SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. _____)
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[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
IAI Investment Funds VI, Inc.
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<PAGE>
IAI GOVERNMENT FUND
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 23, 1998
NOTICE IS HEREBY GIVEN that a special meeting of shareholders of IAI
Investment Funds VI, Inc., on behalf of its portfolio known as IAI Government
Fund (the "Fund"), will be held at 10:00 a.m. Central Time, on Wednesday,
September 23, 1998, on the thirty-seventh floor of U.S. Bank Place, 601 Second
Avenue South, Minneapolis, Minnesota. The purposes of the meeting are as follow:
1. To consider and vote upon the liquidation and dissolution of
the Fund pursuant to the provisions of the Plan of Liquidation
and Dissolution of the Fund. A vote in favor of the Plan of
Liquidation and Dissolution will be considered a vote in favor
of an amendment to the Amended and Restated Articles of
Incorporation of IAI Investment Funds VI, Inc. required to
effect the proposed liquidation and dissolution.
2. To transact such other business as may properly come before
the meeting or any adjournments or postponements thereof.
Shareholders of record on August 12, 1998 are the only persons entitled
to notice of and to vote at the meeting and any adjournments thereof. Your
attention is directed to the attached Proxy Statement.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE FILL
IN,. SIGN, DATE AND MAIL THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO
SAVE THE FUND FURTHER SOLICITATION EXPENSE. A stamped return envelope is
enclosed for your convenience.
William C. Joas
Secretary
August 20, 1998
<PAGE>
IAI GOVERNMENT FUND
3700 U.S. BANK PLACE
601 SECOND AVENUE SOUTH
MINNEAPOLIS, MINNESOTA 55402
(612) 376-2700; (800) 945-3863
SPECIAL MEETING OF SHAREHOLDERS -- SEPTEMBER 23, 1998
The enclosed proxy is solicited by the Board of Directors of IAI
Investment Funds VI, Inc., on behalf of its portfolio known as IAI Government
Fund (the "Fund"), in connection with a special meeting of shareholders of the
Fund to be held September 23, 1998, and any adjournments thereof. The costs of
solicitation, including the cost of preparing and mailing the Notice of Meeting
of Shareholders and this Proxy Statement, will be paid by Investment Advisers,
Inc., the Fund's investment adviser and manager ("IAI"). Mailing of the Notice
of Meeting of Shareholders and this Proxy Statement will take place on
approximately August 21, 1998. Representatives of IAI may, without cost to the
Fund, solicit proxies on behalf of management of the Fund by means of mail,
telephone or telegraph. The address of IAI is that of the Fund as provided
above.
A proxy may be revoked before the meeting by giving written notice of
revocation to the Secretary of the Fund, or by delivery of a duly executed proxy
bearing a later date or by attending and voting at the meeting. Unless revoked,
proxies that have been returned without instructions will be voted in favor of
the liquidation and dissolution of the Fund in accordance with the
recommendation of the Fund's Board of Directors. In instances where a choice is
specified by the shareholder in the proxy, those proxies will be voted in
accordance with the shareholder's choice. Abstentions will be counted as present
for purposes of determining whether a quorum of shares is present at the
meeting, but will be counted as a vote "against" the proposal to liquidate and
dissolve the Fund. Under the Rules of the New York Stock Exchange, if a proposal
is considered "non-discretionary," then brokers who hold Fund shares in street
name for customers are not authorized to vote on such proposal on behalf of
their customers who have not furnished the broker specific voting instructions.
If a broker returns a "non-vote" proxy, indicating a lack of authority to vote
on a proposal, then the shares covered by such non-vote shall be deemed present
at the meeting for the purpose of determining a quorum but shall not be deemed
to be represented at the meeting for purposes of calculating the vote with
respect to such proposal. So far as the Board of Directors is aware, no matter
other than that described in this Proxy Statement will be acted upon at the
meeting. Should any other matters properly come before the meeting calling for a
vote of shareholders, it is the intention of the persons named as proxies in the
enclosed proxy to act upon such matters according to their best judgment.
Only shareholders of record on August 12, 1998 may vote at the meeting
or any adjournment thereof. As of that date, the Fund had 1,252,839 common
shares, par value of $.01, issued and outstanding. Each shareholder is entitled
to one vote for each share held. Under Minnesota law, no shareholder will be
entitled to exercise any dissenters rights or appraisal rights with respect to
the liquidation and dissolution of the Fund. A quorum of shares is required to
take action at the meeting. Ten percent of the shares entitled to vote at the
meeting, represented in person or by proxy, will constitute a quorum of shares
at the meeting.
No person, to the knowledge of Fund management, was the beneficial
owner of more than 5% of the voting shares of any Fund as of August 12, 1998,
except Holy Family Hospital Restricted Fund, 535 Hospital Road, New Richmond, WI
54017 (7.90%/98,956 shares); Charles Schwab & Co. Inc., Special Custody Account
for the Exclusive Benefit of Customers, 101 Montgomery Street, San Francisco, CA
94104 (7.44%/93,164 shares); and Wilson-Griak Inc., Profit Sharing Plan and
Trust, 227 Colfax Avenue North, Minneapolis, MN 55405 (5.28%/66,103 shares).
In the event that sufficient votes are not received in favor of the
proposal to liquidate and dissolve the Fund, the persons named as proxies may
propose one or more adjournments of the meeting.
<PAGE>
Any adjournment would require a vote in favor of the adjournment by the holders
of a majority of the shares present (in person or by proxy) at the meeting or
any adjournment thereof. The persons named as proxies will vote all shares that
have voted for the proposal in favor of adjournment; shares voted against the
proposal will be voted against adjournment.
COPIES OF THE FUND'S MOST RECENT ANNUAL AND SEMI-ANNUAL REPORTS ARE
AVAILABLE TO SHAREHOLDERS UPON REQUEST. IF YOU WOULD LIKE TO RECEIVE COPIES,
PLEASE CONTACT THE FUND AT 3700 U.S. BANK PLACE, MINNEAPOLIS, MINNESOTA 55402,
OR CALL 800-945-3863 OR 612-376-2700, AND THEY WILL BE SENT, WITHOUT CHARGE, BY
FIRST-CLASS MAIL WITHIN THREE BUSINESS DAYS OF YOUR REQUEST.
APPROVAL OF THE PLAN OF LIQUIDATION AND DISSOLUTION
INTRODUCTION
At a meeting held May 13, 1998, the Board of Directors considered and
approved IAI's recommendation that the Fund be liquidated and dissolved. The
Board also directed IAI to prepare a Plan of Liquidation and Dissolution of the
Fund ("Liquidation Plan") to be submitted for shareholder approval. A copy of
the Liquidation Plan is attached as Exhibit A to this Proxy Statement. A vote in
favor of the Liquidation Plan will be considered a vote in favor of an amendment
to the Amended and Restated Articles of Incorporation of IAI Investment Funds
VI, Inc. required to effect the proposed liquidation and dissolution. A copy of
the Articles of Amendment to the Amended and Restated Articles of Incorporation
is included in Exhibit A to this Proxy Statement. If Fund shareholders approve
the Liquidation Plan, IAI will sell the Fund's portfolio securities and other
assets, pay creditors or establish reserves for such payments and distribute the
net proceeds of such sales in cash, pro rata in accordance with Fund holdings.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
LIQUIDATION PLAN.
BACKGROUND
The Fund is represented by Series B common shares of IAI Investment
Funds VI, Inc., an open-end diversified management investment company is a
Minnesota corporation. The Fund commenced operations on August 8, 1991. The
Fund's investment objectives are to provide shareholders with a high level of
current income and with preservation of capital. The Fund sought to achieve its
objectives by investing primarily in securities issued, guaranteed or
collateralized by the United States Government, its agencies or
instrumentalities, and in repurchase agreements pertaining to such securities.
At the end of November 1997, the Fund had net assets of approximately $19
million. IAI recommended that the Fund be liquidated and dissolved. Some of the
reasons for liquidation are: (1) the Fund's net assets had decreased by more
than sixty percent during the past two years; (2) as a result of its smaller
size, the Fund cannot maintain the level of investment diversification which IAI
desires; (3) the Fund's smaller size results in increased transaction costs
which reduce the return to shareholders; (4) the Fund's investment objectives
and investments were similar to those of the Bond Fund also offered by IAI; and
(5) the Fund's focus of investing primarily in U.S. Government securities no
longer fit with IAI's marketing strategy. IAI believes that it would be in the
best interests of Fund shareholders to approve the liquidation and dissolution
of the Fund. Accordingly, IAI has recommended liquidating the Fund's assets and
distributing the proceeds to Fund shareholders.
At its May 13, 1998 meeting, the Fund's Board of Directors agreed with
IAI's recommendation. Accordingly, the Fund's Board of Directors, including all
of the Directors who are not "interested persons" of the Fund, as defined in the
Investment Company Act of 1940, unanimously adopted resolutions declaring that
the proposed liquidation and dissolution was in the best interests of the Fund
and its shareholders, approving the Liquidation Plan and Articles of Amendment
proposed by IAI, and directing IAI to formally prepare such Liquidation Plan and
amendment and submit them for shareholder approval.
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<PAGE>
DESCRIPTION OF THE LIQUIDATION PLAN AND RELATED TRANSACTIONS
If the Liquidation Plan is approved by the Fund's shareholders, as of
3:00 p.m. Central time on the day of approval, the Fund will cease to carry on
its business and will proceed to sell all of its portfolio securities and other
assets for cash at one or more public or private sales and at such prices and on
such terms and conditions as IAI determines to be reasonable and in the best
interests of the Fund and its shareholders. IAI anticipates that the aggregate
of such prices, net of the Fund's liabilities, will approximate the Fund's net
asset value on such date, subject to market changes during the period in which
portfolio securities are sold. That same day, the Fund will file Articles of
Amendment to its Amended and Restated Articles of Incorporation reflecting the
dissolution of the Fund with the Minnesota Secretary of State in accordance with
Minnesota Law. The Fund then will apply its assets to the payment, satisfaction
and discharge of all existing debts and obligations of the Fund, and distribute
in one or more payments the remaining assets among the shareholders of the Fund,
with each shareholder receiving his or her proportionate share of each
liquidation distribution in cash. Upon such filing, the Fund will be statutorily
dissolved and will cease to exist, and no shareholder will have any interest
whatsoever in the Fund. IAI will bear the expenses of liquidation of the Fund
consistent with the terms of its Management Agreement with Fund, which provides
that except for brokerage commissions and other expenditures in connection with
the purchase and sale of portfolio securities, interest expense, and, subject to
the specific approval of a majority of the disinterested directors of a Fund,
taxes and extraordinary expenses, IAI will pay all of the Fund's costs and
expenses.
If the Liquidation Plan is adopted, IAI currently estimates that the
liquidation distributions will be paid to shareholders during October 1998.
However, the exact date of the liquidation distributions will depend on the time
required to liquidate the Fund's assets. The Fund may, if deemed appropriate,
hold back sufficient assets to deal with any disputed claims or other contingent
liabilities which may then exist against the Fund. Any amount that is held back
relating to any such claim will be deducted pro rata from the net assets
distributable to shareholders and held until the claim is settled or otherwise
determined. IAI does not anticipate, however, that it will be necessary to hold
back any assets to deal with disputed claims or other contingent liabilities. In
the event that claims are not adequately provided for or are brought after
dissolution by previously unknown creditors or claimants, Fund directors and
officers could be held personally liable. In addition, claims possibly could be
pursued against shareholders to the extent of distributions received by them in
liquidation.
The Fund does not currently intend to create a trust to administer
liquidation distributions; however, in the event the Fund is unable to
distribute all of its assets pursuant to the Liquidation Plan because of its
inability to locate shareholders to whom liquidation distributions are payable,
the Fund may create a liquidating trust with a financial institution and deposit
any remaining assets of the Fund in such trust for the benefit of the
shareholders that cannot be located. The expenses of any such trust will be
charged against the liquidation distributions held therein.
As soon as practicable after the distribution of all of the Fund's
assets in complete liquidation, the officers of the Fund will close the books of
the Fund and prepare and file, in a timely manner, any and all required income
tax returns and other documents and instruments.
The Fund may elect not to declare the regular monthly distribution
pending the vote on the Plan in order to save the administrative costs that
would be associated with payment of such distribution. If the shareholder
meeting is adjourned, additional monthly distributions may also be suspended.
Any amount that would otherwise have been paid as a monthly distribution will be
declared as a distribution when the liquidation proceeds are paid to
shareholders and paid with the rest of the proceeds of liquidation.
Prior to completion of the liquidation, the Fund will send to its
shareholders of record a letter of transmittal form for the purpose of
exchanging each shareholder's Fund shares for liquidation
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<PAGE>
distributions. Shareholders whose shares are held in the name of their broker or
other financial institution will receive their distributions through their
nominee firms. No amount will be distributed by the Fund to a shareholder of
record unless and until such shareholder delivers to the Fund a signed letter of
transmittal form.
FEDERAL INCOME TAX CONSEQUENCES
PAYMENT BY THE FUND OF LIQUIDATION DISTRIBUTIONS TO SHAREHOLDERS WILL
BE A TAXABLE EVENT. BECAUSE THE INCOME TAX CONSEQUENCES FOR A PARTICULAR
SHAREHOLDER MAY VARY DEPENDING ON INDIVIDUAL CIRCUMSTANCES, EACH SHAREHOLDER IS
URGED TO CONSULT HIS OR HER OWN TAX ADVISER CONCERNING THE FEDERAL, STATE AND
LOCAL TAX CONSEQUENCES OF RECEIPT OF A LIQUIDATING DISTRIBUTION.
The Fund currently qualifies, and intends to continue to qualify
through the end of the liquidation period, for treatment as a regulated
investment company under the Internal Revenue Code of 1986, as amended, so that
it will be relieved of federal income tax on any investment company taxable
income or net capital gain (the excess of net long-term capital gain over net
short-term capital loss) from the sale of its assets.
The payment of liquidation distributions will be a taxable event to
shareholders. Each shareholder will be viewed as having sold his or her Fund
shares for an amount equal to the liquidation distribution(s) he or she
receives. Each shareholder will recognize gain or loss in an amount equal to the
difference between (a) the shareholder's adjusted basis in the Fund shares, and
(b) such liquidation distribution(s). The gain or loss will be capital gain or
loss to the shareholder if the Fund shares were capital assets in the
shareholder's hands and generally will be long-term if the Fund shares were held
for more than one year at the time of the liquidation distribution.
As of November 30, 1997, the Fund had $2,266,000 in net capital loss
carryforwards that could be used to offset current or future capital gains. The
Fund had $262,000 in unrealized capital gains as of the same date. If the
liquidation and dissolution of the Fund is approved and all or a portion of such
capital gains or any additional capital gains are realized, the Fund will be
able to use a portion of its net capital loss carryforwards to offset such
gains. Any remaining capital loss carryforwards that are not used to offset
capital gains realized upon liquidation will be lost, and the benefit of such
capital loss carryforwards will not pass through to shareholders. If the Fund
did not liquidate, it is possible that sufficient capital gains could be
generated in the future to use the entire amount of the Fund's capital loss
carryforwards.
The Fund generally will be required to withhold tax at the rate of 31%
with respect to any liquidation distribution paid to individuals and certain
other non-corporate shareholders who have not previously certified to the Fund
that their social security number or taxpayer identification number provided to
the Fund is correct and that the shareholder is not subject to backup
withholding.
The foregoing summary is generally limited to the material federal
income tax consequences to shareholders who are individual United States
citizens and who hold shares as capital assets. It does not address the federal
income tax consequences to shareholders who are corporations, trusts, estates,
tax-exempt organizations or non-resident aliens. This summary does not address
state or local tax consequences. Shareholders are urged to consult their own tax
advisers to determine the extent of the federal income tax liability they would
incur as a result of receiving a liquidation distribution, as well as any tax
consequences under any applicable state, local or foreign laws.
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<PAGE>
FINANCIAL HIGHLIGHTS
The following financial highlights for the Fund (other than for the six
months ended May 31, 1998) have been audited by KPMG Peat Marwick LLP,
independent auditors, whose report thereon appears in the Fund's annual report
to shareholders for the year ended November 30, 1997. Representatives of KPMG
Peat Marwick LLP are expected to be present at the meeting and available to
respond to appropriate questions, and they will have the opportunity to make a
statement if they desire to do so. Financial statements for the year ended
November 30, 1997 and the six months ended May 31, 1998 are contained in the
Fund's audited annual and unaudited semiannual reports to shareholders for such
periods.
<TABLE>
<CAPTION>
Six months ended Years ended November 30, Years ended March 31,
May 31, 1998 ----------------------------- -----------------------------
PER-SHARE DATA (unaudited) 1997 1996 1995 1994++ 1994 1993 1992#
- -------------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value:
Beginning of period $ 9.80 $ 9.95 $ 10.06 $ 9.62 $ 9.98 $ 10.46 $ 10.22 $ 10.00
Operations:
Net investment
income 0.27 0.58 0.58 0.60 0.33 0.47 0.57 0.30
Net realized and
unrealized gains
(losses) 0.05 (0.14) (0.10) 0.43 (0.34) (0.24) 0.59 0.24
------- ------- ------- ------- ------- ------- ------- -------
Total from operations 0.32 0.44 0.48 1.03 (0.01) 0.23 1.16 0.54
------- ------- ------- ------- ------- ------- ------- -------
Distributions to
shareholders from:
Net investment income (0.30) (0.59) (0.59) (0.59) (0.32) (0.49) (0.58) (0.30)
Net realized gains -- -- -- -- (0.03) (0.22) (0.34) (0.02)
------- ------- ------- ------- ------- ------- ------- -------
Total distributions (0.30) (0.59) (0.59) (0.59) (0.35) (0.71) (0.92) (0.32)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value:
End of period $ 9.82 $ 9.80 $ 9.95 $ 10.06 $ 9.62 $ 9.98 $ 10.46 $ 10.22
======= ======= ======= ======= ======= ======= ======= =======
Total investment
return** 3.32% 4.60% 4.99% 10.99% (0.09%) 2.02% 11.70% 5.51%
Net assets at end of
period (000's omitted) $15,222 $18,913 $29,751 $48,121 $38,438 $41,027 $43,704 $30,707
Ratios:
Expenses to average
net assets 1.10% 1.10% 1.10% 1.10% 1.10%* 1.10% 1.10% 1.10%*
Net investment income
to average net assets 5.40% 5.82% 5.78% 5.97% 5.12%* 4.40% 5.40% 5.16%*
Portfolio turnover rate
(excluding short-term
securities) 226.5% 349.5% 152.0% 284.1% 121.5% 641.0% 236.3% 169.6%
</TABLE>
# Period from August 8, 1991 (commencement of operations) to March 31,
1992
* Annualized
** 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.
++ Period from April 1, 1994 to November 30, 1994. Reflects fiscal year
end change from March 31 to November 30.
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<PAGE>
REQUIRED VOTE
The affirmative vote of a majority of the Fund's shares entitled to
vote at the meeting is required to approve the Liquidation Plan and Articles of
Amendment. THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL
OF THE LIQUIDATION PLAN AND ARTICLES OF AMENDMENT.
William C. Joas
Secretary
Dated: August 20, 1998
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<PAGE>
EXHIBIT A
PLAN OF LIQUIDATION AND DISSOLUTION
OF IAI GOVERNMENT FUND
(a) As of 3:00 p.m. of the date of approval of this Plan of Liquidation
and Dissolution by the shareholders of IAI Government Fund (the "Fund"),
represented by the Series B Common Stock of IAI Investment Funds VI, Inc., the
Fund will cease to carry on its business. As soon thereafter as possible, the
proper officers of the Fund shall perform such acts, execute and deliver such
documents, and do all things as may be reasonably necessary or advisable to
complete the liquidation and dissolution of the Fund, including, but not limited
to, the following: (i) sell all of the portfolio securities and any and all
other property and assets of the Fund for cash at one or more public or private
sales and at such prices and on such terms and conditions as such officers shall
determine to be reasonable and in the best interests of the Fund and its
shareholders; (ii) to the extent possible, prosecute, settle or compromise all
claims or actions of the Fund or to which the Fund is subject; (iii) file Form
966 with the Internal Revenue Service, together with certified copies of the
directors' and shareholders' resolutions approving this Plan; and (iv) execute
in the name and on behalf of the Fund those contracts of sale, deeds,
assignments, notices and other documents as in the judgment of such officers may
be necessary, desirable or convenient in connection with the carrying out of the
liquidation and dissolution of the Fund. (All references in this Plan of
Liquidation and Dissolution to the "proper officers of the Fund" shall include,
where appropriate, proper officers of the Fund's investment adviser, acting on
behalf of the Fund.)
(b) The proper officers of the Fund then shall apply the assets of the
Fund to the payment, satisfaction and discharge of all existing debts and
obligations of the Fund and distribute in one or more payments the remaining
assets among the shareholders of the Fund, with each shareholder receiving his
or her proportionate share of each payment. All expenses of the liquidation and
dissolution of the Fund, except for brokerage commissions and other expenditures
in connection with the purchase and sale of portfolio securities, interest
expense, and, subject to the specific approval of a majority of the
disinterested directors of a Fund, taxes and extraordinary expenses, if any,
will be borne by Investment Advisers, Inc.
(c) The proper officers of the Fund may, if such officers deem it
appropriate, establish a reserve to meet any contingent liabilities of the Fund,
including all claims or actions to which the Fund is subject, and any amount
that is placed in such reserve shall be deducted from the net assets
distributable to shareholders until the contingent liabilities have been settled
or otherwise determined and discharged.
(d) In the event the Fund is unable to distribute all of the net assets
distributable to shareholders because of the inability to locate shareholders to
whom liquidation distributions are payable, the proper officers of the Fund may
create in the name and on behalf of the Fund a liquidation trust with a
financial institution and, subject to applicable abandoned property laws,
deposit any remaining assets of the Fund in such trust for the benefit of the
shareholders that cannot be located. The expenses of any such trust shall be
charged against the assets held therein.
(e) On the date of approval of this Plan of Liquidation and Dissolution
by Fund shareholders, the proper officers of the Fund shall file Articles of
Amendment to the Amended and Restated Articles of Incorporation, in the form
attached hereto, reflecting the dissolution of the Fund with the Secretary of
State of the State of Minnesota in accordance with Minnesota law.
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<PAGE>
ATTACHMENT TO PLAN OF LIQUIDATION AND DISSOLUTION
ARTICLES OF AMENDMENT
TO
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
IAI INVESTMENT FUNDS VI, INC.
The undersigned officer of IAI Investment Funds VI, Inc. (the
"Corporation"), a corporation subject to the provisions of Chapter 302A of the
Minnesota Statutes, hereby certifies that the Corporation's Board of Directors
and shareholders, at meetings held May 13, 1998 and September 23, 1998,
respectively, adopted the resolutions hereinafter set forth; and such officer
further certifies that the amendments to the Corporation's Amended and Restated
Articles of Incorporation set forth in such resolutions were adopted pursuant to
said Chapter 302A.
WHEREAS, the Corporation is registered as an open-end management
investment company (i.e., a mutual fund) under the Investment Company Act of
1940 and offers its shares to the public in several series, each of which
represents a separate and distinct portfolio of assets; and
WHEREAS, it is desirable and in the best interests of the holders of
the Series B shares of the Corporation (also known as the "IAI Government Fund")
that the assets belonging to such series be liquidated; and
WHEREAS, the Corporation wishes to provide for the pro rata
distribution of the proceeds of such liquidation received by it to holders of
shares of the Corporation's IAI Government Fund and the simultaneous
cancellation and retirement of the outstanding shares of the Corporation's IAI
Government Fund; and
WHEREAS, the Corporation has approved a Plan of Liquidation and
Dissolution providing for the foregoing transactions; and
WHEREAS, the Plan of Liquidation and Dissolution requires that, in
order to bind all holders of shares of the Corporation's IAI Government Fund, to
the foregoing transactions, and in particular to bind such holders to the
cancellation and retirement of the outstanding shares of the Corporation's IAI
Government Fund, it is necessary to adopt an amendment to the Corporation's
Amended and Restated Articles of Incorporation.
NOW, THEREFORE, BE IT RESOLVED, that Section 5(a) of the Corporation's
Amended and Restated Articles of Incorporation be, and the same hereby is,
amended as set forth below.
5.(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 C 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," ten billion (10,000,000,000) of the Shares may be issued by the
Corporation in a series designated "Series F Common Shares," and ten billion
(10,000,000,000) of the Shares may be issued by the Corporation in a series
designated "Series G Common Shares. The remaining 9,950,000,000,000 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
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<PAGE>
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".
(1) As of 3:00 p.m. Central time on the date upon which these Articles
of Amendment are filed with the Minnesota Secretary of State, the assets
belonging to such shares, and the Special Liabilities, General Assets and
General Liabilities associated with such assets, shall be sold. For purposes of
the foregoing, "assets belonging to," "Special Liabilities," "General Assets"
and "General Liabilities" have the meanings set forth in Article 7(b), (c) and
(d) of the Corporation's Amended and Restated Articles of Incorporation.
(2) All issued and outstanding Series B Common Shares shall
simultaneously be canceled on the books of the Series and retired. From and
after this time, the Series B Common Shares canceled and retired pursuant to
paragraph 5(a)(1) above shall have the status of Undesignated Shares.
IN WITNESS WHEREOF, the undersigned officer of the Corporation has
executed these Articles of Amendment on behalf of the Corporation on __________,
1998.
IAI INVESTMENT FUNDS VI, INC.
By
------------------------------------
William C. Joas, Secretary
Dated: ____________, 1998
- 9 -
<PAGE>
IAI GOVERNMENT FUND
COMMON STOCK
THIS PROXY IS SOLICITED ON BEHALF OF MANAGEMENT
The undersigned appoints William C. Joas, Susan J. Haedt and Steven G.
Lentz, and each of them, with power to act without the other and with the right
of substitution in each, the proxies of the undersigned to vote all shares of
IAI Government Fund (the "Fund"), held by the undersigned at the annual meeting
of shareholders of the Fund to be held on September 23, 1998, and at any
adjournments thereof, with all the powers the undersigned would possess if
present in person. All previous proxies given with respect to the meeting are
revoked.
THE PROXIES ARE INSTRUCTED TO VOTE AS FOLLOWS:
1. To vote: FOR ________ AGAINST ________ ABSTAIN ________ approval of
the Plan of Liquidation and Dissolution and related Articles of Amendment.
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the special meeting or any adjournments or
postponements thereof.
THIS PROXY WILL BE VOTED AS INSTRUCTED ON THE ABOVE MATTER. IT IS
UNDERSTOOD THAT, IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED "FOR" THE
ITEM. UPON ALL OTHER MATTERS THE PROXIES SHALL VOTE AS THEY DEEM IN THE BEST
INTERESTS OF THE FUND. RECEIPT OF NOTICE OF MEETING AND PROXY STATEMENT IS
ACKNOWLEDGED BY YOUR EXECUTION OF THIS PROXY. SIGN, DATE, AND RETURN IN THE
ADDRESSED ENVELOPE-NO POSTAGE REQUIRED.
A LOW-COST WAY TO VOTE YOUR PROXY: SAVE TIME, SAVE MONEY
1. Read the Proxy Statement and have your Proxy Card at hand.
2. Call toll-free 1-800-690-6903.
3. Enter the 12-digit Control Number found on your Proxy Card.
4. Follow the simple instructions.
Dated:____________________________, 1998
________________________________________
________________________________________
IMPORTANT: Please date and sign this
Proxy. If the stock is held jointly,
signature should include both names.
Executors, administrators, trustees,
guardians, and others signing in a
representative capacity should give
their full title as such.
<PAGE>
[LOGO] IAI
MUTUAL FUNDS
August 21, 1998
DEAR IAI MUTUAL FUND SHAREHOLDER:
Please find enclosed the notice of the special shareholders meeting and a proxy
statement which includes a ballot soliciting your vote regarding the liquidation
and dissolution of your mutual fund. Your vote is very important to us. Whether
or not you plan to attend the special meeting, please mark, sign, date and
return the enclosed proxy ballot promptly, using the postage paid envelope. You
may also have your vote recorded by telephone by calling 1-800-690-6903 and
following the instructions on the ballot.
IAI appreciates your business and we hope that you consider another IAI Mutual
Fund for your assets. We will be sending a separate letter discussing other IAI
Mutual Funds in which you may elect to invest. If you have any services such as
systematic withdrawal plans or automatic investments, you may transfer those to
your new account. Those of you in the IAI Investment Club will be given the
opportunity to select an alternate fund if your account is affected.
The proposal on which you are being asked to vote is discussed in detail in the
enclosed materials, which you should read carefully. If you have any questions,
please do not hesitate to call toll free 1-800-733-8481, Ext. 424.
We at IAI thank you again for your business. It is our pleasure to continue to
serve you and assist you in meeting your investment goals.
SINCERELY,
IAI Mutual Funds
R
P.O. Box 357, Minneapolis, Minnesota 55440-0357 USA fax 612.376.2737
612.376.2700
<PAGE>
[LOGO] IAI
MUTUAL FUNDS
August 21, 1998
DEAR IAI MUTUAL FUND IRA SHAREHOLDER:
Please find enclosed the notice of the special shareholders meeting and a proxy
statement which includes a ballot soliciting your vote regarding the liquidation
and dissolution of your mutual fund. Your vote is very important to us. Whether
or not you plan to attend the special meeting, please mark, sign, date and
return the enclosed proxy ballot promptly, using the postage paid envelope. You
may also have your vote recorded by telephone by calling 1-800-690-6903 and
following the instructions on the ballot.
You currently have an Individual Retirement Account ("IRA") for which IAI acts
as custodian. The section in the proxy statement entitled "Federal Income Tax
Consequences" is not applicable to you if the proceeds of the fund liquidation
remain in an IRA account. If you retain your IRA account with IAI and exchange
to another IAI Mutual Fund or if you transfer your assets directly to another
IRA custodian, the adverse income tax consequences discussed in the proxy
statement can be avoided. If the account is liquidated and paid directly to you,
there may be adverse income tax consequences.
We hope that you consider exchanging your IRA assets to another IAI Mutual Fund.
We will be sending a separate letter discussing the other IAI Mutual Funds which
you may chose. However, if we do not receive a response from you, your assets
will automatically be exchanged to the IAI Money Market Fund. The assets will
remain in your IRA retirement account and there will be no tax consequences to
you.
IAI appreciates your business and we hope that you choose another IAI Mutual
Fund for your assets. If you have any services such as systematic withdrawal
plans or automatic investments, you may transfer those to your new account.
The proposal on which you are being asked to vote is discussed in detail in the
enclosed materials, which you should read carefully. If you have any questions,
please do not hesitate to call toll free 1-800-733-8481, Ext. 424.
We at IAI thank you again for your business. It is our pleasure to continue to
serve you and assist you in meeting your investment goals.
SINCERELY,
IAI Mutual Funds
I
P.O. Box 357, Minneapolis, Minnesota 55440-0357 USA fax 612.376.2737
612.376.2700
