As filed with the Securities and Exchange Commission on September 29, 1998
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /x/
(File No. 33-41395)
Pre-Effective Amendment No. __ //
Post-Effective Amendment No. 12 /x/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /x/
(File No. 811-6340)
Amendment No. 13 /x/
(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 LLP Lindquist & Vennum PLLP
90 South Seventh Street 80 South Eighth Street
Suite 2200 Suite 4200
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
/x/ On October 1, 1998 pursuant to paragraph (b) of Rule 485
// 60 days after filing pursuant to paragraph (a)(1) of Rule 485
// ON [date] pursuant to paragraph (a)(1) of Rule 485
// 75 days after filing pursuant to paragraph (a)(2) of Rule 485
// on [date] pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
// This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Approximate date of proposed public offering: As soon as practicable
following the effective date of this registration statement.
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 25, 1998.
<PAGE>
GREAT HALL INVESTMENT FUNDS, INC.
Post-Effective Amendment No. 12 to the
Registration Statement on Form N-1A
Explanatory Note to Registration Statement
Great Hall Investment Funds, Inc. (the "Registrant") currently is
authorized to issue its shares in five series, as follows:
Series A -- Great Hall Prime Money Market Fund ("Prime Fund");
Series B -- Great Hall U.S. Government Money Market Fund
("Government Fund");
Series C -- Great Hall Tax-Free Money Market Fund ("Tax-Free Fund");
Series F -- Great Hall Institutional Prime Money Market Fund
("Institutional Prime Fund"); and
Series G -- Great Hall Institutional Tax-Free Money Market Fund
("Institutional Tax-Free Fund").
Part A consists of two prospectuses -- one prospectus for Prime Fund,
Government Fund and Tax-Free Fund, and a separate prospectus for Institutional
Prime Fund and Institutional Tax-Free Fund. This Post-Effective Amendment
effects the registration of Institutional Tax-Free Fund and its shares (Series
G) and updates the financial statements of Institutional Prime Fund and does
not effect any amendment to the Prospectus of Prime Fund, Government Fund and
Tax-Free Fund; therefore, such prospectus is not included herewith, and only
the prospectus of Institutional Prime Fund and Institutional Tax-Free Fund is
included in this Post-Effective Amendment.
Likewise, Part B consists of two Statements of Additional Information
("SAIs") -- one SAI for Prime Fund, Government Fund and Tax-Free Fund, and a
separate SAI for Institutional Prime Fund and Institutional Tax-Free Fund.
This Post-Effective Amendment does not effect any amendment to the SAI of Prime
Fund, Government Fund and Tax-Free Fund; therefore, such SAI is not included
herewith, and only the SAI of the Institutional Prime Fund and Institutional
Tax-Free Fund is included in this Post-Effective Amendment.
<PAGE>
GREAT HALL INVESTMENT FUNDS, INC.
Post-Effective Amendment No. 12 to the
Registration Statement on Form N-1A
PART A
Prospectuses
<PAGE>
GREAT HALL INVESTMENT FUNDS, INC.
Post-Effective Amendment No. 12 to the
Registration Statement on Form N-1A
PART A
Prospectus of Great Hall Institutional Prime Money Market Fund and
Great Hall Institutional Tax-Free Money Market Fund
(each a series of Great Hall Investment Funds, Inc.)
<PAGE>
GREAT HALL
INSTITUTIONAL PRIME MONEY MARKET FUND
----------------------------------------------
INSTITUTIONAL TAX-FREE MONEY MARKET FUND [LOGO]
----------------------------------------------
60 South Sixth Street
Minneapolis, Minnesota 55402
(800) 934-6674
Great Hall Institutional Prime Money Market Fund ("Prime Fund") and Great
Hall Institutional Tax-Free Money Market Fund ("Tax-Free Fund") (together, the
"Funds") are diversified series of Great Hall Investment Funds, Inc. ("Great
Hall"), an open-end management investment company 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 investments in 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. 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.
AS WITH ALL MUTUAL FUNDS, 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 October 1, 1998 (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 number listed above.
Prospectus dated October 1, 1998
<PAGE>
The "Great Hall" name is a trademark of Dain Rauscher Corporation ("DRC").
DRC licenses this trademark in connection with a number of investment products
and services (including the Great Hall Investment Funds, Inc.) sponsored or
distributed by 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.
Tax-Free
Annual Fund Operating Expenses Prime Fund Fund
(as a percentage of average net assets): ---------- --------
Management Fees............................ 0.25% 0.25%
12b-1 Fees................................. none none
Other Expenses*............................ 0.15% 0.15%
---- ----
Total Fund Operating Expenses*............. 0.40% 0.40%
==== ====
_____________________________________
* Insight Investment Management, Inc. ("Insight") voluntarily reimbursed
certain of Prime Fund's operating expenses during its initial fiscal period of
operations ended July 31, 1998 and has voluntarily agreed to reimburse certain
of Tax-Free Fund's operating during its initial fiscal period of operations
ending July 31, 1999. Insight may institute additional voluntary expense
reimbursements and may discontinue or modify any of its voluntary reimbursement
policies at any time in its discretion. Absent such voluntary reimbursements,
Prime Fund would have borne Other Expenses and Total Fund Operating Expenses of
0.17% and 0.42%, respectively, during the fiscal period ended July 31, 1998,
and Insight estimates that Tax-Free Fund's Other Expenses and Total Fund
Operating Expenses will be approximately 0.30% and 0.55%, respectively, during
the fiscal period ending July 31, 1999.
<PAGE>
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.
Tax-Free
Prime Fund Fund
---------- --------
One Year................................... $ 4 $ 4
Three Years................................ 13 13
Five Years................................. 21 n/a
Ten Years.................................. 49 n/a
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.
FINANCIAL HIGHLIGHTS
The following table shows certain per share data for a share of capital
stock of Prime Fund outstanding during the indicated period and selected
information for such period for the 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.
Period from
August 11, 1997
(inception) through
July 31, 1998
-------------
Net asset value, beginning of period..................... $1.00
----
Income from investment operations........................ 0.05
Distributions to shareholders from investment income..... (0.05)
----
Net asset value, end of period........................... $1.00
====
Total return............................................. 5.2%
Net assets at end of period (000s omitted)............... $213,785
Ratio of expenses to average daily net assets*........... 0.39%**
Ratio of net investment income
to average daily net assets*........................... 5.27%**
_____________________________________
* Various fund fees and expenses were voluntarily waived or absorbed by
Insight during the period 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 0.42% and 5.24%, respectively, for the period ended July 31,
1998.
** Adjusted to an annual basis.
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives of each Fund (set forth on the cover page) along
with the investment policies identified as "fundamental" may not be changed
without the affirmative vote of the majority of the applicable Fund's
outstanding voting shares (as defined in the 1940 Act). 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.
The Funds are designed for investors with substantial 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.
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.
Rule 2a-7 Standards
Each Fund is managed in accordance with Rule 2a-7 under the 1940 Act
("Rule 2a-7"), which imposes strict portfolio quality, maturity and
diversification standards on money market funds. Great Hall's Board of
Directors has adopted guidelines designed to ensure compliance with Rule 2a-7
by each Fund, and the Board oversees Insight's day-to-day determinations that
each Fund is in compliance with Rule 2a-7. In certain respects, as described
below, the Funds are managed in accordance with standards that are more strict
than those required by Rule 2a-7.
Quality Standards. Each Fund must invest exclusively in U.S. dollar-
denominated investments that present minimal credit risk and are within Rule
2a-7's definition of "Eligible Securities." Eligible Securities include, among
others, securities that are rated by two Nationally Recognized Statistical
Rating Organizations ("NRSROs") (or if only one NRSRO has rated such security,
then by that one NRSRO) in one of the two highest short-term rating categories
(such as A-1 or A-2 by Standard & Poors Corporation ("S&P") and/or Prime-1 or
Prime-2 by Moody's Investors Service, Inc. ("Moody's")), or unrated securities
that are deemed to be of comparable quality. Prime Fund invests exclusively in
securities with two NRSRO ratings, and Tax-Free Fund's investments must have at
least one NRSRO rating. The Funds currently do not invest in unrated
securities.
Maturity Standards. Each investment by a Fund must mature (or be deemed
by Rule 2a-7 to mature) within 397 days of the time of investment. In
addition, each Fund must maintain a dollar-weighted average portfolio maturity
of 90 days or less.
<PAGE>
Diversification Standards. Immediately after the purchase of any
investment by a Fund (other than a U.S. Government security or a security that
is subject to a "guarantee"), the Fund may not have invested more than 5% of
its total assets in securities issued by such issuer, except for certain
temporary investments. Securities subject to guarantees are not subject to
this test. However, immediately after a Fund acquires a security subject to a
guarantee, then with respect to 75% of the Fund's total assets, not more than
10% of the Fund's total assets may be invested in securities either issued or
guaranteed by such guarantor.
In addition, Rule 2a-7 imposes strict limits on Prime Fund's investments
in "Second Tier Securities," generally requiring that at least 95% of each such
Fund's investments must be in "First Tier Securities." The Funds currently
invest exclusively in First Tier Securities. "First Tier Securities" are
defined generally as Eligible Securities rated by two NRSROs (or if only one
NRSRO has rated such security, then by that one NRSRO) in the highest short-
term rating categories (such as A-1 by S&P and/or Prime-1 by Moody's), or
unrated securities that are deemed to be of comparable quality. Second Tier
Securities are defined as Eligible Securities that do not qualify as First Tier
Securities.
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.
<PAGE>
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
branches and subsidiaries, such as certificates of deposit, bankers'
acceptances, time deposits and deposit notes. Obligations of 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.
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.
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. In addition, the Tax-Free Fund may purchase other types
of tax-exempt municipal obligations, such as commercial paper and certain
variable or floating rate demand securities, including participation interests
therein, that are Eligible Securities.
<PAGE>
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
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 both 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 securities at a mutually agreed upon time and price. Risks associated with
investments in repurchase agreements are described in the Statement of
Additional Information.
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 (as defined below) 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 a
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
<PAGE>
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). A change in the credit quality of these institutions,
therefore, could cause losses to the Fund and affect its share price. Such
obligations will not be purchased unless accompanied by an opinion of seller's
counsel, 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.
Section 4(2) Commercial Paper. Each Fund may invest without limitation in
commercial paper issued pursuant to Section 4(2) of the Securities Act of 1933
provided that Insight has determined such paper to be liquid in accordance with
guidelines established by Great Hall's Board of Directors. For additional
information, see "Investment Policies-Illiquid Investments: Liquidity
Guidelines" in the Statement of Additional Information.
Fundamental Policies and Restrictions (applicable to both Funds). Each
Fund is subject to certain investment restrictions that are designated as
"fundamental," which means that they may not be changed without the affirmative
vote of a majority of the Fund's outstanding voting securities. These
fundamental restrictions, as well as non-fundamental restrictions (which may be
changed by Great Hall's Board of Directors without a vote of shareholders) are
set forth in detail in the Statement of Additional Information. The
fundamental restrictions include a restriction that 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 municipal obligations, and (b) with respect to both funds, this
restriction does not apply to securities issued or guaranteed by United States
banks or United States branches of foreign banks that are subject to the same
regulation as United States banks.
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 may also bear certain
promotional expenses, including a
<PAGE>
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.
Insight is a wholly owned subsidiary of DRC.
Under each Fund's Advisory Agreement, Insight is entitled to receive a
monthly advisory fee equal to 0.25% per annum of the 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, shareholder and fund
accounting services fees and expenses, 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.
HOW TO INVEST
You may purchase shares of each Fund through the Funds' distributor, Dain
Rauscher Incorporated (the "Distributor"), at the net asset value next
determined following receipt of an order in federal funds. The Distributor is
a wholly-owned subsidiary of DRC.
The Funds are sold without a sales charge. A minimum investment of $1
million is required. This minimum is waived for investment advisory clients of
Insight.
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 Distributor 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.
HOW TO REDEEM SHARES
You may redeem shares for cash through the Distributor 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."
<PAGE>
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 New York Stock
Exchange Inc. (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, Martin Luther King, Jr. Day,
President's Day, 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. However, there is no
assurance that any Fund will be able to maintain a stable net asset value of
$1.00 per share. 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 Distributor
or the applicable Fund and excludes shares redeemed on the day of the dividend
declaration.
<PAGE>
TAXES
Each Fund intends to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"),
during each taxable year. 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
All dividends other than capital gain dividends that will be paid to
shareholders will be taxable as ordinary income, even if reinvested in
additional shares. In the case of corporate shareholders, no dividends paid by
the Fund will qualify for the dividends received deduction for corporations.
Capital gain dividends will be taxable as capital gain, even if reinvested in
additional shares.
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.
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. Capital
gain 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 additional shares.
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 AMT.
<PAGE>
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 at the
address set forth on the cover of this Prospectus.
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 Fund's yield,
if any, that is not tax-exempt.
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
<PAGE>
investment, over a specified period 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. 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. Currently, Great Hall offers its shares in five separate series. Ten
billion shares have been designated for each of the Prime 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 ACCOUNTING SERVICES AGENTS
Norwest Bank Minnesota, N.A., 733 Marquette Avenue, Minneapolis, Minnesota
55479-0040, serves as the custodian of the Funds. PFPC Inc., 400 Bellevue
Parkway, Wilmington, Delaware 19809, serves as the transfer agent of the Funds.
Investors Fiduciary Trust Company, 127 West 10th Street, Kansas City, Missouri
64105-1716, serves as the fund accounting agent of the Funds. Pursuant to a
Shareholder Account Services Agreement, the Distributor also performs certain
shareholder accounting services for the Funds.
YEAR 2000 INFORMATION
Many existing computer systems, including some used by Insight and the
Distributor, as well as the Funds' custodian, transfer agent and fund
accounting agent in connection with their respective services to the Funds,
have been written in such a way that, without modification, may not properly
process and calculate date-related information and data from and after January
1, 2000. Great Hall has been advised that Insight, the Distributor and the
Funds' custodian, transfer agent and fund accounting agent are in the process
of making required modifications of their programs and systems and that they
believe that they will complete such modifications on a timely basis and will
be able to properly process such information and data after that date. The
costs of these modifications will not directly affect the Funds. However,
failure by any of such service providers to successfully complete the required
modifications in a timely manner could have a material adverse impact on the
Funds and their shareholders.
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 1998.
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
<PAGE>
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...........................................4
Certain Investment Strategies and Restrictions...............................7
Investment Management........................................................8
How To Invest................................................................9
How To Redeem Shares.........................................................9
Net Asset Value.............................................................10
Distributions...............................................................10
Taxes.......................................................................11
Shareholder Services........................................................12
Performance.................................................................12
Description of the Funds....................................................13
Custodian and Accounting Services Agents....................................14
Year 2000 Information.......................................................14
Tax Exempt vs. Taxable Income...............................................14
<PAGE>
GREAT HALL INVESTMENT FUNDS, INC.
Post-Effective Amendment No. 12 to the
Registration Statement on Form N-1A
PART B
Statements of Additional Information
<PAGE>
GREAT HALL INVESTMENT FUNDS, INC.
Post-Effective Amendment No. 12 to the
Registration Statement on Form N-1A
PART B
STATEMENT OF ADDITIONAL INFORMATION
OF
GREAT HALL INSTITUTIONAL PRIME MONEY MARKET FUND
AND
GREAT HALL INSTITUTIONAL TAX-FREE MONEY MARKET FUND
(each a series of Great Hall Investment Funds, Inc.)
<PAGE>
GREAT HALL
INSTITUTIONAL PRIME MONEY MARKET FUND
----------------------------------------------
INSTITUTIONAL TAX-FREE MONEY MARKET FUND
----------------------------------------------
60 South Sixth Street
Minneapolis, Minnesota 55402
(800) 934-6674
-----------------------------------
STATEMENT OF ADDITIONAL INFORMATION
dated October 1, 1998
-----------------------------------
Great Hall Institutional Prime Money Market Fund ("Prime Fund") and Great
Hall Institutional Tax-Free Money Market Fund ("Tax-Free Fund") (together, the
"Funds") are diversified series of Great Hall Investment Funds, Inc. ("Great
Hall"), an open-end management investment company 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 October 1, 1998,
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. This Statement of Additional Information incorporates by reference
the audited financial statements of Prime Fund for the year ended July 31, 1998
and the related schedule of Investments in Securities contained in Great Hall's
Annual Report to Shareholders for the year ended July 31, 1998 (a copy of which
accompanies this Statement of Additional Information).
TABLE OF CONTENTS
-----------------
Page
----
Investment Policies...................................... B-2
Investment Restrictions.................................. B-8
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-13
Directors and Officers................................... B-14
General Information...................................... B-16
Counsel and Auditors..................................... B-17
Financial and Other Information.......................... B-17
Appendix--Ratings of Investments......................... A-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 October 1, 1998, and, if given or made,
such information or representations may not be relied upon as having been
authorized by Great Hall or the Distributor (as defined herein). 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 any 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.
Both Funds
Government Securities. Each Fund may invest without limitation in
obligations of the United States Government or agencies or instrumentalities of
the United States Government ("Government Obligations"). Government Obligations
are backed in a variety of ways by the U.S. Government or its agencies or
instrumentalities. Some Government Obligations, such as U.S. Treasury bills,
notes and bonds and securities issued by the Government National Mortgage
Association ("GNMA"), are backed by the full faith and credit of the United
States Treasury. Others, such as those of the Federal Home Loan Banks, are
backed by the right of the issuer to borrow from the U.S. Treasury. Still
other Government Obligations, such as those issued by the Federal National
Mortgage Association ("FNMA"), the Federal Home Loan Mortgage Corporation
("FHLMC") and the Student Loan Marketing Association, are backed only by the
credit of the agency or instrumentality issuing the obligations and, in certain
instances, by the discretionary authority of the U.S. Government to purchase
certain obligations of the agency or instrumentality. In none of these cases,
however, does the United States Government guarantee the value or yield of the
Government Obligations themselves or the net asset value of any Fund's shares.
Repurchase Agreements. Each Fund may enter into repurchase agreements
with respect to any of the securities in which the Fund may invest directly.
A repurchase agreement is an agreement under which a Fund will purchase a
security subject to resale to a bank or dealer at an agreed-upon price and
date. The transaction requires the collateralization of the seller's
obligation by the transfer to the Fund's custodian of eligible securities with
an initial market value, including accrued interest, equal to at least the
dollar amount invested by the Fund in each agreement, and with the value of the
underlying securities marked to market daily to maintain at least 100%
collateralization of the repurchase price (including accrued interest).A
default by the seller might cause the Fund to experience a loss or delay in the
liquidation of the collateral securing the repurchase obligation and might also
cause the Fund to incur disposition costs in liquidating the collateral.
However, each Fund intends to enter into repurchase agreements only with
primary dealers that report to the Federal Reserve Bank of New York or with the
100 largest U.S. commercial banks (as measured by domestic deposits).
Additionally, each Fund intends to follow the collateral custody, protection
and perfection guidelines recommended by the Comptroller of the Currency for
the use of national banks in their direct repurchase agreement activities. As
a non-fundamental policy, no Fund will invest more than 10% of its net assets
in repurchase agreements maturing in more than seven days and other illiquid
investments.
Illiquid Investments; Liquidity Guidelines. 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 Investment
Management, Inc., each Fund's investment adviser ("Insight"), pursuant to
liquidity 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 or to foreign purchasers pursuant to Regulation S 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
believes that a similar market exists for commercial paper issued pursuant to
the private placement exemption of Section 4(2) of the 1933 Act. Each Fund may
invest without limitation in these forms of restricted securities if such
securities are deemed by Insight to be liquid in accordance with liquidity
guidelines established by Great Hall's 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).
Investing in restricted securities could have the effect of increasing the
level of each Fund's illiquidity to the extent that qualified purchasers of the
securities become, for a time, uninterested in purchasing these securities.
<PAGE>
Great Hall Institutional 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); 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.
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 Institutional 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.
The 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
<PAGE>
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 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
<PAGE>
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.
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
<PAGE>
that, in the opinion of Insight, 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.
"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 Fund 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,
<PAGE>
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
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
Fundamental Investment Restrictions. In addition to the Funds' investment
objectives and those policies identified as fundamental in the Prospectus, each
of the Funds has adopted the following fundamental investment restrictions,
which may not be changed without approval of shareholders owning a majority of
such Fund's outstanding shares, which as used in the Prospectus and this
Statement of Additional Information means the lesser of: (a) 67% or more of
such Fund's 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 of the Funds may:
(1) borrow money or issue senior securities (as defined the Investment
Company Act of 1940, as amended), 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) underwrite securities issued by other persons, except insofar as a
Fund may be deemed an underwriter under the Securities Act of 1933, as amended,
in selling portfolio securities;
(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 United
States 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) purchase or sell real estate or real estate mortgage loans
(although a Fund 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; or
(5) 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.
If the issuer of a security is within a given industry and the security is
guaranteed by an entity within a different industry, the industry of the
guarantor rather than that of the issuer shall be deemed to be the industry for
purposes of applying the test in investment restriction number 3 above.
Non-Fundamental Investment Restrictions. In addition, each Fund has
adopted certain non-fundamental investment restrictions, which may be changed
by the Board of Directors of Great Hall without approval by such Fund's
shareholders. As non-fundamental policies, neither Fund may:
(1) invest in companies for the purpose of exercising control or
management;
(2) invest in securities issued by other investment companies in excess
of limits imposed by applicable law;
(3) invest more than 10% of its net assets in illiquid investments,
including but not limited to repurchase agreements maturing in more than seven
days;
(4) pledge, mortgage or hypothecate its assets, except that to secure
permitted borrowings; or
(5) sell securities short or purchase any securities on margin, except
for such short-term credits as are necessary for clearance of portfolio
transactions.
Percentage Restrictions. If a fundamental or a non-fundamental 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.
<PAGE>
TAXES
Taxation of the Funds-In General
Each Fund intends to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). 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");
and (b) satisfy certain diversification requirements at the close of each
quarter of such Fund's taxable year. Furthermore, in order to be entitled to
pay exempt-interest 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 tax-exempt obligation 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.
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 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 purchase 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 Institutional 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.
<PAGE>
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 the shareholder 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 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'
<PAGE>
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. Prime Fund did not pay any
brokerage commission during the period ended July 31, 1998. 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 wholly-
owned subsidiary of Dain Rauscher Corporation ("DRC").
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 Distributor 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 Distributor under its
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 upon the average value of each Fund's daily net assets. Each Fund pays
Insight a fee at an annual rate of .25% of its average daily net assets.
During the period ended July 31, 1998, Prime Fund paid advisory fees of
$237,858.
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 Distributor
The Funds are distributed by Dain Rauscher Incorporated, a member firm of
the New York Stock Exchange (the "NYSE"), the National Association of
Securities Dealers, Inc. and a wholly owned subsidiary of DRC (the
"Distributor"). The Funds have agreed to indemnify the Distributor and its
affiliates, to the extent permitted by applicable law, against certain
liabilities under the Securities Act of 1933.
DETERMINATION OF NET ASSET VALUE
<PAGE>
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 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.
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
Institutional 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, 1998, the net asset value
and the maximum public offering price per share for Prime Fund were calculated
as follows:
Net Assets ($213,785,210)
----------------------------------- = Net Asset Value Per Share ($1.00)
Shares Outstanding ($213,785,210)
CALCULATION OF PERFORMANCE DATA
Yield
As stated in the Prospectus, each Fund from time to time may advertise its
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.
<PAGE>
For the seven-day period ended July 31, 1998, the current yield of Prime
Fund was 5.25%.
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, 1998, the effective yield of Prime
Fund was 5.39%.
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 Tax-Free Fund's yield, if any, that is not
tax-exempt.
<PAGE>
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.
<PAGE>
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
Name and Address Position Past Five Years and Other Affiliations
- ---------------- -------- --------------------------------------
T. Geron ("Jerry") Bell Director President of the Minnesota Twins
34 Puckett Place Baseball Club
Minneapolis, MN 55415 Incorporated since 1987.
Sandra J. Hale Director President of Enterprise Management,
2308 West Lake of the Int'l. since 1991; Minnesota
Isles Pkwy. Commissioner of Administration from
Minneapolis, MN 55405 1982 to 1990.
Ron James Director Formerly President and Chief Executive
300 Sycamore Lane Officer of Ceridian Corporation-Human
Plymouth, MN 55441 Resources Group (January 1996-January
1998); Vice-President - Minnesota of
U.S. West Communications from 1990 to
December 1995; Vice President and
General Manager-Large Business Markets
of U.S. West Communications from 1987
to 1990.
Jay H. Wein Director Independent consultant since April
5305 Elm Ridge Circle 1995; Director of Information
Excelsior, MN 55331 Advantage, Inc. since 1992 and
Chairman from 1992 to April 1995;
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 Executive Senior Executive Vice President of the
Officer Distributor; Chief Executive Officer
and Director of Insight; 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.
Raye C. Kanzenbach Chief Investment Managing Director and Chief Investment
Officer Officer of Insight; prior to 1991,
Director, Senior Vice President and
Secretary of Insight Bond Management,
Inc. since 1983.
Julie K. Getchell Chief Financial President and Chief Operating Officer
Officer of Insight and Senior Vice President
of the Distributor.
<PAGE>
Principal Occupations During the
Name and Address Position Past Five Years and Other Affiliations
- ---------------- -------- --------------------------------------
Matthew L. Thompson Secretary Partner of Faegre & Benson LLP, Great
2200 Norwest Center Hall's general counsel, since May
90 South Seventh Street 1995; Vice President, Assistant
Minneapolis, MN 55402 Secretary and Corporate/Fund Counsel
of DRC from January 1994 to May 1995;
prior thereto, Partner of Dorsey &
Whitney since 1993 and Associate of
Dorsey & Whitney from 1985 through
1992.
Thomas D. Vogel Compliance Vice President and Controller of
Office Insight and the Distributor's Business
Services Group; Assistant Controller
of Insight from 1993 to 1995.
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, 1998:
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 $10,000 None
Sandra J. Hale $10,000 None
Ron James $10,000 None
Jay H. Wein $10,000 None
Additional directors of Insight are as follows:
Name Other Positions
- ----------------------- -------------------------------------
Irving Weiser Chairman, Chief Executive Officer and
President of the Distributor
John C. Appel Vice Chairman and Chief Financial
Officer of the Distributor
Ronald A. Tschetter Senior Executive Vice President of
the Distributor (Private Client Group)
Nelson D. Civello Senior Executive Vice President of
the Distributor (Fixed Income Capital
Markets Group)
Kenneth J. Wessels Senior Executive Vice President of the
Distributor (Dain Rauscher Wessels)
<PAGE>
GENERAL INFORMATION
Under the terms of the Custodian Agreement, Norwest Bank Minnesota, N.A.
(the "Custodian") holds and safekeeps all of the assets of each Fund. 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 an Investment Account Agreement, Investors Fiduciary
Trust Company (the "Fund Accounting Agent") performs necessary investment
accounting and recordkeeping services for the Fund. For its services, the Fund
Accounting Agent is paid a monthly fee and is reimbursed for certain out-of-
pocket expenses.
Under the terms of the Transfer Agency Agreement, PFPC Inc. (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 flat monthly fee and is also reimbursed
for certain out-of-pocket expenses.
The Distributor also performs certain shareholder account services for the
Funds pursuant to a Shareholder Account Service Agreement. Under the terms of
the Shareholder Account Service Agreement, the Distributor disburses or credits
all proceeds of redemptions, dividends and other distributions to shareholders,
handles certain communications between shareholders and each Fund, prepares
shareholder records, maintains a master account with the Transfer Agent on
behalf of shareholders and performs other related services. For its services,
the Distributor receives a monthly fee computed on the basis of the number of
shareholder accounts that are maintained for each Fund during the month and
also is 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 Prime Fund's shares as of July 31,
1998. As of the date of this Statement of Additional Information, the sole
shareholder of Tax-Free Fund was Insight.
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 15 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 90 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
15 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
<PAGE>
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 Exchange 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 Funds'
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 LLP, 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, 1999.
FINANCIAL AND OTHER INFORMATION
The Prospectus and this Statement of Additional Information do not contain
all the information included in Great Hall's Registration Statement filed with
the SEC under the 1933 Act and the 1940 Act (the "Registration Statement") with
respect to the securities offered by the Prospectus and this Statement of
Additional Information. Certain portions of the Registration Statement have
been omitted from the Prospectus and this Statement of Additional Information
pursuant to the rules and regulations of the SEC. The Registration Statement
including the exhibits thereto may be examined at the office of the SEC in
Washington, D.C.
The audited financial statements of Prime Fund for the year ended July 31,
1998 and the related schedule of Investments in Securities contained in Great
Hall's Annual Report to Shareholders for the year ended July 31, 1998 (a copy
of which accompanies this Statement of Additional Information) are hereby
incorporated by reference into this Statement of Additional Information.
Statements contained in the Prospectus or in this Statement of Additional
Information as to any contract or other document referred to are not
necessarily complete, and, in each instance, reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement of which the Prospectus and this Statement of Additional Information
form a part, each such statement being qualified in all respects by such
reference.
<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:
bullet Leading market positions in well established industries.
bullet High rates of return on funds employed.
bullet Conservative capitalization structures with moderate reliance
on debt and ample asset protection.
bullet Broad margins in earnings coverage of fixed financial charges and
high internal cash generation.
bullet 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.
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.
<PAGE>
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.
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.
<PAGE>
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.
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.
Post-Effective Amendment No. 12 to the
Registration Statement on Form N-1A
PART C
OTHER INFORMATION
<PAGE>
PART C
OTHER INFORMATION
Item 24 -- Financial Statements and Exhibits
- --------------------------------------------
(a) Audited financial statements for each of Series A, Series B,
Series C and Series F of Great Hall Investment Funds, Inc. are included as
part of such series' Statement of Additional Information.
(b) Exhibits:
1 Articles of Incorporation 1
2 Bylaws
3 Not applicable
4 Not applicable
5 Investment Advisory Agreement
6 Distributor Agreement
7 Not applicable
8 Custodian Contract (1)
9.1 Transfer Agency and Service Agreement (2)
9.2 Shareholder Account Services Agreement
9.3 Investment Accounting Agreement (3)
10 Opinion and Consent of Faegre & Benson LLP
11 Consent of KPMG Peat Marwick L.L.P.
12 Not applicable
13 Letter of Investment Intent (1)
14 Not applicable
15 Not applicable
16 Schedules Supporting Computations of Performance Data (1)
17 Powers of Attorney (1)
18 Officers/Directors of Dain Rauscher Incorporated
19 Code of Ethics (1)
(1) Incorporated by reference to the like numbered exhibit to Post-Effective
Amendment No. 7 to the Registration Statement filed on or about November 29,
1995.
(2) Incorporated by reference to the like numbered exhibit to Post-Effective
Amendment No. 8 to the Registration Statement filed on or about December 1,
1996.
(3) Incorporated by reference to the like numbered exhibit to Post-Effective
Amendment No. 9 to the Registration Statement filed on or about August 1,
1997.
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
<PAGE>
"Management and Distribution Agreements" and "Directors and Officers" in the
accompanying Statements of Additional Information (Part B of this Registration
Statement).
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, 1998:
Title of Class Number of Shareholders
-------------- ----------------------
Series A Common Shares,
par value $.01 per share 395,203
Series B Common Shares,
par value $.01 per share 9,443
Series C Common Shares,
par value $.01 per share 9,451
Series F Common Shares,
par value $.01 per share 104
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
Registrant has been advised that in the opinion of the Securities and
<PAGE>
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 Rauscher Incorporated ("DRC") serves as the
principal underwriter of the Registrant's shares of common stock. As of the
date of this filing, DRC does not serve as a principal underwriter to any
other registered investment companies.
(b) The names, principal business addresses, positions and offices of
directors and officers of DRC are set forth in Exhibit 18.
(c) Not applicable.
Item 30 -- Location of Accounts and Records
- -------------------------------------------
The custodian of the Registrant is Norwest Bank Minnesota, N.A.,
90 South Seventh Street, Minneapolis, Minnesota 55402. The dividend
disbursing agent and transfer agent of the Registrant is PFPC Inc.,
400 Bellevue Parkway, Wilmington, Delaware 19809. The fund accounting agent
of the Registrant is Investors Fiduciary Trust Company, 127 West 10th Street,
Kansas City, Missouri 64105-1716. Other records will be maintained by the
Registrant at its principal offices, which are located at 60 South Sixth
Street, Minneapolis, Minnesota 55402.
Item 31 -- Management Services
- ------------------------------
Not applicable.
Item 32 -- Undertakings
- -----------------------
Not applicable.
<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 September, 1998.
GREAT HALL INVESTMENT FUNDS, INC.
By /s/ 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
- -------------- ----- ----
/s/ J. Scott Spiker Chief Executive Officer
J. Scott Spiker (Principal Executive Officer) September 29, 1998
/s/ Julie K. Getchell Chief Financial Officer
Julie K. Getchell (Principal Financial and September 29, 1998
Accounting Officer)
T. Geron Bell* Director
Sandra J. Hale* Director
Ron James* Director
Jay H. Wein* Director
*By /s/ Julie K. Getchell
Julie K. Getchell,
Attorney-in-Fact September 29, 1998
(Pursuant to Powers of Attorney dated August 17, 1994, filed as Exhibit 17 to
Post-Effective Amendment No. 7 to the Registration Statement on November 29,
1995.)
<PAGE>
EXHIBIT INDEX
Exhibit Description Page
------- ----------- ----
1 Articles of Incorporation (1)
2 Bylaws *
3 Not applicable
4 Not applicable
5 Investment Advisory Agreement *
6 Distributor Agreement *
7 Not applicable
8 Custodian Contract (1)
9.1 Transfer Agency and Service Agreement (2)
9.2 Shareholder Account Services Agreement *
9.3 Investment Accounting Agreement (3)
10 Opinion and Consent of Faegre & Benson LLP *
11 Consent of KPMG Peak Marwick L.L.P. *
12 Not applicable
13 Letter of Investment Intent (1)
14 Not applicable
15 Not applicable
16 Schedules Supporting
Computations of Performance Data (1)
17 Powers of Attorney (1)
18 Officers/Directors of Dain Rauscher Incorporated *
19 Code of Ethics (1)
_____________________________________________________________________________
(1) Incorporated by reference to the like numbered exhibit to Post-Effective
Amendment No. 7 to the Registration Statement filed on or about November 29,
1995.
(2) Incorporated by reference to the like numbered exhibit to Post-Effective
Amendment No. 8 to the Registration Statement filed on or about December 1,
1996.
(3) Incorporated by reference to the like numbered exhibit to Post-Effective
Amendment No. 9 to the Registration Statement filed on or about August 1,
1997.
* To be filed by amendment.
GREAT HALL INVESTMENT FUNDS, INC.
Post-Effective Amendment No. 12 to the
Registration Statement on Form N-1A
EXHIBIT 2
BYLAWS
<PAGE>
BYLAWS
OF
GREAT HALL INVESTMENT FUNDS, INC.
(as amended through August 19, 1998)
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 F Common Shares shall be "Great Hall Institutional
Prime Money Market Fund;" and the name of the series represented by the
corporation's Series G Common Shares shall be "Great Hall Institutional Tax-
Free Money Market 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
<PAGE>
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.
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
Board of Directors fails to fix a record
<PAGE>
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
regular shareholders' meeting, then directors may be elected at a
<PAGE>
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.
(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
<PAGE>
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
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
<PAGE>
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
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.
<PAGE>
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.
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,
<PAGE>
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.
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.
<PAGE>
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.
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
<PAGE>
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.
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.
<PAGE>
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
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
<PAGE>
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;
(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.
<PAGE>
(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 each series 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
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
<PAGE>
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.
<PAGE>
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 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.
- -12-
GREAT HALL INVESTMENT FUNDS, INC.
Post-Effective Amendment No. 12 to the
Registration Statement on Form N-1A
EXHIBIT 5
INVESTMENT ADVISORY AGREEMENT
<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.
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.
<PAGE>
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.
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.
<PAGE>
(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.
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
------------------------------------
Its
-----------------------------------
INSIGHT INVESTMENT MANAGEMENT, INC.
By
------------------------------------
Its
-----------------------------------
<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 May 21, 1997 .25% of average daily net assets
Institutional Prime
Money Market Fund
(Series F)
Great Hall August 19, 1998 .25% of average daily net assets
Institutional Tax-Free
Money Market Fund
(Series G)
GREAT HALL INVESTMENT FUNDS, INC.
Post-Effective Amendment No. 12 to the
Registration Statement on Form N-1A
EXHIBIT 6
DISTRIBUTION AGREEMENT
<PAGE>
DISTRIBUTION AGREEMENT
This Agreement is made and entered into as of this 2nd day of January,
1998 by and between 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 dates
Great Hall adopts this Agreement on their behalf, 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 Rauscher Incorporated, a Delaware
corporation (the "Distributor"), as principal underwriter of the Funds' shares
of common stock. This Agreement supersedes and replaces the Co-Distributor
Agreement dated as of March 17, 1992 by and among Great Hall, Dain Bosworth
Incorporated and Rauscher Pierce Refsnes, Inc.
WITNESSETH:
1. UNDERWRITING SERVICES.
Each Fund hereby engages the Distributor, and the Distributor 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. The 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
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 the Distributor for any
consideration other than cash or for any amount less than the applicable public
offering price of such share, computed as provided in the then 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 expenses, the registration or qualification
of each Fund's shares for sale in such jurisdictions as Great Hall may
designate.
4. INFORMATION TO BE FURNISHED BY GREAT HALL TO THE DISTRIBUTOR.
Great Hall will furnish the Distributor with such information with
respect to the affairs and accounts of each Fund as the Distributor may from
time to time reasonably require, and further agrees that the 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 Distributor or by the Funds' investment adviser. The Distributor 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.
<PAGE>
6. COMPENSATION TO THE DISTRIBUTOR.
It is understood and agreed by the parties hereto that the Distributor
shall receive, in compensation for services performed by the Distributor
hereunder: (a) a sales charge, if any, from certain of the Funds as are 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
the 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 DISTRIBUTOR'S AUTHORITY.
The Distributor shall be deemed to be an independent contractor and,
except as specifically provided or authorized herein, shall have no authority
to act for or represent Great Hall or the Funds. In connection with the
Distributor's role as principal underwriter of the Funds' shares, the
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 a principal.
8. SUBSCRIPTION FOR SHARES - REFUND FOR CANCELED ORDERS.
In the event that an order for the purchase of shares of a Fund is placed
with the Distributor by a customer or dealer and is subsequently canceled, the
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 the Distributor has paid the applicable Fund for such shares, the
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 Distributor.
9. REPORTS TO GREAT HALL DIRECTORS.
The 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.
The Distributor agrees to indemnify Great Hall and the Funds against any
and all litigation and other legal proceeds 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 the Distributor. In the event of the threat
or institution of any such litigation or legal proceedings against Great Hall
or the Funds, the Distributor shall defend such action on behalf of the
applicable Fund(s) at the 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, the Distributor shall not be required to pay or reimburse Great Hall
or the Funds for any liability, judgment, cost or penalty incurred as a result
of
<PAGE>
information supplied by, or as the result of the omission to supply information
by, Great Hall, or to the Distributor by a director, officer, or employee of
Great Hall who is not an interested person of the Distributor, unless the
information so supplied or omitted was available to the 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.
The 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.
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 the 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) 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 the 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 the 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); provided, however, that the Board of
Directors of Great Hall, including 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 the Distributor or of Great Hall, have authorized and approved
the assignment of this Agreement to the surviving firm of the proposed merger
of the Distributor and Interra Clearing Services Inc., an affiliate of the
Distributor, which surviving firm shall be named Dain Rauscher Incorporated.
Said surviving firm shall, immediately upon the completion and effectiveness of
said merger, succeed to the rights and obligations of the Distributor
hereunder.
(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 the 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.
<PAGE>
(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.
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 he 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 Distributor 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. DAIN RAUSCHER INCORPORATED
By /s/ Julie K. Getchell By /s/ J. Scott Spiker
------------------------------- ------------------------------------
Name: Julie K. Getchell Name: J. Scott Spiker
Title: Chief Financial Officer Title: Senior Executive Vice President
<PAGE>
EXHIBIT A
to
DISTRIBUTION AGREEMENT
FUND EFFECTIVE DATE COMPENSATION
- ---- --------------- ------------
Great Hall Prime Money Market January 2, 1998 (1)
Fund (Series A)
Great Hall U.S. Government January 2, 1998 (1)
Money Market Fund (Series B)
Great Hall Tax-Free Money January 2, 1998 (1)
Market Fund (Series C)
Great Hall Institutional Prime Money January 2, 1998 (1)
Market Fund (Series F)
Great Hall Institutional Tax-Free August 19, 1998 (1)
Money Market Fund (Series G)
___________________________________
(1) It is understood and agreed by the parties hereto that, with respect to
each of Series A, Series B, Series C, Series F and Series G of Great Hall,
sales of shares of each of said series by the Distributor will benefit the
investment adviser of each of said series (which investment adviser is an
affiliate of the Distributor), and, therefore, the Distributor shall not
receive any additional compensation for services it performs hereunder with
respect to Series A, Series B, Series C, Series F and Series G.
GREAT HALL INVESTMENT FUNDS, INC.
Post-Effective Amendment No. 12 to the
Registration Statement on Form N-1A
EXHIBIT 9.2
SHAREHOLDER ACCOUNT SERVICES AGREEMENT
<PAGE>
SHAREHOLDER ACCOUNT SERVICES AGREEMENT
This Agreement is made and entered into as of the 2nd day of January,
1998 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 Rauscher Incorporated, a corporation organized and
existing under the laws of the State of Delaware ("DRI"). This Agreement
supersedes and takes the place of the Shareholder Account Services Agreement
dated as of February 14, 1996 between Great Hall and Dain Bosworth Incorporated
and Rauscher Pierces Refsnes, Inc.
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, DRI serves as the principal underwriter of each Fund's shares of
common stock; and
WHEREAS, DRI performs various dividend disbursing and shareholder account
services (as outlined below) for owners of Fund shares who maintain evidence of
their Fund shares with DRI in a master account (a separate master account being
maintained for each Fund) in the name of DRI 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 DRI (the
"Customers"); and
WHEREAS, in consideration for DRI's agreement to perform the
aforementioned services, Great Hall agrees to compensate DRI and to reimburse
certain costs and expenses incurred by DRI 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 DRI hereby agree as follows:
1. Scope of Appointment; Services.
-------------------------------
(a) Subject to the conditions set forth in this Agreement, DRI hereby
undertakes and agrees 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.
<PAGE>
(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 its transfer agent 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 DRI:
(A) that would necessitate that DRI 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) DRI agrees to provide the necessary facilities, equipment and
personnel to perform its duties and obligations hereunder in accordance with
industry practice.
(d) Pending the effectiveness of the proposed merger of DRI and Interra
Clearing Services Inc. ("Clearing"), an affiliate of DRI, Great Hall authorizes
the delegation by DRI of responsibility for performing one or more of the
Services to Clearing. Notwithstanding any provision to the contrary herein,
this Agreement shall survive said merger, and the surviving entity of said
merger (to be named Dain Rauscher Incorporated) shall, immediately upon the
completion and effectiveness of said merger, succeed to all of the rights and
obligations of DRI hereunder.
2. Records; Miscellaneous Covenants.
---------------------------------
(a) DRI represents and covenants that (1) during the term of this
Agreement, DRI will comply with all laws, rules and regulations applicable to
its provision of the Services hereunder and (2) DRI has, 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) DRI will maintain customary records in connection with the
provision of Services hereunder. Upon the request of Great Hall, DRI will
provide to Great Hall or its agents or
<PAGE>
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. DRI agrees that it 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.
--------------------------
DRI hereby agrees to promptly notify Great Hall if for any reason DRI is
unable to perform fully and promptly any of its 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 DRI hereunder,
Great Hall agrees to cause each Fund to pay DRI a fee (and to reimburse DRI 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.
6. Indemnification.
----------------
(a) Great Hall agrees to indemnify DRI and to hold DRI 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
DRI pursuant to this Agreement, unless DRI acted negligently or in bad faith.
(b) DRI 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 DRI'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 with respect to each Fund as of the
date set forth opposite such Fund's name on Exhibit A hereto. This Agreement
may be terminated without penalty at any time by either party 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. DAIN RAUSCHER INCORPORATED
By /s/ Julie K. Getchell By /s/ J. Scott Spiker
------------------------------- ------------------------------------
Name: Julie K. Getchell Name: J. Scott Spiker
Title: Chief Financial Officer Title: Senior Executive Vice President
<PAGE>
EXHIBIT A
to
SHAREHOLDER ACCOUNT SERVICES AGREEMENT
FUND EFFECTIVE DATE MONTHLY FEE
- ---- -------------- -----------
Great Hall Prime January 2, 1998 1/12 of $12.00 per year per customer
Money Market Fund
(Series A)
Great Hall January 2, 1998 1/12 of $12.00 per year per customer
U.S. Government
Money Market Fund
(Series B)
Great Hall January 2, 1998 1/12 of $12.00 per year per customer
Tax-Free
Money Market Fund
(Series C)
Great Hall January 2, 1998 1/12 of $12.00 per year per customer
Institutional Prime
Money Market Fund
(Series F)
Great Hall August 19, 1998 1/12 of $12.00 per year per customer
Institutional Tax-Free
Money Market Fund
(Series G)
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 DRI for
reasonable postage and statement printing expenses incurred by DRI in
connection with its provision of the Services.
GREAT HALL INVESTMENT FUNDS, INC.
Post-Effective Amendment No. 12 to the
Registration Statement on Form N-1A
EXHIBIT 10
OPINION AND CONSENT OF FAEGRE & BENSON LLP
<PAGE>
FAEGRE & BENSON LLP
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 F Common Shares and
Series G 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: September 24, 1998
Very truly yours,
/s/ Faegre & Benson LLP
GREAT HALL INVESTMENT FUNDS, INC.
Post-Effective Amendment No. 12 to the
Registration Statement on Form N-1A
EXHIBIT 11
CONSENT OF KPMG PEAT MARWICK LLP
<PAGE>
Independent Auditors' Consent
-----------------------------
The Board of Directors
Great Hall Investment Funds, Inc.
We consent to the use of our reports included herein or incorporated by
reference and the reference to our Firm under the Heading "FINANCIAL
HIGHLIGHTS" in Part A and "COUNSEL AND AUDITORS" in Part B of the Registration
Statement on Form N-1A.
/s/ KPMG Peat Marwick LLP
Minneapolis, MN
September 24, 1998
GREAT HALL INVESTMENT FUNDS, INC.
Post-Effective Amendment No. 12 to the
Registration Statement on Form N-1A
EXHIBIT 18
LIST OF
OFFICERS AND DIRECTORS
OF DAIN RAUSCHER INCORPORATED
<PAGE>
LIST OF OFFICERS AND DIRECTORS
OF DAIN RAUSCHER INCORPORATED
Name Title
- ------------------------------------ ------------------------------------
Andrew, James..............................Senior VP/Investment Officer
Appel, John C..............................Vice Chairman
Auker, Randall B...........................Senior VP/Investment Officer
Baker, Mark S..............................Senior VP/Investment Officer
Bankord, Mark A............................Senior VP/Investment Officer
Barnett, Jerry B...........................Senior VP/Investment Officer
Bartlett, Paul H...........................Senior VP/Investment Officer
Bast, Maryann E............................Senior VP/Investment Officer
Bauchman, Nancy A..........................Senior VP/Investment Officer
Bledsoe, Jr, Gilbert H.....................Senior VP/Investment Officer
Blonde, Elliott H..........................Senior VP/Investment Officer
Boulware, Jr, John C.......................Senior VP/Investment Officer
Brandenberger, Robert J....................Senior VP/Investment Officer
Brass, Alan................................Senior VP/Investment Officer
Braucht, William C.........................Senior VP/Investment Officer
Braver, Robert.............................Senior VP/Investment Officer
Brazelton, III, Lewis E....................Senior VP/Investment Officer
Brooks, Robert J...........................Senior VP/Investment Officer
Brown, Steve...............................Senior Vice President
Brugger, Kent V............................Senior VP/Investment Officer
Buchanan, Robert...........................Senior VP/Investment Officer
Burgess, Robert N..........................Senior Vice President
Burkhart, Theodore Ray.....................Senior Vice President
Byrd, Jr, Richard E........................Senior Vice President
Campbell, William F........................Senior Vice President
Cardinal, David L..........................Senior VP/Investment Officer
Carlson, Bruce E...........................Senior VP/Investment Officer
Carter, Michael A..........................Senior VP/Investment Officer
Cashman, Sally L...........................Senior VP/Investment Officer
Chaney, Craig A............................Senior VP/Investment Officer
Chesnut, Jr, William G.....................Senior VP/Investment Officer
Childres, Glenn D..........................Senior VP/Investment Officer
Civello, Nelson D..........................Senior Executive Vice President
Clay, John C...............................Senior VP/Investment Officer
Click, Ronald B............................Senior VP/Investment Officer
Cooper, Duane C............................Senior VP/Investment Officer
Cooper, Malcolm L..........................Senior VP/Investment Officer
Cooper, Robert A...........................Senior VP/Investment Officer
Cordiak, Robert B..........................Senior VP/Investment Officer
Crowell, Charles A.........................Senior VP/Investment Officer
Cutchall, Creston C........................Senior VP/Investment Officer
Davidge, Jr, Edward C......................Senior VP/Investment Officer
Davis, Scott A.............................Senior VP/Investment Officer
Denner, Stephen S..........................Senior VP/Investment Officer
Dollarhide, David W........................Senior VP/Investment Officer
Drake, Harry S.............................Senior VP/Investment Officer
Drexler, Stephen J.........................Senior VP/Investment Officer
Drummond, Michael S........................Senior Vice President
Dumphy, Thomas A...........................Senior VP/Investment Officer
Duperier, Frank D..........................Senior Vice President
Dupske, Mary F.............................Senior Vice President
Dutcher, James D...........................Senior VP/Investment Officer
Elston, Mark J.............................Senior VP/Investment Officer
Ernst, Ronald R............................Senior VP/Investment Officer
Evans, David J.............................Senior VP/Investment Officer
Falk, Robert A.............................Senior VP/Investment Officer
Felicetta, Lee.............................Senior VP/Investment Officer
Fisher, Harrison...........................Senior VP/Investment Officer
Freeman, Paul I............................Senior VP/Investment Officer
French, Berna J............................Senior Vice President
Furuseth, Peder D..........................Senior Vice President
Gales, Robert H............................Senior Managing Director
Geron, James M.............................Senior Vice President
Getchell, Julie K..........................Senior Vice President
Gillilan, Michael S........................Senior Vice President
Gilmore, Keith R...........................Senior VP/Investment Officer
Glosser, Gregory C.........................Senior VP/Investment Officer
Golladay, Monty A..........................Senior VP/Investment Officer
Goulooze, Richard W........................Senior VP/Investment Officer
Grant, Peter...............................Senior Managing Director
Green, James E.............................Senior VP/Investment Officer
Grose, Charles E...........................Senior Vice President
Gutkowski, Sr, Joseph P....................Senior VP/Investment Officer
Hackl, Kenneth J...........................Senior VP/Investment Officer
Hanley, Donald W...........................Senior VP/Investment Officer
Hardee, H. H...............................Senior VP/Investment Officer
Hasie, Monte S.............................Senior VP/Investment Officer
Hasie, Todd L..............................Senior VP/Investment Officer
Hayden, Gary F.............................Senior VP/Investment Officer
Heise, Russell B...........................Senior Vice President
Henderson, Linda L.........................Senior Vice President
Hengesteg, Mark............................Senior VP/Investment Officer
Herndon, Russell B.........................Senior VP/Investment Officer
Hester, Wayne A............................Senior VP/Investment Officer
Hickey, John E.............................Senior Vice President
Hickman, Robert F..........................Senior VP/Investment Officer
Higley, Robert A...........................Senior VP/Investment Officer
Himelright, Jr, Loring K...................Senior VP/Investment Officer
Hinson, Richard C..........................Senior VP/Investment Officer
Hoelscher, Harold G........................Senior VP/Investment Officer
Holderman, Charles J.......................Senior VP/Investment Officer
Hollendoner, Michael F.....................Senior VP/Investment Officer
Hollimon, Bryson...........................Senior Managing Director
Holtz, Lawrence C..........................Senior Vice President
Jacobs, Joel R.............................Senior Managing Director
Jansson, James R...........................Senior VP/Investment Officer
Jennings, David B..........................Senior Vice President
Joas, Paul K...............................Senior VP/Investment Officer
Jobes, William K...........................Senior VP/Investment Officer
Jordan, Jay D..............................Senior VP/Investment Officer
Kailing, Penelope W........................Senior VP/Investment Officer
Katz, Gerald L.............................Senior VP/Investment Officer
Kavanagh, Michael R........................Senior Vice President
Keller, Stewart............................Senior VP/Investment Officer
Kelley, Frank E............................Senior VP/Investment Officer
Kelley, Gregory G..........................Senior VP/Investment Officer
Kelley, Richard W..........................Senior VP/Investment Officer
Kelly, Warren P............................Senior VP/Investment Officer
Kenyon, Henry David........................Senior VP/Investment Officer
Kerber, William J..........................Senior VP/Investment Officer
Kerr, James P..............................Senior Vice President
Kidd, William L............................Senior VP/Investment Officer
King, Michael C............................Senior VP/Investment Officer
Lacamp, James E............................Senior VP/Investment Officer
Lambert, Dennis C..........................Senior VP/Investment Officer
Lane, Alfred W.............................Senior VP/Investment Officer
LaPier, David..............................Senior VP/Investment Officer
Laros, Thomas G............................Senior VP/Investment Officer
Leaverton, Karl V..........................Senior Vice President
Loy, Claude E..............................Senior VP/Investment Officer
Lynch, Jr, Leslie O........................Senior Vice President
Macpherson, Gary K.........................Senior VP/Investment Officer
Manske, Jr, Stanley R......................Senior VP/Investment Officer
Marek, John J..............................Senior VP/Investment Officer
Marshall, Joseph A.........................Senior VP/Investment Officer
Massad, Wade I.............................Senior Managing Director
McCoy, Harry A.............................Senior VP/Investment Officer
McDermott, Robert L........................Senior Vice President
McFarland, Richard D.......................Vice Chairman
McGowan, Spencer D.........................Senior VP/Investment Officer
McKenzie, Keith S..........................Senior VP/Investment Officer
Mehrer, Roger L............................Senior VP/Investment Officer
Melton, Donald R...........................Senior Vice President
Mohs, Robert...............................Senior VP/Investment Officer
Monday, C. Barrett.........................Senior VP/Investment Officer
Mooney, Richard A..........................Senior VP/Investment Officer
Murphy, James J............................Senior VP/Investment Officer
Myers, David E.............................Senior VP/Investment Officer
Neff, John E...............................Senior VP/Investment Officer
Neuhaus, Jr, Joseph R......................Senior VP/Investment Officer
Newnham, Morris L..........................Senior VP/Investment Officer
Nickel, Gary L.............................Senior Vice President
Nicol, Arthur C............................Senior Vice President
Nolan, Tom.................................Senior Vice President
Oakley, James T............................Senior VP/Investment Officer
Olanie, Eric F.............................Senior VP/Investment Officer
Orgel, Mark A..............................Senior VP/Investment Officer
Parks, William B...........................Senior VP/Investment Officer
Parrin, David..............................Senior Vice President
Parsons, H. Allen..........................Senior VP/Investment Officer
Pawlak, Gregory S..........................Senior VP/Investment Officer
Pedersen, Richard A........................Senior VP/Investment Officer
Peyton, John W.............................Senior VP/Investment Officer
Phillippe, Paula H.........................Senior Vice President
Pickett, John A............................Senior VP/Investment Officer
Pierce, Jr, Charles C......................Vice Chairman
Plant, Phillip M...........................Senior VP/Investment Officer
Pollock, David M...........................Senior VP/Investment Officer
Pollok, Jr, Lewis W........................Senior VP/Investment Officer
Polydoros, Nick J..........................Senior VP/Investment Officer
Pruner, Richard G..........................Senior Vice President
Quello, John M.............................Senior VP/Investment Officer
Radtke, David F............................Senior VP/Investment Officer
Rae, Robert T..............................Senior VP/Investment Officer
Reddell, Charles P.........................Senior VP/Investment Officer
Rewey, James O.............................Senior VP/Investment Officer
Ringsmuth, Dennis M........................Senior VP/Investment Officer
Rohl, Regan R..............................Senior VP/Investment Officer
Rosso, William J...........................Senior Vice President
Saling, Jr, Carl A.........................Senior Vice President
Sammons, Greg P............................Senior Vice President
Schmidt, Roger J...........................Senior VP/Investment Officer
Schultz, Dean H............................Senior Vice President
Schwenke, Kenneth F........................Senior VP/Investment Officer
Sebastian, John V..........................Senior Vice President
Shahan, William R..........................Senior VP/Investment Officer
Shaw, Jr, Fred D...........................Senior VP/Investment Officer
Sherwood, David M..........................Senior VP/Investment Officer
Siegel, Michael F..........................Senior VP/Investment Officer
Sinkula, John A............................Senior VP/Investment Officer
Sloan, Frank O.............................Senior VP/Investment Officer
Smith, Carla J.............................Senior VP/Secretary/General Counsel
Smith, Delbert E...........................Senior VP/Investment Officer
Smith, Robert C............................Senior VP/Investment Officer
Smith, Russ C..............................Senior VP/Investment Officer
Smith, Truman..............................Senior VP/Investment Officer
Sogge, David B.............................Senior Vice President
Solon, Vlasie..............................Senior VP/Investment Officer
Sorum, Nikki L.............................Senior Vice President
Sparks, Joseph C...........................Senior VP/Investment Officer
Spencer, Dennis L..........................Senior VP/Investment Officer
Spiker, John Scott.........................Senior Executive Vice President
Spurrier, John E...........................Senior VP/Investment Officer
Steiner, Gary D............................Senior VP/Investment Officer
Stengel, John R............................Senior VP/Investment Officer
Stern, Richard P...........................Senior VP/Investment Officer
Storey, Jr, Benjamin M.....................Senior VP/Investment Officer
Stover, Allen L............................Senior VP/Investment Officer
Strachan, Douglas J........................Senior Vice President
Strehlow, Ross A...........................Senior VP/Investment Officer
Sutton, Randall C..........................Senior VP/Investment Officer
Thomas, Jack A.............................Senior Vice President
Thomas, Stephen H..........................Senior Vice President
Thompson, John L...........................Senior Vice President
Thompson, Jr, Guy M....................... Senior VP/Investment Officer
Tilley, Jr, Joe A..........................Senior VP/Investment Officer
Tobin, Cathleen B..........................Senior Vice President
Tschetter, Ronald A........................Senior Executive Vice President
Vanosky, Robert............................Executive Vice President
Wanne, Sidney C............................Senior VP/Investment Officer
Weiser, Irving.............................Chairman, President and CEO
Weltzien, Don L............................Senior VP/Investment Officer
Wessels, Kenneth...........................Senior Executive Vice President
Wetterschneider, Larry K...................Senior Vice President
White, Michelle R..........................Senior Vice President
Wilhite, Dan N.............................Executive Vice President
Wilkinson, Donna...........................Senior Vice President
Williard, John E...........................Senior VP/Investment Officer
Wilson, Jr, Lawrence H.....................Senior VP/Investment Officer
Wyett, Stephen M...........................Senior VP/Investment Officer
Yates, Radford M...........................Senior VP/Investment Officer
Young, Sr, Douglas R.......................Senior VP/Investment Officer
FAEGRE & BENSON LLP
2200 Norwest Center
90 South Seventh Street
Minneapolis, Minnesota 55402
September 29, 1998
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street N.W.
Washington, D.C. 20549
Re: Great Hall Investment Funds, Inc.
(SEC File Nos. 33-41395 and 811-6340)
-------------------------------------
Ladies and Gentlemen:
On behalf of Great Hall Investment Funds, Inc., a Minnesota corporation
(the "Company"), in connection with the registration of the Company as an open-
end management investment company under and pursuant to the Investment Company
Act of 1940, as amended (the "1940 Act"), and the registration of the Company's
common shares under and pursuant to the Securities Act of 1933, as amended (the
"1933 Act"), there is hereby transmitted for filing, pursuant to the Electronic
Data Gathering, Analysis and Retrieval ("EDGAR") system, Post-Effective
Amendment No. 12 to the Company's Registration Statement on Form N-1A (the
"Registration Statement").
Post-Effective Amendment No. 11 to the Company's Registration Statement
was filed on August 28, 1998 pursuant to paragraph (a)(2) of Rule 485 under the
1933 Act to become effective automatically 75 days thereafter (November 11,
1998). Such amendment was filed for the purpose of registering the Company's
Series G Common Shares under the 1933 Act and the portfolio of assets and
liabilities to be represented by such shares (to be named Great Hall
Institutional Tax-Free Money Market Fund) under the 1940 Act. Such Fund will
be offered in a combined Prospectus and Statement of Additional Information
with Great Hall Institutional Prime Money Market Fund (which is represented by
the Company's Series F Common Shares).
This Post-Effective Amendment No. 12 is being filed pursuant to paragraph
(b) of Rule 485 to bring the financial information relating to Great Hall
Institutional Prime Fund up to date and to make certain other non-material
changes which the Company deems appropriate. Because this Post-Effective
Amendment is being filed prior to the effective date of Post-Effective
Amendment No. 11, the effective date of this Post-Effective Amendment No. 12
will be the same as the effective date of Post-Effective Amendment No. 11
(November 11, 1998, as indicated above). However, the Company and its
principal underwriter are filing acceleration requests today respectfully
requesting acceleration of the effective date of Post-Effective Amendments Nos.
11 and 12 to October 1, 1998. We have discussed all of the foregoing with Mary
Cole, the staff examiner assigned to the Company.
We have likewise advised Ms. Cole in separate correspondence that the
disclosures set forth in Post-Effective Amendments Nos. 11 and 12 relating to
the new Great Hall Institutional Tax-Free Fund mirror in all material respects
the disclosures relating to Great Hall Tax-Free Money Market Fund (represented
by the Company's Series C Common Shares). Based thereon, and in accordance
with Securities Act Release No. 6510 (February 15, 1984), the Company has
respectfully requested that Post-Effective Amendments Nos. 11 and 12 receive no
review by the staff.
We have participated in the preparation of Post-Effective Amendment No.
12. In accordance with paragraph (b)(4) of Rule 485, please be advised that we
are unaware of any disclosures contained in Post-Effective Amendment No. 12
that would render it ineligible to become effective under paragraph (b) or Rule
485.
The originals of all written communications relating to the Registration
Statement should be sent to the agent for service, J. Scott Spiker, Chief
Executive Officer, Great Hall Investment Funds, Inc., 60 South Sixth Street,
Minneapolis, Minnesota 55402. Please send copies of all communications to the
undersigned and to John R. Houston, Lindquist & Vennum PLLP, 4200 IDS Center,
80 South Eighth Street, Minneapolis, Minnesota 55402. Please direct any oral
comments on the Registration Statement to the undersigned at (612) 336-3359.
Thank you.
Very truly yours,
/s/ Matthew L. Thompson
Matthew L. Thompson
MLT
Enclosures
cc: Mary A. Cole
