SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934(Amendment No.______)
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or
Sec. 240.14a-12
The Boulevard Funds
(Name of Registrant as Specified In Its Charter)
Federated Investors
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
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Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
[X] Fee previously paid
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
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Set forth the amount on which the filing fee is calculated and
state how it was determined.
[ ] Check the box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date File:
Preliminary Copy
BOULEVARD BLUE CHIP GROWTH FUND
BOULEVARD STRATEGIC BALANCE FUND
BOULEVARD MANAGED MUNICIPAL FUND
BOULEVARD MANAGED INCOME FUND
(Series of The Boulevard Funds)
Federated Investors Tower, 19th Floor
Pittsburgh, Pennsylvania 15222-3779
_____________________________________________
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH 25, 1994
_____________________________________________
NOTICE IS HEREBY GIVEN that a Special Meeting of shareholders of
Boulevard Blue Chip Growth Fund, Boulevard Strategic Balance Fund,
Boulevard Managed Municipal Fund, and Boulevard Managed Income Fund
(each a "Fund," and collectively the "Funds"), each a series of The
Boulevard Funds, a Massachusetts business trust (the "Trust"), will be
held on March25, 1994, at Federated Investors Tower, 19th Floor, Liberty
Avenue at Grant Street, Pittsburgh, Pennsylvania 15222-3779, at 2:00
p.m., local time, for the following purposes:
1. To elect five Trustees of the Trust to replace the
current Board of Trustees.
2. To approve or disapprove a new Investment Advisory
Agreement between each of the Funds and First Bank National
Association.
3. To ratify or reject the Board of Trustees' selection of KPMG
Peat Marwick as theindependent public accountants of the
Trust for the current fiscal year.
4. To transact such other business as may properly come before
the meeting.
As set forth in the attached Proxy Statement, implementation of the
changes set forth in 1 through 3 above, if approved by shareholders, is
contingent upon consummation of the proposed acquisition of Boulevard
Bancorp, Inc., the parent company of the Funds' current investment
adviser, Boulevard Bank National Association, by First Bank System,
Inc., the parent company of the Funds' proposed new investment adviser,
First Bank National Association.
Shareholders of record on February 3, 1994, are the only persons
entitled to notice of and to vote at the Special Meeting.
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS APPROVAL OF EACH
ITEM LISTED ON THIS NOTICE OF SPECIAL MEETING OF SHAREHOLDERS.
Your attention is directed to the attached Proxy Statement.
Whether or not you expect to be present at the meeting, please fill in,
sign, date, and mail the enclosed proxy as promptly as possible in order
to save any further solicitation expense. There is enclosed with the
proxy an addressed envelope for which no postage is required.
Dated: March 5, 1994. By Order of the Trustees
John W. McGonigle
Secretary
Preliminary Copy
PROXY STATEMENT
BOULEVARD BLUE CHIP GROWTH FUND
BOULEVARD STRATEGIC BALANCE FUND
BOULEVARD MANAGED MUNICIPAL FUND
BOULEVARD MANAGED INCOME FUND
(Series of The Boulevard Funds)
Federated Investors Tower, 19th Floor
Pittsburgh, Pennsylvania 15222-3779
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH 25, 1994
The enclosed proxy or proxies are solicited by the Board of
Trustees of The Boulevard Funds, a Massachusetts business trust (the
"Trust") in connection with a Special Meeting of shareholders of
Boulevard Blue Chip Growth Fund, Boulevard Strategic Balance Fund,
Boulevard Managed Municipal Fund, and Boulevard Managed Income Fund
(each a "Fund," and collectively the "Funds"), each a series of the
Trust, to be held on March25, 1994, and at any adjournments thereof.
The mailing of this Proxy Statement and the accompanying Notice of
Special Meeting and proxies to Trust shareholders is initially being
made on or about March5, 1994. Representatives of the Funds, including
Boulevard Bank National Association (the current investment adviser of
the Funds), Federated Services Company (the Trust's current transfer
agent) and Federated Administrative Services (the Trust's current
administrator), may solicit proxies for the management of the Trust by
means of mail, telephone, telecopy or personal calls.
A proxy may be revoked before the Special Meeting by giving
written notice, in person or by mail, of revocation to the Secretary of
the Trust or at the meeting prior to voting in person. Unless revoked,
properly executed proxies in which choices are not specified by
shareholders will be voted "for" each item for which no choice is
specified, in accordance with the recommendation of the Board of
Trustees. In instances where choices are specified by the shareholders
in the proxy, those proxies will be voted or the vote will be withheld
in accordance with the shareholders' respective choices.
For purposes of determining the presence of a quorum and counting
votes on the matters presented, shares represented by abstentions and
"broker non-votes" will be counted as present, but not as votes cast, at
the Special Meeting. Under the Trust's Declaration of Trust, the
election of Trustees and the selection of independent auditors will be
determined on the basis of a percentage of votes cast at the Special
Meeting. Under the Investment Company Act of 1940 (the "1940 Act"),
other matters may be determined on the basis of a percentage of votes
present at the Special Meeting, which would have the effect of treating
abstentions and non-votes as if they were votes against the proposal.
As described herein under the caption "Background of the Special
Meeting," the proposals specified in the Notice of Special Meeting are
being submitted to shareholders as a result of the proposed acquisition
of Boulevard Bancorp, Inc., the parent company of the Funds' current
investment adviser, Boulevard Bank National Association ("Boulevard
Bank"), by First Bank System, Inc., the parent company of the Funds'
proposed new investment adviser, First Bank National Association ("First
Bank"). Following this acquisition, Boulevard Bank and First Bank both
will be subsidiaries of First Bank System. Implementation of the
changes proposed to be acted upon at the Special Meeting is contingent
upon consummation of the proposed acquisition. The Board of Trustees of
the Trust recommends approval of each item specified in the Notice of
Special Meeting.
The cost of solicitation of proxies for the Special Meeting,
including the cost of preparing and mailing the Notice of Special
Meeting and this Proxy Statement, will be borne by First Bank.
Only shareholders of record on February3, 1994 may vote at the
Special Meeting or any adjournment thereof. As of that date, there were
issued and outstanding the following numbers of shares of the respective
Funds, the only class of securities of each Fund:
Boulevard Blue Chip Growth Fund 3,296,688 shares
Boulevard Strategic Balance Fund 2,903,642 shares
Boulevard Managed Municipal Fund 1,914,564 shares
Boulevard Managed Income Fund 7,380,389 shares
Each shareholder is entitled to one vote for each share held.
None of the matters to be presented at the Special Meeting will entitle
any shareholder of any Fund to cumulative voting or appraisal rights.
In the event that sufficient proxy votes in favor of the proposals set
forth in the Notice of Special Meeting are not received by March25,
1994, the persons named as proxies may propose one or more adjournments
of the meeting to permit further solicitation of proxies. An
adjournment will require the affirmative vote of the holders of a
majority of the shares present in person or by proxy at the duly held
meeting. The persons named as proxies will vote in favor of such
adjournments with respect to any of said proposals if the proxies are
instructed (by more than a majority of the shares represented in person
or by proxy) to vote "for" the proposal(s) for which the adjournment is
being proposed.
TABLE OF CONTENTS
Page
Background of the Special Meeting 4
Recommendations of Board of Trustees 6
Share Ownership 7
Proposal Number 1 -- Election of Trustees 7
Voting Information 9
Proposal Number 2 -- Approval of New Investment Advisory Agreement 9
Description of New Advisory Agreement; Comparison with Existing
Advisory Agreement 9
Current and Anticipated Fee Waivers 11
Portfolio Managers 12
Portfolio Transactions and Brokerage 12
Other Funds Managed by First Bank 13
Supplemental Information Regarding First Bank 16
Voting Information 16
Proposal Number 3 -- Ratification or Rejection of Independent
Public Accountants 17
Voting Information 18
Additional Anticipated Changes Affecting the Funds 18
Changes of Name of Trust and Funds 18
Sales Charges 18
Rule 12b-1 Plan of Distribution 19
Description of New Distribution Agreement; Comparison with
Existing Distribution Agreement 19
Description of New Administrative, Fund Accounting, and Shareholder
Service Agreements; Comparison with Existing Agreements 20
New Custodian Agreement; Comparison with Existing
Custodian Agreement 21
Change in Fiscal Year 22
Possible Creation of Retail and Institutional Classes of Shares 22
Possible Fund Mergers 22
Section 15(f) of the Investment Company Act of 1940 23
Actual and Pro Forma Fees and Expenses of the Funds 25
Other Matters 28
BACKGROUND OF THE SPECIAL MEETING
This Proxy Statement relates to a Special Meeting of shareholders
of Boulevard Blue Chip Growth Fund, Boulevard Strategic Balance Fund,
Boulevard Managed Municipal Fund, and Boulevard Managed Income Fund
(each a "Fund," and collectively the "Funds"), each a series of The
Boulevard Funds, a Massachusetts business trust (the "Trust"). The
current investment adviser of each of the Funds is Boulevard Bank
National Association ("Boulevard Bank"), which is a subsidiary of
Boulevard Bancorp, Inc. ("Boulevard Bancorp"). On September29, 1993,
Boulevard Bancorp agreed to be acquired (the "Acquisition") by First
Bank System, Inc. ("FBS") by merging with a newly-formed subsidiary of
FBS. Consummation of the Acquisition is subject to approval by
Boulevard Bancorp's shareholders, receipt of required regulatory
approvals and satisfaction of certain other conditions. Although the
Acquisition currently is expected to be consummated in March or April
1994, there is no assurance as to whether or when it will be
consummated.
FBS is a publicly-held regional bank holding company headquartered
in Minneapolis, Minnesota and is comprised of nine banks and several
trust companies and nonbank subsidiaries with more than 200 offices
primarily in Minnesota, Colorado, Montana, North Dakota, South Dakota
and Wisconsin. At December31, 1993, FBS had consolidated assets of
$26.4 billion, consolidated deposits of $21.0 billion and shareholders'
equity of $2.2 billion.
First Bank National Association ("First Bank"), also headquartered
in Minneapolis, is the largest subsidiary bank of FBS, with assets of
$15.7 billion at December31, 1993. First Bank currently acts as
investment adviser to 17 mutual fund portfolios known collectively as
the First American Family of Funds, and it proposes to act as investment
adviser to five additional funds which are currently in registration./
These funds have, in the aggregate, approximately $2.86 billion in
assets as of December31, 1993. SEI Financial Services Company ("SEI
Financial Services"), which is not affiliated with FBS, acts as
distributor for the First American Family of Funds, and affiliates of
SEI Financial Services provide shareholder servicing, transfer agent and
other services to such funds. First Trust National Association, a
subsidiary of FBS, acts as custodian for the First American Family of
Funds.
The proposals to be voted upon at the Special Meeting grow out of
specific proposals received by the Board of Trustees from First Bank and
Boulevard Bank. These proposals include the suggestion that Fund
shareholders might benefit if the Funds become part of the First
American Family of Funds following the Acquisition of Boulevard Bancorp
by FBS. As noted above, the First American Family of Funds consists of
17 funds with a total of approximately $2.86 billion of assets under
management, while the Funds comprising the Trust consist of just four
funds with a total of approximately $151 million of assets under
management at December 31, 1993. If, as is contemplated, the Funds are
brought under advisory, management and service arrangements
corresponding to those in place for the First American Family of Funds,
it is First Bank's view that the Funds would gain access to the greater
investment advisory resources available at First Bank and may (although
there is no assurance) benefit from management and service economies
available to larger groups of funds.
For these reasons, and as described in detail in the remainder of
this Proxy Statement, shareholders of the Funds are being asked to
approve:
. Election of five Trustees of the Trust to replace the current
Board of Trustees. The five nominees include all of the
"disinterested" members and one of the "interested" members of
the current boards of the other funds in the First American
Family of Funds.
. New investment advisory agreements between the Funds and First
Bank, which would replace the current advisory agreements
between the Funds and Boulevard Bank.
. Ratification of the appointment of KPMG Peat Marwick, which
acts as independent public accountants of the other funds in
the First American Family of Funds, as the independent public
accountants of the Trust, to replace the Trust's current
independent accountants.
First Bank has advised the Trust that it intends to recommend
to the newly elected Trustees that several additional steps be taken in
order to standardize the servicing and operation of the Funds with those
of the First American Family of Funds. These include, among other
things:
. Renaming the Trust "First American Mutual Funds," and deleting
the word "Boulevard" from the name of each of the Funds.
. Increasing the maximum front-end sales loads for the Boulevard
Blue Chip Growth Fund and Boulevard Strategic Balance Fund from
4.0% to 4.5% and reducing the maximum front-end sales loads for
Boulevard Managed Municipal Fund and Boulevard Managed Income
Fund from 3.0% to 2.0%.
. Entering into a new distribution contract between the Funds and
SEI Financial Services, which acts as principal distributor for
the other funds in the First American Family of Funds, to
replace the current distribution contract with Federated
Securities Corp.
. Entering into new Fund administrative agreements with an
affiliate of SEI Financial Services, which provides such
services to the other funds in the First American Family of
Funds, to replace the current agreements with affiliates of
Federated Securities Corp.
. Entering into new custodial arrangements between the Funds and
First Trust National Association, an affiliate of First Bank
which provides custodian services to the other funds in the
First American Family of Funds, to replace the current
custodial arrangements with State Street Bank and Trust
Company.
. Changing the fiscal year-end of the Trust from November 30 to
September 30, in order to coincide with the fiscal year of the
other funds in the First American Family of Funds.
In addition, First Bank may recommend to the new Board of Trustees that
it classify shares of one or more of the Funds into multiple classes
which bear differing front-end loads and 12b-1 fees and may determine at
some time in the future that one or more of the Funds should be merged
with one or more funds in the current First American Family of Funds
which have similar investment objectives. These anticipated and possible
actions and related matters are described in greater detail in the
section of this Proxy Statement captioned "Additional Anticipated
Changes Affecting the Funds."
Shareholders should note (a) that they are not being requested to
approve changes to the investment objectives, policies and restrictions
of the Funds, although the Board of Trustees reserves the right to make
such changes in the future, with shareholder approval if required, and
(b) that contractual investment advisory fees will not increase under
the proposed new advisory agreements and will, in the case of Boulevard
Blue Chip Growth Fund and Boulevard Strategic Balance Fund, decrease
slightly. Although maximum front-end sales charges are expected to
increase from 4.0% to 4.5% for the Boulevard Blue Chip Growth Fund and
Boulevard Strategic Balance Fund, maximum front-end sales charges are
expected to decrease from 3.0% to 2.0% for the Boulevard Managed
Municipal Fund and Boulevard Managed Income Fund. Altogether, total
Fund operating expenses after voluntary waivers are not expected to
increase, and may decrease, as a result of the proposed and anticipated
actions described herein. For information regarding anticipated fee
waivers in the event shareholders approve the proposals to be acted upon
at the Special Meeting, see "Proposal Number 2 -- Current and
Anticipated Fee Waivers," "Additional Anticipated Changes Affecting the
Funds" and "Actual and Pro Forma Fees and Expenses of the Funds" herein.
Shareholders should recognize that the fee waivers in effect under the
current advisory and service arrangements or the fee waivers anticipated
to be in effect under the proposed new arrangements could be
discontinued at any time in the future, in either of which events
expenses of the Funds could increase.
RECOMMENDATIONS OF BOARD OF TRUSTEES
At its meeting held on February24, 1994, the current Board of
Trustees of the Trust unanimously approved the matters to be acted upon
at the Special Meeting and recommended shareholder approval of each of
the items to be acted upon. Representatives of Boulevard Bank, First
Bank and KPMG Peat Marwick, as well as the Chairman of the boards of
directors of the funds currently included in the First American Family
of Funds, made presentations to the Board of Trustees at this meeting
and responded to questions from Board members. In addition, prior to
this Board meeting, First Bank and KPMG Peat Marwick provided written
materials to the Board of Trustees at its request. In approving the
matters to be acted upon and recommending approval by shareholders, the
Board of Trustees considered, among other factors, the following:
(1) The qualifications and business experience of the
persons nominated to become new Trustees of the Trust,
including their experience in serving as directors of other
registered investment companies (see "Proposal Number 1 --
Election of Trustees" below).
(2) The qualifications and investment advisory experience
of the proposed new investment adviser, First Bank,
including its experience in acting as adviser to other
registered investment companies since 1982 and its
investment advisory personnel resources (see "Proposal
Number 2 -- Approval of New Investment Advisory Agreement --
Other Funds Managed by First Bank" and "-- Supplemental
Information Regarding First Bank" below).
(3) The terms of the proposed new investment advisory
agreement between the Funds and First Bank. (see "Proposal
Number 2 -- Description of New Advisory Agreement;
Comparison with Existing Advisory Agreement" below)
(4) The qualifications and experience of the portfolio
managers who are expected to manage the Funds if the
proposed new investment advisory agreement is approved by
shareholders (see "Proposal Number 2 -- Portfolio Managers"
below).
(5) The qualifications and experience of KPMG Peat Marwick
in acting as independent accountant to the other funds
included in the First American Family of Funds and to
numerous other mutual funds.
(6) The existence of a fiduciary relationship between most
of the Funds' shareholders and Boulevard Bank.
Based on its consideration of these factors, among others, and the
presentations and written materials referred to above, the Board of
Trustees unanimously approved the matters to be acted upon at the
Special Meeting and recommended shareholder approval of each of the
items to be acted upon.
SHARE OWNERSHIP
No officer or Trustee of the Trust beneficially owns one percent
or more of the outstanding shares of any Fund. The following table sets
forth, as of February 3, 1994 (the record date for the Special Meeting),
certain share ownership information concerning each of the Funds with
respect to all persons known by management of the Trust to beneficially
own five percent or more of the outstanding shares of any Fund:
<TABLE>
<CAPTION>
<S> <C> <C>
Number of Shares Percentage of Fund's
Name of Beneficial Owner Beneficially Owned (Fund) Outstanding Shares
The First National Bank of Des Plaines 2,885,475 87.5%
Attention: Trust Operations (Boulevard Blue
701 Lee Street Chip Growth Fund)
Des Plaines, IL 60616-4539
The First National Bank of Des Plaines 2,671,685 92.0%
Attention: Trust Operations (Boulevard Strategic
701 Lee Street Balance Fund)
Des Plaines, IL 60616-4539
The First National Bank of Des Plaines 1,836,707 95.9%
Attention: Trust Operations (Boulevard Managed
701 Lee Street Municipal Fund)
Des Plaines, IL 60616-4539
The First National Bank of Des Plaines 6,483,954 87.9%
Attention: Trust Operations (Boulevard Managed
701 Lee Street Income Fund)
Des Plaines, IL 60616-4539
</TABLE>
The First National Bank of Des Plaines is a subsidiary of Boulevard
Bancorp.
PROPOSAL NUMBER 1
ELECTION OF TRUSTEES
At the Special Meeting, the shareholders of the Trust will be
asked to elect five members of the Board of Trustees to replace the
current Board of Trustees. It is intended that the enclosed proxy will
be voted for the election of the five persons named below as Trustees
unless such authority has been withheld in the proxy. Election of the
new Trustees to the Board of Trustees is contingent upon consummation of
the Acquisition of Boulevard Bank by FBS as described under "Background
of the Special Meeting," and the term of office of each new Trustee will
not commence until the Acquisition has been consummated. The term of
office of the persons elected will be until their successors are elected
and shall qualify. Pertinent information regarding the nominees is set
forth below:
<TABLE>
<CAPTION>
<S> <C>
Name (Age) and Business Address Principal Occupation During Past 5 years
Welles B. Eastman (67)* Director of First American Funds, Inc. ("FAF") since Janu
998 Shady Lane 1991 and of First American Investment Funds, Inc. ("FAIF"
Wayzata, Minnesota 55391 since April 1991. (FAF and FAIF are the current
members of the First American Family of Funds.)
Chairman of the Board of Directors of Annandale
State Bank, Annandale, Minnesota; Vice President
of First Bank from 1968 and Vice President of
Institutional Trust Group of First Trust National
Association from 1986 until his retirement in
December 1988 from such positions.
Irving D. Fish (45) Director of FAF since 1984 and of FAIF since April 1991.
Fallon McElliott, Inc. Partner and Chief Financial Officer of Fallon McElliott,
901 Marquette, Suite 3200 a Minneapolis-based advertising agency.
Minneapolis, Minnesota 55402
Joseph D. Strauss (53) Director of FAF since 1984 and of FAIF since April 199
7716 North Riverdale Road Chairman of FAF's and FAIF's Boards since 1992; Presid
Brooklyn Park, Minnesota 55444 FAF and FAIF from June 1989 to November 1989.
President, Strauss Management Company since 1993;
President, Community Resource Partnerships Inc.
since 1992; Executive Vice President and Chief
Operating Officer, American Rubber Recycling
Centers Inc. since 1993; President and CEO of
Nipigon Gold Resources Ltd., a privately held
Canadian corporation involved in the development
of properties relating to precious and base metal
ores, since February 1989; attorney-at-law and
government affairs consultant.
Virginia L. Stringer (49) Director of FAF since April 1991 and of FAIF since Augus
712 Linwood Avenue President and Director of The Inventure Group, Inc., a
St. Paul, Minnesota 55105 management consulting and training company, since
August 1991; President of Scott's Consultants,
Inc., a management consulting company, from 1989
to 1991; President of Scott's, Inc., a
transportation company, from 1989 to 1990; Vice
President of Human Resources of The Pillsbury
Company, a food manufacturing company, from 1981
to 1989.
Gae B. Veit (51) Director of FAF and FAIF since December 1993. Owner a
P.O. Box 6 CEO of Shingobee Builders, Inc., a general contractor.
Loretto, Minnesota 55357
</TABLE>
* Denotes trustee who will be an "interested person" as defined in Section
2(a)(19) of the 1940 Act.
For the fiscal year ended November30, 1993, the Trustees received
no fees for their services to the Trust. Under the current arrangement
with the Trustees, it is anticipated that during the fiscal year ending
November30, 1994, the Trustees who are not interested persons of the
Trust, as a group, would receive fees totaling approximately $11,000.
The interested Trustees do not receive fees from the Trust. All
Trustees would be reimbursed for expenses for attendance at meetings.
After the new Trustees are elected and take office, it is
anticipated that First Bank would recommend that the Trust join in the
following arrangement with the other funds in the First American Family
of Funds and pay its share of fees and expenses thereunder: FAF and
FAIF, the current members of the First American Family of Funds, and the
Trust will jointly pay their directors (and, in the case of the Trust,
its Trustees) who are not paid employees or affiliates of FAF, FAIF or
the Trust a fee of $1,000 per year, plus $100 per Board meeting attended
and reimbursement of travel expenses for attending Board meetings.
Although no increases in these fees are contemplated at the present
time, such fees could be increased in the future. The Trust will not
pay fees or reimburse expenses to its Trustees in addition to the
amounts paid under this joint arrangement.
Voting Information
The affirmative vote of a plurality of the shares represented at
the Special Meeting, voting together and not as separate series, is
sufficient for the election of the above nominees to the Board of
Trustees, provided at least a quorum (more than 50% of the outstanding
shares) is represented in person or by proxy. Unless otherwise
instructed, the proxies will vote for the above five nominees.
All of the above nominees have consented to serve as Trustees if
elected. In the event any of the above nominees are not candidates for
election at the Special Meeting, the proxies will vote for such other
persons as management of the Trust may designate. Nothing currently
indicates that such a situation will arise.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE "FOR" ALL TRUSTEE NOMINEES
NAMED ABOVE.
PROPOSAL NUMBER 2
APPROVAL OF NEW INVESTMENT ADVISORY AGREEMENT
At the Special Meeting, shareholders of each of the Funds will be
asked to vote on a proposal to approve a new Investment Advisory
Agreement (the "New Advisory Agreement") between each Fund and First
Bank, which will replace the existing Investment Advisory Agreement (the
"Existing Advisory Agreement") between the Trust on behalf of each Fund
and Boulevard Bank. The current Board of Trustees of the Trust,
including a majority of the Trustees who are not "interested persons"
(as defined in the 1940 Act) of the Trust, First Bank or Boulevard Bank,
has approved the New Advisory Agreement and recommended that it be
submitted to the Funds' shareholders for approval. Execution of the New
Advisory Agreement, if approved by shareholders, is contingent upon
consummation of the Acquisition of Boulevard Bancorp by FBS as described
under "Background of the Special Meeting."
First Bank is the largest subsidiary bank of FBS, with assets of
$15.7 billion at December31, 1993. First Bank, which is a wholly owned
subsidiary of FBS, currently acts as investment adviser to 17 mutual
fund portfolios known collectively as the First American Family of
Funds, and it proposes to act as investment adviser to five additional
funds which are currently in registration. These funds have, in the
aggregate, approximately $2.86 billion in assets as of December31, 1993.
For additional information concerning the other funds managed by First
Bank, see "-- Other Funds Managed by First Bank" below, and for
additional information concerning the principal executive officers and
the directors of First Bank, see "-- Supplemental Information Concerning
First Bank" below. The address of First Bank's principal offices is 601
Second Avenue South, Minneapolis, Minnesota 55480.
Description of New Advisory Agreement; Comparison with Existing Advisory
Agreement
Under the New Advisory Agreement, each Fund will engage First Bank
to act as investment adviser for, and to manage the assets of, such
Fund. The New Advisory Agreement provides that First Bank, at its own
expense, shall provide the Trust with all necessary office space,
personnel and facilities necessary and incident to the performance of
First Bank's services thereunder and shall pay or be responsible for the
payment of all compensation to personnel of the Trust and the officers
and trustees of the Trust who are affiliated with First Bank or any
entity which controls, is controlled by or is under common control with
First Bank. First Bank will be responsible only for those expenses
expressly stated in the New Advisory Agreement to be its responsibility
and shall not be responsible for any other expenses of the Trust or any
Fund.
The New Advisory Agreement also provides that if, in any fiscal
year of a Fund, the sum of such Fund's expenses (including deferred
organizational expenses and investment advisory fees, but excluding
taxes, interest, brokerage fees, payments made to the distributor which
are deemed to be made pursuant to Rule 12b-1 under the 1940 Act and,
where permitted, extraordinary expenses) exceeds the expense limitations
applicable to such Fund then imposed by state securities administrators,
First Bank shall reimburse such Fund in the amount of such excess;
provided, however, that such payment or refund shall be made only out of
the advisory fees paid by the Fund to First Bank during the fiscal year
the payment or refund becomes due and shall not exceed such advisory
fees unless payment of such excess is required by any applicable state
securities administrator and First Bank agrees to be bound by any such
requirement. As of the date hereof, the most restrictive such state
limitation in effect requires that "aggregate annual expenses" (which
include the investment advisory fee and other operating expenses but
exclude interest, taxes, brokerage commissions, Rule 12b-1 fees and
certain other expenses) shall not exceed 2-1/2% of the first $30 million
of average net assets, 2% of the next $70 million of average net assets,
and 1-1/2% of the remaining average net assets of any Fund for any
fiscal year. After waivers, fees have historically been below these
levels.
The New Advisory Agreement may be terminated with respect to any
Fund at any time, without the payment of any penalty, by the Board of
Trustees of the Trust or by the vote of a majority of the outstanding
shares of such Fund, or by First Bank, upon 60 days' written notice to
the other party. The New Advisory Agreement shall automatically
terminate in the event of its "assignment" (as defined in the 1940 Act)
unless the Securities and Exchange Commission issues an order of
exemption or a no-action letter to the effect that such assignment does
not require termination as a statutory or regulatory matter. Unless
sooner terminated as described above, the New Advisory Agreement shall
continue in effect with respect to each Fund for a period of more than
two years from the date of its execution but only as long as such
continuance is specifically approved at least annually by (a)the Board
of Trustees of the Trust or by the vote of a majority of the outstanding
shares of the applicable Fund (as defined in the 1940 Act) and (b)the
vote of a majority of the Trustees who are not parties to the New
Advisory Agreement or "interested persons" (as defined in the 1940 Act)
of First Bank or the Trust, cast in person at a meeting called for the
purpose of voting on such approval.
In First Bank's view, the New Advisory Agreement contains
substantially the same terms as the Existing Advisory Agreement, except
as follows:
Investment Advisory Fees. The New Advisory Agreement
provides that each Fund will pay First Bank an advisory fee
monthly, based on an annual rate of .70% of the applicable Fund's
average daily net assets. The Existing Advisory Agreement
provides that each Fund will pay Boulevard Bank an advisory fee
daily, based on an annual rate of .75% of Boulevard Blue Chip
Growth Fund's and Boulevard Strategic Balance Fund's respective
average daily net assets and based on an annual rate of .70% of
Boulevard Managed Income Fund's and Boulevard Managed Municipal
Fund's respective average daily net assets.
Thus, under the New Advisory Agreement, the rate at which
advisory fees accrue will decrease slightly with respect to
Boulevard Blue Chip Growth Fund and Boulevard Strategic Balance
Fund, and fees will be paid monthly rather than daily. For
information concerning current and anticipated waivers of the
advisory fee, see "-- Current and Anticipated Fee Waivers" below.
Standard of Liability of Adviser. The New Advisory
Agreement provides that First Bank shall be liable to the Trust
and its shareholders or former shareholders for any negligence or
willful misconduct on the part of First Bank or any of its
directors, officers, employees, representatives or agents in
connection with the responsibilities assumed by it thereunder,
provided, however, that First Bank shall not be liable for any
investments made by it in accordance with the explicit or implicit
direction of the Board of Trustees of the Trust or the investment
objectives and policies of the Trust as set forth in the
then-current Registration Statement of the Trust, and provided
further that any liability of First Bank resulting from a breach
of fiduciary duty with respect to the receipt of compensation for
services shall be limited to the period and amount set forth in
Section 36(b)(3) of the 1940 Act. The New Advisory Agreement also
provides that First Bank will indemnify the Trust and each Fund
with respect to any loss, liability, judgment, cost or penalty
which the Trust or any Fund may directly or indirectly suffer or
incur in any way arising out of or in connection with any breach
of the New Advisory Agreement by First Bank. The Existing
Advisory Agreement, on the other hand, provides that, in the
absence of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the obligations or duties thereunder of
Boulevard Bank, Boulevard Bank shall not be liable to the Trust or
any of the Funds or any shareholder for any act or omission in the
course of or connected in any way with rendering services or for
any losses that may be sustained in the purchase, holding or sale
of any security or other asset; the Existing Advisory Agreement
also does not contain a contractual indemnity running from
Boulevard Bank to the Trust.
Thus, it is First Bank's view that the New Advisory
Agreement is more favorable to the Funds and their shareholders
than the Existing Advisory Agreement in that it makes First Bank
liable for its negligence (rather than gross negligence, as under
the Existing Advisory Agreement) and provides for a contractual
indemnity from First Bank to the Trust.
Current and Anticipated Fee Waivers
During the fiscal year ended November30, 1993, Boulevard Bank
earned $180,729 in advisory fees with respect to Boulevard Blue Chip
Growth Fund, of which $104,323 was waived; $180,729 in advisory fees
with respect to Boulevard Strategic Balance Fund, of which $120,486 was
waived; $83,941 in advisory fees with respect to Boulevard Managed
Municipal Fund, of which $76,691 was waived; and $396,467 in advisory
fees with respect to Boulevard Managed Income Fund, of which $198,233
was waived. Boulevard Bank may voluntarily choose to waive a portion of
its fee or reimburse other expenses of the Funds, but it can terminate
such waiver or reimbursement policy at any time at its sole discretion.
Federated Services, the current administrator of the Funds, is entitled
to receive administrative fees of at least $50,000 per year with respect
to the Funds but may voluntarily choose to reimburse a portion of its
fee at any time.
Under the proposed new agreements, First Bank and the anticipated
new administrator of the Funds have advised the Trustees that they
intend to waive a portion of their fees, on a voluntary basis, such that
total expenses are not expected to exceed .75% of average daily net
assets of the Blue Chip Growth Fund, .75% of average daily net assets of
the Strategic Balance Fund, .60% of average daily net assets of the
Managed Municipal Fund, and .60% of average daily net assets of the
Managed Income Fund, in each case after the waiver by the Funds' current
distributor of Rule 12b-1 fees. Advisory fees will be waived to the
extent they would cause the total fund operating expenses to exceed the
above limits. Such voluntary waivers are, however, subject to
discontinuation at any time.
Although fees under the New Advisory Agreement may occasionally
exceed current levels, First Bank expects that total operating expenses
for each Fund under the new agreements, after the voluntary fee waivers
described above, will be equal to, or less than, their present levels.
For example, for the year ended November 30, 1993, total fund operating
expenses were: .78% for Boulevard Blue Chip Growth Fund, compared to
.75% under the proposed agreements; .75% for Boulevard Strategic Balance
Fund, compared to .75% under the proposed agreements; .81% for Boulevard
Managed Municipal Fund, compared to .60% under the proposed agreements;
and .65% for Boulevard Managed Income Fund, compared to .60% under the
proposed agreements.
For additional information regarding the historical and pro forma
fees and expenses of the Funds and waivers thereof, see "Actual and Pro
Forma Fees and Expenses of the Funds" herein.
Portfolio Managers
Martin L. Jones. Martin Jones is the anticipated new portfolio
manager for the Boulevard Managed Income Fund. Martin is currently the
head portfolio manager for First American's Fixed Income, Government
Bond, Intermediate Term Income, Limited Term Income and Mortgage
Securities Funds. Martin heads up First Bank's Fixed Income group with
over 20 years of investment experience. Formerly with Harris Trust &
Savings Bank, Dillon, Read & Co., and Loeb Rhoades & Co., Martin
received his bachelor's degree from Texas Tech University, a master's
degree from the University of Texas, and an MBA from the University of
Chicago.
Richard W. Stanley. Dick Stanley is the anticipated new portfolio
manager for the Boulevard Managed Municipal Fund. Dick is currently the
portfolio manager for First American's Municipal Bond Fund, Minnesota
Insured Intermediate Tax Free Fund, and Colorado Intermediate Tax Free
Fund. Dick entered the investment business via investment sales with
Smith Barney & Co. in 1958. He then moved to Heritage Investment
Advisors as head of fixed income investment in 1973. He joined First
Bank in early 1986 as Vice President and Manager of Fixed Income
Investment/Personal Trust. Dick oversees the management of $800 million
in common trust funds (seven common trust funds, of which five are
municipal funds). Dick earned an MBA from Cornell University in 1958
and received his Chartered Financial Analyst certification in 1977.
Gerald C. Bren. Gerald Bren is the anticipated new portfolio
co-manager for the Boulevard Blue Chip Growth Fund and Boulevard
Strategic Balance Fund. Gerald has more than 20 years of investment
experience and has been First Bank's Manager of Equity Investments since
1986. Gerald earned an MBA from the University of Chicago in 1972 and
received his Chartered Financial Analyst certification in 1977.
Albin S. Dubiak. Al Dubiak is the anticipated new portfolio
co-manager of the Boulevard Blue Chip Growth Fund and Boulevard
Strategic Balance Fund. Al began his investment career as a security
trader with The First National Bank of Chicago in 1963 before joining
First Bank as an investment analyst in 1969. Since 1988, he has been
the Director of Investment Research and Fund Management. Al earned his
bachelor's degree from Indiana University in 1962 and an MBA from the
University of Arizona in 1969.
Portfolio Transactions and Brokerage
If the New Advisory Agreement is approved by Fund shareholders,
First Bank will make investment decisions and decisions as to the
execution of portfolio transactions for the Funds, subject to the
general supervision of the Board of Trustees of the Trust. At times,
investment decisions may be made to purchase or sell the same investment
security for more than one Fund or for other funds in the First American
Family of Funds, in which case the transactions will be allocated as to
amount and price in a manner considered equitable to each such fund. In
some cases this procedure could have a detrimental effect on the price
or volume of the security as far as certain Funds are concerned. On the
other hand, the ability of the Funds to participate in volume
transactions may produce better execution for the Funds in some cases.
In placing orders for securities transactions, the primary
criterion for selection of a broker-dealer is expected to be the ability
of the broker-dealer, in the opinion of First Bank, to secure prompt
execution of the transactions at the most favorable net price,
considering the state of the market at the time. However, First Bank
frequently selects a broker-dealer to effect a particular transaction
without contacting all broker-dealers who might be able to effect such
transaction because of the volatility of the market and the desire to
accept a particular price for a security because the price offered by
the broker-dealer meets a Fund's guidelines for profit, yield, or both.
When consistent with the objectives of prompt execution and
favorable net price, orders may be placed with broker-dealers who
furnish investment research or services to First Bank. Such research or
services include advice as to the value of securities; the advisability
of investing in, purchasing or selling securities; the availability of
securities, or purchasers or sellers of securities; and analyses and
reports concerning issues, industries, securities, economic factors and
trends, portfolio strategy and the performance of accounts. This allows
First Bank to supplement its own investment research activities and
enables it to obtain the views and information of individuals and
research statistics of many different securities firms prior to making
investment decisions for the Funds. To the extent portfolio
transactions are effected with broker-dealers who furnish research
services to First Bank, First Bank will receive a benefit, not capable
of evaluation in dollar amounts, without providing any direct monetary
benefit to the Funds from these transactions. First Bank believes that
most research services obtained by it generally benefit several or all
of the investment companies and private accounts that it manages, as
opposed to solely benefiting one specific managed fund or account.
Subject to the requirements of favorable price and efficient execution,
placement of orders by securities firms for the purchase of shares of
funds in the First American Family of Funds may be taken into account as
a factor in the allocation of portfolio transactions.
The Funds will not effect any brokerage transactions with any
broker or dealer affiliated directly or indirectly with First Bank
unless such transactions, including the frequency thereof, the receipt
of commissions payable in connection therewith, and the selection of the
affiliated broker or dealer effecting such transactions are not unfair
or unreasonable to the shareholders of the Funds, as determined by the
Board of Trustees. Any transactions with an affiliated broker or dealer
must be on terms that are both at least as favorable to the Funds as the
Funds can obtain elsewhere and at least as favorable as such affiliated
broker or dealer normally gives to others.
The foregoing portfolio and brokerage practices of First Bank do
not differ materially from those utilized by Boulevard Bank in its
capacity as existing investment adviser to the Funds. During the fiscal
year ended November 30, 1993, Boulevard Blue Chip Growth Fund and
Boulevard Strategic Balance Fund paid $18,904 and $15,230, respectively,
in commissions on brokerage transactions. Boulevard Managed Municipal
Fund and Boulevard Managed Income Fund paid no commissions on brokerage
transactions during the same period.
Other Funds Managed by First Bank
As previously noted, First Bank currently acts as investment
adviser to 17 mutual fund portfolios known as the First American Family
of Funds, and it proposes to act as investment adviser to five
additional funds which are currently in registration. The following
table identifies each such fund, sets forth each fund's respective net
assets at December31, 1993, and lists each fund's respective per annum
advisory fee rates as percentages of average daily net assets. The
first 12 funds named below are series of First American Investment
Funds, Inc. ("FAIF"), the next five funds are currently in registration
for future inclusion in FAIF, and the last five funds named below are
series of First American Funds, Inc. ("FAF"). First Bank has acted as
investment adviser to FAIF since its inception in 1987 and as investment
adviser to FAF since 1982.
<TABLE>
<CAPTION>
Advisory Fee Schedule
Net Assets Per Annum
Fund at 12/31/93 Average Daily Net Assets Advisory Fee Rate
(in thousands)
<S> <C> <C> <C>
Government Bond Fund $3,866.8 On first $100 million .50%
On next $150 million .40%
On average daily net assets
over $250 million .30%
Municipal Bond Fund $3,226.4 On first $100 million .50%
On next $150 million .40%
On average daily net assets
over $250 million .30%
Fixed Income Fund $53,266.2 On first $100 million .50%
On next $150 million .40%
On average daily net assets
over $250 million .30%
Stock Fund $123,332.6 On first $100 million .70%
On next $150 million .60%
On next $250 million .50%
On average daily net assets
over $500 million .40%
Special Equity Fund $93,147.4 On first $100 million .70%
On next $150 million .60%
On next $250 million .50%
On average daily net assets
over $500 million .40%
Intermediate Term Income $64,401.6 Any amount .70%
Fund
Equity Index Fund $153,299.2 Any amount .70%
Regional Equity Fund $67,999.1 Any amount .70%
Limited Term Income Fund $99,692.7 Any amount .70%
Balanced Fund $121,521.2 Any amount .70%
Asset Allocation Fund $55,590.4 Any amount .70%
Mortgage Securities Fund $33,265.7 Any amount .70%
Minnesota Insured Intermediate $-0- Any amount .70%
Tax Free Fund*
Colorado Intermediate Tax Free $-0- Any amount .70%
Fund*
Emerging Growth Fund* $-0- Any amount .70%
Technology Fund* $-0- Any amount .70%
International Fund* $-0- Any amount 1.25%
First American Money Fund $38,408.5 Any amount .40%
First American Institutional $1,026,158.4 Any amount .40%
Fund
First American Institutional $165,341.8 Any amount .40%
Government Fund
First American CT Treasury $579,742.3 Any amount .50%
Fund
First American CT $184,061.5 Any amount .50%
Government Fund
</TABLE>
* These funds are currently in registration.
First Bank has voluntarily waived portions of its advisory fee
from time to time with respect to certain of the funds identified above.
Such waivers can be discontinued at any time.
Supplemental Information Regarding First Bank
The identities of the directors and executive officers of First
Bank, together with information as to their other principal occupations,
are set forth below. The business address for each of the persons
listed is that of First Bank, 601 Second Avenue South, Minneapolis,
Minnesota 55480.
<TABLE>
<CAPTION>
Name Position with First Bank Other Principal Occupations
<S> <C> <C>
John F. Grundhofer Chairman, President and Chairman, President and Chief Executive
Chief Officer Officer of First Bank System, Inc. ("FBS")
Richard A. Zona Director, Vice Chairman and Vice Chairman and Chief Financial Officer
Chief Financial Officer of FBS
William F. Farley Director and Vice Chairman Vice Chairman and Head of the Distribution
Group of FBS
Philip G. Heasley Director and Executive Vice Vice Chairman and Head of the Product
President Group of FBS
Daniel C. Rohr Director and Executive Vice Executive Vice President of Commercial
President Banking of FBS
J. Robert Hoffman Director and Executive Vice Executive Vice President of Credit
President Administration of FBS
Michael J. O'Rourke Director, Executive Vice Executive Vice President, Secretary and
President and Secretary Secretary of FBS
</TABLE>
The Glass-Steagall Act generally prohibits banks from engaging in
the business of underwriting or distributing securities and from being
affiliated with companies principally engaged in those activities. In
addition, administrative and judicial interpretations of the
Glass-Steagall Act prohibit bank holding companies and their bank and
nonbank subsidiaries from organizing, sponsoring or controlling
registered open-end investment companies that are continuously engaged
in distributing their shares. Bank holding companies and their nonbank
subsidiaries may serve, however, as investment advisers to registered
investment companies, subject to a number of terms and conditions.
Although the scope of the prohibitions and limitations imposed by the
Glass-Steagall Act has not been fully defined by the courts or the
appropriate administrative agencies, First Bank believes that it is not
prohibited from performing the investment advisory services called for
under the New Advisory Agreement. In the event of changes in federal or
state statutes or regulations or judicial or administrative
interpretations or decisions pertaining to permissible activities of
bank holding companies and their bank and nonbank subsidiaries, First
Bank might be prohibited from continuing to act as investment adviser to
the Funds. In such event, the Board of Trustees would make other
arrangements, and it is not expected that Fund shareholders would be
adversely affected. Boulevard Bank, the current investment adviser to
the Funds, and its holding company also are subject to substantially
similar restrictions.
Voting Information
Under the 1940 Act, the shareholders of each Fund must approve the
New Advisory Agreement with respect to such Fund. Approval of the New
Advisory Agreement for each Fund requires the affirmative vote of the
holders of a majority of the outstanding voting securities of such Fund.
For this purpose, the term "majority of the outstanding voting
securities" means the lesser of (a) the vote of 67% or more of the
voting securities of the Fund present at the Special Meeting, if the
holders of more than 50% of the Fund's outstanding voting securities are
present or represented by proxy, or (b) the vote of more than 50% of the
outstanding voting securities of the Fund. Unless otherwise instructed,
the persons named as proxies will vote for approval of the New Advisory
Agreement.
If the shareholders of any Fund fail to approve the New Advisory
Agreement, the Board of Trustees will promptly consider alternative
courses of action and could request the shareholders of each such Fund
to reconsider approval of the New Advisory Agreement. Under the
provisions of the 1940 Act and the terms of the Existing Advisory
Agreement, the Existing Advisory Agreement will terminate immediately
upon the consummation of the Acquisition of Boulevard Bancorp by FBS.
If such a termination should occur before a new advisory agreement has
been approved by Fund shareholders, the Trustees have selected Boulevard
Bank to continue providing advisory services to the Funds for
compensation equal to the lesser of (a) the amounts which would be
payable to it under the Existing Advisory Agreement, or (b) the actual
out-of-pocket costs and expenses incurred by it in providing such
investment advisory services. In such event, Boulevard Bank has agreed
to provide its services in accordance with those terms, pending
shareholder approval of the New Advisory Agreement.
THE BOARD OF TRUSTEES RECOMMENDS APPROVAL OF THE NEW ADVISORY
AGREEMENT WITH FIRST BANK.
PROPOSAL NUMBER 3
RATIFICATION OR REJECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS
The 1940 Act provides that every registered investment company
shall be audited at least once each year by independent public
accountants selected by a majority of the directors of the investment
company who are not interested persons of the investment company or of
its investment adviser. The 1940 Act provides that the selection be
submitted for ratification or rejection by shareholders.
Price Waterhouse has acted as independent public accountants for
the Trust since its inception in December 1992. KPMG Peat Marwick acts
as independent public accountants for the funds which are members of the
First American Family of Funds. At the request of First Bank, in
connection with the Trust's becoming a part of the First American Family
of Funds, as described elsewhere herein, the current Board of Trustees,
including a majority of the Trustees who are not interested persons of
the Trust or of Boulevard Bank, has appointed KPMG Peat Marwick to
become the Trust's independent public accountants for the current fiscal
year. This appointment is contingent upon consummation of the
Acquisition of Boulevard Bancorp by FBS as described under "Background
of the Special Meeting" and upon shareholder approval of Proposal
Numbers 1 and 2 discussed above.
KPMG Peat Marwick has no direct or material indirect financial
interest in the Trust, Boulevard Bank, or First Bank, other than the
receipt of fees for services to the Trust and the First American Family
of Funds. Representatives of KPMG Peat Marwick are expected to be
present at the Special Meeting. Such representatives will be given the
opportunity to make a statement to shareholders if they desire to do so
and are expected to be available to respond to any questions which may
be raised at the meeting.
Price Waterhouse has not rendered any adverse or qualified
opinions, or any disclaimers of opinions, with respect to the Trust, and
the Trust has not had any disagreement with Price Waterhouse on any
matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreement, if not
resolved to the satisfaction of Price Waterhouse, would have caused it
to make a reference to the subject matter of the disagreement in
connection with its reports.
Voting Information
The affirmative vote of a majority of all series of shares
represented at the Special Meeting, voting together and not as separate
series, provided at least a quorum (more than 50% of the outstanding
shares) is represented in person or by proxy, is sufficient for the
ratification of the selection of the independent public accountants.
Unless otherwise instructed, the proxies will vote for the ratification
of the selection of KPMG Peat Marwick as the Trust's independent public
accountants.
THE BOARD OF TRUSTEES RECOMMENDS RATIFICATION OF KPMG PEAT MARWICK
AS INDEPENDENT PUBLIC ACCOUNTANTS OF THE TRUST.
ADDITIONAL ANTICIPATED CHANGES AFFECTING THE FUNDS
If shareholders of the Funds approve the proposals to be acted
upon at the Special Meeting, First Bank expects to advise the new Board
of Trustees to take several additional actions in order to bring the
Funds into the First American Family of Funds. These actions, which are
described in the remainder of this section, do not require approval by
shareholders of the Funds. Although there is no reason to believe that
the actions described below will not be taken, the new Board of Trustees
will have the ability to take other or additional actions with respect
to the matters described below or other matters if, in their judgment,
circumstances then in existence warrant such actions as being in the
best interests of the Funds and their shareholders.
Changes of Name of Trust and Funds
If the proposals to be acted upon at the Special Meeting are
approved by Fund shareholders, it is expected that the new Board of
Trustees will take action to change the name of the Trust to "First
American Mutual Funds," to delete the word "Boulevard" from the name of
each Fund, and to delete the word "Blue Chip" from the Blue Chip Growth
Fund, thus changing their respective names to Growth Fund, Strategic
Balance Fund, Managed Municipal Fund, and Managed Income Fund. These
actions would be taken in order to identify the Trust and the Funds as a
part of the First American Family of Funds.
Sales Charges
Boulevard Blue Chip Growth Fund, Boulevard Strategic Balance Fund,
Boulevard Managed Municipal Fund, and Boulevard Managed Income Fund
presently are subject to front-end sales charges of 4.0%, 4.0%, 3.0% and
3.0%, respectively, expressed as percentages of their respective
offering prices. These sales charges are subject to discounts for
certain quantity purchases, under a right of accumulation, and under
certain other circumstances described in the Funds' current
prospectuses. The front-end sales charge was waived on purchases of
shares prior to January31, 1994, by deposit or credit customers of
Boulevard Bank and its affiliates and spouses and children under 21 of
such customers. This waiver is no longer in effect. None of the Funds
carries any deferred sales load or redemption fee.
If the proposals to be acted upon at the Special Meeting are
approved by Fund shareholders, it is expected that the new Board of
Trustees will be requested to approve front-end sales charges of 4.5%
for Boulevard Blue Chip Growth Fund, 4.5% for Boulevard Strategic
Balance Fund, 2.0% for Boulevard Managed Municipal Fund, and 2.0% for
Boulevard Managed Income Fund, expressed in each case as a percentage of
the applicable offering price. These sales charges are also subject to
discounts for certain quantity purchases under a right of accumulation.
It is expected that the Funds will continue to carry no deferred sales
load or redemption fee. For additional information concerning
anticipated front-end sales charges by SEI Financial Services, see "--
Description of New Distribution Agreement; Comparison with Existing
Distribution Agreement" below.
As described below under "-- Possible Creation of Retail and
Institutional Classes of Shares," the new Board of Trustees may
determine that shares of one or more Funds shall be classified into
"Retail Class Shares" and "Institutional Class Shares." In such event,
it is anticipated that the Institutional Class Shares of such a Fund
would not be subject to a front-end sales charge.
Rule 12b-1 Plan of Distribution
Each Fund is currently subject to a "compensation-type" Rule 12b-1
Plan of Distribution (the "Existing Plan"), pursuant to which each Fund
may pay to Federated Securities Corp., the Funds' current principal
distributor ("Federated Securities"), an amount computed at an annual
rate of .25% of the applicable Fund's average daily net assets to
finance any activity which is principally intended to result in the sale
of shares subject to the Existing Plan. Such activities may include the
advertising and marketing of shares of such Fund; preparing, printing,
and distributing prospectuses and sales literature to prospective
shareholders, brokers, or administrators; and implementing and operating
the Existing Plan. Because the Existing Plan is a "compensation-type"
plan, each Fund pays its principal distributor the fee described, rather
than reimbursing the principal distributor for actual expenses incurred.
As described below under "-- Description of New Distribution Agreement;
Comparison with Existing Distribution Agreement," there has been, to
date, no accrual or payment of fees under the 12b-1 plan.
If the proposals to be acted upon at the Special Meeting are
approved by Fund shareholders, it is expected that the new Board of
Trustees will not materially change the Existing Plan, other than to
substitute SEI Financial Services Company ("SEI Financial Services"),
the expected new principal distributor for the Funds, for Federated
Securities as the principal distributor named in the Existing Plan. For
information concerning anticipated waivers of 12b-1 fees by SEI
Financial Services, see "-- Description of New Distribution Agreement;
Comparison with Existing Distribution Agreement" below. The Existing
Plan will not be amended to increase materially the amount to be spent
for distribution without the approval of Fund shareholders, which is not
being sought at the Special Meeting.
As described below under "-- Possible Creation of Retail and
Institutional Classes of Shares," the new Board of Trustees may
determine that shares of one or more Funds shall be classified into
"Retail Class Shares" and "Institutional Class Shares." In such event,
it is anticipated that the Institutional Class Shares of such a Fund
would not be subject to 12b-1 fees.
Description of New Distribution Agreement; Comparison with Existing
Distribution Agreement
If the proposals to be acted upon at the Special Meeting are
approved by Fund shareholders, it is expected that the new Board of
Trustees will be requested to approve a new distribution agreement (the
"New Distribution Agreement") between SEI Financial Services and each
Fund, to replace the current distribution agreement (the "Existing
Distribution Agreement") between Federated Securities and each Fund.
SEI Financial Services is the principal distributor for the other funds
in the First American Family of Funds and for a number of other
registered investment companies. SEI Financial Services, a wholly owned
subsidiary of SEI Corporation ("SEI"), is a Pennsylvania corporation
organized in 1981, the principal offices of which are located at 680
East Swedesford Road, Wayne, Pennsylvania 19087. SEI Financial Services
and SEI are not affiliated with First Bank or FBS.
Under the New Distribution Agreement, each Fund will appoint SEI
Financial Services to act as the principal distributor to sell and
distribute shares of such Fund. Following such appointment, shares of
the Funds will be distributed through SEI Financial Services and
securities firms, financial institutions (including, without limitation,
banks) and other industry professionals (the "Participating
Institutions") which enter into sales agreements with SEI Financial
Services to perform share distribution or shareholder support services.
FBS Investment Services, Inc., a wholly owned broker-dealer subsidiary
of First Bank, may become such a Participating Institution and receive
compensation for providing such share distribution or other services.
The New Distribution Agreement will provide that the sale of Fund shares
may be suspended without prior notice whenever in the judgment of the
applicable Fund it is in its best interest to do so, and all
subscriptions, offers, or sales of shares shall be subject to acceptance
or rejection by such Fund.
The New Distribution Agreement will provide that SEI Financial
Services will be entitled to retain the sales charge, if any, paid upon
purchase of Fund shares. See "-- Sales Charges" above. In addition,
SEI Financial Services will be entitled to receive 12b-1 fees under the
Existing Plan as described above under "-- Rule 12b-1 Plan of
Distribution." Participating Institutions may receive portions of such
sales charges and 12b-1 fees for providing share distribution and
shareholder services with respect to the Funds. As previously noted,
the sales charge was waived for certain Boulevard Bank customers and
related persons through January31, 1994, although this waiver is no
longer in effect (see "-- Sales Charges" above), and Federated
Securities has not accrued or waived any 12b-1 fees to date (see "--
Rule 12b-1 Plan of Distribution" above). Under the New Distribution
Agreement, SEI Financial Services also anticipates waiving its 12b-1
fees, at least until a separate class of shares has been created for
certain institutional investors (see "--Possible Creation of Retail and
Institutional Classes of Shares" below).
It is anticipated that the New Distribution Agreement will be
effective for one year, and thereafter for one-year terms if approved by
the Board of Trustees, including a majority of those Trustees who are
not "interested persons" within the meaning of the 1940 Act. The New
Distribution Agreement may be terminated with respect to a Fund at any
time by the vote of a majority of the disinterested Trustees, by a
majority of the outstanding voting securities of such Fund, or by SEI
Financial Services, on 60 days' written notice. The New Distribution
Agreement will automatically terminate in the event of an "assignment"
(as defined in the 1940 Act) by SEI Financial Services. The New
Distribution Agreement may be amended at any time by mutual agreement in
writing of the parties thereto, provided that such amendment is approved
by the Trustees of the Trust, including a majority of the disinterested
Trustees.
The New Distribution Agreement is expected to contain terms
substantially similar to those in the Existing Distribution Agreement,
except as follows: The New Distribution Agreement is expected to
provide that SEI Financial Services shall be indemnified by the Trust
and be without liability for any action taken or thing to be done by it
in performing its duties under such Agreement, except acts or omissions
involving willful misfeasance, bad faith, negligence, or reckless
disregard of its duties. Likewise, the Fund shall be indemnified by SEI
Financial Services and be without liability for any action taken or
thing done by SEI Financial Services in performing its duties in
contravention of the above standards. The Existing Distribution
Agreement, on the other hand, provides that Federated Securities shall
not be liable to the Trust for anything done or omitted by it, except
acts or omissions involving willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties imposed by this
Agreement. Thus, the New Distribution Agreement differs from the
Existing Distribution Agreement in that it provides for a contractual
indemnity from the distributor to the Trust. In addition, the New
Distribution Agreement makes the distributor liable for its negligence
(rather than gross negligence, as under the Existing Distribution
Agreement).
Description of New Administrative, Fund Accounting, and Shareholder
Service Agreements; Comparison with Existing Agreements
If the proposals to be acted upon at the Special Meeting are
approved by Fund shareholders, it is expected that the new Board of
Trustees will approve a new administrative services agreement and a new
fund accounting and shareholder recordkeeping agreement (collectively,
the "New Administrative Agreements") between each Fund and SEI Financial
Management Corporation ("SEI Financial Management") to replace similar
agreements (collectively, the "Existing Administrative Agreements") now
in effect between each Fund and Federated Administrative Services (with
respect to administrative services) and Federated Services Company (with
respect to fund accounting and shareholder recordkeeping services). SEI
Financial Management Corporation is a wholly owned subsidiary of SEI.
See "-- Description of New Distribution Agreement; Comparison with
Existing Distribution Agreement" above. Under the New Administrative
Agreements, SEI Financial Management will provide the Funds with certain
administrative services necessary to operate the Funds, including
specified shareholder servicing and recordkeeping services (including
transfer agency and dividend disbursing services) and certain legal and
Fund accounting services. The scope of the services called for under
the New Administrative Agreements and the Existing Administrative
Agreements is expected to be substantially similar.
It is expected that the aggregate fees payable under the New
Administrative Agreements will consist of (a) a per annum amount equal
to .20% of each Fund's average daily net assets, payable monthly,
subject to a minimum of $50,000 per annum per Fund; (b) a total of
$15.50 per annum per shareholder account (in the case of declared
dividend Funds) or of $22.50 per annum per shareholder account (in the
case of daily dividend accrual Funds), subject to a minimum monthly
transfer agency fee of $750 per Fund or class within a fund and to a
$.10 per month per closed account fee; and (c) reimbursement of
specified out-of-pocket expenses incurred in providing the specified
services. Aggregate fees payable under the Existing Administrative
Agreements have consisted of (1) a per annum amount equal to .15% of
each Fund's average daily net assets on the first $250 million of
assets, .125% on the next $250 million of assets, .10% on the next $250
million of assets, and .075% on average daily net assets in excess of
$750 million, payable monthly, subject to a minimum of $50,000 per annum
per Fund; (2) $30,000 per annum per Fund plus a per annum amount equal
to .02% of each Fund's average daily net assets from $100 million to
$250 million, .015% on assets from $250 million to $500 million, .01% on
assets from and over $500 million, plus $1,000 per month per Fund for
each class beyond the first class, subject to a flat monthly fee of
$1,000 per class with no asset charge where Federated is the only
shareholder of such class; (3) a total of $15.50 per annum per
shareholder account (in the case of declared dividend Funds) or of
$22.50 per annum per shareholder account (in the case of daily dividend
accrual Funds), subject to a minimum monthly transfer agency fee of
$1,000 per Fund or class within a fund and to a $.10 per month per
closed account fee; and (4) reimbursement of specified out-of-pocket
expenses incurred in providing the specified services.
Under both the Existing and New Administration Agreements, the
respective administrators may choose voluntarily to reimburse a portion
of their fees at any time.
It is anticipated that the New Administrative Agreements will be
terminable on 90 days' notice, whereas the Existing Administrative
Agreements are terminable on 120 days' notice.
New Custodian Agreement; Comparison with Existing Custodian Agreement
If the proposals to be acted upon at the Special Meeting are
approved by Fund shareholders, it is expected that the new Board of
Trustees will approve a new custodian agreement (the "New Custodian
Agreement") between each Fund and First Trust National Association
("First Trust"), to replace a similar agreement (the "Existing Custodian
Agreement") now in effect between each Fund and State Street Bank and
Trust Company. First Trust is a national banking association and is a
wholly owned subsidiary of FBS. See "Background of the Special
Meeting." It thus is a sister subsidiary of First Bank, the proposed
new investment adviser.
Under the New Custodian Agreement, First Trust will provide
custodian services to each Fund of a scope substantially similar to that
called for under the Existing Custodian Agreement. It is expected that
the fee payable under the New Custodian Agreement will consist of a per
annum amount equal to .03% of each Fund's average daily net assets,
payable monthly, plus reimbursement of out-of-pocket expenses incurred
in providing the specified services. Under the Existing Custodian
Agreement, State Street Bank and Trust Company is paid a one basis point
asset-based fee plus certain other transaction expenses, including wire
fees, ACH Fees, and earnings credit/debit charges. For the period
ending November30, 1993, these fees totaled approximately .03% of
average daily net assets for Boulevard Blue Chip Growth Fund and
Boulevard Managed Income Fund, .04% for Boulevard Strategic Balance
Fund, and .06% for Boulevard Managed Municipal Fund.
It is anticipated that the New Custodian Agreement will be
terminable on 90 days' notice, whereas the Existing Custodian Agreement
is terminable on 60 days' notice.
Change in Fiscal Year
The fiscal year of each Fund currently begins on December 1 and
ends on November 30. If the proposals to be acted upon at the Special
Meeting are approved by Fund shareholders, it is expected that the new
Board of Trustees will approve a change in each Fund's fiscal year to
begin on October 1 and end on September 30. This change would conform
the Funds' fiscal years to those of the other funds in the First
American Family of Funds.
Possible Creation of Retail and Institutional Classes of Shares
Several of the existing funds in the First American Family of
Funds currently offer both "Retail" and "Institutional" classes of
shares. The Institutional Class Shares of a fund may be purchased only
by banks and certain other institutions for the investment of their own
funds or funds for which they act in a fiduciary, agency or custodial
capacity, while the Retail Class Shares of such a fund may be purchased
by any investor. Retail Class Shares are subject to a front-end sales
charge and 12b-1 fees, while Institutional Class Shares are not.
If the proposals to be acted upon at the Special Meeting are
approved by Fund shareholders, the new Board of Trustees may determine
that shares of one or more of the Funds shall be classified into Retail
Class Shares and Institutional Class Shares like those of the other
First American funds described above. Similar arrangements are
contemplated under the current prospectuses for the Funds, which state
that each "Fund will not accrue or pay 12b-1 fees until a separate class
of shares has been created for certain institutional investors." Thus,
the existing Board of Trustees has, and the new Board of Trustees will
have, the ability to create new classes of shares of the Funds and to
provide for 12b-1 fees with respect to existing classes of the Funds.
The maximum level of 12b-1 fees presently authorized (.25% of average
daily net assets of each Fund) cannot be changed without shareholder
approval, which is not being sought at the Special Meeting. See "--
Rule 12b-1 Plan of Distribution" above.
As noted above, the Retail Class Shares of those funds in the
First American Family of Funds which have classified shares are subject
to a front-end sales charge, and Retail Class Shares of the Funds, if
created by the new Board of Trustees, also may be expected to be subject
to such a front-end sales charge. Shares of each of the Funds currently
are subject to a front-end sales charge. See "-- Sales Charges" above.
Possible Fund Mergers
If the proposals to be acted upon at the Special Meeting are
approved by Fund shareholders, the new Board of Trustees may determine
at some time in the future that one or more of the Funds should be
merged with one or more funds in the existing First American Family of
Funds which have similar investment objectives. Such a transaction
might take the form of a statutory merger or of a transfer of assets
from a Fund to an existing or newly-organized First American fund in
return for shares of the First American fund, followed by the
distribution of such shares to the Fund's shareholders. Such a
transaction would be intended, among other things, to realize economies
of scale in fund operation which are not available to relatively small
Funds and to reduce the expenses inherent in the operation of multiple
corporate entities.
Any such transaction would require an affirmative vote by holders
of the Funds affected, which is not being sought at the Special Meeting.
In addition, under the current composition of the boards of directors of
the other funds in the First American Family of Funds, such a
transaction could not be undertaken for three years unless the Trust or
First Bank obtained certain exemptive or no-action relief from the
Securities and Exchange Commission. As described below under "Section
15(f) of the Investment Company Act of 1940," the Trust or First Bank
may determine to seek such relief.
SECTION 15(f) OF THE INVESTMENT COMPANY ACT OF 1940
Under existing case law (including Rosenfeld v. Black, 445 F.2d
1337 (2d Cir. 1971), cert. dismissed, 409 U.S. 802 (1972)), shareholders
of an investment company (such as each of the Funds) may have certain
rights to recover amounts received when an interest in an investment
adviser is sold, to the extent that such amounts exceed the fair market
value of the interest so sold. In Rosenfeld v. Black, the Court of
Appeals discussed and applied the principle that a fiduciary office,
such as that held by an investment adviser, cannot be sold for the
personal gain of the fiduciary; the court then remanded the case to the
trial court to determine whether any portion of the amount received upon
the sale of an interest in the investment adviser there at issue
represented payment for its fiduciary office. In the proposed
Acquisition of Boulevard Bancorp by FBS, shareholders of Boulevard
Bancorp will receive shares of common stock of FBS in exchange for their
Boulevard Bancorp shares, and FBS will acquire indirect ownership of
Boulevard Bank, the current investment adviser to the Funds. Thus, it
might be argued that the principle of Rosenfeld v. Black could apply to
these circumstances, although no amount of the consideration being
received by Boulevard Bancorp shareholders is being attributed by the
parties to any value which might inhere in Boulevard Bank's advisory
relationship to the Funds.
After Rosenfeld v. Black was decided, Congress amended the 1940
Act by adding Section 15(f), a "safe harbor" provision. Section 15(f)
provides that, in connection with the sale of any interest in an
investment adviser which results in an "assignment" of an investment
advisory contract, an investment adviser of a registered investment
company (such as the Funds), or an affiliated person of such investment
adviser, may receive any amount or benefit in connection therewith if
two conditions are satisfied. The first condition is that, during the
three-year period immediately following the sale, at least 75% of the
members of the board of directors of the investment company must not be
"interested persons" (as defined in the 1940 Act) of the investment
adviser or the predecessor adviser. If the nominees to the Board of
Trustees named elsewhere herein are elected, the Trust will meet this
condition because four out of its five Trustees will not be such
"interested persons." The Funds intend to continue to meet this
condition for at least three years after the date the Acquisition is
consummated, and First Bank has undertaken to refrain from any act the
direct result of which would cause more than 25% of the members of the
Board of Trustees of the Trust to be such "interested persons" during
such three-year period; provided, in each case, that this condition and
undertaking may be disregarded in the event that the Trust and/or First
Bank receive an exemptive order or no-action relief from the Securities
and Exchange Commission permitting such action.
The second condition of Section 15(f) is that an "unfair burden"
cannot be imposed on the investment company as a result of the
transaction giving rise to the assignment of the contract or as a result
of any express or implied terms, conditions or understandings applicable
thereto. The term "unfair burden" is defined in Section 15(f) to
include any arrangement, during the two-year period after the date on
which the transaction occurs, whereby the investment adviser or any
predecessor or successor investment adviser or any interested person of
any such person receives or is entitled to receive any compensation
directly or indirectly (a) from any person in connection with the
purchase or sale of securities or other property to, from or on behalf
of such investment company, other than bona fide ordinary compensation
as principal underwriter of such company, or (b) from such company or
its security holders for other than bona fide investment advisory or
other services. Management of the Funds is not aware of any express or
implied arrangement to impose an unfair burden on the Funds as a result
of the proposed Acquisition or the transfer of advisory functions to
First Bank, and First Bank has undertaken that during the two-year
period referred to above it will take no action the direct result of
which would be to impose an unfair burden on any of the Funds. Nothing
in this undertaking will preclude First Bank from seeking, and the Board
of Trustees of the Trust from approving and recommending to
shareholders, based on circumstances existing at the time, increases in
advisory and other fees and arrangements for bona fide investment
advisory and other services. However, First Bank has no current
intention of seeking to raise such fees.
Section 15(f) contains a provision in effect permitting the
Securities and Exchange Commission to grant exemptive relief from the
75% "disinterested persons" condition described above if there is a
"substantial disparity" between the assets of an acquiring fund and an
acquired fund in a merger or acquisition of assets in which the larger
fund is the acquiring entity. The Trust and/or First Bank may seek
exemptive or no-action relief based on this provision at some time in
the future in order to permit the merger or acquisition of assets of
some or all of the Funds by existing First American funds (the current
boards of which do not satisfy the 75% "disinterested persons" condition
because two of their six members are "interested"). Any merger or asset
acquisition involving the Funds which might be proposed in the future
would be subject to approval by the shareholders of the Funds. See
"Additional Anticipated Changes Affecting the Funds -- Possible Fund
Mergers" above.
ACTUAL AND PRO FORMA FEES AND EXPENSES OF THE FUNDS
The following tables set forth (a) in the "Actual" columns, the
fees and expenses actually incurred by each Fund (in dollars and as a
percentage of average daily net assets) during the fiscal year ended
November 30, 1993, and (b) in the "Pro Forma" columns, the fees and
expenses that would have been incurred by each Fund during such period
if the proposed New Advisory Agreement described under "Proposal Number
Two -- Approval of New Investment Advisory Agreement" (including
anticipated fee waivers and reimbursements) and the anticipated service
arrangements described under "Additional Anticipated Changes Affecting
the Funds" (including anticipated fee waivers and reimbursements) had
been in effect. The following tables should not be considered a
representation of future expenses. Actual expenses incurred in the
future may be greater or less than those shown below.
Boulevard Blue Chip Growth Fund
<TABLE>
<CAPTION>
Year Ended November 30, 1993
Actual Pro Forma
As % of As % of
In Average Daily In Average Daily
Dollars Net Assets Dollars Net Assets % Change
<S> <C> <C> <C> <C> <C>
Management Fee (1) $100,976 0.37% $107,930 0.39% 0.02%
12b-1 Fees (2) 0 0.00 0 0.00 0.00
Total Other Expenses (3) 110,802 0.41 97,369 0.36 (0.05)
Total Fund Operating
Expenses (4) 211,778 0.78 205,299 0.75 (0.03)
</TABLE>
(1) During the year ended November 30, 1993, the Management Fee accrued at an
actual rate of .75% of average daily net assets, for a total of $205,299; of
this amount, $104,323 was waived. Under the New Advisory Agreement, the
Management Fee will accrue at an actual rate of .70% of average daily net
assets, but First Bank plans to waive a portion of its fees, on a voluntary
basis, such that total expenses are not expected to exceed .75% of total daily
net assets. For the year ended November30, 1993, a Management Fee of $191,612
would have accrued under the New Advisory Agreement; of this amount, $83,682
would have been waived. See "Proposal Number 2 -- Approval of New Investment
Advisory Agreement -- Current and Anticipated Fee Waivers."
(2) During the year ended November 30, 1993, the Fund did not pay or accrue
12b-1 Fees. The Fund will not accrue or pay 12b-1 Fees until a separate class
of shares has been created for certain institutional investors. The Fund can
pay up to .25% of average daily net assets as a 12b-1 Fee to the distributor.
Under the anticipated distribution agreement with SEI Financial Services, the
Fund will accrue 12b-1 Fees in an amount equal to .25% of average daily net
assets. SEI Financial plans to waive its 12b-1 Fees until a separate class of
shares has been created for certain institutional investors. See "Proposal
Number 2 -- Approval of New Investment Advisory Agreement -- Current and
Anticipated Fee Waivers" and "Additional Anticipated Changes Affecting the
Funds
-- Rule 12b-1 Plan of Distribution" and "-- Description of New Distribution
Agreement; Comparison with Existing Distribution Agreement."
(3) During the year ended November 30, 1993, actual Total Other Expenses were
$135,137, of which $24,335 was waived. For the year ended November30, 1993,
Total Other Expenses would have been $97,369 under the anticipated new Fund
service agreements without any waiver. See "Proposal Number 2 -- Approval of
New Investment Advisory Agreement -- Current and Anticipated Fee Waivers" and
"Additional Anticipated Changes Affecting the Funds -- Description of New
Administrative, Fund Accounting, and Shareholder Service Agreements; Comparison
with Existing Agreements."
(4) For the year ended November30, 1993, Total Fund Operating Expenses, absent
waivers, were $340,436, or 1.24% of average daily net assets. Under the
proposed new agreements, Total Fund Operating Expenses, absent waivers, would
have been $288,981, or 1.06% of average daily net assets.
Boulevard Strategic Balance Fund
<TABLE>
<CAPTION>
Year Ended November 30, 1993
Actual Pro Forma
As % of As % of
In Average Daily In Average Daily
Dollars Net Assets Dollars Net Assets % Change
<S> <C> <C> <C> <C> <C>
Management Fee (1) $60,243 0.25% $90,767 0.38% 0.13%
12b-1 Fees (2) 0 0.00 0 0.00 0.00
Total Other Expenses (3) 120,428 0.50 89,904 0.37 (0.13)
Total Fund Operating
Expenses (4) 180,671 0.75 180,671 0.75 0.00
</TABLE>
(1) During the year ended November 30, 1993, the Management Fee accrued at an
actual rate of .75% of average daily net assets, for a total of $180,729; of
this amount, $120,486 was waived. Under the New Advisory Agreement, the
Management Fee will accrue at an actual rate of .70% of average daily net
assets, but First Bank plans to waive a portion of its fees, on a voluntary
basis, such that total expenses are not expected to exceed .75% of total daily
net assets. For the year ended November30, 1993, a Management Fee of $168,684
would have accrued under the New Advisory Agreement; of this amount, $77,855
would have been waived. See "Proposal Number 2 -- Approval of New Investment
Advisory Agreement -- Current and Anticipated Fee Waivers."
(2) During the year ended November 30, 1993, the Fund did not pay or accrue
12b-1 Fees. The Fund will not accrue or pay 12b-1 Fees until a separate class
of shares has been created for certain institutional investors. The Fund can
pay up to .25% of average daily net assets as a 12b-1 Fee to the distributor.
Under the anticipated distribution agreement with SEI Financial Services, the
Fund will accrue 12b-1 Fees in an amount equal to .25% of average daily net
assets. SEI Financial plans to waive its 12b-1 Fees until a separate class of
shares has been created for certain institutional investors. See "Proposal
Number 2 -- Approval of New Investment Advisory Agreement -- Current and
Anticipated Fee Waivers" and "Additional Anticipated Changes Affecting the
Funds
-- Rule 12b-1 Plan of Distribution" and "-- Description of New Distribution
Agreement; Comparison with Existing Distribution Agreement."
(3) During the year ended November 30, 1993, actual Total Other Expenses were
$146,614, of which $26,186 was waived. For the year ended November30, 1993,
Total Other Expenses would have been $89,904 under the anticipated new Fund
service agreements without any waiver. See "Proposal Number 2 -- Approval of
New Investment Advisory Agreement -- Current and Anticipated Fee Waivers" and
"Additional Anticipated Changes Affecting the Funds -- Description of New
Administrative, Fund Accounting, and Shareholder Service Agreements; Comparison
with Existing Agreements."
(4) For the year ended November 30, 1993, Total Fund Operating Expenses, absent
waivers, were $327,343, or 1.36% of average daily net assets. Under the
proposed new agreements, Total Fund Operating Expenses, absent waivers, would
have been $258,588, or 1.07% of average daily net assets.
Boulevard Managed Municipal Fund
<TABLE>
<CAPTION>
Year Ended November 30, 1993
Actual Pro Forma
As % of As % of
In Average Daily In Average Daily
Dollars Net Assets Dollars Net Assets % Change
<S> <C> <C> <C> <C> <C>
Management Fee (1) $7,250 0.06% $541 0.01% (0.05%)
12b-1 Fees (2) 0 0.00 0 0.00 0.00
Total Other Expenses (3) 90,469 0.75 71,406 0.59 (0.16)
Total Fund Operating
Expenses (4) 97,719 0.81 71,947 0.60 (0.21)
</TABLE>
(1) During the year ended November 30, 1993, the Management Fee accrued at an
actual rate of .70% of average daily net assets, for a total of $83,941; of
this
amount, $76,691 was waived. Under the New Advisory Agreement, the Management
Fee will accrue at an actual rate of .70% of average daily net assets, but
First
Bank plans to waive a portion of its fees, on a voluntary basis, such that
total
expenses are not expected to exceed .60% of total daily net assets. For the
year ended November30, 1993, a Management Fee of $83,941 would have accrued
under the New Advisory Agreement; of this amount, $83,400 would have been
waived. See "Proposal Number 2 -- Approval of New Investment Advisory
Agreement
-- Current and Anticipated Fee Waivers."
(2) During the year ended November 30, 1993, the Fund did not pay or accrue
12b-1 Fees. The Fund will not accrue or pay 12b-1 Fees until a separate class
of shares has been created for certain institutional investors. The Fund can
pay up to .25% of average daily net assets as a 12b-1 Fee to the distributor.
Under the anticipated distribution agreement with SEI Financial Services, the
Fund will accrue 12b-1 Fees in an amount equal to .25% of average daily net
assets. SEI Financial plans to waive its 12b-1 Fees until a separate class of
shares has been created for certain institutional investors. See "Proposal
Number 2 -- Approval of New Investment Advisory Agreement -- Current and
Anticipated Fee Waivers" and "Additional Anticipated Changes Affecting the
Funds
-- Rule 12b-1 Plan of Distribution" and "-- Description of New Distribution
Agreement; Comparison with Existing Distribution Agreement."
(3) During the year ended November 30, 1993, actual Total Other Expenses were
$127,702, of which $37,233 was waived. For the year ended November30, 1993,
Total Other Expenses would have been $71,406 under the anticipated new Fund
service agreements without any waiver. See "Proposal Number 2 -- Approval of
New Investment Advisory Agreement -- Current and Anticipated Fee Waivers" and
"Additional Anticipated Changes Affecting the Funds -- Description of New
Administrative, Fund Accounting, and Shareholder Service Agreements; Comparison
with Existing Agreements."
(4) For the year ended November 30, 1993, Total Fund Operating Expenses, absent
waivers, were $211,643, or 1.77% of average daily net assets. Under the
proposed new agreements, Total Fund Operating Expenses, absent waivers, would
have been $155,347, or 1.30% of average daily net assets.
Boulevard Managed Income Fund
<TABLE>
<CAPTION>
Year Ended November 30, 1993
Actual Pro Forma
As % of As % of
In Average Daily In Average Daily
Dollars Net Assets Dollars Net Assets % Change
<S> <C> <C> <C> <C> <C>
Management Fee (1) $198,234 0.35% $174,091 0.31% (0.04%)
12b-1 Fees (2) 0 0.00 0 0.00 0.00
Total Other Expenses (3) 167,355 0.30 165,734 0.29 (0.01)
Total Fund Operating
Expenses (4) 365,589 0.65 339,825 0.60 (0.05)
</TABLE>
(1) During the year ended November 30, 1993, the Management Fee accrued at an
actual rate of .70% of average daily net assets, for a total of $396,467; of
this amount, $198,233 was waived. Under the New Advisory Agreement, the
Management Fee will accrue at an actual rate of .70% of average daily net
assets, but First Bank plans to waive a portion of its fees, on a voluntary
basis, such that total expenses are not expected to exceed .60% of total daily
net assets. For the year ended November30, 1993, a Management Fee of $396,467
would have accrued under the New Advisory Agreement; of this amount, $222,376
would have been waived. See "Proposal Number 2 -- Approval of New Investment
Advisory Agreement -- Current and Anticipated Fee Waivers."
(2) During the year ended November 30, 1993, the Fund did not pay or accrue
12b-1 Fees. The Fund will not accrue or pay 12b-1 Fees until a separate class
of shares has been created for certain institutional investors. The Fund can
pay up to .25% of average daily net assets as a 12b-1 Fee to the distributor.
Under the anticipated distribution agreement with SEI Financial Services, the
Fund will accrue 12b-1 Fees in an amount equal to .25% of average daily net
assets. SEI Financial plans to waive its 12b-1 Fees until a separate class of
shares has been created for certain institutional investors. See "Proposal
Number 2 -- Approval of New Investment Advisory Agreement -- Current and
Anticipated Fee Waivers" and "Additional Anticipated Changes Affecting the
Funds
-- Rule 12b-1 Plan of Distribution" and "-- Description of New Distribution
Agreement; Comparison with Existing Distribution Agreement."
(3) During the year ended November 30, 1993, actual Total Other Expenses were
$208,137, of which $40,782 was waived. For the year ended November30, 1993,
Total Other Expenses would have been $165,734 under the anticipated new Fund
service agreements without any waiver. See "Proposal Number 2 -- Approval of
New Investment Advisory Agreement -- Current and Anticipated Fee Waivers" and
"Additional Anticipated Changes Affecting the Funds -- Description of New
Administrative, Fund Accounting, and Shareholder Service Agreements; Comparison
with Existing Agreements."
(4) For the year ended November 30, 1993, Total Fund Operating Expenses, absent
waivers, were $604,604, or 1.07% of average daily net assets. Under the
proposed new agreements, Total Fund Operating Expenses, absent waivers, would
have been $562,201, or 0.99% of average daily net assets.
OTHER MATTERS
Management of the Trust does not intend to present any business at
the Special Meeting not mentioned in this Proxy Statement and currently
knows of no other business to be presented. If any other matters are
brought before the Special Meeting, the proxies will vote all proxies on
such matters in accordance with their best judgment of the best
interests of the Trust.
Annual Reports to Shareholders with respect to the Funds for the
fiscal year ended November 30, 1993, including audited financial
statements of the Funds, have previously been distributed to
shareholders. Additional copies of any Annual Report, Prospectus, or
Statement of Additional Information may be obtained by writing Boulevard
Bank at 410North Michigan Avenue, Chicago, Illinois 60611-4181, or by
telephoning 1_800_285_FUND.
INVESTMENT ADVISORY AGREEMENT
This Agreement, made this day of
, 1994, by and between First American Mutual Funds, a Massachusetts
business trust formerly known as The Boulevard Funds (the "Fund"), on
behalf of each portfolio represented by a series of shares of beneficial
interest of the Fund that adopts this Agreement (the "Portfolios") (the
Portfolios, together with the date each Portfolio 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
First Bank National Association, a national banking association
organized and existing under the laws of the United States of America
(the "Adviser").
1. The Fund on behalf of the Portfolios hereby retains
the Adviser, and the Adviser hereby agrees to act, as investment adviser
for, and to manage the investment of the assets of, the Portfolios as
set forth herein and as further requested by the Board of Trustees of
the Fund. In acting hereunder the Adviser shall be an independent
contractor and, unless otherwise expressly provided or authorized
hereunder or by the Board of Trustees of the Fund, shall have no
authority to act for or represent the Fund or any Portfolio in any way
or otherwise be an agent of the Fund or any Portfolio.
2. The Adviser, at its own expense, shall provide the
Fund with all necessary office space, personnel and facilities necessary
and incident to the performance of the Adviser's services hereunder. The
Adviser shall pay or be responsible for the payment of all compensation
to personnel of the Fund and the officers and trustees of the Fund who
are affiliated with the Adviser or any entity which controls, is
controlled by or is under common control with the Adviser.
3. The Adviser shall be responsible only for those
expenses expressly stated in paragraph 2 to be the responsibility of the
Adviser and shall not be responsible for any other expenses of the Fund
or any Portfolio including, as illustrative and without limitation, fees
and charges of any custodian (including charges as custodian and for
keeping books and records and similar services to the Fund and the
Portfolios); fees and expenses of trustees, other than trustees
described in paragraph 2; fees and expenses of independent auditors,
legal counsel, transfer agents, dividend disbursing agents, and
registrars; costs of and incident to issuance, redemption and transfer
of its shares, and distributions to shareholders (including dividend
payments and reinvestment of dividends); brokers' commissions; interest
charges; taxes and corporate fees payable to any government or
governmental body or agency (including those incurred on account of the
registration or qualification of securities issued by the Fund); dues
and other expenses incident to the Fund's membership in the Investment
Company Institute and other like associations; costs of stock
certificates, shareholder meetings, corporate reports, and reports and
notices to shareholders; and costs of printing, stationery and
bookkeeping forms. The Adviser shall be reimbursed by the Fund or the
applicable Portfolios on or before the fifteenth day of each calendar
month for all expenses paid or incurred during the preceding calendar
month by the Adviser for or on behalf of, or at the request or direction
of, the Fund or the applicable Portfolios which are not the
responsibility of the Adviser hereunder.
4. The Adviser may utilize the Fund's distributor or an
affiliate of the Adviser as a broker, including as a principal broker,
provided that the brokerage transactions and procedures are in
accordance with Rule 17e-1 under the Investment Company Act of 1940, as
amended (the "Act"), and the then effective Registration Statement of
the Fund under the Securities Act of 1933, as amended. All allocation
of portfolio transactions shall be subject to such policies and
supervision as the Fund's Board of Trustees or any committee thereof
deem appropriate and any brokerage policy set forth in the then current
Registration Statement of the Fund.
5. The Adviser shall see that there are rendered to the
Board of Trustees of the Fund such periodic and special reports as the
Board of Trustees may reasonably request, including any reports in
respect to placement of security transactions for the Portfolios.
6. If, in any fiscal year of a Portfolio, the sum of such
Portfolio's expenses (including deferred organizational expenses and
investment advisory fees, but excluding taxes, interest, brokerage fees,
payments made to the distributor which are deemed to be made pursuant to
Rule 12b-1 under the Act and, where permitted, extraordinary expenses)
exceeds the expense limitations applicable to such Portfolio imposed by
state securities administrators, as such limitations may be lowered or
raised from time to time, the Adviser shall reimburse such Portfolio in
the amount of such excess; provided, however, that such payment or
refund shall be made only out of the advisory fees paid by the Portfolio
to the Adviser during the fiscal year the payment or refund becomes due
and shall not exceed such advisory fees unless payment of such excess is
required by any applicable state securities administrator and the
Adviser agrees to be bound by any such requirement.
7. For the services provided and the expenses assumed by
the Adviser pursuant to this Agreement, each Portfolio will pay to the
Adviser as full compensation therefor a fee based on the fee schedule
set forth in Exhibit A hereto. This fee will be computed based on net
assets at the beginning of each day and will be paid to the Adviser
monthly on or before the fifteenth day of the month next succeeding the
month for which the fee is paid. The fee shall be prorated for any
fraction of a fiscal year at the commencement and termination of this
Agreement. Anything to the contrary notwithstanding, the Adviser may at
any time and from time to time waive any part or all of any fee payable
to it pursuant to this Agreement.
8. Services of the Adviser herein provided are not to be
deemed exclusive, and the Adviser shall be free to render similar
services or other services to others so long as its services hereunder
shall not be impaired thereby.
The Adviser agrees to indemnify the Fund and each Portfolio
with respect to any loss, liability, judgment, cost or penalty which the
Fund or any Portfolio may directly or indirectly suffer or incur in any
way arising out of or in connection with any breach of this Agreement by
the Adviser.
The Adviser shall be liable to the Fund and its shareholders
or former shareholders for any negligence or willful misconduct on the
part of the Adviser or any of its directors, officers, employees,
representatives or agents in connection with the responsibilities
assumed by it hereunder, provided, however, that the Adviser shall not
be liable for any investments made by the Adviser in accordance with the
explicit or implicit direction of the Board of Trustees of the Fund or
the investment objectives and policies of the Fund as set forth in the
then current Registration Statement of the Fund, and provided further
that any liability of the Adviser resulting from a breach of fiduciary
duty with respect to the receipt of compensation for services shall be
limited to the period and amount set forth in Section 36(b)(3) of the
Act.
9. It is understood that the officers, trustees, agents
and shareholders of the Fund are or may be interested in the Adviser or
the distributor of the Fund as officers, directors, agents or
shareholders and that the officers, directors, shareholders and agents
of the Adviser may be interested in the Fund otherwise than as
shareholders.
10. The effective date of this Agreement with respect to
each Portfolio shall be the date set forth on Exhibit A hereto, which
date shall not precede the date that this Agreement is approved by the
vote of the holders of at least a majority of the outstanding shares of
such Portfolio and the vote of the Board of Trustees of the Fund,
including the vote of a majority of the trustees who are not parties to
this Agreement or "interested persons" (as defined in the Act) of the
Adviser or of the Fund, cast in person at a meeting called for the
purpose of voting on such approval.
Unless sooner terminated as hereinafter provided, this
Agreement shall continue in effect with respect to each Portfolio for a
period of more than two years from the date of its execution but only as
long as such continuance is specifically approved at least annually by
(a) the Board of Trustees of the Fund or by the vote of a majority of
the outstanding shares of the applicable Portfolio and (b) the vote of a
majority of the trustees, who are not parties to this Agreement or
"interested persons" (as defined in the Act) of the Adviser or of the
Fund, cast in person at a meeting called for the purpose of voting on
such approval.
11. This Agreement may be terminated with respect to any
Portfolio at any time, without the payment of any penalty, by the Board
of Trustees of the Fund or by the vote of a majority of the outstanding
shares of such Portfolio, or by the Adviser, upon 60 days' written
notice to the other party.
This Agreement shall automatically terminate in the event of
its "assignment" (as defined in the Act), provided, however, that such
automatic termination shall be prevented in a particular case by an
order of exemption from the Securities and Exchange Commission or a
no-action letter of the staff of the Commission to the effect that such
assignment does not require termination as a statutory or regulatory
matter.
12. This Agreement may be modified by mutual consent, such
consent as to any Portfolio only to be authorized by a majority of the
trustees who are not parties to this Agreement or "interested persons"
(as defined in the Act) of the Adviser or of the Fund and the vote of a
majority of the outstanding shares of such Portfolio.
13. Wherever referred to in this Agreement, the vote or
approval of the holders of a majority of the outstanding shares of a
Portfolio shall mean the lesser of (a) the vote of 67% or more of the
shares of such Portfolio at a meeting where more than 50% of the
outstanding shares are present in person or by proxy, or (b) the vote of
more than 50% of the outstanding shares of such Portfolio.
14. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the
remainder shall not be thereby affected.
15. 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.
16. The internal law, and not the law of conflicts, of the
State of Minnesota will govern all questions concerning the
construction, validity and interpretation of this Agreement and the
performance of the obligations imposed by this Agreement.
17. This Agreement, including its exhibits, constitutes
the entire agreement between the parties concerning its subject matter
and supersedes all prior and contemporaneous agreements, representations
and understandings of the parties.
The Adviser is hereby expressly put on notice of the
limitations of liability as set forth in Article XI of the Declaration
of Trust and agrees that that the obligations pursuant to this Agreement
of a particular Portfolio and of the Fund with respect to that
particular Portfolio be limited solely to the assets of that particular
Portfolio, and Adviser shall not seek satisfaction of any such
obligation from any other Portfolio, the shareholders of any Portfolio,
the trustees, officers, employees or agents of the Fund, or any of them.
IN WITNESS WHEREOF, the Fund and the Adviser have caused
this Agreement to be executed by their duly authorized officers as of
the day and year first above written.
FIRST AMERICAN MUTUAL FUNDS
By
Its
FIRST BANK NATIONAL
ASSOCIATION
By
Its
EXHIBIT A
EFFECTIVE DATES:
Portfolio Effective Date
Blue Chip Growth Fund , 1994
Strategic Balance Fund , 1994
Managed Municipal Fund , 1994
Managed Income Fund , 1994
ADVISORY FEES:
Annual Advisory Fee
as a Percentage of
Portfolio Average Daily Net Assets Average Daily Net Assets
Blue Chip Growth Fund All .70%
Strategic Balance All .70%
Fund
Managed Municipal All .70%
Fund
Managed Income All .70%
Fund
PROXY
BOULEVARD BLUE CHIP GROWTH FUND
(A Series of The Boulevard Funds)
Federated Investors Tower, 19th Floor
Pittsburgh, Pennsylvania 15222-3779
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE
BOULEVARD FUNDS.
The undersigned hereby appoints Marjorie B. Sellers, Raymond M. Roberts,
Christina A. Spangler, Scott A. Tretter, and Jay S. Neuman, and each of them,
with power to act without the other and with the right of substitution in each,
as proxies of the undersigned and hereby authorizes each of them to represent
and to vote, as designated below, all the shares of Boulevard Blue Chip Growth
Fund (the "Fund"), a series of The Boulevard Funds (the "Trust"), held of
record by the undersigned on February 3, 1994, at the Special Meeting of
shareholders
of the Trust to be held on March 25, 1994, or any adjournments or postponements
thereof, with all powers the undersigned would possess if present in person.
All previous proxies given with respect to the Special Meeting hereby are
revoked.
THE PROXIES ARE INSTRUCTED TO VOTE AS FOLLOWS:
1. ELECTION OF TRUSTEES
FOR all nominees listed below WITHHOLD AUTHORITY to vote for
(except as marked to the contrary below) all nominees listed below
INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list
below.
Welles B. Eastman Irving D. Fish Joseph D. Strauss Virginia L. Stringer
Gae B. Veit
2. PROPOSAL TO APPROVE OR DISAPPROVE THE INVESTMENT ADVISORY AGREEMENT
between the Fund and First Bank National Association.
FOR AGAINST ABSTAIN
3. PROPOSAL TO RATIFY OR REJECT THE APPOINTMENT OF KPMG PEAT MARWICK as the
Trust's independent public accountants for the current fiscal year.
FOR AGAINST ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Special Meeting or any
adjournments or postponements thereof.
<TABLE>
<S> <C>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY
WILL BE VOTED "FOR" PROPOSALS 1 THROUGH 3 ABOVE. RECEIPT OF THE NOTICE OF
SPECIAL MEETING OF SHAREHOLDERS AND THE PROXY STATEMENT RELATING TO THE MEETING
IS ACKNOWLEDGED BY YOUR EXECUTION OF THIS PROXY.
PLEASE SIGN THIS PROXY EXACTLY AS YOUR NAME APPEARS BELOW. WHEN SHARES
ARE HELD BY JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH.
IF A CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY PRESIDENT OR OTHER
AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY
PARTNER OR OTHER AUTHORIZED PERSON.
DATED: , 1994
Signature
[SHAREHOLDER INFORMATION]
Signature if held jointly
TO SAVE FURTHER SOLICITATION EXPENSE, PLEASE MARK, SIGN, DATE AND RETURN THIS
PROXY PROMPTLY USING THE ENCLOSED POSTAGE-PREPAID ENVELOPE.
PROXY
BOULEVARD STRATEGIC BALANCE FUND
(A Series of The Boulevard Funds)
Federated Investors Tower, 19th Floor
Pittsburgh, Pennsylvania 15222-3779
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE
BOULEVARD FUNDS.
The undersigned hereby appoints Marjorie B. Sellers, Raymond M. Roberts,
Christina A. Spangler, Scott A. Tretter, and Jay S. Neuman, and each of them,
with power to act without the other and with the right of substitution in each,
as proxies of the undersigned and hereby authorizes each of them to represent
and to vote, as designated below, all the shares of Boulevard Strategic Balance
Fund (the "Fund"), a series of The Boulevard Funds (the "Trust"), held of record
by the undersigned on February 3, 1994, at the Special Meeting of shareholders
of the Trust to be held on March 25, 1994, or any adjournments or postponements
thereof, with all powers the undersigned would possess if present in person.
All previous proxies given with respect to the Special Meeting hereby are
revoked.
</TABLE>
THE PROXIES ARE INSTRUCTED TO VOTE AS FOLLOWS:
1. ELECTION OF TRUSTEES
FOR all nominees listed below WITHHOLD AUTHORITY to vote for
(except as marked to the contrary below) all nominees listed
below
INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list
below.
Welles B. Eastman Irving D. Fish Joseph D. Strauss Virginia L. Stringer
Gae B. Veit
2. PROPOSAL TO APPROVE OR DISAPPROVE THE INVESTMENT ADVISORY AGREEMENT
between the Fund and First Bank National Association.
FOR AGAINST ABSTAIN
3. PROPOSAL TO RATIFY OR REJECT THE APPOINTMENT OF KPMG PEAT MARWICK as the
Trust's independent public accountants for the current fiscal year.
FOR AGAINST ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Special Meeting or any
adjournments or postponements thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY
WILL BE VOTED "FOR" PROPOSALS 1 THROUGH 3 ABOVE. RECEIPT OF THE NOTICE OF
SPECIAL MEETING OF SHAREHOLDERS AND THE PROXY STATEMENT RELATING TO THE MEETING
IS ACKNOWLEDGED BY YOUR EXECUTION OF THIS PROXY.
PLEASE SIGN THIS PROXY EXACTLY AS YOUR NAME APPEARS BELOW. WHEN SHARES
ARE HELD BY JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH.
IF A CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY PRESIDENT OR OTHER
AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY
PARTNER OR OTHER AUTHORIZED PERSON.
DATED: , 1994
Signature
[SHAREHOLDER INFORMATION]
Signature if held jointly
TO SAVE FURTHER SOLICITATION EXPENSE, PLEASE MARK, SIGN, DATE AND RETURN THIS
PROXY PROMPTLY USING THE ENCLOSED POSTAGE-PREPAID ENVELOPE.
PROXY
BOULEVARD MANAGED MUNICIPAL FUND
(A Series of The Boulevard Funds)
Federated Investors Tower, 19th Floor
Pittsburgh, Pennsylvania 15222-3779
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE
BOULEVARD FUNDS.
<TABLE>
<S> <C>
The undersigned hereby appoints Marjorie B. Sellers, Raymond M. Roberts,
Christina A. Spangler, Scott A. Tretter, and Jay S. Neuman, and each of them,
with power to act without the other and with the right of substitution in each,
as proxies of the undersigned and hereby authorizes each of them to represent
and to vote, as designated below, all the shares of Boulevard Managed Municipal
Fund (the "Fund"), a series of The Boulevard Funds (the "Trust"), held of record
by the undersigned on February 3, 1994, at the Special Meeting of shareholders
of the Trust to be held on March 25, 1994, or any adjournments or postponements
thereof, with all powers the undersigned would possess if present in person.
All previous proxies given with respect to the Special Meeting hereby are
revoked.
</TABLE>
THE PROXIES ARE INSTRUCTED TO VOTE AS FOLLOWS:
1. ELECTION OF TRUSTEES
FOR all nominees listed below WITHHOLD AUTHORITY to vote for
(except as marked to the contrary below) all nominees listed
below
INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list
below.
Welles B. Eastman Irving D. Fish Joseph D. Strauss Virginia L. Stringer
Gae B. Veit
2. PROPOSAL TO APPROVE OR DISAPPROVE THE INVESTMENT ADVISORY AGREEMENT
between the Fund and First Bank National Association.
FOR AGAINST ABSTAIN
3. PROPOSAL TO RATIFY OR REJECT THE APPOINTMENT OF KPMG PEAT MARWICK as the
Trust's independent public accountants for the current fiscal year.
FOR AGAINST ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Special Meeting or any
adjournments or postponements thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY
WILL BE VOTED "FOR" PROPOSALS 1 THROUGH 3 ABOVE. RECEIPT OF THE NOTICE OF
SPECIAL MEETING OF SHAREHOLDERS AND THE PROXY STATEMENT RELATING TO THE MEETING
IS ACKNOWLEDGED BY YOUR EXECUTION OF THIS PROXY.
PLEASE SIGN THIS PROXY EXACTLY AS YOUR NAME APPEARS BELOW. WHEN SHARES
ARE HELD BY JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH.
IF A CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY PRESIDENT OR OTHER
AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY
PARTNER OR OTHER AUTHORIZED PERSON.
DATED: , 1994
Signature
[SHAREHOLDER INFORMATION]
Signature if held jointly
TO SAVE FURTHER SOLICITATION EXPENSE, PLEASE MARK, SIGN, DATE AND RETURN THIS
PROXY PROMPTLY USING THE ENCLOSED POSTAGE-PREPAID ENVELOPE.
PROXY
BOULEVARD MANAGED INCOME FUND
(A Series of The Boulevard Funds)
Federated Investors Tower, 19th Floor
Pittsburgh, Pennsylvania 15222-3779
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE
BOULEVARD FUNDS.
<TABLE>
<S> <C>
The undersigned hereby appoints Marjorie B. Sellers, Raymond M. Roberts,
Christina A. Spangler, Scott A. Tretter, and Jay S. Neuman, and each of them,
with power to act without the other and with the right of substitution in each,
as proxies of the undersigned and hereby authorizes each of them to represent
and to vote, as designated below, all the shares of Boulevard Managed Income
Fund (the "Fund"), a series of The Boulevard Funds (the "Trust"), held of record
by the undersigned on February 3, 1994, at the Special Meeting of shareholders
of the Trust to be held on March 25, 1994, or any adjournments or postponements
thereof, with all powers the undersigned would possess if present in person.
All previous proxies given with respect to the Special Meeting hereby are
revoked.
THE PROXIES ARE INSTRUCTED TO VOTE AS FOLLOWS:
1. ELECTION OF TRUSTEES
FOR all nominees listed below WITHHOLD AUTHORITY to vote for
(except as marked to the contrary below) all nominees listed
below
INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list
below.
Welles B. Eastman Irving D. Fish Joseph D. Strauss Virginia L. Stringer
Gae B. Veit
2. PROPOSAL TO APPROVE OR DISAPPROVE THE INVESTMENT ADVISORY AGREEMENT
between the Fund and First Bank National Association.
FOR AGAINST ABSTAIN
3. PROPOSAL TO RATIFY OR REJECT THE APPOINTMENT OF KPMG PEAT MARWICK as the
Trust's independent public accountants for the current fiscal year.
FOR AGAINST ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Special Meeting or any
adjournments or postponements thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY
WILL BE VOTED "FOR" PROPOSALS 1 THROUGH 3 ABOVE. RECEIPT OF THE NOTICE OF
SPECIAL MEETING OF SHAREHOLDERS AND THE PROXY STATEMENT RELATING TO THE MEETING
IS ACKNOWLEDGED BY YOUR EXECUTION OF THIS PROXY.
PLEASE SIGN THIS PROXY EXACTLY AS YOUR NAME APPEARS BELOW. WHEN SHARES
ARE HELD BY JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH.
IF A CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY PRESIDENT OR OTHER
AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY
PARTNER OR OTHER AUTHORIZED PERSON.
DATED: , 1994
Signature
[SHAREHOLDER INFORMATION]
Signature if held jointly
TO SAVE FURTHER SOLICITATION EXPENSE, PLEASE MARK, SIGN, DATE AND RETURN THIS
PROXY PROMPTLY USING THE ENCLOSED POSTAGE-PREPAID ENVELOPE.
</TABLE>
