As filed with the Securities and Exchange Commission File No. 2-62538
on October 27, 1995 File No. 811-2839
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. [ 24 ]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ X ]
Amendment No. [ 21 ]
IAA TRUST ASSET ALLOCATION FUND, INC.
(Exact Name of Registrant as Specified on Charter)
808 IAA Drive
Bloomington, Illinois 61702
(Address of Principal Executive Offices)
(309) 557-3092
(Registrant's Telephone Number)
IAA TRUST COMPANY
808 IAA Drive
Bloomington, Illinois 61702
(Name and Address of Agent for Service)
Fiscal Year Ended June 30, 1995
It is proposed that this filing will become effective (check appropriate box):
[ X ] immediately upon filing pursuant to paragraph (b);
[ ] on (date) pursuant to paragraph (b);
[ ] 60 days after filing pursuant to paragraph (a)(i);
[ ] on (date) pursuant to paragraph (a)(i);
[ ] 75 days after filing pursuant to paragraph (a)(ii); or
[ ] on (date) pursuant to paragraph (a) of Rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
Registrant has registered an indefinite number of securities under the
Securities Act of 1933 pursuant to Rule 24f-2 and the Rule 24f-2 notice for
Registrant's most recent fiscal year was filed on or before August 31, 1995.
TOTAL PAGES: EXHIBITS BEGIN ON PAGE:
<PAGE>
IAA TRUST ASSET ALLOCATION FUND, INC.
CROSS REFERENCE SHEET
INFORMATION REQUIRED IN THE PROSPECTUS
<TABLE>
<CAPTION>
Part A Prospectus Headings
- ---------------------------------- -----------------------------------------
<S> <C>
Item 1. Cover Page Not Titled
Item 2. Synopsis Synopsis;
Transactions and Operating Expenses Table
Item 3. Condensed Financial
Information Financial Highlights
Item 4. General Description What are the Funds;
of Registrant What are the Funds' Investment Objectives
Item 5. Management of the Funds Who Manages the Funds
Item 6. Capital Stock and Capital Stock; Income Dividends,
Other Securities Capital Gains Distributions, and Taxes
Item 7. Purchase of Securities How to Buy Shares; Special Plans and
Being Offered Other Purchase Information; How the
Value of Your Shares is Determined
Item 8. Redemption or Repurchase How to Redeem Your Shares
Item 9. Pending Legal Proceedings *
</TABLE>
* The answer to the item is negative or the item is not applicable to this
filing, the registrant, or the securities being registered.
<PAGE>
IAA TRUST ASSET ALLOCATION FUND, INC.
CROSS REFERENCE SHEET
INFORMATION REQUIRED IN STATEMENT
OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
Statement of Additional Information
Part B Headings
- ---------------------------------- ---------------------------------------
<S> <C>
Item 10 Cover Page Not Titled
Item 11. Table of Contents Table of Contents
Item 12. General Information Investment Objectives and Policies;
and History Policies and Investment Restrictions
Aimed at Protecting Investors
Item 13. Investment Objectives Investment Objectives and Policies;
and Policies Policies and Investment Restrictions
Aimed at Protecting Investors
Item 14. Management of the
Registrant Directors and Officers of the Funds
Item 15. Control Persons and
Principal Holders Control Persons and Principal Holders
of Securities of Securities
Item 16. Investment Advisory
and Other Services Investment Advisory and Other Services
Item 17. Brokerage Allocation
and Other Practices Brokerage
Item 18. Capital Stock
and Other Securities Brokerage
Item 19. Purchase, Redemption and Purchases, Redemptions, and
Pricing of Securities Pricing of Fund Securities;
Being Offered Underwriter Compensation
Item 20. Tax Status Purchases, Redemptions, and
Pricing of Fund Securities
Item 21. Underwriters Underwriter Compensation
Item 22. Calculations of
Performance Data Investment Performance Information
Item 23. Financial Statements Annual Report to Shareholders -- Letter to
Shareholders; Portfolio Highlights;
Schedule of Investments; Statements of
Assets and Liabilities; Statements of
Operations; Statements of Changes in Net
Assets; Notes to Financial Statements;
Report of Independent Accountants
</TABLE>
Part C - Other Information
Information required to be included in Part C is set forth under the appropriate
Item, so numbered, in Part C to this Registration Statement.
THE IAA TRUST MUTUAL FUNDS
IAA Trust Growth Fund, Inc.
IAA Trust Asset Allocation Fund, Inc.
IAA Trust Tax Exempt Bond Fund, Inc.
IAA Trust Money Market Fund, Inc.
PROSPECTUS
October 27, 1995
808 IAA Drive Bloomington, Illinois 61702
(309) 557-3222
The IAA Trust Mutual Funds represent four separate funds (collectively, the
"Funds"). Each of the Funds has distinct investment objectives and policies.
Information concerning the Funds has been combined into this one Prospectus to
aid investors in understanding the similarities and differences among the Funds.
The four Funds are as follows:
IAA Trust Growth Fund, Inc. is a mutual fund with an investment objective of
capital growth. The Fund seeks to achieve its investment objective by investing
principally in common stocks or securities with equity characteristics.
IAA Trust Asset Allocation Fund, Inc. seeks growth of capital and current income
as near-equal objectives. The Fund seeks to achieve this objective by investing
in a mix of assets consisting of common stocks (both dividend and non-dividend
paying), preferred and convertible preferred stocks, fixed income securities
including bonds, bonds convertible into common stocks and short-term interest
bearing obligations.
IAA Trust Tax Exempt Bond Fund, Inc. is a mutual fund with an investment
objective of seeking as high a level of current interest income exempt from
Federal income taxes as is available from municipal bonds, consistent with the
conservation of capital. The Fund seeks to achieve its investment objective by
investing substantially all of its assets in a diversified portfolio of
municipal bonds, the interest from which is exempt from Federal income tax in
the opinion of bond counsel to the issuers.
IAA Trust Money Market Fund, Inc. is a mutual fund whose objective is to earn as
high a level of current income as possible, consistent with maintaining
liquidity and stability of principal. The Fund seeks to achieve its investment
objective by investing in high-quality money market instruments maturing in one
year or less, including securities issued or guaranteed by the U.S. Government,
its agencies or instrumentalities, certificates of deposit issued by domestic
banks, bankers acceptances, commercial paper and other corporate debt, and
repurchase agreements.
IAA Trust Money Market Fund, Inc. is a money market fund which seeks to maintain
a constant net asset value of $1.00 per share. Shares of a money market fund are
neither insured nor guaranteed by the U.S. Government and there is no assurance
that this Fund will be successful in meeting its investment objective or in
maintaining a constant net asset value of $1.00 per share.
The Funds' principal Underwriter is Fund/Plan Broker Services, Inc., #2 West
Elm Street, P.O. Box 874, Conshohocken, Pennsylvania 19428.
For information about how to invest in the IAA Trust Company Funds, contact
Fund/Plan Broker Services, Inc., or a local Country Capital Management Company
salesperson, or call toll-free 1 (800) 245-2100. In Bloomington/Normal, call
557-3222. Country Capital Management Company has a selling agreement with
Fund/Plan Broker Services, Inc. Shares of the Funds are sold only in states
where the Funds are registered.
This Prospectus sets forth concisely the information about the Funds that a
prospective investor ought to know before investing. Please read and retain this
Prospectus for future reference.
An investment in any of the Funds is neither insured nor guaranteed by the U.S.
Government. There can be no assurance that any Fund's investment objective will
be achieved. The investment objective of each Fund is fundamental and cannot be
changed without shareholder approval.
A Statement of Additional Information combining information about each of the
Funds has been filed with the Securities and Exchange Commission. This Statement
of Additional Information is incorporated by reference in its entirety in this
Prospectus. Copies of the Statement of Additional Information dated October 27,
1995 are available upon request and without charge by contacting Fund/Plan
Broker Services, Inc., at the address or telephone numbers listed above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Subject Page
<S> <C>
Synopsis. . . . . . . . . . . . . . . . . . . . . . . . . . .
Transactions and Operating Expenses Tables. . . . . . . . . .
Financial Highlights. . . . . . . . . . . . . . . . . . . . .
Performance Calculations. . . . . . . . . . . . . . . . . . .
What are the Funds. . . . . . . . . . . . . . . . . . . . . .
What are the Funds' Investment Objectives . . . . . . . . . .
Repurchase Agreements . . . . . . . . . . . . . . . . . . . .
Who Manages the Funds . . . . . . . . . . . . . . . . . . . .
Management's Discussion of the Funds' Performance . . . . . .
Who Distributes the Funds' Shares . . . . . . . . . . . . . .
Distribution Plans. . . . . . . . . . . . . . . . . . . . . .
Capital Stock . . . . . . . . . . . . . . . . . . . . . . . .
Income Dividends, Capital Gains Distributions, and Taxes. . .
How to Buy Shares . . . . . . . . . . . . . . . . . . . . . .
Special Plans and Other Purchase Information. . . . . . . . .
How the Value of Your Shares is Determined. . . . . . . . . .
How to Redeem Your Shares . . . . . . . . . . . . . . . . . .
</TABLE>
<PAGE>
SYNOPSIS
The Funds
The securities offered by this Prospectus consist of shares of four separate
funds (collectively the "Funds"), each of which has distinct investment
objectives and policies. The Funds are open-end, diversified management
investment companies commonly referred to as mutual funds. The Funds are
incorporated under the laws of the State of Maryland. Investors should be aware
that by combining the Prospectus of each Fund into this one document, there is a
remote possibility that one Fund may become liable for any misstatements in the
Prospectus about another Fund. To the extent that a Fund incurs such liability,
a shareholder's investment in such Fund could be adversely affected.
The four Funds are identified herein as follows: IAA Trust Growth Fund, Inc.
(the "Growth Fund"); IAA Trust Asset Allocation Fund, Inc. (the "Asset
Allocation Fund"); IAA Trust Tax Exempt Bond Fund, Inc. (the "Tax Exempt Bond
Fund"), and IAA Trust Money Market Fund, Inc (the "Money Market Fund").
Investment Objectives
The Growth Fund:
This Fund has an investment objective of capital growth. This Fund seeks to
achieve its investment objective by investing principally in common stocks or
securities with equity characteristics.
The Asset Allocation Fund:
This Fund seeks growth of capital and current income as near-equal objectives,
primarily through equity securities. In general, this Fund may hold a mix of
assets consisting of common stocks (both dividend and non- dividend paying),
preferred and convertible preferred stocks, fixed income securities including
bonds, bonds convertible into common stocks, and short-term interest bearing
obligations.
The Tax Exempt Bond Fund:
This Fund has an investment objective of seeking as high a level of current
interest income exempt from Federal income taxes as is available from municipal
bonds. This Fund seeks to achieve its objective by investing in a diversified
portfolio of municipal bonds, the interest from which is exempt from Federal
income tax in the opinion of bond counsel to the issuers.
The Money Market Fund:
This Fund has an investment objective of earning a high level of current income,
consistent with maintaining liquidity and stability of principal. This Fund
attempts to maintain the value of its shares at a constant $1.00, although there
can be no assurance that the Fund will be able to maintain a stable net asset
value of $1.00 per share. This Fund seeks to achieve its investment objective by
investing in high-quality money market instruments maturing in one year or less,
including securities issued or guaranteed by the U.S. Government, its agencies
or instrumentalities, certificates of deposit issued by domestic banks, bankers
acceptances, commercial paper and other corporate debt, and repurchase
agreements. An investment in the Fund is neither insured nor guaranteed by the
U.S. Government.
How to Buy Shares
The minimum initial single purchase for the Growth Fund, the Asset Allocation
Fund, and the Tax Exempt Bond Fund is $100. The minimum initial single purchase
for the Money Market Fund is $1,000. The minimum additional investment for all
four Funds is $25. The public offering price of shares of a Fund is the net
asset value per share, plus the applicable sales load, next determined after
receipt and acceptance of the purchase order at the Transfer Agent in proper
form with accompanying check or other bank wire arrangements satisfactory to the
Funds. There is no sales load associated with shares of the Money Market Fund.
See "HOW TO BUY SHARES".
How to Redeem Shares
Shares may be redeemed at the net asset value per share of a Fund next
determined after receipt by the Transfer Agent of a redemption request in proper
form. Signature guarantees may be required in some cases. See "HOW TO REDEEM
YOUR SHARES".
Dividends and Reinvestment
The Growth Fund intends to pay semi-annual dividends from its net investment
income and may pay short-term capital gains, if earned and as declared by the
Board of Directors. Distributions of net capital gains, if any, will be paid
annually.
The Asset Allocation Fund and the Tax Exempt Bond Fund pay monthly dividends
from their respective net investment income on the last business day of the
month to shareholders of record on the preceding business day.
Distributions of net capital gains, if any, will be paid annually.
The Money Market Fund declares and pays dividends of all its daily net
investment income on each day the Fund's net asset value per share is
determined. Each shareholder receives a monthly summary of such amounts.
Any dividend and distribution payments will be reinvested at net asset value, in
additional full and fractional shares of the particular Fund unless and until
the shareholder notifies the Transfer Agent in writing requesting payments in
cash. Provisions of the Tax Reform Act of 1986 may result in additional net
investment income and/or capital gain distributions at the end of the calendar
year. See "INCOME DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS, AND TAXES".
Investment Management, Underwriter, and Servicing Agents
The IAA Trust Company, 808 IAA Drive, Bloomington, Illinois 61702 is the
Investment Adviser and Custodian for the Funds.
Fund/Plan Broker Services, Inc., #2 Elm Street, Conshohocken, Pennsylvania 19428
serves as the Funds' Underwriter. Fund/Plan Services, Inc., #2 Elm Street,
Conshohocken, Pennsylvania 19428 serves as the Funds' Administrator,
Accounting/Pricing Agent, and Transfer Agent.
<PAGE>
TRANSACTIONS AND OPERATING EXPENSES TABLE
<TABLE>
<CAPTION>
Tax-
Asset Exempt Money
Growth Allocation Bond Market
Fund Fund Fund Fund
Shareholder Transaction Expenses:
<S> <C> <C> <C> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)1 3.00% 3.00% 3.00% none
Maximum Sales Load Imposed
on Reinvested Dividends. . . . none none none none
Deferred Sales Load. . . . . . . . none none none none
Redemption Fee . . . . . . . . . . none none none none
Exchange Fee . . . . . . . . . . . none none none none
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees. . . . . . . . . . 0.75% 0.75% 0.50% 0.50%
Waiver of Management Fees. . . . . 0.00% 0.00% 0.00% (0.00%) *
12(b)1 Fees. . . . . . . . . . . . 0.25% 0.25% 0.25% none
Other Expenses . . . . . . . . . . 0.14% 0.46% 0.31% 0.23%
Total Fund Operating Expenses. . . 1.14% 1.46% 1.06% 0.73% *
</TABLE>
Example:
<TABLE>
<S> <C> <C> <C> <C> <C>
You would pay the following expenses .. 1 year $ 41 $ 44 $ 40 $ 7
on a $1,000 investment, assuming ...... 3 years $ 65 $ 75 $ 63 $ 23
(1) 5% annual return and (2) redemption 5 years $ 91 $107 $ 87 $ 41
at the end of each time period ........ 10 years $164 $199 $156 $ 91
</TABLE>
(1) The maximum sales charge is 3%. For more information on waiver of sales
charge and reduced sales charges, see "HOW TO BUY SHARES".
The purpose of these tables are to assist the investor in understanding the
various costs and expenses that an investor in the Funds will bear directly and
indirectly. This information has been restated to reflect current fees as if
they had been in effect during the previous fiscal year. The information
contained in the tables should not be considered a representation of future
expenses. Actual expenses may be greater than or less than those stated.
* For the year ended June 30, 1995, the Advisor voluntarily agreed to
waive fees totalling $86,900 from the Money Market Fund. The Advisor is
currently not waiving any of its investment advisory fees.
FINANCIAL HIGHLIGHTS
The following financial highlights are a part of the Funds' financial statements
which have been audited by Coopers & Lybrand L.L.P., independent accountants,
for the most recent five years. The Funds' most recent annual audited financial
statements and the report of Coopers & Lybrand L.L.P. thereon appear in the
Funds' Statement of Additional Information. The following tables should be read
in conjunction with these financial statements and related notes also included
in such Statement of Additional Information.
Financial Highlights
THE GROWTH FUND:
<TABLE>
<CAPTION>
Financial Highlights
- ------------------------------------------------------------------------------------------------------------------------------------
The tables below set forth financial data for a share of capital stock outstanding throughout each period presented.
IAA Trust
Growth Fund, Inc.
Years Ended June 30,
------------------------------------------
1995 1994 1993 1992 1991
------ ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year................. $ 15.16 $ 17.55 $ 17.23 $ 17.35 $ 17.42
------- ------- ------- ------- -------
Income from investment operations
Net investment income............................ 0.22 0.27 0.25 0.35 0.41
Net gains or losses on securities (both
realized and unrealized)....................... 3.45 (0.63) 1.67 0.40 0.44
------- ------- ------- ------- -------
Total from investment operations............. 3.67 (0.36) 1.92 0.75 0.85
------- ------- ------- ------- -------
Less Distributions
Dividends from net investment
income......................................... (0.17) (0.22) (0.29) (0.38) (0.51)
Distributions from capital gains................. (1.43) (1.81) (1.31) (0.49) (0.41)
------- ------- ------- ------ ------
Total distributions.......................... (1.60) (2.03) (1.60) (0.87) (0.92)
------- ------- ------- ------ ------
Net asset value, end of year....................... $ 17.23 $ 15.16 $ 17.55 $ 17.23 $ 17.35
======= ======= ======= ======= =======
Total return+ ..................................... 26.68% (2.42%) 11.71% 4.23% 5.37%
Ratios/Supplemental Data
Net assets, end of period (in 000's)............. $70,577 $59,448 $70,785 $76,147 $81,974
Ratio of expenses to average
net assets* ................................... 1.14% 1.24% 1.18% 0.85% 0.82%
Ratio of net investment
income to average net assets* ................. 1.41% 1.03% 1.36% 1.91% 2.58%
Portfolio turnover............................... 31.84% 49.12% 55.36% 45.50% 26.00%
<CAPTION>
Years Ended June 30,
---------------------------------------------
1990 1989 1988 1987 1986
------ ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year................. $ 16.83 $ 15.06 $ 19.43 $ 20.64 $ 17.60
------- ------- ------- ------- -------
Income from investment operations
Net investment income............................ 0.61 0.52 0.43 0.31 0.39
Net gains or losses on securities (both
realized and unrealized)....................... 1.93 2.32 (1.62) 1.96 4.25
------- ------- ------- ------- -------
Total from investment operations............. 2.54 2.84 (1.19) 2.27 4.64
------- ------- ------- ------- -------
Less Distributions
Dividends from net investment
income......................................... (0.65) (0.42) (0.54) (0.38) (0.40)
Distributions from capital gains................. (1.30) (0.65) (2.64) (3.10) (1.20)
------- ------- ------- ------ ------
Total distributions.......................... (1.95) (1.07) (3.18) (3.48) (1.60)
------- ------- ------- ------ ------
Net asset value, end of year....................... $ 17.42 $ 16.83 $ 15.06 $ 19.43 $ 20.64
======= ======= ======= ======= =======
Total return+ ..................................... 16.09% 20.06% (6.68%) 14.75% 28.89%
Ratios/Supplemental Data
Net assets, end of period (in 000's)............. $81,511 $74,327 $68,436 $79,194 $75,062
Ratio of expenses to average
net assets* ................................... 0.84% 0.93% 0.96% 0.95% 0.95%
Ratio of net investment
income to average net assets* ................. 3.58% 3.29% 2.69% 1.70% 2.06%
Portfolio turnover............................... 18.10% 42.60% 51.20% 40.10% 64.90%
</TABLE>
* Average net assets have been computed based on the aggregate value of the
fund's daily net assets.
+ Total return calculation does not reflect sales load.
<PAGE>
THE ASSET ALLOCATION FUND:
<TABLE>
<CAPTION>
IAA Trust
Asset Allocation Fund, Inc.
Years Ended June 30,
------------------------------------------------------
1995 1994 1993 1992 1991
------- ------ ------ ------ --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ............... $ 11.08 $ 11.60 $ 11.20 $ 10.74 $ 10.56
------- ------- ------- ------- --------
Income from investment operations
Net investment income .......................... 0.36 0.34 0.57 0.68 0.73
Net gains or losses on securities (both
realized and unrealized) ..................... 1.38 (0.25) 0.47 0.55 0.24
------- ------ ------- ------- --------
Total from investment operations ........... 1.74 0.09 1.04 1.23 0.97
------- ------ ------- ------- --------
Less distributions
Dividends from net investment
income ....................................... (0.34) (0.34) (0.57) (0.68) (0.76)
Distributions from capital gains ............... (0.18) (0.27) (0.07) (0.09) (0.03)
Distributions from return of capital ........... (0.01) (0.00) (0.00) (0.00) (0.00)
------- ------ ------- ------- --------
Total distributions ........................ (0.53) (0.61) (0.64) (0.77) (0.79)
------- ------ ------- ------- --------
Net asset value, end of year ..................... $ 12.29 $ 11.08 $ 11.60 $ 11.20 $ 10.74
======= ======= ======= ======= ========
Total return+ .................................... 16.29% 0.71% 9.58% 11.84% 9.47%
Ratios/Supplemental Data
Net assets, end of period (in 000's) ........... $ 9,540 $ 8,653 $ 6,663 $ 6,233 $ 5,768
Ratio of expenses to average
net assets* .................................. 1.46% 1.78% 1.71% 1.51% 1.33%
Ratio of net investment
income to average net assets* ................ 3.18% 2.98% 4.97% 6.20% 6.83%
Portfolio turnover ............................. 21.03% 17.39% 36.70% 14.10% 20.60%
<CAPTION>
Years Ended June 30,
------------------------------------------------------
1990 1989 1988 1987 1986
------- ------ ------ ------ --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ............... $ 10.80 $ 10.51 $ 10.84 $ 11.14 $ 10.03
------- ------- ------- ------- --------
Income from investment operations
Net investment income .......................... 0.78 0.75 0.73 0.73 0.83
Net gains or losses on securities (both
realized and unrealized) ..................... (0.11) 0.29 (0.08) (0.30) 1.10
------- ------ ------- ------- --------
Total from investment operations ........... 0.67 1.04 0.65 0.43 1.93
------- ------ ------- ------- --------
Less distributions
Dividends from net investment
income ....................................... (0.77) (0.75) (0.72) (0.73) (0.82)
Distributions from capital gains ............... (0.14) 0.00 (0.26) 0.00 0.00
Distributions from return of capital ........... 0.00 0.00 0.00 0.00 0.00
------- ------ ------- ------- --------
Total distributions ........................ (0.91) (0.75) (0.98) (0.73) (0.82)
------- ------ ------- ------- --------
Net asset value, end of year ..................... $ 10.56 $ 10.80 $ 10.51 $ 10.84 $ 11.14
======= ======= ======= ======= ========
Total return+ .................................... 6.50% 10.40% 6.47% 3.91% 19.73%
Ratios/Supplemental Data
Net assets, end of period (in 000's) ........... $ 5,714 $ 5,812 $ 5,966 $ 6,003 $ 4,701
Ratio of expenses to average
net assets* .................................. 1.39% 1.34% 1.17% 1.42% 1.38%
Ratio of net investment
income to average net assets* ................ 7.31% 7.12% 6.92% 6.61% 7.83%
Portfolio turnover ............................. 6.50% 45.20% 11.70% 51.40% 59.30%
</TABLE>
* Average net assets have been computed based on the aggregate value of the
fund's daily net assets.
+ Total return calculation does not reflect sales load.
<PAGE>
THE TAX EXEMPT BOND FUND:
<TABLE>
<CAPTION>
Financial Highlights
- ------------------------------------------------------------------------------------------------------------------------------------
The tables below set forth financial data for a share of capital stock outstanding throughout each period presented.
IAA Trust
Tax Exempt Bond Fund, Inc.
Years Ended June 30,
----------------------------------------------
1995 1994 1993 1992 1991
------- ------ ------ ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year................. $ 8.19 $ 9.11 $ 8.78 $ 8.44 $ 8.32
------- ------- ------- ------- -------
Income from investment operations
Net investment income............................ 0.39 0.39 0.46 0.49 0.52
Net gains or losses on securities (both
realized and unrealized)....................... 0.20 (0.54) 0.33 0.34 0.13
------- ------- ------- ------- -------
Total from investment operations............. 0.59 (0.15) 0.79 0.83 0.65
------- ------- ------- ------- -------
Less distributions
Dividends from net investment
income......................................... (0.39) (0.39) (0.46) (0.49) (0.53)
Distributions from capital gains................. (0.03) (0.38) 0.00 0.00 0.00
------- ------- ------- ------- -------
Total distributions.......................... (0.42) (0.77) (0.46) (0.49) (0.53)
------- ------- ------- ------- -------
Net asset value, end of year....................... $ 8.36 $ 8.19 $ 9.11 $ 8.78 $ 8.44
======= ======= ======= ======= =======
Total return+ .................................... 7.51% (1.86%) 9.19% 10.05% 8.05%
Ratios/Supplemental Data
Net assets, end of period (in 000's)............. $18,833 $19,095 $20,026 $17,872 $16,035
Ratio of expenses to average
net assets* ................................... 1.06% 1.15% 1.03% 0.95% 0.83%
Ratio of net investment
income to average net assets* ................. 4.79% 4.47% 5.11% 5.65% 6.17%
Portfolio turnover .............................. 24.89% 41.94% 39.60% 20.30% 6.30%
<CAPTION>
Years Ended June 30,
---------------------------------------------
1990 1989 1988 1987 1986
------ ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year................. $ 8.41 $ 8.15 $ 8.09 $ 8.10 $ 7.56
------- ------- ------- ------- -------
Income from investment operations
Net investment income............................ 0.52 0.54 0.54 0.51 0.57
Net gains or losses on securities (both
realized and unrealized)....................... (0.09) 0.26 0.06 (0.01) 0.54
------- ------- ------- ------- -------
Total from investment operations............. 0.43 0.80 0.60 0.50 1.11
------- ------- ------- ------- -------
Less Distributions
Dividends from net investment
income......................................... (0.52) (0.54) (0.54) (0.51) (0.57)
Distributions from capital gains................. 0.00 0.00 0.00 0.00 0.00
------- ------- ------- ------ ------
Total distributions.......................... (0.52) (0.54) (0.54) (0.51) (0.57)
------- ------- ------- ------ ------
Net asset value, end of year....................... $ 8.32 $ 8.41 $ 8.15 $ 8.09 $ 8.10
======= ======= ======= ======= =======
Total return+ ..................................... 5.24% 10.15% 7.69% 6.18% 15.21%
Ratios/Supplemental Data
Net assets, end of period (in 000's)............. $14,957 $14,307 $12,906 $13,328 $ 6,617
Ratio of expenses to average
net assets* ................................... 0.90% 0.91% 0.89% 1.02% 1.20%
Ratio of net investment
income to average net assets* ................. 6.22% 6.51% 6.66% 6.27% 7.25%
Portfolio turnover............................... 23.50% 12.70% 16.40% 13.90% 39.90%
</TABLE>
* Average net assets have been computed based on the aggregate value of the
fund's daily net assets.
+ Total return calculation does not reflect sales load.
<PAGE>
THE MONEY MARKET FUND:
<TABLE>
<CAPTION>
IAA Trust
Money Market Fund, Inc.
Years Ended June 30,
------------------------------------------------
1995 1994 1993 1992 1991
------- ------- ------ -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------ -------- --------
Income from investment operations
Net investment income............................ 0.05 0.03 0.02 0.03 0.06
------- ------- ------ -------- --------
Total from investment operations............. 0.05 0.03 0.02 0.03 0.06
------- ------- ------ -------- --------
Less distributions
Dividends from net investment
income......................................... (0.05) (0.03) (0.02) (0.03) (0.06)
------- ------- ------ -------- --------
Total distributions.......................... (0.05) (0.03) (0.02) (0.03) (0.06)
------- ------- ------ -------- --------
Net asset value, end of year....................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======== ========
Total return....................................... 4.85% 2.86% 2.41% 3.49% 6.40%
Ratios/Supplemental Data
Net assets, end of period (in 000's)............. $36,415 $38,699 $33,302 $ 10,191 $19,839
Ratio of expenses to average
net assets*+ .................................. 0.73% 0.56% 0.58% 1.32% 1.03%
Ratio of net investment
income to average net assets* ................. 4.80% 2.83% 2.67% 3.60% 6.26%
<CAPTION>
Years Ended June 30,
--------------------------------------------------
1990 1989 1988 1987 1986
------- ------- ------ -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- -------- --------
Income from investment operations
Net investment income............................ 0.07 0.08 0.06 0.05 0.07
------- ------- ------- -------- --------
Total from investment operations............. 0.07 0.08 0.06 0.05 0.07
------- ------- ------- -------- --------
Less distributions
Dividends from net investment
income......................................... (0.07) (0.08) (0.06) (0.05) (0.07)
------- ------- ------- -------- --------
Total distributions.......................... (0.07) (0.08) (0.06) (0.05) (0.07)
------- ------- ------- -------- --------
Net asset value, end of year....................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======== ========
Total return....................................... 7.74% 7.90% 5.90% 5.12% 6.75%
Ratios/Supplemental Data
Net assets, end of period (in 000's)............. $21,920 $17,421 $14,211 $ 16,875 $21,485
Ratio of expenses to average
net assets*+ .................................. 1.05% 1.28% 1.28% 1.24% 1.12%
Ratio of net investment
income to average net assets* ................. 7.49% 7.58% 5.74% 5.01% 6.55%
</TABLE>
* Average net assets have been computed based on the aggregate value of the
fund's daily net assets.
+ After voluntary waiver of advisory fees. Before voluntary waiver of
advisory fees, the ratio of expenses to average net assets was .97%, 1.06% and
1.02% for the years ended June 30, 1995, June 30, 1994 and June 30, 1993
respectively.
<PAGE>
<PAGE>
PERFORMANCE CALCULATIONS
From time to time, the Funds may advertise performance measures such as total
percentage increase, total return, and yield. Whenever total percentage increase
or yield is advertised, total return will be advertised as well. The following
is a brief explanation of how these figures are obtained.
Yields
With respect to the Asset Allocation Fund and the Tax Exempt Bond Fund, yield is
a measure of the total current income for the 30-day period ended on the given
date, stated as a percentage of the original investment. With respect to the
Money Market Fund, yield is a measure of the total current income for the 7-day
period ended on the given date. This percent is annualized and compounded, which
means that the income is assumed to be earned and reinvested over a one-year
period. Effective yield is computed in the same manner, except that income is
assumed to have been reinvested over a one-year period. Yield differs from total
percentage increase and total return since it only considers current income and
does not take into account gains or losses on securities held by a Fund.
With respect to the Tax Exempt Bond Fund, tax-equivalent yield is the yield
which would be required from a fund whose income is subject to Federal income
tax in order to equal the amount of after-tax income received by a shareholder
based on the tax exempt yield of this Fund. The rate simplifies the comparison
of yields of tax exempt funds with yields of taxable funds.
Total Percentage Increase
Total percentage increase is calculated for the specified periods of time by
assuming a hypothetical investment of $1,000 in a Fund's shares after deducting
the maximum sales charge of 3% (if applicable). Each dividend or other
distribution is treated as having been reinvested at net asset value on the
reinvestment date. The percentage increases stated are the percent that an
original investment would have increased during the applicable period.
Total Return
Total return is calculated in the same way as the total percentage increase
except that it is stated in terms of a level one-year compound rate of return
(all earnings reinvested on an annual basis) over the investment period.
Advertisements of the Funds' performance may also include the ending value of
the illustrated investment for the period stated. This is the amount that would
be received by a shareholder who sold all shares at the end of the stated
period.
The inclusion of the maximum sales charge in the above computations results in
lower performance figures than would be obtained by excluding this sales charge.
The above performance measures are based on historical earnings and are not
intended to indicate future performance.
WHAT ARE THE FUNDS
The Funds are companies engaged in the business of investing the money of their
shareholders. Each Fund sells shares of its own stock to the public and invests
the proceeds in the securities of other companies. In other words, when you
purchase shares of a Fund, your money is pooled with that of others and is
invested in a professionally managed investment portfolio.
The Funds are technically known as diversified, open-end management investment
companies, meaning that they are:
"Diversified" because each invests in securities of different companies and
industries in an attempt to spread and reduce the risks inherent in all
investing. Diversification, however, does not imply that an investor's capital
will increase or that the purchase of Fund shares involves a preservation of
original capital and a protection against loss in value.
"Open-end" in that a Fund continually offers new shares for sale to the public
and is legally obligated to buy back such shares held by an investor and pay
the investor the next determined net asset value of the shares. This open-end
type of investment company is commonly called a mutual fund.
"Management Investment Company" because upon the advice of professional
investment managers, a Fund continuously reviews, and from time to time
changes, its portfolio holdings in an effort to achieve its investment
objective.
The Funds are separate Maryland corporations. The Growth Fund (IAA Trust Growth
Fund, Inc.) was organized on August 5, 1965. The Asset Allocation Fund (IAA
Trust Asset Allocation Fund, Inc.; formerly IAA Trust Income Fund, Inc.) and the
Tax Exempt Bond Fund (IAA Trust Tax Exempt Bond Fund, Inc.) were organized on
March 20, 1978. The Money Market Fund (IAA Trust Money Market Fund, Inc.) was
organized on April 14, 1981.
Investment companies operate pursuant to their objectives and policies and such
objectives and policies may differ from fund to fund. The Funds' investment
objectives and policies are set forth below.
The value of each Fund's shares (with the exception of the Money Market Fund)
fluctuate because the value of the securities in which each Fund invests
fluctuate. When the Funds sell portfolio securities, they may realize a gain or
a loss depending on whether they sell them for more or less than their cost. The
Funds will earn dividend or interest income to the extent that they receive
dividends or interest from their investments.
WHAT ARE THE FUNDS' INVESTMENT OBJECTIVES
THE GROWTH FUND:
The investment objective of the Growth Fund is capital growth. Current income
through the receipt of interest or dividends from investments will be secondary
to this Fund's goal of capital growth. Thus, the Fund is not intended for
investors whose principal objective is dividend income. Achievement of the
Fund's objective cannot be assured, but through professional management, the
Fund will seek to obtain results which are in keeping with its objective.
Although the portfolio of the Fund may be restructured at times for temporary
defensive purposes, it is the intention of the Board of Directors that no
material change of a permanent nature will be made in the Fund's investment
objective without the approval of the holders of at least a majority of the
Fund's outstanding capital stock.
The Growth Fund's investment policy is to invest principally in common stocks
and securities with equity characteristics, such as convertible preferred stocks
and convertible bonds; however, it may invest fully in common stocks or
securities with equity characteristics. To a lesser extent, the Fund may also
invest in bonds and preferred stocks when deemed prudent. The Fund may adopt a
temporary defensive position when it deems advisable due to a change in economic
conditions. This may be done by establishing and maintaining a reserve in: cash;
short-term U.S. Government bonds, bills or notes; prime commercial paper of
major companies; and certificates of deposit issued by major banks, for the
purpose of providing working capital, funds for possible redemption of shares,
or to enable the Fund to take advantage of buying opportunities. The adoption of
any such temporary defensive position will be on a temporary basis and will not
be utilized to change the long-term investment objective and policies of the
Fund. The word "temporary" as used in the preceding sentence should not be read
as having a fixed meaning in the sense that it designates any fixed period of
time.
When investing in fixed income securities, the Growth Fund's management intends
to invest in those securities which are rated at the time of purchase within the
four highest grades assigned by Moody's Investors Service, Inc. ("Moody's")
("Aaa", "Aa", "A", or "Baa") or Standard & Poor's Corporation ("S&P") ("AAA",
"AA", "A", or "BBB"); or in those securities, although not rated as a matter of
policy by either of the above two ratings services, which are considered by
management to have investment quality comparable to securities that fall within
the four highest grades assigned by the above two rating services. While fixed
income securities rated "Baa" or "BBB" are regarded as having an adequate
capacity to pay principal and interest, such securities lack outstanding
investment characteristics and in fact have speculative characteristics as well
which may be more sensitive to economic change than higher rated bonds. In the
event a fixed income security held by the Fund is downgraded below a "Baa" or
"BBB" rating, the Investment Adviser (IAA Trust Company) shall promptly reassess
the risks involved and take such actions as it determines are in the best
interests of the Fund and its shareholders. See the Appendix to the Statement of
Additional Information for explanations on applicable ratings.
In seeking capital growth, the Growth Fund will constantly search for the best
values and will make investment decisions based primarily upon fundamental
valuation of securities. The Fund will dispose of securities held whenever, in
the judgment of its management, such securities do not represent the best values
for the purpose of achieving the Fund's objective. This can occur for a variety
of reasons, such as an increase in the market value of a particular security to
what is believed to be an unreasonably high level, a change in trend of growth
which was used as a basis of purchase, what is believed to be a vulnerable
general level of security prices, and other such circumstances bearing on the
desirability of continuing a given investment. Under ordinary circumstances,
securities will be held for periods of time sufficient to qualify for long-term
capital gain treatment for Federal income tax purposes.
The Growth Fund may purchase or acquire securities of other investment companies
on the open market if immediately after such purchase or acquisition, the Fund
would not own in the aggregate: (1) more than 3% of the total outstanding voting
stock of such other investment company; (2) securities issued by such other
investment company having an aggregate value in excess of 5% of the value of the
Fund's total assets; or (3) securities issued by such other investment company
and all other investment companies having an aggregate value in excess of 10% of
the value of the Fund's total assets. By investing in another registered
investment company, there may be a duplication in fees and expenses. The Fund
will only invest in repurchase agreements of domestic banks maturing in seven
days or less and will not invest in repurchase agreements of broker-dealers. See
"REPURCHASE AGREEMENTS" for applicable risk disclosure statements and the
Appendix to the Funds' Statement of Additional Information. Repurchase
agreements create a risk for a Fund which invests in such instruments issued by
a party which subsequently initiates bankruptcy proceedings. While the Fund has
a right to dispose of the collateral securities and, therefore, views such risk
as minimal, there is a risk that the Fund may suffer a loss upon the disposition
of the collateral securities due to a delay in exercising such right. There is
an inverse relationship between interest rates and the price of debt securities
and therefore, the net asset value of the Fund will fluctuate accordingly to the
extent that it holds debt. The overall flexibility discussed in this paragraph
is of major importance to the Fund's investment policies. The investment
policies set forth in this paragraph are non-fundamental and therefore may be
changed by the Board of Directors.
THE ASSET ALLOCATION FUND:
The primary investment objective of the Asset Allocation Fund is growth of
capital with current income. The Fund seeks to achieve its objective by
following an asset allocation strategy utilizing a wide range of equity, debt,
and money market securities. Asset classes and securities strategies selected
will be those that the Investment Adviser believes offer the greatest potential
for maximizing total return.
Income and capital appreciation will be derived from the Asset Allocation Fund's
investment in common stocks and fixed income securities consisting of bonds,
preferred stocks, and short-term obligations. Short-term obligations are
instruments maturing in one year or less (measured from the time of investment)
and include: obligations of or guaranteed by the U.S. Government, its agencies
or instrumentalities; certificates of deposit of domestic banks; commercial
paper rated in the top two grades -- "Prime-1" or "Prime-2" by Moody's or "A-1"
or "A-2" by S&P; non-convertible corporate debt securities such as bonds, notes
and debentures which are rated in the top two grades -- "Aaa" or "Aa" by Moody's
or "AAA" or "AA" by S&P; negotiable certificates of deposit of savings and loan
associations; and repurchase agreements. Fixed income securities may have equity
conversion privileges or other equity features, including attached warrants or
rights.
When investing in fixed income securities, the Asset Allocation Fund's
management intends to invest in those securities which are rated at the time of
purchase within the four highest grades assigned by Moody's ("Aaa", "Aa", "A",
or "Baa") or S&P ("AAA", "AA", "A", or "BBB"); or in those securities, although
not rated as a matter of policy by either of the above two rating services,
which are considered by management to have investment quality comparable to
securities that fall within the four highest grades assigned by the above two
rating services. While fixed income securities rated "Baa" or "BBB" are regarded
as having an adequate capacity to pay principal and interest, such securities
lack outstanding investment characteristics and in fact have speculative
characteristics as well which may be more sensitive to economic change than
higher rated bonds. In the event a fixed income security held by the Fund is
downgraded below a "Baa" or "BBB" rating, the Investment Adviser shall promptly
reassess the risks involved and take such actions as it determines to be in the
best interest of the Fund and its shareholders. See the Appendix to the
Statement of Additional Information for explanations on applicable ratings.
Although it is not the intent of the Asset Allocation Fund's management to trade
for short-term profits, purchases and sales of securities will be made whenever
management deems it would contribute to the achievement of the Fund's objective.
The Fund will be invested in securities representing a number of different
industry classifications and does not intend to concentrate its investments in a
particular industry. In addition to domestic securities, the Fund may invest in
Canadian and other foreign securities, both corporate and government, which are
payable in United States dollars. To the extent that the Fund does invest in
foreign securities, such investments may be subject to special risks, such as
changes in the administration or economic and monetary policies of foreign
governments. However, the Fund will not invest as much as 5% of its total assets
in foreign securities.
The Asset Allocation Fund may purchase or acquire securities of other investment
companies on the open market if immediately after such purchase or acquisition,
the Fund would not own in the aggregate: (1) more than 3% of the total
outstanding voting stock of such other investment company; (2) securities issued
by such other investment company having an aggregate value in excess of 5% of
the value of the Fund's total assets; or (3) securities issued by such other
investment company and all other investment companies having an aggregate value
in excess of 10% of the value of the Fund's total assets. By investing in
another registered investment company, there may be a duplication in fees and
expenses. The Fund will only invest in repurchase agreements of domestic banks
maturing in seven days or less and will not invest in repurchase agreements of
broker-dealers. See "REPURCHASE AGREEMENTS" for applicable risk disclosure
statements and the Appendix to the Funds' Statement of Additional Information.
Repurchase agreements create a risk for a Fund which invests in such instruments
issued by a party which subsequently initiates bankruptcy proceedings. While the
Fund has a right to dispose of the collateral securities and, therefore, views
such risk as minimal, there is a risk that the Fund may suffer a loss upon the
disposition of the collateral securities due to a delay in exercising such
right. There is an inverse relationship between interest rates and the price of
debt securities and therefore, the net asset value of the Fund will fluctuate
accordingly to the extent that it holds debt. The investment policies set forth
in this section are non-fundamental and, therefore, may be changed by the Board
of Directors.
THE TAX EXEMPT BOND FUND:
The investment objective of the Tax Exempt Bond Fund is to seek as high a level
of current interest income exempt from Federal income taxes as is available from
municipal bonds, consistent with the conservation of capital. The Fund's
investments (and thus the value of shares held by shareholders) will be subject
to the market fluctuations and risks inherent in all securities, and there can
be no assurance that the Fund's stated objective will be realized. Although the
investment objective of the Fund may be changed by the Board of Directors, it is
the intention of the Board that no material change of a permanent nature will be
made in the Fund's investment objective without the approval of the holders of
at least a majority of the Fund's outstanding capital stock.
The Tax Exempt Bond Fund will seek to achieve its objective by investing
substantially all of its assets in a diversified portfolio of debt obligations
issued by or on behalf of states, territories or possessions of the United
States and the District of Columbia or their political subdivisions, agencies
and instrumentalities, or multi-state agencies or authorities, the interest from
which is exempt from Federal income taxes in the opinion of bond counsel to the
issuers. Under normal market conditions, the Fund will maintain at least 80% of
its net assets in tax exempt municipal bonds (not including assets invested in
temporary investments for defensive purposes-- see following paragraph). This
80% limitation is considered a fundamental policy and may be changed only in the
manner by which other fundamental policies may be changed; by the approval of
the holders of at least a majority of the Fund's outstanding capital stock. The
Fund's assets will consist of: (1) municipal bonds which are rated at the time
of purchase within the four highest grades assigned by Moody's ("Aaa", "Aa",
"A", or "Baa") or S&P ("AAA", "AA", "A", or "BBB"), or in those municipal bonds,
although not rated as a matter of policy by either of the above two rating
services, which are considered by management to have investment quality
comparable to municipal bonds that fall within the four highest grades assigned
by the above two rating services (municipal bonds rated "Baa" or "BBB" have
speculative characteristics); (2) temporary investments as described below; and
(3) cash. While ratings at the time of purchase will determine which securities
may be acquired, a subsequent reduction in rating will not require the Fund to
dispose of the securities. No limitations are imposed as to the percentage of
the Fund's assets which may be invested among Moody's or S&P's highest four
ratings; however, the Fund will not invest more than 20% of its net assets
(measured at the time of investment) in municipal bonds which are not rated, or
in taxable investments, or in investments subject to the alternative minimum
tax.
Pending investment of proceeds from the sale of the Tax Exempt Bond Fund's
shares, the changing of portfolio composition, and from time to time when deemed
appropriate by the Investment Adviser for defensive purposes, the Fund may
invest in temporary investment securities. Temporary investment securities
consist of: (1) notes issued by or on behalf of municipal issuers backed by the
Federal Government; (2) notes of issuers having, at the time of purchase, an
outstanding issue of municipal bonds rated within the four highest grades of
Moody's or S&P; (3) municipal notes rated at the time of purchase within the two
highest grades assigned by Moody's ("MIG-1" and "MIG-2"); (4) obligations of the
United States Government, its agencies or instrumentalities; (5) bonds, notes
and certificates rated within the four highest grades of Moody's or S&P; (6)
commercial paper rated within the two highest grades assigned by Moody's ("P- 1"
or "P-2") or by S&P ("A-1 or "A-2"); and (7) debt securities (including
repurchase agreements) issued or guaranteed by domestic banks having investment
quality, in management's opinion, comparable to debt securities of the type
described in category (5) above. The income from the securities described in
categories (4) through (7) above, is subject to Federal income taxes.
Consequently, interest income from temporary investments may be taxable to
shareholders as ordinary income. The investment policies set forth in this
paragraph are non-fundamental and therefore may be changed by the Board of
Directors.
The Tax Exempt Bond Fund may purchase or acquire securities of other investment
companies on the open market if immediately after such purchase or acquisition,
the Fund would not own in the aggregate: (1) more than 3% of the total
outstanding voting stock of such other investment company; (2) securities issued
by such other investment company having an aggregate value in excess of 5% of
the value of the Fund's total assets; or (3) securities issued by such other
investment company and all other investment companies having an aggregate value
in excess of 10% of the value of the Fund's total assets. By investing in
another registered investment company, there may be a duplication in fees and
expenses. The Fund will only invest in repurchase agreements of domestic banks
maturing in seven days or less and will not invest in repurchase agreements of
broker-dealers. See "REPURCHASE AGREEMENTS" for applicable risk disclosure
statements and the Appendix to the Funds' Statement of Additional Information.
There is an inverse relationship between interest rates and the price of debt
securities and therefore, the net asset value of the Fund will fluctuate
accordingly.
In general, municipal bonds purchased by the Tax Exempt Bond Fund are debt
obligations issued by states, territories and possessions of the United States
and the District of Columbia and their political subdivisions, agencies and
instrumentalities. They are issued to obtain funds for various public purposes,
including the construction of a wide range of public facilities such as:
airports; bridges; highways; hospitals; housing; mass transportation; schools;
streets; and water and sewer works. Other public purposes for which municipal
bonds may be issued include obtaining funds for general operating expenses, and
obtaining funds to lend to other public institutions and facilities. In
addition, certain types of industrial development bonds are issued by or on
behalf of public authorities to obtain funds to provide: privately-operated
housing facilities; airports; mass transit; industrial, port or parking
facilities; air or water pollution control facilities; and certain facilities
for water supply, gas, electricity, or sewage or solid waste disposal. Other
types of facilities and certain industrial development bonds, the proceeds of
which are used for the acquisition, construction, reconstruction or improvement
of or to provide equipment for privately-operated industrial or commercial
facilities, may qualify as municipal bonds, although current Federal tax laws
place substantial limitations on the size of such funds. Moreover, when an
industrial development bond is backed only by the assets and revenue of the
non-governmental user, then such non-governmental user is deemed to be the
issuer.
The two principal classifications of municipal bonds are "general obligation
bonds" and "revenue bonds". General obligation bonds are secured by the issuer's
pledge of its faith, credit and taxing power for the payment of principal and
interest. The taxes or special assessments that can be levied for the payment of
debt service may be limited or unlimited as to rate or amount. Revenue bonds are
payable only from the revenues derived from a particular facility or class of
facilities or, in some cases, from the proceeds of a special excise or other
specific revenue source, but not from the general taxing power. Tax exempt
industrial development bonds are in most cases revenue bonds and do not
generally carry the pledge of the credit of the insurer of such bonds. There
are, of course, variations in the security of municipal bonds, both within a
particular classification and between classifications. The Fund's portfolio may
consist of any combination of general obligation bonds, revenue bonds, and
industrial revenue bonds, and it can be expected that the ratios of such bonds
will vary from time to time.
Yields on municipal bonds are dependent on, among other things, general money
market conditions, conditions of the municipal bond market, size of a particular
offering, maturity of the obligation, the financial condition of the issuer, and
the rating of the issue. Additionally, the imposition of the Fund's management
fee, as well as other operating expenses, will have the effect of reducing the
yield to investors. Proposals have been introduced periodically before Congress
to restrict or eliminate the Federal income tax exemption for interest on
municipal bonds. Similar proposals may be introduced in the future. If such a
proposal was enacted, the availability of municipal bonds for investment by the
Fund and the value of the Fund's portfolio would be affected. In such event, the
Fund would reevaluate its objective and policies and consider recommending to
its shareholders changes in the structure of the Fund.
THE MONEY MARKET FUND:
The investment objective of the Money Market Fund is to earn as high a level of
current income as possible, consistent with maintaining liquidity and stability
of principal. In pursuing its objective, the Fund may not always purchase
securities offering the highest yield. The Fund will only invest in high-quality
rated securities or unrated securities determined by the Board of Directors to
be of high-quality and present minimum credit risk. There can be no assurance
that the Fund's stated objective will be realized. Although the investment
objective of the Fund may be changed by the Board of Directors, it is the
intention of the Board that no material change of a permanent nature will be
made in the Fund's investment objective without the approval of the holders of
at least a majority of the Fund's outstanding capital stock.
The Money Market Fund seeks to achieve its objective by investing in the
following types of money market instruments, which are maturing in one year or
less, measured from the time of investment:
Obligations of, or guaranteed by, the U.S. Government, its agencies or
instrumentalities.
Certificates of deposit of domestic banks in amounts (currently $100,000) that
are fully insured by The Federal Deposit Insurance Corporation ("The FDIC")
and, for larger amounts, bank certificates of deposit or bankers acceptances
of domestic banks having total assets in excess of $1 billion and which are
members of The FDIC. The Fund may purchase both negotiable and non-negotiable
certificates of deposit. Non-negotiable certificates of deposit are not
purchased or sold in a secondary trading market and must be held to maturity
unless, at the request of the Fund, the issuer agrees to redeem them earlier,
possibly at less than par. Accordingly, the Fund will not invest more than 10%
of its net assets in non-negotiable certificates of deposit or in other
illiquid, restricted securities so that this potential liquidity risk will be
minimal.
Commercial paper rated in the top grade by two nationally recognized
statistical rating organizations (NRSRO's) one of which must be either Moody's
Investors Service, Inc., or Standard & Poor's Corporation.
Non-convertible corporate debt securities such as bonds, notes and debentures
which are rated in the top grade -- "Aaa" by Moody's or "AAA" by S&P.
Negotiable certificates of deposit of savings and loan associations in amounts
(currently $100,000) that are fully insured by The FDIC.
Repurchase agreements of obligations which are suitable for investment under
the categories set forth above and issued by a member bank or certain
broker/dealers who have been approved by the Board of Directors and are
participating in the Federal Reserve System. The Fund will only invest in
repurchase agreements maturing in seven days or less. Repurchase agreements
create a risk for a Fund which invests in such instruments issued by a party
which subsequently initiates bankruptcy proceedings. While the Fund has a right
to dispose of the collateral securities and, therefore, views such risk as
minimal, there is a risk that the Fund may suffer a loss upon the disposition
of the collateral securities due to delay in exercising such right.
The Fund may purchase or acquire securities of other investment companies on
the open market if immediately after such purchase or acquisition, the Fund
would not own in the aggregate: (1) more than 3% of the total outstanding
voting stock of such other investment company; (2) securities issued by such
other investment company having an aggregate value in excess of 5% of the value
of the Fund's total assets; or (3) securities issued by such other investment
company and all other investment companies having an aggregate value in excess
of 10% of the value of the Fund's total assets. By investing in another
registered investment company, there may be a duplication in fees and expenses.
The investment policies set forth in this section for the Money Market Fund are
non-fundamental and, therefore, may be changed by the Board of Directors.
REPURCHASE AGREEMENTS
Repurchase agreements are transactions in which the Funds purchase a security
(usually a U.S. Government obligation) and simultaneously obtain the commitment
of the seller to repurchase the security at an agreed upon price on an agreed
upon date, usually not more than seven days from the date of purchase. The
resale price reflects the purchase price plus an agreed upon market rate of
interest which is unrelated to the coupon rate or maturity of the purchased
security. Such transactions afford an opportunity for a Fund to earn a return on
cash which is only temporarily available. The Fund's risk is limited to the
ability of the seller to pay the agreed upon sum upon the delivery date, but the
seller's obligation is in effect secured by the value of the underlying
security.
Still, there are certain risks involved with the use of certain repurchase
agreements. For example, if the seller should default on its obligation to
repurchase the securities, a Fund may experience delay or difficulties in
exercising its rights upon the securities held as collateral and might incur a
loss if the value of the securities should decline. A Fund also might incur
disposition costs in connection with liquidating the securities. While the Funds
acknowledge these risks, it is expected that they can be controlled through
careful monitoring procedures offered by the Funds' Investment Adviser.
WHO MANAGES THE FUNDS
The operations of each Fund are under the direction of a Board of Directors who
have been elected by the shareholders of each Fund. The Board meets regularly to
review the activities of the Officers, who are responsible for day to day
operations of the Funds. To assist the Directors and Officers in carrying out
their duties and responsibilities, the Funds have employed IAA Trust Company
("IAATC"), 808 IAA Drive, Bloomington, Illinois, as their Investment Adviser
under written Agreements which are renewable annually by the Funds' Board of
Directors or by votes of a majority of each Fund's outstanding voting
securities. Any such renewals must also be approved by the votes of a majority
of each Fund's Directors, who are not parties to the Agreement or interested
persons of any such party, cast in person at a meeting called for the purpose of
voting on such approvals. The Agreements may be terminated without penalty at
any time by the Board of Directors of a Fund, or by votes of the shareholders,
or by IAATC upon sixty days written notice, and they terminate automatically in
the event of their assignment. IAATC was organized on December 30, 1970 and has
no investment company clients other than the IAA Trust Mutual Funds discussed
herein. Illinois Agricultural Holding Co. owns all of the outstanding voting
securities of IAATC. Approximately 98% of the issued and outstanding voting
stock of the Illinois Agricultural Holding Co. is owned by the Illinois
Agricultural Association ("IAA"). IAA is an Illinois not-for-profit membership
corporation organized to promote the interest of agriculture.
IAATC, subject to the authority of the Board of the Funds, is generally
responsible for the overall management of the Funds' business. For these
services performed and expenses assumed, the Growth Fund and the Asset
Allocation Fund each pay IAATC an annual fee of approximately .75% of their
respective average daily net assets. These fees are considered higher than the
advisory fees paid by most other mutual funds; however, these fees are
comparable with those of other mutual funds with similar investment objectives.
The Tax Exempt Bond Fund and the Money Market Fund each pay IAATC an annual fee
of approximately .50% of their respective average daily net assets. All of these
fees are computed on a daily basis and are paid monthly. Neither IAATC nor any
company affiliated with it receives any brokerage commissions from the Funds,
as such business is transacted with non-affiliated broker-dealers.
The following persons who are Officers and/or Directors of the Funds also hold
positions with IAATC as indicated: Ronald R. Warfield, Director and President;
Wayne A. Brown, Senior Vice President--Investments; Gary E. Mede, Executive Vice
President; Richard M. Miller, Senior Vice President and Senior Trust Officer;
Rollie D. Moore, Director and Vice President; Paul M. Harmon, Assistant
Secretary; Jerome P. Weiss, Secretary and General Counsel; Robert W. Weldon,
Vice President--Finance and Treasurer; Richard F. Day, Controller.
<PAGE>
IAA TRUST FUNDS APPLICATION
1. AMOUNT INVESTED ($1,000 minimum for IAA Trust Money Market, $100 minimum for
other Funds)
FORM OF PAYMENT - INITIAL INVESTMENT [ ] IAA Trust Growth Fund
[ ] Check for $ enclosed - payable to FUND(s)
[ ] NAV Purchase [ ] Farm Bureau Member - Membership No. [ ] IAA Trust
Asset Allocation Fund
[ ] Customer of IAA Trust Company
[ ] Employee of IAA or affiliate [ ] IAA Trust Tax Exempt
Bond Fund
[ ] Broker/Dealer
[ ] My Dealer purchased of the FUND on [ ] IAA Trust Money Market
Fund
Shares Date
2. REGISTRATION (Please Print)
INDIVIDUAL *(Joint ownership with rights of survivorship unless otherwise
noted)
<TABLE>
<S> <C> <C>
First name Middle Initial Last Name
Social Security #
Jt. Owner First Name* Middle Initial Last Name
Social Security #
GIFT TO MINORS
Name of Custodian (name one only) As Custodian For
(name one only)
Under the Uniform Gift to Minors Act Minor's Social Security #
State
CORPORATIONS, PARTNERSHIPS, TRUSTS and OTHERS (complete Corporate Resolution)
Name of Corporation, Partnership, Trust or Other
Tax I.D. # Name of Trustee(s)
Date of Trust
Citizen of: [ ] United States [ ] Other (Please Indicate)
3. MAILING ADDRESS OF RECORD AND TELEPHONE NUMBER(S)
Street Address & Apt. # City State
Zip
( ) ( )
Residence Number Business Number
4. DISTRIBUTION OPTIONS (Please indicate one - Distributions will be reinvested
if no option is checked)
[ ] Automatic Compounding (dividends & capital gains in additional shares)
[ ] Cash Dividends (dividends in cash, capital gains in additional shares)
[ ] All Cash (dividends & capital gains in cash)
5. RIGHTS OF ACCUMULATION
I apply for Rights of Accumulation, reduced sales charges subject to the Agent's confirmation of the following holdings of
eligible load Funds of the FUND(s).
Fund Shareholder Account Number
6. SYSTEMATIC WITHDRAWAL PLAN (Minimum investment $5,000)
A check will be sent each [ ] month or [ ] quarter in the amount of $ to you at your address of record unless
otherwise noted.
Monthly minimum amount is $25.00.
7. TELEPHONE EXCHANGE and REDEMPTION OPTION
[ ] Permits exchanges between accounts with identical registrations.
[ ] I (we)authorize Fund/Plan Services to honor telephone instructions for
my(our) account. Neither the Fund nor Fund/Plan Services will be liable for
properly acting upon telephone instructions believed to be genuine.
Please attach a voided check on the Transfer account or complete below.
Name of Bank City State
Account Number [ ] Checking [ ] Savings Bank Routing Number (nine digits)
8. SIGNATURE AND CERTIFICATION
Required by Federal tax law to avoid 31% backup withholding: "By signing, I
certify under penalties of perjury that the social security or taxpayer
identification number entered above is correct and that I have not been
notified by the IRS that I am subject to backup withholding unless I have
checked the box below."
[ ] I am subject to backup withholding. Receipt of current prospectus is hereby acknowledged.
Signature [ ] Owner [ ] Custodian [ ] Trustee Date
Signature of Joint Owner (if applicable) Date
9. INVESTMENT DEALER INFORMATION
Firm Name Rep. Name & Number Authorized Signature
Street Address City State Zip
<PAGE>
AUTOMATIC INVESTMENT PLAN APPLICATION
1. Please tell us about yourself
First name Middle Initial Last Name
Social Security #
Jt. Owner First Name* Middle Initial Last Name
Social Security #
Street Address & Apt. # City State Zip
( ) ( )
Residence Number Business Number
2. Please tell us how to set up your Automatic Investment Plan
To: Fund/Plan Services, Inc.
Please start an Automatic Investment Plan for me and invest $ ($100 or more) on the
[ ] 10th [ ] 15th [ ] 20th of each month in shares of the IAA TRUST GROWTH FUND, INC.
Check one: [ ] I am in the process of establishing an account.
[ ] My account number is:
I understand that my ACH debit will be dated on the day of each month as
indicated above. I agree that if such debit is not honored upon presentation,
Fund/Plan Services, Inc. may discontinue this service and any share purchase
made upon deposit of such debit may be cancelled. I further agree that if the
net asset value of the shares purchased with such debit is less when said
purchase is cancelled than when the purchase was made, Fund/Plan Services, Inc.
shall be authorized to liquidate other shres or fractions thereof held in my
account to make up the deficiency. This Automatic Investment Plan may be
discontinued by Fund/Plan Services, Inc. upon 30 days written notice or at any
time by the investor by written notice to Fund/Plan Services, Inc. which is
received no later than five (5) business days prior to the above designated
investment date.
Signature of Owner Date
Signature of Joint Owner (if applicable) Date
3. Please authorize the Automatic Investment Plan (a voided check should be attached)
Name of your Bank
Account Number
Address or Branch where account is maintained
City State Zip
As a convenience to me, please honor ACH debits on my account drawn by Fund/Plan Services, Inc. National Westminster Bank NJ and
payable to the Fund designated below:
IAA TRUST GROWTH FUND, INC.
I agree that your rights with respect to each debit shall be the same as if it
were a check drawn upon you and signed personally by me. This authority shall
remain in effect until you receive written notice from me changing its terms or
revoking it, and until you actually receive such notice, I agree that you shall
be fully protected in honoring any such debit.
I further agree that if any debit be dishonored, whether with or without
cause or whether intentionally or inadvertently, you shall be under no liability
whatsoever.
Note: Your bank must be able to accept ACH transactions Depositor's Signature
and/or be a member of an ACH association in order for you to use this service.
To: The Bank named above:
So that you may comply with your Depositor's request and authorization, IAA
TRUST GROWTH FUND, INC. agrees as follows:
1. To indemnify and hold you harmless from any loss you may suffer arising or in
connection with a payment by you, of a debit drawn by Fund/Plan Services, Inc.
to the order of IAA Trust Growth Fund, Inc. designated on the account of your
depositor(s) executing the authorization including any costs or expenses
reasonably incurred in connection with such loss. IAA Trust Growth Fund, Inc.
will not, however, indemnify you against any loss due to your payment of any
debit generated against insufficient funds.
2. To refund to you any amount erroneously paid by you to Fund/Plan Services,
Inc. on any such debit if claim for the amount of such erroneous payment is made
by you within 3 months of the date of such debit on which erroneous payment was
made.
<PAGE>
AUTOMATIC INVESTMENT PLAN APPLICATION
1. Please tell us about yourself
First name Middle Initial Last Name
Social Security #
Jt. Owner First Name* Middle Initial Last Name
Social Security #
Street Address & Apt. # City State Zip
( ) ( )
Residence Number Business Number
2. Please tell us how to set up your Automatic Investment Plan
To: Fund/Plan Services, Inc.
Please start an Automatic Investment Plan for me and invest $ ($100 or more) on the
[ ] 10th [ ] 15th [ ] 20th of each month in shares of the IAA TRUST ASSET ALLOCATION FUND, INC.
Check one: [ ] I am in the process of establishing an account.
[ ] My account number is:
I understand that my ACH debit will be dated on the day of each month as
indicated above. I agree that if such debit is not honored upon presentation,
Fund/Plan Services, Inc. may discontinue this service and any share purchase
made upon deposit of such debit may be cancelled. I further agree that if the
net asset value of the shares purchased with such debit is less when said
purchase is cancelled than when the purchase was made, Fund/Plan Services, Inc.
shall be authorized to liquidate other shres or fractions thereof held in my
account to make up the deficiency. This Automatic Investment Plan may be
discontinued by Fund/Plan Services, Inc. upon 30 days written notice or at any
time by the investor by written notice to Fund/Plan Services, Inc. which is
received no later than five (5) business days prior to the above designated
investment date.
Signature of Owner Date
Signature of Joint Owner (if applicable) Date
3. Please authorize the Automatic Investment Plan (a voided check should be attached)
Name of your Bank
Account Number
Address or Branch where account is maintained
City State Zip
As a convenience to me, please honor ACH debits on my account drawn by Fund/Plan Services, Inc. National Westminster Bank NJ and
payable to the Fund designated below:
IAA TRUST ASSET ALLOCATION FUND, INC.
I agree that your rights with respect to each debit shall be the same as if it
were a check drawn upon you and signed personally by me. This authority shall
remain in effect until you receive written notice from me changing its terms or
revoking it, and until you actually receive such notice, I agree that you shall
be fully protected in honoring any such debit.
I further agree that if any debit be dishonored, whether with or without
cause or whether intentionally or inadvertently, you shall be under no liability
whatsoever. Note: Your bank must be able to accept ACH transactions Depositor's
Signature and/or be a member of an ACH association in order for you to use this
service.
To: The Bank named above:
So that you may comply with your Depositor's request and authorization, IAA
TRUST ASSET ALLOCATION FUND, INC. agrees as follows:
1. To indemnify and hold you harmless from any loss you may suffer arising or in
connection with a payment by you, of a debit drawn by Fund/Plan Services, Inc.
to the order of IAA Trust Asset Allocation Fund, Inc. designated on the account
of your depositor(s) executing the authorization including any costs or expenses
reasonably incurred in connection with such loss. IAA Trust Asset Allocation
Fund, Inc. will not, however, indemnify you against any loss due to your payment
of any debit generated against insufficient funds.
2. To refund to you any amount erroneously paid by you to Fund/Plan Services,
Inc. on any such debit if claim for the amount of such erroneous payment is made
by you within 3 months of the date of such debit on which erroneous payment was
made.
AUTOMATIC INVESTMENT PLAN APPLICATION
1. Please tell us about yourself
First name Middle Initial Last Name
Social Security #
Jt. Owner First Name* Middle Initial Last Name
Social Security #
Street Address & Apt. # City State Zip
( ) ( )
Residence Number Business Number
2. Please tell us how to set up your Automatic Investment Plan
To: Fund/Plan Services, Inc.
Please start an Automatic Investment Plan for me and invest $ ($100 or more) on the
[ ] 10th [ ] 15th [ ] 20th of each month in shares of the IAA TRUST TAX EXEMPT BOND FUND, INC.
Check one: [ ] I am in the process of establishing an account.
[ ] My account number is:
I understand that my ACH debit will be dated on the day of each month as
indicated above. I agree that if such debit is not honored upon presentation,
Fund/Plan Services, Inc. may discontinue this service and any share purchase
made upon deposit of such debit may be cancelled. I further agree that if the
net asset value of the shares purchased with such debit is less when said
purchase is cancelled than when the purchase was made, Fund/Plan Services, Inc.
shall be authorized to liquidate other shres or fractions thereof held in my
account to make up the deficiency. This Automatic Investment Plan may be
discontinued by Fund/Plan Services, Inc. upon 30 days written notice or at any
time by the investor by written notice to Fund/Plan Services, Inc. which is
received no later than five (5) business days prior to the above designated
investment date.
Signature of Owner Date
Signature of Joint Owner (if applicable) Date
3. Please authorize the Automatic Investment Plan (a voided check should be attached)
Name of your Bank
Account Number
Address or Branch where account is maintained
City State Zip
As a convenience to me, please honor ACH debits on my account drawn by Fund/Plan
Services, Inc. National Westminster Bank NJ and payable to the Fund designated
below:
IAA TRUST TAX EXEMPT BOND FUND, INC.
I agree that your rights with respect to each debit shall be the same as if it
were a check drawn upon you and signed personally by me. This authority shall
remain in effect until you receive written notice from me changing its terms or
revoking it, and until you actually receive such notice, I agree that you shall
be fully protected in honoring any such debit.
I further agree that if any debit be dishonored, whether with or without cause
or whether intentionally or inadvertently, you shall be under no liability
whatsoever.
Note: Your bank must be able to accept ACH transactions Depositor's Signature
and/or be a member of an ACH association in order for you to use this service.
To: The Bank named above:
So that you may comply with your Depositor's request and authorization, IAA
TRUST TAX EXEMPT BOND FUND, INC. agrees as follows:
1. To indemnify and hold you harmless from any loss you may suffer arising or in
connection with a payment by you, of a debit drawn by Fund/Plan Services, Inc.
to the order of IAA Trust Tax Exempt Bond Fund, Inc. designated on the account
of your depositor(s) executing the authorization including any costs or expenses
reasonably incurred in connection with such loss. IAA Trust Tax Exempt Bond
Fund, Inc. will not, however, indemnify you against any loss due to your payment
of any debit generated against insufficient funds.
2. To refund to you any amount erroneously paid by you to Fund/Plan Services,
Inc. on any such debit if claim for the amount of such erroneous payment is made
by you within 3 months of the date of such debit on which erroneous payment was
made.
AUTOMATIC INVESTMENT PLAN APPLICATION
1. Please tell us about yourself
First name Middle Initial Last Name
Social Security #
Jt. Owner First Name* Middle Initial Last Name
Social Security #
Street Address & Apt. # City State Zip
( ) ( )
Residence Number Business Number
2. Please tell us how to set up your Automatic Investment Plan
To: Fund/Plan Services, Inc.
Please start an Automatic Investment Plan for me and invest $ ($100 or more) on the
[ ] 10th [ ] 15th [ ] 20th of each month in shares of the IAA TRUST MONEY MARKET FUND, INC.
Check one: [ ] I am in the process of establishing an account.
[ ] My account number is:
I understand that my ACH debit will be dated on the day of each month as
indicated above. I agree that if such debit is not honored upon presentation,
Fund/Plan Services, Inc. may discontinue this service and any share purchase
made upon deposit of such debit may be cancelled. I further agree that if the
net asset value of the shares purchased with such debit is less when said
purchase is cancelled than when the purchase was made, Fund/Plan Services, Inc.
shall be authorized to liquidate other shres or fractions thereof held in my
account to make up the deficiency. This Automatic Investment Plan may be
discontinued by Fund/Plan Services, Inc. upon 30 days written notice or at any
time by the investor by written notice to Fund/Plan Services, Inc. which is
received no later than five (5) business days prior to the above designated
investment date.
Signature of Owner Date
Signature of Joint Owner (if applicable) Date
3. Please authorize the Automatic Investment Plan (a voided check should be attached)
Name of your Bank
Account Number
Address or Branch where account is maintained
City State Zip
As a convenience to me, please honor ACH debits on my account drawn by Fund/Plan
Services, Inc. National Westminster Bank NJ and payable to the Fund designated
below:
IAA TRUST MONEY MARKET FUND, INC.
I agree that your rights with respect to each debit shall be the same as if it
were a check drawn upon you and signed personally by me. This authority shall
remain in effect until you receive written notice from me changing its terms or
revoking it, and until you actually receive such notice, I agree that you shall
be fully protected in honoring any such debit.
I further agree that if any debit be dishonored, whether with or without cause
or wheter intentionally or inadvertently, you shall be under no liability
whatsoever.
Note: Your bank must be able to accept ACH transactions
Depositor's Signature and/or be a member of an ACH association in order for you to use this service.
To: The Bank named above:
So that you may comply with your Depositor's request and authorization, IAA
TRUST MONEY MARKET FUND, INC. agrees as follows:
1. To indemnify and hold you harmless from any loss you may suffer arising or in
connection with a payment by you, of a debit drawn by Fund/Plan Services, Inc.
to the order of IAA Trust Money Market Fund, Inc. designated on the account of
your depositor(s) executing the authorization including any costs or expenses
reasonably incurred in connection with such loss. IAA Trust Money Market Fund,
Inc. will not, however, indemnify you against any loss due to your payment of
any debit generated against insufficient funds.
2. To refund to you any amount erroneously paid by you to Fund/Plan Services,
Inc. on any such debit if claim for the amount of such erroneous payment is made
by you within 3 months of the date of such debit on which erroneous payment was
made.
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION OF FUNDS' PERFORMANCE
THE GROWTH FUND:
IAA TRUST GROWTH FUND vs. STANDARD & POOR'S INDEX
[GRAPH]
<TABLE>
<CAPTION>
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Growth $ 9,700 $12,450 $14,286 $13,331 $16,005 $18,579 $19,577 $20,405 $22,794 $22,242 $28,176
S&P's 500 10,000 17,001 21,266 19,799 23,863 27,776 29,828 33,844 38,335 38,876 49,010
</TABLE>
The above graph does reflect the impact of sales charges (if applicable) on
purchases. The maximum sales charge is currently 3.00%.
The net asset value of the Growth Fund closed the fiscal year on June 30, 1995
at $17.23 per share. The figures below show historical compound annual returns
of Fund shares with dividends reinvested.
<TABLE>
<CAPTION>
1 Year 5 Years 10 Years
------ ------- --------
<S> <C> <C> <C>
Without Sales Charges 26.68% 8.68% 11.30%
Current Maximum Sales Charges Deducted 22.87% 8.01% 10.96%
</TABLE>
These annual returns are for prior years' performance. Returns in future periods
cannot be guaranteed, and the value of Fund shares can fluctuate either above or
below their original cost.
<PAGE>
Bruce Finks, Investment Officer for the Growth Fund: Earned a B.S.
in Business Administration from Illinois State University in
Normal in 1976, and is also a Chartered Financial Analyst. Mr.
Finks is responsible for the management of common stock portfolios
for individual and institutional clients and has been with IAA
Trust Company since 1992, following fifteen years of investment
management experience with banking organizations.
For the year ending June 30, 1995, the Growth Fund had a total return of 26.68%
versus 26.07% for the S&P 500. According to Lipper Analytical, the average
growth fund returned 21.80% over the same period of time. The Growth Fund
outperformed the index and its peer group due to overweighting of the Technology
and Finance sectors and underweighting Cyclicals and Staples.
<PAGE>
THE ASSET ALLOCATION FUND:
IAA ASSET ALLOCATION FUND vs. MERRILL LYNCH CORPORATE AND GOVERNMENT
BOND MASTER INDEX & LIPPER-BALANCED FUNDS INDEX
[GRAPH]
<TABLE>
<CAPTION>
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Asset Allocation $ 9,700 $14,551 $15,121 $16,098 $17,770 $18,928 $20,720 $23,173 $25,394 $25,574 $29,740
Merrill Lynch 10,000 15,842 16,585 17,794 20,032 21,413 23,629 26,978 30,514 30,463 34,311
Lipper-balanced 10,000 17,120 19,561 18,447 21,205 23,356 25,299 28,794 32,858 33,116 38,411
</TABLE>
The above graph does reflect the impact of sales charges (if applicable) on
purchases. The maximum sales charge is currently 3.00%.
The annualized total returns for the Asset Allocation Fund for the period ended
June 30, 1995 are as follows:
<TABLE>
<CAPTION>
1 Year 5 Years 10 Years
------ ------- --------
<S> <C> <C> <C>
Without Sales Charges 16.29% 9.46% 9.39%
Current Maximum Sales Charges Deducted 12.83% 8.79% 9.06%
</TABLE>
<PAGE>
John Jacobs, Investment Officer for the Asset Allocation Fund:
Earned a B.S. in Business and Finance at Illinois Wesleyan
University in Bloomington. Mr. Jacobs is also a Chartered
Financial Analyst, and has served as a member of IAA Trust
Company's Investment Committee. Prior to joining the Company in
1975, he was an account executive for one of the leading national
brokerage firms.
Michael E. Marks: Earned his B.S. in Business Administration from
Washington University in St. Louis, his M.B.A. from Indiana
University in Bloomington, and is currently pursuing the Chartered
Financial Analyst certification. Prior to graduate school, he was
a management consultant for Price Waterhouse's Strategic
Consulting Group. Mr. Marks joined IAA Trust Company in 1993 and
manages the equity portion of the Asset Allocation Fund, and
the international Common Trust Funds and a number of trust
accounts.
Over the past year, the Asset Allocation Fund had a return of 16.29%, in line
with the Lipper Flexible Fund Index which returned 16.26%. The returns for both
bonds and stocks were quite good for this period. Performance was slightly
hindered by holding short-term reserves as the Fund awaited opportunities to
invest long-term. The Fund's performance over the past year also closely tracked
with the Lipper Balanced Fund Index which returned 15.99%.
<PAGE>
THE TAX EXEMPT BOND FUND:
IAA TAX EXEMPT BOND FUND vs. LEHMAN MUNI GENERAL BOND INDEX
[GRAPH]
<TABLE>
<CAPTION>
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Tax Exempt $ 9,700 $13,422 $14,251 $15,347 $16,905 $17,791 $19,222 $21,155 $23,099 $22,669 $24,371
Lehman Muni 10,000 14,687 15,953 17,137 19,089 20,389 22,226 24,842 27,813 27,860 30,317
</TABLE>
Note: The IAA Trust Tax Exempt Bond Fund's portfolio does not mirror the
composition of the Lehman Index.
The above graph does reflect the impact of sales charges (if applicable) on
purchases. The maximum sales charge is currently 3.00%.
The annualized total returns for the Tax Exempt Bond Fund for the period ended
June 30, 1995 are as follows:
<TABLE>
<CAPTION>
1 Year 5 Years 10 Years
------ ------- --------
<S> <C> <C> <C>
Without Sales Charges 7.51% 6.50% 7.66%
Current Maximum Sales Charges Deducted 4.32% 5.84% 7.34%
</TABLE>
These returns assume all dividends and capital gains distributions were
reinvested and the maximum sales charge applied on initial investments. Although
the Fund's income is generally exempt from Federal income taxes, it may, under
certain circumstances, be subject to state income taxation. See "INCOME
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS, AND TAXES".
<PAGE>
Mary S. Guinane, Investment Officer for the Tax
Exempt Bond Fund: Earned a M.B.A. at Illinois State University and
a B.A. in Psychology and Sociology at St. Ambrose College. Ms.
Guinane has been with IAA Trust Company since 1981.
For the year ended June 30, 1995, the Tax Exempt Bond Fund had a total return of
7.51%. Over the same period, the Lehman Municipal Bond Index had a total return
of 8.82%. The Lehman Index is an unmanaged list of long-term investment-grade
tax-exempt bonds. Though the Fund's duration is approximately identical, the
Index has a more barbelled structure, with a greater emphasis on longer-term
bonds. Those longer-term bonds had greater price appreciation since the first of
the year when municipal interest rates began their decline. Also, looking at
sector returns, the Index has a larger exposure than the Fund to some riskier
sectors that performed very well. The Index also does not take into account
brokerage commissions or other costs.
Note: The IAA Trust Tax Exempt Bond Fund's portfolio does not mirror the
composition of the Lehman Index.
THE MONEY MARKET FUND:
Robert L. Sammer, BS manages the IAA Money Market Fund. Bob
received his bachelor of science degree in finance from Illinois
State University in 1988 and is currently pursuing his MBA from
the same institution. After working as a trust administrator for
Independent Trust Corporation in Lombard, Illinois, he joined IAA
Trust Company in 1991. Here, he has served as client services
coordinator, corporate retirement and agency accounts coordinator
and, now investment analyst.
<PAGE>
Fund/Plan Services, Inc.
Fund/Plan Services, Inc. ("FPS"), #2 West Elm Street, Conshohocken, Pennsylvania
19428, is the Funds' Transfer and Dividend Disbursing Agent and as such performs
all shareholder services for the Funds. The Funds have also entered into
Agreements with FPS under which FPS provides accounting and administration
services.
Administration services include all administrative services except those
relating to the investment portfolios of the Funds, the distribution of the
Funds, and the maintenance of the Funds' financial records. The fees for
administrative services are based on a declining percentage of each Fund's
average net assets, beginning at .0015% of the first $50,000,000 of average net
assets. However, the Asset Allocation Fund, the Tax Exempt Bond Fund, and the
Money Market Fund are each required to pay a minimum annual fee of $10,000 and
the Growth Fund is required to pay a minimum annual fee of $50,000 for such
services.
The Funds each pay a minimum accounting fee of $25,000 and pay additional
accounting fees, based on declining percentages of their respective average net
assets in excess of $10,000,000. There are no direct or indirect relationships
between Fund/Plan Services, Inc. and the Funds or IAA Trust Company.
WHO DISTRIBUTES THE FUNDS' SHARES
Fund/Plan Broker Services, Inc. ("FPBS") serves as the Distributor for the
Funds on a best efforts basis, pursuant to various Underwriting Agreements dated
August 1, 1995. The Distributor is an affiliated company of Fund/Plan Services,
Inc. ("FPS"), the Funds' servicing agent, inasmuch as both the Distributor and
FPS are under common ownership. The Distributor receives that portion of the
applicable sales charge which is not re-allowed to the dealers who sell shares
of the Growth Fund, the Asset Allocation Fund, and the Tax Exempt Bond Fund.
There is no sales charge associated with the sale of shares of the Money Market
Fund. See "HOW TO BUY SHARES". The Distributor retains the entire sales charge
on all initial and subsequent investments in accounts with no designated dealer
of record.
DISTRIBUTION PLANS
The shareholders of the Growth Fund, the Asset Allocation Fund, and the Tax
Exempt Bond Fund have each adopted a Plan of Distribution (the "Plan") pursuant
to Rule 12b-1 under the Investment Company Act of 1940. The Money Market Fund
does not participate in any plan pursuant to this Rule. The Plan permits the
participating Funds to pay certain expenses associated with the distribution of
their shares. The Plan provides that the participating Funds will reimburse the
Distributor for actual distribution and shareholder servicing expenses incurred
by the Distributor not exceeding, on an annual basis, 0.25% of each
participating Fund's average daily net assets. Amounts expended by the
Distributor, but not reimbursed by each participating Fund's Plan, will not be a
continuing liability of such Fund in subsequent years. Because the Funds
reimburse the Distributor only for actual expenditures, the Distributor realizes
no profit from the 12b-1 Plan. The Plan may be terminated at any time and the
Funds shall have no liability for expenses that were not reimbursed as of the
date of termination.
All such payments made pursuant to the Plan shall be made for the purpose of
promoting the sale of shares or other such distribution-related expenses,
including any distribution or service fees paid to securities dealers,
investment advisers, financial planners, and others, who have executed a
distribution agreement with the Distributor. The maximum amount which will be
paid to such parties by the Distributor is 0.25% (on an annual basis) of a
participating Fund's average net assets, owned by client of that party.
Management may choose to pay a lesser amount.
CAPITAL STOCK
There are no conversion or preemptive rights in connection with any shares of
the Funds, nor are there cumulative voting rights with respect to the shares of
any of the Funds. Each of the Fund's shares has equal voting rights. Each issued
and outstanding share of each Fund is entitled to participate equally in
dividends and distributions declared by such Fund and in net assets of such Fund
upon liquidation or dissolution remaining after satisfaction of outstanding
liabilities.
All issued and outstanding shares of each Fund will be fully paid and
nonassessable and will be redeemable at the net asset value per share. The
interests of shareholders in the Funds will not, unless specifically requested
in writing by a shareholder, be evidenced by a certificate or certificates
representing shares of a Fund.
The authorized capitalizations of the Growth Fund, the Asset Allocation Fund,
and the Tax Exempt Bond Fund consist of 10,000,000 shares for each of these
Funds, each Fund having a par value of $1.00 per share.
The authorized capitalization of the Money Market Fund consists of 250,000,000
shares of the par value of $0.10 per share. 100,000,000 of this Fund's shares
are designated as Class "A" common stock, 50,000,000 of its shares are
designated as Class "B" common stock, and 100,000,000 in such class as the Board
of Directors may, from time to time, determine. Currently, the Fund has
registered and only issues Class "A" common stock and the assets received by the
Fund from the sale of such shares will be used to establish its Class "A" common
stock portfolio.
Country Life Insurance Company
As of October 2, 1995, 439,945 shares or 10.38% of the issued and outstanding
capital stock of the Growth Fund were owned by Country Life Insurance Company
("Country Life"), Bloomington, Illinois. Country Life's capital stock enables it
to influence the outcome of shareholder votes. Country Life is organized in
Illinois. Substantially all issued and outstanding stock of Country Life is
owned by Illinois Agricultural Holding Co.
As of October 2, 1995, 247,948 shares or 31.46% of the issued and outstanding
capital stock of the Asset Allocation Fund were owned by Country Life Insurance
Company ("Country Life"), Bloomington, Illinois. Country Life's capital stock
enables it to strongly influence the outcome of shareholder votes. Country Life
is organized in Illinois. Substantially all issued and outstanding stock of
Country Life is owned by Illinois Agricultural Holding Co.
As of October 2, 1995, 2,500,000 shares or 6.30% of the issued and outstanding
capital stock of the Money Market Fund were owned by Country Life Insurance
Company ("Country Life"), Bloomington, Illinois. Country Life's capital stock
enables it to influence the outcome of shareholder votes. Country Life is
organized in Illinois. Substantially all issued and outstanding stock of Country
Life is owned by Illinois Agricultural Holding Co.
Country Mutual Insurance Company
As of October 2, 1995, 248,175 shares or 11.14% of the issued and outstanding
capital stock of the Tax Exempt Bond Fund were owned by Country Mutual Insurance
Company ("Country Mutual"), Bloomington, Illinois. Such shares were purchased at
net asset value for the purpose of providing the initial capital of the Fund.
Country Mutual's capital stock enables it to influence the outcome of
shareholder votes. Country Mutual is organized in Illinois and proxy control of
the company is in Illinois Agricultural Association.
IAA Trust Company
As of October 2, 1995, IAA Trust Company owned of record 1,571,091 shares or
37.08% of the issued and outstanding capital stock of the Growth Fund, 378,760
shares or 48.06% of the issued and outstanding capital stock of the Asset
Allocation Fund, and 32,572,553 shares or 82.03% of the issued and outstanding
capital stock of the Money Market Fund.
Illinois Agricultural Holding Co. owns 100% of the outstanding voting securities
of the Trust Company. For additional information on the ownership of Illinois
Agricultural Holding Co. See "WHO MANAGES THE FUNDS".
Shareholder inquiries should be directed to Fund/Plan Services, Inc., P.O. Box
874, Conshohocken, Pennsylvania 19428, or call toll-free 1 (800) 245-2100.
INCOME DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS, AND TAXES
Dividends and capital gains distributions may be automatically reinvested in
additional shares of a particular Fund at net asset value without sales charge,
or paid in cash, at the choice of the investor. The cash option is not available
under the Systematic Withdrawal Plan or Retirement Plans.
Capital gains are taxed at the same rate as ordinary income. The dividends
received deduction for corporations is 70% and is applicable to the Growth Fund
and the Asset Allocation Fund. Each shareholder will receive a summary of the
dividends paid or reinvested as they are declared. If the entire amount in an
account is redeemed at any time during a month, dividends credited to that
account from the beginning of the month through the day of redemption will be
paid together with the proceeds of the redemption.
THE GROWTH FUND:
It is the policy of the Growth Fund to distribute semi-annually, all of its net
investment income and, if any, all of its net realized capital gains according
to tax regulations. Currently, these distributions are made at the end of the
Fund's fiscal year and at calendar year-end.
THE ASSET ALLOCATION FUND:
It is the policy of the Asset Allocation Fund to pay monthly dividends from its
net investment income and to distribute net capital gains, if any, according to
tax regulations at the end of its fiscal and calendar years.
THE TAX EXEMPT BOND FUND:
It is the policy of the Tax Exempt Bond Fund to pay monthly dividends from its
net investment income.
This Fund intends to qualify each fiscal year (under the Internal Revenue Code
of 1986 and any amendments thereto) to pay "exempt-interest dividends" to its
shareholders. Exempt-interest dividends which are derived from net income earned
by the Fund on tax-exempt bonds will be excludable from gross income of the
shareholders for Federal income tax purposes. That part of monthly net
investment income which may be earned by the Fund from certain taxable temporary
investments, together with any annual distributions attributable to short-term
capital gains, are taxable as ordinary income to investors whether received in
cash or reinvested in shares. The percentage of each monthly dividend designated
by the Fund as tax exempt will be the same percentage as the actual tax exempt
income earned during the period covered by the distribution bears to total
income earned by the Fund during the period. Shareholders will be notified of
such designations monthly and information regarding the tax status of any other
distributions will be mailed annually. The percentage of the monthly dividend
which is tax exempt may vary from distribution to distribution. Long-term
capital gains distributions are taxable to shareholders as long-term capital
gain, regardless of how long a shareholder has held Fund shares.
Shareholders of the this Fund should recognize that should they redeem shares
between dividend dates, a portion of the per share redemption price may
represent interest accrued on municipal bonds and said portion may be taxed at
long- or short-term capital gains rates and not as a tax-exempt dividend
excludable from gross income.
Interest on indebtedness incurred by shareholders to purchase or carry shares of
this Fund will not be deductible for Federal income tax purposes. The exemption
of interest income for Federal income tax purposes does not necessarily result
in exemption under the income or other tax laws of any state or local authority.
Thus, shareholders may be subject to state and local taxes on distributions of
tax-exempt interest income from this Fund.
THE MONEY MARKET FUND:
The Money Market Fund declares and pays dividends of all of its daily net
investment income on each day that its net asset value is determined.
Net investment income, for dividend purposes of this Fund, consists of: (1)
accrued interest income plus or minus amortized purchase discount or premium;
(2) plus or minus all short-term realized gains and losses and unrealized
appreciation and depreciation on portfolio assets; and (3) minus all accrued
expenses of such Fund, which are accrued each day. Net income will be calculated
immediately prior to the determination of the net asset value per share of the
Fund. Since the net income of the Fund (including realized gains and losses and
unrealized appreciation and depreciation on the portfolio securities) is
declared as a dividend each time the net income of the Fund is determined, the
net asset value per share of the Fund normally remains at $1.00 per share
immediately after each such determination and dividend declaration. Any increase
in the value of a shareholder's investment in the Fund representing the
reinvestment of dividend income is reflected by an increase in the number of
shares of the Fund in the account. Normally, the Fund will have a positive net
income at the time of each determination thereof. Net income may be negative if
an unexpected liability must be accrued, a loss realized, or unrealized
depreciation occurs. If the net income of the Fund determined at any time is a
negative amount, the net asset value per share will be reduced below $1.00. The
Fund may endeavor to restore the net asset value per share to $1.00 by not
declaring dividends from net income on subsequent days until restoration, with
the result that the net asset value per share will increase to the extent of
positive net income which is not declared.
ALL FUNDS:
The Board of Directors may revise the above dividend policies, or postpone the
payment of dividends, if a Fund should have or anticipate any large presently
unexpected expense, loss, or fluctuation in net assets which in the opinion of
the Board might have a significant adverse effect on shareholders.
All of the Funds comply with Subchapter M of the Internal Revenue Code available
to investment companies and therefore, maintain exemption from Federal income
tax.
Long-term capital gains distributions are taxable to shareholders as long-term
capital gain, regardless of how long a person has been a shareholder. Any
dividend or distribution received shortly after the purchase of shares reduces
the net asset value of the shares by the amount of the dividend or distribution
and, although in effect a return of capital, is subject to income taxes. The
Funds are required to withhold and remit to the U.S. Treasury a portion (31%) of
dividend income, capital gains distributions, and redemption proceeds for any
account which provides an incorrect taxpayer identification number, no number at
all, or no certified number for a new account.
In order to avoid an excise tax on undistributed amounts, the Funds must declare
by the end of the calendar year a dividend representing 98% of their ordinary
income for the calendar year and 98% of their net capital gains (both long-term
and short-term) for the period of November 1 of the previous year through
October 31 of the current year. Such dividends will be paid on the last business
day of the calendar year to shareholders of record at the close of business on
the preceding business day.
Statements as to the tax status of distributions to shareholders will be mailed
annually. If shareholders are not subject to Federal income taxes on their
income, then they are not required to pay Federal tax on amounts distributed to
them. This section is not intended to be a complete discussion of all aspects of
the Federal income tax law and its effect on shareholders. For other tax
information, you may wish to consult your tax adviser.
HOW TO BUY SHARES
You may open an account by contacting Fund/Plan Broker Services, Inc. ("FPBS"),
P.O. Box 874, Conshohocken, Pennsylvania 19428, 1 (800) 245-2100 or your local
Country Capital Management Company sales representative. Purchases of Fund
shares may be made in two ways: by mail or by wire transfer, as discussed
further below. The minimum initial investments are $100 for the Growth Fund, the
Asset Allocation Fund and the Tax Exempt Bond Fund, and $1,000 for the Money
Market Fund. The minimum subsequent investment amount is $25 for all Funds.
After an account has been opened, you may purchase additional shares through a
sales representative or you may send your order directly to IAA Trust Company
c/o Fund/Plan Broker Services Inc. ("FPBS"), P.O. Box 874, Conshohocken,
Pennsylvania 19428. Each check should be made payable to a specific Fund.
Whether you go through a sales representative or order directly, any applicable
sales charge you pay is the same. If purchased through a sales representative,
he or she receives a portion of any applicable sales charge and may, at times,
receive additional compensation. All orders are subject to acceptance by FPBS
and without in any way limiting the foregoing, the Funds (through FPBS) reserve
the right to refuse any purchase which would result in ownership by any
shareholder of 5% or more of a Fund's outstanding shares at that time. The Funds
will automatically redeem shares if a purchase check is returned for
non-sufficient funds (NSF). This procedure places the risk for loss on the
shareholder. The Funds reserve the right to automatically redeem shares if the
share balance of an account falls below $250.
Purchase Prices of the Growth Fund, the Asset Allocation Fund, and the Tax
Exempt Bond Fund
Shares of the Growth Fund, the Asset Allocation Fund, and the Tax Exempt Bond
Fund are sold at the offering price next determined after receipt of the order
by FPBS. The offering price is normally determined once daily at 4:00 p.m.
Eastern Time on each day the New York Stock Exchange is open for trading, but
this time may be changed. Orders received by FPBS after this time will be held
over and confirmed at the offering price effective at closing time on the next
business day. The offering price is the net asset value per share plus a sales
charge, if applicable. See "HOW THE VALUE OF YOUR SHARES IS DETERMINED". The
sales charge applicable to the Growth Fund, the Asset Allocation Fund, and the
Tax Exempt Bond Fund varies with the amount of your purchase as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Total Sales Charge Dealer
As a Pecentage of Concession
As a Percentage Net Amount As a Percentage
Amount of Investment of Offering Price Invested of Offering Price
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $ 10,000 . . . . . . . 3.00% 3.093% 2.700%
$ 10,000 but less than $ 25,000 2.00% 2.041% 1.700%
$ 25,000 but less than $ 50,000 1.00% 1.010% 0.700%
$ 50,000 but less than $100,000 0.70% 0.756% 0.500%
$100,000 but less than $250,000 0.50% 0.503% 0.375%
$250,000 or more . . . . . . . . . 0.25% 0.251% 0.250%
</TABLE>
The sales charge is waived for Illinois Agricultural Association ("IAA")
members, employees of IAA and its affiliated companies, and IAA Trust Company
("IAATC") customers.
The scale of reduced sales charges is applicable to purchases made at one time
by "persons" defined as: (1) an individual or company; (2) the combined
purchases of an individual, his spouse and their children under the age of
twenty-one, purchasing securities for his or their own accounts, including those
held under a tax sheltered plan; or (3) a trustee or other fiduciary purchasing
for a single trust estate or fiduciary account (including a pension,
profit-sharing or other employee trust qualified under Section 401 of the
Internal Revenue Code, further including self-employed individual's retirement
plans).
Purchase Price of the Money Market Fund
Shares of the Money Market Fund are sold at the net asset value (without a sales
charge) next determined after receipt of the order by FPBS.
Purchases by Mail
To open an account and purchase shares by mail, complete an application and mail
it with your check payable to "IAA Trust ___________________ Fund, Inc.", c/o
Fund/Plan Services, Inc., P.O. Box 874, Conshohocken, Pennsylvania 19428.
Applications may be obtained by calling toll-free, 1 (800) 245-2100.
The application need not be signed by a sales representative if you prefer to
purchase directly with Country Capital Management Company or FPBS. If you deal
with a sales representative, he or she will assist you in completing the
application, answer any of your questions, and mail the application for you.
Although no commission is paid, the sales representative may, at times, receive
additional compensation.
In order to maximize current income, all investments in the Funds must be made
in Federal Funds so that the Fund can put the money to work immediately. Checks
drawn on a member bank of the Federal Reserve System usually are converted into
Federal Funds within two business days of receipt by FPBS. Shares begin earning
income dividends on the day the purchase order is effective. A Fund will
automatically redeem shares if the purchase check is returned for non-sufficient
funds (NSF). This procedure places the risk for loss on the shareholder.
Purchases by Wire Transfer
To open an account and become a shareholder on the same day, first you (or our
sales representative) must telephone FPBS toll-free at 1 (800) 245-2100, by
12:00 Noon Eastern Time. An account number will be assigned to you for use in
identifying your wire transfer of money.
Second, you must request your bank to transmit immediately available funds
(Federal Funds) by wire to:
UNITED MISSOURI BANK, NA
ABA #10-10-00695
For: Fund/Plan Services, Inc.
Account #98-7037-071-9
IAA TRUST ________________ FUND
Account of (exact name(s) of Account Registration)
Shareholder Account #_______________
In order to obtain same-day investment, your wire must be received by the above
bank by 12:00 Noon Eastern Time. The bank that wires your money may charge a fee
for this service.
Third, you or our sales representative must mail a completed application to
FPBS, as noted above.
Subsequent Investments
Once your account has been established, additional investments in any of the
Funds may be made at any time by mailing a check or by wiring money as described
above. When you wire money for either the initial or additional investments,
always call FPBS on the same day to notify them of the investment. The minimum
subsequent investments are $25 by mail and $1,000 by wire transfer.
SPECIAL PLANS AND OTHER PURCHASE INFORMATION
The Funds have available the following special Plans and purchase options.
Further information with respect to these plans is contained in the Funds'
Statement of Additional Information. Further information on these Plans may also
be obtained by contacting Fund/Plan Broker Services, Inc. ("FPBS") or Country
Capital Management Company.
Rights of Accumulation
For those who already have an account with the Growth Fund, the Asset Allocation
Fund, the Tax Exempt Bond Fund or the Money Market Fund, reduced sales charges
for the first three Funds in accordance with each Fund's schedule of sales
charges are also applicable to subsequent purchases by "persons" defined in the
section "HOW TO BUY SHARES". The sales charge, if not waived, on each additional
purchase is determined by adding to the amount of the new investment the
combined current redemption value of all shares the investor owns in the four
IAA Trust Mutual Funds.
Automatic Investing
A shareholder may authorize Systematic Investing through automatic withdrawals
from his/her bank account(s).
Exchange Privileges
Shareholders in any of the Funds may exchange shares of their respective Fund
for shares of the other Funds on the basis of the relative net asset values per
share at the time of the exchange. Any such exchange of shares among the Growth
Fund, the Asset Allocation Fund, and the Tax Exempt Bond Fund will not result in
a sales charge. Shares of the Money Market Fund acquired through direct purchase
or in the form of dividends earned on such shares may be exchanged for shares of
the other three funds at net asset value plus the normal sales charge of such
Funds. If the exchange is made by telephone, the new shares will be registered
in the same manner as the shares for which they were exchanged. A capital gain
or loss for Federal income tax purposes will be realized upon the exchange
depending upon the cost or other basis of the shares redeemed. Sixty days
written notice will be given to shareholders before any modifications to this
privilege are implemented.
One-Time Reinvestment Privilege Without Sales Charge
Within thirty calendar days after redemption, shareholders who redeem all or
part of their shares have a one-time privilege to reinvest in shares of the same
or another Fund without a sales charge up to the dollar amount received for the
redeemed shares.
Retirement Plans
IAA Trust Company ("IAATC") sponsors a prototype Defined Contribution Plan which
has been approved by the Internal Revenue Service and which meets the
requirements of the Tax Reform Act of 1986, as amended. This Plan can invest in
shares of the Growth Fund, the Asset Allocation Fund, and the Money Market Fund.
The minimum initial investment for each Fund is $100, with no minimum for
subsequent investments. For individuals eligible to establish an Individual
Retirement Account ("IRA"), IAATC sponsors a prototype IRA Plan which has been
approved by the Internal Revenue Service.
Systematic Withdrawal Plan
Shareholders who purchase or already own $5,000 or more of a Fund's shares,
valued at the current public offering price, and who wish to receive periodic
payments may establish a Systematic Withdrawal Plan. Such planholders will
receive monthly, quarterly or annual checks in the amount they designate.
HOW THE VALUE OF YOUR SHARES IS DETERMINED
The Funds will be open for business and will price their respective shares on
each day the New York Stock Exchange is open for trading. The Funds' share
prices will be determined at the close of regular trading hours of the New York
Stock Exchange, normally 4:00 p.m. Eastern Time. The Money Market Fund reserves
the right to calculate its net asset value more frequently than once a day if
deemed desirable.
The net asset value per share is determined as follows. Securities listed or
admitted to trading privileges on any national securities exchange will be
valued at the last sales price on that day before the time for valuation, or, if
there is no sale before that time that day, the last bid price on such exchange
before that time that day. Equity securities which are traded in the
over-the-counter market only and which are included in the NASDAQ National
Market System will be valued at the last sales price preceding the time for
valuation. Equity securities which are traded in the over-the-counter market
only, but which are not included in the NASDAQ National Market System will be
valued at the mean between the last preceding bid and asked price. Valuations
may also be obtained from a pricing services when such prices are believed to
reflect the fair market value. Securities with a remaining maturity of sixty
days or less are valued at amortized cost, which approximates market value.
Short-term notes are valued at cost. Corporate bonds, municipal bonds,
receivables and portfolio securities not currently quoted as indicated above,
and other assets will be valued at fair value as determined in good faith by the
Board of Directors.
From the gross value of the assets so determined, there will be deducted all
liabilities, including accrued expenses and taxes, and any necessary reserves.
The remainder will be the net asset value of a Fund, which will be divided by
the number of shares of capital stock outstanding in order to determine the
Fund's net asset value per share. (The net asset value per share of the Money
Market Fund is ordinarily $1.00.) On any day when depreciation in the value of a
Fund's portfolio securities exceeds income after expenses, such Fund's net asset
value per share may decline.
The market values of debt securities usually reflect yields generally available
on securities of similar quality. When yields decline, the market value of a
portfolio holding higher-yielding securities increases; and when yields
increase, the market value of the portfolio invested at lower yields can be
expected to decline. In addition, if a Fund has net redemptions at a time when
interest rates have increased, such Fund may have to sell portfolio securities
prior to maturity at a price below the Fund's carrying value. Also, because at
least a portion of the portfolio may be valued at amortized cost rather than
market, any yield quoted may be different if the entire portfolio were valued at
market, since amortized cost does not take market fluctuation into
consideration.
With respect to the Money Market Fund, the value of all of its securities is
determined by using the amortized cost method of valuation, pursuant to Rule
2a-7 under the Investment Company Act. The amortized cost method of valuation
involves valuing a security at its cost at the time of purchase and thereafter
assuming a constant amortization to maturity of any discount or premium,
regardless of the impact of fluctuating interest rates on the market value of
such security. While this method provides certainty in valuation, it may result
in periods during which value, as determined by amortized cost, is higher or
lower than the price the Fund would receive if it sold the instrument. The
purpose of this method of calculation is to attempt to maintain a constant net
asset value per share of $1.00, which may or may not result.
HOW TO REDEEM YOUR SHARES
Each Fund will redeem any part or all of your shares whenever you request. The
price you receive will be the net asset value per share as next computed after
your request is received by Fund/Plan Services, Inc. ("FPS"), as Transfer Agent,
in proper form. Accounts in the Money Market Fund will earn daily dividends up
to the day before the date of redemption.
You can redeem shares from an account in three ways -- by mail or by telephone,
and with respect to the Money Market Fund only, by writing a check.
Redemptions by Mail
To redeem by mail, simply send a letter to:
IAA Trust Funds
c/o Fund/Plan Services, Inc.
P.O. Box 874
Conshohocken, PA 19428
Your letter must specify the name of the Fund, your account number and either
the number of shares or the dollar amount to be redeemed. Your request must be
signed exactly as your account is registered. If your account is owned jointly,
both owners must sign. If a stock certificate has been issued, it must be
forwarded back (blank and unsigned) with your written request.
The Funds reserve the right to require additional documentation, or signature
guarantees on any redemptions in amounts over $25,000 in value or for the
redemption of corporate, partnership or fiduciary accounts, or for certain types
of transfer requests or account registration adjustments. Signatures must be
guaranteed by an "eligible guarantor institution" as defined in Rule 17Ad-15
under the Securities Exchange Act of 1934. Eligible guarantor institutions
include banks, brokers, dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies, and savings associations.
A broker-dealer guaranteeing signatures must be a member of a clearing
corporation or maintain net capital of at least $100,000. Credit unions must be
authorized to issue signature guarantees. Signature guarantees will be accepted
from any eligible guarantor institution which participates in a signature
guarantee program.
Redemptions by Telephone
If you completed the portion of the application so as to authorize redemptions
by telephone, you may redeem in this manner by calling toll-free 1 (800)
245-2100 before the close of business on any business day. Telephone redemptions
are not available if a joint owner is under age 14. When one of the joint
tenants is age 14 to 17, the adult tenant must authorize telephone redemptions.
All telephone conversations with FPS will be recorded. The proceeds will be sent
only to the financial institution you designate or to the address of record of
the account. The proceeds will normally be sent the next business day by mail
or, if you prefer and pay the expense, they will be wire transferred (minimum
$1,000). If wire transferred, the Fund(s) cannot be responsible for any delays
which may occur after a Fund has entered the proceeds in the Federal wire
systems. The financial institution you designate must be a bank, savings and
loan or credit union which is insured under The FDIC, as only these institutions
can send or receive Federal wire transfers. These instructions will remain in
effect until you cancel or change them by written request. No stock certificates
will be issued to or may be held by shareholders electing this privilege. The
Funds reserve the right to terminate or modify this privilege at any time upon
thirty days notice to shareholders. Shareholders recently purchasing shares by
check may not use the telephone redemption privilege under certain
circumstances.
Neither the Funds nor any of their service contractors will be liable for any
loss or expense in acting upon telephone instructions that are reasonably
believed to be genuine. In attempting to confirm that telephone instructions are
genuine, the Funds will use such procedures that are considered reasonable,
including requesting a shareholder to correctly state his or her Fund account
number, the name in which his or her account is registered, his or her social
security number, banking institution, bank account number, and the name in which
his or her bank account is registered. To the extent that a Fund fails to use
reasonable procedures to verify the genuineness of telephone instructions, it
and/or its service contractors may be liable for any such instructions that
prove to be fraudulent or unauthorized.
Redemptions by Writing a Check
If you so request on the application, the Money Market Fund only will provide
you with an initial supply of checks, which you should receive within two or
three weeks. These checks may be written in any amount not less than $100 nor
more than $100,000, and can be made payable to you or anyone you desire.
Redemption procedures will enable you to continue to earn daily income dividends
until your redemption check has cleared. Payment of all redemption checks is
subject to approval by the Fund, and if there are not sufficient shares in your
account, the check will be returned marked "Insufficient Funds". The Fund
reserves the right to terminate or modify this privilege at any time upon thirty
days notice to shareholders. Shareholders purchasing shares by check may not use
the check redemption privilege under certain circumstances.
Check-Writing Privilege Terms: Persons electing check-writing automatically
authorize the bank to honor checks drawn by them on the bank and appoint FPS,
the Fund's Transfer Agent, as their agent to redeem a sufficient number of Money
Market Fund shares to pay such checks. They also automatically agree: (1) The
owner or owners who signs the check will sign their name exactly as it appears
in Item 1 on the application or the check will not be honored; (2) This
privilege is subject to the Fund's and the bank's rules and regulations and
applicable Government regulations as amended from time to time; (3) The bank may
refuse to honor checks and the Fund may refuse to effect redemptions to pay
checks whenever the right of redemption has been suspended or postponed; (4) To
examine confirmations and to notify the Fund, within thirty days after mailing
to the owner(s), of any error in the confirmations and that failure to do so
shall preclude any claim against the Fund, the Distributor, the bank, FPS, and
each of their representatives and agents by reason of such failure; (5) This
privilege may be modified or terminated by any owner by serving written notice
to the Fund, and the Fund may modify or terminate it by serving written notice
to the owner(s) thirty days in advance thereof. This feature is not available if
a part owner is under age 14. When one of its joint tenants is age 14 to 17,
both tenants must sign drafts.
Redemption Payments to Shareholders
If a partial redemption is being made and the shareholder is using "specific
identification" accounting in determining his/her gain or loss for tax purposes,
it is important that he/she indicate which shares are to be redeemed, giving the
date acquired and number of shares. If several purchases are involved and the
shareholder desires a check for a stated amount, the order in which shares are
to be redeemed should also be specified. If no such instructions are given, the
shareholder will be required to compute his/her tax on a "first in - first out"
basis. No designation of purchase dates is necessary in connection with a
redemption of all shares. The sale date and proceeds of redemptions (unless
exempt) will be reported by the Funds to the Internal Revenue Service at the end
of each year, as required by law.
Redemption of shares may be made from any available assets of each Fund, and if
a Fund does not have sufficient cash on hand, such Fund will normally sell
portfolio securities to effect such redemption.
Payment to shareholders for shares surrendered for redemption is made in cash as
soon as practicable after surrender, within seven days, except: (1) for any
period (a) during which the New York Stock Exchange is closed other than
customary weekend and holiday closing, or (b) during which trading on the New
York Stock Exchange is restricted; (2) for any period during which an emergency
exists as determined by the Securities and Exchange Commission as a result of
which (a) disposal by a Fund of securities owned by it is not reasonably
practicable, or (b) it is not reasonably practicable for a Fund to determine the
value of its net assets; or (3) for such other periods as the Securities and
Exchange Commission may by order permit for the protection of security holders
of the Funds. In such event, the day will not be regarded as a business day, the
Funds' share prices will not be calculated, and all orders will be held for
execution on the following business day. The Funds, however, will not mail
redemption proceeds until they have assured themselves that checks received for
the purchase of any shares being redeemed have, or will be, cleared.
Accordingly, redemption checks may not be mailed until the shares being redeemed
have been on a Fund's books for at least fifteen business days measured from the
date shown on the purchase confirmation, although the effective date of the
redemption will be the date the redemption request is received by the particular
Fund. Payment for redeemed shares may be made in whole or in part in portfolio
securities of a Fund, at the portfolio value on the day the proper redemption
request is received, if the Board of Directors determines that the liquidation
of securities is impracticable or that payment in cash would prejudice the best
interests of the remaining shareholders.
The Funds have elected to be governed by Rule 18f-1 under the Investment Company
Act of 1940, pursuant to which the Funds are obligated to redeem shares solely
in cash, up to the lesser of $250,000 or one percent of the net asset value of
the particular Fund during any 90-day period for any one shareholder. The one
percent net asset value of each Fund shall be computed at the beginning of such
90-day period. In the event of a redemption in kind, it should be noted that a
shareholder would incur brokerage costs if he sold the securities received.
The value of the shares on redemption may be more or less than the shareholder's
cost, depending upon the market value of the portfolio securities at the time of
redemption. Shares redeemed will be canceled. Each Fund has the right to
establish a withdrawal charge on redemption of its shares, but the Funds do not
make any such charge and have no present intention of making such a charge, and
in the event such a withdrawal charge is established, at least thirty days prior
notice will be given to shareholders.
<PAGE>
IAA Trust Mutual Funds:
IAA Trust Growth Fund, Inc.
IAA Trust Asset Allocation Fund, Inc.
IAA Trust Tax Exempt Bond Fund, Inc.
IAA Trust Money Market Fund, Inc.
Board of Directors:
Ronald R. Warfield
Herbert G. Allen
Nancy J. Erickson
Paul S. Ives
William E. Klein, Sr.
Ailene Miller
Joseph W. Sommer
Officers:
Ronald R. Warfield, President
Wayne A. Brown, Vice President
Gary E. Mede, Vice President
Richard M. Miller, Vice President
Rollie D. Moore, Vice President
Paul M. Harmon, Secretary
Robert W. Weldon, Treasurer
Richard F. Day, Controller
Investment Adviser:
IAA Trust Company
Bloomington, Illinois
Distributor:
Fund/Plan Broker Services, Inc.
Conshohocken, Pennsylvania
Transfer Agent:
Fund/Plan Services, Inc.
Conshohocken, Pennsylvania
Custodian:
IAA Trust Company
Bloomington, Illinois
Independent Accountants:
Coopers & Lybrand L.L.P.
Philadelphia, Pennsylvania
General Counsel
Jerome P. Weiss
Sonnenschein,
Nath & Rosenthal
Washington, D.C.
F30-117-03
STATEMENT OF ADDITIONAL INFORMATION
October 27, 1995
IAA TRUST GROWTH FUND, INC.
IAA TRUST ASSET ALLOCATION FUND, INC.
IAA TRUST TAX EXEMPT BOND FUND, INC.
IAA TRUST MONEY MARKET FUND, INC.
808 IAA Drive, Bloomington, Illinois 61702, Phone (309) 557-3222
The IAA Trust Mutual Funds consist of four separate funds (collectively, the
"Funds"): IAA Trust Growth Fund, Inc. (the "Growth Fund"); IAA Trust Asset
Allocation Fund, Inc.* (the "Asset Allocation Fund"); IAA Trust Tax Exempt Bond
Fund, Inc. (the "Tax Exempt Bond Fund"); and IAA Trust Money Market Fund, Inc.
(the "Money Market Fund"). This Statement of Additional Information is not a
prospectus, but should be read in conjunction with the Funds' Prospectus dated
October 27, 1995.
A copy of the Funds' Prospectus may be obtained from a local Country Capital
Management Company salesperson who is also a Country Companies agent, a licensed
salesperson at IAA Trust Company, 808 IAA Drive, Bloomington, Illinois 61702, by
writing the Funds' principal Underwriter, Fund/Plan Broker Services, Inc., #2
Elm Street, P.O. Box 874, Conshohocken, Pennsylvania 19428, or by calling
toll-free 1 (800) 245-2100.
<TABLE>
<CAPTION>
TABLE OF CONTENTS
SUBJECT PAGE
------- ----
<S> <C>
Investment Objectives and Policies . . . .
Policies and Investment Restrictions Aimed at Protecting Investors
Directors and Officers of the Funds. . . . .
Control Persons and Principal Holders of Securities. . . . . . . . .
Investment Advisory and Other Services . .
Brokerage. . . . . . . . . . . . . . . . .
Purchases, Redemptions, and Pricing of Fund Securities . . . . . . .
Rights of Accumulation. . . . . . . .
Exchange Privileges . . . . . . . . .
One-Time Reinvestment Privilege Without Sales Charge. . . . . .
Retirement Plans. . . . . . . . . . . .
Automatic Investing . . . . . . . . . .
Systematic Withdrawal Plan. . . . . . .
Underwriter Compensation . . . . . . . . . .
Investment Performance Information . . . . .
Financial Statements -- Annual Reports to Shareholders . . . . . . .
Report of Independent Accountants. . . . . .
Appendix . . . . . . . . . . . . . . . . .
</TABLE>
* Name change from "IAA Trust Income Fund, Inc." was approved by such Fund's
shareholders on February 8, 1993.
INVESTMENT OBJECTIVES AND POLICIES
For information with respect to the Funds' individual investment objectives and
policies, see "What are the Funds' Investment Objectives" in the Funds'
Prospectus, and "Policies and Investment Restrictions Aimed at Protecting
Investors" in this Statement of Additional Information.
For the fiscal years ended June 30, 1994 and 1995, the Growth Fund's
portfolio turnover rate was 49.12% and 31.84%, respectively. This Fund does not
expect that its turnover rate as of June 30, 1996 will vary significantly from
that at June 30, 1995.
For the fiscal years ended June 30, 1994 and 1995, the Asset Allocation
Fund's portfolio turnover rate was 17.39% and 21.03%, respectively.
This Fund does not expect that its turnover rate as of June 30, 1996 will vary
significantly from that at June 30, 1995.
For the fiscal years ended June 30, 1994 and 1995, the Tax Exempt Bond
Fund's portfolio turnover rate was 41.94% and 24.89%, respectively.
This Fund does not expect that its turnover rate as of June 30, 1996 will vary
significantly from that at June 30, 1995.
POLICIES AND INVESTMENT RESTRICTIONS AIMED AT PROTECTING INVESTORS
Fundamental Investment Restrictions
The following investment restrictions are considered fundamental policies and
may be changed only by the vote of a majority of a Fund's outstanding shares,
which as used herein and in the Prospectus means the lesser of (1) 67% of such
Fund's outstanding shares present at a meeting if the holders of more than 50%
of the outstanding shares are present in person or by proxy, or (2) more than
50% of such Fund's outstanding shares.
Restrictions Applicable to All Funds:
All Funds will not authorize or issue any class of senior securities.
The Trust Growth Fund, the Asset Allocation Fund, and the Tax Exempt Bond
Fund will not borrow money, except as a temporary measure for extraordinary
or emergency purposes, and then only from a bank in an amount not to exceed
10% of the value of the Fund's total assets, nor 5% of the value of such
Fund's total assets if such debt matures more than sixty days after issuance.
The Money Market Fund will not borrow money, except as a temporary measure
for extraordinary or emergency purposes, and then only from a bank in an
amount not to exceed 10% of the value of the Fund's total assets and will not
purchase securities at any time a loan to such Fund is outstanding
(investments in repurchase agreements are not subject to these restrictions).
All Funds will not underwrite or participate in the underwriting of
securities of other issuers.
All Funds will not purchase or sell real estate, commodities, or commodity
contracts.
All Funds will not make loans, except through the purchase of publicly
distributed debt securities in accordance with each Fund's investment
policies. Investments in repurchase agreements shall not be considered a loan
for purposes of this restriction. (See the Appendix for risk disclosure
statement on repurchase agreements).
Restrictions Applicable to Certain Funds:
The Growth Fund will not:
Invest more than 5% of its assets in the securities of any one issuer.
Purchase or hold as much as 10% of any class of outstanding equity securities
or as much as 10% of the outstanding voting securities of any one issuer.
Concentrate the investments of more than 25% of the total value of its assets
in any single industry.
The Asset Allocation Fund will not:
With respect to 75% of its assets, invest more than 5% of its assets in the
securities of any one issuer.
Purchase or hold as much as 10% of any class of outstanding equity securities
or as much as 10% of the outstanding voting securities of any one issuer.
Concentrate the investments of more than 25% of the total value of its assets
in any single industry.
The Tax Exempt Bond Fund will not:
With respect to 75% of its assets, invest more than 5% of its assets in the
securities of any one issuer. The term "issuer" as used by this Fund will
mean any one state municipality, agency, authority, instrumentality or other
entity which is directly responsible for the payment of debt service on its
outstanding obligations.
With respect to non-municipal bond investments, will not concentrate
investments of more than 25% of the total value of its assets in any single
industry, except that there is no limitation with regard to investments in
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.
The Money Market Fund will not:
Invest more than 10% of its total assets in repurchase agreements maturing in
more than seven days or in non-negotiable certificates of deposit (See the
Appendix for risk disclosure statement on repurchase agreements).
Invest more than 5% of its total assets in the securities of any one issuer.
Concentrate the investments of more than 25% of the total value of its assets
in any single industry, other than banks.
Non-fundamental Investment Restrictions
With respect to the Growth Fund, the following restrictions are imposed by
the management of the Funds, and may be modified by the Board of Directors of
the Funds without shareholder approval.
The Growth Fund will not:
Invest in companies for purposes of exercising control or management.
Buy from or sell portfolio securities to any of its Officers, Directors,
employees, Investment Advisers or Underwriters as principals.
Will not purchase securities on margin, effect a short sale of any security,
purchase or sell puts, calls, straddles or spreads, or participate in any
joint or joint and several trading accounts.
Will not purchase or retain securities of any company if persons affiliated
with such Fund or its Investment Adviser, as a group, beneficially own more
than 1% of the securities of such a company.
In any case, borrow money in an amount which exceeds 5% of the value of its
total assets and will not purchase securities at any time a loan to such Fund
is outstanding (investment in repurchase agreements will not be considered to
be loans for purposes of this restriction).
Investment Company Act Restrictions
The following restrictions are imposed by the Investment Company Act of 1940.
The Growth Fund, the Asset Allocation Fund, the Tax Exempt Bond Fund and the
Money Market Fund will not:
Purchase or acquire securities of another investment company except by
purchase on the open market at regular brokerage rates (other than when such
purchase or acquisition is part of a plan of merger or consolidation) if
immediately after such purchase or acquisition, such Fund would own in the
aggregate: (1) more than 3% of the total outstanding voting stock of such
other investment company; (2) securities issued by such other investment
company having an aggregate value in excess of 5% of the value of such Fund's
total assets; or (3) securities issued by such other investment company and
all other investment companies having an aggregate value in excess of 10% of
the value of such Fund's total assets.
Any investment policy or restriction which involves a maximum percentage of
securities or assets shall not be considered to be violated unless an excess
over the percentage occurs immediately after an acquisition of securities and
results therefrom.
DIRECTORS AND OFFICERS OF THE FUNDS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Name, Age Position(s) Aggregate Total Principal Occupation(s) During Past Five Years
and Held with Compensation Compensation
Address Fund(s) From Funds From Funds
for Fiscal Year & Fund
Ended 6/30/95 Complex Paid
to Directors
Ronald R. Director 0 0 Director and President: Illinois Agricultural Association,
Warfield(2) since 1994 Agricultural Holding Co., CC Services, Inc.(4), Country Capital
(51) President Management Company, Country Casualty Insurance Company, Country
since 1994 Investors Life Assurance Company, Country Life Insurance Company,
Country Mutual Insurance Company, and Country Preferred Insurance
Company, 1993 to date; Director: AgriVisor Services, Inc., IAA
Communications Company, and IAA Trust Company, 1993 to date;
Coordinating Committee Member of GROWMARK, Inc. and Chairman, Board
of Trustees, Foundation(2), 1993 to date; Director and President:
IAA Trust Growth Fund Inc.(1), IAA Trust Asset Allocation Fund,
Inc.(1), IAA Trust Tax Exempt Bond Fund, Inc.(1), IAA Trust Money
Market Fund, Inc.(1), Illinois Agricultural Service Company,
AgriVisor Services, Inc., IAA Communications Company, and IAA
Trust Company, 1994 to date; Chairman of the Board: Country Capital
Management Company, 1994 to date; Director: Bank of Gibson City,
1989 to date. Farmer.
Herbert G. Director 1400 1400 Director: IAA Trust Growth Fund, Inc.(1), IAA Trust Asset Allocation
Allen (65) since 1987 Fund, Inc.(1), IAA Trust Tax Exempt Bond Fund, Inc.(1), and IAA Trust
Money Market Fund, Inc.(1), 1987 to date. Farmer.
Nancy J. Director 0 0 President of McHatton Farm Management, Inc., 1981 to date; Director:
Erickson since 1995 IAA Growth Fund, Inc.(1), IAA Trust Asset Allocation Fund, Inc.(1),
(38) IAA Trust Money Market Fund, Inc.(1), and IAA Trust Tax Exempt Bond
Fund, Inc.(1), 1995 to date. Farmer.
Paul S. Ives Director 700 700 Director: IAA Trust Growth Fund, Inc.(1), 1971 to date; IAA Trust
(78) since 1971 Asset Allocation Fund, Inc.(1) and IAA Trust Tax Exempt Bond Fund,
Inc.(1), 1978 to date; and IAA Trust Money Market Fund, Inc.(1),
1981 to date. Farmer.
William E. Director 1400 1400 Director: Illinois Agricultural Association, Illinois Agricultural
Klein, Sr. (2) since 1993 Holding Co., CC Services, Inc.(4), Country Casualty Insurance
(67) Company, Country Investors Life Assurance Company, Country Life
Insurance Company, Country Mutual Insurance Company, and Country
Preferred Insurance Company, 1988 to date; Director: Country Capital
Management Company, 1992 to date; Director: IAA Trust Growth
Fund, Inc.(1), IAA Trust Asset Allocation Fund, Inc.(1), IAA Trust
Tax Exempt Bond Fund Inc.(1), and IAA Trust Money Market Fund,
Inc.(1), 1993 to date. Farmer.
Ailene Director 1400 1400 McLean County (Illinois) Board Member: 1986 to date; Member: IAA
Miller (69) since 1991 Foundation(2), Trustee-Emeritus, 1988 to date; Director: IAA Trust
Growth Fund, Inc.(1), IAA Trust Asset Allocation Fund, Inc.(1),
IAA Trust Tax Exempt Bond Fund, Inc.(1), and IAA Trust Money Market
Fund, Inc.(1), 1991 to date.
Joseph W. Director 1050 1050 Director: Illinois Agricultural Association, Illinois Agricultural
Sommer. (2) since 1993 Holding Co., CC Services, Inc.(4), Country Casualty Insurance
(69) Company, Country Investors Life Assurance Company, Country Life
Insurance Company, Country Mutual Insurance Company, and Country
Preferred Insurance Company, 1988 to date; Director: Country Capital
Management Company, IAA Trust Growth Fund, Inc.(1), IAA Trust
Asset Allocation Fund, Inc.(1), IAA Trust Tax Exempt Bond Fund,
Inc.(1), and IAA Trust Money Market Fund, Inc.(1), 1993 to date.
Farmer.
Wayne A. Vice- 0 0 Senior Vice President--Investments: IAA Trust Company, 1983 to date;
Brown (61) President Assistant Vice President--Fixed Income Securities: IAA Trust Company,
since 1994 1973 to 1983; Assistant Treasurer: Country Life Insurance Company,
1980 to date; Vice President: IAA Trust Growth Fund, Inc.(1), IAA
Trust Asset Allocation Fund, Inc.(1), IAA Trust Tax Exempt Bond
Fund, Inc.(1), and IAA Trust Money Market Fund, Inc.(1), 1994
to date.
Gary E. Vice 0 0 Executive Vice President: IAA Trust Company, 1977 to date; Vice
Mede (58) President President--Investments: Country Capital Management Company, 1977
since 1978 to date; Vice President: IAA Trust Growth Fund, Inc.(1), IAA Trust
Asset Allocation Fund, Inc.(1), and IAA Trust Tax Exempt Bond Fund,
Inc.(1), 1978 to date; IAA Trust Money Market Fund, Inc.(1),
1981 to date.
Richard M. Vice 0 0 Senior Vice President and Senior Trust Officer: IAA Trust Company,
Miller (67) President 1991 to date (prior thereto Senior Vice President and Trust Officer);
since 1992 Vice President: IAA Trust Growth Fund, Inc.(1), IAA Trust Asset
Allocation Fund, Inc.(1), IAA Trust Tax Exempt Bond Fund, Inc.(1),
and IAA Trust Money Market Fund, Inc.(1), 1992 to date.
Rollie D. Vice 0 0 Director and Vice President: Illinois Agricultural Association,
Moore (46) President Illinois Agricultural Holding Co., CC Services, Inc.(4), Country
since 1994 Capital Management Company, Country Casualty Insurance Company,
Country Investors Life Assurance Company, Country Life Insurance
Company, Country Mutual Insurance Company, and Country Preferred
Insurance Company, 1993 to date; Director: IAA Communications
Company and IAA Trust Company, 1993 to date; Vice Chairman, Board of
Trustees, IAA Foundation(2), 1993 to date; Vice President: IAA
Trust Growth Fund, Inc.(1), IAA Trust Asset Allocation Fund, Inc.
(1), IAA Trust Tax Exempt Bond Fund, Inc. (1), and IAA Trust Money
Market Fund, Inc.(1), 1994 to date; Vice President and
Director: IAA Communications Company and IAA Trust Company, 1994
to date; Director: AgriVisor Services, Inc. and Illinois
Agricultural Service Company, 1994 to date; Coordinating Committee
Member of GROWMARK, Inc., 1994 to date. Farmer. Previously served as
Director: Illinois Agricultural Association, Illinois Agricultural
Holding Co., CC Services, Inc.(4), Country Casualty Insurance
Company, Country Investors Life Assurance Company, Country Life
Insurance Company, Country Mutual Insurance Company, and Country
Preferred Insurance Company, 1984 to 1992; IAA Trust Company, 1988
to 1989; Country Capital Management Company, 1989 to 1992; IAA Trust
Growth Fund, Inc., IAA Trust Asset Allocation Fund, Inc., IAA Trust
Money Market Fund, Inc., and IAA Trust Tax Exempt Bond Fund, Inc.,
1989 to 1993; AgriVisor Services, Inc., 1991 to 1992.
Jerome P. General 0 0 General Counsel: Illinois Agricultural Association and affiliated
Weiss (61) Counsel companies, 977 to date; Secretary and General Counsel: Country
since 1977 Capital Management Company and IAA Trust Company, 1977 to date;
General Counsel IAA Trust Growth Fund, Inc.(1), 1977 to date; IAA
Trust Asset Allocation Fund, Inc.(1) and IAA Trust Tax Exempt Bond
Fund, Inc.(1), 1978 to date; IAA Trust Money Market Fund, Inc.
(1), 1981 to date; Partner: Sonnenschein, Nath and Rosenthal
(law firm), Washington, D.C., 1986 to date.
Robert W. Treasurer 0 0 Vice President--Finance and Treasurer: IAA Trust Company, Illinois
Weldon (61) since 1975 Agricultural Association, Country Life Insurance Company, Country
Mutual Insurance Company, Country Casualty Insurance Company,
Country Preferred Insurance Company, and Country Capital Management
Company, 1974 to date; Director and Treasurer: Illinois Agricultural
Service Company, 1974 to date; Vice President--Finance and
Treasurer: CC Services, Inc.(4), 1975 to date; Country Investors
Life Assurance Company, 1981 to date; Treasurer: Illinois
Agricultural Holding Co., 1974 to date; Illinois Agricultural
Auditing Association, 1975 to date; IAA Trust Growth Fund, Inc.(1),
1975 to date; IAA Trust Asset Allocation Fund, Inc.(1) and IAA
Trust Tax Exempt Bond Fund, Inc.(1), 1978 to date; IAA Trust
Money Market Fund, Inc.(1), 1981 to date.
Richard F. Controller 0 0 Controller: IAA Trust Company, 1974 to date; IAA Trust Growth Fund,
Day (55) since 1992 Inc.(1), IAA Trust Asset Allocation Fund, Inc.(1), IAA Trust Tax
Exempt Bond Fund, Inc. (1), and IAA Trust Money Market Fund, Inc.
(1), 1992 to date.
Paul M. Secretary 0 0 Deputy General Counsel: Illinois Agricultural Association and
Harmon since 1995 Affiliated Companies, 1991 to date. Secretary: IAA Trust Growth
(53) Fund(1), IAA Trust Asset Allocation Fund, Inc.(1), IAA Trust Money
Market Fund, Inc. (1) and IAA Trust Tax Exempt Bond Fund, Inc.(1),
1995 to date.
</TABLE>
<TABLE>
<S> <C>
(1) IAA Trust Growth Fund, Inc. was formerly Country Capital Growth Fund, Inc. IAA Trust Asset Allocation Fund,
Inc. was formerly IAA Trust Income Fund, Inc., formerly Country Capital Income Fund, Inc. IAA Trust Tax
Exempt Bond Fund, Inc. was formerly Country Capital Tax Exempt Bond Fund, Inc. IAA Trust Money Market
Fund, Inc. was formerly Country Capital Money Market Fund, Inc.
(2) Interested Directors: all Directors classified by the Funds as Interested Directors also serve as directors of Illinois
Agricultural Association, Illinois Agricultural Holding Co., Country Life Insurance Company, Country Mutual
Insurance Company, and Country Capital Management Company. Certain Directors also serve as directors of IAA
Trust Company. The purpose of the IAA Foundation is to carry out charitable, scientific, literary and educational
work in the field of agriculture. Country Life Insurance Company owns all of the outstanding stock of Country
Capital Management Company.
(3) The mailing address for all the Funds' Officers and Directors is in care of the IAA Trust Funds, 808 IAA
Drive, Bloomington, Illinois 61702.
(4) CC Services, Inc. was organized to provide insurance brokerage, administrative, marketing and other services
to the insurance companies affiliated with the Illinois Agricultural Association.
</TABLE>
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
Country Life Insurance Company
As of October 2, 1995, Country Life Insurance Company ("Country Life")
owned 439,945 shares or 10.38% of the outstanding shares of the Growth Fund,
247,948 shares or 31.46% of the outstanding shares of the Asset Allocation Fund,
and 2,500,000 shares or 6.30% of the outstanding shares of the Money Market
Fund.
Substantially all of the issued and outstanding voting securities of Country
Life are owned by Illinois Agricultural Holding Co. and approximately 98% of the
outstanding voting securities of this latter company are owned by Illinois
Agricultural Association. Each of these companies is incorporated in Illinois.
Country Life's home office is at 1711 G.E. Road, Bloomington, Illinois. The home
office address for both Illinois Agricultural Holding Company and Illinois
Agricultural Association is 1701 Towanda Avenue, Bloomington, Illinois. For the
effect of Country Life's stock ownership in the Funds on other Fund
shareholders, see the section titled "CAPITAL STOCK" in the Funds' Prospectus.
Country Mutual Insurance Company
As of October 2, 1995, Country Mutual Insurance Company ("Country Mutual")
owned 248,175 shares or 11.14% of the outstanding shares of the Tax-Exempt Bond
Fund.
Country Mutual has sole voting and investment power with respect to the common
stock which it owns in this Fund. Through proxies, voting control of Country
Mutual is in Illinois Agricultural Association. Each of these companies is
incorporated in Illinois with home office addresses at 1701 Towanda Avenue,
Bloomington, Illinois. For the effect of Country Mutual's stock ownership in the
Fund on other Fund shareholders, see the section titled "CAPITAL STOCK" in the
Funds' Prospectus.
IAA Trust Company
As of October 2, 1995, IAA Trust Company owned of record 1,571,091 shares
or 37.08% of the issued and outstanding capital stock of the Growth Fund,
378,760 shares or 48.06% of the issued and outstanding capital stock of the
Asset Allocation Fund, and 32,572,553 shares or 82.03% of the issued and
outstanding capital stock of the Money Market Fund.
IAA Trust Company's address is 808 IAA Drive, Bloomington, Illinois. Illinois
Agricultural Holding Co. owns 100% of the outstanding voting securities of the
Trust Company.
Officers and Directors
As of October 2, 1995, the Officers and Directors of the Funds as a group
beneficially owned, directly or indirectly, less than 1% of the issued and
outstanding capital stock of any Fund.
INVESTMENT ADVISORY AND OTHER SERVICES
Controlling Shareholders
For the names of all controlling persons of IAA Trust Company, see section
titled "WHO MANAGES THE FUNDS" in the Funds' Prospectus.
Fund Officers Affiliated with Adviser
Fund Officers and Directors who are also Officers or Directors of IAA Trust
Company are set forth in the section titled "WHO MANAGES THE FUNDS" in the
Funds' Prospectus.
The Investment Adviser
IAA Trust Company, as Investment Adviser to the Funds, advises each Fund as to:
investing its capital; continually reviews its investment portfolio and
recommends changes that appear desirable; furnishes statistical and research
information, office space, facilities, and equipment required for each Fund; and
pays the compensation of Directors, Officers, and employees of the Funds who are
also Directors, Officers, and employees of IAA Trust Company. For these services
performed and expenses assumed, each Fund pays IAA Trust Company the annual fees
as shown below. Such fees are computed on a daily basis and are paid monthly.
The Growth Fund pays approximately .75% of 1% in any fiscal year of its
average net assets. For the fiscal years ended June 30, 1993, 1994 and 1995, IAA
Trust Company received $520,382, $497,296 and $476,164, respectively, for its
services as Investment Adviser to the Fund. Neither IAA Trust Company nor any
Company affiliated with it receives any brokerage commissions from the Fund, as
such business is transacted with non-affiliated broker-dealers.
The Asset Allocation Fund pays approximately .75% of 1% in any fiscal year
of its average net assets. For the fiscal years ended June 30, 1993, 1994 and
1995, IAA Trust Company received $37,307 and $58,895 and $67,275, respectively,
for its services as Investment Adviser to the Fund. Neither IAA Trust Company
nor any Company affiliated with it receives any brokerage commissions from the
Fund, as such business is transacted with non-affiliated broker-dealers.
The Tax Exempt Bond Fund pays approximately .50% of 1% in any fiscal year
of its average net assets. For the fiscal years ended June 30, 1993, 1994 and
1995, IAA Trust Company received $93,945, $100,624 and $93,589, respectively,
for its services as Investment Adviser to the Fund. Neither IAA Trust Company
nor any Company affiliated with it receives any brokerage commissions from the
Fund, as such business is transacted with non-affiliated broker-dealers.
The Money Market Fund pays approximately .50% of 1% in any fiscal year of
its average net assets. For the fiscal year ended June 30, 1993, IAA Trust
Company received $16,331 for investment advisory services. For the fiscal year
ended June 30, 1994, IAA Trust Company earned $182,832 for its services as
Investment Adviser to the Fund, all of which was voluntarily waived. For the
fiscal year ended June 30, 1995, IAA Trust Company earned $178,518 for
investment advisory services and voluntarily agreed to waive fees totalling
$86,900. The Advisor is currently not waiving any of its investment advisory
fees. Neither IAA Trust Company nor any Company affiliated with it receives any
brokerage commissions from the Fund, as such business is transacted with
non-affiliated broker-dealers.
The Distributor
Fund/Plan Broker Services, Inc. ("FPBS") is the primary and exclusive
Distributor of the Funds' shares, pursuant to Underwriting Agreements with each
Fund. As Distributor, FPBS will use its best efforts to effect such
distributions, but it is required to take and pay for only such securities as it
sells to the public. Commissions for the sale of shares received by FPBS do not
represent compensation paid by the Funds to FPBS and are not expenses of the
Funds.
12b-1 Plan
The shareholders of the Growth Fund, the Asset Allocation Fund, and the Tax
Exempt Bond Fund have adopted respective Plans of Distribution pursuant to Rule
12b-1 under the Investment Company Act of 1940. During the fiscal year ended
June 30, 1995, the Growth Fund paid $2,597 to FPBS from its Distribution
Plan. During the fiscal year ended June 30, 1995, the Asset Allocation Fund
paid $1,940 to FPBS from its Distribution Plan. During the fiscal year
ended June 30, 1995, the Tax Exempt Bond Fund paid $7,979 to FPBS from
its Distribution Plan. See "DISTRIBUTION PLANS" in the Funds' Prospectus.
The Transfer Agent
Fund/Plan Services, Inc. ("FPS") is the Funds' Transfer and Dividend Disbursing
Agent and as such performs all shareholder services for the Funds. As part of
these services, FPS will maintain records pertaining to the sale, redemption,
and transfer of Fund shares and will distribute each Fund's cash dividends to
shareholders. For such services, each Fund will pay FPS fees which management
believes are comparable to fees charged by others who perform such transfer
agency services.
The Growth Fund paid FPS for the fiscal years ended June 30, 1993, 1994 and
1995, $92,579, $83,386 and $68,022, respectively. These fees were for transfer
and dividend disbursing agent services.
The Asset Allocation Fund paid FPS for the fiscal years ended June 30,
1993, 1994 and 1995, $15,599, $15,771 and $11,101, respectively. These fees were
for transfer and dividend disbursing agent services.
The Tax Exempt Bond Fund paid FPS for the fiscal years ended June 30, 1993,
1994 and 1995, $18,785, $28,536 and $21,475, respectively. These fees were for
transfer and dividend disbursing agent services.
The Money Market Fund paid FPS for the fiscal years ended June 30, 1993,
1994 and 1995, $52,656, $71,526 and $41,216, respectively. These fees were for
transfer and dividend disbursing agent services.
Accounting Services
The Funds have entered into Accounting Services Agreements with FPS. These
Agreements require FPS to calculate each Fund's net asset value in accordance
with the provisions of the Funds' current Prospectus and to prepare for Fund
approval and use various government reports, tax returns, and proxy materials.
Each Fund will pay a minimum fee of $25,000 for these services and additional
fees based on declining percentages of their respective average net assets in
excess of $10,000,000. Management believes the fees for these services are
comparable to those charged by others who perform such accounting services.
The Growth Fund paid FPS for the fiscal years ended June 30, 1993, 1994 and
1995, $58,043, $45,128 and $44,673, respectively.
The Asset Allocation Fund paid FPS for the fiscal years ended June 30,
1993, 1994 and 1995, $25,785, $25,089 and $25,883, respectively.
The Tax Exempt Bond Fund paid FPS for the fiscal years ended June 30, 1993,
1994 and 1995, $30,627, $29,049 and $30,271, respectively.
The Money Market Fund paid FPS for the fiscal years ended June 30, 1993,
1994 and 1995, $28,713, $39,106 and $35,458, respectively.
Administrative Services
The Funds have entered into Administration Agreements with FPS. These Agreements
provide that the Administrator shall provide all administrative services to each
Fund other than those relating to the investment portfolio of the Funds, the
distribution of the Funds and the maintenance of each Fund's financial records.
The fees for these services are based on declining percentages of each Fund's
average net assets beginning at .0015% of the first $50,000,000 of average net
assets, .0007% on the next $50,000,000 of average net assets, and .0005% over
$100,000,000 of average net assets. The Funds are, however, required to pay
minimum annual administrative fees. The minimum annual fee for the Growth Fund
is $50,000. The minimum annual administrative fee for each of the Asset
Allocation Fund, the Tax Exempt Bond Fund, and the Money Market Fund is $10,000.
For the fiscal year ended June 30, 1995, the Growth Fund paid $61,289 to
FPS for administrative services.
For the fiscal year ended June 30, 1995, the Asset Allocation Fund paid
$10,009 to FPS for administrative services.
For the fiscal year ended June 30, 1995, the Tax Exempt Bond Fund paid
$18,089 to FPS for administrative services.
For the fiscal year ended June 30, 1995, the Money Market Fund paid
$34,763 to FPS for administrative services.
The Custodian
IAA Trust Company, 808 IAA Drive, Bloomington, Illinois 61702, serves as
Custodian for the Funds and all securities and cash of each Fund will be held by
it. None of the Directors, Officers or other employees of the Funds ever have
personal possession of any Fund's investments. The Custodian attends to the
collection of principal and income, pays and collects all monies for securities
bought and sold by each Fund, and performs certain other ministerial duties.
These services do not include any managerial or policy making functions of the
Funds. The Funds have agreed to pay the Custodian such compensation as may be
agreed upon from time to time, but currently the Custodian is voluntarily
waiving the receipt of any fees for custodial services.
Independent Accountants
The accounting firm of Coopers & Lybrand L.L.P., 2400 Eleven Penn Center,
Philadelphia, Pennsylvania, has been designated as Auditors for each Fund.
Coopers & Lybrand L.L.P. performs annual audits of each Fund and is periodically
called upon to provide accounting and tax advice.
BROKERAGE
THE GROWTH FUND and THE ASSET ALLOCATION FUND:
These Funds always seek to effect their respective transactions in buying and
selling portfolio securities, acting through a broker as agent or with a dealer
as principal so that they can obtain reasonable execution at the most favorable
prices. Accordingly, each Fund, through IAA Trust Company, the Investment
Adviser, negotiates commission rates in accordance with the reliability and
quality of a broker's or dealer's services, the financial condition of the firm
and the value and expected contribution of the broker-dealer to the performance
of the Fund on a continuing basis. Thus, what a Fund determines to be the most
favorable commission price may be higher than the lowest available price. In
evaluating the overall reasonableness of brokerage commissions paid, the Fund
through its Investment Adviser, maintains an awareness of general practices with
regard to commission levels and rates charged by reputable brokerage firms.
While there is no undertaking or agreement with any broker or dealer to do so,
either Fund may, subject to the primary brokerage allocation criterion that a
Fund obtain reasonable execution at the most favorable prices, place orders for
the purchase or sale of portfolio securities with brokers or dealers who have
provided research, statistical, or other financial information to the Fund or
its Investment Adviser. Brokerage house research generally provides economic and
financial market analysis as well as industry studies and investment analysis of
individual companies or entities.
The primary brokerage allocation criterion of the Funds is that each Fund obtain
reasonable execution at the most favorable prices. If two or more brokers or
dealers meet this criterion, a Fund may, although there is no undertaking or
agreement with any broker or dealer to do so or any specific internal allocation
procedure, place orders for the purchase or sale of portfolio securities with
brokers or dealers who have provided research, statistical or other financial
information to the Fund or its Investment Adviser. Research information obtained
from brokers and dealers while servicing the Fund may be used by IAA Trust
Company in servicing all of its accounts and, conversely, research information
obtained from brokers and dealers while servicing other accounts may be used by
IAA Trust Company in servicing the Fund. Further, all research information
obtained from brokers and dealers while serving the Fund may not be used by the
Fund.
Over-the-counter transactions are usually placed with a principal market maker
unless a better net security price is obtainable elsewhere.
During the fiscal years ended June 30, 1993, 1994 and 1995, brokerage
commissions paid by the Growth Fund totaled $178,097, $135,169 and $64,267,
respectively. No brokerage transactions were allocated to brokers or dealers for
the sale of the Fund's shares; such sales are made by Fund/Plan Broker Services,
Inc. and Country Capital Management Company through their own representatives.
During the fiscal years ended June 30, 1993, 1994 and 1995, brokerage
commissions paid by the Asset Allocation Fund totaled $3,364, $4,558 and $6,980,
respectively. No brokerage transactions were allocated to brokers or dealers for
the sale of the Fund's shares; such sales are made by Fund/Plan Broker Services,
Inc. and Country Capital Management Company through their own representatives.
There may be occasions when portfolio transactions for these Funds are executed
as part of concurrent authorizations to purchase or sell the same security for
other Funds served by IAA Trust Company. Although such concurrent authorizations
potentially could be either advantageous or disadvantageous to a Fund, they are
effected only when a Fund, acting on the advice of IAA Trust Company, believes
that to do so is in the interest of such Fund. When such concurrent
authorizations occur, the executions will be allocated in an equitable manner.
THE TAX EXEMPT BOND FUND:
This Fund always seeks to effect its transactions in buying and selling
portfolio securities, acting through a broker as agent or with a dealer as
principal so that it can obtain reasonable execution at the most favorable
prices. Accordingly, the Fund, through IAA Trust Company, its Investment
Adviser, negotiates commission rates in accordance with the reliability and
quality of a broker's or dealer's services, the financial condition of the firm
and the value and expected contribution of the broker-dealer to the performance
of the Fund on a continuing basis. Thus, what the Fund determines to be the most
favorable commission price may be higher than the lowest available price. In
evaluating the overall reasonableness of brokerage commissions paid, the Fund
through its Investment Adviser, maintains an awareness of general practices with
regard to commission levels and rates charged by reputable brokerage firms.
The primary brokerage allocation criterion of the Fund is that the Fund obtain
reasonable execution at the most favorable prices. If two or more brokers or
dealers meet this criterion, the Fund may, although there is no undertaking or
agreement with any broker or dealer to do so or any specific internal allocation
procedure, place orders for the purchase or sale of portfolio securities with
brokers or dealers who have provided research, statistical or other financial
information to the Fund or its Investment Adviser. Brokerage house research
generally provides economic and financial market analysis as well as industry
studies and investment analysis of individual companies or entities.
It is the opinion of the Investment Adviser that the furnishing of research,
statistical, and other financial information to either the Fund or the
Investment Adviser by brokers and dealers will not materially reduce the cost to
the Investment Adviser of fulfilling the terms of its advisory contract with the
Fund because the Investment Adviser must review and analyze such information
along with all other information available to it. Research information obtained
from brokers and dealers while servicing the Fund may be used by IAA Trust
Company in servicing all of its accounts and, conversely, research information
obtained from brokers and dealers while servicing other accounts may be used by
IAA Trust Company in servicing the Fund. Further, all research information
obtained from brokers and dealers while serving the Fund may not be used by the
Fund.
During the fiscal years ended June 30, 1993, 1994 and 1995, all
transactions for the Tax Exempt Bond Fund were placed with a principal market
dealer. No commissions as such are paid on transactions with the principal
market dealer as the asked price on such transactions usually includes an
allowance for such compensation.
No brokerage transactions are allocated to brokers or dealers for the sale of
the Fund's shares; such sales are made by Fund/Plan Broker Services, Inc. and
Country Capital Management Company through their own representatives.
There may be occasions when portfolio transactions for this Fund are executed as
part of concurrent authorizations to purchase or sell the same security for
other Funds served by IAA Trust Company. Although such concurrent authorizations
potentially could be either advantageous or disadvantageous to a Fund, they are
effected only when a Fund, acting on the advice of IAA Trust Company, believes
that to do so is in the interest of such Fund. When such concurrent
authorizations occur, the executions will be allocated in an equitable manner.
THE MONEY MARKET FUND:
This Fund, acting on recommendations received from its Investment Adviser, IAA
Trust Company, expects that purchases and sales of portfolio securities usually
will be principal transactions. Portfolio securities will normally be purchased
directly from the issuer or from an underwriter or a market maker for the
securities. Usually, no brokerage commissions will be paid on such purchases.
Purchases from underwriters of portfolio securities will include a concession
paid by the issuer to the underwriter and the purchase price paid to market
makers for money market instruments may include the spread between the bid and
asked price.
The primary consideration in the allocation of portfolio transactions will be
prompt and effective execution of orders at the most favorable price. If two or
more brokers or dealers meet this criterion, the Fund may, although there is no
undertaking or agreement with any broker or dealer to do so or any specific
internal allocation procedure, place orders for the purchase or sale of
portfolio securities with brokers or dealers who have provided research,
statistical, or other financial information to the Fund or its investment
adviser. Brokerage house research generally provides economic and financial
market analysis as well as industry studies and investment analysis of
individual companies or entities. Such information is of the kind generally
supplied by broker-dealers to their customers without obligation. This
information may be used by IAA Trust Company to supplement its own research and
analysis. Although it is not possible to place a dollar value on this
information, it is the opinion of IAA Trust Company that the receipt and study
of such information does not reduce its expenses. Research information obtained
from brokers and dealers while servicing the Fund may be used by IAA Trust
Company in servicing all of its accounts and, conversely, research information
obtained from brokers and dealers while servicing other accounts may be used by
IAA Trust Company in servicing the Fund. Further, not all research information
obtained from brokers and dealers while servicing the Fund may be used by the
Fund.
During the fiscal years ended June 30, 1993, 1994 and 1995, the Money
Market Fund incurred no brokerage commissions.
There may be occasions when portfolio transactions for this Fund are executed as
part of concurrent authorizations to purchase or sell the same security for
other Funds served by IAA Trust Company. Although such concurrent authorizations
potentially could be either advantageous or disadvantageous to a Fund, they are
effected only when a Fund, acting on the advice of IAA Trust Company, believes
that to do so is in the interest of such Fund. When such concurrent
authorizations occur, the executions will be allocated in an equitable manner.
PURCHASES, REDEMPTIONS, AND PRICING OF FUND SECURITIES
For the method followed by the Funds in determining the total offering price at
which each Fund's securities are offered to the public and the method used to
value each Fund's assets, see sections titled "HOW TO BUY SHARES", "SPECIAL
PLANS AND OTHER PURCHASE INFORMATION", "HOW THE VALUE OF YOUR SHARES IS
DETERMINED", and "HOW TO REDEEM YOUR SHARES" in the Funds' Prospectus. See the
following for additional information on various special Plans the Funds offer to
investors.
Rights of Accumulation
For those who already have an account with either the Growth Fund, the Asset
Allocation Fund, the Tax Exempt Bond Fund, or the Money Market Fund, and who are
not eligible for sales charge waivers on the first three Funds, reduced sales
charges in accordance with the scale in the Prospectus under "HOW TO BUY SHARES"
are also applicable to subsequent purchases by "persons" defined in that section
of the Prospectus. The sales charge, if not waived, on each additional purchase
is determined by adding to the amount of the new investment, the current
redemption value of shares already owned by the investor in another IAA Trust
Fund. The corresponding sales charge percentage is then applied to the entire
amount of the new investment -- not just the amount that exceeds the breakpoint.
For example, if you already own shares with a current redemption value of $2,500
and you make an additional investment of $7,500, the sales charge applicable to
the $7,500 investment would be reduced to 2%.
Exchange Privileges
A shareholder may exchange his/her shares of one IAA Trust Fund for shares of
another IAA Trust Fund on the basis of the relative net asset values per share
of each Fund at the time of the exchange. When shares of one Fund are exchanged
for shares of another Fund, the minimum investment requirement of such other
Fund must be met. An exchange of shares among the Growth Fund, the Asset
Allocation Fund, and the Tax Exempt Bond Fund will not result in a sales charge.
The two ways to exchange shares, by mail and by telephone, are discussed below.
By Mail: The exchange can be made by forwarding a written request signed by the
registered shareholder(s) and returning any outstanding certificates needed to
effect the exchange to Fund/Plan Broker Services, Inc. ("FPBS"), c/o Fund Plan
Services, Inc., #2 Elm Street, P.O. Box 874, Conshohocken, Pennsylvania 19428.
By Telephone: You may make the exchange by telephone provided that: (1) you have
elected the Telephone Exchange option on the initial application or have
authorized this option after your initial purchase; (2) the registration of the
accounts will be identical; and (3) the shares to be exchanged are not in
certificate form. You can call toll-free 1 (800) 245-2100 on any business day.
All telephone conversations with FPBS will be recorded. Neither the Funds,
Country Capital Management Company, or FPBS will be responsible for the
authenticity of the exchange instructions received by telephone.
An exchange is effected by redemption of shares of one Fund and the issuance of
shares of the other Fund selected, and only after delivery of the current
Prospectus. With respect to an exchange among the Growth Fund, the Asset
Allocation Fund, and the Tax Exempt Bond Fund, a capital gain or loss for
Federal income tax purposes will be realized upon the exchange, depending upon
the cost or other basis of the shares redeemed. With respect to the Money Market
Fund, assuming such Fund maintains its share value at $1.00 per share, an
exchange of this Fund's shares for shares of another IAA Trust Fund should not
create a Federal income tax incident, except for the establishment of a new
holding period.
One-Time Reinvestment Privilege Without Sales Charge
Within thirty calendar days after redemption, shareholders who redeem all or
part of their shares from an IAA Trust Fund have a one-time privilege of
reinvesting in shares of the Fund from which they redeemed, or investing in any
other IAA Trust Fund, without a sales charge and up to the dollar amount
received for the redeemed shares.
With respect to the Growth Fund, the Asset Allocation Fund, and the Tax Exempt
Bond Fund, the reinvestment or exchange will be made at the net asset value next
computed after the request is received by the selected Fund in proper form and
will be limited to the amount of the redemption proceeds. If a shareholder has
realized a capital gain on the redemption, the transaction is taxable and
reinvestment will not alter any capital gains tax payable. If there has been a
loss on redemption and a subsequent reinvestment is made in a Fund, some or all
of the loss will not be allowed as a tax deduction depending on the amount
reinvested.
With respect to the Money Market Fund, if any of this Fund's shares acquired by
an exchange of shares with the other IAA Trust Funds are redeemed, you have a
one-time privilege (within thirty calendar days after redeeming) to reinvest in
such Fund and re-exchange such shares for shares of any other IAA Trust Fund.
This would eliminate the sales charge, if not waived, that you would otherwise
pay on such reinvestment. Assuming that this Fund maintains its share value at
$1.00 per share, such a re-exchange would not create a Federal income tax
incident, except for the establishment of a new holding period.
Retirement Plans
IAA Trust Company sponsors a prototype Defined Contribution Plan which has been
approved by the Internal Revenue Service and which meets the requirement of the
Tax Reform Act of 1986, as amended. This Plan can invest in shares of the Growth
Fund, the Asset Allocation Fund, or the Money Market Fund. Contributions to the
Plan of up to $30,000 or 25% of earned income, whichever is the lesser, may be
made each year and subtracted from gross income at tax time.
For individuals eligible to establish an Individual Retirement Account (IRA),
IAA Trust Company sponsors a prototype individual retirement Plan which has been
approved by the Internal Revenue Service. An individual may be able to deduct
contributions made to such a Plan up to an annual amount of $2,000 or 100% of
compensation, whichever is less. The deductibility of contributions to an IRA by
taxpayers who are participants in an employer's retirement plan is determined by
the amount of taxpayer's adjusted gross income. If a joint tax return is filed,
a married person whose spouse is not employed may contribute up to $2,250
annually to be divided in any manner between the individual's IRA and the IRA
established for the nonworking spouse so long as no more than $2,000 is
contributed in any one year to either IRA. The deductibility of contributions to
an IRA by taxpayers who are active participants in an employer's retirement plan
is determined by the amount of the taxpayer's adjusted gross income. "Rollover
contributions" from certain other tax-qualified plans may also be made to this
Plan. The custodial fee for this Plan is currently $15.00 per year on any
portion thereof for all IAA Trust Company IRA accounts held by one participant
and his/her spouse (if any). Possible penalties may be imposed for excess
IRA contributions, premature withdrawals or insufficient distributions after
age 701/2.
An investor considering either the Defined Contribution Plan or the IRA Plan
should consult with his or her attorney with respect to Plan requirements and
tax implications. Other information relating to eligibility and service fees may
be obtained by reading the prototype Plans and, in the case of the IRA, by
reading the disclosure statement which the IRA requires to be furnished to
individuals who are considering the adoption of an IRA.
For more information about these Plans, contact IAA Trust Company, 808 IAA
Drive, Bloomington, Illinois 61702 or call toll-free 1 (800) 422-8261.
Automatic Investing
A shareholder may authorize Systematic Investing through automatic withdrawals
from his/her bank accounts.
Systematic Withdrawal Plan
Shareholders who purchase or already own $5,000 or more of any Fund's shares,
valued at the current public offering price, and who wish to receive periodic
payments may establish a Systematic Withdrawal Plan by completing an application
provided by FPBS for this purpose. Such planholders will receive monthly,
quarterly or annual checks in the amount they designate. While no particular
withdrawal amount is necessarily recommended, the minimum is $25. The amount of
payment may be changed at any time. Dividends and capital gains distributions on
a Fund's shares in the Plan are automatically reinvested in additional shares at
net asset value, without a sales charge. All certificates for shares deposited
under this Plan must be surrendered and no certificates will be issued unless
the Plan is terminated. Payments are made from the proceeds derived from the
redemption of Fund shares owned by the planholder. With respect to the Growth
Fund, the Asset Allocation Fund, and the Tax Exempt Bond Fund, each redemption
of shares may result in a gain or loss which is reportable by the investor on
his income tax return.
The maintenance of a Systematic Withdrawal Plan, while making Systematic
Investments, is disadvantageous because the shareholder would unnecessarily be
paying a sales charge (with respect to the Growth Fund, the Asset Allocation
Fund, and the Tax Exempt Bond Fund) on the purchase of shares while redeeming
similar shares at net asset value. For this reason, an investor should not
ordinarily have a Systematic Withdrawal Plan in effect while making Systematic
Investments. Redemptions required for payments may reduce or use up the
planholder's investment, depending upon the size of payment and market
fluctuations, if applicable. Accordingly, Plan payments cannot be considered as
yield or income on the investment. Additional purchases may be made under the
Systematic Withdrawal Plan in amounts of $5,000 or more.
Fund/Plan Services, Inc., ("FPS") as agent for the shareholder, may make a
charge for services rendered beyond those normally assumed by the Funds. No such
charge is currently assessed, but such a charge may be instituted by FPS upon
notice in writing to shareholders. This Plan may be terminated at any time
without penalty upon written notice by the shareholder, by the Funds, or by FPS.
UNDERWRITER COMPENSATION
Shares of the Funds are continuously offered to the public through Fund/Plan
Broker Services, Inc. ("FPBS").
Currently, out of commissions to be received, FPBS has agreed to pay all
expenses incident to the distribution of shares. If commissions are not
sufficient to pay these expenses, FPBS will look to the Funds' Investment
Adviser for reimbursement. For the fiscal year ended June 30, 19945, FPBS
received no underwriting fees.
However, as Distributor, FPBS receives as compensation those portions of the
applicable sales charges which are not re-allowed to the dealers who sell shares
of the Growth Fund, the Asset Allocation Fund, and the Tax Exempt Bond Fund.
For additional information, see "WHO DISTRIBUTES THE FUNDS SHARES" in the Funds'
Prospectus.
INVESTMENT PERFORMANCE INFORMATION
From time to time, the Funds advertise their various respective performance
measures, such as: 7- or 30-day yield; tax- equivalent yield; total percentage
increase; and total return. Performance will vary and the results shown herein
and in the Funds' Prospectus are historical information and will not be
representative of future results. Factors affecting the Funds' performance
include general market conditions, operating expenses, and portfolio management.
No adjustment has been made for taxes payable on dividends and distributions.
Total Return Calculations
With respect to the Growth Fund, the Asset Allocation Fund, and the Tax Exempt
Bond Fund, these Funds that compute their average annual total returns do so by
determining the average annual compounded rates of return during specified
periods that equate the initial amount invested to the ending redeemable value
of such investment. This is done by dividing the ending redeemable value of a
hypothetical $1,000 initial payment by $1,000 and raising the quotient to a
power equal to one divided by the number of years (or fractional portion
thereof) covered by the computation and subtracting one from the result. This
calculation can be expressed as follows:
1/n
(ERV)
--- 1
Average Annual Total Return P
<TABLE>
<S> <C> <C>
Where: ERV = ending redeemable value at the end of the period covered by the computation of a
hypothetical $1,000 payment made at the beginning of the period.
P = hypothetical initial payment of $1,000.
n = period covered by the computation, expressed in terms of years.
</TABLE>
The Funds that compute their aggregate total returns over a specified period do
so by determining the aggregate compounded rate of return during such specified
period that likewise equates over a specified period the initial amount invested
to the ending redeemable value of such investment. The formula for calculating
aggregate total return is as follows:
(ERV)
--- 1
Average Total Return P
<TABLE>
<S> <C> <C>
Where: ERV = ending redeemable value at the end of the period covered by the computation of a hypothetical
$1,000 payment made at the beginning of the period.
P = hypothetical initial payment of $1,000.
</TABLE>
The calculations of average annual total return and aggregate total return
assume the reinvestment of all dividends and capital gain distributions on the
reinvestment dates during the period. The ending redeemable value (variable
"ERV" in each formula) is determined by assuming complete redemption of the
hypothetical investment and the deduction of all nonrecurring charges at the end
of the period covered by the computations. Such calculations are not necessarily
indicative of future results and do not take into account Federal, state and
local taxes that shareholders must pay on a current basis.
Since performance will fluctuate, performance data for the Funds should not be
used to compare an investment in a Fund's shares with bank deposits, savings
accounts and similar investment alternatives which often provide an agreed or
guaranteed fixed yield for a stated period of time. Shareholders should remember
that performance is generally a function of the kind and quality of the
instruments held in a portfolio, portfolio maturity, operating expenses and
market conditions.
30-day Yield Calculations
With respect to the Asset Allocation Fund and the Tax Exempt Bond Fund, the
yield of each of these Funds is calculated by dividing the net investment income
per share (as described below) earned by the Fund during a 30-day (or one month)
period by the maximum offering price per share on the last day of the period and
annualizing the result on a semi-annual basis by adding one to the quotient,
raising the sum to the power of six, subtracting one from the result and then
doubling the difference. A Fund's net investment income per share earned during
the period is based on the average daily number of shares outstanding during the
period entitled to receive dividends and includes dividends and interest earned
during the period minus expenses accrued for the period, net of reimbursements.
This calculation can be expressed as follows:
6
YIELD = 2 [ ( a - b + 1) - 1 ]
-----
cd
<TABLE>
<S> <C> <C>
Where: a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements).
c = the average daily number of shares outstanding during the period that
were entitled to receive dividends.
d = maximum offering price per share on the last day of the period.
</TABLE>
For the purpose of determining net investment income earned during the period
(variable "a" in the formula), dividend income on equity securities held by a
Fund is recognized by accruing 1/360 of the stated dividend rate of the security
each day that the security is in the Fund. Except as noted below, interest
earned on any debt obligations held by a Fund is calculated by computing the
yield to maturity of each obligation held by that Fund based on the market value
of the obligation (including actual accrued interest) at the close of business
on the last business day of the month, the purchase price (plus actual accrued
interest) and dividing the result by 360 and multiplying the quotient by the
market value of the obligation (including actual accrued interest) in order to
determine the interest income on the obligation for each day of the subsequent
month that the obligation is held by that Fund. For purposes of this
calculation, it is assumed that each month contains thirty days. The date on
which the obligation reasonably may be expected to be called or, if none, the
maturity date. With respect to debt obligations purchased at a discount or
premium, the formula generally calls for amortization of the discount premium.
The amortization schedule will be adjusted monthly to reflect changes in the
market values of such debt obligations.
Expenses accrued for the period (variable "b" in the formula) include all
recurring fees charged by a Fund to all shareholder accounts in proportion to
the length of the base period and the Fund's mean (or median) account size.
Undeclared earned income will be subtracted from the offering price per capital
share (variable "d" in the formula).
With respect to the Tax Exempt Bond Fund, interest earned on tax-exempt
obligations that are issued without original issue discount and have a current
market discount is calculated by using the coupon rate of interest instead of
the yield to maturity. In the case of tax-exempt obligations that are issued
with original issue discount but which have discounts based on current market
value that exceed the then-remaining portion of the original discount (market
discount), the yield to maturity is the imputed rate based on the original issue
discount calculation. On the other hand, in the case of tax-exempt obligations
that are issued with original issue discount but which have discounts based on
current market value that are less than the then-remaining portion of the
original discount (market premium), the yield to maturity is based on the market
value.
With regard to mortgage or other receivables-backed obligations which are
expected to be subject to monthly payments of principal and interest
("pay-downs"): (i) gain or loss attributable to actual monthly pay-downs are
accounted for as an increase or decrease to interest income during the period;
and (ii) a Fund may elect either (a) to amortize the discount and premium on the
remaining security, based on the cost of the security, to the weighted average
maturity date, if such information is available, or to the remaining term of the
security, if any, if the weighted average date is not available or (b) not to
amortize discount or premium on the remaining security.
Tax-Equivalent Yield Calculations
With respect to the Tax Exempt Bond Fund, the "tax-equivalent yield" of this
Fund is computed by (a) dividing the portion of the yield (calculated as above)
that is exempt from Federal income tax by one minus a stated Federal income tax
rate and (b) adding to that figure to that portion, if any, of the yield that is
not exempt from Federal income tax.
The tax equivalent yield reflects the taxable yield that an investor at the
highest marginal Federal income tax rate would have to receive to equal the
primarily tax-exempt yield from the Fund. Before investing in a tax-exempt fund,
you may want to determine which investment -- tax-free or taxable -- will result
in a higher after-tax yield. To do this, divide the yield on the tax-free
investment by the decimal determined by subtracting from 1 the highest Federal
tax rate you pay. For example, if the tax-free yield is 5% and your maximum tax
bracket is 36%, the computation is:
5% Tax-Free Yield - (1/.36 Tax Rate) = 5%/.64% = 7.8125% Tax Equivalent Yield
In this example, your after-tax return would be higher from the 5% tax-free
investment if available taxable yields are below 7.8125%. Conversely, the
taxable investment would provide a higher yield when taxable yields exceed
7.8125%.
7-day Yield Calculations
The Money Market Fund's standard yield quotations as they appear in reports and
other material distributed by the Fund or by Country Capital Management Company
are calculated by a standard method prescribed by rules of the Securities and
Exchange Commission. The yield of this Fund for a 7-day period (the "base
period") will be computed by determining the net change in value (calculated as
set forth below) of a hypothetical account having a balance of one share at the
beginning of the period, dividing the net change in account value by the value
of the account at the beginning of the base period to obtain the base period
return, and multiplying the base period return by 365/7 with the resulting yield
figure carried to the nearest hundredth of one percent.
Net changes in value of a hypothetical account will include the value of
additional shares purchased with dividends from the original share and dividends
declared on both the original share and any such additional shares, but will not
include realized gains or losses or unrealized appreciation or depreciation on
portfolio investments.
The effective yield is computed by compounding the unannualized base period
return by adding 1 to the base period return, raising the sum to a power equal
to 365 divided by 7, and subtracting one from the result, according to the
following formula:
Effective Yield = [(base period return + 1) 365/7]-1
THE GROWTH FUND:
This Fund's net asset value and return will fluctuate. Please note the
differences and similarities between the investments which the Fund may purchase
for its portfolio and the investments measured by the index which is described
in the Prospectus. Where applicable, the Fund's return has been adjusted to
reflect the maximum sales charge of 3.00%, which results in lower performance
than would have been obtained if the sales charge wasn't considered. Please
refer to the Prospectus for specific information.
THE ASSET ALLOCATION FUND:
This Fund's net asset value, return, and yield will fluctuate. The Fund's yield
for the thirty days ended June 30, 1995 was 2.87%. Yield differs from total
return in that it only considers current income and does not take into account
gains or losses on securities held by the Fund. Where applicable, the Fund's
return and yield have been adjusted to reflect the maximum sales charge of
3.00%, which results in lower performance than would have been obtained if the
sales charge wasn't considered. Please refer to the Prospectus for specific
information.
THE TAX EXEMPT BOND FUND:
This Fund's net asset value, return, and yield will fluctuate. The Fund's yield
for the thirty days ended June 30, 1995 was 4.35%. Yield differs from
total return in that it only considers current income and does not take into
account gains or losses on securities held by the Fund. Where applicable, the
Fund's return and yield have been adjusted to reflect the maximum sales charge
of 3.00%, which results in lower performance than would have been obtained if
the sales charge wasn't considered. Please refer to the Prospectus for specific
information.
The above yield results in a tax-equivalent yield of 6.80% for the thirty
days ended June 30, 1995.
THE MONEY MARKET FUND:
The yield and effective yield of this Fund will vary in response to fluctuations
in interest rates and in the expenses of the Fund. For the seven days ended June
30, 1995 the Fund's annualized standard (cash) yield was 5.19% and its
annualized effective (compound) yield was 5.33%. For comparative purposes,
the current and effective yields should be compared to current and effective
yields offered by competing financial institutions for the same base period and
calculated by the methods described above.
<PAGE>
APPENDIX
Commercial Paper Ratings
Moody's Investors Service, Inc.: "Prime-1" and "Prime-2" are Moody's two
highest commercial paper rating categories. Moody's evaluates the salient
features that affect a commercial paper issuer's financial and competitive
position. The appraisal includes, but is not limited to the review of such
factors as:
1. Quality of management.
2. Industry strengths and risks.
3. Vulnerability to business cycles.
4. Competitive position.
5. Liquidity measurements.
6. Debt structures.
7. Operating trends and access to capital markets.
Differing degrees of weight are applied to the above factors as deemed
appropriate for individual situations.
Standard & Poor's Corporation: "A-1" and "A-2" are S&P's two highest
commercial paper rating categories and issuers rated in these categories
have the following characteristics:
1. Liquidity ratios are adequate to meet cash requirements.
2. Long-term senior debt is rated "A" or better.
3. The issuer has access to at least two additional channels of borrowing.
4. Basic earnings and cash flow have an upward trend with allowance made
for unusual circumstances.
5. Typically, the issuer is in a strong position in a well-established
industry or industries.
6. The reliability and quality of management is unquestioned.
Relative strength or weakness of the above characteristics determine whether
an issuer's paper is rated "A-1" or "A-2". Additionally, within the "A-1"
designation, those issues determined to possess overwhelming safety
characteristics are denoted with a plus (+) rating category.
Bond Ratings
Standard and Poor's Corporation: An S&P bond rating is a current assessment
of the creditworthiness of an obligor with respect to a specific debt
obligation. This assessment may take into consideration obligors such as
guarantors, insurers or lessees.
The bond ratings are not a recommendation to purchase, sell or hold a
security, inasmuch as it does not comment as to market price or suitability
for a particular investor.
The ratings are based on current information furnished by the issuer or
obtained by S&P from other sources it considers reliable. S&P does not
perform any audit in connection with any ratings and may, on occasion, rely
on unaudited financial information. The ratings may be changed, suspended or
withdrawn as a result of changes in, or unavailability of, such information,
or for other circumstances.
The ratings are based, in varying degrees, on the following considerations:
I. Likelihood of default-capacity and willingness of the obligor as to
the timely payment of interest and repayment of principal in
accordance with the terms of the obligation;
II. Nature of and provisions of the obligation;
III. Protection afforded by, and relative position of, the obligation in
the event of bankruptcy, reorganization or other arrangement under the
laws of bankruptcy and other laws affecting creditor's rights.
The four highest bond ratings of S&P and their meanings are:
"AAA" Bonds rated "AAA" have the highest rating assigned by S&P to a debt
obligation. Capacity to pay interest and repay principal is extremely
strong.
"AA" Bonds rated "AA" have a very strong capacity to pay interest and
repay principal and differ from the highest rated issues only in
small degree.
"A" Bonds rated "A" have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than
bonds in higher rated categories.
"BBB" Bonds rated "BBB" are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for bonds in this category than for
bonds in higher rated categories.
Plus (+) or Minus (-): The ratings from "AA" to "BB" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
Provisional Ratings The letter "p" indicates that the rating is provisional. A
provisional ratings assumes the successful completion of the project being
financed by the bonds being rated and indicate that payment of debt service
requirements is largely or entirely dependent upon the successful and timely
completion of the project. This rating, however, while addressing credit
quality subsequent to completion of the project, makes no comment on the
likelihood of, or the risk of default upon failure of, such completion. The
investor should exercise his own judgement with respect to such likelihood and
risk.
Under present commercial bank regulations issued by the Comptroller of the
Currency, bonds rated in the top four categories ("AAA", "AA", "A", and "BBB",
commonly known as "Investment Grade" ratings) are generally regarded as
eligible for bank investment.
<PAGE>
Moody's Investors Service, Inc.: The four highest ratings of Moody's and their
meanings are:
"Aaa" Bonds which are rated "Aaa" are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred
to as "gilt edge". Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position
of such issues.
"Aa" Bonds which are rated "Aa" are judged to be of high quality by all
standards. Together with the "Aaa" group they comprise what are
generally known as high grade bonds. They are rated lower then the best
bonds because margins of protection may not be as large as in "Aaa"
securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the long-
term risks appear somewhat larger than in "Aaa" securities.
"A" Bonds which are rated "A" possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate, but
elements may be present which suggest a susceptibility to impairment
sometime in the future.
"Baa" Bonds which are rated "Baa" are considered as medium grade obligations;
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics
as well.
<PAGE>
Descriptions of Short-Term Instruments
Obligations of the U.S. Government, its Agencies and Instrumentalities:
Securities issued or guaranteed by the U.S. Government include a variety of
Treasury securities, which differ only in their interest rate, maturity and
date of issuance. Treasury bills have a maturity of one year or less.
Treasury notes have a maturity of one to ten years and Treasury bonds
generally have maturities of greater than ten years at the date of issuance.
Some obligations of U.S. Government agencies and instrumentalities such as
Treasury bills and Government National Mortgage Association pass-through
certificates, are supported by the full faith and credit of the U.S.
Treasury; others, such as securities of Federal Loan Banks, have the right
of the issuer to borrow from the Treasury; and still others, such as bonds
issued by Federal National Mortgage Association, a private corporation, are
supported only by the credit of the instrumentalities. No assurance can be
given that the U.S. Government would provide financial support to U.S.
Government instrumentalities as it is not obligated to do so by law.
Certificates of Deposit:
In essence, a certificate of deposit is a negotiable receipt issued by a
bank or savings and loan association in exchange for the deposit of funds.
The issuer agrees to pay the amount deposited plus interest to the bearer of
the receipt on the date specified on the certificate.
Bankers' Acceptances:
A bankers' acceptance generally arises from a short-term credit arrangement
designed to enable businesses to obtain funds to finance commercial
transactions. Generally, an acceptance is a time draft drawn on a bank by an
exporter or an importer to obtain a stated amount of funds to pay for
specific merchandise. The draft is then "accepted" by the bank that, in
effect, unconditionally guarantees to pay the face value of the instrument
on its maturity date.
Commercial Paper:
Commercial paper is generally defined as unsecured short-term notes issued
in bearer form by large, well-known corporations and finance companies.
Maturities on commercial paper range from a few days to nine months.
Repurchase Agreements:
Repurchase agreements are transactions in which a Fund purchases a security
(usually a U.S. Government obligation) and simultaneously obtains the
commitment of the seller (a member bank of the Federal Reserve System) to
repurchase the security at an agreed upon price on an agreed upon date
usually not more than seven days from the date of purchase. The resale price
reflects the purchase price plus an agreed upon market rate of interest
which is unrelated to the coupon rate or maturity of the purchased security.
Such transactions afford an opportunity for a Fund to earn a return on cash
which is only temporarily available. The Fund's risk is limited to the
ability of the seller to pay the agreed upon sum upon the delivery date, but
the seller's obligation is in effect secured by the value of the underlying
security. With respect to the Money Market Fund, repurchase agreements of
over seven day's duration will not be more than 10% of the assets of such
Fund.
Foreign Securities Risks
Foreign securities involve investment risk in addition to those of domestic
obligations of domestic issuers, including the possibility that: liquidity can
be impaired because of future political and economic developments; the
obligations may be less marketable than comparable domestic obligations of
domestic issuers; a foreign jurisdiction might impose withholding taxes or
interest income payable on these obligations; deposits may be seized or
nationalized; foreign governmental restrictions such as exchange controls may
be adopted which might adversely affect the payment of principal and interest
on those obligations; the selection of foreign bank obligations might be more
difficult because there may be less publicly available information concerning
foreign banks; there may be difficulties in obtaining or enforcing a judgement
against a foreign bank; or the accounting, auditing and financial reporting
standards, practices and requirements applicable to foreign banks may differ
from those applicable to U.S. banks. Foreign banks are not subject to
examination by any U.S. Government agency or instrumentality.
IAA Trust Mutual Funds - Portfolio Highlights
IAA Trust Growth Fund, Inc.
Portfolio Changes For the Year Ended June 30, 1995
<TABLE>
<CAPTION>
Major Purchases Major Sales
<S> <C>
American Stores Co. (1) Adaptec, Inc. (2)
Engelhard Corp. (1) Burlington Resources, Inc. (2)
Green Tree Financial Corp. (1) Intel Corp.
Mylan Labs Fleetwood Enterprises (2)
NICOR, Inc. (1) TNT Freightways, Inc. (2)
Royal Dutch Petroleum Co. ADR (1) VLSI Technology (2)
VeriFone, Inc. (1) YPF-Sociedad Anonima (2)
(1) New Holdings (2) Deletions
</TABLE>
<TABLE>
<CAPTION>
Ten Largest Holdings June 30, 1995
Percent
Value of Fund
----- -------
<S> <C> <C>
Motorola, Inc. . . . . . . . . . . . $ 2,685,000 3.80%
Intel Corp. . . . . . . . . . . . . 2,532,500 3.59
General Electric Co. . . . . . . . . 2,255,000 3.20
Green Tree Financial Corp. . . . . . 1,775,000 2.52
Hewlett-Packard Co. . . . . . . . 1,758,200 2.49
MBNA Corp. . . . . . . . . . . . . . 1,687,500 2.39
DPL, Inc. . . . . . . . . . . . . 1,659,375 2.35
Cisco Systems. . . . . . . . . . . . 1,618,000 2.29
Sun Microsystems . . . . . . . . . . 1,600,500 2.27
Exxon Corp. . . . . . . . . . . . . 1,589,062 2.25
----------- -----
$19,160,137 27.15%
=========== =====
</TABLE>
IAA Trust Asset Allocation Fund, Inc.
Portfolio Changes For the Year Ended June 30, 1995
<TABLE>
<CAPTION>
Major Purchases Major Sales
<S> <C>
Federal Home Loan Bank, 8.000%, 9/20/04 (1) New England Telephone Co. (2)
United States Treasury Notes, 6.875%, 7/31/99 (1) 7.875%, 11/15/29
United States Treasury Notes, 7.250%, 8/15/04 (1) United States Treasury Bonds.(2)
Federal Farm Credit Bank (1) 8.875%, 8/15/17
5.800%, 12/18/00 Medtronic, Inc. (2)
Invacare, Corp. (1) Pitney Bowes (2)
Xerox Corporation (1) General Motors Corp.(2)
Harley-Davidson, Inc. (1) Cott Corp. (2)
(1) New Holdings (2) Deletions
</TABLE>
Ten Largest Holdings June 30, 1995
<TABLE>
<CAPTION>
Percent
Value of Fund
----- -------
<S> <C> <C>
International American Devel. Bank, 8.875%, 06/01/09 . . . . . $ 242,000 2.54%
Bell of Pennsylvania, 8.350%, 12/15/30 . . . . . . . . . . . 238,000 2.50
Chesapeake & Potomac Telephone Co., 8.375%, 10/01/29 . . . . . 226,250 2.37
United States Treasury Notes, 7.250%, 05/15/04 . . . . . . . . 213,716 2.24
Discover Credit Card Trust, 6.750%, 02/16/02 . . . . . . . . . 200,625 2.10
United States Treasury Notes, 5.875%, 03/31/99 . . . . . . . . 199,546 2.09
United States Treasury Notes, 4.750%, 02/15/97 . . . . . . . . 196,700 2.06
Government National Mortgage Association, 9.000%, 07/15/16. . . 176,406 1.85
Citicorp . . . . . . . . . . . . . . . . . . . . . . . . . . . 170,731 1.79
New Jersey Bell Telephone Co., 7.850%, 11/15/29. . . . . . . . 163,125 1.71
---------- -----
$2,027,099 21.25%
========== =====
</TABLE>
<PAGE>
IAA Trust Mutual Funds - Portfolio Highlights
IAA Trust Tax Exempt Bond Fund, Inc.
Portfolio Changes For the Year Ended June 30, 1995
<TABLE>
<CAPTION>
Major Purchases Major Sales
<S> <C>
Penna. State Higher Education (1) State of Washington Unlimited (2)
5.600%, 09/01/10 6.375%, 02/01/14
Louisville & Jefferson Co. Met. Sewer (1) Plano Texas Water and Sewer (2)
5.250%, 05/15/10 6.950%, 05/01/01
Connecticut State Unlimited Tax (1) Brazos River Authority (2)
5.400%, 03/15/08 5.500%, 05/01/22
Massachusetts Bay Transit Authority (1) Weber County Utah Mun. Bldg. (2)
5.875%, 03/01/15 7.150%, 06/01/03
Joliet Illinois Refunding (2)
7.125%, 01/01/02
(1) New Holdings (2) Deletions
</TABLE>
Ten Largest Holdings June 30, 1995
<TABLE>
<CAPTION>
Percent
Value of Fund
----- -------
<S> <C> <C>
Peru Indiana Community School, 6.750%, 01/01/09 .............................................. $ 578,875 3.07%
Cape Girardeau Missouri Waterworks, 7.450%, 03/01/05 .......................................... 569,375 3.02
State of Rhode Island Ref. General Obligation, 7.000%, 06/15/05 .............................. 569,375 3.02
Pennsylvania State Higher Education, 5.600%, 09/01/10 ........................................ 563,500 2.99
Washington Public Power Supply, 7.625%, 07/01/01 .............................................. 559,375 2.97
Kaukauna Wisconsin Electric System, 7.250%, 12/15/08 .......................................... 548,750 2.91
Connecticut State Unlimited Tax General Obligation, 5.400%, 03/15/08 .......................... 543,125 2.89
Maricopa County School Dist.Arizona Unlimited , 6.400%, 07/01/06 .............................. 543,125 2.89
Louisville & Jefferson County, Met. Sewer Dist. Rev.,5.250% 05/15/10 .......................... 542,656 2.89
Chicago, Illinois Water Revenue, 6.500%, 11/01/15 ............................................ 533,125 2.83
------- ----
$5,551,281 29.48%
========== ======
</TABLE>
IAA Trust Money Market Fund, Inc.
Ten Largest Holdings June 30, 1995
<TABLE>
<CAPTION>
Percent
Value of Fund
----- -------
<S> <C> <C>
Commercial Credit Co., 5.96%, 08/07/95 ......................................................... $ 1,500,000 4.12%
Waste Management, Inc., 6.30%, 08/09/95 ....................................................... 1,489,763 4.09
Household Finance Corp., 6.11%, 07/06/95 ....................................................... 1,079,000 2.96
Norwest Corp., 5.85%, 08/29/95 ................................................................. 1,015,000 2.79
Chevron Oil Finance Co., 5.97%, 07/05/95 ....................................................... 950,000 2.61
American Express Credit Corp., 5.99%, 07/20/95 ................................................. 950,000 2.61
Transamerica Financial Corp., 6.02%, 07/18/95 ................................................. 942,314 2.59
Texaco, Inc., 5.89%, 07/27/95 ................................................................. 909,000 2.50
American General Finance Corp., 6.21%, 07/31/95 ............................................... 900,000 2.47
AVCO Financial Services, Inc., 6.07%, 08/21/95 ................................................. 900,000 2.47
------- ----
$10,635,077 29.21%
=========== ======
</TABLE>
Portfolio Characteristics June 30, 1995
30 Day Average Yield: 5.20%
7 Day Average Yield: 5.19%
Average Days to Maturity: 39.27
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Boards of Directors
IAA Trust Mutual Funds
We have audited the accompanying statements of assets and liabilities,
including the schedule of investments of the IAA Trust Mutual Funds (the
"Funds") (comprising, respectively, the IAA Trust Growth Fund, Inc., the IAA
Trust Asset Allocation Fund, Inc., the IAA Trust Tax Exempt Bond Fund, Inc.
and the IAA Trust Money Market Fund, Inc.) as of June 30, 1995, and the
related statements of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the periods presented. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation and physical
inspection of securities held by the custodian as of June 30, 1995. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
each of the respective Funds comprising the IAA Trust Mutual Funds as of June
30, 1995, the results of their operations for the year then ended, the changes
in their net assets for each of the two years in the period then ended, and
the financial highlights for each of the periods presented, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, PA
July 28, 1995
<PAGE>
IAA Trust Mutual Funds - Schedule of Investments June 30, 1995
- ---------------------------------------------------------------
IAA Trust Growth Fund, Inc.
<TABLE>
<CAPTION>
Shares Value
------ -----------
<S> <C> <C>
COMMON STOCKS - 82.41%
Beverages - 1.62%
PepsiCo, Inc. ................ 25,000 $ 1,140,625
-----------
Chemicals/Basic - 3.24%
Engelhard Corp. .............. 32,000 1,372,000
Minnesota Mining &
Manufacturing ............... 16,000 916,000
-----------
2,288,000
-----------
Climate Control
Systems - 1.91%
York International, Inc. ..... 30,000 1,350,000
-----------
Computer Peripheral
Equipment - 6.17%
Cisco Systems*................ 32,000 1,618,000
Hewlett-Packard Co. .......... 23,600 1,758,200
VeriFone, Inc.* .............. 40,000 980,000
-----------
4,356,200
-----------
Computer Services - 4.36%
First Data Corp. ............. 26,000 1,478,750
Sun Microsystems*............. 33,000 1,600,500
-----------
3,079,250
-----------
Consumer Products - 1.26%
Rubbermaid, Inc. ............. 32,000 888,000
-----------
Electrical Equipment - 3.19%
General Electric Co. ......... 40,000 2,255,000
-----------
Electronics/
Instrumentation - 3.80%
Motorola, Inc. ............... 40,000 2,685,000
-----------
Electric Utility - 2.35%
DPL, Inc. .................... 75,000 1,659,375
-----------
Entertainment - 1.31%
Acclaim Entertainment, Inc.*.. 50,000 921,875
-----------
Food Products - 1.58%
Archer-Daniels-Midland Corp. . 60,000 1,117,500
-----------
Financial Services - 5.98%
Federal National Mortgage
Assoc. ...................... 8,000 755,000
Green Tree Financial Corp. ... 40,000 1,775,000
MBNA Corp. ................... 50,000 1,687,500
-----------
4,217,500
-----------
Hospital & Medical Service
Plans - 0.65%
US Healthcare, Inc. .......... 15,000 459,375
-----------
Household Products - 1.29%
Unilever N.V. ................ 7,000 910,875
-----------
Insurance - 3.47%
American International Group.. 10,000 1,140,000
Travelers Group, Inc. ........ 30,000 1,312,500
-----------
2,452,500
-----------
Machinery & Equipment - 0.60%
Hardinge, Inc. ............... 22,000 420,750
-----------
Medical Supplies - 1.92%
Johnson & Johnson............. 20,000 $ 1,352,500
-----------
Metals & Mining - 1.19%
Newmont Mining Corp. ......... 20,000 837,500
-----------
Miscellaneous Chemical
Products - 1.25%
Lubrizol Corp. ............... 25,000 884,375
-----------
Motor Vehicle Mfr. &
Parts - 1.26%
Ford Motor Co. ............... 30,000 892,500
-----------
Natural Gas Production
Transmission - 2.12%
NICOR, Inc. .................. 35,000 940,625
Unocal Corp. ................. 20,000 552,500
-----------
1,493,125
-----------
Paper & Allied
Products - 1.67%
Weyerhaeuser Co. ............. 25,000 1,178,125
-----------
Petroleum/Integrated - 7.87%
Chevron Corp. ................ 25,000 1,165,625
Exxon Corp. .................. 22,500 1,589,062
Phillips Petroleum............ 40,000 1,335,000
Royal Dutch Petroleum Co. ADR. 12,000 1,462,500
-----------
5,552,187
-----------
Pharmaceuticals - 5.56%
Elan Corp., PLC*.............. 30,000 1,222,500
Merck & Co. .................. 25,000 1,225,000
Mylan Labs.................... 48,000 1,476,000
-----------
3,923,500
-----------
Railroad - 1.35%
Burlington Northern Corp. .... 15,000 950,625
-----------
Retail - 6.85%
American Stores Co. ......... 30,000 843,750
Best Buy Co., Inc.* .......... 15,500 412,688
Pep Boys...................... 40,000 1,070,000
Toys-R-Us, Inc.*.............. 40,000 1,170,000
Wal-Mart Stores............... 50,000 1,337,500
-----------
4,833,938
-----------
Semiconductors & Related
Devices - 3.59%
Intel Corp. .................. 40,000 2,532,500
-----------
Steel Production - 0.76%
Nucor Corp. .................. 10,000 535,000
-----------
Telephone Utility - 4.24%
American Telephone and
Telegraph.................... 28,000 1,487,500
GTE Corp. .................... 44,000 1,501,500
-----------
2,989,000
-----------
TOTAL COMMON STOCKS
(cost $38,641,469).......... 58,156,700
-----------
</TABLE>
<PAGE>
IAA Trust Mutual Funds - Schedule of Investments June 30, 1995
- ---------------------------------------------------------------
IAA Trust Growth Fund, Inc. (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
---------- -----------
<S> <C> <C>
COMMERCIAL PAPER - 15.12%
John Deere Capital Corp.
6.11%, 07/06/95............. $ 747,000 $ 747,000
Prudential Funding Corp.
5.99%, 07/10/95............. 752,000 752,000
IBM Credit Corp.
5.98%, 07/11/95............. 1,181,000 1,181,000
PHH Corp.
5.95%, 07/12/95............. 1,021,680 1,019,822
Associates Corp. of N. America
5.99%, 07/13/95............. 974,000 974,000
Heller Financial, Inc.
6.01%, 07/24/95............. 782,000 782,000
Province of Quebec
6.18%, 07/24/95............ 500,000 498,026
Heller Financial, Inc.
6.01%, 07/31/95............. 638,760 638,760
Commercial Credit Corp.
5.97%, 08/02/95............. 235,000 235,000
AVCO Financial Services, Inc.
6.01%, 08/07/95............ 359,798 357,576
Prudential Funding Corp.
5.99%, 08/08/95............. 1,413,000 1,413,000
AVCO Financial Services, Inc.
5.93%, 08/15/95............. $ 375,000 $ 375,000
Ford Motor Credit Co.
5.98%, 08/24/95............. 909,000 909,000
Associates Corp. of N. America
5.93%, 08/30/95............. 790,000 790,000
-----------
TOTAL COMMERCIAL PAPER
(cost $10,672,184).......... 10,672,184
-----------
OTHER SHORT-TERM
INVESTMENTS - 2.18%
Money Market Funds
(cost $1,538,242)
Federated Prime Obligation
Fund, 5.93% ................. 1,538,242 1,538,242
-----------
TOTAL INVESTMENTS - 99.71%
(cost $50,851,895).......... 70,367,126
-----------
CASH AND OTHER ASSETS
NET OF LIABILITIES - 0.29%.. 209,978
-----------
NET ASSETS - 100.00%.......... $70,577,104
===========
</TABLE>
* Non-income producing
See notes to financial statements
<PAGE>
IAA Trust Mutual Funds - Schedule of Investments June 30, 1995
- ----------------------------------------------------------------
IAA Trust Asset Allocation Fund, Inc.
<TABLE>
<CAPTION>
Principal
Amount Value
--------- --------
<S> <C> <C>
BONDS AND NOTES - 34.62%
Auto - 1.21%
General Motors Acceptance Corp.
8.875%, 06/01/10............ $100,000 $ 115,875
----------
Banking - 3.66%
International American Development Bank
9.500%, 10/15/97............ 100,000 106,750
International American Development Bank
8.875%, 06/01/09............ 200,000 242,000
----------
348,750
----------
Beverages - 1.07%
Coca-Cola Company
6.625%, 10/01/02............ 100,000 101,875
----------
Chemicals - 1.06%
E.I. DuPont DeNemours & Company
6.750%, 10/15/02............ 100,000 101,250
----------
Finance Companies - 2.92%
Discover Card Credit Trust
6.750%, 02/16/02............ 200,000 200,625
Thrift Financial Corp.
8.550%, 05/20/18............ 74,906 77,628
----------
278,253
----------
Telephone Utility - 6.58%
Bell of Pennsylvania
Putable Debentures
8.350%, 12/15/30............ 200,000 238,000
New Jersey Bell Telephone Company
7.850%, 11/15/29............ 150,000 163,125
Chesapeake & Potomac Telephone
Company of Virginia Debentures
8.375%, 10/01/29........... 200,000 226,250
----------
627,375
----------
U.S. Government Agencies - 5.96%
Federal Farm Credit Bank
5.800%, 12/18/00............ 100,000 96,511
Federal Home Loan Bank
8.000%, 09/20/04............ 100,000 101,421
Federal Home Loan Mortgage Corp.
10.750%, 07/01/00........... 7,835 7,835
Federal Home Loan Mortgage Corp.
8.750%, 04/01/01............ 66,610 68,858
Federal Home Loan Mortgage Corp.
10.150%, 04/15/06........... 44,013 45,444
Government National Mortgage
Association Pool #60721
9.750%, 04/15/98............ 6,019 6,403
Government National Mortgage
Association Pool #30111
9.000%, 05/15/09............ 27,848 29,284
Government National Mortgage
Association Pool #23653
9.500%, 06/15/09............ 17,207 18,266
Government National Mortgage
Association Pool #32147
9.500%, 08/15/09............ 17,099 18,151
Government National Mortgage
Association Pool #161621
9.000%, 07/15/16............ 167,756 176,406
----------
568,579
----------
U.S. Government Obligations - 12.16%
United States Treasury Notes
4.750%, 02/15/97............ 200,000 196,700
United States Treasury Notes
6.000%, 12/31/97............ 100,000 100,320
United States Treasury Notes
5.875%, 03/31/99............ 200,000 199,546
United States Treasury Notes
6.750%, 06/30/99 ........... 100,000 102,733
United States Treasury Notes
6.875%, 07/31/99 ........... 100,000 103,117
United States Treasury Notes
7.250%, 05/15/04............ 200,000 213,716
United States Treasury Notes
7.250%, 08/15/04 ........... 100,000 106,932
United States Treasury Bonds
11.625%, 11/15/04 .......... 100,000 137,487
----------
1,160,551
----------
TOTAL BONDS AND NOTES
(cost $3,082,642)........... 3,302,508
----------
<CAPTION>
Shares Value
--------- --------
COMMON STOCKS - 51.78%
Aerospace/Defense - 0.89%
Raytheon...................... 1,100 85,388
----------
Auto/Auto Parts - 1.28%
Chrysler Corp. ............... 1,000 47,875
Ford Motor Co. ............... 1,000 29,750
Magna International, Inc.,
Cl. A .................... 1,000 44,125
----------
121,750
----------
Air Courier Services - 0.89%
Federal Express Corp.*........ 1,400 85,050
----------
Banks - 4.00%
BankAmerica Corp. ............ 1,000 52,625
Bank of New York.............. 1,500 60,562
Citicorp...................... 2,950 170,731
Norwest Corp. ................ 3,400 97,750
----------
381,668
----------
Beverages - 1.34%
Coca-Cola Company............. 2,000 127,500
----------
Construction and Engineering - 0.82%
Fluor Corp. .................. 1,500 78,000
----------
Construction Machinery - 1.08%
Caterpillar, Inc. ............ 1,600 102,800
----------
Consumer Products - 4.02%
Department 56, Inc. .......... 1,900 72,675
Gillette Co. ................. 2,000 89,250
Procter & Gamble.............. 2,000 143,750
Wolverine World Wide.......... 3,750 77,812
----------
383,487
----------
Electric Utility - 1.92%
Cilcorp, Inc. ................ 1,200 43,650
Florida Progress Corp. ....... 1,200 37,500
Texas Utilities, Inc. ........ 1,000 34,375
Wisconsin Energy Corp. ....... 2,400 67,200
----------
182,725
----------
</TABLE>
<PAGE>
IAA Trust Mutual Funds - Schedule of Investments June 30, 1995
- ----------------------------------------------------------------
IAA Trust Asset Allocation Fund, Inc. (continued)
<TABLE>
<CAPTION>
Shares Value
--------- --------
<S> <C> <C>
COMMON STOCKS (continued)
Electronics - 3.06%
General Electric Co. ......... 1,200 $ 67,650
Phillips N.V ................. 2,950 126,113
Tektronix, Inc. .............. 2,000 98,500
----------
292,263
----------
Energy - 5.45%
Atlantic Richfield Co. ....... 700 76,825
Exxon Corp. .................. 2,000 141,250
Repsol S.A., ADR ............. 2,100 66,412
Schlumberger, Ltd. ........... 1,300 80,763
Williams Companies............ 2,800 97,650
YPF Sociedad Anonima, ADS ... 3,000 56,625
----------
519,525
----------
Financial Services - 0.79%
Travelers Group, Inc. ........ 1,733 75,819
----------
Healthcare - 6.67%
Bristol-Myers Squibb Co. ..... 1,000 68,125
Columbia/HCA Healthcare....... 2,700 116,775
Elan Corp., PLC* ............. 2,000 81,500
Invacare Corp. ............... 2,000 83,000
Johnson & Johnson............. 2,200 148,775
Mylan Labs.................... 2,000 61,500
US Healthcare, Inc. .......... 2,500 76,562
----------
636,237
----------
Household Appliances - 0.29%
Whirlpool Corp. .............. 500 $27,500
----------
Manufacturing - 0.90%
Minnesota Mining & Manufacturing 1,500 85,875
----------
Motor Homes - 0.70%
Fleetwood Enterprises......... 3,400 67,150
----------
Motorcycles - 0.79%
Harley-Davidson, Inc. ........ 3,100 75,562
----------
Newspapers - Publishing - 0.64%
Tribune Co. .................. 1,000 61,375
----------
Office Equipment - 0.86%
Xerox Corporation............. 700 82,075
----------
Paper & Allied Products - 1.24%
Mead Corp. ................... 1,200 71,250
Weyerhaeuser Co. ............. 1,000 47,125
----------
118,375
----------
Real Estate - 1.16%
Meditrust .................... 1,700 58,013
National Golf Properties ..... 2,500 52,500
----------
110,513
----------
Retail - 3.94%
Albertson's, Inc. ............ 2,900 86,275
Best Buy Co., Inc.* .......... 1,400 37,275
Penney (J.C.) Co. ............ 1,500 72,000
Walgreen's.................... 2,000 100,250
Wal-Mart Stores, Inc. ........ 3,000 80,250
----------
376,050
----------
Technology - 6.15%
Intel Corp. ................. 2,000 126,625
Microsoft Corp.* ............. 1,000 90,375
Motorola, Inc. ............... 1,900 127,537
Oracle Corp. ................. 3,750 144,844
Sun Microsystems, Inc. ....... 2,000 97,000
----------
586,381
----------
Telecommunication Services - 0.45%
AirTouch Communications* ..... 1,500 42,750
----------
Telephone Utility - 1.59%
American Telephone & Telegraph 1,200 63,750
Bell South Corp. ............. 750 47,625
Pacific Telesis Group, Inc. .. 1,500 40,125
----------
151,500
----------
Tool Products - 0.86%
Illinois Tool Works........... 1,500 82,500
----------
TOTAL COMMON STOCKS
(cost $3,844,658)........... 4,939,818
----------
Principal
Amount Value
--------- --------
COMMERCIAL PAPER - 9.74%
Heller Financial, Inc.
6.013%, 07/24/95............ $250,000 250,000
Province of Quebec
6.180%, 07/24/95............ 100,000 99,605
AVCO Financial Services, Inc.
6.048%, 08/14/95............ 381,000 381,000
International Leasing Financial Corp.
5.900%, 08/22/95............ 200,000 198,296
----------
TOTAL COMMERCIAL PAPER
(cost $928,901)............. 928,901
----------
OTHER SHORT-TERM INVESTMENTS - 3.21%
Money Market Fund
(cost $306,360)
Federated Prime Obligation Fund,
5.93% ...................... 306,360 306,360
----------
TOTAL INVESTMENTS - 99.35%
(cost $8,162,561)........... 9,477,587
----------
CASH AND OTHER ASSETS
NET OF LIABILITIES - 0.65% . 62,242
----------
NET ASSETS - 100% ............ $9,539,829
==========
</TABLE>
* Non-income producing security
See notes to financial statements
<PAGE>
IAA Trust Mutual Funds - Schedule of Investments June 30, 1995
- ----------------------------------------------------------------
IAA Trust Tax Exempt Bond Fund, Inc.
<TABLE>
<CAPTION>
Principal
Amount Value
--------- -----
<S> <C> <C>
MUNICIPAL BONDS
(Tax Exempt)-96.97%
Arizona - 7.18%
Bullhead City Arizona Parkway Revenue
6.100%, 01/01/07...................... $250,000 $ 249,063
Gilbert School District #41
Maricopa County
General Obligation
12.000%, 07/01/98..................... 250,000 303,125
Maricopa County School District #93
Arizona Unlimited Tax
General Obligation
6.400%, 07/01/06...................... 500,000 543,125
Salt River Project Arizona Agriculture
Improvement & Power District Electric
System Revenue
5.625%, 01/01/06...................... 250,000 257,187
---------
1,352,500
---------
California - 6.37%
California State Public Works Board
Lease Revenue
5.200%, 12/01/09...................... 500,000 452,500
City of Fresno California
Sewer System Revenue
6.250%, 09/01/14...................... 250,000 255,938
Los Angeles California Wastewater
System Revenue
6.000%, 11/01/14...................... 500,000 491,875
---------
1,200,313
---------
Connecticut - 2.88%
Connecticut State Unlimited Tax
General Obligation
5.400%, 03/15/08...................... 550,000 543,125
---------
Florida - 2.68%
Port St. Lucie, Florida
Utility System Revenue
5.900%, 09/01/09...................... 500,000 505,000
---------
Illinois - 17.79%
Chicago, Illinois Water Revenue
6.500%, 11/01/15...................... 500,000 533,125
Chicago, Illinois O'Hare
International Airport Revenue
5.000%, 01/01/16...................... 500,000 427,500
Dupage Water Commission Illinois
General Obligation
5.750%, 03/01/11...................... 500,000 493,750
Illinois State Sales Tax Revenue
5.400%, 06/15/13...................... 550,000 513,562
Illinois State Toll Highway
Authority Revenue, Series A
6.300%, 01/01/12...................... 275,000 287,031
Northwest Suburban Municipal
Joint Action Water Agency
Illinois Contract Revenue
6.450%, 05/01/07...................... 400,000 430,000
Northwest Water Commission
Illinois, Cook & Lake Revenue
5.000%, 05/01/13...................... 500,000 449,375
Sangamon County Illinois Tax
General Obligation
6.500%, 03/01/08...................... 200,000 216,000
---------
3,350,343
---------
Indiana - 4.28%
Peru Indiana Community School
Corp. Revenue
6.750%, 01/01/09...................... $550,000 $578,875
South Vermillion Middle School
Building Corp. Revenue
5.125%, 07/15/13...................... 250,000 226,563
---------
805,438
---------
Kentucky - 2.88%
Louisville & Jefferson County
Met. Sewer Dist. Rev. Series A
5.250%, 05/15/10...................... 575,000 542,656
---------
Massachusetts - 5.37%
Massachusetts Bay Transit
Authority, Revenue Bonds, Series A
5.875%, 03/01/15...................... 500,000 498,125
Massachusetts State Water
Resource Authority Revenue
6.000%, 11/01/08...................... 500,000 512,500
---------
1,010,625
---------
Mississippi - 1.35%
Mississippi State Unlimited
General Obligation, Series B
5.900%, 11/15/11...................... 250,000 254,062
---------
Missouri - 3.02%
Cape Girardeau Missouri Waterworks
System Revenue
7.450%, 03/01/05...................... 500,000 569,375
---------
Nebraska - 1.58%
Grand Island Nebraska Sewer
Project Revenue
5.850%, 04/01/08...................... 200,000 201,500
Nebraska Public Power Dist. Revenue
5.400%, 01/01/10...................... 100,000 95,750
---------
297,250
---------
Nevada - 4.69%
Clark County Nevada School District
General Obligation
5.250%, 06/01/07...................... 500,000 487,500
Henderson Nevada Water and Sewer
Unlimited Tax General Obligation
5.375%, 06/01/07...................... 400,000 395,500
---------
883,000
---------
New York - 2.42%
New York State Dormitory Authority
Revenue
5.500%, 07/01/12...................... 500,000 456,250
---------
North Carolina - 1.43%
North Carolina East Municipal
Power Agency Power System Revenue
7.000%, 01/01/08...................... 250,000 268,438
---------
Ohio - 2.59%
Montgomery County, Ohio
Sewer System Revenue
5.600%, 09/01/11...................... 500,000 486,875
---------
Pennsylvania - 5.61%
Pennsylvania Intergovernmental Corp.
Authority, Special Tax Revenue
5.450%, 06/15/08...................... 500,000 493,125
</TABLE>
<PAGE>
IAA Trust Mutual Funds - Schedule of Investments June 30, 1995
- ----------------------------------------------------------------
IAA Trust Tax Exempt Bond Fund, Inc. (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
--------- -----
<S> <C> <C>
MUNICIPAL BONDS (continued)
Pennsylvania State Higher Education
Revenue Bonds, Series A
5.600%, 09/01/10...................... $575,000 $ 563,500
-----------
1,056,625
-----------
Rhode Island - 3.02%
State of Rhode Island Refunding
General Obligation
7.000%, 06/15/05...................... 500,000 569,375
-----------
Texas - 6.59%
Austin Texas Limited Tax
General Obligation
7.250%, 09/01/03...................... 350,000 394,187
Bexar County, Texas,
Detention Facilities Limited Tax
General Obligation
5.750%, 06/15/10...................... 500,000 500,000
Garland Texas Limited Tax
General Obligation
5.800%, 08/15/12...................... 350,000 346,063
-----------
1,240,250
-----------
Washington - 6.74%
Public Utility District #1 of
Chelan County Washington Revenue
5.250%, 06/01/13...................... 500,000 442,500
Washington Public Power Supply
System, Nuclear Project #1,
Refunding Revenue, 1990-C
7.625%, 07/01/01...................... 500,000 559,375
Washington Public Power Supply
System Ref. Revenue Bonds, Series
1991-A, Project #3
6.500%, 07/01/02...................... 250,000 266,875
-----------
1,268,750
-----------
West Virginia - 2.12%
Pleasant County West Virginia
Pollution Control Revenue (West
Penn Power) Pleasants Station
7.000%, 08/01/08...................... $400,000 $ 400,000
-----------
Wisconsin - 6.38%
Brookfield Wisconsin Unlimited Tax
Corp. General Obligation
6.900%, 03/15/03...................... 250,000 279,063
Kaukauna Wisconsin Electric System
Revenue
7.250%, 12/15/08...................... 500,000 648,750
Wisconsin Clean Water
Revenue Bond
5.300%, 06/01/12...................... 400,000 374,000
-----------
1,201,813
-----------
TOTAL MUNICIPAL BONDS
(cost $18,489,481).................... 18,262,063
-----------
Shares Value
------ -----
TAX EXEMPT
MONEY MARKET FUNDS - 1.51%
(cost $285,036)
Nuveen Tax Exempt ...................... 285,036 285,036
-----------
TOTAL INVESTMENTS - 98.48%
(cost $18,774,517).................... 18,547,099
-----------
CASH AND OTHER ASSETS
NET OF LIABILITIES - 1.52%............. 285,447
-----------
NET ASSETS - 100%....................... $18,832,546
===========
</TABLE>
See notes to financial statements
<PAGE>
IAA Trust Mutual Funds - Schedule of Investments June 30, 1995
- ---------------------------------------------------------------
IAA Trust Money Market Fund, Inc.
<TABLE>
<CAPTION>
Principal
Amount Value
--------- --------
<S> <C> <C>
COMMERCIAL PAPER - 95.16%
Auto & Truck - 4.31%
Ford Motor Credit Co.
6.16%, 07/26/95.................. $826,000 $ 826,000
Ford Motor Credit Co.
5.92%, 08/02/95.................. 244,000 244,000
Ford Motor Credit Co.
6.03%, 08/02/95.................. 500,000 500,000
-----------
1,570,000
-----------
Commercial Banking - 5.76%
US Central Credit Union
5.95%, 07/17/95.................. 590,000 588,440
Norwest Corp.
5.90%, 08/23/95.................. 500,000 495,657
Norwest Corp.
5.85%, 08/29/95.................. 1,015,000 1,015,000
-----------
2,099,097
-----------
Commercial Finance - 8.80%
CIT Group, Inc.
5.92%, 09/05/95.................. 500,000 500,000
CIT Group, Inc.
5.93%, 09/06/95.................. 500,000 500,000
CIT Group, Inc.
5.83%, 09/11/95.................... 600,000 600,000
Heller Financial, Inc.
6.06%, 07/12/95.................. 592,000 592,000
Heller Financial, Inc.
6.15%, 07/17/95.................. 325,000 325,000
Heller Financial, Inc.
6.27%, 08/01/95.................. 690,000 690,000
-----------
3,207,000
-----------
Commercial Services - 1.31%
PHH Corp.
5.95%, 07/12/95.................. 478,320 477,451
-----------
Consumer Finance - 37.70%
American Express Credit Corp.
5.99%, 07/20/95.................. 950,000 950,000
American Express Credit Corp.
5.83%, 07/25/95.................. 296,000 296,000
American Express Credit Corp.
5.98%, 08/17/95................. 500,000 500,000
American General Finance Corp.
6.21%, 07/31/95.................. 900,000 900,000
American General Finance Corp.
5.95%, 08/28/95.................. 750,000 750,000
Associates Corp. of N. America
5.99%, 07/13/95.................. 700,000 700,000
Associates Corp. of N. America
5.93%, 08/30/95.................. 820,000 820,000
AVCO Financial Services, Inc.
6.01%, 08/07/95.................. 440,202 437,483
AVCO Financial Services, Inc.
6.05%, 08/14/95.................. 319,000 319,000
AVCO Financial Services, Inc.
6.07%, 08/21/95.................. 900,000 900,000
Beneficial Corp.
6.07%, 07/19/95.................. 600,000 600,000
Beneficial Corp.
6.12%, 08/22/95.................. 800,000 800,000
Commercial Credit Co.
5.97%, 08/02/95.................. 113,000 113,000
Commercial Credit Co.
5.96%, 08/07/95.................. 1,500,000 1,500,000
Household Finance Corp.
6.11%, 07/06/95.................. 1,079,000 1,079,000
Household Finance Corp.
5.93%, 08/15/95.................. 600,000 600,000
International Lease Finance Corp.
5.90%, 08/14/95.................. 307,000 304,786
International Lease Finance Corp.
5.90%, 08/22/95.................. 700,000 694,034
Prudential Funding Corp.
6.01%, 08/03/95.................... 750,340 750,340
Prudential Funding Corp.
5.99%, 08/08/95.................... 383,000 383,000
Prudential Funding Corp.
5.92%, 08/10/95.................... 330,000 330,000
-----------
13,726,643
-----------
Electronics - 4.19%
General Electric Capital Corp.
6.07%, 07/27/95.................. 400,000 400,000
General Electric Capital Corp.
5.93%, 08/15/95.................. 522,000 522,000
General Electric Capital Corp.
5.84%, 08/31/95.................. 602,000 602,000
-----------
1,524,000
-----------
Environmental Services - 4.09%
Waste Management, Inc.
6.30%, 08/09/95.................. 1,500,000 1,489,763
-----------
Farm Machinery & Equipment - 3.94%
John Deere Capital Corp.
6.01%, 07/25/95.................. 500,000 500,000
John Deere Capital Corp.
5.94%, 08/31/95.................. 435,000 435,000
John Deere Capital Corp.
5.83%, 09/13/95.................... 500,000 500,000
-----------
1,435,000
-----------
Food Products - 2.18%
Philip Morris Companies, Inc.
5.75%, 08/17/95.................. 800,000 793,994
-----------
Foreign Governments - 1.37%
Province of Quebec
6.18%, 07/24/95.................. 500,000 498,026
-----------
Insurance/Multi-Line - 4.61%
Transamerica Financial Corp.
6.02%, 07/18/95.................. 945,000 942,314
Transamerica Financial Corp.
6.02%, 10/16/95.................. 750,000 736,580
-----------
1,678,894
-----------
Office Equipment - 4.55%
IBM Credit Corp.
5.98%, 07/11/95.................. 856,000 856,000
</TABLE>
<PAGE>
IAA Trust Mutual Funds - Schedule of Investments June 30, 1995
- ---------------------------------------------------------------
IAA Trust Money Market Fund, Inc. (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
--------- --------
<S> <C> <C>
COMMERCIAL PAPER - (continued)
IBM Credit Corp.
5.79%, 08/24/95.................. $500,000 $ 500,000
IBM Credit Corp.
5.91%, 09/07/95.................. 300,000 300,000
-----------
1,656,000
-----------
Pharmaceuticals - 0.57%
Schering-Plough Corp.
6.02%, 09/12/95.................. 210,000 207,436
-----------
Petroleum Refining - 8.83%
Chevron Oil Finance Co.
5.97%, 07/05/95.................. 950,000 950,000
Chevron Oil Finance Co.
5.93%, 08/16/95.................. 615,000 615,000
Texaco, Inc.
5.98%, 07/11/95.................. 435,000 435,000
Texaco, Inc.
5.89%, 07/27/95.................. 909,000 909,000
Texaco, Inc.
5.94%, 08/08/95.................... 305,000 305,000
-----------
3,214,000
-----------
Telephone/Utility - 2.95%
AT&T Corp.
6.13%, 07/10/95................... 600,000 599,080
AT&T Corp.
5.75%, 08/14/95................... 480,000 476,627
-----------
1,075,707
-----------
TOTAL COMMERCIAL PAPER
(cost $34,653,012) .............. 34,653,011
-----------
CORPORATE BONDS - 2.20%
U.S. Government Agencies
(cost $800,000)
Federal Home Loan Bank-
Variable rate (reset quarterly)
5.85%, 06/03/96.................. 800,000 800,000
-----------
OTHER SHORT-TERM INVESTMENTS - 2.11%
Money Market Funds
(cost $768,703)
Federated Prime
Obligation Fund, 5.93% ........... 768,703 768,703
-----------
TOTAL INVESTMENTS - 99.47%
(cost $36,221,714) .............. 36,221,714
-----------
CASH AND OTHER ASSETS
NET OF LIABILITIES - 0.53% ....... 193,749
-----------
NET ASSETS - 100% ................. $36,415,463
===========
</TABLE>
See notes to financial statements
<PAGE>
Statements of Assets and Liabilities June 30, 1995
<TABLE>
<CAPTION>
IAA Trust IAA Trust IAA Trust
IAA Trust Asset Tax Exempt Money Market
Growth Fund, Inc. Allocation Fund, Inc. Bond Fund, Inc. Fund, Inc.
----------------- --------------------- --------------- ------------
<S> <C> <C> <C> <C>
Assets:
Investments in securities at value (cost
$50,851,895, $8,162,561,
$18,774,517 and $36,221,714, respectively). . . $70,367,126 $9,477,587 $18,547,099 $36,221,714
Cash. . . . . . . . . . . . . . . . . . . . . . . 71,548 14,577 150 50,530
Receivable for capital stock sold . . . . . . . . 3,003 19 -- 6,758
Dividends and interest receivable . . . . . . . . 162,522 55,656 298,665 178,04
Other assets. . . . . . . . . . . . . . . . . . . 25,196 2,401 5,113 7,025
----------- ---------- ----------- -----------
Total assets. . . . . . . . . . . . . . . . . . 70,629,395 9,550,240 18,851,027 36,464,071
----------- ---------- ----------- -----------
Liabilities:
Payable for capital stock redeemed. . . . . . . . 100 -- -- 19,045
Distributions payable . . . . . . . . . . . . . . -- -- -- 11,290
Accrued expenses and other liabilities. . . . . . 52,191 10,411 18,481 18,273
----------- ---------- ----------- -----------
Total liabilities . . . . . . . . . . . . . . . 52,291 10,411 18,481 48,608
----------- ---------- ----------- -----------
Net assets:
Applicable to 4,096,719, 776,202, 2,253,392
and 36,415,615 shares
outstanding, respectively . . . . . . . . . . . $70,577,104 $9,539,829 $18,832,546 $36,415,463
=========== ========== =========== ===========
Net Assets Consist of:
Capital paid-in . . . . . . . . . . . . . . . . . $47,497,509 $8,258,032 $19,023,437 $36,415,463
Undistributed net investment income . . . . . . . 503,361 0 1,584 --
Accumulated net realized gain (loss)
on investments . . . . . . .. . .. . .. . .. . . 3,061,003 (33,229) 34,943 --
Net unrealized appreciation (depreciation) of
investments . . . . . . .. . .. . .. . .. . . . . 19,515,231 1,315,026 (227,418) --
----------- ---------- ----------- -----------
$70,577,104 $9,539,829 $18,832,546 $36,415,463
=========== ========== =========== ===========
Net asset value and redemption price per share . . $17.23 $12.29 $8.36 $1.00
====== ====== ===== =====
Offering price per share
(net asset value +.97,
except Money Market Fund) . . . . . . . . . . .. $17.76 $12.67 $8.62 $1.00
====== ====== ===== =====
</TABLE>
See notes to financial statements.
<PAGE>
Statements of Operations for the Year Ended June 30, 1995
<TABLE>
<CAPTION>
IAA Trust IAA Trust IAA Trust
IAA Trust Asset Tax Exempt Money Market
Growth Fund, Inc. Allocation Fund, Inc. Bond Fund, Inc. Fund, Inc.
----------------- --------------------- --------------- ------------
<S> <C> <C> <C> <C>
Investment Income:
Dividends . . . . . . . . . . . . . . . . . . $ 1,081,733 $ 94,042 $ -- $ --
Interest. . . . . . . . . . . . . . . . . . . 535,750 321,972 1,093,946 1,974,531
----------- --------- ---------- ----------
Total investment income 1,617,483 416,014 1,093,946 1,974,531
----------- --------- ---------- ----------
Expenses:
Investment advisory fees (Note E) . . . . . . 476,164 67,275 93,589 91,618
Distribution expenses (Note E). . . . . . . . 2,597 1,940 7,979 --
Legal fees. . . . . . . . . . . . . . . . . . 4,828 2,948 2,967 6,245
Transfer agent fees (Note E). . . . . . . . . 68,022 11,101 21,475 41,216
Auditing fees . . . . . . . . . . . . . . . . 25,537 4,811 10,423 26,079
Printing. . . . . . . . . . . . . . . . . . . 7,061 723 1,622 3,529
Directors' fees . . . . . . . . . . . . . . . 5,006 1,167 1,297 1,520
Administration fees (Note E). . . . . . . . . 61,289 10,009 18,089 34,763
Accounting fees (Note E). . . . . . . . . . . 44,673 25,883 30,271 35,458
Insurance . . . . . . . . . . . . . . . . . . 19,529 2,665 6,165 12,008
Registration fees . . . . . . . . . . . . . . 1,266 2,008 1,366 2,795
Miscellaneous . . . . . . . . . . . . . . . 8,260 513 2,781 4,894
----------- --------- ---------- ----------
Total expenses. . . . . . . . . . . . . . . 724,232 131,043 198,024 260,125
----------- --------- ---------- ----------
Net Investment Income. . . . . . . . . . . . . 893,251 284,971 895,922 1,714,406
----------- --------- ---------- ----------
Realized and Unrealized Gain
on Investments-- Note (D):
Net realized gain (loss) on investments . . . 4,148,412 (37,078) 35,903 --
Net change in unrealized appreciation
on investments. . . . . . . . . . . . . . . 10,210,477 1,113,816 411,011 --
----------- --------- ---------- ----------
Net realized and unrealized gain
on investments. . . . . . . . . . . . . . . 14,358,889 1,076,738 446,914 --
----------- --------- ---------- ----------
Increase in Net Assets from Operations . . . . $15,252,140 $1,361,709 $1,342,836 $1,714,406
=========== ========== ========== ==========
</TABLE>
See notes to financial statements.
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
IAA Trust IAA Trust Asset
Growth Fund, Inc. Allocation Fund, Inc.
------------------------ ------------------------
Year Ended Year Ended Year Ended Year Ended
6/30/95 6/30/94 6/30/95 6/30/94
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Operations:
Net investment income . . . . . . . . . . . . . . . . . $ 893,251 $ 686,215 $ 284,971 $ 234,195
Net realized gain (loss) on investments . . . . . . . . 4,148,412 6,503,030 (37,078) 195,297
Net change in unrealized appreciation (depreciation)
of investments. . . . . . . . . . . . . . . . . . . . 10,210,477 (8,484,217) 1,113,816 (421,301)
----------- ----------- ------------ -----------
Increase (decrease) in net assets from operations . . . 15,252,140 (1,294,972) 1,361,709 8,191
----------- ----------- ------------ -----------
Dividends and Distributions to Shareholders from:
Investment income . . . . . . . . . . . . . . . . . . . (671,272) (881,964) (269,547) (233,617)
Realized gains on investments . . . . . . . . . . . . . (5,659,861) (7,182,675) (145,553) (161,313)
Return of capital. . . . . . . . . . . . . . . . . . . -- -- (6,398) --
----------- ----------- ------------ -----------
(6,331,133) (8,064,639) (421,498) (394,930)
----------- ----------- ------------ -----------
Capital Stock Transactions -- (Net) Note (C) . . . . . . 2,208,346 (1,975,906) (52,911) 2,376,426
----------- ----------- ------------ -----------
Total increase (decrease) in net assets . . . . . . . . 11,129,353 (11,335,517) 887,300 1,989,687
Net Assets:
Beginning of year . . . . . . . . . . . . . . . . . . . 59,447,751 70,783,268 8,652,529 6,662,842
----------- ----------- ------------ -----------
End of year . . . . . . . . . . . . . . . . . . . . . . $70,577,104 $59,447,751 $9,539,829 $8,652,529
----------- ----------- ------------ -----------
</TABLE>
<TABLE>
<CAPTION>
IAA Trust IAA Trust
Tax Exempt Bond Fund, Inc. Money Market Fund, Inc.
-------------------------- ------------------------
Year Ended Year Ended Year Ended Year Ended
6/30/95 6/30/94 6/30/95 6/30/94
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Operations:
Net investment income . . . . . . . . . . . . . . . . . $ 895,922 $ 900,397 $ 1,714,406 1,036,030
Net realized gain on investments. . . . . . . . . . . . 35,903 500,759 -- --
Net change in unrealized appreciation (depreciation)
of investments . . . . . . . . . . . . . . . . . . . . 411,011 (1,773,997) -- --
----------- ----------- ------------ -----------
Increase (decrease) in net assets from operations . . . 1,342,836 (372,841) 1,714,406 1,036,030
----------- ----------- ------------ -----------
Dividends and Distributions to Shareholders from:
Investment income . . . . . . . . . . . . . . . . . . . (894,338) (902,067) (1,714,510) (1,035,982)
Realized gains on investments . . . . . . . . . . . . . (69,768) (864,483) -- --
(964,106) (1,766,550) (1,714,510) (1,035,982)
----------- ----------- ------------ -----------
Capital Stock Transactions -- (Net) Note (C) . . . . . . (640,781) 1,207,940 (2,283,706) 5,396,848
----------- ----------- ------------ -----------
Total increase (decrease) in net assets . . . . . . . . (262,051) (931,451) (2,283,810) 5,396,896
Net Assets:
Beginning of year . . . . . . . . . . . . . . . . . 19,094,597 20,026,048 38,699,273 33,302,377
----------- ----------- ------------ -----------
End of year . . . . . . . . . . . . . . . . . . . . $18,832,546 $19,094,597 $36,415,463 $38,699,273
=========== =========== =========== ===========
</TABLE>
See notes to financial statements.
<PAGE>
FINANCIAL HIGHLIGHTS
The tables below set forth financial data for a share of capital stock
outstanding throughout each period presented.
<TABLE>
<CAPTION>
IAA Trust
Growth Fund, Inc.
Years Ended June 30,
--------------------------------------------------------
1995 1994 1993 1992 1991
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year............. $15.16 $ 17.55 $ 17.23 $ 17.35 $ 17.42
------ ------- ------- ------- -------
Income from investment operations
Net investment income ........................ 0.22 0.27 0.25 0.35 0.41
Net gains or losses on securities (both
realized and unrealized) .................... 3.45 (0.63) 1.67 0.40 0.44
------ ------- ------- ------- -------
Total from investment operations............ 3.67 (0.36) 1.92 0.75 0.85
------ ------- ------- ------- -------
Less distributions
Dividends from net investment income ......... (0.17) (0.22) (0.29) (0.38) (0.51)
Distributions from capital gains ............. (1.43) (1.81) (1.31) (0.49) (0.41)
------ ------- ------- ------- -------
Total distributions ........................ (1.60) (2.03) (1.60) (0.87) (0.92)
------ ------- ------- ------- -------
Net asset value, end of year .................. $ 17.23 $ 15.16 $ 17.55 $ 17.23 $ 17.35
======= ======= ======= ======= =======
Total return + ................................ 26.68% (2.42%) 11.71% 4.23% 5.37%
Ratios/Supplemental Data
Net assets, end of period (in 000's) ........ $70,577 $59,448 $70,785 $76,147 $81,974
Ratio of expenses to average net assets* .... 1.14% 1.24% 1.18% 0.85% 0.82%
Ratio of net investment income to
average net assets* ........................ 1.41% 1.03% 1.36% 1.91% 2.58%
Portfolio turnover ........................... 31.84% 49.12% 55.36% 45.50% 26.00%
* Average net assets have been computed based on the aggregate value of the
fund's daily net assets.
+ Total return calculation does not reflect sales load.
</TABLE>
<TABLE>
<CAPTION>
IAA Trust
Asset Allocation Fund, Inc.
Years Ended June 30,
----------------------------------------------------------
1995 1994 1993 1992 1991
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year .......................... $ 11.08 $ 11.60 $ 11.20 $ 10.74 $ 10.56
------- ------- ------- ------- -------
Income from investment operations
Net investment income ...................................... 0.36 0.34 0.57 0.68 0.73
Net gains or losses on securities (both
realized and unrealized) .................................. 1.38 (0.25) 0.47 0.55 0.24
------- ------- ------- ------- -------
Total from investment operations ......................... 1.74 0.09 1.04 1.23 0.97
------- ------- ------- ------- -------
Less distributions
Dividends from net investment income ....................... (0.34) (0.34) (0.57) (0.68) (0.76)
Distributions from capital gains............................ (0.18) (0.27) (0.07) (0.09) (0.03)
Distributions from return of capital ....................... (0.01) (0.00) (0.00) (0.00) (0.00)
------- ------- ------- ------- -------
Total distributions ...................................... (0.53) (0.61) (0.64) (0.77) (0.79)
------- ------- ------- ------- -------
Net asset value, end of year ................................ $ 12.29 $ 11.08 $ 11.60 $ 11.20 $ 10.74
======= ======= ======= ======= =======
Total return + .............................................. 16.29% 0.71% 9.58% 11.84% 9.47%
Ratios/Supplemental Data
Net assets, end of period (in 000's) ...................... $9,540 $8,653 $6,663 $6,233 $5,768
Ratio of expenses to average net assets*.................... 1.46% 1.78% 1.71% 1.51% 1.33%
Ratio of net investment income to
average net assets* ...................................... 3.18% 2.98% 4.97% 6.20% 6.83%
Portfolio turnover ......................................... 21.03% 17.39% 36.70% 14.10% 20.60%
* Average net assets have been computed based on the aggregate value of the fund's daily net assets.
+ Total return calculation does not reflect sales load.
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS
The tables below set forth financial data for a share of capital stock
outstanding throughout each period presented.
<TABLE>
<CAPTION>
IAA Trust
Tax Exempt Bond Fund, Inc.
Years Ended June 30,
-----------------------------------------------------------
1995 1994 1993 1992 1991
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ......................... $ 8.19 $ 9.11 $ 8.78 $ 8.44 $ 8.32
------- ------- ------- ------- -------
Income from investment operations
Net investment income ..................................... 0.39 0.39 0.46 0.49 0.52
Net gains or losses on securities (both
realized and unrealized) ................................. 0.20 (0.54) 0.33 0.34 0.13
------- ------- ------- ------- -------
Total from investment operations ........................ 0.59 (0.15) 0.79 0.83 0.65
------- ------- ------- ------- -------
Less distributions
Dividends from net investment income ...................... (0.39) (0.39) (0.46) (0.49) (0.53)
------- ------- ------- ------- -------
Distributions from capital gains .......................... (0.03) (0.38) 0.00 0.00 0.00
------- ------- ------- ------- -------
Total distributions ..................................... (0.42) (0.77) (0.46) (0.49) (0.53)
------- ------- ------- ------- -------
Net asset value, end of year ............................... $ 8.36 $ 8.19 $ 9.11 $ 8.78 $ 8.44
======= ======= ======= ======= =======
Total return + ............................................. 7.51% (1.86%) 9.19% 10.05% 8.05%
Ratios/Supplemental Data
Net assets, end of period (in 000's) ..................... $18,833 $19,095 $20,026 $17,872 $16,035
Ratio of expenses to average net assets* ................. 1.06% 1.15% 1.03% 0.95% 0.83%
Ratio of net investment income to
average net assets* ..................................... 4.79% 4.47% 5.11% 5.65% 6.17%
Portfolio turnover......................................... 24.89% 41.94% 39.60% 20.30% 6.30%
* Average net assets have been computed based on the aggregate value of the fund's daily net assets.
+ Total return calculation does not reflect sales load.
</TABLE>
<TABLE>
<CAPTION>
IAA Trust
Money Market Fund, Inc.
Years Ended June 30,
-----------------------------------------------------------
1995 1994 1993 1992 1991
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- -------
Income from investment operations
Net investment income ....................... 0.05 0.03 0.02 0.03 0.06
------- ------- ------- ------- -------
Total from investment operations........... 0.05 0.03 0.02 0.03 0.06
------- ------- ------- ------- -------
Less distributions
Dividends from net investment income ........ (0.05) (0.03) (0.02) (0.03) (0.06)
------- ------- ------- ------- -------
Total distributions ....................... (0.05) (0.03) (0.02) (0.03) (0.06)
------- ------- ------- ------- -------
Net asset value, end of year ................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= =======
Total return ................................. 4.85% 2.86% 2.41% 3.49% 6.40%
Ratios/Supplemental Data
Net assets, end of period (in 000's) ....... $36,415 $38,699 $33,302 $10,191 $19,839
Ratio of expenses to average net assets* +... 0.73% 0.56% 0.58% 1.32% 1.03%
Ratio of net investment income to
average net assets* ....................... 4.80% 2.83% 2.67% 3.60% 6.26%
* Average net assets have been computed based on the aggregate value of the fund's daily net assets.
+ After voluntary waiver of advisory fees. Before voluntary waiver of advisory fees, the ratio of expenses to
average net assets was .97%, 1.06% and 1.02% for the years ended June 30, 1995, June 30, 1994 and
June 30, 1993 respectively.
</TABLE>
<PAGE>
IAA Trust Mutual Funds - Notes to Financial Statements June 30, 1995
Note (A) Significant Accounting Policies: IAA Trust Growth Fund, Inc. ("Growth
Fund"), IAA Trust Asset Allocation Fund, Inc. ("Asset Allocation Fund"), IAA
Trust Tax Exempt Bond Fund, Inc. ("Tax Exempt Bond Fund") and IAA Trust Money
Market Fund, Inc. ("Money Market Fund") (collectively, "the Funds") are
separately incorporated and registered companies under the Investment Company
Act of 1940 (the "Act"), as amended, as diversified, open-ended management
companies. The following is a summary of the significant accounting policies
consistently followed by each Fund in the preparation of its financial
statements. These policies are in conformity with generally accepted accounting
principles.
(1) Security Valuation: For the Growth Fund, the Asset Allocation Fund and
the Tax Exempt Bond Fund, securities traded on national exchanges and
over-the-counter securities listed in the NASDAQ National Market System are
valued at the last reported sales price at the close of the New York Stock
Exchange. Securities for which there have been no sales on such day are
valued at the last reported bid price on such exchange. Over-the-counter
securities not listed on the GNOSTIC National Market System are valued at
the mean of the current bid and asked prices. Fixed-income securities
except short-term securities may be valued on the basis of prices provided
by a pricing service when such prices are believed by the Advisor to
reflect the fair market value of such securities. Short-term investments,
those with a remaining maturity of 60 days or less, are valued at amortized
cost, which approximates market value. For the Money Market Fund, all
securities are valued at amortized cost, which approximates market value.
Under the amortized cost method, discounts and premiums are accreted and
amortized ratably to maturity and are included in interest income.
(2) Investment Income and Securities Transactions: Dividend income is
recorded on the ex-dividend date. Interest income is accrued daily.
Securities transactions are accounted for on the date securities are
purchased or sold. Securities gains and losses are determined on the
identified cost basis.
(3) Federal Income Taxes: The Funds have elected to be treated as
"regulated investment companies" under Sub-chapter M of the Internal
Revenue Code and to distribute substantially all of their net taxable
income annually. Accordingly, no provisions for Federal income taxes have
been made in the accompanying financial statements.
(4) Dividends and Distributions: Dividends and distributions to
shareholders are recorded on the ex-dividend date. Income distributions and
capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
Note (B) Dividends from Net Investment Income and Distributions of Capital
Gains: In the Growth Fund, net investment income from investment transactions
are distributed to shareholders twice a year. The Asset Allocation Fund
distributes net investment income to shareholders monthly. Net investment income
of the Tax Exempt Bond Fund is distributed to shareholders monthly. The Money
Market Fund declares dividends daily from its net investment income, which are
payable monthly. Dividends are automatically reinvested in additional Fund
shares, at the then current net asset value, for those shareholders that have
elected the reinvestment option. Net realized gains from investment
transactions, if any, of all Funds are generally distributed once a year.
Note (C) Capital Stock: At June 30, 1995, 10,000,000 shares of capital stock
were authorized for each of the Growth Fund, Asset Allocation Fund, and Tax
Exempt Bond Fund. The shares of capital stock authorized for the Money Market
Fund were 250,000,000. The par value for each share of the Growth Fund, Asset
Allocation Fund, and Tax Exempt Bond Fund is $1.00 per share. The par value for
each share of the Money Market Fund is $0.10 per share.
<PAGE>
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
GROWTH FUND ASSET ALLOCATION FUND
----------- ---------------------
Year Ended Year Ended Year Ended Year Ended
June 30, 1995 June 30, 1994 June 30, 1995 June 30, 1994
----------------- ----------------- ----------------- -----------------
Shares Amount Shares Amount Shares Amount Shares Amount
------ ---------- ------- ----------- ------ --------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold. . . . . . . . . . . . . . 82,369 $1,266,232 214,566 $ 3,470,762 70,254 $ 788,460 237,408 $ 2,731,183
Shares issued through reinvestment of
dividends. . . . . . . . . . . . . . . 424,176 6,030,680 483,039 7,779,673 23,407 261,811 19,634 224,250
------- ----------- ------- ----------- ------ --------- ------- -----------
506,545 7,296,912 697,605 11,250,435 93,661 1,050,271 257,042 2,955,433
------- ----------- ------- ----------- ------ --------- ------- -----------
Shares redeemed . . . . . . . . . . . . (331,902) (5,088,566) (808,870) (13,226,341) (98,290) (1,103,182) (50,719) (579,007)
------- ----------- ------- ----------- ------ --------- ------- -----------
Net increase (decrease) . . . . . . . . 174,643 $ 2,208,346 (111,265) $(1,975,906) (4,629) $ (52,911) 206,323 $ 2,376,426
======= =========== ======= =========== ====== ========= ======= ===========
</TABLE>
<TABLE>
<CAPTION>
TAX EXEMPT BOND FUND MONEY MARKET FUND
-------------------- -----------------
Year Ended Year Ended Year Ended Year Ended
June 30, 1995 June 30, 1994 June 30, 1995 June 30, 1994
------------------ --------------------- ------------------------- -------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
-------- ---------- ------- ----------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold . . . . . . . 66,402 $ 546,984 183,322 $ 1,615,818 4,472,453 $54,472,453 75,655,484 $75,655,484
Shares issued through
reinvestment of
dividends . . . . . . . . 76,197 620,434 126,457 1,111,563 1,587,538 1,587,538 960,883 960,883
-------- ---------- ------- ----------- ---------- ----------- ---------- -----------
142,599 1,167,418 309,779 2,727,381 56,059,991 56,059,99 76,616,367 76,616,367
-------- ---------- ------- ----------- ---------- ----------- ---------- -----------
Shares redeemed . . . . . (221,928) (1,808,199) (176,084) (1,519,441) (58,343,697) (58,343,697) (71,219,519) (71,219,519)
-------- ---------- ------- ----------- ---------- ----------- ---------- -----------
Net increase
(decrease) . . . . . . . (79,329) $ (640,781) 133,695 $ 1,207,940 (2,283,706) $ (2,283,706) 5,396,848 $ 5,396,848
======= ========== ======= ============ ========== ============ ========= ===========
</TABLE>
Note (D) Investment Transactions: Purchases and sales of investment securities,
other than U.S. Government obligations and short term notes for the year ended
June 30, 1995 were:
<TABLE>
<CAPTION>
Purchases Sales
----------- -----------
<S> <C> <C>
Growth Fund. . . . . . . . . . . . . . . . . . $17,138,312 $23,837,818
Asset Allocation Fund. . . . . . . . . . . . . $ 2,104,651 $ 1,471,038
Tax Exempt Bond Fund . . . . . . . . . . . . . $ 4,504,040 $ 5,214,557
</TABLE>
For the year ended June 30, 1995, the aggregate cost of purchases and proceeds
from sales of U.S. Government Securities for IAA Asset Allocation Fund were
$199,003 and $124,750, respectively.
For both Federal income tax and financial statement purposes, the identified
cost of investments at June 30, 1995 was $50,851,895 for the Growth Fund,
$8,162,561 for the Asset Allocation Fund, $18,774,517 for the Tax Exempt Bond
Fund and $36,221,714 for the Money Market Fund.
<PAGE>
IAA Trust Mutual Funds - Notes to Financial Statements June 30, 1995
(continued)
The gross unrealized appreciation/depreciation for book and tax purposes at June
30, 1995 consisted of the following:
<TABLE>
<CAPTION>
Appreciation Depreciation
------------ ------------
<S> <C> <C>
Growth Fund. . . . . . . . . . . . . . . . . . $19,560,881 $ 45,650
Asset Allocation Fund. . . . . . . . . . . . . $ 1,359,565 $ 44,539
Tax Exempt Bond Fund . . . . . . . . . . . . . $ 210,523 $437,941
</TABLE>
Note (E) Advisory, Administration and Distribution Services Agreements: Under
its Advisory Agreements with the Funds, IAA Trust Company (the "Advisor")
provides investment advisory services for the Funds. The Funds pay the Advisor
at the following annual percentage rates of the average daily net assets of each
Fund: Growth Fund 0.75%; Asset Allocation Fund 0.75%; Tax Exempt Bond Fund
0.50%; and Money Market Fund 0.50%. These fees are accrued daily and paid the
Advisor monthly. For the year ended June 30, 1995, the Advisor voluntarily
agreed to waive fees totalling $86,900 from the Money Market Fund. IAA Trust
Company also serves as the Funds' Custodian, without compensation.
Under its agreements with the Funds, Fund/Plan Services, Inc., the Funds'
Administrator, provides certain administrative services for which the Funds pay
an annual fee at the following annual percentage rates of the combined average
net assets of the Funds: 0.15% of the first $50,000,000; 0.07% on the next
$50,000,000; and 0.05% of the balance. Fund/Plan Services Inc., also serves as
the Funds' Accounting and Transfer Agent.
Fund/Plan Broker Services, Inc. serves as the Funds' Distributor. Pursuant to
Rule 12b-1 adopted by the Securities and Exchange Commission under the Act, the
Growth Fund, the Asset Allocation Fund, and the Tax Exempt Bond Fund have each
adopted a Plan of Distribution (the "Plans"), effective April 1, 1993. The Plans
permit the participating Funds to pay certain expenses associated with the
distribution of their shares. The maximum amount payable under the Plans, on an
annual basis, is 0.25% of each Fund's average daily net assets.
IAA TRUST ASSET ALLOCATION FUND, INC.
PART C - OTHER INFORMATION
Item 24. Financial Statements and Exhibits: Section /Page
(a) Annual Report to Shareholders
(1) Portfolio Highlights...................................B-
(2) Schedules of Investments, June 30, 1995................B-
(3) Statements of Assets and Liabilities, June 30, 1995....B-
(4) Statements of Operations
for the Year Ended June 30, 1995.......................B-
(5) Statements of Changes in Net Assets
for the Years ended June 30, 1995 and 1994.............B-
(6) Notes to Financial Statements..........................B-
(7) Financial Highlights...................................B-
(8) Report of Independent Accountants......................B-
(b) Exhibits
(1) Charter. See Exhibit 1 to Form N-8B-1 filed September 1978, and
incorporated herein by reference.
(2) Bylaws. See Exhibit 1 to the Registration Statement filed on
Form N1A filed August 1992, and incorporated herein by
reference.
(3) Voting Trust Agreement. None.
(4) a. Specimen stock certificate. See Exhibit 4a to Form N-8B-1
filed September 1978, and incorporated herein by reference.
b. Share account application form.
(5) Investment Advisory Contract. See Exhibit A to Proxy Statement
filed December 1992, and incorporated herein by reference.
(6) a. Underwriting Agreement. See Exhibit B to Proxy Statement
filed August 1992, and incorporated herein by reference.
b. Underwriting Agreement, effective August 1, 1995, is filed
herewith.
(7) Bonus, profit sharing, pension or similar agreements. None.
(8) Custodial Agreement. See Exhibit C to Proxy Statement filed
August 1992, and incorporated herein by reference.
(9) a. Transfer Agent Services Agreement, effective August 1, 1995, is
filed herewith.
b. Administration Agreement, effective August 1, 1995, is filed
herewith.
c. Accounting Services Agreement, effective August 1, 1995, is
filed herewith.
(10) Opinion and consent of Counsel. See Exhibit A to 24f-2 Notice
filed August 1995, and incorporated herein by reference.
(11) Consent of Independent Accountants. See Exhibit on page C- .
(12) All financial statements omitted from Item 23. See Item 24(a)
above.
(13) Agreements regarding initial capital. See Exhibit 13 to Fund's
Post-Effective Amendment No. 3 to its 1933 Act Registration
Statement and Amendment No. 2 to its 1940 Act Registration
Statement on Form N-1, and incorporated herein by reference.
(14) Copies of model plan used in establishment of any retirement plan
in conjunction with which Registrant offers its securities. See
Exhibits 14a and 14b to Form N-1A filed August 1982, and
incorporated herein by reference.
(15) Plan pursuant to Rule 12b-1 describing financing of distribution
of Registrant's shares. See Exhibit B to Proxy Statement filed
December 1992, and incorporated herein by reference.
(16) Schedule for computation of each performance quotation provided in
the Registration Statement in response to Item 22. See Exhibit(s)
beginning on page C- .
Item 25. Persons Controlled by or under Common Control with Registrant.
IAA Control Chart. See Exhibit on page C- .
Item 26. Number of Holders of Securities.
(1) (2)
Title of Class Number of Record Holders
Common
As of Ocotber 2, 1995 176
Item 27. Indemnification.
See Item 19 to Form N-8B-1 filed September 1978, and incorporated
herein by reference. The Registrant also purchases Errors and
Omissions insurance with Directors and Officers liability coverage.
Item 28. Business and Other Connections of Investment Adviser.
As of September 29, 1992, IAA Trust Company became the Registrant's
Investment Adviser. The Trust Company serves as Investment Adviser to
IAA Trust Growth Fund, Inc., IAA Trust Asset Allocation Fund, Inc.,
IAA Trust Tax Exempt Bond Fund, Inc., and IAA Trust Money Market Fund,
Inc. The Trust Company also provides investment services to the
Country Companies Insurance Group and exercises fiduciary powers as
permitted by its charter and the State of Illinois.
Other substantial business, professional, vocational or employment
activities of each director and officer of the Registrant's Investment
Adviser during the past two fiscal years are:
<TABLE>
<CAPTION>
Substantial Business Activities
Name and Position During Past Two Fiscal Years
- ---------------------------- ----------------------------------------------
<S> <C>
Ronald R. Warfield, See information on "Directors and Officers of
Director and President the Funds" - Part B.
Rollie D. Moore, See information on "Directors and Officers of
Director and Vice President the Funds" - Part B.
Donald E. Stephen, Director: Illinois Agricultural Association,
Director CC Services, Inc., Country Casualty Insurance
Company, Country Investors Life Assurance
Company, Country Life Insurance Company,
Country Mutual Insurance Company, Country
Preferred Insurance Company, Illinois
Agricultural Holding Co. Farmer.
Roger D. Kiddoo, Director: Illinois Agricultural Association,
Director CC Services, Inc., Country Casualty Insurance
Company, Country Investors Life Assurance
Company, Country Life Insurance Company,
Country Mutual Insurance Company, Country
Preferred Insurance Company, Illinois
Agricultural Holding Co. Farmer.
Darell D. Sarff, Director: Illinois Agricultural Association,
Director AgriVisor Services, Inc., CC Services, Inc.,
Country Casualty Insurance Company, Country
Investors Life Assurance Company, Country Life
Insurance Company, Country Mutual Insurance
Company, Country Preferred Insurance Company,
IAA Communications Company, IAA Trust Company,
Illinois Agricultural Holding Co. Farmer.
Gary E. Mede, C.F.A., See information on "Directors and Officers of
Executive Vice President the Funds" - Part B.
and Trust Officer
Wayne A. Brown, See information on "Directors and Officers of
Senior Vice President-- the Funds" - Part B.
Investments
Richard M. Miller, See information on "Directors and Officers of
Senior Vice President--Trusts the Funds" - Part B.
and Senior Trust Officer
Richard F. Day, See information on "Directors and Officers of
Vice President and Controller the Funds" - Part B.
David Tipsword, Vice President--Pension Trusts, Trust Officer:
Vice President--Pension IAA Trust Company.
Trusts and Trust Officer
Connie Denison Vice President--Management Information Systems
Vice President--Management and Assistant Trust Officer: IAA Trust Company.
Information Systems and
Assistant Trust Officer
Bernard Dornedon Vice President--Equity Investments: IAA Trust
Vice President-- Company.
Equity Investments
Jerome P. Weiss, See information on "Directors and Officers of
Secretary and General Counsel the Funds" - Part B.
Robert W. Weldon, See information on "Directors and Officers of
Treasurer the Funds" - Part B.
</TABLE>
Item 29. Principal Underwriters
(a) As of October 1, 1992, in addition to acting as the Registrant's
distributor, Fund/Plan Broker Services, Inc. also served as
distributor of the shares of IAA Trust Growth Fund, Inc.,
IAA Trust Tax Exempt Bond Fund, Inc., and IAA Trust Money Market
Fund, Inc. Fund/Plan Broker Services, Inc., the principal underwriter
for the Registrant's securities, currently acts as principal
underwriter for the following entities:
The Brinson Funds
CT&T Funds
Dreman Mutual Fund Group
Farrell Alpha Strategies
First Mutual Funds
Focus Trust, Inc.
The HomeState PA Growth Fund
Matthews International Funds
McM Funds
Roulston Family of Funds
Smith Breeden Series Fund
Smith Breeden Short Duration U.S. Government Fund
Smith Breeden Trust
The Stratton Funds, Inc.
Stratton Growth Fund, Inc.
Stratton Monthly Dividend Shares, Inc.
The Timothy Plan
(b) The table below sets forth certain information as to the
Underwriter's Directors, Officers and Control Persons:
<TABLE>
<CAPTION>
Name and Pincipal Position and Offices Position and Offices
Business Address with Underwriter with Registrant
- ------------------ ------------------------- --------------------
<S> <C> <C>
Kenneth J. Kempf Director,
2 West Elm Street President and None
Conshohocken, PA 19428-0874 Principal
Lynne M. Cannon Vice President and
2 West Elm Street Principal None
Conshohocken, PA 19428-0874
Rocco J. Cavalieri Director and
2 West Elm Street Vice President None
Conshohocken, PA 19428-0874
Gerald J. Holland Director,
2 West Elm Street Vice President and None
Conshohocken, PA 19428-0874 Principal
Joseph M. O'Donnell, Esq. Director and
2 West Elm Street Vice President None
Conshohocken, PA 19428-0874
Sandra L. Adams Assistant Vice None
2 West Elm Street President and
Conshohocken, PA 19428-0874 Principal
Mary P. Efstration Secretary None
2 West Elm Street
Conshohocken, PA 19428-0874
John H. Leven Treasurer None
2 West Elm Street
Conshohocken, PA 19428-0874
</TABLE>
James W. Stratton may be considered a control person of the Underwriter due to
his direct or indirect ownership of Fund/Plan Services, Inc., the parent of the
Underwriter.
(c) Not Applicable.
Item 30. Location of Accounts and Records.
The following accounts, books and other documents of Registrant
required to be maintained by Section 31(a) of the 1940 Act and the
Rule(17 CFR 270.31a-1 to 31a-3) promulgated thereunder are maintained
by Barbara H. Tolle, Senior Vice President Accounting Services, P.O.
Box 874 (#2 West Elm Street), Conshohocken, PA 19428.
1. Journals, general ledger and supporting ledger.
2. Record of the proof of money balance in all ledger accounts in
form of trial balances.
3. Separate ledger accounts showing each shareholder of record and
the number of shares of capital stock held.
IAA Trust Company maintains record of all portfolio purchases and
sales with supporting authorization and records at 808 IAA Drive,
Bloomington, Illinois 61702.
The Certificate of Incorporation of Registrant is maintained in
safekeeping by Robert W. Weldon, Treasurer, 1701 Towanda Avenue,
Bloomington, Illinois 61702.
The Bylaws of Registrant and minute books of stockholders, directors
and directors' committee meetings are maintained by Paul M. Harmon,
Secretary, 1701 Towanda Avenue, Bloomington, Illinois 61702.
Item 31. Management Services. Not Applicable.
Item 32. Undertakings. None.
<PAGE>
[IAA SIGNATURES]
<PAGE>
IAA TRUST ASSET ALLOCATION FUND, INC.
Exhibit Index to Part "C"
of
Post-Effective Amendment
<TABLE>
<CAPTION>
Item No. Description Section Page
- -------- ----------- ------- ----
<S> <C> <C> <C>
24(b)(6)(b) Underwriting Agreement C-
24(b)(9)(a) Transfer Agent Services Agreement C-
24(b)(9)(b) Administration Agreement C-
24(b)(9)(c) Accounting Services Agreement C-
24(b)(11) Consent of Independent Accountants C-
24(b)(16) Schedule(s) for Computation of Performance
Quotations C-
25 IAA Control Chart C-
</TABLE>
UNDERWRITING AGREEMENT
This Agreement, dated as of the 1st day of August, 1995, made by and
between IAA Trust Tax Exempt Bond Fund, Inc. ("the Tax Exempt Bond Fund"), a
corporation duly organized under the laws of the State of Maryland and operating
as a registered investment company under the Investment Company Act of 1940, as
amended (the "Act"); IAA Trust Company ("IAA Trust"), a corporation duly
organized and existing under the laws of the State of Illinois; and Fund/Plan
Broker Services, Inc. ("Fund/Plan"), a corporation duly organized and existing
under the laws of the State of Delaware (collectively, the "Parties").
WITNESSETH THAT:
WHEREAS, IAA Trust has been appointed investment advisor (the "Advisor") to
the Tax Exempt Bond Fund; and
WHEREAS, Fund/Plan is a broker-dealer registered with the U.S. Securities
and Exchange Commission and a member in good standing of the National
Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, the Parties are desirous of entering into an agreement providing
for the distribution by Fund/Plan of the shares of the Tax Exempt Bond Fund (the
"Shares");
NOW, THEREFORE, in consideration of the promises and agreements of the
Parties contained herein and in exchange of good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Parties agree as
follows:
1. Appointment.
The Tax Exempt Bond Fund hereby appoints Fund/Plan as its exclusive agent
for the distribution of the Shares in the fifty United States of America,
the District of Columbia and Puerto Rico, and Fund/Plan hereby accepts such
appointment under the terms of this Agreement. The Tax Exempt Bond Fund
agrees that it will not sell any shares to any person except to fill orders
for the shares received through Fund/Plan; provided, however, that the
foregoing exclusive right shall not apply: (a) to shares issued or sold in
connection with the merger or consolidation of any other investment company
with the Tax Exempt Bond Fund or the acquisition by purchase or otherwise
of all or substantially all of the assets of any investment company or
substantially all of the outstanding shares of any such company by the Tax
Exempt Bond Fund; (b) to shares which may be offered by the Tax Exempt Bond
Fund to its stockholders for reinvestment of cash distributed
<PAGE>
from capital gains or net investment income of the Tax Exempt Bond Fund; or
(c) to shares which may be issued to shareholders of other funds who
exercise any exchange privilege set forth in the Tax Exempt Bond Fund's
Prospectus. Notwithstanding any other provision hereof, the Tax Exempt Bond
Fund may terminate, suspend, or withdraw the offering of the Shares
whenever in its sole discretion, it deems such action to be desirable.
2. Sale and Repurchase of Shares.
(a) Fund/Plan is hereby granted the right as agent for the Tax Exempt Bond
Fund, to sell Shares to the public against orders therefor at the
public offering price (as defined in sub-paragraph 2. (c) below).
(b) Fund/Plan will also have the right to take, as agent for the Tax
Exempt Bond Fund, all actions which, in Fund/Plan's judgment, are
necessary to carry into effect the distribution of the Shares.
(c) The public offering price shall be the net asset value of the Shares
then in effect.
(d) The net asset value of the Shares shall be determined in the
manner provided in the then current prospectus and statement of
additional information relating to the Shares and when
determined shall be applicable to all transactions as provided in
the prospectus. The net asset value of the Shares shall be
calculated by the Tax Exempt Bond Fund or by another entity on
behalf of the Tax Exempt Bond Fund. Fund/Plan shall have no
duty to inquire into or liability for the accuracy of the net asset
value per Share as calculated.
(e) On every sale, the Tax Exempt Bond Fund shall receive the applicable
net asset value of the Shares promptly.
(f) Upon receipt of purchase instructions, Fund/Plan will transmit such
instructions to the Tax Exempt Bond Fund or its transfer agent for
registration of the Shares purchased.
(g) Nothing in this Agreement shall prevent Fund/Plan or any
affiliated person (as defined in the Act) of Fund/Plan from acting
as underwriter or distributor for any other person, firm or
corporation (including other investment companies) or in any way
limit or restrict Fund/Plan or such
<PAGE>
affiliated person from buying, selling, or trading any securities for
its or their own account or for the accounts of others for whom it or
they may be acting; provided, however, that Fund/Plan expressly agrees
that it will not for its own account purchase any shares of the Tax
Exempt Bond Fund except for investment purposes and that it will not
for its own account sell any such shares except by redemption of such
shares by the Tax Exempt Bond Fund, and that it will not undertake any
activities which, in its judgment, will adversely affect the
performance of its obligations to the Tax Exempt Bond Fund under this
Agreement.
(h) Fund/Plan may repurchase Shares at such prices and upon such terms and
conditions as shall be specified in the Prospectus.
3. Rules of Sale of Shares.
Fund/Plan does not agree to sell any specific number of Shares. Fund/Plan,
as Underwriter for the Tax Exempt Bond Fund, undertakes to sell Shares on a
best efforts basis and only against orders received therefor. The Tax
Exempt Bond Fund reserves the right to terminate, suspend or withdraw the
sale of its Shares for any reason deemed adequate by it and the Tax Exempt
Bond Fund reserves the right to refuse at any time or times to sell any of
its Shares to any person for any reason deemed adequate by it.
4. Rules of NASD.
(a) Fund/Plan will conform to the Rules of Fair Practice of the NASD and
the securities laws of any jurisdiction in which it directly or
indirectly sells any Shares.
(b) Fund/Plan will require each dealer with whom Fund/Plan has a selling
agreement to conform to the applicable provisions of the Prospectus,
with respect to the public offering price of the Shares, and Fund/Plan
shall not cause the Tax Exempt Bond Fund to withhold the placing of
purchase orders so as to make a profit thereby.
(c) The Tax Exempt Bond Fund and IAA Trust agree to furnish to
Fund/Plan sufficient copies of any and all: agreements, plans,
communications with the public or other materials which the Tax
Exempt Bond Fund or IAA Trust intends to use in connection
with any sales of Shares in adequate time for Fund/Plan to file
and clear such materials with the proper
<PAGE>
authorities before they are put in use. Fund/Plan and the Tax Exempt
Bond Fund or IAA Trust may agree that any such material does not need
to be filed prior to distribution. In addition, the Tax Exempt Bond
Fund and IAA Trust agree not to use any such materials until so filed
and cleared for use by appropriate authorities as well as by
Fund/Plan.
(d) Fund/Plan, at its own expense, will qualify as a dealer or broker, or
otherwise, under all applicable state or federal laws required in
order that the Shares may be sold in such states as may be mutually
agreed upon by the Parties.
(e) Fund/Plan shall remain registered with the U.S. Securities and
Exchange Commission and a member of the National Association of
Securities Dealers for the term of this Agreement.
(f) Fund/Plan shall not, in connection with any sale or solicitation of
a sale of the Shares, make or authorize any representative,
Service Organization, broker or dealer to make, any
representations concerning the Shares except those contained in
the Prospectus covering the Shares and in communications with
the public or sales materials approved by Fund/Plan as
information supplemental to such Prospectus. Copies of the
Prospectus will be supplied by the Tax Exempt Bond Fund or
IAA Trust to Fund/Plan in reasonable quantities upon request.
5. Records to be Supplied by the Tax Exempt Bond Fund.
The Tax Exempt Bond Fund shall furnish to Fund/Plan copies of all
information, financial statements and other papers which Fund/Plan may
reasonably request for use in connection with the distribution of the
Shares including, but not limited to, one certified copy of all financial
statements prepared for the Tax Exempt Bond Fund by its independent public
accountants.
6. Expenses.
(a) The Tax Exempt Bond Fund will bear the following expenses:
(i) preparation, setting in type, and printing of sufficient copies
of the prospectuses and statements of additional information for
distribution to shareholders, and the distribution of same to the
shareholders;
(ii) preparation, printing, and distribution of reports and other
<PAGE>
communications to shareholders;
(iii) registration of the Shares under the federal securities laws;
(iv) qualification of the Shares for sale in the jurisdictions as
directed by the Tax Exempt Bond Fund;
(v) maintaining facilities for the issue and transfer of the Shares;
(vi) supplying information, prices, and other data to be furnished by
the Tax Exempt Bond Fund under this Agreement; and
(vii) any original issue taxes or transfer taxes applicable to the sale
or delivery of the Shares or certificates therefor.
(b) Underwriter will pay expenses incident to the sale and distribution of
the Shares sold hereunder to the extent that payment of such expenses
is made by the Fund pursuant to a Distribution Plan as set forth under
Rule 12b-1 of the Investment Company Act of 1940, as amended. All
expenses in excess of those monies paid pursuant to the Distribution
Plan will be paid by the Advisor.
(c) The Underwriter will provide a report to the Tax Exempt Bond Fund
regarding the Distribution Plan under Rule 12b-1 on a quarterly basis.
The report will identify accruals, expenditures and trail commission
payments.
7. Term.
(a) The term of this Agreement shall commence on the date hereinabove
first written ("Effective Date").
(b) This Agreement shall remain in effect for two (2) years from the
Effective Date. This Agreement shall continue thereafter for periods
not exceeding one (1) year if approved at least annually (i) by a vote
of a majority of the outstanding voting securities of each Series or
by a vote of the Board of Directors of the Tax Exempt Bond Fund, and
(ii) by a vote of a majority of the Directors of the Tax Exempt Bond
Fund who are not interested persons or parties to this Agreement
(other than as Directors of the Tax Exempt Bond Fund), cast in person
at a meeting called for the purpose of voting on such approval.
(c) This Agreement (i) may at any time be terminated without the payment
of any penalty, either by a vote of the Directors of the Tax Exempt
Bond Fund or by a vote of a majority of the outstanding voting
securities on sixty (60) days' written notice to Fund/Plan; and (ii)
may be terminated by Fund/Plan on sixty (60) days'
<PAGE>
written notice to the Tax Exempt Bond Fund.
(d) This Agreement shall automatically terminate in the event of its
assignment or upon the termination of the Administration Agreement
between Fund/Plan Services, Inc., and the Tax Exempt Bond Fund.
8. Indemnification of Fund/Plan by IAA Trust.
IAA Trust will indemnify and hold Fund/Plan harmless for the actions of IAA
Trust's employees registered with the NASD as Fund/Plan representatives and
will undertake to maintain compliance with all rules and regulations
concerning any and all sales presentations made by such employees.
9. Liability of Fund/Plan.
(a) Fund/Plan, its directors, officers, employees, shareholders and
agents shall not be liable for any error of judgment or mistake of law
or for any loss suffered by the Tax Exempt Bond Fund in connection
with the performance of this Agreement, except a loss resulting from a
breach of Fund/Plan's obligation pursuant to Section 4 of this
Agreement, a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful
misfeasance, bad faith or negligence on the part of Fund/Plan in the
performance of its obligations and duties or by reason of its reckless
disregard of its obligations and duties under this Agreement.
(b) The Tax Exempt Bond Fund agrees to indemnify and hold harmless
Fund/Plan against any and all liability, loss, damages, costs or
expenses (including reasonable counsel fees) which Fund/Plan may incur
or be required to pay hereafter, in connection with any action, suit
or other proceeding, whether civil or criminal, before any court or
administrative or legislative body, in which Fund/Plan may be involved
as a party or otherwise or with which Fund/Plan may be threatened, by
reason of the offer or sale of the Tax Exempt Bond Fund shares by
persons other than Fund/Plan or its representatives.
(c) Any person, even though also a director, officer, employee,
shareholder or agent of Fund/Plan, who may be or become an officer,
director, trustee, employee or agent of the Tax Exempt Bond Fund,
shall be deemed, when rendering services to the Tax Exempt Bond Fund
or acting on any business of the Tax Exempt Bond Fund (other than
services or business in connection with Fund/Plan's duties
<PAGE>
hereunder), to be rendering such services to or acting solely for the
Tax Exempt Bond Fund and not as a director, officer, employee,
shareholder or agent, or one under the control or direction of
Fund/Plan even though receiving a salary from Fund/Plan.
(d) The Tax Exempt Bond Fund agrees to indemnify and hold harmless
Fund/Plan, and each person, who controls Fund/Plan within the meaning
of Section 15 of the Securities Act of 1933, as amended (the
"Securities Act"), or Section 20 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), against any and all losses,
claims, damages and liabilities, joint or several (including any
reasonable investigative, legal and other expenses incurred in
connection therewith) to which they, or any of them, may become
subject under the Act, the Securities Act, the Exchange Act or other
federal or state law or regulation, at common law or otherwise insofar
as such losses, claims, damages or liabilities (or actions, suits or
proceedings in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact
contained in a prospectus, statement of additional information,
supplement thereto, sales literature or other written information
prepared by the Tax Exempt Bond Fund and furnished by the Tax Exempt
Bond Fund to Fund/Plan for Fund/Plan's use hereunder, disseminated by
the Tax Exempt Bond Fund or arise out of or are based upon any
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading. Such indemnity shall not, however, inure to the benefit of
Fund/Plan (or any person controlling Fund/Plan) on account of any
losses, claims, damages or liabilities (or actions, suits or
proceedings in respect thereof) arising from the sale of the shares of
the Tax Exempt Bond Fund to any person by Fund/Plan (i) if such untrue
statement or omission or alleged untrue statement or omission was made
in the prospectus, statement of additional information, or supplement,
sales or other literature, in reliance upon and in conformity with
information furnished in writing to the Tax Exempt Bond Fund by
Fund/Plan specifically for use therein or (ii) if such losses, claims,
damages, or liabilities arise out of or are based upon an untrue
statement or omission or alleged untrue statement or omission found in
any prospectus, statement of additional information, supplement, sales
or other
<PAGE>
literature, subsequently corrected, but, negligently distributed by
Fund/Plan and a copy of the corrected prospectus was not delivered to
such person at or before the confirmation of the sale to such person.
Underwriter agrees to indemnify and hold harmless the Fund, each
person, if any, who controls the Fund within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, insofar as
such losses, claims, damages or liabilities arise out of or are based
upon any untrue statement or omission or alleged untrue statement of a
material fact contained in a Prospectus or Statement of Additional
Information or any supplement thereto, or arise out of or are based
upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, if based upon information furnished to the
Fund by the Underwriter in writing specifically for use therein.
(e) Fund/Plan shall not be responsible for any damages, consequential or
otherwise, which IAA Trust or the Tax Exempt Bond Fund may experience,
due to the disruption of the distribution of Shares caused by any
action arising out of the actions or inactions of any registered
representative or affiliate of Fund/Plan.
10. Amendments.
No provision of this Agreement may be amended or modified, in any manner
whatsoever except by a written agreement properly authorized and executed
by the Parties.
11. Section Headings.
Section and Paragraph headings are for convenience only and shall not be
construed as part of this Agreement.
12. Reports.
Fund/Plan shall prepare reports for the Board of Directors of the Tax
Exempt Bond Fund on a quarterly basis showing such information as from time
to time shall be reasonably requested by such Board.
13. Severability.
If any part, term or provision of this Agreement is held by any court to be
illegal, in conflict with any law or otherwise invalid, the remaining
portion or portions shall be considered severable and not 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
<PAGE>
or provision held to be illegal or invalid provided that the basic
agreement is not thereby substantially impaired.
14. Governing Law.
This Agreement shall be governed by the laws of the Commonwealth of
Pennsylvania and the venue of any action arising under this Agreement shall
be Montgomery County, Commonwealth of Pennsylvania.
15. Authority to Execute
The Parties represent and warrant that the execution and delivery of this
Agreement by the undersigned officers of the Parties has been duly and
validly authorized by resolution of the respective Boards of Directors or
each of the Parties.
16. This Agreement may be executed in two or more counterparts, each of which
when so executed shall be deemed to be an original, but such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
consisting of nine typewritten pages to be signed by their duly authorized
officers, as of the day and year first above written.
IAA Trust Company
- ------------------------------------
By: Gary E. Mede
Vice President
IAA Trust Tax Exempt Bond Fund, Inc. Fund/Plan Broker Services, Inc.
- ------------------------------------ -------------------------------------
By: Richard M. Miller By: Kenneth J. Kemf,
Vice President President
TRANSFER AGENT SERVICES AGREEMENT
This Agreement, dated as of the 1st day of August, 1995, made by and
between IAA Trust Tax Exempt Bond Fund, Inc. (the "Tax Exempt Bond Fund"), a
corporation duly organized and existing under the laws of the state of Maryland
and operating as a registered investment company under the Investment Company
Act of 1940, as amended (the "Act"), and Fund/Plan Services, Inc. ("Fund/Plan"),
a corporation duly organized and existing under the laws of the State of
Delaware (collectively, the "Parties").
WITNESSETH THAT:
WHEREAS, the Tax Exempt Bond Fund desires to retain Fund/Plan to perform
share transfer agency, redemption and dividend disbursing services as set forth
in this Agreement and in Schedule "A" attached hereto, and to perform certain
other functions in connection with these duties; and
WHEREAS, Fund/Plan is registered with the Securities and Exchange
Commission as a Transfer Agent as required under Section 17(A)(c) of the
Securities Exchange Act of 1934, as amended; and
WHEREAS, Fund/Plan is willing to serve in such capacity and perform such
functions upon the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for good and valuable consideration, the receipt and
sufficiency is hereby acknowledged, the Parties hereto, intending to be legally
bound, do hereby agree as follows:
Section 1. The terms as defined in this Section wherever used in this
Agreement, or in any amendment or supplement hereto, shall have the meanings
herein specified unless the context otherwise requires.
Share Certificates shall mean the certificates representing shares of stock
of the Tax Exempt Bond Fund.
Shareholders shall mean the registered owners of the Shares of the Tax
Exempt Bond Fund in accordance with the share registry records maintained by
Fund/Plan for the Tax Exempt Bond Fund.
Shares shall mean the issued and outstanding shares of the Tax Exempt Bond
Fund.
Signature Guarantee shall mean the guarantee of signatures by an "eligible
guarantor institution" as defined in rule 17Ad-15 under the Securities Exchange
Act of 1934, as amended. Eligible guarantor institutions include banks, brokers,
dealers, credit unions,
<PAGE>
national securities exchanges, registered securities associations, clearing
agencies and savings associations. Broker-dealers guaranteeing signatures must
be members of a clearing corporation or maintain net capital of at least
$100,000. Signature guarantees will be accepted from any eligible guarantor
institution which participates in a signature guarantee program.
Oral Instruction shall mean an authorization, instruction, approval, item
or set of data, or information of any kind transmitted to Fund/Plan in person or
by telephone, telegram, telecopy or other mechanical or documentary means
lacking an original signature, by a person or persons reasonably identified to
Fund/Plan to be a person or persons so authorized by a resolution of the Board
of Directors of the Tax Exempt Bond Fund.
Written Instruction shall mean an authorization, instruction, approval,
item or set of data or information of any kind transmitted to Fund/Plan in an
original writing containing an original signature or a copy of such document
transmitted by telecopy including transmission of such signature reasonably
identified to Fund/Plan to be the signature of a person or persons so authorized
by a resolution of the Board of Directors of the Tax Exempt Bond Fund to give
Written Instructions to Fund/Plan.
TRANSFER AGENCY SERVICES
Section 2. The Fund shall furnish to Fund/Plan as Transfer Agent a
sufficient supply of blank Share Certificates and from time to time will renew
such supply upon the request of Fund/Plan. Such blank Share Certificates shall
be signed manually or by facsimile signatures of officers of the Fund authorized
by law or the by-laws of the Fund to sign Share Certificates and, if required,
shall bear the corporate seal or a facsimile thereof.
Section 3. Fund/Plan as Transfer Agent shall make original issues of Shares
in accordance with the terms of this agreement below and with the Tax Exempt
Bond Fund's Prospectus and Statement of Additional Information then in effect,
upon the written request of the Tax Exempt Bond Fund, and upon being furnished
with (i) a certified copy of a resolution or resolutions of the Board of
Directors of the Tax Exempt Bond Fund authorizing such issue; (ii) an opinion of
counsel as to the validity of such Shares; and (iii) necessary funds for the
payment of any original issue tax applicable to such additional Shares.
Section 4. Transfers of Shares shall be registered and new Share
Certificates issued by Fund/Plan upon redemption of outstanding Share
Certificates, (i) in the form deemed by Fund/Plan to be properly endorsed for
transfer, (ii) with all necessary endorser's signatures
<PAGE>
guaranteed pursuant to Rule 17Ad-15 under the Securities Exchange Act of 1934,
as amended, accompanied by, (iii) such assurances as Fund/Plan shall deem
necessary or appropriate to evidence the genuineness and effectiveness of each
necessary endorsement, and (iv) satisfactory evidence of compliance with all
applicable laws relating to the payment or collection of taxes.
Section 5. When mail is used for delivery of Share Certificates, Fund/Plan
shall forward Share Certificates in "non-negotiable" form by first-class mail,
and Share Certificates in "negotiable" form by registered mail, all mail
deliveries to be covered while in transit to the addressee by insurance arranged
for by Fund/Plan.
Section 6. In registering transfers, Fund/Plan as Transfer Agent may rely
upon the applicable commercial code or any other applicable law which, in the
written opinion (a copy of which shall previously have been furnished to the Tax
Exempt Bond Fund) of counsel, protect Fund/Plan and the Tax Exempt Bond Fund in
not requiring complete documentation, in registering transfer without inquiry
into adverse claims, in delaying registration for purposes of such inquiry, or
in refusing registration where in its judgment an adverse claim requires such
refusal.
Section 7. Fund/Plan as Transfer Agent may issue new Share Certificates in
place of Share Certificates represented to have been lost, destroyed or stolen,
upon receiving indemnity satisfactory to Fund/Plan and may issue new Share
Certificates in exchange for and upon surrender of mutilated Share Certificates.
Section 8. In case any officer of the Fund who shall have signed manually
or whose facsimile signature shall have been affixed to blank Share Certificates
shall die, resign or be removed prior to the issuance of such Share
Certificates, Fund/Plan as Transfer Agent may issue or register such Share
Certificates as the Share Certificates of the Fund notwithstanding such death,
resignation or removal; and the Fund shall file promptly with Fund/Plan such
approval, adoption or ratification as may be required by law.
Section 9. With respect to confirmed trades received by Fund/Plan as
Transfer Agent for the Fund, Fund/Plan shall periodically notify the Fund of the
current status of outstanding confirmed trades. Fund/Plan is authorized to
cancel confirmed trades which have been outstanding for thirty (30) days. Upon
such cancellation, the Transfer Agent shall instruct the Fund Accounting Agent
to adjust the books of the Fund accordingly.
Section 10. Fund/Plan will maintain stock registry records in the usual
form in which
<PAGE>
it will note the issuance, transfer and redemption of Shares and the issuance
and transfer of Share Certificates, and is also authorized to maintain an
account entitled Unissued Certificate Account in which it will record the Shares
and fractions issued and outstanding from time to time for which issuance of
Share Certificates is deferred. Fund/Plan will provide reports of Fund Share
purchases, redemptions, and total Shares outstanding on the next business day
after each net asset valuation. Fund/Plan is authorized to keep records, which
will be part of the stock transfer records, in which it will note the names and
registered address of Shareholders and the number of Shares and fractions from
time to time owned by them for which no Share Certificates are outstanding. Each
Shareholder will be assigned a single account number even though Shares for
which Certificates have been issued will be accounted for separately.
Section 11. Fund/Plan will issue Share Certificates for Shares of the Fund,
only upon receipt of a written request from a Shareholder. In all other cases,
the Fund authorizes Fund/Plan to dispense with the issuance and countersignature
of Share Certificates whenever Shares are purchased. In such case Fund/Plan as
Transfer Agent, shall merely note on its stock registry records the issuance of
the Shares and fractions (if any), shall credit the Unissued Certificate Account
with the Shares and fractions issued and shall credit the proper number of
Shares and fractions to the respective Shareholders. Likewise, whenever
Fund/Plan has occasion to surrender for redemption Shares and fractions owned by
Shareholders, it shall be unnecessary to issue Share Certificates for redemption
purposes. The Fund authorizes Fund/Plan in such cases to process the
transactions by appropriate entries in its Share transfer records, and debiting
of the Unissued Certificate Account and the record of issued Shares outstanding.
Section 12. Under this Agreement, Fund/Plan shall, in addition to the
duties and functions above-mentioned, perform the usual duties and functions of
a stock transfer agent for an investment company as listed in Schedule "A"
attached hereto. Fund/Plan may rely conclusively and act without further
investigation upon any list, instruction, certification, authorization or other
instrument or paper believed by it in good faith to be genuine and unaltered,
and to have been signed, countersigned, or executed by duly authorized person or
persons, or upon the instructions of any officer of the Tax Exempt Bond Fund, or
upon the advice of counsel for the Tax Exempt Bond Fund or for Fund/Plan.
Fund/Plan may record any transfer of Shares which is reasonably believed by it
to have been duly authorized or may
<PAGE>
refuse to record any transfer of Shares if in good faith Fund/Plan in its
capacity as Transfer Agent deems such refusal necessary in order to avoid any
liability either of the Tax Exempt Bond Fund or Fund/Plan. The Tax Exempt Bond
Fund agrees to indemnify and hold harmless Fund/Plan from and against any and
all losses, costs, claims, and liability which it may suffer or incur by reason
of so relying or acting or refusing to act. Fund/Plan shall maintain and
reconcile all operating bank accounts necessary to facilitate all transfer
agency processes; including, but not limited to, distribution disbursements,
redemptions and payment clearance accounts.
Section 13. In case of any request or demand for the inspection of the
Share records of the Tax Exempt Bond Fund, Fund/Plan as Transfer Agent shall
endeavor to notify the Tax Exempt Bond Fund and to secure instructions as to
permitting or refusing such inspection. Fund/Plan may, however, exhibit such
records to any person in any case where it is advised by its counsel that it may
be held liable for failure to do so.
Section 14. Fund/Plan acknowledges that all records that it maintains on
behalf of the Tax Exempt Bond Fund are the property of the Tax Exempt Bond Fund
and will be surrendered promptly to the Tax Exempt Bond Fund upon written
request. Fund/Plan will preserve, for the periods prescribed under Rule 31a-2
under the Act, all such records required to be maintained under Rule 31a-1 of
the Act.
ISSUANCE OF SHARES
Section 15. Prior to the daily determination of net asset value in
accordance with the Fund's Prospectus and Statement of Additional Information,
Fund/Plan shall process all purchase orders received since the last
determination of the Fund's net asset value.
Fund/Plan shall calculate on a daily basis the amount available for
investment in Shares at the net asset value determined by the Tax Exempt Bond
Fund's pricing agent as of the close of regular trading on the New York Stock
Exchange, the number of Shares and fractional Shares to be purchased and the net
asset value to be deposited with the custodian of the assets of the Tax Exempt
Bond Fund (the "Custodian"). Fund/Plan shall place a purchase order daily with
the Tax Exempt Bond Fund for the proper number of Shares and fractional Shares
to be purchased and confirm such number to IAA Trust Company, in writing.
Section 16. Fund/Plan having made the calculations provided for in Section
9, shall thereupon pay over the net asset value of Shares purchased to the
Custodian. The proper number of Shares and fractional Shares shall then be
issued daily and credited by Fund/Plan
<PAGE>
to the Shareholder Registration Records. The Shares and fractional Shares
purchased for each Shareholder will be credited by Fund/Plan to that
Shareholder's separate account. Fund/Plan shall mail to each Shareholder a
confirmation of each purchase with, if requested, copies to the Tax Exempt Bond
Fund. Such confirmations will show the prior Share balance, the new Share
balance, the Shares for which Stock Certificates are outstanding (if any), the
amount invested and the price paid for the newly purchased Shares.
REDEMPTIONS
Section 17. Prior to the daily determination of net asset value in
accordance with the Fund's Prospectus and Statement of Additional Information
then in effect, Fund/Plan shall process all requests from Shareholders to redeem
Shares and determine the number of Shares required to be redeemed to make
monthly payments, automatic payments or the like. Thereupon, Fund/Plan shall
advise the Tax Exempt Bond Fund of the total number of Shares available for
redemption and the number of Shares and fractional Shares requested to be
redeemed. The Tax Exempt Bond Fund's pricing agent shall then determine the
applicable net asset value. Thereafter Fund/Plan shall furnish the Tax Exempt
Bond Fund with an appropriate confirmation of the redemption and process the
redemption by filing with the Custodian an appropriate statement and make the
proper distribution and application of the redemption proceeds in accordance
with the Fund's Prospectus and Statement of Additional Information then in
effect. The stock registry books recording outstanding Shares, the Shareholder
Registration Records and the individual account of the Shareholder shall be
properly debited.
Section 18. The proceeds of redemption shall be remitted by Fund/Plan in
accordance with the Fund's Prospectus and Statement of Additional Information
then in effect, by check mailed to the Shareholder at the Shareholder's
registered address or wired to an authorized bank account. If Share Certificates
have been issued for Shares being redeemed, then such Share Certificates and a
stock power with a signature guarantee of a commercial bank, or a member firm of
a national securities exchange shall accompany the redemption request. If Share
Certificates have not been issued to the redeeming Shareholder, the signature of
the Shareholder on the redemption request must be similarly guaranteed. The Fund
may authorize Fund/Plan to waive signature guarantees.
For the purposes of redemption of Shares which have been purchased within
15 days of a redemption request, the Tax Exempt Bond Fund shall provide
Fund/Plan, from time to
<PAGE>
time, with Written Instructions concerning the time within which such requests
may be honored.
DIVIDENDS
Section 19. The Tax Exempt Bond Fund shall notify Fund/Plan of the date of
each dividend declaration or capital gains distribution and the record date for
determining the Shareholders entitled to payment. The per share payment amount
of any dividend or capital gain shall be determined by the Tax Exempt Bond Fund
after receipt of necessary information from and consultation with Fund/Plan.
Section 20. On or before each payment date, the Tax Exempt Bond Fund will
notify Fund/Plan of the total amount of the dividend or distribution currently
payable. Fund/Plan will, on the designated payment date, automatically reinvest
all dividends in additional Shares except in cases where Shareholders have
elected to receive distribution in cash, in which case Fund/Plan will mail
distribution checks to the Shareholders for the proper amounts payable to them
from monies transferred by The Custodian to Fund/Plan for that purpose.
FEES
Section 21. The Tax Exempt Bond Fund agrees to pay Fund/Plan compensation
for its services and to reimburse it for expenses, at the rates and amounts as
set forth in Schedule "B" attached hereto, and as shall be set forth in any
amendments to such Schedule "B" approved by the Tax Exempt Bond Fund and
Fund/Plan. The Tax Exempt Bond Fund agrees and understands that Fund/Plan's
compensation will be comprised of two components, payable on a monthly basis, as
follows:
(i) Subject to a minimum fee, the Tax Exempt Bond Fund agrees to
pay Fund/Plan an annual Shareholder account maintenance fee calculated by
multiplying the monthly average number of accounts in each Fund by one twelfth
(1/12th) the per account fee as stated in Schedule "B". A combined account fee,
subject to a minimum amount, will be billed monthly to the Tax Exempt Bond Fund.
These fees are to be paid by the Tax Exempt Bond Fund within ten calendar days
after receipt of an invoice from Fund/Plan.
(ii) reimbursement of any reasonable out-of-pocket expenses paid
by Fund/Plan on behalf of the Tax Exempt Bond Fund, which out-of-pocket expenses
will be billed to the Tax Exempt Bond Fund within the first ten calendar days of
the month following the month in which such out-of-pocket expenses were
incurred. The Tax Exempt Bond Fund agrees to reimburse Fund/Plan for such
expenses within ten calendar days of receipt of such
<PAGE>
bill.
For the purpose of determining fees payable to Fund/Plan, the value of the
Tax Exempt Bond Fund's net assets shall be computed at the times and in the
manner specified its Prospectus and Statement of Additional Information then in
effect. During the term of this Agreement, should the Tax Exempt Bond Fund seek
services or functions in addition to those outlined above or in Schedule "A"
attached, a written amendment to this Agreement specifying the additional
services and corresponding compensation shall be executed by both Fund/Plan and
the Tax Exempt Bond Fund.
GENERAL PROVISIONS
Section 22. Fund/Plan shall maintain records (which may be part of the
stock transfer records) in connection with the issuance and redemption of
Shares, and the disbursement of dividends and dividend reinvestments, in which
will be noted the transactions effected for each Shareholder and the number of
Shares and fractional Shares owned by each Shareholder. Fund/Plan agrees to make
available upon request and to preserve for the periods prescribed in Rule 31a-2
under the Investment Company Act of 1940, as amended, any records relating to
services provided under this Agreement which are required to be maintained by
Rule 31a-1 under the Act.
Section 23. In addition to the services as Transfer Agent and dividend
disbursing agent set forth above, Fund/Plan will perform other services for the
Tax Exempt Bond Fund as agreed upon from time to time, including but not limited
to, preparation of and mailing Federal Tax Information Forms, mailing
semi-annual reports of the Tax Exempt Bond Fund, preparation of one annual list
of Shareholders, and mailing notices of shareholders' meetings, proxies and
proxy statements.
Section 24. Nothing contained in this Agreement is intended to or shall
require Fund/Plan in any capacity hereunder, to perform any functions or duties
on any holiday, day of special observance or any other day on which the
Custodian or the New York Stock Exchange are closed. Functions or duties
normally scheduled to be performed on such days shall be performed on, and as
of, the next business day on which both the New York Stock Exchange and the
Custodian are open.
Section 25.
(a) Fund/Plan, its directors, officers, employees, shareholders and
agents shall only be liable for any error of judgment or mistake of law or for
any loss suffered by the Tax
<PAGE>
Exempt Bond Fund, in connection with the performance of this Agreement that
result from willful misfeasance, bad faith or negligence on the part of
Fund/Plan in the performance of its obligations and duties under this Agreement.
(b) Any person, even though also a director, officer, employee,
shareholder or agent of Fund/Plan, who may be or become an officer, trustee,
employee, or agent of the Tax Exempt Bond Fund, shall be deemed, when rendering
services to such entity or acting on any business of the Tax Exempt Bond Fund,
(other than services or business in connection with Fund/Plan's duties
hereunder), to be rendering such services to or acting solely for the Tax Exempt
Bond Fund and not as a director, officer, employee, shareholder or agent of, or
one under the control or direction of Fund/Plan even though that person is being
paid salary by Fund/Plan.
(c) Notwithstanding any other provision of this Agreement, the Tax
Exempt Bond Fund shall indemnify and hold harmless Fund/Plan, its directors,
officers, employees, shareholders and agents from and against any and all
claims, demands, expenses and liabilities (whether with or without basis in fact
or law) of any and every nature which Fund/Plan may sustain or incur or which
may be asserted against Fund/Plan by any person by reason of, or as a result of
(i) any action taken or omitted to be taken by Fund/Plan in good faith
hereunder; (ii) any action taken or omitted to be taken by Fund/Plan in good
faith in reliance upon any certificate, instrument, order, or stock certificate
or other document reasonably believed by it to be genuine and to be signed,
countersigned or executed by any duly authorized person, upon the Oral
Instructions or Written Instructions of an authorized person of the Tax Exempt
Bond Fund or upon the opinion of legal counsel to the Tax Exempt Bond Fund, or
its own counsel; or (iii) any action taken or omitted to be taken by Fund/Plan
in connection with its appointment under this agreement, which action or
omission was taken in good faith in reliance upon any law, act, regulation or
interpretation of the same even though the same may thereafter have been
altered, changed, amended, or repealed. Indemnification under this subparagraph,
however, shall not apply to actions or omissions of Fund/Plan or its directors,
officers, employees, shareholders, or agents in cases of its or their willful
misfeasance, bad faith, negligence or reckless disregard of its or their duties
hereunder.
(d) Fund/Plan shall give written notice to the Tax Exempt Bond Fund
within ten (10) business days of receipt by Fund/Plan of a written assertion or
claim of any threatened or pending legal proceeding which may be subject to this
indemnification. The
<PAGE>
failure to notify the Tax Exempt Bond Fund of such written assertion or claim
shall not, however, operate in any manner whatsoever to relieve the Tax Exempt
Bond Fund of any liability arising under this Section or otherwise, except to
the extent that failure to give notice prejudices the Tax Exempt Bond Fund.
(e) For any legal proceeding giving rise to this indemnification, the
Tax Exempt Bond Fund shall be entitled to defend or prosecute any claim in the
name of Fund/Plan at its own expense and through counsel of its own choosing if
it gives written notice to Fund/Plan within ten (10) business days of receiving
notice of such claim. Notwithstanding the foregoing, Fund/Plan may participate
in the litigation at its own expense through counsel of its own choosing. In the
event the Tax Exempt Bond Fund chooses to defend or prosecute such claim, the
parties shall cooperate in the defense or prosecution thereof and shall furnish
such records and other information as are reasonably necessary.
(f) The Tax Exempt Bond Fund shall not settle any claim under Sub
Section (d) and (e) without Fund/Plan's express written consent, which consent
shall not be unreasonably withheld. Fund/Plan shall not settle any such claim
without the Tax Exempt Bond Fund's express written consent, which likewise shall
not be unreasonably withheld.
Section 26. Fund/Plan is authorized, upon receipt of Written Instructions
from the Tax Exempt Bond Fund, to make payment upon redemption of Shares without
a signature guarantee. The Tax Exempt Bond Fund hereby agrees to indemnify and
hold Fund/Plan, its successors and assigns, harmless of and from any and all
expenses, damages, claims, suits, liabilities, actions, demands, losses
whatsoever arising out of or in connection with a payment by Fund/Plan upon
redemption of Shares pursuant to Written Instructions and without a signature
guarantee; upon the request of Fund/Plan, the Tax Exempt Bond Fund shall assume
the entire defense of any action, suit or claim subject to the foregoing
indemnity. Fund/Plan shall notify the Tax Exempt Bond Fund of any such action,
suit or claim within thirty (30) days after receipt by Fund/Plan of notice
thereof.
Section 27.
(a) The term of this Agreement shall be for a period of three (3) years,
commencing on the date hereinabove first written (the "Effective Date"), and
shall continue thereafter on a year to year term subject to termination by
either Party set forth in (c) below.
(b) The fee schedule set forth in Schedule "B" attached shall be fixed for
three (3) years commencing on the Effective Date of this Agreement. Such fees
are to be paid by the
<PAGE>
Fund within ten calendar days of receipt of an invoice from Fund/Plan after the
end of each month.
(c) After the initial term of this Agreement, the Tax Exempt Bond Fund or
Fund/Plan may give written notice to the other of the termination of this
Agreement, such termination to take effect at the time specified in the notice,
which date shall not be less than one hundred twenty (120) days after the date
of receipt of such notice. Upon the effective termination date, the Tax Exempt
Bond Fund shall pay to Fund/Plan such compensation as may be due as of the date
of termination and shall likewise reimburse Fund/Plan for any out-of-pocket
expenses and disbursements reasonably incurred by Fund/Plan to such date.
(d) If a successor to any of Fund/Plan's duties or responsibilities under
this Agreement is designated by the Tax Exempt Bond Fund by written notice to
Fund/Plan in connection with the termination of this Agreement, Fund/Plan shall
promptly upon such termination and at the expense of the Tax Exempt Bond Fund,
transfer all required records and shall cooperate in the transfer of such duties
and responsibilities.
Section 28. The Tax Exempt Bond Fund shall file with Fund/Plan a certified
copy of each resolution of its Board of Directors authorizing the execution of
Written Instructions or the transmittal of Oral Instructions, as provided in
Section 1 of this Agreement.
Section 29. Except as otherwise provided in this Agreement, any notice or
other communication required by or permitted to be given in connection with this
Agreement shall be in writing, and shall be delivered in person or sent by first
class mail, postage prepaid, to the respective parties as follows:
If to the Tax Exempt Bond Fund: If to Fund/Plan:
IAA Trust Tax Exempt Bond Fund, Inc. Fund/Plan Services, Inc.
808 IAA Drive 2 West Elm Street
Bloomington, IL 61702 Conshohocken, PA 19428
Attention: Richard M. Miller Attention: Kenneth J. Kempf,
Vice President President
Section 30. The Tax Exempt Bond Fund represents and warrants to
Fund/Plan that the execution and delivery of this Agreement by the undersigned
officers of the Tax Exempt Bond Fund has been duly and validly authorized by
resolution of the Board of Directors of the Tax Exempt Bond Fund.
<PAGE>
Section 31. This Agreement may be executed in two or more counterparts,
each of which when so executed shall be deemed to be an original, but such
counterparts shall together constitute but one and the same instrument.
Section 32. This Agreement shall extend to and shall be binding upon the
Parties and their respective successors and assigns; provided, however, that
this Agreement shall not be assignable by the Tax Exempt Bond Fund without the
written consent of Fund/Plan or by Fund/Plan without the written consent of the
Tax Exempt Bond Fund, authorized or approved by a resolution of their respective
Boards of Directors.
Section 33. This Agreement shall be governed by the laws of the
Commonwealth of Pennsylvania and the venue of any action arising under this
Agreement shall be Montgomery County, Commonwealth of Pennsylvania.
Section 34. No provision of this Agreement may be amended or modified, in
any manner except in writing, properly authorized and executed by Fund/Plan and
the Tax Exempt Bond Fund.
Section 35. If any part, term or provision of this Agreement is held by any
court 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, provided that the basic agreement is not thereby
substantially impaired.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
consisting in its entirety, of twelve typewritten pages, together with Schedules
"A" and "B", to be signed by their duly authorized officers as of the day and
year first above written.
IAA Trust Tax Exempt Bond Fund, Inc. Fund/Plan Services, Inc.
- -------------------------------------- ----------------------------------
By: Gary E. Mede By: Kenneth J. Kempf
Vice President President
<PAGE>
Schedule "A"
Transfer Agent/Shareholder Services
for
IAA Trust Tax Exempt Bond Fund, Inc.
The following Transfer Agency Services shall be provided under this agreement:
Opening new accounts and entering demographic data into shareholder base.
Real-time Customer Information File (CIF) to link accounts within a Fund
and across all Funds.
100% Quality Control of new accounts opened on a same-day/next day basis.
Account Maintenance
Processing all investments including:
- initial investments
- subsequent investments through lock box computer interface
- pre-authorized investments through ACH - government allotments
through ACH
Processing tax ID certifications and Non-Resident Alien (NRA) and reporting
back-up withholding.
Processing legal transfers of accounts.
Automated exchange processing.
Recording and retaining on tape all shareholder calls.
Research and respond to shareholder calls and written inquiries.
Generating account statements with copies to appropriate interested
parties. (Up to four statements.)
Redemption processing includes:
- complete and partial redemptions
- check redemption processing (if applicable)
Distribution options:
- federal wires*
- mailing checks
- ACH*
Certificate issuance and cancellation.
Replacement of certificates through surety bonds.*
<PAGE>
Process dividends and capital gains distributions.
Producing daily and monthly reports of shareholder activity.
Daily Reports
Report Number Report Description
(no report number) Daily Activity Register
024 Tax Reporting Proof
051 Cash Receipts and Disbursement Proof
053 Daily Share Proof
091 Daily Gain/Loss Report
104 Maintenance Register
044 Transfer/Certificate Register
056 Blue Sky Warning Report
501 New Account Report
038 Money Market Payment & Adjustment Detail
039 Money Market Distribution Proof Report
Monthly Reports
Report Description
Blue Sky
Certificate Listing
State Sales and Redemption
Monthly Statistical
Account Demographic Analysis
MTD Sales - Demographics by Account Group
Account Analysis by Type
Preparation of federal tax information forms to include 1099-DIV's,
1099-B's, 1042's, etc. to shareholders with tape to IRS.
Microfilming and indexing in PC system of all application, correspondence
and other pertinent shareholder documents to provide automated location of
these records.
Microfilming all checks presented for investment and check redemptions.
Processing reinvestment of dividends of one fund into another fund.
Addressing, mailing and tabulation of annual proxy cards (one per year).
Ad Hoc reports as requested by fund management.*
System access by PC dial-up or by dedicated line for IAA initiated calls
only (if applicable).*
<PAGE>
Retirement Plan processing (IRA, SEP, Omnibus Qualified Plans)
- Systematic tracking of current, prior yeand rollover contributions
- 5498 tax reporting
- 1099R reporting on distributions
- Processing transfer of assets between custodians
- PC based recalculation of required minimu distributions for IRA
SWP's for shareholders over 591/2 years of age.
Preparation of one annual list of shareholders.
Prepare shareholder lists, labels, etc.*
Processing sweep purchases and redemptions for brokerage, bank or other
accounts via tape or transmission.*
* Separate fees will apply for these services
<PAGE>
Schedule "B"
Shareholder Services and Transfer Agent Fee Schedule
for
IAA Trust Tax Exempt Bond Fund, Inc.
This Fee Schedule is fixed for a period of three (3) years from the
Effective Date as that term is defined in the Agreement.
I. A) Base Fee
$15.60 per account per year (1/12 payable monthly)
Minimum monthly fee - $500
B) IRA's, 403(b) Plans, Defined Contribution/Benefit Plans:
$12.00 per Account Annual Maintenance Fee
II. Out-of-Pocket Expenses:
The Tax Exempt Bond Fund will reimburse Fund/Plan Services monthly for all
reasonable out-of-pocket expenses, including postage, stationery
(statements), telecommunications (telephone, fax, dedicated 800 line,
on-line access), special reports, transmissions, records retention, tapes,
couriers and any pre-approved travel expenses.
III. Additional Services
Activities of a non-recurring nature including but not limited to fund
consolidations, mergers, acquisitions, reorganizations, the addition or
deletion of a series, and shareholder meetings/proxies are not included
herein, and will be quoted separately. To the extent the Tax Exempt Bond
Fund should decide to issue multiple/separate classes of shares, additional
fees will apply. Any enhanced services, programming requests or reports
will be quoted upon request.
ADMINISTRATION AGREEMENT
This Agreement, dated as of the 1st day of August, 1995, made by and
between IAA Trust Tax Exempt Bond Fund, Inc. ("the Tax Exempt Bond Fund"), a
corporation duly organized and existing under the laws of the state of Maryland,
operating as a registered investment company under the Investment Company Act of
1940, as amended (the "Act"), and Fund/Plan Services, Inc. ("Fund/Plan"), a
corporation duly organized and existing under the laws of the State of Delaware
(collectively, the "Parties").
WITNESSETH THAT:
WHEREAS, the Parties desire to enter into an agreement whereby Fund/Plan
will provide certain administration services to the Tax Exempt Bond Fund on the
terms and conditions set forth in this Agreement; and
WHEREAS, Fund/Plan is willing to serve in such capacity and perform such
administrative services under the terms and conditions set forth below; and
WHEREAS, the Tax Exempt Bond Fund will provide all necessary information to
Fund/Plan concerning the Fund so that Fund/Plan may appropriately execute its
responsibilities hereunder;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, and in exchange of good and valuable consideration, the
sufficiency and receipt of which is hereby acknowledged, the Parties hereto,
intending to be legally bound, do hereby agree as follows:
Section 1. Appointment The Tax Exempt Bond Fund hereby appoints Fund/Plan
as administrator and Fund/Plan hereby accepts such appointment.
Section 2. Duties and Obligations of Fund/Plan
(a) Subject to the succeeding provisions of this section and subject
to the direction and control of the Board of Directors of the Tax Exempt Bond
Fund, Fund/Plan shall provide to the Fund all administrative services as set
forth in Schedule "A" attached hereto and incorporated by reference in its
entirety into this Agreement. In addition to the obligations set forth in
Schedule "A", Fund/Plan shall (i) provide its own office space, facilities,
equipment and personnel for the performance of its duties under this Agreement;
and (ii) take all actions it deems necessary to properly execute the
administrative responsibilities of the Tax Exempt Bond Fund.
<PAGE>
(b) So that Fund/Plan may perform its duties under the terms of this
Agreement, the Board of Directors of the Tax Exempt Bond Fund shall direct the
officers, investment advisor, distributor, legal counsel, independent
accountants and custodian of the Tax Exempt Bond Fund to cooperate fully with
Fund/Plan and to provide such information, documents and advice relating to the
Tax Exempt Bond Fund as is within the possession or knowledge of such persons
provided that no such person need provide any information to Fund/Plan if to do
so would result in the loss of any privilege or confidential treatment with
respect to such information. In connection with its duties, Fund/Plan shall be
entitled to rely, and shall be held harmless by the Tax Exempt Bond Fund when
acting in reasonable reliance upon the instruction, advice or any documents as
provided by the Tax Exempt Bond Fund to Fund/Plan by any of the aforementioned
persons. All fees charged by any such persons shall be deemed an expense of the
Tax Exempt Bond Fund.
(c) Any activities performed by Fund/Plan under this Agreement shall
conform to the requirements of:
(1) the provisions of the Investment Company Act of 1940, as amended
(the "Act") and the Securities Act of 1933, as amended, and of any rules or
regulations in force thereunder;
(2) any other applicable provision of state and federal law;
(3) the provisions of the Articles of Incorporation and By-Laws of
the Tax Exempt Bond Fund as amended from time to time;
(4) any policies and determinations of the Board of Directors of the
Tax Exempt Bond Fund; and
(5) the fundamental policies of the Tax Exempt Bond Fund as reflected
in the registration statement under the Act.
Fund/Plan acknowledges that all records that it maintains for the Tax
Exempt Bond Fund are the property of the Tax Exempt Bond Fund and will be
surrendered promptly to the Tax Exempt Bond Fund upon written request. Fund/Plan
will preserve, for the periods prescribed under Rule 31a-2 under the Act, all
such records required to be maintained under Rule 31a-1 of the Act.
(d) Nothing in this Agreement shall prevent Fund/Plan or any officer
thereof from acting as administrator for or with any other person, firm or
corporation. While the administrative services supplied to the Tax Exempt Bond
Fund may be different than those
<PAGE>
supplied to other persons, firms or corporations, Fund/Plan shall provide the
Tax Exempt Bond Fund equitable treatment in supplying services. The Tax Exempt
Bond Fund recognizes that it will not receive preferential treatment from
Fund/Plan as compared with the treatment provided to other Fund/Plan clients.
Fund/Plan agrees to maintain the records and all other information of the Tax
Exempt Bond Fund in a confidential manner and shall not use such information for
any purpose other than the performance of Fund/Plan's duties under this
Agreement.
Section 3. Allocation of Expenses All costs and expenses of the Tax Exempt
Bond Fund shall be paid by the Tax Exempt Bond Fund including, but not limited
to:
(a) fees paid to an investment adviser (the "Adviser");
(b) interest and taxes;
(c) brokerage fees and commissions;
(d) insurance premiums;
(e) compensation and expenses of its Directors who are not affiliated
persons of the Adviser;
(f) legal, accounting and audit expenses;
(g) custodian and transfer agent, or shareholder servicing agent,
fees and expenses;
(h) fees and expenses incident to the registration of the shares of
the Tax Exempt Bond Fund under Federal or state securities laws;
(i) expenses related to preparing, setting in type, printing and
mailing prospectuses, statements of additional information,
reports and notices and proxy material to shareholders of the Tax
Exempt Bond Fund;
(j) all expenses incidental to holding meetings of shareholders and
Directors of the Tax Exempt Bond Fund;
(k) such extraordinary expenses as may arise, including litigation,
affecting the Tax Exempt Bond Fund and the legal obligations
which the Tax Exempt Bond Fund may have regarding indemnification
of its officers and directors; and
(l) fees and out-of-pocket expenses paid on behalf of the Tax Exempt
Bond Fund by Fund/Plan.
Section 4. Compensation of Fund/Plan The Tax Exempt Bond Fund agrees to pay
Fund/Plan compensation for its services and to reimburse it for expenses
incurred and paid by Fund/Plan on behalf of the Tax Exempt Bond Fund, at the
rates and amounts as set forth in Schedule "B" attached hereto, and as shall be
set forth in any amendments to such Schedule "B" approved by the Tax Exempt Bond
Fund and Fund/Plan. The Tax Exempt Bond Fund agrees and understands that
Fund/Plan's compensation be comprised of two components, payable on a monthly
basis, as follows:
(i) A combined asset-based fee subject to a minimum amount will be billed
<PAGE>
monthly to the Tax Exempt Bond Fund. These fees are to be paid by the Tax Exempt
Bond Fund within ten calendar days after receipt of an invoice from Fund/Plan.
(ii) reimbursement of any out-of-pocket expenses paid by Fund/Plan on
behalf of the Tax Exempt Bond Fund, which out-of-pocket expenses will be billed
to the Tax Exempt Bond Fund within the first ten calendar days of the month
following the month in which such out-of-pocket expenses were incurred. The Tax
Exempt Bond Fund agrees to reimburse Fund/Plan for such expenses within ten
calendar days of receipt of such bill.
For the purpose of determining fees payable to Fund/Plan, the value of the
Tax Exempt Bond Fund's net assets shall be computed at the times and in the
manner specified in the Tax Exempt Bond Fund's Prospectus and Statement of
Additional Information then in effect.
During the term of this Agreement, should the Tax Exempt Bond Fund seek
services or functions in addition to those outlined above or in Schedule "A"
attached, a written amendment to this Agreement specifying the additional
services and corresponding compensation shall be executed by both Fund/Plan and
the Tax Exempt Bond Fund.
Section 5. Duration
(a) The term of this Agreement shall be for a period of three (3) years,
commencing on the date hereinabove first written ("Effective Date") and shall
continue thereafter on a year to year term subject to termination by either
Party set forth in (c) below.
(b) The fee schedule set forth in Schedule "B" attached shall be fixed for
three (3) years commencing on the Effective Date of this Agreement.
(c) After the initial term of this Agreement, the Tax Exempt Bond Fund or
Fund/Plan may give written notice to the other of the termination of this
Agreement, such termination to take effect at the time specified in the notice,
which date shall not be less than one hundred twenty (120) days after the date
of receipt of such notice. Upon the effective termination date, the Tax Exempt
Bond Fund shall pay to Fund/Plan such compensation as may be due as of the date
of termination and shall likewise reimburse Fund/Plan for any out-of-pocket
expenses and disbursements reasonably incurred by Fund/Plan to such date.
(d) If a successor to any of Fund/Plan's duties or responsibilities under
this Agreement is designated by the Tax Exempt Bond Fund by written notice to
Fund/Plan in connection with the termination of this Agreement, Fund/Plan shall
promptly upon such termination and at the expense of the Tax Exempt Bond Fund,
transfer all required records
<PAGE>
and shall cooperate in the transfer of such duties and responsibilities.
Section 6. Amendment No provision of this Agreement may be amended or
modified, in any manner except by a written agreement properly authorized and
executed by Fund/Plan and the Tax Exempt Bond Fund.
Section 7. Applicable Law This Agreement shall be governed by the laws of
the Commonwealth of Pennsylvania and the venue of any action arising under this
Agreement shall be Montgomery County, Commonwealth of Pennsylvania.
Section 8. Limitation of Liability
(a) The execution and delivery of this Agreement has been duly authorized
by the Board of Directors of the Tax Exempt Bond Fund and executed on behalf of
the Tax Exempt Bond Fund by the undersigned officer, in that officer's capacity
as an officer of the Tax Exempt Bond Fund. The obligations under this Agreement
shall be binding upon the assets and property of the Tax Exempt Bond Fund and
shall not be binding upon any director, officer or shareholder of the Fund
individually.
(b) Fund/Plan, its directors, officers, employees, shareholders and agents
shall only be liable for any error of judgment or mistake of law or for any loss
suffered by the Tax Exempt Bond Fund in connection with the performance of this
Agreement that result from willful misfeasance, bad faith or negligence on the
part of Fund/Plan in the performance of its obligations and duties under this
Agreement.
(c) Any person, even though a director, officer, employee, shareholder or
agent of Fund/Plan, who may be or become an officer, director, employee or agent
of the Tax Exempt Bond Fund, shall be deemed when rendering services to such
entity or acting on any business of such entity (other than services or business
in connection with Fund/Plan's duties under the Agreement), to be rendering such
services to or acting solely for the Tax Exempt Bond Fund and not as a director,
officer, employee, shareholder or agent of, or under the control or direction of
Fund/Plan even though such person may receive compensation from Fund/Plan.
(d) Notwithstanding any other provision of this Agreement, the Tax Exempt
Bond Fund shall indemnify and hold harmless Fund/Plan, its directors, officers,
employees, shareholders and agents from and against any and all claims, demands,
expenses and liabilities (whether with or without basis in fact or law) of any
and every nature which Fund/Plan may sustain or incur or which may be asserted
against Fund/Plan by any person by reason of, or as a result of (i) any action
taken or omitted to be taken by Fund/Plan in good
<PAGE>
faith, (ii) any action taken or omitted to be taken by Fund/Plan in good faith
in reliance upon any certificate, instrument, order or stock certificate or
other document reasonably believed by Fund/Plan to be genuine and to be signed,
countersigned or executed by any duly authorized person, upon the oral
instructions or written instruction of an authorized person of the Tax Exempt
Bond Fund or upon the opinion of legal counsel for the Tax Exempt Bond Fund; or
(iii) any action taken in good faith or omitted to be taken by Fund/Plan in
connection with its appointment in reliance upon any law, act, regulation or
interpretation of the same even though the same may thereafter have been
altered, changed, amended or repealed. Indemnification under this subparagraph
shall not apply, however, to actions or omissions of Fund/Plan or its directors,
officers, employees, shareholders or agents in cases of its or their willful
misfeasance, bad faith, negligence or reckless disregard of its or their duties
hereunder.
(e) Fund/Plan shall give written notice to the Tax Exempt Bond Fund within
ten (10) business days of receipt by Fund/Plan of a written assertion or claim
of any threatened or pending legal proceeding which may be subject to this
indemnification. The failure to notify the Tax Exempt Bond Fund of such written
assertion or claim shall not, however, operate in any manner whatsoever to
relieve the Tax Exempt Bond Fund of any liability arising under this Section or
otherwise, unless such failure prejudices the Tax Exempt Bond Fund.
(f) For any legal proceeding giving rise to this indemnification, the Tax
Exempt Bond Fund shall be entitled to defend or prosecute any claim in the name
of Fund/Plan at its own expense and through counsel of its own choosing if it
gives written notice to Fund/Plan within ten (10) business days of receiving
notice of such claim. Notwithstanding the foregoing, Fund/Plan may participate
in the litigation at its own expense through counsel of its own choosing. If the
Tax Exempt Bond Fund does choose to defend or prosecute such claim, then the
parties shall cooperate in the defense or prosecution thereof and shall furnish
such records and other information as are reasonably necessary.
(g) The terms of this Section 8 shall survive the termination of this
Agreement.
Section 9. Notices Except as otherwise provided in this Agreement, any
notice or other communication required by or permitted to be given in connection
with this Agreement shall be in writing, and shall be delivered in person or
sent by first class mail, postage prepaid to the respective parties as follows:
<PAGE>
If to IAA Trust Tax Exempt Bond Fund, Inc.: If to Fund/Plan:
IAA Trust Tax Exempt Bond Fund, Inc. Fund/Plan Services, Inc.
808 IAA Drive 2 West Elm Street
Bloomington, IL 61702 Conshohocken, PA 19428
Attention: Richard M. Miller Attention: Kenneth J. Kempf,
Vice President President
Section 10. Severability If any part, term or provision of this
Agreement is held by any court to be illegal, in conflict with any law or
otherwise invalid, the remaining portion or portions shall be considered
severable and not 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.
Section 11. Section Headings Section and Paragraph headings are for
convenience only and shall not be construed as part of this Agreement.
Section 12. This Agreement may be executed in two or more counterparts,
each of which when so executed shall be deemed to be an original, but such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
consisting of seven typewritten pages, together with Schedules "A" and "B" to be
signed by their duly authorized officers as of the day and year first above
written.
IAA Trust Tax Exempt Bond Fund, Inc. Fund/Plan Services, Inc.
- ------------------------------------ ------------------------------------
By: Gary E. Mede, Vice President By: Kenneth J. Kempf, President
<PAGE>
Schedule "A"
Fund Administration Services
for
IAA Trust Tax Exempt Bond Fund, Inc.
I. Regulatory Compliance
A. Compliance - Federal Investment Company Act of 1940
1. Review, report and renew
a. Investment advisory contracts
b. Fidelity bond (if requested)
c. Underwriting contracts
d. Distribution (12b-1) plans
e. Administration contracts
f. Accounting contracts
g. Custody contracts
h. Transfer agent and shareholder services contract
2. Filings
a. N-SAR (semi-annual report)
b. N-1A (prospectus), post effective amendments and supplements
("stickers")
c. 24f-2 indefinite registration of shares
d. Filing shareholder reports under 30b2-1
e. Notify frequency capital gains under 19b-1
f. Coordination of EDGAR filings
3. Annual up-dates of biographical information and questionnaires
for Directors and Officers (if requested)
4. Monitor money market funds under Rule 2A-7
B. Compliance - State "Blue Sky"
Blue Sky (state registration)
a. Registration shares (initial/renewal)
b. Monitor sale shares over/under
c. Report shares sold
d. Filing of federal prospectus and contracts
e. Filing annual and semi-annual reports with states
C. Compliance - Prospectus
1. Analyze and review portfolio reports from advisor regarding:
a. compliance with investment objectives
b. maximum investment by company/industry size
D. Compliance - Other
1. Applicable state tax laws
<PAGE>
II. Corporate Business and Shareholder/Public Information
A. Directors/Management
1. Preparation of meetings
a. Agendas - all necessary items of compliance
b. Preparation of Board packages
c. Assist with arranging and conducting meetings
d. Prepare minutes (if requested)
e. Keep attendance records (if requested)
f. Maintain certain board records as requested
2. Preparation and distribution of periodic operation reports to
management
B. Coordinate Proposals for Service Agents
1. Suppliers
2. Printers
3. Fulfillment of literature requests
4. Underwriters
C. Maintain Corporate Calendars
1. General
2. Blue sky
D. Shareholder Meeting - maximum one per year
1. Preparation of Proxy
2. Conduct Meeting
3. Record ballot results
E. Maintain certain Corporate Files as requested
F. Release Corporate Information
1. To shareholders
2. To financial and general press
3. To industry publications
a. distributions (dividends and capital gains)
b. tax information
c. changes to prospectus
d. letters from management
e. funds' performance
4. Respond to:
a. financial press
b. miscellaneous shareholder inquiries
c. industry questionnaires
5. Prepare, maintain and update monthly information manual
<PAGE>
F. Communications to Shareholders
1. Coordinate printing and distribution of annual and semi-annual
reports and prospectus
III. Financial and Management Reporting
A. Income and Expenses
1. Expense figures calculated and accrual levels set
2. Monitoring of expenses, accruals monthly
3. Approve and coordinate payment of expenses
4. Projection of income and expenses (with regards to B(2)) -
ex-date will determine if projection will apply
5. Calculation of advisory fee, 12b-1 fee
6. Calculation of average net assets
B. Distributions to Shareholders
1. Calculations of dividends and capital gain distributions (in
conjunction with the Fund and their auditors)
a. compliance with income tax provisions
b. compliance with excise tax provisions
c. compliance with Investment Company Act of 1940
C. Financial Reporting
1. Liaison between Fund management, independent auditors and
printers for shareholder reports
2. Preparation of semi-annual and annual reports to shareholders
3. 60-day delivery to SEC and shareholders
4. Preparation of semi-annual and annual NSAR's (financial data)
D. Subchapter M Compliance (monthly)
1. Asset diversification test
2. Short/short test
3. Income Qualification Test
E. Other Financial Analyses
1. Upon request from fund management, other budgeting and analyses
can be constructed to meet a fund's specific needs (additional
fees may apply)
2. Sales information, portfolio turnover (monthly)
3. Work closely with independent auditors on return of capital
presentation,excise tax calculation
4. Performance (total return) calculation (monthly)
5. Analysis of interest derived from various Government obligations
(annual) (if interest income was distributed in a calendar year)
for reporting to Shareholders
<PAGE>
F. Review and Monitoring Functions (monthly)
1. Review expense and reclassification entries to ensure proper
update
2. Perform various reviews to ensure accuracy of subscription/
liquidation schedules, accounting (the monthly expense analysis)
3. Review all accruals and expenditures where applicable
G. Preparation and distribution of monthly operational reports to
management by 10th Business Day
1. Management Statistics (Recap)
- portfolio
- book gains/losses/per share
- net income, book income per share
- capital stock activity
- distributions
2. Performance Analysis
- total return
- monthly, year to date, average annual (1, 5, 10 yrs), 5 yr
cumulative, since inception cumulative
3. Expense Analysis
- schedule
- expenses paid
- accrual monitoring
- advisory fee
4. Short-Short Analysis
- short-short income
- gross income (components)
5. Portfolio Turnover
- cost of purchases
- net proceeds of sales
- average market value
6. Asset Diversification Test
- gross assets
- non-qualifying assets
7. Activity Summary
- shares sold, redeemed and reinvested
- change in investment
8. Summary of Dividends paid for each Fund.
H. Provide rating agencies statistical data as requested (monthly/
quarterly)
I. Standard schedules for Board Package (quarterly)
1. Activity Summary (III-G-7 from above)
2. Other schedules can be provided (additional fees may apply)
3. Statistical Report
<PAGE>
Schedule "B"
Administration Services Fee Schedule
for
IAA Trust Tax Exempt Bond Fund, Inc.
This Fee Schedule is fixed for a period of three (3) years from the Effective
Date as that term is defined in the Agreement.
I. Administration Expense
.0015 On the First $ 50 Million of Average Net Assets
.0010 On the Next $ 50 Million of Average Net Assets
.0005 Over $100 Million of Average Net Assets
The above fee schedule is applicable to total net assets of all four
portfolios within the IAA Trust family of Funds. A minimum annual fee of
$50,000 will be charged to the Growth Fund and a minimum annual fee of
$80,000 applies in total to the group of four IAA Trust Funds. New
portfolios added shall bear an annual minimum fee of $10,000.
II. Out-of-Pocket Expenses
The Fund(s) will reimburse Fund/Plan Services monthly for all reasonable
out-of-pocket expenses, including telephone, postage, telecommunications,
special reports, all currently required tax return preparation ($3500 per
year, total all Funds), record retention, script fees, stamp duty, special
transportation costs as incurred, and copying and sending materials to
auditors.
III. Additional Services
Activities of a non-recurring nature including but not limited to fund
consolidations, mergers, acquisitions, reorganizations, the addition or
deletion of a fund, and shareholder meetings/proxies, are not included
herein, and will be quoted separately. To the extent the Tax Exempt Bond
Fund should decide to issue multiple/separate classes of shares, additional
fees will apply. Any additional/enhanced services or reports will be quoted
upon request.
ACCOUNTING SERVICES AGREEMENT
This Agreement, dated as of the 1st day of August, 1995 made by and between
IAA Trust Tax Exempt Bond Fund, Inc. (the "Tax Exempt Bond Fund"), a corporation
duly organized and existing under the laws of the State of Maryland and
operating as an open-end management investment company registered under the
Investment Company Act of 1940, as amended, and Fund/Plan Services, Inc.
("Fund/Plan"), a corporation duly organized and existing under the laws of the
State of Delaware (collectively, the "Parties").
WITNESSETH THAT:
WHEREAS, the Tax Exempt Bond Fund desires to appoint Fund/Plan as
Accounting Services Agent to maintain and keep current the books, accounts,
records, journals or other records of original entry relating to the business of
the Tax Exempt Bond Fund (the "Accounts and Records") and to perform certain
other functions in connection with such Accounts and Records; and
WHEREAS, Fund/Plan is willing to serve in such capacity and perform such
functions upon the terms and conditions set forth below; and
WHEREAS, the Tax Exempt Bond Fund will provide all necessary information
concerning the Fund to Fund/Plan so that Fund/Plan may appropriately execute its
responsibilities hereunder;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, and in exchange of good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Parties hereto,
intending to be legally bound, do hereby agree as follows:
Section 1. For purposes of this Agreement:
Oral Instructions shall mean an authorization, instruction, approval, item
or set of data, or information of any kind transmitted to Fund/Plan in person or
by telephone, telegram, telecopy, or other mechanical or documentary means
lacking an original signature, by a person or persons reasonably identified to
Fund/Plan to be a person or persons authorized by a resolution of the Board of
Directors of the Tax Exempt Bond Fund, to give such Oral Instructions on behalf
of the Tax Exempt Bond Fund.
Written Instructions shall mean an authorization, instruction, approval,
item or set of data or information of any kind transmitted to Fund/Plan in
original writing containing an original signature or a copy of such document
transmitted by telecopy including transmission
<PAGE>
of such signature reasonably identified to Fund/Plan to be the signature of a
person authorized by a resolution of the Board of Directors of the Tax Exempt
Bond Fund to give written instructions on behalf of the Tax Exempt Bond Fund.
The Tax Exempt Bond Fund shall file with Fund/Plan a certified copy of each
resolution of its Board of Directors authorizing execution of Written
Instructions or the transmittal of Oral Instructions as provided above.
Section 2. To the extent Fund/Plan receives the necessary information from
the Tax Exempt Bond Fund or its agents by Written or Oral Instructions,
Fund/Plan shall maintain and keep current the following Accounts and Records
relating to the business of the Tax Exempt Bond Fund in such form as may be
mutually agreed upon between the Tax Exempt Bond Fund and Fund/Plan:
(a) Cash Receipts Journal
(b) Cash Disbursements Journal
(c) Dividends Paid and Payable Schedule
(d) Purchase and Sales Journals - Portfolio Securities
(e) Subscription and Redemption Journals
(f) Security Ledgers - Transaction Report and Tax Lot Holdings Report
(g) Broker Ledger - Commission Report
(h) Daily Expense Accruals
(i) Daily Interest Accruals
(j) Daily Trial Balance
(k) Portfolio Interest Receivable and Income Journal
(l) Portfolio Dividend Receivable and Income Register
(m) Listing of Portfolio Holdings - showing cost, market value and
percentage of portfolio comprised of each security.
(n) Average Daily Net assets provided on monthly basis.
The necessary information to perform the above functions and the
calculation of the net asset value of the Tax Exempt Bond Fund as provided
below, is to be furnished by Written or Oral Instructions to Fund/Plan daily (in
accordance with the time frame identified below) prior to the close of regular
trading on the New York Stock Exchange.
Section 3. Fund/Plan shall perform the ministerial calculations necessary
to calculate the Tax Exempt Bond Fund's net asset value each day that the New
York Stock Exchange is open for business, in accordance with (i) the Fund's
current prospectus and statement of additional information then in effect and
(ii) procedures with respect thereto approved by the Board of Directors of the
Tax Exempt Bond Fund and supplied in writing to Fund/Plan. Portfolio items for
which market quotations are available by Fund/Plan's use of an automated
financial information service (the "Service") shall be based on the closing
prices of such
<PAGE>
Service except where the Tax Exempt Bond Fund has given or caused to be given
specific Written or Oral Instructions to utilize a different value subject to
the appropriate provisions in the Tax Exempt Bond Fund's prospectus and
statement of additional information then in effect. All of the portfolio
securities shall be given such values as the Tax Exempt Bond Fund provides by
Written or Oral Instructions including all restricted securities and other
securities requiring valuation not readily ascertainable solely by such Service
subject to the appropriate provisions in the Tax Exempt Bond Fund's prospectus
and statement of additional information then in effect. Fund/Plan shall have no
responsibility or liability for the accuracy of prices quoted by such Service;
for the accuracy of the information supplied by the Tax Exempt Bond Fund; or for
any loss, liability, damage, or cost arising out of any inaccuracy of such data.
Fund/Plan shall have no responsibility or duty to include information or
valuations to be provided by the Tax Exempt Bond Fund in any computation unless
and until it is timely supplied to Fund/Plan in usable form. Fund/Plan shall
record corporate action information as received from the custodian of the Tax
Exempt Bond Fund's assets (the "Custodian"), the Service, or the Tax Exempt Bond
Fund. Fund/Plan shall have no duty to gather or record corporate action
information not supplied by these sources.
Fund/Plan will assume no liability for price changes caused by: the
investment advisor(s), custodian of the assets of the Tax Exempt Bond Fund (the
"Custodian") and suppliers of security prices, corporate action and dividend
information, or any party other than Fund/Plan itself.
In the event an error is made by Fund/Plan which creates a price change of
an amount greater than or equal to one half of one percent of the correct net
asset value ("NAV"), consideration must be given to the effect of the price
change as described below. Notwithstanding the provisions of Section 11, the
following provisions govern Fund/Plan's liability for errors in calculating the
NAV of the Tax Exempt Bond Fund:
If the NAV should have been higher for a date or dates in the past,
the error would have the effect of having given more shares to subscribers
and less money to redeemers to which they were entitled. Conversely, if the
NAV should have been lower, the error would have the effect of having given
less shares to subscribers and overpaying redeemers.
If the error affects the prior business day's NAV only, and if
Fund/Plan can rerun the prior day's work before shareholder statements and
checks are
<PAGE>
mailed, the Tax Exempt Bond Fund hereby accepts this manner of correcting
the error.
If the error spans five (5) business days or less, Fund/Plan shall
reprocess shareholder purchases and redemptions where redeeming
shareholders have been underpaid. Fund/Plan shall assume liability to the
Tax Exempt Bond Fund for overpayments to shareholders who have fully
redeemed.
If the error spans more than five (5) business days, Fund/Plan would
bear the liability to the Tax Exempt Bond Fund for, 1) buying in for excess
shares given to shareholders if the NAV should have been higher, or, 2)
funding overpayments to shareholders who have redeemed if the NAV should
have been lower. The cost of any reprocessing required for shareholders who
have been credited with fewer shares than appropriate, or for redeeming
shareholders who are due additional amounts of money will also be borne by
Fund/Plan.
Section 4. For all purposes under this Agreement, Fund/Plan is authorized
to act upon receipt of the first of any Written or Oral Instruction it receives
from the Tax Exempt Bond Fund or its agents on behalf of the Tax Exempt Bond
Fund. In cases where the first instruction is an Oral Instruction that is not in
the form of a document or written record, a confirmatory Written Instruction or
Oral Instruction in the form of a document or written record shall be delivered,
and in cases where Fund/Plan receives an Instruction, whether Written or Oral,
to enter a portfolio transaction on the records, the Tax Exempt Bond Fund shall
cause the broker/dealer to send a written confirmation to the Custodian.
Fund/Plan shall be entitled to rely on the first Instruction received, and for
any act or omission undertaken in compliance therewith shall be free of
liability and fully indemnified and held harmless by the Tax Exempt Bond Fund,
provided however, that in the event a Written or Oral Instruction received by
Fund/Plan is countermanded by a timely received subsequent Written or Oral
Instruction prior to acting upon such countermanded Instruction, Fund/Plan shall
act upon such subsequent Written or Oral Instruction. The sole obligation of
Fund/Plan with respect to any follow-up or confirmatory Written Instruction,
Oral Instruction in documentary or written form, shall be to make reasonable
efforts to detect any such discrepancy between the original Instruction and such
confirmation and to report such discrepancy to the Tax Exempt Bond Fund. The Tax
Exempt Bond Fund shall be responsible, at the Tax Exempt Bond Fund's
<PAGE>
expense, for taking any action, including any reprocessing, necessary to correct
any discrepancy or error. To the extent such action requires Fund/Plan to act,
the Tax Exempt Bond Fund shall give Fund/Plan specific Written Instruction as to
the action required.
Section 5. The Tax Exempt Bond Fund shall cause its Custodian to forward to
Fund/Plan a daily statement of cash and portfolio transactions. At the end of
each month, the Tax Exempt Bond Fund shall cause the Custodian to forward to
Fund/Plan a monthly statement of portfolio positions, which will be reconciled
with the Tax Exempt Bond Fund's Accounts and Records maintained by Fund/Plan on
its behalf. Fund/Plan will report any discrepancies to the Custodian, and report
any unreconciled items to the Tax Exempt Bond Fund.
Section 6. Fund/Plan shall promptly supply daily and periodic reports to
the Tax Exempt Bond Fund as requested by the Tax Exempt Bond Fund and agreed
upon by Fund/Plan.
Section 7. The Tax Exempt Bond Fund shall provide and shall require each of
its agents (including the Custodian) to provide Fund/Plan as of the close of
each business day, or on such other schedule as the Tax Exempt Bond Fund
determines is necessary, with Written or Oral Instructions (to be delivered to
Fund/Plan by 11:00 a.m., Eastern time, the next following business day)
containing all data and information necessary for Fund/Plan to maintain the Tax
Exempt Bond Fund's Accounts and Records and Fund/Plan may conclusively assume
that the information it receives by Written or Oral Instructions is complete and
accurate. Fund/Plan, as Transfer Agent, accepts responsibility for providing
reports to the Fund/Plan Accounting Unit of share purchases, redemptions, and
total shares outstanding, on the next business day after each net asset
valuation.
Section 8. The Accounts and Records, in the agreed-upon format, maintained
by Fund/Plan shall be the property of the Tax Exempt Bond Fund and shall be made
available to the Tax Exempt Bond Fund promptly upon request and shall be
maintained for the periods prescribed in Rules 31a-1 and 31a-2 under the
Investment Company Act of 1940, as amended. Fund/Plan shall assist the Fund's
independent auditors, or upon approval of the Fund, or upon demand, any
regulatory body, in any requested review of the Fund's Accounts and Records but
shall be reimbursed for all reasonable expenses (expenses generally such as
shipping, photocopying, faxing, special reports, etc.) and reasonable employee
time for complying with extra services, (currently a rate of $50.00 per hour)
invested in any such
<PAGE>
review of the Fund's Accounts and Records outside of routine and normal periodic
review and audits. Upon receipt from the Tax Exempt Bond Fund of the necessary
information, Fund/Plan shall supply the necessary data for the Tax Exempt Bond
Fund or an independent auditor's completion of any necessary tax returns,
questionnaires, periodic reports to Shareholders and such other reports and
information requests as the Tax Exempt Bond Fund and Fund/Plan shall agree upon
from time to time.
Section 9. In case of any request or demand for the inspection of the
records of the Tax Exempt Bond Fund, Fund/Plan shall endeavor to notify the Tax
Exempt Bond Fund and to secure instructions as to permitting or refusing such
inspection. Fund/Plan may however, exhibit such records to any person in any
case where it is advised by its counsel that it may be held liable for failure
to do so after notice to the Tax Exempt Bond Fund.
Section 10. Fund/Plan and the Tax Exempt Bond Fund may from time to time
adopt such procedures as agreed upon in writing, and Fund/Plan may conclusively
assume that any procedure approved by the Tax Exempt Bond Fund or directed by
the Tax Exempt Bond Fund, does not conflict with or violate any requirements of
the Tax Exempt Bond Fund's Prospectus, Articles of Incorporation, By-Laws, or
any rule or regulation of any regulatory body or governmental agency. The Tax
Exempt Bond Fund shall be responsible for notifying Fund/Plan of any changes in
regulations or rules which might necessitate changes in Fund/Plan's procedures,
and for working out with Fund/Plan such changes.
Section 11.
(a) Fund/Plan, its directors, officers, employees, shareholders, and
agents shall not be liable for any error of judgment or mistake of law or for
any loss suffered by the Tax Exempt Bond Fund in connection with the performance
of this Agreement, except losses resulting from willful misfeasance, bad faith
or negligence on the part of Fund/Plan in the performance of its obligations and
duties under this Agreement.
(b) Any person, even though also a director, officer, employee,
shareholder or agent of Fund/Plan, who may be or become an officer, trustee,
employee or agent of the Tax Exempt Bond Fund shall be deemed, when rendering
services to the Tax Exempt Bond Fund or acting on any business of the Tax Exempt
Bond Fund (other than services or business in connection with Fund/Plan's duties
hereunder), to be rendering such services to or acting solely for the Tax Exempt
Bond Fund, and not as a director, officer, employee, shareholder or agent of, or
one under the control or direction of Fund/Plan even though receiving a salary
<PAGE>
from Fund/Plan.
(c) Notwithstanding any other provision of this Agreement, the Tax
Exempt Bond Fund shall indemnify and hold harmless Fund/Plan, its directors,
officers, employees, shareholders and agents from and against any and all
claims, demands, expenses and liabilities (whether with or without basis in fact
or law) of any and every nature which Fund/Plan may sustain or incur or which
may be asserted against Fund/Plan by any person by reason of, or as a result of:
(i) any action taken or omitted to be taken by Fund/Plan except
matters resulting from willful misfeasance, bad faith, negligence or reckless
disregard on the part of Fund/Plan in the performance of its obligations and
duties under this Agreement; or
(ii) in reliance upon any certificate, instrument, order or stock
certificate or other document reasonably believed by it to be genuine and to be
signed, countersigned or executed by any duly authorized person, upon the Oral
Instructions or Written Instructions of an authorized person of the Tax Exempt
Bond Fund or upon the written opinion of legal counsel for the Tax Exempt Bond
Fund or Fund/Plan; or
(iii) any action taken or omitted to be taken in good faith by
Fund/Plan in connection with its appointment, in reliance upon any law, act,
regulation or interpretation of the same even though the same may thereafter
have been altered, changed, amended, or repealed. Indemnification under this
subparagraph shall not apply, however, to actions or omissions of Fund/Plan or
its directors, officers, employees, shareholders, or agents in cases of its or
their own negligence, willful misconduct, bad faith, or reckless disregard of
its or their own duties hereunder.
(d) Fund/Plan shall give written notice to the Tax Exempt Bond Fund
within ten (10) business days of receipt by Fund/Plan of a written assertion or
claim of any threatened or pending legal proceeding which may be subject to this
indemnification. The failure to so notify the Tax Exempt Bond Fund of such
written assertion or claim shall not, however, operate in any manner whatsoever
to relieve the Tax Exempt Bond Fund of any liability arising from this Section
or otherwise, except to the extent failure to give notice prejudices the Tax
Exempt Bond Fund.
(e) For any legal proceeding giving rise to this indemnification, the
Tax Exempt Bond Fund shall be entitled to defend or prosecute any claim in the
name of Fund/Plan at its own expense and through counsel of its own choosing if
it gives written
<PAGE>
notice to Fund/Plan within ten (10) business days of receiving notice of such
claim. Notwithstanding the foregoing, Fund/Plan may participate in the
litigation at its own expense through counsel of its own choosing. If the Tax
Exempt Bond Fund chooses to defend or prosecute such claim, then the Parties
shall cooperate in the defense or prosecution thereof and shall furnish such
records and other information as are reasonably necessary.
(f) The Fund shall not settle any claim without the Company's express
written consent which shall not be unreasonably withheld. The Company shall not
settle any claim without the Fund's express written consent which shall not be
unreasonably withheld.
Section 12. All financial data provided to, processed by, and reported by
Fund/Plan under this Agreement shall be stated in United States dollars.
Fund/Plan shall have no obligation to convert to, equate, or deal in foreign
currencies or values, and expressly assumes no liability for any currency
conversion or non-U.S. dollar denominated computations relating to the affairs
of the Tax Exempt Bond Fund.
Section 13. The Tax Exempt Bond Fund agrees to pay Fund/Plan compensation
for its services and to reimburse it for expenses, at the rates and amounts as
set forth in Schedule "B" attached hereto, and as shall be set forth in any
amendments to such Schedule "B" approved by the Tax Exempt Bond Fund and
Fund/Plan. The Tax Exempt Bond Fund agrees and understands that Fund/Plan's
compensation be comprised of two components and payable on a monthly basis as
follows:
(i) An asset based fee subject to a stated minimum fee, will be
billed to the Tax Exempt Bond Fund within the first ten calendar days of the
month following the month in which the fee was incurred. The Tax Exempt Bond
Fund agrees to pay this fee to Fund/Plan within ten (10) calendar days of
receipt of such bill.
(ii) Reimbursement of any reasonable out-of-pocket expenses paid
by Fund/Plan on behalf of the Tax Exempt Bond Fund, which out-of-pocket expenses
will be billed to the Tax Exempt Bond Fund within the first ten calendar days of
the month following the month in which such out-of-pocket expenses were
incurred. The Tax Exempt Bond Fund agrees to reimburse Fund/Plan for such
expenses within ten (10) calendar days of receipt of such bill.
For the purpose of determining fees payable to Fund/Plan, the value of the
Tax Exempt Bond Fund's net assets shall be computed at the times and in the
manner specified in the Tax Exempt Bond Fund's Prospectus and Statement of
Additional Information then in
<PAGE>
effect.
During the term of this Agreement, should the Tax Exempt Bond Fund seek
services or functions in addition to those outlined above or in Schedule "A"
attached, a written amendment to this Agreement specifying the additional
services and corresponding compensation shall be executed by both Fund/Plan and
the Tax Exempt Bond Fund.
Section 14. Nothing contained in this Agreement is intended to or shall
require Fund/Plan, in any capacity hereunder, to perform any functions or duties
on any holiday, day of special observance or any other day on which the New York
Stock Exchange is closed. Functions or duties normally scheduled to be performed
on such days shall be performed on, and as of, the next succeeding business day
on which the New York Stock Exchange is open. Notwithstanding the foregoing,
Fund/Plan shall compute the net asset value for the Fund on each day required
pursuant to (i) Rule 22c-1 promulgated under the Investment Company Act of 1940,
as amended, and (ii) the Tax Exempt Bond Fund's Prospectus and Statement of
Additional Information then in effect.
Section 15.
(a) The term of this Agreement shall be for a period of three (3)
years, commencing on the date hereinabove first written ("Effective Date") and
shall continue thereafter on a year to year term subject to termination by
either Party as set forth in (c) below.
(b) The fee schedule set forth in Schedule "B" attached shall be fixed
for three (3) years commencing on the Effective Date of this Agreement and shall
continue thereafter subject to review and adjustment of the fee schedule and
termination notice as set forth in section (c) below.
(c) After the initial term of this Agreement, the Tax Exempt Bond Fund
or Fund/Plan may give written notice to the other of the termination of this
Agreement, such termination to take effect at the time specified in the notice,
which date shall not be less than one hundred twenty (120) days after the date
of receipt of such notice. Upon the effective termination date, the Tax Exempt
Bond Fund shall pay to Fund/Plan such compensation as may be due as of the date
of termination and shall likewise reimburse Fund/Plan for any out-of-pocket
expenses and disbursements reasonably incurred by Fund/Plan to such date.
(d) If a successor to any of Fund/Plan's duties or responsibilities
under this Agreement is designated by the Tax Exempt Bond Fund by written notice
to Fund/Plan in
<PAGE>
connection with the termination of this Agreement, Fund/Plan shall promptly upon
such termination and at the expense of the Tax Exempt Bond Fund, transfer all
Required Records and shall cooperate in the transfer of such duties and
responsibilities.
Section 16. Except as otherwise provided in this Agreement, any notice or
other communication required by or permitted to be given in connection with this
Agreement shall be in writing, and shall be delivered in person or sent by first
class mail, postage prepaid to the respective parties as follows:
If to IAA Trust Tax Exempt Bond Fund, Inc. If to Fund/Plan:
IAA Trust Tax Exempt Bond Fund, Inc. Fund/Plan Services, Inc.
808 IAA Drive 2 West Elm Street
Bloomington, IL 61702 Conshohocken, PA 19428
Attention: Richard M. Miller Attention: Kenneth J. Kempf,
Vice President President
Section 17. This Agreement may be amended from time to time by
supplemental agreement executed by the Tax Exempt Bond Fund and Fund/Plan and
the compensation stated in Schedule "B" attached hereto may be adjusted
accordingly as mutually agreed upon.
Section 18. The Tax Exempt Bond Fund represents and warrants to Fund/Plan
that the execution and delivery of this Agreement by the undersigned officers of
the Tax Exempt Bond Fund has been duly and validly authorized by resolution of
the Board of Directors of the Tax Exempt Bond Fund.
Section 19. This Agreement may be executed in two or more counterparts,
each of which when so executed shall be deemed to be an original, but such
counterparts shall together constitute but one and the same instrument.
Section 20. This Agreement shall extend to and shall be binding upon the
parties hereto and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable by the Tax Exempt Bond Fund without
the written consent of Fund/Plan or by Fund/Plan without the written consent of
the Tax Exempt Bond Fund, authorized or approved by a resolution of its
respective Boards of Directors.
Section 21. This Agreement shall be governed by the laws of the
Commonwealth of Pennsylvania and the venue of any action arising under this
Agreement shall be Montgomery County, Commonwealth of Pennsylvania.
<PAGE>
Section 22. No provision of this Agreement may be amended or modified, in
any manner except by a written agreement properly authorized and executed by
Fund/Plan and the Tax Exempt Bond Fund.
Section 23. If any part, term or provision of this Agreement is held by any
court 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
consisting of eleven typewritten pages, together with Schedules "A" and "B", to
be signed by their duly authorized officers as of the day and year first above
written.
IAA Trust Tax Exempt Bond Fund, Inc. Fund/Plan Services, Inc.
- ------------------------------------ ------------------------------------
By: Gary E. Mede, Vice President By: Kenneth J. Kempf, President
<PAGE>
Schedule "A"
Fund Accounting and Portfolio Valuation Services
for
The Tax Exempt Bond Fund, Inc.
Daily Accounting Services
1) Calculate Net Asset Value ("NAV") and Offering Price Per Share:
Update the daily market value of securities held by the Tax Exempt
Bond Fund using Fund/Plan's standard agents for pricing domestic
equity and bond securities. The standard domestic equity pricing
services are Quotron/Reuters, Inc., Muller Data Corporation, or
Interactive Data Corporation (IDC). Muller Data Corporation, Telerate
Systems, Inc and IDC are used for bond and money market issues.
Enter limited number (not to exceed ten per day) of manual prices
supplied by the Tax Exempt Bond Fund.
Prepare NAV proof sheet. Review components of change in NAV for
reasonableness.
Review variance reporting on-line and in hard copy for price changes
in individual securities using variance levels established by the Tax
Exempt Bond Fund. Verify US dollar security prices exceeding variance
levels by notifying the Tax Exempt Bond Fund and pricing sources of
noted variances.
Review for ex-dividend items indicated by pricing sources; trace to
general ledger for agreement.
Communicate required pricing information, NAV, to the Tax Exempt Bond
Fund's transfer agent (the "Transfer Agent") and, electronically, to
NASDAQ.
2) Complete Money Market (Daily Dividend) Fund Requirements: (If applicable)
Calculate net investment income available for distribution daily.
Calculate daily rate, and 1, 7, 30-day yields.
Provide system calculated average weighted maturity.
Supply Transfer Agent and client with distribution rates.
Provide money market original and amortized cost schedules in
accordance with valuing the Fund based on amortized cost, inclusive of
all debt issues income accruals.
Communicate required information electronically to NASDAQ, if
applicable.
3) Determine and Report Cash Availability to Fund by approximately 9:30 AM
Eastern Time:
Receive daily cash and transaction statements from the Tax Exempt Bond
Fund's custodian by 8:30 AM Eastern time.
Receive previous day shareholder activity reports from the transfer
agent by 8:30 AM Eastern time.
Fax hard copy cash availability calculations with all details to the
Tax Exempt Bond Fund.
Supply the Tax Exempt Bond Fund with 5-day cash projection report.
<PAGE>
Prepare and complete daily bank cash reconciliations including
documentation of any reconciling items and notify the Custodian and
the Tax Exempt Bond Fund.
For Money Market Funds, the Fund's transfer agent will also support
the client in receipt of timely cash information.
4) Reconcile and Record All Daily Expense Accruals:
Accrue expenses based on budget supplied by the Tax Exempt Bond Fund
either as percentage of net assets or specific dollar amounts.
If applicable, monitor expense limitations established by the Tax
Exempt Bond Fund.
If applicable, accrue daily amortization of Organizational expense.
If applicable, complete daily accrual of 12b-1 expenses.
5) Verify and Record All Daily Income Accruals for Debt Issues:
Review and verify all system generated Interest and Amortization
reports.
Establish unique security codes for bond issues to permit segregated
Trial Balance income reporting.
6) Monitor Domestic Securities Held for cash dividends, corporate actions and
capital changes such as splits, mergers, spinoffs, etc. and process
appropriately.
Monitor electronically received information from Muller Data
Corporation for all domestic securities.
Review current daily security trades for dividend activity.
Interface with custodian to monitor timely collection and postings of
corporate actions, dividends and interest.
7) Enter All Security Trades on Investment Accounting System (IAS) based on
written instructions from the Tax Exempt Bond Fund.
Review system verification of trade and interest calculations.
Verify settlement through the statements supplied by the custodian.
Maintain security ledger transaction reporting.
Maintain tax lot holdings.
Provide complete broker commission reporting.
Determine realized gains or losses on security trades.
8) Enter All Fund Share Transactions on IAS:
Process activity identified on reports supplied by the Fund/Plan
transfer agent.
Verify settlement through the statements supplied by the Custodian.
Reconcile to Fund/Plan's transfer agent report balances.
9) Prepare and Reconcile/Prove Accuracy of the Daily Trial Balance (listing
all asset, liability, equity, income and expense accounts)
Post manual entries to the general ledger.
Post custodian bank activity.
Post shareholder and security transactions.
Post and verify system generated activity, i.e., income and expense
accruals.
Prepare general ledger net cash proof used in NAV calculation.
<PAGE>
10) Review and Reconcile With Custodian Statements:
Verify all posted interest, dividends, expenses, and shareholder and
security payments/receipts, etc. (Discrepancies will be reported to
and resolved by the custodian.)
Post all cash settlement activity to the Trial Balance.
Reconcile to ending cash balance accounts.
Clear IAS subsidiary reports with settled amounts.
Track status of past due items and failed trades handled by the
custodian.
11) Submission of Daily Accounting Reports to the Tax Exempt Bond Fund:
(Additional reports readily available.)
Non-Money Market Fund
- Trial Balance.
- Portfolio Valuation (listing inclusive of holdings, costs, market
values, unrealized appreciation/depreciation and percentage of
portfolio comprised of each security).
- Cash Availability and 5-day Cash Projection Report
- NAV calculation report.
Monthly Accounting Services
1) Full Financial Statement Preparation (automated Statements of Assets and
Liabilities, of Operations and of Changes in Net Assets) and submission to
the Tax Exempt Bond Fund by 10th business day.
2) Submission of Monthly Automated IAS Reports to the Tax Exempt Bond Fund:
Security Purchase/Sales Journal
Interest and Maturity Report
Brokers Ledger (Commission Report)
Security Ledger Transaction Report with Realized Gains/Losses
Security Ledger Tax Lot Holdings Report
Additional reports available upon request
3) Reconcile Accounting Asset Listing to Custodian Asset Listing:
Report any security balance discrepancies to the custodian/the Tax
Exempt Bond Fund.
4) Provide Monthly Analysis and Reconciliation of Additional Trial Balance
Accounts, such as:
Security cost and realized gains/losses
Interest/dividend receivable and income
Payable/receivable for securities purchased and sold
Payable/receivable for fund shares; issued and redeemed
Expense payments and accruals analysis
<PAGE>
5) If Appropriate, Prepare and Submit to the Tax Exempt Bond Fund:
SEC yield reporting (non-money market funds with domestic and ADR
securities only).
Income by state reporting.
Standard Industry Code Valuation Report.
Alternative Minimum Tax Income segregation schedule.
Annual (and Semi-Annual) Accounting Services
1) Assist and supply auditors with schedules supporting securities and
shareholder transactions, income and expense accruals, etc. during the
year in accordance with standard audit assistance requirements.
2) Provide NSAR Reporting (Accounting Questions):
If applicable, answer the following items:
2, 12B, 20, 21, 22, 23, 28, 30A, 31, 32, 35, 36, 37, 43, 53, 55, 62, 63,
64B, 71, 72, 73, 74, 75, and 76.
<PAGE>
Accounting Services Unit (ASU) Basic Assumptions
for the IAA Trust Tax Exempt Bond Fund, Inc.
The Accounting Fees as set forth in Schedule "B" are based on the following
assumptions. To the extent these assumptions are inaccurate or requirements
change, fee revisions may be necessary.
Basic Assumptions:
1) The Tax Exempt Bond Fund's asset composition and trading activity levels
will remain comparable to the current portfolio.
2) The Tax Exempt Bond Fund has a tax year-end which coincides with its fiscal
year-end. No additional accounting requirements are necessary to identify
or maintain book-tax differences. ASU will supply segregated Trial Balance
account details to assist the Tax Exempt Bond Fund in proper identification
by category of all appropriate realized and unrealized gains/losses.
Security tax accounting which differs from book accounting will be provided
by the Tax Exempt Bond Fund or the Fund's independent auditor.
3) The Tax Exempt Bond Fund foresees no difficulty in using Fund/Plan's
standard current pricing agents for domestic equity, bond, and ADR
securities. Fund/Plan currently uses Quotron/Reuters, Inc., Muller Data
Corporation or Interactive Data Corporation (IDC) for domestic equities and
listed ADR's. Muller Data Corporation, Telerate Systems, Inc. or IDC are
used for bonds and money market instruments.
4) To the extent the Tax Exempt Bond Fund requires daily security prices
(limited to ten per day) from specific brokers for domestic securities,
these manual prices will be obtained by the Tax Exempt Bond Fund's
investment advisor and faxed to ASU by approximately 4:00 PM Eastern time
for inclusion in the NAV calculations. The Tax Exempt Bond Fund will also
supply ASU with the appropriate pricing contacts for the manual quotes.
5) To the extent the Tax Exempt Bond Fund should ever purchase/hold open-end
registered investment companies (RIC's), procedural discussions shall take
place between ASU and the Advisor to establish the appropriate pricing and
dividend rate sources. Depending on the methodologies selected by the Tax
Exempt Bond Fund, additional fees may apply.
6) ASU will supply daily Portfolio Valuation Reports to the Tax Exempt Bond
Fund's investment adviser or manager identifying current security
positions, original/amortized cost, security market values and changes in
unrealized appreciation/depreciation.
It will be the responsibility of the Fund's investment adviser to review
these reports and to promptly notify ASU of any possible problems, trade
discrepancies, incorrect security prices, corporate action/capital change
information that could result in a
<PAGE>
misstated Fund NAV.
7) The Tax Exempt Bond Fund does not currently expect to invest in Futures,
Swaps, Derivatives or Foreign (non-US dollar denominated) currency or
securities. To the extent these investment strategies should change,
additional fees will apply after the appropriate procedural discussions
have taken place between ASU and the Tax Exempt Bond Fund. (At least two
weeks advance notice is required should the Tax Exempt Bond Fund commence
trading in these investments).
8) The Tax Exempt Bond Fund shall direct the investment advisor to supply the
ASU with critical income information such as accrual methods, interest
payment frequency details, coupon payment dates, floating rate reset dates
and complete security descriptions with issue types and CUSIP numbers. If
applicable, for proper income accrual accounting, ASU will look to the
investment advisor to supply the yield to maturity and related cash flow
models for any mortgage/asset-backed securities held by the Tax Exempt
Bond Fund.
9) The Tax Exempt Bond Fund shall direct the Custodian to provide ASU with
daily custodian statements reflecting all prior day cash activity by 8:30
AM Eastern time. Complete descriptions of any postings, inclusive of CUSIP
numbers, interest/dividend payment dates, capital stock details, expense
authorizations, beginning/ending cash balances, etc. will be provided by
the Custodian's reports or system.
10) The Tax Exempt Bond Fund shall direct the custodian to supply capital
change information and interest rate changes to ASU in a timely manner. The
investment advisor will supplement and supply as appropriate.
11) The Tax Exempt Bond Fund shall direct the Custodian to handle and report
upon all settlement problems, failed trades and resolve unsettled
dividends/interest/paydowns and capital changes. The Custodian will process
all applicable capital change paperwork based upon advice from the
investment advisor. ASU agrees to supply segregated Trial Balance reporting
and supplemental reports to assist in this process.
12) With respect to mortgage/asset-backed securities including GNMA's, FHLMC's,
FNMA's, CMO's, ARM's, the Tax Exempt Bond Fund shall direct the Custodian
(or a Tax Exempt Bond Fund supplied source) to provide ASU with current
principal repayment factors on a timely basis in accordance with the
appropriate securities' schedule. Income accrual adjustments (to the extent
necessary) based upon initial estimates will be completed by ASU when
actual principal/income payments are collected by the Custodian and
reported to ASU.
13) To the extent applicable, ASU will maintain on a daily basis US dollar
denominated qualified covered call options and index options reporting on
the daily Trial Balance and value the respective options and underlying
positions. This Agreement does not provide for tax classifications if they
are required.
<PAGE>
If the Tax Exempt Bond Fund commences investment in domestic options or
designated hedges, at least two week's advance notice is required to
clarify operational procedures between ASU and the investment advisor.
14) To the extent the Tax Exempt Bond Fund, Inc. should establish a Line of
Credit in segregated accounts with the Custodian for temporary
administrative purposes, and/or leveraging/hedging the portfolio, it is not
the responsibility under this Agreement for ASU to complete the appropriate
paperwork/monitoring for segregation of assets and adequacy of collateral.
The Tax Exempt Bond Fund shall direct the investment advisor to execute
such responsibilities. ASU will, however, reflect appropriate Trial Balance
account entries and interest expense accrual charges on the daily Trial
Balance adjusting as necessary at month-end.
15) If the Tax Exempt Bond Fund commences participation in Security Lending,
Leveraging, Precious Metals or Short Sales, at least two week's advance
notice is required. To the extent the Tax Exempt Bond Fund does so in the
future, additional fees will apply.
16) The Tax Exempt Bond Fund shall direct the investment advisor to supply ASU
with portfolio specific expense accrual procedures and monitor the expense
accrual balances for adequacy based on outstanding liabilities monthly. The
investment advisor will promptly communicate to the ASU any adjustments
needed.
17) Specific deadlines shall be met and complete information shall be supplied
by the Tax Exempt Bond Fund in order to minimize any settlement problems,
NAV miscalculations or income accrual adjustments.
The Tax Exempt Bond Fund shall direct the investment advisor to provide to
ASU Trade Authorization Forms, with the appropriate officer's signature, on
all security trades placed by the Tax Exempt Bond Fund no later than 12:30
PM Eastern time on settlement/value date for money market issues, assuming
that trade date equals settlement date; and by 11:00 AM Eastern time on
trade date plus one for non-money market securities. Receipt by ASU of
trade information within these identified deadlines may be via telex, fax,
or on-line system access. The investment advisor will also communicate all
trade information directly to the Custodian.
There is no assurance that security trade information received by ASU after
the above stated deadlines will be included in that day's work.
The Tax Exempt Bond Fund agrees to direct the investment advisor to include
all information required by ASU, including CUSIP numbers and/or ticker
symbols for all US dollar denominated trades on the Trade Authorization
Form, telex or on-line support. ASU will not be responsible for NAV changes
or distribution rate adjustments that result from incomplete trade
information.
18) To the extent the Tax Exempt Bond Fund utilizes Purchases In-Kind (U.S.
dollar denominated securities only) as a method for shareholder
subscriptions, ASU will provide the Tax Exempt Bond Fund with procedures to
properly handle and process
<PAGE>
securities in-kind. Should the Tax Exempt Bond Fund prefer procedures other
than those provided by ASU, additional fees may apply. (The Parties agree
that discussions will take place in advance between ASU and the Tax Exempt
Bond Fund to clarify the appropriate In-Kind operational procedures to be
followed).
19) It is assumed that the investment advisor or Fund/Plan as administrator
will complete the applicable performance and rate of return calculations as
required by the SEC for the Tax Exempt Bond Fund.
20) Compliance reporting (Sub-Chapter "M") will be completed by the Fund/Plan
administrator or investment advisor.
21) Fund/Plan will provide Administration and Transfer Agency Services.
22) The Tax Exempt Bond Fund is not currently expected to issue separate
classes of shares. To the extent they do so, additional fees will be
negotiated.
<PAGE>
Schedule "B"
Fund Accounting and Portfolio Valuation Services Fee Schedule
for
IAA Trust Tax Exempt Bond Fund, Inc.
This Fee Schedule is fixed for a period of three (3) years from the Effective
Date as that term is defined in the Agreement.
The Accounting Fees as set forth below are based on the "Basic Assumptions" as
set forth in Schedule "A." To the extent that those assumptions are inaccurate
or requirements change, fee revisions may be necessary.
FUND ACCOUNTING AND PORTFOLIO VALUATION FEES (US dollar denominated
securities only) All Accounting Services fees are quoted with the assumption
that Transfer Agent Services will be provided by Fund/Plan Services, Inc.
I. Annual Fee Schedule Per Portfolio: (1/12th payable monthly)
$25,000 Minimum to $ 10 Million of Average Net Assets
.0004 On the Next $ 40 Million of Average Net Assets
.0003 On the Next $ 50 Million of Average Net Assets
.0001 Over $100 Million of Average Net Assets
II. Pricing Services Quotation Fee (Based on individual CUSIP or security
identification number.) Specific costs will be identified based upon
options selected by the client and will be billed monthly.
A) Muller Data Corporation* (if applicable)
*(Based on current vendor costs, subject to change)
Government/Mortgage Backed/Corporate
Short & Long Term Quotes $ .50 per Quote per Issue
Tax-Exempt Short & Long Term Quotes $ .55 per Quote per Issue
CMOs/ARMs/ABS $1.00 per Quote per Issue
Foreign Security Quotes $ .50 per Quote per Issue
Foreign Security Supplemental
Corporation Actions, Dividends
& Capital Changes $2.00 per Issue per Month
Mortgage Backed Factors $1.00 per Issue per Month
Minimum Weekly File Transmission is Assumed
There are currently no charges for the domestic dividend and capital
change information transmitted daily to Fund/Plan services from Muller
Data Corporation.
<PAGE>
B) Futures and Currency Forward Contracts $2.00 per Issue per Day
C) Telerate Systems, Inc.* (if applicable)
*(Based on current vendor costs, subject to change.)
Specific costs will be identified based upon options selected by
the client and will be billed monthly.
D) Quotron/Reuters, Inc.*
*(Based on current vendor costs, subject to change.)
Fund/Plan does not currently pass along the charges for the
domestic security prices supplied by Quotron/Reuters, Inc.
E) Interactive Data Corp.* (if applicable)
*(Based on current vendor costs, subject to change.)
Domestic Equities and Options $ .15 per Quote per Issue
Corporate/Government/Agency Bonds including
Mortgage-Backed Securities (evaluated,
seasoned, and/or closing) $ .50 per Quote per Issue
US Municipal Bonds and Collateralized
Mortgage Obligations $ .80 per Quote per Issue
International Equities and Bonds $ .50 per Quote per Issue
Domestic Dividends and Capitalization
Changes $3.50 per Month per Holding
International Dividends and Capital
Changes $4.00 per Month per Holding
Interactive Data also charges monthly transmission costs and disk
storage charges.
Specific costs will be identified based upon options selected by the
Tax Exempt Bond Fund and will be billed monthly.
III. SEC Yield Calculation: (if applicable)
Provide up to 12 reports per year to reflect the yield calculations for
non-money market funds required by the SEC, at no additional charge. (US
dollar denominated securities only).
<PAGE>
IV. Out-Of-Pocket Expenses
The Tax Exempt Bond Fund will reimburse Fund/Plan Services, Inc. monthly
for all out-of-pocket expenses, including telephone, postage,
telecommunications, special reports, record retention, special
transportation costs as approved, and the cost of copying and sending
materials to auditors.
V. Additional Services
To the extent the Tax Exempt Bond Fund commences using investment
techniques such as Futures, Security Lending, Swaps, Short Sales,
Derivatives, Leveraging, Precious Metals or non-US dollar denominated
currency and securities, additional fees will apply, as mutually agreed
upon.
Activities of a non-recurring nature such as shareholder in-kinds, fund
consolidations, mergers, or reorganizations will be subject to negotiation.
To the extent that the Tax Exempt Bond Fund should decide to issue
separate/multiple classes of shares, additional fees shall apply. Any
additional enhanced services, programming requests or reports will be
quoted upon request.
This Schedule may be amended to reflect the addition of other
services/reports.
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this Post-Effective Amendment No. 24 to the
Registration Statement under the Securities Act of 1933 on Form N-1A (File No.
2-62538) of our report dated July 28, 1995 on our audit of the financial
statements and financial highlights of IAA Trust Asset Allocation Fund, Inc. We
also consent to the reference to our Firm under the captions "Financial
Highlights" in the Prospectus and "Independent Accountants" in the Statement of
Additional Information.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
October 25, 1995
INCOME TOTAL 32,360.60
INTEREST 23,717.18
DIVIDENDS 8,643.42
EXPENSES 9,013.78
AVERAGE SHARES 773,839.5963
MAXIMUM OFFERING PRICE 12.670000000
CURRENT YIELD 2.874533066
<PAGE>
ASSET ALLOCATION FUND-TOTAL RETURN-1 YEAR-ALL DISTRIBUTIONS REINVESTED
06-30-95 NO SALES CHARGE RATE OF RETURN = 16.30%
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
CAPITAL REINVEST- INITIAL
DIVIDEND GAINS MENT CAPITAL REINVESTED TOTAL BID DOLLAR INVESTMENT INVESTMENT
DATE PER SHARE PER SHARE PRICE DIVIDENDS GAINS SHARES SHARES DATE PRICE AMOUNT PRICE AMOUNT
- ---- --------- --------- -------- --------- ------- ---------- ------ ---- ----- ------ ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INITIAL INVESTMENT $1,000 90.253 06-30-94 11.08 1,000.00 $11.42 $1,000
10-25-90 10.58 0.00 0.00 0.000 90.253
11-30-90 0.0000 10.68 0.00 0.00 0.000 90.253
12-31-90 0.0000 0 10.73 0.00 0.00 0.000 90.253
1-31-91 0.0000 10.75 0.00 0.00 0.000 90.253
2-28-91 0.0000 10.79 0.00 0.00 0.000 90.253
3-28-91 0.0000 10.80 0.00 0.00 0.000 90.253
4-30-91 0.0000 10.82 0.00 0.00 0.000 90.253
5-31-91 0.0000 10.80 0.00 0.00 0.000 90.253
6-30-91 0.0000 10.74 0.00 0.00 0.000 90.253
7-31-91 0.0000 0.0000 10.75 0.00 0.00 0.000 90.253
8-30-91 0.0000 10.88 0.00 0.00 0.000 90.253
9-30-91 0.0000 11.00 0.00 0.00 0.000 90.253
10-31-91 0.0000 11.02 0.00 0.00 0.000 90.253
11-30-91 0.0000 11.07 0.00 0.00 0.000 90.253
12-31-91 0.0000 0 11.28 0.00 0.00 0.000 90.253
1-31-92 0.0000 11.11 0.00 0.00 0.000 90.253
2-28-92 0.0000 11.09 0.00 0.00 0.000 90.253
3-31-92 0.0000 10.98 0.00 0.00 0.000 90.253
4-30-92 0.0000 11.02 0.00 0.00 0.000 90.253
5-31-92 0.0000 11.12 0.00 0.00 0.000 90.253
6-30-92 0.0000 11.20 0.00 0.00 0.000 90.253 6-30-92 11.02 1,010.83
7-31-92 0.0000 11.38 0.00 0.00 0.000 90.253 7-31-92 11.38 1,027.08
8-31-92 0.0000 11.40 0.00 0.00 0.000 90.253 8-31-92 11.40 1.028.88
9-30-92 0.0000 11.46 0.00 0.00 0.000 90.253 9-30-92 11.46 1,034.30
10-30-92 0.0000 11.24 0.00 0.00 0.000 90.253 10-30-92 11.24 1,014.44
11-30-92 0.0000 11.15 0.00 0.00 0.000 90.253 11-30-92 11.15 1.006.32
12-31-92 0.0000 0 11.22 0.00 0.00 0.000 90.253 12-31-92 11.27 1,012.64
1-31-93 0.0000 0 11.30 0.00 0.00 0.000 90.253 01-31-93 11.33 1,022.57
2-24-93 0.0000 0 11.50 0.00 0.00 0.000 90.253 2-28-93 11.49 1,037.01
3-29-93 0.0000 0 11.47 0.00 0.00 0.000 90.253 3-31-93 11.48 1,036.10
4-28-93 0.0000 0 11.39 0.00 0.00 0.000 90.253 4-30-93 11.40 1,028.88
0.0000 0 11.46 0.00 0.00 0.000 90.253 5-31-93 11.43 1,031.77
6-30-93 0.0000 0 11.60 0.00 0.00 0.000 90.253 6-30-93 11.60 1,046.93
7-30-93 0.0000 0 11.33 0.00 0.00 0.000 90.253 7-30-93 11.36 1,025.27
8-31-93 0.0000 0 11.64 0.00 0.00 0.000 90.253 8-31-93 11.67 1,053.25
9-30-93 0.0000 0 11.84 0.00 0.00 0.000 90.253 9-30-93 11.77 1,062.28
10-31-93 0.0000 0 11.76 0.00 0.00 0.000 90.253 10-31-93 11.79 1,064.08
11-30-93 0.0000 0 11.56 0.00 0.00 0.000 90.253 11-30-93 11.56 1,043.32
12-29-93 0.0000 0 11.58 0.00 0.00 0.000 90.253 12-29-93 11.58 1,045.13
12-31-93 0.0000 0 11.51 0.00 0.00 0.000 90.253 12-31-93 11.51 1.038.81
01-27-94 0.0000 0 11.61 0.00 0.00 0.000 90.253 01-27-94 11.61 1,047.84
01-31-94 0.0000 0 11.66 0.00 0.00 0.000 90.253 01-31-94 11.66 1,052.35
02-24-94 0.0000 0 11.37 0.00 0.00 0.000 90.253 02-24-94 11.37 1,026.18
02-28-94 0.0000 0 11.43 0.00 0.00 0.000 90.253 02-28-94 11.43 1,031.59
03-29-94 0.0000 0 11.24 0.00 0.00 0.000 90.253 03-31-94 11.17 1,008.13
04-28-94 0.0000 0 11.15 0.00 0.00 0.000 90.253 04-30-94 11.16 1,007.22
05-27-94 0.0000 0 11.21 0.00 0.00 0.000 90.253 05-31-94 11.19 1,009.93
06-28-94 0.0000 0 11.12 0.00 0.00 0.000 90.253 06-30-94 11.08 1,000.00
07-27-94 0.0250 0.191 10.98 2.26 17.24 1.776 92.029 07-31-94 11.09 1,020.60
08-29-94 0.0200 0 11.24 1.84 0.00 0.164 92.193 08-31-94 11.26 1,038.09
09-28-94 0.0250 0 11.10 2.30 0.00 0.207 92.400 09-30-94 11.05 1,021.02
10-27-94 0.0280 0 11.01 2.59 0.00 0.235 92.635 10-31-94 11.09 1,027.32
11-28-94 0.0350 0 10.82 3.24 0.00 0.299 92.934 11-30-94 10.81 1,004.62
12-28-94 0.0230 0 10.90 2.14 0.00 0.196 93.130 12-31-94 10.89 1,014.19
01-27-95 0.0310 0 11.03 2.89 0.00 0.262 93.392 01-31-95 11.05 1,031.98
02-24-95 0.0310 0 11.28 2.90 0.00 0.257 93.649 02-28-95 11.33 1,061.04
03-29-95 0.0270 0 11.48 2.53 0.00 0.220 93.869 03-31-95 11.46 1,075.74
04-26-95 0.0330 0 11.69 3.10 0.00 0.265 94.134 04-28-95 11.72 1,103.25
05-26-95 0.0380 0 11.95 3.58 0.00 0.300 94.434 05-31-95 12.05 1,137.93
06-28-95 0.0250 0 12.29 2.36 0.00 0.192 94.626 06-30-95 12.29 1,162.95
- -------- ------- ------- ------ ------ ------ ------ ------ -------- ----- --------
06-28-95 0.3410 0.1910 31.73 17.240 4.373 94.626 06-30-95 12.29 1,162.95
======== ======= ======= ====== ====== ====== ====== ======= ======= ====== ========
Distribution Yield
</TABLE>
<PAGE>
ASSET ALLOCATION FUND-TOTAL RETURN-1 YEAR-ALL DISTRIBUTIONS REINVESTED
06-30-95 MAXIMUM SALES CHARGE RATE OF RETURN = 12.83%
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
CAPITAL REINVEST- INITIAL
DIVIDEND GAINS MENT CAPITAL REINVESTED TOTAL BID DOLLAR INVESTMENT INVESTMENT
DATE PER SHARE PER SHARE PRICED DIVIDENDS GAINS SHARES SHARES DATE PRICE AMOUNT PRICE AMOUNT
- ----- ------ -------- ------ ------ ------ ------ ------ ------ ------ ------ ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INITIAL INVESTMENT $ 1,000 87.566 06-30-94 $11.08 $970.23 $11.42 $1,000
7-31-91 0.0000 0.0000 10.75 0.00 0.00 0.000 87.566
8-30-91 0.0000 10.88 0.00 0.00 0.000 87.566
9-30-91 0.0000 11.00 0.00 0.00 0.000 87.566
10-31-91 0.0000 11.02 0.00 0.00 0.000 87.566
11-30-91 0.0000 11.07 0.00 0.00 0.000 87.566
12-31-91 0.0000 0 11.28 0.00 0.00 0.000 87.566
1-31-92 0.0000 11.11 0.00 0.00 0.000 87.566
2-28-92 0.0000 11.09 0.00 0.00 0.000 87.566
3-31-92 0.0000 10.98 0.00 0.00 0.000 87.566
4-30-92 0.0000 11.02 0.00 0.00 0.000 87.566
5-31-92 0.0000 11.12 0.00 0.00 0.000 87.566
6-30-92 0.0000 11.20 0.00 0.00 0.000 87.566 6-30-92 11.20 980.74
7-31-92 0.0000 11.38 0.00 0.00 0.000 87.566 7-31-92 11.38 996.50
8-31-92 0.0000 11.40 0.00 0.00 0.000 87.566 8-31-92 11.40 998.25
9-30-92 0.0000 11.46 0.00 0.00 0.000 87.566 9-30-92 11.46 1,003.51
10-30-92 0.0000 11.24 0.00 0.00 0.000 87.566 10-30-92 11.24 984.24
11-30-92 0.0000 11.15 0.00 0.00 0.000 87.566 11-30-92 11.15 976.36
12-31-92 0.0000 0 11.22 0.00 0.00 0.000 87.566 12-31-92 11.22 982.49
1-31-93 0.0000 11.30 0.00 0.00 0.000 87.566 01-31-93 11.33 992.12
2-24-93 0.0000 11.50 0.00 0.00 0.000 87.566 2-28-93 11.49 1,006.13
3-29-93 0.0000 11.47 0.00 0.00 0.000 87.566 3-31-93 11.48 1,005.26
4-28-93 0.0000 11.39 0.00 0.00 0.000 87.566 4-30-93 11.40 998.25
0.0000 11.46 0.00 0.00 0.000 87.566 5-31-93 11.43 1,001.05
6-30-93 0.0000 11.60 0.00 0.00 0.000 87.566 6-30-93 11.60 1,015.77
7-30-93 0.0000 0 11.33 0.00 0.00 0.000 87.566 7-30-93 11.36 994.75
8-31-93 0.0000 0.000 11.64 0.00 0.00 0.000 87.566 8-31-93 11.67 1,021.90
9-30-93 0.0000 0.000 11.84 0.00 0.00 0.000 87.566 9-30-93 11.77 1,030.65
10-31-93 0.0000 0.000 11.76 0.00 0.00 0.000 87.566 10-31-93 11.78 1,032.40
11-30-93 0.0000 0.000 11.56 0.00 0.00 0.000 87.566 11-30-93 11.56 1,012.26
12-29-93 0.0000 0.000 11.58 0.00 0.00 0.000 87.566 12-29-93 11.58 1,014.01
12-31-93 0.0000 0.000 11.51 0.00 0.00 0.000 87.566 12-31-93 11.51 1,007.88
01-27-94 0.0000 0.000 11.61 0.00 0.00 0.000 87.566 01-27-94 11.61 1,016.64
01-31-94 0.0000 0.000 11.66 0.00 0.00 0.000 87.566 01-31-94 11.66 1,021.02
02-24-94 0.0000 0.000 11.37 0.00 0.00 0.000 87.566 02-24-94 11.37 995.63
02-28-94 0.0000 0.000 11.43 0.00 0.00 0.000 87.566 02-28-94 11.43 1,000.88
03-29-94 0.0000 0.000 11.24 0.00 0.00 0.000 87.566 03-31-94 11.17 978.11
04-28-94 0.0000 0.000 11.15 0.00 0.00 0.000 87.566 04-30-94 11.16 977.24
05-27-94 0.0000 0.000 11.21 0.00 0.00 0.000 87.566 05-31-94 11.19 979.86
06-28-94 0.0000 0.000 11.12 0.00 0.00 0.000 87.566 06-30-94 11.08 970.23
07-27-94 0.0250 0.191 10.98 2.19 16.73 1.723 89.289 07-31-94 11.09 990.22
08-29-94 0.0200 0.000 11.24 1.79 0.00 0.159 89.448 08-31-94 11.28 1,007.18
09-28-94 0.0250 0.000 11.10 2.24 0.00 0.202 89.650 09-30-94 11.03 990.63
10-27-94 0.0280 0.000 11.01 2.51 0.00 0.228 89.878 10-31-94 11.09 996.75
11-28-94 0.0350 0.000 10.82 3.15 0.00 0.291 90.169 11-30-94 10.81 974.73
12-28-94 0.0230 0.000 10.90 2.07 0.00 0.190 90.359 12-31-94 10.89 984.01
01-27-95 0.0310 0.000 11.03 2.80 0.00 0.254 90.613 01-31-95 11.05 1,001.27
02-24-95 0.0310 0.000 11.28 2.81 0.00 0.249 90.862 02-28-95 11.33 1,029.47
03-29-95 0.0270 0.000 11.48 2.45 0.00 0.213 91.075 03-31-95 11.46 1,043.72
04-26-95 0.0330 0.000 11.69 3.01 0.00 0.257 91.332 04-28-95 11.72 1,070.41
05-26-95 0.0380 0.000 11.95 3.47 0.00 0.290 91.622 05-31-95 12.05 1,104.05
06-28-95 0.0250 0.000 12.29 2.29 0.00 0.186 91.808 06-30-95 12.29 1,128.32
- -------- ------- ------- ------ ------ ------ ------ ------ -------- ----- --------
06-28-95 0.3410 0.1910 30.78 16.730 4.242 91.805 06-30-95 12.29 1,128.32
======== ======= ======= ====== ====== ====== ====== ======= ======== ===== ========
</TABLE>
<PAGE>
ASSET ALLOCATION FUND-TOTAL RETURN-5 YEARS-ALL DISTRIBUTIONS REINVESTED
JUNE 30 1995 - MAXIMUM SALES CHARGE RATE OF RETURN 8.79%
<TABLE>
<CAPTION>
CAPITAL REINVEST- INITIAL
DIVIDEND GAINS MENT CAPITAL REINVESTED TOTAL BID DOLLAR INVESTMENT INVESTMENT
DATE PER SHARE PER SHARE PRICE DIVIDENDS GAINS SHARES SHARES DATE PRICE AMOUNT PRICE AMOUNT
- ----- --------- --------- ------ --------- ------- ---------- ------ ----- ----- ------ --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INITIAL INVESTMENT - $1,000 91.827 30-Jun-90 $10.56 $969.69 $10.89 $1,000
7-24-87 0 10.77 0.00 0.00 0.000 91.827
7-29-87 0 10.58 0.00 0.00 0.000 91.827
8-25-87 0 10.65 0.00 0.00 0.000 91.827
9-25-87 0 10.39 0.00 0.00 0.000 91.827
10-23-87 0.0000 10.08 0.00 0.00 0.000 91.827
11-25-87 0 10.31 0.00 0.00 0.000 91.827
12-24-87 0 10.25 0.00 0.00 0.000 91.827
1-25-88 0 10.48 0.00 0.00 0.000 91.827
2-25-88 0 10.53 0.00 0.00 0.000 91.827
3-25-88 0 10.54 0.00 0.00 0.000 91.827
4-25-88 0.0000 10.47 0.00 0.00 0.000 91.827
5-25-88 0.0000 10.28 0.00 0.00 0.000 91.827
6-24-88 0 10.54 0.00 0.00 0.000 91.827
7-25-88 0 10.25 0.00 0.00 0.000 91.827
8-25-88 0 10.27 0.00 0.00 0.000 91.827
9-23-88 0 10.44 0.00 0.00 0.000 91.827
10-25-88 0 10.56 0.00 0.00 0.000 91.827
11-23-88 0 10.34 0.00 0.00 0.000 91.827
12-23-88 0 10.35 0.00 0.00 0.000 91.827
1-25-89 0.0000 10.41 0.00 0.00 0.000 91.827
2-24-89 0.0000 10.28 0.00 0.00 0.000 91.827
3-23-89 0.0000 10.20 0.00 0.00 0.000 91.827
4-25-89 0.0000 10.34 0.00 0.00 0.000 91.827
5-25-89 0.0000 10.56 0.00 0.00 0.000 91.827
6-23-89 0.0000 10.72 0.00 0.00 0.000 91.827
7-25-89 0 0 10.75 0.00 0.00 0.000 91.827
8-25-89 0.0000 10.63 0.00 0.00 0.000 91.827
9-25-89 0.0000 10.59 0.00 0.00 0.000 91.827
10-25-89 0.0000 10.77 0.00 0.00 0.000 91.827
11-27-89 0.0000 10.77 0.00 0.00 0.000 91.827
12-22-89 0.0000 10.79 0.00 0.00 0.000 91.827
12-28-89 0.0000 10.75 0.00 0.00 0.000 91.827
1-25-90 0.0000 10.52 0.00 0.00 0.000 91.827
2-25-90 0.0000 10.45 0.00 0.00 0.000 91.827
3-23-90 0.0000 10.47 0.00 0.00 0.000 91.827
4-25-90 0.0000 10.21 0.00 0.00 0.000 91.827
5-25-90 0.0000 10.46 0.00 0.00 0.000 91.827
6-25-90 0.0000 10.50 0.00 0.00 0.000 91.827
7-25-90 0.0730 10.54 6.70 0.00 0.636 92.463
8-25-90 0.0640 10.38 5.92 0.00 0.570 93.033
9-25-90 0.0650 10.41 6.05 0.00 0.581 93.614
10-25-90 0.0620 10.58 5.80 0.00 0.548 94.162
11-30-90 0.0780 10.68 7.34 0.00 0.687 94.849
12-31-90 0.0650 0.0280 10.73 6.17 2.75 0.831 95.880
1-31-91 0.0590 10.75 5.65 0.00 0.526 96.206
2-28-91 0.0620 10.79 5.96 0.00 0.552 96.758
3-28-91 0.0560 10.80 5.42 0.00 0.502 97.200
4-30-91 0.0850 10.82 6.32 0.00 0.584 97.844
5-31-91 0.0590 10.80 5.77 0.00 0.534 98.378
6-30-91 0.0500 10.74 4.92 0.00 0.458 98.836 $1,000
7-31-91 0.0580 0.0500 10.75 5.73 4.94 0.993 99.829
8-31-91 0.0620 10.88 6.19 0.00 0.569 100.398
9-30-91 0.0500 11 5.02 0.00 0.456 100.854
10-31-91 0.0610 11.02 6.15 0.00 0.558 101.412
11-30-91 0.0560 11.07 5.68 0.00 0.513 101.925
12-31-91 0.0590 0.0410 11.28 6.01 4.18 0.903 102.828
1-31-92 0.0550 11.11 5.66 0.00 0.509 103.337
2-28-92 0.0530 11.09 5.48 0.00 0.494 103.831
3-31-92 0.0580 10.98 6.02 0.00 0.548 104.379
4-30-92 0.0540 11.02 5.64 0.00 0.512 104.891
5-31-92 0.0540 11.12 5.66 0.00 0.509 105.400
6-30-92 0.0630 11.2 6.64 0.00 0.593 105.993 6-30-92 $11.20 1,187.12
7-31-92 0.0690 11.38 7.31 0.00 0.642 106.635 7-31-92 $11.38 1,213.51
8-31-92 0.0500 11.4 5.33 0.00 0.468 107.103 8-31-92 $11.40 1,220.97
9-30-92 0.0430 11.46 4.61 0.00 0.402 107.505 9-30-92 $11.48 1,232.01
10-30-92 0.0530 11.24 5.70 0.00 0.507 108.012 10-30-92 $11.24 1,214.05
11-30-92 0.0500 11.15 5.40 0.00 0.484 108.496 11-30-92 $11.15 1,209.73
31-Dec-92 0.0520 0.0750 11.22 5.64 8.14 1.228 109.724 12/31/92 $11.22 1,231.10
27-Jan-93 0.0500 11.3 5.49 0.00 0.486 110.210 01/31/93 $11.33 1,248.68
24-Feb-93 0.0480 11.5 5.29 0.00 0.460 110.670 02/28/93 $11.49 1,271.60
29-Mar-93 0.0450 11.47 4.98 0.00 0.434 111.104 03/31/93 $11.48 1,275.47
28-Apr-93 0.0370 11.39 4.11 0.00 0.361 111.465 04/30/93 $11.40 1,270.70
26-May-93 0.0420 11.46 4.68 0.00 0.408 111.873 05/31/93 $11.43 1,278.71
28-Jun-93 0.0280 11.60 3.13 0.00 0.270 112.143 06/30/93 $11.60 1,300.86
28-Jul-93 0.0320 0.204 11.33 3.59 22.88 2.336 114.479 07/30/93 $11.36 1,300.48
31-Aug-93 0.0390 0.000 11.64 4.46 0.00 0.383 114.862 08/31/93 $11.67 1,340.44
30-Sep-93 0.0280 0.000 11.84 3.22 0.00 0.272 115.134 09/30/93 $11.77 1,355.13
31-Oct-93 0.0290 0.000 11.76 3.34 0.00 0.284 115.418 10/31/93 $11.79 1,360.78
30-Nov-93 0.0340 0.000 11.56 3.92 0.00 0.339 115.757 11/30/93 $11.56 1,338.15
29-Dec-93 0.0230 0.063 11.58 2.66 7.29 0.859 116.616 12/29/93 $11.58 1,350.41
31-Dec-93 0.0000 0.000 11.51 0.00 0.00 0.000 116.616 12/31/93 $11.51 1,342.25
27-Jan-94 0.0240 0.000 11.61 2.80 0.00 0.241 116.857 01/27/94 $11.61 1,368.71
31-Jan-94 0.0000 0.000 11.66 0.00 0.00 0.000 116.857 01/31/94 $11.66 1,362.55
24-Feb-94 0.0280 0.000 11.37 3.27 0.00 0.288 117.145 02/24/94 $11.37 1,331.94
28-Feb-94 0.0000 0.000 11.43 0.00 0.00 0.000 117.145 02/28/94 $11.43 1,338.97
29-Mar-94 0.0240 0.000 11.24 2.81 0.00 0.250 117.395 03/29/94 $11.24 1,319.52
31-Mar-94 0.0000 0.000 11.17 0.00 0.00 0.000 117.395 03/31/94 $11.17 1,311.30
30-Apr-94 0.0220 0.000 11.15 2.58 0.00 0.231 117.626 04/30/94 $11.16 1,312.71
31-May-94 0.0330 0.000 11.21 3.88 0.00 0.345 117.972 05/31/94 $11.19 1,320.11
30-Jun-94 0.0250 0.000 11.12 2.95 0.00 0.265 118.237 06/30/94 $11.08 1,310.07
31-Jul-94 0.0250 0.191 10.98 2.96 22.58 2.326 120.563 07/31/94 $11.09 1,337.04
31-Aug-94 0.0200 0.000 11.24 2.41 0.00 0.214 120.777 08/31/94 $11.26 1,359.95
28-Sep-94 0.0250 0.000 11.10 3.02 0.00 0.272 121.049 09/30/94 $11.05 1,337.59
27-Oct-94 0.0280 0.000 11.01 3.39 0.00 0.308 121.357 10/31/94 $11.09 1,345.85
28-Nov-94 0.0350 0.000 10.82 4.25 0.00 0.393 121.750 11/30/94 $10.81 1,316.12
28-Dec-94 0.0230 0.000 10.90 2.80 0.00 0.257 122.007 12/31/94 $10.89 1,328.66
27-Jan-95 0.0310 0.000 11.03 3.78 0.00 0.343 122.350 01/31/95 $11.05 1,351.97
24-Feb-95 0.0310 0.000 11.28 3.79 0.00 0.336 122.686 02/28/95 $11.33 1,390.03
29-Mar-95 0.0270 0.000 11.48 3.31 0.00 0.288 122.974 03/31/95 $11.46 1,409.28
26-Apr-95 0.0330 0.000 11.69 4.06 0.00 0.347 123.321 04/28/95 $11.72 1,445.32
26-May-95 0.0380 0.000 11.95 4.69 0.00 0.392 123.713 05/31/95 $12.05 1,490.74
28-Jun-95 0.0250 0.000 12.29 3.09 0.00 0.251 123.964 06/30/95 $12.29 1,523.52
- --------- -------- ------ ----- ------- ----- ------ ------- -------- ------ --------
28-Jun-95 2.6900 0.6530 284.60 72.76 32.137 123.964 06/30/95 12.29 1,523.52
========= ======== ====== ===== ======= ===== ====== ======= ======== ====== =========
52.35%
</TABLE>
<PAGE>
INCOME FUND-TOTAL RETURN-5 YEARS-ALL DISTRIBUTIONS REINVESTED
JUNE 30 1995 - MAXIMUM SALES CHARGE RATE OF RETURN 9.46%
<TABLE>
<CAPTION>
CAPITAL REINVEST- INITIAL
DIVIDEND GAINS MENT CAPITAL REINVESTED TOTAL BID DOLLAR INVESTMENT INVESTMENT
DATE PER SHARE PER SHARE PRICE DIVIDENDS GAINS SHARES SHARES DATE PRICE AMOUNT PRICE AMOUNT
- ----- --------- --------- ------ --------- ------- ---------- ------ ----- ----- ------ --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INITIAL INVESTMENT - $1,000 94.697 30-Jun-90 $10.56 $1,000.00 $10.89 $1,000
10-24-86 0.0000 11.08 0.00 0.00 0.000 94.697
11-24-86 0 11.14 0.00 0.00 0.000 94.697
12-23-86 0 11.14 0.00 0.00 0.000 94.697
1-23-87 0 11.25 0.00 0.00 0.000 94.697
2-24-87 0 11.35 0.00 0.00 0.000 94.697
3-25-87 0 11.39 0.00 0.00 0.000 94.697
4-24-87 0 10.68 0.00 0.00 0.000 94.697
5-22-87 0 10.66 0.00 0.00 0.000 94.697
6-25-87 0 10.83 0.00 0.00 0.000 94.697
7-24-87 0 10.77 0.00 0.00 0.000 94.697
7-29-87 0 0 10.58 0.00 0.00 0.000 94.697
8-25-87 0 10.65 0.00 0.00 0.000 94.697
9-25-87 0 10.39 0.00 0.00 0.000 94.697
10-23-87 0 10.08 0.00 0.00 0.000 94.697
11-25-87 0 10.31 0.00 0.00 0.000 94.697
12-24-87 0 10.25 0.00 0.00 0.000 94.697
1-25-88 0 10.46 0.00 0.00 0.000 94.697
2-25-88 0 10.63 0.00 0.00 0.000 94.697
3-25-88 0 10.54 0.00 0.00 0.000 94.697
4-25-88 0.0000 10.47 0.00 0.00 0.000 94.697
5-25-88 0.0000 10.28 0.00 0.00 0.000 94.697
6-24-88 0 10.54 0.00 0.00 0.000 94.697
7-25-88 0 10.38 0.00 0.00 0.000 94.697
8-25-88 0 10.27 0.00 0.00 0.000 94.697
9-23-88 0 10.44 0.00 0.00 0.000 94.697
10-25-88 0 10.56 0.00 0.00 0.000 94.697
11-23-88 0 10.34 0.00 0.00 0.000 94.697
12-23-88 0 10.35 0.00 0.00 0.000 94.697
1-25-89 0.0000 10.41 0.00 0.00 0.000 94.697
2-24-89 0.0000 10.28 0.00 0.00 0.000 94.697
3-23-89 0.0000 10.20 0.00 0.00 0.000 94.697
4-25-89 0.0000 10.34 0.00 0.00 0.000 94.697
5-25-89 0.0000 10.56 0.00 0.00 0.000 94.697
6-23-89 0.0000 10.72 0.00 0.00 0.000 94.697
7-25-89 0 0 10.75 0.00 0.00 0.000 94.697
8-25-89 0.0000 10.63 0.00 0.00 0.000 94.697
9-25-89 0.0000 10.59 0.00 0.00 0.000 94.697
10-25-89 0.0000 10.77 0.00 0.00 0.000 94.697
11-27-89 0.0000 10.77 0.00 0.00 0.000 94.697
12-22-89 0.0000 10.79 0.00 0.00 0.000 94.697
12-28-89 0.0000 0 10.75 0.00 0.00 0.000 94.697
1-25-90 0.0000 10.52 0.00 0.00 0.000 94.697
2-25-90 0.0000 10.45 0.00 0.00 0.000 94.697
3-23-90 0.0000 10.47 0.00 0.00 0.000 94.697
4-25-90 0.0000 10.21 0.00 0.00 0.000 94.697
5-25-90 0.0000 10.46 0.00 0.00 0.000 94.697
6-25-90 0.0000 10.50 0.00 0.00 0.000 94.697
7-25-90 0.0730 10.54 6.91 0.00 0.656 95.353
8-25-90 0.0640 10.38 6.10 0.00 0.588 95.941
9-25-90 0.0650 10.41 6.24 0.00 0.599 96.540
10-25-90 0.0620 10.58 5.99 0.00 0.566 97.106
11-30-90 0.0780 10.68 7.57 0.00 0.709 97.815
12-31-90 0.0650 0.029 10.73 6.36 2.84 0.857 98.672
1-31-91 0.0590 10.75 5.82 0.00 0.541 99.213
2-28-91 0.0620 10.79 6.15 0.00 0.570 99.783
3-28-91 0.0560 10.80 5.59 0.00 0.518 100.301
4-30-91 0.0650 10.82 6.52 0.00 0.603 100.904
5-31-91 0.0590 10.80 5.95 0.00 0.551 101.455
6-30-91 0.0500 10.74 5.07 0.00 0.472 101.927
7-31-91 0.0580 0.05 10.75 5.91 5.10 1.024 102.951
8-31-91 0.0620 10.88 6.38 0.00 0.586 103.537 8-31-91 $10.88 $1,000
9-30-91 0.0500 11.00 5.18 0.00 0.471 104.008
10-31-91 0.0610 11.02 6.34 0.00 0.575 104.583
11-30-91 0.0560 11.07 5.86 0.00 0.529 105.112
12-31-91 0.0590 0.0410 11.28 6.20 4.31 0.932 106.044
1-31-92 0.0550 11.11 5.83 0.00 0.525 106.569
2-28-92 0.0530 11.09 5.65 0.00 0.509 107.078
3-31-92 0.0580 10.98 6.21 0.00 0.566 107.644
4-30-92 0.0540 11.02 5.81 0.00 0.527 108.171
5-31-92 0.0540 11.12 5.84 0.00 0.525 108.696
6-30-92 0.0630 11.20 6.85 0.00 0.612 109.308 6-30-92 $11.20 1,224.25
7-31-92 0.0690 11.38 7.54 0.00 0.663 109.971 7-31-92 $11.38 1,251.47
8-31-92 0.0500 11.40 5.50 0.00 0.482 110.453 8-31-92 $11.40 1,259.16 11.78%
9-30-92 0.0430 11.46 4.75 0.00 0.414 110.867 9-30-92 $11.48 1,270.54
10-30-92 0.0530 11.24 5.88 0.00 0.523 111.390 10-30-92 $11.24 1,252.02
11-30-92 0.0500 11.15 5.57 0.00 0.500 111,800 11-30-92 $11.15 1,247.57
31-Dec-92 0.0520 0.0750 11.22 5.82 8.39 1.266 113.156 31-Dec-92 $11.22 1,269.61
27-Jan-93 0.0500 0.0000 11.30 5.66 0.00 0.501 113.657 27-Jan-93 $11.33 1,287.73
24-Feb-93 0.0480 0.0000 11.50 5.46 0.00 0.475 114.132 24-Feb-93 $11.49 1,311.38
29-Mar-93 0.0450 0.0000 11.47 5.14 0.00 0.448 114.580 31-Mar-93 $11.48 1,315.38
28-Apr-93 0.0370 0.0000 11.39 4.24 0.00 0.372 114.952 30-Apr-93 $11.40 1,310.45
26-May-93 0.0420 0.0000 11.46 4.83 0.00 0.421 115.373 31-May-93 $11.43 1,318.71
28-Jun-93 0.0280 0.0000 11.60 3.23 0.00 0.278 115.651 30-Jun-93 $11.60 1,341.55
28-Jul-93 0.0320 0.2040 11.33 3.70 23.59 2.409 118.060 30-Jul-93 $11.36 1,341.16
31-Aug-93 0.0390 0.0000 11.64 4.60 0.00 0.395 118.455 31-Aug-93 $11.67 1,382.37
30-Sep-93 0.0280 0.0000 11.84 3.32 0.00 0.280 118.735 30-Sep-93 $11.77 1,397.51
31-Oct-93 0.0290 0.0000 11.76 3.44 0.00 0.293 119.028 31-Oct-93 $11.79 1,403.34
30-Nov-93 0.0340 0.0000 11.56 4.05 0.00 0.350 119.378 30-Nov-93 $11.56 1,380.01
29-Dec-93 0.0230 0.0630 11.58 2.75 7.52 0.887 120.265 29-Dec-93 $11.58 1,392.67
31-Dec-93 0.0000 0.0000 11.51 0.00 0.00 0.000 120.265 31-Dec-93 $11.51 1,384.25
27-Jan-94 0.0240 0.0000 11.61 2.89 0.00 0.249 120.514 27-Jan-94 $11.61 1,399.17
31-Jan-94 0.0000 0.0000 11.66 0.00 0.00 0.000 120.514 31-Jan-94 $11.66 1,405.19
24-Feb-94 0.0280 0.0000 11.37 3.37 0.00 0.296 120.810 24-Feb-94 $11.37 1,373.61
28-Feb-94 0.0000 0.0000 11.43 0.00 0.00 0.000 120.810 28-Feb-94 $11.43 1,380.86
29-Mar-94 0.0240 0.0000 11.24 2.90 0.00 0.258 121.068 29-Mar-94 $11.24 1,360.80
31-Mar-94 0.0000 0.0000 11.17 0.00 0.00 0.000 121.068 31-Mar-94 $11.17 1,352.33
30-Apr-94 0.0220 0.0000 11.15 2.66 0.00 0.239 121.307 30-Apr-94 $11.16 1,353.79
31-May-94 0.0330 0.0000 11.21 4.00 0.00 0.357 121.664 31-May-94 $11.19 1,361.42
30-Jun-94 0.0250 0.0000 11.12 3.04 0.00 0.273 121.937 30-Jun-94 $11.08 1,351.06
31-Jul-94 0.0250 0.1910 10.98 3.05 23.29 2.399 124.336 31-Jul-94 $11.09 1,378.89
31-Aug-94 0.0200 0.0000 11.24 2.49 0.00 0.222 124.558 31-Aug-94 $11.26 1,402.52
28-Sep-94 0.0250 0.0000 11.10 3.11 0.00 0.280 124.838 30-Sep-94 $11.05 1,379.46
27-Oct-94 0.0280 0.0000 11.01 3.50 0.00 0.318 125.156 31-Oct-94 $11.09 1,387.98
28-Nov-94 0.0350 0.0000 10.82 4.38 0.00 0.405 125.561 30-Nov-94 $10.81 1,357.31
28-Dec-94 0.0230 0.0000 10.90 2.89 0.00 0.265 125.826 31-Dec-94 $10.89 1,370.25
27-Jan-95 0.0310 0.0000 11.03 3.90 0.00 0.354 126.180 31-Jan-95 $11.05 1,394.29
24-Feb-95 0.0310 0.0000 11.28 3.91 0.00 0.347 126.527 28-Feb-95 $11.33 1,433.55
29-Mar-95 0.0270 0.0000 11.48 3.42 0.00 0.298 126.825 31-Mar-95 $11.46 1,453.41
26-Apr-95 0.0330 0.0000 11.69 4.19 0.00 0.358 127.183 28-Apr-95 $11.72 1,490.58
26-May-95 0.0380 0.0000 11.95 4.83 0.00 0.404 127.587 31-May-95 $12.05 1,537.42
28-Jun-95 0.0250 0.0000 12.29 3.19 0.00 0.260 127.847 30-Jun-95 $12.29 1,571.24
- --------- -------- ------- ----- ------- ----- ------ ------- --------- ------ -------- ---------- ----------
28-Jun-95 2.6900 0.6530 $293.53 75.04 33.15 127.85 30-Jun-95 12.29 1,571.24
========= ======== ======= ===== ======= ===== ====== ======= ========= ====== ======== ========== ==========
57.12%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Asset Allocation FUND-TOTAL RETURN-ALL DISTRIBUTIONS REINVESTED 3.00% SALES CHARGE
10 YEARS-MAXIMUM SALES CHARGE RATE OF RETURN = 9.0619%
- ------------------------------------------------------------------------------------------------------------------------------------
CAPITAL REINVEST- INITIAL
DIVIDEND GAINS MENT CAPITAL REINVESTED TOTAL BID DOLLAR INVESTMENT INVESTMENT
DATE PER SHARE PER SHARE PRICE DIVIDENDS GAINS SHARES SHARES DATE PRICE AMOUNT PRICE AMOUNT
- ---- --------- --------- ----- --------- ----- ------ ------ ---- ----- ------ ----- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INITIAL INVESTMENT $1,000 96.712 30-Jun-85 10.03 970.02 $10.34 $1,000
7-23-82 0.0000 7.98 0.00 0.00 0.000 96.712
8-25-82 0.0000 8.49 0.00 0.00 0.000 96.712
9-24-82 0.0000 8.49 0.00 0.00 0.000 96.712
10-25-82 0.0000 8.77 0.00 0.00 0.000 96.712
11-24-82 0.0000 8.98 0.00 0.00 0.000 96.712
12-23-82 0.0000 9.00 0.00 0.00 0.000 96.712
1-25-83 0.0000 9.13 0.00 0.00 0.000 96.712
2-25-83 0.0000 9.28 0.00 0.00 0.000 96.712
3-25-83 0.0000 9.28 0.00 0.00 0.000 96.712
4-25-83 0.0000 9.55 0.00 0.00 0.000 96.712
5-25-83 0.0000 9.62 0.00 0.00 0.000 96.712
6-24-83 0.0000 9.45 0.00 0.00 0.000 96.712 6-30-83 9.44 912.96 -5.88%
7-25-83 0.0000 9.36 0.00 0.00 0.000 96.712
8-25-83 0.0000 9.25 0.00 0.00 0.000 96.712
9-23-83 0.0000 9.40 0.00 0.00 0.000 96.712
10-25-83 0.0000 9.42 0.00 0.00 0.000 96.712
11-25-83 0.0000 9.41 0.00 0.00 0.000 96.712
12-23-83 0.0000 9.39 0.00 0.00 0.000 96.712
1-25-84 0.0000 9.46 0.00 0.00 0.000 96.712
2-24-84 0.0000 9.32 0.00 0.00 0.000 96.712
3-23-84 0.0000 9.10 0.00 0.00 0.000 96.712
4-25-84 0.0000 9.05 0.00 0.00 0.000 96.712
5-25-84 0.0000 8.71 0.00 0.00 0.000 96.712
6-25-84 0.0000 8.65 0.00 0.00 0.000 96.712 6-30-84 8.69 840.43 -7.94%
7-25-84 0.0000 8.85 0.00 0.00 0.000 96.712
8-24-84 0.0000 9.06 0.00 0.00 0.000 96.712
9-25-84 0.0000 9.08 0.00 0.00 0.000 96.712
10-25-84 0.0000 9.31 0.00 0.00 0.000 96.712
11-23-84 0.0000 9.52 0.00 0.00 0.000 96.712
12-24-84 0.0000 9.55 0.00 0.00 0.000 96.712
1-25-85 0.0000 9.68 0.00 0.00 0.000 96.712
2-25-85 0.0000 9.52 0.00 0.00 0.000 96.712
3-25-85 0.0000 9.50 0.00 0.00 0.000 96.712
4-25-85 0.0000 9.71 0.00 0.00 0.000 96.712
5-24-85 0.0000 9.96 0.00 0.00 0.000 96.712
6-25-85 0.0000 9.97 0.00 0.00 0.000 96.712 6-30-85 10.06 972.92 15.77%
7-25-85 0.0655 9.97 6.33 0.00 0.635 97.347
8-23-85 0.0701 9.98 6.82 0.00 0.683 98.030
9-25-85 0.0754 9.93 7.39 0.00 0.744 98.774
10-25-85 0.0687 9.91 6.79 0.00 0.685 99.459
11-25-85 0.0732 10.17 7.28 0.00 0.716 100.175
12-24-85 0.0629 10.52 6.30 0.00 0.599 100.774 12-31-85 10.50 1,058.13
1-24-86 0.0674 10.36 6.79 0.00 0.655 101.429
2-25-86 0.0760 10.83 7.71 0.00 0.712 102.141
3-25-86 0.0625 11.03 6.38 0.00 0.578 102.719
4-25-86 0.0654 11.16 6.72 0.00 0.602 103.321
5-23-86 0.0646 10.99 6.67 0.00 0.607 103.928
6-25-86 0.0680 11.16 7.07 0.00 0.634 104.562 6-30-86 11.14 1,164.82 19.72%
7-25-86 0.0659 11.12 6.89 0.00 0.620 105.182
8-25-86 0.0629 11.26 6.62 0.00 0.588 105.770
9-25-86 0.0644 11.01 6.81 0.00 0.619 106.389
10-24-86 0.0597 11.08 6.35 0.00 0.573 106.962
11-24-86 0.0659 11.14 7.05 0.00 0.633 107.595
12-23-86 0.0578 11.14 6.22 0.00 0.558 108.153
1-23-87 0.0579 11.25 6.26 0.00 0.556 108.709
2-24-87 0.0642 11.35 6.98 0.00 0.615 109.324
3-25-87 0.0552 11.39 6.03 0.00 0.529 109.853
4-24-87 0.0579 10.68 6.36 0.00 0.596 110.449
5-22-87 0.0562 10.66 6.21 0.00 0.583 111.032
6-25-87 0.0614 10.83 6.82 0.00 0.630 111.662 6-30-87 10.84 1,210.42 3.91%
7-24-87 0.0569 10.77 6.35 0.00 0.590 112.252
7-29-87 0.2631 10.58 0.00 29.53 2.791 115.043
8-25-87 0.0632 10.65 7.27 0.00 0.683 115.726
9-25-87 0.0586 10.39 6.78 0.00 0.653 116.379
10-23-87 0.0550 10.08 6.40 0.00 0.635 117.014
11-25-87 0.0697 10.31 8.16 0.00 0.791 117.805
12-24-87 0.0586 10.25 6.90 0.00 0.673 118.478
1-25-88 0.0567 10.46 6.72 0.00 0.642 119.120
2-25-87 0.0674 10.63 8.03 0.00 0.755 119.875
3-25-88 0.0571 10.54 6.84 0.00 0.649 120.524 3-31-88 10.48 1,263.09
4-25-88 0.0540 10.47 6.51 0.00 0.622 121.146 4-30-88 10.44 1,264.76
5-25-88 0.0690 10.28 8.36 0.00 0.813 121.959 5-31-88 10.33 1,259.84
6-24-88 0.0569 10.54 6.94 0.00 0.658 122.617 6-30-88 10.51 1,288.70 6.47%
7-25-88 0.0566 10.38 6.94 0.00 0.669 123.286 7-31-88 10.41 1,283.41
8-25-88 0.0675 10.27 8.32 0.00 0.810 124.096 8-31-88 10.33 1,281.91
9-23-88 0.0533 10.44 6.61 0.00 0.633 124.729 9-30-88 10.48 1,307.16
10-25-88 0.0647 10.56 8.07 0.00 0.764 125.493 10-31-88 10.58 1,327.72
11-23-88 0.0592 10.34 7.43 0.00 0.719 126.212 11-30-88 10.37 1,308.82
12-30-88 0.0566 10.35 7.14 0.00 0.690 126.902 12-31-88 10.33 1,310.90
1-25-89 0.0630 10.41 7.99 0.00 0.768 127.670 1-31-89 10.45 1,334.15
2-24-89 0.0630 10.28 8.04 0.00 0.782 128.452 2-28-89 10.30 1,323.06
3-23-89 0.0660 10.20 8.48 0.00 0.831 129.283 3-31-89 10.25 1,325.15
4-25-89 0.0670 10.34 8.66 0.00 0.838 130.121 4-30-89 10.41 1,354.56
5-25-89 0.0650 10.56 8.46 0.00 0.801 130.922 5-31-89 10.60 1,387.77
6-23-89 0.0660 10.72 8.64 0.00 0.806 131.728 6-30-89 10.80 1,422.66 10.39%
7-25-89 0.0666 0.1274 10.75 8.77 16.78 2.377 134.105 7-31-89 10.86 1,456.38
8-25-89 0.0720 10.63 9.66 0.00 0.909 135.014 8-31-89 10.63 1,435.20
9-25-89 0.0630 10.59 8.51 0.00 0.804 135.818 9-31-89 10.59 1,438.31
10-25-89 0.0630 10.77 8.56 0.00 0.795 136.613 10-31-89 10.76 1,469.96
11-27-89 0.0640 10.77 8.74 0.00 0.812 137.425 11-30-89 10.77 1,480.07
12-22-89 0.0580 10.79 7.97 0.00 0.739 138.164
12-28-89 0.0150 10.75 0.00 2.07 0.193 138.357 12-31-89 10.75 1,487.34
1-25-90 0.0650 10.52 8.99 0.00 0.855 139.212 1-31-90 10.51 1,463.12
2-25-90 0.0670 10.45 9.33 0.00 0.893 140.105 2-28-90 10.50 1,471.10
3-25-90 0.0560 10.47 7.85 0.00 0.750 140.855 3-31-90 10.41 1,466.30
4-25-90 0.0670 10.21 9.44 0.00 0.925 141.780 4-30-90 10.19 1,444.74
5-25-90 0.0660 10.46 9.36 0.00 0.895 142.675 5-31-90 10.50 1,498.09
6-25-90 0.0600 10.50 8.56 0.00 0.815 143.490 6-30-90 10.56 1,515.25 6.51%
7-25-90 0.0730 10.54 10.47 0.00 0.993 144.483 7-31-90 10.62 1,534.41
8-24-90 0.0640 10.38 9.25 0.00 0.891 145.374 8-31-90 10.46 1,520.61
9-25-90 0.0650 10.41 9.45 0.00 0.908 146.282 9-30-90 10.49 1,534.50
10-25-90 0.0620 10.58 9.07 0.00 0.857 147.139 10-31-90 10.58 1,556.73
11-30-90 0.0780 10.68 11.48 0.00 1.075 148.214 11-30-90 10.68 1,582.93
12-31-90 0.0650 0.0290 10.73 9.63 4.30 1.298 149.512 12-31-90 10.73 1,604.26
1-31-91 0.0590 10.75 8.82 0.00 0.820 150.332 1-31-91 10.75 1,616.07
2-28-91 0.0620 10.79 9.32 0.00 0.864 151.196 2-28-91 10.79 1,631.40
3-28-91 0.0560 10.80 8.47 0.00 0.784 151.980 3-31-91 10.80 1,641.38
4-30-91 0.0650 10.82 9.88 0.00 0.913 152.893 4-30-91 10.82 1,654.30
5-31-91 0.0590 10.80 9.02 0.00 0.835 153.728 5-31-91 10.80 1,660.26
6-30-91 0.0500 10.74 7.69 0.00 0.716 154.444 6-30-91 10.74 1,658.73 9.47%
7-31-91 0.0580 0.0500 10.75 8.96 7.72 1.552 155.996 7-31-91 10.75 1,676.96
8-31-91 0.0620 10.88 9.67 0.00 0.889 156.885 8-31-91 10.88 1,706.91
9-30-91 0.0500 11.00 7.84 0.00 0.713 157.598 9-30-91 11.00 1,733.58
10-31-91 0.0610 11.02 9.61 0.00 0.872 158.470 10-31-91 11.02 1,746.34
11-30-91 0.0560 11.07 8.87 0.00 0.801 159.271 11-30-91 11.07 1,763.13
12-31-91 0.0590 0.0410 11.28 9.40 6.53 1.412 160.683 12-31-91 11.28 1,812.50
1-31-92 0.0550 11.11 8.84 0.00 0.796 161.479 1-31-92
2-28-92 0.0530 11.09 8.56 0.00 0.772 162.251 2-28-92
3-31-92 0.0580 10.98 9.41 0.00 0.857 163.108 3-31-92
4-30-92 0.0540 11.02 8.81 0.00 0.799 163.907 4-30-92
5-31-92 0.0540 11.12 8.85 0.00 0.796 164.703 5-31-92
6-30-92 0.0630 11.20 10.38 0.00 0.927 165.630 6-30-92 11.20 1,855.06 11.84%
7-31-92 0.0690 11.38 11.43 0.00 1.004 166.634 7-31-92 11.38 1,896.29
8-31-92 0.0500 11.40 8.33 0.00 0.731 167.365 8-31-92 11.40 1,907.96
9-30-92 0.0430 11.46 7.20 0.00 0.628 167.993 9-30-92 11.46 1,925.20
10-30-92 0.0530 11.24 8.90 0.00 0.792 168.785 10-30-92 11.24 1,897.14
11-30-92 0.0500 11.15 8.44 0.00 0.757 169.542 11-30-92 11.15 1,890.39
31-Dec-92 0.0520 0.0750 11.22 8.82 12.72 1.920 171.462 31-Dec-92 11.22 1,923.80
31-Jan-93 0.0500 11.30 8.57 0.00 0.758 172.220 31-Jan-93 11.33 1,951.25
24-Feb-93 0.0480 11.50 8.27 0.00 0.719 172.939 24-Feb-93 11.49 1,987.07
26-Mar-93 0.0450 11.47 7.78 0.00 0.678 173.617 31-Mar-93 11.48 1,993.12
28-Apr-93 0.0370 11.39 6.42 0.00 0.564 174.181 30-Apr-93 11.40 1,985.66
26-May-93 0.0420 11.46 7.32 0.00 0.639 174.820 31-May-93 11.43 1,998.19 9.54%
28-Jun-93 0.0280 11.60 4.89 0.00 0.422 175.242 30-Jun-93 11.60 2,032.81 6.54% 9.58%
28-Jul-93 0.0320 0.204 11.33 5.61 35.75 3.650 178.892 30-Jul-93 11.36 2,032.21 9.63%
31-Aug-93 0.0390 0.000 11.64 6.98 0.00 0.600 179.492 31-Aug-93 11.67 2,094.67 10.32%
30-Sep-93 0.0280 0.000 11.84 5.03 0.00 0.425 179.917 30-Sep-93 11.77 2,117.62 10.13%
31-Oct-93 0.0290 0.000 11.76 5.22 0.00 0.444 180.361 31-Oct-93 11.79 2,126.46 9.88%
30-Nov-93 0.0340 0.000 11.56 6.13 0.00 0.530 180.891 30-Nov-93 11.56 2,091.10 9.82%
29-Dec-93 0.0230 0.063 11.58 4.16 11.40 1.344 182.235 29-Dec-93 11.58 2,110.28 9.99%
31-Dec-93 0.0000 0.000 11.51 0.00 0.00 0.000 182.235 31-Dec-93 11.51 2,097.52 9.86% 3.18%
27-Jan-94 0.0240 0.000 11.61 4.37 0.00 0.376 182.611 27-Jan-94 11.61 2,120.11 9.71% 4.33%
31-Jan-94 0.0000 0.000 11.66 0.00 0.00 0.000 182.611 31-Jan-94 11.66 2,129.24 9.98% 1.65%
24-Feb-94 0.0280 0.000 11.37 5.11 0.00 0.449 183.060 24-Feb-94 11.37 2,081.39 9.45% -1.71%
28-Feb-94 0.0000 0.000 11.43 0.00 0.00 0.000 183.060 28-Feb-94 11.43 2,092.38 9.09% -1.60%
29-Mar-94 0.20 0.000 11.24 4.39 0.00 0.391 183.451 29-Mar-94 11.24 2,061.99 8.24% -1.39%
31-Mar-94 0.0000 0.000 11.17 0.00 0.00 0.000 183.451 31-Mar-94 11.17 2,049.15 7.57% -2.90%
30-Apr-94 0.0220 0.000 11.15 4.04 0.00 0.362 183.813 30-Apr-94 11.16 2,051.35 7.09% -2.20%
31-May-94 0.0330 0.000 11.21 6.07 0.00 0.541 184.354 31-May-94 11.19 2,062.92 7.53% -2.70%
30-Jun-94 0.0250 0.000 11.12 4.61 0.00 0.415 184.769 30-Jun-94 11.08 2,047.24 7.32% -3.85%
31-Jul-94 0.0250 0.191 10.98 4.62 35.29 3.635 188.404 31-Jul-94 11.09 2,089.40 7.29% 0.38%
31-Aug-94 0.0200 0.000 11.24 3.77 0.00 0.335 188.739 31-Aug-94 11.26 2,125.20 8.17% 1.57%
28-Sep-94 0.0250 0.000 11.10 4.72 0.00 0.425 189.164 30-Sep-94 11.05 2,090.26 7.76% 1.37%
27-Oct-94 0.0280 0.000 11.01 5.30 0.00 0.481 189.645 31-Oct-94 11.09 2,103.16 7.43% 2.64%
28-Nov-94 0.0350 0.000 10.82 6.64 0.00 0.614 190.259 30-Nov-94 10.81 2,056.70 6.80% 0.26%
28-Dec-94 0.0230 0.000 10.90 4.38 0.00 0.402 190.661 31-Dec-94 10.89 2,076.30 6.90% 1.42%
27-Jan-95 0.0310 0.000 11.03 5.91 0.00 0.536 191.197 31-Jan-95 11.05 2,112.73 7.62% 1.12%
24-Feb-95 0.0310 0.000 11.28 5.93 0.00 0.526 191.723 28-Feb-95 11.33 2,172.22 8.11% 2.21%
29-Mar-95 0.0270 0.000 11.48 5.18 0.00 0.451 192.174 31-Mar-95 11.46 2,202.31 8.48% 5.36%
26-Apr-95 0.0330 0.000 11.69 6.34 0.00 0.542 192.716 28-Apr-95 11.72 2,258.63 9.35% 7.39%
26-May-95 0.0380 0.000 11.95 7.32 0.00 0.613 193.329 31-May-95 12.05 2,329.61 9.23% 13.27%
28-Jun-95 0.0250 0.000 12.29 4.83 0.00 0.393 193.722 30-Jun-95 12.29 2,380.84 9.46% 14.67%
- --------- ------ --------- ------ ------ ------ ------ ------- --------- ------ -------- ----- --------
34,878.00 6.4777 1.0585 891.41 162.09 97.010 193.72 34,880.00 12.29 2,380.84
========= ====== ========= ====== ====== ====== ====== ======= ========= ====== ========= ===== ========
</TABLE>
<PAGE>
Illinois Agricultural Association and Affiliated Companies
as of June 30, 1995
*ILLINOIS AGRICULTURAL ASSOCIATION
|
___________________|__________
| | |
| | |
| 1. Country 7. Illinois 12. AgriVisor
| Mutual ___ __ Agricultural ___ __ Services,
| Insurance | | Holding Co. | Inc.
| Company | | |
| | | | |
| | | | |
| 2. Country | | 8. Illinois | 13. IAA Com-
| Casualty | |__ Agricultural |__ munications
| Insurance | | Service | Company
| Company | | Company |________
| | | |
| | | |
| 3. Country | |__9. Country Life 14. IAA Trust
| Preferred __| __ Insurance Company
| Insurance | | Company
| Company | | |
| | | |___________
| | | |
| 4. IAA Trust | | 10. Country | 15. IAA Trust
| Tax Exempt__| |__ Capital |__ Asset
| Bond Fund, | | Management | Allocation
| Inc. | | Company | Fund, Inc.
| | | |
| | | |
| 5. CC Ser- | | 11. Country | 16. IAA Trust
|__ vices, _____|__|__ Investors |__ Growth
Inc. Life Assur- | Fund, Inc.
| ance Co. |
| |
6. Mid-America Services of Alaska, Inc. | 17. IAA Trust
Mid-America Services of Arizona, Inc. |__ Money
Mid-America Services of Arkansas, Inc. Market
Mid-America Financial Corporation Fund, Inc.
of Colorado, Inc.
Mid-America Services of Kansas, Inc.
M-A Services Corporation of
Minnesota, Inc.
Mid-America Services of Missouri, Inc.
Mid-America Services of Nevada, Inc.
Mid-America Services of New Mexico, Inc.
Mid-America Brokerage, Inc. (Oklahoma)
Mid-America Services of Oregon, Inc.
Mid-America Services of Utah, Inc.
Mid-America Services of Washington, Inc.
*ILLINOIS AGRICULTURAL ASSOCIATION
|
____________________________|___________________
| | | |
| | | |
__18. Prairie Farms__ 26. Illinois Milk | 32. **GROWMARK, Inc.____
| Dairy, Inc. | Producers | |
| | Association | |
| | | 33. FS Credit _________|
| 19. Muller- | | Corporation |
| Pinehurst ____| 27. Interstate | |
| Dairy, Inc. | Producers _____| |
| | Livestock | 34. Mid-Co Com- _______|
| | Association | modities, Inc. |
| 20. East Side | | | |
| Jersey ____| | | |
| Dairy, Inc. 28. Illinois | 35. FS Consolidated ____|
| Livestock | Feeds, Inc. |
| Marketing | |
| 21. Ice Cream Company | |
|__ Specialities, | 36. FS Farmco, Inc._____|
| Inc. | | |
| 29. IAA Federal ____| | |
| Credit Union | 37. Lakeland FS, Inc. |
|__22. ABC Corp. | |
| | |
| 30. Illinois | 38. Illinois Feed |
|__23. P.F.D. Supply Agricultural ___| Manufacturing ______|
| Corporation Auditing | Company |
| | Association | |
| | | |
| 24. Mo-Kan 31. IAA Recreation__| 39. Four Seasons _______|
| Express, Inc. Association FS, Inc. |
| |
| |
|__25. GMS Transpor- 40. Southwest FS, Inc.__|
tation Co. |
|
41. 1105433 Ontario ____|
Inc.
|
|
42. UCO Petroleum,
Inc.
1. Organized in Illinois as a mutual insurance company. Proxy control in
Illinois Agricultural Association.
2. Organized in Illinois as a stock insurance company. 100% of voting
securities owned by Country Mutual Insurance Company.
3. Organized in Missouri as a stock insurance company. 100% of voting
securities owned by Country Mutual Insurance Company.
4. Organized in Maryland as a mutual fund under the General Corporation Law.
11.02% of voting securities owned by Country Mutual Insurance Company.
5. Organized in Illinois as a business corporation. 71.4% of voting securities
owned by Illinois Agricultural Association; 17.1% of voting securities owned
by Country Mutual Insurance Company; 11.4% of voting securities owned by
Country Life Insurance Company.
6. Organized as a business corporation in the state indicated. 100% of voting
securities of each company owned by CC Services, Inc.
7. Organized in Illinois under the General Corporation Act. 98.3% of voting
securities owned by Illinois Agricultural Association.
8. Organized in Illinois as a business corporation. 100% of voting securities
owned by Illinois Agricultural Holding Co.
9. Organized in Illinois as a stock insurance company. 99.99% of voting
securities owned by Illinois Agricultural Holding Co.
10. Organized in Illinois as a business corporation. 100% of voting securities
owned by Country Life Insurance Company.
11. Organized in Illinois as a stock insurance company. 100% of voting
securities owned by Country Life Insurance Company.
12. Organized in Illinois under the General Corporation Act. 100% of voting
securities owned by Illinois Agricultural Holding Co.
13. Organized in Illinois as a business corporation. 100% of voting security
owned by Illinois Agricultural Holding Co.
14. Organized in Illinois as a business corporation. 100% of voting securities
owned by Illinois Agricultural Holding Co.
15. Organized in Maryland as a mutual fund under the General Corporation Law.
31.94% of voting securities owned by Country Life Insurance Company. 51.06%
of the securities owned of record by IAA Trust Company.
16. Organized in Maryland as a mutual fund under the General Corporation Law.
10.60% of voting securities owned by Country Life Insurance Company. 36.46%
of the voting securities owned of record by IAA Trust Company.
17. Organized in Maryland as a mutual fund under the General Corporation Law.
6.89% of voting securities owned by Country Life Insurance Company. 81.45%
of the voting securities owned of record by IAA Trust Company.
18. Organized in Illinois as an agricultural cooperative. 37.4% of voting
securities owned by Illinois Agricultural Association.
19. Organized in Illinois as a business corporation. 50% of voting securities
owned by Prairie Farms Dairy, Inc.
20. Organized in Indiana as a business corporation. 100% of voting securities
owned by Prairie Farms Dairy, Inc.
21. Organized in Missouri as a business corporation. 100% of voting securities
owned by Prairie Farms Dairy, Inc.
22. Organized in Missouri as a business corporation. 100% of voting securities
owned by Prairie Farms Dairy, Inc.
23. Organized in Illinois as a business corporation. 100% of voting securities
owned by Prairie Farms Dairy, Inc.
24. Organized in Kansas as a business corporation. 50% of voting securities
owned by P.F.D. Supply Corporation.
25. Organized in Illinois as a business corporation. 100% of voting securities
owned by Prairie Farms Dairy, Inc.
26. Organized in Illinois as an agricultural cooperative. 44.4% of voting
securities owned by Illinois Agricultural Association.
27. Organized in Illinois as an agricultural cooperative. 34.8% of voting
securities owned by Illinois Agricultural Association.
28. Organized in Illinois as a business corporation. 100% of voting securities
owned by Interstate Producers Livestock Association.
29. Organized as a Federal Credit Union. No corporate control. Membership
control in Illinois Agricultural Association and certain affiliated
companies.
30. Organized in Illinois as an agricultural cooperative. 48.9% of voting
securities owned by Illinois Agricultural Association.
31. Organized in Illinois as a not-for-profit association. Membership control in
Illinois Agricultural Association and certain affiliated companies.
32. Organized in Delaware under the General Corporation Act. 27.8% of voting
securities owned by Illinois Agricultural Association.
33. Organized in Illinois as an agricultural cooperative. 99.8% of voting
securities owned by GROWMARK, Inc.
34. Organized in Delaware under the General Corporation Act. 98.9% of voting
securities owned by GROWMARK, Inc.
35. Organized in Delaware under the General Corporation Act. 89.7% of voting
securities owned by GROWMARK, Inc.
36. Organized in Delaware under the General Corporation Act. 100% of voting
securities owned by GROWMARK, Inc.
37. Organized in Illinois as an agricultural cooperative. 47.6% of voting
securities owned by FS Farmco, Inc.
38. Organized in Delaware under the General Corporation Act. 50% of voting
securities owned by GROWMARK, Inc.
39. Organized in Delaware under the General Corporation Act. 100% of voting
securities owned by GROWMARK, Inc.
40. Organized in Delaware under the General Corporation Act. 100% of voting
securities owned by GROWMARK, Inc.
41. Organized in Ontario under the Business Corporation Act. 100% of voting
securities owned by GROWMARK, Inc.
42. Organized in Ontario under the Business Corporation Act. 50% of voting
securities owned by 1105433 Ontario Inc.
- ------------
* Organized in Illinois as a not-for-profit corporation. No voting securities.
No person controls it.
** GROWMARK, Inc. owns more than 25% of the outstanding voting securities in
approximately 70 of its Illinois and Iowa member companies.
