-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UMoGN+DZSTP2WWCUQoTbohTZGp4r3DTFzCWmkdKPtS1C7nD/RX17RJepVjDWZwAA 6V7m8aZjrMjkRdkLkLmHQg== 0000950134-06-019210.txt : 20061017 0000950134-06-019210.hdr.sgml : 20061017 20061017173012 ACCESSION NUMBER: 0000950134-06-019210 CONFORMED SUBMISSION TYPE: PRE 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20061204 FILED AS OF DATE: 20061017 DATE AS OF CHANGE: 20061017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN SELECT PORTFOLIO INC CENTRAL INDEX KEY: 0000908785 IRS NUMBER: 411755339 STATE OF INCORPORATION: MN FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: PRE 14A SEC ACT: 1934 Act SEC FILE NUMBER: 811-07838 FILM NUMBER: 061149413 BUSINESS ADDRESS: STREET 1: 800 NICOLLET AVE STREET 2: US BANK CITY: MINNEAPOLIS STATE: MN ZIP: 55402-3804 BUSINESS PHONE: 6123033381 MAIL ADDRESS: STREET 1: 800 NICOLLET AVE STREET 2: US BANK CITY: MINNEAPOLIS STATE: MN ZIP: 55402 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN STRATEGIC INCOME PORTFOLIO INC III CENTRAL INDEX KEY: 0000896161 IRS NUMBER: 411739732 STATE OF INCORPORATION: MN FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: PRE 14A SEC ACT: 1934 Act SEC FILE NUMBER: 811-07444 FILM NUMBER: 061149414 BUSINESS ADDRESS: STREET 1: 800 NICOLLET AVE STREET 2: US BANK CITY: MINNEAPOLIS STATE: MN ZIP: 55402 BUSINESS PHONE: 6123033381 MAIL ADDRESS: STREET 1: 800 NICOLLET AVE STREET 2: US BANK CITY: MINNEAPOLIS STATE: MN ZIP: 55402 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN STRATEGIC INCOME INC III DATE OF NAME CHANGE: 19930426 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN STRATEGIC INCOME PORTFOLIO INC II CENTRAL INDEX KEY: 0000886984 IRS NUMBER: 411719822 STATE OF INCORPORATION: MN FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: PRE 14A SEC ACT: 1934 Act SEC FILE NUMBER: 811-06640 FILM NUMBER: 061149415 BUSINESS ADDRESS: STREET 1: 800 NICOLLET AVE STREET 2: USBANK CITY: MINNEAPOLIS STATE: MN ZIP: 55402 BUSINESS PHONE: 6123033381 MAIL ADDRESS: STREET 1: 800 NICOLLET AVE STREET 2: USBANK CITY: MINNEAPOLIS STATE: MN ZIP: 55402 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN STRATEGIC INCOME PORTFOLIO INC CENTRAL INDEX KEY: 0000878930 IRS NUMBER: 411705401 STATE OF INCORPORATION: MN FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: PRE 14A SEC ACT: 1934 Act SEC FILE NUMBER: 811-06404 FILM NUMBER: 061149416 BUSINESS ADDRESS: STREET 1: 800 NICOLLET AVE STREET 2: US BANK CITY: MINNEAPOLIS STATE: MN ZIP: 55402 BUSINESS PHONE: 6123033381 MAIL ADDRESS: STREET 1: 800 NICOLLET AVE CITY: MINNEAPOLIS STATE: MN ZIP: 55402 PRE 14A 1 c09167ppre14a.txt PRELIMINARY PROXY STATEMENT ================================================================================ SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. ) Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [X] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [ ] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Under Rule 14a-12 American Strategic Income Portfolio Inc. American Strategic Income Portfolio Inc.--II American Strategic Income Portfolio Inc.--III American Select Portfolio Inc. ------------------ ------------------------------- (Name of Registrant as Specified in its Charter) (Name of Person(s) Filing Proxy Statement if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [X] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: (2) Aggregate number of securities to which transaction applies: (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): (4) Proposed maximum aggregate value of transaction : (5) Total fee paid: [ ] Fee paid previously with preliminary materials. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: (2) Form, Schedule or Registration Statement No.: (3) Filing Party: (4) Date Filed: ================================================================================ AMERICAN STRATEGIC INCOME PORTFOLIO INC. AMERICAN STRATEGIC INCOME PORTFOLIO INC.--II AMERICAN STRATEGIC INCOME PORTFOLIO INC.--III AMERICAN SELECT PORTFOLIO INC. NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON DECEMBER 4, 2006 NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of American Strategic Income Portfolio Inc., American Strategic Income Portfolio Inc.--II, American Strategic Income Portfolio Inc.--III and American Select Portfolio Inc. (individually, a "Fund" and collectively, the "Funds") will be held at 2:30 p.m., Central Time, on Monday, December 4, 2006, at the Minneapolis Club, 729 Second Avenue South, Minneapolis, Minnesota 55402. The purposes of the meeting are as follow: 1. To elect a Board of Directors. 2. To ratify the selection of Ernst & Young LLP as the independent registered public accounting firm of each Fund for the current fiscal year. 3. To approve a change in each Fund's investment restriction governing investments in real estate investment trusts. 4. To transact any other business properly brought before the meeting. EACH FUND'S BOARD OF DIRECTORS RECOMMENDS APPROVAL OF EACH ITEM LISTED ON THIS NOTICE OF ANNUAL MEETING OF SHAREHOLDERS. Shareholders of record as of the close of business on October 10, 2006 are entitled to notice of, and to vote at, the meeting or any adjournment(s) thereof. You can vote easily and quickly by toll-free telephone call, by internet or by mail. Just follow the instructions that appear on your enclosed proxy card. Please help the Funds avoid the cost of a follow-up mailing by voting today. October 26, 2006 Kathleen L. Prudhomme Secretary PROXY STATEMENT AMERICAN STRATEGIC INCOME PORTFOLIO INC. AMERICAN STRATEGIC INCOME PORTFOLIO INC.--II AMERICAN STRATEGIC INCOME PORTFOLIO INC.--III AMERICAN SELECT PORTFOLIO INC. ANNUAL MEETING OF SHAREHOLDERS -- DECEMBER 4, 2006 The enclosed proxy is solicited by the Board of Directors of American Strategic Income Portfolio Inc., American Strategic Income Portfolio Inc.--II, American Strategic Income Portfolio Inc.--III and American Select Portfolio Inc. (sometimes referred to individually as a "Fund" and collectively as the "Funds") in connection with each Fund's annual meeting of shareholders to be held Monday, December 4, 2006, and any adjournments thereof. The investment adviser for the Funds is FAF Advisors, Inc. (the "Adviser"). FAF Advisors also acts as the administrator for the Funds. The address of the Funds and the Adviser is 800 Nicollet Mall, Minneapolis, Minnesota 55402. The costs of solicitation, including the cost of preparing and mailing the Notice of Annual Meeting of Shareholders and this Proxy Statement, will be allocated among and borne by the Funds. Mailing of the Notice of Annual Meeting of Shareholders and this Proxy Statement will take place on approximately October 26, 2006. Representatives of the Adviser may, without cost to the Funds, solicit proxies on behalf of management of the Funds by means of mail, telephone or personal calls. The Adviser may also arrange for an outside firm, The Altman Group, to solicit shareholder votes by telephone on behalf of the Funds. This procedure is expected to cost approximately $68,100, which will be paid by the Funds. In order for the shareholder meeting to go forward for a Fund, there must be a quorum. This means that at least a majority of that Fund's shares must be represented at the meeting -- either in person or by proxy. All returned proxies count toward a quorum, regardless of how they are voted. Abstentions and broker non-votes will have no effect on the proposal to elect directors. With respect to the proposal to ratify the Funds' independent accountants and the proposal to approve a change in each Fund's investment restriction governing investments in real estate investment trusts, an abstention will be counted as shares present at the meeting in determining whether the proposals have been approved, and will have the same effect as a vote against the proposals. If a proxy is returned with a broker non-vote on the proposal, the shareholder will not be counted as present and entitled to vote with respect to that proposal. (Broker non-votes are shares for which (a) the underlying owner has not voted and (b) the broker holding the shares does not have discretionary authority to vote on the particular matter.) If a quorum is not obtained or if sufficient votes to approve any proposal are not received for any Fund, the persons named as proxies may propose one or more adjournments of the meeting for that Fund to permit further solicitation of proxies. In determining whether to adjourn the meeting, the following factors may be considered: the nature of the proposal; 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 a vote in favor of the adjournment by the holders of a majority of the shares present in person or by proxy at the meeting (or any adjourned meeting). 1 You may revoke your proxy at any time up until voting results are announced at the shareholder meeting. You can do this by writing to the Funds' Secretary, or by voting in person at the meeting and notifying the election judge that you are revoking your proxy. In addition, you can revoke a prior proxy simply by voting again -- using your original proxy card or by internet or toll-free telephone call. If you return an executed proxy card without instructions, your shares will be voted "for" each proposal. So far as the Board of Directors is aware, no matters other than those described in this Proxy Statement will be acted upon at the meeting. Should any other matters properly come before the meeting calling for a vote of shareholders, it is the intention of the persons named as proxies to vote upon such matters according to their best judgment. Only shareholders of record of each Fund on October 10, 2006 may vote at the meeting or any adjournment thereof. As of that date, the Funds had the following numbers of issued and outstanding shares of common stock:
AMERICAN STRATEGIC AMERICAN STRATEGIC AMERICAN STRATEGIC AMERICAN SELECT INCOME PORTFOLIO INCOME PORTFOLIO II INCOME PORTFOLIO III PORTFOLIO ---------------- ------------------- -------------------- --------- 4,231,331 15,985,741 21,356,023 10,662,195
Each shareholder of a Fund is entitled to one vote for each share held. None of the matters to be presented at the meeting will entitle any shareholder to cumulative voting or appraisal rights. No person, to the knowledge of Fund management, was the beneficial owner of more than 5% of any class of voting shares of any Fund as of October 10, 2006, except as follows:
NAME AND ADDRESS OF NUMBER OF SHARES OF PERCENTAGE OWNERSHIP FUND BENEFICIAL OWNER COMMON STOCK OF COMMON STOCK - ---- ---------------- ------------ --------------- American Strategic Sit Investment Associates, 1,264,001 29.87% Income Portfolio Inc. and affiliated entities ("Sit Investment Associates") 4600 Wells Fargo Center Minneapolis, MN American Strategic Sit Investment Associates 4,580,678 28.65% Income Portfolio II American Strategic Sit Investment Associates 4,424,720 20.72% Income Portfolio III American Select Sit Investment Associates 2,576,981 24.17% Portfolio
Copies of each Fund's most recent annual report are available to shareholders upon request. If you would like to receive a copy, please contact the Funds at 800 Nicollet Mall, Minneapolis, Minnesota 55402, or call 800-677-FUND and one will be sent, without charge, by first-class mail within three business days of your request. 2 PROPOSAL ONE ELECTION OF DIRECTORS At the meeting, shareholders of each Fund will be asked to elect the nominees listed below as members of that Fund's Board of Directors, thereby setting the number of directors for each Fund at nine. It is intended that the enclosed proxy will be voted for the election of the persons named below as directors of each Fund unless such authority has been withheld in the proxy. Biographical information regarding each nominee is set forth below. Each nominee also serves as a director of the other closed-end and open-end investment companies managed by the Adviser (the "Fund Complex"). The Fund Complex currently consists of eight closed-end funds (each of which is a registered investment company) and 50 open-end funds (which are portfolios of four registered investment companies). The business address of each of the nominees is First American Funds, P.O. Box 1329, Minneapolis, Minnesota 55440-1329. Each nominee, other than John P. Kayser, has served as a director since the last annual meeting of shareholders. Mr. Kayser has served as a director since October 2006. NOMINEES FOR ELECTION AS NON-INTERESTED DIRECTORS
NUMBER OF PORTFOLIOS IN FUND POSITION COMPLEX OTHER HELD PRINCIPAL OVERSEEN DIRECTOR-SHIPS NAME AND WITH THE TERM OF OFFICE* AND OCCUPATION(S) DURING BY HELD BY YEAR OF BIRTH FUNDS LENGTH OF TIME SERVED LAST 5 YEARS DIRECTOR DIRECTOR** - ------------- ----- --------------------- ------------ -------- -------- Benjamin R. Director Mr. Field has served Retired; Senior 58 None Field III as a director of each Financial Advisor, (1938) of the Funds since Bemis Company, Inc. September 2003. Fund from May 2002 directors serve for a through June 2004; one-year term that Senior Vice expires at the next President, Chief annual meeting of Financial Officer & shareholders. Treasurer, Bemis, through April 2002. Roger A. Gibson Director Mr. Gibson has served Retired; Vice 58 None (1946) as a director of each President -- Cargo, of the Funds since United Airlines, August 1998. Fund from July 2001 directors serve for a through July 2004; one-year term that Vice President, expires at the next North America -- annual meeting of Mountain Region for shareholders. United Airlines, prior to July 2001. Victoria J. Director Ms. Herget has served Investment 58 None Herget as a director of each consultant and (1951) of the Funds since non-profit board September 2003. Fund member since 2001; directors serve for a Managing Director of one-year term that Zurich Scudder expires at the next Investments through annual meeting of 2001. shareholders.
3
NUMBER OF PORTFOLIOS IN FUND POSITION COMPLEX OTHER HELD PRINCIPAL OVERSEEN DIRECTOR-SHIPS NAME AND WITH THE TERM OF OFFICE* AND OCCUPATION(S) DURING BY HELD BY YEAR OF BIRTH FUNDS LENGTH OF TIME SERVED LAST 5 YEARS DIRECTOR DIRECTOR** - ------------- ----- --------------------- ------------ -------- -------- John P. Kayser Director Mr. Kayser has served Retired; Principal 58 None (1949) as a director of each (1983-2004) and of the Funds since Chief Financial October 2006. Fund Officer and Chief directors serve for a Administrative one-year term that Officer (1988-2002), expires at the next William Blair & annual meeting of Company, LLC. shareholders. Leonard W. Director Mr. Kedrowski has Owner and President, 58 None Kedrowski served as a director Executive and (1941) of each of the Funds Management since August 1998. Consulting, Inc., a Fund directors serve management for a one-year term consulting firm; that expires at the Board member, GC next annual meeting of McGuiggan shareholders. Corporation (dba Smyth Companies), a label printer; former Chief Executive Officer, Creative Promotions International, LLC, a promotional award programs and products company, through October 2003; Advisory Board member, Designer Doors, manufacturer of designer doors, through 2002. Richard K. Director Mr. Riederer has Retired; Director, 58 None Riederer served as a director President and Chief (1944) of each of the Funds Executive Officer, since August 2001. Weirton Steel Fund directors serve through 2001. for a one-year term that expires at the next annual meeting of shareholders.
4
NUMBER OF PORTFOLIOS IN FUND POSITION COMPLEX OTHER HELD PRINCIPAL OVERSEEN DIRECTOR-SHIPS NAME AND WITH THE TERM OF OFFICE* AND OCCUPATION(S) DURING BY HELD BY YEAR OF BIRTH FUNDS LENGTH OF TIME SERVED LAST 5 YEARS DIRECTOR DIRECTOR** - ------------- ----- --------------------- ------------ -------- -------- Joseph D. Director Mr. Strauss has served Attorney At Law, 58 None Strauss as a director of each Owner and President, (1940) of the Funds since Strauss Management August 1998. Fund Company, a Minnesota directors serve for a holding company for one-year term that various expires at the next organizational annual meeting of management business shareholders. ventures; Owner, Chairman and Chief Executive Officer, Community Resource Partnerships, Inc., a strategic planning, operations management, government relations, transportation planning and public relations organization; Owner, Chairman and Chief Executive Officer, Excensus(TM), LLC, a strategic demographic planning and application development firm, since 2001. Virginia L. Chair; Ms. Stringer has Owner and President, 58 None Stringer Director served as a director Strategic Management (1944) of each of the Funds Resources, Inc., a since August 1998. management Fund directors serve consulting firm; for a one-year term Executive Consultant that expires at the to State Farm next annual meeting of Insurance Company shareholders. through 2003. James M. Wade Director Mr. Wade has served as Owner and President, 58 None (1943) a director of each of Jim Wade Homes, a the Funds since August homebuilding 2001. Fund directors company, since 1999. serve for a one-year term that expires at the next annual meeting of shareholders.
- ------------------- * Each director serves for the term specified or, if earlier, until his or her death, resignation, removal or disqualification. ** 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. There were five meetings of the Board of Directors during the fiscal year ended August 31, 2006. During the fiscal year, each of the directors standing for re-election attended at least 75% of all meetings of the Board of Directors and of committees of which he or she was a regular 5 member that were held while he or she was serving on the Board of Directors or on such committee. STANDING COMMITTEES The Board of Directors of each Fund currently has three standing committees: an Audit Committee, a Pricing Committee and a Governance Committee. The purposes of the Audit Committee are (1) to oversee the Funds' accounting and financial reporting policies and practices, their internal controls and, as appropriate, the internal controls of certain service providers; (2) to oversee the quality of the Funds' financial statements and the independent audit thereof; (3) to assist Board oversight of the Funds' compliance with legal and regulatory requirements; and (4) to act as a liaison between the Funds' independent auditors and the full Board of Directors. The Audit Committee, together with the Board of Directors, has the ultimate authority and responsibility to select, evaluate and, where appropriate, replace the outside auditor (or to nominate the outside auditor to be proposed for shareholder approval in any proxy statement). The Audit Committee has adopted a written charter setting forth, among other things, requirements with respect to the composition of the Committee, the purposes of the Committee, and the Committee's duties and powers. A copy of this charter was included as an appendix to the proxy statement for last year's annual shareholders meeting. The Audit Committee currently consists of Mr. Kedrowski (chair), Mr. Field, Mr. Riederer and Ms. Stringer (ex officio). The Board has determined that each member of the Audit Committee is "independent" within the meaning of New York Stock Exchange and American Stock Exchange listing standards and is not an "interested person" as defined in the Investment Company Act of 1940. The Board of Directors of each Fund has designated Mr. Kedrowski, Mr. Field and Mr. Riederer as Audit Committee financial experts. The Audit Committee met eight times during the fiscal year ended August 31, 2006. The Pricing Committee of each Fund's Board of Directors is responsible for overseeing the valuation of portfolio securities for which market quotations are not readily available, pursuant to procedures established by the Board of Directors. Current members of the Pricing Committee are Mr. Gibson (Chair), Mr. Wade, Mr. Field and Ms. Stringer (ex-officio). The Pricing Committee met six times during the fiscal year ended August 31, 2006. The Governance Committee of the Board of Directors is responsible for nominating directors and making recommendations to the Board concerning Board composition, committee structure and governance, director education, and governance practices. The members of the Governance Committee are Mr. Strauss (Chair), Mr. Wade, Ms. Herget, and Ms. Stringer (ex officio). The Board has determined that each member of the Governance Committee is "independent" within the meaning of New York Stock Exchange and American Stock Exchange listing standards and is not an "interested person" as defined in the Investment Company Act of 1940. The Governance Committee met four times during the fiscal year ended August 31, 2006. The Governance Committee Charter is attached as Appendix A to this proxy statement. In addition to the above committees, the Board of Directors also appoints a Fund Review Liaison. The responsibility of the Fund Review Liaison is to lead the Board of Directors, together 6 with the Board Chair, in evaluating Fund performance, Fund service provider contracts and arrangements for execution of Fund trades. Ms. Herget is the current Fund Review Liaison. SELECTION OF DIRECTOR NOMINEES The Governance Committee will consider shareholder recommendations for director nominees in connection with each annual shareholders meeting of the Funds and any special shareholders meeting which is called for the purpose of electing directors. There are no differences in the manner in which the Governance Committee evaluates nominees for director based on whether the nominee is recommended by a shareholder. A shareholder who wishes to recommend a director nominee should submit his or her recommendation in writing to the Chair of the Board (Ms. Stringer) or the Chair of the Governance Committee (Mr. Strauss), in either case at First American Funds, P.O. Box 1329, Minneapolis, Minnesota 55440-1329. At a minimum, the recommendation should include: - the name, address, and business, educational, and/or other pertinent background of the person being recommended; - a statement concerning whether the person is "independent" within the meaning of New York Stock Exchange and American Stock Exchange listing standards and is not an "interested person" as defined in the Investment Company Act of 1940; - any other information that the Funds would be required to include in a proxy statement concerning the person if he or she was nominated; and - the name and address of the person submitting the recommendation, together with the number of Fund shares held by such person and the period for which the shares have been held. The recommendation also can include any additional information which the person submitting it believes would assist the Governance Committee in evaluating the recommendation. In order for the Governance Committee to consider a shareholder's recommended nominee for election at the annual shareholders meeting in a given year, the recommendation should be submitted to the Governance Committee no later than August 31 in that year. The Board of Directors currently is composed entirely of persons who are not "interested persons" as defined in the Investment Company Act of 1940. The Board currently intends to remain composed only of such persons. Shareholders should note that a person who owns securities issued by U.S. Bancorp (the parent company of the Funds' investment advisor) would be deemed an "interested person" under the Investment Company Act of 1940. In addition, certain other relationships with U.S. Bancorp or its subsidiaries, with registered broker-dealers, or with the Funds' outside legal counsel may cause a person to be deemed an "interested person." The Governance Committee has not established specific, minimum qualifications that it believes must be met by a director nominee. In evaluating director nominees, the Governance Committee considers, among other things, an individual's background, skills, and experience; 7 whether the individual is "independent" within the meaning of applicable stock exchange listing standards and is not an "interested person" as defined in the Investment Company Act of 1940; and whether the individual is "financially literate" or would be deemed an "audit committee financial expert" within the meaning of such listing standards and applicable Securities and Exchange Commission ("SEC") rules. The Governance Committee also considers whether the individual's background, skills, and experience will complement the background, skills, and experience of other nominees and will contribute to the diversity of the Board. In addition to considering shareholder recommendations, the Governance Committee may consider recommendations by business and personal contacts of current Board members, by Fund management, and by executive search firms which the committee may engage from time to time. Before the Governance Committee decides to nominate an individual as a director, committee members and other directors customarily interview the individual in person. In addition, the individual customarily is asked to complete a detailed questionnaire which is designed to elicit information which must be disclosed under SEC and stock exchange rules and to determine whether the individual is subject to any statutory disqualification from serving as a director of a registered investment company. SHAREHOLDER COMMUNICATIONS WITH DIRECTORS Shareholders of the Funds can communicate directly with the Board of Directors by writing to the Chair of the Board, First American Funds, P.O. Box 1329, Minneapolis, Minnesota 55440-1329. Shareholders can communicate directly with an individual director by writing to that director at P.O. Box 1329, Minneapolis, Minnesota 55440-1329. Such communications to the Board or individual directors are not screened before being delivered to the addressee. DIRECTOR ATTENDANCE AT SHAREHOLDERS MEETINGS The Board of Directors encourages directors to attend annual shareholders meetings of the Funds in person or by telephone. All of the directors standing for re-election who were directors at the time attended the Funds' 2005 annual shareholders meeting in person. DIRECTOR COMPENSATION The Fund complex currently pays directors who are not paid employees or affiliates of the Funds an annual retainer of $40,000 ($80,000 in the case of the Chair). The Fund Review Liaison receives an additional annual retainer of $15,000. In addition, directors are paid the following fees for attending Board and committee meetings: - $5,000 per day for in-person attendance at Board of Directors meetings ($10,000 per day in the case of the Chair); - $2,500 per day for telephonic attendance at Board of Directors meetings ($5,000 in the case of the Chair); - $2,500 for in-person attendance at any committee meeting ($3,750 in the case of the committee chair, $4,250 for the Audit Committee Chair); 8 - $1,250 for telephonic attendance at any committee meeting ($1,875 in the case of the committee chair, $2,125 for the Audit Committee Chair); and - $2,500 for in-person attendance at any opening executive session ($5,000 in the case of the Chair). Directors also receive $2,500 per day when traveling, on behalf of a Fund, out of town on Fund business which does not involve a Board or committee meeting. In addition, directors are reimbursed for their out-of-pocket expenses in traveling from their primary or secondary residence to Board and committee meetings, on Fund business and to attend mutual fund industry conferences or seminars. The amounts specified in this paragraph are allocated among the funds in the Fund Complex in a manner that apportions a part of the expenses evenly across all funds and a part proportionally relative to the average net assets of each fund. 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 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 of 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. The Funds do not provide any other pension or retirement benefits to directors. 9 The following table sets forth the compensation received by each director standing for re-election from each Fund for its most recent fiscal year, as well as the total compensation received by each such director from the Fund Complex for the fiscal year ended August 31, 2006. Mr. Kayser did not serve as a Fund director during such fiscal year, and therefore is not listed.
AGGREGATE AGGREGATE AGGREGATE AGGREGATE TOTAL COMPENSATION COMPENSATION COMPENSATION COMPENSATION COMPENSATION FROM AMERICAN FROM AMERICAN FROM AMERICAN FROM AMERICAN FROM FUND STRATEGIC STRATEGIC STRATEGIC SELECT COMPLEX PAID INCOME INCOME INCOME PORTFOLIO TO DIRECTORS NAME OF DIRECTOR PORTFOLIO (1) PORTFOLIO II (2) PORTFOLIO III (3) (4) (5)(6) - ---------------- ------------- ---------------- ----------------- ---------- ------------ Benjamin R. Field $ 1,679 $ 1,962 $ 2,092 $ 1,860 $ 137,500 III Roger A. Gibson 1,345 1,733 1,911 1,594 125,625 Victoria J. Herget 1,435 1,677 1,788 1,590 117,500 Leonard W. 627 1,592 2,033 1,248 133,750 Kedrowski Richard K. 1,435 1,677 1,788 1,590 117,500 Riederer Joseph D. Strauss 1,362 1,634 1,759 1,536 115,625 Virginia L. 2,702 3,157 3,366 2,993 221,250 Stringer James M. Wade 1,527 1,784 1,902 1,691 125,000
(1) Includes amounts deferred pursuant to the Deferred Compensation Plan as follows: Roger A. Gibson, $118; Leonard W. Kedrowski, $627; and Joseph D. Strauss, $31. (2) Includes amounts deferred pursuant to the Deferred Compensation Plan as follows: Roger A. Gibson, $299; Leonard W. Kedrowski, $1,592; and Joseph D. Strauss, $80. (3) Includes amounts deferred pursuant to the Deferred Compensation Plan as follows: Roger A. Gibson, $382; Leonard W. Kedrowski, $2,033; and Joseph D. Strauss, $102. (4) Includes amounts deferred pursuant to the Deferred Compensation Plan as follows: Roger A. Gibson, $234; Leonard W. Kedrowski, $1,248; and Joseph D. Strauss, $62. (5) Includes amounts deferred pursuant to the Deferred Compensation Plan as follows: Roger A. Gibson, $25,125; Leonard W. Kedrowski, $133,750; and Joseph D. Strauss, $6,688. (6) As of August 31, 2006, the Fund Complex consisted of four open-end and eight closed-end investment companies, totaling 58 funds, managed by the Adviser, including the Funds. 10 DIRECTOR SHAREHOLDINGS The following table discloses the dollar range of equity securities beneficially owned by each director standing for re-election (i) in each Fund and (ii) on an aggregate basis in any of the funds in the Fund Complex.
Dollar Range of Equity Aggregate Dollar Range of Equity Name of Director Securities in the Funds Securities in the Fund Complex* - ---------------- ----------------------- ------------------------------ Benjamin R. Field III None Over $100,000 Roger A. Gibson None Over $100,000 Victoria J. Herget None Over $100,000 John P. Kayser None None Leonard W. Kedrowski American Strategic Income Over $100,000 Portfolio: $10,001-$50,000; American Strategic Income Portfolio II: $50,001-$100,000 Richard K. Riederer None Over $100,000 Joseph D. Strauss None Over $100,000 Virginia L. Stringer None Over $100,000 James M. Wade None Over $100,000
- -------------------------------- * The dollar range disclosed is based on the value of the securities as of June 30, 2006 (October 16, 2006 for Mr. Kayser.) To the knowledge of the Funds, as of October 10, 2006, the officers and directors of each Fund as a group beneficially owned less than 1% of the outstanding shares of each Fund. BOARD RECOMMENDATION; REQUIRED VOTE THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE IN FAVOR OF ALL NOMINEES TO SERVE AS DIRECTORS. For each Fund, the vote of a plurality of the shares represented at the meeting is sufficient for the election of each of the nominees, provided at least a quorum (a majority of the outstanding shares) is represented in person or by proxy. Unless otherwise instructed, the proxies will vote for all nominees. In the event any of the above nominees are not candidates for election at the meeting due to events not now known or anticipated, the proxies will vote for such other persons as the Board of Directors may designate. 11 PROPOSAL TWO RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Investment Company Act of 1940 provides that every registered investment company shall be audited at least once each year by independent public accountants selected by a majority of the directors of the investment company who are not interested persons of the investment company or its investment adviser. This selection is being submitted for ratification or rejection by the shareholders of each Fund. Based on the Audit Committee's recommendation, as discussed below under "Audit Committee Report," the directors, including a majority who are not interested persons of the Adviser or the Funds, have selected Ernst & Young LLP ("Ernst & Young") to be the Funds' independent public accountants for each Fund's current fiscal year. Ernst & Young examines the annual financial statements of the Funds and provides certain other audit-related and tax-related services to the Funds. Representatives of Ernst & Young are expected to be present at the meeting. These representatives will have the opportunity to make a statement to shareholders if they choose to do so and are expected to be available to respond to appropriate questions. AUDIT COMMITTEE REPORT The Audit Committee and the Board of Directors have the ultimate authority and responsibility to select, evaluate and, where appropriate, replace the Funds' independent public accountants (or to nominate the independent public accountants to be proposed for shareholder approval in any proxy statement). The function of the Audit Committee is oversight. It is management's responsibility to maintain appropriate systems for accounting and internal control and for preparing the Funds' financial statements, and the independent public accountants' responsibility is to plan and carry out a proper audit of the financial statements. In this context, the Audit Committee has met and held discussions with management and the independent accountants. Management represented to the Audit Committee that the Funds' financial statements were prepared in accordance with generally accepted accounting principles, and the Audit Committee has reviewed and discussed the financial statements with management and the independent accountants. The Audit Committee discussed with the independent accountants matters required to be discussed by Statement on Auditing Standards No. 61 (Communications with Audit Committees). The Funds' independent accountants also provided to the Audit Committee the written disclosure required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), and the Audit Committee discussed with the independent accountants the accounting firm's independence. The Committee also considered whether non-audit services provided by the independent accountants during the last fiscal year were compatible with maintaining the independent accountants' independence. Based upon the Audit Committee's discussion with management and the independent accountants and the Audit Committee's review of the representation of management and the report of the independent accountants to the Audit Committee, the Audit Committee recommended to the Board of Directors that, with respect to each Fund, the audited financial statements for the Fund's 12 most recent fiscal year be included in the Fund's Annual Report for that fiscal year filed with the SEC. Members of the Audit Committee Leonard W. Kedrowski, Chair Benjamin R. Field III Richard K. Riederer Virginia L. Stringer FEES PAID TO ERNST & YOUNG Audit Fees. Ernst & Young's fees for professional services rendered for the audit of each Fund's annual financial statements for the indicated fiscal periods were as set forth in the following table. These amounts included fees associated with the annual audit, SEC Rule 17f-2 security count filings and filings of the Funds' Annual Reports on Form N-CSR.
Fiscal Fiscal Fiscal period period Fiscal Fiscal year 6/1/05 12/1/04 year year ended through through ended ended 8/31/06 8/31/05 8/31/05 5/31/05 11/30/04 ------- ------- ------- ------- -------- American Strategic Income Portfolio $26,191 N/A $13,580 N/A $11,933 American Strategic Income $35,625 $7,473 N/A $35,748 N/A Portfolio II American Strategic Income $39,912 $8,728 N/A $43,762 N/A Portfolio III American Select Portfolio $32,187 N/A $19,106 N/A $29,555
Audit-Related Fees. Ernst & Young's fees for audit-related services for the indicated fiscal periods were as set forth in the following table. These audit-related services primarily related to services provided in connection with the previously announced proposed reorganization of the Funds into a real estate investment trust (which the Funds are no longer pursuing).
Fiscal Fiscal Fiscal period period Fiscal Fiscal year 6/1/05 12/1/04 year year ended through through ended ended 8/31/06 8/31/05 8/31/05 5/31/05 11/30/04 ------- ------- ------- ------- -------- American Strategic Income Portfolio $1,990 N/A $866 N/A $1,001 American Strategic Income $2,585 $607 N/A $1,726 N/A Portfolio II American Strategic Income $2,855 $709 N/A $2,130 N/A Portfolio III American Select Portfolio $2,368 N/A $1,222 N/A $2,670
13 Tax Fees. Ernst & Young's fees for tax services for the indicated fiscal periods were as set forth in the following table. These tax services included tax compliance, tax advice and tax planning services. Tax compliance, tax advice and tax planning services primarily relate to the preparation of original and amended tax returns, timely RIC qualification reviews, tax distribution analysis and planning, and tax services provided in connection with the previously proposed reorganization of the Funds into a real estate investment trust (which the Funds are no longer pursuing).
Fiscal Fiscal Fiscal period period Fiscal Fiscal year 6/1/05 12/1/04 year year ended through through ended ended 8/31/06 8/31/05 8/31/05 5/31/05 11/30/04 ------- ------- ------- ------- -------- American Strategic Income Portfolio $5,054 N/A $2,421 N/A $2,447 American Strategic Income $7,337 $934 N/A $7,856 N/A Portfolio II American Strategic Income $8,374 $1,091 N/A $9,723 N/A Portfolio III American Select Portfolio $6,505 N/A $3,743 N/A $6,067
All Other Fees. There were no fees billed by Ernst & Young for other services during the period from December 1, 2003 through August 31, 2006. Aggregate Non-Audit Fees. The aggregate non-audit fees billed by Ernst & Young to each of the Funds and the Adviser and entities controlling, controlled by or under common control with the Adviser that provide ongoing services to the Funds for the indicated fiscal periods are set forth in the following table.
Fiscal Fiscal Fiscal period period Fiscal Fiscal year 6/1/05 12/1/04 year year ended through through ended ended 8/31/06 8/31/05 8/31/05 5/31/05 11/30/04 ------- ------- ------- ------- -------- American Strategic Income Portfolio $23,544 N/A $28,986 N/A $34,198 American Strategic Income $26,422 $27,241 N/A $27,282 N/A Portfolio II American Strategic Income $27,730 $27,500 N/A $29,554 N/A Portfolio III American Select Portfolio $25,373 N/A $30,665 N/A $39,488
AUDIT COMMITTEE PRE-APPROVAL POLICIES The Audit Committee has established procedures requiring the pre-approval of all audit and non-audit services performed for the Funds by Ernst & Young. Such procedures also require the pre-approval of non-audit service provided to FAF Advisors, U.S. Bank National Association, Quasar Distributors, U.S. Bancorp Fund Services, LLC and any other entity under common control with FAF Advisors that provides ongoing services to the Funds, but only if those services relate directly to the operations and financial reporting of the Funds. All of the services described 14 above that were provided on or after May 6, 2003, the effective date of SEC rules relating to the pre-approval of non-audit services, were pre-approved in accordance with the Audit Committee's pre-approval procedures. BOARD RECOMMENDATION; REQUIRED VOTE THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE IN FAVOR OF THE RATIFICATION OF THE SELECTION OF ERNST & YOUNG. For each Fund, the vote of a majority of the shares represented at the meeting is sufficient for the ratification of the selection of the independent public accountants, provided at least a quorum (a majority of the outstanding shares) is represented in person or by proxy. Unless otherwise instructed, the proxies will vote for the ratification of the selection of Ernst & Young as each Fund's independent registered public accounting firm. PROPOSAL THREE APPROVAL OF CHANGE IN THE FUNDS' INVESTMENT RESTRICTIONS GOVERNING INVESTMENTS IN REAL ESTATE INVESTMENT TRUSTS Each Fund has a fundamental policy governing its investments in real estate that provides, in part, that the Fund may invest up to 25% of its total assets in preferred issues of real estate investment trusts ("REITs") that are investment grade or better at the time of investment, with a maximum of 1% of the Fund's total assets at the time of investment in REIT preferred issues of any one issuer or its affiliates. The Board of Directors has recommended that shareholders approve an increase in the maximum percentage of a Fund's total assets that may be invested in REIT preferred issues of any one issuer or its affiliates from 1% to 2%. REITs are publicly traded corporations or trusts that acquire, hold and manage residential or commercial real estate. REITs generally can be divided into the following three types: o Equity REITs, which invest the majority of their assets directly in real property and derive their income primarily from rents and capital gains or real estate appreciation. o Mortgage REITs, which invest the majority of their assets in real estate mortgage loans and derive their income primarily from interest payments. o Hybrid REITs, which combine the characteristics of equity REITs and mortgage REITs. Preferred issues of REITs are equity securities with fixed income characteristics, typically offering higher yields than the dividends paid on common stock. Preferred shareholders also have priority over common shareholders upon liquidation of the company. Investments in preferred issues of REITs offer the Funds the same or better yields than whole loans while improving diversification both in terms of product type and geographic location. These investments also provide better credit quality than individual whole loans. 15 The Adviser has represented to the Board of Directors that the number of REIT preferred issues that meet the Funds' investment criteria is fairly limited. The Board of Directors believes that it will be in the best interests of Fund shareholders to allow the Funds the additional investment flexibility provided by the proposed increase in the amount of Fund assets that can be invested in the REIT preferred issues of any one issuer or its affiliates. However, increasing the percentage of a Fund's assets exposed to a single issuer (or its affiliates) will increase the Fund's risk with respect to any factors that could impact that particular issuer to a greater extent than other REIT preferred issuers. The real estate industry is sensitive to factors such as changes in real estate values and property taxes, overbuilding, variations in rental income, and interest rates. The performance of real estate companies can also be affected by their structure and cash flow, and by the skill of their management. Particular risks associated with investments in REITs include the fact that equity REITs will be affected by changes in the values of and incomes from the properties they own, while mortgage REITs may be affected by the credit quality of the mortgage loans 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. THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS OF EACH FUND VOTE TO APPROVE THE PROPOSED CHANGE IN THAT FUND'S INVESTMENT POLICY CONCERNING INVESTMENTS IN REAL ESTATE INVESTMENT TRUSTS. For each Fund, the proposed investment policy change must be approved by a majority of the outstanding shares of the Fund, as defined in the 1940 Act, which means the lesser of the vote of (a) 67% of the shares of the Fund present at a meeting where more than 50% of the outstanding shares are present in person or by proxy, or (b) more than 50% of the outstanding shares of the Fund. Unless otherwise instructed, the proxies will vote for the approval of the proposed investment policy change. OFFICERS OF THE FUNDS Information about each officer's position and term of office with the Funds and business experience during the past five years is set forth below. Unless otherwise indicated, all positions have been held more than five years. No officer receives any compensation from the Funds.* Unless otherwise indicated, the address of each of the officers is FAF Advisors, Inc., 800 Nicollet Mall, Minneapolis, Minnesota 55402.
NAME AND POSITION TERM OF OFFICE** PRINCIPAL OCCUPATION(s) YEAR OF HELD WITH AND LENGTH OF TIME DURING PAST BIRTH THE FUNDS SERVED FIVE YEARS - ----- --------- ------ ---------- Thomas S. President Since February 2001 Chief Executive Officer of the Schreier, Jr. Adviser. (1962) John G. Wenker Senior Vice Since November 1996 Managing Director of the Adviser. (1951) President Mark S. Jordahl Vice Since September Chief Investment Officer of the (1960) President -- 2001 Adviser since September 2001. Investments
16
NAME AND POSITION TERM OF OFFICE** PRINCIPAL OCCUPATION(s) YEAR OF HELD WITH AND LENGTH OF TIME DURING PAST BIRTH THE FUNDS SERVED FIVE YEARS - ----- --------- ------ ---------- Jeffery M. Wilson Vice Since March 2000 Senior Vice President of the Adviser (1956) President -- since May 2001. Administration David H. Lui Chief Since February 2005 Chief Compliance Officer for First (1960) Compliance American Funds and the Adviser since Officer February 2005. Prior thereto, Chief Compliance Officer, Franklin Advisers, Inc. and Chief Compliance Counsel, Franklin Templeton Investments from March 2004 to February 2005. Prior to that, Vice President, Charles Schwab & Co., Inc. Jason K. Mitchell Anti-Money Since September Anti-Money Laundering Officer for (1976) Laundering 2006 First American Funds and the Adviser Officer since September 2006. Compliance Manager for the Adviser since June 2006. Prior thereto, Compliance Analyst for the Adviser from October 2004 through June 2006. Prior to that, Senior Systems Helpdesk Analyst for Wachovia Retirement Services from November 2002 through October 2004. Prior to that, Senior Retirement Plan Specialist for PFPC, Inc. Charles D. Treasurer Since December 2004 Treasurer of the Adviser since Gariboldi, Jr. October 2004; prior thereto, Vice (1959) President for investment accounting and Fund Treasurer of Thrivent Financial for Lutherans. Jill M. Stevenson Assistant Since September Assistant Treasurer for the Adviser (1965) Treasurer 2005 since September 2005; prior thereto, Director, Senior Project Manager for the Adviser from May 2003 to September 2005; prior to that, Vice President, Director of Operations, Paladin Investment Associates, LLC. Kathleen L. Secretary Since December Deputy General Counsel of the Adviser Prudhomme 2004; Assistant since November 2004; prior thereto, (1953) Secretary of the Partner, Dorsey & Whitney LLP, a Funds from Minneapolis based law firm. September 1999 to December 2004 Brett L. Agnew Assistant Since December 2004 Counsel for the Adviser since August (1971) Secretary 2004; 2001-2004, Senior Counsel, Thrivent Financial for Lutherans; prior thereto, Consultant, Principal Financial Group. Richard J. Ertel Assistant Since June 2006 Counsel for the Adviser since May (1967) Secretary 2006; prior thereto, Counsel, Ameriprise Financial Services, Inc. from September 2004 to May 2006; prior to that, Counsel, FAF Advisors, Inc. from May 2003 to August 2004; prior to May 2003, Associate Counsel, Hartford Life and Accident Insurance Company.
17
NAME AND POSITION TERM OF OFFICE** PRINCIPAL OCCUPATION(s) YEAR OF HELD WITH AND LENGTH OF TIME DURING PAST BIRTH THE FUNDS SERVED FIVE YEARS - ----- --------- ------ ---------- James D. Alt* Assistant Since December Partner, Dorsey & Whitney LLP, a (1951) Secretary 2004; Secretary of Minneapolis based law firm. 50 South Sixth the Funds from Street, Suite June 2002 to 1500 Minneapolis, December 2004 and MN 55402 Assistant Secretary of the Funds from September 1998 to June 2002
- ------------------- * Legal fees and expenses are paid to Dorsey & Whitney LLP, the law firm of which Mr. Alt is a partner. ** Officers serve at the pleasure of the Board of Directors and are re-elected by the Board annually. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Based on Fund records and other information, the Funds believe that all SEC filing requirements with respect to the Funds applicable to their directors and officers, the Adviser and companies affiliated with the Adviser, pursuant to Section 16(a) of the Securities Exchange Act of 1934, with respect to each Fund's fiscal year end were satisfied. SHAREHOLDER PROPOSALS Under the Securities Exchange Act of 1934, Fund shareholders may submit proposals to be considered at the next Annual Meeting. Rule 14a-8 under the Exchange Act sets forth the procedures and requirements for requesting that a Fund include these proposals in its proxy statement. Any proposal submitted under Rule 14a-8 must be received at the Funds' offices, 800 Nicollet Mall, Minneapolis, Minnesota 55402, no later than June 29, 2007. Shareholders also may submit proposals to be voted on at the next Annual Meeting without having the proposals included in the Funds' proxy statement. These proposals are known as "non-Rule 14a-8 proposals." The Funds' proxies will be able to exercise their discretionary authority to vote all proxies with respect to any non-Rule 14a-8 proposal, unless written notice of the proposal is presented to the Fund not later than September 5, 2007. Dated: October 26, 2006 Kathleen L. Prudhomme Secretary 18 APPENDIX A FIRST AMERICAN FUNDS GOVERNANCE COMMITTEE CHARTER I. PURPOSE The purpose of the Governance Committee is to enhance the effectiveness of the Board of Directors of the First American Funds. II. COMPOSITION The Governance Committee shall be composed entirely of Directors who are not "interested persons" of the Funds within the meaning of the Investment Company Act of 1940. The Governance Committee will have at least three members and the Board Chair will serve as an "ex-officio" member of the Committee. III. RESPONSIBILITIES The Committee will have the following responsibilities: BOARD COMPOSITION - Interview and recommend to the Board of Directors of the Funds nominees for election as directors (whether they are "interested" or "disinterested" within the meaning of the Investment Company Act of 1940) consistent with the needs of the Board and the Funds. The Committee will evaluate candidates' qualifications for Board membership and, with respect to persons being considered to join the Board as "disinterested" directors, their independence from management and principal service providers. These persons must be independent in terms of both the letter and the spirit of the 1940 Act and the Rules, Regulations and Forms under the 1940 Act. With respect to "disinterested" director candidates, the Committee also will consider the effect of any relationships beyond those delineated in the 1940 Act that might impair independence, such as business, financial or family relationships with Fund managers or service providers. In this regard, the Committee will not consider the following types of candidates to serve as "disinterested" directors: (1) a close family member1 of an employee, officer or interested director of a Fund or its affiliates, and (2) a former officer or director of a Fund's affiliate. - Review, annually, the independence of all Independent Directors and report its findings to the Board. - -------------------------- 1 "Close family member" includes any member of the immediate family and any aunt, uncle or cousin. 19 - Review the composition of the Board of Directors to determine whether it may be appropriate to add individuals with different backgrounds or skills from those already on the Board. - Report annually to the Board on which current and potential members of the Audit Committee qualify as Audit Committee Financial Experts. - Recommend to the Board a successor to the Board Chair when a vacancy occurs in that position. - Consult with the Board Chair regarding the Board Chair's recommended Committee assignments. - In anticipation of the Board's request for shareholder approval of a slate of Directors, recommend to the Board the slate of Directors to be presented for Board and shareholder approval. COMMITTEE STRUCTURE - Assist the Board Chair in his or her annual review of the Board's Committee structure and membership. - Review, at least annually, each Committee's Charter and suggest changes to the appropriate Committee Chair. DIRECTOR EDUCATION - Develop an annual education calendar that details the topics to be addressed in the Board's quarterly education sessions. The educational calendar will be presented to the full Board at its first quarterly meeting. - Monitor the attendance by each Independent Director at educational seminars, conferences or similar meetings. - Develop and conduct orientation sessions for new Independent Directors before or shortly after the new Directors join the Board. - Manage the Board's education program in a cost-effective manner. GOVERNANCE PRACTICES - Review and make recommendations to the Board of Directors concerning Director compensation at least once every two years. - As appropriate or necessary, review, on a regular basis, and make recommendations to the Board of Directors concerning Director expenses, including 20 those related to Board education, Director education, Director travel, legal counsel and consultant support. - Monitor compliance with the Board's requirement that each Director maintain investments in the Funds that are at least equal to the aggregate fees for one year that he or she receives for Board-related service to the Funds. - Review Director compliance with the requirement that a Director must retire from Board service by December 31 of the year in which he or she reaches the age of 70. - Review Director compliance with the prohibition from serving on the board of directors of mutual funds that are not part of the First American Fund Complex. - If requested, assist the Board Chair in overseeing the Board's self-evaluation process undertaken each year by the Independent Directors. - In collaboration with outside counsel and as required by law or deemed advisable by the Committee, develop policies and procedures addressing matters which should come before the Committee in the proper exercise of its duties. - Review, at least annually, the Board's adherence to industry "best practices." - In consultation with the Board Chair, review and, as appropriate, recommend changes in, Board governance policies, procedures and practices. - Report the Committee's activities on a regular basis to the Board of Directors and make such recommendations as the Committee and the Board Chair deem appropriate. - Review at least annually and, as appropriate, recommend that the Board implement changes to this Charter. IV. RETENTION OF EXPERTS The Committee will have the resources and authority to discharge its responsibilities, including the authority to retain special counsel and other experts or consultants at the expense of any one or more of the Funds, as appropriate. 21 NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TIME: Monday, December 4, 2006 at 2:30 p.m. PLACE: Minneapolis Club 729 Second Avenue South Minneapolis, Minnesota 55402 IMPORTANT: Please date and sign your proxy card and return it promptly using the enclosed reply envelope. Book 2 Cusip Numbers: 030098-10-7 030099-10-5 03009T-10-1 029570-10-8 002CS-12421 DETACH HERE AMERICAN STRATEGIC INCOME PORTFOLIO INC. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned appoints Charles D. Gariboldi, Jr., Kathleen L. Prudhomme, Jeffery M. Wilson, and Richard J. Ertel and each of them, with power to act without the other and with the right of substitution in each, the proxies of the undersigned to vote all common shares of American Strategic Income Portfolio Inc. (the "Fund"), held by the undersigned at the annual meeting of shareholders of the Fund to be held on December 4, 2006, and at any adjournments thereof, with all the powers the undersigned would possess if present in person. All previous proxies given with respect to the meeting are revoked. THIS PROXY WILL BE VOTED AS INSTRUCTED ON THE MATTERS SET FORTH ON THE REVERSE SIDE OF THIS CARD. IT IS UNDERSTOOD THAT, IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED "FOR" ALL ITEMS. UPON ALL OTHER MATTERS THE PROXIES SHALL VOTE AS THEY DEEM IN THE BEST INTERESTS OF THE FUND. RECEIPT OF NOTICE OF MEETING AND PROXY STATEMENT IS ACKNOWLEDGED BY YOUR EXECUTION OF THIS PROXY. SIGN, DATE, AND RETURN IN THE ADDRESSED ENVELOPE--NO POSTAGE REQUIRED. PLEASE MAIL PROMPTLY TO SAVE THE FUND FURTHER SOLICITATION EXPENSE. - -------------------------------------------------------------------------------- PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- IMPORTANT: Please date and sign this Proxy. If the stock is held jointly, signature should include both names. Executors, administrators, trustees, guardians, and others signing in a representative capacity should give their full title as such. - -------------------------------------------------------------------------------- HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS? - ----------------------------------- ----------------------------------- - ----------------------------------- ----------------------------------- - ----------------------------------- ----------------------------------- AMERICAN STRATEGIC INCOME PORTFOLIO INC. C/O COMPUTERSHARE P.O. BOX 8694 EDISON, NJ 08818-8694 ------------------------------------- ------------------------------------- YOUR VOTE IS IMPORTANT. PLEASE VOTE IMMEDIATELY. - ---------------------------------------- ------------------------------- VOTE-BY-INTERNET VOTE-BY-TELEPHONE OR Log on to the Internet and go to Call toll-free http://www.computershare.com/expressvote 1-800-652-VOTE (1-800-652-8683) - ---------------------------------------- ------------------------------- If you vote over the Internet or by telephone, please do not mail your card. DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL Please mark [X] votes as in this example 1. To elect all nominees listed below (except as marked to the contrary below). ----------------------------------------------------- AMERICAN STRATEGIC INCOME (01) Benjamin R. Field III, (02) Roger A. Gibson, PORTFOLIO INC. (03) Victoria J. Herget, (04) John P. Kayser, ----------------------------------------------------- (05) Leonard W. Kedrowski, (06) Richard K. Riederer, (07) Joseph D. Strauss, (08) Virginia L. Stringer, and (09) James M. Wade VOTE 2. To ratify the selection FOR WITHHELD of Ernst & Young LLP as FOR AGAINST ABSTAIN ALL FROM ALL independent public NOMINEES [ ] [ ] NOMINEES accountants for the Fund. [ ] [ ] [ ] 3. To increase the amount that the Fund may invest in REIT preferred issues of any one issuer or its FOR AGAINST ABSTAIN affiliate from 1% to 2% of the Fund's total [ ] [ ] [ ] assets. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the annual meeting or any adjournments or postponements thereof. Mark box at right if an address change or comment [ ] has been noted on the reverse side of this card. [ ] FOR ALL --------------------------------------- NOMINEES (INSTRUCTION: To withhold authority to vote Please be sure to sign and date this Proxy. EXCEPT for any individual nominees, write that nominee's name in the space provided above.) Shareholder Co-owner sign here: Date: sign here: Date: --------------------------- ---------------- ---------------------------------- ---------------
2 DETACH HERE AMERICAN STRATEGIC INCOME PORTFOLIO INC.--II THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned appoints Charles D. Gariboldi, Jr., Kathleen L. Prudhomme, Jeffery M. Wilson, and Richard J. Ertel and each of them, with power to act without the other and with the right of substitution in each, the proxies of the undersigned to vote all common shares of American Strategic Income Portfolio Inc.--II (the "Fund"), held by the undersigned at the annual meeting of shareholders of the Fund to be held on December 4, 2006, and at any adjournments thereof, with all the powers the undersigned would possess if present in person. All previous proxies given with respect to the meeting are revoked. THIS PROXY WILL BE VOTED AS INSTRUCTED ON THE MATTERS SET FORTH ON THE REVERSE SIDE OF THIS CARD. IT IS UNDERSTOOD THAT, IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED "FOR" ALL ITEMS. UPON ALL OTHER MATTERS THE PROXIES SHALL VOTE AS THEY DEEM IN THE BEST INTERESTS OF THE FUND. RECEIPT OF NOTICE OF MEETING AND PROXY STATEMENT IS ACKNOWLEDGED BY YOUR EXECUTION OF THIS PROXY. SIGN, DATE, AND RETURN IN THE ADDRESSED ENVELOPE--NO POSTAGE REQUIRED. PLEASE MAIL PROMPTLY TO SAVE THE FUND FURTHER SOLICITATION EXPENSE. - -------------------------------------------------------------------------------- PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- IMPORTANT: Please date and sign this Proxy. If the stock is held jointly, signature should include both names. Executors, administrators, trustees, guardians, and others signing in a representative capacity should give their full title as such. - -------------------------------------------------------------------------------- HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS? - ----------------------------------- ----------------------------------- - ----------------------------------- ----------------------------------- - ----------------------------------- ----------------------------------- AMERICAN STRATEGIC INCOME PORTFOLIO INC.--II C/O COMPUTERSHARE P.O. BOX 8694 EDISON, NJ 08818-8694 ------------------------------------- ------------------------------------- YOUR VOTE IS IMPORTANT. PLEASE VOTE IMMEDIATELY. - ---------------------------------------- ------------------------------- VOTE-BY-INTERNET VOTE-BY-TELEPHONE Log on to the Internet and go to OR Call toll-free http://www.computershare.com/expressvote 1-800-652-VOTE (1-800-652-8683) - ---------------------------------------- ------------------------------- If you vote over the Internet or by telephone, please do not mail your card. DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL Please mark [X] votes as in this example
1. To elect all nominees listed below (except as marked to --------------------------------------------------------------------- the contrary below). AMERICAN STRATEGIC INCOME (01) Benjamin R. Field III, (02) Roger A. Gibson, PORTFOLIO INC.--II (03) Victoria J. Herget, (04) John P. Kayser, (05) Leonard W. Kedrowski, (06) Richard K. Riederer, --------------------------------------------------------------------- (07) Joseph D. Strauss, (08) Virginia L. Stringer, and (09) James M. Wade 2. To ratify the selection of Ernst & Young LLP as FOR AGAINST ABSTAIN independent public [ ] [ ] [ ] accountants for the Fund. 3. To increase the amount that the Fund may invest in REIT preferred issues FOR AGAINST ABSTAIN of any one issuer or its [ ] [ ] [ ] VOTE affiliate from 1% to 2% FOR WITHHELD of the Fund's total ALL FROM ALL assets. NOMINEES [ ] [ ] NOMINEES In their discretion, the proxies are authorized to vote upon such other business as may properly come before the annual meeting or any adjournments or postponements thereof. Mark box at right if an address change or comment has been [ ] noted on the reverse side of this card. FOR ALL [ ] Please be sure to sign and date this Proxy. NOMINEES -------------------------------------- EXCEPT (INSTRUCTION: To withhold authority to vote for any individual nominees, write that nominee's name in the space provided above.) Shareholder Co-owner sign here: Date: sign here: Date: ----------------------------- ------------------------- ---------------------------- ----------------
DETACH HERE AMERICAN STRATEGIC INCOME PORTFOLIO INC.--III THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned appoints Charles D. Gariboldi, Jr., Kathleen L. Prudhomme, Jeffery M. Wilson, and Richard J. Ertel and each of them, with power to act without the other and with the right of substitution in each, the proxies of the undersigned to vote all common shares of American Strategic Income Portfolio Inc.--III (the "Fund"), held by the undersigned at the annual meeting of shareholders of the Fund to be held on December 4, 2006, and at any adjournments thereof, with all the powers the undersigned would possess if present in person. All previous proxies given with respect to the meeting are revoked. THIS PROXY WILL BE VOTED AS INSTRUCTED ON THE MATTERS SET FORTH ON THE REVERSE SIDE OF THIS CARD. IT IS UNDERSTOOD THAT, IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED "FOR" ALL ITEMS. UPON ALL OTHER MATTERS THE PROXIES SHALL VOTE AS THEY DEEM IN THE BEST INTERESTS OF THE FUND. RECEIPT OF NOTICE OF MEETING AND PROXY STATEMENT IS ACKNOWLEDGED BY YOUR EXECUTION OF THIS PROXY. SIGN, DATE, AND RETURN IN THE ADDRESSED ENVELOPE --NO POSTAGE REQUIRED. PLEASE MAIL PROMPTLY TO SAVE THE FUND FURTHER SOLICITATION EXPENSE. - -------------------------------------------------------------------------------- PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- IMPORTANT: Please date and sign this Proxy. If the stock is held jointly, signature should include both names. Executors, administrators, trustees, guardians, and others signing in a representative capacity should give their full title as such. - -------------------------------------------------------------------------------- HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS? - ----------------------------------- ----------------------------------- - ----------------------------------- ----------------------------------- - ----------------------------------- ----------------------------------- AMERICAN STRATEGIC INCOME PORTFOLIO INC.--III C/O COMPUTERSHARE P.O. BOX 8694 EDISON, NJ 08818-8694 ----------------------------------- ----------------------------------- YOUR VOTE IS IMPORTANT. PLEASE VOTE IMMEDIATELY. - ---------------------------------------- -------------------------------- VOTE-BY-INTERNET VOTE-BY-TELEPHONE Log on to the Internet and go to OR Call toll-free http://www.computershare.com/expressvote 1-800-652-VOTE (1-800-652-8683) - ---------------------------------------- -------------------------------- If you vote over the Internet or by telephone, please do not mail your card. DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL [X] Please mark votes as in this example 1. To elect all nominees listed below (except as marked to the contrary ---------------------------------------------------- below). AMERICAN STRATEGIC INCOME (01) Benjamin R. Field III, (02) Roger A. Gibson, PORTFOLIO INC.--III (03) Victoria J. Herget, (04) John P. Kayser, (05) Leonard W. Kedrowski, (06) Richard K. Riederer, ---------------------------------------------------- (07) Joseph D. Strauss, (08) Virginia L. Stringer, and (09) James M. Wade 2. To ratify the selection of Ernst & Young LLP as FOR AGAINST ABSTAIN independent public VOTE accountants for the Fund. [ ] [ ] [ ] FOR WITHHELD ALL [ ] [ ] FROM ALL 3. To increase the amount NOMINEES NOMINEES that the Fund may invest in REIT preferred issues FOR AGAINST ABSTAIN of any one issuer or its affiliate from 1% to 2% [ ] [ ] [ ] of the Fund's total assets. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the annual meeting or any adjournments or postponements thereof. Mark box at right if an address change or comment has been noted on the reverse side [ ] FOR ALL [ ] of this card. NOMINEES ----------------------------------------- EXCEPT (INSTRUCTION: To withhold authority to vote for any individual nominees, write that nominee's name in the space provided above.) Please be sure to sign and date this Proxy. Shareholder Co-owner sign here: Date: sign here: Date: ---------------------------------------- ---------------- ---------------------- -----------
2 DETACH HERE AMERICAN SELECT PORTFOLIO INC. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned appoints Charles D. Gariboldi, Jr., Kathleen L. Prudhomme, Jeffery M. Wilson, and Richard J. Ertel and each of them, with power to act without the other and with the right of substitution in each, the proxies of the undersigned to vote all common shares of American Select Portfolio Inc. (the "Fund"), held by the undersigned at the annual meeting of shareholders of the Fund to be held on December 4, 2006, and at any adjournments thereof, with all the powers the undersigned would possess if present in person. All previous proxies given with respect to the meeting are revoked. THIS PROXY WILL BE VOTED AS INSTRUCTED ON THE MATTERS SET FORTH ON THE REVERSE SIDE OF THIS CARD. IT IS UNDERSTOOD THAT, IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED "FOR" ALL ITEMS. UPON ALL OTHER MATTERS THE PROXIES SHALL VOTE AS THEY DEEM IN THE BEST INTERESTS OF THE FUND. RECEIPT OF NOTICE OF MEETING AND PROXY STATEMENT IS ACKNOWLEDGED BY YOUR EXECUTION OF THIS PROXY. SIGN, DATE, AND RETURN IN THE ADDRESSED ENVELOPE--NO POSTAGE REQUIRED. PLEASE MAIL PROMPTLY TO SAVE THE FUND FURTHER SOLICITATION EXPENSE. - -------------------------------------------------------------------------------- PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- IMPORTANT: Please date and sign this Proxy. If the stock is held jointly, signature should include both names. Executors, administrators, trustees, guardians, and others signing in a representative capacity should give their full title as such. - -------------------------------------------------------------------------------- HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS? - ----------------------------------- ----------------------------------- - ----------------------------------- ----------------------------------- - ----------------------------------- ----------------------------------- AMERICAN SELECT PORTFOLIO INC. C/O COMPUTERSHARE P.O. BOX 8694 EDISON, NJ 08818-8694 ------------------------------------- ------------------------------------- YOUR VOTE IS IMPORTANT. PLEASE VOTE IMMEDIATELY. - ---------------------------------------- ------------------------------- VOTE-BY-INTERNET VOTE-BY-TELEPHONE Log on to the Internet and go to Call toll-free http://www.computershare.com/expressvote OR 1-800-652-VOTE (1-800-652-8683) - ---------------------------------------- ------------------------------- If you vote over the Internet or by telephone, please do not mail your card. DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL Please mark [X] votes as in this example
1. To elect all nominees listed below (except as marked to --------------------------------------------------------------------- the contrary below). AMERICAN SELECT PORTFOLIO INC. (01) Benjamin R. Field III, (02) Roger A. Gibson, (03) Victoria J. Herget, (04) John P. Kayser, --------------------------------------------------------------------- (05) Leonard W. Kedrowski, (06) Richard K. Riederer, (07) Joseph D. Strauss, (08) Virginia L. Stringer, and 2. To ratify the selection of FOR AGAINST ABSTAIN (09) James M. Wade Ernst & Young LLP as [ ] [ ] [ ] independent public accountants for the Fund. 3. To increase the amount FOR AGAINST ABSTAIN that the Fund may invest [ ] [ ] [ ] in REIT preferred issues VOTE of any one issuer or its FOR WITHHELD affiliate from 1%to 2% ALL [ ] [ ] FROM ALL of the Fund's total assets. NOMINEES NOMINEES In their discretion, the proxies are authorized to vote upon such other business as may properly come before the annual meeting or any adjournments or postponements thereof. Mark box at right if an address change or comment has been [ ] [ ] noted on the reverse side of this card. ------------------------------------------ FOR ALL (INSTRUCTION: To withhold authority to vote Please be sure to sign and date this Proxy. NOMINEES for any individual nominees, write that EXCEPT nominee's name in the space provided above.) Shareholder Co-owner sign here: Date: sign here: Date: ----------------------------- ------------------------- ---------------------------- ----------------
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