1933 Act Registration No. 2-74747
1940 Act Registration No. 811-3313
As filed with the Securities and Exchange Commission on January 22, 1996
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. 22 [x]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 [x]
Amendment No. 22
FIRST AMERICAN FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
680 EAST SWEDESFORD ROAD, WAYNE, PENNSYLVANIA 19087
(Address of Principal Executive Offices) (Zip Code)
(610) 254-1924
(Registrant's Telephone Number, including Area Code)
DAVID LEE
C/O SEI CORPORATION, 680 EAST SWEDESFORD ROAD, WAYNE, PENNSYLVANIA 19087
(Name and Address of Agent for Service)
Copies to:
Kathryn Stanton, Esq. Michael J. Radmer, Esq.
SEI Corporation James D. Alt, Esq.
680 East Swedesford Road Dorsey & Whitney
Wayne, Pennsylvania 19087 220 South Sixth Street
Minneapolis, Minnesota 55402
It is proposed that this filing shall become effective (check appropriate box):
[ ] immediately upon filing pursuant to paragraph (b) of rule 485
[x] on January 31, 1996 pursuant to paragraph (b) of rule 485
[ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485
[ ] on (date) pursuant to paragraph (a)(1) of Rule 485
[ ] 75 days after filing pursuant to paragraph (a)(2) of Rule 485
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485
Registrant has registered an indefinite number or amount of securities under the
Securities Act of 1933 pursuant to Rule 24f-2 under the Investment Company Act
of 1940. A Rule 24f-2 Notice was filed with the Securities and Exchange
Commission on November 14, 1995.
EXPLANATORY NOTE
This Registration Statement contains three Prospectuses (Parts A) and
one Statement of Additional Information (Part B) relating to the three series of
First American Funds, Inc. (the "Registrant"). One Prospectus relates to the
Class A and Class B Shares of Series B of the Registrant (referred to in the
Prospectus and the Statement of Additional Information as "Prime Obligations
Fund"). The second Prospectus relates to the Class C Shares of Series C of the
Registrant (referred to in the Prospectus and the Statement of Additional
Information as "Government Obligations Fund"), Series D of the Registrant
(referred to in the Prospectus and the Statement of Additional Information as
"Treasury Obligations Fund") and Prime Obligations Fund. The third Prospectus
relates to the Class D Shares of Prime Obligations Fund, Government Obligations
Fund and Treasury Obligations Fund. The Statement of Additional Information
relates to all three prospectuses. The Cross Reference Sheet, Part C, Signature
Page, and exhibits contained in this Registration Statement relate only to the
Registrant.
FIRST AMERICAN FUNDS, INC.
CROSS REFERENCE SHEET FOR ITEMS REQUIRED BY FORM N-1A
CLASS A AND CLASS B SHARES PROSPECTUS
<TABLE>
<CAPTION>
PART A
ITEM NO. CAPTION IN PROSPECTUS
<S> <C>
1 Cover Page
2 Summary of Fund Expenses
3 Financial Highlights; Calculation of Performance Data
4 The Funds; Investment Objective and Policies
5 Management of the Fund; Distributor; Investment Objective and Policies
5A Not Applicable
6 The Fund; Investing in the Funds; Taxes
7 Distributor; Investing in the Funds; Redeeming Shares; Determining the Price of Shares
8 Redeeming Shares
9 Not Applicable
CLASS C SHARES PROSPECTUS
PART A
ITEM NO. CAPTION IN PROSPECTUS
1 Cover Page
2 Summary of Fund Expenses
3 Financial Highlights; Calculation of Performance Data
4 The Funds; Investment Objective and Policies
5 Management of the Funds; Distributor; Investment Objective and Policies
5A Not Applicable
6 The Funds; Purchase and Redemption of Shares; Taxes
7 Distributor; Purchase and Redemption of Shares; Determining the Price of Shares
8 Purchase and Redemption of Shares
9 Not Applicable
CLASS D SHARES PROSPECTUS
PART A
ITEM NO. CAPTION IN PROSPECTUS
1 Cover Page
2 Summary of Fund Expenses
3 Financial Highlights; Calculation of Performance Data
4 The Funds; Investment Objective and Policies
5 Management of the Funds; Distributor; Investment Objective and Policies
5A Not Applicable
6 The Funds; Purchase and Redemption of Shares; Taxes
7 Distributor; Purchase and Redemption of Shares; Determining the Price of Shares
8 Purchase and Redemption of Shares
9 Not Applicable
COMBINED STATEMENT OF ADDITIONAL INFORMATION
PART B
ITEM NO. CAPTION IN STATEMENT OF ADDITIONAL INFORMATION
10 Cover Page
11 Table of Contents
12 General Information
13 Investment Restrictions
14 Directors and Executive Officers
15 Capital Stock
16 Investment Advisory and Other Services
17 Portfolio Transactions
18 Not Applicable
19 Net Asset Value and Public Offering Price; Valuation of Portfolio Securities
20 Taxes
21 Investment Advisory and Other Services
22 Calculation of Performance Data
23 Financial Statements
</TABLE>
FIRST AMERICAN FUNDS, INC.
First American Funds, Inc.
MONEY MARKET FUND
RETAIL CLASSES
PRIME OBLIGATIONS FUND
PROSPECTUS
JANUARY 31, 1996
[logo] FIRST AMERICAN FUNDS
The power of disciplined investing
FIRST AMERICAN FUNDS, INC.
680 East Swedesford Road, Wayne, Pennsylvania 19087
RETAIL CLASSES PROSPECTUS
The shares described in this Prospectus represent interests in First
American Funds, Inc., which consists of mutual funds with three different
investment portfolios and objectives. This Prospectus relates to the Class
A and Class B Shares of the following fund (the "Fund"):
* PRIME OBLIGATIONS FUND
The Fund seeks to achieve maximum current income to the extent consistent
with the preservation of capital and maintenance of liquidity. The Fund
pursues this objective by investing in a variety of money market
instruments maturing within 397 days. The Fund is a diversified open-end
mutual fund.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, INCLUDING FIRST BANK NATIONAL ASSOCIATION OR ANY OF
ITS AFFILIATES, NOR ARE THEY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. AN INVESTMENT
IN THE FUND INVOLVES INVESTMENT RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
This Prospectus sets forth concisely information about the Fund that a
prospective investor should know before investing. It should be read and
retained for future reference.
A Statement of Additional Information dated January 31, 1996 for the Fund
has been filed with the Securities and Exchange Commission and is
incorporated in its entirety by reference in this Prospectus. To obtain
copies of the Statement of Additional Information at no charge, or to
obtain other information or make inquiries about the Fund, call (800)
637-2548 or write SEI Financial Services Company, 680 East Swedesford Road,
Wayne, Pennsylvania 19087.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE UNITED
STATES GOVERNMENT, AND THERE IS NO ASSURANCE THAT THE FUND WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is January 31, 1996.
TABLE OF CONTENTS
PAGE
SUMMARY OF FUND EXPENSES 4
Class A and Class B Share Fees and
Expenses 4
Information Concerning Fees and
Expenses 5
FINANCIAL HIGHLIGHTS 6
THE FUND 8
INVESTMENT OBJECTIVE AND POLICIES 8
MANAGEMENT OF THE FUND 9
Investment Adviser 9
Portfolio Managers 10
Custodian 11
Administrator 11
Transfer Agent 11
DISTRIBUTOR 11
PORTFOLIO TRANSACTIONS 13
INVESTING IN THE FUND 14
Share Purchases 14
Minimum Investment Required 15
Alternative Purchase Options 15
Systematic Investment Program 16
Systematic Exchange Program 17
Certificates and Confirmations 17
Dividends and Distributions 17
Exchange Privilege 18
REDEEMING SHARES 19
By Telephone 19
By Mail 20
By Checking Account 21
By Systematic Withdrawal Program 21
Redemption Before Purchase
Instruments Clear 21
Accounts with Low Balances 21
DETERMINING THE PRICE OF SHARES 22
TAXES 22
FUND SHARES 23
CALCULATION OF PERFORMANCE DATA 23
INVESTMENT RESTRICTIONS AND TECHNIQUES 24
General 24
Loan Participations; Section 4(2) and
Rule 144A Securities 26
Securities of Foreign Banks and
Branches 26
United States Government Securities 27
Repurchase Agreements 28
Credit Enhancement Agreements 28
Lending of Portfolio Securities 28
When-Issued and Delayed Delivery
Securities 29
Money Market Funds 29
SUMMARY OF FUND EXPENSES
CLASS A AND CLASS B SHARE FEES AND EXPENSES
CLASS A CLASS B
SHAREHOLDER TRANSACTION EXPENSES
Maximum sales load imposed on purchases None None
Maximum sales load imposed on reinvested
dividends None None
Maximum contingent deferred sales charge
(as a percentage of original purchase
price or redemption proceeds, as
applicable)(1) None 5.00%
Redemption fees None None
Exchange fees None None
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
Investment advisory fees (after voluntary
fee waivers and reimbursements)(2) 0.28% 0.28%
Rule 12b-1 fees 0.25% 1.00%
Other expenses (after voluntary fee
waivers and reimbursements)(2) 0.17% 0.17%
Total fund operating expenses
(after voluntary fee waivers and
reimbursements)(2) 0.70% 1.45%
EXAMPLE(3)
You would pay the following expenses on a $1,000 investment, assuming (i) a 5%
annual return, (ii) redemption at the end of each time period for Class B Shares
with the payment of the maximum applicable contingent deferred sales charge of
5% in year 1, 4% in year 3, 2% in year 5 and automatic conversion to Class A
Shares at the end of year 8 (column 2), and (iii) no redemption of Class B
Shares (column 3):
CLASS B CLASS B
(ASSUMING (ASSUMING NO
CLASS A REDEMPTION) REDEMPTION)
1 year $ 7 $ 65 $ 15
3 years $22 $ 86 $ 46
5 years $39 $ 99 $ 79
10 years $87 $153 $153
(1) Class B Shares of the Fund are only available pursuant to an exchange for
Class B Shares of another fund in the First American family or pursuant to
a systematic exchange program for the purchase of Class B Shares of such
other fund. The deferred sales charge applied to Class B Shares of the Fund
at the time of redemption will be equal to the deferred sales charge that
would have been applied to the shares of such other fund. Currently, the
maximum deferred sales charge on such shares is 5.00%.
(2) First Bank National Association, the investment adviser for the Fund,
intends to waive a portion of its fees and/or reimburse expenses on a
voluntary basis, and the amounts shown above reflect these waivers and
reimbursements as of the date of this Prospectus. The Fund's investment
adviser intends to maintain such waivers and reimbursements for the current
fiscal year but reserves the right to terminate its waiver and to
discontinue expense reimbursement at any time thereafter in its sole
discretion. Absent any fee waivers, investment advisory fees for the Fund
as an annualized percentage of average daily net assets would be 0.40%; and
total fund operating expenses calculated on such basis would be 0.82% for
Class A Shares and 1.57% for Class B Shares. Other expenses include an
annual administration fee.
(3) Absent the voluntary reduction of fees the dollar amounts for the 1, 3, 5,
and 10 year periods in the example above would be as follows: Class A, $8,
$26, $46 and $101; and Class B (assuming redemption), $66, $90, $106 and
$166 and Class B (assuming no redemption), $16, $50, $86 and $166.
INFORMATION CONCERNING FEES AND EXPENSES
The purpose of the preceding table is to assist the investor in understanding
the various costs and expenses that an investor in the Fund may bear directly or
indirectly. THE DATA CONTAINED IN THE TABLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR
LESS THAN THOSE SHOWN. The information set forth in the tables relates only to
the Class A and Class B Shares of the Fund. The Fund also offers Class C and
Class D Shares.
Investment advisory fees are paid by the Fund to First Bank National Association
(the "Adviser") for managing its investments. The examples in the above table
are based on projected annual operating expenses for the Fund after voluntary
fee waivers and expense reimbursements by the Adviser. Prior to fee waivers,
investment advisory fees accrue at the annual rate of 0.40% of the average daily
net assets of the Fund. Other expenses include administrative fees which are
paid by the Fund to SEI Financial Management Corporation (the "Administrator")
for providing various services necessary to operate the Fund. These include
shareholder servicing and certain accounting and other services. The
Administrator provides these services for a fee
calculated as described under "Management of the Fund -- Administrator"
below.
The Class A Shares of the Fund may pay a distribution and servicing fee to the
Distributor in an amount equalling 0.25% of the annual average daily net assets
attributable to the Class A Shares, and the Class B Shares of each Fund bear
distribution and servicing fees totaling 1.00% of the annual average daily net
assets attributable to the Class B Shares. Due to the payment of such fees by
the Class A and Class B Shares of the Fund, long-term shareholders may pay more
than the equivalent of the maximum front-end sales charges otherwise permitted
by NASD rules. Class B Shares are also subject to a contingent deferred sales
charge as described below under "Purchase of Shares -- Alternative Purchase
Options."
FINANCIAL HIGHLIGHTS
The following financial highlights have been audited by KPMG Peat Marwick, LLP,
independent auditors, and should be read in conjunction with the Fund's
financial statements and the related notes thereto appearing in its Annual
Report to Shareholders for the year ended September 30, 1995.
The information set forth below shows performance for Class A, Class B and Class
C Shares. Class C performance is included for historical purposes only. The
respective classes of shares are each subject to different expenses and, in the
case of Class A and Class B, different sales charges.
For the periods ended September 30,
For a share outstanding throughout the period
NET
NET ASSET DIVIDENDS ASSET
VALUE NET FROM NET VALUE
BEGINNING INVESTMENT INVESTMENT END OF
OF PERIOD INCOME INCOME PERIOD
PRIME OBLIGATIONS FUND
Class C
1995 $1.00 $0.055 $(0.055) $1.00
1994 1.00 0.035 (0.035) 1.00
1993 1.00 0.030 (0.030) 1.00
1992 1.00 0.039 (0.039) 1.00
1991 1.00 0.064 (0.064) 1.00
1990(1) 1.00 0.046 (0.046) 1.00
Class A
1995(2)* $1.00 $0.038 $(0.038) $1.00
Class B
1995(3)* $1.00 $0.032 $(0.032) $1.00
+ Returns are for the period indicated and have not been annualized.
* All ratios for the periods have been annualized.
(1) Commenced operations on March 1, 1990. All ratios for the period have been
annualized.
(2) Commenced operations on January 21, 1995. All ratios for the period have
been annualized.
(3) Commenced operations on January 23, 1995. All ratios for the period have
been annualized.
RATIO OF
EXPENSES TO
RATIO OF RATIO OF NET AVERAGE NET
NET ASSETS END EXPENSES TO INCOME TO ASSETS
TOTAL OF PERIOD AVERAGE NET AVERAGE NET (EXCLUDING
RETURN (000) ASSETS ASSETS WAIVERS)
5.64% $2,911,055 0.45% 5.53% 0.60%
3.56 1,307,347 0.45 3.58 0.60
3.02 682,988 0.45 2.97 0.62
4.02 203,765 0.45 3.90 0.59
6.60 193,650 0.45 6.43 0.57
4.73+ 239,231 0.45 7.90 0.55
3.84%+ $ 96,083 0.70% 5.43% 0.82%
3.28%+ $ 14 1.45% 4.70% 1.57%
THE FUND
First American Funds, Inc. ("FAF") is an open-end management investment company
that offers its shares in three different mutual funds, each of which evidences
an interest in a separate and distinct investment portfolio. Shareholders may
purchase shares in the Fund through separate classes that provide for variations
in distribution costs, voting rights and dividends. Except for these differences
among classes, each share of the Fund represents an undivided proportionate
interest in the Fund. FAF is incorporated under the laws of the State of
Minnesota, and its principal offices are located at 680 East Swedesford Road,
Wayne, Pennsylvania 19087.
This Prospectus relates only to the Class A and Class B Shares of the Fund.
Information regarding the Class C and Class D Shares of the Fund is contained in
separate prospectuses that may be obtained from the Fund's Distributor, SEI
Financial Services Company, 680 East Swedesford Road, Wayne, Pennsylvania 19087,
or by calling (800) 637-2548. The Board of Directors of FAF may authorize
additional series or classes of common stock in the future.
INVESTMENT OBJECTIVE AND POLICIES
The Adviser will purchase investments for the Fund consistent with the
investment objective described below and that meet the quality characteristics
established for the Fund. The Fund's investment objective may not be changed
without an affirmative vote of the holders of a majority (as defined in the
Investment Company Act of 1940, as amended (the "1940 Act")) of the outstanding
shares of the Fund. The Fund may not always achieve its objective.
As a fundamental investment objective, the Fund seeks to achieve maximum current
income to the extent consistent with the preservation of capital and the
maintenance of liquidity. In seeking to achieve its objective, the Fund invests
in money market instruments, including marketable securities issued or
guaranteed by the United States Government or its agencies or instrumentalities;
United States dollar-denominated obligations (including bankers' acceptances,
time deposits, and certificates of deposit, including variable rate certificates
of deposit) of banks (including commercial banks, savings banks, and savings and
loan associations) organized under the laws of the United States or any state,
foreign banks, United States branches of foreign banks, and foreign branches of
United States banks, if such banks have total assets of not less than $500
million; and certain corporate and other obligations, including high grade
commercial paper, non-convertible corporate debt securities, and loan
participation interests with no more than 397 days remaining to maturity. For
more information on these types of securities, see "Investment Restrictions and
Techniques" below.
The Fund may also (i) engage in repurchase agreements with respect to any of its
portfolio securities, (ii) purchase credit enhancement agreements to enhance the
creditworthiness of its portfolio securities, (iii) lend securities from its
portfolio, or (iv) purchase the securities described above on a when-issued or
delayed delivery basis. See "Investment Restrictions and Techniques" below.
The Fund may invest (i) up to 25% of its total assets in dollar-denominated
obligations of United States branches of foreign banks which are subject to the
same regulation as United States banks, and (ii) up to 25% of its total assets
collectively in dollar-denominated obligations of foreign branches of domestic
banks, foreign banks, and foreign corporations. The Fund may invest in United
States dollar-denominated obligations of foreign corporations if the obligations
satisfy the same quality standards set forth above for domestic corporations.
See "Investment Restrictions and Techniques" for a discussion of the risks
relating to investments in such securities.
MANAGEMENT OF THE FUND
The Board of Directors of FAF has the primary responsibility for overseeing the
overall management and electing other officers of FAF. Subject to the overall
direction and supervision of the Board of Directors, the Adviser acts as
investment adviser for and manages the investment portfolios of FAF.
INVESTMENT ADVISER
First Bank National Association, 601 Second Avenue South, Minneapolis, Minnesota
55480, acts as the Fund's investment adviser through its First Asset Management
group. The Adviser provides the Fund with investment research and portfolio
management. As of September 30, 1995, the Adviser was managing accounts with an
aggregate value of approximately $29 billion, including mutual fund assets in
excess of $7 billion. First Bank System, Inc., 601 Second Avenue South,
Minneapolis, Minnesota 55480, is the holding company for the Adviser.
The Fund pays the Adviser a monthly fee equal, on an annual basis, to 0.40% of
the Fund's average daily net assets. The Adviser may, at its option, waive any
or all of its fees, or reimburse expenses, with respect to the Fund from time to
time. Any such waiver or reimbursement is voluntary and may be discontinued at
any time. The Adviser also may absorb or reimburse expenses of the Fund from
time to time, in its discretion, while retaining the ability to be reimbursed by
the Fund for such amounts prior to the end of the fiscal year. This practice
would have the effect of lowering the Fund's overall expense ratio and of
increasing yield to investors, or the converse, at the time such amounts are
absorbed or reimbursed, as the case may be.
The Glass-Steagall Act generally prohibits banks from engaging in the business
of underwriting, selling, or distributing securities and from being affiliated
with companies principally engaged in those activities. In addition,
administrative and judicial interpretations of the Glass-Steagall Act prohibit
bank holding companies and their bank and nonbank subsidiaries from organizing,
sponsoring, or controlling registered open-end investment companies that are
continuously engaged in distributing their shares. Bank holding companies and
their bank and nonbank subsidiaries may serve, however, as investment advisers
to registered investment companies, subject to a number of terms and conditions.
Although the scope of the prohibitions and limitations imposed by the
Glass-Steagall Act has not been fully defined by the courts or the appropriate
regulatory agencies, the Fund has received an opinion from its counsel that the
Adviser is not prohibited from performing the investment advisory services
described above, and that FBS Investment Services, Inc. ("ISI"), a wholly-owned
broker-dealer of the Adviser, is not prohibited from serving as a Participating
Institution as described herein. In the event of changes in federal or state
statutes or regulations or judicial and administrative interpretations or
decisions pertaining to permissible activities of bank holding companies and
their bank and nonbank subsidiaries, the Adviser might be prohibited from
continuing these arrangements. In that event, it is expected that the Board of
Directors would make other arrangements and shareholders would not suffer
adverse financial consequences.
PORTFOLIO MANAGERS
JOSEPH M. ULREY III is portfolio co-manager for the Fund. He spent 10 years
overseeing various functions in the Treasury and Finance Divisions of First Bank
System before joining the Adviser. For the past 4 1/2 years he has managed
assets for individuals and institutional clients of the Adviser. Joseph
graduated from Macalester College with a bachelor's degree in
mathematics/economics and went on to the University of Chicago for his master's
in business administration, concentrating in finance.
JAMES D. PALMER is portfolio co-manager for the Fund. Jim joined the Adviser in
1992, prior to which he was a securities lending trader and senior master trust
accountant with First Trust National Association. He holds a bachelor's degree
from the University of Wisconsin -- LaCrosse and a master's of business
administration degree from the University of Minnesota.
CUSTODIAN
The custodian of the Fund's assets is First Trust National Association (the
"Custodian"), First Trust Center, 180 East Fifth Street, St. Paul, Minnesota
55101. The Custodian is a subsidiary of FBS, which also controls the Adviser. As
compensation for its services to the Fund, the Custodian is paid 0.03% of the
average daily net assets of the Fund. In addition, the Custodian is reimbursed
for its out-of-pocket expenses incurred in providing services to the Fund.
ADMINISTRATOR
The Administrator, a wholly-owned subsidiary of SEI Corporation ("SEI"),
provides the Fund with certain administrative personnel and services necessary
to operate the Fund. Such services include shareholder servicing and certain
legal and accounting services. The Administrator provides these personnel and
services for compensation at an annual rate equal to 0.07% of the Fund's average
daily net assets, subject to a minimum administrative fee during each fiscal
year of $50,000; provided, that to the extent that the aggregate net assets of
all First American funds exceed $8 billion, the percentage stated above is
reduced to 0.055%.
TRANSFER AGENT
DST Systems, Inc. serves as the transfer agent (the "Transfer Agent") and
dividend disbursing agent for the Fund. The address of the Transfer Agent is
210 West 10th Street, Kansas City, Missouri 64105. The Transfer Agent is not
affiliated with the Distributor, the Administrator or the Adviser.
DISTRIBUTOR
SEI Financial Services Company (the "Distributor") is the principal
distributor for shares of the Fund. The Distributor is a Pennsylvania
corporation organized on July 20, 1981, and is the principal distributor for a
number of investment companies. The Distributor is a wholly-owned subsidiary of
SEI and is located at 680 East Swedesford Road, Wayne, Pennsylvania 19087. The
Distributor is not affiliated with the Adviser, First Bank System, Inc., the
Custodian and their respective affiliates.
FAF has adopted a Plan of Distribution with respect to the Class A Shares of the
Fund (the "Class A Distribution Plan") pursuant to Rule 12b-1 under the 1940
Act. With respect to the Class A Shares, FAF has also entered into a
Distribution Agreement with the Distributor on behalf of the Fund (the "Class A
Distribution Agreement"). Under the Class A Distribution Plan and the Class A
Distribution Agreement, the Fund pays the Distributor a distribution and
servicing fee monthly at an annual rate of 0.25% of the Fund's Class A Shares'
average daily net assets. The distribution and servicing fee paid to the
Distributor may be used by the Distributor to compensate broker-dealers,
including the Distributor and the Distributor's registered representatives, for
their sale of Fund shares, and may also be used to pay other advertising and
promotional expenses in connection with the distribution of Fund shares and
expenses of ongoing servicing and maintenance of shareholder accounts.
FAF has also adopted a Plan of Distribution with respect to the Class B Shares
of the Fund (the "Class B Distribution Plan"), pursuant to Rule 12b-1 under the
1940 Act. With respect to the Class B Shares, FAF has also entered into a
Distribution and Service Agreement with the Distributor on behalf of the Fund
(the "Class B Distribution Agreement"). Under the Class B Distribution Plan and
the Class B Distribution Agreement, the Distributor is authorized to retain the
contingent deferred sales charge that may be paid upon redemption of Class B
Shares, and the Fund pays the Distributor a distribution fee monthly at an
annual rate of 0.75% of the Fund's Class B Shares' average daily net assets. In
addition to the distribution fee, the Distributor may be paid a shareholder
servicing fee of 0.25% of the average daily net assets of the Class B Shares
pursuant to the Class B Distribution Plan and a shareholder service plan (the
"Class B Service Plan"), which fee may be used by the Distributor to provide
compensation for personal, ongoing servicing and maintenance of shareholder
accounts with respect to the Class B Shares of the Fund. The distribution fee
paid to the Distributor under the Class B Distribution Plan is used by the
Distributor to compensate broker-dealers, including the Distributor and the
Distributor's registered representatives, for their sale of Fund shares, and may
also be used to pay other advertising and promotional expenses in connection
with the distribution of Fund shares.
The Class A and Class B Distribution Plans recognize that the Distributor, the
Administrator and the Adviser may in their discretion use their own assets to
pay for certain costs of distributing Fund shares. Any such arrangement to pay
such additional costs may be in the form of cash or promotional incentives and
may be commenced or discontinued by the Adviser, the Administrator, the
Distributor, or any Participating Institutions (as defined below) at any time.
The Distributor may engage securities dealers, financial institutions
(including, without limitation, banks), and other industry professionals (the
"Participating Institutions") to perform share distribution and shareholder
support services for the Fund. ISI, a subsidiary of the Adviser, is a
Participating Institution.
The investment company shares and other securities distributed by the
Distributor are not deposits or obligations of, or endorsed or guaranteed by,
First Bank National Association or its affiliates, and are not insured by the
Bank Insurance Fund, which is administered by the Federal Deposit Insurance
Corporation.
PORTFOLIO TRANSACTIONS
The Fund anticipates being as fully invested as practicable in debt securities.
Most of the Fund's portfolio transactions are effected with dealers at a spread
or markup. The dealer's profit, if any, is the difference, or spread, between
the dealer's purchase and sale price for the obligation. The Fund may authorize
the Adviser to place brokerage orders with some brokers who help distribute the
Fund's shares, if the Adviser reasonably believes that the commission and
transaction quality are comparable to that available from other qualified
brokers. Because the Adviser trades a large number of securities, dealers
generally are willing to work with the Adviser on a more favorable spread to the
Fund than would be possible for most individual investors.
A greater spread may be paid to those firms that provide research services. The
Adviser may use this research information in managing the Fund's assets. The
Adviser uses its best efforts to obtain execution of the Fund's portfolio
transactions at spreads which are reasonable in relation to the benefits
received.
INVESTING IN THE FUND
SHARE PURCHASES
Shares are sold at their net asset value on days on which the New York Stock
Exchange and the Federal Reserve wire system are open for business. Shares of
the Fund may be purchased as described below. Class B Shares are only available
pursuant to an exchange from a mutual fund in the First American family of funds
that assesses a contingent deferred sales charge. The Fund reserves the right to
reject any purchase request.
THROUGH A FINANCIAL INSTITUTION. Shares may be purchased through a financial
institution which has a sales agreement with the Distributor. An investor may
call his or her financial institution to place an order. Purchase orders must be
received by the financial institution by the time specified by the institution
to be assured same day processing, and purchase orders must be transmitted to
and received by the Fund by 12:00 noon Central time in order for shares to be
purchased at that day's price. It is the financial institution's responsibility
to transmit orders promptly.
BY MAIL. An investor may place an order to purchase shares of the Fund directly
through the Transfer Agent. Orders by mail are considered received after payment
by check is converted by the Fund into federal funds. In order to purchase
shares by mail, an investor must:
* complete and sign the new account form;
* enclose a check made payable to (Fund name); and
* mail both to DST Systems, Inc., P.O. Box 419382, Kansas City, Missouri
64141-6382.
After an account is established, an investor can purchase shares by mail by
enclosing a check and mailing it to DST Systems, Inc. at the above address.
BY WIRE. To purchase shares of the Fund by wire, call (800) 637-2548 before
12:00 noon Central time to place an order. All information needed will be taken
over the telephone, and the order will be considered received when the Custodian
receives payment by wire. Federal funds should be wired as follows: First Bank
National Association, Minneapolis, Minnesota; ABA Number 091000022; For Credit
to: DST Systems: Account Number 6023458026; For Further Credit To: (Investor
Name and Fund Name). Shares cannot be purchased by Federal Reserve wire on days
on which the New York Stock Exchange is closed and on federal holidays upon
which wire transfers are restricted.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment is $1,000, unless the investment is in a
retirement plan, in which case the minimum initial investment is $250. The
minimum subsequent investment is $100. The Fund reserves the right to waive the
minimum investment requirement in certain cases for employees of First Bank
National Association, First Trust National Association, First Bank
System, Inc., and their respective affiliates.
ALTERNATIVE PURCHASE OPTIONS
Class A Shares and Class B Shares represent interests in the Fund's portfolio of
investments. The classes have the same rights and are identical in all respects
except that (i) Class B Shares bear the expenses of the contingent deferred
sales charge arrangement; (ii) Class A Shares and Class B Shares bear different
expenses in connection with the Class A and Class B Distribution Plans and the
Class B Service Plan; (iii) each class has exclusive voting rights with respect
to approvals of any Rule 12b-1 distribution plan or service plan related to that
specific class; and (iv) each class has different exchange features. Sales
personnel of broker-dealers distributing the Fund's shares, and other persons
entitled to receive compensation for selling shares, may receive differing
compensation for selling Class A and Class B Shares.
CLASS A SHARES. The Fund's Class A Shares are offered on a continuous basis at
their next determined offering price, which is net asset value. There is no
initial or contingent deferred sales charge on purchases of Class A Shares.
Class A Shares are subject to a distribution fee paid to the Distributor monthly
at an annual rate of 0.25% of the Class A Shares' average daily net assets. See
"Distributor" above.
CLASS B SHARES. Class B Shares are sold at net asset value without any initial
sales charge. Class B Shares are available for purchase only in exchange for
shares of a mutual fund in the First American family of funds that assess a
contingent deferred sales charge (the "Exchange Class Shares") or through a
systematic exchange program as described below. Currently, only the Class B
Shares of the funds in the First American family assess a contingent deferred
sales charge. If an investor redeems Class B Shares of the Fund within eight
years of purchase of the Exchange Class Shares, he or she will pay a contingent
deferred sales charge in an amount equal to the contingent deferred sales charge
he or she would have paid on the Exchange Class Shares, assuming no exchange had
occurred. Consequently, if a shareholder exchanges Exchange Class Shares for
Class B Shares of the Fund, the transaction will not be subject to a contingent
deferred sales charge; however, when Class B Shares acquired through the
exchange are redeemed, the shareholder will be treated as if no exchange took
place for the purpose of determining the contingent deferred sales charge and
will be charged a contingent deferred sales charge at the rates set forth below.
This charge is assessed on an amount equal to the lesser of the then-current
market value or the cost of the shares being redeemed. Accordingly, no sales
charge is imposed on increases in net asset value, if any, above the initial
purchase price or on shares derived from reinvestment of dividends or capital
gains distributions.
CONTINGENT DEFERRED
SALES CHARGE AS A
PERCENTAGE OF DOLLAR
AMOUNT SUBJECT TO
YEAR SINCE PURCHASE CHARGE
First 5.00%
Second 5.00%
Third 4.00%
Fourth 3.00%
Fifth 2.00%
Sixth 1.00%
Seventh None
Eighth None
In determining whether a particular redemption is subject to a contingent
deferred sales charge, it is assumed that the redemption is first, of any Class
A Shares in the shareholder's Fund account; second, of any Class B Shares held
for more than eight years and Class B Shares acquired pursuant to reinvestment
of dividends or other distributions; and third, of Class B Shares held longest
during the eight year period. This method should result in the lowest possible
sales charge.
At the end of the period ending eight years after the beginning of the month in
which the Exchange Class Shares were issued, Class B Shares will automatically
convert to Class A Shares and will no longer be subject to the Class B
distribution and service fees. This conversion will be on the basis of the
relative net asset values of the two classes.
SYSTEMATIC INVESTMENT PROGRAM
When an account has been opened, shareholders may add to their investment on a
regular basis in a minimum amount of $100. Under this program, funds may be
automatically withdrawn periodically from the shareholder's checking account and
invested in Fund shares at the net asset value next determined after an order is
received. Shareholders may apply for participation in this program through their
financial institution or call (800) 637-2548.
SYSTEMATIC EXCHANGE PROGRAM
Shares of the Fund also may be exchanged through automatic monthly deductions
from an investor's account for the same class of shares of First American
Investment Funds, Inc. Under a systematic exchange program, an investor
initially purchases Class A or Class B Shares of Prime Obligations Fund in an
amount equal to the total amount of the investment the investor desires to make
in the same class of shares of First American Investment Funds. On a monthly
basis a specified dollar amount of Prime Obligations Fund shares is exchanged
for shares of the same class of a specified portfolio of First American
Investment Funds. Exchanges of Class A Shares will be subject to the applicable
sales charge imposed by the First American Investment Funds portfolio and,
accordingly, it may be benefical for an investor to execute a letter of intent
in connection with a Class A Shares systematic exchange program. Exchanges of
Class B Shares are not subject to a contingent deferred sales charge, but if
shares are redeemed rather than exchanged, the shares are subject to such a
charge. The systematic exchange program of investing a fixed dollar amount at
regular intervals over time in a First American Investment Funds portfolio has
the effect of reducing the average cost per share of the First American
Investment Funds shares acquired. This effect also can be achieved through the
First American Investment Funds systematic investment program, which is
described in the applicable First American Investment Funds prospectus. A
shareholder may apply for participation in the systematic exchange program
through his or her financial institution or by calling (800) 637-2548.
CERTIFICATES AND CONFIRMATIONS
The Transfer Agent maintains a share account for each shareholder. Share
certificates will not be issued by the Fund. Monthly confirmations are sent to
report all transactions and dividends paid during that month.
DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income will be accrued daily and paid monthly.
Dividends are automatically reinvested on payment dates in additional shares of
the Fund, unless cash payments are requested by contacting the Fund. Shares
purchased through the Fund before 12:00 noon Central time earn dividends that
day. Dividends payable on Class B Shares will generally be less than the
dividends payable on Class A Shares because of the greater distribution and
shareholder service expenses charged to Class B Shares.
EXCHANGE PRIVILEGE
Shareholders may exchange Class A or Class B Shares of the Fund for currently
available Class A or Class B Shares, respectively, of the other funds in the
First American family. Exchanges of Class A Shares of the Fund will be subject
to imposition of sales charges unless such shares are shown to have been
originally issued in exchange for shares in the First American family of funds
that had a sales charge. Exchanges of shares among the funds must meet any
applicable minimum investment of the fund for which shares are being exchanged.
The ability to exchange shares of the funds does not constitute an offering or
recommendation of shares of one fund by another fund. This privilege is
available to shareholders resident in any state in which the fund shares being
acquired may be sold. Exchanges may be accomplished by a written request, or by
telephone if a preauthorized exchange authorization is on file with the Transfer
Agent, shareholder servicing agent, or financial institution.
Written exchange requests must be signed exactly as shown on the authorization
form, and the signatures may be required to be guaranteed as for a redemption of
shares by an entity described under "Redeeming Shares -- By Mail." Neither the
Fund, the Distributor, the Transfer Agent, any shareholder servicing agent, nor
any financial institution will be responsible for further verification of the
authenticity of the exchange instructions. See also "Redeeming Shares."
Telephone exchange instructions made by the investor may be carried out only if
a telephone authorization form completed by the investor is on file with the
Transfer Agent, shareholder servicing agent, or financial institution. Shares
may be exchanged between two funds by telephone only if the two funds have
identical shareholder registrations.
Telephone exchange instructions may be recorded and will be binding upon the
shareholder. Telephone instructions must be received by the Transfer Agent
before 12:00 noon Central time, or by a shareholder's shareholder servicing
agent or financial institution by the time specified by it, in order for shares
to be exchanged the same day. Neither the Transfer Agent nor the Fund will be
responsible for the authenticity of exchange instructions received by telephone
if it reasonably believes those instructions to be genuine. The Fund and the
Transfer Agent will each employ reasonable procedures to confirm that telephone
instructions are genuine, and they may be liable for losses resulting from
unauthorized or fraudulent telephone instructions if they do not employ these
procedures.
Shareholders of the Fund may have difficulty in making exchanges by telephone
through brokers and other financial institutions during times of drastic
economic or market changes. If a shareholder cannot contact his or her broker or
financial institution by telephone, it is recommended that an exchange request
be made in writing and sent by overnight mail to DST Systems, Inc., 210 West
10th Street, Kansas City, Missouri 64105.
The terms of any exchange privileges may be modified or terminated by the Fund
at any time. Shareholders will be notified of the termination of the exchange
privilege. There are currently no additional fees or charges for the exchange
service and the Fund does not contemplate establishing such fees or charges,
although the Fund reserves the right to do so.
REDEEMING SHARES
The Fund redeems shares at the net asset value next determined after the
Transfer Agent receives the redemption request, reduced by any applicable
contingent deferred sales charge on Class B Shares. Redemptions will be made on
days on which the Fund computes its net asset value. Redemptions can be made as
described below and must be received in proper form.
BY TELEPHONE
A shareholder may redeem shares of the Fund by calling his or her financial
institution to request the redemption. Shares will be redeemed at the net
asset value next determined after the Fund receives the redemption request from
the financial institution plus any applicable contingent deferred sales charge
on Class B Shares. Redemption requests must be received by the financial
institution by the time specified by the institution to be assured same day
processing and redemption requests must be transmitted to and received by the
Fund by 12:00 noon Central time for same day processing. Pursuant to
instructions received from the financial institution, redemptions will be made
by check or by wire transfer. It is the financial institution's responsibility
to transmit redemption requests promptly. Redemptions processed by 12:00 noon
Central time will not receive that day's dividend. Redemption requests placed
after that time will earn that day's dividend, but will not receive proceeds
until the following day.
Shareholders who did not purchase their shares through a financial institution
may redeem Fund shares by telephoning (800) 637-2548. At the shareholder's
request, redemption proceeds will be paid by check and mailed to the
shareholder's address of record or wire transferred to the shareholder's account
at a domestic commercial bank that is a member of the Federal Reserve System,
normally within one business day, but in no event longer than seven days after
the request. The minimum amount for a wire transfer is $1,000. If at any time
the Fund shall determine it necessary to terminate or modify this method of
redemption, shareholders would be promptly notified.
In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If such a case should occur, another
method of redemption should be considered. Neither the Transfer Agent nor the
Fund will be responsible for the authenticity of redemption instructions
received by telephone if it reasonably believes those instructions to be
genuine. The Fund and the Transfer Agent will each employ reasonable procedures
to confirm that telephone instructions are genuine, and they may be liable for
losses resulting from unauthorized or fraudulent telephone instructions if they
do not employ these procedures. These procedures may include taping of telephone
conversations.
BY MAIL
Any shareholder may redeem Fund shares by sending a written request to the
Transfer Agent, shareholder servicing agent, or financial institution. The
written request should include the shareholder's name, the Fund name, the
account number, and the share or dollar amount requested to be redeemed, and
should be signed exactly as the shares are registered. Shareholders should call
the Fund, shareholder servicing agent or financial institution for assistance in
redeeming by mail. A check for redemption proceeds normally is mailed within one
business day, but in no event more than seven business days, after receipt of a
proper written redemption request.
Shareholders requesting a redemption of $5,000 or more, a redemption of any
amount to be sent to an address other than that on record with the Fund, or a
redemption payable other than to the shareholder of record must have signatures
on written redemption requests guaranteed by:
* a trust company or commercial bank, the deposits of which are insured
by the Bank Insurance Fund, which is administered by the Federal
Deposit Insurance Corporation ("FDIC");
* a member firm of the New York, American, Boston, Midwest, or Pacific
Stock Exchanges or the National Association of Securities Dealers;
* a savings bank or savings and loan association whose deposits are
insured by the Savings Association Insurance Fund, which is
administered by the FDIC; or
* any other "eligible guarantor institution," as defined in the
Securities Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.
The Fund and the Transfer Agent have adopted standards for accepting signature
guarantees from the above institutions. The Funds may elect in the future to
limit eligible signature guarantees to institutions that are members of a
signature guarantee program. The Fund and the Transfer Agent reserve the right
to amend these standards at any time without notice.
BY CHECKING ACCOUNT
At the shareholder's request, the Transfer Agent will establish a checking
account for redeeming Fund shares. With a Fund checking account, shares may be
redeemed simply by writing a check for $100 or more. The redemption will be made
at the net asset value on the date that the Transfer Agent presents the check to
the Fund. A check may not be written to close an account. If a shareholder
wishes to redeem shares and have the proceeds available, a check may be written
and negotiated through the shareholder's bank. Checks should never be sent to
the Transfer Agent to redeem shares. Copies of canceled checks are available
upon request. A fee is charged for this service. For further information,
contact the Fund.
BY SYSTEMATIC WITHDRAWAL PROGRAM
Shareholders whose account value is at least $5,000 may elect to participate in
the Systematic Withdrawal Program. Under this program, Fund shares are redeemed
to provide for periodic withdrawal payments in an amount directed by the
shareholder. A shareholder may apply for participation in this program through
his or her financial institution. Because automatic withdrawals of Class B
Shares are subject to the contingent deferred sales charge, it may not be in the
best interest of a Class B shareholder to participate in the Systematic
Withdrawal Program.
REDEMPTION BEFORE PURCHASE INSTRUMENTS CLEAR
When shares are purchased by check or with funds transferred through the
Automated Clearing House, the proceeds of redemption of those shares are not
available until the Transfer Agent collects payment. It is the Fund's policy to
allow up to ten calendar days from the date such shares were purchased for
collection.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Fund may
redeem shares in any account, except retirement plans, and pay the proceeds to
the shareholder if the account balance falls below the required minimum value of
$500. This requirement does not apply, however, if the balance falls below $500
because of changes in the Fund's net asset value. Before shares are redeemed to
close an account, the shareholder will be notified in writing and allowed 60
days to purchase additional shares to meet the minimum requirement.
DETERMINING THE PRICE OF SHARES
The net asset value per share is determined as of the earlier of the close of
the New York Stock Exchange or 3:00 p.m. Central time on each day the New York
Stock Exchange is open for business, provided that the net asset value need not
be determined on days when no Fund shares are tendered for redemption and no
order to purchase Fund shares is received and on days on which changes in the
value of portfolio securities will not materially affect the current net asset
value of the Fund's shares. The price per share for purchases or redemptions is
such value next computed after the Transfer Agent receives the purchase order or
redemption request. It is the responsibility of Participating Institutions to
promptly forward purchase and redemption orders to the Distributor. In the case
of redemptions and repurchases of shares owned by corporations, trusts or
estates, the Distributor may require additional documents to evidence
appropriate authority in order to effect the redemption and the applicable price
will be that next determined following the receipt of the required
documentation.
The net asset value per share for the Fund is determined by dividing the value
of the securities owned by the Fund plus any cash and other assets (including
interest accrued and dividends declared but not collected), less all
liabilities, by the number of Fund shares outstanding.
Securities in the Fund's portfolio are valued on the basis of amortized cost.
This means valuation assumes a steady rate of payment from the date of purchase
until maturity instead of looking at actual changes in market value. The Fund's
other assets are valued by a method which the FAF Board of Directors believes
would accurately reflect fair value.
TAXES
The Fund will distribute all of its net income to shareholders. Dividends will
be taxable as ordinary income to shareholders, whether reinvested or received in
cash.
For a more detailed discussion of the taxation of the Fund and the tax
consequences of an investment in the Fund, see "Taxes" in the Statement of
Additional Information.
FUND SHARES
Each share of the Fund is fully paid, nonassessable, and transferable. Shares
may be issued as either full or fractional shares. Fractional shares have pro
rata the same rights and privileges as full shares. Shares of the Fund have no
preemptive or conversion rights.
Each share of the Fund has one vote. On some issues, such as the election of
directors, all shares of all FAF funds vote together as one series. The shares
do not have cumulative voting rights. Consequently, the holders of more than 50%
of the shares voting for the election of directors are able to elect all of the
directors if they choose to do so. On issues affecting only a particular fund or
class, the shares of that fund or class will vote as a separate series. Examples
of such issues would be proposals to alter a fundamental investment restriction
pertaining to a fund or to approve, disapprove or alter a distribution plan
pertaining to a class.
The Bylaws of FAF provide that annual shareholders' meetings are not required
and that meetings of shareholders need be held only with such frequency as
required under Minnesota law and the 1940 Act.
Prior to January 20, 1995 five different mutual funds existed as separate series
of FAF: Money Fund, Institutional Money Fund, CT Government Fund, Institutional
Government Fund and CT Treasury Fund. Effective January 20, 1995, Money Fund was
combined with and into Institutional Money Fund and the combined entity is Prime
Obligations Fund. Also effective on such date, CT Government Fund was combined
with and into Institutional Government Fund and the combined entity is
Government Obligations Fund. In addition, the name of CT Treasury Fund was
changed to Treasury Obligations Fund.
CALCULATION OF PERFORMANCE DATA
From time to time the Fund may advertise its "yield" and "effective yield" in
advertisements or in reports or other communications with shareholders. Both
yield figures are based on historical earnings and are not intended to indicate
future performance. The "yield" of a Fund refers to the income generated by an
investment over a seven-day period (which period will be stated in the
advertisement). This income is then "annualized," that is, the amount of income
generated by the investment during that week is assumed to be generated each
week over a 52-week period and is shown as a percentage of the investment. The
"effective yield" is calculated similarly but, when annualized, the income
earned by an investment in the Fund is assumed to be reinvested. The "effective
yield" will be slightly higher than the "yield" because of the compounding
effect of this assumed reinvestment.
Advertisements and other sales literature for the Fund may refer to the Fund's
"cumulative total return" and "average annual total return." Total return is
based on the overall dollar or percentage change in value of a hypothetical
investment in the Fund assuming dividend distributions are reinvested. A
cumulative total return reflects the Fund's performance over a stated period of
time. An average annual total return reflects the hypothetical annually
compounded rate that would have produced the same cumulative total return if
performance had been constant over the entire period. Because average annual
returns tend to smooth out variations in a Fund's performance, they are not the
same as actual year-by-year results.
Performance quotations are computed separately for Class A, Class B, Class C and
Class D Shares of the Fund. The performance of each class will differ due to the
varying levels of distribution fees and shareholder service fees applicable to
each class.
INVESTMENT RESTRICTIONS AND TECHNIQUES
GENERAL
The Fund is subject to the investment restrictions of Rule 2a-7 under the 1940
Act in addition to other policies and restrictions discussed herein. Pursuant to
Rule 2a-7, the Fund is required to invest exclusively in securities that mature
within 397 days from the date of purchase and to maintain an average weighted
maturity of not more than 90 days. Rule 2a-7 also requires that all investments
by the Fund be limited to United States dollar-denominated investments that (a)
present "minimal credit risk" and (b) are at the time of acquisition "Eligible
Securities." Eligible Securities include, among others, securities that are
rated by two Nationally Recognized Statistical Rating Organizations ("NRSROs")
in one of the two highest categories for short-term debt obligations, such as
A-1 or A-2 by Standard & Poor's Corporation ("Standard & Poor's"), or Prime-1 or
Prime-2 by Moody's Investors Service, Inc. ("Moody's"). It is the responsibility
of the Adviser to determine that the Fund's investments present only "minimal
credit risk" and are Eligible Securities. The Board of Directors of FAF has
established written guidelines and procedures for the Adviser and oversees the
Adviser's determination that the Fund's portfolio securities present only
"minimal credit risk" and are Eligible Securities.
Rule 2a-7 requires, among other things, that the Fund may not invest, other than
in United States "Government Securities" (as defined in the 1940 Act), more than
5% of its total assets in securities issued by the issuer of the security;
provided, that the Fund may invest in First Tier Securities (as defined in Rule
2a-7) in excess of that limitation for a period of up to three business days
after the purchase thereof provided that the Fund may not make more than one
such investment at any time. The Fund invests in corporate and bank obligations
qualifying as First Tier Securities. In general, First Tier Securities are
securities which are rated, at the time of investment, by at least two NRSROs
(one if it is the only organization rating such obligations) in the highest
short-term rating category or, if unrated, are determined by the Adviser to be
of comparable quality. Rule 2a-7 also requires that the Fund may not invest,
other than in United States Government securities, (a) more than 5% of its total
assets in Second Tier Securities (i.e., Eligible Securities that are not rated
by two NRSROs in the highest category such as A-1 and Prime-1) and (b) more than
the greater of 1% of its total assets or $1,000,000 in Second Tier Securities of
any one issuer.
In order to provide shareholders with full liquidity, the Fund has implemented
the following practices to maintain a constant price of $1.00 per share:
limiting the portfolio's dollar-weighted average maturity to 90 days or less and
buying securities which mature within 397 days from the date of acquisition. The
Fund cannot guarantee a $1.00 share price but these practices help to minimize
any price fluctuations that might result from rising or declining interest
rates. All money market instruments, including United States Government
securities, can change in value when interest rates or an issuer's
creditworthiness changes. The value of the securities in the Fund's portfolio
can be expected to vary inversely with changes in prevailing interest rates,
with the amount of such variation depending primarily upon the period of time
remaining to maturity of the security. If the security is held to maturity, no
gain or loss will be realized as a result of interest rate fluctuations.
As a fundamental policy, the Fund will not purchase a security if, as a result:
(a) more than 10% of its assets would be in illiquid assets including time
deposits and repurchase agreements maturing in more than seven days; or (b) 25%
or more of its assets would be in any single industry, except that there is no
limitation on the purchase of obligations of domestic commercial banks
(excluding, for this purpose, foreign branches of domestic commercial banks).
Limitation (b) does not apply to obligations issued or guaranteed by the United
States or its agencies or instrumentalities.
Unless otherwise stated, the policies described above in this section for the
Fund are non-fundamental and may be changed by a vote of the Board of Directors.
The Fund has adopted certain other investment restrictions, which are set forth
in detail in the Statement of Additional Information. These restrictions are
fundamental and may not be changed without the approval of the holders of a
majority (as defined in the 1940 Act) of the outstanding shares of the Fund.
If a percentage limitation under this section or "Investment Objectives and
Policies," or under "Investment Restrictions" in the Statement of Additional
Information, is adhered to at the time of an investment, a later increase or
decrease in percentage resulting from changes in values of assets will not
constitute a violation of such limitation except in the case of the limitation
on illiquid investments.
The securities in which the Fund invests may not yield as high a level of
current income as longer term or lower grade securities, which generally have
less liquidity and a greater fluctuation in value. All securities in the
portfolio are purchased with and payable in United States dollars.
LOAN PARTICIPATIONS; SECTION 4(2) AND RULE 144A SECURITIES
A loan participation interest represents a pro rata undivided interest in an
underlying bank loan. Participation interests, like the underlying loans, may
have fixed, floating, or variable rates of interest. The bank selling a
participation interest generally acts as a mere conduit between its borrower and
the purchasers of interests in the loan. The purchaser of an interest (for
example, the Fund) generally does not have recourse against the bank in the
event of a default on the underlying loan. Therefore, the credit risk associated
with such instruments is governed by the creditworthiness of the underlying
borrowers and not by the banks selling the interests. Loan participation
interests that can be sold within a seven-day period are deemed by the Adviser
to be liquid investments. If a loan participation interest is restricted from
being sold within a seven-day period, then it, as a fundamental policy, will be
limited, together with other illiquid investments, to not more than 10% of the
Fund's total assets. Commercial paper issued in reliance on the exemption from
registration afforded by Section 4(2) of the Securities Act of 1933 and
corporate obligations qualifying for resale to certain "qualified institutional
buyers" pursuant to Rule 144A under the Securities Act of 1933 meet the criteria
for liquidity established by the Board of Directors and are quite liquid.
Consequently, the Fund does not intend to subject such securities to the
limitation applicable to restricted securities. Investing in Rule 144A
securities could have the effect of increasing the level of illiquidity in the
Fund to the extent that qualified institutional buyers become, for a time,
uninterested in purchasing these securities.
SECURITIES OF FOREIGN BANKS AND BRANCHES
Because the portfolio may contain securities of foreign branches of domestic
banks, foreign banks, and United States branches of foreign banks, the Fund may
be subject to additional investment risks that are different in some respects
from those incurred by a fund that invests only in debt obligations of United
States banks. These risks may include future unfavorable political
and economic developments and possible withholding taxes, seizure of foreign
deposits, currency controls, interest limitations, or other governmental
restrictions which might affect the payment of principal or interest on
securities owned by the Fund. Additionally, there may be less public information
available about foreign banks and their branches. The Adviser carefully
considers these factors when making investments. The Fund has agreed that, in
connection with investment in securities issued by foreign banks, United States
branches of foreign banks, and foreign branches of domestic banks, consideration
will be given to the domestic marketability of such securities in light of these
factors.
UNITED STATES GOVERNMENT SECURITIES
The Fund may invest in securities issued or guaranteed as to principal or
interest by the United States Government, or agencies or instrumentalities of
the United States Government. These investments include direct obligations of
the United States Treasury such as United States Treasury bonds, notes, and
bills. The Treasury securities are essentially the same except for differences
in interest rates, maturities, and dates of issuance. In addition to Treasury
securities, the Fund may invest in securities, such as notes, bonds, and
discount notes which are issued or guaranteed by agencies of the United States
Government and various instrumentalities which have been established or
sponsored by the United States Government. Except for United States Treasury
securities, these United States Government obligations, even those which are
guaranteed by federal agencies or instrumentalities, may or may not be backed by
the "full faith and credit" of the United States. In the case of securities not
backed by the full faith and credit of the United States, the investor must look
principally to the agency issuing or guaranteeing the obligation for ultimate
repayment and may not be able to assert a claim against the United States itself
in the event the agency or instrumentality does not meet its commitment. The
Adviser considers securities guaranteed by an irrevocable letter of credit
issued by a government agency to be guaranteed by that agency.
Some of the government agencies that issue or guarantee securities are the
Government National Mortgage Association and the Farmers Home Administration,
and some of the instrumentalities that issue or guarantee securities include the
Export-Import Bank, Federal Farm Credit Banks, Federal Home Loan Banks, and the
Federal Home Loan Mortgage Corporation. Because the United States Treasury is
not obligated by law to provide support to all United States Government
instrumentalities and agencies, the Fund will invest in securities issued by
such instrumentalities and agencies only when the Adviser determines that the
credit risk with respect to the instrumentality or agency does not make its
securities unsuitable investments for the Fund.
United States Treasury obligations include bills, notes and bonds issued by the
United States Treasury and separately traded interest and principal component
parts of such obligations that are transferable through the Federal book-entry
system known as Separately Traded Registered Interest and Principal Securities
("STRIPS"). STRIPS are sold as zero coupon securities, which means that they are
sold at a substantial discount and redeemed at face value at their maturity date
without interim cash payments of interest or principal. This discount is
accreted over the life of the security, and such accretion will constitute the
income earned on the security for both accounting and tax purposes. Because of
these features, such securities may be subject to greater interest rate
volatility than interest paying United States Treasury obligations. The Fund's
investments in STRIPS will be limited to components with maturities of less than
397 days and the Fund will not actively trade such components.
REPURCHASE AGREEMENTS
The Fund may engage in repurchase agreements with respect to any of its
portfolio securities. In a repurchase agreement, a Fund buys a security at one
price and simultaneously promises to sell that same security back to the seller
at a mutually agreed upon time and price. The Fund may engage in repurchase
agreements with any member bank of the Federal Reserve System or dealer in
United States Government securities. Repurchase agreements usually are for short
periods, such as under one week, not to exceed 30 days. In all cases, the
Adviser must be satisfied with the creditworthiness of the other party to the
agreement before entering a repurchase agreement. In the event of bankruptcy of
the other party to a repurchase agreement, the Fund might experience delays in
recovering its cash. To the extent that, in the meantime, the value of the
securities the Fund purchased may have decreased, the Fund could experience a
loss.
CREDIT ENHANCEMENT AGREEMENTS
The Fund may arrange for guarantees, letters of credit, or other forms of credit
enhancement agreements (collectively, "Guarantees") for the purpose of further
securing the payment of principal and/or interest on the Fund's investment
securities. Although each investment security, at the time it is purchased, must
meet the Fund's creditworthiness criteria, Guarantees sometimes are purchased
from banks and other institutions (collectively, "Guarantors") when the Adviser,
through yield and credit analysis, deems that credit enhancement of certain of
the Fund's securities is advisable. As a non-fundamental policy, the Fund will
limit the value of all investment securities issued or guaranteed by each
Guarantor to not more than 10% of the value of the Fund's total assets.
LENDING OF PORTFOLIO SECURITIES
The Fund may from time to time lend securities from its portfolio to brokers,
dealers, and financial institutions and receive collateral in cash or securities
issued or guaranteed by the United States Government which will be maintained at
all times in an amount equal to at least 100% of the current value of the loaned
securities. Such loans may not exceed one-third of the value of the Fund's total
assets. For additional information, see "Investment Restrictions" in the
Statement of Additional Information.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES
The Fund may purchase the securities described above on a when-issued or delayed
delivery basis. The settlement dates for these types of transactions are
determined by mutual agreement of the parties and may occur a month or more
after the parties have agreed to the transaction. Securities purchased on a
when-issued or delayed delivery basis are subject to market fluctuation and no
interest accrues to the Fund during the period prior to settlement. At the time
the Fund commits to purchase securities on a when-issued or delayed delivery
basis, it will record the transaction and thereafter reflect the value, each
day, of such security in determining its net asset value. At the time of
delivery of the securities, the value may be more or less than the purchase
price. The Fund will also establish a segregated account with its Custodian in
which it will maintain cash or cash equivalents or other portfolio securities
equal in value to commitments for such when-issued or delayed delivery
securities. The Fund will not purchase securities on a when-issued or delayed
delivery basis if, as a result thereof, more than 15% of the Fund's net assets
would be so invested.
MONEY MARKET FUNDS
The Fund may invest, to the extent permitted by the 1940 Act, in securities
issued by other money market funds, provided that the permitted investments of
such other money market funds constitute permitted investments of the Fund. The
Adviser will waive its advisory fee on amounts which are invested in such other
money market funds. Subject to the receipt of exemptive relief under the 1940
Act, the money market funds in which the Fund may invest include other money
market funds advised by the Adviser.
FIRST AMERICAN FUNDS, INC.
680 East Swedesford Road
Wayne, Pennsylvania 19087
INVESTMENT ADVISER
FIRST BANK NATIONAL ASSOCIATION
601 Second Avenue South
Minneapolis, Minnesota 55402
CUSTODIAN
FIRST TRUST NATIONAL ASSOCIATION
180 East Fifth Street
St. Paul, Minnesota 55101
DISTRIBUTOR
SEI FINANCIAL SERVICES COMPANY
680 East Swedesford Road
Wayne, Pennsylvania 19087
ADMINISTRATOR
SEI FINANCIAL MANAGEMENT
CORPORATION
680 East Swedesford Road
Wayne, Pennsylvania 19087
TRANSFER AGENT
DST SYSTEMS, INC.
210 West 10th Street
Kansas City, Missouri 64105
INDEPENDENT AUDITORS
KPMG PEAT MARWICK LLP
90 South Seventh Street
Minneapolis, Minnesota 55402
COUNSEL
DORSEY & WHITNEY P.L.L.P.
220 South Sixth Street
Minneapolis, Minnesota 55402
FIRST AMERICAN FUNDS, INC.
MONEY MARKET FUNDS
INSTITUTIONAL CLASS
PRIME OBLIGATIONS FUND GOVERNMENT OBLIGATIONS FUND
TREASURY OBLIGATIONS FUND
PROSPECTUS
JANUARY 31, 1996
[logo] FIRST AMERICAN FUNDS
The power of disciplined investing
FIRST AMERICAN FUNDS, INC.
680 East Swedesford Road, Wayne, Pennsylvania 19087
INSTITUTIONAL CLASS PROSPECTUS
The shares described in this Prospectus represent interests in First
American Funds, Inc., which consists of mutual funds with three
different investment portfolios and objectives. This Prospectus relates
to the Class C Shares of the following funds (the "Funds"):
* PRIME OBLIGATIONS FUND * GOVERNMENT OBLIGATIONS FUND
* TREASURY OBLIGATIONS FUND
Class C Shares of the Funds are offered through banks and certain other
institutions for the investment of their own funds and funds for which
they act in a fiduciary, agency or custodial capacity.
Each Fund seeks to achieve maximum current income to the extent
consistent with the preservation of capital and maintenance of
liquidity. Each Fund has its own policies designed to meet the
investment objective. Prime Obligations Fund pursues this objective by
investing in a variety of money market instruments maturing within 397
days. Government Obligations Fund pursues this objective by investing
only in United States Government securities maturing within 397 days
and repurchase agreements with respect to such securities. Treasury
Obligations Fund pursues this objective by investing in United States
Treasury obligations and repurchase and reverse repurchase agreements
with respect to such obligations. Each Fund is a diversified open-end
mutual fund.
SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, INCLUDING FIRST BANK NATIONAL ASSOCIATION OR
ANY OF ITS AFFILIATES, NOR ARE THEY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
AN INVESTMENT IN THE FUNDS INVOLVES INVESTMENT RISK, INCLUDING POSSIBLE
LOSS OF PRINCIPAL.
This Prospectus sets forth concisely information about the Funds that a
prospective investor should know before investing. It should be read
and retained for future reference.
A Statement of Additional Information dated January 31, 1996 for the
Funds has been filed with the Securities and Exchange Commission and is
incorporated in its entirety by reference in this Prospectus. To obtain
copies of the Statement of Additional Information at no charge, or to
obtain other information or make inquiries about the Funds, call (800)
637-2548 or write SEI Financial Services Company, 680 East Swedesford
Road, Wayne, Pennsylvania 19087.
AN INVESTMENT IN A FUND IS NEITHER INSURED NOR GUARANTEED BY THE UNITED
STATES GOVERNMENT, AND THERE IS NO ASSURANCE THAT ANY OF THE FUNDS WILL
BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is January 31, 1996.
TABLE OF CONTENTS
PAGE
SUMMARY OF FUND EXPENSES 4
Class C Share Fees and Expenses 4
Information Concerning Fees and Expenses 5
FINANCIAL HIGHLIGHTS 6
THE FUNDS 8
INVESTMENT OBJECTIVES AND POLICIES 8
Prime Obligations Fund 8
Government Obligations Fund 9
Treasury Obligations Fund 9
MANAGEMENT OF THE FUNDS 9
Investment Adviser 10
Portfolio Managers 11
Custodian 11
Administrator 11
Transfer Agent 11
DISTRIBUTOR 12
PORTFOLIO TRANSACTIONS 12
PURCHASE AND REDEMPTION OF SHARES 13
Share Purchases and Redemptions 13
What Shares Cost 14
Exchanging Securities for Fund Shares 14
Certificates and Confirmations 14
Dividends 15
Capital Gains 15
Exchange Privilege 15
TAXES 16
FUND SHARES 16
CALCULATION OF PERFORMANCE DATA 17
INVESTMENT RESTRICTIONS AND TECHNIQUES 17
General Restrictions 17
Loan Participations; Section 4(2) and
Rule 144A Securities 19
Securities of Foreign Banks and Branches 20
United States Government
Securities 20
Repurchase Agreements 21
Reverse Repurchase Agreements 22
Credit Enhancement Agreements 22
Lending of Portfolio Securities 23
When-Issued and Delayed Delivery
Securities 23
Money Market Funds 23
SUMMARY OF FUND EXPENSES
CLASS C SHARE FEES AND EXPENSES
PRIME GOVERNMENT TREASURY
OBLIGATIONS OBLIGATIONS OBLIGATIONS
FUND FUND FUND
SHAREHOLDER TRANSACTION EXPENSES
Maximum sales load imposed on
purchases None None None
Maximum sales load imposed on
reinvested dividends None None None
Deferred sales load None None None
Redemption fees None None None
Exchange fees None None None
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
Investment advisory fees (after
voluntary fee waivers and
reimbursements)(1) 0.28% 0.30% 0.33%
Rule 12b-1 fees None None None
Other expenses (after voluntary fee
waivers and reimbursements)(1) 0.17% 0.15% 0.12%
Total fund operating expenses
(after voluntary fee waivers and
reimbursements)(1) 0.45% 0.45% 0.45%
EXAMPLE(2)
You would pay the following expenses on a $1,000 investment, assuming (i) a 5%
annual return, and (ii) redemption at the end of each time period:
1 year $ 5 $ 5 $ 5
3 years $ 14 $ 14 $ 14
5 years $ 25 $ 25 $ 25
10 years $ 57 $ 57 $ 47
(1) First Bank National Association, the investment adviser for the Funds,
intends to waive a portion of its fees and/or reimburse expenses on a
voluntary basis, and the amounts shown above reflect these waivers and
reimbursements as of the date of this Prospectus. The Funds' investment
adviser intends to maintain such waivers and reimbursements for the
current fiscal year but reserves the right to terminate its waiver and
to discontinue expense reimbursement at any time thereafter in its sole
discretion. Absent any fee waivers, investment advisory fees for each
Fund as an annualized percentage of average daily net assets would be
0.40%; and total fund operating expenses with respect to Class C Shares
calculated on such basis would be 0.60% for Prime Obligations Fund,
0.60% for Government Obligations Fund and 0.55% for Treasury
Obligations Fund. Other expenses include an annual administration fee.
(2) Absent the voluntary reduction of fees the dollar amounts for the 1, 3,
5, and 10 year periods in the example above would be as follows: Prime
Obligations Fund, $6, $19, $33 and $75; Government Obligations Fund,
$6, $19, $33 and $75; and Treasury Obligations Fund, $6, $18, $31 and
$69.
INFORMATION CONCERNING FEES AND EXPENSES
The purpose of the preceding table is to assist the investor in understanding
the various costs and expenses that an investor in a Fund may bear directly or
indirectly. THE DATA CONTAINED IN THE TABLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR
LESS THAN THOSE SHOWN. The information set forth in the tables relates only to
the Class C Shares of the Funds. The Funds also offer Class A, Class B and Class
D Shares which are subject to the same expenses and additional sales and/or
distribution expenses.
Investment advisory fees are paid by each Fund to First Bank National
Association (the "Adviser") for managing its investments. The examples in the
above table are based on projected annual operating expenses for each Fund after
voluntary fee waivers and expense reimbursements by the Adviser. Prior to fee
waivers, investment advisory fees accrue at the annual rate of 0.40% of the
average daily net assets of each Fund. Other expenses include administrative
fees which are paid by each Fund to SEI Financial Management Corporation (the
"Administrator") for providing various services necessary to operate the Funds.
These include shareholder servicing and certain accounting and other services.
The Administrator provides these services for a fee calculated as described
under "Management of the Fund -- Administrator" below.
FINANCIAL HIGHLIGHTS
The following financial highlights have been audited by KPMG Peat Marwick, LLP,
independent auditors, and should be read in conjunction with the Funds'
financial statements and the related notes thereto appearing in their Annual
Report to Shareholders for the year ended September 30, 1995.
The information set forth below shows performance for Class C and Class D
Shares. Class D performance is included for historical purposes only. The
respective classes of shares are subject to different expenses.
For the periods ended September 30,
For a share outstanding throughout the period
NET ASSET DIVIDENDS
VALUE NET FROM NET
BEGINNING INVESTMENT INVESTMENT
OF PERIOD INCOME INCOME
PRIME OBLIGATIONS FUND
CLASS C
1995 $1.00 $0.055 $(0.055)
1994 1.00 0.035 (0.035)
1993 1.00 0.030 (0.030)
1992 1.00 0.039 (0.039)
1991 1.00 0.064 (0.064)
1990(1) 1.00 0.046 (0.046)
GOVERNMENT OBLIGATIONS FUND
CLASS C
1995 $1.00 $0.054 $(0.054)
1994 1.00 0.034 (0.034)
1993 1.00 0.028 (0.028)
1992 1.00 0.038 (0.038)
1991 1.00 0.060 (0.060)
1990(1) 1.00 0.045 (0.045)
TREASURY OBLIGATIONS FUND
CLASS C
1995(2)* $1.00 $0.038 $(0.038)
CLASS D
1995 $1.00 $0.051 $(0.051)
1994(3) 1.00 0.031 (0.031)
+ Returns are for the period indicated and have not been annualized
* All ratios for the periods have been annualized.
(1) Commenced operations on March 1, 1990. All ratios for the period have been
annualized.
(2) Commenced operations on January 24, 1995. All ratios for the period have
been annualized.
(3) Commenced operations on October 4, 1993. All ratios for the period have
been annualized.
<TABLE>
<CAPTION>
RATIO OF
RATIO OF NET EXPENSES TO
RATIO OF INVESTMENT AVERAGE NET
NET ASSET NET ASSETS END EXPENSES TO INCOME TO ASSETS
VALUE END OF PERIOD AVERAGE NET AVERAGE NET (EXCLUDING
OF PERIOD TOTAL RETURN (000) ASSETS ASSETS WAIVERS)
<S> <C> <C> <C> <C> <C> <C>
$1.00 5.64% $2,911,055 0.45% 5.53% 0.60%
1.00 3.56 1,307,347 0.45 3.58 0.60
1.00 3.02 682,988 0.45 2.97 0.62
1.00 4.02 203,765 0.45 3.90 0.59
1.00 6.60 193,650 0.45 6.43 0.57
1.00 4.73+ 239,231 0.45 7.90 0.55
$1.00 5.55% $ 551,286 0.45% 5.44% 0.60%
1.00 3.48 455,869 0.45 3.61 0.61
1.00 2.87 237,331 0.45 2.83 0.65
1.00 3.85 93,770 0.45 3.71 0.64
1.00 6.22 72,824 0.45 5.90 0.68
1.00 4.56+ 29,704 0.45 7.60 0.98
$1.00 3.83%+ $ 117,171 0.45% 5.50% 0.55%
$1.00 5.22% $1,038,818 0.60% 5.13% 0.70%
1.00 3.12+ 746,090 0.58 3.19 0.68
</TABLE>
THE FUNDS
First American Funds, Inc. ("FAF") is an open-end management investment company
which offers its shares in three different mutual funds, each of which evidences
an interest in a separate and distinct investment portfolio. Shareholders may
purchase shares in each Fund through separate classes that provide for
variations in distribution costs, voting rights and dividends. Except for these
differences among classes, each share of each Fund represents an undivided
proportionate interest in that Fund. FAF is incorporated under the laws of the
State of Minnesota, and its principal offices are located at 680 East Swedesford
Road, Wayne, Pennsylvania 19087.
This Prospectus relates only to the Class C Shares of the Funds named on the
cover hereof. Information regarding the Class D Shares of the Funds and the
Class A and Class B Shares of the Prime Obligations Fund is contained in
separate prospectuses that may be obtained from the Funds' Distributor, SEI
Financial Services Company, 680 East Swedesford Road, Wayne, Pennsylvania 19087,
or by calling (800) 637-2548. The Board of Directors of FAF may authorize
additional series or classes of common stock in the future.
INVESTMENT OBJECTIVES AND POLICIES
As a fundamental investment objective, each Fund seeks to achieve maximum
current income to the extent consistent with the preservation of capital and the
maintenance of liquidity. As discussed below, each Fund pursues different
strategies in seeking to achieve this investment objective. The Adviser will
purchase investments for each Fund consistent with such investment objective and
that meet the quality characteristics established for each Fund. A Fund's
investment objective may not be changed without an affirmative vote of the
holders of a majority (as defined in the Investment Company Act of 1940, as
amended (the "1940 Act")) of the outstanding shares of such Fund. The Funds may
not always achieve their objectives.
PRIME OBLIGATIONS FUND
In seeking to achieve its investment objective, Prime Obligations Fund invests
in money market instruments, including marketable securities issued or
guaranteed by the United States Government or its agencies or instrumentalities;
United States dollar-denominated obligations (including bankers' acceptances,
time deposits, and certificates of deposit, including variable rate certificates
of deposit) of banks (including commercial banks, savings banks, and savings and
loan associations) organized under the laws of the United States or any state,
foreign banks, United States branches of foreign banks, and foreign branches of
United States banks, if such banks have total assets of not less than $500
million; and certain corporate and other obligations, including high grade
commercial paper, non-convertible corporate debt securities, and loan
participation interests with no more than 397 days remaining to maturity. For
more information on these types of securities, see "Investment Restrictions and
Techniques" below.
Prime Obligations Fund may also (i) engage in repurchase agreements with respect
to any of its portfolio securities, (ii) purchase credit enhancement agreements
to enhance the creditworthiness of its portfolio securities, (iii) lend
securities from its portfolio, or (iv) purchase the securities described above
on a when-issued or delayed delivery basis. For more information on these
techniques, see "Investment Restrictions and Techniques" below.
The Fund may invest (i) up to 25% of its total assets in dollar-denominated
obligations of United States branches of foreign banks which are subject to the
same regulation as United States banks, and (ii) up to 25% of its total assets
collectively in dollar-denominated obligations of foreign branches of domestic
banks, foreign banks, and foreign corporations. The Fund may invest in United
States dollar-denominated obligations of foreign corporations if the obligations
satisfy the same quality standards set forth above for domestic corporations.
See "Investment Restrictions and Techniques" for a discussion of the risks
relating to investments in such securities.
GOVERNMENT OBLIGATIONS FUND
In seeking to achieve its investment objective, Government Obligations Fund
invests exclusively in United States Government securities maturing within 397
days, and in repurchase agreements relating to such securities. The Fund may
also purchase such securities on a when-issued or delayed delivery basis and
lend securities from its portfolio. For a discussion of these securities and
techniques, see "Investment Restrictions and Techniques" below.
TREASURY OBLIGATIONS FUND
In seeking to achieve its investment objective, Treasury Obligations Fund
invests in United States Treasury obligations maturing within 397 days or less
and repurchase agreements and reverse repurchase agreements relating to such
securities. The Fund may also purchase such securities on a when-issued or
delayed delivery basis and lend securities from its portfolio. For a
discussion of these securities and techniques, see "Investment Restrictions
and Techniques" below.
MANAGEMENT OF THE FUNDS
The Board of Directors of FAF has the primary responsibility for overseeing the
overall management and electing other officers of FAF. Subject to the overall
direction and supervision of the Board of Directors, the Adviser acts as
investment adviser for and manages the investment portfolios of FAF.
INVESTMENT ADVISER
First Bank National Association, 601 Second Avenue South, Minneapolis, Minnesota
55480, acts as the Funds' investment adviser through its First Asset Management
group. The Adviser provides the Funds with investment research and portfolio
management. As of September 30, 1995, the Adviser was managing accounts with an
aggregate value of approximately $29 billion, including mutual fund assets in
excess of $7 billion. First Bank System, Inc., 601 Second Avenue South,
Minneapolis, Minnesota 55480, is the holding company for the Adviser.
Each Fund pays the Adviser a monthly fee equal, on an annual basis, to 0.40% of
the Fund's average daily net assets. The Adviser may, at its option, waive any
or all of its fees, or reimburse expenses, with respect to one or more of the
Funds from time to time. Any such waiver or reimbursement is voluntary and may
be discontinued at any time. The Adviser also may absorb or reimburse expenses
of a Fund from time to time, in its discretion, while retaining the ability to
be reimbursed by the Fund for such amounts prior to the end of the fiscal year.
This practice would have the effect of lowering the Fund's overall expense ratio
and of increasing yield to investors, or the converse, at the time such amounts
are absorbed or reimbursed, as the case may be.
The Glass-Steagall Act generally prohibits banks from engaging in the business
of underwriting, selling, or distributing securities and from being affiliated
with companies principally engaged in those activities. In addition,
administrative and judicial interpretations of the Glass-Steagall Act prohibit
bank holding companies and their bank and nonbank subsidiaries from organizing,
sponsoring, or controlling registered open-end investment companies that are
continuously engaged in distributing their shares. Bank holding companies and
their bank and nonbank subsidiaries may serve, however, as investment advisers
to registered investment companies, subject to a number of terms and conditions.
Although the scope of the prohibitions and limitations imposed by the
Glass-Steagall Act has not been fully defined by the courts or the appropriate
regulatory agencies, the Funds have received an opinion from their counsel that
the Adviser is not prohibited from performing the investment advisory services
described above, and that FBS Investment Services, Inc. ("ISI"), a wholly-owned
broker-dealer of the Adviser, is not prohibited from serving as a Participating
Institution as described herein. In the event of changes in federal or state
statutes or regulations or judicial and administrative interpretations or
decisions pertaining to permissible activities of bank holding companies and
their bank and nonbank subsidiaries, the Adviser might be prohibited from
continuing these arrangements. In that event, it is expected that the Board of
Directors would make other arrangements and shareholders would not suffer
adverse financial consequences.
PORTFOLIO MANAGERS
JOSEPH M. ULREY III is portfolio co-manager for each of the Funds. He spent 10
years overseeing various functions in the Treasury and Finance Divisions of
First Bank System before joining the Manager. For the past 4 1/2 years he has
managed assets for individuals and institutional clients of the Manager. Joseph
graduated from Macalester College with a bachelor's degree in
mathematics/economics and went on to the University of Chicago for his master's
in business administration, concentrating in finance.
JAMES D. PALMER is portfolio co-manager for each of the Funds. Jim joined the
Adviser in 1992, prior to which he was a securities lending trader and senior
master trust accountant with First Trust National Association. He holds a
bachelor's degree from the University of Wisconsin -- LaCrosse and a master's of
business administration degree from the University of Minnesota.
CUSTODIAN
The custodian of the Funds' assets is First Trust National Association (the
"Custodian"), First Trust Center, 180 East Fifth Street, St. Paul, Minnesota
55101. The Custodian is a subsidiary of FBS, which also controls the Adviser. As
compensation for its services to the Funds, the Custodian is paid 0.03% of each
Fund's average daily net assets. In addition, the Custodian is reimbursed for
its out-of-pocket expenses incurred in providing services to the Funds.
ADMINISTRATOR
The Administrator, a wholly-owned subsidiary of SEI Corporation ("SEI"),
provides the Funds with certain administrative personnel and services necessary
to operate the Funds. Such services include shareholder servicing and certain
legal and accounting services. The Administrator provides these personnel and
services for compensation at an annual rate equal to 0.07% of each Fund's
average daily net assets, subject to a minimum administrative fee during each
fiscal year of $50,000; provided, that to the extent that the aggregate net
assets of all First American funds exceed $8 billion, the percentage stated
above is reduced to 0.055%.
TRANSFER AGENT
DST Systems, Inc. serves as the transfer agent (the "Transfer Agent") and
dividend disbursing agent for the Funds. The address of the Transfer Agent is
210 West 10th Street, Kansas City, Missouri 64105. The Transfer Agent is not
affiliated with the Distributor, the Administrator or the Adviser.
DISTRIBUTOR
SEI Financial Services Company (the "Distributor") is the principal distributor
for shares of the Funds. The Distributor is a Pennsylvania corporation organized
on July 20, 1981, and is the principal distributor for a number of investment
companies. The Distributor is a wholly-owned subsidiary of SEI and is located at
680 East Swedesford Road, Wayne, Pennsylvania 19087. The Distributor is not
affiliated with the Adviser, First Bank System, Inc., the Custodian and their
respective affiliates.
The Distributor, the Administrator and the Adviser may in their discretion use
their own assets to pay for certain costs of distributing Fund shares. They also
may discontinue any payment of such costs at any time. The Distributor may
engage securities dealers, financial institutions (including, without
limitation, banks), and other industry professionals (the "Participating
Institutions") to perform share distribution and shareholder support services
for the Funds.
ISI, a subsidiary of the Adviser, is a Participating Institution. The Adviser
currently pays ISI 0.25% of the portion of each Fund's average daily net assets
attributable to Class C Shares for which ISI is responsible in connection with
ISI's distribution of shares and/or provision of shareholder support services.
The investment company shares and other securities distributed by the
Distributor are not deposits or obligations of, or endorsed or guaranteed by,
First Bank National Association or its affiliates, and are not insured by the
Bank Insurance Fund, which is administered by the Federal Deposit Insurance
Corporation.
PORTFOLIO TRANSACTIONS
The Funds anticipate being as fully invested as practicable in debt securities.
Most of the Funds' portfolio transactions are effected with dealers at a spread
or markup. The dealer's profit, if any, is the difference, or spread, between
the dealer's purchase and sale price for the obligation. The Funds may authorize
the Adviser to place brokerage orders with some brokers who help distribute the
Funds' shares, if the Adviser reasonably believes that the commission and
transaction quality are comparable to that available from other qualified
brokers. Because the Adviser trades a large number of securities, dealers
generally are willing to work with the Adviser on a more favorable spread to the
Funds than would be possible for most individual investors.
A greater spread may be paid to those firms that provide research services. The
Adviser may use this research information in managing the Funds' assets. The
Adviser uses its best efforts to obtain execution of the Funds' portfolio
transactions at spreads which are reasonable in relation to the benefits
received.
PURCHASE AND REDEMPTION OF SHARES
SHARE PURCHASES AND REDEMPTIONS
Shares are sold and redeemed on days on which the New York Stock Exchange and
the Federal Reserve wire system are open for business ("Business Days"). Payment
for Class C Shares may be made only by wire. Wire transfers of federal funds for
share purchases should be sent to First Bank National Association, Minneapolis,
Minnesota; ABA Number 091000022; For Credit to: DST Systems, Inc.; Account
Number 6023458026; For Further Credit to: (Investor Name and Fund Name). Shares
cannot be purchased by Federal Reserve wire on days on which the New York Stock
Exchange is closed and on federal holidays restricting wire transfers. Orders
placed through a financial institution are considered received when the Fund is
notified of the purchase order. Purchase orders must be received by the
financial institution by the time specified by the institution to be assured
same day processing and purchase orders must be transmitted to and received by
the Funds by 12:00 noon Central time in order for shares to be purchased at that
day's price. It is the financial institution's responsibility to transmit orders
promptly.
Purchase orders will be effective and eligible to receive dividends declared the
same day if the Transfer Agent receives an order before the time specified
above, and the Custodian receives Federal funds before the close of business
that day. Otherwise, the purchase order will be effective the next Business Day.
The purchase price is the net asset value per share, which is expected to remain
constant at $1.00, next determined after the purchase order is effective. The
net asset value per share is calculated as of 3:00 p.m. Central time, each
Business Day based on the amortized cost method. The Funds reserve the right to
reject a purchase order when the Transfer Agent determines that it is not in the
best interest of the Fund and/or Shareholder(s) to accept such purchase order.
The Funds are required to redeem for cash all full and fractional shares of the
Funds. The redemption price is the net asset value per share of the Funds
(normally $1.00 per share) next determined after receipt by the Transfer Agent
of the redemption order.
Redemption orders may be made any time before 12:00 noon Central time, if
redeeming directly through the Fund, or by the time specified by the financial
institution if redeeming through a financial institution, in order to receive
that day's redemption price. For redemption orders received before such times,
payment will be made the same day by transfer of Federal funds. Otherwise,
payment will be made on the next Business Day. Redeemed shares are not entitled
to dividends declared on the day the redemption order is effective.
WHAT SHARES COST
Class C Shares of the Funds are sold at their net asset value next determined
after an order is received and accepted by the applicable Fund. There is no
sales charge imposed on Class C Shares by the Funds. The term "net asset value
per share" or "NAV" refers to the worth or price of one share. NAV is computed
by adding the value of a Fund's securities plus cash and other assets, deducting
liabilities, and then dividing the result by the number of shares outstanding.
Securities in each Fund's portfolio are valued on the basis of amortized cost.
This means valuation assumes a steady rate of payment from the date of purchase
until maturity instead of looking at actual changes in market value. The Funds'
other assets are valued by a method which the Board of Directors believes would
accurately reflect fair value.
The net asset value is determined at 3:00 p.m. Central time, Monday through
Friday, except on (i) days on which there are not sufficient changes in the
value of a Fund's portfolio securities that its net asset value might be
materially affected; (ii) days during which no shares are tendered for
redemption and no orders to purchase shares are received; or (iii) on the
following federal holidays: New Year's Day, Presidents' Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. In addition,
the net asset value will not be calculated on Good Friday.
EXCHANGING SECURITIES FOR FUND SHARES
A Fund may accept securities in exchange for Fund shares. A Fund will allow such
exchanges only upon the prior approval of such Fund and a determination by that
Fund and the Adviser that the securities to be exchanged are acceptable.
Securities accepted by a Fund will be valued in the same manner that a Fund
values its assets. The basis of the exchange will depend upon the net asset
value of the Fund shares on the day the securities are valued.
CERTIFICATES AND CONFIRMATIONS
The Transfer Agent for the Funds maintains a share account for each shareholder
of record. Share certificates are not issued by the Funds. Monthly confirmations
are sent to report transactions such as purchases and redemptions as well as
dividends paid during the month.
DIVIDENDS
Dividends are declared daily and paid monthly. Shares purchased through a Fund
by wire before 12:00 noon Central time begin earning dividends that day. Shares
purchased by check begin earning dividends on the day after the check is
converted into federal funds. Dividends are automatically reinvested in
additional shares of the Funds unless cash payments are requested by contacting
the Funds. Whether dividends are paid in cash or are reinvested in additional
shares, they will be taxable as ordinary income under the Code. The amount of
dividends payable on Class D Shares generally will be less than the dividends
payable on the Class C Shares and more than the dividends payable on Class A and
Class B Shares because Class C Shares are not charged a distribution fee and
Class A and Class B Shares are charged a distribution fee in excess of that
charged to the Class D Shares.
CAPITAL GAINS
The Funds do not expect to incur any capital gains or losses. If, for some
extraordinary reason, the Funds realize net long-term capital gains, they will
distribute them at least once every 12 months.
EXCHANGE PRIVILEGE
Shareholders may exchange Class C Shares of a Fund at net asset value for
currently available Class C Shares of another Fund or other funds in the First
American family. There is currently no fee for this service and the Funds do not
currently contemplate establishing such a charge, although they reserve the
right to do so. The ability to exchange shares of the Funds does not constitute
an offering or recommendation of shares of one fund by another fund. This
privilege is available to shareholders resident in any state in which the fund
shares being acquired may be sold. An investor who is considering acquiring
shares in another First American fund pursuant to the exchange privilege should
obtain and carefully read a prospectus of the fund to be acquired. Exchanges may
be accomplished by a written request, or by telephone if a preauthorized
exchange authorization is on file with the Transfer Agent, shareholder servicing
agent or financial institution. Neither the Transfer Agent nor any Fund will be
responsible for the authenticity of exchange instructions received by telephone
if it reasonably believes those instructions to be genuine. The Funds and the
Transfer Agent will each employ reasonable procedures to confirm that telephone
instructions are genuine, and they may be liable for losses resulting from
unauthorized or fraudulent telephone instructions if they do not employ these
procedures. These procedures may include taping of telephone conversations.
TAXES
The Funds will distribute all of their net income to shareholders. Dividends
will be taxable as ordinary income to shareholders, whether reinvested or
received in cash.
For a more detailed discussion of the taxation of the Funds and the tax
consequences of an investment in the Funds, see "Taxes" in the Statement of
Additional Information.
FUND SHARES
Each share of the Funds is fully paid, nonassessable, and transferable. Shares
may be issued as either full or fractional shares. Fractional shares have pro
rata the same rights and privileges as full shares. Shares of the Funds have no
preemptive or conversion rights.
Each share of the Funds has one vote. On some issues, such as the election of
directors, all shares of all FAF funds vote together as one series. The shares
do not have cumulative voting rights. Consequently, the holders of more than 50%
of the shares voting for the election of directors are able to elect all of the
directors if they choose to do so. On issues affecting only a particular fund or
class, the shares of that fund or class will vote as a separate series. Examples
of such issues would be proposals to alter a fundamental investment restriction
pertaining to a fund or to approve, disapprove or alter a distribution plan
pertaining to a class.
The Bylaws of FAF provide that annual shareholders' meetings are not required
and that meetings of shareholders need be held only with such frequency as
required under Minnesota law and the 1940 Act.
Prior to January 20, 1995 five different mutual funds existed as separate series
of FAF: Money Fund, Institutional Money Fund, CT Government Fund, Institutional
Government Fund and CT Treasury Fund. Effective January 20, 1995, Money Fund was
combined with and into Institutional Money Fund and the combined entity is Prime
Obligations Fund. Also effective on such date, CT Government Fund was combined
with and into Institutional Government Fund and the combined entity is
Government Obligations Fund. In addition, the name of CT Treasury Fund was
changed to Treasury Obligations Fund.
CALCULATION OF PERFORMANCE DATA
From time to time a Fund may advertise its "yield" and "effective yield" in
advertisements or in reports or other communications with shareholders. Both
yield figures are based on historical earnings and are not intended to indicate
future performance. The "yield" of a Fund refers to the income generated by an
investment over a seven-day period (which period will be stated in the
advertisement). This income is then "annualized," that is, the amount of income
generated by the investment during that week is assumed to be generated each
week over a 52-week period and is shown as a percentage of the investment. The
"effective yield" is calculated similarly but, when annualized, the income
earned by an investment in the Fund is assumed to be reinvested. The "effective
yield" will be slightly higher than the "yield" because of the compounding
effect of this assumed reinvestment.
Advertisements and other sales literature for a Fund may refer to the Fund's
"cumulative total return" and "average annual total return." Total return is
based on the overall dollar or percentage change in value of a hypothetical
investment in a Fund assuming dividend distributions are reinvested. A
cumulative total return reflects the Fund's performance over a stated period of
time. An average annual total return reflects the hypothetical annually
compounded rate that would have produced the same cumulative total return if
performance had been constant over the entire period. Because average annual
returns tend to smooth out variations in a Fund's performance, they are not the
same as actual year-by-year results.
Performance quotations are computed separately for Class A, Class B, Class C and
Class D Shares of each Fund. The performance of each class of shares will differ
due to the varying levels of distribution fees and shareholder service fees
applicable to each class.
INVESTMENT RESTRICTIONS AND TECHNIQUES
GENERAL RESTRICTIONS
The Funds are subject to the investment restrictions of Rule 2a-7 under the 1940
Act in addition to their other policies and restrictions discussed below.
Pursuant to Rule 2a-7, each Fund is required to invest exclusively in securities
that mature within 397 days from the date of purchase and to maintain an average
weighted maturity of not more than 90 days. Rule 2a-7 also requires that all
investments by each Fund be limited to United States dollar-denominated
investments that (a) present "minimal credit risk" and (b) are at the time of
acquisition "Eligible Securities." Eligible Securities include, among others,
securities that are rated by two Nationally Recognized Statistical Rating
Organizations ("NRSROs") in one of the two highest categories for short-term
debt obligations, such as A-1 or A-2 by Standard & Poor's Corporation ("Standard
& Poor's"), or Prime-1 or Prime-2 by Moody's Investors Service, Inc.
("Moody's"). It is the responsibility of the Adviser to determine that the
Funds' investments present only "minimal credit risk" and are Eligible
Securities. The Board of Directors of FAF has established written guidelines and
procedures for the Adviser and oversees the Adviser's determination that the
Funds' portfolio securities present only "minimal credit risk" and are Eligible
Securities.
Rule 2a-7 requires, among other things, that each Fund may not invest, other
than in United States "Government Securities" (as defined in the 1940 Act), more
than 5% of its total assets in securities issued by the issuer of the security;
provided, that the Fund may invest in First Tier Securities (as defined in Rule
2a-7) in excess of that limitation for a period of up to three business days
after the purchase thereof provided that the Fund may not make more than one
such investment at any time. Rule 2a-7 also requires that each Fund may not
invest, other than in United States Government securities, (a) more than 5% of
its total assets in Second Tier Securities (i.e., Eligible Securities that are
not rated by two NRSROs in the highest category such as A-1 and Prime-1) and (b)
more than the greater of 1% of its total assets or $1,000,000 in Second Tier
Securities of any one issuer.
Prime Obligations Fund invests in corporate and bank obligations qualifying as
First Tier Securities. In general, First Tier Securities are securities which
are rated, at the time of investment, by at least two NRSROs (one if it is the
only organization rating such obligations) in the highest short-term rating
category or, if unrated, are determined by the Adviser to be of comparable
quality.
In order to provide shareholders with full liquidity, the Funds have implemented
the following practices to maintain a constant price of $1.00 per share:
limiting the portfolio's dollar-weighted average maturity to 90 days or less and
buying securities which mature within 397 days from the date of acquisition. The
Funds cannot guarantee a $1.00 share price but these practices help to minimize
any price fluctuations that might result from rising or declining interest
rates. All money market instruments, including United States Government
securities, can change in value when interest rates or an issuer's
creditworthiness changes. The value of the securities in the Funds' portfolios
can be expected to vary inversely with changes in prevailing interest rates,
with the amount of such variation depending primarily upon the period of time
remaining to maturity of the security. If the security is held to maturity, no
gain or loss will be realized as a result of interest rate fluctuations.
As a fundamental policy, Prime Obligations Fund will not purchase a security if,
as a result: (a) more than 10% of its assets would be in illiquid assets
including time deposits and repurchase agreements maturing in more than seven
days; or (b) 25% or more of its assets would be in any single industry, except
that there is no limitation on the purchase of obligations of domestic
commercial banks (excluding, for this purpose, foreign branches of domestic
commercial banks). Limitation (b) does not apply to obligations issued or
guaranteed by the United States or its agencies or instrumentalities.
The securities in which the Funds invest may not yield as high a level of
current income as longer term or lower grade securities. These other securities
may have less stability of principal, be less liquid, and fluctuate more in
value than the securities in which the Funds invest. All securities in each
Fund's portfolio are purchased with and payable in United States dollars.
Unless otherwise stated, the policies described above in this section and under
"Investment Objectives and Policies" for each Fund are non-fundamental and may
be changed by a vote of the Board of Directors. The Funds have adopted certain
other investment restrictions, which are set forth in detail in the Statement of
Additional Information. These restrictions are fundamental and may not be
changed without the approval of the holders of a majority (as defined in the
1940 Act) of the outstanding shares of the Fund.
If a percentage limitation under this section or "Investment Objectives and
Policies" or under "Investment Restrictions" in the Statement of Additional
Information, is adhered to at the time of an investment, a later increase or
decrease in percentage resulting from changes in values of assets will not
constitute a violation of such limitation except in the case of the limitation
on illiquid investments.
LOAN PARTICIPATIONS; SECTION 4(2) AND RULE 144A SECURITIES
Prime Obligations Fund may invest in loan participation interests. A loan
participation interest represents a pro rata undivided interest in an underlying
bank loan. Participation interests, like the underlying loans, may have fixed,
floating, or variable rates of interest. The bank selling a participation
interest generally acts as a mere conduit between its borrower and the
purchasers of interests in the loan. The purchaser of an interest (for example,
Prime Obligations Fund) generally does not have recourse against the bank in the
event of a default on the underlying loan. Therefore, the credit risk associated
with such instruments is governed by the creditworthiness of the underlying
borrowers and not by the banks selling the interests. Loan participation
interests that can be sold within a seven-day period are deemed by the Adviser
to be liquid investments. If a loan participation interest is restricted from
being sold within a seven-day period, then it, as a fundamental policy, will be
limited, together with other illiquid investments, to not more than 10% of Prime
Obligations Fund's total assets. Commercial paper issued in reliance on the
exemption from registration afforded by Section 4(2) of the Securities Act of
1933 and corporate obligations qualifying for resale to certain "qualified
institutional buyers" pursuant to Rule 144A under the Securities Act of 1933
meet the criteria for liquidity established by the Board of Directors and are
quite liquid. Consequently, Prime Obligations Fund does not intend to subject
such securities to the limitation applicable to restricted securities. Investing
in Rule 144A securities could have the effect of increasing the level of
illiquidity in a Fund to the extent that qualified institutional buyers become,
for a time, uninterested in purchasing these securities.
SECURITIES OF FOREIGN BANKS AND BRANCHES
Because the portfolio of Prime Obligations Fund may contain securities of
foreign branches of domestic banks, foreign banks, and United States branches of
foreign banks, Prime Obligations Fund may be subject to additional investment
risks that are different in some respects from those incurred by a fund that
invests only in debt obligations of United States banks. These risks may include
future unfavorable political and economic developments and possible withholding
taxes, seizure of foreign deposits, currency controls, interest limitations, or
other governmental restrictions which might affect the payment of principal or
interest on securities owned by the Fund. Additionally, there may be less public
information available about foreign banks and their branches. The Adviser
carefully considers these factors when making investments. Prime Obligations
Fund has agreed that, in connection with investment in securities issued by
foreign banks, United States branches of foreign banks, and foreign branches of
domestic banks, consideration will be given to the domestic marketability of
such securities in light of these factors.
UNITED STATES GOVERNMENT SECURITIES
Each Fund may invest in direct obligations of the United States Treasury such as
United States Treasury bonds, notes, and bills. The Treasury securities are
essentially the same except for differences in interest rates, maturities, and
dates of issuance. In addition to Treasury securities, Prime Obligations Fund
and Government Obligations Fund may invest in securities, such as notes, bonds,
and discount notes which are issued or guaranteed by agencies of the United
States Government and various instrumentalities which have been established or
sponsored by the United States Government. Except for United States Treasury
securities, these United States Government obligations, even those which are
guaranteed by federal agencies or instrumentalities, may or may not be backed by
the "full faith and credit" of the United States. In the case of securities not
backed by the full faith and credit of the United States, the investor must look
principally to the agency issuing or guaranteeing the obligation for ultimate
repayment and may not be able to assert a claim against the United States itself
in the event the agency or instrumentality does not meet its commitment. The
Adviser considers securities guaranteed by an irrevocable letter of credit
issued by a government agency to be guaranteed by that agency.
Some of the government agencies that issue or guarantee securities are the
Government National Mortgage Association and the Farmers Home Administration,
and some of the instrumentalities that issue or guarantee securities include the
Export-Import Bank, Federal Farm Credit Banks, Federal Home Loan Banks, and the
Federal Home Loan Mortgage Corporation. Because the United States Treasury is
not obligated by law to provide support to all United States Government
instrumentalities and agencies, Government Obligations Fund and Prime
Obligations Fund will invest in securities issued by such instrumentalities and
agencies only when the Adviser determines that the credit risk with respect to
the instrumentality or agency does not make its securities unsuitable
investments for the Fund.
United States Treasury obligations include bills, notes and bonds issued by the
United States Treasury and separately traded interest and principal component
parts of such obligations that are transferable through the Federal book-entry
system known as Separately Traded Registered Interest and Principal Securities
("STRIPS"). STRIPS are sold as zero coupon securities, which means that they are
sold at a substantial discount and redeemed at face value at their maturity date
without interim cash payments of interest or principal. This discount is
accreted over the life of the security, and such accretion will constitute the
income earned on the security for both accounting and tax purposes. Because of
these features, such securities may be subject to greater interest rate
volatility than interest paying United States Treasury obligations. A Fund's
investments in STRIPS will be limited to components with maturities of less than
397 days and a Fund will not actively trade such components.
REPURCHASE AGREEMENTS
Each Fund may engage in repurchase agreements with respect to any of its
portfolio securities. In a repurchase agreement, a Fund buys a security at one
price and simultaneously promises to sell that same security back to the seller
at a mutually agreed upon time and price. Each Fund may engage in repurchase
agreements with any member bank of the Federal Reserve System or dealer in
United States Government securities. Repurchase agreements usually are for short
periods, such as under one week, not to exceed 30 days. In all cases, the
Adviser must be satisfied with the creditworthiness of the other party to the
agreement before entering a repurchase agreement. In the event of bankruptcy of
the other party to a repurchase agreement, a Fund might experience delays in
recovering its cash. To the extent that, in the meantime, the value of the
securities the Fund purchased may have decreased, the Fund could experience a
loss.
REVERSE REPURCHASE AGREEMENTS
Treasury Obligations Fund may also enter into reverse repurchase agreements.
These transactions are similar to borrowing cash. This Fund will not enter into
reverse repurchase agreements to increase income (leveraging), and it will only
enter into such agreements for temporary or emergency purposes, for the purpose
of meeting redemption requests which might otherwise require the untimely
disposition of assets. In a reverse repurchase agreement, the Fund transfers
possession of a portfolio instrument to another person, such as a financial
institution, broker, or dealer, in return for a percentage of the instrument's
market value in cash, and agrees that on a stipulated date in the future the
Fund will repurchase the portfolio instrument by remitting the original
consideration plus interest at an agreed upon rate. The use of reverse
repurchase agreements may enable Treasury Obligations Fund to avoid selling
portfolio instruments at a time when a sale may be deemed to be disadvantageous,
but the ability to enter into reverse repurchase agreements does not ensure that
Treasury Obligations Fund will be able to avoid selling portfolio instruments at
a disadvantageous time.
When effecting reverse repurchase agreements, liquid assets of Treasury
Obligations Fund, in a dollar amount sufficient to make payment for the
obligations to be purchased, are segregated on the Fund's records at the trade
date. These assets are marked to market daily and are maintained until the
transaction is settled.
During the period any reverse repurchase agreements are outstanding, but only to
the extent necessary to assure completion of the reverse repurchase agreements,
Treasury Obligations Fund will restrict the purchase of portfolio instruments to
money market instruments maturing on or before the expiration date of the
reverse repurchase agreements.
CREDIT ENHANCEMENT AGREEMENTS
Prime Obligations Fund may arrange for guarantees, letters of credit, or other
forms of credit enhancement agreements (collectively, "Guarantees") for the
purpose of further securing the payment of principal and/or interest on the
Fund's investment securities. Although each investment security, at the time it
is purchased, must meet the Fund's creditworthiness criteria, Guarantees
sometimes are purchased from banks and other institutions (collectively,
"Guarantors") when the Adviser, through yield and credit analysis, deems that
credit enhancement of certain of the Fund's securities is advisable. As a
non-fundamental policy, the Fund will limit the value of all investment
securities issued or guaranteed by each Guarantor to not more than 10% of the
value of the Fund's total assets.
LENDING OF PORTFOLIO SECURITIES
Each Fund may from time to time lend securities from its portfolio to brokers,
dealers, and financial institutions and receive collateral in cash or securities
issued or guaranteed by the United States Government which will be maintained at
all times in an amount equal to at least 100% of the current value of the loaned
securities. Such loans may not exceed one-third of the value of the lending
Fund's total assets. For additional information, see "Investment Restrictions"
in the Statement of Additional Information.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES
Each Fund may purchase the securities described above with respect to such Funds
on a when-issued or delayed delivery basis. The settlement dates for these types
of transactions are determined by mutual agreement of the parties and may occur
a month or more after the parties have agreed to the transaction. Securities
purchased on a when-issued or delayed delivery basis are subject to market
fluctuation and no interest accrues to the Fund during the period prior to
settlement. At the time a Fund commits to purchase securities on a when-issued
or delayed delivery basis, it will record the transaction and thereafter reflect
the value, each day, of such security in determining its net asset value. At the
time of delivery of the securities, the value may be more or less than the
purchase price. Each Fund will also establish a segregated account with its
Custodian in which it will maintain cash or cash equivalents or other portfolio
securities equal in value to commitments for such when-issued or delayed
delivery securities. The Funds will not purchase securities on a when-issued or
delayed delivery basis if, as a result thereof, more than 15% of that Fund's net
assets would be so invested.
MONEY MARKET FUNDS
Each of the Funds may invest, to the extent permitted by the 1940 Act, in
securities issued by other money market funds, provided that the permitted
investments of such other money market funds constitute permitted investments of
the investing Fund. The Adviser will waive its advisory fee on amounts which are
invested in such other money market funds. Subject to the receipt of exemptive
relief under the 1940 Act, the money market funds in which a Fund may invest
include other of the Funds.
FIRST AMERICAN FUNDS, INC.
680 East Swedesford Road
Wayne, Pennsylvania 19087
INVESTMENT ADVISER
FIRST BANK NATIONAL ASSOCIATION
601 Second Avenue South
Minneapolis, Minnesota 55402
CUSTODIAN
FIRST TRUST NATIONAL ASSOCIATION
180 East Fifth Street
St. Paul, Minnesota 55101
DISTRIBUTOR
SEI FINANCIAL SERVICES COMPANY
680 East Swedesford Road
Wayne, Pennsylvania 19087
ADMINISTRATOR
SEI FINANCIAL MANAGEMENT
CORPORATION
680 East Swedesford Road
Wayne, Pennsylvania 19087
TRANSFER AGENT
DST SYSTEMS, INC.
210 West 10th Street
Kansas City, Missouri 64105
INDEPENDENT AUDITORS
KPMG PEAT MARWICK LLP
90 South Seventh Street
Minneapolis, Minnesota 55402
COUNSEL
DORSEY & WHITNEY P.L.L.P.
220 South Sixth Street
Minneapolis, Minnesota 55402
FIRST AMERICAN FUNDS, INC.
MONEY MARKET FUNDS
CORPORATE TRUST CLASS
PRIME OBLIGATIONS FUND GOVERNMENT OBLIGATIONS FUND
TREASURY OBLIGATIONS FUND
PROSPECTUS
JANUARY 31, 1996
[logo] FIRST AMERICAN FUNDS
The power of disciplined investing
FIRST AMERICAN FUNDS, INC.
680 East Swedesford Road, Wayne, Pennsylvania 19087
CORPORATE TRUST CLASS PROSPECTUS
The shares described in this Prospectus represent interests in First
American Funds, Inc., which consists of mutual funds with three different
investment portfolios and objectives. This Prospectus relates to the Class
D Shares of the following funds (the "Funds"):
* PRIME OBLIGATIONS FUND * GOVERNMENT OBLIGATIONS FUND
* TREASURY OBLIGATIONS FUND
Class D Shares of the Funds are offered to corporations and certain
governmental entities.
Each Fund seeks to achieve maximum current income to the extent consistent
with the preservation of capital and maintenance of liquidity. Each Fund
has its own policies designed to meet the investment objective. Prime
Obligations Fund pursues this objective by investing in a variety of money
market instruments maturing within 397 days. Government Obligations Fund
pursues this objective by investing only in United States Government
securities maturing within 397 days and repurchase agreements with respect
to such securities. Treasury Obligations Fund pursues this objective by
investing in United States Treasury obligations and repurchase and reverse
repurchase agreements with respect to such obligations. Each Fund is a
diversified open-end mutual fund.
SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, INCLUDING FIRST BANK NATIONAL ASSOCIATION OR ANY OF
ITS AFFILIATES, NOR ARE THEY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. AN INVESTMENT
IN THE FUNDS INVOLVES INVESTMENT RISK, INCLUDING POSSIBLE LOSS OF
PRINCIPAL.
This Prospectus sets forth concisely information about the Funds that a
prospective investor should know before investing. It should be read and
retained for future reference.
A Statement of Additional Information dated January 31, 1996 for the Funds
has been filed with the Securities and Exchange Commission and is
incorporated in its entirety by reference in this Prospectus. To obtain
copies of the Statement of Additional Information at no charge, or to
obtain other information or make inquiries about the Funds, call (800)
637-2548 or write SEI Financial Services Company, 680 East Swedesford Road,
Wayne, Pennsylvania 19087.
AN INVESTMENT IN A FUND IS NEITHER INSURED NOR GUARANTEED BY THE UNITED
STATES GOVERNMENT, AND THERE IS NO ASSURANCE THAT ANY OF THE FUNDS WILL BE
ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is January 31, 1996.
TABLE OF CONTENTS
PAGE
SUMMARY OF FUND EXPENSES 4
Class D Share Fees and Expenses 4
Information Concerning Fees and
Expenses 5
FINANCIAL HIGHLIGHTS 6
THE FUNDS 8
INVESTMENT OBJECTIVES AND POLICIES 8
Prime Obligations Fund 8
Government Obligations Fund 9
Treasury Obligations Fund 9
MANAGEMENT OF THE FUNDS 9
Investment Adviser 10
Portfolio Managers 11
Custodian 11
Administrator 11
Transfer Agent 11
DISTRIBUTOR 12
PORTFOLIO TRANSACTIONS 13
PURCHASE AND REDEMPTION OF SHARES 13
Share Purchases and Redemptions 13
What Shares Cost 14
Exchanging Securities for Fund Shares 15
Certificates and Confirmations 15
Dividends 15
Capital Gains 15
TAXES 16
FUND SHARES 16
CALCULATION OF PERFORMANCE DATA 16
INVESTMENT RESTRICTIONS AND
TECHNIQUES 17
General Restrictions 17
Loan Participations; Section 4(2) and
Rule 144A Securities 19
Securities of Foreign Banks and
Branches 20
United States Government Securities 20
Repurchase Agreements 21
Reverse Repurchase Agreements 21
Credit Enhancement Agreements 22
Lending of Portfolio Securities 22
When-Issued and Delayed Delivery
Securities 23
Money Market Funds 23
SUMMARY OF FUND EXPENSES
CLASS D SHARE FEES AND EXPENSES
PRIME GOVERNMENT TREASURY
OBLIGATIONS OBLIGATIONS OBLIGATIONS
FUND FUND FUND
SHAREHOLDER TRANSACTION EXPENSES
Maximum sales load imposed on purchases None None None
Maximum sales load imposed on reinvested
dividends None None None
Deferred sales load None None None
Redemption fees None None None
Exchange fees None None None
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
Investment advisory fees (after voluntary
fee waivers and reimbursements)(1) 0.28% 0.30% 0.33%
Rule 12b-1 fees 0.15% 0.15% 0.15%
Other expenses (after voluntary fee
waivers and reimbursements)(1) 0.17% 0.15% 0.12%
Total fund operating expenses
(after voluntary fee waivers and
reimbursements)(1) 0.60% 0.60% 0.60%
EXAMPLE(2)
You would pay the following expenses on a $1,000 investment, assuming (i) a 5%
annual return, and (ii) redemption at the end of each time period:
1 year $ 6 $ 6 $ 6
3 years $ 19 $ 19 $ 19
5 years $ 33 $ 33 $ 33
10 years $ 75 $ 75 $ 75
(1) First Bank National Association, the investment adviser for the Funds,
intends to waive a portion of its fees and/or reimburse expenses on a
voluntary basis, and the amounts shown above reflect these waivers and
reimbursements as of the date of this Prospectus. The Funds' investment
adviser intends to maintain such waivers and reimbursements for the current
fiscal year but reserves the right to terminate its waiver and to
discontinue expense reimbursement at any time thereafter in its sole
discretion. Absent any fee waivers, investment advisory fees for each Fund
as an annualized percentage of average daily net assets would be 0.40%; and
total fund operating expenses with respect to Class D Shares calculated on
such basis would be 0.72% for Prime Obligations Fund, 0.70% for Government
Obligations Fund and 0.70% for Treasury Obligations Fund. Other expenses
include an annual administration fee.
(2) Absent the voluntary reduction of fees the dollar amounts for the 1, 3, 5,
and 10 year periods in the example above would be as follows: Prime
Obligations Fund, $7, $23, $40 and $89; Government Obligations Fund, $7,
$22, $39 and $87; and Treasury Obligations Fund, $7, $22, $39 and $87.
INFORMATION CONCERNING FEES AND EXPENSES
The purpose of the preceding table is to assist the investor in understanding
the various costs and expenses that an investor in a Fund may bear directly or
indirectly. THE DATA CONTAINED IN THE TABLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR
LESS THAN THOSE SHOWN. The information set forth in the tables relates only to
the Class D Shares of the Funds. The Funds also offer Class A, Class B and Class
C Shares which may be subject to different expenses and sales charges.
Investment advisory fees are paid by each Fund to First Bank National
Association (the "Adviser") for managing its investments. The examples in the
above table are based on projected annual operating expenses for each Fund after
voluntary fee waivers and expense reimbursements by the Adviser. Prior to fee
waivers, investment advisory fees accrue at the annual rate of 0.40% of the
average daily net assets of each Fund. Other expenses include administrative
fees which are paid by each Fund to SEI Financial Management Corporation (the
"Administrator") for providing various services necessary to operate the Funds.
These include shareholder servicing and certain accounting and other services.
The Administrator provides these services for a fee calculated as described
under "Management of the Fund -- Administrator" below.
The Class D Shares of each Fund may pay a distribution and servicing fee to SEI
Financial Services Company (the "Distributor"), each Fund's distributor, in an
amount equalling 0.15% of the annual average daily net assets attributable to
the Class D Shares of each Fund. Due to the payment of such fees, long term
shareholders may pay more than the equivalent of the maximum front-end sales
charges otherwise permitted by NASD rules.
FINANCIAL HIGHLIGHTS
The following financial highlights have been audited by KPMG Peat Marwick LLP,
independent auditors, and should be read in conjunction with the Funds'
financial statements and the related notes thereto appearing in their Annual
Report to Shareholders for the year ended September 30, 1995.
The information set forth below shows performance for Class C and Class D
Shares. Class C performance is included for historical purposes only. The
respective classes of shares are subject to different expenses.
For the periods ended September 30,
For a share outstanding throughout the period
DIVIDENDS
NET ASSET VALUE NET FROM NET
BEGINNING OF INVESTMENT INVESTMENT
PERIOD INCOME INCOME
PRIME OBLIGATIONS FUND
Class C
1995 $1.00 $0.055 $(0.055)
1994 1.00 0.035 (0.035)
1993 1.00 0.030 (0.030)
1992 1.00 0.039 (0.039)
1991 1.00 0.064 (0.064)
1990(1) 1.00 0.046 (0.046)
Class D
1995(2)* $1.00 $0.038 $(0.038)
GOVERNMENT OBLIGATIONS FUND
Class C
1995 $1.00 $0.054 $(0.054)
1994 1.00 0.034 (0.034)
1993 1.00 0.028 (0.028)
1992 1.00 0.038 (0.038)
1991 1.00 0.060 (0.060)
1990(1) 1.00 0.045 (0.045)
Class D
1995(3)* $1.00 $0.038 $(0.038)
TREASURY OBLIGATIONS FUND
Class C
1995(2) $1.00 $0.038 $(0.038)
Class D
1995 $1.00 $0.051 $(0.051)
1994(4) 1.00 0.031 (0.031)
+ Returns are for the period indicated and have not been annualized.
* All ratios for the periods have been annualized.
(1) Commenced operations on March 1, 1990. All ratios for the period have been
annualized.
(2) Commenced operations on January 24, 1995. All ratios for the period have
been annualized.
(3) Commenced operations on January 21, 1995. All ratios for the period have
been annualized.
(4) Commenced operations on October 4, 1993. All ratios for the period have
been annualized.
<TABLE>
<CAPTION>
RATIO OF
RATIO OF NET EXPENSES TO
RATIO OF INVESTMENT AVERAGE NET
NET ASSET NET ASSETS END EXPENSES TO INCOME TO ASSETS
VALUE END OF PERIOD AVERAGE NET AVERAGE NET (EXCLUDING
OF PERIOD TOTAL RETURN (000) ASSETS ASSETS WAIVERS)
<S> <C> <C> <C> <C> <C> <C>
$1.00 5.64% $2,911,055 0.45% 5.53% 0.60%
1.00 3.56 1,307,347 0.45 3.58 0.60
1.00 3.02 682,988 0.45 2.97 0.62
1.00 4.02 203,765 0.45 3.90 0.59
1.00 6.60 193,650 0.45 6.43 0.57
1.00 4.73+ 239,231 0.45 7.90 0.55
$1.00 3.86%+ $ 9,735 0.60% 5.51% 0.72%
$1.00 5.55% $ 551,286 0.45% 5.44% 0.60%
1.00 3.48 455,869 0.45 3.61 0.61
1.00 2.87 237,331 0.45 2.83 0.65
1.00 3.85 93,770 0.45 3.71 0.64
1.00 6.22 72,824 0.45 5.90 0.68
1.00 4.56+ 29,704 0.45 7.60 0.98
$1.00 3.85%+ $ 198,859 0.60% 5.45% 0.70%
$1.00 3.83%+ $ 117,171 0.45% 5.50% 0.55%
$1.00 5.22% $1,038,818 0.60% 5.13% 0.70%
1.00 3.12+ 746,090 0.58 3.19 0.68
</TABLE>
THE FUNDS
First American Funds, Inc. ("FAF") is an open-end management investment company
which offers its shares in three different mutual funds, each of which evidences
an interest in a separate and distinct investment portfolio. Shareholders may
purchase shares in each Fund through separate classes which provide for
variations in distribution costs, voting rights and dividends. Except for these
differences among classes, each share of each Fund represents an undivided
proportionate interest in that Fund. FAF is incorporated under the laws of the
State of Minnesota, and its principal offices are located at 680 East Swedesford
Road, Wayne, Pennsylvania 19087.
This Prospectus relates only to the Class D Shares of the Funds named on the
cover hereof. Information regarding the Class C Shares of the Funds and the
Class A and Class B Shares of the Prime Obligations Fund is contained in
separate prospectuses that may be obtained from the Funds' Distributor, SEI
Financial Services Company, 680 East Swedesford Road, Wayne, Pennsylvania 19087,
or by calling (800) 637-2548. The Board of Directors of FAF may authorize
additional series or classes of common stock in the future.
INVESTMENT OBJECTIVES AND POLICIES
As a fundamental investment objective, each Fund seeks to achieve maximum
current income to the extent consistent with the preservation of capital and the
maintenance of liquidity. As discussed below, each Fund pursues different
strategies in seeking to achieve this investment objective. The Adviser will
purchase investments for each Fund consistent with such investment objective and
that meet the quality characteristics established for each Fund. A Fund's
investment objective may not be changed without an affirmative vote of the
holders of a majority (as defined in the Investment Company Act of 1940, as
amended (the "1940 Act")) of the outstanding shares of such Fund. The Funds may
not always achieve their objectives.
PRIME OBLIGATIONS FUND
In seeking to achieve its investment objective, Prime Obligations Fund invests
in money market instruments, including marketable securities issued or
guaranteed by the United States Government or its agencies or instrumentalities;
United States dollar-denominated obligations (including bankers' acceptances,
time deposits, and certificates of deposit, including variable rate certificates
of deposit) of banks (including commercial banks, savings banks, and savings and
loan associations) organized under the laws of the United States or any state,
foreign banks, United States branches of foreign banks, and foreign branches of
United States banks, if such banks have total assets of not less than $500
million; and certain corporate and other obligations, including high grade
commercial paper, non-convertible corporate debt securities, and loan
participation interests with no more than 397 days remaining to maturity. For
more information on these types of securities, see "Investment Restrictions and
Techniques" below.
Prime Obligations Fund may also (i) engage in repurchase agreements with respect
to any of its portfolio securities, (ii) purchase credit enhancement agreements
to enhance the creditworthiness of its portfolio securities, (iii) lend
securities from its portfolio, or (iv) purchase the securities described above
on a when-issued or delayed delivery basis. For more information on these
techniques, see "Investment Restrictions and Techniques" below.
The Fund may invest (i) up to 25% of its total assets in dollar-denominated
obligations of United States branches of foreign banks which are subject to the
same regulation as United States banks, and (ii) up to 25% of its total assets
collectively in dollar-denominated obligations of foreign branches of domestic
banks, foreign banks, and foreign corporations. The Fund may invest in United
States dollar-denominated obligations of foreign corporations if the obligations
satisfy the same quality standards set forth above for domestic corporations.
See "Investment Restrictions and Techniques" for a discussion of the risks
relating to investments in such securities.
GOVERNMENT OBLIGATIONS FUND
In seeking to achieve its investment objective, Government Obligations Fund
invests exclusively in United States Government securities maturing within 397
days, and in repurchase agreements relating to such securities. The Fund may
also purchase such securities on a when-issued or delayed delivery basis and
lend securities from its portfolio. For a discussion of these securities and
techniques, see "Investment Restrictions and Techniques" below.
TREASURY OBLIGATIONS FUND
In seeking to achieve its investment objective, Treasury Obligations Fund
invests in United States Treasury obligations maturing within 397 days or less
and repurchase agreements and reverse repurchase agreements relating to such
securities. The Fund may also purchase such securities on a when-issued or
delayed delivery basis and lend securities from its portfolio. For a
discussion of these securities and techniques, see "Investment Restrictions
and Techniques" below.
MANAGEMENT OF THE FUNDS
The Board of Directors of FAF has the primary responsibility for overseeing the
overall management and electing other officers of FAF. Subject to the overall
direction and supervision of the Board of Directors, the Adviser acts as
investment adviser for and manages the investment portfolios of FAF.
INVESTMENT ADVISER
First Bank National Association, 601 Second Avenue South, Minneapolis, Minnesota
55480, acts as the Funds' investment adviser through its First Asset Management
group. The Adviser provides the Funds with investment research and portfolio
management. As of September 30, 1995, the Adviser was managing accounts with an
aggregate value of approximately $29 billion, including mutual fund assets in
excess of $7 billion. First Bank System, Inc., 601 Second Avenue South,
Minneapolis, Minnesota 55480, is the holding company for the Adviser.
Each Fund pays the Adviser a monthly fee equal, on an annual basis, to 0.40% of
the Fund's average daily net assets. The Adviser may, at its option, waive any
or all of its fees, or reimburse expenses, with respect to one or more of the
Funds from time to time. Any such waiver or reimbursement is voluntary and may
be discontinued at any time. The Adviser also may absorb or reimburse expenses
of a Fund from time to time, in its discretion, while retaining the ability to
be reimbursed by the Fund for such amounts prior to the end of the fiscal year.
This practice would have the effect of lowering the Fund's overall expense ratio
and of increasing yield to investors, or the converse, at the time such amounts
are absorbed or reimbursed, as the case may be.
The Glass-Steagall Act generally prohibits banks from engaging in the business
of underwriting, selling, or distributing securities and from being affiliated
with companies principally engaged in those activities. In addition,
administrative and judicial interpretations of the Glass-Steagall Act prohibit
bank holding companies and their bank and nonbank subsidiaries from organizing,
sponsoring, or controlling registered open-end investment companies that are
continuously engaged in distributing their shares. Bank holding companies and
their bank and nonbank subsidiaries may serve, however, as investment advisers
to registered investment companies, subject to a number of terms and conditions.
Although the scope of the prohibitions and limitations imposed by the
Glass-Steagall Act has not been fully defined by the courts or the appropriate
regulatory agencies, the Funds have received an opinion from their counsel that
the Adviser is not prohibited from performing the investment advisory services
described above, and that FBS Investment Services, Inc. ("ISI") , a wholly-owned
broker-dealer of the Adviser, is not prohibited from serving as a Participating
Institution as described herein. In the event of changes in federal or state
statutes or regulations or judicial and administrative interpretations or
decisions pertaining to permissible activities of bank holding companies and
their bank and nonbank subsidiaries, the Adviser might be prohibited from
continuing these arrangements. In that event, it is expected that the Board of
Directors would make other arrangements and shareholders would not suffer
adverse financial consequences.
PORTFOLIO MANAGERS
JOSEPH ULREY III is portfolio co-manager for each of the Funds. He spent 10
years overseeing various functions in the Treasury and Finance Divisions of
First Bank System before joining the Adviser. For the past 4 1/2 years he has
managed assets for individuals and institutional clients of the Adviser. Joseph
graduated from Macalester College with a bachelor's degree in
mathematics/economics and went on to the University of Chicago for his master's
in business administration, concentrating in finance.
JAMES D. PALMER is portfolio co-manager for each of the Funds. Jim joined the
Adviser in 1992, prior to which he was a securities lending trader and senior
master trust accountant with First Trust National Association. He holds a
bachelor's degree from the University of Wisconsin -- LaCrosse and a master's of
business administration degree from the University of Minnesota.
CUSTODIAN
The custodian of the Funds' assets is First Trust National Association (the
"Custodian"), First Trust Center, 180 East Fifth Street, St. Paul, Minnesota
55101. The Custodian is a subsidiary of FBS, which also controls the Adviser. As
compensation for its services to the Funds, the Custodian is paid 0.03% of each
Fund's average daily net assets. In addition, the Custodian is reimbursed for
its out-of-pocket expenses incurred in providing services to the Funds.
ADMINISTRATOR
The Administrator, a wholly-owned subsidiary of SEI Corporation ("SEI"),
provides the Funds with certain administrative personnel and services necessary
to operate the Funds. Such services include shareholder servicing and certain
legal and accounting services. The Administrator provides these personnel and
services for compensation at an annual rate equal to 0.07% of each Fund's
average daily net assets subject to a minimum administrative fee during each
fiscal year of $50,000; provided, that to the extent the aggregate net assets of
all First American funds exceed $8 billion, the percentage stated above is
reduced to 0.055%.
TRANSFER AGENT
DST Systems, Inc. serves as the transfer agent (the "Transfer Agent") and
dividend disbursing agent for the Funds. The address of the Transfer Agent is
210 West 10th Street, Kansas City, Missouri 64105. The Transfer Agent is not
affiliated with the Distributor, the Administrator or the Adviser.
DISTRIBUTOR
SEI Financial Services Company (the "Distributor") is the principal distributor
for shares of the Funds. The Distributor is a Pennsylvania corporation organized
on July 20, 1981, and is the principal distributor for a number of investment
companies. The Distributor is a wholly-owned subsidiary of SEI and is located at
680 East Swedesford Road, Wayne, Pennsylvania 19087. The Distributor is not
affiliated with the Adviser, First Bank System, Inc., the Custodian and their
respective affiliates.
FAF has adopted a Plan of Distribution with respect to the Class D Shares of
each Fund (the "Plan") pursuant to Rule 12b-1 under the 1940 Act and has entered
into a Distribution Agreement with the Distributor on behalf of the Class D
Shares of the Funds (the "Distribution Agreement"). Under the Plan and the
Distribution Agreement, each Fund pays the Distributor a distribution and
servicing fee monthly at an annual rate of 0.15% of the Fund's Class D Shares'
average daily net assets. The distribution and servicing fee paid to the
Distributor may be used by the Distributor to compensate broker-dealers,
including the Distributor and the Distributor's registered representatives, for
their sale of Fund shares, and may also be used to pay other advertising and
promotional expenses in connection with the distribution of Fund shares and
expenses in connection with the ongoing servicing and maintaining of shareholder
accounts.
The Plan recognizes that the Distributor, the Administrator and the Adviser may
in their discretion use their own assets to pay for certain costs of
distributing Fund shares. Any such arrangement to pay such additional costs may
be in the form of cash or promotional incentives and may be commenced or
discontinued by the Adviser, the Administrator, the Distributor, or any
Participating Institutions (as defined below) at any time. The Distributor may
engage securities dealers, financial institutions (including, without
limitation, banks), and other industry professionals (the "Participating
Institutions") to perform share distribution and shareholder support services
for the Funds. ISI, a subsidiary of the Adviser, is a Participating Institution.
The investment company shares and other securities distributed by the
Distributor are not deposits or obligations of, or endorsed or guaranteed by,
First Bank National Association or its affiliates, and are not insured by the
Bank Insurance Fund, which is administered by the Federal Deposit Insurance
Corporation.
PORTFOLIO TRANSACTIONS
The Funds anticipate being as fully invested as practicable in debt securities.
Most of the Funds' portfolio transactions are effected with dealers at a spread
or markup. The dealer's profit, if any, is the difference, or spread, between
the dealer's purchase and sale price for the obligation. The Funds may authorize
the Adviser to place brokerage orders with some brokers who help distribute the
Funds' shares, if the Adviser reasonably believes that the commission and
transaction quality are comparable to that available from other qualified
brokers. Because the Adviser trades a large number of securities, dealers
generally are willing to work with the Adviser on a more favorable spread to the
Funds than would be possible for most individual investors.
A greater spread may be paid to those firms that provide research services. The
Adviser may use this research information in managing the Funds' assets. The
Adviser uses its best efforts to obtain execution of the Funds' portfolio
transactions at spreads which are reasonable in relation to the benefits
received.
PURCHASE AND REDEMPTION OF SHARES
SHARE PURCHASES AND REDEMPTIONS
Shares are sold and redeemed on days on which the New York Stock Exchange and
the Federal Reserve wire system are open for business ("Business Days"). Payment
for Class D Shares may be made only by wire. Wire transfers of federal funds for
share purchases should be sent to First Bank National Association, Minneapolis,
Minnesota; ABA Number 091000022; For Credit to: DST Systems, Inc., Account
Number 6023458026; For Further Credit to: (Investor Name and Fund Name). Shares
cannot be purchased by Federal Reserve wire on days on which the New York Stock
Exchange is closed and on federal holidays restricting wire transfers. Orders
placed through a financial institution are considered received when the Fund is
notified of the purchase order. Purchase orders must be received by the
financial institution by the time specified by the institution to be assured
same day processing and purchase orders must be transmitted to and received by
the Funds by 12:00 noon Central time in order for shares to be purchased at that
day's price. It is the financial institution's responsibility to transmit orders
promptly.
Purchase orders will be effective and eligible to receive dividends declared the
same day if the Transfer Agent receives an order before the time specified
above, and the Custodian receives Federal funds before the close of business
that day. Otherwise, the purchase order will be effective the next Business Day.
The purchase price is the net asset value per share, which is expected to remain
constant at $1.00, next determined after the purchase order is effective. The
net asset value per share is calculated as of 3:00 p.m. Central time, each
Business Day based on the amortized cost method. The Funds reserve the right to
reject a purchase order when the Transfer Agent determines that it is not in the
best interest of the Fund and/or Shareholder(s) to accept such purchase order.
The Funds are required to redeem for cash all full and fractional shares of the
Funds. The redemption price is the net asset value per share of the Funds
(normally $1.00 per share) next determined after receipt by the Transfer Agent
of the redemption order.
Redemption orders may be made any time before 12:00 noon Central time, if
redeeming directly through the Fund, or by the time specified by the financial
institution if redeeming through a financial institution, in order to receive
that day's redemption price. For redemption orders received before such times,
payment will be made the same day by transfer of Federal funds. Otherwise,
payment will be made on the next Business Day. Redeemed shares are not entitled
to dividends declared on the day the redemption order is effective.
WHAT SHARES COST
Class D Shares of the Funds are sold at their net asset value next determined
after an order is received and accepted by the applicable Fund. There is no
sales charge imposed on Class D Shares by the Funds. The term "net asset value
per share" or "NAV" refers to the worth or price of one share. NAV is computed
by adding the value of a Fund's securities plus cash and other assets, deducting
liabilities, and then dividing the result by the number of shares outstanding.
Securities in each Fund's portfolio are valued on the basis of amortized cost.
This means valuation assumes a steady rate of payment from the date of purchase
until maturity instead of looking at actual changes in market value. The Funds'
other assets are valued by a method which the Board of Directors believes would
accurately reflect fair value.
The net asset value is determined at 3:00 p.m. Central time, Monday through
Friday, except on (i) days on which there are not sufficient changes in the
value of a Fund's portfolio securities that its net asset value might be
materially affected; (ii) days during which no shares are tendered for
redemption and no orders to purchase shares are received; or (iii) on the
following federal holidays: New Year's Day, Presidents' Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. In addition,
the net asset value will not be calculated on Good Friday.
EXCHANGING SECURITIES FOR FUND SHARES
A Fund may accept securities in exchange for Fund shares. A Fund will allow such
exchanges only upon the prior approval of such Fund and a determination by that
Fund and the Adviser that the securities to be exchanged are acceptable.
Securities accepted by a Fund will be valued in the same manner that a Fund
values its assets. The basis of the exchange will depend upon the net asset
value of the Fund shares on the day the securities are valued.
CERTIFICATES AND CONFIRMATIONS
The Transfer Agent for the Funds maintains a share account for each shareholder
of record. Share certificates are not issued by the Funds. Monthly confirmations
are sent to report transactions such as purchases and redemptions as well as
dividends paid during the month.
DIVIDENDS
Dividends are declared daily and paid monthly. Shares purchased through a Fund
by wire before 12:00 noon Central time begin earning dividends that day. Shares
purchased by check begin earning dividends on the day after the check is
converted into federal funds. Dividends are automatically reinvested in
additional shares of the Funds unless cash payments are requested by contacting
the Funds. Whether dividends are paid in cash or are reinvested in additional
shares, they will be taxable as ordinary income under the Code. The amount of
dividends payable on Class D Shares generally will be less than the dividends
payable on the Class C Shares and more than the dividends payable on Class A and
Class B Shares because Class C Shares are not charged a distribution fee and
Class A and Class B Shares are charged a distribution fee in excess of that
charged to the Class D Shares.
CAPITAL GAINS
The Funds do not expect to incur any capital gains or losses. If, for some
extraordinary reason, the Funds realize net long-term capital gains, they will
distribute them at least once every 12 months.
TAXES
The Funds will distribute all of their net income to shareholders. Dividends
will be taxable as ordinary income to shareholders, whether reinvested or
received in cash.
For a more detailed discussion of the taxation of the Funds and the tax
consequences of an investment in the Funds, see "Taxes" in the Statement of
Additional Information.
FUND SHARES
Each share of the Funds is fully paid, nonassessable, and transferable. Shares
may be issued as either full or fractional shares. Fractional shares have pro
rata the same rights and privileges as full shares. Shares of the Funds have no
preemptive or conversion rights.
Each share of the Funds has one vote. On some issues, such as the election of
directors, all shares of all FAF funds vote together as one series. The shares
do not have cumulative voting rights. Consequently, the holders of more than 50%
of the shares voting for the election of directors are able to elect all of the
directors if they choose to do so. On issues affecting only a particular fund or
class, the shares of that fund or class will vote as a separate series. Examples
of such issues would be proposals to alter a fundamental investment restriction
pertaining to a fund or to approve, disapprove or alter a distribution plan
pertaining to a class.
The Bylaws of FAF provide that annual shareholders' meetings are not required
and that meetings of shareholders need be held only with such frequency as
required under Minnesota law and the 1940 Act.
Prior to January 20, 1995 five different mutual funds existed as separate series
of FAF: Money Fund, Institutional Money Fund, CT Government Fund, Institutional
Government Fund and CT Treasury Fund. Effective January 20, 1995, Money Fund was
combined with and into Institutional Money Fund and the combined entity is Prime
Obligations Fund. Also effective on such date, CT Government Fund was combined
with and into Institutional Government Fund and the combined entity is
Government Obligations Fund. In addition, the name of CT Treasury Fund was
changed to Treasury Obligations Fund.
CALCULATION OF PERFORMANCE DATA
From time to time a Fund may advertise its "yield" and "effective yield" in
advertisements or in reports or other communications with shareholders. Both
yield figures are based on historical earnings and are not intended to indicate
future performance. The "yield" of a Fund refers to the income generated by an
investment over a seven-day period (which period will be stated in the
advertisement). This income is then "annualized," that is, the amount of income
generated by the investment during that week is assumed to be generated each
week over a 52-week period and is shown as a percentage of the investment. The
"effective yield" is calculated similarly but, when annualized, the income
earned by an investment in the Fund is assumed to be reinvested. The "effective
yield" will be slightly higher than the "yield" because of the compounding
effect of this assumed reinvestment.
Advertisements and other sales literature for a Fund may refer to the Fund's
"cumulative total return" and "average annual total return." Total return is
based on the overall dollar or percentage change in value of a hypothetical
investment in a Fund assuming dividend distributions are reinvested. A
cumulative total return reflects the Fund's performance over a stated period of
time. An average annual total return reflects the hypothetical annually
compounded rate that would have produced the same cumulative total return if
performance had been constant over the entire period. Because average annual
returns tend to smooth out variations in a Fund's performance, they are not
the same as actual year-by-year results.
Performance quotations are computed separately for Class A, Class B, Class C and
Class D Shares of each Fund. The performance of each class will differ due to
the varying levels of distribution fees and shareholder service fees applicable
to each class.
INVESTMENT RESTRICTIONS AND TECHNIQUES
GENERAL RESTRICTIONS
The Funds are subject to the investment restrictions of Rule 2a-7 under the 1940
Act in addition to their other policies and restrictions discussed below.
Pursuant to Rule 2a-7, each Fund is required to invest exclusively in securities
that mature within 397 days from the date of purchase and to maintain an average
weighted maturity of not more than 90 days. Rule 2a-7 also requires that all
investments by each Fund be limited to United States dollar-denominated
investments that (a) present "minimal credit risk" and (b) are at the time of
acquisition "Eligible Securities." Eligible Securities include, among others,
securities that are rated by two Nationally Recognized Statistical Rating
Organizations ("NRSROs") in one of the two highest categories for short-term
debt obligations, such as A-1 or A-2 by Standard & Poor's Corporation ("Standard
& Poor's"), or Prime-1 or Prime-2 by Moody's Investors Service, Inc.
("Moody's"). It is the responsibility of the Adviser to determine that the
Funds' investments present only "minimal credit risk" and are Eligible
Securities. The Board of Directors of FAF has established written guidelines and
procedures for the Adviser and oversees the Adviser's determination that the
Funds' portfolio securities present only "minimal credit risk" and are Eligible
Securities.
Rule 2a-7 requires, among other things, that each Fund may not invest, other
than in United States "Government Securities" (as defined in the 1940 Act), more
than 5% of its total assets in securities issued by the issuer of the security;
provided, that the Fund may invest in First Tier Securities (as defined in Rule
2a-7) in excess of that limitation for a period of up to three business days
after the purchase thereof provided that the Fund may not make more than one
such investment at any time. Rule 2a-7 also requires that each Fund may not
invest, other than in United States Government securities, (a) more than 5% of
its total assets in Second Tier Securities (i.e., Eligible Securities that are
not rated by two NRSROs in the highest category such as A-1 and Prime-1) and (b)
more than the greater of 1% of its total assets or $1,000,000 in Second Tier
Securities of any one issuer.
Prime Obligations Fund invests in corporate and bank obligations qualifying as
First Tier Securities. In general, First Tier Securities are securities which
are rated, at the time of investment, by at least two NRSROs (one if it is the
only organization rating such obligations) in the highest short-term rating
category or, if unrated, are determined by the Adviser to be of comparable
quality.
In order to provide shareholders with full liquidity, the Funds have implemented
the following practices to maintain a constant price of $1.00 per share:
limiting the portfolio's dollar-weighted average maturity to 90 days or less and
buying securities which mature within 397 days from the date of acquisition. The
Funds cannot guarantee a $1.00 share price but these practices help to minimize
any price fluctuations that might result from rising or declining interest
rates. All money market instruments, including United States Government
securities, can change in value when interest rates or an issuer's
creditworthiness changes. The value of the securities in the Funds' portfolios
can be expected to vary inversely with changes in prevailing interest rates,
with the amount of such variation depending primarily upon the period of time
remaining to maturity of the security. If the security is held to maturity, no
gain or loss will be realized as a result of interest rate fluctuations.
The securities in which the Funds invest may not yield as high a level of
current income as longer term or lower grade securities. These other securities
may have less stability of principal, be less liquid, and fluctuate more in
value than the securities in which the Funds invest. All securities in each
Fund's portfolio are purchased with and payable in United States dollars.
As a fundamental policy, Prime Obligations Fund will not purchase a security if,
as a result: (a) more than 10% of its assets would be in illiquid assets
including time deposits and repurchase agreements maturing in more than seven
days; or (b) 25% or more of its assets would be in any single industry, except
that there is no limitation on the purchase of obligations of domestic
commercial banks (excluding, for this purpose, foreign branches of domestic
commercial banks). Limitation (b) does not apply to obligations issued or
guaranteed by the United States or its agencies or instrumentalities.
Unless otherwise stated, the policies described above in this section and under
"Investment Objectives and Policies" for each Fund are non-fundamental and may
be changed by a vote of the Board of Directors. The Funds have adopted certain
other investment restrictions, which are set forth in detail in the Statement of
Additional Information. These restrictions are fundamental and may not be
changed without the approval of the holders of a majority (as defined in the
1940 Act) of the outstanding shares of the Fund.
If a percentage limitation under this section or "Investment Objectives and
Policies" or under "Investment Restrictions" in the Statement of Additional
Information, is adhered to at the time of an investment, a later increase or
decrease in percentage resulting from changes in values of assets will not
constitute a violation of such limitation except in the case of the limitation
on illiquid investments.
LOAN PARTICIPATIONS; SECTION 4(2) AND RULE 144A SECURITIES
Prime Obligations Fund may invest in loan participation interests. A loan
participation interest represents a pro rata undivided interest in an underlying
bank loan. Participation interests, like the underlying loans, may have fixed,
floating, or variable rates of interest. The bank selling a participation
interest generally acts as a mere conduit between its borrower and the
purchasers of interests in the loan. The purchaser of an interest (for example,
Prime Obligations Fund) generally does not have recourse against the bank in the
event of a default on the underlying loan. Therefore, the credit risk associated
with such instruments is governed by the creditworthiness of the underlying
borrowers and not by the banks selling the interests. Loan participation
interests that can be sold within a seven-day period are deemed by the Adviser
to be liquid investments. If a loan participation interest is restricted from
being sold within a seven-day period, then it, as a fundamental policy, will be
limited, together with other illiquid investments, to not more than 10% of Prime
Obligations Fund's total assets. Commercial paper issued in reliance on the
exemption from registration afforded by Section 4(2) of the Securities Act of
1933 and corporate obligations qualifying for resale to certain "qualified
institutional buyers" pursuant to Rule 144A under the Securities Act of 1933
meet the criteria for liquidity established by the Board of Directors and are
quite liquid. Consequently, Prime Obligations Fund does not intend to subject
such securities to the limitation applicable to restricted securities. Investing
in Rule 144A securities could have the effect of increasing the level of
illiquidity in a Fund to the extent that qualified institutional buyers become,
for a time, uninterested in purchasing these securities.
SECURITIES OF FOREIGN BANKS AND BRANCHES
Because the portfolio of Prime Obligations Fund may contain securities of
foreign branches of domestic banks, foreign banks, and United States branches of
foreign banks, Prime Obligations Fund may be subject to additional investment
risks that are different in some respects from those incurred by a fund that
invests only in debt obligations of United States banks. These risks may include
future unfavorable political and economic developments and possible withholding
taxes, seizure of foreign deposits, currency controls, interest limitations, or
other governmental restrictions which might affect the payment of principal or
interest on securities owned by the Fund. Additionally, there may be less public
information available about foreign banks and their branches. The Adviser
carefully considers these factors when making investments. Prime Obligations
Fund has agreed that, in connection with investment in securities issued by
foreign banks, United States branches of foreign banks, and foreign branches of
domestic banks, consideration will be given to the domestic marketability of
such securities in light of these factors.
UNITED STATES GOVERNMENT SECURITIES
Each Fund may invest in direct obligations of the United States Treasury such as
United States Treasury bonds, notes, and bills. The Treasury securities are
essentially the same except for differences in interest rates, maturities, and
dates of issuance. In addition to Treasury securities, Prime Obligations Fund
and Government Obligations Fund may invest in securities, such as notes, bonds,
and discount notes which are issued or guaranteed by agencies of the United
States Government and various instrumentalities which have been established or
sponsored by the United States Government. Except for United States Treasury
securities, these United States Government obligations, even those which are
guaranteed by federal agencies or instrumentalities, may or may not be backed by
the "full faith and credit" of the United States. In the case of securities not
backed by the full faith and credit of the United States, the investor must look
principally to the agency issuing or guaranteeing the obligation for ultimate
repayment and may not be able to assert a claim against the United States itself
in the event the agency or instrumentality does not meet its commitment. The
Adviser considers securities guaranteed by an irrevocable letter of credit
issued by a government agency to be guaranteed by that agency.
Some of the government agencies that issue or guarantee securities are the
Government National Mortgage Association and the Farmers Home Administration,
and some of the instrumentalities that issue or guarantee securities include the
Export-Import Bank, Federal Farm Credit Banks, Federal Home Loan Banks, and the
Federal Home Loan Mortgage Corporation. Because the United States Treasury is
not obligated by law to provide support to all United States Government
instrumentalities and agencies, Government Obligations Fund and Prime
Obligations Fund will invest in securities issued by such instrumentalities and
agencies only when the Adviser determines that the credit risk with respect to
the instrumentality or agency does not make its securities unsuitable
investments for the Fund.
United States Treasury obligations include bills, notes and bonds issued by the
United States Treasury and separately traded interest and principal component
parts of such obligations that are transferable through the Federal book-entry
system known as Separately Traded Registered Interest and Principal Securities
("STRIPS"). STRIPS are sold as zero coupon securities, which means that they are
sold at a substantial discount and redeemed at face value at their maturity date
without interim cash payments of interest or principal. This discount is
accreted over the life of the security, and such accretion will constitute the
income earned on the security for both accounting and tax purposes. Because of
these features, such securities may be subject to greater interest rate
volatility than interest paying United States Treasury obligations. A Fund's
investments in STRIPS will be limited to components with maturities of less than
397 days and a Fund will not actively trade such components.
REPURCHASE AGREEMENTS
Each Fund may engage in repurchase agreements with respect to any of its
portfolio securities. In a repurchase agreement, a Fund buys a security at one
price and simultaneously promises to sell that same security back to the seller
at a mutually agreed upon time and price. Each Fund may engage in repurchase
agreements with any member bank of the Federal Reserve System or dealer in
United States Government securities. Repurchase agreements usually are for short
periods, such as under one week, not to exceed 30 days. In all cases, the
Adviser must be satisfied with the creditworthiness of the other party to the
agreement before entering a repurchase agreement. In the event of bankruptcy of
the other party to a repurchase agreement, a Fund might experience delays in
recovering its cash. To the extent that, in the meantime, the value of the
securities the Fund purchased may have decreased, the Fund could experience a
loss.
REVERSE REPURCHASE AGREEMENTS
Treasury Obligations Fund may also enter into reverse repurchase agreements.
These transactions are similar to borrowing cash. This Fund will not enter into
reverse repurchase agreements to increase income (leveraging), and it will only
enter into such agreements for temporary or emergency purposes, for the purpose
of meeting redemption requests which might otherwise require the untimely
disposition of assets. In a reverse repurchase agreement, the Fund transfers
possession of a portfolio instrument to another person, such as a financial
institution, broker, or dealer, in return for a percentage of the instrument's
market value in cash, and agrees that on a stipulated date in the future the
Fund will repurchase the portfolio instrument by remitting the original
consideration plus interest at an agreed upon rate. The use of reverse
repurchase agreements may enable Treasury Obligations Fund to avoid selling
portfolio instruments at a time when a sale may be deemed to be disadvantageous,
but the ability to enter into reverse repurchase agreements does not ensure that
Treasury Obligations Fund will be able to avoid selling portfolio instruments at
a disadvantageous time.
When effecting reverse repurchase agreements, liquid assets of Treasury
Obligations Fund, in a dollar amount sufficient to make payment for the
obligations to be purchased, are segregated on the Fund's records at the trade
date. These assets are marked to market daily and are maintained until the
transaction is settled.
During the period any reverse repurchase agreements are outstanding, but only to
the extent necessary to assure completion of the reverse repurchase agreements,
Treasury Obligations Fund will restrict the purchase of portfolio instruments to
money market instruments maturing on or before the expiration date of the
reverse repurchase agreements.
CREDIT ENHANCEMENT AGREEMENTS
Prime Obligations Fund may arrange for guarantees, letters of credit, or other
forms of credit enhancement agreements (collectively, "Guarantees") for the
purpose of further securing the payment of principal and/or interest on the
Fund's investment securities. Although each investment security, at the time it
is purchased, must meet the Fund's creditworthiness criteria, Guarantees
sometimes are purchased from banks and other institutions (collectively,
"Guarantors") when the Adviser, through yield and credit analysis, deems that
credit enhancement of certain of the Fund's securities is advisable. As a
non-fundamental policy, the Fund will limit the value of all investment
securities issued or guaranteed by each Guarantor to not more than 10% of the
value of the Fund's total assets.
LENDING OF PORTFOLIO SECURITIES
Each Fund may from time to time lend securities from its portfolio to brokers,
dealers, and financial institutions and receive collateral in cash or securities
issued or guaranteed by the United States Government which will be maintained at
all times in an amount equal to at least 100% of the current value of the loaned
securities. Such loans may not exceed one-third of the value of the lending
Fund's total assets. For additional information, see "Investment Restrictions"
in the Statement of Additional Information.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES
Each Fund may purchase the securities described above with respect to such Funds
on a when-issued or delayed delivery basis. The settlement dates for these types
of transactions are determined by mutual agreement of the parties and may occur
a month or more after the parties have agreed to the transaction. Securities
purchased on a when-issued or delayed delivery basis are subject to market
fluctuation and no interest accrues to the Fund during the period prior to
settlement. At the time a Fund commits to purchase securities on a when-issued
or delayed delivery basis, it will record the transaction and thereafter reflect
the value, each day, of such security in determining its net asset value. At the
time of delivery of the securities, the value may be more or less than the
purchase price. Each Fund will also establish a segregated account with its
Custodian in which it will maintain cash or cash equivalents or other portfolio
securities equal in value to commitments for such when-issued or delayed
delivery securities. The Funds will not purchase securities on a when-issued or
delayed delivery basis if, as a result thereof, more than 15% of that Fund's net
assets would be so invested.
MONEY MARKET FUNDS
Each of the Funds may invest, to the extent permitted by the 1940 Act, in
securities issued by other money market funds, provided that the permitted
investments of such other money market funds constitute permitted investments of
the investing Fund. The Adviser will waive its advisory fee on amounts which are
invested in such other money market funds. Subject to the receipt of exemptive
relief under the 1940 Act, the money market funds in which a Fund may invest
include other of the Funds.
FIRST AMERICAN FUNDS, INC.
680 East Swedesford Road
Wayne, Pennsylvania 19087
INVESTMENT ADVISER
FIRST BANK NATIONAL ASSOCIATION
601 Second Avenue South
Minneapolis, Minnesota 55402
CUSTODIAN
FIRST TRUST NATIONAL ASSOCIATION
180 East Fifth Street
St. Paul, Minnesota 55101
DISTRIBUTOR
SEI FINANCIAL SERVICES COMPANY
680 East Swedesford Road
Wayne, Pennsylvania 19087
ADMINISTRATOR
SEI FINANCIAL MANAGEMENT
CORPORATION
680 East Swedesford Road
Wayne, Pennsylvania 19087
TRANSFER AGENT
DST SYSTEMS, INC.
210 West 10th Street
Kansas City, Missouri 64105
INDEPENDENT AUDITORS
KPMG PEAT MARWICK LLP
90 South Seventh Street
Minneapolis, Minnesota 55402
COUNSEL
DORSEY & WHITNEY P.L.L.P.
220 South Sixth Street
Minneapolis, Minnesota 55402
FIRST AMERICAN FUNDS, INC.
STATEMENT OF ADDITIONAL INFORMATION
DATED JANUARY 31, 1996
PRIME OBLIGATIONS FUND
GOVERNMENT OBLIGATIONS FUND
TREASURY OBLIGATIONS FUND
This Statement of Additional Information relates to the Class A, Class
B, Class C and Class D Shares of the funds named above (each a "Fund," and
collectively the "Funds"), each of which is a series of First American Funds,
Inc. This Statement of Additional Information is not a prospectus, but should be
read in conjunction with the Funds' current Prospectuses dated January 31, 1996.
This Statement of Additional Information is incorporated into the Funds'
Prospectuses by reference. To obtain copies of the Prospectuses, call (800)
637-2548 or write SEI Financial Services Company, 680 East Swedesford Road,
Wayne, Pennsylvania 19087. Please retain this Statement of Additional
Information for future reference.
TABLE OF CONTENTS
PAGE
General Information ..................................... 2
Investment Restrictions ................................. 3
Portfolio Turnover ...................................... 6
Directors and Executive Officers ........................ 6
Capital Stock ........................................... 9
Investment Advisory and Other Services .................. 10
Portfolio Transactions .................................. 14
Net Asset Value and Public Offering Price................ 16
Valuation of Portfolio Securities ....................... 16
Taxes ................................................... 17
Calculation of Performance Data ......................... 18
Commercial Paper and Bond Ratings ....................... 19
Financial Statements .................................... 20
GENERAL INFORMATION
First American Funds, Inc. ("FAF") was incorporated under the name
"First American Money Fund, Inc." The Board of Directors and shareholders, at
meetings held December 6, 1989 and January 18, 1990, respectively, approved
amendments to the Articles of Incorporation providing that the name "First
American Money Fund, Inc." be changed to "First American Funds, Inc."
As set forth in the Prospectuses, FAF is organized as a series fund,
and currently issues its shares in three series. Each series of shares
represents a separate investment portfolio with its own investment objective and
policies (in essence, a separate mutual fund). Series B Common Shares represent
interests in a portfolio referred to as "Prime Obligations Fund"; Series C
Common Shares represent interests in a portfolio referred to as "Government
Obligations Fund"; and Series D Common Shares represent interests in a portfolio
referred to as "Treasury Obligations Fund." The name assigned to each Series of
FAF may be changed at any time by FAF's Board of Directors without shareholder
approvals.
Shareholders may purchase shares of each Fund through separate classes.
Prime Obligations Fund offers it shares in four classes, Class A, Class B, Class
C and Class D. Government Obligations Fund and Treasury Obligations Fund offer
Class C and Class D Shares only. The various classes provide for variations in
distribution costs, voting rights and dividends. To the extent permitted under
the Investment Company Act of 1940 (the "1940 Act"), the Funds may also provide
for variations in other costs among the classes although they have no present
intention to do so. Except for differences among the classes pertaining to
distribution costs, each share of each Fund represents an equal proportionate
interest in that Fund.
FAF has prepared and will provide a separate Prospectus relating to the
Class A and Class B, the Class C and the Class D Shares of the Funds,
respectively. These Prospectuses can be obtained by calling or writing SEI
Financial Services Company at the address and telephone number set forth on the
cover of this Statement of Additional Information. This Statement of Additional
Information relates to all Prospectuses for the various classes of shares of the
Funds. It should be read in conjunction with the applicable Prospectus.
The By-laws of FAF provide that meetings of shareholders be held only
with such frequency as required under Minnesota law and the 1940 Act. Minnesota
corporation law requires only that the Board of Directors convene shareholders'
meetings when it deems appropriate. In addition, Minnesota law provides that if
a regular meeting of shareholders has not been held during the immediately
preceding 15 months, a shareholder or shareholders holding 3% or more of the
voting shares of FAF may demand a regular meeting of shareholders by written
notice given to the chief executive officer or chief financial officer of FAF.
Within 30 days after receipt of the demand, the Board of Directors shall cause a
regular meeting of shareholders to be called, which meeting shall be held no
later than 40 days after receipt of the demand, all at the expense of FAF. In
addition, the 1940 Act requires a shareholder vote for all amendments to
fundamental investment policies and restrictions, for approval of all investment
advisory contracts and amendments thereto, and for all amendments to Rule 12b-1
distribution plans.
On December 16, 1994, the shareholders of FAF approved a reorganization
of the then-existing mutual funds of FAF. As of such date, five different mutual
funds existed as a separate series of FAF: Money Fund, Institutional Money Fund,
CT Government Fund, Institutional Government Fund and CT Treasury Fund.
Effective January 20, 1995, Money Fund was combined with and into Institutional
Money Fund and the combined entity is the Prime Obligations Fund. Also effective
on such date, CT Government Fund was combined with and into Institutional
Government Fund and the combined entity is the Government Obligations Fund. In
addition, the name of CT Treasury Fund was changed to Treasury Obligations Fund.
INVESTMENT RESTRICTIONS
PRIME OBLIGATIONS FUND
Prime Obligations Fund has adopted the following investment limitations
and fundamental policies. These policies and limitations cannot be changed by
the Fund without approval by the holders of a majority of the outstanding shares
of the Fund as defined in the 1940 Act (i.e., the lesser of the vote of (a) 67%
of the shares of the Fund at a meeting where more than 50% of the outstanding
shares are present in person or by proxy or (b) more than 50% of the outstanding
shares of the Fund). Prime Obligations Fund may not:
1. Purchase common stocks, preferred stocks, warrants, other equity
securities, corporate bonds or debentures, state bonds, municipal
bonds, or industrial revenue bonds (except through the purchase
of obligations referred to under "Investment Objective and
Policies" in the Fund's Prospectus).
2. Borrow money except from banks for temporary or emergency
purposes for the purpose of meeting redemption requests which
might otherwise require the untimely disposition of securities.
Borrowing in the aggregate may not exceed 10% of the value of the
Fund's total assets (including the amount borrowed) valued at the
lesser of cost or market less liabilities (not including the
amount borrowed) at the time the borrowing is made. The
borrowings will be repaid before any additional investments are
made. However, even with such authority to borrow money, there is
no assurance that the Fund will not have to dispose of securities
on an untimely basis to meet redemption requests.
3. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except in an amount up to 15% of the value of its total assets
but only to secure borrowings for temporary or emergency
purposes.
4. Sell securities short or purchase securities on margin.
5. Write or purchase put or call options, except that the Fund may
write or purchase put or call options in connection with the
purchase of variable rate certificates of deposit described
below.
6. Underwrite the securities of other issuers except to the extent
the Fund may be deemed to be an underwriter, under federal
securities laws, in connection with the disposition of portfolio
securities, or purchase securities with contractual or other
restrictions on resale.
7. Invest more than 10% of its total assets in illiquid assets,
including, without limitation, time deposits and repurchase
agreements maturing in more than seven days.
8. Purchase or sell real estate, real estate investment trust
securities, commodities or commodity contracts, or oil and gas
interests.
9. Lend money to others except through the purchase of debt
obligations of the type which the Funds are permitted to purchase
(see "Investment Objective and Policies" in the Fund's
Prospectus).
10. Invest 25% or more of its assets in the securities of issuers in
any single industry; provided that there shall be no limitation
on the purchase of obligations issued or guaranteed by the United
States, its agencies or instrumentalities, or obligations of
domestic commercial banks, excluding for this purpose, foreign
branches of domestic commercial banks. As to utility companies,
gas, electric, water, and telephone companies are considered as
separate industries. As to finance companies, the following two
categories are each considered a separate industry: (A) business
credit institutions, such as Honeywell Finance Corporation and
General Electric Credit Corp., and (B) personal credit
institutions, such as Sears Roebuck Acceptance Corp. and
Household Finance Corporation.
11. Invest in companies for the purpose of exercising control.
12. Purchase or retain the securities of any issuer if any of the
officers or directors of the Fund or its investment adviser owns
beneficially more than 1/2 of 1% of the securities of such issuer
and together own more than 5% of the securities of such issuer.
In connection with Prime Obligations Fund's purchase of variable rate
certificates of deposit ("CDs"), it may enter into agreements with banks or
dealers allowing the Fund to resell the certificates to the bank or dealer, at
the Fund's option. Time deposits which may be purchased by the Fund are deposits
held in foreign branches of United States banks which have a specified term or
maturity. The Fund purchases CDs from only those domestic savings and loan
institutions which are regulated by the Office of Thrift Supervision and the
Federal Deposit Insurance Corporation ("FDIC"), and whose deposits are insured
by either the Savings Association Insurance Fund or the Bank Insurance Fund,
each of which is administered by the FDIC. However, because the Fund purchases
large denomination CDs, it does not expect to benefit materially from such
insurance. The policies described in this paragraph are nonfundamental and may
be changed by the Board of Directors.
Prime Obligations Fund may invest in obligations of foreign branches of
United States banks and United States branches of foreign banks. The obligations
of foreign branches of United States banks may be general obligations of the
parent bank in addition to the issuing branch, or may be limited by the terms of
a specific obligation and by governmental regulation. Payment of interest and
principal upon these obligations may also be affected by governmental action in
the country of domicile of the branch (generally referred to as sovereign risk).
In addition, evidences of ownership of portfolio securities may be held outside
of the United States and the Fund may be subject to the risks associated with
the holding of such property overseas. Various provisions of federal law
governing the establishment and operation of domestic branches do not apply to
foreign branches of domestic banks. Obligations of United States branches of
foreign banks may be general obligations of the parent bank in addition to the
issuing branch, or may be limited by the terms of a specific obligation and by
federal and state regulation as well as by governmental action in the country in
which the foreign bank has its head office.
GOVERNMENT OBLIGATIONS FUND
Government Obligations Fund has adopted the following investment
limitations and fundamental policies. These limitations cannot be changed by the
Fund without approval by the holders of a majority of the outstanding shares of
the Fund as defined in the 1940 Act. Government Obligations Fund may not:
1. Borrow money except from banks for temporary or emergency
purposes for the purpose of meeting redemption requests which
might otherwise require the untimely disposition of securities.
Borrowing in the aggregate may not exceed 10% of the value of the
Fund's total assets (including the amount borrowed) valued at the
lesser of cost or market less liabilities (not including the
amount borrowed) at the time the borrowing is made. The
borrowings will be repaid before any additional investments are
made. Interest paid on borrowed funds will decrease the net
earnings of the Fund. The Fund will not borrow to increase income
(leveraging).
2. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except in an amount up to 15% of the value of its total assets
but only to secure borrowings for temporary or emergency
purposes.
3. Sell securities short or purchase securities on margin.
4. Underwrite the securities of other issuers except to the extent
the Fund may be deemed to be an underwriter, under federal
securities laws, in connection with the disposition of portfolio
securities.
5. Invest more than 10% of its total assets in illiquid assets,
including, without limitation, repurchase agreements maturing in
more than seven days.
As a non-fundamental policy, Government Obligations Fund will not
invest in oil, gas or other mineral leases or real estate limited partnerships.
TREASURY OBLIGATIONS FUND
Treasury Obligations Fund has adopted the following investment
limitations and fundamental policies. These limitations cannot be changed by the
Fund without approval by the holders of a majority of the outstanding shares of
the Fund as defined in the 1940 Act. Treasury Obligations Fund may not:
1. Borrow money except that the Fund may borrow from banks or enter
into reverse repurchase agreements for temporary or emergency
purposes, for the purpose of meeting redemption requests which
might otherwise require the untimely disposition of securities in
aggregate amounts not exceeding 10% of the value of the Fund's
total assets (including the amount borrowed or subject to reverse
repurchase agreements) valued at the lesser of cost or market
less liabilities (not including the amount borrowed or subject to
reverse repurchase agreements) at the time the borrowing or
reverse repurchase agreement is entered into. Any borrowings will
be repaid before any additional investments are made. During the
period any reverse repurchase agreements are outstanding, the
Fund will restrict the purchase of portfolio securities to
instruments maturing on or before the expiration date of the
reverse repurchase agreements, but only to the extent necessary
to assure completion of the reverse repurchase agreements.
Interest paid on borrowed funds will decrease the net earnings of
the Fund. The Fund will not borrow or enter into reverse
repurchase agreements to increase income (leveraging).
2. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except in an amount up to 15% of the value of its total assets
but only to secure borrowings for temporary or emergency
purposes.
3. Sell securities short or purchase securities on margin.
4. Underwrite the securities of other issuers except to the extent
the Fund may be deemed to be an underwriter, under federal
securities laws, in connection with the disposition of portfolio
securities.
5. Invest more than 10% of its total assets in illiquid assets,
including, without limitation, repurchase agreements maturing in
more than seven days.
As a non-fundamental policy, Treasury Obligations Fund will not invest
in oil, gas or other mineral leases.
The Funds may not invest in obligations of any affiliate of First Bank
System, Inc., including First Bank National Association (the "Adviser").
The Funds may lend securities to the extent described in the
Prospectuses under "Investment Restrictions and Techniques -- Lending of
Portfolio Securities." When a Fund lends portfolio securities, it continues to
be entitled to the interest payable on the loaned securities and, in addition,
receives interest on the amount of the loan at a rate negotiated with the
borrower. The Fund may pay a portion of the income earned on the lending
transaction to the placing broker and may pay administrative and custodial fees
in connection with these loans. The Funds contemplate that (to the extent
permissible under the 1940 Act) the Custodian may be the recipient of such
administrative and custodial fees in connection with some such lending
transactions.
PORTFOLIO TURNOVER
The Funds generally intend to hold their portfolio securities to
maturity. In certain instances, however, a Fund may dispose of its portfolio
securities prior to maturity when it appears such action will be in the best
interest of the Fund because of changing money market conditions, redemption
requests, or otherwise. A Fund may attempt to maximize the total return on its
portfolio by trading to take advantage of changing money market conditions and
trends or to take advantage of what are believed to be disparities in yield
relationships between different money market instruments. Because each Fund
invests in short-term securities and manages its portfolio as described above in
"Investment Restrictions" and as described in the Prospectus under "Investment
Objective and Policies," the Fund's portfolio will turn over several times a
year. Because brokerage commissions as such are not usually paid in connection
with the purchase or sale of the securities in which the Funds invest and
because the transactional costs are small, the high turnover is not expected
materially to affect net asset values or yields. Securities with maturities of
less than one year are excluded from required portfolio turnover rate
calculations, and, therefore, each Fund's turnover rate for reporting purposes
will be zero.
DIRECTORS AND EXECUTIVE OFFICERS
The directors and executive officers of FAF are listed below, together
with their business addresses and their principal occupations during the past
five years. Directors who are "interested persons" (as that term is defined in
the 1940 Act) of FAF are identified with an asterisk.
DIRECTORS
Robert J. Dayton, 5140 Norwest Center, Minneapolis, Minnesota 55402:
Director of FAF since December 1994 and of First American Investment Funds, Inc.
("FAIF") since September 1994; Chairman (1989- 1993) and Chief Executive Officer
(1993-present), Okabena Company (private family investment office). Age: 53.
* Welles B. Eastman, 998 Shady Lane, Wayzata, Minnesota 55391: Director
of FAF since January 1990 and of FAIF since April 1991; Chairman of the Board of
Directors of Annandale State Bank, Annandale, Minnesota; Vice President of the
Adviser from 1968 and Vice President of the Institutional Trust Group of First
Trust National Association from 1986 until his retirement in December 1988 from
such positions. Age: 68.
Irving D. Fish, 901 Marquette, Suite 3200, Minneapolis, Minnesota
55402: Director of FAF since 1984 and of FAIF since April 1991; Partner and
Chief Financial Officer of Fallon McElligott, Inc., a Minneapolis- based
advertising agency. Age: 46.
Leonard W. Kedrowski, 16 Dellwood Avenue, Dellwood, Minnesota 55110:
Director of FAIF and FAF since November 1993; Vice President, Chief Financial
Officer, Treasurer, Secretary and Director of Anderson Corporation, a large
privately-held manufacturer of wood windows, from 1983 to October 1992. Age: 53.
Joseph D. Strauss, 8617 Edenbrook Crossing, # 443, Brooklyn Park,
Minnesota 55443: Director of FAF since 1984 and of FAIF since April 1991;
Chairman of FAF's and FAIF's Boards since 1992; President of FAF and FAIF from
June 1989 to November 1989; Owner and President, Strauss Management Company,
since 1993; Owner and President, Community Resource Partnerships, Inc., a
community business retention survey company, since 1992; attorney-at-law. Age:
54.
Virginia L. Stringer, 712 Linwood Avenue, St. Paul, Minnesota 55105:
Director of FAIF since August 1987 and of FAF since April 1991; Owner and
President, Strategic Management Resources, Inc. since 1993; formerly President
and Director of The Inventure Group, a management consulting and training
company, President of Scott's, Inc., a transportation company, and Vice
President of Human Resources of The Pillsbury Company. Age: 49.
Gae B. Veit, P.O. Box 6, Loretto, Minnesota 55357: Director of FAIF and
FAF since December 7, 1993; owner and CEO of Shingobee Builders, Inc., a general
contractor. Age: 52.
EXECUTIVE OFFICERS
David Lee, SEI Corporation, 680 East Swedesford Road, Wayne,
Pennsylvania 19087: President of FAIF and FAF since April 1994; Senior Vice
President and Assistant Secretary of FAF and FAIF beginning June 1, 1993; Senior
Vice President of SEI Financial Services Company (the "Distributor") since 1991;
President, GW Sierra Trust Funds prior to 1991. Age: 42.
Carmen V. Romeo, SEI Corporation, 680 East Swedesford Road, Wayne,
Pennsylvania 19087: Treasurer and Assistant Secretary of FAIF and FAF beginning
November 1992; Director, Executive Vice President, Chief Financial Officer and
Treasurer of SEI Corporation ("SEI"), SEI Financial Management Corporation (the
"Administrator") and the Distributor since 1981. Age: 50.
Kevin P. Robins, SEI Corporation, 680 East Swedesford Road, Wayne,
Pennsylvania 19087: Vice President and Assistant Secretary of FAIF and FAF since
April 1994; Vice President, Assistant Secretary and General Counsel of the
Administrator and the Distributor. Age: 34.
Kathryn Stanton, SEI Corporation, 680 East Swedesford Road, Wayne,
Pennsylvania 19087: Vice President and Assistant Secretary of FAIF and FAF since
April 1994; Vice President and Assistant Secretary of the Administrator and the
Distributor since April 1994; Associate, Morgan, Lewis & Bockius, from 1989 to
1994. Age: 35.
Sandra K. Orlow, SEI Corporation, 680 East Swedesford Road, Wayne,
Pennsylvania 19087: Vice President and Assistant Secretary of FAIF and FAF since
1992; Vice President and Assistant Secretary of SEI, the Administrator and the
Distributor since 1983. Age: 40.
Robert B. Carroll, SEI Corporation, 680 East Swedesford Road, Wayne,
Pennsylvania 19087: Vice President and Assistant Secretary of FAIF and FAF since
September 1994; Vice President and Assistant Secretary of SEI, the Administrator
and the Distributor since 1994; Division of Investment Management, United States
Securities and Exchange Commission, from 1990 to 1994; Associate, McGuire,
Woods, Brattle & Boothe, before 1990. Age: 35.
Stephen G. Meyer, SEI Corporation, 680 East Swedesford Road, Wayne,
Pennsylvania 19087: Controller of FAIF and FAF since March 1995; Director of
Internal Audit and Risk Management of SEI from 1992 to 1995; Senior Associate,
Coopers & Lybrand, from 1990 to 1992. Age: 29.
Michael J. Radmer, 220 South Sixth Street, Minneapolis, Minnesota
55402: Secretary of FAIF since April 1991 and of FAF since 1981; Partner, Dorsey
& Whitney P.L.L.P., a Minneapolis-based law firm and general counsel of FAIF and
FAF. Age: 49.
COMPENSATION
The First American Family of Funds, which includes FAF and FAIF,
currently pays only to directors of the funds who are not paid employees or
affiliates of the funds a fee of $15,000 per year ($22,500 in the case of the
Chair) plus $2,500 ($3,750 in the case of the Chair) per meeting of the Board
attended and $800 per committee meeting attended ($1,600 in the case of a
committee chair) and reimburses travel expenses of directors and officers to
attend Board meetings. Legal fees and expenses are also paid to Dorsey & Whitney
P.L.L.P., the law firm of which Michael J. Radmer, secretary of FAF and FAIF, is
a partner. The following table sets forth information concerning aggregate
compensation paid to each director of FAF (i) by FAF (column 2), and (ii) by FAF
and FAIF collectively (column 5) during the fiscal year ended September 30,
1995. No executive officer or affiliated person of FAF had aggregate
compensation from FAIF in excess of $60,000 during such fiscal year:
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
Total Compensation
Aggregate Pension or Retirement Estimated From Registrant and
Name of Compensation Benefits Accrued as Annual Benefits Fund Complex
Person, Position From Registrant Part of Fund Expenses Upon Retirement Paid to Directors
---------------- --------------- --------------------- --------------- -----------------
<S> <C> <C> <C> <C>
Robert J. Dayton, Director $10,016 - 0 - - 0 - $14,800
Welles B. Eastman, Director $11,629 - 0 - - 0 - $17,000
Irving D. Fish, Director $10,824 - 0 - - 0 - $15,800
Leonard W. Kedrowski, Director $11,629 - 0 - - 0 - $17,000
Joseph D. Strauss, Director $23,985 - 0 - - 0 - $35,600
Virginia L. Stringer, Director $11,899 - 0 - - 0 - $17,400
Gae B. Veit, Director $11,094 - 0 - - 0 - $16,200
</TABLE>
Under Minnesota law, each director owes certain fiduciary duties to the
Funds and to their shareholders. Minnesota law provides that a director "shall
discharge the duties of the position of director in good faith, in a manner the
director reasonably believes to be in the best interest of the corporation, and
with the care an ordinarily prudent person in a like position would exercise
under similar circumstances." Fiduciary duties of a director of a Minnesota
corporation include, therefore, both a duty of "loyalty" (to act in good faith
and in a manner reasonably believed to be in the best interest of the
corporation) and a duty of "care" (to act with the care an ordinarily prudent
person in a like position would exercise under similar circumstances). In 1987,
Minnesota enacted legislation which authorizes corporations to eliminate or
limit the personal liability of a director to the corporation or its
shareholders for monetary damages for breach of the fiduciary duty of "care."
Minnesota law does not, however, permit a corporation to eliminate or limit the
liability of a director (a) for any breach of the director's duty of "loyalty"
to the corporation or its shareholders, (b) for acts or omissions not in good
faith or that involve intentional misconduct or a knowing violation of the law,
(c) for authorizing a dividend, stock repurchase or redemption, or other
distribution in violation of Minnesota law or for violation of certain
provisions of Minnesota securities laws, or (d) for any transaction from which
the director derived an improper personal benefit. FAF's Board of Directors and
shareholders, at meetings held December 10, 1987 and March 15, 1988,
respectively, approved an amendment to the Articles of Incorporation that limits
the liability of directors to the fullest extent permitted by the Minnesota
legislation and the 1940 Act.
Minnesota law does not eliminate the duty of "care" imposed on a
director. It only authorizes a corporation to eliminate monetary liability for
violations of that duty. Further, Minnesota law does not permit elimination or
limitation of liability of "officers" to the corporation for breach of their
duties as officers. Minnesota law does not permit elimination or limitation of
the availability of equitable relief, such as injunctive or rescissionary
relief. These remedies, however, may be ineffective in situations where
shareholders become aware of such a breach after a transaction has been
consummated and rescission has become impractical. Minnesota law does not permit
elimination or limitation of a director's liability under the Securities Act of
1933, as amended, or the Securities Exchange Act of 1934, as amended. The 1940
Act prohibits elimination or limitation of a director's liability for acts
involving willful malfeasance, bad faith, gross negligence, or reckless
disregard of the duties of a director.
CAPITAL STOCK
As of January 5, 1996, the directors and officers of FAF as a group
owned less than one percent of each class of each Fund's outstanding shares. As
of that date, the Funds were aware that the following persons owned of record
five percent or more of the outstanding shares of each class of stock of the
Funds.
<TABLE>
<CAPTION>
PERCENTAGE OF OUTSTANDING SHARES
CLASS A CLASS B CLASS C CLASS D
PRIME OBLIGATIONS FUND
<S> <C> <C> <C> <C>
Special Custody Account for the exclusive benefit of custoners of
FBS Investment Services Inc .......................................7.50%
100 South Fifth Street
Minneapolis, MN 55402
National Financial Services Corporation ...............................86.86%
200 Liberty Street, 4th Floor
New York, NY 10281
NFSC FEBO First Bank NA Cust IRA of Roger S. Murdock .................. 8.65%
1628 Frontier Road SW
Byron, MN 55920
NFSC FEBO Colorado National Bank Custo Alan M Aarons IRA .............. 6.50%
Box 549
Edwards, CO 81632
NFSC FEBO First Bank NA Cust IRA of Brian A. Hallcock ................. 5.93%
5737 Susan Avenue
Edina, MN 55439
NFSC FEBO Bonital M. Schlitter ........................................ 15.75%
4201 West Rice Place
Denver, CO 80236
NFSC FEBO John A. Poteat Tonya Knight Poteat .......................... 45.41%
12702 Century
Overland Park, KS 66213
NFSC FEBO Colorado National Bank Cust IRA of Susan J. Mishler ......... 7.15%
9290 W. Ontario Drive
Littleton, CO 80123
VAR & Co............................................................... 69.12%
P.O. Box 64010
St. Paul, MN 55164
Special Custody Account for the exclusive benefit of customers of FBS
Investment Services Inc........................................... 30.12%
100 South Fifth Street
Minneapolis, MN 55402
VAR & Co............................................................... 100.00%
P.O. Box 64010
St. Paul, MN 55164
GOVERNMENT OBLIGATIONS FUND
VAR & Co............................................................... 42.65%
P.O. Box 64010
St. Paul, MN 55164
Special Custody Account for the exclusive benefit of customers of FBS
Investment Services Inc........................................... 58.66%
100 South Fifth Street
Minneapolis, MN 55402
TREASURY OBLIGATIONS FUND
VAR & Co............................................................... 69.88%
P.O. Box 64010
St. Paul, MN 55164
Special Custody Account for the exclusive benefit of customers of FBS
Investment Services Inc........................................... 30.12%
100 South Fifth Street
Minneapolis, MN 55402
VAR & Co............................................................... 100.00%
P.O. Box 64010
St. Paul, MN 55164
</TABLE>
INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISER
First Bank National Association (the "Adviser"), 601 Second Avenue
South, Minneapolis, Minnesota 55480, serves as the investment adviser and
manager of the Funds through its First Asset Management group. The Adviser is a
national banking association that has professionally managed accounts for
individuals, insurance companies, foundations, commingled accounts, trust funds,
and others for over 75 years. The Adviser is a subsidiary of First Bank System,
Inc. ("FBS"), 601 Second Avenue South, Minneapolis, Minnesota 55480, which is a
regional bank holding company headquartered in Minneapolis, Minnesota. FBS is
comprised of 9 banks and several trust and nonbank subsidiaries, with 220
offices primarily in Minnesota, Colorado, Illinois, Montana, North Dakota, South
Dakota and Wisconsin. Through its subsidiaries, FBS provides commercial and
agricultural finance, consumer banking, trust, capital markets, cash management,
investment management, data processing, leasing, mortgage banking and brokerage
services.
Pursuant to an Investment Advisory Agreement, effective as of January
20, 1995 (the "Advisory Agreement") between FAF, on behalf of each Fund, and the
Adviser, the Funds engage the Adviser to act as investment adviser for and to
manage the investment of the Funds' assets. The Advisory Agreement requires each
Fund to pay the Adviser a monthly fee equal, on an annual basis, to .40 of 1% of
the Fund's average daily net assets. The Advisory Agreement provides that the
Funds will be reimbursed for excess Fund expenses, as may be required by the
laws of certain states in which the Funds' shares may be offered for sale. As of
the date of this Statement of Additional Information, the most restrictive state
limitation in effect requires that "aggregate annual expenses" (which include
the investment advisory fee and other operating expenses but exclude interest,
taxes, brokerage commissions, Rule 12b-1 fees, and certain other expenses) shall
not exceed 2-1/2% of the first $30 million of average net assets, 2% of the next
$70 million of average net assets, and 1-1/2% of the remaining average net
assets of a Fund for any fiscal year.
The Advisory Agreement requires the Adviser to arrange, if requested by
FAF, for officers or employees of the Adviser to serve without compensation from
the Funds as directors, officers, or employees of FAF if duly elected to such
positions by the shareholders or directors of FAF. The Adviser has the authority
and responsibility to make and execute investment decisions for the Funds within
the framework of the Funds' investment policies, subject to review by the Board
of Directors of FAF. The Adviser is also responsible for monitoring the
performance of the various organizations providing services to the Funds,
including the Funds' distributor, shareholder services agent, custodian, and
accounting agent, and for periodically reporting to FAF's Board of Directors on
the performance of such organizations. The Adviser will, at its own expense,
furnish the Funds with the necessary personnel, office facilities, and equipment
to service the Funds' investments and to discharge its duties as investment
adviser of the Funds. In addition to the investment advisory fee, each Fund pays
all of its expenses that are not expressly assumed by the Adviser or any other
organization with which the Fund may enter into an agreement for the performance
of services. Each Fund is liable for such nonrecurring expenses as may arise,
including litigation to which the Fund may be a party. FAF may have an
obligation to indemnify its directors and officers with respect to such
litigation. The Adviser will be liable to the Funds under the Advisory Agreement
for any negligence or willful misconduct by the Adviser other than liability for
investments made by the Adviser in accordance with the explicit direction of the
Board of Directors or the investment objectives and policies of the Funds. The
Adviser has agreed to indemnify the Funds with respect to any loss, liability,
judgment, cost or penalty that a Fund may suffer due to a breach of the Advisory
Agreement by the Adviser.
The following table sets forth total advisory fees before waivers and
after waivers for each of the Funds for the fiscal years ended September 30,
1993, September 30, 1994 and September 30, 1995:
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended
September 30,1993 September 30, 1994 September 30, 1995
Advisory Fee Advisory Fee Advisory Fee Advisory Fee Advisory Fee Advisory Fee
Before After Before After Before After
Waivers Waivers Waivers Waivers Waivers Waivers
<S> <C> <C> <C> <C> <C> <C>
Prime Obligations Fund $2,107,000 $1,578,000 $3,922,752 $3,009,223 $7,153,924 $5,037,203
Government Obligations
Fund ........... 580,000 408,000 1,260,913 941,679 2,880,555 2,134,664
Treasury Obligations
Fund ........... * * 2,895,689 2,331,218 3,995,741 3,094,023
</TABLE>
* Not in operation during fiscal year.
DISTRIBUTOR AND DISTRIBUTION PLANS
SEI Financial Services Company (the "Distributor" ) serves as the
distributor for the Class A, Class B, Class C and Class D Shares of Prime
Obligations Fund and the Class C and Class D Shares of Treasury Obligations Fund
and Government Obligations Fund. The Distributor is a wholly-owned subsidiary of
SEI Corporation, which also owns the Funds' Administrator. See "-- Custodian:
Administrator; Transfer Agent; Counsel; Accountants" below.
The Distributor serves as distributor for the Class A, Class C and
Class D Shares pursuant to a Distribution Agreement effective as of January 20,
1995 between itself and the Funds, and as the distributor for the Class B Shares
pursuant to a Distribution and Service Agreement dated January 20, 1995 (the
"Class B Distribution Agreement") between itself and the Funds These agreements
are referred to collectively as the "Distribution Agreements."
Under the Distribution Agreements, the Distributor has agreed to
perform all distribution services and functions of the Funds to the extent such
services and functions are not provided to the Funds pursuant to another
agreement. The shares of the Funds are distributed through the Distributor and
through securities firms, financial institutions (including, without limitation,
banks) and other industry professionals (the "Participating Institutions") which
enter into sales agreements with the Distributor to perform share distribution
or shareholder support services.
FBS Investment Services, Inc. ("ISI"), a subsidiary of the Adviser, is
a Participating Institution. The Adviser currently pays ISI .25% of the portion
of each Fund's average daily net assets attributable to Class C Shares for which
ISI is responsible in connection with ISI's distribution of shares and/or
provision of shareholder support services. Such amounts paid to ISI by the
Adviser will not affect the Adviser's agreement to limit expenses of each Fund
as discussed under "Management of the Funds -- Investment Adviser" in the
Prospectuses.
The Class A Shares pay to the Distributor a distribution and servicing
fee at an annual rate of 0.25% of the average daily net assets of the Class A
Shares, which fee may be used by the Distributor to provide compensation for
sales support and distribution activities with respect to the Class A Shares and
to pay expenses for ongoing servicing and maintenance of shareholder accounts.
This fee is calculated and paid each month based on average daily net assets of
Class A of each Fund for that month.
The Class B Shares pay to the Distributor a distribution fee at an
annual rate of 0.75% of the average daily net assets of the Class B Shares,
which fee may be used by the Distributor to provide compensation for sales
support and distribution activities with respect to the Class B Shares. This fee
is calculated and paid each month based on average daily net assets of Class B
Shares for that month. In addition to this fee, the Distributor is paid a
shareholder servicing fee at an annual rate of 0.25% of the average daily net
assets of Prime Obligations Fund's Class B Shares pursuant to the Class B
Distribution Agreement and a service plan (the "Class B Service Plan"), which
fee may be used by the Distributor to provide compensation for personal, ongoing
service and/or maintenance of shareholder accounts with respect to the Class B
Shares of the Prime Obligations Fund. The Distributor also receives any
contingent deferred sales charges paid with respect to sales of Class B Shares.
The Distributor receives no compensation for distribution of the Class
C Shares. The Class D Shares of each Fund pay a distribution and servicing fee
to the Distributor monthly at the annual rate of 0.15% of each Fund's Class D
average daily net assets, which fee may be used by the Distributor to provide
compensation for sales support and distribution activities with respect to the
Class D Shares and to pay expenses for ongoing servicing and maintenance of
shareholder accounts. This fee is calculated and paid each month based on
average daily net assets of Class D of each Fund for that month.
The Distribution Agreements provide that they will continue in effect
for a period of more than one year from the date of their execution only so long
as such continuance is specifically approved at least annually by the vote of a
majority of the Board members of FAF and by the vote of the majority of those
Board members of FAF who are not interested persons of FAF and who have no
direct or indirect financial interest in the operation of FAF's Rule 12b-1 Plans
of Distribution or in any agreement related to such Plans.
FAF has adopted Plans of Distribution (the "Plans") with respect to
Class A, Class B and Class D Shares of the Funds, respectively, pursuant to Rule
12b-1 under the 1940 Act. Rule 12b-1 provides in substance that a mutual fund
may not engage directly or indirectly in financing any activity which is
primarily intended to result in the sale of shares, except pursuant to a plan
adopted under the Rule. The Plans authorize the Funds to pay the Distributor
fees for the services it performs for the Funds as described in the preceding
paragraphs. The Class B Plan also authorizes the Distributor to retain the
contingent deferred sales charge applied on redemptions of Class B Shares. The
Plans recognize that the Adviser, the Administrator, the Distributor, and any
Participating Institution, in their discretion, may use their own assets to pay
for certain additional costs of distributing shares of the Funds. Any such
arrangement to pay such additional costs may be commenced or discontinued by the
Adviser, the Administrator, the Distributor, or any Participating Institution at
any time.
Each Plan is a "compensation-type" plan under which the Distributor is
entitled to receive the distribution fee regardless of whether its actual
distribution expenses are more or less than the amount of the fee. If, after
payments by the Distributor for advertising, marketing, and distribution, there
are any remaining fees, these may be used as the Distributor may elect. Because
the amounts payable under the Plans will be commingled with the Distributor's
general funds, including the revenues it receives in the conduct of its
business, it is possible that certain of the Distributor's overhead expenses
will be paid out of Plan fees and that these expenses may include items which
the SEC Staff has noted, for example, the costs of leases, depreciation,
communications, salaries, training, and supplies. The Funds believe that such
expenses, if paid, will be paid only indirectly out of the fees being paid under
the Plans.
The following tables set forth the total distribution fees, after
waivers, paid by each class of the Funds for the fiscal years ended September
30, 1993, September 30, 1994 and September 30, 1995:
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30, 1993
CLASS A CLASS B CLASS C CLASS D
<S> <C> <C> <C> <C>
Prime Obligations Fund ......................................................... * * $0 *
Government Obligations Fund .................................................... * * 0 *
Treasury Obligations Fund ...................................................... * * * *
YEAR ENDED SEPTEMBER 30, 1994
CLASS A CLASS B CLASS C CLASS D
Prime Obligations Fund.......................................................... * * $0 *
Government Obligations Fund..................................................... * * 0 *
Treasury Obligations Fund....................................................... * * * $0
YEAR ENDED SEPTEMBER 30, 1995
CLASS A CLASS B CLASS C CLASS D
Prime Obligations Fund.......................................................... $140,285 $92 $0 $6,634
Government Obligations Fund..................................................... * * 0 199,644
Treasury Obligations Fund....................................................... * * * 982,300
</TABLE>
* Not in operation during fiscal year.
CUSTODIAN; ADMINISTRATOR; TRANSFER AGENT; COUNSEL; ACCOUNTANTS
First Trust (the "Custodian") acts as custodian of the Funds' assets
and portfolio securities pursuant to a Custodian Agreement between First Trust
and the Funds. The Custodian takes no part in determining the investment
policies of the Funds or in deciding which securities are purchased or sold by
the Funds. The duties of the Custodian are limited to receiving and safeguarding
the assets and securities of the Funds and to delivering or disposing of them
pursuant to the Funds' order. The Funds compensate the Custodian at such rates
and at such times as the Funds and the Custodian may agree on in writing from
time to time, and the Custodian is granted a lien for unpaid compensation upon
any cash or securities held by it for the Funds.
The following table sets forth total custodian fees, after waivers,
paid by each of the Funds for the fiscal years ended September 30, 1993,
September 30, 1994, and September 30, 1995:
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended
September 30,1993 September 30, 1994 September 30, 1995
<S> <C> <C> <C>
Prime Obligations Fund........................................... $0 $181,342 $537,494
Government Obligations Fund...................................... 0 68,897 216,267
Treasury Obligations Fund........................................ * 136,124 281,166
</TABLE>
* Not in operation during fiscal year.
The Administrator, a wholly-owned subsidiary of SEI, provides
administrative services to the Funds for a fee as described in the prospectus.
The following table sets forth total administrative fees, after waivers, paid by
each of the Funds for the fiscal years ended September 30, 1993, September 30,
1994, and September 30, 1995:
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended
September 30,1993 September 30, 1994 September 30, 1995
<S> <C> <C> <C>
Prime Obligations Fund........................................... $365,000 $686,480 $1,251,489
Government Obligations Fund...................................... 100,000 220,765 504,095
Treasury Obligations Fund........................................ * 405,478 656,081
</TABLE>
* Not in operation during fiscal year.
DST Systems, Inc., 210 West 10th Street, Kansas City, Missouri 64105,
is transfer agent and dividend disbursing agent for the shares of the Funds. The
transfer agent is not affiliated with the Distributor, the Administrator or the
Adviser.
Dorsey & Whitney P.L.L.P. is independent general counsel for the Funds.
KPMG Peat Marwick LLP, 90 South Seventh Street, Minneapolis, Minnesota
55402, serves as the Funds' independent auditors, providing audit services,
including audits of the annual financial statements and assistance and
consultation in connection with SEC filings.
PORTFOLIO TRANSACTIONS
As the Funds' portfolios are exclusively composed of debt, rather than
equity securities, most of the Funds' portfolio transactions are effected with
dealers without the payment of brokerage commissions but at net prices, which
usually include a spread or markup. In effecting such portfolio transactions on
behalf of the Funds, the Adviser seeks the most favorable net price consistent
with the best execution. The Adviser may, however, select a dealer to effect a
particular transaction without communicating with all dealers who might be able
to effect such transaction because of the volatility of the money market and the
desire of the Adviser to accept a particular price for a security because the
price offered by the dealer meets guidelines for profit, yield, or both.
Decisions with respect to placement of the Funds' portfolio
transactions are made by the Adviser. The primary consideration in making these
decisions is efficiency in executing orders and obtaining the most favorable net
prices for the Funds. Most Fund transactions are with the issuer or with major
dealers acting for their own account and not as brokers. When consistent with
these objectives, business may be placed with broker-dealers who furnish
investment research services to the Adviser. Such research services would
include advice, both directly and in writing, as to the value of securities, the
advisability of investing in, purchasing, or selling securities, and the
availability of securities or purchasers or sellers of securities, as well as
analyses and reports concerning issues, industries, securities, economic factors
and trends, portfolio strategy, and the performance of accounts.
The research services may allow the Adviser to supplement its own
investment research activities and enable the Adviser to obtain the views and
information of individuals and research staffs of many different securities
firms prior to making investment decisions for the Funds. To the extent
portfolio transactions are effected with broker-dealers who furnish research
services, the Adviser would receive a benefit, which is not capable of
evaluation in dollar amounts, without providing any direct monetary benefit to
the Funds from these transactions.
The Adviser has not entered into any formal or informal agreements with
any broker-dealers, and does not maintain any "formula" that must be followed in
connection with the placement of Fund portfolio transactions in exchange for
research services provided to the Adviser, except as noted below. The Adviser
may, from time to time, maintain an informal list of broker-dealers that will be
used as a general guide in the placement of Fund business in order to encourage
certain broker-dealers to provide the Adviser with research services, which the
Adviser anticipates will be useful to it. Any list, if maintained, would be
merely a general guide, which would be used only after the primary criteria for
the selection of broker-dealers (discussed above) has been met, and,
accordingly, substantial deviations from the list could occur. While it is not
expected that any Fund will pay brokerage commissions, if it does, the Adviser
would authorize the Fund to pay an amount of commission for effecting a
securities transaction in excess of the amount of commission another
broker-dealer would have charged only if the Adviser determined in good faith
that such amount of commission was reasonable in relation to the value of the
brokerage and research services provided by such broker-dealer, viewed in terms
of either that particular transaction or the overall responsibilities of the
Adviser with respect to the Funds.
No Fund effects brokerage transactions in its portfolio securities with
any broker-dealer affiliated directly or indirectly with its Adviser or
Distributor unless such transactions, including the frequency thereof, the
receipt of commissions payable in connection therewith, and the selection of the
affiliated broker-dealer effecting such transactions are not unfair or
unreasonable to the shareholders of the Fund, as determined by the Board of
Directors. Any transactions with an affiliated broker-dealer must be on terms
that are both at least as favorable to the Fund as such Fund can obtain
elsewhere and at least as favorable as such affiliate broker-dealer normally
gives to others.
When two or more clients of the Adviser are simultaneously engaged in
the purchase or sale of the same security, the prices and amounts are allocated
in accordance with a formula considered by the Adviser to be equitable to each
client. In some cases, this system could have a detrimental effect on the price
or volume of the security as far as each client is concerned. In other cases,
however, the ability of the clients to participate in volume transactions will
produce better executions for each client.
NET ASSET VALUE AND PUBLIC OFFERING PRICE
The method for determining the public offering price of Fund shares is
summarized in the Prospectus. Each Fund is open for business and its net asset
value per share is calculated on every day the New York Stock Exchange and the
Federal Reserve wire system are open for business. The New York Stock Exchange
is not open for business on the following holidays (or on the nearest Monday or
Friday if the holiday falls on a weekend): New Year's Day, Washington's Birthday
(observed), Good Friday, Memorial Day (observed), Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day. Each year the New York Stock Exchange may
designate different dates for the observance of these holidays as well as
designate other holidays for closing in the future. To the extent that the
securities of a Fund are traded on days that the Fund is not open for business,
the Funds' net asset value per share may be affected on days when investors may
not purchase or redeem shares. On September 30, 1995, the net asset value per
share for the Funds was calculated as follows:
<TABLE>
<CAPTION>
NET ASSET
NET ASSETS SHARES VALUE PER SHARE
(IN DOLLARS) / OUTSTANDING = (IN DOLLARS)
<S> <C> <C> <C>
PRIME OBLIGATIONS FUND
Class A................................. 96,082,873 / 96,082,889 = 1.00
Class B................................. 13,694 / 13,694 = 1.00
Class C................................. 2,911,055,512 / 2,911,050,562 = 1.00
Class D................................. 9,735,192 / 9,735,192 = 1.00
GOVERNMENT OBLIGATIONS FUND
Class C................................. 551,285,821 / 551,284,505 = 1.00
Class D................................. 198,859,180 / 198,861,163 = 1.00
TREASURY OBLIGATIONS FUND
Class C................................. 117,171,045 / 117,169,937 = 1.00
Class D................................. 1,038,817,625 / 1,038,787,512 = 1.00
</TABLE>
VALUATION OF PORTFOLIO SECURITIES
The Funds' portfolio securities are valued on the basis of the
amortized cost method of valuation. This involves valuing an instrument at its
cost 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 the instrument. 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 a Fund would receive if it sold the instrument.
During periods of declining interest rates, the daily yield on shares of a Fund
computed as described above may tend to be higher than a like computation made
by a fund with identical investments utilizing a method of valuation based upon
market prices and estimates of market prices for all of its portfolio
instruments. Thus, if the use of amortized cost by a Fund resulted in a lower
aggregate portfolio value on a particular day, a prospective investor in the
Fund would be able to obtain a somewhat higher yield than would result from
investment in a fund utilizing solely market values, and existing investors in
the Fund would receive less investment income. The converse would apply in a
period of rising interest rates.
The valuation of the Funds' portfolio instruments based upon their
amortized cost and the concomitant maintenance of the Funds' per share net asset
value of $1.00 is permitted in accordance with Rule 2a-7 under the 1940 Act,
under which the Funds must adhere to certain conditions. The Funds must maintain
a dollar-weighted average portfolio maturity of 90 days or less, purchase only
instruments having remaining maturities of 397 days or less from the date of
purchase, and invest only in securities determined by the Board of Directors to
present minimal credit risks and which are of high quality as determined by
major rating services, or, in the case of any instrument which is not so rated,
which are of comparable quality as determined by the Board of Directors. The
maturities of variable rate demand instruments held in the Funds' portfolio will
be deemed to be the longer of the demand period, or the period remaining until
the next interest rate adjustment, although stated maturities may be in excess
of one year. It is the normal practice of the Funds to hold portfolio securities
to maturity and realize par therefor unless such sale or other disposition is
mandated by redemption requirements or other extraordinary circumstances. The
Board of Directors must establish procedures designed to stabilize, to the
extent reasonably possible, the Funds' price per share as computed for the
purpose of sales and redemptions at a single value. It is the intention of the
Funds to maintain a per share net asset value of $1.00. Such procedures will
include review of the Funds' portfolio holdings by the Directors at such
intervals as they may deem appropriate, to determine whether the Funds' net
asset value calculated by using available market quotations deviates from $1.00
per share and, if so, whether such deviation may result in material dilution or
is otherwise unfair to existing shareholders. In the event the Board of
Directors determines that such a deviation exists, they will take such
corrective action as they regard as necessary and appropriate, such as selling
portfolio instruments prior to maturity to realize capital gains or losses or to
shorten average portfolio maturity, withholding dividends, or establishing a net
asset value per share by using available market quotations.
TAXES
Each Fund intends to elect each year to be taxed as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"), and, if it qualifies as such, it will not be subject to
federal income tax on the portion of its investment company taxable income and
net capital gain distributed to its shareholders. Each of the series of First
American is treated as a separate entity for federal income tax purposes. In
order to qualify as a regulated investment company for any taxable year, a Fund
must, in addition to certain other requirements, (1) derive at least 90% of its
gross income from dividends, interest, certain payments with respect to
securities loans, and gains from the sale or other disposition of stock or
securities or other income derived with respect to its business of investing in
such stock or securities; (2) derive less than 30% of its gross income from the
sale or other disposition of stock or securities held for less than three
months; and (3) distribute at least 90% of its investment company taxable income
(net investment income and the excess of net short-term capital gain over net
long-term capital loss) for the taxable year.
To qualify as a regulated investment company, a Fund must also
diversify its holdings so that, at the close of each quarter of its taxable
year, (1) at least 50% of the value of its total assets consists of cash, cash
items, securities issued by the United States Government, its agencies and
instrumentalities, and the securities of other regulated investment companies,
and other securities limited generally with respect to any one issuer to not
more than 5% of the total assets of the Fund and not more than 10% of the
outstanding voting securities of such issuer, and (2) not more than 25% of the
value of its total assets is invested in the securities of any issuer (other
than securities issued by the United States Government, its agencies or
instrumentalities, or the securities of other regulated investment companies),
or in two or more issuers that the Fund controls and that are engaged in the
same or similar trades or businesses.
Each Fund expects to distribute net realized short-term gains (if any)
once each year, although it may distribute them more frequently, if necessary in
order to maintain the Funds' net asset value at $1.00 per share. Distributions
of net investment income and net short-term capital gains are taxable to
investors as ordinary income.
Under the Code, each Fund is required to withhold 31% of reportable
payments (including dividends, capital gain distributions, if any, and
redemptions) paid to certain shareholders who have not certified that the social
security number or taxpayer identification number supplied by them is correct
and that they are not subject to backup withholding because of previous
underreporting to the IRS. These backup withholding requirements generally do
not apply to shareholders that are corporations or governmental units or certain
tax-exempt organizations.
CALCULATION OF PERFORMANCE DATA
The Funds may issue current yield quotations. Simple yields are
computed by determining the net change, exclusive of capital changes, in the
value of a hypothetical pre-existing account having a balance of one share at
the beginning of a recent seven calendar day period, subtracting a hypothetical
charge reflecting deductions from shareholder accounts, and dividing the
difference by the value of the account at the beginning of the base period to
obtain the base period return, and then multiplying the base period return by
365/7. The resulting yield figure will be carried to at least the nearest
hundredth of one percent. Effective yields are computed by determining the net
change, exclusive of capital changes, in the value of a hypothetical
pre-existing account having a balance of one share at the beginning of a recent
seven calendar day period, subtracting a hypothetical charge reflecting
deductions from shareholder accounts, and dividing the difference by the value
of the account at the beginning of the base period to obtain the base period
return, and then compounding the base period return by adding 1, raising the sum
to a power equal to 365 divided by 7, and subtracting 1 from the result,
according to the following formula:
EFFECTIVE YIELD -- [(BASE PERIOD RETURN + 1)365/7]-1
When calculating the foregoing yield or effective yield quotations, the
calculation of net change in account value 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, and all fees, other
than nonrecurring accounts or sales charges that are charged to all shareholder
accounts in proportion to the length of the base period. Realized gains and
losses from the sale of securities and unrealized appreciation and depreciation
are excluded from the calculation of yield and effective yield.
From time to time, a Fund may advertise its "yield" and "effective
yield." These yield figures are based upon historical earnings and are not
intended to indicate future performance. The "yield" of a Fund refers to the
income generated by an investment in the Fund over a seven-day period (which
period will be stated in the advertisement). This income is then "annualized,"
that is, the amount of income generated by the investment during that week is
assumed to be generated each week over a 52-week period and is shown as a
percentage of the investment. The "effective yield" is calculated similarly but,
when annualized, the income earned by an investment in the Fund is assumed to be
reinvested. The "effective yield" will be slightly higher than the "yield"
because of the compounding effect of this assumed reinvestment. For the
seven-day period ended September 30, 1995, the yield and effective yield,
respectively, for the Funds were as follows:
EFFECTIVE
YIELD YIELD
PRIME OBLIGATIONS FUND
Class A..................................... 5.30% 5.44%
Class B..................................... 4.56% 4.67%
Class C..................................... 5.55% 5.70%
Class D..................................... 5.39% 5.54%
GOVERNMENT OBLIGATIONS FUND
Class C..................................... 5.48% 5.63%
Class D..................................... 5.33% 5.47%
TREASURY OBLIGATIONS FUND
Class C..................................... 5.46% 5.60%
Class D..................................... 5.31% 5.45%
Yield information may be useful in reviewing the Funds' performance and
for providing a basis for comparison with other investment alternatives.
However, yields fluctuate, unlike investments which pay a fixed yield for a
stated period of time. Yields for the Funds are calculated on the same basis as
other money market funds as required by applicable regulations. Investors should
give consideration to the quality and maturity of the portfolio securities of
the respective investment companies when comparing investment alternatives.
Investors should recognize that in periods of declining interest rates
the Funds' yields will tend to be somewhat higher than prevailing market rates,
and in periods of rising interest rates the Funds' yields will tend to be
somewhat lower. Also, when interest rates are falling, the inflow of net new
money to a Fund from the continuous sale of its shares will likely be invested
in portfolio instruments producing lower yields than the balance of the Funds'
portfolio, thereby reducing the current yield of the Fund. In periods of rising
interest rates, the opposite can be expected to occur.
Should a Fund incur or anticipate any unusual expense, loss, or
depreciation which would adversely affect its net asset values per share or
income for a particular period, the Directors would at that time consider
whether to adhere to the present dividend policy described above or revise it in
light of the then prevailing circumstances. For example, if a Fund's net asset
value per share were reduced, or were anticipated to be reduced, below $1.00,
the Directors may suspend further dividend payments until net asset value
returned to $1.00. Thus, such expenses or losses or depreciation may result in
the investor receiving upon redemption a price per share lower than that which
the investor paid.
COMMERCIAL PAPER AND BOND RATINGS
COMMERCIAL PAPER RATINGS
Standard & Poor's Corporation ("Standard & Poor's") commercial paper
ratings are graded into four categories, ranging from "A" for the highest
quality obligations to "D" for the lowest. Issues assigned the A rating are
regarded as having the greatest capacity for timely payment. Issues in this
category are further defined with the designation 1, 2 and 3 to indicate the
relative degree of safety. The "A-1" designation indicates that the degree of
safety regarding timely payment is either overwhelming or very strong. Those
issues determined to possess overwhelming safety characteristics will be denoted
with a plus sign designation.
Moody's Investors Service, Inc. ("Moody's") commercial paper ratings
are opinions of the ability of the issuers to repay punctually promissory
obligations not having an original maturity in excess of nine months. Moody's
makes no representation that such obligations are exempt from registration under
the Securities Act of 1933, and it does not represent that any specific note is
a valid obligation of a rated issuer or issued in conformity with any applicable
law. Moody's employs the following three designations, all judged to be
investment grade, to indicate the relative repayment capacity of rated issuers:
PRIME-1 ...................... Superior capacity for repayment
PRIME-2 ...................... Strong capacity for repayment
PRIME-3 ...................... Acceptable capacity for repayment
CORPORATE BOND RATINGS
Standard & Poor's ratings for corporate bonds include the following:
Bonds rated "AAA" have the highest rating assigned by Standard &
Poor's to a debt obligation. Capacity to pay interest and repay
principal is extremely strong.
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.
Moody's ratings for corporate bonds include the following:
Bonds 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.
Bonds 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 than
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
that make the long-term risks appear somewhat larger than the Aaa
securities.
FINANCIAL STATEMENTS
The financial statements of FAF included in its Annual Report to
Shareholders for the year ended September 30, 1995 are incorporated herein by
reference. Such Annual Report to Shareholders accompanies this Statement of
Additional Information.
FIRST AMERICAN FUNDS, INC.
PART C -- OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements for each series of the Registrant are incorporated
by reference into the Statement of Additional Information under the
heading "Financial Statements."
(b) Exhibits
*(1) Amended and Restated Articles of Incorporation, as amended
through January 20, 1995.
*(2) Bylaws, as amended through December 7, 1994.
(3) Not applicable.
(4) Not applicable.
*(5) Investment Advisory Agreement, dated January 20, 1995,
between the Registrant and First Bank National Association.
*(6)(a) Distribution Agreement and Service Agreement relating
to the Class B Shares, dated January 20, 1995, between the
Registrant and SEI Financial Services Company.
*(6)(b) Distribution Agreement relating to the Class A, Class C and
Class D Shares, dated January 1, 1995, between the Registrant
and SEI Financial Services Company.
(7) Not applicable.
*(8)(a) Custodian Agreement dated September 20, 1993, between the
Registrant and First Trust National Association.
*(8)(b) Compensation Agreement dated January 20, 1995, pursuant to
Custodian Agreement.
*(9)(a) Transfer Agency Agreement dated March 31, 1994,
between the Registrant and Supervised Service Company.
*(9)(b) Assignment of Transfer Agency Agreement to DST Systems, Inc.
*(9)(c) Administration Agreement dated January 1, 1995 between the
Registrant and SEI Financial Management Corporation.
*(10)(a) Opinion and Consent of Dorsey & Whitney, dated
January 26, 1982.
*(10)(b) Opinion and Consent of William N. Koster, Esq., dated
November 5, 1981.
*(11)(a) Consent of KPMG Peat Marwick.
*(11)(b) Opinion and Consent of Melissa R. Fogelberg, dated February 6,
1985.
*(11)(c) Opinion and Consent of Dorsey & Whitney, dated November 25,
1991.
(12) Not applicable.
*(13) Letter of Investment Intent, dated November 3, 1981.
*(14) Individual Retirement Plan Materials.
*(15)(a) Distribution Plan for Class A Shares.
*(15)(b) Distribution Plan for Class B Shares.
*(15)(c) Distribution Plan for Class D Shares.
*(15)(d) Service Plan for Class B Shares.
*(16) Schedule for Computation of Performance Quotations.
*(17) Financial Data Schedule meeting the requirements of Rule 483.
*(18) Multiple Class Plan Pursuant to Rule 18f-3.
*(19) Powers of Attorney, dated September 30, 1994.
* Filed herewith
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Not applicable.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
The following table sets forth the number of holders of shares of each
series and class of First American Funds, Inc. as of January 5, 1996:
Number of
Fund Title of Class Record Holders
Prime Obligations Fund Class A 1,478
Prime Obligations Fund Class B 13
Prime Obligations Fund Class C 16
Prime Obligations Fund Class D 4
Treasury Obligations Fund Class C 12
Treasury Obligations Fund Class D 5
Government Obligations Fund Class C 7
Government Obligations Fund Class D 4
ITEM 27. INDEMNIFICATION
The Registrant's Articles of Incorporation and Bylaws provide that the
Registrant shall indemnify such persons for such expenses and liabilities, in
such manner, under such circumstances, and to the full extent as permitted by
Section 302A.521 of the Minnesota Statutes, as now enacted or hereafter amended;
provided, however, that no such indemnification may be made if it would be in
violation of Section 17(h) of the Investment Company Act of 1940, as now enacted
or hereafter amended, and any rules, regulations, or releases promulgated
thereunder.
Section 302A.521 of the Minnesota Statutes, as now enacted, provides
that a corporation shall indemnify a person made or threatened to be made a
party to a proceeding by reason of the former or present official capacity of
the person against judgments, penalties, fines, settlements and reasonable
expenses, including attorneys' fees and disbursements, incurred by the person in
connection with the proceeding if, with respect to the acts or omissions of the
person complained of in the proceeding, the person has not been indemnified by
another organization for the same judgments, penalties, fines, settlements, and
reasonable expenses incurred by the person in connection with the proceeding
with respect to the same acts or omissions; acted in good faith, received no
improper personal benefit, and the Minnesota Statutes dealing with directors'
conflicts of interest, if applicable, have been satisfied; in the case of a
criminal proceeding, had no reasonable cause to believe that the conduct was
unlawful; and reasonably believed that the conduct was in the best interests of
the corporation or, in certain circumstances, reasonably believed that the
conduct was not opposed to the best interests of the corporation.
The Registrant undertakes that no indemnification or advance will be
made unless it is consistent with Sections 17(h) or 17(i) of the Investment
Company Act of 1940, as now enacted or hereafter amended, and Securities and
Exchange Commission rules, regulations, and releases (including, without
limitation, Investment Company Act of 1940 Release No. 11330, September 2,
1980).
Insofar as the indemnification for liability arising under the
Securities Act of 1933, as amended, may be permitted to directors, officers, and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in such Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer, or
controlling person of the Registrant in the successful defense of any action,
suit, or proceeding) is asserted by such director, officer, or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933, as amended, and will be governed by the final
adjudication of such issue.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Information on the business of the Registrant's investment adviser,
First Bank National Association (the "Manager"), is described in the section of
each series' Statement of Additional Information, filed as part of this
Registration Statement, entitled "Investment Advisory and Other Services." The
directors and officers of the Manager are listed below, together with their
principal occupation or other positions of a substantial nature during the past
two fiscal years.
<TABLE>
<CAPTION>
POSITIONS AND OFFICES OTHER POSITIONS AND OFFICES
NAME WITH THE MANAGER AND PRINCIPAL BUSINESS ADDRESS
<S> <C> <C>
John F. Grundhofer Chairman, President and Chief Chairman, President and Chief
Executive Officer Executive Officer of First Bank
System, Inc. ("FBS").*
Richard A. Zona Director, Vice Chairman and Chief Vice Chairman and Chief Financial
Officer Officer of FBS.*
William F. Farley Director and Vice Chairman Vice Chairman and Head of the
Distribution Group of FBS.*
Philip G. Heasley Director and Executive Vice President Vice Chairman and Head of the
Product Group of FBS.*
Daniel C. Rohr Director and Executive Vice President Executive Vice President Commercial
Banking of FBS.*
J. Robert Hoffman Director and Executive Vice President Executive Vice President Credit
Administration of FBS.*
Lee R. Mitau Director, Executive Vice President and Executive Vice President, Secretary,
Secretary and General Counsel of FBS; prior to
October 1995 partner in Dorsey &
Whitney P.L.L.P.*
</TABLE>
* Address: First Bank Place, 601 Second Avenue South, Minneapolis,
Minnesota 55402.
ITEM 29. PRINCIPAL UNDERWRITERS:
(a) Furnish the name of each investment company (other than the Registrant)
for which each principal underwriter currently distributing securities
of the Registrant also acts as a principal underwriter, distributor or
investment adviser:
Registrant's distributor, SEI Financial Services Company
("SFS") acts as distributor for SEI Liquid Asset Trust, SEI Daily
Income Trust, SEI Tax Exempt Trust, SEI Index Funds, SEI Institutional
Managed Trust, SEI International Trust, Stepstone Funds, The Compass
Capital Group of Funds, FFB Lexicon Funds, The Advisors' Inner Circle
Fund, Pillar Funds, CUFund, STI Classic Funds, CoreFunds, Inc., First
American Funds, Inc., The Arbor Fund, 1784 Funds, Marquis Funds, Morgan
Grenfell Investment Trust, The PBHG Funds, Inc., Inventor Funds, Inc.,
The Achievement Funds Trust, Insurance Investment Products Trust,
Bishop Street Funds, CrestFunds, Inc., Conestoga Family of Funds, STI
Classic Variable Trust, and ARK Funds pursuant to distribution
agreements dated November 29, 1982, July 15, 1982, December 3, 1982,
July 10, 1985, January 22, 1987, August 30, 1988, January 30, 1991,
March 8, 1991, October 18, 1991, November 14, 1991, February 28, 1992,
May 1, 1992, May 29, 1992, October 30, 1992, November 1, 1992, January
28, 1993, June 1, 1993, August 17, 1993, January 3, 1994, August 1,
1994, December 27, 1994, December 30, 1994, January 27, 1995, March 1,
1995, May 1, 1995, August 18, 1995, and November 1, 1995, respectively.
SFS provides numerous financial services to investment
managers, pension plan sponsors, and bank trust departments. These
services include portfolio evaluation, performance measurement, and
consulting services ("Funds Evaluation") and automated execution,
clearing and settlement of securities transactions ("MarketLink").
(b) Furnish the information required by the following table with respect to
each director, officer or partner of each principal underwriter named
in the answer to Item 21 of Part B. Unless otherwise noted, the
business address of each director or officer is 680 East Swedesford
Road, Wayne, Pennsylvania 19087.
<TABLE>
<CAPTION>
POSITIONS AND POSITIONS AND
NAME OFFICES WITH UNDERWRITER OFFICES WITH REGISTRANT
<S> <C> <C>
Alfred P. West, Jr. Director, Chairman & Chief --
Executive Officer
Henry H. Greer Director, President & Chief --
Operating Officer
Carmen V. Romeo Director, Executive Treasurer, Assistant Secretary
Vice President & Treasurer
Gilbert L. Beebower Executive Vice President --
Carl A. Guarino Senior Vice President --
Richard B. Lieb Executive Vice President --
Charlie Marsh Executive Vice President --
-- Capital Resources Division
Leo J. Dolan, Jr. Senior Vice President --
Peter Giegoldt Senior Vice President --
Jerome Hickey Senior Vice President --
David Lee Senior Vice President President
William Madden Senior Vice President --
A. Keith McDowell Senior Vice President --
Dennis J. McGonigle Senior Vice President --
Hartland J. McKeown Senior Vice President --
James V. Morris Senior Vice President --
Steve Onofrio Senior Vice President --
Kevin P. Robins Senior Vice President, Vice President & Assistant Secretary
General Counsel & Secretary
Robert Wagner Senior Vice President --
Patrick K. Walsh Senior Vice President --
Kenneth Zimmer Senior Vice President --
Robert Crudup Managing Director --
Ward Curtis Managing Director --
Jeff Drennan Managing Director --
Victor Galef Managing Director --
Michael Howard Managing Director --
Lawrence Hutchison Managing Director --
Kim Kirk Managing Director --
John Krzeminski Managing Director --
Carolyn McLaurin Managing Director --
Barbara Moore Managing Director --
Donald Pepin Managing Director --
Mark Samuels Managing Director --
Wayne M. Withrow Managing Director --
Robert S. Ludwig Team Leader --
Vicki Rainsford Team Leader --
Chris Schwartz Team Leader --
Robert Aller Vice President --
Charles Baker Vice President --
Steve Bendinelli Vice President --
Gordon W. Carpenter Vice President --
Robert B. Carroll Vice President &
Assistant Secretary Vice President & Assistant Secretary
Ed Daly Vice President --
Lucinda Duncalte Vice President --
Michael Kantor Vice President --
Samuel King Vice President --
Donald H. Korytowski Vice President --
Jack May Vice President --
Matt Mille Vice President --
David O'Donovan Vice President --
Sandra K. Orlow Vice President &
Assistant Secretary Vice President & Assistant Secretary
Kim Rainey Vice President --
David Ray Vice President --
Paul Sachs Vice President --
Steve Smith Vice President --
Kathryn L. Stanton Vice President &
Assistant Secretary Vice President & Assistant Secretary
Joseph Velez Vice President --
David Wheeler Vice President --
William Zawaski Vice President --
James Dougherty Director, Brokerage Services --
</TABLE>
(c) Information on the compensation of the Distributor is described in the
section of each series' Statement of Additional Information, filed as
part of this Registration Statement, entitled "Investment Advisory and
Other Services."
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
All accounts, books, and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the rules promulgated
thereunder are maintained by SEI Financial Services Company, 680 East Swedesford
Road, Wayne, Pennsylvania 19087.
ITEM 31. MANAGEMENT SERVICES
Not applicable.
ITEM 32. UNDERTAKINGS
Registrant undertakes to call a meeting of Shareholders for the purpose
of voting upon the question of removal of a Director(s) when requested in
writing to do so by the holders of at least 10% of Registrant's outstanding
shares and in connection with such meetings to comply with the provisions of
Section 16(c) of the Investment Company Act of 1940 relating to Shareholder
communications.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, as amended, the Registrant certifies that it
meets all of the requirements for effectiveness of this Post-Effective Amendment
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused
this Post-Effective Amendment to its Registration Statement No. 2-74747 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Wayne, Commonwealth of Pennsylvania, on the 22nd day of January, 1996.
FIRST AMERICAN FUNDS, INC.
ATTEST: /s/ Stephen G. Meyer By: /s/ David Lee
Stephen G. Meyer David Lee, President
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below by the following persons in the
capacity and on the dates indicated.
SIGNATURE TITLE DATE
/s/ Stephen G. Meyer Controller (Principal **
Stephen G. Meyer Financial and Accounting
Officer)
* Director **
Robert J. Dayton
* Director **
Welles B. Eastman
* Director **
Irving D. Fish
* Director **
Leonard W. Kedrowski
* Director **
Joseph D. Strauss
* Director **
Virginia L. Stringer
* Director **
Gae B. Veit
* By: /s/ David Lee
David Lee
Attorney in Fact
** January 22, 1996.
EXHIBIT (1)
CERTIFICATE OF AMENDMENT AND RESTATEMENT TO
THE ARTICLES OF INCORPORATION OF
FIRST AMERICAN FUNDS, INC.
The undersigned, David Lee and Michael J. Radmer, respectively the
President and Secretary of First American Funds, Inc. (the "Fund"), a
corporation subject to the provisions of Chapter 302A of the Minnesota Statutes,
do hereby certify that the Fund's Board of Directors and shareholders, at
meetings held March 7, 1994 and December 16, 1994, respectively, adopted
resolutions as hereafter set forth:
RESOLVED, that the Amended and Restated Articles of Incorporation of
the Fund, in the form presented at this meeting, which are to supersede
and take the place of the Fund's existing Articles of Incorporation, as
heretofore restated and amended, be, and they hereby are, approved.
The undersigned further certify that the following Amended and Restated
Articles of Incorporation constitute the Amended and Restated Articles of
Incorporation presented and approved at said meetings of the Fund's Board of
Directors and shareholders.
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
FIRST AMERICAN FUNDS, INC.
For the purpose of forming a corporation pursuant to the provisions of
Minnesota Statutes, Chapter 302A, the following Articles of Incorporation are
adopted:
1. The name of this corporation is FIRST AMERICAN FUNDS, INC.
2. This corporation shall have general business purposes and shall have
unlimited power to engage in and do any lawful act concerning any and all lawful
businesses for which corporations may be organized under the Minnesota Statutes,
Chapter 302A. Without limiting the generality of the foregoing, this corporation
shall have specific power:
(a) To conduct, operate and carry on the business of a
so-called "open-end" management investment company pursuant to
applicable state and federal regulatory statutes, and exercise all the
powers necessary and appropriate to the conduct of such operations.
(b) To purchase, subscribe for, invest in or otherwise
acquire, and to own, hold, pledge, mortgage, hypothecate, sell,
possess, transfer or otherwise dispose of, or turn to account or
realize upon, and generally deal in, all forms of securities of every
kind, nature, character, type and form, including but not limited to,
shares, stocks, bonds, debentures, notes, scrip, participation
certificates, rights to subscribe, warrants, options, certificates of
deposit, bankers' acceptances, repurchase agreements, commercial paper,
choses in action, evidences of indebtedness, certificates of
indebtedness and certificates of interest of any and every kind and
nature whatsoever, secured and unsecured, issued or to be issued, by
any corporation, company, partnership (limited or general),
association, trust, entity or person, public or private, whether
organized under the laws of the United States, or any state,
commonwealth, territory or possession thereof, or organized under the
laws of any foreign country, or any state, province, territory or
possession thereof, or the United States government or any agency or
instrumentality thereof.
(c) In the above provisions of this Article 2, purposes shall
also be construed as powers and powers shall also be construed as
purposes, and the enumeration of specific purposes or powers shall
not be construed to limit other statements of purposes or to limit
purposes or powers which the corporation may otherwise have under
applicable law, all of the same being separate and cumulative, and all
of the same may be carried on, promoted and pursued, transacted or
exercised in any place whatsoever.
3. This corporation shall have perpetual existence.
4. The location and post office address of the registered office in
Minnesota is 180 East Fifth Street, 3rd Floor, St. Paul, Minnesota 55101
5. The total authorized number of shares of this corporation is ten
trillion (10,000,000,000,000), all of which shall be common shares of the par
value of $.01 each. Of said common shares:
(a) 100,000,000,000 shares may be issued in the series of
common shares hereby designated as "Series A Common Shares;" of such
Series A Common Shares, 20,000,000,000 shares may be issued in the
class hereby designated as "Series A, Class One Common Shares," and the
shares of the corporation previously designated as "Series A Common
Shares" are hereby redesignated as Series A, Class One Common Shares;
and the balance of 80,000,000,000 Series A Common Shares may be issued
in one or more additional classes with such designations, preferences
and relative, participating, optional or other special rights, or
qualifications, limitations or restrictions thereof, as shall be stated
or expressed in a resolution or resolutions providing for the issue of
such class as may be adopted from time to time by the Board of
Directors of this corporation pursuant to the authority hereby vested
in the Board of Directors;
(b) 100,000,000,000 shares may be issued in the series of
common shares hereby designated as "Series B Common Shares;" of such
Series B Common Shares, 20,000,000,000 shares may be issued in the
class hereby designated as "Series B, Class One Common Shares," and the
shares of the corporation previously designated as "Series B Common
Shares" are hereby redesignated as Series B, Class One Common Shares;
20,000,000,000 shares may be issued in the class hereby designated as
"Series B, Class Two Common Shares;" 20,000,000,000 shares may be
issued in the class hereby designated as "Series B, Class Three Common
Shares;" and the balance of 40,000,000,000 Series B Common Shares may
be issued in one or more additional classes with such designations,
preferences and relative, participating, optional or other special
rights, or qualifications, limitations or restrictions thereof, as
shall be stated or expressed in a resolution or resolutions providing
for the issue of such class as may be adopted from time to time by the
Board of Directors of this corporation pursuant to the authority hereby
vested in the Board of Directors;
(c) 100,000,000,000 shares may be issued in the series of
common shares hereby designated as "Series C Common Shares;" of such
Series C Common Shares, 20,000,000,000 shares may be issued in the
class hereby designated as "Series C, Class One Common Shares," and the
shares of the corporation previously designated as "Series C Common
Shares" are hereby redesignated as Series C, Class One Common Shares;
20,000,000,000 shares may be issued in the class hereby designated as
"Series C, Class Two Common Shares;" and the balance of 60,000,000,000
Series C Common Shares may be issued in one or more additional classes
with such designations, preferences and relative, participating,
optional or other special rights, or qualifications, limitations or
restrictions thereof, as shall be stated or expressed in a resolution
or resolutions providing for the issue of such class as may be adopted
from time to time by the Board of Directors of this corporation
pursuant to the authority hereby vested in the Board of Directors;
(d) 100,000,000,000 shares may be issued in the series of
common shares hereby designated as "Series D Common Shares;" of such
Series D Common Shares, 20,000,000,000 shares may be issued in the
class hereby designated as "Series D, Class One Common Shares," and the
shares of the corporation previously designated as "Series D Common
Shares" are hereby redesignated as Series D, Class One Common Shares;
20,000,000,000 shares may be issued in the class hereby designated as
"Series D, Class Two Common Shares;" and the balance of 60,000,000,000
Series D Common Shares may be issued in one or more additional classes
with such designations, preferences and relative, participating,
optional or other special rights, or qualifications, limitations or
restrictions thereof, as shall be stated or expressed in a resolution
or resolutions providing for the issue of such class as may be adopted
from time to time by the Board of Directors of this corporation
pursuant to the authority hereby vested in the Board of Directors;
(e) 100,000,000,000 shares may be issued in the series of
common shares hereby designated as "Series E Common Shares;" of such
Series E Common Shares, 10,000,000,000 shares may be issued in the
class hereby designated as "Series E, Class One Common Shares," and the
shares of the corporation previously designated as "Series E Common
Shares" are hereby redesignated as Series E, Class One Common Shares;
and the balance of 90,000,000,000 Series E Common Shares may be issued
in one or more additional classes with such designations, preferences
and relative, participating, optional or other special rights, or
qualifications, limitations or restrictions thereof, as shall be stated
or expressed in a resolution or resolutions providing for the issue of
such class as may be adopted from time to time by the Board of
Directors of this corporation pursuant to the authority hereby vested
in the Board of Directors.
The balance of 9,500,000,000,000 shares may be issued in such other series with
such designations, preferences and relative, participating, optional or other
special rights, or qualifications, limitations or restrictions thereof, as shall
be stated or expressed in a resolution or resolutions providing for the issue of
such series of common shares as may be adopted from time to time by the Board of
Directors of this corporation pursuant to the authority hereby vested in the
Board of Directors. The shares of any series hereafter established may be
classified by the Board of Directors into one or more classes with such relative
rights and preferences as shall be stated or expressed in a resolution or
resolutions providing for the issue of such class or classes as may be adopted
from time to time by the Board of Directors of the corporation pursuant to the
authority hereby vested in the Board of Directors and Minnesota Statutes Section
302A.401, Subd. 3, or any successor provision.
The Board of Directors, from time to time, may select names for any
class or series of the corporation, without the authorization or approval of the
holders of shares of any class or series of the corporation. Unless and until
the Board of Directors selects different names, the series and classes
designated in paragraphs (b), (c) and (d) above shall be known as follows:
<TABLE>
<S><C>
Series B, Class One: Prime Obligations Fund, "Class C" or "Institutional Class."
Series B, Class Two: Prime Obligations Fund, "Class D" or "Corporate Trust Class."
Series B, Class Three; Prime Obligations Fund, "Class A" or "Retail Class."
Series C, Class One: Government Obligations Fund, "Class C" or "Institutional Class."
Series C, Class Two: Government Obligations Fund, "Class D" or "Corporate Trust Class."
Series D, Class One: Treasury Obligations Fund, "Class C" or "Institutional Class."
Series D, Class Two: Treasury Obligations Fund, "Class D" or "Corporate Trust Class."
</TABLE>
Shares of any class or series of the corporation may be issued to the
holders of shares of another class or series of this corporation, whether to
effect a stock dividend or split or otherwise, without the authorization or
approval of the holders of shares of any class or series of the corporation. The
corporation may issue and sell any of its shares in fractional denominations to
the same extent as its whole shares, and shares and fractional denominations
shall have, in proportion to the relative fractions represented thereby, all the
rights of whole shares, including, without limitation, the right to vote, the
right to receive dividends and distributions, and the right to participate upon
liquidation of the corporation. The Series A Common Shares, the Series B Common
Shares, the Series C Common Shares, the Series D Common Shares and the Series E
Common Shares each evidence, and each other series of common shares which the
Board of Directors may establish, as provided herein, may evidence, if the Board
of Directors shall so determine by resolution, an interest in a separate and
distinct portion of the corporation's assets, which takes the form of a separate
portfolio of investment securities, cash and other assets. Authority to
establish such other separate portfolios is hereby vested in the Board of
Directors of this corporation, and such other separate portfolios may be
established by the Board of Directors without the authorization or approval of
the holders of any class or series of shares of this corporation. The shares of
each class within a series may be subject to such charges and expenses
(including by way of example, but not by way of limitation, such front-end and
deferred sales charges as may be permitted under the Investment Company Act of
1940, as amended (the "1940 Act") and rules of the National Association of
Securities Dealers, Inc. ("NASD"), expenses under Rule 12b-1 plans,
administration plans, service plans, or other plans or arrangements, however
designated) adopted from time to time by the Board of Directors of the
corporation in accordance, to the extent applicable, with the 1940 Act, which
charges and expenses may differ from those applicable to another class within
such series, and all of the charges and expenses to which a class is subject
shall be borne by such class and shall be appropriately reflected (in the manner
determined by the Board of Directors) in determining the net asset value and the
amounts payable with respect to dividends and distributions on and redemptions
or liquidations of, the shares of such class. Subject to compliance with the
requirements of the 1940 Act, the Board of Directors shall have the authority to
provide that shares of any class shall be convertible (automatically, optionally
or otherwise) into shares of one or more other classes of the same series in
accordance with such requirements and procedures as may be established by the
Board of Directors.
6. The shareholders of each class or series of common shares of this
corporation:
(a) shall not have the right to cumulate votes for the
election of directors; and
(b) shall have no preemptive right to subscribe to any issue
of shares of any class or series of this corporation now or hereafter
made.
7. The shareholders of Series A Common Shares, Series B Common Shares,
Series C Common Shares, Series D Common Shares and Series E Common Shares shall
have the following rights and preferences:
(a) On any matter submitted to a vote of shareholders of this
corporation, all common shares of this corporation then issued and
outstanding and entitled to vote, irrespective of class or series,
shall be voted in the aggregate and not by class or series, except: (i)
when otherwise required by Minnesota Statutes, Chapter 302A, in which
case shares will be voted by individual class or series; (ii) when
otherwise required by the 1940 Act or the rules adopted thereunder, in
which case shares shall be voted by individual class or series; and
(iii) when the matter does not affect the interests of a particular
class or series, in which case only shareholders of the classes or
series affected shall be entitled to vote thereon and shall vote by
individual class or series.
(b) All consideration received by this corporation for the
issue or sale of shares of any class or series, together with all
assets, income, earnings, profits and proceeds derived therefrom
(including all proceeds derived from the sale, exchange or liquidation
thereof and, if applicable, any assets derived from any reinvestment of
such proceeds in whatever form the same may be) shall become part of
the assets of the portfolio to which the shares of that class or series
relate, for all purposes, subject only to the rights of creditors, and
shall be so treated upon the books of account of this corporation. Such
assets, income, earnings, profits and proceeds (including any proceeds
derived from the sale, exchange or liquidation thereof and, if
applicable, any assets derived from any reinvestment of such proceeds
in whatever form the same may be) are herein referred to as "assets
belong to" a class or series of the common shares of this corporation.
(c) Assets of this corporation not belonging to any particular
class or series are referred to herein as "General Assets." General
Assets shall be allocated to each class or series in proportion to the
respective net assets belonging to such class or series. The
determination of the Board of Directors shall be conclusive as to the
amount of assets, as to the characterization of assets as those
belonging to a class or series or as General Assets, and as to the
allocation of General Assets.
(d) The assets belonging to a particular class or series of
common share shall be charged with the liabilities incurred
specifically on behalf of such class or series of common shares
("Special Liabilities"). Such assets shall also be charged with a share
of the general liabilities of this corporation ("General Liabilities")
in proportion to the respective net assets belonging to such class or
series of common shares. The determination of the Board of Directors
shall be conclusive as to the amount of liabilities, including accrued
expenses and reserves, as to the characterization of any liability as a
Special Liability or General Liability, and as to the allocation of
General Liabilities.
(e) The Board of Directors may, to the extent permitted by
Minnesota Statutes, Chapter 302A, and in the manner provided herein,
declare and pay dividends or distributions in shares or cash on any or
all classes or series of common shares, the amount of such dividends
and the payment thereof being wholly in the discretion of the Board of
Directors. Dividends or distributions on shares of any class or series
of common shares shall be paid only out of the earnings, surplus or
other lawfully available assets belonging to such class or series
(including, for this purpose, any General Assets allocated to such
class or series).
(f) In the event of the liquidation or dissolution of this
corporation, holders of the shares of any class or series shall have
priority over the holders of any other class or series with respect to,
and shall be entitled to receive, out of the assets of this corporation
available for distribution to holders of shares, the assets belonging
to such class or series of common shares and the General Assets
allocated to such class or series of common shares, and the assets so
distributable to the holders of the shares of any class or series shall
be distributed among such holders in proportion to the number of shares
of such class or series held by them and recorded on the books of this
corporation.
8. The following additional provisions, when consistent with law, are
hereby established for the management of the business, for the conduct of the
affairs of the corporation, and for the purpose of describing certain specific
powers of the corporation and of its directors and shareholders.
(a) In furtherance and not in limitation of the powers
conferred by statute and pursuant to these Amended and Restated
Articles of Incorporation, the Board of Directors is expressly
authorized to do the following:
(1) to make, adopt, alter, amend and repeal Bylaws of
the corporation unless reserved to the shareholders by the
Bylaws or by the laws of the State of Minnesota, subject to
the power of the shareholders to change or repeal such Bylaws;
(2) to distribute, in its discretion, for any fiscal
year (in the year or in the next fiscal year) as ordinary
dividends and as capital gains distributions, respectively,
amounts sufficient to enable the corporation and each class or
series thereof to qualify under the Internal Revenue Code as a
regulated investment company to avoid any liability for
federal income tax in respect of such year. Any distribution
or dividend paid to shareholders from any capital source shall
be accompanied by a written statement showing the source or
sources of such payment;
(3) to authorize, subject to such vote, consent, or
approval of shareholders and other conditions, if any, as may
be required by any applicable statute, rule or regulation, the
execution and performance by the corporation of any agreement
or agreements with any person, corporation, association,
company, trust, partnership (limited or general) or other
organization whereby, subject to the supervision and control
of the Board of Directors, any such other person, corporation,
association, company, trust, partnership (limited or general),
or other organization shall render managerial, investment
advisory, distribution, transfer agent, accounting and/or
other services to the corporation (including, if deemed
advisable, the management or supervision of the investment
portfolios of the corporation) upon such terms and conditions
as may be provided in such agreement or agreements;
(4) to authorize any agreement of the character
described in subparagraph (3) of this paragraph (a) with any
person, corporation, association, company, trust, partnership
(limited or general) or other organization, although one or
more of the members of the Board of Directors or officers of
the corporation may be the other party to any such agreement
or an officer, director, shareholder, or member of such other
party, and no such agreement shall be invalidated or rendered
voidable by reason of the existence of any such relationship;
(5) to allot and authorize the issuance of the
authorized but unissued shares of any class or series of this
corporation;
(6) to accept or reject subscriptions for shares of
any class or series made after incorporation; and
(7) to fix the terms, conditions and provisions of
and authorize the issuance of options to purchase or subscribe
for shares of any class or series including the option price
or prices at which shares may be purchased or subscribed for.
(b) The determination as to any of the following matters made
by or pursuant to the direction of the Board of Directors consistent
with these Amended and Restated Articles of Incorporation and in the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of duties, shall be final and conclusive and shall be binding
upon the corporation and every holder of shares of its capital stock:
namely, the amount of the assets, obligations, liabilities and expenses
of each class or series of the corporation; the amount of the net
income of each class or series of the corporation from dividends and
interest for any period and the amount of assets at any time legally
available for the payment of dividends in each class or series; the
amount of paid-in surplus, other surplus, annual or other net profits,
or net assets in excess of capital, undivided profits, or excess of
profits over losses on sales of securities of each class or series; the
amount, purpose, time of creation, increase or decrease, alteration or
cancellation of any reserves or charges and the propriety thereof
(whether or not any obligation or liability for which such reserves or
charges shall have been created shall have been paid or discharged);
the market value, or any sale, bid or asked price to be applied in
determining the market value, of any security owned or held by or in
each class or series of the corporation; the fair value of any other
asset owned by or in each class or series of the corporation; the
number of shares of each class or series of the corporation issued or
issuable; any matter relating to the acquisition, holding and
disposition of securities and other assets by each class or series of
the corporation; and any question as to whether any transaction
constitutes a purchase of securities on margin, a short sale of
securities, or an underwriting of the sale of, or participation in any
underwriting or selling group in connection with the public
distribution of any securities.
(c) The Board of Directors or the shareholders of the
corporation may adopt, amend, affirm or reject investment policies and
restrictions upon investment or the use of assets of each class or
series of the corporation and may designate some such policies as
fundamental and not subject to change other than by a vote of a
majority of the outstanding voting securities, as such phrase is
defined in the 1940 Act, of the affected class or series of the
corporation.
(d) The corporation shall indemnify such persons for such
expenses and liabilities, in such manner, under such circumstances, and
to the full extent permitted by Section 302A.521 of the Minnesota
Statutes, as now enacted or hereafter amended, provided, however, that
no such indemnification may be made if it would be in violation of
Section 17(h) of the 1940 Act, as now enacted or hereafter amended.
(e) Except as required by the 1940 Act, any action which might
be taken at a meeting of the Board of Directors, or any duly
constituted committee thereof, may be taken without a meeting if done
in writing and signed by a majority of the directors or committee
members.
(f) To the fullest extent permitted by the Minnesota Business
Corporation Act, as the same exists or may hereafter be amended (except
as prohibited by the 1940 Act, as the same exists or may hereafter be
amended), a director of this corporation shall not be liable to this
corporation or its shareholders for monetary damages for breach of
fiduciary duty as a director.
IN WITNESS WHEREOF, the undersigned have executed these
Amended and Restated Articles of Incorporation on January 20, 1995.
/s/ David Lee
David Lee
/s/ Michael J. Radmer
Michael J. Radmer
ARTICLES OF AMENDMENT
TO
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
FIRST AMERICAN FUNDS, INC.
The undersigned, David Lee and Michael J. Radmer, respectively
the President and Secretary of First American Funds, Inc. (the "Fund"), a
corporation subject to the provisions of Chapter 302A of the Minnesota Statutes,
do hereby certify that the Fund's Board of Directors and shareholders, at
meetings held June 8, 1994 and December 16, 1994, respectively, adopted
resolutions as hereinafter set forth:
RESOLVED, that the Fund's Amended and Restated Articles of
Incorporation be, and hereby are, amended to add the following Article
5A immediately following Article 5 thereof:
5A. (a) For purposes of this Article 5A, (i) the term
"Effective Time" means 4:00 p.m. Eastern time on the date upon which
these Articles of Amendment are filed with the Secretary of State of
the State of Minnesota; (ii) the term "Acquiring Fund" means Series B
of the Fund (also known as Prime Obligations Fund); (iii) the term
"Acquiring Fund Shares" means Series B, Class Three Common Shares of
the Fund (also known as Retail Class Shares of Prime Obligations Fund);
(iv) the term "Acquired Fund" means Series A of the Fund (also known as
Money Fund); and (v) the term "Acquired Fund Shares" means Series A
Shares of the Fund (also known as Money Fund Shares).
(b) As of the Effective Time, each issued and outstanding
Acquired Fund Share shall be, without further action, exchanged for
that number of Acquiring Fund Shares calculated in accordance with
paragraph (c) below.
(c) The number of Acquiring Fund Shares to be issued
(including fractional shares, if any) in exchange for each Acquired
Fund Share shall be determined immediately prior to the Effective Time
by dividing (i) the net asset value of one Acquired Fund Share,
determined in accordance with (X) and (Y) below, by (ii) the net asset
value of one issued and outstanding Acquiring Fund share, determined in
accordance with (X) and (Y) below.
(X) For the purpose of determining the number of
Acquiring Fund Shares to be issued in exchange for each
Acquired Fund Share, the value of the aggregate net assets of
the Acquired Fund as of the Effective Time shall be computed
as of the Effective Time before giving effect to the exchange,
using the valuation procedures set forth in the Acquired
Fund's articles of incorporation and bylaws and then-current
Prospectus and Statement of Additional Information and as may
be required by the Investment Company Act of 1940, as amended
(the "1940 Act"). For such purpose, the value of the aggregate
net assets of the Acquiring Fund as of the Effective Time
shall be computed as of the Effective Time before giving
effect to the exchange, using the valuation procedures set
forth in the Acquiring Fund's articles of incorporation and
bylaws and then-current Prospectus and Statement of Additional
Information and as may be required by the 1940 Act.
(Y) For the purpose of determining the number of
Acquiring Fund Shares to be issued in exchange for each
Acquired Fund Share, the net asset value of each Acquired
Fund Share as of the Effective Time shall be computed
immediately prior to the Effective Time by dividing the value
of the Acquired Fund's aggregate net assets as of the
Effective Time (determined in accordance with the first
sentence of (X) above) by the aggregate number of issued and
outstanding Acquired Fund Shares (full and fractional) as of
the Effective Time. For such purpose, the net asset value of
each issued and outstanding Acquiring Fund share as of the
Effective Time shall be computed immediately prior to the
Effective Time by dividing the value of the Acquiring Fund's
aggregate net assets as of the Effective Time (determined in
accordance with the second sentence of (X) above) by the
aggregate number of issued and outstanding Acquiring Fund
shares (full and fractional) as of the Effective Time. In each
such case, net asset value per share shall be computed in
accordance with Rule 2a-7 under the 1940 Act.
(d) At the Effective Time, the Acquiring Fund shall issue and
distribute to the Acquired Fund or, at the direction of the Acquired
Fund's Board of Directors, to the Acquired Fund's shareholders of
record, determined as of the Effective Time, the Acquiring Fund Shares
issued in exchange for the Acquired Fund Shares pursuant to paragraphs
(b) and (c) above. Such distribution shall be accomplished by the
issuance of such Acquiring Fund Shares to open accounts on the share
records of the Acquiring Fund in the names of the Acquired Fund
shareholders representing the number of Acquiring Fund Shares due each
such shareholder pursuant to such paragraphs. All issued and
outstanding shares of the Acquired Fund shall simultaneously be
cancelled on the books of the Acquired Fund and retired. From and after
the Effective Time, share certificates formerly representing Acquired
Fund Shares shall represent the number of Acquiring Fund Shares
determined in accordance with paragraphs (b) and (c) above.
(e) From and after the Effective Time, the Acquired Fund
Shares cancelled and retired pursuant to paragraph (d) above shall have
the status of authorized and unissued Class A Shares of the Fund.
(f) At the Effective Time, the assets belonging to the
Acquired Fund, the Special Liabilities associated with such assets, and
the General Assets and General Liabilities allocated to the Acquired
Fund, shall become, without further action, assets belonging to the
Acquiring Fund, Special Liabilities associated with such assets, and
General Assets and General Liabilities allocated to the Acquiring Fund,
all in accordance with Article 7(b), (c) and (d) of the Fund's Amended
and Restated Articles of Incorporation. For purposes of the foregoing,
the terms "assets belonging to," "Special Liabilities," "General
Assets" and "General Liabilities" have the meanings assigned to them in
said Article 7(b), (c) and (d).
IN WITNESS WHEREOF, the undersigned have executed these
Articles of Amendment on January 20, 1995.
/s/ David Lee
David Lee
/s/ Michael J. Radmer
Michael J. Radmer
ARTICLES OF AMENDMENT
TO
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
FIRST AMERICAN FUNDS, INC.
The undersigned, David Lee and Michael J. Radmer, respectively
the President and Secretary of First American Funds, Inc. (the "Fund"), a
corporation subject to the provisions of Chapter 302A of the Minnesota Statutes,
do hereby certify that the Fund's Board of Directors and shareholders, at
meetings held June 8, 1994 and December 16, 1994, respectively, adopted
resolutions as hereinafter set forth:
RESOLVED, that the Fund's Amended and Restated Articles of
Incorporation be, and hereby are, amended to add the following Article
5B immediately following Article 5 thereof:
5A. (a) For purposes of this Article 5B, (i) the term
"Effective Time" means 4:00 p.m. Eastern time on the date upon which
these Articles of Amendment are filed with the Secretary of State of
the State of Minnesota; (ii) the term "Acquiring Fund" means Series C
of the Fund (also known as Government Obligations Fund); (iii) the term
"Acquiring Fund Shares" means Series C, Class Two Common Shares of the
Fund (also known as Corporate Trust Class Shares of Government
Obligations Fund); (iv) the term "Acquired Fund" means Series E of the
Fund (also known as CT Government Fund); and (v) the term "Acquired
Fund Shares" means Series E Shares of the Fund (also known as CT
Government Fund Shares).
(b) As of the Effective Time, each issued and outstanding
Acquired Fund Share shall be, without further action, exchanged for
that number of Acquiring Fund Shares calculated in accordance with
paragraph (c) below.
(c) The number of Acquiring Fund Shares to be issued
(including fractional shares, if any) in exchange for each Acquired
Fund Share shall be determined immediately prior to the Effective Time
by dividing (i) the net asset value of one Acquired Fund Share,
determined in accordance with (X) and (Y) below, by (ii) the net asset
value of one issued and outstanding Acquiring Fund share, determined in
accordance with (X) and (Y) below.
(X) For the purpose of determining the number of
Acquiring Fund Shares to be issued in exchange for each
Acquired Fund Share, the value of the aggregate net assets of
the Acquired Fund as of the Effective Time shall be computed
as of the Effective Time before giving effect to the exchange,
using the valuation procedures set forth in the Acquired
Fund's articles of incorporation and bylaws and then-current
Prospectus and Statement of Additional Information and as may
be required by the Investment Company Act of 1940, as amended
(the "1940 Act"). For such purpose, the value of the aggregate
net assets of the Acquiring Fund as of the Effective Time
shall be computed as of the Effective Time before giving
effect to the exchange, using the valuation procedures set
forth in the Acquiring Fund's articles of incorporation and
bylaws and then-current Prospectus and Statement of Additional
Information and as may be required by the 1940 Act.
(Y) For the purpose of determining the number of
Acquiring Fund Shares to be issued in exchange for each
Acquired Fund Share, the net asset value of each Acquired Fund
Share as of the Effective Time shall be computed immediately
prior to the Effective Time by dividing the value of the
Acquired Fund's aggregate net assets as of the Effective Time
(determined in accordance with the first sentence of (X)
above) by the aggregate number of issued and outstanding
Acquired Fund Shares (full and fractional) as of the Effective
Time. For such purpose, the net asset value of each issued and
outstanding Acquiring Fund share as of the Effective Time
shall be computed immediately prior to the Effective Time by
dividing the value of the Acquiring Fund's aggregate net
assets as of the Effective Time (determined in accordance with
the second sentence of (X) above) by the aggregate number of
issued and outstanding Acquiring Fund shares (full and
fractional) as of the Effective Time. In each such case, net
asset value per share shall be computed in accordance with
Rule 2a-7 under the 1940 Act.
(d) At the Effective Time, the Acquiring Fund shall issue and
distribute to the Acquired Fund or, at the direction of the Acquired
Fund's Board of Directors, to the Acquired Fund's shareholders of
record, determined as of the Effective Time, the Acquiring Fund Shares
issued in exchange for the Acquired Fund Shares pursuant to paragraphs
(b) and (c) above. Such distribution shall be accomplished by the
issuance of such Acquiring Fund Shares to open accounts on the share
records of the Acquiring Fund in the names of the Acquired Fund
shareholders representing the number of Acquiring Fund Shares due each
such shareholder pursuant to such paragraphs. All issued and
outstanding shares of the Acquired Fund shall simultaneously be
cancelled on the books of the Acquired Fund and retired. From and after
the Effective Time, share certificates formerly representing Acquired
Fund Shares shall represent the number of Acquiring Fund Shares
determined in accordance with paragraphs (b) and (c) above.
(e) From and after the Effective Time, the Acquired Fund
Shares cancelled and retired pursuant to paragraph (d) above shall have
the status of authorized and unissued Class A Shares of the Fund.
(f) At the Effective Time, the assets belonging to the
Acquired Fund, the Special Liabilities associated with such assets, and
the General Assets and General Liabilities allocated to the Acquired
Fund, shall become, without further action, assets belonging to the
Acquiring Fund, Special Liabilities associated with such assets, and
General Assets and General Liabilities allocated to the Acquiring Fund,
all in accordance with Article 7(b), (c) and (d) of the Fund's Amended
and Restated Articles of Incorporation. For purposes of the foregoing,
the terms "assets belonging to," "Special Liabilities," "General
Assets" and "General Liabilities" have the meanings assigned to them in
said Article 7(b), (c) and (d).
IN WITNESS WHEREOF, the undersigned have executed these
Articles of Amendment on January 20, 1995.
/s/ David Lee
David Lee
/s/ Michael J. Radmer
Michael J. Radmer
FINAL
FIRST AMERICAN FUNDS, INC.
CERTIFICATE OF DESIGNATION
OF
SERIES B, CLASS FOUR SHARES
PURSUANT TO MINN. STAT. SS. 302A.401(3)(b)
The undersigned duly elected Secretary of First American Funds, Inc., a
Minnesota corporation (the "Fund"), hereby certifies that the following is a
true, complete and correct copy of resolutions duly adopted by a majority of the
directors of the Board of Directors of the Fund on December 7, 1994, and further
certifies that the Amended and Restated Articles referred to in such resolutions
were approved by the shareholders of the Fund on December 16, 1994, and have
been filed with the Secretary of State of the State of Minnesota.
APPROVAL OF CREATION AND DESIGNATION OF
SERIES B, CLASS FOUR SHARES
WHEREAS, shareholders of the Fund are being asked to approve Amended
and Restated Articles of Incorporation (the "Articles") to allow the Fund to
issue multiple classes of shares and to increase its authorized capital; and
WHEREAS, as amended the Articles provide, among other things, for the
issuance of up to 100,000,000,000 shares in the series of shares designated as
"Series B Common Shares" and designate 20,000,000,000 of such share as "Series
B, Class One Common Shares," 20,000,000,000 of such shares as "Series B, Class
Two Common Shares," and 20,000,000,000 of such shares as "Series B, Class Three
Common Shares;" and
WHEREAS, the amended Articles provided that the remaining authorized
Series B Common Shares may be issued in such classes and with such relative
rights and preferences as shall be stated or expressed in a resolution or
resolutions providing for the issue of any such class or classes as may be
adopted from time to time by the Board of Directors;
NOW, THEREFORE, BE IT RESOLVED, that 20,000,000,000 previously
undesignated Series B Common Shares are hereby designated as "Series B, Class
Four Common Shares."
FURTHER RESOLVED, that the Series B, Class Four Common Shares
designated by these resolutions shall have the relative rights and preferences
set forth in the amended Articles of the Fund. As provided in Article 5 of such
amended Articles, the Series B, Class Four Common Shares designated by these
resolutions may be subject to such charges and expenses (including by way of
example, but not by way of limitation, such front-end and deferred sales charges
as may be permitted under the Investment Company Act of 1940, as amended (the
"1940 Act") and rules of the National Association of Securities Dealers, Inc.,
expenses under Rule 12b-1 plans, administration plans, service plans, or other
plans or arrangements, however designated) adopted from time to time by the
Board of Directors of the Fund in accordance, to the extent applicable, with the
1940 Act, which charges and expenses may differ from those applicable to other
classes within such series, and all of the charges and expenses to which such
class is subject shall be borne by such class and shall be appropriately
reflected (in the manner determined by the Board of Directors) in determining
the net asset value and the amounts payable with respect to dividends and
distributions on, and redemptions or liquidations of, such class.
FURTHER RESOLVED, that unless and until the Board of Directors selects
a different name for the Series B, Class Four Common Shares pursuant to Article
5 of the amended Articles, the Series B, Class Four Common Shares shall be known
as the "Prime Obligations Fund, Class B" or "CDSC Class" shares.
IN WITNESS WHEREOF, the undersigned has signed this Certificate of
Designation on behalf of First American Funds, Inc. this 20th day of January,
1995.
/s/ Michael J. Radmer
Michael J. Radmer, Secretary
EXHIBIT (2)
As approved at Board of Directors Meeting on December 4, 1990; Amendment to
Section 1.01 approved at Board of Directors Meeting on 6/1/93; Amendments to
Article IV approved at Board of Directors Meeting on 9/7/93; Amendments to
Section 1.01 approved at Board of Directors Meeting on 12/7/94.
BYLAWS
OF
FIRST AMERICAN FUNDS, INC.
ARTICLE I.
OFFICES, CORPORATE SEAL
Section 1.01. Name. The name of the corporation is "FIRST AMERICAN
FUNDS, INC." The names of the series represented by the series of shares
designated in the corporation's articles of incorporation shall be as follows:
Series B, Class One: Prime Obligations Fund, "Class C" or
"Institutional Class."
Series B, Class Two: Prime Obligations Fund, "Class D" or
"Corporate Trust Class."
Series B, Class Three: Prime Obligations Fund, "Class A" or
"Retail Class."
Series B, Class Four: Prime Obligations Fund, "Class B" or
"CDSC Class."
Series C, Class One: Government Obligations Fund, "Class C" or
"Institutional Class."
Series C, Class Two: Government Obligations Fund, "Class D" or
"Corporate Trust Class."
Series C, Class Three: Government Obligations Fund, "Class A"
or "Retail Class."
Series D, Class One: Treasury Obligations Fund, "Class C" or
"Institutional Class."
Series D, Class Two: Treasury Obligations Fund, "Class D" or
"Corporate Trust Class."
Series D, Class Three: Treasury Obligations Fund, "Class A" or
"Retail Class."
Section 1.02. Registered Office. The registered office of the
corporation in Minnesota shall be that set forth in the Articles of
Incorporation or in the most recent amendment of the Articles of Incorporation
or resolution of the directors filed with the Secretary of State of Minnesota
changing the registered office.
Section 1.03. Other Offices. The corporation may have such other
offices, within or without the State of Minnesota, as the directors shall, from
time to time, determine.
Section 1.04. Corporate Seal. The corporate seal shall be circular in
form and shall have inscribed thereon the name of the corporation and the word
"Minnesota" and the words "Corporate Seal." The form of the seal shall be
subject to alteration by the Board of Directors, and the seal may be used by
causing it or a facsimile to be impressed or affixed or printed or otherwise
reproduced. Any officer or director of the corporation shall have authority to
affix the corporate seal of the corporation to any document requiring the same.
ARTICLE II.
MEETINGS OF SHAREHOLDERS
Section 2.01. Place and Time of Meeting. Except as provided otherwise
by Minnesota Statutes Chapter 302A, meetings of the shareholders may be held at
any place, within or without the State of Minnesota, designated by the directors
and, in the absence of such designation, shall be held at the registered office
of the corporation in the State of Minnesota. The directors shall designate the
time of day for each meeting and, in the absence of such designation, every
meeting of shareholders shall be held at ten o'clock a.m.
Section 2.02. Regular Meetings. Annual meetings of shareholders are not
required by these Bylaws. Regular meetings shall be held only with such
frequency and at such times and places as provided in and required by Minnesota
Statutes Section 302A.431.
Section 2.03. Special Meetings. Special meetings of the shareholders
may be held at any time and for any purpose and may be called by the Chairman of
the Board, the President, any two directors, or by one or more shareholders
holding ten percent (10%) or more of the shares entitled to vote on the matters
to be presented to the meeting.
Section 2.04. Quorum, Adjourned Meetings. The holders of ten percent
(10%) of the shares outstanding and entitled to vote shall constitute a quorum
for the transaction of business at any regular or special meeting. In case a
quorum shall not be present at a meeting, those present in person or by proxy
shall adjourn the meeting to such day as they shall, by majority vote, agree
upon without further notice other than by announcement at the meeting at which
such adjournment is taken. If a quorum is present, a meeting may be adjourned
from time to time without notice other than announcement at the meeting. At
adjourned meetings at which a quorum is present, any business may be transacted
which might have been transacted at the meeting as originally noticed. If a
quorum is present, the shareholders may continue to transact business until
adjournment notwithstanding the withdrawal of enough shareholders to leave less
than a quorum.
Section 2.05. Voting. At each meeting of the shareholders, every
shareholder having the right to vote shall be entitled to vote either in person
or by proxy. Each shareholder, unless the Articles of Incorporation provide
otherwise, shall have one vote for each share having voting power registered in
his name on the books of the corporation. Except as otherwise specifically
provided by these Bylaws or as required by provisions of the Investment Company
Act of 1940 or other applicable laws, all questions shall be decided by a
majority vote of the number of shares entitled to vote and represented at the
meeting at the time of the vote. If the matter(s) to be presented at a regular
or special meeting relates only to particular classes or series of the
corporation, then only the shareholders of such classes or series are entitled
to vote on such matter(s).
Section 2.06. Voting - Proxies. The right to vote by proxy shall exist
only if the instrument authorizing such proxy to act shall have been executed in
writing by the shareholder himself or by his attorney thereunto duly authorized
in writing. No proxy shall be voted after eleven months from its date unless it
provides for a longer period.
Section 2.07. Closing of Books. The Board of Directors may fix a time,
not exceeding sixty (60) days preceding the date of any meeting of shareholders,
as a record date for the determination of the shareholders entitled to notice
of, and to vote at, such meeting, notwithstanding any transfer of shares on the
books of the corporation after any record date so fixed. The Board of Directors
may close the books of the corporation against the transfer of shares during the
whole or any part of such period. If the Board of Directors fails to fix a
record date for determination of the shareholders entitled to notice of, and to
vote at, any meeting of shareholders, the record date shall be the thirtieth
(30th) day preceding the date of such meeting.
Section 2.08. Notice of Meetings. There shall be mailed to each
shareholder, shown by the books of the corporation to be a holder of record of
voting shares, at his address as shown by the books of the corporation, a notice
setting out the date, time and place of each regular meeting and each special
meeting, except where the meeting is an adjourned meeting and the date, time and
place of the meeting were announced at the time of adjournment, which notice
shall be mailed within the period required by law. Every notice of any special
meeting shall state the purpose or purposes for which the meeting has been
called, pursuant to Section 2.03, and the business transacted at all special
meetings shall be confined to the purpose stated in such notice.
Section 2.09. Waiver of Notice. Notice of any regular or special
meeting may be waived either before, at or after such meeting orally or in a
writing signed by each shareholder or representative thereof entitled to vote
the shares so represented. A shareholder by his attendance at any meeting of
shareholders, shall be deemed to have waived notice of such meeting, except
where the shareholder objects at the beginning of the meeting to the transaction
of business because the item may not lawfully be considered at that meeting and
does not participate at that meeting in the consideration of the item at that
meeting.
Section 2.10. Written Action. Any action which might be taken at a
meeting of the shareholders may be taken without a meeting if done in writing
and signed by all of the shareholders entitled to vote on that action. If the
action to be taken relates to particular classes or series of the corporation,
then only shareholders of such classes or series are entitled to vote on such
action.
ARTICLE III.
DIRECTORS
Section 3.01. Number, Qualification and Term of Office. Until the first
meeting of shareholders, the number of directors shall be the number named in
the Articles of Incorporation. Thereafter, the number of directors shall be
established by resolution of the shareholders (subject to the authority of the
Board of Directors to increase or decrease the number of directors as permitted
by law). In the absence of such shareholder resolution, the number of directors
shall be the number last fixed by the shareholders, the Board of Directors or
the Articles of Incorporation. Directors need not be shareholders. Each of the
directors shall hold office until the regular meeting of shareholders next held
after his election and until his successor shall have been elected and shall
qualify, or until the earlier death, resignation, removal or disqualification of
such director.
Section 3.02. Election of Directors. Except as otherwise provided in
Sections 3.11 and 3.12 hereof, the directors shall be elected at the regular
shareholders' meeting. In the event that directors are not elected at a regular
shareholders' meeting, then directors may be elected at a special shareholders'
meeting, provided that the notice of such meeting shall contain mention of such
purpose. At each shareholders' meeting for the election of directors, the
directors shall be elected by a plurality of the votes validly cast at such
election. Each holder of shares of each class or series of stock of the
corporation shall be entitled to vote for directors and shall have equal voting
power for each share of each class or series of the corporation.
Section 3.03. General Powers.
(a) Except as otherwise permitted by statute, the property, affairs and
business of the corporation shall be managed by the Board of Directors, which
may exercise all the powers of the corporation except those powers vested solely
in the shareholders of the corporation by statute, the Articles of Incorporation
or these Bylaws, as amended.
(b) All acts done by any meeting of the Directors or by any person
acting as a director, so long as his successor shall not have been duly elected
or appointed, shall, notwithstanding that it be afterwards discovered that there
was some defect in the election of the directors or such person acting as
aforesaid or that they or any of them were disqualified, be as valid as if the
directors or such other person, as the case may be, had been duly elected and
were or was qualified to be directors or a director of the corporation.
Section 3.04. Power to Declare Dividends.
(a) The Board of Directors, from time to time as they may deem
advisable, may declare and pay dividends in cash or other property of the
corporation, out of any source available for dividends, to the shareholders of
each class or series of stock of the corporation according to their respective
rights and interests in the investment portfolio of the corporation issuing such
class or series of stock.
(b) The Board of Directors shall cause to be accompanied by a written
statement any dividend payment wholly or partly from any source other than
(i) the accumulated and accrued undistributed net income of
each class or series (determined in accordance with generally accepted
accounting practice and the rules and regulations of the Securities and
Exchange Commission then in effect) and not including profits or losses
realized upon the sale of securities or other properties; or
(ii) the net income of each class or series so determined for
the current or preceding fiscal year.
Such statement shall adequately disclose the source or sources of such payment
and the basis of calculation and shall be in such form as the Securities and
Exchange Commission may prescribe.
(c) Notwithstanding the above provisions of this Section 3.04, the
Board of Directors may at any time declare and distribute pro rata among the
shareholders of each class or series of stock a "stock dividend" out of the
authorized but unissued shares of stock of each class or series, including any
shares previously purchased by a class or series of the corporation.
Section 3.05. Board Meetings. Meetings of the Board of Directors may be
held from time to time at such time and place within or without the State of
Minnesota as may be designated in the notice of such meeting.
Section 3.06. Calling Meetings, Notice. A director may call a board
meeting by giving ten (10) days notice to all directors of the date, time and
place of the meeting; provided that if the day or date, time and place of a
board meeting have been announced at a previous meeting of the board, no notice
is required.
Section 3.07. Waiver of Notice. Notice of any meeting of the Board of
Directors may be waived by any director either before, at or after such meeting
orally or in a writing signed by such director. A director, by his attendance
and participation in the action taken at any meeting of the Board of Directors,
shall be deemed to have waived notice of such meeting, except where the director
objects at the beginning of the meeting to the transaction of business because
the item may not lawfully be considered at that meeting and does not participate
at that meeting in the consideration of the item at that meeting.
Section 3.08. Quorum. A majority of the directors holding office
immediately prior to a meeting of the Board of Directors shall constitute a
quorum for the transaction of business at such meeting; provided however,
notwithstanding the above, if the Board of Directors is taking action pursuant
to the Investment Company Act of 1940, as now enacted or hereafter amended, a
majority of directors who are not "interested persons" (as defined by the
Investment Company Act of 1940, as now enacted or hereafter amended) of the
corporation shall constitute a quorum for taking such action.
Section 3.09. Advance Consent or Opposition. A director may give
advance written consent or opposition to a proposal to be acted on at a meeting
of the Board of Directors. If such director is not present at the meeting,
consent or opposition to a proposal does not constitute presence for purposes of
determining the existence of a quorum, but consent or opposition shall be
counted as a vote in favor of or against the proposal and shall be entered in
the minutes or other record of action at the meeting, if the proposal acted on
at the meeting is substantially the same or has substantially the same effect as
the proposal to which the director has consented or objected. This procedure
shall not be used to act on any investment advisory agreement or plan of
distribution adopted under Rule 12b-1 of the Investment Company Act of 1940, as
amended.
Section 3.10. Conference Communications. Any or all directors may
participate in any meeting of the Board of Directors, or of any duly constituted
committee thereof, by any means of communication through which the directors may
simultaneously hear each other during such meeting. For the purposes of
establishing a quorum and taking any action at the meeting, such directors
participating pursuant to this Section 3.11 shall be deemed present in person at
the meeting, and the place of the meeting shall be the place of origination of
the conference communication. This procedure shall not be used to act on any
investment advisory agreement or plan of distribution adopted under Rule 12b-1
of the Investment Company Act of 1940, as amended.
Section 3.11. Vacancies; Newly Created Directorships. Vacancies in the
Board of Directors of this corporation occurring by reason of death,
resignation, removal or disqualification shall be filled for the unexpired term
by a majority of the remaining directors of the Board although less than a
quorum; newly created directorships resulting from an increase in the authorized
number of directors by action of the Board of Directors as permitted by Section
3.01 may be filled by a two-thirds (2/3) vote of the directors serving at the
time of such increase; and each person so elected shall be a director until his
successor is elected by the shareholders at their next regular or special
meeting; provided, however, that no vacancy can be filled as provided above if
prohibited by the provisions of the Investment Company Act of 1940.
Section 3.12. Removal. The entire Board of Directors or an individual
director may be removed from office, with or without cause, by a vote of the
shareholders holding a majority of the shares entitled to vote at an election of
directors. In the event that the entire Board or any one or more directors be so
removed, new directors shall be elected at the same meeting, or the remaining
directors may, to the extent vacancies are not filled at such meeting, fill any
vacancy or vacancies created by such removal. A director named by the Board of
Directors to fill a vacancy may be removed from office at any time, with or
without cause, by the affirmative vote of the remaining directors if the
shareholders have not elected directors in the interim between the time of the
appointment to fill such vacancy and the time of the removal.
Section 3.13. Committees. A resolution approved by the affirmative vote
of a majority of the Board of Directors may establish committees having the
authority of the board in the management of the business of the corporation to
the extent provided in the resolution. A committee shall consist of one or more
persons, who need not be directors, appointed by affirmative vote of a majority
of the directors present. Committees are subject to the direction and control
of, and vacancies in the membership thereof shall be filled by, the Board of
Directors.
A majority of the members of the committee present at a meeting is a
quorum for the transaction of business, unless a larger or smaller proportion or
number is provided in a resolution approved by the affirmative vote of a
majority of the directors present.
Section 3.14. Written Action. Any action which might be taken at a
meeting of the Board of Directors, or any duly constituted committee thereof,
may be taken without a meeting if done in writing and signed by all of the
directors or committee members.
Section 3.15. Compensation. Directors shall receive such fixed sum per
meeting attended or such fixed annual sum as shall be determined, from time to
time, by resolution of the Board of Directors. All directors shall receive their
expenses, if any, of attendance at meetings of the Board of Directors or any
committee thereof. Nothing herein contained shall be construed to preclude any
director from serving this corporation in any other capacity and receiving
proper compensation therefor.
ARTICLE IV.
OFFICERS AND CHAIRMAN OF THE BOARD OF DIRECTORS
Section 4.01. Number. The officers of the corporation shall consist of
the President, one or more Vice Presidents (if desired by the Board), a
Secretary, a Treasurer and such other officers and agents as may, from time to
time, be elected by the Board of Directors. Any number of offices may be held by
the same person.
Section 4.02. Election, Term of Office and Qualifications. The Board of
Directors shall elect, from within or without their number, the officers
referred to in Section 4.01 of these Bylaws, each of whom shall have the powers,
rights, duties, responsibilities and terms in office provided for in these
Bylaws or a resolution of the Board not inconsistent therewith. The President
and all other officers who may be directors shall continue to hold office until
the election and qualification of their successors, notwithstanding an earlier
termination of their directorship.
Section 4.03. Resignation. Any officer (or the Chairman of the Board of
Directors) may resign his office at any time by delivering a written resignation
to the corporation. Unless otherwise specified therein, such resignation shall
take effect upon delivery.
Section 4.04. Removal and Vacancies. Any officer (or the Chairman of
the Board of Directors) may be removed from his office by a majority of the
Board of Directors with or without cause. Such removal, however, shall be
without prejudice to the contract rights of the person so removed. If there be a
vacancy among the officers (or the Chairman of the Board of Directors) of the
corporation by reason of death, resignation or otherwise, such vacancy shall be
filled for the unexpired term by the Board of Directors.
Section 4.05. Chairman of the Board. The Board of Directors may elect
one of its members as Chairman of the Board. The Chairman of the Board, if one
is elected, shall preside at all meetings of the shareholders and directors and
shall have such other duties as may be prescribed, from time to time, by the
Board of Directors. The Chairman of the Board of Directors will under no
circumstances be deemed to be an "officer" of the corporation, and an individual
serving as Chairman of the Board of Directors will not be deemed to be an
"affiliated person" with respect to the corporation (under the Investment
Company Act of 1940, as amended) solely by virtue of such person's position as
Chairman of the Board of Directors of the corporation.
Section 4.06. President. The President shall have general active
management of the business of the corporation. In the absence of the Chairman of
the Board, he shall preside at all meetings of the shareholders and directors.
He shall be the chief executive officer of the corporation and shall see that
all orders and resolutions of the Board of Directors are carried into effect. He
shall be ex officio a member of all standing committees. He may execute and
deliver, in the name of the corporation, any deeds, mortgages, bonds, contracts
or other instruments pertaining to the business of the corporation and, in
general, shall perform all duties usually incident to the office of the
President. He shall have such other duties as may, from time to time, be
prescribed by the Board of Directors.
Section 4.07. Vice President. Each Vice President shall have such
powers and shall perform such duties as may be specified in the Bylaws or
prescribed by the Board of Directors or by the President. In the event of
absence or disability of the President, Vice Presidents shall succeed to his
power and duties in the order designated by the Board of Directors.
Section 4.08. Secretary. The Secretary shall be secretary of, and shall
attend, all meetings of the shareholders and Board of Directors and shall record
all proceedings of such meetings in the minute book of the corporation. He shall
give proper notice of meetings of shareholders and directors. He shall keep the
seal of the corporation and shall affix the same to any instrument requiring it
and may, when necessary, attest the seal by his signature. He shall perform such
other duties as may, from time to time, be prescribed by the Board of Directors
or by the President.
Section 4.09. Treasurer. The Treasurer shall be the chief financial
officer and shall keep accurate accounts of all money of the corporation
received or disbursed. He shall deposit all moneys, drafts and checks in the
name of, and to the credit of, the corporation in such banks and depositories as
a majority of the Board of Directors shall, from time to time, designate. He
shall have power to endorse, for deposit, all notes, checks and drafts received
by the corporation. He shall disburse the funds of the corporation, as ordered
by the Board of Directors, making proper vouchers therefor. He shall render to
the President and the directors, whenever required, an account of all his
transactions as Treasurer and of the financial condition of the corporation, and
shall perform such other duties as may, from time to time, be prescribed by the
Board of Directors or by the President.
Section 4.10. Assistant Secretaries. At the request of the Secretary,
or in his absence or disability, any Assistant Secretary shall have power to
perform all the duties of the Secretary, and, when so acting, shall have all the
powers of, and be subject to all restrictions upon, the Secretary. The Assistant
Secretaries shall perform such other duties as from time to time may be assigned
to them by the Board of Directors or the President.
Section 4.11. Assistant Treasurers. At the request of the Treasurer, or
in his absence or disability, any Assistant Treasurer shall have power to
perform all the duties of the Treasurer, and when so acting, shall have all the
powers of, and be subject to all the restrictions upon, the Treasurer. The
Assistant Treasurers shall perform such other duties as from time to time may be
assigned to them by the Board of Directors or the President.
Section 4.12. Compensation. The officers (and the Chairman of the Board
of Directors) of this corporation shall receive such compensation for their
services as may be determined, from time to time, by resolution of the Board of
Directors.
Section 4.13. Surety Bonds. The Board of Directors may require any
officer or agent of the corporation to execute a bond (including, without
limitation, any bond required by the Investment Company Act of 1940 and the
rules and regulations of the Securities and Exchange Commission) to the
corporation in such sum and with such surety or sureties as the Board of
Directors may determine, conditioned upon the faithful performance of his duties
to the corporation, including responsibility for negligence and for the
accounting of any of the corporation's property, funds or securities that may
come into his hands. In any such case, a new bond of like character shall be
given at least every six years, so that the dates of the new bond shall not be
more than six years subsequent to the date of the bond immediately preceding.
ARTICLE V.
SHARES AND THEIR TRANSFER AND REDEMPTION
Section 5.01. Certificate for Shares.
(a) The corporation may have certificated or uncertificated shares, or
both, as designated by resolution of the Board of Directors. Every owner of
certificated shares of the corporation shall be entitled to a certificate, to be
in such form as shall be prescribed by the Board of Directors, certifying the
number of shares of the corporation owned by him. Within a reasonable time after
the issuance or transfer of uncertificated shares, the corporation shall send to
the new shareholder the information required to be stated on certificates.
Certificated shares shall be numbered in the order in which they shall be issued
and shall be signed, in the name of the corporation, by the President or a Vice
President and by the Secretary or an Assistant Secretary or by such officers as
the Board of Directors may designate. Such signatures may be by facsimile if
authorized by the Board of Directors. Every certificate surrendered to the
corporation for exchange or transfer shall be cancelled, and no new certificate
or certificates shall be issued in exchange for any existing certificate until
such existing certificate shall have been so cancelled, except in cases provided
for in Section 5.08.
(b) In case any officer, transfer agent or registrar who shall have
signed any such certificate, or whose facsimile signature has been placed
thereon, shall cease to be such an officer (because of death, resignation or
otherwise) before such certificate is issued, such certificate may be issued and
delivered by the corporation with the same effect as if he were such officer,
transfer agent or registrar at the date of issue.
Section 5.02. Issuance of Shares. The Board of Directors is authorized
to cause to be issued shares of the corporation up to the full amount authorized
by the Articles of Incorporation in such classes or series and in such amounts
as may be determined by the Board of Directors and as may be permitted by law.
No shares shall be allotted except in consideration of cash or other property,
tangible or intangible, received or to be received by the corporation under a
written agreement, of services rendered or to be rendered to the corporation
under a written agreement, or of an amount transferred from surplus to stated
capital upon a share dividend. At the time of such allotment of shares, the
Board of Directors making such allotments shall state, by resolution, their
determination of the fair value to the corporation in monetary terms of any
consideration other than cash for which shares are alloted. No shares of stock
issued by the corporation shall be issued, sold or exchanged by or on behalf of
the corporation for any amount less than the net asset value per share of the
shares outstanding as determined pursuant to Article X hereunder.
Section 5.03. Redemption of Shares. Upon the demand of any shareholder,
this corporation shall redeem any share of stock issued by it held and owned by
such shareholder at the net asset value thereof as determined pursuant to
Article X hereunder. The Board of Directors may suspend the right of redemption
or postpone the date of payment during any period when: (a) trading on the New
York Stock Exchange is restricted or such Exchange is closed for other than
weekends or holidays; (b) the Securities and Exchange Commission has by order
permitted such suspension; or (c) an emergency as defined by rules of the
Securities and Exchange Commission exists, making disposal of portfolio
securities or valuation of net assets of the corporation not reasonably
practicable.
If following a redemption request by any shareholder of this
corporation, the value of such shareholder's interest in the corporation falls
below the required minimum investment, as may be set from time to time by the
Board of Directors, the corporation's officers are authorized, in their
discretion and on behalf of the corporation, to redeem such shareholder's entire
interest and remit such amount, provided that such a redemption will only be
effected by the corporation following: (a) a redemption by a shareholder, which
causes the value of such shareholder's interest in the corporation to fall below
the required minimum investment; (b) the mailing by the corporation to such
shareholder of a "notice of intention to redeem"; and (c) the passage of at
least sixty (60) days from the date of such mailing, during which time the
shareholder will have the opportunity to make an additional investment in the
corporation to increase the value of such shareholder's account to at least the
required minimum investment.
Section 5.04. Transfer of Shares. Transfer of shares on the books of
the corporation may be authorized only by the shareholder named in the
certificate, or the shareholder's legal representative, or the shareholder's
duly authorized attorney-in-fact, and upon surrender of the certificate or the
certificates for such shares or a duly executed assignment covering shares held
in unissued form. The corporation may treat, as the absolute owner of shares of
the corporation, the person or persons in whose name shares are registered on
the books of the corporation.
Section 5.05. Registered Shareholders. The corporation shall be
entitled to treat the holder of record of any share or shares of stock as the
holder in fact thereof and accordingly shall not be bound to recognize any
equitable or other claim to or interest in such share on the part of any other
person, whether or not it shall have express or other notice thereof, except as
otherwise expressly provided by the laws of Minnesota.
Section 5.06. Transfer of Agents and Registrars. The Board of Directors
may from time to time appoint or remove transfer agents and/or registrars of
transfers of shares of stock of the corporation, and it may appoint the same
person as both transfer agent and registrar. Upon any such appointment being
made all certificates representing shares of capital stock thereafter issued
shall be countersigned by one of such transfer agents or by one of such
registrars of transfers or by both and shall not be valid unless so
countersigned. If the same person shall be both transfer agent and registrar,
only one countersignature by such person shall be required.
Section 5.07. Transfer Regulations. The shares of stock of the
corporation may be freely transferred, and the Board of Directors may from time
to time adopt rules and regulations with reference to the method of transfer of
shares of stock of the corporation.
Section 5.08. Lost, Stolen, Destroyed and Mutilated Certificates. The
holder of any stock of the corporation shall immediately notify the corporation
of any loss, theft, destruction or mutilation of any certificate therefor, and
the Board of Directors may, in its discretion, cause to be issued to him a new
certificate or certificates of stock, upon the surrender of the mutilated
certificate or in case of loss, theft or destruction of the certificate upon
satisfactory proof of such loss, theft or destruction. A new certificate or
certificates of stock will be issued to the owner of the lost, stolen or
destroyed certificate only after such owner, or his legal representatives, gives
to the corporation and to such registrar or transfer agent as may be authorized
or required to countersign such new certificate or certificates a bond, in such
sum as they may direct, and with such surety or sureties, as they may direct, as
indemnity against any claim that may be made against them or any of them on
account of or in connection with the alleged loss, theft or destruction of any
such certificate.
ARTICLE VI.
DIVIDENDS
Section 6.01. The net investment income of each class or series of the
corporation will be determined, and its dividends shall be declared and made
payable at such time(s) as the Board of Directors shall determine; dividends
shall be payable to shareholders of record as of the date of declaration.
It shall be the policy of each class or series of the corporation to
qualify for and elect the tax treatment applicable to regulated investment
companies under the Internal Revenue Code, so that such class or series will not
be subjected to federal income tax on such part of its income or capital gains
as it distributes to shareholders.
ARTICLE VII.
BOOKS AND RECORDS, AUDIT, FISCAL YEAR
Section 7.01. Share Register. The Board of Directors of the corporation
shall cause to be kept at its principal executive office, or at another place or
places within the United States determined by the board:
(1) a share register not more than one year old, containing the
names and addresses of the shareholders and the number and
classes or series of shares held by each shareholder; and
(2) a record of the dates on which certificates or transaction
statements representing shares were issued.
Section 7.02. Other Books and Records. The Board of Directors shall
cause to be kept at its principal executive office, or, if its principal
executive office is not in Minnesota, shall make available at its registered
office within ten days after receipt by an officer of the corporation of a
written demand for them made by a shareholder or other person authorized by
Minnesota Statutes Section 302A.461, originals or copies of:
(1) records of all proceedings of shareholders for the last three
years;
(2) records of all proceedings of the Board of Directors for the
last three years;
(3) its articles and all amendments currently in effect;
(4) its bylaws and all amendments currently in effect;
(5) financial statements required by Minnesota Statutes Section
302A.463 and the financial statement for the most recent
interim period prepared in the course of the operation of the
corporation for distribution to the shareholders or to a
governmental agency as a matter of public record;
(6) reports made to shareholders generally within the last three
years;
(7) a statement of the names and usual business addresses of its
directors and principal officers;
(8) any shareholder voting or control agreements of which the
corporation is aware; and
(9) such other records and books of account as shall be necessary
and appropriate to the conduct of the corporate business.
Section 7.03. Audit; Accountant.
(a) The Board of Directors shall cause the records and books of account
of the corporation to be audited at least once in each fiscal year and at such
other times as it may deem necessary or appropriate.
(b) The corporation shall employ an independent public accountant or
firm of independent public accountants as its Accountant to examine the accounts
of the corporation and to sign and certify financial statements filed by the
corporation. The Accountant's certificates and reports shall be addressed both
to the Board of Directors and to the shareholders.
(c) A majority of the members of the Board of Directors shall select
the Accountant annually at a meeting held within thirty (30) days before or
after the beginning of the fiscal year of the corporation or before the regular
shareholders' meeting in that year. Such selection shall be submitted for
ratification or rejection at the next succeeding regular shareholders' meeting.
If such meeting shall reject such selection, the Accountant shall be selected by
majority vote, either at the meeting at which the rejection occurred or at a
subsequent meeting of shareholders called for the purpose.
(d) Any vacancy occurring between annual meetings, due to the death,
resignation or otherwise of the Accountant, may be filled by the Board of
Directors.
Section 7.04. Fiscal Year. The fiscal year of the corporation shall be
determined by the Board of Directors.
ARTICLE VIII.
INDEMNIFICATION OF CERTAIN PERSONS
Section 8.01. The corporation shall indemnify such persons, for such
expenses and liabilities, in such manner, under such circumstances, and to such
extent as permitted by Section 302A.521 of the Minnesota Statutes, as now
enacted or hereafter amended, provided, however, that no such indemnification
may be made if it would be in violation of Section 17(h) of the Investment
Company Act of 1940, as now enacted or hereinafter amended.
ARTICLE IX.
VOTING OF STOCK HELD
Section 9.01. Unless otherwise provided by resolution of the Board of
Directors, the President, any Vice President, the Secretary or the Treasurer,
may from time to time appoint an attorney or attorneys or agent or agents of the
corporation, in the name and on behalf of the corporation, to cast the votes
which the corporation may be entitled to cast as a stockholder or otherwise in
any other corporation or association, any of whose stock or securities may be
held by the corporation, at meetings of the holders of the stock or other
securities of any such other corporation or association, or to consent in
writing to any action by any such other corporation or association, and may
instruct the person or persons so appointed as to the manner of casting such
votes or giving such consent, and may execute or cause to be executed on behalf
of the corporation and under its corporate seal, or otherwise, such written
proxies, consents, waivers or other instruments as it may deem necessary or
proper; or any of such officers may themselves attend any meeting of the holders
of stock or other securities of any such corporation or association and thereat
vote or exercise any or all other rights of the corporation as the holder of
such stock or other securities of such other corporation or association, or
consent in writing to any action by any such other corporation or association.
ARTICLE X.
VALUATION OF NET ASSET VALUE
10.01. The net asset value per share of each class or series of stock
of the corporation shall be determined in good faith by or under supervision of
the officers of the corporation as authorized by the Board of Directors as often
and on such days and at such time(s) as the Board of Directors shall determine,
or as otherwise may be required by law, rule, regulation or order of the
Securities and Exchange Commission.
ARTICLE XI.
CUSTODY OF ASSETS
Section 11.01. All securities and cash owned by this corporation shall,
as hereinafter provided, be held by or deposited with a bank or trust company
having (according to its last published report) not less than Two Million
Dollars ($2,000,000) aggregate capital, surplus and undivided profits (the
"Custodian").
This corporation shall enter into a written contract with the custodian
regarding the powers, duties and compensation of the Custodian with respect to
the cash and securities of this corporation held by the Custodian. Said contract
and all amendments thereto shall be approved by the Board of Directors of this
corporation. In the event of the Custodian's resignation or termination, the
corporation shall use its best efforts promptly to obtain a successor Custodian
and shall require that the cash and securities owned by this corporation held by
the Custodian be delivered directly to such successor Custodian.
ARTICLE XII.
AMENDMENTS
Section 12.01. These Bylaws may be amended or altered by a vote of the
majority of the Board of Directors at any meeting provided that notice of such
proposed amendment shall have been given in the notice given to the directors of
such meeting. Such authority in the Board of Directors is subject to the power
of the shareholders to change or repeal such bylaws by a majority vote of the
shareholders present or represented at any regular or special meeting of
shareholders called for such purpose, and the Board of Directors shall not make
or alter any Bylaws fixing a quorum for meetings of shareholders, prescribing
procedures for removing directors or filling vacancies in the Board of
Directors, or fixing the number of directors or their classifications,
qualifications or terms of office, except that the Board of Directors may adopt
or amend any Bylaw to increase or decrease their number.
ARTICLE XIII.
MISCELLANEOUS
Section 13.01. Interpretation. When the context in which words are used
in these Bylaws indicates that such is the intent, singular words will include
the plural and vice versa, and masculine words will include the feminine and
neuter genders and vice versa.
Section 13.02. Article and Section Titles. The titles of Sections and
Articles in these Bylaws are for descriptive purposes only and will not control
or alter the meaning of any of these Bylaws as set forth in the text.
EXHIBIT (5)
FIRST AMERICAN FUNDS, INC.
INVESTMENT ADVISORY AGREEMENT
This Agreement, made this 20th day of January, 1995, by and between
First American Funds, Inc., a Minnesota corporation (the "Fund"), on behalf of
each portfolio represented by a series of shares of common stock of the Fund
that adopts this Agreement (the "Portfolios") (the Portfolios, together with the
date each Portfolio adopts this Agreement, are set forth in Exhibit A hereto,
which shall be updated from time to time to reflect additions, deletions or
other changes thereto), and First Bank National Association, a national banking
association organized and existing under the laws of the United States of
America (the "Adviser").
1. The Fund on behalf of the Portfolios hereby retains the Adviser, and
the Adviser hereby agrees to act, as investment adviser for, and to manage the
investment of the assets of, the Portfolios as set forth herein and as further
requested by the Board of Directors of the Fund. In acting hereunder the Adviser
shall be an independent contractor and, unless otherwise expressly provided or
authorized hereunder or by the Board of Directors of the Fund, shall have no
authority to act for or represent the Fund or any Portfolio in any way or
otherwise be an agent of the Fund or any Portfolio.
2. The Adviser, at its own expense, shall provide the Fund with all
necessary office space, personnel and facilities necessary and incident to the
performance of the Adviser's services hereunder. The Adviser shall pay or be
responsible for the payment of all compensation to personnel of the Fund and the
officers and directors of the Fund who are affiliated with the Adviser or any
entity which controls, is controlled by or is under common control with the
Adviser.
3. The Adviser shall be responsible only for those expenses expressly
stated in paragraph 2 to be the responsibility of the Adviser and shall not be
responsible for any other expenses of the Fund or any Portfolio including, as
illustrative and without limitation, fees and charges of any custodian
(including charges as custodian and for keeping books and records and similar
services to the Fund and the Portfolios); fees and expenses of directors, other
than directors described in paragraph 2; fees and expenses of independent
auditors, legal counsel, transfer agents, dividend disbursing agents, and
registrars; costs of and incident to issuance, redemption and transfer of its
shares, and distributions to shareholders (including dividend payments and
reinvestment of dividends); brokers' commissions; interest charges; taxes and
corporate fees payable to any government or governmental body or agency
(including those incurred on account of the registration or qualification of
securities issued by the Fund); dues and other expenses incident to the Fund's
membership in the Investment Company Institute and other like associations;
costs of stock certificates, shareholder meetings, corporate reports, and
reports and notices to shareholders; and costs of printing, stationery and
bookkeeping forms. The Adviser shall be reimbursed by the Fund or the applicable
Portfolios on or before the fifteenth day of each calendar month for all
expenses paid or incurred during the preceding calendar month by the Adviser for
or on behalf of, or at the request or direction of, the Fund or the applicable
Portfolios which are not the responsibility of the Adviser hereunder.
4. The Adviser may utilize the Fund's distributor or an affiliate of
the Adviser as a broker, including as a principal broker, provided that the
brokerage transactions and procedures are in accordance with Rule 17e-1 under
the Investment Company Act of 1940, as amended (the "Act"), and the then
effective Registration Statement of the Fund under the Securities Act of 1933,
as amended. All allocation of portfolio transactions shall be subject to such
policies and supervision as the Fund's Board of Directors or any committee
thereof deem appropriate and any brokerage policy set forth in the then current
Registration Statement of the Fund.
5. The Adviser shall see that there are rendered to the Board of
Directors of the Fund such periodic and special reports as the Board of
Directors may reasonably request, including any reports in respect to placement
of security transactions for the Portfolios.
6. If, in any fiscal year of a Portfolio, the sum of such Portfolio's
expenses (including deferred organizational expenses and investment advisory
fees, but excluding taxes, interest, brokerage fees, payments made to the
distributor which are deemed to be made pursuant to Rule 12b-1 under the Act
and, where permitted, extraordinary expenses) exceeds the expense limitations
applicable to such Portfolio imposed by state securities administrators, as such
limitations may be lowered or raised from time to time, the Adviser shall
reimburse such Portfolio in the amount of such excess; provided, however, that
such payment or refund shall be made only out of the advisory fees paid by the
Portfolio to the Adviser during the fiscal year the payment or refund becomes
due and shall not exceed such advisory fees unless payment of such excess is
required by any applicable state securities administrator and the Adviser agrees
to be bound by any such requirement.
7. For the services provided and the expenses assumed by the Adviser
pursuant to this Agreement, each Portfolio will pay to the Adviser as full
compensation therefor a fee based on the fee schedule set forth in Exhibit A
hereto. This fee will be computed based on net assets at the beginning of each
day and will be paid to the Adviser monthly on or before the fifteenth day of
the month next succeeding the month for which the fee is paid. The fee shall be
prorated for any fraction of a fiscal year at the commencement and termination
of this Agreement. Anything to the contrary notwithstanding, the Adviser may at
any time and from time to time waive any part or all of any fee payable to it
pursuant to this Agreement.
8. Services of the Adviser herein provided are not to be deemed
exclusive, and the Adviser shall be free to render similar services or other
services to others so long as its services hereunder shall not be impaired
thereby.
The Adviser agrees to indemnify the Fund and each Portfolio with
respect to any loss, liability, judgment, cost or penalty which the Fund or any
Portfolio may directly or indirectly suffer or incur in any way arising out of
or in connection with any breach of this Agreement by the Adviser.
The Adviser shall be liable to the Fund and its shareholders or former
shareholders for any negligence or willful misconduct on the part of the Adviser
or any of its directors, officers, employees, representatives or agents in
connection with the responsibilities assumed by it hereunder, provided, however,
that the Adviser shall not be liable for any investments made by the Adviser in
accordance with the explicit or implicit direction of the Board of Directors of
the Fund or the investment objectives and policies of the Fund as set forth in
the then current Registration Statement of the Fund, and provided further that
any liability of the Adviser resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services shall be limited to the
period and amount set forth in Section 36(b)(3) of the Act.
9. It is understood that the officers, directors, agents and
shareholders of the Fund are or may be interested in the Adviser or the
distributor of the Fund as officers, directors, agents or shareholders and that
the officers, directors, shareholders and agents of the Adviser may be
interested in the Fund otherwise than as shareholders.
10. The effective date of this Agreement with respect to each Portfolio
shall be the date set forth on Exhibit A hereto, which date shall not precede
the date that this Agreement is approved by the vote of the holders of at least
a majority of the outstanding shares of such Portfolio and the vote of the Board
of Directors of the Fund, including the vote of a majority of the directors who
are not parties to this Agreement or "interested persons" (as defined in the
Act) of the Adviser or of the Fund, cast in person at a meeting called for the
purpose of voting on such approval.
Unless sooner terminated as hereinafter provided, this Agreement shall
continue in effect with respect to each Portfolio for a period of more than two
years from the date of its execution but only as long as such continuance is
specifically approved at least annually by (a) the Board of Directors of the
Fund or by the vote of a majority of the outstanding shares of the applicable
Portfolio and (b) the vote of a majority of the directors, who are not parties
to this Agreement or "interested persons" (as defined in the Act) of the Adviser
or of the Fund, cast in person at a meeting called for the purpose of voting on
such approval.
11. This Agreement may be terminated with respect to any Portfolio at
any time, without the payment of any penalty, by the Board of Directors of the
Fund or by the vote of a majority of the outstanding shares of such Portfolio,
or by the Adviser, upon 60 days' written notice to the other party.
This Agreement shall automatically terminate in the event of its
"assignment" (as defined in the Act), provided, however, that such automatic
termination shall be prevented in a particular case by an order of exemption
from the Securities and Exchange Commission or a no-action letter of the staff
of the Commission to the effect that such assignment does not require
termination as a statutory or regulatory matter.
12. This Agreement may be modified by mutual consent, such consent as
to any Portfolio only to be authorized by a majority of the directors who are
not parties to this Agreement or "interested persons" (as defined in the Act) of
the Adviser or of the Fund and the vote of a majority of the outstanding shares
of such Portfolio.
13. Wherever referred to in this Agreement, the vote or approval of the
holders of a majority of the outstanding shares of a Portfolio shall mean the
lesser of (a) the vote of 67% or more of the shares of such Portfolio
represented at a meeting where more than 50% of the outstanding shares are
present in person or by proxy, or (b) the vote of more than 50% of the
outstanding shares of such Portfolio.
14. If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder shall not be thereby
affected.
15. Any notice under this Agreement shall be in writing, addressed,
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate in writing for receipt of such notice.
16. The internal law, and not the law of conflicts, of the State of
Minnesota will govern all questions concerning the construction, validity and
interpretation of this Agreement and the performance of the obligations imposed
by this Agreement.
17. This Agreement, including its exhibits, constitutes the entire
agreement between the parties concerning its subject matter and supersedes all
prior and contemporaneous agreements, representations and understandings of the
parties.
IN WITNESS WHEREOF, the Fund and the Adviser have caused this Agreement
to be executed by their duly authorized officers as of the day and year first
above written.
FIRST AMERICAN FUNDS, INC.
By /s/ Kathryn L. Stanton
Its Vice President
FIRST BANK NATIONAL ASSOCIATION
By /s/ Richard W. Jensen
Its Senior Vice President
FIRST AMERICAN FUNDS, INC.
EXHIBIT A
TO
INVESTMENT ADVISORY AGREEMENT
EFFECTIVE DATES:
Portfolio Effective Date
Prime Obligations Fund January 20, 1995
Government Obligations Fund January 20, 1995
Treasury Obligations Fund January 20, 1995
ADVISORY FEES: Annual Advisory Fee
as a Percentage of
Portfolio Average Daily Net Assets
Prime Obligations Fund 0.40%
Government Obligations Fund 0.40%
Treasury Obligations Fund 0.40%
EXHIBIT (6)(a)
FIRST AMERICAN FUNDS, INC.
DISTRIBUTION AND SERVICE AGREEMENT
FOR
CLASS B SHARES (CONTINGENT DEFERRED SALES CHARGE CLASSES)
THIS AGREEMENT is made as of the 20th day of January, 1995, between
FIRST AMERICAN FUNDS, INC., a Minnesota corporation (the "Fund"), and SEI
Financial Services Company (the "Distributor"), a Pennsylvania corporation.
WHEREAS, the Fund is registered as an investment company with the
Securities and Exchange Commission ("SEC") under the Investment Company Act of
1940, as amended ("1940 Act"), and its shares are registered with the SEC under
the Securities Act of 1933, as amended ("1933 Act"); and
WHEREAS, the Distributor is registered as a broker-dealer with the SEC
under the Securities Exchange Act of 1934, as amended;
WHEREAS, the Fund desires to appoint the Distributor to act as
distributor and shareholder servicing agent for the Class B shares of the Fund's
portfolios, as now in existence or hereinafter created from time to time
(collectively, the "Shares"), in accordance with the terms and conditions of
this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the Fund and Distributor hereby agree as follows:
ARTICLE 1. Distribution Activities.
A. Sale of Shares. The Fund grants to the Distributor the exclusive
right to sell Shares of each portfolio of the Fund (each a "Portfolio"), at net
asset value in accordance with the current prospectus for the Shares, as agent
and on behalf of the Fund, during the term of this Agreement and subject to the
registration requirements of the 1933 Act, the rules and regulations of the SEC
and the laws governing the sale of securities in the various states ("Blue Sky
Laws").
B. Solicitation of Sales. In consideration of these rights granted to
the Distributor, the Distributor agrees to use all reasonable efforts,
consistent with its other business, in connection with the distribution of
Shares; provided, however, that the Distributor shall not be prevented from
entering into like arrangements with other issuers. The provisions of this
paragraph do not obligate the Distributor to register as a broker or dealer
under the Blue Sky Laws of any jurisdiction when it determines it would be
uneconomical for it to do so or to maintain its registration in any jurisdiction
in which it is now registered or obligate the Distributor to sell any particular
number of Shares.
C. Authorized Representations. The Distributor is not authorized by the
Fund to give any information or to make any representations other than those
contained in the current registration statements and prospectuses of the Fund
with respect to the Shares filed with the SEC or contained in Shareholder
reports or other material that may be prepared by or on behalf of the Fund for
the Distributor's use. The Distributor may prepare and distribute sales
literature and other material as it may deem appropriate, provided that such
literature and materials have been approved by the Fund prior to their use.
D. Registration of Shares. The Fund agrees that it will take all action
necessary to register Shares under the federal and state securities laws so that
there will be available for sale the number of Shares the Distributor may
reasonably be expected to sell and to pay all fees associated with said
registration. The Fund shall make available to the Distributor such number of
copies of its currently effective prospectus and statement of additional
information as the Distributor may reasonably request. The Fund shall furnish to
the Distributor copies of all information, financial statements and other papers
which the Distributor may reasonably request for use in connection with the
distribution of Shares of the Fund.
ARTICLE 2. Shareholder Servicing Activities.
A. Appointment. The Fund hereby appoints the Distributor as servicing
agent for the Shares of each Portfolio, as agent and on behalf of the Fund in
accordance with and during the term of this Agreement, and the Distributor
hereby accepts such appointment.
B. Shareholder Servicing Activities. As servicing agent for the Shares
of each Portfolio, and in consideration of the compensation payable pursuant to
Article 4 hereof, the Distributor shall provide personal, continuing services to
investors in the Shares of each Portfolio, including but not limited to
providing ongoing servicing and/or maintenance of shareholder accounts with
respect to the Shares of the Portfolios, responding to inquiries of the holders
of Shares regarding their ownership of Shares or their accounts with the Fund,
and providing administrative or accounting services with respect to the Shares
of the Portfolios not otherwise provided by other agents of the Fund.
Notwithstanding the foregoing, if the National Association of Securities
Dealers, Inc. ("NASD") adopts a definition of "service fee" for purposes of
Section 26(d) of the NASD Rules of Fair Practice that differs from the
definition of shareholder servicing activities in this paragraph, or if the NASD
adopts a related definition intended to define the same concept, the definition
of shareholder servicing activities in this paragraph shall be automatically
amended, without further action of the parties, to conform to such NASD
definition.
ARTICLE 3. Compensation for Distribution Activities. (a) As
compensation for providing distribution services pursuant to Article 1 hereof,
the Distributor shall receive:
(1) In respect of the Shares of each Portfolio, pursuant to the Fund's
Plan of Distribution with respect to Class B Shares adopted by each such class
in accordance with Rule 12b-1 under the 1940 Act (the "Distribution Plan"), a
fee in connection with distribution-related services provided in respect of such
class, calculated and payable monthly as soon as practicable after the end of
the calendar month within which such fee accrues, but in any event prior to the
tenth day following the end of such calendar month, at the annual rate of .75%
of the value of the average daily net assets of such class.
(2) All contingent deferred sales charges applied on redemptions of
Shares of such Portfolio, payable at such time as the redemption proceeds in
respect of the redemption giving rise to the contingent deferred sales charge is
paid to the redeeming shareholder; provided that whether and at what rate a
contingent deferred sales charge will be imposed with respect to a redemption
shall be determined in accordance with, and in the manner set forth in, the
Registration Statement registering the Shares then in effect with the SEC.
(b) Amounts payable to the Distributor under the Distribution Plan may
exceed or be less than the Distributor's actual costs incurred in connection
with the distribution of the Shares of each such class, as described in Article
5 below. In the event such Distribution Expenses (as defined in Article 5)
exceed amounts payable to the Distributor under the Distribution Plan, the
Distributor shall not be entitled to reimbursement by the Fund.
(c) The Distributor may reallow any or all of the distribution fees and
contingent deferred sales charges which it is paid under this Agreement to such
dealers as the Distributor may from time to time determine.
(d) The Distributor may transfer its right to the payments described in
this Article 3 to third persons who provide funding to the Distributor, provided
that any such transfer shall not be deemed a transfer of the Distributor's
obligations under this Agreement. Upon receipt of direction from the Distributor
to pay such fees to a transferee, the Fund shall make payment in accordance with
such direction.
ARTICLE 4. Compensation for Shareholder Service Activities.
(a) As compensation for providing shareholder services pursuant to
Article 2 hereof, the Distributor shall receive in respect of the Shares of each
Portfolio, pursuant to the Fund's Service Plan with respect to Class B Shares
adopted by each such class in accordance with the Distributor's multi-class
exemptive order (the "Service Plan"), a fee in connection with shareholder
services provided in respect of such class, calculated and payable monthly, at
the annual rate of .25% of the value of the average daily net assets of such
class.
(b) Amounts payable to the Distributor under the Service Plan may
exceed or be less than the Distributor's actual costs incurred in connection
with the provision of shareholder services for the Shares, as described in
Article 5 below. In the event such Shareholder Servicing Expenses (as defined in
Article 5) exceed amounts payable to the Distributor under the Service Plan, the
Distributor shall not be entitled to reimbursement by the Fund.
(c) The Distributor may reallow all or any part of, or pay compensation
from, the amounts payable to the Distributor under the Service Plan to such
persons, including employees of the Distributor, and institutions who respond to
inquiries of holders of the Shares of the Portfolios or provide other
administrative or accounting services for the Shares, as the Distributor may
from time to time determine.
ARTICLE 5. Expenses. During the period of this Agreement, the Fund
shall pay or cause to be paid all expenses, costs and fees incurred by the Fund
which are not assumed by the Distributor. The Distributor shall pay all of its
own costs incurred in connection with the distribution of the Shares of each
Portfolio pursuant to Article 1 hereof ("Distribution Expenses"). The
Distributor shall also pay all of its own costs incurred in connection with
providing the personal, continuing services to shareholders of the Shares of
each Portfolio pursuant to Article 3 hereof ("Shareholder Servicing Expenses").
Distribution Expenses include, but are not limited to, the following expenses
incurred by the Distributor: initial and ongoing sales compensation (in addition
to sales loads) paid to investment executives of the Distributor and to other
broker-dealers and participating financial institutions which the Distributor
has agreed to pay; expenses incurred in the printing of prospectuses, statements
of additional information and reports used for sales purposes; expenses of
preparation and distribution of sales literature; expenses of advertising of any
type; an allocation of the Distributor's overhead; payments to and expenses of
persons who provide support services in connection with the distribution of Fund
shares; and other distribution-related expenses. Shareholder Servicing Expenses
include all expenses of the Distributor incurred in connection with providing
administrative or accounting services to shareholders of the Shares of each
Portfolio, including, but not limited to, an allocation of the Distributor's
overhead and payments made to persons, including employees of the Distributor,
who respond to inquiries of shareholders regarding their ownership of Shares, or
who provide other administrative or accounting services for the Shares class not
otherwise required to be provided by the applicable Portfolio's investment
adviser, transfer agent or other agent.
(b) In each year during which this Agreement remains in effect, the
Distributor will prepare and furnish to the Board of Directors of the Fund, on a
quarterly basis, written reports complying with the requirements of Rule 12b-1
under the 1940 Act that set forth (i) the amounts expended under this Agreement
and the Distribution Agreement as Distribution Expenses for the Shares of each
Portfolio and the purposes for which those expenditures were made, and (ii) the
amounts expended under this Agreement and the Service Agreement as Shareholder
Servicing Expenses for the Shares of each Portfolio and the purposes for which
those expenditures were made.
ARTICLE 6. Indemnification of Distributor. The Fund agrees to indemnify
and hold harmless the Distributor and each of its directors and officers and
each person, if any, who controls the Distributor within the meaning of Section
15 of the 1933 Act against any loss, liability, claim, damages or expenses
(including the reasonable cost of investigating or defending any alleged loss,
liability, claim, damages or expenses and reasonable counsel fees and
disbursements incurred in connection therewith), arising by reason of any person
acquiring any Shares, based upon the ground that the registration statement,
prospectus, Shareholder reports or other information filed or made public by the
Fund (as from time to time amended) included an untrue statement of a material
fact or omitted to state a material fact required to be stated or necessary in
order to make the statements made not misleading. However, the Fund does not
agree to indemnify the Distributor or hold it harmless to the extent that the
statements or omission was made in reliance upon, and in conformity with,
information furnished to the Fund by or on behalf of the Distributor.
In no case (i) is the indemnity of the Fund to be deemed to protect the
Distributor against any liability to the Fund or its Shareholders to which the
Distributor or such person otherwise would be subject by reason of willful
misfeasance, bad faith or negligence in the performance of its duties or by
reason of its reckless disregard of its obligations and duties under this
Agreement, or (ii) is the Fund to be liable to the Distributor under the
indemnity agreement contained in this paragraph with respect to any claim made
against the Distributor or any person indemnified unless the Distributor or
other person shall have notified the Fund in writing of the claim within a
reasonable time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon the
Distributor or such other person (or after the Distributor or the person shall
have received notice of service on any designated agent). However, failure to
notify the Fund of any claim shall not relieve the Fund from any liability which
it may have to the Distributor or any person against whom such action is brought
otherwise than on account of its indemnity agreement contained in this
paragraph.
The Fund shall be entitled to participate at its own expense in the
defense or, if it elects, to assume the defense of any suit brought to enforce
any claims subject to this indemnity provision. If the Fund elects to assume the
defense of any such claim, the defense shall be conducted by counsel chosen by
the Fund and satisfactory to the indemnified defendants in the suits whose
approval shall not be unreasonably withheld. In the event that the Fund elects
to assume the defense of any suit and retain counsel, the indemnified defendants
shall bear the fees and expenses of any additional counsel retained by them. If
the Fund does not elect to assume the defense of a suit, it will reimburse the
indemnified defendants for the reasonable fees and expenses of any counsel
retained by the indemnified defendants.
The Fund agrees to notify the Distributor promptly of the commencement
of any litigation or proceedings against it or any of its officers or Directors
in connection with the issuance or sale of any of its Shares.
ARTICLE 7. Indemnification of Fund. The Distributor covenants and
agrees that it will indemnify and hold harmless the Fund and each of its
Directors and officers and each person, if any, who controls the Fund within the
meaning of Section 15 of the 1933 Act, against any loss, liability, damages,
claim or expense (including the reasonable cost of investigating or defending
any alleged loss, liability, damages, claim or expense and reasonable counsel
fees incurred in connection therewith) based upon the 1933 Act or any other
statute or common law and arising by reason of any person acquiring any Shares,
and alleging a wrongful act of the Distributor or any of its employees or
alleging that the registration statement, prospectus, Shareholder reports or
other information filed or made public by the Fund (as from time to time
amended) included an untrue statement of a material fact or omitted to state a
material fact required to be stated or necessary in order to make the statements
not misleading, insofar as the statement or omission was made in reliance upon
and in conformity with information furnished to the Fund by or on behalf of the
Distributor.
In no case (i) is the indemnity of the Distributor in favor of the Fund
or any other person indemnified to be deemed to protect the Fund or any other
person against any liability to which the Fund or such other person would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement, or (ii) is the
Distributor to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against the Fund or any person
indemnified unless the Fund or person, as the case may be, shall have notified
the Distributor in writing of the claim within a reasonable time after the
summons or other first written notification giving information of the nature of
the claim shall have been served upon the Fund or upon any person (or after the
Fund or such person shall have received notice of service on any designated
agent). However, failure to notify the Distributor of any claim shall not
relieve the Distributor from any liability which it may have to the Fund or any
person against whom the action is brought otherwise than on account of its
indemnity agreement contained in this paragraph.
The Distributor shall be entitled to participate, at its own expense,
in the defense or, if it so elects, to assume the defense of any suit brought to
enforce the claim, but if the Distributor elects to assume the defense, the
defense shall be conducted by counsel chosen by the Distributor and satisfactory
to the indemnified defendants whose approval shall not be unreasonably withheld.
In the event that the Distributor elects to assume the defense of any suit and
retain counsel, the defendants in the suit shall bear the fees and expenses of
any additional counsel retained by them. If the Distributor does not elect to
assume the defense of any suit, it will reimburse the indemnified defendants in
the suit for the reasonable fees and expenses of any counsel retained by them.
The Distributor agrees to notify the Fund promptly of the commencement
of any litigation or proceedings against it in connection with the issue and
sale of any of the Fund's Shares.
ARTICLE 8. Effective Date. This Agreement shall be effective upon its
execution, and unless terminated as provided, shall continue in force for one
year from the effective date and thereafter from year to year, provided that
such annual continuance is approved by (i) either the vote of a majority of the
Directors of the Fund, or the vote of a majority of the outstanding voting
securities of the Shares of each Portfolio, and (ii) the vote of a majority of
those Directors of the Fund who are not parties to this Agreement or the Fund's
Distribution Plan or Service Plan or interested persons of any such party
("Qualified Directors"), cast in person at a meeting called for the purpose of
voting on the approval. This Agreement shall automatically terminate in the
event of its assignment. As used in this paragraph, the terms "votes of a
majority of the outstanding voting securities", "assignment" and "interested
person" shall have the respective meanings specified in the 1940 Act. In
addition, this Agreement may at any time be terminated without penalty by the
Distributor, by a vote of a majority of Qualified Directors or by vote of a
majority of the outstanding voting securities of the Shares class of any
Portfolio upon not less than sixty days' prior written notice to the other
party.
ARTICLE 9. Notices. Any notice required or permitted to be given by
either party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice to the
other party at the last address furnished by the other party to the party giving
notice: if to the Fund, at c/o Kathryn L. Stanton, Associate General Counsel,
SEI Financial Management Corporation, 680 East Swedesford Road, Wayne, PA 19087;
and to its Secretary at the following address: Michael J. Radmer, Esq., Dorsey &
Whitney, 220 South Sixth Street, Minneapolis, MN 55402-1498; and if to the
Distribution, 680 East Swedesford Road, Wayne, Pennsylvania 19087.
ARTICLE 10. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Minnesota and the applicable provisions
of the 1940 Act. To the extent that the applicable laws of the State of
Maryland, or any of the provisions herein, conflict with the applicable
provisions of the 1940 Act, the latter shall control.
ARTICLE 11. Multiple Originals. 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, the Fund and the Distributor have each duly executed this
Agreement, as of the day and year above written.
FIRST AMERICAN FUNDS, INC.
By: /s/ Kathryn L. Stanton
Attest: /s/ Richard Shoch
SEI FINANCIAL SERVICES COMPANY
By: /s/ Kathryn L. Stanton
Attest: /s/ Richard Shoch
EXHIBIT (6)(b)
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of this 1st day of January, 1995, between
FIRST AMERICAN FUNDS, INC., a Minnesota corporation (the "Fund"), and SEI
Financial Services Company (the "Distributor"), a Pennsylvania corporation.
WHEREAS, the Fund is registered as an investment company with the
Securities and Exchange Commission ("SEC") under the Investment Company Act of
1940, as amended ("1940 Act"), and its Shares are registered with the SEC under
the Securities Act of 1933, as amended ("1933 Act"); and
WHEREAS, the Distributor is registered as a broker-dealer with the SEC
under the Securities Exchange Act of 1934, as amended;
WHEREAS, the Fund desires to appoint the Distributor to act as
distributor and shareholder servicing agent for the shares of the Fund's
portfolios (other than the Retail Class B shares), as now in existence or
hereinafter created from time to time (collectively, the "Shares"), in
accordance with the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the Fund and Distributor hereby agree as follows:
ARTICLE 1. Sale of Shares. The Fund grants to the Distributor the
exclusive right to sell Shares of each portfolio of the Fund (each a
"Portfolio"), at the net asset value per Share plus, in the case of Retail Class
A Shares and Corporate Trust Class D Shares, the applicable sales charge, in
accordance with the current prospectus, as agent and on behalf of the Fund,
during the term of this Agreement and subject to the registration requirements
of the 1933 Act, the rules and regulations of the SEC and the laws governing the
sale of securities in the various states ("Blue Sky Laws").
ARTICLE 2. Solicitation of Sales. In consideration of these rights
granted to the Distributor, the Distributor agrees to use all reasonable
efforts, consistent with its other business, in connection with the distribution
of Shares of the Fund; provided, however, that the Distributor shall not be
prevented from entering into like arrangements with other issuers. The
provisions of this paragraph do not obligate the Distributor to register as a
broker or dealer under the Blue Sky Laws of any jurisdiction when it determines
it would be uneconomical for it to do so or to maintain its registration in any
jurisdiction in which it is now registered nor obligate the Distributor to sell
any particular number of Shares.
ARTICLE 3. Authorized Representations. The Distributor is not
authorized by the Fund to give any information or to make any representations
other than those contained in the current registration statements and
prospectuses of the Fund filed with the SEC or contained in Shareholder reports
or other material that may be prepared by or on behalf of the Fund for the
Distributor's use. The Distributor may prepare and distribute sales literature
and other material as it may deem appropriate, provided that such literature and
materials have been approved by the Fund prior to their use.
ARTICLE 4. Registration of Shares. The Fund agrees that it will take
all action necessary to register Shares under the federal and state securities
laws so that there will be available for sale the number of Shares the
Distributor may reasonably be expected to sell and to pay all fees associated
with said registration. The Fund shall make available to the Distributor such
number of copies of its currently effective prospectus and statement of
additional information as the Distributor may reasonably request. The Fund shall
furnish to the Distributor copies of all information, financial statements and
other papers which the Distributor may reasonably request for use in connection
with the distribution of Shares of the Fund.
ARTICLE 5. Compensation and Allocation of Expenses.
(a) Pursuant to the Fund's Class A Plan of Distribution adopted by the
Portfolios in accordance with Rule 12b-1 under the 1940 Act (the "Retail Plan"),
Class A Shares of each Portfolio will pay the Distributor a total fee in
connection with the servicing of shareholder accounts of such class and in
connection with distribution-related services provided in respect of such class,
calculated and payable monthly, at the annual rate of .25% of the value of the
average daily net assets of such class. Pursuant to the Fund's Class D
Distribution Plan (the "Class D Plan" and together with the Retail Plan, the
"Plans"), adopted by the Portfolios in accordance with Rule 12b-1 under the 1940
Act, Class D Shares of each Portfolio will pay the Distributor a total fee in
connection with the servicing of shareholder accounts of such class and in
connection with distribution-related services provided in respect of such class,
calculated and payable monthly, at the annual rate of .15% of the value of the
average daily net assets of such class. All or any portion of the total fee
under the Plans may be payable as Shareholder Servicing Fee as described in the
Plans, and all or any portion of such total fee may be payable as a Distribution
Fee as described in the Plans, as determined from time to time by the Fund's
Board of Directors. Until further action by the Board of Directors, all of such
fee shall be designated and payable as a Shareholder Servicing Fee. Amounts
payable to the Distributor under the Plans may exceed or be less than the
Distributor's actual Distribution Expenses and Shareholder Servicing Costs as
described in (b) below. In the event such Distribution Expenses and Shareholder
Servicing Costs exceed amounts payable to the Distributor under the Plans, the
Distributor shall not be entitled to reimbursement by the Fund.
(b) During the period of this Agreement, the Fund shall pay or cause to
be paid all expenses, costs and fees incurred by the Fund which are not assumed
by the Distributor. The Distributor agrees to provide, and shall pay costs which
it incurs in connection with providing, administrative or accounting services to
shareholders of the Class A Shares and Class D Shares of each Portfolio (such
costs are referred to as "Shareholder Servicing Costs"). The Distributor shall
also pay all of its own costs incurred in connection with the distribution of
the shares of each such class ("Distribution Expenses"). Distribution Expenses
include, but are not limited to, the following expenses incurred by the
Distributor: initial and ongoing sales compensation (in addition to sales loads)
paid to investment executives of the Distributor and to other broker-dealers and
participating financial institutions which the Distributor has agreed to pay;
expenses incurred in the printing of prospectuses, statements of additional
information and reports used for sales purposes; expenses of preparation and
distribution of sales literature; expenses of advertising of any type; an
allocation of the Distributor's overhead; payments to and expenses of persons
who provide support services in connection with the distribution of Fund shares;
and other distribution-related expenses. Shareholder Servicing Costs include all
expenses of the Distributor incurred in connection with providing administrative
or accounting services to shareholders of each such class, including, but not
limited to, an allocation of the Distributor's overhead and payments made to
persons, including employees of the Distributor, who respond to inquiries of
shareholders regarding their ownership of such classes of shares, or who provide
other administrative or accounting services not otherwise required to be
provided by the applicable Portfolio's investment adviser, transfer agent or
other agent.
(c) In each year during which this Agreement remains in effect, the
Distributor will prepare and furnish to the Board of Directors of the Fund, on a
quarterly basis, written reports complying with the requirements of Rule 12b-1
under the 1940 Act that set forth the amounts expended under this Agreement and
the Plan on a class by class basis and the purposes for which those expenditures
were made.
ARTICLE 6. Indemnification of Distributor. The Fund agrees to indemnify
and hold harmless the Distributor and each of its directors and officers and
each person, if any, who controls the Distributor within the meaning of Section
15 of the 1933 Act against any loss, liability, claim, damages or expense
(including the reasonable cost of investigating or defending any alleged loss,
liability, claim, damages, or expense and reasonable counsel fees and
disbursements incurred in connection therewith), arising by reason of any person
acquiring any Shares, based upon the ground that the registration statement,
prospectus, Shareholder reports or other information filed or made public by the
Fund (as from time to time amended) included an untrue statement of a material
fact or omitted to state a material fact required to be stated or necessary in
order to make the statements made not misleading. However, the Fund does not
agree to indemnify the Distributor or hold it harmless to the extent that the
statements or omission was made in reliance upon, and in conformity with,
information furnished to the Fund by or on behalf of the Distributor.
In no case (i) is the indemnity of the Fund to be deemed to protect the
Distributor against any liability to the Fund or its Shareholders to which the
Distributor or such person otherwise would be subject by reason of willful
misfeasance, bad faith or negligence in the performance of its duties or by
reason of its reckless disregard of its obligations and duties under this
Agreement, or (ii) is the Fund to be liable to the Distributor under the
indemnity agreement contained in this paragraph with respect to any claim made
against the Distributor or any person indemnified unless the Distributor or
other person shall have notified the Fund in writing of the claim within a
reasonable time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon the
Distributor or such other person (or after the Distributor or the person shall
have received notice of service on any designated agent). However, failure to
notify the Fund of any claim shall not relieve the Fund from any liability which
it may have to the Distributor or any person against whom such action is brought
otherwise than on account of its indemnity agreement contained in this
paragraph.
The Fund shall be entitled to participate at its own expense in the
defense or, if it so elects, to assume the defense of any suit brought to
enforce any claims subject to this indemnity provision. If the Fund elects to
assume the defense of any such claim, the defense shall be conducted by counsel
chosen by the Fund and satisfactory to the indemnified defendants in the suit
whose approval shall not be unreasonably withheld. In the event that the Fund
elects to assume the defense of any suit and retain counsel, the indemnified
defendants shall bear the fees and expenses of any additional counsel retained
by them. If the Fund does not elect to assume the defense of a suit, it will
reimburse the indemnified defendants for the reasonable fees and expenses of any
counsel retained by the indemnified defendants.
The Fund agrees to notify the Distributor promptly of the commencement
of any litigation or proceedings against it or any of its officers or Directors
in connection with the issuance or sale of any of its Shares.
ARTICLE 7. Indemnification of Fund. The Distributor covenants and
agrees that it will indemnify and hold harmless the Fund and each of its
Directors and officers and each person, if any, who controls the Fund within the
meaning of Section 15 of the Act, against any loss, liability, damages, claim or
expense (including the reasonable cost of investigating or defending any alleged
loss, liability, damages, claim or expense and reasonable counsel fees incurred
in connection therewith) based upon the 1933 Act or any other statute or common
law and arising by reason of any person acquiring any Shares, and alleging a
wrongful act of the Distributor or any of its employees or alleging that the
registration statement, prospectus, Shareholder reports or other information
filed or made public by the Fund (as from time to time amended) included an
untrue statement of a material fact or omitted to state a material fact required
to be stated or necessary in order to make the statements not misleading,
insofar as the statement or omission was made in reliance upon and in conformity
with information furnished to the Fund by or on behalf of the Distributor.
In no case (i) is the indemnity of the Distributor in favor of the Fund
or any other person indemnified to be deemed to protect the Fund or any other
person against any liability to which the Fund or such other person would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement, or (ii) is the
Distributor to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against the Fund or any person
indemnified unless the Fund or person, as the case may be, shall have notified
the Distributor in writing of the claim within a reasonable time after the
summons or other first written notification giving information of the nature of
the claim shall have been served upon the Fund or upon any person (or after the
Fund or such person shall have received notice of service on any designated
agent). However, failure to notify the Distributor of any claim shall not
relieve the Distributor from any liability which it may have to the Fund or any
person against whom the action is brought otherwise than on account of its
indemnity agreement contained in this paragraph.
The Distributor shall be entitled to participate, at its own expense,
in the defense or, if it so elects, to assume the defense of any suit brought to
enforce the claim, but if the Distributor elects to assume the defense, the
defense shall be conducted by counsel chosen by the Distributor and satisfactory
to the indemnified defendants whose approval shall not be unreasonably withheld.
In the event that the Distributor elects to assume the defense of any suit and
retain counsel, the defendants in the suit shall bear the fees and expenses of
any additional counsel retained by them. If the Distributor does not elect to
assume the defense of any suit, it will reimburse the indemnified defendants in
the suit for the reasonable fees and expenses of any counsel retained by them.
The Distributor agrees to notify the Fund promptly of the commencement
of any litigation or proceedings against it in connection with the issue and
sale of any of the Fund's Shares.
ARTICLE 8. Effective Date. This Agreement shall be effective upon its
execution, and unless terminated as provided, shall continue in force for one
year from the effective date and thereafter from year to year, provided that
such annual continuance is approved by (i) either the vote of a majority of the
Directors of the Fund, or the vote of a majority of the outstanding voting
securities of the Fund, and (ii) the vote of a majority of those Directors of
the Fund who are not parties to this Agreement or the Fund's Distribution Plan
or interested persons of any such party ("Qualified Directors"), cast in person
at a meeting called for the purpose of voting on the approval. This Agreement
shall automatically terminate in the event of its assignment. As used in this
paragraph the terms "vote of a majority of the outstanding voting securities",
"assignment" and "interested person" shall have the respective meanings
specified in the 1940 Act. In addition, this Agreement may at any time be
terminated without penalty by the Distributor, by a vote of a majority of
Qualified Directors or by vote of a majority of the outstanding voting
securities of the Fund upon not less than sixty days prior written notice to the
other party.
ARTICLE 9. Notices. Any notice required or permitted to be given by
either party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice to the
other party at the last address furnished by the other party to the party giving
notice: if to the Fund, at c/o Kevin P. Robins, General Counsel, SEI Financial
Services Company, 680 East Swedesford Road, Wayne, PA 19087; and to its
Secretary at the following address: Michael J. Radmer, Esq., Dorsey & Whitney,
220 South Sixth Street, Minneapolis, MN 55402-1498; and if to the Distributor,
680 East Swedesford Road, Wayne, PA 19087.
ARTICLES 10. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Minnesota and the applicable provisions
of the 1940 Act. To the extent that the applicable laws of the State of
Minnesota, or any of the provisions herein, conflict with the applicable
provisions of the 1940 Act, the latter shall control.
ARTICLE 11. Multiple Originals. 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, the Fund and Distributor have each duly executed this
Agreement, as of the day and year above written.
FIRST AMERICAN FUNDS, INC.
By: ________________________
Attest: ______________________
SEI FINANCIAL SERVICES COMPANY
By: ________________________
Attest: ______________________
EXHIBIT (8)(a)
CUSTODIAN AGREEMENT
FIRST AMERICAN FUNDS, INC.
FIRST TRUST NATIONAL ASSOCIATION
THIS AGREEMENT, made this 20th day of September, 1993, by and
between First American Funds, Inc., a Minnesota corporation (hereinafter called
the "Fund"), and First Trust National Association, a national banking
association organized and existing under the laws of the United States of
America with its principal place of business at Minneapolis, Minnesota
(hereinafter called the "Custodian").
WITNESSETH:
WHEREAS, the Fund is a mutual fund that currently offers its
shares in five series -- First American Money Fund, First American Institutional
Money Fund, First American Institutional Government Fund, First American CT
Treasury Fund, and First American CT Government Fund -- the investment
portfolios and other aspects of which are different in certain respects.
WHEREAS, the Fund desires that its securities and cash shall
be hereafter held and administered by the Custodian, pursuant to the terms of
this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements
herein made, the Fund and the Custodian agree as follows:
ARTICLE 1. DEFINITIONS
The word "Securities" as used herein shall be construed to
include, without being limited to, shares, stocks, treasury stocks, including
any stocks of the Fund, options, notes, bonds, debentures, evidences of
indebtedness, certificates of interest or participation in any profit-sharing
agreements, collateral trust certificates, reorganization certificates or
subscriptions, transferable shares, investment contracts, voting trust
certificates, certificates of deposit for a security, fractional or undivided
interests in oil, gas, or other mineral rights, or any certificates of interest
or participation in, temporary or interim certificates for, receipts for,
guarantees of, or warrants or rights to subscribe to or purchase any of the
foregoing, acceptances and other obligations, and any evidence of any right or
interest in or to any property or assets, financial futures contracts and
options thereon, and any other interest or instrument commonly known as a
security or commodity.
The word "Series" shall refer individually or collectively, as
the context requires, to Prime Obligations Fund, Government Obligations Fund and
Treasury Obligations Fund, and any further series of common stock of the Fund
created hereafter by
resolution of the Fund's board of directors and on behalf of which series of
common stock the Fund's board of directors adopts this Agreement.
The words "Written Order from the Fund" shall mean a request
or direction or certification in writing directed to the Custodian and signed in
the name of the Fund by any two of the individuals designated in the current
certified list referred to in Article 2, provided that one of the individuals so
signing shall be an officer of the Fund designated in said current certified
list.
ARTICLE 2. NAMES TITLES AND SIGNATURES OF FUND'S OFFICERS
The Fund shall certify to the Custodian the names, titles, and
signatures of officers and other persons who are authorized to give Written
Orders to the Custodian on behalf of each individual Series of the Fund. The
Fund agrees that, whenever any change in such authorization occurs, it will file
with the Custodian a new certified list of names, titles, and signatures which
shall be signed by at least one officer previously certified to the Custodian if
any such officer still holds an office in the Fund. The Custodian is authorized
to rely and act upon the names, titles, and signatures of the individuals as
they appear in the most recent such certified list which has been delivered to
the Custodian as hereinbefore provided.
ARTICLE 3. RECEIPT AND DISBURSING OF MONEY
Section (1). The Fund shall from time to time cause cash owned
by the Fund to be delivered or paid to the Custodian for the account of any
Series, but the Custodian shall not be under any obligation or duty to determine
whether all cash of the Fund is being so deposited, to which Series account any
such cash is being deposited, or to take any action or to give any notice with
respect to cash not so deposited. The Custodian agrees to hold such cash,
together with any other sum collected or received by it for or on behalf of the
Fund, for the account of the Fund Series designated by the Fund, in the name of
"First American Funds, Inc., Custodian Account, [Prime Obligations Fund],
[Government Obligations Fund] and [Treasury Obligations Fund]" (or in the name
of any Series created hereafter and adopting this Agreement) in conformity with
the terms of this Agreement. The Custodian shall make payments of cash for the
account of the Fund only:
(a) for bills, statements and other obligations of Fund
(including but not limited to obligations in
connection with the conversion, exchange or surrender
of securities owned by Fund, interest charges,
dividend disbursements, taxes, management fees,
custodian fees, legal fees, auditors' fees, transfer
agents' fees, brokerage commissions, compensation to
personnel, and other operating expenses of Fund)
pursuant to Written Orders from the Fund setting
forth the name of the person to whom payment is to be
made, the amount of the payment, and the purpose of
the payment;
(b) as provided in Article 4 hereof; and
(c) upon the termination of this Agreement.
Section (2). The Custodian is hereby appointed the
attorney-in-fact of the Fund to enforce and collect all checks, drafts, or other
orders for the payment of money received by the Custodian for the account of the
Fund and drawn to or to the order of the Fund and to deposit them in said
Custodian Account of the Fund.
ARTICLE 4. RECEIPT OF SECURITIES
The Fund agrees to place all of its Securities in the custody
of the Custodian for the account of any Series, but the Custodian shall not be
under any obligation or duty to determine whether all Securities of the Fund are
being so deposited, to which Series account any such Securities are being
deposited, or to require that they be so deposited, or to take any action or
give any notice with respect to the Securities not so deposited. The Custodian
agrees to hold such Securities for the account of the Series of the Fund
designated by the Fund, in the name of the Fund or of bearer or of a nominee of
the Custodian, and in conformity with the terms of this Agreement. The Custodian
also agrees, upon Written Order from the Fund, to receive from persons other
than the Fund and to hold for the account of the Series of the Fund designated
by the Fund Securities specified in said Written Order, and, if the same are in
proper form, to cause payment to be made therefor to the persons from whom such
Securities were received, from the funds of the Fund held by it in said
Custodian Account in the amounts provided and in the manner directed by the
Written Order from the Fund.
The Custodian agrees that all Securities of the Fund placed in
its custody shall be kept physically segregated at all times from those of any
other person, firm, or corporation, and shall be held by the Custodian with all
reasonable precautions for the safekeeping thereof, with safeguards
substantially equivalent to those maintained by the Custodian for its own
Securities.
Subject to such rules, regulations, and orders as the
Securities and Exchange Commission may adopt, the Fund may direct the Custodian
to deposit all or any part of the Securities owned by the Fund in a system for
the central handling of Securities established by a national securities exchange
or a national securities association registered with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, or such other person as
may be permitted by the Commission, pursuant to which system all Securities of
any particular class or series of any issuer deposited within the system are
treated as fungible and may be transferred or pledged by bookkeeping entry
without physical delivery of such Securities, provided that all such deposits
shall be subject to withdrawal only at the direction of the Fund.
ARTICLE 5. TRANSFER, EXCHANGE, REDELIVERY, ETC. OF SECURITIES
The Custodian agrees to transfer, exchange, or deliver
Securities as provided in Article 6, or on receipt by it of, and in accordance
with, a Written Order from the Fund in which the Fund shall state specifically
which of the following cases is covered thereby, provided that it shall not be
the responsibility of the Custodian to determine the propriety or legality of
any such order:
(a) In the case of deliveries of Securities sold by the
Fund, against receipt by the Custodian of the
proceeds of sale and after receipt of a confirmation
from a broker or dealer with respect to the
transaction;
(b) In the case of deliveries of Securities which may
mature or be called, redeemed, retired, or otherwise
become payable, against receipt by the Custodian of
the sums payable thereon or against interim receipts
or other proper delivery receipts;
(c) In the case of deliveries of Securities which are to
be transferred to and registered in the name of the
Fund or of a nominee of the Custodian and delivered
to the Custodian for the account of the Fund, against
receipt by the Custodian of interim receipts or other
proper delivery receipts;
(d) In the case of deliveries of Securities to the issuer
thereof, its transfer agent or other proper agent, or
to any committee or other organization for exchange
for other Securities to be delivered to the Custodian
in connection with a reorganization or
recapitalization of the issuer or any split-up or
similar transaction involving such Securities,
against receipt by the Custodian of such other
Securities or against interim receipts or other
proper delivery receipts;
(e) In the case of deliveries of temporary certificates
in exchange for permanent certificates, against
receipt by the Custodian of such permanent
certificates or against interim receipts or other
proper delivery receipts;
(f) In the case of deliveries of Securities upon
conversion thereof into other Securities, against
receipt by the Custodian of such other Securities or
against interim receipts or other proper delivery
receipts;
(g) In the case of deliveries of Securities in exchange
for other Securities (whether or not such
transactions also involve the receipt or payment of
cash), against receipt by the Custodian of such other
Securities or against interim receipts or other
proper delivery receipts;
(h) In a case not covered by the preceding paragraphs of
this Article, upon receipt of a resolution adopted by
the Board of Directors of the Fund, signed by an
officer of the Fund and certified to by the
Secretary, specifying the Securities and assets to be
transferred, exchanged, or delivered, the purposes
for which such delivery is being made, declaring such
purposes to be proper corporate purposes, and naming
a person or persons (each of whom shall be a properly
bonded officer or employee of the Fund) to whom such
transfer, exchange, or delivery is to be made; and
(i) In the case of deliveries pursuant to paragraphs (a),
(b), (c), (d), (e), (f), and (g) above, the Written
Order from the Fund shall direct that the proceeds of
any Securities delivered, or Securities or other
assets exchanged for or in lieu of Securities so
delivered, are to be delivered to the Custodian.
ARTICLE 6. CUSTODIAN'S ACTS WITHOUT INSTRUCTIONS
Unless and until the Custodian receives contrary Written
Orders from the Fund, the Custodian shall without order from the Fund:
(a) Present for payment all bills, notes, checks, drafts,
and similar items, and all coupons or other income
items (except stock dividends), held or received for
the account of the Fund, and which require
presentation in the ordinary course of business, and
credit such items to the aforesaid Custodian Account
of the Fund pursuant to Custodian's then current
funds availability schedule; but Custodian shall have
no duty to take action to effect collection of any
amount if the assets upon which such payment is due
are in default or if payment is refused after due
demand and presentation;
(b) Present for payment all Securities which may mature
or be called, redeemed, retired, or otherwise become
payable and credit such items to the aforesaid
Custodian Account of the Fund pursuant to Custodian's
then current funds availability schedule; but
Custodian shall have no duty to take action to effect
collection of any amount if the assets upon which
such payment is due are in default or if payment is
refused after due demand and presentation;
(c) Hold for and credit to the account of the Fund all
shares of stock and other Securities received as
stock dividends or as the result of a stock split or
otherwise from or on account of Securities of the
Fund, and notify the Fund promptly of the receipt of
such items;
(d) Deposit any cash received by it from, for or on
behalf of the Fund to the credit of the Fund in the
aforesaid Custodian Account (in its own deposit
department without liability for interest);
(e) Charge against the aforesaid Custodian Account for
the Fund disbursements authorized to be made by the
Custodian hereunder and actually made by it, and
notify the Fund of such charges at least once a
month;
(f) Deliver Securities which are to be transferred to and
reissued in the name of the Fund, or of a nominee of
the Custodian for the account of the Fund, and
temporary certificates which are to be exchanged for
permanent certificates, to a proper transfer agent
for such purpose against interim receipts or other
proper delivery receipts; and
(g) Hold for disposition in accordance with Written
Orders from the Fund hereunder all options, rights,
and similar Securities which may be received by the
Custodian and which are issued with respect to any
securities held by it hereunder, and notify the Fund
promptly of the receipt of such items.
ARTICLE 7. DELIVERY OF PROXIES
The Custodian shall deliver promptly to the Fund all proxies,
written notices, and communications with relation to Securities held by it which
it may receive from securities issuers or obligors and/or via the industry
standard information services to which Custodian subscribes.
ARTICLE 8. TRANSFER
The Fund shall furnish to the Custodian appropriate
instruments to enable the Custodian to hold or deliver in proper form for
transfer any Securities which it may hold for the Series accounts of the Fund.
For the purpose of facilitating the handling of Securities, unless the Fund
shall otherwise direct by Written Order, the Custodian is authorized to hold
Securities deposited with it under this Agreement in the name of its registered
nominee or nominees (as defined in the Internal Revenue Code and any Regulations
of the United States Treasury Department issued thereunder or in any provision
of any subsequent federal tax law exempting such transaction from liability for
stock transfer taxes) and shall execute and deliver all such certificates in
connection therewith as may be required by such laws or regulations or under the
laws of any state. The Custodian shall advise the Fund of the certificate number
of each certificate so presented for transfer and that of the certificate
received in exchange therefor, and shall use its best efforts to the end that
the specific Securities held by it hereunder shall be at all times identifiable.
ARTICLE 9. TRANSFER TAXES AND OTHER DISBURSEMENTS
The Fund shall pay or reimburse the Custodian for any transfer
taxes payable upon transfers of Securities made hereunder, including transfers
incident to the termination of this Agreement, and for all other necessary and
proper disbursements, advances and expenses made or incurred by the Custodian in
the performance or incident to the termination of this Agreement, and the
Custodian shall have a lien upon any cash or Securities held by it for the
account of the Fund for all such items, enforceable, after thirty days' Written
Notice by registered mail to the Fund, by the sale of sufficient Securities to
satisfy such lien. In the event that any advance of funds is made by Custodian
on behalf of the Fund, the Fund agrees to repay the Custodian on demand the
amount of the advance plus accrued interest at the then effective Federal funds
rate. The Custodian may reimburse itself by deducting from the proceeds of any
sale of Securities an amount sufficient to pay any transfer taxes payable upon
the transfer of Securities sold. The Custodian shall execute such certificates
in connection with Securities delivered to it under this Agreement as may be
required, under the provisions of any federal revenue act and any Regulations of
the Treasury Department issued thereunder or any state laws, to exempt from
taxation any transfers and/or deliveries of any such Securities as may qualify
for such exemption.
ARTICLE 10. CUSTODIAN'S LIABILITY FOR
PROCEEDS OF SECURITIES SOLD
If the mode of payment for Securities to be delivered by the
Custodian is not specified in the Written Order from the Fund directing such
delivery, the Custodian shall make delivery of such Securities against receipt
by it of cash, a postal money order or a check drawn by a bank, trust company,
or other banking institution, or by a broker named in such Written Order from
the Fund, for the amount the Custodian is directed to receive. The Custodian
shall be liable for the proceeds of any delivery of Securities made pursuant to
this Article, but provided that it has complied with the provisions of this
Article, only to the extent that such proceeds are actually received.
ARTICLE 11. CUSTODIAN'S REPORT
The Custodian shall furnish the Fund, as of the close of
business on the last business day of each month, a statement showing all cash
transactions and entries for the accounts of the Series of the Fund. The books
and records of the Custodian pertaining to its actions as Custodian under this
Agreement shall be open to inspection and audit, at reasonable times, by
officers of, and auditors employed by, the Fund. The Custodian shall furnish the
Fund with a list of the Securities held by it in custody for the account of the
Fund as of the close of business on the last business day of each quarter of the
Fund's fiscal year.
ARTICLE 12. CUSTODIAN'S COMPENSATION
The Custodian shall be paid compensation at such rates and at
such times as may from time to time be agreed on in writing by the parties
hereto, and the Custodian shall have a lien for unpaid compensation, to the date
of termination of this Agreement, upon any cash or Securities held by it for the
Series accounts of the Fund, enforceable in the manner specified in Article 9
hereof.
ARTICLE 13. DURATION, TERMINATION AND AMENDMENT OF
AGREEMENT
This Agreement shall remain in effect, as it may from time to
time be amended, until it shall have been terminated as hereinafter provided,
but no such alteration or termination shall affect or impair any rights or
liabilities arising out of any acts or omissions to act occurring prior to such
amendment or termination.
The Custodian may terminate this Agreement by giving the Fund
ninety days' written notice of such termination by registered mail addressed to
the Fund at its principal place of business.
The Fund may terminate this Agreement by giving ninety days'
written notice thereof delivered, together with a copy of the resolution of the
Board of Directors authorizing such termination and certified by the Secretary
of the Fund, by registered mail to the Custodian at its principal place of
business. Additionally, this Agreement may be terminated with respect to any
Series of the Fund pursuant to the same procedures, in which case this Agreement
shall continue in full effect with respect to all other Series of the Fund.
Upon termination of this Agreement, the assets of the Fund, or
Series thereof, held by the Custodian shall be delivered by the Custodian to a
successor custodian upon receipt by the Custodian of a copy of the resolution of
the Board of Directors of the Fund, certified by the Secretary, designating the
successor custodian; and if no successor custodian is designated the Custodian
shall, upon such termination, deliver all such assets to the Fund.
This Agreement may be amended at any time by the mutual
agreement of the Fund and the Custodian. Additionally, this Agreement may be
amended with respect to any Series of the Fund at any time by the mutual
agreement of the Fund and the Custodian, in which case such amendment would
apply to such Series amending this Agreement but not to the other Series of the
Fund.
This Agreement may not be assigned by the Custodian without
the consent of the Fund, authorized or approved by a resolution of its Board of
Directors.
ARTICLE 14. SUCCESSOR CUSTODIAN
Any bank or trust company into which the Custodian or any
successor custodian may be merged or converted or with which it or any successor
custodian may be consolidated, or any bank or trust company resulting from any
merger, conversion or consolidation to which the Custodian or any successor
custodian shall be a party, or any bank or trust company succeeding to the
business of the Custodian, shall be and become the successor custodian without
the execution of any instrument or any further act on the part of the Fund or
the Custodian or any successor custodian.
Any successor custodian shall have all the power, duties, and
obligations of the preceding custodian under this Agreement and any amendments
thereof and shall succeed to all the exemptions and privileges of the preceding
custodian under this Agreement and any amendments thereof.
ARTICLE 15. GENERAL
Nothing expressed or mentioned in or to be implied from any
provisions of this Agreement is intended to give or shall be construed to give
any person or corporation other than the parties hereto any legal or equitable
right, remedy or claim under or in respect of this Agreement or any covenant,
condition or provision herein contained, this Agreement and all of the
covenants, conditions and provisions hereof being intended to be, and being, for
the sole and exclusive benefit of the parties hereto and their respective
successors and assigns.
It is the purpose and intention of the parties hereto that the
Fund shall retain all the power, rights and responsibilities of determining
policy, exercising discretion and making decisions with respect to the purchase,
or other acquisitions, and the sale, or other disposition, of all of its
Securities, and that the duties and responsibilities of the Custodian hereunder
shall be limited to receiving and safeguarding the assets and Securities of the
Fund and to delivering or disposing of them pursuant to the Written Order of the
Fund as aforesaid, and the Custodian shall have no authority, duty or
responsibility for the investment policy of the Fund or for any acts of the Fund
in buying or otherwise acquiring, or in selling or otherwise disposing of, any
Securities, except as hereinbefore specifically set forth.
The Custodian shall in no case or event permit the withdrawal
of any money or Securities of the Fund upon the mere receipt of any director,
officer, employee or agent of the Fund, but shall hold such money and Securities
for disposition under the procedures herein set forth.
ARTICLE 16. INSTRUCTIONS TO CUSTODIAN
The Custodian may, when it deems it expedient, apply to the
Fund, or to counsel for the Fund, or to its own counsel, for instructions and
advice; and the Custodian shall not be liable for any action taken by it in
accordance with the written instructions or advice of the Fund or of counsel for
the Fund.
ARTICLE 17. EFFECTIVE DATE
This agreement shall become effective when it is executed and
delivered by the parties hereto, which date shall not precede the date it shall
have been approved by the Board of Directors of the Fund. The Fund shall
transmit to the Custodian promptly after such approval by said Board of
Directors a copy of its resolution embodying such approval, certified by the
Secretary of the Fund.
ARTICLE 18. GOVERNING LAW
This agreement is executed and delivered in Minneapolis,
Minnesota and the laws of the State of Minnesota shall be controlling and shall
govern the construction, validity and effect of this contract.
IN WITNESS WHEREOF, the Fund and the Custodian have caused
this Agreement to be executed in duplicate as of the date first above written by
their duly authorized officers.
ATTEST: FIRST AMERICAN FUNDS, INC.
/s/ By /s/ Wayne W. Withrow
Asst. Secretary Its Vice President
ATTEST: FIRST TRUST NATIONAL ASSOCIATION
/s/ By /s/ Michael W. Kellogg
Trust Officer AVP Its Executive Vice President
EXHIBIT (8)(b)
1/95
FIRST AMERICAN FUNDS, INC.
COMPENSATION AGREEMENT DATED AS OF JANUARY 20, 1995
PURSUANT TO CUSTODIAN AGREEMENT
WHEREAS, First American Funds, Inc., a Minnesota corporation
(hereinafter called the "Fund"), and First Trust National Association, a
national banking association organized and existing under the laws of the United
States of America with its principal place of business at Minneapolis, Minnesota
(hereinafter called the "Custodian"), previously entered into that Custodian
Agreement dated September 20, 1993 (the "Custodian Agreement"); and
WHEREAS, Article 12 of the Custodian Agreement provides that the
Custodian shall be paid compensation at such rates and at such times as may from
time to time be agreed on in writing by the parties thereto; and
WHEREAS, the Fund and the Custodian wish to make provision for the
compensation to be paid by the Fund to the Custodian with respect to the
respective series of the Fund.
NOW, THEREFORE, the Fund and the Custodian agree as follows:
1. The compensation payable to the Custodian pursuant to the Custodian
Agreement with respect to Prime Obligations Fund, Treasury Obligations Fund, and
Government Obligations Fund, shall be payable monthly at the annual rate, as a
percentage of the respective series' average daily net assets, of 0.03%.
2. This Compensation Agreement restates and supersedes all prior
compensation agreements pursuant to Article 12 of the Custodian Agreement.
IN WITNESS WHEREOF, the Fund and the Custodian have caused this
instrument to be executed in duplicate as of the date first above written by
their duly authorized officers.
FIRST AMERICAN FUNDS, INC.
By /s/ Kathryn L. Stanton
Its Vice President
FIRST TRUST NATIONAL
ASSOCIATION
By /s/ Jeffrey Wilson
Its Vice President
EXHIBIT (9)(a)
TRANSFER AGENCY AGREEMENT
This Agreement made as of the 31st of March, 1994, by and between First American
Funds, Inc. ("Fund") a Minnesota corporation, having its principal office and
place of business at 680 East Swedesford Road, Wayne, PA 19087 and Supervised
Service Company, Inc. ("SSC") a Delaware corporation having its principal office
and place of business at 120 South LaSalle, Chicago IL 60603 (hereinafter
referred to as the "Transfer Agent").
W I T N E S S E T H:
That for and in consideration of the mutual promises hereinafter set forth, the
parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases shall have the
following meanings:
1. "APPROVED INSTITUTION" shall mean an entity so named in a
Certificate. From time to time the Fund may amend a previously delivered
Certificate by delivering to the Transfer Agent a Certificate naming an
additional entity or deleting any entity named in a previously delivered
Certificate.
2. THE "BOARD OF DIRECTORS" shall mean the Board of Directors of the
Fund.
3. "CERTIFICATE" shall mean any notice, instruction, or other
instrument in writing, authorized or required by this Agreement to be given to
the Transfer Agent by the Fund which is signed by any Officer, as hereinafter
defined, and actually received by the Transfer Agent.
4. "CUSTODIAN" shall mean the financial institution appointed as
custodian under the terms and conditions of the Custody Agreement between the
financial institution and the Fund, or its successor(s).
5. "FUND BUSINESS DAY" shall be deemed to be each day on which the New
York Stock Exchange, Inc. is open for trading.
6. "OFFICER" shall be deemed to be the Fund's President, any Vice
President of the Fund, the Fund's Secretary, the Fund's Treasurer, the Fund's
Controller, any Assistant Controller of the Fund, any Assistant Treasurer of the
Fund and any Assistant Secretary of the Fund, and any other person duly
authorized by the Board of Directors of the Fund to execute any Certificate,
instruction, notice or other instrument on behalf of the Fund and named in the
Certificate annexed hereto as Appendix A, as such Certificate may be amended
from time to time, and any person reasonably believed by the Transfer Agent to
be such a person.
7. "OUT-OF-POCKET EXPENSES" means amounts reasonably necessary and
actually incurred by Transfer Agent in the provision of Transfer Agent services
or pursuant to this Agreement for the following purposes: postage (and first
class mail insurance in connection with mailing share certificates), envelopes,
check forms, continuous forms, forms for reports and statements, stationery, and
other similar items, telephone and telegraph charges incurred in answering
inquiries from dealers or shareholders, microfilm used to record transactions in
shareholder accounts and computer tapes used for permanent storage of records
and cost of insertion of materials in mailing envelopes by outside firms.
Transfer Agent may, at its option, arrange to have various service providers
submit invoices directly to the Fund for payment of out-of-pocket expenses
reimbursable hereunder; and such other expenses paid or incurred by Transfer
Agent at the request of the Fund. Any charges associated with special or
exception processing shall also be considered Out-of-Pocket Expenses.
8. "PROSPECTUS" shall mean the most recent Fund prospectus actually
received by the Transfer Agent from the Fund with respect to which the Fund has
indicated a registration statement under the Federal Securities Act of 1933 has
becomes effective, including the Statement of Additional Information,
incorporated by reference therein.
9. "SHARES" shall mean all or any part of each class or series of the
shares of beneficial interest of the Fund or Portfolio listed in the Certificate
as to which the Transfer Agent acts as transfer agent hereunder, as may be
amended from time to time, which are authorized and/or issued by the Fund.
10. "TRANSFER AGENT" shall mean Supervised Service Company, Inc.,
("SSC"), as transfer agent and dividend disbursing agent under the terms and
conditions of this Agreement, its successor(s) or assign(s).
ARTICLE II
APPOINTMENT OF TRANSFER AGENT
1. The Fund hereby constitutes and appoints the Transfer Agent as
transfer agent of all the Shares of the Fund and as dividend disbursing agent
during the period of this Agreement.
2. The Transfer Agent hereby accepts appointment as transfer agent and
dividend disbursing agent and agrees to perform duties thereof as hereinafter
set forth.
3. In connection with such appointment, the Fund upon the request of
the Transfer Agent, shall deliver the following documents to the Transfer Agent:
(i) A copy of the Articles of Incorporation of the Fund and
all amendments thereto certified by the Secretary of the Fund;
(ii) A copy of the By-Laws of the Fund certified by the
Secretary of the Fund;
(iii) A copy of a resolution of the Board of Directors of the
Fund certified by the Secretary of the Fund appointing the Transfer Agent and
authorizing the execution of this Transfer Agency Agreement;
(iv) A Certificate signed by the Secretary of the Fund
specifying: the number of authorized Shares, the number of such authorized
Shares issued, the number of such authorized Shares issued and currently
outstanding; the names and specimen signatures of the Officers of the Fund; and
the name and address of the legal counsel for the Fund;
(v) Specimen Share certificate for each or series class of
Shares in the form approved by the Board of Directors of the Fund (and in a
format compatible with the Transfer Agent's system), together with a Certificate
signed by the Secretary of the Fund as to such approval;
(vi) Copies of the Fund's Registration Statement, as amended
to date, and the most recently filed Post-Effective Amendment thereto, filed by
the Fund with the Securities and Exchange Commission under the Securities Act of
1933, as amended, and under the Investment Company Act of 1940, as amended,
together with any applications filed in connection therewith; and
(vii) Opinion of counsel for the Fund with respect to the
validity of the authorized and outstanding Shares, whether such Shares are fully
paid and non-assessable and the status of such Shares under the Securities Act
of 1933, as amended, and any other applicable federal law or regulation (i.e.,
if subject to registration, that they have been registered and that the
Registration Statement has become effective or, if exempt, the specific grounds
therefor.)
ARTICLE III
AUTHORIZATION AND ISSUANCE OF SHARES
1. The Fund shall deliver to the Transfer Agent the following documents
on or before the effective date of any increase or decrease in the total number
of Shares authorized to be issued:
(a) A certified copy of the amendment to the Articles of
Incorporation giving effect to such increase or decrease;
(b) In the case of an increase, an opinion of counsel for the
Fund with respect to the validity of the Shares of the Fund and the status of
such Shares under the Securities Act of 1933, as amended, and any other
applicable federal law or regulation (i.e., if subject to registration, that
they have been registered and that the Registration Statement has become
effective or, if exempt, the specific grounds therefor); and
(c) In the case of an increase, if the appointment of the
Transfer Agent was theretofore expressly limited, a certified copy of a
resolution of the Board of Directors of the Fund increasing the authority of the
Transfer Agent.
2. Prior to the issuance of any additional Shares of the Fund pursuant
to stock dividends or stock splits, etc., and prior to any reduction in the
number of shares outstanding, the Fund shall deliver the following documents to
the Transfer Agent:
(a) A certified copy of the resolution(s) adopted by the Board
of Directors and/or the shareholders of the Fund authorizing such issuance of
additional Shares of the Fund or such reduction, as the case may be, and
(b) An opinion of counsel for the Fund with respect to the
validity of the Shares of the Fund and the status of such Shares under the
Securities Act of 1933, as amended, and any other applicable federal law or
regulation (i.e., if subject to registration, that they have been registered and
that the Registration Statement has become effective, or, if exempt, the
specific grounds therefor).
ARTICLE IV
RECAPITALIZATION OR CAPITAL ADJUSTMENT
1. In the case of any negative stock split, recapitalization or other
capital adjustment requiring a change in the form of Share certificates, the
Transfer Agent will issue Share certificates in the new form in exchange for, or
upon transfer of, outstanding Share certificates in the old form, upon
receiving:
(a) A Certificate authorizing the issuance of the Share
certificates in the new form;
(b) A certified copy of any amendment to the Articles of
Incorporation with respect to the change;
(c) Specimen Share certificates for each class of Shares in
the new form approved by the Board of Directors of the Fund, with a Certificate
signed by the Secretary of the Fund as to such approval; and
(d) An opinion of counsel for the Fund with respect to the
validity of the Shares in the new form and the status of such Shares under the
Securities Act of 1933, as amended, and any other applicable federal law or
regulation (i.e., if subject to registration, that the Shares have been
registered and that the Registration Statement has become effective or, if
exempt, the specific grounds therefor.)
2. The Fund at its expense shall furnish the Transfer Agent with a
sufficient supply of blank Share certificates in the new form and from time to
time will replenish such supply upon the request of the Transfer Agent. Such
blank Share certificates shall be compatible with the Transfer Agent's system
and shall be properly signed by facsimile or otherwise by Officers of the Fund
authorized by law or by the By-Laws to sign Share certificates and, if required
shall bear the corporate Seal or facsimile thereof. The Fund agrees to indemnify
and exonerate, save and hold the Transfer Agent harmless, from and against any
and all claims or demands that may be asserted against the Transfer Agent with
respect to the genuineness of any Share certificate supplied to the Transfer
Agent pursuant to this section.
ARTICLE V
ISSUANCE, REDEMPTION AND TRANSFER OF SHARES
1. (a) The Transfer Agent acknowledges that it has received a copy of
the Fund's Prospectus, which Prospectus describes how sales and redemption of
shares of the Fund shall be made, and the Transfer Agent agrees to accept
purchase orders and redemption requests with respect to Fund shares on each Fund
Business Day in accordance with such Prospectus. The Fund agrees to provide the
Transfer Agent with sufficient advance notice to enable the Transfer Agent to
effect any changes in the procedures set forth in the Prospectus regarding such
purchase and redemption procedure; provided, however, that in no event will such
advance notice be less than 30 days.
(b) The Transfer Agent shall also accept with respect to each
Fund Business Day, at such times as are agreed upon from time to time by the
Transfer Agent and the Fund, a computer tape or electronic data transmission
consistent in all respects with the Transfer Agent's record format, as amended
from time to time, which is believed by the Transfer Agent to be furnished by or
on behalf of any Approved Institution. The Transfer Agent shall not be liable
for any losses or damages to the Fund or its shareholders in the event that a
computer tape or electronic data transmission from an Approved Institution is
unable to be processed for any reason beyond the control of the Transfer Agent,
or if any of the information on such tape or transmission is found to be
incorrect.
2. On each Fund Business Day the Transfer Agent shall, as of the time
at which the Fund computes the net asset value of the Fund, issue to and redeem
from the accounts specified in a purchase order, redemption request, or computer
tape or electronic data transmission, which in accordance with the Prospectus is
effective on such Fund Business Day, the appropriate number of full and
fractional Shares based on the net asset value per Share of such Fund specified
in an advice received on such Fund Business Day from the Fund. Notwithstanding
the foregoing, if a redemption specified in a computer tape or electronic data
transmission is for a dollar value of Shares in excess of the dollar value of
uncertificated Shares in the specified account, the Transfer Agent shall not
effect such redemption in whole or in part and shall within twenty-four hours
orally advise the Approved Institution which supplied such tape of the
discrepancy.
3. In connection with a reinvestment of a dividend or distribution of
Shares of the Fund, the Transfer Agent shall as of each Fund Business Day, as
specified in a Certificate or resolution described in paragraph 1 of succeeding
Article VI, issue Shares of the Fund based on the net asset value per Share of
such Fund specified in an advice received from the Fund on such Fund Business
Day.
4. On each Fund Business Day the Transfer Agent shall supply the Fund
with a statement specifying with respect to the immediately preceding Fund
Business Day: the total number of Shares of the Fund (including fractional
Shares) issued and outstanding at the opening of business on such day;
the total number of Shares of the Fund sold on such day, pursuant to preceding
paragraph 2 of this Article; the total number of Shares of the Fund redeemed
from Shareholders by the Transfer Agent on such day; the total number of Shares
of the Fund redeemed from Shareholders by the Transfer Agent on such day; the
total number of Shares of the Fund, if any, sold on such day pursuant to
preceding paragraph 3 of this Article, and the total number of Shares of the
Fund issued and outstanding.
5. In connection with each purchase and each redemption of Shares, the
Transfer Agent shall send such statements as are prescribed by the Federal
Securities laws applicable to transfer agents or as described in the Prospectus.
If the Prospectus indicates that certificates for Shares are available and if
specifically requested in writing by any shareholder, or if otherwise required
hereunder, the Transfer Agent will countersign, issue and mail to such
shareholder at the address set forth in the records of the Transfer Agent a
Share certificate for any full Share requested.
6. As of each Fund Business Day the Transfer Agent shall furnish the
Fund with an advice setting forth the number and dollar amount of Shares to be
redeemed on such Fund Business Day in accordance with paragraph 2 of this
Article.
7. Upon receipt of a proper redemption request and moneys paid to it by
the Custodian in connection with a redemption of Shares, the Transfer Agent
shall cancel the redeemed Shares and after making appropriate deduction for any
withholding of taxes required of it by applicable law (a) in the case of a
redemption of Shares pursuant to a redemption described in preceding paragraph
1(a) of this Article, make payment in accordance with the Fund's redemption and
payment procedures described in the Prospectus, and (b) in the case of a
redemption of Shares pursuant to a computer tape or electronic data transmission
described in preceding paragraph 1(b) of this Article, make payment by directing
a federal funds wire order to the account previously designated by the Approved
Institution specified in said computer tape or electronic data transmission.
8. The Transfer Agent shall not be required to issue any Shares after
it has received from an Officer of the Fund or from an appropriate federal or
state authority written notification that the sale of Shares has been suspended
or discontinued, and the Transfer Agent shall be entitled to rely upon such
written notification.
9. Upon the issuance of any Shares in accordance with this Agreement
the Transfer Agent shall not be responsible for the payment of any original
issue or other taxes required to be paid by the Fund in connection with such
issuance of any Shares.
10. The Transfer Agent shall accept a computer tape or electronic data
transmission consistent with the Transfer Agent's record format, as amended from
time to time, which is reasonably believed by the Transfer Agent to be furnished
by or on behalf of any Approved Institution and is represented to be
instructions with respect to the transfer of Shares from one account of such
Approved Institution to another such account, and shall effect the transfers
specified in said computer tape or electronic data transmission. The Transfer
Agent shall not be liable for any losses to the Fund or its shareholders in the
event that a computer tape or electronic data transmission from an Approved
Institution is unable to be processed for any reason beyond the control of the
Transfer Agent, or if any of the information on such tape or transmission is
found to be incorrect.
11. (a) Except as otherwise provided in sub-paragraph (b) of
this paragraph and in paragraph 13 of this Article, Shares will be transferred
or redeemed upon presentation to the Transfer Agent of Share certificates or
instructions properly endorsed for transfer or redemption, accompanied by such
documents as the Transfer Agent deems necessary to evidence the authority of the
person making such transfer or redemption, and bearing satisfactory evidence of
the payment of stock transfer taxes. In the case of small estates where no
administration is contemplated, the Transfer Agent may, when furnished with an
appropriate surety bond, and without further approval of the Fund, transfer or
redeem Shares registered in the name of a decedent where the current market
value of the Shares being transferred does not exceed such amount as may from
time to time be prescribed by various states. The Transfer Agent reserves the
right to refuse to transfer or redeem Shares until it is satisfied that the
endorsement on the stock certificate or instructions is valid and genuine, and
for that purpose it will require, unless otherwise instructed by an authorized
officer of the Fund, a guarantee of signature by an "Eligible Guarantor
Institution" as that term is defined by SEC Rule 17Ad-15. The Transfer Agent
also reserves the right to refuse to transfer or redeem Shares until it is
satisfied that the requested transfer or redemption is legally authorized, and
it shall incur no liability for the refusal, in good faith, to make transfers or
redemptions which the Transfer Agent, in its judgement, deems improper or
unauthorized, or until it is satisfied that there is no basis to any claims
adverse to such transfer or redemption. The Transfer Agent may, in effecting
transfers and redemptions of Shares, rely upon those provisions of the Uniform
Act for the Simplification of Fiduciary Security Transfers or the Uniform
Commercial Code, as the same may be amended from time to time, applicable to the
transfer of securities, and the Fund shall indemnify the Transfer Agent for any
act done or omitted by it in good faith in reliance upon such laws; provided,
that in no event will the Fund indemnify the Transfer Agent for any act done by
it as a result of willful misfeasance, bad faith, negligence or reckless
disregard of its duties.
(b) Notwithstanding the foregoing or any other provision contained in
this Agreement to the contrary, the Transfer Agent shall, in the absence of
willful misfeasance, bad faith, negligence or reckless disregard of its duties,
be fully protected by the Fund in not requiring any instruments, documents,
assurances, endorsements or guarantees, including, without limitation, any
signature guarantees, in connection with a redemption, or transfer, of Shares
whenever the Transfer Agent reasonably believes that requiring the same would be
inconsistent with the transfer and redemption procedures as described in the
Prospectus.
12. Notwithstanding any provision contained in this agreement to the
contrary, the Transfer Agent shall not be required or expected to require, as a
condition to any transfer of any Shares pursuant to paragraph 11 of this Article
or any redemption of any Shares pursuant to a computer tape or electronic data
transmission described in this Agreement, any documents, including, without
limitation, any documents of the kind described in sub-paragraph (a) of
paragraph 11 of this Article, to evidence the authority of the person requesting
the transfer or redemption and/or the payment of any stock transfer taxes, and
shall, in the absence of willful misfeasance, bad faith, negligence or reckless
disregard of its duties, be fully protected in acting in accordance with the
applicable provisions of this Article.
13. (a) As used in this Agreement, the terms "computer tape" or
electronic data transmission and "computer tape believed by the Transfer Agent
to be furnished by an Approved Institution," shall include any tapes generated
by the Transfer Agent to reflect information believed by the Transfer Agent to
have been input by an Approved Institution, via a remote terminal or other
similar link, into a data processing, storage, or collection system, or similar
system (the "System"), located on the Transfer Agent's premises. For purposes of
paragraph 1 of this Article, such a computer tape or electronic data
transmission shall be deemed to have been furnished at such times as are agreed
upon from time to time by the Transfer Agent and Fund only if the information
reflected thereon was inputted into the System at such times as are agreed upon
from time to time by the Transfer Agent and the Fund.
(b) Nothing contained in this Agreement shall constitute any agreement
or representation by the Transfer Agent to permit, or to agree to permit, any
Approved Institution to input information into a System.
(c) The Transfer Agent reserves the right to approve, in advance, any
Approved Institution, such approval not to be unreasonably withheld. The
Transfer Agent also reserves the right to terminate any and all automated data
communications, at its discretion, upon a reasonable attempt to notify the Fund
when in the opinion of the Transfer Agent continuation of such communications
would jeopardize the accuracy and/or integrity of the Fund's records on the
System.
ARTICLE VI
DIVIDENDS AND DISTRIBUTIONS
1. The Fund shall furnish to the Transfer Agent a copy of a resolution
of its Board of Directors, certified by the Secretary or any Assistant
Secretary, either (i) setting forth the date of the declaration of a dividend or
distribution, the date of accrual or payment, as the case may be, thereof, the
record date as of which Shareholders entitled to payment, or accrual, as the
case may be, shall be determined, the amount per Share of such dividend or
distribution, the payment date on which all previously accrued and unpaid
dividends are to be paid, and the total amount, if any, payable to the Transfer
Agent on such payment date, or (ii) authorizing the declaration of dividends and
distributions on a daily or other periodic basis and authorizing the Transfer
Agent to rely on a Certificate setting forth the information described in
subsection (i) of this paragraph.
2. Upon the mail date specified in such Certificate or resolution, as
the case may be, the Fund shall, in the case of a cash dividend or distribution,
cause the Custodian to deposit in an account in the name of the Transfer Agent
on behalf of the Fund an amount of cash, if any, sufficient for the Transfer
Agent to make the payment, as of the mail date, specified in such Certificate or
resolution, as the case may be, to the Shareholders who were of record on the
record date. The Transfer Agent will, upon receipt of any such cash, make
payment of such cash dividends or distributions to the shareholders of record as
of the record date by: (i) mailing a check, payable to the registered
shareholder, to the address of record or dividend mailing address, or (ii)
wiring such amounts to the accounts previously designated by an Approved
Institution, as the case may be. The Transfer Agent shall not be liable for any
improper payments made in good faith and without willful misfeasance, negligence
or reckless disregard of its duties, in accordance with a Certificate or
resolution described in the preceding paragraph. If the Transfer Agent shall not
receive from the Custodian sufficient cash to make payments of any cash dividend
or distribution to all shareholders of the Fund as of the record date, the
Transfer Agent shall, upon notifying the Fund, withhold payment to all
shareholders of record as of the record date until sufficient cash is provided
to the Transfer Agent.
3. It is understood that the Transfer Agent shall in no way be
responsible for the determination of the rate or form of dividends or capital
gain distributions due to the shareholders. It is expressly agreed and
understood that the Transfer Agent is not liable for any loss as a result of
processing a distribution based on information provided in the Certificate that
is incorrect. The Fund agrees to pay the Transfer Agent for any and all costs,
both direct and out-of-pocket expenses, incurred in such corrective work as
necessary to remedy such error.
4. It is understood that the Transfer Agent shall file such appropriate
information returns concerning the payment of dividend and capital gain
distributions with the proper federal, state and local authorities as are
required by law to be filed by the Fund but shall in no way be responsible for
the collection or withholding of taxes due on such dividends or distributions
due to shareholders, except and only to the extent, required by applicable law.
ARTICLE VII
CONCERNING THE FUND
1. The Fund represents to the Transfer Agent that:
(a) It is a corporation duly organized and existing under the
laws of the State of Minnesota.
(b) It is empowered under applicable laws and by its Articles
of Incorporation and By-Laws to enter into and perform this Agreement.
(c) All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
(d) It is an investment company registered under the
Investment Company Act of 1940, as amended.
(e) A registration statement under the Securities Act of 1933,
as amended, with respect to the Shares is effective. The Fund shall notify the
Transfer Agent if such registration statement or any state securities
registrations have been terminated or a stop order has been entered with respect
to the Shares.
2. Each copy of the Articles of Incorporation of the Fund and copies of
all amendments thereto shall be certified by the Secretary of State (or other
appropriate official) of the state of organization, and if such Articles of
Incorporation and/or amendments are required by law also to be filed with a
county or other officer or official body, a certificate of such filing shall be
filed with a certified copy submitted to the Transfer Agent. Each copy of the
By-Laws and copies of all amendments thereto, and copies of resolutions of the
Board of Directors of the Fund, shall be certified by the Secretary of the Fund
under seal.
3. The Fund shall promptly deliver to the Transfer Agent written notice
of any change in the Officers authorized to sign Share Certificates,
notifications or requests, together with a specimen signature of each new
Officer. In the event any Officer 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 issuance of such Share certificates, the
Transfer Agent may issue such Share certificates of the Fund notwithstanding
such death, resignation or removal, and the Fund shall promptly deliver to the
Transfer Agent such approval, adoption or ratification as may be required by
law.
4. It shall be the sole responsibility of the Fund to deliver to the
Transfer Agent the Fund's currently effective Prospectus and, for the purposes
of this Agreement, the Transfer Agent shall not be deemed to have notice of any
information contained in such Prospectus until a reasonable time after it is
actually received by the Transfer Agent.
ARTICLE VIII
CONCERNING THE TRANSFER AGENT
1. The Transfer Agent represents and warrants to the Fund that:
(a) It is a corporation duly organized and existing under the
laws of the State of Delaware.
(b) It is empowered under applicable law and by its Charter
and By-laws to enter into and perform this Agreement.
(c) All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
(d) It is duly registered as a transfer agent under Section
17A of the Securities Exchange Act of 1934, as amended.
2. The Transfer Agent shall not be liable and shall be indemnified in
acting upon any computer tape or electronic data transmission, writing or
document reasonably believed by it to be genuine and to have been signed or made
by an Officer of the Fund or person designated by the Fund and shall not be held
to have any notice of any change of authority of any person until receipt of
written notice thereof from the Fund or such person. It shall also be protected
in processing Share certificates which bear the proper countersignature of the
Transfer Agent and which it reasonably believes to bear the proper manual or
facsimile signature of the Officers of the Fund.
3. The Transfer Agent upon notice to the Fund may establish such
additional procedures, rules and regulations governing the transfer or
registration of Share certificates as it may deem advisable and consistent with
such rules and regulations generally adopted by mutual fund transfer agents.
4. The Transfer Agent shall keep such records as are specified in
Schedule II hereto in the form and manner, and for such period, as it may deem
advisable and is agreeable to the Fund but not inconsistent with the rules and
regulations of appropriate government authorities, in particular Rules 31a-2 and
31a-3 under the Investment Company Act of 1940, as amended. The Transfer Agent
acknowledges that such records are the property of the Fund. The Transfer Agent
may deliver to the Fund from time to time at its discretion, for safekeeping or
disposition by the Fund in accordance with law, such records, papers, documents
accumulated in the execution of its duties as such Transfer Agent, as the
Transfer Agent may deem expedient, other than those which the Transfer Agent is
itself required to maintain pursuant to applicable laws and regulations. The
Fund shall assume all responsibility for any failure thereafter to produce any
record, paper, cancelled Share certificate, or other document so returned, if
and when required. The records specified in Schedule II hereto maintained by the
Transfer Agent pursuant to this paragraph 4, which have not been previously
delivered to the Fund pursuant to the foregoing provisions of this paragraph 4,
shall be considered to be the property of the Fund, shall be made available upon
request for inspection by the officers, employees, and auditors of the Fund, and
records shall be delivered to the Fund upon request and in any event upon the
date of termination of this Agreement, as specified in Article IX of this
Agreement, in the form and manner kept by the Transfer Agent on such date of
termination or such earlier date as may be requested by the Fund.
5. The Transfer Agent shall not be liable for any loss or damage,
including counsel fees, resulting from its actions or omissions to act or
otherwise, except for any loss or damage arising out of its bad faith,
negligence, willful misfeasance, or reckless disregard of its duties under this
agreement.
6a. The Fund shall indemnify and exonerate, save and hold harmless the
Transfer Agent from and against any and all claims (whether with or without
basis in fact or law), demands, expenses (including reasonable attorney's fees)
and liabilities of any and every nature which the Transfer Agent may sustain or
incur or which may be asserted against the Transfer Agent by any person by
reason of or as a result of any action taken or omitted to be taken by any prior
transfer agent of the Fund or as a result of any action taken or omitted to be
taken by the Transfer Agent in good faith and without negligence, reckless
disregard of its duties under this agreement or willful misconduct or in
reliance upon and in conformity with (i) any provision of this Agreement; (ii)
the Prospectus; (iii) any instruction or order including, without limitation,
any computer tape or electronic data transmission reasonably believed by the
Transfer Agent to have been received from an Approved Institution; (iv) any
instrument, order or Share certificate reasonably believed by it to be genuine
and to be signed, countersigned or executed by any duly authorized Officer of
the Fund; (v) any Certificate or other instructions of an Officer; or (vi) any
opinion of legal counsel for the Fund. The Fund shall indemnify and exonerate,
save and hold the Transfer Agent harmless from and against any and all claims
(whether with or without basis in fact or law), demands, expenses (including
reasonable attorney's fees) and liabilities of any and every nature which the
Transfer Agent may sustain or incur or which may be asserted against the
Transfer Agent by any person by reason of or as a result of any action taken or
omitted to be taken by the Transfer Agent in food faith and without negligence,
reckless disregard of its duties under this agreement or willful misconduct in
connection with its appointment or in reliance upon and in conformity with any
law, act, regulation or any judicial or regulatory interpretation of the same
even though such law, act or regulation may thereafter have been altered,
changed, amended or repealed.
6b. The Transfer Agent shall not settle any claim, demand, expense or
liability to which it may seek indemnity pursuant to paragraph 6(a) above (each,
an "Indemnifiable Claim") without the express written consent of an Officer of
the Fund. The Transfer Agent shall notify the Fund within 15 days of receipt of
notification of an Indemnifiable Claim, provided that the failure by the
Transfer Agent to furnish such notification shall not impair its right to seek
indemnification from the Fund unless the Fund is unable to adequately defend the
Indemnifiable Claim as a result of such failure, and further provided, that if
as a result of the Transfer Agent's failure to provide the Fund with timely
notice of the institution of litigation a judgment by default is entered, prior
to seeking indemnification from the Fund the Transfer Agent, at its own cost and
expense, shall open such judgment. The Fund shall have the right to defend any
Indemnifiable Claim at its own expense, provided that such defense shall be
conducted by counsel selected by the Fund and reasonably acceptable to the
Transfer Agent. The Transfer Agent may join in such defense at its own expense,
but to the extent that it shall so desire the Fund shall direct such defense.
The Fund shall not settle any Indemnifiable Claim without the express written
consent of the Transfer Agent if the Transfer Agent determines that such
settlement would have an adverse effect on the Transfer Agent beyond the scope
of this Agreement. In such event, each of the Fund and the Transfer Agent shall
be responsible for their own defense at their own cost and expense, and such
claim shall not be deemed an Indemnifiable Claim hereunder. If the Fund shall
fail or refuse to defend an Indemnifiable Claim, the Transfer Agent may provide
its own defense at the cost and expense of the Fund. Anything in this Agreement
to the contrary notwithstanding, the Fund shall not indemnify the Transfer Agent
against any liability or expense arising out of the Transfer Agent's willful
misfeasance, bad faith, negligence or reckless disregard of its duties and
obligations under this Agreement. The Transfer Agent shall indemnify and hold
the Fund harmless from and against any and all losses, damages, costs, charges,
counsel fees, payments, expenses and liability arising out of or attributable to
any action or failure or omission to act by the Transfer Agent as a result of
the Transfer Agent's lack of good faith, reckless disregard of its duties under
this agreement, negligence or willful misconduct.
7. The Transfer Agent shall not be liable to the Fund with respect to
any redemption draft on which the signature of the drawer is forged and which
the Fund's Custodian or Cash Management bank has advised the Transfer Agent to
honor the redemption; nor shall Transfer Agent be liable for any material
alteration or absence or forgery of any endorsement, it being understood that
the Transfer Agent's sole responsibility with respect to inspecting redemption
drafts is to use reasonable care to verify the drawer's signature against
signatures on file.
8. There shall be excluded from the consideration of whether the
Transfer Agent has been negligent or has breached this Agreement, any period of
time, and only such period of time, during which the Transfer Agent's
performance is materially affected, by reason of circumstances beyond its
control (collectively, "Causes"), including, without limitation (except as
provided below), (a) mechanical breakdowns of equipment (including any
alternative power supply and operating systems software), flood or catastrophe,
acts of God, failures of transportation, communication or power supply, strikes,
lockouts, work stoppages or other similar circumstances.
9. At any time the Transfer Agent may apply to an Officer of the Fund
for written instructions with respect to any matter arising in connection with
the Transfer Agent's duties and obligations under this Agreement, and the
Transfer Agent shall not be liable for any action taken or permitted by it in
good faith in accordance with such written instructions. Such application by the
Transfer Agent for written instructions from an Officer of the Fund may set
forth in writing any action proposed to be taken or omitted by the Transfer
Agent with respect to its duties or obligations under this Agreement and the
date on and/or after which such action shall be taken. The Transfer Agent shall
not be liable for any action taken or omitted in accordance with a proposal
included in any such application on or after the date specified therein unless,
prior to taking or omitting any such action, the Transfer Agent has received
written instructions in response to such application specifying the action to be
taken or omitted. The Transfer Agent may consult counsel of the Fund and shall
be fully protected with respect to anything done or omitted by it in good faith
in accordance with the advice or opinion of counsel to the Fund.
10. The Transfer Agent may issue new Share certificates in place of
certificates represented to have been lost, stolen, or destroyed upon receiving
written instructions from the shareholder accompanied by proof of an indemnity
or surety bond issued by a recognized insurance institution specified by the
Fund or the Transfer Agent. If the Transfer Agent receives written notification
from the shareholder or broker dealer that the certificate issued was never
received, and such notification is made within 30 days of the date of issuance,
the Transfer Agent may reissue the certificate without requiring a surety bond.
The Transfer Agent may also reissue certificates which are represented as lost,
stolen, or destroyed without requiring a surety bond provided that the
notification is in writing and accompanied by an indemnification signed on
behalf of a member firm of the New York Stock Exchange and signed by an officer
of said firm with the signature guaranteed. Notwithstanding the foregoing, the
Transfer Agent will reissue a certificate upon written authorization from an
Officer of the Fund.
11. In case of any requests or demands for the inspection of the
shareholder records of the Fund, the Transfer Agent will endeavor to notify the
Fund promptly and to secure instructions from an Officer as to such inspection.
The Transfer Agent reserves the right, however, to exhibit the shareholder
records to any person whenever it receives an opinion from its counsel that
there is a reasonable likelihood that the Transfer Agent will be held liable for
the failure to exhibit the shareholder records to such person; provided,
however, that in connection with any such disclosure the Transfer Agent shall
promptly notify the Fund that such disclosure has been made or is to be made.
12. At the request of an Officer of the Fund the Transfer Agent will
address and mail such appropriate notices to shareholders as the Fund may
direct.
13. Notwithstanding any of the foregoing provisions of this Agreement,
the Transfer Agent shall be under no duty or obligation to inquire into, and
shall not be liable for:
(a) The legality of the issue or sale of any Shares, the
sufficiency of the amount to be received therefor, or the authority of the
Approved Institution or of the Fund, as the case may be, to request such sale or
issuance;
(b) The legality of a transfer of Shares, or of a redemption
of any Shares, the propriety of the amount to be paid therefor, or the authority
of the Approved Institution or of the Fund, as the case may be, to request such
transfer or redemption;
(c) The legality of the declaration of any dividend by the
Fund, or the legality of the issue of any Shares in payment of any stock
dividend; or
(d) The legality of any recapitalization or readjustment of
Shares.
14. The Transfer Agent shall be entitled to receive and the Fund hereby
agrees to pay to the Transfer Agent for its performance hereunder, including its
performance of the duties and functions set forth in Schedule I hereto, (i) its
reasonable out-of-pocket expenses (including reasonable legal expenses and
attorney's fees) incurred in connection with its performance hereunder and (ii)
such compensation as may be agreed upon in writing from time to time by the
Transfer Agent and the Fund.
15. The Transfer Agent shall have no duties or responsibilities
whatsoever except such duties and responsibilities as are specifically set forth
in this Agreement, and no covenant or obligation shall be implied in this
Agreement against the Transfer Agent.
16. Purchase and Prices of Services.
(a) The Fund will compensate the Transfer Agent for, and
Transfer Agent will provide, beginning on the execution date of this Agreement
and continuing until the termination of this Agreement as provided hereinafter,
the Services set forth in Schedule I.
(b) The current unit prices for the Services are set forth in
Schedule III (the "Schedule III Fee Schedule"). Once in each calendar year, the
Transfer Agent may elect to raise the Schedule III Fees upon ninety (90) days
prior notice to the Fund. Notwithstanding the annual right to raise the Schedule
III Fees, the Transfer Agent may increase prices due to changes in legal or
regulatory requirements subject to the approval of the Fund, which approval
shall not be unreasonably withheld.
17. Billing and Payment.
(a) The Transfer Agent shall bill the Fund as follows: (i)
monthly in arrears for Accounts maintained; and (ii) monthly in advance for
estimated Out-of-Pocket Expenses to be incurred by the Transfer Agent for the
following month. Documentation to support reconciliation of actual Out-of-Pocket
Expenses charges will be provided to the Fund monthly. The Transfer Agent may
from time to time request the Fund to make additional advances when appropriate.
(b) The Fund shall pay the Transfer Agent in immediately
available funds at United Missouri Bank in Kansas City, Missouri within thirty
(30) days of the date of the bill. Any amounts due under this Agreement which
are not paid within said thirty (30) day period shall bear interest at the rate
of one and one-half percent (1 1/2%) per month from such date until paid in
full.
ARTICLE IX
TERMINATION
Either of the parties hereto may terminate this Agreement by giving to
the other party a notice in writing specifying the date of such termination,
which shall be not less than 60 days after the date of receipt of such notice.
In the event such notice is given by the Fund, it shall be accompanied by a copy
of a resolution of the Board of Directors of the Fund, certified by the
Secretary or any Assistant Secretary, electing to terminate this Agreement and
designating the successor transfer agent or transfer agents. In the event such
notice is given by the Transfer Agent, the Fund shall on or before the
termination date, deliver to the Transfer Agent a copy of a resolution of its
Board of Directors certified by the Secretary or any Assistant Secretary
designating a successor transfer agent or transfer agents. In the absence of
such designation by the Fund, the Fund shall upon the date specified in the
notice of termination of this Agreement and delivery of the records maintained
hereunder, be deemed to be its own transfer agent and the Transfer Agent shall
thereby be relieved of all duties and responsibilities pursuant to this
Agreement.
In the event this Agreement is terminated as provided herein, the
Transfer Agent, upon the written request of the Fund, shall deliver the records
of the Fund on electromagnetic media to the Fund or its successor transfer
agent. The Fund shall be responsible to the Transfer Agent for the reasonable
costs and expenses associated with the preparation and delivery of such media.
ARTICLE X
MISCELLANEOUS
1. The Fund agrees that prior to effecting any change in the Prospectus
which would increase or alter the duties and obligations of the Transfer Agent
hereunder, it shall advise the Transfer Agent of such proposed change at least
30 days prior to the intended date of the same, and shall proceed with such
change only if it shall have received the written consent of the Transfer Agent
thereto, which shall not be unreasonably withheld.
2. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Fund shall be sufficiently given if addressed
to the Fund and mailed or delivered to it at its office at the address first
above written, or at such other place as the Fund may from time to time
designate in writing.
3. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Transfer Agent shall be sufficiently given if
addressed to the Transfer Agent and mailed or delivered to the Secretary at 120
South LaSalle, Chicago, IL, with a copy to the President at 811 Main Street,
Kansas City, MO, or at such other place as the Transfer Agent may from time to
time designate in writing.
4. This Agreement may not be amended or modified in any manner except
by a written agreement executed by both parties with the formality of this
Agreement.
5. This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns. This Agreement shall not be
assignable by either party without the written consent of the other party,
except that the Transfer Agent may assign this Agreement to a corporate
affiliate with advance written notice to the Fund.
6. This Agreement shall be governed by and construed in accordance with
the laws of the State of Illinois.
7. This Agreement may be executed in any number of counterparts each of
which shall be deemed to be an original; but such counterparts shall, together,
constitute only one instrument.
8. The provisions of this Agreement are intended to benefit only the
Transfer Agent and the Fund, and no rights shall be granted to any other person
by virtue of this Agreement.
9. (a) The Transfer Agent will endeavor to assist in resolving
shareholder inquiries and errors relating to the period during which prior
transfer agents acted as such for the Fund. Any such inquiries or errors which
cannot be expediently resolved by the Transfer Agent will be referred to the
Fund.
(b) The Transfer Agent shall only be responsible for the safekeeping
and maintenance of transfer agency records, cancelled certificates and
correspondence of the Fund created or produced prior to the time of conversion
which are under its control and acknowledged in a writing to the Fund to be in
its possession. Any expenses or liabilities incurred by the Transfer Agent as a
result of shareholder inquiries, regulatory compliance or audits related to such
records and not caused as a result of Transfer Agent's bad faith, willful
malfeasance or negligence shall be the responsibility of the Fund as provided in
Article VIII herein.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective corporation officer, thereunto duly authorized and
their respective corporate seals to be hereunto affixed, as the day and year
first above written.
SUPERVISED SERVICE COMPANY, INC. FIRST AMERICAN FUNDS, INC.
By: /s/ Thomas M. Blodgett By: /s/ Kathryn L. Stanton
(Signature) (Signature)
Thomas M. Blodgett Kathryn L. Stanton
----------------------------------- --------------------------
(Name) (Name)
SVP Vice President
(Title) (Title)
SCHEDULE I
DESCRIPTION OF SERVICES
In consideration of the fees to be paid in such manner and at such
times as Fund and Transfer Agent may agree, Transfer Agent will provide the
services set forth below:
Examine and Process New Accounts, Subsequent Payments, Liquidations,
Exchanges, Telephone Transactions, Check Redemptions, Automatic Withdrawals,
Certificate Issuance, Wire Order Trades, Dividends, Dividend Statements, Dealer
Statements.
DAILY ACTIVITY
Maintain the following shareholder information in such a manner as the
Transfer Agent shall determine:
Name and Address, including Zip Code
Balance of Uncertificated Shares
Balance of Certificated Shares
Certificate number, number of shares, issuance date of each certificate
outstanding and cancellation date for each certificate date for each
certificate no longer outstanding, if issued
Balance of dollars available for redemption
Dividend code (daily accrual, monthly reinvest, monthly cash or
quarterly cash)
Type of account code
Establishment date indicating the date an account was opened, carrying
forward pre-conversion data as available
Original establishment date for accounts opened by exchange
W-9 withholding status and periodic reporting
State of residence code
Social Security or taxpayer identification number, and indication of
certification
Historical transactions on the account for the most recent 18 months,
or other period as mutually agreed to from time-to-time
Indication as to whether phone transactions can be accepted for this
account. Beneficial owner code, i.e. male, female, joint tenant, etc.
An alternate or "secondary" account number issued by a dealer (or bank,
etc.) to a customer for use, inquiry and transaction input by "remote
accessors"
FUNCTIONS
Answer investor and dealer telephone and/or written inquiries, except
those concerning Fund policy, or requests for investment advice which
will be referred to the Fund, or those which the Fund chooses to answer
Deposit Fund share certificates into accounts upon receipt of
instructions from the investor or other authorized person, if issued
Examine and process transfers of shares insuring that all transfer
requirements and legal documents have been supplied
Process and confirm address changes
Process standard account record changes as required, i.e. Dividend
Codes, etc.
Microfilm source documents for transactions, such as account
applications and correspondence
Perform backup withholding for those accounts which federal government
regulations indicate is necessary
Perform withholdings on liquidations, if applicable, for employee
benefit plans. Prepare and mail 5498s and 1099R's
Solicit missing taxpayer identification numbers
Provide remote access inquiry to Fund records via Fund supplied
hardware (Fund responsible for connection line and monthly fee)
REPORTS PROVIDED
Daily Journals Reflecting all shares and dollar activity for
the previous day
Blue Sky Report Supply information monthly for Fund's
preparation of Blue Sky Reporting
N-SAR Report Supply monthly correspondence, redemption
and liquidation information for use in fund's
N-SAR Report
Additionally, monthly average daily balance reports will be provided at
the Fund's request to the Fund at no charge.
Prepare and mail copies of summary statements to dealers and investment
advisers
Generate and mail confirmation statements for financial transactions
DIVIDEND ACTIVITY
Reinvest or pay in cash including reinvesting in other funds within the
fund group serviced by the Transfer Agent as described in each Fund
Prospectus
Distribute capital gains simultaneously with income dividends
DEALER SERVICES
Prepare and mail confirmation statements to dealers daily
Prepare and mail copies of statements to dealers, same frequency as
investor statements
ANNUAL MEETINGS
Assist Fund in obtaining a qualified service to: address and mail
proxies and related material, tabulate returned proxies and supply
daily reports when sufficient proxies have been received
Prepare certified list of stockholders, hard copy or microform
PERIODIC ACTIVITIES
Mail transaction confirmation statements daily to investors
Address and mail four (4) periodic financial reports (material must be
adaptable to Transfer Agent's mechanical equipment as reasonably
specified by the Transfer Agent)
Mail periodic statement to investors
Compute, prepare and furnish all necessary reports to Governmental
authorities: Forms 1099R, 1099DIV, 1099B, 1042 and 1042S
Enclose various marketing material as designated by the Fund in
statement mailings, i.e. monthly and quarterly statements (material
must be adaptable to mechanical equipment as reasonably specified by
the Transfer Agent)
SCHEDULE II
RECORDS MAINTAINED BY TRANSFER AGENT
- -- Account applications
- -- Cancelled certificates plus stock powers and supporting documents
- -- Checks including check registers, reconciliation records, any
adjustment records and tax withholding documentation
- -- Indemnity bonds for replacement of lost or missing stock certificates
and checks
- -- Liquidation, redemption, withdrawal and transfer requests including
stock powers, signature guarantees and any supporting documentation
Transfer Agency Agreement
between
SUPERVISED SERVICE COMPANY, INC.
and
First American Funds, Inc.
Fee Schedule
<TABLE>
<CAPTION>
Declared Dividend Daily Dividend Accrual
Portfolio Annual Fee Per Portfolio Fee Per
Shareholder Account Shareholder Account
------------------- -------------------
BASE TRANSFER AGENCY SERVICES
<S> <C> <C>
System Access, Portfolios $7.50 per Account plus $14.50 per Account plus
Control and Reconcilement, Out-of-Pocket Expenses Out-of-Pocket Expenses
Statement Processing
ADDITIONAL SERVICE - ACCOUNT
ACTIVITY PROCESSING
Account Establishment, Forms $3.50 per Account plus $3.50 per Account plus
Processing, Trade Processing, Out-of-Pocket Expenses Out-of-Pocket Expenses
Maintenance
ADDITIONAL SERVICE -
SHAREHOLDER SERVICING
Customer Service Telephones, $4.50 per Account plus $4.50 per Account plus
Correspondence Out-of-Pocket Expenses Out-of-Pocket Expenses
</TABLE>
The account fee is an annualized amount, prorated on a monthly basis for billing
purposes.
Minimum Transfer Agent Fee - $750/month per Portfolio, Class or other
sub-division, no introductory waiver period.
Closed Account Fee - $.10 a month per closed account.
EXHIBIT 9(b)
SUPERVISED SERVICE COMPANY, INC.
BOSTON CHICAGO KANSAS CITY
April 4, 1995 VIA AIRBORNE EXPRESS
First American Funds, Inc.
Attn: David G. Lee
680 E. Swedesford Road
Wayne, PA 19087-1658
Dear Mr. Lee:
As we have advised you, Supervised Service Company, Inc. (SSC) has entered an
agreement to sell substantially all of its assets, including its mutual fund
transfer agency business to DST Systems, Inc. (DST). DST has agreed to assume
and perform all of SSC's obligations under the Transfer Agency Agreement between
First American Funds, Inc. and SSC dated March 31, 1994, (the "Agreement"). All
of the terms and conditions of your agreement, including the fee schedule, will
remain in effect in accordance with the Agreement.
We believe this transaction will ensure continued excellent service to you and
your shareholders. Please indicate your consent to the assignment of your
agreement to DST by executing and returning the enclosed copy of this letter in
the return Airborne Express envelope provided.
We would appreciate your prompt response. If you have questions, please contact
either of us at the numbers listed below.
Supervised Service Company, Inc. DST Systems, Inc.
By /s/ Robert W. Ciarlelli By /s/ Thomas A. McCullough
Robert W. Ciarlelli Thomas A. McCullough
(816) 292-6206 (816) 435-8656
First American Funds, Inc. hereby *This consent is subject
consents to the assignment of the Agreement to to ratification by the
DST Systems, Inc. as described above. Board of Trustees of the
Trust.
By /s/ David Lee
EXHIBIT (9)(c)
ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of this 1st day of January, 1995, by and
between FIRST AMERICAN FUNDS, INC. a Minnesota corporation (the "Fund"), and SEI
Financial Management Corporation (the "Administrator"), a Delaware corporation.
WHEREAS, the Fund is an open-end diversified management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), consisting of several series of shares of Common Stock; and
WHEREAS, the Fund desires the Administrator to provide, and the
Administrator is willing to provide, management and administrative services to
such portfolios of the Fund as the Fund and the Administrator may agree on
("Portfolios") and as listed on the schedules attached hereto ("Schedules") and
made a part of this Agreement, on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Fund and the Administrator hereby agree as follows:
ARTICLE 1. Retention of the Administrator. The Fund hereby retains the
Administrator to act as the administrator of the Portfolios and to furnish the
Portfolios with the management and administrative services as set forth in
Article 2 below. The Administrator hereby accepts such employment to perform the
duties set forth below.
The Administrator shall, for all purposes herein, be deemed to be an
independent contractor and, unless otherwise expressly provided or authorized,
shall have no authority to act for or represent the Fund in any way and shall
not be deemed an agent of the Fund.
ARTICLE 2. Administrative Services. The Administrator shall perform or
supervise the performance by others of other administrative services in
connection with the operations of the Portfolios, and, on behalf of the Fund,
will investigate, assist in the selection of and conduct relations with
custodians, depositories, accountants, legal counsel, underwriters, brokers and
dealers, corporate fiduciaries, insurers, banks and persons in any other
capacity deemed to be necessary or desirable for the Portfolios' operations. The
Administrator shall provide the Directors of the Fund with such reports
regarding investment performance as they may reasonably request but shall have
no responsibility for supervising the performance by any investment adviser or
sub-adviser of its responsibilities.
The Administrator shall provide the Fund with regulatory reporting,
fund accounting and related portfolio accounting services, all necessary office
space, equipment, personnel, compensation and facilities (including facilities
for Shareholders' and Directors' meetings) for handling the affairs of the
Portfolios and such other services as the Administrator shall, from time to
time, determine to be necessary to perform its obligations under this Agreement.
In addition, at the request of the Board of Directors, the Administrator shall
make reports to the Fund's Directors concerning the performance of its
obligations hereunder.
Without limiting the generality of the foregoing, the Administrator
shall:
(a) calculate contractual Fund expenses and control all
disbursements for the Fund, and as appropriate compute the
Fund's yields, total return, expense ratios, portfolio
turnover rate and, if required, portfolio average
dollar-weighed maturity;
(b) assist Fund counsel with the preparation of prospectuses,
statements of additional information, registration statements,
proxy materials;
(c) prepare such reports, applications and documents (including
reports regarding the sale and redemption of Shares as may be
required in order to comply with Federal and state securities
law) as may be necessary or desirable to register the Fund's
shares with state securities authorities, monitor sale of Fund
shares for compliance with state securities laws and file with
the appropriate state securities authorities the registration
statements and reports for the Fund and the Fund's shares and
all amendments thereto, as may be necessary or convenient to
register and keep effective the Fund and the Fund's shares
with state securities authorities to enable the Fund to make a
continuous offering of its shares;
(d) develop and prepare communications to shareholders, including
the annual report to shareholders, coordinate mailing
prospectuses, notices, proxy statements, proxies and other
reports to Fund shareholders, and supervise and facilitate the
solicitation of proxies solicited by the Fund for all
shareholder meetings, including tabulation process for
shareholder meetings;
(e) prepare, negotiate and administer contracts on behalf of the
Fund with, among others, the Fund's investment adviser,
distributor, custodian, and transfer agent;
(f) maintain the Fund's general ledger and prepare the Fund's
financial statements, including expense accruals and payments,
determine the net asset value of the Fund's assets and of the
Fund's shares, and supervise the Fund's transfer agent with
respect to the payment of dividends and other distributions to
shareholders;
(g) calculate performance data of the Fund and its portfolios for
dissemination to information services covering the investment
company industry;
(h) coordinate and supervise the preparation and filing of the
Fund's tax returns;
(i) examine and review the operations and performance of the
various organizations providing services to the Fund or any
Portfolio of the Fund, including, without limitation, the
Fund's investment adviser, distributor, custodian, transfer
agent, outside legal counsel and independent public
accountants, and at the request of the Board of Directors,
report to the Board on the performance of organizations;
(j) assist with the layout and printing of publicly disseminated
prospectuses and assist with and coordinate layout and
printing of the Fund's semi-annual and annual reports to
shareholders;
(k) provide internal legal and administrative services as
requested by the Fund from time to time;
(l) assist with the design, development and operation of the Fund,
including new portfolio and class investment objectives,
policies and structure;
(m) provide individuals reasonably acceptable to the Fund's Board
of Directors for nomination, appointment or election as
officers of the Fund, who will be responsible for the
management of certain of the Fund's affairs as determined by
the Fund's Board of Directors;
(n) advise the Fund and its Board of Directors on matters
concerning the Fund and its affairs;
(o) obtain and keep in effect fidelity bonds and directors and
officers/errors and omissions insurance policies for the Fund
in accordance with the requirements of Rules 17g-1 and
17d-1(7) under the 1940 Act as such bonds and policies are
approved by the Fund's Board of Directors;
(p) monitor and advise the Fund and its Portfolios on their
registered investment company status under the Internal
Revenue Code of 1986, as amended;
(q) perform all administrative services and functions of the Fund
and each Portfolio to the extent administrative services and
functions are not provided to the Fund or such Portfolio
pursuant to the Fund's or such Portfolio's investment advisory
agreement, distribution agreement, custodian agreement and
transfer agent agreement;
(r) furnish advice and recommendations with respect to other
aspects of the business and affairs of the Portfolios as the
Fund and the Administrator shall determine desirable; and
(s) prepare and file with the SEC the semi-annual report for the
Fund on Form N-SAR and all required notices pursuant to Rule
24f-2.
Also, the Administrator will perform other services for the Fund as agreed from
time to time at the request of the Board of Directors, including, but not
limited to performing internal audit examinations; mailing the annual reports of
the Portfolios; preparing an annual list of shareholders; and mailing notices of
shareholders' meetings, proxies and proxy statements, for all of which the Fund
will pay the Administrator's out-of-pocket expenses.
ARTICLE 3. Allocation of Charges and Expenses.
(A) The Administrator. The Administrator shall furnish at its own
expense the executive, supervisory and clerical personnel necessary to perform
its obligations under this Agreement. The Administrator shall also provide the
items which it is obligated to provide under this Agreement, and shall pay all
compensation, if any, of officers of the Fund as well as all Directors of the
Fund who are affiliated persons of the Administrator or any affiliated
corporation of the Administrator; provided, however, that unless otherwise
specifically provided, the Administrator shall not be obligated to pay the
compensation of any employee of the Fund retained by the Directors of the Fund
to perform services on behalf of the Fund.
(B) The Fund. The Fund assumes and shall pay or cause to be paid all
other expenses of the Fund not otherwise allocated herein, including, without
limitation, organizational costs, taxes, expenses for legal and auditing
services, the expenses of preparing (including typesetting), printing and
mailing reports, prospectuses, statements of additional information, proxy
solicitation material and notices to existing Shareholders, all expenses
incurred in connection with issuing and redeeming Shares, the costs of custodial
services, the cost of initial and ongoing registration of the Shares under
Federal and state securities laws, fees and out-of-pocket expenses of Directors
who are not affiliated persons of the Administrator or the investment adviser to
the Fund or any affiliated corporation of the Administrator or the investment
Adviser, insurance, interest, brokerage costs, litigation and other
extraordinary or nonrecurring expenses, and all fees and charges of investment
advisers to the Fund.
ARTICLE 4. Compensation of the Administrator.
(A) Administration Fee. For the services to be rendered, the facilities
furnished and the expenses assumed by the Administrator pursuant to this
Agreement, the Fund shall pay to the Administrator compensation at an annual
rate specified in the Schedules. Such compensation shall be calculated and
accrued daily, and paid to the Administrator monthly. The Fund shall also
reimburse the Administrator for its reasonable out-of-pocket expenses, including
the travel and lodging expenses incurred by officers and employees of the
Administrator in connection with attendance at Board meetings.
If this Agreement becomes effective subsequent to the first day of a
month or terminates before the last day of a month, the Administrator's
compensation for that part of the month in which this Agreement is in effect
shall be prorated in a manner consistent with the calculation of the fees as set
forth above. Payment of the Administrator's compensation for the preceding month
shall be made promptly.
(B) Compensation from Transactions. The Fund hereby authorizes any
entity or person associated with the Administrator which is a member of a
national securities exchange to effect any transaction on the exchange for the
account of the Fund which is permitted by Section 11 (a) of the Securities
Exchange Act of 1934 and Rule 11a2-2(T) thereunder, and the Fund hereby consents
to the retention of compensation for such transactions in accordance with Rule
11a2-2(T)(a)(2)(iv).
(C) Survival of Compensation Rates. All rights of compensation under
this Agreement for services performed as of the termination date shall survive
the termination of this Agreement.
ARTICLE 5. Limitation of Liability of the Administrator. The duties of
the Administrator shall be confined to those expressly set forth herein, and no
implied duties are assumed by or may be asserted against the Administrator
hereunder. The Administrator shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any investment or for any act or
omission in carrying out its duties hereunder, except a loss resulting from
willful misfeasance, bad faith or negligence in the performance of its duties,
or by reason of reckless disregard of its obligations and duties hereunder,
except as may otherwise be provided under provisions of applicable law which
cannot be waived or modified hereby. (As used in this Article 7, the term
"Administrator" shall include directors, officers, employees and other corporate
agents of the Administrator as well as that corporation itself.)
So long as the Administrator acts in good faith and with due diligence
and without negligence, the Fund assumes full responsibility and shall indemnify
the Administrator and hold it harmless from and against any and all actions,
suits and claims, whether groundless or otherwise, and from and against any and
all losses, damages, costs, charges, reasonable counsel fees and disbursements,
payments, expenses and liabilities (including reasonable investigation expenses)
arising directly or indirectly out of said administration, transfer agency and
dividend disbursing relationships to the Fund or any other service rendered to
the Fund hereunder. The indemnity and defense provisions set forth herein shall
indefinitely survive the termination of this Agreement.
The rights hereunder shall include the right to reasonable advances of
defense expenses in the event of any pending or threatened litigation with
respect to which indemnification hereunder may ultimately be merited. In order
that the indemnification provision contained herein shall apply, however, it is
understood that if in any case the Fund may be asked to indemnify or hold the
Administrator harmless, the Fund shall be fully and promptly advised of all
pertinent facts concerning the situation in question, and it is further
understood that the Administrator will use all reasonable care to identify and
notify the Fund promptly concerning any situation which presents or appears
likely to present the probability of such a claim for indemnification against
the Fund, but failure to do so in good faith shall not affect the rights
hereunder.
The Fund shall be entitled to participate at its own expense or, if it
so elects, to assume the defense of any suit brought to enforce any claims
subject to this indemnity provision. If the Fund elects to assume the defense of
any such claim, the defense shall be conducted by counsel chosen by the Fund and
satisfactory to the Administrator, whose approval shall not be unreasonably
withheld. In the event that the Fund elects to assume the defense of any suit
and retain counsel, the Administrator shall bear the fees and expenses of any
additional counsel retained by it. If the Fund does not elect to assume the
defense of a suit, it will reimburse the Administrator for the reasonable fees
and expenses of any counsel retained by the Administrator.
The Administrator may apply to the Fund at any time for instructions
and may consult counsel for the Fund or its own counsel and with accountants and
other experts with respect to any matter arising in connection with the
Administrator's duties, and the Administrator shall not be liable or accountable
for any action taken or omitted by it in good faith in accordance with such
instruction or with the opinion of such counsel, accountants or other experts.
Also, the Administrator shall be protected in acting upon any document
which it reasonably believes to be genuine and to have been signed or presented
by the proper person or persons. Nor shall the Administrator be held to have
notice of any change of authority of any officers, employee or agent of the Fund
until receipt of written notice thereof from the Fund.
ARTICLE 6. Activities of the Administrator. The services of the
Administrator rendered to the Fund are not to be deemed to be exclusive. The
Administrator is free to render such services to others and to have other
businesses and interests. It is understood that Directors, officers, employees
and Shareholders of the Fund are or may be or become interested in the
Administrator, as directors, officers, employees and shareholders or otherwise
and that directors, officers, employees and shareholders of the Administrator
and its counsel are or may be or become similarly interested in the Fund, and
that the Administrator may be or become interested in the Fund as a Shareholder
or otherwise.
ARTICLE 7. Duration of this Agreement. The Term of this Agreement shall
be as specified in the Schedules.
This Agreement shall not be assignable by either party without the
written consent of the other party.
ARTICLE 8. Amendments. This Agreement may be amended by the parties
hereto only if such amendment is specifically approved (i) by the vote of a
majority of the Directors of the Fund, and (ii) by the vote of a majority of the
Directors of the Fund who are not parties to this Agreement or interested
persons of any such party, cast in person at a Board of Directors meeting called
for the purpose of voting on such approval.
For special cases, the parties hereto may amend such procedures set
forth herein as may be appropriate or practical under the circumstances, and the
Administrator may conclusively assume that any special procedure which has been
approved by the Fund does not conflict with or violate any requirements of its
Charter or then current prospectuses, or any rule, regulation or requirement of
any regulatory body.
ARTICLE 9. Certain Records. The Administrator shall maintain customary
records in connection with its duties as specified in this Agreement. Any
records required to be maintained and preserved pursuant to Rules 31a-1 and
31a-2 under the 1940 Act which are prepared or maintained by the Administrator
on behalf of the Fund shall be prepared and maintained at the expense of the
Administrator, but shall be the property of the Fund and will be made available
to or surrendered promptly to the Fund on request.
In case of any request or demand for the inspection of such records by
another party, the Administrator shall notify the Fund and follow the Fund's
instructions as to permitting or refusing such inspection; provided that the
Administrator may 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, unless
(in cases involving potential exposure only to civil liability) the Fund has
agreed to indemnify the Administrator against such liability.
ARTICLE 10. Definitions of Certain Terms. The terms "interested person"
and "affiliated person," when used in this Agreement, shall have the respective
meanings specified in the 1940 Act and the rules and regulations thereunder,
subject to such exemptions as may be granted by the Securities and Exchange
Commission.
ARTICLE 11. Notice. Any notice required or permitted to be given by
either party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice to the
other party at the last address furnished by the other party to the party giving
notice: if to the Fund, at c/o Kevin P. Robins, General Counsel, SEI Financial
Management Corporation, 680 East Swedesford Road, Wayne, PA 19087; and to its
Secretary at the following address: Michael J. Radmer, Esq., Dorsey & Whitney,
220 South Sixth Street, Minneapolis, MN 55402-1498; and if to the Administrator
at 680 East Swedesford Road, Wayne, PA 19087-1658.
ARTICLE 12. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Maryland and the applicable provisions
of the 1940 Act. To the extent that the applicable laws of the State of
Minnesota, or any of the provisions herein, conflict with the applicable
provisions of the 1940 Act, the latter shall control.
ARTICLE 13. Multiple Originals. 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 executed and delivered this
Agreement as of the day and year first above written.
FIRST AMERICAN FUNDS, INC.
By: /s/ Kathryn L. Stanton
Attest: /s/ Richard Shoch
SEI FINANCIAL MANAGEMENT CORPORATION
By: /s/ Kathryn L. Stanton
Attest: /s/ Richard Shoch
SCHEDULE
TO THE ADMINISTRATION AGREEMENT
DATED AS OF JANUARY 1, 1995
BETWEEN
FIRST AMERICAN FUNDS, INC.
AND
SEI FINANCIAL MANAGEMENT CORPORATION
Portfolios: This Agreement shall apply to all Portfolios of First American
Funds, Inc., either now or hereafter created. The current portfolios
of First American Investment Funds, Inc. are set forth below: Money,
Institutional Money, Institutional Government, CT Government and CT
Treasury (collectively, the "Portfolios").
Fees: Pursuant to Article 6, Section A, the Fund shall pay the
Administrator compensation for services rendered to the Portfolios
at an annual rate, which is calculated daily and paid monthly, at a
maximum administrative fee equal to (i) .07% of each Portfolio's
average daily net assets until the aggregate net assets of all First
American funds exceed $8 billion and (ii) .055% of each Portfolio's
average daily net assets to the extent that the aggregate net assets
of all First American funds exceed $8 billion; provided, however,
that in no event shall the annual administrative fee for any
Portfolio be less than $50,000.
The parties hereby confirm that the $50,000 per annum administrative
fee is to be applied to each Portfolio as a whole, and not to
separate classes of shares within the portfolios.
Term: Pursuant to Article 7, the term of this Agreement shall commence on
January 1, 1995 and shall remain in effect through December 31, 1998
("Initial Term"). This Agreement shall continue in effect for
successive periods of 2 years after the Initial Term, unless
terminated by either party on not less than 90 days prior written
notice to the other party. In the event of a material breach of this
Agreement by either party, the non- breaching party shall notify the
breaching party in writing of such breach and upon receipt of such
notice, the breaching party shall have 45 days to remedy the breach
or the nonbreaching party may immediately terminate this Agreement.
EXHIBIT (10)(a)
DORSEY & WHITNEY
2200 FIRST BANK PLACE EAST
MINNEAPOLIS, MINNESOTA 55402
First American Money Fund, Inc.
3033 Excelsior Boulevard
Minneapolis, Minnesota 55416
Gentlemen:
Reference is made to the Registration Statement on Form N-1 (File No.
2-74747) which you have filed with the Securities and Exchange Commission
pursuant to the Securities Act of 1933 for the purpose of registering for sale
by First American Money Fund, Inc. (the "Fund") of an indefinite number of
shares of the Fund's Common Stock, par value $.01 per share.
We are familiar with the proceedings to date with respect to the
proposed sale by the Fund, and have examined such records, documents and matters
of law and have satisfied ourselves as to such matters of fact as we consider
relevant for the purposes of this opinion.
We are of the opinion that:
(a) The Fund is a legally organized corporation under Minnesota
law.
(b) The shares of Common Stock to be sold by the Fund will be
legally issued, fully paid and nonassessable when issued and
sold upon the terms and in the manner set forth in said
Registration Statement of the Fund.
We consent to the reference to this firm under the caption "Custodian
and Transfer Agent; Counsel; Accountants" in the Prospectus and to the use of
this opinion as an exhibit to the Registration Statement.
Dated: January 26, 1982
Very truly yours,
/s/ Dorsey & Whitney
DORSEY & WHITNEY
EXHIBIT (10)(b)
FIRST BANK SYSTEM, INC.
1400 FIRST NATIONAL BANK BUILDING
MINNEAPOLIS, MINNESOTA 55480
November 5, 1981
FBS Investment Services, Inc.
1200 First Bank Place East
Minneapolis, Minnesota 55402
First National Bank of Minneapolis
First Bank Place East
Minneapolis, Minnesota 55480
Gentlemen:
I am Associate General Counsel of First Bank System, Inc., the sole shareholder
of FBS Investment Services, Inc. and the 99.75% majority shareholder of First
National Bank of Minneapolis.
In connection with the proposed engagement of FBS Investment Services, Inc. as
Investment Advisor by First American Money Fund, Inc. (the "Fund") an open-end
diversified management investment company, and the engagement by FBS Investment
Services, Inc. of the First National Bank of Minneapolis as a Subadvisor, I have
reviewed certain pertinent and relevant documents, including the following:
1. The Registration Statement on Form N-1 filed with the
Securities and Exchange Commission on behalf of the Fund,
including the prospectus
2. The Investment Advisory Agreement between the Fund and FBS
Investment Services, Inc.;
3. The Subadvisory Agreement between FBS Investment Services,
Inc. and the First National Bank of Minneapolis; and
4, The Sponsor and Administration Agreement between First
American Money Fund, Inc. and American Hardware Mutual
Insurance Company; and
Based upon my examination of said documents, it is my opinion that neither FBS
Investment Services, Inc. nor First National Bank of Minneapolis are precluded
from performing the services for the Fund as contemplated in the Prospectus
contained as part of the Registration Statement provided that the following
conditions are met:
1. Neither First Bank System, Inc. nor any of its affiliated or
subsidiary organizations including FBS Investment Services,
Inc. and First National Bank of Minneapolis, may be involved
in the distribution of the shares of the Fund, such functions
to be performed solely by American Hardware Mutual Insurance
Company or its successors as described in the Sponsor and
Administration Agreement and the Registration Statement;
2. Neither First Bank System, Inc. nor any of its affiliated or
subsidiary organizations may purchase for their own account
securities of the Fund;
3. Neither First Bank system, Inc. nor any of its affiliated or
subsidiary organizations may purchase, in their sole
discretion, any securities of the Fund in a fiduciary
capacity;
4. Neither First Bank system, Inc. nor any of its affiliated or
subsidiary organizations may extend credit to the Fund; and
5. Neither First Bank System, Inc. nor any of its affiliated or
subsidiary organizations may accept securities of the Fund as
collateral for the loan for the purpose of purchasing
securities for the Fund.
You should be aware that as subsidiaries of a bank holding company you are
subject to the jurisdiction of the Board of Governors of the Federal Reserve
System and future changes in federal or state statutes, or regulations
promulgated thereunder, relating to the permissible activities of banks and
nonbanking subsidiaries of bank holding companies, as well as future judicial or
administrative decisions and interpretations of present and future statutes and
regulations, might prevent you from continuing in Investment Advisor or
subadvisor capacities contemplated herein and in the Prospectus contained as
part of the Regulation Statement.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement of the Company and to the reference to be contained under the heading
"Investment Advisor, Subadvisor and Sponsor" appearing therein.
Sincerely,
/s/ William N. Koster
William N. Koster
EXHIBIT 11(a)
KPMG Peat Marwick LLP
4200 Norwest Center
90 South Seventh Street
Minneapolis, MN 55402
Independent Auditors' Consent
The Board of Directors
First American Funds, Inc.:
We consent to the use of our report dated November 3, 1995 incorporated by
reference herein and to the references to our Firm under the headings
"FINANCIAL HIGHLIGHTS" in Part A and "Custodian; Transfer Agent; Counsel;
Accountants" in Part B of the Registration Statement.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Minneapolis, Minnesota
January 22, 1996
EXHIBIT (11)(b)
FIRST BANK SYSTEM, INC.
1200 FIRST BANK PLACE EAST
MINNEAPOLIS, MINNESOTA 55480
February 6, 1985
FBS Investment Services, Inc.
1200 First Bank Place East
Minneapolis, Minnesota 55402
First National Bank of Minneapolis
First Bank Place East
Minneapolis, Minnesota 55480
Gentlemen:
I am Corporate Counsel of First Bank System, Inc., the sole shareholder
of FBS Investment Services, Inc. and the 99.75% majority shareholder of First
National Bank of Minneapolis.
In connection with the engagement of FBS Investment Services, Inc. as
Investment Advisor by First American Money Fund, Inc. (the "Fund"), an open-end
diversified management investment company, and the engagement of FBS Investment
Services, Inc. of the First National Bank of Minneapolis as a Subadvisor, I have
reviewed certain pertinent and relevant documents, including the following:
1. Post-Effective Amendment No. 4 to the Registration Statement
on Form N-1A filed with the Securities and Exchange Commission
("SEC") on behalf of the Fund;
2. The Fund's definitive Prospectus and Statement of Additional
Information dated February 1, 1985, to be filed with the SEC
pursuant to rule 497;
3. The Investment Advisory Agreement between the Fund and FBS
Investment Services, Inc. dated January 30, 1985;
4. The Subadvisory Agreement between FBS Investment Services,
Inc. and the First National Bank of Minneapolis dated January
30, 1985;
5. The Sponsor, Administrator and Underwriter Agreement between
the Fund and Dougherty, Dawkins, Strand & Yost, Inc. dated
January 30, 1985; and
6. The Fund's Plan of Distribution pursuant to Rule 12b-1 dated
January 30, 1985.
Based on my examination of said documents, it is my opinion that
neither FBS Investment Services, Inc. nor First National Bank of Minneapolis are
precluded from performing the services for the Fund or complying with any of the
other terms and conditions contemplated in the Prospectus and Statement of
Additional Information (including, without limitation, reimbursing Dougherty,
Dawkins, Strand & Yost, Inc. for a portion of any amounts it pays to brokers,
dealers and administrators pursuant to the Fund's Plan of Distribution) provided
that the following conditions are met:
1. Neither First Bank System, Inc. nor any of its affiliated or
subsidiary organizations including FBS Investment Services,
Inc. and First National Bank of Minneapolis, may be involved
in the distribution of the shares of the Fund, such functions
to be performed solely by Dougherty, Dawkins, Strand & Yost,
Inc., or its successors as described in the Sponsor,
Administrator and Underwriter Agreement and the Registration
Statement;
2. Neither First Bank System, Inc. nor any of its affiliated or
subsidiary organizations may purchase for their own account
securities of the Fund;
3. Neither First Bank System, Inc. nor any of its affiliated or
subsidiary organizations may purchase, in their sole
discretion, any securities of the Fund in a fiduciary
capacity;
4. Neither First Bank System, Inc. nor any of its affiliated or
subsidiary organizations may extend credit to the Fund; and
5. Neither First Bank System, Inc. nor any of its affiliated or
subsidiary organizations may accept securities of the Fund as
collateral for the loan for the purpose of purchasing
securities for the Fund.
You should be aware that as subsidiaries of a bank holding company you
are subject to the jurisdiction of the Board of Governors of the Federal Reserve
System and future changes in federal or state statutes, or regulations
promulgated thereunder, relating to the permissible activities of banks and
nonbanking subsidiaries of bank holding companies, as well as future judicial or
administrative decisions and interpretations of present and future statutes and
regulations, might prevent you from continuing in Investment Advisor or
Subadvisor capacities contemplated herein and in the Prospectus and Statement of
Additional Information.
I hereby consent to the reference to this opinion in the Prospectus of
the Fund, under the heading "General Information" appearing therein.
Sincerely,
/s/ Melissa Fogelberg
Melissa Fogelberg
EXHIBIT 11(c)
MEMORANDUM
TO: Mr. Harvey N. Daniels, President
First American Funds, Inc.
DATE: November 25, 1991
SUBJECT: First Bank National Association
FBS Investment Services, Inc.
You asked us to advise you as to whether or not FBS Investment
Services, Inc. ("ISI"), a wholly owned broker-dealer subsidiary of First Bank
National Association )"FBNA"), may enter into the attached Shareholder Services
Agreement (the "Agreement") with SECURA Investments, Inc. ("SECURA"), which we
understand is the sponsor and distributor of First American Funds, Inc. (the
"Company") and which we assume is unaffiliated with FBNA. For the reasons that
follow, it appears that the services of the type described in the Agreement have
been previously approved by the Office of the Comptroller of the Currency (the
"OCC") for national banks and their operating subsidiaries.
A. OCC Precedents Involving Mutual Fund Activities
First, in OCC Interpretive Letter No. 332 (March 8, 1985) (copy
attached), the OCC permitted a national bank to make automatic purchases and
sales (on an agency basis) of the shares of certain non-affiliated tax-exempt
mutual funds using one master account for each fund and separate subaccounts for
each customer. In addition to such order-execution and recordkeeeping services,
the OCC permitted the bank to provide its customers with information concerning
current fund yields and the value of their holdings.1/ Finally, in exchange for
performing the foregoing recordkeeping and informational services, the OCC
permitted the bank to receive a fee from each fund or its distributor, based on
the percentage of the amount invested in the fund by the bank's customers,
pursuant to a plan of distribution adopted under the Securities and Exchange
Commission's Rule 12b-1.
Second, in OCC Interpretive Letter No. 363 (May 23, 1986) (copy
attached), the OCC concluded that a national bank may, in addition to providing
certain order-execution services to its customers, facilitate the availability
of unit investment trust and mutual fund prospectuses and enter into agreements
pursuant to Rule 12b-1 to provide recordkeeping, accounting, and other services
to the bank's customers.2/
- --------
1/ The national bank in question did not propose to provide information
concerning the operations or portfolios of the mutual funds involved or to
distribute copies of their prospectuses. Rather, all such information and copies
of the relevant prospectuses were to be provided directly by the funds or their
distributors.
2/ The national bank in question undertook no obligation to sell or promote the
unit investment trusts or mutual funds in question to any extent whatsoever. In
addition, when providing prospectuses directly to its customers (as opposed to
relaying such requests to a unit investment trust's or fund's distributor), the
bank agreed to inform its customer that the prospectus was provided by unit
investment trust's or mutual fund's sponsor and that the bank was not affiliated
with or endorsing the unit investment trust or mutual fund, but rather was
simply providing the prospectus as a service to its customer.
Third, in OCC Interpretive Letter No. 386 (June 10, 1987) (copy
attached) the OCC permitted a broker-dealer subsidiary of a national bank to
provide, in addition to the activities encompassed by Letter No. 363, investment
advice with respect to the purchase and sale of shares in unaffiliated mutual
funds. Nonetheless, the OCC expressly noted that although "the Subsidiary may
offer specific advice and recommendations, in all cases the customers will make
the decision whether to purchase or sell particular securities (i.e., the
Subsidiary will have no discretion whatsoever regarding which securities are
purchased or sold by customers)." The OCC also expressly noted the fact that the
"Subsidiary will be under no obligation whatsoever to purchase, sell, promote,
or recommend any secondary market security, share of any mutual fund, or
interest in any [unit investment trust]" and that the "Subsidiary would not
contractually commit to use its best efforts to effect the sale of any share of
a mutual fund, interest in a [unit investment trust], or secondary market
security."
Finally, in OCC Interpretive Letter No. 403 (December 9, 1987), the OCC
permitted a broker-dealer subsidiary of a national bank to provide investment
advice concerning, and to execute brokerage transactions with respect to, the
shares of a mutual funds for which the subsidiary acted as investment advisor.
In connections with these activities, the subsidiary is required, however, to
ensure that all disclosures mandated by the federal securities laws are made,
and to inform prospective purchasers that the unit investment trusts or mutual
funds involved are sponsored by third parties independent of the subsidiary, its
parent bank, or their affiliates. In addition, the subsidiary is required to
disclose to its customers that shares or interests in such unit investment
trusts or mutual funds were not endorsed or guaranteed by, and did not
constitute obligations of, the subsidiary, its parent bank, or their affiliates,
and were not insured by the Federal Deposit Insurance Corporation.
B. ISI's Proposed Activities
Pursuant to the terms of the Agreement, ISI proposes to provide
shareholder support services to the several portfolios of the Company (the
"Portfolios") subject to the other terms and conditions set forth in the
Company's current prospectus and statement of additional information. Section 1
of the Agreement requires ISI to provide the following services:
[E]stablishing and maintaining shareholder accounts and records,
sub-accounting, assisting shareholders in changing withdrawal options,
account registrations and addresses, arranging for bank wires,
forwarding financial reports and other communications to shareholders,
providing periodic statements showing shareholder account balances,
responding to shareholder inquiries regarding the Portfolios and
providing such other shareholder support services as the Underwriter
and ISI may mutually agree upon.
In addition, based upon a telephone discussion with M. Erin O'Rourke,
we also understand that ISI may provide investment advice to its customers with
respect to, and may make recommendations concerning, shares of the several
Portfolios.
In exchange for performing these services for the Company and the
Portfolios, ISI will receive a monthly fee pursuant to the Plan of Distribution
adopted by the Company pursuant to Rule 12b-1 of the Security and Exchange
Commission. This fee shall be equal to 1/12 of the 0.10 of 1.0% per annum of a
fraction of each Portfolio's aggregate average daily net assets, the numerator
of which fraction shall equal the number of shares of that Portfolio with
respect to which ISI is then providing shareholder support services and the
denominator of which fraction shall equal the total number of shares of that
Portfolio then outstanding.
C. Conclusion
Based on the OCC precedents discussed in Part A, the services
contemplated by the Agreement appear to be permissible activities for national
banks and their subsidiaries. Issues may arise in two areas: the rather cryptic
descriptions of the 12b-1 services that the OCC has approved in the foregoing
interpretive letters; and the potentially open-ended range of services in which
ISI might engage, i.e., "such other services as may be agreed upon from time to
time and as may be permitted by applicable statute, rule or regulation."
Our conclusion that ISI generally may engage in these activities is not
affected, moreover, by the fact that ISI's parent corporation, FBNA, will serve
as investment adviser and manager of the company and its Portfolios. The OCC has
permitted national banks and their subsidiaries to provide investment advice to
one or more mutual funds and simultaneously to provide investment advice and to
execute brokerage transactions with respect to the shares of those mutual funds.
Our conclusion in this respect assumes, however, that ISI makes all appropriate
disclosures mandated by state and federal law concerning this potential conflict
of interest, as well as the additional disclosures mandated by OCC Interpretive
Letter No. 403. It also assumes that ISI does not manage customer accounts on a
discretionary basis or that, if it does, that ISI will not purchase shares of
the Portfolios for such accounts without the express consent of the customer in
question.
Our advice is limited to the law as it exists today, and may be
affected by future OCC interpretations or other legal events.
Please call either Steven E. Carlson (612-340-7888) or John A. Cooney
(612-343-7992) if you have any questions abut this memorandum, any of the
attachments, or need further information concerning the OCC's treatment of these
issues.
Attachments: Shareholder Services Agreement
OCC Interpretive Letter No. 332 (March 8, 1985)
OCC Interpretive Letter No. 363 (May 23, 1986)
OCC Interpretive Letter No. 386 (June 10, 1987)
OCC Interpretive Letter No. 403 (December 9, 1987)
We consent to the inclusion of this memorandum as an exhibit to the
Registration Statement of First American Funds, Inc. (1933 Act Registration
Number 2-74747).
Dated: November 25, 1991 Very truly yours,
/s/ Dorsey & Whitney
DORSEY & WHITNEY
EXHIBIT (13)
LETTER OF INVESTMENT INTENT
November 3, 1981
First American Money Fund, Inc.
3033 Excelsior Boulevard
Minneapolis, Minnesota 55416
Gentlemen:
In connection with the purchase by American Hardware Mutual Insurance Company
("American Hardware") of 115,000 shares of common stock ("Stock") of First
American Money Fund, Inc., American Hardware hereby represents that it is
acquiring such Stock for investment with no intention of selling or otherwise
disposing or transferring it or any interest in it. American Hardware hereby
further agrees that any transfer of any such Stock or any interest in it shall
be subject to the following conditions:
1. American Hardware shall furnish you and counsel satisfactory
to you prior to the time of transfer, a written description of
the proposed transfer specifying its nature and consequence
and giving the name of the proposed transferee.
2. You shall have obtained from your counsel a written opinion
starting whether in the opinion of such counsel the proposed
transfer may be effected without registration under the
Securities Act of 1933. If such opinion states that such
transfer may be so effected American Hardware shall then be
entitled to transfer its Stock in accordance with the terms
specified in its description of the transaction to you. If
such opinion states that the proposed transfer may not be so
effected, then American Hardware will not be entitled to
transfer its Stock unless such Stock is registered.
3. American Hardware further agrees that all certificates
representing such Stock shall contain on the face thereof the
following legend:
"The shares represented by this certificate may not
be transferred without (i) the opinion of counsel
satisfactory to First American Money Fund, Inc. that
such transfer may lawfully be made without
registration under the Federal Securities Act of
1933; or, (ii) such registration."
American Hardware hereby authorizes you to take such other action as you shall
reasonably deem appropriate to prevent any violation of the Securities Act of
1933 in connection with the transfer of Stock, including the imposition of a
requirement that any transferee of the Stock sign a letter agreement similar to
this one.
Very truly yours,
AMERICAN HARDWARE MUTUAL INSURANCE COMPANY
By /s/
Its President
EXHIBIT (14)
APPLICATION BOOKLET
FIRST AMERICAN MONEY FUND, INC.
INDIVIDUAL RETIREMENT ACCOUNT
INSTRUCTIONS
TO OPEN A FIRST AMERICAN MONEY FUND, INC. IRA please forward the follow items
found in this booklet to:
FIRST AMERICAN MONEY FUND
c/o First Pennsylvania Bank, N.A.
P.O. Box 8070
Philadelphia, Pennsylvania 19101
NOTE: You should retain a copy of all items for your personal records.
1. Your check for the initial contribution and a separate check for
$5.00 (custodian's one-time fee for opening the account). Both checks should be
payable to First Pennsylvania Bank, N.A. (Transfers, see 3e below).
2. The completed APPLICATION. Note: If you are establishing a Regular
IRA for yourself and a Spousal IRA for your non-employed spouse, a separate,
completed Application with the non-employed spouse as Depositor must also be
forwarded even if you (the employed spouse) actually make the contributions: See
IRA Application Instructions.
3. The completed and signed FORM 5305-A in duplicate. The custodian
will return one signed copy for your records. Just complete the items indicated
by the following letters and sign on the back.
(a) The state and county of the depositor. Check box if amendment.
(b) The depositor is the person in whose name the IRA is
established. Date of birth.
(c) Depositor's social security number.
(d) Mailing address.
(e) Amount of initial contribution. If you are transferring funds
from an existing IRA the instruction 3 on the APPLICATION. The
minimum initial contribution to the fund is $1,000 for each
IRA account and subsequent contributions to the fund must be
at least $100 for each IRA account.
(f) Signature of depositor.
Note: If you are establishing a Regular IRA for yourself and a Spousal IRA for
your non-employed spouse, a separate, completed and signed FORM 5305-A with the
non-employed spouse as Depositor must also be forwarded even if you (the
employed spouse) actually make the contributions.
4. A completed and signed DESIGNATION OF BENEFICIARY FORM. This form is
optional but recommended. Retain one copy for your records.
A separate extra set of blank applications is enclosed for use by your
spouse, other family member or friend.
For additional information or assistance please write or call:
FIRST AMERICAN MONEY FUND, INC.
3033 Excelsior Boulevard
Minneapolis, Minnesota 55416
Telephone: (612) 920-2292
Toll free: (800) 328-6020
PLEASE PRINT OR TYPE
SEE IMPORTANT INSTRUCTIONS Account # ______________
(Assigned by Custodian)
FIRST AMERICAN MONEY FUND, INC.
INDIVIDUAL RETIREMENT ACCOUNT
------------
APPLICATION
------------
Please establish a FIRST AMERICAN MONEY FUND, INC. Individual
Retirement Account ("IRA") for the undersigned in accordance with the enclosed
Individual Retirement Custodial Account Agreement (IRS Form 5305-A) and the
information contained in this Application.
1. DEPOSITOR:
Name _________________________ Phone (Day) __________________
Mailing Address ____________________________________________
____________________________________________
Social Security No. ___________________ Date of Birth ________________
If this is a Spousal IRA, name of EMPLOYED spouse ______________________
2. TYPE OF IRA & INITIAL CONTRIBUTION:
(See Instruction on reverse side for explanation of TYPES and TRANSFERS)
____ Regular IRA ____ Rollover IRA
____ Spousal IRA ____ SEP - IRA
3. AMOUNT OF INITIAL CONTRIBUTION $_____ Year for Which Deductible
Contribution is Made: ___________
4. If this is a ROLLOVER CONTRIBUTION, see Instruction Number 4 in IRA
Application Instructions.
5. If this is a TRANSFER from an existing IRA, see Instruction Number 5 in
IRA Application Instructions and the IRA Transfer Package accompanying
this Booklet.
NOTE: The minimum initial contribution to the FUND is $1,000.
6. I understand the current CUSTODIAL FEE SCHEDULE is as follows:
$5.00 Account Acceptance Fee
$2.50 Annual Account Maintenance Fee
$5.00 Disbursement Fee for each disbursement prior to age 59-1/2
(Unless paid by a check payable to First Pennsylvania Bank, N.A., these
fees will automatically be charged to your IRA account).
I acknowledge that I have received and read the Individual Retirement
Custodial Account Agreement (IRS Form 5305-A) and the IRA Disclosure Statement
for the FIRST AMERICAN MONEY FUND, INC. INDIVIDUAL RETIREMENT ACCOUNT.
SIGNATURE: This Application will become effective by signing the
Individual Retirement Custodial Account Agreement - IRS Form 5305-A.
----------------------------------
IRA APPLICATION INSTRUCTIONS
----------------------------------
1. DEPOSITOR
The Depositor is the person in whose name the IRA is established.
Please provide the requested information for the Depositor. If you are employed
and you are establishing a Regular IRA (See Below) for yourself, you are the
Depositor. If a Spousal IRA (See Below) is established for your non-employed
spouse, a separate completed Application with Agreement WITH THE NONEMPLOYED
SPOUSE AS THE DEPOSITOR is necessary, even if you (the employed spouse) actually
make the contributions.
2. TYPE OF IRA
Please indicate the type of IRA Account you are establishing:
(a) REGULAR IRA - As an employed individual, the IRA Account you
establish for yourself to make annual tax-deductible contributions. Your annual
contribution must not exceed the lesser of $2,000 or 100% of your compensation.
(b) SPOUSAL IRA - AN IRA Account that may be established for your
non-employed spouse, usually in addition to a Regular IRA you establish for
yourself. The annual contributions to both the Regular and the Spousal IRA must
not exceed $2,250 or 100% of your compensation, and the contribution to either
IRA must not exceed $2,000 or 100% of your compensation.
(c) ROLLOVER IRA - An IRA Account you establish to deposit all or a
portion of a lump sum (or plan termination) distribution you received from a
qualified employer-sponsored retirement plan. You may not make annual
tax-deductible contributions to your Rollover IRA (you may establish a separate
regular IRA for that purpose). You may transfer funds from another Rollover IRA
into this IRA.
(d) SEP-IRA - An IRA Account you establish as part of your employer's
Simplified Employee Pension Plan. If your employer has established a SEP plan,
your employer may make annual contributions to your IRA up to the lesser of
$15,000 or 15% of your compensation.
3. INITIAL CONTRIBUTION
Please indicate the dollar amount of your initial contribution. All
contributions must be made by check or money order payable to First Pennsylvania
Bank, N.A. If you are transferring funds from an existing IRA and you do not
know the exact balance of the IRA, you may indicate "Transfer IRA Balance."
Please indicate the calendar year for which your tax-deductible IRA contribution
is being made. (If you are making a rollover or transfer contribution, this item
is unnecessary). Note: The minimum initial contribution to the Fund is $1,000.
4. ROLLOVER
(retirement funds transmitted by and through you)
A rollover contribution is a deposit to your new IRA. Your rollover
contribution will be deposited in a Rollover IRA. However, if your rollover
contribution is a "rollover" of an amount from another IRA you had established
which contains only annual tax-deductible contributions and earnings (e.g. a
Regular IRA and not a Rollover IRA containing a distribution from an employer's
retirement plan), then your rollover contribution may be deposited in a Regular
IRA (and you nay then make ongoing regular annual contributions to it). If your
rollover contribution is a "rollover" from another Rollover IRA containing a
distribution you had previously received from an employer's retirement plan,
your contribution will be deposited in a Rollover IRA. Note: When you make a
rollover contribution you are certifying to the Custodian the items in Article X
of the Individual Retirement Custodial Account Agreement (IRS Form 5303-A).
5. TRANSFER
(you order transfer directly between IRA custodians)
A transfer occurs when you direct your present IRA to make a direct
transfer of your Account balance to your new First American Money Fund, Inc. IRA
(i.e. you substitute a new one in its place). If you are making a transfer of
funds from an existing IRA, it is important to know the type of IRA from which
the transfer is to be make. For example, if it is a Rollover IRA (i.e. contains
a prior distribution from an employer's retirement plan), your transferred
deposit will be placed in a Rollover IRA. If it is a transfer from an existing
Regular IRA, your transferred deposit will be placed in a Regular IRA. If you
are making a transfer, you should read the separate IRA Transfer Package
accompanying this Booklet and Article X of the Agreement.
6. CUSTODIAN FEES
This is the Custodian's current Custodial Fee Schedule. You should
include a separate check for your initial contribution) for $5.00 (Acceptance
Fee) payable to First Pennsylvania Bank, N.A. with your Application.
7. IRA INFORMATION
You should read the IRA Disclosure Statement accompanying this
Application Booklet which contains important and helpful information concerning
IRAs.
8. SIGNATURE
No signature is required on the Application. The Application becomes
effective when you execute the Agreement (Form 5305-A) in duplicate.
FIRST AMERICAN MONEY FUND, INC.
INDIVIDUAL RETIREMENT ACCOUNT
DISCLOSURE STATEMENT
Custodian: First Pennsylvania Bank, N.A.
INTRODUCTION
The following is a brief outline of the legal requirements and tax
implications relating to establishment of an Individual Retirement Account
("IRA") and investment of the IRA in shares of First American Money Fund, Inc.
(the "Fund"). IRS regulations require that you be given this Disclosure
Statement for the purpose of providing you with information concerning the
nature of an IRA.
If you invest in the Fund by establishing an IRA, you are entitled to
revoke the IRA within seven days after the date your IRA is established. In
order to make such a revocation, you must mail or deliver a notice of revocation
no later than the seventh day after establishment of the IRA. If revoked, you
are entitled to a return of the entire amount contributed without reduction for
fees, commissions or other expenses. A proper revocation must be in writing and
mailed or delivered to the following address:
First American Money Fund, Inc. IRA
c/o First Pennsylvania Bank, N.A.
P.O. Box 8070
Philadelphia, Pennsylvania 19101
If a notice of revocation is mailed, it shall be deemed mailed on the
date of the postmark (or if sent by certified or registered mail, the date of
certification or registration) if it is so deposited in the mail in the United
States, first class postage prepaid and properly addressed.
(1) Eligibility
(a) Regular IRA. You may contribute to a Regular IRA if you have
received compensation during the taxable year. Compensation is
defined as wages, salaries or professional fees, and other
amounts received for personal services actually rendered
(including earned income). It does not include earnings
fromproperty such as interest, rents and dividends. If
compensation is not includible in gross income (such as income
earned from sources outside the United States), it is not
treated as compensation in determining the maximum limitation
for the deduction as discussed in paragraph (2).
(b) Spousal IRA. You may contribute to your IRA and the IRA for
your non-working spouse if: you have received compensation for
services rendered during the taxable year, your spouse has not
received any compensation during the year, and you file a
joint income tax return with your spouse.
(c) Simplified Employee Pension (SEP) - IRA. An employer may adopt
a SEP-IRA and contribute to your SEP-IRA even if you are
covered by another employer's retirement plan.
(d) Rollover IRA. Certain qualifying Rollover distributions from
an employer's qualified plan and certain distributions from
another IRA may be contributed to a Rollover IRA within 60
days of receipt of the distribution.
(2) Individual Retirement Accounts - General Description
(a) Regular IRA. If you are an eligible individual, the Internal
Revenue Code permits you to establish your own individual
retirement savings program. You are allowed to make
contributions to an individual retirement account of 100% of
your compensation up to $2,000 annually. Contributions made to
your account generally are tax-deductible and, in most
instances, the earnings from the funds held in the IRA will
not be subject to Federal income tax until distribution
begins. No deduction is allowed for any contribution which is
made for the taxable year in which or after you attain age 70
1/2. Usually, you will not be eligible to receive
distributions until you reach age 59 1/2 without an additional
income tax penalty.
(b) Spousal IRA. If (i) you are an eligible individual, (ii) you
and your spouse file a joint income tax return and (iii) your
spouse has no compensation, you may establish an IRA for
yourself and one for your spouse as well. Under such an
arrangement, you may qualify for a total deduction of 100% of
your compensation up to $2,250. You can determine how to
divide the contributions between the two accounts, as long as
you do not put more than $2,000 annually into either one. In
the tax year in which you attain age 70 1/2 you may not claim
a deduction for contributions to your IRA, even if your spouse
has not reached age 70 1/2; however, if your spouse becomes
employed and receives compensation, your spouse may contribute
to a Regular IRA. Similarly, if your spouse is older than you,
no deduction is permitted for contributions made to your
spouse's IRA for and after your tax year in which your spouse
reaches age 70 1/2, but if you have compensation, you may
continue contributions to your own IRA until the tax year in
which you attain age 70 1/2. A Spousal IRA does not involve
the creation of a joint account. The account of each spouse is
separately owned and treated independently from the account of
the other spouse.
(c) Simplified Employee Pension (SEP) - IRA. The Internal Revenue
Code permits an employer to contribute to your SEP-IRA up to
15,000 or 15% of your compensation, whichever is less. The
employer contributions must be made under a written allocation
formula which cannot discriminate in favor of employees who
are officers, shareholders, self-employed or highly
compensated. Employer contributions are considered
discriminatory unless they bear a uniform relationship to the
first $200,000 of each participating employee's total
compensation. If compensation over $100,000 is taken into
account for any employee, the contribution for each eligible
employee must be at a rate not less than 7 1/2% of
compensation. The employer's formula may provide, however,
that employercontributions for each employee are reduced by
the employer's share of the Social Security tax. In the case
of contributions on behalf of a sole proprietor or a partner
who is an owner-employee, the reduction for an owner-employee
is the amount of self-employment tax imposed on the
individual. Employers must cover each employee who has
attained age 25 and has performed service for the employer
during at least 3 of the immediately preceding 5 calendar
years, but employees covered by a collective bargaining
agreement and nonresident aliens may be excluded from
consideration. Contributions made by your employer to your
SEP-IRA for a calendar year are deductible by the employer and
are includible in your gross income; however, you may deduct
the amount contributed by the employer to your SEP-IRA up to
the amount of the deduction limitation. In addition you may
contribute on your own behalf an amount described in paragraph
(2) (a). If a self-employed individual makes contributions to
a Keogh (HR-10) plan, the limitation under such plan must be
reduced by the amount of allowable deductions under a
simplified employee pension plan with respect to contributions
made on behalf of a self-employed individual. Generally, your
SEP-IRA is subject to the rules governing a Regular IRA. Your
rights to withdraw amounts held in a SEP-IRA cannot be
restricted by your employer.
(d) Rollover IRA. A contribution of all or a portion of certain
distributions from a qualified plan, annuity or IRA may be
made to a Rollover IRA, provided such contribution is made
within 60 days of receipt of the distribution and the amount
which is contributed to the Rollover IRA does not exceed the
fair market value of all property received, reduced by
employee contributions (except contributions made pursuant to
an employee IRA under a qualified plan).
(3) Contributions. The contributions to an IRA (other than a Rollover IRA)
are deductible from your gross income on your income tax return. This
is true even if you do not itemize your deductions. No deduction for
contributions will be allowed for the year in which you attain age 70
1/2 or any year thereafter except for employer contributions under a
SEP-IRA. Contributions to your Regular IRA, Spousal IRA or SEP-IRA must
be in cash for the taxable year and may be made up to the due date for
filing your tax return for the taxable year (including extensions
thereof). Contributions make by an employer to your SEP-IRA for the
calendar year may be made no later than 3 1/2 months after the close of
the calendar year.
(4) Rollover Contributions from Qualified Plans and Other IRAs. All or a
portion of certain distributions from qualified plans, annuities and
other IRAs may be 'rolled over' tax-free to your Rollover IRA within
sixty (60) days after receipt of distribution without regard to the
limits on deductible contributions, but no deduction is allowed with
respect to a rollover contribution. Under certain circumstances, the
law allows you to make a contribution from a Rollover IRA into a
qualified pension or profit-sharing plan, qualified annuity plan, or
tax-sheltered annuity or custodial account; however, such a rollover
contribution cannot be made from any form of IRA to which you have made
deductible contributions. Although you may rollover amounts between
IRAs to which deductible contributions have been made, such rollovers
are allowed only once during a one-year period without penalty. If any
amounts in your Rollover IRA are attributable to contributions made to
Keogh (HP-10) plan on your behalf as a self-employed individual or
owner-employer, these amounts may only be rolled over into another IRA.
Rollover amounts you receive may not be deposited in you spouse's IRA,
but if you should die while still a participant in a qualified plan, in
certain cases your spouse may be allowed to make a tax-free rollover to
a Rollover IRA of all or any part of the assets distributed from the
qualified plan, excluding any contribution made by you to such plan.
The amount of the death payout rolled over by a spouse into a Rollover
IRA may not subsequently be rolled over into another employer's
qualified plan or annuity.
(5) Investment and Holding of Contributions. Contributions to your Regular
IRA, Spousal IRA, SEP-IRA or Rollover IRA, and the earnings thereon,
are invested in shares in the Fund. The assets in your account are held
in a custodial account exclusively for your benefit and the benefit of
such beneficiaries as you may designate in writing delivered to the
custodian. The balance in your Regular IRA, Spousal IRA, SEP-IRA or
Rollover IRA represents a separate account which is clearly identified
as your property and generally may not be combined for investment with
the property of another individual. Your right to the entire balance in
your account is nonforfeitable. No part of the assets of your account
may be invested in life insurance contracts.
(6) Income Tax Treatment. Income tax on Regular IRA, Spousal IRA, SEP-IRA
and Rollover IRA contributions and earnings generally is deferred until
your receive distributions. Distributions from your account are taxed
as ordinary income regardless of their original source. They are not
eligible for capital gains treatment or the special 10-year averaging
rules that apply to lump-sum distributions from qualified employer
plans. Nevertheless, taxable distributions from your account are
eligible for the regular income averaging provisions of the Internal
Revenue Code. A distribution from your account after you attain age 65
is eligible for the retirement income credit.
(7) Contributions to an IRA After a Divorce. A divorced spouse is allowed a
deduction for contributions to a Spousal IRA established by the
individual's former spouse at least five years before the divorce if
the former spouse contributed to the IRA under the Spousal IRA rules
(including the pre-1982 rules) for at least three of the five years
preceding the divorce. If these requirements are met, the limit on
contributions to the divorced spouse's
IRA is the lesser of (1) $1,125, or (2) the sum of the divorced
spouse's compensation and alimony includible in gross income.
(8) Distributions.
(a) Normal Distributions. The law permits distributions to be made
from a Regular IRA, Spousal IRA, SEP-IRA or Rollover IRA any
time after the covered individual attains age 59 1/2, and
required that distributions commence before the close of the
taxable year in which the individual attains age 70 1/2.
Distributions may be in the form of a single payment or in
substantially equal monthly, quarterly, or annual payments
over a period not extending beyond the individual's life
expectancy or the joint life and survivor expectancy of the
individual and the individual's spouse.
(b) Distribution of Funds in the Event of the Covered Individual's
Death. If the covered individual dies before the entire fund
has been distributed, or if the individual's spouse is
receiving payments and dies before the entire fund has been
distributed, the remaining funds in the account must either be
distributed in one lump sum or applied to the purchase of any
annuity for the beneficiary or beneficiaries within five years
after the death of the individual or the individual's spouse.
All distributions are taxed at ordinary income rates in the
year received. In the alternative, a beneficiary may elect to
treat the entire interest in the IRA (or remaining part of
such interest if distribution has already begun) as his or her
own IRA subject to the regular IRA distribution requirements.
Such election is automatic if any amounts have not been
distributed within the prescribed five year period.
(c) Premature Distributions. An IRA is intended to provide income
for the covered individual upon retirement. Accordingly, the
law generally imposes a penalty on premature distributions. If
the individual for whose benefit a Regular IRA, Spousal IRA,
SEP-IRA or Rollover IRA is established receives a taxable
distribution from his or her account before reaching age 59
1/2, it will be taxed as ordinary income and will also be
subject to an additional 10% penalty tax. The 10% additional
tax does not apply when distributions are made before age 59
1/2 because of the permanent disability or death of the
covered individual. Further, this penalty does not apply in
the case of a qualifying rollover distribution or where an
excess contribution is timely withdrawn (see paragraph 10).
(d) Minimum Distribution Requirement. If after the covered
individual attains age 70 1/2 the amount distributed to such
individual is less than the minimum amount required by law to
be distributed, a 50% excise tax may be imposed on any such
deficiency. For example, if the minimum distribution that you
should have received is $1,000 for the taxable year and you
only receive $800, an excise tax of $100 (50% of the $200
underdistribution) must be paid by you. The Internal Revenue
Service may waive this penalty if the deficiency was due to
reasonable error and reasonable steps are being taken to
correct the deficiency.
(e) Transfer of Account Incident to Divorce. If your IRA is
transferred from you to your former spouse because of a
divorce decree (or a written instrument incident to a
divorce), the transaction will not be considered a
distribution to you or your spouse. The account will be
considered an IRA of the spouse who received it, rather than
the spouse from whom it was transferred. Starting from the day
of transfer, it will be treated as being maintained for the
benefit of the spouse who received it.
(9) Federal Estate and Gift Taxes. Distributions under a Regular IRA,
Spousal IRA, SEP-IRA or Rollover IRA to a beneficiary other than an
executor are exempt from Federal estate taxes if made in substantially
equal periodic payments extending for the life of the beneficiary or
over a period extending for at least 36 months after the decedent's
death. An election under a Regular IRA, Spousal IRA, SEP-IRA or
Rollover IRA to have a distribution payable to a beneficiary on the
death of the covered individual will not be treated as a gift subject
to gift tax.
(10) Prohibited Transactions. If during any taxable year you engage in a
so-called "prohibited transaction" with respect to your Regular IRA,
Spousal IRA, SEP-IRA or Rollover IRA, the account will lose its
tax-exempt status effective as of the first day of the tax year in
which the prohibited transaction occurs. In this event, the value of
all account assets will be deemed distributed to you and includible in
you gross income for that tax year. These prohibited transactions would
include borrowing money from your account or pledging your account or
any portion thereof as security for a loan. If you pledge your account
or any portion thereof as security for a loan, such pledged portion
will be deemed distributed to you and includible in you gross income.
If you have not yet attained age 59 1/2, an additional excise tax equal
to 10% of the amount pledged will be imposed on such funds includible
in gross income. Similarly, if your spouse engages in a prohibited
transaction with respect to his or her account, it will result in the
same consequences because he or she is the individual for whose benefit
the account was established.
(11) Penalty for Excess Contributions. Contributions to a Regular IRA,
Spousal IRA, SEP-IRA or Rollover IRA above the permissible limits are
non-deductible and are subject to an annual non-deductible excise tax
of 6% of the amount of excess contributions for each year that the
excess is not withdrawn or eliminated. The tax is paid by the person to
whom a deduction is allowed. If the person who contributed the excess
takes no deduction for it and withdraws the excess amount plus the net
earnings attributable to such excess on or before the due date
(including extensions) for filing the Federal income tax return for the
year for which the contribution was made, the 6% excise tax will not be
applied. Generally, if the excess is withdrawn after the due date
(including extensions) for filing the tax return for the year for which
the contribution was made, not only will the excess contribution be
subject to the 6% excise tax, but the amount of such excess and the net
income attributable to it will also be includible in income; and if you
have not attained the age of 59 1/2, or are disabled, you will also be
subject to the previously mentioned 10% penalty tax on premature
distributions. The law provides, however, that if an individual has
made a contribution to an IRA for a year which does not exceed $2,250
(excluding rollover amounts) all or part of which is an excess
contribution for which he or she did not claim a deduction, and he or
she does not correct the excess contribution prior to the due date
(including extensions) for filing his or her tax return for the year,
he or she nevertheless may withdraw the excess amount contributed
(without the net income attributable thereto) at any time without
incurring the 10% penalty tax on premature distributions or being
required to include the amount withdrawn in income. The 6% excise tax
will be imposed even in this special situation for the year of the
excess contribution and each subsequent year until the excess is
withdrawn or eliminated.
If less than the maximum amount of contributions has been made
in years before the year you make an excess contribution, the prior
year's difference may not be used to reduce the excess contribution.
Generally, the rules discussed above apply to the SEP-IRA as
well, except that if excess employer contributions are made to your
SEP-IRA, you may be permitted to withdraw such amounts at any time
without including them in your income and free from the 10% penalty tax
on premature distributions where the withdrawal does not exceed the
amount of employer contributions of $15,000, whichever is less. The
annual 6% excise tax will continue to be imposed annually, however,
until the year of withdrawal or elimination of the excess contribution.
The law also allows you to withdraw tax-free and without
penalty an excess contribution, regardless of the amount, made with
respect to a rollover contribution (including an attempted rollover
contribution), if the excess contribution occurred because you
reasonably relied on erroneous information required to be supplied by
the plan, trust, or institution making the distribution that was the
subject of the rollover.
As an alternative to withdrawing excess contributions made to
a Regular IRA, Spousal IRA, or SEP-IRA, such amounts may be eliminated
by making reduced contributions; however, you will be required to pay
the 6% excise tax on the amount of the excess for the year of the
contribution and for each subsequent year until the amount of the
excess is deducted in a later year for which you have not contributed
the maximum deductible amount. If a contribution is made to your
account in an amount less than the permissible limit in order to
correct an excess contribution for a previous year for which you did
not claim a deduction, under certain circumstances, taking into account
the limits on contributions, you may be allowed to treat the amount of
the reduction in the current year's contribution as an additional
contribution for the current taxable year.
(12) Reports to the Internal Revenue Service. If you owe taxes on excess
contributions, premature distributions or underdistributions, you must
file Form 5329 (Return for Individual Retirement Taxes) with your Form
1040 (U.S. Individual Income Tax Return).
(13) Financial Information. Contributions to your IRA will be invested in
shares of the Fund. Earnings are determined by the amount of dividends
or other distributions, if any, paid on such shares held in your IRA,
and earnings will be used to purchase more Fund shares for your IRA.
Payments of dividends and growth in the value of your account can
neither be guaranteed nor projected.
There is no sales charge on purchases of Fund shares. The
Custodian of your IRA, however, charges the following amounts which may
be deducted from the amount of your contribution to your IRA (except in
the case of certain payroll deductions):
Acceptance Fee........................................ $5.00
Annual Maintenance Fee................................ $2.50 per year
Disbursement Fee (for each disbursement, if any,
before you reach age 59 1/2)................. $5.00 per
disbursement
Gross income of the Fund is reduced by advisory and management
fees paid to FBS Investment Services, Inc. and American Hardware Mutual
Insurance Company and also by certain other costs paid for by the Fund
(accounting fees, taxes, interest, director fees, brokerage charges,
etc.). It is estimated that the total of such charges will not be more
that 1 1/2% of the Fund's average net assets. See the prospectus for
more details.
(14) Form of IRA. Your IRA is established by using the individual retirement
custodial account agreement on IRS Form 5305-A (Individual Retirement
Custodial Account), including certain additions which are permitted by
such Form and are not inconsistent with its terms. The use of the IRS
Form for your IRA does not represent a determination of the merits of
this IRA by the Internal Revenue Service.
(15) Further Information. You can obtain further information concerning IRAs
from any district office of the Internal Revenue Service. Additional
information about IRAs is also contained in IRS Publication 590 (make
sure you receive a copy describing the law in effect after 1981).
FIRST AMERICAN MONEY FUND, INC.
INDIVIDUAL RETIREMENT ACCOUNT
Appendix "A"
To
Individual Retirement Custodial Account
Agreement (Internal Revenue Service Form 5305-A)
Article IX
All contributions to the custodial account made on behalf of the
Depositor shall be applied by the Custodian solely to the purchase of full and
fractional shares of First American Money Fund, Inc. (the "Fund") on behalf of
the Depositor. The Depositor acknowledges receipt of the current prospectus of
the Fund. Shares acquired in the Depositor's account will be held beneficially
for the Depositor in the name of the Custodian or its nominee.
All dividends and capital gain or other distributions received on Fund
shares held in a Depositor's custodial account shall (unless received in
additional Fund shares) be reinvested in such shares which shall be credited to
such account. If any distributions of the Fund may be received at the election
of the Depositor in additional shares or in cash or other property, the
Custodian shall elect to receive the distribution in additional shares.
The Custodian shall forward to the Depositor any Fund notices,
prospectuses, financial statements, proxies and proxy soliciting materials
relating to Fund shares. The Custodian shall not vote any of the Fund shares
held in the custodial account except in accordance with the written instructions
of the Depositor.
Article X
Except for the rollover contributions and employer contributions to a
simplified employee pension referred to in Article I, the Depositor shall not
deposit for any taxable year beginning after 1981 an amount in excess of the
lesser of $2,000 or 100% of the compensation includible in his or her gross
income for such year (in excess of the lesser of $1,500 or 15% of the
compensation includible in his or her gross income for any taxable year
beginning before 1982). The Depositor shall be fully and solely responsible for
all taxes, interest and penalties which might accrue or be assessed by reason of
any excess deposit to the custodial account, and interest, if any, earned
thereon. Any contribution made by or on behalf of the Depositor in respect of a
taxable year of the Depositor shall be made by or on the behalf of the Depositor
to the Custodian for deposit in the custodial account within the time period for
claiming any income tax deduction for such taxable year. The time within which
such contributions must be made is currently the due date for filing the
Depositor's tax return for the taxable year, which may be changed from time to
time by reason of changes in the law. If the Depositor makes a rollover
contribution, i.e., if the contribution consists of an amount distributed from
an employees' trust described in Section 401(a) of the Code which is exempt from
tax under Section 501(a) or from another Individual Retirement Account or
Annuity described in Section 408, from an annuity plan described in Section
403(a), or 403(b) or from a retirement bond described in Section 409(a), the
Depositor certifies that it constitutes all or a portion of the balance to the
credit of the Depositor or the Depositor's spouse in such trust, Individual
Retirement Account or Annuity, annuity plan or bond (including money and any
other property), or the proceeds from the sale of such balance, less any amount
considered to have been contributed by the Depositor or his or her spouse as an
employee (other than deductible employee contributions as defined in Section
72(o)(5) of the Code); that such amount is being contributed no later than 60
days after the receipt by the Depositor, and that no previous rollover has been
made within 1 year to or from another Individual Retirement Account or Annuity.
At the time of making any rollover contribution(or a transfer contribution from
any individual retirement plan), the Depositor agrees to notify the Custodian of
the amount of "any accumulated deductible employee contributions" (as defined in
Section 72(o)(5) of the Code) included in such contribution or of any amounts
included in such contribution on which the Depositor has taken (or intends to
take) a tax deduction, including the earnings on such amounts. After the initial
contribution, the Depositor shall not make any additional contributions to a
custodial account which contains any amounts other than amounts on which the
Depositor has taken (or intends to take) a tax deduction; provided, however, the
depositor may make an additional rollover contribution to such an account. It
shall be the sole responsibility of the Depositor to determine the amount of the
contributions to be made hereunder. The Depositor shall execute such forms as
the Custodian may require in connection with any contribution hereunder.
ARTICLE XI
The Custodian shall from time to time, on instruction from the
Depositor, and subject to the provisions of Articles IV and V, make
distributions out of the custodial account to the Depositor, in such manner and
amounts as may be specified in such instructions. All such instructions shall be
deemed to constitute a certification by the Depositor that the distribution so
directed is one that the Depositor is permitted to receive. A declaration of the
Depositor's intention as to the disposition of an amount distributed pursuant to
Article V hereof shall be in writing and given to the Custodian. The Custodian
shall have no liability with respect to any contribution to the custodial
account, any investment of assets in the custodial account or any distribution
therefrom pursuant to instructions received from the Depositor or this
Agreement, or for any consequences to the Depositor arising from such
contributions, investments or distributions including, but not limited to,
excise and other taxes and penalties which might accrue or be assessed by reason
thereof, nor shall the Custodian be under any duty to make any inquiry or
investigation with respect thereto.
ARTICLE XII
If the Depositor is disabled (as defined in Section 72(m) of the Code)
all or a portion of the balance in the custodial account shall be distributed to
him or her as soon as practicable after the Custodian receives notice of the
Depositor's disability and written request for distribution. The Custodian may
require such proof of the disability as it deems necessary prior to the time
that amounts are distributed to the Depositor on account of such disability.
ARTICLE XIII
The Depositor may designate and redesignate his or her beneficiaries on
a form provided by the Fund for such purpose. Such beneficiary or beneficiaries
shall be entitled to the balance in the custodial account of the Depositor as
provided in paragraph 2 of Article IV. Unless otherwise provided in the
designation of beneficiary form, amounts payable by reason of Depositor's death
will be paid only to the primary beneficiary or beneficiaries who survive the
Depositor in equal shares, or, if no primary beneficiary or beneficiaries
survive the Depositor, the contingent beneficiary or beneficiaries who survive
the Depositor in equal shares.
If some but not all primary or contingent beneficiaries, as applicable,
in proportion to the relative interests of such surviving primary or contingent
beneficiaries. If no such designation is in effect at the time of the
Depositor's death, the beneficiary shall be his or her spouse or if there is no
spouse living at the time of his or her death, the beneficiary shall be the
estate of the Depositor.
ARTICLE XIV
Depositor acknowledges he or she has read information distributed to
him or her by the Custodian and agrees to assume full responsibility for all
decisions as to deposits and withdrawals, and the Depositor indemnifies the
Custodian and saves it free and harmless from any and all claims arising out of
any adverse consequences experienced by the Depositor as a result of his or her
own decision, including but not limited to excise taxes and penalties. Any taxes
which may be imposed upon the custodial account or the income thereof, but not
excise taxes imposed upon the Depositor, may, in the discretion of the
Custodian, be deducted from and charged against the custodial account.
ARTICLE XV
If, within 60 days after the mailing by the Custodian to the Depositor
of a report pursuant to paragraph 2 of Article VI, the Depositor has not given
the Custodian written notice of any exception or objection thereto, such report
shall be deemed to have been approved and in such case, or upon written approval
of the Depositor, the Custodian shall be released, relieved, and discharged with
respect to all matters and statements set forth therein as though the report had
been settled by judgment or decree of a court of competent jurisdiction.
ARTICLE XVI
The Custodian shall have no duties whatsoever except the duties it
specifically agrees to assume under this Agreement, and no implied covenant or
obligation shall be read into this Agreement against the Custodian. The
Custodian shall not be liable under this Agreement, except for its own bad
faith, gross negligence or willful misconduct.
ARTICLE XVII
No interest, right or claim in or to any part of the custodial account
or any payment therefrom shall be assignable, transferable, or subject to sale,
mortgage, pledge, hypothecation, commutation, anticipation, garnishment,
attachment, execution, or levy of any kind, and the Custodian shall not
recognize any attempt to assign, transfer, sell, mortgage, pledge, hypothecate,
commute, or anticipate the same, except as required by law.
ARTICLE XVIII
The Depositor delegates to the investment adviser for the sponsoring
Fund the Depositor's right to amend this Agreement in any manner and at any
time, prospectively or retroactively, as the adviser may deem necessary and
appropriate, including the amendment of this Agreement by substituting in its
place a prototype or master plan approved by the Internal Revenue Service and
the substitution of a new successor custodian to replace the Custodian. The
adviser shall provide the Depositor and the Custodian with a written notice of
any such amendment. The Depositor also delegates to the Custodian the right to
amend this Agreement from time to time as it deems appropriate, subject to the
consent of the Fund's investment adviser. The Custodian shall provide the
Depositor with a written notice of any such amendment. The Depositor hereby
consents to any such amendments made by the Custodian or the adviser, and all
such amendments shall be effective as of the date specified in the written
notice of such amendments. Any amendment to this Agreement must be in compliance
with the provisions of the Code and the regulations thereunder.
ARTICLE XIX
The Custodian may resign without liability, cost or expense of any
kind, upon written notice furnished by the Custodian to the Depositor, such
resignation to be effective the 30th day following the mailing to the Depositor
of such notice. In the event that the Depositor fails to appoint a successor
Custodian within 30 days of the mailing of such notice, the custodian may either
terminate the account and pay the proceeds to the Depositor or may appoint a
successor Custodian. The Depositor may remove the Custodian by delivering to it
a written notice, which notice shall also designate a successor custodian. The
Custodian may also be removed by the adviser, as provided in Article XVIII. in
any case where the Custodian resigns or is removed, and the successor custodian
has accepted its appointment, the Custodian shall transfer such records and such
assets of the account as the Depositor may direct the Custodian in writing to
the successor custodian, after making adjustments for any fees due the
Custodian.
ARTICLE XX
Any notice herein required or permitted to be given to the Custodian
shall not be effective unless it is mailed to and actually received by the
Custodian at the address specified above, or such other address as the Custodian
shall provide the Depositor from time to time in writing, stating that such
other address shall be used for purposes of this Agreement. Any notice herein
required or permitted to be given to the Depositor shall be mailed to the
Depositor at the Depositor's residence address given above or at such other
address as he or she shall provide the Custodian from time to time in writing
stating that such other address shall be used for purposes of this Agreement,
and any such notice shall be deemed accepted by the Depositor at the time it is
mailed. Depositor and his or her beneficiaries will be bound by the last address
furnished to the Custodian by the Depositor or his or her beneficiaries.
ARTICLE XXI
Custodian and Depositor hereby waive and agree to waive right to trial
by jury in an action or proceeding instituted in respect of this custodial
account. Depositor further agrees that the venue of any litigation between him
and the Custodian with respect to the custodial account shall be in the City of
Philadelphia, State of Pennsylvania.
ARTICLE XXII
This Agreement and the custodial account created hereby shall be
subject to the applicable laws, rules and regulations, as the same may from time
to time be amended, of the Federal government and the State of Pennsylvania and
the agencies and instrumentalities of each having jurisdiction thereof, and
shall be governed by and construed, administered and enforced according to the
law of the State of Pennsylvania. All contributions to the custodial account
shall be deemed to take place in the State of Pennsylvania.
ARTICLE XXIII
The Depositor shall be fully and solely responsible for all taxes and
penalties which might accrue or be assessed for having failed to make the annual
minimum withdrawal during the year in which he or she attains the age of seventy
and one-half (70 1/2) or for any year thereafter.
ARTICLE XXIV
The Custodian shall be entitled to receive and may charge against the
Depositor's custodial account such reasonable compensation for its service as
may from time to time be agreed upon by the Depositor and the Custodian and
reimbursement of its expenses as Custodian under this Agreement.
Custodial Account #_______
(Administrative Use Only)
FIRST AMERICAN MONEY FUND, INC.
INDIVIDUAL RETIREMENT ACCOUNT
--------------------------
DESIGNATION OF BENEFICIARY
--------------------------
(Important Instructions on Back)
DEPOSITOR'S NAME AND ADDRESS: __________________________
__________________________
SOCIAL SECURITY #: ___________ __________________________
CUSTODIAL ACCOUNT # (If Assigned): __________________________
I hereby designate the following person or persons to receive any remaining
balance in my Individual Retirement Account upon my death. By executing this
form, I hereby revoke any prior designations made by me and I hereby reserve the
right to change my designation of beneficiary by executing and filing a new
designation form with the Custodian.
Beneficiary(ies): ____________________________________________________
_______________________________________________________________________
_______________________________________________________________________
(Specify above the name of the beneficiary, the beneficiary's relationship to
you and the designated share the beneficiary if to receive. Distribution will be
made among beneficiaries in equal shares, unless you clearly designate
otherwise. Please specify below the address of each designated beneficiary.)
Address of each Beneficiary: ________________________________________
_______________________________________________________________________
_______________________________________________________________________
[NOTE: SAMPLE BENEFICIARY DESIGNATIONS ARE SHOWN ON THE BACK. IF THERE IS NOT A
VALID BENEFICIARY DESIGNATION IN EFFECT AT YOUR DEATH, THE CUSTODIAN WILL PAY
YOUR ACCOUNT BALANCE TO YOUR SURVIVING SPOUSE, AND IF YOU DO NOT HAVE SURVIVING
SPOUSE, YOUR ACCOUNT BALANCE WILL BE PAID TO YOUR ESTATE.]
____________________________ ____________ X____________________
Witness (Only if signature Date Depositor's signature
is required to be witnessed)
____________________________ ____________ X____________________
Witness (Only if signature Date Depositor's signature
is required to be witnessed)
INSTRUCTIONS FOR DESIGNATION OF BENEFICIARY FORM
Making Your Designation
This form may be used by you (the Depositor under the Individual
Retirement Custodial Account Agreement) to designate the beneficiary who is to
receive the balance remaining in your IRA at your death. This form may also be
used by any person who is entitled to receive any payments from your IRA
following your death (such as your beneficiary or your surviving spouse who is
receiving payments under a payment form you had elected). Such person may use
this form to designate the beneficiary to receive any remaining interest such
person has in the IRA at his or her death. You may designate more than one
beneficiary.
Your beneficiary designation may be an important part of your
financial, tax and estate planning. Therefore, you may wish to consult your tax
advisor about the tax and other consequence of making a beneficiary designation.
Filing a designation and the use of this form is optional; however, filing a
designation is recommended. If you complete a designation form, you should date
and sign two copies of the form. One copy of the form should be sent to First
American Money Fund Inc. IRA, c/o First Pennsylvania Bank, N.A. P.O. Box 8070,
Philadelphia, Pennsylvania 19101. Retain a copy of the form for your records.
You may change your beneficiary designation by filing a new form with the
Custodian. Your beneficiary designation will only be effective if filed with the
Custodian prior to your death. Additional copies of this form are available.
This form may be duplicated.
Sample Beneficiary Designations
(1) Mary Smith, my wife, if living at my death, otherwise Betty Smith, my
daughter.
(2) Mary Smith, my wife, if living at my death, otherwise to Betty Smith,
my daughter, and Bill Smith, my son, in equal shares if they both
survive me, otherwise all to the one who survives me.
(3) Betty Smith, my daughter, and Bill Smith, my son, in equal shares if
they both survive me, otherwise all to the one who survives me.
(4) Mary Smith, my wife, if living at my death, otherwise in equal shares
to such of my children as shall survive me.
(Retain copy for your records)
FIRST AMERICAN MONEY FUND, INC. IRA
--------------------
IRA TRANSFER PACKAGE
--------------------
Instruction for Transfer from Existing IRA to a
FIRST AMERICAN MONEY FUND, INC. IRA
You may make a direct transfer of the assets in your present IRA to
your new FIRST AMERICAN MONEY FUND, INC. IRA (unless your present IRA prohibits
such a transfer). Generally, this transfer can be made tax-free and without
adverse tax consequences. The amount transferred does not reduce the amount of
the tax-deductible contribution you (or your employer) might otherwise make to a
Regular IRA, Spousal IRA or SEP-IRA. Here are the two easy steps to make a
transfer:
STEP 1
Complete and sign the documents in the IRA Application Booklet as
indicated in the Booklet's instructions. (The Booklet includes the Application,
the IRS Form 5305-A and the Designation of Beneficiary).
STEP 2
Complete and sign Transfer Letter A and Transfer Letter B included in
this Transfer Package. Mail each of the documents listed in Transfer Letter A,
with Letter A and Letter B to the following address:
FIRST AMERICAN MONEY FUND, INC. IRA
c/o First Pennsylvania Bank, N.A.
P.O. Box 8070
Philadelphia, Pennsylvania 19101
(If you wish, you may use the Transfer Letters as a
sample and have them retyped)
If you do not know the exact balance of your present IRA, you may
indicate "Transfer IRA Balance" in the IRS Form 5305-A. Also, if you would like
to make a tax-deductible contribution to your new Regular or Spousal IRA (not a
Rollover IRA) in addition to your transfer contribution, please indicate the
amount in item (3) of Transfer Letter A and enclose a check. Please indicated in
your Transfer Letter A whether your present IRA is a Rollover IRA and whether
your present IRA contains any amounts for which you have taken (or intend to
take) a tax deduction.*
Once First Pennsylvania Bank, N.A. receives your documents, it will
open your new IRA and arrange for the transfer of assets from your present IRA.
* Generally, it is important for tax reasons for you to know the type of IRA
from which you are making a transfer. If your present IRA ia a Rollover IRA
(i.e., it contains and amount from a prior distribution from a qualified plan),
your transferred amount will be placed in a Rollover IRA. Also, please advise us
if your present Rollover IRA contains any amounts for which you have taken (or
intend to take) a tax deduction.
TRANSFER LETTER A
To: FIRST AMERICAN MONEY FUND, INC.
c/o First Pennsylvania Bank, N.A.
P.O. Box 8070
Philadelphia, Pennsylvania 19101
Date _____________
Dear Sir:
This letter is to advise you that I wish to establish a First American
Money Fund, Inc. IRA. At the present time I have an IRA plan with_______________
_______________ ___________________ (Give name of present Trustee or Custodian
and type of IRA). My present IRA is __ or is not __ a Rollover IRA plan and it
does __ or does not __ contain an amount for which I have taken (or will take) a
tax deduction. To transfer my present IRA and establish my new First American
Money Fund, Inc. IRA, I have enclosed the following:
(1) A completed First American Money Fund, Inc. IRA Application. (See
Application Booklet).
(2) A completed and signed Individual Retirement Custodial Account
Agreement (IRS Form 5305-A). (See Application Booklet).
(3) A check or money order payable to First Pennsylvania Bank, N.A. for
$5.00 (Acceptance Fee) and for $_________ (only if you are making an
initial contribution to a Regular or Spousal IRA in addition to the
transfer contribution -- insert amount of check).
(4) A completed and signed Designation of Beneficiary form. (See
Application Booklet). [Filing this form is optional but recommended].
(5) A completed and signed Transfer Letter B directing that the funds in my
present IRA plan be transferred to my new First American Money Fund,
Inc. IRA.
You are hereby requested to establish a First American Money Fund, Inc.
for me and accept transfer of the funds from my present IRA plan. If you accept
my IRA Application, please forward the enclosed Transfer Letter B and your
letter of acceptance to the Trustee/Custodian of my present IRA plan. Please
provide me with a confirmation that these actions have been taken.
Sincerely,
__________________________________
(Sign Name)
__________________________________
(Print Name)
Account Number - First Pennsylvania Bank, N.A. use only
TRANSFER LETTER B
To: ______________________
______________________
______________________
______________________
______________________
(Name and Address of Trustee or
Custodian of Present IRA Plan)
Date _____________
Re: ____________________________________________
(Depositor's Name)
____________________________________________
(Depositor's Account Number(s) - PRESENT IRA)
Dear _______________:
Please be advised that I have amended my IRA plan with you by adopting
a new IRA plan with First Pennsylvania Bank, N.A. as successor Custodian. In
connection with your removal as Trustee/Custodian, and First Pennsylvania Bank,
N.A.'s acceptance of its appointment as successor Custodian, you are hereby
requested to convert the investment in my present IRA plan with you into cash
and forward the proceeds to:
FIRST AMERICAN MONEY FUND, INC. IRA
c/o First Pennsylvania Bank, N.A.
P.O. Box 8070
Philadelphia, Pennsylvania 19101
Please indicate my First American Money Fund, Inc. IRA Account Number
on your check and all correspondence. (See Below).
Please provide First Pennsylvania Bank, N.A. with such records,
documents or other information it may request concerning my present IRA plan
with you.
Sincerely,
__________________________________
(Sign Name)
__________________________________
(First American Money Fund, Inc. __________________________________
IRA Account Number) (Print Name)
(This letter to be mailed with Transfer Letter to be mailed with Transfer Letter
A to First Pennsylvania Bank, N.A. First Pennsylvania Bank, N.A. will forward to
your present custodian)
EXHIBIT (15)(a)
CLASS A DISTRIBUTION PLAN
[RETAIL CLASS]
FIRST AMERICAN FUNDS, INC.
WHEREAS, FIRST AMERICAN FUNDS, INC. (the "Fund") is engaged in business
as an open-end investment company registered under the Investment Company Act of
1940, as amended ("1940 Act"); and
WHEREAS, the Directors of the Fund have determined that there is a
reasonable likelihood that the following Distribution Plan will benefit the Fund
and the owners of Class A retail class shares of Common Stock ("Shareholders")
in the Fund;
NOW, THEREFORE, the Directors of the Fund hereby adopt this
Distribution Plan pursuant to Rule 12b-1 under the 1940 Act.
SECTION 1. The Fund has adopted this Class A Distribution Plan ("Plan")
to enable the Fund to directly or indirectly bear expenses relating to the
distribution and shareholder servicing of Class A retail class shares of Common
Stock ("Shares") of the portfolios of the Fund, as now in existence or
hereinafter created from time to time (each a "Portfolio").
SECTION 2. The Shares of each Portfolio is authorized to pay the
principal underwriter of the Fund's shares (the "Distributor") a total fee in
connection with the servicing of shareholder accounts of such class and in
connection with distribution-related services provided in respect of such class,
calculated and payable monthly, at the annual rate of .25% of the value of the
average daily net assets of such Shares. All or any portion of such total fee
may be payable as a Shareholder Servicing Fee, and all or any portion of such
total fee may be payable as a Distribution Fee, as determined from time to time
by the Fund's Board of Directors. Until further action by the Board of
Directors, all of such fee shall be designated and payable as a Shareholder
Servicing Fee.
SECTION 3.
(a) The Shareholder Servicing Fee may be used by the Distributor
to provide compensation for ongoing servicing and/or
maintenance of shareholder accounts with respect to the Shares
of the applicable Portfolios of the Fund. Compensation may be
paid by the Distributor to persons, including employees of the
Distributor, and institutions who respond to inquiries of
holders of Shares regarding their ownership of shares or their
accounts with the Fund or who provide other administrative or
accounting services not otherwise required to be provided by
the Fund's investment adviser, transfer agent or other agent
of the Fund.
(b) The Distribution Fee may be used by the Distributor to provide
initial and ongoing sales compensation to its investment
executives and to other broker-dealers in respect of sales of
Shares of the applicable Portfolios of the Fund and to pay for
other advertising and promotional expenses in connection with
the distribution of such Shares. These advertising and
promotional expenses include, by way of example but not by way
of limitation, costs of printing and mailing prospectuses,
statements of additional information and shareholder reports
to prospective investors; preparation and distribution of
sales literature; advertising of any type; an allocation of
overhead and other expenses of the Distributor related to the
distribution of such Shares; and payments to, and expenses of,
officers, employees or representatives of the Distributor, of
other broker-dealers, banks or other financial institutions,
and of any other persons who provide support services in
connection with the distribution of such Shares, including
travel, entertainment, and telephone expenses.
(c) Payments under the Plan are not tied exclusively to the
expenses for shareholder servicing and distribution related
activities actually incurred by the Distributor, so that such
payments may exceed expenses actually incurred by the
Distributor. The Fund's Board of Directors will evaluate the
appropriateness of the Plan and its payment terms on a
continuing basis and in doing so will consider all relevant
factors, including expenses borne by the Distributor and
amounts it receives under the Plan.
(d) The Fund's investment adviser and the Distributor may, at
their option and in their sole discretion, make payments from
their own resources to cover costs of additional distribution
and shareholder servicing activities.
SECTION 4. This Plan shall not take effect with respect to a Portfolio
until it has been approved (a) by a vote of at least a majority of the
outstanding voting securities of the Shares of such Portfolio; and (b) together
with any related agreements, by votes of the majority of both (i) the Directors
of the Fund and (ii) the Qualified Directors, cast in person at a Board of
Directors meeting called for the purpose of voting on this Plan or such
agreement.
SECTION 5. This Plan shall continue in effect for a period of more than
one year after it takes effect only for so long as such continuance is
specifically approved at least annually in the manner provided in Part (b) of
Section 4 herein for the approval of this Plan.
SECTION 6. Any person authorized to direct the disposition of monies
paid or payable by the Fund pursuant to this Plan or any related agreement shall
provide to the Directors of the Fund, at least quarterly, a written report of
the amounts so expended and the purposes for which such expenditures were made.
SECTION 7. This Plan may be terminated at any time with respect to any
Portfolio by the vote of a majority of the Qualified Directors or by vote of a
majority of the Portfolio's Class A voting securities.
SECTION 8. All agreements with any person relating to implementation of
this Plan shall be in writing, and any agreement related to this Plan shall
provide (a) that such agreement may be terminated at any time with respect to
any Portfolio, without payment of any penalty, by the vote of a majority of the
Qualified Directors or by the vote of Shareholders holding a majority of the
Portfolio's outstanding Class A voting securities, on not more than 60 days
written notice to any other party to the agreement; and (b) that such agreement
shall terminate automatically in the event of its assignment.
SECTION 9. This Plan may not be amended to increase materially the
amount of distribution expenses permitted pursuant to Section 2 hereof without
the approval of Shareholders holding a majority of the outstanding Class A
voting securities of the applicable Portfolio, and all material amendments to
this Plan shall be approved in the manner provided in Part (b) of Section 4
herein for the approval of this Plan.
SECTION 10. As used in this Plan, (a) the term "Qualified Directors"
shall mean those Directors of the Fund who are not interested persons of the
Fund, and have no direct or indirect financial interest in the operation of this
Plan or any agreements related to it, and (b) the terms "assignment" and
"interested person" shall have the respective meanings specified in the 1940 Act
and the rules and regulations thereunder, subject to such exemptions as may be
granted by the Securities and Exchange Commission.
SECTION 11. While this Plan is in effect, the selection and nomination
of those Directors who are not interested persons of the Fund within the meaning
of Section 2(a)(19) of the 1940 Act shall be committed to the discretion of the
Directors then in office who are not interested persons of the Fund.
SECTION 12. This Plan shall not obligate the Fund or any other party to
enter into an agreement with any particular person.
EXHIBIT (15)(b)
CLASS B DISTRIBUTION PLAN
(CONTINGENT DEFERRED SALES CHARGE CLASS)
FIRST AMERICAN FUNDS, INC.
WHEREAS, FIRST AMERICAN FUNDS, INC. (the "Fund") is engaged in business as an
open-end investment company registered under the Investment Company Act of 1940,
as amended ("1940 Act"); and
WHEREAS, the Directors of the Fund have determined that there is a reasonable
likelihood that the following Distribution Plan will benefit the Fund and the
owners of Class B shares of Common Stock ("Shareholders") in the Fund;
NOW, THEREFORE, the Directors of the Fund hereby adopt this Distribution Plan
pursuant to Rule 12b-1 under the 1940 Act.
SECTION 1. The Fund has adopted this Class B Distribution Plan ("Plan")
to enable the Fund to directly or indirectly bear expenses relating to the
distribution and sale of Class B shares (collectively, "Shares") of the
portfolios of the Fund, as now in existence or hereinafter created from time to
time (each a "Portfolio").
SECTION 2. The Shares of each Portfolio are authorized to pay the
principal underwriter of the Shares (the "Distributor") a total fee in
connection with distribution-related service provided in respect of such class,
calculated and payable month, at the annual rate of .75% of the value of the
average daily net assets of such class.
SECTION 3.
(a) The fee paid pursuant to Section 2 may be used by the
Distributor to provide initial and ongoing sales compensation
to its investment executives and to other broker-dealers in
respect of sales of Shares of the applicable Portfolios and to
pay for other advertising and promotional expenses in
connection with the distribution of the Shares. These
advertising and promotional expenses include, by way of
example but not by way of limitation, costs of printing and
mailing prospectuses, statements of additional information and
shareholder reports to prospective investors; preparation and
distribution of sales literature; advertising of any type; an
allocation of overhead and other expenses of the Distributor
related to the distribution of the Shares; and payments to,
and expenses of, officers, employees or representatives of the
Distributor, of other broker-dealers, banks or other financial
institutions, and of any other persons who provide support
services in connection with the distribution of the Shares,
including travel, entertainment, and telephone expenses.
(b) Payments under the Plan are not tied exclusively to the
expenses for distribution related activities actually incurred
by the Distributor, so that such payments may exceed expenses
actually incurred by he Distributor. The Fund's Board of
Directors will evaluate the appropriateness of the Plan and
its payment terms on a continuing basis and in doing so will
consider all relevant factors, including expenses borne by the
Distributor and amounts it receives under the Plan.
(c) The Fund's investment adviser and the Distributor may, at
their option and in their sole discretion, make payments from
their own resources to cover costs of additional distribution.
SECTION 4. This Plan shall not take effect with respect to a Portfolio
until it has been approved (a) by a vote of at least a majority of the
outstanding voting securities of the Class B shares of such Portfolio; and (b)
together with any related agreements, by votes of the majority of both (i) the
Directors of the Fund and (ii) the Qualified Directors, cast in person at a
Board of Directors meeting called for the purpose of voting on this Plan or such
agreement.
SECTION 5. This Plan shall continue in effect for a period of more than
one year after it takes effect only for so long as such continuance is
specifically approved at least annually in the manner provided in Part (b) of
Section 4 herein for the approval of this Plan.
SECTION 6. Any person authorized to direct the disposition of monies
paid or payable by the Fund pursuant to this Plan or any related agreement shall
provide to the Directors of the Fund, at least quarterly, a written report of
the amounts so expended and the purposes for which such expenditures were made.
SECTION 7. This Plan may be terminated at any time with respect to any
Portfolio by the vote of a majority of the Qualified Directors or by vote of a
majority of the Portfolio's outstanding Class B shares.
SECTION 8. All agreements with any person relating to implementation of
this Plan shall be in writing, and any agreement related to this Plan shall
provide (a) that such agreement may be terminated at any time with respect to
any Portfolio, without payment of any penalty, by the vote of a majority of the
Qualified Directors or by the vote of shareholders holding a majority of the
Portfolio's outstanding Class B shares, on not more than 60 days written notice
to any other party to the agreement; and (b) that such agreement shall terminate
automatically in the event of its assignment.
SECTION 9. This Plan may not be amended to increase materially the
amount of distribution expenses permitted pursuant to Section 2 hereof without
the approval of shareholders holding a majority of the outstanding Class B
shares of the applicable Portfolio, and all material amendments to this Plan
shall be approved in the manner provided in Part (b) of Section 4 herein for the
approval of this Plan.
SECTION 10. As used in this Plan, (a) the term "Qualified Directors"
shall mean those Directors of the Fund who are not interested persons of the
Fund, and have no direct or indirect financial interest in the operation of this
Plan or any agreements related to it, and (b) the terms "assignment" and
"interested person" shall have the respective meanings specified in the 1940 Act
and the rules and regulations thereunder, subject to such exemptions as may be
granted by the Securities and Exchange Commission.
SECTION 11. While this Plan is in effect, the selection and nomination
of those Directors who are interested persons of the Fund within the meaning
Section 2(a)(19) of the 1940 Act shall be committed to the discretion of the
Directors then in office who are not interested persons of the Fund.
SECTION 12. This Plan shall not obligate the Fund or any other party to
enter into an agreement with any particular person.
EXHIBIT (15)(c)
CLASS D DISTRIBUTION PLAN
[CORPORATE TRUST CLASS]
FIRST AMERICAN FUNDS, INC.
WHEREAS, FIRST AMERICAN FUNDS, INC. (the "Fund") is engaged in business
as an open-end investment company registered under the Investment Company Act of
1940, as amended ("1940 Act"); and
WHEREAS, the Directors of the Fund have determined that there is a
reasonable likelihood that the following Distribution Plan will benefit the Fund
and the owners of Class D (corporate trust) shares of Common Stock
("Shareholders") in the Fund;
NOW, THEREFORE, the Directors of the Fund hereby adopt this
Distribution Plan pursuant to Rule 12b-1 under the 1940 Act.
SECTION 1. The Fund has adopted this Class D Distribution Plan ("Plan")
to enable the Fund to directly or indirectly bear expenses relating to the
distribution and shareholder servicing of Class D corporate trust shares of
Common Stock ("Shares") of the portfolios of the Fund, as now in existence or
hereinafter created from time to time (each a "Portfolio").
SECTION 2. The Shares of each Portfolio is authorized to pay the
principal underwriter of the Fund's shares (the "Distributor") a total fee in
connection with the servicing of shareholder accounts of such class and in
connection with distribution-related services provided in respect of such class,
calculated and payable monthly, at the annual rate of .15% of the value of the
average daily net assets of such Shares. All or any portion of such total fee
may be payable as a Shareholder Servicing Fee, and all or any portion of such
total fee may be payable as a Distribution Fee, as determined from time to time
by the Fund's Board of Directors. Until further action by the Board of
Directors, all of such fee shall be designated and payable as a Shareholder
Servicing Fee.
SECTION 3.
(a) The Shareholder Servicing Fee may be used by the Distributor
to provide compensation for ongoing servicing and/or
maintenance of shareholder accounts with respect to the Shares
of the applicable Portfolios of the Fund. Compensation may be
paid by the Distributor to persons, including employees of the
Distributor, and institutions who respond to inquiries of
holders of Shares regarding their ownership of shares or their
accounts with the Fund or who provide other administrative or
accounting services not otherwise required to be provided by
the Fund's investment adviser, transfer agent or other agent
of the Fund.
(b) The Distribution Fee may be used by the Distributor to provide
initial and ongoing sales compensation to its investment
executives and to other broker-dealers in respect of sales of
Shares of the applicable Portfolios of the Fund and to pay for
other advertising and promotional expenses in connection with
the distribution of such Shares. These advertising and
promotional expenses include, by way of example but not by way
of limitation, costs of printing and mailing prospectuses,
statements of additional information and shareholder reports
to prospective investors; preparation and distribution of
sales literature; advertising of any type; an allocation of
overhead and other expenses of the Distributor related to the
distribution of such Shares; and payments to, and expenses of,
officers, employees or representatives of the Distributor, of
other broker-dealers, banks or other financial institutions,
and of any other persons who provide support services in
connection with the distribution of such Shares, including
travel, entertainment, and telephone expenses.
(c) Payments under the Plan are not tied exclusively to the
expenses for shareholder servicing and distribution related
activities actually incurred by the Distributor, so that such
payments may exceed expenses actually incurred by the
Distributor. The Fund's Board of Directors will evaluate the
appropriateness of the Plan and its payment terms on a
continuing basis and in doing so will consider all relevant
factors, including expenses borne by the Distributor and
amounts it receives under the Plan.
(d) The Fund's investment adviser and the Distributor may, at
their option and in their sole discretion, make payments from
their own resources to cover costs of additional distribution
and shareholder servicing activities.
SECTION 4. This Plan shall not take effect with respect to a Portfolio
until it has been approved (a) by a vote of at least a majority of the
outstanding voting securities of the Shares of such Portfolio; and (b) together
with any related agreements, by votes of the majority of both (i) the Directors
of the Fund and (ii) the Qualified Directors, cast in person at a Board of
Directors meeting called for the purpose of voting on this Plan or such
agreement.
SECTION 5. This Plan shall continue in effect for a period of more than
one year after it takes effect only for so long as such continuance is
specifically approved at least annually in the manner provided in Part (b) of
Section 4 herein for the approval of this Plan.
SECTION 6. Any person authorized to direct the disposition of monies
paid or payable by the Fund pursuant to this Plan or any related agreement shall
provide to the Directors of the Fund, at least quarterly, a written report of
the amounts so expended and the purposes for which such expenditures were made.
SECTION 7. This Plan may be terminated at any time with respect to any
Portfolio by the vote of a majority of the Qualified Directors or by vote of a
majority of the Portfolio's Class D voting securities.
SECTION 8. All agreements with any person relating to implementation of
this Plan shall be in writing, and any agreement related to this Plan shall
provide (a) that such agreement may be terminated at any time with respect to
any Portfolio, without payment of any penalty, by the vote of a majority of the
Qualified Directors or by the vote of Shareholders holding a majority of the
Portfolio's outstanding Class D voting securities, on not more than 60 days
written notice to any other party to the agreement; and (b) that such agreement
shall terminate automatically in the event of its assignment.
SECTION 9. This Plan may not be amended to increase materially the
amount of distribution expenses permitted pursuant to Section 2 hereof without
the approval of Shareholders holding a majority of the outstanding Class D
voting securities of the applicable Portfolio, and all material amendments to
this Plan shall be approved in the manner provided in Part (b) of Section 4
herein for the approval of this Plan.
SECTION 10. As used in this Plan, (a) the term "Qualified Directors"
shall mean those Directors of the Fund who are not interested persons of the
Fund, and have no direct or indirect financial interest in the operation of this
Plan or any agreements related to it, and (b) the terms "assignment" and
"interested person" shall have the respective meanings specified in the 1940 Act
and the rules and regulations thereunder, subject to such exemptions as may be
granted by the Securities and Exchange Commission.
SECTION 11. While this Plan is in effect, the selection and nomination
of those Directors who are not interested persons of the Fund within the meaning
of Section 2(a)(19) of the 1940 Act shall be committed to the discretion of the
Directors then in office who are not interested persons of the Fund.
SECTION 12. This Plan shall not obligate the Fund or any other party to
enter into an agreement with any particular person.
EXHIBIT (15)(d)
SERVICE PLAN
[CLASS B SHARES - CONTINGENT DEFERRED SALES CHARGE CLASSES]
FIRST AMERICAN FUNDS, INC.
WHEREAS, FIRST AMERICAN FUNDS, INC. (the "Fund") is engaged in business
as an open-end investment company registered under the Investment Company Act of
1940, as amended ("1940 Act"); and
WHEREAS, the Directors of the Fund have determined that there is a
reasonable likelihood that the following Service Plan will benefit the Fund and
the owners of the Class B Shares (the "Shares") of the portfolios of the Fund:
NOW, THEREFORE, the Directors of the Fund hereby adopt this Service
Plan in accordance with the conditions contained in the multi-class exemptive
order granted by the Securities and Exchange Commission and applicable to the
Fund.
SECTION 1. The Fund has adopted this Service Plan ("Plan") to enable
the Fund to directly or indirectly bear expenses relating to the shareholder
servicing of the Shares of the Fund's portfolios as now in existence or
hereinafter created from time to time (each a "Portfolio").
SECTION 2. The Shares of each Portfolio are authorized to pay the
principal underwriter of the Shares (the "Distributor") a fee in connection with
the personal, ongoing servicing of shareholder accounts of such Shares,
calculated and payable monthly, at the annual rate of .25% of the value of the
average daily net assets of such class.
SECTION 3.
(a) The service fee payable to the Distributor pursuant to Section
2 hereof may be used by the Distributor to provide
compensation for personal, ongoing servicing and/or
maintenance of shareholder accounts with respect to the Shares
of the applicable Portfolios. Compensation may be paid by the
Distributor, or any portion of the fee may be reallowed, to
persons, including employees of the Distributor, and
institutions who respond to inquiries of holders of the Shares
regarding their ownership of Shares or their accounts with the
Fund or who provide other administrative or accounting
services not otherwise required to be provided by the Fund's
investment adviser, transfer agent or other agent of the Fund.
Notwithstanding the foregoing, if the National Association of
Securities Dealers, Inc. ("NASD") adopts a definition of
"service fee" for purposes of Section 26(d) of the NASD Rules
of Fair Practice that differs from the definition of
shareholder servicing activities in this paragraph, or if the
NASD adopts a related definition intended to define the same
concept, the definition of shareholder servicing activities in
this paragraph shall be automatically amended, without further
action of the parties, to conform to such NASD definition.
(b) Payments under the Plan are not tied exclusively to the
expenses for shareholder servicing activities actually
incurred by the Distributor, so that such payments may exceed
expenses actually incurred by the Distributor. The Fund's
Board of Directors will evaluated the appropriateness of the
Plan and its payment terms on a continuing basis and in doing
so will consider all relevant factors, including expenses
borne by the Distributor and amounts it receives under the
Plan.
(c) The Fund's investment adviser and the Distributor may, at
their option and in their sole discretion, make payments from
their own resources to cover costs of additional shareholder
servicing activities.
SECTION 4. This Plan shall not take effect with respect to a Portfolio
until it has been approved, together with any related agreements, by votes of
the majority of both (i) the Directors of the Fund and (ii) the Qualified
Directors, cast in person at a Board of Directors meeting called for the purpose
of voting on this Plan and such agreement.
SECTION 5. This Plan shall continue in effect for a period of more than
one year after it takes effect only for so long as such continuance is
specifically approved at least annually in the manner provided in Section 4
herein for the approval of this Plan.
SECTION 6. Any person authorized to direct the disposition of monies
paid or payable by the Fund pursuant to this Plan or any related agreement shall
provide to the Directors of the Fund, at least quarterly, a written report of
the amounts so expended and the purposes for which such expenditures were made.
SECTION 7. This Plan may be terminated at any time with respect to any
Portfolio by majority of the Qualified Directors or by vote of a majority of the
Portfolio's outstanding Shares class voting securities.
SECTION 8. All agreements with any person relating to implementation of
this Plan shall be in writing, any agreement related to this Plan shall provide
(a) that such agreement may be terminated at any time with respect to any
Portfolio, without payment of any penalty, by the vote of a majority of the
Qualified Directors or by the vote of a majority of the Portfolio's outstanding
Shares on not more than 60 days written notice to any other party to the
agreement; and (b) that such agreement shall terminate automatically in the
event of its assignment.
SECTION 9. This Plan may not be amended to increase materially the
amount of shareholder servicing expenses permitted pursuant to Section 2 hereof
without the approval of a majority of the outstanding Shares of the applicable
Portfolio, and all material amendments to this Plan shall be approved in the
manner provided in Section 4 herein for the approval of this Plan.
SECTION 10. As used in this Plan, (a) the term "Qualified Directors"
shall mean those Directors of the Fund who are not interested persons of the
Fund, and have no direct or indirect financial interest in the operation of this
Plan or any agreements related to it, and (b) the terms "assignment" and
"interested person" shall have the respective meanings specified in the 1940 Act
and the rules and regulations thereunder, subject to such exemptions as may be
granted by the Securities and Exchange Commission.
SECTION 11. While this Plan is in effect, the selection and nomination
of those Directors who are not interested persons of the Fund within the meaning
of Section 2(a)(19) of the 1940 Act shall be committed to the discretion of the
Directors then in office who are not interested persons of the Fund.
SECTION 12. This Plan shall not obligate the Fund or any other party to
enter into an agreement with any particular person.
First American Funds, Inc.
7 Day Yield
7 Day Effective Yield
Last 7 daily dividend factors:
<TABLE>
<CAPTION>
Government Treasury
Prime Obligations Obligations Obligations
Class A Class A Class A
<S> <C> <C> <C>
day 1............................................... 0.000143912
day 2............................................... 0.000143862
day 3............................................... 0.000143806
day 4............................................... 0.000144409
day 5............................................... 0.000144507
day 6............................................... 0.000147506
day 7............................................... 0.000147506
Base Period Return 0.001015508 0 0
Annualized Yield=(bpr/1)x365/7 5.30% 0.00% 0.00%
Effective Yield=((bpr + 1) to the 365/7
power) - 1 5.44% 0.00% 0.00%
</TABLE>
<TABLE>
<CAPTION>
Government Treasury
Prime Obligations Obligations Obligations
Class B Class B Class B
<S> <C> <C> <C>
day 1............................................... 0.00012341
day 2............................................... 0.00012414
day 3............................................... 0.00012341
day 4............................................... 0.00012414
day 5............................................... 0.00012414
day 6............................................... 0.000127791
day 7............................................... 0.000127791
Base Period Return 0.000874822 0 0
Annualized Yield=(bpr/1)x365/7 4.56% 0.00% 0.00%
Effective Yield=((bpr + 1) to the 365/7
power) - 1 4.67% 0.00% 0.00%
</TABLE>
<TABLE>
<CAPTION>
Government Treasury
Prime Obligations Obligations Obligations
Class C Class C Class C
<S> <C> <C> <C>
day 1............................................... 0.000150762 0.000147267 0.000144825
day 2............................................... 0.000150712 0.000148606 0.000147126
day 3............................................... 0.000150662 0.000147631 0.000145637
day 4............................................... 0.000151272 0.000149388 0.000148136
day 5............................................... 0.000151357 0.00014956 0.000149054
day 6............................................... 0.000154356 0.000154166 0.000155724
day 7............................................... 0.000154356 0.000154166 0.000155724
Base Period Return 0.001063477 0.001050784 0.001046226
Annualized Yield=(bpr/1)x365/7 5.55% 5.48% 5.46%
Effective Yield=((bpr + 1) to the 365/7
power) - 1 5.70% 5.63% 5.60%
</TABLE>
<TABLE>
<CAPTION>
Government Treasury
Prime Obligations Obligations Obligations
Class D Class D Class D
<S> <C> <C> <C>
day 1............................................... 0.000146552 0.000143155 0.000140717
day 2............................................... 0.000146599 0.000144495 0.000143019
day 3............................................... 0.000146483 0.000143519 0.000141530
day 4............................................... 0.000147155 0.000145277 0.000144030
day 5............................................... 0.000147246 0.000145449 0.000144948
day 6............................................... 0.000150246 0.000150055 0.000151617
day 7............................................... 0.000150246 0.000150055 0.000151617
Base Period Return 0.001034527 0.001022005 0.001017478
Annualized Yield=(bpr/1)x365/7 5.39% 5.33% 5.31%
Effective Yield=((bpr + 1) to the 365/7
power) - 1 5.54% 5.47% 5.45%
</TABLE>
Financial Data Schedules -- See Exhibits Numbered 27
EXHIBIT (18)
FIRST AMERICAN FUNDS, INC.
MULTIPLE CLASS PLAN PURSUANT TO RULE 18f-3
ADOPTED JUNE 14, 1995
I. PREAMBLE.
Each of the funds listed below (each a "Fund," and collectively the
"Funds"), each a portfolio of First American Funds, Inc. (the "Company"), has
elected to rely on Rule 18f-3 under the Investment Company Act of 1940, as
amended (the "1940 Act") in offering multiple classes of shares in each Fund:
Prime Obligations Fund Government Obligations Fund
Treasury Obligations Fund
This Plan sets forth the differences among classes of shares of the Funds,
including distribution arrangements, shareholder services, expense allocations,
conversion and exchange options, and voting rights.
II. ATTRIBUTES OF SHARE CLASSES.
The attributes of each existing class of the existing Funds (i.e.,
Class A [Retail A], Class B [Retail B], Class C [Institutional] and Class D
[Corporate Trust] with respect to Prime Obligations Fund, and Class C
[Institutional] and Class D [Corporate Trust] with respect to Treasury
Obligations Fund and Government Obligations Fund), with respect to distribution
arrangements, shareholder services, and conversion and exchange options shall be
as set forth in the following materials:
A. Retail Class Prospectus of Prime Obligations Funds dated
January 20, 1995 (with respect to the Class A and Class B
shares of such Fund).
B. Institutional Class Prospectus of the three respective Funds
dated January 20, 1995 (with respect to the Class C shares of
each such Fund).
C. Corporate Trust Class Prospectus of the three respective Funds
dated January 20, 1995 (with respect to the Class D shares of
each such Fund).
D. Statement of Additional Information of the respective Funds
dated January 20, 1995.
E. Class A Plan of Distribution in the form reapproved by the
Board of Directors on December 7, 1994 (with respect to the
Class A shares of Prime Obligations Fund).
F. Class B Plan of Distribution in the form reapproved by the
Board of Directors on December 7, 1994 (with respect to the
Class B shares of Prime Obligations Fund).
G. Class B Service Plan in the form reapproved by the Board of
Directors on December 7, 1994 (with respect to the Class B
shares of Prime Obligations Fund).
H. Class D Plan of Distribution in the form reapproved by the
Board of Directors on December 7, 1994 (with respect to the
Class D shares of each of the Funds).
Expenses of such existing classes of the Funds shall continue to be allocated in
the manner set forth in III below. Each such existing class shall have exclusive
voting rights on any matter submitted to shareholders that relates solely to its
arrangement and shall have separate voting rights on any matter submitted to
shareholders in which the interests of one class differ from the interests of
any other class.
III. EXPENSE ALLOCATIONS.
Expenses of the existing classes of the existing Funds shall be
allocated as follows:
A. Distribution fees and service fees relating to the respective
classes of shares, as set forth in the materials referred to
in II above, shall be borne exclusively by the classes of
shares to which they relate.
B. Except as set forth in A above, expenses of the Funds shall be
borne at the Fund level and shall not be allocated on a class
basis.
Unless and until this Plan is amended to provide otherwise, the
methodology and procedures for calculating the net asset value of the respective
classes of shares of the Funds and the allocation of income and expenses among
the respective classes shall be as set forth in the "SEI Financial Management
Corporation -- MultiClass Accounting Methodology" and "Report" dated February
10, 1995 rendered by Arthur Andersen L.L.P.
The foregoing allocations shall in all cases be made in a manner
consistent with the Company's private letter ruling from the Internal Revenue
Service with respect to multiple classes of shares.
IV. AMENDMENT OF PLAN; PERIODIC REVIEW.
A. New Funds and New Classes. With respect to any new portfolio of the
Company created after the date of this Plan and any new class of shares of the
existing Funds created after the date of this Plan, the Board of Directors of
the Company shall approve amendments to this Plan setting forth the attributes
of the classes of shares of such new portfolio or of such new class of shares.
B. Material Amendments and Periodic Reviews. The Board of Directors of
the Company, including a majority of the independent directors, shall
periodically review this Plan for its continued appropriateness and shall
approve any material amendment of this Plan as it relates to any class of any
Fund covered by this Plan.
EXHIBIT (19)
FIRST AMERICAN FUNDS, INC.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints David Lee, Jean Young, and Carmen
V. Romeo, and each of them, his or her true and lawful attorneys-in-fact and
agents, each acting alone, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities, to sign a Registration Statement on Form N-1A of First American
Funds, Inc., and any and all amendments thereto, including post-effective
amendments, and to file the same, with all exhibits thereto and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, each acting alone, full power and
authority to do and perform to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, each acting alone, or the substitutes for such
attorneys-in-fact and agents, may lawfully do or cause to be done by virtue
hereof.
Signature Title Date
/s/ Robert J. Dayton Director September 30, 1994
- --------------------------
Robert J. Dayton
/s/ Welles B. Eastman Director September 30, 1994
- --------------------------
Welles B. Eastman
/s/ Irving D. Fish Director September 30, 1994
- --------------------------
Irving D. Fish
/s/ Leonard W. Kedrowski Director September 30, 1994
- --------------------------
Leonard W. Kedrowski
/s/ Joseph D. Strauss Director September 30, 1994
- --------------------------
Joseph D. Strauss
/s/ Virginia L. Stringer Director September 30, 1994
- --------------------------
Virginia L. Stringer
/s/ Gae B. Veit Director September 30, 1994
- --------------------------
Gae B. Veit
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