1933 Act Registration No. 33-16905
1940 Act Registration No. 811-5309
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As filed with the Securities and Exchange Commission on July 21, 1997
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [x]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 30 [x]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 [x]
Amendment No. 31
FIRST AMERICAN INVESTMENT FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
OAKS, PENNSYLVANIA 19456
(Address of Principal Executive Offices) (Zip Code)
(610) 254-1924
(Registrant's Telephone Number, including Area Code)
DAVID LEE
C/O SEI INVESTMENTS COMPANY, OAKS, PENNSYLVANIA 19456
(Name and Address of Agent for Service)
COPIES TO:
Kathryn Stanton, Esq. Michael J. Radmer, Esq.
SEI Investments Company James D. Alt, Esq.
Oaks, Pennsylvania 19456 Dorsey & Whitney LLP
220 South Sixth Street
Minneapolis, Minnesota 55402
It is proposed that this filing shall become effective (check appropriate box):
[ ] immediately upon filing pursuant to paragraph (b) of rule 485
[ ] on (date) pursuant to paragraph (b) of rule 485
[ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485
[ ] on (date) pursuant to paragraph (a)(1) of Rule 485
[x] 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 25, 1996.
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FIRST AMERICAN INVESTMENT FUNDS, INC.
POST-EFFECTIVE AMENDMENT NO. 30
CROSS REFERENCE SHEET FOR ITEMS REQUIRED BY FORM N-1A
NOTE: PART A of this Registration Statement consists of two
Prospectuses, as follows:
1. Retail Class Prospectus relating to Class A Shares and Class B
Shares of Small Cap Value Fund and International Index Fund.
2. Institutional Class Prospectus relating to Class C Shares of
Small Cap Value Fund and International Index Fund.
PART B of this Registration Statement consists of one Statement of
Additional Information, which relates to both of the Prospectuses listed above.
CROSS REFERENCE SHEET
ITEM NUMBER OF FORM N-1A
PART A CAPTION IN PROSPECTUS
- ------ ---------------------
RETAIL CLASSES PROSPECTUS
- -------------------------
1 Cover Page
2 Summary; Fees and Expenses
3 Not Applicable
4 The Funds; Investment Objectives and Policies; Special Investment
Methods
5 Management; Distributor
5A Not Applicable
6 Fund Shares; Investing in the Funds; Income Taxes
7 Distributor; Investing in the Funds; Determining the Price of
Shares
8 Redeeming Shares
9 Not Applicable
INSTITUTIONAL CLASS PROSPECTUS
- ------------------------------
1 Cover Page
2 Summary; Fees and Expenses
3 Not Applicable
4 The Funds; Investment Objectives and Policies; Special Investment
Methods
5 Management; Distributor
5A Not Applicable
6 Fund Shares; Purchases and Redemptions of Shares; Income Taxes
7 Distributor; Purchases and Redemptions of Shares
8 Purchases and Redemptions of Shares
9 Not Applicable
CAPTION IN STATEMENT
PART B OF ADDITIONAL INFORMATION
- ------ -------------------------
10 Cover Page
11 Table of Contents
12 General Information
13 Additional Information Concerning Fund Investments; Investment
Restrictions
14 Directors and Executive Officers
15 Capital Stock
16 Investment Advisory and Other Services
17 Portfolio Transactions and Allocation of Brokerage
18 Not Applicable
19 Net Asset Value and Public Offering Price
20 Taxation
21 Investment Advisory and Other Services
22 Fund Performance
23 Not Applicable
FIRST AMERICAN INVESTMENT FUNDS, INC.
RETAIL CLASSES
SMALL CAP VALUE FUND
INTERNATIONAL INDEX FUND
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
PROSPECTUS
________________, 1997
SUBJECT TO COMPLETION - July 21, 1997
[LOGO]
FIRST AMERICAN FUNDS
The power of disciplined investing
FIRST AMERICAN INVESTMENT FUNDS, INC.
Oaks, Pennsylvania 19456
RETAIL CLASSES PROSPECTUS
The shares described in this Prospectus represent interests in First American
Investment Funds, Inc., which consists of mutual funds with several different
investment portfolios and objectives. This Prospectus relates to the Class A and
Class B Shares of the following funds (the "Funds"):
* SMALL CAP VALUE FUND
* INTERNATIONAL INDEX FUND
SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, INCLUDING FIRST BANK NATIONAL ASSOCIATION AND 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, DUE TO
FLUCTUATIONS IN EACH FUND'S NET ASSET VALUE.
This Prospectus concisely sets forth 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 ___________, 1997 for the Funds has
been filed with the Securities and Exchange Commission ("SEC") 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
Investments Distribution Co., Oaks, Pennsylvania 19456. The SEC maintains a
World Wide Web site that contains reports and information regarding issuers that
file electronically with the SEC. The address of such site is
"http://www.sec.gov."
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 REPRE- SENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The date of this Prospectus is ______________, 1997.
TABLE OF CONTENTS
PAGE
SUMMARY 4
FEES AND EXPENSES 7
Class A Share Fees and Expenses 7
Class B Share Fees and Expenses 8
Information Concerning Fees and
Expenses 9
THE FUNDS 10
INVESTMENT OBJECTIVES AND
POLICIES 10
Small Cap Value Fund 11
International Index Fund 12
Risks to Consider 13
MANAGEMENT 14
Investment Adviser 14
Portfolio Managers 16
Custodian 16
Administrator 17
Transfer Agent 17
DISTRIBUTOR 17
INVESTING IN THE FUNDS 19
Share Purchases 19
Minimum Investment Required 20
Alternative Sales Charge
Options 20
Class A Shares 22
Class B Shares 25
Systematic Exchange Program 26
Systematic Investment Program 26
Exchanging Securities for
Fund Shares 26
Certificates and Confirmations 27
Dividends and Distributions 27
Exchange Privilege 27
REDEEMING SHARES 29
By Telephone 29
By Mail 30
By Systematic Withdrawal Program 31
Redemption Before Purchase
Instruments Clear 31
Accounts with Low Balances 32
DETERMINING THE PRICE OF SHARES 32
Determining Net Asset Value 32
Foreign Securities 33
INCOME TAXES 34
Federal Income Taxation 34
FUND SHARES 35
CALCULATION OF PERFORMANCE DATA 36
SPECIAL INVESTMENT METHODS 37
Repurchase Agreements 37
When-Issued and Delayed-Delivery
Transactions 38
Lending of Portfolio Securities 38
Options Transactions 39
Cash Items 40
Futures and Options on Futures 40
Fixed Income Securities 41
Foreign Securities 42
Portfolio Transactions 43
Portfolio Turnover 44
Investment Restrictions 44
Information Concerning
Compensation Paid to First Trust
National Association and its
Affiliates 45
SUMMARY
First American Investment Funds, Inc. ("FAIF") is an open-end investment company
which offers shares in several different mutual funds. This Prospectus provides
information with respect to the Class A Shares and Class B Shares of the
following funds (the "Funds"):
SMALL CAP VALUE FUND has an objective of capital appreciation. Under normal
market conditions, the Fund invests at least 65% of its total assets in equity
securities of small-capitalization companies (those with market capitalizations
of less than $1 billion at the time of purchase). In selecting equity
securities, the Fund's adviser utilizes a value-based selection discipline,
investing in equity securities it believes are undervalued relative to other
securities at the time of purchase.
INTERNATIONAL INDEX FUND has an objective of providing investment results that
correspond to the performance of the Morgan Stanley Europe, Australia, Far East
Composite Index (the "EAFE Index"). The Fund invests substantially (at least 65%
of total assets) in common stocks included in the EAFE Index. The Fund's adviser
believes that its objective can be best achieved by investing in common stocks
of approximately 50% to 100% of the issues included in the EAFE Index, depending
on the size of the Fund.
INVESTMENT ADVISER First Bank National Association (the "Adviser") serves as
investment adviser to each of the Funds. See "Management."
DISTRIBUTOR; ADMINISTRATOR SEI Investments Distribution Co. (the "Distributor")
serves as the distributor of the Funds' shares. SEI Investments Management
Corporation (the "Administrator") serves as the administrator of the Funds. See
"Management" and "Distributor."
OFFERING PRICES Class A Shares of the Funds are sold at net asset value plus a
maximum sales charge of 4.50%. These sales charges are reduced on purchases of
$50,000 or more. Purchases of $1 million or more of Class A Shares are not
subject to an initial sales charge, but a contingent deferred sales charge of
1.00% will be imposed on such purchases in the event of redemption within 24
months following the purchase. Class A Shares of the Funds otherwise are
redeemed at net asset value without any additional charge. Class A Shares of
each Fund are subject to a shareholder servicing fee computed at an annual rate
of 0.25% of the average daily net assets of that class. See "Investing in the
Funds -- Alternative Sales Charge Options."
Class B Shares of each Fund are sold at net asset value without an initial sales
charge. Class B Shares of each Fund are subject to Rule 12b-1 distribution and
shareholder servicing fees computed at an annual rate totaling 1.00% of the
average daily net assets of that class. If Class B Shares are redeemed within
six years after purchase, they are subject to a contingent deferred sales charge
declining from 5.00% in the first year to zero after six years. Class B Shares
automatically convert into Class A Shares approximately eight years after
purchase. See "Investing in the Funds -- Alternative Sales Charge Options."
MINIMUM INITIAL AND SUBSEQUENT INVESTMENTS The minimum initial investment is
$1,000 ($250 for IRAs) for each Fund. Subsequent investments must be $100 or
more. Regular investment in the Funds is simplified through the Systematic
Investment Program through which monthly purchases of $100 or more are possible.
See "Investing in the Funds -- Minimum Investment Required" and "-- Systematic
Investment Program."
EXCHANGES Shares of either Fund may be exchanged for the same class of shares of
other funds in the First American family at the shares' respective net asset
values with no additional charge. See "Investing in the Funds -- Exchange
Privilege."
REDEMPTIONS Shares of each Fund may be redeemed at any time at their net asset
value next determined after receipt of a redemption request by the Funds'
transfer agent, less any applicable contingent deferred sales charge. Each Fund
may, upon 60 days written notice, redeem an account if the account's net asset
value falls below $500. See "Investing in the Funds" and "Redeeming Shares."
RISKS TO CONSIDER Each of the Funds is subject to the risk of generally adverse
equity markets. Investors also should recognize that market prices of equity
securities generally, and of particular companies' equity securities, frequently
are subject to greater volatility than prices of fixed income securities.
Because Small Cap Value Fund is actively managed, its performance will reflect
in part the ability of the Adviser to select securities which are suited to
achieving its investment objectives. Due to its active management,
this Fund could underperform other mutual funds with similar investment
objectives or the market generally.
In addition, (i) Small Cap Value Fund is subject to risks associated with
investing in small-capitalization companies; (ii) International Index Fund is
subject to risks associated with investing in foreign securities and to currency
risk; (iii) Small Cap Value Fund may invest a specified portion of its assets in
securities of foreign issuers which are listed on a United States stock exchange
or represented by American Depositary Receipts; (iv) the Funds may invest (but
not for speculative purposes) in options on stock indices; and (v) International
Index Fund may invest (but not for speculative purposes) in stock index futures
contracts, options on stock index futures, and/or index participation contracts
based on the EAFE Index. See "Investment Objectives and Policies -- Risks to
Consider" and "Special Investment Methods."
SHAREHOLDER INQUIRIES Any questions or communications regarding the Funds or a
shareholder account should be directed to the Distributor by calling (800)
637-2548, or to the financial institution which holds shares on an investor's
behalf.
FEES AND EXPENSES
CLASS A SHARE FEES AND EXPENSES
<TABLE>
<CAPTION>
SMALL CAP INTERNATIONAL
VALUE FUND INDEX FUND
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum sales load imposed on purchases
(as a percentage of offering price)(1) 4.50% 4.50%
Maximum sales load imposed on reinvested
dividends None None
Deferred sales load None None
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 )(2) 0.70% 0.46%
Rule 12b-1 fees (after voluntary fee
waivers)(2) 0.25% 0.25%
Other expenses (after
reimbursements)(2) 0.20% 0.29%
Total fund operating expenses
(after voluntary fee waivers and
reimbursements)(2) 1.15% 1.00%
EXAMPLE(3)
You would pay the following expenses on a $1,000 investment, assuming (i) the
maximum applicable sales charge for all funds; (ii) a 5% annual return; and
(iii) redemption at the end of each time period:
1 year $ 56 $ 55
3 years $ 80 $ 75
</TABLE>
(1) The rules of the Securities and Exchange Commission require that the
maximum sales charge be reflected in the above table. However, certain
investors may qualify for reduced sales charges. Purchases of $1
million or more of Class A Shares are not subject to an initial sales
charge, but a contingent deferred sales charge of 1.00% will be imposed
on such purchases in the event of redemption within 24 months following
the purchase. See "Investing in the Funds -- Alternative Sales Charge
Options."
(2) The Adviser intends to waive a portion of its fees and/or reimburse
expenses on a voluntary basis, and the amounts shown reflect these
waivers and reimbursements as of the date of this Prospectus. Each of
these persons intends to maintain such waivers and reimbursements in
effect through September 30, 1998. Absent any fee waivers or
reimbursements, investment advisory fees for each Fund as an annualized
percentage of average daily net assets would be 0.70%; Rule 12b-1 fees
calculated on such basis would be 0.25%; and total fund operating
expenses calculated on such basis would be 1.15% for Small Cap Value
Fund and 1.24% for International Index Fund. "Other expenses" includes
an administration fee and is based on estimated amounts for the current
fiscal year.
(3) Absent the fee waivers and reimbursements referred to in (2) above, the
dollar amounts for the 1 and 3-year periods would be as follows: Small
Cap Value Fund, $56 and $80, and International Index Fund, $57 and $83.
CLASS B SHARE FEES AND EXPENSES
<TABLE>
<CAPTION>
SMALL CAP INTERNATIONAL
VALUE FUND INDEX FUND
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum sales load imposed on purchases (as a
percentage of offering price) 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) 5.00% 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)(1) 0.70% 0.46%
Rule 12b-1 fees 1.00%(2) 1.00%(2)
Other expenses(1) 0.20% 0.29%
Total fund operating expenses
(after voluntary fee waivers)(1) 1.90% 1.75%
EXAMPLE
ASSUMING REDEMPTION(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;
and (iii) payment of the maximum applicable contingent deferred sales
charge of 5% in year 1 and 4% in year 3:
1 year $69 $68
3 years $100 $95
ASSUMING NO REDEMPTION(4)
You would pay the following expenses on the same investment, assuming
no redemption:
1 year $19 $18
3 years $60 $55
</TABLE>
(1) The Adviser intends to waive a portion of its fees on a voluntary
basis, and the amounts shown reflect these waivers as of the date of
this Prospectus. The Adviser intends to maintain such waivers in effect
through September 30, 1998. Absent any fee waivers or reimbursements,
investment advisory fees as an annualized percentage of average daily
net assets would be 0.70%; and total fund operating expenses would be
1.90% for Small Cap Value Fund and 1.99% for International Index Fund.
"Other expenses" includes an administration fee and is based on
estimated amounts for the current fiscal year.
(2) Of this amount, 0.25% is designated as a shareholder servicing fee and
0.75% as a distribution fee.
(3) Absent the fee waivers and reimbursements referred to in (1) above, the
dollar amounts for the 1 and 3-year periods would be as follows: Small
Cap Value Fund, $69 and $100, and International Index Fund, $70 and
$102.
(4) Absent the fee waivers and reimbursements referred to in (1) above, the
dollar amounts for the 1 and 3-year periods would be as follows: Small
Cap Value Fund, $19 and $60, and International Index Fund, $20 and $62.
INFORMATION CONCERNING FEES AND EXPENSES
The purpose of the preceding tables is to assist the investor in understanding
the various costs and expenses that an investor in a Fund may bear directly or
indirectly. THE EXAMPLES CONTAINED IN THE TABLES 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 foregoing tables and
examples relates only to the Class A Shares and the Class B Shares of Small Cap
Value Fund and International Index Fund. The Funds also offer Class C Shares
which are subject to the same expenses except that they bear no sales loads or
shareholder servicing fees.
The examples in the above tables are based on annual Fund operating expenses
after voluntary fee waivers and expense reimbursements by the Adviser. The
Adviser intends to maintain such waivers in effect through September 30, 1998.
Prior to fee waivers, investment advisory fees accrue at the annual rate as a
percentage of average daily net assets of 0.70% for each of the Funds. "Other
expenses" in the tables are based on estimates.
The Class A Shares of each Fund pay shareholder servicing fees to the
Distributor in an amount equaling 0.25% per year of each such class's average
daily net assets, and the Class B Shares of each Fund bear distribution and
shareholder servicing fees totaling 1.00% per year of such class's average daily
net assets. The Distributor also receives the sales charge for distributing the
Funds' Class A Shares. Due to the distribution and shareholder servicing fees
paid by the Class A and Class B Shares, long-term shareholders may pay more than
the equivalent of the maximum front-end sales charges otherwise permitted by
NASD rules. For additional information, see "Distributor."
Other expenses include fees paid by each Fund to 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 at an annual rate of
0.12% of average daily net assets of each Fund subject to a minimum of $50,000
per Fund per fiscal year; 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 0.105%. Other expenses of the Funds also includes the cost
of maintaining shareholder records, furnishing shareholder statements and
reports, and other services. Investment advisory fees, administrative fees and
other expenses are reflected in the Funds' daily dividends and are not charged
to individual shareholder accounts.
THE FUNDS
FAIF is an open-end management investment company which offers shares in several
different mutual funds (collectively, the "FAIF Funds"), each of which evidences
an interest in a separate and distinct investment portfolio. Shareholders may
purchase shares in each FAIF Fund through several separate classes which provide
for variations in distribution costs, shareholder servicing fees, voting rights
and dividends. Except for these differences among classes, each share of each
FAIF Fund represents an undivided proportionate interest in that fund. FAIF is
incorporated under the laws of the State of Maryland, and its principal offices
are located at Oaks, Pennsylvania 19456.
This Prospectus relates only to the Class A and the Class B Shares of the Funds
named on the cover hereof. Information regarding the Class C Shares of these
Funds and regarding the Class A, Class B and Class C Shares of the other FAIF
Funds is contained in separate prospectuses that may be obtained from FAIF's
Distributor, SEI Investments Distribution Co., Oaks, Pennsylvania 19456, or by
calling (800) 637-2548. The Board of Directors of FAIF may authorize additional
series or classes of common stock in the future.
INVESTMENT OBJECTIVES AND POLICIES
This section describes the investment objectives and policies of the Funds.
There is no assurance that any of these objectives will be achieved. The Funds'
investment objectives are not fundamental and therefore may be changed without a
vote of shareholders. Such changes could result in a Fund having investment
objectives different from those which shareholders considered appropriate at the
time of their investment in a Fund. Shareholders will receive written
notification at least 30 days prior to any change in a Fund's investment
objectives. Each of the Funds is a diversified investment company, as defined in
the Investment Company Act of 1940 (the "1940 Act").
If a percentage limitation on investments by a Fund stated below or 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 asset
values will not be deemed to violate the limitation except in the case of the
limitation on illiquid investments. Similarly, if a Fund is required or
permitted to invest a stated percentage of its assets in companies with no more
or no less than a stated market capitalization, deviations from the stated
percentages which result from changes in companies' market capitalizations after
the Fund purchases its shares will not be deemed to violate the limitation. A
Fund which is limited to investing in securities with specified ratings is not
required to sell a security if its rating is reduced or discontinued after
purchase, but the Fund may consider doing so. However, in no event will more
than 5% of either Fund's net assets be invested in non-investment grade
securities. Descriptions of the rating categories of Standard & Poor's
Corporation ("Standard & Poor's") and Moody's Investors Service, Inc.
("Moody's") are contained in the Statement of Additional Information.
When the term "equity securities" is used in this Prospectus, it refers to
common stock and securities which are convertible into or exchangeable for, or
which carry warrants or other rights to acquire, common stock.
This section also contains information concerning certain investment risks borne
by Fund shareholders under the heading "-- Risks to Consider." Further
information concerning the securities in which the Funds may invest and related
matters is set forth under "Special Investment Methods."
SMALL CAP VALUE FUND
OBJECTIVE. Small Cap Value Fund has an objective of capital appreciation.
INVESTMENT POLICIES. Under normal market conditions, Small Cap Value Fund
invests at least 65% of its total assets in equity securities of small-
capitalization companies. For these purposes, small-capitalization companies are
deemed those with market capitalizations of less than $1 billion at the time of
purchase. In selecting equity securities, the Adviser utilizes a value-based
selection discipline, investing in equity securities it believes are undervalued
relative to other securities at the time of purchase. In assessing relative
value, the Adviser will consider such factors as ratios of market price to book
value, market price to earnings, and market price to assets; estimated earnings
growth rate; cash flow; and liquidation value.
The Fund also may invest up to 35% of its total assets in the aggregate in
equity securities of issuers with a market capitalization of $1 billion or more
and in fixed income securities of the kinds described under "Special Investment
Methods -- Fixed Income Securities."
Subject to the limitations stated above, the Fund may invest up to 25% of its
total assets in securities of foreign issuers which are either listed on a
United States stock exchange or represented by American Depositary Receipts. For
information about these kinds of investments and certain associated risks, see
"Special Investment Methods -- Foreign Securities."
In addition, the Fund may (i) enter into repurchase agreements; (ii) in order to
attempt to reduce risk, purchase put and call options on equity securities and
on stock indices; (iii) write covered call options covering up to 25% of the
equity securities owned by the Fund; (iv) purchase securities on a when-issued
or delayed-delivery basis; and (v) engage in the lending of portfolio
securities. For information about these investment methods, restrictions on
their use, and certain associated risks, see the related headings under "Special
Investment Methods."
For temporary defensive purposes during times of unusual market conditions, the
Fund may without limitation hold cash or invest in cash items of the kinds
described under "Special Investment Methods -- Cash Items." The Fund also may
invest not more than 35% of its total assets in cash and cash items in order to
utilize assets awaiting normal investment.
INTERNATIONAL INDEX FUND
OBJECTIVE. International Index Fund has an objective of providing investment
results that correspond to the performance of the Morgan Stanley Europe,
Australia, Far East Composite Index (the "EAFE Index").
INVESTMENT POLICIES. International Index Fund invests substantially (at least
65% of total assets) in common stocks included in the EAFE Index. The Adviser
believes that the Fund's objective can best be achieved by investing in the
common stocks of approximately 50% to 100% of the issues included in the EAFE
Index, depending on the size of the Fund. Normally, International Index Fund
will invest at least 65% of its total assets in securities traded in at least
three foreign countries.
Morgan Stanley designates the stocks included in the EAFE Index. A particular
stock's weighting in the EAFE Index is based on its total market value (that is,
its market price per share times the number of shares outstanding) relative to
that of all stocks included in the EAFE Index. From time to time, Morgan Stanley
may add or delete stocks to or from the EAFE Index. Inclusion of a particular
stock in the EAFE Index does not imply any opinion by Morgan Stanley as to its
merits as an investment, nor is Morgan Stanley a sponsor of or in any way
affiliated with the Fund.
The Fund is managed by utilizing a computer program that identifies which stocks
should be purchased or sold in order to replicate, as closely as possible, the
composition of the EAFE Index. The Fund includes a stock in its investment
portfolio in the order of the stock's weighting in the EAFE Index, starting with
the most heavily weighted stock. Thus, the proportion of Fund assets invested in
a stock, industry or country closely approximates the percentage of the EAFE
Index represented by that stock, industry or country. Portfolio turnover is
expected to be well below that of actively managed mutual funds.
Although the Fund will not duplicate the EAFE Index performance precisely, it is
anticipated that there will be a close correlation between the Fund's
performance and that of the EAFE Index in both rising and falling markets. The
Fund will attempt to achieve a correlation between the performance of its
portfolio and that of the EAFE Index of at least 95%, without taking into
account expenses of the Fund. A perfect correlation would be indicated by a
figure of 100%, which would be achieved if the Fund's net asset value, including
the value of its dividends and capital gains distributions, increased or
decreased in exact proportion to changes in the EAFE Index. The Fund's ability
to replicate the performance of the EAFE Index may be affected by, among other
things, changes in securities markets, the manner in which Morgan Stanley
calculates the EAFE Index, administrative and other expenses incurred by the
Fund, taxes (including foreign withholding taxes, which will affect the Fund)
and the amount and timing of cash flows into and out of the Fund. Although cash
flows into and out of the Fund will affect the Fund's portfolio turnover rate
and its ability to replicate the EAFE Index's performance, investment
adjustments will be made, as practicably as possible, to account for these
circumstances.
The Fund also may invest up to 20% of its total assets in the aggregate in stock
index futures contracts, options on stock indices, options on stock index
futures and index participation contracts based on the EAFE Index. The Fund will
not invest in these types of contracts and options for speculative purposes, but
rather to maintain sufficient liquidity to meet redemption requests; to increase
the level of Fund assets devoted to replicating the composition of the EAFE
Index; and to reduce transaction costs. These types of contracts and options and
certain associated risks are described under "Special Investment Methods --
Options Transactions." In addition, the Fund may enter into repurchase
agreements and engage in securities lending as described under "Special
Investment Methods -- Repurchase Agreements" and "Special Investment Methods --
Lending of Portfolio Securities."
In order to maintain liquidity during times of unusual market conditions, the
Fund also may invest temporarily in cash and cash items of the kinds described
under "Special Investment Methods -- Cash Items."
RISKS TO CONSIDER
An investment in Small Cap Value Fund and International Index Fund involves
certain risks. These include the following:
EQUITY SECURITIES GENERALLY. Market prices of equity securities generally, and
of particular companies' equity securities, frequently are subject to greater
volatility than prices of fixed income securities. Market prices of equity
securities as a group have dropped dramatically in a short period of time on
several occasions in the past, and they may do so again in the future. Each of
the Funds is subject to the risk of generally adverse equity markets.
SMALL-CAPITALIZATION COMPANIES. Small Cap Value Fund emphasizes investments in
companies with small market capitalizations. The equity securities of such
companies frequently have experienced greater price volatility in the past than
those of larger-capitalization companies, and they may be expected to do so in
the future. To the extent that Small Cap Value Fund invests in
small-capitalization companies, they are subject to this risk of greater
volatility.
ACTIVE MANAGEMENT. Small Cap Value Fund is actively managed by the Adviser. The
performance of this Fund therefore will reflect in part the ability of the
Adviser to select securities which are suited to achieving the Fund's investment
objective. Due to its active management, this Fund could underperform other
mutual funds with similar investment objectives or the market generally.
FOREIGN SECURITIES. International Index Fund is subject to special risks
associated with investing in foreign securities and to declines in net asset
value resulting from changes in exchange rates between the United States dollar
and foreign currencies. These risks are discussed under "Special Investment
Methods -- Foreign Securities" elsewhere herein. Because of the special risks
associated with foreign investing the Fund may be subject to greater volatility
than most mutual funds which invest principally in domestic securities.
OTHER. Investors also should review "Special Investment Methods" for information
concerning risks associated with certain investment techniques which may be
utilized by the Funds.
MANAGEMENT
The Board of Directors of FAIF has the primary responsibility for overseeing the
overall management and electing the officers of FAIF. 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 FAIF.
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 has acted as an investment adviser to FAIF since its
inception in 1987 and has acted as investment adviser to First American Funds,
Inc. since 1982 and to First American Strategy Funds, Inc. since 1996. As of
December 31, 1996, the Adviser was managing accounts with an aggregate value of
approximately $35 billion, including mutual fund assets in excess of $12
billion. First Bank System, Inc., 601 Second Avenue South, Minneapolis,
Minnesota 55480, is the holding company for the Adviser.
Small Cap Value Fund and International Index Fund has each agreed to pay the
Adviser monthly fees calculated on an annual basis equal to 0.70% of their
respective average daily net assets. The Adviser may, at its option, waive any
or all of its fees, or reimburse expenses, with respect to either 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 Funds from
time to time, in its discretion, while retaining the ability to be reimbursed by
the Funds for such amounts prior to the end of the fiscal year. This practice
would have the effect of lowering a 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 subsidiary 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 and ISI
might be prohibited from continuing these arrangements. In that event, it is
expected that the Board of Directors would make other arrangements and that
shareholders would not suffer adverse financial consequences.
PORTFOLIO MANAGERS
Small Cap Value Fund is managed by a committee composed of Albin S. Dubiak,
Roland P. Whitcomb and Jeff A. Johnson.
ALBIN S. DUBIAK began his investment career as a security trader with First
National Bank of Chicago in 1963 before joining the Adviser as an investment
analyst in 1969. Mr. Dubiak received his bachelor's degree from Indiana
University and his master's degree in business administration from the
University of Arizona. Mr. Dubiak also is portfolio co-manager for several other
First American equity funds and is a member of the committees which manage
several other First American equity funds.
ROLAND B. WHITCOMB joined the Adviser in 1986 after serving as an account
executive with Smith Barney & Co. since 1979. He received his bachelor's
degree from the University of Chicago and is a Chartered Financial Analyst.
Mr. Whitcomb also is portfolio co-manager for several other First American
equity funds and is a member of the committees which manage several other First
American equity funds.
JEFF A. JOHNSON has been employed by the Adviser in investment management
since 1991 and in commercial lending from 1985 to 1991. Mr. Johnson received
his master of fine arts degree from the University of Iowa. Mr. Johnson also
is portfolio co-manager for several other First American equity funds and is a
member of the committee which manages several other First American equity
funds.
International Index Fund is co-managed by James S. Rovner and Evan Lundquist.
JAMES S. ROVNER joined the Adviser in 1986 and has managed assets for
institutional and individual clients for over 15 years. Mr. Rovner received
his bachelor's degree and his master's degree in business administration from
the University of Wisconsin and is a Chartered Financial Analyst.
EVAN LUNDQUIST joined the Adviser in 1993 and received his bachelor's degree
from St. Mary's College.
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 First Bank System, Inc., which also
controls the Adviser.
As compensation for its services to the Funds, the Custodian receives monthly
fees calculated on an annual basis equal to, for Small Cap Value Fund, 0.03% of
Small Cap Value Fund's average daily net assets, and, for International Index
Fund, 0.10% of International Index Fund's average daily net assets. In addition,
the Custodian is reimbursed by the Funds for its out-of-pocket expenses incurred
while providing its services to the Funds. Rules adopted under the 1940 Act
permit International Index Fund to maintain its securities and cash in the
custody of certain eligible foreign banks and depositories. International Index
Fund's portfolio of non-United States securities are held by sub-custodians
which are approved by the directors of FAIF in accordance with these rules. This
determination is made pursuant to these rules following a consideration of a
number of factors including, but not limited to, the reliability and financial
stability of the institution; the ability of the institution to perform
custodian services for International Index Fund; the reputation of the
institution in its national market; the political and economic stability of the
country in which the institution is located; and the risks of potential
nationalization or expropriation of International Index Fund's assets.
Sub-custodian fees with respect to International Index Fund are paid by the
Custodian out of the Custodian's fees.
ADMINISTRATOR
The administrator for the Funds is SEI Investments Management Corporation, Oaks,
Pennsylvania 19456. The Administrator, a wholly-owned subsidiary of SEI
Investments Company, provides the Funds with certain administrative services
necessary to operate the Funds. These services include shareholder servicing and
certain accounting and other services. The Administrator provides these services
for a fee calculated at an annual rate of 0.12% of each Fund's average daily net
assets, subject to a minimum administrative fee during each fiscal year of
$50,000 per Fund; 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 0.105%. From time to time, the Administrator may voluntarily waive
its fees or reimburse expenses with respect to any of the Funds. Any such
waivers or reimbursements may be made at the Administrator's discretion and may
be terminated at any time.
TRANSFER AGENT
DST Systems, Inc. (the "Transfer Agent") serves as the transfer agent and
dividend disbursing agent for the Funds. The address of the Transfer Agent is
1004 Baltimore, Kansas City, Missouri 64105. The Transfer Agent is not
affiliated with the Distributor, the Administrator or the Adviser.
DISTRIBUTOR
SEI Investments Distribution Co. is the principal distributor for shares of the
Funds and of the other FAIF Funds. The Distributor is a Pennsylvania corporation
and is the principal distributor for a number of investment companies. The
Distributor is a wholly-owned subsidiary of SEI Investments Company, and is
located at Oaks, Pennsylvania 19456. The Distributor is not affiliated with the
Adviser, First Bank System, Inc., the Custodian or their respective affiliates.
Shares of the Funds are distributed through the Distributor and 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.
FAIF has adopted a Plan of Distribution for the Class A Shares pursuant to Rule
12b-1 under the 1940 Act (the "Class A Distribution Plan"). The Class A
Distribution Plan authorizes the Distributor to retain the sales charge paid
upon purchase of Class A Shares, except that portion which is reallowed to
Participating Institutions. See "Investing in the Funds -- Class A Shares." Each
Fund also pays the Distributor a shareholder servicing fee monthly at an annual
rate of 0.25% of the Fund's Class A Shares' average daily net assets. The
shareholder servicing fee is intended to compensate the Distributor for ongoing
servicing and/or maintenance of shareholder accounts and may be used by the
Distributor to provide compensation to institutions through which shareholders
hold their shares for ongoing servicing and/or maintenance of shareholder
accounts. The shareholder servicing fee may be used to provide compensation for
shareholder services provided by "one-stop" mutual fund networks through which
the Funds are made available. In addition, the Distributor and the Adviser and
its affiliates may provide compensation for services provided by such networks
from their own resources. From time to time, the Distributor may voluntarily
waive its fees with respect to the Class A Shares of either of the Funds. Any
such waivers may be made at the Distributor's discretion and may be terminated
at any time.
Under another distribution plan (the "Class B Distribution Plan") adopted in
accordance with Rule 12b-1 under the 1940 Act, each Fund may pay to the
Distributor a sales support fee at an annual rate of up to 0.75% of the average
daily net assets of the Class B Shares of the Fund, which fee may be used by the
Distributor to provide compensation for sales support and distribution
activities with respect to Class B Shares of the Fund. This fee is calculated
and paid each month based on the average daily net assets for that month. In
addition to this fee, the Distributor is paid a shareholder servicing fee of
0.25% of the average daily net assets of the Class B Shares pursuant to a
service plan (the "Class B Service Plan"), which fee may be used by the
Distributor to provide compensation for ongoing servicing and/or maintenance of
shareholder accounts with respect to Class B Shares of the Fund. Although Class
B Shares are sold without an initial sales charge, the Distributor pays a total
of 4.25% of the amount invested (including a prepaid service fee of 0.25% of the
amount invested) to dealers who sell Class B Shares (excluding exchanges from
other Class B Shares in the First American family). The service fee payable
under the Class B Service Plan is prepaid for the first year as described above.
The Class A Distribution Plan and Class B Distribution Plan recognize that the
Adviser, the Administrator, the Distributor, and any Participating Institution
may in their discretion use their own assets to pay for certain additional costs
of distributing Fund shares. Any arrangement to pay such additional costs may be
commenced or discontinued by any of these persons at any time. In addition,
while there is no sales charge on purchases of Class A Shares of $1 million and
more, the Adviser may pay amounts to broker-dealers from its own assets with
respect to such sales. ISI, a subsidiary of the Adviser, is a Participating
Institution.
INVESTING IN THE FUNDS
SHARE PURCHASES
Shares of the Funds are sold at their net asset value, next determined after an
order is received, plus any applicable sales charge, on days on which the New
York Stock Exchange is open for business. Shares may be purchased as described
below. The Funds reserve 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 Funds by 3:00 p.m. 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.
Certain brokers assist their clients in the purchase or redemption of shares
and charge a fee for this service.
BY MAIL. An investor may place an order to purchase shares of the Funds directly
through the Transfer Agent. Orders by mail will be executed upon receipt of
payment by the Transfer Agent. If an investor's check does not clear, the
purchase will be cancelled and the investor could be liable for any losses or
fees incurred. Third-party checks, credit cards, credit card checks and cash
will not be accepted. When purchases are made by check, the proceeds of
redemptions of the shares purchased are not available until the Transfer Agent
is reasonably certain that the purchase payment has cleared, which could take up
to ten calendar days from the purchase date. 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 a Fund by wire, call (800) 637-2548 before 3:00
p.m. Central time. All information needed will be taken over the telephone, and
the order will be considered placed when the Custodian receives payment by wire.
If the Custodian does not receive the wire by 3:00 p.m. Central time, the order
will be executed the next business day. Federal funds should be wired as
follows: First Bank National Association, Minneapolis, Minnesota, ABA Number
091000022; For Credit to: DST Systems, Account Number 160234580266; 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 for each Fund is $1,000 unless the investment is
in a retirement plan, in which case the minimum investment is $250. The minimum
subsequent investment is $100. The Funds reserve the right to waive the minimum
investment requirement for employees of First Bank National Association, First
Trust National Association and First Bank System, Inc. and their respective
affiliates.
ALTERNATIVE SALES CHARGE OPTIONS
THE TWO ALTERNATIVES: OVERVIEW. An investor may purchase shares of a Fund at a
price equal to its net asset value plus a sales charge. This sales charge may be
imposed, at the investor's election, either (i) at the time of the purchase (the
Class A "initial sales charge alternative"), or (ii) on a contingent deferred
basis (the Class B "deferred sales charge alternative"). Each of Class A and
Class B represents a Fund's interest in its 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 and distribution and service fees resulting from such sales
arrangement, while Class A Shares bear only shareholder servicing fees; (ii)
each class has exclusive voting rights with respect to approvals of any Rule
12b-1 distribution plan related to that specific class (although Class B
shareholders may vote on any distribution fees imposed on Class A Shares as long
as Class B Shares convert into Class A Shares); (iii) only Class B Shares carry
a conversion feature; and (iv) each class has different exchange privileges.
Sales personnel of financial institutions distributing the Funds' shares, and
other persons entitled to receive compensation for selling shares, may receive
differing compensation for selling Class A and Class B Shares.
These alternative purchase arrangements permit an investor in a Fund to choose
the method of purchasing shares that is more beneficial to that investor. The
amount of a purchase, the length of time an investor expects to hold the shares,
and whether the investor wishes to receive dividends in cash or in additional
shares, will all be factors in determining which sales charge option is best for
a particular investor. An investor should consider whether, over the time he or
she expects to maintain the investment, the accumulated sales charges on Class B
Shares prior to conversion would be less than the initial sales charge on Class
A Shares, and to what extent the differential may be offset by the expected
higher yield of Class A Shares. Class A Shares will normally be more beneficial
to an investor if he or she qualifies for reduced sales charges as described
below. Accordingly, orders for Class B Shares of a Fund for $250,000 or more
ordinarily will be treated as orders for Class A Shares or declined.
The Directors of FAIF have determined that no conflict of interest currently
exists between the Class A and Class B Shares. On an ongoing basis, the
Directors, pursuant to their fiduciary duties under the 1940 Act and state laws,
will seek to ensure that no such conflict arises.
CLASS A SHARES.
WHAT CLASS A SHARES COST. Class A Shares of each Fund are offered on a
continuous basis at their next determined offering price, which is net asset
value, plus a sales charge as set forth below:
EACH FUND:
<TABLE>
<CAPTION>
MAXIMUM AMOUNT
OF SALES CHARGE
SALES CHARGE AS SALES CHARGE AS REALLOWED TO
PERCENTAGE OF PERCENTAGE OF PARTICIPATING
OFFERING PRICE NET ASSET VALUE INSTITUTIONS
<S> <C> <C> <C>
Less than $50,000 4.50% 4.71% 4.05%
$50,000 but less than $100,000 4.00% 4.17% 3.60%
$100,000 but less than $250,000 3.50% 3.63% 3.15%
$250,000 but less than $500,000 2.75% 2.83% 2.47%
$500,000 but less than $1,000,000 2.00% 2.04% 1.80%
$1,000,000 and over 0.00% 0.00% 0.00%
</TABLE>
There is no initial sales charge on purchases of Class A Shares of $1 million or
more. However, Participating Institutions will receive a commission of 1.00% on
such sales. Redemptions of Class A Shares purchased at net asset value within 24
months of purchase will be subject to a contingent deferred sales charge of
1.00% (unless a Participating Institution waived its commission on the initial
purchase). Class A Shares that are redeemed will not be subject to this
contingent deferred sales charge to the extent that the value of the shares
represents capital appreciation of Fund assets or reinvestment of dividends or
capital gain distributions.
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; and (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, net asset value will not
be calculated on Good Friday.
DEALER CONCESSION. A dealer will normally receive up to 90% of the applicable
sales charge. Any portion of the sales charge which is not paid to a dealer will
be retained by the Distributor. In addition, the Distributor may, from time to
time in its sole discretion, institute one or more promotional incentive
programs which will be paid by the Distributor from the sales charge it receives
or from any other source available to it. Under any such program, the
Distributor will provide promotional incentives, in the form of cash or other
compensation including merchandise, airline vouchers, trips and vacation
packages, to all dealers selling shares of the Funds. Promotional incentives of
these kinds will be offered uniformly to all dealers and predicated upon the
amount of shares of the Funds sold by the dealer. Whenever 90% or more of a
sales charge is paid to a dealer, that dealer may be deemed to be an underwriter
as defined in the Securities Act of 1933.
The sales charge for shares sold other than through registered broker/dealers
will be retained by the Distributor. The Distributor may pay fees to financial
institutions out of the sales charge in exchange for sales and/or administrative
services performed on behalf of the institution's customers in connection with
the initiation of customer accounts and purchases of Fund shares.
REDUCING THE CLASS A SALES CHARGE. The sales charge can be reduced on the
purchase of Class A Shares through (i) quantity discounts and accumulated
purchases, or (ii) signing a 13-month letter of intent:
* QUANTITY DISCOUNTS AND ACCUMULATED PURCHASES: As shown in the table above,
larger purchases of Class A Shares reduce the percentage sales charge
paid. Each Fund will combine purchases made on the same day by an
investor, the investor's spouse, and the investor's children under age 21
when it calculates the sales charge. In addition, the sales charge, if
applicable, is reduced for purchases made at one time by a trustee or
fiduciary for a single trust estate or a single fiduciary account.
The sales charge discount applies to the total current market value of any
Fund, plus the current market value of any other FAIF Fund and any other
mutual funds having a sales charge and distributed as part of the First
American family of funds. Prior purchases and concurrent purchases of
Class A Shares of any FAIF Fund will be considered in determining the
sales charge reduction. In order for an investor to receive the sales
charge reduction on Class A Shares, the Transfer Agent must be notified by
the investor in writing or by his or her financial institution at the time
the purchase is made that Fund shares are already owned or that purchases
are being combined.
* LETTER OF INTENT: If an investor intends to purchase at least $50,000 of
Class A Shares in a Fund and other FAIF Funds over the next 13 months, the
sales charge may be reduced by signing a letter of intent to that effect.
This letter of intent includes a provision for a sales charge adjustment
depending on the amount actually purchased within the 13-month period and
a provision for the Custodian to hold a percentage equal to the particular
FAIF Fund's maximum sales charge rate of the total amount intended to be
purchased in escrow (in shares) for all FAIF Funds until the purchase is
completed.
The amount held in escrow for all FAIF Funds will be applied to the
investor's account at the end of the 13-month period after deduction of
the sales load applicable to the dollar value of shares actually
purchased. In this event, an appropriate number of escrowed shares may be
redeemed in order to realize the difference in the sales charge.
A letter of intent will not obligate the investor to purchase shares, but
if he or she does, each purchase during the period will be at the sales
charge applicable to the total amount intended to be purchased. This
letter may be dated as of a prior date to include any purchases made
within the past 90 days.
SALES OF CLASS A SHARES AT NET ASSET VALUE. Purchases of a Fund's Class A Shares
by the Adviser, or any of its affiliates, or any of its or FAIF's officers,
directors, employees, retirees, sales representatives and partners, registered
representatives of any broker/dealer authorized to sell Fund shares, and
full-time employees of FAIF's general counsel, and members of their immediate
families (i.e., parent, child, spouse, sibling, step or adopted relationships,
and UTMA accounts naming qualifying persons), may be made at net asset value
without a sales charge. A Fund's Class A Shares also may be purchased at net
asset value without a sales charge by fee-based registered investment advisers,
financial planners and registered broker/dealers who are purchasing shares on
behalf of their customers and by purchasers through "one-stop" mutual fund
networks through which the Funds are made available. In addition, Class A Shares
may be purchased at net asset value without a sales charge by qualified defined
contribution plans participating in the First American 401(k) Plan Program and
by retirement and deferred compensation plans and the trusts used to fund such
plans (including, but not limited to, those defined in section 401(a), 403(b)
and 457 of the Internal Revenue Code and "rabbi trusts"), which plans and trusts
purchase through "one-stop" mutual fund networks.
If Class A Shares of a Fund have been redeemed, the shareholder has a one-time
right, within 30 days, to reinvest the redemption proceeds in Class A Shares of
any FAIF fund at the next-determined net asset value without any sales charge.
The Transfer Agent must be notified by the shareholder in writing or by his or
her financial institution of the reinvestment in order to eliminate a sales
charge. If the shareholder redeems his or her shares of a Fund, there may be tax
consequences.
In addition, purchases of Class A Shares of a Fund that are funded by proceeds
received upon the redemption (within 60 days of the purchase of Fund shares) of
shares of any unrelated open-end investment company that charges a sales load
and rollovers from retirement plans that utilize the Funds as investment options
may be made at net asset value. To make such a purchase at net asset value, an
investor or the investor's broker must, at the time of purchase, submit a
written request to the Transfer Agent that the purchase be processed at net
asset value pursuant to this privilege, accompanied by a photocopy of the
confirmation (or similar evidence) showing the redemption from the unrelated
fund. The redemption of the shares of the non-related fund is, for federal
income tax purposes, a sale upon which a gain or loss may be realized.
CLASS B SHARES.
CONTINGENT DEFERRED SALES CHARGE. Class B Shares of each Fund are sold at net
asset value without any initial sales charge. If an investor redeems Class B
Shares within eight years of purchase, he or she will pay 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 above the initial purchase price or on shares derived from
reinvestment of dividends or capital gain 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.
The contingent deferred sales charge is waived on redemption of Class B Shares
(i) within one year following the death or disability (as defined in the
Internal Revenue Code) of a shareholder, and (ii) to the extent that the
redemption represents a minimum required distribution from an individual
retirement account or other retirement plan to a shareholder who has attained
the age of 70 1/2 . A shareholder or his or her representative must notify the
Transfer Agent prior to the time of redemption if such circumstances exist and
the shareholder is eligible for this waiver.
CONVERSION FEATURE. At the end of the period ending eight years after the
beginning of the month in which the shares were issued, Class B Shares of each
Fund 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 EXCHANGE PROGRAM
Shares of a Fund may also be purchased through automatic monthly deductions from
a shareholder's account in the same class of shares of Prime Obligations Fund of
First American Funds, Inc. Under a systematic exchange program, a shareholder
enters an agreement to purchase a specified class of shares of one or more Funds
over a specified period of time, and initially purchases Prime Obligations Fund
shares of the same class in an amount equal to the total amount of the
investment. On a monthly basis a specified dollar amount of shares of Prime
Obligations Fund is exchanged for shares of the same class of the Funds
specified. The systematic exchange program of investing a fixed dollar amount at
regular intervals over time has the effect of reducing the average cost per
share of the Funds. This effect also can be achieved through the systematic
investment program described below. Because purchases of Class A Shares are
subject to an initial sales charge, it may be beneficial for an investor to
execute a Letter of Intent in connection with the systematic exchange program. A
shareholder may apply for participation in this program through his or her
financial institution or by calling (800) 637-2548.
SYSTEMATIC INVESTMENT PROGRAM
Once a Fund 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, plus any applicable sales charge. A shareholder may apply for
participation in this program through his or her financial institution or call
(800) 637-2548.
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 by the Fund and a determination by the
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 Fund shares on the day the securities are valued.
CERTIFICATES AND CONFIRMATIONS
The Transfer Agent maintains a share account for each shareholder. Share
certificates will not be issued by the Funds.
Confirmations of each purchase and redemption are sent to each shareholder. In
addition, monthly confirmations are sent to report all transactions and
dividends paid during that month for the Funds.
DIVIDENDS AND DISTRIBUTIONS
Dividends with respect to each Fund are declared and paid quarterly to all
shareholders of record on the record date. Distributions of any net realized
long-term capital gains will be made at least once every 12 months. Dividends
and distributions are automatically reinvested in additional shares of the Fund
paying the dividend on payment dates at the ex-dividend date net asset value
without a sales charge, unless shareholders request cash payments on the new
account form or by writing to the Fund.
All shareholders on the record date are entitled to the dividend. If shares are
purchased before a record date for a dividend or a distribution of capital
gains, a shareholder will pay the full price for the shares and will receive
some portion of the purchase price back as a taxable dividend or distribution
(to the extent, if any, that the dividend or distribution is otherwise taxable
to holders of Fund shares). If shares are redeemed or exchanged before the
record date for a dividend or distribution or are purchased after the record
date, those shares are not entitled to the dividend or distribution.
The amount of dividends payable on Class A and Class B Shares generally will be
less than the dividends payable on Class C Shares because of the distribution
and/or shareholder servicing expenses charged to Class A and Class B Shares. The
amount of dividends payable on Class A Shares generally will be more than the
dividends payable on the Class B Shares because of the higher distribution and
shareholder servicing fees paid by the Class B shares.
EXCHANGE PRIVILEGE
Shareholders may exchange Class A Shares or Class B Shares of a Fund for
currently available Class A or Class B Shares, respectively, of the other FAIF
Funds or of other funds in the First American family. Class A Shares of the
Funds, whether acquired by direct purchase, reinvestment of dividends on such
shares, or otherwise, may be exchanged for Class A Shares of other funds without
the payment of any sales charge (i.e., at net asset value). Exchanges of shares
among the First American family of funds must meet any applicable minimum
investment of the fund for which shares are being exchanged.
For purposes of calculating the Class B Shares' eight-year conversion period or
contingent deferred sales charges payable upon redemption, the holding period of
Class B Shares of the "old" fund and the holding period of Class B Shares of the
"new" fund are aggregated.
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.
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 below under "Redeeming Shares." Neither the Funds,
the Distributor, the Transfer Agent, any shareholder servicing agent, or any
financial institution will be responsible for further verification of the
authenticity of the exchange instructions.
Telephone exchange instructions made by an 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 First American funds by telephone only if both
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 3:00 p.m. 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 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.
Shareholders of the Funds 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., 1004
Baltimore, Kansas City, Missouri 64105.
Shareholders who become eligible to purchase Class C Shares may exchange Class A
Shares for Class C Shares. An example of such an exchange would be a situation
in which an individual holder of Class A Shares subsequently opens a custody or
agency account with a financial institution which invests in Class C Shares.
The terms of any exchange privilege may be modified or terminated by the Funds
at any time. There are currently no additional fees or charges for the exchange
service. The Funds do not contemplate establishing such fees or charges, but
they reserve the right to do so. Shareholders will be notified of any
modification or termination of the exchange privilege and of the imposition of
any additional fees or changes.
REDEEMING SHARES
Each Fund redeems shares at their net asset value next determined after the
Transfer Agent receives the redemption request, reduced by any applicable
contingent deferred sales charge. Redemptions will be made on days on which the
Fund computes its net asset value. Redemption requests can be made as described
below and must be received in proper form.
BY TELEPHONE
A shareholder may redeem shares of a Fund, if he or she elects the privilege on
the initial shareholder application, 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. Redemption requests must be received by the financial institution
by the time specified by the institution in order for shares to be redeemed at
that day's net asset value, and redemption requests must be transmitted to and
received by the Funds by 3:00 p.m. Central time in order for shares to be
redeemed at that day's net asset value. 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.
Shareholders who did not purchase their shares of a Fund through a financial
institution may redeem their shares by telephoning (800) 637-2548. At the
shareholder's request, redemption proceeds will be paid by check 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 more than seven days after the
request. Wire instructions must be previously established on the account or
provided in writing. The minimum amount for a wire transfer is $1,000. If at any
time the Funds determine it necessary to terminate or modify this method of
redemption, shareholders will be promptly notified.
In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming shares by telephone. If this should occur, another
method of redemption should be considered. Neither the Transfer Agent nor any
Fund will be responsible for any loss, liability, cost or expense for acting
upon wire transfer instructions or telephone instructions that it reasonably
believes to be genuine. These procedures may include taping of telephone
conversations. To ensure authenticity of redemption or exchange instructions
received by telephone, the Transfer Agent examines each shareholder request by
verifying the account number and/or taxpayer identification number at the time
such request is made. The Transfer Agent subsequently sends confirmations of
both exchange sales and exchange purchases to the shareholder for verification.
If reasonable procedures are not employed, the Transfer Agent and the Funds may
be liable for any losses due to unauthorized or fraudulent telephone
transactions.
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 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 of the National Association of Securities Dealers;
* a savings bank or savings and loan association the deposits of which 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 Funds do not accept signatures guaranteed by a notary public.
The Funds 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 Funds and the Transfer Agent reserve the right
to amend these standards at any time without notice.
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 to participate in this program through his
or her financial institution. It is generally not in a shareholder's best
interest to participate in the Systematic Withdrawal Program at the same time
that the shareholder is purchasing additional shares if a sales charge must be
paid in connection with such purchases.
REDEMPTION BEFORE PURCHASE INSTRUMENTS CLEAR
When shares are purchased by check or with funds transmitted through the
Automated Clearing House, the proceeds of redemptions of those shares are not
available until the Transfer Agent is reasonably certain that the purchase
payment has cleared, which could take up to ten calendar days from the purchase
date.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, a Fund may
redeem shares in any account, except retirement plans, and pay the proceeds,
less any applicable contingent deferred sales charge, to the shareholder if the
account balance falls below the required minimum value of $500. Shares will not
be redeemed in this manner, however, if the balance falls below $500 because of
changes in a 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 account requirement.
DETERMINING THE PRICE OF SHARES
Class A Shares of the Funds are sold at net asset value plus a sales charge,
while Class B Shares of the Funds are sold without a front-end sales charge.
Shares are redeemed at net asset value less any applicable contingent deferred
sales charge. See "Investing in the Funds -- Alternative Sales Charge Options."
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 net asset value need not be
determined on days when no Fund shares are tendered for redemption and no order
for that Fund's 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 promptly to forward
purchase and redemption orders to the Transfer Agent. In the case of redemptions
and repurchases of shares owned by corporations, trusts or estates, the Transfer
Agent or Fund 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.
DETERMINING NET ASSET VALUE
The net asset value per share for each of the Funds 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. For the purpose of
determining the aggregate net assets of the Funds, cash and receivables will be
valued at their face amounts. Interest will be recorded as accrued and dividends
will be recorded on the ex-dividend date. Investments in equity securities which
are traded on a national securities exchange (or reported on the NASDAQ national
market system) are stated at the last quoted sales price if readily available
for such equity securities on each business day; other equity securities traded
in the over-the-counter market and listed equity securities for which no sale
was reported on that date are stated at the last quoted bid price. Debt
obligations exceeding 60 days to maturity which are actively traded are valued
by an independent pricing service at the most recently quoted bid price. Debt
obligations with 60 days or less remaining until maturity may be valued at their
amortized cost. Foreign securities are valued based upon quotation from the
primary market in which they are traded. When market quotations are not readily
available, securities are valued at fair value as determined in good faith by
procedures established and approved by the Board of Directors.
Portfolio securities underlying actively traded options are valued at their
market price as determined above. The current market value of any exchange
traded option held or written by a Fund is its last sales price on the exchange
prior to the time when assets are valued, unless the bid price is higher or the
asked price is lower, in which event the bid or asked price is used. In the
absence of any sales that day, options will be valued at the current closing bid
price.
FOREIGN SECURITIES
Any assets or liabilities of International Index Fund initially expressed in
terms of foreign currencies are translated into United States dollars using
current exchange rates. Trading in securities on foreign markets may be
completed before the close of business on each business day of International
Index Fund. Thus, the calculation of the Fund's net asset value may not take
place contemporaneously with the determination of the prices of foreign
securities held in the Fund's portfolios. If events materially affecting the
value of foreign securities occur between the time when their price is
determined and the time when the Fund's net asset value is calculated, such
securities will be valued at fair value as determined in good faith by or under
the direction of the Board of Directors. In addition, trading in securities on
foreign markets may not take place on all days on which the New York Stock
Exchange (the "Exchange") is open for business or may take place on days on
which the Exchange is not open for business. Therefore, the net asset value of
International Index Fund might be significantly affected on days when an
investor has no access to the Fund.
INCOME TAXES
FEDERAL INCOME TAXATION
Each Fund is treated as a different entity for federal income tax purposes. Each
of the Funds intends to qualify as a regulated investment company under the
Internal Revenue Code of 1986, as amended (the "Code"). If so qualified and
provided certain distribution requirements are met, a Fund will not be liable
for federal income taxes to the extent it distributes its income to its
shareholders.
Distributions paid from the net investment income and from any net realized
short-term capital gains of a Fund, will be taxable to shareholders as ordinary
income, whether received in cash or in additional shares. Dividends paid by the
Funds attributable to investments in the securities of foreign issuers will not
be eligible for the 70% deduction for dividends received by corporations.
Distributions paid by each Fund from long-term capital gains (and designated as
such) will be taxable as long-term capital gains for federal income tax
purposes, whether received in cash or shares, regardless of how long a
shareholder has held the shares in a Fund. Long-term capital gains of
individuals are currently taxed at a maximum rate of 28%.
Gain or loss realized on the sale or exchange of shares in a Fund will be
treated as capital gain or loss, provided that (as is usually the case) the
shares represented a capital asset in the hands of the shareholder. Such gain or
loss will be long-term gain or loss if the shares were held for more than one
year.
A Fund may be required to "back-up" withhold 31% of any dividend, distribution,
or redemption payment made to a shareholder who fails to furnish the Fund with
the shareholder's Social Security number or other taxpayer identification number
or to certify that he or she is not subject to back-up withholding.
International Index Fund may be required to pay withholding and other taxes
imposed by foreign countries, generally at rates from 10% to 40%, which would
reduce the Fund's investment income. Tax conventions between certain countries
and the United States may reduce or eliminate such taxes.
If at the end of International Index Fund's taxable year more than 50% of its
total assets consist of securities of foreign corporations, it will be eligible
to file an election with the Internal Revenue Service pursuant to which
shareholders of the Fund will be required to include their respective pro rata
portions of such foreign taxes in gross income, treat such amounts as foreign
taxes paid by them, and deduct such amounts in computing their taxable income
or, alternatively, use them as foreign tax credits against their federal income
taxes. If such an election is filed for a year, International Index Fund
shareholders will be notified of the amounts which they may deduct as foreign
taxes paid or used as foreign tax credits.
Alternatively, if the amount of foreign taxes paid by International Index Fund
is not large enough in future years to warrant its making the election described
above, the Fund may claim the amount of foreign taxes paid as a deduction
against its own gross income. In that case, shareholders would not be required
to include any amount of foreign taxes paid by the Fund in their income and
would not be permitted either to deduct any portion of foreign taxes from their
own income or to claim any amount of foreign tax credit for taxes paid by the
Fund.
This is a general summary of the federal tax laws applicable to the Funds and
their shareholders as of the date of this Prospectus. See the Statement of
Additional Information for further details.
FUND SHARES
Each share of a 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 Funds have no
preemptive or conversion rights.
Each share of a Fund has one vote. On some issues, such as the election of
directors, all shares of all FAIF 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.
Under the laws of the State of Maryland and FAIF's Articles of Incorporation,
FAIF is not required to hold shareholder meetings unless they (i) are required
by the 1940 Act, or (ii) are requested in writing by the holders of 25% or more
of the outstanding shares of FAIF.
CALCULATION OF PERFORMANCE DATA
From time to time, either of the Funds may advertise information regarding its
performance. Each Fund may publish its "yield," its "cumulative total return,"
its "average annual total return," and its "distribution rate." Distribution
rates may only be used in connection with sales literature and shareholder
communications preceded or accompanied by a Prospectus. Each of these
performance figures is based upon historical results and is not intended to
indicate future performance, and, except for "distribution rate," is
standardized in accordance with Securities and Exchange Commission ("SEC")
regulations.
"Yield" for the Funds is computed by dividing the net investment income per
share (as defined in applicable SEC regulations) earned during a 30-day period
(which period will be stated in the advertisement) by the maximum offering price
per share on the last day of the period. Yield is an annualized figure, in that
it assumes that the same level of net investment income is generated over a one
year period. The yield formula annualizes net investment income by providing for
semi-annual compounding.
"Total return" is based on the overall dollar or percentage change in value of a
hypothetical investment in a Fund assuming reinvestment of dividend
distributions and deduction of all charges and expenses, including the maximum
sales charge imposed on Class A Shares or the contingent deferred sales charge
imposed on Class B Shares redeemed at the end of the specified period covered by
the total return figure. "Cumulative total return" reflects a Fund's performance
over a stated period of time. "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. As a
supplement to total return computations, a Fund may also publish "total
investment return" computations which do not assume deduction of the maximum
sales charge imposed on Class A Shares or the contingent deferred sales charge
imposed on Class B Shares.
"Distribution rate" is determined by dividing the income dividends per share for
a stated period by the maximum offering price per share on the last day of the
period. All distribution rates published for the Funds are measures of the level
of income dividends distributed during a specified period. Thus, these rates
differ from yield (which measures income actually earned by a Fund) and total
return (which measures actual income, plus realized and unrealized gains or
losses of a Fund's investments). Consequently, distribution rates alone should
not be considered complete measures of performance.
The performance of the Class A and Class B Shares of a Fund will normally be
lower than for the Class C Shares because Class C Shares are not subject to the
sales charges and distribution and/or shareholder servicing expenses applicable
to Class A and Class B Shares. In addition, the performance of Class A and Class
B Shares of a Fund will differ because of the different sales charge structures
of the classes and because of the differing distribution and shareholder
servicing fees charged to Class B Shares.
In reports or other communications to shareholders and in advertising material,
the performance of each Fund may be compared to recognized unmanaged indices or
averages of the performance of similar securities and to composites of such
indices and averages. Also, the performance of each Fund may be compared to that
of other funds of similar size and objectives as listed in the rankings prepared
by Lipper Analytical Services, Inc. or similar independent mutual fund rating
services, and each Fund may include in such reports, communications and
advertising material evaluations published by nationally recognized independent
ranking services and publications. For further information regarding the Funds'
performance, see "Fund Performance" in the Statement of Additional Information.
SPECIAL INVESTMENT METHODS
This section provides additional information concerning the securities in which
the Funds may invest and related topics. Further information concerning these
matters is contained in the Statement of Additional Information.
REPURCHASE AGREEMENTS
Each Fund is permitted to enter into repurchase agreements. A repurchase
agreement involves the purchase by a Fund of securities with the agreement that
after a stated period of time, the original seller will buy back the same
securities ("collateral") at a predetermined price or yield. Repurchase
agreements involve certain risks not associated with direct investments in
securities. If the original seller defaults on its obligation to repurchase as a
result of its bankruptcy or otherwise, the purchasing Fund will seek to sell the
collateral, which could involve costs or delays. Although collateral (which may
consist of any fixed income security which is an eligible investment for the
Fund entering into the repurchase agreement) will at all times be maintained in
an amount equal to the repurchase price under the agreement (including accrued
interest), a Fund would suffer a loss if the proceeds from the sale of the
collateral were less than the agreed-upon repurchase price. The Adviser will
monitor the creditworthiness of the firms with which the Funds enter into
repurchase agreements.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS
Small Cap Value Fund may purchase securities on a when-issued or
delayed-delivery basis. When such a transaction is negotiated, the purchase
price is fixed at the time the purchase commitment is entered, but delivery of
and payment for the securities take place at a later date. The Fund will not
accrue income with respect to securities purchased on a when-issued or
delayed-delivery basis prior to their stated delivery date. Pending delivery of
the securities, the Fund will maintain in a segregated account cash or liquid
high-grade securities in an amount sufficient to meet its purchase commitments.
The purchase of securities on a when-issued or delayed-delivery basis exposes
the Fund to risk because the securities may decrease in value prior to delivery.
In addition, the Fund's purchase of securities on a when-issued or
delayed-delivery basis while remaining substantially fully invested could
increase the amount of the Fund's total assets that are subject to market risk,
resulting in increased sensitivity of net asset value to changes in market
prices. However, the Fund will engage in when-issued and delayed-delivery
transactions only for the purpose of acquiring portfolio securities consistent
with their investment objectives, and not for the purpose of investment
leverage. A seller's failure to deliver securities to the Fund could prevent the
Fund from realizing a price or yield considered to be advantageous.
LENDING OF PORTFOLIO SECURITIES
In order to generate additional income, each of the Funds may lend portfolio
securities representing up to one-third of the value of its total assets to
broker-dealers, banks or other institutional borrowers of securities. If the
Funds engage in securities lending, distributions paid to shareholders from the
resulting income will not be excludable from shareholders' gross income for
income tax purposes. As with other extensions of credit, there may be risks of
delay in recovery of the securities or even loss of rights in the collateral
should the borrower of the securities fail financially. However, the Funds will
only enter into loan arrangements with broker-dealers, banks, or other
institutions which the Adviser has determined are creditworthy under guidelines
established by the Board of Directors. In these loan arrangements, the Funds
will receive collateral in the form of cash, United States Government securities
or other high-grade debt obligations equal to at least 100% of the value of the
securities loaned. Collateral is marked to market daily. The Funds will pay a
portion of the income earned on the lending transaction to the placing broker
and may pay administrative and custodial fees (including fees to an affiliate of
the Adviser) in connection with these loans.
OPTIONS TRANSACTIONS
PURCHASES OF PUT AND CALL OPTIONS. Small Cap Value Fund may purchase put and
call options on equity securities, and both Funds may purchase put and call
options on stock indices. These transactions will be undertaken only for the
purpose of reducing risk to the Fund; that is, for "hedging" purposes.
A put option on a security gives the purchaser of the option the right (but not
the obligation) to sell, and the writer of the option the obligation to buy, the
underlying security at a stated price (the "exercise price") at any time before
the option expires. A call option on a security gives the purchaser the right
(but not the obligation) to buy, and the writer the obligation to sell, the
underlying security at the exercise price at any time before the option expires.
The purchase price for a put or call option is the "premium" paid by the
purchaser for the right to sell or buy.
Options on indices are similar to options on securities except that, rather than
the right to take or make delivery of a specific security at a stated price, an
option on an index gives the holder the right to receive, upon exercise of the
option, a defined amount of cash if the closing value of the index upon which
the option is based is greater than, in the case of a call, or less than, in the
case of a put, the exercise price of the option.
Neither Fund will invest more than 5% of the value of its total assets in
purchased options, provided that options which are "in the money" at the time of
purchase may be excluded from this 5% limitation. A call option is "in the
money" if the exercise price is lower than the current market price of the
underlying security or index, and a put option is "in the money" if the exercise
price is higher than the current market price. A Fund's loss exposure in
purchasing an option is limited to the sum of the premium paid and the
commission or other transaction expenses associated with acquiring the option.
The use of purchased put and call options involves certain risks. These include
the risk of an imperfect correlation between market prices of securities held by
the Fund and the prices of options, and the risk of limited liquidity in the
event that the Fund seeks to close out an options position before expiration by
entering into an offsetting transaction.
WRITING OF CALL OPTIONS. Small Cap Value Fund may write (sell) covered call
options on equity securities which it owns or has the right to acquire to the
extent specified under "Investment Objectives and Policies." These transactions
would be undertaken primarily to produce additional income.
When the Fund sells a covered call option, it is paid a premium by the
purchaser. If the market price of the security covered by the option does not
increase above the exercise price before the option expires, the option
generally will expire without being exercised, and the Fund will retain both the
premium paid for the option and the security. If the market price of the
security covered by the option does increase above the exercise price before the
option expires, however, the option is likely to be exercised by the purchaser.
In that case the Fund will be required to sell the security at the exercise
price, and it will not realize the benefits of increases in the market price of
the security above the exercise price of the option.
OPTIONS ON STOCK INDICES. Each Fund also may write call options on stock indices
the movements of which generally correlate with those of the Fund's portfolio
holdings. These transactions, which would be undertaken principally to produce
additional income, entail the risk of an imperfect correlation between movements
of the index covered by the option and movements in the price of the Fund's
portfolio securities.
CASH ITEMS
The "cash items" in which each Fund may invest, as described under "Investment
Objectives and Policies," include short-term obligations such as commercial
paper and variable amount master demand notes; United States dollar-denominated
time and savings deposits (including certificates of deposit); bankers
acceptances; obligations of the United States Government or its agencies or
instrumentalities; repurchase agreements collateralized by eligible investments
of the Fund; securities of other mutual funds which invest primarily in debt
obligations with remaining maturities of 13 months or less (which investments
are subject to the advisory fee); and other similar high-quality short-term
United States dollar-denominated obligations. The other mutual funds in which
each Fund may so invest include money market funds advised by the Adviser,
subject to certain restrictions contained in an exemptive order issued by the
Securities and Exchange Commission with respect thereto.
FUTURES AND OPTIONS ON FUTURES
International Index Fund may engage in futures transactions and purchase options
on futures to the extent specified under "Investment Objectives and Policies."
These transactions may include the purchase of stock index futures and options
on stock index futures.
A futures contract on an index obligates the seller to deliver, and entitles the
purchaser to receive, an amount of cash equal to a specific dollar amount times
the difference between the value of the index at the expiration date of the
contract and the index value specified in the contract. The acquisition of put
and call options on futures contracts will, respectively, give International
Index Fund the right (but not the obligation), for a specified exercise price,
to sell or to purchase the underlying futures contract at any time during the
option period.
The Fund may use futures contracts and options on futures in an effort to hedge
against market risks. In addition, International Index Fund may use stock index
futures and options on futures to maintain sufficient liquidity to meet
redemption requests, to increase the level of Fund assets devoted to replicating
the composition of the EAFE Index and to reduce transaction costs.
Aggregate initial margin deposits for futures contracts, and premiums paid for
related options, may not exceed 5% of the Fund's total assets. Futures
transactions will be limited to the extent necessary to maintain the Fund's
qualification as a regulated investment company under the Internal Revenue Code
of 1986, as amended.
Where International Index Fund is permitted to purchase options on futures, its
potential loss is limited to the amount of the premiums paid for the options. As
stated above, this amount may not exceed 5% of the Fund's total assets. Where
International Index Fund is permitted to enter into futures contracts obligating
it to purchase an index in the future at a specified price, the Fund could lose
100% of its net assets in connection therewith if it engaged extensively in such
transactions and if the value of the subject index at the delivery or settlement
date fell to zero for all contracts into which the Fund was permitted to enter.
Futures transactions involve brokerage costs and require International Index
Fund to segregate assets to cover contracts that would require it to purchase an
index in the future at a specified date. The Fund may lose the expected benefit
of futures transactions if the index value or exchange rates moves in an
unanticipated manner. Such unanticipated changes may also result in poorer
overall performance than if the Fund had not entered into any futures
transactions. There is no assurance of liquidity in the secondary market for
purposes of closing out futures positions.
FIXED INCOME SECURITIES
The fixed income securities in which Small Cap Value Fund may invest include
securities issued or guaranteed by the United States Government or its agencies
or instrumentalities, nonconvertible preferred stocks, nonconvertible corporate
debt securities, and short-term obligations of the kinds described above under
"-- Cash Items." Investments in nonconvertible preferred stocks and
nonconvertible corporate debt obligations will be limited to securities which
are rated at the time of purchase not less than BBB by Standard & Poor's or Baa
by Moody's (or equivalent short-term ratings), or which have been assigned an
equivalent rating by another nationally recognized statistical rating
organization, or which are of comparable quality in the judgment of the Adviser.
Obligations rated BBB, Baa or their equivalent, although investment grade, have
speculative characteristics and carry a somewhat higher risk of default than
obligations rated in the higher investment grade categories. In addition, Small
Cap Value Fund may invest up to 5% of its net assets in less than investment
grade convertible debt obligations.
The fixed income securities specified above are subject to (i) interest rate
risk, (the risk that increases in market interest rates will cause declines in
the value of debt securities held by the Fund), (ii) credit risk (the risk that
issuers of debt securities held by the Fund default in making required
payments), and (iii) call or prepayment risk (the risk that a borrower may
exercise the right to prepay a debt obligation before its stated maturity,
requiring the Fund to reinvest the prepayment at a lower interest rate).
FOREIGN SECURITIES
GENERAL. Under normal market conditions, International Index Fund invests at
least 65% of its total assets in equity securities which trade in markets other
than the United States. In addition, Small Cap Value Fund may invest up to 25%
of its total assets in securities of foreign issuers which are either listed on
a United States securities exchange or represented by American Depositary
Receipts.
Investment in foreign securities is subject to special investment risks that
differ in some respects from those related to investments in securities of
United States domestic issuers. These risks include political, social or
economic instability in the country of the issuer, the difficulty of predicting
international trade patterns, the possibility of the imposition of exchange
controls, expropriation, limits on removal of currency or other assets,
nationalization of assets, foreign withholding and income taxation, and foreign
trading practices (including higher trading commissions, custodial charges and
delayed settlements). Foreign securities also may be subject to greater
fluctuations in price than securities issued by United States corporations. The
principal markets on which these securities trade may have less volume and
liquidity, and may be more volatile, than securities markets in the United
States.
In addition, there may be less publicly available information about a foreign
company than about a United States domiciled company. Foreign companies
generally are not subject to uniform accounting, auditing and financial
reporting standards comparable to those applicable to United States domestic
companies. There is also generally less government regulation of securities
exchanges, brokers and listed companies abroad than in the United States.
Confiscatory taxation or diplomatic developments could also affect investment in
those countries. In addition, foreign branches of United States banks, foreign
banks and foreign issuers may be subject to less stringent reserve requirements
and to different accounting, auditing, reporting, and recordkeeping standards
than those applicable to domestic branches of United States banks and United
States domestic issuers.
AMERICAN DEPOSITARY RECEIPTS AND EUROPEAN DEPOSITARY RECEIPTS. For many foreign
securities, United States dollar-denominated American Depositary Receipts, which
are traded in the United States on exchanges or over-the-counter, are issued by
domestic banks. American Depositary Receipts represent the right to receive
securities of foreign issuers deposited in a domestic bank or a correspondent
bank. American Depositary Receipts do not eliminate all the risk inherent in
investing in the securities of foreign issuers. However, by investing in
American Depositary Receipts rather than directly in foreign issuers' stock, the
Fund can avoid currency risks during the settlement period for either purchases
or sales. In general, there is a large, liquid market in the United States for
many American Depositary Receipts. The information available for American
Depositary Receipts is subject to the accounting, auditing and financial
reporting standards of the domestic market or exchange on which they are traded,
which standards are more uniform and more exacting than those to which many
foreign issuers may be subject. International Index Fund also may invest in
European Depositary Receipts, which are receipts evidencing an arrangement with
a European bank similar to that for American Depositary Receipts and which are
designed for use in the European securities markets. European Depositary
Receipts are not necessarily denominated in the currency of the underlying
security.
Certain American Depositary Receipts and European Depositary Receipts, typically
those denominated as unsponsored, require the holders thereof to bear most of
the costs of the facilities while issuers of sponsored facilities normally pay
more of the costs thereof. The depository of an unsponsored facility frequently
is under no obligation to distribute shareholder communications received from
the issuer of the deposited securities or to pass through the voting rights to
facility holders in respect to the deposited securities, whereas the depository
of a sponsored facility typically distributes shareholder communications and
passes through voting rights.
PORTFOLIO TRANSACTIONS
Portfolio transactions in the over-the-counter market will be effected with
market makers or issuers, unless better overall price and execution are
available through a brokerage transaction. It is anticipated that most portfolio
transactions involving debt securities will be executed on a principal basis.
Also, with respect to the placement of portfolio transactions with securities
firms, subject to the overall policy to seek to place portfolio transactions as
efficiently as possible and at the best price, research services and placement
of orders by securities firms for a Fund's shares may be taken into account as a
factor in placing portfolio transactions for the Fund.
PORTFOLIO TURNOVER
Although the Funds do not intend generally to trade for short-term profits, they
may dispose of a security without regard to the time it has been held when such
action appears advisable to the Adviser. The portfolio turnover rate for a Fund
may vary from year to year and may be affected by cash requirements for
redemptions of shares. High portfolio turnover rates generally would result in
higher transaction costs and could result in additional tax consequences to a
Fund's shareholders.
INVESTMENT RESTRICTIONS
The fundamental and nonfundamental investment restrictions of the Funds are set
forth in full in the Statement of Additional Information. The fundamental
restrictions include the following:
* Neither of the Funds will borrow money, except from banks for temporary or
emergency purposes. The amount of such borrowing may not exceed 10% of the
borrowing Fund's total assets. Neither of the Funds will borrow money for
leverage purposes. For the purpose of this investment restriction, the use
of options and futures transactions and the purchase of securities on a
when-issued or delayed-delivery basis shall not be deemed the borrowing of
money. If a Fund engages in borrowing, its share price may be subject to
greater fluctuation, and the interest expense associated with the
borrowing may reduce the Fund's net income.
* Neither of the Funds will 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.
* Neither of the Funds will make short sales of securities.
* Neither of the Funds will purchase any securities on margin except to
obtain such short-term credits as may be necessary for the clearance of
transactions.
A fundamental policy or restriction, including those stated above, cannot be
changed without an affirmative vote of the holders of a "majority" of the
outstanding shares of the applicable Fund, as defined in the 1940 Act.
As a nonfundamental policy, neither of the Funds will invest more than 15% of
its net assets in all forms of illiquid investments, as determined pursuant to
applicable Securities and Exchange Commission rules and interpretations. Section
4(2) commercial paper and Rule 144A securities may be determined to be "liquid"
under guidelines adopted by the Board of Directors. 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.
INFORMATION CONCERNING COMPENSATION PAID TO FIRST TRUST NATIONAL ASSOCIATION
AND ITS AFFILIATES
First Trust National Association ("First Trust") may act as fiduciary with
respect to plans subject to the Employee Retirement Income Security Act of 1974
("ERISA") which invest in the Funds. This section sets forth information
concerning compensation that First Trust and its affiliates may receive from the
Funds.
First Trust, as custodian for the assets of the Funds, receives the custodian
fees specified herein under the caption "Management -- Custodian."
First Bank National Association, which is under common control with First
Trust, acts as investment adviser to the Funds and receives the advisory fees
specified herein under the caption "Management -- Investment Adviser."
First Trust and its affiliates may receive shareholder servicing fees in the
amounts specified herein under the caption "Distributor." First Trust also may
act as securities lending agent in connection with the Funds' securities lending
transactions and receive as compensation for such services, fees equal to 40% of
the Funds' income from such securities lending transactions.
FIRST AMERICAN INVESTMENT FUNDS, INC.
Oaks, Pennsylvania 19456
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 INVESTMENTS DISTRIBUTION CO.
Oaks, Pennsylvania 19456
ADMINISTRATOR
SEI INVESTMENTS MANAGEMENT
CORPORATION
Oaks, Pennsylvania 19456
TRANSFER AGENT
DST SYSTEMS, INC.
1004 Baltimore
Kansas City, Missouri 64105
INDEPENDENT AUDITORS
KPMG PEAT MARWICK LLP
90 South Seventh Street
Minneapolis, Minnesota 55402
COUNSEL
DORSEY & WHITNEY LLP
220 South Sixth Street
Minneapolis, Minnesota 55402
FAIF-1002 (7/97)R
FIRST AMERICAN INVESTMENT FUNDS, INC.
INSTITUTIONAL CLASS
SMALL CAP VALUE FUND
INTERNATIONAL INDEX FUND
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
PROSPECTUS
________________, 1997
SUBJECT TO COMPLETION - July 21, 1997
[LOGO]
FIRST AMERICAN FUNDS
The power of disciplined investing
FIRST AMERICAN INVESTMENT FUNDS, INC.
Oaks, Pennsylvania 19456
INSTITUTIONAL CLASS PROSPECTUS
The shares described in this Prospectus represent interests in First American
Investment Funds, Inc., which consists of mutual funds with several different
investment portfolios and objectives. This Prospectus relates to the Class C
Shares of the following funds (the "Funds"):
* SMALL CAP VALUE FUND
* INTERNATIONAL INDEX 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.
SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, INCLUDING FIRST BANK NATIONAL ASSOCIATION AND 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, DUE TO
FLUCTUATIONS IN EACH FUND'S NET ASSET VALUE.
This Prospectus concisely sets forth 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 ______________, 1997 for the Funds
has been filed with the Securities and Exchange Commission ("SEC") 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
Investments Distribution Co., Oaks, Pennsylvania 19456. The SEC maintains a
World Wide Web site that contains reports and information regarding issuers that
file electronically with the SEC. The address of such site is
"http://www.sec.gov."
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 ______________, 1997.
TABLE OF CONTENTS
PAGE
SUMMARY 4
FEES AND EXPENSES 6
Class C Share Fees and Expenses 6
Information Concerning Fees and
Expenses 7
THE FUNDS 8
INVESTMENT OBJECTIVES AND
POLICIES 8
Small Cap Value Fund 9
International Index Fund 10
Risks to Consider 11
MANAGEMENT 12
Investment Adviser 12
Portfolio Managers 13
Custodian 14
Administrator 15
Transfer Agent 15
DISTRIBUTOR 15
PURCHASES AND REDEMPTIONS OF SHARES 16
Share Purchases and Redemptions 16
What Shares Cost 16
Foreign Securities 17
Exchanging Securities for Fund Shares 18
Certificates and Confirmations 18
Dividends and Distributions 18
Exchange Privilege 19
INCOME TAXES 19
Federal Income Taxation 19
FUND SHARES 21
CALCULATION OF PERFORMANCE DATA 21
SPECIAL INVESTMENT METHODS 23
Repurchase Agreements 23
When-Issued and Delayed-Delivery
Transactions 23
Lending of Portfolio Securities 24
Options Transactions 24
Cash Items 25
Futures and Options on Futures 26
Fixed Income Securities 27
Foreign Securities 27
Portfolio Transactions 29
Portfolio Turnover 29
Investment Restrictions 29
Information Concerning
Compensation Paid to First Trust
National Association and its
Affiliates 30
SUMMARY
First American Investment Funds, Inc. ("FAIF") is an open-end investment company
which offers shares in several different mutual funds. This Prospectus provides
information with respect to the Class C Shares of the following funds (the
"Funds"):
SMALL CAP VALUE FUND has an objective of capital appreciation. Under normal
market conditions, the Fund invests at least 65% of its total assets in equity
securities of small-capitalization companies (those with market capitalizations
of less than $1 billion at the time of purchase). In selecting equity
securities, the Fund's adviser utilizes a value-based selection discipline,
investing in equity securities it believes are undervalued relative to other
securities at the time of purchase.
INTERNATIONAL INDEX FUND has an objective of providing investment results that
correspond to the performance of the Morgan Stanley Europe, Australia, Far East
Composite Index (the "EAFE Index"). The Fund invests substantially (at least 65%
of total assets) in common stocks included in the EAFE Index. The Fund's adviser
believes that its objective can be best achieved by investing in common stocks
of approximately 50% to 100% of the issues included in the EAFE Index, depending
on the size of the Fund.
INVESTMENT ADVISER First Bank National Association (the "Adviser") serves as
investment adviser to each of the Funds. See "Management."
DISTRIBUTOR; ADMINISTRATOR SEI Investments Distribution Co. (the "Distributor")
serves as the distributor of the Funds' shares. SEI Investments Management
Corporation (the "Administrator") serves as the administrator of the Funds. See
"Management" and "Distributor."
ELIGIBLE INVESTORS; OFFERING PRICES Class C Shares 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. Class C Shares are
sold at net asset value without any front-end or deferred sales charges. See
"Purchases and Redemptions of Shares."
EXCHANGES Class C Shares of any Fund may be exchanged for Class C Shares of
other funds in the First American family at the shares' respective net asset
values with no additional charge. See "Purchases and Redemptions of Shares --
Exchange Privilege."
REDEMPTIONS Shares of each Fund may be redeemed at any time at their net asset
value next determined after receipt of a redemption request by the Funds'
transfer agent, with no additional charge. See "Purchases and Redemptions of
Shares."
RISKS TO CONSIDER Each of the Funds is subject to the risk of generally adverse
equity markets. Investors also should recognize that market prices of equity
securities generally, and of particular companies' equity securities, frequently
are subject to greater volatility than prices of fixed income securities.
Because Small Cap Value Fund is actively managed, its performance will reflect
in part the ability of the Adviser to select securities which are suited to
achieving its investment objectives. Due to its active management, this Fund
could underperform other mutual funds with similar investment objectives or the
market generally.
In addition, (i) Small Cap Value Fund is subject to risks associated with
investing in small-capitalization companies; (ii) International Index Fund is
subject to risks associated with investing in foreign securities and to currency
risks; (iii) the Small Cap Value Fund may invest a specified portion of its
assets in securities of foreign issuers which are listed on a United States
stock exchange or represented by American Depositary Receipts; (iv) the Funds
may invest (but not for speculative purposes) in options on stock indices; and
(v) International Index Fund may invest (but not for speculative purposes) in
stock index futures contracts, options on stock index futures, and/or index
participation contracts based on the EAFE Index. See "Investment Objectives and
Policies -- Risks to Consider" and "Special Investment Methods."
SHAREHOLDER INQUIRIES Any questions or communications regarding the Funds or a
shareholder account should be directed to the Distributor by calling (800)
637-2548, or to the financial institution which holds shares on an investor's
behalf.
FEES AND EXPENSES
CLASS C SHARE FEES AND EXPENSES
<TABLE>
<CAPTION>
SMALL CAP INTERNATIONAL
VALUE FUND INDEX FUND
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum sales load imposed on purchases None None
Maximum sales load imposed
on reinvested dividends None None
Deferred sales load None None
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)(1) 0.70% 0.46%
Rule 12b-1 fees None None
Other expenses
(after reimbursements)(1) 0.20% 0.29%
Total fund operating expenses
(after voluntary fee waivers and
reimbursements)(1) 0.90% 0.75%
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 $ 9 $ 8
3 years $ 29 $ 24
</TABLE>
(1) The Adviser intends to waive a portion of its fees and/or reimburse
expenses on a voluntary basis, and the amounts shown reflect these
waivers and reimbursements as of the date of this Prospectus. The
Adviser intends to maintain such waivers and reimbursements in effect
though September 30, 1998. Absent any fee waivers or reimbursements,
investment advisory fees for each Fund as an annualized percentage of
average daily net assets would be 0.70%; and total fund operating
expenses calculated on such basis would be 0.90% for Small Cap Value
Fund and 0.99% for International Index Fund. "Other expenses" includes
an administration fee and is based on estimated amounts for the current
fiscal year.
(2) Absent the fee waivers and reimbursements referred to in (1) above, the
dollar amounts for the 1 and 3-year periods would be as follows: Small
Cap Value Fund, $9 and $29, and International Index Fund, $10 and $32.
INFORMATION CONCERNING FEES AND EXPENSES
The purpose of the preceding tables is to assist the investor in understanding
the various costs and expenses that an investor in a Fund may bear directly or
indirectly. THE EXAMPLES CONTAINED IN THE TABLES 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 foregoing tables and
examples relates only to the Class C Shares of the Funds. The Funds also expect
to offer Class A and Class B Shares which are subject to the same expenses and,
in addition, to a front-end or contingent deferred sales load and certain
shareholder servicing expenses.
The examples in the above tables are based on annual Fund operating expenses
after voluntary fee waivers and expense reimbursements by the Adviser. The
Adviser intends to maintain such waivers in effect through September 30, 1998.
Prior to fee waivers, investment advisory fees accrue at the annual rate as a
percentage of average daily net assets of 0.70% for each of the Funds. "Other
expenses" in the tables are based on estimates.
Other expenses include fees paid by each Fund to 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 at an annual rate of 0.12% of average daily
net assets of each Fund subject to a minimum of $50,000 per Fund per fiscal
year; 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
0.105%. Other expenses of the Funds also includes the cost of maintaining
shareholder records, furnishing shareholder statements and reports, and other
services. Investment advisory fees, administrative fees and other expenses are
reflected in the Funds' daily dividends and are not charged to individual
shareholder accounts.
THE FUNDS
FAIF is an open-end management investment company which offers shares in several
different mutual funds (collectively, the "FAIF Funds"), each of which evidences
an interest in a separate and distinct investment portfolio. Shareholders may
purchase shares in each FAIF Fund through several separate classes which provide
for variations in distribution costs, shareholder servicing fees, voting rights
and dividends. Except for these differences among classes, each share of each
FAIF Fund represents an undivided proportionate interest in that fund. FAIF is
incorporated under the laws of the State of Maryland, and its principal offices
are located at Oaks, Pennsylvania 19456.
This Prospectus relates only to the Class C Shares of the Funds named on the
cover hereof. Information regarding the Class A and Class B Shares of these
Funds and regarding the Class A, Class B and Class C Shares of the other FAIF
Funds is contained in separate prospectuses that may be obtained from FAIF's
Distributor, SEI Investments Distribution Co., Oaks, Pennsylvania, 19456, or by
calling (800) 637-2548. The Board of Directors of FAIF may authorize additional
series or classes of common stock in the future.
INVESTMENT OBJECTIVES AND POLICIES
This section describes the investment objectives and policies of the Funds.
There is no assurance that any of these objectives will be achieved. The Funds'
investment objectives are not fundamental and therefore may be changed without a
vote of shareholders. Such changes could result in a Fund having investment
objectives different from those which shareholders considered appropriate at the
time of their investment in a Fund. Shareholders will receive written
notification at least 30 days prior to any change in a Fund's investment
objectives. Each of the Funds is a diversified investment company, as defined in
the Investment Company Act of 1940 (the "1940 Act").
If a percentage limitation on investments by a Fund stated below or 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 asset
values will not be deemed to violate the limitation except in the case of the
limitation on illiquid investments. Similarly, if a Fund is required or
permitted to invest a stated percentage of its assets in companies with no more
or no less than a stated market capitalization, deviations from the stated
percentages which result from changes in companies' market capitalizations after
the Fund purchases its shares will not be deemed to violate the limitation. A
Fund which is limited to investing in securities with specified ratings is not
required to sell a security if its rating is reduced or discontinued after
purchase, but the Fund may consider doing so. However, in no event will more
than 5% of either any Fund's net assets be invested in non-investment grade
securities. Descriptions of the rating categories of Standard & Poor's
Corporation ("Standard & Poor's") and Moody's Investors Service, Inc.
("Moody's") are contained in the Statement of Additional Information.
When the term "equity securities" is used in this Prospectus, it refers to
common stock and securities which are convertible into or exchangeable for, or
which carry warrants or other rights to acquire, common stock.
This section also contains information concerning certain investment risks borne
by Fund shareholders under the heading "-- Risks to Consider." Further
information concerning the securities in which the Funds may invest and related
matters is set forth under "Special Investment Methods."
SMALL CAP VALUE FUND
OBJECTIVES. Small Cap Value Fund has an objective of capital appreciation.
INVESTMENT POLICIES. Under normal market conditions, Small Cap Value Fund
invests at least 65% of its total assets in equity securities of small-
capitalization companies. For these purposes, small-capitalization companies are
deemed those with market capitalizations of less than $1 billion at the time of
purchase. In selecting equity securities, the Adviser utilizes a value-based
selection discipline, investing in equity securities it believes are undervalued
relative to other securities at the time of purchase. In assessing relative
value, the Adviser will consider such factors as ratios of market price to book
value, market price to earnings, and market price to assets; estimated earnings
growth rate; cash flow; and liquidation value.
The Fund also may invest up to 35% of its total assets in the aggregate in
equity securities of issuers with a market capitalization of $1 billion or more
and in fixed income securities of the kinds described under "Special Investment
Methods -- Foreign Securities."
Subject to the limitations stated above, the Fund may invest up to 25% of its
total assets in securities of foreign issuers which are either listed on a
United States stock exchange or represented by American Depositary Receipts. For
information about these kinds of investments and certain associated risks, see
"Special Investment Methods -- Foreign Securities."
In addition, the Fund may (i) enter into repurchase agreements; (ii) in order to
attempt to reduce risk, purchase put and call options on equity securities and
on stock indices; (iii) write covered call options covering up to 25% of the
equity securities owned by the Fund; (iv) purchase securities on a when-issued
or delayed-delivery basis; and (v) engage in the lending of portfolio
securities. For information about these investment methods, restrictions on
their use, and certain associated risks, see the related headings under "Special
Investment Methods."
For temporary defensive purposes during times of unusual market conditions, the
Fund may without limitation hold cash or invest in cash items of the kinds
described under "Special Investment Methods -- Cash Items." The Fund also may
invest not more than 35% of its total assets in cash and cash items in order to
utilize assets awaiting normal investment.
INTERNATIONAL INDEX FUND
OBJECTIVE. International Index Fund has an objective of providing investment
results that correspond to the performance of the Morgan Stanley Europe,
Australia, Far East Composite Index (the "EAFE Index").
INVESTMENT POLICIES. International Index Fund invests substantially (at least
65% of total assets) in common stocks included in the EAFE Index. The Adviser
believes that the Fund's objective can best be achieved by investing in the
common stocks of approximately 50% to 100% of the issues included in the EAFE
Index, depending on the size of the Fund. Normally, International Index Fund
will invest at least 65% of its total assets in securities traded in at least
three foreign countries.
Morgan Stanley designates the stocks included in the EAFE Index. A particular
stock's weighting in the EAFE Index is based on its total market value (that is,
its market price per share times the number of shares outstanding) relative to
that of all stocks included in the EAFE Index. From time to time, Morgan Stanley
may add or delete stocks to or from the EAFE Index. Inclusion of a particular
stock in the EAFE Index does not imply any opinion by Morgan Stanley as to its
merits as an investment, nor is Morgan Stanley a sponsor of or in any way
affiliated with the Fund.
The Fund is managed by utilizing a computer program that identifies which stocks
should be purchased or sold in order to replicate, as closely as possible, the
composition of the EAFE Index. The Fund includes a stock in its investment
portfolio in the order of the stock's weighting in the EAFE Index, starting with
the most heavily weighted stock. Thus, the proportion of Fund assets invested in
a stock, industry or country closely approximates the percentage of the EAFE
Index represented by that stock, industry or country. Portfolio turnover is
expected to be well below that of actively managed mutual funds.
Although the Fund will not duplicate the EAFE Index performance precisely, it is
anticipated that there will be a close correlation between the Fund's
performance and that of the EAFE Index in both rising and falling markets. The
Fund will attempt to achieve a correlation between the performance of its
portfolio and that of the EAFE Index of at least 95%, without taking into
account expenses of the Fund. A perfect correlation would be indicated by a
figure of 100%, which would be achieved if the Fund's net asset value, including
the value of its dividends and capital gains distributions, increased or
decreased in exact proportion to changes in the EAFE Index. The Fund's ability
to replicate the performance of the EAFE Index may be affected by, among other
things, changes in securities markets, the manner in which Morgan Stanley
calculates the EAFE Index, administrative and other expenses incurred by the
Fund, taxes (including foreign withholding taxes, which will affect the Fund)
and the amount and timing of cash flows into and out of the Fund. Although cash
flows into and out of the Fund will affect the Fund's portfolio turnover rate
and its ability to replicate the EAFE Index's performance, investment
adjustments will be made, as practicably as possible, to account for these
circumstances.
The Fund also may invest up to 20% of its total assets in the aggregate in stock
index futures contracts, options on stock indices, options on stock index
futures and index participation contracts based on the EAFE Index. The Fund will
not invest in these types of contracts and options for speculative purposes, but
rather to maintain sufficient liquidity to meet redemption requests; to increase
the level of Fund assets devoted to replicating the composition of the EAFE
Index; and to reduce transaction costs. These types of contracts and options and
certian associated risks are described under "Special Investment Methods --
Options Transactions." In addition, the Fund may enter into repurchase
agreements and engage in securities lending as described under "Special
Investment Methods -- Repurchase Agreements" and "Special Investment Methods --
Lending of Portfolio Securities."
In order to maintain liquidity during times of unusual market conditions, the
Fund also may invest temporarily in cash and cash items of the kinds described
under "Special Investment Methods -- Cash Items."
RISKS TO CONSIDER
An investment in Small Cap Value Fund and International Index Fund involves
certain risks. These include the following:
EQUITY SECURITIES GENERALLY. Market prices of equity securities generally, and
of particular companies' equity securities, frequently are subject to greater
volatility than prices of fixed income securities. Market prices of equity
securities as a group have dropped dramatically in a short period of time on
several occasions in the past, and they may do so again in the future. Each of
the Funds is subject to the risk of generally adverse equity markets.
SMALL-CAPITALIZATION COMPANIES. Small Cap Value Fund emphasizes investments in
companies with small market capitalizations. The equity securities of such
companies frequently have experienced greater price volatility in the past than
those of larger-capitalization companies, and they may be expected to do so in
the future. To the extent that Small Cap Value Fund invests in
small-capitalization companies, they are subject to this risk of greater
volatility.
ACTIVE MANAGEMENT. Small Cap Value Fund is actively managed by the Adviser. The
performance of this Fund therefore will reflect in part the ability of the
Adviser to select securities which are suited to achieving the Fund's investment
objective. Due to its active management, this Fund could underperform other
mutual funds with similar investment objectives or the market generally.
FOREIGN SECURITIES. International Index Fund is subject to special risks
associated with investing in foreign securities and to declines in net asset
value resulting from changes in exchange rates between the United States dollar
and foreign currencies. These risks are discussed under "Special Investment
Methods -- Foreign Securities" elsewhere herein. Because of the special risks
associated with foreign investing the Fund may be subject to greater volatility
than most mutual funds which invest principally in domestic securities.
OTHER. Investors also should review "Special Investment Methods" for information
concerning risks associated with certain investment techniques which may be
utilized by the Funds.
MANAGEMENT
The Board of Directors of FAIF has the primary responsibility for overseeing the
overall management and electing the officers of FAIF. 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 FAIF.
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 has acted as an investment adviser to FAIF since its
inception in 1987 and has acted as investment adviser to First American Funds,
Inc. since 1982 and to First American Strategy Funds, Inc. since 1996. As of
December 31, 1996, the Adviser was managing accounts with an aggregate value of
approximately $35 billion, including mutual fund assets in excess of $12
billion. First Bank System, Inc., 601 Second Avenue South, Minneapolis,
Minnesota 55480, is the holding company for the Adviser.
Small Cap Value Fund and International Index Fund has each agreed to pay the
Adviser monthly fees calculated on an annual basis equal to 0.70% of its
respective average daily net assets. The Adviser may, at its option, waive any
or all of its fees, or reimburse expenses, with respect to either 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 Funds from
time to time, in its discretion, while retaining the ability to be reimbursed by
the Funds for such amounts prior to the end of the fiscal year. This practice
would have the effect of lowering a 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. 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 that shareholders would not suffer adverse financial
consequences.
PORTFOLIO MANAGERS
Small Cap Value Fund is managed by a committee composed of Albin S. Dubiak,
Roland P. Whitcomb and Jeff A. Johnson.
ALBIN S. DUBIAK began his investment career as a security trader with First
National Bank of Chicago in 1963 before joining the Adviser as an investment
analyst in 1969. Mr. Dubiak received his bachelor's degree from Indiana
University and his master's degree in business administration from the
University of Arizona. Mr. Dubiak also is portfolio co-manager for several other
First American equity funds and is a member of the committees which manage
several other First American equity funds.
ROLAND B. WHITCOMB joined the Adviser in 1986 after serving as an account
executive with Smith Barney & Co. since 1979. He received his bachelor's
degree from the University of Chicago and is a Chartered Financial Analyst.
Mr. Whitcomb also is portfolio co-manager for several other First American
equity funds and is a member of the committees which manage several other First
American equity funds.
JEFF A. JOHNSON has been employed by the Adviser in investment management
since 1991 and in commercial lending from 1985 to 1991. Mr. Johnson received
his master of fine arts degree from the University of Iowa. Mr. Johnson also
is portfolio co-manager for several other First American equity funds and is a
member of the committee which manages several other First American equity
funds.
International Index Fund is co-managed by James S. Rovner and Evan Lundquist.
JAMES S. ROVNER joined the Adviser in 1986 and has managed assets for
institutional and individual clients for over 15 years. Mr. Rovner received
his bachelor's degree and his master's degree in business administration from
the University of Wisconsin and is a Chartered Financial Analyst.
EVAN LUNDQUIST joined the Adviser in 1993 and received his bachelor's degree
from St. Mary's College.
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 First Bank System, Inc., which also
controls the Adviser.
As compensation for its services to the Funds, the Custodian receives monthly
fees calculated on an annual basis equal to, for Small Cap Value Fund, 0.03% of
Small Cap Value Fund's average daily net assets, and for International Index
Fund, 0.10% of International Index Fund's average daily net assets. In addition,
the Custodian is reimbursed by the Funds for its out-of-pocket expenses incurred
while providing its services to the Funds. Rules adopted under the 1940 Act
permit International Index Fund to maintain its securities and cash in the
custody of certain eligible foreign banks and depositories. International Index
Fund's portfolio of non-United States securities are held by sub-custodians
which are approved by the directors of FAIF in accordance with these rules. This
determination is made pursuant to these rules following a consideration of a
number of factors including but not limited to, the reliability and financial
stability of the institution; the ability of the institution to perform
custodian services for International Index Fund; the reputation of the
institution in its national market; the political and economic stability of the
country in which the institution is located; and the risks of potential
nationalization or expropriation of International Index Fund's assets.
Sub-custodian fees with respect to International Index Fund are paid by the
Custodian out of the custodian's fees.
ADMINISTRATOR
The administrator for the Funds is SEI Investments Management Corporation, Oaks,
Pennsylvania 19456. The Administrator, a wholly-owned subsidiary of SEI
Investments Company, provides the Funds with certain administrative services
necessary to operate the Funds. These services include shareholder servicing and
certain accounting and other services. The Administrator provides these services
for a fee calculated at an annual rate of 0.12% of each Fund's average daily net
assets, subject to a minimum administrative fee during each fiscal year of
$50,000 per Fund; 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 0.105%. From time to time, the Administrator may voluntarily waive
its fees or reimburse expenses with respect to any of the Funds. Any such
waivers or reimbursements may be made at the Administrator's discretion and may
be terminated at any time.
TRANSFER AGENT
DST Systems, Inc. (the "Transfer Agent") serves as the transfer agent and
dividend disbursing agent for the Funds. The address of the Transfer Agent is
1004 Baltimore, Kansas City, Missouri 64105. The Transfer Agent is not
affiliated with the Distributor, the Administrator or the Adviser.
DISTRIBUTOR
SEI Investments Distribution Co. is the principal distributor for shares of the
Funds and of the other FAIF Funds. The Distributor is a Pennsylvania corporation
and is the principal distributor for a number of investment companies. The
Distributor is a wholly-owned subsidiary of SEI Investments Company and is
located at Oaks, Pennsylvania, 19456. The Distributor is not affiliated with the
Adviser, First Bank System, Inc., the Custodian or 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. In addition, the
Distributor and the Adviser and its affiliates may provide compensation from
their own resources for shareholder services provided by third parties,
including "one-stop" mutual fund networks through which the Funds are made
available.
PURCHASES AND REDEMPTIONS OF SHARES
SHARE PURCHASES AND REDEMPTIONS
Shares of the Funds are sold and redeemed on days on which the New York Stock
Exchange is open for business ("Business Days").
Payment for shares can be made only by wire transfer. 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:
Account Number 160234580266; 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. Purchase orders will be effective and eligible to
receive dividends declared the same day if the Transfer Agent receives an order
before 3:00 p.m. Central time 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 net asset value per share is calculated as of 3:00
p.m. Central time each Business Day. The Funds reserve the right to reject a
purchase order.
The Funds are required to redeem for cash all full and fractional shares of the
Funds. Redemption orders may be made any time before 3:00 p.m. Central time in
order to receive that day's redemption price. For redemption orders received
before 3:00 p.m. Central time, payment will ordinarily be made the next business
day by transfer of Federal funds, but payment may be made up to 7 days later.
WHAT SHARES COST
Class C Shares of the Funds are sold and redeemed at net asset value. 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 net asset value need not be
determined on days when no Fund shares are tendered for redemption and no order
for that Fund's 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. In the case of redemptions and repurchases of shares owned
by corporations, trusts or estates, the Transfer Agent 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.
DETERMINING NET ASSET VALUE. The net asset value per share for each of the Funds
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. For
the purpose of determining the aggregate net assets of the Funds, cash and
receivables will be valued at their face amounts. Interest will be recorded as
accrued and dividends will be recorded on the ex-dividend date. Investments in
equity securities which are traded on a national securities exchange (or
reported on the NASDAQ national market system) are stated at the last quoted
sales price if readily available for such equity securities on each business
day; other equity securities traded in the over-the-counter market and listed
equity securities for which no sale was reported on that date are stated at the
last quoted bid price. Debt obligations exceeding 60 days to maturity which are
actively traded are valued by an independent pricing service at the most
recently quoted bid price. Debt obligations with 60 days or less remaining until
maturity may be valued at their amortized cost. Foreign securities are valued
based upon quotation from the primary market in which they are traded. When
market quotations are not readily available, securities are valued at fair value
as determined in good faith by procedures established and approved by the Board
of Directors.
Portfolio securities underlying actively traded options are valued at their
market price as determined above. The current market value of any exchange
traded option held or written by a Fund is its last sales price on the exchange
prior to the time when assets are valued, unless the bid price is higher or the
asked price is lower, in which event the bid or asked price is used. In the
absence of any sales that day, options will be valued at the current closing bid
price.
Although the methodology and procedures for determining net asset value are
identical for all classes of shares, the net asset value per share of different
classes of shares of the same Fund may differ because of the distribution and/or
shareholder servicing expenses charged to Class A and Class B Shares.
FOREIGN SECURITIES
Any assets or liabilities of International Index Fund initially expressed in
terms of foreign currencies are translated into United States dollars using
current exchange rates. Trading in securities on foreign markets may be
completed before the close of business on each business day of International
Index Fund. Thus, the calculation of the Fund's net asset value may not take
place contemporaneously with the determination of the prices of foreign
securities held in the Fund's portfolios. If events materially affecting the
value of foreign securities occur between the time when their price is
determined and the time when the Fund's net asset value is calculated, such
securities will be valued at fair value as determined in good faith by or under
the direction of the Board of Directors. In addition, trading in securities on
foreign markets may not take place on all days on which the New York Stock
Exchange (the "Exchange") is open for business or may take place on days on
which the Exchange is not open for business. Therefore, the net asset value of
International Index Fund might be significantly affected on days when an
investor has no access to the Fund.
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 by the Fund and a determination by the
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 Fund shares on the day the securities are valued.
CERTIFICATES AND CONFIRMATIONS
The Transfer Agent maintains a share account for each shareholder. Share
certificates will not be issued by the Funds.
Confirmations of each purchase and redemption are sent to each shareholder. In
addition, monthly confirmations are sent to report all transactions and
dividends paid during that month for the Funds.
DIVIDENDS AND DISTRIBUTIONS
Dividends are declared and paid quarterly to all shareholders of record on the
record date. Distributions of any net realized long-term capital gains will be
made at least once every 12 months. Dividends and distributions are
automatically reinvested in additional shares of the Fund paying the dividend on
payment dates at the ex-dividend date net asset value without a sales charge,
unless shareholders request cash payments on the new account form or by writing
to the Fund.
All shareholders on the record date are entitled to the dividend. If shares are
purchased before a record date for a dividend or a distribution of capital
gains, a shareholder will pay the full price for the shares and will receive
some portion of the purchase price back as a taxable dividend or distribution
(to the extent, if any, that the dividend or distribution is otherwise taxable
to holders of Fund shares). If shares are redeemed or exchanged before the
record date for a dividend or distribution or are purchased after the record
date, those shares are not entitled to the dividend or distribution.
The amount of dividends payable on Class C Shares generally will be more than
the dividends payable on Class A or Class B Shares because of the distribution
and/or shareholder servicing expenses charged to Class A and Class B Shares.
EXCHANGE PRIVILEGE
Shareholders may exchange Class C Shares of a Fund for currently available Class
C Shares of the other FAIF Funds or of other funds in the First American family
at net asset value. Exchanges of shares among the First American family of 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. 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.
Shares of a class in which an investor is no longer eligible to participate may
be exchanged for shares of a class in which that investor is eligible to
participate. An example of this kind of exchange would be a situation in which
Class C Shares of a Fund held by a financial institution in a trust or agency
capacity for one or more individual beneficiaries are exchanged for Class A
Shares of that Fund and distributed to the individual beneficiaries.
INCOME TAXES
FEDERAL INCOME TAXATION
Each Fund is treated as a different entity for federal income tax purposes. Each
of the Funds intends to qualify as a regulated investment company under the
Internal Revenue Code of 1986, as amended (the "Code"). If so qualified and
provided certain distribution requirements are met, a Fund will not be liable
for federal income taxes to the extent it distributes its income to its
shareholders.
Distributions paid from the net investment income and from any net realized
short-term capital gains of each Fund will be taxable to shareholders as
ordinary income, whether received in cash or in additional shares. Dividends
paid by the Funds attributable to investments in the securities of foreign
issuers will not be eligible for the 70% deduction for dividends received by
corporations. Distributions paid by each Fund from long-term capital gains (and
designated as such) will be taxable as long-term capital gains for federal
income tax purposes, whether received in cash or shares, regardless of how long
a shareholder has held the shares in a Fund. Shareholders not subject to federal
income taxation will not be taxed on distributions by a Fund.
Gain or loss realized on the sale or exchange of shares in a Fund will be
treated as capital gain or loss, provided that (as is usually the case) the
shares represented a capital asset in the hands of the shareholder. Such gain or
loss will be long-term gain or loss if the shares were held for more than one
year.
International Index Fund may be required to pay withholding and other taxes
imposed by foreign countries, generally at rates from 10% to 40%, which would
reduce the Fund's investment income. Tax conventions between certain countries
and the United States may reduce or eliminate such taxes.
If at the end of International Index Fund's taxable year more than 50% of its
total assets consist of securities of foreign corporations, it will be eligible
to file an election with the Internal Revenue Service pursuant to which
shareholders of the Fund will be required to include their respective pro rata
portions of such foreign taxes in gross income, treat such amounts as foreign
taxes paid by them, and deduct such amounts in computing their taxable income
or, alternatively, use them as foreign tax credits against their federal income
taxes. If such an election is filed for a year, International Index Fund
shareholders will be notified of the amounts which they may deduct as foreign
taxes paid or used as foreign tax credits.
Alternatively, if the amount of foreign taxes paid by International Index Fund
is not large enough in future years to warrant its making the election described
above, the Fund may claim the amount of foreign taxes paid as a deduction
against its own gross income. In that case, shareholders would not be required
to include any amount of foreign taxes paid by the Fund in their income and
would not be permitted either to deduct any portion of foreign taxes from their
own income or to claim any amount of foreign tax credit for taxes paid by the
Fund.
This is a general summary of the federal tax laws applicable to the Funds and
their shareholders as of the date of this Prospectus. See the Statement of
Additional Information for further details.
FUND SHARES
Each share of a 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 Funds have no
preemptive or conversion rights.
Each share of a Fund has one vote. On some issues, such as the election of
directors, all shares of all FAIF 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.
Under the laws of the State of Maryland and FAIF's Articles of Incorporation,
FAIF is not required to hold shareholder meetings unless they (i) are required
by the 1940 Act, or (ii) are requested in writing by the holders of 25% or more
of the outstanding shares of FAIF.
CALCULATION OF PERFORMANCE DATA
From time to time, any of the Funds may advertise information regarding its
performance. Each Fund may publish its "yield," its "cumulative total return,"
its "average annual total return," and its "distribution rate." Distribution
rates may only be used in connection with sales literature and shareholder
communications preceded or accompanied by a Prospectus. Each of these
performance figures is based upon historical results and is not intended to
indicate future performance, and, except for "distribution rate," is
standardized in accordance with Securities and Exchange Commission ("SEC")
regulations.
"Yield" for the Funds is computed by dividing the net investment income per
share (as defined in applicable SEC regulations) earned during a 30-day period
(which period will be stated in the advertisement) by the maximum offering price
per share on the last day of the period. Yield is an annualized figure, in that
it assumes that the same level of net investment income is generated over a one
year period. The yield formula annualizes net investment income by providing for
semi-annual compounding.
"Total return" is based on the overall dollar or percentage change in value of a
hypothetical investment in a Fund assuming reinvestment of dividend
distributions and deduction of all charges and expenses, including the maximum
sales charge imposed on Class A Shares or the contingent deferred sales charge
imposed on Class B Shares at the end of the specified period covered by the
total return figure. "Cumulative total return" reflects a Fund's performance
over a stated period of time. "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. As a
supplement to total return computations, a Fund may also publish "total
investment return" computations which do not assume deduction of the maximum
sales charge imposed on Class A Shares or the contingent deferred sales charge
imposed on Class B Shares.
"Distribution rate" is determined by dividing the income dividends per share for
a stated period by the maximum offering price per share on the last day of the
period. All distribution rates published for the Funds are measures of the level
of income dividends distributed during a specified period. Thus, these rates
differ from yield (which measures income actually earned by a Fund) and total
return (which measures actual income, plus realized and unrealized gains or
losses of a Fund's investments). Consequently, distribution rates alone should
not be considered complete measures of performance.
The performance of the Class C Shares of a Fund will normally be higher than for
the Class A and Class B Shares because Class C Shares are not subject to the
sales charges and distribution and/or shareholder servicing expenses applicable
to Class A and Class B Shares.
In reports or other communications to shareholders and in advertising material,
the performance of each Fund may be compared to recognized unmanaged indices or
averages of the performance of similar securities and to composites of such
indices and averages. Also, the performance of each Fund may be compared to that
of other funds of similar size and objectives as listed in the rankings prepared
by Lipper Analytical Services, Inc. or similar independent mutual fund rating
services, and each Fund may include in such reports, communications and
advertising material evaluations published by nationally recognized independent
ranking services and publications. For further information regarding the Funds'
performance, see "Fund Performance" in the Statement of Additional Information.
SPECIAL INVESTMENT METHODS
This section provides additional information concerning the securities in which
the Funds may invest and related topics. Further information concerning these
matters is contained in the Statement of Additional Information.
REPURCHASE AGREEMENTS
Each Fund is permitted to enter into repurchase agreements. A repurchase
agreement involves the purchase by a Fund of securities with the agreement that
after a stated period of time, the original seller will buy back the same
securities ("collateral") at a predetermined price or yield. Repurchase
agreements involve certain risks not associated with direct investments in
securities. If the original seller defaults on its obligation to repurchase as a
result of its bankruptcy or otherwise, the purchasing Fund will seek to sell the
collateral, which could involve costs or delays. Although collateral (which may
consist of any fixed income security which is an eligible investment for the
Fund entering into the repurchase agreement) will at all times be maintained in
an amount equal to the repurchase price under the agreement (including accrued
interest), a Fund would suffer a loss if the proceeds from the sale of the
collateral were less than the agreed-upon repurchase price. The Adviser will
monitor the creditworthiness of the firms with which the Funds enter into
repurchase agreements.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS
Small Cap Value Fund may purchase securities on a when-issued or
delayed-delivery basis. When such a transaction is negotiated, the purchase
price is fixed at the time the purchase commitment is entered, but delivery of
and payment for the securities take place at a later date. The Fund will not
accrue income with respect to securities purchased on a when-issued or
delayed-delivery basis prior to their stated delivery date. Pending delivery of
the securities, the Fund will maintain in a segregated account cash or liquid
high-grade securities in an amount sufficient to meet its purchase commitments.
The purchase of securities on a when-issued or delayed-delivery basis exposes
the Fund to risk because the securities may decrease in value prior to delivery.
In addition, the Fund's purchase of securities on a when-issued or
delayed-delivery basis while remaining substantially fully invested could
increase the amount of the Fund's total assets that are subject to market risk,
resulting in increased sensitivity of net asset value to changes in market
prices. However, the Fund will engage in when-issued and delayed-delivery
transactions only for the purpose of acquiring portfolio securities consistent
with their investment objectives, and not for the purpose of investment
leverage. A seller's failure to deliver securities to the Fund could prevent the
Fund from realizing a price or yield considered to be advantageous.
LENDING OF PORTFOLIO SECURITIES
In order to generate additional income, each of the Funds may lend portfolio
securities representing up to one-third of the value of its total assets to
broker-dealers, banks or other institutional borrowers of securities. If the
Funds engage in securities lending, distributions paid to shareholders from the
resulting income will not be excludable from shareholders' gross income for
income tax purposes. As with other extensions of credit, there may be risks of
delay in recovery of the securities or even loss of rights in the collateral
should the borrower of the securities fail financially. However, the Funds will
only enter into loan arrangements with broker-dealers, banks, or other
institutions which the Adviser has determined are creditworthy under guidelines
established by the Board of Directors. In these loan arrangements, the Funds
will receive collateral in the form of cash, United States Government securities
or other high-grade debt obligations equal to at least 100% of the value of the
securities loaned. Collateral is marked to market daily. The Funds will pay a
portion of the income earned on the lending transaction to the placing broker
and may pay administrative and custodial fees (including fees to an affiliate of
the Adviser) in connection with these loans.
OPTIONS TRANSACTIONS
PURCHASES OF PUT AND CALL OPTIONS. Small Cap Value Fund may purchase put and
call options on equity securities, and both Funds may purchase put and call
options on stock indices. These transactions will be undertaken only for the
purpose of reducing risk to the Fund; that is, for "hedging" purposes.
A put option on a security gives the purchaser of the option the right (but not
the obligation) to sell, and the writer of the option the obligation to buy, the
underlying security at a stated price (the "exercise price") at any time before
the option expires. A call option on a security gives the purchaser the right
(but not the obligation) to buy, and the writer the obligation to sell, the
underlying security at the exercise price at any time before the option expires.
The purchase price for a put or call option is the "premium" paid by the
purchaser for the right to sell or buy.
Options on indices are similar to options on securities except that, rather than
the right to take or make delivery of a specific security at a stated price, an
option on an index gives the holder the right to receive, upon exercise of the
option, a defined amount of cash if the closing value of the index upon which
the option is based is greater than, in the case of a call, or less than, in the
case of a put, the exercise price of the option.
Neither Fund will invest more than 5% of the value of its total assets in
purchased options, provided that options which are "in the money" at the time of
purchase may be excluded from this 5% limitation. A call option is "in the
money" if the exercise price is lower than the current market price of the
underlying security or index, and a put option is "in the money" if the exercise
price is higher than the current market price. A Fund's loss exposure in
purchasing an option is limited to the sum of the premium paid and the
commission or other transaction expenses associated with acquiring the option.
The use of purchased put and call options involves certain risks. These include
the risk of an imperfect correlation between market prices of securities held by
the Fund and the prices of options, and the risk of limited liquidity in the
event that the Fund seeks to close out an options position before expiration by
entering into an offsetting transaction.
WRITING OF CALL OPTIONS. Small Cap Value Fund may write (sell) covered call
options on equity securities which it owns or has the right to acquire to the
extent specified under "Investment Objectives and Policies." These transactions
would be undertaken primarily to produce additional income.
When the Fund sells a covered call option, it is paid a premium by the
purchaser. If the market price of the security covered by the option does not
increase above the exercise price before the option expires, the option
generally will expire without being exercised, and the Fund will retain both the
premium paid for the option and the security. If the market price of the
security covered by the option does increase above the exercise price before the
option expires, however, the option is likely to be exercised by the purchaser.
In that case the Fund will be required to sell the security at the exercise
price, and it will not realize the benefits of increases in the market price of
the security above the exercise price of the option.
OPTIONS ON STOCK INDICES. Each Fund also may write call options on stock indices
the movements of which generally correlate with those of the Fund's portfolio
holdings. These transactions, which would be undertaken principally to produce
additional income, entail the risk of an imperfect correlation between movements
of the index covered by the option and movements in the price of the Fund's
portfolio securities.
CASH ITEMS
The "cash items" in which each Fund may invest, as described under "Investment
Objectives and Policies," include short-term obligations such as commercial
paper and variable amount master demand notes; United States dollar-denominated
time and savings deposits (including certificates of deposit); bankers
acceptances; obligations of the United States Government or its agencies or
instrumentalities; repurchase agreements collateralized by eligible investments
of the Fund; securities of other mutual funds which invest primarily in debt
obligations with remaining maturities of 13 months or less (which investments
are subject to the advisory fee); and other similar high-quality short-term
United States dollar-denominated obligations. The other mutual funds in which
each Fund may so invest include money market funds advised by the Adviser,
subject to certain restrictions contained in an exemptive order issued by the
Securities and Exchange Commission with respect thereto.
FUTURES AND OPTIONS ON FUTURES
International Index Fund may engage in futures transactions and purchase options
on futures to the extent specified under "Investment Objectives and Policies."
These transactions may include the purchase of stock index futures and options
on stock index futures.
A futures contract on an index obligates the seller to deliver, and entitles the
purchaser to receive, an amount of cash equal to a specific dollar amount times
the difference between the value of the index at the expiration date of the
contract and the index value specified in the contract. The acquisition of put
and call options on futures contracts will, respectively, give International
Index Fund the right (but not the obligation), for a specified exercise price,
to sell or to purchase the underlying futures contract at any time during the
option period.
The Fund may use futures contracts and options on futures in an effort to hedge
against market risks. In addition, International Index Fund may use stock index
futures and options on futures to maintain sufficient liquidity to meet
redemption requests, to increase the level of Fund assets devoted to replicating
the composition of the EAFE Index and to reduce transaction costs.
Aggregate initial margin deposits for futures contracts, and premiums paid for
related options, may not exceed 5% of the Fund's total assets. Futures
transactions will be limited to the extent necessary to maintain the Fund's
qualification as a regulated investment company under the Internal Revenue Code
of 1986, as amended.
Where International Index Fund is permitted to purchase options on futures, its
potential loss is limited to the amount of the premiums paid for the options. As
stated above, this amount may not exceed 5% of the Fund's total assets. Where
International Index Fund is permitted to enter into futures contracts obligating
it to purchase an index in the future at a specified price, the Fund could lose
100% of its net assets in connection therewith if it engaged extensively in such
transactions and if the value of the subject index at the delivery or settlement
date fell to zero for all contracts into which the Fund was permitted to enter.
Futures transactions involve brokerage costs and require International Index
Fund to segregate assets to cover contracts that would require it to purchase an
index in the future at a specified date. The Fund may lose the expected benefit
of futures transactions if the index value or exchange rates moves in an
unanticipated manner. Such unanticipated changes may also result in poorer
overall performance than if the Fund had not entered into any futures
transactions. There is no assurance of liquidity in the secondary market for
purposes of closing out futures positions.
FIXED INCOME SECURITIES
The fixed income securities in which Small Cap Value Fund may invest include
securities issued or guaranteed by the United States Government or its agencies
or instrumentalities, nonconvertible preferred stocks, nonconvertible corporate
debt securities, and short-term obligations of the kinds described above under
"-- Cash Items." Investments in nonconvertible preferred stocks and
nonconvertible corporate debt obligations will be limited to securities which
are rated at the time of purchase not less than BBB by Standard & Poor's or Baa
by Moody's (or equivalent short-term ratings), or which have been assigned an
equivalent rating by another nationally recognized statistical rating
organization, or which are of comparable quality in the judgment of the Adviser.
Obligations rated BBB, Baa or their equivalent, although investment grade, have
speculative characteristics and carry a somewhat higher risk of default than
obligations rated in the higher investment grade categories. In addition, Small
Cap Value Fund may invest up to 5% of its net assets in less than investment
grade convertible debt obligations.
The fixed income securities specified above are subject to (i) interest rate
risk (the risk that increases in market interest rates will cause declines in
the value of debt securities held by the Fund), (ii) credit risk (the risk that
issuers of debt securities held by the Fund default in making required
payments), and (iii) call or prepayment risk (the risk that a borrower may
exercise the right to prepay a debt obligation before its stated maturity,
requiring the Fund to reinvest the prepayment at a lower interest rate).
FOREIGN SECURITIES
GENERAL. Under normal market conditions, International Index Fund invests at
least 65% of its total assets in equity securities which trade in markets other
than the United States. In addition, Small Cap Value Fund may invest up to 25%
of its total assets in securities of foreign issuers which are either listed on
a United States securities exchange or represented by American Depositary
Receipts.
Investment in foreign securities is subject to special investment risks that
differ in some respects from those related to investments in securities of
United States domestic issuers. These risks include political, social or
economic instability in the country of the issuer, the difficulty of predicting
international trade patterns, the possibility of the imposition of exchange
controls, expropriation, limits on removal of currency or other assets,
nationalization of assets, foreign withholding and income taxation, and foreign
trading practices (including higher trading commissions, custodial charges and
delayed settlements). Foreign securities also may be subject to greater
fluctuations in price than securities issued by United States corporations. The
principal markets on which these securities trade may have less volume and
liquidity, and may be more volatile, than securities markets in the United
States.
In addition, there may be less publicly available information about a foreign
company than about a United States domiciled company. Foreign companies
generally are not subject to uniform accounting, auditing and financial
reporting standards comparable to those applicable to United States domestic
companies. There is also generally less government regulation of securities
exchanges, brokers and listed companies abroad than in the United States.
Confiscatory taxation or diplomatic developments could also affect investment in
those countries. In addition, foreign branches of United States banks, foreign
banks and foreign issuers may be subject to less stringent reserve requirements
and to different accounting, auditing, reporting, and recordkeeping standards
than those applicable to domestic branches of United States banks and United
States domestic issuers.
AMERICAN DEPOSITARY RECEIPTS AND EUROPEAN DEPOSITARY RECEIPTS. For many foreign
securities, United States dollar-denominated American Depositary Receipts, which
are traded in the United States on exchanges or over-the-counter, are issued by
domestic banks. American Depositary Receipts represent the right to receive
securities of foreign issuers deposited in a domestic bank or a correspondent
bank. American Depositary Receipts do not eliminate all the risk inherent in
investing in the securities of foreign issuers. However, by investing in
American Depositary Receipts rather than directly in foreign issuers' stock, the
Fund can avoid currency risks during the settlement period for either purchases
or sales. In general, there is a large, liquid market in the United States for
many American Depositary Receipts. The information available for American
Depositary Receipts is subject to the accounting, auditing and financial
reporting standards of the domestic market or exchange on which they are traded,
which standards are more uniform and more exacting than those to which many
foreign issuers may be subject. International Index Fund also may invest in
European Depositary Receipts, which are receipts evidencing an arrangement with
a European bank similar to that for American Depositary Receipts and which are
designed for use in the European securities markets. European Depositary
Receipts are not necessarily denominated in the currency of the underlying
security.
Certain American Depositary Receipts and European Depositary Receipts, typically
those denominated as unsponsored, require the holders thereof to bear most of
the costs of the facilities while issuers of sponsored facilities normally pay
more of the costs thereof. The depository of an unsponsored facility frequently
is under no obligation to distribute shareholder communications received from
the issuer of the deposited securities or to pass through the voting rights to
facility holders in respect to the deposited securities, whereas the depository
of a sponsored facility typically distributes shareholder communications and
passes through voting rights.
PORTFOLIO TRANSACTIONS
Portfolio transactions in the over-the-counter market will be effected with
market makers or issuers, unless better overall price and execution are
available through a brokerage transaction. It is anticipated that most portfolio
transactions involving debt securities will be executed on a principal basis.
Also, with respect to the placement of portfolio transactions with securities
firms, subject to the overall policy to seek to place portfolio transactions as
efficiently as possible and at the best price, research services and placement
of orders by securities firms for a Fund's shares may be taken into account as a
factor in placing portfolio transactions for the Fund.
PORTFOLIO TURNOVER
Although the Funds do not intend generally to trade for short-term profits, they
may dispose of a security without regard to the time it has been held when such
action appears advisable to the Adviser. The portfolio turnover rate for a Fund
may vary from year to year and may be affected by cash requirements for
redemptions of shares. High portfolio turnover rates generally would result in
higher transaction costs and could result in additional tax consequences to a
Fund's shareholders.
INVESTMENT RESTRICTIONS
The fundamental and nonfundamental investment restrictions of the Funds are set
forth in full in the Statement of Additional Information. The fundamental
restrictions include the following:
* None of the Funds will borrow money, except from banks for temporary
or emergency purposes. The amount of such borrowing may not exceed
10% of the borrowing Fund's total assets. None of the Funds will
borrow money for leverage purposes. For the purpose of this
investment restriction, the use of options and futures transactions
and the purchase of securities on a when-issued or delayed-delivery
basis shall not be deemed the borrowing of money. If a Fund engages
in borrowing, its share price may be subject to greater fluctuation,
and the interest expense associated with the borrowing may reduce
the Fund's net income.
* None of the Funds will 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.
* None of the Funds will make short sales of securities.
* None of the Funds will purchase any securities on margin except to
obtain such short-term credits as may be necessary for the clearance
of transactions.
A fundamental policy or restriction, including those stated above, cannot be
changed without an affirmative vote of the holders of a "majority" of the
outstanding shares of the applicable Fund, as defined in the 1940 Act.
As a nonfundamental policy, none of the Funds will invest more than 15% of its
net assets in all forms of illiquid investments, as determined pursuant to
applicable Securities and Exchange Commission rules and interpretations. Section
4(2) commercial paper and Rule 144A securities may be determined to be "liquid"
under guidelines adopted by the Board of Directors. 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.
INFORMATION CONCERNING COMPENSATION PAID TO FIRST TRUST NATIONAL
ASSOCIATION AND ITS AFFILIATES
First Trust National Association ("First Trust") may act as fiduciary with
respect to plans subject to the Employee Retirement Income Security Act of 1974
("ERISA") which invest in the Funds. This section sets forth information
concerning compensation that First Trust and its affiliates may receive from the
Funds.
First Trust, as custodian for the assets of the Funds, receives the custodian
fees specified herein under the caption "Management -- Custodian."
First Bank National Association, which is under common control with First Trust,
acts as investment adviser to the Funds and receives the advisory fees specified
herein under the caption "Management -- Investment Adviser."
First Trust and its affiliates may receive shareholder servicing fees in the
amounts specified herein under the caption "Distributor." First Trust also may
act as securities lending agent in connection with the Funds' securities lending
transactions and receive as compensation for such services, fees equal to 40% of
the Funds' income from such securities lending transactions.
FIRST AMERICAN INVESTMENT FUNDS, INC.
Oaks, Pennsylvania 19456
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 INVESTMENTS DISTRIBUTION CO.
Oaks, Pennsylvania 19456
ADMINISTRATOR
SEI INVESTMENTS MANAGEMENT
CORPORATION
Oaks, Pennsylvania 19456
TRANSFER AGENT
DST SYSTEMS, INC.
1004 Baltimore
Kansas City, Missouri 64105
INDEPENDENT AUDITORS
KPMG PEAT MARWICK LLP
90 South Seventh Street
Minneapolis, Minnesota 55402
COUNSEL
DORSEY & WHITNEY LLP
220 South Sixth Street
Minneapolis, Minnesota 55402
FAIF-1502 (7/97)I
PART B
FIRST AMERICAN INVESTMENT FUNDS, INC.
STATEMENT OF ADDITIONAL INFORMATION
DATED __________, 1997
SMALL CAP VALUE FUND
INTERNATIONAL INDEX FUND
This Statement of Additional Information relates to the Class A Shares,
Class B Shares and Class C Shares of Small Cap Value Fund and International
Index Fund, each of which is a series of First American Investment Funds, Inc.
("FAIF"). This Statement of Additional Information is not a prospectus, but
should be read in conjunction with the Funds' current Prospectuses dated
________, 1997. This Statement of Additional Information is incorporated into
the Funds' Prospectuses by reference. To obtain copies of a Prospectus, write or
call the Funds' distributor SEI Investments Distribution Co., Oaks, Pennsylvania
19456, telephone: (800) 637-2548. Please retain this Statement of Additional
Information for future reference.
TABLE OF CONTENTS
PAGE
GENERAL INFORMATION............................ 2
ADDITIONAL INFORMATION CONCERNING
FUND INVESTMENTS............................... 3
Short-Term Investments.................... 3
Repurchase Agreements..................... 3
When-Issued and Delayed-Delivery
Transactions.......................... 4
Lending of Portfolio Securities........... 4
Options Transactions...................... 4
Foreign Securities........................ 5
Debt Obligations Rated Less Than
Investment Grade...................... 5
CFTC Information.......................... 6
INVESTMENT RESTRICTIONS........................ 6
DIRECTORS AND EXECUTIVE OFFICERS............... 9
Directors................................. 9
Executive Officers........................ 9
Compensation.............................. 11
INVESTMENT ADVISORY AND OTHER
SERVICES....................................... 12
Investment Advisory Agreement............. 12
Administration Agreement.................. 12
Distributor and Distribution Plans........ 12
Custodian; Transfer Agent; Counsel;
Accountants........................... 14
PORTFOLIO TRANSACTIONS AND ALLOCATION
OF BROKERAGE................................... 14
CAPITAL STOCK.................................. 16
NET ASSET VALUE AND PUBLIC OFFERING
PRICE.......................................... 16
FUND PERFORMANCE............................... 17
SEC Standardized Performance Figures...... 17
Non-Standard Distribution Rates........... 18
Certain Performance Comparisons........... 18
TAXATION....................................... 18
RATINGS........................................ 22
Ratings of Corporate Debt Obligations
and Municipal Bonds................... 22
Ratings of Preferred Stock................ 24
Ratings of Municipal Notes................ 24
Ratings of Commercial Paper............... 25
SUBJECT TO COMPLETION -- July 21, 1997
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may any offers to buy be accepted prior to the time the Registration
Statement becomes effective. This Statement of Additional Information does
not constitute a prospectus.
GENERAL INFORMATION
First American Investment Funds, Inc. ("FAIF") was incorporated in the
State of Maryland on August 20, 1987 under the name "SECURAL Mutual Funds, Inc."
The Board of Directors and shareholders, at meetings held January 10, 1991, and
April 2, 1991, respectively, approved amendments to the Articles of
Incorporation providing that the name "SECURAL Mutual Funds, Inc." be changed to
"First American Investment Funds, Inc."
FAIF is organized as a series fund and currently issues its shares in
26 series. Each series of shares represents a separate investment portfolio with
its own investment objective and policies (in essence, a separate mutual fund).
The series of FAIF to which this Statement of Additional Information relates are
named on the cover hereof. These series are referred to in this Statement of
Additional Information as the "Funds."
Shareholders may purchase shares of Small Cap Value Fund and
International Index Fund through Class A, Class B, and Class C Shares. The
different classes provide for variations in distribution costs, shareholder
servicing fees, voting rights and dividends. To the extent permitted by the
Investment Company Act of 1940, the Funds may also provide for variations in
other costs among the classes although they have no present intention to do so.
In addition, a sales load is imposed on the sale of Class A and Class B Shares
of the Funds. Except for differences among the classes pertaining to
distribution costs and shareholder servicing fees, each share of each Fund
represents an equal proportionate interest in that Fund. Class A and Class B
Shares sometimes are referred to together as the "Retail Class Shares," and
Class C Shares sometimes are referred to as the "Institutional Class Shares."
FAIF has prepared and will provide a Prospectus relating to the Retail
Class Shares (the "Retail Class Prospectus") and a Prospectus relating to the
Institutional Class Shares (the "Institutional Class Prospectus") of the Funds.
These Prospectuses can be obtained by calling or writing SEI Investments
Distribution Co. at the address and telephone number set forth on the cover of
this Statement of Additional Information. This Statement of Additional
Information relates both to the Retail Class Prospectus and to the Institutional
Class Prospectus for the Funds. It should be read in conjunction with the
applicable Prospectus. Separate prospectuses and statements of additional
information relate to the other funds offered by FAIF.
The Articles of Incorporation and Bylaws of FAIF provide that meetings
of shareholders be held as determined by the Board of Directors and as required
by the 1940 Act. Maryland corporation law requires a meeting of shareholders to
be held upon the written request of shareholders holding 10% or more of the
voting shares of FAIF, with the cost of preparing and mailing the notice of such
meeting payable by the requesting shareholders. 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.
ADDITIONAL INFORMATION CONCERNING FUND INVESTMENTS
The investment objectives, policies and restrictions of the Funds are
set forth in their respective Prospectuses. Additional information concerning
the investments which may be made by the Funds is set forth under this caption.
Additional information concerning the Funds' investment restrictions is set
forth below under the caption "Investment Restrictions."
SHORT-TERM INVESTMENTS
The Funds can invest in a variety of short-term instruments which are
specified, with respect to the respective Funds, in their Prospectuses.
Short-term investments and repurchase agreements may be entered into on a joint
basis by the Funds and other funds advised by the Adviser to the extent
permitted by Securities and Exchange Commission exemptive order relief obtained
by them. A brief description of certain kinds of short-term instruments follows:
COMMERCIAL PAPER. Commercial paper consists of unsecured promissory
notes issued by corporations. Issues of commercial paper normally have
maturities of less than nine months and fixed rates of return. Subject to the
limitations described in the Prospectuses, the Funds may purchase commercial
paper consisting of issues rated at the time of purchase within the two highest
rating categories by Standard & Poor's Corporation ("Standard & Poor's") or
Moody's Investors Service, Inc. ("Moody's"), or which have been assigned an
equivalent rating by another nationally recognized statistical rating
organization. The Funds also may invest in commercial paper that is not rated
but that is determined by the Adviser to be of comparable quality to instruments
that are so rated. For a description of the rating categories of Standard &
Poor's and Moody's, see "Ratings" herein.
BANKERS ACCEPTANCES. Bankers acceptances are credit instruments
evidencing the obligation of a bank to pay a draft drawn on it by a customer.
These instruments reflect the obligation both of the bank and of the drawer to
pay the full amount of the instrument upon maturity.
VARIABLE AMOUNT MASTER DEMAND NOTES. Variable amount master demand
notes are unsecured demand notes that permit the indebtedness thereunder to vary
and provide for periodic adjustments in the interest rate according to the terms
of the instrument. Because master demand notes are direct lending arrangements
between a Fund and the issuer, they are not normally traded. Although there is
no secondary market in the notes, a Fund may demand payment of principal and
accrued interest at any time. While the notes are not typically rated by credit
rating agencies, issuers of variable amount master demand notes (which are
normally manufacturing, retail, financial, and other business concerns) must
satisfy the same criteria as set forth above for commercial paper. The Adviser
will consider the earning power, cash flow, and other liquidity ratios of the
issuers of such notes and will continuously monitor their financial status and
ability to meet payment on demand.
REPURCHASE AGREEMENTS
The Funds may invest in repurchase agreements to the extent specified
in their Prospectuses. The Custodian will hold the securities underlying any
repurchase agreement, or the securities will be part of the Federal
Reserve/Treasury Book Entry System. The market value of the collateral
underlying the repurchase agreement will be determined on each business day. If
at any time the market value of the collateral falls below the repurchase price
under the repurchase agreement (including any accrued interest), the appropriate
Fund will promptly receive additional collateral (so the total collateral is an
amount at least equal to the repurchase price plus accrued interest).
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS
When Small Cap Value Fund agrees to purchase securities on a
when-issued or delayed-delivery basis, the Custodian will set aside cash or
liquid securities equal to the amount of the commitment in a separate account.
Normally, the Custodian will set aside securities to satisfy the purchase
commitment, and in that case, Small Cap Value Fund may be required subsequently
to place additional assets in the separate account in order to assure that the
value of the account remains equal to the amount of the Fund's commitments. It
may be expected that Small Cap Value Fund's net assets will fluctuate to a
greater degree when it sets aside securities to cover such purchase commitments
than when it sets aside cash. In addition, because Small Cap Value Fund will set
aside cash or liquid securities to satisfy its purchase commitments in the
manner described above, its liquidity and the ability of the Adviser to manage
it might be affected in the event its commitments to purchase when-issued or
delayed-delivery securities ever exceeded 25% of the value of its assets. Under
normal market conditions, however, Small Cap Value Fund's commitments to
purchase when-issued or delayed-delivery securities will not exceed 25% of the
value of its assets.
LENDING OF PORTFOLIO SECURITIES
When a Fund lends portfolio securities, it must receive 100% collateral
as described in the Prospectuses. This collateral must be valued daily by the
Adviser and, if the market value of the loaned securities increases, the
borrower must furnish additional collateral to the lending Fund. During the time
portfolio securities are on loan, the borrower pays the lending Fund any
dividends or interest paid on the securities. Loans are subject to termination
by the lending Fund or the borrower at any time. While a Fund does not have the
right to vote securities on loan, it would terminate the loan and regain the
right to vote if that were considered important with respect to the investment.
First Trust National Association, the Funds' custodian and an affiliate
of their Adviser, may act as securities lending agent for the Funds and receive
separate compensation for such services, subject to compliance with conditions
contained in a Securities and Exchange Commission exemptive order permitting
First Trust to provide such services and receive such compensation.
OPTIONS TRANSACTIONS
OPTIONS ON SECURITIES. To the extent specified in the Prospectuses,
Small Cap Value Fund may purchase put and call options on securities and may
write covered call options on securities which it owns or has the right to
acquire. The Fund may purchase put options to hedge against a decline in the
value of its portfolio. By using put options in this way, the Fund would reduce
any profit it might otherwise have realized in the underlying security by the
amount of the premium paid for the put option and by transaction costs. In
similar fashion, the Fund may purchase call options to hedge against an increase
in the price of securities that the Fund anticipates purchasing in the future.
The premium paid for the call option plus any transaction costs will reduce the
benefit, if any, realized by the Fund upon exercise of the option, and, unless
the price of the underlying security rises sufficiently, the option may expire
unexercised.
The writer (seller) of a call option has no control over when the
underlying securities must be sold; the writer may be assigned an exercise
notice at any time prior to the termination of the option. If a call option is
exercised, the writer experiences a profit or loss from the sale of the
underlying security. The writer of a call option that wishes to terminate its
obligation may effect a "closing purchase transaction." This is accomplished by
buying an option on the same security as the option previously written. If the
Fund was unable to effect a closing purchase transaction in a secondary market,
it would not be able to sell the underlying security until the option expires or
it delivers the underlying security upon exercise.
OPTIONS ON STOCK INDICES. Options on stock indices are similar to
options on individual stocks except that, rather than the right to take or make
delivery of stock at a specified price, an option on a stock index gives the
holder the right to receive, upon exercise of the option, an amount of cash if
the closing value of the stock index upon which the option is based is greater
than, in the case of a call, or lesser than, in the case of a put, the exercise
price of the option. This amount of cash is equal to the difference between the
closing price of the index and the exercise price of the option expressed in
dollars times a specified multiple (the "multiplier"). The writer of the option
is obligated, in return for the premium received, to make delivery of this
amount. Unlike stock options, all settlements for stock index options are in
cash, and gain or loss depends on price movements in the stock market generally
(or in a particular industry or segment of the market) rather than price
movements in individual stocks. The multiplier for an index option performs a
function similar to the unit of trading for a stock option. It determines the
total dollar value per contract of each point in the difference between the
underlying stock index. A multiplier of 100 means that a one-point difference
will yield $100. Options on different stock indices may have different
multipliers.
FOREIGN SECURITIES
As described in the applicable Prospectuses, under normal market
conditions International Index Fund invests principally in foreign securities,
and Small Cap Value Fund may invest lesser proportions of their assets in
securities of foreign issuers which are either listed on a United States
securities exchange or represented by American Depositary Receipts.
Fixed commissions on foreign securities exchanges are generally higher
than negotiated commissions on United States exchanges. Foreign markets also
have different clearance and settlement procedures, and in some markets there
have been times when settlements have been unable to keep pace with the volume
of securities transactions, making it difficult to conduct such transactions.
Delays in settlement could result in temporary periods when a portion of the
assets of International Index Fund is uninvested. In addition, settlement
problems could cause International Index Fund to miss attractive investment
opportunities or to incur losses due to an inability to sell or deliver
securities in a timely fashion. In the event of a default by an issuer of
foreign securities, it may be more difficult for a Fund to obtain or to enforce
a judgment against the issuer.
DEBT OBLIGATIONS RATED LESS THAN INVESTMENT GRADE
As described in the Prospectuses, the "equity securities" in which
Small Cap Value Fund may invest include corporate debt obligations which are
convertible into common stock. These convertible debt obligations may include
obligations rated as low as CCC by Standard & Poor's or Caa by Moody's or which
have been assigned an equivalent rating by another nationally recognized
statistical rating organization. Debt obligations rated BB, B or CCC by Standard
& Poor's or Ba, B or Caa by Moody's are considered to be less than "investment
grade" and are sometimes referred to as "junk bonds." The limitations on
investments by this Fund in less than investment grade convertible debt
obligations are set forth in the applicable Prospectuses.
Purchases of less than investment grade corporate debt obligations
generally involve greater risks than purchases of higher rated obligations. Less
than investment grade debt obligations are especially subject to adverse changes
in general economic conditions and to changes in the financial condition of
their issuers. During periods of economic downturn or rising interest rates,
issuers of such obligations may experience financial stress that could adversely
affect their ability to make payments of principal and interest and increase the
possibility of default.
Yields on less than investment grade debt obligations will fluctuate
over time. The prices of such obligations have been found to be less sensitive
to interest rate changes than higher rated obligations, but more sensitive to
adverse economic changes or individual corporate developments. Also, during an
economic downturn or period of rising interest rates, highly leveraged issuers
may experience financial stress which could adversely affect their ability to
service principal and interest payment obligations, to meet projected business
goals, and to obtain additional financing. In addition, periods of economic
uncertainty and changes can be expected to result in increased volatility of
market prices of less than investment grade debt obligations.
In addition, the secondary trading market for less than investment
grade debt obligations may be less developed than the market for investment
grade obligations. This may make it more difficult for Small Cap Value Fund to
value and dispose of such obligations. Adverse publicity and investor
perceptions, whether or not based on fundamental analysis, may decrease the
values and liquidity of less than investment grade obligations, especially in a
thin secondary trading market.
Certain risks also are associated with the use of credit ratings as a
method for evaluating less than investment grade debt obligations. For example,
credit ratings evaluate the safety of principal and interest payments, not the
market value risk of such obligations. In addition, credit rating agencies may
not timely change credit ratings to reflect current events. Thus, the success of
Small Cap Value Fund's use of less than investment grade convertible debt
obligations may be more dependent on the Adviser's own credit analysis than is
the case with investment grade obligations.
CFTC INFORMATION
The Commodity Futures Trading Commission (the "CFTC"), a federal
agency, regulates trading activity pursuant to the Commodity Exchange Act, as
amended. The CFTC requires the registration of "commodity pool operators," which
are defined as any person engaged in a business which is of the nature of an
investment trust, syndicate or a similar form of enterprise, and who, in
connection therewith, solicits, accepts or receives from others funds,
securities or property for the purpose of trading in any commodity for future
delivery on or subject to the rules of any contract market. The CFTC has adopted
Rule 4.5, which provides an exclusion from the definition of commodity pool
operator for any registered investment company which (i) will use commodity
futures or commodity options contracts solely for bona fide hedging purposes
(provided, however, that in the alternative, with respect to each long position
in a commodity future or commodity option contract, an investment company may
meet certain other tests set forth in Rule 4.5); (ii) will not enter into
commodity futures and commodity options contracts for which the aggregate
initial margin and premiums exceed 5% of its assets; (iii) will not be marketed
to the public as a commodity pool or as a vehicle for investing in commodity
interests; (iv) will disclose to its investors the purposes of and limitations
on its commodity interest trading; and (v) will submit to special calls of the
CFTC for information. Any investment company desiring to claim this exclusion
must file a notice of eligibility with both the CFTC and the National Futures
Association. FAIF has made such notice filings with respect to those Funds which
may invest in commodity futures or commodity options contracts.
INVESTMENT RESTRICTIONS
In addition to the investment objectives and policies set forth in the
Prospectuses and under the caption "Additional Information Concerning Fund
Investments" above, each of the Funds is subject to the investment restrictions
set forth below. The investment restrictions set forth in paragraphs 1 through
10 below are fundamental and cannot be changed with respect to a Fund without
approval by the holders of a majority of the outstanding shares of that Fund as
defined in the Investment Company Act of 1940, as amended (the "1940 Act"),
i.e., by the lesser of the vote of (a) 67% of the shares of the Fund present 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.
Neither of the Funds will:
1. Invest in any securities if, as a result, 25% or more of the
value of its total assets would be invested in the securities
of issuers conducting their principal business activities in
any one industry. This restriction does not apply to general
obligation bonds or notes. This restriction does not apply to
securities of the United States Government or its agencies and
instrumentalities or repurchase agreements relating thereto.
2. Issue any senior securities (as defined in the 1940 Act),
other than as set forth in restriction number 3 below and
except to the extent that using options or purchasing
securities on a when-issued basis may be deemed to constitute
issuing a senior security.
3. Borrow money, except from banks for temporary or emergency
purposes. The amount of such borrowing may not exceed 10% of
the borrowing Fund's total assets. Neither of the Funds will
borrow money for leverage purposes. For the purpose of this
investment restriction, the use of options and futures
transactions and the purchase of securities on a when-issued
or delayed-delivery basis shall not be deemed the borrowing of
money. (As a non-fundamental policy, neither Fund will make
additional investments while its borrowings exceed 5% of total
assets.)
4. 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.
5. Make short sales of securities.
6. Purchase any securities on margin except to obtain such
short-term credits as may be necessary for the clearance of
transactions.
7. Purchase or sell physical commodities (including, by way of
example and not by way of limitation, grains, oilseeds,
livestock, meat, food, fiber, metals, petroleum,
petroleum-based products or natural gas) or futures or options
contracts with respect to physical commodities. This
restriction shall not restrict either Fund from purchasing or
selling any financial contracts or instruments which may be
deemed commodities (including, by way of example and not by
way of limitation, options, futures and options on futures
with respect, in each case, to interest rates, currencies,
stock indices, bond indices or interest rate indices) or any
security which is collateralized or otherwise backed by
physical commodities.
8. Purchase or sell real estate or real estate mortgage loans,
except that the Funds may invest in securities secured by real
estate or interests therein or issued by companies that invest
in or hold real estate or interests therein.
9. Act as an underwriter of securities of other issuers, except
to the extent a Fund may be deemed to be an underwriter, under
Federal securities laws, in connection with the disposition of
portfolio securities.
10. Lend any of their assets, except portfolio securities
representing up to one-third of the value of their total
assets.
The following restrictions are non-fundamental and may be changed by
FAIF's Board of Directors without shareholder vote. Neither of the Funds will:
11. Invest more than 15% of its net assets in all forms of
illiquid investments, as determined pursuant to applicable
Securities and Exchange Commission rules and interpretations.
12. Invest in any securities, if as a result more than 5% of the
value of its total assets is invested in the securities of any
issuers which, with their predecessors, have a record of less
than three years continuous operation. (Securities of any of
such issuers will not be deemed to fall within this limitation
if they are guaranteed by an entity which has been in
continuous operation for more than three years.)
13. Invest for the purpose of exercising control or management.
14. Purchase or sell real estate limited partnership interests, or
oil, gas or other mineral leases, rights or royalty contracts,
except that the Funds may purchase or sell securities of
companies which invest in or hold the foregoing.
15. Purchase securities of any other registered investment company
(as defined in the 1940 Act), except, subject to 1940 Act
limitations, (a) each Fund may, as part of its investment in
cash items, invest in securities of other mutual funds which
invest primarily in debt obligations with remaining maturities
of 13 months or less; (b) International Index Fund may
purchase shares of open-end investment companies which invest
in permitted investments for such Fund; and (c) each Fund may
purchase securities as part of a merger, consolidation,
reorganization or acquisition of assets.
16. Invest in foreign securities, except that Small Cap Value Fund
may invest up to 25% of its total assets in securities of
foreign issuers which are either listed on a United States
stock exchange or represented by American Depositary Receipts
and International Index Fund may invest in foreign securities
without limitation.
17. Invest in warrants; provided, that a Fund may invest in
warrants in an amount not exceeding 5% of the Fund's net
assets. No more than 2% of this 5% may be warrants which are
not listed on the New York Stock Exchange.
DIRECTORS AND EXECUTIVE OFFICERS
The directors and executive officers of FAIF 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 FAIF are identified with an asterisk.
DIRECTORS
Robert J. Dayton, 5140 Norwest Center, Minneapolis, Minnesota 55402:
Director of FAIF since September 1994 and of First American Funds, Inc. ("FAF")
since December 1994 and of First American Strategy Funds, Inc. ("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, 537 Harrington Road, Wayzata, Minnesota 55391:
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, 16 Dellwood Avenue, Dellwood, Minnesota 55110:
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, 4715 Twin Lakes Avenue, Brooklyn Center, Minnesota
55429: 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, 8617 Edenbrook Crossing, # 443, Brooklyn Park,
Minnesota 55443: Director of FAF since 1984 and of FAIF since April 1991 and of
FASF since June 1996; Chairman of FAF's and FAIF's Boards since 1993 and of
FASF's Board since 1996; 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: 56.
Virginia L. Stringer, 712 Linwood Avenue, St. Paul, Minnesota 55105:
Director of FAIF since August 1987 and of FAF since April 1991 and of FASF since
June 1996; 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.
Gae B. Veit, P.O. Box 6, Loretto, Minnesota 55357: Director of FAIF and
FAF since December 1993 and of FASF since June 1996; owner and CEO of Shingobee
Builders, Inc., a general contractor. Age: 53.
EXECUTIVE OFFICERS
David Lee, SEI Investments Company, Oaks, Pennsylvania 19456: 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 Investments Distribution Co. (the "Distributor") since
1991; President, GW Sierra Trust Funds prior to 1991. Age: 44.
Carmen V. Romeo, SEI Investments Company, Oaks, Pennsylvania 19456:
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 Investments Company ("SEI"), SEI Investments
Management Corporation (the "Administrator") and the Distributor since 1981.
Age: 52.
Kevin P. Robins, SEI Investments Company, Oaks, Pennsylvania 19456:
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, SEI Investments Company, Oaks, Pennsylvania 19456:
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, SEI Investments Company, Oaks, Pennsylvania 19456:
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, SEI Investments Company, Oaks, Pennsylvania 19456: 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, SEI Investments Company, Oaks, Pennsylvania 19456:
Vice President and Assistant Secretary of FAIF, FAF and FASF since June 1996;
Vice President and Assistant Secretary of the Administrator and 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, SEI Investments Company, Oaks, Pennsylvania 19456:
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, 220 South Sixth Street, Minneapolis, Minnesota
55402: Secretary of FAIF since April 1991 and of FAF since 1981 and of FASF
since June 1996; Partner, Dorsey & Whitney LLP, a Minneapolis-based law firm and
general counsel of FAIF and FAF. Age: 52.
COMPENSATION
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 ($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
LLP, the law firm of which Michael J. Radmer, secretary of FAIF, FAF and FASF,
is a partner. The following table sets forth information concerning aggregate
compensation paid to each director of FAIF (i) by FAIF (column 2), and (ii) by
FAIF, FAF and FASF collectively (column 5) during the fiscal year ended
September 30, 1996. No executive officer or affiliated person of FAIF 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
Name of Compensation Benefits Accrued as Annual Benefits and Fund Complex
Person, Position From Registrant Part of Fund Expenses Upon Retirement Paid to Directors
- -------------------------------- --------------- --------------------- --------------- -----------------
<S> <C> <C> <C> <C>
Robert J. Dayton, Director $11,729 -0- -0- $32,850
Andrew M. Hunter III, Director * -0- -0- -0- -0-
Leonard W. Kedrowski, Director $12,176 -0- -0- $34,150
Robert L. Spies, Director * -0- -0- -0- -0-
Joseph D. Strauss, Director $20,082 -0- -0- $56,375
Virginia L. Stringer, Director $12,620 -0- -0- $35,350
Gae B. Veit, Director $12,466 -0- -0- $34,950
- ------------------
* Not a director during the fiscal year ended September 30, 1996.
</TABLE>
INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISORY AGREEMENT
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, multi-state bank holding company headquartered in Minneapolis,
Minnesota. FBS is comprised of 13 banks and several trust and nonbank
subsidiaries, with 362 banking locations and 18 nonbank offices primarily in
Minnesota, Colorado, Illinois, Iowa, Kansas, Montana, Nebraska, North Dakota,
South Dakota, Wisconsin and Wyoming. Through its subsidiaries, FBS provides
consumer banking, commercial lending, financing of import/export trade, foreign
exchange and investment services as well as mortgage banking, trust, commercial
and agricultural finance, data processing, leasing and brokerage services.
Pursuant to an Investment Advisory Agreement dated April 2, 1991 (the
"Advisory Agreement"), the Funds engage the Adviser to act as investment adviser
for and to manage the investment of the assets of the Funds. Each Fund pays the
Adviser monthly fees calculated on an annual basis equal to 0.70% of its average
daily net assets.
In addition to the investment advisory fee, each Fund pays all 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, and it may have an obligation to
indemnify its directors and officers with respect to such litigation.
The Funds had not commenced operations as of September 30, 1996, the
end of FAIF's most recent fiscal year. They therefore paid no advisory fees to
the Adviser during such year.
ADMINISTRATION AGREEMENT
SEI Investments Management Corporation (the "Administrator") serves as
administrator for the Funds pursuant to an Administration Agreement between it
and the Funds. The Administrator is a wholly-owned subsidiary of SEI Investments
Company, which also owns the Funds' distributor. See "-- Distributor and
Distribution Plans" below. Under the Administration Agreement, the Administrator
provides administrative personnel and services to the Funds for a fee as
described in the Funds' Prospectuses. These services include, among others,
regulatory reporting, fund and portfolio accounting, shareholder reporting
services, and compliance monitoring services.
The Funds had not commenced operations as of September 30, 1996, the
end of FAIF's most recent fiscal year. They therefore paid no fees to the
Administrator during such year.
DISTRIBUTOR AND DISTRIBUTION PLANS
SEI Investments Distribution Co. (the "Distributor") serves as the
distributor for the Class A, Class B and Class C Shares of the Funds. The
Distributor is a wholly-owned subsidiary of SEI Investments Company, which also
owns the Funds' Administrator. See "-- Administration Agreement" above.
The Distributor serves as distributor for the Class A and Class C
Shares pursuant to a Distribution Agreement dated February 10, 1994 (the "Class
A/Class C Distribution Agreement") between itself and the Funds, and as
distributor for the Class B Shares pursuant to a Distribution and Service
Agreement dated August 1, 1994, as amended September 14, 1994 (the "Class B
Distribution and Service 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 Distribution Agreements provide that shares of the Funds are
distributed through the Distributor and, with respect to Class A and Class B
Shares, 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.
The Distributor receives no compensation for distribution of the Class
C Shares. With respect to the Class A Shares, the Distributor receives all of
the front-end sales charges paid upon purchase of the Funds' shares except for a
portion (as disclosed in the Prospectuses) which may be re-allowed to
Participating Institutions. The Class A Shares of each Fund also pay a
shareholder servicing fee to the Distributor monthly at the annual rate of 0.25%
of each Fund's Class A average daily net assets, which fee may be used by the
Distributor to provide compensation for shareholder servicing activities with
respect to the Class A Shares of the kinds described in the Retail Class
Prospectuses.
The Class B Shares of each Fund pay to the Distributor a sales support
fee at an annual rate of 0.75% of the average daily net assets of the Class B
Shares of such Fund, 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 of each Fund 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 each Fund's Class B Shares pursuant to
a service plan (the "Class B Service Plan"), which fee may be used by the
Distributor to provide compensation for shareholder servicing activities with
respect to the Class B Shares of a Fund of the kinds described in the Retail
Class Prospectuses. Although Class B Shares are sold without a front-end sales
charge, the Distributor pays a total of 4.25% of the amount invested (including
a pre-paid service fee of 0.25% of the amount invested) to dealers who sell
Class B Shares (excluding exchanges from other Class B Shares in the First
American family). The servicing fee payable under the Class B Service Plan is
prepaid as described above.
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 FAIF and by the vote of the majority of those
Board members of FAIF who are not interested persons of FAIF and who have no
direct or indirect financial interest in the operation of FAIF's Rule 12b-1
Plans of Distribution or in any agreement related to such Plans.
FAIF has adopted plans of distribution with respect to the Class A and
Class B Shares of the Funds, respectively, pursuant to Rule 12b-1 under the 1940
Act (collectively, the "Plans"). 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 Distributor to retain the sales
charges paid upon purchase of Class A and Class B Shares. Each of the Plans 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. The Class B Plan authorizes the Distributor
to retain the contingent deferred sales charge applied on redemptions of Class B
Shares, except that portion which is re-allowed to Participating Institutions.
The Plans recognize that the Distributor, any Participating Institution, the
Administrator, and the Adviser, in their discretion, may from time to time use
their own assets to pay for certain additional costs of distributing Class A and
Class B Shares. Any such arrangements to pay such additional costs may be
commenced or discontinued by the Distributor, any Participating Institution, the
Administrator, or the Adviser at any time.
The Funds had not commenced operations as of September 30, 1996, the
end of FAIF's most recent fiscal year. They therefore paid no distribution or
shareholder servicing fees during such year.
CUSTODIAN; TRANSFER AGENT; COUNSEL; ACCOUNTANTS
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 First Bank System, Inc., which
also owns the Adviser.
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.
All of the instruments representing the investments of the Funds and all cash is
held by the Custodian or, as described in the Prospectuses for International
Index Fund, by a sub-custodian with respect to such Fund. The Custodian or such
sub-custodian delivers securities against payment upon sale and pays for
securities against delivery upon purchase. The Custodian also remits Fund assets
in payment of Fund expenses, pursuant to instructions of FAIF's officers or
resolutions of the Board of Directors.
As compensation for its services to the Funds, the Custodian is paid a
monthly fee by each Fund calculated on an annual basis equal to, for Small Cap
Value Fund, 0.03% of Small Cap Value Fund's average daily net assets, and, for
International Index Fund, 0.10% of International Index Fund's average daily net
assets. In addition, the Custodian is reimbursed for its out-of-pocket expenses
incurred while providing its services to the Funds. The Custodian continues to
serve so long as its appointment is approved at least annually by the Board of
Directors including a majority of the directors who are not interested persons
(as defined under the 1940 Act) of FAIF.
DST Systems, Inc., 1004 Baltimore, Kansas City, Missouri 64105, is
transfer agent and dividend disbursing agent for the shares of the Funds.
Dorsey & Whitney LLP, 220 South Sixth Street, Minneapolis, Minnesota
55402, is independent General Counsel for the Funds.
KPMG Peat Marwick LLP, 90 South Seventh Street, Minneapolis, Minnesota
55402, acts 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 AND ALLOCATION OF BROKERAGE
Decisions with respect to placement of the Funds' portfolio
transactions are made by the Adviser. The Funds' policy is to seek to place
portfolio transactions with brokers or dealers who will execute transactions as
efficiently as possible and at the most favorable price. The Adviser may,
however, select a broker or dealer to effect a particular transaction without
communicating with all brokers or dealers who might be able to effect such
transaction because of the volatility of the market and the desire of the
Adviser to accept a particular price for a security because the price offered by
the broker or dealer meets guidelines for profit, yield or both. Many of the
portfolio transactions involve payment of a brokerage commission by the
appropriate Fund. In some cases, transactions are with dealers or issuers who
act as principal for their own accounts and not as brokers. Transactions
effected on a principal basis are made without the payment of brokerage
commissions but at net prices, which usually include a spread or markup. In
effecting transactions in over-the-counter securities, the Funds deal with
market makers unless it appears that better price and execution are available
elsewhere.
While the Adviser does not deem it practicable and in the Funds' best
interest to solicit competitive bids for commission rates on each transaction,
consideration will regularly be given by the Adviser to posted commission rates
as well as to other information concerning the level of commissions charged on
comparable transactions by other qualified brokers. The Funds had not commenced
operations as of September 30, 1996, the end of FAIF's most recent fiscal year.
They therefore paid no commissions during such year.
It is expected that International Index Fund will purchase most foreign
equity securities in the over-the-counter markets or stock exchanges located in
the countries in which the respective principal offices of the issuers of the
various securities are located if that is the best available market. The fixed
commissions paid in connection with most such foreign stock transactions
generally are higher than negotiated commissions on United States transactions.
There generally is less governmental supervision and regulation of foreign stock
exchanges than in the United States. Foreign securities settlements may in some
instances be subject to delays and related administrative uncertainties.
Foreign equity securities may be held in the form of American
Depositary Receipts, or ADRs, European Depositary Receipts, or EDRs, or
securities convertible into foreign equity securities. ADRs and EDRs may be
listed on stock exchanges or traded in the over-the-counter markets in the
United States or overseas. The foreign and domestic debt securities and money
market instruments in which the Funds may invest are generally traded in the
over-the-counter markets.
Subject to the policy of seeking favorable price and execution for the
transaction size and risk involved, in selecting brokers and dealers other than
the Distributor and determining commissions paid to them, the Adviser may
consider ability to provide supplemental performance, statistical and other
research information as well as computer hardware and software for research
purposes for consideration, analysis and evaluation by the staff of the Adviser.
In accordance with this policy, the Funds do not execute brokerage transactions
solely on the basis of the lowest commission rate available for a particular
transaction. Subject to the requirements of favorable price and efficient
execution, placement of orders by securities firms for the purchase of shares of
the Funds may be taken into account as a factor in the allocation of portfolio
transactions.
Research services that may be received by the Adviser 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 issuers, 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 brokers and 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. Research services furnished by brokers and dealers used by the
Funds for portfolio transactions may be utilized by the Adviser in connection
with investment services for other accounts and, likewise, research services
provided by brokers and dealers used for transactions of other accounts may be
utilized by the Adviser in performing services for the Funds. The Adviser
determines the reasonableness of the commissions paid in relation to their view
of the value of the brokerage and research services provided, considered in
terms of the particular transactions and their overall responsibilities with
respect to all accounts as to which they exercise investment discretion.
The Adviser has not entered into any formal or informal agreements with
any broker or dealer, and do 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 brokers and dealers that
will be used as a general guide in the placement of Fund business in order to
encourage certain brokers and 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 brokers and dealers (discussed above) had
been met, and, accordingly, substantial deviations from the list could occur.
The Adviser would authorize the Funds to pay an amount of commission for
effecting a securities transaction in excess of the amount of commission another
broker or dealer would have charged only if the Adviser determined in good faith
that the amount of such commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer, viewed in
terms of either that particular transaction or the overall responsibilities of
the Adviser with respect to the Funds.
The Funds do not effect any brokerage transactions in their portfolio
securities with any broker or dealer affiliated directly or indirectly with the
Adviser, or the Distributor unless such transactions, including the frequency
thereof, the receipt of commissions payable in connection therewith, and the
selection of the affiliated broker or dealer effecting such transactions are not
unfair or unreasonable to the shareholders of the Funds, as determined by the
Board of Directors. Any transactions with an affiliated broker or dealer must be
on terms that are both at least as favorable to the Funds as the Funds can
obtain elsewhere and at least as favorable as such affiliated broker or 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 may
produce better executions for each client.
CAPITAL STOCK
As of July 11, 1997, no shares of the Funds were outstanding.
NET ASSET VALUE AND PUBLIC OFFERING PRICE
The method for determining the public offering price of the shares of a
Fund is summarized in the Retail Class Prospectus under the captions "Investing
in the Funds" and "Determining the Price of Shares" and in the Institutional
Class Prospectus under the caption "Purchases and Redemptions of Shares." The
net asset value of each Fund's shares is determined on each day during which the
New York Stock Exchange (the "NYSE") is open for business. The NYSE 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 NYSE 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, such Fund's net asset
value per share may be affected on days when investors may not purchase or
redeem shares. This may occur, for example, where a Fund holds securities which
are traded in foreign markets.
FUND PERFORMANCE
SEC STANDARDIZED PERFORMANCE FIGURES
YIELD FOR THE FUNDS. Yield for the Funds is a measure of the net
investment income per share (as defined) earned over a 30-day period expressed
as a percentage of the maximum offering price of a Fund's shares at the end of
the period. Such yield figures are determined by dividing the net investment
income per share earned during the specified 30-day period by the maximum
offering price per share on the last day of the period, according to the
following formula:
Yield = 2 [((a - b) / cd) + 1)(6th power) - 1]
Where: a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = average daily number of shares outstanding during the
period that were entitled to receive dividends
d = maximum offering price per share on the last day of the
period
TOTAL RETURN. Total return measures both the net investment income
generated by, and the effect of any realized or unrealized appreciation or
depreciation of, the underlying investments in a Fund's portfolio. The Funds'
average annual and cumulative total return figures are computed in accordance
with the standardized methods prescribed by the Securities and Exchange
Commission.
AVERAGE ANNUAL TOTAL RETURN. Average annual total return figures are
computed by determining the average annual compounded rates of return over the
periods indicated in the advertisement, sales literature or shareholders'
report, that would equate the initial amount invested to the ending redeemable
value, according to the following formula:
P(1 + T)(nth power) = ERV
Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the period of a
hypothetical $1,000 payment made at the beginning of
such period
This calculation (i) assumes all dividends and distributions are reinvested at
net asset value on the appropriate reinvestment dates as described in the
Prospectuses, and (ii) deducts (a) the maximum sales charge from the
hypothetical initial $1,000 investment (if applicable), and (b) all recurring
fees, such as advisory fees, charged as expenses to all shareholder accounts.
CUMULATIVE TOTAL RETURN. Cumulative total return is computed by finding
the cumulative compounded rate of return over the period indicated in the
advertisement that would equate the initial amount invested to the ending
redeemable value, according to the following formula:
CTR = ((ERV - P) / P ) 10
Where: CTR = cumulative total return
ERV = ending redeemable value at the end of, the period of a
hypothetical $1,000 payment made at the beginning of
such period; and
P = initial payment of $1,000
This calculation (i) assumes all dividends and distributions are reinvested at
net asset value on the appropriate reinvestment dates as described in the
Prospectuses, and (ii) deducts (a) the maximum sales charge from the
hypothetical initial $1,000 investment (if applicable), and (b) all recurring
fees, such as advisory fees, charged as expenses to all shareholder accounts.
NON-STANDARD DISTRIBUTION RATES
HISTORICAL DISTRIBUTION RATES. The Funds' historical annualized
distribution rates are computed by dividing the income dividends of a Fund for a
stated period by the maximum offering price on the last day of such period.
ANNUALIZED CURRENT DISTRIBUTION RATES. The Funds' annualized current
distribution rates are computed by dividing a Fund's income dividends for a
specified month (or three-month period, in the case of an equity Fund) by the
number of days in that month (or three-month period, in the case of an equity
Fund) and multiplying by 365, and dividing the resulting figure by the maximum
offering price on the last day of the specified period.
CERTAIN PERFORMANCE COMPARISONS
The Funds may compare their performance to that of certain published or
otherwise widely disseminated indices or averages compiled by third parties. The
Funds, and the indices and averages to which they may compare their performance,
are as follows, among others:
SMALL CAP VALUE FUND may compare its performance to the RUSSELL 2000
INDEX, which is a broadly diversified index consisting of approximately 2,000
small capitalization common stocks that can be used to compare to the total
returns of funds whose portfolios are invested primarily in small capitalization
common stocks. Small Cap Value Fund also may compare its performance to the
LIPPER SMALL CAP AVERAGE, which is an average of funds which invest primarily in
companies with market capitalizations of less than $1 billion at the time of
purchase.
INTERNATIONAL INDEX FUND may compare its performance to the Morgan
Stanley Europe, Australia, Far East Composite Index which is an aggregate of 15
individual country indices that collectively represent many of the major markets
in the world, excluding the United States and Canada. International Index Fund
also may compare its performance to the LIPPER INTERNATIONAL AVERAGE, which is
an average of funds which primarily invest in equity securities whose primary
trading markets are outside the United States.
Each of the Funds also may compare its performance to the CONSUMER
PRICE INDEX, which is a measure of the average change in prices over time in a
fixed market basket of goods and services.
TAXATION
The tax status of the Funds and the distributions that the Funds will
make to shareholders are summarized in the Prospectuses in the sections entitled
"Income Taxes." Each Fund intends to fulfill the requirements of Subchapter M of
the Internal Revenue Code of 1986, as amended (the "Code"), as a regulated
investment company. If so qualified, each Fund will not be liable for federal
income taxes to the extent it distributes its taxable income to its
shareholders.
To qualify under Subchapter M for tax treatment as a regulated
investment company, each Fund must, among other things: (1) derive at least 90%
of its gross income from dividends, interest, and certain other types of
payments related to its investment in stock or securities; (2) distribute to its
shareholders at least 90% of its investment company taxable income (as that term
is defined in the Code determined without regard to the deduction for dividends
paid) and 90% of its net tax-exempt income; (3) derive less than 30% of its
annual gross income from the sale or other disposition of stock, securities,
options, futures, or forward contracts held for less than three months; and (4)
diversify its holdings so that, at the end of each fiscal quarter of the Fund,
(a) at least 50% of the market value of the Fund's assets is represented by
cash, cash items, U.S. Government securities and securities of other regulated
investment companies, and other securities, with these other securities limited,
with respect to any one issuer, to an amount no greater than 5% of the Fund's
total assets and no greater than 10% of the outstanding voting securities of
such issuer, and (b) not more than 25% of the market value of the Fund's total
assets is invested in the securities of any one issuer (other than U.S.
Government securities or securities of other regulated investment companies).
Each Fund is subject to a nondeductible excise tax equal to 4% of the
excess, if any, of the amount required to be distributed for each calendar year
over the amount actually distributed. For this purpose, any amount on which the
Fund is subject to corporate-level income tax is considered to have been
distributed. In order to avoid the imposition of this excise tax, each Fund must
declare and pay dividends representing 98% of its net investment income for that
calendar year and 98% of its capital gains (both long-term and short-term) for
the twelve-month period ending October 31 of the calendar year.
Any loss on the sale or exchange of shares of a Fund generally will be
disallowed to the extent that a shareholder acquires or contracts to acquire
shares of the same Fund within 30 days before or after such sale or exchange.
Furthermore, if Fund shares with respect to which a long-term capital gain
distribution has been made are held for less than six months, any loss on the
sale or exchange of such shares will be treated as a long-term capital loss to
the extent of such long-term capital gain distribution.
For federal tax purposes, if a shareholder exchanges shares of a Fund
for shares of any other FAIF Fund pursuant to the exchange privilege (see
"Investing in the Funds -- Exchange Privilege" in the Prospectus for Class A and
Class B Shares, and "Purchases and Redemptions of Shares -- Exchange Privilege"
in the Prospectus for Class C Shares), such exchange will be considered a
taxable sale of the shares being exchanged. Furthermore, if a shareholder of
Retail Class Shares carries out the exchange within 90 days of purchasing shares
in a fund on which he or she has incurred a sales charge, the sales charge
cannot be taken into account in determining the shareholder's gain or loss on
the sale of those shares to the extent that the sales charge that would have
been applicable to the purchase of the later-acquired shares in the other fund
is reduced because of the exchange privilege. However, the amount of any sales
charge that may not be taken into account in determining the shareholder's gain
or loss on the sale of the first-acquired shares may be taken into account in
determining gain or loss on the eventual sale or exchange of the later-acquired
shares.
Dividends generally are taxable to shareholders at the time they are
paid. However, dividends declared in October, November and December, made
payable to shareholders of record in such a month and actually paid in January
of the following year are treated as paid and are thereby taxable to
shareholders as of December 31.
If a Fund invests in U.S. Treasury inflation-protection securities, it
will be required to treat as original issue discount any increase in the
principal amount of the securities that occurs during the course of its taxable
year. If a Fund purchases such inflation-protection securities that are issued
in stripped form either as stripped bonds or coupons, it will be treated as if
it had purchased a newly issued debt instrument having original issue discount.
Generally, the original issue discount equals the difference between the "stated
redemption price at maturity" of the obligation and its "issue price" as those
terms are defined in the Code. A Fund holding an obligation with original issue
discount is required to accrue as ordinary income a portion of such original
issue discount even though it receives no cash currently as interest payment
corresponding to the amount of the original issue discount. Because each Fund is
required to distribute substantially all of its net investment income (including
accrued original issue discount) in order to be taxed as a regulated investment
company, it may be required to distribute an amount greater than the total cash
income it actually receives. Accordingly, in order to make the required
distributions, a Fund may be required to borrow or liquidate securities. The
extent to which a Fund may liquidate securities at a gain may be limited by the
requirement that less than 30% of the Fund's gross income (on an annual basis)
consists of gains from the sale of securities held for less than three months.
Under Code Section 1256, except for the transactions the Fund has
identified as hedging transactions, each Fund is required for federal income tax
purposes to recognize as income for each taxable year its net unrealized gains
and losses on futures contracts and options as of the end of the year as well as
those actually realized during the year. Except for transactions in futures
contracts or options that are classified as part of a "mixed straddle," gain or
loss recognized with respect to such contracts or options is considered to be
60% long-term capital gain or loss and 40% short-term capital gain or loss,
without regard to the holding period of the contract. In the case of a
transaction classified as a "mixed straddle," the recognition of losses may be
deferred to a later taxable year.
Sales of forward currency contracts that are intended to hedge against
a change in the value of securities or currencies held by a Fund may affect the
holding period of such securities or currencies and, consequently, the nature of
the gain or loss on such securities or currencies upon disposition.
As stated above, the Code requires a regulated investment company to
diversity its holdings. The Internal Revenue Service has not made its position
clear regarding the treatment of futures contracts and options for purposes of
the diversification test, and the extent to which a Fund can buy or sell futures
contracts and options may be limited by this requirement.
It is expected that any net gain realized from the closing out of
futures contracts or options will be considered gain from the sale of securities
or currencies and therefore qualifying income for purposes of the 90% of gross
income from qualified sources requirement, as discussed above. In order to avoid
realizing excessive gains on securities held less than three months, each Fund
may be required to defer the closing out of futures contracts or options beyond
the time when it would otherwise be advantageous to do so. It is expected that
unrealized gains on futures contracts or options, which have been open for less
than three months as of the end of a Fund's fiscal year and which are recognized
for tax purposes, will not be considered gains on securities held less than
three months for purposes of the 30% test, as discussed above.
Any realized gain or loss on closing out a futures contract or option
will generally result in a recognized capital gain or loss for tax purposes.
Code Section 988 may also apply to forward currency contracts. Under Section
988, each foreign currency gain or loss is generally computed separately and
treated as ordinary income or loss. In the case of overlap between Sections 1256
and 988, special provisions determine the character and timing of any income,
gain or loss. International Index Fund will attempt to monitor Section 988
transactions to avoid an adverse tax impact.
Each Fund will distribute to shareholders annually any net long-term
capital gains that have been recognized for federal income tax purposes
(including unrealized gains at the end of the Fund's fiscal year) on futures
contract or option contract transactions. Such distributions will be combined
with distributions of capital gains realized on the Fund's other investments.
Pursuant to the Code, distributions of net investment income by a Fund
to a shareholder who, as to the United States, is a nonresident alien
individual, nonresident alien fiduciary of a trust or estate, foreign
corporation, or foreign partnership (a "foreign shareholder") will be subject to
U.S. withholding tax (at a rate of 30% or lower treaty rate). Withholding will
not apply if a dividend paid by a Fund to a foreign shareholder is "effectively
connected" with a U.S. trade or business of such shareholder, in which case the
reporting and withholding requirements applicable to U.S. citizens or domestic
corporations will apply. Distributions of net long-term capital gains are not
subject to tax withholding but, in the case of a foreign shareholder who is a
nonresident alien individual, such distributions ordinarily will be subject to
U.S. income tax at a rate of 30% if the individual is physically present in the
U.S. for more than 182 days during the taxable year. Each Fund will report
annually to its shareholders the amount of any withholding.
The foregoing relates only to federal income taxation and is a general
summary of the federal tax law in effect as of the date of this Statement of
Additional Information.
RATINGS
A rating of a rating service represents that service's opinion as to
the credit quality of the rated security. However, such ratings are general and
cannot be considered absolute standards of quality or guarantees as to the
creditworthiness of an issuer. A rating is not a recommendation to purchase,
sell or hold a security, because it does not take into account market value or
suitability for a particular investor. Market values of debt securities may
change as a result of a variety of factors unrelated to credit quality,
including changes in market interest rates.
When a security has been rated by more than one service, the ratings
may not coincide, and each rating should be evaluated independently. Ratings are
based on current information furnished by the issuer or obtained by the rating
services from other sources which they consider reliable. Ratings may be
changed, suspended or withdrawn as a result of changes in or unavailability of
such information, or for other reasons. In general, the Funds are not required
to dispose of a security if its rating declines after it is purchased, although
they may consider doing so.
RATINGS OF CORPORATE DEBT OBLIGATIONS AND MUNICIPAL BONDS
STANDARD & POOR'S CORPORATION
AAA: Securities 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.
AA: Securities rated AA have a very strong capacity to pay interest and
repay principal and differ from the highest rated issues only to a
small degree.
A: Securities rated A have a strong capacity to pay interest and repay
principal, although they are somewhat more susceptible to adverse
effects of changes in circumstances and economic conditions than bonds
in higher rated categories.
BBB: Securities rated BBB are regarded as having an adequate capacity
to pay interest and repay principal. Although such securities normally
exhibit adequate protection standards, adverse economic conditions or
changing circumstances are more likely to lead to a weakened capacity
to pay interest and repay principal for securities in this category
than for those in higher rated categories.
Debt rated BB, B, CCC, CC, and C by Standard & Poor's is regarded, on balance,
as predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. BB indicates the
lowest degree of speculation and C the highest degree of speculation. While such
debt will likely have some quality and protective characteristics, these are
outweighed by large uncertainties or major risk exposures to adverse conditions.
BB: Securities rated BB have less near-term vulnerability to default
than other speculative issues. However, they face major ongoing
uncertainties or exposure to adverse business, financial, or economic
conditions which could lead to inadequate capacity to meet timely
interest and principal payments. The BB rating category is also used
for debt subordinated to senior debt that is assigned an actual or
implied BBB- rating.
B: Securities rated B have a greater vulnerability to default but
currently have the capacity to meet interest payments and principal
repayments. Adverse business, financial, or economic conditions will
likely impair capacity or willingness to pay interest and repay
principal. The B rating category is also used for debt subordinated to
senior debt that is assigned an actual or implied BB or BB- rating.
CCC: Securities rated CCC have a currently identifiable vulnerability
to default, and are dependent upon favorable business, financial, and
economic conditions to meet timely payment of interest and repayment of
principal. In the event of adverse business, financial, or economic
conditions, they are not likely to have the capacity to pay interest
and repay principal. The CCC rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied B or
B- rating.
The ratings from AA to CCC may be modified by the addition of a plus (+) or
minus (-) sign to show relative standing within the major rating categories.
MOODY'S INVESTORS SERVICE, INC.
Aaa: Securities which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are
generally referred to as "gilt edge." Interest payments are protected
by a large or exceptionally stable margin and principal is secure.
While the various protective elements are likely to change, such
changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa: Securities which are rated Aa are judged to be of high quality by
all standards. Together with the Aaa group, they comprise what are
generally known as high grade securities. They are rated lower than the
best securities because margins of protection may not be as large as in
Aaa securities, or fluctuation of protective elements may be of greater
magnitude, or there may be other elements present which make the
long-term risks appear somewhat greater than in Aaa securities.
A: Securities which are rated A possess many favorable investment
attributes and are to be considered as upper medium grade obligations.
Factors giving security to principal and interest are considered
adequate, but elements may be present which suggest a susceptibility to
impair-ment sometime in the future.
Baa: Securities which are rated Baa are considered as medium grade
obligations, being neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the
present, but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such
securities lack outstanding investment characteristics, and in fact
have some speculative characteristics.
Ba: An issue which is rated Ba is judged to have speculative elements;
its future cannot be considered as well assured. Often the protection
of interest and principal payments may be very moderate and thereby not
well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes issues in this class.
B: An issue which is rated B generally lacks characteristics of the
desirable investment. Assurance of interest and principal payments or
of maintenance of other terms of the contract over any long period of
time may be small.
Caa: An issue which is rated Caa is of poor standing. Such an issue may
be in default or there may be present elements of danger with respect
to principal or interest.
Those securities in the Aa, A and Baa groups which Moody's believes possess the
strongest investment attributes are designated by the symbols Aa-1, A-1 and
Baa-1. Other Aa, A and Baa securities comprise the balance of their respective
groups. These rankings (1) designate the securities which offer the maximum in
security within their quality groups, (2) designate securities which can be
bought for possible upgrading in quality, and (3) additionally afford the
investor an opportunity to gauge more precisely the relative attractiveness of
offerings in the marketplace.
RATINGS OF PREFERRED STOCK
STANDARD & POOR'S CORPORATION. Standard & Poor's ratings for preferred
stock have the following definitions:
AAA: An issue rated "AAA" has the highest rating that may be assigned
by Standard & Poor's to a preferred stock issue and indicates an
extremely strong capacity to pay the preferred stock obligations.
AA: A preferred stock issue rated "AA" also qualifies as a high-quality
fixed income security. The capacity to pay preferred stock obligations
is very strong, although not as overwhelming as for issues rated "AAA."
A: An issue rated "A" is backed by a sound capacity to pay the
preferred stock obligations, although it is somewhat more susceptible
to the adverse effects of changes in circumstances and economic
conditions.
BBB: An issue rated "BBB" is regarded as backed by an adequate capacity
to pay the preferred stock obligations. Whereas it normally exhibits
adequate protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to make
payments for a preferred stock in this category than for issues in the
category.
MOODY'S INVESTORS SERVICE, INC. Moody's ratings for preferred stock
include the following:
aaa: An issue which is rated "aaa" is considered to be a top-quality
preferred stock. This rating indicates good asset protection and the
least risk of dividend impairment within the universe of preferred
stocks.
aa: An issue which is rated "aa" is considered a high grade preferred
stock. This rating indicates that there is reasonable assurance that
earnings and asset protection will remain relatively well maintained in
the foreseeable future.
a: An issue which is rate "a" is considered to be an upper medium grade
preferred stock. While risks are judged to be somewhat greater than in
the "aaa" and "aa" classifications, earnings and asset protection are,
nevertheless, expected to be maintained at adequate levels.
baa: An issue which is rated "baa" is considered to be medium grade,
neither highly protected nor poorly secured. Earnings and asset
protection appear adequate at present but may be questionable over any
great length of time.
RATINGS OF MUNICIPAL NOTES
STANDARD & POOR'S CORPORATION
SP-1: Very strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics are given a
plus (+) designation.
SP-2: Satisfactory capacity to pay principal and interest.
SP-3: Speculative capacity to pay principal and interest.
None of the Funds will purchase SP-3 municipal notes.
MOODY'S INVESTORS SERVICE, INC. Generally, Moody's ratings for state
and municipal short-term obligations are designated Moody's Investment Grade
("MIG"); however, where an issue has a demand feature which makes the issue a
variable rate demand obligation, the applicable Moody's rating is "VMIG."
MIG 1/VMIG 1: This designation denotes the best quality. There is
strong protection by established cash flows, superior liquidity support
or demonstrated broad-based access to the market for refinancing.
MIG 2/VMIG 2: This designation denotes high quality, with margins of
protection ample although not so large as available in the preceding
group.
MIG 3/VMIG 3: This designation denotes favorable quality, with all
security elements accounted for, but lacking the strength of the
preceding grades. Liquidity and cash flow protection may be narrow and
market access for refinancing is likely to be less well established.
None of the Funds will purchase MIG 3/VMIG 3 municipal notes.
RATINGS OF COMMERCIAL PAPER
STANDARD & POOR'S CORPORATION. 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 refined 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 very
strong. Those issues determined to possess overwhelming safety characteristics
will be denoted with a plus (+) symbol designation. None of the Funds will
purchase commercial paper rated A-3 or lower.
MOODY'S INVESTORS SERVICE, INC. Moody's commercial paper ratings are
opinions as to the ability of the issuers to timely repay 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 instrument
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.
None of the Funds will purchase Prime-3 commercial paper.
PART C -- OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Not applicable.
(b) Exhibits
(1) Articles of Incorporation, as amended and supplemented
through July 1997.*
(2) Bylaws, as amended through December 1995.*
(3) Not applicable.
(4) Specimen form of Common Stock Certificate. (Incorporated
by reference to Exhibit (4) to Post-Effective Amendment
No. 21.)
(5)(a) Investment Advisory Agreement dated April 2, 1991,
between Registrant and First Bank National Association,
as amended and supplemented through August 1994.
(Incorporated by reference to Exhibit (5)(a) to
Post-Effective Amendment No. 21.)
(5)(b) Amendment No. 5 to Exhibit A to Investment Advisory
Agreement. (Incorporated by reference to Exhibit (5)(b)
to Post-Effective Amendment No. 24.)
(5)(c) Sub-Advisory Agreement relating to International Fund
between First Bank National Association and Marvin &
Palmer Associates, Inc. (Incorporated by reference to
Exhibit (5)(b) to Post-Effective Amendment No. 21.)
(5)(d) Amendment No. 6 to Exhibit A to Investment Advisory
Agreement. (Incorporated by reference to Exhibit (5)(d)
to Post-Effective Amendment No. 27.)
(6)(a) Distribution Agreement [Class A and Class C] dated
February 10, 1994 between Registrant and SEI Financial
Services Company. (Incorporated by reference to Exhibit
(6)(a) to Post-Effective Amendment No. 21.)
(6)(b) Distribution and Service Agreement [Class B] dated
August 1, 1994, as amended September 14, 1994 between
Registrant and SEI Financial Services Company.
(Incorporated by reference to Exhibit (6)(b) to
Post-Effective Amendment No. 21.)
(6)(c) Form of Dealer Agreement. (Incorporated by reference to
Exhibit (6)(c) to Post-Effective Amendment No. 21.)
(7) Not applicable.
(8)(a) Custodian Agreement dated September 20, 1993, between
Registrant and First Trust National Association, as
supplemented through August 1994. (Incorporated by
reference to Exhibit (8) to Post-Effective Amendment No.
18.)
(8)(b) Compensation Agreement dated as of June 1, 1995,
pursuant to Custodian Agreement. (Incorporated by
reference to Exhibit (8)(b) to Post-Effective Amendment
No. 24.)
(8)(c) Compensation Agreement dated as of January 1, 1997,
pursuant to Custodian Agreement. (Incorporated by
reference to Exhibit (8)(c) to Post-Effective Amendment
No. 27.)
(9)(a) Administration Agreement dated as of January 1, 1995
between Registrant and SEI Financial Management
Corporation. (Incorporated by reference to Exhibit
(9)(a) to Post-Effective Amendment No. 23.)
(9)(b) Transfer Agency Agreement dated as of March 31, 1994,
between Registrant and Supervised Service Company, Inc.
[superseded] (Incorporated by reference to Exhibit
(9)(b) to Post-Effective Amendment No. 21.)
(9)(c) Assignment of Transfer Agency Agreement to DST Systems,
Inc. [superseded] (Incorporated by reference to Exhibit
(9)(c) to Post-Effective Amendment No. 24.)
(9)(d) Form of Transfer Agency Agreement dated as of October 1,
1996, between Registrant and DST Systems, Inc.
(Incorporated by reference to Exhibit (9)(d) to
Post-Effective Amendment No. 27.)
(10)(a) Opinion and Consent of D'Ancona & Pflaum dated November
10, 1987. (Incorporated by reference to Exhibit (10)(a)
to Post-Effective Amendment No. 21.)
(10)(b) Opinion and Consent of Dorsey & Whitney. (Incorporated
by reference to Exhibit (10)(a) to Post-Effective
Amendment No. 15.)
(11)(a) Not applicable.
(11)(b) Opinion and Consent of Dorsey & Whitney dated November
25, 1991. (Incorporated by reference to Exhibit (11)(b)
to Post-Effective Amendment No. 21.)
(12) Not applicable.
(13) Not applicable.
(14)(a) 401(k) Prototype Basic Plan Document # 02 (1989
Restatement), including Amendment Nos. 1, 2, and 3 and
sample Adoption Agreement. (Incorporated by reference to
Exhibit (14)(a) to Post-Effective Amendment No. 27.)
(14)(b) Defined Contribution Prototype Basic Plan Document # 01
(1989 Restatement), including Amendment Nos. 1 and 2 and
sample Adoption Agreement. (Incorporated by reference to
Exhibit (14)(b) to Post-Effective Amendment No. 27.)
(14)(c) IRA Applications and Documentation. (Incorporated by
reference to Exhibit (14)(c) to Post-Effective Amendment
No. 27.)
(15)(a) Form of Distribution Plan [Class A]. (Incorporated by
reference to Exhibit (15)(a) to Post-Effective Amendment
No. 21.)
(15)(b) Class B Distribution Plan. (Incorporated by reference to
Exhibit (15)(b) to Post-Effective Amendment No. 21.)
(15)(c) Service Plan [Class B]. (Incorporated by reference to
Exhibit (15)(c)) to Post-Effective Amendment No. 21.)
(16) Not applicable.
(17) Not applicable.
(18) Multiple Class Plan Pursuant to Rule 18f-3.
(Incorporated by reference to Exhibit (18) to
Post-Effective Amendment No. 23.)
(19)(a) Powers of attorney of Directors Dayton, Kedrowski,
Strauss, Stringer and Veit. (Incorporated by reference
to Exhibit (19) to Post-Effective Amendment No. 26).
(19)(b) Power of attorney of Director Hunter. (Incorporated by
reference to Exhibit (19)(b) to Post-Effective Amendment
No. 27.)
(19)(c) Consent to being named and power of attorney of director
nominee Spies. (Incorporated by reference to Exhibit
(19)(c) to Post-Effective Amendment No. 27.)
- -----------------
* Filed herewith
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
The following table sets forth the number of holders of shares of each
series of Common Stock of the Registrant as of July 11, 1997:
<TABLE>
<CAPTION>
NUMBER OF RECORD HOLDERS
------------------------------------------
FUND CLASS A CLASS B CLASS C
---- ------- ------- -------
<S> <C> <C> <C>
Stock Fund................................... 2,865 4,957 159
Equity Index Fund............................ 840 1,659 20
Balanced Fund................................ 2,067 2,735 7
Asset Allocation Fund........................ 181 411 7
Equity Income Fund........................... 242 523 35
Diversified Growth Fund...................... 648 986 58
Emerging Growth Fund......................... 234 225 26
Regional Equity Fund......................... 3,113 4,553 42
Special Equity Fund.......................... 2,663 3,464 46
Technology Fund.............................. 765 1,267 21
International Fund........................... 302 346 29
Real Estate Securities Fund.................. 171 315 6
Health Sciences Fund......................... 105 135 6
Limited Term Income Fund..................... 150 0 7
Intermediate Term Income Fund................ 154 0 31
Fixed Income Fund............................ 519 833 103
Intermediate Government Bond Fund............ 183 0 13
Intermediate Tax Free Fund................... 72 0 19
Minnesota Insured Intermediate Tax
Free Fund.............................. 109 0 14
Colorado Intermediate Tax Free Fund.......... 118 0 9
Oregon Intermediate Tax Free Fund............ * * 0
California Intermediate Tax Free Fund 0 * 0
Micro Cap Value Fund......................... 0 0 0
Small Cap Value Fund......................... 0 0 0
International Index Fund..................... 0 0 0
---------------
* Not registered.
</TABLE>
ITEM 27. INDEMNIFICATION
The first four paragraphs of Item 27 of Part C of Pre-Effective
Amendment No. 1 to the Registrant's Registration Statement on Form N-1A, dated
November 27, 1987, are incorporated herein by reference.
On February 18, 1988 the indemnification provisions of the Maryland
General Corporation Law (the "Law") were amended to permit, among other things,
corporations to indemnify directors and officers unless it is proved that the
individual (1) acted in bad faith or with active and deliberate dishonesty, (2)
actually received an improper personal benefit in money, property or services,
or (3) in the case of a criminal proceeding, had reasonable cause to believe
that his act or omission was unlawful. The Law was also amended to permit
corporations to indemnify directors and officers for amounts paid in settlement
of stockholders' derivative suits.
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 "Adviser"), is described in the section of
the Registrant's Statement of Additional Information, filed as part of this
Registration Statement, entitled "Investment Advisory and Other Services." The
directors and officers of the Adviser are listed below, together with their
principal occupation or other positions of a substantial nature during the past
two fiscal years.
<TABLE>
<CAPTION>
OTHER POSITIONS AND OFFICES
NAME POSITIONS AND OFFICES WITH ADVISER 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 and Vice Chairman--Finance Vice Chairman--Finance of FBS*
Philip G. Heasley Director and Vice Chairman Vice Chairman and Group Head of the
Retail Product Group of FBS.*
Daniel C. Rohr Director and Executive Vice President Executive Vice President, Commercial
Banking Group of FBS.*
J. Robert Hoffmann Director, Executive Vice President Executive Vice President and Chief
and Chief Credit Officer Credit Officer of FBS.*
Lee R. Mitau Director, Executive Vice President, Executive Vice President, General
General Counsel and Secretary Counsel and Secretary of FBS; prior to
October 1995 partner in Dorsey &
Whitney LLP*
Susan E. Lester Director, Executive Vice President and Executive Vice President and Chief
Chief Financial Officer Financial Officer of FBS; prior to
December 1995 executive vice president
and chief financial officer of Shawmut
National Corporation.*
Larry S. Crawford Executive Vice President and General --*
Manager, Retail Banking Group
Robert J. Anderson Executive Vice President --*
John M. Murphy, Jr. Executive Vice President Executive Vice President of FBS;
Chairman and Chief Investment
Officer, First Trust National
Association.*
Robert H. Sayre Executive Vice President Executive Vice President, Human
Resources of FBS.*
- ---------------
* Address: First Bank Place, 601 Second Avenue South, Minneapolis, Minnesota 55402.
</TABLE>
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 Investments Distribution Co. (the
"Distributor") 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 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., STI
Classic Variable Trust, ARK Funds, Monitor Funds, FMB Funds, Inc., SEI Asset
Allocation Trust, Turner Funds, and First American Strategy Funds, Inc. 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,
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, August 18, 1995, November 1, 1995, January 11, 1996, March 1,
1996, April 1, 1996, April 29, 1996, and October 1, 1996, respectively.
The Distributor 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 One Freedom Valley Drive, Oaks, Pennsylvania
19456.
<TABLE>
<CAPTION>
NAME POSITIONS AND OFFICES WITH UNDERWRITER POSITIONS AND 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 --
Richard B. Lieb Executive Vice President, President-Investment --
Services Division
Leo J. Dolan, Jr. Senior Vice President --
Carl A. Guarino Senior Vice President --
Jerome Hickey Senior Vice President --
Larry Hutchinson Senior Vice President --
David G. Lee Senior Vice President President
Jack May Senior Vice President --
A. Keith McDowell Senior Vice President --
Dennis J. McGonigle Senior Vice President --
Hartland J. McKeown Senior Vice President --
Barbara J. Moore Senior Vice President --
James V. Morris Senior Vice President --
Steven Onofrio Senior Vice President --
Kevin P. Robins Senior Vice President, General Counsel Vice President & Assistant Secretary
& Secretary
Robert Wagner Senior Vice President --
Patrick K. Walsh Senior Vice President --
Kenneth Zimmer Senior Vice President --
Robert Aller Vice President --
Marc H. Cahn Vice President & Assistant Secretary Vice President & Assistant Secretary
Gordon W. Carpenter Vice President --
Todd Cipperman Vice President & Assistant Secretary Vice President & Assistant Secretary
Robert Crudup Vice President & Managing Director --
Ed Daly Vice President --
Jeff Drennen Vice President --
Mick Duncan Vice President & Team Leader --
Vic Galef Vice President & Managing Director --
Kathy Heilig Vice President --
Michael Kantor Vice President --
Samuel King Vice President --
Kim Kirk Vice President & Managing Director --
Donald H. Korytowski Vice President --
John Krzeminski Vice President & Managing Director --
Robert S. Ludwig Vice President & Team Leader --
Vicki Malloy Vice President & Team Leader --
Carolyn McLaurin Vice President & Managing Director --
W. Kelso Morrill Vice President --
Barbara A. Nugent Vice President & Assistant Secretary Vice President & Assistant Secretary
Sandra K. Orlow Vice President & Assistant Secretary Vice President & Assistant Secretary
Donald Pepin Vice President & Managing Director --
Larry Pokora Vice President --
Kim Rainey Vice President --
Paul Sachs Vice President --
Mark Samuels Vice President & Managing Director --
Steve Smith Vice President --
Daniel Spaventa Vice President --
Kathryn L. Stanton Vice President & Assistant Secretary Vice President & Assistant Secretary
Wayne M. Withrow Vice President & Managing Director --
William Zawaski Vice President --
James Dougherty Director of Brokerage Services --
</TABLE>
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
<TABLE>
<CAPTION>
LOCATION
OF TYPE OF
REGULATION RECORD RECORD FUND
- ---------- ------ ------------------------------------------------------------- -------
<S> <C> <C> <C>
270.31a-1(a) 2 General Ledger B
2 Cash Transaction Statement D
2 Monthly Cash Summary Report M
2 Purchases Report D
2 Sales Report D
2 Realized Gain/Loss Report D
2 Securities Movement and Control List of Assets for Close of
Business B
270.31a-1(b)(1) 2 Daily Portfolio Transaction Detail D
2 Daily Settled Purchase and Sales Journal D
2 Money Market Monthly Transaction Journal M
2 Money Market General Ledger Activity Journal M
270.31a-1(b)2(i) 2 General Ledger B
2 Money Market General Ledger Activity Journal M
2 Open Trades/Secs. Out for Transfer Report D
2 Securities Movement and Control List of Assets for Close of
Business B
2 Federal Reserve 3E Safe-Keeping Acct. Listing of Securities
held by the Fund B
2 Div. Income Summary Report D
2 Div. and Interest Receivable Report D
2 Earned Income Report B
2 Money Market Daily Accrual Report M
2 Money Market Daily Amortization Report M
2 Statement of Condition B
270.31a-1(b)2(ii) 2 Fund Master Ledger D
2 Corporate Action Announcement Report D
2 Purchases Report D
2 Sales Report D
270.31a-1(b)2(iii) 2 Brokerage Alloc/Commission Detail Report D
270.31a-1(b)2(iv) 1 Shareholder Master File -- CRT B
1 Shareholder History File -- CRT B
270.31a-1(b)3 2 Fund Master Ledger D
270.31a-1(b)4 1 Articles of Incorporation B
1 Declaration of Trust B
1 By-Laws B
1 Minute Books B
270.31a-1(b)5 1 Trade Tickets B
2 Purchase Report D
2 Sales Report D
270.31a-1(b)5 1 Trade Tickets B
2 Purchase Report D
2 Sales Report D
270.31a-1(b)6 1 Trade Tickets B
270.31a-1(b)7 2 Fund Master Ledger D
270.31a-1(b)8 2 Statement of Condition B
2 General Ledger B
2 Money Market General Ledger Activity Journal M
270.31a-1(b)9 2 Brokerage Alloc./Commission Detail Report D
1 Brokerage Commission Report B
1 Reduction and Commission Report D
1 Quarterly Brokerage Log B
270.31a-1(b)10 1 Custodian Blanket Authorization B
1 Portfolio Manager Signoff B
270.31a-1(b)11 1 Portfolio Manager Signoff B
270.31a-1(b)12 2 All supporting documentation B
270.31a-1(c) Not applicable
270.31a-1(d) 1 Director Payments thru Fund Journal B
1 Exchange Purchase Journal B
1 Confirmed Payments Journal B
1 Fiduciary Contribution Journal B
1 Direct Payments Journal B
1 Direct Redemptions Journal B
2 General Ledger B
1 Shareholder Master File-- CRT B
1 Shareholder History File-- CRT B
1 Daily Div. Close-out Journal B
1 Asset Transfer/Rollover Journal B
1 Redemption Check Register B
1 Purchase Cancellations Journal B
1 Redemption Cancellation Journal B
1 Fail/Free Report B
1 Broker/Dealer Order Ticket B
1 Inv. Services Order Breakdowns B
1 EDGE Transaction Journal B
1 Shareholder Receipt-- Retail B
1 Account Application-- Retail B
1 Additional Deposit Slip-- Retail B
1 Trade Cancel Form B
1 Confirmation Statement B
1 Shareholder Statement B
1 Form U-4 B
1 Fingerprint Card B
1 Form U-4 Status Report B
1 Form U-4 Score Report B
1 Form U-5 B
270.31a-1(e) Not applicable
270.31a-1(f) 2 General Ledger B
1 Portfolio Manager Signoff B
1 Trade Tickets B
270.31a-2(a)(1) 2 Daily Portfolio Transaction Detail D
2 Daily Settled Pur. and Sales Journal D
2 Money Market Monthly Transaction Journal M
2 Money Market General Ledger Activity Journal M
2 Open Trades/Secs. Out for Transfer Report D
2 Securities Movement and Control List of Assets for Close of
Business B
2 Fed. Reserve 3E Safe-Keeping Acct. Listing of Securities held
by the Fund B
270.31a-2(a)(1) 2 Div. Income Summary Report D
2 Div. and Interest Receivable Report D
2 Earned Income Report B
2 Money Market Daily Accrual Report M
2 Money Market Daily Amortization Report M
2 Statement of Condition B
2 Fund Master Ledger D
2 Corporate Action Announcement Report D
2 Brokerage Alloc./Commission Detail Report D
1 Shareholder Master File-- CRT B
1 Shareholder History File-- CRT B
1 Declaration of Trust B
1 By-laws B
1 Minute Books B
270.31a-2(a)(2) 2 Purchases Report D
2 Sales Report D
2 General Ledger B
2 Money Market General Ledger Activity Journal M
2 Statement of Condition B
2 Fund Master Ledger D
2 Brokerage Alloc./Commission Detail Report D
1 Trade Tickets B
1 Brokerage Commission Report B
1 Reduction and Commission Report D
1 Quarterly Brokerage Log B
1 Custodian Blanket Authorization B
1 Portfolio Manager Signoff B
270.31a-2(a)(3) 1 Sales Literature File B
270.31a-2(b) Not applicable
270.31a-2(c) 1 Director Payments thru Fund Journal B
1 Exchange Purchase Journal B
1 Confirmed Payments Journal B
1 Fiduciary Contribution Journal B
1 Direct Payments Journal B
1 Direct Redemptions Journal B
2 General Ledger B
1 Shareholder Master File-- CRT B
1 Shareholder History File-- CRT B
1 Daily Div. Close-Out Journal B
1 Asset Transfer/Rollover Journal B
1 Redemption Check Register B
1 Purchase Cancellations Journal B
1 Redemption Cancellation Journal B
1 Fail/Free Report B
1 Broker/Dealer Order Ticket B
1 Inv. Services Order Breakdowns B
1 EDGE Transaction Journal B
1 Shareholder Receipt-- Retail B
1 Account Application-- Retail B
1 Additional Deposit Slip-- Retail B
1 Trade Cancel Form B
270.31a-2(c) 1 Confirmation Statement B
1 Shareholder Statement B
1 Form U-4 B
1 Fingerprint Card B
1 Form U-4 Status Report B
1 Form U-4 Score Report B
1 Form U-5 B
270.31a-2(d) Not applicable
270.31a-2(e) 2 General Ledger B
1 Portfolio Manager Signoff B
1 Trade Tickets B
270.31a-2(f)(1) 1 Microfilm B
270.31a-2(f)(2) 1 Retention Plan B
270.31a-2(f)(3) Not applicable
270.31a-3 1 Custodian Agreement B
(1) SEI Investments Management Corporation and SEI Investments Distribution
Co. Oaks, Pennsylvania 19456
(2) First Trust National Association
180 East Fifth Street
St. Paul, Minnesota 55101
B = Both D = Debt Equity M = Money Market
</TABLE>
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.
Registrant, on behalf of Small Cap Value Fund and International Index
Fund, undertakes to file a post-effective amendment, using financial statements
which need not be certified, within four to six months from the date such funds
commence operations.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, as amended, the Registrant has duly caused this
Post-Effective Amendment to its Registration Statement No. 33-16905 to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Oaks, Commonwealth of Pennsylvania, on the 17th day of July, 1997.
FIRST AMERICAN INVESTMENT FUNDS, INC.
ATTEST: /s/ Stephen G. Meyer By /s/ Kathryn L. Stanton
----------------------------- ----------------------------------------
Stephen G. Meyer Kathryn L. Stanton, Vice President
Pursuant to the requirements of the Securities Act of 1933, this
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 **
- ------------------------------- Financial and Accounting
Stephen G. Meyer Officer)
* Director **
- -------------------------------
Robert J. Dayton
* Director **
- -------------------------------
Andrew M. Hunter III
* Director **
- -------------------------------
Robert L. Spies
* Director **
- -------------------------------
Leonard W. Kedrowski
* Director **
- -------------------------------
Joseph D. Strauss
* Director **
- -------------------------------
Virginia L. Stringer
* Director **
- -------------------------------
Gae B. Veit
* By: /s/ Kathryn L. Stanton
- -------------------------------
Kathryn L. Stanton
Attorney in Fact
** July 17, 1997.
- --------------------------------------------------------------------------------
STATE OF MARYLAND
I hereby certify that this is a true and complete copy of the 9 page document on
file in this office. DATED: 2-4-94.
STATE DEPARTMENT OF ASSESSMENTS AND TAXATION
BY: Leah Hamm-Curry
This stamp replaces our previous certification system. Effective: 10/84
- --------------------------------------------------------------------------------
ARTICLES OF AMENDMENT AND RESTATEMENT
OF
FIRST AMERICAN INVESTMENT FUNDS, INC.
First American Investment Funds, Inc., a Maryland corporation, having
its principal office in Baltimore, Maryland (the"Corporation"), hereby certifies
to the State Department of Assessments and Taxation of Maryland that:
FIRST: The Articles of Incorporation of the Corporation are amended and
restated in their entirety to read as follows:
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
FIRST AMERICAN INVESTMENT FUNDS, INC.
ARTICLE I
NAME
The name of the corporation (hereinafter referred to as the
"Corporation") is "First American Investment Funds, Inc."
ARTICLE II
PURPOSES AND POWERS
The purposes for which the Corporation is formed are to engage in,
conduct, operate and carry on the business of an open-end management investment
company under the Investment Company Act of 1940 (including any amendment
thereof or other applicable Act of Congress hereafter enacted) (hereinafter
called the "1940 Act"), and to do any and all acts or things as are necessary,
convenient, appropriate, incidental or customary therewith.
ARTICLE III
PRINCIPAL OFFICE AND RESIDENT AGENT
The address of the principal office of the corporation in the State of
Maryland is:
First American Investment Funds, Inc.
c/o The Corporation Trust Incorporated
32 South Street
Baltimore, Maryland 21202
The resident agent is a corporation organized under the laws of the
State of Maryland.
ARTICLE IV
CAPITAL STOCK
Section 1. (a) The total number of shares of capital stock that the
Corporation has authority to issue is one hundred twenty billion
(120,000,000,000) shares of common stock (individually, a "Share" and,
collectively, the "Shares"), of the par value of $.0001 per Share and of the
aggregate par value of twelve million dollars ($12,000,000). Unless otherwise
prohibited by law, so long as the Corporation is registered as an open-end
investment company under the 1940 Act, the Board of Directors shall have the
power and authority, without the approval of the holders of any outstanding
Shares, to increase or decrease the number of shares of capital stock or the
number of shares of capital stock of any class or series the the Corporation has
authority to issue.
(b) Of the total authorized Shares, two billion (2,000,000,000) Shares
shall constitute the class designated as "Class A Common Shares" (formerly
referred to as "government bond fund shares"), two billion (2,000,000,000)
Shares shall constitute the class designated as "Class B Common Shares"
(formerly referred to as "fixed income fund shares"), two billion
(2,000,000,000) Shares shall constitute the class designated as "Class C Common
Shares" (formerly referred to as "municipal bond fund shares"), two billion
(2,000,000,000) Shares shall constitute the class designated as "Class D Common
Shares" (formerly referred to as "stock fund shares"), two billion
(2,000,000,000) Shares shall constitute the class designated as "Class E Common
Shares" (formerly referred to as "special equity fund shares"), two billion
(2,000,000,000) Shares shall constitute the class designated as "Class F Common
Shares" (formerly referred to as "asset allocation fund shares"), two billion
(2,000,000,000) Shares shall constitute the class designated as "Class G Common
Shares" (formerly referred to as "balanced fund shares"), two billion
(2,000,000,000) Shares shall constitute the class designated as "Class H Common
Shares" (formerly referred to as "equity index fund shares"), two billion
(2,000,000,000) Shares shall constitute the class designated as "Class I Common
Shares" (formerly referred to as "intermediate term income fund shares"), two
billion (2,000,000,000) Shares shall constitute the class designated as "Class J
Common Shares" (formerly referred to as "limited term income fund shares"), two
billion (2,000,000,000) Shares shall constitute the class designated as "Class K
Common Shares" (formerly referred to as "mortgage securities fund shares"), two
billion (2,000,000,000) Shares shall constitute the class designated as "Class L
Common Shares" (formerly referred to as "regional equity fund shares"), and the
remaining ninety-six billion (96,000,000,000) authorized Shares shall initially
be unclassified Shares. Any class of the Shares, including the Class A through
Class L Common Shares and each class hereafter created by the Board of
Directors, shall be referred to herein individually as a "Class" and
collectively as "Classes." The Board of Directors of the Corporation may further
classify or reclassify any unissued Shares into a Class or Series thereof
(whether or not such Shares have been previously classified or reclassified into
a Class or a Series thereof) from time to time by setting or changing the
preferences, conversion, or other rights, voting powers, designations,
restrictions, limitations as to dividends, qualifications, or terms or
conditions of redemption of such unissued Shares.
(c) The Shares of each Class may be further classified by the Board of
Directors into one or more series (individually a "Series" and collectively,
together with any other series within any Class, the "Series") with such
relative rights and preferences as shall be contained in Articles Supplementary
filed with the State Department of Assessments and Taxation of the State of
Maryland. All Series of a particular Class of the Corporation shall represent
the same interest in the Corporation and have identical voting, dividend,
liquidation, and other rights of any other Shares of such Class, except that the
shares of each Series within a Class 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 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
Series within such Class, and all of the charges and expenses to which a Series
is subject shall be borne by such Series 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 Series.
(d) A description of the relative preferences, conversion, and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption of all Classes of Shares
is as follows, unless otherwise set forth in Articles Supplementary filed with
the State Department of Assessments and Taxation of the State of Maryland
describing any further Class or Classes from time to time created by the Board
of Directors of the Corporation:
(i) Assets Belonging to a Class. All consideration received by
the Corporation for the issue or sale of Shares of a particular Class,
together with all assets in which such consideration is invested or
reinvested, all income, earnings, profits, and proceeds thereof,
including any proceeds received from the sale, exchange, or liquidation
of such assets, and any funds or payments derived from any reinvestment
of such proceeds in whatever form the same may be, shall irrevocably
belong to that Class for all purposes, subject only to the rights of
creditors, and shall be so recorded upon the books of account of the
Corporation. Such consideration, assets, income, earnings, profits, and
proceeds, including any proceeds derived from the sale, exchange, or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds, in whatever form the same may be
together with any General Assets (as hereinafter defined) allocated to
that Class as provided in the following sentence, are herein referred
to as "assets belonging to" that Class. In the event that there are any
assets, income, earnings, profits, or proceeds thereof, funds or
payments which are not readily identifiable as belonging to any
particular Class (collectively, "General Assets"), the Board of
Directors shall allocate such General Assets to and among any one or
more of the Classes created from time to time in the manner and on such
basis as the Board of Directors, in its sole discretion, deems fair and
equitable; and any General Assets so allocated to a particular Class
shall belong to that Class. Each such allocation by the Board of
Directors shall be conclusive and binding upon the stockholders of all
Classes for all purposes.
(ii) Liabilities Belonging to a Class. The assets belonging to
each particular Class shall be charged with the liabilities of the
Corporation in respect of that Class and with all expenses, costs,
charges, and reserves attributable to that Class, and such charges
shall be so recorded upon the books of account of the Corporation. Such
liabilities, expenses, costs, charges and reserves, together with any
General Liabilities (as hereinafter defined) allocated to that Class as
provided in the following sentence, so charged to that class are herein
referred to as "liabilities belonging to" that Class. In the event
there are any general liabilities, expenses, costs, charges, or
reserves of the Corporation which are not readily identifiable as
belonging to any particular Class (collectively, "General
Liabilities"), the Board of Directors shall allocate and charge such
General Liabilities to and among any one or more of the Classes created
from time to time in such manner and on such basis as the Board of
Directors, in its sole discretion, deems fair and equitable; and any
General Liabilities so allocated and charged to a particular Class
shall belong to that Class. Each such allocation by the Board of
Directors shall be conclusive and binding upon the stockholders of all
Classes for all purposes.
(iii) Dividends and Distributions: Dividends and distributions
on Shares of a particular Class may be paid to the holders of Shares of
that Class at such times, in such manner and from such of the income
and capital gains, accrued or realized, from the assets belonging to
that Class, after providing for actual and accrued liabilities
belonging to that Class, as the Board of Directors may determine.
(iv) Liquidation. In the event of the liquidation or
dissolution of the Corporation, the stockholders of each Class that has
been created shall be entitled to receive, as a Class, when and as
declared by the Board of Directors, the excess of the assets belonging
to that Class over the liabilities belonging to that Class. The assets
so distributable to the stockholders of any particular Class shall be
distributed among the stockholders in proportion to the number of
Shares of that Class held by them and recorded on the books of the
Corporation.
(v) Voting. ON each matter submitted to a vote of the
stockholders, each holder of a Share shall be entitled to one vote for
each such Share standing in his name on the books of the Corporation,
irrespective of the Class thereof, and all Shares of all Classes shall
vote as a single class ("Single Class Voting"); provided, however, that
(A) as to any matter with respect to which a separate vote of any Class
is required by the 1940 Act or would be required under the General
Corporation Law of the State of Maryland, such requirements as to a
separate vote by that Class shall apply in lieu of Single Class Voting
as described above; (B) in the event that the separate vote
requirements referred to in (A) above apply with respect to one or more
Classes, then, subject to (C) below, the Shares of all other Classes
shall vote as a single class; (C) as to any matter which does not
affect the interest of a particular Class, only the holders of Shares
of the one or more affected Classes shall be entitled to vote; and (D)
as to any matter which affects only a particular Series, only the
holders of the Shares of the affected Series shall be entitled to vote
and, if permitted by the 1940 Act and any other applicable law, the
Series of more than one Class may vote together as a single class on
any such matter which shall have the same effect on each Series.
(e) The Corporation shall not be obligated to issue certificates
representing shares of any Class or Series of capital stock. At the time of
issue or transfer of Shares without certificates, the Corporation shall provide
the stockholder with such information as may be required under the Maryland
General Corporation Law.
Section 2. Subject to compliance with the requirements of the 1940 Act,
the Board of Directors shall have the authority to provide that Shares of any
Series shall be convertible (automatically, optionally, or otherwise) into
Shares of one or more other Series in accordance with such requirements and
procedures as may be established by the Board of Directors.
Section 3. The presence in person or by proxy of the holders of record
of 30% of the Shares of all Classes issued and outstanding entitled to vote
thereat shall constitute a quorum for the transaction of any 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
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. If, however, a quorum with respect to all Classes, a Separate Class or a
Combined Class, as the case may be, shall not be present or represented at any
meeting of stockholders, the holders of a majority of the Shares of all Classes,
such Separate Class or such Combined Class, as the case may be, present in
person or by proxy and entitled to vote shall have power to adjourn the meeting
from time to time (to a date or dates not more than 120 days after the original
record date) as to all Classes, such Separate Class or such Combined Class, as
the case may be, without notice other than announcement at the meeting, until
the requisite number of Shares entitled to vote at such meeting shall be
present. At such adjourned meeting at which the requisite number of Shares
entitled to vote thereat shall be represented any business may be transacted
which might have been transacted at the meeting as originally notified. The
absence from any meeting of stockholders of the number of Shares in excess of
30% of the Shares of all Classes or of the affected Class or Classes or Series
thereof, as the case may be, which may be required by the laws of the State of
Maryland, the 1940 Act, any other applicable law or these Articles of
Incorporation, for action upon any given matter shall not prevent action at such
meeting upon any other matter or matters which may properly come before the
meeting, if there shall be present thereat, in person or by proxy, holders of
the number of Shares required for action in respect of such other matter or
matters. Notwithstanding any provision of the General Corporation Law of the
State of Maryland requiring that any action be taken or authorized by the
affirmative vote of the holders of a designated proportion greater than a
majority of the shares or votes entitled to be cast, such action shall be
effective and valid if taken or authorized by the affirmative vote of the
holders of a majority of the total number of shares outstanding and entitled to
vote thereon. When such shares are voted by individual Class or Series, any such
action shall be effective and valid if taken or authorized by the affirmative
vote of the holders of a majority of the total number of shares of such Class or
Series outstanding and entitled to vote thereon.
Section 4. All Shares now or hereafter authorized shall be subject to
redemption and redeemable at the option of the stockholder, in the sense used in
the General Corporation Law of the State of Maryland. Each holder of a Share of
any Class (or Series thereof), upon request to the Corporation accompanied by
surrender of the appropriate stock certificate or certificates, if any, in
proper form for transfer, shall be entitled to require the Corporation to redeem
all or any part of the Shares of that Class (or Series thereof) standing in the
name of such holder on the books of the Corporation at a redemption price per
Share based on the net asset value per Share of that Class (or Series thereof)
determined in accordance with Section 4 of Article VI hereof. Nothing herein
shall prohibit the Corporation from imposing, at the time of the redemption of
Shares of any Class or Series thereof, a fee or sales charge provided that such
fee or sales charge has been duly adopted by the Board of Directors and is
permitted under the applicable provisions of the 1940 Act and applicable rules
of the NASD.
Section 5. All Shares now or hereafter authorized shall be subject to
redemption and redeemable at the option of the Corporation. The Board of
Directors may by resolution from time to time authorize the Corporation to
require the redemption of all or any part of the outstanding Shares of any Class
(or Series thereof) upon the sending of written notice thereof to each
stockholder any of whose Shares of that Class (or Series thereof) are so
redeemed and upon such terms and conditions as the Board of Directors shall deem
advisable, out of funds legally available thereof, at a redemption price per
Share based on the net asset value per Share of that Class (or Series thereof)
determined in accordance with Section 4 of Article VI hereof and to take all
other steps deemed necessary or advisable in connection therewith. The
Corporation shall have the right to require the redemption of all Shares owned
or held by any one stockholder and having an aggregate net asset value, as
determined at any time in accordance with Article VI hereof, of less than
$500.00, or such other minimum as the Board of Directors may from time to time
established in its discretion.
Section 6. The Board of Directors may by resolution from time to time
authorize the repurchase by the Corporation, either directly or through an
agent, of Shares of any Class upon such terms and conditions and for such
consideration as the Board of Directors shall deem advisable, out of funds
legally available therefor, at prices per Share not in excess of the net asset
value per Share of that Class determined in accordance with Section 4 of Article
VI hereof and to take all other steps deemed necessary or advisable in
connection therewith.
Section 7. Except as otherwise permitted by the 1940 Act, payment of
the redemption or repurchase price of Shares surrendered to the Corporation for
redemption pursuant to the provisions of Section 4 or 5 of this Article IV or
for repurchase by the Corporation pursuant to the provisions of Section 6 of
this Article IV shall be made by the Corporation within seven days after
surrender of such Shares to the Corporation for such purpose. Any such payment
may be made in whole or in part in portfolio securities or in cash, as the Board
of Directors shall deem advisable, and no stockholder shall have the right,
other than as determined by the Board of Directors, to have his Shares redeemed
or repurchased in portfolio securities.
Section 8. No holder of Shares shall, as such holder, have any
preemptive right to purchase or subscribe for any part of any new or additional
issue of stock of any Class, or of rights or options to purchase any stock, or
of securities convertible into, or carrying rights or options to purchase, stock
of any Class, whether now or hereafter authorized or whether issued for money,
for a consideration other than money or by way of a dividend or otherwise, and
all such rights are hereby waived by each holder of capital stock of any other
Class of stock or securities of the Corporation that may hereafter be created.
Section 9. All persons who shall acquire any of the Shares shall
acquire the same subject to the provisions of these Articles of Incorporation.
Section 10. The Corporation shall not be required to hold an annual
meeting of stockholders in any year unless such meeting is required under the
1940 Act, including any regulation thereunder.
ARTICLE V
DIRECTORS
Section 1. The Bylaws of the Corporation may fix the number of
directors and may authorize the Board of Directors to increase or decrease the
number of directors within a limit specified by the Bylaws, and to fill the
vacancies created by any such increase in the number of directors. Unless
otherwise provided by the Bylaws of the Corporation, the directors of the
Corporation need not be stockholders.
Section 2. The Bylaws of the Corporation may divide the Directors of
the Corporation into classes and prescribe the tenure of office of the several
classes.
Section 3. The Bylaws of the Corporation shall provide the number of
directors which shall constitute a quorum; provided, that in no event shall a
quorum be less than one-third of the entire Board of Directors nor less than two
directors.
Section 4. Stockholders of the Corporation may remove a Director by the
affirmative vote of a majority of the Corporation's outstanding Shares.
ARTICLE VI
MANAGEMENT OF THE AFFAIRS OF THE CORPORATION
Section 1. The Board of Directors shall have the general management and
control of the business and property of the Corporation, and may exercise all
the powers of the Corporation, except such as are by statute or by these
Articles of Incorporation or by the Bylaws conferred upon or reserved to the
stockholders. The Corporation may in its Bylaws confer powers on the Board of
Directors in addition to the powers expressly conferred by statute.
Section 2. The Board of Directors shall have the power to adopt, alter,
or repeal the Bylaws of the Corporation except to the extent that the Bylaws
otherwise provide.
Section 3. The Board of Directors shall have the power from time to
time to determine whether and to what extent, at what times and places, and
under what conditions and regulations, the accounts and books of the Corporation
or any of them shall be open to the inspection of stockholders, and no
stockholder shall have any right to inspect any account, book or document of the
Corporation except to the extent required by statute or permitted by the Bylaws.
Section 4. The Board of Directors shall have the power to determine, as
provided in these Articles of Incorporation, or if provision is not made herein,
in accordance with generally accepted accounting principles, what constitutes
net income, total assets, and the net asset value of the Shares of each Class of
the Corporation, and of the Shares of each Series of such Class. Any such
determination made in good faith shall be final and conclusive, and shall be
binding upon the Corporation, and all holders of shares of each Series of each
Class (past, present, and future), and Shares of each Class are issued and sold
on the condition and undertaking, evidenced by acceptance of certificates for
such Shares by, or confirmation of such Shares being held for the account of,
any stockholder, that any and all such determinations shall be binding as
aforesaid. Nothing in this Section 4 shall be construed to protect any director
or officer of the Corporation against any liability to the Corporation or its
stockholders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of his office.
Section 5. The Board of Directors shall have the power to authorize
additional shares of stock and provide for the issuance and sale of shares of
the stock of the Corporation.
ARTICLE VII
INDEMNIFICATION; LIABILITY
Section 1. Each present or former director, officer, agent and employee
of the Corporation or any predecessor or constituent corporation, and each
person who, at the request of the Corporation, serves or served another business
enterprise in any such capacity, and the heirs and personal representatives of
each of the foregoing shall be indemnified by the Corporation to the fullest
extent permitted by law against all expenses, including without limitation
amounts of judgments, fines, amounts paid in settlement, attorneys' and
accountants' fees, and costs of litigation, which shall necessarily or
reasonably be incurred by him or her in connection with any action, suit or
proceeding to which he or she was, is or shall be a party, or with which he or
she may be threatened, by reason of his or her being or having been a director,
officer, agent or employee of the Corporation or such predecessor or constituent
corporation or such business enterprise, whether or not he or she continues to
be such at the time of incurring such expenses. Such indemnification may include
without limitation the purchase of insurance and advancement of any expenses,
and the Corporation shall be empowered to enter into agreements to limit the
liability of directors and officers of the Corporation. No indemnification shall
be made in violation of the General Corporation Law of the State of Maryland or
the 1940 Act.
Section 2. No director or officer of the Corporation shall be liable to
the Corporation or its stockholders for money damages, except (i) to the extent
that it is proved that such director or officer actually received an improper
benefit or profit in money, property or services, for the amount of the benefit
or profit in money, property or services actually received, or (ii) to the
extent that a judgment or other final adjudication adverse to such director or
officer is entered in a proceeding based on a finding in the proceeding that
such director's or officer's action, or failure to act, was the result of active
and deliberate dishonesty and was material to the cause of action adjudicated in
the proceeding. The foregoing shall not be construed to protect or purport to
protect any director or officer of the Corporation against any liability to the
Corporation or its stockholders to which such director or officer would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of such
office.
ARTICLE VIII
PERPETUAL EXISTENCE
The duration of the Corporation shall be perpetual.
ARTICLE IX
AMENDMENTS
The Corporation reserves the right from time to time to make any
amendments of its charter which may now or hereafter be authorized by law,
including any amendments changing the terms or contract rights, as expressly set
forth in its charter, of any of its outstanding stock by classification,
reclassification, or otherwise.
----------------------------
The terms "Articles of Incorporation" as used herein and in the Bylaws
of the Corporation shall be deemed to mean these Articles of Incorporation as
from time to time amended, restated, or supplemented.
----------------------------
SECOND: (a) As of immediately before the amendment, the total number of
shares of stock of all classes that the Corporation had authority to issue is
twelve billion (12,000,000,000) shares, all of which are shares of common stock
(par value $.001 per share), and such shares had an aggregate par value of
twelve million dollars ($12,000,000).
(b) As amended, the total number of shares of stock of all classes
which the Corporation has authority to issue is one hundred twenty billion
(120,000,000,000) shares, all of which are shares of common stock (par value
$.0001 per share), and such shares have an aggregate par value of twelve million
dollars ($12,000,000).
(c) Because the amendment effects a change in the par value of each
authorized share of the Corporation's common stock from $.001 per share to
$.0001 per share, the Corporation's charter is hereby amended by changing and
reclassifying each of the shares of the Corporation's common stock (par value
$.001 per share) into one share of common stock (par value $.0001 per share),
and by transferring from the common stock account of the Corporation to the
capital in excess of par value account $.0009 for each share of common stock
which is issued and outstanding at the effective time of this amendment.
THIRD: The foregoing Articles of Amendment and Restatement have been
advised by the Board of Directors and approved by the stockholders of the
Corporation.
IN WITNESS WHEREOF, the Corporation has caused these presents to be
signed in its name and on its behalf by its President and witnessed on January
21, 1994.
FIRST AMERICAN INVESTMENT FUNDS,INC.
WITNESS:
By /s/ Robert A. Nesher
Robert A. Nesher, President
/s/ (Illegible)
Assistant Secretary
THE UNDERSIGNED, President of the Corporation, who executed on behalf of
the Corporation the foregoing Articles of Amendment and Restatement of which
this certificate is made a part, hereby acknowledges in the name and on behalf
of said Corporation the foregoing Articles of Amendment and Restatement to be
the corporate act of said Corporation and hereby certifies that to the best of
his knowledge, information, and belief the matters and facts set forth therein
with respect to the authorization and approval thereof are true in all material
respects under the penalties of perjury.
/s/ Robert A. Nesher
Robert A. Nesher, President
- --------------------------------------------------------------------------------
STATE OF MARYLAND
I hereby certify that this is a true and complete copy of the 6 page document on
file in this office. DATED: 2-7-94.
STATE DEPARTMENT OF ASSESSMENTS AND TAXATION
BY: Leah Hamm-Curry
This stamp replaces our previous certification system. Effective: 10/84
- --------------------------------------------------------------------------------
FIRST AMERICAN INVESTMENT FUNDS, INC.
ARTICLES SUPPLEMENTARY
First American Investment Funds, Inc., a corporation organized under the
laws of the State of Maryland (the "Corporation"), does hereby file for record
with the State Department of Assessments and Taxation of Maryland the following
Articles Supplementary to its Articles of Incorporation:
FIRST: The Corporation is registered as an open-end investment company
under the Investment Company Act of 1940 (the "1940 Act"). As hereinafter set
forth, the Corporation has classified its authorized capital stock in accordance
with the Maryland General Corporation Law.
SECOND: Immediately before the classifications hereinafter set forth, the
Corporation had authority to issue one hundred twenty billion (120,000,000,000)
shares of common stock (individually, a "Share"and collectively, the "Shares"),
of the par value of $.0001 per Share and of the aggregate par value of twelve
million dollars ($12,000,000), classified as follows:
(1) Class A Common Shares (formerly referred to as "government
bond fund shares"): Two billion (2,000,000,000) Shares.
(2) Class B Common Shares (formerly referred to as "fixed
income fund shares"): Two billion (2,000,000,000) Shares.
(3) Class C Common Shares (formerly referred to as municipal
bond fund shares"): Two billion (2,000,000,000) Shares.
(4) Class D Common Shares (formerly referred to as "stock fund
shares"): Two billion (2,000,000,000) Shares.
(5) Class E Common Shares (formerly referred to as "special
equity fund shares"): Two billion (2,000,000,000) Shares.
(6) Class F Common Shares (formerly referred to as "asset
allocation fund shares"): Two billion (2,000,000,000) Shares.
(7) Class G Common Shares (formerly referred to as "balance
fund shares"): Two billion (2,000,000,000) Shares.
(8) Class H Common Shares (formerly referred to as "equity
index fund shares"): Two billion (2,000,000,000) Shares.
(9) Class I Common Shares (formerly referred to as
"intermediate term income fund shares"): Two billion (2,000,000,000)
Shares.
(10) Class J Common Shares (formerly referred to as "limited
term income fund shares"): Two billion (2,000,000,000) Shares.
(11) Class K Common Shares (formerly referred to as "mortgage
securities fund shares"): Two billion (2,000,000,000) Shares.
(12) Class L Common Shares (formerly referred to as "regional
equity fund shares"): Two billion (2,000,000,000) Shares.
(13) Unclassified Shares: Ninety-six billion (96,000,000,000)
Shares.
THIRD: Pursuant to the authority contained in Article IV of the
Articles of Incorporation of the Corporation and Section 2-208 of the Maryland
General Corporation Law, the Board of Directors of the Corporation, by
resolution adopted at a meeting held on December 7, 1993, classified the
following additional Shares out of the authorized, unissued and unclassified
Shares of the Corporation:
(1) Class A, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(2) Class B, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(3) Class C, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(4) Class D, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(5) Class E, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(6) Class F, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(7) Class G, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(8) Class H, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(9) Class I, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(10) Class J, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(11) Class K, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(12) Class L, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(13) Class M Common Shares: Two billion (2,000,000,000)
Shares.
(14) Class M, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(15) Class N Common Shares: Two billion (2,000,000,000)
Shares.
(16) Class N, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(17) Class O Common Shares: Two billion (2,000,000,000)
Shares.
(18) Class O, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(19) Class P Common Shares: Two billion (2,000,000,000)
Shares.
(20) Class P, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(21) Class Q Common Shares: Two billion (2,000,000,000)
Shares.
(22) Class Q, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
FOURTH: The Shares classified pursuant to THIRD above shall have the
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption, set forth in the Corporation's Articles of Incorporation. Any Class
or Series of Shares classified pursuant to THIRD above 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 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, and all of the charges and expenses to which such a Class or
Series is subject shall be borne by such Class or Series 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 or Series.
FIFTH: Immediately after the classifications hereinbefore set forth and
upon filing for record of these Articles Supplementary, the Corporation has
authority to issue one hundred twenty billion (120,000,000,000) shares of common
stock (individually, a "Share" and collectively, the "Shares"), of the par value
of $.0001 per Share and of the aggregate par value of twelve million dollars
($12,000,000), classified as follows:
(1) Class A Common Shares (formerly referred to as "government
bond fund shares"): Two billion (2,000,000,000) Shares.
(2) Class A, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(3) Class B Common Shares (formerly referred to as "fixed
income fund shares"): Two billion (2,000,000,000) Shares.
(4) Class B, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(5) Class C Common Shares (formerly referred to as municipal
bond fund shares"): Two billion (2,000,000,000) Shares.
(6) Class C, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(7) Class D Common Shares (formerly referred to as "stock fund
shares"): Two billion (2,000,000,000) Shares.
(8) Class D, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(9) Class E Common Shares (formerly referred to as "special
equity fund shares"): Two billion (2,000,000,000) Shares.
(10) Class E, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(11) Class F Common Shares (formerly referred to as "asset
allocation fund shares"): Two billion (2,000,000,000) Shares.
(12) Class F, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(13) Class G Common Shares (formerly referred to as "balance
fund shares"): Two billion (2,000,000,000) Shares.
(14) Class G, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(15) Class H Common Shares (formerly referred to as "equity
index fund shares"): Two billion (2,000,000,000) Shares.
(16) Class H, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(17) Class I Common Shares (formerly referred to as
"intermediate term income fund shares"): Two billion (2,000,000,000)
Shares.
(18) Class I, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(19) Class J Common Shares (formerly referred to as "limited
term income fund shares"): Two billion (2,000,000,000) Shares.
(20) Class J, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(21) Class K Common Shares (formerly referred to as "mortgage
securities fund shares"): Two billion (2,000,000,000) Shares.
(22) Class K, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(23) Class L Common Shares (formerly referred to as "regional
equity fund shares"): Two billion (2,000,000,000) Shares.
(24) Class L, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(25) Class M Common Shares: Two billion (2,000,000,000)
Shares.
(26) Class M, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(27) Class N Common Shares: Two billion (2,000,000,000)
Shares.
(28) Class N, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(29) Class O Common Shares: Two billion (2,000,000,000)
Shares.
(30) Class O, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(31) Class P Common Shares: Two billion (2,000,000,000)
Shares.
(32) Class P, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(33) Class Q Common Shares: Two billion (2,000,000,000)
Shares.
(34) Class Q, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(35) Unclassified Shares: Fifty-two billion (52,000,000,000)
Shares.
SIXTH: The aforesaid action by the Board of Directors of the
Corporation was taken pursuant to authority and power contained in the Articles
of Incorporation of the Corporation.
IN WITNESS WHEREOF, the Corporation has caused these Articles
Supplementary to be signed in its name and on its behalf by its President and
witnessed on January 21, 1994.
First American Investment Funds, Inc.
By /s/ Robert A. Nesher
Robert A. Nesher, President
WITNESS:
/s/ (Illegible)
Assistant Secretary
- --------------------------------------------------------------------------------
STATE OF MARYLAND
I hereby certify that this is a true and complete copy of the 7 page document on
file in this office. DATED: 8-1-94.
STATE DEPARTMENT OF ASSESSMENTS AND TAXATION
BY: /s/ Paula Cary McLean
This stamp replaces our previous certification system. Effective 10/84
- --------------------------------------------------------------------------------
FIRST AMERICAN INVESTMENT FUNDS, INC.
ARTICLES SUPPLEMENTARY
Final
First American Investment Funds, Inc., a corporation organized under the
laws of the State of Maryland (the "Corporation"), does hereby file for record
with the State Department of Assessments and Taxation of Maryland the following
Articles Supplementary to its Articles of Incorporation:
FIRST: The Corporation is registered as an open-end investment company
under the Investment Company Act of 1940 (the "1940 Act"). As hereinafter set
forth, the Corporation has classified its authorized capital stock in accordance
with the Maryland General Corporation Law.
SECOND: Immediately before the classifications hereinafter set forth,
the Corporation had authority to issue one hundred twenty billion
(120,000,000,000) shares of common stock (individually, a "Share" and
collectively, the "Shares"), of the par value of $.0001 per Share and of the
aggregate par value of twelve million dollars ($12,000,000), classified as
follows:
(1) Class A Common Shares (formerly referred to as "government
bond fund shares"): Two billion (2,000,000,000) Shares.
(2) Class A, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(3) Class B Common Shares (formerly referred to as "fixed
income fund shares"): Two billion (2,000,000,000) Shares.
(4) Class B, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(5) Class C Common Shares (formerly referred to as "municipal
bond fund shares"): Two billion (2,000,000,000) Shares.
(6) Class C, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(7) Class D Common Shares (formerly referred to as "stock fund
shares"): Two billion (2,000,000,000) Shares.
(8) Class D, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(9) Class E Common Shares (formerly referred to as "special
equity fund shares"): Two billion (2,000,000,000) Shares.
(10) Class E, Series 2 Common Shares:: Two billion
(2,000,000,000) Shares.
(11) Class F Common Shares (formerly referred to as "asset
allocation fund shares"): Two billion (2,000,000,000) Shares.
(12) Class F, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(13) Class G Common Shares (formerly referred to as "balanced
fund shares"): Two billion (2,000,000,000) Shares.
(14) Class G, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(15) Class H Common Shares (formerly referred to as "equity
index fund shares"): Two billion (2,000,000,000) Shares.
(16) Class H, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(17) Class I Common Shares (formerly referred to as
"intermediate term income fund shares"): Two billion (2,000,000,000)
Shares.
(18) Class I, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(19) Class J Common Shares (formerly referred to as "limited
term income fund shares"): Two billion (2,000,000,000) Shares.
(20) Class J, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(21) Class K Common Shares (formerly referred to as "mortgage
securities fund shares"): Two billion (2,000,000,000) Shares.
(22) Class K, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(23) Class L Common Shares (formerly referred to as "regional
equity fund shares"): Two billion (2,000,000,000) Shares.
(24) Class L, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(25) Class M Common Shares: Two billion (2,000,000,000)
Shares.
(26) Class M, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(27) Class N Common Shares: Two billion (2,000,000,000)
Shares.
(28) Class N, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(29) Class O Common Shares: Two billion (2,000,000,000)
Shares.
(30) Class O, Series 2 Common Shares:: Two billion
(2,000,000,000) Shares.
(31) Class P Common Shares: Two billion (2,000,000,000)
Shares.
(32) Class P, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(33) Class Q Common Shares: Two billion (2,000,000,000)
Shares.
(34) Class Q, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(35) Unclassified Shares: Fifty-two billion (52,000,000,000)
Shares.
THIRD: Pursuant to the authority contained in Article IV of the Articles
of Incorporation of the Corporation and Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation, by resolution
adopted at a meeting held on June 8, 1994, classified the following additional
Shares out of the authorized, unissued and unclassified Shares of the
Corporation:
(1) Class A, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(2) Class B, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(3) Class C, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(4) Class D, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(5) Class E, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(6) Class F, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(7) Class G, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(8) Class H, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(9) Class I, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(10) Class J, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(11) Class K, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(12) Class L, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(13) Class M, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(14) Class N, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(15) Class O, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(16) Class P, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(17) Class Q, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(18) Class R Common Shares: Two billion (2,000,000,000)
Shares.
(19) Class R, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(20) Class R, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
FOURTH: The Shares classified pursuant to THIRD above shall have the
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption, set forth in the Corporation's Articles of Incorporation. Any Class
or Series of Shares classified pursuant to THIRD above 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 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, and all of the charges and expenses to which such a Class or
Series is subject shall be borne by such Class or Series 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 or Series.
FIFTH: Immediately after the classifications hereinbefore set forth and
upon filing for record of these Articles Supplementary, the Corporation has
authority to issue one hundred twenty billion (120,000,000,000) shares of common
stock (individually, a "Share" and collectively, the "Shares"), of the par value
of $.0001 per Share and of the aggregate par value of twelve million dollars
($12,000,000), classified as follows:
(1) Class A Common Shares (formerly referred to as "government
bond fund shares"): Two billion (2,000,000,000) Shares.
(2) Class A, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(3) Class A, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(4) Class B Common Shares (formerly referred to as "fixed
income fund shares"): Two billion (2,000,000,000) Shares.
(5) Class B, Series 2 Common Shares:: Two billion
(2,000,000,000) Shares.
(6) Class B, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(7) Class C Common Shares (formerly referred to as "municipal
bond fund shares"): Two billion (2,000,000,000) Shares.
(8) Class C, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(9) Class C, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(10) Class D Common Shares (formerly referred to as "stock
fund shares"): Two billion (2,000,000,000) Shares.
(11) Class D, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(12) Class D, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(13) Class E Common Shares (formerly referred to as "special
equity fund shares"): Two billion (2,000,000,000) Shares.
(14) Class E, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(15) Class E, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(16) Class F Common Shares (formerly referred to as "asset
allocation fund shares"): Two billion (2,000,000,000) Shares.
(17) Class F, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(18) Class F, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(19) Class G Common Shares (formerly referred to as "balanced
fund shares"): Two billion (2,000,000,000) Shares.
(20) Class G, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(21) Class G, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(22) Class H Common Shares (formerly referred to as "equity
index fund shares"): Two billion (2,000,000,000) Shares.
(23) Class H, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(24) Class H, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(25) Class I Common Shares (formerly referred to as
"intermediate term income fund shares"): Two billion (2,000,000,000)
Shares.
(26) Class I, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(27) Class I, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(28) Class J Common Shares (formerly referred to as "limited
term income fund shares"): Two billion (2,000,000,000) Shares.
(29) Class J, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(30) Class J, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(31) Class K Common Shares (formerly referred to as "mortgage
securities fund shares"): Two billion (2,000,000,000) Shares.
(32) Class K, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(33) Class K, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(34) Class L Common Shares (formerly referred to as "regional
equity fund shares"): Two billion (2,000,000,000) Shares.
(35) Class L, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(36) Class L, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(37) Class M Common Shares: Two billion (2,000,000,000)
Shares.
(38) Class M, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(39) Class M, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(40) Class N Common Shares: Two billion (2,000,0000,000)
Shares.
(41) Class N, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(42) Class N, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(43) Class O Common Shares: Two billion (2,000,000,000)
Shares.
(44) Class O, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(45) Class O, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(46) Class P Common Shares: Two billion (2,000,000,000)
Shares.
(47) Class P, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(48) Class P, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(49) Class Q Common Shares: Two billion (2,000,000,000)
Shares.
(50) Class Q, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(51) Class Q, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(52) Class R Common Shares: Two billion (2,000,000,000)
Shares.
(53) Class R, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(54) Class R, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(55) Unclassified Shares: Twelve billion (12,000,000,000)
Shares.
SIXTH: The aforesaid action by the Board of Directors of the
Corporation was taken pursuant to authority and power contained in the Articles
of Incorporation of the Corporation.
IN WITNESS WHEREOF, the Corporation has caused these Articles
Supplementary to be signed in its name and on its behalf by its President and
witnessed by its Secretary on July 29, 1994.
First American Investment Funds, Inc.
By /s/ David Lee
David Lee, President
WITNESS:
/s/ Michael J. Radmer
Michael J. Radmer, Secretary
STATE OF MARYLAND
WILLIAM DONALD SCHAEFER
Governor
LLOYD W. JONES
Director
PAUL B. ANDERSON
Administrator
Department of Assessments and Taxation
CHARTER DIVISION
Room 809
301 West Preston Street
Baltimore, Maryland 21201
DOCUMENT CODE 16D BUSINESS CODE COUNTY 74
------- ------- --------
# D2399426 P.A. Religious Close Stock Nonstock
---------- ---- ---- ---- ---- ----
Merging Surviving
(Transferee) (Transferor)
---------------------- ------------------------
- ----------------------------------- ------------------------------------
- ----------------------------------- ------------------------------------
- ----------------------------------- ------------------------------------
CODE AMOUNT FEE REMITTED (New Name) ----------------------
10 50 Expedited Fee ---------------------------------
-----
20 Organ. & Capitalization ---------------------------------
-----
61 Rec. Fee (Arts. of Inc.) Change of Name
----- -----
62 20 Rec. Fee (Amendment) Change of Principal Office
----- -----
63 Rec. Fee (Merger, Consol.) Change of Resident Agent
----- -----
64 Rec. Fee (Transfer) Change of Resident Agent
----- ----- Address
65 Rec. Fee (Dissolution) Resignation of Resident
----- ----- Agent
66 Rec. Fee (Revival) Designation of Resident
----- ----- Agent and Resident Agent's
52 Foreign Qualification Address
----- Other Change
50 Cert. of Qual. or Reg. ----- ------------
-----
51 Foreign Name Registration -------------------------
-----
13 13 1 Certified Copy 6p
----- ---- ----
56 Penalty
-----
54 For. Supplemental Cert.
-----
53 Foreign Resolution
-----
73 Certificate of Conveyance
-----
-------------------------
-------------------------
-------------------------
75 Special Fee
-----
80 For. Limited Partnership
-----
83 Cert. Limited Partnership CODE 007
----- ---------
84 Amendment to Limited Partnership
-----
85 Termination of Limited Partnership
-----
21 Recordation Tax ATTENTION:
----- ------------
22 State Transfer Tax
----- -----------------------
23 Local Transfer Tax
----- -----------------------
31 Corp. Good Standing
----- -------
NA Foreign Corp. Registration MAIL TO ADDRESS:
----- ------
87 Limited Part. Good Standing
----- ------- -----------------------
71 Financial
----- -----------------------
600 Personal
----- -------------------- -----------------------
Property Reports and
late filing penalties ------- -----------------------
70 Change of P.O., R.A. or R.A.A.
-----
91 Amend/Cancellation, For. Limited Part.
-----
99 Art. of Organization (LLC)
-----
95 LLC Amend, Diss, Continuation
-----
97 LLC Cancellation
-----
96 Reg. Foreign LLC
-----
94 Foreign LLC Supplemental
-----
92 LLC Good Standing (short)
----- --------
- --- Other
----- -------------------------
TOTAL 82
FEES -----
x Check Cash NOTE:
---- ----
1 Documents on 3 checks
- ----- -----
APPROVED BY: /s/ NS
ARTICLES OF REVIVAL
FOR
FIRST AMERICAN INVESTMENT FUNDS, INC.
First American Investment Funds, Inc. (the "Corporation") does hereby
certify to the State Department of Assessments and Taxation of Maryland that:
FIRST: The name of the Corporation at the time the charter was
forfeited was First American Investment Funds, Inc.
SECOND: The name which the Corporation will use after revival is First
American Investment Funds, Inc.
THIRD: The address of the principal office of the Corporation in the
State of Maryland is:
First American Investment Funds, Inc.
c/o The Corporation Trust Incorporated
32 South Street
Baltimore, Maryland 21202
FOURTH: The name and address of the resident agent of the Corporation
in the State of Maryland is:
The Corporation Trust Incorporated
32 South Street
Baltimore, Maryland 21202
FIFTH: These Articles of Revival are for the purpose of reviving the
charter of the Corporation.
SIXTH: At or prior to the filing of these Articles of Revival, the
Corporation has (a) paid all fees required by law; (b) filed all annual reports
which should have been filed by the Corporation if its charter had not been
forfeited; (c) paid all state and local taxes, except taxes on real estate, and
all interest and penalties due by the Corporation or which would have become due
if the charter had not been forfeited whether or not barred by limitations.
The undersigned, who were respectively the last acting Vice President
and Secretary of the Corporation, severally acknowledge the Articles to be their
act.
/s/ Kathryn L. Stanton
Kathryn L. Stanton
Vice President
1/31/95 at 2:55 __.m. /s/ Michael J. Radmer
Michael J. Radmer
Secretary
AFFIDAVIT FOR REVIVAL OF A CHARTER
I, Kathryn L. Stanton of First American Investment Funds, Inc., hereby
declare that the previously mentioned Corporation has paid all State and local
taxes except taxes on real estate, and all interest and penalties due by the
Corporation or which would have become due if the charter had not been forfeited
whether or not barred by limitations.
I hereby certify that on January 30th (insert date) before me, the
subscriber, a notary public of the State of Pennsylvania, in and for Chester
(insert name or county for which notary is appointed) personally appeared
Kathryn L. Stanton (insert name of person swearing) and made oath under the
penalties of perjury that the matters and facts set forth in this affidavit are
true to the best of his or her knowledge, information and belief.
As witness my hand and notarial seal
/s/ Christine L. Trecrod
(Signature of notary public)
My Commission expires 10/12/98.
-----------
----------------------------------------------
Notary Seal
Christine L. Trecrod, Notary Public
Tredythin Twp., Chester County
My Commission Expires Oct. 12, 1998
----------------------------------------------
Member, Pennsylvania Association of Notaries
FIRST AMERICAN INVESTMENT FUNDS, INC.
ARTICLES SUPPLEMENTARY
First American Investment Funds, Inc., a corporation organized under the
laws of the State of Maryland (the "Corporation"), does hereby file for record
with the State Department of Assessments and Taxation of Maryland the following
Articles Supplementary to its Articles of Incorporation:
FIRST: The Corporation is registered as an open-end investment company
under the Investment Company Act of 1940 (the "1940 Act"). As hereinafter set
forth, the Corporation has classified its authorized capital stock in accordance
with the Maryland General Corporation Law.
SECOND: Immediately before the classifications hereinafter set forth,
the Corporation had authority to issue one hundred twenty billion
(120,000,000,000) shares of common stock (individually, a "Share" and
collectively, the "Shares"), of the par value of $.0001 per Share and of the
aggregate par value of twelve million dollars ($12,000,000), classified as
follows:
(1) Class A Common Shares (formerly referred to as government
bond fund shares"): Two billion (2,000,000,000) Shares.
(2) Class A, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(3) Class A, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(4) Class B Common Shares (formerly referred to as "fixed
income fund shares"): Two billion (2,000,000,000) Shares.
(5) Class B, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(6) Class B, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(7) Class C Common Shares (formerly referred to as "municipal
bond fund shares"): Two billion (2,000,000,000) Shares.
(8) Class C, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(9) Class C, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(10) Class D Common Shares (formerly referred to as "stock
fund shares"): Two billion (2,000,000,000) Shares.
(11) Class D, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(12) Class D, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(13) Class E Common Shares (formerly referred to as "special
equity fund shares"): Two billion (2,000,000,000) Shares.
(14) Class E, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(15) Class E, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(16) Class F Common Shares (formerly referred to as "asset
allocation fund shares"): Two billion (2,000,000,000) Shares.
(17) Class F, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(18) Class F, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(19) Class G Common Shares (formerly referred to as "balanced
fund shares"): Two billion (2,000,000,000) Shares.
(20) Class G, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(21) Class G, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(22) Class H Common Shares (formerly referred to as "equity
index fund shares"): Two billion (2,000,000,000) Shares.
(23) Class H, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(24) Class H, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(25) Class I Common Shares (formerly referred to as
"intermediate term income shares"): Two billion (2,000,000,000) Shares.
(26) Class I, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(27) Class I, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(28) Class J Common Shares (formerly referred to as "limited
term income shares"): Two billion (2,000,000,000) Shares.
(29) Class J, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(30) Class J, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(31) Class K Common Shares (formerly referred to as "mortgage
securities, shares"): Two billion (2,000,000,000) Shares.
(32) Class K, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(33) Class K, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(34) Class L Common Shares (formerly referred to as "regional
equity fund shares"): Two billion (2,000,000,000) Shares.
(35) Class L, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(36) Class L, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(37) Class M Common Shares: Two billion (2,000,000,000)
Shares.
(38) Class M, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(39) Class M, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(40) Class N Common Shares: Two billion (2,000,000,000)
Shares.
(41) Class N, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(42) Class N, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(43) Class O Common Shares: Two billion (2,000,000,000)
Shares.
(44) Class O, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(45) Class O, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(46) Class P Common Shares: Two billion (2,000,000,000)
Shares.
(47) Class P, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(48) Class P, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(49) Class Q Common Shares: Two billion (2,000,000,000)
Shares.
(50) Class Q, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(51) Class Q, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(52) Class R Common Shares: Two billion (2,000,000,000)
Shares.
(53) Class R, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(54) Class R, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(55) Unclassified Shares: Twelve billion (12,000,000,000)
Shares.
THIRD: Pursuant to the authority contained in Sections 2-105(c) and
2-208.1 of the Maryland General Corporation Law, the Board of Directors of the
Corporation, by resolution adopted at a meeting held on December 7, 1994,
authorized an increase in the total authorized shares of the Corporation from
one hundred twenty billion (120,000,000,000) shares of common stock, of the par
value of $.0001 per share and of the aggregate par value of twelve million
dollars ($12,000,000), to two hundred billion (200,000,000,000) shares of common
stock, of the par value of $.0001 per share and of the aggregate par value of
twenty million dollars ($20,000,000).
FOURTH: Pursuant to the authority contained in Article IV of the
Articles of Incorporation of the Corporation and Section 2-208 of the Maryland
General Corporation Law, the Board of Directors of the Corporation, by
resolution adopted at a meeting held on December 7, 1994, classified the
following additional Shares out of the authorized, unissued and unclassified
Shares of the Corporation:
(1) Class S, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(2) Class S, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(3) Class S, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(4) Class T, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(5) Class T, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(6) Class T, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(7) Class U,, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(8) Class U, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(9) Class U, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
FIFTH: The Shares classified pursuant to FOURTH above shall have the
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption, set forth in the Corporation's Articles of Incorporation. Any Class
or Series of Shares classified pursuant to FOURTH above 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 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, and all of the charges and expenses to which such a Class or
Series is subjects shall be borne by such Class or Series 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 or Series.
SIXTH: Immediately after the classifications hereinbefore set forth and
upon filing for record of these Articles Supplementary, the Corporation has
authority to issue two hundred billion (200,000,000,000) shares of common stock
(individually, a "Share" and collectively, the "Shares"), of the par value of
$.0001 per Share and of the aggregate par value of twenty million dollars
($20,000,000), classified as follows:
(1) Class A Common Shares (formerly referred to as "government
bond fund shares"): Two billion (2,000,000,000) Shares.
(2) Class A, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(3) Class A, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(4) Class B Common Shares (formerly referred to as "fixed
income fund shares"): Two billion (2,000,000,000) Shares.
(5) Class B, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(6) Class B, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(7) Class C Common Shares (formerly referred to as "municipal
bond fund shares"): Two billion (2,000,000,000) Shares.
(8) Class C, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(9) Class C, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(10) Class D Common Shares (formerly referred to as "stock
fund shares"): Two billion (2,000,000,000) Shares.
(11) Class D, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(12) Class D, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(13) Class E Common Shares (formerly referred to as "special
equity fund shares"): Two billion (2,000,000,000) Shares.
(14) Class E, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(15) Class E, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(16) Class F Common Shares (formerly referred to as "asset
allocation fund shares"): Two billion (2,000,000,000) Shares.
(17) Class F, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(18) Class F, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(19) Class G Common Shares (formerly referred to as "balanced
fund shares"): Two billion (2,000,000,000) Shares.
(20) Class G, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(21) Class G, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(22) Class H Common Shares (formerly referred to as "equity
index fund shares"): Two billion (2,000,000,000) Shares.
(23) Class H, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(24) Class H, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(25) Class I Common Shares (formerly referred to as
"intermediate term income fund shares"): Two billion (2,000,000,000)
Shares.
(26) Class I, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(27) Class I, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(28) Class J Common Shares (formerly referred to as "limited
term income fund shares"): Two billion (2,000,000,000) Shares.
(29) Class J, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(30) Class J, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(31) Class K Common Shares (formerly referred to as "mortgage
securities fund shares"): Two billion (2,000,000,000) Shares.
(32) Class K, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(33) Class K, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(34) Class L Common Shares (formerly referred to as "regional
equity fund shares"): Two billion (2,000,000,000) Shares.
(35) Class L, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(36) Class L, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(37) Class M Common Shares: Two billion (2,000,000,000)
Shares.
(38) Class M, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(39) Class M, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(40) Class N Common Shares: Two billion (2,000,000,000)
Shares.
(41) Class N, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(42) Class N, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(43) Class O Common Shares: Two billion (2,000,000,000)
Shares.
(44) Class O, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(45) Class O, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(46) Class P Common Shares: Two billion (2,000,000,000)
Shares.
(47) Class P, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(48) Class P, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(49) Class Q Common Shares: Two billion (2,000,000,000)
Shares.
(50) Class Q, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(51) Class Q, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(52) Class R Common Shares: Two billion (2,000,000,000)
Shares.
(53) Class R, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(54) Class R, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(55) Class S Common Shares: Two billion (2,000,000,000)
Shares.
(56) Class S, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(57) Class S, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(58) Class T Common Shares: Two billion (2,000,000,000)
Shares.
(59) Class T, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(60) Class T, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(61) Class U Common Shares: Two billion (2,000,000,000)
Shares.
(62) Class U, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(63) Class U, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(64) Unclassified Shares: Seventy-four billion
(74,000,000,000) Shares.
SEVENTH: The aforesaid action by the Board of Directors of the
Corporation was taken pursuant to authority and power contained in the Articles
of Incorporation of the Corporation.
IN WITNESS WHEREOF, the Corporation has caused these Articles
Supplementary to be signed in its name and on its behalf by its President and
witnessed by its Secretary on January 25, 1995.
First American Investment Fund Inc.
By /s/ David Lee
David Lee, President
WITNESS:
/s/ Michael J. Radmer
Michael J. Radmer, Secretary
STATE OF MARYLAND
I hereby certify that this is a true and complete copy of the 8 page document
on file in this office. DATED: 6-23-95.
STATE DEPARTMENT OF ASSESSMENTS AND TAXATION
BY: (signature illegible) Custodian
This stamp replaces our previous certification system. Effective: 6/95
FIRST AMERICAN INVESTMENT FUNDS, INC.
ARTICLES SUPPLEMENTARY
First American Investment Funds, Inc., a corporation organized under the
laws of the State of Maryland (the "Corporation"), does hereby file for record
with the State Department of Assessments and Taxation of Maryland the following
Articles Supplementary to its Articles of Incorporation:
FIRST: The Corporation is registered as an open-end investment company
under the Investment Company Act of 1940 (the "1940 Act"). As hereinafter set
forth, the Corporation has classified its authorized capital stock in accordance
with the Maryland General Corporation Law.
SECOND: Immediately before the classifications hereinafter set forth,
the Corporation had authority to issue two hundred billion (200,000,000,000)
shares of common stock (individually, a "Share" and collectively, the "Shares"),
of the par value of $.0001 per Share and of the aggregate par value of twenty
million dollars ($20,000,000,000), classified as follows:
(1) Class A Common Shares (formerly referred to as "government
bond fund shares"): Two billion (2,000,000,000)) Shares.
(2) Class A, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(3) Class A, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(4) Class B Common Shares (formerly referred to as "fixed
income fund shares"): Two billion (2,000,000,000) Shares.
(5) Class B, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(6) Class B, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(7) Class C Common Shares (formerly referred to as "municipal
bond fund shares"): Two billion (2,000,000,000) Shares.
(8) Class C, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(9) Class C, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(10) Class D Common Shares (formerly referred to as "stock
fund shares"): Two billion (2,000,000,000) Shares.
(11) Class D, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(12) Class D, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(13) Class E Common Shares (formerly referred to as "special
equity fund shares"): Two billion (2,000,000,000) Shares.
(14) Class E, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(15) Class E, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(16) Class F Common Shares (formerly referred to as "asset
allocation fund shares"): Two billion (2,000,000,000) Shares.
(17) Class F, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(18) Class F, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(19) Class G Common Shares (formerly referred to as "balanced
fund shares"): Two billion (2,000,000,000) Shares.
(20) Class G, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(21) Class G, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(22) Class H Common Shares (formerly referred to as "equity
index fund shares"): Two billion (2,000,000,000) Shares.
(23) Class H, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(24) Class H, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(25) Class I Common Shares (formerly referred to as
"intermediate term income fund shares"): Two billion (2,000,000,000)
Shares.
(26) Class I, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(27) Class I, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(28) Class J Common Shares (formerly referred to as "limited
term income fund shares"): Two billion (2,000,000,000) Shares.
(29) Class J, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(30) Class J, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(31) Class K Common Shares (formerly referred to as "mortgage
securities fund shares"): Two billion (2,000,000,000) Shares.
(32) Class K, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(33) Class K, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(34) Class L Common Shares (formerly referred to as "regional
equity fund shares"): Two billion (2,000,000,000) Shares.
(35) Class L, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(36) Class L, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(37) Class M Common Shares: Two billion (2,000,000,000)
Shares.
(38) Class M, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(39) Class M, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(40) Class N Common Shares: Two billion (2,000,000,000)
Shares.
(41) Class N, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(42) Class N, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(43) Class O Common Shares: Two billion (2,000,000,000)
Shares.
(44) Class O, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(45) Class O, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(46) Class P Common Shares: Two billion (2,000,000,000)
Shares.
(47) Class P, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(48) Class P, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(49) Class Q Common Shares: Two billion (2,000,000,000)
Shares.
(50) Class Q, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(51) Class Q, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(52) Class R Common Shares: Two billion (2,000,000,000)
Shares.
(53) Class R, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(54) Class R, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(55) Class S Common Shares: Two billion (2,000,000,000)
Shares.
(56) Class S, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(57) Class S, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(58) Class T Common Shares: Two billion (2,000,000,000)
Shares.
(59) Class T, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(60) Class T, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(61) Class U Common Shares: Two billion (2,000,000,000)
Shares.
(62 Class U, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(63) Class U, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(64) Unclassified Shares: Seventy-four billion
(74,000,000,000) Shares.
THIRD: Pursuant to the authority contained in Article IV of the Articles
of Incorporation of the Corporation and Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation, by resolution
adopted at a meeting held on March 6, 1995, classified the following additional
Shares out of the authorized, unissued and unclassified Shares of the
Corporation:
(1) Class V Common Shares: Two billion (2,000,000,000) Shares.
(2) Class V, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(3) Class V, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
FOURTH: The Shares classified pursuant to THIRD above shall have the
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption, set forth in the Corporation's Articles of Incorporation. Any Class
or Series of Shares classified pursuant to THIRD above 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 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, and all of the charges and expenses to which such a Class or
Series is subject shall be borne by such Class or Series 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 or Series.
FIFTH: Immediately after the classifications hereinbefore set forth and
upon filing for record of these Articles Supplementary, the Corporation has
authority to issue two hundred billion (200,000,0OO,000) shares of common stock
(individually, a "Share" and collectively, the "Shares"), of the par value of
$.0001 per Share and of the aggregate par value of twenty million dollars
($20,000,000), classified as follows:
(1) Class A Common Shares (formerly referred to as "government
bond fund shares"): Two billion (2,000,000,000) Shares.
(2) Class A, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(3) Class A, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(4) Class B Common Shares (formerly referred to as "fixed
income fund shares"): Two billion (2,000,000,000) Shares.
(5) Class B, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(6) Class B, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(7) Class C Common Shares (formerly referred to as "municipal
bond fund shares"): Two billion (2,000,000,000) Shares.
(8) Class C, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(9) Class C, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(10) Class D Common Shares (formerly referred to as "stock
fund shares"): Two billion (2,000,000,000) Shares.
(11) Class D, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(12) Class D, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(13) Class E Common Shares (formerly referred to as "special
equity fund shares"): Two billion (2,000,000,000) Shares.
(14) Class E, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(15) Class E, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(16) Class F Common Shares (formerly referred to as "asset
allocation fund shares"): Two billion (2,000,000,000)) Shares.
(17) Class F, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(18) Class F, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(19) Class G Common Shares (formerly referred to as "balanced
fund shares"): Two billion (2,000,000,000) Shares.
(20) Class G, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(21) Class G, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(22) Class H Common Shares (formerly referred to as "equity
index fund shares"): Two billion (2,000,000,000) Shares.
(23) Class H, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(24) Class H, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(25) Class I Common Shares (formerly referred to as
"intermediate term income fund shares"): Two billion (2,000,000,000)
Shares.
(26) Class I, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(27) Class I, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(28) Class J Common Shares (formerly referred to as "limited
term income fund shares"): Two billion (2,000,000,000) Shares.
(29) Class J, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(30) Class J, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(31) Class K Common Shares (formerly referred to as "mortgage
securities fund shares"): Two billion (2,000,000,000) Shares.
(32) Class K, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(33) Class K, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(34) Class L Common Shares (formerly referred to as "regional
equity fund shares"): Two billion (2,000,000,000) Shares.
(35) Class L, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(36) Class L, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(37) Class M Common Shares: Two billion (2,000,000,000)
Shares.
(38) Class M, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(39) Class M, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(40) Class N Common Shares: Two billion (2,000,000,000)
Shares.
(41) Class N, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(42) Class N, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(43) Class O Common Shares: Two billion (2,000,000,000)
Shares.
(44) Class O, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(45) Class O, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(46) Class P Common Shares: Two billion (2,000,000,000)
Shares.
(47) Class P, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(48) Class P, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(49) Class Q Common Shares: Two billion (2,000,000,000)
Shares.
(50) Class Q, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(51) Class Q, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(52) Class R Common Shares: Two billion (2,000,000,000)
Shares.
(53) Class R, Series 2 Common Shares Two billion
(2,000,000,000) Shares.
(54) Class R, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(55) Class S Common Shares: Two billion (2,000,000,000)
Shares.
(56) Class S, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(57) Class S, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(58) Class T Common Shares: Two billion (2,000,000,000)
Shares.
(59) Class T, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(60) Class T, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(61) Class U Common Shares: Two billion (2,000,000,000)
Shares.
(62) Class U, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(63) Class U, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(64) Class V Common Shares: Two billion (2,000,000,000)
Shares.
(65) Class V, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(66) Class V, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(67) Unclassified Shares: Sixty-eight billion
(68,000,000,000) Shares.
SIXTH: The aforesaid action by the Board of Directors of the
Corporation was taken pursuant to authority and power contained in the Articles
of Incorporation of the Corporation.
IN WITNESS WHEREOF, the Corporation has caused these Articles
Supplementary to be signed in its name and on its behalf by its President and
witnessed by its Secretary on June 14, 1995.
First American Investment Funds, Inc.
By /s/ Keith L. Stewart
Keith L. Stewart
Its /s/ Vice President
Vice President
WITNESS:
/s/ Michael J. Radmer
Michael J. Radmer, Secretary
The abovesigned, Vice President of First American Investment Funds,
Inc. who executed on behalf of said corporation, the foregoing Articles of
Supplementary, of which this certificate is made a part, hereby acknowledges, in
the name and on behalf of said corporation, the foregoing Articles of
Supplementary to be the corporate act of said corporation and further certifies
that, to the best of his knowledge, information and belief, the matters and
facts set forth therein with respect to the approval thereof are true in all
material respects, under the penalties of perjury.
FIRST AMERICAN INVESTMENT FUNDS, INC.
ARTICLES SUPPLEMENTARY
First American Investment Funds, Inc., a corporation organized under the
laws of the State of Maryland (the "Corporation"), does hereby file for record
with the State Department of Assessments and Taxation of Maryland the following
Articles Supplementary to its Articles of Incorporation:
FIRST: The Corporation is registered as an open-end investment company
under the Investment Company Act of 1940 (the "1940 Act"). As hereinafter set
forth, the Corporation has classified its authorized capital stock in accordance
with the Maryland General Corporation Law.
SECOND: Immediately before the classifications hereinafter set forth,
the Corporation had authority to issue two hundred billion (200,000,000,000)
shares of common stock (individually, a "Share" and collectively, the "Shares"),
of the par value of $.0001 per Share and of the aggregate par value of twenty
million dollars ($20,000,000), classified as follows:
(1) Class A Common Shares (formerly referred to as "government
bond fund shares"): Two billion (2,000,000,000) Shares.
(2) Class A, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(3) Class A, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(4) Class B Common Shares (formerly referred to as "fixed
income fund shares"): Two billion (2,000,000,000) Shares.
(5) Class B, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(6) Class B, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(7) Class C Common Shares (formerly referred to as "municipal
bond fund shares"): Two billion (2,000,000,000) Shares.
(8) Class C, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(9) Class C, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(10) Class D Common Shares (formerly referred to as "stock
fund shares"): Two billion (2,000,000,000) Shares.
(11) Class D, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(12) Class D, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(13) Class E Common Shares (formerly referred to as "special
equity fund shares"): Two billion (2,000,000,000) Shares.
(14) Class E, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(15) Class E, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(16) Class F Common Shares (formerly referred to as "asset
allocation fund shares"): Two billion (2,000,000,000) Shares.
(17) Class F, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(18) Class F, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(19) Class G Common Shares (formerly referred to as "balanced
fund shares"): Two billion (2,000,000,000) Shares.
(20) Class G, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(21) Class G, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(22) Class H Common Shares (formerly referred to as "equity
index fund shares"): Two billion (2,000,000,000) Shares.
(23) Class H, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(24) Class H, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(25) Class I Common Shares (formerly referred to as
"intermediate term income fund shares"): Two billion (2,000,000,000)
Shares.
(26) Class I, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(27) Class I, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(28) Class J Common Shares (formerly referred to as "limited
term income fund shares"): Two billion (2,000,000,000) Shares.
(29) Class J, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(30) Class J, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(31) Class K Common Shares (formerly referred to as "mortgage
securities fund shares"): billion (2,000,000,000) Shares.
(32) Class K, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(33) Class K, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(34) Class L Common Shares (formerly referred to as
"regional equity fund shares"): Two billion (2,000,000,000) Shares.
(35) Class L, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(36) Class L, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(37) Class M Common Shares: Two billion (2,000,000,000)
Shares.
(38) Class M, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(39) Class M, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(40) Class N Common Shares: Two billion (2,000,000,000)
Shares.
(41) Class N, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(42) Class N, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(43) Class O Common Shares: Two billion (2,000,000,000)
Shares.
(44) Class O, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(45) Class O, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(46) Class P Common Shares: Two billion (2,000,000,000)
Shares.
(47) Class P, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(48) Class P, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(49) Class Q Common Shares: Two billion (2,000,000,000)
Shares.
(50) Class Q, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(51) Class Q, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(52) Class R Common Shares: Two billion (2,000,000,000)
Shares.
(53) Class R, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(54) Class R, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(55) Class S Common Shares: Two billion (2,000,000,000)
Shares.
(56) Class S, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(57) Class S, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(58) Class T Common Shares: Two billion (2,000,000,000)
Shares.
(59) Class T, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(60) Class T, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(61) Class U Common Shares: Two billion (2,000,000,000)
Shares.
(62) Class U, Series 2 Common Shares: Two billion
(2,000,000,000) Shares
(63) Class U, Series 3 Common Shares: Two billion
(2,000,000,000) Shares
(64) Class V Common Shares: Two billion (2,000,000,000)
Shares.
(65) Class V, Series 2 Common Shares: Two billion
(2,000,000,000) Shares
(66) Class V, Series 3 Common Shares: Two billion
(2,000,000,000) Shares
(67) Unclassified Shares: Sixty-eight billion (68,000,000,000)
Shares.
THIRD: Pursuant to the authority contained in Article IV of the Articles
of Incorporation of the Corporation and Section 2-208 of the Maryland General
Corporation Law, the Board of Directors of the Corporation, by resolution
adopted by written action dated October 26, 1995, classified the following
additional Shares out of the authorized, unissued and unclassified Shares of the
Corporation:
(1) Class W Common Shares: Two billion (2,000,000,000) Shares.
(2) Class W, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(3) Class W, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
FOURTH: The Shares classified pursuant to THIRD above shall have the
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption, set forth in the Corporation's Articles of Incorporation. Any Class
or Series of Shares classified pursuant to THIRD above 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 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, and all of the charges and expenses to which such a Class or
Series is subject shall be borne by such Class or Series 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 or Series.
FIFTH: Immediately after the classifications hereinbefore set forth and
upon filing for record of these Articles Supplementary, the Corporation has
authority to issue two hundred billion (200,000,000,000) shares of common stock
(individually, a "Share" and collectively, the "Shares"), of the par value of
$.0001 per Share and of the aggregate par value of twenty million dollars
($20,000,000), classified as follows:
(1) Class A Common Shares (formerly referred to as "government
bond fund shares"): Two billion (2,000,000,000) Shares.
(2) Class A, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(3) Class A, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(4) Class B Common Shares (formerly referred to as "fixed
income fund shares"): Two billion (2,000,000,000) Shares.
(5) Class B, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(6) Class B, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(7) Class C Common Shares (formerly referred to as "municipal
bond fund shares"): Two billion (2,000,000,000) Shares.
(8) Class C, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(9) Class C, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(10) Class D Common Shares (formerly referred to as "stock
fund shares"): Two billion (2,000,000,000) Shares.
(11) Class D, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(12) Class D, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(13) Class E Common Shares (formerly referred to as "special
equity fund shares"): Two billion (2,000,000,000) Shares.
(14) Class E, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(15) Class E, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(16) Class F Common Shares (formerly referred to as "asset
allocation fund shares"): Two billion (2,000,000,000) Shares.
(17) Class F, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(18) Class F, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(19) Class G Common Shares (formerly referred to as "balanced
fund shares"): Two billion (2,000,000,000) Shares.
(20) Class G, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(21) Class G, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(22) Class H Common Shares (formerly referred to as "equity
index fund shares"): Two billion (2,000,000,000) Shares.
(23) Class H, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(24) Class H, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(25) Class I Common Shares (formerly referred to as
"intermediate term income fund shares"): Two billion (2,000,000,000)
Shares.
(26) Class I, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(27) Class I, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(28) Class J Common Shares (formerly referred to as "limited
term income fund shares"): Two billion (2,000,000,000) Shares.
(29) Class J, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(30) Class J, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(31) Class K Common Shares (formerly referred to as "mortgage
securities fund shares"): Two billion (2,000,000,000) Shares.
(32) Class K, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(33) Class K, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(34) Class L Common Shares (formerly referred to as "regional
equity fund shares"): Two billion (2,000,000,000) Shares.
(35) Class L, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(36) Class L, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(37) Class M Common Shares: Two billion (2,000,000,000)
Shares.
(38) Class M, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(39) Class M, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(40) Class N Common Shares: Two billion (2,000,000,000)
Shares.
(41) Class N, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(42) Class N, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(43) Class O Common Shares: Two billion (2,000,000,000)
Shares.
(44) Class O, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(45) Class O, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(46) Class P Common Shares: Two billion (2,000,000,000)
Shares.
(47) Class P, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(48) Class P, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(49) Class Q Common Shares: Two billion (2,000,000,000)
Shares.
(50) Class Q, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(51) Class Q, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(52) Class R Common Shares: Two billion (2,000,000,000)
Shares.
(53) Class R, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(54) Class R, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(55) Class S Common Shares: Two billion (2,000,000,000)
Shares.
(56) Class S, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(57) Class S, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(58) Class T Common Shares: Two billion (2,000,000,000)
Shares.
(59) Class T, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(60) Class T, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(61) Class U Common Shares: Two billion (2,000,000,000)
Shares.
(62) Class U, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(63) Class U, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(64) Class V Common Shares: Two billion (2,000,000,000)
Shares.
(65) Class V, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(66) Class V, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(67) Class W Common Shares: Two billion (2,000,000,000)
Shares.
(68) Class W, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(69) Class W, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(70) Unclassified Shares: Sixty-two billion (62,000,000,000)
Shares.
SIXTH: The aforesaid action by the Board of Directors of the
Corporation was taken pursuant to authority and power contained in the Articles
of Incorporation of the Corporation.
The undersigned officer of the Corporation hereby acknowledges, in the
name and on behalf of the Corporation, the foregoing Articles Supplementary to
be the corporate act of the Corporation and further certifies that, to the best
of his or her knowledge, information and belief, the matters and facts set forth
therein with respect to the approval thereof are true in all material respects,
under the penalties of perjury.
IN WITNESS WHEREOF, the Corporation has caused these Articles Supplementary to
be signed in its name and on its behalf by its Vice President and witnessed by
its Assistant Secretary on November 9, 1995.
First American Investment Funds, Inc.
By /s/ Keith L. Stewart
Its /s/ Vice President
WITNESS:
/s/ Richard J. Shoch
Richard J. Shoch
Assistant Secretary
STATE OF MARYLAND
403540
STATE DEPARTMENT OF ASSESSMENTS AND TAXATION
301 WEST PRESTON STREET BALTIMORE, MARYLAND 21201
DATE: NOVEMBER 13, 1995
THIS IS TO ADVISE YOU THAT THE ARTICLES SUPPLEMENTARY FOR FIRST AMERICAN
INVESTMENT FUNDS, INC. WERE RECEIVED AND APPROVED FOR RECORD ON NOVEMBER 13,
1995 AT 2:47 PM.
FEE PAID: 50.00
[SEAL]
WILLIAM B MARKER
CHARTER SPECIALIST
STATE OF MARYLAND
419397
STATE DEPARTMENT OF ASSESSMENTS AND TAXATION
301 WEST PRESTON STREET BALTIMORE, MARYLAND 21201
DATE: JANUARY 26, 1996
THIS IS TO ADVISE YOU THAT THE ARTICLES OF AMENDMENT FOR FIRST AMERICAN
INVESTMENT FUNDS, INC. WERE RECEIVED AND APPROVED FOR RECORD ON JANUARY 26, 1996
AT 1:14 PM.
FEE PAID: 95.00
[SEAL]
IRENE B WOZNY
CHARTER SPECIALIST
STATE OF MARYLAND
I hereby certify that this is a true and complete copy of (illegible) page
document on file in this office. DATED: 01-26-1996.
STATE DEPARTMENT OF ASSESSMENTS AND TAXATION
BY: (signature illegible), Custodian
This stamp replaces our previous certification system. Effective: 6/95
STATE DEPARTMENT OF ASSESSMENTS AND TAXATION
APPROVED FOR RECORD
Execution
1/26/96 at 1:14 p.m.
ARTICLES OF AMENDMENT
T0
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
FIRST AMERICAN INVESTMENT FUNDS, INC
The undersigned officer of First American Investment Funds, Inc. (the
"Corporation"), a Maryland corporation, hereby certifies that the following
amendments to the Corporation's Amended and Restated Articles of Incorporation
have been advised by the Corporation's Board of Directors and approved by the
Corporation's stockholders in the manner required by the Maryland General
Corporation Law:
WHEREAS, the Corporation is registered as an open end management
investment company (i.e., a mutual fund) under the Investment Company
Act of 1940 and offers its shares to the public in several classes,
each of which represents a separate and distinct portfolio of assets;
and
WHEREAS, it is desirable and in the best interests of the holders of
the Class R shares of the Corporation (also known as "Limited
Volatility Stock Fund") that the assets belonging to such class be sold
to a separate portfolio of the Corporation which is known as "Stock
Fund" and which is represented by the Corporation's Class D shares, in
exchange for shares of Stock Fund which are to be delivered to former
Limited Volatility Stock Fund holders; and
WHEREAS, Limited Volatility Stock Fund and Stock Fund have entered into
an Agreement and Plan of Reorganization providing for the foregoing
transactions; and
WHEREAS, the Agreement and Plan of Reorganization requires that, in
order to bind all holders of shares of Limited Volatility Stock Fund to
the foregoing transactions, and in particular to bind such holders to
the exchange of their Limited Volatility Stock Fund shares for Stock
Fund shares, it is necessary to adopt an amendment to the Corporation's
Amended and Restated Articles of Incorporation.
NOW, THEREFORE, BE IT RESOLVED, that the Corporation's Amended and
Restated Articles of Incorporation be, and the same hereby are, amended
to add the following Article IV(A)) immediately following Article IV
thereof:
Article IV(A). (a) For purposes of this Article IV(A), the
following terms shall have the following meanings:
"Corporation" means this corporation.
"Acquired Fund" means the Corporation's Limited Volatility Stock Fund,
which is represented by the Corporation's Class R shares.
"Class A Acquired Fund Shares" means the Corporation's Class R Common
Shares.
"Class B Acquired Fund Shares" means the Corporation's Class R, Series
2 Common Shares.
"Class C Acquired Fund Shares" means the Corporation's Class R, Series
3 Common Shares.
"Acquiring Fund" means the Corporation's Stock Fund, which is
represented by the Corporation's Class D shares.
"Class A Acquiring Fund Shares" means the Corporation's Class D Common
Shares.
"Class B Acquiring Fund Shares" means the Corporation's Class D, Series
2 Common Shares.
"Class C Acquiring Fund Shares" means the Corporation's Class D, Series
3 Common Shares.
"Effective Time" means 4:00 p.m. Eastern time on the date upon which
these Articles of Amendment are filed with the Maryland State
Department of Assessments and Taxation.
(b) At the Effective Time, the assets belonging to the Acquired Fund,
the liabilities belonging to the Acquired Fund, and the General Assets and
General Liabilities allocated to the Acquired Fund, shall become, without
further action, assets belonging to the Acquiring Fund, liabilities belonging to
the Acquiring Fund, and General Assets and General Liabilities allocated to the
Acquiring Fund. For purposes of the foregoing, the terms "assets belonging to,"
"liabilities belonging to" "General Assets" and "General Liabilities" have the
meanings assigned to them in Article IV, Section 1(d)(i) and (ii) of the
Corporation's Amended and Restated Articles of Incorporation.
(c) At the Effective Time, each issued and outstanding Acquired Fund
share shall be, without further action, exchanged for those numbers and classes
of Acquiring Fund shares calculated in accordance with paragraph (d) below.
(d) The numbers of Class A, Class B and Class C Acquiring Fund Shares to
be issued in exchange for the Class A, Class B and Class C Acquired Fund Shares
shall be determined as follows:
(i) The net asset value per share of the Acquired Fund's and
the Acquiring Fund's Class A Shares, Class B Shares and Class C Shares
shall be computed as of the Effective Time using the valuation
procedures set forth in the Corporation's articles of incorporation and
bylaws and then-current Prospectuses and Statement of Additional
Information and as may be required by the Investment Company Act of
1940, as amended (the "1940 Act").
(ii) The total number of Class A Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for the Class
A Acquired Fund Shares shall be determined as of the Effective Time by
multiplying the number of Class A Acquired Fund Shares outstanding
immediately prior to the Effective Time times a fraction, the numerator
of which is the net asset value per share of Class A Acquired Fund
Shares immediately prior to the Effective Time, and the denominator of
which is the net asset value per share of the Class A Acquiring Fund
Shares immediately prior to the Effective Time, each as determined
pursuant to (i) above.
(iii) The total number of Class B Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for the Class
B Acquired Fund Shares shall be determined as of the Effective Time by
multiplying the number of Class B Acquired Fund Shares outstanding
immediately prior to the Effective Time times a fraction, the numerator
of which is the net asset value per share of Class B Acquired Fund
Shares immediately prior to the Effective Time, and the denominator of
which is the net asset value per share of the Class B Acquiring Fund
Shares immediately prior to the Effective Time, each as determined
pursuant to (i) above.
(iv) The total number of Class C Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for the Class
C Acquired Fund Shares shall be determined as of the Effective Time by
multiplying the number of Class C Acquired Fund Shares outstanding
immediately prior to the Effective Time times a fraction, the numerator
of which is the net asset value per share of Class C Acquired Fund
Shares immediately prior to the Effective Time, and the denominator of
which is the net asset value per share of the Class C Acquiring Fund
Shares immediately prior to the Effective Time, each as determined
pursuant to (i) above.
(v) At the Effective Time, the Acquired Fund shall issue and
distribute to the Acquired Fund shareholders of the respective classes
pro rata within such classes (based upon the ratio that the number of
Acquired Fund Shares of the respective classes owned by each Acquired
Fund shareholder immediately prior to the Effective Time bears to the
total number of issued and outstanding Acquired Fund shares of the
respective classes immediately prior to the Effective Time) the full
and fractional Acquiring Fund shares of the respective classes" issued
by the Acquiring Fund pursuant to (ii) through (iv) above. Accordingly,
each Class A Acquired Fund shareholder shall receive, at the Effective
Time, Class A Acquiring Fund Shares with an aggregate net asset value
equal to the aggregate net asset value of the Class A Acquired Fund
Shares owned by such Acquired Fund shareholder immediately prior to the
Effective Time; each Class B Acquired Fund shareholder shall receive,
at the Effective Time, Class B Acquiring Fund Shares with an aggregate
net asset value equal to the aggregate net asset value of the Class B
Acquired Fund Shares owned by such Acquired Fund shareholder
immediately prior to the Effective Time; and each Class C Acquired Fund
shareholder shall receive, at the Effective Time, Class C Acquiring
Fund Shares with an aggregate net asset value equal to the aggregate
net asset value of the Class C Acquired Fund Shares owned by such
Acquired Fund shareholder immediately prior to the Effective Time.
(e) The distribution of Acquiring Fund Shares to Acquired Fund
shareholders provided for in paragraphs (c) and (d) above 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 numbers and classes" of Acquiring Fund shares due each such
shareholder pursuant to the foregoing provisions. 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
numbers and classes of Acquiring Fund shares determined in accordance with the
foregoing provisions.
(f) From and after the Effective Time, the Acquired Fund shares
cancelled and retired pursuant to paragraph (e) above shall have the status of
authorized and unissued Class R common shares of the Corporation, without
designation as to series.
The undersigned officer of the Corporation hereby acknowledges, in the
name and on behalf of the Corporation, the foregoing Articles of Amendment to
be the corporate act of the Corporation and further certifies that, to the best
of his or her knowledge, information and belief, the matters and facts set forth
therein with respect to the approval thereof are true in all material respects,
under the penalties of perjury.
IN WITNESS WHEREOF, the Corporation has caused these Article of
Amendment to be signed in its name and on its behalf by its President or a Vice
President and witnessed by its Secretary or an Assistant Secretary on January
25, 1996.
FIRST AMERICAN INVESTMENT FUNDS, INC
By /s/ Keith L. Stewart
Its Vice President
WITNESS:
/s/ Michael J. Radmer
Secretary
Execution
ARTICLES OF AMENDMENT
TO
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
FIRST AMERICAN INVESTMENT FUNDS, INC.
The undersigned officer of First American Investment Funds, Inc. (the
"Corporation"), a Maryland corporation, hereby certifies that the following
amendments to the Corporation's Amended and Restated Articles of Incorporation
have been advised by the Corporation's Board of Directors and approved by the
Corporation's stockholders in the manner required by the Maryland General
Corporation Law:
WHEREAS, the Corporation is registered as an open end management
investment company (i.e., a mutual fund) under the Investment Company
Act of 1940 and offers its shares to the public in several classes,
each of which represents a separate and distinct portfolio of assets;
and
WHEREAS, it is desirable and in the best interests of the holders of
the Class R shares of the Corporation (also known as "Limited
Volatility Stock Fund") that the assets belonging to such class be sold
to a separate portfolio of the Corporation which is known as "Stock
Fund" and which is represented by the Corporation's Class D shares, in
exchange for shares of Stock Fund which are to be delivered to former
Limited Volatility Stock Fund holders; and
WHEREAS, Limited Volatility Stock Fund and Stock Fund have entered into
an Agreement and Plan of Reorganization providing for the foregoing
transactions; and
WHEREAS, the Agreement and Plan of Reorganization requires that, in
order to bind all holders of shares of Limited Volatility Stock Fund to
the foregoing transactions, and in particular to bind such holders to
the exchange of their Limited Volatility Stock Fund shares for Stock
Fund shares, it is necessary to adopt an amendment to the Corporation's
Amended and Restated Articles of Incorporation.
NOW, THEREFORE, BE IT RESOLVED, that the Corporation's Amended and
Restated Articles of Incorporation be, and the same hereby are, amended
to add the following Article IV(A) immediately following Article IV
thereof:
Article IV(A). (a) For purposes of this Article IV(A), the
following terms shall have the following meanings:
"Corporation" means this corporation.
"Acquired Fund" means the Corporation's Limited Volatility
Stock Fund, which is represented by the Corporation's Class R
shares.
"Class A Acquired Fund Shares" means the Corporation's Class R
Common Shares.
"Class B Acquired Fund Shares" means the Corporation's Class
R, Series 2 Common Shares.
"Class C Acquired Fund Shares" means the Corporation's Class
R, Series 3 Common Shares.
"Acquiring Fund" means the Corporation's Stock Fund, which is
represented by the Corporation's Class D shares.
"Class A Acquiring Fund Shares" means the Corporation's Class
D Common Shares.
"Class B Acquiring Fund Shares" means the Corporation's Class
D, Series 2 Common Shares.
"Class C Acquiring Fund Shares" means the Corporation's Class
D, Series 3 Common Shares.
"Effective Time" means 4:00 p.m. Eastern time on the date upon
which these Articles of Amendment are filed with the Maryland
State Department of Assessments and Taxation.
(b) At the Effective Time, the assets belonging to the
Acquired Fund, the liabilities belonging to the Acquired Fund, and the
General Assets and General Liabilities allocated to the Acquired Fund,
shall become, without further action, assets belonging to the Acquiring
Fund, liabilities belonging to the Acquiring Fund, and General Assets
and General Liabilities allocated to the Acquiring Fund. For purposes
of the foregoing, the terms "assets belonging to," "liabilities
belonging to," "General Assets" and "General Liabilities" have the
meanings assigned to them in Article IV, Section 1(d)(i) and (ii) of
the Corporation's Amended and Restated Articles of Incorporation.
(c) At the Effective Time, each issued and outstanding
Acquired Fund share shall be, without further action, exchanged for
those numbers and classes of Acquiring Fund shares calculated in
accordance with paragraph (d) below.
(d) The numbers of Class A, Class B and Class C Acquiring Fund
Shares to be issued in exchange for the Class A, Class B and Class C
Acquired Fund Shares shall be determined as follows:
(i) The net asset value per share of the Acquired
Fund's and the Acquiring Fund's Class A Shares, Class B Shares
and Class C Shares shall be computed as of the Effective Time
using the valuation procedures set forth in the Corporation's
articles of incorporation and bylaws and then-current
Prospectuses and Statement of Additional Information and as
may be required by the Investment Company Act of 1940, as
amended (the "1940 Act").
(ii) The total number of Class A Acquiring Fund
Shares to be issued (including fractional shares, if any) in
exchange for the Class A Acquired Fund Shares shall be
determined as of the Effective Time by multiplying the number
of Class A Acquired Fund Shares outstanding immediately prior
to the Effective Time times a fraction, the numerator of which
is the net asset value per share of Class A Acquired Fund
Shares immediately prior to the Effective Time, and the
denominator of which is the net asset value per share of the
Class A Acquiring Fund Shares immediately prior to the
Effective Time, each as determined pursuant to (i) above.
(iii) The total number of Class B Acquiring Fund
Shares to be issued (including fractional shares, if any) in
exchange for the Class B Acquired Fund Shares shall be
determined as of the Effective Time by multiplying the number
of Class B Acquired Fund Shares outstanding immediately prior
to the Effective Time times a fraction, the numerator of which
is the net asset value per share of Class B Acquired Fund
Shares immediately prior to the Effective Time, and the
denominator of which is the net asset value per share of the
Class B Acquiring Fund Shares immediately prior to the
Effective Time, each as determined pursuant to (i) above.
(iv) The total number of Class C Acquiring Fund
Shares to be issued (including fractional shares, if any) in
exchange for the Class C Acquired Fund Shares shall be
determined as of the Effective Time by multiplying the number
of Class C Acquired Fund Shares outstanding immediately prior
to the Effective Time times a fraction, the numerator of which
is the net asset value per share of Class C Acquired Fund
Shares immediately prior to the Effective Time, and the
denominator of which is the net asset value per share of the
Class C Acquiring Fund Shares immediately prior to the
Effective Time, each as determined pursuant to (i) above.
(v) At the Effective Time, the Acquired Fund shall
issue and distribute to the Acquired Fund shareholders of the
respective classes pro rata within such classes (based upon
the ratio that the number of Acquired Fund shares of the
respective classes owned by each Acquired Fund shareholder
immediately prior to the Effective Time bears to the total
number of issued and outstanding Acquired Fund shares of the
respective classes immediately prior to the Effective Time)
the full and fractional Acquiring Fund shares of the
respective classes issued by the Acquiring Fund pursuant to
(ii) through (iv) above. Accordingly, each Class A Acquired
Fund shareholder shall receive, at the Effective Time, Class A
Acquiring Fund Shares with an aggregate net asset value equal
to the aggregate net asset value of the Class A Acquired Fund
Shares owned by such Acquired Fund shareholder immediately
prior to the Effective Time; each Class B Acquired Fund
shareholder shall receive, at the Effective Time, Class B
Acquiring Fund Shares with an aggregate net asset value equal
to the aggregate net asset value of the Class B Acquired Fund
Shares owned by such Acquired Fund shareholder immediately
prior to the Effective Time; and each Class C Acquired Fund
shareholder shall receive, at the Effective Time, Class C
Acquiring Fund Shares with an aggregate net asset value equal
to the aggregate net asset value of the Class C Acquired Fund
Shares owned by such Acquired Fund shareholder immediately
prior to the Effective Time.
(e) The distribution of Acquiring Fund shares to Acquired Fund
shareholders provided for in paragraphs (c) and (d) above 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 numbers and classes of
Acquiring Fund shares due each such shareholder pursuant to the
foregoing provisions. 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 numbers
and classes of Acquiring Fund shares determined in accordance with the
foregoing provisions.
(f) From and after the Effective Time, the Acquired Fund
shares cancelled and retired pursuant to paragraph (e) above shall have
the status of authorized and unissued Class R common shares of the
Corporation, without designation as to series.
The undersigned officer of the Corporation hereby acknowledges, in the
name and on behalf of the Corporation, the foregoing Articles of Amendment to be
the corporate act of the Corporation and further certifies that, to the best of
his or her knowledge, information and belief, the matters and facts set forth
therein with respect to the approval thereof are true in all material respects,
under the penalties of perjury.
IN WITNESS WHEREOF, the Corporation has caused these Article of
Amendment to be signed in its name and on its behalf by its President or a Vice
President and witnessed by its Secretary or an Assistant Secretary on January
25, 1996.
FIRST AMERICAN INVESTMENT FUNDS, INC
By /s/ Keith L. Stewart
Its Vice President
WITNESS:
/s/ Michael J. Radmer
Secretary
7/97
FIRST AMERICAN INVESTMENT FUNDS, INC.
ARTICLES SUPPLEMENTARY
First American Investment Funds, Inc., a corporation organized under
the laws of the State of Maryland (the "Corporation"), does hereby file for
record with the State Department of Assessments and Taxation of Maryland the
following Articles Supplementary to its Articles of Incorporation:
FIRST: The Corporation is registered as an open-end investment company
under the Investment Company Act of 1940 (the "1940 Act"). As hereinafter set
forth, the Corporation has classified its authorized capital stock in accordance
with the Maryland General Corporation Law.
SECOND: Immediately before the classifications hereinafter set forth,
the Corporation had authority to issue two hundred billion (200,000,000,000)
shares of common stock (individually, a "Share" and collectively, the "Shares"),
of the par value of $.0001 per Share and of the aggregate par value of twenty
million dollars ($20,000,000), classified as follows:
(1) Class A Common Shares (formerly referred to as "government
bond fund shares"): Two billion (2,000,000,000) Shares.
(2) Class A, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(3) Class A, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(4) Class B Common Shares (formerly referred to as "fixed
income fund shares"): Two billion (2,000,000,000) Shares.
(5) Class B, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(6) Class B, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(7) Class C Common Shares (formerly referred to as "municipal
bond fund shares"): Two billion (2,000,000,000) Shares.
(8) Class C, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(9) Class C, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(10) Class D Common Shares (formerly referred to as "stock
fund shares"): Two billion (2,000,000,000) Shares.
(11) Class D, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(12) Class D, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(13) Class E Common Shares (formerly referred to as "special
equity fund shares"): Two billion (2,000,000,000) Shares.
(14) Class E, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(15) Class E, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(16) Class F Common Shares (formerly referred to as "asset
allocation fund shares"): Two billion (2,000,000,000) Shares.
(17) Class F, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(18) Class F, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(19) Class G Common Shares (formerly referred to as "balanced
fund shares"): Two billion (2,000,000,000) Shares.
(20) Class G, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(21) Class G, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(22) Class H Common Shares (formerly referred to as "equity
index fund shares"): Two billion (2,000,000,000) Shares.
(23) Class H, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(24) Class H, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(25) Class I Common Shares (formerly referred to as
"intermediate term income fund shares"): Two billion (2,000,000,000)
Shares.
(26) Class I, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(27) Class I, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(28) Class J Common Shares (formerly referred to as "limited
term income fund shares"): Two billion (2,000,000,000) Shares.
(29) Class J, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(30) Class J, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(31) Class K Common Shares (formerly referred to as "mortgage
securities fund shares"): Two billion (2,000,000,000) Shares.
(32) Class K, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(33) Class K, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(34) Class L Common Shares (formerly referred to as "regional
equity fund shares"): Two billion (2,000,000,000) Shares.
(35) Class L, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(36) Class L, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(37) Class M Common Shares: Two billion (2,000,000,000)
Shares.
(38) Class M, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(39) Class M, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(40) Class N Common Shares: Two billion (2,000,000,000)
Shares.
(41) Class N, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(42) Class N, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(43) Class O Common Shares: Two billion (2,000,000,000)
Shares.
(44) Class O, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(45) Class O, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(46) Class P Common Shares: Two billion (2,000,000,000)
Shares.
(47) Class P, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(48) Class P, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(49) Class Q Common Shares: Two billion (2,000,000,000)
Shares.
(50) Class Q, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(51) Class Q, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(52) Class R Common Shares: Two billion (2,000,000,000)
Shares.
(53) Class R, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(54) Class R, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(55) Class S Common Shares: Two billion (2,000,000,000)
Shares.
(56) Class S, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(57) Class S, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(58) Class T Common Shares: Two billion (2,000,000,000)
Shares.
(59) Class T, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(60) Class T, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(61) Class U Common Shares: Two billion (2,000,000,000)
Shares.
(62) Class U, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(63) Class U, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(64) Class V Common Shares: Two billion (2,000,000,000)
Shares.
(65) Class V, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(66) Class V, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(67) Class W Common Shares: Two billion (2,000,000,000)
Shares.
(68) Class W, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(69) Class W, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(70) Unclassified Shares: Sixty-two billion (62,000,000,000)
Shares.
THIRD: Pursuant to the authority contained in Article IV of the
Articles of Incorporation of the Corporation and Section 2-208 of the Maryland
General Corporation Law, the Board of Directors of the Corporation, by
resolution adopted June 4, 1997, classified the following additional Shares out
of the authorized, unissued and unclassified Shares of the Corporation:
(1) Class X Common Shares: Two billion (2,000,000,000) Shares.
(2) Class Y Common Shares: Two billion (2,000,000,000) Shares.
(3) Class Y, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(4) Class Z Common Shares: Two billion (2,000,000,000) Shares.
(5) Class Z, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(6) Class Z, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
FOURTH: The Shares classified pursuant to THIRD above shall have the
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption, set forth in the Corporation's Articles of Incorporation. Any Class
or Series of Shares classified pursuant to THIRD above 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 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, and all of the charges and expenses to which such a Class or
Series is subject shall be borne by such Class or Series 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 or Series.
FIFTH: Immediately after the classifications hereinbefore set forth and
upon filing for record of these Articles Supplementary, the Corporation has
authority to issue two hundred billion (200,000,000,000) shares of common stock
(individually, a "Share" and collectively, the "Shares"), of the par value of
$.0001 per Share and of the aggregate par value of twenty million dollars
($20,000,000), classified as follows:
(1) Class A Common Shares (formerly referred to as "government
bond fund shares"): Two billion (2,000,000,000) Shares.
(2) Class A, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(3) Class A, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(4) Class B Common Shares (formerly referred to as "fixed
income fund shares"): Two billion (2,000,000,000) Shares.
(5) Class B, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(6) Class B, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(7) Class C Common Shares (formerly referred to as "municipal
bond fund shares"): Two billion (2,000,000,000) Shares.
(8) Class C, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(9) Class C, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(10) Class D Common Shares (formerly referred to as "stock
fund shares"): Two billion (2,000,000,000) Shares.
(11) Class D, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(12) Class D, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(13) Class E Common Shares (formerly referred to as "special
equity fund shares"): Two billion (2,000,000,000) Shares.
(14) Class E, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(15) Class E, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(16) Class F Common Shares (formerly referred to as "asset
allocation fund shares"): Two billion (2,000,000,000) Shares.
(17) Class F, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(18) Class F, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(19) Class G Common Shares (formerly referred to as "balanced
fund shares"): Two billion (2,000,000,000) Shares.
(20) Class G, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(21) Class G, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(22) Class H Common Shares (formerly referred to as "equity
index fund shares"): Two billion (2,000,000,000) Shares.
(23) Class H, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(24) Class H, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(25) Class I Common Shares (formerly referred to as
"intermediate term income fund shares"): Two billion (2,000,000,000)
Shares.
(26) Class I, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(27) Class I, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(28) Class J Common Shares (formerly referred to as "limited
term income fund shares"): Two billion (2,000,000,000) Shares.
(29) Class J, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(30) Class J, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(31) Class K Common Shares (formerly referred to as "mortgage
securities fund shares"): Two billion (2,000,000,000) Shares.
(32) Class K, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(33) Class K, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(34) Class L Common Shares (formerly referred to as "regional
equity fund shares"): Two billion (2,000,000,000) Shares.
(35) Class L, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(36) Class L, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(37) Class M Common Shares: Two billion (2,000,000,000)
Shares.
(38) Class M, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(39) Class M, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(40) Class N Common Shares: Two billion (2,000,000,000)
Shares.
(41) Class N, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(42) Class N, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(43) Class O Common Shares: Two billion (2,000,000,000)
Shares.
(44) Class O, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(45) Class O, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(46) Class P Common Shares: Two billion (2,000,000,000)
Shares.
(47) Class P, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(48) Class P, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(49) Class Q Common Shares: Two billion (2,000,000,000)
Shares.
(50) Class Q, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(51) Class Q, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(52) Class R Common Shares: Two billion (2,000,000,000)
Shares.
(53) Class R, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(54) Class R, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(55) Class S Common Shares: Two billion (2,000,000,000)
Shares.
(56) Class S, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(57) Class S, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(58) Class T Common Shares: Two billion (2,000,000,000)
Shares.
(59) Class T, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(60) Class T, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(61) Class U Common Shares: Two billion (2,000,000,000)
Shares.
(62) Class U, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(63) Class U, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(64) Class V Common Shares: Two billion (2,000,000,000)
Shares.
(65) Class V, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(66) Class V, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(67) Class W Common Shares: Two billion (2,000,000,000)
Shares.
(68) Class W, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(69) Class W, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(70) Class X Common Shares: Two billion (2,000,000,000)
Shares.
(71) Class Y Common Shares: Two billion (2,000,000,000)
Shares.
(72) Class Y, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(73) Class Z Common Shares: Two billion (2,000,000,000)
Shares.
(74) Class Z, Series 2 Common Shares: Two billion
(2,000,000,000) Shares.
(75) Class Z, Series 3 Common Shares: Two billion
(2,000,000,000) Shares.
(76) Unclassified Shares: Fifty billion (50,000,000,000)
Shares.
SIXTH: The aforesaid action by the Board of Directors of the
Corporation was taken pursuant to authority and power contained in the Articles
of Incorporation of the Corporation.
The undersigned officer of the Corporation hereby acknowledges, in the
name and on behalf of the Corporation, the foregoing Articles Supplementary to
be the corporate act of the Corporation and further certifies that, to the best
of his or her knowledge, information and belief, the matters and facts set forth
therein with respect to the approval thereof are true in all material respects,
under the penalties of perjury.
IN WITNESS WHEREOF, the Corporation has caused these Articles
Supplementary to be signed in its name and on its behalf by its President and
witnessed by its Secretary on July 21, 1997.
First American Investment Funds, Inc.
By /s/ Kathryn L. Stanton
Kathryn L. Stanton
Its Vice President
WITNESS:
/s/ Michael J. Radmer
Michael J. Radmer, Secretary
Name change from "SECURAL Mutual Funds, Inc." to "First American Investment
Funds, Inc." approved at Board of Directors' Meetings on February 12, 1991;
Amendment adding new Section 8 to Article I approved at Board of Directors'
Meetings on December 15, 1992; Amendments to Article III approved at Board of
Directors' Meetings on September 7, 1993; Amendment adding new Section 3 to
Article V approved at Board of Directors' Meeting on December 7, 1993; Amendment
to Article V, Section 3 changing fund names approved at Board of Directors'
Meeting on March 7, 1994; Amendment to Article V, Section 3 providing for names
of new classes and series approved at Board of Directors' Meeting on June 8,
1994 Amendment to Article V, Section 3 providing for names of new classes and
series approved at Board of Directors' Meeting on December 7, 1994; Amendment to
Article V, Section 3 providing for names of new classes and series approved at
Board of Directors' Meeting on March 6, 1995; Amendment to Article V, Section 3
providing for names of new classes and series approved at Board of Directors'
Meeting on December 6, 1995.
BYLAWS
OF
FIRST AMERICAN INVESTMENT FUNDS, INC.
(A MARYLAND CORPORATION)
ARTICLE I
STOCKHOLDERS
SECTION 1. Meetings. Annual or special meetings of stockholders may be
held on such date and at such time as shall be set or provided for by the Board
of Directors or, if not so set or provided for, then as stated in the notice of
meeting. The notice of meeting shall state the purpose or purposes for which the
meeting is called.
SECTION 2. Place of Meetings. All meetings of stockholders shall be held
at such place in the United States as is set or provided for by the Board of
Directors or, if not so set or provided for, then as stated in the notice of
meeting.
SECTION 3. Organization. At any meeting of the stockholders, in the
absence of the Chairman of the Board of Directors, if any, and of the President
or a Vice President acting in his stead, the stockholders shall choose a
chairman to preside over the meeting. In the absence of the Secretary or an
Assistant Secretary, acting in his stead, the chairman of the meeting shall
appoint a secretary to keep the record of all the votes and minutes of the
proceedings.
SECTION 4. Proxies. At any meeting of the stockholders, every
stockholder having the right to vote shall be entitled to vote in person or by
proxy appointed by an instrument executed in writing by such stockholder or his
duly authorized attorney-in-fact and bearing a date not more than eleven (11)
months prior to said meeting, unless otherwise provided in the proxy.
SECTION 5. Voting. At any meeting of the stockholders, every
stockholder shall be entitled to one vote or a fractional vote on each matter
submitted to a vote for each share or fractional share of stock standing in his
name on the books of the Corporation as of the close of business on the record
date for such meeting. Unless the voting is conducted by inspectors, all
questions relating to the qualifications of voters, validity of proxies and
acceptance or rejection of votes shall be decided by the chairman of the
meeting.
SECTION 6. Record Date; Closing of Transfer Books. The Board of
Directors may fix, in advance, a date as the record date for the purpose of
determining stockholders entitled to notice of, or to vote at, any meeting of
stockholders, or stockholders entitled to receive payment of any dividend or the
allotment of any rights, or in order to make a determination of stockholders for
any other proper purpose. Such date, in any case, shall be not more than sixty
days, and in case of a meeting of stockholders not less than ten days, prior to
the date on which the particular action requiring such determination of
stockholders is to be taken. In lieu of fixing a record date, the Board of
Directors may provide that the stock transfer books shall be closed for a stated
period but not to exceed, in any case, twenty days. If the stock transfer books
are closed for the purpose of determining stockholders entitled to notice of or
to vote at a meeting of stockholders, such books shall be closed for at least
ten days immediately preceding such meeting.
SECTION 7. Registered Stockholders. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not
it shall have express or other notice thereof.
SECTION 8. Calling of Special Meeting of Shareholders. A special meeting
of stockholders shall be called upon the written request of the holders of
shares entitled to cast not less than 10% of all votes entitled to vote at such
meeting.
ARTICLE II
BOARD OF DIRECTORS
SECTION 1. Number, Qualification, Tenure and Vacancies. The initial
Board of Directors shall consist of five (5) directors. Except as hereinafter
provided, a director shall be elected to serve until his successor shall be
elected and shall qualify or until his earlier death, resignation, retirement or
removal. The directors may at any time when the stockholders are not assembled
in meeting, establish, increase or decrease their own number by majority vote of
the entire Board of Directors; provided, that the number of directors shall
never be less than three (3) nor more than twelve (12). The number of directors
may not be decreased so as to affect the term of any incumbent director. If the
number be increased, the additional directors to fill the vacancies thus created
may, except as hereinafter provided, by elected by majority vote of the entire
Board of Directors. Any vacancy occurring for any cause may be filled by a
majority of the remaining members of the Board of Directors, although such
majority is less than a quorum; provided, however, that after filling any
vacancy for any cause whatsoever two-thirds (2/3) of the entire Board of
Directors shall have been elected by the stockholders of the Corporation. A
director elected under any circumstance shall be elected to hold office until
his successor is elected and qualified, or until such director's earlier death,
resignation, retirement or removal.
SECTION 2. When Stockholder Meeting Required. If at any time less than a
majority of the directors holding office were elected by the stockholders of the
Corporation, the directors or the President or Secretary shall cause a meeting
of stockholders to be held as soon as possible and, in any event, within sixty
(60) days, unless extended by order of the Securities and Exchange Commission,
for the purpose of electing directors to fill any vacancy.
SECTION 3. Regular Meetings. Regular meetings of the Board of Directors
may be held at such time and place as shall be determined from time to time by
agreement or fixed by resolution of the Board of Directors.
SECTION 4. Special Meetings. Special meetings of the Board of Directors
may be called at any time by the Chairman of the Board or President and shall be
called by the Secretary upon the written request of any two (2) directors.
SECTION 5. Notice of Meetings. Except as otherwise provided in these
Bylaws, notice need not be given of regular meetings of the Board of Directors
held at times fixed by agreement or resolution of the Board of Directors. Notice
of special meetings of the Board of Directors, stating the place, date and time
thereof, shall be given not less than two (2) days before such meeting to each
director. Notice to a director may be given personally, by telegram, cable or
wireless, by telephone, by mail, or by leaving such notice at his place of
residence or usual place of business. If mailed, such notice shall be deemed to
be given when deposited in the United States mail, postage prepaid, directed to
the director at his address as it appears on the records of the Corporation.
Meetings may be held at any time without notice if all the directors are
present, or if those not present waive notice of the meeting in writing. If the
President shall determine in advance that a quorum would not be present on the
date set for any regular or special meeting, such meeting may be held at such
later date, time and place as he shall determine, upon at least twenty-four (24)
hours' notice.
SECTION 6. Quorum. A majority of the directors then in office, at a
meeting duly assembled, but not less than one-third of the entire Board of
Directors nor in any event less than two directors, shall constitute a quorum
for the transaction of business. The vote of a majority of directors present at
a meeting at which a quorum is present shall be the act of the Board of
Directors, except as may be otherwise specifically provided by statute or by the
Articles of Incorporation or by these Bylaws. If at any meeting of the Board of
Directors, there shall be less than a quorum present, a majority of those
present may adjourn the meeting, without further notice, from time to time until
a quorum shall have been obtained.
SECTION 7. Removal. At any meeting of stockholders, duly called and at
which a quorum is present, the stockholders may, by the affirmative vote of the
holders of a majority of the votes entitled to be cast thereon, remove any
director or directors from office and may elect a successor or successors to
fill any resulting vacancies.
SECTION 8. Committees. The Board of Directors, may, by resolution
adopted by a majority of the entire Board of Directors, from time to time
appoint from among its members one or more committees as it may determine. Each
committee appointed by the Board of Directors shall be composed of two (2) or
more directors and may, to the extent provided in such resolution, have and
exercise all the powers of the Board of Directors, except the power to declare
dividends, to issue stock or to recommend to stockholders any action requiring
stockholder approval. Each such committee shall serve at the pleasure of the
Board of Directors. Each such committee shall keep a record of its proceedings
and shall adopt its own rules of procedure. It shall make reports as may be
required by the Board of Directors.
ARTICLE III
OFFICERS AND CHAIRMAN OF THE BOARD OF DIRECTORS
SECTION 1. Offices. The elected officers of the Corporation shall be the
President, the Secretary and the Treasurer, and may also include one or more
Vice Presidents, one or more Assistant Secretaries, one or more Assistant
Treasurers and such other officers as the Board of Directors may determine. Any
two or more offices may be held by the same person, except that no person may
hold both the office of President and the office of Vice President. A person who
holds more than one office in the Corporation shall not act in more than one
capacity to execute, acknowledge or verify an instrument required by law to be
executed, acknowledged or verified by more than one officer.
SECTION 2. Selection, Term of Office and Vacancies. The initial
officers of the Corporation shall be elected by the Board of Directors at the
first meeting of the Board of Directors. Additional officers may be elected at
any regular or special meeting of the Board of Directors. Each officer shall
serve at the pleasure of the Board of Directors or until his earlier death,
resignation or retirement. If any office becomes vacant, the vacancy shall be
filled by the Board of Directors.
SECTION 3. Chairman of the Board. The Board of Directors may elect one
of its members as Chairman of the Board. Except as otherwise provided in these
Bylaws, in the event the Board of Directors elects a Chairman of the Board of
Directors, he shall preside at all meetings of the stockholders and the Board of
Directors and shall perform such other duties as from time to time may be
assigned to him 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. President. The president shall be the chair executive officer
of the Corporation and shall perform such other duties as from time to time may
be assigned to him by the Board of Directors. He shall perform the duties of the
Chairman of the Board of Directors in the event there is no Chairman or in the
event the Chairman is absent.
SECTION 5. Vice Presidents. A Vice President shall perform such duties
as may be assigned by the President or the Board of Directors. In the absence of
the President and in accordance with such order of priority as may be
established by the Board of Directors, he may perform the duties of the
President, and when so acting, shall have all the powers of and be subject to
all the restrictions upon the President.
SECTION 6. Secretary. The Secretary shall (a) keep the minutes of the
stockholders' and Board of Directors' meetings in one or more books provided for
that purpose, and shall perform like duties for committees when requested, (b)
see that all notices are duly given in accordance with the provisions of these
Bylaws or as required by law, (c) be custodian of the corporate records and of
the seal of the Corporation and see that the seal of the Corporation is affixed
to all documents the execution of which on behalf of the Corporation under its
seal is duly authorized or required by law, and (d) in general perform all
duties incident to the office of Secretary and such other duties as may be
assigned by the President or the Board of Directors.
SECTION 7. Assistant Secretaries. One or more Assistant Secretaries may
be elected by the Board of Directors or appointed by the President. In the
absence of the Secretary and in accordance with such order as may be established
by the Board of Directors, an Assistant Secretary shall have the power to
perform his duties including the certification, execution and attestation of
corporate records and corporate instruments. Assistant Secretaries shall perform
such other duties as may be assigned to them by the President or the Board of
Directors.
SECTION 8. Treasurer. The Treasurer (a) shall be the principal financial
officer of the Corporation, (b) shall see that all funds and securities of the
Corporation are held by the custodian of the Corporation's assets, and (c) shall
be the principal accounting officer of the Corporation.
SECTION 9. Assistant Treasurers. One or more Assistant Treasurers may be
elected by the Board of Directors or appointed by the President. In the absence
of the Treasurer and in accordance with such order as may be established by the
Board of Directors, an Assistant Treasurer shall have the power to perform his
duties. Assistant Treasurers shall perform such other duties as may be assigned
to them by the President or the Board of Directors.
SECTION 10. Other Officers. The Board of Directors may appoint or may
authorize the Chairman of the Board or the President to appoint such other
officers and agents as the appointer may deem necessary and proper, who shall
hold their offices for such terms and shall exercise such powers and perform
such duties as shall be determined from time to time by the appointer.
SECTION 11. Bond. If required by the Board of Directors, the Treasurer
and such other directors, officers, employees and agents of the Corporation as
the Board of Directors may specify, shall give the Corporation a bond in such
amount, in such form and with such security, surety or sureties, as may be
satisfactory to the Board of Directors, conditioned on the faithful performance
of the duties of their office and for the restoration to the Corporation, in
case of their death, resignation, or removal from their office of all books,
papers, vouchers, monies, securities and property of whatever kind in their
possession belonging to the Corporation. All premiums on such bonds shall be
paid by the Corporation.
SECTION 12. Removal. Any officer (or the Chairman of the Board of
Directors) of the Corporation may be removed by the Board of Directors whenever,
in its judgment, the best interests of the Corporation will be served thereby,
but such removal shall be without prejudice to the contractual rights, if any,
of the officer (or the Chairman of the Board of Directors) so removed.
ARTICLE IV
CAPITAL STOCK
SECTION 1. Stock Certificates. Certificates representing shares of
stock of the Corporation shall be in such form consistent with the laws of the
State of Maryland as shall be determined by the Board of Directors. All
certificates for shares of stock shall be consecutively numbered or otherwise
identified. The name and address of the person to whom the shares of stock
represented thereby are issued, with the number of shares and date of issue,
shall be entered on the stock transfer records of the Corporation.
SECTION 2. Redemption and Transfer. Any holder of stock of the
Corporation desiring to redeem or transfer shares of stock standing in the name
of such holder on the books of the Corporation shall deliver to the Corporation
or to its agent duly authorized for such purpose a written unconditional
request, in form acceptable to the Corporation, for such redemption or transfer.
If certificates evidencing such shares have been issued, such certificates shall
also be so delivered in transferable form duly endorsed or accompanied by all
necessary stock transfer stamps or currency or certified or bank cashier's check
payable to the order of the Corporation for the appropriate price thereof. The
Corporation or its duly authorized agent may require that the signature of a
redeeming stockholder on any or all of the request, endorsement or stock power
be guaranteed and that other documentation in accordance with the custom of
brokers be so delivered where appropriate, such as proof of capacity and power
to make request or transfer. All documents and funds shall be deemed to have
been delivered only when physically deposited at such office or other place of
deposit as the Corporation or its duly authorized agent shall from time to time
designate. At any time during which the right of redemption is suspended or
payment for such shares is postponed pursuant to the Investment Company Act of
1940, as amended, or any rule, regulation or order thereunder, any stockholder
may withdraw his request (and certificates and funds, if any) or may leave the
same on deposit, in which case the redemption price shall be the net asset value
next applicable after such suspension or postponement is terminated.
SECTION 3. Lost, Mutilated, Destroyed or Wrongfully Taken Certificates.
Any person claiming a stock certificate to have been lost, mutilated, destroyed
or wrongfully taken, and who requests the issuance of a new certificate before
the Corporation has notice that the certificate alleged to have been lost,
mutilated, destroyed or wrongfully taken has been acquired by a bona fide
purchaser, shall make an affidavit of that fact and shall give the Corporation
and its transfer agents and registrars a bond, with sufficient surety, to
indemnify them against any loss or claim arising as a result of the issuance of
a new certificate. The form and amount of such bond and the surety thereon shall
in each case be deemed sufficient if satisfactory to the President or Treasurer
of the Corporation.
ARTICLE V
GENERAL PROVISIONS
SECTION 1. Fiscal Year. The fiscal year of the Corporation shall be
established by resolution of the Board of Directors.
SECTION 2. Amendments. These Bylaws may be altered, amended or repealed
and new Bylaws may be adopted by a majority of the entire Board of Directors at
any meeting of the Board of Directors.
SECTION 3. Names of Classes and Series of Shares. The names of the
classes and series of shares which have been classified by the Corporation in
its Articles of Incorporation and in Articles Supplementary shall be as follows:
<TABLE>
<CAPTION>
Designation of Shares
in Articles of Incorporation
or Articles Supplementary Name of Class or Series
- ------------------------- -----------------------
<S> <C>
Class A Common Shares ..................... Intermediate Government Bond Fund,
Retail Class or Class A
Class A, Series 2 Common Shares ........... Intermediate Government Bond Fund,
Institutional Class or Class C
Class A, Series 3 Common Shares ........... Intermediate Government Bond Fund,
CDSC Class or Class B
Class B Common Shares ..................... Fixed Income Fund, Retail Class or Class A
Class B, Series 2 Common Shares ........... Fixed Income Fund, Institutional Class or
Class B
Class B, Series 3 Common Shares ........... Fixed Income Fund, CDSC Class or Class B
Class C Common Shares ..................... Intermediate Tax Free Fund, Retail Class or
Class A
Class C, Series 2 Common Shares ........... Intermediate Tax Free Fund, Institutional
Class or Class C
Class C, Series 3 Common Shares ........... Intermediate Tax Free Fund, CDSC Class or
Class B
Class D Common Shares ..................... Stock Fund, Retail Class or Class A
Class D, Series 2 Common Shares ........... Stock Fund, Institutional Class or Class C
Class D, Series 3 Common Shares ........... Stock Fund, CDSC Class or Class B
Class E Common Shares ..................... Special Equity Fund, Retail Class or Class A
Class E, Series 2 Common Shares ........... Special Equity Fund, Institutional Class or Class C
Class E, Series 3 Common Shares ........... Special Equity Fund, CDSC Class or Class B
Class F Common Shares ..................... Asset Allocation Fund, Retail Class or Class A
Class F, Series 2 Common Shares ........... Asset Allocation Fund, Institutional Class or Class C
Class F, Series 3 Common Shares ........... Asset Allocation Fund, CDSC Class or Class B
Class G Common Shares ..................... Balanced Fund, Retail Class or Class A
Class G, Series 2 Common Shares ........... Balanced Fund, Institutional Class or Class C
Class G, Series 3 Common Shares ........... Balanced Fund, CDSC Class or Class B
Class H Common Shares ..................... Equity Index Fund, Retail Class or Class A
Class H, Series 2 Common Shares ........... Equity Index Fund, Institutional Class or Class C
Class H, Series 3 Common Shares ........... Equity Index Fund, CDSC Class or Class B
Class I Common Shares ..................... Intermediate Term Income Fund, Retail Class or Class A
Class I, Series 2 Common Shares ........... Intermediate Term Income Fund, Institutional Class or Class C
Class I, Series 3 Common Shares ........... Intermediate Term Income Fund, CDSC Class or Class B
Class J Common Shares ..................... Limited Term Income Fund, Retail Class or Class A
Class J, Series 2 Common Shares ........... Limited Term Income Fund, Institutional Class or Class C
Class J, Series 3 Common Shares ........... Limited Term Income Fund, CDSC Class or Class B
Class K Common Shares ..................... Reserved (formerly Mortgage Securities Fund,
Retail Class or Class A)
Class K, Series 2 Common Shares ........... Reserved (formerly Mortgage Securities Fund,
Institutional Class or Class C)
Class K, Series 3 Common Shares ........... Reserved (formerly Mortgage Securities
Fund, CDSC Class or Class B)
Class L Common Shares ..................... Regional Equity Fund, Retail Class or Class A
Class L, Series 2 Common Shares ........... Regional Equity Fund, Institutional Class or Class C
Class L, Series 3 Common Shares ........... Regional Equity Fund, CDSC Class or Class B
Class M Common Shares ..................... Minnesota Insured Intermediate Tax Free
Fund, Retail Class or Class A
Class M, Series 2 Common Shares ........... Minnesota Insured Intermediate Tax Free
Fund, Institutional Class or Class C
Class M, Series 3 Common Shares ........... Minnesota Insured Intermediate Tax Free
Fund, CDSC Class or Class B
Class N Common Shares ..................... Colorado Intermediate Tax Free Fund,
Retail Class or Class A
Class N, Series 2 Common Shares ........... Colorado Intermediate Tax Free Fund,
Institutional Class or Class C
Class N, Series 3 Common Shares ........... Colorado Intermediate Tax Free Fund,
CDSC Class or Class B
Class O Common Shares ..................... Emerging Growth Fund, Retail Class or
Class A
Class O, Series 2 Common Shares ........... Emerging Growth Fund, Institutional Class
or Class C
Class O, Series 3 Common Shares ........... Emerging Growth Fund, CDSC Class or Class B
Class P Common Shares ..................... Technology Fund, Retail Class or Class A
Class P, Series 2 Common Shares ........... Technology Fund, Institutional Class or Class C
Class P, Series 3 Common Shares ........... Technology Fund, CDSC Class or Class B
Class Q Common Shares ........ ............ International Fund, Retail Class or Class A
Class Q, Series 2 Common Shares ........... International Fund, Institutional Class or Class C
Class Q, Series 3 Common Shares ........... International Fund, CDSC Class or Class B
Class R Common Shares ..................... Reserved (formerly Limited Volatility Stock
Fund, Retail Class or Class A)
Class R, Series 2 Common Shares ........... Reserved (formerly Limited Volatility Stock
Fund, Institutional Class or Class C)
Class R, Series 3 Common Shares ........... Reserved (formerly Limited Volatility Stock
Fund, CDSC Class or Class B)
Class S Common Shares ..................... Diversified Growth Fund, Retail Class or
Class A
Class S, Series 2 Common Shares ........... Diversified Growth Fund, CDSC Class or Class B
Class S, Series 3 Common Shares ........... Diversified Growth Fund, Institutional Class or Class C
Class T Common Shares ..................... Equity Income Fund, Retail Class or Class A
Class T, Series 2 Common Shares ........... Equity Income Fund, CDSC Class or Class B
Class T, Series 3 Common Shares ........... Equity Income Fund, Institutional Class or Class C
Class U Common Shares ..................... Reserved (formerly Limited Term Tax Free
Income Fund, Retail Class or Class A)
Class U, Series 2 Common Shares ........... Reserved (formerly Limited Term Tax Free
Income Fund, CDSC Class or Class B)
Class U, Series 3 Common Shares ........... Reserved (formerly Limited Term Tax Free
Income Fund, Institutional Class or Class C)
Class V Common Shares ..................... Real Estate Securities Fund, Retail Class or
Class A
Class V, Series 2 Common Shares ........... Real Estate Securities Fund, CDSC Class or
Class B
Class V, Series 3 Common Shares ........... Real Estate Securities Fund, Institutional Class or
Class C
Class W Common Shares ..................... Health Sciences Fund, Retail Class or Class A
Class W, Series 2 Common Shares ........... Health Sciences Fund, CDSC Class or Class B
Class W, Series 3 Common Shares ........... Health Sciences Fund, Institutional Class or Class C
</TABLE>
