FIRSTAR FUNDS INC
DEFS14A, 2000-09-28
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<PAGE>

                                 SCHEDULE 14A
                                (RULE 14a-101)
                    INFORMATION REQUIRED IN PROXY STATEMENT


                           SCHEDULE 14A INFORMATION
          PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
                             EXCHANGE ACT OF 1934


Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[ ] Preliminary Proxy Statement            [_]  Confidential, For Use of the
                                                Commission Only (as permitted By
                                                Rule 14a-6(e)(2))


[X] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Under Rule 14a-11(c) or Rule 14a-12


                              Firstar Funds, Inc.
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               (Name of Registrant as Specified In Its Charter)


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   (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)


Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.


(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11. (Set forth the amount on which the filing fee is
calculated and state how it was determined):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[_] Fee paid previously with preliminary materials.

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[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

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<PAGE>


                                                        September 29, 2000

Dear Shareholder:

   The Board of Directors of Firstar Funds, Inc. (the "Company") is pleased to
announce a special meeting of shareholders of the Core International Equity
Fund (the "Fund") on November 8, 2000, at 11:00 a.m. (Eastern time) at the
offices of the Company's legal counsel, Drinker Biddle & Reath LLP, One Logan
Square, 18th and Cherry Streets, Philadelphia, Pennsylvania, 19103 (the
"Special Meeting"), to act on a proposal to change the sub-adviser for the
Fund.

   As part of the reorganization between the mutual fund portfolios of the
Company and Mercantile Mutual Funds, Inc. ("Mercantile"), the Mercantile
International Equity Portfolio will be reorganized into the Fund upon approval
of the Mercantile International Equity Portfolio's shareholders. In
conjunction with the proposed reorganization with Mercantile, however, the
Company's investment adviser has proposed the hiring of Clay Finlay, Inc.
("Clay Finlay"), the current sub-adviser to the Mercantile International
Equity Portfolio, to provide sub-advisory services to the Fund.

   The Board of Directors has unanimously approved the proposal, which is
described in detail in the enclosed proxy materials.

   The formal Notice of Special Meeting, Proxy Statement and Proxy Card is
enclosed.

   Whether or not you plan to attend the Special Meeting, you may vote by
proxy in any of the following ways:

     1. Internet--Instructions for casting your vote via the Internet can be
  found on the enclosed Proxy Card. The required control number is printed on
  your enclosed Proxy Card. If this feature is used, you are giving
  authorization for another person to execute your proxy and there is no need
  to mail the Proxy Card.

     2. Telephone--Instructions for casting your vote via telephone can be
  found on the enclosed Proxy Card. The toll-free 800 number and required
  control number are printed on your enclosed Proxy Card. If this feature is
  used, you are giving authorization for another person to execute your proxy
  and there is no need to mail the Proxy Card.

     3. By mail--If you vote by mail, please indicate your voting
  instructions on the enclosed Proxy Card, date and sign the Proxy Card, and
  return it in the envelope provided, which is addressed for your convenience
  and needs no postage if mailed in the United States.

   If you have any questions concerning the proxy materials, please contact
our proxy solicitor, D.F. King & Co., Inc. at 1-800-207-3159.

   YOUR VOTE IS IMPORTANT TO US. PLEASE REVIEW THE ENCLOSED MATERIALS AND, IF
YOU DO NOT PLAN TO ATTEND THE SPECIAL MEETING, COMPLETE, SIGN, DATE AND RETURN
THE ENCLOSED PROXY CARD TODAY. IT IS IMPORTANT THAT YOU RETURN THE PROXY CARD
TO ENSURE THAT YOUR SHARES WILL BE REPRESENTED AT THE SPECIAL MEETING. YOU MAY
ALSO VOTE YOUR PROXY BY A TOLL-FREE PHONE CALL OR BY VOTING ON-LINE AS
INDICATED ON THE ENCLOSED PROXY CARD.

   We look forward to your attendance at the Special Meeting or receiving your
Proxy Card or your on-line or telephone instructions so that your shares may
be voted at the Special Meeting. THE BOARD OF DIRECTORS OF THE COMPANY
UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL DESCRIBED IN THE PROXY
STATEMENT.
                                          Sincerely,

                                     /s/ James M. Wade
                                          James M. Wade
                                          Chairman of the Board of Directors
<PAGE>

                              FIRSTAR FUNDS, INC.
                           615 EAST MICHIGAN STREET
                        MILWAUKEE, WISCONSIN 53201-3011

                   NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
                        TO BE HELD ON NOVEMBER 8, 2000

                                                        September 29, 2000

To the Shareholders of the
Core International Equity Fund:

   A Special Meeting of Shareholders (the "Special Meeting") of the Core
International Equity Fund (the "Fund") of Firstar Funds, Inc. (the "Company")
will be held on November 8, 2000, at 11:00 a.m. (Eastern time), at the offices
of the Company's legal counsel, Drinker Biddle & Reath LLP, One Logan Square,
18th and Cherry Streets, Philadelphia, Pennsylvania 19103.

   Shareholders will be asked to consider and act upon the following matters
at the Special Meeting:

     1) The approval or disapproval of a new investment sub-advisory
  agreement on behalf of the Fund by and among the Company, Firstar
  Investment Research & Management Company, LLC and Clay Finlay, Inc.; and

     2) The transaction of such other business as may properly come before
  the Special Meeting or any adjournment thereof.

   The proposal stated above is discussed in detail in the attached Proxy
Statement. Shareholders of record as of the close of business on September 11,
2000 are entitled to notice of, and to vote at, the special meeting or any
adjournment thereof. YOUR DIRECTORS UNANIMOUSLY RECOMMEND THAT YOU VOTE FOR
THE PROPOSAL.

   YOU ARE REQUESTED TO MARK, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE THE PROXY CARD THAT IS BEING SOLICITED BY THE COMPANY'S BOARD OF
DIRECTORS. YOU ALSO MAY RETURN PROXIES BY: 1) TOUCH-TONE TELEPHONE VOTING OR
2) VOTING ON-LINE AS DESCRIBED ON THE ENCLOSED PROXY CARD. THIS IS IMPORTANT
TO ENSURE A QUORUM AT THE SPECIAL MEETING. PROXIES MAY BE REVOKED AT ANY TIME
BEFORE THEY ARE EXERCISED BY SUBMITTING TO THE SECRETARY OF THE COMPANY A
WRITTEN NOTICE OF REVOCATION OR A SUBSEQUENTLY EXECUTED PROXY OR BY ATTENDING
THE SPECIAL MEETING AND VOTING IN PERSON.

                                    /s/ W. Bruce McConnel, III
                                          W. Bruce McConnel, III
                                          Secretary
<PAGE>

                              FIRSTAR FUNDS, INC.
                           615 EAST MICHIGAN STREET
                        MILWAUKEE, WISCONSIN 53201-3011

                                PROXY STATEMENT

   This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors (the "Board") of Firstar Funds, Inc. (the
"Company") for use at a Special Meeting of Shareholders of the Core
International Equity Fund (the "Fund") of the Company and any adjournment(s)
thereof (the "Special Meeting") to be held on November 8, 2000 at 11:00 a.m.
(Eastern time), at the offices of the Company's legal counsel, Drinker Biddle
& Reath LLP, One Logan Square, 18th and Cherry Streets, Philadelphia,
Pennsylvania.

   Proxies will be solicited by mail. Officers and service contractors of the
Company or Firstar Investment Research and Management Company, LLC ("FIRMCO"),
the Fund's investment adviser, may also solicit proxies by telephone,
facsimile, Internet, telegraph or personal interview. FIRMCO, with principal
offices at 777 East Wisconsin Avenue, Suite 800, Milwaukee, Wisconsin 53202,
will bear all proxy solicitation costs. Any shareholder giving a proxy may
revoke it at any time before it is exercised by submitting to the Company a
written notice of revocation or a subsequently executed proxy or by attending
the Special Meeting and electing to vote in person. The Proxy Statement and
the enclosed proxy card is expected to be distributed to shareholders of
record on or about September 29, 2000.

   Only shareholders of record at the close of business on September 11, 2000
("Record Date") will be entitled to notice of, and to vote at, the Special
Meeting. On the Record Date, the following number of shares were outstanding
and entitled to vote at the Special Meeting: 4,206,796.914 Class 19--
Institutional Series Common Stock, 3,109.114 Class 19--A Series Common Stock,
11,984.937 Class 19--B Series Common Stock, and 0 Class 19--Y Series Common
Stock.

   Although shares of the Fund have been divided into four series, the
Proposal to be presented at the Special Meeting, will be voted upon by all
shares of the Fund in the aggregate and not on a series by series basis. Each
shareholder of record on the Record Date is entitled to one vote for each full
share held and a proportionate fractional vote for any fractional shares held.

   The following Proposal will be voted on at the Special Meeting:

     To approve a new investment sub-advisory agreement on behalf of the Fund
  by and among the Company, FIRMCO and Clay Finlay, Inc.

   Signed proxies received by the Company in time for voting and not revoked
will be voted in accordance with the directions specified therein. Proxies
also may be voted by toll-free phone call or on-line voting as described on
the enclosed Proxy Card. THE BOARD RECOMMENDS A VOTE FOR THE PROPOSAL. If no
specification is made, the proxy will be voted FOR the Proposal.

                    PROPOSAL: APPROVAL OF A NEW INVESTMENT
                      SUB-ADVISORY AGREEMENT FOR THE FUND

   At a regular meeting of the Company's Board held on June 16, 2000, the
Board unanimously approved the reorganization of the mutual funds of
Mercantile Mutual Funds, Inc. (the "Mercantile Funds") into corresponding
mutual funds of the Company (the "Reorganization"). Upon approval of the
Reorganization by the shareholders of the Mercantile Funds and completion of
the Reorganization, the International Equity Portfolio of Mercantile Mutual
Funds, Inc. (the "Mercantile International Portfolio") will be reorganized
into the Fund. In connection with the Reorganization, it is proposed that a
new Investment Sub-Advisory Agreement among the Company, FIRMCO and Clay
Finlay, Inc. ("Clay Finlay"), the current sub-adviser to the Mercantile
International Portfolio (the "New Sub-Advisory Agreement"), be entered into on
behalf of the Fund. Clay Finlay would replace Glenmede Advisers, Inc.
("Glenmede") as sub-adviser to the Fund. A copy of the New
<PAGE>

Sub-Advisory Agreement is attached to this Proxy Statement as Exhibit A. (Also
in connection with the Reorganization, the Fund's name will be changed to the
International Growth Fund. Shareholder approval is not required to effect this
change.)

   Headquartered in New York, Clay Finlay has research offices in London,
Geneva, Tokyo and Melbourne. The International Equity team has eighteen
members (six portfolio managers, eleven analysts and one investment
strategist). Research is produced both by research analysts and by the
portfolio managers, with a focus on large and medium capitalization stocks.
Glenmede operates from a centralized location in Philadelphia, with a team of
55 professionals. The company's focus is primarily on large capitalization
securities.

   FIRMCO currently serves as the Fund's investment adviser pursuant to
Addendum No. 7 dated as of November 1, 1999 (the "Addendum") to an Investment
Advisory Agreement dated as of March 27, 1992 (the "Advisory Agreement")
between the Company and FIRMCO. The Addendum authorizes FIRMCO to employ, at
FIRMCO's expense, one or more sub-advisers to assist FIRMCO in performing its
responsibilities under the Advisory Agreement. FIRMCO has appointed Glenmede
to serve as sub-adviser to the Fund, pursuant to an Investment Sub-Advisory
Agreement among the Company, FIRMCO and Glenmede dated as of September 1, 2000
(the "Current Sub-Advisory Agreement"). The Glenmede Trust Company ("GTC")
initially provided sub-advisory services to the Fund pursuant to an Investment
Sub-Advisory Agreement among the Company, FIRMCO and GTC dated as of November
1, 1999 (the "Initial Sub-Advisory Agreement"). The Initial Sub-Advisory
Agreement was approved by the Fund's sole initial shareholder on November 3,
1999. At the June 16, 2000 meeting of the Company's Board, the Board approved
the Current Sub-Advisory Agreement after determining that no change in control
or management will occur as a result of approving Glenmede as sub-adviser to
the Fund. Glenmede is a wholly-owned subsidiary of GTC. Glenmede's principal
offices are at One Liberty Place, 1650 Market Street, Suite 1200,
Philadelphia, Pennsylvania 19103. Under the terms of the Current Sub-Advisory
Agreement, subject to the oversight and supervision of the Company's Board and
FIRMCO, Glenmede formulates and implements a continuous investment program for
the Fund. Glenmede furnishes investment advisory and portfolio management
services to the Fund with respect to its investments. Glenmede is responsible
for decisions to buy and sell the Fund's investments. Glenmede negotiates
brokerage commissions and places orders for purchases and sales of the Fund's
portfolio securities. Glenmede bears all expenses incurred by it in connection
with its services under the Current Sub-Advisory Agreement. For the services
performed and expenses assumed under the Current Sub-Advisory Agreement,
Glenmede is entitled to a fee, payable by FIRMCO, computed daily and paid
monthly at the following annual rates: 0.50% of the Fund's first $50 million
in average daily net assets plus 0.30% of the Fund's average daily net assets
in excess of $50 million.

   The Current Sub-Advisory Agreement provides that in executing portfolio
transactions and in selecting brokers or dealers to execute transactions,
Glenmede will use its best efforts to seek on behalf of the Fund the best
overall terms available. The Current Sub-Advisory Agreement authorizes
Glenmede to consider brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934) provided to
the Fund and/or other accounts over which Glenmede or its affiliates exercise
investment discretion. In addition, Glenmede is authorized to take into
account the sales of shares of the Company in allocating purchase and sale
orders for portfolio securities to brokers or dealers (including brokers and
dealers that are affiliated with FIRMCO, Glenmede, or the Company's principal
underwriter), provided that Glenmede believes the quality of the transactions
and the commissions are comparable to what they would be with other qualified
firms.

   The Current Sub-Advisory Agreement provides that Glenmede will not be
liable for any error of judgment or mistake of law or for any loss relating to
its services, provided that this protection does not relieve Glenmede of
liability for which Glenmede would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties,
or from reckless disregard of its obligations and duties under the Current
Sub-Advisory Agreement.

   The Current Sub-Advisory Agreement is terminable at any time, without the
payment of any penalty, by Glenmede, FIRMCO or by the Company (by vote of the
Board or by the vote of a majority of the outstanding voting securities of the
Fund) on sixty days' written notice. The Current Sub-Advisory Agreement will

                                       2
<PAGE>

automatically terminate in the event of its assignment, and will also
terminate upon the termination of the Advisory Agreement.

   The terms of the New Sub-Advisory Agreement and responsibilities of Clay
Finlay thereunder are substantially the same as those stated above for the
Current Sub-Advisory Agreement except for the compensation payable to Clay
Finlay. If the Proposal is approved and the New Sub-Advisory Agreement takes
effect, Clay Finlay will be entitled to a fee, computed daily and paid
monthly, at the following annual rates: 0.75% of the first $50 million of the
Fund's average daily net assets; plus 0.50% of the next $50 million of average
daily net assets; plus 0.25% of average daily net assets in excess of $100
million. THIS COMPENSATION WILL BE PAID BY FIRMCO FROM ITS FEE UNDER THE
ADVISORY AGREEMENT AND WILL NOT RESULT IN ANY CHANGE IN THE TOTAL ADVISORY
FEES PAYABLE BY THE FUND.

   Clay Finlay, which was founded in 1982, is a registered investment adviser
and a wholly owned subsidiary of United Asset Management Corporation ("UAM"),
a financial services holding company. Clay Finlay is an experienced
international investment manager. As of June 30, 2000 Clay Finlay had
approximately $5.7 billion of assets under management for separate private and
institutional accounts and investment companies. For more information about
Clay Finlay see "Additional Information--Clay Finlay."

   If approved by a majority of the outstanding shares of the Fund (as defined
below under "Voting Information--Required Vote"), the New Sub-Advisory
Agreement will become effective at the time of the Reorganization and will
continue in effect until February 28, 2002. Thereafter, if not terminated, the
New Sub-Advisory Agreement will continue in effect for successive annual
periods, provided such continuance is approved at least annually (i) by the
vote of a majority of those members of the Board who are not "interested
persons" of any party to the New Sub-Advisory Agreement (as that term is
defined in the 1940 Act), cast in person at a meeting called for the purpose
of voting on such approval, and (ii) by the Board or by vote of a majority of
the outstanding voting securities of the Fund.

   Evaluation by the Company's Board. The New Sub-Advisory Agreement was
unanimously approved by the Board and by a majority of those members of the
Board who are not "interested persons" (as that term is defined in the 1940
Act) of any party to the New Sub-Advisory Agreement at a meeting held on June
16, 2000. In reaching its decision, the Board considered the following factors
to be material and of greatest importance: (1) the proposed reorganization of
the Mercantile International Portfolio into the Fund and the fact that the
asset base of the Mercantile International Portfolio is approximately three
times larger than the asset base of the Fund, and (2) Clay Finlay's investment
management style, qualifications, experience and its record of asset growth
and high performance of accounts it manages. Based on its evaluation, the
Board concluded that approval of the New Sub-Advisory Agreement would be in
the best interests of the Fund and its shareholders.

   THE COMPANY'S BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE APPROVAL
OF THE NEW SUB-ADVISORY AGREEMENT.

                              VOTING INFORMATION

   General Information. The Company's Board is furnishing this Proxy Statement
in connection with the solicitation of proxies for the Special Meeting. It is
expected that the solicitation of proxies will be primarily by mail. Officers
and service contractors of the Company may also solicit proxies by telephone
or otherwise. In this connection, the Trust has retained D.F. King & Co., Inc.
("D.F. King") to assist in the solicitation of proxies for the Reorganization.
Shareholders may vote by (1) mail by marking, signing, dating and returning
the enclosed proxy card in the enclosed postage-paid envelope, (2) by touch-
tone voting, or (3) by on-line voting. Any shareholder giving a proxy may
revoke it at any time before it is exercised by submitting to the Company a
written notice of revocation or a subsequently executed proxy or by attending
the Special Meeting and voting in person. As the Special Meeting date
approaches, certain shareholders may receive a telephone call from a
representative of D.F. King if their votes have not yet been received.
Authorization to permit D.F. King to execute proxies may be obtained by
telephonic or electronically transmitted instructions from shareholders of the
Fund. Proxies that are obtained telephonically will be recorded in accordance
with the procedures set forth below. The Trust's trustees believe that these
procedures are reasonably designed to ensure that the identity of the

                                       3
<PAGE>

shareholder casting the vote is accurately determined and that the voting
instructions of the shareholder are accurately determined.

   In all cases where a telephonic proxy is solicited, the D.F. King
representative is required to ask for each shareholder's full name, address,
social security or employer identification number, title (if the shareholder
is authorized to act on behalf of an entity, such as a corporation), and the
number of shares owned, and to confirm that the shareholder has received the
proxy materials in the mail. If the information solicited agrees with the
information provided to D.F. King then the D.F. King representative has the
responsibility to explain the process, to read the proposal on the proxy card,
and ask for the shareholder's instructions on the Proposal. The D.F. King
representative, although he or she is permitted to answer questions about the
process, is not permitted to recommend to the shareholder how to vote, other
than to read any recommendation set forth in this Proxy Statement. D.F. King
will record the shareholder's instructions on the card. Within 72 hours, the
shareholder will be sent a letter or mailgram to confirm his or her vote and
asking the shareholder to call D.F. King immediately if his or her
instructions are not correctly reflected in the confirmation.

   Any expenses incurred as a result of hiring D.F. King or any other proxy
solicitation agent will be borne by FIRMCO or its affiliates. It is
anticipated that the cost associated with using a proxy solicitation agent
will be approximately $3,000.

   Quorum. A quorum for the transaction of business at the Special Meeting is
constituted by the presence in person or by proxy of holders of a majority of
the outstanding shares entitled to vote on the Proposal. In the event that a
quorum is not present at the Special Meeting or in the event that a quorum is
present at the Special Meeting but sufficient votes to approve the Proposal
described in this Proxy Statement are not received, the persons named as
proxies, or their substitutes, may propose one or more adjournments of the
Special Meeting to permit further solicitation of proxies. Any such
adjournment will require the affirmative vote of a majority of those shares
affected by the adjournment that are represented and voting at the Special
Meeting in person or by proxy. If a quorum is present, the persons named as
proxies will vote those proxies which they are entitled to vote FOR the
Proposal in favor of such adjournments, and will vote those proxies required
to be voted AGAINST the Proposal against any adjournment. Under the Company's
By-laws, a quorum is constituted with respect to the Fund by the presence in
person or by proxy of the holders of more than 50% of the outstanding shares
of the Fund entitled to vote at the Special Meeting. For purposes of
determining the presence of a quorum for transacting business at the Special
Meeting, abstentions, but not broker "non-votes" (i.e., proxies from brokers
or nominees indicating that such persons have not received instructions from
the beneficial owners or other persons entitled to vote shares on the Proposal
with respect to which the brokers or nominees do not have discretionary
power), will be treated as shares that are present at the Special Meeting but
which have not been voted. Abstentions and broker "non-votes" will have the
effect of a vote against the Proposal for purposes of obtaining the requisite
approval of the Proposal.

   Required Vote. Approval of the Proposal requires the affirmative vote of a
"majority of the outstanding voting securities" of the Fund. The term
"majority of the outstanding voting securities" means the vote of (a) 67% or
more of the voting securities of the Fund present at such meeting, if the
holders of more than 50% of the outstanding voting securities of such Fund are
present or represented by proxy; or (b) more than 50% of the outstanding
voting securities of the Fund, whichever is less.

                                       4
<PAGE>

   Other Shareholder Information. As of the Record Date, the name, address and
share ownership of each person who may have possessed sole or shared voting or
investment power with respect to more than 5% of the outstanding shares of the
Fund's respective share series were as follows:

<TABLE>
<CAPTION>
                                               PERCENTAGE
                       SERIES AND   PERCENTAGE  OF FUND
                        AMOUNT OF   OF SERIES    SHARES
NAME AND ADDRESS      SHARES OWNED    OWNED      OWNED
----------------      ------------- ---------- ----------
<S>                   <C>           <C>        <C>
Firstar Bank, N.A.    Institutional    100%      99.6%
425 Walnut Street     4,206,795.913
Cincinnati, OH 45202
</TABLE>

   For purposes of the 1940 Act, any person who owns directly or through one
or more controlled companies more than 25% of the voting securities of a
company is presumed to "control" such company. Accordingly, to the extent that
a shareholder is identified above as the beneficial holder of more than 25% of
the outstanding shares of the Fund, or is identified as the holder of record
of more than 25% of the outstanding shares of the Fund and has voting and/or
investment power, such shareholder may be presumed to control the Fund.

   The Company has been advised by Firstar Bank, N.A. that with respect to the
shares of the Fund over which Firstar Bank, N.A. and its affiliates have
voting power, such shares may be voted by Firstar Bank, N.A. itself in its
capacity as fiduciary.

                            ADDITIONAL INFORMATION

   Beneficial Ownership by Directors. As of the Record Date, the Company's
directors owned beneficially or of record no shares of the Fund.

   Clay Finlay. Clay Finlay, a New York corporation, is registered as an
investment adviser under the Investment Advisers Act of 1940 and maintains its
principal offices at 200 Park Avenue, 56th Floor, New York, New York 10066. As
mentioned above, Clay Finlay is a wholly owned subsidiary of United Asset
Management Corporation ("UAM"), a financial services holding company with
principal executive offices at One International Place, Boston, Massachusetts
02110. Clay Finlay has been engaged in the business of providing investment
advisory services since 1982. It is expected that prior to the date of the
Special Meeting UAM will be acquired by Old Mutual plc ("Old Mutual"), a
London based financial services group with a substantial life insurance
business in South Africa and an integrated, international portfolio of
activities in asset management, banking and general insurance. Following the
acquisition, UAM will be a wholly owned subsidiary, and Clay Finlay will be an
indirect subsidiary, of Old Mutual. Old Mutual's corporate headquarters is
located at 3rd Floor, Lansdowne House, 57 Berkeley Square, London W1X 5DH.

                                       5
<PAGE>

   Set forth below are the names and principal occupations of the directors
and the principal executive officer of Clay Finlay:

<TABLE>
<CAPTION>
NAME                        POSITION WITH CLAY FINLAY               OCCUPATION
----                        -------------------------               ----------
<S>                      <C>                              <C>
D. Francis Finlay....... President Chief Executive        President, Chief Executive
                         Officer Co-Chairman of the Board Officer and Co-Chairman of Clay
                                                          Finlay

D. Arthur Barton........ Director                         Principal and Chief
                                                          Administration Officer of Clay
                                                          Finlay

John P. Clay............ Principal Co-Chairman of the     Co-Chairman of Clay Finlay
                         Board

Frances R. E. Dakers.... Director                         Principal and Senior Portfolio
                                                          Manager of Clay Finlay

Gregory M. Jones........ Director                         Principal and Senior Portfolio
                                                          Manager of Clay Finlay

Susan B. Kenncally...... Director                         Principal and Senior Portfolio
                                                          Manager of Clay Finlay

Peter G R Lyon.......... Director                         Principal of Clay Finlay

Virginia Maisonneuvc.... Director                         Principal and Senior Portfolio
                                                          Manager of Clay Finlay
Robert C. Schletter..... Director                         Principal and Senior Portfolio
                                                          Manager of Clay Finlay
</TABLE>

   The address for each of the persons listed above is c/o Clay Finlay, Inc.,
200 Park Avenue, 56th Floor, New York, New York 10066.

   Clay Finlay serves as investment adviser to the following U.S. registered
investment company portfolio, which has similar investment objectives to the
Fund. The portfolio, the approximate net assets and the annual advisory fees
payable by the portfolio to Clay Finlay are as follows:

<TABLE>
<CAPTION>
                                 APPROXIMATE NET ASSETS     ANNUAL ADVISORY
FUND NAME                        (AS OF APRIL 30, 2000)       FEE PAYABLE
---------                        ---------------------- -----------------------
<S>                              <C>                    <C>
Mercantile International Equity
 Portfolio.....................       $130,282,084         $0-$50 million 0.75%
                                                         Next-$50 million 0.50%
                                                        Over $100 million 0.25%
</TABLE>

   Investment Adviser.  FIRMCO, a Wisconsin limited liability company and
subsidiary of Firstar Corporation, a bank holding company, serves as
investment adviser to the Fund. FIRMCO, with principal offices at Firstar
Center, 777 East Wisconsin Avenue, 8th Floor, Milwaukee, Wisconsin 53202 had
$33 billion in assets under management as of June 30, 2000.

   Distributor and Administrator. Quasar Distributors, LLC, with principal
offices at 615 East Michigan Street, Milwaukee, Wisconsin 53202, serves as the
distributor of the Company's shares. Firstar Mutual Fund Services, LLC, with
principal offices at 615 East Michigan Street, Milwaukee, Wisconsin 53202
serves as the administrator of the Company.

   Principal Office. The principal office of the Company is 615 East Michigan
Street, Milwaukee, Wisconsin 53202.

   Shareholder Meetings. The Company's Board of Directors has adopted a By-Law
in accordance with the Wisconsin Business Corporation Law that requires the
Company to hold an annual shareholder meeting for the election of directors
and other business only in a year in which certain specified items are
required to be acted upon by shareholders under the 1940 Act. Under certain
circumstances, however, shareholders have the right to

                                       6
<PAGE>

call a meeting of shareholders to consider the removal of one or more
directors or other business. To the extent required by law, the Company will
assist in shareholder communications in such matters. Shareholders wishing to
submit proposals for inclusion in the proxy statement for a subsequent
shareholders meeting should send their written proposals to the Company at its
principal office.

   Other Matters. No business other than the Proposal described above is
expected to come before the Special Meeting, but should any other matter
requiring a vote of shareholders arise, including any question as to an
adjournment of the Special Meeting, the persons named in the enclosed proxy
will vote thereon according to their best judgment in the interests of the
Company.

DATED: SEPTEMBER 29, 2000

   SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE SPECIAL MEETING AND WHO
WISH TO HAVE THEIR SHARES VOTED ARE REQUESTED TO DATE AND SIGN THE ENCLOSED
PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE. YOU MAY ALSO VOTE YOUR
PROXY BY A TOLL-FREE PHONE CALL OR BY VOTING ON-LINE AS DESCRIBED ON THE
ENCLOSED PROXY CARD. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.

   THE COMPANY WILL FURNISH, WITHOUT CHARGE, COPIES OF THE FUND'S ANNUAL
REPORT TO SHAREHOLDERS DATED OCTOBER 31, 1999 AND SEMI-ANNUAL REPORT TO
SHAREHOLDERS DATED APRIL 30, 2000 (TOGETHER, "SHAREHOLDER REPORTS") TO ANY
SHAREHOLDER UPON REQUEST. THE SHAREHOLDER REPORTS MAY BE OBTAINED FROM THE
COMPANY BY WRITING TO THE COMPANY AT 615 EAST MICHIGAN STREET, MILWAUKEE,
WISCONSIN 53202 OR BY CALLING (800) 677-FUND OR (414) 287-3808. SHAREHOLDER
REPORTS ARE NOT TO BE REGARDED AS PROXY SOLICITING MATERIAL.

                                       7
<PAGE>

                                   EXHIBIT A

                       INVESTMENT SUB-ADVISORY AGREEMENT

   THIS AGREEMENT, made this     day of       , 2000, is by and among Firstar
Investment Research & Management Company, LLC, a Wisconsin corporation
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended (the "Advisers Act") (the "Adviser"), Clay Finlay, Inc., a New York
corporation registered as an investment adviser under the Advisers Act (the
"Sub-Adviser"), and Firstar Funds, Inc. (the "Company"), an open-end
diversified management investment company of the series type, registered under
the Investment Company Act of 1940, as amended (the "1940 Act").

   WHEREAS, the Adviser is the investment adviser to the Firstar International
Growth Fund (the "Fund") of the Company, and the Adviser desires to retain the
Sub-Adviser to furnish it with portfolio selection and related research and
statistical services in connection with the Adviser's investment advisory
activities on behalf of the Fund, and the Sub-Adviser desires to furnish such
services to the Adviser;

   NOW, THEREFORE, in consideration of the premises and the terms and
conditions hereinafter set forth, it is agreed as follows:

1. Appointment of Sub-Adviser

   In accordance with and subject to the investment advisory agreement (the
"Investment Advisory Agreement") between the Company and the Adviser, the
Adviser hereby appoints the Sub-Adviser to perform portfolio selection and
related research and statistical services described herein for investment and
reinvestment of the Fund's investment assets, subject to the control and
direction of the Company's Board of Directors, for the period and on the terms
hereinafter set forth. The Sub-Adviser accepts such appointment and agrees to
furnish the services hereinafter set forth for the compensation herein
provided. The Sub-Adviser shall for all purposes herein be deemed to be an
independent contractor and shall, except as expressly provided or authorized,
have no authority to act for or represent the Company or the Adviser in any
way or otherwise be deemed an agent of the Company or the Adviser.

2. Obligations of and Services to be Provided by the Sub-Adviser

     (a) The Sub-Adviser shall provide the following services and assume the
  following obligations with respect to the Fund:

       (1) The investment of the assets of the Fund shall at all times be
    subject to the applicable provisions of the articles of incorporation,
    the by-laws, the registration statement, the effective prospectus and
    the statement of additional information of the Company relating to the
    Fund (the "Fund Documents") and shall conform to the investment
    objectives, policies and restrictions of the Fund as set forth in such
    documents and as interpreted from time to time by the Board of
    Directors of the Company and by the Adviser. Copies of the Fund
    Documents have been or will be submitted to the Sub-Adviser. The
    Company agrees to provide copies of all amendments to or restatements
    of the Fund Documents to the Sub-Adviser on a timely and on-going basis
    but in all events prior to such time as said amendments or restatements
    become effective. The Sub-Adviser will be entitled to rely on all such
    documents furnished to it by the Company, the Fund, or the Adviser.
    Within the framework of the investment objectives, policies and
    restrictions of the Fund, and subject to the supervision of the
    Adviser, the Sub-Adviser shall have responsibility for making and
    executing investment decisions for the Fund.

       (2) In carrying out its obligations to manage the investments and
    reinvestments of the assets of the Fund, the Sub-Adviser shall: (1)
    obtain and evaluate pertinent economic, statistical, financial and
    other information affecting the economy generally and individual
    companies or industries, the securities of which are included in the
    Fund's investment portfolio or are under consideration for inclusion
    therein; (2) under the supervision of the Adviser, formulate and
    implement a continuous investment program for the Fund consistent with
    the investment objective and related investment policies for the Fund
    as set forth in the Fund Documents, as amended; and (3) take such steps
    as are
<PAGE>

    necessary to implement the aforementioned investment program by
    purchase and sale of securities including the placing, or directing the
    placement through an affiliate of the Sub-Adviser in accordance with
    applicable regulatory requirements, of orders for such purchases and
    sales.

       (3) In connection with the purchase and sale of securities of the
    Fund, the Sub-Adviser shall arrange for the transmission to the
    Custodian for the Fund and, as directed by the Adviser, any other
    persons retained by the Fund on a daily basis such confirmations, trade
    tickets and other documents as may be necessary to enable them to
    perform their administrative responsibilities with respect to the
    Fund's investment portfolio. The Sub-Adviser shall render such reports
    to the Adviser and/or to the Company's Board of Directors concerning
    the investment activity and portfolio composition of the Fund in such
    form and at such intervals as the Adviser or the Board may, from time
    to time require.

       (4) The Sub-Adviser shall, in the name of the Fund, place or direct
    the placement of orders for the execution of portfolio transactions in
    accordance with the policies of the Fund, as set forth in the Fund
    Documents, as amended from time to time, and under the Securities Act
    of 1933, as amended (the "1933 Act"), and the 1940 Act. In connection
    with the placement of orders for the execution of the Fund's portfolio
    transactions, the Sub-Adviser shall create and maintain all necessary
    brokerage records of the Fund in accordance with all applicable laws,
    rules and regulations, including but not limited to, records required
    by Section 31(a) of the 1940 Act. All records shall be the property of
    the Company and shall be available for inspection and use by the
    Securities and Exchange Commission ("SEC"), the Company, the Adviser,
    or any other person retained by the Company. The Sub-Adviser agrees to
    surrender promptly to the Company any of such records upon the
    Company's request. Where applicable, such records shall be maintained
    by the Sub-Adviser for the period and in the place required by the 1940
    Act. The Sub-Adviser shall, in the name of the Fund, vote all proxies
    solicited by or with respect to the issuers of securities in which the
    Fund may be invested from time to time.

       (5) In placing orders or directing the placement of orders for the
    execution of portfolio transactions, the Sub-Adviser shall select
    brokers and dealers for the execution of the Fund's transactions. In
    selecting brokers or dealers to execute such orders, the Sub-Adviser
    will use its best efforts to seek on behalf of the Fund the best
    overall terms available. In assessing the best overall terms available
    for any transaction, the Sub-Adviser shall consider all factors that it
    deems relevant, including the breadth of the market in the security,
    the price of the security, the financial condition and execution
    capability of the broker or dealer, and the reasonableness of the
    commission, if any, both for the specific transaction and on a
    continuing basis. In evaluating the best overall terms available, and
    in selecting the broker-dealer to execute a particular transaction, the
    Sub-Adviser is expressly authorized to consider the fact that a broker
    or dealer has furnished statistical, research or other information or
    services which enhance the Sub-Adviser's investment research and
    portfolio management capability generally. Subject to the initial
    approval of the Sub-Adviser's soft dollar policy by the Company's Board
    of Directors and further subject to the review of the Company's Board
    of Directors from time to time with respect to the extent and
    continuation of such policy, the Sub-Adviser may, in accordance with
    Section 28(e) of the Securities Exchange Act of 1934, as amended,
    negotiate with and assign to a broker a commission which may exceed the
    commission which another broker would have charged for effecting the
    transaction if the Sub-Adviser determines in good faith that the amount
    of commission charged was reasonable in relation to the value of
    brokerage and/or research services (as defined in Section 28(e))
    provided by such broker viewed in terms either of the Fund or the Sub-
    Adviser's overall responsibilities to the Sub-Adviser's discretionary
    accounts. In addition, the Sub-Adviser is authorized to take into
    account the sale of shares of the Company in allocating purchase and
    sale orders for portfolio securities to brokers or dealers (including
    brokers and dealers that are affiliated with the Adviser, Sub-Adviser
    or the Company's principal underwriter), provided that the Sub-Adviser
    believes that the quality of the transaction and the commission are
    comparable to what they would be with other qualified firms. In no
    instance, however, will portfolio securities be purchased from or sold
    to the Sub-Adviser, the Adviser, the Company's principal underwriter,
    or any affiliated person of either the Company, the Adviser, Sub-
    Adviser or the principal underwriter, acting as principal in the
    transaction, except to the extent permitted by the SEC through rules,
    regulations, decisions and no-action letters.

                                       2
<PAGE>

       (b) The Sub-Adviser shall use the same skill and care in providing
    services to the Fund as it uses in providing services to fiduciary
    accounts for which it has investment responsibility. The Sub-Adviser
    will conform with all applicable federal and state laws, rules and
    regulations.

       (c) The Sub-Adviser will treat confidentially and as proprietary
    information of the Fund all records and other information relative to
    the Fund and prior, present or potential shareholders, and will not use
    such records and information for any purpose other than performance of
    its responsibilities and duties hereunder (except after prior
    notification to and approval in writing by the Fund, which approval
    shall not be unreasonably withheld and may not be withheld and will be
    deemed granted where Sub-Adviser may be exposed to civil or criminal
    contempt proceedings for failure to comply, when requested to divulge
    such information by duly constituted authorities, or when so requested
    by the Fund).

3. Expenses

   The Sub-Adviser will bear all expenses in connection with the performance
of its services under this Agreement, which expenses shall not include
brokerage fees or commissions in connection with the effectuation of
securities transactions for the Fund. The Fund (or the Adviser) will bear
certain other expenses to be incurred in the Fund's operation, including but
not limited to: organizational expenses, taxes, interest. brokerage fees and
commissions, if any; SEC fees and state blue sky qualification fees; expenses
of custodians, transfer and dividend disbursing agents and the Fund's co-
administrators; insurance premiums; outside auditing and legal expenses; costs
of maintenance of the Fund's existence; costs attributable to investor
services, including without limitation, telephone and personnel expenses;
costs of preparing and printing prospectuses and statements of additional
information for regulatory purposes and for distribution to existing
shareholders; costs of shareholders' reports and meetings of the shareholders
of the Fund and of the officers or Board of Directors of the Fund; and any
extraordinary expenses.

4. Compensation

   In payment for the investment sub-advisory services to be rendered by the
Sub-Adviser in respect of the Fund hereunder, the Adviser shall pay to the
Sub-Adviser as full compensation for all services hereunder a fee computed at
an annual rate which shall be a percentage of the average net assets of the
Fund. The fee shall be accrued daily and shall be based on the net asset
values of all of the issued and outstanding shares of the Fund as determined
as of the close of each business day pursuant to the Fund Documents. The fee
shall be payable in arrears during the following calendar month.

   The amount of such annual fee, as applied to the average daily value of the
net assets of the Fund shall be as described in the schedule below:

<TABLE>
<CAPTION>
                                    ASSETS                                 FEE
                                    ------                                -----
     <S>                                                                  <C>
     On the first $50 million in assets.................................. 0.75%
     On net assets in excess of $50 million but less than $100 million... 0.50%
     On net assets in excess of $100 million............................. 0.25%
</TABLE>

5. Effective Date, Renewal and Termination

   This Agreement shall become effective as of the date first above written
and, unless otherwise terminated, shall continue until February 28, 2002 and
from year to year thereafter so long as approved annually in accordance with
the 1940 Act and the rules thereunder. This Agreement may be terminated
without penalty on sixty (60) days' written notice to the Sub-Adviser (i) by
the Adviser, (ii) by vote of the Board of Directors of the Company, or (iii)
by vote of a majority of the outstanding voting securities of the Fund; or it
may be terminated without penalty on sixty (60) days' written notice to the
Adviser by the Sub-Adviser. This Agreement will terminate automatically in the
event of its assignment or upon any termination of the Investment Advisory
Agreement. The terms "assignment" and "vote of majority of the outstanding
voting securities" shall have the meanings set forth in the 1940 Act.

                                       3
<PAGE>

6. Representations of the Company, Adviser and the Sub-Adviser

   The Company and Fund represent that (i) a copy of the Company's Articles of
Incorporation, dated February 15, 1988, together with all amendments thereto,
is on file in the office of the Wisconsin Department of Financial
Institutions, (ii) the appointment of the Adviser has been duly authorized,
(iii) the appointment of the Sub-Adviser has been duly authorized, and (iv)
they have acted and will continue to act in conformity with the 1940 Act, and
other applicable laws.

   The Adviser represents that (i) it is authorized to perform the services
herein, (ii) the appointment of the Sub-Adviser has been duly authorized, and
(iii) it will act in conformity with the 1940 Act, and other applicable laws.

   The Sub-Adviser represents that it is authorized to perform the services
described herein.

7. Materials

   Neither the Adviser, the Company, or the Fund shall publish or distribute
any information including but not limited to, registration statements,
advertising or promotional material regarding the provision of investment
advisory services by the Sub-Adviser pursuant to this Agreement, without the
prior written consent of the Sub-Adviser, which consent shall not be
unreasonably withheld or delayed. If the Sub-Adviser has not notified the
Adviser of its disapproval of sample materials within five (5) days after its
receipt thereof, such materials shall be deemed approved. Materials
substantially similar to materials approved on an earlier occasion, with the
exception of any regulatory filings, shall also be deemed approved.
Notwithstanding the foregoing, the Adviser may distribute information
regarding the provision of investment advisory services by the Sub-Adviser to
the Company's Board of Directors ("Board Materials") without the prior written
consent of the Sub-Adviser. The Adviser shall provide copies of the Board
Materials to the Sub-Adviser within a reasonable time following distribution
to the Company's Board of Directors.

   The Sub-Adviser shall not publish or distribute any information including
but not limited to, registration statements, advertising or promotional
material regarding the provision of investment advisory services by the Sub-
Adviser pursuant to this Agreement, without the prior written consent of the
Adviser and the Company, which consent shall not be unreasonably withheld or
delayed. If the Adviser or Company has not notified the Sub-Adviser of its
disapproval of sample materials within five (5) days after its receipt
thereof, such materials shall be deemed approved. Materials substantially
similar to materials approved on an earlier occasion, with the exception of
any regulatory filings, shall also be deemed approved.

8. General Provisions

   (a) The Sub-Adviser may rely on information reasonably believed by it to be
accurate and reliable. Except as may otherwise be provided by the 1940 Act,
neither the Sub-Adviser nor its officers, directors, employees or agents shall
be subject to any liability for any error of judgment or mistake of law or for
any loss arising out of any investment or other act or omission in the
performance by the Sub-Adviser of its duties under this Agreement or for any
loss or damage resulting from the imposition by any government or exchange
control restrictions which might affect the liquidity of the Fund's assets, or
from acts or omissions of custodians or securities depositories or from any
war or political act of any foreign government to which such assets might be
exposed, provided that nothing herein shall be deemed to protect or purport to
protect, the Sub-Adviser against any liability to the Adviser or the Company
or to its shareholders to which the Sub-Adviser would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties hereunder, or by reason of the Sub-Adviser's
reckless disregard of its obligations and duties hereunder or a breach of its
fiduciary duty.

   (b) The Adviser and the Fund understand that the Sub-Adviser now acts, will
continue to act, or may act in the future, as investment adviser or investment
sub-adviser to fiduciary and other managed accounts, including other
investment companies and the Adviser and the Fund have no objection to the
Sub-Adviser so acting, provided that the Sub-Adviser duly performs all
obligations under this Agreement. The Adviser and the Fund also understand
that the Sub-Adviser may give advice and take action with respect to any of
its other clients or for its own account which may differ from the timing or
nature of action taken by the Sub-Adviser. with respect

                                       4
<PAGE>

to the Fund. Nothing in this Agreement shall impose upon the Sub-Adviser any
obligation to purchase or sell or to recommend for purchase or sale, with
respect to the Fund, any security which the Sub-Adviser or its shareholders,
directors, officers, employees or affiliates may purchase or sell for its or
their own account(s) or for the account of any other client.

   (c) Except to the extent necessary to perform its obligations hereunder,
nothing herein shall be deemed to limit or restrict the right of the Sub-
Adviser, or the right of any of its officers. directors or employees who may
also be an officer, director or employee of the Company, or person otherwise
affiliated with the Company (within the meaning of the 1940 Act) to engage in
any other business or to devote time and attention to the management or other
aspects of any other business, whether of a similar or dissimilar nature or to
render services of any kind to any other trust corporation, firm, individual
or association.

   (d) Each party agrees to perform such further acts and execute such further
documents as are necessary to effectuate the purposes hereof. This Agreement
shall be construed and enforced in accordance with and governed by the laws of
the State of Wisconsin. The captions in this Agreement are included for
convenience only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect.

   (e) Any notice under this Agreement shall be in writing, addressed and
delivered or mailed postage pre-paid to the appropriate party at the following
address: The Adviser, the Company and the Fund at Drinker Biddle & Reath LLP,
One Logan Square, 18th & Cherry Streets, Philadelphia, Pennsylvania, 19103,
Attention: W. Bruce McConnel, Esq., and the Sub-Adviser at 200 Park Avenue,
New York, NY 10166, Attention: General Counsel.

   (f) Sub-Adviser agrees to notify Adviser of any change in Sub-Adviser's
senior officers, portfolio managers, and directors within a reasonable time
after such change. Sub-Adviser further agrees to provide Adviser with any
amendments to Parts I and II of its ADV within a reasonable time after such
amendments and notify Adviser of any regulatory, civil or criminal
proceedings, actions or complaints involving the Sub-Adviser or its affiliates
within a reasonable time.

   (g) This Agreement may be amended in accordance with the 1940 Act.

   (h) This Agreement constitutes the entire agreement among the parties
hereto.

   (i) This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but such counterparts shall together,
constitute only one instrument.

   IN WITNESS WHEREOF, THE PARTIES HAVE DULY EXECUTED THIS AGREEMENT ON THE
DATE FIRST ABOVE WRITTEN.

                                          Clay Finlay, Inc.
                                          200 Park Avenue
                                          New York, NY 10166

                                          By: _________________________________
                                                            , 2000

                                          Firstar Investment Research &
                                           Management Company, LLC

                                          By: _________________________________
                                          Name:
                                          Title:

                                          Firstar Funds, Inc.

                                          By: _________________________________
                                          Name:
                                          Title:

                                       5
<PAGE>

<TABLE>
FIRSTAR FUNDS, INC.                                                                         VOTE THIS PROXY CARD TODAY
615 EAST MICHIGAN STREET
P.O. BOX 3011                                                                                  FIRSTAR FUNDS, INC.
MILWAUKEE, WISCONSIN 53201-3011                                                              615 EAST MICHIGAN STREET
                                                                                                  P.O. BOX 3011
                                                                                         MILWAUKEE, WISCONSIN 53201-3011

                                                                                       CORE INTERNATIONAL EQUITY FUND

                                                                                       SPECIAL MEETING OF SHAREHOLDERS
<S>                                                                         <C>
                                                                            THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
                                                                            FIRSTAR FUNDS, INC. (THE "COMPANY") FOR USE AT A
                                                                            SPECIAL MEETING OF SHAREHOLDERS OF THE ABOVE-REFERENCED
                                                                            FUND OF THE COMPANY TO BE HELD ON NOVEMBER 8, 2000 AT
                                                                            11:00 A.M. (EASTERN TIME) AT THE OFFICES OF THE
                                                                            COMPANY'S LEGAL COUNSEL, DRINKER BIDDLE & REATH LLP,
                                                                            ONE LOGAN SQUARE, 18/TH/ AND CHERRY STREETS,
                                                                            PHILADELPHIA, PENNSYLVANIA 19103.

                                                                            The undersigned hereby appoints W. Bruce McConnell III,
                                                                            Joan Ohlbaum Swirsky, Kathryn R. Williams, Laura Rauman,
                                                                            Jeffrey Squires and Doug Hess and each of them, with
                                                                            full power of substitution, as proxies of the
                                                                            undersigned to vote at the above-referenced Special
                                                                            Meeting of Shareholders, and at all adjournments
                                                                            thereof, all shares of common stock of the Fund held of
                                                                            record by the undersigned on the record date for the
                                                                            Special Meeting, upon the following matters, and at
TO VOTE BY TELEPHONE                                                        their discretion upon any other matter which may
                                                                            properly come before the Special Meeting.

1)  Read the Proxy Statement and have the Proxy card below at hand.         THIS PROXY WILL BE VOTED AS SPECIFIED BELOW WITH RESPECT
2)  Call 1-800-690-6903                                                     TO THE ACTION TO BE TAKEN ON THE FOLLOWING PROPOSAL. IN
3)  Enter the 12-digit control number set forth on the Proxy card and       THE ABSENCE OF ANY SPECIFICATION, THIS PROXY WILL BE
    follow the simple instructions.                                         VOTED "FOR" THE PROPOSAL.
</TABLE>

TO VOTE BY INTERNET

1)  Read the Proxy Statement and have the Proxy card below at hand.
2)  Go to Website www.proxyvote.com
3)  Enter the 12-digit control number set forth on the Proxy card and
    follow the simple instructions.

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.

<TABLE>
<CAPTION>
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:                     FIRST1           KEEP THIS PORTION FOR YOUR RECORDS
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                 DETACH AND RETURN THIS PORTION ONLY
                                       THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
------------------------------------------------------------------------------------------------------------------------------------
CORE INTERNATIONAL EQUITY FUND

THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF SPECIAL MEETING OF SHAREHOLDERS OF THE FUND AND THE PROXY STATEMENT
DATED SEPTEMBER 29, 2000.

<S>                                                                                        <C>        <C>            <C>
VOTE ON PROPOSAL                                                                            FOR       AGAINST        ABSTAIN

1.  To approve a new Investment Sub-Advisory Agreement on behalf of the Fund
    among the Company, Firstar Investment Research & Management Company, L.L.C
    and Clay Finlay, Inc.                                                                   [_]          [_]           [_]

Please sign below exactly as name(s) appear(s) hereon. Corporate or partnership proxies should be signed in full corporate or
partnership name by an authorized officer. Each joint owner should sign personally. When signing as a fiduciary, please give full
title as such.

  ----------------------------------------                       ---------------------------------
  ----------------------------------------                       ---------------------------------
Signature  (PLEASE SIGN WITHIN BOX)   Date                       Signature (Joint Owners)   Date

------------------------------------------------------------------------------------------------------------------------------------
</TABLE>




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