SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[X] Preliminary proxy statement
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
FIRST AMERICAN INVESTMENT FUNDS, INC.
FIRST AMERICAN FUNDS, INC.
FIRST AMERICAN STRATEGY FUNDS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the
filing fee is calculated and state how it was determined.)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing party:
(4) Date filed:
<PAGE>
FIRST AMERICAN INVESTMENT FUNDS, INC.
FIRST AMERICAN FUNDS, INC.
FIRST AMERICAN STRATEGY FUNDS, INC.
OAKS, PENNSYLVANIA 19456
NOTICE OF JOINT SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON OCTOBER 31, 1997
NOTICE IS HEREBY GIVEN that a joint special meeting of shareholders of
First American Investment Funds, Inc. ("FAIF"), First American Funds, Inc.
("FAF"), and First American Strategy Funds, Inc. ("FASF"), will be held at 10:00
a.m. Eastern time, on Friday, October 31, 1997, in the Management Conference
Room of SEI Investments Management Corporation, Oaks, Pennsylvania 19456. Each
of FAIF, FAF and FASF is referred to herein individually as a "Company" and
collectively as the "Companies." Each series within each of FAIF, FAF and FASF
comprises a separate mutual fund and is referred to herein individually as a
"Fund" and collectively as the "Funds."
The purposes of the joint special meeting are as follows:
1. To establish the number of members of the Board of Directors of
each Company at seven and to elect each Company's Board of
Directors.
2. To ratify the selection of KPMG Peat Marwick LLP as independent
public accountants for each Company for the current fiscal year.
3. To consider and vote on a proposal that would eliminate a
fundamental investment restriction of FAIF, which would allow an
FAIF Fund to mortgage, pledge or hypothecate its assets.
4. To consider and vote on a proposed amendment to FAIF's articles
of incorporation which would reduce the quorum required to
conduct business at shareholders meetings from 30% of all
outstanding shares to 10% of all outstanding shares of FAIF or,
in the case of voting by classes or series of shares, such
percentages of the applicable classes or series.
5. To transact such other business as may properly come before the
joint special meeting.
THE BOARD OF DIRECTORS OF EACH APPLICABLE COMPANY RECOMMENDS APPROVAL
OF PROPOSALS 1, 2, 3 AND 4 LISTED ABOVE.
Shareholders of record on September 2, 1997 are the only persons
entitled to receive notice of and to vote at the joint special meeting and any
adjournments thereof. Your attention is directed to the attached Proxy
Statement.
Shareholders should note that they will receive a proxy for each Fund
in which they own shares.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE JOINT SPECIAL MEETING,
(i) PLEASE FILL IN, SIGN, DATE AND MAIL THE ENCLOSED PROXY OR PROXIES IN THE
ENCLOSED PREPAID RETURN ENVELOPE AS PROMPTLY AS POSSIBLE IN ORDER TO SAVE ANY
FURTHER SOLICITATION EXPENSE, OR (ii) VOTE BY TELEPHONE BY FOLLOWING THE
INSTRUCTIONS ENCLOSED HEREIN. SHAREHOLDERS WHOSE SHARES ARE HELD IN THE NAME OF
NATIONAL FINANCIAL SERVICES CORPORATION MAY NOT VOTE BY TELEPHONE.
BY ORDER OF THE BOARDS OF DIRECTORS
Michael J. Radmer, Secretary
Dated: September ___, 1997
<PAGE>
PRELIMINARY COPY
FIRST AMERICAN INVESTMENT FUNDS, INC.
FIRST AMERICAN FUNDS, INC.
FIRST AMERICAN STRATEGY FUNDS, INC.
OAKS, PENNSYLVANIA 19456
---------------
PROXY STATEMENT
---------------
JOINT SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON OCTOBER 31, 1997
The enclosed proxy is solicited by the Board of Directors of each of
First American Investment Funds, Inc. ("FAIF"), First American Funds, Inc.
("FAF"), and First American Strategy Funds, Inc. ("FASF"), in connection with a
joint special meeting of shareholders (the "Meeting") to be held on October 31,
1997, and any adjournments thereof. Each of FAIF, FAF and FASF is referred to
herein individually as a "Company" and collectively as the "Companies." Each
series within each of FAIF, FAF and FASF comprises a separate mutual fund and is
referred to herein individually as a "Fund" and collectively as the "Funds."
The costs of solicitation including the cost of preparing and mailing
the Notice of Joint Special Meeting and this Proxy Statement, will be allocated
among and paid by the Funds. Directors and officers of the Companies, employees
of First Bank National Association (the investment adviser for the Funds), and
employees of SEI Investments Management Corporation (the administrator for the
Funds) may, without cost to the Funds, solicit proxies for and on behalf of
management of the Companies by means of mail, telephone, or personal calls.
Shareholders may vote by (i) mail, by marking, signing, dating and
returning the enclosed proxy in the enclosed postage-paid envelope, or (ii)
telephone by following the instructions enclosed herein. Shareholders whose
shares are held in the name of National Financial Services Corporation may not
vote by telephone.
A proxy may be revoked by giving written notice, in person or by mail,
of revocation before the Meeting to the Companies at their principal executive
offices at Oaks, Pennsylvania 19456, or by properly executing and submitting a
later-dated proxy, or by voting in person at the Meeting. Unless revoked,
properly executed proxies in which choices are not specified by the shareholder
will be voted "for" each item for which no choice is specified in accordance
with the recommendation of the applicable Boards of Directors. Where choices are
specified by shareholders in the proxy, the proxy will be voted or the vote will
be withheld in accordance with the shareholder's choice.
This proxy statement and the accompanying form of proxy are being sent
or given to shareholders beginning on or about ________, 1997.
Abstentions will be counted as shares present at the Meeting for
purposes of determining whether a quorum is present and whether the requisite
percentage of votes present at the Meeting voted to approve a proposal. Broker
"non-votes" will not be counted as present at the Meeting for either such
purpose.
Only shareholders of record on September 2, 1997 may vote at the
Meeting or any adjournment thereof. As of that date, the following numbers of
shares of common stock of the respective classes of the Funds were issued and
outstanding:
<PAGE>
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS D
FUND SHARES SHARES SHARES
---- ------ ------ ------
FAIF:
<S> <C> <C> <C> <C>
Stock Fund..................................... xxx,xxx,xxx xxx,xxx,xxx xxx,xxx,xxx N/A
Equity Index Fund.............................. N/A
Balanced Fund.................................. N/A
Asset Allocation Fund.......................... N/A
Equity Income Fund............................. N/A
Diversified Growth Fund........................ N/A
Emerging Growth Fund........................... N/A
Regional Equity Fund........................... N/A
Special Equity Fund............................ N/A
Technology Fund................................ N/A
Health Sciences Fund........................... N/A
Real Estate Securities Fund.................... N/A
International Fund............................. N/A
Micro Cap Value Fund........................... N/A
Limited Term Income Fund....................... 0 N/A
Intermediate Term Income Fund.................. 0 N/A
Fixed Income Fund.............................. N/A
Intermediate Government Bond Fund.............. 0 N/A
Intermediate Term Tax Free Fund................ 0 N/A
Minnesota Insured Intermediate
Tax Free Fund............................. 0 N/A
Colorado Intermediate Tax Free Fund............ 0 N/A
Oregon Intermediate Tax Free Fund.............. N/A N/A N/A
California Intermediate
Tax Free Fund............................. N/A N/A
FAF:
Prime Obligations Fund.........................
Treasury Obligations Fund...................... N/A N/A
Government Obligations Fund.................... N/A N/A
FASF:
Strategy Income Fund........................... N/A N/A N/A
Strategy Growth and Income Fund................ N/A N/A N/A
Strategy Growth Fund........................... N/A N/A N/A
Strategy Aggressive Growth Fund................ N/A N/A N/A
</TABLE>
For additional share ownership information, see "Share Ownership"
elsewhere herein. Each shareholder is entitled to one vote for each share held.
Voting for the election of directors is not cumulative, which means that the
holders of a majority of a Company's outstanding shares have the power to elect
that Company's entire Board of Directors. None of the matters to be presented at
the Meeting will entitle any shareholder to appraisal rights.
If sufficient votes are not received for the adoption of a proposal by
the scheduled Meeting date, the persons named as proxies may propose one or more
adjournments of the Meeting, for a period of up to 120 days in the aggregate, to
permit further solicitation of proxies. Such adjournments with respect to a
Company will require the affirmative vote of a majority of the shares of such
Company present in person or by proxy at the Meeting. The persons named as
proxies will vote in favor of such adjournments if they are instructed by more
than a majority of the shares of the applicable Company represented in person or
by proxy to vote for the applicable proposal.
<PAGE>
The following table illustrates which Proposals are to be voted upon by
shareholders of a Fund:
<TABLE>
<CAPTION>
PROPOSAL NUMBER
-----------------------------------------------------------
1 2 3 4
--------- ---------- ----------- -------------
APPROVE APPROVE
AMENDMENT AMENDMENT
ELECT TO TO ARTICLES
BOARD OF RATIFY INVESTMENT OF
FUND DIRECTORS ACCOUNTANT RESTRICTION INCORPORATION
- ------------------------------------- --------- ---------- ----------- -------------
<S> <C> <C> <C> <C>
FAIF:
Stock Fund........................... X X X X
Equity Index Fund.................... X X X X
Balanced Fund........................ X X X X
Asset Allocation Fund................ X X X X
Equity Income Fund................... X X X X
Diversified Growth Fund.............. X X X X
Emerging Growth Fund................. X X X X
Regional Equity Fund................. X X X X
Special Equity Fund.................. X X X X
Technology Fund...................... X X X X
Health Sciences Fund................. X X X X
Real Estate Securities Fund.......... X X X X
International Fund................... X X X X
Micro Cap Value Fund................. X X X X
Limited Term Income Fund............. X X X X
Intermediate Term
Income Fund..................... X X X X
Fixed Income Fund.................... X X X X
Intermediate Government
Bond Fund....................... X X X X
Intermediate Tax Free Fund........... X X X X
Minnesota Insured
Intermediate Tax Free Fund...... X X X X
Colorado Intermediate
Tax Free Fund................... X X X X
Oregon Intermediate
Tax Free Fund................... X X X X
California Intermediate
Tax Free Fund................... X X X X
FAF:
Prime Obligations Fund............... X X
Treasury Obligations Fund............ X X
Government Obligations Fund.......... X X
FASF:
Strategy Income Fund................. X X
Strategy Growth and
Income Fund..................... X X
Strategy Growth Fund................. X X
Strategy Aggressive
Growth Fund..................... X X
</TABLE>
<PAGE>
The investment adviser for the Funds is First Bank National
Association, 601 Second Avenue South, Minneapolis, Minnesota; the distributor
(principal underwriter) for the Funds is SEI Investments Distribution Co., Oaks,
Pennsylvania 19456; and the administrator for the Funds is SEI Investments
Management Corporation, Oaks, Pennsylvania 19456.
ANNUAL AND SEMI-ANNUAL REPORTS
Each Company will furnish, without charge, a copy of its most recent
annual report and succeeding semi-annual report, if any, to any shareholder of
such Company upon request. Such requests should be directed to SEI Investments
Management Corporation, Oaks, Pennsylvania 19456, or may be made by toll-free
telephone call at 1-800-637-2548 in the case of FAIF or FAF or at 1-888-99STRAT
in the case of FASF. The Companies will provide copies of such reports to a
requesting shareholder by first class mail or other means designed to assure
prompt delivery within three business days of the request.
PROPOSAL ONE
ELECTION OF DIRECTORS
Management of each Company recommends that the number of directors to
be elected at the Meeting be set at seven and that the seven nominees named
below be elected as directors. The enclosed proxy will be voted for the election
of each nominee named below unless such authority is withheld in the proxy. The
term of office of the persons elected will be until the next meeting of
shareholders of the applicable Company or until their successors are elected and
shall qualify. In accordance with the articles of incorporation and bylaws of
the respective Companies and applicable state law, management of the respective
companies does not currently intend to hold annual or periodically scheduled
regular meetings of shareholders.
Pertinent information regarding the nominees and their principal
occupations during the past five years is set forth below. Information
concerning the nominees' share ownership is set forth elsewhere herein under
"Share Ownership."
ROBERT J. DAYTON: Director of FAIF since September, of FAF since
December 1994 and of FASF since June 1996; Chairman (1989-1993) and
Chief Executive Officer (1993-present), Okabena Company (private family
investment office). Age: 54.
ANDREW M. HUNTER III: Director of FAIF, FAF and FASF since January
1997; Chairman of Hunter, Keith Industries, a diversified manufacturing
and services management company, since 1975. Age: 49.
LEONARD W. KEDROWSKI: Director of FAIF and FAF since November 1993 and
of FASF since June 1996; President and owner of Executive Management
Consulting, Inc., a management consulting firm; 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: 55.
* ROBERT L. SPIES: Director of FAIF, FAF and FASF since January 31,
1997; employed by First Bank System, Inc. and subsidiaries from 1957 to
January 31, 1997, most recently as Vice President, First Bank National
Association. Age: 62.
JOSEPH D. STRAUSS: Director of FAF since 1984, of FAIF since April 1991
and of FASF since June 1996; Chair of FAF's and FAIF's Boards from 1993
to September 1997 and of FASF's Board from 1996 to September 1997;
President of FAF and FAIF from June 1989 to November 1989;
<PAGE>
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: 56.
VIRGINIA L. STRINGER: Director of FAIF since August 1987, of FAF since
April 1991 and of FASF since June 1996; Chair of the Board of FAIF, FAF
and FASF since September 1997; 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: 52.
ROBERT A. GIBSON: Vice President North America-Mountain Region for
United Airlines since June 1995; prior to his current position, served
most recently as Vice President-Mountain Region in Denver and Vice
President-Northwest Region in San Francisco; employee at United
Airlines since 1967. Age _______.
-----------------
* Denotes directors who are "interested persons" as defined in the
Investment Company Act of 1940. Mr. Spies is deemed to be an
"interested person" due to his ownership of shares of the parent
company of the Funds' investment adviser.
The Board of Directors has established Audit and Board Development
(nominating) Committees. Each of the Companies does not have a compensation
committee.
The functions performed by the Audit Committee are to recommend
annually to the Board a firm of independent certified public accountants to
audit the books and records of the Funds for the ensuing year; to monitor that
firm's performance; to review with the firm the scope and results of each audit
and determine the need, if any, to extend audit procedures; to confer with the
firm and representatives of the Funds on matters concerning the Funds' financial
statements and reports, including the appropriateness of their accounting
practices and of their internal controls and procedures; to evaluate the
independence of the firm; to review procedures to safeguard portfolio
securities; to review the purchase by the Funds from the firm of nonaudit
services; to review all fees paid to the firm; and to facilitate communications
between the firm and the Funds' officers, directors and service providers. The
current members of each Company's Audit Committee are Mr. Kedrowski and Mr.
Spies. The Audit Committee met four times during the fiscal year ended September
30, 1996.
The functions performed by the Board Development (nominating) Committee
are, among others, to recommend to the Board nominees for election as directors
consistent with the needs of the Board and the Funds; to recommend to the Board
a successor to the Chair when a vacancy occurs in that position; to recommend to
the board compensation plans and arrangements for directors; to review the Board
and Fund structures for their effectiveness in meeting the managerial needs of
the Funds. The Board Development Committee does not consider nominees
recommended by shareholders to fill vacancies on the Board. The current members
of each Company's Board Development Committee are Mr. Dayton, Mr. Hunter, Mr.
Strauss and Ms. Stringer. The Board Development Committee met five times during
the fiscal year ended September 30, 1996.
During the fiscal year ended September 30, 1996, the Board of each
Company held a total of seven meetings. During that fiscal year, with respect to
each Company, no incumbent director attended fewer than 75% of the aggregate of
(i) the total number of meetings of the Board held during the period for which
he or she was a director and (ii) the total number of meetings held by all
committees of the Board on which he or she served during the periods that he or
she served.
The First American family of funds, which includes FAIF, FAF and FASF,
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
<PAGE>
($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. These fees are allocated among
the Companies and Funds on the basis of their relative net asset values. Legal
fees and expenses are also paid to Dorsey & Whitney LLP, the law firm of which
Michael J. Radmer, Secretary of FAIF, FAF and FASF, is a partner. No executive
officer or affiliated person of any of the Companies had aggregate compensation
from a Company in excess of $60,000 during such fiscal year. The following table
sets forth the cash compensation received by each incumbent director from each
Company, and from all Companies included in the First American family of funds,
during the fiscal year ended September 30, 1996:
<TABLE>
<CAPTION>
Company Mr. Dayton Mr. Hunter Mr. Kedrowski Mr. Spies Mr. Strauss Ms. Stringer
- ------------------- ---------- ---------- ------------- --------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
FAIF............... $ 11,729 $ 0* $ 12,176 $ 0* $ 20,082 $ 12,620
FAF................ $ 21,121 $ 0* $ 21,974 $ 0* $ 36,293 $ 22,730
FASF**............. $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Total from all
First American
fund companies
(3 companies)...... $ 32,850 $ 0* $ 34,150 $ 0* $ 56,375 $ 33,350
</TABLE>
- ---------------
* Not a director during the fiscal year ended September 30, 1996.
** FASF first offered shares on October 1, 1996. Directors did not receive
compensation from FASF before that time.
THE BOARD OF DIRECTORS OF EACH COMPANY RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" EACH OF THE BOARD NOMINEES NAMED ABOVE. The affirmative vote of a
majority of the shares of the applicable Company represented at the Meeting,
voting together and not as separate series or classes, is sufficient for the
election of the above nominees to the Board of Directors, provided that a quorum
(30% of the outstanding shares in the case of FAIF, 10% of the outstanding
shares in the case of FAF, and 10% of the outstanding shares in the case of
FASF) is present at the Meeting in person or by proxy. Shareholders do not have
the right to cumulate their votes for directors. Unless otherwise instructed,
the proxies will vote for all nominees named. All of the nominees have consented
to serve as directors if elected. In the event any of the nominees are not
candidates for election at the Meeting, the proxies will vote for such other
persons as the Board of Directors may designate. Nothing currently indicates
that such a situation will arise.
PROPOSAL TWO
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Investment Company Act of 1940 (the "1940 Act") provides that every
registered investment company shall be audited at least once each year by
independent public accountants selected by a majority of the directors of the
investment company who are not "interested persons" of the investment company or
its investment adviser. The Investment Company Act of 1940 also provides that
the selection shall be submitted for ratification or rejection by shareholders.
The Board of Directors of each Company, including a majority of the
directors who are not "interested persons" of the Company or its investment
adviser, First Bank National Association, selected KPMG Peat Marwick LLP to
serve as each Company's independent public accountants for the fiscal year ended
September 30, 1997. KPMG Peat Marwick LLP has served as each Company's
independent public accountants since such Company's inception. KPMG Peat Marwick
LLP has no direct or material indirect financial interest in any of the
Companies or in First Bank National Association, other than receipt of fees for
services to the Companies.
<PAGE>
Representatives of KPMG Peat Marwick LLP are expected to be present at
the Meeting. Such representatives will be given the opportunity to make a
statement to shareholders if they choose to do so and are expected to be
available to respond to appropriate questions.
THE BOARD OF DIRECTORS OF EACH COMPANY RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP. The
affirmative vote of a majority of the shares of the applicable Company
represented at the Meeting, voting together and not as separate series or
classes, is sufficient for the ratification of the appointment of KPMG Peat
Marwick LLP, provided that a quorum is present at the Meeting with respect to
the applicable Company in person or by proxy. Unless otherwise instructed, the
proxies will vote for the ratification of the appointment of KPMG Peat Marwick
LLP.
PROPOSAL THREE
APPROVAL OR DISAPPROVAL OF MODIFICATION TO
FUNDAMENTAL POLICY OF FAIF RELATING TO PLEDGE OF ASSETS
Each FAIF Fund is subject to a fundamental investment restriction (No.
4 in FAIF's Statement of Additional Information) to the effect that no such Fund
shall:
Mortgage, pledge or hypothecate its assets, except in an amount not
exceeding 15% of the value of its total assets to secure temporary or
emergency borrowing.
The Board of Directors of FAIF proposes to eliminate this investment
restriction. The limitation on pledging the Funds' assets as collateral reflects
regulatory, business or industry conditions, practices or requirements and
policies that are no longer in effect.
Various of the FAIF Funds may, under the investment policies and
restrictions set forth in their prospectuses, engage in a variety of options
transactions, including the writing of call options on stock indices, interest
rate indices and currency indices. In addition, certain of the FAIF Funds may
enter into a variety of futures transactions, including the purchase of stock
index futures, options on stock index futures, interest rate futures, options on
interest rate futures and other contracts or futures contracts based on or
involving the future delivery of securities or foreign currencies. Options and
futures transactions generally involve the purchase by one party of a right to
receive at a future date securities or cash based on the difference between the
value of the applicable stock index, interest rate index or foreign currency as
set forth in the contract and the actual value of such index or currency at the
time of the expiration date set forth in the contract.
The Funds have found that when they wish to enter into certain options
and futures contracts which are permitted under their investment policies and
restrictions, the counterparty or the applicable options or futures clearing
organization may require them to pledge collateral to secure their delivery or
payment obligation under such contracts. If a counterparty requires collateral,
the Fund would pledge collateral with a value which approximately equals the
dollar amount of the obligation undertaken by the Fund in the applicable
transaction. Because the collateral is pledged simply to secure an obligation
which the Fund already is permitted to undertake, the Funds believe that
pledging collateral in connection with options and futures transactions would
not expose the Funds to additional risk. Pledging assets is not without risk,
however. Because assets that have been pledged to other parties may not be
readily available to a Fund, the Fund may have less flexibility in liquidating
such assets if needed. In addition, if the value of the collateral or the
secured obligation is required to be "marked to market," a Fund may be called
upon to post additional collateral or have the transaction closed out. On the
other hand, this potential risk should be considered together with the potential
benefits, such as the increased ability of the Funds to pursue their respective
investment objectives in a manner already permitted to them.
<PAGE>
THE BOARD OF DIRECTORS OF FAIF RECOMMENDS THAT SHAREHOLDERS VOTE FOR
THE ELIMINATION OF THIS FUNDAMENTAL INVESTMENT RESTRICTION. The adoption of this
proposal requires the favorable vote of a "majority of the outstanding voting
securities," as defined in the 1940 Act, of each FAIF Fund, voting as separate
series. Under the 1940 Act, the term "majority of the outstanding voting
securities" with respect to a given Fund means the lesser of (a) the vote of 67%
or more of the shares of such Fund present at the Meeting, if the holders of
more than 50% of the Fund's outstanding shares are present or represented by
proxy, or (b) the vote of more than 50% of the outstanding shares of the Fund.
Unless otherwise instructed, the proxies will vote to approve the proposed
modification to this fundamental investment restriction.
PROPOSAL FOUR
AMENDMENT OF ARTICLES TO REDUCE QUORUM
REQUIRED FOR SHAREHOLDERS MEETING
Article IV, Section 3 of the Amended and Restated Articles of
Incorporation of FAIF (the "Articles") currently provides as follows with
respect to the quorum required in order to take action at a meeting of
shareholders:
"The presence in person or by proxy of the holders of record
of 30% of the Shares of all Classes issued and outstanding and entitled
to vote thereat shall constitute a quorum for the transaction of
business at all meetings of the stockholders except as otherwise
provided by law or in these Articles of Incorporation and except that
where the holders of Shares of any Class or Series thereof are entitled
to a separate vote as a Class or Series (for purposes of this Section
3, such Series or Class, being referred to as a "Separate Class") or
where the holders of Shares of two or more (but not all) Classes or
series thereof are required to vote as a single Class or Series for the
purposes of this Section 3 (such Series or Classes being referred to as
a "Combined Class"), the presence in person or by proxy of the holders
of 30% of the Shares of that Separate Class or Combined Class, as the
case may be, issued and outstanding and entitled to vote thereat shall
constitute a quorum for such vote."
The Board of Directors of FAIF has approved an amendment to the Articles
reducing the foregoing quorum requirement from 30% to 10% and recommends
adoption of this amendment by shareholders.
The Board believes that a reduction in the quorum requirement is
desirable because it may reduce the time and expense associated with soliciting
and obtaining sufficient proxies from shareholders to conduct shareholders'
meetings concerning relatively routine matters, such as the election of
directors and the ratification of independent auditors. FAIF has experienced low
shareholder voting in connection with past shareholders meetings and, as a
result, its administrator and investment adviser have devoted substantial
resources to soliciting proxies in connection with such meetings. In addition,
shareholders meetings have had to be adjourned on occasion in order to obtain
sufficient proxies to take corporate action. The Board believes that the
decreased quorum requirement may mitigate these difficulties in connection with
future shareholders meetings. It also notes that the other members of the First
American family of funds, First American Funds, Inc., and First American
Strategy Funds, Inc. each have a 10% quorum requirement for shareholders
meetings.
The proposed reduction in the quorum for shareholders meetings would
not affect voting requirements imposed on FAIF by the 1940 Act or Maryland law
with respect to certain issues. Under the 1940 Act, specified kinds of actions
must be approved by shareholders by vote of a "majority of the outstanding
voting securities," as defined in the 1940 Act, of FAIF or of each affected
Fund. Examples of such actions include approval of new Rule 12b-1 distribution
plans, of material increases in amounts payable under existing Rule 12b-1
distribution plans, of new investment advisory agreements, and of changes to a
Fund's fundamental investment policies. Under the 1940 Act, the term "majority
of the
<PAGE>
outstanding voting securities" is defined to mean the lesser of (a) the vote of
67% or more of the shares of such Fund present at the special meeting, if the
holders of more than 50% of a Fund's outstanding shares are present or
represented by proxy, or (b) the vote of more than 50% of the outstanding shares
of the Fund. Thus, these actions cannot be taken unless at least 50% of the
outstanding shares are present or represented by proxy at a shareholders
meeting. The proposed amendment would not have the effect of changing these 1940
Act voting requirements.
Similarly, under Maryland law, amendments to a corporation's articles
of incorporation and certain extraordinary corporate transactions, such as
consolidations and mergers, must be approved by at least two-thirds of all votes
entitled to be cast with respect to the issue. Thus, these actions cannot be
taken unless at least two-thirds of the outstanding shares are present or
represented by proxy at a shareholders meeting. The proposed amendment to FAIF's
Articles would not have the effect of changing these Maryland state law voting
requirements.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THIS
PROPOSAL. Approval of this proposal requires the favorable vote of at least
two-thirds of the outstanding shares of FAIF. Unless otherwise instructed, the
proxies will vote to approve this proposal.
EXECUTIVE OFFICERS
Pertinent information regarding the executive officers of the Companies
and their principal occupations during the past five years is set forth below:
DAVID LEE: President of FAIF and FAF since April 1994 and of FASF since
June 1996; Senior Vice President and Assistant Secretary of FAF and
FAIF beginning June 1, 1993; Senior Vice President of SEI Investment
Distribution Co. (the "Distributor") since 1991; President, GW Sierra
Trust Funds prior to 1991. Age: 44.
CARMEN V. ROMEO: Treasurer and Assistant Secretary of FAIF and FAF
since November 1992 and of FASF since June 1996; 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: 52.
KEVIN P. ROBINS: Vice President and Assistant Secretary of FAIF and FAF
since April 1994 and of FASF since June 1996; Vice President, Assistant
Secretary and General Counsel of the Administrator and the Distributor.
Age: 36.
KATHRYN STANTON: Vice President and Assistant Secretary of FAIF and FAF
since April 1994 and of FASF since June 1996; Vice President and
Assistant Secretary of the Administrator and the Distributor since
April 1994; Associate, Morgan, Lewis & Bockius, from 1989 to 1994. Age:
37.
SANDRA K. ORLOW: Vice President and Assistant Secretary of FAIF and FAF
since 1992 and of FASF since June 1996; Vice President and Assistant
Secretary of SEI, the Administrator and the Distributor since 1983.
Age: 40.
MARC CAHN: Vice President and Assistant Secretary of FAIF, FAF and FASF
since June 1996; Vice President and Assistant Secretary of the
Administrator and Distributor since May 1996; Associate General
Counsel, Barclays Bank PLC, from 1994 to 1996; ERISA Counsel, First
Fidelity Bancorporation, prior to 1994. Age: 39.
BARBARA A. NUGENT: Vice President and Assistant Secretary of FAIF, FAF
and FASF since June 1996; Vice President and Assistant Secretary of the
Administrator and
<PAGE>
Distributor since April 1996; Associate, Drinker, Biddle & Reath, from
1994 to 1996; Assistant Vice President/Administration (1992 to 1993)
and Operations (1988 to 1992), Delaware Service Company, Inc. Age: 39.
STEPHEN G. MEYER: Controller of FAIF and FAF since March 1995 and of
FASF since June 1996; Director of Internal Audit and Risk Management of
SEI from 1992 to 1995; Senior Associate, Coopers & Lybrand, from 1990
to 1992. Age: 31.
MICHAEL J. RADMER: Secretary of FAIF since April 1991, of FAF since
1981 and of FASF since June 1996; Partner, Dorsey & Whitney LLP, a
Minneapolis-based law firm and general counsel of FAIF, FAF and FASF.
Age: 52.
SUPPLEMENTAL INFORMATION
Based on Company records and other information, the Companies believe
that all Securities and Exchange Commission filing requirements applicable to
their directors and officers, their investment adviser, and companies affiliated
with their investment adviser, pursuant to Section 16(a) of the Securities
Exchange Act of 1934, with respect to each Company's fiscal year ended September
30, 1996, were satisfied.
SHAREHOLDER PROPOSALS
The Companies do not hold annual shareholder meetings. Shareholders of
a Company wishing to submit proposals for inclusion in a subsequent proxy
statement of such Company should send their written proposals to such Company
c/o SEI Investments Management Corporation, Oaks, Pennsylvania 19456.
<PAGE>
SHARE OWNERSHIP
As of ________, 1997, no individual director of any Company
beneficially owned more than 1% of the outstanding shares of any class of any
Fund and at such date the officers and directors of the Companies as a group did
not beneficially own more than 1% of the outstanding shares of any class of any
Fund.
The following table sets forth information concerning those persons
known by the Companies to own, of record or beneficially, as of ________, 1997,
more than 5% of the outstanding shares of any class of any Fund:
<TABLE>
<CAPTION>
NUMBER PERCENTAGE
FUND AND CLASS OF SHARES OF CLASS
- ------------------------------------------------------------------------ --------- ----------
<S> <C> <C>
FAIF:
STOCK FUND:
Class A:
[Holders and Addresses].......................................... xxxx xx.x%
Class B:
[Holders and Addresses].......................................... xxxx xx.x%
Class C:
[Holders and Addresses].......................................... xxxx xx.x%
EQUITY INDEX FUND:
Class A:
[Holders and Addresses].......................................... xxxx xx.x%
Class B:
[Holders and Addresses].......................................... xxxx xx.x%
Class C:
[Holders and Addresses].......................................... xxxx xx.x%
BALANCED FUND:
Class A:
[Holders and Addresses].......................................... xxxx xx.x%
Class B:
[Holders and Addresses].......................................... xxxx xx.x%
Class C:
[Holders and Addresses].......................................... xxxx xx.x%
ASSET ALLOCATION FUND:
Class A:
[Holders and Addresses].......................................... xxxx xx.x%
Class B:
[Holders and Addresses].......................................... xxxx xx.x%
Class C:
[Holders and Addresses].......................................... xxxx xx.x%
EQUITY INCOME FUND:
Class A:
[Holders and Addresses].......................................... xxxx xx.x%
Class B:
[Holders and Addresses].......................................... xxxx xx.x%
Class C:
[Holders and Addresses].......................................... xxxx xx.x%
<PAGE>
NUMBER PERCENTAGE
FUND AND CLASS OF SHARES OF CLASS
- ------------------------------------------------------------------------ --------- ----------
DIVERSIFIED GROWTH FUND:
Class A:
[Holders and Addresses].......................................... xxxx xx.x%
Class B:
[Holders and Addresses].......................................... xxxx xx.x%
Class C:
[Holders and Addresses].......................................... xxxx xx.x%
EMERGING GROWTH FUND:
Class A:
[Holders and Addresses].......................................... xxxx xx.x%
Class B:
[Holders and Addresses].......................................... xxxx xx.x%
Class C:
[Holders and Addresses].......................................... xxxx xx.x%
REGIONAL EQUITY FUND:
Class A:
[Holders and Addresses].......................................... xxxx xx.x%
Class B:
[Holders and Addresses].......................................... xxxx xx.x%
Class C:
[Holders and Addresses].......................................... xxxx xx.x%
SPECIAL EQUITY FUND:
Class A:
[Holders and Addresses].......................................... xxxx xx.x%
Class B:
[Holders and Addresses].......................................... xxxx xx.x%
Class C:
[Holders and Addresses].......................................... xxxx xx.x%
TECHNOLOGY FUND:
Class A:
[Holders and Addresses].......................................... xxxx xx.x%
Class B:
[Holders and Addresses].......................................... xxxx xx.x%
Class C:
[Holders and Addresses].......................................... xxxx xx.x%
HEALTH SCIENCES FUND:
Class A:
[Holders and Addresses].......................................... xxxx xx.x%
Class B:
[Holders and Addresses].......................................... xxxx xx.x%
Class C:
[Holders and Addresses].......................................... xxxx xx.x%
REAL ESTATE SECURITIES FUND:
Class A:
[Holders and Addresses].......................................... xxxx xx.x%
Class B:
[Holders and Addresses].......................................... xxxx xx.x%
Class C:
[Holders and Addresses].......................................... xxxx xx.x%
<PAGE>
NUMBER PERCENTAGE
FUND AND CLASS OF SHARES OF CLASS
- ------------------------------------------------------------------------ --------- ----------
INTERNATIONAL FUND:
Class A:
[Holders and Addresses].......................................... xxxx xx.x%
Class B:
[Holders and Addresses].......................................... xxxx xx.x%
Class C:
[Holders and Addresses].......................................... xxxx xx.x%
MICRO CAP VALUE FUND:
Class A:
[Holders and Addresses].......................................... xxxx xx.x%
Class B:
[Holders and Addresses].......................................... xxxx xx.x%
Class C:
[Holders and Addresses].......................................... xxxx xx.x%
LIMITED TERM INCOME FUND:
Class A:
[Holders and Addresses].......................................... xxxx xx.x%
Class C:
[Holders and Addresses].......................................... xxxx xx.x%
INTERMEDIATE TERM INCOME FUND:
Class A:
[Holders and Addresses].......................................... xxxx xx.x%
Class C:
[Holders and Addresses].......................................... xxxx xx.x%
FIXED INCOME FUND:
Class A:
[Holders and Addresses].......................................... xxxx xx.x%
Class B:
[Holders and Addresses].......................................... xxxx xx.x%
Class C:
[Holders and Addresses].......................................... xxxx xx.x%
INTERMEDIATE GOVERNMENT BOND FUND:
Class A:
[Holders and Addresses].......................................... xxxx xx.x%
Class C:
[Holders and Addresses].......................................... xxxx xx.x%
INTERMEDIATE TAX FREE FUND:
Class A:
[Holders and Addresses].......................................... xxxx xx.x%
Class C:
[Holders and Addresses].......................................... xxxx xx.x%
MINNESOTA INSURED INTERMEDIATE TAX FREE FUND:
Class A:
[Holders and Addresses].......................................... xxxx xx.x%
Class C:
[Holders and Addresses].......................................... xxxx xx.x%
<PAGE>
NUMBER PERCENTAGE
FUND AND CLASS OF SHARES OF CLASS
- ------------------------------------------------------------------------ --------- ----------
COLORADO INTERMEDIATE TAX FREE FUND:
Class A:
[Holders and Addresses].......................................... xxxx xx.x%
Class C:
[Holders and Addresses].......................................... xxxx xx.x%
OREGON INTERMEDIATE TAX FREE FUND:
Class C:
[Holders and Addresses].......................................... xxxx xx.x%
CALIFORNIA INTERMEDIATE TAX FREE FUND:
Class A:
[Holders and Addresses].......................................... xxxx xx.x%
Class C:
[Holders and Addresses].......................................... xxxx xx.x%
FAF:
PRIME OBLIGATIONS FUND:
Class A:
[Holders and Addresses].......................................... xxxx xx.x%
Class B:
[Holders and Addresses].......................................... xxxx xx.x%
Class C:
[Holders and Addresses].......................................... xxxx xx.x%
Class D:
[Holders and Addresses].......................................... xxxx xx.x%
TREASURY OBLIGATIONS FUND:
Class C:
[Holders and Addresses].......................................... xxxx xx.x%
Class D:
[Holders and Addresses].......................................... xxxx xx.x%
GOVERNMENT OBLIGATIONS FUND:
Class C:
[Holders and Addresses].......................................... xxxx xx.x%
Class D:
[Holders and Addresses].......................................... xxxx xx.x%
FASF:
STRATEGY INCOME FUND:
Class A:
[Holders and Addresses].......................................... xxxx xx.x%
STRATEGY GROWTH AND INCOME FUND:
Class A:
[Holders and Addresses].......................................... xxxx xx.x%
STRATEGY GROWTH FUND:
Class A:
[Holders and Addresses].......................................... xxxx xx.x%
STRATEGY AGGRESSIVE GROWTH FUND:
Class A:
[Holders and Addresses].......................................... xxxx xx.x%
</TABLE>
<PAGE>
PROXY
FIRST AMERICAN FUNDS, INC.
FIRST AMERICAN STRATEGY FUNDS, INC.
OAKS, PENNSYLVANIA 19456
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF FIRST
AMERICAN FUNDS, INC. AND FIRST AMERICAN STRATEGY FUNDS, INC.
The undersigned hereby appoints Kathryn L. Stanton, Michael J. Radmer,
and Donna Rafa, and each of them, with power to act without the other and with
the right of substitution in each, as proxies of the undersigned and hereby
authorizes each of them to represent and to vote, as designated below, all the
shares of each series of First American Funds, Inc. ("FAF") and First American
Strategy Funds, Inc. ("FASF") held of record by the undersigned on _________,
1997, at the joint Special Meeting of shareholders of FASF, FAF and First
American Investment Funds, Inc. (each referred to individually as a "Company")
to be held on Friday, October 31, 1997, or any adjournments or postponements
thereof, with all powers the undersigned would possess if present in person. All
previous proxies given with respect to the joint Special Meeting hereby are
revoked.
THE PROXIES ARE INSTRUCTED TO VOTE AS FOLLOWS:
1. To establish the number of members of the Board of Directors of each
Company at seven and to elect each Company's Board of Directors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. To ratify the selection of KPMG Peat Marwick LLP as independent public
accountants for each Company for the current fiscal year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS
PROXY WILL BE VOTED "FOR" PROPOSALS 1 AND 2 ABOVE. RECEIPT OF THE NOTICE OF
SPECIAL MEETING OF SHAREHOLDERS AND THE PROXY STATEMENT RELATING TO THE MEETING
IS ACKNOWLEDGED BY YOUR EXECUTION OF THIS PROXY.
PLEASE SIGN THIS PROXY EXACTLY AS YOUR NAME APPEARS BELOW. WHEN SHARES
ARE HELD BY JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF A
CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY PRESIDENT OR OTHER AUTHORIZED
OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY PARTNER OR OTHER
AUTHORIZED PERSON.
DATED: __________________________, 1997
____________________________________
Signature
[SHAREHOLDER INFORMATION]
____________________________________
Signature if held jointly
TO SAVE FURTHER SOLICITATION EXPENSE, PLEASE MARK, SIGN, DATE AND RETURN THIS
PROXY PROMPTLY USING THE ENCLOSED POSTAGE-PREPAID ENVELOPE.
<PAGE>
PROXY
FIRST AMERICAN INVESTMENTS FUNDS, INC.,
OAKS, PENNSYLVANIA 19456
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF FIRST
AMERICAN INVESTMENT FUNDS, INC.
The undersigned hereby appoints Kathryn L. Stanton, Michael J. Radmer,
and Donna Rafa, and each of them, with power to act without the other and with
the right of substitution in each, as proxies of the undersigned and hereby
authorizes each of them to represent and to vote, as designated below, all the
shares of each series of First American Investment Funds, Inc. ("FAIF"), held of
record by the undersigned on ____________, 1997, at the joint Special Meeting of
shareholders of FAIF, First American Funds, Inc. and First American Strategy
Funds, Inc. (each referred to individually as a "Company") to be held on Friday,
October 31, 1997, or any adjournments or postponements thereof, with all powers
the undersigned would possess if present in person. All previous proxies given
with respect to the joint Special Meeting hereby are revoked.
THE PROXIES ARE INSTRUCTED TO VOTE AS FOLLOWS:
1. To establish the number of members of the Board of Directors of each
Company at seven and to elect each Company's Board of Directors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. To ratify the selection of KPMG Peat Marwick LLP as independent public
accountants for each Company for the current fiscal year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To consider and vote on a proposal that would eliminate a fundamental
investment restriction of FAIF, which would allow an FAIF Fund to
mortgage, pledge or hypothecate its assets.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To consider and vote on a proposed amendment to FAIF's articles of
incorporation which would reduce the quorum required to conduct
business at shareholders meetings from 30% of all outstanding shares to
10% of all outstanding shares of FAIF or, in the case of voting by
classes or series of shares, such percentages of the applicable classes
or series.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS
PROXY WILL BE VOTED "FOR" PROPOSALS 1, 2, 3 AND 4 ABOVE. RECEIPT OF THE NOTICE
OF SPECIAL MEETING OF SHAREHOLDERS AND THE PROXY STATEMENT RELATING TO THE
MEETING IS ACKNOWLEDGED BY YOUR EXECUTION OF THIS PROXY.
PLEASE SIGN THIS PROXY EXACTLY AS YOUR NAME APPEARS BELOW. WHEN SHARES
ARE HELD BY JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF A
CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY PRESIDENT OR OTHER AUTHORIZED
OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY PARTNER OR OTHER
AUTHORIZED PERSON.
DATED: __________________________, 1997
____________________________________
Signature
[SHAREHOLDER INFORMATION]
____________________________________
Signature if held jointly
TO SAVE FURTHER SOLICITATION EXPENSE, PLEASE MARK, SIGN, DATE AND RETURN THIS
PROXY PROMPTLY USING THE ENCLOSED POSTAGE-PREPAID ENVELOPE.
