As filed with the Securities and Exchange Commission on December 20, 2002
Registration No.___________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[ ] Pre-Effective Amendment No. __ [ ] Post-Effective Amendment No. ___
FIRST AMERICAN INVESTMENT FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
800 Nicollet Mall
Minneapolis, Minnesota 55402
(Address of Principal Executive Offices)
(612) 303-1606
(Registrant's Area Code and Telephone Number)
Christopher O. Petersen
U.S. Bancorp Asset Management, Inc.
800 Nicollet Mall, BC-MN-H210
Minneapolis, MN 55402-7020
(Name And Address Of Agent For Service)
Copy To:
Mark D. Perlow, Esq.
Kirkpatrick & Lockhart LLP
Four Embarcadero Center, 10th Floor
San Francisco, CA 94111
Approximate Date of Proposed Public Offering: as soon as practicable
after this Registration Statement becomes effective under the Securities Act of
1933. The title of securities being registered is common stock, par value
$0.0001 per share.
It is proposed that this filing will automatically become effective on
January 21, 2003 pursuant to Rule 488.
No filing fee is required because of Registrant's reliance on Section
24(f) of the Investment Company Act of 1940, as amended.
FIRST AMERICAN INVESTMENT FUNDS, INC.
REGISTRATION STATEMENT ON
FORM N-14
CONTENTS OF REGISTRATION STATEMENT ON FORM N-14
This Registration Statement consists of the following papers and documents:
Cover Sheet
Contents of Registration Statement on Form N-14
Documents Incorporated by Reference Herein
Letter to Shareholders
Shareholder Q&A
Notice of Special Meeting of Shareholders
Part A - Prospectus/Proxy Statement
Part B - Statement of Additional Information
Part C - Other Information
Signature Page
Exhibits
FIRST AMERICAN INVESTMENT FUNDS, INC.
REGISTRATION STATEMENT ON
FORM N-14
DOCUMENTS INCORPORATED BY REFERENCE HEREIN
The following documents are incorporated by reference into the
Prospectus/Proxy Statement and Statement of Additional Information:
1. Prospectuses, dated January 28, 2002, as supplemented May 17, 2002, for
Class A, Class B and Class C shares of Large Cap Growth Fund, Large Cap
Core Fund, and Health Sciences Fund, previously filed on EDGAR,
Accession Number 0000897101-02-000047 and 0000897101-02-000395,
respectively.
2. Prospectuses, dated January 28, 2002, as supplemented May 17, 2002, for
Class S shares of Large Cap Growth Fund, Large Cap Core Fund, and
Health Sciences Fund, previously filed on EDGAR, Accession Number
0000897101-02-000047 and 0000897101-02-000395, respectively.
3. Prospectuses, dated January 28, 2002, as supplemented May 17, 2002, for
Class Y shares of Large Cap Growth Fund, Large Cap Core Fund, and
Health Sciences Fund, previously filed on EDGAR, Accession Number
0000897101-02-000047 and 0000897101-02-000395, respectively.
4. Prospectuses, dated January 28, 2002, for Class A, Class B and Class C
shares of Mid Cap Growth Fund, Small Cap Growth Fund, Emerging Markets
Fund, Bond IMMDEXTM Fund, High Yield Bond Fund, Mid Cap Core Fund,
Small Cap Core Fund, International Fund, Fixed Income Fund and
Strategic Income Fund, previously filed on EDGAR, Accession Number
0000897101-02-000047.
5. Prospectuses, dated January 28, 2002, for Class S shares of Mid Cap
Growth Fund, Small Cap Growth Fund, Emerging Markets Fund, Bond
IMMDEXTM Fund, High Yield Bond Fund, Mid Cap Core Fund, Small Cap Core
Fund, International Fund, Fixed Income Fund and Strategic Income Fund,
previously filed on EDGAR, Accession Number 0000897101-02-000047.
6. Prospectuses, dated January 28, 2002, for Class Y shares of Mid Cap
Growth Fund, Small Cap Growth Fund, Emerging Markets Fund, Bond
IMMDEXTM Fund, High Yield Bond Fund, Mid Cap Core Fund, Small Cap Core
Fund, International Fund, Fixed Income Fund and Strategic Income Fund,
previously filed on EDGAR, Accession Number 0000897101-02-000047.
7. Supplement, dated December 12, 2002, to Class A, Class B, Class C
shares Prospectus, Class S shares Prospectus and Class Y shares
Prospectus of Bond IMMDEXTM Fund, High Yield Bond Fund, Strategic
Income Fund, Health Sciences Fund, Mid Cap Growth Fund, Small Cap
Growth Fund, Large Cap Growth Fund, Emerging Markets Fund, previously
filed on EDGAR, Accession Number 0000897101-02-000867.
8. Statement of Additional Information, dated January 28, 2002, previously
filed on EDGAR, Accession Number 0000897101-02-000047.
9. Annual Report for Stock Funds for the fiscal year ended September 30,
2002, previously filed on EDGAR, Accession Number 0001047469-02-005244.
10. Annual Report for Bond Funds for the fiscal year ended September 30,
2002, previously filed on EDGAR, Accession Number 0001047469-02-005243.
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[LOGO]
FIRST AMERICAN INVESTMENT FUNDS, INC.
800 Nicollet Mall
Minneapolis, MN 55402
January __, 2003
Dear Shareholders:
As a shareholder of Large Cap Growth Fund, Health Sciences Fund, Mid
Cap Growth Fund, Small Cap Growth Fund, Emerging Markets Fund, Bond IMMDEX(TM)
Fund, or High Yield Bond Fund (each an "Acquired Fund"), each a separate series
of First American Investment Funds, Inc. ("FAIF"), you are invited to vote on a
proposal to reorganize your Acquired Fund into another separate series of FAIF
(each an "Acquiring Fund"), as follows: Large Cap Growth Fund and Health
Sciences Fund into Large Cap Core Fund; Mid Cap Growth Fund into Mid Cap Core
Fund; Small Cap Growth Fund into Small Cap Core Fund; Emerging Markets Fund into
International Fund; Bond IMMDEX(TM) Fund into Fixed Income Fund; and High Yield
Bond Fund into Strategic Income Fund. The proposals will be voted on at a
special meeting of shareholders to be held on March 6, 2003 (the "Meeting").
Before the Meeting, I would like to ask for your vote on this important proposal
affecting your Acquired Fund, as described in the accompanying Prospectus/Proxy
Statement.
The Prospectus/Proxy Statement describes the proposed reorganization of
each Acquired Fund (each a "Reorganization"). If the proposal affecting an
Acquired Fund is approved by its shareholders, all the Acquired Fund's assets
would be acquired by its corresponding Acquiring Fund in exchange solely for
shares of the Acquiring Fund and the assumption by the Acquiring Fund of all the
Acquired Fund's liabilities. Each Acquired Fund shareholder will receive shares
of the corresponding Acquiring Fund that are of the same class, and with the
same total value, as their Acquired Fund shares. The Reorganizations are
intended to qualify for federal income tax purposes as tax-free reorganizations.
As a result, it is anticipated that shareholders will not recognize any gain or
loss in connection with the Reorganizations.
THE BOARD OF DIRECTORS OF FAIF BELIEVES THAT THE REORGANIZATIONS ARE IN
THE BEST INTERESTS OF EACH ACQUIRED FUND AND ITS SHAREHOLDERS, AND UNANIMOUSLY
RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL AFFECTING YOUR ACQUIRED FUND.
YOUR VOTE IS EXTREMELY IMPORTANT. YOU CAN VOTE QUICKLY AND EASILY BY
TOLL-FREE TELEPHONE CALL, BY THE INTERNET, BY FAX OR BY MAIL BY FOLLOWING THE
INSTRUCTIONS THAT APPEAR ON YOUR PROXY CARD, WHICH YOU WILL RECEIVE FOR EACH
ACQUIRED FUND IN WHICH YOU OWN SHARES. WHETHER OR NOT YOU EXPECT TO BE PRESENT
AT THE MEETING, PLEASE HELP THE ACQUIRED FUNDS AVOID THE COST OF A FOLLOW-UP
MAILING BY VOTING AS SOON AS POSSIBLE. IF YOU HAVE ANY QUESTIONS ABOUT THE PROXY
CARD, PLEASE CALL 1-800-677-FUND.
NOTE: You may receive more than one proxy package if you hold shares in
more than one Acquired Fund or account. You must return separate proxy cards for
separate holdings.
Thank you for taking this matter seriously and participating in this
important process.
Sincerely,
Thomas S. Schreier, Jr., President
First American Investment Funds, Inc.
2
SHAREHOLDER Q&A
Within this package you will find the following:
o Prospectus/Proxy Statement describing the proposed
reorganizations
o Current prospectuses of the Acquiring Funds
o Voting instructions
o Proxy card
o Business reply envelope
The Board of Directors of FAIF ("Board of Directors") unanimously approved the
proposed Reorganizations listed below and recommends that you vote in favor of
the Reorganization of your Acquired Fund. The following questions and answers
provide a brief overview of the proposal. The Board of Directors also encourages
you to read the full text of the enclosed Prospectus/Proxy Statement carefully.
WHAT AM I BEING ASKED TO VOTE ON?
Shareholders of each Acquired Fund are being asked to consider and approve the
proposed Reorganization of that fund into the existing Acquiring Fund set forth
below. Effective January 31, 2003, each Acquiring Fund, with the
exception of International Fund, will be renamed as indicated below.
ACQUIRING FUND NAME
ACQUIRED FUND ACQUIRING FUND (effective 1/31/03)
- ------------- -------------- -------------------
Large Cap Growth Fund -> Large Cap Core Fund Large Cap Growth
Opportunities Fund
Health Sciences Fund -> Large Cap Core Fund Large Cap Growth
Opportunities Fund
Mid Cap Growth Fund -> Mid Cap Core Fund Mid Cap Growth
Opportunities Fund
Small Cap Growth Fund -> Small Cap Core Fund Small Cap Select Fund
Emerging Markets Fund -> International Fund International Fund
Bond IMMDEX(TM) Fund -> Fixed Income Fund Core Bond Fund
High Yield Bond Fund -> Strategic Income Fund High Income Bond Fund
WHY HAS THE BOARD OF DIRECTORS RECOMMENDED THAT I VOTE IN FAVOR OF THE
REORGANIZATIONS?
The Board of Directors believes that the Reorganizations are in the best
interests of shareholders of the Acquired Funds and may provide several benefits
to shareholders, including the merger of smaller, less efficient funds into
larger, more efficient funds, which would allow U.S. Bancorp
Asset Management, Inc. (the "Advisor"), the investment advisor to each Acquired
Fund and each Acquiring Fund (each a "Fund") to focus its resources. Moreover,
by consolidating Funds and increasing Fund size, the combined Funds may achieve
the economies of scale often associated with larger funds and thereby reduce
operating expenses on a per share basis.
HOW DO THE FUNDS' INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES AND
RISKS COMPARE?
The investment objective of each Acquired Fund is identical or substantially
similar to that of its corresponding Acquiring Fund. The principal investment
strategies and risk factors of each Acquired Fund (with the exception of Health
Sciences Fund) are similar to those of its corresponding Acquiring Fund. The
investment objective, principal investment strategies and risk factors of each
Acquired Fund compared to those of its corresponding Acquiring Fund are
described in the enclosed Prospectus/Proxy Statement.
WHICH CLASS OF SHARES WILL I RECEIVE IN THE REORGANIZATION?
The share class structure for each Fund involved in the Reorganizations is
identical. Thus, you will receive the same class of shares in the
Reorganizations that you currently hold.
WHAT ARE THE TAX CONSEQUENCES OF THE REORGANIZATIONS?
A Reorganization, if approved by the affected Acquired Fund's shareholders, will
not be a taxable event for federal income tax purposes. Acquired Fund
shareholders will not realize any capital gain or loss as a result of the
proposed Reorganizations, although you may receive a distribution of ordinary
income and/or net capital gain immediately before the Reorganization of your
Acquired Fund to the extent the Fund has undistributed income and/or gain.
WHO WILL PAY FOR THE REORGANIZATIONS?
The expenses of the Reorganizations, including legal expenses, printing,
packaging, and postage, plus the cost of any supplementary solicitations, will
be borne by the Advisor.
WILL THE FUNDS' EXPENSES REMAIN THE SAME?
Each Acquiring Fund has the same or lower overall expense ratio relative to its
corresponding Acquired Fund with the exception of Bond IMMDEX(TM) Fund. If the
reorganization of Bond IMMDEX(TM) Fund into Fixed Income Fund is approved,
shareholders of Bond IMMDEX(TM) Fund will pay higher management fees and annual
fund operating expenses.
WILL I HAVE THE SAME SHAREHOLDER PRIVILEGES AFTER THE REORGANIZATIONS?
Yes. You will continue to enjoy the same shareholder privileges as a shareholder
of an Acquiring Fund as you currently have as a shareholder of an Acquired Fund.
WHAT IS THE ANTICIPATED TIMING OF THE REORGANIZATIONS?
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The Meeting to consider the proposals is scheduled to occur on March 6, 2003. If
all necessary approvals are obtained, the Reorganizations will likely take place
shortly thereafter.
WHO WILL RECEIVE THE PROXY MATERIALS?
The proxy materials are first being mailed to all persons and entities that held
shares of record in the Acquired Funds on January 6, 2003. Please note that in
some cases, record ownership of and/or voting authority over Fund shares may
reside with a fiduciary or other agent. In these cases, the fiduciary or other
agent may receive the proxy.
WHEN IS MY PROXY DUE?
We would like to receive your vote as soon as possible. You may cast your vote:
BY PHONE:
Please see the voting instructions on your proxy card. Call the 800
number listed and follow the recorded instructions.
BY FAX:
Please see the voting instructions on your proxy card. Fax your
completed proxy card to the fax number located on your proxy card.
BY THE INTERNET:
Visit http://www.proxyvote.com. Once there, enter the 12-digit control
number located on your proxy card.
BY MAIL:
Please note that you received one proxy card for each Fund you own. All
proxy cards must be marked with your vote and returned in the business
reply envelope included in this package. If you misplaced your
envelope, please mail your proxy card to:
Proxy Services
P.O. Box
Xxx, XX, #####
PLEASE READ THE FULL TEXT OF THE ENCLOSED PROSPECTUS/PROXY STATEMENT FOR FURTHER
INFORMATION. IF YOU HAVE QUESTIONS, PLEASE CALL YOUR INVESTMENT PROFESSIONAL OR
FIRST AMERICAN FUNDS AT 800-677-FUND.
3
FIRST AMERICAN INVESTMENT FUNDS, INC.
800 NICOLLET MALL
MINNEAPOLIS, MN 55402
LARGE CAP GROWTH FUND
HEALTH SCIENCES FUND
MID CAP GROWTH FUND
SMALL CAP GROWTH FUND
EMERGING MARKETS FUND
BOND IMMDEX(TM) FUND
HIGH YIELD BOND FUND
NOTICE OF
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH 6, 2003
To the Shareholders of the above funds:
NOTICE IS HEREBY GIVEN THAT a Special Meeting of Shareholders (the
"Meeting") of Large Cap Growth Fund, Health Sciences Fund, Mid Cap Growth Fund,
Small Cap Growth Fund, Emerging Markets Fund, Bond IMMDEX(TM) Fund, and High
Yield Bond Fund (each an "Acquired Fund"), each a separate series of First
American Investment Funds, Inc. ("FAIF"), a Maryland corporation, will be held
at 800 Nicollet Mall, 5th Floor, Minneapolis, Minnesota 55402, on March 6, 2003,
at 10:00 a.m., Central Time. The purpose of the Meeting is to consider and act
upon the following proposals and to transact other business that properly comes
before the Meeting or any adjournments thereof. Approval of each proposal will
be determined solely by approval of the shareholders of the Acquired Fund
affected thereby. It will not be necessary for each proposal to be approved for
any one of them to be approved.
1. FOR LARGE CAP GROWTH FUND SHAREHOLDERS ONLY. To approve a Plan
of Reorganization and Termination adopted by FAIF (the
"Reorganization Plan") insofar as it provides for (a) the
acquisition of all the assets of Large Cap Growth Fund, a
separate series of FAIF, by Large Cap Core Fund, another
separate series of FAIF, in exchange solely for shares of
Large Cap Core Fund and Large Cap Core Fund's assumption of
all the liabilities of Large Cap Growth Fund, followed by (b)
the distribution of those Large Cap Core Fund shares to Large
Cap Growth Fund's shareholders in liquidation of Large Cap
Growth Fund and (c) Large Cap Growth Fund's subsequent
termination. A vote in favor of the Reorganization Plan will
be considered a vote in favor of an amendment to FAIF's
Amended and Restated Articles of Incorporation (the
"Articles") effecting the foregoing transactions.
2. FOR HEALTH SCIENCES FUND SHAREHOLDERS ONLY. To approve the
Reorganization Plan insofar as it provides for (a) the
acquisition of all the assets of Health Sciences Fund, a
separate series of FAIF, by Large Cap Core Fund, another
separate series of FAIF, in exchange solely for shares of
Large Cap Core Fund and Large Cap Core Fund's assumption of
all the liabilities of Health Sciences Fund, followed by (b)
the distribution of those Large Cap Core Fund shares to Health
Sciences Fund's shareholders in liquidation of Health Sciences
Fund and (c) Health Sciences Fund's subsequent termination. A
vote in favor of the Reorganization Plan will be considered a
vote in favor of an amendment to the Articles effecting the
foregoing transactions.
3. FOR MID CAP GROWTH FUND SHAREHOLDERS ONLY. To approve the
Reorganization Plan insofar as it provides for (a) the
acquisition of all the assets of Mid Cap Growth Fund, a
separate series of FAIF, by Mid Cap Core Fund, another
separate series of FAIF, in exchange solely for shares of Mid
Cap Core Fund and Mid Cap Core Fund's assumption of all the
liabilities of Mid Cap Growth Fund, followed by (b) the
distribution of those Mid Cap Core Fund shares to Mid Cap
Growth Fund's shareholders in liquidation of Mid Cap Growth
Fund and (c) Mid Cap Growth Fund's subsequent termination. A
vote in favor of the Reorganization Plan will be considered a
vote in favor of an amendment to the Articles effecting the
foregoing transactions.
4. FOR SMALL CAP GROWTH FUND SHAREHOLDERS ONLY. To approve the
Reorganization Plan insofar as it provides for (a) the
acquisition of all the assets of Small Cap Growth Fund, a
separate series of FAIF, by Small Cap Core Fund, another
separate series of FAIF, in exchange solely for shares of
Small Cap Core Fund and Small Cap Core Fund's assumption of
all the liabilities of Small Cap Growth Fund, followed by (b)
the distribution of those Small Cap Core Fund shares to Small
Cap Growth Fund's shareholders in liquidation of Small Cap
Growth Fund and (c) Small Cap Growth Fund's subsequent
termination. A vote in favor of the Reorganization Plan will
be considered a vote in favor of an amendment to the Articles
effecting the foregoing transactions.
5. FOR EMERGING MARKETS FUND SHAREHOLDERS ONLY. To approve the
Reorganization Plan insofar as it provides for (a) the
acquisition of all the assets of Emerging Markets Fund, a
separate series of FAIF, by International Fund, another
separate series of FAIF, in exchange solely for shares of
International Fund and International Fund's assumption of all
the liabilities of Emerging Markets Fund, followed by (b) the
distribution of those International Fund shares to Emerging
Markets Fund's shareholders in liquidation of Emerging Markets
Fund and (c) Emerging Markets Fund's subsequent termination. A
vote in favor of the Reorganization Plan will be considered a
vote in favor of an amendment to the Articles effecting the
foregoing transactions.
6. FOR BOND IMMDEX(TM) FUND SHAREHOLDERS ONLY. To approve the
Reorganization Plan insofar as it provides for (a) the
acquisition of all the assets of Bond IMMDEX(TM) Fund, a
separate series of FAIF, by Fixed Income Fund, another
separate series of FAIF, in exchange solely for shares of
Fixed Income Fund and Fixed Income Fund's assumption of all
the liabilities of Bond IMMDEX(TM) Fund, followed by (b) the
distribution of those Fixed Income Fund
2
shares to Bond IMMDEX(TM) Fund's shareholders in liquidation
of Bond IMMDEX(TM) Fund and (c) Bond IMMDEX(TM) Fund's
subsequent termination. A vote in favor of the Reorganization
Plan will be considered a vote in favor of an amendment to the
Articles effecting the foregoing transactions.
7. FOR HIGH YIELD BOND FUND SHAREHOLDERS ONLY. To approve the
Reorganization Plan insofar as it provides for (a) the
acquisition of all the assets of High Yield Bond Fund, a
separate series of FAIF, by Strategic Income Fund, another
separate series of FAIF, in exchange solely for shares of
Strategic Income Fund and Strategic Income Fund's assumption
of all the liabilities of High Yield Bond Fund, followed by
(b) the distribution of those Strategic Income Fund shares to
High Yield Bond Fund's shareholders in liquidation of High
Yield Bond Fund and (c) High Yield Bond Fund's subsequent
termination. A vote in favor of the Reorganization Plan will
be considered a vote in favor of an amendment to the Articles
effecting the foregoing transactions.
The Board of Directors of FAIF has fixed the close of business on
January 6, 2003, as the record date for determination of shareholders of each
Fund entitled to notice of, and to vote at, the Meeting and any adjournments
thereof.
YOUR VOTE IS IMPORTANT. PLEASE RETURN YOUR PROXY CARD(S) PROMPTLY. EACH
SHAREHOLDER IS URGED TO COMPLETE, DATE AND SIGN, AND RETURN THE ENCLOSED PROXY
CARD(S) IN THE ENVELOPE PROVIDED, EVEN IF YOU PLAN TO ATTEND THE MEETING.
ALTERNATIVELY, YOU MAY VOTE VIA FAX, THE INTERNET OR TELEPHONE, AS INDICATED ON
THE PROXY CARD.
By order of the Board of Directors
James D. Alt
SECRETARY
January ___, 2003
3
FIRST AMERICAN INVESTMENT FUNDS, INC.
800 NICOLLET MALL
MINNEAPOLIS, MN 55402
(800) 677-3863
LARGE CAP GROWTH FUND
HEALTH SCIENCES FUND
MID CAP GROWTH FUND
SMALL CAP GROWTH FUND
EMERGING MARKETS FUND
BOND IMMDEX(TM) FUND
HIGH YIELD BOND FUND
PROSPECTUS/PROXY STATEMENT
JANUARY __, 2003
This Prospectus/Proxy Statement is being furnished to shareholders of
Large Cap Growth Fund, Health Sciences Fund, Mid Cap Growth Fund, Small Cap
Growth Fund, Emerging Markets Fund, Bond IMMDEX(TM) Fund and High Yield Bond
Fund (each an "Acquired Fund"), each a separate series FAIF, in connection with
the solicitation of proxies by FAIF's Board of Directors (the "Board of
Directors" or the "Board") for use at the Special Meeting of Shareholders of the
Acquired Funds (the "Meeting") to be held on March 6, 2003, at 10:00 a.m.,
Central Time, at 800 Nicollet Mall, 5th Floor, Minneapolis, Minnesota 55402, and
any adjournments thereof.
As more fully described in this Prospectus/Proxy Statement, the purpose
of the Meeting is to consider and act upon the proposed Plan of Reorganization
and Termination (the "Reorganization Plan") under the terms of which Large Cap
Core Fund, Mid Cap Core Fund, Small Cap Core Fund, International Fund, Fixed
Income Fund and Strategic Income Fund (each an "Acquiring Fund") would acquire
substantially all the assets of Large Cap Growth Fund and Health Sciences Fund,
Mid Cap Growth Fund, Small Cap Growth Fund, Emerging Markets Fund, Bond
IMMDEX(TM) Fund and High Yield Bond Fund, respectively, in exchange solely for
shares of the Acquiring Fund and the assumption by the Acquiring Fund of all the
Acquired Fund's liabilities (each such exchange, together with distribution of
the shares received on the exchange, as described in the following paragraph, is
referred to herein as a "Reorganization"). The Acquired Funds and the Acquiring
Funds are sometimes referred to herein individually as a "Fund," and the
Acquired Fund and the Acquiring Fund involved in a particular Reorganization are
sometimes referred to herein as "corresponding" Funds.
If a Reorganization is approved, shares of the Acquiring Fund involved
therein will be distributed to the shareholders of the corresponding Acquired
Fund in liquidation of the
1
Acquired Fund, which will be terminated as a series of FAIF. Each shareholder of
an Acquired Fund will be entitled to receive that number of full and fractional
shares of the corresponding Acquiring Fund of the same class that he or she held
in the Acquired Fund, with an aggregate net asset value equal to the aggregate
net asset value of the shareholder's Acquired Fund shares held as of the closing
date of the Reorganization. These transactions are being structured as tax-free
reorganizations. See "Information About the Reorganizations - Federal Income Tax
Considerations." Shareholders should consult their tax advisors to determine the
actual impact of a Reorganization in light of their individual tax
circumstances.
A vote to approve the Reorganization Plan will be considered a vote in
favor of an amendment to the Articles effecting a Reorganization. The amendment
is attached to the form of Reorganization Plan attached as Appendix A to this
Prospectus/Proxy Statement.
The Board of Directors has approved the proposed Reorganizations. You
are being asked to approve the Reorganization Plan (insofar as it relates to
your Acquired Fund(s)) pursuant to which the Reorganizations would be
accomplished. Because shareholders of the Acquired Funds are being asked to
approve transactions that will result in their holding shares of the
corresponding Acquiring Funds, this Proxy Statement also serves as a Prospectus
for the Acquiring Funds.
Each Fund is a separate diversified series (except Health Sciences
Fund, which is a non-diversified series) of FAIF, a Maryland corporation that is
registered as an open-end management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"). U.S. Bancorp Asset Management,
Inc. is the investment advisor (the "Advisor") for each of the Funds. As shown
in the table below, the investment objective of each Acquired Fund is identical
or substantially similar to that of its corresponding Acquiring Fund.
- --------------------------------------------------------------------------------
Fund Investment Objective
- --------------------------------------------------------------------------------
Large Cap Growth Fund (Acquired Fund) Long-term growth of capital.
- --------------------------------------------------------------------------------
Large Cap Core Fund (Acquiring Fund) Long-term growth of capital.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Fund Investment Objective
- --------------------------------------------------------------------------------
Health Sciences Fund (Acquired Fund) Long-term growth of capital.
- --------------------------------------------------------------------------------
Large Cap Core Fund (Acquiring Fund) Long-term growth of capital.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Fund Investment Objective
- --------------------------------------------------------------------------------
Mid Cap Growth Fund (Acquired Fund) Growth of capital.
- --------------------------------------------------------------------------------
Mid Cap Core Fund (Acquiring Fund) Capital appreciation.
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
Fund Investment Objective
- --------------------------------------------------------------------------------
Small Cap Growth Fund (Acquired Fund) Growth of capital.
- --------------------------------------------------------------------------------
Small Cap Core Fund (Acquiring Fund) Capital Appreciation.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Fund Investment Objective
- --------------------------------------------------------------------------------
Emerging Markets Fund (Acquired Fund) Long-term growth of capital.
- --------------------------------------------------------------------------------
International Fund (Acquiring Fund) Long-term growth of capital.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Fund Investment Objective
- --------------------------------------------------------------------------------
Bond IMMDEX(TM) Fund (Acquired Fund) High current income consistent with
limited risk to capital.
- --------------------------------------------------------------------------------
Fixed Income Fund (Acquiring Fund) High current income consistent with
limited risk to capital.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Fund Investment Objective
- --------------------------------------------------------------------------------
High Yield Bond Fund (Acquired Fund) High level of current income.
- --------------------------------------------------------------------------------
Strategic Income Fund (Acquiring Fund) High level of current income.
- --------------------------------------------------------------------------------
This Prospectus/Proxy Statement explains concisely the information
about the Acquiring Fund that is acquiring the assets of your Acquired Fund that
you should know before voting on the Reorganization. Please read it carefully
and keep it for future reference. Additional information concerning the Funds
and the Reorganizations is contained in the documents described below, all of
which have been filed with the Securities and Exchange Commission ("SEC"):
o Prospectuses relating to the designated share classes of each
Fund, dated January 28, 2002, including any supplements.
o Annual Report relating to each Fund for the fiscal year ended
September 30, 2002.
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o Statement of Additional Information relating to each Fund
("SAI"), dated January 28, 2002, including any supplements.
o Statement of Additional Information, dated January ___, 2003,
which relates to this Prospectus/Proxy Statement and the
Reorganizations ("Reorganization SAI").
The Funds' prospectuses and SAI and the Reorganization SAI are
incorporated into this Prospectus/Proxy Statement by this reference. (This means
that information therein is legally considered to be part of this
Prospectus/Proxy Statement.)
This Prospectus/Proxy Statement is accompanied by a copy of each
Acquiring Fund's current prospectus (including any supplements). Appendix B to
this Prospectus/Proxy Statement contains excerpts from the Acquiring Funds'
Annual Report, dated September 30, 2002, setting forth the factors that
materially affected each Acquiring Fund's performance during the fiscal year
then ended. For a free copy of an Acquired Fund's prospectus, the Funds' SAI or
Annual Report, or the Reorganization SAI, please call (800) 677-3863 or write to
First American Investment Funds, Inc., 800 Nicollet Mall, Minneapolis, MN 55402.
You can also obtain copies of any of these documents without charge on the EDGAR
database on the SEC's Internet site at http://www.sec.gov. Copies are available
for a fee by electronic request at the following e-mail address:
publicinfo@sec.gov, or from the Public Reference Branch, Office of Consumer
Affairs and Information Services, Securities and Exchange Commission,
Washington, D.C. 20549.
THE SHARES OFFERED BY THIS PROSPECTUS/PROXY STATEMENT ARE NOT DEPOSITS
OR OBLIGATIONS OF ANY BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK, AND ARE
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE
BOARD, OR ANY OTHER GOVERNMENT AGENCY. INVESTMENT IN THESE SHARES INVOLVES
INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
THE ACQUIRING FUNDS' SHARES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS/PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
4
TABLE OF CONTENTS
PAGE
SYNOPSIS.....................................................................7
The Proposed Reorganizations...............................................7
Comparison of Fees.........................................................8
Examples of Fund Expenses.................................................19
Comparison of Investment Objectives and Principal Investment Strategies...27
Additional Investment Strategies..........................................42
Performance Comparison of the Funds.......................................43
Additional Performance Information........................................56
Form of Organization......................................................56
Investment Advisory Services..............................................56
Operations of the Acquiring Funds Following the Reorganizations...........58
Federal Income Tax Consequences of the Reorganizations....................58
PRINCIPAL RISK FACTORS......................................................58
COMPARISION OF DISTRIBUTION POLICIES AND PURCHASE, EXCHANGE AND
REDEMPTION PROCEDURES.......................................................67
Distribution of Shares....................................................67
Purchase and Redemption Procedures........................................69
Exchange Privileges.......................................................70
Dividends and Distributions...............................................70
INFORMATION ABOUT THE REORGANIZATIONS.......................................70
Plan of Reorganization and Termination....................................70
Reasons for the Reorganizations...........................................72
Description of Securities to be Issued....................................73
Federal Income Tax Considerations.........................................74
Capitalization............................................................75
VOTING INFORMATION..........................................................83
Outstanding Shares........................................................85
Control Persons and Principal Holders of Securities.......................86
ADDITIONAL INFORMATION ABOUT THE FUND.......................................87
MISCELLANEOUS...............................................................87
OTHER BUSINESS..............................................................87
BROKER-DEALERS AND VOTING TRUSTEES AND THEIR
NOMINEES....................................................................88
BOARD RECOMMENDATION........................................................88
APPENDIX A Form of Plan of Reorganization and Termination..................A-1
APPENDIX B Management Discussion of Fund Performance.......................B-1
5
APPENDIX C Financial Highlights............................................C-1
6
SYNOPSIS
The following is a summary of certain information contained elsewhere
in this Prospectus/Proxy Statement, the Funds' prospectuses, and the
Reorganization Plan (the form of which is attached as Appendix A), which are
incorporated herein by this reference. This summary may not contain all of the
information that is important to you. Shareholders should read the entire
Prospectus/Proxy Statement for more complete information.
THE PROPOSED REORGANIZATIONS
The Board of Directors considered and approved the Reorganizations at a
meeting of the Board held on December 3-4, 2002. The Reorganizations would
combine each Acquired Fund into a corresponding Acquiring Fund. The
Reorganizations are proposed to be accomplished pursuant to the Reorganization
Plan, which provides for the acquisition of all the assets of each Acquired Fund
by a corresponding Acquiring Fund, in exchange solely for shares of that
Acquiring Fund and the assumption by that Acquiring Fund of all the Acquired
Fund's liabilities. Approval of each Reorganization will be determined solely by
a vote of the majority of outstanding shares of the Acquired Fund involved. It
will not be necessary for each Reorganization to be approved for any one of them
to take place.
If a Reorganization is approved, the Acquired Fund involved therein
will cease to exist and the shareholders of the Acquired Fund will become
shareholders of the Acquiring Fund listed opposite that Acquired Fund's name in
the table below. You will receive shares of the Acquiring Fund that are of the
same class, and with the same total value, as the Acquired Fund shares you hold
as of the closing date of the Reorganization. In addition, effective January 31,
2003, each Acquiring Fund, with the exception of International Fund, will be
renamed as indicated below.
ACQUIRING FUND NAME
ACQUIRED FUND ACQUIRING FUND (effective 1/31/03)
- ------------- -------------- -------------------
Large Cap Growth Fund -> Large Cap Core Fund Large Cap Growth
Opportunities Fund
Health Sciences Fund -> Large Cap Core Fund Large Cap Growth
Opportunities Fund
Mid Cap Growth Fund -> Mid Cap Core Fund Mid Cap Growth Opportunities
Fund
Small Cap Growth Fund -> Small Cap Core Fund Small Cap Select Fund
Emerging Markets Fund -> International Fund International Fund
Bond IMMDEX(TM) Fund -> Fixed Income Fund Core Bond Fund
High Yield Bond Fund -> Strategic Income Fund High Income Bond Fund
7
The investment objective of each Acquired Fund is identical or
substantially similar to that of its corresponding Acquiring Fund. The principal
investment strategies and principal risk factors of each Acquired Fund (with the
exception of Health Sciences Fund) are similar to those of its corresponding
Acquiring Fund. For more complete information regarding the investment
objectives, principal investment strategies and principal risk factors of each
Acquired Fund compared with those of the Acquiring Fund with which it will be
combined, please refer to the "Comparison of Investment Objectives and Principal
Investment Strategies" and "Principal Risk Factors" sections below.
Each Fund currently offers five classes of shares -- Classes A, B, C, S
and Y. The Class A, B, C, S and Y shares of each Acquired Fund have identical
characteristics to the Class A, B, C, S and Y shares, respectively, of the
corresponding Acquiring Fund. The Reorganizations will not affect your right to
purchase and redeem shares, to exchange among other First American Funds and to
receive dividends and other distributions. No sales charges will be imposed on
the issuance of each Acquiring Fund's shares as a result of the Reorganizations.
For more information about the characteristics of Class A, B, C, S and Y shares
of the Funds, see the "Comparison of Distribution Policies and Purchase,
Exchange and Redemption Procedures" section below.
As described more fully below under "Information about the
Reorganizations - Reasons for the Reorganizations," the Board of Directors,
including the directors who are not "interested persons," as such term is
defined in the 1940 Act (the "Independent Directors"), have concluded that the
Reorganizations are in the best interests of the shareholders of the Acquired
Funds and that the interests of each Acquired Fund's existing shareholders will
not be diluted as a result of the transactions contemplated by the
Reorganizations. Therefore, the Board of Directors has approved the
Reorganizations and has submitted the Reorganization Plan for approval by each
Acquired Fund's shareholders. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
YOU VOTE "FOR" THE REORGANIZATION OF YOUR ACQUIRED FUND.
COMPARISON OF FEES
The following tables allow you to compare the various fees and expenses
that you may pay for buying and holding Class A, B, C, S and Y shares of each
Acquired Fund and the corresponding Acquiring Fund.
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Shareholders pay the following fees directly when they buy or sell
shares. The following table shows the shareholder fees paid by shareholders of
Large Cap Growth Fund, Health Sciences Fund, Mid Cap Growth Fund, Small Cap
Growth Fund, Emerging Markets Fund, Large Cap Core Fund, Mid Cap Core Fund,
Small Cap Core Fund and International Fund (the "Equity Funds"). As reflected in
the table, the shareholder fees for each Fund that is an Equity Fund, as well as
the shareholder fees for the Pro Forma Combined Funds, are identical.
8
ALL EQUITY FUNDS AND PRO FORMA COMBINED FUNDS
- -------------------------------------------------------------------------------------------------------------
SHAREHOLDER FEES Class A Class B Class C Class S Class Y
- -------------------------------------------------------------------------------------------------------------
Maximum Sales Charge (Load) 5.50% 5.00% 2.00% None None
Maximum Sales Charge (Load) imposed on purchases 5.50%(1) 0.00% 1.00% None None
(as a % of offering price)
Maximum Deferred Sales Charge (Load) 0.00%(2) 5.00% 1.00% None None
(as a % of original purchase price or redemption
proceeds, whichever is less)
- -------------------------------------------------------------------------------------------------------------
Annual Maintenance Fee(3) $ 25 $ 25 $ 25 None None
only charged to accounts with balances below $500
- -------------------------------------------------------------------------------------------------------------
(1)Certain investors may qualify for reduced sales charges. Generally, Class A
share investments will qualify for a reduced sales charge if the amount of
the purchase is from $50,000 to $999,999, and the sales charge will be
eliminated if the purchase is $1 million or more.
(2)Class A share investments of $1 million or more on which no front-end sales
charge is paid may be subject to a 1% contingent deferred sales charge if
they are sold within 18 months of purchase.
(3)Each Fund reserves the right to charge your account an annual maintenance
fee of $25 if your balance falls below $500 as a result of selling or
exchanging shares.
The following table shows the shareholder fees paid by shareholders of
Bond IMMDEX(TM) Fund, High Yield Bond Fund, Fixed Income Fund and Strategic
Income Fund (the "Income Funds"). As reflected in the table, the shareholder
fees for each Fund that is an Income Fund, as well as the shareholder fees for
the Pro Forma Combined Funds, are identical.
ALL INCOME FUNDS AND PRO FORMA COMBINED FUNDS
- -------------------------------------------------------------------------------------------------------------
SHAREHOLDER FEES Class A Class B Class C Class S Class Y
- -------------------------------------------------------------------------------------------------------------
Maximum Sales Charge (Load) 4.25% 5.00% 2.00% None None
Maximum Sales Charge (Load) imposed on purchases 4.25%(1) 0.00% 1.00% None None
(as a % of offering price)
Maximum Deferred Sales Charge (Load) 0.00%(2) 5.00% 1.00% None None
(as a % of original purchase price or redemption
proceeds, whichever is less)
- -------------------------------------------------------------------------------------------------------------
Annual Maintenance Fee(3) $ 25 $ 25 $ 25 None None
only charged to accounts with balances below $500
- -------------------------------------------------------------------------------------------------------------
(1)Certain investors may qualify for reduced sales charges. Generally, Class A
share investments will qualify for a reduced sales charge if the amount of
the purchase is from $50,000 to $999,999, and the sales charge will be
eliminated if the purchase is $1 million or more.
(2)Class A share investments of $1 million or more on which no front-end sales
charge is paid may be subject to a 1% contingent deferred sales charge if
they are sold within 18 months of purchase.
(3)Each Fund reserves the right to charge your account an annual maintenance fee
of $25 if your balance falls below $500 as a result of selling or exchanging
shares.
The shareholder fees set forth in the tables above will not be affected
by the Reorganizations. Shareholders will not pay any initial or deferred sales
charge in connection with the Reorganizations. If the Reorganization affecting
your Acquired Fund is approved, its shareholders will continue to be subject to
the same shareholder fees that are currently in place for that Fund.
9
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
The tables below compare the annual fund operating expenses as a
percentage of average daily net assets for each Fund for the fiscal year ended
September 30, 2002, and PRO FORMA expenses, based on the annual fund operating
expenses for the Acquiring Fund's shares. The "Pro Forma Combined Fund" column
in each table below shows you what the fees and expenses are estimated to be
assuming the Reorganizations are approved. Shareholders pay the following fees
and expenses when they hold shares. These fees are paid indirectly since they
are deducted from Fund assets. The expense information in the tables below has
been restated to reflect a decrease in expenses that is expected to occur during
the current fiscal year.
10
LARGE CAP GROWTH FUND, LARGE CAP CORE FUND
AND PRO FORMA COMBINED FUND
- --------------------------------------------------------------------------------
LARGE CAP LARGE CAP PRO FORMA
ANNUAL FUND GROWTH CORE COMBINED
OPERATING EXPENSES FUND FUND FUND
- --------------------------------------------------------------------------------
MANAGEMENT FEES
Class A 0.65% 0.65% 0.65%
Class B 0.65% 0.65% 0.65%
Class C 0.65% 0.65% 0.65%
Class S 0.65% 0.65% 0.65%
Class Y 0.65% 0.65% 0.65%
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE (12B-1) FEES
Class A 0.25% 0.25% 0.25%
Class B 1.00% 1.00% 1.00%
Class C 1.00% 1.00% 1.00%
Class S None None None
Class Y None None None
- --------------------------------------------------------------------------------
OTHER EXPENSES
Class A 0.31% 0.31% 0.31%
Class B 0.31% 0.31% 0.31%
Class C 0.31% 0.31% 0.31%
Class S(1) 0.56% 0.56% 0.56%
Class Y 0.31% 0.31% 0.31%
- --------------------------------------------------------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES
Class A 1.21%(2) 1.21%(3) 1.21%(4)
Class B 1.96%(2) 1.96%(3) 1.96%(4)
Class C 1.96%(2) 1.96%(3) 1.96%(4)
Class S 1.21%(2) 1.21%(3) 1.21%(4)
Class Y 0.96%(2) 0.96%(3) 0.96%(4)
- --------------------------------------------------------------------------------
(1)"Other Expenses" of Class S shares include a 0.25% shareholder servicing fee.
(2)The Advisor has agreed to waive fees and reimburse other fund expenses so
that Total Annual Fund Operating Expenses do not exceed 1.15%, 1.90%, 1.90%,
1.15% and 0.90%, respectively, for Class A, Class B, Class C, Class S and
Class Y shares of Large Cap Growth Fund. These fee waivers and expense
reimbursements may be discontinued or modified at any time by the Advisor in
its discretion.
(3)The Advisor has agreed to waive fees and reimburse other fund expenses so
that Total Annual Fund Operating Expenses do not exceed 1.15%, 1.90%, 1.90%,
1.15% and 0.90%, respectively, for Class A, Class B, Class C, Class S and
Class Y shares of Large Cap Core Fund. These fee waivers and expense
reimbursements may be discontinued or modified at any time by the Advisor in
its discretion.
(4)The Advisor has agreed to waive fees and reimburse other fund expenses so
that Total Annual Fund Operating Expenses do not exceed 1.15%, 1.90%, 1.90%,
1.15% and 0.90%, respectively, for Class A, Class B, Class C, Class S and
Class Y shares of the Combined Fund. These fee waivers and expense
reimbursements may be discontinued or modified at any time by the Advisor in
its discretion.
11
HEALTH SCIENCES FUND, LARGE CAP CORE FUND
AND PRO FORMA COMBINED FUND
- --------------------------------------------------------------------------------
HEALTH LARGE CAP PRO FORMA
ANNUAL FUND SCIENCES CORE COMBINED
OPERATING EXPENSES FUND FUND FUND
- --------------------------------------------------------------------------------
MANAGEMENT FEES
Class A 0.70% 0.65% 0.65%
Class B 0.70% 0.65% 0.65%
Class C 0.70% 0.65% 0.65%
Class S 0.70% 0.65% 0.65%
Class Y 0.70% 0.65% 0.65%
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE (12B-1) FEES
Class A 0.25% 0.25% 0.25%
Class B 1.00% 1.00% 1.00%
Class C 1.00% 1.00% 1.00%
Class S None None None
Class Y None None None
- --------------------------------------------------------------------------------
OTHER EXPENSES
Class A 0.49% 0.31% 0.31%
Class B 0.49% 0.31% 0.31%
Class C 0.49% 0.31% 0.31%
Class S(1) 0.74% 0.56% 0.56%
Class Y 0.49% 0.31% 0.31%
- --------------------------------------------------------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES
Class A 1.44%(2) 1.21%(3) 1.21%(4)
Class B 2.19%(2) 1.96%(3) 1.96%(4)
Class C 2.19%(2) 1.96%(3) 1.96%(4)
Class S 1.44%(2) 1.21%(3) 1.21%(4)
Class Y 1.19%(2) 0.96%(3) 0.96%(4)
- --------------------------------------------------------------------------------
(1)"Other Expenses" of Class S shares include a 0.25% shareholder servicing fee.
(2)The Advisor has agreed to waive fees and reimburse other fund expenses so
that Total Annual Fund Operating Expenses do not exceed 1.23%, 1.98%, 1.98%,
1.23% and 0.98%, respectively, for Class A, Class B, Class C, Class S and
Class Y shares of Health Sciences Fund. These fee waivers and expense
reimbursements may be discontinued or modified at any time by the Advisor in
its discretion.
(3)The Advisor has agreed to waive fees and reimburse other fund expenses so
that Total Annual Fund Operating Expenses do not exceed 1.15%, 1.90%, 1.90%,
1.15% and 0.90%, respectively, for Class A, Class B, Class C, Class S and
Class Y shares of Large Cap Core Fund. These fee waivers and expense
reimbursements may be discontinued or modified at any time by the Advisor in
its discretion.
(4)The Advisor has agreed to waive fees and reimburse other fund expenses so
that Total Annual Fund Operating Expenses do not exceed 1.15%, 1.90%, 1.90%,
1.15% and 0.90%, respectively, for Class A, Class B, Class C, Class S and
Class Y shares of the Combined Fund. These fee waivers and expense
reimbursements may be discontinued or modified at any time by the Advisor in
its discretion.
12
MID CAP GROWTH FUND, MID CAP CORE FUND
AND PRO FORMA COMBINED FUND
- --------------------------------------------------------------------------------
MID CAP MID CAP PRO FORMA
ANNUAL FUND GROWTH CORE COMBINED
OPERATING EXPENSES FUND FUND FUND
- --------------------------------------------------------------------------------
MANAGEMENT FEES
Class A 0.70% 0.70% 0.70%
Class B 0.70% 0.70% 0.70%
Class C 0.70% 0.70% 0.70%
Class S 0.70% 0.70% 0.70%
Class Y 0.70% 0.70% 0.70%
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE (12B-1) FEES
Class A 0.25% 0.25% 0.25%
Class B 1.00% 1.00% 1.00%
Class C 1.00% 1.00% 1.00%
Class S None None None
Class Y None None None
- --------------------------------------------------------------------------------
OTHER EXPENSES
Class A 0.32% 0.31% 0.31%
Class B 0.32% 0.31% 0.31%
Class C 0.32% 0.31% 0.31%
Class S(1) 0.57% 0.56% 0.56%
Class Y 0.32% 0.31% 0.31%
- --------------------------------------------------------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES(2)
Class A 1.27% 1.26% 1.26%
Class B 2.02% 2.01% 2.01%
Class C 2.02% 2.01% 2.01%
Class S 1.27% 1.26% 1.26%
Class Y 1.02% 1.01% 1.01%
- --------------------------------------------------------------------------------
(1)"Other Expenses" of Class S shares include a 0.25% shareholder servicing fee.
(2)The Advisor has agreed to waive fees and reimburse other fund expenses so
that Total Annual Fund Operating Expenses do not exceed 1.20%, 1.95%, 1.95%,
1.20% and 0.95%, respectively, for Class A, Class B, Class C, Class S and
Class Y shares of Mid Cap Growth Fund and Mid Cap Core Fund. After the
Reorganization, the Combined Fund will continue to be subject to these fee
waivers and expense reimbursements. These fee waivers and expense
reimbursements may be discontinued or modified at any time by the Advisor in
its discretion.
13
SMALL CAP GROWTH FUND, SMALL CAP CORE FUND
AND PRO FORMA COMBINED FUND
- --------------------------------------------------------------------------------
SMALL CAP SMALL CAP PRO FORMA
ANNUAL FUND GROWTH CORE COMBINED
OPERATING EXPENSES FUND FUND FUND
- --------------------------------------------------------------------------------
MANAGEMENT FEES
Class A 0.70% 0.70% 0.70%
Class B 0.70% 0.70% 0.70%
Class C 0.70% 0.70% 0.70%
Class S 0.70% 0.70% 0.70%
Class Y 0.70% 0.70% 0.70%
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE (12B-1) FEES
Class A 0.25% 0.25% 0.25%
Class B 1.00% 1.00% 1.00%
Class C 1.00% 1.00% 1.00%
Class S None None None
Class Y None None None
- --------------------------------------------------------------------------------
OTHER EXPENSES
Class A 0.32% 0.31% 0.31%
Class B 0.32% 0.31% 0.31%
Class C 0.32% 0.31% 0.31%
Class S(1) 0.57% 0.56% 0.56%
Class Y 0.32% 0.31% 0.31%
- --------------------------------------------------------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES
Class A 1.27%(2) 1.26%(3) 1.26%(4)
Class B 2.02%(2) 2.01%(3) 2.01%(4)
Class C 2.02%(2) 2.01%(3) 2.01%(4)
Class S 1.27%(2) 1.26%(3) 1.26%(4)
Class Y 1.02%(2) 1.01%(3) 1.01%(4)
- --------------------------------------------------------------------------------
(1)"Other Expenses" of Class S shares include a 0.25% shareholder servicing fee.
(2)The Advisor has agreed to waive fees and reimburse other fund expenses so
that Total Annual Fund Operating Expenses do not exceed 1.23%, 1.98%, 1.98%,
1.23% and 0.98%, respectively, for Class A, Class B, Class C, Class S and
Class Y shares of Small Cap Growth Fund. These fee waivers and expense
reimbursements may be discontinued or modified at any time by the Advisor in
its discretion.
(3)The Advisor has agreed to waive fees and reimburse other fund expenses so
that Total Annual Fund Operating Expenses do not exceed 1.21%, 1.96%, 1.96%,
1.21% and 0.96%, respectively, for Class A, Class B, Class C, Class S and
Class Y shares of Small Cap Core Fund. These fee waivers and expense
reimbursements may be discontinued or modified at any time by the Advisor in
its discretion.
(4)The Advisor has agreed to waive fees and reimburse other fund expenses so
that Total Annual Fund Operating Expenses do not exceed 1.21%, 1.96%, 1.96%,
1.21% and 0.96%, respectively, for Class A, Class B, Class C, Class S and
Class Y shares of the Combined Fund. These fee waivers and expense
reimbursements may be discontinued or modified at any time by the Advisor in
its discretion.
14
EMERGING MARKETS FUND, INTERNATIONAL FUND
AND PRO FORMA COMBINED FUND
- --------------------------------------------------------------------------------
EMERGING PRO FORMA
ANNUAL FUND MARKETS INTERNATIONAL COMBINED
OPERATING EXPENSES FUND FUND FUND
- --------------------------------------------------------------------------------
MANAGEMENT FEES
Class A 1.15% 1.10% 1.10%
Class B 1.15% 1.10% 1.10%
Class C 1.15% 1.10% 1.10%
Class S 1.15% 1.10% 1.10%
Class Y 1.15% 1.10% 1.10%
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE (12B-1) FEES
Class A 0.25% 0.25% 0.25%
Class B 1.00% 1.00% 1.00%
Class C 1.00% 1.00% 1.00%
Class S None None None
Class Y None None None
- --------------------------------------------------------------------------------
OTHER EXPENSES
Class A 0.39% 0.31% 0.31%
Class B 0.39% 0.31% 0.31%
Class C 0.39% 0.31% 0.31%
Class S(1) 0.64% 0.56% 0.56%
Class Y 0.39% 0.31% 0.31%
- --------------------------------------------------------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES
Class A 1.79%(2) 1.66%(3) 1.66%(4)
Class B 2.54%(2) 2.41%(3) 2.41%(4)
Class C 2.54%(2) 2.41%(3) 2.41%(4)
Class S 1.79%(2) 1.66%(3) 1.66%(4)
Class Y 1.54%(2) 1.41%(3) 1.41%(4)
- --------------------------------------------------------------------------------
(1)"Other Expenses" of Class S shares include a 0.25% shareholder servicing fee.
(2)The Advisor has agreed to waive fees and reimburse other fund expenses so
that Total Annual Fund Operating Expenses do not exceed 1.70%, 2.45%, 2.45%,
1.70% and 1.45%, respectively, for Class A, Class B, Class C, Class S and
Class Y shares of Emerging Markets Fund. These fee waivers and expense
reimbursements may be discontinued or modified at any time by the Advisor in
its discretion.
(3)The Advisor has agreed to waive fees and reimburse other fund expenses so
that Total Annual Fund Operating Expenses do not exceed 1.60%, 2.35%, 2.35%,
1.60% and 1.35%, respectively, for Class A, Class B, Class C, Class S and
Class Y shares of International Fund. These fee waivers and expense
reimbursements may be discontinued or modified at any time by the Advisor in
its discretion.
(4)The Advisor has agreed to waive fees and reimburse other fund expenses so
that Total Annual Fund Operating Expenses do not exceed 1.60%, 2.35%, 2.35%,
1.60% and 1.35%, respectively, for Class A, Class B, Class C, Class S and
Class Y shares of the Combined Fund. These fee waivers and expense
reimbursements may be discontinued or modified at any time by the Advisor in
its discretion.
15
BOND IMMDEX(TM) FUND, FIXED INCOME FUND
AND PRO FORMA COMBINED FUND
- --------------------------------------------------------------------------------
BOND FIXED PRO FORMA
ANNUAL FUND IMMDEX(TM) INCOME COMBINED
OPERATING EXPENSES FUND FUND FUND
- --------------------------------------------------------------------------------
MANAGEMENT FEES(1)
Class A 0.30% 0.50% 0.50%
Class B 0.30% 0.50% 0.50%
Class C 0.30% 0.50% 0.50%
Class S 0.30% 0.50% 0.50%
Class Y 0.30% 0.50% 0.50%
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE (12B-1) FEES
Class A 0.25% 0.25% 0.25%
Class B 1.00% 1.00% 1.00%
Class C 1.00% 1.00% 1.00%
Class S None None None
Class Y None None None
- --------------------------------------------------------------------------------
OTHER EXPENSES
Class A 0.31% 0.31% 0.31%
Class B 0.31% 0.31% 0.31%
Class C 0.31% 0.31% 0.31%
Class S(2) 0.56% 0.56% 0.56%
Class Y 0.31% 0.31% 0.31%
- --------------------------------------------------------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES
Class A 0.86%(3) 1.06%(4) 1.06%(5)
Class B 1.61%(3) 1.81%(4) 1.81%(5)
Class C 1.61%(3) 1.81%(4) 1.81%(5)
Class S 0.86%(3) 1.06%(4) 1.06%(5)
Class Y 0.61%(3) 0.81%(4) 0.81%(5)
- --------------------------------------------------------------------------------
(1)It is anticipated that the Management Fee for the Combined Fund will be that
of Fixed Income Fund, which is at the average of the Lipper peer group
median. Although former shareholders of Bond IMMDEX(TM) Fund will pay a
Management Fee that is 0.20% higher following the Reorganization, this
increase is largely the result of an adjustment to the Management Fee charged
to Bond IMMDEX(TM) Fund. At a meeting of the Board of Directors held on
December 3-4, 2002, the Advisor advised the Board that circumstances have
evolved so that management of the Bond IMMDEX(TM) Fund has required the use
of active investment management techniques to an extent beyond that
originally envisioned. The Advisor further noted that, as a result, the
Management Fee paid by Bond IMMDEX(TM) Fund is significantly lower than
management fees paid by other funds in its peer group that are similarly
managed. Moreover, any increase in expenses may potentially be mitigated by
other benefits resulting from the Reorganization, such as increased
investment diversification and more favorable trading terms often associated
with larger funds.
(2)"Other Expenses" of Class S shares include a 0.25% shareholder servicing fee.
(3)The Advisor currently does not waive fees for Bond IMMDEX(TM) Fund.
(4)The Advisor has agreed to waive fees and reimburse other fund expenses so
that Total Annual Fund Operating Expenses do not exceed 0.95%, 1.70%, 1.70%,
0.95% and 0.70%, respectively, for Class A, Class B, Class C, Class S and
Class Y shares of Fixed Income Fund. These fee waivers and expense
reimbursements may be discontinued or modified at any time by the Advisor in
its discretion.
16
(5)The Advisor has agreed to waive fees and reimburse other fund expenses so
that Total Annual Fund Operating Expenses do not exceed 0.95%, 1.70%, 1.70%,
0.95% and 0.70%, respectively, for Class A, Class B, Class C, Class S and
Class Y shares of Combined Fund. These fee waivers and expense reimbursements
may be discontinued or modified at any time by the Advisor in its discretion.
17
HIGH YIELD BOND FUND, STRATEGIC INCOME FUND
AND PRO FORMA COMBINED FUND
- --------------------------------------------------------------------------------
HIGH YIELD STRATEGIC PRO FORMA
ANNUAL FUND BOND INCOME COMBINED
OPERATING EXPENSES FUND FUND FUND
- --------------------------------------------------------------------------------
MANAGEMENT FEES
Class A 0.70% 0.70% 0.70%
Class B 0.70% 0.70% 0.70%
Class C 0.70% 0.70% 0.70%
Class S 0.70% 0.70% 0.70%
Class Y 0.70% 0.70% 0.70%
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE (12B-1) FEES
Class A 0.25% 0.25% 0.25%
Class B 1.00% 1.00% 1.00%
Class C 1.00% 1.00% 1.00%
Class S None None None
Class Y None None None
- --------------------------------------------------------------------------------
OTHER EXPENSES
Class A 0.39% 0.33% 0.33%
Class B 0.39% 0.33% 0.33%
Class C 0.39% 0.33% 0.33%
Class S(1) 0.64% 0.58% 0.58%
Class Y 0.39% 0.33% 0.33%
- --------------------------------------------------------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES
Class A 1.34%(2) 1.28%(3) 1.28%(4)
Class B 2.09%(2) 2.03%(3) 2.03%(4)
Class C 2.09%(2) 2.03%(3) 2.03%(4)
Class S 1.34%(2) 1.28%(3) 1.28%(4)
Class Y 1.09%(2) 1.03%(3) 1.03%(4)
- --------------------------------------------------------------------------------
(1)"Other Expenses" of Class S shares include a 0.25% shareholder servicing fee.
(2)The Advisor has agreed to waive fees and reimburse other fund expenses so
that Total Annual Fund Operating Expenses do not exceed 1.23%, 1.98%, 1.98%,
1.23% and 0.98%, respectively, for Class A, Class B, Class C, Class S and
Class Y shares of High Yield Bond Fund. These fee waivers and expense
reimbursements may be discontinued or modified at any time by the Advisor in
its discretion.
(3)The Advisor has agreed to waive fees and reimburse other fund expenses so
that Total Annual Fund Operating Expenses do not exceed 1.20%, 1.95%, 1.95%,
1.20% and 0.95%, respectively, for Class A, Class B, Class C, Class S and
Class Y shares of Strategic Income Fund. These fee waivers and expense
reimbursements may be discontinued or modified at any time by the Advisor in
its discretion.
(4)The Advisor has agreed to waive fees and reimburse other fund expenses so
that Total Annual Fund Operating Expenses do not exceed 1.20%, 1.95%, 1.95%,
1.20% and 0.95%, respectively, for Class A, Class B, Class C, Class S and
Class Y shares of the Combined Fund. These fee waivers and expense
reimbursements may be discontinued or modified at any time by the Advisor in
its discretion.
18
EXAMPLES OF FUND EXPENSES
The tables below show examples of the total expenses you would pay on a
$10,000 investment over one-, three-, five- and ten-year periods. The examples
are intended to help you compare the cost of investing in each Acquired Fund and
corresponding Acquiring Fund, as well as the combined fund on a PRO FORMA
(estimated) basis, assuming the Reorganizations take place. The examples assume
a 5% average annual return and that each Fund's total annual operating expenses
remain the same in each period. The examples also assume that you reinvest all
of your dividends and distributions. THE EXAMPLES ARE FOR ILLUSTRATION ONLY, AND
YOUR ACTUAL COSTS MAY BE HIGHER OR LOWER.
19
LARGE CAP GROWTH FUND, LARGE CAP CORE FUND
AND PRO FORMA COMBINED FUND
- --------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
Large Cap Growth Fund
Class A $ 667 $ 913 $1,178 $1,935
Class B(1) $ 699 $1,015 $1,257 $2,089
Class B(2) $ 199 $ 615 $1,057 $2,089
Class C(1) $ 397 $ 709 $1,147 $2,168
Class C(2) $ 297 $ 709 $1,147 $2,168
Class S $ 123 $ 384 $ 665 $1,466
Class Y $ 98 $ 306 $ 531 $1,178
- --------------------------------------------------------------------------------
Large Cap Core Fund
Class A $ 667 $ 913 $1,178 $1,935
Class B(1) $ 699 $1,015 $1,257 $2,089
Class B(2) $ 199 $ 615 $1,057 $2,089
Class C(1) $ 397 $ 709 $1,147 $2,168
Class C(2) $ 297 $ 709 $1,147 $2,168
Class S $ 123 $ 384 $ 665 $1,466
Class Y $ 98 $ 306 $ 531 $1,178
- --------------------------------------------------------------------------------
Pro Forma Combined Fund
Class A $ 667 $ 913 $1,178 $1,935
Class B(1) $ 699 $1,015 $1,257 $2,089
Class B(2) $ 199 $ 615 $1,057 $2,089
Class C(1) $ 397 $ 709 $1,147 $2,168
Class C(2) $ 297 $ 709 $1,147 $2,168
Class S $ 123 $ 384 $ 665 $1,466
Class Y $ 98 $ 306 $ 531 $1,178
- --------------------------------------------------------------------------------
(1)Assumes redemption at the end of each period.
(2)Assumes no redemption at the end of each period.
20
HEALTH SCIENCES FUND, LARGE CAP CORE FUND
AND PRO FORMA COMBINED FUND
- --------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
Health Sciences Fund
Class A $ 689 $ 980 $1,294 $2,179
Class B(1) $ 722 $1,085 $1,375 $2,331
Class B(2) $ 222 $ 685 $1,175 $2,331
Class C(1) $ 420 $ 778 $1,263 $2,408
Class C(2) $ 320 $ 778 $1,263 $2,408
Class S $ 147 $ 456 $ 787 $1,724
Class Y $ 121 $ 378 $ 654 $1,443
- --------------------------------------------------------------------------------
Large Cap Core Fund
Class A $ 667 $ 913 $1,178 $1,935
Class B(1) $ 699 $1,015 $1,257 $2,089
Class B(2) $ 199 $ 615 $1,057 $2,089
Class C(1) $ 397 $ 709 $1,147 $2,168
Class C(2) $ 297 $ 709 $1,147 $2,168
Class S $ 123 $ 384 $ 665 $1,466
Class Y $ 98 $ 306 $ 531 $1,178
- --------------------------------------------------------------------------------
Pro Forma Combined Fund
Class A $ 667 $ 913 $1,178 $1,935
Class B(1) $ 699 $1,015 $1,257 $2,089
Class B(2) $ 199 $ 615 $1,057 $2,089
Class C(1) $ 397 $ 709 $1,147 $2,168
Class C(2) $ 297 $ 709 $1,147 $2,168
Class S $ 123 $ 384 $ 665 $1,466
Class Y $ 98 $ 306 $ 531 $1,178
- --------------------------------------------------------------------------------
(1)Assumes redemption at the end of each period.
(2)Assumes no redemption at the end of each period.
21
MID CAP GROWTH FUND, MID CAP CORE FUND
AND PRO FORMA COMBINED FUND
- --------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
Mid Cap Growth Fund
Class A $ 627 $ 931 $1,209 $2,000
Class B(1) $ 705 $1,034 $1,288 $2,153
Class B(2) $ 205 $ 634 $1,088 $2,153
Class C(1) $ 403 $ 727 $1,177 $2,231
Class C(2) $ 303 $ 727 $1,177 $2,231
Class S $ 129 $ 403 $ 697 $1,534
Class Y $ 104 $ 325 $ 563 $1,248
- --------------------------------------------------------------------------------
Mid Cap Core Fund
Class A $ 671 $ 928 $1,204 $1,989
Class B(1) $ 704 $1,030 $1,283 $2,142
Class B(2) $ 204 $ 630 $1,083 $2,142
Class C(1) $ 402 $ 724 $1,172 $2,414
Class C(2) $ 302 $ 724 $1,172 $2,414
Class S $ 128 $ 400 $ 692 $1,523
Class Y $ 103 $ 322 $ 558 $1,236
- --------------------------------------------------------------------------------
Pro Forma Combined Fund
Class A $ 671 $ 928 $1,204 $1,989
Class B(1) $ 704 $1,030 $1,283 $2,142
Class B(2) $ 204 $ 630 $1,083 $2,142
Class C(1) $ 402 $ 724 $1,172 $2,414
Class C(2) $ 302 $ 724 $1,172 $2,414
Class S $ 128 $ 400 $ 692 $1,523
Class Y $ 103 $ 322 $ 558 $1,236
- --------------------------------------------------------------------------------
(1)Assumes redemption at the end of each period.
(2)Assumes no redemption at the end of each period.
22
SMALL CAP GROWTH FUND, SMALL CAP CORE FUND
AND PRO FORMA COMBINED FUND
- --------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
Small Cap Growth Fund
Class A $ 627 $ 931 $1,209 $2,000
Class B(1) $ 705 $1,034 $1,288 $2,153
Class B(2) $ 205 $ 634 $1,088 $2,153
Class C(1) $ 403 $ 727 $1,177 $2,231
Class C(2) $ 303 $ 727 $1,177 $2,231
Class S $ 129 $ 403 $ 697 $1,534
Class Y $ 104 $ 325 $ 563 $1,248
- --------------------------------------------------------------------------------
Small Cap Core Fund
Class A $ 671 $ 928 $1,204 $1,989
Class B(1) $ 704 $1,030 $1,283 $2,142
Class B(2) $ 204 $ 630 $1,083 $2,142
Class C(1) $ 402 $ 724 $1,172 $2,414
Class C(2) $ 302 $ 724 $1,172 $2,414
Class S $ 128 $ 400 $ 692 $1,523
Class Y $ 103 $ 322 $ 558 $1,236
- --------------------------------------------------------------------------------
Pro Forma Combined Fund
Class A $ 671 $ 928 $1,204 $1,989
Class B(1) $ 704 $1,030 $1,283 $2,142
Class B(2) $ 204 $ 630 $1,083 $2,142
Class C(1) $ 402 $ 724 $1,172 $2,414
Class C(2) $ 302 $ 724 $1,172 $2,414
Class S $ 128 $ 400 $ 692 $1,523
Class Y $ 103 $ 322 $ 558 $1,236
- --------------------------------------------------------------------------------
(1)Assumes redemption at the end of each period.
(2)Assumes no redemption at the end of each period.
23
EMERGING MARKETS FUND, INTERNATIONAL FUND
AND PRO FORMA COMBINED FUND
- --------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
Emerging Markets Fund
Class A $ 722 $1,082 $1,466 $2,539
Class B(1) $ 757 $1,191 $1,550 $2,689
Class B(2) $ 257 $ 791 $1,350 $2,689
Class C(1) $ 455 $ 883 $1,437 $2,762
Class C(2) $ 355 $ 883 $1,437 $2,762
Class S $ 182 $ 563 $ 970 $2,105
Class Y $ 157 $ 486 $ 839 $1,834
- --------------------------------------------------------------------------------
International Fund
Class A $ 709 $1,045 $1,403 $2,407
Class B(1) $ 744 $1,151 $1,485 $2,557
Class B(2) $ 244 $ 751 $1,285 $2,557
Class C(1) $ 442 $ 844 $1,373 $2,632
Class C(2) $ 342 $ 844 $1,373 $2,632
Class S $ 169 $ 523 $ 902 $1,965
Class Y $ 144 $ 446 $ 771 $1,691
- --------------------------------------------------------------------------------
Pro Forma Combined Fund
Class A $ 709 $1,045 $1,403 $2,407
Class B(1) $ 744 $1,151 $1,485 $2,557
Class B(2) $ 244 $ 751 $1,285 $2,557
Class C(1) $ 442 $ 844 $1,373 $2,632
Class C(2) $ 342 $ 844 $1,373 $2,632
Class S $ 169 $ 523 $ 902 $1,965
Class Y $ 144 $ 446 $ 771 $1,691
- --------------------------------------------------------------------------------
(1)Assumes redemption at the end of each period.
(2)Assumes no redemption at the end of each period.
24
BOND IMMDEX(TM) FUND, FIXED INCOME FUND
AND PRO FORMA COMBINED FUND
- --------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
Bond IMMDEX(TM) Fund
Class A $ 509 $ 688 $ 882 $1,441
Class B(1) $ 664 $ 908 $1,076 $1,708
Class B(2) $ 164 $ 508 $ 876 $1,708
Class C(1) $ 362 $ 603 $ 967 $1,791
Class C(2) $ 262 $ 603 $ 967 $1,791
Class S $ 88 $ 274 $ 477 $1,061
Class Y $ 62 $ 195 $ 340 $ 762
- --------------------------------------------------------------------------------
Fixed Income Fund
Class A $ 528 $ 748 $ 985 $1,664
Class B(1) $ 684 $ 969 $1,180 $1,928
Class B(2) $ 184 $ 569 $ 980 $1,928
Class C(1) $ 382 $ 664 $1,070 $2,008
Class C(2) $ 282 $ 664 $1,070 $2,008
Class S $ 108 $ 337 $ 585 $1,294
Class Y $ 83 $ 259 $ 450 $1,002
- --------------------------------------------------------------------------------
Pro Forma Combined Fund
Class A $ 528 $ 748 $ 985 $1,664
Class B(1) $ 684 $ 969 $1,180 $1,928
Class B(2) $ 184 $ 569 $ 980 $1,928
Class C(1) $ 382 $ 664 $1,070 $2,008
Class C(2) $ 282 $ 664 $1,070 $2,008
Class S $ 108 $ 337 $ 585 $1,294
Class Y $ 83 $ 259 $ 450 $1,002
- --------------------------------------------------------------------------------
(1)Assumes redemption at the end of each period.
(2)Assumes no redemption at the end of each period.
25
HIGH YIELD BOND FUND, STRATEGIC INCOME FUND
AND PRO FORMA COMBINED FUND
- --------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
High Yield Bond Fund
Class A $ 556 $ 831 $1,128 $1,969
Class B(1) $ 712 $1,055 $1,324 $2,227
Class B(2) $ 212 $ 655 $1,124 $2,227
Class C(1) $ 410 $ 748 $1,212 $2,304
Class C(2) $ 310 $ 748 $1,212 $2,304
Class S $ 136 $ 425 $ 734 $1,613
Class Y $ 111 $ 347 $ 601 $1,329
- --------------------------------------------------------------------------------
Strategic Income Fund
Class A $ 550 $ 814 $1,097 $1,905
Class B(1) $ 706 $1,037 $1,293 $2,163
Class B(2) $ 206 $ 637 $1,093 $2,163
Class C(1) $ 404 $ 730 $1,182 $2,242
Class C(2) $ 304 $ 730 $1,182 $2,242
Class S $ 130 $ 406 $ 702 $1,545
Class Y $ 105 $ 328 $ 569 $1,259
- --------------------------------------------------------------------------------
Pro Forma Combined Fund
Class A $ 550 $ 814 $1,097 $1,905
Class B(1) $ 706 $1,037 $1,293 $2,163
Class B(2) $ 206 $ 637 $1,093 $2,163
Class C(1) $ 404 $ 730 $1,182 $2,242
Class C(2) $ 304 $ 730 $1,182 $2,242
Class S $ 130 $ 406 $ 702 $1,545
Class Y $ 105 $ 328 $ 569 $1,259
- --------------------------------------------------------------------------------
(1)Assumes redemption at the end of each period.
(2)Assumes no redemption at the end of each period.
26
COMPARISON OF INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT STRATEGIES
The following tables compare each Acquired Fund and its corresponding
Acquiring Fund with respect to their investment objectives and principal
investment strategies. Please carefully review the following tables.
As described below, the investment objective of each Acquired Fund is
identical or substantially similar to that of its corresponding Acquiring Fund.
A Fund's objective may be changed without shareholder approval. If a Fund's
objective changes, you would be notified at least 60 days in advance. Please
remember: There is no guarantee that any Fund will achieve its objective.
As more fully set forth below, the principal investment strategies of
each Acquired Fund (with the exception of Health Sciences Fund) are similar to
those of its corresponding Acquiring Fund. A Fund's principal investment
strategies are the strategies that the Advisor believes are most likely to be
important in trying to achieve the Fund's objective. You should be aware that
each Fund may also use strategies to invest in securities that are not described
in this Prospectus/Proxy Statement but that are described in its prospectuses
and SAI.
COMPARISON OF INVESTMENT OBJECTIVES AND STRATEGIES:
LARGE CAP GROWTH FUND AND LARGE CAP CORE FUND
As set forth in the tables below, Large Cap Growth Fund and Large Cap
Core Fund have identical investment objectives and substantially similar
principal investment strategies. The investment objective of each Fund is to
seek long-term growth of capital. Both Funds invest primarily in
large-capitalization companies. Large Cap Growth Fund invests primarily in
common stocks of companies that have market capitalizations within the range of
market capitalizations of companies constituting the Russell 1000 Index, which
consists of companies with market capitalization ranging from approximately $238
million to $292 billion. Large Cap Core Fund invests primarily in common stocks
of companies that have market capitalizations within the range of market
capitalizations of companies constituting the Standard & Poor's 500 Composite
Stock Index ("S&P 500 Index"), which consists of companies with market
capitalizations ranging from approximately $209 million to $292 billion. Large
Cap Growth Fund and Large Cap Core Fund typically invest in common stocks that
have market capitalizations of at least $5 billion and $3 billion, respectively,
at the time of purchase.
- --------------------------------------------------------------------------------
LARGE CAP GROWTH FUND (ACQUIRED FUND)
- --------------------------------------------------------------------------------
Investment Long-term growth of capital.
Objective
- --------------------------------------------------------------------------------
27
- --------------------------------------------------------------------------------
Principal Under normal market conditions, the Fund invests primarily (at
Investment least 80% of net assets, plus the amount of any borrowings for
Strategies investment purposes) in common stocks of large-capitalization
companies, defined as companies that have market
capitalizations within the range of market capitalizations of
companies constituting the Russell 1000 Index. This index
measures the performance of the 1,000 largest U.S. companies
based on total market capitalization. While the market
capitalizations of companies in the Russell 1000 Index ranged
from $238 million to $292 billion as of September 2002, the
Advisor typically invests in common stocks that have market
capitalizations of at least $5 billion at the time of
purchase, and the weighted average market capitalization of
the Fund is approximately $100 million.
The Advisor selects companies that it believes exhibit the
potential for superior growth based on factors such as:
o above average growth in revenue and earnings.
o strong competitive position.
o strong management.
o sound financial condition.
Up to 25% of the Fund's total assets may be invested in
securities of foreign issuers that are either listed on a U.S.
stock exchange or represented by American Depositary Receipts.
These securities may be of the same type as the Fund's
permissible investments in U.S. domestic securities.
- --------------------------------------------------------------------------------
28
- --------------------------------------------------------------------------------
LARGE CAP CORE FUND (ACQUIRING FUND)
- --------------------------------------------------------------------------------
Investment Long-term growth of capital.
Objective
- --------------------------------------------------------------------------------
Principal Under normal market conditions, the Fund invests primarily (at
Investment least 80% of net assets, plus the amount of any borrowings for
Strategies investment purposes) in common stocks of large-capitalization
companies, defined as companies that have market
capitalizations within the range of market capitalizations of
companies constituting the S&P 500 Index. The S&P 500 Index is
a market-value weighted index consisting of 500 stocks chosen
for market size, liquidity, and industry group representation.
While the market capitalizations of companies in the S&P 500
Index ranged from $209 million to $292 billion as of September
2002, the Advisor typically invests in common stocks that have
market capitalizations of at least $3 billion at the time of
purchase.
The Advisor selects companies that it believes exhibit the
potential for superior growth based on factors such as:
o strong competitive position.
o strong management.
o sound financial condition.
Up to 25% of the Fund's total assets may be invested in
securities of foreign issuers that are either listed on a U.S.
stock exchange or represented by American Depositary Receipts.
These securities may be of the same type as the Fund's
permissible investments in U.S. domestic securities.
- --------------------------------------------------------------------------------
COMPARISON OF INVESTMENT OBJECTIVES AND STRATEGIES:
HEALTH SCIENCES FUND AND LARGE CAP CORE FUND
The investment objectives of Health Sciences Fund and Large Cap Core
Fund are identical - both Funds seek long-term growth of capital. As set forth
in the tables below, there are differences between the investment strategies of
Health Sciences Fund and Large Cap Core Fund. As a non-diversified sector fund,
Health Sciences Fund invests primarily in common stocks of companies principally
engaged in developing, producing or distributing products or services connected
with health care or medicine. In contrast, Large Cap Core Fund does not restrict
its investments to a particular business sector of the market. In addition,
Health Sciences Fund's investments may include development stage companies,
small- and mid-capitalization companies, as well as IPOs under certain market
conditions, while Large Cap Core Fund invests primarily in large capitalization
companies.
29
- --------------------------------------------------------------------------------
HEALTH SCIENCES FUND (ACQUIRED FUND)
- --------------------------------------------------------------------------------
Investment Long-term growth of capital.
Objective
- --------------------------------------------------------------------------------
Principal Under normal market conditions, the Fund invests primarily (at
Investment least 80% of net assets, plus the amount of any borrowings for
Strategies investment purposes) in common stocks of companies that
develop, produce or distribute products or services connected
with health care or medicine, and that derive at least 50% of
their assets, revenues or profits from these products or
services at the time of investment.
Examples of products or services connected with health care or
medicine include:
o pharmaceuticals.
o health care services and administration.
o diagnostics.
o medical equipment and supplies.
o medical technology.
o medical research and development.
The Advisor invests in companies that it believes have the
potential for above average growth in revenue and earnings as
a result of new or unique products, processes or services;
increasing demand for a company's products or services;
established market leadership; or exceptional management.
The Fund's investments may include development stage companies
(companies that do not have significant revenues) and small-
and mid-capitalization companies. The Fund may also invest in
real estate investment trusts ("REITs") that finance medical
care facilities. REITs are publicly traded corporations or
trusts that acquire, hold and manage real estate.
Under certain market conditions, the Fund may frequently
invest in companies at the time of their IPO. By virtue of its
size and institutional nature, the Advisor may have greater
access to IPOs than individual investors have, including
access to so-called "hot issues" that are generally traded in
the aftermarket at prices in excess of the IPO price. IPOs
will frequently be sold within 12 months of purchase, which
may result in increased short-term capital gains.
Up to 25% of the Fund's total assets may be invested in
securities of foreign issuers that are either listed on a U.S.
stock exchange or
- --------------------------------------------------------------------------------
30
- --------------------------------------------------------------------------------
represented by American Depositary Receipts. These securities
may be of the same type as the Fund's permissible investments
in U.S. domestic securities.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LARGE CAP CORE FUND (ACQUIRING FUND)
- --------------------------------------------------------------------------------
Investment Long-term growth of capital.
Objective
- --------------------------------------------------------------------------------
Principal Under normal market conditions, the Fund invests primarily (at
Investment least 80% of net assets, plus the amount of any borrowings for
Strategies investment purposes) in common stocks of large-capitalization
companies, defined as companies that have market
capitalizations within the range of market capitalizations of
companies constituting the S&P 500 Index. The S&P 500 Index is
a market-value weighted index consisting of 500 stocks chosen
for market size, liquidity, and industry group representation.
While the market capitalizations of companies in the S&P 500
Index ranged from $209 million to $292 billion as of September
2002, the Advisor typically invests in common stocks that have
market capitalizations of at least $3 billion at the time of
purchase.
The Advisor selects companies that it believes exhibit the
potential for superior growth based on factors such as:
o strong competitive position.
o strong management.
o sound financial condition.
Up to 25% of the Fund's total assets may be invested in
securities of foreign issuers that are either listed on a U.S.
stock exchange or represented by American Depositary Receipts.
These securities may be of the same type as the Fund's
permissible investments in U.S. domestic securities.
- --------------------------------------------------------------------------------
COMPARISON OF INVESTMENT OBJECTIVES AND STRATEGIES:
MID CAP GROWTH FUND AND MID CAP CORE FUND
As set forth in the tables below, Mid Cap Growth Fund and Mid Cap Core
Fund have substantially similar investment objectives and investment strategies.
The investment objective of Mid Cap Growth Fund is growth of capital, while Mid
Cap Core Fund seeks capital appreciation. Both Funds invest primarily in
mid-capitalization companies. Mid Cap Growth Fund invests primarily in common
stocks of companies that have market capitalizations within
31
the range of market capitalizations of companies constituting the Russell Midcap
Index, which consists of companies with market capitalization ranging from
approximately $163 million to $11.4 billion. Mid Cap Core Fund invests primarily
in common stocks of companies that have market capitalizations within the range
of market capitalizations of companies constituting the Standard & Poor's MidCap
400 Index ("S&P MidCap 400 Index"), which consists of companies with market
capitalizations ranging from approximately $48 million to $7.2 billion.
- --------------------------------------------------------------------------------
MID CAP GROWTH FUND (ACQUIRED FUND)
- --------------------------------------------------------------------------------
Investment Growth of capital.
Objective
- --------------------------------------------------------------------------------
Principal Under normal market conditions, the Fund invests primarily (at
Investment least 80% of net assets, plus the amount of any borrowings for
Strategies investment purposes) in common stocks of mid-capitalization
companies, defined as companies that have market
capitalizations at the time of purchase within the range of
market capitalizations of companies constituting the Russell
Midcap Index. This index measures the performance of the 800
smallest companies in the Russell 1000 Index (which is made up
of the 1,000 largest U.S. companies based on total market
capitalization). As of September 2002, market capitalizations
of companies in the Russell Midcap Index ranged from
approximately $163 million to $11.4 billion.
The Advisor selects companies that it believes exhibit the
potential for superior growth based on factors such as:
o above average growth in revenue and earnings.
o strong competitive position.
o strong management.
o sound financial condition.
Under certain market conditions, the Fund may frequently
invest in companies at the time of their IPO. By virtue of its
size and institutional nature, the Advisor may have greater
access to IPOs than individual investors have, including
access to so-called "hot issues" that are generally traded in
the aftermarket at prices in excess of the IPO price. IPOs
will frequently be sold within 12 months of purchase, which
may result in increased short-term capital gains.
Up to 25% of the Fund's total assets may be invested in
securities of foreign issuers that are either listed on a U.S.
stock exchange or represented by American Depositary Receipts.
These securities may be of the same type as the Fund's
permissible investments in U.S. domestic securities.
- --------------------------------------------------------------------------------
32
- --------------------------------------------------------------------------------
MID CAP CORE FUND (ACQUIRING FUND)
- --------------------------------------------------------------------------------
Investment Capital appreciation.
Objective
- --------------------------------------------------------------------------------
Principal Under normal market conditions, the Fund invests primarily (at
Investment least 80% of net assets, plus the amount of any borrowings for
Strategies investment purposes) in common stocks of mid-capitalization
companies, defined as companies that have market
capitalizations at the time of purchase within the range of
market capitalizations of companies constituting the S&P
MidCap 400 Index. This index measures the performance of 400
selected common stocks representing the middle capitalization
segment of the U.S. stock market. As of September 2002, market
capitalizations of companies in the S&P MidCap 400 Index
ranged from approximately $48 million to $7.2 billion.
The Advisor selects companies that it believes exhibit the
potential for superior growth based on factors such as:
o strong competitive position.
o strong management.
o sound financial condition.
Under certain market conditions, the Fund may frequently
invest in companies at the time of their IPO. By virtue of its
size and institutional nature, the Advisor may have greater
access to IPOs than individual investors have, including
access to so-called "hot issues" that are generally traded in
the aftermarket at prices in excess of the IPO price. IPOs
will frequently be sold within 12 months of purchase, which
may result in increased short-term capital gains.
Up to 25% of the Fund's total assets may be invested in
securities of foreign issuers that are either listed on a U.S.
stock exchange or represented by American Depositary Receipts.
These securities may be of the same type as the Fund's
permissible investments in U.S. domestic securities.
- --------------------------------------------------------------------------------
COMPARISON OF INVESTMENT OBJECTIVES AND STRATEGIES:
SMALL CAP GROWTH FUND AND SMALL CAP CORE FUND
As set forth in the tables below, Small Cap Growth Fund and Small Cap
Core Fund have substantially similar investment objectives and investment
strategies. The investment objective of Small Cap Growth Fund is growth of
capital, while Small Cap Core Fund seeks capital appreciation. Both Funds invest
primarily in small-capitalization companies. Small Cap Growth
33
Fund invests primarily in common stocks of companies that have market
capitalizations within the range of market capitalizations of companies
constituting the Russell 2000 Index, which consists of companies with market
capitalizations ranging from approximately $8 million to $1.8 billion. Small Cap
Core Fund invests primarily in common stocks of companies that have market
capitalizations within the range of market capitalizations of companies
constituting the Standard & Poor's Small Cap 600 Index ("S&P Small Cap 600
Index"), which consists of companies with market capitalizations ranging from
approximately $23 million to $2.6 billion.
- --------------------------------------------------------------------------------
SMALL CAP GROWTH FUND (ACQUIRED FUND)
- --------------------------------------------------------------------------------
Investment Growth of capital.
Objective
- --------------------------------------------------------------------------------
Principal Under normal market conditions, the Fund invests primarily (at
Investment least 80% of net assets, plus the amount of any borrowings for
Strategies investment purposes) in common stocks of small-capitalization
companies, defined as companies that have market
capitalizations at the time of purchase within the range of
market capitalizations of companies constituting the Russell
2000 Index. This index measures the performance of the 2,000
smallest companies in the Russell 3000 Index (which is made up
of the 3,000 largest U.S. companies based on total market
capitalization). As of September 2002, market capitalizations
of companies in the Russell 2000 Index ranged from
approximately $8 million to $1.8 billion.
The Advisor selects companies that it believes exhibit the
potential for superior growth based on factors such as:
o above average growth in revenue and earnings.
o strong competitive position.
o strong management.
o sound financial condition.
Under certain market conditions, the Fund may frequently
invest in companies at the time of their IPO. By virtue of its
size and institutional nature, the Advisor may have greater
access to IPOs than individual investors have, including
access to so-called "hot issues" that are generally traded in
the aftermarket at prices in excess of the IPO price. IPOs
will frequently be sold within 12 months of purchase, which
may result in increased short-term capital gains.
Up to 25% of the Fund's total assets may be invested in
securities of foreign issuers that are either listed on a U.S.
stock exchange or represented by American Depositary Receipts.
These securities may be of the same type as the Fund's
permissible investments in U.S. domestic securities.
- --------------------------------------------------------------------------------
34
- --------------------------------------------------------------------------------
SMALL CAP CORE FUND (ACQUIRING FUND)
- --------------------------------------------------------------------------------
Investment Capital appreciation.
Objective
- --------------------------------------------------------------------------------
Principal Under normal market conditions, the Fund invests primarily (at
least 80% of net assets, plus the amount of any borrowings for
investment purposes) in common stocks of small-capitalization
companies, defined as companies that have market
capitalizations at the time of purchase within the range of
market capitalizations of companies constituting the S&P Small
Cap 600 Index. This index measures the performance of 600
selected common stocks representing the small company segment
of the U.S. market. As of September 2002, market
capitalizations of companies in the S&P Small Cap 600 Index
ranged from approximately $23 million to $2.6 billion.
The Advisor selects companies that it believes exhibit the
potential for superior growth based on factors such as:
o above average growth in revenue and earnings.
o strong competitive position.
o strong management.
o sound financial condition.
Under certain market conditions, the Fund may frequently
invest in companies at the time of their IPO. By virtue of its
size and institutional nature, the Advisor may have greater
access to IPOs than individual investors have, including
access to so-called "hot issues" that are generally traded in
the aftermarket at prices in excess of the IPO price. IPOs
will frequently be sold within 12 months of purchase, which
may result in increased short-term capital gains.
Up to 25% of the Fund's total assets may be invested in
securities of foreign issuers that are either listed on a U.S.
stock exchange or represented by American Depositary Receipts.
These securities may be of the same type as the Fund's
permissible investments in U.S. domestic securities.
- --------------------------------------------------------------------------------
COMPARISON OF INVESTMENT OBJECTIVES AND STRATEGIES:
EMERGING MARKETS FUND AND INTERNATIONAL FUND
The investment objectives of Emerging Markets Fund and International
Fund are identical - each Fund seeks long-term growth of capital. As set forth
in the tables below,
35
although the Funds both primarily invest in equity securities that trade in
markets other than the U.S., there are differences between the Funds' investment
strategies. For example, International Fund may select investments from a
broader universe of companies than Emerging Markets Fund - International Fund
invests primarily in equity securities that trade in markets other than the
U.S., while Emerging Markets Fund invests primarily in equity securities of
issuers in emerging markets (I.E., countries with a relatively low gross
national product per capita compared to the world's major economies and the
potential for rapid growth). Each Fund uses a different approach for selecting
investments. The sub-advisor for Emerging Markets Fund places primary emphasis
on country selection, followed by selection of industries or sectors within
those countries and selection of individual stocks within those industries or
sectors. The sub-advisor for International Fund selects investments through the
use of a screening tool that focuses on valuation ranges to determine which
companies represent the best values relative to their long-term growth prospects
and local markets. In addition, Emerging Markets Fund normally invests in
securities of issuers in at least six foreign countries, while International
Fund normally invests in securities traded in at least three foreign countries.
- --------------------------------------------------------------------------------
EMERGING MARKETS FUND (ACQUIRED FUND)
- --------------------------------------------------------------------------------
Investment Long-term growth of capital.
Objective
- --------------------------------------------------------------------------------
Principal Under normal market conditions, the Fund invests primarily (at
Investment least 80% of net assets, plus the amount of any borrowings for
Strategies investment purposes) in equity securities of issuers in
emerging markets. Normally, the Fund invests in securities of
issuers from at least six foreign countries.
A country is considered to have an "emerging market" if it has
a relatively low gross national product per capita compared to
the world's major economies and the potential for rapid
economic growth. Countries with emerging markets include:
o those that have an emerging stock market (as defined
by the International Financial Corporation).
o those with low- to middle-income economies (according
to the World Bank).
o those listed in World Bank publications as
"developing."
A company is considered to be an emerging markets issuer if
any of the following apply:
o its securities are principally traded in an emerging
market (including Hong Kong and Singapore).
o it derives at least 50% of its total revenue from
goods produced, sales made or services performed in
emerging markets countries (including Hong Kong and
Singapore).
- --------------------------------------------------------------------------------
36
- --------------------------------------------------------------------------------
o it maintains 50% or more of its assets in one or more
emerging markets countries (including Hong Kong and
Singapore).
o it is organized under the laws of, or has a principal
office in, an emerging markets country (including
Hong Kong and Singapore).
In choosing investments for the Fund, its sub-advisor
generally places primary emphasis on country selection. This
is followed by the selection of industries or sectors within
or across countries and the selection of individual stocks
within those industries or sectors. The Fund is not subject to
any restrictions on the size of the companies in which it
invests and it may invest in smaller capitalization companies.
Equity securities in which the Fund invests include common and
preferred stock. In addition, the Fund may invest in
securities representing underlying international securities,
such as American Depositary Receipts and European Depositary
Receipts, and in securities of other investment companies.
In order to hedge against adverse movements in currency
exchange rates, the Fund may enter into forward foreign
currency exchange contracts.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INTERNATIONAL FUND (ACQUIRING FUND)
- --------------------------------------------------------------------------------
Investment Long-term growth of capital.
Objective
- --------------------------------------------------------------------------------
Principal Under normal market conditions, the Fund invests primarily (at
Investment least 80% of net assets, plus the amount of any borrowings for
Strategies investment purposes) in equity securities that trade in
markets other than the U.S. These securities generally are
issued by companies:
o that are domiciled in countries other than the U.S.,
or
o that derive at least 50% of either their revenues or
their pre-tax income from activities outside of the
U.S.
Normally, the Fund invests in securities traded in at least
three foreign countries.
Stocks are selected by determining which companies represent
the best values relative to their long-term growth prospects
and local markets through the use of a screening tool that
focuses on valuation ranges. Focus is placed on companies with
steady, sustainable earnings growth rates that sell at a
multiple lower than the average for that growth rate in the
local market. Fundamental analysis is another important factor
in terms of evaluating companies' balance sheets, market share
and strength of management.
- --------------------------------------------------------------------------------
37
- --------------------------------------------------------------------------------
Equity securities in which the Fund invests include common and
preferred stock. In addition, the Fund may invest in
securities representing underlying international securities,
such as American Depositary Receipts and European Depositary
Receipts, and in securities of other investment companies.
In order to hedge against adverse movements in currency
exchange rates, the Fund may enter into forward foreign
currency exchange contracts.
- --------------------------------------------------------------------------------
COMPARISON OF INVESTMENT OBJECTIVES AND STRATEGIES:
BOND IMMDEX(TM) FUND AND FIXED INCOME FUND
As set forth in the tables below, Bond IMMDEX(TM) Fund and Fixed Income
Fund have identical investment objectives and similar investment strategies. The
investment objective of each Fund is to provide investors with high current
income consistent with limited risk to capital. Both Funds normally invest
primarily in securities issued or guaranteed by the U.S. government or its
agencies or instrumentalities, corporate debt obligations and mortgage- and
asset-backed securities. Bond IMMDEX(TM) Fund may also invest in debt
obligations issued by foreign governments and other foreign issuers. Debt
securities in each Fund are rated investment grade at the time of purchase or,
if unrated, determined to be of comparable quality by the Advisor. Unrated
securities will not exceed 25% of either Fund's total assets.
The primary difference between the two Funds is that Bond IMMDEX(TM)
Fund attempts to make its duration, return and overall interest rate sensitivity
comparable to that of the Lehman Brothers Government/Credit Bond Index ("Lehman
Index"), while Fixed Income Fund uses a "top down" approach to select
investments. In selecting securities for Fixed Income Fund, the Advisor begins
by formulating its general economic outlook followed by analysis and
identification of various sectors and industries from which individual
securities are selected. Fixed Income Fund normally attempts to maintain a
weighted average effective maturity for its portfolio securities of 15 years or
less and an average effective duration of three to eight years. In addition,
Fixed Income Fund may invest up to 25% of total assets in dollar roll
transactions (I.E., the sale of mortgage-backed securities for delivery in the
current month while contracting with the same party to repurchase similar
securities at a future date) to generate additional income.
- --------------------------------------------------------------------------------
BOND IMMDEX(TM) FUND (ACQUIRED FUND)
- --------------------------------------------------------------------------------
Investment Provide investors with high current income consistent with
Objective limited risk to capital.
- --------------------------------------------------------------------------------
Principal Under normal market conditions, the Fund invests primarily (at
Investment least 80% of net assets, plus the amount of any borrowings for
Strategies investment purposes) in a combination of:
o securities issued or guaranteed by the U.S.
government or its agencies or instrumentalities.
- --------------------------------------------------------------------------------
38
- --------------------------------------------------------------------------------
o corporate debt obligations.
o debt obligations issued by foreign governments and
other foreign issuers.
o mortgage- and asset-backed securities.
The Advisor attempts to make the Fund's duration, return and
overall interest rate sensitivity comparable to that of the
Lehman Index. The Lehman Index is a good proxy for measuring
the return and other characteristics of the fixed-rate debt
market. However, the Fund is not an index fund and may invest
a substantial portion of its assets in securities not included
in the Lehman Index.
Debt securities in the Fund are rated investment grade at the
time of purchase or, if unrated, determined to be of
comparable quality by the Advisor. If the rating of a security
is reduced or discontinued after purchase, the Fund is not
required to sell the security but may consider doing so.
Unrated securities will not exceed 25% of the Fund's total
assets.
The Fund may invest up to 15% of its total assets in foreign
securities payable in U.S. dollars. These securities may be of
the same type as the Fund's permissible investments in U.S.
domestic securities.
During normal market conditions, the Fund attempts to maintain
a weighted average effective maturity and an average effective
duration for its portfolio securities comparable to that of
the Lehman Index. The Fund's weighted average effective
maturity and effective duration are measures of how the Fund
may react to interest rate changes.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FIXED INCOME FUND (ACQUIRING FUND)
- --------------------------------------------------------------------------------
Investment Provide investors with high current income consistent with
Objective limited risk to capital.
- --------------------------------------------------------------------------------
Principal Under normal market conditions, the Fund invests in investment
Investment grade debt securities, such as:
Strategies
o U.S. government securities, (securities issued or
guaranteed by the U.S. government or its agencies or
instrumentalities), including zero coupon securities.
o mortgage- and asset-backed securities.
o corporate debt obligations.
The Advisor selects securities using a "top-down" approach,
which begins with the formulation of their general economic
outlook. Following this,
- --------------------------------------------------------------------------------
39
- --------------------------------------------------------------------------------
various sectors and industries are analyzed and selected for
investment. Finally, the Advisor selects individual securities
within these sectors or industries.
Debt securities the Fund holds are rated investment grade at
the time of purchase or, if unrated, determined to be of
comparable quality by the Advisor. If the rating of a security
is reduced or the credit quality of an unrated security
declines after purchase, the Fund is not required to sell the
security, but may consider doing so. At least 65% of the
Fund's debt securities have received at least an A or
equivalent rating. Unrated securities will not exceed 25% of
the Fund's total assets.
At least 80% of the Fund's net assets (plus the amount of any
borrowings for investment purposes) will be invested in fixed
rate obligations. The Fund may invest up to 15% of its total
assets in foreign securities payable in U.S. dollars. These
securities may be of the same type as the Fund's permissible
investments in U.S. domestic securities.
Under normal market conditions, the Fund attempts to maintain
a weighted average effective maturity for its portfolio
securities of 15 years or less and an average effective
duration of three to eight years. The Fund's weighted average
effective maturity and average effective duration are measures
of how the Fund may react to interest rate changes.
To generate additional income, the Fund may invest up to 25%
of total assets in dollar roll transactions. In a dollar roll
transaction, the Fund sells mortgage-backed securities for
delivery in the current month while contracting with the same
party to repurchase similar securities at a future date.
- --------------------------------------------------------------------------------
COMPARISON OF INVESTMENT OBJECTIVES AND STRATEGIES:
HIGH YIELD BOND FUND AND STRATEGIC INCOME FUND
The investment objectives of High Yield Bond Fund and Strategic Income
Fund are identical - each Fund seeks to provide investors with a high level of
current income. As set forth in the tables below, although both Funds normally
invest in "high-yield" securities (I.E., securities rated lower than investment
grade at the time of purchase or unrated securities of comparable quality),
there are differences between the Funds' investment strategies. For example,
High Yield Bond Fund invests primarily in high-yield securities, while Strategic
Income Fund currently invests primarily in a combination of (1) securities
issued or guaranteed by the U.S. government or its agencies or
instrumentalities, (2) high-yield debt obligations issued by domestic issuers
and (3) investment grade and high-yield debt obligations issued by foreign
governments and other foreign issuers. As authorized by the Board at its meeting
on December 3-4, 2002, Strategic Income Fund will be renamed High Income Bond
Fund, effective January 31, 2003. It is anticipated that High Income Bond Fund
will invest primarily in high-yield securities.
40
- --------------------------------------------------------------------------------
HIGH YIELD BOND FUND (ACQUIRED FUND)
- --------------------------------------------------------------------------------
Investment Provide investors with a high level of current income.
Objective
- --------------------------------------------------------------------------------
Principal Under normal market conditions, the Fund invests primarily (at
Investment least 80% of net assets, plus the amount of any borrowing for
Strategies investment purposes) in securities rated lower than investment
grade at the time of purchase or in unrated securities of
comparable quality (securities commonly referred to as
high-yield securities or "junk bonds"). These securities
generally provide high income in an effort to compensate
investors for their higher risk of default, which is the
failure to make required interest or principal payments.
High-yield bond issuers include small or relatively new
companies lacking the history or capital to merit investment
grade status, former blue chip companies downgraded because of
financial problems, companies electing to borrow heavily to
finance or avoid a takeover or buyout, and firms with heavy
debt loads.
The Advisor employs a bottom up approach to investing. It
devotes more resources to evaluating individual securities
rather than assessing macro-economic trends. Securities are
selected using fundamental credit research to identify
relative value in the market. Positions are sold in
anticipation of credit deterioration or when a security is
priced expensively relative to other comparable investments.
There is no minimum rating requirement and no limitation on
the average effective maturity or average effective duration
of securities held by the Fund.
The Fund may invest up to 25% of its total assets in foreign
debt securities payable in U.S. dollars. These securities may
be of the same type as the Fund's permissible investments in
U.S. domestic securities.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
STRATEGIC INCOME FUND (ACQUIRING FUND)
- --------------------------------------------------------------------------------
Investment Provide investors with a high level of current income.
Objective
- --------------------------------------------------------------------------------
Principal Under normal market conditions, the Fund invests primarily (at
Investment least 80% of net assets, plus the amount of any borrowings for
Strategies investment purposes) in a combination of:
o securities issued or guaranteed by the U.S.
government or its agencies or instrumentalities,
including mortgage-backed securities, and investment
grade debt obligations issued by domestic users.
o high-yield (non-investment grade) debt obligations
issued by domestic issuers.
- --------------------------------------------------------------------------------
41
- --------------------------------------------------------------------------------
o investment grade and high-yield debt obligations
issued by foreign governments and other foreign
issuers.
The Fund's foreign investments may include investments in
emerging markets.
The Fund's investments may include securities that do not pay
interest currently, such as zero coupon securities and delayed
interest securities. The Fund also may invest in
payment-in-kind bonds, on which interest is paid in other
securities rather than cash.
In addition to debt obligations, the Fund may invest in
preferred stock, convertible securities and equity securities,
including common stock and warrants. These investments may be
denominated in U.S. dollars or foreign currencies.
There is no minimum rating requirement for securities in which
the Fund may invest (which means that the Fund may invest in
high-yield securities). In addition, there is no limitation on
the average maturity or average effective duration of
securities held by the Fund.
To generate additional income, the Fund may invest up to 25%
of total assets in dollar roll transactions. In a dollar roll
transaction, the Fund sells mortgage-backed securities for
delivery in the current month while contracting with the same
party to repurchase similar securities at a future date.
- --------------------------------------------------------------------------------
ADDITIONAL INVESTMENT STRATEGIES
In addition to the principal investment strategies of each Fund
described above, each Fund may also engage in other types of investment
practices, including:
Temporary Investments. In an attempt to respond to adverse market,
economic, political, or other conditions, each Fund may temporarily invest
without limit in cash and in U.S. dollar-denominated high-quality money market
instruments and other short-term securities. Being invested in these securities
may keep a Fund from participating in a market upswing and prevent the Fund from
achieving its investment objectives.
Portfolio Turnover. Fund managers may trade securities frequently,
resulting, from time to time, in an annual portfolio turnover rate of over 100%.
Trading of securities may produce capital gains, which are taxable to
shareholders when distributed. Active trading may also increase the amount of
commissions or mark-ups to broker-dealers that the Fund pays when it buys and
sells securities. The "Financial Highlights Tables" in Appendix C show each
Fund's historical portfolio turnover rate.
Additional information about each Fund's investment strategies is set
forth in the Funds' prospectuses and SAI. The Acquiring Funds' prospectuses are
enclosed with this
42
Prospectus/Proxy Statement. The Acquired Funds' prospectuses and the Funds' SAI
are available upon request by calling 1-800-677-FUND.
PERFORMANCE COMPARISON OF THE FUNDS
The performance information below compares the performance of each
Acquired Fund to that of its corresponding Acquiring Fund. The bar charts and
tables illustrate the variability of each Fund's performance over time. The bar
charts show each Fund's performance from year to year (using the class of the
Acquiring Fund with the longest operating history as an example and basis of
comparison). The tables compare the performance of each class of each Fund to
the performance of a market index (or indexes) over various periods of time. The
average annual total returns for each class of each Fund include the effect of
sales charges. Of course, PAST PERFORMANCE IS NOT AN INDICATION OF FUTURE
RESULTS.
After-tax returns are only shown for one class (using the class of the
Acquiring Fund with the longest operating history as a basis for comparison) and
after-tax returns for other classes will vary. After-tax returns are calculated
using the historically highest individual federal marginal income tax rates, but
do not reflect the impact of state or local taxes. Actual after-tax returns
depend on your tax situation and may differ from the returns shown below. The
after-tax returns are not relevant if you hold your Fund shares through
tax-deferred arrangements, such as 401(k) plans or individual retirement
accounts.
The bar charts and tables assume reinvestment of all dividends and
other distributions. Performance reflects fee waivers in effect. If these fee
waivers were not in place, each Fund's performance would be reduced.
43
PERFORMANCE COMPARISON: LARGE CAP GROWTH FUND AND LARGE CAP CORE FUND - CLASS Y
SHARES
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31 EACH YEAR
LARGE CAP CORE FUND
[BAR CHART]
9.98% -5.34% 30.03% 18.15% 22.91% 30.46% 14.29% -1.22% -22.21%
- --------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998 1999 2000 2001
Best Quarter: Q4 '98 24.04%
Worst Quarter: Q3 '01 (17.48)%
Year-to-date total return as of September 30, 2002 was (29.38)%
LARGE CAP GROWTH FUND
[BAR CHART]
28.22% 25.84% -11.86% -23.86%
- -----------------------------------------------
1998 1999 2000 2001
Best Quarter: Q4 '98 29.76%
Worst Quarter: Q1 '01 (20.11)%
Year-to-date total return as of September 30, 2002 was (35.16)%
AVERAGE ANNUAL TOTAL RETURNS AS OF DECEMBER 31, 2001
- -------------------------------------------------------- ------------- ------------- ---------- ------------------
Inception Since
LARGE CAP CORE FUND(1) Date 1 Year 5 Years Inception
- -------------------------------------------------------- ------------- ------------- ---------- ------------------
Class A - Return Before Taxes 1/9/95 (26.68)% 5.62% 10.54%
Class B - Return Before Taxes 3/1/99 (26.86)% N/A (5.91)%
Class C - Return Before Taxes(2) 9/24/01 N/A N/A N/A
Class S - Return Before Taxes 11/27/00 (22.40)% N/A (21.66)%
Class Y - Return Before Taxes 12/29/92 (22.21)% 7.09% 9.49%
Return After Taxes on Distributions (22.28)% 4.81% 8.01%
Return After Taxes on Distributions
and Sale of Fund Shares (13.53)% 5.42% 7.73%
S&P 500(3) (reflects no deduction for fees, expenses
or taxes) N/A (11.88)% 10.70% N/A
- -------------------------------------------------------- ------------- ------------- ---------- ------------------
LARGE CAP GROWTH FUND(4)
- -------------------------------------------------------- ------------- ------------- ---------- ------------------
Class A - Return Before Taxes 3/31/00 (28.23)% N/A (25.40)%
Class B - Return Before Taxes 12/12/94 (28.42)% 5.58% 11.58%
Class C - Return Before Taxes(2) 9/24/01 N/A N/A N/A
Class S - Return Before Taxes 12/11/00 (24.05)% N/A (29.73)%
Class Y - Return Before Taxes 8/18/97 (23.86)% N/A 3.07%
Return After Taxes on Distributions (23.83)% N/A 2.11%
Return After Taxes on Distributions
and Sale of Fund Shares (14.51)% N/A 2.11%
Russell 1000 Growth Index(5) (reflects no deduction
for fees, expenses or taxes) N/A (20.42)% 8.27% N/A
- -------------------------------------------------------- ------------- ------------- ---------- ------------------
(1)On 9/24/01, Large Cap Core Fund became the successor by merger to Firstar
Large Cap Core Equity Fund, a series of Firstar Funds, Inc. Prior to the
merger, Large Cap Core Fund had no assets or liabilities. Performance
presented prior to 9/24/01 represents that of Firstar Large Cap Core Equity
Fund.
(2)No information is presented for Class C shares of Large Cap Core Fund and
Large Cap Growth Fund because such shares were not offered for a full
calendar year.
(3)An unmanaged index of large capitalization stocks.
(4)On 5/17/02, Capital Growth Fund merged into Large Cap Growth Fund, each a
series of FAIF. Performance presented prior to 5/17/02 represents that of
Capital Growth Fund. On 9/24/01, Capital Growth Fund became the successor by
merger to Firstar Large Cap Growth Fund, a series of Firstar Funds, Inc.
Prior to the merger, Large Cap Growth Fund had no assets or liabilities.
Performance presented prior to 9/24/01 represents that of Firstar Large Cap
Growth Fund. Firstar
44
Large Cap Growth Fund was organized on 12/11/00 and, prior to that, was a
separate series of Firstar Stellar Funds, Inc.
(5)The Russell 1000 Growth Index measures the performance of those Russell 1000
companies with higher price-to-book ratios and higher forecasted growth
values. Russell 1000 companies include the 1,000 largest companies in the
Russell 3000 Index, which represents approximately 92% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index measures the
performance of the 3,000 largest U.S. companies based on total market
capitalization, which represent approximately 98% of the investable U.S.
equity market.
45
PERFORMANCE COMPARISON: HEALTH SCIENCES FUND AND LARGE CAP CORE FUND - CLASS Y
SHARES
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31 EACH YEAR
LARGE CAP CORE FUND
[BAR CHART]
9.98% -5.34% 30.03% 18.15% 22.91% 30.46% 14.29% -1.22% -22.21%
- --------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998 1999 2000 2001
Best Quarter: Q4 '98 24.04%
Worst Quarter: Q3 '01 (17.48)%
Year-to-date total return as of September 30, 2002 was (29.38)%
HEALTH SCIENCES FUND
[BAR CHART]
16.50% -6.87% -0.82% 47.09% -11.73%
- --------------------------------------------------------------------------------
1997 1998 1999 2000 2001
Best Quarter: Q2 '00 20.07%
Worst Quarter: Q3 '98 (22.38)%
Year-to-date total return as of September 30, 2002 was (24.10)%
AVERAGE ANNUAL TOTAL RETURNS AS OF DECEMBER 31, 2001
- -------------------------------------------------------- ------------- ------------- ---------- ------------------
Inception Since
LARGE CAP CORE FUND(1) Date 1 Year 5 Years Inception
- -------------------------------------------------------- ------------- ------------- ---------- ------------------
Class A - Return Before Taxes 1/9/95 (26.68)% 5.62% 10.54%
Class B - Return Before Taxes 3/1/99 (26.86)% N/A (5.91)%
Class C - Return Before Taxes(2) 9/24/01 N/A N/A N/A
Class S - Return Before Taxes 11/27/00 (22.40)% N/A (21.66)%
Class Y - Return Before Taxes 12/29/92 (22.21)% 7.09% 9.49%
Return After Taxes on Distributions (22.28)% 4.81% 8.01%
Return After Taxes on Distributions
and Sale of Fund Shares (13.53)% 5.42% 7.73%
S&P 500(3) (reflects no deduction for fees, expenses
or taxes) N/A (11.88)% 10.70% N/A
- -------------------------------------------------------- ------------- ------------- ---------- ------------------
HEALTH SCIENCES FUND
- -------------------------------------------------------- ------------- ------------- ---------- ------------------
Class A - Return Before Taxes 1/31/96 (16.83)% 5.44% 4.49%
Class B - Return Before Taxes 1/31/96 (17.01)% 5.54% 4.59%
Class C - Return Before Taxes 2/1/00 (14.39)% N/A 8.55%
Class S - Return Before Taxes 1/31/96 (11.98)% 6.64% 5.49%
Class Y - Return Before Taxes 1/31/96 (11.73)% 6.92% 5.76%
Return After Taxes on Distributions (11.73)% 5.42% 4.42%
Return After Taxes on Distributions
and Sale of Fund Shares (7.14)% 5.18% 4.26%
Standard & Poor's Health Care Composite Index(4)
(reflects no deduction for fees, expenses or taxes) N/A (12.88)% 16.00% N/A
- -------------------------------------------------------- ------------- ------------- ---------- ------------------
(1)On 9/24/01, Large Cap Core Fund became the successor by merger to Firstar
Large Cap Core Equity Fund, a series of Firstar Funds, Inc. Prior to the
merger, Large Cap Core Fund had no assets or liabilities. Performance
presented prior to 9/24/01 represents that of Firstar Large Cap Core Equity
Fund.
(2)No information is presented for Class C shares of Large Cap Core Fund because
such shares were not offered for a full calendar year.
(3)An unmanaged index of large capitalization stocks.
(4)An unmanaged index comprised of health care stocks in the S&P 500 Index (an
unmanaged index of large capitalization stocks).
46
PERFORMANCE COMPARISON: MID CAP GROWTH FUND AND MID CAP CORE FUND - CLASS Y
SHARES
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31 EACH YEAR
MID CAP CORE FUND
[BAR CHART]
7.22% 8.02% -2.01% 29.64% 18.87% 17.42% 4.91% 2.53% 25.60% -3.41%
- --------------------------------------------------------------------------------
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Best Quarter: Q4 '99 24.27%
Worst Quarter: Q3 '01 (19.85)%
Year-to-date total return as of September 30, 2002 was (21.07)%
MID CAP GROWTH FUND
[BAR CHART]
10.84% 55.02% 3.84% -29.05%
- --------------------------------------------------------------------------------
1998 1999 2000 2001
Best Quarter: Q4 '99 47.87%
Worst Quarter: Q3 '01 (28.64)%
Year-to-date total return as of September 30, 2002 was (36.09)%
AVERAGE ANNUAL TOTAL RETURNS AS OF DECEMBER 31, 2001
- ----------------------------------------------- ------------- -------------- ------------ ----------- ------------
Inception Since
MID CAP CORE FUND(1) Date 1 Year 5 Years 10 Years Inception
- ----------------------------------------------- ------------- -------------- ------------ ----------- ------------
Class A - Return Before Taxes 1/9/95 (8.95)% 7.42% N/A 12.11%
Class B - Return Before Taxes 3/1/99 (9.23)% N/A N/A 11.10%
Class C - Return Before Taxes(2) 9/24/01 N/A N/A N/A N/A
Class S - Return Before Taxes 12/11/00 (3.68)% N/A N/A (5.87)
Class Y -Return Before Taxes 12/28/89 (3.41)% 8.91% 10.38% N/A
Return After Taxes on Distributions (3.41)% 5.80% 7.87% N/A
Return After Taxes on Distributions
and Sale of Fund Shares (2.08)% 6.21% 7.73% N/A
Standard & Poor's MidCap 400 Index(3)
(reflects no deduction for fees, expenses
or taxes) N/A (0.61)% 16.11% 15.02% N/A
- ----------------------------------------------- ------------- -------------- ------------ ----------- ------------
MID CAP GROWTH FUND (4,5)
- ----------------------------------------------- ------------- -------------- ------------ ----------- ------------
Class A - Return Before Taxes 4/23/90 (33.14)% 7.86% 10.64% N/A
Class B - Return Before Taxes 8/7/98 (33.30)% N/A N/A 4.67%
Class C - Return Before Taxes(2) 2/1/99 (31.11)% N/A N/A 2.86%
Class S - Return Before Taxes 4/23/90 (29.25)% 9.09% N/A 11.27%
Class Y -Return Before Taxes 2/18/97 (29.05)% N/A N/A 9.11%
Return After Taxes on Distributions (29.05)% N/A N/A 3.74%
Return After Taxes on Distributions
and Sale of Fund Shares (17.69)% N/A N/A 6.45%
Russell MidCap Growth Index(6) (reflects no
deduction for fees, expenses or taxes) N/A (20.15)% 9.02% 11.10% N/A
- ----------------------------------------------- ------------- -------------- ------------ ----------- ------------
(1)On 9/24/01, Mid Cap Core Fund became the successor by merger to Firstar
MidCap Core Equity Fund, a series of Firstar Funds, Inc. Prior to the merger,
Mid Cap Core Fund had no assets or liabilities. Performance presented prior
to 9/24/01 represents the performance of Firstar MidCap Core Equity Fund.
(2)No information is presented for Class C shares because such shares were not
offered for a full calendar year.
(3)An unmanaged, capitalization weighted index that represents the aggregate
market value of the common equity of 400 companies chosen by Standard &
Poor's with a median capitalization of approximately $700 million and
measures the performance of the mid-range sector of the U.S. stock market.
47
(4)Mid Cap Growth Fund's 1999 returns were higher due in part to its strategy of
investing in IPOs in a period favorable for IPO investing. Of course, such
favorable returns involve accepting the risk of volatility, and there is no
assurance that the Fund's investment in IPOs will have the same effect on
performance as it did in 1999.
(5)On 8/7/98, Mid Cap Growth Fund became the successor by merger to Piper
Emerging Growth Fund, a series of Piper Funds Inc. Prior to the merger, Mid
Cap Growth Fund had no assets or liabilities. Performance presented prior to
8/7/98 represents that of Piper Emerging Growth Fund.
(6)An unmanaged index that measures the performance of those Russell Midcap
Index companies with higher price-to-book ratios and higher forecasted growth
values.
48
PERFORMANCE COMPARISON: SMALL CAP GROWTH FUND AND SMALL CAP CORE FUND - CLASS A
SHARES
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31 EACH YEAR
SMALL CAP CORE FUND
[BAR CHART]
23.58% 2.26% 17.14% 10.50% 20.51% -8.07% 16.70% 19.71% 12.08%
- ---------------------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998 1999 2000 2001
Best Quarter: Q4 '01 27.35%
Worst Quarter: Q3 '98 (24.80)%
Year-to-date total return as of September 30, 2002 was (25.05)%
SMALL CAP GROWTH FUND
[BAR CHART]
11.47% 10.98% -2.44% 20.20% 11.68% 29.23% 7.73% 66.76% -5.97% -20.60%
- --------------------------------------------------------------------------------------------------------
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Best Quarter: Q4 '99 51.34%
Worst Quarter: Q3 '01 (28.97)%
Year-to-date total return as of September 30, 2002 was (34.84)%
AVERAGE ANNUAL TOTAL RETURNS AS OF DECEMBER 31, 2001
- -------------------------------------------------- ----------- ----------- ---------- ------------- ------------
Inception Since
SMALL CAP CORE FUND(1) Date 1 Year 5 Years 10 Years Inception
- -------------------------------------------------- ----------- ----------- ---------- ------------- ------------
Class A - Return Before Taxes 5/6/92 5.93% 10.39% N/A 12.51%
Return After Taxes on Distributions 4.55% 8.11% N/A 9.50%
Return After Taxes on Distributions
and Sale of Fund Shares 4.71% 7.78% N/A 9.03%
Class B - Return Before Taxes 3/6/95 6.36% 10.63% N/A 11.09%
Class C - Return Before Taxes(2) 9/24/01 N/A N/A N/A N/A
Class S - Return Before Taxes 1/3/94 12.36% 11.70% N/A 10.95%
Class Y - Return Before Taxes 5/6/92 12.39% 11.97% N/A 13.42%
Standard & Poor's SmallCap 600 Index(3) (reflects
no deduction for fees, expenses or taxes) N/A 6.54% 10.66% N/A N/A
- -------------------------------------------------- ----------- ----------- ---------- ------------- ------------
SMALL CAP GROWTH FUND(4,5)
- -------------------------------------------------- ----------- ----------- ---------- ------------- ------------
Class A - Return Before Taxes 3/16/87 (24.97)% 10.37% 10.25% N/A
Return After Taxes on Distributions (24.97)% 7.57% 7.47% N/A
Return After Taxes on Distributions
and Sale of Fund Shares (15.21)% 7.96% 7.61% N/A
Class B - Return Before Taxes 7/31/98 (25.18)% N/A N/A 7.35%
Class C - Return Before Taxes 2/1/99 (22.83)% N/A N/A 6.03%
Class S - Return Before Taxes 3/16/87 (20.60)% 11.63% 10.88% N/A
Class Y - Return Before Taxes 7/31/98 (20.42)% N/A N/A 9.13%
Russell 2000 Growth Index(6) (reflects no
deduction for fees, expenses or taxes) N/A (9.23)% 2.87% 7.19% N/A
- -------------------------------------------------- ----------- ----------- ---------- ------------- ------------
(1)On 9/24/01, Small Cap Core Fund became the successor by merger to Firstar
Small Cap Core Equity Fund, a series of Firstar Funds, Inc. Prior to the
merger, Small Cap Core Fund had no assets or liabilities. Performance
presented prior to 9/24/01 represents that of Firstar Small Cap Core Equity
Fund. Firstar Small Cap Core Equity Fund was organized on 11/27/00 and, prior
to that, was a separate series of Mercantile Mutual Funds, Inc.
49
(2)No information is presented for Class C shares because such shares were not
offered for a full calendar year.
(3)An unmanaged, capitalization weighted index that measures the performance of
selected U.S. stocks with small market capitalizations.
(4)Small Cap Growth Fund's 1999 returns were higher due in part to its strategy
of investing in IPOs in a period favorable for IPO investing. Of course, such
favorable returns involve accepting the risk of volatility, and there is no
assurance that the fund's future investment in IPOs will have the same effect
on performance as it did in 1999.
(5)On 7/31/98, the Small Cap Growth Fund became the successor by merger to the
Piper Small Company Growth Fund, a series of Piper Funds Inc. Performance
presented prior to 7/31/98 represents that of the Piper Small Company Growth
Fund. On 9/21/96, shareholders approved a change in the fund's investment
objective from high total investment return consistent with prudent
investment risk to long-term capital appreciation. In connection with this
change, the fund's investment policies were revised.
(6)An unmanaged index that measures the performance of those Russell 2000 Index
companies with higher price-to-book ratios and higher forecasted growth
values.
50
PERFORMANCE COMPARISON: EMERGING MARKETS FUND AND INTERNATIONAL FUND - CLASS A
SHARES
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31 EACH YEAR
INTERNATIONAL FUND
[BAR CHART]
9.41% 9.98% 4.68% 17.42% 50.47% -15.58% -23.52
- --------------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000 2001
Best Quarter: Q4 '99 27.41%
Worst Quarter: Q3 '99 (17.12)%
Year-to-date total return as of September 30, 2002 was (23.08)%.
EMERGING MARKETS FUND
[BAR CHART]
- -18.10% -21.77% 29.31% -1.27% -30.08% 60.16% -22.89% -11.05%
- --------------------------------------------------------------------------------
1994 1995 1996 1997 1998 1999 2000 2001
Best Quarter: Q4 '99 49.04%
Worst Quarter: Q1 `95 (30.83)%
Year-to-date total return as of September 30, 2002 was (10.12)%.
AVERAGE ANNUAL TOTAL RETURNS AS OF DECEMBER 31, 2001
- ----------------------------------------------------------- ----------- ------------- -------------- -------------
Inception Since
INTERNATIONAL FUND(1) Date 1 Year 5 Years Inception
- ----------------------------------------------------------- ----------- ------------- -------------- -------------
Class A - Return Before Taxes 5/2/94 (27.75)% 2.45% 3.91%
Return After Taxes on Distributions (27.75)% 0.33% 2.35%
Return After Taxes on Distributions
and Sale of Fund Shares (16.90)% 1.28% 2.64%
Class B - Return Before Taxes 3/6/95 (27.93)% 2.55% 5.36%
Class C - Return Before Taxes(2) 9/24/01 N/A N/A N/A
Class S - Return Before Taxes 4/24/94 (23.45)% 3.62% 4.90%
Class Y - Return Before Taxes 4/4/94 (23.38)% 3.90% 5.09%
Morgan Stanley Capital International Europe,
Australasia, Far East Index(3) (reflects no deduction
for fees, expenses or taxes) N/A (21.21)% 1.17% N/A
- ----------------------------------------------------------- ----------- ------------- -------------- -------------
EMERGING MARKETS FUND(4)
- ----------------------------------------------------------- ----------- ------------- -------------- -------------
Class A - Return Before Taxes 11/9/93 (15.92)% (6.44)% (5.04)%
Return After Taxes on Distributions (15.92)% (6.46)% (5.06)%
Return After Taxes on Distributions
and Sale of Fund Shares (9.69)% (5.02)% (3.88)%
Class B - Return Before Taxes 8/7/98 (16.30)% N/A (3.07)%
Class C - Return Before Taxes 2/1/00 (13.53)% N/A (18.31)%
Class S - Return Before Taxes(2) 9/24/01 N/A N/A N/A
Class Y - Return Before Taxes 8/7/98 (10.92)% N/A (1.17)%
Morgan Stanley Capital International Emerging Markets
Free Index(5) (reflects no deduction for fees, expenses
or taxes) N/A (2.84)% (5.83)% N/A
- ----------------------------------------------------------- ----------- ------------- -------------- -------------
(1)On 7/1/01, Clay Finlay, Inc. was hired as sub-advisor to manage International
Fund's assets. On 9/24/01, International Fund merged with Firstar
International Growth Fund and Firstar International Value Fund, both
sub-advised by Clay Finlay, Inc. Performance history prior to 9/24/01
represents that of Firstar International Growth Fund.
(2)No information is presented for Class C shares of International Fund or Class
S shares of Emerging Markets Fund because such shares were not offered for a
full calendar year.
51
(3)An unmanaged index including approximately 1,100 companies representing the
stock markets of 20 European countries, Australia, New Zealand, Japan, Hong
Kong and Singapore.
(4)On 8/7/98, Emerging Markets Fund became the successor by merger to the Piper
Emerging Markets Growth Fund. Prior to the merger, Emerging Markets Fund had
no assets or liabilities. Performance presented from 6/21/96 to 8/7/98 is
that of Emerging Markets Growth Fund, a series of Piper Global Funds Inc. for
which Edinburgh Fund Managers acted as sub-advisor. Performance presented
prior to 6/21/96 is that of the Hercules Latin Value Fund, a series of
Hercules Funds, Inc. for which Banker's Trust Company acted as sub-advisor.
(5)An unmanaged index of securities from emerging markets that are open to
foreign investors.
52
PERFORMANCE COMPARISON: BOND IMMDEX(TM) FUND AND FIXED INCOME FUND - CLASS A
SHARES
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31 EACH YEAR
FIXED INCOME FUND
[BAR CHART]
6.46 9.65% -2.42% 17.02% 3.20% 8.47% 8.67% -3.00% 10.79% 7.84%
- --------------------------------------------------------------------------------
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Best Quarter: Q2 '95 6.06%
Worst Quarter: Q1 '94 (2.04)%
Year-to-date total return as of September 30, 2002 was 6.58%.
BOND IMMDEX(TM) FUND
[BAR CHART]
2.79% 9.16% 8.94% -1.64% 11.61% 6.66%
- --------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001
Best Quarter: Q2 '95 6.58%
Worst Quarter: Q1 '96 (2.33)%
Year-to-date total return as of September 30, 2002 was 7.49%.
AVERAGE ANNUAL TOTAL RETURNS AS OF DECEMBER 31, 2001
- --------------------------------------------- ----------- ------------- -------------- ------------- ------------
Inception Since
FIXED INCOME FUND Date 1 Year 5 Years 10 Years Inception
- --------------------------------------------- ----------- ------------- -------------- ------------- ------------
Class A - Return Before Taxes 12/22/87 3.30% 5.52% 6.05% N/A
Return After Taxes on Distributions 1.12% 3.19% 3.58% N/A
Return After Taxes on Distributions
and Sale of Fund Shares 1.97% 3.24% 3.60% N/A
Class B - Return Before Taxes 8/15/94 2.02% 5.34% N/A 6.18%
Class C - Return Before Taxes 2/1/99 5.01% N/A N/A N/A
Class S - Return Before Taxes 12/22/87 7.84% 6.44% 6.51% N/A
Class Y - Return Before Taxes 2/4/94 8.10% 6.72% N/A 6.39%
Lehman Aggregate Bond Index(1) (reflects
no deduction for fees, expenses or taxes) N/A (21.21)% 1.17% N/A N/A
- --------------------------------------------- ----------- ------------- -------------- ------------- ------------
BOND IMMDEX(TM) FUND(2)
- --------------------------------------------- ----------- ------------- -------------- ------------- ------------
Class A - Return Before Taxes 1/9/95 2.13% 5.92% N/A 7.30%
Return After Taxes on Distributions (0.16)% 3.45% N/A 4.77%
Return After Taxes on Distributions
and Sale of Fund Shares 1.29% 3.49% N/A 4.61%
Class B - Return Before Taxes 3/1/99 0.91% N/A N/A 4.62%
Class C - Return Before Taxes(3) 9/24/01 N/A N/A N/A N/A
Class S - Return Before Taxes 12/11/00 6.67% N/A N/A 7.78%
Class Y - Return Before Taxes 12/29/89 6.96% 7.11% 7.23% N/A
Lehman Government/Credit Bond
Index(4) (reflects no deduction for fees,
expenses or taxes) N/A 8.50% 7.36% 7.27% N/A
- --------------------------------------------- ----------- ------------- -------------- ------------- ------------
(1)An unmanaged index composed of the Lehman Government/Credit Bond Index, the
Lehman Mortgage Backed Securities Index and the Lehman Asset Backed
Securities Index. The Lehman Government/Credit Bond Index is comprised of
Treasury securities, other securities issued or guaranteed by the U.S.
government or its agencies or instrumentalities, including U.S. agency
mortgage securities, and investment-grade corporate debt securities. The
Lehman Mortgage Backed Securities Index is comprised of the mortgage-backed
pass-through securities of Ginnie Mae, Fannie Mae, and Freddie Mac. The
Lehman Asset-Backed Index is comprised of debt securities rated investment
grade or higher that are backed by credit card, auto and home equity loans.
53
(2)On 9/24/01, Bond IMMDEX(TM) Fund became the successor by merger to the
Firstar Bond IMMDEX(TM) Fund, a series of Firstar Funds, Inc. Prior to the
merger, Bond IMMDEX(TM) Fund had no assets or liabilities. Performance
presented prior to 9/24/01 represents that of the Firstar Bond IMMDEX(TM)
Fund.
(3)No information is presented for Class C shares because such shares were not
offered for a full calendar year.
(4)An unmanaged index of Treasury securities, other securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities,
including U.S. agency mortgage securities, and investment-grade corporate
debt securities, in each case with maturities of not less than one year.
54
PERFORMANCE COMPARISON: HIGH YIELD BOND FUND AND STRATEGIC INCOME FUND - CLASS Y
SHARES
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31 EACH YEAR
STRATEGIC INCOME FUND
[BAR CHART]
3.32% 3.17% 6.95%
- --------------------------------------------------------------------------------
1999 2000 2001
Best Quarter: Q4 '01 4.99%
Worst Quarter: Q3 '01 (1.83)%
Year-to-date total return as of September 30, 2002 was ____%.
Because High Yield Bond Fund shares were not offered for a full calendar year,
no performance information is presented for High Yield Bond Fund.
Best Quarter: Q4 '01 4.99%
Worst Quarter: Q3 '01 (1.83)%
Year-to-date total return as of September 30, 2002 was ____%.
AVERAGE ANNUAL TOTAL RETURNS AS OF DECEMBER 31, 2001
- -------------------------------------------------------------------------- ----------- -------------- ------------
Inception Since
STRATEGIC INCOME FUND Date 1 Year Inception
- -------------------------------------------------------------------------- ----------- -------------- ------------
Class A - Return Before Taxes 7/24/98 2.14% 2.05%
Class B - Return Before Taxes 7/24/98 2.02% 1.89%
Class C - Return Before Taxes 2/1/99 3.69% 3.27%
Class S - Return Before Taxes 7/24/98 6.69% 3.34%
Class Y - Return Before Taxes 7/24/98 6.95% 3.62%
Return After Taxes on Distributions 3.34% 0.43%
Return After Taxes on Distributions
and Sale of Fund Shares 4.18% 1.27%
Lehman Aggregate Bond Index(1) (reflects no deduction for fees, expenses
or taxes) N/A 8.44% N/A
- -------------------------------------------------------------------------- ----------- -------------- ------------
(1)An unmanaged index composed of the Lehman Government/Credit Bond Index, the
Lehman Mortgage Backed Securities Index and the Lehman Asset Backed
Securities Index. The Lehman Government/Credit Bond Index is comprised of
Treasury securities, other securities issued or guaranteed by the U.S.
government or its agencies or instrumentalities, including U.S. agency
mortgage securities, and investment-grade corporate debt securities. The
Lehman Mortgage Backed Securities Index is comprised of the mortgage-backed
pass-through securities of Ginnie Mae, Fannie Mae, and Freddie Mac. The
Lehman Asset-Backed Index is comprised of debt securities rated investment
grade or higher that are backed by credit card, auto and home equity loans.
55
ADDITIONAL PERFORMANCE INFORMATION
Information concerning the factors that materially affected each Fund's
performance during the fiscal year ended September 30, 2002, is excerpted from
the Funds' Annual Report for such year and is included in Appendix B to this
Prospectus/Proxy Statement.
FORM OF ORGANIZATION
Each Fund is a separate series of FAIF, a Maryland corporation that is
registered as an open-end management investment company under the 1940 Act. FAIF
was incorporated in the State of Maryland on August 20, 1987, under the name
"SECURAL Mutual Funds, Inc." The Board of Directors and shareholders, at
meetings held January 10, 1991, and April 2, 1991, respectively, approved
amendments to the Articles of Incorporation providing that the name "SECURAL
Mutual Funds, Inc." be changed to "First American Investment Funds, Inc." FAIF
is organized as a series fund and currently issues 43 series, including the
Funds. Each series of shares represents a separate investment portfolio with its
own investment objective and policies.
INVESTMENT ADVISORY SERVICES
Each Fund has the same investment advisor, U.S. Bancorp Asset
Management, Inc. (the "Advisor"). Pursuant to an Investment Advisory Agreement
with FAIF, the Advisor manages the Funds' business and investment activities,
subject to the authority of the Board of Directors. A team of portfolio managers
employed by the Advisor, or by a sub-advisor retained by the Advisor, manages
each Acquiring Fund.
Investment Advisor. The Advisor is located at 800 Nicollet Mall,
Minneapolis, MN 55402. The Advisor is a subsidiary of U.S. Bank National
Association (which, in turn, is a subsidiary of U.S. Bancorp, formerly Firstar
Corporation). The Advisor succeeded First American Asset Management ("FAAM"), a
division of U.S. Bank National Association, on May 1, 2001, when the business
and assets of FAAM and Firstar Investment Research & Management Company, LLC
("FIRMCO"), a subsidiary of U.S. Bancorp, were combined to form the Advisor. The
Advisor provides investment management services to individuals and institutions,
including corporations, foundations, pensions and retirement plans. As of
September 30, 2002, the Advisor and its affiliates had more than $111 billion in
assets under management, including investment company assets of more than $51
billion.
As described above in "Comparison of Fees," each Fund pays the Advisor
a monthly fee for providing investment advisory services. The Advisor may, at
its discretion, reduce or waive its fee or reimburse each Fund for certain of
its other expenses in order to reduce the expense ratios from time to time.
Unless otherwise agreed upon, the Advisor may also reduce or cease these
voluntary waivers and reimbursements at any time.
Sub-Advisors. Clay Finlay, Inc. ("Clay Finlay"), located at 200 Park
Avenue, New York, NY 10166, is the sub-advisor to the International Fund and is
responsible for the investment and reinvestment of the Fund's assets and the
placement of brokerage transactions for the Fund.
56
Clay Finlay has been retained by the Advisor and is paid a portion of the
advisory fee. Clay Finlay is an international equity investment management firm
that was founded in 1982 and offers a full range of global, international and
regional equity mandates. Clay Finlay is a wholly owned subsidiary of Old Mutual
plc., a publicly owned international financial services group listed on the
London Stock Exchange. As of September 30, 2002, Clay Finlay had $4.7 billion in
assets under management.
Federated Global Investment Management Corp. ("Federated"), a
subsidiary of Federated Investors, Inc., is a sub-advisor to the Strategic
Income Fund. Federated is located at 175 Water Street, New York, New York
10038-4964. Federated has been retained by the Advisor and is paid a portion of
the advisory fee. Federated and other subsidiaries of Federated Investors serve
as investment advisors to a number of investment companies and private accounts.
As of September 30, 2002, Federated Investors, Inc. managed approximately $181
billion in assets. Federated will be terminated as the sub-advisor to the
Strategic Income Fund, effective January 31, 2003, after which time Strategic
Income Fund will be renamed High Income Bond Fund and managed by the Advisor.
Marvin & Palmer Associates ("Marvin & Palmer"), 1201 North Market
Street, Suite 2300, Wilmington, Delaware 19801, is the sub-advisor to Emerging
Markets Fund and is responsible for the investment and reinvestment of the
Fund's assets and the placement of brokerage transactions for the Fund. Marvin &
Palmer has been retained by the Fund's Advisor and is paid a portion of the
advisory fee. A privately held company founded in 1986, Marvin & Palmer is
engaged in the management of global, non-U.S., domestic, and emerging markets
equity portfolios, principally for institutional accounts. As of September 30,
2002, the sub-advisor managed a total of approximately $5.8 billion in
investments.
Portfolio Management. Except for Strategic Income Fund, Emerging
Markets Fund and International Fund, each Fund's investments are managed by a
team of persons employed by the Advisor. In the case of Strategic Income Fund,
the Advisor manages the Fund's investments in U.S. government obligations,
investment grade and high-yield domestic debt obligations, and U.S.
dollar-denominated foreign corporate debt obligations, while a team of persons
employed by Federated currently manages the Fund's investments in investment
grade and high yield foreign government and foreign corporate debt obligations.
Effective January 31, 2003, Strategic Income Fund will be renamed High Income
Bond Fund and its investments will be managed by a team of persons employed by
the Advisor. Emerging Markets Fund's investments are managed by a team of
persons employed by Marvin & Palmer. International Fund's investments are
managed by a team of persons employed by Clay Finlay.
57
OPERATIONS OF THE ACQUIRING FUNDS FOLLOWING THE REORGANIZATIONS
Based on its review of each Fund's investment portfolio, the Advisor
believes that most of the assets held by each Acquired Fund will be consistent
with the corresponding Acquiring Fund's investment objective and policies and
thus can be transferred to and held by that Acquiring Fund if the Reorganization
Plan is approved for those Funds. If, however, any Acquired Fund has any assets
that the corresponding Acquiring Fund may not hold, those assets will be sold
prior to the Reorganizations. The proceeds of those sales will be held in
temporary investments or reinvested in assets that the corresponding Acquiring
Fund may hold. The possible need for an Acquired Fund to dispose of assets prior
to the Reorganizations could result in selling securities at a disadvantageous
time and could result in an Acquired Fund's realizing losses that would not
otherwise have been realized. Alternatively, these sales could result in an
Acquired Fund's realizing gains that would not otherwise have been realized, the
net proceeds of which would be included in a distribution to its shareholders
prior to the Reorganizations.
FEDERAL INCOME TAX CONSEQUENCES OF THE REORGANIZATIONS
As a condition to the closing of each Reorganization, FAIF will receive
an opinion from Kirkpatrick & Lockhart LLP to the effect that the Reorganization
will qualify as a tax-free reorganization for federal income tax purposes.
Accordingly, shareholders will not recognize taxable gain or loss as a direct
result of a Reorganization. Each Acquired Fund shareholder's aggregate tax basis
in the Acquiring Fund shares it receives in a Reorganization will be the same as
the aggregate tax basis in the Acquired Fund shares the shareholder
constructively exchanges therefor, and the shareholder's holding period for
those Acquiring Fund shares will include its holding period for those Acquired
Fund shares. In addition, an Acquiring Fund's aggregate tax basis in the assets
it receives from the corresponding Acquired Fund will be the same as the
latter's aggregate tax basis therein, and the Acquiring Fund's holding period
for those assets will include that Acquired Fund's holding period therefor
immediately before the Reorganization.
If an Acquired Fund sells securities prior to the closing of a
Reorganization, it may recognize net gains or losses. Any net gains recognized
on those sales would increase the amount of any distribution that the Acquired
Fund must make to its shareholders prior to that closing. You should separately
consider any state, local and other tax consequences in consultation with your
tax advisor. See "Information About the Reorganizations - Federal Income Tax
Considerations" below for more detailed information about federal income tax
considerations.
PRINCIPAL RISK FACTORS
As indicated above, the investment objectives of each Acquired Fund are
identical or substantially similar to those of its corresponding Acquiring Fund.
In addition, the principal investment strategies of each Acquired Fund (with the
exception of Health Sciences Fund) are similar to those of the corresponding
Acquiring Fund. Because of these similarities, an investment in each of the
Acquiring Funds will be subject to similar, and in some cases identical,
58
risks of investing in the Acquired Fund. The principal risk factors associated
with each Acquired Fund and those of the corresponding Acquiring Fund are set
forth below.
COMPARISON OF RISKS: LARGE CAP GROWTH FUND AND LARGE CAP CORE FUND
Investments in Large Cap Growth Fund and Large Cap Core Fund are
subject to the following principal risks:
o Risks of Common Stocks. Stocks may decline significantly in
price over short or extended periods of time. Price changes
may occur in the market as a whole, or they may occur in only
a particular company, industry, or sector of the market. Each
Fund invests in growth stocks and/or large-capitalization
stocks which may underperform the market as a whole.
o Foreign Security Risk. Securities of foreign issuers, even
when dollar-denominated and publicly traded in the U.S., may
involve risks not associated with the securities of domestic
issuers, including the risks of adverse currency fluctuations
and of political or social instability or diplomatic
developments that could adversely affect the securities.
o Risks of Securities Lending. To generate additional income,
each Fund may lend securities representing up to one-third of
the value of its total assets to broker-dealers, banks, and
other institutions. When a Fund engages in this practice, it
is subject to the risk that the other party to a securities
lending agreement will default on its obligations.
o Risks of Derivative Instruments. A Fund will suffer a loss in
connection with its use of derivatives such as options,
futures contracts, and options on futures contracts if
securities prices do not move in the direction anticipated by
the Advisor when entering into the derivative instrument.
COMPARISON OF RISKS: HEALTH SCIENCES FUND AND LARGE CAP CORE FUND
Investments in Health Sciences Fund and Large Cap Core Fund are subject
to the following principal risks:
o Risks of Common Stocks. Stocks may decline significantly in
price over short or extended periods of time. Price changes
may occur in the market as a whole, or they may occur in only
a particular company, industry, or sector of the market.
o Foreign Security Risk. Securities of foreign issuers, even
when dollar-denominated and publicly traded in the U.S., may
involve risks not associated with the securities of domestic
issuers, including the risks of adverse currency fluctuations
and of political or social instability or diplomatic
developments that could adversely affect the securities.
59
o Risks of Securities Lending. To generate additional income,
each Fund may lend securities representing up to one-third of
the value of its total assets to broker-dealers, banks, and
other institutions. When a Fund engages in this practice, it
is subject to the risk that the other party to a securities
lending agreement will default on its obligations.
o Risks of Derivative Instruments. A Fund will suffer a loss in
connection with its use of derivatives such as options,
futures contracts, and options on futures contracts if
securities prices do not move in the direction anticipated by
the Advisor when entering into the derivative instrument.
Because Health Sciences Fund is a non-diversified fund which focuses
its investments on a specific sector of the market - health care or medicine -
it is subject to non-diversification and sector-specific risks. In addition,
because it employs different investment strategies than Large Cap Core Fund,
Health Sciences Fund is subject to additional principal risks. Health Sciences
Fund is subject to the following additional principal risks:
o Risks of the Health Sciences Sector. Because Health Sciences
Fund invests primarily in stocks related to health care or
medicine, it is particularly susceptible to risks associated
with the health sciences industries. Many products and
services in the health sciences industries may become rapidly
obsolete due to technological and scientific advances. In
addition, governmental regulation may have a material effect
on the demand for products and services in these industries.
o Risks of Non-Diversification. Health Sciences Fund is
non-diversified. This means that it may invest a larger
portion of its assets in a limited number of companies than a
diversified fund. Because a relatively high percentage of the
Fund's assets may be invested in the securities of a limited
number of issuers, and because those issuers will be in the
same or related economic sectors, the Fund's portfolio
securities may be more susceptible to any single economic,
technological or regulatory occurrence than the portfolio
securities of a diversified fund.
o Risks of Development Stage, Small- and Mid-Cap Stocks. Stocks
of development stage and small-capitalization companies
involve substantial risk. These stocks historically have
experienced greater price volatility than stocks of more
established and larger-capitalization companies, and they may
be expected to do so in the future. While stocks of mid-cap
companies may be slightly less volatile than those of
small-cap companies, they still involve substantial risk and
their prices may be subject to more abrupt or erratic
movements than those of larger, more established companies or
the market averages in general.
o Risks of Real Estate Investment Trusts ("REITs"). REITs will
be affected by changes in the values of and incomes from the
properties they own or the credit quality of the mortgages
they hold. REITs are dependent on specialized management
skills which may affect their ability to generate cash flow
for operating purposes and to make distributions to
shareholders or unitholders.
60
o Risks of IPOs. Companies involved in IPOs generally have
limited operating histories and prospects for future
profitability are uncertain. Prices of IPOs may also be
unstable because of the absence of a prior public market, the
small number of shares available for trading and limited
investor information. IPOs will frequently be sold within 12
months of purchase. This may result in increased short-term
capital gains, which will be taxable to shareholders as
ordinary income.
COMPARISON OF RISKS: MID CAP GROWTH FUND AND MID CAP CORE FUND
Investments in Mid Cap Growth Fund and Mid Cap Core Fund are subject to
the same principal risks, which are as follows:
o Risks of Common Stocks. Stocks may decline significantly in
price over short or extended periods of time. Price changes
may occur in the market as a whole, or they may occur in only
a particular company, industry, or sector of the market. In
addition, growth stocks and/or mid-cap stocks may underperform
the market as a whole.
o Risks of Mid-Cap Stocks. While stocks of mid-cap companies may
be slightly less volatile than those of small-cap companies,
they still involve substantial risk and their prices may be
subject to more abrupt or erratic movements than those of
larger, more established companies or the market averages in
general.
o Risks of IPOs. Companies involved in IPOs generally have
limited operating histories, and prospects for future
profitability are uncertain. Prices of IPOs may also be
unstable because of the absence of a prior public market, the
small number of shares available for trading, and limited
investor information. IPOs will frequently be sold within 12
months of purchase. This may result in increased short-term
capital gains, which will be taxable to shareholders as
ordinary income.
o Foreign Security Risk. Securities of foreign issuers, even
when dollar-denominated and publicly traded in the U.S., may
involve risks not associated with the securities of domestic
issuers, including the risks of adverse currency fluctuations
and of political or social instability, or diplomatic
developments that could adversely affect the securities.
o Risks of Securities Lending. To generate additional income,
the Fund may lend securities representing up to one-third of
the value of its total assets to broker-dealers, banks, and
other institutions. When the Fund engages in this practice, it
is subject to the risk that the other party to a securities
lending agreement will default on its obligations.
o Risks of Derivative Instruments. The Fund will suffer a loss
in connection with its use of derivatives such as options,
futures
61
contracts, and options on futures contracts if securities
prices do not move in the direction anticipated by the Fund's
Advisor when entering into the derivative instrument.
COMPARISON OF RISKS: SMALL CAP GROWTH FUND AND SMALL CAP CORE FUND
Investments in Small Cap Growth Fund and Small Cap Core Fund are
subject to the same principal risks, which are as follows:
o Risks of Common Stocks. Stocks may decline significantly in
price over short or extended periods of time. Price changes
may occur in the market as a whole, or they may occur in only
a particular company, industry, or sector of the market. In
addition, growth stocks and/or small-cap stocks may
underperform the market as a whole.
o Risks of Small-Cap Stocks. Stocks of small-capitalization
companies involve substantial risk. These stocks historically
have experienced greater price volatility than stocks of more
established and larger-capitalization companies, and they may
be expected to do so in the future.
o Risks of IPOs. Companies involved in IPOs generally have
limited operating histories, and prospects for future
profitability are uncertain. Prices of IPOs may also be
unstable because of the absence of a prior public market, the
small number of shares available for trading, and limited
investor information. IPOs will frequently be sold within 12
months of purchase. This may result in increased short-term
capital gains, which will be taxable to shareholders as
ordinary income.
o Foreign Security Risk. Securities of foreign issuers, even
when dollar-denominated and publicly traded in the U.S., may
involve risks not associated with the securities of domestic
issuers, including the risks of adverse currency fluctuations
and of political or social instability, or diplomatic
developments that could adversely affect the securities.
o Risks of Securities Lending. To generate additional income,
the Fund may lend securities representing up to one-third of
the value of its total assets to broker-dealers, banks, and
other institutions. When the Fund engages in this practice, it
is subject to the risk that the other party to a securities
lending agreement will default on its obligations.
o Risks of Derivative Instruments. The Fund will suffer a loss
in connection with its use of derivatives such as options,
futures contracts, and options on futures contracts if
securities prices do not move in the direction anticipated by
the Fund's Advisor when entering into the derivative
instrument.
COMPARISON OF RISKS: EMERGING MARKETS FUND AND INTERNATIONAL FUND
62
Investments in Emerging Markets Fund and International Fund are subject
to the following principal risks:
o Risks of Equity Securities. Equity securities may decline
significantly in price over short or extended periods of time.
Price changes may occur in the world market as a whole, or
they may occur in only a particular country, company,
industry, or sector of the world market.
o Risks of International Investing. International investing
involves risks not typically associated with domestic
investing. Because of these risks, and because of the
sub-advisor's ability to invest substantial portions of the
Fund's assets in a small number of countries, the Fund may be
subject to greater volatility than mutual funds that invest
principally in domestic securities. Risks of international
investing include adverse currency fluctuations, potential
political and economic instability, limited liquidity and
volatile prices of non-U.S. securities, limited availability
of information regarding non-U.S. companies, investment and
repatriation restrictions, and foreign taxation.
o Risks of Emerging Markets. The risks of international
investing are particularly significant in emerging markets.
Investing in emerging markets generally involves exposure to
economic structures that are less diverse and mature, and to
political systems that are less stable, than those of
developed countries. In addition, issuers in emerging markets
typically are subject to a greater degree of change in
earnings and business prospects than are companies in
developed markets.
o Risks of Smaller-Capitalization Companies. Stocks of
small-capitalization companies involve substantial risk and
their prices may be subject to more abrupt or erratic
movements than those of larger, more established companies or
of market averages in general.
o Risks of Foreign Currency Hedging Transactions. If the
sub-advisor's forecast of exchange rate movements is
incorrect, the Fund may realize losses on its foreign currency
transactions. In addition, the Fund's hedging transactions may
prevent the Fund from realizing the benefits of a favorable
change in the value of foreign currencies.
o Risks of Derivative Instruments. The Fund will suffer a loss
in connection with its use of derivatives such as options,
futures contracts, and options on futures contracts if
securities prices do not move in the direction anticipated by
the Fund's Advisor when entering into the derivative
instrument.
International Fund is subject to the following additional principal
risk:
o Risks of Securities Lending. To generate additional income,
the Fund may lend securities representing up to one-third of
the value of its total assets to broker-dealers, banks, and
other institutions. When the Fund engages in this practice, it
63
is subject to the risk that the other party to a securities
lending agreement will default on its obligations.
COMPARISON OF RISKS: BOND IMMDEX(TM) FUND AND FIXED INCOME FUND
Investments in Bond IMMDEX(TM) Fund and Fixed Income Fund are subject
to the following principal risks:
o Interest Rate Risk. Debt securities typically decrease in
value when interest rates rise. This risk is usually greater
for longer-term debt securities.
o Income Risk. The Fund's income could decline due to falling
market interest rates.
o Credit Risk. An issuer of debt securities may not make timely
principal or interest payments on its securities, or the other
party to a contract may default on its obligations.
o Call Risk. During periods of falling interest rates, a bond
issuer may "call" - or repay - its high-yielding bonds before
their maturity date. The Fund would then be forced to invest
the unanticipated proceeds at lower interest rates, resulting
in a decline in the Fund's income.
o Risks of Mortgage- and Asset-Backed Securities. Falling
interest rates could cause faster than expected prepayments of
the obligations underlying mortgage- and asset-backed
securities, which the Fund would have to invest at lower
interest rates. On the other hand, rising interest rates could
cause prepayments of the obligations to decrease, extending
the life of mortgage- and asset-backed securities with lower
payment rates.
o Foreign Security Risk. Securities of foreign issuers, even
when dollar-denominated and publicly traded in the U.S., may
involve risks not associated with the securities of domestic
issuers, including the risks of adverse currency fluctuations
and of political or social instability, or diplomatic
developments that could adversely affect the securities.
o Risks of Securities Lending. To generate additional income,
the Fund may lend securities representing up to one-third of
the value of its total assets to broker-dealers, banks and
other institutions. When the Fund engages in this practice, it
is subject to the risk that the other party to a securities
lending agreement will default on its obligations.
o Risks of Derivative Instruments. The Fund will suffer a loss
in connection with its use of derivatives such as options,
futures contracts, and options on futures contracts if
securities prices do not move in the direction anticipated by
the Fund's Advisor when entering into the derivative
instrument.
64
Bond IMMDEX(TM) Fund is subject to the following additional principal
risk:
o Risk of Underperforming the Index. While the Advisor believes
purchasing securities which are not in the Lehman Brothers
Government/Credit Bond Index (the "Lehman Index") or not
consistent with the "mix" of the Lehman Index provides the
opportunity to achieve an enhanced gross return compared to
the Lehman Index, the Advisor may err in its choices of
securities or portfolio mixes. Furthermore, because of the
smaller number of issues held by the Fund compared to the
Lehman Index, material events affecting the Fund's portfolio
(for example, an issuer's decline in credit quality) may
influence the performance of the Fund to a greater degree than
such events will influence the Lehman Index.
Fixed Income Fund is subject to the following additional principal
risk:
o Risks of Dollar Roll Transactions. The use of mortgage dollar
rolls could increase the volatility of the Fund's share price.
It could also diminish the Fund's investment performance if
the Advisor does not predict mortgage prepayments and interest
rates correctly.
COMPARISON OF RISKS: HIGH YIELD BOND FUND AND STRATEGIC INCOME FUND
Investments in High Yield Bond Fund and Strategic Income Fund are
subject to the following principal risks:
o Interest Rate Risk. Debt securities typically decrease in
value when interest rates rise. This risk is usually greater
for longer-term debt securities.
o Credit Risk. An issuer of debt securities may not make timely
principal or interest payments on its securities, or the other
party to a contract may default on its obligations. If an
issuer defaults, the Fund will lose money. Companies issuing
high yield bonds are not as strong financially as those with
higher credit ratings, so the bonds are usually considered
speculative investments. These companies are more vulnerable
to financial setbacks and recession than more creditworthy
companies, which may impair their ability to make interest
payments. Therefore, the credit risk for each Fund's portfolio
may increase when the U.S. economy slows or enters a
recession.
o Income Risk. The Fund's income could decline due to falling
market interest rates.
o Call Risk. During periods of falling interest rates, a bond
issuer may "call" - or repay - its high-yielding bonds before
their maturity date. The Fund would then be forced to invest
the unanticipated proceeds at lower interest rates, resulting
in a decline in the Fund's income.
o Risks of High-Yield Securities. Securities rated lower than
investment grade or unrated securities of comparable quality
are commonly called "high-yield"
65
securities or "junk bonds." High Yield Bond Fund invests
primarily in high-yield securities and a significant portion
of Strategic Income Fund's portfolio may consist of high yield
securities. High-yield securities have more volatile prices
and carry more risk to principal than investment grade
securities. High-yield securities may be more susceptible to
real or perceived adverse economic conditions than investment
grade securities. In addition, the secondary trading market in
high-yield securities may be less liquid.
o Risks of Foreign Securities. Investing in foreign securities
involves risks not typically associated with U.S. investing.
Risks of foreign investing include adverse currency
fluctuations, potential political and economic instability,
limited liquidity and volatile prices of non-U.S. securities,
limited availability of information regarding non-U.S.
companies, investment and repatriation restrictions and
foreign taxation.
o Risks of Securities Lending. To generate additional income,
the Fund may lend securities representing up to one-third of
the value of its total assets to broker-dealers, banks, and
other institutions. When the Fund engages in this practice, it
is subject to the risk that the other party to a securities
lending agreement will default on its obligations.
o Risks of Derivative Instruments. The Fund will suffer a loss
in connection with its use of derivatives such as options,
futures contracts, and options on futures contracts if
securities prices do not move in the direction anticipated by
the Fund's Advisor when entering into the derivative
instrument.
High Yield Bond Fund is subject to the following additional principal
risk:
o Liquidity and Pricing Risk. High-yield bonds generally have
more limited trading opportunities than higher credit quality
securities. This makes it more difficult to buy and/or sell a
security at a favorable price or time. Consequently, the Fund
may have to accept a lower price to sell a security, sell
other securities to raise cash or give up an investment
opportunity, any of which could have a negative effect on the
Fund's performance. Infrequent trading of securities may also
lead to an increase in their price volatility. Because of
their limited trading, market prices may be unavailable for
these securities, in which case their fair value prices will
be determined in good faith using methods approved by the
Fund's board of directors.
Strategic Income Fund is subject to the following additional principal
risks:
o Risks of Emerging Markets. The Fund may invest in emerging
markets, where the risks of foreign investing are higher.
Investing in emerging markets generally involves exposure to
economic structures that are less diverse and mature, and to
political systems that are less stable, than those of
developed countries. In addition, issuers in emerging markets
typically are subject to a greater degree of
66
change in earnings and business prospects than are companies
in developed countries.
o Risks of Mortgage- and Asset-Backed Securities. Falling
interest rates could cause faster than expected prepayments of
the obligations underlying mortgage- and asset-backed
securities, which the Fund would have to invest at lower
interest rates. On the other hand, rising interest rates could
cause prepayments of the obligations to decrease, extending
the life of mortgage- and asset-backed securities with lower
payment rates.
o Risks of Common Stocks. The Fund's investments may include
common stock and warrants to purchase, or securities
convertible into, common stocks. Stocks may decline
significantly in price over short or extended periods of time.
Price changes may occur in the market as a whole, or they may
occur in only a particular company, industry, or sector of the
market.
o Risks of Dollar Roll Transactions. The use of mortgage dollar
rolls could increase the volatility of the Fund's share price.
It could also diminish the Fund's investment performance if
the Advisor does not predict mortgage prepayments and interest
rates correctly.
In addition to the principal risk factors described above, the Funds
are subject to additional risks, which are described in the Funds' prospectuses.
COMPARISON OF DISTRIBUTION POLICIES, AND PURCHASE, EXCHANGE
AND REDEMPTION PROCEDURES
DISTRIBUTION OF SHARES
The distribution arrangements applicable to Class A, Class B, Class C,
Class S and Class Y shares of each Acquired Fund are identical to the
distribution arrangements of Class A, Class B, Class C, Class S and Class Y
shares, respectively, of each Acquiring Fund. Quasar Distributors, LLC (the
"Distributor"), an affiliate of the Advisor, is the principal underwriter for
Class A, Class B, Class C, Class S and Class Y shares of each Fund. FAIF has
entered into distribution agreements with the Distributor with respect to each
class. Under Distribution Plans adopted by FAIF with respect to Class A, Class B
and Class C shares pursuant to Rule 12b-1 under the 1940 Act (each, a
"Distribution Plan"), Service Plans adopted by FAIF with respect to Class B and
Class C shares (each, a "Service Plan"), and a Shareholder Service Plan and
Agreement adopted by FAIF with respect to Class S shares (the "Shareholder
Service Plan and Agreement"), the Class A, Class B, Class C and Class S shares
of each Fund are authorized to pay the Distributor certain fees for the
distribution and sale of shares of the Fund and/or for shareholder servicing as
described below. There is no Distribution Plan or Service Plan in effect for
Class Y shares.
Class A Shares. FAIF has adopted a Distribution Plan for Class A shares
which provides that a Fund may pay to the Distributor a fee of up to 0.25% of
the average daily net assets
67
attributable to Class A shares which the Distributor can use to compensate
investment professionals, participating institutions and "one-stop" mutual fund
networks (institutions) for providing ongoing shareholder services to
shareholder accounts. For net asset value sales of Class A shares on which the
institution receives a commission, the institution does not begin to receive its
shareholder servicing fee until one year after such Class A shares are sold. The
Distribution Plan provides that all or any portion of the total 0.25% fee may be
payable as a shareholder servicing fee and all or any portion of such total fee
may be payable as a distribution fee, as determined from time to time by FAIF's
Board of Directors. Until further action by FAIF's Board of Directors, all of
the 0.25% fee is designated and payable as a shareholder servicing fee.
Class B Shares. FAIF has adopted a Distribution Plan for Class B shares
which provides that a Fund may pay to the Distributor a distribution fee of up
to 0.75% of the average daily net assets attributable to Class B shares, which
the Distributor retains to finance the payment of sales commissions to
institutions which sell Class B shares. Distribution services and expenses
include compensating dealers for sales of Class B shares, payments for other
advertising and promotional expenses, preparation and distribution of sales
literature and expenses incurred in connection with the costs of printing and
mailing prospectuses, statements of additional information and shareholder
reports to prospective investors. The Service Plan for Class B shares further
provides that a Fund may pay the Distributor a shareholder servicing fee of up
to 0.25% of the average daily net assets attributable to Class B shares, which
the distributor can use to compensate investment professionals, participating
institutions and "one-stop" mutual fund networks (institutions) for providing
ongoing shareholder services to shareholder accounts. The Service Plan provides
compensation for personal, ongoing servicing and/or maintenance of shareholder
accounts, including administrative or accounting services.
Class C Shares. FAIF has adopted a Distribution Plan for Class C shares
which provides that a Fund may pay to the Distributor a distribution fee of up
to 0.75% of the average daily net assets attributable to Class C shares. The
Distributor may use the distribution fee to provide compensation to institutions
through which shareholders hold their shares beginning one year after purchase.
The Service Plan for Class C shares further provides that a Fund may pay the
Distributor a shareholder servicing fee of up to 0.25% of the average daily net
assets attributable to Class C shares, which the distributor can use to
compensate investment professionals, participating institutions and "one-stop"
mutual fund networks (institutions) for providing ongoing shareholder services
to shareholder accounts. The Service Plan provides compensation for personal,
ongoing servicing and/or maintenance of shareholder accounts, including
administrative or accounting services.
Class S Shares. FAIF has adopted a Shareholder Service Plan and
Agreement for Class S shares which provides that a Fund may pay to the
Distributor a shareholder servicing fee of up to 0.25% of the average daily net
assets attributable to Class S shares. The Distributor can use the shareholder
servicing fee to compensate investment professionals, participating institutions
and "one stop" mutual fund networks (institutions) for providing ongoing
shareholder services to shareholder accounts. The shareholder servicing fee may
be used to provide ongoing service and/or maintenance of shareholder accounts
including administrative or accounting services.
68
Class Y Shares. Class Y shares are not subject to any 12b-1
(distribution) or shareholder servicing fees.
In addition to distribution and/or shareholder servicing fees paid by
the Funds, the Advisor or one of its affiliates may make payments to investment
professionals and financial institutions, using their own assets, in exchange
for sales and/or administrative services performed on behalf of the investment
professional's or financial institution's customers.
PURCHASE AND REDEMPTION PROCEDURES
Purchases of Class A, Class B and Class C shares of the Funds are made
through dealers, at the net asset value per share next determined after receipt
of the purchase order by the transfer agent, plus a sales charge which may be
imposed (i) at the time of purchase (Class A or Class C shares) and/or (ii) on a
deferred basis (Class B or Class C shares).
The minimum initial investment for Class A, Class B and Class C shares
of each Fund is $1,000 ($250 for a retirement plan or a Uniform Gifts to Minors
Act/Uniform Transfers to Minors Act (UGMA/UTMA) account), and the minimum
subsequent investment is $100 for such classes ($25 for a retirement plan or an
UGMA/UTMA account). Class A shares of each Equity Fund are sold with an initial
sales charge of up to 5.50% of the purchase price. Class A shares of each Income
Fund are sold with an initial sales charge of up to 4.25% of the purchase price.
Certain investors are eligible to purchase Class A shares without a sales
charge. Class B shares of each Fund are sold without an initial sales charge but
are subject to a contingent deferred sales charge ("CDSC") (declining from 5% to
0% of the lower of the amount invested or the redemption proceeds) which will be
imposed on certain redemptions made within six years of purchase. This CDSC will
be waived under certain conditions. Although Class B shares are subject to
higher ongoing distribution-related expenses than Class A shares, Class B shares
will automatically convert to Class A shares of the same Fund (which are subject
to lower ongoing distribution-related expenses) eight years after the calendar
month in which the purchase order for Class B shares was accepted. Class C
shares of each Fund are subject to an initial sales charge equal to 1% of the
purchase price and a 1% CDSC on redemptions within 18 months after purchase.
Like Class B shares, the CDSC will be waived under certain conditions. Also like
Class B shares, Class C shares are subject to higher ongoing
distribution-related expenses than Class A shares but, unlike Class B shares,
Class C shares do not convert to another class.
Class S and Class Y shares of each Fund are sold through banks and
other financial institutions that have entered into sales agreements with the
Distributor. Class S and Class Y shares are available to a limited group of
investors, and are typically held pursuant to an omnibus account arrangement
with the transfer agent. Class S and Class Y shares are sold at their net asset
value per share without either an initial sales charge or CDSC.
Shares of each Fund may be redeemed at any time at the net asset value
next determined after the order is accepted by the Fund. As indicated above, the
proceeds of redemptions of Class B and Class C shares (and Class A shares
originally purchased as part of an investment of $1 million or more on which no
front-end sales charge was paid) may be subject to a CDSC.
69
EXCHANGE PRIVILEGES
The exchange privileges available to Class A, Class B, Class C, Class S
and Class Y shareholders of each Acquired Fund are identical to the exchange
privileges of Class A, Class B, Class C, Class S and Class Y shareholders,
respectively, of each Acquiring Fund. Shareholders of each Fund may exchange
shares of the Fund for the same class of shares of any other series of the First
American funds. No fee will be charged upon the exchange of shares. Generally,
shares may be exchanged only for shares of the same class. However, Class A
shares may be exchanged for Class S shares or Class Y shares of the same or
another First American fund when Class A shareholders become eligible to
participate in Class S or Class Y. Shares of a Fund subject to an exchange will
be processed at net asset value per share of each Fund at the time of the
exchange. In determining the CDSC applicable to shares being redeemed subsequent
to an exchange or, in the case of Class B shares, calculating when shares
convert to Class A shares, the length of time the shares were held prior to the
exchange will be taken into account.
DIVIDENDS AND OTHER DISTRIBUTIONS
Dividends from net investment income, if any, of Large Cap Growth Fund,
Large Cap Core Fund, Mid Cap Growth Fund, Mid Cap Core Fund, Bond IMMDEX(TM)
Fund, Fixed Income Fund, High Yield Bond Fund and Strategic Income Fund are
declared and paid monthly. Dividends from net investment income, if any, of
Health Sciences Fund, Small Cap Growth Fund and Small Cap Core Fund are declared
and paid quarterly. Dividends from Emerging Markets Fund's and International
Fund's net investment income, if any, are declared and paid annually. Any
capital gains are distributed at least once each year.
Unless notified otherwise, dividends and capital gain distributions, if
any, will be automatically reinvested in shares of the distributing Fund and the
class on which they were paid at net asset value. Such reinvestments
automatically occur on the payment date of such dividends and capital gain
distributions. Alternatively, shareholders may request that dividends and
capital gain distributions be reinvested in shares of another First American
Fund or paid in cash. An Acquired Fund shareholder's election with respect to
reinvestment of dividends and other distributions will be automatically applied
with respect to the Acquiring Fund shares he or she receives pursuant to the
Reorganization.
Each Fund has qualified, and intends to continue to qualify, to be
treated as a regulated investment company under the Internal Revenue Code of
1986, as amended (the "Code"). To remain qualified for that treatment, a Fund
must distribute at least 90% of its taxable income and diversify its holdings as
required by the Code. While so qualified, so long as a Fund distributes to its
shareholders all of its investment company taxable income and any net realized
capital gain, that Fund will not be required to pay any federal income tax on
the distributed amounts.
INFORMATION ABOUT THE REORGANIZATIONS
PLAN OF REORGANIZATION AND TERMINATION
The terms and conditions under which the proposed Reorganizations will
be consummated are set forth in the Reorganization Plan. Significant provisions
of the Reorganization Plan are summarized below; however, this summary is
qualified in its entirety by
70
reference to the Reorganization Plan, the form of which is attached as Appendix
A to this Prospectus/Proxy Statement.
The Reorganization Plan provides, with respect to each Reorganization,
for (a) the Acquiring Fund's acquisition, as of the close of business on the
date of the closing of the Reorganization or other time FAIF determines (the
"Effective Time"), of all the assets of the corresponding Acquired Fund in
exchange solely for Acquiring Fund shares and the Acquiring Fund's assumption of
all the Acquired Fund's liabilities and (b) the distribution of those shares, by
class, to the Acquired Fund's shareholders.
An Acquired Fund's assets to be acquired by its corresponding Acquiring
Fund include all cash, cash equivalents, securities, receivables, claims and
rights of action, rights to register shares under applicable securities laws,
books and records, deferred and prepaid expenses shown as assets on the Acquired
Fund's books, and other property the Acquired Fund owns at the Effective Time.
An Acquiring Fund will assume from its corresponding Acquired Fund all its
liabilities, debts, obligations and duties of whatever kind or nature; provided,
however, that each Acquired Fund will use its best efforts to discharge all its
known liabilities before the Effective Time.
The value of each Acquired Fund's assets to be acquired by its
corresponding Acquiring Fund and the net asset value ("NAV") per share of each
class of the Acquiring Fund shares to be exchanged for those assets will be
determined as of the close of regular trading on the New York Stock Exchange on
the date of the Reorganization closing, using the valuation procedures described
in the Funds' prospectuses and the SAI. Each Acquired Fund's net value will be
the value of its assets as so determined, less the amount of its liabilities
determined as of the close of such trading.
At, or as soon as practicable after, the Effective Time, each Acquired
Fund will distribute, by class, the Acquiring Fund shares it receives in a
Reorganization PRO RATA to its shareholders of record as of the Effective Time,
so that each shareholder will receive a number of full and fractional Acquiring
Fund shares of the same class that is equal in aggregate value to the
shareholder's Acquired Fund shares. The shares will be distributed by opening
accounts on the Acquiring Fund's books in the names of the shareholders and by
transferring to those accounts the shares previously credited to the Acquired
Fund's account on those books. Fractional Acquiring Fund shares will be rounded
to the third decimal place. Each Acquired Fund will be terminated as soon as
practicable after the share distribution.
Because Acquiring Fund shares will be issued at their NAV in exchange
for the net assets of the corresponding Acquired Fund, the aggregate value of
the Acquiring Fund shares issued to shareholders in a Reorganization will equal
the aggregate value of the Acquired Fund shares they surrender. The NAV per
share of each class of each Acquiring Fund will be unchanged by a
Reorganization. Thus, the Reorganizations will not result in dilution of any
shareholder's interest.
In determining contingent deferred sales charges applicable to Class B
Acquiring Fund shares and Class C Acquiring Fund shares issued in a
Reorganization and the date on which such Class B Acquiring Fund shares convert
to Class A Acquiring Fund shares, the Acquiring Fund involved in that
Reorganization will give each holder thereof credit for the period during which
the holder held the corresponding Class B Acquired Fund shares or Class C
Acquired Fund shares, as the case may be, in exchange for which the Acquiring
Fund shares were issued. If
71
Class A Acquiring Fund shares are issued in a Reorganization to shareholders
that formerly held Class A Acquired Fund shares with respect to which the
front-end sales charge was waived due to a purchase of $1 million or more, then,
in determining whether a deferred sales charge is payable on the sale of those
Class A Acquiring Fund shares, the Acquiring Fund will give the holder thereof
credit for the period during which the holder held those Acquired Fund shares.
Any transfer taxes payable on the issuance of Acquiring Fund shares in
a name other than that of the registered shareholder will be paid by the person
to whom those shares are to be issued as a condition of the transfer. Any
reporting responsibility of an Acquired Fund to a public authority will continue
to be its responsibility until it is dissolved.
The Advisor will bear the entire cost of the Reorganizations, including
professional fees and the cost of soliciting proxies for the Meeting, which
principally consists of printing and mailing expenses, and the cost of any
supplementary solicitation.
In approving the Reorganization Plan, the Board of Directors reviewed
various factors about the Funds and each Reorganization. The Board considered
the relative size of the Funds as well as the similarity of the Funds'
investment objectives and principal investment strategies. The Board evaluated
the potential economies of scale associated with larger mutual funds and
concluded that operating efficiencies may be achieved by combining the Funds.
The Board also considered the performance history of each Fund and the relative
expenses of the Funds. With respect to the proposed Reorganizations of Health
Sciences Fund and Emerging Markets Fund, the Board considered liquidation as
alternatives to the Reorganizations, as well as the consequences of such a
liquidation to each shareholder of those Funds. After such consideration, the
Board concluded that each Reorganization would be in the best interests of the
Funds participating therein.
The consummation of each Reorganization is subject to a number of
conditions set forth in the Reorganization Plan (not including consummation of
any other Reorganization), some of which may be waived by FAIF. In addition,
FAIF may amend the Reorganization Plan in any manner, except that no amendment
may be made subsequent to the Meeting that has a material adverse effect on the
interests of an Acquired Fund's shareholders.
REASONS FOR THE REORGANIZATIONS
The Board, including a majority of the Independent Directors, has
determined that each Reorganization is in the best interests of the Funds
participating therein and that the interests of each Fund's shareholders will
not be diluted as a result of the Reorganizations. In approving each
Reorganization, the Board, including a majority of the Independent Directors,
considered a number of factors, including the following:
(1) the terms and conditions of the Reorganization;
(2) the compatibility of the Funds' investment objectives,
policies, and restrictions;
(3) the Funds' relative investment performance;
(4) the Funds' relative asset size;
(5) the investment experience and expertise of each Fund's
portfolio managers;
(6) the effect of the Reorganization on the Funds' expected
investment performance;
72
(7) the effect of the Reorganization on each Fund's expense ratio
relative to its current expense ratio;
(8) the fact that the Advisor will bear the expenses incurred by
each Fund in connection with the Reorganization;
(9) the tax consequences of the Reorganization;
(10) alternatives available to shareholders of the Acquired Fund,
including the ability to redeem their shares;
(11) the effect of the Reorganization on each Fund's shareholders'
rights;
(12) the potential benefits of the Reorganization to the Advisor
and other persons; and
(13) the alternatives to the Reorganization, including liquidation.
The Advisor recommended the Reorganizations to the Board at a meeting
of the Board held on December 3-4, 2002. In recommending the Reorganizations,
the Advisor advised the Board that the management fee and other expenses
schedule applicable to each Acquiring Fund (with the exception of Bond
IMMDEX(TM) Fund) is equal to or less than that currently in effect for the
corresponding Acquired Fund. The Advisor advised the Board that the management
fee for Bond IMMDEX(TM) Fund will increase 0.20% following the Reorganization
and that this increase is largely the result of an adjustment to the management
fee charged to Bond IMMDEX(TM) Fund. The Advisor advised the Board that
circumstances have evolved so that management of Bond IMMDEX(TM) Fund has
required the use of active investment management techniques to an extent beyond
that originally envisioned. The Advisor further noted that, as a result, the
management fee paid by Bond IMMDEX(TM) Fund is significantly lower than
management fees paid by other funds in its peer group that are similarly
managed, so that the long-term viability of the Fund is in question. The Advisor
also advised the Board that Health Sciences Fund and Emerging Markets Fund have
had difficulty in attracting sufficient assets to be economically viable, and
that liquidating economically unviable funds is generally a taxable event to
shareholders.
The Board considered the fact that each Acquiring Fund has a better or
comparable performance record and the same or lower overall expense ratio
relative to the corresponding Acquired Fund (with the exception of Bond
IMMDEX(TM) Fund) and that the Advisor will bear the expenses incurred in
connection with the Reorganizations. In addition, the Board considered that the
investment objective of each Acquired Fund is identical or substantially similar
to that of its corresponding Acquiring Fund and that the principal investment
strategies of each Acquired Fund (with the exception of Health Sciences Fund)
are similar to those of the corresponding Acquiring Fund. Further, the Advisor
advised the Board that, because each Acquiring Fund has greater net assets than
the corresponding Acquired Fund, combining the Funds could further reduce the
expenses that the Acquiring Fund bears as a percentage of net assets. The
Advisor also advised the Board that any reduction in the Funds' expense ratios
as a result of the Reorganizations could benefit the Advisor by reducing or
eliminating any reimbursements or waivers of expenses resulting from its
obligation to limit each Fund's expenses.
DESCRIPTION OF SECURITIES TO BE ISSUED
73
FAIF is registered with the SEC as an open-end management investment
company. Fund shares entitle their holders to one vote per full share and
fractional votes for fractional shares held. Each Acquiring Fund currently has
Class A, Class B, Class C, Class S and Class Y shares outstanding. If the
Reorganization Plan is approved with respect to an Acquired Fund, each
shareholder thereof will receive Acquiring Fund shares of the same class as
their Acquired Fund shares and having a net asset value equal to the total net
asset value of their Acquired Fund shares.
FEDERAL INCOME TAX CONSIDERATIONS
The exchange of an Acquired Fund's assets for shares of its
corresponding Acquiring Fund and the Acquiring Fund's assumption of that
Acquired Fund's liabilities, and the subsequent distribution of those shares, is
intended to qualify for federal income tax purposes as a tax-free reorganization
under section 368(a)(1)(C) of the Code. FAIF will receive a tax opinion from
Kirkpatrick & Lockhart LLP substantially to the effect that, with respect to
each Reorganization --
(1) The Acquiring Fund's acquisition of the Acquired Fund's
assets in exchange solely for Acquiring Fund shares and the Acquiring
Fund's assumption of the Acquired Fund's liabilities, followed by the
Acquired Fund's distribution of those shares PRO RATA to its
shareholders constructively in exchange for their Acquired Fund shares,
will qualify as a "reorganization" as defined in section 368(a)(1)(C)
of the Code, and each Fund will be "a party to a reorganization" within
the meaning of section 368(b) of the Code;
(2) The Acquired Fund will recognize no gain or loss on the
transfer of its assets to the Acquiring Fund in exchange solely for
Acquiring Fund shares and the Acquiring Fund's assumption of the
Acquired Fund's liabilities or on the subsequent distribution of those
shares to the Acquired Fund's shareholders in constructive exchange for
their Acquired Fund shares;
(3) The Acquiring Fund will recognize no gain or loss on its
receipt of the transferred assets in exchange solely for Acquiring Fund
shares and its assumption of the Acquired Fund's liabilities;
(4) The Acquiring Fund's basis in the transferred assets will
be the same as the Acquired Fund's basis therein immediately before the
Reorganization, and the Acquiring Fund's holding period for those
assets will include the Acquired Fund's holding period therefor;
(5) An Acquired Fund shareholder will recognize no gain or
loss on the constructive exchange of all its Acquired Fund shares
solely for Acquiring Fund shares pursuant to the Reorganization; and
(6) An Acquired Fund shareholder's aggregate basis in the
Acquiring Fund shares it receives in the Reorganization will be the
same as the aggregate basis in its Acquired Fund shares it
constructively surrenders in exchange for those Acquiring Fund shares,
and its holding period for those Acquiring Fund shares will include its
holding period for those Acquired Fund shares, provided the shareholder
holds them as capital assets at the Effective Time.
74
The tax opinion will state that no opinion is expressed as to the
effect of a Reorganization on the Funds participating therein or any shareholder
with respect to any asset as to which any unrealized gain or loss is required to
be recognized for federal income tax purposes at the end of a taxable year (or
on the termination or transfer thereof) under a mark-to-market system of
accounting.
An Acquiring Fund's utilization after a Reorganization of (1)
carryovers of pre-Reorganization capital losses realized by its corresponding
Acquired Fund and (2) capital losses it realizes after the Reorganization that
are attributable to that Acquired Fund's built-in unrealized capital losses as
of the Effective Time will be subject to limitation under the Code.
Acquired Fund shareholders should consult their tax advisers regarding
the effect, if any, of the Reorganizations in light of their individual
circumstances. Because the foregoing discussion only relates to the federal
income tax consequences of the Reorganizations, those shareholders also should
consult their tax advisers about state and local tax consequences, if any, of
the Reorganizations.
CAPITALIZATION
The following tables set forth the capitalization of each Acquired Fund
and the corresponding Acquiring Fund and the capitalization of the combined
Acquiring Fund on a PRO FORMA basis as of September 30, 2002 (unaudited), giving
effect to the proposed acquisitions of assets of the Acquired Fund at its then
current net asset value.
75
CAPITALIZATION OF
LARGE CAP GROWTH FUND, LARGE CAP CORE FUND AND PRO FORMA COMBINED FUND
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
- ------------------------- ---------------------- ----------------------- ----------------------
LARGE CAP GROWTH LARGE CAP CORE PRO FORMA
FUND FUND COMBINED FUND
- ------------------------- ---------------------- ----------------------- ----------------------
TOTAL NET ASSETS
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS A $52,419 $24,647 $77,066
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS B $36,546 $2,928 $39,474
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS C $9,652 $476 $10,128
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS S $9,020 $2,376 $11,396
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS Y $436,199 $255,311 $691,510
- ------------------------- ---------------------- ----------------------- ----------------------
TOTAL $543,836 $285,738 $829,574
- ------------------------- ---------------------- ----------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ----------------------
NET ASSET VALUE
PER SHARE
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS A $6.76 $19.16 $19.16
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS B $6.44 $18.64 $18.64
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS C $6.57 $19.03 $19.03
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS S $6.76 $19.17 $19.17
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS Y $6.86 $19.59 $19.59
- ------------------------- ---------------------- ----------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ----------------------
SHARES OUTSTANDING
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS A 7,754 1,286 4,022
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS B 5,673 157 2,118
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS C 1,469 25 532
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS S 1,335 124 594
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS Y 63,592 13,036 35,302
- ------------------------- ---------------------- ----------------------- ----------------------
76
CAPITALIZATION OF
HEALTH SCIENCES FUND, LARGE CAP CORE FUND AND PRO FORMA COMBINED FUND
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
- ------------------------- ---------------------- ----------------------- ----------------------
HEALTH SCIENCES LARGE CAP CORE FUND PRO FORMA COMBINED
FUND FUND COMBINED FUND
- ------------------------- ---------------------- ----------------------- ----------------------
TOTAL NET ASSETS
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS A $5,235 $24,647 $29,882
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS B $2,821 $2,928 $5,749
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS C $3,815 $476 $4,291
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS S $32 $2,376 $2,408
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS Y $12,421 $255,311 $267,732
- ------------------------- ---------------------- ----------------------- ----------------------
TOTAL $24,324 $285,738 $310,062
- ------------------------- ---------------------- ----------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ----------------------
NET ASSET VALUE PER
SHARE
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS A $7.91 $19.16 $19.16
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS B $7.50 $18.64 $18.64
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS C $7.76 $19.03 $19.03
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS S $7.90 $19.17 $19.17
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS Y $8.00 $19.59 $19.59
- ------------------------- ---------------------- ----------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ----------------------
SHARES OUTSTANDING
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS A 662 1,286 1,559
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS B 376 157 308
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS C 492 25 225
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS S 4 124 126
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS Y 1,552 13,036 13,670
- ------------------------- ---------------------- ----------------------- ----------------------
77
CAPITALIZATION OF
MID CAP GROWTH FUND, MID CAP CORE FUND AND PRO FORMA COMBINED FUND
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
- ------------------------- ---------------------- ----------------------- ----------------------
MID CAP GROWTH FUND MID CAP CORE FUND PRO FORMA
FUND FUND COMBINED FUND
- ------------------------- ---------------------- ----------------------- ----------------------
TOTAL NET ASSETS
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS A $58,896 $75,002 $133,898
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS B $2,578 $4,227 $6,805
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS C $3,742 $1,136 $4,878
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS S $13 $5,869 $5,882
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS Y $157,688 $477,210 $634,898
- ------------------------- ---------------------- ----------------------- ----------------------
TOTAL $222,917 $563,444 $786,361
- ------------------------- ---------------------- ----------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ----------------------
NET ASSET VALUE PER
SHARE
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS A $4.35 $26.45 $26.45
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS B $4.14 $25.56 $25.56
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS C $4.18 $26.29 $26.29
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS S $4.35 $26.43 $26.43
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS Y $4.48 $27.25 $27.25
- ------------------------- ---------------------- ----------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ----------------------
SHARES OUTSTANDING
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS A 13,538 2,836 5,063
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS B 622 165 266
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS C 896 43 185
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS S 3 222 223
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS Y 35,232 17,515 23,302
- ------------------------- ---------------------- ----------------------- ----------------------
78
CAPITALIZATION OF
SMALL CAP GROWTH FUND, SMALL CAP CORE FUND AND PRO FORMA COMBINED FUND
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
- ------------------------- ---------------------- ----------------------- ----------------------
SMALL CAP GROWTH FUND SMALL CAP CORE FUND PRO FORMA
FUND FUND COMBINED FUND
- ------------------------- ---------------------- ----------------------- ----------------------
TOTAL NET ASSETS
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS A $22,397 $33,586 $55,983
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS B $3,933 $4,613 $8,546
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS C $4,659 $3,096 $7,755
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS S $32 $7,640 $7,672
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS Y $205,253 $403,027 $608,280
- ------------------------- ---------------------- ----------------------- ----------------------
TOTAL $236,274 $451,962 $688,236
- ------------------------- ---------------------- ----------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ----------------------
NET ASSET VALUE PER
SHARE
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS A $8.79 $10.68 $10.68
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS B $8.07 $9.95 $9.95
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS C $8.52 $10.62 $10.62
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS S $8.79 $10.66 $10.66
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS Y $8.97 $11.00 $11.00
- ------------------------- ---------------------- ----------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ----------------------
SHARES OUTSTANDING
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS A 2,548 3,144 5,241
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS B 487 463 858
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS C 547 292 731
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS S 4 717 720
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS Y 22,877 36,650 55,309
- ------------------------- ---------------------- ----------------------- ----------------------
79
CAPITALIZATION OF
EMERGING MARKETS FUND, INTERNATIONAL FUND AND PRO FORMA COMBINED FUND
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
- ------------------------- ---------------------- ----------------------- ----------------------
EMERGING MARKETS FUND INTERNATIONAL PRO FORMA
FUND FUND COMBINED FUND
- ------------------------- ---------------------- ----------------------- ----------------------
TOTAL NET ASSETS
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS A $2,487 $37,232 $39,719
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS B $252 $7,459 $7,711
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS C $90 $11,027 $11,117
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS S $11 $10,817 $10,828
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS Y $46,006 $540,495 $586,501
- ------------------------- ---------------------- ----------------------- ----------------------
TOTAL $48,846 $607,030 $655,876
- ------------------------- ---------------------- ----------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ----------------------
NET ASSET VALUE PER
SHARE
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS A $6.22 $7.33 $7.33
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS B $6.02 $6.85 $6.85
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS C $6.10 $7.09 $7.09
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS S $6.19 $7.31 $7.31
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS Y $6.26 $7.40 $7.40
- ------------------------- ---------------------- ----------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ----------------------
SHARES OUTSTANDING
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS A 400 5,081 5,420
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS B 42 1,088 1,125
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS C 15 1,555 1,568
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS S 2 1,479 1,481
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS Y 7,347 73,052 79,269
- ------------------------- ---------------------- ----------------------- ----------------------
80
CAPITALIZATION OF
BOND IMMDEX(TM) FUND, FIXED INCOME FUND AND PRO FORMA COMBINED FUND
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
- ------------------------- ---------------------- ----------------------- ----------------------
BOND IMMDEX(TM) FUND FIXED INCOME PRO FORMA
FUND FUND COMBINED FUND
- ------------------------- ---------------------- ----------------------- ----------------------
TOTAL NET ASSETS
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS A $87,096 $122,354 $209,450
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS B $14,592 $16,741 $31,333
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS C $1,919 $9,672 $11,591
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS S $18,179 $33,270 $51,449
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS Y $710,922 $1,204,555 $1,915,477
- ------------------------- ---------------------- ----------------------- ----------------------
TOTAL $832,708 $1,386,592 $2,219,300
- ------------------------- ---------------------- ----------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ----------------------
NET ASSET VALUE PER
SHARE
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS A $29.21 $11.45 $11.45
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS B $29.18 $11.38 $11.38
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS C $29.16 $11.42 $11.42
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS S $29.21 $11.45 $11.45
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS Y $29.23 $11.45 $11.45
- ------------------------- ---------------------- ----------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ----------------------
SHARES OUTSTANDING
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS A 2,982 10,682 18,289
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS B 500 1,471 2,753
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS C 66 847 1,015
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS S 622 2,905 4,493
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS Y 24,322 105,171 167,260
- ------------------------- ---------------------- ----------------------- ----------------------
81
CAPITALIZATION OF
HIGH YIELD BOND FUND, STRATEGIC INCOME FUND AND PRO FORMA COMBINED FUND
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
- ------------------------- ---------------------- ----------------------- ----------------------
HIGH YIELD BOND FUND STRATEGIC INCOME PRO FORMA
FUND FUND COMBINED FUND
- ------------------------- ---------------------- ----------------------- ----------------------
TOTAL NET ASSETS
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS A $23,900 $18,006 $41,906
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS B $774 $4,179 $4,953
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS C $7,213 $6,213 $13,426
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS S $87 $6 $93
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS Y $21,157 $135,665 $156,822
- ------------------------- ---------------------- ----------------------- ----------------------
TOTAL $53,131 $164,069 $217,200
- ------------------------- ---------------------- ----------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ----------------------
NET ASSET VALUE PER
SHARE
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS A $7.96 $7.99 $7.96
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS B $7.97 $7.96 $7.97
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS C $7.97 $7.96 $7.97
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS S $7.96 $8.06 $7.96
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS Y $7.98 $7.99 $7.98
- ------------------------- ---------------------- ----------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ----------------------
SHARES OUTSTANDING
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS A 3,001 2,254 5,263
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS B 97 525 621
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS C 905 780 1,685
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS S 11 1 12
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS Y 2,653 16,973 19,654
- ------------------------- ---------------------- ----------------------- ----------------------
82
The tables set forth above should not be relied upon to reflect the
number of Acquiring Fund shares to be issued in, and outstanding immediately
following, a Reorganization; the actual number of shares to be issued and
outstanding will depend upon the net asset value and number of shares of each
Acquired Fund and the corresponding Acquiring Fund at the time of the
Reorganization.
VOTING INFORMATION
This Prospectus/Proxy Statement is being sent to shareholders of Large
Cap Growth Fund, Health Sciences Fund, Mid Cap Growth Fund, Small Cap Growth
Fund, Emerging Markets Fund, Bond IMMDEX(TM) Fund, and High Yield Bond Fund,
each a series of FAIF, in connection with a solicitation of voting instructions
by the directors of FAIF, to be used at the Meeting. This Prospectus/Proxy
Statement, along with a Notice of the Meeting and a proxy card, is first being
mailed to shareholders of the Acquired Funds on or about January ___, 2003.
The Board of Directors of FAIF has fixed the close of business on
January 6, 2003, as the record date (the "Record Date") for determining the
shareholders of the Acquired Funds entitled to receive notice of the Meeting and
to give voting instructions, and for determining the number of shares for which
such instructions may be given, with respect to the Meeting or any adjournment
thereof.
Shares which represent interests in a particular Acquired Fund vote
separately on the Reorganization and those matters pertaining only to that
Acquired Fund. Approval of a Reorganization will require the affirmative vote of
a majority of the outstanding shares of each Acquired Fund, with all classes of
the Acquired Fund voting together and not by class. Abstentions will be counted
for purposes of determining a quorum, but will not be included in the amount of
shares voted. Accordingly, an abstention will have the effect of a negative
vote. Approval of the Reorganization Plan with respect to an Acquired Fund will
be considered approval of the amendment to the Amended and Restated Articles of
Incorporation of FAIF, attached to the form of the Plan of Reorganization and
Termination attached as Appendix A to this Prospectus/Proxy Statement, required
to effect the Reorganization.
If a proxy that is properly executed and returned represents a broker
"non-vote" (broker non-votes are shares held by a broker or nominee for which an
executed proxy is received by the Fund but are not voted as to the proposal
because instructions have not been received from the beneficial owners or
persons entitled to vote, and the broker or nominee holding the shares does not
have discretionary voting power), the shares represented thereby will only be
considered present for purposes of determining the existence of a quorum for the
transaction of business and will not be included in determining the number of
votes cast.
The individuals named as proxies on the enclosed proxy card will vote
in accordance with your direction as indicated thereon, if your card is received
properly executed by you or by your duly appointed agent or attorney-in-fact. If
your card is properly executed and you give no voting instructions, your shares
will be voted FOR the applicable Reorganization. You can also
83
vote by fax, by telephone, with a toll-free call to the appropriate number on
the proxy card, and through the Internet Website stated on the proxy card.
You may revoke any proxy by giving another proxy or by letter or
telegram revoking the initial proxy. In addition, you can revoke a prior proxy
by simply voting again using the proxy card, by fax, by a toll-free call to the
appropriate number on the proxy card, or through the Internet Website stated on
the proxy card. To be effective, your revocation must be received prior to the
Meeting and must indicate your name and account number. In addition, if you
attend the Meeting in person you may, if you wish, vote by ballot at the
Meeting, thereby canceling any proxy previously given.
Proxy solicitations will be made primarily by mail but may also be made
by telephone, through the Internet or personal solicitations conducted by
officers and employees of the Advisor, its affiliates or other representatives
of the Acquired Funds (who will not be paid for their soliciting activities).
The costs of solicitation and the expenses incurred in connection with preparing
this Prospectus/Proxy Statement and its enclosures will be paid by the Advisor.
Neither the Acquired Funds nor the Acquiring Funds will bear any costs
associated with the Meeting, this proxy solicitation or any adjourned session.
If shareholders of a Acquired Fund do not vote to approve the
applicable Reorganization, the directors of FAIF will consider other possible
courses of action in the best interests of shareholders. If a quorum is not
present at the Meeting, or if a quorum is present at the Meeting but sufficient
votes to approve a Reorganization are not received, the persons named as proxies
on a proxy form sent to the shareholders may propose one or more adjournments of
the Meeting to permit further proxy solicitation. In determining whether to
adjourn the Meeting, the following factors may be considered: the percentage of
votes actually cast, the percentage of negative votes actually cast, the nature
of any further solicitation and the information to be provided to shareholders
with respect to the reasons for the solicitation. Any adjournment will require
an affirmative vote of a majority of those shares represented at the Meeting in
person or by proxy. The persons named as proxies will vote upon such adjournment
after consideration of all circumstances which may bear upon a decision to
adjourn the Meeting.
A shareholder of an Acquired Fund who objects to a proposed
Reorganization will not be entitled under either Maryland law or the Amended and
Restated Articles of Incorporation of FAIF to demand payment for, or an
appraisal of, his or her shares. However, shareholders should be aware that each
Reorganization as proposed is not expected to result in recognition of gain or
loss to shareholders for federal income tax purposes. In addition, if a
Reorganization is consummated, the rights of shareholders to exchange among
other First American funds or to sell Fund shares will not be affected.
FAIF does not hold annual shareholder meetings. If a Reorganization is
not approved, shareholders wishing to submit proposals to be considered for
inclusion in a proxy statement for a subsequent shareholder meeting should send
their written proposals to the Secretary of FAIF at the address set forth on the
cover of this Prospectus/Proxy Statement so that they will be received by FAIF
in a reasonable period of time prior to that meeting.
84
The votes of the shareholders of each Acquiring Fund are not being
solicited by this Prospectus/Proxy Statement and are not required to carry out
the Reorganizations.
OUTSTANDING SHARES
The shareholders of each Acquired Fund as of the Record Date will be
entitled to be present and vote at the Meeting with respect to shares of the
applicable Acquired Fund owned as of the Record Date.
The following tables identify the number of shares of each class of
each Acquired Fund and Acquiring Fund that were outstanding as of the close of
business on the Record Date:
SHARES OUTSTANDING ON RECORD DATE
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
LARGE CAP GROWTH FUND HEALTH SCIENCES FUND LARGE CAP CORE FUND
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Class A
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Class B
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Class C
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Class S
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Class Y
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
MID CAP GROWTH FUND MID CAP CORE FUND
- ---------------------------------------- -------------------------------------- --------------------------------------
Class A
- ---------------------------------------- -------------------------------------- --------------------------------------
Class B
- ---------------------------------------- -------------------------------------- --------------------------------------
Class C
- ---------------------------------------- -------------------------------------- --------------------------------------
Class S
- ---------------------------------------- -------------------------------------- --------------------------------------
Class Y
- ---------------------------------------- -------------------------------------- --------------------------------------
SMALL CAP GROWTH FUND SMALL CAP CORE FUND
- ---------------------------------------- --------------------------------------- -------------------------------------
Class A
- ---------------------------------------- --------------------------------------- -------------------------------------
Class B
- ---------------------------------------- --------------------------------------- -------------------------------------
Class C
- ---------------------------------------- --------------------------------------- -------------------------------------
Class S
- ---------------------------------------- --------------------------------------- -------------------------------------
Class Y
- ---------------------------------------- --------------------------------------- -------------------------------------
EMERGING MARKETS FUND INTERNATIONAL FUND
- ---------------------------------------- -------------------------------------- --------------------------------------
Class A
- ---------------------------------------- -------------------------------------- --------------------------------------
Class B
- ---------------------------------------- -------------------------------------- --------------------------------------
Class C
- ---------------------------------------- -------------------------------------- --------------------------------------
Class S
- ---------------------------------------- -------------------------------------- --------------------------------------
Class Y
- ---------------------------------------- -------------------------------------- --------------------------------------
BOND IMMDEX(TM) FUND FIXED INCOME FUND
- ---------------------------------------- -------------------------------------- --------------------------------------
Class A
- ---------------------------------------- -------------------------------------- --------------------------------------
85
- ---------------------------------------- -------------------------------------- --------------------------------------
Class B
- ---------------------------------------- -------------------------------------- --------------------------------------
Class C
- ---------------------------------------- -------------------------------------- --------------------------------------
Class S
- ---------------------------------------- -------------------------------------- --------------------------------------
Class Y
- ---------------------------------------- -------------------------------------- --------------------------------------
HIGH YIELD BOND FUND STRATEGIC INCOME FUND
- ---------------------------------------- -------------------------------------- --------------------------------------
Class A
- ---------------------------------------- -------------------------------------- --------------------------------------
Class B
- ---------------------------------------- -------------------------------------- --------------------------------------
Class C
- ---------------------------------------- -------------------------------------- --------------------------------------
Class S
- ---------------------------------------- -------------------------------------- --------------------------------------
Class Y
- ---------------------------------------- -------------------------------------- --------------------------------------
As of January ___, 2003, the officers and directors of FAIF
beneficially owned as a group less than 1% of the outstanding shares of each
Fund, respectively.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of the Record Date, the Funds were aware that the following persons
owned of record 5% or more of the outstanding shares of each class of stock of
the Funds:
- -------------------------------------------------- -------------------------------------------------------------------
PERCENTAGE OF OUTSTANDING SHARES
- -------------------------------------------------- -------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS S CLASS Y
- -------------------------------------------------- ------------ ------------ -------------- ------------ -------------
LARGE CAP GROWTH FUND
- -------------------------------------------------- ------------ ------------ -------------- ------------ -------------
- -------------------------------------------------- ------------ ------------ -------------- ------------ -------------
HEALTH SCIENCES FUND
- -------------------------------------------------- ------------ ------------ -------------- ------------ -------------
- -------------------------------------------------- ------------ ------------ -------------- ------------ -------------
LARGE CAP CORE FUND
- -------------------------------------------------- ------------ ------------ -------------- ------------ -------------
- -------------------------------------------------- ------------ ------------ -------------- ------------ -------------
MID CAP GROWTH FUND
- -------------------------------------------------- ------------ ------------ -------------- ------------ -------------
- -------------------------------------------------- ------------ ------------ -------------- ------------ -------------
MID CAP CORE FUND
- -------------------------------------------------- ------------ ------------ -------------- ------------ -------------
- -------------------------------------------------- ------------ ------------ -------------- ------------ -------------
SMALL CAP GROWTH FUND
- -------------------------------------------------- ------------ ------------ -------------- ------------ -------------
- -------------------------------------------------- ------------ ------------ -------------- ------------ -------------
SMALL CAP CORE FUND
- -------------------------------------------------- ------------ ------------ -------------- ------------ -------------
- -------------------------------------------------- ------------ ------------ -------------- ------------ -------------
EMERGING MARKETS FUND
- -------------------------------------------------- ------------ ------------ -------------- ------------ -------------
- -------------------------------------------------- ------------ ------------ -------------- ------------ -------------
INTERNATIONAL FUND
- -------------------------------------------------- ------------ ------------ -------------- ------------ -------------
- -------------------------------------------------- ------------ ------------ -------------- ------------ -------------
BOND IMMDEX(TM) FUND
- -------------------------------------------------- ------------ ------------ -------------- ------------ -------------
- -------------------------------------------------- ------------ ------------ -------------- ------------ -------------
FIXED INCOME FUND
- -------------------------------------------------- ------------ ------------ -------------- ------------ -------------
- -------------------------------------------------- ------------ ------------ -------------- ------------ -------------
HIGH YIELD BOND FUND
- -------------------------------------------------- ------------ ------------ -------------- ------------ -------------
- -------------------------------------------------- ------------ ------------ -------------- ------------ -------------
STRATEGIC INCOME FUND
- -------------------------------------------------- ------------ ------------ -------------- ------------ -------------
- -------------------------------------------------- ------------ ------------ -------------- ------------ -------------
86
- -------------------------------------------------- -------------------------------------------------------------------
PERCENTAGE OF OUTSTANDING SHARES
- -------------------------------------------------- -------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS S CLASS Y
- -------------------------------------------------- ------------ ------------ -------------- ------------ -------------
- -------------------------------------------------- ------------ ------------ -------------- ------------ -------------
ADDITIONAL INFORMATION ABOUT THE FUNDS
Information concerning the Funds in the Funds' current prospectuses and
SAI (including any supplements), and the Reorganization SAI is incorporated
into this Prospectus/Proxy Statement by reference. (This means that such
information is legally considered to be part of this Prospectus/Proxy
Statement.) For a free copy of an Acquired Fund's prospectus, the Funds' SAI or
Annual Report, or the Reorganization SAI, please call (800) 677-3863 or write to
First American Investment Funds, Inc., 800 Nicollet Mall, Minneapolis, MN 55402.
Each Fund is subject to the informational requirements of the
Securities Exchange Act of 1934 and the 1940 Act, and in accordance therewith
files reports and other information including proxy material and charter
documents with the SEC. These items can be inspected and copied at the Public
Reference Facilities maintained by the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the SEC's Regional Offices located at Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and at
Woolworth Building, 233 Broadway, New York, New York 10279. Copies of such
materials can also be obtained at prescribed rates from the Public Reference
Branch, Office of Consumer Affairs and Information Services, Securities and
Exchange Commission, Washington, D.C. 20549.
MISCELLANEOUS
LEGAL MATTERS
Certain legal matters in connection with the issuance of Acquiring Fund
shares as part of the Reorganizations will be passed on by Kirkpatrick &
Lockhart LLP, 4 Embarcadero Center, 10th Floor, San Francisco, CA 94111.
EXPERTS
The audited financial statements of each Fund, incorporated by
reference into the Reorganization SAI, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report appearing in the Funds'
Annual Reports for the fiscal year ended September 30, 2002. The financial
statements audited by Ernst & Young LLP have been incorporated by reference in
reliance upon such reports given on the authority of such firm as experts in
accounting and auditing.
OTHER BUSINESS
The Board of Directors does not intend to present any other business at
the Meeting. If, however, any other matters are properly brought before the
Meeting, the persons named in the accompanying form of proxy will vote thereon
in accordance with their judgment.
87
NOTICE TO BANKS, BROKER-DEALERS AND VOTING TRUSTEES
AND THEIR NOMINEES
Please advise FAIF, in care of [Quasar Distributors, LLC, 615 E.
Michigan Street, Milwaukee, WI 53202] [P.O. BOX #], whether other persons are
beneficial owners of Acquired Fund shares for which proxies are being solicited
and, if so, the number of copies of this Prospectus/Proxy Statement you wish to
receive in order to supply copies to the beneficial owners of the respective
shares.
BOARD RECOMMENDATION
REQUIRED VOTE. Approval of the Reorganization Plan with respect to an
Acquired Fund requires the affirmative vote of a majority of the Fund's
outstanding voting securities.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE
PROPOSED REORGANIZATION OF YOUR ACQUIRED FUND AND TO APPROVE THE REORGANIZATION
PLAN WITH RESPECT TO YOUR ACQUIRED FUND.
_________, 2002
88
APPENDIX A
FORM OF PLAN OF REORGANIZATION AND TERMINATION
THIS PLAN OF REORGANIZATION AND TERMINATION ("Plan") is adopted by
First American Investment Funds, Inc., a Maryland corporation with its principal
place of business at 800 Nicollet Mall, Minneapolis, Minnesota 55402 ("FAIF"),
on behalf of each segregated portfolio of assets ("series") thereof listed on
Schedule A to this Plan ("Schedule A"). (Each such series listed under the
heading "Acquired Funds" is referred to herein as an "Acquired Fund," each such
series listed under the heading "Acquiring Funds" is referred to herein as an
"Acquiring Fund," and all such series are sometimes referred to herein
individually as a "Fund" and collectively as the "Funds.")
FAIF wishes to effect seven separate reorganizations, each described in
section 368(a)(1)(C) of the Internal Revenue Code of 1986, as amended ("Code"),
and intends this Plan to be, and adopts it as, a "plan of reorganization" within
the meaning of the regulations under section 368 of the Code ("Regulations").
Each reorganization will involve the transfer of an Acquired Fund's assets to
the Acquiring Fund listed on Schedule A opposite its name (each, a
"corresponding Acquiring Fund") in exchange solely for voting shares of common
stock, par value $ 0.0001 per share, of that Acquiring Fund ("Acquiring Fund
Shares") and that Acquiring Fund's assumption of that Acquired Fund's
liabilities, followed by the constructive distribution of those shares PRO rata
to the holders of shares of common stock, par value $ 0.0001 per share, of that
Acquired Fund ("Acquired Fund Shares") in exchange therefor, all on the terms
and conditions set forth herein. (Each such series of transactions involving
each Acquired Fund and its corresponding Acquiring Fund is referred to herein as
a "Reorganization.") The consummation of one Reorganization is not contingent on
the consummation of any other Reorganization. (For convenience, the balance of
this Plan refers only to a single Reorganization, one Acquired Fund, and one
Acquiring Fund, but the terms and conditions hereof apply separately to each
Reorganization and the Funds participating therein.)
Each Fund is a duly established and designated series of FAIF. The
Acquired Fund Shares are divided into five classes, designated Class A, Class B,
Class C, Class S, and Class Y Shares ("Class A Acquired Fund Shares," "Class B
Acquired Fund Shares," "Class C Acquired Fund Shares," "Class S Acquired Fund
Shares," and "Class Y Acquired Fund Shares," respectively). The Acquiring Fund
Shares also are divided into five classes, also designated Class A, Class B,
Class C, Class S, and Class Y Shares ("Class A Acquiring Fund Shares," "Class B
Acquiring Fund Shares," "Class C Acquiring Fund Shares," "Class S Acquiring Fund
Shares," and "Class Y Acquiring Fund Shares," respectively). Each class of
Acquiring Fund Shares is substantially similar to the corresponding class of
Acquired Fund Shares, I.E., the Funds' Class A, Class B, Class C, Class S, and
Class Y Shares correspond to each other.
1. PLAN OF REORGANIZATION AND TERMINATION
1.1 At the Closing (as defined in paragraph 3.1), Acquired Fund shall
assign, sell, convey, transfer, and deliver all of its assets described in
paragraph 1.2 ("Assets") to Acquiring Fund. In exchange therefor, Acquiring Fund
shall:
a) issue and deliver to Acquired Fund the number of full
and fractional (rounded to the third decimal place) (i) Class A
Acquiring Fund Shares determined by dividing the net value of Acquired
Fund (computed as set forth in paragraph 2.1) ("Acquired Fund Value")
attributable to the Class A Acquired Fund Shares by the net asset value
("NAV") of a Class A Acquiring Fund Share (computed as set forth in
paragraph 2.2), (ii) Class B Acquiring Fund Shares determined by
dividing the Acquired Fund Value attributable to the Class B Acquired
Fund Shares by the NAV of a Class B Acquiring Fund Share (as so
computed), (iii) Class C Acquiring Fund Shares determined by dividing
the Acquired Fund Value attributable to the Class C Acquired Fund
Shares by the NAV of a Class C Acquiring Fund Share (as so computed),
(iv) Class S Acquiring Fund Shares determined by dividing the Acquired
Fund Value attributable to the Class S Acquired Fund Shares by the NAV
of a Class S Acquiring Fund Share (as so computed), and (v) Class Y
Acquiring Fund Shares determined by dividing the Acquired Fund Value
attributable to the Class Y Acquired Fund Shares by the NAV of a Class
Y Acquiring Fund Share (as so computed), and
b) assume all of Acquired Fund's liabilities described
in paragraph 1.3 ("Liabilities").
1.2 The Assets shall consist of all cash, cash equivalents, securities,
receivables (including interest and dividends receivable), claims and rights of
action, rights to register shares under applicable securities laws, books and
records, deferred and prepaid expenses shown as assets on Acquired Fund's books,
and other property owned by Acquired Fund at the Effective Time (as defined in
paragraph 3.1).
1.3 The Liabilities shall consist of all of Acquired Fund's
liabilities, debts, obligations, and duties of whatever kind or nature, whether
absolute, accrued, contingent, or otherwise, whether or not arising in the
ordinary course of business, whether or not determinable at the Effective Time,
and whether or not specifically referred to in this Plan. Notwithstanding the
foregoing, Acquired Fund shall use its best efforts to discharge all its known
Liabilities before the Effective Time.
1.4 At or immediately before the Effective Time, Acquired Fund shall
declare and pay to its shareholders a dividend and/or other distribution in an
amount large enough so that it will have distributed substantially all (and in
any event not less than 90%) of its "investment company taxable income" and
substantially all of its "net capital gain," if any (as such terms are defined
in sections 852(b)(2) and 1222(11), respectively, of the Code, both computed
without regard to any deduction for dividends paid) for the current taxable year
through the Effective Time.
A-2
1.5 At the Effective Time (or as soon thereafter as is reasonably
practicable), Acquired Fund shall distribute the Acquiring Fund Shares it
receives pursuant to paragraph 1.1 to its shareholders of record, determined as
of the Effective Time (each a "Shareholder" and collectively "Shareholders"), in
constructive exchange for their Acquired Fund Shares. That distribution shall be
accomplished by FAIF's transfer agent's opening accounts on Acquiring Fund's
share transfer books in the Shareholders' names and transferring those Acquiring
Fund Shares thereto. Each Shareholder's account shall be credited with the
respective PRO RATA number of full and fractional (rounded to the third decimal
place) Acquiring Fund Shares due that Shareholder, by class (I.E., the account
for a shareholder of Class A Acquired Fund Shares shall be credited with the
respective PRO rata number of Class A Acquiring Fund Shares due that
Shareholder, the account for a Shareholder of Class B Acquired Fund Shares shall
be credited with the respective PRO RATA number of Class B Acquiring Fund Shares
due that Shareholder, the account for a Shareholder of Class C Acquired Fund
Shares shall be credited with the respective PRO RATA number of Class C
Acquiring Fund Shares due that Shareholder, the account for a Shareholder of
Class S Acquired Fund Shares shall be credited with the respective PRO RATA
number of Class S Acquiring Fund Shares due that Shareholder, and the account
for a shareholder of Class Y Acquired Fund Shares shall be credited with the
respective PRO RATA number of Class Y Acquiring Fund Shares due that
Shareholder). All outstanding Acquired Fund Shares, including any represented by
certificates, shall simultaneously be canceled on Acquired Fund's share transfer
books. Acquiring Fund shall not issue certificates representing the Acquiring
Fund Shares issued in connection with the Reorganization.
1.6 As soon as reasonably practicable after distribution of the
Acquiring Fund Shares pursuant to paragraph 1.5, but in all events within six
months after the Effective Time, Acquired Fund shall be terminated as a series
of FAIF and any further actions shall be taken in connection therewith as
required by applicable law.
1.7 Any reporting responsibility of Acquired Fund to a public authority
is and shall remain its responsibility up to and including the date on which it
is terminated.
1.8 Any transfer taxes payable on issuance of Acquiring Fund Shares in
a name other than that of the registered holder on Acquired Fund's books of the
Acquired Fund Shares constructively exchanged therefor shall be paid by the
person to whom those Acquiring Fund Shares are to be issued, as a condition of
that transfer.
1.9 Before the Effective Time, FAIF shall (a) obtain approval, pursuant
to Maryland law, of Articles of Amendment ("Amendment") to its Amended and
Restated Articles of Incorporation ("Articles") (in substantially the form
attached hereto as Exhibit A) and (b) file the Amendment with the State of
Maryland Department of Assessments and Taxation.
1.10 In determining contingent deferred sales charges applicable to
Class B Acquiring Fund Shares and Class C Acquiring Fund Shares issued in the
Reorganization and the date on which such Class B Acquiring Fund Shares convert
to Class A Acquiring Fund Shares, Acquiring Fund shall give each holder thereof
credit for the period during which such holder held the Class B Acquired Fund
Shares or Class C Acquired Fund Shares, as the case may be, in exchange for
which such Acquiring Fund Shares were issued. If Class A Acquiring Fund Shares
are issued in the Reorganization to Shareholders that formerly held Class A
Acquired Fund Shares with
A-3
respect to which the front-end sales charge was waived due to a purchase of $1
million or more, then, in determining whether a deferred sales charge is payable
on the sale of such Class A Acquiring Fund Shares, Acquiring Fund shall give the
holder thereof credit for the period during which such holder held such Acquired
Fund Shares.
2. VALUATION
2.1 For purposes of paragraph 1.1(a), Acquired Fund's net value shall
be (a) the value of the Assets computed as of the close of regular trading on
the New York Stock Exchange ("NYSE") on the date of the Closing ("Valuation
Time"), using the valuation procedures set forth in Acquired Fund's then-current
prospectuses and FAIF's statement of additional information ("SAI") less (b) the
amount of the Liabilities as of the Valuation Time.
2.2 For purposes of paragraph 1.1(a), the NAV per share of each class
of Acquiring Fund Shares shall be computed as of the Valuation Time, using the
valuation procedures set forth in Acquiring Fund's then-current prospectuses and
the SAI.
2.3 All computations pursuant to paragraphs 2.1 and 2.2 shall be made
by or under the direction of U.S. Bancorp Asset Management, Inc. ("USBAM").
3. CLOSING AND EFFECTIVE TIME
3.1 The Reorganization, together with related acts necessary to
consummate the same ("Closing"), shall occur at FAIF's principal office on or
about ____, 2003, or at such other place and/or on such other date FAIF
determines. All acts taking place at the Closing shall be deemed to take place
simultaneously as of the close of business on the date thereof or at such other
time FAIF determines ("Effective Time"). If, immediately before the Valuation
Time, (a) the NYSE is closed to trading or trading thereon is restricted or (b)
trading or the reporting of trading on the NYSE or elsewhere is disrupted, so
that accurate appraisal of Acquired Fund's net value and/or the NAV per share of
each class of Acquiring Fund Shares is impracticable, the Effective Time shall
be postponed until the first business day after the day when that trading has
been fully resumed and that reporting has been restored.
3.2 FAIF's fund accounting and pricing agent shall deliver at the
Closing a certificate of an authorized officer verifying that the information
(including adjusted basis and holding period, by lot) concerning the Assets,
including all portfolio securities, transferred by Acquired Fund to Acquiring
Fund, as reflected on Acquiring Fund's books immediately after the Closing, does
or will conform to that information on Acquired Fund's books immediately before
the Closing. FAIF's custodian shall deliver at the Closing a certificate of an
authorized officer stating that (a) the Assets it holds will be transferred to
Acquiring Fund at the Effective Time and (b) all necessary taxes in conjunction
with the delivery of the Assets, including all applicable federal and state
stock transfer stamps, if any, have been paid or provision for payment has been
made.
3.3 FAIF's transfer agent shall deliver at the Closing a certificate as
to the opening on Acquiring Fund's share transfer books of accounts in the
Shareholders' names and a confirmation, or other evidence satisfactory to FAIF,
that the Acquiring Fund Shares to be credited to Acquired Fund at the Effective
Time have been credited to Acquired Fund's account on Acquiring Fund's books.
A-4
4. CONDITIONS PRECEDENT
4.1 FAIF's obligation to implement this Plan on each Fund's behalf
shall be subject to satisfaction of the following conditions either at the time
stated therein or, if no time is so stated, at or before (and continuing
through) the Effective Time:
4.1.1 This Plan has been approved by Acquired Fund's
shareholders in accordance with applicable law;
4.1.2 The fair market value of the Acquiring Fund Shares each
Shareholder receives will be approximately equal to the fair market
value of the Acquired Fund Shares it constructively surrenders in
exchange therefor;
4.1.3 Its management (a) is unaware of any plan or intention
of Shareholders to redeem, sell, or otherwise dispose of (i) any
portion of their Acquired Fund Shares before the Reorganization to any
person "related" (within the meaning of section 1.368-1(e)(3) of the
Regulations) to either Fund or (ii) any portion of the Acquiring Fund
Shares they receive in the Reorganization to any person "related"
(within such meaning) to Acquiring Fund, (b) does not anticipate
dispositions of those Acquiring Fund Shares at the time of or soon
after the Reorganization to exceed the usual rate and frequency of
dispositions of shares of Acquired Fund as a series of an open-end
investment company, (c) expects that the percentage of Shareholder
interests, if any, that will be disposed of as a result of or at the
time of the Reorganization will be DE MINIMIS, and (d) does not
anticipate that there will be extraordinary redemptions of Acquiring
Fund Shares immediately following the Reorganization;
4.1.4 Each Shareholder will pay his or her own expenses
(including fees of personal investment or tax advisors for advice
regarding the Reorganization), if any, he or she incurs in connection
with the Reorganization;
4.1.5 The fair market value of the Assets on a going concern
basis will equal or exceed the Liabilities to be assumed by Acquiring
Fund and those to which the Assets are subject;
4.1.6 There is no intercompany indebtedness between the Funds
that was issued or acquired, or will be settled, at a discount;
4.1.7 Pursuant to the Reorganization, Acquired Fund will
transfer to Acquiring Fund, and Acquiring Fund will acquire, at least
90% of the fair market value of the net assets, and at least 70% of the
fair market value of the gross assets, Acquired Fund held immediately
before the Reorganization. For the purposes of the foregoing, any
amounts Acquired Fund uses to pay its Reorganization expenses and to
make redemptions and distributions immediately before the
Reorganization (except (a) redemptions in the ordinary course of its
business required by section 22(e) of the Investment Company Act of
1940, as amended ("1940 Act"), and (b) regular, normal dividend
distributions made to conform to its policy of distributing all or
substantially all of its income and gains to avoid the obligation to
pay federal income tax and/or the excise tax under section 4982 of the
Code) will be included as assets held thereby immediately before the
Reorganization;
4.1.8 None of the compensation received by any Shareholder who
is an employee of or service provider to Acquired Fund will be separate
consideration for, or
A-5
allocable to, any of the Acquired Fund Shares that Shareholder held;
none of the Acquiring Fund Shares any such Shareholder receives will be
separate consideration for, or allocable to, any employment agreement,
investment advisory agreement, or other service agreement; and the
consideration paid to any such Shareholder will be for services
actually rendered and will be commensurate with amounts paid to third
parties bargaining at arm's-length for similar services;
4.1.9 Immediately after the Reorganization, the Shareholders
will not own shares constituting "control" (as defined in section
304(c) of the Code) of the Acquiring Fund;
4.1.10 Neither Fund will be reimbursed for any expenses
incurred by it or on its behalf in connection with the Reorganization
unless those expenses are solely and directly related to the
Reorganization (determined in accordance with the guidelines set forth
in Rev. Rul. 73-54, 1973-1 C.B. 187) ("Reorganization Expenses");
4.1.11 The aggregate value of the acquisitions, redemptions,
and distributions limited by paragraphs 4.2.6, 4.3.4, and 4.3.9 will
not exceed 50% of the value (without giving effect to such
acquisitions, redemptions, and distributions) of the proprietary
interest in Acquired Fund at the Effective Time;
4.1.12 FAIF has called a special meeting of Acquired Fund's
shareholders ("Meeting") to consider and act on this Plan and to take
all other action necessary to obtain their approval, to the extent same
is required, of the transactions contemplated herein; and such approval
has been obtained;
4.1.13 This Plan has been duly authorized by all necessary
action on the part of FAIF's board of directors ("Board"), which has
made the determinations required by Rule 17a-8(a) under the 1940 Act;
and, subject to Acquired Fund's shareholders' approval in accordance
with the Articles and applicable law, this Plan constitutes a valid and
legally binding obligation of each Fund, enforceable in accordance with
its terms, except as the same may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium, and similar laws
relating to or affecting creditors' rights and by general principles of
equity;
4.1.14 FAIF has filed the Amendment in accordance with
applicable provisions of Maryland law; and
4.1.15 FAIF has received an opinion of Kirkpatrick & Lockhart
LLP ("Counsel"), addressed to and in form and substance reasonably
satisfactory to it, as to the federal income tax consequences mentioned
below ("Tax Opinion"). In rendering the Tax Opinion, Counsel may assume
satisfaction of all the conditions set forth in this paragraph 4, may
treat them as representations and warranties FAIF made to Counsel, and
may rely as to any factual matters, exclusively and without independent
verification, on such representations and warranties and any other
representations responsible officers of FAIF make to Counsel. The Tax
Opinion shall be substantially to the effect that, based on the facts
and assumptions stated therein and conditioned on the Reorganization's
being consummated in accordance with this Plan, for federal income tax
purposes:
A-6
4.1.15.1 Acquiring Fund's acquisition of the Assets in
exchange solely for Acquiring Fund Shares and its assumption of the
Liabilities, followed by Acquired Fund's distribution of those shares
PRO rata to the Shareholders constructively in exchange for their
Acquired Fund Shares, will qualify as a "reorganization" as defined in
section 368(a)(1)(C) of the Code, and each Fund will be "a party to a
reorganization" within the meaning of section 368(b) of the Code;
4.1.15.2 Acquired Fund will recognize no gain or loss on the
transfer of the Assets to Acquiring Fund in exchange solely for
Acquiring Fund Shares and Acquiring Fund's assumption of the
Liabilities or on the subsequent distribution of those shares to the
Shareholders in constructive exchange for their Acquired Fund Shares;
4.1.15.3 Acquiring Fund will recognize no gain or loss on its
receipt of the Assets in exchange solely for Acquiring Fund Shares and
its assumption of the Liabilities;
4.1.15.4 Acquiring Fund's basis in the Assets will be the same
as Acquired Fund's basis therein immediately before the Reorganization,
and Acquiring Fund's holding period for the Assets will include
Acquired Fund's holding period therefor;
4.1.15.5 A Shareholder will recognize no gain or loss on the
constructive exchange of all its Acquired Fund Shares solely for
Acquiring Fund Shares pursuant to the Reorganization; and
4.1.15.6 A Shareholder's aggregate basis in the Acquiring Fund
Shares it receives in the Reorganization will be the same as the
aggregate basis in its Acquired Fund Shares it constructively
surrenders in exchange for those Acquiring Fund Shares, and its holding
period for those Acquiring Fund Shares will include its holding period
for those Acquired Fund Shares, provided the Shareholder holds them as
capital assets at the Effective Time.
Notwithstanding subparagraphs 4.1.15.2 and 4.1.15.4, the Tax Opinion may
state that no opinion is expressed as to the effect of the Reorganization
on the Funds or any Shareholder with respect to any Asset as to which any
unrealized gain or loss is required to be recognized for federal income tax
purposes at the end of a taxable year (or on the termination or transfer
thereof) under a mark-to-market system of accounting.
4.2 FAIF's obligation to implement this Plan on Acquiring Fund's behalf
shall be subject to satisfaction of the following conditions either at the time
stated therein or, if no time is so stated, at or before (and continuing
through) the Effective Time:
4.2.1 At the Effective Time, Acquired Fund will have good and
marketable title to the Assets and full right, power, and authority to
sell, assign, transfer, and deliver the Assets free of any liens or
other encumbrances (except securities that are subject to
A-7
"securities loans" as referred to in section 851(b)(2) of the Code);
and on delivery and payment for the Assets, Acquiring Fund will acquire
good and marketable title thereto;
4.2.2 Acquired Fund incurred the Liabilities in the ordinary
course of its business;
4.2.3 Acquired Fund is a "fund" as defined in section
851(g)(2) of the Code; it qualified for treatment as a regulated
investment company under Subchapter M of the Code ("RIC") for each past
taxable year since it commenced operations and will continue to meet
all the requirements for that qualification for its current taxable
year; it will invest the Assets at all times through the Effective Time
in a manner that ensures compliance with the foregoing; and it has no
earnings and profits accumulated in any taxable year in which the
provisions of Subchapter M did not apply to it;
4.2.4 Acquired Fund is not under the jurisdiction of a court
in a "title 11 or similar case" (as defined in section 368(a)(3)(A) of
the Code);
4.2.5 From the date it commenced operations through the
Effective Time, Acquired Fund will conduct its "historic business"
(within the meaning of section 1.368-1(d)(2) of the Regulations) in a
substantially unchanged manner; and before the Effective Time Acquired
Fund will not (a) dispose of and/or acquire any assets (i) for the
purpose of satisfying Acquiring Fund's investment objective or policies
or (ii) for any other reason except in the ordinary course of its
business as a RIC, or (b) otherwise change its historic investment
policies;
4.2.6 During the five-year period ending at the Effective
Time, (a) neither Acquired Fund nor any person "related" (within the
meaning of section 1.368-1(e)(3) of the Regulations) to it will have
acquired Acquired Fund Shares, either directly or through any
transaction, agreement, or arrangement with any other person, with
consideration other than Acquiring Fund Shares or Acquired Fund Shares,
except for shares redeemed in the ordinary course of Acquired Fund's
business as a series of an open-end investment company as required by
section 22(e) of the 1940 Act, and (b) no distributions will have been
made with respect to Acquired Fund Shares, other than normal, regular
dividend distributions made pursuant to Acquired Fund's historic
dividend-paying practice and other distributions that qualify for the
deduction for dividends paid (within the meaning of section 561 of the
Code) referred to in sections 852(a)(1) and 4982(c)(1)(A) of the Code;
and
4.2.7 Not more than 25% of the value of Acquired Fund's total
assets (excluding cash, cash items, and U.S. government securities) is
invested in the stock and securities of any one issuer, and not more
than 50% of the value of such assets is invested in the stock and
securities of five or fewer issuers.
4.3 FAIF's obligation to implement this Plan on Acquired Fund's behalf
shall be subject to satisfaction of the following conditions either at the time
stated therein or, if no time is so stated, at or before (and continuing
through) the Effective Time:
4.3.1 No consideration other than Acquiring Fund Shares (and
Acquiring Fund's assumption of the Liabilities) will be issued in
exchange for the Assets in the Reorganization;
A-8
4.3.2 The Acquiring Fund Shares to be issued and delivered to
Acquired Fund hereunder will have been duly authorized at the Effective
Time and, when issued and delivered as provided herein, will be duly
and validly issued and outstanding shares of Acquiring Fund, fully paid
and non-assessable by FAIF;
4.3.3 Acquiring Fund is a "fund" as defined in section
851(g)(2) of the Code; it qualified for treatment as a RIC for each
past taxable year since it commenced operations and will continue to
meet all the requirements for such qualification for its current
taxable year; it intends to continue to meet all such requirements for
the next taxable year; and it has no earnings and profits accumulated
in any taxable year in which the provisions of Subchapter M of the Code
did not apply to it;
4.3.4 Acquiring Fund has no plan or intention to issue
additional Acquiring Fund Shares following the Reorganization except
for shares issued in the ordinary course of its business as a series of
an open-end investment company; nor does Acquiring Fund, or any person
"related" (within the meaning of section 1.368-1(e)(3) of the
Regulations) to it, have any plan or intention to acquire -- during the
five-year period beginning at the Effective Time, either directly or
through any transaction, agreement, or arrangement with any other
person -- with consideration other than Acquiring Fund Shares, any
Acquiring Fund Shares issued to the Shareholders pursuant to the
Reorganization, except for redemptions in the ordinary course of such
business as required by section 22(e) of the 1940 Act;
4.3.5 Following the Reorganization, Acquiring Fund (a) will
continue Acquired Fund's "historic business" (within the meaning of
section 1.368-1(d)(2) of the Regulations) and (b) will use a
significant portion of Acquired Fund's "historic business assets"
(within the meaning of section 1.368-1(d)(3) of the Regulations) in a
business; in addition, (c) Acquiring Fund has no plan or intention to
sell or otherwise dispose of any of the Assets, except for dispositions
made in the ordinary course of that business and dispositions necessary
to maintain its status as a RIC, and (d) expects to retain
substantially all the Assets in the same form as it receives them in
the Reorganization, unless and until subsequent investment
circumstances suggest the desirability of change or it becomes
necessary to make dispositions thereof to maintain such status;
4.3.6 There is no plan or intention for Acquiring Fund to be
dissolved or merged into another corporation or a business trust or any
"fund" thereof (as defined in section 851(g)(2) of the Code) following
the Reorganization;
4.3.7 Immediately after the Reorganization, (a) not more than
25% of the value of Acquiring Fund's total assets (excluding cash, cash
items, and U.S. government securities) will be invested in the stock
and securities of any one issuer and (b) not more than 50% of the value
of such assets will be invested in the stock and securities of five or
fewer issuers;
4.3.8 Acquiring Fund does not directly or indirectly own, nor
at the Effective Time will it directly or indirectly own, nor has it
directly or indirectly owned at any time during the past five years,
any shares of Acquired Fund; and
4.3.9 During the five-year period ending at the Effective
Time, neither Acquiring Fund nor any person "related" (within the
meaning of section 1.368-1(e)(3) of
A-9
the Regulations) to it will have acquired Acquired Fund Shares with
consideration other than Acquiring Fund Shares.
4.4 At any time before the Effective Time, FAIF may waive any of the
conditions set forth in this paragraph 4 if, in the judgment of the Board, such
a waiver will not have a material adverse effect on either Fund's shareholders'
interests.
5. EXPENSES
USBAM shall bear the total Reorganization Expenses.
6. TERMINATION AND AMENDMENT OF PLAN
6.1 The Board may terminate this Plan and abandon the Reorganization at
any time before the Effective Time if circumstances develop that, in its
judgment, make proceeding with the Reorganization inadvisable for either Fund.
6.2 The Board may amend, modify, or supplement this Plan at any time in
any manner, notwithstanding Acquired Fund's shareholders' approval thereof;
provided that following such approval no such amendment, modification, or
supplement shall have a material adverse effect on the Shareholders' interests.
7. MISCELLANEOUS
7.1 This Plan shall be governed by and construed in accordance with the
internal laws of the State of Maryland; provided that, in the case of any
conflict between such laws and the federal securities laws, the latter shall
govern.
7.2 In the case of any inconsistency between the terms hereof and the
terms of the Amendment, the latter shall apply.
7.3 Nothing expressed or implied herein is intended or shall be
construed to confer on or give any person, firm, trust, or corporation other
than the Funds and their respective successors and assigns any rights or
remedies under or by reason of this Plan.
A-10
SCHEDULE A
- --------------------------------------- ----------------------------------------
ACQUIRED FUNDS ACQUIRING FUNDS
- --------------------------------------- ----------------------------------------
Large Cap Growth Fund Large Cap Core Fund(1)
- --------------------------------------- ----------------------------------------
Health Sciences Fund Large Cap Core Fund(1)
- --------------------------------------- ----------------------------------------
Mid Cap Growth Fund Mid Cap Core Fund(2)
- --------------------------------------- ----------------------------------------
Small Cap Growth Fund Small Cap Core Fund(3)
- --------------------------------------- ----------------------------------------
Emerging Markets Fund International Fund
- --------------------------------------- ----------------------------------------
Bond IMMDEX Fixed Income Fund(4)
- --------------------------------------- ----------------------------------------
High Yield Bond Fund Strategic Income Fund(5)
- --------------------------------------- ----------------------------------------
(1) To be renamed "Large Cap Growth Opportunities Fund" after the
Reorganization.
(2) To be renamed "Mid Cap Growth Opportunities Fund" after the Reorganization.
(3) To be renamed "Small Cap Select Fund" after the Reorganization.
(4) To be renamed "Core Bond Fund" after the Reorganization.
(5) To be renamed "High Income Bond Fund" after the Reorganization.
A-11
Exhibit A
---------
FORM OF ARTICLES OF AMENDMENT
TO
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
FIRST AMERICAN INVESTMENT FUNDS, INC.
The undersigned officer of First American Investment Funds, Inc. (the
"Corporation"), a Maryland corporation, hereby certifies that the following
amendments to the Corporation's Amended and Restated Articles of Incorporation
have been adopted by the Board of Directors and by the requisite vote of
shareholders of the Corporation in the manner required by Maryland General
Corporation Law:
WHEREAS, the Corporation is registered as an open-end management
investment company (I.E., a mutual fund) under the Investment Company Act of
1940 and offers its shares to the public in several series, each of which
represents a separate and distinct portfolio of assets;
WHEREAS, it is desirable and in the best interests of the holders of
the Class S shares of the Corporation (also known as "Large Cap Growth Fund")
that the assets belonging to such class, subject to all liabilities of such
class be sold to a separate portfolio of the Corporation which is known as
"Large Cap Core Fund" and which is represented by the Corporation's Class QQ
shares, in exchange for shares of Large Cap Core Fund, which shares will be
distributed PRO RATA to the former shareholders of Large Cap Growth Fund;
WHEREAS, Large Cap Growth Fund and Large Cap Core Fund have entered
into a Plan of Reorganization and Termination providing for the foregoing
transactions; and
WHEREAS, the Plan of Reorganization and Termination requires that, in
order to bind all holders of shares of Large Cap Growth Fund to the foregoing
transactions, and in particular to bind such holders to the cancellation and
retirement of the outstanding Large Cap Growth Fund shares, it is necessary to
adopt an amendment to the Corporation's Amended and Restated Articles of
Incorporation.
NOW, THEREFORE, BE IT RESOLVED, that the Corporation's Amended and
Restated Articles of Incorporation be, and the same hereby are, amended to add
the following Article IV(K) immediately following Article IV(J) thereof:
ARTICLE IV(K). (a) For the purposes of this Article IV(K), the
following terms shall have the following meanings:
"Acquired Fund" means the Corporation's Large Cap Growth Fund,
which is represented by the Corporation's Class S shares.
"Class A Acquired Fund Shares" means the Corporation's Class S
Common Shares.
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"Class B Acquired Fund Shares" means the Corporation's Class
S, Series 2 Common Shares.
"Class C Acquired Fund Shares" means the Corporation's Class
S, Series 4 Common Shares.
"Class S Acquired Fund Shares" means the Corporation's Class
S, Series 5 Common Fund Shares.
"Class Y Acquired Fund Shares" means the Corporation's Class
S, Series 3 Common Shares.
"Acquiring Fund" means the Corporation's Large Cap Core Fund,
which is represented by the Corporation's Class QQ shares.
"Class A Acquiring Fund Shares" means the Corporation's Class
QQ Common Shares.
"Class B Acquiring Fund Shares" means the Corporation's Class
QQ, Series 2 Common Shares.
"Class C Acquiring Fund Shares" means the Corporation's Class
QQ, Series 3 Common Shares.
"Class S Acquiring Fund Shares" means the Corporation's Class
QQ, Series 5 Common Shares.
"Class Y Acquiring Fund Shares" means the Corporation's Class
QQ, Series 4 Common Shares.
"Reorganization Agreement" means that Plan of Reorganization
and Termination dated ___ 2002 between the Acquiring Fund and Acquired
Fund.
"Effective Time" means the date and time at which delivery of
the assets of the Acquired Fund and the shares of the Acquiring Fund to
be issued pursuant to the Reorganization Agreement, and the liquidation
of the Acquired Fund, occurs.
"Valuation Time" means the close of business on the New York
Stock Exchange, normally 4:00 p.m. Eastern Time, on the business day
immediately prior to the Effective Time.
(b) At the Effective Time, the assets belonging to the Acquired Fund,
the liabilities belonging to the Acquired Fund, and the General Assets and
General Liabilities allocated to the Acquired Fund, shall be sold to and assumed
by the Acquiring Fund in return for Acquiring Fund shares, all pursuant to the
Reorganization Agreement. For purposes of the foregoing, the terms "assets
belonging to," "liabilities belonging to," "General Assets" and "General
Liabilities" have the meanings assigned to them in Article IV, Section 1(d)(i)
and (ii) of the Corporation's Amended and Restated Articles of Incorporation.
A-13
(c) The numbers of Class A, Class B, Class C, Class S and Class Y
Acquiring Fund Shares to be received by the Acquired Fund and distributed by it
to the holders of Class A, Class B, Class C, Class S and Class Y Acquired Fund
Shares shall be determined as follows:
(i) The net asset value per share of the Acquired Fund's and
the Acquiring Fund's Class A Shares, Class B Shares, Class C Shares,
Class S Shares and Class Y Shares shall be computed as of the Valuation
Time using the valuation procedures set forth in the Corporation's
Articles of Incorporation and Bylaws and then-current Prospectus and
Statement of Additional Information and as may be required by the
Investment Company Act of 1940, as amended (the "1940 Act").
(ii) The total number of Class A Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class A Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class A Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class A
Acquiring Fund Shares, each as determined pursuant to (i) above.
(iii) The total number of Class B Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class B Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class B Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class B
Acquiring Fund Shares, each as determined pursuant to (i) above.
(iv) The total number of Class C Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class C Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class C Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class C
Acquiring Fund Shares, each as determined pursuant to (i) above.
(v) The total number of Class S Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class S Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class S Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class S
Acquiring Fund Shares, each as determined pursuant to (i) above.
(vi) The total number of Class Y Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class Y Acquired Fund
Shares outstanding times a fraction, the numerator of which is
A-14
the net asset value per share of Class Y Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class Y
Acquiring Fund Shares, each as determined pursuant to (i) above.
(vii) At the Effective Time, the Acquired Fund shall
distribute to the Acquired Fund shareholders of the respective classes
PRO RATA within such classes (based upon the ratio that the number of
Acquired Fund shares of the respective classes owned by each Acquired
Fund shareholder bears to the total number of issued and outstanding
Acquired Fund shares of the respective classes) the full and fractional
Acquiring Fund shares of the respective classes received by the
Acquired Fund pursuant to (ii) through (vi) above. Accordingly, each
Class A Acquired Fund shareholder shall receive, at the Effective Time,
Class A Acquiring Fund Shares with an aggregate net asset value equal
to the aggregate net asset value of the Class A Acquired Fund Shares
owned by such Acquired Fund shareholder; each Class B Acquired Fund
shareholder shall receive, at the Effective Time, Class B Acquiring
Fund Shares with an aggregate net asset value equal to the aggregate
net asset value of the Class B Acquired Fund Shares owned by such
Acquired Fund shareholder; each Class C Acquired Fund shareholder shall
receive, at the Effective Time, Class C Acquiring Fund Shares with an
aggregate net asset value equal to the aggregate net asset value of the
Class C Acquired Fund Shares owned by such Acquired Fund shareholder;
each Class S Acquired Fund shareholder shall receive, at the Effective
Time, Class S Acquiring Fund Shares with an aggregate net asset value
equal to the aggregate net asset value of the Class S Acquired Fund
Shares owned by such Acquired Fund shareholder; and each Class Y
Acquired Fund shareholder shall receive, at the Effective Time, Class Y
Acquiring Fund Shares with an aggregate net asset value equal to the
aggregate net asset value of the Class Y Acquired Fund Shares owned by
such Acquired Fund shareholder.
(d) The distribution of Acquiring Fund shares to Acquired Fund
shareholders provided for in paragraph (c) above shall be accomplished by an
instruction, signed by the Corporation's Secretary, to transfer the Acquiring
Fund shares then credited to the Acquired Fund's account on the books of the
Acquiring Fund to open accounts on the share records of the Acquiring Fund in
the names of the Acquired Fund shareholders in amounts representing the
respective PRO RATA number of Acquiring Fund shares due each such shareholder
pursuant to the foregoing provisions. All issued and outstanding shares of the
Acquired Fund shall simultaneously be cancelled on the books of the Acquired
Fund and retired.
(e) From and after the Effective Time, the Acquired Fund shares
cancelled and retired pursuant to paragraph (d) above shall have the status of
authorized and unissued Class S Common Shares of the Corporation, without
designation as to series.
WHEREAS, the Corporation is registered as an open-end management
investment company (I.E., a mutual fund) under the Investment Company Act of
1940 and offers its shares to the public in several series, each of which
represents a separate and distinct portfolio of assets;
WHEREAS, it is desirable and in the best interests of the holders of
the Class W shares of the Corporation (also known as "Health Sciences Fund")
that the assets belonging to such class, subject to all liabilities of such
class, be sold to a separate portfolio of the Corporation which is known as
"Large Cap Core Fund" and which is represented by the Corporation's Class QQ
shares, in exchange for shares of Large Cap Core Fund, which shares will be
distributed PRO RATA to the former shareholders of Health Sciences Fund;
A-15
WHEREAS, Health Sciences Fund and Large Cap Core Fund have entered into
a Plan of Reorganization and Termination providing for the foregoing
transactions; and
WHEREAS, the Plan of Reorganization and Termination requires that, in
order to bind all holders of shares of Health Sciences Fund to the foregoing
transactions, and in particular to bind such holders to the cancellation and
retirement of the outstanding Health Sciences Fund shares, it is necessary to
adopt an amendment to the Corporation's Amended and Restated Articles of
Incorporation.
NOW, THEREFORE, BE IT RESOLVED, that the Corporation's Amended and
Restated Articles of Incorporation be, and the same hereby are, amended to add
the following Article IV(L) immediately following Article IV(K) thereof:
ARTICLE IV(L). (a) For the purposes of this Article IV(L), the
following terms shall have the following meanings:
"Acquired Fund" means the Corporation's Health Sciences Fund,
which is represented by the Corporation's Class W shares.
"Class A Acquired Fund Shares" means the Corporation's Class
W Common Shares.
"Class B Acquired Fund Shares" means the Corporation's Class
W, Series 2 Common Shares.
"Class C Acquired Fund Shares" means the Corporation's Class
W, Series 4 Common Shares.
"Class S Acquired Fund Shares" means the Corporation's Class
W, Series 5 Common Fund Shares.
"Class Y Acquired Fund Shares" means the Corporation's Class
W, Series 3 Common Shares.
"Acquiring Fund" means the Corporation's Large Cap Core Fund,
which is represented by the Corporation's Class QQ shares.
"Class A Acquiring Fund Shares" means the Corporation's Class
QQ Common Shares.
"Class B Acquiring Fund Shares" means the Corporation's Class
QQ, Series 2 Common Shares.
"Class C Acquiring Fund Shares" means the Corporation's Class
QQ, Series 3 Common Shares.
"Class S Acquiring Fund Shares" means the Corporation's Class
QQ, Series 5 Common Fund Shares.
A-16
"Class Y Acquiring Fund Shares" means the Corporation's Class
QQ, Series 4 Common Shares.
"Reorganization Agreement" means that Plan of Reorganization
and Termination dated ___, 2002 between the Acquired Fund and the
Acquiring Fund.
"Effective Time" means the date and time at which delivery of
the assets of the Acquired Fund and the shares of the Acquiring Fund to
be issued pursuant to the Reorganization Agreement, and the liquidation
of the Acquired Fund, occurs.
"Valuation Time" means the close of business on the New York
Stock Exchange, normally 4:00 p.m. Eastern Time, on the business day
immediately prior to the Effective Time.
(b) At the Effective Time, the assets belonging to the Acquired Fund,
the liabilities belonging to the Acquired Fund, and the General Assets and
General Liabilities allocated to the Acquired Fund, shall be sold to and assumed
by the Acquiring Fund in return for Acquiring Fund shares, all pursuant to the
Reorganization Agreement. For purposes of the foregoing, the terms "assets
belonging to," "liabilities belonging to," "General Assets" and "General
Liabilities" have the meanings assigned to them in Article IV, Section 1(d)(i)
and (ii) of the Corporation's Amended and Restated Articles of Incorporation.
(c) The numbers of Class A, Class B, Class C, Class S and Class Y
Acquiring Fund Shares to be received by the Acquired Fund and distributed by it
to the holders of Class A, Class B, Class C, Class S and Class Y Acquired Fund
Shares shall be determined as follows:
(i) The net asset value per share of the Acquired Fund's and
the Acquiring Fund's Class A Shares, Class B Shares, Class C Shares,
Class S Shares and Class Y Shares shall be computed as of the Valuation
Time using the valuation procedures set forth in the Corporation's
Articles of Incorporation and Bylaws and then-current Prospectus and
Statement of Additional Information and as may be required by the
Investment Company Act of 1940, as amended (the "1940 Act").
(ii) The total number of Class A Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class A Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class A Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class A
Acquiring Fund Shares, each as determined pursuant to (i) above.
(iii) The total number of Class B Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class B Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class B Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class B
Acquiring Fund Shares, each as determined pursuant to (i) above.
A-17
(iv) The total number of Class C Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class C Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class C Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class C
Acquiring Fund Shares, each as determined pursuant to (i) above.
(v) The total number of Class S Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class S Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class S Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class S
Acquiring Fund Shares, each as determined pursuant to (i) above.
(vi) The total number of Class Y Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class Y Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class Y Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class Y
Acquiring Fund Shares, each as determined pursuant to (i) above.
(vii) At the Effective Time, the Acquired Fund shall
distribute to the Acquired Fund shareholders of the respective classes
PRO RATA within such classes (based upon the ratio that the number of
Acquired Fund shares of the respective classes owned by each Acquired
Fund shareholder bears to the total number of issued and outstanding
Acquired Fund shares of the respective classes) the full and fractional
Acquiring Fund shares of the respective classes received by the
Acquired Fund pursuant to (ii) through (vi) above. Accordingly, each
Class A Acquired Fund shareholder shall receive, at the Effective Time,
Class A Acquiring Fund Shares with an aggregate net asset value equal
to the aggregate net asset value of the Class A Acquired Fund Shares
owned by such Acquired Fund shareholder; each Class B Acquired Fund
shareholder shall receive, at the Effective Time, Class B Acquiring
Fund Shares with an aggregate net asset value equal to the aggregate
net asset value of the Class B Acquired Fund Shares owned by such
Acquired Fund shareholder; each Class C Acquired Fund shareholder shall
receive, at the Effective Time, Class C Acquiring Fund Shares with an
aggregate net asset value equal to the aggregate net asset value of the
Class C Acquired Fund Shares owned by such Acquired Fund shareholder;
each Class S Acquired Fund shareholder shall receive, at the Effective
Time, Class S Acquiring Fund Shares with an aggregate net asset value
equal to the aggregate net asset value of the Class S Acquired Fund
Shares owned by such Acquired Fund shareholder; and each Class Y
Acquired Fund shareholder shall receive, at the Effective Time, Class Y
Acquiring Fund Shares with an aggregate net asset value equal to the
aggregate net asset value of the Class Y Acquired Fund Shares owned by
such Acquired Fund shareholder.
A-18
(d) The distribution of Acquiring Fund shares to Acquired Fund
shareholders provided for in paragraph (c) above shall be accomplished by an
instruction, signed by the Corporation's Secretary, to transfer the Acquiring
Fund shares then credited to the Acquired Fund's account on the books of the
Acquiring Fund to open accounts on the share records of the Acquiring Fund in
the names of the Acquired Fund shareholders in amounts representing the
respective PRO RATA number of Acquiring Fund shares due each such shareholder
pursuant to the foregoing provisions. All issued and outstanding shares of the
Acquired Fund shall simultaneously be cancelled on the books of the Acquired
Fund and retired.
(e) From and after the Effective Time, the Acquired Fund shares
cancelled and retired pursuant to paragraph (d) above shall have the status of
authorized and unissued Class W Common Shares of the Corporation, without
designation as to series.
WHEREAS, the Corporation is registered as an open-end management
investment company (I.E., a mutual fund) under the Investment Company Act of
1940 and offers its shares to the public in several series, each of which
represents a separate and distinct portfolio of assets;
WHEREAS, it is desirable and in the best interests of the holders of
the Class FF shares of the Corporation (also known as "Mid Cap Growth Fund")
that the assets belonging to such class, subject to all liabilities of such
class, be sold to a separate portfolio of the Corporation which is known as
"Mid Cap Core Fund" and which is represented by the Corporation's Class SS
shares, in exchange for shares of Mid Cap Core Fund, which shares will be
distributed PRO RATA to the former shareholders of Mid Cap Growth Fund;
WHEREAS, Mid Cap Growth Fund and Mid Cap Core Fund have entered into a
Plan of Reorganization and Termination providing for the foregoing transactions;
and
WHEREAS, the Plan of Reorganization and Termination requires that, in
order to bind all holders of shares of Mid Cap Growth Fund to the foregoing
transactions, and in particular to bind such holders to the cancellation and
retirement of the outstanding Mid Cap Growth Fund shares, it is necessary to
adopt an amendment to the Corporation's Amended and Restated Articles of
Incorporation.
NOW, THEREFORE, BE IT RESOLVED, that the Corporation's Amended and
Restated Articles of Incorporation be, and the same hereby are, amended to add
the following Article IV(M) immediately following Article IV(L) thereof:
ARTICLE IV(M). (a) For the purposes of this Article IV(M), the
following terms shall have the following meanings:
"Acquired Fund" means the Corporation's Mid Cap Growth Fund,
which is represented by the Corporation's Class FF shares.
"Class A Acquired Fund Shares" means the Corporation's Class
FF Common Shares.
"Class B Acquired Fund Shares" means the Corporation's Class
FF, Series 2 Common Shares.
A-19
"Class C Acquired Fund Shares" means the Corporation's Class
FF, Series 4 Common Shares.
"Class S Acquired Fund Shares" means the Corporation's Class
FF, Series 5 Common Fund Shares.
"Class Y Acquired Fund Shares" means the Corporation's Class
FF, Series 3 Common Shares.
"Acquiring Fund" means the Corporation's Mid Cap Core Fund,
which is represented by the Corporation's Class SS shares.
"Class A Acquiring Fund Shares" means the Corporation's Class
SS Common Shares.
"Class B Acquiring Fund Shares" means the Corporation's Class
SS, Series 2 Common Shares.
"Class C Acquiring Fund Shares" means the Corporation's Class
SS, Series 3 Common Shares.
"Class S Acquiring Fund Shares" means the Corporation's Class
SS, Series 5 Common Fund Shares.
"Class Y Acquiring Fund Shares" means the Corporation's Class
SS, Series 4 Common Shares.
"Reorganization Agreement" means that Plan of Reorganization
and Termination dated ___, 2002 between the Acquired Fund and the
Acquiring Fund.
"Effective Time" means the date and time at which delivery of
the assets of the Acquired Fund and the shares of the Acquiring Fund to
be issued pursuant to the Reorganization Agreement, and the liquidation
of the Acquired Fund, occurs.
"Valuation Time" means the close of business on the New York
Stock Exchange, normally 4:00 p.m. Eastern Time, on the business day
immediately prior to the Effective Time.
(b) At the Effective Time, the assets belonging to the Acquired Fund,
the liabilities belonging to the Acquired Fund, and the General Assets and
General Liabilities allocated to the Acquired Fund, shall be sold to and assumed
by the Acquiring Fund in return for Acquiring Fund shares, all pursuant to the
Reorganization Agreement. For purposes of the foregoing, the terms "assets
belonging to," "liabilities belonging to," "General Assets" and "General
Liabilities" have the meanings assigned to them in Article IV, Section 1(d)(i)
and (ii) of the Corporation's Amended and Restated Articles of Incorporation.
(c) The numbers of Class A, Class B, Class C, Class S and Class Y
Acquiring Fund Shares to be received by the Acquired Fund and distributed by it
to the holders of Class A, Class B, Class C, Class S and Class Y Acquired Fund
Shares shall be determined as follows:
A-20
(i) The net asset value per share of the Acquired Fund's and
the Acquiring Fund's Class A Shares, Class B Shares, Class C Shares,
Class S Shares and Class Y Shares shall be computed as of the Valuation
Time using the valuation procedures set forth in the Corporation's
Articles of Incorporation and Bylaws and then-current Prospectus and
Statement of Additional Information and as may be required by the
Investment Company Act of 1940, as amended (the "1940 Act").
(ii) The total number of Class A Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class A Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class A Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class A
Acquiring Fund Shares, each as determined pursuant to (i) above.
(iii) The total number of Class B Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class B Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class B Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class B
Acquiring Fund Shares, each as determined pursuant to (i) above.
(iv) The total number of Class C Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class C Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class C Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class C
Acquiring Fund Shares, each as determined pursuant to (i) above.
(v) The total number of Class S Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class S Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class S Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class S
Acquiring Fund Shares, each as determined pursuant to (i) above.
(vi) The total number of Class Y Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class Y Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class Y Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class Y
Acquiring Fund Shares, each as determined pursuant to (i) above.
A-21
(vii) At the Effective Time, the Acquired Fund shall
distribute to the Acquired Fund shareholders of the respective classes
PRO RATA within such classes (based upon the ratio that the number of
Acquired Fund shares of the respective classes owned by each Acquired
Fund shareholder bears to the total number of issued and outstanding
Acquired Fund shares of the respective classes) the full and fractional
Acquiring Fund shares of the respective classes received by the
Acquired Fund pursuant to (ii) through (vi) above. Accordingly, each
Class A Acquired Fund shareholder shall receive, at the Effective Time,
Class A Acquiring Fund Shares with an aggregate net asset value equal
to the aggregate net asset value of the Class A Acquired Fund Shares
owned by such Acquired Fund shareholder; each Class B Acquired Fund
shareholder shall receive, at the Effective Time, Class B Acquiring
Fund Shares with an aggregate net asset value equal to the aggregate
net asset value of the Class B Acquired Fund Shares owned by such
Acquired Fund shareholder; each Class C Acquired Fund shareholder shall
receive, at the Effective Time, Class C Acquiring Fund Shares with an
aggregate net asset value equal to the aggregate net asset value of the
Class C Acquired Fund Shares owned by such Acquired Fund shareholder;
each Class S Acquired Fund shareholder shall receive, at the Effective
Time, Class S Acquiring Fund Shares with an aggregate net asset value
equal to the aggregate net asset value of the Class S Acquired Fund
Shares owned by such Acquired Fund shareholder; and each Class Y
Acquired Fund shareholder shall receive, at the Effective Time, Class Y
Acquiring Fund Shares with an aggregate net asset value equal to the
aggregate net asset value of the Class Y Acquired Fund Shares owned by
such Acquired Fund shareholder.
(d) The distribution of Acquiring Fund shares to Acquired Fund
shareholders provided for in paragraph (c) above shall be accomplished by an
instruction, signed by the Corporation's Secretary, to transfer the Acquiring
Fund shares then credited to the Acquired Fund's account on the books of the
Acquiring Fund to open accounts on the share records of the Acquiring Fund in
the names of the Acquired Fund shareholders in amounts representing the
respective PRO RATA number of Acquiring Fund shares due each such shareholder
pursuant to the foregoing provisions. All issued and outstanding shares of the
Acquired Fund shall simultaneously be cancelled on the books of the Acquired
Fund and retired.
(e) From and after the Effective Time, the Acquired Fund shares
cancelled and retired pursuant to paragraph (d) above shall have the status of
authorized and unissued Class FF Common Shares of the Corporation, without
designation as to series.
WHEREAS, the Corporation is registered as an open-end management
investment company (I.E., a mutual fund) under the Investment Company Act of
1940 and offers its shares to the public in several series, each of which
represents a separate and distinct portfolio of assets;
WHEREAS, it is desirable and in the best interests of the holders of
the Class O shares of the Corporation (also known as "Small Cap Growth Fund")
that the assets belonging to such class, subject to all liabilities of such
class, be sold to a separate portfolio of the Corporation which is known as
"Small Cap Core Fund" and which is represented by the Corporation's Class UU
shares, in exchange for shares of Small Cap Core Fund, which shares will be
distributed PRO RATA to the former shareholders of Small Cap Growth Fund;
WHEREAS, Small Cap Growth Fund and Small Cap Core Fund have entered
into Plan of Reorganization and Termination providing for the foregoing
transactions; and
A-22
WHEREAS, the Plan of Reorganization requires that, in order to bind all
holders of shares of Small Cap Growth Fund to the foregoing transactions, and in
particular to bind such holders to the cancellation and retirement of the
outstanding Small Cap Growth Fund shares, it is necessary to adopt an amendment
to the Corporation's Amended and Restated Articles of Incorporation.
NOW, THEREFORE, BE IT RESOLVED, that the Corporation's Amended and
Restated Articles of Incorporation be, and the same hereby are, amended to add
the following Article IV(N) immediately following Article IV(M) thereof:
ARTICLE IV(N). (a) For the purposes of this Article IV(N), the
following terms shall have the following meanings:
"Acquired Fund" means the Corporation's Small Cap Growth Fund,
which is represented by the Corporation's Class O shares.
"Class A Acquired Fund Shares" means the Corporation's Class O
Common Shares.
"Class B Acquired Fund Shares" means the Corporation's Class
O, Series 3 Common Shares.
"Class C Acquired Fund Shares" means the Corporation's Class
O, Series 4 Common Shares.
"Class S Acquired Fund Shares" means the Corporation's Class
O, Series 5 Common Fund Shares.
"Class Y Acquired Fund Shares" means the Corporation's Class
O, Series 2 Common Shares.
"Acquiring Fund" means the Small Cap Core Fund, which is
represented by the Corporation's Class UU shares.
"Class A Acquiring Fund Shares" means the Corporation's Class
UU Common Shares.
"Class B Acquiring Fund Shares" means the Corporation's Class
UU, Series 2 Common Shares.
"Class C Acquiring Fund Shares" means the Corporation's Class
UU, Series 3 Common Shares.
"Class S Acquiring Fund Shares" means the Corporation's Class
UU, Series 5 Common Fund Shares.
"Class Y Acquiring Fund Shares" means the Corporation's Class
UU, Series 4 Common Shares.
A-23
"Reorganization Agreement" means that Plan of Reorganization
and Termination dated ___, 2002 between the Acquired Fund and the
Acquiring Fund.
"Effective Time" means the date and time at which delivery of
the assets of the Acquired Fund and the shares of the Acquiring Fund to
be issued pursuant to the Reorganization Agreement, and the liquidation
of the Acquired Fund, occurs.
"Valuation Time" means the close of business on the New York
Stock Exchange, normally 4:00 p.m. Eastern Time, on the business day
immediately prior to the Effective Time.
(b) At the Effective Time, the assets belonging to the Acquired Fund,
the liabilities belonging to the Acquired Fund, and the General Assets and
General Liabilities allocated to the Acquired Fund, shall be sold to and assumed
by the Acquiring Fund in return for Acquiring Fund shares, all pursuant to the
Reorganization Agreement. For purposes of the foregoing, the terms "assets
belonging to," "liabilities belonging to," "General Assets" and "General
Liabilities" have the meanings assigned to them in Article IV, Section 1(d)(i)
and (ii) of the Corporation's Amended and Restated Articles of Incorporation.
(c) The numbers of Class A, Class B, Class C, Class S and Class Y
Acquiring Fund Shares to be received by the Acquired Fund and distributed by it
to the holders of Class A, Class B, Class C, Class S and Class Y Acquired Fund
Shares shall be determined as follows:
(i) The net asset value per share of the Acquired Fund's and
the Acquiring Fund's Class A Shares, Class B Shares, Class C Shares,
Class S Shares and Class Y Shares shall be computed as of the Valuation
Time using the valuation procedures set forth in the Corporation's
Articles of Incorporation and Bylaws and then-current Prospectus and
Statement of Additional Information and as may be required by the
Investment Company Act of 1940, as amended (the "1940 Act").
(ii) The total number of Class A Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class A Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class A Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class A
Acquiring Fund Shares, each as determined pursuant to (i) above.
(iii) The total number of Class B Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class B Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class B Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class B
Acquiring Fund Shares, each as determined pursuant to (i) above.
(iv) The total number of Class C Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired
A-24
Fund shall be determined as of the Effective Time by multiplying the
number of Class C Acquired Fund Shares outstanding times a fraction,
the numerator of which is the net asset value per share of Class C
Acquired Fund Shares, and the denominator of which is the net asset
value per share of the Class C Acquiring Fund Shares, each as
determined pursuant to (i) above.
(v) The total number of Class S Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class S Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class S Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class S
Acquiring Fund Shares, each as determined pursuant to (i) above.
(vi) The total number of Class Y Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class Y Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class Y Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class Y
Acquiring Fund Shares, each as determined pursuant to (i) above.
(vii) At the Effective Time, the Acquired Fund shall
distribute to the Acquired Fund shareholders of the respective classes
PRO RATA within such classes (based upon the ratio that the number of
Acquired Fund shares of the respective classes owned by each Acquired
Fund shareholder bears to the total number of issued and outstanding
Acquired Fund shares of the respective classes) the full and fractional
Acquiring Fund shares of the respective classes received by the
Acquired Fund pursuant to (ii) through (vi) above. Accordingly, each
Class A Acquired Fund shareholder shall receive, at the Effective Time,
Class A Acquiring Fund Shares with an aggregate net asset value equal
to the aggregate net asset value of the Class A Acquired Fund Shares
owned by such Acquired Fund shareholder; each Class B Acquired Fund
shareholder shall receive, at the Effective Time, Class B Acquiring
Fund Shares with an aggregate net asset value equal to the aggregate
net asset value of the Class B Acquired Fund Shares owned by such
Acquired Fund shareholder; each Class C Acquired Fund shareholder shall
receive, at the Effective Time, Class C Acquiring Fund Shares with an
aggregate net asset value equal to the aggregate net asset value of the
Class C Acquired Fund Shares owned by such Acquired Fund shareholder;
each Class S Acquired Fund shareholder shall receive, at the Effective
Time, Class S Acquiring Fund Shares with an aggregate net asset value
equal to the aggregate net asset value of the Class S Acquired Fund
Shares owned by such Acquired Fund shareholder; and each Class Y
Acquired Fund shareholder shall receive, at the Effective Time, Class Y
Acquiring Fund Shares with an aggregate net asset value equal to the
aggregate net asset value of the Class Y Acquired Fund Shares owned by
such Acquired Fund shareholder.
(d) The distribution of Acquiring Fund shares to Acquired Fund
shareholders provided for in paragraph (c) above shall be accomplished by an
instruction, signed by the Corporation's Secretary, to transfer the Acquiring
Fund shares then credited to the Acquired Fund's account on the books of the
Acquiring Fund to open accounts on the share records of the Acquiring Fund in
A-25
the names of the Acquired Fund shareholders in amounts representing the
respective PRO RATA number of Acquiring Fund shares due each such shareholder
pursuant to the foregoing provisions. All issued and outstanding shares of the
Acquired Fund shall simultaneously be cancelled on the books of the Acquired
Fund and retired.
(e) From and after the Effective Time, the Acquired Fund shares
cancelled and retired pursuant to paragraph (d) above shall have the status of
authorized and unissued Class O Common Shares of the Corporation, without
designation as to series.
WHEREAS, the Corporation is registered as an open-end management
investment company (I.E., a mutual fund) under the Investment Company Act of
1940 and offers its shares to the public in several series, each of which
represents a separate and distinct portfolio of assets;
WHEREAS, it is desirable and in the best interests of the holders of
the Class GG shares of the Corporation (also known as "Emerging Markets Fund")
that the assets belonging to such class, subject to all liabilities of such
class, be sold to a separate portfolio of the Corporation which is known as
"International Fund" and which is represented by the Corporation's Class Q
shares, in exchange for shares of International Fund, which shares will be
distributed PRO RATA to the former shareholders of Emerging Markets Fund;
WHEREAS, Emerging Markets Fund and International Fund have entered into
a Plan of Reorganization and Termination providing for the foregoing
transactions; and
WHEREAS, the Plan of Reorganization requires that, in order to bind all
holders of shares of Small Cap Growth Fund to the foregoing transactions, and in
particular to bind such holders to the cancellation and retirement of the
outstanding Emerging Markets Fund shares, it is necessary to adopt an amendment
to the Corporation's Amended and Restated Articles of Incorporation.
NOW, THEREFORE, BE IT RESOLVED, that the Corporation's Amended and
Restated Articles of Incorporation be, and the same hereby are, amended to add
the following Article IV(O) immediately following Article IV(N) thereof:
ARTICLE IV(O). (a) For the purposes of this Article IV(O), the
following terms shall have the following meanings:
"Acquired Fund" means the Corporation's Emerging Markets Fund,
which is represented by the Corporation's Class GG shares.
"Class A Acquired Fund Shares" means the Corporation's Class
GG Common Shares.
"Class B Acquired Fund Shares" means the Corporation's Class
GG, Series 2 Common Shares.
"Class C Acquired Fund Shares" means the Corporation's Class
GG, Series 4 Common Shares.
A-26
"Class S Acquired Fund Shares" means the Corporation's Class
GG, Series 5 Common Fund Shares.
"Class Y Acquired Fund Shares" means the Corporation's Class
GG, Series 3 Common Shares.
"Acquiring Fund" means the International Fund, which is
represented by the Corporation's Class Q shares.
"Class A Acquiring Fund Shares" means the Corporation's Class
Q Common Shares.
"Class B Acquiring Fund Shares" means the Corporation's Class
Q, Series 3 Common Shares.
"Class C Acquiring Fund Shares" means the Corporation's Class
Q, Series 4 Common Shares.
"Class S Acquiring Fund Shares" means the Corporation's Class
Q, Series 5 Common Fund Shares.
"Class Y Acquiring Fund Shares" means the Corporation's Class
Q, Series 2 Common Shares.
"Reorganization Agreement" means that Plan of Reorganization
and Termination dated ___, 2002 between the Acquired Fund and the
Acquiring Fund.
"Effective Time" means the date and time at which delivery of
the assets of the Acquired Fund and the shares of the Acquiring Fund to
be issued pursuant to the Reorganization Agreement, and the liquidation
of the Acquired Fund, occurs.
"Valuation Time" means the close of business on the New York
Stock Exchange, normally 4:00 p.m. Eastern Time, on the business day
immediately prior to the Effective Time.
(b) At the Effective Time, the assets belonging to the Acquired Fund,
the liabilities belonging to the Acquired Fund, and the General Assets and
General Liabilities allocated to the Acquired Fund, shall be sold to and assumed
by the Acquiring Fund in return for Acquiring Fund shares, all pursuant to the
Reorganization Agreement. For purposes of the foregoing, the terms "assets
belonging to," "liabilities belonging to," "General Assets" and "General
Liabilities" have the meanings assigned to them in Article IV, Section 1(d)(i)
and (ii) of the Corporation's Amended and Restated Articles of Incorporation.
(c) The numbers of Class A, Class B, Class C, Class S and Class Y
Acquiring Fund Shares to be received by the Acquired Fund and distributed by it
to the holders of Class A, Class B, Class C, Class S and Class Y Acquired Fund
Shares shall be determined as follows:
(i) The net asset value per share of the Acquired Fund's and
the Acquiring Fund's Class A Shares, Class B Shares, Class C Shares,
Class S Shares and Class Y
A-27
Shares shall be computed as of the Valuation Time using the valuation
procedures set forth in the Corporation's Articles of Incorporation and
Bylaws and then-current Prospectus and Statement of Additional
Information and as may be required by the Investment Company Act of
1940, as amended (the "1940 Act").
(ii) The total number of Class A Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class A Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class A Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class A
Acquiring Fund Shares, each as determined pursuant to (i) above.
(iii) The total number of Class B Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class B Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class B Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class B
Acquiring Fund Shares, each as determined pursuant to (i) above.
(iv) The total number of Class C Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class C Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class C Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class C
Acquiring Fund Shares, each as determined pursuant to (i) above.
(v) The total number of Class S Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class S Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class S Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class S
Acquiring Fund Shares, each as determined pursuant to (i) above.
(vi) The total number of Class Y Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class Y Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class Y Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class Y
Acquiring Fund Shares, each as determined pursuant to (i) above.
(vii) At the Effective Time, the Acquired Fund shall
distribute to the Acquired Fund shareholders of the respective classes
PRO RATA within such classes (based upon the ratio that the number of
Acquired Fund shares of the respective classes owned by each Acquired
Fund shareholder bears to the total number of issued and outstanding
Acquired
A-28
Fund shares of the respective classes) the full and fractional
Acquiring Fund shares of the respective classes received by the
Acquired Fund pursuant to (ii) through (vi) above. Accordingly, each
Class A Acquired Fund shareholder shall receive, at the Effective Time,
Class A Acquiring Fund Shares with an aggregate net asset value equal
to the aggregate net asset value of the Class A Acquired Fund Shares
owned by such Acquired Fund shareholder; each Class B Acquired Fund
shareholder shall receive, at the Effective Time, Class B Acquiring
Fund Shares with an aggregate net asset value equal to the aggregate
net asset value of the Class B Acquired Fund Shares owned by such
Acquired Fund shareholder; each Class C Acquired Fund shareholder shall
receive, at the Effective Time, Class C Acquiring Fund Shares with an
aggregate net asset value equal to the aggregate net asset value of the
Class C Acquired Fund Shares owned by such Acquired Fund shareholder;
each Class S Acquired Fund shareholder shall receive, at the Effective
Time, Class S Acquiring Fund Shares with an aggregate net asset value
equal to the aggregate net asset value of the Class S Acquired Fund
Shares owned by such Acquired Fund shareholder; and each Class Y
Acquired Fund shareholder shall receive, at the Effective Time, Class Y
Acquiring Fund Shares with an aggregate net asset value equal to the
aggregate net asset value of the Class Y Acquired Fund Shares owned by
such Acquired Fund shareholder.
(d) The distribution of Acquiring Fund shares to Acquired Fund
shareholders provided for in paragraph (c) above shall be accomplished by an
instruction, signed by the Corporation's Secretary, to transfer the Acquiring
Fund shares then credited to the Acquired Fund's account on the books of the
Acquiring Fund to open accounts on the share records of the Acquiring Fund in
the names of the Acquired Fund shareholders in amounts representing the
respective PRO RATA number of Acquiring Fund shares due each such shareholder
pursuant to the foregoing provisions. All issued and outstanding shares of the
Acquired Fund shall simultaneously be cancelled on the books of the Acquired
Fund and retired.
(e) From and after the Effective Time, the Acquired Fund shares
cancelled and retired pursuant to paragraph (d) above shall have the status of
authorized and unissued Class GG Common Shares of the Corporation, without
designation as to series.
WHEREAS, the Corporation is registered as an open-end management
investment company (I.E., a mutual fund) under the Investment Company Act of
1940 and offers its shares to the public in several series, each of which
represents a separate and distinct portfolio of assets;
WHEREAS, it is desirable and in the best interests of the holders of
the Class YY shares of the Corporation (also known as "Bond IMMDEX Fund") that
the assets belonging to such class, subject to all liabilities of such class, be
sold to a separate portfolio of the Corporation which is known as "Fixed Income
Fund" and which is represented by the Corporation's Class B shares, in exchange
for shares of Fixed Income Fund, which shares will be distributed PRO RATA to
the former shareholders of Bond IMMDEX Fund;
WHEREAS, Bond IMMDEX and Fixed Income Fund have entered into Plan of
Reorganization and Termination providing for the foregoing transactions; and
WHEREAS, the Plan of Reorganization requires that, in order to bind all
holders of shares of Bond IMMDEX Fund to the foregoing transactions, and in
particular to bind such holders to the cancellation and retirement of the
outstanding Bond IMMDEX shares, it is
A-29
necessary to adopt an amendment to the Corporation's Amended and Restated
Articles of Incorporation.
NOW, THEREFORE, BE IT RESOLVED, that the Corporation's Amended and
Restated Articles of Incorporation be, and the same hereby are, amended to add
the following Article IV(P) immediately following Article IV(O) thereof:
ARTICLE IV(P). (a) For the purposes of this Article IV(P), the
following terms shall have the following meanings:
"Acquired Fund" means the Corporation's Bond IMMDEX Fund,
which is represented by the Corporation's Class YY shares.
"Class A Acquired Fund Shares" means the Corporation's Class
YY Common Shares.
"Class B Acquired Fund Shares" means the Corporation's Class
YY, Series 2 Common Shares.
"Class C Acquired Fund Shares" means the Corporation's Class
YY, Series 3 Common Shares.
"Class S Acquired Fund Shares" means the Corporation's Class
YY, Series 5 Common Fund Shares.
"Class Y Acquired Fund Shares" means the Corporation's Class
YY, Series 4 Common Shares.
"Acquiring Fund" means the Fixed Income Fund, which is
represented by the Corporation's Class B shares.
"Class A Acquiring Fund Shares" means the Corporation's Class
B Common Shares.
"Class B Acquiring Fund Shares" means the Corporation's Class
B, Series 3 Common Shares.
"Class C Acquiring Fund Shares" means the Corporation's Class
B, Series 4 Common Shares.
"Class S Acquiring Fund Shares" means the Corporation's Class
B, Series 5 Common Fund Shares.
"Class Y Acquiring Fund Shares" means the Corporation's Class
B, Series 2 Common Shares.
"Reorganization Agreement" means that Plan of Reorganization
and Termination dated ___, 2002 between the Acquired Fund and the
Acquiring Fund.
A-30
"Effective Time" means the date and time at which delivery of
the assets of the Acquired Fund and the shares of the Acquiring Fund to
be issued pursuant to the Reorganization Agreement, and the liquidation
of the Acquired Fund, occurs.
"Valuation Time" means the close of business on the New York
Stock Exchange, normally 4:00 p.m. Eastern Time, on the business day
immediately prior to the Effective Time.
(b) At the Effective Time, the assets belonging to the Acquired Fund,
the liabilities belonging to the Acquired Fund, and the General Assets and
General Liabilities allocated to the Acquired Fund, shall be sold to and assumed
by the Acquiring Fund in return for Acquiring Fund shares, all pursuant to the
Reorganization Agreement. For purposes of the foregoing, the terms "assets
belonging to," "liabilities belonging to," "General Assets" and "General
Liabilities" have the meanings assigned to them in Article IV, Section 1(d)(i)
and (ii) of the Corporation's Amended and Restated Articles of Incorporation.
(c) The numbers of Class A, Class B, Class C, Class S and Class Y
Acquiring Fund Shares to be received by the Acquired Fund and distributed by it
to the holders of Class A, Class B, Class C, Class S and Class Y Acquired Fund
Shares shall be determined as follows:
(i) The net asset value per share of the Acquired Fund's and
the Acquiring Fund's Class A Shares, Class B Shares, Class C Shares,
Class S Shares and Class Y Shares shall be computed as of the Valuation
Time using the valuation procedures set forth in the Corporation's
Articles of Incorporation and Bylaws and then-current Prospectus and
Statement of Additional Information and as may be required by the
Investment Company Act of 1940, as amended (the "1940 Act").
(ii) The total number of Class A Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class A Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class A Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class A
Acquiring Fund Shares, each as determined pursuant to (i) above.
(iii) The total number of Class B Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class B Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class B Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class B
Acquiring Fund Shares, each as determined pursuant to (i) above.
(iv) The total number of Class C Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class C Acquired Fund
Shares outstanding times a fraction, the numerator of which is
A-31
the net asset value per share of Class C Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class C
Acquiring Fund Shares, each as determined pursuant to (i) above.
(v) The total number of Class S Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class S Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class S Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class S
Acquiring Fund Shares, each as determined pursuant to (i) above.
(vi) The total number of Class Y Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class Y Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class Y Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class Y
Acquiring Fund Shares, each as determined pursuant to (i) above.
(vii) At the Effective Time, the Acquired Fund shall
distribute to the Acquired Fund shareholders of the respective classes
PRO RATA within such classes (based upon the ratio that the number of
Acquired Fund shares of the respective classes owned by each Acquired
Fund shareholder bears to the total number of issued and outstanding
Acquired Fund shares of the respective classes) the full and fractional
Acquiring Fund shares of the respective classes received by the
Acquired Fund pursuant to (ii) through (vi) above. Accordingly, each
Class A Acquired Fund shareholder shall receive, at the Effective Time,
Class A Acquiring Fund Shares with an aggregate net asset value equal
to the aggregate net asset value of the Class A Acquired Fund Shares
owned by such Acquired Fund shareholder; each Class B Acquired Fund
shareholder shall receive, at the Effective Time, Class B Acquiring
Fund Shares with an aggregate net asset value equal to the aggregate
net asset value of the Class B Acquired Fund Shares owned by such
Acquired Fund shareholder; each Class C Acquired Fund shareholder shall
receive, at the Effective Time, Class C Acquiring Fund Shares with an
aggregate net asset value equal to the aggregate net asset value of the
Class C Acquired Fund Shares owned by such Acquired Fund shareholder;
each Class S Acquired Fund shareholder shall receive, at the Effective
Time, Class S Acquiring Fund Shares with an aggregate net asset value
equal to the aggregate net asset value of the Class S Acquired Fund
Shares owned by such Acquired Fund shareholder; and each Class Y
Acquired Fund shareholder shall receive, at the Effective Time, Class Y
Acquiring Fund Shares with an aggregate net asset value equal to the
aggregate net asset value of the Class Y Acquired Fund Shares owned by
such Acquired Fund shareholder.
(d) The distribution of Acquiring Fund shares to Acquired Fund
shareholders provided for in paragraph (c) above shall be accomplished by an
instruction, signed by the Corporation's Secretary, to transfer the Acquiring
Fund shares then credited to the Acquired Fund's account on the books of the
Acquiring Fund to open accounts on the share records of the Acquiring Fund in
the names of the Acquired Fund shareholders in amounts representing the
respective PRO RATA number of Acquiring Fund shares due each such shareholder
pursuant to the foregoing
A-32
provisions. All issued and outstanding shares of the Acquired Fund shall
simultaneously be cancelled on the books of the Acquired Fund and retired.
(e) From and after the Effective Time, the Acquired Fund shares
cancelled and retired pursuant to paragraph (d) above shall have the status of
authorized and unissued Class YY Common Shares of the Corporation, without
designation as to series.
WHEREAS, the Corporation is registered as an open-end management
investment company (I.E., a mutual fund) under the Investment Company Act of
1940 and offers its shares to the public in several series, each of which
represents a separate and distinct portfolio of assets;
WHEREAS, it is desirable and in the best interests of the holders of
the Class NN shares of the Corporation (also known as "High Yield Bond Fund")
that the assets belonging to such class, subject to all liabilities of such
class, be sold to a separate portfolio of the Corporation which is known as
"Strategic Income Fund" and which is represented by the Corporation's Class HH
shares, in exchange for shares of Strategic Income Fund, which shares will be
distributed PRO RATA to the former shareholders of High Yield Bond Fund;
WHEREAS, High Yield Bond Fund and Strategic Income Fund have entered
into Plan of Reorganization and Termination providing for the foregoing
transactions; and
WHEREAS, the Plan of Reorganization requires that, in order to bind all
holders of shares of High Yield Bond Fund to the foregoing transactions, and in
particular to bind such holders to the cancellation and retirement of the
outstanding High Yield Bond Fund shares, it is necessary to adopt an amendment
to the Corporation's Amended and Restated Articles of Incorporation.
NOW, THEREFORE, BE IT RESOLVED, that the Corporation's Amended and
Restated Articles of Incorporation be, and the same hereby are, amended to add
the following Article IV(Q) immediately following Article IV(P) thereof:
ARTICLE IV(Q). (a) For the purposes of this Article IV(Q), the
following terms shall have the following meanings:
"Acquired Fund" means the Corporation's High Yield Fund, which
is represented by the Corporation's Class NN shares.
"Class A Acquired Fund Shares" means the Corporation's Class
NN Common Shares.
"Class B Acquired Fund Shares" means the Corporation's Class
NN, Series 2 Common Shares.
"Class C Acquired Fund Shares" means the Corporation's Class
NN, Series 3 Common Shares.
"Class S Acquired Fund Shares" means the Corporation's Class
NN, Series 5 Common Fund Shares.
A-33
"Class Y Acquired Fund Shares" means the Corporation's Class
NN, Series 4 Common Shares.
"Acquiring Fund" means Strategic Income Fund, which is
represented by the Corporation's Class HH shares.
"Class A Acquiring Fund Shares" means the Corporation's Class
HH Common Shares.
"Class B Acquiring Fund Shares" means the Corporation's Class
HH, Series 2 Common Shares.
"Class C Acquiring Fund Shares" means the Corporation's Class
HH, Series 4 Common Shares.
"Class S Acquiring Fund Shares" means the Corporation's Class
HH, Series 5 Common Fund Shares.
"Class Y Acquiring Fund Shares" means the Corporation's Class
HH, Series 3 Common Shares.
"Reorganization Agreement" means that Plan of Reorganization
and Termination dated ___, 2002 between the Acquired Fund and the
Acquiring Fund.
"Effective Time" means the date and time at which delivery of
the assets of the Acquired Fund and the shares of the Acquiring Fund to
be issued pursuant to the Reorganization Agreement, and the liquidation
of the Acquired Fund, occurs.
"Valuation Time" means the close of business on the New York
Stock Exchange, normally 4:00 p.m. Eastern Time, on the business day
immediately prior to the Effective Time.
(b) At the Effective Time, the assets belonging to the Acquired Fund,
the liabilities belonging to the Acquired Fund, and the General Assets and
General Liabilities allocated to the Acquired Fund, shall be sold to and assumed
by the Acquiring Fund in return for Acquiring Fund shares, all pursuant to the
Reorganization Agreement. For purposes of the foregoing, the terms "assets
belonging to," "liabilities belonging to," "General Assets" and "General
Liabilities" have the meanings assigned to them in Article IV, Section 1(d)(i)
and (ii) of the Corporation's Amended and Restated Articles of Incorporation.
(c) The numbers of Class A, Class B, Class C, Class S and Class Y
Acquiring Fund Shares to be received by the Acquired Fund and distributed by it
to the holders of Class A, Class B, Class C, Class S and Class Y Acquired Fund
Shares shall be determined as follows:
(i) The net asset value per share of the Acquired Fund's and
the Acquiring Fund's Class A Shares, Class B Shares, Class C Shares,
Class S Shares and Class Y Shares shall be computed as of the Valuation
Time using the valuation procedures set forth in the Corporation's
Articles of Incorporation and Bylaws and then-current
A-34
Prospectus and Statement of Additional Information and as may be
required by the Investment Company Act of 1940, as amended (the "1940
Act").
(ii) The total number of Class A Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class A Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class A Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class A
Acquiring Fund Shares, each as determined pursuant to (i) above.
(iii) The total number of Class B Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class B Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class B Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class B
Acquiring Fund Shares, each as determined pursuant to (i) above.
(iv) The total number of Class C Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class C Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class C Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class C
Acquiring Fund Shares, each as determined pursuant to (i) above.
(v) The total number of Class S Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class S Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class S Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class S
Acquiring Fund Shares, each as determined pursuant to (i) above.
(vi) The total number of Class Y Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class Y Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class Y Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class Y
Acquiring Fund Shares, each as determined pursuant to (i) above.
(vii) At the Effective Time, the Acquired Fund shall
distribute to the Acquired Fund shareholders of the respective classes
PRO RATA within such classes (based upon the ratio that the number of
Acquired Fund shares of the respective classes owned by each Acquired
Fund shareholder bears to the total number of issued and outstanding
Acquired Fund shares of the respective classes) the full and fractional
Acquiring Fund shares of the respective classes received by the
Acquired Fund pursuant to (ii) through (vi) above.
A-35
Accordingly, each Class A Acquired Fund shareholder shall receive, at
the Effective Time, Class A Acquiring Fund Shares with an aggregate net
asset value equal to the aggregate net asset value of the Class A
Acquired Fund Shares owned by such Acquired Fund shareholder; each
Class B Acquired Fund shareholder shall receive, at the Effective Time,
Class B Acquiring Fund Shares with an aggregate net asset value equal
to the aggregate net asset value of the Class B Acquired Fund Shares
owned by such Acquired Fund shareholder; each Class C Acquired Fund
shareholder shall receive, at the Effective Time, Class C Acquiring
Fund Shares with an aggregate net asset value equal to the aggregate
net asset value of the Class C Acquired Fund Shares owned by such
Acquired Fund shareholder; each Class S Acquired Fund shareholder shall
receive, at the Effective Time, Class S Acquiring Fund Shares with an
aggregate net asset value equal to the aggregate net asset value of the
Class S Acquired Fund Shares owned by such Acquired Fund shareholder;
and each Class Y Acquired Fund shareholder shall receive, at the
Effective Time, Class Y Acquiring Fund Shares with an aggregate net
asset value equal to the aggregate net asset value of the Class Y
Acquired Fund Shares owned by such Acquired Fund shareholder.
(d) The distribution of Acquiring Fund shares to Acquired Fund
shareholders provided for in paragraph (c) above shall be accomplished by an
instruction, signed by the Corporation's Secretary, to transfer the Acquiring
Fund shares then credited to the Acquired Fund's account on the books of the
Acquiring Fund to open accounts on the share records of the Acquiring Fund in
the names of the Acquired Fund shareholders in amounts representing the
respective PRO RATA number of Acquiring Fund shares due each such shareholder
pursuant to the foregoing provisions. All issued and outstanding shares of the
Acquired Fund shall simultaneously be cancelled on the books of the Acquired
Fund and retired.
(e) From and after the Effective Time, the Acquired Fund shares
cancelled and retired pursuant to paragraph (d) above shall have the status of
authorized and unissued Class NN Common Shares of the Corporation, without
designation as to series.
The undersigned officer of the Corporation hereby acknowledges, in the
name and on behalf of the Corporation, the foregoing Articles of Amendment to be
the corporate act of the Corporation and further certifies that, to the best of
his or her knowledge, information and belief, the matters and facts set forth
therein with respect to the approval thereof are true in all material respects,
under the penalties of perjury.
A-36
IN WITNESS WHEREOF, the Corporation has caused these Articles of
Amendment to be signed in its name and on its behalf by its President or a Vice
President and witnessed by its Secretary or an Assistant Secretary on
______________, 2002.
FIRST AMERICAN INVESTMENT FUNDS, INC.
By ______________________________
Its _____________________________
WITNESS:
________________________________________________
Secretary, First American Investment Funds, Inc.
A-37
APPENDIX B
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
(EXCERPTED FROM THE FUNDS' ANNUAL REPORTS FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 2002)
LARGE CAP GROWTH
Investment Objective: LONG-TERM GROWTH OF CAPITAL
In a challenging environment for growth-oriented stocks, the First American
Large Cap Growth Fund (the "Fund") Class Y shares declined 26.87% for the fiscal
year ended September 30, 2002 (Class A shares declined 27.08% on net asset
value). Similarly, the Fund's benchmark, the Russell 1000 Growth Index, declined
22.51% over the same timeframe*.
The period began in October 2001 shortly after the terrorist attacks of
September 11. In the initial months, the Federal Reserve continued to reduce
interest rates in order to boost prospects for the U.S. economy. Investors
anticipated an economic recovery and improved corporate earnings. As a result,
growth stocks enjoyed a solid rebound, which lasted through the end of 2001.
Early in the new year, the environment began to change. Investors received
troubling news of accounting problems involving a number of major companies,
including Enron and Global Crossing. Later in the year, more companies were
caught up in the scandals, including Worldcom. The onslaught of bad news took a
toll on investor confidence and, at the same time, the economy, while moving in
a positive direction, proved to be disappointing to the markets. Once again,
growth stocks bore the brunt of the damage, and declined for much of the rest of
the Fund's fiscal year.
Every key industry segment in the broad market moved lower over the fiscal year.
However, the Fund's holdings in basic materials stocks, Ecolab, energy issues
such as Apache Corporation, and retail issues such as Kohl's held up better than
most. Among the weakest performing stocks were utilities issues such as Enron
and Mirant, and technology issues such as Texas Instruments and EDS. Throughout
the year, the Fund's technology position was reduced as this area of the market
continued to face severe challenges.
It seems clear that prospects for growth stocks aren't likely to dramatically
improve until the U.S. economy shows more consistent growth. Given the number of
uncertainties in the market, ranging from corporate accounting issues to growing
global tensions, a fair amount of volatility is likely to remain in the near
term. At current valuations, investors may find large-cap growth issues
attractive, which could create some positive opportunities for the Fund in the
year ahead. Efforts will continue to be made to actively position the portfolio
to take advantage of opportunities that may arise.
ANNUALIZED PERFORMANCE(1)
AS OF SEPTEMBER 30, 2002
<Table>
<Caption>
SINCE INCEPTION(4)
-----------------------------------------------------------
1 YEAR 5 YEARS 12/11/1994 8/18/1997 3/31/2000 12/11/2000 9/24/2001
- --------------------------------------------------------------------------------------------------------------
Class A NAV -27.08% -- -- -- -30.00% -- --
Class A POP -31.09% -- -- -- -31.57% -- --
Class B NAV -27.64% -7.13% 4.35% -- -- -- --
Class B POP -31.26% -7.47% 4.35% -- -- -- --
Class C NAV -27.48% -- -- -- -- -- -25.32%
Class C POP -28.99% -- -- -- -- -- -26.79%
Class S -27.08% -- -- -- -- -36.09% --
Class Y -26.87% -6.63% -- -5.71% -- -- --
Russell 1000 Growth Index(3) -22.51% -4.87% 7.01% -3.89% -31.52% -30.04% -22.51%
</Table>
* Unlike mutual funds, index returns do not reflect any expenses, transaction
costs, or cash flow effects.
B-2
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2002
[CHART]
CLASS B
FIRST AMERICAN LARGE FIRST AMERICAN LARGE
CAP GROWTH FUND, CAP GROWTH FUND, RUSSELL 1000
CLASS B NAV CLASS B POP GROWTH INDEX(3)
- --------------------------------------------------------------------------------
12/1992 $ 10,000 $ 10,000 $ 10,000
11/1995 $ 12,949 $ 12,949 $ 13,639
11/1996 $ 16,487 $ 16,487 $ 17,227
11/1997 $ 20,215 $ 20,215 $ 21,795
11/1998 $ 24,426 $ 24,426 $ 28,041
11/1999 $ 30,583 $ 30,583 $ 36,871
10/2000 $ 33,185 $ 33,185 $ 38,247
9/2001 $ 19,259 $ 19,259 $ 21,824
9/2002 $ 13,936 $ 13,936 $ 16,912
[CHART]
CLASS Y
FIRST AMERICAN LARGE
CAP GROWTH FUND,
CLASS Y RUSSELL 1000 GROWTH INDEX(3)
- --------------------------------------------------------------
8/1997 $ 10,000 $ 10,000
11/1997 $ 10,462 $ 10,533
11/1998 $ 12,649 $ 13,552
11/1999 $ 15,891 $ 17,820
10/2000 $ 17,293 $ 18,485
9/2001 $ 10,122 $ 10,548
9/2002 $ 7,403 $ 8,174
(1) Past performance does not guarantee future results and does not reflect the
deduction of taxes that a shareholder would pay on fund distributions or
redemption of fund shares. The principal value of an investment and
investment return will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
reflects voluntary fee waivers in effect. In the absence of such fee
waivers, total returns would be reduced. Index is for illustrative purposes
only and is not available for investment.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the Fund's maximum sales charge and
assumes reinvestment of all distributions at NAV.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A
shares, 1% for Class C shares, and the maximum contingent deferred sales
charge ("CDSC") for Class B and Class C shares for the relevant period.
Maximum CDSC for Class B shares is 5.00% and 1.00% for Class C shares.
Total returns assume reinvestment of all distributions at NAV.
On May 17, 2002, Capital Growth Fund merged into Large Cap Growth Fund,
each a series of First American Investment Funds, Inc. Performance
presented prior to May 17, 2002 represents that of Capital Growth Fund. On
September 24, 2001, Capital Growth Fund became the successor by merger to
Firstar Large Cap Growth Fund, a series of Firstar Funds, Inc. Prior to the
merger, the First American Fund had no assets or liabilities. Performance
presented prior to September 24, 2001 represents that of the Firstar Large
Cap Growth Fund. The Firstar Large Cap Growth Fund was organized on
December 11, 2000 and, prior to that, was a separate series of Firstar
Stellar Funds, inc. Performance presented prior to December 11, 2000
represents that of the Firstar Stellar Growth Equity Fund.
(2) Performance for Class A, Class C, and Class S shares is not presented.
Performance for Class A and Class S is higher due to lower expenses.
Performance for Class C is substantially similar to Class B due to similar
expenses.
(3) An unmanaged index that measures the performance of those Russell 1000
companies with higher price-to-book ratios and higher forecasted growth
values. Russell 1000 companies include the 1,000 largest companies in the
Russell 3000 Index, which represents approximately 92% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index measures
the performance of the 3,000 largest U.S. companies based on total market
capitalization, which represents approximately 98% of the investable U.S.
equity market.
(4) The performance since inception for the index is calculated from the month
end following the inception of the class.
B-3
HEALTH SCIENCES
Investment Objective: LONG-TERM GROWTH OF CAPITAL
Last year, the stock market faced many challenges, and health care stocks were
not immune to the maladies of the general market. The First American Health
Sciences Fund (the "Fund") Class Y shares lost 19.44% (Class A shares declined
19.61% on net asset value) for the fiscal year. The Fund's benchmark, the S&P
Health Care Composite Index, was down 22.38% for the same period*.
While health care stocks typically offer stability and protection in a volatile
market due to their low correlation with the economy, the sector as a whole was
not able to escape the market's challenges in the past year. Issues that
affected the broader market, including economic sluggishness and global
uncertainties, also played a role in the decline of health care stocks. Notably,
pharmaceutical stocks, which make up a majority of the sector on a market
capitalization-weighted basis, declined significantly during the period. Many of
the larger pharmaceutical companies are dealing with significant fundamental
issues (patent risk, inventory management and regulatory compliance) that have
hurt their ability to generate acceptable profit growth. While the Fund had
exposure in this sector, it was largely underweight in the group and avoided
many of the blow-ups, which assisted in the Fund's out-performance in this
critical sector. Among the Fund's largest contributors was Pharmacia, which is
being acquired by Pfizer at a 40% premium. Pharmacia, the Fund's second largest
position, was up 2.10% during the fiscal year. Among the weak performers that
dragged down the Fund's performance were King Pharmaceuticals and Pfizer.
The three other major sectors represented in the health care marketplace were a
mixed bag. Biotechnology stocks, another significant component in the sector,
did not fare much better than pharmaceuticals. Many of the Fund's largest losers
reside in the biotech sector as the inherent risk in this industry is
significant. A bright spot in this difficult market was the health care services
area, which includes hospitals and managed care organizations. One stock that
worked particularly well for the Fund was Wellpoint Health Networks, a managed
care company, which posted a gain of 34.3% during the period. Medical device
companies also enjoyed sound performance; the Fund benefited from a core group
of holdings including Boston Scientific and Zimmer.
In the closing months of the fiscal year, the managers concentrated the number
of holdings in the Fund in an effort to improve the quality of the portfolio.
While volatility is typical in a sector fund such as this, the long-term outlook
for strong companies in the health care market is positive. With an aging
population worldwide, demand for medical care is likely to rise. Further, given
the decline in valuations, many of these stocks look attractive at levels we
have not seen in years.
ANNUALIZED PERFORMANCE(1)
AS OF SEPTEMBER 30, 2002
SINCE INCEPTION(4)
----------------------------------
1 YEAR 5 YEARS 1/31/1996 2/1/2000 9/24/2001
- ------------------------------------------------------------------------------
Class A NAV -19.61% -3.13% 0.60% -- --
Class A POP -24.02% -4.22% -0.25% -- --
Class B NAV -20.21% -3.83% -0.14% -- --
Class B POP -24.20% -4.12% -0.14% -- --
Class C NAV -20.25% -- -- -4.22% --
Class C POP -21.85% -- -- -4.59% --
Class S -19.72% -- -- -- -12.50%
Class Y -19.44% -2.89% 0.84% -- --
S&P Health Care
Composite Index(3) -22.38% 4.61% 9.44% -1.58% -22.38%
* Unlike mutual funds, index returns do not reflect any expenses, transaction
costs, or cash flow effects.
B-4
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2002
[CHART]
CLASS A
FIRST AMERICAN FIRST AMERICAN
HEALTH SCIENCES FUND, HEALTH SCIENCES FUND, S&P HEALTH CARE
CLASS A NAV CLASS A POP COMPOSITE INDEX(3)
- --------------------------------------------------------------------------------
1/1996 $ 10,000 $ 9,452 $ 10,000
9/1996 $ 9,868 $ 9,327 $ 10,926
9/1997 $ 12,197 $ 11,528 $ 14,704
9/1998 $ 9,119 $ 8,619 $ 20,030
9/1999 $ 9,673 $ 9,142 $ 19,925
9/2000 $ 15,659 $ 14,801 $ 24,768
9/2001 $ 12,943 $ 12,234 $ 23,720
9/2002 $ 10,405 $ 9,834 $ 18,411
[CHART]
CLASS Y
FIRST AMERICAN
HEALTH SCIENCES FUND, S&P HEALTH CARE
CLASS Y COMPOSITE INDEX(3)
- ---------------------------------------------------------
1/1996 $ 10,000 $ 10,000
9/1996 $ 9,880 $ 10,926
9/1997 $ 12,241 $ 14,704
9/1998 $ 9,168 $ 20,030
9/1999 $ 9,772 $ 19,925
9/2000 $ 15,840 $ 24,768
9/2001 $ 13,124 $ 23,720
9/2002 $ 10,573 $ 18,411
(1) Past performance does not guarantee future results and does not reflect the
deduction of taxes that a shareholder would pay on fund distributions or
redemption of fund shares. The principal value of an investment and
investment return will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
reflects voluntary fee waivers in effect. In the absence of such fee
waivers, total returns would be reduced. Index is for illustrative purposes
only and is not available for investment. Sector funds such as the First
American Health Sciences Fund are more vulnerable to price fluctuation as a
result of events that may affect the industry in which they focus than are
funds that invest in multiple industries. Share prices of sector funds also
will fluctuate with changing market conditions, as will share prices of
other stock funds. Sector funds should not be treated as a core investment;
rather, their role is to round out the growth portion of a well-diversified
investment portfolio.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the Fund's maximum sales charge and
assumes reinvestment of all distributions at NAV.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A
shares, 1% for Class C shares, and the maximum contingent deferred sales
charge ("CDSC") for Class B and Class C shares for the relevant period.
Maximum CDSC for Class B shares is 5.00% and 1.00% for Class C shares.
Total returns assume reinvestment of all distributions at NAV.
The Health Sciences Fund's 2000 returns were higher due in part to its
strategy of investing in IPOs in a period favorable for IPO investing. Of
course, such favorable returns involve accepting the risk of volatility,
and there is no assurance that the Fund's future investment in IPOs will
have the same effect on performance as it had in 1999 and 2000.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index comprised of health care stocks in the S&P 500 Composite
Index (an unmanaged index of large-capitalization stocks).
(4) The performance since inception for the index is calculated from the month
end following the inception of the class.
B-5
LARGE CAP CORE
Investment Objective: LONG-TERM GROWTH OF CAPITAL
A general market decline took a significant toll on stocks, including those of
the largest companies. The First American Large Cap Core Fund (the "Fund") Class
Y shares declined 21.23% for the fiscal year ended September 30, 2002 (Class A
shares declined 21.46% on net asset value). Over the same 12-month period, the
Fund's benchmark, the S&P 500 Composite Index, declined 20.49%*.
The period began in a very positive way, as the Federal Reserve responded to the
economic setback of the September 11, 2001 terrorist attacks with additional
cuts of short-term interest rates. The stock market performed solidly in the
first few months of the Fund's fiscal year as investors anticipated an economic
recovery. However, the market remained volatile, and a number of issues came to
the forefront in early 2002, which obscured the positive economic trends,
including ongoing terrorist concerns, rising global tensions, and corporate
accounting scandals. As a result, stocks reversed course and declined
significantly for much of the rest of the fiscal year.
While it was a challenging environment in which to find productive stocks, a few
areas generated reasonable returns. Several consumer stocks, including retailers
such as Kohl's and Lowe's performed well, as did auto parts retailer Autozone.
The Fund also added stock of Carnival Cruise Line after it was driven down in
the wake of the terrorist attack, and the stock rebounded nicely. Cash levels in
the Fund were also relatively high due to the market's volatility. A number of
areas detracted from performance, including stocks of companies caught up in
some of the corporate governance issues, Enron and Tyco. Large pharmaceutical
stocks such as Bristol-Myers, Merck, and Baxter International also declined
significantly, hurting the Fund's performance.
The bear market has created a number of attractive buying opportunities in
high-quality stocks. The Fund has begun to add positions in companies that are
in a strong financial position and seem well-positioned for a rebound. Some of
these opportunities can be found in the health care, technology, and
telecommunications sectors.
Given the extent of the market's decline in recent months, it seems reasonable
to expect that a recovery is in order. Good stocks are available at reasonable
valuations, which may create the potential for gains in the months ahead. While
the markets are likely to remain volatile on a day-to-day basis, stocks may
begin to look fairly attractive when compared to other assets in the current
investment environment.
ANNUALIZED PERFORMANCE(1)
AS OF SEPTEMBER 30, 2002
<Table>
<Caption>
SINCE INCEPTION(4)
---------------------------------------------------------
1 YEAR 5 YEARS 12/29/1992 1/9/1995 3/1/1999 11/27/2000 9/24/2001
- ---------------------------------------------------------------------------------------------------------------
Class A NAV -21.46% -4.30% -- 5.40% -- -- --
Class A POP -25.76% -5.38% -- 4.62% -- -- --
Class B NAV -22.06% -- -- -- -13.09% -- --
Class B POP -25.95% -- -- -- -13.71% -- --
Class C NAV -22.03% -- -- -- -- -- -19.48%
Class C POP -23.62% -- -- -- -- -- -21.05%
Class S -21.45% -- -- -- -- -28.47% --
Class Y -21.23% -4.06% 4.92% -- -- -- --
S&P 500 Composite Index(3) -20.49% -1.63% 8.69% 9.25% -11.06% -21.87% -20.49%
</Table>
* Unlike mutual funds, index returns do not reflect any expenses, transaction
costs, or cash flow effects.
B-6
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2002
[CHART]
CLASS A
<Table>
<Caption>
FIRST AMERICAN LARGE FIRST AMERICAN LARGE
CAP CORE FUND, CAP CORE FUND,
CLASS A NAV CLASS A POP S&P 500 COMPOSITE INDEX(3)
- -------------------------------------------------------------------------------------------------------
1/1995 $ 10,000 $ 9,452 $ 10,000
10/1995 $ 12,347 $ 11,666 $ 12,603
10/1996 $ 14,635 $ 13,828 $ 15,640
10/1997 $ 17,753 $ 16,774 $ 20,663
10/1998 $ 21,051 $ 19,890 $ 25,204
10/1999 $ 24,823 $ 23,453 $ 31,671
10/2000 $ 29,768 $ 28,126 $ 33,599
9/2001 $ 19,103 $ 18,049 $ 24,760
9/2002 $ 15,006 $ 14,178 $ 19,691
</Table>
[CHART]
CLASS Y
FIRST AMERICAN LARGE
CAP CORE FUND,
CLASS Y S&P 500 COMPOSITE INDEX(3)
- -------------------------------------------------------------------------------
12/1992 $ 10,000 $ 10,000
10/1993 $ 10,753 $ 10,981
10/1994 $ 10,813 $ 11,406
10/1995 $ 12,927 $ 14,422
10/1996 $ 15,360 $ 17,897
10/1997 $ 18,675 $ 23,644
10/1998 $ 22,203 $ 28,840
10/1999 $ 26,241 $ 36,241
10/2000 $ 31,552 $ 38,447
10/2001 $ 20,288 $ 28,332
10/2002 $ 15,981 $ 22,531
(1) Past performance does not guarantee future results and does not reflect the
deduction of taxes that a shareholder would pay on fund distributions or
redemption of fund shares. The principal value of an investment and
investment return will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
reflects voluntary fee waivers in effect. In the absence of such fee
waivers, total returns would be reduced. Index is for illustrative purposes
only and is not available for investment.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the Fund's maximum sales charge and
assumes reinvestment of all distributions at NAV.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A
shares, 1% for Class C shares, and the maximum contingent deferred sales
charge ("CDSC") for Class B and Class C shares for the relevant period.
Maximum CDSC for Class B shares is 5.00% and 1.00% for Class C shares.
Total returns assume reinvestment of all distributions at NAV.
On September 24, 2001, the Large Cap Core Fund became the successor by
merger to the Firstar LargeCap Core Equity Fund, a series of Firstar Funds,
Inc. Prior to the merger, the First American Fund had no assets or
liabilities. Performance presented prior to September 24, 2001, represents
that of the Firstar LargeCap Core Equity Fund. Prior to January 10, 1995,
the Firstar Fund offered one class of shares to investors without a
distribution or shareholder servicing fee. Performance presented prior to
January 10, 1995, does not reflect these fees.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index of large-capitalization stocks.
(4) The performance since inception for the index is calculated from the month
end following the inception of the class.
B-7
MID CAP GROWTH
Investment Objective: GROWTH OF CAPITAL
Growth stocks continued to find themselves in the midst of a serious bear market
during the fiscal year ended September 30, 2002. The First American Mid Cap
Growth Fund (the "Fund") was hard hit, with Class Y shares declining 22.63%
(Class A shares declined 22.74% at net asset value). The Fund lagged its
benchmark, the Russell MidCap Growth Index, which declined 15.50% over the same
period*.
As has been the case since the bear market began in early 2000, growth stocks
have borne the brunt of investors' wrath. During the past 12 months, many
companies continued to struggle to meet profit expectations. This fact proved to
be particularly damaging to prospects for growth stocks, and the issues owned in
the Fund were no exception. There was some positive movement in the first few
months of the period, which occurred on the heels of a major selloff in stocks
triggered by the events of September 11, 2001. After the immediate impact of the
terrorist attacks faded, investors were initially encouraged about prospects for
a better profit environment, and the Fund benefited as a result through the end
of 2001, into the early months of 2002.
The environment quickly changed as investors became unsettled about the
inability of many companies to meet profit expectations.From early 2002 forward,
mid-cap growth stocks as a whole generally declined. As has been the case for
much of the bear market cycle, technology stocks proved to be a particularly
weak sector. Given the challenges of the market, the Fund took a somewhat more
defensive approach, which included holding more cash than is typical, and
avoiding any significant concentration in any specific sector of the market. In
particular, throughout most of the period, the Fund had a below-average position
in technology and telecommunications stocks, which continued to lag the market
as a whole.
The Fund benefited during the year from contributions among some retail stocks
such as Michael's Stores, and a variety of other issues. Among the best
performers were the gaming software company International Gaming Technology and
the medical firm Zimmer Holdings. Among the stocks that were most detrimental
were the software company Siebel Systems and financial provider Bisys Group.
Despite the troubles of recent years, mid-cap growth stocks may be attractively
positioned going forward. Given current valuations and the extent of the
market's downturn, there is reason to be optimistic that the next year will be
more productive for investors in this segment of the market, and the Fund will
be positioned accordingly.
ANNUALIZED PERFORMANCE(1)
AS OF SEPTEMBER 30, 2002
<Table>
<Caption>
SINCE INCEPTION(4)
--------------------------------------------
1 YEAR 5 YEARS 10 YEARS 2/18/1997 8/7/1998 2/01/1999 9/24/2001
- ------------------------------------------------------------------------------------------------------------
Class A NAV -22.74% -4.60% 7.32% -- -- -- --
Class A POP -27.01% -5.68% 6.72% -- -- -- --
Class B NAV -23.47% -- -- -- -6.72% -- --
Class B POP -27.30% -- -- -- -6.90% -- --
Class C NAV -23.44% -- -- -- -- -9.44% --
Class C POP -24.90% -- -- -- -- -9.69% --
Class S -22.74% -- -- -- -- -- -21.03%
Class Y -22.63% -4.34% -- -0.41% -- -- --
Russell MidCap Growth Index(3) -15.50% -4.06% 6.95% 0.05% -0.88% -8.62% -15.50%
</Table>
* Unlike mutual funds, index returns do not reflect any expenses, transaction
costs, or cash flow effects.
B-8
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2002
[CHART]
CLASS A
FIRST AMERICAN FIRST AMERICAN
MID CAP GROWTH FUND, MID CAP GROWTH FUND, RUSSELL MIDCAP
CLASS A NAV CLASS A POP GROWTH INDEX(3)
- -----------------------------------------------------------------------
9/1992 $ 10,000 $ 9,452 $ 10,000
9/1993 $ 13,689 $ 12,936 $ 12,023
9/1994 $ 13,356 $ 12,621 $ 12,315
9/1995 $ 17,989 $ 16,999 $ 15,968
9/1996 $ 21,198 $ 20,031 $ 18,576
9/1997 $ 25,658 $ 24,245 $ 24,082
9/1998 $ 22,309 $ 21,081 $ 21,826
9/1999 $ 29,378 $ 27,761 $ 29,943
9/2000 $ 51,836 $ 48,982 $ 48,020
9/2001 $ 26,240 $ 24,796 $ 23,161
9/2002 $ 20,274 $ 19,158 $ 19,571
[CHART]
CLASS Y
FIRST AMERICAN
MID CAP GROWTH FUND, RUSSELL MIDCAP
CLASS Y GROWTH INDEX(3)
- ------------------------------------------------
2/1997 $ 10,000 $ 10,000
9/1997 $ 12,193 $ 12,338
9/1998 $ 10,633 $ 11,182
9/1999 $ 14,032 $ 15,341
9/2000 $ 24,820 $ 24,603
9/2001 $ 12,604 $ 11,867
9/2002 $ 9,769 $ 10,027
(1) Past performance does not guarantee future results and does not reflect the
deduction of taxes that a shareholder would pay on fund distributions or
redemption of fund shares. The principal value of an investment and
investment return will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
reflects voluntary fee waivers in effect. In the absence of such fee
waivers, total returns would be reduced. Indexes are for illustrative
purposes only and are not available for investment. Stocks of
mid-capitalization companies may be slightly less volatile than those of
small-capitalization companies, but they still involve substantial risk and
may be subject to more abrupt or erratic price fluctuations than
large-capitalization companies.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the Fund's maximum sales charge and
assumes reinvestment of all distributions at NAV.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A
shares, 1% for Class C shares, and the maximum contingent deferred sales
charge ("CDSC") for Class B and Class C shares for the relevant period.
Maximum CDSC for Class B shares is 5.00% and 1.00% for Class C shares.
Total returns assume reinvestment of all distributions at NAV.
On August 7, 1998, the Mid Cap Growth Fund became the successor by merger
to the Piper Emerging Growth Fund, a series of Piper Funds Inc. Prior to
the merger, the First American Fund had no assets or liabilities.
Performance prior to August 7, 1998, is that of the Piper Emerging Growth
Fund.
The Mid Cap Growth Fund's 1999 returns were higher due in part to its
strategy of investing in IPOs in a period favorable for IPO investing. Of
course, such favorable returns involve accepting the risk of volatility,
and there is no assurance that the Fund's future investment in IPOs will
have the same effect on performance as it had in 1999 and 2000.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index that measures the performance of those Russell MidCap
Index companies with higher price-to-book ratios and higher forecasted
growth values.
(4) The performance since inception for the index is calculated from the month
end following the inception of the class.
B-9
MID CAP CORE
Investment Objective: CAPITAL APPRECIATION
With investor confidence sagging through much of 2002, mid-cap stocks moved in a
negative direction, though they generally fared better than the stock market as
a whole. For its fiscal year ending September 30, 2002, the First American Mid
Cap Core Fund (the "Fund") Class Y shares fell by 6.39% (Class A shares lost
6.64% on net asset value). The Fund's benchmark, the S&P 400 MidCap Index,
declined 4.70% for the period*.
A trend that began in earlier years continued for much of the past fiscal year,
as mid-cap stocks tended to outpace their blue-chip counterparts. With issues
such as corporate accounting scandals taking a major toll on a number of
well-known companies, many of the firms in the mid-cap universe escaped those
problems as few concerns surfaced about accounting problems at smaller
companies. In addition, earnings on mid-cap stocks generally held up better than
for the market as a whole. In the closing months of the Fund's fiscal year,
damage from the bear market broadened, and mid-cap stocks declined comparably to
the rest of the equity market.
Although the environment presented serious challenges, several stocks performed
well for the Fund during the year. One area of strength was the education
market, where two post-secondary education companies, Corinthian Colleges and
Career Education, generated solid returns. The food company Dreyer's Grand Ice
Cream turned in positive results and accepted a buyout from Nestle's, boosting
its stock price. USA Interactive and Westwood One, both media companies, also
performed well. Among the stocks detracting from performance was King
Pharmaceuticals, which struggled due to a number of issues that arose from some
of its high-profit drugs. Polycom, a video-conferencing company that experienced
disappointing business, and Health South, which saw Medicare payments for its
rehabilitation services decline, also hurt portfolio performance.
The Fund remains well-diversified with a broad mix of stocks from the mid-cap
universe, including a mild preference for growth-oriented stocks.
A rebound in stock performance will likely hinge on faster economic growth,
which may be dependent in large part on increasing corporate
expenditures-something that has been lacking in recent years. As the year
progresses, we anticipate that business spending will pick up, which should give
a number of stocks a reasonable boost. Given the current low valuations of many
stocks, the Fund is seeking to position itself to benefit from a more favorable
economic environment in the months to come.
ANNUALIZED PERFORMANCE(1)
AS OF SEPTEMBER 30, 2002
<Table>
<Caption>
SINCE INCEPTION(4)
---------------------------------------------
1 YEAR 5 YEARS 10 YEARS 1/9/1995 3/01/1999 12/11/2000 9/24/2001
- ---------------------------------------------------------------------------------------------------------
Class A NAV -6.64% -0.02% -- 8.30% -- -- --
Class A POP -11.77% -1.15% -- 7.51% -- -- --
Class B NAV -7.36% -- -- -- 2.08% -- --
Class B POP -11.99% -- -- -- 1.54% -- --
Class C NAV -7.20% -- -- -- -- -- -3.99%
Class C POP -9.06% -- -- -- -- -- -5.88%
Class S -6.58% -- -- -- -- -15.43% --
Class Y -6.39% 0.22% 8.57% -- -- -- --
S&P MidCap 400 Index(3) -4.70% 5.39% 12.57% 13.47% 4.23% -11.80% -4.70%
</Table>
* Unlike mutual funds, index returns do not reflect any expenses, transaction
costs, or cash flow effects.
B-10
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2002
[CHART]
CLASS A
FIRST AMERICAN FIRST AMERICAN
MID CAP CORE FUND, MID CAP CORE FUND, S&P MIDCAP 400
CLASS A NAV CLASS A POP INDEX(3)
- ---------------------------------------------------------------------
1/1995 $ 10,000 $ 9,452 $ 10,000
10/1995 $ 12,873 $ 12,166 $ 12,449
10/1996 $ 14,453 $ 13,658 $ 14,608
10/1997 $ 17,658 $ 16,688 $ 19,381
10/1998 $ 16,615 $ 15,702 $ 20,681
10/1999 $ 16,832 $ 15,907 $ 25,038
10/2000 $ 24,783 $ 23,421 $ 32,962
9/2001 $ 19,826 $ 18,736 $ 27,636
9/2002 $ 18,510 $ 17,493 $ 26,338
[CHART]
CLASS Y
FIRST AMERICAN
MID CAP CORE FUND, S&P MIDCAP
CLASS Y 400 INDEX(3)
- --------------------------------------------------
10/1992 $ 10,000 $ 10,000
10/1993 $ 11,615 $ 12,153
10/1994 $ 11,937 $ 12,443
10/1995 $ 15,015 $ 15,082
10/1996 $ 16,905 $ 17,698
10/1997 $ 20,699 $ 23,480
10/1998 $ 19,526 $ 25,055
10/1999 $ 19,831 $ 30,334
10/2000 $ 29,268 $ 39,935
9/2001 $ 23,462 $ 34,963
9/2002 $ 21,954 $ 31,909
(1) Past performance does not guarantee future results and does not reflect the
deduction of taxes that a shareholder would pay on fund distributions or
redemption of fund shares. The principal value of an investment and
investment return will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
reflects voluntary fee waivers in effect. In the absence of such fee
waivers, total returns would be reduced. Index is for illustrative purposes
only and is not available for investment. Stocks of mid-capitalization
companies may be slightly less volatile than those of small-capitalization
companies, but they still involve substantial risk and may be subject to
more abrupt or erratic price fluctuations than large-capitalization
companies.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the Fund's maximum sales charge and
assumes reinvestment of all distributions at NAV.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A
shares, 1% for Class C shares, and the maximum contingent deferred sales
charge ("CDSC") for Class B and Class C shares for the relevant period.
Maximum CDSC for Class B shares is 5.00% and 1.00% for Class C shares.
Total returns assume reinvestment of all distributions at NAV.
On September 24, 2001, the Mid Cap Core Fund became the successor by merger
to the Firstar MidCap Core Equity Fund, a series of Firstar Funds, Inc.
Prior to the merger, the First American Fund had no assets or liabilities.
Performance presented prior to September 24, 2001, represents that of the
Firstar MidCap Core Equity Fund.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged, capitalization-weighted index that represents the aggregate
market value of the common equity of 400 companies chosen by Standard &
Poor's with a median capitalization of approximately $700 million and
measures the performance of the mid-range sector of the U.S. stock market.
(4) The performance since inception for the index is calculated from the month
end following the inception of the class.
B-11
SMALL CAP GROWTH
Investment Objective: GROWTH OF CAPITAL
Growth stocks continued to struggle in the ongoing bear market environment
throughout the fiscal year. As a result, the First American Small Cap Growth
Fund (the "Fund") Class Y shares declined 22.00% during the period (Class A
shares declined 22.07% on net asset value). For the same period, the Fund's
benchmark, the Russell 2000 Growth Index, was down 18.16%*.
The fiscal year began on the heels of a significantly difficult year that was
capped by the terrorist attacks of September 11, 2001. In the closing months of
2001, there seemed to be reason for optimism. All indications pointed to an
economy in recovery, fueling expectations that improved corporate profits
wouldn't be far behind. This was a particularly important trend for growth
stocks, which generally move higher on good earnings news.
Unfortunately, the optimism began to fade near the onset of 2002. A number of
large companies became embroiled in accounting irregularities, events that shook
investor confidence throughout the equity market. In addition, investors became
wary of some economic signals, which lowered expectations for corporate
earnings. As a result, growth stocks resumed their downward trend and reached
extremely low levels in July and, then again, in September, the closing month of
the Fund's fiscal year.
In such a negative environment, an extra premium was placed on analysis and
individual stock selection. The Fund took a fairly neutral approach to the
market, avoiding significant commitments to any particular sector. Most notably,
the portfolio de-emphasized technology and telecommunications issues, which
continued to be among the hardest hit areas of the market. Cash levels were also
slightly higher than is usually the case, contributing to the Fund's defensive
posture.
Stocks of companies that managed to generate solid results helped the Fund's
performance. Among the contributors were Take Two Interactive Software, a
computer game maker, and two health care related stocks, Amylin Pharmaceuticals
and Techne Corporation. On the downside, two stocks related to the struggling
broadband communications industry hurt the Fund's returns, including Centillium
Corporation and Microtune Inc.
The bear market has lasted for more than two-and-one-half years, but it appears
to be close to wearing down. Stock valuations have been hard hit, and investors
may begin to recognize long-term growth opportunities. Small-cap growth stocks
have sometimes performed well coming out of such an environment, and this could
potentially happen again. As more encouraging economic signals appear, the Fund
will position itself to take advantage of any opportunities.
ANNUALIZED PERFORMANCE(1)
AS OF SEPTEMBER 30, 2002
<Table>
<Caption>
SINCE INCEPTION(4)
-----------------------------------
1 YEAR 5 YEARS 10 YEARS 7/31/1998 2/1/1999 9/24/2001
- -------------------------------------------------------------------------------------------------
Class A NAV -22.07% -3.31% 6.51% -- -- --
Class A POP -26.38% -4.40% 5.91% -- --
Class B NAV -22.70% -- -- -4.02% -- --
Class B POP -26.57% -- -- -4.34% -- --
Class C NAV -22.69% -- -- -- -6.68% --
Class C POP -24.22% -- -- -- -6.94% --
Class S -22.07% -- -- -- -- -21.00%
Class Y -22.00% -- -- -3.05% -- --
Russell 2000 Growth Index(3) -18.16% -9.49% 3.49% -8.69% -9.89% -18.16%
</Table>
* Unlike mutual funds, index returns do not reflect any expenses, transaction
costs, or cash flow effects.
B-12
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2002
[CHART]
CLASS A
FIRST AMERICAN FIRST AMERICAN
SMALL CAP GROWTH FUND, SMALL CAP GROWTH FUND, RUSSELL 2000
CLASS A NAV CLASS A POP GROWTH INDEX(3)
- ------------------------------------------------------------------------------
9/1992 $ 10,000 $ 9,452 $ 10,000
9/1993 $ 12,453 $ 11,766 $ 12,920
9/1994 $ 12,717 $ 12,016 $ 13,031
9/1995 $ 14,480 $ 13,682 $ 16,706
9/1996 $ 15,260 $ 14,419 $ 18,813
9/1997 $ 22,229 $ 21,004 $ 23,206
9/1998 $ 18,084 $ 17,087 $ 17,443
9/1999 $ 25,517 $ 24,110 $ 23,134
9/2000 $ 41,356 $ 39,076 $ 29,997
9/2001 $ 24,107 $ 22,778 $ 17,223
9/2002 $ 18,786 $ 17,750 $ 14,095
[CHART]
CLASS Y
FIRST AMERICAN
SMALL CAP GROWTH FUND, RUSSELL 2000
CLASS Y GROWTH INDEX(3)
- --------------------------------------------------------
7/1998 $ 10,000 $ 10,000
9/1998 $ 8,383 $ 8,471
9/1999 $ 11,856 $ 11,235
9/2000 $ 19,275 $ 14,568
9/2001 $ 11,267 $ 8,364
9/2002 $ 8,788 $ 6,845
(1) Past performance does not guarantee future results and does not reflect the
deduction of taxes that a shareholder would pay on fund distributions or
redemption of fund shares. The principal value of an investment and
investment return will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
reflects voluntary fee waivers in effect. In the absence of such fee
waivers, total returns would be reduced. Index is for illustrative purposes
only and is not available for investment. Stocks of small-capitalization
companies involve substantial risk. These stocks historically have
experienced greater volatility than stocks of larger companies and they may
be expected to do so in the future.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the Fund's maximum sales charge and
assumes reinvestment of all distributions at NAV.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A
shares, 1% for Class C shares, and the maximum contingent deferred sales
charge ("CDSC") for Class B and Class C shares for the relevant period.
Maximum CDSC for Class B shares is 5.00% and 1.00% for Class C shares.
Total returns assume reinvestment of all distributions at NAV.
On July 31, 1998, the Small Cap Growth Fund became the successor by merger
to the Piper Small Company Growth Fund, a series of Piper Funds Inc.
Performance presented prior to July 31, 1998, is that of the Piper Small
Companies Growth Fund. On September 21, 1996, shareholders approved a
change in the Fund's investment objective from high total investment return
consistent with prudent investment risk to long-term capital appreciation.
In connection with this change, the Fund's investment policies were
revised.
The Small Cap Growth Fund's 1999 returns were higher due in part to its
strategy of investing in IPOs in a period favorable for IPO investing. Of
course, such favorable returns involve accepting the risk of volatility,
and there is no assurance that the Fund's future investment in IPOs will
have the same effect on performance as it did in 1999.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index that measures the performance of those Russell 2000
Index companies with higher price-to-book ratios and higher forecasted
growth values. The Russell 2000 Index is an unmanaged index comprised of
the smallest 2,000 companies in the Russell 3000 index, which represent
approximately 8% of the total market capitalization of the Russell 3000
Index. The Russell 3000 Index is composed of 3,000 large U.S. companies
based on total market capitalization, representing approximately 98% of the
investable U.S. equity market.
(4) The performance since inception for the index is calculated from the month
end following the inception of the class.
B-13
SMALL CAP CORE
Investment Objective: CAPITAL APPRECIATION
As the bear market continued throughout the fiscal year, small stocks managed to
avoid many of the problems, but still lost ground. The First American Small Cap
Core Fund (the "Fund") Class Y shares declined 4.19% for the fiscal year ended
September 30, 2002 (Class A shares declined 4.56% on net asset value). Over the
same 12 months, the Fund's benchmark, the S&P SmallCap 600 Index, declined
1.79%*.
Small-cap stocks appeared attractively valued in comparison to larger stocks as
the fiscal year began, and that was borne out in an early rally that favored
this segment of the market. The Fund enjoyed solid gains in the first half of
its fiscal year. However, the environment changed in April 2002 as investors
became concerned that the U.S. economy was not meeting expectations for
recovery. Other issues also hampered investor psychology, including concerns
about global conflicts and credibility over corporate accounting problems.
Investors began to pull money out of what were viewed as more risky areas of the
market. As a result, a major sell-off in small-cap stocks occurred for much of
the rest of the period.
A number of stocks performed well, particularly in the earlier part of the year.
Among the Fund's biggest contributors was Performance Food Group, a fast-growing
food distribution company. Hospital firms such as Community Health Systems and
Triad Hospitals generated positive results, as did retail companies Gymboree and
Advanced Auto Parts. Among the detractors from Fund performance were two
semiconductor stocks, Entegris and ATMI, that started the year well, but lost
ground as sales of semiconductor chips turned disappointing. Weakness in
consumer stocks also took a toll, including poor returns from cable TV providers
Insight Communications and Rogers Communications. Although the Fund cut back on
holdings in the weak telecommunications sector, one holding that had a
particularly negative impact on the Fund was the wireless firm Airgate PCS.
The downturn that plagued the market in recent months created positive buying
opportunities for the Fund. In particular, positions have been increased in the
hard-hit energy sector, which appears well-positioned for a rebound. The number
of stocks in the Fund has been reduced, allowing the portfolio to own larger
positions in favored issues. This could prove effective for the Fund, as the
portfolio has been able to build its holdings in high-quality companies with
strong franchises and a dominant position in their marketplace. While we
anticipate a volatile market in the near term, we expect to see an improving
environment over the next year.
ANNUALIZED PERFORMANCE(1)
AS OF SEPTEMBER 30, 2002
<Table>
<Caption>
SINCE INCEPTION(4)
-----------------------------------
1 YEAR 5 YEARS 10 YEAR 12/31/1993 3/6/1995 9/24/2001
- -------------------------------------------------------------------------------------------------
Class A NAV -4.56% 0.44% 9.69% -- -- --
Class A POP -9.83% -0.69% 9.07% -- -- --
Class B NAV -5.23% -0.24% -- -- 5.76% --
Class B POP -9.64% -0.50% -- -- 5.76% --
Class C NAV -5.09% -- -- -- -- -3.02%
Class C POP -6.91% -- -- -- -- -4.87%
Class S -4.48% 0.49% -- 6.41% -- --
Class Y -4.19% 0.74% 9.96% -- -- --
S&P SmallCap 600 Index(3) -1.79% 0.83% 10.93% 8.41% 9.92% -1.79%
</Table>
* Unlike mutual funds, index returns do not reflect any expenses, transaction
costs, or cash flow effects.
B-14
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2002
[CHART]
CLASS A
FIRST AMERICAN FIRST AMERICAN
SMALL CAP CORE FUND, SMALL CAP CORE FUND, S&P SMALL CAP
CLASS A NAV CLASS A POP 600 INDEX(3)
- --------------------------------------------------------------------------------
11/1992 $ 10,000 $ 9,452 $ 10,000
11/1993 $ 11,975 $ 11,320 $ 11,871
11/1994 $ 12,858 $ 12,155 $ 11,436
11/1995 $ 15,619 $ 14,764 $ 14,977
11/1996 $ 16,924 $ 15,998 $ 18,255
11/1997 $ 20,216 $ 19,110 $ 22,735
11/1998 $ 17,347 $ 16,399 $ 21,516
11/1999 $ 20,334 $ 19,221 $ 23,776
10/2000 $ 26,362 $ 24,920 $ 28,589
9/2001 $ 23,033 $ 21,773 $ 25,396
9/2002 $ 21,983 $ 20,780 $ 24,940
[CHART]
CLASS Y
FIRST AMERICAN
SMALL CAP CORE FUND, S&P SMALL CAP
CLASS Y 600 INDEX(3)
- ----------------------------------------------------------
11/1992 $ 10,000 $ 10,000
11/1993 $ 11,971 $ 11,871
11/1994 $ 12,876 $ 11,436
11/1995 $ 15,670 $ 14,977
11/1996 $ 17,046 $ 18,255
11/1997 $ 20,416 $ 22,735
11/1998 $ 17,578 $ 21,516
11/1999 $ 20,665 $ 23,776
10/2000 $ 26,866 $ 28,589
9/2001 $ 23,510 $ 25,396
9/2002 $ 22,526 $ 24,940
(1) Past performance does not guarantee future results and does not reflect the
deduction of taxes that a shareholder would pay on fund distributions or
redemption of fund shares. The principal value of an investment and
investment return will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
reflects voluntary fee waivers in effect. In the absence of such fee
waivers, total returns would be reduced. Indexes are for illustrative
purposes only and are not available for investment. Stocks of
small-capitalization companies involve substantial risk. These stocks
historically have experienced greater price volatility than stocks of
larger companies, and they may be expected to do so in the future.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the Fund's maximum sales charge and
assumes reinvestment of all distributions at NAV.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A
shares, 1% for Class C shares, and the maximum contingent deferred sales
charge ("CDSC") for Class B and Class C shares for the relevant period.
Maximum CDSC for Class B shares is 5.00% and 1.00% for Class C shares.
Total returns assume reinvestment of all distributions at NAV.
On September 24, 2001, the Small Cap Core Fund became the successor by
merger to the Firstar SmallCap Core Equity Fund, a series of Firstar Funds,
Inc. Prior to the merger, the First American Fund had no assets or
liabilities. Performance presented prior to September 24, 2001, represents
that of the Firstar SmallCap Core Equity Fund. The Firstar SmallCap Core
Equity Fund was organized on November 27, 2000, and prior to that, was a
separate series of Mercantile Funds, Inc.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged, capitalization-weighted index that measures the performance
of selected U.S. stocks with small market capitalizations.
(4) The performance since inception for the index is calculated from the month
end following the inception of the class.
B-15
EMERGING MARKETS
Investment Objective: LONG-TERM GROWTH OF CAPITAL
Typically, volatile emerging markets actually provided a source of refuge from a
bear market environment in the 12-month period ended September 30, 2002. The
First American Emerging Markets Fund (the "Fund") Class Y shares gained 6.10%
for the fiscal year (Class A shares returned 5.96% at net asset value). By
comparison, the Fund's benchmark index, the MSCI Emerging Markets Free Index,
earned 8.15%*.
The period began in October 2001 as a globally felt recession was nearing an
end. Investors appeared to give, what had been hard-hit emerging markets, the
early benefit of what was expected to become a more favorable environment in
2002. While economic results turned out to be a bit mixed around the world, a
number of developing markets were able to capitalize on some favorable trends.
Asian markets in particular performed quite well. These nations not only
benefited from increased manufacturing activity for export markets, but also saw
very strong domestic consumer demand. Eastern European markets also generated
positive results. The clear weak link in the emerging market universe were Latin
American countries, where economic and political issues had an overriding
impact.
The Fund began the fiscal year with a fairly balanced portfolio from a regional
perspective. However, the emphasis was quickly shifted to favor Asian and
Eastern European markets. This included a particular focus on South Korea,
Thailand, and Russia. Among the prominent contributors to the Fund's performance
were Hite Brewery and Hyundai Motors in Korea, Bangkok Bank, and Land and Houses
in Thailand, and two oil companies, Lukoil Holdings and Yukos in Russia.
Detracting from performance were weak returns from stocks in Latin America, most
notably, Brazil, which is in the midst of political upheaval. As a result, the
Fund reduced its position in this region.
The Fund utilizes a "top-down" investment style, determining first which regions
and markets are best positioned to benefit from current economic and market
trends. From that point, individual stock selections are made within the most
attractive emerging market nations. Stock selection is based on fundamental
research and an assessment of the company's earnings growth prospects.
Going forward, we expect that the Pacific Basin will continue to provide
investment opportunities. While there has been some disappointment about the
strength of the global economic recovery, it seems likely that trends should
continue to move in a positive direction. In this environment, we believe
emerging markets should continue to provide attractive return opportunities for
investors.
ANNUALIZED PERFORMANCE(1)
AS OF SEPTEMBER 30, 2002
<Table>
<Caption>
SINCE INCEPTION(4)
--------------------------------------------
1 YEAR 5 YEARS 11/9/1993 8/7/1998 2/1/2000 9/24/2001
- -------------------------------------------------------------------------------------------
Class A NAV 5.96% -10.75% -5.17% -- -- --
Class A POP 0.16% -11.75% -5.77% -- -- --
Class B NAV 5.06% -- -- -4.45% -- --
Class B POP 0.06% -- -- -4.91% -- --
Class C NAV 5.17% -- -- -- -16.82% --
Class C POP 3.11% -- -- -- -17.13% --
Class S 5.77% -- -- -- -- 8.40%
Class Y 6.10% -- -- -3.46% -- --
MSCI Emerging
Markets Free Index(3) 8.15% -9.92% -4.11% 4.74% -19.68% 8.15%
</Table>
* Unlike mutual funds, index returns do not reflect any expenses, transaction
costs, or cash flow effects.
B-16
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2002
[CHART]
CLASS A
<Table>
<Caption>
FIRST AMERICAN EMERGING
MARKETS FUND, FIRST AMERICAN EMERGING MSCI EMERGING MARKETS
CLASS A NA MARKETS FUND, CLASS A POP FREE INDEX(3)
- -------------------------------------------------------------------------------------------------
11/1993 $ 10,000 $ 9,452 $ 10,000
9/1994 $ 11,920 $ 11,267 $ 12,615
9/1995 $ 7,300 $ 6,900 $ 10,380
9/1996 $ 8,850 $ 8,365 $ 10,922
9/1997 $ 11,016 $ 10,412 $ 11,638
9/1998 $ 5,628 $ 5,319 $ 6,075
9/1999 $ 6,791 $ 6,419 $ 9,508
9/2000 $ 8,527 $ 8,059 $ 9,547
9/2001 $ 5,888 $ 5,566 $ 6,382
9/2002 $ 6,240 $ 5,898 $ 6,902
</Table>
[CHART]
CLASS Y
FIRST AMERICAN EMERGING
MARKETS FUND, MSCI EMERGING MARKETS
CLASS Y FREE INDEX(3)
- -----------------------------------------------------------
8/1998 $ 10,000 $ 10,000
9/1998 $ 7,730 $ 10,634
9/1999 $ 9,354 $ 16,645
9/2000 $ 11,774 $ 16,714
9/2001 $ 8,143 $ 11,172
9/2002 $ 8,640 $ 12,083
(1) Past performance does not guarantee future results and does not reflect the
deduction of taxes that a shareholder would pay on fund distributions or
redemption of fund shares. The principal value of an investment and
investment return will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
reflects voluntary fee waivers in effect. In the absence of such fee
waivers, total returns would be reduced. Index is for illustrative purposes
only and is not available for investment. International investing involves
risks not typically associated with domestic investing, including risks of
adverse currency fluctuations, potential political and economic
instability, different accounting standards, foreign government
regulations, currency exchange rates, limited liquidity, and volatile
prices. The risks of international investing are particularly significant
in emerging markets.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the Fund's maximum sales charge and
assumes reinvestment of all distributions at NAV.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A
shares, 1% for Class C shares, and the maximum contingent deferred sales
charge ("CDSC") for Class B and Class C shares for the relevant period.
Maximum CDSC for Class B shares is 5.00% and 1.00% for Class C shares.
Total returns assume reinvestment of all distributions at NAV.
On August 7, 1998, the Emerging Markets Fund became the successor by merger
to the Piper Emerging Markets Growth Fund, a series of Piper Global Funds
Inc. Prior to the merger, the First American Fund had no assets or
liabilities. Performance presented from June 21, 1996, to August 7, 1998,
is that of Piper Emerging Markets Growth Fund for which Edinburgh Fund
Managers acted as subadvisor. Performance prior to June 21, 1996, is that
of the Hercules Latin American Value Fund, a series of Hercules Funds Inc.
for which Bankers Trust company acted as subadvisor.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index of securities from emerging markets that are open to
foreign investors.
(4) The performance since inception for the index is calculated from the month
end following the inception of the class.
B-17
INTERNATIONAL
Investment Objective: LONG-TERM GROWTH OF CAPITAL
A volatile investment environment proved to be challenging for global investors
for the 12-month period ended September 30, 2002. As a result, the First
American International Fund (the "Fund") Class Y shares declined 18.05% (Class A
shares declined 18.19% on net asset value). By comparison, the Fund's benchmark,
the MSCI EAFE Index, lost 15.26% over the same timeframe*.
The early months of the period were among the most productive overall. In the
aftermath of the tragic terrorist attacks of September 11, 2001, signs of
recovery in global economies gave world markets a boost. European stocks
performed particularly well. However, the new year brought about increasing
concerns about the strength of any recovery, and stocks resumed the struggles
that began two years ago.
One of the more favorable surprises during the past year was the performance of
Japan's market. Stocks in Japan have generally been in decline for more than a
decade. However, signs that much-needed economic reforms might be making some
headway created a more encouraging environment for investors, and the Japanese
market managed to hold up better than most during the 12-month period. The Fund
maintained a strong position in Japan, and its weighting in that market actually
increased by the end of the fiscal year. Among the most notable contributors to
performance in this area were Brother Industries and Shiseido Pharmaceuticals.
Other Pacific Basin markets, such as Australia and Hong Kong, performed
relatively well. Australia benefited, in large part, from favorable price trends
on commodities, an important aspect of business in that nation. However, the
Fund's exposure to Australian stocks was more limited than that of the
benchmark.
The biggest disappointment over the 12 months was the European markets. Within
the region, the Fund's leaning toward growth-oriented stocks proved to be a
disadvantage for much of the year, as investors appeared to favor issues that
offered more attractive valuations. Europe's economic sluggishness took a toll
on corporate earnings, and that had a particularly negative impact on the Fund's
return. Industrial stocks and health care issues struggled most significantly.
While the effort to achieve a full-fledged economic recovery seems to have
stalled in the past year, we expect the global economic environment to improve
in the months ahead. Japan and other Asian nations, as well as emerging market
countries, appear to be positioned to benefit from a global economic turnaround.
Eventually, European markets may respond more favorably as well. The Fund is
putting greater emphasis on stocks of companies that appear to be
well-positioned to benefit from an economic recovery. Once economic activity
increases, these companies should see better profit improvement, which is likely
to be reflected in improving stock prices.
ANNUALIZED PERFORMANCE(1)
AS OF SEPTEMBER 30, 2002
<Table>
<Caption>
SINCE INCEPTION(4)
-----------------------------------------------------
1 YEAR 5 YEARS 4/4/1994 4/24/1994 5/2/1994 3/6/1995 9/24/2001
- ------------------------------------------------------------------------------------------------------
Class A NAV -18.19% -3.88% -- -- 1.05% -- --
Class A POP -22.76% -4.96% -- -- 0.38% -- --
Class B NAV -18.94% -4.59% -- -- -- 1.16% --
Class B POP -22.99% -4.87% -- -- -- 1.16% --
Class C NAV -18.97% -- -- -- -- -- -14.46%
Class C POP -20.60% -- -- -- -- -- -16.10%
Class S -18.42% -3.95% -- 1.22% -- -- --
Class Y -18.05% -3.61% 1.47% -- -- -- --
MSCI EAFE Index(3) -15.26% -5.37% -0.04% -0.04% 0.03% -0.31% -15.26%
</Table>
* Unlike mutual funds, index returns do not reflect any expenses, transaction
costs, or cash flow effects.
B-18
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2002
[CHART]
CLASS A
FIRST AMERICAN FIRST AMERICAN
INTERNATIONAL FUND, INTERNATIONAL FUND,
CLASS A NAV CLASS A POP MSCI EAFE INDEX(3)
- -----------------------------------------------------------------------------
5/1994 $ 10,000 $ 9,452 $ 10,000
11/1994 $ 9,778 $ 9,242 $ 9,998
11/1995 $ 10,641 $ 10,058 $ 10,788
11/1996 $ 11,920 $ 11,266 $ 12,092
11/1997 $ 12,220 $ 11,550 $ 12,076
11/1998 $ 14,097 $ 13,324 $ 14,103
11/1999 $ 19,260 $ 18,204 $ 17,127
10/2000 $ 18,562 $ 17,545 $ 16,107
9/2001 $ 13,365 $ 12,632 $ 11,830
9/2002 $ 10,921 $ 10,322 $ 10,024
[CHART]
CLASS Y
FIRST AMERICAN
INTERNATIONAL FUND,
CLASS Y MSCI EAFE INDEX(3)
- -------------------------------------------------------------
4/1994 $ 10,000 $ 10,000
11/1994 $ 9,924 $ 9,943
11/1995 $ 10,807 $ 10,729
11/1996 $ 12,147 $ 12,025
11/1997 $ 12,497 $ 12,010
11/1998 $ 14,458 $ 14,025
11/1999 $ 19,817 $ 17,032
10/2000 $ 19,167 $ 16,017
9/2001 $ 13,813 $ 11,764
9/2002 $ 11,320 $ 9,968
(1) Past performance does not guarantee future results and does not reflect the
deduction of taxes that a shareholder would pay on fund distributions or
redemption of fund shares. The principal value of an investment and
investment return will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
reflects voluntary fee waivers in effect. In the absence of such fee
waivers, total returns would be reduced. Index is for illustrative purposes
only and is not available for investment. International investing involves
risks not typically associated with domestic investing, including risks of
adverse currency fluctuations, potential political and economic
instability, different accounting standards, foreign government
regulations, currency exchange rates, limited liquidity, and volatile
prices.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the Fund's maximum sales charge and
assumes reinvestment of all distributions at NAV.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A
shares, 1% for Class C shares, and the maximum contingent deferred sales
charge ("CDSC") for Class B and Class C shares for the relevant period.
Maximum CDSC for Class B shares is 5.00% and 1.00% for Class C shares.
Total returns assume reinvestment of all distributions at NAV.
On July 1, 2001, Clay Finlay Inc. was hired as subadvisor to manage the
Fund's assets. On September 24, 2001, the First American International Fund
merged with Firstar International Growth Fund and Firstar International
Value Fund, both subadvised by Clay Finlay Inc. Performance history prior
to September 24, 2001, represents that of the Firstar International Growth
Fund.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index including approximately 1,100 companies representing
stock markets of 20 European countries, Australia, New Zealand, Japan, Hong
Kong, and Singapore.
(4) The performance since inception for the index is calculated from the month
end following the inception of the class.
B-19
BOND IMMDEX(TM)
Investment Objective: HIGH CURRENT INCOME CONSISTENT WITH LIMITED RISK TO
CAPITAL
In the declining interest-rate environment of the past fiscal year, bonds
generally offered positive returns relative to other markets. The First American
Bond IMMDEX(TM) Fund (the "Fund") Class Y shares gained 6.44% (Class A shares
earned 6.18% over the same period). By comparison, the Fund's benchmark, the
Lehman U.S. Government/Credit Bond Index, gained 9.21% in the same period*.
The widely held belief that a recovery was in full bloom early in the fiscal
year gave way to concern that it would not be as vibrant as anticipated. As a
result, treasury yields ended the period sharply lower than where they had
begun. This is a somewhat surprising development given the historically low
level to which interest rates had already moved at the conclusion of the prior
fiscal year. In that environment, the Fund's holdings of government bonds
performed very well. An emphasis in 5- to 10-year maturity government securities
proved particularly helpful to the Fund, relatively speaking.
The news was not as good for corporate bonds. A variety of concerns, ranging
from accounting scandals to economic uncertainty, took a toll on this market
sector. Names like Enron, Global Crossing, and Worldcom dominated the news and,
in fact, these issues hurt the performance of the Fund. Additionally, less
well-reported problems in other names, such as those in the airline industry,
further challenged the Fund. The Fund's duration neutral posture ensured that
these negative developments were not compounded by a bad call on interest rates.
As the year came to an end, the Fund held a slightly higher weighting in
corporate bonds than that of the benchmark. Given expectations that the U.S.
economy should be improving more noticeably from here, it is reasonable to
expect confidence in companies' credit worthiness to enhance the prospects for
corporate bond results. As such, management thinks that this area is likely to
outperform the government market over the next 12 months. In the near term,
management is cautious as 2002 comes to a close, but the spread advantage in
corporate bonds may begin to pay off once this period of illiquidity and market
jitters is past.
ANNUALIZED PERFORMANCE(1)
AS OF SEPTEMBER 30, 2002
<Table>
<Caption>
SINCE INCEPTION(4)
--------------------------------------------------
1 YEAR 5 YEARS 10 YEARS 1/9/1995 3/1/1999 12/11/2000 9/24/2001
- ------------------------------------------------------------------------------------------------------------------------------
Class A NAV 6.18% 7.10% -- 8.17% -- -- --
Class A POP 1.68% 6.17% -- 7.57% -- -- --
Class B NAV 5.39% -- -- -- 6.35% -- --
Class B POP 0.39% -- -- -- 5.62% -- --
Class C NAV 5.37% -- -- -- -- -- 6.03%
Class C POP 3.38% -- -- -- -- -- 4.02%
Class S 6.20% -- -- -- -- 8.76% --
Class Y 6.44% 7.36% 7.26% -- -- -- --
Lehman U.S. Government/Credit
Bond Index(3) 9.21% 7.93% 7.44% 8.55% 8.06% 9.21% 10.16%
</Table>
* Unlike mutual funds, index returns do not reflect any expenses, transaction
costs, or cash flow effects.
B-20
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2002
[CHART]
CLASS A
FIRST AMERICAN BOND FIRST AMERICAN BOND LEHMAN U.S.
IMMDEX(TM) FUND, IMMDEX(TM) FUND, GOVERNMENT/CREDIT BOND
CLASS A NAV CLASS A POP INDEX(3)
- -------------------------------------------------------------------------------
1/1995 $ 10,000 $ 9,576 $ 10,000
10/1995 $ 11,570 $ 11,080 $ 11,344
10/1996 $ 12,155 $ 11,640 $ 11,955
10/1997 $ 13,210 $ 12,650 $ 13,008
10/1998 $ 14,414 $ 13,803 $ 14,344
10/1999 $ 14,407 $ 13,796 $ 14,249
10/2000 $ 15,414 $ 14,760 $ 15,262
9/2001 $ 17,278 $ 16,545 $ 17,165
9/2002 $ 18,345 $ 17,568 $ 18,750
[CHART]
CLASS Y
FIRST AMERICAN BOND LEHMAN U.S.
IMMDEX(TM) FUND, GOVERNMENT/CREDIT BOND
CLASS Y INDEX(3)
- ---------------------------------------------------------
10/1992 $ 10,000 $ 10,000
10/1993 $ 11,330 $ 11,363
10/1994 $ 10,889 $ 10,836
10/1995 $ 12,660 $ 12,588
10/1996 $ 13,338 $ 13,267
10/1997 $ 14,525 $ 14,436
10/1998 $ 15,892 $ 15,919
10/1999 $ 15,923 $ 15,813
10/2000 $ 17,084 $ 16,940
9/2001 $ 19,192 $ 19,052
9/2002 $ 20,427 $ 20,808
(1) Past performance does not guarantee future results and does not reflect the
deduction of taxes that a shareholder would pay on fund distributions or
redemption of fund shares. The principal value of an investment and
investment return will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
reflects voluntary fee waivers in effect. In the absence of such fee
waivers, total returns would be reduced. Index is for illustrative purposes
only and is not available for investment.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the Fund's maximum sales charge and
assumes reinvestment of all distributions at NAV.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 4.25% for Class A
shares, 1% for Class C shares, and the maximum contingent deferred sales
charge ("CDSC") for Class B and Class C shares for the relevant period.
Maximum CDSC for Class B shares is 5.00% and 1.00% for Class C shares.
Total returns assume reinvestment of all distributions at NAV.
On September 24, 2001, the Bond IMMDEX(TM) Fund became the successor by
merger to the Firstar Bond IMMDEX(TM) Fund, a series of Firstar Funds Inc.
Prior to the merger, the First American fund had no assets or liabilities.
Performance presented prior to September 24, 2001 represents that of the
Firstar Bond IMMDEX(TM) Fund.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index of Treasury securities, other securities issued or
guaranteed by the U.S. government or its agencies or instrumentalities,
including U.S. agency mortgage securities and investment-grade
corporate-debt securities, in each case with maturities of not less than
one year.
(4) The performance since inception for the index is calculated from the month
end following the inception of the class.
B-21
FIXED INCOME
Investment Objective: HIGH CURRENT INCOME CONSISTENT WITH LIMITED RISK TO
CAPITAL
The bond market enjoyed a generally favorable environment, and the First
American Fixed Income Fund (the "Fund") Class Y shares returned 6.04% for the
fiscal year ended September 30, 2002. (Class A shares were up 5.77% on net asset
value). By comparison, the Fund's benchmark, the Lehman U.S. Aggregate Bond
Index, generated a return of 8.60% over the same period*.
The fiscal year began on the heels of the tragedy of the terrorist attacks of
September 11, 2001. In the aftermath of that event, it appeared that investors
began to anticipate an economic recovery. Initially, that boosted the fortunes
of corporate bonds, which were among the market's best performers. The Fund's
heavy emphasis on corporate issues initially proved to be strategically
effective.
As the calendar turned to 2002, the environment changed. Numerous revelations of
corporate accounting irregularities began to take a toll on investor confidence,
and that was reflected in weakened performance of corporate debt securities. The
Fund was specifically hurt by its holdings in a number of companies directly
involved in the accounting issues, including Enron and Worldcom. However,
positions in investment-grade bonds issued by financial firms performed better
within the Fund. Eventually, the Fund's corporate bond position was reduced.
The Fund's mortgage-backed securities performed well in the first few months of
the fiscal year, but started to lag the performance of Treasury bonds as
interest rates came down again in 2002. In recent months, as these issues became
more attractively priced, the Fund's position in mortgage-backed issues was
increased. At the same time, Treasury holdings were reduced, with the
anticipation that interest rates on government-issued bonds are approaching a
low point.
The Fund has maintained a neutral stance in terms of interest-rate sensitivity.
As the fiscal year came to an end, yields on long-term bonds were significantly
higher than those of short-term securities. The difference narrowed a bit in the
closing months of the fiscal year, but it appears that there still may be
additional narrowing ahead. In general, it is anticipated that after an extended
downward trend, interest rates in general will begin to move higher in the
months ahead, assuming the U.S. economy improves. The Fund is likely to take a
bit more cautious approach in regard to its interest-rate structure as signs of
a change in the interest-rate environment become apparent.
ANNUALIZED PERFORMANCE(1)
AS OF SEPTEMBER 30, 2002
<Table>
<Caption>
SINCE INCEPTION(4)
--------------------------------------------------
1 YEAR 5 YEARS 10 YEARS 2/4/1994 8/15/1994 2/1/1999 9/24/2001
- ------------------------------------------------------------------------------------------------------------------------------
Class A NAV 5.77% 6.70% 6.48% -- -- -- --
Class A POP 1.32% 5.77% 6.02% -- -- -- --
Class B NAV 5.12% 5.95% -- -- 6.36% -- --
Class B POP 0.12% 5.63% -- -- 6.36% -- --
Class C NAV 5.02% -- -- -- -- 5.18% --
Class C POP 3.02% -- -- -- -- 4.91% --
Class S 5.77% -- -- -- -- -- 6.51%
Class Y 6.04% 6.97% -- 6.62% -- -- --
Lehman U.S. Aggregate Bond Index(3) 8.60% 7.83% 7.37% 7.49% 8.17% 7.98% 8.60%
</Table>
* Unlike mutual funds, index returns do not reflect any expenses, transaction
costs, or cash flow effects.
B-22
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2002
[CHART]
CLASS A
FIRST AMERICAN FIRST AMERICAN LEHMAN U.S.
FIXED INCOME FUND, FIXED INCOME FUND, AGGREGATE BOND
CLASS A NAV CLASS A POP INDEX(3)
- -------------------------------------------------------------------
9/1992 $ 10,000 $ 9,578 $ 10,000
9/1993 $ 10,920 $ 10,460 $ 10,998
9/1994 $ 10,602 $ 10,155 $ 10,643
9/1995 $ 11,957 $ 11,453 $ 12,140
9/1996 $ 12,512 $ 11,985 $ 12,734
9/1997 $ 13,545 $ 12,974 $ 13,971
9/1998 $ 15,211 $ 14,568 $ 15,580
9/1999 $ 14,804 $ 14,180 $ 15,523
9/2000 $ 17,708 $ 16,961 $ 18,759
9/2001 $ 18,730 $ 17,940 $ 20,371
9/2002
[CHART]
CLASS Y
FIRST AMERICAN LEHMAN U.S.
FIXED INCOME FUND, AGGREGATE BOND
CLASS Y INDEX(3)
- -----------------------------------------------
2/1994 $ 10,000 $ 10,000
9/1994 $ 9,677 $ 9,712
9/1995 $ 10,921 $ 11,078
9/1996 $ 11,457 $ 11,620
9/1997 $ 12,434 $ 12,752
9/1998 $ 14,009 $ 14,219
9/1999 $ 13,668 $ 14,165
9/2000 $ 14,568 $ 15,155
9/2001 $ 16,428 $ 17,119
9/2002 $ 17,419 $ 18,589
(1) Past performance does not guarantee future results and does not reflect the
deduction of taxes that a shareholder would pay on fund distributions or
redemption of fund shares. The principal value of an investment and
investment return will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
reflects voluntary fee waivers in effect. In the absence of such fee
waivers, total returns would be reduced. Index is for illustrative purposes
only and is not available for investment.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the Fund's maximum sales charge and
assume reinvestment of all distributions at NAV.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 4.25% for Class A
shares, 1% for Class C shares, and the maximum contingent deferred sales
charge ("CDSC") for Class B and Class C shares for the relevant period.
Maximum CDSC for Class B shares is 5.00% and 1.00% for Class C shares.
Total returns assume reinvestment of all distributions at NAV.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index comprised of the Lehman Government/Credit Bond Index,
the Lehman Mortgage Backed Securities Index, and the Lehman Asset Backed
Securities Index. The Lehman Government/Credit Bond Index is comprised of
Treasury securities, other securities issued or guaranteed by the U.S.
government or its agencies or instrumentalities, including U.S. agency
mortgage securities and investment grade corporate debt securities. The
Lehman Mortgage Backed Securities Index is comprised of the mortgage-backed
pass-through securities of Ginnie Mae, Fannie Mae, and Freddie Mac. The
Lehman Asset Backed Securities Index is comprised of debt securities rated
investment grade or higher that are backed by credit card, auto, and home
equity loans.
(4) The performance since inception for the index is calculated from the month
end following the inception of the class.
B-23
HIGH YIELD BOND
Investment Objective: HIGH CURRENT INCOME
With the U.S. economy proving to be surprisingly sluggish, the market for
high-yield bonds was generally unfavorable. In this challenging environment, the
First American High Yield Bond Fund (the "Fund") Class Y shares declined 6.33%
for the fiscal year ended September 30, 2002 (Class A shares were down 6.66% on
net asset value). The Fund's benchmark, the Lehman Corporate High Yield Index,
declined 2.29% during the same period*.
The fiscal year began in a favorable way for high-yield bonds. In the closing
months of 2001, the U.S. was bouncing back from the impact of the terrorist
attacks of September 11, and investors appeared encouraged by prospects for an
economic recovery. But, by January, a series of startling revelations about
corporate accounting scandals began to shake investor confidence. This had a
particularly negative impact on what are viewed as higher-risk securities,
including those of lower-rated bond issuers. However, confidence soon returned
to the market, and high-yield issues performed well again in March and April,
coinciding with more encouraging economic signals. But, once again, the market
reversed course and took a decidedly negative turn in the last five months of
the fiscal year.
Since the Fund just began operations in August 2001, the process to invest
initial assets of the portfolio was still underway as the fiscal year began due
to limited availability in the high-yield market in the fall of 2001. Because of
this, a portion of the Fund's assets was temporarily placed in investment-grade
bonds. As a result, the Fund missed some of the positive returns that the
high-yield market enjoyed in the early months of the period. Eventually, better
buying opportunities emerged, and the Fund became fully invested in low-grade
bonds.
A series of corporate accounting issues provided the Fund's biggest hurdle
during the year. Investments in bonds issued by troubled companies, such as
Global Crossing, Enron, and Adelphia, hurt performance. Positive performance was
generated by the Fund's heavy emphasis in consumer issues, including bonds from
gaming, health care, leisure, and restaurant companies.
The market for high-yield bonds should begin to improve if expectations of a
better economic environment become a reality. The high interest rates paid on
low-grade bonds look particularly attractive in the current environment where
rates have reached such low levels in other parts of the bond market. This
should create favorable potential for investors going forward.
ANNUALIZED PERFORMANCE(1)
AS OF SEPTEMBER 30, 2002
SINCE INCEPTION(4)
----------------------
1 YEAR 8/30/2001 9/24/2001
- -------------------------------------------------------------------------
Class A NAV -6.66% -11.85% --
Class A POP -10.6% -15.28% --
Class B NAV -7.26% -12.29% --
Class B POP -11.54% -16.01% --
Class C NAV -7.34% -12.38% --
Class C POP -9.07% -13.92% --
Class S -6.66% -8.31%
Class Y -6.33% -11.47% --
Lehman Corporate High Yield Index(3) -2.29% -8.21% -2.29%
* Unlike mutual funds, index returns do not reflect any expenses, transaction
costs, or cash flow effects.
B-24
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2002
[CHART]
CLASS A
FIRST AMERICAN HIGH FIRST AMERICAN HIGH LEHMAN CORPORATE
YIELD BOND FUND, YIELD BOND FUND, HIGH YIELD
CLASS A NAV CLASS A POP INDEX(3)
- ------------------------------------------------------------------------
8/2001 $ 10,000 $ 9,579 $ 10,000
9/2001 $ 9,339 $ 8,945 $ 9,328
9/2002 $ 8,721 $ 8,354 $ 9,114
[CHART]
CLASS Y
FIRST AMERICAN HIGH LEHMAN CORPORATE
YIELD BOND FUND, HIGH YIELD
CLASS Y INDEX(3)
- -----------------------------------------------------
8/2001 $ 10,000 $ 10,000
9/2001 $ 9,349 $ 9,328
9/2002 $ 8,762 $ 9,114
(1) Past performance does not guarantee future results and does not reflect the
deduction of taxes that a shareholder would pay on fund distributions or
redemption of fund shares. The principal value of an investment and
investment return will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. A significant
portion of the Fund's portfolio may consist of lower-rated debt
obligations, which are commonly called "high-yield" securities or "junk
bonds." High-yield securities generally have more volatile prices and carry
more risk to principal than investment-grade securities. These bonds are
almost always uncollateralized and subordinate to other debt than an issuer
may have outstanding. The Fund may also invest in foreign securities.
International investing involves risks not typically associated with
domestic investing, including risks of adverse currency fluctuations,
potential political and economic instability, different accounting
standards, limited liquidity, and volatile prices. Performance reflects
voluntary fee waivers in effect. In the absence of such fee waivers, total
returns would be reduced. Index is for illustrative purposes only and is
not available for investment.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the Fund's maximum sales charge and
assumes reinvestment of all distributions at NAV.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 4.25% for Class A
shares, 1% for Class C shares, and the maximum contingent deferred sales
charge ("CDSC") for Class B and Class C shares for the relevant period.
Maximum CDSC for Class B shares is 5.00% and 1.00% for Class C shares.
Total returns assume reinvestment of all distributions at NAV.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index that covers the universe of fixed-rate,
dollar-denominated, below-investment-grade debt with at least one year to
final maturity. Pay-in-kind bonds, Eurobonds, and emerging markets debt
securities are excluded, but SEC-registered Canadian and global bonds of
issuers in nonemerging countries are included. Original issue zeroes,
step-up coupon structures, and Rule 144-As are also included.
(4) The performance since inception for the index is calculated from the month
end following the inception of the class.
B-25
STRATEGIC INCOME
Investment Objective: HIGH CURRENT INCOME
The past year proved to be a mixed bag for the broad bond market despite a
generally favorable interest-rate environment. The First American Strategic
Income Fund (the "Fund") Class Y shares returned 3.44% for the fiscal year ended
September 30, 2002 (Class A shares rose 3.31% on net asset value), compared to
the Fund's benchmark, the Lehman U.S. Aggregate Bond Index, which returned 8.60%
for the same period*.
The Fund consists of three sub-portfolios representing different aspects of the
bond market. One part of the portfolio is dedicated to high-quality bonds
(primarily investment-grade issues), one part to domestic high-yield bonds
(primarily below investment grade), and a third part to international bonds
(subadvised by Federated Investors in New York). This Fund provides shareholders
with "built-in" diversification among these sectors.
The modest return achieved by the Fund over the fiscal year reflects in large
part a very difficult environment for corporate bonds, particularly among
low-grade debt issuers. In an environment where the economy continued to
struggle and equity markets were weak, investors stayed away from the
higher-risk, low-grade bond area. By contrast, higher-quality domestic bonds
enjoyed solid returns.
The fiscal year began on the heels of the tragedy of the terrorist attacks of
September 11, 2001. In the aftermath of that event, investors began to
anticipate an economic recovery. This led interest rates higher and boosted the
fortunes of domestic corporate bonds in the first months of the period. However,
the combination of increasing global tensions, ongoing terrorist concerns and
disturbing revelations of corporate accounting problems began to have an impact
on the market. U.S. economic performance, while positive, was seen as
disappointing. Corporations clearly had difficulty achieving their earnings
expectations, and interest rates again headed lower.
The Fund's high-quality domestic bond portfolio performed best throughout the
period. Treasury securities worked well for the Fund, particularly at times when
interest rates declined. Mortgage-backed securities also enjoyed solid
performance for extended periods during the fiscal year. While corporate bonds
performed well in the closing months of 2001, various problems, often tied to
corporate accounting issues, played havoc with this part of the market for much
of the rest of the fiscal year. Still, investors generally sought the refuge of
higher-quality investments as concerns about the economy and other matters came
to the forefront.
The international bond portfolio experienced two diverse periods during the
year. In the first six months, emerging market bonds, which represent the bulk
of this portfolio, performed well. These bonds provided both attractive yields
and solid price appreciation as interest rate trends were generally favorable.
For instance, the Brazilian bond market generated a return of 26% between
October 2001 and March 2002. However, serious political problems developed in
Brazil, and the impact reduced investor confidence throughout debt markets for
emerging nations. In fact, Brazil's market declined by 37% from April through
the end of September. Other Latin American markets such as Venezuela and Ecuador
suffered similar setbacks in the second half of the period. Bond markets in
Mexico, Russia, and the Philippines held up better, but still lagged the levels
achieved earlier in the period.
The market was even more challenging for the high-yield portion of the
portfolio. This part of the bond market performed well in the closing months of
2001, but increasing concerns related to the economy and high-profile accounting
scandals such as Enron and Global Crossing (two holdings in the Fund's
portfolio) resulted in a serious setback for the high-yield portfolio.
Fortunately, careful analysis helped the Fund avoid bonds from other less
attractive issuers. The market recovered some lost ground in March and April,
but the summer months proved to be particularly difficult. Once again, investors
lost faith in the direction of the economy and steered away from higher-risk
issues. As a result, low-grade bonds lost ground as the period came to a close,
and that had a negative impact on the overall performance of the Fund.
ANNUALIZED PERFORMANCE(1)
AS OF SEPTEMBER 30, 2002
SINCE INCEPTION(4)
----------------------------------------
1 YEAR 7/24/1998 2/1/1999 9/24/2001
- -------------------------------------------------------------------------------
Class A NAV 3.31% 2.35% -- --
Class A POP -1.18% 1.30% -- --
Class B NAV 2.46% 1.61% -- --
Class B POP -2.31% 1.25% -- --
Class C NAV 2.44% -- 2.26% --
Class C POP 0.53% -- 1.97% --
Class S 3.26% -- -- 2.96%
Class Y 3.44% 2.59% -- --
Lehman U.S. Aggregate
Bond Index(3) 8.60% 7.66% 7.98% 8.60%
* Unlike mutual funds, index returns do not reflect any expenses, transaction
costs, or cash flow effects.
B-26
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2002
[CHART]
CLASS A
FIRST AMERICAN FIRST AMERICAN LEHMAN U.S.
STRATEGIC INCOME FUND, STRATEGIC INCOME FUND, AGGREGATE BOND
CLASS A NAV CLASS A POP INDEX(3)
- --------------------------------------------------------------------------
7/1998 $ 10,000 $ 9,579 10000
9/1998 $ 9,385 $ 8,989 $ 10,401
9/1999 $ 9,922 $ 9,504 $ 10,362
9/2000 $ 10,473 $ 10,032 $ 11,086
9/2001 $ 10,682 $ 10,231 $ 12,523
9/2002 $ 11,022 $ 10,557 $ 13,600
[CHART]
CLASS Y
FIRST AMERICAN LEHMAN U.S.
STRATEGIC INCOME FUND, AGGREGATE BOND
CLASS Y INDEX(3)
- -------------------------------------------------
7/1998 $ 10,000 $ 10,000
9/1998 $ 9,388 $ 10,401
9/1999 $ 9,948 $ 10,362
9/2000 $ 10,538 $ 11,086
9/2001 $ 10,762 $ 12,523
9/2002 $ 11,132 $ 13,600
(1) Past performance does not guarantee future results and does not reflect the
deduction of taxes that a shareholder would pay on fund distributions or
redemption of fund shares. The principal value of an investment and
investment return will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. A significant
portion of the Fund's portfolio may consist of lower-rated debt
obligations, which are commonly called "high-yield" securities or "junk
bonds." High-yield securities generally have more volatile prices and carry
more risk to principal than investment-grade securities. The Fund may also
invest in foreign securities including emerging markets. International
investing involves risks not typically associated with domestic investing,
including risks of adverse currency fluctuations, potential political and
economic instability, different accounting standards, limited liquidity,
and volatile prices. The risks of international investing are particularly
significant in emerging markets. Performance reflects voluntary fee waivers
in effect. In the absence of such fee waivers, total returns would be
reduced. Index is for illustrative purposes only and is not available for
investment.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the Fund's maximum sales charge and
assumes reinvestment of all distributions at NAV.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 4.25% for Class A
shares, 1% for Class C shares, and the maximum contingent deferred sales
charge ("CDSC") for Class B and Class C shares for the relevant period.
Maximum CDSC for Class B shares is 5.00% and 1.00% for Class C shares.
Total returns assume reinvestment of all distributions at NAV.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index comprised of the Lehman Government/Credit Bond Index,
the Lehman Mortgage Backed Securities Index, and the Lehman Asset Backed
Securities Index. The Lehman Government/Credit Bond Index is comprised of
Treasury securities, other securities issued or guaranteed by the U.S.
government or its agencies or instrumentalities, including U.S. agency
mortgage securities and investment-grade corporate debt securities. The
Lehman Mortgage Backed Securities Index is comprised of the mortgage-backed
pass-through securities of Ginnie Mae, Fannie Mae, and Freddie Mac. The
Lehman Asset Backed Securities Index is comprised of debt securities rated
investment grade or higher that are backed by credit card, auto, and home
equity loans.
(4) The performance since inception for the index is calculated from the month
end following the inception of the class.
B-27
APPENDIX C
FINANCIAL HIGHLIGHTS
The financial highlights tables are intended to help you understand each Fund's
financial performance for the past 5 years or, if shorter, the period of
operations for the Fund or class of shares. Some of this information reflects
financial results for a single Fund share. Total returns in the tables represent
the rate that you would have earned or lost on an investment in the Fund,
assuming you reinvested all of your dividends and distributions. This
information has been audited by Ernst & Young LLP, independent auditors, whose
reports, along with the Funds' financial statements, are included in the Funds'
Annual Reports, which are available upon request.
LARGE CAP GROWTH FUND
<Table>
<Caption>
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS
VALUE NET GAINS OR FROM NET DISTRIBUTIONS
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM
OF PERIOD INCOME (LOSS) INVESTMENTS INCOME CAPITAL GAINS
- --------------------------------------------------------------------------------------------------------------------
LARGE CAP GROWTH FUND (7)
Class A
2002 $ 9.27 $ (0.01) $ (2.50) $ -- $ --
2001 (3) 16.36 (0.05) (6.59) -- (0.45)
2000 (8) (9) 17.01 (0.02) (0.63) -- --
Class B
2002 $ 8.90 $ (0.02) $ (2.44) $ -- $ --
2001 15.81 (0.13) (6.33) -- (0.45)
2000 (8) 14.57 (0.06) 1.30 -- --
1999 11.91 (0.02) 2.96 (0.01) (0.27)
1998 10.47 0.01 2.04 (0.02) (0.59)
Class C
2002 $ 9.06 $ (0.03) $ (2.46) $ -- $ --
2001 (5) 8.84 -- 0.22 -- --
Class S
2002 $ 9.27 $ (0.03) $ (2.48) $ -- $ --
2001 (10) 15.15 (0.05) (5.83) -- --
Class Y
2002 $ 9.38 $ (0.04) $ (2.48) $ -- $ --
2001 (3) 16.52 (0.03) (6.66) -- (0.45)
2000 (8) 15.18 (0.02) 1.36 -- --
1999 12.39 0.04 3.07 (0.04) (0.28)
1998 10.91 0.04 2.09 (0.04) (0.61)
- --------------------------------------------------------------------------------------------------------------------
RATIO OF NET
NET ASSETS RATIO OF INVESTMENT
VALUE NET ASSETS EXPENSES TO INCOME (LOSS)
END OF TOTAL END OF AVERAGE TO AVERAGE
PERIOD RETURN (11) PERIOD (000) NET ASSETS NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------
LARGE CAP GROWTH FUND (7)
Class A
2002 $ 6.76 (27.08)% $ 52,419 1.15% (0.20)%
2001 (3) 9.27 (41.57) 8,598 1.39 (0.55)
2000 (8) (9) 16.36 (3.82) 1,177 1.40 (0.75)
Class B
2002 $ 6.44 (27.64)% $ 36,546 1.90% (1.00)%
2001 8.90 (41.97) 46,103 2.07 (1.19)
2000 (8) 15.81 8.50 100,689 1.38 (0.40)
1999 14.57 25.26 90,468 1.36 (0.08)
1998 11.91 20.76 66,478 1.34 0.12
Class C
2002 $ 6.57 (27.48)% $ 9,652 1.90% (0.91)%
2001 (5) 9.06 2.58 -- -- --
Class S
2002 $ 6.76 (27.08)% $ 9,020 1.15% (0.25)%
2001 (10) 9.27 (38.82) 11,881 1.39 (0.55)
Class Y
2002 $ 6.86 (26.87)% $ 436,199 0.90% 0.05%
2001 (3) 9.38 (41.46) 131,961 1.14 (0.27)
2000 (8) 16.52 8.83 239,576 1.13 (0.15)
1999 15.18 25.61 186,177 1.11 0.17
1998 12.39 20.91 121,475 1.09 0.37
- ---------------------------------------------------------------------------------------------------------------------
[WIDE TABLE CONTINUED FROM ABOVE]
<Caption>
RATIO OF RATIO OF NET
EXPENSES TO INVESTMENT
AVERAGE INCOME (LOSS)
NET ASSETS TO AVERAGE NET PORTFOLIO
(EXCLUDING ASSETS (EXCLUDING TURNOVER
WAIVERS) WAIVERS) RATE
- -----------------------------------------------------------------------------------------
LARGE CAP GROWTH FUND (7)
Class A
2002 1.26% (0.31) 62%
2001 (3) 1.56 (0.72) 38
2000 (8) (9) 1.49 (0.84) 35
Class B
2002 2.01% (1.11)% 62%
2001 2.19 (1.31) 38
2000 (8) 1.48 (0.50) 35
1999 1.52 (0.24) 28
1998 1.54 (0.08) 48
Class C
2002 2.01% (1.02)% 62%
2001 (5) -- -- 38
Class S
2002 1.26% (0.36)% 62%
2001 (10) 1.60 (0.76) 38
Class Y
2002 1.01% (0.06)% 62%
2001 (3) 1.26 (0.39) 38
2000 (8) 1.23 (0.25) 35
1999 1.27 0.01 28
1998 1.29 0.17 48
- -----------------------------------------------------------------------------------------
</Table>
(1) The financial highlights for the Large Cap Core Fund as set forth herein
include the historical financial highlights of the Firstar Large Cap Core
Equity Fund. The assets of the Firstar Fund were acquired by the First
American Large Cap Core Fund on September 24, 2001. In connection with
such acquisition, (i) Class A shares of the Firstar Large Cap Core Fund
were exchanged for Class A shares of the First American Large Cap Core
Fund, (ii) Firstar Class B shares were exchanged for Class B shares of the
First American Fund, (iii) Firstar Class Y shares were exchanged for Class
S shares of the First American Fund, and (iv) Firstar Institutional Class
shares were exchanged for Class Y shares of the First American Fund.
(2) Per share data calculated using average shares outstanding method.
(3) Effective in 2001, the Fund's fiscal year end was changed from October 31
to September 30. All ratios for the period have been annualized, except
total return and portfolio turnover.
(4) Class of shares has been offered since March 1, 1999. All ratios for the
period have been annualized, except total return and portfolio turnover.
(5) Class of shares has been offered since September 24, 2001. All ratios for
the period have been annualized, except total return and portfolio
turnover.
(6) Class of shares has been offered since November 27, 2000. All ratios for
the period have been annualized, except total return and portfolio
turnover.
(7) The financial highlights for the Large Cap Growth Fund as set forth herein
include the historical financial highlights of the Firstar Large Cap
Growth Fund. The assets of the Firstar Fund were acquired by the First
American Capital Growth Fund on September 24, 2001. In connection with
such acquisition, (i) Class A shares of the Firstar Large Cap Growth Fund
were exchanged for Class A shares of the First American Capital Growth
Fund, (ii) Firstar Class B shares were exchanged for Class B shares of the
First American Fund, (iii) Firstar Class Y shares were exchanged for Class
S shares of the First American Fund, and (iv) Firstar Institutional Class
shares were exchanged for Class Y shares of the First American Fund.
(8) Effective in 2000, the Fund's fiscal year end was changed from November 30
to October 31.
(9) Class of shares has been offered since March 31, 2000. All ratios for the
period have been annualized, except total return and portfolio turnover.
(10) Class of shares has been offered since December 11, 2000. All ratios for
the period have been annualized, except total return and portfolio
turnover.
(11) Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
C-2
HEALTH SCIENCES FUND
<Table>
<Caption>
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS DISTRIBUTIONS
VALUE NET GAINS OR FROM NET DISTRIBUTIONS FROM
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM RETURN OF
OF PERIOD INCOME (LOSS) INVESTMENTS INCOME CAPITAL GAINS CAPITAL
- ------------------------------------------------------------------------------------------------------------------------
HEALTH SCIENCES FUND
Class A
2002 $ 9.84 $ (0.05) $ (1.88) $ -- $ -- $ --
2001 (1) 13.34 (0.03) (2.10) -- (1.37) --
2000 8.24 (0.02) 5.12 -- -- --
1999 7.82 0.01 0.46 (0.01) (0.04) --
1998 12.05 0.01 (2.78) -- (1.46) --
Class B
2002 $ 9.40 $ (0.11) $ (1.79) $ -- $ -- $ --
2001 (1) 12.89 (0.11) (2.01) -- (1.37) --
2000 8.02 (0.08) 4.95 -- -- --
1999 7.65 0.01 0.40 -- (0.04) --
1998 11.90 (0.02) (2.77) -- (1.46) --
Class C
2002 $ 9.73 $ (0.13) $ (1.84) $ -- $ -- $ --
2001 (1) 13.29 (0.11) (2.08) -- (1.37) --
2000 (2) 9.76 (0.03) 3.56 -- -- --
Class S
2002 $ 9.84 $ (0.02) $ (1.92) $ -- $ -- $ --
2001 (1) (3) 9.06 -- 0.78 -- -- --
Class Y
2002 $ 9.93 $ (0.02) $ (1.91) $ -- $ -- $ --
2001 (1) 13.42 -- (2.12) -- (1.37) --
2000 8.28 -- 5.14 -- -- --
1999 7.84 0.04 0.48 (0.04) (0.04) --
1998 12.08 0.03 (2.78) (0.03) (1.46) --
- ------------------------------------------------------------------------------------------------------------------------
<Caption>
RATIO OF
RATIO OF NET EXPENSES TO
NET ASSET RATIO OF INVESTMENT AVERAGE
VALUE NET ASSETS EXPENSES TO INCOME (LOSS) NET ASSETS
END OF TOTAL END OF AVERAGE TO AVERAGE (EXCLUDING
PERIOD RETURN (4) PERIOD (000) NET ASSETS NET ASSETS WAIVERS)
- ----------------------------------------------------------------------------------------------------------------------
HEALTH SCIENCES FUND
Class A
2002 $ 7.91 (19.61)% $ 5,235 1.23% (0.50)% 1.75%
2001 (1) 9.84 (17.35) 6,514 1.15 (0.28) 1.42
2000 13.34 61.89 6,645 1.17 (0.27) 1.46
1999 8.24 6.08 1,383 1.16 0.11 1.30
1998 7.82 (25.24) 2,017 1.15 0.04 1.20
Class B
2002 $ 7.50 (20.21)% $ 2,821 1.98% (1.25)% 2.50%
2001 (1) 9.40 (17.99) 3,496 1.90 (1.04) 2.17
2000 12.89 60.72 4,221 1.92 (1.02) 2.21
1999 8.02 5.37 1,029 1.92 (0.64) 2.05
1998 7.65 (25.80) 645 1.90 (0.73) 1.95
Class C
2002 $ 7.76 (20.25)% $ 3,815 1.98% (1.24)% 2.50%
2001 (1) 9.73 (17.92) 5,329 1.90 (1.04) 2.17
2000 (2) 13.29 36.17 4,347 1.92 (1.02) 2.21
Class S
2002 $ 7.90 (19.72)% $ 32 1.23% (0.72)% 1.75%
2001 (1) (3) 9.84 8.61 -- -- -- --
Class Y
2002 $ 8.00 (19.44)% $ 12,421 0.98% (0.24)% 1.50%
2001 (1) 9.93 (17.15) 17,141 0.90 (0.04) 1.17
2000 13.42 62.10 19,175 0.92 (0.02) 1.21
1999 8.28 6.59 12,192 0.90 0.38 1.05
1998 7.84 (25.10) 21,977 0.90 0.27 0.95
- ----------------------------------------------------------------------------------------------------------------------
[WIDE TABLE CONTINUED FROM ABOVE]
RATIO OF NET
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET PORTFOLIO
ASSETS (EXCLUDING TURNOVER
WAIVERS) RATE
- ------------------------------------------------------------
HEALTH SCIENCES FUND
Class A
2002 (1.02)% 98%
2001 (1) (0.55) 103
2000 (0.56) 104
1999 (0.03) 53
1998 (0.01) 45
Class B
2002 (1.77)% 98%
2001 (1) (1.31) 103
2000 (1.31) 104
1999 (0.77) 53
1998 (0.78) 45
Class C
2002 (1.76)% 98%
2001 (1) (1.31) 103
2000 (2) (1.31) 104
Class S
2002 (1.24)% 98%
2001 (1) (3) -- 103
Class Y
2002 (0.76)% 98%
2001 (1) (0.31) 103
2000 (0.31) 104
1999 0.23 53
1998 0.22 45
- ------------------------------------------------------------
(1) Per share data calculated using average shares outstanding method.
(2) Commenced operations on February 1, 2000. All ratios for the period have
been annualized, except total return and portfolio turnover.
(3) Class of shares has been offered since September 24, 2001. All ratios for
the period have been annualized, except total return and portfolio
turnover.
(4) Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
C-3
LARGE CAP CORE FUND
<Table>
<Caption>
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS
VALUE NET GAINS OR FROM NET DISTRIBUTIONS
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM
OF PERIOD INCOME (LOSS) INVESTMENTS INCOME CAPITAL GAINS
- --------------------------------------------------------------------------------------------------------------------
LARGE CAP CORE FUND (1)
Class A (2)
2002 $ 24.44 $ -- $ (5.23) $ (0.05) $ --
2001 (3) 43.33 (0.01) (14.00) -- (4.88)
2000 37.96 (0.15) 7.55 -- (2.03)
1999 35.72 (0.12) 6.42 (0.02) (4.04)
1998 35.27 (0.02) 5.66 (0.02) (5.17)
1997 30.32 (0.05) 6.30 -- (1.30)
Class B (2)
2002 $ 23.94 $ (0.18) $ (5.09) $ (0.03) $ --
2001 (3) 42.80 (0.22) (13.76) -- (4.88)
2000 37.78 (0.47) 7.52 -- (2.03)
1999 (4) 36.92 (0.29) 1.15 -- --
Class C (2)
2002 $ 24.44 $ (0.18) $ (5.19) $ (0.04) $ --
2001 (5) 23.75 -- 0.69 -- --
Class S (2)
2002 $ 24.45 $ -- $ (5.23) $ (0.05) $ --
2001 (6) 35.53 (0.01) (11.07) -- --
Class Y (2)
2002 $ 24.93 $ 0.06 $ (5.33) $ (0.07) $ --
2001 (3) 44.00 0.06 (14.25) -- (4.88)
2000 38.42 (0.04) 7.65 -- (2.03)
1999 36.05 (0.02) 6.47 (0.04) (4.04)
1998 35.48 0.07 5.70 (0.03) (5.17)
1997 30.43 0.04 6.31 -- (1.30)
RATIO OF NET
NET ASSETS RATIO OF INVESTMENT
VALUE NET ASSETS EXPENSES TO INCOME (LOSS)
END OF TOTAL END OF AVERAGE TO AVERAGE
PERIOD RETURN (11) PERIOD (000) NET ASSETS NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------
LARGE CAP CORE FUND (1)
Class A (2)
2002 $ 19.16 (21.46)% $ 24,647 1.15% (0.02)%
2001 (3) 24.44 (35.83) 34,330 1.20 (0.04)
2000 43.33 19.92 51,232 1.20 (0.35)
1999 37.96 17.92 47,238 1.19 (0.31)
1998 35.72 18.58 38,213 1.14 (0.05)
Class B (2)
2002 $ 18.64 (22.06)% $ 2,928 1.90% (0.75)%
2001 (3) 23.94 (36.28) 2,954 1.93 (0.79)
2000 42.80 19.06 1,483 1.95 (1.10)
1999 (4) 37.78 2.33 722 1.96 (1.17)
Class C (2)
2002 $ 19.03 (22.03)% $ 476 1.90% (0.73)%
2001 (5) 24.44 2.95 -- -- --
Class S (2)
2002 $ 19.17 (21.45)% $ 2,376 1.15% --
2001 (6) 24.45 (31.16) 2,802 1.18 (0.03)
Class Y (2)
2002 $ 19.59 (21.23)% $ 255,311 0.90% 0.24%
2001 (3) 24.93 (35.70) 316,213 0.94 0.20
2000 44.00 20.24 339,166 0.95 (0.10)
1999 38.42 18.18 306,832 0.94 (0.06)
1998 36.05 18.89 197,798 0.89 0.20
- ---------------------------------------------------------------------------------------------------------------------
[WIDE TABLE CONTINUED FROM ABOVE]
<Caption>
RATIO OF RATIO OF NET
EXPENSES TO INVESTMENT
AVERAGE INCOME (LOSS)
NET ASSETS TO AVERAGE NET PORTFOLIO
(EXCLUDING ASSETS (EXCLUDING TURNOVER
WAIVERS) WAIVERS) RATE
- -----------------------------------------------------------------------------------------
LARGE CAP CORE FUND (1)
Class A (2)
2002 1.22% (0.09)% 43%
2001 (3) 1.24 (0.08) 40
2000 1.21 (0.36) 60
1999 1.20 (0.32) 59
1998 1.21 (0.12) 52
Class B (2)
2002 1.97% (0.82)% 43%
2001 (3) 1.97 (0.83) 40
2000 1.96 (1.11) 60
1999 (4) 1.97 (1.18) 59
Class C (2)
2002 1.97% (0.80)% 43%
2001 (5) -- -- 40
Class S (2)
2002 1.22% (0.07)% 43%
2001 (6) 1.22 (0.07) 40
Class Y (2)
2002 0.97% 0.17% 43%
2001 (3) 0.98 0.16 40
2000 0.96 (0.11) 60
1999 0.95 (0.07) 59
1998 0.96 0.13 52
- -----------------------------------------------------------------------------------------
</Table>
(1) The financial highlights for the Large Cap Core Fund as set forth herein
include the historical financial highlights of the Firstar Large Cap Core
Equity Fund. The assets of the Firstar Fund were acquired by the First
American Large Cap Core Fund on September 24, 2001. In connection with
such acquisition, (i) Class A shares of the Firstar Large Cap Core Fund
were exchanged for Class A shares of the First American Large Cap Core
Fund, (ii) Firstar Class B shares were exchanged for Class B shares of the
First American Fund, (iii) Firstar Class Y shares were exchanged for Class
S shares of the First American Fund, and (iv) Firstar Institutional Class
shares were exchanged for Class Y shares of the First American Fund.
(2) Per share data calculated using average shares outstanding method.
(3) Effective in 2001, the Fund's fiscal year end was changed from October 31
to September 30. All ratios for the period have been annualized, except
total return and portfolio turnover.
(4) Class of shares has been offered since March 1, 1999. All ratios for the
period have been annualized, except total return and portfolio turnover.
(5) Class of shares has been offered since September 24, 2001. All ratios for
the period have been annualized, except total return and portfolio
turnover.
(6) Class of shares has been offered since November 27, 2000. All ratios for
the period have been annualized, except total return and portfolio
turnover.
(7) The financial highlights for the Large Cap Growth Fund as set forth herein
include the historical financial highlights of the Firstar Large Cap
Growth Fund. The assets of the Firstar Fund were acquired by the First
American Capital Growth Fund on September 24, 2001. In connection with
such acquisition, (i) Class A shares of the Firstar Large Cap Growth Fund
were exchanged for Class A shares of the First American Capital Growth
Fund, (ii) Firstar Class B shares were exchanged for Class B shares of the
First American Fund, (iii) Firstar Class Y shares were exchanged for Class
S shares of the First American Fund, and (iv) Firstar Institutional Class
shares were exchanged for Class Y shares of the First American Fund.
(8) Effective in 2000, the Fund's fiscal year end was changed from November 30
to October 31.
(9) Class of shares has been offered since March 31, 2000. All ratios for the
period have been annualized, except total return and portfolio turnover.
(10) Class of shares has been offered since December 11, 2000. All ratios for
the period have been annualized, except total return and portfolio
turnover.
(11) Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
C-4
MID CAP GROWTH FUND
<Table>
<Caption>
REALIZED AND
NET ASSET UNREALIZED NET ASSET
VALUE NET GAINS OR DISTRIBUTIONS VALUE
BEGINNING INVESTMENT (LOSSES) ON FROM END OF
OF PERIOD INCOME (LOSS) INVESTMENTS CAPITAL GAINS PERIOD
- -------------------------------------------------------------------------------------------------------------------
MID CAP GROWTH FUND (7)
Class A
2002 $ 5.63 $ (0.12) $ (1.16) $ -- $ 4.35
2001 (2) 18.88 (0.04) (6.36) (6.85) 5.63
2000 12.87 (0.12) 8.80 (2.67) 18.88
1999 11.80 (0.07) 3.40 (2.26) 12.87
1998 15.25 (0.09) (1.80) (1.56) 11.80
Class B
2002 $ 5.41 $ (0.11) $ (1.16) $ -- $ 4.14
2001 (2) 18.51 (0.10) (6.15) (6.85) 5.41
2000 12.75 (0.16) 8.59 (2.67) 18.51
1999 11.78 (0.10) 3.33 (2.26) 12.75
1998 (8) 13.86 (0.01) (2.07) -- 11.78
Class C
2002 $ 5.46 $ (0.13) $ (1.15) $ -- $ 4.18
2001 (2) 18.61 (0.09) (6.21) (6.85) 5.46
2000 12.80 (0.14) 8.62 (2.67) 18.61
1999 (9) 12.43 (0.06) 0.43 -- 12.80
Class S
2002 $ 5.63 $ (0.04) $ (1.24) $ -- $ 4.35
2001 (2) (5) 5.53 -- 0.10 -- 5.63
Class Y
2002 $ 5.79 $ (0.03) $ (1.28) $ -- $ 4.48
2001 (2) 19.14 (0.02) (6.48) (6.85) 5.79
2000 12.99 (0.08) 8.90 (2.67) 19.14
1999 11.87 (0.03) 3.41 (2.26) 12.99
1998 15.29 (0.04) (1.82) (1.56) 11.87
- -------------------------------------------------------------------------------------------------------------------
<Caption>
RATIO OF
RATIO OF NET EXPENSES TO
RATIO OF INVESTMENT AVERAGE
NET ASSETS EXPENSES TO INCOME (LOSS) NET ASSETS
TOTAL END OF AVERAGE TO AVERAGE (EXCLUDING
RETURN (10) PERIOD (000) NET ASSETS NET ASSETS WAIVERS)
- ------------------------------------------------------------------------------------------------------------------------
MID CAP GROWTH FUND (7)
Class A
2002 (22.74)% $ 58,896 1.20% (0.89)% 1.32%
2001 (2) (49.38) 102,837 1.15 (0.40) 1.19
2000 76.44 264,570 1.15 (0.70) 1.17
1999 31.69 165,072 1.14 (0.48) 1.19
1998 (13.05) 188,763 1.18 (0.60) 1.34
Class B
2002 (23.47)% $ 2,578 1.95% (1.64)% 2.07%
2001 (2) (49.65) 3,518 1.90 (1.17) 1.94
2000 75.14 4,812 1.90 (1.45) 1.92
1999 30.66 360 1.89 (1.26) 1.98
1998 (8) (15.01) 17 1.87 (1.12) 1.87
Class C
2002 (23.44)% $ 3,742 1.95% (1.64)% 2.07%
2001 (2) (49.73) 6,246 1.91 (1.17) 1.95
2000 75.10 5,971 1.90 (1.45) 1.92
1999 (9) 3.06 466 1.89 1.27 1.98
Class S
2002 (22.74)% $ 13 1.20% (0.90)% 1.32%
2001 (2) (5) 1.81 -- -- -- --
Class Y
2002 (22.63)% $ 157,688 0.95% (0.64)% 1.07%
2001 (2) (49.22) 227,035 0.90 (0.17) 0.94
2000 76.88 361,567 0.90 (0.46) 0.92
1999 31.97 211,527 0.89 (0.25) 0.96
1998 (12.79) 73,356 0.87 (0.27) 0.87
- ------------------------------------------------------------------------------------------------------------------------
[WIDE TABLE CONTINUED FROM ABOVE]
RATIO OF NET
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET PORTFOLIO
ASSETS (EXCLUDING TURNOVER
WAIVERS) RATE
- ---------------------------------------------------------------------------
MID CAP GROWTH FUND (7)
Class A
2002 (1.01)% 266%
2001 (2) (0.44) 264
2000 (0.72) 217
1999 (0.53) 94
1998 (0.76) 39
Class B
2002 (1.76)% 266%
2001 (2) (1.21) 264
2000 (1.47) 217
1999 (1.35) 94
1998 (8) (1.12) 39
Class C
2002 (1.76)% 266%
2001 (2) (1.21) 264
2000 (1.47) 217
1999 (9) 1.18 94
Class S
2002 (1.02)% 266%
2001 (2) (5) -- 264
Class Y
2002 (0.76)% 266%
2001 (2) (0.21) 264
2000 (0.48) 217
1999 (0.32) 94
1998 (0.27) 39
- ---------------------------------------------------------------------------
(1) The financial highlights for the Mid Cap Core Fund as set forth herein
include the historical financial highlights of the Firstar Mid Cap Core
Equity Fund. The assets of the Firstar Fund were acquired by the First
American Mid Cap Core Fund on September 24, 2001. In connection with such
acquisition, (i) Class A shares of the Firstar Mid Cap Core Equity Fund
were exchanged for Class A shares of the First American Mid Cap Core Fund,
(ii) Firstar Class B shares were exchanged for Class B shares of the First
American Fund, (iii) Firstar Class Y shares were exchanged for Class S
shares of the First American Fund, and (iv) Firstar Institutional Class
shares were exchanged for Class Y shares of the First American Fund.
(2) Per share data calculated using average shares outstanding method.
(3) Effective in 2001, the Fund's fiscal year end was changed from October 31
to September 30. All ratios for the period have been annualized, except
total return and portfolio turnover.
(4) Class of shares has been offered since March 1, 1999. All ratios for the
period have been annualized, except total return and portfolio turnover.
(5) Class of shares has been offered since September 24, 2001. All ratios for
the period have been annualized, except total return and portfolio
turnover.
(6) Class of shares has been offered since December 11, 2000. All ratios for
the period have been annualized, except total return and portfolio
turnover.
(7) The financial highlights for the Mid Cap Growth Fund as set forth herein
include the financial highlights of the Piper Emerging Growth Fund Class A
shares and Class Y shares. The assets of the Piper Emerging Growth Fund
were acquired by Mid Cap Growth Fund on August 7, 1998. In connection with
such acquisition, (i) Class A shares of the Piper Emerging Growth Fund
were exchanged for Class A shares of the Mid Cap Growth Fund, and (ii)
Class Y shares of the Piper Emerging Growth Fund were exchanged for Class
Y shares of the Mid Cap Growth Fund.
(8) Class of shares has been offered since August 7,1998. All ratios for the
period have been annualized, except total return and portfolio turnover.
(9) Class of shares has been offered since February 1, 1999. All ratios for
the period have been annualized, except total return and portfolio
turnover.
(10) Total return does not include sales charges. Total return would have been
lower had certain expenses not been waived.
C-5
MID CAP CORE FUND
<Table>
<Caption>
REALIZED AND
NET ASSET UNREALIZED NET ASSET
VALUE NET GAINS OR DISTRIBUTIONS VALUE
BEGINNING INVESTMENT (LOSSES) ON FROM END OF
OF PERIOD INCOME (LOSS) INVESTMENTS CAPITAL GAINS PERIOD
- -------------------------------------------------------------------------------------------------------------------
MID CAP CORE FUND (1)
Class A
2002 $ 28.33 $ (0.11) $ (1.77) $ -- $ 26.45
2001 (2) (3) 54.63 (0.06) (8.40) (17.84) 28.33
2000 (2) 37.80 (0.18) 17.80 (0.79) 54.63
1999 (2) 37.59 (0.08) 0.60 (0.31) 37.80
1998 (2) 44.36 (0.24) (2.07) (4.46) 37.59
1997 41.38 (0.20) 8.44 -- (5.26)
Class B
2002 $ 27.59 $ (0.18) $ (1.85) $ -- $ 25.56
2001 (2) (3) 53.97 (0.29) (8.25) (17.84) 27.59
2000 (2) 37.63 (0.53) 17.66 (0.79) 53.97
1999 (2) (4) 37.57 (0.23) 0.29 -- 37.63
Class C
2002 $ 28.33 $ (0.10) $ (1.94) $ -- $ 26.29
2001 (2) (5) 27.40 -- 0.93 -- 28.33
Class S
2002 $ 28.29 $ (0.07) $ (1.79) $ -- $ 26.43
2001 (2) (6) 35.75 (0.06) (7.40) -- 28.29
Class Y
2002 $ 29.11 $ (0.05) $ (1.81) $ -- $ 27.25
2001 (2) (3) 55.52 0.02 (8.59) (17.84) 29.11
2000 (2) 38.32 (0.05) 18.04 (0.79) 55.52
1999 (2) 38.01 0.02 0.60 (0.31) 38.32
1998 (2) 44.70 (0.14) (2.09) (4.46) 38.01
1997 41.58 (0.11) 8.49 -- (5.26)
<Caption>
RATIO OF
RATIO OF NET EXPENSES TO
RATIO OF INVESTMENT AVERAGE
NET ASSETS EXPENSES TO INCOME (LOSS) NET ASSETS
TOTAL END OF AVERAGE TO AVERAGE (EXCLUDING
RETURN (10) PERIOD (000) NET ASSETS NET ASSETS WAIVERS)
- ------------------------------------------------------------------------------------------------------------------------
MID CAP CORE FUND (1)
Class A
2002 (6.64)% $ 75,002 1.20% (0.34)% 1.26%
2001 (2) (3) (20.00) 82,043 1.20 (0.19) 1.22
2000 (2) 47.23 108,326 1.20 (0.38) 1.22
1999 (2) 1.31 95,758 1.19 (0.21) 1.21
1998 (2) (5.91) 136,146 1.13 (0.57) 1.20
Class B
2002 (7.36)% $ 4,227 1.95% (1.08)% 2.01%
2001 (2) (3) (20.60) 2,606 1.94 (0.95) 1.97
2000 (2) 46.13 666 1.95 (1.13) 1.97
1999 (2) (4) 0.16 126 1.95 (0.89) 1.97
Class C
2002 (7.20)% $ 1,136 1.95% (1.07)% 2.01%
2001 (2) (5) 3.39 -- -- -- --
Class S
2002 (6.58)% $ 5,869 1.20% (0.33)% 1.26%
2001 (2) (6) (20.87) 1,484 1.19 (0.24) 1.23
Class Y
2002 (6.39)% $ 477,210 0.95% (0.08)% 1.01%
2001 (2) (3) (19.84) 406,349 0.95 0.06 0.97
2000 (2) 47.56 435,613 0.95 (0.13) 0.97
1999 (2) 1.56 359,947 0.94 0.04 0.96
1998 (2) (5.66) 464,858 0.88 (0.32) 0.95
[WIDE TABLE CONTINUED FROM ABOVE]
RATIO OF NET
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET PORTFOLIO
ASSETS (EXCLUDING TURNOVER
WAIVERS) RATE
- ---------------------------------------------------------------------------
MID CAP CORE FUND (1)
Class A
2002 (0.40)% 162%
2001 (2) (3) (0.21) 204
2000 (2) (0.40) 205
1999 (2) (0.23) 140
1998 (2) (0.64) 77
Class B
2002 (1.14)% 162%
2001 (2) (3) (0.98) 204
2000 (2) (1.15) 205
1999 (2) (4) (0.91) 140
Class C
2002 (1.13)% 162%
2001 (2) (5) -- 204
Class S
2002 (0.39)% 162%
2001 (2) (6) (0.28) 204
Class Y
2002 (0.14)% 162%
2001 (2) (3) 0.04 204
2000 (2) (0.15) 205
1999 (2) 0.02 140
1998 (2) (0.39) 77
(1) The financial highlights for the Mid Cap Core Fund as set forth herein
include the historical financial highlights of the Firstar Mid Cap Core
Equity Fund. The assets of the Firstar Fund were acquired by the First
American Mid Cap Core Fund on September 24, 2001. In connection with such
acquisition, (i) Class A shares of the Firstar Mid Cap Core Equity Fund
were exchanged for Class A shares of the First American Mid Cap Core Fund,
(ii) Firstar Class B shares were exchanged for Class B shares of the First
American Fund, (iii) Firstar Class Y shares were exchanged for Class S
shares of the First American Fund, and (iv) Firstar Institutional Class
shares were exchanged for Class Y shares of the First American Fund.
(2) Per share data calculated using average shares outstanding method.
(3) Effective in 2001, the Fund's fiscal year end was changed from October 31
to September 30. All ratios for the period have been annualized, except
total return and portfolio turnover.
(4) Class of shares has been offered since March 1, 1999. All ratios for the
period have been annualized, except total return and portfolio turnover.
(5) Class of shares has been offered since September 24, 2001. All ratios for
the period have been annualized, except total return and portfolio
turnover.
(6) Class of shares has been offered since December 11, 2000. All ratios for
the period have been annualized, except total return and portfolio
turnover.
(7) The financial highlights for the Mid Cap Growth Fund as set forth herein
include the financial highlights of the Piper Emerging Growth Fund Class A
shares and Class Y shares. The assets of the Piper Emerging Growth Fund
were acquired by Mid Cap Growth Fund on August 7, 1998. In connection with
such acquisition, (i) Class A shares of the Piper Emerging Growth Fund
were exchanged for Class A shares of the Mid Cap Growth Fund, and (ii)
Class Y shares of the Piper Emerging Growth Fund were exchanged for Class
Y shares of the Mid Cap Growth Fund.
(8) Class of shares has been offered since August 7,1998. All ratios for the
period have been annualized, except total return and portfolio turnover.
(9) Class of shares has been offered since February 1, 1999. All ratios for
the period have been annualized, except total return and portfolio
turnover.
(10) Total return does not include sales charges. Total return would have been
lower had certain expenses not been waived.
C-6
SMALL CAP GROWTH FUND
<Table>
<Caption>
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS DISTRIBUTIONS
VALUE NET GAINS OR FROM NET DISTRIBUTIONS FROM
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM RETURN OF
OF PERIOD INCOME (LOSS) INVESTMENTS INCOME CAPITAL GAINS CAPITAL (6)
- ------------------------------------------------------------------------------------------------------------------------
SMALL CAP GROWTH FUND (1)
Class A
2002 (2) $ 11.28 $ (0.09) $ (2.40) $ -- $ -- $ --
2001 (2) 24.47 (0.08) (8.55) -- (4.46) (0.10)
2000 16.77 (0.12) 9.89 -- (2.07) --
1999 11.90 (0.06) 4.95 -- (0.02) --
1998 17.41 (0.09) (2.67) -- (2.64) (0.11)
Class B
2002 (2) $ 10.44 $ (0.16) $ (2.21) $ -- $ -- $ --
2001 (2) 23.17 (0.19) (7.98) -- (4.47) (0.09)
2000 16.07 (0.23) 9.40 -- (2.07) --
1999 11.50 (0.14) 4.73 -- (0.02) --
1998 (3) 13.74 (0.02) (2.22) -- -- --
Class C
2002 (2) $ 11.02 $ (0.17) $ (2.33) $ -- $ -- $ --
2001 (2) 24.17 (0.20) (8.39) -- (4.49) (0.07)
2000 16.68 (0.13) 9.69 -- (2.07) --
1999 (4) 15.48 (0.08) 1.28 -- -- --
Class S
2002 (2) $ 11.28 $ (0.07) $ (2.42) $ -- $ -- $ --
2001 (2) (5) 11.17 -- 0.11 -- -- --
Class Y
2002 (2) $ 11.50 $ (0.06) $ (2.47) $ -- $ -- $ --
2001 (2) 24.79 (0.04) (8.69) -- (4.49) (0.07)
2000 16.92 (0.06) 10.00 -- (2.07) --
1999 11.98 (0.02) 4.98 -- (0.02) --
1998 (3) 14.29 -- (2.31) -- -- --
- ------------------------------------------------------------------------------------------------------------------------
<Caption>
RATIO OF
RATIO OF NET EXPENSES TO
NET ASSET RATIO OF INVESTMENT AVERAGE
VALUE NET ASSETS EXPENSES TO INCOME (LOSS) NET ASSETS
END OF TOTAL END OF AVERAGE TO AVERAGE (EXCLUDING
PERIOD RETURN(7) PERIOD (000) NET ASSETS NET ASSETS WAIVERS)
- -------------------------------------------------------------------------------------------------------------------------
SMALL CAP GROWTH FUND (1)
Class A
2002 (2) $ 8.79 (22.07)% $ 22,397 1.23% (0.78)% 1.29%
2001 (2) 11.28 (41.71) 31,913 1.15 (0.51) 1.15
2000 24.47 62.07 57,148 1.14 (0.57) 1.14
1999 16.77 41.11 32,203 1.14 (0.39) 1.15
1998 11.90 (18.66) 28,252 1.29 (0.61) 1.43
Class B
2002 (2) $ 8.07 (22.70)% $ 3,933 1.98% (1.53)% 2.04%
2001 (2) 10.44 (42.14) 5,009 1.90 (1.27) 1.90
2000 23.17 60.95 8,440 1.89 (1.30) 1.89
1999 16.07 39.92 2,217 1.90 (1.16) 1.91
1998 (3) 11.50 (16.30) 1,104 1.90 (1.20) 1.90
Class C
2002 (2) $ 8.52 (22.69)% $ 4,659 1.98% (1.54)% 2.04%
2001 (2) 11.02 (42.14) 6,378 1.90 (1.28) 1.90
2000 24.17 61.06 8,205 1.89 (1.28) 1.89
1999 (4) 16.68 7.75 309 1.90 (1.18) 1.91
Class S
2002 (2) $ 8.79 (22.07)% $ 32 1.23% (0.67)% 1.29%
2001 (2) (5) 11.28 0.98 -- -- -- --
Class Y
2002 (2) $ 8.97 (22.00)% $ 205,253 0.98% (0.54)% 1.04%
2001 (2) 11.50 (41.55) 330,917 0.90 (0.28) 0.90
2000 24.79 62.58 478,975 0.89 (0.30) 0.89
1999 16.92 41.42 248,679 0.90 (0.16) 0.91
1998 (3) 11.98 (16.17) 113,874 0.90 (0.20) 0.90
- -------------------------------------------------------------------------------------------------------------------------
[WIDE TABLE CONTINUED FROM ABOVE]
RATIO OF NET
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET PORTFOLIO
ASSETS (EXCLUDING TURNOVER
WAIVERS) RATE
- ---------------------------------------------------------------
SMALL CAP GROWTH FUND (1)
Class A
2002 (2) (0.84)% 286%
2001 (2) (0.51) 265
2000 (0.57) 230
1999 (0.40) 110
1998 (0.75) 92
Class B
2002 (2) (1.59)% 286%
2001 (2) (1.27) 265
2000 (1.30) 230
1999 (1.17) 110
1998 (3) (1.20) 92
Class C
2002 (2) (1.60)% 286%
2001 (2) (1.28) 265
2000 (1.28) 230
1999 (4) (1.19) 110
Class S
2002 (2) (0.73)% 286%
2001 (2) (5) -- 265
Class Y
2002 (2) (0.60)% 286%
2001 (2) (0.28) 265
2000 (0.30) 230
1999 (0.17) 110
1998 (3) (0.20) 92
- ---------------------------------------------------------------
(1) Historical per share data amounts have been adjusted to reflect the
conversion ratios utilized for the reorganization of the FAIF Small Cap
Growth Fund and Piper Small Company Growth Fund that occurred on July 31,
1998. Piper Small Company Growth Fund is the financial reporting survivor.
Therefore, the financial highlights for the Small Cap Growth Fund represent
the financial highlights information of the former Piper Small Company
Growth Fund. On July 31, 1998, the Fund's advisor changed from Piper
Capital Management, Incorporated to U.S. Bank National Association.
(2) Per share data calculated using average shares outstanding method.
(3) Class of shares has been offered since July 31, 1998. There is no
historical information for these classes of Piper Small Company Growth Fund
prior to the reorganization on July 31, 1998. All ratios for the period
have been annualized, except total return and portfolio turnover.
(4) Class of shares has been offered since February 1, 1999. All ratios for the
period have been annualized, except total return and portfolio turnover.
(5) Class of shares has been offered since September 24, 2001. All ratios for
the period have been annualized, except total return and portfolio
turnover.
(6) Distributions from return of capital for the Small Cap Value Fund were less
than $0.01 per share for the fiscal year ended September 30, 2002.
(7) Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
C-7
SMALL CAP CORE FUND
<Table>
<Caption>
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS DISTRIBUTIONS
VALUE NET GAINS OR FROM NET DISTRIBUTIONS FROM
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM RETURN OF
OF PERIOD INCOME (LOSS) INVESTMENTS INCOME CAPITAL GAINS CAPITAL (10)
- --------------------------------------------------------------------------------------------------------------------
SMALL CAP CORE FUND (4)
Class A
2002 (2) $ 11.97 $ (0.10) $ (0.30) $ -- $ (0.89) $ --
2001 (1) (2) 17.60 (0.03) (1.89) -- (3.71) --
2000 (2) (5) 13.84 (0.10) 4.13 (0.01) (0.26) --
1999 (2) 11.86 (0.07) 2.10 -- (0.05) --
1998 15.03 (0.06) (1.89) -- (1.22) --
1997 13.40 (0.05) 2.50 -- (0.82) --
Class B
2002 (2) $ 11.28 $ (0.19) $ (0.25) $ -- $ (0.89) $ --
2001 (1) (2) 16.90 (0.12) (1.79) -- (3.71) --
2000 (2) (5) 13.38 (0.13) 3.92 -- (0.27) --
1999 (2) 11.53 (0.16) 2.06 -- (0.05) --
1998 14.74 (0.14) (1.85) -- (1.22) --
1997 13.24 (0.13) 2.45 -- (0.82) --
Class C
2002 (2) $ 11.97 $ (0.20) $ (0.26) $ -- $ (0.89) $ --
2001 (2) (3) 11.72 -- 0.25 -- -- --
Class S
2002 (2) $ 11.94 $ (0.10) $ (0.29) $ -- $ (0.89) $ --
2001 (1) (2) 17.55 (0.01) (1.89) -- (3.71) --
2000 (2) (5) 13.80 (0.01) 4.03 (0.01) (0.26) --
1999 (2) 11.82 (0.07) 2.10 -- (0.05) --
1998 14.98 (0.07) (1.87) -- (1.22) --
1997 13.36 (0.04) 2.48 -- (0.82) --
Class Y
2002 (2) $ 12.26 $ (0.07) $ (0.30) $ -- $ (0.89) $ --
2001 (1) (2) 17.92 -- (1.95) -- (3.71) --
2000 (2) (5) 14.07 0.05 4.10 (0.03) (0.27) --
1999 (2) 12.02 (0.03) 2.13 -- (0.05) --
1998 15.17 (0.02) (1.91) -- (1.22) --
1997 13.49 0.01 2.50 (0.01) (0.82) --
- --------------------------------------------------------------------------------------------------------------------
<Caption>
RATIO OF
RATIO OF NET EXPENSES TO
NET ASSET RATIO OF INVESTMENT AVERAGE
VALUE NET ASSETS EXPENSES TO INCOME (LOSS) NET ASSETS
END OF TOTAL END OF AVERAGE TO AVERAGE (EXCLUDING
PERIOD RETURN (6) PERIOD (000) NET ASSETS NET ASSETS WAIVERS)
- ------------------------------------------------------------------------------------------------------------------------
SMALL CAP CORE FUND (4)
Class A
2002 (2) $ 10.68 (4.56)% $ 33,586 1.21% (0.81)% 1.25%
2001 (1) (2) 11.97 (12.63) 17,351 1.19 (0.24) 1.22
2000 (2) (5) 17.60 29.65 9,538 1.28 (0.01) 1.39
1999 (2) 13.84 17.21 8,885 1.26 (0.57) 1.36
1998 11.86 (14.19) 11,601 1.25 (0.45) 1.35
Class B
2002 (2) $ 9.95 (5.23)% $ 4,613 1.96% (1.56)% 2.00%
2001 (1) (2) 11.28 (13.21) 1,979 1.93 (0.99) 1.97
2000 (2) (5) 16.90 28.81 1,331 1.98 (0.71) 2.09
1999 (2) 13.38 16.57 1,094 1.96 (1.27) 2.06
1998 11.53 (14.79) 1,286 1.95 (1.15) 2.05
Class C
2002 (2) $ 10.62 (5.09)% $ 3,096 1.96% (1.61)% 2.02%
2001 (2) (3) 11.97 2.13 -- -- -- --
Class S
2002 (2) $ 10.66 (4.48)% $ 7,640 1.21% (0.80)% 1.25%
2001 (1) (2) 11.94 (12.52) 3,721 1.07 (0.05) 1.14
2000 (2) (5) 17.55 29.67 4,442 1.28 (0.01) 1.39
1999 (2) 13.80 17.27 2,448 1.26 (0.59) 1.36
1998 11.82 (14.17) 25,037 1.25 (0.45) 1.35
Class Y
2002 (2) $ 11.00 (4.19)% $ 403,027 0.96% (0.55)% 1.00%
2001 (1) (2) 12.26 (12.49) 291,706 0.93 0.01 0.96
2000 (2) (5) 17.92 30.01 134,617 0.98 0.29 1.39
1999 (2) 14.07 17.57 111,643 0.96 (0.26) 1.36
1998 12.02 (13.90) 129,591 0.95 (0.16) 1.35
- ------------------------------------------------------------------------------------------------------------------------
[WIDE TABLE CONTINUED FROM ABOVE]
RATIO OF NET
INVESTMENT
(LOSS)
TO AVERAGE NET PORTFOLIO
ASSETS (EXCLUDING TURNOVER
WAIVERS) RATE
- ------------------------------------------------------------
SMALL CAP CORE FUND (4)
Class A
2002 (2) (0.85)% 171%
2001 (1) (2) (0.27) 204
2000 (2) (5) (0.12) 91
1999 (2) (0.67) 72
1998 (0.55) 70
Class B
2002 (2) (1.60)% 171%
2001 (1) (2) (1.03) 204
2000 (2) (5) (0.82) 91
1999 (2) (1.37) 72
1998 (1.25) 70
Class C
2002 (2) (1.67)% 171%
2001 (2) (3) -- 204
Class S
2002 (2) (0.84)% 171%
2001 (1) (2) (0.12) 204
2000 (2) (5) (0.12) 91
1999 (2) (0.69) 72
1998 (0.55) 70
Class Y
2002 (2) (0.59)% 171%
2001 (1) (2) (0.02) 204
2000 (2) (5) (0.12) 91
1999 (2) (0.66) 72
1998 (0.56) 70
- ------------------------------------------------------------
(1) Effective in 2001, the Fund's fiscal year end was changed from October 31
to September 30. All ratios for the period have been annualized, except
total return and potfolio turnover.
(2) Per share data calculated using average shares outstanding method.
(3) Class of shares has been offered since September 24, 2001. All ratios for
the period have been annualized, except total return and portfolio
turnover.
(4) The financial highlights for the Small Cap Core Fund as set forth herein
include the historical financial highlights of the Firstar Small Cap Core
Equity Fund. The assets of the Firstar Fund were acquired by the First
American Small Cap Core Fund on September 24, 2001. In connection with
such acquisition, (i) Class A shares of the Firstar Small Cap Core Fund
were exchanged for Class A shares of the First American Fund, (ii) Firstar
Class B shares were exchanged for Class B shares of the First American
Fund, (iii) Firstar Class Y shares were exchanged for Class S shares of
the First American Fund, and (iv) Firstar Institutional Class shares were
exchanged for Class Y shares of the First American Fund.
(5) Effective in 2000, the Fund's fiscal year end was changed from November 30
to October 31. All ratios for the period have been annualized, except
total return and portfolio turnover.
(6) Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
(7) Distributions from return of capital for the Small Cap Core Fund were less
than $0.01 per share for the fiscal year ended September 30, 2002.
C-8
EMERGING MARKETS FUND
<Table>
<Caption>
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS
VALUE NET GAINS OR FROM NET DISTRIBUTIONS
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM
OF PERIOD INCOME (LOSS) INVESTMENTS INCOME CAPITAL GAINS
- -------------------------------------------------------------------------------------------------------
EMERGING MARKETS FUND (1)
Class A
2002 (2) $ 5.87 $ (0.04) $ 0.39 $ -- $ --
2001 (2) 8.50 0.02 (2.65) -- --
2000 (2) 6.77 (0.06) 1.79 -- --
1999 (2) 5.61 (0.04) 1.20 -- --
1998 10.96 (0.15) (5.18) (0.02) --
Class B
2002 (2) $ 5.73 $ (0.09) $ 0.38 $ -- $ --
2001 (2) 8.37 (0.03) (2.61) -- --
2000 (2) 6.72 (0.11) 1.76 -- --
1999 (2) 5.60 (0.08) 1.20 -- --
1998 (3) 7.27 -- (1.67) -- --
Class C (2)
2002 $ 5.80 $ (0.09) $ 0.39 $ -- $ --
2001 8.46 -- (2.66) -- --
2000 (4) 9.96 (0.06) (1.44) -- --
Class S (2)
2002 $ 5.87 $ 0.01 $ 0.33 $ (0.02) $ --
2001 (5) 5.72 -- 0.15 -- --
Class Y
2002 (2) $ 5.92 $ (0.02) $ 0.38 $ (0.02) $ --
2001 (2) 8.55 0.06 (2.69) -- --
2000 (2) 6.80 (0.04) 1.79 -- --
1999 (2) 5.62 (0.02) 1.20 -- --
1998 (3) 7.27 0.01 (1.66) -- --
<Caption>
RATIO OF
RATIO OF NET EXPENSES TO
NET ASSET RATIO OF INVESTMENT AVERAGE
VALUE NET ASSETS EXPENSES TO INCOME (LOSS) NET ASSETS
END OF TOTAL END OF AVERAGE TO AVERAGE (EXCLUDING
PERIOD RETURN (9) PERIOD (000) NET ASSETS NET ASSETS WAIVERS)
- ----------------------------------------------------------------------------------------------------------------------
EMERGING MARKETS FUND (1)
Class A
2002 (2) $ 6.22 5.96% $ 2,487 1.70% (0.53)% 1.89%
2001 (2) 5.87 (30.94) 3,244 1.70 0.26 1.92
2000 (2) 8.50 25.55 4,338 1.70 (0.70) 1.89
1999 (2) 6.77 20.68 4,551 1.70 (0.54) 2.02
1998 5.61 (48.91) 5,384 1.96 (1.09) 3.43
Class B
2002 (2) $ 6.02 5.06% $ 252 2.45% (1.24)% 2.64%
2001 (2) 5.73 (31.54) 173 2.45 (0.37) 2.64
2000 (2) 8.37 24.55 107 2.45 (1.21) 2.66
1999 (2) 6.72 20.00 13 2.45 (1.19) 2.72
1998 (3) 5.60 (22.97) 1 2.46 (0.43) 4.30
Class C (2)
2002 $ 6.10 5.17% $ 90 2.45% (1.24)% 2.64%
2001 5.80 (31.44) 90 2.45 0.02 2.70
2000 (4) 8.46 (15.06) 4 2.45 (0.99) 2.64
Class S (2)
2002 $ 6.19 5.77% $ 11 1.70% 0.20% 1.89%
2001 (5) 5.87 2.62 -- -- -- --
Class Y
2002 (2) $ 6.26 6.10% $ 46,006 1.45% (0.28)% 1.64%
2001 (2) 5.92 (30.84) 40,282 1.45 0.88 1.67
2000 (2) 8.55 25.74 55,753 1.45 (0.42) 1.64
1999 (2) 6.80 21.00 40,255 1.45 (0.35) 1.73
1998 (3) 5.62 (22.70) 7,444 1.46 0.83 3.30
[WIDE TABLE CONTINUED FROM ABOVE]
RATIO OF NET
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET PORTFOLIO
ASSETS (EXCLUDING TURNOVER
WAIVERS) RATE
- ---------------------------------------------------------------
EMERGING MARKETS FUND (1)
Class A
2002 (2) (0.72)% 138%
2001 (2) 0.04 132
2000 (2) (0.89) 149
1999 (2) (0.86) 138
1998 (2.56) 48
Class B
2002 (2) (1.43)% 138%
2001 (2) (0.56) 132
2000 (2) (1.42) 149
1999 (2) (1.46) 138
1998 (3) (2.27) 48
Class C (2)
2002 (1.43)% 138%
2001 (0.23) 132
2000 (4) (1.18) 149
Class S (2)
2002 0.01% 138%
2001 (5) -- 132
Class Y
2002 (2) (0.47)% 138%
2001 (2) 0.66 132
2000 (2) (0.61) 149
1999 (2) (0.63) 138
1998 (3) (1.01) 48
(1) The financial highlights for Emerging Markets Fund as set forth herein
include the historical financial highlights of the Piper Emerging Markets
Growth Fund Class A shares. The assets of the Piper Emerging Markets Growth
Fund were acquired by Emerging Markets Fund on August 7, 1998. In
connection with such acquisition, Class A shares of the Piper Emerging
Markets Growth Fund were exchanged for Class A shares of the Emerging
Markets Fund. On August 7, 1998, the Fund's advisor changed from Piper
Capital Management Incorporated to U.S. Bank National Association.
(2) Per share data calculated using average shares outstanding method.
(3) Class of shares has been offered since August 10, 1998. All ratios for the
period have been annualized, except total return and portfolio turnover.
(4) Commenced operations February 1, 2000. All ratios for the period have been
annualized, except total return and portfolio turnover.
(5) Class of shares has been offered since September 24, 2001. All ratios for
the period have been annualized, except total return and portfolio
turnover.
(6) The financial highlights for the International Fund as set forth herein
include the historical financial highlights of the Firstar International
Growth Fund. The assets of the Firstar Fund were acquired by the First
American International Fund on September 24, 2001. In connection with such
acquisition, (i) Class A shares of the Firstar International Growth Fund
were exchanged for Class A shares of the First American International Fund,
(ii) Firstar Class B shares were exchanged for Class B shares of the First
American Fund, (iii) Firstar Class Y shares were exchanged for Class S
shares of the First American Fund, and (iv) Firstar Institutional Class
shares were exchanged for Class Y shares of the First American Fund.
Historical per share amounts have been adjusted to reflect the conversion
ratios utilized for the merger of the International Fund and Firstar
International Growth Fund. Firstar International Growth Fund is the
accounting survivor.
(7) Effective in 2001, the Fund's fiscal year end was changed from October 31
to September 30. All ratios for the period have been annualized, except
total return and portfolio turnover.
(8) Effective in 2000, the Fund's fiscal year end was changed from November 30
to October 31. All ratios for the period have been annualized, except total
return and portfolio turnover.
(9) Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
C-9
INTERNATIONAL FUND
<Table>
<Caption>
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS
VALUE NET GAINS OR FROM NET DISTRIBUTIONS
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM
OF PERIOD INCOME (LOSS) INVESTMENTS INCOME CAPITAL GAINS
- -------------------------------------------------------------------------------------------------------
INTERNATIONAL FUND (6)
Class A
2002 (2) $ 8.96 $ -- $ (1.63) $ -- $ --
2001 (2) (7) 13.96 0.10 (3.63) (0.10) (1.37)
2000 (2) (8) 15.94 (0.03) (0.42) (0.10) (1.43)
1999 12.42 -- 4.26 (0.04) (0.70)
1998 11.22 0.01 1.66 (0.07) (0.40)
1997 11.28 (.02) 0.30 (0.25) (0.29)
Class B
2002 (2) $ 8.45 $ (0.06) $ (1.54) $ -- $ --
2001 (2) (7) 13.28 0.01 (3.43) (0.07) (1.34)
2000 (2) (8) 15.27 (0.10) (0.42) (0.07) (1.40)
1999 11.97 (0.09) 4.09 (0.01) (0.69)
1998 10.87 (0.08) 1.60 (0.02) (0.40)
1997 10.99 (0.08) 0.28 (0.03) (0.29)
Class C (2)
2002 $ 8.75 $ (0.06) $ (1.60) $ -- $ --
2001 (5) 8.31 0.01 0.43 -- --
Class S
2002 (2) $ 8.96 $ 0.01 $ (1.66) $ -- $ --
2001 (2) (7) 13.97 (0.04) (3.50) (0.10) (1.37)
2000 (2) (8) 15.95 (0.03) (0.42) (0.10) (1.43)
1999 12.43 (0.01) 4.27 (0.04) (0.70)
1998 11.23 -- 1.67 (0.07) (0.40)
1997 11.29 (0.03) 0.31 (0.06) (0.29)
Class Y
2002 (2) $ 9.03 $ 0.03 $ (1.66) $ -- $ --
2001 (2) (7) 14.03 0.07 (3.61) (0.11) (1.35)
2000 (2) (8) 15.97 0.01 (0.42) (0.12) (1.41)
1999 12.42 0.06 4.25 (0.06) (0.70)
1998 11.21 0.04 1.67 (0.10) (0.40)
1997 11.24 0.01 0.31 (0.06) (0.29)
- -------------------------------------------------------------------------------------------------------
<Caption>
RATIO OF
RATIO OF NET EXPENSES TO
NET ASSET RATIO OF INVESTMENT AVERAGE
VALUE NET ASSETS EXPENSES TO INCOME (LOSS) NET ASSETS
END OF TOTAL END OF AVERAGE TO AVERAGE (EXCLUDING
PERIOD RETURN (9) PERIOD (000) NET ASSETS NET ASSETS WAIVERS)
- ----------------------------------------------------------------------------------------------------------------------
INTERNATIONAL FUND (6)
Class A
2002 (2) $ 7.33 (18.19)% $ 37,232 1.60% 0.04% 1.66%
2001 (2) (7) 8.96 (28.00) 64,907 1.49 1.02 1.59
2000 (2) (8) 13.96 (3.59) 3,591 1.58 (0.26) 1.76
1999 15.94 36.62 3,939 1.56 (0.01) 1.75
1998 12.42 15.33 3,154 1.58 0.02 1.75
Class B
2002 (2) $ 6.85 (18.94)% $ 7,459 2.35% (0.68)% 2.41%
2001 (2) (7) 8.45 (28.57) 10,857 2.17 0.06 2.27
2000 (2) (8) 13.28 (4.22) 732 2.28 (0.96) 2.46
1999 15.27 35.65 781 2.26 (0.71) 2.45
1998 11.97 14.48 624 2.28 (0.70) 2.45
Class C (2)
2002 $ 7.09 (18.97)% $ 11,027 2.35% (0.71)% 2.41%
2001 (5) 8.75 5.29 17,806 1.48 4.15 1.48
Class S
2002 (2) $ 7.31 (18.42)% $ 10,817 1.60% 0.16% 1.66%
2001 (2) (7) 8.96 (28.03) 9,461 1.46 (0.33) 1.61
2000 (2) (8) 13.97 (3.59) 16,373 1.58 (0.26) 1.76
1999 15.95 36.61 11,307 1.56 -- 1.75
1998 12.43 15.37 8,058 1.58 0.01 1.75
Class Y
2002 (2) $ 7.40 (18.05)% $ 540,495 1.35% 0.36% 1.41%
2001 (2) (7) 9.03 (27.93) 661,886 1.23 0.67 1.36
2000 (2) (8) 14.03 (3.27) 122,329 1.28 0.04 1.76
1999 15.97 36.98 92,778 1.26 0.28 1.75
1998 12.42 15.73 60,647 1.28 0.34 1.75
- ----------------------------------------------------------------------------------------------------------------------
[WIDE TABLE CONTINUED FROM ABOVE]
RATIO OF NET
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET PORTFOLIO
ASSETS (EXCLUDING TURNOVER
WAIVERS) RATE
- ---------------------------------------------------------------
INTERNATIONAL FUND (6)
Class A
2002 (2) (0.02)% 72%
2001 (2) (7) 0.92 72
2000 (2) (8) (0.44) 90
1999 (0.20) 94
1998 (0.15) 89
Class B
2002 (2) (0.74)% 72%
2001 (2) (7) (0.04) 72
2000 (2) (8) (1.14) 90
1999 (0.90) 94
1998 (0.87) 89
Class C (2)
2002 (0.77)% 72%
2001 (5) 4.15 72
Class S
2002 (2) 0.10% 72%
2001 (2) (7) (0.48) 72
2000 (2) (8) (0.44) 90
1999 (0.19) 94
1998 (0.16) 89
Class Y
2002 (2) 0.30% 72%
2001 (2) (7) 0.54 72
2000 (2) (8) (0.44) 90
1999 (0.21) 94
1998 (0.13) 89
- ---------------------------------------------------------------
(1) The financial highlights for Emerging Markets Fund as set forth herein
include the historical financial highlights of the Piper Emerging Markets
Growth Fund Class A shares. The assets of the Piper Emerging Markets Growth
Fund were acquired by Emerging Markets Fund on August 7, 1998. In
connection with such acquisition, Class A shares of the Piper Emerging
Markets Growth Fund were exchanged for Class A shares of the Emerging
Markets Fund. On August 7, 1998, the Fund's advisor changed from Piper
Capital Management Incorporated to U.S. Bank National Association.
(2) Per share data calculated using average shares outstanding method.
(3) Class of shares has been offered since August 10, 1998. All ratios for the
period have been annualized, except total return and portfolio turnover.
(4) Commenced operations February 1, 2000. All ratios for the period have been
annualized, except total return and portfolio turnover.
(5) Class of shares has been offered since September 24, 2001. All ratios for
the period have been annualized, except total return and portfolio
turnover.
(6) The financial highlights for the International Fund as set forth herein
include the historical financial highlights of the Firstar International
Growth Fund. The assets of the Firstar Fund were acquired by the First
American International Fund on September 24, 2001. In connection with such
acquisition, (i) Class A shares of the Firstar International Growth Fund
were exchanged for Class A shares of the First American International Fund,
(ii) Firstar Class B shares were exchanged for Class B shares of the First
American Fund, (iii) Firstar Class Y shares were exchanged for Class S
shares of the First American Fund, and (iv) Firstar Institutional Class
shares were exchanged for Class Y shares of the First American Fund.
Historical per share amounts have been adjusted to reflect the conversion
ratios utilized for the merger of the International Fund and Firstar
International Growth Fund. Firstar International Growth Fund is the
accounting survivor.
(7) Effective in 2001, the Fund's fiscal year end was changed from October 31
to September 30. All ratios for the period have been annualized, except
total return and portfolio turnover.
(8) Effective in 2000, the Fund's fiscal year end was changed from November 30
to October 31. All ratios for the period have been annualized, except total
return and portfolio turnover.
(9) Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
C-10
BOND IMMDEX(TM) FUND
<Table>
<Caption>
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS
VALUE NET GAINS FROM NET DISTRIBUTIONS
BEGINNING INVESTMENT OR (LOSSES) INVESTMENT FROM CAPITAL
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS
- -----------------------------------------------------------------------------------------------------------
BOND IMMDEX(TM) FUND(1)
Class A
2002 $ 29.15 $ 1.63 $ 0.08 $ (1.59) $ (0.06)
2001(2)(3) 27.49 1.51 1.73 (1.47) (0.11)
2000(2)(4) 27.36 1.71 0.13 (1.71) --
1999(2)(4) 29.01 1.64 (1.66) (1.63) --
1998(4) 28.16 1.64 0.85 (1.64) --
1997(2)(4) 27.54 1.66 0.64 (1.68) --
Class B
2002 $ 29.13 $ 1.43 $ 0.06 $ (1.38) $ (0.06)
2001(2)(3) 27.49 1.32 1.72 (1.29) (0.11)
2000(4) 27.36 1.53 0.13 (1.53) --
1999(2)(4)(5) 28.34 0.92 (0.91) (0.99) --
Class C
2002 $ 29.15 $ 1.43 $ 0.06 $ (1.42) $ (0.06)
2001(2)(6) 28.94 0.07 0.14 -- --
Class S
2002 $ 29.15 $ 1.64 $ 0.07 $ (1.59) $ (0.06)
2001(2)(7) 27.88 1.31 1.29 (1.33) --
Class Y
2002 $ 29.17 $ 1.70 $ 0.08 $ (1.66) $ (0.06)
2001(2)(3) 27.51 1.58 1.72 (1.53) (0.11)
2000(4) 27.37 1.94 0.13 (1.93) --
1999(4) 29.02 1.70 (1.65) (1.70) --
1998(4) 28.16 1.72 0.85 (1.71) --
1997(4) 27.55 1.75 0.61 (1.75) --
<Caption>
RATIO OF
RATIO OF NET EXPENSES
NET ASSET RATIO OF INVESTMENT AVERAGE
VALUE NET ASSETS EXPENSES TO INCOME TO NET ASSETS
END OF TOTAL END OF AVERAGE AVERAGE (EXCLUDING
PERIOD RETURN(8) PERIOD(000) NET ASSETS NET ASSETS WAIVERS)
- ---------------------------------------------------------------------------------------------------------------------
BOND IMMDEX(TM) FUND(1)
Class A
2002 $ 29.21 6.18% $ 87,096 0.73% 5.72% 0.83%
2001(2)(3) 29.15 12.09 87,775 0.73 5.82 0.76
2000(2)(4) 27.49 6.99 82,131 0.74 6.30 0.74
1999(2)(4) 27.36 (0.05) 95,635 0.72 5.80 0.74
1998(4) 29.01 9.11 95,301 0.67 5.77 0.74
1997(2)(4) 28.16 8.68 64,144 0.67 6.08 0.74
Class B
2002 $ 29.18 5.39% $ 14,592 1.48% 5.03% 1.58%
2001(2)(3) 29.13 11.32 8,505 1.48 5.02 1.52
2000(4) 27.49 6.22 2,689 1.49 5.55 1.49
1999(2)(4)(5) 27.36 0.04 1,869 1.49 5.06 1.49
Class C
2002 $ 29.16 5.37% $ 1,919 1.48% 5.23% 1.58%
2001(2)(6) 29.15 0.69 46,666 0.41 5.06 0.48
Class S
2002 $ 29.21 6.20% $ 18,179 0.72% 5.78% 0.82%
2001(2)(7) 29.15 9.56 10,330 0.73 5.64 0.79
Class Y
2002 $ 29.23 6.44% $ 710,922 0.48% 5.98% 0.58%
2001(2)(3) 29.17 12.33 645,134 0.48 6.06 0.51
2000(4) 27.51 7.29 477,455 0.49 6.55 0.49
1999(4) 27.37 0.20 421,897 0.47 6.05 0.48
1998(4) 29.02 9.41 471,425 0.42 6.02 0.49
1997(4) 28.16 8.90 408,018 0.42 6.33 0.49
[WIDE TABLE CONTINUED FROM ABOVE
RATIO OF NET
INVESTMENT
INCOME
TO AVERAGE NET PORTFOLIO
ASSETS (EXCLUDING TURNOVER
WAIVERS) RATE
- -------------------------------------------------------------------
BOND IMMDEX(TM) FUND(1)
Class A
2002 5.62% 46%
2001(2)(3) 5.79 16
2000(2)(4) 6.30 25
1999(2)(4) 5.78 57
1998(4) 5.70 20
1997(2)(4) 6.01 35
Class B
2002 4.93% 46%
2001(2)(3) 4.98 16
2000(4) 5.55 25
1999(2)(4)(5) 5.06 57
Class C
2002 5.13% 46%
2001(2)(6) 4.99 16
Class S
2002 5.68% 46%
2001(2)(7) 5.58 16
Class Y
2002 5.88% 46%
2001(2)(3) 6.03 16
2000(4) 6.55 25
1999(4) 6.04 57
1998(4) 5.95 20
1997(4) 6.26 35
(1) The financial highlights for the Bond IMMDEX(TM) Fund as set forth herein
include the historical financial highlights of the Firstar Bond IMMDEX(TM)
Fund Class A shares, Class B shares, Class Y shares, and Class I shares.
The assets of the Firstar Bond IMMDEX(TM) Fund were acquired by Bond
IMMDEX(TM) Fund on September 24, 2001. In connection with such acquisition,
Class A shares, Class B shares, Class Y shares, and Class I shares of the
Firstar Bond IMMDEX(TM) Fund were exchanged for Class A shares, Class B
shares, Class S shares, and Class Y shares of Bond IMMDEX(TM) Fund,
respectively.
(2) Per share data calculated using average shares outstanding method.
(3) Effective in 2001, the Fund's fiscal year end was changed to September 30
from October 31.
(4) For the fiscal year ended October 31.
(5) Class of shares has been offered since March 1, 1999. All ratios for the
period have been annualized, except total return and portfolio turnover.
(6) Class of shares has been offered since September 24, 2001. All ratios for
the period have been annualized, except total return and portfolio
turnover.
(7) Class of shares has been offered since December 11, 2000. All ratios for
the period have been annualized, except total return and portfolio
turnover.
(8) Total returns do not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
C-11
FIXED INCOME FUND
<Table>
<Caption>
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS
VALUE NET GAINS FROM NET DISTRIBUTIONS RETURN
BEGINNING INVESTMENT OR (LOSSES) INVESTMENT FROM CAPITAL OF
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS CAPITAL
- ---------------------------------------------------------------------------------------------------------------------
FIXED INCOME FUND
Class A
2002 $ 11.37 $ 0.55 $ 0.08 $ (0.55) $ -- $ --
2001(1) 10.69 0.61 0.69 (0.62) -- --
2000 10.65 0.61 0.04 (0.61) -- --
1999 11.69 0.59 (0.89) (0.59) (0.15) --
1998 10.97 0.57 0.73 (0.57) (0.01) --
Class B
2002 $ 11.29 $ 0.47 $ 0.09 $ (0.47) $ -- $ --
2001(1) 10.63 0.52 0.68 (0.54) -- --
2000 10.58 0.53 0.05 (0.53) -- --
1999 11.63 0.51 (0.90) (0.51) (0.15) --
1998 10.91 0.49 0.73 (0.49) (0.01) --
Class C
2002 $ 11.34 $ 0.47 $ 0.08 $ (0.47) $ -- $ --
2001(1) 10.66 0.52 0.70 (0.54) -- --
2000 10.64 0.52 0.04 (0.54) -- --
1999(2) 11.33 0.38 (0.69) (0.38) -- --
Class S
2002 $ 11.37 $ 0.55 $ 0.08 $ (0.55) $ -- $ --
2001(1)(3) 11.28 0.01 0.08 -- -- --
Class Y
2002 $ 11.37 $ 0.58 $ 0.08 $ (0.58) $ -- $ --
2001(1) 10.69 0.63 0.70 (0.65) -- --
2000 10.65 0.63 0.04 (0.63) -- --
1999 11.69 0.61 (0.89) (0.61) (0.15) --
1998 10.96 0.60 0.74 (0.60) (0.01) --
<Caption>
RATIO OF
RATIO OF NET EXPENSES
NET ASSET RATIO OF INVESTMENT AVERAGE
VALUE NET ASSETS EXPENSES TO INCOME TO NET ASSETS
END OF TOTAL END OF AVERAGE AVERAGE (EXCLUDING
PERIOD RETURN(5) PERIOD(000) NET ASSETS NET ASSETS WAIVERS)
- ---------------------------------------------------------------------------------------------------------------------
FIXED INCOME FUND
Class A
2002 $ 11.45 5.77% $ 122,354 0.95% 4.93% 1.03%
2001(1) 11.37 12.50 119,067 0.95 5.50 1.13
2000 10.69 6.33 110,490 0.95 5.76 1.14
1999 10.65 (2.67) 137,133 0.95 5.29 1.14
1998 11.69 12.29 205,237 0.95 5.10 1.11
Class B
2002 $ 11.38 5.12% $ 16,741 1.70% 4.17% 1.78%
2001(1) 11.29 11.59 15,071 1.70 4.75 1.88
2000 10.63 5.70 11,550 1.70 5.02 1.89
1999 10.58 (3.48) 14,639 1.70 4.53 1.89
1998 11.63 11.54 17,242 1.70 4.35 1.86
Class C
2002 $ 11.42 5.02% $ 9,672 1.70% 4.18% 1.78%
2001(1) 11.34 11.68 7,148 1.70 4.65 1.88
2000 10.66 5.50 566 1.70 5.02 1.89
1999(2) 10.64 (2.75) 719 1.35 5.09 1.89
Class S
2002 $ 11.45 5.77% $ 33,270 0.95% 4.93% 1.03%
2001(1)(3) 11.37 0.80 35,062 1.58 6.36 1.76
Class Y
2002 $ 11.45 6.04% $ 1,204,555 0.70% 5.18% 0.78%
2001(1) 11.37 12.76 1,368,812 0.70 5.76 0.88
2000 10.69 6.59 1,299,941 0.70 6.03 0.89
1999 10.65 (2.44) 1,239,900 0.70 5.57 0.89
1998 11.69 12.66 1,210,661 0.70 5.35 0.86
[WIDE TABLE CONTINUED FROM ABOVE]
RATIO OF NET
INVESTMENT
INCOME
TO AVERAGE NET PORTFOLIO
ASSETS (EXCLUDING TURNOVER
WAIVERS) RATE
- --------------------------------------------------------------------
FIXED INCOME FUND
Class A
2002 4.85% 115%
2001(1) 5.32 81
2000 5.57 54
1999 5.10 90
1998 4.94 147
Class B
2002 4.09% 115%
2001(1) 4.57 81
2000 4.83 54
1999 4.34 90
1998 4.19 147
Class C
2002 4.10% 115%
2001(1) 4.47 81
2000 4.83 54
1999(2) 4.55 90
Class S
2002 4.85% 115%
2001(1)(3) 6.18 81
Class Y
2002 5.10% 115%
2001(1) 5.58 81
2000 5.84 54
1999 5.38 90
1998 5.19 147
(1) Per share data calculated using average shares outstanding method.
(2) Class of shares has been offered since February 1, 1999. All ratios for the
period have been annualized, except total return and portfolio turnover.
(3) Class of shares has been offered since September 24, 2001. All ratios for
the period have been annualized, except total return and portfolio
turnover.
(4) Commenced operations on August 30, 2001. All ratios for the period have
been annualized, except total return and portfolio turnover.
(5) Total returns do not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
C-12
HIGH YIELD BOND FUND
<Caption>
RATIO OF
RATIO OF NET EXPENSES
NET ASSET RATIO OF INVESTMENT AVERAGE
VALUE NET ASSETS EXPENSES TO INCOME TO NET ASSETS
END OF TOTAL END OF AVERAGE AVERAGE (EXCLUDING
PERIOD RETURN(5) PERIOD(000) NET ASSETS NET ASSETS WAIVERS)
- ---------------------------------------------------------------------------------------------------------------------
HIGH YIELD BOND FUND
Class A
2002 $ 7.96 (6.66)% $ 23,900 1.10% 7.64% 1.47%
2001(1)(4) 9.30 (6.55) 161 1.10 6.53 1.33
Class B
2002 $ 7.97 (7.26)% $ 774 1.80% 7.49% 2.28%
2001(1)(4) 9.31 (6.47) 40 1.77 6.02 2.02
Class C
2002 $ 7.97 (7.34)% $ 7,213 1.83% 7.08% 2.26%
2001(1)(4) 9.31 (6.50) 3,749 1.94 5.53 2.21
Class S
2002 $ 7.96 (6.66)% $ 87 1.01% 8.46% 1.57%
2001(1)(3) 9.30 (1.90) -- 0.00 1.23 0.00
Class Y
2002 $ 7.98 (6.33)% $ 21,157 0.82% 8.19% 1.27%
2001(1)(4) 9.31 (6.47) 8,308 0.96 6.06 1.23
[WIDE TABLE CONTINUED FROM ABOVE]
RATIO OF NET
INVESTMENT
INCOME
TO AVERAGE NET PORTFOLIO
ASSETS (EXCLUDING TURNOVER
WAIVERS) RATE
- --------------------------------------------------------------------
HIGH YIELD BOND FUND
Class A
2002 7.27% 86%
2001(1)(4) 6.30 53
Class B
2002 7.01% 86%
2001(1)(4) 5.77 53
Class C
2002 6.65% 86%
2001(1)(4) 5.26 53
Class S
2002 7.90% 86%
2001(1)(3) 1.23 53
Class Y
2002 7.74% 86%
2001(1)(4) 5.79 53
(1) Per share data calculated using average shares outstanding method.
(2) Class of shares has been offered since February 1, 1999. All ratios for the
period have been annualized, except total return and portfolio turnover.
(3) Class of shares has been offered since September 24, 2001. All ratios for
the period have been annualized, except total return and portfolio
turnover.
(4) Commenced operations on August 30, 2001. All ratios for the period have
been annualized, except total return and portfolio turnover.
(5) Total returns do not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
C-13
STRATEGIC INCOME FUND
<Table>
<Caption>
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS
VALUE NET GAINS FROM NET
BEGINNING INVESTMENT OR (LOSSES) INVESTMENT
OF PERIOD INCOME ON INVESTMENTS INCOME
- ----------------------------------------------------------------------------------------------------
STRATEGIC INCOME FUND
Class A
2002(1) $ 8.37 $ 0.68 $ (0.39) $ (0.67)
2001(1) 8.91 0.76 (0.59) (0.71)
2000(1) 9.09 0.64 (0.15) (0.67)
1999(1) 9.27 0.78 (0.25) (0.71)
1998(2) 10.00 0.13 (0.75) (0.11)
Class B
2002(1) $ 8.35 $ 0.60 $ (0.38) $ (0.61)
2001(1) 8.89 0.69 (0.58) (0.65)
2000(1) 9.07 0.56 (0.14) (0.60)
1999(1) 9.27 0.71 (0.26) (0.65)
1998(2) 10.00 0.09 (0.71) (0.11)
Class C(1)
2002 $ 8.35 $ 0.60 $ (0.38) $ (0.61)
2001 8.90 0.69 (0.59) (0.65)
2000 9.08 0.59 (0.14) (0.63)
1999(3) 9.57 0.45 (0.47) (0.47)
Class S(1)
2002 $ 8.38 $ 0.65 $ (0.36) $ (0.61)
2001(4) 8.40 -- (0.02) --
Class Y
2002(1) $ 8.38 $ 0.70 $ (0.40) $ (0.69)
2001(1) 8.92 0.79 (0.59) (0.74)
2000(1) 9.09 0.66 (0.14) (0.69)
1999(1) 9.27 0.80 (0.25) (0.73)
1998(2) 10.00 0.14 (0.75) (0.12)
<Caption>
RATIO OF NET
NET ASSETS RATIO OF INVESTMENT
VALUE NET ASSETS EXPENSES TO INCOME TO
END OF TOTAL END OF AVERAGE AVERAGE
PERIOD RETURN(5) PERIOD(000) NET ASSETS NET ASSET
- -----------------------------------------------------------------------------------------------------------------------
STRATEGIC INCOME FUND
Class A
2002(1) $ 7.99 3.31% $ 18,006 1.20% 7.98%
2001(1) 8.37 1.99 19,014 1.15 8.62
2000(1) 8.91 5.56 21,737 1.15 7.08
1999(1) 9.09 5.73 27,768 1.15 8.30
1998(2) 9.27 (6.17) 40,270 1.15 8.19
Class B
2002(1) $ 7.96 2.46% $ 4,179 1.95% 7.13%
2001(1) 8.35 1.17 2,426 1.90 7.88
2000(1) 8.89 4.83 1,401 1.90 6.20
1999(1) 9.07 4.90 788 1.90 7.56
1998(2) 9.27 (6.19) 114 1.90 7.44
Class C(1)
2002 $ 7.96 2.44% $ 6,213 1.95% 7.16%
2001 8.35 1.04 4,240 1.91 7.89
2000 8.90 5.16 1,241 1.65 6.46
1999(3) 9.08 (0.28) 1,058 1.55 7.34
Class S(1)
2002 $ 8.06 3.26% $ 6 1.20% 7.77%
2001(4) 8.38 (0.24) -- 0.00 0.00
Class Y
2002(1) $ 7.99 3.44% $ 135,665 0.95% 8.22%
2001(1) 8.38 2.12 155,146 0.90 8.89
2000(1) 8.92 5.94 237,730 0.90 7.26
1999(1) 9.09 5.96 184,666 0.90 8.56
1998(2) 9.27 (6.13) 54,491 0.90 8.44
[WIDE TABLE CONTINUED FROM ABOVE]
<Caption>
RATIO OF RATIO OF NET
EXPENSES TO INVESTMENT
AVERAGE INCOME
NET ASSETS TO AVERAGE NET PORTFOLIO
(EXCLUDING ASSETS(EXCLUDING TURNOVER
WAIVERS) WAIVERS) RATE
- ------------------------------------------------------------------------------------
STRATEGIC INCOME FUND
Class A
2002(1) 1.28% 7.90% 59%
2001(1) 1.17 8.60 80
2000(1) 1.17 7.06 90
1999(1) 1.21 8.24 40
1998(2) 1.30 8.04 61
Class B
2002(1) 2.03% 7.05% 59%
2001(1) 1.91 7.87 80
2000(1) 1.91 6.19 90
1999(1) 1.96 7.50 40
1998(2) 2.05 7.29 61
Class C(1)
2002 2.03% 7.08% 59%
2001 1.92 7.88 80
2000 1.73 6.38 90
1999(3) 1.90 6.99 40
Class S(1)
2002 1.28% 7.69% 59%
2001(4) 0.00 0.00 80
Class Y
2002(1) 1.03% 8.14% 59%
2001(1) 0.92 8.87 80
2000(1) 0.91 7.25 90
1999(1) 0.93 8.53 40
1998(2) 1.05 8.29 61
</Table>
(1) Per share data calculated using average shares outstanding method.
(2) Commenced operations on July 24, 1998. All ratios for the period have been
annualized, except total return and portfolio turnover.
(3) Class of shares has been offered since February 1, 1999. All ratios for the
period have been annualized, except total return and portfolio turnover.
(4) Class of shares has been offered since September 24, 2001. All ratios for
the period have been annualized, except total return and portfolio
turnover.
(5) Total returns do not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
C-14
Part B
Form N-14
FIRST AMERICAN INVESTMENT FUNDS, INC.
800 Nicollet Mall
Minneapolis, MN 55402
(800) 677-3863
Statement of Additional Information
January __, 2003
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the Prospectus/Proxy
Statement dated January __, 2003, relating to the proposed reorganizations of
Large Cap Growth Fund, Health Sciences Fund, Mid Cap Growth Fund, Small Cap
Growth Fund, Emerging Markets Fund, Bond IMMDEX(TM) Fund, and High Yield Bond
Fund (each an "Acquired Fund"), each a separate series of First American
Investment Funds, Inc. ("FAIF"), with and into Large Cap Core Fund, Mid Cap Core
Fund, Small Cap Core Fund, International Fund, Fixed Income Fund or Strategic
Income Fund, as applicable (each an "Acquiring Fund"), each a separate series of
FAIF. A copy of the Prospectus/Proxy Statement may be obtained without charge by
calling or writing to FAIF at the telephone number or address set forth above.
This Statement of Additional Information has been incorporated by reference into
the Prospectus/Proxy Statement.
Further information about the Acquired Funds and the Acquiring Funds is
contained in their Prospectuses, each dated January 28, 2002, as supplemented,
their Statement of Additional Information dated January 28, 2002 ("SAI"), and
their Annual Report to Shareholders for the fiscal year ended September 30, 2002
("Annual Report").
This Statement of Additional Information incorporates by reference the SAI
and the Annual Report, each of which accompanies this Statement of Additional
Information.
DIRECTORS AND EXECUTIVE OFFICERS
The directors and executive officers of FAIF are listed below, together
with their business addresses and their principal occupations during the past
five years. The Board of Directors is generally responsible for the overall
operation and management of FAIF. Directors who are "interested persons" (as
that term is defined in the 1940 Act) of FAIF are identified with an asterisk.
INDEPENDENT DIRECTORS
- -----------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS IN OTHER
NAME, ADDRESS, POSITION(S) TERM OF OFFICE FUND COMPLEX DIRECTORSHIPS
AND AGE HELD AND LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY
WITH FUND TIME SERVED DURING PAST 5 YEARS DIRECTOR DIRECTOR*
- -----------------------------------------------------------------------------------------------------------------------
Roger A. Director Term expiring earlier Vice President, Cargo - First American None
Gibson, 1200 of death, United Airlines, since July Funds Complex:
Algonquin Road, resignation, removal, 2001; Vice President, North Fifteen
Elk Grove disqualification, or America-Mountain Region for registered
Village, IL successor duly United Airlines (1995-2001) investment
60007 (56) elected and companies,
qualified. Director including 70
of FAIF since October portfolios
1997
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Andrew M. Director Term expiring earlier Chairman, Hunter, Keith First American None
Hunter III, 537 of death, Industries, a diversified Funds Complex:
Harrington resignation, removal, manufacturing and services Fifteen
Road, Wayzata, disqualification, or management company, since registered
Minnesota 55391 successor duly 1975 investment
(55)** elected and companies,
qualified. Director including 70
of FAIF since January portfolios
1997
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Leonard W. Director Term expiring earlier Owner, Executive and First American None
Kedrowski, 16 of death, Management Consulting, Inc., Funds Complex:
Dellwood resignation, removal, a management consulting Fifteen
Avenue, disqualification, or firm, since 1992; Chief registered
Dellwood, successor duly Executive Officer, Creative investment
Minnesota 55110 elected and Promotions International, companies,
(61) qualified. Director LLC, a promotional award including 70
of FAIF since programs and products portfolios
November 1993 company, since 1999; Board
member, GC McGuiggan
Corporation (dba Smyth
Companies), manufacturer of
designer doors; acted as CEO
of Graphics Unlimited from
1996-1998
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Richard K. Director Term expiring earlier Retired; President and Chief First American None
Riederer, 741 of death, Executive Officer, Weirton Funds Complex:
Chestnut Road, resignation, removal, Steel (1995-2001); Director, Fifteen
Sewickley, disqualification, or Weirton Steel (1993-2001) registered
Pennsylvania successor duly investment
15143 (58) elected and companies,
qualified. Director including 70
of FAIF since August portfolios
2001
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Joseph D. Director Term expiring earlier Chairman of FAF's and FAIF's First American None
Strauss, 8525 of death, Boards from 1993 to Funds Complex:
Edinbrook resignation, removal, September 1997 and of FASF's Fifteen
Crossing, Suite disqualification, or Board from June 1996 to registered
5, Brooklyn successor duly September 1997; President of investment
Park, Minnesota elected and FAF and FAIF from June 1989 companies,
55443 (62) qualified. Director to November 1989; Owner and including 70
of FAIF since Executive Officer, Excensus portfolios
September 1991 TM LLC, a consulting firm,
since 2001; Owner and
President, Strauss
Management Company, a
Minnesota holding company
for various
organizational management
business ventures, since
1993; Owner, Chairman and
Chief Executive Officer,
Community Resource
Partnerships, Inc., a
strategic planning,
operations management,
government relations,
transportation planning
and public relations
organization, since 1993;
attorney at law
- -----------------------------------------------------------------------------------------------------------------------
2
- -----------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS IN OTHER
NAME, ADDRESS, POSITION(S) TERM OF OFFICE FUND COMPLEX DIRECTORSHIPS
AND AGE HELD AND LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY
WITH FUND TIME SERVED DURING PAST 5 YEARS DIRECTOR DIRECTOR*
- -----------------------------------------------------------------------------------------------------------------------
Virginia L. Chair; Chair Term three Owner and President, First American None
Stringer, 712 Director years. Directors Strategic Management Funds Complex:
Linwood Avenue, Term expiring earlier Resources, Inc., a Fifteen
St. Paul, of death, management consulting firm, registered
Minnesota 55105 resignation, removal, since 1993; Executive investment
(58) disqualification, or Consultant for State Farm companies,
successor duly Insurance Company since including 70
elected and 1997; formerly President and portfolios
qualified. Chair of Director, The Inventure
FAIF's Board since Group, a management
September 1997; consulting and training
Director of FAIF company; President, Scott's,
since September 1987 Inc., a transportation
company, and Vice President
of Human Resources, The
Pillsbury Company
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
James M. Wade, Director Term expiring earlier Owner and President, Jim First American None
2802 Wind Bluff of death, Wade Homes, a homebuilding Funds Complex:
Circle, resignation, removal, company, since 1999 thirteen
Wilmington, disqualification, or registered
North Carolina successor duly investment
28409 (59) elected and companies,
qualified. Director including 70
of FAIF since August portfolios
2001
- -----------------------------------------------------------------------------------------------------------------------
* Includes only directorships in a company with a class of securities registered
pursuant to Section 12 of the Securities Exchange Act or subject to the
requirements of Section 15(d) of the Securities Exchange Act, or any company
registered as an investment company under the Investment Company Act.
** On December 4, 2002, Mr. Hunter tendered his resignation from the Board of
Directors, effective December 31, 2002.
INTERESTED DIRECTOR(S)
- -----------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS IN OTHER
NAME, ADDRESS, POSITION(S) TERM OF OFFICE FUND COMPLEX DIRECTORSHIPS
AND AGE HELD AND LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY
WITH FUND TIME SERVED DURING PAST 5 YEARS DIRECTOR DIRECTOR*
- -----------------------------------------------------------------------------------------------------------------------
John M. Murphy, Director Term expiring earlier Executive Vice President, First American None
Jr., 800 of death, U.S. Bancorp since January Funds Complex:
Nicollet Mall, resignation, removal, 1999; Minnesota State thirteen
Minneapolis, disqualification, or Chairman - U.S. Bancorp registered
Minnesota 55402 successor duly since 2000; Chairman and investment
(61) ** elected and Chief Investment Officer, companies,
qualified. Director First American Asset including 70
of FAIF since June Management and U.S. Bank portfolios
1999 Trust, N.A., and Executive
Vice President, U.S. Bancorp
(1991-1999).
- -----------------------------------------------------------------------------------------------------------------------
* Includes only directorships in a company with a class of securities registered
pursuant to Section 12 of the Securities Exchange Act or subject to the
requirements of Section 15(d) of the Securities Exchange Act, or any company
registered as an investment company under the Investment Company Act.
** Mr. Murphy is considered an "interested" Director because of his employment
with U.S. Bancorp, U.S. Bancorp Asset Management (and its predecessor, First
American Asset Management) and U.S. Bank Trust National Association, and his
ownership of securities issued by U.S. Bancorp.
3
OFFICERS
- -----------------------------------------------------------------------------------------------------------------------
POSITION(S) TERM OF OFFICE PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS
NAME, ADDRESS, AND AGE HELD AND LENGTH OF
WITH FUND TIME SERVED
- -----------------------------------------------------------------------------------------------------------------------
Thomas S. Schreier, President Re-elected by the Chief Executive Officer of U.S. Bancorp Asset
Jr., U.S. Bancorp Board annually; Management, Inc. since May 2001; Chief Executive
Asset Management, President of FAIF Officer of First American Asset Management from
Inc., 800 Nicollet since February December 2000 through May 2001 and of Firstar
Mall, Minneapolis, 2001 Investment & Research Management Company from February
Minnesota 55402 (40) * 2001 through May 2001; Senior Managing Director and
Head of Equity Research of U.S. Bancorp Piper Jaffray
from October 1998 through December 2000; Senior
Airline Analyst and Director of Equity Research of
Credit Suisse First Boston through 1998
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Mark S. Jordahl, U.S. Vice President Re-elected by the Chief Investment Officer of U.S. Bancorp Asset
Bancorp Asset - Investments Board annually; Management, Inc. since September 2001; President and
Management, Inc. 800 Vice President - Chief Investment Officer, ING Investment Management -
Nicollet Mall, Investments of Americas (September 2000 to June 2001); Senior Vice
Minneapolis, Minnesota FAIF since President and Chief Investment Officer, ReliaStar
55402 (42) * September 2001 Financial Corp. (January 1998 to September 2000);
Executive Vice President and Managing Director,
Washington Square Advisers (January 1996 to December
1997)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Jeffery M. Wilson, Vice President Re-elected by the Senior Vice President of U.S. Bancorp Asset Management
U.S. Bancorp Asset - Administration Board annually; since May 2001; Senior Vice President of First
Management, Inc. 800 Vice President - American Asset Management through May 2001
Nicollet Mall, Administration of
Minneapolis, Minnesota FAIF since March
55402 (46) * 2000
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Robert H. Nelson, U.S. Treasurer Re-elected by the Senior Vice President of U.S. Bancorp Asset Management
Bancorp Asset Board annually; since May 2001; Senior Vice President of First
Management, Inc. 800 Treasurer of FAIF American Asset Management from 1998 through May 2001
Nicollet Mall, since March 2000 and of Firstar Investment & Research Management
Minneapolis, Minnesota Company from February 2001 through May 2001; Senior
55402 (39) * Vice President of Piper Capital Management Inc.
through 1998
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
James D. Alt, 50 South Secretary Re-elected by the Partner, Dorsey & Whitney LLP, a Minneapolis- based
Sixth Street, Suite Board annually; law firm
1500, Minneapolis, Assistant
Minnesota 55402 (51) Secretary of FAIF
from September
1998 through June
2002. Secretary
of FAIF since June
2002.
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Michael J. Radmer, 50 Assistant Re-elected by the Partner, Dorsey & Whitney LLP, a Minneapolis- based
South Sixth Street, Secretary Board annually; law firm
Suite 1500, Assistant Secretary
Minneapolis, Minnesota of FAIF since March
55402 (57) 2000; Secretary of
FAIF from September
1999 through March
2000
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Kathleen L. Prudhomme, Assistant Re-elected by the Partner, Dorsey & Whitney LLP, a Minneapolis- based
50 South Sixth Street, Secretary Board annually; law firm
Suite 1500, Assistant
Minneapolis, Minnesota Secretary of FAIF
55402 (49) since September
1998
- -----------------------------------------------------------------------------------------------------------------------
4
- -----------------------------------------------------------------------------------------------------------------------
POSITION(S) TERM OF OFFICE PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS
NAME, ADDRESS, AND AGE HELD AND LENGTH OF
WITH FUND TIME SERVED
- -----------------------------------------------------------------------------------------------------------------------
Douglas G. Hess, 612 Assistant Re-elected by the Assistant Vice President, Fund Compliance
E. Michigan Street, Secretary Board annually; Administrator, U.S. Bancorp Fund Services, LLC (fka
Milwaukee, WI 53202 Assistant Firstar Mutual Fund Services, LLC) since March 1997
(35) * Secretary of FAIF
since September
2001
- -----------------------------------------------------------------------------------------------------------------------
* Messrs. Schreier, Jordahl, Wilson, and Nelson are each officers of U.S.
Bancorp Asset Management, Inc., which serves as investment adviser for FAIF. Mr.
Hess is an officer of U.S. Bancorp Fund Services, LLC, which is a subsidiary of
U.S. Bancorp and which serves as Co-Administrator for FAIF.
STANDING COMMITTEES OF THE BOARD OF DIRECTORS
There are currently three standing committees of the FAIF Board of
Directors: Audit Committee, Pricing Committee and Nominating Committee.
- -----------------------------------------------------------------------------------------------------------------------
NUMBER OF FUND COMPLEX
COMMITTEE MEETINGS
HELD DURING LAST
COMMITTEE FUNCTION COMMITTEE MEMBERS FISCAL YEAR
- -----------------------------------------------------------------------------------------------------------------------
Audit Committee The Committee will recommend annually to the Leonard Kedrowski (Chair) 8
Board of Directors a firm of independent Roger Gibson
certified public accountants to audit the Richard Riederer
books and records of the funds for the ensuing Virginia Stringer
year. In connection therewith, the Committee (ex-officio)
will monitor that firm's performance, including
a review of each audit and review of fees paid,
confer with that firm as to the funds' financial
statements and internal controls, evaluate the
firm's independence, review procedures to
safeguard portfolio securities, review the
purchase by the funds from the firm of nonaudit
services, facilitate communications with
management and service providers and review
funds' back-up procedures and disaster recovery
plans.
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Pricing The Committee is responsible for valuing Joseph Strauss (Chair) 8
Committee portfolio securities for which market Andrew Hunter
quotations are not readily available, pursuant John Murphy
to procedures established by the Board of Virginia Stringer
Directors. (ex-officio)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Nominating The Committee is responsible for recommending Andrew Hunter (Chair) 2
Committee to the Board of Directors (1) nominees for Roger Gibson
election as directors, (2) a successor to the Richard Riederer
Chair when a vacancy occurs, and (3) Virginia
Stringer compensation plans and arrangements
for the (ex-officio) directors; and reviewing
with the Chair, the Chair's recommended
Committee assignments.
- -----------------------------------------------------------------------------------------------------------------------
FUND SHARES OWNED BY THE DIRECTORS
The information in the table below discloses the dollar ranges of (i) each
Director's beneficial ownership in FAIF, and (ii) each Director's aggregate
beneficial ownership in all funds within the First American Funds complex.
5
- -----------------------------------------------------------------------------------------------------------------------
NAME OF DIRECTOR DOLLAR RANGE OF EQUITY SECURITIES IN FAIF AGGREGATE DOLLAR RANGE OF EQUITY SECURITIES IN
THE FIRST AMERICAN FUNDS COMPLEX*
- -----------------------------------------------------------------------------------------------------------------------
Virginia Stringer Over $100,000 Over $100,000
- -----------------------------------------------------------------------------------------------------------------------
Leonard Kedrowski Over $100,000 Over $100,000
- -----------------------------------------------------------------------------------------------------------------------
Roger Gibson $10,001-$50,000 $10,001-$50,000
- -----------------------------------------------------------------------------------------------------------------------
Andrew Hunter None Over $100,000
- -----------------------------------------------------------------------------------------------------------------------
Joseph Strauss Over $100,000 Over $100,000
- -----------------------------------------------------------------------------------------------------------------------
Richard Riederer $50,001-$100,000 $50,001-$100,000
- -----------------------------------------------------------------------------------------------------------------------
James Wade Over $100,000 Over $100,000
- -----------------------------------------------------------------------------------------------------------------------
John Murphy $1 - $10,000 Over $100,000
- -----------------------------------------------------------------------------------------------------------------------
* The dollar range disclosed is based on the value of the securities as of
October 1, 2002.
As of October 1, 2002, none of the independent Directors or their immediate
family members owned, beneficially, or of record, any securities in (i) an
investment advisor or principal underwriter of the Fund or (ii) a person (other
than a registered investment company) directly of indirectly controlling,
controlled by, or under common control with an investment advisor or principal
underwriter of the Fund.
APPROVAL OF INVESTMENT ADVISORY CONTRACT
With respect to all Funds, the Board of Directors last reviewed the
Advisory Agreement and approved its continuation on June 5, 2002. In connection
with its re-approval, the Board of Directors reviewed and considered the
following factors with respect to each Fund:
o the terms of the Advisory Agreement, including the nature and scope of
services to be provided by the Advisor to the Fund;
o the structure and rate of the fees charged by the Advisor under the
Advisory Agreement (both before and after fee waivers by the Advisor),
as compared to the advisory fees paid by similar funds managed by
other investment advisors;
o the historical profitability of the Advisory Agreement to the Advisor
with respect to the Fund, and the other benefits that may be received
by the Advisor or its affiliates in providing services to the Fund
(including soft dollar benefits received by the Advisor in addition to
its investment advisory fee);
o the total fees and expenses paid by the Fund, as compared to the total
fees and expenses paid by similar funds managed by other investment
advisors;
o the historical investment performance of the Fund, as compared to the
historical investment performance of (a) similar funds managed by
other investment advisors, and (b) one or more unmanaged "benchmark"
indices for the Fund;
o information and reports concerning the management and performance of
each Fund which were provided to the Board on a regular basis
throughout the course of the year;
o an in-depth review of strategies and performance which the Board
performs with respect to each Fund at least annually;
6
o the steps taken by the Advisor since the Board's last re-approval of
the Advisory Agreement to improve the performance of certain Funds,
and the changes in performance of such Funds; and
o the nature and scope of the investment advisory services that
historically have been provided by the Advisor to the Fund, and the
ability of the Advisor to continue to provide the same level and
quality of investment advisory services to the Fund in light of the
experience and qualifications of the Advisor and its personnel, the
Advisor's financial condition, and the terms of the Advisory
Agreement.
The "similar funds managed by other investment advisors" referred to above
were selected by Lipper Inc., an organization which is not affiliated with the
Advisor. The information concerning such funds was compiled and provided to the
Board of Directors by Lipper Inc.
The Board of Directors was led in its review and deliberations by James M.
Wade, a "disinterested" director of the Funds whom the Board has designated as
Fund Review Liaison. The Board was advised and assisted by counsel to the
independent directors and fund counsel. On the basis of the Board's review and
analysis of the foregoing information, the Board found in the exercise of its
business judgment that the terms of the Advisory Agreement are fair and
reasonable and in the best interest of shareholders of each Fund. The Board also
performed a similar, but less extensive, analysis of each sub-advisory agreement
with respect to the Funds and found in the exercise of its business judgment
that the terms of each such agreement are fair and reasonable and in the best
interest of shareholders of the relevant Funds. No single factor or group of
factors was deemed to be determinative by the Board in making these judgments.
Instead, the Board based its decisions on the totality of the information which
it requested and reviewed.
COMPENSATION
The First American Family of Funds (which includes FAIF; First American
Funds, Inc. ("FAF"); First American Strategy Funds, Inc. ("FASF"); First
American Insurance Portfolios, Inc. ("FAIP"); and ten separate closed-end funds
(American Strategic Income Portfolio Inc., American Strategic Income Portfolio
Inc. II, American Strategic Income Portfolio Inc. III, American Municipal Income
Portfolio Inc., Minnesota Municipal Income Portfolio Inc., Minnesota Municipal
Income Fund Inc. II, American Select Portfolio Inc., American Municipal Term
Trust Inc. III., Minnesota Municipal Term Trust Inc. II, and American Income
Fund, Inc.), collectively referred to as the First American Closed-End Funds
("FACEF")) currently pays only directors of the funds who are not paid employees
or affiliates of the Funds, a fee of $40,000 per year ($60,000 in the case of
the Chair) plus $10,000 ($15,000 in the case of the Chair) per meeting of the
Board attended and $2,500 per Nominating Committee or Audit Committee meeting
attended ($3,750 in the case of a committee chair) and reimburses travel
expenses of directors and officers to attend Board meetings. In the event of
telephonic Board meetings, each participating director receives a fee of $5,000
($7,500 in the case of the Chair), and in the event of all Pricing Committee
meetings and telephonic Nominating or Audit Committee meetings, each
participating director receives a fee of $1,250 ($1,875 in the case of the
committee chair). In addition, directors may receive a per diem fee of $2,500
per day, plus travel expenses when directors travel out of town on Fund
business. However, directors do not receive the $2,500 per diem amount plus the
foregoing Board or committee fee for an out-of-town committee or Board meeting
but instead receive the greater of the total per diem fee or meeting fee. Legal
fees and expenses are also paid to Dorsey & Whitney LLP, the law firm of which
James D. Alt, Secretary, and Michael J. Radmer, and Kathleen L. Prudhomme,
Assistant Secretaries of FAIF, FAF, FASF, FAIP and FACEF, are partners.
The following table sets forth information concerning aggregate
compensation paid to each director of FAIF (i) by FAIF (column 2), and (ii) by
FAIF, FAF, FASF, FAIP and FACEF collectively (column 5) during the fiscal year
ended September 30, 2002. No executive officer or affiliated person of FAIF
received any compensation from FAIF in excess of $60,000 during such fiscal
year:
7
- --------------------------------------------------------------------------------------------------------------
PENSION OR TOTAL
AGGREGATE RETIREMENT COMPENSATION FROM
NAME OF PERSON, POSITION COMPENSATION BENEFITS ACCRUED ESTIMATED REGISTRANT AND
FROM AS PART OF FUND ANNUAL BENEFITS FUND COMPLEX PAID
REGISTRANT (1) EXPENSES UPON RETIREMENT TO DIRECTORS (2)
- --------------------------------------------------------------------------------------------------------------
Robert J. Dayton (3) $16,073 -0- -0- $ 58,616
- --------------------------------------------------------------------------------------------------------------
Andrew S. Duff (4) -0- N/A N/A -0-
- --------------------------------------------------------------------------------------------------------------
Roger A. Gibson, Director 27,210 -0- -0- 104,350
- --------------------------------------------------------------------------------------------------------------
Andrew M. Hunter III, Director 21,640 -0- -0- 87,500
- --------------------------------------------------------------------------------------------------------------
Leonard W. Kedrowski, Director 38,043 -0- -0- 153,825
- --------------------------------------------------------------------------------------------------------------
John M. Murphy, Jr., Director (5) -0- N/A N/A -0-
- --------------------------------------------------------------------------------------------------------------
Richard K. Riederer, Director 36,469 -0- -0- 133,000
- --------------------------------------------------------------------------------------------------------------
Joseph D. Strauss, Director 28,130 -0- -0- 102,875
- --------------------------------------------------------------------------------------------------------------
Virginia L. Stringer, Director & 47,599 -0- -0- 176,125
Chair
- --------------------------------------------------------------------------------------------------------------
James M. Wade, Director 26,392 -0- -0- 96,250
- --------------------------------------------------------------------------------------------------------------
(1) Included in the Aggregate Compensation From Registrant under column 2 are
amounts deferred by Directors pursuant to the Deferred Compensation Plan
discussed below. Pursuant to this Plan, compensation was deferred for the
following directors: Roger A. Gibson, $12,904; Andrew M. Hunter III,
$21,640; Leonard W. Kedrowski, $38,043; Joseph D. Strauss, $730; and
Virginia L. Stringer, $6,399.
(2) Deferred compensation is included in the Total Compensation under column 5
for the following directors: Roger A. Gibson, $52,175; Andrew M. Hunter
III, $87,500; Leonard W. Kedrowski, $153,825; Joseph D. Strauss, $2,950;
and Virginia L. Stringer, $25,875.
(3) On May 15, 2002, Robert J. Dayton tendered his resignation from the Board
of Directors of the Funds, effective September 30, 2002.
(4) At the August 30, 2001 shareholder meeting, Andrew S. Duff was elected to
the Board of Directors. Mr. Duff, who was an "interested person," did not
receive any compensation and resigned from the Board of Directors on
December 5, 2001.
(5) As an "interested person," John M. Murphy do not receive compensation from
FAIF, FAF, FASF, FAIP or FACEF for his position on the Board of Directors.
- ----------
The directors may elect to defer payment of up to 100% of the fees they
receive in accordance with a Deferred Compensation Plan (the "Plan"). Under the
Plan, a director may elect to have his or her deferred fees treated as if they
had been invested in the shares of one or more funds and the amount paid to the
director under the Plan will be determined based on the performance of such
investments. Distributions may be taken in a lump sum or over a period years.
The Plan will remain unfunded for federal income tax purposes under the Internal
Revenue Code of 1986, as amended. Deferral of director fees in accordance with
the Plan will have a negligible impact on Fund assets and liabilities and will
not obligate the Funds to retain any director or pay any particular level of
compensation.
8
FUND PERFORMANCE
Linked Performance. Advertisements and other sales literature for the
Funds' Class Y shares may include linked performance where there is a
performance history of less than five years. That is, in situations where a Fund
has a share class with an inception date reflecting a performance history longer
than five years, but that same Fund's Class Y shares have an inception date
reflecting a shorter performance history, the Fund may advertise Class Y share
performance "linked" to the inception date of the older share class. This
performance presentation will not be adjusted to reflect actual Class Y share
fees and expenses, and the Fund will (additionally) provide performance based on
the Fund's actual Class Y share inception date. Fund prospectuses and annual
report(s) will continue to reflect actual share class performance from actual
inception dates.
Performance Presentation. Advertisements and other sales literature for the
Funds may refer to a Fund's "average annual total return" and "cumulative total
return." In addition, each Fund may provide yield calculations in advertisements
and other sales literature. All such yield and total return quotations are based
on historical earnings and are not intended to indicate future performance. The
return on and principal value of an investment in any of the Funds will
fluctuate, so that an investor's shares, when redeemed, may be worth more or
less than their original cost.
Average Annual Total Return. Average annual total return is the average
annual compounded rate of return on a hypothetical $1,000 investment made at the
beginning of the advertised period. Average annual total return figures are
computed according to the following formula:
P(1 + T)(n) = ERV
Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the period of a
hypothetical $1,000 payment made at the beginning of
such period
This calculation deducts the maximum sales charge from the initial hypothetical
$1,000 investment, assumes all dividends and capital gains distributions are
reinvested at net asset value on the appropriate reinvestment dates as described
in the applicable Prospectus, and includes all recurring fees, such as
investment advisory and management fees, charged to all shareholder accounts.
For Class B and Class C Shares, the calculation assumes the maximum deferred
sales load is deducted at the times, in the amounts and under the terms
disclosed in the applicable Prospectus. Average annual total return quotations
may be accompanied by quotations that do not reflect the sales charges, and
therefore will be higher.
The Advisor and Distributor have waived a portion of their fees on a
voluntary basis, thereby increasing total return and yield. These fees may or
may not be waived in the future in the Advisor's or Distributor's discretion.
9
Cumulative Total Return. Cumulative total return is calculated by
subtracting a hypothetical $1,000 investment in a Fund from the redeemable value
of such investment at the end of the advertised period, dividing such difference
by $1,000 and multiplying the quotient by 100. Cumulative total return is
computed according to the following formula:
CTR = (ERV-P) 100
-----
P
Where: CTR = Cumulative total return;
ERV = ending redeemable value at the end of the period of a
hypothetical $1,000 payment made at the beginning of
such period; and
P = initial payment of $1,000.
This calculation assumes all dividends and capital gain distributions are
reinvested at net asset value on the appropriate reinvestment dates as described
in the applicable Prospectus and includes all recurring fees, such as investment
advisory and management fees, charged to all shareholder accounts.
Based on the foregoing, the cumulative and the average annual total returns
for each class of the Funds from inception through September 30, 2002, were as
set forth below. The performance for Class A, Class B, Class C and Class S
Shares will normally be lower than for Class Y Shares because Class A, Class B,
Class C and Class S Shares are subject to sales and distribution charges and/or
shareholder servicing fees not charged to Class Y Shares. Inception dates of
Share Classes are listed in parentheses.
- ---------------------------------------------------------------------------------------------------------------------------------
CUMULATIVE AVERAGE AVERAGE AVERAGE AVERAGE
SINCE ANNUAL ANNUAL ANNUAL ANNUAL
INCEPTION SINCE INCEPTION ONE YEAR FIVE YEAR TEN YEAR
- ---------------------------------------------------------------------------------------------------------------------------------
WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH
- ---------------------------------------------------------------------------------------------------------------------------------
SALES CHARGE SALES CHARGE SALES CHARGE SALES CHARGE SALES CHARGE
- ---------------------------------------------------------------------------------------------------------------------------------
% % % % % % % % % %
- ---------------------------------------------------------------------------------------------------------------------------------
Large Cap Core Fund(1)(2)
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return before taxes) 50.06 41.78 5.40 4.62 (21.45) (25.76) (4.30) (5.38) na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return after taxes 33.13 25.78 3.77 3.01 (21.50) (25.81) (6.35) (7.40) na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return after taxes 41.10 34.41 4.56 3.90 (13.16) (15.80) (3.19) (4.02) na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return before taxes) (39.52) (41.04) (13.09) (13.71) (22.06) (25.95) na na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return after taxes (41.93) (43.44) (14.07) (14.70) (22.09) (25.98) na na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return after taxes (30.58) (31.80) (9.69) (10.13) (13.54) (15.93) na na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return before taxes) (19.76) (21.36) (19.48) (21.05) (22.06) (23.62) na na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return after taxes (19.81) (21.40) (19.52) (21.10) (22.10) (23.66) na na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return after taxes (15.82) (17.10) (15.59) (16.85) (13.53) (14.49) na na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return before taxes) 50.06 na 5.40 na (21.48) na (4.30) na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return after taxes 33.13 na 3.77 na (21.54) na (6.35) na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return after taxes 41.09 na 4.56 na (13.18) na (3.19) na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return before taxes) 59.81 na 4.92 na (21.23) na (4.06) na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return after taxes 41.34 na 3.61 na (21.30) na (6.11) na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
10
- ---------------------------------------------------------------------------------------------------------------------------------
CUMULATIVE AVERAGE AVERAGE AVERAGE AVERAGE
SINCE ANNUAL ANNUAL ANNUAL ANNUAL
INCEPTION SINCE INCEPTION ONE YEAR FIVE YEAR TEN YEAR
- ---------------------------------------------------------------------------------------------------------------------------------
WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH
- ---------------------------------------------------------------------------------------------------------------------------------
SALES CHARGE SALES CHARGE SALES CHARGE SALES CHARGE SALES CHARGE
- ---------------------------------------------------------------------------------------------------------------------------------
% % % % % % % % % %
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return after taxes 48.42 na 4.13 na (13.02) na (3.03) na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
LARGE CAP GROWTH FUND(1)
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return before taxes) (59.03) (61.28) (30.00) (31.57) (27.08) (31.09) na na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return after taxes (59.27) (61.51) (30.17) (31.73) (27.08) (31.09) na na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return after taxes (47.00) (48.81) (22.42) (23.49) (16.62) (19.09) na na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return before taxes) 39.36 39.36 4.35 4.35 (27.64) (31.26) (7.13) (7.47) na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return after taxes 25.80 25.80 2.99 2.99 (27.64) (31.26) (7.85) (8.19) na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return after taxes 26.66 26.66 3.08 3.08 (16.97) (19.19) (5.62) (5.87) na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return before taxes) (25.68) (27.16) (25.32) (26.79) (27.56) (28.99) na na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return after taxes (25.68) (27.16) (25.32) (26.79) (27.56) (28.99) na na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return after taxes (20.54) (21.73) (20.25) (21.42) (16.92) (17.80) na na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return before taxes) (59.00) na (29.98) na (27.08) na na na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return after taxes (59.25) na (30.15) na (27.08) na na na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return after taxes (46.98) na (22.40) na (16.62) na na na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return before taxes) (25.97) na (5.71) na (26.87) na (6.63) na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return after taxes (28.95) na (6.46) na (26.87) na (7.38) na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return after taxes (21.26) na (4.56) na (16.50) na (5.26) na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
HEALTH SCIENCES FUND(1)
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return before taxes) 4.05 (1.66) 0.60 (0.25) (19.61) (24.02) (3.13) (4.22) na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return after taxes (3.33) (8.63) (0.51) (1.34) (19.61) (24.02) (4.45) (5.52) na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return after taxes 1.94 (2.55) 0.29 (0.39) (12.04) (14.75) (2.66) (3.50) na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return before taxes) (0.93) (0.93) (0.14) (0.14) (20.21) (24.20) (3.83) (4.12) na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return after taxes (8.01) (8.01) (1.25) (1.25) (20.21) (24.20) (5.15) (5.47) na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return after taxes (1.84) (1.84) (0.28) (0.28) (12.41) (14.86) (3.17) (3.40) na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return before taxes) (10.86) (11.76) (4.22) (4.59) (20.25) (21.85) na na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return after taxes (13.45) (14.32) (5.28) (5.64) (20.25) (21.85) na na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return after taxes (8.71) (9.43) (3.36) (3.65) (12.43) (13.41) na na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return before taxes) 4.05 na 0.60 na (19.61) na (3.13) na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return after taxes (3.33) na (0.51) na (19.61) na (4.45) na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return after taxes 1.94 na 0.29 na (12.04) na (2.66) na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
11
- ---------------------------------------------------------------------------------------------------------------------------------
CUMULATIVE AVERAGE AVERAGE AVERAGE AVERAGE
SINCE ANNUAL ANNUAL ANNUAL ANNUAL
INCEPTION SINCE INCEPTION ONE YEAR FIVE YEAR TEN YEAR
- ---------------------------------------------------------------------------------------------------------------------------------
WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH
- ---------------------------------------------------------------------------------------------------------------------------------
SALES CHARGE SALES CHARGE SALES CHARGE SALES CHARGE SALES CHARGE
- ---------------------------------------------------------------------------------------------------------------------------------
% % % % % % % % % %
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return before taxes) 5.73 na 0.84 na (19.44) na (2.89) na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return after taxes (1.97) na (0.30) na (19.44) na (4.24) na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return after taxes 3.11 na 0.46 na (11.93) na (2.50) na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
MID CAP CORE FUND(1)(2)
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return before taxes) 85.11 74.93 8.30 7.51 (6.64) (11.77) (0.02) (1.15) na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return after taxes 48.16 40.02 5.22 4.45 (6.64) (11.77) (2.92) (4.01) na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return after taxes 56.06 48.58 5.93 5.26 (4.07) (7.23) (0.68) (1.56) na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return before taxes) 7.65 5.61 2.08 1.54 (7.36) (11.99) na na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return after taxes (4.74) (6.78) (1.35) (1.94) (7.36) (11.99) na na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return after taxes 3.15 1.51 0.87 0.42 (4.52) (7.36) na na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return before taxes) (4.05) (5.97) (3.99) (5.88) (7.20) (9.06) na na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return after taxes (4.05) (5.97) (3.99) (5.88) (7.20) (9.06) na na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return after taxes (3.24) (4.78) (3.19) (4.70) (4.42) (5.56) na na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return before taxes) 85.02 na 8.29 na (6.58) na (0.03) na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return after taxes 48.10 na 5.22 na (6.58) na (2.93) na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return after taxes 56.00 na 5.93 na (4.04) na (0.69) na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return before taxes) 242.86 na 10.14 na (6.43) na 0.22 na 8.57 na
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return after taxes 165.74 na 7.96 na (6.43) na (2.64) na 6.11 na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return after taxes 165.99 na 7.97 na (3.95) na (0.49) na 6.41 na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
MID CAP GROWTH FUND(1)
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return before taxes) 195.12 178.94 9.09 8.60 (22.74) (27.01) (4.60) (5.68) 7.32 6.72
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return after taxes 121.16 109.04 6.59 6.11 (22.74) (27.01) (9.23) (10.25) 4.29 3.71
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return after taxes 164.20 150.82 8.12 7.67 (13.96) (16.59) (3.04) (3.88) 6.52 5.98
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return before taxes) (25.06) (25.66) (6.72) (6.90) (23.47) (27.30) na na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return after taxes (39.90) (40.50) (11.55) (11.77) (23.47) (27.30) na na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return after taxes (16.84) (17.32) (4.35) (4.48) (14.41) (16.76) na na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return before taxes) (30.43) (31.15) (9.44) (9.69) (23.30) (24.90) na na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return after taxes (41.33) (41.94) (13.56) (13.80) (23.30) (24.90) na na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return after taxes (20.72) (21.34) (6.15) (6.35) (14.31) (15.29) na na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return before taxes) 195.12 na 9.09 na (22.74) na (4.60) na (7.32) na
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return after taxes 121.16 na 6.59 na (22.74) na (9.23) na 4.29 na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return after taxes 164.20 na 8.12 na (13.96) na (3.04) na 6.52 na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
12
- ---------------------------------------------------------------------------------------------------------------------------------
CUMULATIVE AVERAGE AVERAGE AVERAGE AVERAGE
SINCE ANNUAL ANNUAL ANNUAL ANNUAL
INCEPTION SINCE INCEPTION ONE YEAR FIVE YEAR TEN YEAR
- ---------------------------------------------------------------------------------------------------------------------------------
WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH
- ---------------------------------------------------------------------------------------------------------------------------------
SALES CHARGE SALES CHARGE SALES CHARGE SALES CHARGE SALES CHARGE
- ---------------------------------------------------------------------------------------------------------------------------------
% % % % % % % % % %
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return before taxes) (2.31) na (0.41) na (22.49) na (4.34) na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return after taxes (23.60) na (4.68) na (22.49) na (8.93) na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return after taxes 1.00 na 0.18 na (13.81) na (2.87) na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
SMALL CAP CORE FUND (1)(2)
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return before taxes) 147.42 133.86 9.10 8.51 (4.56) (9.83) 0.44 (0.69) 9.69 9.07
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return after taxes 90.43 79.99 6.39 5.81 (5.80) (11.01) (1.64) (2.75) 6.86 6.26
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return after taxes 92.41 82.96 6.49 5.98 (1.27) (4.59) 0.00 (0.89) 6.95 6.41
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return before taxes) 52.74 52.74 5.76 5.76 (5.23) (9.64) (0.24) (0.50) na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return after taxes 29.35 29.35 3.46 3.46 (6.54) (10.95) (2.40) (2.68) na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return after taxes 34.95 34.95 4.04 4.04 (1.58) (4.29) (0.54) (0.74) na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return before taxes) (3.06) (4.94) (3.02) (4.87) (5.09) (6.91) na na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return after taxes (4.33) (6.20) (4.26) (6.10) (6.33) (8.14) na na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return after taxes (2.06) (3.57) (2.03) (3.51) (1.59) (2.72) na na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return before taxes) na na (4.48) na 0.49 na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return after taxes na na (5.73) na (1.60) na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return after taxes na na (1.22) na 0.04 na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return before taxes) 153.54 na 9.36 na (4.19) na 0.74 na 9.96 na
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return after taxes 95.25 na 6.64 na (5.40) na (1.33) na 7.13 na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return after taxes 96.34 na 6.70 na (1.08) na 0.23 na 7.16 na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
SMALL CAP GROWTH FUND (1)(2)
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return before taxes) 175.89 160.69 6.75 6.36 (22.07) (26.38) (3.31) (4.40) 6.51 5.91
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return after taxes 108.80 97.29 4.85 4.47 (22.07) (26.38) (5.76) (6.82) 3.82 3.24
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return after taxes 125.24 113.92 5.36 5.01 (13.55) (16.20) (2.41) (3.26) 4.96 4.44
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return before taxes) (15.70) (16.88) (4.02) (4.34) (22.70) (26.57) na na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return after taxes (23.54) (24.71) (6.24) (6.58) (22.70) (26.57) na na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return after taxes (11.56) (12.50) (2.90) (3.15) (13.94) (16.31) na na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return before taxes) (22.36) (23.16) (6.68) (6.94) (22.69) (24.22) na na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return after taxes (29.26) (29.99) (9.03) (9.28) (22.69) (24.22) na na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return after taxes (16.99) (17.64) (4.96) (5.16) (13.93) (14.87) na na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return before taxes) 175.89 na 6.75 na (22.07) na (3.31) na 6.51 na
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return after taxes 108.80 na 4.85 na (22.07) na (5.76) na 3.82 na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
13
- ---------------------------------------------------------------------------------------------------------------------------------
CUMULATIVE AVERAGE AVERAGE AVERAGE AVERAGE
SINCE ANNUAL ANNUAL ANNUAL ANNUAL
INCEPTION SINCE INCEPTION ONE YEAR FIVE YEAR TEN YEAR
- ---------------------------------------------------------------------------------------------------------------------------------
WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH
- ---------------------------------------------------------------------------------------------------------------------------------
SALES CHARGE SALES CHARGE SALES CHARGE SALES CHARGE SALES CHARGE
- ---------------------------------------------------------------------------------------------------------------------------------
% % % % % % % % % %
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return after taxes 125.24 na 5.36 na (13.55) na (2.41) na 4.96 na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return before taxes) 178.30 na 6.81 na (22.00) na (3.14) na 6.60 na
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return after taxes 110.87 na 4.92 na (22.00) na (5.58) na 3.93 na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return after taxes 126.75 na 5.41 na (13.51) na (2.29) na 5.03 na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL FUND (1)(2)
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return before taxes) 9.21 3.22 1.05 0.38 (18.28) (22.76) (3.88) (4.96) na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return after taxes (2.74) (8.07) (0.33) (1.00) (18.28) (22.76) (5.84) (6.90) na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return after taxes 4.70 0.06 0.55 0.01 (11.23) (13.98) (3.40) (4.23) na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return before taxes) 9.15 9.15 1.16 1.16 (18.94) (22.99) (4.59) (4.87) na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return after taxes (2.56) (2.56) (0.34) (0.34) (18.94) (22.99) (6.52) (6.82) na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return after taxes 4.97 4.97 0.64 0.64 (11.63) (14.11) (3.90) (4.12) na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return before taxes) (14.68) (16.34) (14.46) (16.10) (18.97) (20.60) na na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return after taxes (14.68) (16.34) (14.46) (16.10) (18.97) (20.60) na na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return after taxes (11.74) (13.07) (11.57) (12.87) (11.65) (12.65) na na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return before taxes) 10.76 na 1.22 na (18.51) na (3.95) na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return after taxes (1.38) na (0.17) na (18.51) na (5.92) na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return after taxes 5.92 na 0.68 na (11.36) na (3.45) na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return before taxes) 13.20 na 1.47 na (18.05) na (3.61) na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return after taxes 1.78 na 0.21 na (18.05) na (5.39) na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return after taxes 8.93 na 1.01 na (11.08) na (3.00) na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
EMERGING MARKETS FUND(1)
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return before taxes) (37.60) (41.02) (5.17) (5.77) 5.96 0.16 (10.75) (11.75) na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return after taxes (37.68) (41.10) (5.18) (5.78) 5.96 0.16 (10.76) (11.77) na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return after taxes (30.11) (32.85) (3.95) (4.38) 3.66 0.10 (8.17) (8.88) na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return before taxes) (17.19) (18.85) (4.45) (4.91) 5.06 0.06 na na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return after taxes (17.19) (18.85) (4.45) (4.91) 5.06 0.06 na na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return after taxes (13.75) (15.08) (3.50) (3.86) 3.11 0.04 na na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return before taxes) (38.75) (39.36) (16.82) (17.13) 5.17 3.11 na na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return after taxes (38.75) (39.36) (16.13) (17.13) 5.17 3.11 na na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return after taxes (31.00) (31.49) (13.01) (13.24) 3.18 1.91 na na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
14
- ---------------------------------------------------------------------------------------------------------------------------------
CUMULATIVE AVERAGE AVERAGE AVERAGE AVERAGE
SINCE ANNUAL ANNUAL ANNUAL ANNUAL
INCEPTION SINCE INCEPTION ONE YEAR FIVE YEAR TEN YEAR
- ---------------------------------------------------------------------------------------------------------------------------------
WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH
- ---------------------------------------------------------------------------------------------------------------------------------
SALES CHARGE SALES CHARGE SALES CHARGE SALES CHARGE SALES CHARGE
- ---------------------------------------------------------------------------------------------------------------------------------
% % % % % % % % % %
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return before taxes) (37.72) na (5.19) na 5.77 na (10.78) na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return after taxes (37.87) na (5.21) na 5.64 na (10.82) na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return after taxes (30.23) na (3.97) na 3.55 na (8.20) na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return before taxes) (36.99) na (5.06) na 6.10 na (10.57) na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return after taxes (37.15) na (5.09) na 5.96 na (10.61) na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return after taxes (29.66) na (3.88) na 3.75 na (8.06) na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
FIXED INCOME FUND(1)
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return before taxes) 198.28 185.70 7.68 7.36 5.77 1.32 6.70 5.77 6.48 6.02
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return after taxes 112.72 103.75 5.24 4.93 3.78 (0.59) 4.38 3.47 4.02 3.57
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return after taxes 108.50 100.55 5.10 4.82 3.48 0.75 4.20 3.45 3.95 3.56
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return before taxes) 65.03 65.03 6.36 6.36 5.12 0.12 5.95 5.63 na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return after taxes 39.69 39.69 4.20 4.20 3.42 (1.58) 3.92 3.58 na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return after taxes 37.78 37.78 4.02 4.02 3.09 0.02 3.75 3.47 na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return before taxes) 20.32 19.16 5.18 4.91 5.02 3.02 na na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return after taxes 12.24 11.16 3.21 2.93 3.33 1.35 na na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return after taxes 11.96 11.07 3.13 2.91 3.03 1.81 na na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return before taxes) 198.29 na 7.68 na 5.77 na 6.70 na 6.48 na
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return after taxes 112.73 na 5.24 na 3.78 na 4.38 na 4.02 na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return after taxes 108.51 na 5.10 na 3.49 na 4.21 na 3.95 na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return before taxes) 74.19 na 6.62 na 6.04 na 6.97 na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return after taxes 41.78 na 4.12 na 3.94 na 4.56 na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return after taxes 40.77 na 4.03 na 3.64 na 4.38 na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
BOND IMMDEX FUND(1)(2)
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return before taxes) 83.46 75.68 8.17 7.57 6.18 1.68 7.10 6.17 na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return after taxes 53.01 46.53 5.66 5.07 3.84 (0.55) 4.64 3.74 na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return after taxes 49.52 44.04 5.35 4.84 3.72 0.97 4.46 3.70 na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return before taxes) 24.67 21.67 6.35 5.62 5.39 0.39 na na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return after taxes 15.77 12.77 4.17 3.41 3.36 (1.64) na na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return after taxes 15.04 12.64 3.99 3.38 3.26 0.19 na na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return before taxes) 6.14 4.09 6.03 4.02 5.41 3.38 na na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return after taxes 4.04 2.01 3.97 1.98 3.33 1.32 na na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return after taxes 3.85 2.24 3.79 2.20 3.26 2.02 na na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
15
- ---------------------------------------------------------------------------------------------------------------------------------
CUMULATIVE AVERAGE AVERAGE AVERAGE AVERAGE
SINCE ANNUAL ANNUAL ANNUAL ANNUAL
INCEPTION SINCE INCEPTION ONE YEAR FIVE YEAR TEN YEAR
- ---------------------------------------------------------------------------------------------------------------------------------
WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH
- ---------------------------------------------------------------------------------------------------------------------------------
SALES CHARGE SALES CHARGE SALES CHARGE SALES CHARGE SALES CHARGE
- ---------------------------------------------------------------------------------------------------------------------------------
% % % % % % % % % %
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return before taxes) 83.57 na 8.18 na 6.20 na 7.11 na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return after taxes 53.07 na 5.67 na 3.85 na 4.65 na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return after taxes 49.58 na 5.35 na 3.73 na 4.46 na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return before taxes) 173.25 na 8.20 na 6.44 na 7.36 na 7.26 na
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return after taxes 100.39 na 5.60 na 4.00 na 4.80 na 4.61 na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return after taxes 95.81 na 5.41 na 3.88 na 4.61 na 4.50 na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
STRATEGIC INCOME FUND(1)
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return before taxes) 10.22 5.57 2.35 1.30 3.19 (1.18) na na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return after taxes (2.84) (6.94) (0.69) (1.70) 0.08 (4.15) na na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return after taxes 1.61 (1.83) 0.38 (0.44) 1.99 (0.69) na na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return before taxes) 6.93 5.34 1.61 1.25 2.46 (2.31) na na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return after taxes (4.76) (6.35) (1.16) (1.56) (0.36) (5.13) na na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return after taxes (0.28) (1.55) (0.07) (0.37) 1.54 (1.38) na na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return before taxes) 8.54 7.41 2.26 1.97 2.44 0.53 na na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return after taxes (2.21) (3.22) (0.61) (0.89) (0.37) (2.26) na na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return after taxes 1.51 0.67 0.41 0.18 1.54 0.36 na na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return before taxes) 10.29 na 2.37 na 3.26 na na na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return after taxes (2.47) na (0.60) na 0.46 na na na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return after taxes 1.81 na 0.43 na 2.04 na na na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return before taxes) 11.32 na 2.59 na 3.44 na na na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return after taxes (2.25) na (0.54) na 0.23 na na na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return after taxes 2.22 na 0.53 na 2.14 na na na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
HIGH YIELD BOND FUND(1)
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return before taxes) (12.79) (16.46) (11.85) (15.28) (6.66) (10.60) na na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return after taxes (15.82) (19.36) (14.67) (17.99) (9.74) (13.55) na na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class A (return after taxes (11.54) (14.42) (10.69) (13.37) (3.97) (6.40) na na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return before taxes) (13.26) (17.24) (12.29) (16.01) (7.26) (11.54) na na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return after taxes (16.05) (20.04) (14.90) (18.63) (10.09) (14.37) na na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class B (return after taxes (11.81) (15.00) (10.94) (13.91) (4.35) (6.97) na na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return before taxes) (13.36) (15.01) (12.38) (13.92) (7.34) (9.07) na na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return after taxes (16.11) (17.73) (14.95) (16.47) (10.13) (11.84) na na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
16
- ---------------------------------------------------------------------------------------------------------------------------------
CUMULATIVE AVERAGE AVERAGE AVERAGE AVERAGE
SINCE ANNUAL ANNUAL ANNUAL ANNUAL
INCEPTION SINCE INCEPTION ONE YEAR FIVE YEAR TEN YEAR
- ---------------------------------------------------------------------------------------------------------------------------------
WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH
- ---------------------------------------------------------------------------------------------------------------------------------
SALES CHARGE SALES CHARGE SALES CHARGE SALES CHARGE SALES CHARGE
- ---------------------------------------------------------------------------------------------------------------------------------
% % % % % % % % % %
- ---------------------------------------------------------------------------------------------------------------------------------
Class C (return after taxes (11.87) (13.18) (11.00) (12.21) (4.39) (5.46) na na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return before taxes) (8.44) na (8.31) na (6.66) na na na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return after taxes (11.45) na (11.28) na (9.74) na na na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class S (return after taxes (8.05) na (7.92) na (3.98) na na na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return before taxes) (12.38) na (11.47) na (6.33) na na na na na
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return after taxes (15.49) na (14.37) na (9.49) na na na na na
on distributions)
- ---------------------------------------------------------------------------------------------------------------------------------
Class Y (return after taxes (11.25) na (10.42) na (3.77) na na na na na
on distributions and sale of
fund shares)
- ---------------------------------------------------------------------------------------------------------------------------------
(1) Inception dates for each Fund are as follows: Large Cap Core Fund Class A
(1/9/95), Class B (3/1/99), Class C (9/24/01), Class S (11/27/00), Class Y
(12/29/92); Large Cap Growth Fund Class A (12/18/92), Class B (8/15/94), Class C
(2/1/99), Class S (9/24/01), Class Y (8/2/94); Health Sciences Fund Class A
(1/31/96), Class B (1/31/96), Class C (2/1/00), Class S (9/24/01), Class Y
(1/312/96); Mid Cap Core Fund Class A (1/9/95), Class B (3/1/99), Class C
(9/24/01), Class S (12/11/00), Class Y (12/28/89); Mid Cap Growth Fund Class A
(7/31/98), Class B (7/31/98), Class C (2/1/99), Class S (9/24/01), Class Y
(2/4/94); Small Cap Core Fund Class A (5/6/92), Class B (3/6/95), Class C
(9/24/01), Class S (12/31/93), Class Y (5/6/92); Small Cap Growth Fund Class A
(7/31/98), Class B (7/31/98), Class C (2/1/99), Class S (9/24/01), Class Y
(7/31/98); International Fund Class A (1/9/95), Class B (3/1/99), Class C
(9/24/01), Class S (11/27/00), Class Y (12/29/92); Emerging Markets Fund Class A
(7/31/98), Class B (7/31/98), Class C (2/1/99), Class S (9/24/01), Class Y
(7/31/98); Fixed Income Fund Class A (12/22/87), Class B (8/15/94), Class C
(2/1/99), Class S (9/24/01), Class Y (4/4/94); Bond IMMDEX Fund Class A
(1/9/95), Class B (3/1/99), Class C (9/24/01), Class S (12/11/00), Class Y
(12/29/89); Strategic Income Fund Class A (7/20/98), Class B (7/20/98), Class C
(2/1/99), Class S (9/24/01), Class Y (7/20/98); High Yield Bond Fund Class A
(8/30/01), Class B (8/30/01), Class C (8/30/01), Class S (9/24/01), Class Y
(8/30/01).
(2) Firstar Large Cap Core Fund is the accounting survivor of the reorganization
transaction with First American Large Cap Core Fund, consummated on September
24, 2001. Firstar Mid Cap Core Fund is the accounting survivor of the
reorganization transaction with First American Mid Cap Core Fund, consummated on
September 24, 2001. Firstar Small Cap Core Fund is the accounting survivor of
the reorganization transaction with First American Small Cap Core Fund,
consummated on September 24, 2001. Piper Small Company Growth Fund is the
accounting survivor of First American Small Cap Growth Fund, consummated on July
31, 1998. Effective September 12, 1996, shareholders of Piper Small Company
Growth Fund approved a change in the Fund's investment objective from high total
investment return consistent with prudent investment risk to long-term capital
appreciation. In connection with this change, the fund's investment policies
were revised accordingly. Firstar International Growth Fund is the accounting
survivor of the reorganization transaction with First American International
Fund, consummated on September 24, 2001. Firstar Bond IMMDEX Fund is the
accounting survivor of the reorganization transaction with First American Bond
IMMDEX Fund, consummated on September 24, 2001.
17
FIRST AMERICAN LARGE CAP CORE FUND
PRO FORMA STATEMENT OF ASSETS AND LIABILITIES
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
SEPTEMBER 30, 2002
(UNAUDITED)
FIRST
FIRST FIRST FIRST AMERICAN
AMERICAN AMERICAN AMERICAN LARGE
LARGE CAP HEALTH FUNDS LARGE CAP GROWTH
GROWTH SCIENCES CAP CORE OPPORTUNITIES
FUND FUND FUND ADJUSTMENTS FUND (A)
- ---------------------------------------------------------------------------------------------------------------------------------
ASSETS:
Investments in securities, at value* $ 542,248 $ 24,509 $ 286,042 $ -- $ 852,799
Dividends and interest receivable 596 2 305 -- 903
Collateral for securities loaned, at value 271,641 11,168 131,167 -- 413,976
Receivable for securities sold 5,994 39 1,594 -- 7,627
Capital shares sold 369 3 248 -- 620
Other receivables 5 1 -- -- 6
Prepaid expenses and other assets 27 13 15 -- 55
- ---------------------------------------------------------------------------------------------------------------------------------
Total Assets 820,880 35,735 419,371 -- 1,275,986
- ---------------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Written options, at value 84 -- -- -- 84
Payable for securities purchased 4,040 187 1,929 -- 6,156
Capital shares redeemed 870 31 320 -- 1,221
Payable upon return of securities loaned 271,641 11,168 131,167 -- 413,976
Bank overdraft 1 1 1 -- 3
Payable for advisory, co-administration, and
custodian fees 349 16 205 -- 570
Distribution and shareholder servicing fees 55 7 9 -- 71
Accrued expenses and other liabilities 4 1 2 -- 7
- ---------------------------------------------------------------------------------------------------------------------------------
Total Liabilities 277,044 11,411 133,633 -- 422,088
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets $ 543,836 $ 24,324 $ 285,738 $ -- $ 853,898
=================================================================================================================================
COMPOSITION OF NET ASSETS:
Portfolio capital $ 953,245 $ 29,640 $ 382,486 $ -- $ 1,365,371
Undistributed net investment income -- -- 443 -- 443
Accumulated net realized loss (285,833) (1,576) (73,835) -- (361,244)
Unrealized depreciation of investments (123,614) (3,740) (23,356) -- (150,710)
Unrealized appreciation of options written 38 -- -- -- 38
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets $ 543,836 $ 24,324 $ 285,738 $ -- $ 853,898
=================================================================================================================================
*Investments in securities, at cost $ 665,862 $ 28,249 $ 309,398 $ -- $ 1,003,509
Class A:
Net Assets $ 52,419 $ 5,235 $ 24,647 $ -- $ 82,301
Shares issued and outstanding ($0.0001 par value
- 2 billion authorized) 7,754 662 1,286 (5,407)(b) 4,295
Net asset value and redemption price per share $ 6.76 $ 7.91 $ 19.16 $ -- $ 19.16
Maximum offering price per share (c) $ 7.15 $ 8.37 $ 20.29 $ -- $ 20.29
Class B:
Net Assets $ 36,546 $ 2,821 $ 2,928 $ -- $ 42,295
Shares issued and outstanding ($0.0001 par value
- 2 billion authorized) 5,673 376 157 (3,937)(b) 2,269
Net asset value and offering price per share (e) $ 6.44 $ 7.50 $ 18.64 $ -- $ 18.64
Class C:
Net assets $ 9,652 $ 3,815 $ 476 $ -- $ 13,943
Shares issued and outstanding ($0.0001 par value
- 2 billion authorized) 1,469 492 25 (1,253)(b) 733
Net asset value per share (e) $ 6.57 $ 7.76 $ 19.03 $ -- $ 19.03
Maximum offering price per share (d) $ 6.64 $ 7.84 $ 19.22 $ -- $ 19.22
Class S:
Net assets $ 9,020 $ 32 $ 2,376 $ -- $ 11,428
Shares issued and outstanding ($0.0001 par value
- 2 billion authorized) 1,335 4 124 (867)(b) 596
Net asset value, offering price, and redemption
price per share $ 6.76 $ 7.90 $ 19.17 $ -- $ 19.17
Class Y:
Net assets $ 436,199 $ 12,421 $ 255,311 $ -- $ 703,931
Shares issued and outstanding ($0.0001 par value
- 2 billion authorized) 63,592 1,552 13,036 (42,244)(b) 35,936
Net asset value, offering price, and redemption
price per share $ 6.86 $ 8.00 $ 19.59 $ -- $ 19.59
- ---------------------------------------------------------------------------------------------------------------------------------
(a) First American Large Cap Core Fund is the accounting survivor.
(b) Reflects new shares issued by acquiring fund, net of retired shares of the
acquired Fund.
(c) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.50%.
(d) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%
(e) Class B & C have a contingent deferred sales charge.
See accompanying notes to the pro forma financial statements.
18
FIRST AMERICAN MID CAP CORE FUND
PRO FORMA STATEMENT OF ASSETS AND LIABILITIES
(AMOUNT IN THOUSANDS, EXCEPT PER SHARE DATA)
SEPTEMBER 30, 2002
(UNAUDITED)
PRO FORMA
COMBINED
FIRST
FIRST AMERICAN MID
AMERICAN FIRST CAP GROWTH
MID CAP AMERICAN FUND
GROWTH MID CAP OPPORTUNITIES
FUND CORE FUND ADJUSTMENTS (a)
- -----------------------------------------------------------------------------------------------------------------------
ASSETS:
Investments in securities, at value* $ 226,757 $ 561,813 $ -- $ 788,570
Cash 519 188 -- 707
Dividends and interest receivable 71 218 -- 289
Collateral for securities loaned, at value 111,674 260,300 -- 371,974
Receivable for securities sold 1,721 5,558 -- 7,279
Capital shares sold 95 574 -- 669
Other receivables 1 6 -- 7
Prepaid expenses and other assets 17 22 -- 39
- -----------------------------------------------------------------------------------------------------------------------
Total Assets 340,855 828,679 -- 1,169,534
- -----------------------------------------------------------------------------------------------------------------------
LIABILITIES
Payable for securities purchased 5,709 3,747 -- 9,456
Capital shares redeemed 343 746 -- 1,089
Payable upon return of securities loaned 111,674 260,300 -- 371,974
Payable for advisory, co-administration, and
custodian fees 190 418 -- 608
Distribution and shareholder servicing fees 18 22 -- 40
Accrued expenses and other liabilities 4 2 -- 6
- -----------------------------------------------------------------------------------------------------------------------
Total Liabilities 117,938 265,235 -- 383,173
- -----------------------------------------------------------------------------------------------------------------------
Net Assets $ 222,917 $ 563,444 $ -- $ 786,361
=======================================================================================================================
COMPOSITION OF NET ASSETS:
Portfolio capital $ 472,351 $ 657,268 $ -- $ 1,129,619
Accumulated net investment loss -- (4) -- (4)
Accumulated net realized loss (223,536) (49,136) -- (272,672)
Unrealized depreciation of investments (25,898) (44,684) -- (70,582)
- -----------------------------------------------------------------------------------------------------------------------
Net Assets $ 222,917 $ 563,444 $ -- $ 786,361
=======================================================================================================================
*Investments in securities, at cost $ 252,655 $ 606,497 $ -- $ 859,152
Class A:
Net Assets $ 58,896 $ 75,002 $ -- $ 133,898
Shares issued and outstanding ($0.0001 par value
- 2 billion authorized) 13,538 2,836 (11,311)(b) 5,063
Net asset value and redemption price per share $ 4.35 $ 26.45 $ -- $ 26.45
Maximum offering price per share (c) $ 4.60 $ 27.99 $ -- $ 27.99
Class B:
Net Assets $ 2,578 $ 4,227 $ -- $ 6,805
Shares issued and outstanding ($0.0001 par value
- 2 billion authorized) 622 165 (521)(b) 266
Net asset value and offering price per share (e) $ 4.14 $ 25.56 $ -- $ 25.56
Class C:
Net assets $ 3,742 $ 1,136 $ -- $ 4,878
Shares issued and outstanding ($0.0001 par value
- 2 billion authorized) 896 43 (754)(b) 185
Net asset value per share (e) $ 4.18 $ 26.29 $ -- $ 26.29
Maximum offering price per share (d) $ 4.22 $ 26.56 $ -- $ 26.56
Class S:
Net assets $ 13 $ 5,869 $ -- $ 5,882
Shares issued and outstanding ($0.0001 par value
- 2 billion authorized) 3 222 (3)(b) 222
Net asset value, offering price, and redemption
price per share $ 4.35 $ 26.43 $ -- $ 26.43
Class Y:
Net assets $ 157,688 $ 477,210 $ -- $ 634,898
Shares issued and outstanding ($0.0001 par value
- 2 billion authorized) 35,232 17,515 (29,445)(b) 23,302
Net asset value, offering price, and redemption
price per share $ 4.48 $ 27.25 $ -- $ 27.25
- -----------------------------------------------------------------------------------------------------------------------
(a) First American Mid Cap Core Fund is the accounting survivor.
(b) Reflects new shares issued by acquiring fund, net of retired shares of the
acquired Fund.
(c) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.50%.
(d) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%.
(e) Class B & C have a contingent deferred sales charge.
See accompanying notes to the pro forma financial statements.
19
FIRST AMERICAN SMALL CAP CORE FUND
PRO FORMA STATEMENT OF ASSETS AND LIABILITIES
(AMOUNT IN THOUSANDS, EXCEPT PER SHARE DATA)
SEPTEMBER 30, 2002
(UNAUDITED)
PRO FORMA
COMBINED
FIRST
FIRST FIRST AMERICAN
AMERICAN AMERICAN SMALL
SMALL CAP SMALL CAP CAP SELECT
GROWTH FUND GROWTH FUND ADJUSTMENTS FUND (a)
- -------------------------------------------------------------------------------------------------------------------
ASSETS:
Investments in securities, at value* $ 242,076 $ 446,926 $ -- $ 689,002
Cash 142 670 -- 812
Dividends and interest receivable 134 73 -- 207
Collateral for securities loaned, at value 52,063 169,494 -- 221,557
Receivable for securities sold 6,120 6,546 -- 12,666
Capital shares sold 192 439 -- 631
Other receivables 1 9 -- 10
Prepaid expenses and other assets 18 29 -- 47
- -------------------------------------------------------------------------------------------------------------------
Total Assets 300,746 624,186 -- 924,932
- -------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 11,718 2,165 -- 13,883
Capital shares redeemed 489 233 -- 722
Payable upon return of securities loaned 52,063 169,494 -- 221,557
Payable for advisory, co-administration, and
custodian fees 185 316 -- 501
Distribution and shareholder servicing fees 12 15 -- 27
Accrued expenses and other liabilities 5 1 -- 6
- -------------------------------------------------------------------------------------------------------------------
Total Liabilities 64,472 172,224 -- 236,696
- -------------------------------------------------------------------------------------------------------------------
Net Assets $ 236,274 $ 451,962 $ -- $ 688,236
===================================================================================================================
COMPOSITION OF NET ASSETS
Portfolio capital $ 426,025 $ 521,477 $ -- $ 947,502
Accumulated net investment loss -- (2) -- (2)
Accumulated net realized loss (164,679) (15,582) -- (180,261)
Unrealized depreciation of investments (25,072) (53,931) -- (79,003)
- -------------------------------------------------------------------------------------------------------------------
Net Assets $ 236,274 $ 451,962 $ -- $ 688,236
===================================================================================================================
*Investments in securities, at cost $ 267,148 $ 500,857 $ -- $ 768,005
Class A:
Net Assets $ 22,397 $ 33,586 $ -- $ 55,983
Shares issued and outstanding ($0.0001 par value
- 2 billion authorized) 2,548 3,144 (451)(b) 5,241
Net asset value and redemption price per share $ 8.79 $ 10.68 $ -- $ 10.68
Maximum offering price per share (c) $ 9.30 $ 11.30 $ -- $ 11.30
Class B:
Net Assets $ 3,933 $ 4,613 $ -- $ 8,546
Shares issued and outstanding ($0.0001 par value
- 2 billion authorized) 487 463 (92)(b) 858
Net asset value and offering price per share (e) $ 8.07 $ 9.95 $ -- $ 9.95
Class C:
Net assets $ 4,659 $ 3,096 $ -- $ 7,755
Shares issued and outstanding ($0.0001 par value
- 2 billion authorized) 547 292 (108)(b) 731
Net asset value per share (e) $ 8.52 $ 10.62 $ -- $ 10.62
Maximum offering price per share (d) $ 8.61 $ 10.73 $ -- $ 10.73
Class S:
Net assets $ 32 $ 7,640 $ -- $ 7,672
Shares issued and outstanding ($0.0001 par value
- 2 billion authorized) 4 717 (1)(b) 720
Net asset value, offering price, and redemption
price per share $ 8.79 $ 10.66 $ -- $ 10.66
Class Y:
Net assets $ 205,253 $ 403,027 $ -- $ 608,280
Shares issued and outstanding ($0.0001 par value
- 2 billion authorized) 22,877 36,650 (4,218)(b) 55,309
Net asset value, offering price, and redemption
price per share $ 8.97 $ 11.00 $ -- $ 11.00
- -------------------------------------------------------------------------------------------------------------------
(a) First American Small Cap Core Fund is the accounting survivor.
(b) Reflects new shares issued by acquiring fund, net of retired shares of the
acquired Fund.
(c) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.50%.
(d) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%.
(e) Class B & C have a contingent deferred sales charge.
See accompanying notes to the pro forma financial statements.
20
FIRST AMERICAN INTERNATIONAL FUND
PRO FORMA STATEMENT OF ASSETS AND LIABILITIES
(AMOUNT IN THOUSANDS, EXCEPT PER SHARE DATA)
SEPTEMBER 30, 2002
(UNAUDITED)
PRO FORMA
FIRST COMBINED
AMERICAN FIRST FIRST
EMERGING AMERICAN AMERICAN
MARKETS INTERNATIONAL INTERNATIONAL
FUND FUND ADJUSTMENTS FUND (A)
- --------------------------------------------------------------------------------------------------------------------
ASSETS:
Investments in securities, at value* $ 48,773 $ 604,677 $ -- $ 653,450
Cash denominated in foreign currencies, at
value** 453 1,751 -- 2,204
Dividends and interest receivable 60 2,447 -- 2,507
Receivable for securities sold 261 243 -- 504
Capital shares sold 2 469 -- 471
Other receivables -- 78 -- 78
Prepaid expenses and other assets 15 30 -- 45
- --------------------------------------------------------------------------------------------------------------------
Total Assets 49,564 609,695 -- 659,259
- --------------------------------------------------------------------------------------------------------------------
LIABILITIES
Payable for securities purchased 492 213 -- 705
Capital shares redeemed 12 1,115 -- 1,127
Bank overdraft 212 773 -- 985
Payable for advisory, co-administration, and
custodian fees 1 544 -- 545
Distribution and shareholder servicing fees 1 15 -- 16
Accrued expenses and other liabilities -- 5 -- 5
- --------------------------------------------------------------------------------------------------------------------
Total Liabilities 718 2,665 -- 3,383
- --------------------------------------------------------------------------------------------------------------------
Net Assets $ 48,846 $ 607,030 $ -- $ 655,876
====================================================================================================================
COMPOSITION OF NET ASSETS:
Portfolio capital $ 59,823 $ 1,027,930 $ -- $ 1,087,753
Accumulated net investment income (loss) 1 (5) -- (4)
Accumulated net realized loss (9,231) (268,575) -- (277,806)
Net unrealized depreciation of investments (1,742) (152,331) -- (154,073)
Net unrealized appreciation (depreciation) of
foreign currency, and translation of other
assets and liabilities in foreign currency (5) 11 -- 6
- --------------------------------------------------------------------------------------------------------------------
Net Assets $ 48,846 $ 607,030 $ -- $ 655,876
====================================================================================================================
*Investments in securities at cost $ 50,515 $ 757,008 $ -- $ 807,523
**Cash denominated in foreign currencies, at cost 458 1,740 -- 2,198
Class A:
Net Assets $ 2,487 $ 37,232 $ -- $ 39,719
Shares issued and outstanding ($0.0001 par value
- 2 billion authorized) 400 5,081 (61)(b) 5,420
Net asset value and redemption price per share $ 6.22 $ 7.33 $ -- $ 7.33
Maximum offering price per share (c) $ 6.58 $ 7.76 $ -- $ 7.76
Class B:
Net Assets $ 252 $ 7,459 $ -- $ 7,711
Shares issued and outstanding ($0.0001 par value
- 2 billion authorized) 42 1,088 (5)(b) 1,125
Net asset value and offering price per share (e) $ 6.02 $ 6.85 $ -- $ 6.85
Class C:
Net assets $ 90 $ 11,027 $ -- $ 11,117
Shares issued and outstanding ($0.0001 par value
- 2 billion authorized) 15 1,555 (2)(b) 1,568
Net asset value per share (e) $ 6.10 $ 7.09 $ -- $ 7.09
Maximum offering price per share (d) $ 6.16 $ 7.16 $ -- $ 7.16
Class S:
Net assets $ 11 $ 10,817 $ -- $ 10,828
Shares issued and outstanding ($0.0001 par value
- 2 billion authorized) 2 1,479 --(b) 1,481
Net asset value, offering price, and redemption
price per share $ 6.19 $ 7.31 $ -- $ 7.31
Class Y:
Net assets $ 46,006 $ 540,495 $ -- $ 586,501
Shares issued and outstanding ($0.0001 par value
- 2 billion authorized) 7,347 73,052 (1,130)(b) 79,269
Net asset value, offering price, and redemption
price per share $ 6.26 $ 7.40 $ -- $ 7.40
- --------------------------------------------------------------------------------------------------------------------
(a) First American International Fund is the accounting survivor.
(b) Reflects new shares issued by acquiring fund, net of retired shares of the
acquired Fund.
(c) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.50%.
(d) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%.
(e) Class B & C have a contingent deferred sales charge.
21
FIRST AMERICAN FIXED INCOME FUND
PRO FORMA STATEMENT OF ASSETS AND LIABILITIES
(AMOUNT IN THOUSANDS, EXCEPT PER SHARE DATA)
SEPTEMBER 30, 2002
(UNAUDITED)
PRO FORMA
FIRST FIRST COMBINED
AMERICAN AMERICAN FIRST
BOND IMMDEX FIXED INCOME AMERICAN CORE
FUND FUND ADJUSTMENTS BOND FUND (a)
- ----------------------------------------------------------------------------------------------------------------------------
ASSETS:
Investments in securities, at value* $ 820,817 $ 1,443,763 $ -- $ 2,264,580
Cash 30 13,324 -- 13,354
Dividends and interest receivable 11,397 13,237 -- 24,634
Collateral for securities loaned, at value 417,238 443,510 -- 860,748
Receivable for securities sold -- 13,008 -- 13,008
Capital shares sold 1,971 936 -- 2,907
Prepaid expenses and other assets 24 44 -- 68
- ----------------------------------------------------------------------------------------------------------------------------
Total Assets 1,251,477 1,927,822 -- 3,179,299
- ----------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased -- 95,164 -- 95,164
Capital shares redeemed 1,193 1,737 -- 2,930
Payable upon return of securities loaned 417,238 443,510 -- 860,748
Payable for advisory, co-administration, and
custodian fees 309 765 -- 1,074
Distribution and shareholder servicing fees 27 54 -- 81
Accrued expenses and other liabilities 2 -- -- 2
- ----------------------------------------------------------------------------------------------------------------------------
Total Liabilities 418,769 541,230 -- 959,999
- ----------------------------------------------------------------------------------------------------------------------------
Net Assets $ 832,708 $ 1,386,592 $ -- $ 2,219,300
============================================================================================================================
COMPOSITION OF NET ASSETS:
Portfolio capital $ 783,917 $ 1,348,677 $ -- $ 2,132,594
Accumulated net investment income 2,441 -- -- 2,441
Accumulated net realized loss (854) (25,795) -- (26,649)
Unrealized appreciation of investments 47,204 63,710 -- 110,914
- ----------------------------------------------------------------------------------------------------------------------------
Net Assets $ 832,708 $ 1,386,592 $ -- $ 2,219,300
============================================================================================================================
*Investments in securities, at cost $ 773,613 $ 1,380,053 $ 2,306,006
Class A:
Net Assets $ 87,096 $ 122,354 $ -- $ 209,450
Shares issued and outstanding ($0.0001 par value
- 2 billion authorized) 2,982 10,682 4,625(b) 18,289
Net asset value and redemption price per share $ 29.21 $ 11.45 -- $ 11.45
Maximum offering price per share (c) $ 30.51 $ 11.96 -- $ 11.96
Class B:
Net Assets $ 14,592 $ 16,741 $ -- $ 31,333
Shares issued and outstanding ($0.0001 par value
- 2 billion authorized) 500 1,471 782(b) 2,753
Net asset value and offering price per share (e) $ 29.18 $ 11.38 -- $ 11.38
Class C:
Net assets $ 1,919 $ 9,672 $ -- $ 11,591
Shares issued and outstanding ($0.0001 par value
- 2 billion authorized) 66 847 102(b) 1,015
Net asset value per share (e) $ 29.16 $ 11.42 -- $ 11.42
Maximum offering price per share (d) $ 29.45 $ 11.54 -- $ 11.54
Class S:
Net assets $ 18,179 $ 33,270 $ -- $ 51,449
Shares issued and outstanding ($0.0001 par value
- 2 billion authorized) 622 2,905 966(b) 4,493
Net asset value, offering price, and redemption
price per share $ 29.21 $ 11.45 -- $ 11.45
Class Y:
Net assets $ 710,922 $ 1,204,555 $ -- $ 1,915,477
Shares issued and outstanding ($0.0001 par value
- 2 billion authorized) 24,322 105,171 37,767(b) 167,260
Net asset value, offering price, and redemption
price per share $ 29.23 $ 11.45 -- $ 11.45
- ----------------------------------------------------------------------------------------------------------------------------
(a) First American Fixed Income Fund is the accounting survivor.
(b) Reflects new shares issued by acquiring fund, net of retired shares of the
acquired Fund.
(c) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.50%.
(d) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%.
(e) Class B & C have a contingent deferred sales charge.
See accompanying notes to the pro forma financial statements.
22
FIRST AMERICAN STRATEGIC INCOME FUND
PRO FORMA STATEMENT OF ASSETS AND LIABILITIES
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
SEPTEMBER 30, 2002
(UNAUDITED)
PRO FORMA
COMBINED
FIRST FIRST FIRST
AMERICAN AMERICAN AMERICAN
STRATEGIC HIGH HIGH
INCOME YIELD BOND INCOME BOND
FUND FUND ADJUSTMENTS FUND (a)
- --------------------------------------------------------------------------------------------------------------------
ASSETS:
Investments in securities, at value* $ 145,843 $ 52,244 $ -- $ 198,087
Cash 15,458 -- -- 15,458
Dividends and interest receivable 3,278 1,356 -- 4,634
Receivable for securities sold 2,951 -- -- 2,951
Capital shares sold 72 58 -- 130
Prepaid expenses and other assets 16 16 -- 32
- --------------------------------------------------------------------------------------------------------------------
Total Assets 167,618 53,674 -- 221,292
- --------------------------------------------------------------------------------------------------------------------
LIABILITIES
Payable for securities purchased 3,262 406 -- 3,668
Capital shares redeemed 156 93 -- 249
Payable for advisory, co-administration, and
custodian fees 119 31 -- 150
Distribution and shareholder servicing fees 12 12 -- 24
Accrued expenses and other liabilities -- 1 -- 1
- --------------------------------------------------------------------------------------------------------------------
Total Liabilities 3,549 543 -- 4,092
- --------------------------------------------------------------------------------------------------------------------
Net Assets $ 164,069 $ 53,131 $ -- $ 217,200
====================================================================================================================
COMPOSITION OF NET ASSETS:
Portfolio capital $ 207,066 $ 62,226 $ -- $ 269,292
Undistributed net investment income 3 -- -- 3
Accumulated net realized loss on investments (31,528) (3,648) -- (35,176)
Net unrealized depreciation of investments (11,465) (5,447) -- (16,912)
Net unrealized depreciation on forward foreign
currency contracts, foreign currency, and
translation of assets and liabilities denominated in
foreign currency (7) -- -- (7)
- --------------------------------------------------------------------------------------------------------------------
Net Assets $ 164,069 $ 53,131 $ -- $ 217,200
====================================================================================================================
*Investments in securities, at cost $ 157,308 $ 57,691 $ -- $ 214,999
Class A:
Net Assets $ 18,006 $ 23,900 $ -- $ 41,906
Shares issued and outstanding ($0.0001 par value
- 2 billion authorized) 2,254 3,001 8(b) 5,263
Net asset value and redemption price per share $ 7.99 $ 7.96 $ -- $ 7.96
Maximum offering price per share (c) $ 8.34 $ 8.31 $ -- $ 8.31
Class B:
Net Assets $ 4,179 $ 774 $ -- $ 4,953
Shares issued and outstanding ($0.0001 par value
- 2 billion authorized) 525 97 (1)(b) 621
Net asset value and offering price per share (e) $ 7.96 $ 7.97 $ -- $ 7.97
Class C:
Net assets $ 6,213 $ 7,213 $ -- $ 13,426
Shares issued and outstanding ($0.0001 par value
- 2 billion authorized) 780 905 --(b) 1,685
Net asset value per share (e) $ 7.96 $ 7.97 $ -- $ 7.97
Maximum offering price per share (d) $ 8.04 $ 8.05 $ -- $ 8.05
Class S:
Net assets $ 6 $ 87 $ -- $ 93
Shares issued and outstanding ($0.0001 par value
- 2 billion authorized) 1 11 --(b) 12
Net asset value, offering price, and redemption
price per share $ 8.06 $ 7.96 $ -- $ 7.96
Class Y:
Net assets $ 135,665 $ 21,157 $ -- $ 156,822
Shares issued and outstanding ($0.0001 par value
- 2 billion authorized) 16,973 2,653 28(b) 19,654
Net asset value, offering price, and redemption
price per share $ 7.99 $ 7.98 $ -- $ 7.98
- --------------------------------------------------------------------------------------------------------------------
(a) First American High Yield Bond Fund is the accounting survivor.
(b) Reflects new shares issued by acquiring fund, net of retired shares of the
acquired Fund.
(c) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.50%.
(d) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%.
(e) Class B & C have a contingent deferred sales charge.
See accompanying notes to the pro forma financial statements
23
FIRST AMERICAN LARGE CAP CORE FUND
PRO FORMA STATEMENT OF OPERATIONS
(AMOUNTS IN THOUSANDS)
FOR THE YEAR ENDED SEPTEMBER 30, 2002
(UNAUDITED)
PRO FORMA
COMBINED
FIRST
FIRST FIRST FIRST AMERICAN
AMERICAN AMERICAN AMERICAN LARGE CAP
LARGE CAP HEALTH LARGE GROWTH
GROWTH SCIENCES CAP CORE OPPORTUNITIES
FUND FUND FUND ADJUSTMENTS FUND (a)
- ---------------------------------------------------------------------------------------------------------------------------------
Investment Income:
Interest $ 172 $ 32 $ 518 -- $ 722
Dividends 3,377 178 3,468 -- 7,023
Less: Foreign taxes withheld (1) -- (3) -- (4)
Securities lending 79 7 91 -- 177
Other 6 6 6 -- 18
- ---------------------------------------------------------------------------------------------------------------------------------
Total investment income 3,633 223 4,080 -- 7,936
Expenses:
Investment advisory fees 2,511 212 2,328 (15)(b) 5,036
Co-administration fees and expenses (including per
account transfer agency fees) 1,264 195 1,030 (185)(c) 2,304
Custodian fees 39 3 36 -- 78
Directors' fees 7 2 4 (9)(d) 4
Registration fees 45 35 48 (80)(d) 48
Professional fees 8 1 6 (9)(d) 6
Printing 25 3 16 (28)(d) 16
Other 21 3 8 -- 32
Distribution and shareholder servicing fees - Class A 73 16 83 -- 172
Distribution and shareholder servicing fees - Class B 471 34 34 -- 539
Distribution and shareholder servicing fees - Class C 43 49 4 -- 96
Shareholder servicing fees - Class S 33 -- 6 -- 39
- ---------------------------------------------------------------------------------------------------------------------------------
Total expenses 4,540 553 3,603 (326) 8,370
Less: Waiver of expenses (443) (158) (250) 302 (549)
- ---------------------------------------------------------------------------------------------------------------------------------
Total next expenses 4,097 395 3,553 (24) 7,821
- ---------------------------------------------------------------------------------------------------------------------------------
Investment income (loss) - net (464) (172) 727 24 115
- ---------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gains (Losses) on Investments:
Net realized loss on investments (122,684) (1,421) (38,565) -- (162,670)
Net realized loss on options written (856) -- -- -- (856)
Net change in unrealized appreciation or depreciation of
written options 244 -- -- -- 244
Net change in unrealized appreciation or depreciation of
investments (98,811) (4,687) (37,497) -- (141,995)
- ---------------------------------------------------------------------------------------------------------------------------------
Net loss on investments (223,107) (6,108) (76,062) -- (305,277)
- ---------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets resulting from operations $(223,571) $(6,280) $(75,335) $ 24 $(305,162)
=================================================================================================================================
(a) First American Large Cap Core Fund is the accounting survivor.
(b) Reflects decrease in management fee structure for former shareholders
of Health Sciences Fund.
(c) Adjustment based on the contractual agreements with the transfer agent
for a combined fund.
(d) Reflects anticipated savings from the merger.
See accompanying notes to the pro forma financial statements.
24
FIRST AMERICAN MID CAP CORE FUND
PRO FORMA STATEMENT OF OPERATIONS
(AMOUNTS IN THOUSANDS)
FOR THE YEAR ENDED SEPTEMBER 30, 2002
(UNAUDITED)
PRO FORMA
COMBINED
FIRST
FIRST FIRST AMERICAN MID
AMERICAN AMERICAN CAP GROWTH
MID CAP MID CAP OPPORTUNITIES
GROWTH FUND CORE FUND ADJUSTMENTS FUND (a)
- --------------------------------------------------------------------------------------------------------------------------------
Investment Income:
Interest $ 264 $ 562 $ -- $ 826
Dividends 636 4,326 -- 4,962
Less: Foreign taxes withheld -- (7) -- (7)
Securities lending 153 202 -- 355
Other 8 405 -- 413
- --------------------------------------------------------------------------------------------------------------------------------
Total investment income 1,061 5,488 -- 6,549
Expenses:
Investment advisory fees 2,289 4,356 -- 6,645
Co-administration fees and expenses (including per
account transfer agency fees) 1,117 1,722 (93)(b) 2,746
Custodian fees 33 62 -- 95
Directors fees 4 8 (4)(c) 8
Registration fees 25 70 (25)(c) 70
Professional fees 6 11 (6)(c) 11
Printing 6 40 (6)(c) 40
Other 4 10 -- 14
Distribution and shareholder servicing fees - Class A 236 227 -- 463
Distribution and shareholder servicing fees - Class B 38 40 -- 78
Distribution and shareholder servicing fees - Class C 60 4 -- 64
Shareholder servicing fees - Class S -- 14 -- 14
- --------------------------------------------------------------------------------------------------------------------------------
Total expenses 3,818 6,564 (134) 10,248
Less: Waiver of expenses (378) (369) 131 (616)
- --------------------------------------------------------------------------------------------------------------------------------
Total net expenses 3,440 6,195 (3) 9,632
- --------------------------------------------------------------------------------------------------------------------------------
Investment loss - net (2,379) (707) 3 (3,083)
- --------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gains (Losses) on Investments:
Net realized loss on investments (95,549) (33,072) -- (128,621)
Net change in unrealized appreciation or depreciation of
investments 33,512 (19,320) -- 14,192
- --------------------------------------------------------------------------------------------------------------------------------
Net loss on investments (62,037) (52,392) -- (114,429)
- --------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets resulting from operations $(64,416) $(53,099) $ 3 $(117,512)
================================================================================================================================
(a) First American Mid Cap Core Fund is the accounting survivor.
(b) Adjustment based on the contractual agreements with the transfer agent
for the combined fund.
(c) Reflects anticipated savings from the merger.
See accompanying notes to the pro forma financial statements.
25
FIRST AMERICAN SMALL CAP CORE FUND
PRO FORMA STATEMENT OF OPERATIONS
(AMOUNTS IN THOUSANDS)
FOR THE YEAR ENDED SEPTEMBER 30, 2002
(UNAUDITED)
PRO FORMA
COMBINED
FIRST FIRST
AMERICAN FIRST AMERICAN
SMALL CAP AMERICAN SMALL CAP
GROWTH SMALL CAP SELECT
FUND CORE FUND ADJUSTMENTS FUND (a)
- ------------------------------------------------------------------------------------------------------------------------------
Investment Income:
Interest $ 366 $ 660 $ -- $ 1,026
Dividends 710 1,019 -- 1,729
Less: Foreign taxes withheld (5) (6) -- (11)
Securities lending 198 180 -- 378
Other 351 98 -- 449
- ------------------------------------------------------------------------------------------------------------------------------
Total investment income 1,620 1,951 -- 3,571
Expenses:
Investment advisory fees 2,483 3,316 -- 5,799
Co-administration fees and expenses (including per
account transfer agency fees) 1,070 1,289 (93)(b) 2,266
Custodian fees 36 47 -- 83
Directors' fees 5 5 (5)(c) 5
Registration fees 34 39 (34)(c) 39
Professional fees 14 7 (14)(c) 7
Printing 14 20 (14)(c) 20
Other 20 11 -- 31
Distribution and shareholder servicing fees - Class A 80 77 -- 157
Distribution and shareholder servicing fees - Class B 53 37 -- 90
Distribution and shareholder servicing fees - Class C 66 15 -- 81
Shareholder servicing fees - Class S -- 18 -- 18
- ------------------------------------------------------------------------------------------------------------------------------
Total expenses 3,875 4,881 (160) 8,596
Less: Waiver of expenses (199) (183) 84 (298)
- ------------------------------------------------------------------------------------------------------------------------------
Total net expenses 3,676 4,698 (76) 8,298
- ------------------------------------------------------------------------------------------------------------------------------
Investment loss - net (2,056) (2,747) 76 (4,727)
- ------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gains (Losses) on Investments:
Net realized loss on investments (91,989) (14,145) -- (106,134)
Net change in unrealized appreciation (depreciation) of
investments 25,583 (37,514) -- (8,931)
- ------------------------------------------------------------------------------------------------------------------------------
Net loss on investments (63,406) (51,659) -- (115,065)
- ------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets resulting from operations $(65,462) $(54,406) $ 76 $(119,792)
==============================================================================================================================
(a) First American Small Cap Core Fund is the accounting survivor.
(b) Adjustment based on the contractual agreements with the transfer agent
for the combined fund.
(c) Reflects anticipated savings from the merger.
See accompanying notes to the pro forma financial statements.
26
FIRST AMERICAN INTERNATIONAL FUND
PRO FORMA STATEMENT OF OPERATIONS
(AMOUNTS IN THOUSANDS)
FOR THE YEAR ENDED SEPTEMBER 30, 2002
(UNAUDITED)
PRO FORMA
FIRST COMBINED
AMERICAN FIRST FIRST
EMERGING AMERICAN AMERICAN
MARKETS INTERNATIONAL INTERNATIONAL
FUND FUND ADJUSTMENTS FUND (a)
- --------------------------------------------------------------------------------------------------------------------------------
Investment Income:
Interest $ -- $ 544 $ -- $ 544
Dividends 857 12,882 -- 13,739
Less: Foreign taxes withheld (69) (1,435) -- (1,504)
Securities lending -- 914 -- 914
Other 56 34 -- 90
- --------------------------------------------------------------------------------------------------------------------------------
Total investment income 844 12,939 -- 13,783
Expenses:
Investment advisory fees 628 8,354 (27)(d) 8,955
Co-administration fees and expenses (including per
account transfer agency fees) 222 2,175 (93)(b) 2,304
Custodian fees 8 75 -- 83
Directors' fees 1 5 (1)(c) 5
Registration fees 28 48 (28)(c) 48
Professional fees 4 14 (4)(c) 14
Printing 3 40 (3)(c) 40
Other 5 24 -- 29
Distribution and shareholder servicing fees - Class A 8 139 -- 147
Distribution and shareholder servicing fees - Class B 2 101 -- 103
Distribution shareholder and servicing fees - Class C 1 158 -- 159
Shareholder servicing fees - Class S -- 31 -- 31
- --------------------------------------------------------------------------------------------------------------------------------
Total expenses 910 11,164 (156) 11,918
Less: Waiver of expenses (104) (480) 92 (492)
- --------------------------------------------------------------------------------------------------------------------------------
Total net expenses 806 10,684 (64) 11,426
- --------------------------------------------------------------------------------------------------------------------------------
Investment loss - net 38 2,255 64 2,357
- --------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gains (Losses) on Investments and
Foreign Currency Transactions - Net:
Net realized loss on investments (1,566) (111,725) -- (113,291)
Net realized loss on foreign currency transactions (166) (704) -- (870)
Net change in unrealized appreciation or depreciation of
investments 4,364 (21,835) -- (17,471)
Net change in unrealized appreciation or depreciation of
foreign currency, and translation of other assets and
liabilities denominated in foreign currency (13) (145) -- (158)
- --------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments 2,619 (134,409) -- (131,790)
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $ 2,657 $(132,154) $ 64 $(129,433)
================================================================================================================================
(a) First American International Fund is the accounting survivor.
(b) Adjustment based on the contractual agreements with the transfer for
the combined fund.
(c) Reflects the anticipated savings of the merger.
(d) Reflects decrease in management fee structure for former shareholders
of Emerging Markets Fund.
See accompanying notes to the pro forma financial statements.
27
FIRST AMERICAN FIXED INCOME FUND
PRO FORMA STATEMENT OF OPERATIONS
(AMOUNTS IN THOUSANDS)
FOR THE YEAR ENDED SEPTEMBER 30, 2002
(UNAUDITED)
FIRST PRO FORMA
FIRST AMERICAN COMBINED
AMERICAN FIXED FIRST
BOND IMMDEX INCOME AMERICAN CORE
FUND FUND ADJUSTMENTS BOND FUND (a)
- ----------------------------------------------------------------------------------------------------------------------------------
Investment Income:
Interest $ 49,876 $ 83,000 $ -- $ 132,876
Dividends -- -- -- --
Securities lending 331 393 -- 724
Other -- 773 -- 773
- ----------------------------------------------------------------------------------------------------------------------------------
Total investment income 50,207 84,166 -- 134,373
Expenses:
Investment advisory fees 2,332 7,158 1,555(d) 11,045
Co-administration fees and expenses (including per
account transfer agency fees) 2,007 3,673 (93)(b) 5,587
Custodian fees 83 143 -- 226
Directors' fees 6 16 (6)(c) 16
Registration fees 37 70 (37)(c) 70
Professional fees 13 39 (13)(c) 39
Printing 28 33 (28)(c) 33
Other 11 47 -- 58
Distribution and shareholder servicing fees - Class A 213 292 -- 505
Distribution and shareholder servicing fees - Class B 114 155 -- 269
Distribution and shareholder servicing fees - Class C 6 94 -- 100
Shareholder servicing fees - Class S 35 81 -- 116
- ----------------------------------------------------------------------------------------------------------------------------------
Total expenses 4,885 11,801 1,378 18,064
Less: Waiver of expenses (786) (1,157) 332 (1,611)
- ----------------------------------------------------------------------------------------------------------------------------------
Total net expenses 4,099 10,644 1,710 16,453
- ----------------------------------------------------------------------------------------------------------------------------------
Investment income - net 46,108 73,522 (1,710) 117,920
- ----------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gains (Losses) on Investments:
Net realized gain (loss) on investments (749) 13,696 -- 12,947
Net change in unrealized appreciation or depreciation of
investments 3,892 (5,915) -- (2,023)
- ----------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments 3,143 7,781 -- 10,924
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 49,251 $ 81,303 $(1,710) $ 128,844
==================================================================================================================================
(a) First American Fixed Income Fund is the accounting survivor.
(b) Adjustment based on the contractual agreements with the transfer agent
for the combined fund.
(c) Reflects anticipated savings from the merger.
(d) Reflects the increase in management fees for the former shareholders
of the Bond IMMDEX(TM) Fund.
See accompanying notes to the pro forma financial statements.
28
FIRST AMERICAN STRATEGIC INCOME FUND
PRO FORMA STATEMENT OF OPERATIONS
(AMOUNTS IN THOUSANDS)
FOR THE YEAR ENDED SEPTEMBER 30, 2002
(UNAUDITED)
PRO FORMA
COMBINED
FIRST FIRST FIRST
AMERICAN AMERICAN AMERICAN
STRATEGIC HIGH YIELD HIGH INCOME
FUND BOND FUND ADJUSTMENTS FUND (A)
- -----------------------------------------------------------------------------------------------------------------------------
Investment Income:
Interest $ 16,289 $ 4,275 $ -- $ 20,564
Dividends 61 98 -- 159
Other 108 41 -- 149
- -----------------------------------------------------------------------------------------------------------------------------
Total investment income 16,458 4,414 -- 20,872
Expenses:
Investment advisory fees 1,257 349 -- 1,606
Co-administration fees and expenses (including per
account transfer agency fees) 537 228 (93)(b) 672
Custodian fees 18 5 -- 23
Directors' fees 2 1 (2)(c) 1
Registration fees 18 28 (18)(c) 28
Professional fees 6 2 (6)(c) 2
Printing 6 4 (6)(c) 4
Other 4 2 -- 6
Distribution and shareholder servicing fees - Class A 47 76 -- 123
Distribution and shareholder servicing fees - Class B 36 4 -- 40
Distribution and shareholder servicing fees - Class C 55 60 -- 115
Shareholder servicing fees - Class S -- -- -- 0
- -----------------------------------------------------------------------------------------------------------------------------
Total expenses 1,986 759 (125) 2,620
Less: Waiver of expenses (142) (198) 177 (63)
- -----------------------------------------------------------------------------------------------------------------------------
Total net expenses 1,844 561 52 2,457
- -----------------------------------------------------------------------------------------------------------------------------
Investment income - net 14,614 3,853 (52) 18,415
- -----------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gains (Losses) on Investments:
Net realized loss on investments (13,064) (3,620) -- (16,684)
Net realized gain on forward foreign currency contracts
and foreign currency transactions 2 -- -- 2
Net change in unrealized appreciation or depreciation of
investments 4,732 (4,667) -- 65
Net change in unrealized appreciation or depreciation of
forward foreign currency contracts, foreign currency,
and translation of other assets and liabilities
denominated in foreign currency (19) -- -- (19)
- -----------------------------------------------------------------------------------------------------------------------------
Net loss on investments (8,349) (8,287) -- (16,636)
- -----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $ 6,265 $(4,434) $ (52) $ 1,779
=============================================================================================================================
(a) First American High Yield Bond Fund is the accounting survivor.
(b) Adjustment based on the contractual agreements with the transfer agent
for the combined fund.
(c) Reflects anticipated savings from the merger.
See accompanying notes to the pro forma financial statements.
29
FIRST AMERICAN LARGE CAP CORE FUND
PRO FORMA SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2002
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(Percentages of each investment category relate to pro forma combined total net
assets)
PRO FORMA
FIRST FIRST FIRST COMBINED FIRST
AMERICAN AMERICAN AMERICAN AMERICAN LARGE
LARGE CAP HEALTH LARGE CAP CAP GROWTH
GROWTH FUND SCIENCES CORE FUND OPPORTUNITIES
SHARES FUND SHARES SHARES FUND SHARES
----------- ----------- ---------- --------------
Common Stocks - 94.9%
Consumer Discretionary - 13.7%
AOL Time Warner* (A) 356,490 -- 233,850 590,340
Autozone* (A) -- -- 32,900 32,900
Best Buy* (A) 126,105 -- 44,550 170,655
Carnival (A) -- -- 92,300 92,300
Clear Channel Communications (A) 105,990 -- 23,000 128,990
Costco Wholesale* (A) -- -- 22,900 22,900
Cox Communications, Cl A 59,000 -- -- 59,000
Dollar General 307,500 -- 167,300 474,800
Dow Jones & Company (A) -- -- 11,700 11,700
Gannett (A) -- -- 22,300 22,300
Harley-Davidson (A) 34,100 -- 36,200 70,300
Home Depot (A) 309,647 -- 143,800 453,447
Interpublic Group Companies (A) -- -- 26,700 26,700
Johnson Controls (A) 28,700 -- -- 28,700
Jones Apparel Group* (A) 45,500 -- -- 45,500
Kohl's* (A) 78,275 -- 43,000 121,275
Lowe's (A) 118,200 -- 45,000 163,200
McDonald's -- -- 85,900 85,900
MGM MIRAGE* (A) 80,000 -- 32,500 112,500
Office Depot* (A) 238,100 -- 160,100 398,200
Omnicom Group (A) 24,400 -- 15,900 40,300
Ross Stores 40,800 -- -- 40,800
Target 134,250 -- 61,300 195,550
Toys 'R' Us* (A) -- -- 77,300 77,300
Viacom, CI B* (A) 40,610 -- 51,087 91,697
Wal-Mart Stores (A) 409,440 -- 101,600 511,040
Walt Disney -- -- 112,100 112,100
Yum! Brands* 50,800 -- -- 50,800
Commercial Services & Supplies - 0.0%
IMS Health -- 12,300 -- 12,300
Consumer Staples - 9.4%
Anheuser-Busch (A) 100,850 -- 43,900 144,750
Avon Products (A) -- -- 23,700 23,700
Clorox -- -- 17,500 17,500
Coca-Cola 184,480 -- 84,300 268,780
H.J. Heinz (A) 108,090 -- -- 108,090
Kimberly-Clark 170,100 -- -- 170,100
Kraft Foods (A) 158,100 -- 32,900 191,000
Kroger* (A) 115,600 -- -- 115,600
PepsiCo 173,750 -- 94,600 268,350
Philip Morris 135,800 -- 80,400 216,200
Procter & Gamble 71,500 -- 41,600 113,100
Safeway* (A) 106,354 -- -- 106,354
Sysco (A) -- -- 51,900 51,900
Walgreen 90,490 -- 42,900 133,390
Energy - 4.7%
Amerada Hess 5,900 -- -- 5,900
Anadarko Petroleum (A) 75,125 -- 28,000 103,125
Apache (A) 48,500 -- 21,530 70,030
Baker Hughes (A) -- -- 47,000 47,000
Chevron Texaco -- -- 53,515 53,515
ConocoPhilips, Cl B -- -- 96,700 96,700
ENSCO International (A) -- -- 42,900 42,900
EOG Resources -- -- 43,100 43,100
Exxon Mobil 44,266 -- 99,900 144,166
GlobalSantaFe (A) 174,322 -- -- 174,322
Marathon Oil 84,930 -- -- 84,930
Murphy Oil (A) 43,900 -- -- 43,900
Nabors Industries* (A) -- -- 26,000 26,000
Schlumberger (A) -- -- 31,400 31,400
Transocean Sedco Forex 93,400 -- 30,700 124,100
Financials - 12.2%
ACE (A) 61,320 -- -- 61,320
AFLAC (A) -- -- 61,500 61,500
Allstate -- -- 29,500 29,500
Ambac Financial Group (A) -- -- 23,000 23,000
American Express 93,200 -- 47,900 141,100
American International Group 193,729 -- 98,645 292,374
Bank of America -- -- 63,700 63,700
BB&T (A) -- -- 47,100 47,100
Capital One Financial (A) 26,690 -- 36,100 62,790
Chubb -- -- 27,000 27,000
Citigroup (A) 133,526 -- 170,049 303,575
Fannie Mae 125,030 -- 57,300 182,330
Federal Home Loan Mortgage 86,180 -- 73,100 159,280
Fifth Third Bancorp (A) -- -- 54,050 54,050
Goldman Sachs Group (A) 25,710 -- -- 25,710
Hartford Financial Services Group -- -- 52,600 52,600
J P Morgan Chase -- -- 113,700 113,700
Lehman Brothers Holdings (A) 37,420 -- -- 37,420
MBNA (A) 208,050 -- 239,412 447,462
Mellon Financial -- -- 47,400 47,400
Merrill Lynch & Company (A) -- -- 63,600 63,600
Morgan Stanley -- -- 55,000 55,000
State Street (A) -- -- 40,500 40,500
TCF Financial (A) 42,230 -- -- 42,230
Travelers Property Casualty, Cl A* -- -- 7,346 7,346
Travelers Property Casualty, Cl B* -- -- 15,094 15,094
Washington Mutual (A) 141,980 -- -- 141,980
Wells Fargo 69,270 -- 80,400 149,670
PRO FORMA
COMBINED FIRST
AMERICAN LARGE
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN CAP GROWTH
LARGE CAP HEALTH SCIENCES LARGE CAP CORE OPPORTUNITIES
GROWTH FUND FUND MARKET FUND MARKET FUND MARKET
MARKET VALUE VALUE VALUE VALUE
-------------- --------------- -------------- --------------
Common Stocks - 94.9%
Consumer Discretionary - 13.7%
AOL Time Warner* (A) $ 4,171 $ -- $ 2,736 $ 6,907
Autozone* (A) -- -- 2,594 2,594
Best Buy* (A) 2,813 -- 994 3,807
Carnival (A) -- -- 2,317 2,317
Clear Channel Communications (A) 3,683 -- 799 4,482
Costco Wholesale* (A) -- -- 741 741
Cox Communications, Cl A 1,451 -- -- 1,451
Dollar General 4,127 -- 2,245 6,372
Dow Jones & Company (A) -- -- 449 449
Gannett (A) -- -- 1,610 1,610
Harley-Davidson (A) 1,584 -- 1,681 3,265
Home Depot (A) 8,082 -- 3,753 11,835
Interpublic Group Companies (A) -- -- 423 423
Johnson Controls (A) 2,205 -- -- 2,205
Jones Apparel Group* (A) 1,397 -- -- 1,397
Kohl's* (A) 4,760 -- 2,615 7,375
Lowe's (A) 4,893 -- 1,863 6,756
McDonald's -- -- 1,517 1,517
MGM MIRAGE* (A) 2,984 -- 1,212 4,196
Office Depot* (A) 2,938 -- 1,976 4,914
Omnicom Group (A) 1,359 -- 885 2,244
Ross Stores 1,454 -- -- 1,454
Target 3,963 -- 1,810 5,773
Toys 'R' Us* (A) -- -- 787 787
Viacom, CI B* (A) 1,647 -- 2,072 3,719
Wal-Mart Stores (A) 20,161 -- 5,003 25,164
Walt Disney -- -- 1,697 1,697
Yum! Brands* 1,408 -- -- 1,408
-------------- --------------- -------------- --------------
75,080 -- 41,779 116,859
-------------- --------------- -------------- --------------
Commercial Services & Supplies - 0.0%
-------------- --------------- -------------- --------------
IMS Health -- 184 -- 184
-------------- --------------- -------------- --------------
-- 184 -- 184
-------------- --------------- -------------- --------------
Consumer Staples - 9.4%
Anheuser-Busch (A) 5,103 -- 2,221 7,324
Avon Products (A) -- -- 1,093 1,093
Clorox -- -- 703 703
Coca-Cola 8,848 -- 4,043 12,891
H.J. Heinz (A) 3,607 -- -- 3,607
Kimberly-Clark 9,634 -- -- 9,634
Kraft Foods (A) 5,764 -- 1,200 6,964
Kroger* (A) 1,630 -- -- 1,630
PepsiCo 6,420 -- 3,495 9,915
Philip Morris 5,269 -- 3,120 8,389
Procter & Gamble 6,391 -- 3,718 10,109
Safeway* (A) 2,372 -- -- 2,372
Sysco (A) -- -- 1,473 1,473
Walgreen 2,783 -- 1,320 4,103
-------------- --------------- -------------- --------------
57,821 -- 22,386 80,207
-------------- --------------- -------------- --------------
Energy - 4.7%
Amerada Hess 401 -- -- 401
Anadarko Petroleum (A) 3,346 -- 1,247 4,593
Apache (A) 2,883 -- 1,280 4,163
Baker Hughes (A) -- -- 1,364 1,364
Chevron Texaco -- -- 3,706 3,706
ConocoPhilips, Cl B -- -- 4,471 4,471
ENSCO International (A) -- -- 1,074 1,074
EOG Resources -- -- 1,550 1,550
Exxon Mobil 1,412 -- 3,187 4,599
GlobalSantaFe (A) 3,896 -- -- 3,896
Marathon Oil 1,926 -- -- 1,926
Murphy Oil (A) 3,603 -- -- 3,603
Nabors Industries* (A) -- -- 851 851
Schlumberger (A) -- -- 1,208 1,208
Transocean Sedco Forex 1,943 -- 639 2,582
-------------- --------------- -------------- --------------
19,410 -- 20,577 39,987
-------------- --------------- -------------- --------------
Financials - 12.2%
ACE (A) 1,816 -- -- 1,816
AFLAC (A) -- -- 1,887 1,887
Allstate -- -- 1,049 1,049
Ambac Financial Group (A) -- -- 1,239 1,239
American Express 2,906 -- 1,494 4,400
American International Group 10,597 -- 5,396 15,993
Bank of America -- -- 4,064 4,064
BB&T (A) -- -- 1,650 1,650
Capital One Financial (A) 932 -- 1,261 2,193
Chubb -- -- 1,480 1,480
Citigroup (A) 3,959 -- 5,042 9,001
Fannie Mae 7,444 -- 3,412 10,856
Federal Home Loan Mortgage 4,817 -- 4,086 8,903
Fifth Third Bancorp (A) -- -- 3,309 3,309
Goldman Sachs Group (A) 1,698 -- -- 1,698
Hartford Financial Services Group -- -- 2,157 2,157
J P Morgan Chase -- -- 2,159 2,159
Lehman Brothers Holdings (A) 1,835 -- -- 1,835
MBNA (A) 3,824 -- 4,400 8,224
Mellon Financial -- -- 1,229 1,229
Merrill Lynch & Company (A) -- -- 2,096 2,096
Morgan Stanley -- -- 1,863 1,863
State Street (A) -- -- 1,565 1,565
TCF Financial (A) 1,788 -- -- 1,788
Travelers Property Casualty, Cl A* -- -- 97 97
Travelers Property Casualty, Cl B* -- -- 204 204
Washington Mutual (A) 4,468 -- -- 4,468
Wells Fargo 3,336 -- 3,872 7,208
-------------- --------------- -------------- --------------
49,420 -- 55,011 104,431
-------------- --------------- -------------- --------------
30
FIRST AMERICAN LARGE CAP CORE FUND
PRO FORMA SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2002
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(Percentages of each investment category relate to pro forma combined total net
assets)
PRO FORMA
FIRST FIRST FIRST COMBINED FIRST
AMERICAN AMERICAN AMERICAN AMERICAN LARGE
LARGE CAP HEALTH LARGE CAP CAP GROWTH
GROWTH FUND SCIENCES CORE FUND OPPORTUNITIES
SHARES FUND SHARES SHARES FUND SHARES
----------- ----------- ---------- --------------
Health Care - 23.9%
Abbott Laboratories 245,460 31,700 79,500 356,660
Advance PCS* (A) -- 12,300 -- 12,300
AmerisourceBergen (A) -- 5,072 -- 5,072
Amgen* (A) 278,410 20,260 73,000 371,670
Andrx Group* (A) 55,500 6,600 -- 62,100
Anthem* -- -- 11,000 11,000
Apria Healthcare Group* -- 14,830 -- 14,830
Baxter International 143,980 19,500 132,600 296,080
Biogen* 83,900 7,200 17,300 108,400
Biomet (A) 94,140 3,700 39,500 137,340
Cardinal Health (A) 129,855 5,475 40,775 176,105
Caremark Rx* (A) -- 10,800 -- 10,800
Community Health Systems* (A) -- 10,600 -- 10,600
Covance* -- 12,200 -- 12,200
CTI Molecular Imaging* -- 6,900 -- 6,900
Eli Lilly (A) 57,660 -- -- 57,660
First Health Group* (A) -- 5,200 -- 5,200
First Horizon Pharmaceutical* -- 53,500 -- 53,500
Forest Laboratories, Cl A* (A) 44,400 3,700 19,600 67,700
Gilead Sciences* (A) 114,430 20,500 40,200 175,130
HCA - Healthcare (A) 166,100 6,000 44,300 216,400
HealthSouth* -- 29,450 134,600 164,050
IDEC Pharmaceuticals* (A) 41,180 14,500 36,600 92,280
Johnson & Johnson 278,850 14,500 80,600 373,950
King Pharmaceuticals* (A) 41,300 37,466 59,500 138,266
Laboratory Corporation of America* (A) -- 8,600 -- 8,600
Lifecore Biomedical* -- 16,500 -- 16,500
Lincare Holdings* -- 4,900 -- 4,900
Manor Care* (A) -- 5,900 -- 5,900
McKesson HBOC -- 10,100 -- 10,100
Medtronic (A) 378,110 14,900 68,300 461,310
Omnicare (A) -- 14,775 -- 14,775
Pfizer (A) 1,001,090 58,900 232,275 1,292,265
Pharmacia 336,330 17,067 103,000 456,397
Pharmaceutical Product Development* (A) -- 10,600 -- 10,600
Priority Healthcare, Cl B -- 8,700 -- 8,700
Province Healthcare* -- 9,400 -- 9,400
Quest Diagnostics* (A) -- 3,000 -- 3,000
Schering-Plough 78,000 -- -- 78,000
Select Medical* -- 14,475 -- 14,475
Triad Hospitals* (A) -- 8,600 -- 8,600
Universal Health Services* (A) -- 7,000 -- 7,000
Varian Medical Systems* -- 4,500 -- 4,500
Wellpoint Health Networks* (A) 46,570 1,800 -- 48,370
Wyeth (A) 300,310 33,600 47,200 381,110
Zimmer Holdings* 63,879 6,770 41,090 111,739
Industrials -9.3%
3M 41,290 -- 16,900 58,190
Automatic Data Processing 42,000 -- -- 42,000
Boeing 148,710 -- 64,400 213,110
Cendant* (A) 107,200 -- -- 107,200
Concord EFS* (A) 84,910 -- -- 84,910
General Dynamics 20,300 -- 22,100 42,400
General Electric 1,170,960 -- 222,800 1,393,760
Honeywell International 71,570 -- 28,100 99,670
Illinois Tool Works (A) 18,464 -- 15,400 33,864
Molex, Cl A -- -- 85,037 85,037
Robert Half International* (A) -- -- 36,600 36,600
Sabre Holdings* -- -- 24,000 24,000
Southwest Airlines (A) 198,600 -- 124,750 323,350
SPX* 27,800 -- -- 27,800
Union Pacific (A) -- -- 30,500 30,500
United Parcel Service, CI B (A) 53,300 -- -- 53,300
United Technologies (A) 51,630 -- 38,200 89,830
Information Technology - 16.8%
Accenture* (A) -- -- 64,100 64,100
Adobe Systems 49,500 -- 22,700 72,200
Agilent Technologies* (A) 62,100 -- -- 62,100
Analog Devices* (A) 47,740 -- 67,900 115,640
Applied Materials* (A) 122,480 -- 82,200 204,680
BEA Systems* (A) 198,050 -- -- 198,050
Cisco Systems* 1,028,288 -- 221,500 1,249,788
Dell Computer* (A) 421,150 -- 123,900 545,050
Electronic Data Systems (A) 50,930 -- 16,800 67,730
EMC* (A) 141,170 -- -- 141,170
First Data 45,800 -- 119,200 165,000
Fiserv* -- -- 36,000 36,000
Hewlett-Packard (A) -- -- 170,656 170,656
Intel (A) 930,770 -- 164,000 1,094,770
International Business Machines 127,540 -- -- 127,540
JDS Uniphase* (A) -- -- 117,120 117,120
KLA-Tencor* (A) 13,800 -- 26,600 40,400
Lexmark International Group* (A) 33,580 -- -- 33,580
Linear Technology -- -- 37,600 37,600
Maxim Integrated Products* 49,960 -- -- 49,960
Mercury Interactive* (A) 34,760 -- 18,500 53,260
Micron Technology* (A) 117,700 -- 55,100 172,800
Microsoft* (A) 619,770 -- 218,200 837,970
Network Appliance* (A) -- -- 56,200 56,200
Novellus Systems* (A) 22,820 -- 31,300 54,120
Oracle Systems* 811,620 -- 95,300 906,920
Qlogic* (A) -- -- 21,500 21,500
QUALCOMM* (A) 181,410 -- 51,400 232,810
Rational Software* 129,520 -- 73,500 203,020
SunGard Data Systems* (A) -- -- 46,600 46,600
Teradyne* (A) -- -- 26,800 26,800
Texas Instruments 388,250 -- 111,600 499,850
USA Networks* 136,800 -- 66,700 203,500
VERITAS Software* (A) 117,390 -- -- 117,390
Xilinx* (A) 73,460 -- 40,700 114,160
PRO FORMA
COMBINED FIRST
AMERICAN LARGE
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN CAP GROWTH
LARGE CAP HEALTH SCIENCES LARGE CAP CORE OPPORTUNITIES
GROWTH FUND FUND MARKET FUND MARKET FUND MARKET
MARKET VALUE VALUE VALUE VALUE
-------------- --------------- -------------- --------------
Health Care - 23.9%
Abbott Laboratories 9,917 1,281 3,212 14,410
Advance PCS* (A) -- 277 -- 277
AmerisourceBergen (A) -- 362 -- 362
Amgen* (A) 11,610 845 3,044 15,499
Andrx Group* (A) 1,229 146 -- 1,375
Anthem* -- 0 715 715
Apria Healthcare Group* -- 349 -- 349
Baxter International 4,399 596 4,051 9,046
Biogen* 2,456 211 506 3,173
Biomet (A) 2,507 98 1,052 3,657
Cardinal Health (A) 8,077 341 2,536 10,954
Caremark Rx* (A) -- 184 -- 184
Community Health Systems* (A) -- 282 -- 282
Covance* -- 239 -- 239
CTI Molecular Imaging* -- 175 -- 175
Eli Lilly (A) 3,191 0 -- 3,191
First Health Group* (A) -- 141 -- 141
First Horizon Pharmaceutical* -- 289 -- 289
Forest Laboratories, Cl A* (A) 3,641 303 1,607 5,551
Gilead Sciences* (A) 3,837 687 1,348 5,872
HCA - Healthcare (A) 7,908 286 2,109 10,303
HealthSouth* -- 122 559 681
IDEC Pharmaceuticals* (A) 1,710 602 1,520 3,832
Johnson & Johnson 15,080 784 4,359 20,223
King Pharmaceuticals* (A) 750 681 1,081 2,512
Laboratory Corporation of America* (A) -- 290 -- 290
Lifecore Biomedical* -- 102 -- 102
Lincare Holdings* -- 152 -- 152
Manor Care* (A) -- 133 -- 133
McKesson HBOC -- 286 -- 286
Medtronic (A) 15,926 628 2,877 19,431
Omnicare (A) -- 312 -- 312
Pfizer (A) 29,052 1,709 6,741 37,502
Pharmacia 13,077 664 4,005 17,746
Pharmaceutical Product Development* (A) -- 205 -- 205
Priority Healthcare, Cl B -- 219 -- 219
Province Healthcare* -- 161 -- 161
Quest Diagnostics* (A) -- 185 -- 185
Schering-Plough 1,663 -- -- 1,663
Select Medical* -- 207 -- 207
Triad Hospitals* (A) -- 326 -- 326
Universal Health Services* (A) -- 358 -- 358
Varian Medical Systems* -- 193 -- 193
Wellpoint Health Networks* (A) 3,414 132 -- 3,546
Wyeth (A) 9,550 1,068 1,501 12,119
Zimmer Holdings* 2,449 260 1,575 4,284
-------------- --------------- -------------- --------------
151,443 16,871 44,398 212,712
-------------- --------------- -------------- --------------
Industrials -9.3%
3M 4,541 -- 1,859 6,400
Automatic Data Processing 1,460 -- -- 1,460
Boeing 5,075 -- 2,198 7,273
Cendant* (A) 1,153 -- -- 1,153
Concord EFS* (A) 1,348 -- -- 1,348
General Dynamics 1,651 -- 1,797 3,448
General Electric 28,864 -- 5,492 34,356
Honeywell International 1,550 -- 609 2,159
Illinois Tool Works (A) 1,077 -- 898 1,975
Molex, Cl A -- -- 1,786 1,786
Robert Half International* (A) -- -- 581 581
Sabre Holdings* -- -- 464 464
Southwest Airlines (A) 2,594 -- 1,629 4,223
SPX* 2,805 -- -- 2,805
Union Pacific (A) -- -- 1,765 1,765
United Parcel Service, CI B (A) 3,333 -- -- 3,333
United Technologies (A) 2,917 -- 2,158 5,075
-------------- --------------- -------------- --------------
58,368 -- 21,236 79,604
-------------- --------------- -------------- --------------
Information Technology - 16.8%
Accenture* (A) -- -- 915 915
Adobe Systems 945 -- 434 1,379
Agilent Technologies* (A) 811 -- -- 811
Analog Devices* (A) 940 -- 1,338 2,278
Applied Materials* (A) 1,415 -- 949 2,364
BEA Systems* (A) 1,026 -- -- 1,026
Cisco Systems* 10,776 -- 2,321 13,097
Dell Computer* (A) 9,901 -- 2,913 12,814
Electronic Data Systems (A) 712 -- 235 947
EMC* (A) 645 -- -- 645
First Data 1,280 -- 3,332 4,612
Fiserv* -- -- 1,011 1,011
Hewlett-Packard (A) -- -- 1,992 1,992
Intel (A) 12,928 -- 2,278 15,206
International Business Machines 7,447 -- -- 7,447
JDS Uniphase* (A) -- -- 228 228
KLA-Tencor* (A) 386 -- 743 1,129
Lexmark International Group* (A) 1,578 -- -- 1,578
Linear Technology -- -- 779 779
Maxim Integrated Products* 1,237 -- -- 1,237
Mercury Interactive* (A) 596 -- 317 913
Micron Technology* (A) 1,456 -- 682 2,138
Microsoft* (A) 27,109 -- 9,544 36,653
Network Appliance* (A) -- -- 412 412
Novellus Systems* (A) 475 -- 651 1,126
Oracle Systems* 6,379 -- 749 7,128
Qlogic* (A) -- -- 560 560
QUALCOMM* (A) 5,011 -- 1,420 6,431
Rational Software* 560 -- 318 878
SunGard Data Systems* (A) -- -- 906 906
Teradyne* (A) -- -- 257 257
Texas Instruments 5,734 -- 1,648 7,382
USA Networks* 2,651 -- 1,293 3,944
VERITAS Software* (A) 1,722 -- -- 1,722
Xilinx* (A) 1,163 -- 645 1,808
-------------- --------------- -------------- --------------
31
FIRST AMERICAN LARGE CAP CORE FUND
PRO FORMA SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2002
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(Percentages of each investment category relate to pro forma combined total net
assets)
PRO FORMA
FIRST FIRST FIRST COMBINED FIRST
AMERICAN AMERICAN AMERICAN AMERICAN LARGE
LARGE CAP HEALTH LARGE CAP CAP GROWTH
GROWTH FUND SCIENCES CORE FUND OPPORTUNITIES
SHARES FUND SHARES SHARES FUND SHARES
----------- ----------- ---------- --------------
Materials - 2.0%
Air Products and Chemicals 32,960 -- -- 32,960
Alcoa (A) 75,270 -- 63,900 139,170
E.I. DuPont de Nemours 37,100 -- 54,900 92,000
Ecolab (A) 81,145 -- -- 81,145
International Paper (A) -- -- 30,000 30,000
Nucor -- -- 17,300 17,300
Praxair -- -- 52,300 52,300
Vulcan Materials (A) -- -- 27,400 27,400
Weyerhaeuser (A) -- -- 15,100 15,100
Pharmaceuticals & Biotechnology - 1.7%
Amylin Pharmaceuticals* (A) -- 10,000 -- 10,000
Array Biopharma* -- 27,800 -- 27,800
BioMarin Pharmaceutical* -- 24,100 -- 24,100
Celgene* (A) -- 33,900 -- 33,900
Cephalon* (A) -- 10,600 -- 10,600
Charles River Labaratories International* (A) -- 11,660 -- 11,660
CV Therapeutics* -- 6,400 -- 6,400
Exact Sciences* -- 12,700 -- 12,700
Harvard Bioscience* -- 11,900 -- 11,900
ICOS* -- 5,800 -- 5,800
Invitrogen* (A) -- 12,415 -- 12,415
Medicis, Cl A* (A) -- 6,300 -- 6,300
Neurocrine Biosciences* (A) -- 4,100 -- 4,100
Novartis, ADR -- 3,300 -- 3,300
Noven Pharmaceuticals* -- 10,005 -- 10,005
NPS Pharmaceuticals* (A) -- 11,000 -- 11,000
Pharmaceutical Resources* -- 5,200 -- 5,200
POZEN* -- 13,015 -- 13,015
Regeneration Technologies* -- 35,200 -- 35,200
Sanofi-Synthelabo, ADR* -- 4,700 -- 4,700
Techne* (A) -- 14,070 -- 14,070
Telik * -- 28,520 -- 28,520
Teva Pharmaceutical Industries, ADR -- 7,700 -- 7,700
Third Wave Technologies* -- 105,500 -- 105,500
Software & Services - 0.0%
Cerner* -- 5,100 -- 5,100
TriZetto Group* -- 41,520 -- 41,520
Technology Hardware & Equipment - 0.0%
Waters* -- 4,800 -- 4,800
Telecommunication Services - 0.8%
ALLTEL (A) -- -- 40,000 40,000
AT&T (A) -- -- 75,100 75,100
Sprint PCS Group* (A) 173,630 -- -- 173,630
Verizon Communications (A) 35,142 -- 109,100 144,242
Utilities - 0.4%
Constellation Energy (A) -- -- 50,700 50,700
Exelon -- -- 41,000 41,000
Mirant* (A) 81,710 -- -- 81,710
Total Common Stocks
Related Party Money Market Fund - 4.9%
First American Prime Obligations Fund (B) 16,775,728 1,077,744 23,883,028 41,736,500
Total Related Party Money Market Fund
Total Investments - 99.8%
(Cost $665,862, $28,249, 309,398, and
$1,003,509 respectively)
PRO FORMA
COMBINED FIRST
AMERICAN LARGE
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN CAP GROWTH
LARGE CAP HEALTH SCIENCES LARGE CAP CORE OPPORTUNITIES
GROWTH FUND FUND MARKET FUND MARKET FUND MARKET
MARKET VALUE VALUE VALUE VALUE
-------------- --------------- -------------- --------------
104,883 -- 38,870 143,753
-------------- --------------- -------------- --------------
Materials - 2.0%
Air Products and Chemicals 1,385 -- -- 1,385
Alcoa (A) 1,453 -- 1,233 2,686
E.I. DuPont de Nemours 1,338 -- 1,980 3,318
Ecolab (A) 3,386 -- -- 3,386
International Paper (A) -- -- 1,002 1,002
Nucor -- -- 656 656
Praxair -- -- 2,673 2,673
Vulcan Materials (A) -- -- 991 991
Weyerhaeuser (A) -- -- 661 661
-------------- --------------- -------------- --------------
7,562 -- 9,196 16,758
-------------- --------------- -------------- --------------
Pharmaceuticals & Biotechnology - 1.7%
Amylin Pharmaceuticals* (A) -- 166 -- 166
Array Biopharma* -- 217 -- 217
BioMarin Pharmaceutical* -- 140 -- 140
Celgene* (A) -- 571 -- 571
Cephalon* (A) -- 433 -- 433
Charles River Labaratories International* (A) -- 458 -- 458
CV Therapeutics* -- 134 -- 134
Exact Sciences* -- 170 -- 170
Harvard Bioscience* -- 36 -- 36
ICOS* -- 122 -- 122
Invitrogen* (A) -- 423 -- 423
Medicis, Cl A* (A) -- 257 -- 257
Neurocrine Biosciences* (A) -- 168 -- 168
Novartis, ADR -- 131 -- 131
Noven Pharmaceuticals* -- 122 -- 122
NPS Pharmaceuticals* (A) -- 226 -- 226
Pharmaceutical Resources* -- 145 -- 145
POZEN* -- 66 -- 66
Regeneration Technologies* -- 282 -- 282
Sanofi-Synthelabo, ADR* -- 134 -- 134
Techne* (A) -- 461 -- 461
Telik * -- 353 -- 353
Teva Pharmaceutical Industries, ADR -- 516 -- 516
Third Wave Technologies* -- 142 -- 142
-------------- --------------- -------------- --------------
-- 5,873 -- 5,873
-------------- --------------- -------------- --------------
Software & Services - 0.0%
Cerner* -- 180 -- 180
TriZetto Group* -- 207 -- 207
-------------- --------------- -------------- --------------
-- 387 -- 387
-------------- --------------- -------------- --------------
Technology Hardware & Equipment - 0.0%
Waters* -- 116 -- 116
-------------- --------------- -------------- --------------
Telecommunication Services - 0.8%
ALLTEL (A) -- -- 1,605 1,605
AT&T (A) -- -- 902 902
Sprint PCS Group* (A) 340 -- -- 340
Verizon Communications (A) 964 -- 2,994 3,958
-------------- --------------- -------------- --------------
1,304 -- 5,501 6,805
-------------- --------------- -------------- --------------
Utilities - 0.4%
Constellation Energy (A) -- -- 1,257 1,257
Exelon -- -- 1,948 1,948
Mirant* (A) 181 -- -- 181
-------------- --------------- -------------- --------------
181 -- 3,205 3,386
-------------- --------------- -------------- --------------
Total Common Stocks 525,472 23,431 262,159 811,062
-------------- --------------- -------------- --------------
Related Party Money Market Fund - 4.9%
First American Prime Obligations Fund (B) 16,776 1,078 23,883 41,737
-------------- --------------- -------------- --------------
Total Related Party Money Market Fund 16,776 1,078 23,883 41,737
-------------- --------------- -------------- --------------
Total Investments - 99.8%
(Cost $665,862, $28,249, 309,398, and
$1,003,509 respectively) $ 542,248 $ 24,509 $ 286,042 $ 852,799
===================================================================
* Non-income producing security
(A) This security or a portion of this security is out on loan at September 20,
2002.
(B) This money market fund is advised by U.S. Bancorp Asset Management, Inc.,
which also serves as the advisor for this Fund.
Cl - Class
32
FIRST AMERICAN MID CAP CORE FUND
PRO FORMA SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2002
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(Percentages of each investment category relate to pro forma combined total net
assets
PRO FORMA
PRO FORMA COMBINED
COMBINED FIRST
FIRST AMERICAN
FIRST FIRST AMERICAN FIRST FIRST MID CAP
AMERICAN AMERICAN MID CAP AMERICAN AMERICAN GROWTH
MID CAP MID CAP GROWTH MID CAP MID CAP OPPORTUNITIES
GROWTH FUND CORE FUND OPPORTUNITIES GROWTH FUND CORE FUND FUND MARKET
SHARES SHARES FUND SHARES MARKET VALUE MARKET VALUE VALUE
- ----------- ------------ ------------- ------------ ------------ -------------
Common Stocks - 95.5%
Consumer Discretionary - 19.4%
25,050 -- 25,050 99 Cents Only Stores* $ 519 $ -- $ 519
42,300 134,125 176,425 Abercrombie & Fitch* (A) 832 2,638 3,470
13,850 68,900 82,750 Advanced Auto Parts* (A) 730 3,634 4,364
22,900 -- 22,900 Autozone* (A) 1,806 -- 1,806
66,900 -- 66,900 Bed Bath & Beyond* (A) 2,179 -- 2,179
-- 181,500 181,500 Belo Cl, A -- 3,971 3,971
33,650 -- 33,650 Best Buy* (A) 751 -- 751
77,550 -- 77,550 Big Lots* (A) 1,228 -- 1,228
29,350 -- 29,350 BJ's Wholesale Club* (A) 558 -- 558
45,750 -- 45,750 Blockbuster (A) 1,135 -- 1,135
21,100 111,800 132,900 Brinker International* (A) 547 2,896 3,443
-- 193,900 193,900 Catalina Marketing, Cl C -- 5,445 5,445
-- 147,430 147,430 CDW Computer Centers* (A) -- 6,245 6,245
25,300 -- 25,300 Centex 1,122 -- 1,122
31,300 -- 31,300 Cheesecake Factory* 934 -- 934
-- 131,800 131,800 Claire's Stores (A) -- 2,873 2,873
32,400 -- 32,400 Coach* (A) 829 -- 829
36,600 -- 36,600 Cumulus Media* 646 -- 646
45,600 -- 45,600 Darden Restaurants (A) 1,105 -- 1,105
100,650 604,060 704,710 Dollar General 1,351 8,106 9,457
36,600 158,200 194,800 Dollar Tree Stores* 807 3,487 4,294
8,500 -- 8,500 E.W. Scripps (A) 589 -- 589
13,600 -- 13,600 Entercom Communications* (A) 644 -- 644
-- 123,200 123,200 Fairmont Hotels & Resorts -- 2,932 2,932
52,450 -- 52,450 Family Dollar Stores 1,410 -- 1,410
-- 343,400 343,400 Fox Entertainment Group* (A) -- 7,565 7,565
20,800 -- 20,800 Gentex* (A) 566 -- 566
19,950 -- 19,950 Harman International (A) 1,032 -- 1,032
30,150 -- 30,150 Harrah's Entertainment* 1,454 -- 1,454
116,550 240,700 357,250 Hilton Hotels (A) 1,326 2,739 4,065
31,650 -- 31,650 International Game Technology* (A) 2,188 -- 2,188
-- 40,100 40,100 International Speedway, Cl A -- 1,593 1,593
23,400 -- 23,400 Jones Apparel Group* (A) 718 -- 718
48,050 76,500 124,550 Mandalay Resort Group* (A) 1,612 2,567 4,179
116,000 -- 116,000 Mattel 2,089 -- 2,089
-- 114,000 114,000 Maytag -- 2,643 2,643
27,050 -- 27,050 MGM MIRAGE* (A) 1,009 -- 1,009
19,050 67,000 86,050 Michaels Stores* (A) 871 3,062 3,933
10,950 88,000 98,950 Mohawk Industries* (A) 544 4,369 4,913
25,350 -- 25,350 New York Times, Cl A (A) 1,152 -- 1,152
19,000 -- 19,000 Newell Rubbermaid (A) 587 -- 587
-- 399,110 399,110 Park Place Entertainment* (A) -- 3,173 3,173
50,150 -- 50,150 PETCO Animal Supplies* 1,088 -- 1,088
49,750 -- 49,750 PETsMART* 886 -- 886
33,100 -- 33,100 RadioShack (A) 664 -- 664
15,300 -- 15,300 Rent-A-Center* 795 -- 795
-- 141,425 141,425 Regal Entertainment Group, Cl A* (A) -- 2,517 2,517
14,900 31,400 46,300 Ross Stores 531 1,119 1,650
55,550 383,500 439,050 Ruby Tuesday (A) 1,043 7,202 8,245
-- 171,435 171,435 Scholastic* (A) -- 7,660 7,660
60,700 -- 60,700 Staples* 776 -- 776
87,550 -- 87,550 Starbucks* (A) 1,807 -- 1,807
28,950 -- 28,950 Starwood Hotels & Resorts Worldwide 646 -- 646
19,900 -- 19,900 Tiffany & Company (A) 426 -- 426
49,750 -- 49,750 Univision Communications, Cl A* (A) 1,134 -- 1,134
-- 11,010 11,010 Washington Post, Cl B -- 7,145 7,145
12,500 -- 12,500 Wendy's International (A) 414 -- 414
17,800 249,800 267,600 Westwood One* 636 8,930 9,566
42,000 -- 42,000 Williams-Sonoma* (A) 992 -- 992
54,550 -- 54,550 Yum Brands* (A) 1,512 -- 1,512
------------ ------------ -------------
48,220 104,511 152,731
------------ ------------ -------------
Consumer Staples - 3.1%
-- 212,515 212,515 Bunge Limited -- 5,143 5,143
13,200 -- 13,200 Clorox 530 -- 530
73,400 -- 73,400 Coca-Cola Enterprises (A) 1,559 -- 1,559
-- 119,900 119,900 Dial (A) -- 2,573 2,573
-- 46,400 46,400 Dreyer's Grand Ice Cream (A) -- 3,242 3,242
-- 104,900 104,900 Hormel Foods (A) -- 2,295 2,295
29,900 -- 29,900 McCormick & Company (A) 682 -- 682
60,100 56,000 116,100 Pepsi Bottling 1,406 1,310 2,716
-- 24,200 24,200 Performance Food Group* (A) -- 822 822
-- 88,200 88,200 Smithfield Foods* (A) -- 1,385 1,385
-- 265,775 265,775 Tyson Foods, Cl A -- 3,091 3,091
15,450 15,450 Whole Foods Market* (A) 662 -- 662
------------ ------------ -------------
4,839 19,861 24,700
------------ ------------ -------------
Energy - 8.0%
56,450 -- 56,450 BJ Services (A) 1,468 -- 1,468
-- 184,220 184,220 Cal Dive International* (A) -- 3,715 3,715
20,100 -- 20,100 Cooper Cameron* (A) 839 -- 839
-- 138,040 138,040 Enbridge Energy Partners -- 6,046 6,046
43,800 59,000 102,800 ENSCO International (A) 1,097 1,477 2,574
-- 158,290 158,290 Equitable Resources -- 5,469 5,469
-- 317,200 317,200 FMC Technologies* -- 5,316 5,316
122,750 62,000 184,750 Grant Prideco* 1,048 529 1,577
9,150 -- 9,150 Murphy Oil (A) 751 -- 751
26,650 -- 26,650 Nabors Industries* (A) 873 -- 873
51,000 -- 51,000 National-Oilwell* 988 -- 988
35,400 230,080 265,480 Noble* (A) 1,097 7,132 8,229
-- 48,000 48,000 Noble Energy (A) -- 1,631 1,631
47,350 60,000 107,350 Ocean Energy 945 1,197 2,142
33,050 71,200 104,250 Patterson-UTI Energy* (A) 843 1,816 2,659
28,100 -- 28,100 Pioneer Natural Resources* (A) 681 -- 681
69,850 87,775 157,625 Pride International* (A) 908 1,141 2,049
38,050 46,200 84,250 Smith International* (A) 1,115 1,354 2,469
-- 133,460 133,460 Talisman Energy -- 5,352 5,352
-- 122,400 122,400 Valero Energy (A) -- 3,240 3,240
24,500 73,785 98,285 Weatherford International* (A) 910 2,740 3,650
-- 18,000 18,000 Western Gas Resources (A) -- 563 563
39,300 -- 39,300 XTO Energy (A) 810 -- 810
------------ ------------ -------------
14,373 48,718 63,091
------------ ------------ -------------
33
FIRST AMERICAN MID CAP CORE FUND
PRO FORMA SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2002
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(Percentages of each investment category relate to pro forma combined total net
assets
PRO FORMA
PRO FORMA COMBINED
COMBINED FIRST
FIRST AMERICAN
FIRST FIRST AMERICAN FIRST FIRST MID CAP
AMERICAN AMERICAN MID CAP AMERICAN AMERICAN GROWTH
MID CAP MID CAP GROWTH MID CAP MID CAP OPPORTUNITIES
GROWTH FUND CORE FUND OPPORTUNITIES GROWTH FUND CORE FUND FUND MARKET
SHARES SHARES FUND SHARES MARKET VALUE MARKET VALUE VALUE
- ----------- ------------ ------------- ------------ ------------ -------------
Financials - 15.0% -
12,450 -- 12,450 Affiliated Managers Group* 555 -- 555
-- 24,627 24,627 Ambac Financial Group (A) -- 1,327 1,327
-- 190,385 190,385 American Financial Group -- 4,383 4,383
-- 387,365 387,365 Arthur J. Gallagher -- 9,549 9,549
-- 27,000 27,000 Associated Banc-Corp -- 857 857
-- 170,470 170,470 Banknorth Group (A) -- 4,049 4,049
40,950 -- 40,950 Brown & Brown 1,229 -- 1,229
-- 268,000 268,000 Charles Schwab (A) -- 2,332 2,332
-- 146,869 146,869 Charter One Financial -- 4,365 4,365
19,100 49,370 68,470 City National (A) 893 2,309 3,202
-- 107,150 107,150 Colonial BancGroup -- 1,329 1,329
18,850 -- 18,850 Commerce Bancorp (A) 782 -- 782
27,100 104,500 131,600 Compass Bancshares 799 3,082 3,881
226,300 -- 226,300 Dime Bancorp* 20 -- 20
23,625 -- 23,625 Doral Financial 570 -- 570
-- 292,225 292,225 E*TRADE Group* (A) -- 1,300 1,300
-- 76,400 76,400 Edwards A.G. (A) -- 2,443 2,443
-- 142,850 142,850 Everest Re Group (A) -- 7,837 7,837
32,500 -- 32,500 Federated Investors 877 -- 877
-- 103,000 103,000 Golden State Bancorp -- 3,329 3,329
-- 69,000 69,000 GreenPoint Financial -- 2,880 2,880
-- 51,000 51,000 HCC Insurance Holdings (A) -- 1,225 1,225
29,350 240,400 269,750 Hibernia, Cl A 587 4,806 5,393
-- 44,550 44,550 Independence Community Bank -- 1,118 1,118
31,050 303,220 334,270 Investors Financial Services (A) 841 8,208 9,049
-- 72,000 72,000 LaBranche* (A) -- 1,458 1,458
28,350 45,700 74,050 Legg Mason (A) 1,207 1,945 3,152
-- 77,900 77,900 M & T Bank (A) -- 6,139 6,139
44,200 -- 44,200 Moody's (A) 2,144 -- 2,144
-- 204,100 204,100 National Commerce Financial -- 5,113 5,113
-- 107,255 107,255 Neuberger Berman (A) -- 2,891 2,891
37,050 85,500 122,550 New York Community Bancorp 1,044 2,409 3,453
19,250 79,330 98,580 North Fork Bancorp (A) 728 3,002 3,730
-- 51,655 51,655 Ohio Casualty* -- 841 841
-- 37,500 37,500 PMI Group -- 1,020 1,020
-- 70,295 70,295 Protective Life (A) -- 2,163 2,163
-- 62,775 62,775 Radian Group (A) -- 2,050 2,050
-- 80,000 80,000 SEI Investments -- 1,910 1,910
48,250 -- 48,250 Synovus Financial 995 -- 995
17,460 33,000 50,460 TCF Financial (A) 739 1,397 2,136
-- 82,000 82,000 W.R. Berkely -- 2,788 2,788
-- 31,000 31,000 Westamerica Bancorporation -- 1,249 1,249
21,400 -- 21,400 Willis Group Holdings* 717 -- 717
------------ ------------ -------------
14,727 103,103 117,830
------------ ------------ -------------
Health Care - 18.1%
26,750 78,600 105,350 AdvancePCS* (A) 603 1,771 2,374
40,400 -- 40,400 Allergan (A) 2,198 -- 2,198
24,550 -- 24,550 AmerisourceBergen (A) 1,753 -- 1,753
39,550 -- 39,550 AMN Healthcare Services* 732 -- 732
38,900 -- 38,900 Andrx Group* (A) 862 -- 862
35,100 -- 35,100 Anthem* (A) 2,282 -- 2,282
53,900 -- 53,900 Applera - Applied Biosystems Group 986 -- 986
-- 73,800 73,800 Apria Healthcare Group* (A) -- 1,739 1,739
17,600 -- 17,600 Barr Laboratories* (A) 1,096 -- 1,096
23,200 -- 23,200 Beckman Coulter (A) 898 -- 898
43,150 -- 43,150 Biogen* 1,263 -- 1,263
93,200 60,550 153,750 Biomet 2,482 1,612 4,094
23,900 -- 23,900 Boston Scientific* 754 -- 754
92,350 -- 92,350 Caremark Rx* (A) 1,570 -- 1,570
49,800 96,800 146,600 Celgene* (A) 839 1,630 2,469
25,350 -- 25,350 Cephalon* (A) 1,035 -- 1,035
Charles River Labaratories International*
33,150 39,500 72,650 (A) 1,301 1,550 2,851
21,450 -- 21,450 Chiron* (A) 749 -- 749
-- 47,300 47,300 Covance* -- 926 926
26,550 -- 26,550 DENTSPLY International 1,067 -- 1,067
14,400 -- 14,400 Diagnostic Products 662 -- 662
-- 51,400 51,400 Edwards Lifesciences* (A) -- 1,315 1,315
26,100 122,245 148,345 Express Scripts* (A) 1,423 6,665 8,088
47,200 58,000 105,200 First Health Group* 1,280 1,573 2,853
-- 19,000 19,000 Forest Laboratories, Cl A* (A) -- 1,558 1,558
73,900 187,900 261,800 Gilead Sciences* (A) 2,478 6,300 8,778
102,750 -- 102,750 Health Management Associates, Cl A 2,078 -- 2,078
-- 105,000 105,000 Health Net* -- 2,252 2,252
-- 514,900 514,900 HealthSouth* -- 2,137 2,137
20,700 34,410 55,110 Henry Schein* 1,092 1,815 2,907
34,600 93,100 127,700 IDEC Pharmaceuticals* (A) 1,437 3,866 5,303
29,550 -- 29,550 IMS Health 442 -- 442
31,100 -- 31,100 Invitrogen* (A) 1,060 -- 1,060
-- 112,000 112,000 IVAX* -- 1,374 1,374
106,848 513,949 620,797 King Pharmaceuticals* 1,941 9,338 11,279
Laboratory Corporation of America
42,300 173,000 215,300 Holdings* (A) 1,429 5,844 7,273
41,150 -- 41,150 Lincare Holdings* (A) 1,277 -- 1,277
78,250 -- 78,250 McKesson HBOC 2,217 -- 2,217
64,000 -- 64,000 MedImmune* 1,339 -- 1,339
19,100 -- 19,100 Mid-Atlantic Medical Services * 691 -- 691
49,800 216,900 266,700 Millennium Pharmaceuticals* (A) 464 2,022 2,486
38,600 103,700 142,300 Mylan Laboratories 1,264 3,395 4,659
-- 264,250 264,250 Omnicare (A) -- 5,581 5,581
23,400 38,425 61,825 Oxford Health Plans* (A) 911 1,496 2,407
-- 60,705 60,705 Priority Healthcare, Cl B* (A) -- 1,530 1,530
28,800 75,400 104,200 Quest Diagnostics* (A) 1,772 4,639 6,411
36,250 -- 36,250 SICOR* 551 -- 551
51,750 -- 51,750 St. Jude Medical* 1,848 -- 1,848
21,350 -- 21,350 STERIS* 532 -- 532
43,950 -- 43,950 Stryker (A) 2,532 -- 2,532
-- 21,270 21,270 Teva Pharmaceutical Industries ADR -- 1,425 1,425
-- 18,000 18,000 Transkaryotic Therapies* (A) -- 583 583
25,450 104,800 130,250 Triad Hospitals * (A) 966 3,977 4,943
13,850 55,400 69,250 Universal Health Services* (A) 708 2,834 3,542
36,850 -- 36,850 Varian Medical Systems* 1,584 -- 1,584
35,350 -- 35,350 Wellpoint Health Networks* (A) 2,591 -- 2,591
55,600 -- 55,600 Zimmer Holdings* 2,132 -- 2,132
------------ ------------ -------------
34
FIRST AMERICAN MID CAP CORE FUND
PRO FORMA SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2002
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(Percentages of each investment category relate to pro forma combined total net
assets
PRO FORMA
PRO FORMA COMBINED
COMBINED FIRST
FIRST AMERICAN
FIRST FIRST AMERICAN FIRST FIRST MID CAP
AMERICAN AMERICAN MID CAP AMERICAN AMERICAN GROWTH
MID CAP MID CAP GROWTH MID CAP MID CAP OPPORTUNITIES
GROWTH FUND CORE FUND OPPORTUNITIES GROWTH FUND CORE FUND FUND MARKET
SHARES SHARES FUND SHARES MARKET VALUE MARKET VALUE VALUE
- ----------- ------------ ------------- ------------ ------------ -------------
61,171 80,747 141,918
------------ ------------ -------------
Industrials - 11.7%
36,250 54,600 90,850 AGCO* (A) 841 1,267 2,108
-- 65,450 65,450 Albany International, Cl A -- 1,242 1,242
-- 225,235 225,235 ARAMARK, Cl B -- 4,730 4,730
10,900 -- 10,900 Alliant Techsystems* 755 -- 755
12,000 -- 12,000 American Standard 763 -- 763
35,700 -- 35,700 Apollo Group, Cl A* (A) 1,550 -- 1,550
21,300 -- 21,300 Avery Dennison (A) 1,214 -- 1,214
37,150 291,400 328,550 Bisys Group* (A) 621 4,869 5,490
33,600 45,000 78,600 C. H. Robinson Worldwide 908 1,216 2,124
26,250 41,060 67,310 Career Education* (A) 1,260 1,971 3,231
28,116 15,000 43,116 ChoicePoint* (A) 1,002 534 1,536
29,050 -- 29,050 Cintas Group (A) 1,218 -- 1,218
-- 39,000 39,000 CNF (A) -- 1,224 1,224
40,750 102,000 142,750 Concord EFS* (A) 647 1,620 2,267
28,350 -- 28,350 Cooper Tire & Rubber 458 -- 458
-- 41,125 41,125 Corinthian Colleges* -- 1,552 1,552
14,700 -- 14,700 Danaher 836 -- 836
14,450 -- 14,450 Deluxe 651 -- 651
-- 192,395 192,395 Dun & Bradstreet* (A) -- 6,466 6,466
16,500 -- 16,500 Education Management* 730 -- 730
67,400 -- 67,400 Equifax 1,465 -- 1,465
23,250 82,650 105,900 Expeditors International of Washington 650 2,309 2,959
-- 232,070 232,070 FactSet Research Systems (A) -- 6,161 6,161
17,050 -- 17,050 Fastenal (A) 538 -- 538
53,950 -- 53,950 Flowserve* (A) 540 -- 540
43,900 -- 43,900 H & R Block (A) 1,844 -- 1,844
-- 332,960 332,960 Iron Mountain* (A) -- 8,321 8,321
-- 52,475 52,475 Kaydon -- 1,052 1,052
-- 49,505 49,505 Kennametal -- 1,590 1,590
30,600 -- 30,600 L-3 Communications Holdings* (A) 1,613 -- 1,613
21,350 59,800 81,150 Manpower (A) 626 1,755 2,381
52,400 -- 52,400 Molex, Cl A (A) 1,232 -- 1,232
-- 36,395 36,395 Nordson -- 864 864
-- 85,100 85,100 Norfolk Southern -- 1,718 1,718
-- 43,000 43,000 Paccar (A) -- 1,453 1,453
-- 40,045 40,045 Pentair -- 1,488 1,488
22,250 -- 22,250 Pitney Bowes 678 -- 678
-- 406,400 406,400 Republic Services* -- 7,640 7,640
-- 70,700 70,700 Robert Half International* (A) -- 1,122 1,122
-- 33,400 33,400 SPX* (A) -- 3,370 3,370
48,300 -- 48,300 Swift Transportation* (A) 754 -- 754
15,000 -- 15,000 University of Pheonix Online* 482 -- 482
21,100 -- 21,100 Weight Watchers International 915 -- 915
-- 88,715 88,715 Werner Enterprises* -- 1,631 1,631
------------ ------------ -------------
24,791 67,165 91,956
------------ ------------ -------------
Information Technology - 15.3%
25,500 67,500 93,000 Activision* (A) 610 1,615 2,225
-- 232,300 232,300 Acxiom* (A) -- 3,294 3,294
34,300 -- 34,300 Adobe Systems 655 -- 655
26,400 101,480 127,880 Affiliated Computer Services, Cl A* (A) 1,123 4,318 5,441
87,300 -- 87,300 Altera* 757 -- 757
70,400 -- 70,400 Amazon.com* (A) 1,122 -- 1,122
129,500 -- 129,500 ATI Technologies* 646 -- 646
492,750 -- 492,750 Atmel* 522 -- 522
106,650 -- 106,650 BEA Systems* 552 -- 552
-- 105,000 105,000 BMC Software* -- 1,372 1,372
27,600 -- 27,600 Broadcom, Cl A* (A) 295 -- 295
51,850 -- 51,850 Brocade Communications Systems* (A) 390 -- 390
37,950 277,600 315,550 Cadence Design Systems* (A) 386 2,823 3,209
152,300 -- 152,300 Citrix Systems* 918 -- 918
36,050 -- 36,050 Cognos* 606 -- 606
14,964 -- 14,964 Cymer* (A) 279 -- 279
-- 64,500 64,500 Diebold (A) -- 2,123 2,123
-- 272,525 272,525 DoubleClick* -- 1,401 1,401
31,250 -- 31,250 Electronic Arts* (A) 2,061 -- 2,061
53,400 -- 53,400 Emulex* (A) 601 -- 601
-- 86,105 86,105 Exar* -- 995 995
17,350 -- 17,350 Fair Isaac & Company, Cl A* (A) 567 -- 567
61,400 186,900 248,300 Jabil Circuit* (A) 582 1,770 2,352
44,750 295,385 340,135 Fiserv* 1,257 8,294 9,551
34,250 207,740 241,990 Integrated Circuit Systems* (A) 538 3,262 3,800
-- 549,150 549,150 Integrated Device Technology* (A) -- 5,733 5,733
-- 77,000 77,000 International Rectifier* (A) -- 1,203 1,203
70,350 112,300 182,650 Intersil, Cl A* (A) 912 1,455 2,367
56,700 -- 56,700 Intuit* 2,582 -- 2,582
33,850 -- 33,850 Jabil Circuit* (A) 500 -- 500
30,800 -- 30,800 KLA-Tencor* (A) 861 -- 861
-- 122,500 122,500 Kronos* -- 3,017 3,017
40,600 -- 40,600 Lam Research* (A) 361 -- 361
-- 66,455 66,455 Lawson Software* -- 235 235
17,800 -- 17,800 Lexmark International Group, Cl A* (A) 837 -- 837
-- 47,000 47,000 Linear Technology -- 974 974
33,900 -- 33,900 Marvell Technology Group* (A) 537 -- 537
72,350 228,050 300,400 Microchip Technology* (A) 1,480 4,664 6,144
37,950 -- 37,950 MKS Instruments* 414 -- 414
-- 110,600 110,600 NetIQ* (A) -- 1,604 1,604
94,000 -- 94,000 Network Appliance* (A) 689 -- 689
77,400 136,600 214,000 Network Associates* (A) 823 1,452 2,275
19,850 -- 19,850 Novellus Systems* (A) 413 -- 413
83,400 -- 83,400 PeopleSoft* 1,032 -- 1,032
18,600 -- 18,600 PMC-Sierra* (A) 72 -- 72
-- 287,210 287,210 Polycom* -- 1,950 1,950
19,900 -- 19,900 Qlogic* (A) 518 -- 518
82,950 278,800 361,750 Rational Software* 358 1,204 1,562
115,900 121,800 237,700 RF Micro Devices* (A) 695 731 1,426
67,550 76,775 144,325 Semtech* 655 745 1,400
114,250 -- 114,250 Siebel Systems* 657 -- 657
-- 84,560 84,560 Storage Technology* -- 889 889
97,500 178,950 276,450 SunGard Data Systems* 1,896 3,481 5,377
32,600 48,500 81,100 Symantec* (A) 1,096 1,631 2,727
11,550 49,600 61,150 Synopsys* (A) 441 1,892 2,333
35
FIRST AMERICAN MID CAP CORE FUND
PRO FORMA SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2002
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(Percentages of each investment category relate to pro forma combined total net
assets
PRO FORMA
PRO FORMA COMBINED
COMBINED FIRST
FIRST AMERICAN
FIRST FIRST AMERICAN FIRST FIRST MID CAP
AMERICAN AMERICAN MID CAP AMERICAN AMERICAN GROWTH
MID CAP MID CAP GROWTH MID CAP MID CAP OPPORTUNITIES
GROWTH FUND CORE FUND OPPORTUNITIES GROWTH FUND CORE FUND FUND MARKET
SHARES SHARES FUND SHARES MARKET VALUE MARKET VALUE VALUE
- ----------- ------------ ------------- ------------ ------------ -------------
-- 272,800 272,800 Tech Data* (A) -- 7,202 7,202
25,100 -- 25,100 Teradyne* (A) 241 -- 241
32,750 354,700 387,450 USA Interactive* 635 6,874 7,509
99,800 -- 99,800 VERITAS Software* (A) 1,464 -- 1,464
50,950 329,060 380,010 Vishay Intertechnology* (A) 448 2,896 3,344
-- 113,000 113,000 Waters* (A) -- 2,740 2,740
125,500 -- 125,500 Yahoo!* (A) 1,201 -- 1,201
------------ ------------ -------------
36,285 83,839 120,124
------------ ------------ -------------
Materials - 2.0%
-- 63,360 63,360 Airgas* -- 832 832
-- 108,425 108,425 AK Steel Holdings* -- 793 793
-- 81,300 81,300 Arch Coal (A) -- 1,346 1,346
11,500 -- 11,500 Ball 580 -- 580
-- 42,805 42,805 Bowater (A) -- 1,511 1,511
-- 154,190 154,190 Domtar -- 1,360 1,360
51,950 -- 51,950 Ecolab (A) 2,168 -- 2,168
80,000 -- 80,000 Newmont Mining (A) 2,201 -- 2,201
-- 68,100 68,100 Pactiv* -- 1,120 1,120
13,200 -- 13,200 PPG Industries 590 -- 590
-- 29,000 29,000 RPM -- 408 408
14,450 -- 14,450 Sigma-Aldrich (A) 712 -- 712
-- 70,225 70,225 Sonoco Products -- 1,497 1,497
------------ ------------ -------------
6,251 8,867 15,118
------------ ------------ -------------
Telecommunication Services - 0.6%
-- 111,100 111,100 CenturyTel (A) -- 2,492 2,492
99,100 -- 99,100 Citizens Communications* (A) 672 -- 672
206,050 -- 206,050 Nextel Communications, Cl A* (A) 1,556 -- 1,556
------------ ------------ -------------
2,228 2,492 4,720
------------ ------------ -------------
Utilities - 2.7%
-- 74,000 74,000 ALLETE -- 1,598 1,598
-- 85,985 85,985 Alliant Energy (A) -- 1,655 1,655
-- 265,860 265,860 Energy East -- 5,267 5,267
-- 36,273 36,273 Kinder Morgan -- 1,286 1,286
-- 76,640 -- Kinder Morgan Fractional Shares, (C) -- -- -
-- 202,944 202,944 Kinder Morgan Management* (A) -- 6,038 6,038
-- 72,345 72,345 Pepco Holdings -- 1,443 1,443
-- 186,900 186,900 Questar (A) -- 4,269 4,269
------------ ------------ -------------
-- 21,556 21,556
------------ ------------ -------------
------------ ------------ -------------
Total Common Stocks 212,885 540,859 753,744
------------ ------------ -------------
Related Party Money Market Fund - 4.4%
13,872,208 20,954,309 34,826,517 First American Prime Obligations Fund (B) 13,872 20,954 34,826
------------ ------------ -------------
13,872 20,954 34,826
------------ ------------ -------------
Total Investments - 100.3%
(Cost $252,655, $606,497, and $859,152
respectively) $ 226,757 $ 561,813 $ 788,570
============ ============ =============
* Non-income producing security
(A) This security or a portion of this security is out on loan at September 30,
2002.
(B) This money market fund is advised by U.S. Bancorp Asset Management, Inc.,
which also serves as the advisor for this Fund.
(C) Security is valued at fair value under guidelines established and approved
by the board of directors.
ADR - American Depositary Receipt Cl - Class
36
FIRST AMERICAN SMALL CAP CORE FUND
PRO FORMA SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2002
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(Percentages of each investment category relate to pro forma combined total net
assets
PRO FORMA PRO FORMA
COMBINED COMBINED
FIRST FIRST FIRST FIRST FIRST FIRST
AMERICAN AMERICAN AMERICAN AMERICAN AMERICAN AMERICAN
SMALL CAP SMALL CAP SMALL CAP SMALL CAP SMALL CAP SMALL CAP
CORE FUND CORE FUND SELECT CORE FUND CORE FUND SELECT FUND
SHARES SHARES FUND SHARES MARKET VALUE MARKET VALUE MARKET VALUE
---------- ---------- ----------- ------------ ------------ ------------
Common Stocks - 94.1%
Consumer Discretionary - 22.5%
33,700 331,760 365,460 4Kids Entertainment* (A) $ 800 $ 7,873 $ 8,673
14,350 -- 14,350 Action Performance* 369 -- 369
-- 145,800 145,800 Advanced Auto Parts* (A) -- 7,689 7,689
19,000 -- 19,000 ADVO* 603 -- 603
25,650 -- 25,650 Aeropostale* 395 -- 395
-- 479,856 479,856 Alliance Atlantis Communications, Cl B* -- 4,759 4,759
76,100 -- 76,100 Alliance Gaming* 1,176 -- 1,176
32,000 -- 32,000 Ameristar Casinos* 607 -- 607
-- 55,300 55,300 Beazer Homes USA* (A) -- 3,376 3,376
80,250 -- 80,250 Boyd Gaming* 1,498 -- 1,498
53,800 -- 53,800 California Pizza Kitchen* (A) 1,238 -- 1,238
-- 51,300 51,300 Cato, CL A -- 974 974
-- 206,900 206,900 CBRL Group (A) -- 4,721 4,721
16,650 -- 16,650 Christopher & Banks* (A) 418 -- 418
40,200 -- 40,200 Cost Plus* 1,079 -- 1,079
91,850 247,800 339,650 CSK Auto* 1,146 3,092 4,238
-- 103,300 103,300 Cumulus Media, CL A* -- 1,823 1,823
36,500 203,291 239,791 Electronics Boutique & Holdings* (A) 1,002 5,580 6,582
-- 171,400 171,400 Fairmont Hotels & Resorts -- 4,079 4,079
-- 210,300 210,300 Finish Line, Cl A* -- 1,897 1,897
28,250 -- 28,250 Fred's, Cl A 843 -- 843
53,500 -- 53,500 GameStop* 1,094 -- 1,094
-- 237,000 237,000 Gaylord Entertainment* -- 4,484 4,484
-- 106,168 106,168 GTECH Holdings* (A) -- 2,635 2,635
35,650 34,850 70,500 Gymboree* (A) 581 568 1,149
93,550 -- 93,550 Hollywood Entertainment* 1,358 -- 1,358
50,450 263,087 313,537 Hot Topic* (A) 910 4,743 5,653
122,800 -- 122,800 Insight Enterprises* 1,246 -- 1,246
33,350 -- 33,350 Isle of Capri Casinos* 556 -- 556
49,150 -- 49,150 Kenneth Cole Productions* 998 -- 998
61,200 236,300 297,500 Kirkland's* 1,047 4,041 5,088
49,050 -- 49,050 Landry's Restaurants 1,108 -- 1,108
15,800 -- 15,800 Lee Enterprises 519 -- 519
-- 88,200 88,200 Lin TV, Cl A* (A) -- 2,183 2,183
29,900 -- 29,900 Linens 'N Things* 549 -- 549
-- 91,200 91,200 Maytag -- 2,114 2,114
117,000 -- 117,000 Movie Gallery* (A) 1,756 -- 1,756
41,550 -- 41,550 Nautilus Group* (A) 810 -- 810
24,650 210,798 235,448 O'Reilly Automotive* 705 6,033 6,738
-- 271,202 271,202 Orient Express Hotels* (A) -- 3,707 3,707
25,850 -- 25,850 P F Chang's China Bistro* 750 -- 750
45,300 -- 45,300 Pacific Sunwear of California* (A) 922 -- 922
31,600 241,800 273,400 Panera Bread, Cl A* (A) 853 6,529 7,382
59,300 -- 59,300 Penn National Gaming* 1,120 -- 1,120
-- 130,900 130,900 Pinnacle Entertainment* -- 956 956
58,150 -- 58,150 Quicksilver* 1,314 -- 1,314
35,600 -- 35,600 Racing Champions* (A) 582 -- 582
34,400 -- 34,400 RARE Hospitality International* 806 -- 806
-- 299,300 299,300 Ruby Tuesday (A) -- 5,621 5,621
-- 204,140 204,140 Scholastic* -- 9,121 9,121
32,150 -- 32,150 SCP Pool* (A) 881 -- 881
36,100 -- 36,100 Sharper Image* 690 -- 690
41,750 -- 41,750 Sonic* 964 -- 964
130,950 -- 130,950 Spanish Broadcasting System* 858 -- 858
81,350 -- 81,350 Station Casinos* (A) 1,384 -- 1,384
26,500 -- 26,500 Superior Industries 1,248 -- 1,248
-- 380,300 380,300 The Wet Seal, Cl A* -- 3,803 3,803
-- 145,700 145,700 Toll Brothers* (A) -- 3,167 3,167
35,900 168,500 204,400 Too* 836 3,923 4,759
52,350 -- 52,350 Tropical Sportswear International* 679 -- 679
27,000 -- 27,000 Tupperware 449 -- 449
50,200 209,640 259,840 Ultimate Electronics* (A) 640 2,673 3,313
3,100 -- 3,100 Urban Outfitters* 75 -- 75
-- 186,500 186,500 ValueVision International* -- 2,193 2,193
65,100 -- 65,100 Yankee Candle* 1,118 -- 1,118
------------ ------------ ------------
40,580 114,357 154,937
------------ ------------ ------------
Consumer Staples - 2.2%
13,900 -- 13,900 American Italian Pasta, Cl A* 496 -- 496
36,750 -- 36,750 Delta & Pine Land 689 -- 689
27,600 -- 27,600 Interstate Bakeries 733 -- 733
26,050 -- 26,050 J.M. Smucker 956 -- 956
83,100 -- 83,100 NBTY* 1,079 -- 1,079
-- 279,729 279,729 Performance Food Group * (A) -- 9,500 9,500
78,500 -- 78,500 United Natural Foods* 1,808 -- 1,808
------------ ------------ ------------
5,761 9,500 15,261
------------ ------------ ------------
Energy - 10.2%
-- 71,300 71,300 Atwood Oceanics* -- 2,085 2,085
87,500 135,600 223,100 Cal Dive International* (A) 1,765 2,735 4,500
235,250 -- 235,250 Chesapeake Energy (A) 1,553 -- 1,553
48,600 -- 48,600 Dril-Quip* 819 -- 819
22,750 -- 22,750 Evergreen Resources (A) 932 -- 932
46,150 -- 46,150 FMC Technologies* 773 -- 773
-- 57,400 57,400 Frontier Oil -- 712 712
559,700 -- 559,700 Grey Wolf* 2,015 -- 2,015
-- 143,350 143,350 Helmerich & Payne -- 4,907 4,907
319,300 -- 319,300 Horizon Offshore* 1,344 -- 1,344
170,250 -- 170,250 Key Energy Services* 1,342 -- 1,342
-- 42,500 42,500 Knightsbridge Tankers (A) -- 504 504
100,200 710,200 810,400 Lone Star Technologies* 1,187 8,416 9,603
119,950 -- 119,950 Maverick Tube* 1,064 -- 1,064
-- 316,496 316,496 National-Oilwell* (A) -- 6,134 6,134
64,750 -- 64,750 Offshore Logistics* (A) 1,163 -- 1,163
-- 247,900 247,900 Patterson-UTI Energy* (A) -- 6,324 6,324
-- 132,715 132,715 Pioneer Natural Resources* (A) -- 3,218 3,218
-- 303,700 303,700 Pride International* (A) -- 3,948 3,948
61,000 -- 61,000 Remington Oil & Gas* 860 -- 860
49,250 -- 49,250 Spinnaker Exploration* 1,413 -- 1,413
-- 130,900 130,900 Teekay Shipping (A) -- 3,731 3,731
421,950 -- 421,950 Trico Marine Services* 1,072 -- 1,072
142,900 496,900 639,800 Ultra Petroleum* 1,193 4,149 5,342
90,050 -- 90,050 Universal Compression Holdings* 1,459 -- 1,459
37
FIRST AMERICAN SMALL CAP CORE FUND
PRO FORMA SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2002
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(Percentages of each investment category relate to pro forma combined total net
assets
PRO FORMA PRO FORMA
COMBINED COMBINED
FIRST FIRST FIRST FIRST FIRST FIRST
AMERICAN AMERICAN AMERICAN AMERICAN AMERICAN AMERICAN
SMALL CAP SMALL CAP SMALL CAP SMALL CAP SMALL CAP SMALL CAP
CORE FUND CORE FUND SELECT CORE FUND CORE FUND SELECT FUND
SHARES SHARES FUND SHARES MARKET VALUE MARKET VALUE MARKET VALUE
---------- ---------- ----------- ------------ ------------ ------------
-- 152,100 152,100 Varco International* (A) -- 2,573 2,573
27,750 -- 27,750 Western Gas Resources (A) 867 -- 867
------------ ------------ ------------
20,821 49,436 70,257
------------ ------------ ------------
Financials - 10.3%
19,500 -- 19,500 Alexandria Real Estate Equities (REIT) 828 -- 828
42,650 -- 42,650 Arch Cap Group* 1,190 -- 1,190
-- 176,030 176,030 Arthur J. Gallagher -- 4,339 4,339
30,500 -- 30,500 Boston Private Financial Holdings 650 -- 650
72,050 -- 72,050 Brookline Bancorp 847 -- 847
16,900 -- 16,900 Camden Property Trust 560 -- 560
24,550 -- 24,550 Chateau Communities (REIT) 648 -- 648
32,500 -- 32,500 Chelsea Property Group (REIT) 1,097 -- 1,097
49,950 -- 49,950 Chittenden 1,479 -- 1,479
26,300 -- 26,300 Commercial Federal 573 -- 573
43,650 -- 43,650 Community First Bankshares 1,217 -- 1,217
40,950 97,280 138,230 Cullen/Frost Bankers 1,398 3,322 4,720
32,400 -- 32,400 Dime Community Bancshares 694 -- 694
70,550 216,715 287,265 East West Bancorp 2,382 7,316 9,698
-- 40,200 40,200 Everest Re Group -- 2,205 2,205
-- 36,900 36,900 Federal Agricultural Mortgage, Cl C* (A) -- 1,089 1,089
38,700 -- 38,700 Federal Realty Investment Trust (REIT) 1,045 -- 1,045
25,550 -- 25,550 First Bank - Puerto Rico 974 -- 974
20,900 -- 20,900 First Community Bancorp 605 -- 605
31,050 -- 31,050 Healthcare (REIT) 849 -- 849
33,950 -- 33,950 Hilb, Rogal & Hamilton 1,400 -- 1,400
27,650 -- 27,650 Hudson United Bancorp 735 -- 735
27,050 -- 27,050 Independence Community Bank 679 -- 679
27,550 -- 27,550 IndyMac Bancorp* 531 -- 531
12,050 201,744 213,794 Jefferies Group (A) 460 7,699 8,159
38,150 -- 38,150 Macerich (REIT) 1,182 -- 1,182
37,300 -- 37,300 Mills (REIT) 1,106 -- 1,106
86,050 -- 86,050 NetBank* 896 -- 896
23,250 -- 23,250 New Century Financial (A) 544 -- 544
66,300 -- 66,300 Ohio Casualty* (A) 1,079 -- 1,079
38,350 -- 38,350 Pacific Capital Bancorp 1,042 -- 1,042
49,000 -- 49,000 R&G Financial 1,069 -- 1,069
-- 95,600 95,600 RenaissanceRe Holdings (A) -- 3,613 3,613
18,450 -- 18,450 Shurgard Storage Centers (REIT) 583 -- 583
32,600 -- 32,600 Sky Financial Group 649 -- 649
21,450 -- 21,450 SL Green Realty (REIT) 659 -- 659
16,750 -- 16,750 Southwest Bancorp of Texas* (A) 610 -- 610
59,050 -- 59,050 Staten Island Bancorp 1,027 -- 1,027
122,400 -- 122,400 Sterling Bancshares 1,600 -- 1,600
27,325 -- 27,325 Texas Regional Bancshares, Cl A 915 -- 915
54,950 -- 54,950 TrustCo Bank Corporation of New York 581 -- 581
29,100 -- 29,100 UCBH Holdings 1,143 -- 1,143
42,150 -- 42,150 United Bankshares (A) 1,223 -- 1,223
109,200 -- 109,200 W Holding 1,780 -- 1,780
40,900 -- 40,900 Washington Real Estate Investment Trust 1,038 -- 1,038
24,200 -- 24,200 Webster Financial 813 -- 813
38,400 -- 38,400 Wintrust Financial 1,100 -- 1,100
------------ ------------ ------------
41,480 29,583 71,063
------------ ------------ ------------
Health Care-14.3%
26,950 -- 26,950 Accredo Health* (A) 1,285 -- 1,285
28,200 -- 28,200 American Pharmaceutical Partners* 461 -- 461
32,200 -- 32,200 AMERIGROUP* 1,080 -- 1,080
38,150 -- 38,150 Amsurg, Cl A* 1,151 -- 1,151
65,400 -- 65,400 Amylin Pharmaceuticals* (A) 1,087 -- 1,087
50,850 -- 50,850 Apria Healthcare Group* 1,198 -- 1,198
18,750 8,350 27,100 Bio-Rad Laboratories, Cl A* 706 314 1,020
22,550 -- 22,550 Biosite* (A) 654 -- 654
-- 249,700 249,700 Celgene* (A) -- 4,205 4,205
-- 87,940 87,940 Cephalon* (A) -- 3,590 3,590
20,450 -- 20,450 CIMA Labs* 514 -- 514
-- 279,126 279,126 Community Health Systems* (A) -- 7,433 7,433
14,300 -- 14,300 Cooper (A) 751 -- 751
52,550 226,200 278,750 Covance* (A) 1,028 4,427 5,455
38,300 -- 38,300 CV Therapeutics* 801 -- 801
31,300 -- 31,300 Cyberonics* 539 -- 539
20,150 -- 20,150 Diagnostic Products 927 -- 927
13,800 -- 13,800 DIANON Systems* 653 -- 653
58,800 -- 58,800 Enzon* (A) 1,131 -- 1,131
155,050 -- 155,050 First Horizon Pharmaceutical* 837 -- 837
45,100 -- 45,100 Hanger Orthopedic Group* 717 -- 717
43,450 -- 43,450 IDEXX Laboratories* (A) 1,345 -- 1,345
28,050 -- 28,050 INAMED* 645 -- 645
-- 230,500 230,500 Integra LifeSciences* -- 3,663 3,663
7,550 -- 7,550 InterMune* 248 -- 248
22,450 -- 22,450 Invacare 769 -- 769
56,400 -- 56,400 K V Pharmaceutical, Cl A* 1,066 -- 1,066
62,100 -- 62,100 MedCath* (A) 702 -- 702
40,300 -- 40,300 Medical Staffing Network Holdings* 611 -- 611
-- 55,507 55,507 Medicis, Cl A* (A) -- 2,269 2,269
26,850 -- 26,850 Neurocrine Biosciences* 1,101 -- 1,101
51,100 52,100 103,200 NPS Pharmaceuticals* (A) 1,051 1,072 2,123
21,250 -- 21,250 Ocular Sciences* 496 -- 496
-- 210,400 210,400 Omnicare (A) -- 4,444 4,444
27,100 -- 27,100 OSI Pharmaceuticals* 460 -- 460
22,750 -- 22,750 Pediatrix Medical Group* 705 -- 705
-- 163,500 163,500 Pharmaceutical Product Development* (A) -- 3,162 3,162
42,250 -- 42,250 Pharmaceutical Resources* 1,182 -- 1,182
-- 383,500 383,500 Priority Healthcare, Cl B* (A) -- 9,664 9,664
130,500 -- 130,500 Protein Design Labs* 1,083 -- 1,083
86,250 116,200 202,450 Province Healthcare* 1,479 1,993 3,472
36,150 -- 36,150 RehabCare Group* (A) 836 -- 836
40,550 88,669 129,219 Respironics* 1,298 2,838 4,136
56,700 -- 56,700 SangStat Medical* (A) 1,183 -- 1,183
50,650 -- 50,650 Scios* (A) 1,289 -- 1,289
41,900 -- 41,900 Sierra Health Services* 752 -- 752
27,600 -- 27,600 Stericycle* (A) 936 -- 936
52,600 -- 52,600 STERIS* 1,310 -- 1,310
17,850 -- 17,850 SuriModics* 567 -- 567
41,250 -- 41,250 Techne* (A) 1,353 -- 1,353
82,950 -- 82,950 Telik* 1,027 -- 1,027
38
FIRST AMERICAN SMALL CAP CORE FUND
PRO FORMA SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2002
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(Percentages of each investment category relate to pro forma combined total net
assets
PRO FORMA PRO FORMA
COMBINED COMBINED
FIRST FIRST FIRST FIRST FIRST FIRST
AMERICAN AMERICAN AMERICAN AMERICAN AMERICAN AMERICAN
SMALL CAP SMALL CAP SMALL CAP SMALL CAP SMALL CAP SMALL CAP
CORE FUND CORE FUND SELECT CORE FUND CORE FUND SELECT FUND
SHARES SHARES FUND SHARES MARKET VALUE MARKET VALUE MARKET VALUE
---------- ---------- ----------- ------------ ------------ ------------
73,350 -- 73,350 TheraSense* (A) 1,024 -- 1,024
33,500 14,200 47,700 Transkaryotic Therapies* (A) 1,086 460 1,546
-- 32,900 32,900 Triad Hospitals* (A) -- 1,249 1,249
21,750 -- 21,750 Trimeris* (A) 971 -- 971
33,550 -- 33,550 Wilson Greatbatch Technologies* 933 -- 933
-- 44,800 44,800 Universal Health Services* (A) -- 2,292 2,292
78,050 -- 78,050 Wright Medical Group* 1,485 -- 1,485
26,300 -- 26,300 Zoll Medical* 800 -- 800
------------ ------------ ------------
45,313 53,075 98,388
------------ ------------ ------------
Industrials - 12.3%
15,500 -- 15,500 A.O. Smith 441 -- 441
-- 83,600 83,600 AGCO* (A) -- 1,939 1,939
30,900 -- 30,900 AMETEK 900 -- 900
50,500 -- 50,500 Apogee Enterprises 552 -- 552
71,650 -- 71,650 Armor Holdings* (A) 1,074 -- 1,074
-- 438,351 438,351 Atlantic Coast Airline Holdings* -- 4,055 4,055
30,300 -- 30,300 Baldor Electric 579 -- 579
31,650 -- 31,650 Black Box* 1,051 -- 1,051
18,700 -- 18,700 Career Education* (A) 898 -- 898
14,550 -- 14,550 Carlisle Companies 534 -- 534
-- 141,800 141,800 Chicago Bridge & Iron -- 3,403 3,403
23,750 -- 23,750 CLARCOR 729 -- 729
56,900 224,200 281,100 Coinstar* 1,467 5,780 7,247
52,250 -- 52,250 Corinthian Colleges* (A) 1,972 -- 1,972
40,100 -- 40,100 Corporate Executive Board* (A) 1,145 -- 1,145
19,250 -- 19,250 DRS Technologies* 716 -- 716
-- 93,590 93,590 EDO (A) -- 2,097 2,097
-- 419,900 419,900 ExpressJet Holdings* -- 3,863 3,863
30,950 -- 30,950 FTI Consulting* (A) 1,231 -- 1,231
-- 75,094 75,094 Global Payments -- 1,922 1,922
109,000 -- 109,000 Headwaters* 1,506 -- 1,506
-- 122,950 122,950 Imagistics International* -- 2,133 2,133
55,200 -- 55,200 InterCept* 546 -- 546
25,600 -- 25,600 ITT Educational Services* 481 -- 481
44,050 -- 44,050 J.B. Hunt Transport Services* (A) 1,037 -- 1,037
-- 284,800 284,800 Knight Transportation* -- 4,415 4,415
37,850 119,000 156,850 Kroll* (A) 751 2,360 3,111
16,700 -- 16,700 Landstar* 819 -- 819
23,650 -- 23,650 Manitowoc 647 -- 647
-- 237,200 237,200 Mesa Air Group* -- 866 866
57,550 -- 57,550 Moore* 564 -- 564
22,200 -- 22,200 MTC Technologies* 481 -- 481
-- 156,800 156,800 Navistar International* -- 3,399 3,399
-- 100,150 100,150 Nordson -- 2,378 2,378
87,650 -- 87,650 Pacer International * 995 -- 995
-- 130,100 130,100 Pall (A) -- 2,054 2,054
35,450 -- 35,450 Paxar 515 -- 515
64,750 -- 64,750 PRG-Schultz International* (A) 802 -- 802
43,950 -- 43,950 Regis 1,243 -- 1,243
-- 74,400 74,400 Roadway -- 2,729 2,729
27,350 -- 27,350 Roper Industries (A) 944 -- 944
-- 175,600 175,600 SkyWest -- 2,300 2,300
8,200 -- 8,200 Strayer Education* 488 -- 488
-- 74,100 74,100 Swift Transportation* -- 1,156 1,156
-- 141,300 141,300 Triumph Group* -- 3,956 3,956
26,300 -- 26,300 Veridian* 657 -- 657
19,300 130,300 149,600 Waste Connections* (A) 671 4,533 5,204
-- 93,700 93,700 Yellow* (A) -- 2,765 2,765
------------ ------------ ------------
26,436 58,103 84,539
------------ ------------ ------------
Information Technology - 19.5%
111,400 -- 111,400 02Micro International* (A) 878 -- 878
83,050 -- 83,050 Advanced Energy Industries* 740 -- 740
247,920 362,254 610,174 Aeroflex* 1,250 1,826 3,076
-- 232,225 232,225 Anaren Microwave* (A) -- 1,909 1,909
97,400 -- 97,400 Asyst Technologies* (A) 588 -- 588
62,950 513,834 576,784 ATMI* (A) 887 7,245 8,132
124,600 -- 124,600 Axcelis Technologies* 608 -- 608
24,400 -- 24,400 BARRA* 667 -- 667
115,450 -- 115,450 Borland Software* 899 -- 899
46,350 -- 46,350 Business Objects, ADR* 492 -- 492
23,700 -- 23,700 Cabot Microelectronics* (A) 883 -- 883
38,600 -- 38,600 CACI International, Cl A* 1,368 -- 1,368
126,050 -- 126,050 Carreker* 773 -- 773
242,400 -- 242,400 Centillium Communications* 291 -- 291
-- 26,800 26,800 Cerner* (A) -- 944 944
430,250 -- 430,250 ChipPAC* 920 -- 920
168,450 -- 168,450 Citrix Systems* 1,016 -- 1,016
-- 297,860 297,860 Cognex* (A) -- 4,143 4,143
5,800 -- 5,800 Cognizant Technology Solutions* (A) 333 -- 333
64,300 -- 64,300 CoorsTek* 965 -- 965
82,900 -- 82,900 Cree* (A) 1,036 -- 1,036
-- 184,500 184,500 Cymer* (A) -- 3,439 3,439
41,350 -- 41,350 Digital Insight* (A) 650 -- 650
54,300 -- 54,300 Documentum* (A) 627 -- 627
-- 329,600 329,600 DoubleClick* -- 1,694 1,694
116,900 956,710 1,073,610 Entegris* 909 7,434 8,343
-- 198,239 198,239 Exar* -- 2,290 2,290
118,150 -- 118,150 Extreme Networks* 497 -- 497
23,833 -- 23,833 Fair Isaac & Company (A) 779 -- 779
26,950 -- 26,950 Fidelity National Information Solutions* 412 -- 412
59,900 -- 59,900 FileNET* 620 -- 620
-- 166,087 166,087 Fisher Scientific International* (A) -- 5,041 5,041
105,750 -- 105,750 Foundry Networks* 580 -- 580
32,100 -- 32,100 Global Imaging Systems* 606 -- 606
42,450 -- 42,450 Hyperion Solutions* 779 -- 779
-- 455,475 455,475 Inforte* (A) -- 2,332 2,332
-- 145,900 145,900 Integrated Circuit Systems* -- 2,291 2,291
-- 533,600 533,600 Integrated Device Technology* (A) -- 5,571 5,571
70,800 -- 70,800 Intergraph* 1,210 -- 1,210
27,350 -- 27,350 Internet Security Systems* (A) 337 -- 337
-- 339,493 339,493 IXYS* (A) -- 1,708 1,708
29,050 101,400 130,450 Kronos* 716 2,497 3,213
185,850 -- 185,850 Legato Systems* 513 -- 513
238,750 -- 238,750 MatrixOne* 1,036 -- 1,036
39
FIRST AMERICAN SMALL CAP CORE FUND
PRO FORMA SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2002
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(Percentages of each investment category relate to pro forma combined total net
assets
PRO FORMA PRO FORMA
COMBINED COMBINED
FIRST FIRST FIRST FIRST FIRST FIRST
AMERICAN AMERICAN AMERICAN AMERICAN AMERICAN AMERICAN
SMALL CAP SMALL CAP SMALL CAP SMALL CAP SMALL CAP SMALL CAP
CORE FUND CORE FUND SELECT CORE FUND CORE FUND SELECT FUND
SHARES SHARES FUND SHARES MARKET VALUE MARKET VALUE MARKET VALUE
---------- ---------- ----------- ------------ ------------ ------------
76,200 -- 76,200 McDATA, Cl A* 414 -- 414
-- 142,576 142,576 Mettler-Toledo International* (A) -- 3,707 3,707
-- 802,671 802,671 Mykrolis* -- 4,937 4,937
37,550 -- 37,550 NetIQ* (A) 544 -- 544
36,050 -- 36,050 NetScreen Technologies* (A) 391 -- 391
218,520 -- 218,520 Oak Technology* (A) 695 -- 695
48,900 -- 48,900 Overture Services* 1,153 -- 1,153
-- 151,400 151,400 Photon Dynamics* (A) -- 2,821 2,821
-- 314,060 314,060 Photronics* (A) -- 3,159 3,159
35,000 -- 35,000 Plantronics* 570 -- 570
-- 200,300 200,300 Power Integrations* (A) -- 2,442 2,442
26,400 -- 26,400 Progress Software* 319 -- 319
24,400 105,700 130,100 ProQuest* (A) 741 3,208 3,949
62,950 -- 62,950 Quest Software* 592 -- 592
50,800 -- 50,800 SanDisk* (A) 666 -- 666
153,050 -- 153,050 ScanSoft* (A) 505 -- 505
39,000 -- 39,000 Silicon Laboratories* (A) 715 -- 715
132,300 -- 132,300 Silicon Storage Technology* (A) 517 -- 517
102,650 879,200 981,850 Skyworks Solutions* 465 3,983 4,448
32,500 265,521 298,021 Take-Two Interactive Software* (A) 942 7,700 8,642
41,300 380,000 421,300 Tekelec (A) 356 3,279 3,635
39,000 336,266 375,266 THQ* (A) 811 6,994 7,805
131,300 -- 131,300 TriQuint Semiconductor* 463 -- 463
-- 247,500 247,500 TriZetto Group* -- 1,233 1,233
41,100 109,100 150,200 Varian Semiconductor Equipment Associates* 676 1,794 2,470
-- 386,589 386,589 Vastera* -- 831 831
44,600 -- 44,600 WebEx Communications* (A) 499 -- 499
-- 46,835 46,835 Zoran* (A) -- 515 515
------------ ------------ ------------
36,899 96,967 133,866
------------ ------------ ------------
Materials - 1.8%
60,550 -- 60,550 Airgas* 795 -- 795
-- 30,500 30,500 Bowater -- 1,076 1,076
-- 49,010 49,010 Georgia Gulf -- 1,121 1,121
32,350 -- 32,350 Jarden* 878 -- 878
50,900 -- 50,900 Olin (A) 834 -- 834
-- 141,900 141,900 OM Group (A) -- 6,073 6,073
33,500 -- 33,500 Spartech 709 -- 709
16,550 -- 16,550 Steel Dynamics* 217 -- 217
35,000 -- 35,000 Worthington Industries 654 -- 654
------------ ------------ ------------
4,087 8,270 12,357
------------ ------------ ------------
Telecommunication Services - 0.6%
18,200 -- 18,200 Commonwealth Telephone Enterprises* 633 -- 633
-- 637,640 637,640 General Communication, Cl A* -- 2,397 2,397
27,950 -- -- Inter-Tel 569 -- 569
149,200 -- 149,200 Nextel Partners, Cl A* 803 -- 803
------------ ------------ ------------
2,005 2,397 4,402
------------ ------------ ------------
Utilities - 0.4%
------------ ------------ ------------
-- 120,400 -- Philadelphia Suburban (A) -- 2,444 2,444
------------ ------------ ------------
------------ ------------ ------------
Total Common Stocks 223,382 424,132 647,514
------------ ------------ ------------
Related Party Money Market Fund - 6.0%
------------ ------------ ------------
18,693,635 22,793,630 41,487,265 First American Prime Obligations Fund (B) 18,694 22,794 41,488
------------ ------------ ------------
Total Investments - 100.1%
(Cost $267,148, $500,857, and $768,005
respectively) $ 242,076 $ 446,926 $ 689,002
============ ============ ============
* Non-income producing security
(A) This security or a portion of this security is out on loan at September 30,
2002.
(B) This money market fund is advised by U.S. Bancorp Asset Management, Inc.,
which also serves as the advisor for this Fund.
ADR - American Depositary Receipt
Cl - Class
REIT - Real Estate Investment Trust
40
FIRST AMERICAN INTERNATIONAL FUND
PRO FORMA SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2002
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(Percentages of each investment category relate to pro forma combined total net
assets
PRO FORMA
COMBINED
FIRST PRO FORMA FIRST FIRST FIRST
AMERICAN FIRST COMBINED FIRST AMERICAN AMERICAN AMERICAN
EMERGING AMERICAN AMERICAN EMERGING INTERNATIONAL INTERNATIONAL
MARKETS FUND INTERNATIONAL INTERNATIONAL MARKETS FUND FUND MARKET FUND MARKET
SHARES FUND SHARES FUND SHARES MARKET VALUE VALUE VALUE
- ------------ ------------- -------------- -------------- ------------- -------------
Foreign Common Stock - 96.4%
Australia - 2.4%
-- 2,487,800 2,487,800 Aristocrat Leisure $ -- $ 6,530 $ 6,530
-- 346,800 346,800 Macquarie Bank -- 4,176 4,176
-- 336,400 336,400 Wesfarmers -- 4,945 4,945
-------------- ------------- -------------
-- 15,651 15,651
-------------- ------------- -------------
Brazil - 0.1%
-------------- ------------- -------------
49,600 -- 49,600 Aracruz Celulose, ADR* 727 -- 727
-------------- ------------- -------------
China - 2.5%
1,278,000 -- 1,278,000 Beijing Datang Power Generation* 479 -- 479
90,000 -- 90,000 BYD* 183 -- 183
1,138,000 -- 1,138,000 China Eastern Airlines 133 -- 133
471,000 -- 471,000 China Merchants 332 -- 332
1,524,000 -- 1,524,000 China Southern Airlines 379 -- 379
1,414,000 6,377,500 7,791,500 CNOOC 1,976 8,913 10,889
932,000 -- 932,000 Cofco International 242 -- 242
1,456,000 -- 1,456,000 Cosco Pacific 1,018 -- 1,018
1,278,000 -- 1,278,000 Denway Motors 401 -- 401
1,836,000 -- 1,836,000 Huaneng Power International 1,436 -- 1,436
2,222,000 -- 2,222,000 Wah Sang Gas Holding 296 -- 296
1,416,000 -- 1,416,000 Zhejiang Expressway* 472 -- 472
-------------- ------------- -------------
7,347 8,913 16,260
-------------- ------------- -------------
Croatia - 0.1%
-------------- ------------- -------------
51,700 -- 51,700 Pliva, GDR* 634 -- 634
-------------- ------------- -------------
Czech Republic - 0.2%
24,500 -- 24,500 Cesky Telecom* 192 -- 192
23,600 -- 23,600 Komercni Banka 1,336 -- 1,336
-------------- ------------- -------------
1,528 -- 1,528
-------------- ------------- -------------
Finland - 1.3%
-------------- ------------- -------------
-- 659,600 659,600 Nokia Oyj -- 8,768 8,768
-------------- ------------- -------------
France - 13.5%
-- 129,100 129,100 Atos Origin* -- 3,228 3,228
-- 171,090 171,090 Aventis* -- 8,962 8,962
-- 241,500 241,500 BNP Paribas* -- 7,872 7,872
-- 281,200 281,200 Compagnie de Saint-Gobain -- 6,209 6,209
-- 68,150 68,150 Danone -- 8,217 8,217
-- 131,400 131,400 Lafarge* -- 10,493 10,493
-- 114,657 114,657 Sanofi-Synthelabo* -- 6,465 6,465
-- 140,800 140,800 Schneider Electric* -- 6,245 6,245
-- 361,800 361,800 Thomson Multimedia* -- 5,700 5,700
-- 122,350 122,350 TotalFinaElf, Cl B -- 16,107 16,107
-- 150,200 150,200 Vinci -- 9,100 9,100
-------------- ------------- -------------
-- 88,598 88,598
-------------- ------------- -------------
Germany - 0.9%
-------------- ------------- -------------
-- 183,200 183,200 Deutsche Boerse AG* -- 5,993 5,993
-------------- ------------- -------------
Great Britain - 18.7%
-- 1,222,000 1,222,000 Amvescap* -- 5,785 5,785
-- 881,000 881,000 Aviva -- 4,954 4,954
-- 1,562,000 1,562,000 BAE Systems -- 4,717 4,717
-- 2,104,000 2,104,000 BP -- 14,064 14,064
-- 1,300,200 1,300,200 Compass Group -- 5,419 5,419
-- 4,053,000 4,053,000 Dixons Group* -- 10,996 10,996
-- 1,034,444 1,034,444 Electrocomponents -- 4,100 4,100
-- 1,618,000 1,618,000 EMI Group -- 4,326 4,326
-- 1,093,400 1,093,400 Lloyds TSB Group* -- 8,074 8,074
-- 435,264 435,264 Next* -- 6,360 6,360
-- 512,830 512,830 Reckitt Benckiser* -- 9,679 9,679
-- 510,400 510,400 Royal Bank of Scotland* -- 9,633 9,633
-- 750,400 750,400 Scottish & Southern Energy -- 8,085 8,085
-- 600,000 600,000 Standard Chartered -- 6,181 6,181
-- 2,898,490 2,898,490 Tesco* -- 9,380 9,380
-- 8,513,250 8,513,250 Vodafone Group -- 10,913 10,913
-------------- ------------- -------------
-- 122,666 122,666
-------------- ------------- -------------
Hong Kong - 2.9%
-- 692,800 692,800 Hang Seng Bank* -- 7,261 7,261
-- 1,056,500 1,056,500 Hutchison Whampoa -- 6,096 6,096
-- 142,000 142,000 Peregrine Investment Holdings* (A) -- -- -
-- 928,000 928,000 Sun Hung Kai Properties -- 5,449 5,449
-------------- ------------- -------------
-- 18,806 18,806
-------------- ------------- -------------
Hungary - 0.3%
797 -- 797 EGIS 34 -- 34
225,100 -- 225,100 OTP Bank 1,846 -- 1,846
-------------- ------------- -------------
1,880 -- 1,880
-------------- ------------- -------------
India - 0.2%
-------------- ------------- -------------
53,500 -- 53,500 Ranbaxy Laboratories, GDR 1,014 -- 1,014
-------------- ------------- -------------
Indonesia - 0.2%
1,174,500 -- 1,174,500 PT Astra International* 349 -- 349
3,339,000 -- 3,339,000 PT Indofood Sukses Makmur 278 -- 278
1,409,500 -- 1,409,500 PT Telekomunikasi Industries 584 -- 584
-------------- ------------- -------------
1,211 -- 1,211
-------------- ------------- -------------
Ireland - 2.1%
-- 534,960 534,960 CRH -- 5,964 5,964
-- 698,300 698,300 Irish Life & Permanent -- 7,937 7,937
-------------- ------------- -------------
-- 13,901 13,901
-------------- ------------- -------------
Israel - 0.2%
-------------- ------------- -------------
16,000 -- 16,000 Teva Pharmaceutical 1,072 -- 1,072
-------------- ------------- -------------
Italy - 6.9%
-- 447,600 447,600 Assicurazioni Generali* -- 6,565 6,565
41
FIRST AMERICAN INTERNATIONAL FUND
PRO FORMA SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2002
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(Percentages of each investment category relate to pro forma combined total net
assets
PRO FORMA
COMBINED
FIRST PRO FORMA FIRST FIRST FIRST
AMERICAN FIRST COMBINED FIRST AMERICAN AMERICAN AMERICAN
EMERGING AMERICAN AMERICAN EMERGING INTERNATIONAL INTERNATIONAL
MARKETS FUND INTERNATIONAL INTERNATIONAL MARKETS FUND FUND MARKET FUND MARKET
SHARES FUND SHARES FUND SHARES MARKET VALUE VALUE VALUE
- ------------ ------------- -------------- -------------- ------------- -------------
-- 828,400 828,400 Autogrill* -- 6,542 6,542
-- 803,000 803,000 Banco Popolare di Verona -- 9,166 9,166
-- 1,188,800 1,188,800 ENI* -- 16,308 16,308
-- 4,118,000 4,118,000 IntesaBci -- 6,919 6,919
-------------- ------------- -------------
-- 45,500 45,500
-------------- ------------- -------------
Japan - 24.8%
-- 201,700 201,700 Avex -- 2,720 2,720
-- 783,000 783,000 Brother Industries -- 5,544 5,544
-- 163,000 163,000 Canon* -- 5,329 5,329
-- 81,300 81,300 Fanuc* -- 3,633 3,633
-- 154,200 154,200 Fast Retailing -- 3,977 3,977
-- 747 747 Fuji Television -- 3,283 3,283
-- 142,800 142,800 Honda Motor -- 5,783 5,783
-- 103,000 103,000 Ito-Yokado* -- 4,044 4,044
-- 3,342,000 3,342,000 Kanematsu* -- 4,310 4,310
-- 41,700 41,700 Keyence -- 7,001 7,001
-- 619,000 619,000 Mitsubishi -- 4,159 4,159
-- 40,600 40,600 Murata Manufacturing. -- 2,068 2,068
-- 671,000 671,000 NGK Insulators -- 4,520 4,520
-- 66,500 66,500 Nidec -- 3,412 3,412
-- 368,000 368,000 Nikon* -- 2,808 2,808
-- 45,300 45,300 Nintendo* -- 5,277 5,277
-- 925 925 Nippon Mitsubishi Oil* -- 4 4
-- 588 588 Nippon Telegraph & Telephone -- 1,956 1,956
-- 803,000 803,000 Nissan Motor* -- 5,963 5,963
-- 215,500 215,500 Nitto Denko -- 5,470 5,470
-- 367,000 367,000 Nomura Holdings* -- 4,823 4,823
-- 2,290 2,290 NTT Mobile Communications* -- 3,913 3,913
-- 364,000 364,000 Olympus Optical* -- 5,331 5,331
-- 52,700 52,700 Rohm -- 6,186 6,186
-- 232,600 232,600 Sankyo -- 6,420 6,420
-- 132,000 132,000 Seven-Eleven Japan* -- 4,467 4,467
-- 436,000 436,000 Shiseido -- 5,204 5,204
-- 124,900 124,900 Sony* -- 5,243 5,243
-- 1,770,000 1,770,000 Sumitomo Chemical -- 6,790 6,790
-- 800,000 800,000 Sumitomo Metal Mining* -- 3,299 3,299
-- 1,682,000 1,682,000 Sumitomo Trust and Banking* -- 8,829 8,829
-- 128,800 128,800 Takeda Chemical Industries* -- 5,195 5,195
-- 47,300 47,300 Tohoku Pioneer -- 627 627
-- 100,000 100,000 Tokyo Electron* -- 3,828 3,828
-- 1,721,000 1,721,000 Tokyo Gas* -- 5,033 5,033
-- 211,700 211,700 Toys "R" Us-Japan -- 3,374 3,374
-- 956 956 UMC Japan* -- 927 927
-- 85,500 85,500 Yamada Denki -- 2,184 2,184
-------------- ------------- -------------
-- 162,934 162,934
-------------- ------------- -------------
Malaysia - 0.4%
309,000 -- 309,000 AMMB Holdings 330 -- 330
185,600 -- 185,600 Genting 635 -- 635
339,000 -- 339,000 Hong Leong Bank 435 -- 435
67,000 -- 67,000 Malayan Banking 141 -- 141
197,000 -- 197,000 Public Bank 133 -- 133
299,000 -- 299,000 Resorts World 708 -- 708
-- 3,325 3,325 Siverstone* (A) -- -- -
-------------- ------------- -------------
2,382 -- 2,382
-------------- ------------- -------------
Mexico - 0.9%
81,600 -- 81,600 Cemex* 340 -- 340
22,000 -- 22,000 Grupo Modelo 55 -- 55
-- 174,900 174,900 Grupo Televisa* -- 4,458 4,458
448,800 -- 448,800 Wal-Mart De Mexico, Cl U 1,086 -- 1,086
-------------- ------------- -------------
1,481 4,458 5,939
-------------- ------------- -------------
Netherlands - 2.8%
-- 423,200 423,200 Elsevier -- 5,057 5,057
-- 111,330 111,330 Jomed* -- 1,141 1,141
-- 1,233,000 1,233,000 Koninklijke KPN* -- 6,398 6,398
-- 148,600 148,600 Royal Dutch Petroleum -- 6,000 6,000
-------------- ------------- -------------
-- 18,596 18,596
-------------- ------------- -------------
Russian Federation - 1.0%
34,600 -- 34,600 Lukoil Holding, ADR 2,105 -- 2,105
30,100 -- 30,100 Sibneft, ADR* 581 -- 581
39,300 -- 39,300 Surgutneftegaz, ADR* 648 -- 648
45,200 -- 45,200 VimpelCom, ADR* 1,071 -- 1,071
13,700 -- 13,700 Wimm-Bill-Dann Foods, ADR* 234 -- 234
13,900 -- 13,900 Yukos, ADR 1,871 -- 1,871
-------------- ------------- -------------
6,510 -- 6,510
-------------- ------------- -------------
Singapore - 2.4%
-- 873,000 873,000 DBS Group Holdings -- 5,501 5,501
-- 954,000 954,000 Singapore Airlines* -- 5,153 5,153
-- 433,000 433,000 Singapore Press Holdings -- 4,629 4,629
61,000 -- 61,000 Venture Manufacturing 364 -- 364
-------------- ------------- -------------
364 15,283 15,647
-------------- ------------- -------------
South Africa - 0.4%
8,400 -- 8,400 AngloGold* 454 -- 454
37,800 -- 37,800 Gold Fields 488 -- 488
98,000 -- 98,000 SABMiller 653 -- 653
79,800 -- 79,800 Sasol 900 -- 900
-------------- ------------- -------------
2,495 -- 2,495
-------------- ------------- -------------
South Korea - 2.7%
39,100 -- 39,100 Hanaro Telecom* 108 -- 108
12,500 -- 12,500 Hite Brewery 601 -- 601
37,000 -- 37,000 Hyundai Motor 841 -- 841
40,341 -- 40,341 Kookmin Bank 1,470 -- 1,470
29,950 -- 29,950 LG Electronics Investment* 814 -- 814
6,380 -- 6,380 Pacific 613 -- 613
13,700 -- 13,700 Pohang Iron & Steel 1,188 -- 1,188
9,400 -- 9,400 S1 152 -- 152
7,700 69,500 77,200 Samsung Electronics 1,872 8,218 10,090
21,560 -- 21,560 Samsung Fire & Marine Insurance 1,254 -- 1,254
42
FIRST AMERICAN INTERNATIONAL FUND
PRO FORMA SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2002
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(Percentages of each investment category relate to pro forma combined total net
assets
PRO FORMA
COMBINED
FIRST PRO FORMA FIRST FIRST FIRST
AMERICAN FIRST COMBINED FIRST AMERICAN AMERICAN AMERICAN
EMERGING AMERICAN AMERICAN EMERGING INTERNATIONAL INTERNATIONAL
MARKETS FUND INTERNATIONAL INTERNATIONAL MARKETS FUND FUND MARKET FUND MARKET
SHARES FUND SHARES FUND SHARES MARKET VALUE VALUE VALUE
- ------------ ------------- -------------- -------------- ------------- -------------
3,200 -- 3,200 Shinsegae 482 -- 482
-------------- ------------- -------------
9,395 8,218 17,613
-------------- ------------- -------------
Spain - 2.9%
-- 389,200 389,200 Altadis* -- 8,693 8,693
-- 1,121,600 1,121,600 Amadeus Global Travel* -- 4,700 4,700
-- 632,600 632,600 NH Hoteles* -- 5,564 5,564
-------------- ------------- -------------
-- 18,957 18,957
-------------- ------------- -------------
Sweden - 2.0%
-------------- ------------- -------------
-- 1,557,000 1,557,000 Skandinaviska Enskilda* -- 13,265 13,265
-------------- ------------- -------------
Switzerland - 2.4%
-- 238,300 238,300 Adecco -- 8,064 8,064
-- 385,100 385,100 Credit Suisse* -- 7,555 7,555
-------------- ------------- -------------
-- 15,619 15,619
-------------- ------------- -------------
Taiwan - 0.5%
136,480 -- 136,480 Benq 172 -- 172
2,160,000 -- 2,160,000 Chinatrust Financial* 1,514 -- 1,514
1,943,000 -- 1,943,000 EVA Airways* 687 -- 687
180,000 -- 180,000 Formosa Plastic 172 -- 172
857,170 -- 857,170 Nan Ya Plastic 662 -- 662
874,000 -- 874,000 Taishin Financial* 350 -- 350
-------------- ------------- -------------
3,557 -- 3,557
-------------- ------------- -------------
Thailand - 0.7%
1,244,500 -- 1,244,500 Bangkok Bank* 1,525 -- 1,525
371,000 -- 371,000 Kiatnakin Finance 268 -- 268
265,000 -- 265,000 Land & Houses* 404 -- 404
1,217,000 -- 1,217,000 National Finance* 397 -- 397
226,000 -- 226,000 PTT 214 -- 214
23,000 -- 23,000 Siam Cement 451 -- 451
804,000 -- 804,000 Siam Commercial Bank* 431 -- 431
1,320,000 -- 1,320,000 Thai Farmers Bank* 778 -- 778
-------------- ------------- -------------
4,468 -- 4,468
-------------- ------------- -------------
-------------- ------------- -------------
Total Foreign Common Stocks 46,065 586,126 632,191
-------------- ------------- -------------
Investment Company - 3.2%
2,707,775 18,551,437 21,259,212 Deutsche Liquid Assets Fund 2,708 18,551 21,259
-------------- ------------- -------------
Total Investment Company 2,708 18,551 21,259
-------------- ------------- -------------
Total Investments - 99.6%
(Cost $50,515, $757,008, and
$807,523) $ 48,773 $ 604,677 $ 653,450
============== ============= =============
* Non-income producing security
ADR - American Depositary Receipt
Cl - Class
REIT - Real Estate Investment Trust
GDR - Global Depositary Receipt
At September 30, 2002, sector diversification of the Funds was as follows:
% of Net % of Net Total % of Total Value
Assets Assets Net Assets Value (000) Value (000) (000)
- ------------ ------------- -------------- -------------- ------------- -------------
Foreign Common Stock
20.30 13.40 13.93 Banking $ 9,959 $ 81,427 $ 91,386
17.00 10.00 10.63 Energy 8,296 61,396 69,692
9.20 5.30 5.56 Materials 4,482 32,016 36,498
5.50 0.80 1.20 Transportation 2,688 5,153 7,841
4.90 9.00 8.71 Technology Hardware & Equipment 2,408 54,716 57,124
4.50 2.20 2.34 Utilities 2,211 13,118 15,329
4.20 2.80 2.89 Food, Beverages & Tobacco 2,063 16,910 18,973
4.00 3.80 3.83 Telecommunication Services 1,955 23,180 25,135
3.60 3.40 3.41 Pharmaceuticals & Biotechnology 1,740 20,622 22,362
3.30 1.90 2.03 Automobiles 1,591 11,746 13,337
3.20 5.10 4.96 Retailing 1,568 30,935 32,503
2.70 5.00 4.84 Hotels, Restaurants & Leisure 1,343 30,475 31,818
2.60 3.20 2.16 Insurance 1,254 19,456 20,710
2.50 2.70 2.66 Consumer Durables & Apparel 1,218 16,220 17,438
2.10 1.10 1.14 Health Care Equipment & Services 1,014 6,472 7,486
2.00 4.90 4.67 Diversified Financials 995 29,606 30,601
1.30 2.50 2.06 Household & Personal Products 613 14,883 15,496
1.10 9.60 8.43 Capital Goods 515 58,034 58,549
0.30 2.10 1.97 Commercial Services & Supplies 152 12,764 12,916
-- 4.00 3.73 Media -- 24,473 24,473
-- 2.30 2.11 Food & Drug Retailing -- 13,847 13,847
-- 0.90 0.83 Real Estate -- 5,449 5,449
-- 0.50 0.49 Software & Services -- 3,228 3,228
94.30 96.50 96.39 Total Foreign Common Stocks 46,065 586,126 632,191
5.50 3.10 3.24 Total Short-Term Investments 2,708 18,551 21,259
- ------------ ------------- -------------- -------------- ------------- -------------
99.80 99.60 99.63 Total Investments 48,773 604,677 653,450
0.20 0.40 0.37 Other Assets and Liabilities, Net 73 2,353 2,426
- ------------ ------------- -------------- -------------- ------------- -------------
100.00 100.00 100.00 Net Assets $ 48,846 $607,030 $655,876
============ ============= ============== ============== ============= =============
43
FIRST AMERICAN FIXED INCOME FUND
PRO FORMA SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2002
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(Percentages of each investment category relate to pro forma combined total net
assets
PRO FORMA
PRO FORMA COMBINED
FIRST COMBINED FIRST FIRST FIRST
FIRST AMERICAN FIRST AMERICAN AMERICAN AMERICAN
AMERICAN FIXED AMERICAN BOND IMMDEX FIXED INCOME CORE BOND
BOND IMMDEX INCOME CORE BOND FUND MARKET FUND MARKET FUND MARKET
FUND PAR FUND PAR FUND PAR VALUE VALUE VALUE
- ----------- ---------- ---------- ------------ ------------ ------------
Corporate Bonds - 35.0%
Consumer Goods - 0.9%
Bristol-Myers Squibb
$ 5,000 $ -- $ 5,000 5.750%, 10/01/11 $ 5,391 $ -- $ 5,391
Conagra Foods
-- 7,000 7,000 6.750%, 09/15/11 (A) -- 7,992 7,992
Pepsico
1,500 -- 1,500 4.500%, 09/15/04 1,565 -- 1,565
U.S. Tobacco
-- 5,000 5,000 6.625%, 07/15/12 (B) -- 5,435 5,435
------------ ------------ ------------
6,956 13,427 20,383
------------ ------------ ------------
Energy - 1.4%
Burlington Resources
1,500 -- 1,500 7.400%, 12/01/31 1,749 -- 1,749
Consolidated Natural Gas
-- 13,000 13,000 7.250%, 10/01/04 -- 13,921 13,921
Schlumberger Technology
4,000 7,000 11,000 6.500%, 04/15/12 (A) (B) 4,514 7,899 12,413
Sunoco, Callable 06/01/06 @ 100
2,802 -- 2,802 9.375%, 06/01/16 3,436 -- 3,436
------------ ------------ ------------
9,699 21,820 31,519
------------ ------------ ------------
Finance - 16.0%
ABN AMRO
-- 7,000 7,000 7.550%, 06/28/06 -- 7,992 7,992
Aetna Services
1,800 -- 1,800 6.750%, 09/15/13 2,000 -- 2,000
Allstate
2,530 -- 2,530 6.125%, 02/15/12 2,734 -- 2,734
Associated P&C Holdings
4,895 -- 4,895 6.750%, 07/15/03 (A) 5,038 -- 5,038
Bank of America
3,539 -- 3,539 10.000%, 02/01/03 3,634 -- 3,634
5,155 -- 5,155 10.200% 07/15/15 7,423 -- 7,423
-- 7,000 7,000 7.125%, 09/15/06 -- 8,062 8,062
Bank of Boston
2,500 4,000 6,500 6.375%, 04/15/08 2,721 4,354 7,075
Bear Stearns
-- 3,000 3,000 5.700%, 01/15/07 -- 3,199 3,199
Boeing Capital
2,400 -- 2,400 5.800%, 01/15/13 (B) 2,421 -- 2,421
Cigna
-- 10,726 10,726 7.400%, 01/15/03 -- 10,862 10,862
Countrywide Home Loan
-- 7,000 7,000 5.500%, 08/01/06 -- 7,353 7,353
Credit Suisse First Boston
-- 7,000 7,000 5.875%, 08/01/06 -- 7,505 7,505
Dresdner Bank
3,500 -- 3,500 7.250%, 09/15/15 4,254 -- 4,254
ERAC USA Finance
-- 7,000 7,000 7.350%, 06/15/08 (B) -- 7,729 7,729
First National Bank of Chicago
1,500 -- 1,500 8.080%, 01/05/18 1,883 -- 1,883
First National Bank of Omaha
2,700 -- 2,700 7.320%, 12/01/10 2,883 -- 2,883
Ford Motor Credit
5,000 -- 5,000 7.250%, 10/25/11 (B) 4,638 -- 4,638
5,000 -- 5,000 6.875%, 02/01/06 4,904 -- 4,904
GE Global Insurance
-- 15,000 15,000 7.750%, 06/15/30 -- 16,961 16,961
General Electric Capital
5,000 -- 5,000 6.875%, 11/15/10 5,656 -- 5,656
General Electric Capital, Series A
5,000 -- 5,000 5.000%, 06/15/07 (B) 5,284 -- 5,284
General Motors Acceptance
3,000 -- 3,000 8.750%, 07/15/05 3,242 -- 3,242
2,000 -- 2,000 6.875%, 09/15/11 1,957 -- 1,957
-- 12,000 12,000 6.150%, 04/05/07 -- 12,065 12,065
Goldman Sachs
-- 3,000 3,000 6.650%, 05/15/09 -- 3,318 3,318
10,000 -- 10,000 6.250%, 02/01/03 (A) 10,143 -- 10,143
5,000 -- 5,000 6.600%, 01/15/12 5,500 -- 5,500
Heller Financial
1,285 -- 1,285 8.000%, 06/15/05 1,430 -- 1,430
Household Finance
-- 10,000 10,000 7.200%, 07/15/06 -- 10,257 10,257
3,000 -- 3,000 8.000%, 07/15/10 3,097 -- 3,097
Household Netherlands
10,000 -- 10,000 6.200%, 12/01/03 10,377 -- 10,377
International Lease Finance
-- 5,000 5,000 5.750%, 10/15/06 -- 5,157 5,157
-- 4,940 4,940 5.750%, 02/15/07 -- 5,097 5,097
Key Bank
-- 7,000 7,000 7.000%, 02/01/11 -- 7,820 7,820
Lehman Brothers Holdings
-- 7,000 7,000 7.875%, 08/15/10 -- 8,233 8,233
2,620 -- 2,620 11.625%, 05/15/05 3,165 -- 3,165
Lehman Brothers Holdings, Series F
5,000 -- 5,000 7.500%, 09/01/06 5,678 -- 5,678
MBNA America Bank
-- 4,500 4,500 6.875%, 07/15/04 (B) -- 4,747 4,747
2,000 7,000 9,000 6.625%, 06/15/12 (A) (B) 1,995 6,984 8,979
Merrill Lynch
5,000 -- 5,000 5.880%, 01/15/04 5,199 -- 5,199
Money Store
-- 26,795 26,795 7.300%, 12/01/02 -- 27,003 27,003
Morgan Stanley Dean Witter
-- 5,000 5,000 5.800%, 04/01/07 -- 5,362 5,362
2,725 -- 2,725 6.100%, 04/15/06 2,942 -- 2,942
8,000 -- 8,000 6.750%, 04/15/11 8,756 -- 8,756
National Rural Utilities
-- 10,000 10,000 7.250%, 03/01/12 -- 11,151 11,151
3,300 -- 3,300 5.750%, 08/28/09 3,369 -- 3,369
44
FIRST AMERICAN FIXED INCOME FUND
PRO FORMA SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2002
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(Percentages of each investment category relate to pro forma combined total net
assets
PRO FORMA
PRO FORMA COMBINED
FIRST COMBINED FIRST FIRST FIRST
FIRST AMERICAN FIRST AMERICAN AMERICAN AMERICAN
AMERICAN FIXED AMERICAN BOND IMMDEX FIXED INCOME CORE BOND
BOND IMMDEX INCOME CORE BOND FUND MARKET FUND MARKET FUND MARKET
FUND PAR FUND PAR FUND PAR VALUE VALUE VALUE
- ----------- ---------- ---------- ------------ ------------ ------------
Newcourt Credit Group, Series B
3,490 7,000 10,490 6.875%, 02/16/05 3,573 7,166 10,739
Norwest
-- 5,000 5,000 6.550%, 12/01/06 -- 5,641 5,641
Paine Webber
2,500 -- 2,500 6.450%, 12/01/03 2,627 -- 2,627
2,450 -- 2,450 6.730%, 01/20/04 2,587 -- 2,587
1,540 -- 1,540 8.875%, 03/15/05 1,736 -- 1,736
Principal Financial
7,000 -- 7,000 8.200%, 08/15/09 (A) 8,040 -- 8,040
Salomon Smith Barney Holdings
2,100 -- 2,100 6.750%, 02/15/03 2,134 -- 2,134
5,375 5,000 10,375 6.500%, 02/15/08 (A) 5,925 5,512 11,437
Sanwa Bank
2,500 -- 2,500 8.350%, 07/15/09 (A) 2,742 -- 2,742
Travelers Group
3,450 -- 3,450 7.000%, 06/15/03 3,560 -- 3,560
Unitedhealth Group
10,000 -- 10,000 6.600%, 12/01/03 10,457 -- 10,457
Western National
2,456 -- 2,456 7.125%, 02/15/04 2,587 -- 2,587
------------ ------------ ------------
168,291 199,530 367,821
------------ ------------ ------------
Manufacturing - 4.3%
Alcoa
-- 7,150 7,150 5.375%, 01/15/13 -- 7,591 7,591
Boeing
-- 10,000 10,000 7.250%, 06/15/25 -- 10,679 10,679
Bombardier
-- 4,750 4,750 6.750%, 05/01/12 (A) (B) -- 3,939 3,939
DaimlerChrysler
5,000 -- 5,000 7.200%, 09/01/09 5,367 -- 5,367
Delphi Auto Systems
3,500 -- 3,500 6.550%, 06/15/06 3,750 -- 3,750
Dow Chemical
3,000 5,200 8,200 6.000%, 10/01/12 3,124 5,416 8,540
Ford Motor
-- 10,000 10,000 7.450%, 07/16/31 (A) -- 8,142 8,142
2,934 -- 2,934 9.215%, 09/15/21 2,832 -- 2,832
Ford Motor, Callable 11/15/02 @
104.15
1,000 -- 1,000 8.875%, 11/15/22 899 -- 899
General Motors
-- 2,000 2,000 8.875%, 05/15/03 -- 2,052 2,052
5,000 -- 5,000 6.750%, 05/01/28 4,341 -- 4,341
Georgia-Pacific, Callable 10/01/02
@ 104.70
4,605 -- 4,605 9.875%, 11/01/21 3,684 -- 3,684
Honeywell International
-- 5,000 5,000 7.000%, 03/15/07 -- 5,643 5,643
IBM
5,000 -- 5,000 6.500%, 01/15/28 (B) 5,279 -- 5,279
Motorola
-- 7,000 7,000 6.750%, 02/01/06 (A) -- 6,825 6,825
Pactiv
2,150 -- 2,150 7.950%, 12/15/25 2,452 -- 2,452
Toll Road Investors
5,800 -- 5,800 0.000%, 02/15/04 (A) (C) 5,583 -- 5,583
1,000 -- 1,000 0.000%, 02/15/05 (A) (C) 923 -- 923
TRW
3,360 -- 3,360 6.625%, 06/01/04 3,510 -- 3,510
2,000 -- 2,000 7.625%, 03/15/06 2,201 -- 2,201
Visteon
2,500 -- 2,500 8.250%, 08/01/10 2,708 -- 2,708
------------ ------------ ------------
46,653 50,287 96,940
------------ ------------ ------------
Real Estate - 1.1%
Eop Operating
-- 5,000 5,000 7.750%, 11/15/07 -- 5,745 5,745
Equity Residential Properties
2,750 -- 2,750 6.625%, 03/15/12 2,958 -- 2,958
Security Capital Group
2,850 -- 2,850 7.750%, 11/15/03 3,018 -- 3,018
Simon Property Group
-- 10,000 10,000 7.750%, 01/20/11 -- 11,421 11,421
------------ ------------ ------------
5,976 17,166 23,142
------------ ------------ ------------
Services - 2.5%
American Home Products
5,250 -- 5,250 6.700%, 03/15/11 5,743 -- 5,743
AOL Time Warner
-- 3,500 3,500 6.875%, 05/01/12 (A) -- 3,185 3,185
British Sky Broadcasting
2,500 -- 2,500 6.875%, 02/23/09 2,512 -- 2,512
Cendant
4,500 -- 4,500 7.750%, 12/01/03 (B) 4,500 -- 4,500
Comcast Cable Communications
-- 5,000 5,000 7.125%, 06/15/13 -- 4,625 4,625
Continental Cablevision, Callable
08/01/05 @ 104.75
7,500 -- 7,500 9.500%, 08/01/13 6,975 -- 6,975
Duty Free International
6,450 -- 6,450 7.000%, 01/15/04 (D) 3,161 -- 3,161
Hertz
2,500 -- 2,500 7.625%, 08/15/07 2,464 -- 2,464
J.C. Penney, Callable 10/01/02 @
104.12
2,758 -- 2,758 9.750%, 06/15/21 2,593 -- 2,593
Kroger
-- 7,650 7,650 6.750%, 04/15/12 (A) -- 8,379 8,379
Safeway
-- 7,150 7,150 4.800%, 07/16/07 -- 7,418 7,418
Time Warner
2,200 -- 2,200 9.125%, 01/15/13 2,145 -- 2,145
Walt Disney
2,500 -- 2,500 6.375%, 03/01/12 (B) 2,654 -- 2,654
------------ ------------ ------------
32,747 23,607 56,354
------------ ------------ ------------
45
FIRST AMERICAN FIXED INCOME FUND
PRO FORMA SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2002
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(Percentages of each investment category relate to pro forma combined total net
assets
PRO FORMA
PRO FORMA COMBINED
FIRST COMBINED FIRST FIRST FIRST
FIRST AMERICAN FIRST AMERICAN AMERICAN AMERICAN
AMERICAN FIXED AMERICAN BOND IMMDEX FIXED INCOME CORE BOND
BOND IMMDEX INCOME CORE BOND FUND MARKET FUND MARKET FUND MARKET
FUND PAR FUND PAR FUND PAR VALUE VALUE VALUE
- ----------- ---------- ---------- ------------ ------------ ------------
Transportation - 1.8%
Air 2 US
5,000 -- 5,000 8.627%, 10/01/20 (A) 2,250 -- 2,250
1,000 -- 1,000 10.127%, 10/01/20 (A) 350 -- 350
America West Airlines
1,779 -- 1,779 8.540%, 01/02/06 1,581 -- 1,581
2,758 -- 2,758 7.930%, 01/02/19 2,827 -- 2,827
American Airlines
1,500 -- 1,500 10.210%, 01/01/10 1,508 -- 1,508
Burlington Northern Santa Fe
-- 11,825 11,825 6.375%, 12/15/05 -- 13,034 13,034
Continental Airlines, Series 99-2
-- 5,365 5,365 7.056%, 03/15/11 -- 5,003 5,003
Continental Airlines, Series 974C
2,141 -- 2,141 6.800%, 07/02/07 1,728 -- 1,728
CSX
3,000 -- 3,000 5.850%, 12/01/03 3,120 -- 3,120
Federal Express
4,400 -- 4,400 9.650%, 06/15/12 5,827 -- 5,827
Northwest Airlines, Series 991A
-- 4,095 4,095 6.810%, 08/01/21 -- 3,693 3,693
------------ ------------ ------------
19,191 21,730 40,921
------------ ------------ ------------
Utilities - 4.5%
Alltel
-- 10,000 10,000 6.750%, 09/15/05 -- 10,808 10,808
Appalachian Power, Series E
-- 5,000 5,000 4.800%, 06/15/05 -- 5,111 5,111
AT&T
2,000 7,000 9,000 6.500%, 11/15/06 (A) 1,653 6,860 8,513
AT&T Wireless
2,000 -- 2,000 7.875%, 03/01/11 1,530 -- 1,530
1,000 -- 1,000 8.125%, 05/01/12 770 -- 770
British Telecom
2,000 -- 2,000 8.375%, 12/15/10 2,346 -- 2,346
Conectiv
2,256 -- 2,256 6.730%, 06/01/06 2,381 -- 2,381
Deutsche Telecom
500 -- 500 7.750%, 06/15/05 531 -- 531
3,000 -- 3,000 8.250%, 06/15/30 3,226 -- 3,226
FPL Group Capital
-- 5,000 5,000 7.625%, 09/15/06 -- 5,631 5,631
France Telecom
2,300 -- 2,300 8.250%, 03/01/11 (E) 2,509 -- 2,509
2,000 -- 2,000 8.500%, 03/01/31 (E) 2,201 -- 2,201
GTE North, Series A, Callable
10/01/02 @ 104.00
1,100 -- 1,100 9.600%, 01/01/21 1,151 -- 1,151
Nortel Networks
-- 1,000 1,000 6.875%, 10/01/02 -- 985 985
Northern State Power-Minnesota
-- 5,480 5,480 8.000%, 08/28/12 (B) -- 5,804 5,804
Ohio Valley Electric
-- 4,000 4,000 5.940%, 02/12/06 (B) -- 4,246 4,246
Old Dominion Electric Co-op First
Mortgage, Callable 12/01/02 @
108.76
6,850 -- 6,850 8.760%, 12/01/22 7,651 -- 7,651
PSEG Power
2,500 5,000 7,500 6.950%, 06/01/12 (A) (B) 2,431 4,861 7,292
PSI Energy
3,100 -- 3,100 7.850%, 10/15/07 3,449 -- 3,449
Qwest
2,000 -- 2,000 7.250%, 09/15/25 1,380 -- 1,380
Sprint
1,750 -- 1,750 9.000%, 10/15/19 1,260 -- 1,260
Sprint Capital
3,250 -- 3,250 5.700%, 11/15/03 2,893 -- 2,893
Utilicorp United
3,000 -- 3,000 7.625%, 11/15/09 2,220 -- 2,220
Verizon Global Funding
7,000 -- 7,000 7.250%, 12/01/10 (B) 7,348 -- 7,348
-- 5,000 5,000 7.750%, 12/01/30 -- 4,963 4,963
Verizon Wireless
-- 6,560 6,560 5.375%, 12/15/06 (B) -- 6,170 6,170
------------ ------------ ------------
46,930 55,439 102,369
------------ ------------ ------------
Yankee - 2.5%
AT&T Canada, Callable 11/01/03 @
105.31
1,000 -- 1,000 10.625%, 11/01/08 90 -- 90
Banco Santander
4,925 -- 4,925 6.500%, 11/01/05 5,376 -- 5,376
Ford Capital
1,400 -- 1,400 9.500%, 06/01/10 1,709 -- 1,709
Hydro-Quebec
3,500 -- 3,500 11.750%, 02/01/12 5,452 -- 5,452
Hydro-Quebec, Callable 01/15/03 @
100
750 -- 750 9.750%, 01/15/18 765 -- 765
Korea Electric Power, Putable
08/01/04 @ 100
1,400 -- 1,400 6.750%, 08/01/27 1,477 -- 1,477
National Bank of Hungary
2,490 -- 2,490 8.875%, 11/01/13 3,365 -- 3,365
National Westminster Bancorp
1,000 -- 1,000 9.375%, 11/15/03 1,078 -- 1,078
Newfoundland (Province of) Canada
1,975 -- 1,975 10.000%, 12/01/20 2,989 -- 2,989
Norsk Hydro
2,900 -- 2,900 9.000%, 04/15/12 3,791 -- 3,791
Pemex Project
3,000 7,295 10,295 9.125%, 10/13/10 3,199 7,778 10,977
Quebec Province
-- 3,000 3,000 7.500%, 09/15/29 (A) -- 3,861 3,861
Stagecoach Holdings
2,500 -- 2,500 8.625%, 11/15/09 2,228 -- 2,228
Sweden (Kingdom of)
1,100 -- 1,100 11.125%, 06/01/15 1,761 -- 1,761
Tyco International
1,100 -- 1,100 6.750%, 02/15/11 (B) 924 -- 924
46
FIRST AMERICAN FIXED INCOME FUND
PRO FORMA SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2002
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(Percentages of each investment category relate to pro forma combined total net
assets
PRO FORMA
PRO FORMA COMBINED
FIRST COMBINED FIRST FIRST FIRST
FIRST AMERICAN FIRST AMERICAN AMERICAN AMERICAN
AMERICAN FIXED AMERICAN BOND IMMDEX FIXED INCOME CORE BOND
BOND IMMDEX INCOME CORE BOND FUND MARKET FUND MARKET FUND MARKET
FUND PAR FUND PAR FUND PAR VALUE VALUE VALUE
- ----------- ---------- ---------- ------------ ------------ ------------
Wharf Capital International
2,700 -- 2,700 8.875%, 11/01/04 3,011 -- 3,011
2,675 -- 2,675 7.625%, 03/13/07 3,046 -- 3,046
------------ ------------ ------------
40,261 11,639 51,900
------------ ------------ ------------
------------ ------------ ------------
Total Corporate Bonds 376,704 414,645 791,349
------------ ------------ ------------
U.S. Government & Agency Securities
- 29.8%
U. S. Agency Debentures - 11.1%
FHLB
6,000 -- 6,000 5.785%, 02/09/05 6,488 -- 6,488
1,500 -- 1,500 6.365%, 11/05/07 1,716 -- 1,716
7,500 -- 7,500 5.750%, 05/15/08 8,362 -- 8,362
3,000 -- 3,000 6.625%, 11/15/10 3,515 -- 3,515
-- 12,000 12,000 6.090%, 06/02/06 -- 13,353 13,353
FHLMC
15,000 -- 15,000 5.950%, 01/19/06 16,574 -- 16,574
15,000 -- 15,000 5.500%, 07/15/06 16,428 -- 16,428
10,000 -- 10,000 5.125%, 10/15/08 10,843 -- 10,843
7,500 -- 7,500 6.625%, 09/15/09 8,763 -- 8,763
5,000 -- 5,000 7.000%, 03/15/10 5,976 -- 5,976
-- 20,500 20,500 3.750%, 04/15/04 -- 21,095 21,095
-- 23,000 23,000 5.000%, 05/15/04 -- 24,156 24,156
-- 13,000 13,000 5.250%, 01/15/06 -- 14,074 14,074
-- 14,000 14,000 2.875%, 09/26/05 -- 14,056 14,056
-- 15,000 15,000 3.500%, 09/15/07 -- 15,162 15,162
FNMA
5,000 -- 5,000 5.250%, 06/15/06 5,422 -- 5,422
20,000 -- 20,000 7.125%, 03/15/07 23,379 -- 23,379
7,500 -- 7,500 4.250%, 07/15/07 7,863 -- 7,863
2,090 -- 2,090 6.210%, 11/07/07 2,376 -- 2,376
6,300 -- 6,300 5.250%, 01/15/09 6,854 -- 6,854
2,600 -- 2,600 7.250%, 01/15/10 3,142 -- 3,142
16,200 -- 16,200 5.000%, 11/17/11 16,305 -- 16,305
-- 20,000 20,000 6.625%, 11/15/30 -- 23,443 23,443
-- 3,000 3,000 6.625%, 09/15/09 -- 3,505 3,505
-- 16,000 16,000 6.250%, 02/01/11 -- 17,909 17,909
------------ ------------ ------------
144,006 146,753 290,759
------------ ------------ ------------
U.S. Treasuries - 18.7%
U.S. Treasury Bonds
34,080 -- 34,080 9.250%, 02/15/16 51,302 -- 51,302
30,673 -- 30,673 8.000%, 11/15/21 43,376 -- 43,376
38,400 -- 38,400 6.000%, 02/15/26 44,771 -- 44,771
-- 38,000 38,000 5.375%, 02/15/31 -- 42,224 42,224
-- 2,865 2,865 8.875%, 08/15/17 -- 4,247 4,247
-- 6,150 6,150 8.875%, 02/15/19 -- 9,211 9,211
-- 4,183 4,183 8.750%, 08/15/20 -- 6,265 6,265
-- 25,000 25,000 6.250%, 08/15/23 -- 29,820 29,820
U.S. Treasury Notes
10,000 -- 10,000 3.000%, 02/29/04 10,200 -- 10,200
20,000 -- 20,000 4.375%, 05/15/07 21,590 -- 21,590
10,000 -- 10,000 4.750%, 11/15/08 10,990 -- 10,990
19,500 -- 19,500 6.000%, 08/15/09 22,844 -- 22,844
10,100 -- 10,100 5.000%, 02/15/11 11,223 -- 11,223
10,000 -- 10,000 4.875%, 02/15/12 11,022 -- 11,022
-- 7,350 7,350 5.875%, 11/15/04 -- 7,982 7,982
-- 38,145 38,145 3.250%, 08/15/07 -- 39,306 39,306
-- 1,000 1,000 5.500%, 05/15/09 -- 1,142 1,142
-- 2,340 2,340 4.375%, 08/15/12 -- 2,489 2,489
U.S. Treasury Notes (TIPS)
-- 22,295 22,295 3.625%, 01/15/08 -- 24,596 24,596
-- 16,433 16,433 3.875%, 04/15/29 -- 20,196 20,196
------------ ------------ ------------
227,318 187,478 414,796
------------ ------------ ------------
Total U.S. Government & Agency
Securities 371,324 334,231 705,555
------------ ------------ ------------
U.S. Government Agency
Mortgage-Backed Securities - 17.1%
Adjustable Rate - 0.0%
GNMA Pool
-- 9 9 7.750%, 08/20/23, #8259 -- 9 9
Fixed Rate - 17.1%
FHLMC Gold Pool
-- 8,446 8,446 6.500%, 01/01/30, #C55738 -- 8,789 8,789
-- 15,074 15,074 6.500%, 01/01/28, #G00876 -- 15,767 15,767
-- 10,142 10,142 6.500%, 04/01/29, #C00742 -- 10,560 10,560
FNMA Pool
-- 12,403 12,403 6.000%, 04/01/31, #535822 -- 12,756 12,756
-- 10,452 10,452 6.000%, 05/01/31, #511797 -- 10,750 10,750
-- 28,716 28,716 7.000%, 07/01/32, #254379 -- 29,999 29,999
-- 30,000 30,000 6.500%, 09/01/32, #656918 -- 31,078 31,078
-- 6,500 6,500 6.255%, 09/01/13, #360500 -- 7,372 7,372
-- 18,303 18,303 5.500%, 02/01/14, #440780 -- 19,001 19,001
-- 4,949 4,949 7.000%, 02/01/15, #535206 -- 5,258 5,258
-- 12,936 12,936 7.000%, 08/01/16, #591038 -- 13,680 13,680
-- 4,343 4,343 7.000%, 04/01/26, #340798 -- 4,560 4,560
-- 4,463 4,463 7.000%, 05/01/26, #250551 -- 4,692 4,692
-- 10,706 10,706 6.000%, 12/01/28, #456276 -- 11,077 11,077
-- 18,183 18,183 6.500%, 02/01/29, #252255 -- 18,904 18,904
-- 14,898 14,898 6.000%, 05/01/29, #323715 -- 15,415 15,415
-- 11,282 11,282 6.500%, 07/01/29, #252570 -- 11,730 11,730
FNMA Pool TBA
-- 12,650 12,650 6.000%, 10/01/32, #661581 -- 12,994 12,994
FNMA TBA
-- 43,000 43,000 6.500%, 06/01/30 -- 44,559 44,559
-- 23,500 23,500 6.500%, 06/01/15 -- 24,631 24,631
GNMA Pool
-- 11,442 11,442 7.500%, 11/15/30, #537699 -- 12,153 12,153
-- 12,324 12,324 6.500%, 05/15/32, #587673 -- 12,863 12,863
-- 13,212 13,212 6.500%, 04/15/29, #487110 -- 13,831 13,831
FHLMC Gold Pool
1,117 -- 1,117 6.500%, 02/01/31, #C47895 1,160 -- 1,160
9,684 -- 9,684 6.500%, 05/01/31, #C51020 10,057 -- 10,057
FHLMC Pool
21 -- 21 7.500%, 04/01/07, #140151 22 -- 22
47
FIRST AMERICAN FIXED INCOME FUND
PRO FORMA SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2002
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(Percentages of each investment category relate to pro forma combined total net
assets
PRO FORMA
PRO FORMA COMBINED
FIRST COMBINED FIRST FIRST FIRST
FIRST AMERICAN FIRST AMERICAN AMERICAN AMERICAN
AMERICAN FIXED AMERICAN BOND IMMDEX FIXED INCOME CORE BOND
BOND IMMDEX INCOME CORE BOND FUND MARKET FUND MARKET FUND MARKET
FUND PAR FUND PAR FUND PAR VALUE VALUE VALUE
- ----------- ---------- ---------- ------------ ------------ ------------
FNMA Pool
38 -- 38 7.750%, 06/01/08, #001464 40 -- 40
83 -- 83 6.500%, 08/01/29, #252645 86 -- 86
8,416 -- 8,416 6.500%, 05/01/30, #535300 8,745 -- 8,745
GNMA Pool
2,929 -- 2,929 6.000%, 03/15/31, #541302 3,044 -- 3,044
4,212 -- 4,212 6.000%, 03/15/31, #554675 4,383 -- 4,383
------------ ------------ ------------
27,537 352,428 379,965
------------ ------------ ------------
Total U.S. Government Agency
Mortgage-Backed Securities 27,537 352,428 379,965
------------ ------------ ------------
Asset-Backed Securities - 6.4%
Automobiles - 1.9%
Capital One Auto Finance Trust
Series 2001-A Class A4
-- 10,000 10,000 5.400%, 05/15/08 -- 10,642 10,642
Chase Manhattan Auto Owner Trust
Series 2002-B, Class A4
-- 10,000 10,000 4.210%, 01/15/09 -- 10,432 10,432
Daimler Chrysler Auto Trust Series
2000-C, Class A3
-- 6,777 6,777 6.820%, 09/06/04 -- 6,874 6,874
World Omni Auto Receivables Trust
Series 2001-B, Class A4
-- 13,000 13,000 4.490%, 08/20/08 -- 13,621 13,621
------------ ------------ ------------
-- 41,569 41,569
------------ ------------ ------------
Commercial - 2.3%
Asset Securitization Series
1996-MD6, Class A1B
-- 18,600 18,600 6.880%, 11/13/29 -- 19,565 19,565
Bank of America - First Union NB
Commercial Mortgage Series 2001-3,
Class A1
-- 9,657 9,657 4.890%, 04/11/37 -- 10,099 10,099
Merrill Lynch Mortgage Investors
Series 1995-C3, Class A3
-- 10,585 10,585 6.540%, 12/26/25 -- 10,786 10,786
Morgan Stanley Capital Investments
Series 1999-FNV1, Class A1
-- 9,032 9,032 6.120%, 03/15/31 -- 9,772 9,772
------------ ------------ ------------
-- 50,222 50,222
------------ ------------ ------------
Credit Cards - 1.6%
Discover Card Master Trust I
Series 2001-5, Class A
-- 7,000 7,000 5.300%, 11/16/06 -- 7,360 7,360
Sears Credit Account Master Trust
Series 1999-2 Class A
-- 8,333 8,333 6.350%, 02/16/07 -- 8,409 8,409
Sears Credit Account Master Trust
Series 2000-1, Class A
-- 15,000 15,000 7.250%, 11/15/07 -- 15,520 15,520
Citibank Credit Card Master Trust
Series 1997-6, Class A
5,000 -- 5,000 0.000%, 08/15/06 4,810 -- 4,810
------------ ------------ ------------
4,810 31,289 36,099
------------ ------------ ------------
Home Equity - 0.4%
Amresco Residential Security
Mortgage Series 1997-3, Class A9
3,572 -- 3,572 6.960%, 03/25/27 3,664 -- 3,664
Contimortgage Home Equity Loan
Trust
Series 1998-1, Class A6
1,050 -- 1,050 6.580%, 12/15/18 1,075 -- 1,075
Series 1997-3, Class A8
3,000 -- 3,000 7.580%, 08/15/28 3,128 -- 3,128
Delta Home Equity Loan Trust
Series 1997-3 Class A6F
1,152 -- 1,152 6.860%, 10/25/28 1,228 -- 1,228
------------ ------------ ------------
9,095 -- 9,095
------------ ------------ ------------
Manufactured Housing - 0.2%
Green Tree Financial Series
1993-4, Class A4
------------ ------------ ------------
-- 4,578 4,578 6.600%, 01/15/19 -- 4,688 4,688
------------ ------------ ------------
Total Asset-Backed Securities 13,905 127,768 141,673
------------ ------------ ------------
CMO - U.S. Government Agency
Mortgage-Backed Securities - 4.3%
Fixed Rate - 2.9%
FDIC REMIC Trust Series 1996-C1,
Class 1A
835 -- 835 6.750%, 05/25/26 835 -- 835
FHLMC
Series 6, Class C
148 -- 148 9.050%, 06/15/19 169 -- 169
Series 1022 Class J
205 -- 205 6.000%, 12/15/20 209 -- 209
Series 162, Class F
627 -- 627 7.000%, 05/15/21 653 -- 653
Series 188, Class H
494 -- 494 7.000%, 09/15/21 513 -- 513
Series 1201, Class E
101 -- 101 7.400%, 12/15/21 102 -- 102
Series 1790, Class A
557 -- 557 7.000%, 04/15/22 582 -- 582
Series 1699, Class TD
-- 10,000 10,000 6.000%, 03/15/24 -- 10,668 10,668
Series 1723, Class PJ
-- 7,133 7,133 7.000%, 02/15/24 -- 8,089 8,089
FHLMC REMIC
Series T-47, Class PJ
-- 15,000 15,000 1.650%, 08/27/05 -- 14,908 14,908
Series 1998-M1, Class A2
-- 7,500 7,500 6.250%, 01/25/08 -- 8,185 8,185
FNMA
Series 1988-24, Class G
295 -- 295 7.000%, 10/25/18 314 -- 314
Series 1989-44, Class H
255 -- 255 9.000%, 07/25/19 278 -- 278
Series 1989-90, Class E
55 -- 55 8.700%, 12/25/19 60 -- 60
Series 1990-30, Class E
263 -- 263 6.500%, 03/25/20 276 -- 276
Series 1990-61, Class H
235 -- 235 7.000%, 06/25/20 250 -- 250
Series 1990-72, Class B
163 -- 163 9.000%, 07/25/20 178 -- 178
Series 1990-102, Class J
48
FIRST AMERICAN FIXED INCOME FUND
PRO FORMA SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2002
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(Percentages of each investment category relate to pro forma combined total net
assets
PRO FORMA
PRO FORMA COMBINED
FIRST COMBINED FIRST FIRST FIRST
FIRST AMERICAN FIRST AMERICAN AMERICAN AMERICAN
AMERICAN FIXED AMERICAN BOND IMMDEX FIXED INCOME CORE BOND
BOND IMMDEX INCOME CORE BOND FUND MARKET FUND MARKET FUND MARKET
FUND PAR FUND PAR FUND PAR VALUE VALUE VALUE
- ----------- ---------- ---------- ------------ ------------ ------------
215 -- 215 6.500%, 08/25/20 226 -- 226
Series 1990-105, Class J
923 -- 923 6.500%, 09/25/20 975 -- 975
Series 1991-1, Class PG
-- 15,343 15,343 6.500%, 04/25/28 -- 16,331 16,331
Series 1991-56, Class M
843 -- 843 6.750%, 06/25/21 891 -- 891
Series 1992-120, Class C
354 -- 354 6.500%, 07/25/22 373 -- 373
------------ ------------ ------------
6,884 58,181 65,065
------------ ------------ ------------
Z-Bonds ( F ) - 1.4%
FHLMC Series 1118, Class Z
431 -- 431 8.250%, 07/15/21 457 -- 457
FHLMC Series 1677, Class Z
-- 5,699 5,699 7.500%, 07/15/23 -- 6,635 6,635
Series 1665, Class KZ
-- 10,146 10,146 6.500%, 01/15/24 -- 11,562 11,562
FNMA Series 1996-35, Class Z
-- 9,227 9,227 7.000%, 07/25/26 -- 9,908 9,908
FNMA Series 1991-134, Class Z
1,619 -- 1,619 7.000%, 10/25/21 1,716 -- 1,716
------------ ------------ ------------
2,173 28,105 30,278
------------ ------------ ------------
Total CMO - U.S. Government Agency
Mortgage-Backed Securities 9,057 86,286 95,343
------------ ------------ ------------
CMO - Private Mortgage-Backed
Securities - 2.6% Fixed Rate - 2.2%
GE Capital Mortgage Services Series
1994-17, Class A6
-- 7,000 7,000 7.000%, 05/25/24 -- 7,317 7,317
GE Capital Mortgage Services
Series 1994-17, Class A7
-- 5,179 5,179 7.000%, 05/25/24 -- 5,399 5,399
Washington Mutual Series 1999-WM2,
Class 2A
-- 4,218 4,218 7.000%, 11/19/14 -- 4,400 4,400
Washington Mutual Series 2001-AR6,
Class A5
-- 16,500 16,500 5.603%, 01/26/32 -- 16,822 16,822
Washington Mutual Series 2002-AR4,
Class A7
-- 15,000 15,000 5.598%, 04/25/32 -- 15,501 15,501
------------ ------------ ------------
-- 49,439 49,439
------------ ------------ ------------
Z-Bonds - 0.4%
GE Capital Mortgage Services
Series 1994-6, Class A9
------------ ------------ ------------
-- 7,238 7,238 6.500%, 09/25/22 -- 7,375 7,375
------------ ------------ ------------
------------ ------------ ------------
Total CMO - Private
Mortgage-Backed Securities -- 56,814 56,814
------------ ------------ ------------
Foreign Government Bonds - 0.0%
Mexico - 0.0%
United Mexican States, Series A
------------ ------------ ------------
1,500 -- 1,500 8.000%, 09/24/22 1,426 -- 1,426
------------ ------------ ------------
Poland - 0.0%
Republic of Poland
------------ ------------ ------------
2,000 -- 2,000 6.250%, 07/03/12 2,175 -- 2,175
------------ ------------ ------------
------------ ------------ ------------
Total Foreign Government Bonds 3,601 -- 3,601
------------ ------------ ------------
Related Party Money Market Fund -
Shares Shares Shares 4.1%
---------- ---------- ---------- ------------ ------------ ------------
18,689,056 71,590,914 90,279,969 First American Prime Obligations
Fund (F) 18,689 71,591 90,280
------------ ------------ ------------
------------ ------------ ------------
Total Related Party Money Market
Fund 18,689 71,591 90,280
------------ ------------ ------------
Total Investments - 90.9%
(Cost $773,613, $1,380,053, and
$2,306,006) $ 820,817 $1,443,763 $2,264,580
============ ============ ============
* Non-income producing security
(A) This security or a portion of this security is out on loan at September 30,
2002.
(B) Security sold within the terms of a private placement memorandum, exempt
from registration under section 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or other
"qualified institutional buyers." These securities have been determined to
be liquid under the guidelines established by the Funds' board of
directors.
(C) Z-Bonds - Represents securities that pay no inters or principal during
their accural periods, but accrue additional principal at specified rates.
Interest rate shown represents current yield based upon the cost basis and
estimated future cash flows.
(D) Variable Rate Security - The rate shown is the rate in effect as of
September 30, 2002.
(E) On September 20, 2002, the total cost of investment purchased on a
when-issued basis was $82,183,641.
(F) This money market fund is advised by U.S. Bancorp Asset Management, Inc.
which also serves as advisor for this Fund.
CMO - Collateralized Mortgage Obligation FHLB - Federal Home Loan Bank FHLMC -
Federal Home Loan Mortgage Corporation FNMA - Federal national Mortgage
Association GNMA - Government National Mortgage Association REMIC - Real Estate
Mortgage Investment Conduit TBA - To Be Announced TIPS - Treasury Inflation
Proteciton Security
49
FIRST AMERICAN STRATEGIC INCOME FUND
PRO FORMA SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2002
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(Percentages of each investment category relate to pro forma combined total net
assets
PRO FORMA PRO FORMA
COMBINED COMBINED
FIRST FIRST FIRST FIRST FIRST FIRST
AMERICAN AMERICAN AMERICAN AMERICAN AMERICAN AMERICAN
STRATEGIC HIGH YIELD HIGH INCOME STRATEGIC HIGH YIELD HIGH INCOME
INCOME BOND FUND BOND FUND INCOME BOND FUND BOND FUND
FUND PAR PAR PAR FUND PAR MARKET VALUE MARKET VALUE
- --------- ---------- ----------- ------------ ------------ ------------
High Yield Corporate Bonds - 51.5%
Consumer Goods - 4.5%
Agrilink Foods, Callable 11/01/03 @
105.94
$ $ 500 $ 500 11.875%, 11/01/08 $ -- $ 527 $ 527
Canandaigua Brands, Callable
03/01/04 @ 104.250
500 250 500 8.500%, 03/01/09 522 -- 522
Constellation Brands, Series B,
Callable 01/15/07 @ 104.06
-- 250 250 8.125%, 01/15/12 -- 256 256
Corn Products International
1,000 500 1500 8.250%, 07/15/07 970 485 1455
Corporacion Durango
600 -- 600 13.125%, 08/01/06 (A) (B) 493 -- 493
1,000 -- 1,000 13.750%, 07/15/09 (A) (B) 770 -- 770
Fleming, Series B, Callable 10/01/02
@ 105.313
500 -- 500 10.625%, 07/31/07 295 -- 295
Fleming Companies, Series D,
Callable 10/01/02 @ 105.31
-- 500 500 10.625%, 07/31/07 -- 295 295
Ingles Markets, Callable 12/01/06 @
104.44
500 500 1,000 8.875%, 12/01/11 455 455 910
Playtex Family Products, Callable
06/01/06 @ 104.69
500 500 1,000 9.375%, 06/01/11 537 537 1,074
Roundy's, Callable 06/15/07 @ 104.44
500 500 1,000 8.875%, 06/15/12 (A) (B) 492 492 984
Sealy Mattress, Series B, Callable
12/15/02 @ 105.437
500 -- 500 10.875%, 12/15/07 (C) 402 -- 402
Simmons, Callable 03/15/04 @ 105.12
500 500 1,000 10.250%, 03/15/09 530 530 1,060
Swift & Co., Callable 10/01/06 @
105.06
250 500 750 10.125%, 10/01/09 (A) (B) 229 457 686
------------ ------------ ------------
5,695 4,034 9,729
------------ ------------ ------------
Energy - 4.7%
Newfield Exploration, Callable
08/15/07 @ 104.19
500 500 1,000 8.375%, 08/15/12 512 512 1,024
Parker Drilling, Series AI, Callable
11/15/04 @ 105.06
1,000 1,000 2,000 10.125%, 11/15/09 (D) 960 960 1,920
Petroplus Funding, Callable 10/15/05
@ 105.250
2,750 -- 2,750 10.500%, 10/15/10 (A) 1,712 -- 1,712
Pogo Producing, Series B, Callable
10/01/02 @ 104.375
500 -- 500 8.750%, 05/15/07 515 -- 515
Pride International, Callable
06/01/04 @ 105.00
500 500 1,000 10.000%, 06/01/09 540 540 1,080
Swift Energy, Callable 08/01/04 @
105.12
500 500 1,000 10.250%, 08/01/09 495 495 990
Tesoro Petroleum, Series B, Callable
11/01/05 @ 104.81
-- 500 500 9.625%, 11/01/08 -- 285 285
Vintage Petroleum, Callable 10/01/02
@ 104.313
500 -- 500 8.625%, 02/01/09 490 -- 490
Western Oil Sands
500 500 1,000 8.375%, 05/01/12 (A) (B) 506 506 1,012
Williams
1,000 1,000 2,000 7.750%, 06/15/31 580 580 1,160
------------ ------------ ------------
6,310 3,878 10,188
------------ ------------ ------------
Finance - 2.8%
Bluewater Finance, Callable 02/15/08
@ 105.120
1,300 -- 1,300 10.250%, 02/15/12 (B) 1,222 -- 1,222
Golden State Holdings
1,000 500 1,500 7.125%, 08/01/05 1,071 536 1,607
Sovereign Bancorp
1,000 1,000 2,000 10.500%, 11/15/06 1,110 1,110 2,220
Yell Finance, Callable 08/01/06 @
105.370
1,000 -- 1,000 10.750%, 08/01/11 (A) 1,002 -- 1,002
------------ ------------ ------------
4,405 1,646 6,051
------------ ------------ ------------
Manufacturing - 7.3%
American Axle & Manufacturing,
Callable 03/01/04 @ 104.88
-- 500 500 9.750%, 03/01/09 -- 532 532
American Standard
1,000 -- 1,000 7.375%, 02/01/08 1,025 -- 1,025
Appleton Papers, Series B, Callable
12/15/05 @ 106.25
-- 500 500 12.500%, 12/15/08 -- 527 527
Applied Extrusion Technologies,
Series B, Callable 07/01/06 @ 105.37
500 500 1,000 10.750%, 07/01/11 342 342 684
Avaya, Callable 04/01/06 @ 105.56
-- 500 500 11.125%, 04/01/09 -- 325 325
B E Aerospace, Callable 11/01/03 @
104.75
-- 500 500 9.500%, 11/01/08 -- 375 375
Beazer Homes USA, Callable 04/15/07
@ 104.19
500 500 1,000 8.375%, 04/15/12 502 502 1,004
Buckeye Technologies, Callable
10/01/02 @ 103.080
1,000 -- 1,000 9.250%, 09/15/08 830 -- 830
Collins & Aikman Products, Callable
10/01/02 @ 103.833
425 -- 425 11.500%, 04/15/06 408 -- 408
Diamond Brands Operating, Callable
04/15/03 @ 105.063
50 -- 50 10.125%, 04/15/08 (D) (E) 1 -- 1
Glenoit, Callable 10/01/02 @ 105.500
100 -- 100 11.000%, 04/15/07 (D) (E) -- -- --
Georgia-Pacific
500 500 1,000 8.875%, 05/15/31 365 365 730
Greif Brothers, Callable 08/01/07 @
104.44
300 400 700 8.875%, 08/01/12 (B) 304 406 710
Lear, Series B
1,000 500 1,500 8.110%, 05/15/09 1,040 520 1,560
Lyondell Chemical, Callable 05/01/04
@ 105.44
1,000 500 1,500 10.875%, 05/01/09 830 415 1,245
Oregon Steel Mills, Callable
07/15/06 @ 105.00
-- 250 250 10.000%, 07/15/09 -- 249 249
Owens-Brockway Glass Container,
Callable 02/15/06 @ 104.44
500 500 1,000 8.875%, 02/15/09 502 502 1,004
Schuler Homes, Callable 07/15/05 @
104.69
500 500 1,000 9.375%, 07/15/09 500 500 1,000
50
FIRST AMERICAN STRATEGIC INCOME FUND
PRO FORMA SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2002
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(Percentages of each investment category relate to pro forma combined total net
assets
PRO FORMA PRO FORMA
COMBINED COMBINED
FIRST FIRST FIRST FIRST FIRST FIRST
AMERICAN AMERICAN AMERICAN AMERICAN AMERICAN AMERICAN
STRATEGIC HIGH YIELD HIGH INCOME STRATEGIC HIGH YIELD HIGH INCOME
INCOME BOND FUND BOND FUND INCOME BOND FUND BOND FUND
FUND PAR PAR PAR FUND PAR MARKET VALUE MARKET VALUE
- --------- ---------- ----------- ------------ ------------ ------------
Sequa
1,000 500 1,500 9.000%, 08/01/09 890 445 1,335
Solectron, Callable 02/15/06 @ 104.81
-- 500 500 9.625%, 02/15/09 -- 412 412
Technical Olympic USA, Callable
07/01/06 @ 104.50
500 500 1,000 9.000%, 07/01/10 (B) 470 470 940
WCI Communities, Callable 05/01/07 @
104.56
500 500 1,000 9.125%, 05/01/12 463 463 926
------------ ------------ ------------
8,472 7,350 15,822
------------ ------------ ------------
Real Estate - 0.6%
Meristar Hospitality
500 500 1,000 9.125%, 01/15/11 443 443 886
Ventas Realty
-- 500 500 9.000%, 05/01/12 -- 513 513
------------ ------------ ------------
443 956 1,399
------------ ------------ ------------
Services - 19.8%
Acme Television, Series B, Callable
10/01/02 @ 102.719
500 -- 500 10.875%, 09/30/04 (C) 493 -- 493
Allied Waste North America, Series
B, Callable 08/01/04 @ 105.00
1,000 1,000 2,000 10.000%, 08/01/09 920 920 1,840
Asbury Automotive Group, Callable
06/15/07 @ 104.50
500 500 1,000 9.000%, 06/15/12 450 450 900
Autonation
1,000 500 1,500 9.000%, 08/01/08 1,020 510 1,530
Bally Total Fitness Holdings, Series
D, Callable 10/01/02 @ 104.94
-- 500 500 9.875%, 10/15/07 -- 460 460
Boca Resorts, Callable 04/15/04 @
104.94
500 500 1,000 9.875%, 04/15/09 518 518 1,036
Buffets, Callable 07/15/06 @ 105.62
-- 500 500 11.250%, 07/15/10 (A) -- 505 505
Charter Communications Holdings,
Callable 01/15/05 @ 105.88
2,000 1,500 3,500 11.750%, 01/15/10 (C) 820 615 1,435
Corus Entertainment, Callable
03/01/07 @ 104.38
-- 500 500 8.750%, 03/01/12 (B) -- 508 508
Coventry Health Care, Callable
02/15/07 @ 104.06
-- 750 750 8.125%, 02/15/12 -- 776 776
Crown Castle, Callable 08/01/05 @
105.37
-- 1,000 1,000 10.750%, 08/01/11 -- 695 695
CSC Holdings, Callable 02/15/03 @
104.800
750 -- 750 9.875%, 02/15/13 585 -- 585
CSC Holdings, Series B
500 500 1,000 7.625%, 04/01/11 405 405 810
Dominos, Series B, Callable 01/15/04
@ 105.19
600 500 1,100 10.375%, 01/15/09 645 538 1,183
Echostar DBS, Callable 01/15/06 @
104.56
500 500 1,000 9.125%, 01/15/09 (A) (B) 475 475 950
Extendicare Health Services,
Callable 07/01/06 @ 104.75
-- 500 500 9.500%, 07/01/10(A) -- 508 508
Fisher Scientific International,
Callable 02/01/03 @ 104.50
1,000 1,000 2,000 9.000%, 02/01/08 1,031 1,031 2,061
Hanger Orthopedic, Callable 02/15/06
@ 105.19
-- 350 350 10.375%, 02/15/09 -- 369 369
HCA Columbia Healthcare
-- 500 500 8.750%, 09/01/10 -- 570 570
Healthsouth, Callable 10/01/04 @
105.38
500 500 1,000 10.750%, 10/01/08 345 345 690
HMH Properties, Series B, Callable
08/01/03 @ 103.99
525 500 1,025 7.875%, 08/01/08 509 485 994
Hollinger International Publishing,
Callable 10/01/02 @ 103.090
700 -- 700 9.250%, 02/01/06 707 -- 707
IASIS Healthcare, Callable 10/15/04
@ 106.50
500 500 1,000 13.000%, 10/15/09 510 510 1,020
Isle of Capri Casinos, Callable
04/15/04 @ 104.38
-- 500 500 8.750%, 04/15/09 -- 505 505
Isle of Capri Casinos, Callable
04/15/04 @ 104.375
1,000 -- 1,000 8.750%, 04/15/09 1,010 -- 1,010
J.C. Penney
500 500 1,000 7.950%, 04/01/07 420 420 840
Johnsondiversey, Callable 05/15/07 @
104.81
-- 500 500 9.625%, 05/15/12 (A) -- 500 500
Lamar Media, Callable 10/01/02 @
104.313
500 -- 500 8.625%, 09/15/07 520 -- 520
Mandalay Resort Group, Series B
1,000 500 1,500 10.250%, 08/01/07 1,080 540 1,620
MGM Mirage
-- 500 500 8.375%, 02/01/11 -- 516 516
Mohegan Tribal Gaming
1,000 500 1,500 8.875%, 09/15/08 -- 520 520
Paxson Communications, Callable
01/15/06 @ 106.12
-- 750 750 12.250%, 01/15/09 -- 330 330
Pegasus Communications, Series B,
Callable 12/01/02 @ 104.875
300 -- 300 9.750%, 12/01/06 138 -- 138
Penn National Gaming, Callable
03/15/06 @ 104.44
500 500 1,000 8.875%, 03/15/10 500 500 1,000
Premier Parks, Callable 04/01/03 @
105.000
1,000 -- 1,000 10.000%, 04/01/08 (C) 820 -- 820
Resort International Hotel & Casino,
Callable 03/15/07 @ 106.00
750 750 1,500 11.500%, 03/15/09 649 649 1,298
Rite Aid
-- 1,000 1,000 7.125%, 01/15/07 -- 675 675
Rotech Healthcare, Callable 04/01/07
@ 104.75
-- 750 750 9.500%, 04/01/12 (A) -- 679 679
Royal Caribbean Cruises
500 500 1,000 8.250%, 04/01/05 (B) 463 450 923
Russell, Callable 05/01/06 @ 104.62
-- 500 500 9.250%, 05/01/10 (A) -- 520 520
Sbarro, Callable 09/15/04 @ 105.50
500 500 1,000 11.000%, 09/15/09 460 460 920
Service Corporate International
1,000 1,000 2,000 7.700%, 04/15/09 (A) (B) 835 835 1,670
Sinclair Broadcast Group, Callable
12/15/02 @ 104.38
500 500 1,000 8.750%, 12/15/07 512 512 1,024
51
FIRST AMERICAN STRATEGIC INCOME FUND
PRO FORMA SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2002
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(Percentages of each investment category relate to pro forma combined total net
assets
PRO FORMA PRO FORMA
COMBINED COMBINED
FIRST FIRST FIRST FIRST FIRST FIRST
AMERICAN AMERICAN AMERICAN AMERICAN AMERICAN AMERICAN
STRATEGIC HIGH YIELD HIGH INCOME STRATEGIC HIGH YIELD HIGH INCOME
INCOME BOND FUND BOND FUND INCOME BOND FUND BOND FUND
FUND PAR PAR PAR FUND PAR MARKET VALUE MARKET VALUE
- --------- ---------- ----------- ------------ ------------ ------------
Six Flags, Callable 02/01/06 @ 104.44
-- 500 500 8.875%, 02/01/10 -- 409 409
Starwood Hotels & Resorts
-- 500 500 6.750%, 11/15/05 -- 481 481
Triad Hospital Holdings, Series B,
Callable 05/15/04 @ 105.500
500 -- 500 11.000%, 05/15/09 548 -- 548
Tricon Global Restaurant
1,000 1,000 2,000 8.875%, 04/15/11 1,020 1,070 2,090
United Rentals, Series B, Callable
04/15/05 @ 105.37
1,000 500 1,500 10.750%, 04/15/08 855 495 1,350
------------ ------------ ------------
20,293 22,783 43,076
------------ ------------ ------------
Transportation -1.4%
CHC Helicopter, Callable 07/15/04 @
105.875
1,300 -- 1,300 11.750%, 07/15/07, EU 1,420 -- 1,420
Continental Airlines, Series 2001-1,
Class C
-- 985 985 7.033%, 06/15/11 -- 751 751
CP Ships, Callable 07/15/07 @ 105.19
-- 500 500 10.375%, 07/15/12 (A) (B) -- 518 518
Northwest Airlines
-- 500 500 9.875%, 03/15/07 -- 250 250
------------ ------------ ------------
1,420 1,519 2,939
------------ ------------ ------------
Utilities - 4.7%
AES
500 500 1,000 9.375%, 09/15/10 260 260 520
Calpine
500 -- 500 7.625%, 04/15/06 240 -- 240
-- 500 500 8.500%, 02/15/11 -- 203 203
CMS Energy
500 -- 500 7.500%, 01/15/09 370 -- 370
-- 500 500 8.500%, 04/15/11 -- 375 375
Crown Castle International, Callable
05/15/04 @ 105.187
625 -- 625 10.375%, 05/15/11 (C) 281 -- 281
Crown Castle International, Callable
08/01/04 @ 105.625
700 -- 700 11.250%, 08/01/11 (C) 308 -- 308
Grupo Iusacell
1,500 -- 1,500 14.250%, 12/01/06 (A) (B) 510 -- 510
Jazztel, Callable 04/01/04 @ 107.000
2,000 -- 2,000 14.000%, 04/01/09 (A) (E) EU 198 -- 198
Mirant Americas Generation
500 500 1,000 8.300%, 05/01/11 250 250 500
Mission Energy Holdings
-- 500 500 13.500%, 07/15/08 -- 160 160
Mobile Telesystems
1,000 -- 1,000 10.950%, 12/21/04 (A) EU 1,020 -- 1,020
Nextel Communications, Callable
11/15/04 @ 104.69
500 500 1,000 9.375%, 11/15/09 390 390 780
Nextel International, Callable
04/15/03 @ 106.063
75 -- 75 12.125%, 04/15/08 (C) (E) 3 -- 3
Panamsat, Callable 02/01/07 @ 104.25
500 -- 500 8.500%, 02/01/12 (A) (B) 413 413 826
PG&E National Energy Group
1,000 1,000 2,000 10.375%, 05/16/11 135 -- 135
Qwest Capital Funding
1,000 1,000 2,000 7.750%, 08/15/06 540 540 1,080
Satelites Mexicanos, Series B,
Callable 10/01/02 @ 105.063
2,500 -- 2,500 10.125%, 11/01/04 (A) 975 -- 975
Triton PCS, Callable 11/15/06 @
104.38
-- 500 500 8.750%, 11/15/11 -- 330 330
Viatel, Callable 04/15/03 @ 105.625
75 -- 75 11.250%, 04/15/08 -- -- --
Voicestream Wireless, Callable
11/15/04 @ 105.938
650 -- 650 10.875%, 11/15/09 (C) 507 -- 507
Western Resources
500 500 1,000 9.750%, 05/01/07 460 460 920
------------ ------------ ------------
6,860 3,381 10,241
------------ ------------ ------------
Yankee - 5.7%
500 1,000 Biovail, Callable 04/01/06 @ 103.94
7.875%, 04/01/10 (A) (B) 502 502 1,004
Cellco Finance, Callable 10/01/02 @
900 500 900 107.500
15.000%, 08/01/05 (A) 860 -- 860
Central European Media, Callable
1,200 -- 1,200 10/01/02 @ 102.344
9.375%, 08/15/04 (A) 900 -- 900
Grupo Elektra, Callable 04/01/04 @
2,500 -- 2,500 106.000
12.000%, 04/01/08 2,263 -- 2,263
2,100 -- 2,100 Innova, Callable 10/01/02 @ 106.438
12.875%, 04/01/07 (A) 1,659 -- 1,659
Netia Holdings, Series B, Callable
2,600 -- 2,600 10/01/02 @ 105.625
11.250%, 11/01/07 (A) (E) 416 -- 416
Partner Communications, Series DTC,
2,100 -- 2,100 Callable 08/15/05 @ 106.500
150 -- 150 13.000%, 08/15/10 (A) 2,142 -- 2,142
Stena, Callable 10/01/02 @ 102.625
525 -- 525 10.500%, 12/15/05 (A) 155 -- 155
Stena, Callable 10/01/02 @ 104.375
1,000 -- 1,000 8.750%, 06/15/07 (A) 501 -- 501
TFM, Callable 10/01/02 @ 105.875
1,000 -- 1,000 11.750%, 06/15/09 (A) (C) 955 -- 955
TV Azteca, Series B, Callable
10/01/02 @ 105.250
1,300 -- 1,300 10.500%, 02/15/07 (A) 1,209 -- 1,209
Tyco International
500 -- 500 6.750%, 02/15/11 (A) 420 -- 420
------------ ------------ ------------
11,982 502 12,484
------------ ------------ ------------
------------ ------------ ------------
Total High Yield Corporate Bonds 65,880 46,049 111,929
------------ ------------ ------------
Corporate Bonds - 0.9%
Manufacturing - 0.3%
Nortel Networks
500 500 1,000 6.125%, 02/15/06 -- 175 175
Phelps Dodge
500 500 1,000 8.750%, 06/01/11 -- 509 509
------------ ------------ ------------
52
FIRST AMERICAN STRATEGIC INCOME FUND
PRO FORMA SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2002
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(Percentages of each investment category relate to pro forma combined total net
assets
PRO FORMA PRO FORMA
COMBINED COMBINED
FIRST FIRST FIRST FIRST FIRST FIRST
AMERICAN AMERICAN AMERICAN AMERICAN AMERICAN AMERICAN
STRATEGIC HIGH YIELD HIGH INCOME STRATEGIC HIGH YIELD HIGH INCOME
INCOME BOND FUND BOND FUND INCOME BOND FUND BOND FUND
FUND PAR PAR PAR FUND PAR MARKET VALUE MARKET VALUE
- --------- ---------- ----------- ------------ ------------ ------------
-- 684 684
------------ ------------ ------------
Utilities - 0.4%
AT&T Wireless Services
500 500 1,000 7.875%, 03/01/11 -- 382 382
XCEL Energy
500 500 1,000 7.000%, 12/01/10 -- 398 398
------------ ------------ ------------
-- 780 780
------------ ------------ ------------
Yankee - 0.2%
Tyco International
------------ ------------ ------------
500 500 1,000 6.750%, 02/15/11 420 420
------------ ------------ ------------
Total Corporate Bonds -- 1,844 1,884
------------ ------------ ------------
Foreign Government Bonds - 12.1%
Brazil - 2.4%
Republic of Brazil (A)
3,850 -- 3,850 12.250%, 03/06/30 1,761 -- 1,761
3,950 -- 3,950 12.000%, 04/15/10 1,955 -- 1,955
Republic of Brazil, Callable
08/17/15 @ 100
3,625 -- 3,625 11.000%, 08/17/40 1,595 -- 1,595
------------ ------------ ------------
5,311 -- 5,311
------------ ------------ ------------
Bulgaria - 0.4%
Republic of Bulgaria
850 -- 850 8.250%, 01/15/15 867 -- 867
------------ ------------ ------------
Colombia - 0.7%
Republic of Colombia
1,850 -- 1,850 11.750%, 02/25/20 1,517 -- 1,517
------------ ------------ ------------
Ecuador - 0.5%
Republic of Ecuador, Callable
05/15/03 @ 100
1,850 -- 1,850 12.000%, 11/15/12 980 -- 980
------------ ------------ ------------
El Salvador - 0.5%
Republic of El Salvador
1,000 -- 1,000 8.250%, 04/10/32 940 -- 940
------------ ------------ ------------
Panama - 0.2%
Republic of Panama
500 -- 500 8.875%, 09/30/27 462 -- 462
------------ ------------ ------------
Philippines - 0.9%
Republic of Philippines
2,000 -- 2,000 8.375%, 03/12/09 2,023 -- 2,023
------------ ------------ ------------
Russian Federation - 4.5%
Russian Federation
4,000 -- 4,000 5.000%, 03/31/30 2,814 -- 2,814
3,200 -- 3,200 8.250%, 03/31/10 3,192 -- 3,192
3,050 -- 3,050 12.750%, 06/24/28 3,703 -- 3,703
------------ ------------ ------------
9,709 -- 9,709
------------ ------------ ------------
South Africa - 0.6%
Republic of South Africa
600 -- 600 7.375%, 04/25/12 627 -- 627
650 -- 650 8.500%, 06/23/17 696 -- 696
------------ ------------ ------------
1,323 -- 1,323
------------ ------------ ------------
Turkey - 0.5%
Republic of Turkey
1,200 -- 1,200 11.875%, 01/15/30 1,008 -- 1,008
------------ ------------ ------------
Ukraine - 0.2%
Government of Ukraine
490 -- 490 11.000%, 03/15/07 509 -- 509
------------ ------------ ------------
Venezuela - 0.7%
Republic of Venezuela
2,400 -- 2,400 9.250%, 09/15/27 1,608 -- 1,608
------------ ------------ ------------
Total Foreign Government Bonds 26,257 -- 26,257
------------ ------------ ------------
U.S. Government Agency
Mortgage-Backed Securities - 8.1%
Fixed Rate - 8.1%
FHLMC Gold Pool
293 -- 293 7.500%, 08/01/11, #E65045 313 -- 313
723 -- 723 5.500%, 04/01/13, #E69977 751 -- 751
447 -- 447 7.500%, 11/01/28, #C18204 474 -- 474
FNMA Pool
331 -- 331 7.500%, 02/01/30, #535143 350 -- 350
985 -- 985 6.500%, 08/01/32, #649874 1,020 -- 1,020
232 -- 232 6.500%, 02/01/04, #367977 236 -- 236
1,944 -- 1,944 6.695%, 08/01/05, #109031 2,115 -- 2,115
1,500 -- 1,500 5.950%, 04/01/07, #381517 1,649 -- 1,649
255 -- 255 8.000%, 03/01/08, #326580 272 -- 272
1,159 -- 1,159 5.805%, 10/01/08, #380781 1,278 -- 1,278
952 -- 952 5.850%, 10/01/08, #380791 1,053 -- 1,053
956 -- 956 6.095%, 12/01/08, #380859 1,071 -- 1,071
258 -- 258 6.000%, 03/01/11, #329569 269 -- 269
597 -- 597 7.000%, 03/01/12, #313386 635 -- 635
1,234 -- 1,234 6.000%, 12/01/13, #535256 1,291 -- 1,291
905 -- 905 7.000%, 11/01/14, #535006 959 -- 959
470 -- 470 6.000%, 03/01/26, #339839 489 -- 489
1,036 -- 1,036 6.500%, 02/01/29, #252334 1,075 -- 1,075
998 -- 998 7.000%, 04/01/29, #323681 1,044 -- 1,044
1,153 -- 1,153 6.000%, 05/01/29, #323702 1,193 -- 1,193
GNMA Pool
28 -- 28 9.000%, 06/15/16, #160376 31 -- 31
------------ ------------ ------------
Total U.S. Government Agency 17,568 -- 17,568
Mortgage-Backed Securities
------------ ------------ ------------
53
FIRST AMERICAN STRATEGIC INCOME FUND
PRO FORMA SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2002
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(Percentages of each investment category relate to pro forma combined total net
assets
PRO FORMA PRO FORMA
COMBINED COMBINED
FIRST FIRST FIRST FIRST FIRST FIRST
AMERICAN AMERICAN AMERICAN AMERICAN AMERICAN AMERICAN
STRATEGIC HIGH YIELD HIGH INCOME STRATEGIC HIGH YIELD HIGH INCOME
INCOME BOND FUND BOND FUND INCOME BOND FUND BOND FUND
FUND PAR PAR PAR FUND PAR MARKET VALUE MARKET VALUE
- --------- ---------- ----------- ------------ ------------ ------------
U.S. Government & Agency Securities
- 6.0%
U. S. Agency Debentures - 1.8%
FHLMC
500 -- 500 2.875%, 09/26/05 502 -- 502
FNMA
1,000 -- 1,000 7.000%, 07/15/05 1,123 -- 1,123
2,000 -- 2,000 6.250%, 05/15/29 2,228 -- 2,228
------------ ------------ ------------
3,853 -- 3,853
------------ ------------ ------------
U.S. Treasuries - 4.2%
U.S. Treasury Bonds
500 -- 500 8.500%, 02/15/20 731 -- 731
U.S. Treasury Notes
2,750 -- 2,750 4.250%, 05/31/03 2,801 -- 2,801
225 -- 225 5.750%, 08/15/03 233 -- 233
1,250 -- 1,250 5.875%, 11/15/04 1,357 -- 1,357
500 -- 500 5.000%, 02/15/11 556 -- 556
550 -- 550 4.375%, 08/15/12 585 -- 585
1,500 -- 1,500 7.250%, 08/15/22 1,982 -- 1,982
U.S. Treasury Note
-- 1,000 1,000 3.375%, 04/30/04 -- 1,027 1,027
------------ ------------ ------------
Total U.S. Government & Agency 8,245 1,027 9,272
Securities
------------ ------------ ------------
------------ ------------ ------------
Total U.S. Government & Agency
Securities 12,098 1,027 13,125
------------ ------------ ------------
Asset-Backed Securities - 3.3%
Automobiles - 1.0%
Capital One Auto Finance Trust
Series 2001-A Class A4
1,000 -- 1,000 5.400%, 05/15/08 1,064 -- 1,064
GMAC Commercial Mortgage Securities
Series 1998-C2, Class A2
1,000 -- 1,000 6.420%, 05/15/35 1,123 -- 1,123
------------ ------------ ------------
2,187 -- 2,187
------------ ------------ ------------
Commercial - 0.5%
Morgan Stanley Capital Investments
Series 1999-RMI, Class A2
------------ ------------ ------------
1,000 -- 1,000 6.710%, 12/15/31 1,140 -- 1,140
------------ ------------ ------------
Credit Cards - 0.5%
MBNA Master Credit Card Trust Series
1999-G, Class A
------------ ------------ ------------
1,000 -- 1,000 6.350%, 12/15/06 1,072 -- 1,072
------------ ------------ ------------
Home Equity - 0.8%
Advanta Mortgage Loan Trust Series
1998-2 Class A12
330 -- 330 6.330%, 08/25/19 332 -- 332
Mellon Residential Funding Series
2001-HEIL, Class A3
1,000 -- 1,000 5.945%, 02/25/11 1,032 -- 1,032
Money Store Home Equity Trust Series
1994-A Class A4
418 -- 418 6.275%, 12/15/22 434 -- 434
------------ ------------ ------------
1,798 -- 1,798
------------ ------------ ------------
Manufactured Housing - 0.1%
Green Tree Financial Series 1998-1,
Class A1
277 -- 277 6.040%, 11/01/29 280 -- 280
------------ ------------ ------------
Other - 0.4%
Aircraft Finance Trust Series
1999-1A, Class C
901 -- 901 8.000%, 05/15/24 819 -- 819
------------ ------------ ------------
Total Asset-Backed Securities 7,296 -- 7,296
------------ ------------ ------------
Corporate Bonds - 3.0%
Finance - 1.7%
-- Capital One Bank
500 500 6.700%, 05/15/08 446 -- 446
-- Ford Motor Credit
500 500 5.800%, 01/12/09 441 -- 441
-- GATX Capital
750 750 8.250%, 09/01/03 747 -- 747
-- General Motors Acceptance
500 500 6.125%, 02/01/07 504 -- 504
-- Household Finance
500 500 7.875%, 03/01/07 526 -- 526
-- International Lease Finance
500 500 5.750%, 02/15/07 516 -- 516
-- MBNA America Bank
500 500 7.750%, 09/15/05 550 -- 550
------------ ------------ ------------
3,730 -- 3,730
------------ ------------ ------------
Manufacturing -0.6%
Boeing
500 -- 500 8.100%, 11/15/06 567 -- 567
Petronas Capital
650 -- 650 7.875%, 05/22/22 713 -- 713
------------ ------------ ------------
1,280 -- 1,280
------------ ------------ ------------
Service - 0.2%s
Comcast Cable Communications
500 -- 500 7.125%, 06/15/13 462 -- 462
------------ ------------ ------------
462 -- 462
------------ ------------ ------------
Transportation - 0.2%
Continental Airlines, Series 99-2
175 -- 175 7.056%, 03/15/11 163 -- 163
Northwest Airlines, Series 991A
173 -- 173 6.810%, 08/01/21 156 -- 156
------------ ------------ ------------
319 -- 319
------------ ------------ ------------
Utilities - 0.2%
XCEL Energy
500 -- 500 7.000%, 12/01/10 397 -- 397
------------ ------------ ------------
397 -- 397
------------ ------------ ------------
54
FIRST AMERICAN STRATEGIC INCOME FUND
PRO FORMA SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2002
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(Percentages of each investment category relate to pro forma combined total net
assets
PRO FORMA PRO FORMA
COMBINED COMBINED
FIRST FIRST FIRST FIRST FIRST FIRST
AMERICAN AMERICAN AMERICAN AMERICAN AMERICAN AMERICAN
STRATEGIC HIGH YIELD HIGH INCOME STRATEGIC HIGH YIELD HIGH INCOME
INCOME BOND FUND BOND FUND INCOME BOND FUND BOND FUND
FUND PAR PAR PAR FUND PAR MARKET VALUE MARKET VALUE
- --------- ---------- ----------- ------------ ------------ ------------
Yankee - 0.1%
Newcourt Credit Group, Series B
1,200 -- 250 6.875%, 02/16/05 256 -- 256
------------ ------------ ------------
256 -- 256
------------ ------------ ------------
Total Corporate Bonds 6,444 -- 6,444
------------ ------------ ------------
CMO - U.S. Government Agency
Mortgage-Backed Securities -- 2.1%
Adjustable Rate - 0.2%
FNMA Series 1993-22, Class FD
------------ ------------ ------------
528 -- 528 2.344%, 11/25/13 528 -- 528
------------ ------------ ------------
Fixed Rate -1.9%
FNMA Series 1993-50, Class PY
2,000 -- 2,000 5.500%, 10/25/22 2,098 -- 2,098
FNMA Series 1999-11, Class C
2,000 -- 2,000 5.500%, 10/25/12 2,094 -- 2,094
------------ ------------ ------------
4,192 -- 4,192
------------ ------------ ------------
------------ ------------ ------------
Total CMO - U.S. Government Agency
Mortgage-Backed Securities 4,720 -- 4,720
------------ ------------ ------------
CMO - Private Mortgage-Backed
Securities -- 1.9% Fixed Rate - 1.6%
Citicorp Mortgage Securities Series
2001-6, Class M
750 -- 750 6.500%, 05/25/29 823 -- 823
HSBC Mortgage Loan Trust Series
2000-HSB1, Class A3, Callable
07/15/04 @ 100
268 -- 268 7.110%, 12/16/30 268 -- 268
Washington Mutual Series 2001-AR6,
Class A5
1,000 -- 1,000 5.603%, 01/26/32 1,020 -- 1,020
Washington Mutual Series 2002-AR4,
Class A7
1,000 -- 1,000 5.593%, 04/25/32 1,033 -- 1,033
Wells Fargo Series 2000-1, Class
2A1, Callable 07/25/12 @ 100
224 -- 224 7.000%, 05/25/30 234 -- 234
------------ ------------ ------------
3,378 -- - 3,378
------------ ------------ ------------
Z-Bonds - 0.3%
GE Capital Mortgage Services Series
1994-6, Class A9
619 619 6 6.500%, 09/25/22***** 630 -- 630
------------ ------------ ------------
Total CMO - Private Mortgage-Backed
Securities 4,008 -- 4,008
------------ ------------ ------------
Preferred Stocks - 0.1%
United States - 0.1%
300 -- 300 Nebco Evans Holdings PIK -- -- --
80 80 Nextel Communications PIK, Series D 55 55
172 -- 172 Pegasus Communications PIK, Series A 32 -- 32
750 -- 750 Sinclair Capital 78 -- 78
------------ ------------ ------------
Total Preferred Stocks 165 -- 165
------------ ------------ ------------
Warrants - 00%
Canada - 0.0%
AT&T Canada, Expires 08/15/07
100 100 0.000% 11 -- 11
------------ ------------ ------------
Norway - 0.0%
Enitel Asa, Expires 04/03/05
1,000 -- 1,000 0.000%, 11/22/04 -- -- --
------------ ------------ ------------
United States - 0.0%
Electronic Retailing Systems
International, Expires 02/01
75 75 0.000%, 02/01/04 -- -- --
Sterling Chemical Holdings, Expires
08/15/08
100 100 0.000%, 01/01/00 -- -- --
UIH Australia Pacific, Expires
05/15/06 -- -- --
------------ ------------ ------------
150 150 0.000%, 05/15/06 -- -- --
------------ ------------ ------------
Total Warrants 11 -- 11
------------ ------------ ------------
Mutual Funds - 0.4%
Open End Funds - 0.4%
-- 67,818 67,818 Goldman Sachs High Yield Fund -- 447 447
-- 62,500 62,500 Northeast Investors Trust -- 440 440
------------ ------------ ------------
Total Mutual Funds -- 887 887
------------ ------------ ------------
Related Party Money Market Fund -
Shares Shares Shares 1.7%
- --------- ---------- ----------- ------------ ------------ ------------
1,395,408 2,396,554 3,791,962 First American Prime Obligations 1,396 2,397 3,793
Fund (J)
------------ ------------ ------------
------------ ------------ ------------
Total Related Party Money Market
Fund 1,396 2,397 3,793
------------ ------------ ------------
Total Investments - 91.2%
(Cost $57,691, $214,999, and
$157,308) $ 145,843 $ 52,244 $ 198,087
============ ============ ============
(A) Represents a foreign high yield (non-investment grade) bond.
(B) Security sold within the terms of a private placement memorandum, exempt
from registration under section 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or other
"qualified institutional buyers." These securities have been determined to
be liquid under the guidelines established by the Funds' board of
directors.
55
(C) Delayed interest (Step-Bonds) - Represents securities that remain zero
coupon securities until a predetermined date at which time the stated
coupon rate becomes effective and interest becomes payable at regular
intervals. Interest rate shown represents current yield at September 30,
2002, based upon the estimated timing and amount of future interest and
principal payments.
(D) Securities considered illiquid or restricted.
(E) Security currently in default.
(F) Non-income producing security.
(G) Z-Bonds - Represents securities that pay no interest or principal during
their accrual periods, but accrue additional principal at specified rates.
Interest rate shown represents current yield based upon the cost basis and
estimated future cash flows.
(H) Variable Rate Security - The rate shown is the rate in effect as of
September 30, 2002.
(I) In U.S. dollars unless otherwise indicated.
(J) The money market fund is advised by U.S. Bancorp Asset Management, Inc.,
which also serves as advisor for this Fund.
CMO - Collateralized Mortgage Obligation
EU - Euro
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
GNMA - Government National Mortgage Association
PIK - Payment-in-kind interest is generally paid by issuing additional par
of the security rather than paying cash.
56
FIRST AMERICAN INVESTMENT FUNDS, INC.
NOTES TO PRO FORMA FINANCIAL STATEMENTS (Unaudited)
1. Basis of Combination
The unaudited pro forma statements of assets and liabilities, statements of
operations, and schedules of investments reflect the accounts of 13
investment portfolios offered by First American Investment Funds, Inc. (the
"Funds") as if the proposed reorganizations occurred as of and for the year
ended September 30, 2002. These statements have been derived from books and
records utilized in calculating daily net asset values at September 30,
2002. Below are the Funds included in the proposed reorganizations.
- ---------------------------------------------------------------------------------------
ACQUIRING FUND NAME
ACQUIRED FUND ACQUIRING FUND (effective 1/31/03)
- ---------------------------------------------------------------------------------------
Large Cap Growth Fund Large Cap Core Fund* Large Cap Growth Opportunities Fund
Health Sciences Fund
- ---------------------------------------------------------------------------------------
Mid Cap Growth Fund Mid Cap Core Fund* Mid Cap Growth Opportunities Fund
- ---------------------------------------------------------------------------------------
Small Cap Growth Fund Small Cap Core Fund* Small Cap Select Fund
- ---------------------------------------------------------------------------------------
Emerging Markets Fund International Fund* International Fund
- ---------------------------------------------------------------------------------------
Bond IMMDEX Fund Fixed Income Fund* Core Bond Fund
- ---------------------------------------------------------------------------------------
High Yield Bond Fund* Strategic Income Fund High Income Bond Fund
- ---------------------------------------------------------------------------------------
* Accounting survivor
The Plan of Reorganization provides that at the time the reorganization
becomes effective (the "Effective Time of the Reorganization"),
substantially all of the assets and liabilities of the acquired funds will
be transferred such that at and after the Effective Time of Reorganization,
substantially all of the assets and liabilities of the acquired funds will
become assets and liabilities of the acquiring funds. In exchange for the
transfer of assets and liabilities, the acquiring funds will issue to the
acquired funds full and fractional shares of the designated classes of the
acquiring funds, and the acquired funds will make a liquidating
distribution of such shares to its shareholders. The number of shares of
the acquiring funds so issued will be in equal value to the full and
fractional shares of the acquired funds that are outstanding immediately
prior to the Effective Time of Reorganization. At and after the Effective
Time of Reorganization, all debts, liabilities and obligations of the
acquired funds will attach to the acquiring funds and may thereafter be
enforced against the acquiring funds to the same extent as if they had been
incurred by them. The pro forma statements give effect to the proposed
transfer described above.
57
The pro forma statements reflect the combined results of operations of the
acquired and acquiring funds. However, should such reorganization be
effected, the statements of operations of the acquiring funds will not be
restated for precombination period results of the corresponding acquired
funds. The pro forma statements of assets and liabilities, statements of
operations, and schedules of investments should be read in conjunction with
the historical financial statements of the First American Investment Funds,
Inc. incorporated by reference in the Statement of Additional Information.
2. Service Providers
U.S. Bancorp Asset Management, Inc. (the "Advisor"), a subsidiary of U.S.
Bank National Association ("U.S. Bank"), will serve as the combined Funds'
investment advisor. U.S. Bancorp Asset Management, Inc. and U.S. Bancorp
Fund Services, LLC (the "Co-administrators") will serve as the
co-administrators to the Funds. U.S. Bancorp Fund Services, LLC will serve
as the transfer agent and U.S. Bank will serve as the custodian to the
Funds.
3. Share Classes and Fees
The Funds have multiple classes of shares which have identical rights and
privileges except with respect to fees paid under shareholder servicing
and/or distribution plans, expenses allocable exclusively to each class of
shares, voting rights on matters affecting a single class of shares, and
the exchange privilege of each class of shares. Class A shares are subject
to a front-end sales charge. Class B shares are subject to a CDSC. Class C
shares are subject to a front-end sales charge and a CDSC. Class S shares
are offered only through banks and other financial institutions that have
entered into sales agreements with the funds' distributor. Class Y shares
are offered only to qualifying institutional investors and are not subject
to a front-end sales charge or CDSC. More information on the classes of
shares offered can be found in the Combined Proxy Statement/Prospectus.
Under the terms of the investment advisory agreement, the advisor is
entitled to receive the following fees computed at an annual rate on the
average daily net assets of each of the respective Funds:
FUND MANAGEMENT FEE
----------------------------------------------------------
Large Cap Growth Fund 0.65%
Large Cap Core Fund 0.65
Health Sciences Fund 0.70
Mid Cap Growth Fund 0.70
Mid Cap Core Fund 0.70
Small Cap Growth Fund 0.70
Small Cap Core Fund 0.70
Emerging Markets Fund 1.15
International Fund 1.10
Bond IMMDEX Fund 0.30
Fixed Income Fund 0.50
High Yield Bond Fund 0.70
Strategic Income Fund 0.70
58
Under the terms of the administration agreement, the co-administrators are
entitled to receive for each Fund an administration fee computed at an
annual rate of up to 0.25% of the average daily net assets, plus out of
pocket expenses.
4. Pro Forma Adjustments and Pro Forma Combined Columns
The pro forma adjustments and pro forma combined columns of the statements
of operations reflect the adjustments necessary to show expenses and
waivers at the rates which would have been in effect as if the
reorganizations occurred on October 1, 2001.
The pro forma statements of assets and liabilities and schedules of
investments give effect to the proposed combination as if the
reorganizations had occurred at September 30, 2002.
5. Portfolio Valuation, Securities Transactions and Related Income
Securities are valued at market value. Short-term investments maturing in
60 days or less are valued at amortized cost, which approximates market
value. Security transactions are accounted for on a trade date basis. Net
realized gains or losses from sales of securities are determined by
comparing the net sale proceeds to an identified cost basis. Interest
income and expenses are recognized on the accrual basis. Dividends are
recorded on the ex-dividend date or as soon as information is available to
the Funds. Discounts are accreted and premiums are amortized on fixed
income securities.
6. Capital Shares
The pro forma net asset values per share assume the issuance of shares of
the Surviving Funds, which would have occurred at September 30, 2002, in
connection with the proposed reorganization.
7. Merger Costs
All costs associated with the Reorganization will be paid by U.S. Bancorp
Asset Management, Inc.
59
PART C
OTHER INFORMATION
ITEM 15. INDEMNIFICATION
The first four paragraphs of Item 27 of Part C of Pre-Effective
Amendment No. 1 to the Registrant's Registration Statement on Form N-1A, dated
November 27, 1987, are incorporated herein by reference.
On February 18, 1988 the indemnification provisions of the Maryland
General Corporation Law (the "Law") were amended to permit, among other things,
corporations to indemnify directors and officers unless it is proved that the
individual (1) acted in bad faith or with active and deliberate dishonesty, (2)
actually received an improper personal benefit in money, property or services,
or (3) in the case of a criminal proceeding, had reasonable cause to believe
that his act or omission was unlawful. The Law was also amended to permit
corporations to indemnify directors and officers for amounts paid in settlement
of stockholders' derivative suits.
The Registrant undertakes that no indemnification or advance will be
made unless it is consistent with Sections 17(h) or 17(i) of the Investment
Company Act of 1940, as now enacted or hereafter amended, and Securities and
Exchange Commission rules, regulations, and releases (including, without
limitation, Investment Company Act of 1940 Release No. 11330, September 2,
1980).
Insofar as the indemnification for liability arising under the
Securities Act of 1933, as amended, (the "1933 Act") may be permitted to
directors, officers, and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the 1933 Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer, or controlling person of the Registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the 1933 Act, as amended, and will be governed by the
final adjudication of such issue.
The Registrant maintains officers' and directors' liability insurance
providing coverage, with certain exceptions, for acts and omissions in the
course of the covered persons' duties as officers and directors.
ITEM 16. EXHIBITS
(1)(a) Amended and Restated Articles of Incorporation, as amended
through April 2, 1998 (Incorporated by reference to Exhibit
(1) to Post-Effective Amendment No. 36, Filed on April 15,
1998 (File Nos. 33-16905, 811-05309)).
(1)(b) Articles Supplementary, designating new series and new share
classes (Incorporated by reference to Exhibit (a)(2) to
Post-Effective Amendment No. 54, Filed on June 27, 2001 (File
Nos. 33-16905, 811-05309)).
(1)(c) Articles Supplementary, designating new Series (Incorporated
by reference to Exhibit (a)(3) to Post-Effective Amendment
No. 61, Filed on April 30, 2002 (File Nos. 33-16905,
811-05309)).
(1)(d) Articles Supplementary designating new Series (Incorporated by
reference to Exhibit (a)(4) to Post-Effective Amendment
No. 64, Filed on October 24, 2002 (File Nos. 33-16905,
811-05309)).
**(2) Bylaws, as amended through December 4, 2002.
(3) Not applicable.
*(4) Form of Plan of Reorganization and Termination.
(5) Not applicable.
(6)(a) Investment Advisory Agreement dated April 2, 1991, between the
Registrant and First Bank National Association, as amended and
supplemented through August 1994, and assigned to U.S. Bancorp
Piper Jaffray Asset Management, Inc. on May 2, 2001
(Incorporated by reference to Exhibit (5)(a) to Post-Effective
Amendment No. 21, Filed on May 15, 1995 (File Nos. 33-16905,
811-05309)).
(6)(b) Exhibit A to Investment Advisory Agreement (series and
advisory fees) (Incorporated by reference to Exhibit (d)(2) to
Post-Effective Amendment No. 64, Filed on October 24, 2002
(File Nos. 33-16905, 811-05309)).
(6)(c) Supplement to Advisory Agreement Relating to International
Fund dated December 31, 1993 (Incorporated by reference to
Exhibit (d)(3) to Post-Effective Amendment No. 46, Filed on
December 28, 2000 (File Nos. 33-16905, 811-05309)).
(6)(d) Supplement to Advisory Agreement Relating to Emerging Markets
Fund dated July 23, 1998 (Incorporated by reference to Exhibit
(d)(4) to Post-Effective Amendment No. 46, Filed on December
28, 2000 (File Nos. 33-16905, 811-05309)).
(6)(e) Supplement to Advisory Agreement Relating to Strategic Income
Fund dated July 24, 1998 (Incorporated by reference to Exhibit
(d)(5) to Post-Effective Amendment No. 46, Filed on December
28, 2000 (File Nos. 33-16905, 811-05309)).
(6)(f) Sub-Advisory Agreement dated July 1, 2001, between U.S.
Bancorp Piper Jaffray Asset Management, Inc. and Clay Finlay
Inc. with respect to International Fund (Incorporated by
reference to Exhibit (d)(6) to Post-Effective Amendment No.
54, Filed on June 27, 2001 (File Nos. 33-16905, 811-05309)).
(6)(g) Sub-Advisory Agreement dated July 23, 1998, between U.S. Bank
National Association, as assigned to U.S. Bancorp Piper
Jaffray Asset Management, Inc. on May 2, 2001, and Marvin &
Palmer Associates, Inc., with respect to Emerging Markets Fund
(Incorporated by reference to Exhibit 5(f) to Post-Effective
Amendment No. 39, Filed on July 31, 1998 (File Nos. 33-16905,
811-05309)).
2
(6)(h) Sub-Advisory Agreement dated July 24, 1998, between U.S. Bank
National Association, as assigned to U.S. Bancorp Piper
Jaffray Asset Management, Inc. on May 2, 2001, and Federated
Global Investment Management Corp., with respect to Strategic
Income Fund (Incorporated by reference to Exhibit 5(g) to
Post-Effective Amendment No. 39, Filed on July 31, 1998 (File
Nos. 33-16905, 811-05309)).
(7)(a) Distribution Agreement [Class A and Class Y Shares,] between
the Registrant and Quasar Distributors, LLC (Incorporated by
reference to Exhibit e(1) to Post-Effective Amendment No. 58,
filed on September 21, 2001 (File Nos. 33-16905, 811-05309)).
(7)(b) Distribution and Service Agreement [Class B] between the
Registrant and Quasar Distributors, LLC (Incorporated by
reference to Exhibit e(2) to Post-Effective Amendment No. 58,
filed on September 21, 2001 (File Nos. 33-16905, 811-05309)).
(7)(c) Distribution and Service Agreement [Class C] between the
Registrant and Quasar Distributors, LLC (Incorporated by
reference to Exhibit e(3) to Post-Effective Amendment No. 58,
filed on September 21, 2001 (File Nos. 33-16905, 811-05309)).
(7)(d) Shareholder Service Plan and Agreement [Class S] between
Registrant and Quasar Distributors, LLC (Incorporated by
reference to Exhibit e(4) to Post-Effective Amendment No. 58,
filed on September 21, 2001 (File Nos. 33-16905, 811-05309)).
(7)(e) Dealer Agreement (Incorporated by reference to Exhibit e(5) to
Post-Effective Amendment No. 58, filed on September 21, 2001
(File Nos. 33-16905, 811-05309)).
(8) Deferred Compensation Plan for Directors Trust Agreement dated
January 1, 2000 (Incorporated by reference to Exhibit (f) to
Post-Effective Amendment No. 46, Filed on December 28, 2000
(File Nos. 33-16905, 811-05309)).
(9)(a) Custodian Agreement dated September 20, 1993, between the
Registrant and First Trust National Association, as
supplemented through August 1994 (Incorporated by reference to
Exhibit (8) to Post-Effective Amendment No. 18 (File Nos.
33-16905, 811-05309)).
(9)(b) Supplement dated March 15, 1994, to Custodian Agreement dated
September 20, 1993 (File Nos. 33-16905, 811-05309).
(9)(c) Further Supplement dated November 21, 1997, with respect to
International Index Fund, and July 23, 1998, with respect to
Strategic Income Fund and Emerging Markets Fund, to Custodian
Agreement dated September 20, 1993 (Incorporated by reference
to Exhibit 8(c) to Post-Effective Amendment No. 39, Filed on
July 31, 1998 (File Nos. 33-16905, 811-05309)).
3
(9)(d) Compensation Agreement pursuant to Custodian Agreement dated
September 20, 1993, as amended (Incorporated by reference to
Exhibit (g)(4) to Post-Effective Amendment No. 54, Filed on
June 27, 2001 (File Nos. 33-16905, 811-05309)).
(9)(e) Assignment of Custodian Agreements and Security Lending Agency
Agreement to U.S. Bank National Association, dated May 1, 1998
(Incorporated by reference to Exhibit (g)(5) to Post-Effective
Amendment No. 41, Filed on December 2, 1998 (File Nos.
33-16905, 811-05309)).
(9)(f) Further Supplement to Custodian Agreement dated December 8,
1999 (Incorporated by reference to Exhibit (g)(6) to
Post-Effective Amendment No. 44, Filed on January 28, 2000
(File Nos. 33-16905, 811-05309)).
(9)(g) Compensation Agreement dated as of February 21, 2002, pursuant
to Custodian Agreement dated September 20, 1993, as amended
(Incorporated by reference to Exhibit (g)(8) to Post-Effective
Amendment No. 64, Filed on October 24, 2002 (File Nos.
33-16905, 811-05309)).
(10)(a) Distribution Plan [Class A], Retail Class (Incorporated by
reference to Exhibit (m)(1) to Post-Effective Amendment
No. 46, Filed on December 28, 2000 (File Nos. 33-16905,
811-05309)).
(10)(b) Distribution Plan [Class B] Contingent Deferred Sales Change
Class. (Incorporated by reference to Exhibit 15(b) to
Post-Effective Amendment No. 21, Filed on May 15, 1995 (File
Nos. 33-16905, 811-05309)).
(10)(c) Service Plan [Class B] (Incorporated by reference to Exhibit
(15)(c) to Post-Effective Amendment No. 21, Filed on May 15,
1995 (File Nos. 33-16905, 811-05309)).
(10)(d) Distribution Plan [Class C] Level-Load Class (Incorporated by
reference to Exhibit (m)(4) to Post-Effective Amendment
No. 42, Filed on February 1, 1999 (File Nos. 33-16905,
811-05309)).
(10)(e) Service Plan [Class C] (Incorporated by reference to Exhibit
(m)(5) to Post-Effective Amendment No. 42, Filed on February
1, 1999 (File Nos. 33-16905, 811-05309)).
(10)(f) Multiple Class Plan Pursuant to Rule 18f-3, dated June 1, 2001
(Incorporated by reference to Exhibit (n)(1) to Post-Effective
Amendment No. 54, Filed on June 27, 2001 (File Nos. 33-16905,
811-05309)).
**(11) Opinion and consent of Kirkpatrick & Lockhart LLP
regarding the issuance of shares.
***(12) Opinion and consent of Kirkpatrick & Lockhart LLP regarding
tax matters.
4
(13) Not applicable.
**(14) Consent of Ernst & Young LLP.
(15) None.
**(16) Powers of Attorney.
**(17)(a) Form of Large Cap Growth Fund Proxy Card.
**(17)(b) Form of Health Sciences Fund Proxy Card.
**(17)(c) Form of Mid Cap Growth Fund Proxy Card.
**(17)(d) Form of Small Cap Growth Fund Proxy Card.
**(17)(e) Form of Emerging Markets Fund Proxy Card.
**(17)(f) Form of Bond IMMDEXTM Fund Proxy Card.
**(17)(g) Form of High Yield Bond Fund Proxy Card.
**(17)(h) Forms of Voting Instructions
- -----------------------------
* Filed herewith as Appendix A to the Prospectus/Proxy Statement included
in Part A to this Registration Statement.
** Filed herewith.
*** To be filed in a Post-Effective Amendment within a reasonable time
after closing of the Reorganizations.
ITEM 17. UNDERTAKINGS
(1) The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use of a prospectus which is
a part of this registration statement by any person or party who is deemed to be
an underwriter within the meaning of Rule 145(c) of the 1933 Act, the reoffering
prospectus will contain the information called for by the applicable
registration form for reofferings by persons who may be deemed underwriters, in
addition to the information called for by the other items of the applicable
form.
(2) The undersigned Registrant agrees that every prospectus that is
filed under paragraph (1) above will be filed as a part of an amendment to the
registration statement and will not be used until the amendment is effective,
and that, in determining any liability under the 1933 Act, each post-effective
amendment shall be deemed to be a new registration statement for the securities
offered therein, and the offering of the securities at that time shall be deemed
to be the initial BONA FIDE offering of them.
(3) The undersigned Registrant agrees to file an amendment to the
Registration Statement, pursuant to Rule 485(b) of Regulation C of the 1933 Act,
for the purpose of including Exhibit 12,
Opinion and consent of Kirkpatrick & Lockhart LLP regarding tax matters, within
a reasonable time after closing of the Reorganizations.
6
SIGNATURES
As required by the Securities Act of 1933, this registration statement
has been signed on behalf of the registrant in the City of Minneapolis and State
of Minnesota, on the 20th day of December, 2002.
FIRST AMERICAN INVESTMENT FUNDS, INC.
Registrant
By: /s/ James D. Alt
-------------------------------------
James D. Alt
Secretary
As required by the Securities Act of 1933, this registration statement
has been signed by the following persons in the capacities and on the dates
indicated.
Signature Title Date
--------- ----- ----
/s/ Jeffery M. Wilson Senior Vice President December 20, 2002
- ---------------------------
Jeffery M. Wilson
*Roger A. Gibson Director
- ---------------------------
(Roger A. Gibson)
*Andrew M. Hunter III Director
- ---------------------------
(Andrew M. Hunter III)
*Leonard W. Kedrowski Director
- ---------------------------
(Leonard W. Kedrowski)
*John M. Murphy, Jr. Director
- ---------------------------
(John M. Murphy, Jr.)
*Richard K. Riederer Director
- ---------------------------
(Richard K. Riederer)
*Joseph D. Strauss Director
- ---------------------------
(Joseph D. Strauss)
*Virginia L. Stringer Director
- ---------------------------
(Virginia L. Stringer)
*James M. Wade Director
- ---------------------------
(James M. Wade)
*By: /s/ James D. Alt Attorney-in-fact December 20, 2002
- ---------------------------
James D. Alt