
THE CORPORATION'S BOARD OF DIRECTORS RECOMMENDS THE RATIFICATION OF THE
SELECTION OF THE FUND'S INDEPENDENT AUDITORS. UNLESS OTHERWISE INSTRUCTED, THE
PROXIES WILL VOTE TO RATIFY THE SELECTION.
If the Corporation's shareholders fail to ratify the selection, the
Directors will promptly consider what action to take and could resubmit the
selection for shareholder ratification.
PROPOSAL 3: RATIFICATION OF THE FUND'S INVESTMENT ADVISORY AND ADMINISTRATIVE
SERVICES AGREEMENT
BACKGROUND. Until December 28, 1995, IAI was, indirectly, a wholly-owned
subsidiary of TSB Group plc ("TSB"), a diversified financial services concern
headquartered in the United Kingdom. On December 28, 1995, TSB merged with
Lloyds Bank Plc ("Lloyds"), another U.K.-based financial services concern, to
form Lloyds TSB Group plc ("Lloyds TSB"). As a result of the merger, Lloyds
became a wholly-owned subsidiary of TSB. The merger was accomplished by an
arrangement in which the holders of ordinary voting shares of Lloyds received
ordinary voting shares of TSB. At the close of the merger, former TSB
shareholders held approximately 30% and former Lloyds shareholders held
approximately 70% of Lloyds TSB's outstanding shares. No shareholder or, to the
knowledge of Lloyds TSB, group of shareholders, owned 3% or more of the
outstanding shares of Lloyds TSB upon consummation of the merger.
3
<PAGE>
IAI serves as the investment adviser, transfer agent and administrative and
accounting services agent to the Fund pursuant to a written agreement dated
August 18, 1993 (the "Agreement"). The Agreement provides for termination upon
its "assignment" as that term is defined in the 1940 Act. The 1940 Act defines
"assignment" as including "any direct or indirect transfer or hypothecation of
a . . . controlling block of the [advisor's] outstanding voting securities by a
security holder of the [advisor]." Control is further defined as "the power to
exercise a controlling influence over the management or policies of a company."
Control is presumed for any person who directly or indirectly beneficially owns
more than 25% of the voting securities of any company. Although the merger of
TSB and Lloyds resulted in the transfer of in excess of 25% of the outstanding
TSB shares, IAI has concluded that the merger did not cause such an assignment.
This conclusion is based primarily upon the facts that the merger did not result
in a transfer of control by one shareholder to another person (and no one person
may be viewed as receiving a controlling block of shares) and that the merger
did not result in any actual change in control or change in the management,
policies or operations of IAI.
Nevertheless, IAI and the Board believe it is in the best interests of Fund
shareholders to eliminate any possible uncertainty about the ongoing status of
the Agreement. Accordingly, at a February 7, 1996, meeting IAI recommended and
the Board directed that a proposal be submitted to Fund shareholders to ratify
the Agreement for the period from the effective date of the merger, December 28,
1995, going forward. In agreeing with IAI's recommendation, the Board
considered the facts that the Agreement was unchanged and that the investment
management and operations of the Fund were also unchanged.
DESCRIPTION OF AGREEMENT. The Agreement provides that IAI will furnish the
Fund continuously with investment planning and advice with regard to the Fund's
portfolio, prepare and make available to the Fund necessary research and
statistical data in connection therewith, supervise the purchase and sale of
specific investments by the Fund and perform such other services as are
reasonably incidental to such duties. Additionally, IAI furnishes each Fund
with office space and its employees serve as directors and officers of the
Funds. Under the Agreement, IAI also serves as each Fund's administrative agent,
dividend disbursing agent, transfer agent, redemption agent and accounting
services agent. Accounting services include maintaining and keeping current
required books and records, calculating the Fund's net asset value each business
day and preparing and supplying the Fund with required daily and periodic
reports. Transfer agency services include processing purchase orders, effective
transfers of Fund shares, issuing replacement share certificates as applicable,
maintaining the Fund's stock registry records and performing other duties
usually and customarily performed by transfer agents. Other services performed
by IAI include processing of redemption requests, processing dividends and
distributions, preparation and mailing of tax information forms, and mailing of
semi-annual reports of the Fund. The Agreement also provides that IAI shall
bear all of the Fund's expenses except for brokerage commissions and other
expenditures in connection with the purchase and sale of portfolio securities,
interest expense and, if specifically approved by a majority of the Fund's
disinterested directors, taxes and extraordinary expenses. Under the Agreement,
the Fund has agreed to pay IAI an annual fee of .50% of its average daily net
assets. For the last fiscal year, the Fund paid IAI $446,744 pursuant to the
Agreement.
The Agreement continues in force from year to year only so long as such
continuance is specifically approved at least annually by the Directors or by a
"majority" (as defined in the 1940 Act) of the Fund's outstanding voting
securities. The Agreement may be terminated without penalty by the Fund or IAI
by giving 60 days' prior written notice to the other party and terminates
automatically in the event of its "assignment" (as defined in the 1940 Act).
The Agreement was last approved by the Fund's Board of Directors, including its
disinterested directors, on November 8, 1995. Please see the sections
"Supplemental Information Regarding IAI" and Supplemental Information Regarding
the Funds" below for further information.
VOTING INFORMATION. Ratification of the Agreement requires the affirmative
vote of holders of a majority of the outstanding shares of the Fund. For this
purpose, the term "majority of the outstanding shares" means the vote of (i) 67%
or more of the shares of a Fund present at the meeting, so long as the holders
of more than 50% of the Fund's outstanding shares are present or represented by
proxy; or (ii) more than 50% of the outstanding voting securities of the Fund,
whichever is less.
THE FUND'S BOARD OF DIRECTORS RECOMMENDS THE RATIFICATION OF THE AGREEMENT.
UNLESS OTHERWISE INSTRUCTED, THE PROXIES WILL VOTE TO RATIFY THE AGREEMENT.
If the Fund's shareholders fail to ratify the Agreement, the Directors will
promptly consider what action to take and given IAI's conclusion on the
assignment issue, may or may not resubmit such Agreement for shareholder
ratification.
4
<PAGE>
SUPPLEMENTAL INFORMATION REGARDING IAI
IAI is an indirect wholly owned subsidiary of Hill Samuel Group BV ("Hill
Samuel"), an international merchant banking and financial services firm
headquartered in London, England. Hill Samuel's principal offices are at 100
Wood Street, London, ECS P2AJ, UK. Hill Samuel, in turn, is owned by Lloyds TSB
Group, plc ("Lloyds TSB"), a publicly-held financial services organization
headquartered in London, England. The principal offices of Lloyds TSB are at St.
George's House, 6 - 8 Eastcheap, London, EC3M 1LL, UK. Set forth below is the
name and principal occupation of the principal executive officer and each
director of IAI.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
NAME POSITION WITH IAI OTHER PRINCIPAL
OCCUPATIONS
- --------------------------------------------------------------------------------
<S> <C> <C>
Charles P. Barrington Director Managing Director of
100 Wood Street, Hill Samuel Bank
London, EC2P 2AJ
- --------------------------------------------------------------------------------
Hugh R. Freedberg Chairman of the Board Chief Executive of Hill
100 Wood Street, Samuel Bank
London, EC2P 2AJ
- --------------------------------------------------------------------------------
Larry R. Hill Director, Executive None
Vice President
- --------------------------------------------------------------------------------
Irving P. Knelman Director, Executive None
Vice President
- --------------------------------------------------------------------------------
Andrew Scott Plummer Director Legal Adviser to Lloyds
60 Lombard Street, TSB Group plc
London, EC3V 9DN
- --------------------------------------------------------------------------------
Noel P. Rahn Director, Chief None
Executive Officer
- --------------------------------------------------------------------------------
Eric St. C. Stobart Director Director of Hill Samuel
100 Wood Street, Bank
London, EC2P 2AJ
- --------------------------------------------------------------------------------
Richard E. Struthers Director, Executive None
Vice President
- --------------------------------------------------------------------------------
</TABLE>
The business address of Messrs. Rahn, Hill, Knelman and Struthers is the same as
that of IAI.
SUPPLEMENTAL INFORMATION REGARDING THE FUND
The following is a list of each officer or director of the Fund who is also
an officer, employee or director of IAI.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
NAME AGE POSITION WITH FUND POSITION WITH IAI
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Archie C. Black III 33 Treasurer Senior Vice President,
Chief Financial Officer
- --------------------------------------------------------------------------------
Christine A. Duval 26 Assistant Secretary Transfer Agency Manager
- --------------------------------------------------------------------------------
Kirk L. Gove 33 Vice President, Vice President
Marketing
- --------------------------------------------------------------------------------
Susan J. Haedt 33 Vice President and Vice President,
Director of Director of Fund
Operations Operations
- --------------------------------------------------------------------------------
Larry R. Hill 43 Vice President, Executive Vice
Investments President, Director,
Chief Fixed Income
Officer
- --------------------------------------------------------------------------------
William C. Joas 33 Secretary Vice President,
Associate Counsel
- --------------------------------------------------------------------------------
Timothy A. Palmer 33 Vice President, Senior Vice President,
Investments Fixed Income Portfolio
Manager
- --------------------------------------------------------------------------------
Noel P. Rahn 57 Chairman of the Board IAI: Chief Executive
Officer, Director
- --------------------------------------------------------------------------------
Michelle R. Regnier 28 Assistant Secretary Regulatory Specialist
- --------------------------------------------------------------------------------
Mark L. Simenstad 37 Vice President, Vice President, Fixed
Investments Income Portfolio
Manager
- --------------------------------------------------------------------------------
Richard E. Struthers 43 President Executive Vice
President, Director
- --------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
No officer or director of the Fund owns any securities of IAI. No officer
or director of the Fund owns any securities of or has any other material direct
or indirect interest in IAI or any person controlling, controlled by or under
common control with IAI. None of the executive officers or directors has family
relationships with other executive officers or directors.
The table below sets forth certain information as of February 7, 1996,
concerning other mutual funds for which IAI serves as investment adviser and
manager that have investment objectives similar to the Fund and describes the
rate of compensation such funds pay IAI.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Annual Fee
Name of Investment Company Size of Fund as of (based on average daily net
and/or Portfolio February 7, 1996 assets)
- ---------------------------- ------------------ -----------------------------
<S> <C> <C>
IAI Investment Funds I, Inc. $102,391,000 .55%
IAI Bond Fund
- -------------------------------------------------------------------------------
</TABLE>
OTHER MATTERS
The Fund's Board of Directors knows of no other business to be brought
before the meeting. However, if any other matters are properly brought before
the meeting, it is the intention that proxies which do not contain specific
restrictions to the contrary will be voted on such matters in accordance with
the judgment of the persons named in the enclosed form of proxy.
SUBMISSION OF CERTAIN SHAREHOLDER PROPOSALS
The Fund does not hold annual shareholder meetings. Shareholders wishing
to submit proposals for inclusion in a proxy statement for a subsequent
shareholder meeting should send their written proposals to William C. Joas, 3700
First Bank Place, P.O. Box 357, Minneapolis, MN 5544-0357.
NOTICE TO BANKS, BROKER-DEALERS, AND VOTING TRUSTEES AND THEIR NOMINEES
Please advise the Fund, in care of Investment Advisers, Inc., P.O. Box 357,
Minneapolis, MN 55440-0357, whether other persons are beneficial owners of
shares for which proxies are being solicited and, if so, the number of copies of
the Proxy Statement you wish to receive in order to supply copies to the
beneficial owners of the respective shares.
Dated: February 20, 1996
William C. Joas
Secretary
6
<PAGE>
PROXY
IAI INSTITUTIONAL BOND FUND
(A SERIES OF IAI INVESTMENT FUNDS I, INC.)
3700 FIRST BANK PLACE, P.O. BOX 357
MINNEAPOLIS, MINNESOTA 55440-0357
(612) 376-2700; (800) 945-3863
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF IAI
INVESTMENT FUNDS I, INC. (THE "CORPORATION").
The undersigned hereby appoints Richard E. Struthers, Susan J. Haedt and
William C. Joas, and each of them, with power to act without the other and with
the right of substitution in each, as proxies of the undersigned and hereby
authorizes each of them to represent and to vote, as designated below, all the
shares of the common stock of IAI Institutional Bond Fund (the "Fund"), held of
record by the undersigned on February 7, 1996, at a special meeting of the
Fund's shareholders to be held on Thursday, March 21, 1996, or any adjournments
or postponements thereof, with all powers the undersigned would possess if
present in person. All previous proxies given with respect to the meeting
hereby are revoked.
THE PROXIES ARE INSTRUCTED TO VOTE AS FOLLOWS:
1. RE-ELECTION OF DIRECTORS.
[_] FOR all nominees (except as marked to the contrary below).
[_] WITHHOLD AUTHORITY to vote for nominees listed below.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEES,
BUT NOT ALL OF THE NOMINEES, STRIKE A LINE THROUGH THE APPROPRIATE NAME
LISTED BELOW AND PLACE AN "X" IN THE BOX MARKED "FOR" ABOVE).
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Nominees: Madeline Betsch Richard E. Struthers George R. Long
Charles H. Withers W. William Hodgson J. Peter Thompson
Noel P. Rahn
</TABLE>
2. PROPOSAL TO RATIFY THE SELECTION OF KPMG PEAT MARWICK LLP as the
independent auditors for the Corporation for its current fiscal year.
[_] FOR [_] AGAINST [_] ABSTAIN
3. PROPOSAL TO RATIFY THE FUND'S ADVISORY AND ADMINISTRATIVE SERVICES
AGREEMENT with Investment Advisers, Inc.
[_] FOR [_] AGAINST [_] ABSTAIN
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY
WILL BE VOTED "FOR" EACH OF THE ABOVE PROPOSALS. RECEIPT OF THE NOTICE OF
SPECIAL MEETING OF SHAREHOLDERS AND THE PROXY STATEMENT RELATING TO THE MEETING
IS ACKNOWLEDGED BY YOUR EXECUTION OF THIS PROXY.
PLEASE SIGN THIS PROXY EXACTLY AS YOUR NAME APPEARS BELOW. WHEN SHARES ARE
HELD BY JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS AN ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF A
CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY PRESIDENT OR OTHER AUTHORIZED
OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY PARTNER OR OTHER
AUTHORIZED PERSON.
7
<PAGE>
DATED: _____________________, 1996
_____________________________________________
Signature
[SHAREHOLDER INFORMATION]
_____________________________________________
Signature if held jointly
TO SAVE FURTHER SOLICITATION EXPENSE, PLEASE MARK, SIGN, DATE AND RETURN THIS
PROXY CARD PROMPTLY USING THE ENCLOSED POSTAGE-PAID ENVELOPE.
8
