As filed with the Securities and Exchange Commission on November 29, 1995
- -------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 *
(File No. 33-41395)
Pre-Effective Amendment No. __ *
Post-Effective Amendment No. 7 *
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 *
(File No. 811-6340)
Amendment No. 8 *
(Check appropriate box or boxes.)
GREAT HALL INVESTMENT FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
60 South Sixth Street, Minneapolis, Minnesota 55402
(Address of Principal Executive Offices) (Zip Code)
(612) 371-7765
(Registrant's Telephone Number, including Area Code)
J. Scott Spiker
60 South Sixth Street, Minneapolis, Minnesota 55402
(Name and Address of Agent for Service)
Copies to:
Matthew L. Thompson John R. Houston
Faegre & Benson PLLP Lindquist & Vennum PLLP
2200 Norwest Center 80 South Eighth Street
90 South Seventh Street Minneapolis, Minnesota 55402
Minneapolis, Minnesota 55402
It is proposed that this filing will become effective (check appropriate box):
* immediately upon filing pursuant to paragraph (b) of Rule 485
* on December 1, 1995 pursuant to paragraph (b) of Rule 485
* 60 days after filing pursuant to paragraph (a) of Rule 485
* on [date] pursuant to paragraph (a) of Rule 485
The Registrant has registered an indefinite number of shares of common stock
under the Securities Act of 1933 pursuant to Rule 24f-2 under the Investment
Company Act of 1940. The Registrant's most recent Rule 24f-2 Notice was filed
with the Commission on or about September 28, 1995.
- -------------------------------------------------------------------------------
<PAGE>
GREAT HALL INVESTMENT FUNDS, INC.
Post-Effective Amendment No. 7 to the
Registration Statement on Form N-1A
Explanatory Note
Great Hall Investment Funds, Inc. (the "Registrant") is organized as a
series fund and currently is authorized to issue its shares of common stock in
five series--Series A (Great Hall Prime Money Market Fund), Series B (Great
Hall U.S. Government Money Market Fund), Series C (Great Hall Tax-Free Money
Market Fund), Series D (Great Hall National Tax-Exempt Fund) and Series E
(Great Hall Minnesota Insured Tax-Exempt Fund). Part A of this Registration
Statement is comprised of two prospectuses - one prospectus covering Series A,
B and C, and the other prospectus covering Series D and E. Likewise, Part B of
this Registration Statement is comprised of two Statements of Additional
Information - one covering Series A, B and C, and the other covering Series D
and E.
<PAGE>
CROSS REFERENCE SHEET FOR ITEMS REQUIRED BY FORM N-1A
(Prime Fund Money Market Fund, U.S. Government Money Market Fund and
Tax-Free Money Market Fund)
Item No.
of Form N-1A Caption in Prospectus
------------ ---------------------
1 Cover Page
2 Fees and Expenses
3 Financial Highlights; Performance
4 Investment Objectives and Policies; Certain Investment
Strategies and Restrictions; Description of the Funds
5 Investment Management; Description of the Funds; Custodian
and Transfer Agent
` 6 Description of the Funds; Distributions; Taxes
7 How to Invest; Net Asset Value
8 How to Redeem Shares; Net Asset Value
9 Not Applicable
Caption in Statement of Additional Information
----------------------------------------------
10 Cover Page
11 Contents
12 Not Applicable
13 Investment Restrictions; Investment Policies
14 Directors and Officers
15 General Information
16 Management and Distribution Agreements
17 Portfolio Transactions
18 General Information
19 Determination of Net Asset Value
20 Taxes
21 Not Applicable
22 Calculation of Performance Data
23 Financial Statements
<PAGE>
CROSS REFERENCE SHEET FOR ITEMS REQUIRED BY FORM N-1A
(National Tax-Exempt Fund and Minnesota Insured Tax-Exempt Fund)
Item No.
of Form N-1A Caption in Prospectus
------------ ---------------------
1 Cover Page
2 Fees and Expenses
3 Financial Highlights; Performance
4 Investment Objectives and Policies; Description of the
Funds
5 Investment Management; Description of the Funds; Custodian
and Transfer Agent
6 Description of the Funds; Distributions; Taxes
7 How to Invest
8 How to Redeem Shares
9 Not Applicable
Caption in Statement of Additional Information
----------------------------------------------
10 Cover Page
11 Table of Contents
12 Not Applicable
13 Investment Restrictions; Investment Policies; Insurance
for Minnesota Fund; Certain Factors Affecting the
Minnesota Fund
14 Directors and Officers
15 General Information
16 Management and Distribution Agreements
17 Portfolio Transactions
18 General Information
19 Reduced Sales Charges; Reinvestment Privilege; Exchange
Privilege; Determination of Net Asset Value
20 Taxes
21 Not Applicable
22 Calculation of Performance Data
23 Financial Statements
<PAGE>
GREAT HALL INVESTMENT FUNDS, INC.
Post-Effective Amendment No. 7 to the
Registration Statement on Form N-1A
PART A
Prospectuses
<PAGE>
GREAT HALL
PRIME MONEY MARKET FUND
-----------------------------------
U.S. GOVERNMENT MONEY MARKET FUND [LOGO]
-----------------------------------
TAX-FREE MONEY MARKET FUND
- -----------------------------------------
60 South Sixth Street
Minneapolis, Minnesota 55402
(800) 934-6674
Great Hall Prime Money Market Fund ("Prime Fund"), Great Hall U.S.
Government Money Market Fund ("Government Fund") and Great Hall Tax-Free Money
Market Fund ("Tax-Free Fund") (collectively, the "Funds") are diversified
series of Great Hall Investment Funds, Inc. ("Great Hall"), an open-end
management investment company (commonly known as a mutual fund) which currently
offers its shares of common stock in five series.
Each Fund has its own policies designed to achieve as high a level of
current income obtainable from short-term securities as is consistent with
prudent investment management, the preservation of capital and the maintenance
of liquidity. Prime Fund invests in a variety of high quality money market
instruments. Government Fund invests only in U.S. Treasury bills, notes, bonds
and other obligations issued or guaranteed by the U.S. Government, its agencies
or instrumentalities and repurchase agreements secured by such obligations.
Tax-Free Fund invests in high quality, tax-exempt municipal obligations. Each
Fund seeks to maintain a net asset value of $1.00 per share. However,
investments in the Funds are neither insured nor guaranteed by the U.S.
Government, and there is no assurance that the Funds will be able to maintain a
stable net asset value of $1.00 per share.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
This Prospectus pertains only to the Funds and does not pertain to any
other series of Great Hall. This Prospectus sets forth concisely the
information about the Funds that a prospective investor should know before
investing. Please read this Prospectus carefully before investing and retain
it for future reference. A Statement of Additional Information containing more
information about the Funds, dated December 1, 1995 (which is incorporated
herein by reference), has been filed with the Securities and Exchange
Commission (the "SEC") and is available upon request and without charge by
calling Great Hall at the numbers listed above.
Prospectus dated December 1, 1995
<PAGE>
The "Great Hall" name is a trademark of Inter-Regional Financial Group,
Inc. ("IFG"). IFG licenses this trademark in connection with a number of
investment products and services (including the Great Hall Investment Funds,
Inc.) sponsored or distributed by IFG or its subsidiaries.
No person is authorized to give any information or to make any
representations not contained in this Prospectus or in the Funds' official
sales literature; and any information or representation not contained herein
must not be relied upon as having been authorized by the Funds. Great Hall is
registered as an open-end management investment company under the Investment
Company Act of 1940 (the "1940 Act"). Such registration does not imply that
the Funds or any of their shares have been guaranteed, sponsored, recommended
or approved by the United States or any state or any agency or officer thereof
This Prospectus does not constitute an offer to sell, or a solicitation
of an offer to buy, securities in any state to any person to whom it is not
lawful to make such an offer or solicitation in such state.
FEES AND EXPENSES
The Funds are sold without a sales charge or any deferred sales load, and
there are no redemption fees or exchange fees. The following table illustrates
all anticipated fees and estimated expenses that a shareholder of a Fund will
incur.
Government Tax-Free
Prime Fund Fund Fund
---------- ---- ----
Annual Fund Operating Expenses
(as a percentage of average net assets):
Management Fees 0.52% 0.50% 0.50%
12b-1 Fees none none none
Other Expenses 0.25% 0.23% 0.10%
---- ---- ----
Total Fund Operating Expenses 0.77% 0.73% 0.60%
---- ---- ----
Example
You would pay the following expenses on a $1,000 investment assuming
(1) a 5% annual return and (2) redemption at the end of each time period.
One Year $8 $7 $6
Three Years 25 23 19
Five Years 43 41 34
Ten Years 95 91 75
<PAGE>
The purpose of the above fees and expenses table is to assist the
investor in understanding the various costs and expenses that an investor in a
Fund will bear directly or indirectly. The above example should not be
considered representative of past or future expenses. Actual expenses may be
greater or less than those shown. Each Fund's investment adviser, Insight
Investment Management ("Insight"), a division of IFG Asset Management Services,
Inc. ("AMS"), and/or each Fund's co-distributors, Dain Bosworth Incorporated
and Rauscher Pierce Refsnes, Inc. (the "Co-Distributors"), from time to time
may voluntarily waive or absorb certain Fund fees and expenses. Any such
program may be instituted or discontinued at any time in the sole discretion of
Insight and/or the Co-Distributors. AMS and the Co-Distributors are wholly
owned subsidiaries of IFG.
FINANCIAL HIGHLIGHTS
The following tables show certain per share data for a share of capital
stock outstanding during the indicated periods and selected information for
such periods for each Fund. This information has been derived from the Fund's
financial statements (which have been audited by KPMG Peat Marwick LLP, the
Funds' independent auditors) included in the Statement of Additional
Information and should be read in conjunction therewith.
Prime Fund
- ----------
Period from
Year ended Year ended Year ended 11/1/91 to
7/31/95 7/31/94 7/31/93 7/31/92
------- ------- ------- -------
Net asset value, beginning of
period $1.00 $1.00 $1.00 $1.00
---- ---- ---- ----
Income from investment operations 0.05 0.03 0.03 0.03
Distributions to shareholders from
investment income (0.05) (0.03) (0.03) (0.03)
---- ---- ---- ----
Net asset value, end of period $1.00 $1.00 $1.00 $1.00
---- ---- ---- ----
Total return 4.9% 2.8% 2.7% 2.9%
Net assets at end of period
(000s omitted) $1,598,925 $1,029,775 $861,670 $834,743
Ratio of expenses to average
daily net assets ** 0.77% 0.80% 0.78% 0.71%*
Ratio of net investment income to
average daily net assets ** 4.93% 2.81% 2.68% 3.63%*
_______________________________________
* Adjusted to an annual basis.
** Various fund fees and expenses were voluntarily waived or absorbed by
Insight, the investment adviser to the Prime Fund, during the periods
referred to above. Had the Fund paid all expenses, the ratios of
expenses and net investment income to average net assets would have been
the same for the year ended July 31, 1995; 0.81% and 2.80%, respectively,
for the year ended July 31,1994; 0.82% and 2.64%, respectively, for the
year ended July 31, 1993; and 0.79% and 3.55%, respectively, for the
period ended July 31, 1992.
<PAGE>
Government Fund
- ---------------
Period from
Year ended Year ended Year ended 11/1/91 to
7/31/95 7/31/94 7/31/93 7/31/92
------- ------- ------- -------
Net asset value, beginning of
period $1.00 $1.00 $1.00 $1.00
---- ---- ---- ----
Income from investment operations 0.05 0.03 0.03 0.03
Distributions to shareholders from
investment income (0.05) (0.03) (0.03) (0.03)
---- ---- ---- ----
Net asset value, end of period $1.00 $1.00 $1.00 $1.00
---- ---- ---- ----
Total return 4.8% 2.7% 2.6% 2.6%
Net assets at end of period
(000s omitted) $122,249 $56,815 $66,558 $60,834
Ratio of expenses to average daily
net assets ** 0.73% 0.78% 0.79% 0.76%*
Ratio of net investment income to
average daily net assets ** 4.94% 2.73% 2.57% 3.47%*
_______________________________________
* Adjusted to an annual basis.
** Various fund fees and expenses were voluntarily waived or absorbed by
Insight, the investment adviser to the Government Fund, during the period
ended July 31, 1992. Had the Fund paid all expenses, the ratios of
expenses and net investment income to average daily net assets would have
been 0.79% and 3.44%, respectively, for the period.
Tax-Free Fund
- -------------
Period from
Year ended Year ended Year ended 11/1/91 to
7/31/95 7/31/94 7/31/93 7/31/92
------- ------- ------- -------
Net asset value, beginning of
period $1.00 $1.00 $1.00 $1.00
---- ---- ---- ----
Income from investment operations 0.03 0.02 0.02 0.02
Distributions to shareholders from
investment income (0.03) (0.02) (0.02) (0.02)
---- ---- ---- ----
Net asset value, end of period $1.00 $1.00 $1.00 $1.00
---- ---- ---- ----
Total return 3.1% 2.0% 2.1% 2.2%
Net assets at end of period
(000s omitted) $363,273 $275,278 $209,469 $187,205
Ratio of expenses to average daily
net assets ** 0.60% 0.65% 0.67% 0.62%*
Ratio of net investment income to
average daily net assets ** 3.14% 1.98% 2.09% 2.81%*
_______________________________________
* Adjusted to an annual basis.
** Various fund fees and expenses were voluntarily waived or absorbed by
Insight, the investment adviser to the Tax-Free Fund, during the period
ended July 31, 1992. Had the Fund paid all expenses, the ratios of
expenses and net investment income to average daily net assets would have
been 0.65% and 2.78%, respectively, for the period.
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives of each Fund, as set forth below, along with
the investment policies identified as fundamental policies, may not be changed
without the affirmative vote of the majority of the applicable Fund's
outstanding voting shares. All other policies of a Fund may be changed by the
Board of Directors of Great Hall without shareholder approval. There can be no
guarantee that the investment objective of any Fund will be achieved. For
additional information concerning certain investment policies of the Funds, see
"Certain Investment Strategies."
The Funds are designed for investors with cash reserves or temporary cash
balances seeking to maximize current income with a minimum of capital risk and
inconvenience while maintaining liquidity on a day-to-day basis without
penalty. Each of the Funds has adopted procedures that are designed to
maintain a net asset value of $1.00 per share for purposes of purchases and
redemptions. However, there can be no assurance that the Funds will be able to
maintain a $1.00 per share net asset value.
Pursuant to Rule 2a-7 under the 1940 Act, each of the Funds will invest
exclusively in high quality securities (those that present minimal credit risk
and are Eligible Securities) that mature within 397 days from the date of
purchase. Each Fund will maintain an average weighted maturity of not more
than 90 days. The Rule also requires that all investments by the Funds be
limited to United States dollar-denominated investments that: (a) present
minimal credit risks; and (b) are at the time of acquisition Eligible
Securities. Eligible Securities include, among others, securities that are
rated by two Nationally Recognized Statistical Rating Organizations ("NRSROs")
in one of the two highest categories for short-term debt obligations, such as
A-1 or A-2 by Standard & Poors Corporation ("S&P") or P-1 or P-2, or MIG-1 or
MIG-2, by Moody's Investors Service, Inc. ("Moody's"). It is the
responsibility of Insight, the investment adviser to the Funds, to determine
that the Funds' investments present only "minimal credit risks" and are
Eligible Securities. The Board of Directors of Great Hall has established
written guidelines and procedures for Insight and oversees Insight's
determination that the Funds' portfolio securities present only "minimal credit
risk" and are Eligible Securities.
Under Rule 2a-7, 95% of non-tax-exempt money funds (such as the Prime
Fund and the Government Fund) must be invested in Eligible Securities that are
deemed First Tier Securities, which include, among others, securities rated by
two NRSROs in the highest category (such as A-1 and P-1). Rule 2a-7 also
requires that, except for tax-exempt money funds (such as the Tax-Free Fund):
(a) a fund may not (with certain exceptions) invest more than 5% of its total
assets in securities of single issuer; (b) a fund may not invest more than 5%
of its total assets in Second Tier Securities; and (c) a fund's investment in
Second Tier Securities of a single issuer may not exceed the greater of 1% of
the fund's total assets or $1,000,000. Second Tier Securities are Eligible
Securities that are not First Tier Securities.
The securities in which the Funds invest may not earn as high a level of
current income as long-term or lower quality securities that generally have
less liquidity, greater market risk and more fluctuation in market value.
<PAGE>
Prime Fund
The Prime Fund seeks to provide, through investment in high quality money
market instruments, as high a level of current income obtainable from short-
term securities as is consistent with prudent investment management, the
preservation of capital and the maintenance of liquidity.
The Prime Fund may invest in obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities; corporate debt obligations rated
AA or better by S&P or Aa or better by Moody's; obligations of banks and
savings and loans that are members of the Federal Deposit Insurance Corporation
(the "FDIC"), which obligations may include, but are not limited to,
certificates of deposit, bankers acceptances (bills of exchange used to finance
foreign trade) and letters of credit (commercial paper backed by a commercial
bank or other financial institution); high grade commercial paper (unsecured
indebtedness of business or banking firms); and repurchase agreements secured
by the foregoing. The Prime Fund does not intend to concentrate its
investments in any one industry but reserves the freedom of action to
concentrate in government securities and securities issued or guaranteed by
domestic banks and United States branches of foreign banks that are subject to
the same regulation as United States banks.
The Prime Fund may invest in deposit obligations of banks and savings and
loans that are members of the FDIC. Such obligations are not necessarily
guaranteed by the FDIC. Deposit obligations of domestic banks and savings and
loans are insured by the FDIC up to a maximum of $100,000, which limitation
applies to all funds that the Prime Fund may have on deposit at any one bank or
savings and loan.
The Prime Fund may also invest in U.S. dollar-denominated commercial
paper and other short-term obligations issued by foreign entities and U.S.
dollar-denominated obligations of foreign depository institutions and their
foreign branches and subsidiaries, such as certificates of deposit, bankers'
acceptances, time deposits and deposit notes. Obligations of foreign branches
and subsidiaries of foreign deposit institutions may be the general obligation
of the parent institution or may be limited to the issuing branch or subsidiary
by the terms of the specific obligation or by government regulation. Prime
Fund will not invest more than 25% of its total assets (taken at market value
at the time of each investment) in the obligations specified in this
paragraph.
Obligations of states and their agencies, instrumentalities and political
subdivisions that bear interest generally includable in gross income for
federal income tax purposes (collectively, "taxable municipal securities") are
also permissible investments for the Prime Fund. Certain taxable municipal
securities are not "general obligations" (obligations secured by the full faith
and credit or taxing power of a governmental body) and, in those cases, are
repayable only from such revenues as may be pledged to repay such securities.
The Prime Fund will not invest more than 5% of its total assets (taken at
market value at the time of each investment) in taxable municipal securities.
Investments in foreign securities and taxable municipal securities are
subject to the same general credit review and credit quality standards as are
applicable to the securities in which the Prime Fund is permitted to invest.
<PAGE>
However, the financial information available on these obligations may be more
limited than what is available for securities that are registered with the SEC
or that otherwise are issued by entities that are required to file reports
under the Securities Exchange Act of 1934, as amended. Foreign securities are
subject to other risks that may include unfavorable political and economic
developments and possible withholding taxes or other governmental restrictions
that might affect the principal or interest on securities owned by the Prime
Fund.
Government Fund
The Government Fund seeks to provide, through investment in U.S. Treasury
bills, notes, bonds and other obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities and repurchase agreements secured
by such obligations, as high a level of current income obtainable from short-
term securities as is consistent with prudent investment management, the
preservation of capital and the maintenance of liquidity.
Tax-Free Fund
The Tax-Free Fund seeks to provide, through investment in a
professionally managed portfolio of high quality municipal obligations, as high
a level of current income exempt from federal income taxation obtainable from
short-term securities as is consistent with prudent investment management, the
preservation of capital and the maintenance of liquidity.
The Tax-Free Fund may invest in debt obligations issued by or on behalf
of any state, territory or possession of the United States or the District of
Columbia or their political subdivisions, agencies or instrumentalities and
participation interests therein, the interest on which, in the opinion of
counsel for the issuer, is exempt from federal taxation. Specific types of
obligations that the Tax-Free Fund may purchase include bond anticipation
notes, construction loan notes, revenue anticipation notes and tax anticipation
notes, along with municipal bonds and participation interests therein, that are
Eligible Securities (as defined on page 3). In addition, the Tax-Free Fund may
purchase other types of tax-exempt municipal obligations, such as short-term
discount notes and certain variable or floating rate demand securities,
including participation interests therein, that are Eligible Securities.
The Tax-Free Fund will attempt to invest 100%, and as a fundamental
policy under normal circumstances will invest at least 80%, of the value of its
net assets in securities that generate interest that is exempt from federal
income taxes, including the individual federal alternative minimum tax. For
defensive purposes, the Tax-Free Fund may temporarily invest more than 20% of
the value of its total assets in taxable money market securities and tax-exempt
securities the income on which is an item of tax preference for purposes of the
federal alternative minimum tax when, in the opinion of Insight, it is
advisable to do so in light of prevailing market and economic conditions for
the purpose of preserving liquidity or capital or when Insight believes that
suitable tax-exempt securities are not available. When the Tax-Free Fund is in
such a temporary defensive position, it is not necessarily pursuing its
<PAGE>
investment objective of providing income exempt from federal income taxation.
The Tax-Free Fund does not expect that such investments will be necessary.
CERTAIN INVESTMENT STRATEGIES AND RESTRICTIONS
Repurchase Agreements (applicable to all Funds). Each Fund may invest in
repurchase agreements. A repurchase agreement involves the purchase by a Fund
of securities with the condition that, after a stated period of time, the
original seller (which must be approved by the Board of Directors of Great Hall
and which must be among the 100 largest commercial banks or a primary reporting
dealer that reports to the Federal Reserve Bank of New York) will repurchase
the security at a mutually agreed upon time and price. Should any seller of a
repurchase agreement fail to repurchase the underlying security, a Fund could
be delayed or otherwise limited in disposing of the underlying security, could
incur disposition costs and could possibly suffer a loss if the proceeds of the
sale of such security to a third party are less than the repurchase price.
Insight, under guidelines and standards of review established by the Board of
Directors of Great Hall, must be satisfied with the creditworthiness of the
other party to the agreement before entering a repurchase agreement. All
repurchase agreements are fully collateralized and such collateral is marked to
market, on a daily basis, at the repurchase price or better. As a fundamental
policy, none of the Funds will cause more than 10% of the value of such Fund's
total assets to be invested collectively in repurchase agreements maturing in
more than seven days and other illiquid securities.
When-Issued Securities (applicable to Tax-Free Fund). The Tax-Free Fund
may purchase securities on a when-issued or delayed delivery basis. Delivery
and payment normally take place within one week of the purchase of notes and
within one month of the purchase of bonds. There is no limit on the amount of
assets that the Tax-Free Fund may invest in when-issued obligations. No
interest accrues to the Tax-Free Fund on when-issued securities prior to the
time such Fund takes delivery and makes payment. Purchase of when-issued
securities involves the risk that yields available in the market when delivery
occurs may be higher than those available when the when-issued order is placed.
The Custodian will maintain on a daily basis cash or liquid debt securities
with a value at least equal to the amount of the Tax-Free Fund's commitments to
purchase when-issued securities. During periods when interest rates fluctuate
substantially and the Tax-Free Fund remains substantially fully invested at the
same time it purchases securities on an when-issued basis, there will be a
greater possibility that the market value of the Tax-Free Fund's assets will
vary from $1.00 per share. However, under normal circumstances its net asset
value or income should not be affected by its purchase of securities on a when-
issued basis.
Municipal Obligations (applicable to Tax-Free Fund). The Tax-Free Fund
may invest in variable or floating rate demand notes from municipal and non-
governmental issuers, including participation interests therein. These
obligations normally have a stated maturity in excess of one year, but permit
the holder to demand payment of principal plus accrued interest upon a
specified number of days notice. The demand feature of variable rate
obligations is frequently supported by a letter of credit or comparable
guarantee provided by the selling institution (generally, banks that are
members of the Federal Reserve Board or insurance companies). Such obligations
will not be purchased unless accompanied by an opinion of seller's counsel,
<PAGE>
given at the time of purchase by the Tax-Free Fund, that the interest payable
in connection with such obligations is exempt from federal income tax. To the
extent the portfolio of the Tax-Free Fund is invested in variable or floating
rate securities, yields can be expected to decline in periods of falling
interest rates more rapidly than if the portfolio of the Fund were invested
solely in fixed rate securities. Conversely, yields, under these
circumstances, can be expected to increase more rapidly in periods of rising
interest rates. See Investment Policies in the Statement of Additional
Information.
Government Securities (applicable to all Funds). The Funds may invest in
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. For examples of such agencies or instrumentalities, see
Investment Policies in the Statement of Additional Information. Some such
obligations are supported by the full faith and credit of the U.S. Treasury;
others by Treasury guarantees; and others by the right of the issuer to borrow
from the Treasury. In addition, some obligations of U.S. Government agencies
or instrumentalities are supported by the discretionary authority of the U.S.
Government to purchase certain obligations of the agency or instrumentality and
others are supported solely by the credit of the issuing agency or
instrumentality. No assurance can be given that the U.S. Government will
provide financial support to such U.S. Government-sponsored agencies or
instrumentalities in the future, since it is not obligated to do so by law. U.
S. Government securities are not guaranteed as to price or market value, which
will fluctuate with changes in interest rates. The Funds do not intend to
invest in mortgage-backed securities.
Illiquid Investments (applicable to all Funds). Each Fund is permitted
to invest up to 10% of its assets in all forms of "illiquid" investments and
may invest without limitation in "restricted" securities which Insight
(pursuant to standards established by Great Hall's Board of Directors) has
determined are liquid.
An investment is generally deemed to be "illiquid" if it cannot be
disposed of within seven days in the ordinary course of business at
approximately the amount at which the investment company is valuing the
investment. "Restricted securities" are securities which were originally sold
in private placements and which have not been registered under the Securities
Act of 1933 (the "1933 Act"). Such securities generally have been considered
illiquid by the staff of the SEC, since such securities may be resold only
subject to statutory restrictions and delays or if registered under the 1933
Act. However, the SEC has acknowledged that a market exists for certain
restricted securities (for example, securities qualifying for resale to certain
"qualified institutional buyers" pursuant to Rule 144A under the 1933 Act).
Additionally, Insight and the Funds believe that a similar market exists for
commercial paper issued pursuant to the private placement exemption of Section
4(2) of the 1933 Act. The Funds may invest without limitation in these forms
of restricted securities if such securities are deemed by Insight to be liquid
in accordance with guidelines established by the Funds' Board of Directors.
Under these guidelines, Insight must consider (a) the frequency of trades and
quotes for the security; (b) the number of dealers willing to purchase or sell
the security and the number of other potential purchasers; (c) dealer
undertakings to make a market in the security; and (d) the nature of the
security and the nature of the marketplace trades (for example, the time needed
to dispose of the security, the method of soliciting offers and the mechanics
of transfer). At the present time, it is not possible to predict with accuracy
how the markets for certain restricted securities will develop. Investing in
<PAGE>
restricted securities could have the effect of increasing the level of a Fund's
illiquidity to the extent that qualified purchasers of the securities become,
for a time, uninterested in purchasing these securities.
Fundamental Policies and Restrictions (applicable to all Funds). The
following policies and restrictions of the Funds are fundamental and may not be
changed without the affirmative vote of a majority of the outstanding voting
securities of the applicable Fund.
Each Fund may borrow solely as a temporary measure for extraordinary
purposes, and then only in an amount not exceeding 5% of total assets. The
Funds may only pledge, mortgage or hypothecate their assets to secure permitted
borrowings.
Except as otherwise provided in the next sentence, each Fund may invest
no more than 5% of its total assets in the securities of any one issuer, except
for securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. Each Fund may invest more than 5% (but no more than 25%) of
the then current value of such Fund's total assets in the securities of a
single issuer for a period of up to three business days, provided that: (a) the
securities either are rated by two NRSROs in the highest short-term rating
category or are securities of issuers that have received such rating with
respect to other short-term debt securities or are comparable unrated
securities; and (b) such Fund does not make more than one such investment at
any one time.
Each Fund may invest no more than 25% of its total assets in any one
industry, except for securities issued or guaranteed by the U.S. Government,
its agencies or instrumentalities, and except that: (a) with respect to the
Tax-Free Fund, this restriction does not apply to general obligation municipal
securities, and (b) with respect to the Prime Fund and the Tax-Free Fund, this
restriction does not apply to securities issued or guaranteed by domestic banks
or United States branches of foreign banks that are subject to the same
regulation as United States banks.
For a complete list of investment restrictions, see "Investment
Restrictions" in the Statement of Additional Information.
INVESTMENT MANAGEMENT
Insight, 60 South Sixth Street, Minneapolis, Minnesota 55402, serves as
each Fund's investment adviser. Pursuant to the investment advisory agreement
in effect between the Funds and Insight (the "Advisory Agreement"), Insight
manages the investment and reinvestment of each Fund's assets in accordance
with such Fund's investment objective, policies and limitations, subject to the
general supervision and control of Great Hall's Board of Directors. In
addition, Insight is responsible for the overall management of each Fund's
business affairs, subject to the authority of the Board of Directors of Great
Hall. Under the Advisory Agreement, Insight furnishes office facilities and
clerical and administrative services to the Funds and, together with its
affiliates, the Co-Distributors, may also bear certain promotional expenses,
<PAGE>
including a portion of the costs of printing and distributing prospectuses
utilized for promotional purposes. Insight also performs and bears the
internal costs of research, statistical analysis and continuous supervision of
the investment portfolios of each Fund. Insight (formerly Insight Bond
Management, Inc.) has been registered with the SEC as an investment adviser
since 1983, and has been a portfolio manager of publicly offered investment
companies since 1986.
Under the Advisory Agreement, Insight is entitled to receive a monthly
advisory fee based upon a percentage of each Fund's average daily net assets.
During the year ended July 31, 1995, Prime Fund, Government Fund and Tax-Free
Fund accrued advisory fees equal to approximately 0.52%, 0.50% and 0.50%,
respectively, of their average daily net assets.
Each Fund pays all its expenses that are not expressly assumed by
Insight. These expenses include, among others, the advisory fee, the fees and
expenses of directors of Great Hall who are not "affiliated persons" of
Insight, interest expense, taxes, brokerage fees and commissions, fees and
expenses of registering and qualifying each Fund and its shares for
distribution under federal and state securities laws, expenses of preparing
prospectuses and of printing and distributing prospectuses annually to existing
shareholders, custodian and portfolio accounting charges, auditing and legal
expenses, insurance expense, association membership dues, and the expense of
shareholders' reports, meetings and proxy solicitations. Each Fund is also
liable for such nonrecurring expenses as may arise, including litigation to
which such Fund may be a party. Each Fund and/or Great Hall may have an
obligation to indemnify its directors and officers with respect to such
litigation.
Insight and the Co-Distributors are wholly-owned subsidiaries of IFG.
The Co-Distributors are member firms of the New York Stock Exchange, Inc. (the
"NYSE"), other major securities exchanges and the National Association of
Securities Dealers, Inc. The Co-Distributors participate in the securities and
commodities brokerage business as well as the underwriting and distribution of
new issues and act as dealers in unlisted securities and municipal and
corporate bonds.
HOW TO INVEST
You may purchase shares of each Fund at the net asset value next
determined following receipt of an order in federal funds. The Funds are sold
without a sales charge.
You may open an account and make your initial investment in a Fund by
contacting your investment executive. See "Shareholder Services." Great Hall
and the Co-Distributors reserve the right to reject in whole or in part any
order to purchase shares of the Funds. The Funds do not issue share
certificates.
<PAGE>
HOW TO REDEEM SHARES
You may redeem shares for cash through one of the Co-Distributors at the
net asset value next computed after receipt of a redemption request in proper
form. If shares have been purchased by check and are being redeemed, the
purchase check must be collected before payment for the redemption can be made.
Redemption will be treated as a sale for federal income tax purposes. See
"Taxes."
Under the 1940 Act, the right of redemption may be suspended or the date
of payment postponed for more than seven days at times when the NYSE is closed
other than customary weekend or holiday closings, or when trading on the NYSE
is restricted, or under certain emergency circumstances as determined by the
SEC.
NET ASSET VALUE
The net asset value of each Fund is determined as of the primary closing
time of the NYSE (currently 4:00 p.m. New York time), Monday through Friday,
except on: (a) days during which no Fund shares are tendered for redemption and
no order to purchase or sell Fund shares is received by the Fund; or (b) the
following national holidays: New Year's Day, Washington's Birthday, Good
Friday, Memorial Day (observed), Independence Day, Labor Day, Thanksgiving Day
and Christmas Day.
The Board of Directors of Great Hall expects that the net asset value per
share for each of the Funds will ordinarily be $1.00. The net asset value per
share of each Fund is calculated by subtracting each Fund's liabilities from
the value of its assets (based on the amortized cost method) and dividing the
result by the number of outstanding shares of such Fund. The amortized cost
method values each Fund's portfolio securities at such Fund's acquisition cost
as adjusted for amortization of premium or accretion of discount rather than at
their value based on current market factors.
DISTRIBUTIONS
All dividends and distributions of each Fund will be reinvested in
additional shares of such Fund (including fractional shares where necessary) at
net asset value.
Each Fund will declare dividends from net investment income daily, Monday
through Friday (except on customary national business holidays or when the
Funds' transfer agent is not open for business) at 3:00 p.m. Central time,
immediately prior to the determination of net asset value. The Funds will
distribute such dividends monthly on the last business day of each month. The
Funds do not expect to realize any net long-term capital gains. If such gains
are realized, however, they will be distributed at least annually and will be
taxable as "long-term" capital gains, regardless of the length of time the
shareholder has held the shares. Each daily dividend is payable on "shares of
record" at the time of its declaration. For this purpose, "shares of record"
means shares purchased for which payment has been received by the Co-
Distributors or the applicable Fund and excludes shares redeemed on the day of
the dividend declaration.
<PAGE>
TAXES
Each Fund qualified as a regulated investment company under Subchapter M
of the Internal Revenue Code of 1986, as amended (the "Code"), during its last
taxable year and intends to continue to do so. If so qualified, the Fund will
not be subject to federal income taxes to the extent net investment income and
net capital gain are timely distributed to shareholders.
Prime Fund and Government Fund
All dividends other than capital gain dividends that will be paid to
shareholders will be taxable as ordinary income. In the case of corporate
shareholders, no dividends paid by the Funds will qualify for the dividends
received deduction for corporations.
Under federal law, the income derived from obligations issued by the U.S.
Government and certain of its agencies and instrumentalities is exempt from
state individual income taxes. Most states that tax personal income permit
mutual funds to pass through this tax exemption to shareholders. The
Government Fund will report to its shareholders annually the percentage and
source of interest income earned on such Government obligations to permit
shareholders to claim the exemption from state income taxes where permitted.
Tax-Free Fund
The Tax-Free Fund will distribute substantially all of its investment
income and net capital gain to shareholders. Dividends derived from interest
earned on tax-exempt municipal obligations designated as exempt-interest
dividends by the Fund will not be subject to federal income taxation.
For federal income tax purposes, an alternative minimum tax ("AMT") is
imposed on taxpayers to the extent that such tax exceeds a taxpayer's regular
income tax liability (with certain adjustments). Exempt-interest dividends
attributable to interest income on certain tax-exempt obligations issued after
August 7, 1986 to finance certain private activities are treated as an item of
tax preference that is included in alternative minimum taxable income for
purposes of computing the federal AMT for all taxpayers and the federal
environmental tax on corporations. The Tax-Free Fund may invest in such
obligations, provided that at least 80% of the value of such Fund's net assets
will, during normal market conditions, be invested in tax-exempt obligations
the interest on which is not an item of tax preference for purposes of the AMT.
In addition, all other tax-exempt interest received by a corporation, including
exempt-interest dividends, will be included in adjusted current earnings for
purposes of determining the federal corporate alternative minimum tax.
Capital gains dividends will be taxed as capital gains, even if
reinvested in additional shares. Dividends, if any, derived from sources other
than tax-exempt interest and net capital gains will be taxable to shareholders
as ordinary income for federal income tax purposes even if reinvested in
<PAGE>
additional shares. Shareholders not subject to federal income taxation will
not be required to pay federal income tax on any amounts distributed to them.
The Tax-Free Fund anticipates that substantially all of its dividends
will be exempt from federal income taxes and will notify each shareholder
annually of the tax status of all distributions. Distributions by the Fund may
be subject to state and local taxes. You should consult your tax adviser
regarding the tax status of such distributions in the relevant state and
locality. The Tax-Free Fund will report to its shareholders annually the
percentage and source, on a state-by-state basis, of interest income earned on
municipal obligations held during the preceding year.
SHAREHOLDER SERVICES
Shareholder inquiries may be directed to Insight or your investment
executive. Written inquiries to Insight should be directed to Insight
Investment Management at the address set forth on the cover of this Prospectus.
You may call Insight, toll free, at (800) 934-6674.
Each of the Funds intends to send to shareholders written notification of
their purchase or redemption transactions on a monthly basis in lieu of
immediate confirmation, within five business days after the end of each month.
If there is no purchase or redemption activity in a shareholder's account, a
quarterly statement will be sent.
PERFORMANCE
From time to time, each Fund may advertise its yield, which reflects the
rate of income the Fund earns on its investments as a percentage of its price
per share. All yield figures are based on historical earnings and are not
intended to indicate future performance.
The current yield of the Funds refers to the income generated over a
seven-day period (which period will be stated in the advertisement). The
income is then annualized. That is, the amount of income generated by the
investment that week is assumed to be generated each week over a 52-week period
and is shown as a percentage of the investment. The effective or compounded
yield of the Funds is calculated similarly, but, when annualized, the income
earned by an investment in a Fund is assumed to be reinvested. The effective
or compounded yield will be slightly higher than the current yield because of
the compounding effect of this assumed reinvestment.
The Tax-Free Fund may advertise its taxable equivalent yield, which will
be calculated by applying the stated income tax rate only to that portion of
the Tax-Free Fund's seven-day yield or effective yield that is exempt from
taxation. The stated income tax rate is subtracted from the number 1 (e.g., 1
minus 36% equals 64%), and the tax-exempt portion of the yield is divided by
the difference. The result is then added to that portion of the Funds yield,
if any, that is not tax-exempt.
<PAGE>
Performance advertising by each Fund may include total return data. The
total return of a Fund refers to its overall change in value, assuming all
dividends and gains distributions are reinvested. Total return is calculated
by finding the average annual compounded rates of return of a hypothetical
investment, over one-, five- and ten-year periods of time, that would compare
the initial amount to the ending redeemable value of such investment.
A Fund may also use aggregate total return figures for various periods,
representing the cumulative change in value of an investment in such Fund for
the specific period (again reflecting change in Fund share prices and assuming
reinvestment of dividends and distributions). Aggregate total returns may be
shown by means of schedules, charts or graphs, and may indicate subtotals of
the various components of total return (i.e., change in value of initial
investment, income dividends and capital gains distributions).
The Funds performance from time to time in reports or promotional
literature may be compared to generally accepted indices or analyses such as
those provided by Lipper Analytical Service, Inc., S&P, Dow Jones, CDA
Investment Technologies, Inc., Morningstar and Investment Company Data
Incorporated. Performance ratings reported periodically in national financial
publications also may be used.
DESCRIPTION OF THE FUNDS
Great Hall was incorporated under the laws of the State of Minnesota in
June 1991 and is registered with the SEC under the 1940 Act as an open-end
management investment company (commonly known as a "mutual fund"). This
registration does not involve supervision of management or investment policy by
an agency of the federal government. Great Hall is authorized to issue shares
representing interests in separate series, including the Funds and other series
that may be established in the future. Currently, Great Hall offers its
shares in five separate series. One hundred billion shares have been
designated for each of the Prime Fund, the Government Fund and the Tax-Free
Fund.
Great Hall is not required under Minnesota law to hold annual or
periodically scheduled regular meetings of shareholders, and does not intend to
hold such meetings. The Board of Directors may convene shareholder meetings
when it deems appropriate and is required under Minnesota law to schedule
regular or special meetings in certain circumstances. Additionally, under
Section 16(c) of the 1940 Act, the Board of Directors of Great Hall must
promptly call a meeting of shareholders for the purpose of voting upon the
question of removal of any director when requested in writing to do so by the
record holders of not less than 10% of the outstanding shares.
Under Minnesota law, the Board of Directors has overall responsibility
for managing Great Hall in good faith, in a manner reasonably believed to be in
the best interests of Great Hall, and with the care an ordinarily prudent
person in a like position would exercise in similar circumstances. The Articles
of Incorporation of Great Hall limit the liability of directors to the fullest
extent permitted by law.
<PAGE>
CUSTODIAN AND TRANSFER AGENT
Norwest Bank Minnesota, N.A., 733 Marquette Avenue, Minneapolis,
Minnesota 55479-0040, serves as the custodian of the Funds pursuant to a
Custodian Agreement and also serves as the transfer agent of the Funds pursuant
to a Dividend and Transfer Agency Agreement. Pursuant to a Shareholder Account
Services Agreement, the Co-Distributors and Regional Operations Group, Inc.,
also a wholly-owned subsidiary of IFG, perform certain shareholder accounting
services for the Funds.
TAX EXEMPT VS. TAXABLE INCOME
The table below shows the approximate yields that taxable securities must
earn to equal federally tax-exempt yields under selected federal income tax
brackets. The 39.6% federal rate is the highest rate currently in effect and
currently scheduled to be in effect for individuals in 1996.
Taxable Equivalent Yields
-------------------------------
Federal Tax Brackets
-------------------------------
Tax-Free Yields 28% 31% 36% 39.6%
--------------- ---- ---- ---- -----
2.0% 2.78 2.90 3.13 3.31
2.5% 3.47 3.62 3.91 4.14
3.0% 4.17 4.35 4.69 4.97
3.5% 4.86 5.07 5.47 5.79
4.0% 5.56 5.80 6.25 6.62
4.5% 6.25 6.52 7.03 7.45
5.0% 6.94 7.25 7.81 8.28
This table does not take into consideration any federal alternative
minimum tax. In addition, the table is based upon yields that are derived
solely from tax-exempt income. To the extent that Tax-Free Fund's actual yield
is derived from taxable income, the Fund's equivalent taxable yield will be
less than set forth in the table. The tax-free yields used in the table should
not be considered as representations of any particular rates of return and are
for purposes of illustration only.
<PAGE>
TABLE OF CONTENTS
Page
----
Fees and Expenses.............................................. 2
Financial Highlights........................................... 3
Investment Objectives and Policies............................. 5
Certain Investment Strategies and Restrictions................. 8
Investment Management.......................................... 10
How to Invest.................................................. 11
How to Redeem Shares........................................... 12
Net Asset Value................................................ 12
Distributions.................................................. 12
Taxes.......................................................... 13
Shareholder Services........................................... 14
Performance.................................................... 14
Description of the Funds....................................... 15
Custodian and Transfer Agent................................... 16
Tax-Exempt vs. Taxable Income.................................. 16
<PAGE>
GREAT HALL
NATIONAL TAX-EXEMPT FUND
-----------------------------------
MINNESOTA INSURED TAX-EXEMPT FUND [LOGO]
-----------------------------------
60 South Sixth Street
Minneapolis, Minnesota 55402
(800) 934-6674
Great Hall National Tax-Exempt Fund ("National Fund") and Great Hall
Minnesota Insured Tax-Exempt Fund ("Minnesota Fund" and, together with National
Fund, the "Funds") are non-diversified series of Great Hall Investment Funds,
Inc. ("Great Hall"), an open-end management investment company (commonly known
as a mutual fund) which currently offers its shares of common stock in five
series. This Prospectus pertains only to the Funds and does not pertain to any
other series of Great Hall.
National Fund seeks to maximize current income exempt from federal income
tax by investing primarily in medium and lower-grade municipal obligations, the
interest on which is exempt from regular federal income tax and is not an item
of tax preference for purposes of the federal alternative minimum tax.
National Fund will not purchase insurance on its portfolio securities.
National Fund may invest in lower rated or non-rated securities which involve
certain risks that are discussed under "Investment Objectives and Policies -
Risk Factors."
Minnesota Fund seeks to provide a high level of current income exempt
from both federal and State of Minnesota income taxes, and which is not an item
of tax preference for the purposes of the federal or State of Minnesota
alternative minimum tax. Minnesota Fund will invest exclusively in:
(a) obligations that at all times are fully insured as to the scheduled payment
of all installments of interest and principal; (b) uninsured obligations that
have a Aaa rating by Moody's Investors Service, Inc. ("Moody's") or a AAA
rating by Standard & Poor's Corporation ("S&P"), where the payment of interest
and principal is secured by an escrow account consisting of obligations of the
U.S. Government or its agencies or instrumentalities; and (c) to a limited
extent, certain uninsured short-term, tax-exempt obligations of issuers with
the highest rating from Moody's or S&P.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE
Prospectus dated December 1, 1995
<PAGE>
This Prospectus sets forth concisely the information about the Funds that
a prospective investor should know before investing. Please read this
Prospectus carefully before investing and retain it for future reference. A
Statement of Additional Information containing more information about the
Funds, dated December 1, 1995 (which is incorporated herein by reference), has
been filed with the Securities and Exchange Commission (the "SEC") and is
available upon request and without charge by calling Great Hall at the numbers
listed above.
The "Great Hall" name is a trademark of Inter-Regional Financial Group,
Inc. ("IFG"). IFG licenses this trademark in connection with a number of
investment products and services (including the Great Hall Investment Funds,
Inc.) sponsored or distributed by IFG or its subsidiaries.
No person is authorized to give any information or to make any
representations not contained in this Prospectus or in the Funds' official
sales literature; and any information or representation not contained herein
must not be relied upon as having been authorized by the Funds. Great Hall is
registered as an open-end management investment company under the Investment
Company Act of 1940 (the "1940 Act"). Such registration does not imply that
the Funds or any of their shares have been guaranteed, sponsored, recommended
or approved by the United States or any state or any agency or officer thereof.
This Prospectus does not constitute an offer to sell, or a solicitation
of an offer to buy, securities in any state to any person to whom it is not
lawful to make such an offer or solicitation in such state.
The Funds commenced operations on June 5, 1992 by acquiring the assets
and liabilities of National Tax Exempt Fund and Minnesota Insured Fund - series
of Carnegie Tax Exempt Income Trust. Historical financial information included
in this Prospectus and the related Statement of Additional Information that
pre-dates June 5, 1992 relates to the Funds' predecessors.
<PAGE>
FEES AND EXPENSES
The purpose of the following table is to assist you in understanding the
various costs and expenses that investors in the Funds will bear directly or
indirectly.
National Minnesota
Fund Fund
---- ----
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) 4.50% 4.50%
Maximum Contingent Deferred Sales Charge 1.00%* 1.00%*
Other Redemption Fees none none
Annual Fund Operating Expense
(as a percentage of average net assets):
Management Fees 0.50% 0.23%**
12b-1 Shareholder Servicing Fees 0.20%** 0.20%**
Other Expenses 0.13% 0.38%
---- ----
Total Fund Operating Expenses 0.83%** 0.81%**
---- ----
_______________________________________________
* A contingent deferred sales charge may be imposed upon the redemption
of certain share purchases of $1 million or more. See "How to Redeem
Shares-Contingent Deferred Sales Charge."
** Net of voluntary fee waivers.
Example
You would pay the following expenses on a $1,000 investment assuming
(1) 5% annual return and (2) redemption at the end of each time period:
National Minnesota
Fund Fund
---- ----
One Year.................................. $53 $53
Three Years............................... 70 70
Five Years................................ 89 88
Ten Years................................. 143 141
The above examples should not be considered a representation of past or
future expenses. Actual expenses may be greater or less than those shown.
Absent voluntary fee waivers and reimbursements, each of National and Minnesota
Fund would incur Management Fees of .50% per year of its average daily net
assets, would incur 12b-1 fees of .30% per year of its average daily net assets
and would incur estimated total fund operating expenses of approximately 0.93%
and 1.18%, respectively, of average daily net assets.
<PAGE>
Each Fund's investment adviser, Insight Investment Management
("Insight"), a division of IFG Asset Management Services, Inc. ("AMS"), and/or
each Fund's co-distributors, Dain Bosworth Incorporated and Rauscher Pierce
Refsnes, Inc. (the "Co-Distributors"), from time to time may voluntarily waive
or absorb certain additional Fund fees and expenses. Any such program may be
instituted or discontinued at any time in the sole discretion of Insight and/or
the Co-Distributors. AMS and each Co-Distributor is a wholly-owned subsidiary
of IFG.
FINANCIAL HIGHLIGHTS
The following tables show certain per share data for a share of capital
stock outstanding during the indicated periods and selected ratio information
for such periods for each Fund. This information has been derived from the
financial statements of the Funds (and their predecessors) (which have been
audited by KPMG Peat Marwick LLP, the Funds' independent auditors) included in
the Statements of Additional Information and should be read in connection
therewith:
NATIONAL FUND
- -------------
YEAR ENDED JULY 31,
------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987*
---- ---- ---- ---- ---- ---- ---- ---- ----
Net asset value,
beginning of
year....... $10.17 $10.50 $10.22 $9.65 $9.63 $9.68 $9.25 $9.31 $9.60
------ ------ ------ ----- ----- ----- ----- ----- -----
Income from
investment
operations:
Net investment
income....... 0.648 0.624 0.652 0.703 0.697 0.669 0.692 0.714 0.653
Realized and
unrealized gains
(losses) on
investments,
net...... 0.045 (0.313) 0.280 0.570 0.020 (0.050) 0.430 (0.060)(0.290)
----- ----- ----- ----- ----- ----- ----- ----- -----
Total from
investment
operations. 0.693 0.311 0.932 1.273 0.717 0.619 1.122 0.654 0.363
----- ----- ----- ----- ----- ----- ----- ----- -----
Distributions to
shareholders:
From investment
income....... (0.648)(0.624)(0.652)(0.703)(0.697)(0.669)(0.692)(0.714)(0.653)
From accumulated
net realized
gains...... (0.045)(0.017) --- --- --- --- --- --- ---
----- ----- ----- ----- ----- ----- ----- ----- -----
Net asset value,
end of year.. $10.17 $10.17 $10.50 $10.22 $9.65 $9.63 $9.68 $9.25 $9.31
Total return##. 7.16% 2.99% 9.45% 13.84% 7.76% 6.69% 12.55% 7.35% 3.66%
Net assets at
end of year
(000s omitted)66,357 72,172 58,048 43,166 46,812 36,439 34,519 23,190 16,833
Ratio of net expenses
to average daily
net assets# 0.79% 0.91% 1.01% 0.84% 0.96% 1.23% 1.02% 0.68% 0.26%@
Ratio of net investment
income to average daily
net assets# 6.45% 5.98% 6.32% 7.15% 7.26% 6.99% 7.36% 7.71% 6.76%@
Portfolio turnover rate
(excluding short-term
securities) 8.45% 27.88% 16.36% 14.50% 13.52% 33.49% 15.76% 20.40% 11.33%
________________________________________________
See footnotes on the following page
<PAGE>
MINNESOTA FUND
- --------------
YEAR ENDED JULY 31,
-------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986**
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Net asset value,
beginning of
year... $9.85 $10.52 $10.29 $9.74 $9.60 $9.67 $9.17 $9.16 $9.34 $9.60
----- ------ ------ ----- ----- ----- ----- ----- ----- -----
Income from investment operations:
Net investment
income. 0.494 0.502 0.560 0.604 0.623 0.640 0.624 0.624 0.641 0.139
Realized and unrealized gains
(losses) on investments,
net... 0.157 (0.465) 0.230 0.550 0.140 (0.070) 0.500 0.010 (0.180)(0.260)
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Total from investment operations
........ 0.651 0.037 0.790 1.154 0.763 0.570 1.124 0.634 0.461 (0.121)
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Distributions to shareholders:
From investment income
........(0.494) (0.502)(0.560)(0.604)(0.623)(0.640)(0.624)(0.624)(0.641)(0.139)
From accumulated net realized
gain..(0.097) (0.205) --- --- --- --- --- --- --- ---
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Net asset value, end of
year... $9.91 $9.85 $10.52 $10.29 $9.74 $9.60 $9.67 $9.17 $9.16 $9.34
----- ----- ------ ------ ----- ----- ----- ----- ----- -----
Total return##
........ 7.00% 0.21% 7.95% 12.41% 8.27% 6.15% 12.69% 7.20% 4.92% (0.92%)
Net assets at end of year
(000s omitted)
........28,635 37,108 29,899 23,009 21,486 13,968 11,488 10,252 9,508 2,260
Ratio of net expenses to
average daily net assets#
........ 0.81% 0.80% 0.76% 0.61% 0.46% 0.45% 0.62% 0.69% 0.37% 0.24%@
Ratio of net investment income
to average daily net assets#
........ 5.12% 4.86% 5.44% 6.11% 6.45% 6.68% 6.65% 6.90% 6.57% 4.77%@
Portfolio turnover rate (excluding
short-term securities)
........ 3.44% 42.40% 20.12% 5.60% 1.25% 5.43% 6.30% 11.55% 0.35% 0%
________________________________________________
* For the period September 22, 1986 (commencement of operation of National
Fund) through July 31, 1987.
** For the period March 5, 1986 (commencement of operation of Minnesota
Fund) through July 31, 1986.
# Various fund fees and expenses were voluntarily waived or absorbed during
the periods referred to above. Had each Fund paid all expenses, the
ratios of expenses and net investment income to average daily net assets
would have been as follows: National Fund - 0.90%/6.34% in 1995,
1.01%/5.88% in 1994, 1.24%/6.09% in 1993, 1.14%/6.85% in 1992,
1.26%/6.96% in 1991, 1.23%/6.99% in 1990, 1.20%/7.18% in 1989,
1.21%/7.18% in 1988 and 1.06%/5.96% in 1987; Minnesota Fund - 1.16%/4.77%
in 1995, 1.00%/4.66% in 1994, 1.15%/5.05% in 1993, 1.16%/5.56% in 1992,
1.22%/5.69% in 1991, 1.25%/5.88% in 1990, 1.42%/5.85% in 1989,
1.49%/6.10% in 1988, 1.17%/5.77% in 1987 and 1.04%/3.97% in 1986.
## Total return does not reflect payment of a sales charge.
@ Annualized.
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The investment objective of each Fund, as set forth below, along with the
investment policies identified as fundamental policies, may not be changed
without the affirmative vote of the majority of the outstanding voting shares
of the Fund. All other policies of a Fund may be changed by the Board of
Directors of Great Hall without shareholder approval. There can be no
guarantee that the investment objective of either Fund will be achieved.
National Fund
The investment objective of National Fund is to maximize current income
exempt from federal income tax through investments primarily in medium and
lower grade municipal obligations. National Fund does not purchase insurance
on its portfolio securities.
National Fund invests in municipal obligations issued by or on behalf of
any state, territory or possession of the United States or the District of
Columbia or their political subdivisions, agencies or instrumentalities and
participation interests therein, the interest on which, in the opinion of
counsel to the issuer, is exempt from federal income taxation and is not an
item of tax preference for purposes of the federal alternative minimum tax.
The yield generated by National Fund may not be as high as funds that invest in
high yield obligations that are taxable. The types of municipal obligations in
which National Fund may invest include general obligation bonds (which are
payable from property taxing power, either unlimited or limited as to rate or
amount), revenue bonds (which are secured by such sources as water and sewer
revenues or other essential service revenues, sales tax or other fees, or
hospital/healthcare revenues), participation interests in municipal bonds, bond
anticipation notes, construction loan notes, revenue anticipation notes, tax
anticipation notes and short-term discount notes. See "Municipal Obligations"
below for a more detailed description of these municipal obligations.
Medium grade municipal obligations are rated A or Baa, MIG-2 or Prime-2
by Moody's, or A or BBB, SP-2 or A-2 by S&P, or, if unrated, are considered by
Insight, in accordance with policies established by the Board of Directors of
Great Hall, to be of comparable quality. Baa and BBB rated securities are
regarded as having some speculative characteristics. Medium grade municipal
obligations are generally regarded as having adequate but not outstanding
capacity to pay interest and repay principal. Lower grade municipal
obligations in which National Fund may invest include those rated Ba or B, MIG
- -3 or Prime-3 by Moody's, or BB or B, SP-3 or A-3 by S&P, or, if unrated, are
considered by Insight, in accordance with policies established by the Board of
Directors of Great Hall, to be of comparable quality. Lower grade obligations
generally are regarded as high risk securities and are highly speculative. See
"Risk Factors" discussed below.
National Fund invests in securities with ratings below Ba or BB only when
Insight believes the rating does not accurately reflect the actual quality of
the issuer's credit. As a non-fundamental policy, National Fund will not
invest more than 5% of its total assets in municipal obligations rated below Ba
or BB, or more than 35% of its total assets in municipal obligations rated
below Baa or BBB, or, if unrated, having credit characteristics that are
<PAGE>
considered by Insight, in accordance with policies established by the Board of
Directors of Great Hall, to be of comparable quality. National Fund will not
purchase municipal obligations rated Caa or lower by Moody's or CCC or lower by
S&P, or unrated securities considered by Insight to be of comparable quality.
For a description of the applicable Moody's and S&P ratings, see the appendix
to this Prospectus. See also "Risk Factors" below.
Many municipal issuers of medium and lower grade municipal obligations
choose not to request a rating for their obligations from the rating agencies.
National Fund therefore may consist of a large proportion of unrated
securities, which may carry a greater risk but a higher yield than rated
securities. Although unrated securities are not necessarily lower in quality,
the market for them may not be as broad as for rated securities. National Fund
will purchase only those unrated securities that Insight believes are
comparable to rated securities that qualify for purchase by National Fund.
Minnesota Fund
Minnesota Fund seeks to provide a high level of current income exempt
from both federal and State of Minnesota income taxes consistent with prudent
investment. Minnesota Fund has the added objective of providing income that is
not an item of tax preference for purposes of the federal or State of Minnesota
alternative minimum tax.
Minnesota Fund invests in the same types of municipal obligations as
described above in the second paragraph under "National Fund." Minnesota Fund
invests in municipal obligations of investment grade, i.e., those rated (or,
if not rated, considered by Insight, in accordance with policies established by
the Board of Directors of Great Hall, to have equivalent credit
characteristics) Baa or better, MIG-2 or better, or Prime-2 or better by
Moody's, or BBB or better, SP-2 or better, or A-2 or better by S&P. Municipal
obligations rated Baa or BBB have certain speculative characteristics. In
management's opinion, the risk involved in investing in these Baa or BBB rated
obligations will be substantially reduced by insurance.
Insurance. As a non-fundamental policy, the municipal obligations in the
investment portfolio of Minnesota Fund will consist of: (a) obligations that
are fully insured as to the scheduled payment of all installments of interest
and principal ("Insured Obligations"); and (b) uninsured obligations that have
a Aaa rating by Moody's or a AAA rating by S&P, where the payment of interest
and principal is secured by an escrow account consisting of obligations of the
U.S. Government or its agencies or instrumentalities. Additionally, pending
the investment or reinvestment of its assets in longer-term municipal
obligations, Minnesota Fund may invest up to 35% of its net assets in uninsured
short-term tax-exempt municipal obligations, provided such instruments carry an
A-1+ or SP-1+ short-term rating or AAA long-term rating by S&P, or a P-1 or
MIG-1 short-term rating or Aaa long-term rating by Moody's.
The Insured Obligations in the portfolio of Minnesota Fund are insured as
to the payment of principal and interest either through: (a) insurance
purchased by the issuer at the time of original issuance, (b) secondary
insurance purchased by a holder after the initial issuance; or (c) portfolio
<PAGE>
insurance purchased by the Fund. The purpose of insurance is to minimize
credit risks to Minnesota Fund and its shareholders associated with defaults in
municipal obligations owned by the Fund. There can be no assurance that any
insurer will be able to meet its obligations. Further, such insurance does not
insure against market risk and therefore does not guarantee the market value of
the securities in Minnesota Fund's investment portfolio upon which the net
asset value of the Fund's shares is based. Such market value will continue to
fluctuate in response to fluctuations in interest rates or the bond market.
Similarly, such insurance does not cover or guarantee the value of the shares
of Minnesota Fund. Therefore, the amount received upon redemption of shares of
Minnesota Fund may be more or less than the original cost of such shares less
any applicable sales charge paid in connection with the acquisition of such
shares.
The premiums for an insurance policy obtained by an issuer of an
obligation at its original issuance, or a secondary market insurance policy
obtained by a subsequent holder, have been paid in advance by such issuer or
subsequent holder and no further payment for such insurance will be required of
Minnesota Fund. If a municipal obligation is insured at its original issuance
or at a subsequent time through secondary market insurance, no additional
coverage will be provided by portfolio insurance, if any, purchased by the
Fund. Both original issue insurance and secondary market insurance are non-
cancelable and will continue in force so long as the municipal obligations are
outstanding and the respective insurers remain in business. Since such
insurance remains in effect as long as the obligations insured thereby are
outstanding, the insurance may have an effect on the resale value of
obligations in the Fund's portfolio. Therefore, such insurance may be
considered to represent an element of market value in regard to municipal
obligations thus insured, but the effect, if any, of this insurance on such
market value cannot be meaningfully estimated.
Secondary market insurance for a municipal obligation may be purchased by
Minnesota Fund if, in the opinion of Insight, the market value of such
obligation after obtaining such insurance would exceed the value of such
obligation (without insurance) plus the cost of such insurance. When the Fund
purchases secondary market insurance, the single premium is added to the cost
basis of the security and is not considered an item of expense of the Fund.
Any difference between the excess of a security's market value as an "Aaa" or
"AAA" rated security over its market value without such rating, including the
related single premium insurance cost, would inure to the Fund in determining
the net capital gain or loss realized by the Fund upon the sale of the
security.
Minnesota Fund purchased a portfolio insurance policy from Municipal Bond
Investors Assurance Corporation ("MBIA Corp."). Portfolio insurance provides
"blanket" coverage for those municipal obligations that are required to be
insured pursuant to the Fund's investment policy, but which are not otherwise
covered by original issue or secondary market insurance. Premiums for
portfolio insurance will vary based on the composition of the Fund's portfolio
and are expected to be approximately 0.02% of the aggregate principal amount of
the Fund's portfolio. Premiums for portfolio insurance will be paid by
Minnesota Fund from its assets and therefore will reduce the investment return
of the Fund.
The investment policy requiring insurance on investments applies only to
municipal obligations in Minnesota Fund's investment portfolio and will not
affect the Fund's ability to hold its assets in cash or to invest in escrow
<PAGE>
secured and defeased bonds or in certain short-term tax-exempt obligations as
set forth above, or affect its ability to invest in uninsured taxable
obligations for temporary or liquidity purposes or on a defensive basis in
accordance with the investment policies and restrictions of the Fund.
Minnesota Bonds. As described herein, except during temporary defensive
periods, Minnesota Fund will invest more than 80% of the value of its total
assets in Minnesota municipal obligations. Minnesota Fund is therefore
susceptible to political, economic or regulatory factors affecting issuers of,
and the market for, Minnesota municipal obligations.
Further, because of the relatively small number of issuers of Minnesota
municipal obligations, Minnesota Fund is more likely to invest a higher
percentage of its assets in the securities of one or a small number of issuers
than an investment company that invests in a broad range of tax-exempt
securities. This lack of diversification involves an increased risk of loss to
Minnesota Fund. As a result, the value of Minnesota Fund's shares may
fluctuate more widely than the value of shares of a portfolio investing in
securities relating to a number of different states. It should be noted that
the creditworthiness of obligations issued by local Minnesota issuers may be
unrelated to the creditworthiness of obligations issued by the State of
Minnesota, and that there is no obligation on the part of the State to make
payment on such local obligations in the event of default. The ability of
state, county or local governments to meet their obligations will depend
primarily on the availability of tax and other revenues to those governments
and on their fiscal conditions generally. The amounts of tax and other
revenues available to governmental issuers may be affected from time to time by
economic, political and demographic conditions within Minnesota. In addition,
constitutional or statutory restrictions may limit a government's power to
raise revenue or increase taxes. The availability of federal, state and local
aid to issuers may also affect their ability to meet their obligations.
Additional Information regarding Minnesota is set forth in the Statement of
Additional Information.
Investment Policies Applicable to National Fund and Minnesota Fund
National Fund and Minnesota Fund will attempt to invest 100% (and as a
matter of fundamental policy during normal circumstances will invest at least
80%) of the value of their respective net assets in securities the interest on
which is exempt from regular federal income tax and federal alternative minimum
tax and, with respect to Minnesota Fund, is exempt from the personal income tax
of the State of Minnesota and the Minnesota alternative minimum tax. At least
95% of the exempt interest dividends paid by Minnesota Fund will be derived
from interest income on obligations of the State of Minnesota or its political
or government subdivisions, municipalities, governmental agencies or
instrumentalities.
During temporary defensive periods (e.g., times when, in the opinion of
Insight, temporary imbalances of supply and demand or other temporary
dislocations in the tax-exempt bond market adversely affect the price at which
municipal obligations are available), and in order to keep cash on hand fully
invested, a Fund may invest any percentage of its assets in temporary
investments. Temporary investments are short-term, high-quality securities
that may be either tax-exempt or taxable. The Funds would not expect to invest
in taxable temporary investments unless suitable tax-exempt temporary
<PAGE>
investments are not available at reasonable prices and yields. Tax-exempt
temporary securities include various obligations issued by state and local
governmental issuers, such as tax-exempt notes (bond anticipation notes, tax
anticipation notes and revenue anticipation notes or other such municipal
obligations maturing in three years or less from the date of issuance) and
municipal commercial paper. Taxable temporary securities include short-term
obligations issued or guaranteed by the U.S. Government or its agencies or
instrumentalities and repurchase agreements secured thereby. See "Investment
Policies" in the Statement of Additional Information for a more detailed
description of such investments. To the extent the Funds invest in taxable
investments, the Funds may not at such times be in a position to achieve the
investment objective of current income exempt from regular federal income tax
and (in many cases) state personal income tax.
Under normal market circumstances, management anticipates that longer-
term maturities will provide the highest current income and, accordingly,
expects that 80% or more of the assets of National Fund and Minnesota Fund will
be invested in long-term municipal obligations. Under normal market
conditions, it is anticipated that the average weighted maturity of each Fund's
portfolio will be in the range of 17 to 22 years, and possibly in excess of 22
years. However, management reserves the right to substantially shorten average
portfolio maturity if yields on shorter-term municipal obligations of
comparable quality approach or exceed yields on longer-term municipal
obligations or if management otherwise believes it is prudent to do so based on
its expectations regarding future yields.
Municipal Obligations
The Funds invest in municipal obligations, including, primarily,
municipal bonds and participation interests therein. The Funds also may invest
in bond anticipation notes, construction loan notes, revenue anticipation notes
and tax anticipation notes. In addition, each Fund may purchase other types of
tax-exempt municipal obligations, such as short-term discount notes. Municipal
bonds generally are classified as either "general obligation" or "revenue"
bonds. See "Investment Policies" in the Statement of Additional Information.
Bond Anticipation Notes. Bond anticipation notes are issued in
anticipation of a later issuance of bonds and are usually payable from the
proceeds of the anticipated sale of the bonds or of renewal notes.
Construction loan notes, issued to provide construction financing for specific
projects, are often redeemed after the projects are completed and accepted with
funds obtained from the Federal Housing Administration under "Fannie Mae"
(Federal National Mortgage Association) or "Ginnie Mae" (Government National
Mortgage Association). Revenue anticipation notes are issued by governmental
entities in anticipation of revenues to be received later in the then current
fiscal year. Tax anticipation notes are issued by state and local governments
in anticipation of collection of taxes to finance the current operations of
such governments. These notes are generally repayable only from tax
collections and often only from the proceeds of the specific tax levy whose
collection they anticipate.
Variable and Floating Rate Securities. The Funds may invest in certain
variable or floating rate demand securities, including participation interests
therein. These securities may be general obligation or revenue bonds. The
<PAGE>
value of such securities may change with changes in interest rates generally.
However, the variable or floating rate nature of such securities should reduce,
to the extent a Fund is invested in such securities, the degree of fluctuation
in the value of its portfolio investments. Accordingly, as interest rates
decrease or increase, the potential for capital appreciation and risk of
potential capital depreciation is less than would be the case with a portfolio
composed entirely of fixed-income securities. The portfolio of a Fund may
contain variable or floating rate demand securities on which stated minimum or
maximum rates set by state law limit the degree to which interest on such
securities may fluctuate; to the extent it does, increases or decreases in
value may be somewhat greater than would be the case without such limits.
Because the adjustment of interest rates on the variable or floating rate
demand securities is made in relation to movements of the applicable indexes
(e.g., the prime rate), such securities are not comparable to longer-term fixed
rate securities. Accordingly, interest rates on such securities may be higher
or lower than current market rates for fixed rate obligations of comparable
quality with similar maturities.
The demand feature of variable rate participation interests will be
supported by a letter of credit or comparable guarantee provided by the selling
institution (generally, banks that are members of the Federal Reserve Board or
insurance companies). Such participation interests will not be purchased
unless accompanied by an opinion of counsel, given at the time of purchase by a
Fund, that the interest payable in connection with the participation is exempt
from federal income tax.
State and Municipal Lease Obligations. Each Fund is permitted to invest
in state and municipal lease obligations ("municipal leases"). Traditionally,
municipal leases have been viewed by the SEC staff as illiquid investments.
However, subject to Board standards similar to the standards applicable to
restricted securities (as discussed in the Statement of Additional
Information), Insight may treat certain municipal leases as liquid investments
and not subject to the policy limiting investments in illiquid investments.
Municipal leases are issued by state and local governments or authorities
to finance the acquisition of equipment and facilities. Municipal leases may
take the form of a lease, an installment purchase or conditional sale contract
or a participation certificate in such a lease or contract. Municipal leases
frequently have the special risks described below which are not associated with
general obligation or revenue bonds issued by public bodies. In determining
municipal leases in which the Funds will invest, Insight will evaluate the
credit rating of the lessee and the terms of the lease. Additionally, Insight
may require that certain municipal leases be secured by a letter of credit or
put arrangement with an independent financial institution.
The constitution and statutes of many states contain requirements with
which the state and municipalities must comply whenever incurring debt. These
requirements may include approving voter referendums, debt limits, interest
rate limits and public sale requirements. Municipal leases have evolved as a
means for public bodies to acquire property and equipment without needing to
comply with all of the constitutional and statutory requirements for the
issuance of debt. The debt-issuance limitations may be inapplicable for one or
more of the following reasons: (a) the inclusion in many municipal leases of a
<PAGE>
"nonappropriation clause" that provide that the public body has no obligation
to make future payments under the lease or contract unless money is
appropriated for such purpose by the appropriate legislative body on a yearly
or other periodic basis; (b) the exclusion of a municipal lease from the
definition of indebtedness under relevant state law; or (c) the provision in
the municipal lease for termination at the option of the public body at the end
of each fiscal year for any reason or, in some cases, automatically if not
affirmatively renewed.
If a municipal lease is terminated by the public body for
nonappropriation or other reason not constituting a default under the lease,
the rights of the lessor or holder of a participation interest therein are
limited to repossession of the leased property without any recourse to the
general credit of the public body. The disposition of the leased property by
the lessor in the event of termination of the lease might, in many cases, prove
difficult or result in a loss.
Municipal leases represent a relatively new type of financing that has
not yet developed the depth of marketability associated with more conventional
municipal obligations. Therefore, as mentioned above, municipal leases held by
a Fund will be treated as illiquid unless they are determined to be liquid
pursuant to the aforementioned liquidity guidelines. Additionally, the lack of
an established trading market for municipal leases may make the determination
of fair market value more difficult.
Brokerage and Portfolio Turnover
Insight may consider a number of factors in determining which brokers to
use for the Funds' portfolio transactions. These factors, which are more fully
discussed in the Statement of Additional Information, include, but are not
limited to, research services, favorableness of net price, the reasonableness
of commissions, and quality of services and execution. A broker's sales of any
of the Funds' shares may also be considered a factor if Insight is satisfied
that a Fund would receive from that broker the most favorable price and
execution then available for a transaction. Transactions in municipal
obligations will generally be with the issuer or with dealers acting on a
principal basis. However, portfolio transactions for the Funds that are
executed on an agency basis may be effected through the Co-Distributors on a
securities exchange if the commissions, fees or other remuneration received by
a Co-Distributor are reasonable and fair compared to the commissions, fees or
other remuneration paid to other brokers in connection with comparable
transactions involving similar securities being purchased or sold on an
exchange during a comparable period of time. In effecting portfolio
transactions through a Co-Distributor, the Funds intend to comply with Section
17(e)(1) of the 1940 Act.
A change in securities held by a Fund is known as "portfolio turnover."
A 100% portfolio turnover rate would occur if all the securities in a Fund's
portfolio were replaced in a period of one year. As the portfolio turnover
increases, a Fund can be expected to incur greater brokerage commission
expenses and transaction costs, which will be borne by its shareholders. While
it is not the policy of either Fund to trade actively for short-term profits,
each Fund will dispose of securities without regard to the time they have been
held when such action appears advisable to Insight. Portfolio turnover rates
for the Funds are set forth in "Financial Highlights."
<PAGE>
When-Issued Securities
The Funds may purchase securities on a "when-issued" or delayed delivery
basis. Delivery and payment normally take place within one week of the
purchase of notes and within one month of the purchase of bonds.
There is no limit on the amount of assets that the Funds may invest in
"when-issued" obligations. No interest accrues to a Fund on "when-issued"
securities prior to the time such Fund takes delivery and makes payment.
Purchase of "when-issued" securities involves the risk that yields available
in the market when delivery occurs may be higher than those available when the
"when-issued" order is placed. The Custodian will maintain on a daily basis
segregated accounts for each Fund consisting of cash or liquid debt securities
with a value at least equal to the amount of the commitments to purchase
"when-issued" securities of such Fund.
Risk Factors
Although Insight seeks to manage the Funds with a view toward reducing
the price volatility of its portfolio, it can be expected that the net asset
value of each Fund will change with changes in the value of its portfolio
securities. The net asset value of the shares of the Funds can be expected to
change as general levels of interest rates fluctuate. When interest rates
decline, the value of a fixed-income portfolio can be expected to rise.
Conversely, when interest rates rise, the value of a fixed-income portfolio can
be expected to decline.
Interest rate fluctuations may affect payment expectations on fixed-
income securities. For example, certain municipal obligations may contain
redemption or call provisions. If an issuer exercises these provisions in a
declining interest rate market, a Fund would likely have to replace the
security with a lower yielding security, resulting in a decreased return for
investors. Conversely, a municipal obligation's value will decrease in a
rising interest rate market, resulting in a decrease in the value of the Funds'
assets. If a Fund experiences unexpected net redemptions, this may force it to
sell its portfolio securities without regard to their investment merits,
thereby decreasing the asset base upon which the Fund's expenses can be spread
and possibly reducing the Fund's rate of return.
Each of the Funds is a "non-diversified" investment company and, as such,
could invest all of its assets in the obligations of a single issuer or
relatively few issuers. However, each Fund intends to conduct its operations
so that it will qualify under the Internal Revenue Code as a "regulated
investment company." In order to qualify, among other requirements, each Fund
must limit its investments so that, at the close of each quarter of the taxable
year, with respect to at least 50% of its total assets: (a) not more than 5% of
its total assets will be invested in the securities of a single issuer; and
(b) each Fund will not invest in more than 10% of the outstanding voting
securities of a single issuer. In addition, the Code requires that not more
than 25% in value of each Fund's total assets may be invested in the securities
of a single issuer at the close of each quarter of the taxable year.
<PAGE>
National Fund. Fixed income securities offering the high current income
sought by National Fund ordinarily will be in the medium or lower rating
categories of recognized rating agencies or will be unrated. Securities rated
BB or B by S&P or Ba or B by Moody's (or equivalently rated by another
nationally recognized statistical rating organization) are below investment
grade (such securities are commonly referred to as "junk bonds") and will
generally involve more credit risk than securities in the higher rating
categories. In some cases such securities are subordinated to the prior
payment of senior indebtedness, thus potentially limiting the Fund's ability to
receive payments or to recover full principal when senior securities are in
default. Also, during an economic downturn or substantial period of rising
interest rates, highly leveraged issuers may experience financial stress which
would adversely affect their ability to service their principal and interest
payment obligations, to meet projected business goals, and to obtain additional
financing. Upon any default, National Fund may incur additional expenses to
the extent it is required to seek recovery of the payment of principal or
interest on the relevant portfolio holding. For information concerning the
rating categories of debt securities and commercial paper, see the appendix to
this Prospectus.
Some securities in National Fund's portfolio may be thinly traded, which
may have an adverse impact on market price and the ability of National Fund to
dispose of particular issues when necessary to meet its liquidity needs or in
response to a specific economic event such as a deterioration in the
creditworthiness of the issuer. In addition, a thinly traded market may
interfere with the ability of National Fund to accurately value high yield
securities and, consequently, value the Fund's assets. Furthermore, adverse
publicity and investor perceptions, whether or not based on fundamental
analysis, may decrease the value and liquidity of high yield securities,
especially in a thinly traded market.
Set forth below are the dollar-weighted average percentages of total
investments represented by rated and unrated municipal obligations held by
National Fund during the year ended July 31, 1995. Obligations not rated by a
nationally recognized statistical rating organization have been assigned
ratings by Insight in accordance with rating policies approved by Great Hall's
Board of Directors. See "Risk Factors--Unrated Investments" below.
Unrated Securities
Rated Securities of Comparable Quality
Rating Category (% of assets) (% of assets) Total
--------------------- ------------- ------------- -----
AAA/Aaa.............. 2% 5% 7%
AA/Aa................ 1% 1% 2%
A.................... 7% 1% 8%
BBB/Baa.............. 15% 44% 59%
BB/Ba................ -- 24% 24%
B.................... -- -- --
---- ---- ----
TOTAL 25% 75% 100%
Unrated Investments. National Fund is permitted to invest without
limitation in municipal obligations that are unrated but that are considered by
Insight, in accordance with policies established by Great Hall's Board of
<PAGE>
Directors, to have characteristics and qualities that are comparable to those
rated municipal obligations in which the Funds may invest. The standards and
policies approved by Great Hall's Board and employed by Insight in assessing
the characteristics and qualities of unrated investments are discussed in the
Statement of Additional Information. Unrated issues tend to be somewhat
smaller in size and, therefore, less well known than rated issues. Moreover,
issuers that would expect to be rated lower by a rating organizations may opt
not to be rated because the rating process and associated expense may not be
justified from a marketing perspective. As a result, fewer dealers generally
are willing to "bid" unrated issues than are willing to bid rated issues, and
the bid/ask spreads of unrated issues tend to be somewhat higher than for rated
issues. Therefore, unrated issues may tend to be somewhat less liquid, and
their market prices more volatile, than rated issues. Additionally, during
periods of poor economic conditions, more investors tend to favor high quality
rated issues. As a result, the price at which unrated issues may be sold may
be more negatively affected during those times than would rated issues.
Because unrated municipal obligations generally are not insurable, Minnesota
Fund currently does not invest in unrated municipal obligations.
INVESTMENT MANAGEMENT
Insight, 60 South Sixth Street, Minneapolis, Minnesota 55402, serves as
each Fund's investment adviser. Pursuant to the investment advisory agreement
between the Funds and Insight (the "Advisory Agreement"), Insight manages the
investment and reinvestment of such Fund's assets in accordance with such
Fund's investment objective, policies and limitations, subject to the general
supervision and control of Great Hall's Board of Directors. In addition,
Insight is responsible for the overall management of each Fund's business
affairs, subject to the authority of the Board of Directors of Great Hall.
Under the Advisory Agreement, Insight furnishes each Fund with office
facilities and clerical and administrative services and, together with its
affiliates, the Co-Distributors, Insight may also bear certain promotional
expenses, including a portion of the costs of printing and distributing
prospectuses utilized for promotional purposes. Insight also performs and
bears the internal costs of research, statistical analysis and continuous
supervision of the investment portfolios of each Fund. Insight (formerly
Insight Bond Management, Inc.) has been registered with the SEC as an
investment adviser since 1983, and has been a portfolio manager of publicly
offered investment companies since 1986, including the predecessor funds of
National Fund and Minnesota Fund.
Under the Advisory Agreement, Insight is entitled to receive a monthly
advisory fee of .50% per year of each Fund's average daily net assets.
Each Fund pays all its expenses that are not expressly assumed by
Insight. These expenses include, among others, the advisory fee, the fees and
expenses of directors of Great Hall who are not "affiliated persons" of
Insight, interest expense, taxes, brokerage fees and commissions, fees and
expenses of registering and qualifying each Fund and its shares for
distribution under federal and state securities laws, expenses of preparing
prospectuses and of printing and distributing prospectuses annually to existing
shareholders, distribution expenses pursuant to the Rule 12b-1 plan, custodian
<PAGE>
and portfolio accounting charges, auditing and legal expenses, insurance
expense, association membership dues, and the expense of shareholders' reports,
meetings and proxy solicitations. Each Fund is also liable for such
nonrecurring expenses as may arise, including litigation to which such Fund may
be a party. Each Fund and/or Great Hall may have an obligation to indemnify
its directors and officers with respect to such litigation.
Insight and the Co-Distributors are wholly-owned subsidiaries of IFG.
The Co-Distributors are member firms of the New York Stock Exchange, Inc. (the
"NYSE"), other major securities exchanges and the National Association of
Securities Dealers, Inc. (the "NASD"). The Co-Distributors participate in the
securities and commodities brokerage business as well as the underwriting and
distribution of new issues and act as dealers in unlisted securities and
municipal and corporate bonds.
Raye C. Kanzenbach, Senior Portfolio Manager and Vice President of
Insight, currently oversees the investment portfolios of all accounts managed
by Insight, including the Funds. From 1983 to 1991, Mr. Kanzenbach served as a
Director and as Senior Vice President and Secretary of Insight's predecessor,
Insight Bond Management, Inc. Mr. Kanzenbach has approximately 21 years of
investment management experience. Portfolio management responsibilities are
shared by Dennis T. Hippen, Senior Portfolio Manager, Senior Vice President and
Director of Client Service of Insight. From 1983 to 1991, Mr. Hippen served as
a Director and as President of Insight Bond Management, Inc. Mr. Hippen has
approximately 28 years of investment management experience.
HOW TO INVEST
You may purchase shares of each Fund at the public offering price, which
is the net asset value next determined following receipt of an order plus the
applicable sales charge. The sales charge, which is a percentage of the public
offering price, varies with the amount of purchase as shown below.
Sales Charge
Sales Charge as Percentage of Dealers Discount
as Percentage of Net Amount as Percentage of
Amount of Purchase Offering Price Invested Offering Price
- ------------------ -------------- -------- --------------
Less than $100,000..... 4.50% 4.71% 4.00%
Less than $100,000..... 4.50% 4.71% 4.00%
$100,000 to $249,999... 3.75% 3.90% 3.25%
$250,000 to $499,999.. 3.00% 3.09% 2.50%
$500,000 to $999,999... 2.00% 2.04% 1.75%
$1,000,000 or more*.... none none *
________________________________
* A contingent deferred sales charge may be imposed with respect to
certain investments of $1,000,000 or more. See "How To Redeem Shares
Contingent Deferred Sales Charge."
<PAGE>
Pursuant to a Co-Distributor Agreement, shares of Minnesota Fund are
distributed through authorized dealers by Dain Bosworth Incorporated, and
shares of National Fund are distributed through authorized dealers by both of
the Co-Distributors.
You may open an account and make your initial investment in a Fund by
contacting one of the Co-Distributors. The minimum initial investment is
$1,000. Subsequent purchases must be in amounts of at least $250. The Funds
reserve the right to reject in whole or in part any order to purchase shares of
the Funds. The Funds do not issue share certificates.
Automatic Investment Plan
After you have opened your Fund account, you may arrange to make
automatic monthly or quarterly investments into your account by contacting your
investment executive and completing the accompanying Account Authorization
Form. Under this plan, funds will be drawn from your bank account at regular
intervals to purchase shares of a Fund at the applicable offering price on the
date of the transfer and a debit will appear on your bank statement. The
minimum amount for each such investment is $100.
Reduced Sales Charges
You may be eligible to purchase shares of National Fund and Minnesota
Fund at a reduced sales charge if you qualify for the combined purchase
privilege, the cumulative quantity discount or have executed a letter of
intent, or if you exercise the reinvestment or exchange privilege. In order
for reduced sales charges to apply to any of your investments in the Funds, you
must notify, and provide appropriate documentation to, your investment
executive regarding your eligibility.
Shares of National Fund and Minnesota Fund may be sold at net asset value
to: (a) officers, directors, partners and employees of Great Hall and Insight,
and their spouses, lineal ancestors, descendants and siblings (and the lineal
ancestors of such spouses and the spouses of such lineal ancestors, descendants
and siblings); (b) officers, directors, partners and employees of outside
counsel to the Funds, the Co-Distributors and NASD member firms that have
entered into selected dealer agreements with the Co-Distributors and the
spouses and minor children of such persons; and (c) advisory accounts through
their SEC-registered investment advisers.
Shareholders of unrelated open-end and closed-end funds with sales loads
may buy shares of National Fund and Minnesota Fund without paying a sales
charge to the extent that the purchase price of Fund shares is funded by the
proceeds from the redemption of shares of any such unrelated fund (within sixty
days of the purchase of Fund shares). The Co-Distributors may, out of their
own assets, compensate investment executives and other broker-dealers in
connection with these purchases of Fund shares.
It is the investor's obligation to notify (at the time of the investment)
his or her investment executive about the investor's eligibility for any
applicable reduced sales charge program. Absent such notification, no such
program will automatically be applied to any investment in Fund shares, and the
<PAGE>
applicability of any such program to an investor may be waived by the investor
if such waiver would be advantageous to such investor.
Plan of Distribution; Co-Distributor Agreement
Each of the Funds has adopted a plan of distribution pursuant to Rule
12b-1 under the 1940 Act. Under the plan of distribution and the Co-
Distributor Agreement, each Fund is authorized to pay the Co-Distributors fees
at the annual rate of not more than .30 of 1% of the average net assets of such
Fund, which fee may be used to compensate those who sell shares and to pay
other expenses of selling shares and providing various services to Fund
shareholders. The Co-Distributors have voluntarily agreed to waive their 12b-1
fees to the extent reflected under "Fees and Expenses" and to use such fees
only in connection with the provision of shareholder services (including, but
not limited to, responding to shareholder inquiries and providing information
on their investments) by the Co-Distributors and dealers who enter into selling
agreements with the Co-Distributors.
HOW TO REDEEM SHARES
You may redeem shares for cash at the net asset value next computed after
your redemption request is received by a Co-Distributor or, in the case of
redemptions made through another dealer, by Norwest Bank Minnesota, N.A., the
transfer agent for each Fund (the "Transfer Agent"). If shares have been
purchased by check and are being redeemed, the purchase check must be collected
by the Transfer Agent before payment for the redemption can be made. The net
asset value per share may fluctuate between the time you mail your redemption
request and the time your request is received.
Requests for redemption may be made by contacting your investment
executive or, if you have elected the Telephone Redemption Privilege on the
accompanying Account Authorization Form, by calling Great Hall. Great Hall (or
its agents) will employ reasonable procedures to confirm that phone
instructions in connection with telephone redemptions are genuine, including
requiring that payments be made only to the shareholder's address of record
shown on the Application and by requiring certain forms of identification. If
Great Hall (or its agents) fail to employ these procedures, Great Hall (or such
agent) may be liable for any losses suffered by shareholders as a result of
such failure. You may elect to receive payment of redemption proceeds by bank
wire to your designated account if the proceeds are $1,000 or more; otherwise,
proceeds will be sent by mail to your address of record. If shares are
redeemed under this procedure, you will not be required to provide a signature
guarantee.
Under the 1940 Act, the right of redemption may be suspended or the date
of payment postponed for more than seven days at times when the NYSE is closed
other than customary weekend or holiday closings, or when trading on the NYSE
is restricted, or under certain emergency circumstances, as determined by the
SEC.
<PAGE>
Shareholders who want to keep their accounts open should leave $500 in
the account. Otherwise, if the value of the shares in the account decreases to
below $500 as a result of redemption or transfer rather than a decline in the
market value of the shares, a Fund may close the account and mail the proceeds
from the redemption of the shares to the shareholder's address according to the
Transfer Agent's records. The required minimum investment may be changed from
time to time by the Board of Directors of Great Hall upon 60 days written
notice to shareholders.
Contingent Deferred Sales Charge
Sales of shares of $1,000,000 or more are not subject to the Funds'
front-end sales load ("FESL") (see "How to Invest" in the Funds' prospectus)
but are subject to a contingent deferred sales charge ("CDSC"). If such shares
are redeemed within a period of 24 months after their purchase date (the "CDSC
Period"), the redemption proceeds will be reduced by the CDSC (1% of the lesser
of (a) the net asset value of shares subject to the CDSC at the time of
purchase, or (b) the net asset value of such shares at the time of redemption).
The CDSC will not be applied to shares acquired through reinvestment of income
dividends or capital gain distributions or shares held for longer than the CDSC
Period. In determining whether the CDSC is payable with respect to any
redemption, it will be assumed that shares that are not subject to the CDSC are
redeemed first and that other shares or amounts are then redeemed on a last-
purchased, first-redeemed basis.
The CDSC is waived with respect to each class of purchaser and each class
of transaction that currently qualifies for waiver of the Fund's FESL
(exclusive of waivers based on the amount of the investment), as disclosed
under "How to Invest-Reduced Sales Charges" above. Shares of one Fund that are
acquired in exchange for shares of the other Fund that were subject to the CDSC
generally will be subject to the same CDSC and CDSC period that applied to the
shares that were exchanged therefor. The CDSC will not be imposed at the time
that Fund shares subject to the CDSC are exchanged for shares of any of the
three Great Hall Money Market Funds or at the time such Money Market Funds'
shares are re-exchanged for shares of either Fund; provided, however, that, in
each such case, the shares acquired will remain subject to the CDSC, and the
CDSC Period applicable to such shares will be extended by the period during
which such shares represent shares of any of the Great Hall Money Market Funds.
The CDSC also is waived on redemption of shares in the event of the death or
disability of the shareholder within the meaning of Section 72(m)(7) of the
Code.
Additionally, as set forth under "How to Invest-Reduced Sales Charges," a
purchaser of Fund shares may qualify for a waiver or reduction of the FESL if
such purchaser qualifies for the combined purchase privilege or cumulative
quantity discount or enters into a letter of intent. Unless otherwise exempt
from the CDSC, combined purchase privileges, cumulative quantity discounts and
letters of intent involving purchases of $1,000,000 or more of Fund shares
without the imposition of a FESL will be subject to the CDSC.
The Co-Distributors, upon notification, provide (out of their own assets)
a pro rata refund of any CDSC paid in connection with a redemption of shares of
the Funds, by crediting such refunded CDSC to such shareholder's account, if,
<PAGE>
within 90 days of such redemption, all or any portion of the redemption
proceeds are reinvested in shares of one or more of the Funds. Any
reinvestment within 90 days of a redemption to which the CDSC was paid will be
made without the imposition of a FESL but will be subject to the same CDSC to
which such amount was subject prior to the redemption; provided, however, that
the CDSC Period will run from the original investment date but will be extended
by the number of days between the redemption and the reinvestment dates
(inclusive).
NET ASSET VALUE
The net asset value of each Fund is determined as of the primary closing
time of the NYSE (currently 4:00 p.m. New York time), Monday through Friday,
except on: (a) days during which no Fund shares are tendered for redemption and
no order to purchase or sell Fund shares is received by the Fund; or (b) the
following national holidays: New Year's Day, Washington's Birthday, Good
Friday, Memorial Day (observed), Independence Day, Labor Day, Thanksgiving Day
and Christmas Day.
The net asset value per share of each Fund is calculated by subtracting
each Fund's liabilities from its assets and dividing the result by the number
of outstanding shares of such Fund. When calculating net asset value, all
portfolio securities of a Fund are valued at market value when there is a
reliable market quotation for the securities and otherwise in accordance with
procedures established by the Board of Directors of Great Hall. Reliable
market quotations normally are not considered to be readily available for tax-
exempt securities. These securities are stated at fair value on the basis of
valuations furnished by pricing services, approved by the Board of Directors of
Great Hall, which pricing services determine valuations using methods based on
market transactions for comparable securities and other factors that are
generally recognized by institutional traders.
Generally, trading in fixed-income municipal obligations is substantially
completed each day at various times prior to the close of the NYSE. The values
of such securities used in determining the net asset value of shares of the
Funds are computed as of such times. Events affecting the value of such
securities may occur between such times and the close of the NYSE, which
events will not be reflected in the computation of such Fund's net asset value.
When events that materially affect the value of securities occur during such a
period, the fixed-income securities will be valued at their fair value as
determined in good faith by Insight in accordance with procedures established
by the Board of Directors of Great Hall.
DISTRIBUTIONS
All dividends and any capital gain distributions of each Fund will be
reinvested in additional shares of such Fund (including fractional shares where
necessary) at net asset value, without a sales charge, unless you elect in
writing, not less than five full business days prior to the record date for a
particular dividend or distribution, to receive such dividend or distribution
in cash. If you elect to receive distributions in cash, your election will be
effective until you give other written instructions to the Fund. The timing
and amount of all dividends and distributions are subject to the discretion of
the Board of Directors of Great Hall.
<PAGE>
The Funds declare dividends from net investment income daily and pay such
dividends monthly. Net investment income for Saturdays, Sundays and other days
on which the NYSE is closed will be declared as dividends on the next business
day. Each daily dividend is payable on "shares of record" at the time of its
declaration. For this purpose, "shares of record" means shares for which
payment has been received by the applicable Fund, and excludes shares redeemed
on that day.
TAXES
Each Fund qualified as a regulated investment company under Subchapter M
of the Internal Revenue Code of 1986, as amended, during its last taxable year
and intends to continue to do so. If so qualified, the Fund will not be
subject to federal income taxes to the extent net investment income and net
capital gains are timely distributed to shareholders.
Federal Taxation of Shareholders
The Funds will distribute substantially all of their investment income
and capital gain net income to shareholders. Dividends derived from interest
earned on tax-exempt municipal obligations, including insurance proceeds
representing maturing interest on defaulted municipal obligations, constitute
"exempt-interest dividends" when designated as such by the Funds and will not
be subject to federal income taxation. Tax-exempt interest from certain
"private activity" bonds issued after August 7, 1986 is considered a tax
preference item for purposes of the alternative minimum tax. For corporations,
all tax-exempt interest will be included in adjusted current earnings for
purposes of calculating the alternative minimum tax.
Dividends, if any, derived from net capital gains will generally be
taxable to shareholders as long-term capital gains for federal income tax
purposes, regardless of the length of time the shareholder has held his or her
shares. Long-term capital gains are currently subject to a maximum tax rate of
28%. Dividends, if any, derived from sources other than tax-exempt interest
and net capital gains will be taxable to shareholders as ordinary income for
federal income tax purposes even if reinvested in additional shares.
Shareholders not subject to federal income taxation will not be required to pay
tax on any amounts distributed to them.
Upon exchange or disposition of shares in a Fund, a shareholder will
generally recognize capital gain or loss (which will be long-term capital gain
or loss if the shares were held more than one year).
The Funds anticipate that substantially all of their dividends will be
exempt from federal income taxes and will notify each shareholder annually of
the tax status of all distributions.
<PAGE>
Minnesota Taxation of Shareholders of Minnesota Fund
The portion of exempt-interest dividends excluded from federal adjusted
gross income that is derived from interest income on obligations of the State
of Minnesota, its political or governmental subdivisions, municipalities,
governmental agencies or instrumentalities (including insurance proceeds
representing maturing interest on such obligations), is excluded from the
Minnesota taxable net income of individuals, estates and trusts, provided that
the portion of the federal exempt-interest dividends from such Minnesota
sources paid to all shareholders represents 95 percent or more of the federal
exempt-interest dividends paid by Minnesota Fund. The remaining portion of
such dividends, and dividends that are not exempt-interest dividends or capital
gain dividends, are included in the Minnesota taxable net income of
individuals, estates and trusts, except for dividends that are directly
attributable to interest on obligations of the United States Government or
certain United States territories and possessions. Exempt-interest dividends
are not excluded from the Minnesota taxable income of corporations and
financial institutions. Dividends qualifying for federal income tax purposes
as capital gain dividends are to be treated by shareholders of Minnesota Fund
as long-term capital gains under Minnesota law. However, Minnesota has
repealed the favorable treatment of long-term capital gains, while retaining
restrictions on the deductibility of capital losses.
Exempt-interest dividends attributable to interest on certain private
activity bonds issued after August 7, 1986 will be included in Minnesota
"alternative minimum taxable income" of individuals, estates and trusts for
purposes of computing Minnesota's alternative minimum tax.
Minnesota Taxation of Shareholders of National Fund
The exempt-interest dividends paid by National Fund that are excluded
from federal adjusted gross income will be included in the Minnesota taxable
net income of individuals, estates and trusts, except for dividends that are
directly attributable to interest on obligations of the United States
Government and obligations of certain United States territories and
possessions.
Consult Tax Adviser for Additional Information
The foregoing is only a summary of some of the important federal and
Minnesota tax considerations generally affecting the Funds and their
shareholders. No attempt is made to present a detailed explanation of the
federal or state income tax treatment of the Funds or their shareholders, and
this discussion is not intended as a substitute for careful tax planning. You
are urged to consult your tax adviser with specific reference to your own tax
situation, and regarding the tax status of distributions from the Funds in
states other than Minnesota. National Fund will report to its shareholders
annually the percentage and source, on a state-by-state basis, of interest
income earned on municipal obligations held during the preceding year. For a
discussion of state income taxes with respect to the Funds, see "Taxes" in the
Statement of Additional Information.
<PAGE>
SHAREHOLDER SERVICES
Shareholder inquiries may be directed to Insight or your investment
executive. Written inquires to Insight should be directed to Insight
Investment Management at the address set forth on the cover of this Prospectus.
You may call Insight, toll free, at (800) 934-6674.
Systematic Withdrawal Plan
You may participate in the Systematic Withdrawal Plan by contacting your
investment executive and completing the applicable section of the accompanying
Account Authorization Form. You may elect regular monthly, quarterly, semi-
annual or annual payments. This Plan enables you to receive a portion of your
invested funds on a periodic basis to supplement income. Such payments are
made from share redemptions. If redemptions continue, your account may
eventually be exhausted. The minimum initial investment required to start a
withdrawal plan is $10,000.
Exchange Privilege
You may exchange shares of either Fund for shares of the other Fund
(without paying any sales charge) or for shares of any of Great Hall's Money
Funds at any time. Exchanges of shares of the Money Funds for shares of
National Fund or Minnesota Fund will include the payment of the applicable
sales charge; however, subsequent to an exchange from National Fund or
Minnesota Fund into a Money Fund, you may re-exchange the shares of the Money
Fund for shares of either Fund without payment of another sales charge. It is
your responsibility, at the time of any exchange, to notify your investment
executive regarding your eligibility for a sales charge waivers. Additional
exchange instructions may be obtained by contacting your investment executive
or by calling the toll free number listed on the cover of this Prospectus.
Before considering an exchange to another portfolio of Great Hall, you should
read the prospectus for such portfolio.
Exchanges may be made by contacting your investment executive or, if you
have elected the Telephone Exchange Privilege on the accompanying Account
Authorization Form, by calling Great Hall. Neither the Funds nor the Transfer
Agent will be responsible for the authenticity of exchange instructions
received by telephone. The exchange privilege is subject to termination and
its terms are subject to change upon 60 days' written notice to shareholders.
PERFORMANCE
From time to time, each Fund may advertise its yield, which reflects the
rate of income the applicable Fund earns on its investments as a percentage of
its price per share. All yield figures are based on historical earnings and
are not intended to indicate future performance. The yield for the Funds is
computed by dividing the interest and dividend income each such Fund earned on
its investments for a 30-day (or one month) period, less expenses, by the
average number of Fund shares outstanding during the period. The figure is
<PAGE>
expressed as an annualized percentage rate based on the Fund's offering price,
including the sales charge, at the end of the 30-day (or one month) period.
The Funds may advertise their "taxable equivalent yield," which will be
calculated by applying the stated income tax rate only to that portion of the
yield that is exempt from taxation. The tax-exempt portion of the yield is
divided by the number 1 minus the stated income tax rate (e.g., 1 - 28% =
72%). The result is then added to that portion of the yield, if any, that is
not tax-exempt.
Performance advertising by the Funds will include total return data. The
total return of each Fund refers to its overall change in value, assuming
reinvestment of all dividends and gains distributions and deduction of the
maximum sales charge. Total return is calculated by finding the average annual
compounded rates of return of a hypothetical investment that would compare the
initial amount to the ending redeemable value of such investment.
A Fund may also use "aggregate" total return figures for various periods,
representing the cumulative change in value of an investment in such Fund for
the specific period (again reflecting changes in Fund share prices and assuming
reinvestment of dividends and distributions). Aggregate total returns may be
shown by means of schedules, charts or graphs, and may indicate subtotals of
the various components of total return (i.e., change in value of initial
investment, income dividends and capital gains distributions).
The Funds' performance from time to time in reports or promotional
literature may be compared to generally accepted indices or analyses such as
those provided by Lipper Analytical Service, Inc., S&P, Dow Jones, CDA
Investment Technologies, Inc., Morningstar and Investment Company Data
Incorporated. Performance ratings reported periodically in national financial
publications also may be used.
The Funds' Annual Report contains certain performance information
regarding the Funds. The Annual Report will be made available to any recipient
of this Prospectus upon request and without charge.
DESCRIPTION OF THE FUNDS
Great Hall was incorporated under the laws of the State of Minnesota in
June 1991 and is registered with the SEC under the 1940 Act as an open-end
management investment company (commonly known as a "mutual fund"). This
registration does not involve supervision of management or investment policy by
an agency of the federal government. A separate series of capital stock is
issued for each of the investment portfolios. Ten billion shares have been
designated for each of National Fund and Minnesota Fund.
Great Hall is not required under Minnesota law to hold annual or
periodically scheduled regular meetings of shareholders, and does not intend to
hold such meetings. The Board of Directors may convene shareholder meetings
when it deems appropriate and is required under Minnesota law to schedule
regular or special meetings in certain circumstances. Additionally, under
Section 16(c) of the 1940 Act, the Board of Directors of Great Hall must
<PAGE>
promptly call a meeting of shareholders for the purpose of voting upon the
question of removal of any director when requested in writing to do so by the
record holders of not less than 10% of the outstanding shares.
Under Minnesota law, the Board of Directors has overall responsibility
for managing Great Hall in good faith, in a manner reasonably believed to be in
the best interests of Great Hall, and with the care an ordinarily prudent
person in a like position would exercise in similar circumstances. The Articles
of Incorporation of Great Hall limit the liability of directors to the fullest
extent permitted by law.
CUSTODIAN AND TRANSFER AGENT
Norwest Bank Minnesota, N.A., a national banking association, serves as
the Custodian of the Funds pursuant to a Custodian Agreement and also serves as
the Dividend and Transfer Agent of the Funds pursuant to a Dividend and
Transfer Agency Agreement.
<PAGE>
TAX-EXEMPT VS. TAXABLE INCOME
The table below shows the approximate yields that taxable securities must
earn to equal federally tax-exempt yields and yields that are exempt from both
federal and Minnesota income taxes under selected combined federal/Minnesota
income tax brackets, which reflect effective combined rates after deducting
Minnesota taxes from federal income. The portion of the table under the
heading "Federal Tax Brackets" illustrates taxable equivalent yields for the
National Fund, and the portion of the table under the heading "Combined Federal
and Minnesota Tax Brackets" illustrates taxable equivalent yields for the
Minnesota Fund. In the Minnesota Fund portion of the table, the 33.8% combined
federal/Minnesota bracket assumes that the investor is subject to a 28%
marginal federal income tax rate and an 8% marginal Minnesota income tax rate.
The 36.9% combined federal/Minnesota bracket assumes that the investor is
subject to a 31% marginal federal income tax bracket and an 8.5% marginal
Minnesota income tax rate. The 41.4% combined federal/Minnesota bracket
assumes that the investor is subject to a 36% marginal federal income tax rate
and an 8.5% marginal Minnesota income tax rate. The 44.7% combined
federal/Minnesota bracket assumes that the investor is subject to a 39.6%
marginal federal income tax rate and an 8.5% marginal Minnesota income tax
rate. The 39.6% federal rate and 8.5% Minnesota rate are the highest rates
currently in effect and currently scheduled to be in effect for individuals in
1996.
------------------Taxable Equivalent Yields------------------
Combined Federal and
Federal Tax Brackets Minnesota Tax Brackets
Tax-Free ----------------------------- -----------------------------
Yields 28% 31% 36% 39.6% 33.8% 36.9% 41.4% 44.7%
------ ----- ----- ----- ----- ----- ----- ----- -----
4.0% 5.56% 5.80% 6.25% 6.62% 6.04% 6.34% 6.83% 7.23%
4.5% 6.25% 6.52% 7.03% 7.45% 6.80% 7.13% 7.68% 8.14%
5.0% 6.94% 7.25% 7.81% 8.28% 7.55% 7.92% 8.53% 9.04%
5.5% 7.64% 7.97% 8.59% 9.11% 8.31% 8.72% 9.39% 9.95%
6.0% 8.33% 8.70% 9.38% 9.93% 9.06% 9.51% 10.24% 10.85%
6.5% 9.03% 9.42% 10.16% 10.76% 9.82% 10.30% 11.09% 11.75%
7.0% 9.72% 10.14% 10.94% 11.59% 10.57% 11.09% 11.95% 12.66%
7.5% 10.42% 10.87% 11.72% 12.42% 11.33% 11.89% 12.80% 13.56%
8.0% 11.11% 11.59% 12.50% 13.25% 12.08% 12.68% 13.65% 14.47%
This table does not take into consideration any federal or Minnesota
alternative minimum tax. In addition, the table is based upon yields that are
derived solely from tax-exempt income. To the extent a Fund's actual yield is
derived from taxable income, the Fund's equivalent taxable yield will be less
than set forth in the table. The tax-free yields used in the table should not
be considered as representations of any particular rates of return and are for
purposes of illustration only.
<PAGE>
APPENDIX
RATINGS OF INVESTMENTS
The following is a description of Standard & Poor's Corporation ("S&P")
and Moody's Investors Service, Inc. ("Moody's") commercial paper, loan, note
and bond ratings. To the extent that ratings accorded by S&P or Moody's may
change as a result of changes in such organizations, the Funds will attempt to
use comparable rating standards for their permissible investments.
Description of Moody's Commercial Paper, Loan and Note Ratings.
The rating Prime-1 is the highest commercial paper rating assigned by
Moody's. Issuers rated Prime-1 (or related supporting institutions) have a
superior capacity for repayment of short-term promissory obligations.
Repayment capacity will normally be evidenced by the following characteristics:
* Leading market positions in well established industries.
* High rates of return on funds employed.
* Conservative capitalization structures with moderate reliance on debt
and ample asset protection.
* Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.
* Well established access to a range of financial markets and assured
sources of alternate liquidity.
Issuers rated Prime-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternative liquidity is
maintained.
Issuers rated Prime-3 (or related supporting institutions) have an
acceptable capacity for repayment of short-term promissory obligations. The
effect of industry characteristics and market composition may be more
pronounced. Variability in earnings and profitability may result in changes in
the level of debt protection measurements and the requirement for relatively
high financial leverage. Adequate alternate liquidity is maintained.
Loans bearing the designation MIG-1 by Moody's are of the best quality,
enjoying strong protection from established cash flows, superior liquidity
support or demonstrated broad-based access to the market for refinancing.
Loans bearing the designation of MIG-2 are of high quality, with margins
of protection ample although not so large as the preceding group.
<PAGE>
Loans bearing the designation of MIG-3 are of favorable quality. All
security elements are accounted for but there is lacking the undeniable
strength of the preceding grades. Liquidity and cash flow protection may be
narrow and market access for refinancing is likely to be less well established
Description of S&P's Commercial Paper and Municipal Note Ratings
The rating A is the highest commercial paper rating assigned by S&P.
Issues in this category have the greatest capacity for timely payment and are
delineated with the numbers 1, 2 and 3 to indicate the relative degree of
safety.
The designation A-1 indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted with a plus (+) sign
designation.
The designation A-2 indicates that the capacity for timely payment is
strong. However, the relative degree of safety is not as high as for issues
designated "A-1."
The designation A-3 indicates a satisfactory capacity for timely payment.
However, issues with this designation are somewhat more vulnerable to the
adverse effects of changes in circumstances than issues carrying the higher
designations.
Municipal notes rated SP-1 have a very strong or strong capacity to pay
principal and interest. Those issuers determined to possess overwhelming
safety characteristics will be given a plus (+) designation.
Municipal notes rated SP-2 have a satisfactory capacity to pay principal
and interest.
Municipal notes rated SP-3 have a speculative capacity to pay principal
and interest.
Description of S&P's Bond Ratings
AAA-Bonds rated AAA have the highest rating assigned by S&P to a debt
obligation. Capacity to pay interest and repay principal is extremely strong
AA-Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from AAA issues only in a small degree.
A-Bonds rated A have a strong capacity to pay interest and repay
principal, although they are somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than bonds in higher rated
categories.
<PAGE>
BBB-Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Although they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity to pay interest and repay
principal for bonds in this category than for bonds in higher-rated categories
BB, B, CCC, CC, C-Bonds rated BB, B, CCC, CC and C are regarded, on
balance, as predominantly speculative with respect to capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB
indicates the lowest degree of speculation and C the highest degree of
speculation. While such bonds will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.
Plus (+) or (-): The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
Description of Moody's Bond Ratings
Aaa-Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa-Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group, they comprise what are generally known
as high-grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than with respect
to Aaa securities.
A-Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.
Baa-Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba-Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
<PAGE>
B-Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small
Caa-Bonds which are rated Caa are of poor standing. Such issues may be
in default or there may be present elements of danger with respect to principal
or interest.
Within each rating classification from Aa through B, Moody's has assigned
the numerical modifiers 1, 2 and 3. The modifier 1 indicates that a security
ranks in the high end of that rating category, 2 in the mid-range of a category
and 3 nearer the low end of a category.
<PAGE>
GREAT HALL INVESTMENT FUNDS, INC.
ACCOUNT AUTHORIZATION FORM
A. ACCOUNT IDENTIFICATION
Registered Account Name: ________________________________________
Account # _______________________________________________________
B. DIVIDEND/DISTRIBUTIONS
If you elected to receive dividends and distributions in cash, you
may select from the following options (NOTE: If no option is
selected, a check will be mailed to the registered address of my
account):
o Mail check to the following address: _________________________
_________________________
o Deposit directly into my bank account. Attached is a voided
check showing the bank account to which dividends and
distributions may be deposited.
C. AUTOMATIC INVESTMENT PLAN
o Please arrange with my bank to invest $_____________ ($100
minimum) per month in the above designated Fund. Please charge
my account on the 15th day (or next business day) of each month
commencing on __________ 15, 199__. Attached is a voided check
showing the bank account on which the automatic investment may
be drawn.
D. LETTER OF INTENT
o I elect to take advantage of the Letter of Intent and agree to
the escrow provisions herein and certify that I am entitled to
reduced rates in accordance with the provisions herein. My
initial investment will be at least 5% of the Letter amount. I
intend to purchase, although I am not obligated to do so,
shares of Great Hall National Tax-Exempt Fund and/or Great Hall
Minnesota Insured Tax-Exempt Fund within a 13-month period, in
an aggregate amount of at least:
o $100,000 o $250,000 o $500,000 o $1,000,000
o This is a retroactive 90-day Letter, requiring adjustment of
prior purchase(s).
<PAGE>
E. COMBINED PURCHASE PRIVILEGE
o I elect to take advantage of the Combined Purchase Privilege.
Below is a list of names and account numbers of qualifying
individuals, organizations or other persons (see "Reduced Sales
Charges-Combined Purchase Privilege" in the Statement of
Additional Information) with which I wish to combine my
purchase for reduced sales charge purposes.
__________________________ ___________________________
Name Account #
__________________________ ___________________________
Name Account #
F. TELEPHONE EXCHANGE PRIVILEGE
o I hereby authorize the Fund to honor the telephone request from
any of the registered shareholders of the account for the
exchange of shares in the Fund for shares of any other Great
Hall Fund. The Funds reserve the right to restrict the
frequency of transfers, and to otherwise modify, condition,
terminate or impose charges upon this telephone exchange
privilege at any time without prior notice.
G. TELEPHONE REDEMPTION PRIVILEGE
o I hereby authorize the Fund to honor any telephone instructions
from any of the registered shareholders of the account for
redemption, without signature guarantee, of any or all shares
held in my/our account. Proceeds will be mailed as registered
on the account or, on redemptions of $1,000 or more, I may
request that the proceeds be wired to the bank account
designated below. Attached is a voided check showing the bank
account to which proceeds of $1,000 or more may be wired if
requested.
NOTICE: Great Hall and the Co-Distributors will employ
reasonable procedures to confirm that phone instructions in
connection with telephone exchanges and redemptions are
genuine, including requiring that payments be made only to the
shareholder's address of record or to the bank account shown on
the voided check attached to this application and by requiring
certain forms of identification. If Great Hall and the Co-
Distributors fail to employ these procedures, they may be
liable for any losses suffered by shareholders as a result of
such failure.
<PAGE>
H. SYSTEMATIC WITHDRAWAL PLAN (Shares having a current value of
$10,000 or more must be held in the Account at initiation of the
Plan, and all shares must be in "book" (non-certificate) form.
Unless otherwise specified, all checks will be mailed to the
registered address of the account. If the 15th day of the
applicable month is not a business day, payment will be made on
the preceding business day.)
Please send a check for $_____________ ($100 minimum) per period
(indicate payment period below) commencing on _________ 15, 199__:
o Monthly o Quarterly o Semi-Annually o Annually
I. SIGNATURE AND CERTIFICATION
I hereby certify that I have received the Fund's current
prospectus, agree to be bound by its terms, and that I am
empowered and duly authorized to execute and carry out the terms
of this Account Authorization Form, and further certify that this
Account Authorization Form has been duly and validly executed on
behalf of the person or entity listed above and constitutes a
legal and binding obligation of such person or entity. All
registered owners of joint accounts must sign.
___________________________________________________________
Signature Title (if any) Date
___________________________________________________________
Signature (Joint owner) Title (if any) Date
<PAGE>
LETTER OF INTENT AND TERMS OF ESCROW
Each purchase will be made at the public offering price applicable at
the time of such purchase to a single transaction of the dollar amount
specified, as described in the Prospectus of the applicable Great Hall Fund.
The indication of an election to take advantage of the Letter of Intent does
not constitute a binding commitment to purchase and none of the Great Hall
Funds is making any binding commitment to sell, the full amount of shares
indicated.
To insure that future purchases will receive a quantity discount, you,
or your investment executive, must inform the appropriate Fund that this
Letter of Intent is in effect each time you make an investment in shares.
Where an Automatic Investment Plan is involved, your bank must make reference
to this Letter of Intent when each remittance is forwarded for investment.
Reduced rates on large transactions are limited to the following: an
individual, his or her spouse and their children under the age of 21
purchasing securities for their own account; a trustee or other fiduciary
purchasing securities for a single trust estate or single fiduciary account;
and any other organized group of investors, whether incorporated or not, which
has been in existence for more than six months, provided that it is not
organized for the purpose of buying redeemable securities of a registered
investment company, and provided that the purchase is made through a central
administration, or through a single dealer, or by other means which result in
economy of sales effort or expense. Such rates are not allowable to a group
of individuals whose funds are combined, directly or indirectly, for the
purchase of securities or to an agent, custodian or other representative of
such group.
Out of your initial purchase or purchases, 5% of the dollar amount
specified in the Letter of Intent shall be held in escrow by the applicable
Fund in the form of shares computed at the applicable public offering price.
For example, if the amount of this Letter of Intent is $100,000 and the
offering price (at the time of the initial transaction) is $10 a share, 500
shares ($5,000 worth) would be held in escrow. All shares purchased,
including those escrowed, will be registered in your name and recorded in the
same account, which will be credited fully with all income dividends and
capital gain distributions declared. If the total purchases equal or exceed
the amount specified by you as your expected aggregate purchases, the escrowed
shares will be credited to your account. If total purchases are less than the
amount specified, you will remit to the Fund an amount equal to the difference
between the dollar amount of sales charges actually paid and the amount of
sales charges you would have paid on your aggregate purchases if the total of
such purchases had been made at a single time. Neither dividends from
investment income nor capital gain distributions taken in shares will apply
toward the completion of this Letter of Intent. The Fund will prepare and
mail a statement to you and your investment executive, who shall be
responsible for notifying you of the difference due and for determining from
you whether you prefer to pay it in cash or have it liquidated from the
escrowed shares. If the Fund has not received a check within 21 days of
notification, it will be assumed that the preferred method is liquidation.
The Fund will redeem a number of escrowed shares sufficient to realize the
difference and release the remainder.
The Fund is hereby irrevocably appointed your attorney to surrender for
redemption any or all escrowed shares under the conditions outlined above.
<PAGE>
TABLE OF CONTENTS
Page
----
Fees and Expenses................................................ 3
Financial Highlights............................................. 4
Investment Objectives and Policies............................... 6
Investment Management............................................ 15
How to Invest.................................................... 16
How to Redeem Shares............................................. 18
Net Asset Value.................................................. 20
Distributions.................................................... 20
Taxes............................................................ 21
Shareholder Services............................................. 23
Performance...................................................... 23
Description of the Funds......................................... 24
Custodian and Transfer Agent..................................... 25
Tax-Exempt vs. Taxable Income.................................... 26
Appendix -- Ratings of Investments............................... A-1
<PAGE>
GREAT HALL INVESTMENT FUNDS, INC.
Post-Effective Amendment No. 7 to the
Registration Statement on Form N-1A
PART B
Statements of Additional Information
<PAGE>
GREAT HALL
PRIME MONEY MARKET FUND
- ---------------------------------------
U.S. GOVERNMENT MONEY MARKET FUND
- ---------------------------------------
TAX-FREE MONEY MARKET FUND
- ---------------------------------------
60 South Sixth Street
Minneapolis, Minnesota 55402
(800) 934-6674
_________________________________________________
STATEMENT OF ADDITIONAL INFORMATION
dated December 1, 1995
_________________________________________________
Great Hall Prime Money Market Fund ("Prime Fund"), Great Hall U.S.
Government Money Market Fund ("Government Fund") and Great Hall Tax-Free Money
Market Fund ("Tax-Free Fund") (collectively, the "Funds") are diversified
series of Great Hall Investment Funds, Inc. ("Great Hall"), an open-end
management investment company (commonly known as a mutual fund) which
currently offers its shares of common stock in five series. This Statement of
Additional Information relates only to the Funds and does not relate to any
other series of Great Hall.
This Statement of Additional Information is not a prospectus and should
be read in conjunction with the Prospectus of the Funds, dated December 1,
1995, which has been filed with the Securities and Exchange Commission (the
"SEC"). To obtain a copy of the Prospectus, please call Great Hall or your
investment executive.
TABLE OF CONTENTS
-----------------
Page
----
Investment Policies......................................... B-2
Investment Restrictions..................................... B-7
Taxes....................................................... B-9
Portfolio Transactions...................................... B-10
Management and Distribution Agreements...................... B-11
Determination of Net Asset Value............................ B-12
Calculation of Performance Data............................. B-14
Directors and Officers...................................... B-14
General Information......................................... B-17
Counsel and Auditors........................................ B-18
Appendix--Ratings of Investments............................ A-1
Financial Statements........................................ F-1
No person has been authorized to give any information or to make any
representations other than those contained in this Statement of Additional
Information or the Prospectus dated December 1, 1995, and, if given or made,
such information or representations may not be relied upon as having been
authorized by Great Hall or the Co-Distributors. This Statement of Additional
Information does not constitute an offer to sell, or a solicitation of an
offer to buy, securities in any state or jurisdiction in which such offering
or solicitation may not lawfully be made. The delivery of this Statement of
Additional Information at any time shall not imply that there has been no
change in the affairs of either of the Funds since the date hereof.
<PAGE>
INVESTMENT POLICIES
The following information supplements that set forth under "Investment
Objectives and Policies" and "Certain Investment Strategies" in the
Prospectus and does not, standing alone, present a complete explanation
of the matters disclosed. You must also refer to the Prospectus to obtain
information on the matters disclosed below.
Great Hall Prime Money Market Fund
Prime Fund invests in high quality, domestic money market instruments,
including but not limited to marketable obligations issued or guaranteed by
the U.S. Government, its agencies or instrumentalities (described below under
"Great Hall U.S. Government Money Market Fund"); corporate debt obligations
that are rated AA or better by Standard & Poor's Corporation ("S&P"), or Aa or
better by Moody's Investors Service, Inc. ("Moody's"); obligations of banks
and savings and loans that are members of the Federal Deposit Insurance
Corporation (the "FDIC"), which obligations may include, but are not limited
to, certificates of deposit, bankers' acceptances and documented discount
notes and letters of credit; high-grade commercial paper guaranteed or issued
by domestic corporations; and instruments (including repurchase agreements)
secured by such obligations. All securities mature within 397 days from the
date of purchase as required by Rule 2a-7 under the Investment Company Act of
1940 (the "1940 Act"), although repurchase agreements may be collateralized by
securities maturing in longer than 397 days.
Investments in obligations of banks and savings and loans are limited
to: (a) certificates of deposit issued by banks with assets in excess of
$500,000,000 or branches of such banks; (b) certificates of deposit or other
deposit obligations of savings and loans with assets in excess of
$500,000,000; and (c) bankers' acceptances, letters of credit or other
obligations guaranteed by banks meeting the above criteria. Bankers'
acceptances are short-term credit instruments used to finance the import,
export, transfer or storage of goods. They are termed "accepted" when a bank
guarantees their payment at maturity. Obligations issued or guaranteed by
FDIC member institutions are not necessarily guaranteed by the FDIC. Deposit
obligations of domestic banks and savings and loans are only insured by the
FDIC up to a maximum of $100,000, which limitation applies to all funds that
Prime Fund may have on deposit at any one bank or savings and loan. Bankers'
acceptances and letters of credit are not so insured. Deposit obligations of
foreign banks or foreign branches of domestic banks also are not covered by
FDIC insurance; in addition, such investments may involve other risks
different from risks associated with investments in deposit obligations of
domestic banks, such as future political and economic developments and the
possible imposition of governmental restrictions.
Permissible commercial paper investments generally consist of
obligations rated Prime-1 or A-1, or their subsequent equivalents, by Moody's
or S&P, or unrated commercial paper issued by companies with an unsecured debt
issue outstanding that is rated Aa or better by Moody's or AA or better by
S&P. Commercial paper constitutes unsecured indebtedness of business or
banking firms issued to finance their short-term financial needs. Prime Fund
may also purchase corporate debt obligations maturing within 397 days from the
date of acquisition with a minimum rating of Aa or AA.
Great Hall U.S. Government Money Market Fund
Government Fund invests in U.S. Treasury bills, notes, bonds and other
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities and repurchase agreements secured by such obligations. All
securities mature within 397 days from the date of purchase, although
repurchase agreements may be collateralized by securities maturing in longer
than 397 days.
Direct obligations issued by the U.S. Treasury include bills, notes and
bonds which differ from each other only in interest rates, maturities and
times of issuance. Treasury bills have maturities of one year or less,
<PAGE>
Treasury notes have maturities of one to ten years and Treasury bonds
generally have maturities of greater than ten years.
Examples of obligations issued by agencies or instrumentalities
established or sponsored by the U.S. Government include, among others,
securities issued by the Federal Home Loan Banks, Federal Home Loan Mortgage
Corporation, Federal Housing Administration, Federal National Mortgage
Association, Government National Mortgage Association and Student Loan
Mortgage Association. See "Certain Investment Strategies and Restrictions--
Government Securities" in the Prospectus for information regarding the credit
risk of such obligations. The Government Fund may also invest in securities
issued by agencies or instrumentalities of the U.S. Government that may be
organized in the future, provided it is satisfied that the credit risk with
respect to the issuer is minimal.
Great Hall Tax-Free Money Market Fund
Tax-Free Fund invests in debt obligations issued by or on behalf of any
state, territory or possession of the United States or the District of
Columbia or their political subdivisions, agencies or instrumentalities, and
participation interests therein, the interest on which is, in the opinion of
counsel for the issuer, wholly exempt from federal income taxation.
Specific types of obligations that Tax-Free Fund may purchase include
bond anticipation notes, construction loan notes, revenue anticipation notes
and tax anticipation notes that are Eligible Securities. Tax-Free Fund may
also invest in municipal bonds and participation interests therein, including
industrial development revenue bonds and pollution control revenue bonds, and
other types of tax-exempt municipal obligations, such as short-term discount
notes, all of which must be Eligible Securities.
Securities purchased by Tax-Free Fund mature within 397 days from the
date of purchase or carry variable or floating rates that are adjusted at
least every 397 days and have demand features and quality characteristics that
under applicable law and interpretations of such law permit the securities to
be treated as if they mature in 397 days or less from the date of purchase.
Bond anticipation notes are issued in anticipation of a later issuance
of bonds and are usually payable from the proceeds of the sale of the bonds
anticipated or of renewal notes. Construction loan notes, issued to provide
construction financing for specific projects, are often redeemed after the
projects are completed and accepted with funds obtained from the Federal
Housing Administration under "Fannie Mae" (Federal National Mortgage
Association) or "Ginnie Mae" (Government National Mortgage Association).
Revenue anticipation notes are issued by governmental entities in anticipation
of revenues to be received later in the then current fiscal year. Tax
anticipation notes are issued by state and local governments in anticipation
of collection of taxes to finance the current operations of such governments.
These notes are generally repayable only from tax collections and often only
from the proceeds of the specific tax levy whose collection they anticipate.
Municipal bonds are usually issued to obtain funds for various public
purposes, to refund outstanding obligations, to meet general operating
expenses or to obtain funds to lend to other public institutions and
facilities. They are generally classified as either "general obligation" or
"revenue" bonds and frequently have maturities in excess of 397 days at the
time of issuance, although a number of such issues now have variable or
floating interest rates and demand features that may permit Tax-Free Fund to
treat them as having maturities of less than 397 days. There are many
variations in the terms of, and the underlying security for, the various types
of municipal bonds. General obligation bonds are issued by states, counties,
regional districts, cities, towns and school districts for a variety of
purposes including mass transportation, highway, bridge, school, road, and
water and sewer system construction, repair or improvement. Payment of these
bonds is secured by a pledge of the issuer's full faith and credit and taxing
(usually property tax) power.
Revenue bonds are payable solely from the revenues generated from the
operations of the facility or facilities being financed or from other non-tax
sources. These bonds are often secured by debt service revenue funds, rent
subsidies and/or mortgage collateral to finance the construction of housing,
highways, bridges, tunnels, hospitals, university and college buildings, port
and airport facilities, and electric, water, gas and sewer systems.
Industrial development revenue bonds and pollution control revenue bonds are
usually issued by local government bodies or their authorities to provide
<PAGE>
funding for commercial or industrial facilities, privately operated housing,
sports facilities, health care facilities, convention and trade show
facilities, port facilities and facilities for controlling or eliminating air
and water pollution. Payment of principal and interest on such bonds is not
secured by the taxing power of the governmental body. Rather, payment is
dependent solely upon the ability of the users of the facilities financed by
the bonds to meet their financial obligations and the pledge, if any, of real
and personal property financed as security for payment.
Although Tax-Free Fund may invest more than 25% of its net assets in:
(a) municipal obligations whose issuers are in the same state; (b) municipal
obligations the interest upon which is paid solely from revenues of similar
projects; and (c) industrial development and pollution control revenue bonds
that are not variable or floating rate demand municipal obligations, it does
not presently intend to do so on a regular basis. The identification of the
issuer of a tax-exempt security for purposes of the 1940 Act depends on the
terms and conditions of the security. When the assets and revenues of an
agency, authority, instrumentality or other political subdivision are separate
from those of the government creating the subdivision and the security is
backed only by the assets and revenues of the subdivision, such subdivision
would be deemed to be the sole issuer. Similarly, in the case of an
industrial development bond, if that bond is backed by the assets and revenues
of the non-governmental user, then such non-governmental user would be deemed
to be the sole issuer. Generally, the District of Columbia, each state, each
of its political subdivisions, agencies, instrumentalities and authorities,
and each multi-state agency of which a state is a member, is a separate
"issuer" as that term is used in the Prospectus and this Statement of
Additional Information with respect to Tax-Free Fund, and the non-governmental
user of facilities financed by industrial development or pollution control
revenue bonds is also considered to be an issuer.
Legislation to restrict or eliminate the federal income tax exemption
for interest on certain municipal obligations that may be purchased by Tax-
Free Fund has been introduced in Congress; other such legislation also may be
introduced in the future by Congress or by state legislatures. If enacted,
any such legislation could adversely affect the availability of municipal
obligations for Tax-Free Fund's portfolio. Upon the effectiveness of any such
legislation that materially affects the Tax-Free Fund's ability to achieve its
investment objective, the Board of Directors of Great Hall will reevaluate the
Fund's investment objective and submit to its shareholders for approval
necessary changes in its objectives and policies.
Variable and Floating Rate Demand Municipal Obligations. Variable and
floating rate demand municipal obligations are tax-exempt obligations that
provide for a periodic adjustment in the interest rate paid on the obligations
and permit the holder to demand payment of the unpaid principal balance plus
accrued interest upon a specified number of days' notice either from the
issuer or by drawing on a bank letter of credit or comparable guarantee issued
with respect to such obligations. The issuer of such an obligation may have a
corresponding right to prepay in its discretion the outstanding principal of
the obligation plus accrued interest upon notice comparable to that required
for the holder to demand payment.
The variable or floating rate demand municipal obligations in which Tax-
Free Fund may invest are payable on demand at any time on no more than 30
days' notice or at specified intervals not exceeding 397 days and upon no more
than 30 days' notice. The terms of such obligations must provide that
interest rates are adjustable at intervals ranging from weekly up to annually.
The adjustments are based upon the prime rate of a bank or other appropriate
interest rate adjustment index as provided in the respective obligations.
Such obligations are subject to the quality characteristics for municipal
obligations set forth above and described in the Prospectus. Tax-Free Fund
may invest, without limitation, in such obligations.
The principal and accrued interest payable to Tax-Free Fund on demand
will be supported by an irrevocable letter of credit or comparable guarantee
of a financial institution (generally a commercial bank) whose short-term
taxable debt meets the quality criteria for investment by Tax-Free Fund in
municipal obligations, except in cases where the security itself meets the
credit criteria of the Fund without such letter of credit or comparable
guarantee. Thus, although the underlying variable or floating rate demand
obligation may be unrated, Tax-Free Fund in such cases will have at all times
an alternate credit source to draw upon for payment with respect to such
security.
<PAGE>
Tax-Free Fund may also purchase participation interests in variable or
floating rate obligations. Such participation interests will have, as part of
the participation agreement between the Fund and the selling financial
institution, a demand feature that permits Tax-Free Fund to demand payment
from the seller of the principal amount of the Fund's participation plus
accrued interest thereon. This demand feature always will be supported by a
letter of credit or comparable guarantee provided by the selling financial
institution. Such financial institution will retain a service fee, a letter
of credit fee and a fee for issuing commitments to purchase on demand in an
amount equal to the excess of the interest paid on the variable or floating
rate obligation in which Tax-Free Fund has a participation interest over the
negotiated yield at which the participation interest was purchased.
Accordingly, Tax-Free Fund will purchase such participation interests only
when the yield to the Fund, net of such fees, is equal to or greater than the
yield then available on other variable rate demand securities or short-term,
fixed rate, tax-exempt securities of comparable quality and where the fees are
reasonable in relation to the services provided by the financial institution
and the security and liquidity provided by the letter of credit or guarantee.
While variable and floating rate demand municipal obligations are
expected to have maturities in excess of 397 days, Great Hall currently
expects that Tax-Free Fund will exercise its right to demand payment of
principal and accrued interest on such an obligation if it no longer meets the
Fund's quality standards, unless, of course, the obligation can be sold for a
greater amount in the market.
Stand-By Commitments. Consistent with the requirement of Rule 2a-7,
Tax-Free Fund may also acquire "stand-by commitments" with respect to
obligations held in its portfolio. Under a "stand-by commitment," a dealer
agrees to purchase, at Tax-Free Fund's option, specified obligations at a
specified price. "Stand-by commitments" are the equivalent of a "put" option
acquired by Tax-Free Fund with respect to particular obligations held in its
portfolio.
The amount payable to Tax-Free Fund upon its exercise of a "stand-by
commitment" will normally be: (a) Tax-Free Fund's acquisition cost of the
obligation (excluding any accrued interest that Tax-Free Fund paid on its
acquisition), less any amortized market premium or plus any amortized market
or original issue discount during the period Tax-Free Fund owned the
obligation; plus (b) all interest accrued on the obligations since the last
interest payment date during the period such obligation is owned by Tax-Free
Fund. "Stand-by commitments" may be acquired when the remaining maturity of
the underlying obligation is greater than 60 days, but will be exercisable by
Tax-Free Fund only during the 60 day period before the maturity of such
obligation. Absent unusual circumstances, Tax-Free Fund will value the
underlying obligation on an amortized cost basis. Accordingly, the amount
payable by a dealer during the time a "stand-by commitment" is exercisable is
substantially the same as the value of the underlying obligation. Tax-Free
Fund's right to exercise "stand-by commitments" must be unconditional and
unqualified. A "stand-by commitment" is not transferable by Tax-Free Fund,
although it may sell the underlying obligation to a third party at any time.
Tax-Free Fund expects that "stand-by commitments" will generally be
available without the payment of any direct or indirect consideration.
However, if necessary and advisable, it may pay for "stand-by commitments"
either separately in cash or by paying a higher price for obligations that are
acquired subject to such a commitment (thus reducing the yield to maturity
otherwise available for the same securities). The total amount paid in either
manner for outstanding "stand-by commitments" held in Tax-Free Fund's
portfolio may not exceed 1/2 of 1% of the value of Tax-Free Fund's total
assets calculated immediately after each "stand-by commitment" is acquired.
Tax-Free Fund intends to enter into "stand-by commitments" only with
dealers, banks and broker-dealers that, in the opinion of the Fund's
investment adviser, Insight Investment Management ("Insight"), a division of
IFG Asset Management Services, Inc., present minimum credit risks. Tax-Free
Fund's reliance upon the credit of these dealers, banks and broker-dealers is
secured by the value of the underlying obligations that are subject to the
commitment. However, the failure of a party to honor a "stand-by commitment"
could have an adverse impact on the liquidity of Tax-Free Fund during periods
of rising interest rates.
Tax-Free Fund intends to acquire "stand-by commitments" solely to
facilitate portfolio liquidity and does not intend to exercise its rights
thereunder for trading purposes. The acquisition of a "stand-by commitment"
will not affect the valuation or maturity of the underlying obligation, which
will continue to be valued in accordance with the amortized cost method.
<PAGE>
"Stand-by commitments" will be valued at zero in determining net asset value.
Where Tax-Free Fund pays directly or indirectly for a "stand-by commitment,"
its cost will be reflected as unrealized depreciation for the period during
which the commitment is held. "Stand-by commitments" will not affect the
average weighted maturity of Tax-Free Fund's portfolio.
"When-lssued" Obligations. Tax-Free Fund may make commitments to
purchase municipal obligations on a "when-issued" basis, i.e., delivery and
payment for the obligations normally takes place at a date after the
commitment to purchase although the payment obligation and the coupon rate
have been established before the time the Fund enters into the commitment.
The settlement date usually occurs within one week of the purchase of notes
and within one month of the purchase of bonds. Great Hall intends that Tax-
Free Fund will make commitments to purchase obligations with the intention of
actually acquiring them, but may sell the obligations before settlement date
if such action is advisable or necessary as a matter of investment strategy.
At the time the Fund makes a commitment to purchase an obligation, it will
record the transaction and reflect the value of the obligation in determining
its net asset value. The Custodian will maintain on a daily basis a separate
account for the Fund consisting of cash or liquid debt securities with a value
at least equal to the amount of the Fund's commitments to purchase "when-
issued" obligations.
Obligations purchased on a "when-issued" basis or held in Tax-Free
Fund's portfolio are subject to changes in market value based not only upon
the public's perception of the creditworthiness of the issuer but also upon
changes in the level of interest rates. In the absence of a change in credit
characteristics, which, of course, will cause changes in value, the value of
portfolio investments can be expected to decline in periods of rising interest
rates and to increase in periods of declining interest rates. Therefore, if
to achieve higher interest income Tax-Free Fund remains substantially fully
invested at the same time that it has purchased obligations on a "when-issued"
basis, there will be a greater possibility that the market value of Tax-Free
Fund's assets will vary from $1.00 per share. See "Net Asset Value." However,
Tax-Free Fund does not believe that under normal circumstances its net asset
value or income will be affected by its purchase of obligations on a "when-
issued" basis.
When payment is made for "when-issued" securities, Tax-Free Fund will
meet its obligations from its then available cash flow, sale of securities
held in the separate account, sale of other securities or, although it would
normally not expect to do so, from sale of the "when-issued" securities
themselves (which may have a market value greater or less than the Fund's
obligation). Sale of securities to meet such obligations would involve a
greater potential for the realization of capital gains, which could cause Tax-
Free Fund to realize income not exempt from federal income taxation.
State and Municipal Lease Obligations. Tax-Free Fund is permitted to
invest in state and municipal lease obligations ("municipal leases").
Traditionally, municipal leases have been viewed by the SEC staff as illiquid
investments. However, subject to Board standards similar to the standards
applicable to restricted securities (as discussed in the Prospectus), Insight
may treat certain municipal leases as liquid investments and not subject to
the policy limiting investments in illiquid investments.
Municipal leases are issued by state and local governments or
authorities to finance the acquisition of equipment and facilities. Municipal
leases may take the form of a lease, an installment purchase or conditional
sale contract or a participation certificate in such a lease or contract.
Municipal leases frequently have the special risks described below which are
not associated with general obligation or revenue bonds issued by public
bodies. In determining municipal leases in which the Funds will invest,
Insight will evaluate the credit rating of the lessee and the terms of the
lease. Additionally, Insight may require that certain municipal leases be
secured by a letter of credit or put arrangement with an independent financial
institution.
The constitution and statutes of many states contain requirements with
which the state and municipalities must comply whenever incurring debt. These
requirements may include approving voter referendums, debt limits, interest
rate limits and public sale requirements. Municipal leases have evolved as a
means for public bodies to acquire property and equipment without needing to
comply with all of the constitutional and statutory requirements for the
issuance of debt. The debt-issuance limitations may be inapplicable for one
or more of the following reasons: (a) the inclusion in many municipal leases
of a "nonappropriation clause" that provides that the public body has no
obligation to make future payments under the lease or contract unless money is
appropriated for such purpose by the appropriate legislative body on a yearly
<PAGE>
or other periodic basis; (b) the exclusion of a municipal lease from the
definition of indebtedness under relevant state law; or (c) the provision in
the municipal lease for termination at the option of the public body at the
end of each fiscal year for any reason or, in some cases, automatically if not
affirmatively renewed.
If a municipal lease is terminated by the public body for
nonappropriation or other reason not constituting a default under the lease,
the rights of the lessor or holder of a participation interest therein are
limited to repossession of the leased property without any recourse to the
general credit of the public body. The disposition of the leased property by
the lessor in the event of termination of the lease might, in many cases,
prove difficult or result in a loss.
Municipal leases represent a relatively new type of financing that has
not yet developed the depth of marketability associated with more conventional
municipal obligations. Therefore, as mentioned above, municipal leases held
by Tax-Free Fund will be treated as illiquid unless they are determined to be
liquid pursuant to the aforementioned liquidity guidelines. Additionally, the
lack of an established trading market for municipal leases may make the
determination of fair market value more difficult.
INVESTMENT RESTRICTIONS
In addition to the investment objectives and those policies identified
as fundamental in the Prospectus, each of the Funds has adopted the following
investment restrictions and limitations, which may not be changed without
approval of shareholders owning a majority of the outstanding shares of each
such Fund, which as used in the Prospectus and this Statement of Additional
Information means the lesser of: (a) 67% or more of the shares present at a
shareholders' meeting if more than 50% of such Fund's shares are represented
at the meeting in person or by proxy; or (b) more than 50% of the outstanding
shares of such Fund.
None of the Funds may:
(1) purchase common stocks, preferred stocks, warrants or other
equity securities;
(2) purchase securities, if immediately after such purchase
more than 5% of its total assets would be invested in the securities of
any one issuer (excluding securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities), except that, subject to
applicable SEC rules (see the discussion of Rule 2a-7 below), up to 25%
of its total assets may be invested without regard to this 5%
limitation;
(3) invest more than 25% of its total assets in any one
industry, except that (i) with respect to Tax-Free Fund, this
restriction shall not apply to municipal obligations; (ii) with respect
to Prime Fund and Tax-Free Fund this restriction shall not apply to
securities issued or guaranteed by domestic banks or United States
branches of foreign banks that are subject to the same regulation as
United States banks; and (iii) this restriction shall not apply to
securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities;
(4) invest more than 5% of its assets in securities of issuers
which, with their predecessors, have a record of less than three years
continuous operation. (Securities of such issuers will not be deemed to
fall within this limitation if they are guaranteed by an entity in
continuous operation, with its predecessor, for more than three years);
(5) borrow money, except for temporary or emergency non-
investment purposes such as to accommodate abnormally heavy redemption
requests, and then only in an amount not exceeding 5% of the value of
its total assets at the time of borrowing;
<PAGE>
(6) pledge, mortgage or hypothecate its assets, except that to
secure borrowings permitted by (5) above, it may pledge securities
having a market value at the time of such pledge not exceeding 15% of
its total assets;
(7) sell securities short or purchase any securities on margin,
except for such short-term credits as are necessary for clearance of
portfolio transactions;
(8) write, purchase or sell put or call options, straddles,
spreads or any combination thereof except that Tax-Free Fund may acquire
rights to resell obligations as set forth herein under "Great Hall Tax-
Free Money Market Fund - Variable and Floating Rate Demand Municipal
Obligations" and "Stand-By Commitments";
(9) underwrite any securities issued by others;
(10) purchase or sell real estate or real estate mortgage loans
(although the Funds may invest in obligations secured by interests in
real estate), commodities, commodity contracts (including futures
contracts), real estate partnership interests and oil, gas and mineral
leases;
(11) make loans, other than by entering into repurchase
agreements and through the purchase of other permitted investments in
accordance with its investment objective and policies; provided,
however, that it may not enter into a repurchase agreement if, as a
result thereof, more than 10% of its total assets would be subject to
repurchase agreements maturing in more than seven days;
(12) invest in companies for the purpose of exercising control
or management of another company; or
(13) invest in securities of other investment companies, except
as they may be acquired as part of a merger, consolidation or
acquisition of assets.
With respect to the application of the 5% limitation contained in
investment restriction (2) above to Tax-Free Fund, the non-governmental user
of facilities financed by industrial development or pollution control revenue
bonds and a financial institution issuing a letter of credit or comparable
guarantee supporting a variable rate demand municipal obligation are
considered to be issuers. In addition to the above restrictions and
limitations, Tax-Free Fund may not purchase securities that are not municipal
obligations and the income from which is subject to federal income tax, if
such purchase would cause more than 20% of its total assets to be invested in
such securities, except that Tax-Free Fund may invest more than 20% of its
total assets in such securities during other than normal market conditions.
Bonds subject to the alternative minimum tax are considered taxable for this
test.
With respect to the 25% exception referred to in restriction (2) above,
Rule 2(a)-7 of the 1940 Act permits a Fund to invest more than 5% (but no more
than 25%) of the then current value of such Fund's total assets in the
securities of a single issuer for a period of up to three business days,
provided that: (a) the securities either are rated by two Nationally
Recognized Statistical Rating Organizations in the highest short-term rating
category or are securities of issuers that have received such rating with
respect to other short-term debt securities or are comparable unrated
securities; and (b) such Fund does not make more than one such investment at
any one time. The foregoing provision of Rule 2(a)-7 is not applicable to the
Tax-Free Fund.
With respect to investment restriction (13) above, "investment
companies" refers only to companies registered as investment companies under
the 1940 Act.
In addition to the fundamental limitations set forth above, as a non-
fundamental policy, each Fund may not invest more than 10% of its net assets
in all forms of illiquid investments, as set forth in the Prospectus under
"Illiquid Investments."
<PAGE>
With respect to each of the Funds, if a percentage restriction or
limitation is adhered to at the time of investment, a later increase or
decrease in such percentage resulting from a change in values or net assets
will not be considered a violation thereof.
TAXES
Taxation of the Funds-In General
Each of the Funds has qualified as a "regulated investment company"
under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code") and intends to continue to do so. To so qualify, a Fund must, among
other things; (a) derive in each taxable year at least 90% of its gross income
from dividends, interest, payments with respect to securities loans, gains
from the sale or other disposition of stock, securities or foreign currencies,
or other income derived with respect to its business of investing in such
stock, securities or currencies (the "90% test"); (b) derive in each taxable
year less than 30% of its gross income from the sale or other disposition of
stock or securities, or options, futures, and certain forward contracts or
foreign currencies held for less than three months (the "30% test"); and
(c) satisfy certain diversification requirements at the close of each quarter
of such Fund's taxable year. Furthermore, in order to be entitled to pay tax-
exempt interest income dividends to shareholders, Tax-Free Fund must satisfy
the requirement that, at the close of each quarter of its taxable year, at
least 50% of the value of its total assets consists of obligations the
interest on which is exempt from federal income tax ("tax-exempt
obligations").
As a regulated investment company, a Fund will not be liable for federal
income taxes on the part of its taxable net investment income and net capital
gains, if any, that it distributes to shareholders if at least 90% of its net
investment income (including tax-exempt income net of any disallowed
deductions relating thereto) and net short-term capital gain for the taxable
year is distributed. However, if for any taxable year a Fund does not satisfy
the requirements of Subchapter M of the Code, all of its taxable income will
be subject to tax at regular corporate rates without any deduction for
distributions to shareholders, and such distributions will be taxable to
shareholders as ordinary income to the extent of such Fund's current or
accumulated earnings and profits.
Each Fund will be liable for a nondeductible 4% excise tax on amounts
not distributed on a timely basis in accordance with a calendar year
distribution requirement. To avoid the tax, during each calendar year a Fund
must distribute: (a) at least 98% of its ordinary income (not taking into
account any capital gains or losses) for the calendar year; (b) at least 98%
of its capital gain net income for the twelve-month period ending on
October 31 (or December 31, if such Fund so elects); and (c) any portion (not
taxed to such Fund) of the respective balances from the prior year. Each Fund
intends to make sufficient distributions to avoid this 4% excise tax.
If Tax-Free Fund disposes of a municipal obligation that it acquired
after April 30,1993 at a market discount, it must recognize any gain it
realizes on the disposition as ordinary income (and not as capital gain) to
the extent of the accrued market discount.
If a shareholder receives an exempt-interest dividend with respect to
any share and sells or exchanges such share after holding it for six months or
less, any loss on the sale or exchange of such share will be disallowed to the
extent of the amount of such exempt-interest dividend. In certain limited
instances, the portion of Social Security benefits received by shareholders
that are subject to federal income tax may be affected by the amount of tax-
exempt interest income, including exempt-interest dividends, received by
shareholders of the Fund.
Distributions of exempt-interest dividends by Tax-Free Fund may be
subject to state and local taxes even though a substantial portion of such
distributions may be derived from interest on tax-exempt obligations that, if
realized by the shareholder directly, would be exempt from such taxes. Tax-
Free Fund will report to its shareholders annually after the close of its
taxable year the percentage and source, on a state-by-state basis, of interest
income earned on tax-exempt obligations held by such Fund during the preceding
year. Shareholders of Tax-Free Fund are advised to consult their tax advisers
concerning the application of state and local taxes.
<PAGE>
Under the Code, investors will not be allowed to deduct interest on
indebtedness incurred or continued to purchase or carry shares of an
investment company paying exempt-interest dividends, such the Funds, to the
extent such interest expenses relate to exempt-interest dividends received by
the shareholder. State laws may also restrict the deductibility of interest
on indebtedness incurred or continued to purchase or carry shares of a Fund.
Indebtedness may be allocated to shares of a Fund even though not directly
traceable to the purchaser of such shares.
Tax-Free Fund may acquire variable and floating rate demand municipal
obligations and "stand-by commitments" or "puts" from banks and municipal
securities dealers. See "Great Hall Tax-Free Money Market Fund - Variable and
Floating Rate Demand Municipal Obligations" and "Stand-By Commitments" in this
Statement of Additional Information. With respect to each such acquisition,
an opinion of issuer's counsel will be issued that Tax-Free Fund will be
treated for federal income tax purposes as the owner of the municipal
obligations acquired subject to such demand features or to such stand-by
commitments; the interest on such municipal obligations will be tax-exempt to
Tax-Free Fund; and the purchase prices of municipal obligations subject to
stand-by commitments must be allocated between such securities and stand-by
commitments based upon their relative fair market values.
A Fund, or a shareholder's broker with respect to a Fund, is required to
withhold federal income tax at a rate of 31% of the dividends, capital gains
distributions and proceeds of redemptions if a shareholder fails to furnish
such Fund with a correct taxpayer identification number ("TIN") or to certify
that he is exempt from such withholding or if the Internal Revenue Service
notifies such Fund or broker that the shareholder has provided such Fund with
an incorrect TIN or failed to properly report dividend or interest income for
federal income tax purposes. Any such withheld amount will be fully
creditable on each shareholder's individual federal income tax return. An
individual's TIN is his or her social security number.
The foregoing is only a summary of some of the important federal tax
considerations generally affecting the Funds and their shareholders. No
attempt is made to present a detailed explanation of the federal or state
income tax treatment of the Funds or their shareholders, and this discussion
is not intended as a substitute for careful tax planning.
Each investor is advised to consult his or her tax adviser regarding
specific questions as to federal, state, local and foreign taxation.
PORTFOLIO TRANSACTIONS
As provided in the investment advisory agreement in effect between
Insight and the Funds, Insight makes investment decisions and decisions as to
the execution of portfolio transactions for the Funds, subject to the general
supervision of the Board of Directors of Great Hall. At times, investment
decisions may be made to purchase or sell the same investment security for
more than one Fund, in which case the transactions will be allocated as to
amount and price in a manner considered equitable to each Fund. In some cases
this procedure may possibly have a detrimental effect on the price or volume
of the security as far as one or more Funds are concerned. On the other hand,
the ability of the Funds to participate in volume transactions may produce
better executions for the Funds in some cases. It is the opinion of the Board
of Directors that the benefits available because of Insight's organization
outweigh any disadvantages that may arise from exposure to simultaneous
transactions.
Under the 1940 Act, persons affiliated with Great Hall are prohibited
from dealing with Great Hall as a principal in the purchase and sale of
investments. Since over-the-counter transactions are usually principal
transactions, affiliated persons of Great Hall may not serve as a dealer in
connection with such transfers or commitments. The 1940 Act also prohibits
Great Hall from purchasing a security being publicly underwritten from a
syndicate in which any affiliated person is a principal underwriter except in
accordance with certain limitations. Furthermore, Great Hall may not use any
affiliated person as a broker or dealer in executing portfolio transactions
<PAGE>
without complying with the limitations imposed by the rules of the SEC, which
rules require the commissions, fees or other remuneration received by such
affiliated broker or dealer be: (a) reasonable and fair compared to the
commissions, fees or other remuneration paid to other brokers or dealers in
connection with comparable transactions involving similar securities being
purchased or sold on a securities exchange during a comparable period of time;
and (b) at least as favorable as commissions contemporaneously charged by such
affiliated broker or dealer on comparable transactions for its most favored
comparable unaffiliated customers.
Most purchase and sale transactions with respect to a Fund are with the
issuer or an underwriter or with major dealers of securities acting as
principals. Such transactions are normally on a net basis and generally do
not involve payment of brokerage commissions. However, the cost of securities
purchased from an underwriter normally includes a commission paid by the
issuer to the underwriter. Purchases or sales from or to dealers will
normally reflect the spread between bid and ask prices.
Insight, in effecting purchases and sales of portfolio securities for
the accounts of the Funds, will place orders in such manner as in its opinion
will offer the best price and market for the execution of each transaction.
Given the best price and market obtainable, it is the practice of the Funds
when purchasing through dealers to select them primarily on the basis of the
furnishing by such dealers, in addition to satisfactory execution of the
transaction, of research information and statistical and other services to
Insight. It is not always possible to place a dollar value on information and
services received from dealers. Since it is only supplementary to Insight's
own research efforts, the receipt of research information is not expected to
reduce significantly Insight's expenses. Such Funds may also consider,
subject to the requirement of best execution, dealers' sales of the Funds'
shares when selecting dealers to execute portfolio transactions. While
Insight will be primarily responsible for the placement of such Funds'
business, the policies and practices of the Funds in this regard must be
consistent with the foregoing and will at all times be subject to review by
the Board of Directors of Great Hall.
Because brokerage commissions as such are not usually paid in connection
with the purchase or sale of the securities in which the Funds invest and
because transactional costs are small, portfolio turnover is not expected to
materially affect net asset value or yields. None of the Funds paid any
brokerage commissions during the year ended July 31, 1995. Securities with
maturities of less than one year are excluded from required portfolio turnover
rate calculations, and therefore, each Fund's turnover rate for reporting
purposes will be zero.
MANAGEMENT AND DISTRIBUTION AGREEMENTS
Investment Adviser; Investment Advisory Agreement
Insight serves as each Fund's investment adviser. Insight is a division
of IFG Asset Management Services, Inc. ("AMS"), a wholly-owned subsidiary of
Inter-Regional Financial Group, Inc. ("IFG"). Each Co-Distributor likewise is
a wholly-owned subsidiary of IFG.
Pursuant to an investment advisory agreement (the "Advisory Agreement"),
Insight performs and bears the internal cost of research, statistical analysis
and continuous supervision of the investment portfolio of each Fund and
furnishes office facilities and certain clerical and administrative services to
the Funds. In addition, Insight bears all promotional expenses, including the
cost of printing and distributing prospectuses utilized for promotional
purposes. Other expenses are borne by whichever Fund incurs the expense and
such expenses include, but are not limited to, taxes, interest, brokerage fees
and commissions, and costs and expenses associated with the following matters
and services: registration and qualification of Great Hall, the Funds and
their shares with the SEC and the various states; services of custodians,
transfer agent, dividend disbursing agent, accounting services agents,
shareholder services agents, independent auditors and outside legal counsel;
maintenance of corporate existence; preparation, printing and distribution of
prospectuses to existing Fund shareholders; services of Great Hall directors
who are not employees of Insight or of the Co-Distributors or any of their
affiliates; directors' and shareholders' meetings, including the printing and
mailing of proxy materials; insurance premiums for fidelity and other
coverage; issuance and sale of Fund shares (to the extent not borne by the Co-
Distributors under their agreement with Great Hall); redemption of Fund
<PAGE>
shares; printing and mailing of stock certificates representing shares of the
Funds; association membership dues; preparation, printing and mailing of
shareholder reports; and portfolio pricing services, if any. Expenses borne
by Great Hall and attributable to only one Fund will be allocated to that
Fund; expenses that are not specifically allocable will be allocated to each
Fund in a manner and on a basis determined in good faith by the Board of
Directors of Great Hall, including a majority of the Directors who are not
"interested" persons of Great Hall or Insight, to be fair and equitable.
Under the Advisory Agreement, Insight receives a monthly advisory fee
based upon the average value of each Fund's daily net assets. The Tax-Free
Fund pays Insight a fee at an annual rate of .50% of its average daily net
assets. The Prime Fund and the Government Fund each pay an advisory fee that
is scaled downward as net assets increase. The fee for the Prime Fund is paid
at an annual rate of .55% on average daily net assets up to $700 million, .50%
on average daily net assets of over $700 million up to $1.2 billion, .45% on
average daily net assets of over $1.2 billion up to $2 billion, and .40% on
average daily net assets of over $2 billion. The fee for the Government Fund
is paid at an annual rate of .50% on average daily net assets up to $100
million, .40% on average daily net assets of over $100 million up to $300
million, and .35% on average daily net assets over $300 million. During the
year ended July 31, 1995, Prime Fund, Government Fund and Tax-Free Fund paid
advisory fees of $6,500,666, $414,653 and $1,521,807, respectively. During
the year ended July 31, 1994, Prime Fund, Government Fund and Tax-Free Fund
paid advisory fees of $5,054,015, $303,491 and $1,194,424, respectively (with
respect to Prime Fund only, net of voluntary fee waivers of $20,000). During
the year ended July 31, 1993, Prime Fund, Government Fund and Tax-Free Fund
paid advisory fees of $4,317,995, $331,381 and $944,331, respectively (with
respect to Prime Fund only, net of voluntary fee waivers of $390,000).
In the event that the aggregate operating expenses of any Fund
(excluding certain expenses) exceed any expense limitation imposed by
applicable state securities regulations, Insight has agreed to reimburse such
Fund (or otherwise bear the cost) for such excess expenses.
The Advisory Agreement continues in effect from year to year, if
specifically approved at least annually by a vote cast in person at a meeting
called for such purpose by a majority of the Directors of Great Hall, and a
majority of the Directors who are not "interested persons" (as defined in the
1940 Act) of Great Hall or Insight ("Independent Directors"). The Advisory
Agreement may be terminated by either party thereto, by the Independent
Directors or by a vote of the holders of a majority of the outstanding
securities of Great Hall, at any time, without penalty, upon 60 days' written
notice, and automatically terminates in the event of an assignment.
Termination will not affect the right of Insight to receive payment of any
unpaid balance of the compensation earned prior to termination.
The Co-Distributors
Shares of each Fund are continuously offered by and through the Co-
Distributors pursuant to a Co-Distributor Agreement. The Co-Distributors are
not obligated under such agreement to sell any certain number of Fund shares.
The Co-Distributors may enter into dealer agreements with other dealers,
pursuant to which such dealers also may sell Fund shares. The Funds have
agreed to indemnify the Co-Distributors and their affiliates, to the extent
permitted by applicable law, against certain liabilities under the Securities
Act of 1933.
DETERMINATION OF NET ASSET VALUE
The net asset value per share of each Fund is calculated separately for
each Fund. The assets and liabilities of each Fund are determined in
accordance with generally accepted accounting principles and the applicable
rules and regulations of the SEC. Assets and liabilities attributable to a
specific Fund are allocated to that Fund. Assets and liabilities not readily
identifiable to a Fund will be allocated among the Funds in a manner and on a
basis determined in good faith pursuant to procedures established by the Board
of Directors, including a majority of the Directors who are not "interested
persons" of Great Hall or Insight, to be fair and equitable.
<PAGE>
The Funds value their portfolio securities using the amortized cost
method. This method involves valuing a security at its cost and thereafter
accruing any discount or premium at a constant rate to maturity. By declaring
these accruals to a Fund's shareholders in the daily dividend, the value of
such Fund's assets and, thus, its net asset value per share, will generally
remain constant. Although this method provides certainty in valuation, it may
result in periods during which the value of a Fund's securities, as determined
by amortized cost, is higher or lower than the price such Fund would receive
if it sold the securities. During such periods, the yields on shares of such
Fund may differ somewhat from that obtained in similar funds with identical
investments utilizing a method of valuation based upon market prices and
estimates of market prices for all of their portfolio securities. For
example, if the use of amortized cost by any Fund resulted in lower aggregate
portfolio value on a particular day, prospective investors in such Fund would
be able to obtain a somewhat higher yield than would result from investments
in a similar fund utilizing solely market values. The converse would apply
during a period of rising interest rates.
In connection with the use of the amortized cost method, the Funds
maintain a dollar-weighted average portfolio maturity of 90 days or less and
purchase only portfolio securities having remaining maturities of 397 days or
less. With respect to Tax-Free Fund, and as described under "Great Hall Tax-
Free Money Market Fund - Variable and Floating Rate Demand Municipal
Obligations" in this Statement of Additional Information, securities having a
stated maturity of more than 397 days may be purchased by Tax-Free Fund if
they have demand and variable or floating rate features, together with
appropriate quality characteristics, that permit determination that such
securities may be deemed to have a maturity of less than 397 days. The Board
of Directors of Great Hall has also established procedures designed to
stabilize, to the extent reasonably possible, each Fund's net asset value per
share, as computed for purposes of sales and redemptions, at $1.00. Such
procedures include review of each Fund's portfolio holdings by the Board of
Directors of Great Hall at such intervals as it may deem appropriate to
determine whether each Fund's net asset value calculated by using available
market quotations deviates from $1.00 per share and, if so, whether such
deviation may result in material dilution or may be otherwise unfair to
existing shareholders. With respect to Tax-Free Fund, these procedures also
include a review by Insight, in accordance with policies established by the
Board of Directors of Great Hall and not less frequently than monthly, of the
quality of certain municipal obligations having variable or floating interest
rates and demand features that permit Tax-Free Fund to calculate the maturity
of such obligations to a point in time prior to their stated maturity. In the
event that the Board of Directors of Great Hall determines that a material
deviation from net asset value exists, the Board will take such corrective
action as it deems necessary and appropriate, which action might include
selling portfolio securities prior to maturity to realize capital gains or
losses or to shorten average portfolio maturity, withholding dividends, or
establishing net asset values per share by using available market quotations.
The portfolio securities in which each Fund invests fluctuate in value,
and hence the net asset value per share (and therefore, the public offering
price) of each Fund may also fluctuate. On July 31, 1995, the net asset
value and the maximum public offering price per share for the Funds were
calculated as follows:
Prime Fund
Net Assets ($1,598,925,147) = Net Asset Value Per Share ($1.00)
----------------------------------
Shares Outstanding (1,598,925,147)
Government Fund
Net Assets ($122,248,949) = Net Asset Value Per Share ($1.00)
----------------------------------
Shares Outstanding (122,248,949)
Tax-Free Fund
Net Assets ($363,273,066) = Net Asset Value Per Share ($1.00)
----------------------------------
Shares Outstanding (362,894,195)
<PAGE>
CALCULATION OF PERFORMANCE DATA
Yield
As stated in the Prospectus, each Fund from time to time may advertise
its yield. Any performance advertising by the Funds will include total return
data.
The current yield of the Funds is computed by determining the change,
exclusive of capital changes, in the value of a hypothetical pre-existing
account having a balance of one share at the beginning of a seven-day period,
and dividing the change by the value of the account at the beginning of the
base period to obtain the base period return, and then multiplying the base
period return by (365/7), with the resulting yield figure carried to at least
the nearest hundredth of one percent.
For the seven-day period ended July 31, 1995, the current yields of
Prime Fund, Government Fund and Tax-Free Fund were 5.23%, 5.18% and 3.22%,
respectively.
>/R>
The effective or compounded yield for the Funds is computed by
determining the change, exclusive of capital changes, in the value of a
hypothetical pre-existing account having a balance of one share at the
beginning of a seven-day period, and dividing the change by the value of the
account at the beginning of the base period to obtain the base period return,
and then compounding the base period return by adding 1, raising the sum to a
power equal to 365 divided by 7, and subtracting 1 from the result, according
to the following formula:
Effective yield = [(Base period return + 1) 365/7] - 1
For the seven-day period ended July 31, 1995, the effective yields of
Prime Fund, Government Fund and Tax-Free Fund were 5.36%, 5.31% and 3.27%,
respectively.
The taxable equivalent yield of Tax-Free Fund is calculated by applying
the stated income tax rate only to that portion of the Tax-Free Fund's seven-
day yield or effective yield that is exempt from taxation. The stated income
tax rate is subtracted from the number 1 (e.g., 1 minus 36% equals 64%), and
the tax-exempt portion of the yield is divided by the difference. The result
is then added to that portion of the Funds yield, if any, that is not tax-
exempt.
Assuming federal marginal tax rates of 28%, 31%, 36% and 39.6%, the
taxable equivalent current yields of Tax-Free Fund for the seven-day period
ended July 31, 1995 were 4.47%, 4.67%, 5.03% and 5.33%, respectively.
Assuming the same federal marginal tax rates, the taxable equivalent effective
yields of Tax-Free Fund for the seven-day period ended July 31, 1995 were
4.54%, 4.74%, 5.11% and 5.41%, respectively.
DIRECTORS AND OFFICERS
Directors and officers of Great Hall, together with information as to
their principal occupations during the past five years, are set forth below.
Except as otherwise set forth below, the address of each officer and director
is the same as that of Great Hall - 60 South Sixth Street, Minneapolis,
Minnesota 55402.
Principal Occupations
During the Past Five Years and
Name and Address Position Other Affiliations
- ---------------- -------- ------------------------------
T. Geron ("Jerry") Bell Director President of the Minnesota
501 Chicago Avenue South Twins Baseball Club
Minneapolis, MN 55415 Incorporated since 1987.
<PAGE>
Principal Occupations
During the Past Five Years and
Name and Address Position Other Affiliations
- ---------------- -------- ------------------------------
Sandra J. Hale Director President of Enterprise
2308 West Lake of Management, Int'l. since 1991;
the Isles Pkwy. Minnesota Commissioner of
Minneapolis, MN 55402 Administration from 1983 to
1990.
Ron James* Director Vice-President - Minnesota of
150 South Fifth Street U.S. West Communications since
Suite 3300 1990; Vice President and
Minneapolis, MN 55402 General Manager-Large Business
Markets of U.S. West
Communications from 1987 to
1990; Director of Ceridian
Corporation since 1991;
Director of The St. Paul
Companies since 1993; Director
of Automotive Industries
Holding, Inc. since 1994.
Jay H. Wein Director Independent consultant since
12900 Whitewater Drive April 1995; Chairman of
Minnetonka, MN 55343 Information Advantage, Inc.
from 1992 to April 1995; Vice
Chairman of National
Designwear, Inc. (which filed
a petition for reorganization
under chapter 11 of Title 11
of the United States Code in
1992 and which currently is
inactive and in the process of
liquidation) since 1990;
Retired in August 1989 after
15 years as Office Managing
Partner of the Minneapolis/St.
Paul Office of Arthur Andersen
& Co.
J. Scott Spiker Chief President, Chief Executive
Executive Officer and Director of
Officer Insight and AMS since October
1994; Senior Vice President of
IFG since February 1994;
Senior Vice President and
Business Manager, Employee
Benefit Services, of Norwest
Corporation from 1990 through
January 1994; Product Manager,
Institutional Collective
Funds, of Norwest Corporation
from 1989 through January
1994.
Dennis T. Hippen Senior Senior Vice President and
Vice Senior Portfolio Manager of
President Insight since 1991; Director
and President of Insight Bond
Management, Inc. (Insight's
predecessor) from 1983 through
1991.
Raye C. Kanzenbach Vice Vice President and Senior
President Portfolio Manager of Insight;
prior to 1991, Director,
Senior Vice President and
Secretary of Insight Bond
Management, Inc. since 1983.
<PAGE>
Principal Occupations
During the Past Five Years and
Name and Address Position Other Affiliations
- ---------------- -------- ------------------------------
Julie K. Getchell Chief Vice President, Secretary,
Financial Treasurer and Chief Financial
Officer Officer of AMS; prior to 1991,
Vice President and Assistant
Controller of Dain Bosworth
Incorporated since 1985.
Matthew L. Thompson Secretary Partner of Faegre & Benson
Professional Limited Liability
Partnership, Great Hall's
general counsel, since May
1995; Vice President,
Assistant Secretary and
Corporate/Fund Counsel of IFG
from January 1994 to May
1995; prior thereto, Partner
of Dorsey & Whitney since 1993
and Associate of Dorsey &
Whitney from 1985 through
1992.
__________________________
* Mr. James may be deemed to be an "interested" Director because he is a
director of The St. Paul Companies, which owns a majority interest in a
registered broker-dealer.
The annual compensation of each Director is $6,000 plus $1,000 for each
meeting attended. No compensation is paid by Great Hall to its officers. The
following table sets forth for such period the aggregate compensation
(excluding expenses) paid by Great Hall to its directors during the fiscal
year ended July 31, 1995:
COMPENSATION TABLE
------------------
Pensions or Retirement
Aggregate Benefits Accrued
Compensation as part of
Name of Director from Great Hall Great Hall Expenses
---------------- --------------- -------------------
T. Geron (Jerry) Bell $12,000 None
Sandra J. Hale $12,000 None
Ron James $12,000 None
Jay H. Wein $12,000 None
Additional directors of AMS are as follows:
Name Other Positions
--------------------- --------------------------------
Irving Weiser Chairman, Chief Executive Officer and
President of IFG; Chairman and Chief
Executive Officer of Dain Bosworth Inc.
Jerry W. Hayes Chief Executive Officer of Regional
Operations Group, Inc., a subsidiary of
IFG
John C. Appel President and Chief Operating Officer
of Dain Bosworth Inc.
Louis C. Fornetti Executive Vice President, Chief
Financial Officer and Treasurer of IFG.
<PAGE>
GENERAL INFORMATION
Under the terms of the Custodian Agreement, the Custodian holds the
portfolio securities of each Fund and keeps all necessary related accounts and
records. For its services, the Custodian receives from each Fund a monthly
fee based upon the average market value of such Fund's securities held in
custody plus securities transaction charges; it is also reimbursed for certain
out-of-pocket expenses.
Under the terms of the Dividend and Transfer Agency Agreement, the
Transfer Agent maintains the shareholder account records for each Fund,
handles certain communications between shareholders and each Fund, distributes
dividends and distributions payable by each Fund and produces statements with
respect to account activity for each Fund and its shareholders. For these
services, the Transfer Agent receives a monthly fee computed on the basis of
the number of shareholder accounts the Transfer Agent maintains for each Fund
during the month and is also reimbursed for certain out-of-pocket expenses.
The Co-Distributors and Regional Operations Group, Inc. ("ROG"), also a
wholly-owned subsidiary of IFG, 312 South Third Street, Minneapolis,
Minnesota, perform certain shareholder account services for the Funds pursuant
to a Shareholder Account Service Agreement. Under the terms of the
Shareholder Account Service Agreement, the Co-Distributors and ROG disburse or
credit all proceeds of redemptions, dividends and other distributions to
shareholders, handle certain communications between shareholders and each
Fund, prepare shareholder records, maintain a master account with the Transfer
Agent on behalf of shareholders and perform other related services. For their
services, the Co-Distributors and ROG receive a monthly fee computed on the
basis of the number of shareholder accounts that are maintained for each Fund
during the month and are also reimbursed for certain out-of-pocket expenses.
Great Hall maintains accounting records that specifically allocate
assets and liabilities on a series by series basis. The shares of each series
represent an undivided interest in the assets and liabilities specifically
allocated to that series. Creditors and other persons contracting with Great
Hall with respect to a series may look solely to the assets of that series to
satisfy claims against Great Hall.
All Fund shares are the same class and are freely transferable. Each
share has equal dividend rights and is entitled to one vote at all shareholder
meetings. Separate votes are taken by each series of Great Hall except to the
extent that the 1940 Act requires shares of all series to be voted in the
aggregate. Shares have non-cumulative voting rights, so that the holders of
more than 50% of the shares can, if they choose to do so, elect all the
directors of Great Hall, in which event the holders of the remaining shares
will be unable to elect any person as a director. Whenever the approval of a
majority of the outstanding shares of a series of Great Hall is required in
connection with shareholder approval of an investment advisory agreement,
changes in the investment objectives, policies or limitations of that series,
or changes in the distribution expense plan, a "majority" shall mean the vote
of the lesser of: (a) 67% or more of the shares of such series present at a
meeting, if the holders of more than 50% of the outstanding shares of such
series are present in person or by proxy; or (b) more than 50% of the
outstanding shares of such series. To the knowledge of Great Hall, no
shareholder beneficially owned 5% or more of any Fund's shares as of September
29, 1995.
Great Hall is not required under Minnesota law to hold annual or
periodically scheduled regular meetings of shareholders, and does not intend
to hold such meetings. The Board of Directors may convene shareholder
meetings when it deems appropriate. In addition, if a regular meeting of
shareholders has not been held during the immediately preceding fifteen
months, a shareholder or shareholders holding three percent or more of the
voting shares of Great Hall may demand a regular meeting of shareholders by
written notice of demand given to the chief executive officer or the chief
financial officer of Great Hall. Within ninety days after receipt of the
demand, a regular meeting of shareholders must be held at the expense of Great
Hall. Irrespective of whether a regular meeting of shareholders has been held
during the immediately preceding fifteen months, in accordance with Section
16(c) of the 1940 Act, the Board of Directors of Great Hall shall promptly
call a meeting of shareholders for the purpose of voting upon the question of
removal of any director when requested in writing to do so by the record
<PAGE>
holders of not less than 10% of the outstanding shares, and Great Hall will
assist in communications with other shareholders as required by the 1940 Act.
Under Minnesota law, the Board of Directors has overall responsibility
for managing Great Hall in good faith, in a manner reasonably believed to be
in the best interests of Great Hall, and with the care an ordinarily prudent
person in a like position would exercise in similar circumstances.
Under Minnesota law, directors owe Great Hall and its shareholders
certain fiduciary duties, including a duty of "loyalty" (to act in good faith
and in the best interests of Great Hall) and a duty of "care" (to act with the
care that a reasonably prudent person would exercise under similar
circumstances). Minnesota law authorizes corporations to eliminate the
personal monetary liability of directors to the corporation or its
shareholders for breach of the duty of "care." Directors of corporations
adopting such a limitation provision still owe the corporation this duty of
"care," but under most circumstances cannot be sued for monetary damages for
breaches of such duty. The Articles of Incorporation of Great Hall limit the
liability of directors to the fullest extent permitted by law.
The directors of Great Hall remain fully liable (including possibly for
monetary damages) for breaches of their duty of "loyalty," for self-dealing,
for bad faith and intentional misconduct, and for violations of the 1933 Act,
the Securities Act of 1934, and certain provisions of Minnesota corporation
law. Additionally, the 1940 Act prohibits limiting a director's liability for
willful misfeasance, bad faith, gross negligence, or reckless disregard of the
director's duties in the conduct of the director's office, and it is uncertain
whether and to what extent directors remain liable for monetary damages for
violations of the 1940 Act. The SEC staff has taken the position that
investment company directors remain liable for monetary damages under certain
circumstances.
Upon issuance and sale in accordance with the terms of the Fund's
Prospectus and Statement of Additional Information, each share of a Fund will
be fully paid and non-assessable. Shares have no preemptive, subscription or
conversion rights and are redeemable as set forth under "How To Redeem Shares"
in the Prospectus. In the event of the dissolution or liquidation of Great
Hall, the holders of the shares of any Fund are entitled to receive, as a
class, the underlying assets of such Fund available for distribution to
shareholders.
COUNSEL AND AUDITORS
Faegre & Benson Professional Limited Liability Partnership, 2200 Norwest
Center, 90 South Seventh Street, Minneapolis, Minnesota 55402, serves as Great
Hall's general counsel. Lindquist & Vennum PLLP, 4200 IDS Center, 80 South
Eighth Street, Minneapolis, Minnesota 55402, serves as counsel to Great Hall's
disinterested directors.
KPMG Peat Marwick LLP, 90 South Seventh Street, 4200 Norwest Tower,
Minneapolis, Minnesota 55402, has been selected as the independent auditors of
Great Hall for its fiscal year ending July 31, 1996.
<PAGE>
APPENDIX
RATINGS OF INVESTMENTS
The following is a description of Standard & Poor's Corporation ("S&P")
and Moody's Investors Service, Inc. ("Moody's") commercial paper, loan, note
and bond ratings. To the extent that ratings accorded by S&P or Moody's may
change as a result of changes in such organizations, the Funds will attempt to
use comparable rating standards for their permissible investments.
Description of Moody's Commercial Paper, Loan and Note Ratings.
The rating Prime-1 is the highest commercial paper rating assigned by
Moody's. Issuers rated Prime-1 (or related supporting institutions) have a
superior capacity for repayment of short-term promissory obligations.
Repayment capacity will normally be evidenced by the following characteristics:
* Leading market positions in well established industries.
* High rates of return on funds employed.
* Conservative capitalization structures with moderate reliance on debt
and ample asset protection.
* Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.
* Well established access to a range of financial markets and assured
sources of alternate liquidity.
Issuers rated Prime-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternative liquidity is
maintained.
Issuers rated Prime-3 (or related supporting institutions) have an
acceptable capacity for repayment of short-term promissory obligations. The
effect of industry characteristics and market composition may be more
pronounced. Variability in earnings and profitability may result in changes in
the level of debt protection measurements and the requirement for relatively
high financial leverage. Adequate alternate liquidity is maintained.
Loans bearing the designation MIG-1 by Moody's are of the best quality,
enjoying strong protection from established cash flows, superior liquidity
support or demonstrated broad-based access to the market for refinancing.
Loans bearing the designation of MIG-2 are of high quality, with margins
of protection ample although not so large as the preceding group.
<PAGE>
Loans bearing the designation of MIG-3 are of favorable quality. All
security elements are accounted for but there is lacking the undeniable
strength of the preceding grades. Liquidity and cash flow protection may be
narrow and market access for refinancing is likely to be less well established
Description of S&P's Commercial Paper and Municipal Note Ratings
The rating A is the highest commercial paper rating assigned by S&P.
Issues in this category have the greatest capacity for timely payment and are
delineated with the numbers 1, 2 and 3 to indicate the relative degree of
safety.
The designation A-1 indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted with a plus (+) sign
designation.
The designation A-2 indicates that the capacity for timely payment is
strong. However, the relative degree of safety is not as high as for issues
designated "A-1."
The designation A-3 indicates a satisfactory capacity for timely payment.
However, issues with this designation are somewhat more vulnerable to the
adverse effects of changes in circumstances than issues carrying the higher
designations.
Municipal notes rated SP-1 have a very strong or strong capacity to pay
principal and interest. Those issuers determined to possess overwhelming
safety characteristics will be given a plus (+) designation.
Municipal notes rated SP-2 have a satisfactory capacity to pay principal
and interest.
Municipal notes rated SP-3 have a speculative capacity to pay principal
and interest.
Description of S&P's Bond Ratings
AAA-Bonds rated AAA have the highest rating assigned by S&P to a debt
obligation. Capacity to pay interest and repay principal is extremely strong
AA-Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from AAA issues only in a small degree.
A-Bonds rated A have a strong capacity to pay interest and repay
principal, although they are somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than bonds in higher rated
categories.
<PAGE>
BBB-Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Although they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity to pay interest and repay
principal for bonds in this category than for bonds in higher-rated categories
BB, B, CCC, CC, C-Bonds rated BB, B, CCC, CC and C are regarded, on
balance, as predominantly speculative with respect to capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB
indicates the lowest degree of speculation and C the highest degree of
speculation. While such bonds will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.
Plus (+) or (-): The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
Description of Moody's Bond Ratings
Aaa-Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa-Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group, they comprise what are generally known
as high-grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than with respect
to Aaa securities.
A-Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.
Baa-Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba-Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
<PAGE>
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B-Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small
Caa-Bonds which are rated Caa are of poor standing. Such issues may be
in default or there may be present elements of danger with respect to principal
or interest.
Within each rating classification from Aa through B, Moody's has assigned
the numerical modifiers 1, 2 and 3. The modifier 1 indicates that a security
ranks in the high end of that rating category, 2 in the mid-range of a category
and 3 nearer the low end of a category.
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
Great Hall Investment Funds, Inc.
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments in securities, of Prime Money Market
Fund, U.S. Government Money Market Fund and Tax-Free Money Market Fund (funds
within Great Hall Investment Funds, Inc.) as of July 31, 1995 and the related
statements of operations for the year then ended and the statements of changes
in net assets for each of the years in the two-year period ended July 31, 1995
and the financial highlights for each of the years in the three-year period
ended July 31, 1995 and for the period from November 1, 1991 (commencement of
operations) to July 31, 1992. These financial statements and the financial
highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and the
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and the
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Investment securities held in custody are confirmed
to us by the custodian. As to securities purchased and sold but not received
or delivered, we request confirmations from brokers, and where replies are not
received, we carry out other appropriate auditing procedures. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of
Prime Money Market Fund, U.S. Government Money Market Fund and Tax-Free Money
Market Fund at July 31, 1995, and the results of their operations for the year
then ended and the changes in their net assets for each of the years in the
two-year period ended July 31, 1995, and the financial highlights for each of
the years in the three-year period ended July 31, 1995 and for the period from
November 1, 1991 to July 31, 1992, in conformity with generally accepted
accounting principles.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
September 1, 1995
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
July 31, 1995
Prime U.S. Government Tax-Free
Money Money Money
Market Fund Market Fund Market Fund
- ------------------------------------------------------------------------------
Assets:
Investments in securities at
market value (note 2), including
repurchase agreements of $11,700,000;
$7,850,000 and $0 respectively
(identified cost $1,594,411,797;
$121,800,047 and $358,679,772
respectively) $1,594,411,797 $121,800,047 $358,679,772
Cash in bank on demand deposit 182,318 71,770 --
Organization costs (note 2) 42,745 22,883 26,427
Accrued interest receivable 5,575,615 489,003 2,334,893
Receivable for investment
securities sold -- -- 6,685,000
- -------------------------------------------------------------------------------
Total assets 1,600,212,475 122,383,703 367,726,092
- -------------------------------------------------------------------------------
Liabilities:
Bank overdraft -- -- 1,418,441
Payable for investment
securities purchased -- -- 2,785,000
Accrued investment advisory fee 677,772 48,359 155,144
Other accrued expenses 609,556 86,395 94,441
- -------------------------------------------------------------------------------
Total liabilities 1,287,328 134,754 4,453,026
- -------------------------------------------------------------------------------
Net assets applicable to
outstanding capital stock $1,598,925,147 $122,248,949 $363,273,066
- -------------------------------------------------------------------------------
Represented by:
Capital stock - authorized 100
billion shares of $.01 par value
for each Fund, outstanding
1,598,925,147; 122,248,949
and 362,894,195 shares,
respectively $15,989,251 $1,222,489 $3,628,942
Additional paid-in capital 1,582,935,896 121,026,460 359,265,253
Accumulated net realized
gain on investments -- -- 378,871
- -------------------------------------------------------------------------------
Total - representing net
assets applicable to
outstanding capital
stock $1,598,925,147 $122,248,949 $363,273,066
- -------------------------------------------------------------------------------
Net asset value per share of
outstanding capital stock $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------
See accompanying notes to financial statements.
<PAGE>
STATEMENTS OF OPERATIONS
Year ended July 31, 1995
Prime U.S. Government Tax-Free
Money Money Money
Market Fund Market Fund Market Fund
- -------------------------------------------------------------------------------
Income:
Interest $70,632,461 $4,726,328 $11,371,501
- -------------------------------------------------------------------------------
Expenses (note 4):
Investment advisory fee 6,500,666 414,653 1,521,807
Custodian, accounting and
transfer agent fees 436,000 16,849 25,415
Sub-accounting transfer agent fees 1,356,306 28,600 65,600
Reports to shareholders 743,925 24,066 23,545
Amortization of organization costs 34,196 18,305 21,143
Directors' fees 9,000 9,000 9,000
Audit and legal fees 95,000 34,748 32,391
Registration fees 250,317 49,249 103,179
Administrative 25,612 5,000 2,500
Other expenses 106,100 9,507 21,679
- -------------------------------------------------------------------------------
Total expenses 9,557,122 609,977 1,826,259
- -------------------------------------------------------------------------------
Investment income - net 61,075,339 4,116,351 9,545,242
- -------------------------------------------------------------------------------
Net realized gain on investments (note 3) -- -- 378,871
- -------------------------------------------------------------------------------
Net increase in net assets
resulting from operations $61,075,339 $4,116,351 $9,924,113
- -------------------------------------------------------------------------------
See accompanying notes to financial statements.
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
Prime U.S. Government Tax-Free
Money Market Fund Money Market Fund Money Market Fund
- ----------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
7/31/95 7/31/94 7/31/95 7/31/94 7/31/95 7/31/94
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Investment income,
net.................. $61,075,339 $26,593,223 $4,116,351 $1,653,786 $9,545,242 $4,724,536
Net realized gain
on investments....... -- -- -- -- 378,871 --
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets
resulting from
operations........... 61,075,339 26,593,223 4,116,351 1,653,786 9,924,113 4,724,536
- ----------------------------------------------------------------------------------------------------------------------
Distributions to
shareholders from:
Investment income --
net................ (61,075,339) (26,593,223) (4,116,351) (1,653,786) (9,545,242) (4,724,536)
- ----------------------------------------------------------------------------------------------------------------------
Capital share transactions
at net asset value of
$1.00 per share:
Proceeds from sales.. 913,133,182 636,374,328 209,369,746 87,481,147 361,116,594 328,051,753
Shares issued for
reinvestment of
net investment
income
distributions...... 61,075,339 26,593,223 4,116,351 1,653,786 9,545,242 4,724,536
Payment for shares
redeemed........... (405,058,503) (494,862,042) (148,052,036) (98,878,477) (283,045,576) (266,967,140)
- ----------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net
assets from capital
share transactions..... 569,150,018 168,105,509 65,434,061 (9,743,544) 87,616,260 65,809,149
- ----------------------------------------------------------------------------------------------------------------------
Total increase
(decrease) in net
assets............... 569,150,018 168,105,509 65,434,061 (9,743,544) 87,995,131 65,809,149
- ----------------------------------------------------------------------------------------------------------------------
Net assets at beginning
of year................ 1,029,775,129 861,669,620 56,814,888 66,558,432 275,277,935 209,468,786
- ----------------------------------------------------------------------------------------------------------------------
Net assets at end
of year................ $1,598,925,147 $1,029,775,129 $122,248,949 $56,814,888 $363,273,066 $275,277,935
- ----------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Organization
Great Hall Investment Funds, Inc. (the Company) was incorporated on June
24, 1991 and is registered under the Investment Company Act of 1940 (as
amended) as an open-end management investment company and presently
includes a series of five funds including Prime Money Market Fund, U.S.
Government Money Market Fund and Tax-Free Money Market Fund (the funds).
The Company's articles of incorporation permit the board of directors to
create additional funds in the future.
2. Summary of Significant Accounting Policies
The significant accounting policies followed by the funds are as follows:
Investments in Securities
Pursuant to Rule 2a-7 of the Investment Company Act of 1940 (as
amended), securities are valued at amortized cost, which approximates
market value, in order to maintain a constant net asset value of $1 per
share.
Security transactions are accounted for on the date the securities are
purchased or sold. Interest income, including amortization of discount
and premium, is accrued daily.
Federal Taxes
The funds' policy is to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to shareholders. Therefore, no
income tax provision is required. Each fund is treated as a separate
entity for federal income tax purposes. In addition, on a calendar-year
basis, each fund intends to distribute substantially all of its net
investment income and realized gains, if any, to avoid the payment of
any federal excise taxes.
Distribution to Shareholders
Distribution to shareholders from net investment income are declared
daily and paid monthly through reinvestment in additional shares of the
funds at net asset value or payable in cash.
Organization Costs
Organization expenses were incurred in connection with the start-up and
initial registration of the funds. These costs are being amortized over
60 months on a straight-line basis. If any or all of the shares
representing initial capital of the funds is redeemed by any holder
thereof prior to the end of the amortization period, the proceeds will
be reduced by the unamortized organizational expense balance in the same
proportion as the number of shares redeemed bears to the number of
initial shares outstanding immediately preceding the redemption.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
Repurchase Agreements
Securities pledged as collateral for repurchase agreements are held by
the funds' custodian bank until maturity of the repurchase agreement.
Procedures for all agreements ensure that the daily market value of the
collateral is in excess of the repurchase agreement in the event of
default.
3. Investment Security Transactions
Cost of purchases and proceeds from sales of securities from August 1,
1994 to July 31, 1995 were as follows:
Purchases Sales Proceeds
- ------------------------------------------------------------------------------
Prime Money Market Fund.............. $14,938,900,001 $14,371,350,399
U.S. Government Money Market Fund.... 2,485,723,854 2,420,335,376
Tax-Free Money Market Fund........... 1,037,392,719 957,945,032
4. Fees and Expenses
The Company has entered into an investment advisory and management
agreement with IFG Asset Management Services, Inc. (AMS), under which
AMS manages each fund's assets and furnishes related office facilities,
equipment, research and personnel. The agreement requires each fund to
pay AMS a monthly fee based upon average daily net assets. The fee for
the Prime Money Market Fund is equal to an annual rate of .55% of the
first $700 million in net assets and then decreasing in reduced
percentages to .40% of net assets in excess of $2 billion. The fee for
the U.S. Government Money Market Fund is equal to an annual rate of .50%
of the first $100 million in net assets and then decreasing in reduced
percentages to .35% of net assets in excess of $300 million. The fee
for the Tax-Free Money Market Fund is equal to an annual rate of .50% of
net assets.
Each of the three funds has also entered into sub-accounting agreements
with affiliates Dain Bosworth Incorporated (DBI) and Rauscher Pierce
Refsnes, Inc. (RPR) where each firm performs various transfer and
dividend disbursing agent services. The fee, which is paid monthly to
DBI and RPR for providing such service, is equal to an annual rate of
$9.00 per shareholder account plus certain out-of-pocket expenses.
In addition to the investment advisory and management fee and the
shareholder account servicing fee, each fund is responsible for paying
most other operating expenses including outside directors' fees and
expenses, custodian fees, registration fees, printing and shareholder
reports, transfer agent fees and expense, legal, auditing and accounting
services, organizational costs, insurance interest and other
miscellaneous expenses.
Legal fees and expenses of $39,392 for the year ended July 31, 1995 were
paid to an affiliate of the funds' sponsor
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
5. Financial Highlights
Per share data for a share of capital stock outstanding throughout each
period and selected information for the period are as follows:
Prime Money Market Fund
--------------------------------------------------------------------------
Period
from
Year Year Year 11/1/91
ended ended ended to
7/31/95 7/31/94 7/31/93 7/31/92
---------------------------------------------------------------------------
Net asset value,
beginning of period $1.00 $1.00 $1.00 $1.00
---------------------------------------------------------------------------
Income from
investment operations 0.05 0.03 0.03 0.03
Distributions to shareholders
from investment income (0.05) (0.03) (0.03) (0.03)
---------------------------------------------------------------------------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00
---------------------------------------------------------------------------
Total return 4.9% 2.8% 2.7% 2.9%
Net assets at end
of period (000s omitted) $1,598,925 $1,029,775 $861,670 $834,743
Ratio of expenses to
average daily net assets** 0.77% 0.80% 0.78% 0.71%*
Ratio of net investment income
to average daily net assets** 4.93% 2.81% 2.68% 3.63%*
---------------------------------------------------------------------------
* Adjusted to an annual basis.
** Various fund fees and expenses were voluntarily waived or absorbed by
AMS for the Prime Money Market Fund during the periods prior to 1995.
Had the Fund paid all expenses, the ratio of expenses and net
investment income to average daily net assets would have been
0.81%/2.80% for the year ended July 31, 1994, 0.82%/2.64% for the year
ended July 31, 1993, and 0.79%/3.55% for the period ended July 31,
1992.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
5. Financial Highlights (continued)
U.S. Government Money Market Fund
---------------------------------------------------------------------------
Period
from
Year Year Year 11/1/91
ended ended ended to
7/31/95 7/31/94 7/31/93 7/31/92
---------------------------------------------------------------------------
Net asset value,
beginning of period $1.00 $1.00 $1.00 $1.00
---------------------------------------------------------------------------
Income from
investment operations 0.05 0.03 0.03 0.03
Distributions to shareholders
from investment income (0.05) (0.03) (0.03) (0.03)
---------------------------------------------------------------------------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00
---------------------------------------------------------------------------
Total return 4.8% 2.7% 2.6% 2.6%
Net assets at end
of period (000s omitted) $122,249 $56,815 $66,558 $60,834
Ratio of expenses to
average daily net assets** 0.73% 0.78% 0.79% 0.76%*
Ratio of net investment income
to average daily net assets** 4.94% 2.73% 2.57% 3.47%*
---------------------------------------------------------------------------
* Adjusted to an annual basis.
** Various fund fees and expenses were voluntarily waived or absorbed by
AMS for the U.S. Government Money Market Fund during the period ended
July 31, 1992. Had the Fund paid all expenses, the ratio of expenses
and net investment income to average daily net assets would have been
0.79%/3.44% for the period.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
5. Financial Highlights (continued)
Tax-Free Money Market Fund
---------------------------------------------------------------------------
Period
from
Year Year Year 11/1/91
ended ended ended to
7/31/95 7/31/94 7/31/93 7/31/92
---------------------------------------------------------------------------
Net asset value,
beginning of period $1.00 $1.00 $1.00 $1.00
---------------------------------------------------------------------------
Income from
investment operations 0.03 0.02 0.02 0.02
Distributions to shareholders
from investment income (0.03) (0.02) (0.02) (0.02)
---------------------------------------------------------------------------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00
---------------------------------------------------------------------------
Total return 3.1% 2.0% 2.1% 2.2%
Net assets at end
of period (000s omitted) $363,273 $275,278 $209,469 $187,205
Ratio of expenses to
average daily net assets** 0.60% 0.65% 0.67% 0.62%*
Ratio of net investment income
to average daily net assets** 3.14% 1.98% 2.09% 2.81%*
---------------------------------------------------------------------------
* Adjusted to an annual basis.
** Various fund fees and expenses were voluntarily waived or absorbed by
AMS for the Tax-Free Money Market Fund during the period ended July 31,
1992. Had the Fund paid all expenses, the ratio of expenses and net
investment income to average daily net assets would have been
0.65%/2.78% for the period.
<PAGE>
PRIME MONEY MARKET FUND
Investments in Securities
July 31, 1995
Principal Market
Name of Issuer Amount Value (a)
- ------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets.)
Commercial Paper & Other Corporate Obligations (91.48%):
- ------------------------------------------------------------------------------
Aerospace (1.25%)
Raytheon Company
5.74%, 8/21/95 $10,000,000 $9,968,111
5.72%, 8/22/95 10,000,000 9,966,633
-----------
19,934,744
-----------
Agricultural Products (1.56%)
Cargill Inc., 5.88%, 8/4/95 10,000,000 9,995,100
Cargill Financial Services, Inc.,
5.82%, 9/19/95 15,000,000 (d) 14,881,175
-----------
24,876,275
-----------
Banks - Domestic (12.52%)
AES Barbers Point, Inc.,
5.68%, 9/15/95, LOC Bank of America 7,000,000 6,950,300
Bank of America, 5.80%, 9/25/95 7,000,000 6,999,894
Bank of New York
5.90%, 9/5/95 5,000,000 4,998,931
6.02%, 8/15/95 4,000,000 4,000,624
5.82%, 1/12/96 1,500,000 (e) 1,499,503
Bankers Trust Company
6.07%, 12/7/95 10,000,000 (f) 10,000,000
5.68%, 10/11/95 15,000,000 14,831,967
Chemical Bank, Bankers Acceptance
5.72%, 8/4/95 3,000,000 2,998,570
5.61%, 10/4/95 6,000,000 5,940,160
5.55%, 1/16/96 6,000,000 5,844,600
5.85%, 8/14/95 5,000,000 4,989,438
5.84%, 10/23/95 5,000,000 4,932,678
Comerica Bank, Detroit
5.81%, 4/12/96 10,000,000 (e) 9,995,089
5.75%, 11/22/95 5,000,000 (e) 4,998,631
Fifth Third Bank, Cincinnati
6.08%, 11/17/95 7,000,000 6,998,338
6.05%, 11/13/95 10,000,000 10,000,331
6.22%, 10/27/95 8,000,000 7,999,620
First Bank, Minneapolis, N.A.,
Bankers Acceptance, 6.03%, 9/29/95 3,000,000 2,970,353
See accompanying notes to investments in securities.
<PAGE>
PRIME MONEY MARKET FUND
Investments in Securities (continued)
Principal Market
Name of Issuer Amount Value (a)
- ------------------------------------------------------------------------------
Commercial Paper & Other Corporate Obligations (continued):
- ------------------------------------------------------------------------------
Banks - Domestic (continued)
First Bank National Association
5.85%, 4/12/96 $10,000,000 (g) $10,000,000
5.83%, 1/17/96 12,000,000 (g) 12,000,000
First National Bank of Chicago, 5.76%, 8/10/95 10,000,000 9,999,948
Hyundai Motor Finance Company,
6.01%, 10/4/95, LOC Bank of America 1,800,000 1,780,768
National Bank of Detroit
5.75%, 8/7/95 9,500,000 9,499,921
6.31%, 10/12/95 15,000,000 15,000,290
Nations Bank, Texas, 5.90%, 12/5/95 10,000,000 10,000,000
Pittsburgh National Bank, N.A., 5.77%, 8/7/95 5,000,000 (e) 4,999,937
Wachovia Bank of Georgia, 5.76%, 9/26/95 10,000,000 10,000,000
-----------
200,229,891
-----------
Banks - Other (15.26%)
Accor S.A.
5.95%, 8/16/95, LOC Banque National De Paris 8,000,000 7,980,167
5.73%, 10/25/95, LOC Banque National De Paris 7,000,000 6,905,296
Banque Nationale De Paris, 5.74%, 9/18/95 10,000,000 10,000,108
Bank of Nova Scotia, 5.76%, 10/20/95 10,000,000 9,999,640
Centerior Fuels, Inc.
5.85%, 9/1/95, LOC Barclays Bank 9,000,000 8,954,663
5.92%, 8/1/95, LOC Barclays Bank 9,777,000 9,777,000
Commed Fuel Co. Inc.
5.95%, 8/15/95,
LOC Canadian Imperial Bank of Commerce 14,000,000 13,967,606
5.71%, 9/20/95,
LOC Canadian Imperial Bank of Commerce 11,000,000 10,912,764
Credit Suisse, 5.71%, 12/18/95 5,000,000 4,998,835
Deutche Bank, 5.95%, 8/11/95 15,000,000 14,975,208
Enterprise Capital Funding Corporation,
5.75%, 8/11/95-8/22/95, LOC Swiss Bank 13,000,000 (d) 12,970,451
JMG Funding, LP, 5.75%, 8/21/95,
LOC Societe Generale 10,000,000 9,968,056
Nebraska Higher Education Loan Program
5.75%, 8/28/95,
LOC National Westminister Bank 10,000,000 9,956,875
5.96%, 8/2/95,
LOC National Westminister Bank 12,907,000 12,904,863
See accompanying notes to investments in securities.
<PAGE>
PRIME MONEY MARKET FUND
Investments in Securities (continued)
Principal Market
Name of Issuer Amount Value (a)
- ------------------------------------------------------------------------------
Commercial Paper & Other Corporate Obligations (continued):
- ------------------------------------------------------------------------------
Banks-Other (continued)
Pemex Capital Corporation,
5.75%, 8/30/95, LOC Credit Suisse $8,000,000 $7,962,944
Queensland Aluminum Ltd.
5.72%, 8/28/95, LOC Credit Suisse 5,000,000 4,978,550
5.90%, 8/29/95, LOC Credit Suisse 7,000,000 6,967,878
Rabobank, 6.19%, 10/2/95 10,000,000 10,000,000
Royal Bank of Canada
5.95%, 8/14/95 8,000,000 7,982,811
6.10%, 12/1/95 12,000,000 (f) 12,000,000
SCI Systems, Inc.
5.74%, 8/15/95, LOC ABN/AMRO 10,000,000 9,977,678
5.75%, 8/21/95, LOC ABN/AMRO 15,000,000 14,952,083
Societe Generale
6.04%, 9/11/95 5,000,000 4,999,994
5.86%, 8/25/95 9,000,000 8,964,840
Southwest Gas Corporation, 5.70%, 9/25/95,
LOC Union Bank of Switzerland 11,000,000 10,904,208
-----------
243,962,518
Business Machines (1.80%) -----------
Pitney Bowes Credit, Inc.
5.87%, 8/23/95 10,000,000 9,964,127
5.77%, 9/26/95 5,000,000 4,955,122
Xerox Credit Corporation, 5.72%, 8/24/95 10,000,000 9,963,456
Xerox Corporation, 5.68%, 9/19/95 4,000,000 3,969,076
-----------
28,851,781
-----------
Chemicals (1.31%)
Dow Chemical Corporation, 6.02%, 10/15/95 6,000,000 5,982,325
DuPont (E.I.) deNemours & Company,
6.54%, 11/20/95 5,000,000 5,028,584
Monsanto Company, 5.88%, 9/7/95 10,000,000 9,939,567
-----------
20,950,476
-----------
See accompanying notes to investments in securities.
<PAGE>
PRIME MONEY MARKET FUND
Investments in Securities (continued)
Principal Market
Name of Issuer Amount Value (a)
- ------------------------------------------------------------------------------
Commercial Paper & Other Corporate Obligations (continued):
- ------------------------------------------------------------------------------
Conglomerates (1.53%)
Phillip Morris Companies, Inc.
7.00%, 3/8/96 $2,000,000 $2,017,925
6.38%, 10/1/95 1,500,000 1,507,222
7.18%, 10/16/95 250,000 248,761
6.04%, 8/15/95 5,845,000 5,849,529
5.90%, 8/4/95 5,000,000 4,997,542
5.80%, 10/4/95 10,000,000 9,896,889
-----------
24,517,868
Drugs & Cosmetics (1.56%) -----------
Pfizer, Incorporated
5.93%, 8/1/95 15,000,000 (d) 15,000,000
5.68%, 9/5/95 10,000,000 (d) 9,944,778
-----------
24,944,778
-----------
Electronics (1.40%)
Motorola Credit Corporation, 5.70%, 8/24/95 10,000,000 9,963,583
Motorola, Incorporated, 5.70%, 8/18/95 12,500,000 12,466,354
-----------
22,429,937
Financial - Auto (1.56%) -----------
Ford Motor Credit Corporation
5.92%, 8/7/95-8/29/95 14,000,000 13,971,716
5.91%, 3/15/96 1,300,000 1,322,921
6.34%, 1/5/95 600,000 603,318
6.18%, 9/25/95 1,000,000 1,005,748
6.81%, 5/1/96 500,000 511,137
6.60%, 5/1/96 1,000,000 1,016,358
7.00%, 12/11/95 5,000,000 4,984,684
6.49%, 5/10/96 1,550,000 (h) 1,552,882
-----------
24,968,764
-----------
See accompanying notes to investments in securities.
<PAGE>
PRIME MONEY MARKET FUND
Investments in Securities (continued)
Principal Market
Name of Issuer Amount Value (a)
- ------------------------------------------------------------------------------
Commercial Paper & Other Corporate Obligations (continued):
- ------------------------------------------------------------------------------
Financial - Diversified Business (28.11%)
American General Finance Corporation
5.72%, 8/30/95 $15,000,000 $14,930,883
5.93%, 8/10/95 7,000,000 6,989,623
5.88%, 6/15/96 1,000,000 992,652
6.47%, 3/5/96 2,000,000 2,031,685
Asset Securitization Cooperative Corporation
5.84%, 9/21/95 11,000,000 (d) 10,908,993
5.70%, 9/20/95 10,000,000 (d) 9,920,833
Associates Corporation of North America
6.94%, 12/15/95 3,550,000 3,576,502
5.73%, 9/8/95 10,000,000 9,939,517
6.22%, 10/1/95 3,350,000 3,383,042
5.81%, 8/1/95 630,000 630,000
6.90%, 3/1/96 750,000 757,860
7.59%, 12/1/95 1,735,000 1,726,213
7.50%, 2/15/96 300,000 295,390
Avco Financial Services
5.82%, 8/2/95 6,000,000 5,999,030
5.84%, 9/8/95 10,000,000 9,938,356
6.06%, 8/21/95 1,500,000 (i) 1,499,965
5.73%, 9/29/95 7,500,000 7,429,569
Barton Capital Corporation
5.73%, 8/9/95-9/13/95 21,000,000 (d) 20,883,936
5.81%, 9/25/95 4,000,000 (d) 3,964,494
Beneficial Corporation
5.90%, 8/24/95 17,000,000 16,935,919
6.96%, 12/1/95 500,000 504,515
5.68%, 9/1/95 2,370,000 2,369,545
6.62%, 2/7/96 2,000,000 2,027,704
5.82%, 9/12/95 3,000,000 (i) 2,999,805
Blue Hawk Funding Corporation, 5.76%, 8/29/95 25,000,000 (d) 24,888,000
See accompanying notes to investments in securities.
<PAGE>
PRIME MONEY MARKET FUND
Investments in Securities (continued)
Principal Market
Name of Issuer Amount Value (a)
- ------------------------------------------------------------------------------
Commercial Paper & Other Corporate Obligations (continued):
- ------------------------------------------------------------------------------
Financial - Diversified Business (continued)
CIT Group Holdings
5.92%, 8/9/95 $12,082,000 $12,066,105
5.84%, 12/15/95 450,000 (e) 449,739
7.55%, 2/15/96 328,000 330,007
6.30%, 11/1/95 600,000 598,846
6.67%, 3/15/96 1,125,000 1,112,156
Falcon Asset Securitization
5.75%, 8/7/95 7,700,000 (d) 7,692,621
5.73%, 8/24/95-9/15/95 17,000,000 (d) 16,911,503
Fleet Funding Corporation, 5.77%, 9/6/95 25,000,000 (d) 24,855,750
General Electric Capital Corporation
6.10%, 2/16/96 15,000,000 (f) 14,997,876
5.95%, 5/1/18 9,995,000 (b) 10,187,679
Heller Financial, 6.40%, 11/15/95 1,250,000 1,250,620
Household Finance Company
5.90%, 9/1/95 4,000,000 4,010,030
5.94%, 8/16/95 12,800,000 12,768,320
5.72%, 8/29/95 8,000,000 7,964,409
Matterhorn Capital Corporation
5.73%, 8/17/95 11,000,000 10,971,987
5.97%, 8/3/95 8,764,000 8,761,093
Merrill Lynch & Co.
6.74%, 3/18/96 3,500,000 3,503,356
5.81%, 9/18/95 10,000,000 (g) 10,000,000
5.98%, 7/1/96 10,000,000 (h) 10,000,000
Morgan Stanley & Company
5.82%, 9/22/95 10,000,000 9,915,933
5.78%, 9/14/95 8,000,000 7,943,484
Norwest Financial Corporation, 7.15%, 11/1/95 700,000 700,147
Receivables Capital Corporation
5.83%, 10/2/95 10,000,000 (d) 9,899,594
5.75%, 8/14/95 10,317,000 (d) 10,295,578
See accompanying notes to investments in securities.
<PAGE>
PRIME MONEY MARKET FUND
Investments in Securities (continued)
Principal Market
Name of Issuer Amount Value (a)
- ------------------------------------------------------------------------------
Commercial Paper & Other Corporate Obligations (continued):
- ------------------------------------------------------------------------------
Financial - Diversified Business (continued)
Retailer Funding Corporation, 5.75%, 8/25/95 $19,192,000 $19,118,431
Transamerica Finance Corporation
5.88%, 8/21/95 7,000,000 6,977,133
5.72%, 9/7/95 10,000,000 9,941,211
5.93%, 9/1/95 600,000 599,739
Triple A One Plus Funding Corporation
5.98%, 8/4/95 7,000,000 (d) 6,996,512
5.95%, 8/8/95 12,060,000 (d) 12,046,047
5.75%, 8/18/95 3,600,000 (d) 3,590,225
5.69%, 9/20/95 2,400,000 (d) 2,381,033
Windmill Funding Corporation
5.75%, 8/25/95 7,000,000 (d) 6,973,167
5.95%, 8/10/95 18,000,000 17,973,225
-----------
449,307,587
-----------
Food & Beverage (3.71%)
Campbell Soup Company, 5.72%, 9/12/95 12,000,000 11,919,920
CPC International, 5.80%, 9/26/95 15,000,000 (d) 14,864,667
H.J. Heinz Company
5.73%, 8/24/95 9,500,000 9,465,222
5.72%, 8/23/95 10,000,000 9,965,044
PepsiCo Incorporated
6.58%, 1/30/96 10,000,000 10,030,561
5.76%, 9/20/95 3,000,000 (i) 2,999,513
-----------
59,244,927
-----------
Forest and Paper Products (0.62%)
Kimberly-Clark
5.85%, 8/25/95 9,000,000 8,964,900
5.67%, 9/22/95 1,000,000 991,810
-----------
9,956,710
-----------
See accompanying notes to investments in securities.
<PAGE>
PRIME MONEY MARKET FUND
Investments in Securities (continued)
Principal Market
Name of Issuer Amount Value (a)
- ------------------------------------------------------------------------------
Commercial Paper & Other Corporate Obligations (continued):
- ------------------------------------------------------------------------------
Household Products (1.12%)
Proctor and Gamble
5.70%, 9/12/95 $5,000,000 $4,966,750
5.85%, 8/10/95 5,000,000 4,992,688
7.35%, 11/1/95 8,000,000 7,958,328
-----------
17,917,766
Medical and Health Care (0.90%) -----------
Bausch & Lomb, Incorporated
6.18%, 11/21/95 2,000,000 2,003,072
5.73%, 8/23/95 5,000,000 4,982,492
5.82%, 9/21/95 7,500,000 7,438,163
-----------
14,423,727
Oil Services (3.11%) -----------
Exxon Capital Corporation
6.50%, 2/14/96 15,000,000 15,095,137
6.53%, 4/15/96 5,000,000 5,045,132
Mobil Australia Finance Company, 5.69%, 8/31/95 9,679,000 (d) 9,633,105
Texaco, Inc., 5.81%, 8/31/95 20,000,000 19,903,167
-----------
49,676,541
Printing & Publishing (2.08%) -----------
Donnelley (R.R.) & Sons, Co.
5.72%, 8/14/95 7,500,000 (d) 7,484,508
5.73%, 9/13/95 11,000,000 (d) 10,924,714
McGraw-Hill, Inc., 5.92%, 8/2/95 14,897,000 14,894,550
-----------
33,303,772
Retail Stores (2.33%) -----------
J.C. Penney Funding, Inc.
5.90%, 8/4/95 15,000,000 14,992,625
5.72%, 9/8/95 4,000,000 3,975,849
5.93%, 8/10/95 6,000,000 5,991,105
Toys R Us
5.68%, 9/1/95 4,300,000 4,278,968
5.70%, 8/28/95 8,000,000 7,965,800
-----------
37,204,347
-----------
See accompanying notes to investments in securities.
<PAGE>
PRIME MONEY MARKET FUND
Investments in Securities (continued)
Principal Market
Name of Issuer Amount Value (a)
- ------------------------------------------------------------------------------
Commercial Paper & Other Corporate Obligations (continued):
- ------------------------------------------------------------------------------
Utilities - Electric (5.11%)
Baltimore Gas & Electric Company,
6.45%, 10/15/95 $10,835,000 $10,890,991
Carolina Power & Light, 5.95%, 8/2/95 12,000,000 11,998,017
Citizens Utilities Company, 5.85%, 9/5/95 8,000,000 7,954,500
Florida Power Corporation
5.71%, 8/11/95 7,000,000 6,988,897
5.68%, 9/19/95 15,000,000 14,884,033
Southern California Edison, 5.70%, 10/6/95 15,000,000 14,843,250
Northern States Power Company, Inc.,
5.93%, 8/7/95 14,235,000 14,220,931
-----------
81,780,619
Utilities - Telephone (4.64%) -----------
American Telephone & Telegraph Company
5.69%, 9/28/95 13,500,000 13,376,351
6.02%, 4/19/96 1,000,000 (f) 1,000,729
Ameritech Capital Funding, 5.79%, 9/28/95 10,000,000 9,906,797
Bell Atlantic Financial Services,
5.72%, 8/9/95-8/18/95 25,000,000 24,945,342
Southwestern Bell Capital Corporation
5.88%, 8/22/95 10,000,000 9,965,700
5.95%, 8/2/95 7,000,000 6,998,843
5.90%, 8/28/95 8,000,000 7,964,600
-----------
74,158,362
- ------------------------------------------------------------------------------
Total Commercial Paper & Other
Corporate Obligations (cost: $1,462,641,390) $1,462,641,390
- ------------------------------------------------------------------------------
Government & Agencies Securities (7.51%):
- ------------------------------------------------------------------------------
Federal Farm Credit Bank, 5.94%, 2/26/96 9,000,000 (e) 8,987,955
Federal Home Loan Bank
5.50%, 1/19/96 10,800,000 10,517,850
5.75%, 12/15/95 5,000,000 (g) 5,000,000
Federal Home Loan Mortgage Corp., 5.65%, 9/7/95 5,000,000 4,999,466
Federal National Mortgage Association
6.40%, 11/10/95 2,500,000 2,524,576
6.55%, 3/1/96 5,000,000 4,944,417
6.54%, 3/27/96 4,000,000 3,997,959
5.80%, 2/28/96 2,000,000 2,010,005
5.73%, 10/30/95 5,000,000 (g) 4,999,679
See accompanying notes to investments in securities.
<PAGE>
PRIME MONEY MARKET FUND
Investments in Securities (continued)
Principal Market
Name of Issuer Amount Value (a)
- ------------------------------------------------------------------------------
Government & Agencies Securities (continued):
- ------------------------------------------------------------------------------
Student Loan Marketing Association
5.75%, 8/17/95-8/31/95 43,698,000 43,524,041
5.97%, 8/8/95 6,302,000 6,294,684
5.79%, 7/19/96 5,000,000 (e) 4,997,663
6.02%, 11/27/96 2,275,000 (j) 2,277,243
5.90%, 12/1/95 15,000,000 (g) 14,994,869
- ------------------------------------------------------------------------------
Total Government & Agencies
Securities (cost: $120,070,407) $120,070,407
- ------------------------------------------------------------------------------
Repurchase Agreement (0.73%):
- ------------------------------------------------------------------------------
First Chicago, 5.83%, acquired 7/31/95 and
due 8/1/95 with accrued interest of
$1,895 (collateralized by $11,943,910
U.S. Treasury Notes, 6.13%, 5/15/98)
(cost: $11,700,000) 11,700,000 11,700,000
- ------------------------------------------------------------------------------
Total Investment in Securities
(cost: $1,594,411,797) (c) $1,594,411,797
- ------------------------------------------------------------------------------
Notes to Investments in Securities:
(a) Securities are valued in accordance with procedures described in note 2
to the financial statements.
(b) Interest rate varies to reflect current market conditions; rate shown is
the effective rate on July 31, 1995. The maturity date shown represents
final maturity. However, for purposes of Rule 2a-7, maturity is the next
interest rate reset date at which time the security can be put back to
the issuer.
(c) Also represents cost for federal income tax purposes.
(d) Commercial paper sold within terms of a private placement memorandum,
exempt from registration under section 4(2) of the Securities Act of
1933, as amended, and may be sold only to dealers in that program or
other "accredited investors." These securities have been determined to
be liquid under guidelines established by the Board of Directors.
(e) Interest rate resets weekly based on 3 month Treasury Bill plus a select
number of basis points.
(f) Interest rate resets daily based on Federal Funds plus a select number of
basis points.
(g) Interest rate resets monthly based on one month LIBOR less a select number
of basis points.
(h) Interest rate resets quarterly based on 3 month LIBOR plus or minus a
select number of basis points.
(i) Interest rate resets monthly based on CP Composite less a select number of
basis points.
(j) Interest rate resets weekly based on 3 month Treasury Bill plus 37.5 basis
points. Also, see (b) above.
<PAGE>
U.S. GOVERNMENT MONEY MARKET FUND
Investments in Securities
July 31, 1995
Principal Market
Name of Issuer Amount Value (a)
- ------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets.)
Federal Home Loan Mortgage Corporation Notes (14.77%)
5.83%, 8/9/95 $2,000,000 $1,997,409
5.64%, 8/15/95 3,000,000 2,993,420
5.73%, 9/20/95 2,000,000 1,984,083
5.63%, 8/21/95 1,500,000 1,495,308
5.81%, 8/1/95 1,200,000 1,200,000
5.63%, 8/11/95 2,840,000 2,835,559
5.63%, 8/14/95 2,000,000 1,995,934
5.65%, 8/25/95 1,100,000 1,095,857
5.60%, 10/31/95 2,500,000 2,464,611
----------
18,062,181
----------
Federal National Mortgage Corporation Notes (35.77%)
5.82%, 8/28/95 3,375,000 3,360,268
6.40%, 11/10/95 250,000 252,764
6.30%, 11/14/95 1,000,000 1,000,167
5.81%, 8/7/95 2,500,000 2,497,579
5.81%, 8/8/95 7,600,000 7,591,374
5.63%, 8/10/95 4,000,000 3,994,370
5.65%, 8/17/95 1,300,000 1,296,736
5.65%, 8/22/95 1,200,000 1,196,045
5.80%, 9/1/95 3,000,000 2,985,017
5.80%, 9/7/95 4,710,000 4,682,146
5.72%, 9/20/95 1,280,000 1,269,831
5.64%, 9/26/95 3,000,000 2,973,680
5.80%, 2/28/96 1,045,000 1,050,228
5.73%, 10/30/95 5,000,000 (c) 4,999,678
5.73%, 9/28/95 1,500,000 1,486,153
5.71%, 10/10/95 2,000,000 1,977,794
6.54%, 3/27/96 1,120,000 1,119,613
----------
43,733,443
----------
See accompanying notes to investments in securities.
<PAGE>
U.S. GOVERNMENT MONEY MARKET FUND
Investments in Securities (continued)
Principal Market
Name of Issuer Amount Value (a)
- ------------------------------------------------------------------------------
Federal Farm Credit Bank Notes (12.73%)
5.81%, 8/3/95 $3,000,000 $2,999,032
5.50%, 12/20/95 2,000,000 1,956,917
6.04%, 5/24/96 6,000,000 (d) 5,999,512
5.83%, 8/2/95 2,150,000 2,149,652
5.85%, 8/8/95 2,460,000 2,457,202
----------
15,562,315
----------
Federal Home Loan Bank Notes (16.40%)
5.62%, 8/14/95 4,015,000 4,006,852
5.72%, 9/14/95 2,000,000 1,986,018
5.88%, 8/2/95 3,300,000 3,299,461
5.85%, 6/3/96 5,000,000 (d) 5,000,410
6.08%, 10/6/95 2,000,000 1,999,567
6.79%, 2/15/96 500,000 501,409
5.85%, 8/2/95 2,260,000 2,259,633
5.75%, 12/15/95 1,000,000 (c) 1,000,000
----------
20,053,350
----------
Student Loan Marketing Association Notes (11.50%)
6.49%, 2/21/96 1,000,000 1,002,319
5.67%, 8/10/95 5,000,000 (e) 4,999,769
6.02%, 11/27/96 200,000 (f) 200,135
6.09%, 8/22/96 2,250,000 (e) 2,255,299
5.99%, 8/7/95 1,000,000 (e) 1,000,036
5.79%, 7/19/96 2,600,000 (d) 2,598,669
5.90%, 12/1/95 2,000,000 (c) 1,999,373
----------
14,055,600
----------
Tennessee Valley Authority (2.03%)
5.64%, 9/13/95 2,500,000 2,483,158
----------
See accompanying notes to investments in securities.
<PAGE>
U.S. GOVERNMENT MONEY MARKET FUND
Investments in Securities (continued)
Principal Market
Name of Issuer Amount Value (a)
- ------------------------------------------------------------------------------
Repurchase Agreement (6.42%)
- ------------------------------------------------------------------------------
First Chicago, 5.83%, acquired 7/31/95 and
due 8/01/95 with accrued interest of $1,271
(collateralized by $8,013,388 U.S. Treasury
Note, 6.13%, 5/15/98) (cost: $7,850,000) $7,850,000 $7,850,000
- ------------------------------------------------------------------------------
Total Investment in Securities (cost: $121,800,047) (b) $121,800,047
- ------------------------------------------------------------------------------
Notes to Investments in Securities:
(a) Securities are valued in accordance with procedures described in note 2 to
the financial statements.
(b) Also represents cost for federal income tax purposes.
(c) Interest rate resets monthly based on 1 month LIBOR rate less a select
number of basis points.
(d) Interest rate resets quarterly based on 3 month Treasury Bill plus a
select number of basis points.
(e) Interest rate resets weekly based on 3 month Treasury Bill plus a select
number of basis points.
(f) Interest rate resets weekly based on 3 month Treasury Bill plus 37.5 basis
points. For purposes of Rule 2a-7, maturity is the next interest rate
reset date at which time the security can be put back to the issuer.
<PAGE>
TAX-FREE MONEY MARKET FUND
Investments in Securities
July 31, 1995
Principal Market
Name of Issuer (c) Amount Value (a)
(Percentages of each investment category relate to total net assets.)
- ------------------------------------------------------------------------------
Arizona (1.16%)
Maricopa Cnty PCR, 3.85%, 5/1/29,
LOC Morgan Guaranty Trust $4,200,000 (b) $4,200,000
----------
California (7.07%)
California School Cash Reserve Program
Authority 1995 Pool Bond Ser. A,
3.75%, 7/3/96 11,000,000 11,090,851
Pollution Control Financing Authority
(Southern California Edison)
Series 1986D, 4.15%, 2/28/08 500,000 (b) 500,000
Series 1986A, 4.15%, 2/28/08 5,400,000 (b) 5,400,000
Series 1986, 4.15%, 2/28/08 3,500,000 (b) 3,500,000
Series C, 4.15%, 2/28/08 300,000 (b) 300,000
Los Angeles Regional Airports Lease Revenue
Series A, 3.90%, 12/1/24,
LOC Wachovia Bank of Georgia 1,200,000 (b) 1,200,000
Series B, 3.90%, 12/1/24,
LOC Wachovia Bank of Georgia 1,400,000 (b) 1,400,000
Series D, 3.90%, 12/1/24,
LOC Wachovia Bank of Georgia 2,300,000 (b) 2,300,000
----------
25,690,851
Colorado (1.65%) ----------
Arapahoe Cnty Capital Imp. Trust Fund
Highway Rec. (E-470 Project) Ser. F,
4.45%, 8/31/95, LOC Swiss Bank 2,000,000 (b) 2,000,000
Colorado Springs Utilities Refunding
Ser. 1986A, 3.55%, 11/15/95 1,000,000 1,010,533
Eagle County Rev. Bonds, 4.15%, 10/1/35,
LOC NationsBank, Texas 3,000,000 (b) 3,000,000
----------
6,010,533
----------
Delaware (.28%)
State of Delaware G.O. Ser. A, 3.55%, 3/1/96 1,000,000 1,005,950
----------
District of Columbia (1.73%)
Washington D.C. G.O.
Series A-1, 4.05%, 10/1/07,
LOC National Westminister 1,200,000 (b) 1,200,000
Series A-2, 4.05%, 10/1/07,
LOC Bank of Nova Scotia 600,000 (b) 600,000
Series A-3, 4.05%, 10/1/07,
LOC Toronto Dominion Bank 1,400,000 (b) 1,400,000
Series A-6, 4.05%, 10/1/07,
LOC National Westminister 1,700,000 (b) 1,700,000
Series A-5, 4.05%, 10/1/07,
LOC Bank of Nova Scotia 200,000 (b) 200,000
Series A-4, 4.05%, 10/1/07,
LOC Toronto Dominion Bank 1,200,000 (b) 1,200,000
----------
6,300,000
----------
See accompanying notes to investments in securities.
<PAGE>
TAX-FREE MONEY MARKET FUND
Investments in Securities (continued)
Principal Market
Name of Issuer (c) Amount Value (a)
- ------------------------------------------------------------------------------
Florida (3.67%)
Housing Finance Authority MFHR Bonds
(Oaks-Orange Park), 3.80%, 7/1/07,
LOC Chemical Bank $2,740,000 (b) $2,740,000
Jacksonville Electric Authority Revenue
(Electric System Notes),
3.00%, 9/13/95, LOC Credit Suisse 5,000,000 5,000,000
3.75%, 8/2/95, LOC Credit Suisse 4,300,000 4,300,000
City of Orlando
(Capital Improvement), 3.55%, 10/5/95 1,300,000 1,300,000
----------
13,340,000
Hawaii (2.85%) ----------
Honolulu City & County
3.90%, 8/8/95, LOC Canadian
Imperial Bank of Commerce 2,500,000 2,500,000
3.60%, 9/12/95, LOC Canadian
Imperial Bank of Commerce 5,850,000 5,850,000
3.10%, 8/3/95, LOC Canadian
Imperial Bank of Commerce 2,000,000 2,000,000
----------
10,350,000
Illinois (10.61%) ----------
City of Chicago G.O. Ser. 1995A, 4.60%, 10/31/96
LOC Morgan Guaranty Trust Co. New York 3,000,000 (b) 3,000,000
City of Springfield Community Improvement Revenue Bonds
(Realing Restoration Project), 4.05%, 12/1/15 3,100,000 (b) 3,100,000
(Landmark Central Project), 4.05%, 12/1/15 5,990,000 (b) 5,990,000
City of Springfield MFHR
(OT Center Limited Project), 4.05%, 12/1/15 7,700,000 (b) 7,700,000
Development Finance Authority Ser. 1995
(Latin School of Chicago), 4.00%, 6/1/30,
LOC Bank of America 5,000,000 (b) 5,000,000
Berwyn Illinois G.O., 3.75%, 12/1/95 2,000,000 2,086,734
Health Facilities Auth. Demand Rev. Ser. 1985B
(Children's Memorial Hosp. Project), 3.85%,
11/1/15, LOC First National Bank of Chicago 7,500,000 (b) 7,500,000
Chicago Tender Notes, Ser. B,
3.75%, 10/31/95, LOC Societe Generale 1,800,000 (b) 1,800,000
Chicago Waterworks Revenue, 4.35%, 11/1/95 1,350,000 1,355,408
Hoffman Estates Tax Increment Revenue, 4.50%,
11/15/95, LOC Union Bank of Switzerland 1,000,000 1,006,176
----------
38,538,318
----------
See accompanying notes to investments in securities.
<PAGE>
TAX-FREE MONEY MARKET FUND
Investments in Securities (continued)
Principal Market
Name of Issuer (c) Amount Value (a)
- ------------------------------------------------------------------------------
Iowa (4.59%)
Chillicothe PCR Bonds Ser. B, 4.40%, 3/1/00,
LOC Swiss Bank $1,000,000 (b) $1,000,000
Iowa School Corporation
(Iowa Cash Anticipation Notes)
Series 1995-1996A, 4.75%, 6/28/96 5,000,000 5,039,277
Series 1995-1996B, 5.75%, 2/1/96 1,500,000 1,513,845
Mount Vernon Private College Project Ser. 1985
(Cornell College Project) 4.20%, 10/1/15,
LOC First Bank Minneapolis, NA 2,300,000 (b) 2,300,000
Polk County Hospital Revenue Bonds,
3.85%, 12/1/05 6,825,000 (b) 6,825,000
----------
16,678,122
Kansas (1.51%) ----------
City of Burlington PCR (Kansas City Power & Light)
3.65%, 9/1/15, LOC Societe Generale 4,000,000 (b) 4,000,000
3.15%, 9/1/15, LOC Societe Generale 1,500,000 (b) 1,500,000
----------
5,500,000
Louisiana (1.64%) ----------
Parish of East Baton Rouge PCR Bonds
Ser. 1989, 3.90%, 11/1/19, 1,400,000 (b) 1,400,000
New Orleans Unlimited Tax G.O., 4.35%, 9/1/95 640,000 641,922
Rapids Parish PCR (Central Louisiana Electric
Co. Project), 3.75%, 7/1/18, LOC Swiss Bank 1,400,000 (b) 1,400,000
Public Facilities Authority
(Lady of Lakes Medical Center), 3.65%, 8/1/12 2,500,000 (b) 2,500,000
----------
5,941,922
Maine (1.59%) ----------
State of Maine G.O. Tax Anticipation Notes,
4.50%, 6/28/96 5,750,000 5,787,740
----------
Maryland (0.82%)
Washington Suburban Sanitary District Water
Supply, 4.05%, 8/1/95 860,000 877,200
Montgomery County Public Improvement
Series A-1, 4.05%, 7/1/07 2,100,000 (b) 2,100,000
----------
2,977,200
Michigan (2.11%) ----------
Kalamazoo HFA, 3.00%, 6/1/96,
LOC National Bank of Detroit 7,650,000 (b) 7,650,000
----------
Minnesota (4.65%)
Maple Grove MFHR (Eagle Ridge Apartments),
3.95%, 6/1/26, LOC Sumitomo Bank 2,900,000 (b) 2,900,000
See accompanying notes to investments in securities.
<PAGE>
TAX-FREE MONEY MARKET FUND
Investments in Securities (continued)
Principal Market
Name of Issuer (c) Amount Value (a)
- ------------------------------------------------------------------------------
Minnesota (continued)
State of Minnesota G.O., 4.45%, 8/1/95 $1,000,000 $1,000,000
State Housing Finance Agency SFMR
Ser. 1986A, 4.55%, 8/1/11 2,785,000 (b) 2,785,000
Minneapolis Community Dev. Agency
(Heart Inst. Foundation Proj.), 3.85%,
6/15/06, LOC First Bank Minneapolis, NA 3,100,000 (b) 3,100,000
State Higher Education Coordinating Board Suppl.
Student Loan 1994A Program, 3.75%, 12/1/00 2,100,000 (b) 2,100,000
County of Hennepin Solid Waste Refunding Bonds,
4.00%, 10/1/95 1,000,000 1,000,524
Southern MN Municipal Power Agency Notes,
4.00%, 10/12/95 4,000,000 4,000,000
----------
16,885,524
Missouri (3.37%) ----------
Independence Water Utility Revenue
3.60%, 11/1/16, LOC National Westminister 8,450,000 (b) 8,450,000
4.10%, 11/1/16, LOC National Westminister 2,000,000 (b) 2,000,000
State Environmental Improvement & Energy
Resource Authority PCR (Monsanto Co. Project),
3.85%, 2/1/09 1,800,000 (b) 1,800,000
----------
12,250,000
Montana (1.38%) ----------
City of Forsythe Portland General Electric
Company Ser B., 3.75%, 6/1/13, LOC Swiss Bank 5,000,000 (b) 5,000,000
----------
Nebraska (1.79%)
Investment Finance Authority Hospital
Rev. Bonds, 3.85%, 12/1/15 4,900,000 (b) 4,900,000
Buffalo County Hospital Authority
(Franciscan Good Samaritan), 3.85%, 1/1/16,
LOC Toronto Dominion Bank 1,600,000 (b) 1,600,000
----------
6,500,000
Nevada (5.43%) ----------
Clark County IDR Bonds Ser. 1985
(Nevada Power Co. Proj.), 4.45%, 12/1/15,
LOC Fuji Bank 10,145,000 (b) 10,145,000
Clark County Flood Control, 3.50%, 11/1/95 3,000,000 3,012,448
Clark County Airport System Refunding Revenue
Notes Ser. 1993A, 3.80%, 7/1/12 6,550,000 (b) 6,550,000
----------
19,707,448
----------
See accompanying notes to investments in securities.
<PAGE>
TAX-FREE MONEY MARKET FUND
Investments in Securities (continued)
Principal Market
Name of Issuer (c) Amount Value (a)
- ------------------------------------------------------------------------------
New Jersey (.69%)
State HFA Mortgage Revenue Bonds Ser.
A, 4.45%, 4/1/12 $2,500,000 (b) $2,500,000
----------
New York (4.22%)
New York City, New York G.O.,
4.25%, 10/1/20-10/1/22 6,100,000 (b) 6,100,000
New York City Water Finance Authority,
3.90%, 6/15/22 200,000 (b) 200,000
State Medical Care Facilities Finance Agency
Rev. Bonds Ser. 1985C (Mount Sinai Hospital),
3.70%, 1/15/96 3,000,000 3,128,050
Local Gov't Assistance Corp. (A Public Benefit
Corp. of New York) Ser. 1995F, 3.20%, 8/1/95,
LOC Toronto Dominion Bank 5,900,000 5,900,000
----------
15,328,050
North Carolina (.41%) ----------
Education Facilities Fin. Agency (Bowman Gray
School of Medicine), 3.80%, 9/1/20,
LOC Wachovia Bank 1,500,000 (b) 1,500,000
----------
North Dakota (4.68%)
State Housing Finance Agency SFMR.,
4.65%, 1/1/16 6,005,000 (b) 6,005,000
Oliver County PCR (Square Butte Electric),
4.30%, 9/1/95 10,995,000 (b) 10,995,000
----------
17,000,000
Ohio (1.38%) ----------
State Water Development Authority PCR
Ser. 1988, 3.50%, 3/1/15 5,000,000 (b) 5,000,000
----------
Pennsylvania (4.76%)
Quakertown General Auth. 1991 Health Systems
(Lifequest Project), 3.85%, 12/1/11,
LOC National Westminister 900,000 (b) 900,000
Quakertown Hospital Authority, 3.90%, 7/1/05,
LOC First National Bank of Chicago 1,100,000 (b) 1,100,000
Clairton School District, 4.30%, 8/1/95 1,670,000 1,703,400
Pennsylvania State HEA Ser. 1984A, 3.75%, 12/1/00,
LOC Student Loan Marketing Association 10,600,000 (b) 10,600,000
Lehigh Co. IDA Ser. 1985 (Allegheny Electric Coop.),
3.95%, 12/1/15, LOC Rabobank Nederland 3,000,000 (b) 3,000,000
----------
17,303,400
----------
See accompanying notes to investments in securities.
<PAGE>
TAX-FREE MONEY MARKET FUND
Investments in Securities (continued)
Principal Market
Name of Issuer (c) Amount Value (a)
- ------------------------------------------------------------------------------
Rhode Island (.28%)
State Tax Ant. Notes, 4.50%, 6/28/96,
LOC Union Bank of Switzerland $1,000,000 $1,006,002
----------
South Carolina (.63%)
Florence Cnty Hospital Revenue
(McLeod Regional Medical Center)
Series 1985A, 3.80%, 11/1/15 2,300,000 (b) 2,300,000
----------
Texas (6.22%)
Grand Prairie HFA (Winridge Project),
3.80%, 6/1/10 1,800,000 (b) 1,800,000
Grand Prairie Hsg. Fin. Corp. MFHR
(Lincoln Prop. Co.), 3.80%, 6/1/10 6,700,000 (b) 6,700,000
State Water Development, 4.25%, 8/1/95 1,800,000 1,800,000
Lower Neches Valley Auth. PCR
(Chevron USA Proj.), 4.45%, 2/15/17 4,500,000 (b) 4,500,000
State Public Finance Authority
Ser. 1993A, 3.25%, 8/3/95 2,600,000 2,600,000
State Public Finance Authority, 3.95%, 8/16/95 1,800,000 1,800,000
State Association of School Board Tax
Anticipation Notes Ser. 1994A, 4.15%, 8/31/95 1,405,000 1,405,535
State Tax Revenue Anticipation Notes,
5.00%, 8/31/95 2,000,000 2,002,200
----------
22,607,735
Utah (2.84%) ----------
State Board of Regents Student Loan
Rev. Bonds Ser. B, 3.80%, 11/1/00 10,300,000 (b) 10,300,000
----------
Vermont (0.55%)
State of Vermont G.O. Ser. B, 4.35%, 10/15/95 2,000,000 2,008,951
----------
Virginia (0.70%)
Fairfax County G.O., 4.25%, 10/1/95 2,500,000 2,535,097
----------
Washington (4.68%)
Port of Anacortes IDR Ser. 1985 (Texaco Project)
3.20%, 6/15/19 10,000,000 (b) 10,000,000
3.00%, 6/15/19 7,000,000 (b) 7,000,000
----------
17,000,000
West Virginia (0.90%) ----------
State Housing Development Fund
Ser. A-1, 4.25%, 5/1/14 3,275,000 (b) 3,275,000
----------
See accompanying notes to investments in securities.
<PAGE>
TAX-FREE MONEY MARKET FUND
Investments in Securities (continued)
Principal Market
Name of Issuer (c) Amount Value (a)
- ------------------------------------------------------------------------------
Wisconsin (1.38%)
Milwaukee Revenue Anticipation Notes
Ser. B, 4.45%, 8/24/95 $5,000,000 $5,001,929
----------
Wyoming (6.52%)
Converse Cnty PCR Ser. 1988 (Pacificorp),
3.00%, 1/1/14, LOC Deutche Bank 4,000,000 (b) 4,000,000
Gillette, Campbell Cnty. PCR Ser. 1988
3.00%, 1/1/18, LOC Deutche Bank 3,100,000 (b) 3,100,000
3.75%, 1/1/14, LOC Deutche Bank 2,800,000 (b) 2,800,000
Sweetwater County Pollution Control Revenue
2.90%, 1/1/17, LOC Union Bank of Switzerland 2,000,000 (b) 2,000,000
3.10%, 1/1/17, LOC Union Bank of Switzerland 5,000,000 (b) 5,000,000
3.90%, 1/1/17, LOC Union Bank of Switzerland 2,700,000 (b) 2,700,000
3.60%, 1/1/17, LOC Union Bank of Switzerland 4,100,000 (b) 4,100,000
----------
23,700,000
- ------------------------------------------------------------------------------
Total investments in securities (cost: $358,679,772) (d) $358,679,772
- ------------------------------------------------------------------------------
Notes to Investments in Securities:
(a) Securities are valued in accordance with procedures described in note 2 to
the financial statements.
(b) Interest rate varies to reflect current market conditions; rate shown is
the effective rate on July 31, 1995. The maturity date shown represents
final maturity. However, for purposes of Rule 2a-7, maturity is the next
interest rate reset date at which time the security can be put back to the
issuer.
(c) Portfolio abbreviations: IDA - Industrial Development Authority
IDR - Industrial Development Revenue
HFA - Housing Finance Authority
MFHR - Multi-Family Housing Revenue
PCR - Pollution Control Revenue
HEA - Higher Education Assistance Agency
SFMR - Single Family Mortgage Revenue
LOC - Letter of Credit
G.O. - General Obligation
(d) Also represents cost for federal income tax purposes.
<PAGE>
GREAT HALL
NATIONAL TAX-EXEMPT FUND
-----------------------------------
MINNESOTA INSURED TAX-EXEMPT FUND
-----------------------------------
60 South Sixth Street
Minneapolis, Minnesota 55402
(800) 934-6674
_________________________________________________
STATEMENT OF ADDITIONAL INFORMATION
dated December 1, 1995
_________________________________________________
Great Hall National Tax-Exempt Fund ("National Fund") and Great Hall
Minnesota Insured Tax-Exempt Fund ("Minnesota Fund" and, together with
National Fund, the "Funds") are non-diversified series of Great Hall
Investment Funds, Inc. ("Great Hall"), an open-end management investment
company (commonly known as a mutual fund) which currently offers its shares of
common stock in five series. This Statement of Additional Information
pertains only to the Funds and does not pertain to any other series of Great
Hall.
This Statement of Additional Information is not a prospectus and should
be read in conjunction with the Prospectus of the Funds, dated December 1,
1995, which has been filed with the Securities and Exchange Commission (the
"SEC"). To obtain a copy of the Prospectus, please call Great Hall or your
investment executive.
TABLE OF CONTENTS
-----------------
Page
----
Investment Policies......................................... B-2
Investment Restrictions..................................... B-6
Taxes....................................................... B-8
Insurance for Minnesota Fund................................ B-9
Special Factors Affecting the Minnesota Fund................ B-12
Portfolio Transactions...................................... B-15
Reduced Sales Charges....................................... B-16
Reinvestment Privilege...................................... B-17
Exchange Privilege.......................................... B-17
Management and Distribution Agreements...................... B-18
Determination of Net Asset Value............................ B-20
Calculation of Performance Data............................. B-20
Directors and Officers...................................... B-22
General Information......................................... B-24
Counsel and Auditors........................................ B-26
Financial Statements........................................ F-1
No person has been authorized to give any information or to make any
representations other than those contained in this Statement of Additional
Information or the Prospectus dated December 1, 1995, and, if given or made,
such information or representations may not be relied upon as having been
authorized by Great Hall or the Co-Distributors. This Statement of Additional
Information does not constitute an offer to sell, or a solicitation of an
offer to buy, securities in any state or jurisdiction in which such offering
or solicitation may not lawfully be made. The delivery of this Statement of
Additional Information at any time shall not imply that there has been no
change in the affairs of either of the Funds since the date hereof.
<PAGE>
INVESTMENT POLICIES
The following information supplements that set forth under "Investment
Objectives and Policies" in the Prospectus and does not, standing alone,
present a complete explanation of the matters disclosed. You must refer to
the Prospectus for a complete presentation of the matters disclosed below.
National Tax-Exempt Fund and Minnesota Insured Tax-Exempt Fund
The National Fund invests in municipal obligations issued by or on
behalf of any state, territory or possession of the United States or the
District of Columbia or their political subdivisions, agencies or
instrumentalities, and participation interests therein, the interest on which
is, in the opinion of counsel to the issuer, exempt from federal income
taxation.
The Minnesota Fund invests in municipal obligations issued by or on
behalf of the State of Minnesota or, in certain cases, a territory or
possession of the United States, or their political subdivisions, agencies or
instrumentalities, and participation interests therein, the interest on which
is exempt from federal income taxation and state personal income taxation for
residents of the State of Minnesota.
The Funds may invest in municipal bonds and participation interests
therein, including industrial development revenue bonds and pollution control
revenue bonds, and other types of tax-exempt municipal obligations, including
bond anticipation notes, construction loan notes, revenue anticipation notes,
tax anticipation notes and short-term discount notes.
Bond anticipation notes are issued in anticipation of a later issuance
of bonds and are usually payable from the proceeds of the sale of the bonds
anticipated or of renewal notes. Construction loan notes, issued to provide
construction financing for specific projects, are often redeemed after the
projects are completed and accepted with funds obtained from the Federal
Housing Administration under "Fannie Mae" (Federal National Mortgage
Association) or "Ginnie Mae" (Government National Mortgage Association).
Revenue anticipation notes are issued by governmental entities in anticipation
of revenues to be received later in the then current fiscal year. Tax
anticipation notes are issued by state and local governments in anticipation
of collection of taxes to finance the current operations of such governments.
These notes are generally payable only from tax collections and often only
from the proceeds of the specific tax levy whose collection they anticipate.
The applicable rating criteria for each Fund is as follows:
National Fund --
With respect to at least 95% of its assets, Ba or better, MIG-3 or
better or Prime-3 or better by Moody's Investors Service, Inc. ("Moody's");
BB or better, SP-3 or better or A-3 or better by Standard & Poor's
Corporation ("S&P"); with respect to at least 65% of its assets, Baa or
better, MIG-2 or better or Prime-2 or better by Moody's; BBB or better,
SP-2 or better or A-2 or better by S&P; with respect to the balance of its
assets, at least B by Moody's or S&P.
Minnesota Fund --
Baa or better, MIG-2 or better or Prime-2 or better by Moody's; and; BBB
or better, SP-2 or better or A-2 or better by S&P.
Each of these two Funds also may invest in municipal obligations that
are unrated, but that are considered by the Fund's investment adviser, Insight
Investment Management ("Insight"), a division of IFG Asset Management
Services, Inc., in accordance with policies established by the Board of
Directors of Great Hall, to have characteristics and quality comparable to
rated municipal obligations that such Fund is permitted to purchase. Each of
<PAGE>
these two Funds also may purchase municipal obligations backed by the full
faith and credit of the United States.
Credit ratings evaluate the safety of principal and interest payments,
not market value risk of high yield bonds. Also, since credit rating agencies
may fail to timely change the credit ratings to reflect subsequent events, an
investment company (either alone or in conjunction with its investment
adviser) should monitor the issuers of high-yield bonds to determine if the
issuers will have sufficient cash flow and profits to meet required principal
and interest payments, and to assure the bonds' liquidity so the investment
company can meet redemption requests.
Subsequent to a Fund's purchase of a security, such security may be
assigned a lower rating or cease to be rated. Such an event does not require
the elimination of the security from a Fund's portfolio, but Insight will
consider such an event in determining whether a Fund should continue to hold
the security in its portfolio. Other factors to be considered by Insight
include the financial history and condition of the issuer, its revenue and
expense prospects, and, in the case of revenue bonds, the financial history
and condition of the source of revenue to service the bonds.
Municipal bonds are usually issued to obtain funds for various public
purposes, to refund outstanding obligations, to meet general operating
expenses or to obtain funds to lend to other public institutions and
facilities. They are generally classified as either "general obligation" or
"revenue" bonds and frequently have maturities in excess of one year at the
time of issuance, although a number of such issues now have variable or
floating interest rates and demand features that may permit a Fund to treat
them as having maturities of less than one year. There are many variations in
the terms of, and the underlying security for, the various types of municipal
bonds. General obligation bonds are issued by states, counties, regional
districts, cities, towns and school districts for a variety of purposes
including mass transportation, highway, bridge, school, road, and water and
sewer system construction, repair or improvement. Payment of these bonds is
secured by a pledge of the issuer's full faith and credit and taxing (usually
property tax) power.
Revenue bonds are payable solely from the revenues generated from the
operations of the facility or facilities being financed or from other non-tax
sources. These bonds are often secured by debt service revenue funds, rent
subsidies and/or mortgage collateral to finance the construction of housing,
highways, bridges, tunnels, hospitals, university and college buildings, port
and airport facilities, and electric, water, gas and sewer systems.
Industrial development revenue bonds and pollution control revenue bonds are
usually issued by local government bodies or their authorities to provide
funding for commercial or industrial facilities, privately operated housing,
sports facilities, health care facilities, convention and trade show
facilities, port facilities and facilities for controlling or eliminating air
and water pollution. Payment of principal and interest on such bonds is not
secured by the taxing power of the governmental body. Rather, payment is
dependent solely upon the ability of the users of the facilities financed by
the bonds to meet their financial obligations and the pledge, if any, of real
and personal property financed as security for payment.
Although the Funds may invest more than 25% of their net assets in
municipal obligations the interest upon which is paid solely from revenue of
similar projects, management of the Funds does not presently intend that
either Fund will do so on a regular basis. The National Fund and the
Minnesota Fund may invest in repurchase agreements as temporary investments.
Management of the Funds currently does not expect that either of these two
Funds will invest more than five percent of its assets in repurchase
agreements.
Variable and Floating Rate Demand Municipal Obligations
Variable and floating rate demand municipal obligations are tax-exempt
obligations that provide for a periodic adjustment in the interest rate paid
on the obligations and permit the holder to demand payment of the unpaid
principal balance plus accrued interest upon a specified number of days'
notice either from the issuer or by drawing on a bank letter of credit or
comparable guarantee issued with respect to such obligations. The issuer of
such an obligation may have a corresponding right to prepay in its discretion
the outstanding principal of the obligation plus accrued interest upon notice
comparable to that required for the holder to demand payment.
<PAGE>
The variable or floating rate demand municipal obligations in which the
National Fund and the Minnesota Fund may invest are payable on demand at any
time on no more than 30 days' notice or at specified intervals not exceeding
one year and upon no more than 30 days' notice. The terms of such obligations
must provide that interest rates are adjustable at intervals ranging from
weekly up to annually. The adjustments are based upon the prime rate of a
bank or other appropriate interest rate adjustment index as provided in the
respective obligations. Such obligations are subject to the quality
characteristics for municipal obligations set forth above and described in the
Appendix to the Prospectus. The National Fund and the Minnesota Fund may
invest, without limitation, in such obligations.
The principal and accrued interest payable to the National Fund and the
Minnesota Fund on demand will be supported by an irrevocable letter of credit
or comparable guarantee of a financial institution (generally a commercial
bank) whose short-term taxable debt meets the quality criteria for investment
by such Funds in municipal obligations, except in cases where the security
itself meets the credit criteria of such Funds without such letter of credit
or comparable guarantee. Thus, although the underlying variable or floating
rate demand obligation may be unrated, the Funds in such cases will have at
all times an alternate credit source to draw upon for payment with respect to
such security.
The National Fund and the Minnesota Fund may also purchase participation
interests in variable or floating rate obligations. Such participation
interests will have, as part of the participation agreement between a Fund and
the selling financial institution, a demand feature that permits a Fund to
demand payment from the seller of the principal amount of the Fund's
participation plus accrued interest thereon. This demand feature always will
be supported by a letter of credit or comparable guarantee provided by the
selling financial institution. Such financial institution will retain a
service fee, a letter of credit fee and a fee for issuing commitments to
purchase on demand in an amount equal to the excess of the interest paid on
the variable or floating rate obligation in which a Fund has a participation
interest over the negotiated yield at which the participation interest was
purchased. Accordingly, the National Fund and the Minnesota Fund will
purchase such participation interests only when the yield to such Funds, net
of such fees, is equal to or greater than the yield then available on other
variable rate demand securities or short-term, fixed rate, tax-exempt
securities of comparable quality and where the fees are reasonable in relation
to the services provided by the financial institution and the security and
liquidity provided by the letter of credit or guarantee.
"When-Issued" Obligations
The National Fund and the Minnesota Fund may make commitments to
purchase municipal obligations on a "when-issued" basis, i.e., delivery and
payment for the obligations normally takes place at a date after the
commitment to purchase although the payment obligation and the coupon rate
have been established before the time a Fund enters into the commitment. The
settlement date usually occurs within one week of the purchase of notes and
within one month of the purchase of bonds. Insight intends that the National
Fund and the Minnesota Fund will make commitments to purchase obligations with
the intention of actually acquiring them, but may sell the obligations before
settlement date if such action is advisable or necessary as a matter of
investment strategy. At the time a Fund makes a commitment to purchase an
obligation, it will record the transaction and reflect the value of the
obligation in determining its net asset value. The Custodian will maintain on
a daily basis a separate account for each Fund consisting of cash or liquid
debt securities with a value at least equal to the amount of that Fund's
commitments to purchase "when-issued" obligations.
Obligations purchased on a "when-issued" basis or held in a Fund's
portfolio are subject to changes in market value based not only upon the
public's perception of the creditworthiness of the issuer but also upon
changes in the level of interest rates. In the absence of a change in credit
characteristics, which, of course, will cause changes in value, the value of
portfolio investments can be expected to decline in periods of rising interest
rates and to increase in periods of declining interest rates.
When payment is made for "when-issued" securities, the National Fund and
the Minnesota Fund will meet their respective obligations from each Fund's
then available cash flow, sale of securities held in the separate account,
sale of other securities or, although it would normally not expect to do so,
<PAGE>
from sale of the "when-issued" securities themselves (which may have a market
value greater or less than such Fund's obligation). Sale of securities to met
such obligations would involve a greater potential for the realization of
capital gains, which could cause such Fund to realize income not exempt from
federal income taxation.
Illiquid Investments
Each Fund is permitted to invest up to 15% of its assets in all forms of
"illiquid" investments and may invest without limitation in "restricted"
securities which Insight (pursuant to standards established by the Funds'
Board of Directors) has determined are liquid. However, each Fund's current
intention is to invest less than 5% of its net assets in illiquid investments.
An investment is generally deemed to be "illiquid" if it cannot be
disposed of within seven days in the ordinary course of business at
approximately the amount at which the investment company is valuing the
investment. "Restricted securities" are securities which were originally sold
in private placements and which have not been registered under the Securities
Act of 1933 (the "1933 Act"). Such securities generally have been considered
illiquid by the staff of the SEC, since such securities may be resold only
subject to statutory restrictions and delays or if registered under the 1933
Act. However, the SEC has acknowledged that a market exists for certain
restricted securities (for example, securities qualifying for resale to
certain "qualified institutional buyers" pursuant to Rule 144A under the 1933
Act). Additionally, Insight and the Funds believe that a similar market
exists for commercial paper issued pursuant to the private placement exemption
of Section 4(2) of the 1933 Act. The Funds may invest without limitation in
these forms of restricted securities if such securities are deemed by Insight
to be liquid in accordance with guidelines established by the Funds' Board of
Directors. Under these guidelines, Insight must consider: (a) the frequency
of trades and quotes for the security; (b) the number of dealers willing to
purchase or sell the security and the number of other potential purchasers;
(c) dealer undertakings to make a market in the security; and (d) the nature
of the security and the nature of the marketplace trades (for example, the
time needed to dispose of the security, the method of soliciting offers and
the mechanics of transfer). At the present time, it is not possible to
predict with accuracy how the markets for certain restricted securities will
develop. Investing in restricted securities could have the effect of
increasing the level of a Fund's illiquidity to the extent that qualified
purchasers of the securities become, for a time, uninterested in purchasing
these securities.
As indicated in the Funds' Prospectus, each Fund is permitted to invest
in state and municipal lease obligations ("municipal leases"). Traditionally,
municipal leases have been viewed by the SEC staff as illiquid investments.
However, subject to Board standards similar to the standards applicable to
restricted securities (as discussed above), Insight may treat certain
municipal leases as liquid investments and not subject to the policy limiting
investments in illiquid investments.
Unrated Obligations
National Fund is permitted to invest without limitation in municipal
obligations that are unrated but that are considered by Insight, in accordance
with policies established by Great Hall's Board of Directors, to have
characteristics and qualities that are comparable to those rated municipal
obligations in which the Funds may invest. Under the policies established by
Great Hall, Insight is required to base its assessment of unrated municipal
obligations upon publicly available information and various criteria (to the
extent deemed appropriate by Insight for each particular issue) including,
among others, analyses of: available cash and the calculation of various
financial ratios deemed appropriate for the issuer, as compared to the normal
industry ratios; the issuer's ability to react to future events, including a
review of the issuer's competitive position and capital intensiveness; the
issuer's alternative sources of liquidity, such as bank lines and surety bonds
to support its debt obligations; the condition of the local economy; the
protective covenants in the bond documents; the reputation of legal counsel
rendering an opinion on tax-exempt status; and if callable, the yields prior
to the call dates. If the issue is a general obligation issue, Insight also
will analyze the level of direct and overall debt per capita, debt in relation
to assessed valuation, and debt in relation to market valuation, the
diversification of major employers and taxpayers, and the issuer's tax
collection history. For municipal revenue bonds, Insight must assess the
importance of the service being financed, the issuer's historical and pro
forma debt service coverage and the diversification of the issuer's customer
<PAGE>
base. All unrated bonds are subject to a cash flow analysis, an assessment of
the issuer's ability to react to future events, and an assessment of the
issuer's liquidity.
Other Obligations
The municipal obligations described herein represent those which the
National Fund and the Minnesota Fund currently expect to purchase. However,
several new types of municipal bonds and notes, particularly those with
shorter maturities, have been introduced in recent years and Insight believes
that others may be offered in the future. Therefore, in order to preserve
maximum flexibility in seeking to attain its investment objective, Great Hall
has determined not to limit the purchases of either Fund to the types of
securities described herein, although such Funds will purchase only
obligations that have the credit characteristics described herein. In
addition, such Funds may not purchase any municipal bonds or notes having
characteristics or terms that are inconsistent with the investment objective
of the applicable Fund.
Legislation to restrict or eliminate the federal income tax exemption
for interest on certain municipal obligations that may be purchased by the
Funds has been introduced in Congress; other such legislation also may be
introduced in the future by Congress or by state legislatures. If enacted,
any such legislation could adversely affect the availability of municipal
obligations for a Fund's portfolio. Upon the effectiveness of any such
legislation that materially affects a Fund's ability to achieve its investment
objective, Great Hall will reevaluate such Fund's investment objective and
submit to its shareholders for approval necessary changes in its objectives
and policies.
INVESTMENT RESTRICTIONS
In addition to the investment objectives and those policies identified
as fundamental in the Prospectus, each of the Funds has adopted the following
investment restrictions and limitations, which may not be changed without
approval of shareholders owning a majority of the outstanding shares of each
such Fund, which as used in the Prospectus and in this Statement of Additional
Information means the lesser of: (a) 67% or more of the shares present at a
shareholders' meeting if more than 50% of such Fund's shares are represented
at the meeting in person or by proxy; or (b) more than 50% of such Fund's
outstanding shares.
Neither the National Fund nor the Minnesota Fund may:
(1) borrow money, except for temporary or emergency non-
investment purposes such as to accommodate abnormally heavy redemption
requests, and then only in an amount not exceeding 5% of the value of
its total assets at the time of borrowing;
(2) pledge, mortgage or hypothecate its assets, except that, to
secure borrowings permitted by (1) above, it may pledge securities
having a market value at the time of pledge not exceeding 15% of its
total assets;
(3) sell securities short or purchase any securities on margin,
except for such short-term credits as are necessary for clearance of
portfolio transactions;
(4) write, purchase or sell put or call options, except that
either Fund may acquire rights to resell obligations as set forth herein
under "National Tax-Exempt Fund and Minnesota Insured Tax-Exempt Fund-
Variable and Floating Rate Demand Municipal Obligations";
(5) underwrite any securities issued by others;
(6) purchase or sell real estate (although a Fund may invest in
municipal obligations or temporary investments secured by interests in
real estate), real estate mortgage loans, real estate limited
<PAGE>
partnerships, commodities, commodity contracts (including futures
contracts), oil or gas and mineral leases and interests;
(7) make loans, other than by entering into repurchase
agreements and through the purchase of other permitted investments in
accordance with its investment objective and policies; provided,
however, that it may not enter into a repurchase agreement if, as a
result thereof, more than 10% of its total assets would be subject to
repurchase agreements maturing in more than seven days;
(8) invest in companies for the purpose of exercising control
or management of another company;
(9) own more than 3% of the total outstanding voting stock of
any other investment company, or invest more than 5% of its total assets
in securities of any single investment company, nor more than 10% of its
total assets in securities of two or more investment companies, except
as part of a merger, consolidation or acquisition of assets;
(10) purchase or retain securities of any issuer if the officers
and directors of Great Hall or Insight, who individually own more than
1/2 of 1% of the outstanding securities of such issuer, together
beneficially own more than 5% of such outstanding securities;
(11) purchase its portfolio securities from, or sell its
portfolio securities to, any of the officers or directors of Great Hall
or Insight; or
(12) issue any class of securities senior to any other class of
securities, except insofar as a Fund may be deemed to have issued a
senior security by reason of: (a) entering into any repurchase
agreement; (b) permitted borrowings of money; or (c) purchasing
securities on a "when-issued" or delayed delivery basis.
The identification of the issuer of a municipal obligation depends on
the terms and conditions of the obligation. If the assets and revenues of an
agency, authority, instrumentality or other political subdivision are separate
from those of the government creating the subdivision, and the obligation is
backed only by the assets and revenues of the subdivision, such subdivision
will be regarded as the sole issuer. Similarly, in the case of a non-
governmental user, such as an industrial corporation or a privately owned or
operated hospital, if the security is backed only by the assets and revenues
of the non-governmental user, then such non-governmental user will be deemed
to be the sole issuer. If in either case the creating government or another
entity guarantees an obligation, and the value of all securities issued or
guaranteed by the guarantor and owned by a Fund exceeds 10% of the value of
such Fund's total assets, the guarantee will be regarded as a separate
security and treated as an issue of such government or entity.
In addition to the above restrictions and limitations, the National Fund
and Minnesota Fund, as a matter of fundamental policy, may not purchase
securities that are not municipal obligations and the income from which is
subject to federal income tax, if such purchase would cause more than 20% of a
Fund's total assets, at the time of purchase, to be invested in such
securities, except that a Fund may invest more than 20% of its total assets in
such securities during other than normal market conditions. The National Fund
and Minnesota Fund, as a matter of fundamental policy, may not engage in
arbitrage transactions.
In addition to the above restrictions and limitations and as a matter of
fundamental policy, the Minnesota Fund may not purchase municipal obligations
the income from which is subject to personal income tax to residents of the
State of Minnesota, if such purchase would cause more than 20% of such Fund's
total assets, at the time of purchase, to be invested in such securities,
except that the Minnesota Fund may invest more than 20% of its total assets in
such securities for temporary defensive purposes.
Shareholders may incur duplicate operating fees to the extent a Fund
invests in securities of other investment companies. See investment
restriction (9) above.
<PAGE>
In addition to the fundamental limitations set forth above, as a non-
fundamental policy, each Fund may not invest more than 15% of its net assets
in all forms of illiquid investments, as set forth above under "Illiquid
Investments."
With respect to each of the Funds, if a percentage restriction or
limitation (except for investment restriction (1)), is adhered to at the time
of investment, a later increase or decrease in such percentage resulting from
a change of values or net assets will not be considered a violation thereof.
TAXES
Each of the Funds has qualified as a "regulated investment company"
under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"), and intends to continue to do so. To so qualify, a Fund must, among
other things, (a) derive in each taxable year at least 90% of its gross income
from dividends, interest, payments with respect to securities loans, gains
from the sale or other disposition of stock, securities or foreign currencies,
or other income derived with respect to its business of investing in such
stock, securities or currencies (the "90% test"); (b) derive in each taxable
year less than 30% of its gross income from the sale or other disposition of
stock or securities, or options, futures, and certain forward contracts or
foreign currencies, held for less than three months (the "30% test"); and
(c) satisfy certain diversification requirements at the close of each quarter
of the Fund's taxable year. Furthermore, in order to be entitled to pay tax-
exempt interest income dividends to shareholders, each of the Funds must
satisfy the requirement that, at the close of each quarter of its taxable
year, at least 50% of the value of its total assets consists of obligations
the interest on which is exempt from federal income tax ("tax-exempt
obligations").
As a regulated investment company, a Fund will not be liable for federal
income taxes on the part of its taxable net investment income and net capital
gains, if any, that it distributes to shareholders if at least 90% of its net
investment income (including tax-exempt income net of disallowed deductions
relative thereto) and net short-term capital gain for the taxable year is
distributed. However, if for any taxable year a Fund does not satisfy the
requirements of Subchapter M of the Code, all of its taxable income will be
subject to tax at regular corporate rates without any deduction for
distributions to shareholders, and such distributions will be taxable to
shareholders as ordinary income to the extent of the Fund's current or
accumulated earnings and profits.
Each Fund will be liable for a nondeductible 4% excise tax on amounts
not distributed on a timely basis in accordance with a calendar year
distribution requirement. To avoid the tax, during each calendar year a Fund
must distribute: (a) at least 98% of its ordinary income (not taking into
account any capital gains or losses) for the calendar year; (b) at least 98%
of its capital gain net income for the twelve month period ending on
October 31 (or December 31, if the Fund so elects); and (c) any portion (not
taxed to the Fund) of the respective balances from the prior year. Each Fund
intends to make sufficient distributions to avoid this 4% excise tax.
If either Fund disposes of a municipal obligation that it acquired after
April 30,1993 at a market discount, it must recognize any gain it realizes on
the disposition as ordinary income (and not as capital gain) to the extent of
the accrued market discount.
All distributions of investment income during the year will have the
same percentage designated as tax-exempt. Since each of the Funds invests
primarily in tax-exempt securities, the percentage will be substantially the
same as the amount actually earned during any particular distribution period.
For both federal and Minnesota income tax purposes, if a shareholder
receives an exempt-interest dividend with respect to any share and sells or
exchanges such share after holding it for six months or less, any loss on the
sale or exchange of such share will be disallowed to the extent of the amount
of such exempt-interest dividend. In certain limited instances, the portion
of social security benefits received by shareholders that may be subject to
<PAGE>
federal and Minnesota income tax may be affected by the amount of tax-exempt
interest income, including exempt-interest dividends, received by shareholders
of a Fund.
Under the Code, investors will not be allowed to deduct interest on
indebtedness incurred or continued to purchase or carry shares of an
investment company paying exempt-interest dividends, such as the Funds, to the
extent such interest expenses relate to exempt-interest dividends received by
the shareholder. Minnesota law also restricts the deductibility of interest
on indebtedness incurred or continued to purchase or carry shares of a Fund.
Indebtedness may be allocated to shares of a Fund even though not directly
traceable to the purchase of such shares.
For federal tax purposes, if a shareholder exchanges shares of a Fund
for shares of any other of the Great Hall funds pursuant to the exchange
privilege (see below), such exchange will be considered a taxable sale of the
shares being exchanged. Furthermore, if a shareholder purchases shares of
either Fund and, within 90 days of purchasing such shares, exchanges them for
shares in the other Fund, any sales charge incurred on the purchase of the
earlier acquired shares cannot be taken into account for determining the
shareholder's gain or loss on the sale of those shares to the extent that the
sales charge that would have been applicable to the purchase of the shares in
the second Fund is waived because of the exchange privilege. However, the
amount of the sales charge that may not be taken into account in determining
the shareholder's gain or loss on the sale of the earlier acquired shares may
be taken into account in determining gain or loss on the eventual sale or
exchange of the later acquired shares.
Each Fund, or a shareholder's broker with respect to each Fund, is
required to withhold federal income tax at a rate of 31% of dividends, capital
gains distributions and proceeds of redemptions if a shareholder fails to
furnish such Fund with a correct taxpayer identification number ("TIN") or to
certify that he or she is exempt from such withholding, or if the Internal
Revenue Service notifies such Fund or broker that the shareholder has provided
such Fund with an incorrect TIN or failed to properly report dividend or
interest income for federal income tax purposes. Any such withheld amount
will be fully creditable on the shareholder's federal income tax return. An
individual's TIN is his or her social security number.
Distributions of exempt-interest dividends by the National Fund may be
subject to state and local taxes even though a substantial portion of such
distributions may be derived from interest on tax-exempt obligations that, if
realized directly, would be exempt from such taxes. The National Fund and
Minnesota Fund will each report to its shareholders after the close of each
taxable year the percentage and source, on a state-by-state basis, of interest
income earned on tax-exempt obligations held by such Fund during the preceding
year.
The foregoing tax discussion is general in nature, and each investor is
advised to consult his or her tax advisor regarding specific questions as to
federal, state, local or foreign taxation.
INSURANCE FOR MINNESOTA FUND
Great Hall's Board of Directors has authorized Minnesota Fund to obtain
insurance coverage from Municipal Bond Investors Assurance Corporation ("MBIA
Corp."). The following information has been furnished by MBIA Corp. for use
in this Statement of Additional Information.
The MBIA Corp. insurance policy obtained by the Minnesota Fund from MBIA
Corp. is effective only so long as such Fund is in existence, the insurer is
still in business and the municipal obligations described in the policy
continue to be held by such Fund. In the event of a sale of any municipal
obligation by the Fund or payment thereof prior to maturity, the MBIA Corp.
policy terminates as to such municipal obligation on the settlement date of
the sale or the redemption date. Premium rates for each issue covered by the
MBIA Corp. insurance policy are fixed for the life of the Fund at the time of
purchase by the Fund, but may vary with subsequent purchases of the same
issue. The insurance premiums are payable monthly by the Fund and are
adjusted for purchases, sales and payments prior to maturity of covered
obligations during the month.
<PAGE>
Under the MBIA Corp. policy, the insurer unconditionally and irrevocably
guarantees to the Minnesota Fund the full and complete payment of principal
and interest on the municipal obligations as such payments become due but are
not paid by the issuer, except that in the event of any acceleration of the
due date of the principal by reason of mandatory or optional redemption or
acceleration resulting from default or otherwise, other than any advancement
of maturity pursuant to a mandatory sinking fund payment, the payments
guaranteed will be made in such amounts and at such times as payments of
principal would have been due had there not been any such acceleration. The
MBIA Corp. policy also guarantees the reimbursement of any payment made by or
on behalf of the issuer that is subsequently recovered from the Fund pursuant
to a final judgment by a court of competent jurisdiction that such payment
constitutes an avoidable preference to the Fund within the meaning of any
applicable bankruptcy law.
The MBIA Corp. policy does not insure against loss of any prepayment
premium that may at any time be payable with respect to any municipal
obligation. The policy does not insure against loss relating to: (a) optional
or mandatory redemptions (other than mandatory sinking fund redemptions);
(b) any payments to be made on an accelerated basis; (c) payments of the
purchase price of municipal obligations upon tender by an owner thereof; or
(d) any preference relating to (a) through (c) above. The policy also does
not insure against nonpayment of principal of or interest on the municipal
obligations resulting from the insolvency, negligence or any other act or
omission of the paying agent for the municipal obligations.
Upon receipt of proper notice (telegraphic or telephonic, subsequently
confirmed in writing) that required payment of an insured amount that is then
due on a municipal obligation has not been made, MBIA Corp. on the due date of
such payment or within one business day after receipt of notice of such
nonpayment, whichever is later, will make a deposit of funds, in an account
with Citibank, N.A., in New York, New York, or its successor, sufficient for
the payment of any such insured amounts that are then due. Upon presentment
and surrender of such obligation or presentment of such other proof of
ownership of the obligation, together with evidence satisfactory to Citibank,
N.A. that such obligation is covered by the MBIA Corp. policy and any
appropriate instruments to evidence the assignment of the insured amount due
on the obligation as is paid by the insurer, and appropriate instruments to
effect the appointment of MBIA Corp. as agent for the Fund in any legal
proceeding related to payment of insured amounts on the obligation, Citibank,
N.A. is required to disburse to the Fund or the paying agent payment of the
insured amounts due on such obligation, less any amount held by the paying
agent for the payment of such insured amount and legally available therefor.
With respect to small issue industrial development bonds and pollution
control revenue bonds covered by the mutual fund insurance policy, the MBIA
Corp. policy guarantees the full and complete payments required to be made by
or on behalf of an issuer of such industrial development bonds and pollution
control revenue bonds if there occurs a loss of the tax-exempt status of
interest on such obligations, including principal or interest payments, as and
when required to be made. A "when issued" municipal obligation will be
covered under the policy upon the date on which the Fund enters into a binding
commitment to purchase the obligation, subject to prior credit approval by
MBIA Corp. In determining to insure municipal obligations held by the Fund,
MBIA Corp. has applied its own standards, which correspond generally to the
standards it has established for determining the insurability of new issues of
municipal obligations. Such standards are not necessarily the same as the
criteria used in regard to the selection of municipal obligations by Insight
with respect to the Fund.
The MBIA Corp. policy terminates as to any municipal obligation that has
been redeemed from or sold by the Fund on the date of such redemption or the
settlement date of such sale, and, except in the case of a mandatory sinking
fund redemption payment deemed to be an avoidable preference to the Fund which
will be covered in the manner described above, MBIA Corp. will not have any
liability under the MBIA Corp. policy as to any such municipal obligation
thereafter. Unless otherwise terminated by the Fund, the MBIA Corp. policy
will terminate as to all municipal obligations on the date on which the last
of the municipal obligations mature, are redeemed or are sold by the Fund.
The Minnesota Fund may apply to purchase from MBIA Corp. secondary
market insurance with respect to a municipal obligation covered by the MBIA
Corp. policy at the time of its sale (i.e., insurance to maturity of the
<PAGE>
municipal obligation), subject to approval by MBIA Corp., upon the payment of
a single predetermined insurance premium from the proceeds of the sale of such
municipal obligation. Accordingly, any municipal obligation covered by the
MBIA Corp. mutual fund insurance policy would be eligible to be sold on an
insured basis if permanent insurance is obtained. It is expected that the
Fund will apply to obtain permanent insurance with respect to such municipal
obligations proposed to be sold only if, in the judgment of Insight, the Fund
would thereby receive net proceeds after deducting the cost of such permanent
insurance and related fees significantly in excess of the proceeds it would
receive if such municipal obligation were sold without permanent insurance.
The premium required to be paid for secondary market insurance with respect to
municipal obligations purchased for the Minnesota Fund would be determined
upon application by the Fund and approval by MBIA Corp. of such municipal
obligations for secondary market insurance.
The purpose of acquiring a permanent insurance policy would be to enable
the Minnesota Fund to sell the municipal obligation to a third party at a
rating and market price higher than what otherwise might be obtainable if the
obligation were sold without the insurance coverage. The difference between
the additional sale price and the single premium payment would inure to the
Fund in determining the net capital gain or loss realized by such Fund upon
the sale of the municipal obligation.
Because coverage under the MBIA Corp. policies terminates upon sale of
municipal obligations from the Fund's portfolio, such insurance does not have
an effect on the resale value of the covered municipal obligation. Therefore,
it is the intention of the Minnesota Fund to retain any insured municipal
obligations that are in default or in significant risk of default, and to
place a value on the insurance that will be equal to the difference between
the market value of the defaulted obligation and the market value of similar
obligations that are not in default. Because of this policy, Insight may be
unable to manage the Minnesota Fund's portfolio to the extent that it holds
defaulted obligations, which may limit its ability in certain circumstances to
purchase other municipal obligations.
MBIA Corp.
MBIA Corp. is the principal operating subsidiary of MBIA Inc., a New
York Stock Exchange listed company. MBIA Inc. is not obligated to pay the
debts of or claims against MBIA Corp. MBIA Corp. is a limited liability
corporation rather than a several liability association. MBIA Corp. is
domiciled in the State of New York and licensed to do business in all 50
states, the District of Columbia and the Commonwealth of Puerto Rico.
As of December 31, 1994, MBIA Corp. had admitted assets of $3.4 billion
(audited), total liabilities of $2.3 billion (audited), and total capital and
surplus of $1.1 billion (audited) determined in accordance with statutory
accounting practices prescribed or permitted by insurance regulatory
authorities. As of June 30, 1995, MBIA Corp. had admitted assets of $3.6
billion (unaudited), total liabilities of $2.4 billion (unaudited), and total
capital and surplus of $1.2 billion (unaudited) determined in accordance with
statutory accounting practices prescribed or permitted by insurance regulatory
authorities. Copies of MBIA Corp.'s year end financial statements prepared in
accordance with statutory accounting practices are available from MBIA Corp.
The address of MBIA Corp. is 113 King Street, Armonk, New York 10504.
Moody's rates all bond issues insured by MBIA Corp. "Aaa" and short-term
loans "MIG-1," both designated to be of the highest quality.
S&P rates all new issues insured by MBIA Corp. "AAA" Prime Grade.
The Moody's rating of MBIA Corp. should be evaluated independently of
S&P's rating of MBIA Corp. No application has been made to any other rating
agency in order to obtain additional ratings on the municipal obligations.
The ratings reflect the respective rating agency's current assessment of the
creditworthiness of MBIA Corp. and its ability to pay claims on its policies
of insurance. Any further explanation as to the significance of the above
ratings may be obtained only from the applicable rating agency.
<PAGE>
The above ratings are not recommendations to buy, sell or hold the
municipal obligations, and such ratings may be subject to revision or
withdrawal at any time by the rating agencies. Any downward revision or
withdrawal of either or both ratings may have an adverse effect on the market
price of the municipal obligations.
SPECIAL FACTORS AFFECTING THE MINNESOTA FUND
As described herein, except during temporary defensive periods, the
Minnesota Fund will invest substantially all of its assets in Minnesota
municipal obligations. The Minnesota Fund is therefore susceptible to
political, economic or regulatory factors affecting issuers of Minnesota
municipal obligations. The following information summarizes the complex
factors affecting the financial situation in Minnesota. This information is
derived from sources that are generally available to investors and is based in
part on information obtained from various state and local agencies in
Minnesota. It should be noted that the creditworthiness of obligations issued
by local Minnesota issuers may be unrelated to the creditworthiness of
obligations issued by the State of Minnesota, and that there is no obligation
on the part of the State to make payment on such local obligations in the
event of default.
Effect of Limitations on Ability to Pay Bonds
There are no constitutional or statutory provisions which would impair
the ability of Minnesota municipalities to meet their bond obligations if the
bonds have been properly issued.
Minnesota's Economy
The State of Minnesota relies heavily on a progressive individual income
tax and a retail sales tax for revenue, which results in a fiscal system that
is sensitive to economic conditions. In 1994, the structure of the State's
economy closely paralleled the structure of the United State's economy as a
whole. State employment in ten major sectors was distributed in approximately
the same proportions as national employment. In all sectors, the share of
total employment was within 2 percentage points of the national employment
share.
During the period from 1980 to 1990, overall employment growth in
Minnesota lagged behind national growth; total employment increased 17.9% in
Minnesota while increasing 20.1% nationally. Most of Minnesota's relatively
slower growth during this period is associated with declining agricultural
employment and with the two recessions in the United States economy occurring
in the early 1980s, which were more severe in Minnesota than nationwide.
Minnesota non-farm employment growth generally kept pace with that of the
nation after the end of the 1981-82 recession. In the period 1990 to 1994,
non-farm employment grew 8.5 percent compared to 4.2 percent nationwide.
Employment data indicate that the recession that begin in July 1990 was less
severe in Minnesota than in the national economy and that Minnesota's
recovery has been more rapid than the nation's.
Since 1980, Minnesota per capita personal income has been within three
percentage points of national per capita personal income. Minnesota per
capita income has generally remained above the national average during this
period in spite of the early 1980s recessions and some difficult years in
agriculture. In 1994, Minnesota per capita income was 103.0% of the national
average. During 1993-94, personal income in Minnesota grew more rapidly than
the United States average, with a growth rate of 8.04% in Minnesota as
compared to a United States average of 5.89%.
Minnesota's unemployment rate was generally less than the national
average during 1993 and 1994, averaging 4.0% in 1994 as compared to the
national average of 6.1%. This trend continued through May of 1995. A major
continuing trend for Minnesota, as for the nation, is the large employment
gain in the service industries. In 1993, almost all private sector jobs added
had been in services and in finance, insurance and real estate. Accompanying
this was a decline in jobs in construction and mining.
<PAGE>
Minnesota resident population grew from 4,085,000 in 1980 to 4,387,000
in 1990 or, at an average annual compound rate of .7 percent. In comparison,
U.S. population grew at an annual compound rate of .9 percent during this
period. Minnesota population is currently forecast to grow at an annual
compound rate of .6 percent between 1990 and 2000.
Manufacturing has proven to be a strong sector, with Minnesota
employment growth in this area outperforming its U.S. counterpart in both the
1980-1990 and 1990-1993 periods. Minnesota's manufacturing industries
accounted for 17.4 percent of the State's employment mix in 1993. In the
durable goods industries, the State's employment in 1994 was highly
concentrated in the industrial machinery, instrument and miscellaneous
categories. Of particular importance is the industrial machinery category in
which 32.6% of the State's durable goods employment was concentrated in 1994,
as compared to 19.0% for the United States as a whole. The emphasis is partly
explained by the location in the State of Unisys, IBM, Cray Research, and
other computer equipment manufacturers which are included in the industrial
machinery classification.
The importance of the State's rich resource base for overall employment
is apparent in the employment mix in non-durable goods industries. In 1994,
29.0% of the State's non-durable goods employment was concentrated in food and
kindred industries, and 18.6% in paper and allied industries. This compares
to 21.4% and 8.8%, respectively, for comparable sectors in the national
economy. Both of these rely heavily on renewable resources in the State.
Over half of the State's acreage is devoted to agricultural purposes, and
nearly one-third to forestry. Printing and publishing is also relatively more
important in Minnesota than in the U.S.
The State is situated in the midst of the family farm belt. Although a
decline in jobs in agriculture is forecasted due to technological improvements
and the trend away from small family farms, in 1993 Minnesota ranked seventh
among all states in total cash receipts derived from agricultural products and
seventh among all states in percentage of income derived from farming. In
order of receipts, the six major agricultural products in 1993 were dairy,
corn, soybeans, cattle and calves, hogs and wheat.
Minnesota ranks seventh among all states in agricultural exports. The
State's major agricultural commodities exported in 1993, were in order of
value, feed grains and products, soybeans and products, wheat and wheat
products, live animals and meat, vegetables and feed and fodder. The average
Minnesota farm had gross farm income of $81,671 in 1993; however, expenses
used up $79,457 of the income leaving the average farm net income in 1993 at
$2,214, compared to the 1992 average farm net income of $17,352.
Mining is currently a less significant factor in the state economy than
it once was. Mining employment, primarily in the iron ore or taconite
industry, dropped from 17.3 thousand in 1979 to 7.6 thousand in 1994. It is
not expected that mining employment will return to 1979 levels. However,
Minnesota retains vast quantities of taconite as well as copper, nickel,
cobalt, and peat, which may be utilized in the future.
The fastest growing sector of the economy in Minnesota and the rest of
the country is the service sector. Business services employment is projected
to increase by 23% from 1989 to 1996, and health care services (exclusive of
hospitals and nursing homes) is projected to grow by 18%. Minnesota's service
industries accounted for 26.4% of 1993 non-farm employment.
In 1993, 29 Minnesota based public companies and 9 private companies
reported revenues of $600 million or more. These companies are involved in a
varied group of industries including agricultural and industrial commodities,
manufacturing, food and kindred products and services.
There can be no assurance that Minnesota's economy and fiscal condition
will not materially change in the future or that future difficulties will not
occur. Economic difficulties and the resultant impact on State and local
government finances may adversely affect the market value of obligations in
the portfolio of the Fund or the ability of respective obligors to make timely
payment of the principal and interest on such obligations.
<PAGE>
Risk Factors Relating to Minnesota Bonds
The State of Minnesota's constitutionally prescribed fiscal period is a
biennium, and the State operates on a biennial budget basis. Legislative
appropriations for each biennium are prepared and adopted during the final
legislative session of the immediately preceding biennium. Prior to each
fiscal year of a biennium, the State's Department of Finance allots a portion
of the applicable biennial appropriation to each agency or other entity for
which an appropriation has been made. An agency or other entity may not
expend monies in excess of its allotment. If revenues are insufficient to
balance total available resources and expenditures, the State's Commission of
Finance, with the approval of the Governor, is required to reduce allotments
to the extent necessary to balance expenditures and forecast available
resources for the then current biennium. The Governor may prefer legislative
action when a large reduction in expenditures appears necessary, and if the
State's legislature is not in session, the Governor is empowered to convene a
special session.
In the early 1980's the State of Minnesota experienced financial
difficulties due to a downturn in the State's economy resulting from the
national recession. As a consequence, the State's revenues were significantly
lower than anticipated in the July 1, 1979 to June 30, 1981 biennium and the
July 1, 1981 to June 30, 1983 biennium. In response to revenue shortfalls,
the legislature broadened and increased the State sales tax, increased income
taxes (by increasing rates and eliminating deductions) and reduced
appropriations and deferred payments of State aid, including appropriations
for and aids to local governmental units. The State's fiscal problems
affected other governmental units within the State, such as local government,
school districts and state agencies, which, in varying degrees, also faced
cash flow difficulties. In certain cases, revenues of local governmental
units and agencies were reduced by the recession. Because of the State's
fiscal problems, Standard & Poor's Corporation reduced its rating on the
State's outstanding general obligation bonds from AAA to AA+ in August 1981
and to AA in March 1982. Moody's Investors Service, Inc. lowered its rating
on the State's outstanding general obligation bonds from Aaa to Aa in April
1982.
In 1986, 1987, 1991, 1992 and 1993, legislation was required to
eliminate projected budget deficits by raising additional revenue, reducing
expenditures, including aids to political subdivisions and higher education,
reducing the State's budget reserve (cash flow account), imposing a sales tax
on purchases by local governmental units, and making other budgetary
adjustments. In 1995, the Minnesota Legislature separated the budget reserve
and cash flow account into two separate accounts. The cash flow account was
established for the purpose of providing sufficient cash balances to cover
monthly revenue and expenditure imbalance. The cash flow account is set for
the current biennium, ending June 30, 1997, at $350 million. The budget
reserve was established for the purpose of cushioning the State from an
economic downturn, and its balance is set for the current biennium at $204
million. Total projected expenditures and transfers for the biennium are
$18.22 billion. The projections generally do not include increases for
inflation or operating costs, except where Minnesota law requires them.
The Minnesota Supreme Court held on April 1, 1994 that numerous banks
are entitled to refunds of Minnesota bank excise taxes paid for tax years 1979
through 1983, on the grounds that interest on federal obligations was
unlawfully included in the computation of the tax for such years. The trial
court has been directed to calculate the amounts to be refunded. The taxes
and interest are estimated to be in excess of $235 million. The State will be
permitted to pay the refunds over a four-year period. On December 12, 1994
the U.S. Supreme Court denied the State's Petition to review the decision of
the Minnesota Supreme Court. The 1995 Minnesota Legislature authorized the
State Commissioner of Finance to issue up to $400 million of State revenue
bonds to pay for the judgment and the related obligations. The State of
Minnesota also is a party to a variety of other civil actions which could
adversely affect the State's General Fund.
State grants and aids represent a large percentage of the total revenues
of cities, towns, counties and school districts in Minnesota. Even with
respect to Bonds that are revenue obligations of the issuer and not general
obligations of the State, there can be no assurance that fiscal problems of
the State will not adversely affect the market value or marketability of the
Bonds or the ability of the respective obligors to pay interest on and
principal of the Bonds.
<PAGE>
The 1995 Minnesota Legislature considered but did not enact legislation
that would include in Minnesota taxable income of individuals, estates and
trusts the interest income derived from obligations of the State of Minnesota
or its subdivisions that are otherwise exempt from federal income tax to the
extent the interest income was derived from obligations issued, sold or
acquired after July 1, 1995. The proposed legislation was partially in
response to a 1994 Ohio Supreme Court case which held that an Ohio law
subjecting the interest derived from obligations issued by non-Ohio
governmental entities to tax while exempting interest on bonds issued by Ohio
governmental entities did not violate the Commerce Clause of the United States
Constitution. Despite the fact that the Ohio law was upheld, the Ohio case
caused concern that if a similar Minnesota exemption were held to be
unconstitutional, the State of Minnesota would be subject to retroactive
income tax refunds. The 1995 Minnesota Legislature did enact a provision
stating that if a court determines the exemption of Minnesota bond interest
discriminates against interstate commerce, the State of Minnesota would remedy
the discrimination by adding interest on obligations of Minnesota governmental
units to federal taxable income, beginning in the year in which such a court
decision became final.
PORTFOLIO TRANSACTIONS
As provided in the investment advisory agreement with respect to the
Funds, Insight makes investment decisions and decisions as to the execution of
portfolio transactions for the Funds, subject to the general supervision of
the Board of Directors of Great Hall. At times, investment decisions may be
made to purchase or sell the same investment security for more than one of the
portfolios that comprise Great Hall, in which case the transactions will be
allocated as to amount and price in a manner considered equitable to each
portfolio. In some cases this procedure may possibly have a detrimental
effect on the price or volume of the security as far as certain funds are
concerned. On the other hand, the ability of the Funds to participate in
volume transactions may produce better executions for these funds in some
cases.
Under the 1940 Act, persons affiliated with Great Hall are prohibited
from dealing with the Funds as a principal in the purchase and sale of
investments unless an order allowing such transactions is obtained from the
SEC. Since over-the-counter transactions are usually principal transactions,
affiliated persons of Great Hall may not serve as a dealer in connection with
such transfers or commitments. The 1940 Act also prohibits the Funds from
purchasing a security being publicly underwritten from a syndicate in which
any affiliated person is a principal underwriter except in accordance with
certain limitations. Furthermore, the Funds may not use any affiliated person
as a broker or dealer in executing portfolio transactions without complying
with the limitations imposed by the rules of the SEC. Dain Bosworth
Incorporated and Rauscher Pierce Refsnes, Inc., among others, are affiliated
persons of the Funds by direct or indirect ownership interest in Insight.
Most purchase or sale transactions with respect to the Funds are with
the issuer or an underwriter or with major dealers of securities acting as
principals. Such transactions are normally on a net basis and generally do
not involve payment of brokerage commissions. However, the cost of securities
purchased from an underwriter normally includes a commission paid by the
issuer to the underwriter. Purchases or sales from or to dealers will
normally reflect the spread between bid and ask prices. During the fiscal
years ended July 31, 1993, 1994 and 1995, no brokerage commissions were paid
by either Fund.
In placing orders for securities transactions, the primary criterion for
selection of a broker-dealer is the ability of the broker-dealer, in the
opinion of Insight, to secure prompt execution of the transactions at the most
favorable net price, considering the state of the market at the time.
Frequently, Insight selects a broker-dealer to effect a particular transaction
without contacting all broker-dealers who might be able to effect such
transaction, because of the volatility of the market and the desire to accept
a particular price for a security because the price offered by the broker-
dealer meets a Fund's guidelines for profit, yield, or both.
When consistent with the objectives of prompt execution and favorable
net price, orders may be placed with broker-dealers who furnish investment
research or services to Insight. Such research or services include advice as
to the value of securities; the advisability of investing in, purchasing or
selling securities; and the availability of securities, or purchasers or
<PAGE>
sellers of securities; as well as analyses and reports concerning issues,
industries, securities, economic factors and trends, portfolio strategy and
the performance of accounts. This allows Insight to supplement its own
investment research activities and enables Insight to obtain the views and
information of individuals and research statistics of many different
securities firms prior to making investment decisions for the Funds. To the
extent portfolio transactions are effected with broker-dealers who furnish
research services to Insight, Insight receives a benefit, not capable of
evaluation in dollar amounts, without providing any direct monetary benefit to
the Funds from these transactions. Insight believes that most research
services obtained by it generally benefit several or all of the investment
companies and private accounts that it manages, as opposed to solely
benefiting one specific managed fund or account.
Portfolio Turnover
The portfolio turnover rates for each Fund are set forth in the
Prospectus under "Financial Highlights."
REDUCED SALES CHARGES
As described under "How to Invest" in the Prospectus, the applicable
sales charge may be reduced or waived on certain purchases. Such sales charge
variations are offered in order to pass on to qualifying investors the lower
costs of marketing to such investors and in recognition of the economies of
scale involved in large purchases. In order for any of the following
privileges to be made available, you must notify Dain Bosworth Incorporated or
Rauscher Pierce Refsnes, Inc. (the "Co-Distributors") of the total holdings in
a Fund and other applicable Funds at the time each order is placed.
Combined Purchase Privilege
The table of reduced sales charges for larger-sized investments
contained under "How to Invest" in the Prospectus is applicable to purchases
of $100,000 or more of National Fund or Minnesota Fund if such purchases are
made at any one time by any "person." A "person" includes: (a) an individual,
his or her spouse and their children under the age of 21 purchasing securities
for his, her or their own account; (b) a trustee or other fiduciary purchasing
for a single trust estate or single fiduciary account; or (c) any other
organized group of persons, whether incorporated or not, provided the
organization has been in existence for at least six months and has some
purpose other than the purchase of redeemable securities of a registered
investment company at a discount.
Cumulative Quantity Discount
A person (as defined above) may also add the value (at the then current
offering price on the date of the subsequent additional purchase) of his
existing shares of National Fund and Minnesota Fund to his investment in
additional shares of such Funds when determining whether a reduced sales
charge applies.
Letter of Intent
Investors may qualify for reduced sales charges by means of a written
Letter of Intent, which expresses the investor's intention to invest at least
$100,000 in the Funds (including certain credits, as described below) within a
13-month period. Investors electing to take advantage of the Letter of Intent
should contact their investment executive and complete the applicable portion
of the Account Authorization Form that accompanies the Funds' prospectus. The
Account Authorization Form should be read carefully prior to its execution. A
Letter of Intent may include purchases of Fund shares made not more than 90
days prior to the date that a Letter of Intent is signed. The 13-month period
will run from the date of the earliest purchase to be included.
Sales charges applicable to all amounts invested under the Letter of
Intent are computed as if the aggregate amount intended to be invested had
been invested immediately. If such aggregate amount is not actually invested,
the difference in the sales charge actually paid and the sales charge payable
had the Letter of Intent not been in effect is due from the investor.
<PAGE>
However, for purchases actually made within the 13-month period, the sales
charge applicable will not be higher than that which would have applied
(including accumulations) had the Letter of Intent been for the amount
actually invested. If the goal under the Letter of Intent is exceeded in an
amount that qualifies for a lower sales charge, a price adjustment will be
made by refunding to the investor the amount of excess sales commissions, if
any, paid during the 13-month period.
The Letter of Intent does not constitute a binding commitment by the
investor to purchase, or by National Fund or Minnesota Fund to sell,
additional shares and may be terminated at any time. The minimum initial
investment under a Letter of Intent is 5% of the total amount indicated in the
Letter. Shares purchased with the first 5% of such amount will be held in
escrow to secure payment of the higher sales charge applicable to the shares
actually purchased if the full amount indicated is not purchased. When the
full amount indicated has been purchased, the escrow will be released.
For purposes of determining whether any contingent deferred sales charge
is applicable to redemptions of shares initially purchased without a sales
load pursuant to a Letter of Intent, shares will be deemed to have been
purchased as of the date on which the investment was actually made, and shares
will be redeemed in the order purchased.
REINVESTMENT PRIVILEGE
If you redeem all of your shares in either the National Fund or the
Minnesota Fund, you may reinvest all or part of the proceeds of such
redemption in additional shares of such Funds without paying any sales charge
if such reinvestment is effected within 60 days after the redemption and you
are exercising the reinvestment privilege. If you use the reinvestment
privilege following a redemption that resulted in a loss, some or all of the
loss will not be allowed as a tax deduction, depending on the amount
reinvested.
EXCHANGE PRIVILEGE
An Exchange Privilege among the portfolios comprising Great Hall is
available to shareholders of each portfolio. Shares of The Great Hall money
market funds (the "Money Market Funds") are sold to the public without a sales
charge. Shares of National Fund and Minnesota Fund (the "Load Funds") are
sold to the public with a sales charge. When shares of a Money Market Fund
are exchanged for shares of a Load Fund, the applicable sales charge will be
deducted. Shares of either Load Fund may be exchanged for shares of the other
Load Fund without a sales charge. If shares have been purchased by check and
are being exchanged, the purchase check must be collected by the Transfer
Agent before the exchange can be made, which may take up to 15 days or more
after investment.
The shares of the Fund being exchanged must meet the minimum initial
investment requirement which is currently $1,000 for all Funds.
An exchange request to redeem shares of a Load Fund for shares of a
Money Market Fund, or shares of one Load Fund for shares of the other Load
Fund, will be effective on the fifth business day following the date of the
net asset value next determined for such Fund after receipt of such request.
A request to exchange shares of a Money Market Fund for shares of a Load Fund
will be effective on the next business day following the date of the net asset
value next determined for such Fund after receipt of such request.
An exchange pursuant to the Exchange Privilege is, for federal income
tax purposes, a sale on which you may realize a taxable gain or loss. See
"Taxes." The Exchange Privilege is available only in states where legally
allowed, and may be modified or terminated at any time. Any Fund may limit or
discontinue the exchange of its shares.
<PAGE>
MANAGEMENT AND DISTRIBUTION AGREEMENTS
Investment Adviser; Investment Advisory Agreement
Insight serves as each Fund's investment adviser. Insight is a division
of IFG Asset Management Services, Inc. ("AMS"), a wholly-owned subsidiary of
Inter-Regional Financial Group, Inc. ("IFG"). Each Co-Distributor likewise is
a wholly-owned subsidiary of IFG.
Pursuant to an investment advisory agreement (the "Advisory Agreement"),
Insight performs and bears the cost of research, statistical analysis and
continuous supervision of the investment portfolio of each Fund and furnishes
office facilities and certain clerical and administrative services to the
Funds. In addition, to the extent not covered by the Funds' Rule 12b-1 Plan,
Insight may bear the cost of promotional expenses, including the cost of
printing and distributing prospectuses utilized for promotional purposes.
Other expenses are borne by whichever Fund incurs the expense and such
expenses include, but are not limited to, taxes, interest, brokerage fees and
commissions, and costs and expenses associated with the following matters and
services: registration and qualification of Great Hall, the Funds and their
shares with the SEC and the various states; services of custodians, transfer
agent, dividend disbursing agent, accounting services agents, shareholder
services agents, independent auditors and outside legal counsel; maintenance
of corporate existence; preparation, printing and distribution of prospectuses
to existing Fund shareholders; services of Great Hall directors who are not
employees of Insight or of the Co-Distributors or any of their affiliates;
directors' and shareholders' meetings, including the printing and mailing of
proxy materials; insurance premiums for fidelity, portfolio and other
coverage; issuance and sale of Fund shares (to the extent not borne by the Co-
Distributors under their agreement with Great Hall); redemption of Fund
shares; printing and mailing of stock certificates representing shares of the
Funds; association membership dues; preparation, printing and mailing of
shareholder reports; and portfolio pricing services, if any. Expenses borne
by Great Hall and attributable to only one Fund will be allocated to that
Fund; expenses that are not specifically allocable will be allocated to each
Fund in a manner and on a basis determined in good faith by the Board of
Directors of Great Hall, including a majority of the Directors who are not
"interested" persons of Great Hall or Insight, to be fair and equitable.
Under the Advisory Agreement, Insight receives a monthly advisory fee based on
the average daily net assets of each Fund. Each Fund pays a fee at an annual
rate of .50% of average daily net assets.
The Advisory Agreement continues in effect from year to year, if
specifically approved at least annually by a vote cast in person at a meeting
called for such purpose by a majority of the Directors of Great Hall, and a
majority of the Directors who are not "interested persons" (as defined in the
1940 Act) of Great Hall or Insight ("Independent Directors"). The Advisory
Agreement may be terminated by either party thereto, by the Independent
Directors or by a vote of the holders of a majority of the outstanding
securities of Great Hall, at any time, without penalty, upon 60 days' written
notice, and automatically terminates in the event of an assignment.
Termination will not affect the right of Insight to receive payment of any
unpaid balance of the compensation earned prior to termination.
The Funds commenced operations on June 5, 1992 upon the transfer of
substantially all of the assets held by Carnegie's National Tax Exempt Fund
and Minnesota Insured Fund. The Carnegie funds (like the Funds) operated on a
July 31 fiscal year end. For the fiscal years ended July 31, 1995, 1994 and
1993, National Fund paid advisory fees of $342,193, $353,208 and $248,836,
respectively, and Minnesota Fund paid advisory fees of $153,568, $143,771 and
$128,229, respectively. During such years, Insight waived advisory fees of
$74,000, $38,300 and $41,784, respectively, for Minnesota Fund pursuant to
expense waivers then in effect.
The Co-Distributors
Shares of the National Fund and the Minnesota Fund are offered
continuously. Both Co-Distributors serve as distributors of the National
Fund; however, only Dain Bosworth Incorporated serves as a distributor of the
Minnesota Fund. Under the terms of the Co-Distributor Agreement between the
Co-Distributors and the Funds, the Co-Distributors, as agent of Great Hall,
accept orders for the purchase and redemptions of shares of such Funds and, as
<PAGE>
compensation therefor, receive the amount of the sales charge described in the
Prospectus. The Co-Distributors are not obligated to sell any certain number
of shares of a Fund. The Co-Distributors may enter into Dealer's Agreements
with other dealers, pursuant to which such dealers also sell shares of the
Funds. The Distribution Agreements permit the Co-Distributors to re-allow
designated amounts of the sales charge, as shown in the Prospectus, to dealers
entering into dealer agreements with the Co-Distributors; accordingly, such
dealers may be deemed to be underwriters of the Funds, as that term is defined
in the 1933 Act. The Funds have agreed to indemnify the Co-Distributors and
their affiliates, to the extent permitted by applicable law, against certain
liabilities under the 1933 Act.
Distribution Plan
Rule 12b-1(b) under the 1940 Act provides that any payments made by the
Funds in connection with financing the distribution of their shares may only
be made pursuant to a written plan describing all aspects of the proposed
financing of distribution, and also requires that all agreements with any
person relating to the implementation of the plan must be in writing. Because
some of the payments described below to be made by the Funds are distribution
expenses within the meaning of Rule 12b-1, Great Hall has entered into a Co-
Distributor Agreement with the Co-Distributors pursuant to a Distribution Plan
adopted in accordance with such Rule.
In addition, Rule 12b-1(b)(1) requires that such plan be approved by a
majority of a Fund's outstanding shares, and Rule 12b-1(b)(2) requires that
such plan, together with any related agreements, be approved by a vote of the
Board of Directors and of the Directors who are not interested persons of
Great Hall and who have no direct or indirect interest in the operation of the
plan or in the agreements related to the plan, cast in person at a meeting
called for the purpose of voting on such plan or agreement. Rule 12b-1(b)(3)
requires that the plan or agreement provide, in substance:
* that it shall continue in effect for a period of more than one year
from the date of its execution or adoption only so long as such
continuance is specifically approved at least annually in the manner
described in paragraph (b)(2) of Rule 12b-1;
* that any person authorized to direct the disposition of moneys paid
or payable by Great Hall pursuant to the plan or any related
agreement shall provide to Great Hall's Board of Directors, and the
directors shall review, at least quarterly, a written report of the
amounts so expended and the purposes for which such expenditures were
made; and
* in the case of a plan, that it may be terminated at any time by a
vote of a majority of the members of the Board of Directors of Great
Hall who are not interested persons of Great Hall and who have no
direct or indirect financial interest in the operation of the plan or
in any agreements related to the plan or by a vote of a majority of
the outstanding voting securities of a Fund.
Rule 12b-1(b)(4) requires that such a plan may not be amended to
increase materially the amount to be spent for distribution without
shareholder approval and that all material amendments of the plan must be
approved in the manner described in paragraph (b)(2) of Rule 12b-1.
Rule 12b-1(c) provides that Great Hall may rely upon Rule 12b-1(b) only
if the selection and nomination of Great Hall's disinterested directors are
committed to the discretion of such disinterested directors. Rule 12b-1(e)
provides that Great Hall may implement or continue a plan pursuant to Rule
12b-1(b) only if the directors who vote to approve such implementation or
continuation conclude, in the exercise of reasonable business judgment and in
light of their fiduciary duties under state law, and under Sections 36(a) and
(b) of the 1940 Act, that there is a reasonable likelihood that the plan will
benefit Great Hall and its shareholders. The Board of Directors has concluded
that there is a reasonable likelihood that the Distribution Plan will benefit
Great Hall and its shareholders.
<PAGE>
For the fiscal year ended July 31, 1993, the Co-Distributors earned fees
of $37,430 and $19,140 from the National Fund and Minnesota Fund, respectively
(net of voluntary fee waivers of $112,125 and $57,797, respectively). For
the fiscal year ended July 31, 1994, the Co-Distributors earned fees of
$140,340 and $72,789 from the National Fund and Minnesota Fund, respectively
(net of voluntary fee waivers of $71,584 and $36,453, respectively). For the
fiscal year ended July 31, 1995, the Co-Distributors earned fees of $126,890
and $59,184 from the National Fund and Minnesota Fund, respectively (net of
voluntary fee waivers of $78,426 and $32,957, respectively). Currently, the
Co-Distributors are permitted to use such fees only in connection with the
provision of shareholder services (including, but not limited to, responding
to shareholder inquiries and providing information on their investments) by
the Co-Distributors and dealers who enter into selling agreements with the Co-
Distributors.
DETERMINATION OF NET ASSET VALUE
The net asset value per share of each Fund is calculated separately for
each Fund. The assets and liabilities of each Fund are determined in
accordance with generally accepted accounting principles and the applicable
rules and regulations of the SEC. Assets and liabilities attributable to a
specific Fund are allocated to that Fund. Assets and liabilities not readily
identifiable to a Fund will be allocated among the Funds in a manner and on a
basis determined in good faith pursuant to procedures established by the Board
of Directors, including a majority of the Directors who are not "interested
persons" of Great Hall or Insight, to be fair and equitable.
The portfolio securities in which each Fund invests fluctuate in value,
and hence the net asset value per share (and therefore, the public offering
price) of each Fund also fluctuates. On July 31, 1995, the net asset value
per share and the maximum public offering price per share for the Funds were
calculated as follows:
National Fund
Net Assets ($66,357,252)
------------------------------------ = Net Asset Value Per Share
Shares Outstanding (6,521,963) ($10.17)
Maximum Public Offering Price Per Share = $10.17 + 4.50% of Public
Offering Price = $10.65
Minnesota Fund
Net Assets ($28,634,735)
------------------------------------ = Net Asset Value Per Share
Shares Outstanding (2,889,958) ($9.91)
Maximum Public Offering Price Per Share = $9.91 + 4.50% of Public
Offering Price = $10.38
CALCULATION OF PERFORMANCE DATA
Advertisements and other sales literature for the Funds may refer to
"yield," "tax equivalent yield," "average annual total return" or "cumulative
total return." Such amounts are calculated as follows:
Yield is computed by dividing the net investment income per share (as
defined under SEC rules and regulations) earned during the computation period
by the maximum offering price per share on the last day of the period,
according to the following formula:
YIELD = 2[(a-b + 1)^6 - 1]
---
cd
<PAGE>
Where: a = dividends and interest earned during the period;
b = expenses accrued for the period (net of
reimbursements);
c = the average daily number of shares outstanding
during the period that were entitled to receive
dividends; and
d = the maximum offering price per share on the last
day of the period.
National Fund's yield for the 30-day period ended July 31, 1995 was
5.86%. For the same period, Minnesota Fund's yield was 4.45%. Absent
voluntary fee waivers during this period, National Fund's 30-day yield would
have been 5.75%, and Minnesota Fund's 30-day yield would have been 4.09%.
Taxable equivalent yield is computed by dividing that portion of the
yield of a Fund (as computed pursuant to the above paragraph) which is tax-
exempt by one minus a stated income tax rate and adding the product to that
portion, if any, of the yield of the Fund that is not tax-exempt.
The taxable equivalent yields for National Fund for the 30-day period
ended July 31, 1995 were 8.14%, 8.49%, 9.16% and 9.70% assuming a federal
marginal income tax rate of 28%, 31%, 36% and 39.6%, respectively. For the
same period, the taxable equivalent yields for Minnesota Fund were 6.75%,
7.05%, 7.59% and 8.05% assuming a combined federal/Minnesota marginal income
tax rate of 34.1%, 36.9%, 41.4% and 44.7%, respectively. Absent voluntary fee
waivers during this period, National Fund's taxable equivalent 30-day yields
would have been 7.99%, 8.33%, 8.98 and 9.52%, respectively, and Minnesota
Fund's taxable equivalent 30-day yields would have been 6.21%, 6.48%, 6.98%
and 7.40%, respectively.
Average annual total return figures are computed by finding the average
annual compounded rates of return over the periods indicated in the
advertisement that would equate the initial amount invested to the ending
redeemable value, according to the following formula:
P(1+T)n = ERV
Where: P = a hypothetical initial payment of $1,000;
T = average annual total return;
n = number of years; and
ERV = ending redeemable value at the end of the period of
a hypothetical $1,000 payment made at the beginning
of such period.
This calculation deducts the maximum sales charge from the initial
hypothetical $1,000 investment, assumes all dividends and capital gains
distributions are reinvested at net asset value on the appropriate
reinvestment dates as described in the Prospectus, and includes all recurring
fees, such as investment advisory and management fees, charged to all
shareholder accounts.
The average annual total returns on an investment in the National Fund
for the one year, five year and since inception (September 22, 1986) periods
ended July 31, 1995 were 2.34%, 7.19% and 7.48%, respectively. The average
annual total returns on an investment in the Minnesota Fund for the one year,
five year and since inception (March 5, 1986) periods ended July 31, 1995 were
2.18%, 6.11% and 6.52%, respectively.
Cumulative total return is computed by finding the cumulative compounded
rate of return over the period indicated in the advertisement that would
equate the initial amount invested to the ending redeemable value, according
to the following formula:
<PAGE>
ERV-P
CTR = ( ---------- )100
P
Where: CTR = cumulative total return;
ERV = ending redeemable value at the end of the period of
a hypothetical $1,000 payment made at the beginning
of such period; and
P = initial payment of $1,000.
This calculation deducts the maximum sales charge from the initial
hypothetical $1,000 investment, assumes all dividends and capital gain
distributions are reinvested at net asset value on the appropriate
reinvestment dates as described in the Prospectus, and includes all recurring
fees, such as investment advisory and management fees, charged as expenses to
all shareholder accounts.
The cumulative total return of National Fund from its inception
(September 22, 1986, including the operations of its predecessor) through
July 31, 1995 was 89.10%, and the cumulative total return of Minnesota Fund
from its inception (March 5, 1986, including the operations of its
predecessor) through July 31, 1995 was 79.36%.
DIRECTORS AND OFFICERS
Directors and officers of Great Hall, together with information as to
their principal occupations during the past five years, are set forth below.
Except as otherwise set forth below, the address of each officer and director
is the same as that of Great Hall - 60 South Sixth Street, Minneapolis,
Minnesota 55402.
Principal Occupations
During the Past Five Years and
Name and Address Position Other Affiliations
- ---------------- -------- ------------------------------
T. Geron ("Jerry") Bell Director President of the Minnesota
501 Chicago Avenue South Twins Baseball Club
Minneapolis, MN 55415 Incorporated since 1987.
Sandra J. Hale Director President of Enterprise
2308 West Lake of Management, Int'l. since 1991;
the Isles Pkwy. Minnesota Commissioner of
Minneapolis, MN 55402 Administration from 1983 to
1990.
Ron James* Director Vice-President - Minnesota of
150 South Fifth Street U.S. West Communications since
Suite 3300 1990; Vice President and
Minneapolis, MN 55402 General Manager-Large Business
Markets of U.S. West
Communications from 1987 to
1990; Director of Ceridian
Corporation since 1991;
Director of The St. Paul
Companies since 1993; Director
of Automotive Industries
Holding, Inc. since 1994.
<PAGE>
Principal Occupations
During the Past Five Years and
Name and Address Position Other Affiliations
- ---------------- -------- ------------------------------
Jay H. Wein Director Independent consultant since
12900 Whitewater Drive April 1995; Chairman of
Minnetonka, MN 55343 Information Advantage, Inc.
from 1992 to April 1995; Vice
Chairman of National
Designwear, Inc. (which filed
a petition for reorganization
under chapter 11 of Title 11
of the United States Code in
1992 and which currently is
inactive and in the process of
liquidation) since 1990;
Retired in August 1989 after
15 years as Office Managing
Partner of the Minneapolis/St.
Paul Office of Arthur Andersen
& Co.
J. Scott Spiker Chief President, Chief Executive
Executive Officer and Director of
Officer Insight and AMS since October
1994; Senior Vice President of
IFG since February 1994;
Senior Vice President and
Business Manager, Employee
Benefit Services, of Norwest
Corporation from 1990 through
January 1994; Product Manager,
Institutional Collective
Funds, of Norwest Corporation
from 1989 through January
1994.
Dennis T. Hippen Senior Senior Vice President and
Vice Senior Portfolio Manager of
President Insight since 1991; Director
and President of Insight Bond
Management, Inc. (Insight's
predecessor) from 1983 through
1991.
Raye C. Kanzenbach Vice Vice President and Senior
President Portfolio Manager of Insight;
prior to 1991, Director,
Senior Vice President and
Secretary of Insight Bond
Management, Inc. since 1983.
Julie K. Getchell Chief Vice President, Secretary,
Financial Treasurer and Chief Financial
Officer Officer of AMS; prior to 1991,
Vice President and Assistant
Controller of Dain Bosworth
Incorporated since 1985.
Matthew L. Thompson Secretary Partner of Faegre & Benson
Professional Limited Liability
Partnership, Great Hall's
general counsel, since May
1995; Vice President,
Assistant Secretary and
Corporate/Fund Counsel of IFG
from January 1994 to May
1995; prior thereto, Partner
of Dorsey & Whitney since 1993
and Associate of Dorsey &
Whitney from 1985 through
1992.
<PAGE>
__________________________
* Mr. James may be deemed to be an "interested" Director because he is a
director of The St. Paul Companies, which owns a majority interest in a
registered broker-dealer.
The annual compensation of each Director is $6,000 plus $1,000 for each
meeting attended. No compensation is paid by Great Hall to its officers. The
following table sets forth for such period the aggregate compensation
(excluding expenses) paid by Great Hall to its directors during the fiscal
year ended July 31, 1995:
COMPENSATION TABLE
------------------
Pensions or Retirement
Aggregate Benefits Accrued
Compensation as part of
Name of Director from Great Hall Great Hall Expenses
---------------- --------------- -------------------
T. Geron (Jerry) Bell $12,000 None
Sandra J. Hale $12,000 None
Ron James $12,000 None
Jay H. Wein $12,000 None
Additional directors of AMS are as follows:
Name Other Positions
--------------------- --------------------------------
Irving Weiser Chairman, Chief Executive Officer and
President of IFG; Chairman and Chief
Executive Officer of Dain Bosworth Inc.
Jerry W. Hayes Chief Executive Officer of Regional
Operations Group, Inc., a subsidiary of
IFG
John C. Appel President and Chief Operating Officer
of Dain Bosworth Inc.
Louis C. Fornetti Executive Vice President, Chief
Financial Officer and Treasurer of IFG.
GENERAL INFORMATION
Great Hall maintains accounting records that specifically allocate
assets and liabilities on a series by series basis. The shares of each series
represent an undivided interest in the assets and liabilities specifically
allocated to that series. Creditors and other persons contracting with Great
Hall with respect to a series may look solely to the assets of that series to
satisfy claims against Great Hall.
All Fund shares are the same class and are freely transferable. Each
share has equal dividend rights and is entitled to one vote at all shareholder
meetings. Separate votes are taken by each series of Great Hall except to the
extent that the 1940 Act requires shares of all series to be voted in the
aggregate. Shares have non-cumulative voting rights, so that the holders of
more than 50% of the shares can, if they choose to do so, elect all the
directors of Great Hall, in which event the holders of the remaining shares
will be unable to elect any person as a director. Whenever the approval of a
majority of the outstanding shares of a series of Great Hall is required in
connection with shareholder approval of an investment advisory agreement,
changes in the investment objectives, policies or limitations of that series,
or changes in the distribution expense plan, a "majority" shall mean the vote
of the lesser of (a) 67% or more of the shares of such series present at a
meeting, if the holders of more than 50% of the outstanding shares of such
<PAGE>
series are present in person or by proxy; or (b) more than 50% of the
outstanding shares of such series. As of September 29, 1995, Juanita M. Daly,
1200 Rancho Cr., Las Vegas, Nevada 89107 beneficially owned approximately
6.13% of National Fund's issued and outstanding shares. To the best of Great
Hall's knowledge, no other shareholder beneficially owned 5% or more of either
Fund's outstanding shares as of the same date.
Great Hall is not required under Minnesota law to hold annual or
periodically scheduled regular meetings of shareholders, and does not intend
to hold such meetings. The Board of Directors may convene shareholder
meetings when it deems appropriate. In addition, if a regular meeting of
shareholders has not been held during the immediately preceding fifteen
months, a shareholder or shareholders holding three percent or more of the
voting shares of Great Hall may demand a regular meeting of shareholders by
written notice of demand given to the chief executive officer or the chief
financial officer of Great Hall. Within ninety days after receipt of the
demand, a regular meeting of shareholders must be held at the expense of Great
Hall. Irrespective of whether a regular meeting of shareholders has been held
during the immediately preceding fifteen months, in accordance with Section
16(c) of the 1940 Act, the Board of Directors of Great Hall shall promptly
call a meeting of shareholders for the purpose of voting upon the question of
removal of any director when requested in writing to do so by the record
holders of not less than 10% of the outstanding shares, and Great Hall will
assist in communications with other shareholders as required by the 1940 Act.
Under Minnesota law, the Board of Directors has overall responsibility
for managing Great Hall in good faith, in a manner reasonably believed to be
in the best interests of Great Hall, and with the care an ordinarily prudent
person in a like position would exercise in similar circumstances.
Under Minnesota law, directors owe Great Hall and its shareholders
certain fiduciary duties, including a duty of "loyalty" (to act in good faith
and in the best interests of Great Hall) and a duty of "care" (to act with the
care that a reasonably prudent person would exercise under similar
circumstances). Minnesota law authorizes corporations to eliminate the
personal monetary liability of directors to the corporation or its
shareholders for breach of the duty of "care." Directors of corporations
adopting such a limitation provision still owe the corporation this duty of
"care," but under most circumstances cannot be sued for monetary damages for
breaches of such duty. The Articles of Incorporation of Great Hall limit the
liability of directors to the fullest extent permitted by law.
The directors of Great Hall remain fully liable (including possibly for
monetary damages) for breaches of their duty of "loyalty," for self-dealing,
for bad faith and intentional misconduct, and for violations of the 1933 Act,
the Securities Act of 1934, and certain provisions of Minnesota corporation
law. Additionally, the 1940 Act prohibits limiting a director's liability for
willful misfeasance, bad faith, gross negligence, or reckless disregard of the
director's duties in the conduct of the director's office, and it is uncertain
whether and to what extent directors remain liable for monetary damages for
violations of the 1940 Act. The SEC staff has taken the position that
investment company directors remain liable for monetary damages under certain
circumstances.
Upon issuance and sale in accordance with the terms of the Fund's
Prospectus and Statement of Additional Information, each share of a Fund will
be fully paid and non-assessable. Shares have no preemptive, subscription or
conversion rights and are redeemable as set forth under "How To Redeem Shares"
in the Prospectus. In the event of the dissolution or liquidation of Great
Hall, the holders of the shares of any Fund are entitled to receive, as a
class, the underlying assets of such Fund available for distribution to
shareholders.
<PAGE>
COUNSEL AND AUDITORS
Faegre & Benson Professional Limited Liability Partnership, 2200 Norwest
Center, 90 South Seventh Street, Minneapolis, Minnesota 55402, serves as Great
Hall's general counsel. Lindquist & Vennum PLLP, 4200 IDS Center, 80 South
Eighth Street, Minneapolis, Minnesota 55402, serves as counsel to Great Hall's
disinterested directors.
KPMG Peat Marwick LLP, 90 South Seventh Street, 4200 Norwest Tower,
Minneapolis, Minnesota 55402, has been selected as the independent auditors of
Great Hall for its fiscal year ending July 31, 1996.
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
Great Hall Investment Funds, Inc.
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments in securities, of National Tax-Exempt
Fund and Minnesota Insured Tax-Exempt Fund (funds within Great Hall Investment
Funds, Inc.) as of July 31, 1995 and the related statements of operations for
the year then ended and the statements of changes in net assets for each of
the years in the two-year period ended July 31, 1995 and the financial
highlights for each of the years in the five-year period ended July 31, 1995.
These financial statements and the financial highlights are the responsibility
of the Funds' management. Our responsibility is to express an opinion on
these financial statements and the financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and the
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Investment securities held in custody are confirmed
to us by the custodian. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of
National Tax-Exempt Fund and Minnesota Tax-Exempt Fund at July 31, 1995, and
the results of their operations for the year then ended and the changes in
their net assets for each of the years in the two-year period ended July 31,
1995, and the financial highlights for each of the years in the five-year
period ended July 31, 1995, in conformity with generally accepted accounting
principles.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
September 1, 1995
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
July 31, 1995
Minnesota
National Insured
Tax-Exempt Tax-Exempt
Fund Fund
- ------------------------------------------------------------------------------
Assets:
Investments in securities at market value
(note 2), identified cost $65,651,440 and
$28,124,352 respectively.......................... $65,882,703 $28,067,543
Cash in bank on demand deposit..................... 58,500 30,572
Receivable for fund shares sold.................... 347 47,736
Accrued interest receivable........................ 1,138,758 574,279
- ------------------------------------------------------------------------------
Total assets....................................... 67,080,308 28,720,130
- ------------------------------------------------------------------------------
Liabilities:
Cash portion of dividends payable to shareholders.. 177,369 28,416
Payable for fund shares redeemed................... 450,147 19,553
Accrued investment advisory fee.................... 28,407 5,228
Accrued distribution fee........................... 25,179 11,403
Other accrued expenses............................. 41,954 20,795
- ------------------------------------------------------------------------------
Total liabilities.................................. 723,056 85,395
- ------------------------------------------------------------------------------
Net assets applicable to
outstanding capital stock........................ $66,357,252 $28,634,735
- ------------------------------------------------------------------------------
Represented by:
Capital stock - authorized 10 billion shares of
$.01 par value for each Fund, outstanding
6,521,963 and 2,889,958 shares, respectively...... $65,220 $28,900
Additional paid-in capital......................... 65,492,505 29,279,152
Accumulated net realized gains (losses) on
investments (note 2).............................. 568,264 (616,508)
Unrealized appreciation
(depreciation) of investments.................... 231,263 (56,809)
- ------------------------------------------------------------------------------
Total - representing net assets applicable to
outstanding capital stock........................ $66,357,252 $28,634,735
- ------------------------------------------------------------------------------
Net asset value per share
of outstanding capital stock..................... $10.17 $9.91
- ------------------------------------------------------------------------------
See accompanying notes to financial statements.
<PAGE>
STATEMENTS OF OPERATIONS
For the Year Ended July 31, 1995
Minnesota
National Insured
Tax-Exempt Tax-Exempt
Fund Fund
- ------------------------------------------------------------------------------
Income:
Interest.......................................... $4,957,707 $1,820,452
- ------------------------------------------------------------------------------
Expenses (note 5):
Investment advisory fee........................... 342,193 153,568
Distribution fee.................................. 205,316 92,141
Custodian, accounting and transfer agent fees..... 42,234 44,340
Reports to shareholders........................... 4,483 19,176
Directors' fees................................... 9,000 9,000
Audit and legal fees.............................. 1,916 23,114
Registration fees................................. -- 4,400
Insurance fees.................................... 10,067 9,000
Other expenses.................................... 3,751 1,249
- ------------------------------------------------------------------------------
Total expenses..................................... 618,960 355,988
Less expenses voluntarily
waived or absorbed by Advisor.................... (78,426) (106,957)
- ------------------------------------------------------------------------------
Total net expenses................................. 540,534 249,031
- ------------------------------------------------------------------------------
Investment income - net............................ 4,417,173 1,571,421
- ------------------------------------------------------------------------------
Realized and unrealized gains/(losses) on investments:
Net realized gain (loss) on investments (note 3).. 868,133 (616,795)
Net change in unrealized appreciation or
depreciation of investments...................... (592,387) 728,206
- ------------------------------------------------------------------------------
Net gain on investments............................ 275,746 111,411
- ------------------------------------------------------------------------------
Net increase in net
assets resulting from operations................. $4,692,919 $1,682,832
- ------------------------------------------------------------------------------
See accompanying notes to financial statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
National Minnesota Insured
Tax-Exempt Fund Tax-Exempt Fund
- ------------------------------------------------------------------------------
Year Year Year Year
Ended Ended Ended Ended
7/31/95 7/31/94 7/31/95 7/31/94
- ------------------------------------------------------------------------------
Operations:
Investment income - net... $4,417,173 $4,227,017 $1,571,421 $1,770,456
Net realized gain (loss)
on investments........... 868,133 38,318 (616,795) 677,302
Net change in unrealized
appreciation or depreci-
ation of investments..... (592,387) (2,652,084) 728,206 (2,645,221)
- -------------------------------------------------------------------------------
Net increase (decrease) in
net assets resulting from
operations............... 4,692,919 1,613,251 1,682,832 (197,463)
- -------------------------------------------------------------------------------
Distributions to shareholders from:
Investment income - net... (4,417,173) (4,227,017) (1,571,421) (1,770,456)
Accumulated net
realized gains........... (308,935) (118,925) (293,106) (747,780)
- ------------------------------------------------------------------------------
Total distributions
to shareholders......... (4,726,108) (4,345,942) (1,864,527) (2,518,236)
- ------------------------------------------------------------------------------
Capital share transactions (note 4):
Proceeds from sales
(note 5)................. 3,529,401 21,521,729 633,943 12,506,342
Shares issued for reinvest-
ment of distributions.... 2,501,190 2,385,802 1,145,781 1,620,838
Payment for shares
redeemed................. (11,812,598) (7,050,373) (10,071,324) (4,202,344)
- -------------------------------------------------------------------------------
Increase (decrease) in net
assets from capital share
transactions............. (5,782,007) 16,857,158 (8,291,600) 9,924,836
- ------------------------------------------------------------------------------
Total increase (decrease)
in net assets............. (5,815,196) 14,124,467 (8,473,295) 7,209,137
- ------------------------------------------------------------------------------
Net assets at beginning
of year................... 72,172,448 58,047,981 37,108,030 29,898,893
- -------------------------------------------------------------------------------
Net assets at end of year.. $66,357,252 $72,172,448 $28,634,735 $37,108,030
- ------------------------------------------------------------------------------
See accompanying notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Organization
Great Hall Investment Funds, Inc. (the Company) was incorporated on June
24, 1991 and is registered under the Investment Company Act of 1940 (as
amended) as an open-end management investment company and presently
includes a series of five funds, including National Tax-Exempt Fund and
Minnesota Insured Tax-Exempt Fund (the funds), which are classified as
non-diversified funds. The Company's articles of incorporation permit the
board of directors to create additional funds in the future.
2. Summary of Significant Accounting Policies
The significant accounting policies followed by the funds are as follows:
Investments in Securities
The values of fixed-income securities are provided by an independent
pricing service. When market quotations are not readily available,
securities are valued at fair value as determined in good faith by the
Board of Directors. Short-term securities are valued at amortized cost
which approximates market value.
Security transactions are accounted for on the date the securities are
purchased or sold. Realized gains and losses are calculated on the
identified cost basis. Interest income, including amortization of premium
and original issue discount, is accrued daily and is computed on a level
yield basis. For the Minnesota Insured Tax-Exempt Fund, portfolio
insurance expense is recognized over the premium period, and the cost of
secondary market insurance, if any, is capitalized to the cost basis of
the underlying security. For the year ended July 31, 1995 portfolio
insurance expense was $5,559.
The Minnesota Insured Tax-Exempt Fund concentrates its investments in a
single state and, therefore, may have more risk related to the economic
conditions of the respective state than a fund that has broader
geographical diversification.
Securities Purchased on a When-Issued Basis
Delivery and payment for securities which have been purchased on a
forward commitment or when-issued basis can take place a month or more
after the transaction date. During this period, such securities are
subject to market fluctuations and the fund maintains, in a segregated
account with its custodian, assets with a market value equal to the
amount of its purchase commitments.
Federal Taxes
The funds' policy is to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to shareholders. Therefore, no
income tax provision is required. Each fund within the Company will be
treated as a separate entity for federal income tax purposes. In
addition, on a calendar basis, each fund intends to distribute
substantially all of its taxable net investment income and realized
gains, if any, to avoid the payment of any federal excise taxes.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
2. Summary of Significant Accounting Policies (continued)
Net investment income and net realized gains (losses) may differ for
financial statement and tax purposes. The character of distributions
made during the year from net investment income or net realized gains
may differ from their ultimate characterization for federal income tax
purposes. Also, due to the timing of dividend distributions, the fiscal
year in which amounts are distributed may differ from the year that the
income or the realized gains (losses) were recorded by the funds.
For federal income tax purposes, capital loss carryovers were $616,795
for the Minnesota Insured Tax-Exempt Fund at July 31, 1995, which if not
offset by subsequent capital gains, will expire in 2003 and 2004. It is
unlikely the Board of Directors will authorize a distribution of any net
realized capital gains until the available capital loss carryovers have
been offset or expired.
Distributions to Shareholders
Distributions to shareholders from net investment income are declared
daily and payable monthly in cash or reinvested in additional shares.
Distributions from net realized gains, if any, will be made on an annual
basis for the funds.
3. Investment Security Transactions
For the year ended July 31, 1995, purchases of securities and proceeds
from sales, other than temporary investments in short-term securities,
aggregated $5,590,706 and $9,629,662 for National Tax-Exempt Fund and
$988,240 and $7,225,868 for Minnesota Insured Tax-Exempt Fund.
4. Capital Share Transactions
Transactions in shares of each Fund for the years ended July 31, 1995 and
1994 are as follows:
National Minnesota Insured
Tax-Exempt Tax-Exempt
Fund Fund
---------------------------------------------------------------------------
1995:
Sold 354,203 64,766
Issued for reinvested distributions 250,761 120,193
Redeemed (1,182,858) (1,060,778)
---------------------------------------------------------------------------
Decrease (577,894) (875,819)
---------------------------------------------------------------------------
1994:
Sold 2,021,958 1,175,716
Issued for reinvested distributions 229,255 156,844
Redeemed (678,653) (409,749)
---------------------------------------------------------------------------
Increase 1,572,560 922,811
---------------------------------------------------------------------------
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
5. Fees and Expenses
The funds have entered into an investment advisory and management
agreement with IFG Asset Management Services, Inc. (AMS), under which AMS
manages each fund's assets and furnishes related office facilities,
equipment, research and personnel. The agreement requires each fund to
pay AMS a monthly fee based on average daily net assets. The fee for each
fund is equal to an annual rate of 50% of average daily net assets.
Each fund also pays affiliates Dain Bosworth Incorporated (DBI) and
Rauscher Pierce Refsnes, Inc. (RPR) a monthly fee for expenses incurred in
the distribution and promotion of the funds' shares. The monthly fee is
limited to a maximum of 1/12 of .30% of average daily net assets for each
fund. However, DBI and RPR voluntarily limited the reimbursement fee to
0.186% and 0.193% of average daily net assets for the year ended July 31,
1995 for the National Tax-Exempt Fund and Minnesota Insured Tax-Exempt
Fund, respectively. Total distribution fees waived for the year ended
July 31, 1995 were $78,426 and $32,957 for National Tax-Exempt Fund and
Minnesota Insured Tax-Exempt Fund, respectively.
In addition to the investment advisory fee and the distribution fee, each
fund is responsible for paying most other operating expenses including
outside directors' fees and expenses, custodian fees, registration fees,
printing and shareholder reports, transfer agent fees and expenses, legal,
auditing and accounting services, organization costs, insurance, interest
and other miscellaneous expenses. For the year ended July 31, 1995, total
fees and expenses including the distribution fee were further voluntarily
limited to an annual rate of 0.79% and 0.81% of average daily net assets
for National Tax-Exempt Fund and Minnesota Insured Tax-Exempt Fund,
respectively.
Sales charges paid to affiliated brokers for distributing the funds'
shares were $76,256 for National Tax-Exempt Fund and $15,380 for Minnesota
Insured Tax-Exempt Fund for the year ended July 31, 1995.
Legal fees and expenses of $2,649 for the year ended July 31, 1995 were
paid to an affiliate of the fund's sponsor.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
6. Financial Highlights
Per share data for a share of capital stock outstanding throughout each
period and selected information for the period is as follows:
National Tax-Exempt Fund
- -------------------------------------------------------------------------------
Year ended July 31,
1995 1994 1993 1992 1991
- -------------------------------------------------------------------------------
Net asset value, beginning of year $10.17 $10.50 $10.22 $9.65 $9.63
- -------------------------------------------------------------------------------
Income from investment operations:
Net investment income............ 0.648 0.624 0.652 0.703 0.697
Realized and unrealized gains
(losses) on investments, net.... 0.045 (0.313) 0.280 0.570 0.020
- -------------------------------------------------------------------------------
Total from investment operations.. 0.693 0.311 0.932 1.273 0.717
- -------------------------------------------------------------------------------
Distributions to shareholders:
From investment income........... (0.648) (0.624) (0.652) (0.703) (0.697)
From accumulated net
realized gains.................. (0.045) (0.017) -- -- --
- -------------------------------------------------------------------------------
Total distributions
to shareholders.................. (0.693) (0.641) (0.652) (0.703) (0.697)
- -------------------------------------------------------------------------------
Net asset value, end of year...... $10.17 $10.17 $10.50 $10.22 $9.65
- -------------------------------------------------------------------------------
Total return**.................... 7.16% 2.99% 9.45% 13.84% 7.76%
Net assets at end of
year (000s omitted).............. $66,357 $72,172 $58,048 $43,166 $46,812
Ratio of expenses to average
daily net assets*................ 0.79% 0.91% 1.01% 0.84% 0.96%
Ratio of net investment income
to average daily net assets*..... 6.45% 5.98% 6.32% 7.15% 7.26%
Portfolio turnover rate
(excluding short-term securities) 8.45% 27.88% 16.36% 14.50% 13.52%
- -------------------------------------------------------------------------------
* Various fund fees and expenses were voluntarily waived or absorbed during
the periods referred to above. Had the fund paid all expenses, the ratios
of expenses and net investment income to average daily net assets would
have been as follows: 0.90%/6.34% for the year ended July 31, 1995,
1.01%/5.88% in 1994, 1.24%/6.09% in 1993, 1.14%/6.85% in 1992, and
1.26%/6.96% in 1991.
** Total return does not reflect payments of a sales charge.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
6. Financial Highlights (continued)
Minnesota Insured Tax-Exempt Fund
- ------------------------------------------------------------------------------
Year ended July 31,
1995 1994 1993 1992 1991
- ------------------------------------------------------------------------------
Net asset value, beginning of year $9.85 $10.52 $10.29 $9.74 $9.60
- ------------------------------------------------------------------------------
Income from investment operations:
Net investment income............ 0.494 0.502 0.560 0.604 0.623
Realized and unrealized gains
(losses) on investments, net.... 0.157 (0.465) 0.230 0.550 0.140
- ------------------------------------------------------------------------------
Total from investment operations.. 0.651 0.037 0.790 1.154 0.763
- ------------------------------------------------------------------------------
Distributions to shareholders:
From investment income........... (0.494) (0.502) (0.560) (0.604) (0.623)
From accumulated net
realized gains.................. (0.097) (0.205) -- -- --
- ------------------------------------------------------------------------------
Total distributions
to shareholders.................. (0.591) (0.707) (0.560) (0.604) (0.623)
- ------------------------------------------------------------------------------
Net asset value, end of year...... $9.91 $9.85 $10.52 $10.29 $9.74
- ------------------------------------------------------------------------------
Total return**.................... 7.00% 0.21% 7.95% 12.41% 8.27%
Net assets at end of
year (000s omitted).............. $28,635 $37,108 $29,899 $23,009 $21,486
Ratio of expenses to average
daily net assets*................ 0.81% 0.80% 0.76% 0.61% 0.46%
Ratio of net investment income
to average daily net assets*..... 5.12% 4.86% 5.44% 6.11% 6.45%
Portfolio turnover rate
(excluding short-term securities) 3.44% 42.40% 20.12% 5.60% 1.25%
- ------------------------------------------------------------------------------
* Various fund fees and expenses were voluntarily waived or absorbed during
the periods referred to above. Had the fund paid all expenses, the ratios
of expenses and net investment income to average daily net assets would
have been as follows: 1.16%/4.77% for the year ended July 31, 1995,
1.00%/4.66% in 1994, 1.15%/5.05% in 1993, 1.16%/5.56% in 1992, and
1.22%/5.69% in 1991.
** Total return does not reflect payments of a sales charge.
<PAGE>
NATIONAL TAX-EXEMPT FUND
Investments in Securities
July 31, 1995
Principal Market
Name of Issuer (c) Amount Value (a)
- ------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets.)
Municipal Bonds (98.53%):
- ------------------------------------------------------------------------------
Alabama (7.45%)
Etowah County Refunding Warrants, 8.50%, 11/01/10 $800,000 $866,645
Orange Beach General Obligation, 6.25%, 10/01/13 1,500,000 1,429,510
Moundville Industrial Development, 6.75%, 12/01/11 1,500,000 1,485,201
Upper Bear Creek Water & Sewer, 6.25%, 08/01/15 1,250,000 1,162,569
-----------
4,943,925
-----------
Arizona (0.79%)
Prescott Valley Improvement District, 7.90%, 01/01/12 500,000 526,733
-----------
Colorado (9.74%)
Arapahoe Water & Sanitation District, 9.13%, 12/01/08 500,000 533,850
Arapahoe Water & Sanitation District, 9.25%, 12/01/13 250,000 266,881
Beaver Creek Metropolitan District, 9.25%, 12/01/05 245,000 264,507
Colorado Technical Center Metropolitan District,
9.75%, 06/01/09 620,000 633,417
Copper Mountain Metropolitan District,
8.20%, 11/01/09 400,000 409,250
Mountain Village Metropolitan District,
8.10%, 12/01/11 1,000,000 1,057,436
Panorama Metropolitan District, 9.00%, 12/01/09 750,000 796,573
Piney Creek Metropolitan District, 8.50%, 12/01/14 600,000 609,167
Winter Park West Water & Sanitation District,
9.75%, 12/01/05 525,000 539,686
Winter Park West Water & Sanitation District,
9.25%, 12/01/06 250,000 257,623
Mesa County Single Family Mortgage, 8.88%, 12/01/10 405,000 413,349
Chaparral Water & Sanitation District,
8.25%, 12/01/10 325,000 328,292
Westminster Shaw Heights Basin Special,
7.50%, 12/01/07 350,000 353,842
-----------
6,463,873
-----------
Florida (1.01%)
Sarasota County Industrial Development,
8.75%, 05/01/11 665,000 671,872
-----------
Georgia (2.16%)
Richmond County Development Authority,
8.50%, 12/01/12 1,400,000 1,430,073
-----------
See accompanying notes to investments in securities.
<PAGE>
NATIONAL TAX-EXEMPT FUND
Investments in Securities (continued)
Principal Market
Name of Issuer (c) Amount Value (a)
- ------------------------------------------------------------------------------
Municipal Bonds (continued):
- ------------------------------------------------------------------------------
Illinois (13.23%)
Harvey Advanced Refunding, 8.50%, 12/01/08 $500,000 $556,822
Niles Park District Series A, 6.65%, 12/01/14 860,000 861,756
Romeoville Series A Utilities, 7.80%, 01/01/11 1,000,000 1,019,572
Streamwood Special Service Area #3, 8.38%, 01/01/09 1,000,000 1,031,783
Illinois Development Finance Authority,
7.00%, 03/01/06 400,000 375,824
Illinois Development Finance Authority,
7.20%, 03/01/07-03/01/08 800,000 759,826
Illinois Development Finance Authority,
7.38%, 11/15/11 1,100,000 1,158,067
Illinois Health Facilities Authority,
8.10%, 11/15/14 1,000,000 1,021,307
West Chicago Tax Increment Revenue, 7.38%, 12/01/12 720,000 742,468
Bedford Park Revenue Refunding, 8.00%, 12/01/10 1,200,000 1,255,123
-----------
8,782,548
-----------
Indiana (2.71%)
Indianapolis Economic Development, 7.25%, 10/01/10 700,000 723,061
Fishers Economic Development Revenue,
8.38%, 09/01/14 1,000,000 1,072,171
-----------
1,795,232
-----------
Kansas (0.20%)
Johnson City First Mortgage Revenue, 7.40%, 10/01/08 125,000 130,663
-----------
Maine (1.56%)
Yarmouth Pollution Control Revenue, 6.75%, 06/01/02 1,025,000 1,033,536
-----------
Michigan (3.14%)
Troy Economic Development Corporation,
6.75%, 10/01/12 1,500,000 1,552,623
Bad Axe Water Supply & Sewer Disposal,
8.25%, 12/01/07 500,000 532,635
-----------
2,085,258
-----------
Minnesota (3.58%)
Fergus Falls Health Care Facilities, 6.50%, 09/01/18 750,000 732,446
Alexandria Health Care Facilities, 8.75%, 08/01/21 500,000 554,082
Chisago City Health Facilities,
9.13%, 07/01/06-07/01/07 505,000 543,586
Spring Park Health Care Facilities, 8.25%, 08/01/11 500,000 545,808
-----------
2,375,922
-----------
See accompanying notes to investments in securities.
<PAGE>
NATIONAL TAX-EXEMPT FUND
Investments in Securities (continued)
Principal Market
Name of Issuer (c) Amount Value (a)
- ------------------------------------------------------------------------------
Municipal Bonds (continued):
- ------------------------------------------------------------------------------
Missouri (8.09%)
Saint Louis County Industrial Development,
7.50%, 06/01/16 $1,500,000 $1,417,067
Clarence Cannon Wholesale Water Commission,
5.75%, 05/15/13 1,500,000 1,380,744
Franklin County Public Water Supply District,
7.38%, 12/01/18 1,255,000 1,297,548
Marion County Nursing Home, 7.00%, 08/01/13 1,050,000 1,039,423
Platte City Waterworks & Sewer,
7.75%, 04/01/08-04/01/09 220,000 230,895
-----------
5,365,677
-----------
Nebraska (2.64%)
Douglas County Zoo Facility, 6.00%, 06/01/03 1,750,000 1,750,000
-----------
New Mexico (1.09%)
Rio Grande Natural Gas Association, 6.13%, 07/01/13 750,000 723,112
-----------
North Carolina (2.62%)
Eastern Municipal Power Agency, 5.50%, 1/01/21 2,000,000 1,741,576
-----------
North Dakota (0.12%)
State Board of Higher Education, 10.13%, 08/01/05 75,000 76,500
-----------
Oklahoma (10.56%)
Chelsea Gas Authority, 7.30%, 07/01/19 700,000 684,477
Chelsea Gas Authority, 7.25%, 07/01/13 600,000 596,974
Comanche County Hospital Authority, 9.00%, 07/01/21 725,000 866,229
Shattuck Hospital Authority, 6.50%, 01/01/98-07/01/02 390,000 375,119
Clinton Public Works Authority, 6.25%, 01/01/14 1,725,000 1,653,985
Oklahoma City Public Property Authority,
8.30%, 10/01/16 1,000,000 1,077,139
Anadarko Public Works Authority, 7.00%, 10/01/12 1,000,000 1,018,507
Heavener Utilities Authority, 6.50%, 10/01/09 750,000 732,978
-----------
7,005,408
-----------
Pennsylvania (13.55%)
Adamstown Borough Authority Sewer, 9.00%, 10/01/17 500,000 550,799
Adamstown Borough Authority Sewer, 6.25%, 10/01/17 905,000 859,216
Butler General Obligation, 6.88%, 03/01/23 950,000 889,990
Chester General Obligation, 9.50%, 12/01/97 100,000 101,595
See accompanying notes to investments in securities.
<PAGE>
NATIONAL TAX-EXEMPT FUND
Investments in Securities (continued)
Principal Market
Name of Issuer (c) Amount Value (a)
- ------------------------------------------------------------------------------
Municipal Bonds (continued):
- ------------------------------------------------------------------------------
Pennsylvania (continued)
Easton Area Joint Sewer Authority, 6.20%, 04/01/09 $1,000,000 $974,755
Elizabeth Borough Municipal Authority Sewer,
7.15%, 01/01/21 500,000 503,405
Hopewell Township Beaver County Sewer,
6.00%, 11/01/13 1,215,000 1,099,986
Lehigh County General Purpose, 8.75%, 11/01/14 750,000 687,001
Neville Township General Obligation, 5.90%, 11/01/12 500,000 450,891
Neville Township General Obligation, 6.00%, 11/01/18 615,000 541,617
New Kensington Municipal Sewer, 7.50%, 10/01/11 1,000,000 1,016,567
State Higher Educational Facilities
Authority Revenue, 6.75%, 05/01/12 1,300,000 1,317,408
-----------
8,993,230
-----------
South Dakota (3.98%)
Health & Educational Facilities, 7.25%, 09/01/13 1,125,000 1,020,128
Health & Educational Facilities, 7.00%, 04/01/10 1,000,000 985,480
Lease Revenue Community, 8.88%, 10/01/18 590,000 638,500
-----------
2,644,108
-----------
Tennessee (1.56%)
Newbern Industrial Development, 7.90%, 3/01/00 1,000,000 1,035,864
-----------
Texas (3.06%)
Denton County Health Facilities, 7.50%, 08/15/15 1,000,000 997,896
Wharton Housing Development Corp.,
8.00%, 02/01/03-02/01/10 1,025,000 1,033,788
-----------
2,031,684
-----------
Washington (1.38%)
State Housing Finance Commission,
8.25%, 07/01/02-07/01/12 870,000 914,457
-----------
Wisconsin (2.45%)
La Crosse Nursing Home Facilities, 9.25%, 07/01/17 600,000 625,722
Dodgeville School District,
6.50%, 05/01/11-05/01/12 1,000,000 997,241
-----------
1,622,963
-----------
West Virginia (1.21%)
Ohio County Building Commission, 9.63%, 01/01/13 775,000 806,097
-----------
See accompanying notes to investments in securities.
<PAGE>
NATIONAL TAX-EXEMPT FUND
Investments in Securities (continued)
Principal Market
Name of Issuer (c) Amount Value (a)
- ------------------------------------------------------------------------------
Municipal Bonds (continued):
- ------------------------------------------------------------------------------
Wyoming (0.65%)
Green River Sweetwater County, 8.50%, 12/01/07 $400,000 $432,392
- ------------------------------------------------------------------------------
Total Municipal Securities (cost: $65,151,440) $65,382,703
- ------------------------------------------------------------------------------
Short-term Securities (0.75%)
Los Angeles, CA Regional Airports Series E,
3.90%, 12/01/24, LOC Wachovia Bank of Georgia 100,000 (b) 100,000
Lincoln County, WY Series 1984 D, 3.90%, 11/01/04 400,000 (b) 400,000
- ------------------------------------------------------------------------------
Total Short-Term Securities (cost: $500,000) $500,000
- ------------------------------------------------------------------------------
Total Investments in Securities (cost: $65,651,440) (d) $65,882,703
- ------------------------------------------------------------------------------
Notes to Investments in Securities:
(a) Securities are valued in accordance with procedures described in note 2
to the financial statements.
(b) Maturity date shown represents final maturity. However, the security can
be put back to the issuer on the next interest rate reset date. Interest
rate shown is effective rate on July 31, 1995.
(c) Investments in bonds, by rating category as a percentage of total bonds,
are as follows:
(Unaudited)
Rating 7/31/95
-------------- ---------
AAA 1%
AA 1
A 7
BBB and below 16
Non-rated 75
---------
Total 100%
---------
(d) At July 31, 1995, also represents the cost of securities for federal
income tax purposes. The approximate aggregate gross unrealized
appreciation and depreciation of investments in securities based on this
cost were:
Gross unrealized appreciation $ 1,496,860
Gross unrealized depreciation (1,265,597)
------------
Net unrealized appreciation $ 231,263
------------
<PAGE>
MINNESOTA INSURED TAX-EXEMPT FUND
Investments in Securities
July 31, 1995
Principal Market
Name of Issuer (c) Amount Value (a)
- ------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets.)
Municipal Bonds (95.57%):
- ------------------------------------------------------------------------------
Anoka Hennepin Independent School #11,
5.00%, 02/01/09 (FGIC) $1,030,000 $981,376
Anoka Hennepin Independent School #11,
5.10%, 02/01/11 (FGIC) 1,000,000 939,766
Becker Wastewater Treatment Facility,
5.95%, 02/01/14 (MBIA) 500,000 507,872
Brainerd Independent School District #181,
5.90%, 02/01/15 (CGIC) 1,000,000 1,003,975
Cass Lake Independent School District #115,
5.00%, 02/01/16 (FSA) 545,000 481,787
Dover & Eyota Independent School District #533,
5.25%, 02/01/14 (AMBAC) 1,000,000 939,179
Duluth Economic Development Authority,
6.00%, 02/15/20 (Connie Lee) 1,300,000 1,267,394
Duluth Independent School District #709,
5.20%, 02/01/11 (MBIA) 1,000,000 949,976
Lakeville Independent School District #194,
5.40%, 02/01/13 (FGIC) 1,100,000 1,053,195
Marshall Utility Revenue, 5.25%,
01/01/10-01/01/11 (CGIC) 625,000 595,952
Mpls. & St. Paul Housing & Redevelopment,
5.00%, 11/15/13 (AMBAC) 1,050,000 924,707
Mpls. & St. Paul Housing & Redevelopment,
7.40%, 08/15/05 (MBIA) 600,000 670,220
Minneapolis Health Care Facility,
5.30%, 11/15/08 (MBIA) 500,000 481,944
Minneapolis Tax Increment Revenue Refunding,
7.00%, 03/01/03 (MBIA) 1,140,000 1,200,475
Minnetonka Multifamily Revenue Housing,
7.50%, 12/01/17-12/01/27 (MBIA) 900,000 (e) 955,100
Mora General Obligation, 5.13%, 02/01/11 (AMBAC) 750,000 706,356
Mora Series A Waste Water Facilities,
6.85%, 02/01/10-02/01/11 (AMBAC) 510,000 557,465
Northern Minnesota Municipal Power Agency,
5.90%, 01/01/08 (AMBAC) 700,000 732,623
Northern Minnesota Municipal Power Agency,
6.13%, 01/01/20 (AMBAC) 500,000 503,166
Oakdale Refunding, 7.60%, 02/01/01 (MBIA) 50,000 50,810
Perham Independent School District #549,
5.25%, 02/01/10 (CGIC) 265,000 257,409
Perham Independent School District #549,
5.30%, 02/01/11 (CGIC) 295,000 283,254
Robbinsdale Hospital Revenue Series B,
5.30%, 05/15/06-05/15/07 (AMBAC) 1,185,000 1,186,799
Robbinsdale Hospital Revenue Series A,
5.45%, 05/15/13 (AMBAC) 1,000,000 951,800
Robbinsdale Hospital Revenue Series A,
5.30%, 05/15/07 (AMBAC) 150,000 149,727
St. Cloud Hospital Facilities Revenue Refunding,
6.75%, 07/01/11 (AMBAC) 400,000 428,851
St. Cloud Nursing Home Revenue Bonds,
5.35%, 10/01/16 (AMBAC) 145,000 133,285
St. Louis Park Multifamily Rent Housing Revenue,
7.38%, 12/01/28 (MBIA) 300,000 (e) 312,694
St. Paul Sewer Revenue, 5.60%, 12/01/08 (AMBAC) 2,000,000 2,014,952
Shakopee Public Utilities Commission,
5.60%, 08/01/18 (AMBAC) 750,000 713,734
Southern Minnesota Municipal Power Agency,
5.75%, 01/01/18 (MBIA) 1,000,000 976,567
State Housing Finance Agency, 8.50%, 02/01/17 (MBIA) 65,000 (e) 68,583
State Housing Finance Agency, 7.25%, 07/01/06 (MBIA) 180,000 (e) 188,543
State Housing Finance Agency, 8.38%, 02/01/15 (MBIA) 80,000 (e) 84,607
See accompanying notes to investments in securities.
<PAGE>
MINNESOTA INSURED TAX-EXEMPT FUND
Investments in Securities (continued)
Principal Market
Name of Issuer (c) Amount Value (a)
- ------------------------------------------------------------------------------
Municipal Bonds (continued):
- ------------------------------------------------------------------------------
State Housing Finance Agency, 9.50%, 02/01/17 (MBIA) $380,000 (e) $405,617
Waconia Independent School District #110,
5.15%, 02/01/08 (CGIC) 600,000 584,367
Waconia Independent School District #110,
5.45%, 02/01/15 (CGIC) 980,000 930,393
Warroad Independent School District #690,
6.85%, 02/01/13 (AMBAC) 500,000 546,535
Western Minnesota Municipal Power Agency,
6.88%, 01/01/09 (MBIA) 300,000 312,780
Western Minnesota Municipal Power Agency,
7.00%, 01/01/13 (MBIA) 400,000 (e) 413,402
Wright County Refunding, 5.70%, 12/01/09 (CGIC) 900,000 920,306
- ------------------------------------------------------------------------------
Total Municipal Bonds (cost: $27,424,352) $27,367,543
- ------------------------------------------------------------------------------
Short-term Securities (2.44%)
Los Angeles, CA Regional Airports Improvement Corp.,
3.90%, 12/01/24, LOC Wachovia Bank of Georgia 200,000 (b) 200,000
State Higher Education Coordinating Board,
3.75%, 12/01/00 500,000 (b) 500,000
- ------------------------------------------------------------------------------
Total Short-Term Securities (cost: $700,000) $700,000
- ------------------------------------------------------------------------------
Total Investments in Securities (cost: $28,124,352) (d) $28,067,543
- ------------------------------------------------------------------------------
Notes to Investments in Securities:
(a) Securities are valued in accordance with procedures described in note 2
to the financial statements.
(b) Maturity date shown represents final maturity. However, the security can
be put back to the issuer on the next interest rate reset date. Interest
rate shown is effective rate on July 31, 1995.
(c) The following abbreviations are used in portfolio descriptions to
identify the insurer of the issuer:
AMBAC - American Municipal Bond Association Corporation
CGIC - Capital Guaranty Insurance Corporation
FGIC - Financial Guaranty Insurance Corporation
FSA - Financial Security Assurance Corporation
MBIA - Municipal Bond Insurance Association
(d) At July 31, 1995, also represents the cost of securities for federal
income tax purposes. The approximate aggregate gross unrealized
appreciation and depreciation of investments in securities based on this
cost were:
Gross unrealized appreciation $552,938
Gross unrealized depreciation (609,747)
---------
Net unrealized depreciation $(56,809)
---------
(e) Identifies issue covered under portfolio insurance policy purchased by
the Fund.
<PAGE>
GREAT HALL INVESTMENT FUNDS, INC.
Post-Effective Amendment No. 7 to the
Registration Statement on Form N-1A
PART C
OTHER INFORMATION
<PAGE>
PART C
OTHER INFORMATION
Item 24 -- Financial Statements and Exhibits
(a) Financial statements for each of Series A through Series E of Great
Hall Investment Funds, Inc. are included as part of such series' Statement of
Additional Information.
(b) Exhibits:
1 Articles of Incorporation
2 Bylaws
3 Not applicable
4 Not applicable
5 Investment Advisory Agreement
6 Co-Distributor Agreement
7 Not applicable
8 Custodian Contract
9.1 Transfer Agency and Service Agreement
9.2 Shareholder Account Services Agreement
10 Opinion and Consent of Faegre & Benson Professional Limited
Liability Partnership
11 Consent of KPMG Peat Marwick L.L.P.
12 Not applicable
13 Letter of Investment Intent
14 Not applicable
15 Rule 12b-1 Distribution Expense Plan
16 Schedules Supporting Computations of Performance Data
17 Powers of Attorney
18.1 Officers/Directors of Dain Bosworth Incorporated
18.2 Officers/Directors of Rauscher Pierce Refsnes, Inc.
19 Code of Ethics
Item 25 -- Persons Controlled by or Under Common Control with Registrant
See the information set forth under the caption "Investment Management"
in the accompanying Prospectuses (Part A of this Registration Statement) and
under the captions "Management and Distribution Agreements" and "Directors and
Officers" in the accompanying Statements of Additional Information (Part B of
this Registration Statement).
<PAGE>
Item 26 -- Number of Holders of Securities
The following table sets forth the number of holders of shares of the
Registrant as of July 31, 1995
Title of Class Number of Record Holders
Series A Common Shares,
par value $.01 per share 200,186
Series B Common Shares,
par value $.01 per share 4,633
Series C Common Shares,
par value $.01 per share 8,865
Series D Common Shares,
par value $.01 per share 1,460
Series E Common Shares,
par value $.01 per share 911
Item 27 -- Indemnification
The Articles of Incorporation (Exhibit 1) and Bylaws (Exhibit 2) of the
Registrant provide that the Registrant 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 that no such indemnification may be made
if it would be in violation of Section 17(h) of the Investment Company Act of
1940, as now enacted or hereafter amended. Section 302A.521 of the Minnesota
Statutes, as now enacted, provides that a corporation shall indemnify a person
made or threatened to be made a party to a proceeding against judgments,
penalties, fines, settlements and reasonable expenses, including attorneys'
fees and disbursements, incurred by the person in connection with the
proceeding, if, with respect to the acts or omissions of the person complained
of in the proceeding, the person: (a) has not been indemnified by another
organization for the same judgments, penalties, fines, settlements and
reasonable expenses incurred by the person in connection with the proceeding
with respect to the same acts or omissions; (b) acted in good faith;
(c) received no improper personal benefit; (d) complied with the Minnesota
Statute dealing with directors' conflicts of interest, if applicable; (e) in
the case of a criminal proceeding, had no reasonable cause to believe the
conduct was unlawful; and (f) reasonably believed that the conduct was in the
best interests of the corporation or, in certain circumstances, reasonably
believed that the conduct was not opposed to the best interests of the
corporation.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
<PAGE>
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
Item 28 -- Business and Other Connections of Investment Adviser
Information on the business of the Registrant's investment adviser and on
the officers and directors of the investment adviser is set forth under the
caption "Investment Management" in the accompanying Prospectuses (Part A of
this Registration Statement) and under the captions "Management and
Distribution Agreements" and "Directors and Officers" in the accompanying
Statements of Additional Information (Part B of this Registration Statement)
Item 29 -- Principal Underwriters
(a) As set forth in the accompanying Prospectus and Statement of
Additional Information, Dain Bosworth Incorporated ("Dain") and Rauscher Pierce
Refsnes, Inc. ("Rauscher") serve as the principal underwriters of the
Registrant's shares of common stock. As of the date of this filing, neither
Dain nor Rauscher serves as a principal underwriter to any other registered
investment companies.
(b) The names, positions and offices of directors and officers of each
Co-Distributor are set forth in Exhibits 18.1 and 18.2. The principal business
address of each director and officer of Dain is 60 South Sixth Street,
Minneapolis, Minnesota 55402, and the principal business address of each
director and executive officer of Rauscher is CityPlace, 2711 North Haskell
Avenue, Dallas, Texas 75204.
(c) Not applicable.
Item 30 -- Location of Accounts and Records
The custodian, dividend disbursing agent, transfer agent, and
administrative and accounting services agent of the Registrant is Norwest Bank
Minnesota, N.A., 90 South Seventh Street, Minneapolis, Minnesota 55402. Other
records will be maintained by the Registrant at its principal offices, which
are located at 60 South Sixth Street, Minneapolis, Minnesota 55402.
<PAGE>
Item 31 -- Management Services
Not applicable.
Item 32 -- Undertakings
(a) Not applicable.
(b) Not applicable.
(c) Registrant hereby undertakes to furnish to each person to whom a
prospectus of any series of the Registrant the latest Annual Report of such
series. Such Annual Report will be furnished by the Registrant without charge
upon request by any such person.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all the
requirements for effectiveness of this 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 on Form N-1A to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Minneapolis, and
State of Minnesota, on the 29th day of November, 1995.
GREAT HALL INVESTMENT FUNDS. INC.
By J. Scott Spiker
-------------------------------
J. Scott Spiker
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment to the Registration Statement on Form N-1A has been signed
below by the following persons in the capacities and on the date indicated.
Name/Signature Title Date
J. Scott Spiker Chief Executive Officer
- ----------------------------- (Principal Executive Officer) November 29, 1995
J. Scott Spiker
Julie K. Getchell Chief Financial Officer
- ----------------------------- (Principal Financial and
Julie K. Getchell Accounting Officer) November 29, 1995
T. Geron Bell* Director
Sandra J. Hale* Director
Ron James* Director
Jay H. Wein* Director
*By Julie K. Getchell
--------------------------
Julie K. Getchell November 29, 1995
Attorney-in-Fact
(Pursuant to Powers of Attorney dated August 17, 1994, filed with this Post-
Effective Amendment as Exhibit 17.)
<PAGE>
GREAT HALL INVESTMENT FUNDS, INC.
REGISTRATION STATEMENT 1995
EXHIBIT INDEX
EX-99.INDEX Exhibit Index
EX-99.B1 CHARTER Articles of Incorporation
EX-99.B2 BYLAWS Bylaws
EX-99.B5 ADVSR CONTR Investment Advisory Agreement
EX-99.B6 DISTR CONTR Co-Distributor Agreement
EX-99.B8 CUST CONTR Custodian Contract
EX-99.B8.1 CUST CONT Custodian Contract Addendum
EX-99.B9.1 OTH CONTR Transfer Agency and Service Agreement
EX-99.B9.1.1 OTH CON Transfer Agency and Service Agreement Addendum
EX-99.B9.1.2 OTH CON Transfer Agency and Service Agreement Fee Schedule
EX-99.B9.2 OTH CONTR Shareholder Account Services Agreement
EX-99.B10 OPIN COUNS Opinion and Consent of Faegre & Benson
EX-99.B11 OTH CONSNT Consent of KPMG Peat Marwick LLP
EX-99.B13 STOCK LTR Letter of Investment Intent
EX-99.B15 12B1 PLAN Rule 12b-1 Distribution Expense Plan
EX-99.B16 PERF QUOT Schedules Supporting Computations of Performance Data
EX-99.B17 POW ATTOR Powers of Attorney
EX-99.B18.1 OFFICERS Officers/Directors of Dain Bosworth Incorporated
EX-99.B18.2 OFFICERS Officers/Directors of Rauscher Pierce Refsnes, Inc.
EX-99.B19 ETHICS Code of Ethics
EX-27.1 PRIME FUND Financial Data Schedule - Prime Money Market Fund
EX-27.2 GOVT FUND Financial Data Schedule - U.S. Gov't Money Market Fund
EX-27.3 TAXFREE FUND Financial Data Schedul - Tax-Free Money Market Fund
EX-27.4 NATL FUND Financial Data Schedule - National Tax-Exempt Fund
EX-27.5 MINN FUND Financial Data Schedule - MN Insured Tax-Exempt Fund
CERTIFICATE OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
GREAT HALL INVESTMENT FUNDS, INC.
The undersigned, Peter O. Torvik and Michael J. Radmer, Chief
Executive Officer and Secretary, respectively, of Great Hall Investment Funds,
Inc. (the "Corporation"), a Minnesota corporation, hereby certify as follows:
1. The name of the Corporation is Great Hall Investment Funds,
Inc.
2. At meetings duly called and held (pursuant to the requirements
of the Minnesota Statutes, Chapter 302A) on November 18, 1992 and March 3,
1993, the Corporation's Board of Directors and shareholders, respectively,
adopted and approved the following 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 Restated Articles of Incorporation in the
office of the Minnesota Secretary of State.
____________________________
RESTATED ARTICLES OF INCORPORATION
OF
GREAT HALL INVESTMENT FUNDS, 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 Great Hall
Investment Funds, 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
<PAGE>
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.
(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 60 South Sixth Street, Minneapolis, Minnesota 55402.
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) One hundred billion (100,000,000,000) of the Shares may be
issued by the Corporation in a series designated "Series A Common Shares;" one
hundred billion (100,000,000,000) of the Shares may be issued by the
Corporation in a series designated "Series B Common Shares;" one hundred
billion (100,000,000,000) 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 the
remaining nine trillion, six hundred eighty billion (9,680,000,000,000) 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,
<PAGE>
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."
(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
<PAGE>
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 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.
(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.
<PAGE>
(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;
(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
<PAGE>
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.
(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
<PAGE>
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
<PAGE>
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 and serving Chief
Executive Officer and Secretary of Great Hall Investment Funds, Inc. have
executed this Certificate of Amendment to the Articles of Incorporation of
Great Hall Investment Funds, Inc. on March 4, 1993.
Peter O. Torvik
---------------------------------------------
Peter O. Torvik, Chief Executive Officer
Michael J. Radmer
---------------------------------------------
Michael J. Radmer, Secretary
<PAGE>
BYLAWS
OF
GREAT HALL INVESTMENT FUNDS, INC.
(as adopted by the Board of Directors on August 29, 1991,
as amended on March 6, 1992)
ARTICLE I
OFFICES, CORPORATE SEAL
Section 1.01. Name. The name of the corporation is "Great Hall
Investment Funds, Inc." The name of the series represented by the
corporation's Series A Common Shares shall be "Great Hall Prime Money Market
Fund;" the name of the series represented by the corporation's Series B Common
Shares shall be "Great Hall U.S. Government Money Market Fund;" the name of
the series represented by the corporation's Series C Common Shares shall be
"Great Hall Tax-Free Money Market Fund;" the name of the series represented by
the corporation's Series D Common Shares shall be "Great Hall National Tax-
Exempt Fund;" and the name of the series represented by the corporation's
Series E Common Shares shall be "Great Hall Minnesota Insured Tax-Exempt
Fund."
Section 1.02. Registered Office. The registered office of the
corporation in Minnesota shall be that set forth in the Articles of
Incorporation or in the most recent amendment of the Articles of Incorporation
or resolution of the directors filed with the Secretary of State of Minnesota
changing the registered office.
Section 1.03. Other Offices. The corporation may have such other
offices, within or without the State of Minnesota, as the directors shall,
from time to time, determine.
Section 1.04. No Corporate Seal. The corporation shall have no
corporate seal.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 2.01. Place and Time of Meeting. Except as provided
otherwise by Minnesota Statutes Chapter 302A, meetings of the shareholders may
be held at any place, within or without the State of Minnesota, designated by
the directors and, in the absence of such designation, shall be held at the
registered office of the corporation in the State of Minnesota. The directors
shall designate the time of day for each meeting and, in the absence of such
designation, every meeting of shareholders shall be held at ten o'clock a.m.
<PAGE>
Section 2.02. Regular Meetings. Annual meetings of shareholders are
not required by these Bylaws. Regular meetings shall be held only with such
frequency and at such times and places as provided in and required by
Minnesota Statutes Section 302A.431.
Section 2.03. Special Meetings. Special meetings of the shareholders
may be held at any time and for any purpose and may be called by the Chairman
of the Board, the President, any two directors, or by one or more shareholders
holding ten percent (10%) or more of the shares entitled to vote on the
matters to be presented to the meeting.
Section 2.04. Quorum, Adjourned Meetings. The holders of ten percent
(10%) of the shares outstanding and entitled to vote shall constitute a quorum
for the transaction of business at any regular or special meeting. In case a
quorum shall not be present at a meeting, those present in person or by proxy
shall adjourn the meeting to such day as they shall, by majority vote, agree
upon without further notice other than by announcement at the meeting at which
such adjournment is taken. If a quorum is present, a meeting may be adjourned
from time to time without notice other than announcement at the meeting. At
adjourned meetings at which a quorum is present, any business may be
transacted which might have been transacted at the meeting as originally
noticed. If a quorum is present, the shareholders may continue to transact
business until adjournment notwithstanding the withdrawal of enough
shareholders to leave less than a quorum.
Section 2.05. Voting. At each meeting of the shareholders, every
shareholder having the right to vote shall be entitled to vote either in
person or by proxy. Each shareholder, unless the Articles of Incorporation
provide otherwise, shall have one vote for each share having voting power
registered in his name on the books of the corporation. Except as otherwise
specifically provided by these Bylaws or as required by provisions of the
Investment Company Act of 1940 or other applicable laws, all questions shall
be decided by a majority vote of the number of shares entitled to vote and
represented at the meeting at the time of the vote. If the matter(s) to
be presented at a regular or special meeting relates only to particular
classes or series of the corporation, then only the shareholders of such
classes or series are entitled to vote on such matter(s).
Section 2.06. Voting - Proxies. The right to vote by proxy shall
exist only if the instrument authorizing such proxy to act shall have been
executed in writing by the shareholder himself or by his attorney thereunto
duly authorized in writing. No proxy shall be voted after eleven months from
its date unless it provides for a longer period.
Section 2.07. Closing of Books. The Board of Directors may fix a
time, not exceeding sixty (60) days preceding the date of any meeting of
shareholders, as a record date for the determination of the shareholders
entitled to notice of, and to vote at, such meeting, notwithstanding any
transfer of shares on the books of the corporation after any record date so
fixed. The Board of Directors may close the books of the corporation against
the transfer of shares during the whole or any part of such period. If the
<PAGE>
Board of Directors fails to fix a record date for determination of the
shareholders entitled to notice of, and to vote at, any meeting of
shareholders, the record date shall be the thirtieth (30th) day preceding the
date of such meeting.
Section 2.08. Notice of Meetings. There shall be mailed to each
shareholder, shown by the books of the corporation to be a holder of record of
voting shares, at his address as shown by the books of the corporation, a
notice setting out the date, time and place of each regular meeting and each
special meeting, except where the meeting is an adjourned meeting and the
date, time and place of the meeting were announced at the time of adjournment,
which notice shall be mailed within the period required by law. Every notice
of any special meeting shall state the purpose or purposes for which the
meeting has been called, pursuant to Section 2.03, and the business transacted
at all special meetings shall be confined to the purpose stated in such
notice.
Section 2.09. Waiver of Notice. Notice of any regular or special
meeting may be waived either before, at or after such meeting orally or in a
writing signed by each shareholder or representative thereof entitled to vote
the shares so represented. A shareholder by his attendance at any meeting of
shareholders, shall be deemed to have waived notice of such meeting, except
where the shareholder objects at the beginning of the meeting to the
transaction of business because the item may not lawfully be considered at
that meeting and does not participate at that meeting in the consideration of
the item at that meeting.
Section 2.10. Written Action. Any action which might be taken at a
meeting of the shareholders may be taken without a meeting if done in writing
and signed by all of the shareholders entitled to vote on that action. If the
action to be taken relates to particular classes or series of the corporation,
then only shareholders of such classes or series are entitled to vote on such
action.
ARTICLE III
DIRECTORS
Section 3.01. Number, Qualification and Term of Office. Until the
first meeting of shareholders, the number of directors shall be the number
named in the Articles of Incorporation. Thereafter, the number of directors
shall be established by resolution of the shareholders (subject to the
authority of the Board of Directors to increase or decrease the number of
directors as permitted by law). In the absence of such shareholder
resolution, the number of directors shall be the number last fixed by the
shareholders, the Board of Directors or the Articles of Incorporation.
Directors need not be shareholders. Each of the directors shall hold office
until the regular meeting of shareholders next held after his election and
until his successor shall have been elected and shall qualify, or until the
earlier death, resignation, removal or disqualification of such director.
Section 3.02. Election of Directors. Except as otherwise provided in
Sections 3.11 and 3.12 hereof, the directors shall be elected at the regular
shareholders' meeting. In the event that directors are not elected at a
<PAGE>
regular shareholders' meeting, then directors may be elected at a special
shareholders' meeting, provided that the notice of such meeting shall contain
mention of such purpose. At each shareholders' meeting for the election of
directors, the directors shall be elected by a plurality of the votes validly
cast at such election. Each holder of shares of each class or series of stock
of the corporation shall be entitled to vote for directors and shall have
equal voting power for each share of each class or series of the corporation.
Section 3.03. General Powers.
(a) Except as otherwise permitted by statute, the property, affairs
and business of the corporation shall be managed by the Board of Directors,
which may exercise all the powers of the corporation except those powers
vested solely in the shareholders of the corporation by statute, the Articles
of Incorporation or these Bylaws, as amended.
(b) All acts done by any meeting of the Directors or by any person
acting as a director, so long as his successor shall not have been duly
elected or appointed, shall, notwithstanding that it be afterwards discovered
that there was some defect in the election of the directors or such person
acting as aforesaid or that they or any of them were disqualified, be as valid
as if the directors or such other person, as the case may be, had been duly
elected and were or was qualified to be directors or a director of the
corporation.
Section 3.04. Power to Declare Dividends.
(a) The Board of Directors, from time to time as they may deem
advisable, may declare and pay dividends in cash or other property of the
corporation, out of any source available for dividends, to the shareholders of
each class or series of stock of the corporation according to their respective
rights and interests in the investment portfolio of the corporation issuing
such class or series of stock.
(b) The Board of Directors shall cause to be accompanied by a written
statement any dividend payment wholly or partly from any source other than
(i) the accumulated and accrued undistributed net income of each
class or series (determined in accordance with generally accepted
accounting practice and the rules and regulations of the Securities
and Exchange Commission then in effect) and not including profits or
losses realized upon the sale of securities or other properties; or
(ii) the net income of each class or series so determined for the
current or preceding fiscal year.
Such statement shall adequately disclose the source or sources of such payment
and the basis of calculation and shall be in such form as the Securities and
Exchange Commission may prescribe.
<PAGE>
(c) Notwithstanding the above provisions of this Section 3.04, the
Board of Directors may at any time declare and distribute pro rata among the
shareholders of each class or series of stock a "stock dividend" out of the
authorized but unissued shares of stock of each class or series, including any
shares previously purchased by a class or series of the corporation.
Section 3.05. Board Meetings. Meetings of the Board of Directors may
be held from time to time at such time and place within or without the State
of Minnesota as may be designated in the notice of such meeting.
Section 3.06. Calling Meetings, Notice. A director may call a board
meeting by giving ten (10) days notice to all directors of the date, time and
place of the meeting; provided that if the day or date, time and place of a
board meeting have been announced at a previous meeting of the board, no
notice is required.
Section 3.07. Waiver of Notice. Notice of any meeting of the Board
of Directors may be waived by any director either before, at or after such
meeting orally or in a writing signed by such director. A director, by his
attendance and participation in the action taken at any meeting of the Board
of Directors, shall be deemed to have waived notice of such meeting, except
where the director objects at the beginning of the meeting to the transaction
of business because the item may not lawfully be considered at that meeting
and does not participate at that meeting in the consideration of the item at
that meeting.
Section 3.08. Quorum. A majority of the directors holding office
immediately prior to a meeting of the Board of Directors shall constitute a
quorum for the transaction of business at such meeting; provided however,
notwithstanding the above, if the Board of Directors is taking action pursuant
to the Investment Company Act of 1940, as now enacted or hereafter amended, a
majority of directors who are not "interested persons" (as defined by the
Investment Company Act of 1940, as now enacted or hereafter amended) of the
corporation shall constitute a quorum for taking such action.
Section 3.09. Advance Consent or Opposition. A director may give
advance written consent or opposition to a proposal to be acted on at a
meeting of the Board of Directors. If such director is not present at the
meeting, consent or opposition to a proposal does not constitute presence for
purposes of determining the existence of a quorum, but consent or opposition
shall be counted as a vote in favor of or against the proposal and shall be
entered in the minutes or other record of action at the meeting, if the
proposal acted on at the meeting is substantially the same or has
substantially the same effect as the proposal to which the director has
consented or objected. This procedure shall not be used to act on any
investment advisory agreement or plan of distribution adopted under Rule 12b-1
of the Investment Company Act of 1940, as amended.
Section 3.10. Conference Communications. Any or all directors may
participate in any meeting of the Board of Directors, or of any duly
constituted committee thereof, by any means of communication through which the
directors may simultaneously hear each other during such meeting. For the
<PAGE>
purposes of establishing a quorum and taking any action at the meeting, such
directors participating pursuant to this Section 3.11 shall be deemed present
in person at the meeting, and the place of the meeting shall be the place of
origination of the conference communication. This procedure shall not be used
to act on any investment advisory agreement or plan of distribution adopted
under Rule 12b-1 of the Investment Company Act of 1940, as amended.
Section 3.11. Vacancies; Newly Created Directorships. Vacancies in
the Board of Directors of this corporation occurring by reason of death,
resignation, removal or disqualification shall be filled for the unexpired
term by a majority of the remaining directors of the Board although less than
a quorum; newly created directorships resulting from an increase in the
authorized number of directors by action of the Board of Directors as
permitted by Section 3.01 may be filled by a two-thirds (2/3) vote of the
directors serving at the time of such increase; and each person so elected
shall be a director until his successor is elected by the shareholders at
their next regular or special meeting; provided, however, that no vacancy can
be filled as provided above if prohibited by the provisions of the Investment
Company Act of 1940.
Section 3.12. Removal. The entire Board of Directors or an
individual director may be removed from office, with or without cause, by a
vote of the shareholders holding a majority of the shares entitled to vote at
an election of directors. In the event that the entire Board or any one or
more directors be so removed, new directors shall be elected at the same
meeting, or the remaining directors may, to the extent vacancies are not
filled at such meeting, fill any vacancy or vacancies created by such removal.
A director named by the Board of Directors to fill a vacancy may be removed
from office at any time, with or without cause, by the affirmative vote of the
remaining directors if the shareholders have not elected directors in the
interim between the time of the appointment to fill such vacancy and the time
of the removal.
Section 3.13. Committees. A resolution approved by the affirmative
vote of a majority of the Board of Directors may establish committees having
the authority of the board in the management of the business of the
corporation to the extent provided in the resolution. A committee shall
consist of one or more persons, who need not be directors, appointed by
affirmative vote of a majority of the directors present. Committees are
subject to the direction and control of, and vacancies in the membership
thereof shall be filled by, the Board of Directors.
A majority of the members of the committee present at a meeting is a
quorum for the transaction of business, unless a larger or smaller proportion
or number is provided in a resolution approved by the affirmative vote of a
majority of the directors present.
Section 3.14. Written Action. Except as provided in the Investment
Company Act of 1940, as amended, any action which might be taken at a meeting
of the Board of Directors, or any duly constituted committee thereof, may be
taken without a meeting if done in writing and signed by that number of
directors or committee members that would be required to take the same action
<PAGE>
at a meeting of the board or committee thereof at which all directors or
committee members were present; provided, however, that any action which also
requires shareholder approval may be taken by written action only if such
writing is signed by all of the directors or committee members entitled to
vote on such matter.
Section 3.15. Compensation. Directors shall receive such fixed sum
per meeting attended or such fixed annual sum as shall be determined, from
time to time, by resolution of the Board of Directors. All directors shall
receive their expenses, if any, of attendance at meetings of the Board of
Directors or any committee thereof. Nothing herein contained shall be
construed to preclude any director from serving this corporation in any other
capacity and receiving proper compensation therefor.
ARTICLE IV
OFFICERS
Section 4.01. Number. The officers of the corporation shall consist
of a Chairman of the Board (if one is elected by the Board), the President,
one or more Vice Presidents (if desired by the Board), a Secretary, a
Treasurer and such other officers and agents as may, from time to time, be
elected by the Board of Directors. Any number of offices may be held by the
same person.
Section 4.02. Election, Term of Office and Qualifications. The Board
of Directors shall elect, from within or without their number, the officers
referred to in Section 4.01 of these Bylaws, each of whom shall have the
powers, rights, duties, responsibilities and terms in office provided for in
these Bylaws or a resolution of the Board not inconsistent therewith. The
President and all other officers who may be directors shall continue to hold
office until the election and qualification of their successors,
notwithstanding an earlier termination of their directorship.
Section 4.03. Resignation. Any officer may resign his office at any
time by delivering a written resignation to the corporation. Unless otherwise
specified therein, such resignation shall take effect upon delivery.
Section 4.04. Removal and Vacancies. Any officer may be removed from
his office by a majority of the Board of Directors with or without cause.
Such removal, however, shall be without prejudice to the contract rights of
the person so removed. If there be a vacancy among the officers of the
corporation by reason of death, resignation or otherwise, such vacancy shall
be filled for the unexpired term by the Board of Directors.
Section 4.05. Chairman of the Board. The Chairman of the Board, if
one is elected, shall preside at all meetings of the shareholders and
directors and shall have such other duties as may be prescribed, from time to
time, by the Board of Directors.
<PAGE>
Section 4.06. President. The President shall have general active
management of the business of the corporation. In the absence of the Chairman
of the Board, he shall preside at all meetings of the shareholders and
directors. He shall be the chief executive officer of the corporation and
shall see that all orders and resolutions of the Board of Directors are
carried into effect. He shall be ex officio a member of all standing
committees. He may execute and deliver, in the name of the corporation, any
deeds, mortgages, bonds, contracts or other instruments pertaining to the
business of the corporation and, in general, shall perform all duties usually
incident to the office of the President. He shall have such other duties as
may, from time to time, be prescribed by the Board of Directors.
Section 4.07. Vice President. Each Vice President shall have such
powers and shall perform such duties as may be specified in the Bylaws or
prescribed by the Board of Directors or by the President. In the event of
absence or disability of the President, Vice Presidents shall succeed to his
power and duties in the order designated by the Board of Directors.
Section 4.08. Secretary. The Secretary shall be secretary of, and
shall attend, all meetings of the shareholders and Board of Directors and
shall record all proceedings of such meetings in the minute book of the
corporation. He shall give proper notice of meetings of shareholders and
directors. He shall keep the seal of the corporation and shall affix the same
to any instrument requiring it and may, when necessary, attest the seal by his
signature. He shall perform such other duties as may, from time to time, be
prescribed by the Board of Directors or by the President.
Section 4.09. Treasurer. The Treasurer shall be the chief financial
officer and shall keep accurate accounts of all money of the corporation
received or disbursed. He shall deposit all moneys, drafts and checks in the
name of, and to the credit of, the corporation in such banks and depositories
as a majority of the Board of Directors shall, from time to time, designate.
He shall have power to endorse, for deposit, all notes, checks and drafts
received by the corporation. He shall disburse the funds of the corporation,
as ordered by the Board of Directors, making proper vouchers therefor. He
shall render to the President and the directors, whenever required, an account
of all his transactions as Treasurer and of the financial condition of the
corporation, and shall perform such other duties as may, from time to time, be
prescribed by the Board of Directors or by the President.
Section 4.10. Assistant Secretaries. At the request of the
Secretary, or in his absence or disability, any Assistant Secretary shall have
power to perform all the duties of the Secretary, and, when so acting, shall
have all the powers of, and be subject to all restrictions upon, the
Secretary. The Assistant Secretaries shall perform such other duties as from
time to time may be assigned to them by the Board of Directors or the
President.
Section 4.11. Assistant Treasurers. At the request of the Treasurer,
or in his absence or disability, any Assistant Treasurer shall have power to
perform all the duties of the Treasurer, and when so acting, shall have all
the powers of, and be subject to all the restrictions upon, the Treasurer.
<PAGE>
The Assistant Treasurers shall perform such other duties as from time to time
may be assigned to them by the Board of Directors or the President.
Section 4.12. Compensation. The officers of this corporation shall
receive such compensation for their services as may be determined, from time
to time, by resolution of the Board of Directors.
Section 4.13. Surety Bonds. The Board of Directors may require any
officer or agent of the corporation to execute a bond (including, without
limitation, any bond required by the Investment Company Act of 1940 and the
rules and regulations of the Securities and Exchange Commission) to the
corporation in such sum and with such surety or sureties as the Board of
Directors may determine, conditioned upon the faithful performance of his
duties to the corporation, including responsibility for negligence and for the
accounting of any of the corporation's property, funds or securities that may
come into his hands. In any such case, a new bond of like character shall be
given at least every six years, so that the dates of the new bond shall not be
more than six years subsequent to the date of the bond immediately preceding.
ARTICLE V
SHARES AND THEIR TRANSFER AND REDEMPTION
Section 5.01. Certificate for Shares.
(a) The corporation may have certificated or uncertificated shares,
or both, as designated by resolution of the Board of Directors. Every owner
of certificated shares of the corporation shall be entitled to a certificate,
to be in such form as shall be prescribed by the Board of Directors,
certifying the number of shares of the corporation owned by him. Within a
reasonable time after the issuance or transfer of uncertificated shares, the
corporation shall send to the new shareholder the information required to be
stated on certificates. Certificated shares shall be numbered in the order in
which they shall be issued and shall be signed, in the name of the
corporation, by the President or a Vice President and by the Secretary or an
Assistant Secretary or by such officers as the Board of Directors may
designate. Such signatures may be by facsimile if authorized by the Board of
Directors. Every certificate surrendered to the corporation for exchange or
transfer shall be canceled, and no new certificate or certificates shall be
issued in exchange for any existing certificate until such existing
certificate shall have been so canceled, except in cases provided for in
Section 5.08.
(b) In case any officer, transfer agent or registrar who shall have
signed any such certificate, or whose facsimile signature has been placed
thereon, shall cease to be such an officer (because of death, resignation or
otherwise) before such certificate is issued, such certificate may be issued
and delivered by the corporation with the same effect as if he were such
officer, transfer agent or registrar at the date of issue.
<PAGE>
Section 5.02. Issuance of Shares. The Board of Directors is
authorized to cause to be issued shares of the corporation up to the full
amount authorized by the Articles of Incorporation in such classes or series
and in such amounts as may be determined by the Board of Directors and as may
be permitted by law. No shares shall be allotted except in consideration of
cash or other property, tangible or intangible, received or to be received by
the corporation under a written agreement, of services rendered or to be
rendered to the corporation under a written agreement, or of an amount
transferred from surplus to stated capital upon a share dividend. At the time
of such allotment of shares, the Board of Directors making such allotments
shall state, by resolution, their determination of the fair value to the
corporation in monetary terms of any consideration other than cash for which
shares are allotted. No shares of stock issued by the corporation shall be
issued, sold or exchanged by or on behalf of the corporation for any
amount less than the net asset value per share of the shares outstanding as
determined pursuant to Article X hereunder.
Section 5.03. Redemption of Shares. Upon the demand of any
shareholder, this corporation shall redeem any share of stock issued by it
held and owned by such shareholder at the net asset value thereof as
determined pursuant to Article X hereunder. The Board of Directors may
suspend the right of redemption or postpone the date of payment during any
period when: (a) trading on the New York Stock Exchange is restricted or such
Exchange is closed for other than weekends or holidays; (b) the Securities and
Exchange Commission has by order permitted such suspension; or (c) an
emergency as defined by rules of the Securities and Exchange Commission
exists, making disposal of portfolio securities or valuation of net assets of
the corporation not reasonably practicable.
If following a redemption request by any shareholder of this
corporation, the value of such shareholder's interest in the corporation falls
below the required minimum investment, as may be set from time to time by the
Board of Directors, the corporation's officers are authorized, in their
discretion and on behalf of the corporation, to redeem such shareholder's
entire interest and remit such amount, provided that such a redemption will
only be effected by the corporation following: (a) a redemption by a
shareholder, which causes the value of such shareholder's interest in the
corporation to fall below the required minimum investment; (b) the mailing by
the corporation to such shareholder of a "notice of intention to redeem"; and
(c) the passage of at least sixty (60) days from the date of such mailing,
during which time the shareholder will have the opportunity to make an
additional investment in the corporation to increase the value of such
shareholder's account to at least the required minimum investment.
Section 5.04. Transfer of Shares. Transfer of shares on the books of
the corporation may be authorized only by the shareholder named in the
certificate, or the shareholder's legal representative, or the shareholder's
duly authorized attorney-in-fact, and upon surrender of the certificate or the
certificates for such shares or a duly executed assignment covering shares
held in uncertificated form. The corporation may treat, as the absolute owner
of shares of the corporation, the person or persons in whose name shares are
registered on the books of the corporation.
<PAGE>
Section 5.05. Registered Shareholders. The corporation shall be
entitled to treat the holder of record of any share or shares of stock as the
holder in fact thereof and accordingly shall not be bound to recognize any
equitable or other claim to or interest in such share on the part of any other
person, whether or not it shall have express or other notice thereof, except
as otherwise expressly provided by the laws of Minnesota.
Section 5.06. Transfer of Agents and Registrars. The Board of
Directors may from time to time appoint or remove transfer agents and/or
registrars of transfers of shares of stock of the corporation, and it may
appoint the same person as both transfer agent and registrar. Upon any such
appointment being made all certificates representing shares of capital stock
thereafter issued shall be countersigned by one of such transfer agents or by
one of such registrars of transfers or by both and shall not be valid unless
so countersigned. If the same person shall be both transfer agent and
registrar, only one countersignature by such person shall be required.
Section 5.07. Transfer Regulations. The shares of stock of the
corporation may be freely transferred, and the Board of Directors may from
time to time adopt rules and regulations with reference to the method of
transfer of shares of stock of the corporation.
Section 5.08. Lost, Stolen, Destroyed and Mutilated Certificates.
The holder of any stock of the corporation shall immediately notify the
corporation of any loss, theft, destruction or mutilation of any certificate
therefor, and the Board of Directors may, in its discretion, cause to be
issued to him a new certificate or certificates of stock, upon the surrender
of the mutilated certificate or in case of loss, theft or destruction of the
certificate upon satisfactory proof of such loss, theft or destruction. A new
certificate or certificates of stock will be issued to the owner of the lost,
stolen or destroyed certificate only after such owner, or his legal
representatives, gives to the corporation and to such registrar or transfer
agent as may be authorized or required to countersign such new certificate or
certificates a bond, in such sum as they may direct, and with such surety or
sureties, as they may direct, as indemnity against any claim that may be made
against them or any of them on account of or in connection with the alleged
loss, theft or destruction of any such certificate.
ARTICLE VI
DIVIDENDS
Section 6.01. The net investment income of each class or series of
the corporation will be determined, and its dividends shall be declared and
made payable at such time(s) as the Board of Directors shall determine;
dividends shall be payable to shareholders of record as of the date of
declaration.
It shall be the policy of each class or series of the corporation to
qualify for and elect the tax treatment applicable to regulated investment
companies under the Internal Revenue Code, so that such class or series will
<PAGE>
not be subjected to federal income tax on such part of its income or capital
gains as it distributes to shareholders.
ARTICLE VII
BOOKS AND RECORDS, AUDIT, FISCAL YEAR
Section 7.01. Share Register. The Board of Directors of the
corporation shall cause to be kept at its principal executive office, or at
another place or places within the United States determined by the board:
(1) a share register not more than one year old, containing the
names and addresses of the shareholders and the number and classes or
series of shares held by each shareholder; and
(2) a record of the dates on which certificates or transaction
statements representing shares were issued.
Section 7.02. Other Books and Records. The Board of Directors shall
cause to be kept at its principal executive office, or, if its principal
executive office is not in Minnesota, shall make available at its registered
office within ten days after receipt by an officer of the corporation of a
written demand for them made by a shareholder or other person authorized by
Minnesota Statutes Section 302A.461, originals or copies of:
(1) records of all proceedings of shareholders for the last
three years;
(2) records of all proceedings of the Board of Directors for the
last three years;
(3) its articles and all amendments currently in effect;
(4) its bylaws and all amendments currently in effect;
(5) financial statements required by Minnesota Statutes Section
302A.463 and the financial statement for the most recent interim
period prepared in the course of the operation of the corporation for
distribution to the shareholders or to a governmental agency as a
matter of public record;
(6) reports made to shareholders generally within the last three
years;
(7) a statement of the names and usual business addresses of its
directors and principal officers;
<PAGE>
(8) any shareholder voting or control agreements of which the
corporation is aware; and
(9) such other records and books of account as shall be
necessary and appropriate to the conduct of the corporate business.
Section 7.03. Audit; Accountant.
(a) The Board of Directors shall cause the records and books of
account of the corporation to be audited at least once in each fiscal year and
at such other times as it may deem necessary or appropriate.
(b) The corporation shall employ an independent public accountant or
firm of independent public accountants to examine the accounts of the
corporation and to sign and certify financial statements filed by the
corporation. The independent accountant's certificates and reports shall be
addressed both to the Board of Directors and to the shareholders.
Section 7.04. Fiscal Year. The fiscal year of the corporation shall
be determined by the Board of Directors.
ARTICLE VIII
INDEMNIFICATION OF CERTAIN PERSONS
Section 8.01. The corporation shall indemnify such persons, for such
expenses and liabilities, in such manner, under such circumstances, and to
such extent as 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 Investment
Company Act of 1940, as now enacted or hereinafter amended.
ARTICLE IX
VOTING OF STOCK HELD
Section 9.01. Unless otherwise provided by resolution of the Board of
Directors, the President, any Vice President, the Secretary or the Treasurer,
may from time to time appoint an attorney or attorneys or agent or agents of
the corporation, in the name and on behalf of the corporation, to cast the
votes which the corporation may be entitled to cast as a stockholder or
otherwise in any other corporation or association, any of whose stock or
securities may be held by the corporation, at meetings of the holders of the
stock or other securities of any such other corporation or association, or to
consent in writing to any action by any such other corporation or association,
and may instruct the person or persons so appointed as to the manner of
casting such votes or giving such consent, and may execute or cause to be
<PAGE>
executed on behalf of the corporation and under its corporate seal, or
otherwise, such written proxies, consents, waivers or other instruments as it
may deem necessary or proper; or any of such officers may themselves attend
any meeting of the holders of stock or other securities of any such
corporation or association and thereat vote or exercise any or all other
rights of the corporation as the holder of such stock or other securities of
such other corporation or association, or consent in writing to any action by
any such other corporation or association.
ARTICLE X
VALUATION OF NET ASSET VALUE
Section 10.01. The net asset value per share of each class or series
of stock of the corporation shall be determined in good faith by or under
supervision of the officers of the corporation as authorized by the Board of
Directors as often and on such days and at such time(s) as the Board of
Directors shall determine, or as otherwise may be required by law, rule,
regulation or order of the Securities and Exchange Commission.
ARTICLE XI
CUSTODY OF ASSETS
Section 11.01. All securities and cash owned by this corporation
shall, as hereinafter provided, be held by or deposited with a bank or trust
company having (according to its last published report) not less than Two
Million Dollars ($2,000,000) aggregate capital, surplus and undivided profits
(the "Custodian").
This corporation shall enter into a written contract with the
custodian regarding the powers, duties and compensation of the Custodian with
respect to the cash and securities of this corporation held by the Custodian.
Said contract and all amendments thereto shall be approved by the Board of
Directors of this corporation. In the event of the Custodian's resignation or
termination, the corporation shall use its best efforts promptly to obtain a
successor Custodian and shall require that the cash and securities owned by
this corporation held by the Custodian be delivered directly to such successor
Custodian.
ARTICLE XII
AMENDMENTS
Section 12.01. These Bylaws may be amended or altered by a vote of
the majority of the Board of Directors at any meeting provided that notice of
such proposed amendment shall have been given in the notice given to the
directors of such meeting. Such authority in the Board of Directors is
subject to the power of the shareholders to change or repeal such bylaws by a
majority vote of the shareholders present or represented at any regular
or special meeting of shareholders called for such purpose, and the Board of
<PAGE>
Directors shall not make or alter any Bylaws fixing a quorum for meetings of
shareholders, prescribing procedures for removing directors or filling
vacancies in the Board of Directors, or fixing the number of directors or
their classifications, qualifications or terms of office, except that the
Board of Directors may adopt or amend any Bylaw to increase or decrease their
number.
ARTICLE XIII
MISCELLANEOUS
Section 13.01. Interpretation. When the context in which words are
used in these Bylaws indicates that such is the intent, singular words will
include the plural and vice versa, and masculine words will include the
feminine and neuter genders and vice versa.
Section 13.02. Article and Section Titles. The titles of Sections
and Articles in these Bylaws are for descriptive purposes only and will not
control or alter the meaning of any of these Bylaws as set forth in the text.
<PAGE>
INVESTMENT ADVISORY AGREEMENT
This Agreement, made this 29th day of August, 1991, by and between Great
Hall Investment Funds, Inc., a Minnesota corporation ("Great Hall
Investment"), on behalf of each portfolio represented by a series of shares of
common stock of Great Hall Investment that adopts this Agreement (the "Funds")
(the Funds, together with the date each Fund adopts this Agreement, are set
forth in Exhibit A hereto, which shall be updated from time to time to reflect
additions, deletions or other changes thereto), and Insight Investment
Management, Inc., a Minnesota corporation (the "Adviser"),
WITNESSETH:
1. INVESTMENT ADVISORY SERVICES.
(a) Great Hall Investment hereby engages the Adviser on behalf of the
Funds, and the Adviser hereby agrees to act, as investment adviser for, and to
manage the investment of the assets of, the Funds.
(b) The investment of the assets of each Fund shall at all times be
subject to the applicable provisions of the Articles of Incorporation, the
Bylaws, the Registration Statement, and the current Prospectus and the
Statement of Additional Information, if any, of Great Hall Investment and each
Fund and shall conform to the policies and purposes of each Fund as set forth
in such documents and as interpreted from time to time by the Board of
Directors of Great Hall Investment. Within the framework of the investment
policies of each Fund, and except as otherwise permitted by this Agreement,
the Adviser shall have the sole and exclusive responsibility for the
management of each Fund's investment portfolio and for making and executing
all investment decisions for each Fund. The Adviser shall report to the Board
of Directors regularly at such times and in such detail as the Board may from
time to time determine appropriate, in order to permit the Board to determine
the adherence of the Adviser to the investment policies of the Funds.
(c) The Adviser shall, at its own expense, furnish all office
facilities, equipment and personnel necessary to discharge its
responsibilities and duties hereunder. The Adviser shall arrange, if
requested by Great Hall Investment, for officers or employees of the Adviser
to serve without compensation from any Fund as directors, officers, or
employees of Great Hall Investment if duly elected to such positions by the
shareholders of the Funds or directors of Great Hall Investment.
(d) The Adviser hereby acknowledges that all records pertaining to each
Fund's investments are the property of Great Hall Investment, and in the event
that a transfer of investment advisory services to someone other than the
Adviser should ever occur, the Adviser will promptly, and at its own cost,
take all steps necessary to segregate such records and deliver them to Great
Hall Investment.
<PAGE>
2. COMPENSATION FOR SERVICES.
In payment for the investment advisory and management services to be
rendered by the Adviser hereunder, each Fund shall pay to the Adviser a fee,
which fee shall be paid to the Adviser on a monthly basis not later than the
fifth business day of the month following the month in which said services
were rendered. The fee payable by each Fund shall be as set forth in Exhibit
A hereto. The fee payable by each Fund shall be based on the average of the
net asset values of all of the issued and outstanding shares of the Fund as
determined as at the close of each business day of the month pursuant to the
Articles of Incorporation, Bylaws, and currently effective Prospectus and
Statement of Additional Information of Great Hall Investment and the Fund.
3. ALLOCATION OF EXPENSES.
(a) In addition to the fee described in Section 2 hereof, each Fund
shall pay all its costs and expenses which are not assumed by the Adviser.
These Fund expenses include, by way of example, but not by way of limitation,
taxes, interest, brokerage fees and commissions, and fees, costs and expenses
associated with the following other matters and services: registration and
qualification of Great Hall Investment, the Funds and their shares with the
Securities and Exchange Commission and the various states; services of
custodians, transfer agents, dividend disbursing agents, accounting services
agents, shareholder services agents, independent auditors and outside legal
counsel; maintenance of corporate existence; preparation, printing and
distribution of prospectuses to existing Fund shareholders; services of Great
Hall Investment directors who are not employees of the Adviser or of the
principal underwriters of the Funds' shares (the "Co-Distributors") or any of
their affiliates; directors' and shareholders' meetings, including the
printing and mailing of proxy materials; insurance premiums for fidelity and
other coverage; issuance and sale of Fund shares (to the extent not borne by
the Co-Distributors under their agreement or agreements with Great Hall
Investment); redemption of Fund shares; printing and mailing of stock
certificates representing shares of the Funds; association membership dues;
preparation, printing and mailing of shareholder reports; and portfolio
pricing services, if any.
(b) The Adviser or the Co-Distributors shall bear all advertising and
promotional expenses in connection with the distribution of each Fund's
shares, including paying for prospectuses, shareholder reports and sales
literature for new or prospective shareholders. No Fund shall use any of its
assets to finance costs incurred in connection with the distribution of its
shares except pursuant to a plan of distribution, if any, adopted pursuant to
Rule 12b-1 under the Investment Company Act of 1940.
<PAGE>
4. FREEDOM TO DEAL WITH THIRD PARTIES.
The Adviser shall be free to render services to others similar to those
rendered under this Agreement or of a different nature except as such services
may conflict with the services to be rendered or the duties to be assumed
hereunder.
5. EFFECTIVE DATE, DURATION, TERMINATION, AMENDMENT OF AGREEMENT.
(a) The effective date of this Agreement with respect to each Fund
shall be the date set forth on Exhibit A hereto, which date shall not precede
the date that this Agreement is approved by a vote of the holders of at least
a majority of the outstanding voting securities of such Fund.
(b) Unless sooner terminated as hereinafter provided, this Agreement
shall continue in effect with respect to each Fund for a period more than two
years from the date of its execution but only as long as such continuance is
specifically approved at least annually by (i) the Board of Directors of Great
Hall Investment or by the vote of a majority of the outstanding voting
securities of the applicable Fund, and (ii) by the vote of a majority of the
directors of Great Hall Investment who are not parties to this Agreement or
"interested persons" (as defined in the Investment Company Act of 1940, as
amended) of the Adviser or of Great Hall Investment cast in person at a
meeting called for the purpose of voting on such approval.
(c) This Agreement may be terminated with respect to any Fund at any
time, without the payment of any penalty, by the Board of Directors of Great
Hall Investment or by the vote of a majority of the outstanding voting
securities of such Fund, or by the Adviser, upon 60 days' written notice to
the other party.
(d) This Agreement shall automatically terminate in the event of its
"assignment" (as defined in the Investment Company Act of 1940, as amended).
(e) No amendment to this Agreement shall be effective with respect to
any Fund until approved by the vote of: (i) a majority of the directors of
Great Hall Investment who are not parties to this Agreement or "interested
persons" (as defined in the Investment Company Act of 1940, as amended) of the
Adviser or of Great Hall Investment cast in person at a meeting called for the
purpose of voting on such approval; and (ii) a majority of the outstanding
voting securities of the applicable Fund.
(f) Wherever referred to in this Agreement, the vote or approval of the
holders of a majority of the outstanding voting securities or shares of a Fund
shall mean the lesser of (i) the vote of 67% or more of the voting securities
of such Fund present at a regular or special meeting of shareholders duly
called, if more than 50% of the Fund's outstanding voting securities are
present or represented by proxy, or (ii) the vote of more than 50% of the
outstanding voting securities of such Fund.
<PAGE>
6. NOTICES.
Any notice under this Agreement shall be in writing, addressed,
delivered or mailed, postage prepaid, to the other party at such address as
such other party may designate in writing for receipt of such notice.
7. INTERPRETATION; GOVERNING LAW.
This Agreement shall be subject to and interpreted in accordance with
all applicable provisions of law including, but not limited to, 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 laws of
the State of Minnesota shall otherwise govern the construction, validity and
effect of this Agreement.
IN WITNESS WHEREOF, Great Hall Investment and the Adviser have caused
this Agreement to be executed by their duly authorized officers as of the day
and year first above written.
GREAT HALL INVESTMENT FUNDS, INC.
By Richard Fry
Its Chairman
INSIGHT INVESTMENT MANAGEMENT, INC.
By Peter O. Torvik
Its Managing Director
<PAGE>
EXHIBIT A
to
INVESTMENT ADVISORY AGREEMENT
ANNUAL ADVISORY FEE
FUND EFFECTIVE DATE (as % of average daily net assets)
Great Hall Prime Money November 1, 1991 .55% of average daily net assets
Market Fund up to $700 million;
(Series A) .50% of the next $500 million of
average daily net assets;
.45% of the next $800 million of
average daily net assets; and
.40% of average daily net assets
in excess of $2 billion
Great Hall U.S. November 1, 1991 .50% of average daily net assets
Government Money up to $100 million;
Market Fund (Series B) .40% of the next $200 million of
average daily net assets; and
.35% of average net assets in
excess of $300 million
Great Hall Tax-Free November 1, 1991 .50% of average daily net assets
Money Market Fund
(Series C)
Great Hall National March 17, 1992 .50% of average daily net assets*
Tax-Exempt Fund
(Series D)
Great Hall Minnesota March 17, 1992 .50% of average daily net assets**
Insured Tax-Exempt
Fund (Series E)
* Until March 31, 1994, with respect to Series D, the Adviser shall waive
its advisory fee (as calculated above) if and to the extent that the total
operating and management expenses for Series D (excluding interest, taxes,
brokerage commissions, 12b-1 fees and non-recurring or extraordinary
charges and expenses) during any fiscal year exceed .96% per annum of
Series D's average daily net assets. The first fiscal year to which this
waiver applies shall run from the commencement of Series D's operations
through July 31, 1992, the second fiscal year to which this waiver applies
shall run from August 1, 1992 through July 31, 1993 and the third and final
fiscal year to which this waiver applies shall run from August 1, 1993
through March 31, 1994.
<PAGE>
** Until March 31, 1994, with respect to Series E, the Adviser shall waive
its advisory fee (as calculated above) if and to the extent that the total
operating and management expenses for Series E (excluding interest, taxes,
brokerage commissions, 12b-1 fees and non-recurring or extraordinary
charges and expenses) during any fiscal year exceed .92% per annum of
Series E's average daily net assets (if Series E's average daily net assets
during such fiscal year are $30 million or more), .77% per annum of Series
E's average daily net assets (if Series E's average daily net assets during
such fiscal year are at least $25 million but less than $30 million), and
.67% per annum of Series E's average daily net assets (if Series E's
average daily net assets during such fiscal year are less than $25
million). The first fiscal year to which this waiver applies shall run
from the commencement of Series E's operations through July 31, 1992, the
second fiscal year to which this waiver applies shall run from August 1,
1992 through July 31, 1993 and the third and final fiscal year to which
this waiver applies shall run from August 1, 1993 through March 31, 1994.
<PAGE>
CO-DISTRIBUTOR AGREEMENT
This Agreement, made this 17th day of March, 1992, by and among Great
Hall Investment Funds, Inc., a Minnesota corporation ("Great Hall"), on behalf
of each portfolio represented by a series of shares of common stock of Great
Hall that adopts this Agreement (individually, a "Fund" and, collectively, the
"Funds") (the Funds, together with the date each Fund adopts this Agreement,
are set forth in Exhibit A hereto, which shall be updated from time to time to
reflect additions, deletions or other changes thereto), and Dain Bosworth
Incorporated, a Delaware corporation, and Rauscher Pierce Refsnes, Inc., a
Delaware corporation, as co-underwriters of the Funds' shares of common stock
(individually, a "Co-Distributor" and, together, the "Co-Distributors"),
WITNESSETH:
1. UNDERWRITING SERVICES.
Each Fund hereby engages the Co-Distributors, and each of the Co-
Distributors hereby agrees to act, as a principal underwriter for the Funds in
connection with the sale and distribution of the Funds' shares of common stock
to the public, either through dealers or otherwise. Each Co-Distributor
agrees to offer such shares for sale at all times when such shares are
available for sale and may lawfully be offered for sale and sold.
2. SALE OF FUND SHARES.
Shares of each Fund are to be sold only on the following terms:
(a) All subscriptions, offers or sales shall be subject to acceptance
or rejection by Great Hall. Any offer or sale shall be conclusively presumed
to have been accepted by Great Hall if Great Hall shall fail to notify the
applicable Co-Distributor of the rejection of such offer or sale prior to the
computation of the net asset value of the applicable Fund's shares next
following receipt by Great Hall of notice of such offer or sale.
(b) No share of any Fund shall be sold by either Co-Distributor for
any consideration other than cash or for any amount less than the net asset
value of such share, computed as provided in the Bylaws of Great Hall and in
the current Prospectus and Statement of Additional Information of the
applicable Fund.
3. REGISTRATION OF SHARES.
Great Hall agrees to make prompt and reasonable efforts to effect and
keep in effect, at each Fund's own expense, the registration or qualification
of each Fund's shares for sale in such jurisdictions as Great Hall may
designate.
<PAGE>
4. INFORMATION TO BE FURNISHED BY GREAT HALL TO THE CO-DISTRIBUTORS.
Great Hall agrees that it will furnish each Co-Distributor with such
information with respect to the affairs and accounts of each Fund as the Co-
Distributors may from time to time reasonably require, and further agrees that
each Co-Distributor, at all reasonable times, shall be permitted to inspect
the books and records of the Funds.
5. ALLOCATION OF EXPENSES.
During the period of this contract, Great Hall shall cause the Funds to
pay all expenses, costs and fees incurred by the Fund which are not assumed by
the Co-Distributors or by the Funds' investment adviser. The Co-Distributors
shall pay all promotional expenses in connection with the distribution of each
Fund's shares including paying for prospectuses, shareholder reports and sales
literature for new or prospective shareholders.
6. COMPENSATION TO THE CO-DISTRIBUTORS.
It is understood and agreed by the parties hereto that the Co-
Distributors shall receive, in compensation for services performed by the Co-
Distributors hereunder: (a) a sales charge, if any, from certain of the Funds
as set forth in each applicable Fund's Prospectus and Statement of Additional
Information (as the same may be amended or supplemented from time to time) and
such other compensation as set forth on Exhibit A hereto. Payments, if any,
to each Co-Distributor for services rendered hereunder shall be made by Great
Hall quarterly in arrears not later than the fifth business day following the
end of each calendar quarter in which said services were rendered.
7. LIMITATION OF THE CO-DISTRIBUTORS' AUTHORITY.
Each Co-Distributor shall be deemed to be an independent contractor and,
expect as specifically provided or authorized herein, shall have no authority
to act for or represent Great Hall or the Funds. In connection with each Co-
Distributors' role as an underwriter of Fund shares, each Co-Distributor shall
at all times be deemed an agent of Great Hall and the Funds and shall sell
Fund shares to purchasers thereof as agent and not as principal
8. SUBSCRIPTION FOR SHARES - REFUND FOR CANCELED ORDERS.
Each Co-Distributor shall effect the subscription of Fund shares as
agent for Great Hall and the applicable Fund. In the event that an order for
the purchase of shares of a Fund is placed with a Co-Distributor by a customer
or dealer and subsequently canceled, the applicable Co-Distributor, on behalf
of such customer or dealer, shall forthwith cancel the subscription for such
shares entered on the books of the applicable Fund, and, if such Co-
<PAGE>
Distributor has paid the applicable Fund for such shares, such Co-Distributor
shall be entitled to receive from the applicable Fund in refund of such
payment the lesser of:
(a) the consideration received by the Fund for said shares;
(b) the net asset value of such shares at the time of cancellation by
the Co-Distributor.
9. REPORTS TO GREAT HALL DIRECTORS.
Appropriate officers of each Co-Distributor shall provide the directors
of Great Hall with such information as is required by any plan of distribution
adopted by Great Hall on behalf of any Fund pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended (the "1940 Act") (said plan of
distribution, a "Plan").
10. INDEMNIFICATION OF GREAT HALL AND THE FUNDS.
Each Co-Distributor agrees to indemnify Great Hall and the Funds against
any and all litigation and other legal proceedings of any kind or nature and
against any liability, judgment, cost or penalty imposed as a result of such
litigation or proceedings in any way arising out of or in connection with the
sale or distribution of the Fund shares by such Co-Distributor. In the event
of the threat or institution of any such litigation or legal proceedings
against Great Hall or the Funds, the applicable Co-Distributor shall defend
such action on behalf of the applicable Fund(s) at such Co-Distributor's own
expense, and shall pay any such liability, judgment, cost or penalty resulting
therefrom, whether imposed by legal authority or agreed upon by way of
compromise and settlement; provided, however, neither Co-Distributor shall be
required to pay or reimburse Great Hall or the Funds for any liability,
judgment, cost or penalty incurred as a result of information supplied by, or
as the result of the omission to supply information by, Great Hall, or to
either or both Co-Distributors by a director, officer, or employee of Great
Hall who is not an interested person of the applicable Co-Distributor, unless
the information so supplied or omitted was available to the Co-Distributor or
the Funds' investment adviser without recourse to Great Hall or any such
interested person of Great Hall.
11. FREEDOM TO DEAL WITH THIRD PARTIES.
Each Co-Distributor shall be free to render services to others similar
to those rendered under this Agreement or of a different nature except as such
services may conflict with the services to be rendered or the duties to be
assumed hereunder.
<PAGE>
12. EFFECTIVE DATE, DURATION, TERMINATION, AMENDMENT OF AGREEMENT.
(a) The effective date of this Agreement with respect to each Fund
shall be the date set forth on Exhibit A hereto.
(b) Unless sooner terminated as hereinafter provided, this Agreement
shall continue in effect with respect to each Fund for a period of one year
from the date of its execution but only as long as such continuance is
specifically approved at least annually (at a meeting in person called for the
purpose of voting on this Agreement) by (i) the Board of Directors of Great
Hall or by the vote of a majority of the outstanding voting securities of the
applicable Fund, and (ii) by the vote of a majority of the directors of Great
Hall who are not parties to this Agreement or "interested persons", as defined
in the 1940 Act, of either Co-Distributor or of Great Hall and, with respect
to any Fund for which Great Hall has adopted a Plan, who have no direct or
indirect financial interest in the operation of the Plan or in any agreement
related to the Plan (including, but not limited to, this Agreement).
(c) This Agreement may be terminated with respect to any Fund at any
time, without the payment of any penalty, by the vote (cast in person at a
meeting called for the purpose of voting on such approval) a majority of the
directors of Great Hall who are not parties to this Agreement or "interested
persons", as defined in the 1940 Act, of either Co-Distributor or of Great
Hall and, with respect to any Fund for which Great Hall has adopted a Plan,
who have no direct or indirect financial interest in the operation of the Plan
or in any agreement related to the Plan, or by the vote of a majority of the
outstanding voting securities of such Fund, or by either Co-Distributor, upon
60 days' written notice to the other parties.
(d) This Agreement shall automatically terminate in the event of its
"assignment" (as defined in the 1940 Act).
(e) No amendment to this Agreement shall be effective with respect to
any Fund until approved by the vote (cast in person at a meeting called for
the purpose of voting on such approval) of a majority of the directors of
Great Hall who are not parties to this Agreement or "interested persons", as
defined in the 1940 Act, of either Co-Distributor or of Great Hall and, with
respect to any Fund for which Great Hall has adopted a Plan, who have no
direct or indirect financial interest in the operation of the Plan or in any
agreement related to the Plan.
(f) Wherever referred to in this Agreement, the vote or approval of the
holders of a majority of the outstanding voting securities or shares of a Fund
shall mean the lesser of (i) the vote of 67% or more of the voting securities
of such Fund present at a regular or special meeting of shareholders duly
called, if more than 50% of the Fund's outstanding voting securities are
present or represented by proxy, or (ii) the vote of more than 50% of the
outstanding voting securities of such Fund.
<PAGE>
13. NOTICES.
Any notice under this Agreement shall be in writing, addressed,
delivered or mailed, postage prepaid, to the other party at such address as
such other party may designate in writing for receipt of such notice.
14. INTERPRETATION; GOVERNING LAW.
This Agreement shall be subject to and interpreted in accordance with
all applicable provisions of law including, but not limited to, 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 laws of
the State of Minnesota shall otherwise govern the construction, validity and
effect of this Agreement.
IN WITNESS WHEREOF, Great Hall and the Co-Distributors have caused this
Agreement to be executed by their duly authorized officers as of the day and
year first above written.
GREAT HALL INVESTMENT FUNDS, INC.
By Peter O. Torvik
Its Chief Executive Officer
DAIN BOSWORTH INCORPORATED
By James Tracy
Its Vice President
RAUSCHER PIERCE RESFNES, INC.
By Richard Fry
Its Senior Vice President
<PAGE>
EXHIBIT A
to
CO-DISTRIBUTOR AGREEMENT
FUND EFFECTIVE DATE COMPENSATION
Great Hall Prime Money Market March 17, 1992 (1)
Fund (Series A)
Great Hall U.S. Government March 17, 1992 (1)
Money Market Fund (Series B)
Great Hall Tax-Free Money March 17, 1992 (1)
Market Fund (Series C)
Great Hall National Tax- March 17, 1992 (2)
Exempt Fund (Series D)
Great Hall Minnesota March 17, 1992 (2)
Insured Tax-Exempt Fund
(Series E)
___________________________________
(1) It is understood and agreed by the parties hereto that, with
respect to each of Series A, Series B and Series C of Great Hall,
sales of shares of each of said series by the Co-Distributors will
benefit the investment adviser of each of said series (which
investment adviser is an affiliate of each Co-Distributor), and,
therefore, neither Co-Distributor shall receive any additional
compensation for services it performs hereunder with respect to
Series A, Series B and Series C.
(2) In addition to the sales charge applicable to each of Series D and
Series E of Great Hall (as set forth in each series' current
prospectus), each Co-Distributor shall receive a quarterly
distribution fee equal to one-quarter of .30% of that portion of
each series' respective average daily net assets (during such
calendar quarter) that are attributable to shareholder accounts of
such Co-Distributor. Such quarterly fee shall be used by each Co-
Distributor to compensate broker-dealers, including the Co-
Distributors and their registered representatives, for their sale
of shares of Series D and Series E and may also be used to pay
other advertising and promotional expenses in connection with the
distribution of said shares, as more fully set forth in the Plan
applicable to Series D and Series E. Such quarterly fee may be
waived in whole or in part by the parties hereto.
<PAGE>
CUSTODIAN CONTRACT
between
GREAT HALL INVESTMENT FUNDS, INC.
and
NORWEST BANK MINNESOTA, N.A.
<PAGE>
TABLE OF CONTENTS
Page
1. Employment of Custodian and Property to be Held by It.................1
2. Duties of the Custodian with Respect to Property of the
Fund Held by the Custodian............................................1
2.1 Holding Securities..............................................1
2.2 Delivery of Securities..........................................1
2.3 Registration of Securities......................................3
2.4 Bank Accounts...................................................3
2.5 Payments for Shares.............................................3
2.6 Availability of Federal Funds...................................3
2.7 Collection of Income............................................3
2.8 Payment of Fund Monies..........................................4
2.9 Liability for Payment in Advance of Receipt
of Securities Purchased.........................................4
2.10 Payments for Repurchases or Redemptions of
Shares of the Fund..............................................4
2.11 Appointment of Agents...........................................4
2.12 Deposit of Fund Assets in Securities System.....................5
2.13 Segregated Account..............................................5
2.14 Ownership Certificates for Tax Purposes.........................6
2.15 Proxies.........................................................6
2.16 Communications Relating to Fund Portfolio Securities............6
2.17 Proper Instructions.............................................6
2.18 Actions Permitted Without Express Authority.....................6
2.19 Evidence of Authority...........................................7
2.20 Class Actions...................................................7
3. Duties of Custodian With Respect to the Books of
Account and Calculation of Net Asset Value and Net Income.............7
4. Records...............................................................7
5. Opinion of Fund's Independent Accountants.............................7
6. Reports to Fund by Independent Public Accountants.....................7
7. Compensation of Custodian.............................................8
8. Responsibility of Custodian...........................................8
9. Effective Period, Termination and Amendment...........................8
10. Successor Custodian...................................................9
11. Interpretive and Additional Provisions................................9
12. Minnesota Law to Apply................................................9
13. Prior Contracts.......................................................9
<PAGE>
CUSTODIAN CONTRACT
This AGREEMENT made as of the 29th day of August, 1991, by and between
Great Hall Investment Funds, Inc. a Minnesota corporation, having its
principal office and place of business at 110 South Sixth Street, Minneapolis,
Minnesota (the "Company"), and Norwest Bank Minnesota, N.A., a National
Banking Association having its principal office and place of business at Sixth
and Marquette, Minnesota, MN 55479 (the "Custodian").
WHEREAS, the Company is a mutual fund whose shares are currently offered
in the following three series (which, together with each future series of the
Company that adopts this contract are hereafter referred to individually as a
"Fund" and collectively as the "Funds"): Great Hall Prime Money Market Fund,
Great Hall U.S. Government Money Market Fund and Great Hall Tax-Free Money
Market Fund.
WHEREAS, the Company desires to appoint the Bank as the custodian for
each Fund, and the Bank desires to accept such appointment;
WITNESSETH, that in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
The Company hereby employs the Custodian as the custodian of the assets
of each Fund. The Company agrees to deliver to the Custodian all securities
and cash owned by each Fund, and all payments of income, payments of principal
or capital distributions received by the Fund with respect to all securities
owned by the Fund from time to time, and the cash consideration received by
the Fund for such new or treasury shares of capital stock ("Shares") of the
Fund as may be issued or sold from time to time. The Custodian shall not be
responsible for any property of a Fund held or received by the Fund and not
delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Section
2.17), the Custodian shall from time to time employ one or more sub-
custodians, but only in accordance with an applicable vote by the Board of
Directors of the Company, and provided that the appointment by the Custodian
of any sub-custodians shall not relieve the Custodian of its responsibilities
or liabilities hereunder.
2. Duties of the Custodian with Respect to Property of the Fund held by the
Custodian
2.1 Holding Securities
The Custodian shall hold and physically segregate for the account of
each of the Funds all non-cash property, including all securities owned by the
Funds, other than (a) securities which are maintained pursuant to Section 2.12
in a clearing agency which acts as a securities depository or in a Federal
Reserve Bank, as Custodian may select, and to permit such deposited Assets to
be registered in the name of Custodian or Custodian's agent or nominee on the
records of such Federal reserve Bank or such registered clearing agency or the
nominee of either, and to employ and use securities depositories, clearing
agencies, clearance systems, sub-custodians or agents located outside the
United States in connection with transactions involving foreign securities,
collectively referred to herein as a "Securities System".
2.2 Delivery of Securities
The Custodian shall release and deliver securities owned by the Company
for the account of a Fund held by the Custodian or in a Securities System
account of the Custodian only upon receipt of Proper Instructions, which may
be continuing instructions when deemed appropriate by the parties, and only in
the following cases:
1) Upon sale of such securities for the account of a Fund and receipt
of payment therefor;
<PAGE>
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Company on
behalf of a Fund;
3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 2.12 hereof;
4) To the depository agent in connection with tender or other similar
offers for portfolio securities of a Fund;
5) To the issuer thereof, or its agent, when such securities are
called, redeemed, retired or otherwise become payable; provided
that, in any such case, the cash or other consideration is to be
delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the name of
the Company for the account of a Fund or into the name of any
nominee or nominees of the Custodian or into the name or nominee
name of any agent appointed pursuant to Section 2.11 or into the
name or nominee name of any sub-custodian appointed pursuant to
Article 1; or for exchange for a different number of bonds,
certificates or other evidence representing the same aggregate face
amount or number of units; provided that, in any such case, the new
securities are to be delivered to the Custodian;
7) Upon the sale of such securities for the account of a Fund, to the
broker or its clearing agent, against a receipt, for examination in
accordance with "street delivery" custom; provided that in any such
case, the Custodian shall have no responsibility or liability for
any loss arising from the delivery of such securities prior to
receiving payment for such securities except as may arise from the
Custodian's own negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan or merger,
consolidation, recapitalization, reorganization or readjustment of
the securities of the issuer of such securities, or pursuant to
provisions for conversion contained in such securities, or pursuant
to any deposit agreement; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the Custodian;
9) 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 of temporary
securities for definitive securities; provided that, in any such
case, the new securities and cash, if any, are to be delivered to
the Custodian;
10) For delivery in connection with any loans of securities made by the
Company on behalf of a Fund, but only against receipt of adequate
collateral as agreed upon from time to time by the Custodian and the
Company, which may be in the form of cash or obligations issued by
the United States government, its agencies or instrumentalities,
except that in connection with any loans for which collateral is to
be credited to the Custodian's account in the book-entry system
authorized by the U.S. Department of the Treasury, the Custodian
will not be held liable or responsible for the delivery of
securities owned by a Fund prior to the receipt of such collateral;
11) For delivery as security in connection with any borrowings by the
Company on behalf of a Fund requiring a pledge of assets by the
Company on behalf of such Fund, but only against receipt of amounts
borrowed;
12) For delivery in accordance with the provisions of any agreement
among the Company on behalf of a Fund, the Custodian and a broker-
dealer registered under the Securities Exchange Act of 1934 (the
"Exchange Act") and a member of the National Association of
Securities Dealers, Inc. ("NASD"), relating to the compliance with
the rules of The Options Clearing Corporation and of any registered
national securities exchange, or of any similar organization or
organizations, regarding escrow or other arrangements in connection
with transactions by the Company;
13) For delivery in accordance with the provisions of any agreement
among the Company on behalf of a Fund, the Custodian, and a Futures
Commission Merchant registered under the Commodity Exchange Act,
relating to compliance with the rules of the Commodity Futures
Trading Commission and/or any Contract Market, or any similar
organization or organizations, regarding account deposits in
connection with transactions by the Company on behalf of a Fund;
14) Upon receipt of instructions from the transfer agent ("Transfer
Agent") for the applicable Fund, for delivery to such Transfer Agent
or to the holders of shares in connection with distributions in
kind, as may be described from time to time in the Fund's currently
effective prospectus and statement of additional information
("prospectus"), in satisfaction of requests by holders of Shares for
repurchase or redemptions; and
<PAGE>
15) For any other proper corporate purpose, but only upon receipt of, in
addition to Proper Instructions, a certified copy of a resolution of
the Board of Directors or of the Executive Committee signed by an
officer of the Company and certified by the Secretary or an
Assistant Secretary, specifying the securities to be delivered,
setting forth the purpose for which such delivery is to be made,
declaring such purpose to be a proper corporate purpose, and naming
the person or persons to whom delivery of such securities shall be
made.
2.3 Registration of Securities
Securities held by the Custodian (other than bearer securities) shall be
registered in the name of the Company for the account of the applicable
Fund(s) or in the name of any nominee of the Company or of any nominee of the
Custodian which nominee shall be assigned exclusively to the Company's, unless
the Company has authorized in writing the appointment of a nominee to be used
in common with other registered investment companies having the same
investment adviser as the Fund(s), or in the name of nominee name of any agent
appointed pursuant to Section 2.11 or in the name or nominee name of any sub-
custodian appointed pursuant to Article 1. All securities accepted by the
Custodian on behalf of the Company under the terms of this Contract shall be
in "street name" or other good delivery form.
2.4 Bank Accounts
The Custodian shall open and maintain a separate bank account or
accounts in the name of each Fund, subject only to draft or order by the
Custodian acting pursuant to the terms of this Contract, and shall hold in
such account or accounts, subject to the provisions hereof, all cash received
by it from or for the account of each applicable Fund, other than cash
maintained by the applicable Fund in a bank account established and used in
accordance with Rule 17f-3 under the Investment Company Act of 1940. Cash
held by the Custodian for each Fund may be deposited by it to its credit as
Custodian in the Banking Department of the Custodian or in such other banks or
trust companies as it may in its discretion deem necessary or desirable;
provided, however, that every such bank or trust company shall be qualified to
act as a custodian under the Investment Company Act of 1940 and that each such
bank or trust company and the cash to be deposited with each such bank or
trust company shall be approved by vote of a majority of the Board of
Directors of the Company. Such cash shall be deposited by the Custodian in
its capacity as Custodian and shall be withdrawable by the Custodian only in
that capacity.
2.5 Payments for Shares
The Custodian shall receive from the distributor for each Fund Shares or
from the Transfer Agent of each Fund and deposit into the Fund account such
payments as are received for Shares of the Fund issued or sold from time to
time by the Fund. The Custodian will provide timely notification to the Fund
and the Transfer Agent of any receipt by it of payments for Shares of the
Funds.
2.6 Availability of Federal Funds
Upon mutual agreement between the Company and the Custodian, the
Custodian shall, upon the receipt of Proper Instructions, make federal funds
available to the Funds as of specified times agreed upon from time to time by
the Company and the Custodian in the amount of checks received in payment for
Shares of the Funds which are deposited into the Funds' accounts.
2.7 Collection of Income
The Custodian shall collect on a timely basis all income and other
payments with respect to registered securities held hereunder to which each
Fund shall be entitled either by law or pursuant to custom in the securities
business, and shall collect on a timely basis all income and other payments
with respect to bearer securities if, on the date of payment by the issuer,
such securities are held by the Custodian or its agent thereof and shall
credit such income, as collected, to the applicable Fund's custodian account.
Without limiting the generality of the foregoing, the Custodian shall detach
and present for payment all coupons and other income items requiring
presentation as and when they become due and shall collect interest when due
on securities held hereunder. Income due each Fund on securities loaned
pursuant to the provisions of Section 2.2 (10) shall be the responsibility of
the Company. The Custodian will have no duty or responsibility in connection
therewith, other than to provide the Company with such information or data as
may be necessary to assist the Company in arranging for the timely delivery to
the Custodian of the income to which each Fund is properly entitled.
<PAGE>
2.8 Payment of Company Monies
Upon receipt of Proper Instructions, which may be continuing
instructions when deemed appropriate by the parties, the Custodian shall pay
out monies of each Fund in the following cases only:
1) Upon the purchase of securities, options, futures contracts or
options on futures contracts for the account of each Fund but only
(a) against the delivery of such securities or evidence of title to
such options, futures contracts or options on futures contracts, to
the Custodian (or any bank, banking firm or trust company doing
business in the United States or abroad which is qualified under the
Investment Company Act of 1940 to act as a custodian and has been
designated by the Custodian as its agent for this purpose)
registered in the name of the Company for the account of a Fund or
in the name of a nominee of the Custodian referred to in Section 2.3
hereof or in proper form for transfer; (b) in the case of a purchase
effected through a Securities System, in accordance with the
conditions set forth in Section 2.12 hereof or (c) in the case of
the repurchase agreements entered into between the Company and the
Custodian, or another bank, or a broker-dealer which is a member of
NASD, (I) against delivery of the securities either in certificate
form or through an entry crediting the Custodian's account at the
Federal Reserve Bank with such securities or (ii) against delivery
of the receipt evidencing purchase by the Company for the account of
a Fund of securities owned by the Custodian along with written
evidence of the agreement by the Custodian to repurchase such
securities from a Fund;
2) In connection with conversion, exchange or surrender of securities
owned by the Fund as set forth in Section 2.2 hereof;
3) For the redemption or repurchase of Shares issued by a Fund as set
forth in Section 2.10 hereof;
4) For the payment of any expense or liability incurred by a Fund,
including but not limited to the following payments for the account
of the Fund: interest, taxes, management, accounting, transfer
agent and legal fees, and operating expenses of the Fund whether or
not such expenses are to be in whole or part capitalized or treated
as deferred expenses;
5) For the payment of any dividends declared pursuant to the governing
documents of the Company and the applicable Fund;
6) For payment of the amount of dividends received in respect of
securities sold short;
7) For any other proper purpose, but only upon receipt of, in addition
to Proper Instructions, a certified copy of a resolution of the
Board of Directors or of the Executive Committee of the Company
signed by an officer of the Company and certified by its Secretary
or an Assistant Secretary, specifying the amount of such payment,
setting forth the purpose for which such payment is to be made,
declaring such purpose to be a proper purpose, and naming the person
or persons to whom such payment is to be made.
2.9 Liability for Payment in Advance of Receipt of Securities Purchased
In any and every case where payment for purchase of securities for the
account of a Fund is made by the Custodian in advance of receipt of the
securities purchased in the absence of specific written instructions from the
Company to so pay in advance, the Custodian shall be absolutely liable to the
Company (for the account of the Fund) for such securities to the same extent
as if the securities had been received by the Custodian.
2.10 Payments for Repurchases or Redemptions of Shares of a Fund
From such funds as may be available for the purpose but subject to the
limitations of the Articles of Incorporation or Bylaws and any applicable
votes of the Board of Directors of the Company, the Custodian shall, upon
receipt of instructions from the Transfer Agent, make funds available for
payment to holders of Shares who have delivered to the Transfer Agent a
request for redemption or repurchase of their Shares. In connection with the
redemption or repurchase of Shares of a Fund, the Custodian is authorized upon
receipt of instructions from the Transfer agent to wire funds to or through a
commercial bank designated by the redeeming shareholders. In connection with
the redemption or repurchase of Shares of a Fund, the Custodian shall honor
checks drawn on the Custodian by a holder of Shares, which checks have been
furnished by the Company to the holder of Shares, when presented to the
Custodian in accordance with such procedures and controls as are mutually
agreed upon from time to time between the Company and the Custodian.
2.11 Appointment of Agents
The Custodian may at any time or times in its discretion appoint (and
may at any time remove) any other bank or trust company which is itself
qualified under the Investment Company Act of 1940 to act as a custodian,
<PAGE>
as its agent to carry out such of the provisions of this Article 2 as the
Custodian may from time to time direct; provided, however, that the
appointment of any agent shall not relieve the Custodian of its
responsibilities or liabilities hereunder.
2.12 Deposit of Fund Assets in Securities Systems
The Custodian may deposit and/or maintain securities owned by any Fund
in a clearing agency registered with the Securities and Exchange commission
under Section 17A of the Exchange Act, which acts as a securities depository,
or in a Federal Reserve Bank, as Custodian may select, and to permit such
deposited Assets to be registered in the name of Custodian or Custodian's
agent or nominee on the records of such Federal reserve Bank or such
registered clearing agency or the nominee of either, and to employ and use
securities depositories, clearing agencies, clearance systems, sub-custodians
or agents located outside the United States in connection with transactions
involving foreign securities, collectively referred to herein as "Securities
System" in accordance with applicable Federal Reserve Board and Securities and
Exchange Commission rules and regulations, if any, and subject to the
following provisions:
1) The Custodian may keep securities of a Fund in a Securities System
provided that such securities are represented in an account
("Account") of the Custodian in the Securities System which shall
not include any assets of the Custodian other than assets held as a
fiduciary, custodian or otherwise for customers;
2) The records of the Custodian with respect to securities of a Fund
which are maintained in a Securities System shall identify by book-
entry those securities belonging to the Fund;
3) The Custodian shall pay for securities purchased for the account of
a Fund upon (i) receipt of advice from the Securities System that
such securities have been transferred to the Account, and (ii) the
making of an entry on the records of the Custodian to reflect such
payment and transfer for the account of the Fund. The Custodian
shall transfer securities sold for the account of a Fund upon (I)
receipt of advice from the Securities System that payment for such
securities has been transferred to the Account, and (ii) the making
of an entry on the records of the Custodian to reflect such transfer
and payment for the account of the Fund. Copies of all advises from
the Securities System of transfers of securities for the account of
a Fund shall identify the Fund, be maintained for the Fund by the
Custodian and be provided to the Company at its request. Upon
request, the Custodian shall furnish the Company confirmation of
each transfer to or from the account of a Fund in the form of a
written advice or notice and shall furnish to the Company copies of
daily transaction sheets reflecting each day's transactions in the
Securities System for the account of each Fund.
4) The Custodian shall provide the Company with any report obtained by
the Custodian on the Securities System's accounting system, internal
accounting control and procedures for safeguarding securities
deposited in the Securities System;
5) The Custodian shall have received the initial or annual certificate,
as the case may be, required by Article 9 hereof;
6) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Company (for the account of each
Fund) for any loss or damage to the applicable Fund(s) resulting
from use of the Securities System by reason of any negligence,
misfeasance or misconduct of the Custodian or any of its agents or
of any of its or their employees or from failure of the Custodian or
any such agent to enforce effectively such rights as it may have
against the Securities System; at the election of the Company, it
shall be entitled to be subrogated to the rights of the Custodian
with respect to any claim against the Securities System or any other
person which the Custodian may have as a consequence of any such
loss or damage if and to the extent that the applicable Funds have
not been made whole for any such loss or damage.
2.13 Segregated Account
The Custodian shall upon receipt of Proper Instructions establish and
maintain a segregated account or accounts for and on behalf of each Fund, into
which account or accounts may be transferred cash and/or securities, including
securities maintained in an account by the Custodian pursuant to Section 2.12
hereof, (i) in accordance with the provisions of any agreement among the
Company, the Custodian and a broker-dealer registered under the Exchange Act
and a member of NASD (or any futures commission merchant registered under the
Commodity Exchange Act), relating to compliance with the rules of The Options
Clearing Corporation and of any registered national securities exchange (or
the Commodity Futures Trading Commission or any registered contract market),
or of any similar organization or organizations, regarding escrow or other
<PAGE>
arrangements in connection with transactions by the Company for the account of
any Fund, (ii) for the purpose of segregating cash or government securities in
connection with options purchased, sold or written by the Company for the
account of any Fund or commodity futures contracts or options thereon
purchased or sold by the Company for the account of any Fund, (iii) for the
purpose of compliance by the Company with the procedures required by
Investment Company Act Release No. 10666, or any subsequent release or
releases of the Securities and Exchange Commission relating to the maintenance
of segregated accounts by registered investment companies and (iv) for other
proper corporate purposes, but only, in the case of the clause (iv), upon
receipt of, in addition to Proper Instructions, a certified copy of a
resolution of the Board of Directors or of the Executive Committee signed by
an officer of the Company and certified by the Secretary or an Assistant
Secretary, setting forth the purpose or purposes of such segregated account
and declaring such purposes to be proper corporate purposes.
2.14 Ownership Certificates for Tax Purposes
The Custodian shall execute ownership and other certificates and
affidavits for all federal and state tax purposes in connection with receipt
of income or other payments with respect to securities of each Fund held by it
and in connection with transfers of securities.
2.15 Proxies
The Custodian shall, with respect to the securities held hereunder,
cause to be promptly executed by the registered holder of such securities, if
the securities are registered otherwise than in the name of the Company or a
nominee of the Company, all proxies, without indication of the manner in which
such proxies are to be voted, and shall promptly deliver to the Company such
proxies, all proxy soliciting materials and all notices relating to such
securities.
2.16 Communications Relating to Fund Portfolio Securities
The Custodian shall transmit promptly to the Company all written
information (including, without limitation, pendency of calls and maturities
of securities and expirations of rights in connection therewith and notices of
exercise of call and put options written by the Fund and the maturity of
futures contracts purchased or sold by the Company) received by the Custodian
from issuers of the securities being held for each Fund. With respect to
tender or exchange offers, the Custodian shall transmit promptly to the
Company all written information received by the Custodian from issuers of the
securities whose tender or exchange is sought and from the party (or his
agents) making the tender or exchange offer. If the Company desires to take
action with respect to any tender offer, exchange offer or any other similar
transaction, the Company shall notify the Custodian at least three business
days prior to the date on which the Custodian is to take such action.
2.17 Proper Instructions
Proper Instructions as used throughout this Article 2 means a writing
signed or initialed by one or more person or persons as the Board of Directors
of the Company shall have from time to time authorized. Each such writing
shall set forth the specific transaction or type of transaction involved,
including a specific statement of the purpose for which such action is
requested. Oral instructions will be considered Proper Instructions if the
Custodian reasonably believes them to have been given by a person authorized
to give such instructions with respect to the transaction involved. The
Company shall cause all oral instructions to be confirmed in writing. Upon
receipt of a certificate of the Secretary or an Assistant Secretary as to the
authorization by the Board of Directors of the Company accompanied by a
detailed description of procedures approved by the Board of Directors, Proper
Instructions may include communications effected directly between electro-
mechanical or electronic devices provided that the Board of Directors and the
Custodian are satisfied that such procedures afford adequate safeguards for
each Fund's assets.
2.18 Actions Permitted Without Express Authority
The Custodian may in its discretion, without express authority from the
Company:
1) Make payments to itself or others for minor expenses of handling
securities provided that all such payments shall be accounted for to
the Company;
2) Surrender securities in temporary form for securities in definitive
form;
3) Endorse for collection, in the name of the applicable Fund, checks,
drafts and other negotiable instruments; and
<PAGE>
4) In general, attend to all non-discretionary details in connection
with the sale, exchange, substitution, purchase, transfer and other
dealings with the securities and property of the Company except as
otherwise directed by the Board of Directors of the Company.
2.19 Evidence of Authority
The Custodian shall be protected in acting upon any instructions,
notice, request, consent, certificate or other instrument of paper believed by
it to be genuine and to have been properly executed by or on behalf of the
Company. The Custodian may receive and accept a certified copy of a vote of
the Board of Directors of the Company as conclusive evidence (a) of the
authority of any person to act in accordance with such vote or (b) or any
determination or of any action duly made or taken by the Board of Directors as
described in such vote, and such vote may be considered as in full force and
effect until receipt by the Custodian of written notice to the contrary.
2.20 Class Actions
The Custodian shall transmit promptly to the Company all notices or other
communications received by it in connection with any class action lawsuit
relating to securities currently or previously held for one or more of the
Funds. Upon being directed by the Company to do so, the Custodian shall
furnish to the Company any and all written materials which establish the
holding/ownership, amount held/owned, and period of holding/ownership of
the securities in question.
3. Duties of Custodian with Respect to the Books of Account and Calculation
of Net Asset Value and Net Income
The Custodian shall cooperate with and supply necessary information to
the entity or entities appointed by the Board of Directors of the Company to
keep the books of account of each Fund and/or compute the net asset value per
share of the outstanding shares of each Fund or, if directed in writing to do
so by the Company, shall itself keep such books of account and/or compute such
net asset value per share. If so directed, the Custodian shall also calculate
daily the net income of each Fund as described in the Fund's currently
effective prospectus and shall advise the Company and the Transfer Agent daily
of the total amounts of such net income and, if instructed in writing by an
officer of the Company to do so, shall advise the Transfer Agent periodically
of the division of such net income among its various components. The
calculations of the net asset value per share and the daily income of each
Fund shall be made at the time or times described from time to time in the
applicable Fund's currently effective prospectus.
4. Records
The Custodian shall create and maintain all records relating to its
activities and obligations under this Contract in such manner as will meet the
obligations of the Company under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rule 31a-1 and 31a-2
thereunder, applicable federal and state tax laws and any other law or
administrative rules or procedures which may be applicable to the Company.
All such records shall be the property of the Company and shall at all times
during the regular business hours of the Custodian be open for inspection by
duly authority officers, employees or agents of the Company and employees and
agents of the Securities and Exchange Commission. The Custodian shall, at the
Company's request, supply the Company with a tabulation of securities owned by
each Fund and held by the Custodian and shall, when requested to do so by the
Company and for such compensation as shall be agreed upon between the Company
and the Custodian, include certificate numbers in such tabulations.
5. Opinion of Company's Independent Accountant
The Custodian shall take all reasonable action, as the Company may from
time to time request, to obtain from year to year favorable opinions from the
Company's independent accountants with respect to its activities hereunder in
connection with the preparation of the Company's, Form N-1A and Form N-SAR or
other annual reports to the Securities and Exchange Commission and with
respect to any other requirements of such Commission.
6. Reports to Company by Independent Public Accountants
The Custodian shall provide the Company, at such times as the Company
may reasonably require, with reports by independent public accountants on the
accounting system, internal accounting control and procedures for safeguarding
securities, futures contracts and options on futures contracts, including
<PAGE>
securities deposited and/or maintained in a Securities System, relating to the
services provided by the Custodian under this Contract; such reports shall be
of sufficient scope, and in sufficient detail, as may reasonably be required
by the Company to provide reasonable assurance that any material inadequacies
would be disclosed by such examination, and, if there are no such
inadequacies, the reports shall so state.
7. Compensation of Custodian
For performance by the Custodian pursuant to this Agreement, the
Company, out of the assets of each applicable Fund, agrees to pay the
Custodian annual asset fees and supplemental charges as set out in the fee
schedule attached hereto. Fees and supplemental charges may be changed from
time to time subject to mutual written agreement between the Company and the
Custodian.
8. Responsibility of Custodian
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Contract and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties.
The Custodian shall be held to the exercise of reasonable care in carrying out
the provisions of this Contract, but shall be kept indemnified by and shall be
without liability to the Fund for any action taken or omitted by it without
negligence. It shall be entitled to rely on and may act upon advice of
counsel of, or reasonably acceptable to, the Company on all matters, and shall
be without liability for any action reasonably taken or omitted pursuant to
such advice. Notwithstanding the foregoing, the responsibility of the
Custodian with respect to redemptions effected by check shall be in accordance
with a separate Agreement entered into between the Custodian and the Company.
If the Company requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may, in
the opinion of the Custodian, result in the Custodian or its nominee assigned
to the Company being liable for the payment of money or incurring liability of
some other form, the Company, as a prerequisite to requiring the Custodian to
take such action, shall provide indemnity to the Custodian in an amount and
form reasonably satisfactory to it.
If the Company requires the Custodian to advance cash or securities for
any purpose or in the event that the Custodian or its nominee shall incur or
be assessed any taxes, charges, expenses, assessments, claims or liabilities
in connection with the performance of this Contract, except such as may arise
from its or its nominee's own negligent action, negligent failure to act or
willful misconduct, any property at any time held for the account of a Fund
shall be security therefor and should the Company fail to repay the Custodian
promptly with respect to any Fund, the Custodian shall be entitled to utilize
available cash and to dispose of assets to the extent necessary to obtain
reimbursement.
The Custodian Agrees to indemnify and hold the Company and each of the
Funds harmless for any and all loss, liability and expense, including
reasonable legal fees and expenses, arising out of the Custodian's own
negligence or willful misconduct or that of its officers, agents, or employees
in the performance of its duties and obligations under this Contract.
9. Effective Period, Termination and Amendment
The Contract shall become effective as of its execution, shall continue
in full force and effect until terminated as hereinafter provided, may be
amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
than sixty (60) days after the date of such delivery or mailing; provided,
however, that the Custodian shall not act under Section 2.12 hereof in the
absence of receipt of an initial certificate of the Secretary or an Assistant
Secretary that the Board of Directors of the Company has approved the initial
use of a particular Securities System and the receipt of an annual certificate
of the Secretary or an Assistant Secretary that the Board of Directors has
reviewed the use by each Fund of such Securities System, as required in each
case by Rule 17f-4 under the Investment Company Act of 1940, provided further,
however, that the Company shall not amend or terminate this Contract in
contravention of any applicable federal or state regulations, or any provision
of its Articles of Incorporation, and further provided, that the Company may
at any time by action of its Board of Directors, with respect to any Fund (i)
substitute another bank or trust company for the Custodian by giving notice as
described above to the Custodian, or (ii) immediately terminate this Contract
in the event of the appointment of a conservator or receiver for the Custodian
<PAGE>
by the Comptroller of the Currency or upon the happening of a like event at
the direction of an appropriate regulatory agency or court of competent
jurisdiction.
Upon termination of the Contract, the Company on behalf of each Fund
shall pay to the Custodian such compensation as may be due as of the date of
such termination and shall likewise reimburse the Custodian for its costs,
expenses and disbursements.
10. Successor Custodian
If a successor custodian shall be appointed by the Board of Directors of
the Company, the Custodian shall, upon termination, deliver to such successor
custodian at the office of the Custodian, duly endorsed and in the form for
transfer to an account of the successor custodian each of the Fund's
securities held in a Securities System.
If no such successor custodian shall be appointed, the Custodian shall,
in like manner, upon receipt of a certified copy of a vote of the Board of
Directors of the Company, deliver at the office of the Custodian and transfer
such securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Directors shall have been delivered
to the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or
trust company, which is a "bank" as defined in the Investment Company Act of
1940, of its own selection, having an aggregate capital, surplus, and
undivided profits, as shown by its last published report, of not less than
$100,000,000, all securities, funds and other properties held by the Custodian
and all instruments held by the Custodian relative thereto and all other
property held by it under this Contract and to transfer to an account of such
successor custodian all of each Fund's securities held in any Securities
System. Thereafter, such bank or trust company shall be the successor of the
Custodian under and pursuant to this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Company to procure the certified copy of the vote referred to
or of the Board of Directors to appoint a successor custodian, the Custodian
shall be entitled to fair compensation for its services during such period as
the Custodian retains possession of such securities, funds and other
properties and the provisions of this Contract relating to the duties and
obligations of the Custodian shall remain in full force and effect.
11. Interpretive and Additional Provisions
In connection with the operation of this Contract, the Custodian and the
Company may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Contract as may in their joint opinion be
consistent with the general tenor of this Contract. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall
be annexed hereto, provided that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision
of the Articles of Incorporation or Bylaws of the Company. No interpretive or
additional provisions made as provided in the preceding sentence shall be
deemed to be an amendment of this Contract.
12. Minnesota Law to Apply
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The State of Minnesota.
13. Prior Contracts
This Contract supersedes and terminates, as of the date hereof, all
prior contracts between the Company and the Custodian relating to the custody
of each Fund's assets.
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized officers as of the day
and year first above written.
GREAT HALL INVESTMENT FUNDS, INC.
By Peter O. Torvik
ATTEST
By Julie Getchell
NORWEST BANK MINNESOTA, N.A.
By Randy Heinze
ATTEST
By Holly Kirschman
<PAGE>
ADDENDUM NO. 1
to the
CUSTODIAN CONTRACT
dated August 29, 1991 between
GREAT HALL INVESTMENT FUNDS, INC.
and
NORWEST BANK MINNESOTA, N.A.
This Addendum No. 1, dated March 17, 1992, to the Custodian Contract
dated August 29, 1991 (the "Contract") between Great Hall Investment Funds,
Inc. (the "Company") and Norwest Bank Minnesota, N.A. ("Custodian"),
WITNESSETH THAT:
WHEREAS, the Company is a mutual fund whose shares currently are offered
in the following five series: Great Hall Prime Money Market Fund, Great
Hall U.S. Government Money Market Fund, Great Hall Tax-Free Money Market
Fund, Great Hall National Tax-Exempt Fund and Great Hall Minnesota Insured
Tax-Exempt Fund; and
WHEREAS, the Company heretofore has employed the Custodian, and the
Custodian has agreed to act, as the custodian of the assets of Great Hall
Prime Money Market Fund, Great Hall U.S. Government Money Market Fund and
Great Hall Tax-Free Money Market Fund pursuant to the Contract; and
WHEREAS, the Company desires to employ the Custodian, and the Custodian
hereby agrees to act, as the custodian of the assets of each of Great Hall
National Tax-Exempt Fund and Great Hall Minnesota Insured Tax-Exempt Fund
pursuant to the terms of the Contract.
NOW, THEREFORE, in consideration of the mutual agreements contained in
the Contract and in this Addendum No. 1 thereto, the Company hereby employs
the Custodian, and the Custodian hereby agrees to act, as the custodian of
the assets of each of Great Hall National Tax-Exempt Fund and Great Hall
Minnesota Insured Tax-Exempt Fund pursuant to the terms and conditions of
the Contract, which are incorporated herein by reference.
IN WITNESS WHEREOF, each of the Company and the Custodian has caused
this Addendum No. 1 to the Contract to be executed in its name on the day
and year first above written.
GREAT HALL INVESTMENT FUNDS, INC. NORWEST BANK MINNESOTA, N.A.
By Peter O. Torvik By Jane E. Zilch
Its Chief Executive Officer Its Vice President
ATTEST: ATTEST:
By Julie Getchell By Brent C. Seigel
Its Vice President Its Assistant Vice President
<PAGE>
TRANSFER AGENCY AND SERVICE AGREEMENT
between
GREAT HALL INVESTMENT FUNDS, INC.
and
NORWEST BANK MINNESOTA, N.A.
<PAGE>
TABLE OF CONTENTS
Page
1. Terms of Appointment; Duties of the Bank.......................1
2. Fees and Expenses..............................................2
3. Representations and Warranties of the Bank.....................2
4. Representations and Warranties of the Fund.....................2
5. Indemnification................................................3
6. Covenants of the Fund and the Bank.............................4
7. Termination of Agreement.......................................4
8. Assignment.....................................................4
9. Amendment......................................................4
10. Minnesota Law to Apply.........................................4
11. Merger of Agreement............................................4
<PAGE>
TRANSFER AGENCY AND SERVICE AGREEMENT
This AGREEMENT made as of the 29th day of August, 1991, by and between
Great Hall Investment Funds, Inc., a Minnesota corporation, having its
principal office and place of business at 110 South Sixth Street, Minneapolis,
Minnesota (the "Fund"), and Norwest Bank Minnesota, N.A., a National Banking
Association having its principal office and place of business at Sixth and
Marquette, Minnesota, MN 55479 (the "Bank").
WHEREAS, the Fund is a mutual fund whose shares are offered in the
following three series (the "Funds"): Great Hall Prime Money Market Fund,
Great Hall U.S. Government Money Market Fund and Great Hall Tax-Free Money
Market Fund.
WHEREAS, the Fund desires to appoint the Bank as its transfer agent,
dividend disbursing agent and agent for the in connection with certain other
activities, and the Bank desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. Terms of Appointment; Duties of the Bank
1.1 Subject to the terms and conditions set forth in this Agreement, the Fund
hereby, employs and appoints the Bank to act as, and the Bank agrees to act as,
transfer agent for the Fund's authorized and issued shares of the three series
of common stock, $.001 par value, ("Shares"), dividend disbursing agent and
agent in connection with any accumulation, open-account or similar plans
provided to the shareholders of the Fund ("Shareholders") as set out in the
currently effective prospectus and statement of additional information
("prospectus") of the Fund, including without limitation any periodic
investment plan or periodic withdrawal program.
1.2 The Bank agrees that it will perform the following services:
(a) In accordance with the procedures established from time to time by
agreement between the Fund and the Bank, the Bank shall: (i) receive
for acceptance, orders for the purchase of Shares, and promptly
deliver payment and appropriate documentation therefore to the
Custodian of the Fund authorized pursuant to the Articles of
Incorporation of the Fund (the "Custodian"); (ii) pursuant to purchase
orders, issue the appropriate number of Shares and hold such Shares in
the appropriate Shareholder account; (iii) receive for acceptance,
redemption requests and redemption directions and deliver the
appropriate documentation therefore to the Custodian; (iv) at the
appropriate time as and when it receives monies paid to it by the
Custodian with respect to any redemption, pay over or cause to be paid
over in the appropriate manner such monies as instructed by the
redeeming Shareholders; (v) effect transfers of Shares by the
registered owners thereof upon receipt of appropriate instructions;
(vi) Prepare and transmit payments for dividends and distributions
declared by the Fund; (vii) maintain records of account for and advise
the Fund and its Shareholders as to the foregoing; and (viii) record
the issuance of shares of the Fund and maintain pursuant to SEC Rule
17Ad-10(e) a record of the total number of shares of the Fund which
are authorized, based upon data provided to it by the Fund, and issued
and outstanding. The Bank shall also provide the Fund on a regular
basis with the total number of shares which are authorized and issued
and outstanding but shall have no obligation, when recording the
issuance of shares, to monitor the issuance of such shares, or to take
cognizance of any laws relating to the issue or sale of such shares,
which functions shall be the sole responsibility of the Fund.
(b) In addition to and not in lieu of the services set forth in the above
paragraph (a), the Bank shall: (i) perform all of the customary
services of a transfer agent, dividend disbursing agent and, as
relevant, agent in connection with accumulation, open-account or
similar plans (including without limitation any periodic investment
plan or periodic withdrawal program); including but not limited to:
maintaining all Shareholder accounts, preparing Shareholder meeting
lists, mailing proxies, receiving and tabulating proxies, mailing
Shareholder reports and prospectuses to current Shareholders,
withholding taxes on any non-resident alien, preparing and filing U.S.
Treasury Department Forms 1099 and other appropriate forms required
with respect to dividends and distributions by federal authorities for
all registered Shareholders, preparing and mailing confirmation forms
and statements of account to Shareholder for all purchases and
<PAGE>
redemptions of Shares and other confirmable transactions in
Shareholder accounts, preparing and mailing activity statements for
Shareholders, and providing Shareholder account information and; (ii)
provide a system which will enable the Fund to monitor the total
number of Shares sold in each State.
(c) In addition, the Bank shall identify to the Fund in writing those
transactions and assets to be treated as exempt from the blue sky
reporting to the Fund for each State. The responsibility of the Bank
for the Fund's blue sky State registration status is solely limited to
the initial establishment of transactions subject to blue sky
compliance by the Fund and the reporting of such transactions to the
Fund as provided above.
Procedures applicable to certain of these services may be established
from time to time by agreement between the Fund and the Bank.
2. Fees and Expenses
2.1 For performance by the Bank pursuant to this Agreement, the Fund agrees
to pay the fees to the Bank as set out in the fee schedule attached hereto.
Fees and out-of-pocket expenses and advances identified under Section 2.2 below
may be changed from time to time subject to mutual written agreement between
the Fund and the Bank.
2.2 In addition to the fee paid under Section 2.1 above, the Fund agrees to
reimburse the Bank for out-of-pocket expenses or advances incurred by the Bank
for the items set out in the fee schedule attached hereto. In addition, any
other expenses incurred by the Bank at the request or with the consent of the
Fund will be reimbursed by the Fund.
2.3 The Fund agrees to pay all fees and reimbursable expenses promptly
following the mailing of the respective billing notice.
3. Representation and Warranties of the Bank
The bank represents and warrants to the Fund that:
3.1 It is a National Banking Association duly organized and existing and in
good standing under the laws of the United States of America.
3.2 It is duly qualified to carry on its business in the State of Minnesota.
3.3 It is empowered under applicable laws and by its charter and by-laws to
enter into and perform this Agreement.
3.4 All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
3.5 It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement.
4. Representations and Warranties of the Fund
The Fund represents and warrants to the Bank that:
4.1 It is a corporation duly organized and existing and in good standing
under the laws of the State of Minnesota.
4.2 It is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform this Agreement.
4.3 All corporate proceedings required by said Articles of Incorporation and
By-Laws have been taken to authorize it to enter into and perform this
Agreement.
4.4 It is an open-end diversified management investment company registered
under the Investment Company Act of 1940.
<PAGE>
4.5 A registration statement under the Securities Act of 1933 is currently
effective and will remain effective, and appropriate state securities law
filings have been made and will continue to be made, with respect to all Shares
of the Fund being offered for sale.
5. Indeminfication
5.1 Subject to Section 5.2 the Bank shall not be responsible for, and the
Fund shall indemnify and hold the Bank harmless from and against, any and all
losses, damages, costs, charges, counsel fees, payments, expenses and liability
arising out of or attributable to:
(a) All actions of the Bank or its agent or subcontractors required to
be taken pursuant to this Agreement, provided that such actions are
taken and without negligence or willful misconduct.
(b) The Fund's refusal or failure to comply with the terms of this
Agreement, or which arise out of the Fund's negligence or willful
misconduct.
(c) The reliance on or use by the Bank or its agents or subcontractors
of information, records and documents which (i) are received by the
Bank or its agents or subcontractors and furnished to it by or on
behalf of the Fund, and (ii) have been prepared and/or maintained by
the Fund or any other person or firm on behalf of the Fund.
(d) The reliance on, or the carrying out by the bank or its agents or
subcontractors of any instructions or requests of the Fund.
(e) The offer or sale of Shares in violation of any requirement under
the federal securities laws or regulations or the securities laws or
regulations of any state that such Shares be registered in such state
or in violation of any stop order or other determination or ruling by
an federal agency or any state with respect to the offer or sale of
such Shares in such state.
5.2 The Bank shall indemnify and hold the Fund harmless from and against any
and all losses, damages, costs, charges, counsel fees, payments, expenses and
liability arising out of or attributable to any action or failure or omission
to act by the Bank as a result of the Bank's negligence or willful misconduct.
5.3 At any time the Bank may apply to any officer of the Fund for
instructions, and may consult with legal counsel with respect to any matter
arising in connection with the services to be performed by the Bank under this
Agreement, and the Bank and its agents or subcontractors shall not be liable
and shall be indemnified by the Fund for any action taken or omitted by it in
reliance upon such instructions or upon the opinion of such counsel. The Bank,
its agents and subcontractors shall be protected and indemnified in acting upon
any paper or document furnished by or on behalf of the Fund, reasonably
believed to be genuine and to have been signed by the proper person or persons,
or upon any instruction, information, data, records or documents provided to
the Bank or its agents or subcontractors by machine readable input, telex, CRT
data entry or other similar means authorized by the Fund, and shall not be held
to have notice of any change of authority of any person, until receipt of
written notice thereof from the Fund. The Bank, its agents and subcontractors
shall also be protected and indemnified in recognizing stock certificates which
are reasonably believed to bear the proper manual or fascimile signatures of
the officers of the Fund, the proper countersignature of any former transfer
agent or registrar, or of a co-transfer agent or co-registrar.
5.4 In the event either party is unable to perform its obligations under the
terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for damages to
the other for any damages resulting from such failure to perform or otherwise
from such causes.
5.5 Neither party to this Agreement shall be liable to the other party for
consequential damages under any provision of this Agreement or for any act or
failure to act hereunder.
5.6 In order that the indemnification provisions contained in this Article 5
shall apply, upon the assertion of a claim for which either party may be
required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The
party who may be required to indemnify shall have the option to participate
with the party seeking indemnification in the defense of such claim. The party
<PAGE>
seeking indemnification shall in no case confess any claim or make any
compromise in any case in which the other party may be required to indemnify it
except with the other party's prior written consent.
6. Covenants of the Fund and the Bank
6.1 The Fund shall promptly furnish to the Bank the following:
(a) A certified copy of the resolution of the Board of Directors of
the Fund authorizing the appointment of the Bank and the execution and
delivery of this Agreement.
(b) A copy of the Articles of Incorporation and By-Laws of the Fund
and all amendments thereto.
6.2 The Bank hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Fund for safekeeping of stock
certificates, check forms and facsimile signature imprinting devices, if any;
and for the preparation or use of, and for keeping account of, such
certificates, forms and devices.
6.3 The Bank shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. To the extent
required by Section 31 of the Investment Company Act of 1940, and the Rules
thereunder, the Bank agrees that all such records prepared or maintained by the
Bank relating to the services to be performed by the Bank hereunder are the
property of the Fund and will be preserved, maintained and made available in
accordance with such Section and Rules, and will be surrendered promptly to the
Fund on and in accordance with its request.
6.4 The Bank and the Fund agree that all books, records, information and data
pertaining to the business of the other party which are exchanged or received
pursuant to the negotiation or the carrying out of this Agreement shall remain
confidential, and shall not be voluntarily disclosed to any other person,
except as may be required by law.
6.5 In case of any requests or demands for the inspection of the Shareholder
records of the Fund, the Bank will endeavor to notify the Fund and to secure
instructions from an authorized officer of the Fund as to such inspection. The
Bank reserves the right, however, to exhibit the Shareholder records to any
person whenever it is advised by its counsel that it may be held liable for the
failure to exhibit the Shareholder records to such person.
7. Termination of Agreement
7.1 This Agreement may be terminated by either party upon ninety (90) days
written notice to the other.
7.2 Should the Fund exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be borne by
the Fund.
8. Assignment
8.1 Neither this Agreement nor any rights or obligations hereunder may be
assigned by either party without the written consent of the other party.
8.2 This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
9. Amendment
This Agreement may be amended or modified by a written agreement executed
by both parties and authorized or approved by a resolution of the Board of
Directors of the Fund.
10. Minnesota Law to Apply
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of the State of Minnesota.
11. Merger of Agreement
This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject hereof
whether oral or written.
<PAGE>
Notwithstanding anything to the contrary herein, there shall be no material
change in the method, manner or format of the service being delivered by the
Bank without 90 days prior written notice to the Fund.
IN WITNESS WHEREOF, the parties thereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly
authorized officers, as of the day and year first above written.
GREAT HALL INVESTMENT FUNDS, INC. NORWEST BANK MINNESOTA, N.A.
BY: Peter O. Torvik BY: Randy Heinze
ATTEST: ATTEST:
BY: Julie Getchell BY: Holly Kirschman
<PAGE>
ADDENDUM NO. 1
to the
TRANSFER AGENCY AND SERVICE AGREEMENT
dated August 29, 1991 between
GREAT HALL INVESTMENT FUNDS, INC.
and
NORWEST BANK MINNESOTA, N.A.
This Addendum No. 1, dated March 17, 1992, to the Transfer Agency and
Service Agreement dated August 29, 1991 (the "Agreement") between Great Hall
Investment Funds, Inc. (the "Company") and Norwest Bank Minnesota, N.A.
("Norwest"),
WITNESSETH THAT:
WHEREAS, the Company is a mutual fund whose shares currently are offered
in the following five series: Great Hall Prime Money Market Fund, Great Hall
U.S. Government Money Market Fund, Great Hall Tax-Free Money Market Fund, Great
Hall National Tax-Exempt Fund and Great Hall Minnesota Insured Tax-Exempt Fund;
and
WHEREAS, the Company heretofore has employed Norwest, and Norwest has
agreed to act, as the transfer agent and dividend disbursing agent of Great
Hall Prime Money Market Fund, Great Hall U.S. Government Money Market Fund and
Great Hall Tax-Free Money Market Fund pursuant to the Agreement; and
WHEREAS, the Company desires to employ Norwest, and Norwest hereby agrees
to act, as the transfer agent and dividend disbursing agent of each of Great
Hall National Tax-Exempt Fund and Great Hall Minnesota Insured Tax-Exempt Fund
pursuant to the terms of the Agreement.
NOW, THEREFORE, in consideration of the mutual agreements contained in the
Agreement and in this Addendum No. 1 thereto, the Company hereby employs
Norwest, and Norwest hereby agrees to act, as the transfer agent and dividend
disbursing agent of each of Great Hall National Tax-Exempt Fund and Great Hall
Minnesota Insured Tax-Exempt Fund pursuant to the terms and conditions of the
Agreement, which are incorporated herein by reference.
IN WITNESS WHEREOF, each of the Company and Norwest has caused this
Addendum No. 1 to the Agreement to be executed in its name on the day and year
first above written.
GREAT HALL INVESTMENT FUNDS, INC. NORWEST BANK MINNESOTA, N.A.
By Peter O. Torvik By Jane E. Zilch
Its Chief Executive Officer Its Vice President
ATTEST: ATTEST:
By Julie Getchell By Brent C. Seigel
Its Vice President Its Assistant Vice President
<PAGE>
GREAT HALL INVESTMENT FUNDS
FEE SCHEDULE
Revised September 12, 1995
Effective with August 1995 activity
The following is the schedule of fees to be charged to the Great Hall
Investment Funds, Inc. for custody, portfolio accounting and transfer agent
services provided by Norwest Bank Minnesota, N.A. This schedule is an
attachment to the Custody and Transfer Agent Agreements between the parties
dated August 29, 1991.
I. Fund Accounting Fees
A. Minimum Monthly Fee
$2,000 per fund/portfolio. The monthly minimum fee per portfolio does
not apply to any portfolio if the asset based fee discussed in I.D.
below produces greater revenue than the aggregate minimum.
Introduction of new funds require further analysis.
B. Asset Based Fee on a Total Relationship Basis
First $1 billion $0.205/$1,000
Next $1 billion $0.100/$1,000
Over $2 billion $0.075/$1,000
II. Domestic Security Custody Fees
A. Asset Based Fee on a Total Relationship Basis
First $1 billion $0.05/$1,000
Next $1 billion $0.02/$1,000
Over $2 billion $0.01/$1,000
B. Transaction Fees
$15.00 for each Purchase, Sale, Maturity, Deposit, Withdrawal and
Corporate Reorganization Transaction
C. Balance Credits
Norwest will offset fees with balance credits on the custody account
calculated at 75% of the bank credit rate, 75% of the average 91-day
Treasury Bill discount rate, applied to average custody collected cash
balances for the month. Balance credits can be used to offset fees.
Any credits in excess of fees will be carried forward from month to
month through the end of the calendar year.
<PAGE>
III. Transfer Agent Fees
A. Monthly Shareholder Account Fee - all funds
$25.00 per account, which includes both active and inactive
shareholders accounts
B. Exit Fee
Norwest will not apply any of the above transfer agent fees after
conversion of transfer agent services to Great Hall Investment Funds'
successor agent. Only out-of-pocket expenses will be billed.
IV. Notes to the Above Fee Schedule
A. All fees will be calculated and billed on a monthly basis, at 1/12th
the annual rate on monthly average net assets.
B. The above schedule does not include out-of-pocket expenses incurred by
Norwest on behalf of the funds. Examples of out-of-pocket expenses
include, but are not limited to, equipment, communication line costs,
postage, microfiche, back-up recovery, pricing services, overnight
mailing services, foreign registration, special report requests, etc.
C. Any fees or out-of pocket expenses not paid within 30 days of the date
of the original invoice will be charged a late payment fee of 1% per
month until payment of the fees are received by Norwest.
D. This schedule is effective upon acceptance below and applied to the
current billing period.
Theresa J. Burkes Julie Getchell
- --------------------------------- ----------------------------
Norwest Bank Minnesota, N.A.
9/15/95 9/12/95
- --------------------------------- ----------------------------
Date Date
<PAGE>
SHAREHOLDER ACCOUNT SERVICES AGREEMENT
This Agreement is made and entered into as of the 17th day of May, 1995
by and between Great Hall Investment Funds, Inc., a corporation organized and
existing under the laws of the State of Minnesota ("Great Hall"), on behalf of
each portfolio represented by a series of shares of common stock of Great Hall
that adopts this Agreement (the "Funds") (the Funds, together with the date
each Fund adopts this Agreement, are set forth in Exhibit A hereto, which
shall be updated from time to time to reflect additions, deletions or other
changes thereto), and Dain Bosworth Incorporated ("DBI") and Rauscher Pierce
Refsnes, Inc. ("RPR" and, together with DBI, the "Underwriters"), each a
corporation organized and existing under the laws of the State of Delaware.
This Agreement supersedes and takes the place of that certain Sub-Transfer
Agency Agreement dated as of November 17, 1993 between Great Hall and Regional
Operations Group, Inc. ("ROG").
W I T N E S S E T H:
WHEREAS, Great Hall is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, DBI and RPR serve as principal underwriters of each Fund's
shares of common stock; and
WHEREAS, Norwest Bank Minnesota, N.A. ("Norwest"), a national banking
association, currently serves as the transfer agent, dividend disbursing agent
and shareholder accounting services agent for each of the Funds; and
WHEREAS, each Underwriter, itself or through its affiliated clearing
firm, ROG, performs various dividend disbursing and shareholder account
services (as outlined below) for owners of Fund shares who maintain evidence
of their Fund shares with the applicable Underwriter or ROG in a master
account (a separate master account being maintained for each Fund) in the name
of the applicable Underwriter or ROG as the record owner of the Fund shares
(the "Master Accounts"), each of which is comprised of individual accounts
(the "Individual Accounts") that, in turn, are comprised of evidence of shares
of the applicable Fund acquired by brokerage customers of the Underwriters
(the "Customers"); and
WHEREAS, in consideration for the Underwriter's agreement to perform (or
cause ROG to perform) the aforementioned services, Great Hall agrees to
compensate the Underwriters and to reimburse certain costs and expenses
incurred by Underwriters in connection with the performance of said services
pursuant to the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter contained, Great Hall and the Underwriters hereby agree as
follows:
<PAGE>
1. Scope of Appointment; Services.
(a) Subject to the conditions set forth in this Agreement, the
Underwriters hereby undertake and agree to perform (or to cause ROG to
perform) certain dividend disbursing and shareholder account services as
detailed below (collectively, the "Services") with respect to the Customers
and the Individual Accounts encompassed within the Master Accounts.
(b) The Services shall include, but not be limited to, the following:
(1) The maintenance of separate records for each Customer and
Individual Account, which records shall reflect shares purchased and
redeemed and share balances.
(2) The disbursement or crediting to Individual Accounts of
Customers of all proceeds of redemptions of Fund shares and all
dividends and other distributions not reinvested in Fund shares.
(3) The preparation and transmittal to Customers of periodic
account statements showing the total number of shares owned by each
Customer as of the statement closing date, purchases and redemptions of
Fund shares by the Customer during the period covered by the statement,
and the dividends and other distributions paid to the Customer during
the statement period (whether paid in cash or reinvested in Fund
shares).
(4) The preparation and proper transmittal of all required tax
reporting to the Internal Revenue Service, state taxing authorities and
the Customers and the accounting for, reporting and submitting of
withholding taxes, as required by applicable law, on all Individual
Accounts.
(5) The transmittal to Customers of proxy materials, reports,
and other information required to be sent to shareholders under
applicable federal and state securities and other laws, and, upon
request of Great Hall, the transmittal to Customers of material
communications necessary and proper for receipt by all beneficial
shareholders of the Funds.
(6) The transmittal to Great Hall and Norwest each business
day of the net purchase and redemption orders by and on behalf of the
Customers during such day.
(7) The transmittal to Great Hall or its designee of such
periodic reports or information as is necessary to enable Great Hall to
comply with state Blue Sky requirements.
(8) The performance of such additional dividend disbursing and
shareholder account services with respect to the Master Accounts, the
Individual Accounts and the Customers as Great Hall shall reasonably
request from time to time; provided, however, that this Agreement does
not and shall not contemplate the provision of any services by the
<PAGE>
Underwriters or ROG: (A) that would necessitate that DBI, RPR or ROG be
registered as a transfer agent pursuant to the federal securities laws;
or (B) the payment for which would be required to be made under a plan
of distribution adopted by Great Hall in accordance with Rule 12b-1
under the 1940 Act.
(c) The Underwriters agree to provide (or to cause ROG to provide)
the necessary facilities, equipment and personnel to perform its duties and
obligations hereunder in accordance with industry practice.
2. Records; Miscellaneous Covenants.
(a) The Underwriters represent and covenant that (1) during the term
of this Agreement, they will comply (or cause ROG to comply) with all laws,
rules and regulations applicable to its provision of the Services hereunder
and (2) they have, and during the term of this Agreement will continue to
have, full corporate power and authority necessary to enter into and to
perform the terms of this Agreement.
(b) The Underwriters will maintain (or cause ROG to maintain)
customary records in connection with the provision of Services hereunder.
Upon the request of Great Hall, the Underwriters shall provide (or cause ROG
to provide) to Great Hall or its agents or representatives copies of such
records as may be necessary to enable Great Hall or its agents or
representatives to monitor and review the Services, or to comply with any
request of a governmental body or self-regulatory organization or a Fund
shareholder. The Underwriters and ROG agree that they will permit Great Hall
or its representatives to have reasonable access to their personnel and
records in order to facilitate the monitoring of the performance and quality
of the Services.
3. Notice of Non-Performance.
The Underwriters hereby agrees to promptly notify Great Hall if for any
reason they or ROG are unable to perform fully and promptly any of the
Underwriters obligations under this Agreement.
4. No Limit on Other Actions by Great Hall.
In no way shall the provisions of the Agreement limit the authority of
Great Hall to take such action as it may deem appropriate or advisable in
connection with all matters relating to the operations of Great Hall and the
sale of Fund shares.
5. Compensation.
In consideration of the performance of the Services by ROG hereunder,
Great Hall agrees to cause each Fund to pay the Underwriters a fee (and to
reimburse the Underwriters for certain out-of-pocket expenses) in such amount,
at such time and in such manner as is set forth with respect to each Fund in
Exhibit A hereto.
<PAGE>
6. Indemnification.
(a) Great Hall agrees to indemnify the Underwriters and ROG and to
hold the Underwriters and ROG harmless from and against any loss by or
liability to any Fund or a third party (including reasonable legal fees and
other reasonable out-of-pocket costs of defending against any related claim or
suit), in connection with any claim or suit assessing any such liability
arising out of or attributable to actions taken by the Underwriters or ROG
pursuant to this Agreement, unless the Underwriters or ROG acted negligently
or in bad faith.
(b) The Underwriters will hold harmless and indemnify Great Hall and
each Fund from and against any loss or suit (including reasonable legal fees
and other reasonable out-of-pocket costs of defending any related claim or
suit) arising out of the Underwriters' or ROG's negligent or bad faith failure
to comply with the terms of this Agreement or breach of any representation,
warranty or covenant contained herein.
7. Effective Date; Termination.
This Agreement shall be effective as of the date first above written.
This Agreement may be terminated without penalty at any time by the
Underwriters or by Great Hall upon 30 days' written notice to the other party.
8. Interpretation; Governing Law.
This Agreement shall be subject to and interpreted in accordance with
all applicable provisions of law, including, without limitation, the 1940 Act
and the rules and regulations promulgated thereunder. To the extent that the
provision herein contained conflict with any such applicable provisions of
law, the latter shall control. The laws of the State of Minnesota shall
otherwise govern the construction, validity and effect of this Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
GREAT HALL INVESTMENT FUNDS,
INC.
By Julie K. Getchell
--------------------------
Name: Julie K. Getchell
Title: Vice President, CFO
DAIN BOSWORTH INCORPORATED RAUSCHER PIERCE REFSNES, INC.
By Daniel J. Reuss By Daniel J. Reuss
---------------------------------- --------------------------
Name: Daniel J. Reuss Name: Daniel J. Reuss
Title: Executive Vice President Title: Vice President
Adopted and consented to as of the 17th day of May, 1995 by:
REGIONAL OPERATIONS GROUP, INC.
By Jerry W. Hayes
----------------------------------
Name: Jerry W. Hayes
Title: President, CEO
<PAGE>
EXHIBIT A
to
SHAREHOLDER ACCOUNT SERVICES AGREEMENT
EFFECTIVE
FUND DATE MONTHLY FEE
- ---- ------------ -----------------------------------
Great Hall Prime Money May 17, 1995 1/12 of $9.00 per year per customer
Market Fund (Series A)
Great Hall U.S. Government May 17, 1995 1/12 of $9.00 per year per customer
Money Market Fund (Series B)
Great Hall Tax-Free Money May 17, 1995 1/12 of $9.00 per year per customer
Market Fund (Series C)
The monthly fee shall be paid within ten business days following the end
of the month covered by such payment. The Funds shall also reimburse the
Underwriters for reasonable postage and statement printing expenses incurred
by the Underwriters.
<PAGE>
FAEGRE & BENSON
Professional Limited Liability Partnership
2200 Norwest Center
90 South Seventh Street
Minneapolis, Minnesota 55402
Great Hall Investment Funds, Inc.
Dain Bosworth Plaza
60 South Sixth Street
Minneapolis, Minnesota 55402
Ladies and Gentlemen:
Reference is made to the Registration Statement on Form N1-A (File Nos:
33-41395 and 811-6340) (the "Registration Statement") which you have filed with
the Securities and Exchange Commission for the purposes of registering Great
Hall Investment Funds, Inc. (the "Company") as an open-end management
investment company pursuant to the Investment Company Act of 1940 and of
registering for sale by the Company an indefinite number of the Company's
common shares, par value $.01 per share, pursuant to the Securities Act of
1933. This opinion relates solely to the Company's Series A common shares,
Series B common shares, Series C common shares, Series D common shares and
Series E common shares (collectively, the "Shares").
We are familiar with the proceedings to date with respect to the proposed
sales by the Company of the Shares, and have examined such records, documents
and matters of law, and have satisfied ourselves as to such matters of fact, as
we consider relevant for the purposes of this opinion.
We are of the opinion that:
(a) The Company is a legally organized corporation under
Minnesota law; and
(b) The Shares to be sold by the Company will be legally issued,
fully paid and nonassessable, if and when issued and sold upon the
terms and in the manner set forth in the Registration Statement.
We consent to the reference to this firm under the caption "Counsel and
Auditors" in each Statement of Additional Information contained in the
Registration Statement and to the use of its opinion as an exhibit to the
Registration Statement.
Dated: November 28, 1995
Very truly yours,
/s/ Faegre & Benson PLLP
<PAGE>
Independent Auditors' Consent
The Board of Directors
Great Hall Investment Funds, Inc.
We consent to the use of our reports included herein and the reference to our
Firm under the heading "COUNSEL AND AUDITORS" in Part B of the Registration
Statement on Form N-1A.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
November 28, 1995
<PAGE>
EXHIBIT 13
INVESTMENT REPRESENTATION LETTER
August 7, 1991
Great Hall Investment Funds, Inc.
110 South Sixth Street
Minneapolis, Minnesota 55402
Dear Sir/Madam:
In connection with the purchase by Inter-Regional Financial Group, Inc.
(the "Purchaser") of 100,000 shares of capital stock of Great Hall U.S.
Government Money Market Fund (a fund within Great Hall Investment Funds, Inc.)
(the "Stock"), the Purchaser hereby represents that it is acquiring such Stock
for investment with no intention of reselling or otherwise distributing the
Stock. The Purchaser hereby further agrees that any transfer of any such stock
of any interest in it shall be subject to the following conditions:
1. The Purchaser shall furnish you and counsel satisfactory to you
prior to the time of transfer, a written description of the
proposed transfer specifying its nature and consequence and giving
the name of the proposed transferee.
2. You shall have obtained from your counsel a written opinion stating
whether in the opinion of such counsel the proposed transfer may be
effected without registration under the Securities Act of 1933. If
such opinion states that such transfer may be so effected the
Purchaser shall than be entitled to transfer its Stock in
accordance with the terms specified in its description of the
transaction to you. If such opinion states that the proposed
transfer may not be so effected, the Purchaser will not be entitled
to transfer its Stock unless such Stock is registered.
The Purchaser hereby authorizes you to take such action as you shall
reasonably deem appropriate to prevent any violation of the Securities Act of
1933 in connection with the transfer of Stock, including the imposition of a
requirement that any transferee of the Stock sign a letter agreement similar to
this one.
Very truly yours,
INTER-REGIONAL FINANCIAL GROUP, INC.
By: /s/ Connie L. Busch
Its: Vice President
<PAGE>
As Adopted at Board of
Directors Meeting on
March 17, 1992
GREAT HALL INVESTMENT FUNDS, INC.
DISTRIBUTION EXPENSE PLAN
WHEREAS, Rule 12b-1 ("Rule 12b-1") under the Investment Company Act of
1940, as amended (the "1940 Act") provides that, except as provided in Rule
12b-1, it shall be unlawful for any registered open-end management investment
company (other than such company complying with the provisions of Section 10(d)
under the 1940 Act) to act as distributor of securities of which such company
is the issuer, except through an underwriter.
WHEREAS, Rule 12b-1 provides that a registered open-end management
investment company will be deemed to be acting as a distributor of securities
of which it is the issuer, other than through an underwriter, if it engages
directly or indirectly in financing any activity which is primarily intended to
result in the sale of shares issued by such company, including but not
necessarily limited to, advertising, compensation of underwriters, dealers, and
sales personnel, the printing and mailing of prospectuses to other than current
shareholders, and the printing and mailing of sales literature.
WHEREAS, Great Hall Investment Funds, Inc., a Minnesota corporation
("Great Hall"), on behalf of the portfolios represented by each series of
shares of common stock of Great Hall (the "Great Hall Funds"), has engaged Dain
Bosworth Incorporated and Rauscher Pierce Refsnes, Inc. (together, the "Co-
Distributors") as principal underwriters of each Fund's shares pursuant to a
Co-Distributor Agreement (the "Co-Distributor Agreement").
WHEREAS, the Co-Distributor Agreement provides that the Co-Distributors
will receive as compensation for services they perform thereunder, in addition
to a sales charge, if any, from certain of the Funds, a distribution fee from
each Great Hall Fund for which Great Hall adopts this Plan (the "Great Hall
12b-1 Funds") based on a percentage of such Great Hall 12b-1 Fund's average
daily net assets (which distribution fee will be used by the Co-Distributors to
compensate broker-dealers, including the Co-Distributors and their registered
representatives, for their sale of Great Hall 12b-1 Fund shares, and may also
be used to pay other advertising and promotional expenses in connection with
the distribution of Great Hall 12b-1 Fund shares).
WHEREAS, the activities of Great Hall as hereinbefore described may be
deemed to constitute the financing of an activity primarily intended to result
in the sale of the Great Hall 12b-1 Funds' shares, and Great Hall may be deemed
a distributor of said Great Hall 12b-1 Funds' shares.
<PAGE>
WHEREAS, Rule 12b-1 provides that a registered, open-end management
company may act as a distributor of securities of which it is the issuer,
provided that any payments made by such company in connection with such
distribution are made pursuant to a written plan describing all material
aspects of the proposed financing of distribution and that all agreements with
any person relating to implementation of the plan are in writing and provided,
further, that certain additional conditions are met.
NOW, THEREFORE, the following shall constitute the plan of distribution
(the "Plan") pursuant to which certain of the costs of distribution of each
Great Hall 12b-1 Fund's shares of common stock (the "Shares"), shall be
financed.
Section 1. Payment of Costs of Distribution.
As long as the Co-Distributor Agreement, or any amendment or amendments
thereto complying with Sections 5 and 6 of the Plan, shall remain in effect,
each Co-Distributor shall receive from the Great Hall 12b-1 Funds, as
compensation for services it performs under the Co-Distributor Agreement, in
addition to a sales charge, if any, of the Funds having such a sales charge, a
quarterly distribution fee in an amount set forth in the Co-Distributor
Agreement and in Exhibit A hereto, which distribution fee shall be used by each
Co-Distributor to compensate broker-dealers, including such Co-Distributor and
its registered representatives, for their sales of 12b-1 Fund shares and to pay
other advertising and promotional expenses in connection with the distribution
of Great Hall 12b-1 Fund shares. The advertising and/or promotional expenses
referred to in the foregoing sentence may include, but shall not be limited to,
the expenses of the printing of Prospectuses and Statements of Additional
Information for new shareholders, preparation and distribution of sales
literature and advertising of any type.
Additionally, each Co-Distributor and each Fund's investment adviser (the
"Adviser"), in their sole and absolute discretion, may from time to time out of
their own assets pay for certain additional costs of distributing the Funds'
shares. Any such arrangements to pay such additional costs out of their own
assets may be commenced or discontinued by the Co-Distributor or the Adviser at
any time.
Section 2. Approvals by Great Hall and the Great Hall 12b-1 Funds.
(a) Great Hall represents that the Plan, together with the Co-
Distributor Agreement, has been approved by a vote of the Board of Directors of
Great Hall and by the vote of a majority of the directors of Great Hall who are
not "interested persons" of Great Hall, as defined in Section 2(a)(19) of the
1940 Act and the rules, regulations, and releases relating thereto, and have no
direct or indirect financial interest in the operation of the Plan, or in the
Co-Distributor Agreement or any other agreement related to the Plan
("Interested Persons"), cast in person at a meeting called for the purpose of
voting on the Plan and the Co-Distributor Agreement.
<PAGE>
(b) In approving the Plan and the Co-Distributor Agreement, the
directors of Great Hall have undertaken the following:
(1) the directors have concluded, in the exercise of reasonable
business judgment and in light of their fiduciary duties under state law and
Sections 36(a) and 36(b) of the 1940 Act, that the Plan will benefit each Great
Hall 12b-1 Fund and its shareholders;
(2) the directors have requested and evaluated such information
as was reasonably necessary to make an informed determination of whether the
Plan should be implemented, and, in connection therewith, officials of the Co-
Distributors and the Adviser, as parties to agreements related to the Plan,
have furnished such information reasonably necessary for the foregoing
purposes;
(3) the directors have considered and given appropriate weight to
all pertinent factors, including, without limitation, the following:
(A) the need for independent counsel or experts to assist
the directors in reaching a determination;
(B) the nature of the problems or circumstances which
purportedly make implementation of the Plan necessary or
appropriate;
(C) the causes of such problems or circumstances;
(D) the way in which the Plan would address these problems
or circumstances and how it would be expected to resolve or
alleviate them, including the nature and approximate amount of the
expenditures, the relationship of such expenditures to the overall
cost structure of the Great Hall 12b-1 Funds, the nature of the
anticipated benefits, and the time it would take for those benefits
to be achieved;
(E) the merits of possible alternative plans;
(F) the interrelationship between the Plan and the
activities of any other person who finances or has financed
distribution of the Shares, including whether any payments by any
of the Great Hall 12b-1 Funds to such other person are made in such
a manner as to constitute the indirect financing of distribution by
such Great Hall 12b-1 Fund; and
(G) the possible benefits of the Plan to any other person
relative to those expected to inure to the Great Hall 12b-1 Funds.
<PAGE>
(c) The Plan shall become effective with respect to each Great Hall
12b-1 Fund upon approval by a vote of at least a majority of the outstanding
voting securities of such Great Hall 12b-1 Fund.
Section 3. Reports to and Review by the Board of Directors of Great
Hall.
(a) Any person authorized to direct the disposition of monies paid or
payable by the Great Hall 12b-1 Funds pursuant to the Plan, the Co-Distributor
Agreement, or any other agreement related to the Plan shall provide the Board
of Directors of Great Hall, and the Board of Directors of Great Hall shall
review, at least quarterly, a written report of the amounts so expended and the
purposes for which such expenditures were made.
(b) The Co-Distributor Agreement and any other agreement related to the
Plan shall by their respective terms provide that appropriate officers of each
Co-Distributor or any party to such other agreement(s) shall provide the
directors of Great Hall with such information as may be reasonably necessary to
the directors of Great Hall for the purposes required by Sections 2(a), 2(b)
and 7(c) of the Plan.
Section 4. Selection of Great Hall Directors.
In connection with the implementation and continuation of the Plan, Great
Hall hereby undertakes to commit the selection and nomination of those
directors of Great Hall who are not "interested persons" of Great Hall, as
defined in Section 2(a)(19) of the 1940 Act and the rules, regulations, and
releases pursuant thereto, to a committee comprised of such directors who are
not such "interested persons."
Section 5. Concerning the Co-Distributor Agreement and Other Agreements
Related to the Plan.
In addition to the requirement contained in Sections 3(b) and 7(a) of the
Plan, the Co-Distributor Agreement and any other agreement related to the Plan
shall be in writing and shall provide that such agreement shall be terminated:
(a) at any time, without the payment of any penalty, by vote of a
majority of the members of the Board of Directors of Great Hall who are
not Interested Persons or by vote of a majority of the outstanding Shares
on not more than sixty days' written notice to the other party thereto;
and
(b) automatically in the event of its assignment.
Section 6. Amendments and Modifications.
The Plan, the Co-Distributor Agreement and any other agreement related to
the Plan shall not be amended, modified, or superseded except by an agreement
in writing, and, in addition:
<PAGE>
(a) may not be amended with respect to any Great Hall 12b-1 Fund
to increase materially the amount to be spent by such Great Hall 12b-1
Fund for costs of distribution, as in Section 1 of the Plan provided,
without the approval of the holders of a majority of the outstanding
shares of the such Great Hall 12b-1 Fund; and
(b) may not be amended in any material manner unless such
amendment has been approved in the manner provided in, and consistent
with the procedures specified by, Sections 2(a) and 2(b) of the Plan.
Section 7. Continuation and Termination.
(a) The Plan, the Co-Distributor Agreement and any other agreement
related to the Plan shall continue in effect for a period of more than one year
from the date of its adoption or execution only as long as the continuance is
specifically approved at least annually in the manner described in Section 2(a)
of the Plan.
(b) The Plan may be terminated by any Great Hall 12b-1 Fund at any time
by vote of a majority of the members of the Board of Directors of Great Hall
who are not Interested Persons or by vote of a majority of the outstanding
voting securities of such Great Hall 12b-1 Fund.
(c) In determining whether the Plan shall be continued or terminated as
in this Section 7 provided, the directors of Great Hall shall make such
determination in the manner provided in, and consistent with the procedures
specified by, Sections 2(a) and 2(b) of the Plan; provided that, in addition to
the factors specified in Section 2(b)(3), the directors of Great Hall shall
also consider and give appropriate weight to the following factors:
(1) the effect of the Plan on existing shareholders; and
(2) whether the Plan has in fact produced the anticipated benefits for
each Great Hall Fund and its shareholders.
Section 8. Preservation of Information.
(a) Great Hall shall, for a period of not less than six years, preserve
the following information and documentation:
(1) the Plan;
(2) the Co-Distributor Agreement;
(3) any other agreement related to the Plan;
<PAGE>
(4) any report made pursuant to Section 3 of the Plan; and
(5) all minutes which are recorded as a result of the
requirements of Sections 2, 6 or 7 of the Plan and which relate to the
approval, amendment or continuation of the Plan, the Co-Distributor
Agreement or any other agreement related to the Plan.
(b) With respect to the information and documentation required to be
preserved pursuant to subsection (a) of this Section 8, such information and
documentation shall be preserved in an easily accessible place for a period of
not less than two years.
Section 9. Majority of the Outstanding Voting Securities.
Wherever referred to in the Plan, the vote or approval of the holders of
a majority of the outstanding shares or voting securities of a Great Hall 12b-1
Fund shall mean the lesser of (a) the vote of 67% or more of the voting
securities of such Great Hall 12b-1 Fund present at a regular or special
meeting of shareholders duly called, if the holders of more than 50% of such
Great Hall 12b-1 Fund's outstanding voting securities are present or
represented by proxy, or (b) the vote of more than 50% of the outstanding
voting securities of such Great Hall 12b-1 Fund.
<PAGE>
EXHIBIT A
to
DISTRIBUTION EXPENSE PLAN
12b-1 PLAN
GREAT HALL 12b-1 FUND EFFECTIVE DATE COMPENSATION
Great Hall National Tax- March 17, 1992 (1)
Exempt Fund (Series D)
Great Hall Minnesota March 17, 1992 (1)
Insured Tax-Exempt
Fund (Series E)
___________________________________
(1) Under the Co-Distributor Agreement, in addition to the sales charge
applicable to each of Series D and Series E of Great Hall (as set forth
in each series' current prospectus), each Co-Distributor shall receive a
quarterly distribution fee equal to one-quarter of .30% of that portion
of each series' respective average daily net assets (during such calendar
quarter) that are attributable to shareholder accounts of such Co-
Distributor. Such quarterly fee may be waived in whole or in part by the
parties hereto.
<PAGE>
SEC YIELD
SEC Yield, based on a 30-day period, is computed for the National Tax-
Exempt Fund and Minnesota Insured Tax-Exempt Fund using the following
formula:
Yield = 2*((((A-B)/C*D)+1)^6 - 1)
A = Dividend and interest income
B = Expenses accrued for the period
C = Average daily number of shares outstanding during the period
that were entitled to receive dividends
D = Maximum offering price per share on the last day of the
period
Further Component Explanations:
A. The amount of income used for this calculation is computed for each
security and totalled for the account. Each security's income is
calculated in one of four ways:
1) For bond-like securities with more than 60 days to maturity, a
yield to maturity (or call) is calculated for each day within the
30-day period. This yield is applied to each day's market value
(including accrued interest) and summed for the thirty days. For
tax exempt OID bonds, original issue date and price are used to
calculate each day's Y-T-M. For tax exempt bonds with market
discount (but not OID) par value and coupon rate are used, instead
of market value and Y-T-M (accrued interest is still included).
Finally, for securities with buys and sells within the period,
only settled positions apply in the calculation.
2) For variable rate securities and securities that mature within 60
days from the first day of the 30-day period, actual income earned
is used instead of any Y-T-M calculations.
3) For stock-like securities, the annual dividend is divided by 360
to achieve a daily rate. This rate is applied to each day's
settled position and summed for the thirty days.
4) For mortgage-backed securities, the actual income earned for the
period plus realized gain or minus realized loss on paydown is
used. If no paydown exists for the period, an estimated paydown
is used in the calculation.
B. Actual expenses earned (charged) for the 30-day period are used
in the calculation.
C. Settled shares are used in the calculation, since only these
shares are contributing toward the day's earnings and eligible to
participate in the daily dividend.
D. The Maximum Offering Price component is the offering price (NAV if
no sales load) on the last day of the period.
<PAGE>
RECOMPUTATION OF 7/31/94 SEC YIELD:
See the attached appendix A, page 5, which details the components of the
SEC Yield calculation for the National Tax-Exempt Fund. The SEC Yield
is recomputed as follows:
Yield = 2*((((407,518.96-48,693.86)/(7,097,666*10.65))+1)^6 - 1)
Yield = 2*((1.004747)^6 - 1)
Yield = 5.7644
See the attached appendix B, page 3, which details the components of the
SEC Yield calculation for the Minnesota Insured Tax-Exempt Fund. The
SEC Yield is recomputed as follows:
Yield = 2*((((170,715.76-24,257.20)/(3,742,112*10.31))+1)^6 - 1)
Yield = 2*((1.003796)^6 - 1)
Yield = 4.5988
Absent voluntary fee waivers of $4,000 in the month of July, the
Minnesota Insured Tax-Exempt Fund's 30-day yield is calculated as
follows:
Yield = 2*((((170,715.76-24,257.20-4,000)/(3,742,112*10.31))+1)^6 - 1)
Yield = 2*((1.003692)^6 - 1)
Yield = 4.4715
TAXABLE EQUIVALENT SEC YIELD:
The taxable equivalent SEC yield for the National Tax-Exempt Fund and
Minnesota Insured Tax-Exempt Fund is computed by dividing that portion
of the yield of a Fund (as computed above) which is tax-exempt by one
minus a stated income tax rate and adding the product to that portion,
if any, of the yield of the Fund that is not tax-exempt. The 7/31/94
taxable equivalent 30 day SEC yield for the National Tax-Exempt Fund and
Minnesota Insured Tax-Exempt Fund is calculated as follows assuming an
example tax rate of 28% for the National Fund and 34.1% for the
Minnesota Fund (Note that computations using other tax rates are
similar):
<PAGE>
National Fund:
Taxable Equivalent SEC Yield = Tax-Exempt 30 Day SEC Yield/(1-Tax Rate)
Taxable Equivalent SEC Yield = 5.7644%/(1-0.28)
Taxable Equivalent SEC Yield = 8.0061%
Minnesota Fund:
Taxable Equivalent SEC Yield = Tax-Exempt 30 Day SEC Yield/(1-Tax Rate)
Taxable Equivalent SEC Yield = 4.5988%/(1-0.341)
Taxable Equivalent SEC Yield = 6.9785%
Minnesota Fund absent voluntary fee waivers:
Taxable Equivalent SEC Yield = Tax-Exempt 30 Day SEC Yield/(1-Tax Rate)
Taxable Equivalent SEC Yield = 4.4715%/(1-0.341)
Taxable Equivalent SEC Yield = 6.7853%
YIELD
The Great Hall Prime Money Market Fund, U.S. Government Money Market
Fund and Tax-Free Money Market Fund 7/31/94 yield is computed, based on
the figures included in appendix F, as follows:
CURRENT YIELD:
The current yield of the Funds is computed by determining the change,
exclusive of capital changes, in the value of a hypothetical pre-
existing account having a balance of one share at the beginning of a
seven-day period, and dividing the change by the value of the account at
the beginning of the base period to obtain the base period return, and
then multiplying the base period return by (365 / 7), with the resulting
yield figure carried to at least the nearest hundredth of one percent.
Current Yield = (Base period return)*365/7
Prime Fund 7/31/94 Current Yield = (0.000706)*365/7 = 3.68%
U.S. Gov't 7/31/94 Current Yield = (0.000688)*365/7 = 3.59%
Tax-Free 7/31/94 Current Yield = (0.000449)*365/7 = 2.34%
<PAGE>
EFFECTIVE OR COMPOUNDED YIELD:
The effective or compounded yield for the Funds is computed by determing
the change, exclusive of capital changes, in the value of a hypothetical
pre-existing account having a balance of one share at the beginning of a
seven-day period, and dividing the change by the value of the account at
the beginning of the base period to obtain the base period return, and
then compounding the base period return by adding 1, raising the sum to
a power equal to 365 divided by 7, and subtracting 1 from the result,
according to the following formula:
Effective Yield = ((Base period return + 1)^(365/7))-1
Prime Fund 7/31/94 Effective Yield = ((0.000706+1)^(365/7))-1 = 3.75%
U.S. Gov't 7/31/94 Effective Yield = ((0.000688+1)^(365/7))-1 = 3.65%
Tax-Free 7/31/94 Effective Yield = ((0.000449+1)^(365/7))-1 = 2.37%
TAXABLE EQUIVALENT YIELD:
The taxable equivalent yield of the Tax-Free Money Market Fund is
calculated by applying the stated income tax rate only to that portion
of the Tax-Free Fund's seven-day yield or effective yield that is exempt
from taxation. The stated income tax rate is subtracted from the number
1 (e.g., 1 minus 28% equals 72%), and the tax-exempt portion of the
yield is divided by the difference. The result is then added to that
portion of the Funds yield, if any, that is not tax-exempt. Note that
computations using other tax rates is similar.
Tax Equivalent Yield = (Tax-Exempt Yield)/(1-Tax Rate)
Tax-Free Tax Equivalent 7/31/94 Current Yield = (2.34)/(1-28%) = 3.25%
Tax-Free Tax Equivalent 7/31/94 Effective Yield = (2.37)/(1-28%) = 3.29%
<PAGE>
TOTAL RETURN
Total Return for the National Tax-Exempt Fund and Minnesota Insured Tax-
Exempt Fund is computed using the spreadsheets detailed in appendices C
and D, respectively. These spreadsheets use a hypothetical example as
the basis for computing total return.
The spreadsheet models calculate Total Return assuming an investor
invests $10,000 on the fund inception date at the inception NAV and
subsequently reinvests all dividends and capital gains at NAV.
- - On the last day of each month, as the funds declare and distribute
dividends, the distribution per share amount for the month is
multiplied by the total number of shares owned at the previous month
end to determine the total amount of money distributed.
- - Assuming full dividend reinvestment at NAV, the total dollar amount
distributed is divided by the current month-end NAV to determine the
total shares reinvested.
- - The reinvested shares are added to the prior month's total shares
to obtain the total shares owned at month-end.
- - Finally, the total shares are multiplied by the month-end NAV to
determine the total dollar value of the hypothetical account at
month-end.
- - The difference between the total dollar value of the hypothetical
account held on a given month-end from one time period to another and
the related length of time of the investing are the key factors used
in calculating average annual total return (see formulas and
calculations below).
- - The difference between the total dollar value of the hypothetical
account held on a given month-end and the initial $10,000 investment
is the key factor used in calculating cumulative total return (see
formulas and calculations below).
- - To calculate an average annual total return or the cumulative total
return allowing the maximum sales charge of 4.5%, the model is
adjusted by dividing the beginning hypothetical account value by (1 -
4.5%) or what equates to an investment at the public offering price
while holding the ending account value constant (see formulas and
calculations below).
RECALCULATIONS OF 7/31/94 AVERAGE ANNUAL TOTAL RETURN:
An excerpt from the National Tax-Exempt Fund and Minnesota Insured Tax-
Exempt Fund July 31, 1994 Annual Statement detailing the Total Return
for each fund is included at appendix E. Each of the Total Returns
detailed in appendix E are recalculated below.
LEGEND
(1+R)^X where X = Years Invested, and
R = Annually compounded rate
of return (total return)
<PAGE>
NATIONAL TAX-EXEMPT FUND:
A. Total Return Since Inception:
1) Excluding Sales Charge (Annual Report)
7/31/94 $ Balance = Initial Investment*(1+R)^Years invested
18,476.94 = 10,000.00 * (1+R)^7.83
Total Return = 8.15%
2) Allowing Maximum Sales Charge of 4.5% (Annual Report and
Registration Statement)
7/31/94 $ Bal. = (Initial Invest./(1-.045))*(1+R)^Years invested
18,476.94 = (10,000/.955)*(1+R)^7.83
Total Return = 7.52%
B. One-Year Total Return:
1) Excluding Sales Charge (Annual Report)
7/31/94 $ Balance = 7/31/93 $ Balance * (1+R)^Years invested
18,476.94 = 17,940.96 * (1+R)^1.00
Total Return = 2.99%
2) Allowing Maximum Sales Charge of 4.5% (Annual Report and
Registration Statement)
7/31/94 $ Bal. = (7/31/93 $ Bal./(1-.045))*(1+R)^Years invested
18,476.94 = (17,940.96/.955)*(1+R)^1.00
Total Return = -1.65%
C. Five-Year Total Return:
1) Excluding Sales Charge (Annual Report)
7/31/94 $ Balance = 7/31/89 $ Balance * (1+R)^Years invested
18,476.94 = 12,524.74 * (1+R)^5.00
Total Return = 8.09%
2) Allowing Maximum Sales Charge of 4.5% (Annual Report and
Registration Statement)
7/31/94 $ Bal. = (7/31/89 $ Bal./(1-.045))*(1+R)^Years invested
18,476.94 = (12,524.74/.955)*(1+R)^5.00
Total Reurn = 7.10%
<PAGE>
MINNESOTA INSURED TAX-EXEMPT FUND:
A. Total Return Since Inception:
1) Excluding Sales Charge (Annual Report)
7/31/94 $ Balance = Initial $ Investment*(1+R)^Years invested
17,552.49 = 10,000.00 * (1+R)^8.25
Total Return = 7.06%
2) Allowing Maximum Sales Charge of 4.5% (Annual Report and
Registration Statement)
7/31/94 $ Bal. = (Initial Invest./(1-.045))*(1+R)^Years invested
17,552.49 = (10,000.00/.955)*(1+R)^8.25
Total Return = 6.46%
B. One-Year Total Return:
1) Excluding Sales Charge (Annual Report)
7/31/94 $ Balance = 7/31/93 $ Balance * (1+R)^Years invested
17,552.49 = 17,515.13*(1+R)^1.00
Total Return = 0.21%
2) Allowing Maximum Sales Charge of 4.5% (Annual Report and
Registration Statement)
7/31/94 $ Bal. = (7/31/93 $ Bal./(1-.045))*(1+R)^Years invested
17,552.49 = (17,515.13/.955)*(1+R)^1.00
Total Return = -4.30%
C. Five-Year Total Return:
1) Excluding Sales Charge (Annual Report)
7/31/94 $ Balance = 7/31/89 $ Balance * (1+R)^Years invested
17,552.49 = 12,558.35 * (1+R)^5.00
Total Return = 6.93%
2) Allowing Maximum Sales Charge of 4.5% (Annual Report and
Registration Statement)
7/31/94 $ Bal. = (7/31/89 $ Bal./(1-.045))*(1+R)^Years invested
17,552.49 = (12,558.35/.955)*(1+R)^5.00
Total Return = 5.95%
<PAGE>
RECALCULATIONS OF 7/31/94 CUMULATIVE TOTAL RETURN:
The cumulative total return for the National Tax-Exempt Fund and
Minnesota Insured Tax-Exempt Fund is computed using the following
formula:
Cum. Total Return = ((7/31/94 $ Bal.-Initial Inv.)/Initial Inv.)*100
OR
Cum. Total Return = ((7/31/94 $ Bal.-10,000)/10,000)*100
The spreadsheets in appendices C & D, detail the cumulative total return
of the National Tax-Exempt Fund and Minnesota Insured Tax-Exempt Fund on
any given month-end. The following computes the 7/31/94 cumulative
total return for each fund excluding and allowing maximum sales charges:
NATIONAL FUND:
1) Excluding Sales Charge
Cumulative Total Return = ((18,476.94-10,000)/10,000)*100
Cumulative Total Return = 84.7694
2) Allowing Maximum Sales Charge of 4.5%
Cumulative Total Return = ((18,476.94-10,471.20)/10,471.20)*100
Cumulative Total Return = 76.4548
MINNESOTA FUND:
1) Excluding Sales Charge
Cumulative Total Return = ((17,552.49-10,000)/10,000)*100
Cumulative Total Return = 75.5249
2) Allowing Maximum Sales Charge of 4.5%
Cumulative Total Return = ((17,552.49-10,471.20)/10,471.20)*100
Cumulative Total Return = 67.6263
<PAGE>
GREAT HALL INVESTMENT FUNDS, INC.
POWER OF ATTORNEY
TO SIGN REGISTRATION STATEMENT
AND AMENDMENTS THERETO
The undersigned duly elected direcctors and officers of Great Hall
Investment Funds, Inc. (the "Company") hereby appoint Peter O. Torvik, Dennis
T. Hippen, Raye C. Kanzenbach, Julie K. Getchell and Mathew L. Thompson, or any
one of them, on their behalf as directors and/or officers of the Company, as
attorney-in-fact for the purpose of signing their names and filing with the
Securities and Exchange Commission or any other regulatory authority as may be
desirable or necessary, the Company's Registration Statement on Form N-1A
(Registration Nos. 33-41395 and 811-6340) and any and all amendments thereto.
Dated: August 17, 1994
Peter O. Torvik T. Geron Bell
- ------------------------------ ------------------------------
Peter O. Torvik T. Geron Bell
Director and Chief Executive Officer Director
(Principal Executive Officer)
Julie K. Getchell Sandra J. Hale
- ------------------------------ ------------------------------
Julie K. Getchell Sandra J. Hale
Treasurer (Principal Financial and Director
Accounting Officer)
Ron James Jay H. Wein
- ------------------------------ ------------------------------
Ron James Jay H. Wein
Director Director
<PAGE>
DAIN BOSWORTH INCORPORATED 1995 OFFICERS
AAKER, WILLIAM R ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
ADAMS, A MICHAEL VICE PRESIDENT/INVESTMENT OFFICER
ADAMS, TERRY L VICE PRESIDENT
ADAMSKI, MARY K MANAGING DIRECTOR
AHLBRECHT, JAMES R VICE PRESIDENT/INVESTMENT OFFICER
ALAN, LAWRENCE VP INSTITUTIONAL FIXED INCOME SALES
ALEPRA, PETER F INVESTMENT OFFICER
ALLEN, BRUCE G VICE PRESIDENT/INVESTMENT OFFICER
ALLIS, PETER D VICE PRESIDENT/INVESTMENT OFFICER
ANDERSON RONS, BONNIE M VICE PRESIDENT
ANDERSON, DAVID L VICE PRESIDENT/INVESTMENT OFFICER
ANDERSON, JOHN A VICE PRESIDENT/INVESTMENT OFFICER
ANDERSON, KURT S INVESTMENT OFFICER
ANDERSON, RODNEY G FIRST VICE PRESIDENT/INVESTMENT OFFICER
ANDRAS, RUDOLPH P ASSOCIATE VICE PRESIDENT
ANDREASEN, GRANT K INVESTMENT OFFICER
APPEL, JOHN C PRESIDENT & COO
ARNOLD, ROBERT D VICE PRESIDENT/INVESTMENT OFFICER
ARONSON, GARY L ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
ATKINSON, RICHARD W INVESTMENT OFFICER
AUGUSTINE, JAMES D INVESTMENT OFFICER
AUKER, RANDALL B SVP/IO/MANAGING DIRECTOR
AYMOND, JOHN C FVP INSTITUTIONAL FIXED INCOME SALES
BACHMAN, THOMAS T INVESTMENT OFFICER
BAILEY, MARK W VICE PRESIDENT/INVESTMENT OFFICER
BAKALARS, MICHAEL J INVESTMENT OFFICER
BAKER, ROSALYN W INVESTMENT OFFICER
BANKORD, MARK A SVP/IO/MANAGING DIRECTOR
BARNHART, WILLIAM C VP INSTITUTIONAL FIXED INCOME SALES
BARR, DONALD L VICE PRESIDENT/INVESTMENT OFFICER
BARRINGTON, RICHARD F ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
BARTHOLOMAY, MARK L VICE PRESIDENT
BARTOW, RICHARD G VICE PRESIDENT
BAST, MARYANN E SENIOR VICE PRESIDENT/INVESTMENT OFFICER
BAUCHMAN, NANCY A SENIOR VICE PRESIDENT/INVESTMENT OFFICER
BAUMAN, TERRY P ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
BAUMGART, BRUCE A ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
BAVE, JOHN H VP INSTITUTIONAL FIXED INCOME SALES
BAYLESS, GLEN R INVESTMENT OFFICER
BAYLESS, ROBERT E SENIOR VICE PRESIDENT/INVESTMENT OFFICER
BEAUDOIN, PAUL H VICE PRESIDENT
BELLINI, JAMES A SENIOR VICE PRESIDENT
BELSKI, BRIAN G ASSOCIATE VICE PRESIDENT
BENNETT, CAROLYN L ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
BENTON, JASEN M INVESTMENT OFFICER
BETTIS, HARVEY F SVP/IO/MANAGING DIRECTOR
BEVINGTON, LYNN A VP/IO/MANAGING DIRECTOR
BHARMAL, JAMALUDDIN R ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
BICKEL, JOHN R VICE PRESIDENT
BINGHAM, KENT D VICE PRESIDENT/INVESTMENT OFFICER
BLACK, JOEL D VICE PRESIDENT
BLACKLEDGE, FREDERICK C MANAGING DIRECTOR
BLANCHARD, ROBERT L VICE PRESIDENT/INVESTMENT OFFICER
BLEDSOE JR, GILBERT H SENIOR VICE PRESIDENT/INVESTMENT OFFICER
BOAT, SHAWN C ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
BOHOSKEY, CHARLES W VP/IO/MANAGING DIRECTOR
BOLAY, PETER F VICE PRESIDENT/INVESTMENT OFFICER
BOND, GREG E INVESTMENT OFFICER
BONGAARTS, MICHAEL V INVESTMENT OFFICER
BOWEN, FRED ASSOCIATE VICE PRESIDENT
BOWERS, GERALD E MANAGING DIRECTOR
BOYLE, MARY BETH ASSOCIATE VICE PRESIDENT
BRADY, EILEEN S VICE PRESIDENT/INVESTMENT OFFICER
BRADY, PATRICK M VICE PRESIDENT/INVESTMENT OFFICER
BRANDT, CHARLES L FIRST VICE PRESIDENT/INVESTMENT OFFICER
BRASS, ALAN FIRST VICE PRESIDENT/INVESTMENT OFFICER
BRAUCHT, WILLIAM C SENIOR VICE PRESIDENT/INVESTMENT OFFICER
BRAWNER, GENE E FVP/IO/MANAGING DIRECTOR
BRENNA, MARK L VICE PRESIDENT/INVESTMENT OFFICER
BRENTON, CRAIG C INVESTMENT OFFICER
BREZOVAR, FRANK H VICE PRESIDENT/INVESTMENT OFFICER
BROMELKAMP, DAVID J ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
BROOKS, JEFFREY S VP INSTITUTIONAL FIXED INCOME SALES
BROPHY, MARY ALICE MANAGING DIRECTOR/DIRECTOR
BRUGGER, KENT V VICE PRESIDENT/INVESTMENT OFFICER
BRUMLEY, JOHN B VICE PRESIDENT
BRUNKHORST, GEORGE F VICE PRESIDENT/INVESTMENT OFFICER
BRUSIE, DEBRA A ASSOCIATE VICE PRESIDENT
BRYANS, ROBERT P INVESTMENT OFFICER
BUDD JR, STEPHEN E VICE PRESIDENT/INVESTMENT OFFICER
BUELOW, JEFFREY S ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
BUNNELL, DON M IO/MANAGING DIRECTOR
BUOL, CHRISTOPHER G VICE PRESIDENT/INVESTMENT OFFICER
BURLEND, WARREN R FIRST VICE PRESIDENT/INVESTMENT OFFICER
BURR JR, ROY J FVP/IO/MANAGING DIRECTOR
BURR, DANIEL H VICE PRESIDENT/INVESTMENT OFFICER
BUSH, WILLIAM D VICE PRESIDENT/INVESTMENT OFFICER
BUSKIRK, BRIAN W VICE PRESIDENT/INVESTMENT OFFICER
BUSS, ROBERT E ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
BUTLER-BURBACK, LAURA A INVESTMENT OFFICER
BUTTRESS, PAUL W ASSOCIATE VICE PRESIDENT
BYRD JR, RICHARD E SVP INSTITUTIONAL FIXED INCOME SALES
BYRNE JR, CLETUS E VICE PRESIDENT/INVESTMENT OFFICER
CABLE, JOHN P ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
CALCAVECCHIO, RICHARD A VICE PRESIDENT
CALKINS, PATRICK R INVESTMENT OFFICER
CALVERT, MARTIN L INVESTMENT OFFICER
CAMARIGG, DANIEL S INVESTMENT OFFICER
CAMPBELL, CRAWFORD M INVESTMENT OFFICER
CARDINAL, DAVID L SVP/IO/MANAGING DIRECTOR
CARLSON, BRUCE E SENIOR VICE PRESIDENT/INVESTMENT OFFICER
CARLSON, CHARLES K VP/IO/MANAGING DIRECTOR
CARLSON, KATHRYN M INVESTMENT OFFICER
CARPENTER, KEVIN D VICE PRESIDENT
CARROLL, PATRICK D VICE PRESIDENT/INVESTMENT OFFICER
CARTER, MICHAEL A SVP/IO/MANAGING DIRECTOR
CASEY, TERENCE J MANAGING DIRECTOR
CAVANOR, PAUL K VP INSTITUTIONAL FIXED INCOME SALES
CAVERLY, SCOTT E INVESTMENT OFFICER
CAVITT, CAROLYN H INVESTMENT OFFICER
CEASER, GREGG L ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
CEJA, LYNN M ASSOCIATE VICE PRESIDENT
CHANDLER, RICHARD A VP INSTITUTIONAL FIXED INCOME SALES
CHENEY, CYNTHIA H ASSOCIATE VICE PRESIDENT
CHERNOW, ROBERT W VICE PRESIDENT/INVESTMENT OFFICER
CHERNY, JASON S ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
CHESTER, SHELDON FIRST VICE PRESIDENT/INVESTMENT OFFICER
CHRISTENSEN, MICHAEL L IO/MANAGING DIRECTOR
CICUREL, CARY S VP INSTITUTIONAL FIXED INCOME SALES
CIVELLO, NELSON D EXECUTIVE VICE PRESIDENT
CLARK, CARY R VP/IO/MANAGING DIRECTOR
CLARK, DARYL P VICE PRESIDENT/INVESTMENT OFFICER
CLARK, KATRINA L FIRST VICE PRESIDENT/INVESTMENT OFFICER
CLAXTON, JOHN L VICE PRESIDENT/INVESTMENT OFFICER
CLAY, JOHN C SENIOR VICE PRESIDENT/INVESTMENT OFFICER
CLINTON, RICHARD J VICE PRESIDENT
COFFEY, SUSAN E MANAGING DIRECTOR
COGLIANESE, ANGELO J FVP INSTITUTIONAL FIXED INCOME SALES
COHEN, SUSAN L VICE PRESIDENT/INVESTMENT OFFICER
COIT, DENNIS A VP/IO/MANAGING DIRECTOR
COLIANNI, JOSEPH G VICE PRESIDENT
COLLEARY JR, JOHN J FVP INSTITUTIONAL FIXED INCOME SALES
COLLINS, LEO T VICE PRESIDENT/INVESTMENT OFFICER
COMBS, PAUL W SENIOR VICE PRESIDENT
CONDON, STEVEN P VICE PRESIDENT
CONLEY, ROGER R ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
CONWAY, THOMAS W VICE PRESIDENT/INVESTMENT OFFICER
COOPER, ROBERT A SENIOR VICE PRESIDENT/INVESTMENT OFFICER
CORN, DAVID M VICE PRESIDENT/INVESTMENT OFFICER
CORNOG-ROBATHAN, CONSTANCE INVESTMENT OFFICER
CORY, REBECCA B ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
COSSEL, LARRY G INVESTMENT OFFICER
COURTNEY, DARREL G INVESTMENT OFFICER
COVLIN, HAROLD D FIRST VICE PRESIDENT/INVESTMENT OFFICER
COWLING, MICHAEL D VICE PRESIDENT/INVESTMENT OFFICER
COX, KENNETH E INVESTMENT OFFICER
COXHEAD, THOMAS L ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
CRABTREE, BENJAMIN B MANAGING DIRECTOR
CRAW, NELSON E VICE PRESIDENT/INVESTMENT OFFICER
CRAWFORD, JOHN C VICE PRESIDENT/INVESTMENT OFFICER
CRAWFORD, RICHARD P VICE PRESIDENT/INVESTMENT OFFICER
CROSBY, DAVID E FIRST VICE PRESIDENT/INVESTMENT OFFICER
CROWE, ELIZABETH E VICE PRESIDENT
CROWELL, CHARLES A SENIOR VICE PRESIDENT/INVESTMENT OFFICER
CULLINAN, JAMES K VICE PRESIDENT/INVESTMENT OFFICER
CUNNIFF, JEFFREY L INVESTMENT OFFICER
CUNNINGHAM, BRIAN P FIRST VICE PRESIDENT/INVESTMENT OFFICER
CUNNINGHAM, KAREN J VICE PRESIDENT/INVESTMENT OFFICER
D AQUILA, JAMES A SENIOR VICE PRESIDENT
DABNEY, REID JD VICE PRESIDENT
DAGHER, JOHN B FVP INSTITUTIONAL FIXED INCOME SALES
DAGHER, MATTHEW VICE PRESIDENT
DANIELS, MARY M VICE PRESIDENT/INVESTMENT OFFICER
DANSKIN, JAMES W INVESTMENT OFFICER
DAVIDSON, RANDY L INVESTMENT OFFICER
DAVIS, MICHAEL BRETT INVESTMENT OFFICER
DAVIS, THOMAS K ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
DECKER, JOHN F FIRST VICE PRESIDENT/INVESTMENT OFFICER
DELZELL, GERALD G VICE PRESIDENT/INVESTMENT OFFICER
DEWALT, STEPHEN R VICE PRESIDENT/INVESTMENT OFFICER
DEXTER, THOMAS S VICE PRESIDENT/INVESTMENT OFFICER
DICKEY, ROBERT F MANAGING DIRECTOR
DIETZ, ROBERT W INVESTMENT OFFICER
DILEY, JOHN J VP INSTITUTIONAL EQUITY SALES
DILORETO, LUCIO FIRST VICE PRESIDENT/INVESTMENT OFFICER
DISCHER, BRETT S VICE PRESIDENT
DIXON, BRENDA S INVESTMENT OFFICER
DOBESH, GREGORY T ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
DOCKENDORFF, JOHN VP INSTITUTIONAL EQUITY SALES
DOERR, JEFFREY L VICE PRESIDENT/INVESTMENT OFFICER
DOHERTY, DAVID E VICE PRESIDENT/INVESTMENT OFFICER
DOMGARD, JAMES R ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
DONOVAN, PAT F VP INSTITUTIONAL FIXED INCOME SALES
DORR, PHILIP M VP INSTITUTIONAL FIXED INCOME SALES
DORSEY, MICHAEL A VICE PRESIDENT
DORWEILER, ROBERT P VICE PRESIDENT
DOURTE, VICTOR B SENIOR VICE PRESIDENT/INVESTMENT OFFICER
DRAKE, HARRY S VICE PRESIDENT/INVESTMENT OFFICER
DREITZLER, LORN T FVP/IO/MANAGING DIRECTOR
DREXEL, HENRY G VICE PRESIDENT/INVESTMENT OFFICER
DREXLER, STEPHEN J FIRST VICE PRESIDENT/INVESTMENT OFFICER
DRISCOLL, JENNIFER K VICE PRESIDENT
DUDENHOEFFER, MICHAEL ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
DUMPHY, THOMAS A SENIOR VICE PRESIDENT/INVESTMENT OFFICER
DUNCAN, KENNETH W VICE PRESIDENT/INVESTMENT OFFICER
DUNNING, KYLE L VICE PRESIDENT /IO/MANAGING DIRECTOR
DUTCHER, JAMES D FIRST VICE PRESIDENT/INVESTMENT OFFICER
DUTTON, MICHAEL E VICE PRESIDENT/INVESTMENT OFFICER
DYKSTRA, JACK E INVESTMENT OFFICER
ECKERT, JAMES O ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
EDMISTON, ROBERT B VICE PRESIDENT
EGAN, FRANCIS X FIRST VICE PRESIDENT/INVESTMENT OFFICER
EGGEBRECHT, DONALD R INVESTMENT OFFICER
EHLEN, ROBERT VP INSTITUTIONAL EQUITY SALES
EISENBERG, NOAH VICE PRESIDENT/INVESTMENT OFFICER
ELLIOTT, PATRICK D VICE PRESIDENT/INVESTMENT OFFICER
ELLIS, SALLY A VICE PRESIDENT/INVESTMENT OFFICER
ELMORE, JENNIFER L VICE PRESIDENT/INVESTMENT OFFICER
ELSTON, MARK J FVP/IO/MANAGING DIRECTOR
ENGER, KAROLINE K VICE PRESIDENT
ERNST, RONALD R FIRST VICE PRESIDENT/INVESTMENT OFFICER
ERVIN JR, HARRY C VICE PRESIDENT/INVESTMENT OFFICER
ERZAR, THOMAS B VICE PRESIDENT/INVESTMENT OFFICER
ETTELDORF, A ROBERT ASSOCIATE VICE PRESIDENT
ETTER, C F VICE PRESIDENT/INVESTMENT OFFICER
EVANS, DAVID J FIRST VICE PRESIDENT/INVESTMENT OFFICER
FAHNHORST, KEITH V ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
FAHRER, ROBERT F VICE PRESIDENT/INVESTMENT OFFICER
FALK, ROBERT A SENIOR VICE PRESIDENT/INVESTMENT OFFICER
FALLON JR, FRANCIS X MANAGING DIRECTOR/DIRECTOR
FARNI, JEFFREY L VP/IO/MANAGING DIRECTOR
FARR, MICHAEL T VICE PRESIDENT/INVESTMENT OFFICER
FARRELL, ALFRED C VICE PRESIDENT
FAUST, RONALD F VICE PRESIDENT/INVESTMENT OFFICER
FEDJE, NOEL I FIRST VICE PRESIDENT/INVESTMENT OFFICER
FEENEY, MICHAEL J VICE PRESIDENT
FEHRENBACH, JAMES D ASSOCIATE VICE PRESIDENT
FIACCO, RONALD J ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
FIELD, WILLIAM E FVP INSTITUTIONAL FIXED INCOME SALES
FINUCAN, ROGER J VICE PRESIDENT/INVESTMENT OFFICER
FISHER, JOHN L VICE PRESIDENT/INVESTMENT OFFICER
FISHER, K HARRISON SENIOR VICE PRESIDENT
FISHER, LOUIS W ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
FLAHERTY JR, JOSEPH W VP INSTITUTIONAL EQUITY SALES
FLAKE, CARLA G VICE PRESIDENT
FLECK, BRIAN S INVESTMENT OFFICER
FLESCH, DANIEL E VICE PRESIDENT/INVESTMENT OFFICER
FOERSTER III, HARRY R VICE PRESIDENT
FOLEY-COVERDALE, CHRISTINE VICE PRESIDENT
FOLLENSBEE, KAREN J FIRST VICE PRESIDENT/INVESTMENT OFFICER
FORD, WILLIAM D VICE PRESIDENT/INVESTMENT OFFICER
FOSTER, ELIZABETH A VICE PRESIDENT/INVESTMENT OFFICER
FOWLER, SCOTT R INVESTMENT OFFICER
FOX, GRACE INVESTMENT OFFICER
FREDERICK, MELVIN L FIRST VICE PRESIDENT/INVESTMENT OFFICER
FREDERICK, MITCHELL S INVESTMENT OFFICER
FREEMAN, PAUL I SENIOR VICE PRESIDENT/INVESTMENT OFFICER
FRIAR, JAMES P FVP/IO/MANAGING DIRECTOR
FRIEDMAN, GEORGE E VICE PRESIDENT/INVESTMENT OFFICER
FROELICH.JR, FRANCIS J VICE PRESIDENT/INVESTMENT OFFICER
FUHR, LISA A VICE PRESIDENT
FULLER, CHARLES L ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
FULLERTON, ROGER S ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
GABBERT, ROGER D FIRST VICE PRESIDENT/INVESTMENT OFFICER
GABEL, THOMAS E VP INSTITUTIONAL EQUITY SALES
GAISER, CANDICE L ASSOCIATE VICE PRESIDENT
GALL, J CHARLES VICE PRESIDENT/INVESTMENT OFFICER
GARCIA, CHARLES W ASSOCIATE VICE PRESIDENT
GARLOCK, JOHN H VP/IO/MANAGING DIRECTOR
GASHER, DOUGLAS S VICE PRESIDENT
GATES, THOMAS G ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
GEENEN, JOHN T VICE PRESIDENT/INVESTMENT OFFICER
GENDLER, NANCY J ASSOCIATE VICE PRESIDENT
GESTEN, RICHARD W ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
GIFFORD, ANN E VICE PRESIDENT
GILLILAN, MICHAEL S SENIOR VICE PRESIDENT
GILMORE, KEITH R SENIOR VICE PRESIDENT/INVESTMENT OFFICER
GIRARDI, STEPHEN M INVESTMENT OFFICER
GIVENS, JOHN W ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
GLASSBURN, RICHARD B VICE PRESIDENT/INVESTMENT OFFICER
GLOWACKI, PETER J ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
GODE III, ORRIN J VICE PRESIDENT/INVESTMENT OFFICER
GOETZ, LEON J VICE PRESIDENT
GOIFFON, MARY A ASSOCIATE VICE PRESIDENT
GORDON, BAYLEE Z INVESTMENT OFFICER
GOULD, TIMOTHY D VICE PRESIDENT/INVESTMENT OFFICER
GRAY, RONALD L VICE PRESIDENT/INVESTMENT OFFICER
GRAY, SALLY J INVESTMENT OFFICER
GREEN, WILLIAM M MANAGING DIRECTOR
GREENE, BRUCE SENIOR VICE PRESIDENT/INVESTMENT OFFICER
GREENE, G.MICHAEL VICE PRESIDENT/INVESTMENT OFFICER
GREENFIELD, JOHN N INVESTMENT OFFICER
GRIGGS, JOHN H INVESTMENT OFFICER
GRUNDSTEDT, STEVE H INVESTMENT OFFICER
GRUTZNER, PAUL E INVESTMENT OFFICER
HACKETT, JOHN R FVP/IO/MANAGING DIRECTOR
HACKL, KENNETH J SENIOR VICE PRESIDENT/INVESTMENT OFFICER
HALBERT, PARICE C ASSOCIATE VICE PRESIDENT
HALE, KELLY VICE PRESIDENT/INVESTMENT OFFICER
HALL, TIMOTHY R ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
HALLIN, GEORGE G VICE PRESIDENT/INVESTMENT OFFICER
HAMILTON, THOMAS W VICE PRESIDENT/INVESTMENT OFFICER
HAMLIN, ROBERT J ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
HAMM, JOHN R SENIOR VICE PRESIDENT/INVESTMENT OFFICER
HANNO, DENNIS R VICE PRESIDENT/INVESTMENT OFFICER
HANSEN, GARY J VICE PRESIDENT
HANSEN, MARCIA L VICE PRESIDENT
HANSEN, ROBERT S ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
HANSON, PAUL B VICE PRESIDENT/INVESTMENT OFFICER
HANSON, STERLING M ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
HARRIS, THOMAS D INVESTMENT OFFICER
HARRISON, SANDRA S VICE PRESIDENT
HART, GEORGE INVESTMENT OFFICER
HARTSOUGH, RUSSELL L INVESTMENT OFFICER
HARTUNG, KENNETH A INVESTMENT OFFICER
HASKELL.II, CHARLES A VICE PRESIDENT/INVESTMENT OFFICER
HASSELQUIST, PETER L MANAGING DIRECTOR/DIRECTOR
HASSENFLU, MARK E ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
HAUXWELL, STANLEY A VP/IO/MANAGING DIRECTOR
HAWKINS, JAMES E VICE PRESIDENT/INVESTMENT OFFICER
HAYDEN, GARY F SENIOR VICE PRESIDENT/INVESTMENT OFFICER
HAYES, LAWRENCE S ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
HAYTER, JAMES G VICE PRESIDENT/INVESTMENT OFFICER
HECK, RICHARD A INVESTMENT OFFICER
HEEREN, MARY ANN ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
HEIAM, ALBERT E VICE PRESIDENT/INVESTMENT OFFICER
HEINTZ, KAREN B ASSOCIATE VICE PRESIDENT
HEISE, RUSSELL B SENIOR VICE PRESIDENT
HENDERSON, LINDA L MANAGING DIRECTOR/DIRECTOR
HENRY, ALAN J VICE PRESIDENT/INVESTMENT OFFICER
HENSEL, ROBERT A VICE PRESIDENT/INVESTMENT OFFICER
HERING, DONALD F VICE PRESIDENT/INVESTMENT OFFICER
HERNANDEZ, BRENDA A ASSOCIATE VICE PRESIDENT
HERR, ROGER E VICE PRESIDENT/INVESTMENT OFFICER
HERSMAN, GERALD M VICE PRESIDENT
HERT, PAUL T ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
HERZBERG, MARY A ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
HESTER, WAYNE A SENIOR VICE PRESIDENT/INVESTMENT OFFICER
HEULE, THOMAS D VICE PRESIDENT
HEYES, EDWARD K AVP/IO/MANAGING DIRECTOR
HICKMAN, THOMAS J INVESTMENT OFFICER
HIGGINS, JAMES S INVESTMENT OFFICER
HILDEBRAND, ROBERT J VP INSTITUTIONAL FIXED INCOME SALES
HILL, STEVEN R VICE PRESIDENT/INVESTMENT OFFICER
HILLMAN, PHILIP E VICE PRESIDENT/INVESTMENT OFFICER
HILLS, DARRICK L ASSOCIATE VICE PRESIDENT
HIMELRIGHT.JR, LORING K SENIOR VICE PRESIDENT/INVESTMENT OFFICER
HINSON, RICHARD C SENIOR VICE PRESIDENT/INVESTMENT OFFICER
HOAGLUN, JACQUELINE A VICE PRESIDENT
HODDER, EDWIN C VICE PRESIDENT/INVESTMENT OFFICER
HOEBELHEINRICH, GARY L VP/IO/MANAGING DIRECTOR
HOELSCHER, HAROLD G SENIOR VICE PRESIDENT/INVESTMENT OFFICER
HOGAN, SHIRLEY M FVP INSTITUTIONAL FIXED INCOME SALES
HOGUE, MARY S ASSOCIATE VICE PRESIDENT
HOGUE, RICHARD C VICE PRESIDENT/INVESTMENT OFFICER
HOKKANEN, BRET D VP INSTITUTIONAL FIXED INCOME SALES
HOLDERMAN, CHARLES J SENIOR VICE PRESIDENT/INVESTMENT OFFICER
HOLMAN, HARRY P FIRST VICE PRESIDENT/INVESTMENT OFFICER
HOLMES JR, WILLIAM B ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
HOLTZ, LAWRENCE C SENIOR VICE PRESIDENT
HOLZRICHTER, DANIEL J INVESTMENT OFFICER
HORKEY, RICHARD W INVESTMENT OFFICER
HORN, ROBERT K VICE PRESIDENT/INVESTMENT OFFICER
HOSTETTLER, DIANE M VICE PRESIDENT
HOVEN, DAVID VICE PRESIDENT
HOWARD, PAUL S INVESTMENT OFFICER
HOY, KATHRYN J ASSOCIATE VICE PRESIDENT
HUBICK, ANTHONY J VICE PRESIDENT/INVESTMENT OFFICER
HUGHES, PAUL V MANAGING DIRECTOR
HUNTINGTON, EUGENE F VICE PRESIDENT
HURST, DONNA M VP INSTITUTIONAL FIXED INCOME SALES
HYDE, DAWN I MANAGING DIRECTOR/DIRECTOR
IANCU, SORIN VICE PRESIDENT/INVESTMENT OFFICER
IDELKOPE, GREGORY P INVESTMENT OFFICER
INGALLS, MARGARET M VICE PRESIDENT/INVESTMENT OFFICER
ISAACSON, KIM D VICE PRESIDENT/INVESTMENT OFFICER
IVERSON, MARVIN D INVESTMENT OFFICER
JACKSON, JACK D VICE PRESIDENT/INVESTMENT OFFICER
JACKSON, STEPHEN E INVESTMENT OFFICER
JACOBS, STEPHEN E VP INSTITUTIONAL EQUITY SALES
JAMES, BRYCE A VICE PRESIDENT/INVESTMENT OFFICER
JANSSON, JAMES R SENIOR VICE PRESIDENT/INVESTMENT OFFICER
JENNINGS, DAVID B MANAGING DIRECTOR
JENSEN, JAY A VICE PRESIDENT/INVESTMENT OFFICER
JENSEN, RICK D INVESTMENT OFFICER
JIMMERSON, KEITH O VICE PRESIDENT/INVESTMENT OFFICER
JININGS, RONALD W VICE PRESIDENT/INVESTMENT OFFICER
JOAS, PAUL K SENIOR VICE PRESIDENT/INVESTMENT OFFICER
JOHNSON JR, RESTOR E MANAGING DIRECTOR
JOHNSON, ANGELA C ASSOCIATE VICE PRESIDENT
JOHNSON, BRUCE W VICE PRESIDENT
JOHNSON, CHARLES H INVESTMENT OFFICER
JOHNSON, DANIEL T SENIOR VICE PRESIDENT
JOHNSON, KELLY J VICE PRESIDENT/INVESTMENT OFFICER
JOHNSON, NANCY A ASSOCIATE VICE PRESIDENT
JOHNSON, PRESLEY S ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
JOHNSON, SCOTT R INVESTMENT OFFICER
JOHNSON, TAMARA A VICE PRESIDENT
JOHNSON, THOMAS F INVESTMENT OFFICER
JOHNSTON, JAMES T INVESTMENT OFFICER
JONES, MILTON S VICE PRESIDENT/INVESTMENT OFFICER
JONES, ROGER C MANAGING DIRECTOR
JONES, WESTCOTT A VICE PRESIDENT
JORDAN JR, THOMAS R VICE PRESIDENT/INVESTMENT OFFICER
JORDAN, JEFFREY D VICE PRESIDENT/INVESTMENT OFFICER
JOSEPHSEN, TOM C VICE PRESIDENT/INVESTMENT OFFICER
JUSSILA, WILLIAM A ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
KAILING, PENELOPE W SENIOR VICE PRESIDENT/INVESTMENT OFFICER
KAISER, HAROLD L FIRST VICE PRESIDENT/INVESTMENT OFFICER
KALIVAS, CHRISTINE S VICE PRESIDENT
KALLAND, JAMES A INVESTMENT OFFICER
KAMINSKI, JOHN L VICE PRESIDENT/INVESTMENT OFFICER
KAMROWSKI, KEVIN J INVESTMENT OFFICER
KAPPES, KENNETH J FIRST VICE PRESIDENT/INVESTMENT OFFICER
KARLMAN, ROBERT L VICE PRESIDENT/INVESTMENT OFFICER
KAVA-DOLAN, CECELIA VICE PRESIDENT/INVESTMENT OFFICER
KAVANAGH, MICHAEL R SENIOR VICE PRESIDENT
KAYE, HOWARD L VICE PRESIDENT/INVESTMENT OFFICER
KEARNEY JR, NORMAN L VICE PRESIDENT/INVESTMENT OFFICER
KEENE, DAVID VICE PRESIDENT/INVESTMENT OFFICER
KEITH, RICHARD L ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
KELLER, RICHARD A VICE PRESIDENT/INVESTMENT OFFICER
KELLETT, SCOTT B ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
KELLEY, FRANK E SENIOR VICE PRESIDENT/INVESTMENT OFFICER
KELLEY, GREGORY G FIRST VICE PRESIDENT/INVESTMENT OFFICER
KELLEY, RICHARD W SENIOR VICE PRESIDENT/INVESTMENT OFFICER
KELLY, DANIEL M SENIOR VICE PRESIDENT/INVESTMENT OFFICER
KELLY, JAMES E VICE PRESIDENT/INVESTMENT OFFICER
KELLY, MARK D VICE PRESIDENT/INVESTMENT OFFICER
KENNEDY, MARY A INVESTMENT OFFICER
KENNEDY, PATRICK G VICE PRESIDENT/INVESTMENT OFFICER
KENNY, EDWARD P ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
KENSINGER JR, DON G INVESTMENT OFFICER
KENYON, HENRY DAVID FIRST VICE PRESIDENT/INVESTMENT OFFICER
KEPPLER, ANTHONY J INVESTMENT OFFICER
KERBER, WILLIAM J SENIOR VICE PRESIDENT/INVESTMENT OFFICER
KERMEEN, DEBORAH J VICE PRESIDENT
KERR, JAMES P SENIOR VICE PRESIDENT
KETCHER, RICHARD L ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
KEYSSER, RALF DONALD MANAGING DIRECTOR
KHOURI, DEBRA S VICE PRESIDENT/INVESTMENT OFFICER
KIDD, WILLIAM L SENIOR VICE PRESIDENT/INVESTMENT OFFICER
KINDSTROM, EARL E VICE PRESIDENT/INVESTMENT OFFICER
KING, AL VICE PRESIDENT/INVESTMENT OFFICER
KING, JOHN J SVP INSTITUTIONAL EQUITY SALES
KINSEY, KENNETH K VICE PRESIDENT/INVESTMENT OFFICER
KIRKENG, GURI VICE PRESIDENT
KLEIN, DAVID J VICE PRESIDENT/INVESTMENT OFFICER
KLEINSCHMIDT, GARY A VICE PRESIDENT/INVESTMENT OFFICER
KNIFFIN JR, OGDEN MANAGING DIRECTOR
KNITTEL, ROBERT C VICE PRESIDENT/INVESTMENT OFFICER
KNORRING, JAMES P VP INSTITUTIONAL EQUITY SALES
KNUDSON, LOREN R INVESTMENT OFFICER
KOENIG, LYNN R VICE PRESIDENT/INVESTMENT OFFICER
KOENIGS, RAYMOND R INVESTMENT OFFICER
KOLB, DANIEL J INVESTMENT OFFICER
KOOSMANN, NANCY J ASSOCIATE VICE PRESIDENT
KOSLOWSKI, DUANE E VICE PRESIDENT
KOTTMAN, MARGARET J ASSOCIATE VICE PRESIDENT
KOUGL, MAUREEN A INVESTMENT OFFICER
KRECH, RICHARD R VICE PRESIDENT
KREKOW, GORDON T SENIOR VICE PRESIDENT
KROENKE, MICHAEL A ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
KROHN, WILLIAM E VICE PRESIDENT/INVESTMENT OFFICER
KUECHENMEISTER, DANIEL P VICE PRESIDENT
KUEHN, GREGORY J INVESTMENT OFFICER
KULISH, JOHN S VP/IO/MANAGING DIRECTOR
KURIMAY, JOSEPH W VICE PRESIDENT/INVESTMENT OFFICER
KURTZ, CHARLES S INVESTMENT OFFICER
KUSS, GREGORY M SENIOR VICE PRESIDENT/INVESTMENT OFFICER
KUZNIK, CHERYLL A ASSOCIATE VICE PRESIDENT
LAABS, JANELLE S ASSOCIATE VICE PRESIDENT
LAINSON JR, JOHN J VICE PRESIDENT/INVESTMENT OFFICER
LAIR, DENNIS A ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
LAMBERT, KARL R ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
LAMPARD, RONALD R VP INSTITUTIONAL FIXED INCOME SALES
LAMSON, DENNIS R VP/IO/MANAGING DIRECTOR
LANE, ALFRED W SENIOR VICE PRESIDENT/INVESTMENT OFFICER
LANG, HENRY L VICE PRESIDENT/INVESTMENT OFFICER
LANGLEY, ROBERT W INVESTMENT OFFICER
LANKFORD, PHILIP F VICE PRESIDENT
LARKIN, DEAN R VICE PRESIDENT/INVESTMENT OFFICER
LARSEN, JOHN E VP/IO/MANAGING DIRECTOR
LARSON, DANIEL L MANAGING DIRECTOR
LARSON, GREGORY A ASSOCIATE VICE PRESIDENT
LAUBE, DAVID D VICE PRESIDENT/INVESTMENT OFFICER
LAW, GREGORY L VICE PRESIDENT/INVESTMENT OFFICER
LAWRENCE, CHRISTOPHER JD VP INSTITUTIONAL EQUITY SALES
LAWRENCE, GORDON D FIRST VICE PRESIDENT/INVESTMENT OFFICER
LAWSON, GEORGE A VICE PRESIDENT/INVESTMENT OFFICER
LEACH JR, ROBERT A AVP/IO/MANAGING DIRECTOR
LEAVERTON, KARL V SENIOR VICE PRESIDENT
LEAVITT, CRAYTON D VICE PRESIDENT/INVESTMENT OFFICER
LEE, ROBERT M INVESTMENT OFFICER
LEHR, LEON INVESTMENT OFFICER
LEONARD, BRYAN W FVP INSTITUTIONAL FIXED INCOME SALES
LESLIE, MARK T ASSOCIATE VICE PRESIDENT
LETHEBY, MICHAEL J ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
LEVY, MARK VICE PRESIDENT/INVESTMENT OFFICER
LEWIS, EARL F ASSOCIATE VICE PRESIDENT
LEWIS, RICHARD J VICE PRESIDENT/INVESTMENT OFFICER
LIBERTY, BRIAN F INVESTMENT OFFICER
LISTON, LARRY G VICE PRESIDENT/INVESTMENT OFFICER
LITT, LARRY N INVESTMENT OFFICER
LODDO, MARK C VICE PRESIDENT
LOGUE, EDWARD J VP INSTITUTIONAL FIXED INCOME SALES
LONGSDORF, RICHARD M VICE PRESIDENT/INVESTMENT OFFICER
LORENCE, DRAKE W VICE PRESIDENT/INVESTMENT OFFICER
LORENZ, JULIE A ASSOCIATE VICE PRESIDENT
LOUISELLE, MARK K VICE PRESIDENT
LOVE, RONALD L VICE PRESIDENT/INVESTMENT OFFICER
LUKK, OTT VICE PRESIDENT/INVESTMENT OFFICER
LUTIGER, JAMES P VICE PRESIDENT/INVESTMENT OFFICER
MACMILLAN, ROBERT J VICE PRESIDENT
MACPHERSON, GARY K SENIOR VICE PRESIDENT/INVESTMENT OFFICER
MADSEN, EARL K SVP/IO
MADSEN, JOHN K VICE PRESIDENT/INVESTMENT OFFICER
MADSON, JENNIFER L ASSOCIATE VICE PRESIDENT
MAERTENS, RAYMOND J INVESTMENT OFFICER
MAKELA, ROBERT P INVESTMENT OFFICER
MANNA, MARYANN M ASSOCIATE VICE PRESIDENT
MANSKE JR, STANLEY R SENIOR VICE PRESIDENT/INVESTMENT OFFICER
MARCOTTE, DANIEL B MANAGING DIRECTOR
MARDEN, DOROTHY A INVESTMENT OFFICER
MARKS, BENNETT E VICE PRESIDENT/INVESTMENT OFFICER
MARSHALL, JAMES A VICE PRESIDENT
MASON, STUART H MANAGING DIRECTOR
MASTERSON, THOMAS E VICE PRESIDENT/INVESTMENT OFFICER
MATAIC, DANIEL J ASSOCIATE VICE PRESIDENT
MATTSON, JAMES T VICE PRESIDENT/INVESTMENT OFFICER
MAYERLE, JOHN P VICE PRESIDENT/INVESTMENT OFFICER
MCBRIDE, JOSEPH M VP/IO/MANAGING DIRECTOR
MCCAGUE, ANN C VICE PRESIDENT
MCCALLUM, MAUREEN C VICE PRESIDENT
MCCARTHY, KENTON V INVESTMENT OFFICER
MCCORMICK, MICHAEL S AVP/IO/MANAGING DIRECTOR
MCCOURT, TIMOTHY P ASSOCIATE VICE PRESIDENT
MCCOY, HARRY A SENIOR VICE PRESIDENT/INVESTMENT OFFICER
MCDOW, JO L VICE PRESIDENT/INVESTMENT OFFICER
MCDOWELL, WILLIAM L VP/IO/MANAGING DIRECTOR
MCEVOY, SHIRLEY A VICE PRESIDENT/INVESTMENT OFFICER
MCFARLAND, DEVON M INVESTMENT OFFICER
MCFARLAND, RICHARD D VICE CHAIRMAN
MCFARLIN, JEFF C INVESTMENT OFFICER
MCGRAW, KNOWEL K ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
MCGUIRE, TOM W FIRST VICE PRESIDENT/INVESTMENT OFFICER
MCKELLIN, DAVID W ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
MCKENNA, JAMES D VICE PRESIDENT/INVESTMENT OFFICER
MCLAUGHLIN, CASEY P AVP/IO/MANAGING DIRECTOR
MCNEIL, MICHAEL L ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
MCPHAIL, DAN C ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
MCQUAID, MICHAEL M VICE PRESIDENT/INVESTMENT OFFICER
MEAD, DON R ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
MEANS, JAMES A VICE PRESIDENT/INVESTMENT OFFICER
MEHRER, ROGER L FIRST VICE PRESIDENT/INVESTMENT OFFICER
MELTON, DONALD R SVP/IO/MANAGING DIRECTOR
MERBACK, MICHAEL C INVESTMENT OFFICER
MERRIAM, THEODORE D VP INSTITUTIONAL EQUITY SALES
METZ, JOHN W ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
MEYER, PEGGY L ASSOCIATE VICE PRESIDENT
MIKLAUSICH, JOHN E ASSOCIATE VICE PRESIDENT
MILES, PETER B VICE PRESIDENT/INVESTMENT OFFICER
MILLER, JAMES E INVESTMENT OFFICER
MILLER, JOSEPH M INVESTMENT OFFICER
MILLER, LEO G INVESTMENT OFFICER
MILLER, MITCHELL D VICE PRESIDENT/INVESTMENT OFFICER
MILLS, MICHAEL B ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
MISNER JR, JOHN W VICE PRESIDENT/INVESTMENT OFFICER
MISTAK, THOMAS L INVESTMENT OFFICER
MITCHELL, JERRY L ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
MOEN, PHYLLIS E FIRST VICE PRESIDENT/INVESTMENT OFFICER
MOONEY, ANTHONY J VP/IO/MANAGING DIRECTOR
MOONEY, RICHARD A SENIOR VICE PRESIDENT/INVESTMENT OFFICER
MORRELL, JAMES L MANAGING DIRECTOR
MORRIS, FREDERICK L VICE PRESIDENT
MORTIMER JR, ROBERT T VP/IO/MANAGING DIRECTOR
MORTIMER, PETER S VICE PRESIDENT/INVESTMENT OFFICER
MUELLER, CRAIG P VP INSTITUTIONAL FIXED INCOME SALES
MUELLER, FREDERICK B VICE PRESIDENT/INVESTMENT OFFICER
MUELLER, PATRICIA A AVP/IO/MANAGING DIRECTOR
MUNRO, CHARLES B VICE PRESIDENT/INVESTMENT OFFICER
MURDOCK, GUY B MANAGING DIRECTOR
MURPHY, JAMES J SENIOR VICE PRESIDENT/INVESTMENT OFFICER
MURPHY, KATHLEEN R VICE PRESIDENT
MURRAY, DENNIS J MANAGING DIRECTOR
MYERS, DAVID E SVP/IO/MANAGING DIRECTOR
NAEDLER, HENRY W VICE PRESIDENT/INVESTMENT OFFICER
NAKAMURA, THEODORE T VICE PRESIDENT/INVESTMENT OFFICER
NASH, CHARLES F VICE PRESIDENT/INVESTMENT OFFICER
NASH, HARRY W INVESTMENT OFFICER
NASLUND, RANDOLPH W INVESTMENT OFFICER
NELSON, DENNIS E VP INSTITUTIONAL FIXED INCOME SALES
NELSON, DONALD A ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
NELSON, ROBERT E ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
NELSON, TERRY G INVESTMENT OFFICER
NELSON, W DON MANAGING DIRECTOR
NETZEL, THOMAS C FVP INSTITUTIONAL FIXED INCOME SALES
NIEBLER, GREGORY A VICE PRESIDENT/INVESTMENT OFFICER
NIELSON, THOMAS E VICE PRESIDENT/INVESTMENT OFFICER
NIES, ROYCE N VICE PRESIDENT/INVESTMENT OFFICER
NODLER, RICHARD E ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
NORDSTROM, JONATHAN W VP INSTITUTIONAL FIXED INCOME SALES
NORMAN, TED J INVESTMENT OFFICER
NORRIS, ROCKY J VP/IO/MANAGING DIRECTOR
NOWICKI, JOHN M VICE PRESIDENT/INVESTMENT OFFICER
NUNES JR, ARTHUR G FIRST VICE PRESIDENT/INVESTMENT OFFICER
O'BRIEN, GORDON A INVESTMENT OFFICER
O'CONNOR, GREGORY D VICE PRESIDENT
O'MALLEY, JOHN C EXECUTIVE VICE PRESIDENT
O'MEARA JR, MICHAEL J ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
ODELL, CHARLES K INVESTMENT OFFICER
OGIELA, GREGORY A VICE PRESIDENT/INVESTMENT OFFICER
OLANIE, ERIC F FIRST VICE PRESIDENT/INVESTMENT OFFICER
OLSEN, EVAN P VICE PRESIDENT
OLSEN, KRISTIAN A FIRST VICE PRESIDENT/INVESTMENT OFFICER
OLSON, CRAIG W INVESTMENT OFFICER
OLSON, CURTIS A ASSOCIATE VICE PRESIDENT
OLSON, MARTIN C VICE PRESIDENT/INVESTMENT OFFICER
OLTROGGE, GARY R ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
ORGEL, MARK A SENIOR VICE PRESIDENT/INVESTMENT OFFICER
ORRICO, BRIAN J INVESTMENT OFFICER
OSBORNE, WILLIAM J INVESTMENT OFFICER
OWEN, FAITH R ASSOCIATE VICE PRESIDENT
PACKMAN, JEFFREY S VICE PRESIDENT/INVESTMENT OFFICER
PALEEN, JULIE A VICE PRESIDENT
PALMICH, JAMES J AVP INSTITUTIONAL EQUITY SALES"
PAPANIA, LEE M VICE PRESIDENT
PARKS, WILLIAM B SENIOR VICE PRESIDENT/INVESTMENT OFFICER
PARROTT, GERALDINE M VICE PRESIDENT/INVESTMENT OFFICER
PATES, JOHN R VICE PRESIDENT
PATRICK, SANDRA S INVESTMENT OFFICER
PATTERSON, JAMES F ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
PATTON, RICK L VICE PRESIDENT/INVESTMENT OFFICER
PAVISH, JESSICA E INVESTMENT OFFICER
PAWLAK, GREGORY S SENIOR VICE PRESIDENT/INVESTMENT OFFICER
PEASE, BRAD R VICE PRESIDENT/INVESTMENT OFFICER
PEASE, SUSAN R VP INSTITUTIONAL FIXED INCOME SALES
PECK, WENDELL C INVESTMENT OFFICER
PECKUMN, DOUGLAS G INVESTMENT OFFICER
PEDERSEN, LEONARD S VICE PRESIDENT/INVESTMENT OFFICER
PEDERSEN, RICHARD A SENIOR VICE PRESIDENT/INVESTMENT OFFICER
PEDERSEN, RICHARD J MANAGING DIRECTOR/DIRECTOR
PEDERSON, SANDRA F VICE PRESIDENT
PERRINE, JEFFREY A VP INSTITUTIONAL FIXED INCOME SALES
PETERS, DANIEL N VICE PRESIDENT/INVESTMENT OFFICER
PETERSON, GARY W FIRST VICE PRESIDENT/INVESTMENT OFFICER
PETERSON, JUDD M ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
PETRAS, RICHARD G INVESTMENT OFFICER
PETTIROSSI, MAUREEN H VICE PRESIDENT
PETTIT, LYNN R FIRST VICE PRESIDENT/INVESTMENT OFFICER
PEYTON, JOHN W SENIOR VICE PRESIDENT/INVESTMENT OFFICER
PEYTON, ROBERT J VICE PRESIDENT/INVESTMENT OFFICER
PHILLIPS, EDWARD L MANAGING DIRECTOR
PHILLIPS, THOMAS W VICE PRESIDENT/INVESTMENT OFFICER
PIEROTTI, VINCE AVP INSTITUTIONAL FIXED INCOME SALES
PIERPONT, JAMES W EXECUTIVE VICE PRESIDENT
PIETILA, BRADLEY M INVESTMENT OFFICER
POKELA, BARBARA L ASSOCIATE VICE PRESIDENT
POLLOCK, DAVID M SENIOR VICE PRESIDENT/INVESTMENT OFFICER
POLYDOROS, NICK J FIRST VICE PRESIDENT/INVESTMENT OFFICER
PORASIK, JEFFREY N ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
POSNER, ROBERT L FIRST VICE PRESIDENT/INVESTMENT OFFICER
POWERS, GLENN T MANAGING DIRECTOR
PUGSLEY, PAUL F ASSOCIATE VICE PRESIDENT
QUADE, STEVEN A INVESTMENT OFFICER
QUAID, STEVEN P INVESTMENT OFFICER
QUALLEY, GARY J VP/IO/MANAGING DIRECTOR
QUALY, JOHN C INVESTMENT OFFICER
QUIGLEY, THOMAS L ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
QUINN, ANDREW L INVESTMENT OFFICER
QUINN, ANNE M VP INSTITUTIONAL FIXED INCOME SALES
QUINN, DAVID M INVESTMENT OFFICER
RADTKE, DAVID F SENIOR VICE PRESIDENT/INVESTMENT OFFICER
RAE, ROBERT T SENIOR VICE PRESIDENT/INVESTMENT OFFICER
RAFTI, WILLIAM R VP/IO/MANAGING DIRECTOR
RAMOS, DEAN A VICE PRESIDENT
RANALS, JAMES E VICE PRESIDENT/INVESTMENT OFFICER
RASMUSSEN, BJARNE T ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
RAU, LINDA L ASSOCIATE VICE PRESIDENT
RAWLINSON, BOLLING H VICE PRESIDENT/INVESTMENT OFFICER
RAY, RICHARD C ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
RAYMOND, DIANE L AVP INSTITUTIONAL FIXED INCOME SALES
RAYNE, WILLIAM F SENIOR VICE PRESIDENT/INVESTMENT OFFICER
REAGAN, BRIAN J MANAGING DIRECTOR
REDMOND, THOMAS P VICE PRESIDENT/INVESTMENT OFFICER
REILLY, JOHN D VICE PRESIDENT/INVESTMENT OFFICER
REINKENSMEYER, DONALD C INVESTMENT OFFICER
RESER, ALAN L VICE PRESIDENT/INVESTMENT OFFICER
REUSS, DANIEL J EXECUTIVE VICE PRESIDENT/CFO
REWEY, JAMES O SENIOR VICE PRESIDENT/INVESTMENT OFFICER
RICHMAN, MARK T VICE PRESIDENT
RICHTER, ARTHUR H VICE PRESIDENT/INVESTMENT OFFICER
RIDENOUR, JAMES G FVP INSTITUTIONAL FIXED INCOME SALES
RIFKIN, ALAN M VICE PRESIDENT
RIGGIO, ROBERT C VICE PRESIDENT
RINGSMUTH, DENNIS M SVP/IO/MANAGING DIRECTOR
RIPPY, ROBERT E ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
RISHER, STEPHAN O INVESTMENT OFFICER
ROBERTS, HOWELL P VICE PRESIDENT
ROBINSON, TONI S ASSOCIATE VICE PRESIDENT
ROBINSON, WILLIAM S VICE PRESIDENT/INVESTMENT OFFICER
ROBITAILLE, THOMAS W FIRST VICE PRESIDENT/INVESTMENT OFFICER
RODER, JONATHAN M VICE PRESIDENT/INVESTMENT OFFICER
ROED JR, CLARENCE FRED FVP/IO/MANAGING DIRECTOR
ROETHLE, JOHN H FIRST VICE PRESIDENT/INVESTMENT OFFICER
ROMERO, JOHN A ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
ROONEY, MICHAEL INVESTMENT OFFICER
ROSS, WILLIAM F VICE PRESIDENT/INVESTMENT OFFICER
ROSSO, WILLIAM J SENIOR VICE PRESIDENT
RUSH, BARRIE J VICE PRESIDENT/INVESTMENT OFFICER
RUSTAD, JAMES W ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
RYAN, MARGARET M VICE PRESIDENT
SALZMAN, DENNIS G VICE PRESIDENT/INVESTMENT OFFICER
SAMMONS, GREG P SVP INSTITUTIONAL FIXED INCOME SALES
SANTOS, STEPHEN W ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
SAROVICH, STEVEN R AVP INSTITUTIONAL FIXED INCOME SALES
SAWYER, ROBERT I VICE PRESIDENT/INVESTMENT OFFICER
SCHAUS, DAVID J SENIOR VICE PRESIDENT
SCHERER, RACHAEL M MANAGING DIRECTOR
SCHLUCHTER, WAYNE W VICE PRESIDENT/INVESTMENT OFFICER
SCHMIDT, ROGER J SENIOR VICE PRESIDENT/INVESTMENT OFFICER
SCHMITZ, CAROL A VICE PRESIDENT
SCHNEEBECK, ROBERT J VICE PRESIDENT/INVESTMENT OFFICER
SCHONEBAUM, DAVID R VICE PRESIDENT/INVESTMENT OFFICER
SCHOR, STEPHEN J INVESTMENT OFFICER
SCHULTZ, GERALD VP INSTITUTIONAL EQUITY SALES
SCOTT, KENNETH R VICE PRESIDENT
SEBASTIAN, JOHN V SVP INSTITUTIONAL FIXED INCOME SALES
SELINE, PHILIP M INVESTMENT OFFICER
SERGEANT, JAMES CHRIS VICE PRESIDENT
SEYLER, JAMES R ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
SHAFFER, WILLIAM J VICE PRESIDENT/INVESTMENT OFFICER
SHANNON, ROBERT S INVESTMENT OFFICER
SHARMA, SHREE N VICE PRESIDENT/INVESTMENT OFFICER
SHARP, TERRENCE L VICE PRESIDENT/INVESTMENT OFFICER
SHAUGHNESSY, ROBERT M VICE PRESIDENT/INVESTMENT OFFICER
SHAW JR, FRED D SVP/IO/MANAGING DIRECTOR
SHOEMAKER JR, CHARLES J VICE PRESIDENT/INVESTMENT OFFICER
SHOLIAN, DANIEL C VICE PRESIDENT/INVESTMENT OFFICER
SIEBOLD, THOMAS H INVESTMENT OFFICER
SIEBRASSE, DANIEL H ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
SIEGLER, JOHN C SENIOR VICE PRESIDENT
SIKICH, JOSEPH D VICE PRESIDENT/INVESTMENT OFFICER
SIMENSEN, KIMBERLY O VICE PRESIDENT
SIMMONS, BARBARA N VICE PRESIDENT/INVESTMENT OFFICER
SIMPSON, CAROL D INVESTMENT OFFICER
SINCLAIR, CHARLES W VICE PRESIDENT/INVESTMENT OFFICER
SINKULA, JOHN A SENIOR VICE PRESIDENT/INVESTMENT OFFICER
SIRE, WENDY R ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
SKILLESTAD, ROBERT A ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
SLOAN, OWEN A VICE PRESIDENT/INVESTMENT OFFICER
SMEGAL, BRADLEY T VICE PRESIDENT/INVESTMENT OFFICER
SMITH, DAVID W VICE PRESIDENT/INVESTMENT OFFICER
SMITH, DELBERT E FIRST VICE PRESIDENT/INVESTMENT OFFICER
SMITH, GRANT D VICE PRESIDENT/INVESTMENT OFFICER
SMITH, STEPHEN M VICE PRESIDENT
SMOLAREK, CORINNE M ASSOCIATE VICE PRESIDENT
SODERLUND, JOHN R VICE PRESIDENT/INVESTMENT OFFICER
SOGGE, DAVID B SENIOR VICE PRESIDENT
SOLON, VLASIE SVP/IO/MANAGING DIRECTOR
SOUDERS, WILLIAM R FVP INSTITUTIONAL FIXED INCOME SALES
SOUTH, DONALD R VP/IO/MANAGING DIRECTOR
SPAVIN, CHARLES H INVESTMENT OFFICER
SPEARS, GREGORY V VP/IO/MANAGING DIRECTOR
SPENCER, MICHAEL M INVESTMENT OFFICER
SPHEERIS, LEON G VICE PRESIDENT/INVESTMENT OFFICER
SPRINGER, SCOTT D ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
STANO, JOHN P VICE PRESIDENT/INVESTMENT OFFICER
STEBBINS, RICHARD B SENIOR VICE PRESIDENT
STEHR, ROLLYN D INVESTMENT OFFICER
STENGEL, JOHN R SVP/IO/MANAGING DIRECTOR
STONER JR, PAUL A VICE PRESIDENT/INVESTMENT OFFICER
STOREY JR, BENJAMIN M SENIOR VICE PRESIDENT/INVESTMENT OFFICER
STOTTS, THOMAS J VICE PRESIDENT
STOVER, ALLEN L FIRST VICE PRESIDENT/INVESTMENT OFFICER
STRAIGHT, THOMAS G VP/IO/MANAGING DIRECTOR
STYRBICKI, JOHN M FVP INSTITUTIONAL FIXED INCOME SALES
SUCHARSKI, THOMAS J VICE PRESIDENT/INVESTMENT OFFICER
SULLIVAN, MICHAEL G VP INSTITUTIONAL FIXED INCOME SALES
SULLIVAN, THOMAS E MANAGING DIRECTOR
SULLIVAN, THOMAS M MANAGING DIRECTOR
SUMNERS, MARY S VICE PRESIDENT
SURBECK, RICHARD J SENIOR VICE PRESIDENT/INVESTMENT OFFICER
SVENDSEN, G ROLF VP INSTITUTIONAL EQUITY SALES
SWANSON, ROGER W VICE PRESIDENT/INVESTMENT OFFICER
SYKES, SUSAN M INVESTMENT OFFICER
SYMINGTON, GAREY T VICE PRESIDENT
TALT, SANDRA L ASSOCIATE VICE PRESIDENT
TEJERA, RICHARD J MANAGING DIRECTOR
TENNEY, DAN INVESTMENT OFFICER
TESKE, JOHN E ASSOCIATE VICE PRESIDENT
THEISS, RANDY L VP INSTITUTIONAL FIXED INCOME SALES
THIELE, RICHARD W ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
THOMAS, FAYETTE FIRST VICE PRS/INVESTMENT OFFICER
THOMAS, JAMES R ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
THOMPSON, JOHN G FIRST VICE PRESIDENT/INVESTMENT OFFICER
THOMPSON, JOHN L VP/IO/MANAGING DIRECTOR
THORNTON, MICHAEL J ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
TIERNEY JR, EUGENE W VICE PRESIDENT/INVESTMENT OFFICER
TISKUS, JOHN P INVESTMENT OFFICER
TOBIN, CATHLEEN B SENIOR VICE PRESIDENT
TODD, RICHARD M FIRST VICE PRESIDENT/INVESTMENT OFFICER
TORKELSON, BRYN H FIRST VICE PRESIDENT/INVESTMENT OFFICER
TOWNE, JAMES H VICE PRESIDENT
TRACY, RONALD G FIRST VICE PRESIDENT/INVESTMENT OFFICER
TRAGESER, DAVID P VICE PRESIDENT
TRAMONTINA, MICHAEL L VICE PRESIDENT
TRIPP, THOMAS G VICE PRESIDENT/INVESTMENT OFFICER
TSCHETTER, RONALD A EXECUTIVE VICE PRESIDENT
TWOHIG, JOSEPH E VICE PRESIDENT/INVESTMENT OFFICER
UPIN, DAVID T VICE PRESIDENT/INVESTMENT OFFICER
UPTON III, JOHN HAROLD VICE PRESIDENT/INVESTMENT OFFICER
UTLEY, JAMES T VP/IO/MANAGING DIRECTOR
UTOFT, DANIEL A ASSOCIATE VICE PRESIDENT
VANDEN HEUVEL, MATTHEW INVESTMENT OFFICER
VAUGHAN, ANGUS M VICE PRESIDENT
VINSON, CURTIS INVESTMENT OFFICER
VOGEL, CHARLES S VP INSTITUTIONAL EQUITY SALES
VOGEL, DALE J VICE PRESIDENT/INVESTMENT OFFICER
VOLK, JOAN L ASSOCIATE VICE PRESIDENT
VORHEES, BRAD M VICE PRESIDENT/INVESTMENT OFFICER
WADE, EUGENE R VICE PRESIDENT/INVESTMENT OFFICER
WAGNER JR, DONALD J ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
WAITS, DENNIS N INVESTMENT OFFICER
WALL, CURTIS L FVP/IO/MANAGING DIRECTOR
WALLSTEIN, GARY L VICE PRESIDENT/INVESTMENT OFFICER
WALSH, STEPHEN J ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
WALTER, THOMAS T INVESTMENT OFFICER
WANNE, SIDNEY C SENIOR VICE PRESIDENT/INVESTMENT OFFICER
WARNER, CRAIG W ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
WATTIER, RICHARD A INVESTMENT OFFICER
WEBB, STANTON R VICE PRESIDENT/INVESTMENT OFFICER
WEEMS, DON G VICE PRESIDENT/INVESTMENT OFFICER
WEINGARTNER, HARRY VICE PRESIDENT/INVESTMENT OFFICER
WEINRICH, FREDERICK J VICE PRESIDENT/INVESTMENT OFFICER
WEIRICH, JOSEPH J VICE PRESIDENT/INVESTMENT OFFICER
WEISER, IRVING CHAIRMAN & CEO
WELCH, JOHN D SENIOR VICE PRESIDENT
WELTZIEN, DON L SENIOR VICE PRESIDENT/INVESTMENT OFFICER
WEST JR, GENE T VICE PRESIDENT/INVESTMENT OFFICER
WESTERBUR, BARBARA J VICE PRESIDENT
WESTLING, CHARLES B MANAGING DIRECTOR
WHALEN, DARBY J VICE PRESIDENT
WHALEN.JR, JOHN L VICE PRESIDENT/INVESTMENT OFFICER
WHITCOMB, JOHN F VICE PRESIDENT/INVESTMENT OFFICER
WHITE, JAMES R VICE PRESIDENT
WHITE, RONALD G FVP/IO/MANAGING DIRECTOR
WICK, SCOTT R VICE PRESIDENT/INVESTMENT OFFICER
WICKMAN, BARRY E VICE PRESIDENT/INVESTMENT OFFICER
WIEDERHOEFT, DIANE M ASSOCIATE VICE PRESIDENT
WIER, MICHAEL J MANAGING DIRECTOR
WILKINSON, CHARLES H VICE PRESIDENT/INVESTMENT OFFICER
WILLE, VICKI L ASSOCIATE VICE PRESIDENT/INVESTMENT OFFICER
WILSON, ROBERT J VP/IO/MANAGING DIRECTOR
WILSON, TERRANCE L VP/IO/MANAGING DIRECTOR
WINKEY, TRAVIS J VICE PRESIDENT
WINSNESS, SHARON A VICE PRESIDENT/INVESTMENT OFFICER
WISEMAN, WILLIAM R INVESTMENT OFFICER
WITT, GREGORY A INVESTMENT OFFICER
WITTENBURG, BONNIE L MANAGING DIRECTOR
WOLFE, DAVID M VICE PRESIDENT
WOZNIAK, JAMES M VICE PRESIDENT/INVESTMENT OFFICER
WOZNY, GARY M VICE PRESIDENT/INVESTMENT OFFICER
WRIGHT, ROBERT S INVESTMENT OFFICER
WYSZYNSKI, DON H MANAGING DIRECTOR/DIRECTOR
YANISCH, STEPHEN J MANAGING DIRECTOR/DIRECTOR
YOUNG, GAVIN W SENIOR VICE PRESIDENT/INVESTMENT OFFICER
ZWEIBACK, TIMOTHY S INVESTMENT OFFICER
ZWICK, BRUCE J MANAGING DIRECTOR/DIRECTOR
<PAGE>
OFFICERS OF RAUSCHER PIERCE REFSNES, INC.
AS OF
SEPTEMBER 26, 1995
EMPLOYEE NAME...................JOB TITLE.................................
ABRAMS, MICHAEL I VICE PRESIDENT/INVESTMENT BANKER
AGUILA JR, PERCY R VICE PRESIDENT/INVESTMENT BANKER
AIRINGTON, J EVERETT VICE PRESIDENT/INVESTMENT EXECUTIVE
AKE, PAUL JOSEPH VICE PRESIDENT/TRADER
ALEXANDER, STEVEN R VICE PRESIDENT/INVESTMENT EXECUTIVE
ANDERLITCH, THOMAS M VICE PRESIDENT/INVESTMENT EXECUTIVE
ANDREW, JAMES M SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
ARTAUD, FERNANDO LUIS VICE PRESIDENT/INVESTMENT EXECUTIVE
AYERS, RONNIE M VICE PRESIDENT/INVESTMENT EXECUTIVE
BAKER, ALLEN DALE FIRST VICE PRESIDENT/INVESTMENT EXECUTIVE
BAKER, JOHN R VICE PRESIDENT/INVESTMENT EXECUTIVE
BAKER, MARK S SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
BALDWIN, WILLIAM L SENIOR VICE PRESIDENT/ANALYST
BALES, WESLEY O SENIOR VICE PRESIDENT/REGIONAL MANAGER
BARKER, WILLIAM E SENIOR VICE PRESIDENT/RESEARCH COORDINATOR
BARNARD, WILLIAM K SENIOR VICE PRESIDENT/TRADER
BARNETT, ROBERT W SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
BARNEY, ROGER A VICE PRESIDENT/INVESTMENT EXECUTIVE
BARTHOLOMEW, JANA R FIRST VICE PRESIDENT/INVESTMENT BANKER
BAUCHMAN, JOHN R VICE PRESIDENT/TRADER
BEACH, JEFFREY L VICE PRESIDENT/ANALYST
BEANE, CLIFTON ARCHIE VICE PRESIDENT/INVESTMENT EXECUTIVE
BELTER, KENNETH J VICE PRESIDENT/CO-MANAGER
BENSON, BRYAN E VICE PRESIDENT/INVESTMENT EXECUTIVE
BERGMAN, CAROLYN VICE PRESIDENT/TRADER
BIEGEL, WILLIAM H VICE PRESIDENT/INVESTMENT EXECUTIVE
BLACKWELL, JOHN T SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
BLATTEL, RUDOLF J VICE PRESIDENT/TRADER
BLONKVIST, KEVIN M VICE PRESIDENT/INVESTMENT EXECUTIVE
BLOOMFIELD JR, EDWIN E SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
BLOUNT, HARRY VICE PRESIDENT/ANALYST
BOLES, KAPPNER C FIRST VICE PRESIDENT/INVESTMENT EXECUTIVE
BONNER, PAULETTA VICE PRESIDENT/INVESTMENT EXECUTIVE
BOULWARE JR, JOHN C SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
BOWEN, J. LEE VICE PRESIDENT/INVESTMENT EXECUTIVE
BOYNTON, JAMES BRYAN FIRST VICE PRESIDENT/INVESTMENT EXECUTIVE
BOZALIS JR, JOHN R VICE PRESIDENT/INVESTMENT BANKER
BRANDENBERGER, ROBERT J SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
BRAVER, ROBERT E SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
BRAZELTON III, LEWIS E SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
BRECKENRIDGE, JOHN R VICE PRESIDENT/INVESTMENT EXECUTIVE
BRECKENRIDGE, SUE ANN VICE PRESIDENT/INVESTMENT EXECUTIVE
BROLLIER, DAVID S FIRST VICE PRESIDENT/INVESTMENT EXECUTIVE
BROOKS, PHILIP J VICE PRESIDENT/INVESTMENT EXECUTIVE
BROWN JR, ROBERT H EXECUTIVE VICE PRESIDENT/MFG/CORP CAPITAL
<PAGE>
BROWN, STEVE VICE PRESIDENT/MANAGER
BUBAS, DAVID A VICE PRESIDENT/INVESTMENT EXECUTIVE
BUCHANAN, D KIRK VICE PRESIDENT/MANAGER
BUCHANAN, ROBERT SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
BUCK, G CLYDE SENIOR VICE PRESIDENT/MANAGING DIRECTOR
BUNDOCK, JOHN E VICE PRESIDENT/INVESTMENT EXECUTIVE
BURKHART, THEODORE R FIRST VICE PRESIDENT/BRANCH MANAGER
BURNETT, FREDERICK W SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
BUTLER, SUSAN A FIRST VICE PRESIDENT/INVESTMENT EXECUTIVE
CAMPBELL, WILLIAM F SENIOR VICE PRESIDENT/BRANCH MANAGER
CANNING JR, ROBERT B VICE PRESIDENT/TRADER
CARNEY, WILLIAM R VICE PRESIDENT/INVESTMENT BANKER
CARTER, JOHN THOMAS SENIOR VICE PRESIDENT/MANAGER
CASSIDY, PAUL J FIRST VICE PRESIDENT/MANAGER
CATUZZI, LAWRENCE R SENIOR VICE PRESIDENT/MANAGING DIRECTOR
CHAPMAN, BRUCE SCOTT FIRST VICE PRESIDENT/INVESTMENT EXECUTIVE
CHAPMAN, VAN WILLIAM VICE PRESIDENT/INVESTMENT EXECUTIVE
CHEREN, BARRY MICHAEL FIRST VICE PRESIDENT/BRANCH MANAGER
CHESLER, LAURA EHRENBERG VICE PRESIDENT/BRANCH MANAGER
CHESLEY, GED S FIRST VICE PRESIDENT/BRANCH MANAGER
CHESNUT JR, WILLIAM G SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
CHILDRES, GLENN DEAN SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
CLAWSON, ROBERT JEFF VICE PRESIDENT/INVESTMENT EXECUTIVE
CLONTZ, RANDLE L VICE PRESIDENT/INVESTMENT EXECUTIVE
COLONNA, THOMAS PAUL SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
COLORADO, TAMARA VICE PRESIDENT/INVESTMENT BANKER
COOLEY III, JAMES W FIRST VICE PRESIDENT/TRADER
COOPER, DUANE C SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
COOPER, MALCOLM L SENIOR VICE PRESIDENT/BRANCH MANAGER
COPE SENIOR, MICHAEL A VICE PRESIDENT/TRADER
CORDIAK, ROBERT B VICE PRESIDENT/INVESTMENT EXECUTIVE
COTTRELL, JOHN HALL VICE PRESIDENT/INVESTMENT EXECUTIVE
COUCH, STEPHEN F VICE PRESIDENT/INVESTMENT EXECUTIVE
CROWLEY, LAWRENCE A SENIOR VICE PRESIDENT/ANALYST
CUNNINGHAM, JOSEPH P SENIOR VICE PRESIDENT/MANAGING DIRECTOR
CUNNINGHAM, THOMAS L VICE PRESIDENT/ANALYST
CUTCHALL, CRESTON C SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
DALTON, JOHN W FIRST VICE PRESIDENT/INVESTMENT EXECUTIVE
DAVIS JR, RICHARD H SENIOR VICE PRESIDENT/RESEARCH DIRECTOR
DAVIS, CELESTE E FIRST VICE PRESIDENT/INVESTMENT BANKER
DAVIS, GEORGE BRIAN VICE PRESIDENT/INVESTMENT BANKER
DAVIS, KENNETH E VICE PRESIDENT/SYSTEMS TRAINER
DAVIS, RICHARD L SENIOR VICE PRESIDENT/INVESTMENT BANKER
DELONG, F. DONALD VICE PRESIDENT/BRANCH MANAGER
DEMARZIO, DAVID FIRST VICE PRESIDENT/BRANCH MANAGER
DENNIS, RANDY W VICE PRESIDENT/INVESTMENT EXECUTIVE
DEVENPORT, JOHN T VICE PRESIDENT/INVESTMENT EXECUTIVE
DINERMAN, MARY A SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
DOLLARHIDE, DAVID W SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
DORRANCE JR, GEORGE W FIRST VICE PRESIDENT/INVESTMENT EXECUTIVE
DRALLE, SHAWN M VICE PRESIDENT/INVESTMENT BANKER
DUFFY, THOMAS P SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
DUPERIER, FRANK D SENIOR VICE PRESIDENT/MANAGER
DUPRE, DANIEL A SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
<PAGE>
DUPSKE, MARY F VICE PRESIDENT/MANAGER
EADES, THOMAS H VICE PRESIDENT/INVESTMENT EXECUTIVE
EDWARDS, BERT E VICE PRESIDENT/TRADER
ELDER JR, JOHN DEVINE VICE PRESIDENT/INVESTMENT EXECUTIVE
ELLER, JAMES R FIRST VICE PRESIDENT/INVESTMENT EXECUTIVE
ELLSTON, GREGORY W FIRST VICE PRESIDENT/PRIVATE CLIENT GR
EVANS, MARC W FIRST VICE PRESIDENT/INVESTMENT EXECUTIVE
FELTHAM, JAMES R SENIOR VICE PRESIDENT/INVESTMENT BANKER
FERNANDEZ, RUBEN G VICE PRESIDENT/INVESTMENT EXECUTIVE
FERRANTE, JOSEPH P SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
FESTE, JOSEPH A FIRST VICE PRESIDENT/INVESTMENT EXECUTIVE
FILINGERI, MICHAEL JOSEPH SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
FLOURNOY, CHARLES R VICE PRESIDENT/INVESTMENT EXECUTIVE
FORRESTER, TOMMY VICE PRESIDENT/INVESTMENT EXECUTIVE
FRADENBURG, GLEN A VICE PRESIDENT/INVESTMENT EXECUTIVE
FREE, JOLYNN H VICE PRESIDENT/INVESTMENT EXECUTIVE
FREUND, KURT M SENIOR VICE PRESIDENT/INVESTMENT BANKER
FRISCHKORN JR, DAVID E.K. SENIOR VICE PRESIDENT/CO-MANAGER
FULLER, SANDRA J VICE PRESIDENT/MANAGER
GARTLAN,JR, DONALD G VICE PRESIDENT/MANAGER
GEESMAN, JOHN L SENIOR VICE PRESIDENT/MANAGING DIRECTOR
GERON, JAMES M SENIOR VICE PRESIDENT REGIONAL MANAGER
GESSINGER, P RICHARD SENIOR VICE PRESIDENT/MANAGING DIRECTOR
GIACOBBE, ROBERT J VICE PRESIDENT/INVESTMENT EXECUTIVE
GILBERT, JOHN W VICE PRESIDENT/INVESTMENT EXECUTIVE
GILBERT, LARRY O VICE PRESIDENT/ASSISTANT BRANCH MANAGER
GILMAN, RICHARD SENIOR VICE PRESIDENT/MANAGER
GLOSSER, GREGORY C SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
GOLLADAY, MONTY A VICE PRESIDENT/INVESTMENT EXECUTIVE
GOOKIN, CLIFFORD D SENIOR VICE PRESIDENT/MANAGING DIRECTOR
GORDON, WARREN E VICE PRESIDENT/MANAGER
GREEN, MICHAEL D VICE PRESIDENT/INVESTMENT EXECUTIVE
GREENBERG, BARRY VICE PRESIDENT/MANAGER
GREER JR, JOHN MARCUS FIRST VICE PRESIDENT/MANAGER
GRIMES, MARSHALL W VICE PRESIDENT/INVESTMENT EXECUTIVE
GUMBERT, WILLIAM J VICE PRESIDENT/INVESTMENT BANKER
GUTKOWSKI SR, JOSEPH P SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
HALPERN, MILTON SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
HAM, JAMES M FIRST VICE PRESIDENT/INVESTMENT EXECUTIVE
HAMEL, CHRISTOPHER P SENIOR VICE PRESIDENT/MANAGING DIRECTOR
HANKS, KENNETH R EXECUTIVE VICE PRESIDENT/CFO
HANLEY, DONALD W SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
HARDEE, H H SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
HARPER, CHARLES E FIRST VICE PRESIDENT/INVESTMENT EXECUTIVE
HARRIS, KENNETH B VICE PRESIDENT/TRADER
HARTWIG, LEIF C FIRST VICE PRESIDENT/INVESTMENT EXECUTIVE
HASIE, MONTAGUE S SENIOR VICE PRESIDENT/BRANCH MANAGER
HASIE, TODD L SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
HAUSE JR, GERALD W VICE PRESIDENT/INVESTMENT EXECUTIVE
HEDRICK JR, ROBERT K SENIOR VICE PRESIDENT/INVESTMENT BANKER
HENDERSON, DALE R SENIOR VICE PRESIDENT/MANAGING DIRECTOR
HENDERSON, ROBERT V SENIOR VICE PRESIDENT/MANAGING DIRECTOR
HERNDON, RUSSELL B SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
HICKEY, JOHN E SENIOR VICE PRESIDENT/BRANCH MANAGER/PRESIDENT
<PAGE>
HICKMAN, ROBERT F SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
HICKS, LINDSEY P VICE PRESIDENT/BRANCH MANAGER
HIGH, BLAKE VINCENT VICE PRESIDENT/INVESTMENT EXECUTIVE
HIGLEY, ROBERT A SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
HILGER, MICHAEL D VICE PRESIDENT/INVESTMENT EXECUTIVE
HILLIS, AKLEEMA VICE PRESIDENT/MANAGER
HOLDER, JOYCE L VICE PRESIDENT/UNDERWRITER
HOLLENKAMP, DENNIS VICE PRESIDENT/SYSTEM LIAISON
HOOSE, ANN M SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
HORLER, VIRGINIA L SENIOR VICE PRESIDENT/MANAGING DIRECTOR
HORTON, GARY L VICE PRESIDENT/INVESTMENT EXECUTIVE
HOUSTON, DAVID LYNN SENIOR VICE PRESIDENT/BRANCH MANAGER
HOWELL, CHARLES C SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
HOWELL, DANIEL D VICE PRESIDENT/INVESTMENT EXECUTIVE
HUSSEY, BOYNTON FIRST VICE PRESIDENT/BRANCH MANAGER
ILDEBRANDO, FRANK J SENIOR VICE PRESIDENT/INVESTMENT BANKER
JOHNSEN, ROBERT J SENIOR VICE PRESIDENT/MANAGING DIRECTOR
JOHNSTON, DWIGHT T SENIOR VICE PRESIDENT/FIXED INCOME TAX
JONES, B PAUL VICE PRESIDENT/INVESTMENT EXECUTIVE
JONES, BARBARA R VICE PRESIDENT/MANAGER
JONES, CHARLES R FIRST VICE PRESIDENT/INVESTMENT BANKER
JORDAN, JAY SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
KEARNEY, JOHN D SENIOR VICE PRESIDENT/MANAGING DIRECTOR
KELLER, STEWART VICE PRESIDENT/INVESTMENT EXECUTIVE
KELLEY, BRUCE D SENIOR VICE PRESIDENT/INVESTMENT BANKER
KELLY, LINDA B VICE PRESIDENT/MUNICIPAL RETAIL
KILLIAN, KENNETH V VICE PRESIDENT/INVESTMENT EXECUTIVE
KIMBALL, BRADLEY S FIRST VICE PRESIDENT/DIRECTOR/HUMAN RESOURCES
KING SR, MICHAEL C SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
KING, BILLIE C VICE PRESIDENT/INVESTMENT EXECUTIVE
KIPP, JAMES R SENIOR VICE PRESIDENT/INVESTMENT BANKER
KNIGHT, JOHN C VICE PRESIDENT/INVESTMENT EXECUTIVE
KOCUREK, DAVID C VICE PRESIDENT/INVESTMENT EXECUTIVE
KRATKIEWICZ, RICHARD L VICE PRESIDENT/INVESTMENT EXECUTIVE
LAMBERT, CARL SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
LANE, LYN A VICE PRESIDENT/OPTIONS/SENIOR ROP
LANGDON, BERT VICE PRESIDENT/INVESTMENT EXECUTIVE
LANGERMAN, MARK J VICE PRESIDENT/INVESTMENT EXECUTIVE
LAPIER, DAVID G FIRST VICE PRESIDENT/INVESTMENT EXECUTIVE
LARKIN, JAMES J FIRST VICE PRESIDENT/BRANCH MANAGER
LAROS, THOMAS G SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
LAWRENSON, LEO J FIRST VICE PRESIDENT/INVESTMENT BANKER
LENHART, GARY L SENIOR VICE PRESIDENT/MANAGER
LINDGREN, KENNETH K SENIOR VICE PRESIDENT/MANAGER/UNDRWRTNG
LOGAN JR, JACKSON D SENIOR VICE PRESIDENT/MANAGER
LOPEZ, CELIA O VICE PRESIDENT/TRADER
LOWERY, JOHN F VICE PRESIDENT/MANAGER GENERAL SERVICES
LOY, CLAUDE E SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
LUSKIE, GARY W VICE PRESIDENT/TRADER
LYNCH JR, LESLIE O EXECUTIVE VICE PRESIDENT/FIXED INCOME BANKING
MACHAK, GARY P FIRST VICE PRESIDENT/INVESTMENT BANKER
MANNES, JOSEPH R FIRST VICE PRESIDENT/INVESTMENT BANKER
MAREK, JOHN J SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
MARSHALL, JOSEPH A SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
<PAGE>
MARTIN, TRUMAN F VICE PRESIDENT/INVESTMENT EXECUTIVE
MASSAD, WADE I SENIOR VICE PRESIDENT/MANAGER
MATHIS, J STANLEY VICE PRESIDENT/INVESTMENT EXECUTIVE
MATRONE, VINCENT A SENIOR VICE PRESIDENT/MANAGING DIRECTOR
MATTHEWS III, HENRY P VICE PRESIDENT/TRADER
MATTHEWS, JOHN WILLIAM SENIOR VICE PRESIDENT/TRADER
MAUCK, LEONARD VAUGHN VICE PRESIDENT/INVESTMENT EXECUTIVE
MAYRISCH, LENARD VICE PRESIDENT/INVESTMENT EXECUTIVE
MCARTHUR, DOUGLAS E VICE PRESIDENT/BRANCH MANAGER
MCDERMOTT, ROBERT L SENIOR VICE PRESIDENT OPERATIONS/ADMIN
MCDONALD, JOHN A VICE PRESIDENT/INVESTMENT EXECUTIVE
MCDONALD, STEPHEN H VICE PRESIDENT/INVESTMENT BANKER
MCDONNELL JR, PAUL C FIRST VICE PRESIDENT/MANAGER
MCGOWAN, SPENCER D VICE PRESIDENT/INVESTMENT EXECUTIVE
MCKENZIE, KEITH S SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
MIDDLETON, RICHARD J FIRST VICE PRESIDENT/INVESTMENT EXECUTIVE
MILLER, ANN I VICE PRESIDENT/INVESTMENT EXECUTIVE
MILLER, DONALD FIRST VICE PRESIDENT/INVESTMENT EXECUTIVE
MONDAY, C BARRETT SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
MONTGOMERY, ERNEST E VICE PRESIDENT/INVESTMENT EXECUTIVE
MORGAN JR, CECIL A VICE PRESIDENT/INVESTMENT EXECUTIVE
MULLER, MARK S SENIOR VICE PRESIDENT/CO-MANAGER
MURPHY, BRIAN M VICE PRESIDENT/INVESTMENT EXECUTIVE
MURPHY, ROBERT D SENIOR VICE PRESIDENT/MANAGING DIRECTOR
MURRAY, FRANCIS J SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
MYERS, MICHAEL C VICE PRESIDENT/TRADER
MYERS, WALTER F FIRST VICE PRESIDENT/INVESTMENT EXECUTIVE
NEAL III, J TREY VICE PRESIDENT/UNDERWRITER
NEFF III, JOHN E SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
NEUHAUS JR, JOSEPH R SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
NEUHAUS, EDWARD K VICE PRESIDENT/ASSISTANT BRANCH MANAGER
NEWNHAM, MORRIS L SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
NICKEL, GARY L SENIOR VICE PRESIDENT/BRANCH MANAGER
NIETO, J GREG VICE PRESIDENT/INVESTMENT BANKER
NODILO, PATSY LEE VICE PRESIDENT/INVESTMENT EXECUTIVE
NOLAN, THOMAS B SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
NYE, JOAN P VICE PRESIDENT/TRADER
O'CONNOR, PATRICIA VICE PRESIDENT/TRADER
O'KEEFE, MICHAEL D VICE PRESIDENT/INVESTMENT EXECUTIVE
OAKLEY, JAMES T SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
OCKWOOD, JEFFREY A SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
OELZE, RICHARD ROGER VICE PRESIDENT/INVESTMENT EXECUTIVE
OLSHEVSKI, GEORGE VICE PRESIDENT/INVESTMENT EXECUTIVE
OUGH, KENNETH D SENIOR VICE PRESIDENT/INVESTMENT BANKER
PASCHALL, JOHN R VICE PRESIDENT/INVESTMENT BANKER
PERNELL, HARRY C FIRST VICE PRESIDENT/INVESTMENT BANKER
PHILLIPS III, JAMES H SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
PIERCE JR, CHARLES C SENIOR VICE PRESIDENT/CORP. SYNDICATE
PIPER, WILLIAM F SENIOR VICE PRESIDENT/MANAGER
PITTMAN, J KENNETH FIRST VICE PRESIDENT/TRADER
PLANT, PHILLIP M SENIOR VICE PRESIDENT/BRANCH MANAGER
PLANTENBERG, RANDAL VICE PRESIDENT/INVESTMENT EXECUTIVE
POLHEMUS, KENNETH R SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
POLLOK JR, LEWIS W SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
<PAGE>
POSEY, ANNE W VICE PRESIDENT/COMMODITIES
POST, LAUREN VICE PRESIDENT/INVESTMENT BANKER
POWERS, KEVIN F VICE PRESIDENT/INVESTMENT BANKER
PRESENT, ROBERT J VICE PRESIDENT/INVESTMENT EXECUTIVE
RATHMANN, R CRAIG SENIOR VICE PRESIDENT/INVESTMENT BANKER
RAUSCHER III, JOHN H SENIOR VICE PRESIDENT/TRADER
RAZZANO, JOSEPH VICE PRESIDENT/TRADER
REANEY, CHRISTIAN VICE PRESIDENT/INVESTMENT EXECUTIVE
REED, LINDA PAULETTE VICE PRESIDENT/INVESTMENT EXECUTIVE
REFSNES, JOSEPH L VICE CHAIRMAN BOARD
REICHELT JR, RICHARD R SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
RIGGSBY, LEWIS D VICE PRESIDENT/INVESTMENT EXECUTIVE
RINALDI, BARNEY F VICE PRESIDENT/CO-MANAGER
RITT, JAMES T FIRST VICE PRESIDENT/DIRECTOR LEGAL COMPLIANCE
ROARK, MURRAY B VICE PRESIDENT/BRANCH MANAGER
ROBERTS, JERRY B FIRST VICE PRESIDENT/INVESTMENT EXECUTIVE
ROBERTSON, JEFFREY W VICE PRESIDENT/ANALYST
ROE, ROBERT E SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
ROMER, CHRISTOPHER W VICE PRESIDENT/INVESTMENT BANKER
ROSNER, CLIFFORD I FIRST VICE PRESIDENT/INVESTMENT EXECUTIVE
ROSSI, JAMES S SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
RUSSO, GARY VICE PRESIDENT/TRADER
RUTHERFORD, WILLIAM A VICE PRESIDENT/INVESTMENT BANKER
SANFORD JR, WILLIAM P FIRST VICE PRESIDENT/INVESTMENT EXECUTIVE
SCHAEFER, RICHARD A FIRST VICE PRESIDENT/INVESTMENT EXECUTIVE
SCHEFFLER, LEON A VICE PRESIDENT/INVESTMENT EXECUTIVE
SCHIANO, DOMINICK V VICE PRESIDENT/TRADER
SCHLUETER, SHIRLEY J VICE PRESIDENT/MANAGER
SCHMIDT, JOHN A FIRST VICE PRESIDENT/INVESTMENT EXECUTIVE
SCHOENBAUM, DAVID E VICE PRESIDENT/INVESTMENT BANKER
SCHRAMM, ROBERT E ASSISTANT VICE PRESIDENT/MANAGER
SCHULTE, CLARISSA B VICE PRESIDENT/DEPARTMENT ADMINISTRATOR
SCHWENKE, KENNETH F SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
SEELEY, PETER C VICE PRESIDENT/INVESTMENT EXECUTIVE
SHAW, JAMES A VICE PRESIDENT/INVESTMENT BANKER
SHELDON, JOHN L VICE PRESIDENT/INVESTMENT BANKER
SHEPHERD, FRANK A FIRST VICE PRESIDENT/INVESTMENT EXECUTIVE
SIMS, ROBERT L VICE PRESIDENT/INVESTMENT EXECUTIVE
SINNOTT, JAMES N VICE PRESIDENT/FLOOR BROKER
SLOAN, FRANK O SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
SMITH, BROOK M SENIOR VICE PRESIDENT/INVESTMENT BANKER
SMITH, DAVID ALBERT CEO/PRESIDENT/CHAIRMAN
SMITH, GEOFFREY B VICE PRESIDENT/MANAGER
SMITH, ROBERT C SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
SMITH, SUSAN L VICE PRESIDENT/INVESTMENT EXECUTIVE
SMITH, TRUMAN M SENIOR VICE PRESIDENT/BRANCH MANAGER
SNIDER JR, JOHN R VICE PRESIDENT/INVESTMENT BANKER
SOODHALTER, CHARLES R FIRST VICE PRESIDENT/INVESTMENT EXECUTIVE
SPAETH, TRACY M VICE PRESIDENT/INVESTMENT EXECUTIVE
SPARKS, JOSEPH C SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
SPECHT JR, JOHN E VICE PRESIDENT/INFO TEC DIRECTOR
STANGL, ROBERTA A VICE PRESIDENT/INVESTMENT EXECUTIVE
STIEFELING, ERIC H VICE PRESIDENT/INVESTMENT EXECUTIVE
STRINGER, JOE ROBERT VICE PRESIDENT/INVESTMENT EXECUTIVE
<PAGE>
STUART, CARL W FIRST VICE PRESIDENT/INVESTMENT EXECUTIVE
SUTTON, RANDALL C SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
TARRILLION, JOHN E FIRST VICE PRESIDENT/INVESTMENT EXECUTIVE
TERPINSKI, CASPER MERLE FIRST VICE PRESIDENT/INVESTMENT EXECUTIVE
THOMAS, JACK ALAN VICE PRESIDENT/BRANCH MANAGER
THOMPSON, MARTY SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
TILLEY JR, JOSEPH A SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
TOWNSEND JR, PEYTON L VICE PRESIDENT/INVESTMENT EXECUTIVE
TOWNSEND, WILLIAM S SENIOR VICE PRESIDENT/MANAGER
TRAVERS, JERRY LEE VICE PRESIDENT/INVESTMENT EXECUTIVE
TRAWEEK, DARRYL W VICE PRESIDENT/BRANCH MANAGER
TREADWAY, OLEN G VICE PRESIDENT/INVESTMENT BANKER
TUBB, JOHN HENRY VICE PRESIDENT/INVESTMENT EXECUTIVE
VANOSKY, ROBERT A EXECUTIVE VICE PRESIDENT/FIXED INC BANKING
VIA JR, WILBURN ANDREW VICE PRESIDENT/CREDIT AND MARGIN
WALLACE, GENE A SENIOR VICE PRESIDENT/MANAGER
WALTON, AILEEN L VICE PRESIDENT/INVESTMENT EXECUTIVE
WEINBERG, J RUSSELL VICE PRESIDENT/ANALYST
WEINSTEIN, SHELLEY B SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
WERNER, STUART C SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
WETTERSCHNEIDER, LARRY K SENIOR VICE PRESIDENT/BRANCH MANAGER
WHEELER, KATHRYN S VICE PRESIDENT/INVESTMENT EXECUTIVE
WHITE, JONATHAN D VICE PRESIDENT/INVESTMENT BANKER
WHITLEY JR, FRANK J SENIOR VICE PRESIDENT/BRANCH MANAGER
WHITTAKER, DAVID R FIRST VICE PRESIDENT/INVESTMENT EXECUTIVE
WICKLUND, JAMES K FIRST VICE PRESIDENT/ANALYST
WILEY, DORY A VICE PRESIDENT/ANALYST
WILHITE, DAN N EXECUTIVE VICE PRESIDENT/RETAIL ADMIN.
WILKINSON, DONNA M VICE PRESIDENT/DEPARTMENT MANAGER
WILLIARD, JOHN E SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
WILSON JR, LAWRENCE H SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
WOODALL, ROBERT L VICE PRESIDENT/INVESTMENT EXECUTIVE
WYETT, STEVE SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
YATES, RADFORD MICHAEL SENIOR VICE PRESIDENT/INVESTMENT EXECUTIVE
ZACHARY, MITCHELL LOGAN VICE PRESIDENT/INVESTMENT EXECUTIVE
Rauscher Pierce Refsnes, Inc 1995 Officers
<PAGE>
CODE OF ETHICS
FOR
IFG ASSET MANAGEMENT SERVICES, INC.
AND AFFILIATES
I. PURPOSE AND CONSTRUCTION
This Code of Ethics (the "Code") is adopted by IFG Asset Management
Services, Inc. ("AMS"), Dain Bosworth Incorporated ("DBI"), Rauscher Pierce
Refsnes ("RPR"), and the Funds in an effort to prevent violations of Section
17 of the Investment Company Act of 1940, as amended (the "1940 Act"), and the
rules and regulations thereunder. The focus of the Code is the prevention of
investment activities by persons with access to certain information that might
be harmful to the interests of the Funds or that might enable such persons to
illicitly profit from their relationship with the Funds.
II. DEFINITIONS
(a) "Access Person" means any director, officer or Advisory Person of
AMS or a Fund or, with respect to DBI or RPR, any director or officer who in
the ordinary course of his or her business makes, participates in or obtains
information regarding the purchase or sale of securities for a Fund or whose
functions or duties as part of the ordinary course of his or her business
relate to the making of any recommendation to a Fund regarding the purchase or
sale of securities.
(b) "Advisory Person" means:
(1) any employee of AMS or a Fund (or of any company in a
control relationship to AMS or a Fund) who, in connection with his or
her regular functions or duties, makes, participates in or obtains
information regarding the purchase or sale of a security by a Fund, or
whose functions or duties relate to the making of any recommendations
with respect to such purchases or sales (including, but not limited to,
Portfolio Managers and all AMS employees who provide information and
advice to Portfolio Managers or who help execute the Portfolio Managers'
decisions, such as securities analysts and traders); or
(2) any natural person in a control relationship to AMS or a
Fund and who obtains information concerning recommendations made to a
Fund with regard to the purchase or sale of a security.
(c) "Affiliated Person" of another person means:
(1) any person directly or indirectly owning, controlling or
holding with power to vote five percent (5%) or more of the outstanding
voting securities of such other person;
<PAGE>
(2) any person five percent (5%) or more of whose outstanding
voting securities are directly or indirectly owned, controlled or held
with power to vote by such other person;
(3) any person directly or indirectly controlling, controlled by
or under common control with such other person;
(4) any officer, director, partner, co-partner or employee of
such other person;
(5) if such other person is an investment company, any
investment adviser thereof or any member of an advisory board thereof;
and
(6) if such other person is an unincorporated investment company
not having a board of directors, the depositor thereof.
(d) "Beneficial Ownership" for purposes of the Code, shall be
determined in accordance with the definition of "beneficial owner" set forth
in Rule 16a-1(a)(2) under the Securities Exchange Act of 1934, i.e., a person
must have a "direct or indirect pecuniary interest" to have "beneficial
ownership." Although the following list is not meant to be exhaustive, under
the rule a person would generally be regarded to be the beneficial owner of
the following securities:
(1) securities held in the person's own name;
(2) securities held with another in joint tenancy, community
property or other joint ownership;
(3) securities held be a bank or broker as nominee or custodian
on such person's behalf or pledged as collateral for a loan;
(4) securities held by members of the person's immediate family
sharing the same household;
(5) securities held by a relative not residing in the person's
home if the person is a custodian, guardian or otherwise has controlling
influence over the purchase, sale or voting of such securities;
(6) securities held by a trust in which the person is a
beneficiary and has or shares the power to make purchase or sale
decisions;
(7) securities held by a trust for which the person serves as a
trustee and in which the person has a pecuniary interest (including
pecuniary interests by virtue of performance fees and by virtue of
holdings by the person's immediate family);
(8) securities held by a general partnership or limited
partnership in which the person is a general partner;
<PAGE>
(9) securities owned by a corporation in which the person has a
control position or in which the person has or shares investment control
over the portfolio securities (other than a registered investment
company);
(10) securities in a portfolio giving the person certain
performance-related fees; and
(11) securities held by another person or entity pursuant to any
agreement, understanding, relationship or other arrangement giving the
person any direct or indirect pecuniary interest.
(e) "Control" shall have the same meaning as that set forth in Section
2(a)(9) of the 1940 Act.
(f) "Disinterested Director" means directors or trustees of a Fund who
are not "interested persons," as defined in the 1940 Act, of the Fund or who
are "interested persons" of the Fund solely by virtue of being an Affiliated
Person of a broker-dealer other than DBI or RPR.
(g) "Fund" means any investment company registered under the 1940 Act
for which AMS acts as the investment adviser or sub-adviser.
(h) "Member of immediate family" of a person includes such person's
spouse, children under the age of twenty-five (25) years residing with such
person, and any trust or estate in which such person or any other member of
his or her immediate family has a substantial beneficial interest, unless
neither such person nor any other member of his or her immediate family is
able to control or participate in the investment decisions of such trust or
estate.
(i) "Personal Securities Transaction" means a transaction in a
Security in which an individual has or thereby acquires Beneficial Ownership.
A person shall be considered to be "engaging in" or "effecting" a Personal
Securities Transaction if such a Security is involved, regardless of whether
the transaction is effected by that person or by some other person (such as an
immediate family member).
(j) "Portfolio Manager" means an AMS employee entrusted with the
direct responsibility and authority to make investment decisions affecting a
Fund.
(k) "Purchase or sale of a Security" includes, among other things, the
writing of an option to purchase or sell a Security.
(l) "Security" shall have the meaning set forth in Section 2(a)(36) of
the 1940 Act, except that it shall not include securities issued by the
government of the United States, bankers' acceptances, bank certificates of
deposit, commercial paper and shares of registered open-end investment
companies that are not managed by AMS, by an adviser affiliated with AMS or by
an advisory representative (as defined in Rule 204-2(A)(12)(A) of the
<PAGE>
Investment Advisers Act of 1940) of AMS or an affiliate of AMS that
participates in the management of the investment company's portfolio of
securities.
(m) "Security held or to be acquired" by a registered investment
company means any Security which, within the most recent fifteen (15) days,
(i) is or has been held by such company, or (ii) is being or has been
considered by such company or its investment adviser for purchase by such
company.
(n) "1940 Act" means the Investment Company Act of 1940, 15 U.S.C.
- -- 80a-1 to 80a-52, as amended.
III. RESTRICTIONS
(a) Nondisclosure of Information. An Access Person shall not divulge
to any person contemplated or completed securities transactions of a Fund,
except in the performance of his or her duties, unless such information
previously has become a matter of public knowledge.
(b) Section 17(d) Limitations. Neither DBI, RPR, an Affiliated Person
of a Fund or any Affiliated Person of DBI or RPR or such Affiliated Person of
a Fund, acting as principal, shall effect any transaction in which a Fund, or
a company controlled by a Fund, is a joint or a joint and several participant
with such person, DBI or RPR or Affiliated Person, in contravention of such
rules and regulations as the Securities and Exchange Commission may prescribe
under Section 17(d) of the 1940 Act for the purpose of limiting or preventing
participation by a Fund or controlled companies on a basis different from or
less advantageous than that of such other participant.
(c) Proscribed Activities under Rule 17j-1(a). Rule 17j-1(a) under
the 1940 Act provides:
It shall be unlawful for any affiliated person of or principal
underwriter for a registered investment company, or any affiliated
person of an investment adviser of or principal underwriter for a
registered investment company in connection with the purchase or sale,
directly or indirectly, by such person of a security held or to be
acquired, as defined in this section, by such registered investment
company--
(1) To employ any device, scheme or artifice to defraud
such registered investment company;
(2) To make to such registered investment company any
untrue statement of a material fact or omit to state to such
registered investment company a material fact necessary in order
to make the statements made, in light of the circumstances under
which they were made, not misleading;
(3) To engage in any act, practice or course of business
which operates or would operate as a fraud or deceit upon any such
registered investment company; or
<PAGE>
(4) To engage in any manipulative practice with respect to
such registered investment company.
Any violation of Rule 17j-1(a) shall be deemed to be a violation of the
Code.
(d) Covenant to Exercise Best Judgment. An Advisory Person shall act
on his or her best judgment in effecting, or failing to effect, any
transaction by a Fund, and such Advisory Person shall not take into
consideration his or her personal financial situation in connection with
decisions regarding portfolio transactions by a Fund.
(e) General Principles of Personal Investing. No Access Person shall
engage in any Personal Securities Transaction that such Access Person has
reason to know will be detrimental to the best interest of any Fund. When
engaging in a Personal Securities Transaction, an Access Person shall:
(1) place the interests of the Funds first;
(2) conduct such transaction in a manner consistent with the
Code and in such a manner as to avoid any actual or potential conflict
of interest or abuse of any such person's position of trust and
responsibility as an Access Person; and
(3) not take inappropriate advantage of such person's position
in relationship to the Funds.
(f) Limitation on Personal Securities Transactions.
(1) Limitations Related to Timing of Transactions. The timing
of Personal Securities Transactions shall be limited as follows:
(A) No Access Person shall engage in a Personal Securities
Transaction on a day during which a Fund has a pending "buy" or
"sell" order for the same Security until that order is executed or
withdrawn. For purposes of this paragraph (A), Access Person
shall not include any Disinterested Director unless such
Disinterested Director has actual knowledge that a Fund has a
pending "buy" or "sell" order for the same Security.
(B) No Portfolio Manager shall engage in a Personal
Securities Transaction within a seven (7) day period before or
after a Fund that he or she manages trades in the same Security.
(C) Advisory Persons shall not profit from the purchase
and sale, or sale and purchase, of the same (or equivalent)
Securities within sixty calendar days. For purposes of this
paragraph (C), "Securities" shall not be deemed to include any
securities which may not be purchased by any Fund because of
investment limitations set forth in the Funds' Registration
<PAGE>
Statements filed with the Securities and Exchange Commission. The
Director of Compliance may grant an exception to this provision in
cases of personal hardship or other appropriate circumstances.
(2) Initial Public Offering Limitations. Advisory Persons shall
not engage in any Personal Securities Transaction that involves the
purchase of Securities in an initial public offering.
(3) Private Placement Limitations. Investments in privately
placed Securities shall be limited as follows:
(A) Advisory Persons shall not engage in any Personal
Securities Transaction that involves a private placement of
Securities without the express prior approval of the Director of
Compliance. In reviewing any such approval request, the Director
of Compliance shall consider, among other factors, whether the
investment opportunity should be reserved for a Fund and its
shareholders, and whether the opportunity is being offered to the
requesting individual by virtue of his or her position with the
Funds and AMS.
(B) Advisory Persons who have a Beneficial Ownership
interest in any Securities obtained through a private placement
shall disclose such interest to the Director of Compliance if and
when they should become involved in any subsequent consideration
of an investment in the same issuer for any of the Funds. In such
case, the decision to invest in the Securities of such an issuer
on behalf of a Fund shall be subject to the review and approval of
an individual categorized as an Advisory Person who has no
personal interest in such issuer, which individual shall be
appointed by the Director of Compliance.
(4) Reports. The Director of Compliance shall maintain and make
available written records of all actions taken under this Section
III(f)(1) in the manner required by Rule 17j-1(d) under the 1940 Act.
(g) Prior Clearance of Personal Securities Transactions. Prior to
effecting a Personal Securities Transaction, an Access Person (other than a
Disinterested Director) shall notify the Director of Compliance of the
proposed transaction, including the amount of the transaction and the Security
involved. The Director of Compliance, after investigation, shall determine
whether such transaction is consistent with the Code and shall promptly
communicate such determination to the Access Person making the request.
Transaction clearances must be obtained no more than two days prior to making
a purchase or sale of a Security. If the trade is not made within two days of
the date of clearance, a new clearance must be obtained. Absent extraordinary
circumstances, no Access Person shall be deemed to have violated the Code for
effecting a Personal Securities Transaction if such Access Person has been
advised by the Director of Compliance that the transaction would be consistent
with the Code. The Director of Compliance shall maintain and make available
written records of all actions taken under this Section III(g) in the manner
required by Rule 17j-1(d) under the 1940 Act.
<PAGE>
(h) Copies of Brokerage Reports. When an Access Person (other than a
Disinterested Director) engages in a Personal Securities Transaction effected
through a broker other than DBI or RPR, the Access Person shall direct that
the executing broker send a duplicate copy of the confirmation to the Director
of Compliance at the same time as it is provided to such Access Person. Such
Access Person shall also direct such broker to provide duplicate copies of any
periodic statements on any account maintained by such person (or any other
account in which such Access Person has a Beneficial Ownership interest) to
the Director of Compliance.
IV. REPORTING REQUIREMENTS
(a) Initial and Annual Reports by Advisory Persons. All Advisory
Persons shall submit to the Director of Compliance a report of all Securities
owned by them (or in which they otherwise have a Beneficial Ownership
interest) at the time that they commence employment with AMS and shall also
submit such a report to the Director of Compliance at the end of each calendar
year thereafter.
(b) Quarterly Report. No later than ten (10) days after the end of
each calendar quarter, each Access Person shall submit a report to the
Director of Compliance who shall specify the following information with
respect to transactions during the then ended calendar quarter in any Security
in which such Access Person has, or by reason of such transaction acquired,
any direct or indirect Beneficial Ownership:
(1) the date of the transaction, the title and the number of
shares, and the principal amount of each Security involved;
(2) the nature of the transaction (i.e., purchase, sale or any
other type of acquisition or disposition);
(3) the price at which the transaction was effected; and
(4) the name of the broker, dealer or bank with or through whom
the transaction was effected.
If no transactions have occurred during the period, the report shall so
indicate. Any report required to be made pursuant to this Section IV(b) may
contain a statement that the report shall not be construed as an admission by
the person making the report that he or she has any direct or indirect
Beneficial Ownership in the Security to which the report relates.
(c) Limitations on Reporting Requirements. Notwithstanding the
provisions of Section IV(b), no Access Person shall be required to make a
report:
(1) with respect to transactions effected for any account over
which such person does not have any direct or indirect influence or
control;
(2) if such a person is a Disinterested Director, except where
such Disinterested Director knew or, in the ordinary course of
fulfilling his or her official duties as a Disinterested Director,
<PAGE>
should have known that during the 15-day period immediately preceding or
after the date of the transactions in a Security by the Disinterested
Director, such Security is or was purchased or sold by a Fund or such
purchase or sale by a Fund is or was considered by a Fund or AMS; or
(3) where a report made to AMS would duplicate information
recorded pursuant to Rules 204-2(a)(12) or 204-2(a)(13) under the
Investment Advisers Act of 1940.
(d) Duty to Report Violations. Any person subject to the Code who
discovers a violation or apparent violation of the Code by any other person
shall bring the matter to the attention of the Director of Compliance.
(e) Filing of Reports. All reports prepared pursuant to this Article
IV shall be filed with the Director of Compliance, except that reports
prepared by the Director of Compliance shall be filed with the Chief Executive
Officer of AMS.
(f) Annual Report to the Board. AMS shall prepare an annual report to
the Funds' Board(s) of Directors containing the following:
(1) a summary of existing procedures concerning personal
investing and any changes in the procedures made during the past year;
(2) a list of any violations requiring significant remedial
action during the past year, including details of such violations and
the action taken; and
(3) any recommended changes in existing restrictions or
procedures based upon experience under the Code, evolving industry
practices or developments in applicable laws or regulations.
(g) Certification of Compliance. All Access Persons must certify
annually in writing to the Director of Compliance that (1) they have read and
understand the Code and recognize that they are subject to the Code, (2) they
have complied with the requirements of the Code, and (3) they have disclosed
or reported all Personal Securities Transactions required to be disclosed or
reported pursuant to the Code. The Director of Compliance shall maintain and
make available copies of such written certifications in the manner required by
Rule 17j-1(d) under the 1940 Act.
V. ENFORCEMENT AND SANCTIONS
(a) General. The Director of Compliance shall bring all violations or
apparent violations of the Code to the attention of the Chief Executive
Officer of AMS and, if such violation involves a director, officer or employee
of DBI or RPR, the Chief Executive Officer of DBI or RPR (as applicable). The
Chief Executive Officer of AMS, DBI or RPR (as applicable) shall have the
primary responsibility for enforcing the Code and determining appropriate
sanctions with respect to such company's directors, officers and employees.
If the alleged violator is the Chief Executive Officer of AMS, DBI or RPR, the
Director of Compliance shall bring such alleged violation to the attention of
<PAGE>
the applicable company's Board of Directors, who shall have the primary
responsibility for enforcing the Code and determining appropriate sanctions
with respect to such alleged violation. If the alleged violator is a
Disinterested Director or is otherwise not an director, officer or employee of
AMS, DBI or RPR, the Board of Directors of the affected Fund or Funds shall
have the primary responsibility for enforcing the Code and determining
appropriate sanctions. In addition to the sanctions prescribed by Section
V(b), any person who is found to have violated the Code may be permanently
dismissed, reduced in salary or position, temporarily suspended from
employment or sanctioned in such other manner as may be determined in the
discretion of the applicable person or persons responsible for enforcing the
Code. In determining appropriate sanctions to be imposed for violations of
the Code, the person or persons charged with enforcing the Code may consider
any factors they deem relevant, including, without limitation:
(1) the degree of willfulness' of the violation;
(2) the severity of the violation;
(3) the extent, if any, to which the violator profited or
benefited from the violation;
(4) the adverse effect, if any, of the violation on the involved
Fund;
(5) the market value and liquidity of the class of Securities
involved in the violation;
(6) the prior violations of the Code, if any, by the violator;
(7) the circumstances of discovery of the violation; and
(8) if the violation involved the purchase or sale of Securities
in violation of the Code, (A) the price at which the purchase or sale
was made, and (B) the violator's justification for making the purchase
or sale, including the violator's tax situation, the extent of the
appreciation or depreciation of the Securities involved, and the period
the Securities have been held.
(b) Violations of Section III(f). In addition to any sanction imposed
under Section V(a) of the Code, any profits realized on Personal Securities
Transactions effected in violation of Section III(f) of the Code must be
disgorged and contributed to the appropriate Fund. Each Personal Securities
Transaction will be considered individually, and there will be no netting of
profits and losses incurred in the case of multiple Personal Securities
Transactions effected in violation of the Code. In the event of a violation
involving more than one Fund, profits shall be allocated among the affected
Funds in proportion to the relative net asset values of the Funds as of the
date of the violation. Should the violation not involve any of the Funds,
profits shall be paid to a charitable organization chosen in the discretion of
the Disinterested Directors of the Funds.
<PAGE>
(c) Rights of Alleged Violator. A person charged with a violation of
the Code shall have the opportunity to appear before the person or persons as
may have authority to impose sanctions pursuant to the Code, at which time
such person shall have the opportunity, orally or in writing, to respond to
any and all charges.
(d) Notification to Fund General Counsel. The applicable Funds'
General Counsel shall be advised promptly of the initiation and outcome of any
enforcement actions hereunder.
(e) Non-Exclusivity of Sanctions. The imposition of sanctions under
this Section V shall not preclude the imposition of additional sanctions by
the Board(s) of Directors of the Funds and shall not be deemed a waiver of any
rights by any Fund.
VI. GIFTS AND DIRECTORSHIPS
(a) Gifts. Advisory Persons shall not accept any gift or other thing
of more than de minimis value from any securities broker, dealer, underwriter
or placement agent that does business with or on behalf of any Fund.
(b) Service as a Director. Advisory Persons may not serve as
directors of publicly traded companies without the prior written authorization
of the Director of Compliance. The Director of Compliance shall not provide
such authorization unless he or she finds that such board service would be
consistent with the interests of the Funds and their shareholders. Should any
person receive such authorization, any investments by the Funds in the
securities of any such publicly traded company while such person is serving as
a director will be required to be approved in advance, in writing, by the
Director of Compliance.
VII. MISCELLANEOUS PROVISIONS
(a) Identification of Access Persons, Advisory Persons and Portfolio
Managers. AMS shall, on behalf of the Funds, DBI and RPR, identify all Access
Persons who are under a duty to make reports under Article IV and shall inform
such persons of such duty. AMS shall likewise identify all individuals who
are classified as Advisory Persons and Portfolio Managers hereunder and inform
such persons of such classifications.
(b) Maintenance of Records. AMS shall, on behalf of the Funds and DBI
and RPR, maintain and make available records as required by Rule 17j-1(d).
<PAGE>
Report Pursuant to Article IV
of the Code of Ethics for
IFG Asset Management Services, Inc. and Affiliates
Instructions:
(1) Not later than ten (10) days after the end of each calendar
quarter, each Access Person shall submit this Report, as provided by the Code
of Ethics (the "Code"). The Code should be reviewed before completing the
Report; terms defined in the Code have the same meanings in this Report.
(2) No Report need be filed under the circumstances set forth in
Section IV(c) of the Code.
(3) If no reportable transactions have occurred during the period, put
an "X" in the following box (, and you may skip to the signature line.
(4) This Report may contain a statement that it shall not be construed
as an admission by the person making the Report that he has any direct or
indirect Beneficial Ownership in the Security to which the Report relates.
(5) If you must file this Report and transactions have occurred during
the period, set forth the following information with respect to transactions
during the most recently ended calendar quarter in any Security in which you
have, or by reason of such transaction acquired, any direct or indirect
beneficial ownership in the Security:
Broker,
Date and Nature Price Dealer or
Title and of Transaction Transaction Bank Through
Name of Number of (i.e., purchase, was Whom Transfer
Issuer Shares or Units sale or other) Effected Effected
(If you need additional space, please attach additional pages.)
(7) Questions regarding the completion of this Report may be directed
to Matthew L. Thompson at (612) 371-7262 or to Michael J. Radmer at (612) 340-
2724.
The answers to the foregoing are true and correct to the best of my
information and belief.
Dated:_____________________ _________________________________
Signature of Person Filing Report
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Great Hall
Investment Funds, Inc.'s July 31, 1995 Annual Report and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 1
<NAME> PRIME MONEY MARKET FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-END> JUL-31-1995
<INVESTMENTS-AT-COST> 1,594,412
<INVESTMENTS-AT-VALUE> 1,594,412
<RECEIVABLES> 5,576
<ASSETS-OTHER> 43
<OTHER-ITEMS-ASSETS> 181
<TOTAL-ASSETS> 1,600,212
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,287
<TOTAL-LIABILITIES> 1,287
<SENIOR-EQUITY> 15,989
<PAID-IN-CAPITAL-COMMON> 1,582,936
<SHARES-COMMON-STOCK> 1,598,925
<SHARES-COMMON-PRIOR> 1,029,775
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,598,925
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 70,632
<OTHER-INCOME> 0
<EXPENSES-NET> (9,557)
<NET-INVESTMENT-INCOME> 61,075
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 61,075
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (61,075)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 913,133
<NUMBER-OF-SHARES-REDEEMED> (405,058)
<SHARES-REINVESTED> 61,075
<NET-CHANGE-IN-ASSETS> 569,150
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (6,501)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (9,557)
<AVERAGE-NET-ASSETS> 1,239,352
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (0.05)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.77
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Great Hall
Investments Funds, Inc.'s July 31, 1995 Annual Report and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 2
<NAME> U.S. GOV'T MONEY MARKET FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-END> JUL-31-1995
<INVESTMENTS-AT-COST> 121,800
<INVESTMENTS-AT-VALUE> 121,800
<RECEIVABLES> 489
<ASSETS-OTHER> 23
<OTHER-ITEMS-ASSETS> 72
<TOTAL-ASSETS> 122,384
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 135
<TOTAL-LIABILITIES> 135
<SENIOR-EQUITY> 1,222
<PAID-IN-CAPITAL-COMMON> 121,027
<SHARES-COMMON-STOCK> 122,249
<SHARES-COMMON-PRIOR> 56,815
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 122,249
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 4,726
<OTHER-INCOME> 0
<EXPENSES-NET> (610)
<NET-INVESTMENT-INCOME> 4,116
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 4,116
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (4,116)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 209,370
<NUMBER-OF-SHARES-REDEEMED> (148,052)
<SHARES-REINVESTED> 4,116
<NET-CHANGE-IN-ASSETS> 65,434
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (415)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (610)
<AVERAGE-NET-ASSETS> 83,406
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (0.05)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.73
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Great Hall
Investment Funds, Inc.'s July 31, 1995 Annual Report and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 3
<NAME> TAX-FREE MONEY MARKET FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-END> JUL-31-1995
<INVESTMENTS-AT-COST> 358,680
<INVESTMENTS-AT-VALUE> 358,680
<RECEIVABLES> 9,020
<ASSETS-OTHER> 26
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 367,726
<PAYABLE-FOR-SECURITIES> 2,785
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,668
<TOTAL-LIABILITIES> 4,453
<SENIOR-EQUITY> 3,629
<PAID-IN-CAPITAL-COMMON> 359,265
<SHARES-COMMON-STOCK> 362,894
<SHARES-COMMON-PRIOR> 275,278
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 379
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 363,273
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 11,371
<OTHER-INCOME> 0
<EXPENSES-NET> (1,826)
<NET-INVESTMENT-INCOME> 9,545
<REALIZED-GAINS-CURRENT> 379
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 9,924
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (9,545)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 361,117
<NUMBER-OF-SHARES-REDEEMED> (283,046)
<SHARES-REINVESTED> 9,545
<NET-CHANGE-IN-ASSETS> 87,616
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (1,522)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (1,826)
<AVERAGE-NET-ASSETS> 304,372
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.03
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (0.03)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.60
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Great Hall
Investment Funds, Inc.'s July 31, 1995 Annual Report and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 4
<NAME> NATIONAL TAX-EXEMPT FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-END> JUL-31-1995
<INVESTMENTS-AT-COST> 65,651
<INVESTMENTS-AT-VALUE> 65,883
<RECEIVABLES> 1,139
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 58
<TOTAL-ASSETS> 67,080
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 723
<TOTAL-LIABILITIES> 723
<SENIOR-EQUITY> 65
<PAID-IN-CAPITAL-COMMON> 65,493
<SHARES-COMMON-STOCK> 6,522
<SHARES-COMMON-PRIOR> 7,100
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 568
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 231
<NET-ASSETS> 66,357
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 4,958
<OTHER-INCOME> 0
<EXPENSES-NET> (541)
<NET-INVESTMENT-INCOME> 4,417
<REALIZED-GAINS-CURRENT> 868
<APPREC-INCREASE-CURRENT> (592)
<NET-CHANGE-FROM-OPS> 4,693
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (4,417)
<DISTRIBUTIONS-OF-GAINS> (309)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 354
<NUMBER-OF-SHARES-REDEEMED> (1,183)
<SHARES-REINVESTED> 251
<NET-CHANGE-IN-ASSETS> (5,815)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 9
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (342)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (619)
<AVERAGE-NET-ASSETS> 68,439
<PER-SHARE-NAV-BEGIN> 10.17
<PER-SHARE-NII> 0.648
<PER-SHARE-GAIN-APPREC> 0.045
<PER-SHARE-DIVIDEND> (0.648)
<PER-SHARE-DISTRIBUTIONS> (0.045)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.17
<EXPENSE-RATIO> 0.79
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Great Hall
Investment Funds, Inc.'s July 31, 1995 Annual Report and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 5
<NAME> MINNESOTA INSURED TAX-EXEMPT FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-END> JUL-31-1995
<INVESTMENTS-AT-COST> 28,124
<INVESTMENTS-AT-VALUE> 28,068
<RECEIVABLES> 621
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 31
<TOTAL-ASSETS> 28,720
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 85
<TOTAL-LIABILITIES> 85
<SENIOR-EQUITY> 29
<PAID-IN-CAPITAL-COMMON> 29,279
<SHARES-COMMON-STOCK> 2,890
<SHARES-COMMON-PRIOR> 3,766
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (616)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (57)
<NET-ASSETS> 28,635
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,820
<OTHER-INCOME> 0
<EXPENSES-NET> (249)
<NET-INVESTMENT-INCOME> 1,571
<REALIZED-GAINS-CURRENT> (616)
<APPREC-INCREASE-CURRENT> 728
<NET-CHANGE-FROM-OPS> 1,683
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,571)
<DISTRIBUTIONS-OF-GAINS> (293)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 65
<NUMBER-OF-SHARES-REDEEMED> (1,061)
<SHARES-REINVESTED> 120
<NET-CHANGE-IN-ASSETS> (8,473)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 293
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (154)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (356)
<AVERAGE-NET-ASSETS> 30,714
<PER-SHARE-NAV-BEGIN> 9.85
<PER-SHARE-NII> 0.494
<PER-SHARE-GAIN-APPREC> 0.157
<PER-SHARE-DIVIDEND> (0.494)
<PER-SHARE-DISTRIBUTIONS> (0.097)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.91
<EXPENSE-RATIO> 0.81
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
