Description of Classes continuedDistribution ArrangementsClass A shares are subject to a front-end sales charge. Class Yshares have no sales charges, either up-front or deferred. TheFunds have adopted a plan under Rule 12b-1. This plan allowsthe Class A shares and Class Y shares of both Funds to paydistribution fees for the sale and distribution of its shares. Forinstance, fees are paid to persons who sell the Funds’ shares.From time to time, additional cash compensation may be paidto persons affiliated with <strong>COUNTRY</strong> Capital ManagementCompany, a registered broker-dealer affiliated with the Adviser,who reach certain sales goals. Because these fees are paid outof the Funds’ assets on an ongoing basis, over time these feeswill increase the cost of your investment and may cost youmore than paying other types of sales charges. The maximumamount which each Fund may pay for Rule 12b-1 planexpenses, on an annual basis, is 0.25% of average net assets.Quasar Distributors, LLC currently serves as the distributor forthe Funds on a best efforts basis.18
Distributions and TaxesDividend Reinvestment: You may have your distributionsreinvested in the Fund, another <strong>COUNTRY</strong> Fund, a selectedFirst American Fund or mailed out by check. Reinvestment intoa selected First American Fund may be subject to an additionalsales charge. If you do not give the Fund instructions, yourdistributions will automatically be reinvested in the particularFund. There are no fees or sales charges on reinvestments. Youshould not have distributions mailed out by check if youparticipate in the Systematic Withdrawal Plan.Timing of Distributions: The Funds generally distributedividends from their net investment income and net capitalgains, if any. The Growth Fund typically pays incomedividends semi-annually. The Bond Fund typically paysmonthly dividends.On the ex-dividend date for a distribution, a Fund’s share priceis reduced by the amount of the distribution. If you buy sharesjust before the ex-dividend date, in effect, you “buy thedividend.” You will pay the full price for the shares and thenreceive a portion of that price back as a taxable distribution.If you elect to receive distributions and/or capital gains paid incash, and the U.S. Postal Service cannot deliver the check, or ifa check remains outstanding for six months, the Funds reservethe right to reinvest the distribution check in your account, atthe Funds’ current net asset value, and to reinvest all subsequentdistributions.Taxes: As long as a Fund meets the requirements for being atax-qualified regulated investment company, which each Fundin the past has done and intends to do in the future, it pays nofederal income tax on the earnings it distributes to shareholders.Dividends and distributions you receive from a Fund, whetherreinvested or taken as cash, are generally considered taxable.Qualifying distributions designated as the excess of net longtermcapital gain over net short-term capital loss are generallytaxable as long-term capital gain to the recipient shareholderregardless of the length of time the shareholder held the Fund’sshares.A portion of any distribution properly designated as a dividendby the Growth Fund may be eligible for the dividends-receiveddeduction in the case of corporate shareholders or as a qualifieddividend in the case of individual shareholders, provided thatthe shareholder also meets certain holding period requirementswith respect to their shares.The tax status of the distributions for each calendar year will bedetailed in your annual tax statement from each Fund. Becauseeveryone’s tax situation is unique, always consult your taxprofessional about federal, state and local tax consequences.An exchange of shares of a Fund for shares of another Fund is asale of Fund shares for tax purposes.Backup Withholding: By law, the Funds must withhold apercentage of your distributions and proceeds if you have notprovided correct taxpayer information.Account Statements: You will receive an account statementafter every transaction that affects your account balance, afterany change of name or address of the registered owner, and inall other cases, quarterly.19