DEF 14A 1 a2119266zdef14a.txt DEF 14A 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: / / Preliminary Proxy Statement / / Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) /X/ 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 OCTOBER 28, 2003 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 10:00 a.m., Central Time, on Tuesday, October 28, 2003, at 800 Nicollet Mall on the 3rd floor. 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 independent public accountants of each Fund for the current fiscal year. 3. 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 September 8, 2003 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. September 16, 2003 James D. Alt 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 -- OCTOBER 28, 2003 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 Tuesday, October 28, 2003, and any adjournments thereof. The investment adviser for the Funds is U.S. Bancorp Asset Management, Inc. (the "Adviser"). U.S. Bancorp Asset Management also acts as a co-administrator for the Funds along with U.S. Bancorp Fund Services, Inc. ("Fund Services"). The address of the Funds and the Adviser is 800 Nicollet Mall, Minneapolis, Minnesota 55402. The address of Fund Services is 615 E. Michigan Street, Milwaukee, Wisconsin 53202. 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 September 22, 2003. 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. 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. For each Fund, all returned proxies count toward a quorum, regardless of how they are voted. An abstention will be counted as shares present at the meeting in determining whether a proposal has been approved, and will have the same effect as a vote against the proposal. If a shareholder withholds authority to vote on a director, the shareholder will not be considered as present and entitled to vote on the election of that director. Similarly, if a proxy is returned with a broker non-vote on a 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 of the proposals 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). 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 1 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 September 8, 2003 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 ----------------- ------------------- -------------------- --------------- 4,230,294 15,964,968 21,343,292 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 September 8, 2003, except as follows:
NUMBER OF PERCENTAGE SHARES OF OWNERSHIP OF FUND NAME AND ADDRESS OF BENEFICIAL OWNER COMMON STOCK COMMON STOCK ---- ------------------------------------ ------------ ------------ American Strategic Income Portfolio Sit Investment Associates, Inc. 748,146 17.69% and affiliated entities ("Sit Investment Associates") 4600 Wells Fargo Center Minneapolis, MN American Strategic Income Portfolio II Sit Investment Associates 3,617,000 22.67% American Strategic Income Portfolio III Sit Investment Associates 1,822,000 8.54% American Select Portfolio Sit Investment Associates 1,279,000 12.00%
COPIES OF EACH FUND'S MOST RECENT ANNUAL REPORT AND SUBSEQUENT SEMI-ANNUAL REPORT, IF ANY, 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 the 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 53 open-end funds (which are portfolios of four registered investment companies). The business address of each of the nominees is that of the Funds. Each nominee has served as a director since the last annual meeting of shareholders with the exception of Messrs. Field and Foret, and Ms. Herget. These three individuals were elected by the other directors to fill vacancies on the Board, effective September 16, 2003. NOMINEES FOR ELECTION AS NON-INTERESTED DIRECTORS
NUMBER OF PORTFOLIOS IN FUND OTHER POSITION COMPLEX DIRECTOR- HELD PRINCIPAL OCCUPATION(S) OVERSEEN SHIPS WITH THE TERM OF OFFICE* AND LENGTH DURING LAST BY HELD BY NAME AND AGE FUNDS OF TIME SERVED 5 YEARS DIRECTOR DIRECTOR** ------------ -------- -------------------------- ----------------------- ---------- ---------- Benjamin R. Field III Director Mr. Field has served as a Senior Financial 61 None (Age 64) director of each of the Advisor, Bemis Company, Funds since September 2003. Inc. since 2002; prior Fund directors serve for a positions with Bemis one-year term that expires since 1963 include at the next annual meeting Senior Vice President of shareholders. and Chief Financial Officer & Treasurer (1992-2002), Vice President & Treasurer, and various other finance positions. Mickey P. Foret Director Mr. Foret has served as a Consultant to Northwest 61 ADC (Age 57) director of each of the Airlines, Inc. since Telecommunications, Funds since September 2003. 2002; prior positions Inc.; Fund directors serve for a with Northwest Airlines one-year term that expires include Executive Vice URS at the next annual meeting President & Chief Corporation of shareholders. Financial Officer (1998-2002), and Champion Chairman & CEO, Cargo. Airlines, Inc.
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NUMBER OF PORTFOLIOS IN FUND OTHER POSITION COMPLEX DIRECTOR- HELD PRINCIPAL OCCUPATION(S) OVERSEEN SHIPS WITH THE TERM OF OFFICE* AND LENGTH DURING LAST BY HELD BY NAME AND AGE FUNDS OF TIME SERVED 5 YEARS DIRECTOR DIRECTOR** ------------ -------- -------------------------- ----------------------- ---------- ---------- Roger A. Gibson Director Mr. Gibson has served as a Vice President - Cargo, 61 None (Age 56) director of each of the United Airlines, since Funds since August 1998. July 2001; Vice Fund directors serve for a President, North one-year term that expires America - at the next annual meeting Mountain Region of shareholders. for United Airlines (1995 - 2001). Victoria J. Herget Director Ms. Herget has served as a Investment consultant 61 None (Age 51) director of each of the and not-for-profit Funds since September 2003. board member since Fund directors serve for a 2001; Managing Director one-year term that expires of Zurich Scudder at the next annual meeting Investments of shareholders. (1993-2001); previous positions with Zurich Scudder and predecessor firms include Equity Portfolio Manager, Head of Institutional Sales and other related positions (1973-1993). Leonard W. Kedrowski Director Mr. Kedrowski has served as Owner, Executive and 61 None (Age 61) a director of each of the Management Consulting, Funds since August 1998. Inc., a management Fund directors serve for a consulting firm, since one-year term that expires 1992; Chief Executive at the next annual meeting Officer, Creative of shareholders. Promotions International, LLC, a promotional award programs and products company, since 1999; Board member, GC McGuiggan Corporation (dba Smyth Companies), manufacturer of designer doors; acted as CEO of Graphics Unlimited from 1996 to 1998.
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NUMBER OF PORTFOLIOS IN FUND OTHER POSITION COMPLEX DIRECTOR- HELD PRINCIPAL OCCUPATION(S) OVERSEEN SHIPS WITH THE TERM OF OFFICE* AND LENGTH DURING LAST BY HELD BY NAME AND AGE FUNDS OF TIME SERVED 5 YEARS DIRECTOR DIRECTOR** ------------ -------- -------------------------- ----------------------- ---------- ---------- Richard K. Riederer Director Mr. Riederer has served as Retired; President and 61 None (age 58) director of each of the Chief Executive Funds since August 2001. Officer, Weirton Steel Fund directors serve for a (1995 - 2001); one-year term that expires Director, Weirton Steel at the next annual meeting (1993 - 2001). of shareholders. Joseph D. Strauss Director Mr. Strauss has served as a Owner and President, 61 None (Age 62) director of each of the Excensus(TM), LLC, a Funds since August 1998. consulting firm, since Fund directors serve for a 2001; owner and one-year term that expires President, Strauss at the next annual meeting Management Company, a of shareholders. 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. Virginia L. Stringer Chair; Ms. Stringer has served as a Owner and President, 61 None (Age 58) Director director of each of the Strategic Management Funds since August 1998. Resources, Inc., a Fund directors serve for a management consulting one-year term that expires firm, since 1993; at the next annual meeting Executive Consultant of shareholders. for State Farm Insurance Company since 1997; formerly President and director of The Inventure Group, a management consulting and training company, President of Scott's, Inc., a
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NUMBER OF PORTFOLIOS IN FUND OTHER POSITION COMPLEX DIRECTOR- HELD PRINCIPAL OCCUPATION(S) OVERSEEN SHIPS WITH THE TERM OF OFFICE* AND LENGTH DURING LAST BY HELD BY NAME AND AGE FUNDS OF TIME SERVED 5 YEARS DIRECTOR DIRECTOR** ------------ -------- -------------------------- ----------------------- ---------- ---------- transportation company, and Vice President of Human Resources of The Pillsbury Company. James M. Wade Director Mr. Wade has served as a Owner and President, 61 None (Age 59) director of each of the Jim Wade Homes, a Funds since August 2001. homebuilding company, Fund directors serve for a since 1999; Vice one-year term that expires President and Chief at the next annual meeting Financial Officer, of shareholders. Johnson Controls, Inc., a controls manufacturing company, (January 1987-May 1991).
---------- * 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 seven meetings of the Board of Directors during the fiscal year of American Strategic Income Portfolio and American Select Portfolio ended November 30, 2002 and eight meetings during the fiscal year of American Strategic Income Portfolio II and American Strategic Income Portfolio III ended May 31, 2003. During each such 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 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 Nominating Committee. The purposes of the Audit Committee are (a) to oversee the Funds' accounting and financial reporting policies and practices, their internal controls and, as appropriate, the internal controls of certain service providers; (b) to oversee the quality of the Funds' financial statements and the independent audit thereof; and (c) to act as a liaison between the Funds' independent auditors and the full Board of Directors. 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. The Audit Committee currently consists of Messrs. Gibson and Riederer, Ms. Stringer (ex officio) and Mr. Kedrowski, who serves as its chairperson. Each member of the Audit Committee has been determined by the Board of Directors to be "independent" within the meaning of both the applicable New York Stock Exchange Rule and the applicable American Stock Exchange Rule and within the meaning of SEC Form N-CSR, Item 3(a)(2), and is not an "interested person" of the Funds within the 6 meaning of the Investment Company Act of 1940 The Board of Directors of each Fund has designated Mr. Kedrowski and Mr. Riederer as the Audit Committee financial experts. A copy of the Audit Committee's current charter is attached as Appendix A to the Proxy Statement. The Audit Committee met eight times during the fiscal year of American Strategic Income Portfolio and American Select Portfolio ended November 30, 2002 and nine times during the fiscal year of American Strategic Income Portfolio II and American Strategic Income Portfolio III ended May 31, 2003. The Nominating Committee of each Fund's Board of Directors is responsible for recommending to the Board (i) nominees for election as directors, (ii) a successor to the Chair when a vacancy occurs, and (iii) compensation plans and arrangements for the directors, and for reviewing with the Chair the Chair's recommended Committee assignments. Current members of the Nominating Committee are Messrs. Gibson and Wade, Ms. Stringer (ex officio), and Mr. Riederer, who serves as its chairperson. The Nominating Committee met one time during the fiscal year of American Strategic Income Portfolio and American Select Portfolio ended November 30, 2002 and two times during the fiscal year of American Strategic Income Portfolio II and American Strategic Income Portfolio III ended May 31, 2003. The nominating committee does not consider nominees recommended by shareholders. The Pricing Committee of each Fund's Board of Directors is responsible for valuing 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. Kedrowski and Ms. Stringer (ex officio), and Mr. Strauss, who serves as its chairperson. The Pricing Committee met six times during the fiscal year of American Strategic Income Portfolio and American Select Portfolio ended November 30, 2002 and six times during the fiscal year of American Strategic Income Portfolio II and American Strategic Income Portfolio III ended May 31, 2003. DIRECTOR COMPENSATION. No compensation is paid by the Funds to any director who is an officer or employee of the Adviser or any of its affiliates. Each director, other than the Chair, currently receives from the Fund Complex 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 full Board of Directors attended and $2,500 per Nominating Committee or Audit Committee meeting attended ($3,750 in the case of a committee chair). Directors are also reimbursed for their travel expenses to attend 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 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. The amounts specified in this paragraph are allocated among the Funds and the other closed- and open-end investment companies in the Fund Complex on the basis of net assets. 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. 7 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 twelve months ended December 31, 2002.* Messrs. Field and Foret and Ms. Herget were not directors of the Funds during these periods.
AGGREGATE AGGREGATE AGGREGATE COMPENSATION COMPENSATION AGGREGATE COMPENSATION FROM FROM AMERICAN FROM AMERICAN COMPENSATION FROM TOTAL COMPENSATION FROM NAME OF AMERICAN STRATEGIC STRATEGIC INCOME STRATEGIC INCOME AMERICAN SELECT FUND COMPLEX PAID TO DIRECTOR INCOME PORTFOLIO (1) PORTFOLIO II (2) PORTFOLIO III (3) PORTFOLIO (4) DIRECTORS (5)(6) -------- -------------------- ---------------- ----------------- ----------------- ----------------------- Roger A. Gibson $ 2,155 $ 2,675 $ 3,383 $ 5,781 $ 121,250 Leonard W. Kedrowski $ 3,972 $ 4,338 $ 5,486 $ 10,650 $ 184,375 Richard K. Riederer $ 2,453 $ 2,065 $ 2,611 $ 6,585 $ 155,000 Joseph D. Strauss $ 1,820 $ 1,627 $ 2,057 $ 4,884 $ 118,750 Virginia L. Stringer $ 3,403 $ 2,686 $ 3,396 $ 9,132 $ 205,000 James M. Wade $ 1,664 $ 1,618 $ 2,045 $ 4,467 $ 110,000
(1) Includes amounts deferred pursuant to the Deferred Compensation Plan as follows: Roger A. Gibson, $1,231; Leonard W. Kedrowski, $3,972; Joseph D.Strauss, $55; and Virginia L. Stringer, $553. (2) Includes amounts deferred pursuant to the Deferred Compensation Plan as follows: Roger A. Gibson, $1,754; and Leonard W. Kedrowski, $4,338. (3) Includes amounts deferred pursuant to the Deferred Compensation Plan as follows: Roger A. Gibson, $2,218; and Leonard W. Kedrowski, $5,486. (4) Includes amounts deferred pursuant to the Deferred Compensation Plan as follows: Roger A. Gibson, $3,301; Leonard W. Kedrowski, $10,650; Joseph D.Strauss, $147; and Virginia L. Stringer, $1,483. (5) Includes amounts deferred pursuant to the Deferred Compensation Plan as follows: Roger A. Gibson, $60,625; and Leonard W. Kedrowski, $184,375. (6) As of December 31, 2002, the Fund Complex consisted of four open-end and 10 closed-end investment companies, totaling 71 funds, managed by the Adviser, including the Funds. 8 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 None Mickey P. Foret None None Roger A. Gibson None $10,001-$50,000 Victoria J. Herget None None Leonard W. Kedrowski None Over $100,000 Richard K. Riederer None $50,001-$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 October 1, 2002 (July 2003 for Messrs. Field and Foret and Ms. Herget). To the knowledge of the Funds, as of September 8, 2003, the officers and directors of each Fund as a group beneficially owned less than 1% of each class of the outstanding shares of each Fund. 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 majority 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. PROPOSAL TWO RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS The 1940 Act provides that every registered investment company shall be audited at least once each year by independent public accountants selected by a majority of the directors of the investment company who are not interested persons of the investment company or 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 & 9 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 non-audit 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 recommends to the Funds' Board of Directors the appointment of each Fund's independent accountants. Management is responsible for the Funds' internal controls and the financial reporting process. The Funds' independent accountants are responsible for performing an independent audit of the Funds' financial statements in accordance with generally accepted auditing standards and to issue a report on the Funds' financial statements. The Audit Committee's responsibility is to monitor and oversee these processes. 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 most recent fiscal year be included in the Fund's Annual Report for that fiscal year filed with the Securities and Exchange Commission. Members of the Audit Committee Leonard W. Kedrowski, Chair Roger A. Gibson Richard K. Riederer Virginia L. Stringer 10 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 its most recently completed fiscal year were as follows:
FUND AUDIT FEES ---- ---------- American Strategic Income Portfolio $ 9,356 American Strategic Income Portfolio II $ 46,397 American Strategic Income Portfolio III $ 58,712 American Select Portfolio $ 20,900
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. Ernst & Young did not provide any financial information systems design and implementation services to the Funds during their most recently ended fiscal years. ALL OTHER FEES. Ernst & Young's fees for tax-related services and audit-related services during each Fund's most recently completed fiscal year were as follows:
FUND TAX-RELATED SERVICES AUDIT-RELATED SERVICES ---- -------------------- ---------------------- American Strategic Income Portfolio $ 36,395 $ 15,277 American Strategic Income Portfolio II $ 110,058 $ 50,997 American Strategic Income Portfolio III $ 145,337 $ 65,413 American Select Portfolio $ 139,139 $ 47,682
Audit-related services principally include services provided in connection with the proposed reorganization of the Funds and procedures related to Rule 17f-2 security counts. Fees for tax-related services include tax compliance, tax advice and tax planning, and tax services provided in connection with the proposed reorganization of the Funds. In addition, Ernst & Young billed the Adviser $8,700 during the fiscal year ended May 31, 2003 of American Strategic Income Portfolio II and American Strategic Income Portfolio III and $3,500 during the fiscal year ended November 30, 2002 of American Strategic Income Portfolio and American Select Portfolio. 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 public accountants. 11 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 U.S. Bancorp Asset Management, Inc., 800 Nicollet Mall, Minneapolis, Minnesota 55402.
POSITION HELD TERM OF OFFICE* AND NAME AND AGE WITH THE FUNDS LENGTH OF TIME SERVED PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS ------------ -------------- --------------------- ---------------------------------------------- Thomas S. President Since February 2001 Chief Executive Officer of the Adviser since May 2001; prior Schreier, Jr. thereto, Chief Executive Officer of First American Asset (Age 40) Management since December 2000 and of Firstar Investment & Research Management Company ("FIRMCO") since February 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 from 1996 to 1998. John G. Wenker Senior Vice Since 1992 for Managing Director of the Advisor since May 2001; prior (Age 51) President American Strategic thereto, Managing Director of First American Asset Income Portfolio; Management since 1998; Managing Director of the Fixed Income since inception for Department at Piper Jaffray Inc. from 1992 to 1998. American Strategic Income Portfolio II, American Strategic Income Portfolio III and American Select Portfolio Mark S. Jordahl Vice President -- Since September 2001 Chief Investment Officer of the Adviser since September (Age 42) Investments 2001; prior thereto, President and Chief Investment Officer, ING Investment Management - Americas, September 2000 to June 2001, Senior Vice President and Chief Investment Officer, ReliaStar Financial Corp, January 1998 to September 2000, Executive Vice President and Managing Director, Washington Square Advisers, January 1996 to December 1997. Russell J. Vice President Since June 1996 Managing Director of the Advisor since 2001; prior thereto, Kappenman and Assistant Vice President of First American Asset Management since (Age 38) Secretary 1998; tax manager and fixed income analyst with Piper Jaffray Inc. from 1989 to 1998. Julene R. Vice President Since June 1996 Vice President of the Advisor since May 2001; prior thereto, Melquist an analyst with First American Asset Management since 1998; (Age 36) Assistant Vice President of Piper Capital Management Inc. from 1994 to 1998.
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POSITION HELD TERM OF OFFICE* AND NAME AND AGE WITH THE FUNDS LENGTH OF TIME SERVED PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS ------------ -------------- --------------------- ---------------------------------------------- Robert H. Nelson Treasurer Since 1995 Senior Vice President of the Adviser since May 2001; prior (Age 39) thereto, Senior Vice President of First American Asset Management since 1998 and of FIRMCO since February 2001; Senior Vice President of Piper Capital Management Inc. from 1994 to 1998. James D. Alt Secretary Since June 2002; Partner, Dorsey & Whitney LLP, a Minneapolis based law firm (Age 51) Assistant Secretary 50 South Sixth of the Funds from Street, Suite 1500 September 1998 to Minneapolis, MN June 2002 55402 Richard J. Ertel Assistant Since June 2003 Disclosure Counsel, U.S. Bancorp Asset Management, Inc. (Age 36) Secretary since May 2003; Associate Counsel, Hartford Life and Accident Insurance Company from April 2001 through May 2003; from January 1997 through March 2001, Attorney and Law Clerk, Fortis Financial Group. Kathleen L. Assistant Since September 1998 Partner, Dorsey & Whitney LLP, a Minneapolis based law firm Prudhomme Secretary (Age 50) 50 South Sixth Street, Suite 1500 Minneapolis, MN 55402 Michael J. Assistant Since March 2000; Partner, Dorsey & Whitney LLP, a Minneapolis based law firm Radmer Secretary Secretary of the (Age 58) Funds from September 50 South Sixth 1998 to March 2000 Street, Suite 1500 Minneapolis, MN 55402
---------- * 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 Securities and Exchange Commission filing requirements 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. 13 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 May 19, 2004. 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 August 8, 2004. SHAREHOLDER UPDATE The Funds' Board of Directors has approved a proposal to reorganize the Funds into First American Strategic Real Estate Portfolio, Inc., a specialty finance company that would elect to be taxed as a real estate investment trust (REIT). Shareholders of the Funds who do not wish to receive shares of the REIT will have the option, subject to certain limitations, of electing to exchange their shares for shares of First American Strategic Income Portfolio Inc., a newly formed closed-end management investment company with investment policies, restrictions, and strategies substantially similar to those of the Funds. This transaction is subject to review by the Securities and Exchange Commission and certain other conditions, including approval by the Funds' shareholders. We anticipate that, after the Securities and Exchange Commission's review has been completed, your approval will be solicited in a separate proxy statement/prospectus. There is no assurance, however, that the transaction will be completed. Dated: September 16, 2003 James D. Alt Secretary 14 APPENDIX A FIRST AMERICAN FUNDS AUDIT COMMITTEE CHARTER As amended June 4, 2003 PRELIMINARY NOTE: This Charter reflects rules amendments adopted by the Securities and Exchange Commission (SEC) through January 2003. It does not yet reflect listing standards amendments which will be adopted by the New York Stock Exchange and the American Stock Exchange in order to conform their listing standards to the requirements of Section 301 of the Sarbanes-Oxley Act of 2002 and SEC rules thereunder. 1. The First American Funds Complex Audit Committee (Audit Committee) shall be composed entirely of independent directors(1) who are not "interested persons" of the Funds within the meaning of the Investment Company Act of 1940. The Audit Committee shall be comprised of at least three members with one member appointed as chairperson. All committee members shall be financially literate(2), at least one member shall have accounting or related financial management expertise(3), and at least one member shall be an "audit committee financial expert" as determined by the Board of Directors of the Funds pursuant to SEC Form N-CSR, Items 3(b) and (c). 2. The purposes of the Audit Committee are: (a) to oversee the Funds' accounting and financial reporting policies and practices, their internal controls and, as appropriate, the internal controls of certain service providers; (b) to oversee the quality of the Funds' financial statements and the independent audit thereof; and (c) to act as a liaison between the Funds' independent auditors and the full Board of Directors. 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 auditor's responsibility is to plan and carry out a proper audit of the financial statements. ---------- (1) A director shall be deemed "independent" for this purpose only if he or she is independent within the meaning of both the applicable New York Stock Exchange Rule and the applicable American Stock Exchange Rule and within the meaning of SEC Form N-CSR, Item 3(a)(2). The full Board of Directors has reviewed information provided by each Audit Committee member and has found that each such member is "independent" within the meaning of these rules. (2) For purposes of the applicable New York Stock Exchange Rule, the full Board of Directors, in its business judgment, interprets the term "financially literate" in a manner consistent with the counterpart American Stock Exchange Rule, as meaning that an Audit Committee member is able to read and understand fundamental financial statements, including a balance sheet, income statement, and cash flow statement. (3) For purposes of the applicable New York Stock Exchange Rule, the full Board of Directors, in its business judgment, interprets this qualification in a manner consistent with the counterpart American Stock Exchange Rule, as meaning that an Audit Committee member has past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background which results in the individual's financial sophistication, including being or having been a chief executive officer, chief financial officer, or other senior officer with financial oversight responsibilities. 15 The outside auditor for the Funds is ultimately accountable to the Board of Directors and Audit Committee as representatives of shareholders. The Audit Committee and Board of Directors have 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). 3. To carry out its purposes, the Audit Committee shall have the following duties and powers: (a) to review with management and the independent auditors the audited annual financial statements of the Funds, including their judgment about the quality, not just the acceptability, of accounting principles, the reasonableness of significant judgments, and the clarity of the disclosures in the financial statements; (b) to meet with the Funds' independent auditors, including private meetings, as necessary (i) to review the arrangements for and scope of the annual audit and any special audits; (ii) to discuss any matters or concern relating to the Funds' financial statements, including any adjustments to such statements recommended by the auditors, or other results of said audit(s); (iii) to consider the auditors' comments with respect to the Funds' financial policies, procedures, and internal accounting controls and management's responses thereto; (iv) to review the form of opinion the independent auditors propose to render to the Board and shareholders with respect to the Funds' financial statements; and (v) to review the results of internal audits of areas that impact the Funds; (c) to prepare and deliver the audit committee reports required to be included in the closed-end funds' proxy statements; (d) to receive and consider any communications which the Funds' principal executive officer and principal financial officer are required to make to the Audit Committee in connection with their certifications of the Funds' filings on SEC Form N-CSR; (e) to receive and consider the communications which the Funds' independent auditors are required to make to the Audit Committee pursuant to SEC Reg. S-X, Rule 2-07(a); (f) to consider the effect upon the Funds of any changes in accounting principles or practices proposed by management or the auditors; (g) to ensure that the auditor submits on a periodic basis to the Audit Committee a formal written statement delineating all relationships between the auditor and the Funds, consistent with Independence Standards Board Statement No. 1, to engage in a dialogue with the auditor with respect to any disclosed relationships or services that may impact the objectivity and independence of the auditor, to evaluate the independence of the auditor, and to recommend that the Board of Directors take appropriate action in response to the auditors' report to satisfy itself of the auditors' independence; (h) to consider pre-approving any accounting firm's engagement to render audit or non-audit services to the Funds or, under the circumstances contemplated by SEC Reg. S-X, Rule 2-01(c)(7)(ii), to the Funds' investment adviser or any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the Funds and the accounting firm's services have a direct impact on the Funds' operations or financial reporting; provided, that the Audit Committee may establish written pre-approval policies and procedures which conform to the requirements of SEC Reg. S-X, Rule 2-01(c)(7)(i)(B); 16 (i) to review the fees charged to the Funds by the auditors for audit and non-audit services; (j) to investigate improprieties or suspected improprieties in Fund operations; (k) to review procedures to safeguard portfolio securities; (l) to review the Funds' back-up procedures and disaster recovery plans (except those pertaining to primary pricing services system); and (m) to report its activities to the full Board on a regular basis and to make such recommendation with respect to the above and other matters as the Committee may deem necessary or appropriate. 4. The Committee shall meet on a regular basis and is empowered to hold special meetings, as circumstances require. 5. The Committee shall regularly meet with the Treasurer of the Funds. 6. The Committee also shall act as the Funds' "qualified legal compliance committee," as defined in 17 CFR Section 205.2(k). In this role, the Committee shall: (a) adopt written procedures for the confidential receipt, retention and consideration of any report of evidence of a material violation of United States federal or state securities law, material breach of fiduciary duty to the Funds arising under United States federal or state law, or similar material violation of United States federal or state law which is required to be made with respect to the Funds by attorneys who are subject to the reporting rules set forth in 17 CFR Part 205; (b) have the authority and responsibility: (i) to inform the Funds' chief legal officer and chief executive officer (or the equivalents thereof) of any report of evidence of a material violation received by the Committee (except in the circumstances described in 17 CFR Section 205.3(b)(4)); (ii) to determine whether an investigation is necessary regarding any report of evidence of a material violation received by the Committee and, if the Committee determines an investigation is necessary or appropriate, to (A) notify the Funds' Board of Directors, (B) initiate an investigation, which may be conducted either by the Funds' chief legal officer (or the equivalent thereof) or by outside attorneys, and (C) retain such additional expert personnel as the Committee deems necessary; (iii) at the conclusion of the investigation, to (A) recommend to the full Board of Directors, by majority vote, that the Funds implement an appropriate response to evidence of a material violation, and (B) inform the Funds' chief legal officer and chief executive officer and their Board of Directors of the results of any such investigation and the appropriate remedial measures to be adopted; and (c) have the authority and responsibility, acting by majority vote, to take all other appropriate action, including the authority to notify the SEC in the event that the Funds fail in any material respect to implement an appropriate response that the Committee has recommended the Funds to take. 7. The Committee shall have the resources and authority appropriate to discharge its responsibilities, including the power to investigate any matter brought to its attention with full access to all books, records, facilities, and 17 personnel related to the Funds and the authority to retain special counsel and other experts or consultants at the expense of the appropriate Fund(s). 8. The Committee shall review this Charter at least annually and recommend any changes to the full Board of Directors. The full Board of Directors shall approve this charter at least annually. 18 NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TIME: Tuesday, October 28, 2003 at 10:00 a.m. PLACE: 800 Nicollet Mall 3rd Floor Minneapolis, Minnesota 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 USBAM2-PS-03 DETACH HERE AMERICAN STRATEGIC INCOME PORTFOLIO INC. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned appoints Mark S. Jordahl, Robert H. Nelson and Jeffery M. Wilson 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 October 28, 2003, 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 EQUISERVE TRUST COMPANY, N.A. 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.eproxyvote.com/asp 1-877-PRX-VOTE (1-877-779-8683) 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). (01) Benjamin R. Field, (02) Mickey P. Foret, (03) Roger A. Gibson, (04) Victoria J. Herget, (05) Leonard W. Kedrowski, (06) Richard K. Riederer, (07) Joseph D. Strauss, (08) Virginial L. Stringer, and (09) James M. Wade VOTE FOR WITHHELD ALL / / / / FROM ALL NOMINEES NOMINEES FOR ALL / /_______________________________________________________ NOMINEES (INSTRUCTION: To withhold authority to vote for any individual EXCEPT nominees, write that nominee's name in the space provided above.) -------------------------------------------------------------------------------- AMERICAN STRATEGIC INCOME PORTFOLIO INC. -------------------------------------------------------------------------------- 2. To ratify the selection of Ernst & Young LLP as FOR AGAINST ABSTAIN independent public / / / / / / accountants for the Fund. 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. Please be sure to sign and date this Proxy. 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 Mark S. Jordahl, Robert H. Nelson and Jeffery M. Wilson 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 October 28, 2003, 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 EQUISERVE TRUST COMPANY, N.A. 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.eproxyvote.com/bsp 1-877-PRX-VOTE (1-877-779-8683) 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). (01) Benjamin R. Field, (02) Mickey P. Foret, (03) Roger A. Gibson, (04) Victoria J. Herget, (05) Leonard W. Kedrowski, (06) Richard K. Riederer, (07) Joseph D. Strauss, (08) Virginial L. Stringer, and (09) James M. Wade VOTE FOR WITHHELD ALL / / / / FROM ALL NOMINEES NOMINEES FOR ALL / /_______________________________________________________ NOMINEES (INSTRUCTION: To withhold authority to vote for any individual EXCEPT nominees, write that nominee's name in the space provided above.) -------------------------------------------------------------------------------- AMERICAN STRATEGIC INCOME PORTFOLIO INC.--II -------------------------------------------------------------------------------- 2. To ratify the selection of Ernst & Young LLP as FOR AGAINST ABSTAIN independent public / / / / / / accountants for the Fund. 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. Please be sure to sign and date this Proxy. Shareholder Co-owner sign here: Date: sign here: Date: -------------- --------- -------------- --------- 2 DETACH HERE AMERICAN STRATEGIC INCOME PORTFOLIO INC.--III THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned appoints Mark S. Jordahl, Robert H. Nelson and Jeffery M. Wilson 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 October 28, 2003, 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 EQUISERVE TRUST COMPANY, N.A. 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.eproxyvote.com/csp 1-877-PRX-VOTE (1-877-779-8683) 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). (01) Benjamin R. Field, (02) Mickey P. Foret, (03) Roger A. Gibson, (04) Victoria J. Herget, (05) Leonard W. Kedrowski, (06) Richard K. Riederer, (07) Joseph D. Strauss, (08) Virginial L. Stringer, and (09) James M. Wade VOTE FOR WITHHELD ALL / / / / FROM ALL NOMINEES NOMINEES FOR ALL / /_______________________________________________________ NOMINEES (INSTRUCTION: To withhold authority to vote for any individual EXCEPT nominees, write that nominee's name in the space provided above.) -------------------------------------------------------------------------------- AMERICAN STRATEGIC INCOME PORTFOLIO INC.--III -------------------------------------------------------------------------------- 2. To ratify the selection of Ernst & Young LLP as FOR AGAINST ABSTAIN independent public / / / / / / accountants for the Fund. 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. 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 Mark S. Jordahl, Robert H. Nelson and Jeffery M. Wilson 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 October 28, 2003, 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 EQUISERVE TRUST COMPANY, N.A. 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.eproxyvote.com/sla 1-877-PRX-VOTE (1-877-779-8683) 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). (01) Benjamin R. Field, (02) Mickey P. Foret, (03) Roger A. Gibson, (04) Victoria J. Herget, (05) Leonard W. Kedrowski, (06) Richard K. Riederer, (07) Joseph D. Strauss, (08) Virginial L. Stringer, and (09) James M. Wade VOTE FOR WITHHELD ALL / / / / FROM ALL NOMINEES NOMINEES FOR ALL / /_______________________________________________________ NOMINEES (INSTRUCTION: To withhold authority to vote for any individual EXCEPT nominees, write that nominee's name in the space provided above.) -------------------------------------------------------------------------------- AMERICAN SELECT PORTFOLIO INC. -------------------------------------------------------------------------------- 2. To ratify the selection of Ernst & Young LLP as FOR AGAINST ABSTAIN independent public / / / / / / accountants for the Fund. 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. Please be sure to sign and date this Proxy. Shareholder Co-owner sign here: Date: sign here: Date: -------------- --------- -------------- --------- 2