AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 29, 2000
REGISTRATION NO. 333-76863; 811-09253
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / /
PRE-EFFECTIVE AMENDMENT NO. / /
POST-EFFECTIVE AMENDMENT NO. 2 /X/
AND
WELLS FARGO FUNDS TRUST
(Exact Name of Registrant as specified in Charter)
111 CENTER STREET
LITTLE ROCK, ARKANSAS 72201
(Address of Principal Executive Offices, including Zip Code)
------------------------
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (800) 643-9691
RICHARD H. BLANK, JR.
C/O STEPHENS INC.
111 CENTER STREET
LITTLE ROCK, ARKANSAS 72201
(Name and Address of Agent for Service)
------------------------
WITH A COPY TO:
ROBERT M. KURUCZA, ESQ.
MARCO E. ADELFIO, ESQ.
MORRISON & FOERSTER LLP
2000 PENNSYLVANIA AVE., N.W.
WASHINGTON, D.C. 20006
AND
KATHLEEN K. CLARKE, ESQ.
SEWARD & KISSEL LLP
1200 G STREET, NW
WASHINGTON, DC 20005
<PAGE>
Explanatory Note
This Post-Effective Amendment No. 2 to the N-14 Registration Statement of
Wells Fargo Funds Trust incorporates Parts A and B of the Registration Statement
in their entirety by reference to the Trust's filing pursuant to Rule 485(b) on
June 3, 1999. This Amendment is being filed to add certain exhibits to Part C of
the Registration Statement, and to make certain other non-material changes.
<PAGE>
PART C
ITEM 15. INDEMNIFICATION.
Incorporated by reference to Item 25 of Post-Effective Amendment No. 1 to
Registrant's Registration Statement on Form N-1A (File Nos. 333-74295;
811-09253, filed May 28, 1999 (accession number 898430-99-002291)).
ITEM 16. EXHIBITS.
(1) Incorporated by reference to Item 23, Exhibit 1 of Post-Effective Amendment
No. 1 to Registrant's Registration Statement on Form N-1A (File Nos. 333-74295;
811-09333, filed May 28, 1999 (accession number 898430-99-002291)).
(2) Incorporated by reference to Item 23, Exhibit 2 of Post-Effective Amendment
No. 1 to Registrant's Registration Statement on Form N-1A (File Nos. 333-74295;
811-09333, filed May 28, 1999 (accession number 898430-99-002291)).
(3) Not applicable.
(4) Agreements and Plans of Reorganization, incorporated by reference to, and
filed as Exhibit B to Part A to, Registrant's Registration Statement on Form
N-14 File Nos. 333-74295; 811-09253, filed April 22, 1999.
(5) Not Applicable.
(6) Incorporated by reference to Item 23, Exhibits 4(a), (b)(i), and (b)(ii) of
Post-Effective Amendment No. 1 to Registrant's Registration Statement on Form
N-1A (File Nos. 333-74295; 811-09333, filed May 28, 1999 (accession number
898430-99-002291)).
(7) Incorporated by reference to Item 23, Exhibit 5(a) and (b) of Post-Effective
Amendment No. 1 to Registrant's Registration Statement on Form N-1A (File Nos.
333-74295; 811-09333, filed May 28, 1999 (accession number 898430-99-002291)).
(8) Not applicable.
(9) Incorporated by reference to Item 23, Exhibit 7 of Post-Effective Amendment
No. 1 to Registrant's Registration Statement on Form N-1A (File Nos. 333-74295;
811-09333, filed May 28, 1999 (accession number 898430-99-002291)).
(10) Incorporated by reference to Item 23, Exhibit 13 of Post-Effective
Amendment No. 1 to Registrant's Registration Statement on Form N-1A (File Nos.
333-74295; 811-09333, filed May 28, 1999 (accession number 898430-99-002291)).
(11) Incorporated by reference to Item 23, Exhibit 9 of Post-Effective Amendment
No. 1 to Registrant's Registration Statement on Form N-1A (File Nos. 333-74295;
811-09333, filed May 28, 1999 (accession number 898430-99-002291)).
(12) (a) Opinion of KPMG LLP as to the tax consequences of the Stagecoach Funds,
Inc. reorganization, filed herewith.
(b) Opinion of KPMG LLP as to the tax consequences of the Norwest
Advantage Funds reorganization, filed herewith.
(13) Incorporated by reference to Item 23, Exhibit 8(a), (b), (c) and (d) of
Post-Effective Amendment No. 1 to Registrant's Registration Statement on Form
N-1A (File Nos. 333-74295; 811-09333, filed May 28, 1999 (accession number
898430-99-002291)).
(14) Not applicable.
(15) Not applicable.
(16) Powers of Attorney, incorporated by reference to Post-Effective Amendment
No. 1, filed June 3, 1999.
(17) Not applicable.
ITEM 17. UNDERTAKINGS.
(1) Not applicable.
(2) Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Amendment to its Registration Statement
on Form N-14 pursuant to Rule 485(b) under the Securities Act of 1933, and has
duly caused this Amendment to be signed on its behalf by the undersigned,
thereto duly authorized in the City of Little Rock and State of Arkansas on the
29th day of February, 2000.
This firm represented the Trust in connection with the preparation of this
Post-Effective Amendment. In accordance with the provisions of paragraph (b) of
Rule 485, we are not aware of any disclosures that would render it ineligible to
become effective under paragraph (b) of Rule 485.
WELLS FARGO FUNDS TRUST
By: /s/ Richard H. Blank, Jr.
-----------------------------------------
Richard H. Blank, Jr.
Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons on the 29th day of February,
2000.
SIGNATURES TITLE
-------------------------- --------------------------
1) Principal
Executive Officer
* Chairman and President
--------------------------
W. Rodney Hughes
2) Principal Financial
and Accounting Officer
* Secretary and Treasurer
--------------------------
Robert C. Brown
3) A Majority of the Trustees*
Robert C. Brown Trustee
Donald H. Burkhardt Trustee
Jack S. Euphrat Trustee
Thomas S. Goho Trustee
Peter G. Gordon Trustee
W. Rodney Hughes Trustee
Richard M. Leach Trustee
J. Tucker Morse Trustee
Timothy J. Penny Trustee
Donald C. Willeke Trustee
*By: /s/ Richard H. Blank, Jr.
-----------------------------------------
Richard H. Blank, Jr.
(Attorney-in-fact)
<PAGE>
SIGNATURES
As required by the Investment Company Act of 1940, this Registration Statement
of Wells Fargo Funds Trust has been signed on its behalf by Wells Fargo Core
Trust (Delaware) in the City of Little Rock and State of Arkansas on the 29th
day of February, 2000.
WELLS FARGO CORE TRUST
By: /s/ Richard H. Blank, Jr.
-----------------------------------------
Richard H. Blank, Jr.
Assistant Secretary
This Registration Statement has been signed by the following persons on the
29th day of February, 2000.
SIGNATURES TITLE
-------------------------- --------------------------
1) Principal
Executive Officer
* Chairman and President
--------------------------
W. Rodney Hughes
2) Principal Financial
and Accounting Officer
* Secretary and Treasurer
--------------------------
Robert C. Brown
3) A Majority of the Trustees*
Robert C. Brown Trustee
Donald H. Burkhardt Trustee
Jack S. Euphrat Trustee
Thomas S. Goho Trustee
Peter G. Gordon Trustee
W. Rodney Hughes Trustee
Richard M. Leach Trustee
J. Tucker Morse Trustee
Timothy J. Penny Trustee
Donald C. Willeke Trustee
*By: /s/ Richard H. Blank, Jr.
--------------------------------------------
Richard H. Blank, Jr.
(Attorney-in-fact)
<PAGE>
Exhibit Index
Exhibit No. Exhibit
EX-99.b(12)(a) Opinion of KPMG LLP regarding Stagecoach Funds, Inc.
EX-99.B(12)(b) Opinion of KPMG LLP regarding Norwest Advantage Funds
<PAGE>
Exhibit 99.B(12)(a)
[KPMG LLP LETTERHEAD]
November 5, 1999
Stagecoach Funds, Inc.
111 Center Street
Little Rock, Arkansas 72201
Wells Fargo Funds Trust
111 Center Street
Little Rock, Arkansas 72201
Ladies & Gentlemen:
You have requested the opinion of KPMG LLP ("KPMG") as to certain U.S. federal
income tax consequences in connection with the Agreement and Plan of
Reorganization, dated as of March 26, 1999 (the "Plan"), by and between
Stagecoach Funds, Inc. ("Stagecoach") for itself and on behalf of its series
listed in Exhibit A (each a "Target Fund"), and Wells Fargo Funds Trust ("Wells
Trust") for itself and on behalf of its series listed in Exhibit A (each an
"Acquiring Fund") pursuant to which: i) Target Fund will transfer all of its
assets to the Acquiring Fund solely in exchange for voting shares of the
Acquiring Fund; ii) the Acquiring Fund will assume all liabilities of the Target
Fund; iii) Target Fund will distribute to its shareholders all of the voting
shares received from the Acquiring Fund; and iv) Target Fund will be liquidated
(hereinafter referred to as the "Transaction"). Except as otherwise provided,
all terms not defined herein shall have the meanings ascribed to them (or
defined by reference) in the Plan.
In connection with the rendering of this opinion KPMG has reviewed the
Registration Statement of Wells Trust on Form N-14 relating to the Transaction
(the "Registration Statement") and the Plan. In addition, KPMG has reviewed and
relied upon the representations made by the Target Fund and Acquiring Fund in
their respective Representation Letters dated November 5, 1999 (collectively,
the Representations").
FACTS AND ASSUMPTIONS
Target Fund is a series of an existing Maryland corporation organized on October
28, 1993. Acquiring Fund is a series of a Delaware business trust organized on
March 10, 1999. Both the Target Fund and the Acquiring Fund are a regulated
investment company ("RIC") within the meaning of Section 851/1 for the current
year and all prior years.
- -----------------------------------
1 All references to "Section" are to the Internal Revenue Code of 1986, as
amended.
<PAGE>
Stagecoach Funds, Inc.
Wells Fargo Funds Trust
November 5, 1999
For what has been represented by management of Stagecoach and Wells Trust to be
valid business reasons, the following transaction is proposed:
1. Target Fund will transfer all of its assets to the Acquiring Fund solely in
exchange for voting shares of the Acquiring Fund and the assumption by the
Acquiring Fund of the liabilities of Target Fund; and
2. Target Fund will liquidate and distribute the voting shares of the
Acquiring Fund received in the exchange to its shareholders in exchange for
their shares in Target Fund.
REPRESENTATIONS
The following representations have been made in connection with each
Transaction:
(a) Each shareholder of the Target Fund who exchanges voting shares of the
Target Fund pursuant to the Transaction will receive solely voting
shares of the Acquiring Fund in exchange therefor.
(b) At the time of the Transaction, the Acquiring Fund either has no current
plan or intent to sell more than two-thirds of the historical assets of
the Target Fund or in any case where it is the current plan or intention
for the Acquiring Fund to sell more than two-thirds of Target Fund
historical assets, the proceeds of such sales will be reinvested in
assets of a same or similar quality or in a fashion consistent with the
investment objective of the Target Fund.
(c) The fair market value of the voting shares of the Acquiring Fund
received by each shareholder of the Target Fund will be equal to the
fair market value of the voting shares of the Target Fund exchanged
therefor.
(d) The Acquiring Fund will acquire at least 90% of the fair market value of
the net assets and at least 70% of the fair market value of the gross
assets held by the Target Fund immediately prior to the Transaction. For
purposes of this representation, amounts used by the Target Fund to pay
its Transaction expenses; amounts, if any, paid by the Target Fund for
redemptions (other than redemptions made pursuant to Section 22(e) of
the Investment Company Act of 1940 upon a demand of a shareholder); and
distributions (except for distributions made in the ordinary course of
business by the Target Fund in its capacity as a regulated investment
company) immediately preceding the Transaction will be included as
assets of the Target Fund held immediately prior to the Transaction.
(e) The Acquiring Fund will assume all of the Target Fund's liabilities and
such liabilities were or will have been incurred by the Target Fund in
the ordinary course of business. No other person related to the
Acquiring Fund will assume any Target Fund liability in the Transaction.
(f) The adjusted basis and fair market value of the Target Fund's assets
transferred to the Acquiring Fund will equal or exceed the sum of the
liabilities assumed by the Acquiring Fund in the Transaction.
(g) The Acquiring Fund will not pay the reorganization expenses of any other
person, including any Target Fund shareholder; however, Wells Fargo Bank
N.A. will pay the reorganization expenses incurred by both the Acquiring
Fund and the Target Fund. In all cases where Wells Fargo Bank N.A. pays the
Target Fund's reorganization expenses, Wells Fargo Bank N.A. will pay the
Target Fund expenses directly, and in no case will Wells Fargo Bank N.A.
transfer any property to the Target Fund for purposes of the Target Fund
paying any liability, including its reorganization expenses. For purposes
of this representation, the term reorganization expenses means those
expenses that are solely and directly related to the Transaction (i.e.,
legal and accounting expenses, appraisal fees, administrative costs of the
Target Fund directly related to the Transaction such as those incurred for
printing, clerical work, telephone and telegraph, security underwriting and
registration fees and expenses, transfer taxes, and transfer agent fees and
expenses).
(h) There is no intercorporate indebtedness existing between the Acquiring
Fund and the Target Fund that was issued, acquired, or will be settled
at a discount.
(i) Both the Target Fund and the Acquiring Fund are a RIC within the
meaning of Section 851.
(j) Neither the Target Fund, nor the Acquiring Fund is under the
jurisdiction of a court in a title 11 or similar case within the
meaning of Section 368(a)(3)(A).
(k) Target Fund has no options, warrants or rights outstanding with respect
to its shares and Target Fund has not redeemed any options, warrants or
rights with respect to its shares pursuant to the Transaction.
SCOPE OF OPINION
The opinions expressed herein are rendered only with respect to the specific
matters discussed herein. We express no opinion with respect to any other
federal or state income tax or legal aspect of the Transaction and no inference
should be drawn with respect to any matter not expressly opined upon.
Our opinions are based upon the Facts and Assumptions and Representations set
forth above. If any of the above-stated facts, assumptions or Representations
are not entirely complete or accurate, it is imperative that we be informed
immediately, as the inaccuracy or incompleteness could have a material effect on
our conclusions. In rendering our opinions, we are relying upon the relevant
provisions of the Internal Revenue Code of 1986, as amended, the regulations
thereunder, and judicial and administrative interpretations thereof, all as of
the date of this letter. However, all the foregoing authorities are subject to
change or modification by subsequent legislative, regulatory, administrative, or
judicial decisions that can be retroactive in effect and, therefore, could also
affect our opinions. We assume no responsibility to update our opinions for any
such change or modification. The opinions contained herein are not binding upon
the Internal Revenue Service, any other tax authority or any court, and no
assurance can be given that a position contrary to that expressed herein will
not be asserted by a tax authority and ultimately sustained by a court.
To the best of our knowledge (including such due diligence as we have
performed), our opinions are not based on unreasonable factual or legal
assumptions (including assumptions as to future events) and we have not
unreasonably relied on the Representations, statements, findings, or agreements
of any person.
In connection with the rendering of these opinions we have reviewed the
Registration Statement, and the Plan. We have not made any independent
investigation of these representations or the facts and circumstances involved
in the Transaction discussed herein. We have not examined any agreement to
determine whether it complies with applicable federal, state, or local law. We
have assumed that all actions required to effect the Transaction are effectuated
in accordance with applicable federal, state, and local law and the terms of any
relevant agreements.
The opinions expressed herein are for the exclusive benefit of the Target Fund,
the Acquiring Fund, and their respective shareholders and may not be relied upon
for any other purpose, or used, circulated, quoted or relied upon by any other
person or entity without our prior written consent.
OPINION
Based upon the FACTS AND ASSUMPTIONS and REPRESENTATIONS as set forth above, and
subject to the conditions and limitations included in the portion of this letter
entitled SCOPE OF OPINION, it is the opinion of KPMG that the following federal
income tax consequences will result from the Transaction:
(1) The Transaction will constitute a "reorganization" within the meaning of
Section 368(a). The Acquiring Fund and the Target Fund each will be a
"party to a reorganization." Section 368(b).
(2) Target Fund's shareholders will recognize no gain or loss solely on their
receipt of voting shares of the Acquiring Fund in exchange for their voting
shares of the Target Fund pursuant to the Transaction. Section 354(a)(1).
(3) Target Fund will not recognize gain or loss on the transfer of all of its
assets to the Acquiring Fund solely in exchange for voting shares of the
Acquiring Fund and the assumption by the Acquiring Fund of Target Fund
liabilities pursuant to the Transaction. Sections 357(a) and 361(a).
(4) Target Fund will not recognize gain or loss on its distribution of voting
shares of the Acquiring Fund to its shareholders pursuant to the
liquidation of the Target Fund. Section 361(c).
(5) Acquiring Fund will not recognize gain or loss on its acquisition of all of
the assets of the Target Fund solely in exchange for voting shares of the
Acquiring Fund and the assumption by the Acquiring Fund of the Target
Fund's liabilities. Section 1032(a).
(6) The basis of each of the voting shares of the Acquiring Fund received by
the Target Fund's shareholders pursuant to the Transaction will equal the
basis of the voting shares of the Target Fund surrendered in exchange
therefor. Section 358(a)(1).
(7) The holding period of the voting shares of the Acquiring Fund received by
the Target Fund's shareholders pursuant to the Transaction will include the
period that the shareholders held the voting shares of the Target Fund
exchanged therefor, provided that the shareholder held such shares as a
capital asset on the date of the Transaction. Section 1223(1).
(8) The Acquiring Fund's basis in the assets of the Target Fund received
pursuant to the Transaction will equal the Target Fund's basis in the
assets immediately before the Transaction. Section 362(b).
(9) The Acquiring Fund's holding period in the Target Fund assets received
pursuant to the Transaction will include the period during which the Target
Fund held the assets. Section 1223(2).
(10) The Acquiring Fund will succeed to and take into account the items of the
Target Fund described in Section 381(c), including the earnings and
profits, or deficit in earnings and profits, of the Target Fund as of the
date of the Transaction. The Acquiring Fund will take these items into
account subject to the conditions and limitations specified in Sections
381, 382, 383 and 384 and applicable regulations thereunder.
Very truly yours,
/s/ KPMG LLP
KPMG LLP
By: Todd A. Watchmaker, Partner
<PAGE>
<TABLE>
<S> <C>
Exhibit A
- -------------------------------------------------------------- -----------------------------------------------------------
Corresponding Targets Acquiring Funds
- -------------------------------------------------------------- -----------------------------------------------------------
- -------------------------------------------------------------- -----------------------------------------------------------
Asset Allocation Fund Asset Allocation Fund
- -------------------------------------------------------------- -----------------------------------------------------------
- -------------------------------------------------------------- -----------------------------------------------------------
Balanced Fund Asset Allocation Fund
- -------------------------------------------------------------- -----------------------------------------------------------
- -------------------------------------------------------------- -----------------------------------------------------------
Diversified Equity Income Fund Income Equity Fund
- -------------------------------------------------------------- -----------------------------------------------------------
- -------------------------------------------------------------- -----------------------------------------------------------
Government Money Market Fund Government Money Market Fund
- -------------------------------------------------------------- -----------------------------------------------------------
- -------------------------------------------------------------- -----------------------------------------------------------
Growth Fund Growth Fund
- -------------------------------------------------------------- -----------------------------------------------------------
- -------------------------------------------------------------- -----------------------------------------------------------
Money Market Fund Money Market Fund
- -------------------------------------------------------------- -----------------------------------------------------------
- -------------------------------------------------------------- -----------------------------------------------------------
National Tax-Free Fund Tax-Free Income Fund
- -------------------------------------------------------------- -----------------------------------------------------------
- -------------------------------------------------------------- -----------------------------------------------------------
Short-Intermediate U.S. Government Income Fund Short-Intermediate U.S. Government Income Fund
- -------------------------------------------------------------- -----------------------------------------------------------
- -------------------------------------------------------------- -----------------------------------------------------------
Small Cap Fund Small Cap Fund
- -------------------------------------------------------------- -----------------------------------------------------------
- -------------------------------------------------------------- -----------------------------------------------------------
Strategic Growth Fund Small Cap Fund
- -------------------------------------------------------------- -----------------------------------------------------------
- -------------------------------------------------------------- -----------------------------------------------------------
U.S. Government Allocation Fund Intermediate Government Income Fund
- -------------------------------------------------------------- -----------------------------------------------------------
- -------------------------------------------------------------- -----------------------------------------------------------
U.S. Government Income Fund Intermediate Government Income Fund
- -------------------------------------------------------------- -----------------------------------------------------------
</TABLE>
<PAGE>
Exhibit 99.B(12)(b)
[KPMG LLP LETTERHEAD]
November 5, 1999
Norwest Advantage Funds
Two Portland Square
Portland, Maine 04101
Wells Fargo Funds Trust
111 Center Street
Little Rock, Arkansas 72201
Ladies & Gentlemen:
You have requested the opinion of KPMG LLP ("KPMG") as to certain U.S. federal
income tax consequences in connection with the Agreement and Plan of
Reorganization, dated as of March 26, 1999 (the "Plan"), by and between Norwest
Advantage Funds ("Norwest Trust") for itself and on behalf of its series listed
in Exhibit A (each a "Target Fund"), and Wells Fargo Funds Trust ("Wells Trust")
for itself and on behalf of its series listed in Exhibit A (each an "Acquiring
Fund") pursuant to which: i) Target Fund will transfer all of its assets to the
Acquiring Fund solely in exchange for voting shares of the Acquiring Fund; ii)
the Acquiring Fund will assume all liabilities of the Target Fund; iii) Target
Fund will distribute to its shareholders all of the voting shares received from
the Acquiring Fund; and iv) Target Fund will be liquidated (hereinafter referred
to as the "Transaction"). Except as otherwise provided, all terms not defined
herein shall have the meanings ascribed to them (or defined by reference) in the
Plan.
In connection with the rendering of this opinion KPMG has reviewed the
Registration Statement of Wells Trust on Form N-14 relating to the Transaction
(the "Registration Statement") and the Plan. In addition, KPMG has reviewed and
relied upon the representations made by the Target Fund and Acquiring Fund in
their respective Representation Letters dated November 5, 1999 (collectively,
the "Representations").
FACTS AND ASSUMPTIONS
Target Fund is a series of an existing Delaware business trust organized on
December 7, 1993. Acquiring Fund is a series of a Delaware business trust
organized on March 10, 1999. Both the Target Fund and the Acquiring Fund are a
regulated investment company ("RIC") within the meaning of Section 851/1 for the
current year and all prior years.
- --------------------------------------
1 All references to "Section" are to the Internal Revenue Code of 1986, as
amended.
<PAGE>
Norwest Advantage Funds
Wells Fargo Funds Trust
November 5, 1999
For what has been represented by management of Norwest Trust and Wells Trust to
be valid business reasons, the following transaction is proposed:
1. Target Fund will transfer all of its assets to the Acquiring Fund solely in
exchange for voting shares of the Acquiring Fund and the assumption by the
Acquiring Fund of the liabilities of Target Fund; and
2. Target Fund will liquidate and distribute the voting shares of the
Acquiring Fund received in the exchange to its shareholders in exchange for
their shares in Target Fund.
REPRESENTATIONS
The following representations have been made in connection with each
Transaction:
(a) Each shareholder of the Target Fund who exchanges voting shares of the
Target Fund pursuant to the Transaction will receive solely voting shares
of the Acquiring Fund in exchange therefor.
(b) At the time of the Transaction, the Acquiring Fund either has no current
plan or intent to sell more than two-thirds of the historical assets of the
Target Fund or in any case where it is the current plan or intention for
the Acquiring Fund to sell more than two-thirds of Target Fund historical
assets, the proceeds of such sales will be reinvested in assets of a same
or similar quality or in a fashion consistent with the investment objective
of the Target Fund.
(c) The fair market value of the voting shares of the Acquiring Fund received
by each shareholder of the Target Fund will be equal to the fair market
value of the voting shares of the Target Fund exchanged therefor.
(d) The Acquiring Fund will acquire at least 90% of the fair market value of
the net assets and at least 70% of the fair market value of the gross
assets held by the Target Fund immediately prior to the Transaction. For
purposes of this representation, amounts used by the Target Fund to pay its
Transaction expenses; amounts, if any, paid by the Target Fund for
redemptions (other than redemptions made pursuant to Section 22(e) of the
Investment Company Act of 1940 upon a demand of a shareholder); and
distributions (except for distributions made in the ordinary course of
business by the Target Fund in its capacity as a regulated investment
company) immediately preceding the Transaction will be included as assets
of the Target Fund held immediately prior to the Transaction.
(e) The Acquiring Fund will assume all of the Target Fund's liabilities and
such liabilities were or will have been incurred by the Target Fund in the
ordinary course of business. No other person related to the Acquiring Fund
will assume any Target Fund liability in the Transaction.
(f) The adjusted basis and fair market value of the Target Fund's assets
transferred to the Acquiring Fund will equal or exceed the sum of the
liabilities assumed by the Acquiring Fund in the Transaction.
(g) The Acquiring Fund will not pay the reorganization expenses of any other
person, including any Target Fund shareholder; however, Wells Fargo Bank
N.A. will pay the reorganization expenses incurred by both the Acquiring
Fund and the Target Fund. In all cases where Wells Fargo Bank N.A. pays the
Target Fund's reorganization expenses, Wells Fargo Bank N.A. will pay the
Target Fund expenses directly, and in no case will Wells Fargo Bank N.A.
transfer any property to the Target Fund for purposes of the Target Fund
paying any liability, including its reorganization expenses. For purposes
of this representation, the term reorganization expenses means those
expenses that are solely and directly related to the Transaction (i.e.,
legal and accounting expenses, appraisal fees, administrative costs of the
Target Fund directly related to the Transaction such as those incurred for
printing, clerical work, telephone and telegraph, security underwriting and
registration fees and expenses, transfer taxes, and transfer agent fees and
expenses).
(h) There is no intercorporate indebtedness existing between the Acquiring Fund
and the Target Fund that was issued, acquired, or will be settled at a
discount.
(i) Both the Target Fund and the Acquiring Fund are a RIC within the meaning of
Section 851.
(j) Neither the Target Fund nor the Acquiring Fund is under the jurisdiction of
a court in a title 11 or similar case within the meaning of Section
368(a)(3)(A).
(k) Target Fund has no options, warrants or rights outstanding with respect
to its shares and Target Fund has not redeemed any options, warrants or
rights with respect to its shares pursuant to the Transaction.
SCOPE OF OPINION
The opinions expressed herein are rendered only with respect to the specific
matters discussed herein. We express no opinion with respect to any other
federal or state income tax or legal aspect of the Transaction and no inference
should be drawn with respect to any matter not expressly opined upon.
Our opinions are based upon the Facts and Assumptions and Representations set
forth above. If any of the above-stated facts, assumptions or Representations
are not entirely complete or accurate, it is imperative that we be informed
immediately, as the inaccuracy or incompleteness could have a material effect on
our conclusions. In rendering our opinions, we are relying upon the relevant
provisions of the Internal Revenue Code of 1986, as amended, the regulations
thereunder, and judicial and administrative interpretations thereof, all as of
the date of this letter. However, all the foregoing authorities are subject to
change or modification by subsequent legislative, regulatory, administrative, or
judicial decisions that can be retroactive in effect and, therefore, could also
affect our opinions. We assume no responsibility to update our opinions for any
such change or modification. The opinions contained herein are not binding upon
the Internal Revenue Service, any other tax authority or any court, and no
assurance can be given that a position contrary to that expressed herein will
not be asserted by a tax authority and ultimately sustained by a court.
To the best of our knowledge (including such due diligence as we have
performed), our opinions are not based on unreasonable factual or legal
assumptions (including assumptions as to future events) and we have not
unreasonably relied on the Representations, statements, findings, or agreements
of any person.
In connection with the rendering of these opinions we have reviewed the
Registration Statement including the Plan. We have not made any independent
investigation of these representations or the facts and circumstances involved
in the Transaction discussed herein. We have not examined any agreement to
determine whether it complies with applicable federal, state, or local law. We
have assumed that all actions required to effect the Transaction are effectuated
in accordance with applicable federal, state, and local law and the terms of any
relevant agreements.
The opinions expressed herein are for the exclusive benefit of the Target Fund,
the Acquiring Fund, and their respective shareholders and may not be relied upon
for any other purpose, or used, circulated, quoted or relied upon by any other
person or entity without our prior written consent.
OPINION
Based upon the FACTS AND ASSUMPTIONS and REPRESENTATIONS as set forth above, and
subject to the conditions and limitations included in the portion of this letter
entitled SCOPE OF OPINION, it is the opinion of KPMG that the following federal
income tax consequences will result from the Transaction:
(1) The Transaction will constitute a "reorganization" within the meaning of
Section 368(a). The Acquiring Fund and the Target Fund each will be a
"party to a reorganization." Section 368(b).
(2) Target Fund's shareholders will recognize no gain or loss solely on their
receipt of voting shares of the Acquiring Fund in exchange for their voting
shares of the Target Fund pursuant to the Transaction. Section 354(a)(1).
(3) Target Fund will not recognize gain or loss on the transfer of all of its
assets to the Acquiring Fund solely in exchange for voting shares of the
Acquiring Fund and the assumption by the Acquiring Fund of Target Fund
liabilities pursuant to the Transaction. Sections 357(a) and 361(a).
(4) Target Fund will not recognize gain or loss on its distribution of voting
shares of the Acquiring Fund to its shareholders pursuant to the
liquidation of the Target Fund. Section 361(c).
(5) Acquiring Fund will not recognize gain or loss on its acquisition of all of
the assets of the Target Fund solely in exchange for voting shares of the
Acquiring Fund and the assumption by the Acquiring Fund of the Target
Fund's liabilities. Section 1032(a).
(6) The basis of each of the voting shares of the Acquiring Fund received by
the Target Fund's shareholders pursuant to the Transaction will equal the
basis of the voting shares of the Target Fund surrendered in exchange
therefor. Section 358(a)(1).
(7) The holding period of the voting shares of the Acquiring Fund received by
the Target Fund's shareholders pursuant to the Transaction will include the
period that the shareholders held the voting shares of the Target Fund
exchanged therefor, provided that the shareholder held such shares as a
capital asset on the date of the Transaction. Section 1223(1).
(8) The Acquiring Fund's basis in the assets of the Target Fund received
pursuant to the Transaction will equal the Target Fund's basis in the
assets immediately before the Transaction. Section 362(b).
(9) The Acquiring Fund's holding period in the Target Fund assets received
pursuant to the Transaction will include the period during which the Target
Fund held the assets. Section 1223(2).
(10) The Acquiring Fund will succeed to and take into account the items of the
Target Fund described in Section 381(c), including the earnings and
profits, or deficit in earnings and profits, of the Target Fund as of the
date of the Transaction. The Acquiring Fund will take these items into
account subject to the conditions and limitations specified in Sections
381, 382, 383 and 384 and applicable regulations thereunder.
Very truly yours,
/s/ KPMG LLP
KPMG LLP
By: Todd A. Watchmaker, Partner
<PAGE>
<TABLE>
<S> <C>
Exhibit A
- -------------------------------------------------------------- -----------------------------------------------------------
Acquiring Funds Corresponding Targets
- -------------------------------------------------------------- -----------------------------------------------------------
- -------------------------------------------------------------- -----------------------------------------------------------
Growth Fund Valugrowth Stock Fund
- -------------------------------------------------------------- -----------------------------------------------------------
- -------------------------------------------------------------- -----------------------------------------------------------
Small Cap Fund Small Company Stock Fund
- -------------------------------------------------------------- -----------------------------------------------------------
- -------------------------------------------------------------- -----------------------------------------------------------
Income Equity Fund Income Equity Fund
- -------------------------------------------------------------- -----------------------------------------------------------
- -------------------------------------------------------------- -----------------------------------------------------------
Limited-Term Government Income Fund Limited-Term Government Income Fund
- -------------------------------------------------------------- -----------------------------------------------------------
- -------------------------------------------------------------- -----------------------------------------------------------
Intermediate Government Income Fund Intermediate Government Income Fund
- -------------------------------------------------------------- -----------------------------------------------------------
- -------------------------------------------------------------- -----------------------------------------------------------
Income Fund Income Fund
- -------------------------------------------------------------- -----------------------------------------------------------
- -------------------------------------------------------------- -----------------------------------------------------------
Income Fund Performa Strategic Value Bond Fund
- -------------------------------------------------------------- -----------------------------------------------------------
- -------------------------------------------------------------- -----------------------------------------------------------
Income Fund Total Return Bond Fund
- -------------------------------------------------------------- -----------------------------------------------------------
- -------------------------------------------------------------- -----------------------------------------------------------
Tax-Free Income Fund Tax-Free Income Fund
- -------------------------------------------------------------- -----------------------------------------------------------
- -------------------------------------------------------------- -----------------------------------------------------------
Treasury Plus Money Market Fund Treasury Plus Fund
- -------------------------------------------------------------- -----------------------------------------------------------
- -------------------------------------------------------------- -----------------------------------------------------------
Government Money Market Fund U.S. Government Fund
- -------------------------------------------------------------- -----------------------------------------------------------
- -------------------------------------------------------------- -----------------------------------------------------------
Cash Investment Money Market Fund Cash Investment Fund
- -------------------------------------------------------------- -----------------------------------------------------------
</TABLE>
