As filed with the Securities and Exchange Commission on July 25, 1996
1933 Act Registration No. 33-40496
1940 Act Registration No. 811-5990
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
Post-Effective Amendment No. 21 X
---
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Amendment No. 21 X
---
IAI INVESTMENT FUNDS VI, INC.
(Exact Name of Registrant as Specified in Charter)
3700 First Bank Place, P.O. Box 357
Minneapolis, Minnesota 55440
(Address of Principal Executive Offices) (Zip Code)
(612) 376-2700
(Registrant's Telephone Number, including Area Code)
Christopher J. Smith, Esq. Copy to:
3700 First Bank Place Michael J. Radmer, Esq.
P.O. Box 357 Dorsey & Whitney
Minneapolis, Minnesota 55440 220 South Sixth Street
(Name and Address of Agent for Service) Minneapolis, Minnesota 55402
It is proposed that this filing will become effective (check appropriate box)
--- immediately upon filing pursuant to paragraph (b)
X on August 1, 1996 pursuant to paragraph (b)
---
--- 60 days after filing pursuant to paragraph (a)(i)
--- on pursuant to paragraph (a)(i)
--- 75 days after filing pursuant to paragraph (a)(ii)
--- on (date) pursuant to paragraph (a)(ii) of Rule 485
If appropriate, check the following box:
--- this post-effective amendment designates a new effective
date for a previously filed post-effective amendment
Registrant has registered an indefinite number of securities under the
Securities Act of 1933 pursuant to Rule 24f-2 under the Investment Company Act
of 1940, as amended. Rule 24f-2 Notices were last filed with the Commission on
May 23, 1996.
<PAGE>
IAI INVESTMENT FUNDS VI, INC.
FORM N-1A
CROSS-REFERENCE SHEET
<TABLE>
<CAPTION>
Item Number Caption Prospectus Caption
- ----------- ------- ------------------
<S> <C> <C>
1 Cover Page.................................... Cover Page of Prospectus
2 Synopsis...................................... Fund Expense Information
3 Condensed Financial Information............... Financial Highlights; Investment Performance
4 General Description of Registrant ............ Investment Objectives and Policies;
Description of Common Stock; Additional
Information
5 Management of the Fund........................ Fund Expense Information; Management;
Additional Information; Custodian, Transfer
Agent and Dividend Disbursing Agent
5A Management's Discussion of Fund Performance... Information is Contained in the Annual Report
6 Capital Stock and Other Securities............ Dividends, Distributions and Tax Status;
Description of Common Stock; Additional
Information
7 Purchase of Securities Being Offered.......... Computation of Net Asset Value and Pricing;
Purchase of Shares; Automatic Investment
Plan; Exchange Privilege; Automatic Exchange
Plan; Retirement Plans; Authorized Telephone
Trading
8 Redemption or Repurchase...................... Systematic Cash Withdrawal Plan; Redemption
of Shares; Authorized Telephone Trading
9 Pending Legal Proceedings..................... Not Applicable
<PAGE>
Item Number Caption Statement of Additional Information Caption
- ----------- ------- -------------------------------------------
10 Cover Page.................................... Cover Page of Statement of Additional
Information
11 Table of Contents............................. Table of Contents
12 General Information and History............... Management
13 Investment Objectives and Policies............ Investment Objectives and Policies;
Investment Restrictions
14 Management of the Fund........................ Management
15 Control Persons and Principal
Holders of Securities....................... Management; Capital Stock
16 Investment Advisory and Other Services..... Management; Prior Agreements; Counsel and
Auditors; Custodian; Transfer Agent and
Dividend Disbursing Agent
17 Brokerage Allocation.......................... Portfolio Transactions and Allocation of
Brokerage
18 Capital Stock and Other Securities............ Capital Stock
19 Purchase, Redemption and Pricing Purchases and Redemptions In Kind;
of Securities Being Offered................... Net Asset Value and Public Offering Price
20 Tax Status.................................... Tax Status
21 Underwriters.................................. Prior Agreements
22 Calculation of Performance Data............... Investment Performance
23 Financial Statements........................... Financial Statements
</TABLE>
<PAGE>
Registration Statement on Form N-1A
of
IAI Investment Funds VI, Inc.
(File No. 33-40496)
Part A
Part A to the Registration Statement of IAI Emerging Growth Fund, IAI
Midcap Growth Fund, IAI Balanced Fund and IAI Capital Appreciation Fund,
separate portfolios of IAI Investment Funds VI, Inc., is incorporated herein by
reference to said Part A as filed with the Commission by Post-Effective
Amendment No. 20 (File No. 33-40496) on May 30, 1996.
<PAGE>
Registration Statement on Form N-1A
of
IAI Investment Funds VI, Inc.
(File No. 33-40496)
Part B
Part B to the Registration Statement of IAI Emerging Growth Fund, IAI
Midcap Growth Fund, IAI Balanced Fund and IAI Capital Appreciation Fund,
separate portfolios of IAI Investment Funds VI, Inc., is incorporated herein by
reference to said Part B as filed with the Commission by Post-Effective
Amendment No. 20 (File No. 33-40496) on May 30, 1996.
<PAGE>
PART C
Item 24. Financial Statements and Exhibits
(a) Financial Statements (Series A, C, E) (1)
(Series B, D) (2)
(Series F) (3)
(Series G) (7)
(b) Exhibits
(1A) Articles of Incorporation
(1B) Certificate of Designation (Series C, D, E)
(1C) Certificate of Designation (Series F)
(1D) Certificate of Designation (Series G) (5)
(2) Bylaws (6)
(5A) Investment Advisory Agreement (Series A, C, E, F) (1)
(5B) Management Agreement (Series G) (6)
(5C) Management Agreement (Series B, D, F) (6)
(6A) Distribution and Shareholder Services Agreement
(Series A, C, E) (4)
(6B) Distribution and Shareholder Services Agreement
(Series F) (3)
(6C) Dealer Sales Agreement (Series A, C, E) (4)
(6D) Dealer Sales Agreement (Series B, D, F, G) (6)
(6E) Shareholder Services Agreement (Series A, C, E) (4)
(6F) Shareholder Services Agreement (Series B, D, F, G) (6)
(8A) Custodian Agreement (Series A, B, C, D, E, F)
(8B) Custodian Agreement (Series G) (6)
(9) Administrative Agreement (Series A, C, E, F)
(11) Consent of Independent Auditors (9)
(15) Plan of Distribution (Series A, C, E) (4)
(16) Calculation of Performance Data
(99A) Annual Report (8)
(99B) Financial Statements (unaudited) -
IAI Capital Appreciation Fund Portfolio
- -------------------
<PAGE>
(1) Incorporated by reference to Post-Effective Amendment to Registrant's
Registration Statement on Form N-1A filed on June 3, 1993.
(2) Incorporated by reference to Post-Effective Amendment to Registrant's
Registration Statement on Form N-1A filed on March 30, 1995.
(3) Incorporated by reference to Post-Effective Amendment to Registrant's
Registration Statement on Form N-1A filed on June 1, 1995.
(4) Incorporated by reference to Post-Effective Amendment to Registrant's
Registration Statement on Form N-1A filed on July 31, 1995.
(5) Incorporated by reference to Post-Effective Amendment to Registrant's
Registration Statement on Form N-1A filed on November 17, 1995.
(6) Incorporated by reference to Post-Effective Amendment to Registrant's
Registration Statement on Form N-1A filed on January 31, 1996.
(7) To be filed by Post-Effective Amendment on or before February 1, 1996.
(8) Incorporated by reference to the Annual Report filed electronically
on Form N-30D on March 30, 1996.
(9) Incorporated by reference to the Post-Effective Amendment No. 20
to Registrant's Registration Statement on Form N-1A filed
on May 30, 1996.
Item 25. Persons Controlled by or Under Common Control with Registrant.
Not applicable.
Item 26. Number of Holders Securities.
<TABLE>
<CAPTION>
Number of Record Holders
Portfolio Title of Class of May 22, 1996
- --------- -------------- ------------------
<S> <C> <C>
IAI Investment Funds VI, Inc. Common Stock (Series A) 7462
Common Stock (Series B) 566
Common Stock (Series C) 3957
Common Stock (Series D) 647
Common Stock (Series E) 125
Common Stock (Series F) 1550
Common Stock (Series G) 994
</TABLE>
Item 27. Indemnification.
Incorporated by reference to Post-Effective Amendment to Registrant's
Registration Statement on Form N-1A filed on May 22, 1996.
Item 28. Business and Other Connections of Investment Adviser.
Information on the business of Investment Advisers, Inc. ("IAI") is
described in the Prospectus section "Management" and in Part B of this
Registration Statement in the section "Management."
<PAGE>
The senior officers and directors of IAI and their titles are as
follows:
<TABLE>
<CAPTION>
Name Title
---- -----
<S> <C>
Jeffrey R. Applebaum Senior Vice President
Scott Allen Bettin Senior Vice President
Archie Campbell Black, III Senior Vice President/Treasurer
Iain Cheyne Director
Stephen C. Coleman Senior Vice President
Larry Ray Hill Executive Vice President
Richard A. Holway Senior Vice President
Irving Philip Knelman Executive Vice President/Director
Rick D. Leggott Senior Vice President
Kevin McKendry Director
Timothy A. Palmer Senior Vice President
Peter Phillips Director
Douglas Rugh Platt Senior Vice President
Noel Paul Rahn Chief Executive Officer/Director
James S. Sorenson Senior Vice President
R. David Spreng Senior Vice President
Christopher John Smith Senior Vice President/Secretary
Richard Edward Struthers Executive Vice President
Suzanne F. Zak Senior Vice President
</TABLE>
All of such persons have been affiliated with IAI for more than two years
except Messrs. Cheyne, McKendry, Phillips and Sorenson. Prior to being appointed
to the Board in 1996, Mr. Cheyne was and remains General Manager of Corporate
Banking of Lloyds Bank plc, St. George's House, 6-8 Eastcheap, London, England
EC3M 1LL since 1972. Prior to being appointed to the Board in 1996, Mr. McKendry
was and remains Bank Counsel to Lloyds Bank Plc, P.O. Box 2008, One Seaport
Plaza, 199 Water Street, New York, NY 10038, since 1979. Prior to being
appointed to the Board in 1996, Mr. Phillips was and remains Executive Vice
President and General Manager of Lloyds Bank Plc, P.O. Box 2008, One Seaport
Plaza, 199 Water Street, New York, NY 10038, since 1993. Prior to becoming a
Senior Vice President of IAI in 1996, Mr. Sorenson was Vice President, Sales
Manager since the commencement of his employment with IAI in August 1994. Prior
thereto, Mr. Sorenson was Associate General Agent with Lutheran Brotherhood
since 1988.
Certain directors and officers of IAI are directors and/or officers of the
Registrant, as described in the section of the Statement of Additional
Information entitled "Management," filed as a part of this Registration
Statement.
The address of the officers and directors of IAI is that of IAI, which is
3700 First Bank Place, P. O. Box 357, Minneapolis, Minnesota 55440.
Certain of the officers and directors of IAI also serve as officers and
directors of IAI International Ltd. Both IAI and IAI International are
wholly-owned subsidiaries of Hill Samuel Group BV, a London-based merchant
banking and financial services firm which, in turn, is owned by Lloyds TSB Group
plc, a publicly-held financial services organization based in London, England.
The senior officers and directors of IAI International and their titles are as
follows:
<PAGE>
<TABLE>
<CAPTION>
Name Title
- ---- -----
<S> <C>
Noel Paul Rahn Chairman of the Board of Directors
Roy C. Gillson Chief Investment Officer/Director
Iain D. Cheyne Director
Irving Philip Knelman Director
Hilary Fane Deputy Chief Investment Officer/Director
Feidhlim O'Broin Associate Director
</TABLE>
Certain of the officers and directors of IAI also serve as officers and
directors of IAI Trust Company, a wholly-owned subsidiary of IAI. The principal
officers and directors of IAI Trust Company and their titles are as follows:
<TABLE>
<CAPTION>
Name Title
- ---- -----
<S> <C>
Richard E. Struthers Chairman of the Board
Christopher J. Smith Director/Secretary
Archie C. Black Director/Treasurer
</TABLE>
Item 29. Principal Underwriters
(a) Not applicable
(b) Not applicable.
Item 30. Location of Accounts and Records.
The Custodian for Registrant is Norwest Bank Minnesota, N.A., Norwest
Center, Sixth & Marquette, Minneapolis, Minnesota 55479. The Custodian maintains
records of all cash transactions of Registrant. All other books and records of
Registrant, including books and records of Registrant's investment portfolios,
are maintained by IAI. IAI also acts as Registrant's transfer agent and dividend
disbursing agent, at 3700 First Bank Place, Minneapolis, Minnesota 55402.
Item 31. Management Services.
Not applicable.
Item 32. Undertakings.
(a) Not applicable.
(b) Registrant undertakes to file a post-effective amendment, using
financial statements which need not be certified, within four to six months from
the effective date of the registration of Registrant's Series G Common Stock.
(c) Registrant undertakes to furnish each person to whom a prospectus is
delivered a copy of its latest annual report to shareholders, upon request and
without change.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, Registrant certifies that it meets all of the
requirements for effectiveness of its Post-Effective Amendment to its
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Post-Effective Amendment to its Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Minneapolis, and State of Minnesota, on the 18th day of July, 1996. IAI
INVESTMENT FUNDS VI, INC.
IAI INVESTMENTS FUNDS VI, INC.
(Registrant)
By /s/ Richard E. Struthers, President
Richard E. Struthers , President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed below by
the following persons in the capacities and on the dates indicated:
/s/ Richard E. Struthers President (principal July 18, 1996
- -------------------------- executive officer & Director)
Richard E. Struthers
/s/ Archie C. Black III Treasurer (principal July 18, 1996
- -------------------------- financial and accounting officer)
Archie C. Black III
Noel P. Rahn (1)
Director
Madeline Betsch (1)
Director
W. William Hodgson (1)
Director
George R. Long (1)
Director
J. Peter Thompson (1)
Director
Charles H. Withers (1)
Director
/s/ William C. Joas July 18, 1996
- ---------------------------------
William C. Joas,
Attorney-in-fact
(1) Registrant's directors executing Powers of Attorney dated August 18, 1993,
and filed with the Commission on February 7, 1994.
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit Description Sequential Page No.
- ----------- ------------------- -------------------
1A Articles of Incorporation
1B Certificate of Designation (Series C, D, E)
1C Certificate of Designation (Series F)
8A Custodian Agreement (Series A, B, C, D, E, F)
9 Administrative Agreement (Series A, C, E, F)
16 Calculations of Performance Data
99B Financial Statements
EXHIBIT 1A
CERTIFICATE OF AMENDMENT
ARTICLES OF INCORPORATION
OF
IAI SERIES FUND, INC.
I, William C. Joas, Secretary of IAI Series Fund, Inc., (the "Corporation")
a Minnesota corporation hereby certify as follows:
1. The name of the Corporation is IAI Series Fund, Inc.
2. At meetings duly called and held (pursuant to the requirements of the
Minnesota Statutes, Chapter 302A) on February 10, 1993 and June 25, 1993, the
Corporation's Board of Directors and shareholders, respectively, adopted and
approved the following Amended and Restated Articles of Incorporation of the
Corporation to replace the Corporation's existing Articles of Incorporation (as
amended) in their entirety, and directed that the officers of the Corporation
file the following Amended and Restated Articles in the office of the Minnesota
Secretary of State.
3. Pursuant to this Certificate of Amendment, the name of the Corporation
is being changed to IAI Investment Funds VI, Inc.
------------------------------------
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
IAI INVESTMENT FUNDS VI, INC.
For the purpose of forming a corporation pursuant to the provisions of
Minnesota Statutes, Chapter 302A, the following Restated Articles of
Incorporation are adopted:
1. The name of the corporation (the "Corporation") is IAI Investment Funds
VI, Inc.
2. The Corporation shall have general business purposes and shall have
unlimited power to engage in and do any lawful act concerning any and all lawful
businesses for which corporations may be organized under the Minnesota Statutes,
Chapter 302A. Without limiting the generality of the foregoing, the Corporation
shall have specific power:
(a) To conduct, operate and carry on the business of a so-called "open-end"
management investment company pursuant to applicable state and federal
regulatory statutes, and exercise all the powers necessary and appropriate to
the conduct of such operations.
(b) To purchase, subscribe for, invest in or otherwise acquire, and to own,
hold, pledge, mortgage, hypothecate, sell, possess, transfer or otherwise
dispose of, or turn to account or realize upon, and generally deal in, all forms
of securities of every kind, nature, character, type and form, and other
financial instruments which may not be deemed to be securities, including but
not limited to futures contracts and options thereon. Such securities and other
financial instruments may include but are not limited to shares, stocks, bonds,
debentures, notes, scrip, participation certificates, rights to subscribe,
warrants, options, certificates of deposit, bankers' acceptances, repurchase
agreements, commercial paper, choses in action, evidences of indebtedness,
certificates of indebtedness and certificates of interest of any and every kind
and nature whatsoever, secured and unsecured, issued or to be issued, by any
corporation, company, partnership (limited or general), association, trust,
entity or person, public or private, whether organized under the laws of the
United States, or any state, commonwealth, territory or possession thereof, or
organized under the laws of any foreign country, or any state, province,
territory or possession thereof, or issued or to be issued by the United States
government or any agency or instrumentality thereof, options on stock indexes,
stock index and interest rate futures contracts and options thereon, and other
futures contracts and options thereon.
<PAGE>
(c) In the above provisions of this Article 2, purposes shall also be
construed as powers and powers shall also be construed as purposes, and the
enumeration of specific purposes or powers shall not be construed to limit other
statements of purposes or to limit purposes or powers which the Corporation may
otherwise have under applicable law, all of the same being separate and
cumulative, and all of the same may be carried on, promoted and pursued,
transacted or exercised in any place whatsoever.
3. The Corporation shall have perpetual existence.
4. The location and post office address of the registered office in
Minnesota is 3700 First Bank Place, P.O. Box 357, Minneapolis, Minnesota
5~440~357.
5. The total authorized number of shares of the Corporation is 10 trillion
(10,000,000,000,000), all of which shall be common shares of the par value of
$.01 per share (individually, a "Share", and collectively, the "Shares"). The
Corporation may issue and sell any of its Shares in fractional denominations to
the same extent as its whole Shares, and Shares and fractional denominations
shall have, in proportion to the relative fractions represented thereby, all the
rights of whole Shares, including, without limitation, the right to vote, the
right to receive dividends and distributions, and the right to participate upon
liquidation of the Corporation.
(a) Ten billion (10,000,000,000) of the Shares may be issued by the
Corporation in a series designated "Series A Common Shares," ten billion
(10,000,000,000) of the Shares may be issued by the Corporation in a series
designated "Series B Common Shares," ten billion (10,000,000,000) of the Shares
may be issued by the Corporation in a series designated "Series C Common
Shares," ten billion (10,000,000,000) of the Shares may be issued by the
Corporation in a series designated "Series D Common Shares," ten billion
(10,000,000,000) of the Shares may be issued by the Corporation in a series
designated "Series E Common Shares," and ten billion (10,000,000,000) of the
Shares may be issued by the Corporation in a series desiganted "Series F Common
Shares." The remaining 9,940,000,000,000 Shares authorized by this Article 5
shall initially be undesignated Shares (the "Undesignated Shares"). Any series
of the Shares shall be referred to herein individually as a "Series" and
collectively herein, together with any further series from time to time created
by the Board of Directors, as "Series." The Undesignated Shares may be issued in
such Series with such designations, preferences and relative, participating,
optional or other special rights, or qualifications, limitations or restrictions
thereof, as shall be stated or expressed in a resolution or resolutions
providing for the issue of any Series as may be adopted from time to time by the
Board of Directors of the Corporation pursuant to the authority hereby vested in
the Board of Directors. Each Series of Shares which the Board of Directors may
establish, as provided herein, may evidence, if the Board of Directors shall so
determine by resolution, an interest in a separate and distinct portion of the
Corporation's assets, which shall take the form of a separate portfolio of
investment securities, cash and other assets. Authority to establish such
separate portfolios is hereby vested in the Board of Directors of the
Corporation, and such separate portfolios may be established by the Board of
Directors without the authorization or approval of the holders of any Series of
Shares of the Corporation. Such investment portfolios in which Shares of the
Series represent interests are also hereinafter referred to as "Series".
<PAGE>
(b) The Shares of each Series may be classified by the Board of Directors
in one or more classes (individually, a "Class", and, collectively, together
with any other class or classes within any Series, the "Classes") with such
relative rights and preferences as shall be stated or expressed in a resolution
or resolutions providing for the issue of any such Class or Classes as may be
adopted from time to time by the Board of Directors of the Corporation pursuant
to the authority hereby vested in the Board of Directors and Minnesota Statutes,
Section 302A.401, Subd. 3, or any successor provision. The Shares of each Class
within a Series may be subject to such charges and expenses (including by way of
example, but not by way of limitation, front-end and deferred sales charges,
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 in accordance, to the extent applicable, with the Investment
Company Act of 1940, as amended (together with the rules and regulations
promulgated thereunder, the "1940 Act"), which charges and expenses may differ
from those applicable to another Class within such Series, and all of the
charges and expenses to which a Class is subject shall be borne by such Class
and shall be appropriately reflected (in the manner determined by the Board of
Directors in the resolution or resolutions providing for the issue of such
Class) in determining the net asset value and the amounts payable with respect
to dividends and distributions on and redemptions or liquidations of, such
Class. Subject to compliance with the requirements of the 1940 Act, the Board of
Directors shall have the authority to provide that Shares of any Class shall be
convertible (automatically, optionally or otherwise) into Shares of one or more
other Classes in accordance with such requirements and procedures as may be
established by the Board of Directors.
6. The shareholders of each Series (or Class thereof) of common shares of
the Corporation:
(a) shall not have the right to cumulate votes for the election of
directors; and
(b) shall have no preemptive right to subscribe to any issue of shares of
any Series (or Class thereof) of the Corporation now or hereafter created,
designated or classified.
7. A description of the relative rights and preferences of all Series of
Shares (and Classes thereof) is as follows, unless otherwise set forth in one or
more amendments to these Articles of Incorporation or in the resolution
providing for the issue of such Series (and Classes thereof):
(a) On any matter submitted to a vote of shareholders of the Corporation,
all Shares of the Corporation then issued and outstanding and entitled to vote,
irrespective of Series or Class, shall be voted in the aggregate and not by
Series or Class, except: (i) when otherwise required by Minnesota Statutes,
Chapter 302A, in which case shares will be voted by individual Series or Class,
as applicable; (ii) when otherwise required by the 1940 Act or the rules adopted
thereunder, in which case shares shall be voted by individual Series or Class,
as applicable; and (iii) when the matter does not affect the interests of a
particular Series or Class thereof, in which case only shareholders of the
Series or Class thereof affected shall be entitled to vote thereon and shall
vote by individual Series or Class, as applicable.
(b) All consideration received by the Corporation for the issue or sale of
Shares of any Series, together with all assets, income, earnings, profits and
proceeds derived therefrom (including all proceeds derived from the sale,
exchange or liquidation thereof and, if applicable, any assets derived from any
reinvestment of such proceeds in whatever form the same may be) shall become
part of the assets of the portfolio to which the Shares of that Series relate,
for all purposes, subject only to the rights of creditors, and shall be so
treated upon the books of account of the Corporation. Such assets, income,
earnings, profits and proceeds (including any proceeds derived from the sale,
exchange or liquidation thereof and, if applicable, any assets derived from the
sale, exchange or liquidation thereof and, if applicable, any assets derived
from any reinvestment of such proceeds in whatever form the same may be) are
herein referred to as "assets belonging to" such Series of Shares of the
Corporation.
<PAGE>
(c) Assets of the Corporation not belonging to any particular Series are
referred to herein as "General Assets." General Assets shall be allocated to
each Series in proportion to the respective net assets belonging to such Series.
The determination of the Board of Directors shall be conclusive as to the amount
of assets, as to the characterization of assets as those belonging to a Series
or as General Assets, and as to the allocation of General Assets.
(d) The assets belonging to a particular Series of Shares shall be charged
with the liabilities incurred specifically on behalf of such Series of Shares
("Special Liabilities"). Such assets shall also be charged with a share of the
general liabilities of the Corporation ("General Liabilities") in proportion to
the respective net assets belonging to such Series of common shares. The
determination of the Board of Directors shall be conclusive as to the amount of
liabilities, including accrued expenses and reserves, as to the characterization
of any liability as a Special Liability or General Liability, and as to the
allocation of General Liabilities among Series.
(e) The Board of Directors may, to the extent permitted by Minnesota
Statutes, Chapter 302A or any successor provision thereto, declare and pay
dividends or distributions in Shares, cash or other property on any or all
Series (or Classes thereof) of Shares, the amount of such dividends and the
payment thereof being wholly in the discretion of the Board of Directors.
(f) In the event of the liquidation or dissolution of the Corporation,
holders of the Shares of any Series shall have priority over the holders of any
other Series with respect to, and shall be entitled to receive, out of the
assets of the Corporation available for distribution to holders of shares, the
assets belonging to such Series of Shares and the General Assets allocated to
such Series of Shares, and the assets so distributable to the holders of the
Shares of any Series shall be distributed among such holders in proportion to
the number of Shares of such Series held by each such shareholder and recorded
on the books of the Corporation, except that, in the case of a Series with more
than one Class of Shares, such distributions shall be adjusted to appropriately
reflect any charges and expenses borne by each individual Class.
(g) With the approval of a majority of the shareholders of each of the
affected Series of Shares present in person or by proxy at a meeting called for
the following purpose (provided that at least 10% of the issued and outstanding
Shares of the affected Series is present at such meeting in person or by proxy),
the Board of Directors may transfer the assets of any Series to any other
Series. Upon such a transfer, the Corporation shall issue Shares representing
interests in the Series to which the assets were transferred in exchange for all
Shares representing interests in the Series from which the assets were
transferred. Such Shares shall be exchanged at their respective net asset
values.
8. The following additional provisions, when consistent with law, are
hereby established for the management of the business, for the conduct of the
affairs of the Corporation, and for the purpose of describing certain specific
powers of the Corporation and of its directors and shareholders.
(a) In furtherance and not in limitation of the powers conferred by statute
and pursuant to these Articles of Incorporation, the Board of Directors is
expressly authorized to do the following:
(i) to make, adopt, alter, amend and repeal Bylaws of the Corporation
unless reserved to the shareholders by the Bylaws or by the laws of the State of
Minnesota, subject to the power of the shareholders to change or repeal such
Bylaws;
<PAGE>
(ii) to distribute, in its discretion, for any fiscal year (in the year or
in the next fiscal year) as ordinary dividends and as capital gains
distributions, respectively, amounts sufficient to enable each Series to qualify
under the Internal Revenue Code as a regulated investment company to avoid any
liability for federal income tax in respect of such year. Any distribution or
dividend paid to shareholders from any capital source shall be accompanied by a
written statement showing the source or sources of such payment;
(iii) to authorize, subject to such vote, consent, or approval of
shareholders and other conditions, if any, as may be required by any applicable
statute, rule or regulation, the execution and performance by the Corporation of
any agreement or agreements with any person, corporation, association, company,
trust, partnership (limited or general) or other organization whereby, subject
to the supervision and control of the Board of Directors, any such other person,
corporation, association, company, trust, partnership (limited or general), or
other organization shall render managerial, investment advisory, distribution,
transfer agent, accounting and/or other services to the Corporation (including,
if deemed advisable, the management or supervision of the investment portfolios
of the Corporation) upon such terms and conditions as may be provided in such
agreement or agreements;
(iv) to authorize any agreement of the character described in subparagraph
3 of this paragraph (a) with any person, corporation, association, company,
trust, partnership (limited or general) or other organization, although one or
more of the members of the Board of Directors or officers of the Corporation may
be the other party to any such agreement or an officer, director, employee,
shareholder, or member of such other party, and no such agreement shall be
invalidated or rendered voidable by reason of the existence of any such
relationship;
(v) to allot and authorize the issuance of the authorized but unissued
Shares of any Series, or Class thereof, of the Corporation;
(vi) to accept or reject subscriptions for Shares of any Series, or Class
thereof, made after incorporation;
(vii) to fix the terms, conditions and provisions of and authorize the
issuance of options to purchase or subscribe for Shares of any Series, or Class
thereof, including the option price or prices at which Shares may be purchased
or subscribed for;
(viii) to take any action which might be taken at a meeting of the Board of
Directors, or any duly constituted committee thereof, without a meeting pursuant
to a writing signed by that number of directors or committee members that would
be required to taken the same action at a meeting of the Board of Directors or
committee thereof at which all directors or committee members were present;
provided, however, that, if such action also requires shareholder approval, such
writing must be signed by all of the directors or committee members entitled to
vote on such matter; and
(ix) to determine what constitutes net income, total assets and the net
asset value of the Shares of each Series (or Class thereof) of the Corporation.
Any such determination made in good faith shall be final and conclusive, and
shall be binding upon the Corporation, and all holders (past, present and
future) of Shares of each Series and Class thereof.
<PAGE>
(b) Except as provided in the next sentence of this paragraph (b), Shares
of any Series, or Class thereof, hereafter issued which are redeemed, exchanged,
or otherwise acquired by the Corporation shall return to the status of
authorized and unissued Shares of such Series or Class. Upon the redemption,
exchange, or other acquisition by the Corporation of all outstanding Shares of
any Series (or Class thereof), hereafter issued, such Shares shall return to the
status of authorized and unissued Shares without designation as to series (if no
Shares of the Series remain outstanding) or with the same designation as to
Series, but no designation as to class within such Series (if Shares of such
Series remain outstanding, but no Shares of such Class thereof remain
outstanding), and all provisions of these articles of incorporation relating to
such Series, or Class thereof (including, without limitation, any statement
establishing or fixing the rights and preferences of such Series, or Class
thereof,), shall cease to be of further effect and shall cease to be a part of
these articles. Upon the occurrence of such events, the Board of Directors of
the Corporation shall have the power, pursuant to Minnesota Statutes Section
302A.135, Subdivision 5 or any successor provision and without shareholder
action, to cause restated articles of incorporation of the Corporation to be
prepared and filed with the Secretary of State of the State of Minnesota which
reflect such removal from these articles of all such provisions relating to such
Series, or Class thereof.
(c) The determination as to any of the following matters made by or
pursuant to the direction of the Board of Directors consistent with these
Articles of Incorporation and in the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of duties, shall be final and conclusive
and shall be binding upon the Corporation and every holder of shares of its
capital stock: namely, the amount of the assets, obligations, liabilities and
expenses of each Series (or Class thereof) of the Corporation; the amount of the
net income of each Series (or Class thereof) of the Corporation from dividends
and interest for any period and the amount of assets at any time legally
available for the payment of dividends in each Series (or Class thereof); the
amount of paid-in surplus, other surplus, annual or other net profits, or net
assets in excess of capital, undivided profits, or excess of profits over losses
on sales of securities of each Series (or Class thereof); the amount, purpose,
time of creation, increase or decrease, alteration or cancellation of any
reserves or charges and the propriety thereof (whether or not any obligation or
liability for which such reserves or charges shall have been created shall have
been paid or discharged); the market value, or any sale, bid or asked price to
be applied in determining the market value, of any security owned or held by or
in each Series of the Corporation; the fair value of any other asset owned by or
in each Series of the Corporation; the number of Shares of each Series (or Class
thereof) of the Corporation issued or issuable; any matter relating to the
acquisition, holding and disposition of securities and other assets by each
Series of the Corporation; and any question as to whether any transaction
constitutes a purchase of securities on margin, a short sale of securities, or
an underwriting of the sale of, or participation in any underwriting or selling
group in connection with the public distribution of any securities.
(d) The Board of Directors or the shareholders of the Corporation may
adopt, amend, affirm or reject investment policies and restrictions upon
investment or the use of assets of each Series of the Corporation and may
designate some such policies as fundamental and not subject to change other than
by a vote of a majority of the outstanding voting securities, as such phrase is
defined in the 1940 Act. of the affected Series of the Corporation.
9. The Corporation shall indemnify such persons for such expenses and
liabilities, in such manner, under such circumstances, and to the full extent
permitted by Section 302A.521 of the Minnesota Statutes, as now enacted or
hereafter amended, provided, however, that no such indemnification may be made
if it would be in violation of Section 17(h) of the 1940 Act. as now enacted or
hereafter amended.
10. To the fullest extent permitted by the Minnesota Statutes, Chapter
302A, as the same exists or may hereafter be amended (except as prohibited by
the 1940 Act, as the same exists or may hereafter be amended), a director of the
Corporation shall not be liable to the Corporation or its shareholders for
monetary damages for breach of fiduciary duty as a director.
IN WITNESS WHEREOF, the undersigned duly elected Secretary of the
Corporation has executed this Certificate of Amendment to the Articles of
Incorporation on July 23, 1993.
s/s William C. Joas
--------------------
Secretary
EXHIBIT 1B
CERTIFICATE OF DESIGNATION
OF SERIES OF COMMON SHARES
The undersigned, Secretary of IAI Series Fund., a Minnesota corporation
(the "Corporation"), hereby certifies that the following is a true, complete and
correct copy of resolutions duly adopted by a majority of the directors of the
Board of Directors of the Corporation on February 5, 1992.
DESIGNATION OF SERIES C, D AND E COMMON SHARES
WHEREAS, the shareholders of IAI Series Fund, Inc. (the "Corporation")
have authorized 10,000,000,000,000 shares of common stock, $.01 par value per
share, of which 2,000,000,000 are designated Series A Common Shares and
2,000,000 are designated Series B Common Shares, as set forth in the Articles of
Incorporation of the Corporation; and
WHEREAS, said Articles of Incorporation set forth that the balance of
96,000,000,000 authorized but unissued shares of common stock may be issued in
such series with such designations, preferences and relative, participating,
optional or other special rights, or qualifications, limitations or restrictions
thereof, as shall be stated or expressed in a resolution or resolutions
providing for the issue of any series of common shares as may be adopted from
time to time by the Board of Directors of the Corporation.
NOW, THEREFORE, BE IT RESOLVED, that 2,000,000,000 of the remaining
authorized but unissued common shares of the Corporation be, and they hereby
are, designated as Series C Common Shares, and said Series C Common Shares shall
represent interests in a separate and distinct portion of the Corporation's
assets which shall take the form of a separate portfolio of investment
securities, cash and other assets; 2,000,000,000 of the remaining authorized but
unissued common shares of the Corporation be, and they hereby are designated as
Series D Common Shares, and said Series D Common Shares shall represent
interests in a separate and distinct portion of the Corporation's assets which
shall take the form of a separate portfolio of investment securities, cash and
other assets; and 2,000,000,000 of the remaining authorized but unissued common
shares of the Corporation be, and they hereby are, designated as Series E Common
Shares, and said Series E Common Shares shall represent interests in a separate
and distinct portion of the Corporation's assets which shall take the form of a
separate portfolio of investment securities, cash and other assets.
FURTHER RESOLVED, that Articles 6, 7 and 8 of the Articles of
Incorporation of the Corporation setting forth the preferences and relative,
participating, optional or other special rights, and qualifications, limitations
and restrictions thereof, of and among each series of common shares be, and they
hereby are, adopted as the preferences and relative, participating, optional and
other rights, and the qualifications, limitations and restrictions thereof, of
and among the Series C, D and E Common Shares designated hereby and in relation
to the Series A and B Common Shares of the Corporation designated prior hereto.
BE IT FURTHER RESOLVED, that upon receipt of the purchase price for the
shares of common stock authorized to be issued hereinabove, either in connection
with the original issue of such shares or the issue following the redemption of
such shares by the Corporation (and after filing pursuant to Minnesota Statutes
302A.401, Subd. 3(b), a statement with the Secretary of State of the State of
Minnesota setting forth the name of the Corporation and the text of the relevant
portion of these resolutions and certifying the adoption of such portions of
these resolutions and the date of adoption), the officers of the Corporation are
hereby authorized and directed to issue certificates representing such Common
Shares (or confirm purchases to investors and credit such purchases to their
accounts), and such shares are hereby declared to be validly and legally issued,
fully paid and nonassessable.
IN WITNESS WHEREOF, the undersigned has signed this Certificate of
Designation on behalf of IAI Series Fund, Inc. this 5th day of February, 1992.
/s/ William C. Joas, Secretary
---------------------------
EXHIBIT 1C
CERTIFICATE OF DESIGNATION
OF SERIES OF COMMON SHARES
The undersigned, Secretary of IAI Series Fund., a Minnesota corporation
(the "Corporation"), hereby certifies that the following is a true, complete and
correct copy of resolutions duly adopted by a majority of the directors of the
Board of Directors of the Corporation on November 11, 1992.
DESIGNATION OF SERIES F COMMON SHARES
WHEREAS, the shareholders of IAI Series Fund, Inc. (the "Corporation")
have authorized 10,000,000,000,000 shares of common stock, $.01 par value per
share, of which 2,000,000,000 are designated Series A Common Shares, 2,000,000
are designated Series B Common Shares, 2,000,000,000 are designated Series C
Common Shares, 2,000,000,000 are designated Series D Common Shares and
2,000,000,000 are designated Series E Common Shares, as set forth in the
Articles of Incorporation of the Corporation or a Certificate of Designation
relating thereto; and
WHEREAS, said Articles of Incorporation set forth that the balance of
the authorized but unissued shares of common stock may be issued in such series
with such designations, preferences and relative, participating, optional or
other special rights, or qualifications, limitations or restrictions thereof, as
shall be stated or expressed in a resolution or resolutions providing for the
issue of any series of common shares as may be adopted from time to time by the
Board of Directors of the Corporation.
NOW, THEREFORE, BE IT RESOLVED, that 10,000,000,000 of the remaining
authorized but unissued common shares of the Corporation be, and they hereby
are, designated as Series F Common Shares, and said Series F Common Shares shall
represent interests in a separate and distinct portion of the Corporation's
assets which shall take the form of a separate portfolio of investment
securities, cash and other assets (referred to herein as "IAI Money Market Fund"
or "Money Market Fund").
FURTHER RESOLVED, that Articles 6, 7 and 8 of the Articles of
Incorporation of the Corporation setting forth the preferences and relative,
participating, optional or other special rights, and qualifications, limitations
and restrictions thereof, of and among each series of common shares be, and they
hereby are, adopted as the preferences and relative, participating, optional and
other rights, and the qualifications, limitations and restrictions thereof, of
and among the Series F Common Shares designated hereby and in relation to the
Series A, B, C, D, and E Common Shares of the Corporation designated prior
hereto.
BE IT FURTHER RESOLVED, that upon receipt of the purchase price for the
shares of common stock authorized to be issued hereinabove, either in connection
with the original issue of such shares or the issue following the redemption of
such shares by the Corporation (and after filing pursuant to Minnesota Statutes
302A.401, Subd. 3(b), a statement with the Secretary of State of the State of
Minnesota setting forth the name of the Corporation and the text of the relevant
portion of these resolutions and certifying the adoption of such portions of
these resolutions and the date of adoption), the officers of the Corporation are
hereby authorized and directed to issue certificates representing such Common
Shares (or confirm purchases to investors and credit such purchases to their
accounts), and such shares are hereby declared to be validly and legally issued,
fully paid and nonassessable.
IN WITNESS WHEREOF, the undersigned has signed this Certificate of
Designation on behalf of IAI Series Fund, Inc. this 12th day of November, 1992.
/s/ William C. Joas, Secretary
--------------------------
EXHIBIT 8A
CUSTODIAN AGREEMENT
THIS AGREEMENT, made as of the 12th day of May, 1993, by and between IAI
Series Fund, Inc., a Minnesota corporation (the "Fund"), for and on behalf of
each series of the Fund that adopts this Agreement (said series being
hereinafter referred to, individually, as a "Series" and, collectively, as the
"Series"), and Norwest Bank Minnesota N.A., a national banking association
organized and existing under the laws of the United States of America (the
"Custodian"). The name of each Series that adopts this Agreement and the
effective date of this Agreement with respect to each such Series are set forth
in Exhibit A hereto.
WITNESSETH:
WHEREAS, the Fund desires to appoint the Custodian as the custodian for the
assets of each Series, and the Custodian desires to accept such appointment,
pursuant to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
herein made, the Fund and the Custodian agree as follows:
Article 1. Definitions
The word "Securities" as used herein shall be construed to include, without
being limited to, shares, stocks, bonds, debentures, notes, scrip, participation
certificates, rights to subscribe, warrants, options, certificates of deposit,
bankers' acceptances, repurchase agreements, commercial paper, choses in action,
evidences of indebtedness, investment contracts, voting trust certificates,
certificates of indebtedness and certificates of interest of any and every kind
and nature whatsoever, secured and unsecured, issued or to be issued, by any
corporation, company, partnership (limited or general), association, trust,
entity or person, public or private, whether organized under the laws of the
United States, or any state, commonwealth, territory or possession thereof, or
organized under the laws of any foreign country, or any state, province,
territory or possession thereof, or issued or to be issued by the United States
government or any agency or instrumentality thereof, options on stock indexes,
stock index and interest rate futures contracts and options thereon, and other
futures contracts and options thereon.
The words "Written Order from the Fund" shall mean a writing signed or
initialed by one or more person or persons designated in the current certified
list referred to in Article 2, provided that if said writing is signed by only
one person, that person shall be an officer of the Fund designated in said
current certified list. "Written Order from the Fund" also may include a
communication effected directly between electro-mechanical or electronic devices
(including, but not limited to, facsimile transceivers) provided that management
of the Fund and the Custodian are satisfied that such procedures afford adequate
safeguards for the assets of each Series.
Article 2. Names, Titles and Signatures of Fund's Officers
The Fund shall certify to the Custodian the names, titles and signatures of
officers and others officers and other persons who are authorized to give any
Written Order from the Fund on behalf of each Series. The Fund agrees that,
whenever any change in such authorization occurs, it will file with the
Custodian a new certified list of names, titles and signatures which shall be
signed by at least one officer previously certified to the Custodian if any such
officer still holds an office in the Fund. The Custodian is authorized rely and
act upon the names, titles and signatures of the individuals as they appear in
the most recent such certified list which has been delivered to the Custodian as
hereinbefore provided.
<PAGE>
Article 3. Sub-Custodians and Depositories
Notwithstanding any other provision in this Agreement to the contrary, all
or any of the cash and Securities of each Series may be held in the Custodian's
own custody or in the custody of one or more other banks or trust companies
selected by the Custodian or as directed in one or more Written Orders from the
Fund. Any such sub-custodian must have the qualifications required for
custodians under the Investment Company Act of 1940, as amended. The Custodian
or sub-custodian, as the case may be, may participate directly or indirectly in
one or more "securities depositories" (as defined in Rule 17f-4 under the
Investment Company Act of 1940, as amended, or in any successor provisions or
rules thereto). Any references in this Agreement to the delivery of Securities
by or to the Custodian shall, with respect to Securities custodied with one of
the aforementioned "securities depositories," be interpreted to mean that the
Custodian shall cause a bookkeeping entry to be made by the applicable
securities depository to indicate the transfer of ownership of the applicable
Security to or from the Fund, all as set forth in one or more Written Orders
from the Fund. Additionally, any references in this Agreement to the receipt of
proceeds or payments with respect to Securities transactions shall, with respect
to Securities custodied with one of the aforementioned "securities
depositories," be interpreted to mean that the Custodian shall have received an
advice from such securities depository that said proceeds or payments have been
received by such depository and deposited in the Custodian's account.
Article 4. Receipt and Disbursing of Money
Section (1). The Fund shall from time to time cause cash owned by the Fund
to be delivered or paid to the Custodian for the account of any Series, but the
Custodian shall not be under any obligation or duty to determine whether all
cash of the Fund is being so deposited or to take any action or to give any
notice with respect to cash not so deposited. The Custodian agrees to hold such
cash, together with any other sum collected or received by it for or on behalf
of each Series of the Fund, in the account of such Series in conformity with the
terms of this Agreement. The Custodian shall be authorized to disburse cash from
the account of each Series only:
(a) upon receipt of and in accordance with Written Orders from the Fund
stating that such cash is being used for one or more of the following purposes,
and specifying such purpose or purposes, provided, however, that a reference in
such Written Order from the Fund to the pertinent paragraph or paragraphs of
this Article shall be sufficient compliance with this provision:
(i) the payment of interest;
(ii) the payment of dividends;
(iii) the payment of taxes;
(iv) the payment of the fees or charges to any investment adviser of any
Series;
(v) the payment of fees to a Custodian, stock registrar, transfer agent or
dividend disbursing agent for any Series;
(vi) the payment of distribution fees and commissions;
<PAGE>
(vii) the payment of any operating expenses, which shall be deemed to
include legal and accounting fees and all other expenses not specifically
referred to in this paragraph (a);
(viii) payments to be made in connection with the conversion, exchange or
surrender of Securities owned by any Series;
(ix) payments on loans that may from time to time be due;
(x) payment to a recognized and reputable broker for Securities purchased
by the Fund through said broker (whether or not including any regular brokerage
fees, charges or commissions on the transaction) upon receipt by the Custodian
of such Securities in proper form for transfer and after the receipt of a
confirmation from the broker or dealer with respect to the transaction;
(xi) payment to an issuer or its agent on a subscription for Securities of
such issuer upon the exercise of rights so to subscribe, against a receipt from
such issuer or agent for the cash so paid;
(b) as provided in Article 5 hereof; and
(c) upon the termination of this Agreement.
Section (2). The Custodian is hereby appointed the attorney-in-fact of the
Fund to use reasonable efforts to enforce and collect all checks, drafts or
other orders for the payment of money received by the Custodian for the account
of each Series and drawn to or to the order of the Fund and to deposit them in
the account of the applicable Series.
Article 5. Receipt of Securities
The Fund agrees to place all of the Securities of each Series in its
account with the Custodian, but the Custodian shall not be under any obligation
or duty to determine whether all Securities of any Series are being so
deposited, or to require that such Securities be so deposited, or to take any
action or give any notice with respect to the Securities not so deposited. The
Custodian agrees to hold such Securities in the account of the Series designated
by the Fund, in the name of the Fund or of bearer or of a nominee of the
Custodian, and in conformity with the terms of this Agreement. The Custodian
also agrees, upon Written Order from the Fund, to receive from persons other
than the Fund and to hold in the account of the Series designated by the Fund
Securities specified in said Written Order of the Fund, and, if the same are in
proper form, to cause payment to be made therefor to the persons from whom such
Securities were received, from the funds of the applicable Series held by the
Custodian in said account in the amounts provided and in the manner directed by
the Written Order from the Fund.
The Custodian agrees that all Securities of each Series placed in its
custody shall be kept physically segregated at all times from those of any other
Series, person, firm or corporation, and shall be held by the Custodian with all
reasonable precautions for the safekeeping thereof. Upon delivery of any
Securities of any Series to a subcustodian pursuant to Article 3 of this
Agreement, the Custodian will create and maintain records identifying those
assets which have been delivered to the subcustodian as belonging to the
applicable Series.
<PAGE>
Article 6. Delivery of Securities
The Custodian agrees to transfer, exchange or deliver Securities as
provided in Article 7, or on receipt by it of, and in accordance with, a Written
Order from the Fund in which the Fund shall state specifically which of the
following cases is covered thereby:
(a) in the case of deliveries of Securities sold by the Fund, against
receipt by the Custodian of the proceeds of sale and after receipt of a
confirmation from a broker or dealer (or, in accordance with industry practice
with respect to "same day trades" acceptance of delivery of such securities by
the broker or dealer, which acceptance is followed up by confirmation thereof
within the normal settlement period) with respect to the transaction;
(b) in the case of deliveries of Securities which may mature or be called,
redeemed, retired or otherwise become payable, against receipt by the Custodian
of the sums payable thereon or against interim receipts or other proper delivery
receipts;
(c) in the case of deliveries of Securities which are to be transferred to
and registered in the name of the Fund or of a nominee of the Custodian and
delivered to the Custodian for the account of the Series, against receipt by the
Custodian of interim receipts or other proper delivery receipts;
(d) in the case of deliveries of Securities to the issuer thereof, its
transfer agent or other proper agent, or to any committee or other organization
for exchange for other Securities to be delivered to the Custodian in connection
with a reorganization or recapitalization of the issuer or any split-up or
similar transaction involving such Securities, against receipt by the Custodian
of such other Securities or against interim receipts or other proper delivery
receipts;
(e) in the case of deliveries of temporary certificates in exchange for
permanent certificates, against receipt by the Custodian of such permanent
certificates or against interim receipts or other proper delivery receipts;
(f) in the case of deliveries of Securities upon conversion thereof into
other Securities, against receipt by the Custodian of such other Securities or
against interim receipts or other proper delivery receipts;
(g) in the case of deliveries of Securities in exchange for other
Securities (whether or not such transactions also involve the receipt or payment
of cash), against receipt by the Custodian of such other Securities or against
interim receipts or other proper delivery receipts;
(h) in the case of warrants, rights or similar Securities, the surrender
thereof in the exercise of such warrants, rights or similar Securities or the
surrender of interim receipts or temporary Securities for definitive Securities;
(i) for delivery in connection with any loans of securities made by the
Fund for the benefit of any Series, but only against receipt of adequate
collateral as agreed upon from time to time by the Custodian and the Fund;
(j) for delivery as security in connection with any borrowings by the Fund
for the benefit of any Series requiring a pledge of assets from the applicable
Series, but only against receipt of amounts borrowed;
<PAGE>
(k) for delivery in accordance with the provisions of any agreement among
the Fund, the Custodian and a bank, broker-dealer or futures commission merchant
relating to compliance with applicable rules and regulations regarding account
deposits, escrow or other arrangements in connection with transactions by the
Fund for the benefit of any Series;
(l) in a case not covered by the preceding paragraphs of this Article, upon
receipt of a resolution adopted by the Board of Directors of the Fund, signed by
an officer of the Fund and certified to by the Secretary, specifying the
Securities and assets to be transferred, exchanged or delivered, the purposes
for which such delivery is being made, declaring such purposes to be proper
corporate purposes, and naming a person or persons (each of whom shall be a
properly bonded officer or employee of the Fund) to whom such transfer, exchange
or delivery is to be made; and
(m) in the case of deliveries pursuant to paragraphs (a) through (k) above,
the Written Order from the Fund shall direct that the proceeds of any Securities
delivered, or Securities or other assets exchanged for or in lieu of Securities
so delivered, are to be delivered to the Custodian.
Article 7. Custodian's Acts Without Written Orders from the Fund
Unless and until the Custodian receives contrary Written Orders from the
Fund, the Custodian shall without order from the Fund:
(a) present for payment all bills, notes, checks, drafts and similar items,
and all coupons or other income items (except stock dividends), held or received
for the account of any Series, and which require presentation in the ordinary
course of business, and credit such items to the account of the applicable
Series conditionally, subject to final payment;
(b) present for payment all Securities which may mature or be called,
redeemed, retired or otherwise become payable and credit such items to the
account of the applicable Series conditionally, subject to final payment;
(c) hold for and credit to the account of any Series all shares of stock
and other Securities received as stock dividends or as the result of a stock
split or otherwise from or on account of Securities of the Series, and notify
the Fund, in the Custodian's monthly reports to the Fund, of the receipt of such
items;
(d) deposit or invest (as instructed from time to time by the Fund) any
cash received by it from, for or on behalf of any Series to the credit of the
account of the applicable Series;
(e) charge against the account for any Series disbursements authorized to
be made by the Custodian hereunder and actually made by it, and notify the Fund
of such charges at least once a month;
(f) deliver Securities which are to be transferred to and reissued in the
name of any Series, or of a nominee of the Custodian for the account of any
Series, and temporary certificates which are to be exchanged for permanent
certificates, to a proper transfer agent for such purpose against interim
receipts or other proper delivery receipts; and
(g) hold for disposition in accordance with Written Orders from the Fund
hereunder all options, rights and similar Securities which may be received by
the Custodian and which are issued with respect to any securities held by it
hereunder, and notify the Fund promptly of the receipt of such items.
<PAGE>
Article 8. Segregated Accounts
Upon receipt of a Written Order from the Fund, the Custodian shall
establish and maintain one or more segregated accounts for and on behalf of the
Series specified in said Written Order from the Fund for purposes of segregating
cash and/or Securities (of the type agreed upon from time to time by the
Custodian and the Fund) for the purpose or purposes specified in said Written
Order from the Fund.
Article 9. Delivery of Proxies
The Custodian shall deliver promptly to the Fund all proxies, notices and
communications with relation to Securities held by it which it may receive from
sources other than the Fund.
Article 10. Transfer
The Fund shall furnish to the Custodian appropriate instruments to enable
the Custodian to hold or deliver in proper form for transfer any Securities
which it may hold for the account of any Series of the Fund. For the purpose of
facilitating the handling of Securities, unless otherwise directed by Written
Order from the Fund, the Custodian is authorized to hold Securities deposited
with it under this Agreement in the name of its registered nominee or nominees
(as defined in the Internal Revenue Code and any regulations of the United
States Treasury Department issued thereunder or in any provision of any
subsequent federal tax law exempting such transaction from liability for stock
transfer taxes) and shall execute and deliver all such certificates in
connection therewith as may be required by such laws or regulations or under the
laws of any state. The Custodian shall, if requested by the Fund, advise the
Fund of the certificate number of each certificate so presented for transfer and
that of the certificate received in exchange therefor, and shall use its best
efforts to the end that the specific Securities held by it hereunder shall be at
all times identifiable.
Article 11. Transfer Taxes and Other Disbursements
The Fund, for and on behalf of each Series, shall pay or reimburse the
Custodian for any transfer taxes payable upon transfers of Securities made
hereunder, including transfers incident to the termination of this Agreement,
and for all other necessary and proper disbursements and expenses made or
incurred by the Custodian in the performance or incident to the termination of
this Agreement, and the Custodian shall have a lien upon any cash or Securities
held by it for the account of each applicable Series of the Fund for all such
items, enforceable, after thirty days' written notice by registered mail from
the Custodian to the Fund, by the sale of sufficient Securities to satisfy such
lien. The Custodian may reimburse itself by deducting from the proceeds of any
sale of Securities an amount sufficient to pay any transfer taxes payable upon
the transfer of Securities sold. The Custodian shall execute such certificates
in connection with Securities delivered to it under this Agreement as may be
required, under the provisions of any federal revenue act and any regulations of
the Treasury Department issued thereunder or any state laws, to exempt from
taxation any transfers and/or deliveries of any such Securities as may qualify
for such exemption.
<PAGE>
Article 12. Custodian's Liability for
Proceeds of Securities Sold
If the mode of payment for Securities to be delivered by the Custodian is
not specified in the Written Order from the Fund directing such delivery, the
Custodian shall make delivery of such Securities against receipt by it of cash,
a postal money order or a check drawn by a bank, trust company or other banking
institution, or by a broker named in such Written Order from the Fund, for the
amount the Custodian is directed to receive. The Custodian shall be liable for
the proceeds of any delivery of Securities made pursuant to this Article, but
provided that it has complied with the provisions of this Article, only to the
extent that such proceeds are actually received.
Article 13. Custodian's Report
The Custodian shall furnish the Fund, as of the close of business on the
last business day of each month, a statement showing all cash transactions and
entries for the account of each Series of the Fund. The books and records of the
Custodian pertaining to its actions as Custodian under this Agreement shall be
open to inspection and audit, at reasonable times, by officers of, and auditors
employed by, the Fund. The Custodian shall furnish the Fund with a list of the
Securities held by it in custody for the account of each Series of the Fund as
of the close of business on the last business day of each quarter of the Fund's
fiscal year.
Article 14. Custodian's Compensation
The Custodian shall be paid compensation at such rates and at such times as
may from time to time be agreed on in writing by the parties hereto (as set
forth with respect to each Series in Exhibit B hereto), and the Custodian shall
have a lien for unpaid compensation, to the date of termination of this
Agreement, upon any cash or Securities held by it for the Series accounts of the
Fund, enforceable in the manner specified in Article 11 hereof.
Article 15. Duration. Termination and Amendment of Agreement
This Agreement shall remain in effect with respect to each Series, as it
may from time to time be amended, until it shall have been terminated as
hereinafter provided, but no such amendment or termination shall affect or
impair any rights or liabilities arising out of any acts or omissions to act
occurring prior to such amendment or termination.
The Custodian may terminate this Agreement by giving the Fund ninety days'
written notice of such termination by registered mail addressed to the Fund at
its principal place of business.
The Fund may terminate this Agreement by giving ninety days' written notice
thereof delivered by registered mail to the Custodian at its principal place of
business. Additionally, this Agreement may be terminated with respect to any
Series of the Fund pursuant to the same procedures, in which case this Agreement
shall continue in full effect with respect to all other Series of the Fund.
<PAGE>
Upon termination of this Agreement, the assets of the Fund, or Series
thereof, held by the Custodian shall be delivered by the Custodian to a
successor custodian upon receipt by the Custodian of a Written Order from the
Fund designating the successor custodian; and if no successor custodian is
designated in said Written Order from the Fund, the Custodian shall, upon such
termination, deliver all such assets to the Fund.
This Agreement may be amended or terminated at any time by the mutual
agreement of the Fund and the Custodian. Additionally, this Agreement may be
amended or terminated with respect to any Series of the Fund at any time by the
mutual agreement of the Fund and the Custodian, in which case such amendment or
termination would apply to such Series amending or terminating this Agreement
but not to the other Series of the Fund.
This Agreement may not be assigned by the Custodian without the consent of
the Fund, authorized or approved by a resolution of its Board of Directors.
Article 16. Successor Custodian
Any bank or trust company into which the Custodian or any successor
custodian may be merged or converted or with which it or any successor custodian
may be consolidated, or any bank or trust company resulting from any merger,
conversion or consolidation to which the Custodian or any successor custodian
shall be a party, or any bank or trust company succeeding to the business of the
Custodian, shall be and become the successor custodian without the execution of
any instrument or any further act on the part of the Fund or the Custodian or
any successor custodian.
Any successor custodian shall have all the power, duties and obligations of
the preceding custodian under this Agreement and any amendments thereof and
shall succeed to all the exemptions and privileges of the preceding custodian
under this Agreement and any amendments thereof.
Article 17. General
Notwithstanding any other provision in this Agreement, the Custodian agrees
to follow the settlement and income payment policies and standards set forth in
Exhibit C to this Agreement.
Nothing expressed or mentioned in or to be implied from any provisions of
this Agreement is intended to give or shall be construed to give any person or
corporation other than the parties hereto any legal or equitable right, remedy
or claim under or in respect of this Agreement or any covenant, condition or
provision herein contained, this Agreement and all of the covenants, conditions
and provisions hereof being intended to be, and being, for the sole and
exclusive benefit of the parties hereto and their respective successors and
assigns.
It is the purpose and intention of the parties hereto that the Fund shall
retain all the power, rights and responsibilities of determining policy,
exercising discretion and making decisions with respect to the purchase, or
other acquisition, and the sale, or other disposition, of all of its Securities,
and that the duties and responsibilities of the Custodian hereunder shall be
limited to receiving and safeguarding the assets and Securities of each Series
of the Fund and to delivering or disposing of them pursuant to the Written Order
from the Fund as aforesaid, and the Custodian shall have no authority, duty or
responsibility for the investment policy of the Fund or for any acts of the Fund
in buying or otherwise acquiring, or in selling or otherwise disposing of, any
Securities, except as hereinbefore specifically set forth.
The Custodian shall in no case or event permit the withdrawal of any money
or Securities of the Fund upon the mere receipt of any director, officer,
employee or agent of the Fund, but shall hold such money and Securities for
disposition under the procedures herein set forth.
Article 18. Standard of Care; Indemnification
In connection with the performance of its duties and responsibilities
hereunder, the Custodian (and each officer, employee, agent, sub-custodian and
depository of or engaged by the Custodian) shall at all times be held to the
standard of reasonable care. The Custodian shall be fully responsible for any
action taken or omitted by any officer, employee, agent, sub-custodian or
depository of or engaged by the Custodian to the same extent as if the Custodian
were to take or omit to take such action directly. The Custodian agrees to
indemnify and hold the Fund and each Series of the Fund harmless from and
against any and all loss, liability and expense, including reasonable legal fees
and expenses, arising out of the Custodian's own negligence, misfeasance, bad
faith or willful misconduct or that of any officer, employee, agent,
sub-custodian and depository of or engaged by the Custodian in the performance
of the Custodian's duties and obligations under this Agreement; provided,
however, that, notwithstanding any other provision in this Agreement, the
Custodian shall not be responsible for the following:
<PAGE>
(a) any action taken or omitted in accordance with any Written Order from
the Fund reasonably believed by the Custodian to be genuine and to be signed by
the proper party or parties; or
(b) any action taken or omitted in reasonable reliance on the advice of
counsel of or reasonably acceptable to the Fund relating to any of its duties
and responsibilities hereunder.
The Fund agrees to indemnify and hold the Custodian harmless from and
against any and all loss, liability and expense, including reasonable legal fees
and expenses, arising out of the performance by the Custodian (and each officer,
employee, agent, sub-custodian and depository of or engaged by the Custodian) of
its duties and responsibilities under this Agreement provided that the Custodian
(or any officer, employee, agent, sub-custodian or depository of or engaged by
the Custodian, as applicable) exercised reasonable care in the performance of
its duties and responsibilities under this Agreement.
Article 19. Effective Date
This Agreement shall become effective with respect to each Series that
adopts this Agreement when this Agreement shall have been approved with respect
to such Series by the Board of Directors of the Fund. The effective date with
respect to each Series shall be set forth on Exhibit A hereto. The Fund shall
transmit to the Custodian promptly after such approval by said Board of
Directors a copy of its resolution embodying such approval, certified by the
Secretary of the Fund.
Article 20. Governing Law
This Agreement is executed and delivered in Minneapolis, Minnesota, and the
laws of the State of Minnesota shall be controlling and shall govern the
construction, validity and effect of this contract.
IN WITNESS WHEREOF, the Fund and the Custodian have caused this Agreement
to be executed in duplicate as of the date first above written by their duly
authorized officers.
ATTEST: IAI SERIES FUND, INC.
/s/ William C. Joas By: /s/ Richard E. Struthers
Secretary Its: President
ATTEST: NORWEST BANK MINNESOTA, N.A.
/s/ Brent Siegel By: /s/ Theresa G. Burks
Trust Officer Its: Assistant Vice President
<PAGE>
EXHIBIT A
(as amended through May 12,1993)
to
CUSTODIAN AGREEMENT
between
IAI SERIES FUND, INC.
and
NORWEST BANK MINNESOTA, N.A.
NAME OF SERIES EFFECTIVE DATE
- --------------- --------------
IAI Emerging Growth Fund (Series A) May 12, 1993
IAI Government Fund (Series B) May 12, 1993
IAI Midcap Growth Fund (Series C) May 12, 1993
IAI Tax Free Fund (Series D) May 12, 1993
IAI Balanced Fund (Series E) May 12, 1993
IAI Money Market Fund (Series F) May 12, 1993
<PAGE>
Exhibit B
(as amended through May 12, 1993)
to
CUSTODIAN AGREEMENT
between
IAI SERIES FUND, INC.
and
NORWEST BANK MINNESOTA, N.A.
Compensation Schedule
---------------------
<TABLE>
<CAPTION>
Annual Fees Rate
- ----------- ----
<S> <C>
Fee Per Global Market Value $0.0012
(Domestic Securities Excluded)
Fee Per Issue Held $25.00
(Global Securities Excluded)
Fee Per Account $4,000.00
Norwest ACCESS (on-line cost $.50 billed to client) $3,600.00
First year waived excluding communications costs.
Transaction Fees - Domestic Securities
- --------------------------------------
DTC Purchase/Sale/Maturity $8.00
Fed Purchase/Sale Maturity 10.00
New York Physical/Sale/Maturity 20.00
Commercial Paper Purchase/Maturity 20.00
Other Physical Purchase/Sale/Maturity 20.00
Options/Futures Purchase/Sale 20.00
Book Entry/Deposit/Withdrawal $12.50
Book Entry Re-Registration 15.00
Physical Re-Registration 100.00
GNMA and Fed Agency Principal Payments $5.00
CMO & Private Placement Payments 15.00
Non-Trade Wire 10.00
Transfer to DDA/Issuance 0.00
Overnight Sweep Activity 0.00
Transaction Fees - Global Securities
- ------------------------------------
Global Equity Transactions $50.00
Forward Currency Purchase/Sale 0.00
Total bill will receive a 7% discount.
</TABLE>
<PAGE>
Exhibit C
(as amended through May 12, 1993)
to
CUSTODIAN AGREEMENT
between
IAI SERIES FUND, INC.
and
NORWEST BANK MINNESOTA. N.A.
Settlement and Income Payment Policies and Standards
----------------------------------------------------
Settlement Policy
Norwest will:
1. Guarantee posting of all trades on contractual settlement date based on the
following standards:
a. Complete information for all 5-day settlements (Depository Trust
Company-DTC and physical settlements) is received by Trade Date + 1.
b. Complete information for trades settling through Participant Trust
Company(PTC) is received by Trade Date + 1.
c. Complete information for Federal Book Entry trades is received by 11:00
arn on Settlement Date for same day settlement and by 4:00 pm on Trade Date for
next day settlement.
d. Complete information for International trades is received by 11:00 am on
Trade Date.
e. For physical trades settling same day or next day in New York or
Minneapolis, complete trade information is received by:
1. 9:00 am on Settlement Date for sales settling in Minneapolis.
2. 10:30 am on Settlement Date for sales settling in New York.
3. 11:00 am on Settlement Date for all purchases.
2. Process any trade information which is received after the Norwest standard on
a best efforts basis.
3. Make efforts to contact the party with investment authority to obtain
direction for all ID confirms not affirmed by Trade Date + 3.
4. Guarantee posting on contractual settlement date for the sale of any security
which is on loan through Norwest's Securities Lending Program if trade
information is received by 2:00 pm on Trade Date.
<PAGE>
5. Not be responsible for posting trades on Settlement Date if trade information
is incomplete, incorrect, or late.
6. Not be responsible for posting a sale on Settlement Date if the security is
not in good deliverable form on Trade Date. This may include, but is not
restricted to, the following types of securities:
a. Restricted Stock
b. Private Placements
c. Limited Partnerships
d. Closely Held Issues
7. Make efforts to obtain written authorization for all trades which are not
directly affirmed to DTC by the client.
8. Retain the right to reverse the posting of any sale if the underlying
security was involved in a full or partial call and the sale was contracted
after the call publication date.
Income Payment Policy
- ---------------------
Norwest will credit income in Fed funds and cash becomes available for
investment immediately.
<TABLE>
<CAPTION>
Security Type Dividends/Interest Maturities Principal Payments
- ------------- ------------------ ---------- ------------------
<S> <C> <C> <C>
Bond Calls, Full and Partial Calls Receipt* Receipt
Equities, Common & Preferred Payable Date N/A N/A
Bonds, Corporate & Municipals Payable Date Payable Date Receipt
Treasuries Payable Date Payable Date Receipt
GNMA I & II Payable Date N/A Payable + 2**
Fed Agencies Payable Date Payable Date Receipt
Other Govt't Agencies Payable Date Payable Date Receipt
Commercial Paper Payable Date Payable Date N/A
Repurchase Agreements Payable Date Payable Date N/A
Mutual Funds Receipt N/A N/A
Unit Investment Trusts (UITs) Receipt N/A Receipt
Global Securities Receipt Receipt N/A
Certificates of Deposit Receipt Payable Date N/A
Passbook, Time Deposits Receipt Payable Date N/A
</TABLE>
* After 8/1/93 with the implementation of the AMS trust system, bond calls
will be paid on payable Date in Fed Funds credit.
** After 8/1/93 with the implementation of the AMS trust system, GNMA
principal payments will be paid on Payable Date + 1 in Fed Funds credit.
EXHIBIT 9
ADMINISTRATIVE AGREEMENT
THIS AGREEMENT, dated as of the 1st day of May, 1991, by and between
IAI Series Fund, Inc., a Minnesota corporation (the "Fund"), on behalf of each
portfolio represented by a series of shares of common stock of the Fund (the
"Portfolios") set forth in Exhibit A hereto, as supplemented from time to time,
and Investment Advisers, Inc. ("Advisers"), a Delaware corporation:
WITNESSETH THAT:
WHEREAS, the Fund, on behalf of each Portfolio, desires to engage
Advisers, and Advisers has agreed to provide such administrative, dividend
disbursing, transfer, and accounting services as may be required by each
Portfolio pursuant to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto, intending to be legally bound, do hereby
agree as follows:
Section 1. Appointment. The Fund hereby appoints Advisers as the
administrative agent, dividend disbursing agent, transfer agent, redemption
agent and accounting services agent for each Portfolio, and Advisers hereby
accepts such appointments and agrees to act in such capacities upon the terms
and conditions set forth in this Agreement.
ACCOUNTING SERVICES
Section 2. Required Accounts and Records. Advisers shall maintain and
keep current such accounts and records relating to the business of the Fund and
the Portfolios as are necessary or advisable for compliance with applicable
regulations, including, without limitation, Rules 31a-1 and 31a-2 under the
Investment Company Act of 1940, as amended, in such form as may be mutually
agreed to between the Fund and Advisers.
Section 3. Required Calculations. Advisers shall perform the
calculations necessary to calculate such net asset values and in accordance with
the current Prospectus and Statement of Additional Information of the Fund and
the Portfolios. The pricing services or other sources from which daily price
quotations on portfolio securities are to be obtained for purposes calculating
such daily net asset value shall be paid for by Advisers and approved by the
Fund.
Section 4. Periodic Reports. Advisers shall supply to the Fund such
daily and periodic reports with respect to the Portfolios as the Fund is
required by law, rule or regulation to maintain and, additionally, as requested
by the Fund and agreed upon by Advisers.
<PAGE>
Section 5. Ownership of Accounts and Reports. The accounts and records
required hereunder, in the agreed upon format, maintained by Advisers shall be
the property of the Fund and shall be made available to the Fund within a
reasonable period of time upon proper demand. Advisers shall assist the Fund's
independent auditors, or upon approval of the Fund, or upon demand, any
regulatory body, in any requested review of the Fund's accounts and records but
shall be reimbursed for all expenses and employee time invested in any such
review outside of routine and normal periodic reviews. Upon receipt from the
Fund of the necessary information, Advisers shall supply the necessary data for
the Fund's (or the Fund's accountant's) completion of any necessary tax returns,
questionnaires, periodic reports to shareholders and such other reports and
information requests as the Fund and Advisers shall agree upon from time to
time.
TRANSFER AGENCY
Section 6. Share Issuances. Advisers shall make original issues of the
shares of each Portfolio in accordance with this Agreement, with such
Portfolio's current Prospectus and Statement of Additional Information and with
the instructions from the Fund.
Section 7. Processing of Purchase Orders. Prior to the daily
determination of net asset value in accordance with each Portfolio's current
Prospectus and Statement of Additional Information, Advisers shall process all
purchase orders received since the last determination of such Portfolio's net
asset value.
Section 8. Transfers of Shares. Transfers of shares shall be registered
and new share certificates shall be issued by Advisers upon surrender of
properly endorsed outstanding Portfolio share certificates with all necessary
signatures guarantees and satisfactory evidence of compliance with all
applicable laws relating to the payment or collection of taxes.
Section 9. Issuance of Replacement Certificates. Advisers may issue new
Portfolio share certificates in place of Portfolio share certificates
represented to have been lost, destroyed or stolen, upon receiving indemnity
satisfactory to Advisers and may issue new Portfolio share certificates in
exchange for, and upon surrender of, mutilated Portfolio share certificates.
Section 10. Maintenance of Stock Registry Records. Advisers will
maintain stock registry records in the usual form in which it will note the
issuance, transfer and redemption of Portfolio shares and the issuance and
transfer of Portfolio share certificates, and is also authorized to maintain an
account in which it will record the Portfolio shares and fractions issued and
outstanding from time to time for which issuance of Portfolio share certificates
is deferred.
Section 11. Other Transfer Agency Duties of Advisers. Advisers will, in
addition to the duties and functions above-mentioned, perform the usual duties
and functions of a stock transfer agent for a registered investment company.
<PAGE>
REDEMPTIONS
Section 12. Processing of Redemption Requests. Prior to the daily
determination of net asset value in accordance with each Portfolio's current
Prospectus and Statement of Additional Information, Advisers shall process all
requests from shareholders to redeem such Portfolio's shares. The proceeds of
redemption shall be remitted by Advisers in accordance with the Portfolio's
current Prospectus and Statement of Additional Information by check mailed to
the shareholder at his registered address.
DIVIDENDS
Section 13. Notices. Upon the declaration of each dividend and each
capital gains distribution with respect to each Portfolio by the Board of
Directors of the Fund, Advisers shall process such dividends and distributions
in accordance with instructions received from the Fund and in accordance with
the Portfolio's current Prospectus and Statement of Additional Information and
with the applicable laws.
OTHER SERVICES
Section 14. Other Services Under This Agreement. In addition to the
services as administrative agent, dividend disbursing agent, transfer agent,
redemption agent and accounting services agent, as set forth above, Advisers
will perform, for no additional compensation, other related services for the
Fund and each Portfolio as agreed from time to time, including but not limited
to, preparation and mailing Federal tax information forms, mailing semi-annual
reports of the Portfolios, preparation of an annual list of Portfolio
shareholders, and mailing notices of Portfolio shareholders' meetings, proxies
and proxy statements.
COMPENSATION
Section 15. Compensation: Allocation of Expenses. In payment for the
services to be rendered by Advisers under this Agreement, the Fund shall pay
Advisers a monthly fee for each Portfolio within ten (10) business days after
the last day of the month in which said services were rendered equal to the
percentage of the value of the Portfolio's net assets on the last day of the
month, as set forth in Exhibit A hereto, as supplemented from time to time. This
fee shall be prorated for any fraction of a month at the commencement or
termination of this Agreement with respect to a Portfolio.
In addition to the compensation provided in this Section, each Fund
shall pay all its other costs and expenses not expressly assumed by Advisers,
including, without limitation, costs incurred in the purchase and sale of
assets, interest, taxes, charges to the custodian of the Portfolio's assets,
costs of reports and proxy materials sent to existing Portfolio shareholders,
fees paid for independent accounting and legal services, costs of printing
Prospectuses for existing Portfolio shareholders, costs of registering the
Portfolio's shares, postage and insurance premiums. Except as expressly provided
herein, Advisers shall pay for the costs and expenses incurred in connection
with the rendering of services under this Agreement, including the salaries and
benefits of all necessary personnel (including overhead), the costs and expenses
of all computer hardware and software and the costs of all pricing services used
in connection with the calculations of each Portfolio's net asset value.
INSTRUCTIONS
Section 16. Authorizing Resolutions. The Fund shall from time to time
file with Advisers with respect to each Portfolio a certified copy of each
resolution of its Board of Directors authorizing the transmittal of instructions
and specifying the person or persons authorized to give instructions in
accordance with this Agreement.
GENERAL PROVISIONS
Section 17. Indemnification. Advisers, in carrying out and performing
the terms and conditions of this Agreement, shall incur no liability for its
status hereunder or for any actions taken or omitted in good faith and without
negligence, and the Fund, on behalf of the Portfolios, hereby agrees to
indemnify and hold Advisers harmless from any and all loss, liability and
expense, including any legal expenses, arising out of Advisers' performance or
status or any act or omission of Advisers under this Agreement other than that
incurred by Advisers' negligence or lack of good faith. Without limitation of
the foregoing:
(a) Advisers may rely upon the advice of the Fund, or of counsel, who
may be counsel for the Fund or counsel for Advisers and upon statements
of accountants, brokers and other persons believed by it in good faith
to be expert in the matters upon which they are consulted and for nay
actions taken in good faith upon such statements, Advisers shall not be
liable to any person or party; and
(b) Advisers may rely and shall be protected n acting upon any
signature, instruction, request, letter of transmittal, certificate,
opinion of counsel, statement, instrument, report, notice, consent,
order, or other paper or document believed in good faith by it to be
genuine and to have been signed, presented or authorized by the
purchaser, Fund, or other proper party or parties.
Section 18. Interpretation: Governing Law. This Agreement shall be
subject to and interpreted in accordance with all applicable provisions of law,
including, without limitation, the Investment Company Act of 1940, as amended,
and the rules and regulations promulgated thereunder. To the extent that the
provisions herein contained conflict with any such applicable provisions of law,
the latter shall control. The law of the State of Minnesota shall otherwise
govern the construction, validity and effect of this Agreement.
Section 19. Effective Date: Duration: Termination. The effective date
of this Agreement with respect to each Portfolio shall be the date set forth on
Exhibit A hereto, as supplemented from time to time. Wherever referred to in
this Agreement, the vote or approval of the holders of a majority of the
outstanding voting securities of a Portfolio shall mean the vote of 67% or more
of the voting securities present at a regular or special meeting of shareholders
duly called if more than 50% of the Portfolio's outstanding securities are
present in person or by proxy or the vote of more than 50% of the Portfolio's
outstanding voting securities, whichever is lesser.
<PAGE>
Unless sooner terminated as hereinafter provided, this Agreement shall
continue in effect from year to year with respect to a Portfolio but only so
long as such continuance is specifically approved at least annually (1) by the
Board of Directors of the Fund or by the vote of the holders of a majority of
the outstanding voting securities of the Portfolio, and (2) by the vote of a
majority of the directors who are not parties to this Agreement or "interested
persons" of any such party (as defined in the Investment Company Act of 1940, as
amended), case in person at a meeting called for the purpose of voting on such
approval.
This Agreement may be terminated with respect to a Portfolio at any
time without the payment of any penalty by the vote of the Board of Directors of
the Fund or by the vote of the holders of a majority of the outstanding voting
securities of the Portfolio, or by Advisers, upon sixty (60) days' written
notice to the other party. Upon the effective termination date, subject to
payment to Advisers of all amounts due to Advisers as of said date, Advisers
shall make available to the Portfolio or its designated recordkeeping successor
all of the records of the Portfolio maintained under this Agreement then in
Advisers' possession.
This Agreement shall automatically terminate in the event of its
assignment (as defined by the provisions of the Investment Company Act of 1940,
as amended).
Section 20. Amendments. No material amendment to this Agreement shall be
effective until approved by Advisers and by vote of a majority of the Board of
Directors of the Fund who are not interested persons of Advisers.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their duly authorized officers as of the day and year first above
written.
IAI SERIES FUND, INC.
By /s/ Noel P. Rahn
Its President
INVESTMENT ADVISERS, INC.
By /s/ Noel P. Rahn
Its Chief Executive Officer
EXHIBIT 16
CALCULATIONS OF PERFORMANCE DATA
Calculation of Cumulative
Total Return
Formula:
CTR = (ERV-P) 100
P
CTR = cumulative total return
ERV = ending redeemable value at end of period
P = initial payment ($1000 hypothetical)
Emerging Growth Fund
- --------------------
<TABLE>
<CAPTION>
Purchase Date Reinvestment Date Amount Price per Number of Total Shares
Share Shares Owned
----------- ---------------- ----- ----- ------ -----
<S> <C> <C> <C> <C> <C>
8/5/91 --- $1,000.00 $10.00 100 100
12/26/91 $ 1.28 $11.78 .1087 100.1087
ERV on 12/31/91: $12.34 ----
$1236.34
========
</TABLE>
CTR = (1236.34 - 1000) 100
---------------
1000
CTR = 23.63%
Government Fund
- ---------------
<TABLE>
<CAPTION>
Purchase Date Reinvestment Date Amount Price per Number of Total Shares
Share Shares Owned
- ------------ ----------------- ------- ----- ------ -----
<S> <C> <C> <C> <C> <C>
8/5/91 --- $1,000.00 $10.00 100 100
9/25/91 $ 6.18 $10.10 .6119 100.6119
12/26/91 $ 11.74 $10.52 1.1161 100.7280
ERV on 12/31/91: $10.58 ----
$1076.28
========
</TABLE>
CTR = (1076.28 - 1000) 100
---------------
1000
CTR = 7.63%
<PAGE>
Calculation of Average Annual Total Return
Formula: P(1 +T)(a) = ERV
P = initial payment ($1000 hypothetical)
T = average annual total return
n = number of years
ERV = ending redeemable value at end of period
Emerging Growth Fund
- --------------------
1000(1 + T).405 = 1236.34
T = 68.84%
Government Fund
- ---------------
1000 (1 + T).405 = 1069.74
T = 18.11%
EXHIBIT 99B
FUND PORTFOLIO
IAI CAPITAL APPRECIATION FUND
JUNE 30, 1996
(percentage figures indicate percentage of total net assets)
(unaudited)
<TABLE>
<CAPTION>
COMMON STOCKS 91.5%
Market
Quantity Value(a)
_______________________________________________________________________________
COMMERCIAL SERVICES 19.9%
<S> <C> <C>
Affiliated Computer Services Class A (b) 10,000 $470,000
Barnett (b) 20,000 575,000
Career Horizons (b) 9,000 315,000
CHS Electronics (b) 28,000 378,000
G & K Services Class A 10,800 307,800
Heritage Media Class A (b) 11,900 474,512
Integrated Systems Consulting Group (b) 14,900 290,550
Outdoor Systems (b) 20,000 705,000
Peak Technologies (b) 27,000 631,125
Superior Services (b) 20,800 353,600
Valassis Communications (b) 21,800 403,300
-------
4,903,887
_______________________________________________________________________________
CONSUMER DURABLES 2.5%
Coleman (b) 6,000 254,250
Empire of Carolina (b) 30,000 360,000
614,250
_______________________________________________________________________________
CONSUMER SERVICES 12.3%
Barefoot 5,200 57,200
Coach USA (b) 36,500 812,125
EZ Communications Class A (b) 22,000 522,500
John Q Hammons Hotels (b) 32,700 355,612
SFX Broadcasting Class A (b) 11,900 464,100
Stewart Enterprises Class A 7,350 229,688
Trump Hotels & Casino Resorts (b) 21,000 598,500
---------
3,039,725
_______________________________________________________________________________
See accompanying Notes to Fund Portfolio
<PAGE>
_______________________________________________________________________________
ELECTRONIC TECHNOLOGY 9.0%
Allen Group 15,100 $328,425
Centennial Cellular Class A (b) 15,000 253,125
Checkpoint Systems (b) 10,400 357,500
CommNet Cellular (b) 8,900 267,000
Microchip Technology (b) 20,000 495,000
Tollgrade Communications (b) 22,100 508,300
---------
2,209,350
_______________________________________________________________________________
ENERGY MINERALS 3.0%
Forcenergy Gas Exploration (b) 39,800 751,225
_______________________________________________________________________________
FINANCIAL 8.4%
CapMAC 12,500 356,250
CMAC Investment 3,000 172,500
Credit Acceptance (b) 17,000 357,000
Enhance Financial Services 5,000 140,000
RISCORP Class A (b) 16,000 292,000
Southwest Securities 14,000 162,750
United Assets Management 12,000 294,000
Vesta Insurance 9,000 300,375
--------
2,074,875
_______________________________________________________________________________
HEALTH SERVICES 3.0%
Community Health Systems (b) 5,800 300,150
IMPATH (b) 24,000 432,000
--------
732,150
_______________________________________________________________________________
HEALTH TECHNOLOGY 0.5%
InControl (b) 10,000 117,500
_______________________________________________________________________________
INDUSTRIAL SERVICES 6.3%
Camco International 4,000 135,500
Petroleum Geo-Services ADR (b) 28,600 811,525
Teekay Shipping 23,000 603,750
--------
1,550,775
_______________________________________________________________________________
See accompanying Notes to Fund Portfolio
<PAGE>
_______________________________________________________________________________
NON-ENERGY MINERALS 5.9%
Dayton Superior (b) 45,000 $590,625
Minerals Technologies 25,100 859,675
----------
1,450,300
_______________________________________________________________________________
PROCESS INDUSTRIES 3.8%
AptarGroup 13,000 393,250
Mohawk (b) 7,400 131,350
Polymer Group (b) 24,500 428,750
-------
953,350
_______________________________________________________________________________
PRODUCER MANUFACTURING 6.9%
Exide 11,000 266,750
Kennametal 8,800 299,200
Roper 10,000 487,500
Special Devices (b) 15,100 241,600
Watsco 7,500 157,500
Zebra Technologies Class A (b) 14,000 248,500
---------
1,701,050
______________________________________________________________________________
RETAIL TRADE 4.0%
Barnes & Noble (b) 5,900 211,663
Heilig-Meyers 32,000 768,000
-------
979,663
_______________________________________________________________________________
TECHNOLOGY SERVICES 5.3%
American Management Systems (b) 13,000 380,250
Carnegie Group (b) 30,000 262,500
Reptron Electronics (b) 27,000 475,875
Safeguard Scientifics (b) 2,400 187,200
---------
1,305,825
_______________________________________________________________________________
TRANSPORTATION 0.7%
Heartland Express 6,000 160,500
_______________________________________________________________________________
See accompanying Notes to Fund Portfolio
<PAGE>
_______________________________________________________________________________
TOTAL INVESTMENTS IN COMMON STOCKS
(Cost: $20,224,163) $22,544,425
_______________________________________________________________________________
TOTAL INVESTMENTS IN SECURITIES
(Cost: $20,224,163) (c) $22,544,425
_______________________________________________________________________________
OTHER ASSETS AND LIABILITIES (NET) - 8.5% $2,096,083
_______________________________________________________________________________
TOTAL NET ASSETS $24,640,508
_______________________________________________________________________________
</TABLE>
See accompanying Notes to Fund Portfolio
<PAGE>
IAI Capital Appreciation Fund
Notes to Fund Portfolio
June 30, 1996
(unaudited)
[ a ]
Market value of securities is determined as described in Note 1 to the
financial statements, under "Security Valuation."
[ b ]
Currently non-income producing security.
[ c ]
At June 31, 1996, the cost of securities for federal income tax purposes
and the aggregate gross unrealized appreciation and depreciation based on that
cost were as follows:
Cost for federal tax purposes $ 20,224,163
======================
Gross unrealized appreciation $ 2,654,809
Gross unrealized depreciation ( 334,547 )
-----------------------
Net unrealized appreciation $ 2,320,262
=======================
<PAGE>
IAI Capital Appreciation Fund
Statement of Assets and Liabilities
June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Assets
<S> <C>
Investments in securities, at market $ 22,544,425
( Cost: $20,224,163 ) ( See Fund Portfolio )
Cash in bank on demand deposit 1,382,170
Receivable for investment securities sold 974,217
Dividends and accrued interest receivable 4,213
---------------------
Total assets 24,905,025
---------------------
Liabilities
Payable for investment securities purchased 262,677
Accrued management fee 1,840
---------------------
Total liabilities 264,517
---------------------
Net assets applicable to outstanding capital stock $ 24,640,508
======================
Represented By:
Capital stock $ 18,324
Additional paid-in capital 21,718,908
Undistributed net investment loss (28,083)
Accumulated net realized gains 611,097
Unrealized appreciation (depreciation) on
investment securities 2,320,262
---------------------
Total - representing net assets applicable
to outstanding capital stock $ 24,640,508
=====================
Shares of capital stock outstanding; authorized
10 billion shares of $0.01 par value stock 1,832,376
--------------------
Net asset value per share of outstanding capital stock $ 13.45
====================
</TABLE>
See accompanying Notes to Financial Statements
<PAGE>
IAI Capital Appreciation Fund
Statement of Operations
Period from April 1, 1996 to June 30, 1996
(unaudited)
<TABLE>
<CAPTION>
<S> <C>
Net Investment Income
Income
Dividends $ 14,115
Interest 13,580
-------------------
Total Income 27,695
-------------------
Expenses
Management fees 62,262
Compensation of Directors 237
-------------------
Total expenses 62,499
Less fees waived or reimbursed by Advisers
or Distributor (6,908)
-------------------
Net expenses 55,591
-------------------
Net investment income (27,896)
-------------------
Net Realized and Unrealized Gains (Losses
Net realized gains on investment securities 633,045
Net change in unrealized appreciation or depreciation
on investment securities 1,962,011
-----------------
Net gain on investments 2,595,056
-----------------
Net increase in net assets resulting from operations $ 2,567,160
===================
</TABLE>
See accompanying Notes to Financial Statements
<PAGE>
IAI Capital Appreciation Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Period from Period from
April 1, 1996 February 1, 1996*
to June 30, 1996 to March 31, 1996
------------------ ------------------
(unaudited)
Operations
<S> <C> <C>
Net investment income $ (27,896) $ 1,281
Net realized gains 633,045 (21,948)
Net change in unrealized appreciation or depreciation 1,962,011 358,251
-------------------------------------------------
Net increase in net assets resulting from operations 2,567,160 337,584
-------------------------------------------------
Distributions to Shareholders From:
Net investment income (1,468) -
-------------------------------------------------
Total distributions (1,468) -
-------------------------------------------------
Capital Share Transactions
Net proceeds from sale of 1,788,049 and 868,372 shares 23,154,518 9,405,842
Net assets value of 106 and 0 shares issued to
shareholders in reinvestment of distributions 1,407 -
Cost of 793,454 and 30,697 shares redeemed (10,492,496) (332,039)
-------------------------------------------------
Increase in net assets from capital share transactions 12,663,429 9,073,803
-------------------------------------------------
Total increase in net assets 15,229,121 9,411,387
Net assets at beginning of period 9,411,387 -
------------------------------------------------
Net assets of end of period $ 24,640,508 $ 9,411,387
(including undistributed net investment income (loss) =======================================
</TABLE>
* Commencement of Operations
See accompanying Notes to Financial Statements
<PAGE>
IAI Capital Appreciation Fund
Financial Highlights
<TABLE>
<CAPTION>
Period from Period from
April 1, 1996 February 1, 1996****
to June 30, 1996 to March 31, 1996
---------------------- ---------------------
(unaudited)
<S> <C> <C>
Net Asset Value
Beginning of period $ 11.24 $ 10.00
---------------------- ------------------------
Operations
Net investment income (0.02) -
Net realized and unrealized gains (losses) 2.23 1.24
---------------------- ------------------------
Total from operations 2.21 1.24
---------------------- ------------------------
Distributions to Shareholders From:
Net investment income - -
Net realized gains - -
---------------------- -----------------------
Total distributions - -
---------------------- -----------------------
Net Asset Value
End of period $ 13.45 $ 11.24
---------------------- -----------------------
Total investment return* 19.68% 12.40%
Net assets at end of period $ 24,641 $ 9,411
Ratios
Expenses to average daily net assets** 1.25% 1.25%
Net investment income to average daily net assets** -0.63% 0.23%
Portfolio turnover rate
(excluding short-term securities) 36.6% 1.2%
</TABLE>
* Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of all distributions
at net asset value.
** Annualized
*** The Fund's adviser voluntarily waived $6,908 and $827 for the period
ended June 30, 1996 and March 31, 1996. If the Fund had been charged
for these expenses, the ratio of expenses to average daily net assets
would have been 1.40% and 1.40%, and the ratio of net investment income
to average daily net assets would have been (0.78%) and 0.08%,
respectively.
**** Commencement of operations
<PAGE>
IAI Capital Appreciation Fund
Notes to Financial Statements
June 30, 1996
(unaudited)
[ 1 ] SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The IAI Mutual Funds are registered under the Investment Company Act of
1940 (as amended) as diversified, open-end management investment companies, or
series thereof. IAI Capital Appreciation Fund (the Fund) is a separate portfolio
of IAI Investment Funds VI, Inc. The Fund commenced operations on February 1,
1996 and has an overall objective of long-term appreciation through investment
in equity securities. This report covers only the IAI Capital Appreciation Fund.
Significant accounting policies followed by the Fund are summarized below:
Security Valuation
-------------------
Investments in securities traded on national securities exchanges are
valued at the last reported sales price at the close of each business day;
securities traded on the over-the-counter market are valued at the last reported
sales price or if the last reported sales price is not available, the last
reported bid price is used. Short-term securities with maturities of 60 days or
less from the date of initial acquisition are valued at amortized cost.
Short-term securities with maturities greater than 60 days from the date of
initial acquisition are marked-to-market on a daily basis.
Federal Taxes
-------------
Since it is the Fund's policy to comply with the provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
taxable income to shareholders, no provision for income taxes is required. In
order to avoid the payment of any federal excise taxes, the Fund is required to
distribute substantially all of its net investment income and net realized gains
on a calendar year basis.
Net investment income and net realized gains may differ for financial
statement and tax purposes primarily because of the deferral of "wash sale"
losses for tax purposes. The character of distributions made during the year for
net investment income or net realized gains may also differ from its ultimate
characterization for tax purposes.
For federal income tax purposes Capital Appreciation Fund has a capital
loss carryover of approximately $22,000 at March 31, 1996 which, if not offset
by subsequent capital gains, will expire in 2005. It is unlikely the Board of
Directors will authorize a distribution of any net realized gains until the
available capital loss carryover is offset or expires.
Security Transactions and Investment Income
--------------------------------------------
The Fund records security transactions on trade date, the date the
securities are purchased or sold. Dividend income is recorded on the ex-dividend
date. Interest income is accrued daily. Security gains and losses are determined
on the basis of identified cost, which is the same basis used for federal income
tax purposes.
Distributions to Shareholders
----------------------------
Distributions to shareholders are recorded on the ex-date. Distributions
from net investment income are made semi-annually. Capital gains, if any, are
primarily distributed at the end of the calendar year. Additional capital gains
distributions as needed to comply with federal tax regulations are distributed
during the year.
Use of Estimates
-----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported results of operations during the reporting period.
Actual results could differ from those estimates.
[ 2 ] COMMITMENT AND CONTINGENCIES
For purposes of obtaining certain types of insurance coverage for the Fund
and its officers and directors, the Fund is a policyholder in an
industry-sponsored mutual insurance company (the Company). In connection with
their obligations as policyholders, the Fund has made payments to the Company
which have been capitalized. Also, the Fund is committed to make future capital
contributions, if requested by the Company.
Capital Appreciation Fund has available a line of credit of $360,000 with a
bank at the prime interest rate. To the extend funds are drawn against the line,
securities are held in an segregated account. No compensating balances or
commitment fees are required under the line of credit. During the period ended
June 30, 1996 the fund paid $39 in interest on the line of credit at a rate of
8.25%. There were no borrowings outstanding at June 30, 1996.
[ 3 ] FEES AND EXPENSES
Under the terms of a management agreement, the Fund pays Investment
Advisers, Inc. (Advisers) a monthly management fee computed at an average annual
rate of 1.40% of average daily net assets. This fee declines to 1.30% as the
Fund's assets increase. The fee covers all of the Fund's operating expenses
other than interest, taxes and other extraordinary expenses. Advisers has agreed
to voluntarily waive the management fee to 1.25% until March 31, 1997.
[ 4 ] PURCHASES AND SALES OF SECURITIES
For the period ended June 30, 1996, purchases of securities and sales
proceeds, other than investments in short-term securities aggregated $17,604,712
and $6,115,521, respectively.
